Exhibit 10.6
Private & Confidential
LOAN AGREEMENT
for a
loan of up to US$31,040,000
to
Q AMREEN SHIPPING LTD.
Q ANASTASIA SHIPPING LTD.
Q KAKI SHIPPING LTD.
and
Q HOUSTON SHIPPING LTD.
provided by
THE BANKS AND FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1
Arranger, Agent, Security Agent and Account Bank
ABN AMRO BANK N.V.
NORTON ROSE FULBRIGHT
Contents
Clause |
| Page |
|
|
|
1 Purpose and definitions |
| 1 |
2 The Total Commitment and the Advances |
| 27 |
3 Interest and Interest Periods |
| 32 |
4 Repayment and prepayment |
| 34 |
5 Fees, commitment commission and expenses |
| 38 |
6 Payments and taxes; accounts and calculations |
| 39 |
7 Representations and warranties |
| 42 |
8 Undertakings |
| 46 |
9 Conditions |
| 53 |
10 Events of Default |
| 54 |
11 Indemnities |
| 58 |
12 Unlawfulness and increased costs |
| 59 |
13 Security, set-off and pro-rata payments |
| 60 |
14 Cash Collateral Account |
| 63 |
15 Assignment, transfer and lending office |
| 63 |
16 Arranger, Agent and Security Agent |
| 66 |
17 Notices and other matters |
| 76 |
18 Governing law and jurisdiction |
| 79 |
Schedule 1 The Banks and their Commitments |
| 81 |
Schedule 2 Form of Drawdown Notice |
| 82 |
Schedule 3 Documents and evidence required as conditions precedent to the Loan being made |
| 84 |
Schedule 4 Form of Transfer Certificate |
| 94 |
Schedule 5 Form of Trust Deed |
| 99 |
Schedule 6 Form of Corporate Guarantee |
| 100 |
Schedule 7 Form of Collateral Guarantee |
| 101 |
Schedule 8 Form of Pre-delivery Security Assignment |
| 102 |
Schedule 9 Form of Share Pledge |
| 103 |
Schedule 10 Form of Mortgage |
| 104 |
Schedule 11 Form of General Assignment |
| 105 |
Schedule 12 Form of Manager’s Undertaking |
| 106 |
THIS AGREEMENT is dated 14 August 2013 and made BETWEEN:
(1) Q AMREEN SHIPPING LTD. Q ANASTASIA SHIPPING LTD., Q KAKI SHIPPING LTD. and Q HOUSTON SHIPPING LTD. as joint and several Borrowers;
(2) ABN AMRO BANK N.V. as Arranger, Agent, Security Agent and Account Bank; and
(3) THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set out in schedule 1 as Banks.
IT IS AGREED as follows:
1 Purpose and definitions
1.1 Purpose
This Agreement sets out the terms and conditions upon and subject to which the Banks agree, according to their several obligations, to make available to the Borrowers, jointly and severally, in up to fourteen (14) Advances, a loan of up to Thirty one million forty thousand Dollars ($31,040,000) for the purpose of financing part of the construction and acquisition cost of the Borrowers’ Ships.
1.2 Definitions
In this Agreement, unless the context otherwise requires:
“Account Bank” means ABN AMRO Bank N.V. a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam (or of such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) or such other bank as may be designated by the Agent as the Account Bank for the purposes of this Agreement and includes its successors in title;
“Advance” means each borrowing of a proportion of the Total Commitment by the Borrowers or (as the context may require) the principal amount of such borrowing outstanding at any relevant time, and:
(a) in relation to the Q Amreen Ship, means each Q Amreen Advance; or
(b) in relation to the Q Anastasia Ship, means each Q Anastasia Advance; or
(c) in relation to the Q Kaki Ship, means each Q Kaki Advance; or
(d) in relation to the Q Houston Ship, means each Q Houston Advance,
and “Advances” means, together, all or any of them;
“Agent” means ABN AMRO Bank N.V. a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam (or of such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) or such other person as may be appointed as agent by the Banks pursuant to clause 16.13 and includes its successors in title;
“Approved Shipbrokers” means, together, Arrow Research Ltd., H. Clarkson & Co. Ltd., SSY Valuation Services Ltd., RS Platou Shipbrokers A/S, Fearnleys A/S, Braemar Seascope Ltd. and Lorentzen & Stemoco A/S and includes their respective successors in title and “Approved Shipbroker” means each of them;
“Arranger” means ABN AMRO Bank N.V. a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam (or such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) and includes its successors in title;
“Banking Day” means a day on which dealings in deposits in Dollars are carried on in the London Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks are open for business in London, Amsterdam and New York City (or any other relevant place of payment under clause 6);
“Banks” means the banks and financial institutions listed in schedule 1 and includes their respective successors in title and Transferees and “Bank” means each of them;
“Basel II Accord” means 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 Approach” means, in relation to any Bank, either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Bank (or any of its holding companies) for the purposes of implementing or complying with the Basel II Accord;
“Basel II Regulation” means, in relation to any Bank:
(a) any law or regulation implementing the Basel II Accord; or
(b) any Basel II Approach adopted by that Bank,
but excludes any law or regulation implementing the Basel III Accord save and to the extent that it is a re-enactment of any law or regulation referred to in paragraph (a) of this definition;
“Basel III Accord” means, together, “Basel III: A global regulatory framework for more resilient banks and banking systems” and “Basel III: International framework for liquidity risk measurement, standards and monitoring” both published by the Basel Committee on Banking Supervision on 16th December, 2010, in either case in the form existing on the date of this Agreement;
“Basel III Regulation” means any law or regulation implementing the Basel III Accord save and to the extent that it re-enacts a Basel II Regulation;
“Borrowed Money” means Indebtedness in respect of (i) money borrowed or raised and debit balances at banks, (ii) any bond, note, loan stock, debenture or similar debt instrument, (iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted (otherwise than on a non-recourse basis), (v) deferred payments for assets or services acquired, (vi) finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts, futures and other derivatives, (viii) any other transaction (including without limitation forward sale or purchase agreements) having the commercial effect of a borrowing or raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person falling within any of (i) to (viii) above;
“Borrower” means:
(a) in relation to the Q Amreen Ship and each Q Amreen Advance, the Q Amreen Borrower; or
(b) in relation to the Q Anastasia Ship and each Q Anastasia Advance, the Q Anastasia Borrower; or
(c) in relation to the Q Kaki Ship and each Q Kaki Advance, the Q Kaki Borrower; or
(d) in relation to the Q Houston Ship and each Q Houston Advance, the Q Houston Borrower,
and “Borrowers” means, together, all or any of them;
“Borrowers’ Security Documents” means, at any relevant time, such of the Security Documents as shall have been executed by the Borrowers or any of them at such time;
“Borrowers’ Ships” means, together, the Q Amreen Ship, the Q Anastasia Ship, the Q Kaki Ship and the Q Houston Ship and “Borrower’s Ship” means any one of them;
“Builder” means:
(a) in relation to each Sungdong Ship, Sungdong Shipbuilding Marine Engineering Co., Ltd of 1609-2, Hwang-li, Gwangdomyeon, Tongyong-si, Gyeongnam, Korea; and
(b) in relation to each Imabari Ship, Imabari Shipbuilding Co., Ltd. of 14F, Hibiya Marine Bldg., 5-1, Yurakucho 1-Chome, Chiyoda-ku, Tokyo, Japan,
and includes their respective successors in title;
“Capital Adequacy Law” means any law or any regulation (whether or not having the force of law, but, if not having the force of law, with which the Banks or any of them or, as the case may be, any of their respective holding companies habitually complies), including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits or other banking or monetary controls or requirements which affect the manner in which a Bank allocates capital resources to its obligations hereunder (including, without limitation, those resulting from the implementation or application of or compliance with the Basel II Accord, the Basel III Accord, any Basel II Regulation or any Basel Ill Regulation);
“Cash Collateral Account” means an interest bearing Dollar account of the Corporate Guarantor opened or (as the context may require) to be opened by the Corporate Guarantor with the Account Bank and includes any sub-accounts thereof and any other account designated in writing by the Agent to be a Cash Collateral Account for the purposes of this Agreement;
“Cash Collateral Account Pledge” means the third priority pledge executed or (as the context may require) to be executed between the Corporate Guarantor and the Security Agent in respect of the Cash Collateral Account in such form as the Agent may require;
“Casualty Amount” means Five hundred thousand Dollars ($500,000) or the equivalent in any other currency;
“Change of Control” occurs when:
(a) the Robertson Disclosed Persons own shares (legally and/or beneficially, directly or indirectly) in the Corporate Guarantor which can cast or control the casting of less than 11% of the maximum number of votes that might be cast at a general meeting of the shareholders of the Corporate Guarantor; or
(b) the Riverstone Disclosed Persons own shares (legally and/or beneficially, directly or indirectly) in the Corporate Guarantor which can cast or control the casting of less than 20% of the maximum number of votes that might be cast at a general meeting of the shareholders of the Corporate Guarantor;
“Classification” means, in relation to each Collateral Ship, the highest class available for a vessel of her type with the relevant Classification Society or such other classification as the Agent shall, at the request of a Collateral Guarantor, have agreed in writing shall be treated as the Classification in relation to such Collateral Guarantor’s Ship for the purposes of the relevant Collateral Ship Security Documents;
“Classification Society” means, in relation to each Collateral Ship, Bureau Veritas or such other classification society which the Agent shall, at the request of a Collateral Guarantor, have agreed in writing shall be treated as the Classification Society in relation to such Collateral Guarantor’s Ship for the purposes of the relevant Collateral Ship Security Documents;
“Code” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention constituted pursuant to Resolution A. 741 (18) of the International Maritime Organisation and incorporated into the International Convention on Safety of Life at Sea 1974 (as amended) and includes any amendments or extensions thereto and any regulation issued pursuant thereto;
“Collateral Guarantees” means, together, the Q Jake Guarantee, the Q loanari Guarantee, the Q Arion Guarantee and the Q Shea Guarantee and “Collateral Guarantee” means each one of them;
“Collateral Guarantors” means, together, the Q Jake Guarantor, the Q loanari Guarantor, the Q Arion Guarantor and the Q Shea Guarantor and “Collateral Guarantor” means each one of them;
“Collateral Ship” means:
(a) in relation to the Q Jake Guarantor, the Q Jake Ship; or
(b) in relation to the Q loanari Guarantor, the Q loanari Ship; or
(c) in relation to the Q Arion Guarantor, the Q Arion Ship; or
(d) in relation to the Q Shea Guarantor, the Q Shea Ship,
and “Collateral Ships” means, together, all or any of them;
“Collateral Ship Security Documents” means:
(a) in relation to the Q Jake Ship, the Q Jake Mortgage, the Q Jake General Assignment and the Manager’s Undertaking in respect of the Q Jake Ship; or
(b) in relation to the Q loanari Ship, the Q loanari Mortgage, the Q loanari General Assignment and the Manager’s Undertaking in respect of the Q loanari Ship; or
(c) in relation to the Q Arion Ship, the Q Arion Mortgage, the Q Arion General Assignment and the Manager’s Undertaking in respect of the Q Arion Ship; or
(d) in relation to the Q Shea Ship, the Q Shea Mortgage, the Q Shea General Assignment and the Manager’s Undertaking in respect of the Q Shea Ship;
“Commitment” means, in relation to each Bank, the amount set out opposite its name in the column headed “Commitment” in schedule 1 and/or, in the case of a Transferee, the amount transferred as specified in the relevant Transfer Certificate, as reduced or cancelled in each case by any relevant term of this Agreement;
“Compulsory Acquisition” means, in relation to a Ship, requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of that Ship by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title;
“Contract” means:
(a) in relation to the Q Amreen Ship, the Q Amreen Contract; or
(b) in relation to the Q Anastasia Ship, the Q Anastasia Contract; or
(c) in relation to the Q Kaki Ship, the Q Kaki Contract; or
(d) in relation to the Q Houston Ship, the Q Houston Contract,
and “Contracts” means, together, all or any of them;
“Contract Assignment Consent and Acknowledgement” means:
(a) in relation to the Q Amreen Ship, the Q Amreen Contract Assignment Consent and Acknowledgement; or
(b) in relation to the Q Anastasia Ship, the Q Anastasia Contract Assignment Consent and Acknowledgement; or
(c) in relation to the Q Kaki Ship, the Q Kaki Contract Assignment Consent and Acknowledgement; or
(d) in relation to the Q Houston Ship, the Q Houston Contract Assignment Consent and Acknowledgement,
and “Contract Assignment Consents and Acknowledgements” means, together, all or any of them;
“Contract Guarantee” means:
(a) in relation to the Q Kaki Ship, the Q Kaki Contract Guarantee; or
(b) in relation to the Q Houston Ship, the Q Houston Contract Guarantee,
and “Contract Guarantees” means, together, both of them;
“Contract Guarantee Assignment Consent and Acknowledgement” means:
(a) in relation to the Q Kaki Ship, the Q Kaki Contract Guarantee Assignment Consent and Acknowledgement; or
(b) in relation to the Q Houston Ship, the Q Houston Contract Guarantee Assignment Consent and Acknowledgement,
and “Contract Guarantee Assignment Consents and Acknowledgements” means, together, both of them;
“Contract Guarantor” means, in relation to each Imabari Ship, Itochu Corporation of 5-1, Kita Aoyama 2-Chome, Minato-ku, Tokyo, Japan and includes its successors in title;
“Contract Price” means:
(a) in relation to the Q Amreen Ship, the Q Amreen Contract Price; or
(b) in relation to the Q Anastasia Ship, the Q Anastasia Contract Price; or
(c) in relation to the Q Kaki Ship, the Q Kaki Contract Price; or
(d) in relation to the Q Houston Ship, the Q Houston Contract Price,
and “Contract Prices” means, together, all or any of them;
“Contribution” means, in relation to each Bank, the principal amount of the Loan owing to such Bank at any relevant time;
“Corporate Guarantee” means the corporate guarantee executed or (as the context may require) to be executed by the Corporate Guarantor in favour of the Security Agent in the form set out in schedule 6;
“Corporate Guarantor” means Quintana Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Creditors” means, together, the Arranger, the Agent, the Security Agent, the Account Bank and the Banks and “Creditor” means each one of them;
“Default” means any Event of Default or any event or circumstance which with the giving of notice or lapse of time or the satisfaction of any other condition (or any combination thereof) would constitute an Event of Default;
“Delivery” means, in relation to each Borrower’s Ship, the delivery of such Borrower’s Ship by the relevant Builder or (as the case may be) by the Seller to, and the acceptance of such Borrower’s Ship by, the relevant Borrower pursuant to the relevant Contract;
“Delivery Date” means, in relation to each Borrower’s Ship, the date on which such Borrower’s Ship is delivered to the relevant Borrower in accordance with the relevant Contract;
“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the Code;
“Dollars” and “$” mean the lawful currency of the United States of America and in respect of all payments to be made under any of the Security Documents mean funds which are for same day settlement in the New York Clearing House Interbank Payments System (or such other US dollar funds as may at the relevant time be customary for the settlement of international banking transactions denominated in U.S. dollars);
“Drawdown Date” means, in relation to each Advance, any date, being a Banking Day falling during the Drawdown Period for such Advance, on which the relevant Advance is, or is to be, made available;
“Drawdown Notice” means, in relation to each Advance, a notice substantially in the form of schedule 2 in respect of such Advance;
“Drawdown Period” means, in relation to each Advance, the period commencing on the date of this Agreement and ending on the relevant Termination Date or the period ending on such earlier date (if any) on which (a) the aggregate amount of the Advances is equal to the Total Commitment or (b) the Total Commitment in respect of such Advance is reduced to zero pursuant to clauses 4.3, 10.2 or 12;
“Earnings” means, in relation to each Collateral Ship, all moneys whatsoever from time to time due or payable to the relevant Collateral Guarantor during the Security Period arising out of the use or operation of such Collateral Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising out of pooling arrangements, compensation payable to such Collateral Guarantor in the event of requisition of such Collateral Ship for hire, remuneration for salvage or towage services, demurrage and detention moneys and damages for breach (or payment for variation or termination) of any charterparty or other contract for the employment of such Collateral Ship;
“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest or other encumbrance of any kind securing any obligation of any person or any type of preferential arrangement (including without limitation title transfer and/or retention arrangements having a similar effect);
“Environmental Affiliate” means, in relation to a Collateral Guarantor, any agent or employee of such Collateral Guarantor or any other Relevant Party or any person having a contractual relationship with such Collateral Guarantor or any other Relevant Party in connection with any Relevant Ship or its operation or the carriage of cargo and/or passengers thereon and/or the provision of goods and/or services on or from any Relevant Ship;
“Environmental Approval” means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to any Relevant Ship or its operation or the carriage of cargo and/or passengers thereon and/or the provision of goods and/or services on or from any Relevant Ship required under any Environmental Law;
“Environmental Claim” means any and all enforcement, clean-up, removal or other governmental or regulatory actions or orders instituted or completed pursuant to any Environmental Law or any Environmental Approval together with claims made by any third party relating to damage, contribution, loss or injury, resulting from any actual or threatened emission, spill, release or discharge of a Pollutant from any Relevant Ship;
“Environmental Laws” means all national, international and state laws, rules, regulations, treaties and conventions applicable to any Relevant Ship pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage of Pollutants and actual or threatened emissions, spills, releases or discharges of Pollutants;
“Event of Default” means any of the events or circumstances described in clause 10.1;
“Existing Security Documents” shall have the meaning given to “Security Documents” in the Other Loan Agreement;
“FATCA” means:
(a) sections 1471 to 1474 of the Internal Revenue Code or any associated regulations or other official guidance;
(b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or
(c) any agreement pursuant to the implementation of 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 Internal Revenue Code (which relates to payments of interest and certain other payments from sources within the US), 1 January 2014;
(b) in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Internal Revenue Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2015; or
(c) in relation to a “passthru payment” described in section 1471(d)(7) of the Internal Revenue Code not falling within paragraphs (a) or (b) above, 1 January 2017,
or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement;
“FATCA Deduction” means a deduction or withholding from a payment under a Security Document required by FATCA;
“FATCA Exempt Party” means any Party that is entitled to receive payments free from any FATCA Deduction;
“FATCA FFI” means a foreign financial institution as defined in section 1471(d)(4) of the Internal Revenue Code which, if any Creditor is not a FATCA Exempt Party, could be required to make a FATCA Deduction;
“FATCA Protected Bank” means any Bank irrevocably designated as a FATCA Protected Bank by the Borrowers by notice to that Bank or the Agent at least six months prior to the earliest FATCA Application Date for a payment by a Security Party to that Bank;
“First Advance” means:
(a) in relation to the Q Amreen Ship, the First Q Amreen Advance; or
(b) in relation to the Q Anastasia Ship, the First Q Anastasia Advance; or
(c) in relation to the Q Kaki Ship, the First Q Kaki Advance; or
(d) in relation to the Q Houston Ship, the First Q Houston Advance,
and “First Advances” means, together, all or any of them;
“First Q Amreen Advance” means an advance of up to $1,880,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the first instalment of the Q Amreen Contract Price payable by the Q Amreen Borrower pursuant to Article X.2(a)(i) of the Q Amreen Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“First Q Anastasia Advance” means an advance of up to $1,880,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the first instalment of the Q Anastasia Contract Price payable by the Q Anastasia Borrower pursuant to Article X.2(a)(i) of the Q Anastasia Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“First Q Houston Advance” means an advance of up to $3,060,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the first instalment of the Q Houston Contract Price payable by the Q Houston Borrower pursuant to the Q Houston Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“First Q Kaki Advance” means an advance of up to $3,060,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the first instalment of the Q Kaki Contract Price payable by the Q Kaki Borrower pursuant to the Q Kaki Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Flag State” means, in respect of each Collateral Ship, the Republic of the Marshall Islands or such other state or territory designated in writing by the Agent, at the request of a Collateral Guarantor, as being the “Flag State” of such Collateral Guarantor’s Ship for the purposes of the relevant Collateral Ship Security Documents;
“Fleet Vessels” means the vessels from time to time owned by the members of the Group (which for the avoidance of doubt includes any vessels under construction at the time) and “Fleet Vessel” means each of them;
“Fourth Advance” means:
(a) in relation to the Q Amreen Ship, the Fourth Q Amreen Advance; or
(b) in relation to the Q Anastasia Ship, the Fourth Q Anastasia Advance,
and “Fourth Advances” means, together, both of them;
“Fourth Q Amreen Advance” means an advance of up to $1,880,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the fourth instalment of the Q Amreen Contract Price payable by the Q Amreen Borrower pursuant to Article 2(a)(iv) of the Q Amreen Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Fourth Q Anastasia Advance” means an advance of up to $1,880,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the fourth
instalment of the Q Anastasia Contract Price payable by the Q Anastasia Borrower pursuant to Article 2(a)(iv) of the Q Anastasia Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“General Assignment” means:
(a) in relation to the Q Jake Ship, the Q Jake General Assignment; or
(b) in relation to the Q loanari Ship, the Q loanari General Assignment; or
(c) in relation to the Q Arion Ship, the Q Arion General Assignment; or
(d) in relation to the Q Shea Ship, the Q Shea General Assignment,
and “General Assignments” means, together, all or any of them;
“Government Entity” means and includes (whether having a distinct legal personality or not) any national or local government authority, board, commission, department, division, organ, instrumentality, court or agency and any association, organisation or institution of which any of the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in whose activities any of the foregoing is a participant;
“Group” means, together, the Corporate Guarantor and its Subsidiaries from time to time and “member of the Group” shall be construed accordingly;
“Imabari Ship Advances” means, together, the Q Kaki Advances and the Q Houston Advances;
“Imabari Ships” means, together, the Q Kaki Ship and the Q Houston Ship and “Imabari Ship” means either one of them;
“Indebtedness” means any obligation for the payment or repayment of money, whether as principal or as surety and whether present or future, actual or contingent;
“Insurances” means, in relation to each Collateral Ship, all policies and contracts of insurance (which expression includes all entries of such Collateral Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the relevant Collateral Guarantor (whether in the sole name of such Collateral Guarantor, or in the joint names of such Collateral Guarantor and the Security Agent or otherwise) in respect of such Collateral Guarantor’s Ship and her Earnings or otherwise howsoever in connection with such Collateral Ship and all benefits thereof (including claims of whatsoever nature and return of premiums);
“Interest Payment Date” means the last day of an Interest Period;
“Interest Period” means, in relation to each Advance, each period for the calculation of interest in respect of such Advance ascertained in accordance with clauses 3.2 and 3.3;
“Internal Revenue Code” means the US Internal Revenue Code of 1986;
“ISPS Code” means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organization now set out in Chapter XI-2 of the International Convention for the Safety of Life at Sea 1974 (as amended) as adopted by a Diplomatic conference of the International Maritime Organisation on Maritime Security in December 2002 and includes any amendments or extensions thereto and any regulation issued pursuant thereto;
“ISSC” means an International Ship Security Certificate issued pursuant to the ISPS Code;
“LIBOR” means, in relation to any amount and for any period, the offered rate (if any) for deposits of Dollars for such amount and for such period which is:
(a) the rate for such period as displayed on Reuters page LIBOR01 (British Bankers’ Association Interest Settlement Rates) (or such other page as may replace such page LIBOR 01 on such system or on any other system of the information vendor for the time being designated by the British Bankers’ Association to calculate the BBA Interest Settlement Rate (as defined in the British Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS” terms) applicable at the relevant time) or, if the British Bankers’ Association ceases to act in the role of administering and publishing LIBOR rates, the equivalent rate published by a subsequently appointed administrator of LIBOR, in each case at or about 11:00 a.m. (Rotterdam time) on the Quotation Date for such period; or
(b) if on such date the relevant page is not displayed on the Reuters screen or the Reuters screen is not operating at the relevant time or there is no rate available at the relevant time, the rate quoted by the Bank as the Bank’s offered rate for deposits of Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to such period to prime banks in the London Interbank Market at or about 11:00 a.m. (Rotterdam time) on the Quotation Date for such period.
provided however that, for all purposes under this Agreement (other than clause 3.6 and the determination of a market disruption event), if any such rate is below zero, LIBOR will be deemed to be zero;
“Loan” means the aggregate principal amount owing to the Banks under this Agreement at any relevant time;
“Majority Banks” means at any relevant time Banks (i) the aggregate of whose Contributions exceeds 662/3% of the Loan or (ii) (if no principal amounts are outstanding under this Agreement) the aggregate of whose Commitments exceeds 662/3% of the Total Commitment;
“Management Agreement” means:
(a) in relation to the Q Amreen Ship, the Q Amreen Management Agreement; or
(b) in relation to the Q Anastasia Ship, the Q Anastasia Management Agreement; or
(c) in relation to the Q Kaki Ship, the Q Kaki Management Agreement; or
(d) in relation to the Q Houston Ship, the Q Houston Management Agreement; or
(e) in relation to the Q Jake Ship, the Q Jake Management Agreement; or
(f) in relation to the Q loanari Ship, the Q loanari Management Agreement; or
(g) in relation to the Q Arion Ship, the Q Arion Management Agreement; or
(h) in relation to the Q Shea Ship, the Q Shea Management Agreement,
and “Management Agreements” means, together, all or any of them;
“Manager” means, in relation to a Ship, Quintana Ship Management Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 or any other person appointed by an Owner, with the prior written consent of the Agent, as the manager of such Owner’s Ship and includes its successors in title;
“Manager’s Undertakings” means, in relation to a Ship, collectively, the manager’s undertakings and (where applicable) assignments executed or (as the context may require) to be executed by the Manager in favour of the Security Agent in respect of each of the Ships each in the form set out in Part A of schedule 12 (in the case of the Collateral Ships) or in Part B of schedule 12 (in the case of the Borrowers’ Ships) and, singly, each a “Manager’s Undertaking”;
“Margin” means six point five per cent (6.5%) per annum;
“month” means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started, provided that (a) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (b) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and “months” and “monthly” shall be construed accordingly;
“Mortgage” means:
(a) in relation to the Q Jake Ship, the Q Jake Mortgage; or
(b) in relation to the Q loanari Ship, the Q loanari Mortgage; or
(c) in relation to the Q Arion Ship, the Q Arion Mortgage; or
(d) in relation to the Q Shea Ship, the Q Shea Mortgage,
and “Mortgages” means, together, all or any of them;
“Mortgaged Ship” means, at any relevant time, any Collateral Ship which is at such time subject to a Mortgage and/or the Earnings, Insurances and Requisition Compensation of which are subject to an Encumbrance pursuant to the relevant Collateral Ship Security Documents and a Collateral Ship shall, for the purposes of this Agreement, be deemed to be a Mortgaged Ship as from the date that the Mortgage of that Collateral Ship shall have been executed and registered in accordance with this Agreement until whichever shall be the earlier of (i) the payment in full of the amount required to be paid by the Borrowers to Agent pursuant to clause 4.3 following the sale or Total Loss of such Collateral Ship and (ii) the date on which all moneys owing under the Security Documents have been repaid in full;
“Operator” means, in relation to a Collateral Ship, any person who is from time to time during the Security Period concerned in the operation of such Collateral Ship and falls within the definition of “Company” set out in rule 1.1.2 of the Code;
“Other Loan Agreement” means the loan agreement dated 7 June 2011 as amended and restated by a supplemental agreement dated 2 September 2011 and as further amended and restated by a second supplemental agreement dated 14 June 2012 and made between (1) the Collateral Guarantors as joint and several borrowers, (2) the banks and financial institutions referred to in schedule 1 thereto as lenders and (3) ABN AMRO Bank N.V. as arranger, agent, security agent, account bank and swap provider;
“Original Seller” means Venus Sea Marine S.A., 53rd E Street, Urbanizacion Marbella, MMG Tower, 16th Floor, Panama, Republic of Panama;
“Owners” means, together, the Borrowers and the Collateral Guarantors and:
(a) in relation to the Q Amreen Ship, it means the Q Amreen Borrower;
(b) in relation to the Q Anastasia Ship, it means the Q Anastasia Borrower;
(c) in relation to the Q Kaki Ship, it means the Q Kaki Borrower;
(d) in relation to the Q Houston Ship, it means the Q Houston Borrower;
(e) in relation to the Q Jake Ship, it means the Q Jake Collateral Guarantor;
(f) in relation to the Q loanari Ship, it means the Q loanari Collateral Guarantor;
(g) in relation to the Q Arion Ship, it means the Q Arion Collateral Guarantor; and
(h) in relation to the Q Shea Ship, it means the Q Shea Collateral Guarantor,
and “Owner” means any one of them;
“Party” means each party to this Agreement;
“Permitted Encumbrance” means:
(a) any Encumbrance in favour of the Creditors or any of them created pursuant to the Security Documents and/or the Existing Security Documents; and
(b) Permitted Liens;
“Permitted Liens” means, in relation to a Collateral Ship:
(a) any lien on that Collateral Ship for master’s, officer’s or crew’s wages outstanding in the ordinary course of trading;
(b) any lien on that Collateral Ship for salvage; and
(c) unless a Default is continuing, any ship repairer’s or outfitter’s possessory lien on such Collateral Ship for a sum not (except with the prior written consent of the Agent) exceeding the Casualty Amount;
“Pollutant” means and includes pollutants, contaminants, toxic substances, oil as defined in the United States Oil Pollution Act of 1990 and all hazardous substances as defined in the United States Comprehensive Environmental Response, Compensation and Liability Act 1980;
“Pre-delivery Security Assignment” means:
(a) in relation to the Q Amreen Ship, the Q Amreen Pre-delivery Security Assignment;
(b) in relation to the Q Anastasia Ship, the Q Anastasia Pre-delivery Security Assignment;
(c) in relation to the Q Kaki Ship, the Q Kaki Pre-delivery Security Assignment; or
(d) in relation to the Q Houston Ship, the Q Houston Pre-delivery Security Assignment,
and “Pre-delivery Security Assignments” means, together, all or any of them;
“Q Amreen Advances” means, together, the First Q Amreen Advance, the Second Q Amreen Advance, the Third Q Amreen Advance and the Fourth Q Amreen Advance and “Q Amreen Advance” means any one of them;
“Q Amreen Borrower” means Q Amreen Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Amreen Contract” means the shipbuilding contract dated 21 March 2013, made between the relevant Builder and the Q Amreen Borrower as the same may be amended and/or supplemented from time to time, relating to the construction by the relevant Builder and the sale by the relevant Builder, and the purchase by the Q Amreen Borrower, of the Q Amreen Ship;
“Q Amreen Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of the assignment in respect of the Q Amreen Contract to be given by the relevant Builder, in the form scheduled to the Q Amreen Pre-delivery Security Assignment;
“Q Amreen Contract Price” means the purchase price payable by the Q Amreen Borrower to the relevant Builder under the Q Amreen Contract, being $47,000,000 or such other sum in Dollars as is determined in accordance with the terms and conditions of the Q Amreen Contract;
“Q Amreen Management Agreement” means the management agreement made or (as the context may require) to be made between the Q Amreen Borrower and the Manager or any other agreement previously approved in writing by the Agent between the Q Amreen Borrower and the Manager providing (inter alia) for the Manager to carry out the supervision of the construction by the relevant Builder of the Q Amreen Ship;
“Q Amreen Pre-delivery Security Assignment” means the first priority assignment of the Q Amreen Contract and the Q Amreen Refund Guarantees executed or (as the context may require) to be executed by the Q Amreen Borrower in favour of the Security Agent in the form set out in schedule 8;
“Q Amreen Refund Guarantee” means the letter of guarantee to be issued by the relevant Refund Guarantor in respect of certain of the relevant Builder’s obligations under the Q Amreen Contract and any extensions, renewals or replacements thereto or thereof;
“Q Amreen Refund Guarantee Assignment Consent and Acknowledgement” means an acknowledgement of notice of the assignment of the Q Amreen Refund Guarantee to be given by the relevant Refund Guarantor in the form scheduled to the Q Amreen Pre-delivery Security Assignment;
“Q Amreen Share Pledge” means the pledge executed or (as the context may require) to be executed by the Shareholder in favour of the Security Agent in respect of all of the shares in the Q Amreen Borrower in the form set out in schedule 9;
“Q Amreen Ship” means the 180,000 DWT class bulk carrier, currently known as Hull No. S1195 and under construction by the relevant Builder pursuant to the Q Amreen Contract;
“Q Anastasia Advances” means, together, the First Q Anastasia Advance, the Second Q Anastasia Advance, the Third Q Anastasia Advance and the Fourth Q Anastasia Advance and “Q Anastasia Advance” means any one of them;
“Q Anastasia Borrower” means Q Anastasia Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Anastasia Contract” means the shipbuilding contract dated 21 March 2013, made between the relevant Builder and the Q Anastasia Borrower as the same may be amended and/or supplemented from time to time, relating to the construction by the relevant Builder and the sale by the relevant Builder, and the purchase by the Q Anastasia Borrower, of the Q Anastasia Ship;
“Q Anastasia Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of the assignment in respect of the Q Anastasia Contract to be given by the relevant Builder, in the form scheduled to the Q Anastasia Pre-delivery Security Assignment;
“Q Anastasia Contract Price” means the purchase price payable by the Q Anastasia Borrower to the relevant Builder under the Q Anastasia Contract, being $47,000,000 or such other sum in Dollars as is determined in accordance with the terms and conditions of the Q Anastasia Contract;
“Q Anastasia Management Agreement” means the management agreement made or (as the context may require) to be made between the Q Anastasia Borrower and the Manager or any other agreement previously approved in writing by the Agent between the Q Anastasia Borrower and the Manager providing (inter alia) for the Manager to carry out the supervision of the construction by the relevant Builder of the Q Anastasia Ship;
“Q Anastasia Pre-delivery Security Assignment” means the first priority assignment of the Q Anastasia Contract and the Q Anastasia Refund Guarantee executed or (as the context may require) to be executed by the Q Anastasia Borrower in favour of the Security Agent in the form set out in schedule 8;
“Q Anastasia Refund Guarantee” means the letter of guarantee to be issued by the relevant Refund Guarantor in respect of certain of the relevant Builder’s obligations under the Q Anastasia Contract and any extensions, renewals or replacements thereto or thereof;
“Q Anastasia Refund Guarantee Assignment Consent and Acknowledgement” means an acknowledgement of notice of the assignment of the Q Anastasia Refund Guarantee to be given by the relevant Refund Guarantor in the form scheduled to the Q Anastasia Pre-delivery Security Assignment;
“Q Anastasia Share Pledge” means the pledge executed or (as the context may require) to be executed by the Shareholder in favour of the Security Agent in respect of all of the shares in the Q Anastasia Borrower in the form set out in schedule 9;
“Q Anastasia Ship” means the 180,000 DWT class bulk carrier, currently known as Hull No. S1194 and under construction by the relevant Builder pursuant to the Q Anastasia Contract;
“Q Arion General Assignment” means the third priority general assignment collateral to the Q Arion Mortgage executed or (as the context may require) to be executed by the Q Arion Guarantor in favour of the Security Agent in the form set out in schedule 11;
“Q Arion Guarantee” means the corporate guarantee executed or (as the context may require) to be executed by the Q Arion Guarantor in favour of the Security Agent in the form set out in schedule 7;
“Q Arion Guarantor” means Q A Maritime Ltd. (formerly known as Q Arion Shipping Ltd.) of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Arion Management Agreement” means the management agreement dated 1 August 2011 made between the Q Arion Guarantor and the Manager or any other agreement previously approved in writing by the Agent between the Q Arion Guarantor and the Manager providing (inter alia) for the Manager to manage the Q Arion Ship;
“Q Arion Mortgage” means the third preferred Marshall Islands mortgage of the Q Arion Ship executed or (as the context may require) to be executed by the Q Arion Guarantor in favour of the Security Agent in the form set out in schedule 10;
“Q Arion Ship” means the approx. 82,000 dwt bulk carrier motor vessel Q Arion, registered under the name and in the ownership of the Q Arion Guarantor through the relevant Registry under the laws and flag of the relevant Flag State with IMO number 9461336;
“Q Houston Advances” means, together, the First Q Houston Advance, the Second Q Houston Advance and the Third Q Houston Advance and “Q Houston Advance” means any one of them;
“Q Houston Borrower” means Q Houston Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Houston Contract” means the memorandum of agreement made or (as the context may require) to be made between the Seller and the Q Houston Borrower as the same may be amended and/or supplemented from time to time, relating to the sale by the Seller, and the purchase by the Q Houston Borrower, of the Q Houston Ship;
“Q Houston Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of the assignment in respect of the Q Houston Contract to be given by the Seller, in the form scheduled to the Q Houston Pre-delivery Security Assignment;
“Q Houston Contract Guarantee” means the performance guarantee executed or (as the context may require) to be executed by the Contract Guarantor in favour of the Q Houston Borrower in respect of the Seller’s obligations under the Q Houston Contract and any further guarantee(s) to be issued by the Contract Guarantor in respect of such obligations, pursuant to any agreement supplemental to the Q Houston Contract, and any extensions, renewals, amendments, supplements or replacements thereto or thereof;
“Q Houston Contract Guarantee Assignment Consent and Acknowledgement” means the acknowledgement of the notice of assignment in respect of the Q Houston Contract Guarantee to be given by the Contract Guarantor, in the form scheduled to the Q Houston Pre-delivery Security Assignment;
“Q Houston Contract Price” means the purchase price payable by the Q Houston Borrower to the Seller under the Q Houston Contract, being $51,000,000 or such other sum in Dollars as is determined in accordance with the terms and conditions of the Q Houston Contract;
“Q Houston First Contract” means the memorandum of agreement made or (as the context may require) to be made between the Original Seller and the Seller relating to the sale by the Original Seller, and the purchase by the Seller, of the Q Houston Ship;
“Q Houston Management Agreement” means the management agreement made or (as the context may require) to be made between the Q Houston Borrower and the Manager or any other
agreement previously approved in writing by the Agent between the Q Houston Borrower and the Manager providing (inter alia) for the Manager to carry out the supervision of the construction by the relevant Builder of the Q Houston Ship;
“Q Houston Pre-delivery Security Assignment” means the first priority assignment of the Q Houston Contract, the Q Houston Refund Guarantees and the Q Houston Contract Guarantee executed or (as the context may require) to be executed by the Q Houston Borrower in favour of the Security Agent in the form set out in schedule 8;
“Q Houston Refund Guarantee” means each letter of guarantee to be issued by the relevant Refund Guarantor in respect of certain of the Seller’s obligations under the Q Houston Contract and any extensions, renewals or replacements thereto or thereof and “Q Houston Refund Guarantees” means, together, all or any of them;
“Q Houston Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Q Houston Refund Guarantee, an acknowledgement of notice of the assignment in respect of that Q Houston Refund Guarantee to be given by the relevant Refund Guarantor in the form scheduled to the Q Houston Pre-delivery Security Assignment and “Q Houston Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;
“Q Houston Share Pledge” means the pledge executed or (as the context may require) to be executed by the Shareholder in favour of the Security Agent in respect of all of the shares in the Q Houston Borrower in the form set out in schedule 9;
“Q Houston Ship” means the 180,600 M.T. DWT class bulk carrier, currently known as Hull No. S-2526 and under construction by the relevant Builder pursuant to the Q Houston Shipbuilding Contract and sold or (as the context may require) to be sold by the Original Seller to the Seller pursuant to the Q Houston First Contract and to be further sold by the Seller to the relevant Borrower pursuant to the Q Houston Contract;
“Q Houston Shipbuilding Contract” means the shipbuilding contract dated 31 May 2013 made between the relevant Builder and the Original Seller relating to the construction and sale by the relevant Builder, and the purchase by the Original Seller, of the Q Houston Ship;
“Q loanari General Assignment” means the third priority general assignment collateral to the Q loanari Mortgage executed or (as the context may require) to be executed by the Q loanari Guarantor in favour of the Security Agent in the form set out in schedule 11;
“Q loanari Guarantee” means the corporate guarantee executed or (as the context may require) to be executed by the Q loanari Guarantor in favour of the Security Agent in the form set out in schedule 7;
“Q loanari Guarantor” means Q loanari Shipping Ltd of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q loanari Management Agreement” means the management agreement dated 14 September 2011 made between the Q loanari Guarantor and the Manager or any other agreement previously approved in writing by the Agent between the Q loanari Guarantor and the Manager providing (inter alia) for the Manager to manage the Q loanari Ship;
“Q loanari Mortgage” means the third preferred Marshall Islands mortgage of the Q loanari Ship executed or (as the context may require) to be executed by the Q loanari Guarantor in favour of the Security Agent in the form set out in schedule 10;
“Q loanari Ship” means the approx. 82,000 dwt bulk carrier motor vessel Q loanari, registered under the name and in the ownership of the Q loanari Guarantor through the relevant Registry under the laws and flag of the relevant Flag State with IMO number 9586344;
“Q Jake General Assignment” means the third priority general assignment collateral to the Q Jake Mortgage executed or (as the context may require) to be executed by the Q Jake Guarantor in favour of the Security Agent in the form set out in schedule 11;
“Q Jake Guarantee” means the corporate guarantee executed or (as the context may require) to be executed by the Q Jake Guarantor in favour of the Security Agent in the form set out in schedule 7;
“Q Jake Guarantor” means Q Jake Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Jake Management Agreement” means the management agreement dated 2 May 2011 made between the Q Jake Guarantor and the Manager or any other agreement previously approved in writing by the Agent between the Q Jake Guarantor and the Manager providing (inter alia) for the Manager to manage the Q Jake Ship;
“Q Jake Mortgage” means the third preferred Marshall Islands mortgage of the Q Jake Ship executed or (as the context may require) to be executed by the Q Jake Guarantor in favour of the Security Agent in the form set out in schedule 10;
“Q Jake Ship” means the approx. 82,000 dwt bulk carrier motor vessel Q Jake, registered under the name and in the ownership of the Q Jake Guarantor through the relevant Registry under the laws and flag of the relevant Flag State with IMO number 9461324;
“Q Kaki Advances” means, together, the First Q Kaki Advance, the Second Q Kaki Advance and the Third Q Kaki Advance and “Q Kaki Advance” means any one of them;
“Q Kaki Borrower” means Q Kaki Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Kaki Contract” means the memorandum of agreement made or (as the context may require) to be made between the Seller and the Q Kaki Borrower as the same may be amended and/or supplemented from time to time, relating to the sale by the Seller, and the purchase by the Q Kaki Borrower, of the Q Kaki Ship;
“Q Kaki Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of the assignment in respect of the Q Kaki Contract to be given by the Seller, in the form scheduled to the Q Kaki Pre-delivery Security Assignment;
“Q Kaki Contract Guarantee” means the performance guarantee executed or (as the context may require) to be executed by the Contract Guarantor in favour of the Q Kaki Borrower in respect of the Seller’s obligations under the Q Kaki Contract and any further guarantee(s) to be issued by the Contract Guarantor in respect of such obligations, pursuant to any agreement supplemental to the Q Kaki Contract, and any extensions, renewals, amendments, supplements or replacements thereto or thereof;
“Q Kaki Contract Guarantee Assignment Consent and Acknowledgement” means the acknowledgement of the notice of assignment in respect of the Q Kaki Contract Guarantee to be
given by the Contract Guarantor, in the form scheduled to the Q Kaki Pre-delivery Security Assignment;
“Q Kaki Contract Price” means the purchase price payable by the Q Kaki Borrower to the Seller under the Q Kaki Contract, being $50,900,000 or such other sum in Dollars as is determined in accordance with the terms and conditions of the Q Kaki Contract;
“Q Kaki First Contract” means the memorandum of agreement made or (as the context may require) to be made between the Original Seller and the Seller relating to the sale by the Original Seller, and the purchase by the Seller, of the Q Kaki Ship;
“Q Kaki Management Agreement” means the management agreement made or (as the context may require) to be made between the Q Kaki Borrower and the Manager or any other agreement previously approved in writing by the Agent between the Q Kaki Borrower and the Manager providing (inter alia) for the Manager to carry out the supervision of the construction by the relevant Builder of the Q Kaki Ship;
“Q Kaki Pre-delivery Security Assignment” means the first priority assignment of the Q Kaki Contract, the Q Kaki Refund Guarantees and the Q Kaki Contract Guarantee executed or (as the context may require) to be executed by the Q Kaki Borrower in favour of the Security Agent in the form set out in schedule 8;
“Q Kaki Refund Guarantee” means each letter of guarantee to be issued by the relevant Refund Guarantor in respect of certain of the Seller’s obligations under the Q Kaki Contract and any extensions, renewals or replacements thereto or thereof and “Q Kaki Refund Guarantees” means, together, all or any of them;
“Q Kaki Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Q Kaki Refund Guarantee, an acknowledgement of notice of the assignment in respect of that Q Kaki Refund Guarantee to be given by the relevant Refund Guarantor in the form scheduled to the Q Kaki Pre-delivery Security Assignment and “Q Kaki Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;
“Q Kaki Share Pledge” means the pledge executed or (as the context may require) to be executed by the Shareholder in favour of the Security Agent in respect of all of the shares in the Q Kaki Borrower in the form set out in schedule 9;
“Q Kaki Ship” means the 180,600 M.T. DWT class bulk carrier, currently known as Hull No. S-2525 and under construction by the relevant Builder pursuant to the Q Kaki Shipbuilding Contract and sold or (as the context may require) to be sold by the Original Seller to the Seller pursuant to the Q Kaki First Contract and to be further sold by the Seller to the relevant Borrower pursuant to the Q Kaki Contract;
“Q Kaki Shipbuilding Contract” means the shipbuilding contract dated 31 May 2013 made between the relevant Builder and the Original Seller relating to the construction and sale by the relevant Builder, and the purchase by the Original Seller, of the Q Kaki Ship;
“Q Shea General Assignment” means the third priority general assignment collateral to the Q Shea Mortgage executed or (as the context may require) to be executed by the Q Shea Guarantor in favour of the Security Agent in the form set out in schedule 11;
“Q Shea Guarantee” means the corporate guarantee executed or (as the context may require) to be executed by the Q Shea Guarantor in favour of the Security Agent in the form set out in schedule 7;
“Q Shea Guarantor” means Q Shea Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 and includes its successors in title;
“Q Shea Management Agreement” means the management agreement dated 11 June 2012 made between the Q Shea Guarantor and the Manager or any other agreement previously approved in writing by the Agent between the Q Shea Guarantor and the Manager providing (inter alia) for the Manager to manage the Q Shea Ship;
“Q Shea Mortgage” means the third preferred Marshall Islands mortgage of the Q Shea Ship executed or (as the context may require) to be executed by the Q Shea Guarantor in favour of the Security Agent in the form set out in schedule 10;
“Q Shea Ship” means the approx. 76,922 dwt bulk carrier Q Shea, registered under the name and in the ownership of the Q Shea Guarantor through the relevant Registry under the laws and flag of the relevant Flag State with IMO number 9335991;
“Quotation Date” means, in respect of any period for which LIBOR falls to be determined under this Agreement, the date falling two (2) Banking Days prior to the first day of the relevant period;
“Refund Guarantee” means:
(a) in relation to the Q Amreen Ship and/or the Q Amreen Contract, the Q Amreen Refund Guarantee; or
(b) in relation to the Q Anastasia Ship and/or the Q Anastasia Contract, the Q Anastasia Refund Guarantee; or
(c) in relation to the Q Kaki Ship and/or the Q Kaki Contract, each Q Kaki Refund Guarantee; or
(d) in relation to the Q Houston Ship and/or the Q Houston Contract, each Q Houston Refund Guarantee,
and “Refund Guarantees” means, together, all or any of them;
“Refund Guarantee Assignment Consent and Acknowledgement” means:
(a) in relation to the Q Amreen Ship, the Q Amreen Refund Guarantee Assignment Consent and Acknowledgement;
(b) in relation to the Q Anastasia Ship, the Q Anastasia Refund Guarantee Assignment Consents and Acknowledgements;
(c) in relation to the Q Kaki Ship, the Q Kaki Refund Guarantee Assignment Consents and Acknowledgements; or
(d) in relation to the Q Houston Ship, the Q Houston Refund Guarantee Assignment Consents and Acknowledgements,
and “Refund Guarantee Assignment Consents and Acknowledgements” means, together, all or any of them;
“Refund Guarantor” means:
(a) in relation to each Q Amreen Refund Guarantee and/or each Q Anastasia Refund Guarantee, The Export-Import Bank of Korea of 38 Eunhaeng-Ro (16-1, Yeouido-Dong), Yeongdeungpo-Gu, Seoul 150-996, Korea and includes its successors in title; and
(b) in relation to each Q Kaki Refund Guarantee and/or each Q Houston Refund Guarantee, any first class Japanese bank acceptable to the Agent in its sole discretion and includes it successors in title,
and “Refund Guarantors” means, together, all or any of them;
“Registry” means, in relation to a Collateral Ship, the offices of the authorised agent in Piraeus, Greece of the Maritime Administrator of the Marshall Islands or such other registrar, commissioner or representative of the relevant Flag State who is duly authorised and empowered to register such Collateral Ship, the relevant Collateral Guarantor’s title to such Collateral Ship and the relevant Mortgage under the laws and flag of the relevant Flag State;
“Regulatory Agency” means the Government Entity or other organisation in a Flag State which has been designated by the Government of that Flag State to implement and/or administer and/or enforce the provisions of the Code;
“Related Company” of a person means any Subsidiary of such person, any company or other entity of which such person is a Subsidiary and any Subsidiary of any such company or entity;
“Relevant Jurisdiction” means any jurisdiction in which or where any Security Party is incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected;
“Relevant Party” means each of the Borrowers, any other Security Party and any member of the Group;
“Relevant Ship” means the Collateral Ships and any other vessel from time to time (whether before or after the date of this Agreement) owned, managed or crewed by, or chartered to, any Relevant Party;
“Repayment Date” means, subject to clause 6.3:
(a) in respect of each of the Q Amreen Advances, the earlier of (i) 30 April 2015 and (ii) the day when Delivery of the Q Amreen Ship occurs; or
(b) in respect of each of the Q Anastasia Advances, the earlier of (i) 30 April 2015 and (ii) the day when Delivery of the Q Anastasia Ship occurs; or
(c) in respect of each of the Q Kaki Advances, the earlier of (i) 30 April 2015 and (ii) the day when Delivery of the Q Kaki Ship occurs; or
(d) in respect of each of the Q Houston Advances, the earlier of (i) 30 April 2015 and (ii) the day when Delivery of the Q Houston Ship occurs,
and “Repayment Dates” means, together, all or any of them;
“Requisition Compensation” means, in relation to a Ship, all sums of money or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of such Ship;
“Riverstone Disclosed Persons” means, together, Riverstone/Carlyle Global Energy and Power Fund IV (Cayman), L.P., of the Cayman Islands and its Affiliates (as such term is defined in the Shareholder’s Agreement);
“Robertson Disclosed Persons” means, together, Quintana Ship Owners LLC of Delaware, USA, QSI Holdings L.P. of the Cayman Islands, their respective Affiliates (as such term is defined in the Shareholder’s Agreement) and Mr. Corby J. Robertson Jr.;
“Second Advance” means:
(a) in relation to the Q Amreen Ship, the Second Q Amreen Advance; or
(b) in relation to the Q Anastasia Ship, the Second Q Anastasia Advance; or
(c) in relation to the Q Kaki Ship, the Second Q Kaki Advance; or
(d) in relation to the Q Houston Ship, the Second Q Houston Advance,
and “Second Advances” means, together, all or any of them;
“Second Q Amreen Advance” means an Advance of up to $2,820,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the second instalment of the Q Amreen Contract Price payable by the Q Amreen Borrower pursuant to Article X2(a)(ii) of the Q Amreen Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Second Q Anastasia Advance” means an Advance of up to $2,820,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the second instalment of the Q Anastasia Contract Price payable by the Q Anastasia Borrower pursuant to Article X2(a)(ii) of the Q Anastasia Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Second Q Houston Advance” means an Advance of up to $1,020,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the second instalment of the Q Houston Contract Price payable by the Q Houston Borrower pursuant to the Q Houston Contract or (as the context may require) the principle amount thereof outstanding at any relevant time;
“Second Q Kaki Advance” means an Advance of up to $1,020,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the second instalment of the Q Kaki Contract Price payable by the Q Kaki Borrower pursuant to the Q Kaki Contract or (as the context may require) the principle amount thereof outstanding at any relevant time;
“Security Agent” means ABN AMRO Bank N.V. a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam (or of such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) or such other person as may be appointed as security agent and trustee by the Banks and the Agent pursuant to the relevant provisions of clause 16.14;
“Security Documents” means this Agreement, the Pre-delivery Security Assignments, the Refund Guarantee Assignment Consents and Acknowledgements, the Contract Assignment Consents and Acknowledgements, the Contract Guarantee Assignment Consents and Acknowledgements, the Mortgages, the General Assignments, the Cash Collateral Account
Pledge, the Manager’s Undertakings, the Transaction Guarantees, the Share Pledges and any other documents as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or secure all or any part of the Loan, interest thereon and other moneys from time to time owing by the Borrowers or any other Security Party pursuant to this Agreement or any other Security Documents (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement);
“Security Party” means each Borrower, the Manager, the Shareholder, the Transaction Guarantors, the Builder (in relation to the Sungdong Ships), the Seller, the Refund Guarantors, the Contract Guarantor or any other person who may at any time be a party to any of the Security Documents (other than the Creditors);
“Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all monies payable thereunder;
“Seller” means Lavender Maritime S.A. registered at Microjacket 275739, Roll 39479, Image 64 of the Public Registry Office of Panama with registered agents Morgan & Morgan with offices at 53rd Street, Urbanizacion Obarrio, MMG Tower, 16th Floor, Panama, Republic of Panama and includes its successors in title;
“Shareholder” means Quintana Shipping Ltd. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and includes its successors in title;
“Shareholder’s Agreement” means the agreement referred to in paragraph 11 of Part 1 of schedule 3;
“Share Pledge” means:
(a) in relation to the Q Amreen Borrower, the Q Amreen Share Pledge; or
(b) in relation to the Q Anastasia Borrower, the Q Anastasia Share Pledge; or
(c) in relation to the Q Kaki Borrower, the Q Kaki Share Pledge; or
(d) in relation to the Q Houston Borrower, the Q Houston Share Pledge,
and “Share Pledges” means, together, all or any of them;
“Ship” means:
(a) in relation to the Q Amreen Borrower, the Q Amreen Ship; or
(b) in relation to the Q Anastasia Borrower, the Q Anastasia Ship; or
(c) in relation to the Q Kaki Borrower, the Q Kaki Ship; or
(d) in relation to the Q Houston Borrower, the Q Houston Ship; or
(e) in relation to the Q Jake Guarantor, the Q Jake Ship; or
(f) in relation to the Q loanari Guarantor, the Q loanari Ship; or
(g) in relation to the Q Arion Guarantor, the Q Arion Ship; or
(h) in relation to the Q Shea Guarantor, the Q Shea Ship,
and “Ships” means, together, all or any of them;
“SMC” means a safety management certificate issued in accordance with rule 13 of the Code;
“Subsidiary” of a person means any company or entity directly or indirectly controlled by such person;
“Sungdong Ship Advances” means, together, the Q Amreen Advances and the Q Anastasia Advances;
“Sungdong Ships” means, together, the Q Amreen Ship and the Q Anastasia Ship and “Sungdong Ship” means either one of them;
“Taxes” includes all present and future taxes, levies, imposts, duties, fees or charges of whatever nature together with interest thereon and penalties in respect thereof and “Taxation” shall be construed accordingly;
“Termination Date” means in relation to each of the Advances, the earlier of (a) the date when the launching of the relevant Borrower’s Ship occurs under the relevant Contract (being Article X.2(a)(iv) in the case of the Sungdong Ships) and (b) 30 January 2015 or, in each such case, such later date as the Borrowers may request and the Agent (acting on the instructions of all the Banks) may in its sole discretion agree in writing (such agreement not to be unreasonably withheld);
“Third Advance” means:
(a) in relation to the Q Amreen Ship, the Third Q Amreen Advance; or
(b) in relation to the Q Anastasia Ship, the Third Q Anastasia Advance; or
(c) in relation to the Q Kaki Ship, the Third Q Kaki Advance; or
(d) in relation to the Q Houston Ship, the Third Q Houston Advance,
and “Third Advances” means, together, all or any of them;
“Third Q Amreen Advance” means an Advance of up to $2,820,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the third instalment of the Q Amreen Contract Price payable by the Q Amreen Borrower pursuant to Article X.2(a)(iii) of the Q Amreen Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Third Q Anastasia Advance” means an Advance of up to $2,820,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the third instalment of the Q Anastasia Contract Price payable by the Q Anastasia Borrower pursuant to Article X.2(a)(iii) of the Q Anastasia Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Third Q Houston Advance” means an Advance of up to $2,040,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the third instalment of the Q Houston Contract Price payable by the Q Houston Borrower pursuant to the relevant clause of the Q Houston Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Third Q Kaki Advance” means an Advance of up to $2,040,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing in part the third instalment of the Q Kaki Contract Price payable by the Q Kaki Borrower pursuant to the relevant clause of the Q Kaki Contract or (as the context may require) the principal amount thereof outstanding at any relevant time;
“Total Commitment” means, at any relevant time, the aggregate of all the Banks’ Commitments at such time;
“Total Loss” means, in relation to a Ship:
(a) the actual, constructive, compromised or arranged total loss of such Ship; or
(b) the Compulsory Acquisition of such Ship; or
(c) the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of such Ship (other than where the same amounts to the Compulsory Acquisition of such Ship) by any person, including by any Government Entity, or by persons acting or purporting to act on behalf of any Government Entity, unless such Ship be released and restored to the relevant Owner or (as the case may be) the relevant Builder or the Seller from such theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof or, in the case of such hijacking only, within one hundred and twenty (120) days after the occurrence thereof;
“Transaction Guarantees” means, together, the Collateral Guarantees and the Corporate Guarantee and “Transaction Guarantee” means each one of them;
“Transaction Guarantors” means, together, the Collateral Guarantors and the Corporate Guarantor and “Transaction Guarantor” means each one of them;
“Transfer Certificate” means a certificate in substantially the form set out in schedule 4;
“Transferee” has the meaning ascribed thereto in clause 15.3;
“Transferor” has the meaning ascribed thereto in clause 15.3;
“Treasury Regulations” means regulations introduced or implemented by any competent authority of the United States of America (including the Internal Revenue Service or the US Treasury) for the purposes of FATCA, regarding information reporting by FATCA FFIs with respect to U.S. accounts and withholding on certain payments to FATCA FFIs and other foreign entities and withholding, whether (and without limitation) substantively in the form of the proposed regulations in respect of the same published by the US Treasury on 8 February 2012 (REG-121647-10) or otherwise;
“Trust Deed” means the trust deed executed or (as the context may require) to be executed by the Security Agent in favour of certain of the other Creditors in the form set out in schedule 5;
“Trust Property” means (i) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Security Agent under or pursuant to the Security Documents (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to the Security Agent in the Security Documents), (ii) all moneys, property and other assets paid or transferred to or vested in the Security Agent or any agent of the Security Agent or any receiver or received or recovered by the Security Agent or any agent of the Security Agent or any receiver pursuant to, or in connection with, any of the Security Documents whether from any Security Party or any
other person and (iii) all moneys, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by the Security Agent or any agent of the Security Agent or any receiver in respect of the same (or any part thereof);
“Underlying Documents” means, together, the Contracts, the Q Kaki First Contract, the Q Houston First Contract, the Q Kaki Shipbuilding Contract, the Q Houston Shipbuilding Contract, the Refund Guarantees, the Contract Guarantees, the Management Agreements and the Shareholder’s Agreement and “Underlying Document” means each of them; and
“US Tax Obligor” means:
(a) a Borrower which is a “United States” person within the meaning of section 110(a)(30) of the International Revenue Code; or
(b) a Security Party some or all of whose payments under the Security Documents are from sources within the United States for US federal income tax purposes.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
1.4 Construction of certain terms
In this Agreement, unless the context otherwise requires:
1.4.1 references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules;
1.4.2 references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;
1.4.3 references to a “regulation” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank or government department or any self-regulatory or other national or supra-national authority and, for the avoidance of doubt, shall include any Basel II Regulation and any Basel III Regulation;
1.4.4 words importing the plural shall include the singular and vice versa;
1.4.5 references to a time of day are to London time;
1.4.6 references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
1.4.7 any reference to “control” of a person means:
(a) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
(i) cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of that person; or
(ii) appoint or remove all, or the majority, of the directors or other equivalent officers of that person; or
(iii) give directions with respect to the operating and financial policies of that person with which the directors or other equivalent officers of that person are obliged to comply; and/or
(b) the holding beneficially of more than 50% of the issued share capital of that person (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, any Encumbrance over share capital shall be disregarded in determining the beneficial ownership of such share capital);
and “controlled” shall be construed accordingly;
1.4.8 references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and
1.4.9 references to any enactment shall be deemed to include references to such enactment as re-enacted, amended or extended.
1.5 Majority Banks
Where this Agreement or any other Security Document provides for any matter to be determined by reference to the opinion of the Majority Banks or to be subject to the consent or request of the Majority Banks or for any action to be taken on the instructions in writing of the Majority Banks, such opinion, consent, request or instructions shall (as between the Banks) only be regarded as having been validly given or issued by the Majority Banks if all the Banks shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and the relevant majority of such Banks shall have given or issued such opinion, consent, request or instructions but so that (as between the Borrowers and the Banks) the Borrowers shall be entitled (and bound) to assume that such notice shall have been duly received by each relevant Bank and that the relevant majority shall have been obtained to constitute Majority Banks whether or not this is in fact the case.
1.6 Banks’ Commitment
For the purposes of the definition of “Majority Banks” in clause 1.2, references to the Commitment of a Bank shall, if the Total Commitment has, at any relevant time, been reduced to zero, be deemed to be a reference to the Commitment of that Bank immediately prior to such reduction to zero.
2 The Total Commitment and the Advances
2.1 Agreement to lend
The Banks, relying upon each of the representations and warranties in clause 7, agree to lend to the Borrowers, jointly and severally, upon and subject to the terms of this Agreement, the principal sum of up to Thirty one million forty thousand Dollars ($31,040,000) in up to fourteen (14) Advances. The obligation of each Bank under this Agreement shall be to contribute that proportion of each Advance which, as at the Drawdown Date of such Advance, its Commitment bears to the Total Commitment.
2.2 Obligations several
The obligations of the Banks under this Agreement are several according to their respective Commitments and/or Contributions; the failure of any Bank to perform such obligations shall not relieve any other Creditor or any Borrower of any of their respective obligations or liabilities under this Agreement nor shall any Creditor be responsible for the obligations of any other Creditor (except for its own obligations, if any, as a Bank) under this Agreement.
2.3 Interests several
Notwithstanding any other term of this Agreement (but without prejudice to the provisions of this Agreement relating to or requiring action by the Majority Banks) the interests of the Creditors are several and the amount due to any Creditor is a separate and independent debt. Each Creditor shall have the right to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Creditor to be joined as an additional party in any proceedings for this purpose.
2.4 Drawdown
Subject to the terms and conditions of this Agreement, each Advance shall be made to the Borrowers following receipt by the Agent from the Borrowers of a Drawdown Notice not later than 10:00 a.m. three (3) Banking Days before the date, which shall be a Banking Day falling within the Drawdown Period for such Advance, on which the Borrowers propose such Advance is made. A Drawdown Notice shall be effective on actual receipt by the Agent and, once given, shall, subject as provided in clause 3.6.1, be irrevocable.
2.5 Timing and limitation of Advances
2.5.1 The aggregate amount of all Sungdong Ship Advances shall not exceed the lesser of (i) $18,800,000, (ii) an amount in Dollars equal to forty per cent (40%) of the aggregate amount of the first instalment, second instalment, third instalment and fourth instalment of the Contract Prices of both Sungdong Ships to be financed by the Sungdong Ship Advances and (iii) forty per cent (40%) of the aggregate of the market values of the Sungdong Ships as determined by the Agent pursuant to the valuations obtained pursuant to Part 2 and Part 3, schedule 3 and as adjusted by the Agent for the relevant stage of construction at any relevant time, and each Advance shall, subject to the following provisions of this clause 2.5, be for such amount as is specified in the Drawdown Notice for that Advance.
2.5.2 The aggregate amount of all Advances in relation to a Sungdong Ship shall not exceed the lesser of (i) 9,400,000, (ii) an amount in Dollars equal to forty per cent (40%) of the aggregate amount of the first instalment, second instalment, third instalment and fourth instalment of the Contract Price for such Sungdong Ship and (iii) forty per cent (40%) of the market value of that Sungdong Ship as determined by the Agent pursuant to the valuations obtained pursuant to Part 3, schedule 3 in respect of such Sungdong Ship and as adjusted by the Agent for the relevant stage of construction at any relevant time, and each Advance in relation to that Sungdong Ship shall, subject to the following provisions of this clause 2.5, be for such amount as is specified in the Drawdown Notice for that Advance.
2.5.3 The amount of the First Advance relating to a Sungdong Ship shall not exceed the lesser of (i) $1,880,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the first instalment of the Contract Price of such Sungdong Ship and (iii) forty per cent (40%) of the market value of that Sungdong Ship determined by the Agent pursuant to the valuations of that Sungdong Ship obtained pursuant to Part 2 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the relevant Builder under the relevant Contract (save for the
amount of the first instalment of the relevant Contract Price to be financed by such First Advance) provided however that if such amount is a negative figure, it shall be deemed to be zero (0).
2.5.4 The amount of the Second Advance relating to a Sungdong Ship shall not exceed the lesser of (i) $2,820,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the second instalment of the Contract Price of such Sungdong Ship and (iii) an amount in Dollars equal to the product of the following formula:
(0.4 x A1) - B1
provided however that if such amount is a negative figure, the product of the said formula shall be deemed to be zero (0).
For the purposes of this clause 2.5.4:
“A1” is the market value of the Sungdong Ship relevant to such Second Advance as determined by the Agent pursuant to the valuations of that Sungdong Ship obtained pursuant to Part 3 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the relevant Builder under the relevant Contract (save for the amount of the second instalment of the relevant Contract Price to be financed by such Second Advance).
“B1” is the aggregate amount of the Advances drawn down in relation to the Sungdong Ship relevant to such Second Advance which is outstanding immediately prior to such Second Advance.
2.5.5 The amount of the Third Advance relating to a Sungdong Ship shall not exceed the lesser of (i) $2,820,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the third instalment of the Contract Price of such Sungdong Ship to be financed by such Third Advance and (iii) an amount in Dollars equal to the product of the following formula:
(0.4 x A2) - B2
provided however that if such amount is a negative figure, the product of the said formula shall be deemed to be zero (0).
For the purposes of this clause 2.5.5
“A2” is the market value of the Sungdong Ship relevant to such Third Advance as determined by the Agent pursuant to the valuations of that Sungdong Ship obtained pursuant to Part 3 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the relevant Builder under the relevant Contract (save for the amount of the third instalment of the relevant Contract Price to be financed by such Third Advance).
“B2” is the aggregate amount of the Advances drawn down in relation to the Sungdong Ship relevant to such Third Advance which is outstanding immediately prior to such Third Advance.
2.5.6 The amount of the Fourth Advance relating to a Sungdong Ship shall not exceed the lesser of (i) $1,880,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the fourth instalment of the Contract Price of such Sungdong Ship and (iii) an amount in Dollars equal to the product of the following formula:
(0.4 x A3) - B3
provided however that if such amount is a negative figure, the product of the said formula shall be deemed to be zero (0).
For the purposes of this clause 2.5.6
“A3” is the market value of the Sungdong Ship relevant to such Fourth Advance as determined by the Agent pursuant to the valuations of that Sungdong Ship obtained pursuant to Part 3 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the relevant Builder under the relevant Contract (save for the amount of the fourth instalment of the relevant Contract Price to be financed by such Fourth Advance).
“B3” is the aggregate amount of the Advances drawn down in relation to the Sungdong Ship relevant to such Fourth Advance which is outstanding immediately prior to such Fourth Advance.
2.5.7 Each First Advance relating to a Sungdong Ship shall be applied in or towards payment to the relevant Builder of the first instalment of the Contract Price of such Sungdong Ship payable under Article X.2(a)(i) of the relevant Contract.
2.5.8 Each Second Advance relating to a Sungdong Ship shall be applied in or towards payment to the relevant Builder of the second instalment of the Contract Price of such Sungdong Ship payable under Article X.2(a)(ii) of the relevant Contract.
2.5.9 Each Third Advance relating to a Sungdong Ship shall be applied in or towards payment to the relevant Builder of the third instalment of the Contract Price of such Sungdong Ship payable under Article X.2(a)(iii) of the relevant Contract.
2.5.10 Each Fourth Advance relating to a Sungdong Ship shall be applied in or towards payment to the relevant Builder of the fourth instalment of the Contract Price of such Sungdong Ship payable under Article X.2(a)(iv) of the relevant Contract.
2.5.11 The aggregate amount of all Imabari Ship Advances shall not exceed the lesser of (i) $12,240,000, (ii) an amount in Dollars equal to forty per cent (40%) of the aggregate amount of the first instalment, second instalment and third instalment of the Contract Prices of both Imabari Ships to be financed by the Imabari Ship Advances and (iii) forty per cent (40%) of the aggregate of the market values of the Imabari Ships as determined by the Agent pursuant to the valuations obtained pursuant to Part 2 and Part 3, schedule 3 and as adjusted by the Agent for the relevant stage of construction at any relevant time, and each Advance shall, subject to the following provisions of this clause 2.5, be for such amount as is specified in the Drawdown Notice for that Advance.
2.5.12 The aggregate amount of all Advances in relation to an Imabari Ship shall not exceed the lesser of (i) $6,120,000, (ii) an amount in Dollars equal to forty per cent (40%) of the aggregate amount of the first instalment, second instalment and third instalment of the Contract Price for such Imabari Ship and (iii) forty per cent (40%) of the market value of that Imabari Ship as determined by the Agent pursuant to the valuations obtained pursuant to Part 3, schedule 3 in respect of such Imabari Ship and as adjusted by the Agent for the relevant stage of construction at any relevant time, and each Advance in relation to that Imabari Ship shall, subject to the following provisions of this clause 2.5, be for such amount as is specified in the Drawdown Notice for that Advance.
2.5.13 The amount of the First Advance relating to an Imabari Ship shall not exceed the lesser of (i) $3,000,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the first instalment of the Contract Price of such Imabari Ship and (iii) forty per cent (40%) of the market value of such Imabari Ship determined by the Agent pursuant to the valuations of that Imabari Ship obtained pursuant to Part 2 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the Seller under the relevant Contract (save for the amount of the first instalment of the relevant Contract Price to be financed by such First Advance) provided however that if such amount is a negative figure, it shall be deemed to be zero (0).
2.5.14 The amount of the Second Advance relating to an Imabari Ship shall not exceed the lesser of (i) $1,020,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the second instalment of the Contract Price of such Imabari Ship and (iii) an amount in Dollars equal to the product of the following formula:
(0.4 x A1) - B1
provided however that if such amount is a negative figure, the product of the said formula shall be deemed to be zero (0).
For the purposes of this clause 2.5.14:
“A1” is the market value of the Imabari Ship relevant to such Second Advance as determined by the Agent pursuant to the valuations of that Imabari Ship obtained pursuant to Part 3 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the Seller under the relevant Contract (save for the amount of the second instalment of the relevant Contract Price to be financed by such Second Advance).
“B1” is the aggregate amount of the Advances drawn down in relation to the Imabari Ship relevant to such Second Advance which is outstanding immediately prior to such Second Advance.
2.5.15 The amount of the Third Advance relating to an Imabari Ship shall not exceed the lesser of (i) $2,040,000, (ii) an amount in Dollars equal to forty per cent (40%) of the amount of the third instalment of the Contract Price of such Imabari Ship and (iii) an amount in Dollars equal to the product of the following formula:
(0.4 x A2) - B2
provided however that if such amount is a negative figure, the product of the said formula shall be deemed to be zero (0).
For the purposes of this clause 2.5.15
“A2” is the market value of the Imabari Ship relevant to such Third Advance as determined by the Agent pursuant to the valuations of that Imabari Ship obtained pursuant to Part 3 of schedule 3 after deducting therefrom all amounts due by the relevant Borrower to the Seller under the relevant Contract (save for the amount of the third instalment of the relevant Contract Price to be financed by such Third Advance).
“B2” is the aggregate amount of the Advances drawn down in relation to the Imabari Ship relevant to such Third Advance which is outstanding immediately prior to such Third Advance.
2.5.16 Each First Advance relating to an Imabari Ship shall be applied in or towards payment to the Seller of the first instalment of the Contract Price of that Imabari Ship payable under the relevant Contract.
2.5.17 Each Second Advance relating to an Imabari Ship shall be applied in or towards payment to the Seller of the second instalment of the Contract Price of that Imabari Ship payable under the relevant Contract.
2.5.18 Each Third Advance relating to an Imabari Ship shall be applied in or towards payment to the Seller of the third instalment of the Contract Price of that Imabari Ship payable under the relevant Contract.
2.5.19 Each Advance shall be paid to the Builder and/or (as the case may be) the Seller on the date when the relevant instalment of the Contract Price relevant to such Advance is due, unless the relevant Borrower has already paid such instalment to the Builder and/or (as the case may be) the Seller in which case the relevant Advance shall be advanced to the Borrowers in refinancing of such payment to the Builder or (as the case may be) the Seller.
2.5.20 No Second Advance may be drawn down in respect of a Borrower’s Ship unless the First Advance for that Borrower’s Ship has been drawn down.
2.5.21 No Third Advance may be drawn down in respect of a Borrower’s Ship unless the Second Advance for that Borrower’s Ship has been drawn down.
2.5.22 No Fourth Advance may be drawn down in respect of a Borrower’s Ship unless the Third Advance for that Borrower’s Ship has been drawn down.
2.6 Availability
Upon receipt of a Drawdown Notice complying with the terms of this Agreement, the Agent shall promptly notify each Bank and each Bank shall make available to the Agent its portion of the relevant Advance for payment by the Agent in accordance with clause 6.2. The Borrowers acknowledge that payment of any Advance or part thereof to the relevant Builder or (as the case may be) the Seller, the Borrowers or any of them (as the case may be) in accordance with clause 6.2 shall satisfy the obligation of the Banks to lend that Advance or that part thereof to the Borrowers under this Agreement.
2.7 Termination of Total Commitment
Any part of the Total Commitment which remains undrawn and uncancelled by the last day of the relevant Drawdown Period shall thereupon be automatically cancelled.
2.8 Application of proceeds
Without prejudice to the Borrowers’ obligations under clause 8.1.4, no Creditor shall have any responsibility for the application of the proceeds of the Loan or any part thereof by the Borrowers.
3 Interest and Interest Periods
3.1 Normal interest rate
The Borrowers shall pay interest on each Advance on each Interest Payment Date relevant to such Advance (or, in the case of Interest Periods of more than three (3) months, by instalments, the first instalment three (3) months from the commencement of the relevant Interest Period and the subsequent instalments at intervals of three (3) months thereafter or, if shorter, the period from the date of the preceding instalment until the Interest Payment Date relative to such Interest Period) at the rate per annum determined by the Agent to be the aggregate of (a) the Margin and (b) LIBOR for such Interest Period.
3.2 Selection of Interest Periods
The Borrowers may by notice received by the Agent not later than 10:00 a.m. on the third Banking Day before the beginning of each Interest Period specify whether such Interest Period shall have a duration of three (3) months, six (6) months, nine (9) months, twelve (12) months or such other shorter period as the Borrowers may select and the Agent may agree in its sole discretion.
3.3 Determination of Interest Periods
Every Interest Period shall be of the duration specified by the Borrowers pursuant to clause 3.2 but so that:
3.3.1 the first Interest Period in respect of each Advance shall commence on the date on which such Advance is drawn down and each subsequent Interest Period shall commence on the last day of the previous Interest Period for such Advance;
3.3.2 the initial Interest Period of each Advance in respect of a Borrower’s Ship after the First Advance in respect of that Borrower’s Ship shall end on the same date as the then current Interest Period for the drawn Advances for that Borrower’s Ship and, on the last day of such Interest Period, all drawn Advances for that Borrower’s Ship shall be consolidated in one amount for the purposes of this clause 3;
3.3.3 if any Interest Period for an Advance would otherwise overrun the Repayment Date for that Advance, then such Interest Period shall end on such Repayment Date; and
3.3.4 if the Borrowers fail to specify the duration of an Interest Period in accordance with the provisions of clause 3.2 and this clause 3.3 such Interest Period shall have a duration of three (3) months or such other period as shall comply with this clause 3.3.
3.4 Default interest
If the Borrowers fail to pay any sum (including, without limitation, any sum payable pursuant to this clause 3.4) on its due date for payment under any of the Security Documents, the Borrowers shall pay interest on such sum on demand from the due date up to the date of actual payment (as well after as before judgement) at a rate determined by the Agent pursuant to this clause 3.4. The period beginning on such due date and ending on such date of payment shall be divided into successive periods of not more than three (3) months as selected by the Agent each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Agent) of (a) two per cent (2%) per annum, (b) the Margin and (c) LIBOR for such period. Such interest shall be due and payable on the last day of each such period as determined by the Agent and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date, provided that if such unpaid sum is an amount of principal which became due and payable by reason of a declaration by the Agent under clause 10.2.2 or a prepayment pursuant to clauses 4.3 or 12.1, on a date other than an Interest Payment Date relating thereto, the first such period selected by the Agent shall be of a duration equal to the period between the due date of such principal sum and such Interest Payment Date and interest shall be payable on such principal sum during such period at a rate of two per cent (2%) above the rate applicable thereto immediately before it shall have become so due and payable. If, for the reasons specified in clause 3.6.1, the Agent is unable to determine a rate in accordance with the foregoing provisions of this clause 3.4, each Bank shall promptly notify the Agent of the cost of funds to such Bank and interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Agent to be two per cent (2%) per annum above the aggregate of the Margin and the cost of funds to such Agent.
3.5 Notification of Interest Periods and interest rate
The Agent shall notify the Borrowers and the Banks promptly of the duration of each Interest Period and of each rate of interest (or, as the case may be default interest) determined by it under this clause 3.
3.6 Market disruption; non-availability
3.6.1 If and whenever, at any time prior to the commencement of any Interest Period:
(a) the Agent shall have determined (which determination shall, in the absence of manifest error, be conclusive) that adequate and fair means do not exist for ascertaining LIBOR during such Interest Period; or
(b) the Agent shall have received notification from Banks with Contributions aggregating not less than one-third (1/3rd) of the Loan (or, prior to the Drawdown Date of the first Advance to be drawn down, from Banks with Commitments aggregating not less than one-third (1/3rd) of the Total Commitment), that deposits in Dollars are not available to such Banks in the London Interbank Market in the ordinary course of business in sufficient amounts to fund the Loan or part thereof or their Contributions for such Interest Period; or
(c) that the cost to a Bank of obtaining deposits in Dollars in the London Interbank Market in the ordinary course of business to fund its Commitment or Contribution for such Interest Period exceeds LIBOR,
the Agent shall forthwith give notice (a “Determination Notice”) thereof to the Borrowers and to each of the Banks. A Determination Notice shall contain particulars of the relevant circumstances giving rise to its issue. After the giving of any Determination Notice the undrawn amount of the Total Commitment shall not be borrowed until notice to the contrary is given to the Borrowers by the Agent.
3.6.2 During the period of ten (10) days after any Determination Notice has been given by the Agent under clause 3.6.1, each Bank shall certify an alternative basis (the “Alternative Basis”) for maintaining its Contribution. The Alternative Basis may at the relevant Bank’s sole and unfettered discretion include (without limitation) alternative interest periods, alternative currencies or alternative rates of interest but shall include a margin above the cost of funds to such Bank equivalent to the Margin. The Agent shall calculate the arithmetic mean of each Alternative Basis provided by the relevant Banks (the “Substitute Basis”) and certify the same to the Borrowers and the Banks. The Substitute Basis so certified shall be binding upon the Borrowers, and shall take effect in accordance with its terms from the date specified in the Determination Notice until such time as the Agent notifies the Borrowers that none of the circumstances specified in clause 3.6.1 continues to exist whereupon the normal interest rate fixing provisions of this Agreement shall apply.
4 Repayment and prepayment
4.1 Repayment
The Borrowers shall repay each Advance in full on the Repayment Date for such Advance.
4.2 Voluntary prepayment
The Borrowers may prepay the Loan in whole or part (such part being in an amount of Five hundred thousand Dollars ($500,000) or any larger sum which is an integral multiple of Five hundred thousand Dollars ($500,000)) on any Interest Payment Date relating to the part of the Loan to be repaid together with any other amount payable under clause 11 and the other provisions of this clause 4 (including the prepayment fee, if any, referred to in clause 4.7).
4.3 Prepayment on Total Loss or transfer etc.
4.3.1 Before first drawdown
On a Borrower’s Ship becoming a Total Loss (or suffering damage or being involved in an incident which, in the opinion of the Agent, may result in such Ship subsequently being determined to be a Total Loss) or on or prior the date falling immediately prior to the completion of the novation, transfer or assignment of any Contract by the relevant Borrower in favour of another person (with the prior written consent of the Agent as and when required by the Security Documents), in each case before any Advance relevant to such Borrower’s Ship or Contract has been drawn down, then, the obligation of the Banks to make such Advance available shall immediately cease and the Total Commitment shall be reduced by the aggregate amount of all the Advances for such Borrower’s Ship.
4.3.2 Following first drawdown
(a) On a Borrower’s Ship becoming a Total Loss (or suffering damage or being involved in an incident which, in the opinion of the Agent, may result in such Ship subsequently being determined to be a Total Loss) or on or prior to the date falling immediately prior to the completion of the novation, transfer or assignment of the relevant Contract by the relevant Borrower in favour of another person (with the prior written consent of the Agent as and when required by the Security Documents), then, if any Advance relating to such Borrower’s Ship has been drawn down, the Borrowers shall prepay each such Advance in full and (if applicable) the obligation of the Agent to advance any other Advance for that Borrower’s Ship shall immediately cease and the Total Commitment shall be reduced accordingly;
(b) on a Mortgaged Ship becoming a Total Loss or being sold, then the Borrowers shall, on the Disposal Reduction Date for such Mortgaged Ship, prepay on demand an amount up to twenty five per cent (25%) of the Loan at that time and the Total Commitment shall be reduced by the same percentage; and
(c) notwithstanding clause 4.3.2(b), if a Mortgaged Ship is sold or becomes a Total Loss and an Event of Default shall have occurred and be continuing, then the Borrowers shall, on the Disposal Reduction Date for such Mortgaged Ship, prepay such proportion of the Loan as the Agent may require in its absolute discretion.
4.3.3 Defined terms
For the purposes of this clause 4.3:
(a) “Disposal Reduction Date” means:
(i) in relation to a Mortgaged Ship which has become a Total Loss, its Total Loss Reduction Date; and
(ii) in relation to a Mortgaged Ship which is sold, the date of completion (and immediately prior to completion) of such sale by the transfer of title to such Mortgaged Ship to the purchaser in exchange for payment of the relevant purchase price; and
(b) “Total Loss Reduction Date” means, in relation to a Mortgaged Ship which has become a Total Loss, the date which is the earlier of:
(i) the date falling one hundred and twenty (120) days after that on which such Mortgaged Ship became a Total Loss; and
(ii) the date upon which the relevant insurance proceeds are, or Requisition Compensation is, received by the relevant Collateral Guarantor (or the Agent pursuant to the relevant Collateral Ship Security Documents).
4.3.4 Interpretation
For the purpose of this Agreement, a Total Loss in respect of a Ship shall be deemed to have occurred:
(a) in the case of an actual total loss of a Ship, on the actual date and at the time such Ship was lost or, if such date is not known, on the date on which such Ship was last reported;
(b) in the case of a constructive total loss of a Ship, upon the date and at the time notice of abandonment of such Ship is given to the insurers of such Ship for the time being;
(c) in the case of a compromised or arranged total loss of a Ship, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the insurers of such Ship;
(d) in the case of Compulsory Acquisition of a Ship, on the date upon which the relevant requisition of title or other compulsory acquisition of such Ship occurs; and
(e) in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of a Ship (other than where the same amounts to Compulsory Acquisition of such Ship) by any person, including by any Government Entity, or by persons purporting to act on behalf of any Government Entity, which deprives the relevant Owner or (as the case may be) the Builder or (as the case may be) the Seller of the use of such Ship for more than thirty (30) days or, in the case of hijacking only of such Ship, for more than one hundred and twenty (120) days, upon the expiry of the period of thirty (30) days after the date upon which the relevant theft, condemnation, capture, seizure, arrest, detention or confiscation occurred or (as the case may be) upon the expiry of the period of one hundred and twenty (120) days after the date upon which the relevant hijacking occurred.
4.4 Amounts payable on prepayment
Any prepayment of all or part of the Loan under this Agreement shall be made together with:
4.4.1 accrued interest on the amount to be prepaid to the date of such prepayment;
4.4.2 any additional amount payable under clauses 4.6, 6.6 or 12.2; and
4.4.3 all other sums payable by the Borrowers to the Creditors under this Agreement or any of the other Security Documents including, without limitation, any accrued commitment commission payable under clause 5.1 and any amounts payable under clause 11.
4.5 Notice of prepayment; reduction of repayment instalments
4.5.1 No prepayment may be effected under clause 4.2 unless the Borrowers shall have given the Agent at least fifteen (15) days’ prior written notice of their intention to make such prepayment. Every notice of prepayment shall be effective only on actual receipt by the Agent, shall be irrevocable, shall specify the amount to be prepaid and shall oblige the Borrowers to make such prepayment on the date specified.
4.5.2 Any amount prepaid pursuant to clause 4.2 shall be applied in reducing all the Advances proportionately.
4.5.3 Any amount prepaid pursuant to clause 4.3 (but excluding clause 4.3.2(b)) shall be applied in reduction of that Advance under clause 4.1 relevant to the Borrower’s Ship lost or the Contract novated, transferred or assigned.
4.5.4 Any amount prepaid pursuant to clause 4.3.2(b) shall be applied in equal shares between the Advances in reducing of all Advances proportionately.
4.5.5 The Borrowers may not prepay the Loan or any part thereof save as expressly provided in this Agreement. No amount prepaid under this Agreement may be re-borrowed.
4.6 Prepayment fee
Any prepayment of all or part of the Loan pursuant to clause 4.2 (in the case of a refinancing by one or more lenders which do not include ABN AMRO Bank N.V.) should be made together with a prepayment fee in Dollars equal to three per cent (3%) of the Loan at the relevant time.
4.7 Mandatory repayment and cancellation of FATCA Protected Banks
4.7.1 If on the date falling six (6) months before the earliest FATCA Application Date for any payment by a Party to a FATCA Protected Bank (or to the Agent for the account of that Bank), that Bank is not a FATCA Exempt Party and, in the opinion of that Bank (acting reasonably), that Party will, as a consequence, be required to make a FATCA Deduction from a payment to that Bank on or after that FATCA Application Date (a “FATCA Event”):
(a) that Bank shall, reasonably promptly after that date, notify the Agent of that FATCA Event and the relevant FATCA Application Date;
(b) if, on the date falling one (1) month before such FATCA Application Date, that Bank has not been repaid or replaced pursuant to clause 4.7.2 (other than by reason of that Bank’s failure to comply with its obligations pursuant to clause 4.7.5):
(i) that Bank may, at any time between one (1) month and two (2) weeks before such FATCA Application Date, notify the Agent;
(ii) upon the Agent notifying the Borrowers, the Commitment of that Bank will be immediately cancelled; and
(iii) the Borrowers shall repay that Bank’s Contribution on the last day of the first Interest Period occurring after the Agent has notified the Borrowers or, if earlier, the last Banking Day before the relevant FATCA Application Date.
4.7.2 If any FATCA Protected Bank notifies the Agent of a FATCA Event, the Borrowers may, whilst the FATCA Event continues, give the Agent notice of cancellation of that Bank’s Commitment and their intention to procure the repayment of that Bank’s Contribution or give the Agent notice of their intention to replace that Bank in accordance with clause 4.7.5 below.
4.7.3 On receipt of a notice of cancellation referred to in paragraph 4.7.2 above, that Bank’s Commitment shall immediately be reduced to zero.
4.7.4 On the last day of the first Interest Period which ends after the Borrowers have given notice of cancellation under paragraph 4.7.2 above (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Bank’s Contribution.
4.7.5 The Borrowers may, in the circumstances set out in paragraph 4.7.2 above, on 10 Banking Days’ prior notice to the Agent and that Bank, replace that Bank by requiring that Bank to (and, to the extent permitted by law, that Bank shall) transfer all (and not part only) of its rights and obligations under this Agreement to another Bank or other bank or financial institution, selected by the Borrowers, which confirms its willingness to assume and does assume all the obligations of the transferring Bank for a purchase price in cash or other cash payment payable at the time of the transfer equal to the aggregate of the amount of such Bank’s Contribution and all other amounts payable in relation thereto under clause 4.4.
4.7.6 The replacement of a Bank pursuant to paragraph 4.7.5 above shall be subject to the following conditions:
(i) the Borrowers shall have no right to replace the Agent;
(ii) neither the Agent nor any Bank shall have any obligation to find a replacement Bank;
(iii) in no event shall the Bank replaced under clause 4.7.5 above be required to pay or surrender any of the fees received by such Bank pursuant to this Agreement or otherwise; and
(iv) the relevant Bank shall only be obliged to transfer its rights and obligations pursuant to clause 4.7.5 above once the Transferee, bank or financial institution is satisfied that the Transferee, bank or financial institution has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer.
4.7.7 A Bank shall perform the checks described in paragraph 4.7.6(iv) above as soon as reasonably practicable following delivery of a notice referred to in paragraph 4.7.5 above and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.
5 Fees, commitment commission and expenses
5.1 Fees
The Borrowers shall pay to the Agent:
5.1.1 for the account of the Arranger, an arrangement fee of $465,600 on the date of this Agreement; and
5.1.2 for the account of each Bank on 1 July 2013 and on each of the dates falling at three (3) monthly intervals after such date until the last day of the Drawdown Period and on such day, commitment commission computed from the date of this Agreement (in the case of the first payment of commission) and from the due date of the preceding payment of commission (in the case of each subsequent payment), at the rate of one point seven five per cent (1.75%) per annum on the daily undrawn amount of the Total Commitment.
The fee and commitment commission referred to in clause 5.1 shall be payable by the Borrowers to the Agent, whether or not any part of the Total Commitment is ever advanced and shall be, in each case, non-refundable.
5.2 Expenses
The Borrowers shall pay to the Agent on a full indemnity basis on demand all expenses (including legal, printing and out-of-pocket expenses) incurred by the Creditors or any of them:
5.2.1 in connection with the negotiation, preparation, execution and, where relevant, registration of the Security Documents (including, for the avoidance of doubt, any expenses incurred by the Creditors or any of them in connection with the legal opinions obtained pursuant to schedule 3) and of any amendment or extension of or the granting of any waiver or consent under, any of the Security Documents and the syndication of the Loan; and
5.2.2 in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under, any of the Security Documents, or otherwise in respect of the moneys owing under any of the Security Documents,
together with interest at the rate referred to in clause 3.4 from the date on which such expenses were incurred to the date of payment (as well after as before judgment).
5.3 Value added tax
All fees and expenses payable pursuant to this clause 5 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by the Creditors or any of them under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.
5.4 Stamp and other duties
The Borrowers shall pay all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by any of the Creditors) imposed on or in connection with any of the Underlying Documents, the Security Documents or the Loan and shall indemnify the Creditors or any of them against any liability arising by reason of any delay or omission by the Borrowers to pay such duties or taxes.
6 Payments and taxes; accounts and calculations
6.1 No set-off or counterclaim
The Borrowers acknowledge that in performing their obligations under this Agreement, the Banks will be incurring liabilities to third parties in relation to the funding of amounts to the Borrowers, such liabilities matching the liabilities of the Borrowers to the Banks and that it is reasonable for the Banks to be entitled to receive payments from the Borrowers gross on the due date in order that each of the Banks is put in a position to perform its matching obligations to the relevant third parties. Accordingly, all payments to be made by the Borrowers under any of the Security Documents shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 6.6, free and clear of any deductions or withholdings, in Dollars on the due date to such account at such bank and in such place as the Agent may from time to time specify for this purpose. Save as otherwise provided in this Agreement or any relevant Security Documents, such payments shall be for the account of all Banks and the Agent shall distribute such payments in like funds as are received by the Agent to the Banks rateably in accordance with their respective Commitment (if prior to the first drawdown) or Contribution (if following the first drawdown).
6.2 Payment by the Banks
All sums to be advanced by the Banks to the Borrowers under this Agreement shall be remitted in Dollars on the Drawdown Date for the relevant Advance to the account of the Agent at such bank as the Agent may have notified to the Banks and shall be paid by the Agent on such date in like funds as are received by the Agent to the account specified in the Drawdown Notice for such Advance.
6.3 Non-Banking Days
When any payment under any of the Security Documents would otherwise be due on a day which is not a Banking Day, the due date for payment shall be extended to the next following Banking Day unless such Banking Day falls in the next calendar month in which case payment shall be made on the immediately preceding Banking Day.
6.4 Calculations
All interest and other payments of an annual nature under any of the Security Documents shall accrue from day to day and be calculated on the basis of actual days elapsed and a three hundred and sixty (360) days year.
6.5 Certificates conclusive
Any certificate or determination of the Agent or the Security Agent or any Bank as to any rate of interest or any other amount pursuant to and for the purposes of any of the Security Documents shall, in the absence of manifest error, be conclusive and binding on the Borrowers and (in the case of a certificate or determination by the Agent or the Security Agent) on the other Creditors.
6.6 Grossing-up for Taxes
If at any time the Borrowers or any of them are required to make any deduction or withholding in respect of Taxes from any payment due under any of the Security Documents for the account of any Creditor or if the Agent or the Security Agent is required to make any deduction or withholding from a payment to another Creditor or withholding in respect of Taxes from any payment due under any of the Security Documents, the sum due from the Borrowers or any of them in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the relevant Creditor receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding), a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made and the Borrowers shall indemnify each Creditor against any losses or costs incurred by it by reason of any failure of the Borrowers or any of them to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Borrowers shall promptly deliver to the Agent any receipts, certificates or other proof evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
6.7 Loan account
Each Bank shall maintain, in accordance with its usual practice, an account evidencing the amounts from time to time lent by, owing to and paid to it under the Security Documents. The Agent and/or the Security Agent shall maintain a control account showing the Loan and other sums owing by the Borrowers under the Security Documents and all payments in respect thereof being made from time to time. The control account shall, in the absence of manifest error, be conclusive as to the amount from time to time owing by the Borrowers under the Security Documents.
6.8 Agent may assume receipt
Where any sum is to be paid under the Security Documents to the Agent or, as the case may be, the Security Agent for the account of another person, the Agent or, as the case may be, the Security Agent may assume that the payment will be made when due and the Agent or, as the case may be, the Security Agent may (but shall not be obliged to) make such sum available to the person so entitled. If it proves to be the case that such payment was not made to the Agent or, as
the case may be, the Security Agent, then the person to whom such sum was so made available shall on request refund such sum to the Agent or, as the case may be, the Security Agent together with interest thereon sufficient to compensate the Agent or, as the case may be, the Security Agent for the cost of making available such sum up to the date of such repayment and the person by whom such sum was payable shall indemnify the Agent or, as the case may be, the Security Agent for any and all loss or expense which the Agent or, as the case may be, the Security Agent may sustain or incur as a consequence of such sum not having been paid on its due date.
6.9 Partial payments
If, on any date on which a payment is due to be made by the Borrowers under any of the Security Documents, the amount received by the Agent from the Borrowers falls short of the total amount of the payment due to be made by the Borrowers on such date then, without prejudice to any rights or remedies available to the Agent, the Security Agent and the Banks under any of the Security Documents, the Agent shall apply the amount actually received from the Borrowers in or towards discharge of the obligations of the Borrowers under the Security Documents in the following order, notwithstanding any appropriation made, or purported to be made, by the Borrowers:
6.9.1 first, in or towards payment, on a pro-rata basis, of any unpaid costs and expenses of the Agent and the Security Agent under any of the Security Documents;
6.9.2 secondly, in or towards payment, on a pro rata basis, of any fees and accrued commitment commission payable to the Arranger, the Agent or any of the other Creditors under, or in relation to, the Security Documents which remain unpaid;
6.9.3 thirdly, in or towards (i) payment to the Banks, of any accrued interest which shall have become due under any of the Security Documents but remains unpaid and (ii) payment to the Banks, of any amount of principal which shall have become due under any of the Security Documents but remains unpaid;
6.9.4 fourthly, in or towards payment to the Banks, on a pro rata basis, for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid; and
6.9.5 fifthly, in or towards payment to the relevant person of any other sum which shall have become due under any of the Security Documents but remains unpaid (and, if more than one such sum so remains unpaid, on a pro rata basis).
The order of application set out in clauses 6.9.3 to 6.9.5 may be varied by the Agent if the Majority Banks so direct, without any reference to, or consent or approval from, the Borrowers or any other Creditor.
6.10 FATCA Deduction
6.10.1 Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Creditor shall be required to increase any payment in respect of which it makes such a FATCA Deduction.
6.10.2 Each Party 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 Borrowers, the Agent and the other Creditors.
7 Representations and warranties
7.1 Continuing representations and warranties
The Borrowers jointly and severally represent and warrant to each Creditor that:
7.1.1 Due incorporation
each of the Borrowers and each of the other Security Parties are duly incorporated and validly existing in good standing under the laws of their respective countries of incorporation as limited liability companies or (as the case may be) corporations, have no centre of main interests, permanent establishment or place of business in the Republic of the Marshall Islands, the UK or the USA, is not a FATCA or a US Tax Obligor and have power to carry on their respective businesses as they are now being conducted and to own their respective property and other assets;
7.1.2 Corporate power
each of the Borrowers has power to execute, deliver and perform its obligations under the relevant Underlying Documents and the relevant Borrower’s Security Documents to which it is or is to be a party and to borrow the Total Commitment and each of the other Security Parties has power to execute and deliver and perform its obligations under the Security Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same and no limitation on the powers of any Borrower to borrow will be exceeded as a result of borrowing the Loan;
7.1.3 Binding obligations
the Underlying Documents and the Security Documents constitute or will, when executed, constitute valid and legally binding obligations of the relevant Security Parties enforceable in accordance with their respective terms;
7.1.4 No conflict with other obligations
the execution and delivery of, the performance of their obligations under, and compliance with the provisions of, the Underlying Documents and the Security Documents by the relevant Security Parties will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which any of the Borrowers or any other Security Party is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Borrowers or any other Security Party is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the constitutional documents of any of the Borrowers or any other Security Party or (iv) result in the creation or imposition of or oblige any of the Borrowers or any other Security Party to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of any of the Borrowers or any other Security Party;
7.1.5 No litigation
no litigation, arbitration or administrative proceeding is taking place, pending or, to the knowledge of the officers of any of the Borrowers, threatened against any of the Borrowers or any other Security Party or any other member of the Group which could have a material adverse effect on the business, assets or financial condition of any of the Borrowers or any other Security Party or any other member of the Group;
7.1.6 No filings required
save for the registration of the Mortgages in the relevant register under the laws of the relevant Flag State through the relevant Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Underlying Documents or any of the Security Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to any of the Underlying Documents or the Security Documents and each of the Underlying Documents and the Security Documents is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
7.1.7 Choice of law
the choice of English law to govern the Underlying Documents and the Security Documents (other than the Mortgages and the Cash Collateral Account Pledge), the choice of (i) the law of the Republic of the Marshall Islands to govern each Mortgage and (ii) Dutch law to govern the Cash Collateral Account Pledge, and the submissions by the Security Parties to the non-exclusive jurisdiction of the English courts or (in the case of the Cash Collateral Account Pledge) the courts of The Netherlands, are valid and binding;
7.1.8 No immunity
neither the Borrowers nor any other Security Party nor any of their respective assets is entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement);
7.1.9 Consents obtained
every consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by any Security Party to authorise, or required by any Security Party in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of each of the Underlying Documents and each of the Security Documents to which it is or is to be a party or the performance by each Security Party of its obligations under the Security Documents or the Underlying Documents to which it is or is to be a party has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed in, or in connection with, any of the same; and
7.1.10 Shareholdings
(a) each Borrower and each Collateral Guarantor is a wholly-owned direct Subsidiary of the Shareholder and all of the issued shares in each of the Corporate Guarantor and the Manager are legally and ultimately beneficially owned by such person or persons as have been disclosed by or on behalf of the Borrowers or any other Security Party to the Agent, the Arranger and the Banks in the negotiation of this Agreement; and
(b) on the date of this Agreement, the Robertson Disclosed Persons together own shares (legally and/or beneficially, directly or indirectly) in the Corporate Guarantor which can cast not less than 11% of the maximum number of votes that might be cast at a general meeting of the shareholders of the Corporate Guarantor; and
(c) on the date of this Agreement, the Riverstone Disclosed Persons together own shares (legally and/or beneficially, directly or indirectly) in the Corporate Guarantor which can
cast not less than 20% of the maximum number of votes that might be cast at a general meeting of the shareholders of the Corporate Guarantor; and
7.1.11 Compliance with laws and regulations
each of the Borrowers, the Corporate Guarantor, each of the Collateral Guarantors and the Manager is in compliance with the terms and conditions of all laws, regulations, agreements, licenses and concessions material to the carrying on of its business (including in relation to Taxation).
7.2 initial representations and warranties
The Borrowers jointly and severally further represent and warrant to each Creditor that:
7.2.1 Pari passu and subordinated indebtedness
the obligations of each Borrower under this Agreement and the obligations of each Transaction Guarantor under the relevant Transaction Guarantee are direct, general and unconditional obligations of such Borrower and such the Transaction Guarantor, respectively, and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of such Borrower and such Transaction Guarantor, respectively, with the exception of any obligations which are mandatorily preferred by law and not by contract;
7.2.2 No default under other Indebtedness
none of the Borrowers nor any of their respective Related Companies nor any other Security Party is (nor would with the giving of notice or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Indebtedness to which it is a party or by which it may be bound;
7.2.3 Information
the information, exhibits and reports furnished by or on behalf of any Security Party to the Creditors or any of them in connection with the negotiation and preparation of the Security Documents are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
7.2.4 No withholding Taxes
no Taxes are imposed by withholding or otherwise on any payment to be made by any Security Party under the Underlying Documents or the Security Documents to which such Security Party is or is to be a party or are imposed on or by virtue of the execution or delivery by the Security Parties of the Underlying Documents or the Security Documents or any other document or instrument to be executed or delivered under any of the Security Documents;
7.2.5 No Default
no Default has occurred and is continuing;
7.2.6 No Default under Contracts, Refund Guarantees or Contract Guarantees
none of the Borrowers is in default of any of its obligations under the relevant Contract or any of its obligations upon the performance or observance of which depend the continued liability of (a)
the relevant Refund Guarantor in accordance with the terms of any Refund Guarantee relating to such Contract or (b) the Contract Guarantor in accordance with the terms of each Contract Guarantee;
7.2.7 Freedom from Encumbrances
none of the Borrowers has previously charged, encumbered or assigned the benefit of any of its rights, title and interest in or to the Contract, any Refund Guarantee or the Contract Guarantee relating to such Borrower’s Ship and such benefit and all such rights, title and interest are freely assignable and chargeable in the manner contemplated by the Security Documents;
7.2.8 Copies, true and complete or originals - commissions
(a) the copies or (as the case may be) originals of the executed Underlying Documents delivered or to be delivered to the Agent pursuant to clause 9.1 are, or will when delivered be, true and complete copies or (as the case may be) originals of such documents; such documents constitute valid and binding obligations of the parties thereto enforceable in accordance with their respective terms and there will have been no amendments or variations thereof or defaults thereunder; and
(b) there are no address or other commissions payable to any of the Borrowers or any other Relevant Party on account of any of the Contracts, except as disclosed in writing by or on behalf of the Borrowers or any other Security Party to the Bank prior to the date of this Agreement;
7.2.9 No material adverse change
there has been no material adverse change in the financial position or the business of any Security Party or any other member of the Group, from that described by or on behalf of the Borrowers to the Creditors or any of them in the negotiation of this Agreement; and
7.2.10 Borrowers’ own account
in relation to the borrowing by each Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Security Documents and the transactions and other arrangements effected or contemplated by this Agreement, each Borrower is acting for its own account and that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented by any relevant regulatory authority or otherwise to combat “money laundering” (as defined in Article 1 of the Directive 2005/60/EC of the European Parliament and of the Council of the European Union of 26 October 2005 as amended).
7.3 Repetition of representations and warranties
On and as of each Drawdown Date and (except in relation to the representations and warranties in clause 7.2) on each Interest Payment Date, the Borrowers shall:
(a) be deemed to repeat the representations and warranties in clauses 7.1 and 7.2 as if made with reference to the facts and circumstances existing on such day; and
(b) be deemed to further represent and warrant to each of the Creditors that the then latest audited financial statements delivered to the Agent by the Borrowers (if any) have been prepared in accordance with generally accepted international accounting principles which have been consistently applied and present fairly and accurately the consolidated financial position of the Group and the financial position of the Borrowers, respectively, as
at the end of the financial period to which the same relate and the consolidated results of the operations of the Group and the results of the operations of the Borrowers, respectively, for the financial period to which the same relate and, as at the end of such financial period, neither the Borrowers nor the Corporate Guarantor nor any other member of the Group had any significant liabilities (contingent or otherwise) or any unrealised or anticipated losses which are not disclosed by, or reserved against or provided for in, such financial statements.
8 Undertakings
8.1 General
The Borrowers jointly and severally undertake with each Creditor that, throughout the Security Period and while all or any part of the Total Commitment remains outstanding, each Borrower will:
8.1.1 Notice of Default
(a) promptly inform the Agent of any occurrence of which it becomes aware which might adversely affect the ability of any Security Party to perform its obligations under any of the Security Documents or the Underlying Documents to which it is or is to be a party and, without limiting the generality of the foregoing, will inform the Agent of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Agent, confirm to the Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing; and
(b) promptly inform the Agent of any occurrence of which it becomes aware which might adversely affect the ability or rights of a Borrower to make any claims under any Refund Guarantee or the Contract or (if applicable) the Contract Guarantee relating to such Borrower’s Ship or which might reduce or release any of the obligations of the Refund Guarantor under any such Refund Guarantee, of the relevant Builder or (as the case may be) the Seller under such Contract or the Contract Guarantor under such Contract Guarantee;
8.1.2 Consents and licences; compliance with laws and regulations
(a) without prejudice to clauses 7.1 and 9, obtain or cause to be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Security Parties under each of the Security Documents and the Underlying Documents; and
(b) comply and will procure that each Transaction Guarantor will comply, with the terms and conditions of all laws, regulations, agreements, licences and concessions material to the carrying out of its business;
8.1.3 Conveyance on default
where any Borrower’s Ship is (or is to be) sold in exercise of any power contained in the Pre-delivery Security Assignment relating to such Borrower’s Ship or otherwise conferred on the Security Agent, execute, forthwith upon request by the Security Agent, such form of conveyance of such Ship as the Security Agent may require;
8.1.4 Use of proceeds
use the Loan or, as the case may be, the Advances for the benefit of the Borrowers and exclusively for the purposes specified in clauses 1.1 and 2.5;
8.1.5 Pari passu
ensure that its obligations under this Agreement shall, without prejudice to the provisions of clause 8.3, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
8.1.6 Financial statements and valuations
(a) prepare or cause to be prepared consolidated financial statements of the Group in accordance with generally accepted accounting principles in the United States of America consistently applied in respect of each financial year (namely, each 12-month period ending on 31 December of each calendar year) and cause the same to be reported on by the auditors and prepare unaudited consolidated financial statements of the Group on the same basis as the annual statements in respect of the first half-year of each financial year (namely, each 6-month period ending on 30 June of each calendar year) and, in each case, deliver as many copies of the same as the Agent may reasonably require as soon as practicable but not later than:
(i) in the case of audited financial statements, one hundred and eighty (180) days after the end of the financial period to which they relate (namely, not later than 30 June of each calendar year); or
(ii) in the case of unaudited financial statements, ninety (90) days after the end of the financial period to which they relate (namely, not later than 30 September of each calendar year); and
(b) deliver or cause to be delivered to the Agent a valuation (dated not earlier than 30 days previously) of each Fleet Vessel prepared in accordance with, and in the manner specified in, clause 8.2.1 (at the expense of the Borrowers) at the time when any audited annual and unaudited consolidated financial statements of the Group are delivered to the Agent in accordance with clause 8.1.6(a) and clause 5.1 of the Corporate Guarantee;
8.1.7 Delivery of reports
deliver to the Agent sufficient copies for all the Banks of every report, circular, notice or like document issued by any Relevant Party to its shareholders or creditors generally;
8.1.8 Provision of further information
(a) provide the Agent, with such financial or other information concerning any Borrower, the other Security Parties and any other member of the Group and their respective affairs (including, without limitation, information about all major financial developments, new borrowings, the sale and purchase of vessels) as the Agent or any Bank (acting through the Agent) may from time to time require; and
(b) procure that at any time the Corporate Guarantor pursues an initial public offering of its shares on any stock exchange, the Corporate Guarantor will appoint ABN AMRO Bank N.V. as one of the underwriters in such initial public offering pursuant to the terms agreed
by the other selected underwriters or any other terms to be agreed between ABN AMRO Bank N.V. and the Corporate Guarantor;
8.1.9 Know your customer information
deliver to the Agent such documents and evidence as the Agent shall from time to time require relating to the verification of identity and knowledge of the Agent’s or any Bank’s customers and the compliance by the Agent or any Bank with all necessary “know your customer” or similar checks, always on the basis of applicable laws and regulations or the Agent’s or any Bank’s own internal guidelines, in each case as such laws, regulations or internal guidelines apply from time to time;
8.1.10 Obligations under Security Documents
and will procure that each of the other Security Parties will, duly and punctually perform each of the obligations expressed to be assumed by it under the Security Documents and the Underlying Documents to which it is a party;
8.1.11 Compliance with Code
and will procure that any Operator will, comply with and ensure that the Collateral Ships and any Operator complies with the requirements of the Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period;
8.1.12 Withdrawal of DOC and SMC
and will procure that any Operator will, immediately inform the Agent if there is any threatened or actual withdrawal of such Operator’s DOC or the SMC in respect of any of the Collateral Ships;
8.1.13 Issuance of DOC and SMC
and will procure that any Operator will, promptly inform the Agent upon the issue to any of the Collateral Guarantors or any Operator of a DOC and to any of the Collateral Ships of an SMC or the receipt by any of the Collateral Guarantors or any Operator of notification that its application for the same has been refused;
8.1.14 ISPS Code compliance
and will procure that the Manager or any Operator will:
(a) from the date when a Mortgage is registered in relation to a Collateral Ship and at all times thereafter, maintain a valid and current ISSC in respect of that Collateral Ship;
(b) immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of a Collateral Ship; and
(c) procure that from the date when a Mortgage is registered in relation to a Collateral Ship and at all times thereafter, that Collateral Ship complies with the ISPS Code;
8.1.15 Supervision
ensure that the Manager or any other person appointed by the Manager and acceptable to the Agent, will supervise and superintend the construction of a Borrower’s Ship;
8.1.16 Inspection
ensure that the Agent, by surveyors or other persons appointed by it for such purpose, may at all reasonable times inspect each of the Borrowers’ Ships and to afford all proper facilities for such inspections and to pay the costs in respect of such inspections;
8.1.17 FATCA Information
(a) subject to paragraph (c) below, each Party shall, within ten (10) Banking Days of a reasonable request by another Party:
(i) confirm to that other Party whether it is:
(A) a FATCA Exempt Party; or
(B) not a FATCA Exempt Party; and
(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA (including, without limitation, Internal Revenue Service Forms W-8 or W-9, its applicable passthru percentage or other information required under the Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA;
(b) if a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and its subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly; and
(c) paragraph (a) above, shall not oblige any Creditor to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any policy of that Creditor;
(iii) any fiduciary duty; or
(iv) any duty of confidentiality provided that, for the avoidance of doubt, the disclosure of information required by Internal Revenue Service Forms W-8 and W-9 (or any equivalent or successor forms) shall not constitute a breach of duty of confidentiality; and
(d) if a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then:
(i) if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party, such Party shall be treated for the purposes of the Security Documents as if it is not a FATCA Exempt Party; and
(ii) if that Party failed to confirm its applicable passthru percentage then such Party shall be treated for the purposes of the arrangements relating to this Agreement (and payments made thereunder) as if its applicable passthru percentage is 100%,
until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information; and
8.1.18 Conditions subsequent - Imabari Ships - all Advances (other than the first one)
deliver to the Agent in the case of an Imabari Ship:
(a) not later than 15 days after the date a Refund Guarantee (other than the Refund Guarantee relating to the first instalment of each Imabari Ship) is issued in respect of an Imabari Ship:
(i) the Refund Guarantee Assignment Consent and Acknowledgement in respect of the Refund Guarantee for the second instalment or, as the case may be, the third instalment of the Contract Price for an Imabari Ship, duly executed by the parties thereto;
(ii) evidence in form and substance satisfactory to the Agent of the authority of the parties executing the above said acknowledgments (except if the relevant acknowledgment has been sent to the Agent by swift);
(b) not later than 30 days after the date a Refund Guarantee (other than the Refund Guarantee relating to the first instalment of each Imabari Ship), a legal opinion (at the expense of the Borrowers) issued by the Agent’s special legal advisers on matters of Japanese law each in form and substance satisfactory to the Agent (it being understood that, as is customary in banking practice, the procurement of the legal opinion will be the responsibility of the Agent and its legal counsel).
8.2 Valuation of Borrowers’ Ships
8.2.1 Valuation of Ships
Each Borrower’s Ship shall, for the purposes of this Agreement, be valued in Dollars as and when the Agent (acting on the instructions of the Majority Banks) shall require (and at least once every calendar year) by any two (2) Approved Shipbrokers selected by the Borrowers or, failing such selection, selected by the Agent in its sole discretion. Each such valuation shall be made without, unless required by the Agent, physical inspection, and on the basis of a sale for prompt delivery for cash at arm’s length, on normal commercial terms, as between a willing buyer and a willing seller, without taking into account the benefit of any charterparty or other engagement concerning the relevant Borrower’s Ship. The arithmetic mean of such two (2) valuations shall constitute the value of such Borrower’s Ship for the purposes of this clause 8.2.
The value of each Borrower’s Ship determined in accordance with the provisions of this clause 8.2.1 shall be binding upon the parties hereto until such time as any further such valuation shall be obtained.
8.2.2 Information
The Borrowers jointly and severally undertake with the Creditors to supply to the Agent and to any such Approved Shipbrokers such information concerning the relevant Borrower’s Ship and its condition as such Approved Shipbrokers may require for the purpose of making any such valuation.
8.2.3 Costs
All costs in connection with the Agent obtaining any valuation referred to in clause 8.2.1 and schedule 3, Part 2 and Part 3, shall be borne by the Borrowers.
8.3 Negative undertakings
The Borrowers jointly and severally undertake with each Creditor that, throughout the Security Period and while all or any part of the Total Commitment remains outstanding, they will not, without the prior written consent of the Agent (acting on the instructions of the Majority Banks) (such consent not to be unreasonably withheld in the case of clause 8.3.15):
8.3.1 Negative pledge
permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be created or extended over all or any part of their respective present or future undertakings, assets, rights or revenues to secure or prefer any present or future Indebtedness or other liability or obligation of any Relevant Party or any other person;
8.3.2 No merger
merge or consolidate with any other person or enter into any demerger, amalgamation or corporate reconstruction or redomiciliation of any type;
8.3.3 Disposals
sell, transfer, abandon, lend or otherwise dispose of or cease to exercise direct control over any part of their present or future undertaking, assets, rights or revenues (otherwise than by transfers, sales or disposals for full consideration in the ordinary course of trading, but not of assets which are subject to the Security Documents) whether by one or a series of transactions related or not;
8.3.4 Other business
undertake any business other than the performance of the Contract relevant to such Borrower, including the supervision of the building and construction of the relevant Borrower’s Ship pursuant to such Contract and will procure that none of the Transaction Guarantors will, without the prior written consent of the Agent, undertake any business other than that conducted by each of the Transaction Guarantors on the date of this Agreement;
8.3.5 Acquisitions
acquire any further assets other than the Borrowers’ Ships and the relevant Contracts and rights arising under contracts entered into by or on behalf of the Borrowers in the ordinary course of their businesses of performing the Contract relevant to such Borrower’s Ship;
8.3.6 Other obligations
incur any obligations except for obligations arising under the Underlying Documents or the Security Documents or contracts entered into in the ordinary course of their business of performing the Contract relevant to such Borrower’s Ship;
8.3.7 No borrowing
incur any Borrowed Money except for Borrowed Money pursuant to the Security Documents;
8.3.8 Repayment of borrowings
repay or prepay the principal of, or pay interest on or any other sum in connection with any of their Borrowed Money except for Borrowed Money pursuant to the Security Documents;
8.3.9 Guarantees
issue any guarantees or indemnities or otherwise become directly or contingently liable for the obligations of any person, firm, or corporation except pursuant to the Security Documents;
8.3.10 Loans
make any loans or grant any credit (save for normal trade credit in the ordinary course of business) to any person or agree to do so;
8.3.11 Sureties
permit any Indebtedness of any Borrower to any person (other than the Creditors pursuant to the Security Documents) to be guaranteed by any person;
8.3.12 Share capital and distribution
purchase or otherwise acquire for value any shares of their capital or declare or pay any dividends or distribute any of their present or future assets, undertakings, rights or revenues to any of their shareholders Provided however that each Borrower shall be entitled to declare or pay cash dividends to the Shareholder if no Event of Default has occurred and is continuing at the time of declaration or payment of such dividends, nor would result from the declaration or payment of such dividends;
8.3.13 Subsidiaries
form or acquire any Subsidiaries;
8.3.14 Shareholdings
change, cause or permit any change in, the legal and/or ultimate beneficial ownership of any of the shares in any of the Borrowers or the Corporate Guarantor or any of the Collateral Guarantors or the Manager from that specified in clause 7.1.10;
8.3.15 Change of supervision of the Borrowers’ Ships
appoint any person to carry out the supervision of any of the Borrowers’ Ships other than the Manager or terminate any of the Management Agreements relevant to a Borrower’s Ship or vary or amend the terms thereof;
8.3.16 Constitutional documents
permit, cause or agree to any amendment or variation of their respective constitutional documents or any change of their respective corporate name;
8.3.17 Auditors and financial year
change their auditors from those existing on the date of this Agreement or change their financial year end;
8.3.18 Designated Transactions
enter into any derivative transactions; or
8.3.19 FATCA
Become a FATCA FFI or a US Tax Obligor.
9 Conditions
9.1 Documents and evidence
The obligation of each Bank to make its Commitment available shall be subject to the condition that the Agent, or its duly authorised representative, shall have received:
9.1.1 on or prior to the date of this Agreement, the documents and evidence specified in Part 1 of schedule 3, in form and substance satisfactory to the Agent;
9.1.2 on or prior to the giving of the Drawdown Notice for each First Advance, the documents and evidence specified in Part 2 of schedule 3, in form and substance satisfactory to the Agent; and
9.1.3 on or prior to the drawdown of each Second Advance, each Third Advance and (if applicable) each Fourth Advance, the documents and evidence specified in Part 3 of schedule 3, in form and substance satisfactory to the Agent.
9.2 General conditions precedent
The obligation of the Banks to make an Advance available shall be subject to the further conditions that, at the time of the giving of the Drawdown Notice for such Advance, and at the time of the making of such Advance:
9.2.1 the representations and warranties contained in (a) clauses 7.1, 7.2 and 7.3(b) of this Agreement and (b) clause 4 of each Transaction Guarantee, are true and correct on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
9.2.2 no Default shall have occurred and be continuing or would result from the making of the relevant Advance.
9.3 Waiver of conditions precedent
The conditions specified in this clause 9 are inserted solely for the benefit of the Banks and may be waived by the Agent (acting on the instructions of the Majority Banks) in whole or in part and with or without conditions.
9.4 Further conditions precedent
Not later than five (5) Banking Days prior to each Drawdown Date and not later than five (5) Banking Days prior to each Interest Payment Date, the Agent (acting on the instructions of the Majority Banks) may request and the Borrowers shall, not later than two (2) Banking Days prior to such date, deliver to the Agent on such request further relevant certificates and/or favourable opinions as to any or all of the matters which are the subject of clauses 7, 8, 9 and 10.
10 Events of Default
10.1 Events
There shall be an Event of Default if:
10.1.1 Non-payment: any Security Party fails to pay any sum payable by it under any of the Security Documents at the time, in the currency and in the manner stipulated in the Security Documents or the Underlying Documents (and so that, for this purpose, sums payable on demand shall be treated as having been paid at the stipulated time if paid within three (3) Banking Days of demand); or
10.1.2 Breach of material obligations: any of the Borrowers commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by it under clauses 8.2 or 8.3 or any of the Collateral Guarantors or, as the case may be, the Manager or any other person fails to obtain and/or maintain the Insurances for any of the Mortgaged Ships or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of mis-statement in any proposal for the Insurances or for any other failure or default on the part of any of the Collateral Guarantors or any other person or any Transaction Guarantor commits any breach or omits to observe any of the obligations or undertakings expressed to be assumed by such Transaction Guarantor under clause 5 of each Transaction Guarantee to which it is a party; or
10.1.3 Breach of other obligations: any Security Party commits any breach of or omits to observe any of its obligations or undertakings expressed to be assumed by it under any of the Security Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above) and, in respect of any such breach or omission which in the opinion of the Agent (following consultation with the Banks) is capable of remedy, such action as the Agent (acting on the instructions of the Majority Banks) may require shall not have been taken within fourteen (14) days of the Agent notifying the relevant Security Party of such default and of such required action; or
10.1.4 Misrepresentation: any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Security Documents or in any notice, certificate or statement referred to in or delivered under any of the Security Documents is or proves to have been incorrect or misleading in any material respect; or
10.1.5 Cross-default: any Indebtedness of any Security Party or any other Relevant Party is not paid when due or any Indebtedness of any Security Party or other Relevant Party becomes (whether by declaration or automatically in accordance with the relevant agreement or instrument constituting the same) due and payable prior to the date when it would otherwise have become due (unless as a result of the exercise by the relevant Security Party or any other Relevant Party of a voluntary right of prepayment), or any creditor of any Security Party or any other Relevant Party becomes entitled to declare any such Indebtedness due and payable or any facility or commitment available to any Security Party or any other Relevant Party relating to Indebtedness is withdrawn, suspended or cancelled by reason of any default (however described) of the person concerned unless the relevant Security Party or other Relevant Party shall have satisfied the Agent that such withdrawal, suspension or cancellation will not affect or prejudice in any way the relevant Security Party’s or other Relevant Party’s ability to pay its debts as they fall due and fund its commitments, or any guarantee given by any Security Party or other Relevant Party in respect of Indebtedness is not honoured when due and called upon; or
10.1.6 Legal process: any judgment or order made against any Security Party or other Relevant Party is not stayed or complied with within thirty (30) days or a creditor attaches or takes possession of, or a distress, execution, sequestration or other process is levied or enforced upon or sued out against, any of the undertakings, assets, rights or revenues of any Security Party or other Relevant Party and is not discharged within thirty (30) days; or
10.1.7 Insolvency: any Security Party or other Relevant Party is unable or admits inability to pay its debts as they fall due; suspends making payments on any of its debts or announces an intention to do so; becomes insolvent; has assets the value of which is less than the value of its liabilities (taking into account contingent and prospective liabilities); or suffers the declaration of a moratorium in respect of any of its Indebtedness; or
10.1.8 Reduction or loss of capital: a meeting is convened by any Security Party or other Relevant Party for the purpose of passing any resolution to purchase, reduce or redeem any of its share capital; or
10.1.9 Winding up: any corporate action, legal proceedings or other procedure or step is taken for the purpose of winding up any Security Party or other Relevant Party or an order is made or resolution passed for the winding up of any Security Party or other Relevant Party or a notice is issued convening a meeting for the purpose of passing any such resolution; or
10.1.10 Administration: any petition is presented, notice given or other step is taken for the purpose of the appointment of an administrator of any Security Party or other Relevant Party or the Agent believes that any such petition or other step is imminent or an administration order is made in relation to any Security Party or other Relevant Party; or
10.1.11 Appointment of receivers and managers: any administrative or other receiver is appointed of any Security Party or other Relevant Party or any part of its assets and/or undertaking or any other steps are taken to enforce any Encumbrance over all or any part of the assets of any Security Party or other Relevant Party; or
10.1.12 Compositions: any corporate action, legal proceedings or other procedures or steps are taken, or negotiations commenced, by any Security Party or other Relevant Party or by any of its creditors with a view to the general readjustment or rescheduling of all or part of its indebtedness or to proposing any kind of composition, compromise or arrangement involving such company and any of its creditors; or
10.1.13 Analogous proceedings: there occurs, in relation to any Security Party or other Relevant Party, in any country or territory in which any of them carries on business or to the jurisdiction of whose courts any part of their assets is subject, any event which, in the reasonable opinion of the Agent, appears in that country or territory to correspond with, or have an effect equivalent or similar to, any of those mentioned in clauses 10.1.6 to 10.1.12 (inclusive) or any Security Party or other Relevant Party otherwise becomes subject, in any such country or territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or
10.1.14 Cessation of business: any Security Party or other Relevant Party suspends or ceases or threatens to suspend or cease to carry on its business; or
10.1.15 Seizure: all or a material part of the undertaking, assets, rights or revenues of, or shares or other ownership interests in, any Security Party or other Relevant Party are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any government; or
10.1.16 Invalidity: any of the Security Documents and the Underlying Documents shall at any time and for any reason become invalid or unenforceable or otherwise cease to remain in full force and effect, or if the validity or enforceability of any of the Security Documents and the Underlying Documents shall at any time and for any reason be contested by any Security Party or other Relevant Party which is a party thereto, or if any such Security Party or Relevant Party shall deny that it has any, or any further, liability thereunder; or
10.1.17 Unlawfulness: it becomes impossible or unlawful at any time for any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by it in any of the Security Documents
or for a Creditor to exercise the rights or any of them vested in it under any of the Security Documents or otherwise; or
10.1.18 Repudiation: any Security Party repudiates any of the Security Documents or does or causes or permits to be done any act or thing evidencing an intention to repudiate any of the Security Documents; or
10.1.19 Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of the property (or part thereof) which is the subject of any of the Security Documents becomes enforceable; or
10.1.20 Material adverse change: there occurs, in the opinion of the Agent, a material adverse change in the financial condition, operations, prospects or business of any Security Party or any other member of the Group by reference to the financial condition, operations, prospects or (as the case may be) business of such Security Party or other member of the Group, as described by or on behalf of any Borrower or any other Security Party to the Agent in the negotiation of this Agreement; or
10.1.21 Arrest: any Collateral Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession of the relevant Collateral Guarantor and the relevant Collateral Guarantor shall fail to procure the release of such Ship within a period of thirty (30) days thereafter; or
10.1.22 Registration: the registration of any Collateral Ship under the laws and flag of the relevant Flag State is cancelled or terminated without the prior written consent of the Majority Banks or the registration of such Collateral Ship, if renewable, is not renewed at least forty-five (45) days prior to the expiry of such registration; or
10.1.23 Unrest: the Flag State of any Collateral Ship becomes involved in hostilities or civil war or there is a seizure of power in the Flag State of any Collateral Ship by unconstitutional means; or
10.1.24 Environment: any Collateral Guarantor and/or any other Relevant Party and/or any of their respective Environmental Affiliates fails to comply with any Environmental Law or any Environmental Approval or any of the Collateral Ships or any other Relevant Ship is involved in any incident which gives rise or may give rise to an Environmental Claim; or
10.1.25 P&l: any Collateral Guarantor or the Manager or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which a Collateral Ship is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including, without limitation, any cover in respect of liability for Environmental Claims arising in jurisdictions where such Collateral Ship operates or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
10.1.26 Shareholdings:
(a) there is any change in the legal and/or ultimate beneficial ownership of any of the shares in any of the Borrowers or any of the Collateral Guarantors or the Manager from that existing on the date of this Agreement as set out in clause 7.1.10; or
(b) a Change of Control occurs without the prior written consent of the Agent; or
10.1.27 Cash Collateral Account: moneys are withdrawn from the Cash Collateral Account other than in accordance with clause 14; or
10.1.28 Manager: any Ship is managed by a person other than the Manager without the prior written consent of the Agent (acting on the instructions of the Majority Banks); or
10.1.29 Licenses, etc: any license, authorisation, consent or approval at any time necessary to enable any Security Party to comply with its obligations under the Security Documents or the Underlying Documents is revoked or withheld or modified or is otherwise not granted or fails to remain in full force and effect or if any exchange control or other law or regulation shall exist which would make any transaction under the Security Documents or the Underlying Documents or the continuation thereof, unlawful or would prevent the performance by any Security Party of any term of any of the Security Documents or the Underlying Documents; or
10.1.30 Material events: any other event occurs or circumstance arises which, in the reasonable opinion of the Agent (following consultation with the Banks), is likely materially and adversely to affect either (i) the ability of any Security Party to perform all or any of its obligations under or otherwise to comply with the terms of any of the Security Documents or any of the Underlying Documents or (ii) the security created by any of the Security Documents; or
10.1.31 Termination or variation of, or dispute under, Contracts: any Contract is terminated or rescinded for any reason whatsoever or any Contract is frustrated or any Contract is varied in any manner not permitted by or pursuant to the relevant Pre-delivery Security Assignment or this Agreement; or there is any dispute or litigation or any other proceedings between the relevant parties under or in respect of any Contract; or
10.1.32 Termination of Refund Guarantees: any Refund Guarantee is repudiated, cancelled, rescinded or otherwise revoked or terminated (other than by the return of such Refund Guarantee by the relevant Borrower to the relevant Builder or (as the case may be) the Seller and/or the Refund Guarantor on or following the Delivery of the Borrower’s Ship relevant to such Refund Guarantee); or
10.1.33 Termination of Contract Guarantees: either of the Contract Guarantees is repudiated, cancelled, rescinded or otherwise terminated (other than by the return of that Contract Guarantee by the Borrowers to the Seller and/or the Contract Guarantor following the Delivery of the Borrower’s Ship to which such Contract Guarantee relates); or
10.1.34 Non-Delivery of Ship: any Borrower’s Ship is not delivered to, and accepted by, the relevant Borrower under the relevant Contract by the last day possible to be tendered for delivery under the relevant Contract; or
10.1.35 Payments under Refund Guarantees: any claim made under any Refund Guarantee is not paid by the Refund Guarantor at the time specified by, and in accordance with, the terms of the relevant Refund Guarantee, after receipt by the Refund Guarantor of the relevant written demand thereunder.
10.2 Acceleration
The Agent may, and if so requested by the Majority Banks shall, without prejudice to any other rights of the Banks, at any time after the occurrence of an Event of Default by notice to the Borrowers declare that:
10.2.1 the obligation of each Bank to make available its Commitment shall be terminated, whereupon the Total Commitment shall be reduced to zero forthwith; and/or
10.2.2 the Loan and all interest and commitment commission accrued and all other sums payable under the Security Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of such notice, become due and payable.
10.3 Demand basis
If, pursuant to clause 10.2.2, the Agent declares the Loan to be due and payable on demand, the Agent may (and if so instructed by the Majority Banks shall) by written notice to the Borrowers (a) call for repayment of the Loan on such date as may be specified whereupon the Loan shall become due and payable on the date so specified together with all interest and commitment commission accrued and all other sums payable under this Agreement or (b) withdraw such declaration with effect from the date specified in such notice.
11 Indemnities
11.1 Miscellaneous indemnities
11.1.1 The Borrowers shall on demand indemnify each Creditor, without prejudice to any of such Creditor’s other rights under any of the Security Documents, against any loss (including loss of Margin) or expense which such Creditor shall certify as sustained or incurred by it as a consequence of:
11.1.2 any default in payment of any sum under any of the Security Documents when due; the occurrence of any other Event of Default;
11.1.3 any prepayment or reduction of the Loan or part thereof being made under clauses 4.2, 4.3 or 12.1 or any other repayment or prepayment of the Loan or part thereof being made otherwise than on an Interest Payment Date relating to the part of the Loan prepaid or repaid; or
11.1.4 any Advance not being made for any reason (excluding any default by the Agent or any Bank) after the Drawdown Notice for such Advance has been given,
including, in any such case, but not limited to, any loss or expense sustained or incurred by the relevant Creditor in maintaining or funding its Contribution or, as the case may be, its Commitment (or any part thereof) or in liquidating or re-employing deposits from third parties acquired to effect or maintain its Contribution or, as the case may be, its Commitment (or any part thereof), or any other amount owing to such Creditor.
11.2 Currency indemnity
If any sum due from any of the Borrowers under any of the Security Documents or any order or judgment given or made in relation thereto has to be converted from the currency (the “first currency”) in which the same is payable under the relevant Security Document or under such order or judgment into another currency (the “second currency”) for the purpose of (a) making or filing a claim or proof against the Borrowers or any of them, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to any of the Security Documents, the Borrowers shall indemnify and hold harmless each Creditor from and against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the relevant Creditor may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. Any amount due from the Borrowers under this clause 11.2 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of any of the Security Documents and the term “rate of exchange” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
11.3 Environmental indemnity
The Borrowers shall indemnify each Creditor on demand and hold it harmless from and against all costs, expenses, payments, charges, losses, demands, liabilities, actions, proceedings (whether civil or criminal), penalties, fines, damages, judgements, orders, sanctions or other outgoings of whatever nature which may be suffered, incurred or paid by, or made or asserted against such Creditor at any time, whether before or after the repayment in full of principal and interest under this Agreement, relating to, or arising directly or indirectly in any manner or for any cause or reason whatsoever out of an Environmental Claim made or asserted against such Creditor if such Environmental Claim would not have been, or been capable of being, made or asserted against such Creditor if it had not entered into any of the Security Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Security Documents.
11.4 Central Bank or European Central Bank reserve requirements indemnity
The Borrowers shall on demand promptly indemnify each Bank against any cost incurred or loss suffered by such Bank as a result of its complying with the minimum reserve requirements of the European Central Bank and/or with respect to maintaining required reserves with the relevant national Central Bank to the extent that such compliance relates to such Bank’s Commitment and/or Contribution or deposits obtained by it to fund the whole or part of its Contribution and to the extent such cost or loss is not recoverable by such Bank under clause 12.2.
11.5 Waiver
In no event shall any Creditor or any of their respective Related Companies or any of their respective officers or directors be liable on any theory or liability for any special, indirect, consequential or punitive damages and each of the Borrowers hereby waives, releases and agrees not to sue upon any such claim for any such damages whether or not accrued and whether or not known or suspected to exist in its favour.
12 Unlawfulness and increased costs
12.1 Unlawfulness
If it is or becomes contrary to any law or regulation for any Bank to contribute to an Advance or to maintain its Commitment or fund the Loan, such Bank shall promptly, through the Agent, give notice to the Borrowers whereupon (a) such Bank’s Commitment shall be reduced to zero and (b) the Borrowers shall be obliged to prepay such Bank’s Contribution either (i) forthwith or (ii) on a future specified date not being later than the earliest date permitted by the relevant law or regulation together with interest accrued to the date of prepayment and all other sums payable by the Borrowers under this Agreement.
12.2 Increased costs
If the result of any change in, or in the interpretation or application of, or the introduction of, any Capital Adequacy Law or of compliance by a Bank with any Capital Adequacy Law, is to:
12.2.1 subject any Bank to Taxes or change the basis of Taxation of any Bank with respect to any payment under any of the Security Documents (other than Taxes or Taxation on the overall net income, profits or gains of such Bank imposed in the jurisdiction in which its principal or lending office under this Agreement is located); and/or
12.2.2 increase the cost to, or impose an additional cost on, any Bank or its holding company in making or keeping such Bank’s Commitment available or maintaining or funding all or part of such Bank’s Contribution; and/or
12.2.3 reduce the amount payable or the effective return to any Bank under any of the Security Documents; and/or
12.2.4 reduce any Bank’s or its holding company’s rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to such Bank’s obligations under any of the Security Documents; and/or
12.2.5 require any Bank or its holding company to make a payment or forego a return on or calculated by reference to any amount received or receivable by such Bank under any of the Security Documents; and/or
12.2.6 require any Bank or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of its Commitment or the Loan from its capital for regulatory purposes,
then and in each such case (subject to clause 12.3):
(a) such Bank shall notify the Borrowers in writing of such event promptly upon its becoming aware of the same; and
(b) the Borrowers shall on demand made at any time whether or not such Bank’s Contribution has been repaid, pay to the Agent for the account of such Bank the amount which such Bank specifies (in a certificate setting forth the basis of the computation of such amount but not including any matters which such Bank or its holding company regards as confidential) is required to compensate such Bank and/or (as the case may be) its holding company for such liability to Taxes, cost, reduction, payment, foregone return or loss.
For the purposes of this clause 12.2 “holding company” means the company or entity (if any) within the consolidated supervision of which a Bank is included.
12.3 Exception
12.3.1 Nothing in clause 12.2 shall entitle any Bank to receive any amount in respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, foregone return or loss to the extent that the same is the subject of an additional payment under clause 6.6.
12.3.2 Nothing in clause 12.2 shall entitle any Bank to receive any amount in respect of compensation for a FATCA Deduction required to be made by a Party.
13 Security, set-off and pro-rata payments
13.1 Application of moneys
All moneys received by the Agent and/or the Security Agent under or pursuant to any of the Security Documents and expressed to be applicable in accordance with the provisions of this clause 13.1, shall be applied in the following manner:
13.1.1 first, in or towards payment of all unpaid costs and expenses which may be owing to the Agent and/or the Security Agent or either of them under any of the Security Documents;
13.1.2 secondly, in or towards payment of any unpaid fees and commitment commission payable to the Creditors or any of them;
13.1.3 thirdly, in or towards (i) payment of any arrears of interest owing in respect of the Loan or any part thereof and (ii) repayment of the Loan (whether the same is due and payable or not);
13.1.4 fourthly, in or towards payment to any Bank for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid;
13.1.5 fifthly, in or towards payment to any Creditor of any other sums owing to it under any of the Security Documents; and
13.1.6 sixthly, the surplus (if any) shall be paid to the Borrowers or to whomsoever else may be entitled to receive such surplus.
13.2 Set-off
13.2.1 The Borrowers authorise each Creditor (without prejudice to any of such Creditor’s rights at law, in equity or otherwise), at any time and without notice to the Borrowers, to apply any credit balance to which the Borrowers or any of them is then entitled standing upon any account of the Borrowers or any of them with any branch of such Creditor in or towards satisfaction of any sum due and payable from the Borrowers or any of them to such Creditor under any of the Security Documents. For this purpose, each Creditor is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application.
13.2.2 No Creditor shall be obliged to exercise any right given to it by this clause 13.2. Each Creditor shall notify the Borrowers through the Agent forthwith upon the exercise or purported exercise of any right of set-off giving full details in relation thereto and the Agent shall inform the other Creditors.
13.2.3 Nothing in this clause 13.2 shall be effective to create a charge or other security interest.
13.3 Pro rata payments
13.3.1 If at any time any Bank (the “Recovering Bank”) receives or recovers any amount owing to it by the Borrowers under this Agreement by direct payment, set-off or in any manner other than by payment through the Agent pursuant to clauses 6.1 or 6.9 (not being a payment received from a Transferee or a sub-participant in such Bank’s Contribution or any other payment of an amount due to the Recovering Bank for its sole account pursuant to clauses 3.6, 5, 6.6, 11.1, 11.2, 12.1, or 12.2), the Recovering Bank shall, within two (2) Banking Days of such receipt or recovery (a “Relevant Receipt”) notify the Agent of the amount of the Relevant Receipt. If the Relevant Receipt exceeds the amount which the Recovering Bank would have received if the Relevant Receipt had been received by the Agent and distributed pursuant to clause 6.1 or 6.9 (as the case may be) then:
(a) within two (2) Banking Days of demand by the Agent, the Recovering Bank shall pay to the Agent an amount equal (or equivalent) to the excess;
(b) the Agent shall treat the excess amount so paid by the Recovering Bank as if it were a payment made by the Borrowers and shall distribute the same to the Banks (other than the Recovering Bank) in accordance with clause 6.9; and
(c) as between the Borrowers and the Recovering Bank the excess amount so re-distributed shall be treated as not having been paid but the obligations of the Borrowers to the other Banks shall, to the extent of the amount so re-distributed to them, be treated as discharged.
13.3.2 If any part of the Relevant Receipt subsequently has to be wholly or partly refunded by the Recovering Bank (whether to a liquidator or otherwise) each Bank to which any part of such Relevant Receipt was so re-distributed shall on request from the Recovering Bank repay to the Recovering Bank such Bank’s pro-rata share of the amount which has to be refunded by the Recovering Bank.
13.3.3 Each Bank shall on request supply to the Agent such information as the Agent may from time to time request for the purposes of this clause 13.3.
13.3.4 Notwithstanding the foregoing provisions of this clause 13.3, no Recovering Bank shall be obliged to share any Relevant Receipt which it receives or recovers pursuant to legal proceedings taken by it to recover any sums owing to it under this Agreement with any other party which has a legal right to, but does not, either join in such proceedings or commence and diligently pursue separate proceedings to enforce its rights in the same or another court (unless the proceedings instituted by the Recovering Bank are instituted by it without prior notice having been given to such party through the Agent).
13.4 No release
For the avoidance of doubt it is hereby declared that failure by any Recovering Bank to comply with the provisions of clause 13.3 shall not release any other Recovering Bank from any of its obligations or liabilities under clause 13.3.
13.5 No charge
The provisions of this clause 13 shall not, and shall not be construed so as to, constitute a charge by a Bank over all or any part of a sum received or recovered by it in the circumstances mentioned in clause 13.3.
13.6 Further assurance
The Borrowers jointly and severally undertake with each Creditor that the Security Documents shall both at the date of execution and delivery thereof and so long as any moneys are owing under any of the Security Documents be valid and binding obligations of the respective parties thereto and rights of each Bank enforceable in accordance with their respective terms and that they will, at their expense, execute, sign, perfect and do, and will procure the execution, signing, perfecting and doing by each of the other Security Parties of, any and every such further assurance, document, act or thing as in the reasonable opinion of the Majority Banks may be necessary or desirable for perfecting the security contemplated or constituted by the Security Documents.
13.7 Conflicts
In the event of any conflict between this Agreement and any of the other Borrowers’ Security Documents, the provisions of this Agreement shall prevail.
14 Cash Collateral Account
14.1 Cash Collateral Account: withdrawals
The Borrowers will procure that the Corporate Guarantor shall not withdraw any moneys from the Cash Collateral Account at any time from the date of this Agreement and so long as any moneys are owing under the Security Documents except as provided in accordance with clause 5.4 of the Corporate Guarantee.
14.2 Application of Cash Collateral Account
At any time after the occurrence of an Event of Default, the Agent may (and on the instructions of the Majority Banks shall), without notice to the Borrowers and/or the Corporate Guarantor, instruct the Account Bank to apply all moneys then standing to the credit of the Cash Collateral Account (together with interest from time to time accruing or accrued thereon) in or towards satisfaction of any sums due to the Creditors or any of them under the Security Documents in the manner specified in clause 13.1.
14.3 Pledging of Cash Collateral Account
The Cash Collateral Account and all amounts from time to time standing to the credit thereof shall be subject to the security constituted and the rights conferred by the Cash Collateral Account Pledge.
15 Assignment, transfer and lending office
15.1 Benefit and burden
This Agreement shall be binding upon, and enure for the benefit of, the Creditors and the Borrowers and their respective successors in title.
15.2 No assignment by Borrowers
15.2.1 No Borrower may assign or transfer any of its rights or obligations under this Agreement.
15.2.2 If so directed by the Agent (acting on the instructions of all Banks), the Borrowers shall procure that any Security Party which is a FATCA FFI or a US Tax Obligor shall resign as a Security Party prior to the earliest FATCA Application Date relating to any payment by that Security Party (or any payment by the Agent which relates to a payment by that Security Party).
15.3 Transfers by Banks
Any Bank (the “Transferor”) may at any time cause all or any part of its rights, benefits and/or obligations under this Agreement and the Security Documents to be transferred to any other bank or financial institution, any Related Company of a Bank or another Bank or any other bank or financial institution or trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (including, without limitation, securitisation) or to any other person whatsoever (a “Transferee”) by delivering to the Agent a Transfer Certificate duly completed and duly executed by the Transferor and the Transferee. No such transfer is binding on, or effective in relation to, the Borrowers or the Agent unless (i) it is effected or evidenced by a Transfer Certificate which complies with the provisions of this clause 15.3 and is signed by or on behalf of the Transferor, the Transferee and the Agent (on behalf of itself, the Borrowers and the other Creditors) and (ii) such transfer of rights under the other Security Documents has been effected and registered. Upon signature of any such Transfer Certificate by the Agent, which signature shall be effected
as promptly as is practicable after such Transfer Certificate has been delivered to the Agent, and subject to the terms of such Transfer Certificate, such Transfer Certificate shall have effect as set out below.
The following further provisions shall have effect in relation to any Transfer Certificate:
15.3.1 a Transfer Certificate may be in respect of a Bank’s rights in respect of all, or part of, its Commitment and shall be in respect of the same proportion of its Contribution;
15.3.2 a Transfer Certificate shall only be in respect of rights and obligations of the Transferor in its capacity as a Bank and shall not transfer its rights and obligations as the Agent, or in any other capacity, as the case may be and such other rights and obligations may only be transferred in accordance with any applicable provisions of this Agreement;
15.3.3 a Transfer Certificate shall take effect in accordance with English law as follows:
(a) to the extent specified in the Transfer Certificate, the Transferor’s payment rights and all its other rights (other than those referred to in clause 15.3.2 above) under this Agreement are assigned to the Transferee absolutely, free of any defects in the Transferor’s title and of any rights or equities which the Borrowers or any of them had against the Transferor;
(b) the Transferor’s Commitment is discharged to the extent specified in the Transfer Certificate;
(c) the Transferee becomes a Bank with a Contribution and/or a Commitment of the amounts specified in the Transfer Certificate;
(d) the Transferee becomes bound by all the provisions of this Agreement and the Security Documents which are applicable to the Banks generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Arranger, the Agent and the Security Agent in accordance with clause 16 and to the extent that the Transferee becomes bound by those provisions, the Transferor ceases to be bound by them;
(e) an Advance or part of an Advance which the Transferee makes after the Transfer Certificate comes into effect ranks in point of priority and security in the same way as it would have ranked had it been made by the Transferor, assuming that any defects in the Transferor’s title and any rights or equities of any Security Party against the Transferor had not existed; and
(f) the Transferee becomes entitled to all the rights under this Agreement which are applicable to the Banks generally, including but not limited to those relating to the Majority Banks and those under clauses 3.6, 5 and 12 and to the extent that the Transferee becomes entitled to such rights, the Transferor ceases to be entitled to them;
15.3.4 the rights and equities of the Borrowers or of any other Security Party referred to above include, but are not limited to, any right of set-off and any other kind of cross-claim; and
15.3.5 the Borrowers, the Account Bank, the Security Agent, the Arranger and the Banks hereby irrevocably authorise and instruct the Agent to sign any such Transfer Certificate on their behalf and undertake not to withdraw, revoke or qualify such authority or instruction at any time. Promptly upon its signature of any Transfer Certificate, the Agent shall notify the Borrowers, the Transferor and the Transferee.
15.4 Reliance on Transfer Certificate
15.4.1 The Agent shall be entitled to rely on any Transfer Certificate believed by it to be genuine and correct and to have been presented or signed by the persons by whom it purports to have been presented or signed, and shall not be liable to any of the parties to this Agreement and the Security Documents for the consequences of such reliance.
15.4.2 The Agent shall at all times during the continuation of this Agreement maintain a register in which it shall record the name, Commitments, Contributions and administrative details (including the lending office) from time to time of the Banks holding a Transfer Certificate and the date at which the transfer referred to in such Transfer Certificate held by each Bank was transferred to such Bank, and the Agent shall make the said register available for inspection by any Bank, the Security Agent, the Account Bank or any Borrower during normal banking hours upon receipt by the Agent of reasonable prior notice requesting the Agent to do so.
15.4.3 The entries on the said register shall, in the absence of manifest error, be conclusive in determining the identities of the Commitments, the Contributions and the Transfer Certificates held by the Banks from time to time and the principal amounts of such Transfer Certificates and may be relied upon by the Agent, the other Creditors and the other Security Parties for all purposes in connection with this Agreement and the Security Documents.
15.5 Transfer fees and expenses
If any Bank causes the transfer of all or any part of its rights, benefits and/or obligations under the Security Documents, the Borrowers shall pay to the Agent on demand all costs, fees and expenses (including, but not limited to, legal fees and expenses), and all value added tax thereon, verified by the Agent as having been incurred by such Bank in connection with such transfer.
15.6 Documenting transfers
If any Bank assigns all or any part of its rights or transfers all or any part of its rights, benefits and/or obligations as provided in clause 15.3, the Borrowers jointly and severally undertake with each Creditor, immediately on being requested to do so by the Agent and at the cost of the Transferor, to enter into, and procure that the other Security Parties shall (at the cost of the Transferor) enter into, such documents as may be necessary or desirable to transfer to the Transferee all or the relevant part of such Bank’s interest in the Security Documents and all relevant references in this Agreement to such Bank shall thereafter be construed as a reference to the Transferor and/or its transferee (as the case may be) to the extent of their respective interests.
15.7 Sub-participation
A Bank may sub-participate all or any part of its rights and/or obligations under the Security Documents without the consent of, or notice to, the Borrowers.
15.8 Lending office
Each Bank shall lend through its office at the address specified in schedule 1 or, as the case may be, in any relevant Transfer Certificate or through any other office of such Bank selected from time to time by it through which such Bank wishes to lend for the purposes of this Agreement. If the office through which a Bank is lending is changed pursuant to this clause 15.8, such Bank shall notify the Agent promptly of such change and the Agent shall notify the Borrowers, the Security Agent, the Account Bank and the other Banks.
15.9 Disclosure of information
A Creditor may disclose to any of its Related Companies and to the following other persons:
15.9.1 any person to (or through) whom that Creditor assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement;
15.9.2 any person with (or through) whom that Creditor enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or the Security Parties;
15.9.3 any person to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation;
15.9.4 any other Creditor, or any employee, officer, director or representative of such entity which needs to know such information or receive such document in the course of such person’s employ or duties;
15.9.5 the Builder relating to the Sungdong Ships, the Seller, the Refund Guarantor or the Contract Guarantor, or any employee, officer, director or representative of such entity which needs to know such information or receive such document in the course of such person’s employ or duties;
15.9.6 auditors, insurance and reinsurance brokers, insurers and reinsurers or other professional advisers (including legal advisers);
15.9.7 any person who has entered into a confidentiality undertaking substantially in a recommended form of the Loan Market Association;
15.9.8 any other person who may propose entering or may enter into contractual relations with such Creditor,
any information about the Security Parties, this Agreement, the other Security Documents and the Ships as that Creditor shall reasonably consider appropriate in connection with the performance by the Security Parties of their obligations (including, without limitation, any insolvency events), and the enforcement by the Creditors of their rights (including, without limitation, the enforcement of any security), under this Agreement and the Security Documents or for the purposes of achieving a successful securitisation or other similar transaction or for any other reason whatsoever such Creditor decides to proceed with such disclosure.
16 Arranger, Agent and Security Agent
16.1 Appointment of the Agent
Each of the Banks irrevocably appoints the Agent as its agent for the purposes of this Agreement and such of the Security Documents to which it may be appropriate for the Agent to be party. By virtue of such appointment, each of the Banks hereby authorises the Agent:
16.1.1 to execute such documents as may be approved by the Majority Banks for execution by the Agent; and
16.1.2 (whether or not by or through employees or agents) to take such action on such Bank’s behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Agent by this Agreement and/or any other Security Document, together with such powers and discretions as are reasonably incidental thereto.
16.2 Agent’s actions
Any action taken by the Agent under or in relation to this Agreement or any of the other Security Documents whether with requisite authority or on the basis of appropriate instructions, received from the Banks (or as otherwise duly authorised) shall be binding on all the Banks and the other Creditors.
16.3 Agent’s duties
The Agent shall:
16.3.1 promptly notify each Bank of the contents of each notice, certificate or other document received by it from the Borrowers under or pursuant to clauses 8.1.1, 8.1.5 and 8.1.7; and
16.3.2 (subject to the other provisions of this clause 16) take (or instruct the Security Agent to take) such action or, as the case may be, refrain from taking (or authorise the Security Agent to refrain from taking) such action with respect to the exercise of any of its rights, remedies, powers and discretions as agent, as the Majority Banks may direct.
16.4 Agent’s rights
The Agent may:
16.4.1 in the exercise of any right, remedy, power or discretion in relation to any matter, or in any context, not expressly provided for by this Agreement or any of the other Security Documents, act or, as the case may be, refrain from acting (or authorise the Security Agent to act or refrain from acting) in accordance with the instructions of the Banks and shall be fully protected in so doing;
16.4.2 unless and until it shall have received directions from the Majority Banks, take such action or, as the case may be, refrain from taking such action (or authorise the Security Agent to take or refrain from taking such action) in respect of a Default of which the Agent has actual knowledge as it shall deem advisable in the best interests of the Banks (but shall not be obliged to do so);
16.4.3 refrain from acting (or authorise the Security Agent to refrain from acting) in accordance with any instructions of the Banks to institute any legal proceedings arising out of or in connection with this Agreement or any of the other Security Documents until it and/or the Security Agent has been indemnified and/or secured to its satisfaction against any and all costs, expenses or liabilities (including legal fees) which it would or might incur as a result;
16.4.4 deem and treat (i) each Bank as the person entitled to the benefit of the Contribution of such Bank for all purposes of this Agreement unless and until a notice shall have been filed with the Agent pursuant to clause 15.3 and shall have become effective, and (ii) the office set opposite the name of each of the Banks in schedule 1 to be such Bank’s lending office, unless and until a written notice of change of lending office shall have been received by the Agent and the Agent may act upon any such notice unless and until the same is superseded by a further such notice;
16.4.5 rely as to matters of fact which might reasonably be expected to be within the knowledge of any Security Party upon a certificate signed by any director or officer of the relevant Security Party on behalf of the relevant Security Party; and
16.4.6 do anything which is in its opinion necessary or desirable to comply with any law or regulation in any jurisdiction.
16.5 No liability of Arranger or Agent
Neither the Arranger nor the Agent nor any of their respective employees and agents shall:
16.5.1 be obliged to make any enquiry as to the use of any of the proceeds of any Advance unless (in the case of the Agent) so required in writing by a Bank, in which case the Agent shall promptly make the appropriate request to the Borrowers; or
16.5.2 be obliged to make any enquiry as to any breach or default by the Borrowers or any of them or any other Security Party in the performance or observance of any of the provisions of this Agreement or any of the other Security Documents or as to the existence of a Default unless (in the case of the Agent) the Agent has actual knowledge thereof or has been notified in writing thereof by a Bank, in which case the Agent shall promptly notify the Banks of the relevant event or circumstance; or
16.5.3 be obliged to enquire whether or not any representation or warranty made by the Borrowers or any of them or any other Security Party pursuant to this Agreement or any of the other Security Documents is true; or
16.5.4 be obliged to do anything (including, without limitation, disclosing any document or information) which would, or might in its opinion, be contrary to any law or regulation or be a breach of any duty of confidentiality or otherwise be actionable or render it liable to any person; or
16.5.5 be obliged to account to any Bank for any sum or the profit element of any sum received by it for its own account; or
16.5.6 be obliged to institute any legal proceedings arising out of or in connection with this Agreement or any of the other Security Documents other than on the instructions of the Majority Banks; or
16.5.7 be liable to any Bank for any action taken or omitted under or in connection with this Agreement or any of the other Security Documents unless caused by its gross negligence or wilful misconduct.
For the purposes of this clause 16, neither the Arranger nor the Agent shall be treated as having actual knowledge of any matter of which the corporate finance or any other division outside the agency or loan administration department of the Arranger or the person for the time being acting as the Agent may become aware in the context of corporate finance, advisory or lending activities from time to time undertaken by the Arranger or, as the case may be, the Agent for any Security Party or any other person which may be a trade competitor of any Security Party or may otherwise have commercial interests similar to those of any Security Party.
16.6 Non-reliance on Arranger or Agent
Each Bank acknowledges that it has not relied on any statement, opinion, forecast or other representation made by the Arranger or the Agent to induce it to enter into this Agreement or any of the other Security Documents and that it has made and will continue to make, without reliance on the Arranger or the Agent and based on such documents as it considers appropriate, its own appraisal of the creditworthiness of the Security Parties and its own independent investigation of the financial condition, prospects and affairs of the Security Parties in connection with the making and continuation of such Bank’s Commitment or Contribution under this Agreement. Neither the Arranger nor the Agent shall have any duty or responsibility, either initially or on a continuing basis, to provide any Bank with any credit or other information with respect to any Security Party whether coming into its possession before the making of the Loan or at any time or times thereafter other than as provided in clause 16.3.1.
16.7 No responsibility on Arranger or Agent for Borrowers’ performance
Neither the Arranger nor the Agent shall have any responsibility or liability to any Bank:
16.7.1 on account of the failure of any Security Party to perform its obligations under any of the Security Documents; or
16.7.2 for the financial condition of any Security Party; or
16.7.3 for the completeness or accuracy of any statements, representations or warranties in any of the Security Documents or any document delivered under any of the Security Documents; or
16.7.4 for the execution, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of any of the Security Documents or of any certificate, report or other document executed or delivered under any of the Security Documents; or
16.7.5 to investigate or make any enquiry into the title of any of the Borrowers or any other Security Party to the Ships or any other security or any part thereof; or
16.7.6 for the failure to register any of the Security Documents with any official or regulatory body or office or elsewhere; or
16.7.7 for taking or omitting to take any other action under or in relation to any of the Security Documents or any aspect of any of the Security Documents; or
16.7.8 on account of the failure of the Security Agent to perform or discharge any of its duties or obligations under the Security Documents; or
16.7.9 otherwise in connection with this Agreement or its negotiation or for acting (or, as the case may be, refraining from acting) in accordance with the instructions of the Banks.
16.8 Reliance on documents and professional advice
Each of the Arranger and the Agent shall be entitled to rely on any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person and shall be entitled to rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it (including those in the Arranger’s or, as the case may be, the Agent’s employment).
16.9 Other dealings
Each of the Arranger and the Agent may, without any liability to account to the Banks, accept deposits from, lend money to, and generally engage in any kind of banking or other business with, and provide advisory or other services to, any Security Party or any of its Related Companies or any of the Banks as if it were not the Arranger or, as the case may be, the Agent.
16.10 Rights of Agent as Bank; no partnership
With respect to its own Commitment and Contribution (if any) the Agent shall have the same rights and powers under the Security Documents as any other Bank and may exercise the same as though it were not performing the duties and functions delegated to it under this Agreement and the term “Banks” shall, unless the context clearly otherwise indicates, include the Agent in its individual capacity as a Bank. This Agreement shall not and shall not be construed so as to constitute a partnership between the parties or any of them.
16.11 Amendments and waivers
16.11.1 Subject to clauses 16.11.2 and 16.11.3 to 16.11.5 (inclusive), the Agent may, with the written consent of the Majority Banks (or if and to the extent expressly authorised by the other provisions of any of the Security Documents) and, if so instructed by the Majority Banks, shall:
(a) agree (or authorise the Security Agent to agree) amendments or modifications to any of the Security Documents with the Borrowers and/or any other Security Party; and/or
(b) vary or waive breaches of, or defaults under, or otherwise excuse performance of, any provision of any of the other Security Documents by the Borrowers and/or any other Security Party (or authorise the Security Agent to do so).
Any such action so authorised and effected by the Agent shall be documented in such manner as the Agent shall (with the approval of the Majority Banks) determine, shall be promptly notified to the Banks by the Agent and (without prejudice to the generality of clause 16.2) shall be binding on all the Creditors.
16.11.2 Except with the prior written consent of all Banks and subject always to clauses 16.11.3 to 16.11.5 (inclusive), the Agent shall have no authority on behalf of the Banks to agree (or authorise the Security Agent to agree) with the Borrowers and/or any other Security Party any amendment or modification to any of the Security Documents or to grant (or authorise the Security Agent to grant) waivers in respect of breaches or defaults or to vary or excuse (or authorise the Security Agent to vary or excuse) performance of or under any of the Security Documents by the Borrowers or any of them and/or any other Security Party, if the effect of such amendment, modification, waiver or excuse would be to:
(a) reduce the Margin;
(b) postpone the due date or reduce the amount of any payment of principal, interest or other amount payable by any Security Party under any of the Security Documents;
(c) change the currency in which any amount is payable by any Security Party under any of the Security Documents;
(d) increase any Bank’s Commitment;
(e) extend any Termination Date;
(f) change any provision of any of the Security Documents which expressly or implied requires the approval or consent of all the Banks such that the relevant approval or consent may be given otherwise than with the sanction of all the Banks;
(g) change the order of distribution under clauses 6.9 and 13.1;
(h) change this clause 16.11;
(i) change the definition of “Majority Banks” in clause 1.2; or
(j) release any Security Party from the security constituted by any Security Document (except as required by the terms thereof or by law) or change the terms and conditions upon which such security or guarantee may be, or is required to be, released.
16.11.3 No amendment or waiver may be made before the date falling ten (10) business days after the terms of that amendment or waiver have been notified by the Agent to the Banks, unless each
Bank is a FATCA Protected Bank. The Agent shall notify the Banks reasonably promptly of any amendments or waivers proposed by the Borrowers.
16.11.4 If the Agent or a Bank reasonably believes that an amendment or waiver may constitute a “material modification” for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA Deduction and the Agent or that Bank (as the case may be) notifies the Borrowers and the Agent accordingly, that amendment or waiver may, subject to clause 16.11.5, not be effected without the consent of the Agent or that Bank (as the case may be).
16.11.5 The consent of a Bank shall not be required pursuant to clause 16.11.4 if that Bank is a FATCA Protected Bank.
16.12 Reimbursement and indemnity by Banks
Each Bank shall reimburse the Agent (rateably in accordance with such Bank’s Commitment or, if after the first drawdown, Contribution), to the extent that the Agent is not reimbursed by the Borrowers, for the costs, charges and expenses incurred by the Agent which are expressed to be payable by the Borrowers under clause 5.2 including (in each case) the fees and expenses of legal or other professional advisers. Each Bank shall on demand indemnify the Agent (rateably in accordance with such Bank’s Commitment or, if after the first drawdown, Contribution) against all liabilities, damages, costs and claims whatsoever incurred by the Agent in connection with any of the Security Documents or the performance of its duties under any of the Security Documents or any action taken or omitted by the Agent under any of the Security Documents, unless such liabilities, damages, costs or claims arise from the Agent’s own gross negligence or wilful misconduct.
16.13 Retirement of Agent
16.13.1 The Agent may, having given to the Borrowers and each of the Banks not less than fifteen (15) days’ notice of its intention to do so, retire from its appointment as Agent under this Agreement, provided that no such retirement shall take effect unless there has been appointed by the Banks as a successor agent:
(a) a Related Company of the Agent nominated by the Agent which the Banks hereby irrevocably and unconditionally agree to appoint or, failing such nomination,
(b) a Bank nominated by the Majority Banks or, failing such nomination,
(c) any reputable and experienced bank or financial institution nominated by the retiring Agent.
Any corporation into which the retiring Agent may be merged or converted or any corporation with which the Agent may be consolidated or any corporation resulting from any merger, conversion, amalgamation, consolidation or other reorganisation to which the Agent shall be a party shall, to the extent permitted by applicable law, be the successor Agent under this Agreement and the other Security Documents without the execution or filing of any document or any further act on the part of any of the parties to this Agreement and the other Security Documents save that notice of any such merger, conversion, amalgamation, consolidation or other reorganisation shall forthwith be given to each Security Party and the Banks.
16.13.2 Upon any such successor as aforesaid being appointed, the retiring Agent shall be discharged from any further obligation under the Security Documents (but shall continue to have the benefit of this clause 16 in respect of any action it has taken or refrained from taking prior to such discharge) and its successor and each of the other parties to this Agreement shall have the same
rights and obligations among themselves as they would have had if such successor had been a party to this Agreement in place of the retiring Agent. The retiring Agent shall (at the expense of the Borrowers) provide its successor with copies of such of its records as its successor reasonably requires to carry out its functions under the Security Documents.
16.13.3 The Agent shall retire in accordance with clause 16.13.1 above if on or after the date which is three (3) months before the earliest FATCA Application Date relating to any payment to the Agent under the Security Documents, either:
(a) the Agent fails to respond to a request under clause 8.1.17 and a Bank reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
(b) the information supplied by the Agent pursuant to clause 8.1.17 indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
(c) the Agent notifies the Borrowers and the Banks that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,
and (in each case) a Bank believes that a Party may be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Bank, by notice to the Agent, requires it to resign.
16.14 Appointment and retirement of Security Agent
16.14.1 Appointment
Each of the Banks and the Agent irrevocably appoints the Security Agent as its security agent and trustee for the purposes of this Agreement and the Security Documents to which the Security Agent is or is to be a party, in each case on the terms set out in this Agreement. By virtue of such appointment, each of the Banks and the Agent hereby authorises the Security Agent (whether or not by or through employees or agents) to take such action on its behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Security Agent by this Agreement and/or the Security Documents to which the Security Agent is or is intended to be a party, together with such powers and discretions as are reasonably incidental thereto.
16.14.2 Retirement
(a) Without prejudice to clause 16.13, the Security Agent may, having given to the Borrowers, the Agent and each of the Banks not less than fifteen (15) days’ notice of its intention to do so, retire from its appointment as Security Agent under this Agreement and any Trust Deed, provided that no such retirement shall take effect unless there has been appointed by the Banks and the Agent as a successor security agent and trustee:
(i) a Related Company of the Security Agent nominated by the Security Agent which the Agent and the Banks hereby irrevocably and unconditionally agree to appoint or, failing such nomination,
(ii) a bank or trust corporation nominated by the Majority Banks or, failing such nomination,
(iii) any bank or trust corporation nominated by the retiring Security Agent,
and, in any case, such successor security agent and trustee shall have duly accepted such appointment by delivering to the Agent (i) written confirmation (in a form acceptable to the Agent) of such acceptance agreeing to be bound by this Agreement in the capacity of Security Agent as if it had been an original party to this Agreement and (ii) a duly executed Trust Deed.
Any corporation into which the retiring Security Agent may be merged or converted or any corporation with which the Security Agent may be consolidated or any corporation resulting from any merger, conversion, amalgamation, consolidation or other reorganisation to which the Security Agent shall be a party shall, to the extent permitted by applicable law, be the successor Security Agent under this Agreement, any Trust Deed and the other Security Documents referred to in clause 16.14.1 without the execution or filing of any document or any further act on the part of any of the parties to this Agreement, any Trust Deed and the other Security Documents save that notice of any such merger, conversion, amalgamation, consolidation or other reorganisation shall forthwith be given to each Security Party and the Banks.
(b) Upon any such successor as aforesaid being appointed, the retiring Security Agent shall be discharged from any further obligation under the Security Documents (but shall continue to have the benefit of this clause 16 in respect of any action it has taken or refrained from taking prior to such discharge) and its successor and each of the other parties to this Agreement shall have the same rights and obligations among themselves as they would have had if such successor had been a party to this Agreement in place of the retiring Security Agent. The retiring Security Agent shall (at the expense of the Borrowers) provide its successor with copies of such of its records as its successor reasonably requires to carry out its functions under the Security Documents.
(c) The Security Agent shall retire in accordance with clause 16.14.2(a) above if on or after the date which is three (3) months before the earliest FATCA Application Date relating to any payment to the Security Agent under the Security Documents, either:
(i) the Security Agent fails to respond to a request under clause 8.1.17 and a Bank reasonably believes that the Security Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
(ii) the information supplied by the Security Agent pursuant to clause 8.1.17 indicates that the Security Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
(iii) the Security Agent notifies the Borrowers and the Banks that the Security Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,
and (in each case) a Bank believes that a Party may be required to make a FATCA Deduction that would not be required if the Security Agent were a FATCA Exempt Party, and that Bank, by notice to the Security Agent, requires it to resign.
16.15 Powers and duties of the Security Agent
16.15.1 The Security Agent shall have no duties, obligations or liabilities to the Agent or any of the Banks and the Agent beyond those expressly stated in any of the Security Documents. Each of the Agent and the Banks hereby authorises the Security Agent to enter into and execute:
(a) each of the Security Documents to which the Security Agent is or is intended to be a party; and
(b) any and all such other Security Documents as may be approved by the Agent in writing (acting on the instructions of the Majority Banks) for entry into by the Security Agent,
and, in each and every case, to hold any and all security thereby created upon trust for the Banks and the Agent in the manner contemplated by this Agreement.
16.15.2 Subject to clause 16.15.3, the Security Agent may, with the prior consent of the Majority Banks communicated in writing by the Agent, concur with any of the Security Parties to:
(a) amend, modify or otherwise vary any provision of the Security Documents to which the Security Agent is or is intended to be a party; or
(b) waive breaches of, or defaults under, or otherwise excuse performance of, any provision of the Security Documents to which the Security Agent is or is intended to be a party.
Any such action so authorised and effected by the Security Agent shall be promptly notified to the Banks and the Agent by the Security Agent and shall be binding on the other Creditors.
16.15.3 The Security Agent shall not concur with any Security Party with respect to any of the matters described in clause 16.11.2 without the consent of the Banks communicated in writing by the Agent.
16.15.4 The Security Agent shall (subject to the other provisions of this clause 16) take such action or, as the case may be, refrain from taking such action, with respect to any of its rights, powers and discretions as security agent and trustee, as the Agent may direct. Subject as provided in the foregoing provisions of this clause, unless and until the Security Agent shall have received such instructions from the Agent, the Security Agent may, but shall not be obliged to, take (or refrain from taking) such action under or pursuant to the Security Documents referred to in clause 16.14.1 as the Security Agent shall deem advisable in the best interests of the Creditors provided that (for the avoidance of doubt), to the extent that this clause might otherwise be construed as authorising the Security Agent to take, or refrain from taking, any action of the nature referred to in clause 16.15.2 - and for which the prior consent of the Banks is expressly required under clause 16.15.3 - clauses 16.15.2 and 16.15.3 shall apply to the exclusion of this clause.
16.15.5 None of the Banks nor the Agent shall have any independent power to enforce any of the Security Documents referred to in clause 16.14,1 or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or any of them or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents or any of them except through the Security Agent.
16.15.6 For the purpose of this clause 16, the Security Agent may, rely and act in reliance upon any information from time to time furnished to the Security Agent by the Agent (whether pursuant to clause 16.15.7 or otherwise) unless and until the same is superseded by further such information, so that the Security Agent shall have no liability or responsibility to any party as a consequence of placing reliance on and acting in reliance upon any such information unless the Security Agent has actual knowledge that such information is inaccurate or incorrect.
16.15.7 Without prejudice to the foregoing each of the Agent and the Banks (whether directly or through the Agent) shall provide the Security Agent with such written information as it may reasonably require for the purpose of carrying out its duties and obligations under the Security Documents referred to in clause 16.14.1.
16.15.8 Each Bank shall reimburse the Security Agent (rateably in accordance with such Bank’s Commitment or, if after the first drawdown, Contribution), to the extent that the Security Agent is not reimbursed by the Borrowers, for the costs, charges and expenses incurred by the Agent
which are expressed to be payable by the Borrowers under clause 5.2 including (in each case) the fees and expenses of legal or other professional advisers. Each Bank shall on demand indemnify the Security Agent (rateably in accordance with such Bank’s Commitment or, if after the first drawdown, Contribution) against all liabilities, damages, costs and claims whatsoever incurred by the Security Agent in connection with any of the Security Documents or the performance of its duties under any of the Security Documents or any action taken or omitted by the Security Agent under any of the Security Documents, unless such liabilities, damages, costs or claims arise from the Security Agent’s own gross negligence or wilful misconduct.
16.16 Trust provisions
16.16.1 In its capacity as trustee in relation to the Security Documents specified in clause 16.14.1, the Security Agent shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of any of those Security Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Agent by any of those Security Documents.
16.16.2 It is expressly declared that, in its capacity as trustee in relation to the Security Documents specified in clause 16.14.1, the Security Agent shall be entitled to invest moneys forming part of the security and which, in the opinion of the Security Agent, may not be paid out promptly following receipt in the name or under the control of the Security Agent in any of the investments for the time being authorised by law for the investment by trustees of trust moneys or in any other property or investments whether similar to the aforesaid or not or by placing the same on deposit in the name or under the control of the Security Agent as the Security Agent may think fit without being under any duty to diversify its investments and the Security Agent may at any time vary or transpose any such property or investments for or into any others of a like nature and shall not be responsible for any loss due to depreciation in value or otherwise of such property or investments. Any investment of any part or all of the security may, at the discretion of the Security Agent, be made or retained in the names of nominees.
16.17 Independent action by Creditors
None of the Creditors shall enforce, exercise any rights, remedies or powers or grant any consents or releases under or pursuant to, or otherwise have a direct recourse to the security and/or guarantees constituted by any of the Security Documents without the prior written consent of the Majority Banks but, Provided such consent has been obtained, it shall not be necessary for any other Creditor to be joined as an additional party in any proceedings for this purpose.
16.18 Common Agent and Security Agent
The Agent and the Security Agent have entered into the Security Documents in their separate capacities (a) as agent for the Banks under and pursuant to this Agreement (in the case of the Agent) and (b) as security agent and trustee for the Banks and the Agent under and pursuant to this Agreement, to hold the guarantees and/or security created by the Security Documents specified in clause 16.14.1 on the terms set out in such Security Documents (in the case of the Security Agent). However, from time to time the Agent and the Security Agent may be the same entity. When the Agent and the Security Agent are the same entity and any Security Document provides for the Agent to communicate with or provide instructions to the Security Agent (and vice versa), it will not be necessary for there to be any such formal communications or instructions on those occasions.
16.19 Co-operation to achieve agreed priorities of application
The Banks and the Agent shall co-operate with each other and with the Security Agent and any receiver under the Security Documents in realising the property and assets subject to the Security Documents and in ensuring that the net proceeds realised under the Security Documents after deduction of the expenses of realisation are applied in accordance with clause 13.1 (unless otherwise expressly provided for in any such Security Document).
16.20 Prompt distribution of proceeds
Moneys received by any of the Creditors (whether from a receiver or otherwise) pursuant to the exercise of (or otherwise by virtue of the existence of) any rights and powers under or pursuant to any of the Security Documents shall (after providing for all costs, charges, expenses and liabilities and other payments ranking in priority) be paid to the Agent for distribution (in the case of moneys so received by any of the Creditors other than the Agent or the Security Agent) and shall be distributed by the Agent or, as the case may be, the Security Agent (in the case of moneys so received by the Agent or, as the case may be, the Security Agent) in each case in accordance with clause 13.1. The Agent or, as the case may be, the Security Agent shall make each such application and/or distribution as soon as is practicable after the relevant moneys are received by, or otherwise become available to, the Agent or, as the case may be, the Security Agent save that (without prejudice to any other provision contained in any of the Security Documents) the Agent or, as the case may be, the Security Agent (acting on the instructions of the Majority Banks) or any receiver may credit any moneys received by it to a suspense account for so long and in such manner as the Agent or such receiver may from time to time determine with a view to preserving the rights of the Agent and/or the Security Agent and/or the Account Bank and/or the Arranger and/or the Banks or any of them to provide for the whole of their respective claims against the Borrowers or any other person liable.
17 Notices and other matters
17.1 Notices
Every notice, request, demand or other communication under this Agreement or (unless otherwise provided therein) under any of the other Security Documents shall:
17.1.1 be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication in permanent written form;
17.1.2 be deemed to have been received, subject as otherwise provided in the relevant Security Document, in the case of a letter, when delivered personally or three (3) days after it has been put in the post and, in the case of a facsimile transmission or other means of telecommunication in permanent written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee or if the time of despatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day); and
17.1.3 be sent:
(a) if to the Borrowers or any of them at:
c/o Quintana Ship Management Ltd.
5 Xenias Street
145 62 Kifissia
Greece
Fax no: +30 210 62 34 493
Attn: Ms Viktoria Poziopoulou
(b) if to the Arranger and/or Agent and/or the Account Bank and/or the Security Agent at:
ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Netherlands
Fax No: +31 10 401 5323
Attn: Loans Administration
(c) if to a Bank, to its address or fax number specified in schedule 1 or in any relevant Transfer Certificate,
or to such other address and/or numbers as is notified by one party to the other parties under this Agreement.
17.2 Notices through the Agent
Every notice, request, demand or other communication under this Agreement or (unless otherwise provided therein) any other Security Document to be given by the Borrowers or any of them to any other party, shall be given to the Agent for onward transmission as appropriate and if it is to be given to the Borrowers it shall (except otherwise provided in the Security Documents) be given to the Agent.
17.3 No implied waivers, remedies cumulative
No failure or delay on the part of a Creditor to exercise any power, right or remedy under any of the Security Documents shall operate as a waiver thereof, nor shall any single or partial exercise by such Creditor of any power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy. The remedies provided in the Security Documents are cumulative and are not exclusive of any remedies provided by law.
17.4 English language
All certificates, instruments and other documents to be delivered under or supplied in connection with any of the Security Documents shall be in the English language or shall be accompanied by a certified English translation upon which the Creditors or any of them shall be entitled to rely.
17.5 Borrowers’ obligations
17.5.1 Joint and several
Notwithstanding anything to the contrary contained in any of the Security Documents, the agreements, obligations and liabilities of the Borrowers herein contained are joint and several and shall be construed accordingly. Each of the Borrowers agrees and consents to be bound by the Security Documents to which it is, or is to be, a party notwithstanding that the other Borrowers which are intended to sign or to be bound may not do so or be effectually bound and notwithstanding that any of the Security Documents may be invalid or unenforceable against the other Borrowers, whether or not the deficiency is known to any of the Creditors.
17.5.2 Borrowers as principal debtors
Each Borrower acknowledges and confirms that it is a principal and original debtor in respect of all amounts which may become payable by the Borrowers in accordance with the terms of this Agreement or any of the other Security Documents and agrees that the Creditors may also continue to treat it as such, whether or not any Creditor is or becomes aware that such Borrower is or has become a surety for the other Borrowers.
17.5.3 Indemnity
The Borrowers hereby agree jointly and severally to keep the Creditors fully indemnified on demand against all damages, losses, costs and expenses arising from any failure of any Borrower to perform or discharge any purported obligation or liability of the other Borrowers which would have been the subject of this Agreement or any other Security Document had it been valid and enforceable and which is not or ceases to be valid and enforceable against the other Borrowers on any ground whatsoever, whether or not known to a Creditor including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach of duty by, any person purporting to act on behalf of the other Borrowers (or any legal or other limitation, whether under the Limitation Acts or otherwise or any disability or death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding up, administration, receivership, amalgamation, reconstruction or any other incapacity of any person whatsoever (including, in the case of a partnership, a termination or change in the composition of the partnership) or any change of name or style or constitution of any Security Party).
17.5.4 Liability unconditional
None of the obligations or liabilities of the Borrowers under this Agreement or any other Security Document shall be discharged or reduced by reason of:
(a) the death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding up, administration, receivership, amalgamation, reconstruction or other incapacity of any person whatsoever (including, in the case of a partnership, a termination or change in the composition of the partnership) or any change of name or style or constitution of any Borrower or any other person liable;
(b) the Agent (acting on the instructions of the Majority Banks) granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, any Borrower or any other person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting, varying any compromise, arrangement or settlement or omitting to claim or enforce payment from any Borrower or any other person liable; or
(c) anything done or omitted which but for this provision might operate to exonerate the Borrowers or any of them.
17.5.5 Recourse to other security
The Creditors shall not be obliged to make any claim or demand or to resort to any Security Document or other means of payment now or hereafter held by or available to it for enforcing this Agreement or any of the Security Documents against any Borrower or any other person liable and no action taken or omitted by any Creditor in connection with any such Security Document or other means of payment will discharge, reduce, prejudice or affect the liability of the Borrowers under this Agreement and the Security Documents to which any of them is, or is to be, a party.
17.5.6 Waiver of Borrowers’ rights
Each Borrower agrees with each Creditor that, from the date of this Agreement and so long as any moneys are owing under any of the Security Documents and while all or any part of the Total Commitment remains outstanding, it will not, without the prior written consent of the Agent (acting on the instructions of the Majority Banks):
(a) exercise any right of subrogation, reimbursement and indemnity against the other Borrowers or any other person liable under the Security Documents;
(b) demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to such Borrower from the other Borrowers or from any other person liable or demand or accept any guarantee, indemnity or other assurance against financial loss or any document or instrument created or evidencing an Encumbrance in respect of the same or dispose of the same;
(c) take any steps to enforce any right against the other Borrowers or any other person liable in respect of any such moneys; or
(d) claim any set-off or counterclaim against the other Borrowers or any other person liable or claiming or proving in competition with any Creditor in the liquidation of the other Borrowers or any other person liable or have the benefit of, or share in, any payment from or composition with, the other Borrowers or any other person liable or any other Security Document now or hereafter held by any Creditor for any moneys owing under this Agreement or for the obligations or liabilities of any other person liable but so that, if so directed by the Agent, it will prove for the whole or any part of its claim in the liquidation of the other Borrowers or other person liable on terms that the benefit of such proof and all money received by it in respect thereof shall be held on trust for the Banks and applied in or towards discharge of any moneys owing under this Agreement in such manner as the Agent (acting on the instructions of the Majority Banks) shall deem appropriate.
18 Governing law and jurisdiction
18.1 Law
This Agreement and any non-contractual obligations in connection with this Agreement are governed by and shall be construed in accordance with English law.
18.2 Submission to jurisdiction
The Borrowers jointly and severally agree, for the benefit of each Creditor, that any legal action or proceedings arising out of or in connection with this Agreement and/or any non-contractual
obligations connected with this Agreement against the Borrowers or any of them or any of their respective assets may be brought in the English courts. Each of the Borrowers irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of a Creditor to take proceedings against the Borrowers or any of them in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Borrowers or any of them may have against any Creditor arising out of or in connection with this Agreement and/or any non-contractual obligations connected with this Agreement.
18.3 Contracts (Rights of Third Parties) Act 1999
No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1
The Banks and their Commitments
Name |
| Lending Office |
| Address for Notices |
| Commitment ($) |
ABN AMRO Bank N.V. |
| Coolsingel 93 |
| Coolsingel 93
Fax no.: +31 10 401 5323 |
| 31,040,000 |
TOTAL COMMITMENT |
| 31,040,000 | ||||
Schedule 2
Form of Drawdown Notice
(referred to in clause 2.4)
To: ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Netherlands
(as Agent)
[·] 20[·]
U.S.$31,040,000 Loan - Loan Agreement dated [·] 2013 (the “Loan Agreement”)
We refer to the Loan Agreement and hereby give you notice that we wish to draw down the [First] [Second] [Third] [Fourth] [Q Amreen] [Q Anastasia] [Q Kaki] [Q Houston] Advance[s] namely $[·] on [·] 20[·] and select [a first Interest Period in respect thereof of [·] months] [the first interest period in respect hereof to expire on [·] 20[·]]. The funds should be credited to [name and number of account] with [details of bank in New York City].
We confirm that:
(a) no event or circumstance has occurred and is continuing which constitutes a Default;
(b) the representations and warranties contained in (i) clauses 7.1, 7.2 and 7.3(b) of the Loan Agreement and (ii) clause 4 of each Transaction Guarantee, are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date;
(c) the borrowing to be effected by the drawdown of such Advance[s] will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute, regulation, agreement or otherwise) to be exceeded;
(d) there has been no material adverse change in our financial position or our business or in the financial position or the business of any other Security Party or any other member of the Group, from that described by us or by any other Security Party to the Creditors or any of them in the negotiation of the Loan Agreement; and
(e) we will use the proceeds of the Loan for our benefit and under our full responsibility and exclusively for the purpose specified in the Loan Agreement.
Words and expressions defined in the Loan Agreement shall have the same meanings where used herein.
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For and on behalf of |
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Q AMREEN SHIPPING LTD. |
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For and on behalf of |
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Q ANASTASIA SHIPPING LTD. |
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Schedule 3
Documents and evidence required as conditions precedent to the Loan being made
(referred to in clause 9.1)
Part 1
1 Constitutional documents
Copies, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of each Security Party as true, complete and up to date copies of all documents which contain or establish or relate to the constitution of that Security Party;
2 Corporate authorisations
copies of resolutions of the directors and stockholders of each Security Party approving such of the Underlying Documents and the Security Documents to which such Security Party is, or is to be, party and authorising the signature, delivery and performance of such Security Party’s obligations thereunder, certified (in a certificate dated no earlier than the date of this Agreement) by an officer of such Security Party as:
(a) being true and correct;
(b) being duly passed at meetings of the directors of such Security Party and of the stockholders of such Security Party duly convened and held;
(c) not having been amended, modified or revoked; and
(d) being in full force and effect,
together with originals or certified copies of any powers of attorney issued by any Security Party pursuant to such resolutions;
3 Specimen signatures
copies of the signatures of the persons who have been authorised on behalf of each Security Party to sign such of the Underlying Documents and the Security Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Security Documents, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of such Security Party as being the true signatures of such persons;
4 Certificate of incumbency
a list of directors and officers of each Security Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of such Security Party to be true, complete and up to date;
5 Borrower’s consents and approvals
a certificate (dated no earlier than five (5) Banking Days prior to the date of this Agreement) from an officer of each of the Borrowers that no consents, authorisations, licences or approvals are necessary for that Borrower to authorise or are required by that Borrower in connection with the
borrowing by that Borrower of the Loan pursuant to this Agreement or the execution, delivery and performance of that Borrowers Security Documents;
6 Other consents and approvals
a certificate (dated no earlier than five (5) Banking Days prior to the date of this Agreement) from an officer of each Security Party (other than the Borrowers) that no consents, authorisations, licences or approvals are necessary for such Security Party to guarantee and/or grant security for the borrowing by the Borrowers of the Total Commitment pursuant to this Agreement and execute, deliver and perform the Security Documents insofar as such Security Party is a party thereto;
7 Underlying Documents
(a) the original of each of the Contracts;
(b) copies (certified in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of the relevant Borrower as true, complete and up-to-date copies of each of the Q Kaki First Contract, the Q Houston First Contract, the Q Kaki Shipbuilding Contract and the Q Houston Shipbuilding Contract; and
(c) the original of each Contract Guarantee duly issued;
8 Security Documents
(a) the Corporate Guarantee, the Share Pledges, the Cash Collateral Account Pledge, the Pre-delivery Security Assignments, the Contract Assignment Consents and Acknowledgements and the Contract Guarantee Assignment Consents and Acknowledgements (each together with the other documents to be delivered to the Agent pursuant thereto), each duly completed and executed by the relevant Security Parties;
(b) (i) the notice of assignment in respect of the Refund Guarantee for each Contract relating to a Sungdong Ship, and the relevant Refund Guarantee Consent and Acknowledgement for such Refund Guarantee and (ii) the notices of assignment in respect of the first Refund Guarantee for each Imabari Ship;
9 Cash Collateral Account
evidence that the Cash Collateral Account has been opened and duly completed mandate forms in respect thereof have been delivered to the Agent;
10 Fees and commitment commission
evidence that any fees and commitment commission due by the Borrowers to any of the Creditors pursuant to the terms of clause 5.1 or any other provision of the Security Documents have been paid in full;
11 Shareholder’s Agreement
a copy certified (in a certificate dated not earlier than five (5) Banking Days prior to the date of this Agreement) as a true and complete copy by an officer of the Borrowers of the first amended and restated limited liability company agreement in respect of the Corporate Guarantor dated as of 4 March 2011 entered into between (inter alios) Quintana Shipping Investors LLC of the Republic of the Marshall Islands as sole shareholder of record of the Corporate Guarantor, duly
executed by the parties to it, in a form and substance acceptable to the Agent (on the instructions of the Majority Banks) in its sole discretion;
12 Registration forms
such statutory forms duly signed by the Borrowers and the other Security Parties as may be required by the Agent to perfect the security contemplated by the Security Documents to be executed under this Part 1;
13 Marshall Islands opinion
an opinion of Fulbright & Jaworski LLP, special legal advisers to the Agent on matters of Marshall Islands law;
14 Dutch opinion
an opinion of Norton Rose LLP, special legal advisers to the Agent on matters of Dutch law;
15 Japanese opinion
an opinion of Law Office of T. Mark Halpern, special legal advisers to the Agent on matters of Japanese law;
16 Korean opinion
an opinion of Kim & Chang, special legal advisers to the Agent on matters of Korean law;
17 Panamanian opinion
an opinion of Patton, Moreno & Asvat, special legal advisers to the Agent on matters of Panamanian law;
18 Borrowers’ process agent
a letter from each Borrower’s agent for receipt of service of proceedings referred to in clause 18.2 accepting its appointment under the said clause and under each of the other Security Documents referred to in this Part 1 and in which it is or is to be appointed as such Borrower’s agent;
19 Security Parties’ process agent
a letter from each other Security Party’s agent for receipt of service of proceedings referred to in each of the Security Documents referred to in this Part 1 and to which such Security Party is a party accepting its appointment under each such Security Document; and
20 “Know your customer”
such documentation and other evidence as is requested by the Agent in order for the Agent or any Bank or the Account Bank to carry out and be satisfied with the results of all necessary “know your client” or other checks which each such Bank or the Account Bank is required to carry out under any applicable law or legislation or by any regulatory or financial services authority (including in the European Union or the U.S.A.), in relation to the transactions contemplated by this Agreement and to the identity of any parties to this Agreement (other than the Creditors) and their members of the board of directors, officers, shareholders and ultimate beneficial owners.
Part 2
1 Drawdown notice
The Drawdown Notice in respect of the relevant First Advance duly executed;
2 Conditions precedent
evidence that the conditions precedent set out in Part 1 of schedule 3 remain fully satisfied;
3 Updated corporate authorisations/certificates of incumbency
a list of directors and officers of each Security Party specifying the names and positions of such persons and copies of the signatures of the persons who have been authorised on behalf of each such Security Party to sign such of the Security Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Security Documents, certified (in a certificate dated no earlier than five (5) Banking Days prior to the relevant Drawdown Date) by an officer of such Security Party to be, in the case of the list of directors and officers true, complete and up to date and, in the case of the specimen signatures, true signatures of such persons or a certificate by an officer of such Security Party that the list provided in respect of such Security Party pursuant to paragraph 4 of Part 1 of this schedule 3, and that the specimen signatures provided in respect of the Security Party pursuant to paragraph 3 of Part 1 of this schedule 3, remain true, complete and up to date;
4 No claim
if required by the Agent, evidence satisfactory to the Agent that the relevant Builder and (as the case may be) the Seller has no claims against the relevant Borrower and that there have been no breaches of the terms of the relevant Contract or any Refund Guarantee or (if applicable) the Contract Guarantee in respect of the Borrower’s Ship relevant to such First Advance or any default thereunder;
5 No variations to Contracts or Refund Guarantees
if required by the Agent, evidence that there have been no amendments or variations agreed to the relevant Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrower’s Ship relevant to such First Advance and that no action has been taken by the relevant Builder and (as the case may be) the Seller or the Refund Guarantor or (if applicable) the Contract Guarantor which might in any way render such Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrower’s Ship relevant to such First Advance inoperative or unenforceable, in whole or in part;
6 No Encumbrance
if required by the Agent, evidence that there is no Encumbrance of any kind created or permitted by any person on or relating to the relevant Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrower’s Ship relevant to such First Advance;
7 Invoice and receipt
an invoice from the relevant Builder and (as the case may be) the Seller demanding the payment of the first instalment of the Contract Price payable under the Contract of the Borrower’s Ship relevant to the First Advance to be drawn down (payable under Article X.2(a)(i) thereof in the case of a Sungdong Ship and under the relevant clause thereof in the case of an Imabari Ship)
and a receipt from the relevant Builder and (as the case may be) the Seller evidencing payment of such instalment in full;
8 Equity
evidence that the part of the first instalment of the Contract Price of the Borrower’s Ship relevant to such First Advance payable to the relevant Builder or (as the case may be) the Seller pursuant to the relevant Contract which is not being funded pursuant to this Agreement has been deposited (not later than three (3) Banking Days before the proposed Drawdown Date for such First Advance) with the Agent for further payment to the relevant Builder or (as the case may be) the Seller;
9 Refund Guarantees
in relation to the Imabari Ships, the original of the Refund Guarantee issued in connection with the first instalment of the Contract Price of the Borrower’s Ship to be financed by such First Advance and in relation to the Sungdong Ships, the original of the Refund Guarantee issued in connection with the instalments of the Contract Price of the relevant Borrower’s Ship;
10 Ship conditions
evidence that each of the Collateral Ships:
(i) Registration and Encumbrances
is registered in the name of the relevant Collateral Guarantor through the relevant Registry under the laws and flag of the relevant Flag State and that such Collateral Ship and its Earnings, Insurances and Requisition Compensation are free of Encumbrances; and
(ii) Classification
maintains the relevant Classification free of all requirements and overdue recommendations of the relevant Classification Society; and
(iii) Insurance
is insured in accordance with the provisions of the relevant Collateral Ship Security Documents and all requirements of the relevant Security Documents in respect of such insurance have been complied with (including without limitation, confirmation from the protection and indemnity association or other insurer with which such Collateral Ship is, or is to be, entered for insurance or insured against protection and indemnity risks (including oil pollution risks) that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and that any such exclusion does not apply to such Collateral Ship);
11 Fees and commissions
payment of any fees and commissions due by the Borrowers pursuant to clause 5.1 or any other provision of the Security Documents;
12 Security Documents
the Transaction Guarantees, the Mortgages, the General Assignments and the Manager’s Undertaking in respect of each of the Ships together with the other documents to be delivered to the Security Agent pursuant thereto, each duly executed and delivered;
13 Notices of assignment
duly executed notices of assignment in the forms prescribed by the Collateral Ship Security Documents;
14 Mortgage registration
evidence that the Mortgage in respect of each of the Collateral Ships has been registered against such Collateral Ship through the relevant Registry under the laws and flag of the relevant Flag State;
15 Collateral Guarantors’ process agent
a letter from the agent of each Collateral Guarantor, for receipt of service of proceedings referred to in each of the relevant Collateral Ship Security Documents in which it is or is to be appointed as such Collateral Guarantor’s agent, accepting its appointment thereunder;
16 Manager’s process agent
a letter from the Manager’s agent for receipt of service of proceedings referred to in the Manager’s Undertaking for each Ship, accepting its appointment thereunder;
17 Registration forms
such statutory forms duly signed by the Borrowers and the other Security Parties as may be required by the Agent to perfect the security contemplated by the Security Documents referred to in this Part 2;
18 Certified Management Agreement
a copy, certified (in a certificate dated no earlier than five (5) Banking Days prior to the Drawdown Date of the relevant First Advance) as a true and complete copy by an officer of the relevant Owner, of each Management Agreement;
19 Valuations
two valuations of the Borrower’s Ship relevant to such First Advance (dated not earlier than thirty (30) days prior to the Drawdown Date of such First Advance) each made (at the cost of the Borrowers) on the basis and in the manner specified in clause 8.2.1, the average of which valuations shall provide a market value of such Borrower’s Ship acceptable to the Agent in its sole discretion;
20 DOC and application for SMC
a certified copy of the DOC issued to the Operator of the Collateral Ships and a certified copy of the SMC for such Collateral Ship;
21 ISPS Code compliance
(a) evidence satisfactory to the Agent that each Collateral Ship is subject to a ship security plan which complies with the ISPS Code; and
(b) a copy, certified (in a certificate dated no earlier than five (5) Banking Days prior to the Drawdown Date of the relevant First Advance) as a true and complete copy by an officer of the relevant Collateral Guarantor of the ISSC for each Collateral Ship;
22 Marshall Islands opinion
an opinion of Fulbright & Jarowski LLP, special legal advisers to the Agent on matters of Marshall Islands law;
23 Survey report
if required by the Agent, a survey report from surveyors appointed by the Agent (acting on the instructions of the Majority Banks), prepared following a physical inspection made by them of the Borrower’s Ship relevant to such First Advance evidencing that such Borrower’s Ship is in a condition satisfactory to the Agent and maintains specifications in all respects acceptable to the Agent;
24 Further opinions
such further opinions as the Agent may require; and
25 Further conditions precedent
such further conditions precedent as the Agent may require.
Part 3
1 Drawdown notice
The Drawdown Notice in respect of the relevant Second Advance, Third Advance and Fourth Advance (as the case may be) duly executed;
2 Conditions precedent
evidence that the conditions precedent set out in Part 1 of schedule 3 remain fully satisfied;
3 Updated corporate authorisations/certificates of incumbency
a list of directors and officers of each Security Party specifying the names and positions of such persons and copies of the signatures of the persons who have been authorised on behalf of each such Security Party to sign such of the Security Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Security Documents, certified (in a certificate dated no earlier than five (5) Banking Days prior to the relevant Drawdown Date) by an officer of such Security Party to be, in the case of the list of directors and officers true, complete and up to date and, in the case of the specimen signatures, true signatures of such persons or a certificate by an officer of such Security Party that the list provided in respect of such Security Party pursuant to paragraph 4 of Part 1 of this schedule 3, and that the specimen signatures provided in respect of the Security Party pursuant to paragraph 3 of Part 1 of this schedule 3, remain true, complete and up to date;
4 No claim
if required by the Agent, evidence satisfactory to the Agent that the relevant Builder or (as the case may be) the Seller has no claims against the relevant Borrower and that there have been no breaches of the terms of the relevant Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrower’s Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance or any default thereunder;
5 No variations to Contracts or Refund Guarantees
if required by the Agent, evidence that there have been no amendments or variations agreed to the relevant Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrower’s Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance and that no action has been taken by the relevant Builder or (as the case may be) the Seller or the Refund Guarantor or (if applicable) the Contract Guarantor which might in any way render such Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrowers Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance inoperative or unenforceable, in whole or in part;
6 No Encumbrance
if required by the Agent, evidence that there is no Encumbrance of any kind created or permitted by any person on or relating to the relevant Contract or any Refund Guarantee or the Contract Guarantee in respect of the Borrower’s Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance;
7 Invoice and receipt
an invoice from the relevant Builder or (as the case may be) the Seller demanding the payment of the second or (as the case may be) third instalment or (as the case may be) fourth instalment of the Contract Price payable under the Contract of the Borrower’s Ship relevant to the Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance to be drawn down (payable under Article X.2(a)(ii), Article X.2(a)(iii) and Article X.2(a)(iv) thereof respectively in the case of a Sungdong Ship and the relevant clause in the case of an Imabari Ship) and a receipt from the Builder or (as the case may be) the Seller of the relevant Contract evidencing payment of such instalment in full;
8 Equity
evidence that the part of the second or (as the case may be) third instalment or (as the case may be) fourth instalment of the Contract Price of the Borrower’s Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) the Fourth Advance payable to the relevant Builder or (as the case may be) the Seller pursuant to the Contract which is not being funded pursuant to this Agreement has been deposited (not later than three (3) Banking Days before the proposed Drawdown Date for the relevant Second Advance or (as the case may be) Third Advance) or (as the case may be) Fourth Advance with the Agent for further payment to the relevant Builder or (as the case may be) the Seller;
9 Refund Guarantees
9.1 in the case of the Imabari Ships, the original of the Refund Guarantee issued in connection with the second or (as the case may be) third instalment or (as the case may be) fourth instalment of the Contract Price of the Borrower’s Ship to be financed by such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance; and
9.2 the notices of assignment in respect of each such Refund Guarantee duly executed by the relevant Borrower in the form prescribed in the relevant Pre-delivery Security Assignment;
10 Fees and commissions
payment of any fees and commissions due by the Borrowers pursuant to clause 5.1 or any other provision of the Security Documents;
11 Valuations
two valuations of the Borrower’s Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance (dated not earlier than thirty (30) days prior to the Drawdown Date of such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance, each made (at the cost of the Borrowers) on the basis and in the manner specified in clause 8.2.1, the average of which valuations shall provide a market value of such Borrower’s Ship acceptable to the Agent in its sole discretion;
12 Survey report
if required by the Agent, a survey report from surveyors appointed by the Agent (acting on the instructions of the Majority Banks), prepared following a physical inspection made by them of the Borrower’s Ship relevant to such Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance evidencing that such Borrower’s Ship is in a condition satisfactory to the Agent and maintains specifications in all respects acceptable to the Agent;
13 Builder/Seller’s confirmation
evidence from the relevant Builder or (as the case may be) the Seller that (in the case of each Second Advance) the steel cutting of the Borrower’s Ship relevant to such Second Advance to be drawn down has been completed or (in the case of each Third Advance for each Sungdong Ship) that the keel laying of the Borrower’s Ship relevant to such Third Advance to be drawn down has been completed or (in the case of each Third Advance for each Imabari Ship and each Fourth Advance for each Sungdong Ship) that the Borrower’s Ship relevant to such Third Advance or Fourth Advance to be drawn down has been launched;
14 Further opinions
such further opinions as the Agent may require;
15 Payment of previous instalments
a receipt from the Builder or (as the case may be) the Seller evidencing payments of the first instalment (in the case of each Second Advance) or the second instalment (in the case of each Third Advance) or the third instalment (in the case of each Fourth Advance) of the Contract Price of the Borrower’s Ship relevant to the Second Advance or (as the case may be) Third Advance or (as the case may be) Fourth Advance to be drawn down in full;
16 Post delivery
in relation only to the drawdown of the last Advance for each Ship, (i) evidence acceptable to the Agent in its absolute discretion that the relevant Borrower has secured long term financing for such Ship which will be sufficient to refinance in full all Advances for such Ship and (ii) evidence acceptable to the Agent in its absolute discretion that the relevant Borrower is in a position to take delivery of its Ship; and
17 Further conditions precedent
such further conditions precedent as the Agent may require.
Schedule 4
Form of Transfer Certificate
(refer to in clause 15.3)
TRANSFER CERTIFICATE
Banks are advised not to employ Transfer Certificates or otherwise to assign or transfer interests in the Loan Agreement without further ensuring that the transaction complies with all applicable laws and regulations, including the Financial Services and Markets Act 2000 and regulations made thereunder and similar statutes which may be in force in other jurisdictions
To: ABN AMRO BANK N.V. as agent on its own behalf and on behalf of the Borrowers, the Banks, the Account Bank, the Security Agent and the Arranger defined in the Loan Agreement referred to below.
[Date]
Attention: [·]
This certificate (“Transfer Certificate”) relates to a loan agreement dated [·] 2013 (the “Loan Agreement”) and made between Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Kaki Shipping Ltd. and Q Houston Shipping Ltd. (the “Borrowers”), (2) the banks and financial institutions defined therein as banks (the “Banks”), (3) ABN AMRO Bank N.V. as Arranger, Agent, Security Agent and Account Bank in relation to a loan of up to Thirty eight million eight hundred thousand Dollars ($31,040,000). Terms defined in the Loan Agreement shall, unless otherwise defined herein, have the same meanings when used herein.
In this Certificate:
the “Transferor” means [full name] of [lending office];
and the “Transferee” means [full name] of [lending office].
1 The Transferor with full title guarantee assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as a Bank under or by virtue of the Loan Agreement and all the Security Documents in relation to [ ] per centum ([ ]%) of the [Contribution] [Commitment] of the Transferor (or its predecessors in title), details of which are set out below:
Date of Advance[s] |
| Amount of |
| Transferor’s |
| Maturity Date |
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2 By virtue of this Transfer Certificate and clause 15 of the Loan Agreement, the Transferor is discharged [entirely from its [Contribution] [Commitment], which amounts to $[ ]].
3 The Transferee hereby requests the Agent (on behalf of itself, the Borrowers, the Account Bank, the Security Agent, the Arranger and the Banks) to accept the executed copies of this Transfer Certificate as being delivered pursuant to and for the purposes of clause 15.3 of the Loan Agreement so as to take effect in accordance with the terms thereof on [date of transfer].
4 The Transferee:
4.1 confirms that it has received a copy of the Loan Agreement and the other Security Documents together with such other documents and information as it has required in connection with the transaction contemplated thereby;
4.2 confirms that it has not relied and will not hereafter rely on the Transferor, the Agent, the Account Bank, the Arranger, the Banks or the Security Agent to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of the Loan Agreement, any of the Security Documents or any such documents or information;
4.3 agrees that it has not relied and will not rely on the Transferor, the Agent, the Account Bank, the Arranger, the Banks or the Security Agent to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of the Borrowers, or any other Security Party (save as otherwise expressly provided therein);
4.4 warrants that it has power and authority to become a party to the Loan Agreement and has taken all necessary action to authorise execution of this Transfer Certificate and to obtain all necessary approvals and consents to the assumption of its obligations under the Loan Agreement and the Security Documents; and
4.5 if not already a Bank, appoints (i) the Agent to act as its agent and (ii) the Security Agent to act as its security agent and trustee, as provided in the Loan Agreement and the Security Documents and agrees to be bound by the terms of the Loan Agreement and the Security Documents.
5 The Transferor:
5.1 warrants to the Transferee that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to authorise it to do so;
5.2 warrants to the Transferee that this Transfer Certificate is binding on the Transferor under the laws of England, the country in which the Transferor is incorporated and the country in which its lending office is located; and
5.3 agrees that it will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under this Transfer Certificate or for a similar purpose.
6 The Transferee hereby undertakes with the Transferor and each of the other parties to the Loan Agreement and the other Security Documents that it will perform in accordance with its terms all those obligations which by the terms of the Loan Agreement and the other Security Documents will be assumed by it after delivery of the executed copies of this Transfer Certificate to the Agent and satisfaction of the conditions (if any) subject to which this Transfer Certificate is expressed to take effect.
7 By execution of this Transfer Certificate on their behalf by the Agent and in reliance upon the representations and warranties of the Transferee, the Borrowers, the Agent, the Security Agent, the Arranger, the Account Bank and the Banks accept the Transferee as a party to the Loan Agreement and the Security Documents with respect to all those rights and/or obligations which by the terms of the Loan Agreement and the Security Documents will be assumed by the
Transferee (including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent, the Account Bank, the Arranger and the Security Agent as provided by the Loan Agreement) after delivery of the executed copies of this Transfer Certificate to the Agent and satisfaction of the conditions (if any) subject to which this Transfer Certificate is expressed to take effect.
8 None of the Transferor, the Agent, the Security Agent, the Account Bank, the Arranger or the Banks:
8.1 makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Loan Agreement or any of the Security Documents or any document relating thereto; or
8.2 assumes any responsibility for the financial condition of the Borrowers or any of them or any other Security Party or any party to any such other document or for the performance and observance by the Borrowers or any of them or any other Security Party or any party to any such other document (save as otherwise expressly provided therein) and any and all such conditions and warranties, whether express or implied by law or otherwise, are hereby excluded (except as aforesaid).
9 The Transferor and the Transferee each undertake that they will on demand fully indemnify the Agent in respect of any claim, proceeding, liability or expense which relates to or results from this Transfer Certificate or any matter concerned with or arising out of it unless caused by the Agent’s gross negligence or wilful misconduct, as the case may be.
10 The agreements and undertakings of the Transferee in this Transfer Certificate are given to and for the benefit of and made with each of the other parties to the Loan Agreement and the Security Documents.
11 This Transfer Certificate and any non-contractual obligations in connection with this Transfer Certificate are governed by, and shall be construed in accordance with, English law.
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Agent
Agreed for and on behalf of itself as Agent, the Borrowers, the Security Agent, the Account Bank, the Arranger and the Banks.
ABN AMRO BANK N.V. |
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Note: The execution of this Transfer Certificate alone may not transfer a proportionate share of the Transferor’s interest in the security constituted by the Security Documents in the Transferor’s or Transferee’s jurisdiction. It is the responsibility of the Transferee to ascertain whether any other documents are required to perfect a transfer of such a share in the Transferor’s interest in such security in any such jurisdiction and, if so, to seek appropriate advice and arrange for execution of the same.
The Schedule
Outstanding Contribution: $·
Commitment $·
Portion Transferred: ·%
Administrative Details of Transferee
Name of Transferee:
Lending Office:
Contact Person:
(Loan Administration Department)
Telephone:
Telefax No:
Contact Person:
(Credit Administration Department)
Telephone:
Telefax No:
[Account for payments:]
Schedule 5
Form of Trust Deed
THIS DECLARATION OF TRUST made by ABN AMRO BANK N.V. (the “Security Agent”) is made on [·] 2013 and is supplemental to (and made pursuant to the terms of) a loan agreement dated [·] 2013 (the “Agreement”) and made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Kaki Shipping Ltd. and Q Houston Shipping Ltd. as joint and several Borrowers, (2) ABN AMRO Bank N.V. as Arranger, Agent and Account Bank, (3) the Security Agent and (4) the banks and financial institutions mentioned in schedule 1 to the Agreement as the Banks. Words and expressions defined in the Agreement shall have the same meaning when used in this Deed.
NOW THIS DEED WITNESSETH as follows:
1 The Security Agent hereby acknowledges and declares that, from the date of this Deed, it holds and shall hold the Trust Property on trust for certain of the other Creditors on the terms and basis set out in the Agreement.
2 The declaration and acknowledgement contained in paragraph 1 above shall be irrevocable.
IN WITNESS whereof the Security Agent has executed this Deed the day and year first above written.
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Private & Confidential
Dated August 2013
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CORPORATE GUARANTEE
Contents
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1 | Interpretation | 1 |
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2 | Guarantee | 3 |
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3 | Payments and Taxes | 6 |
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4 | Representations and warranties | 7 |
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5 | Undertakings | 10 |
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6 | Set-off | 16 |
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7 | Benefit of this Guarantee | 17 |
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8 | Notices and other matters | 17 |
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9 | Law and jurisdiction | 18 |
THIS GUARANTEE is dated August 2013 and made BETWEEN:
(1) QUINTANA SHIPPING LTD., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the “Guarantor”);
(2) ABN AMRO BANK N.V., a company incorporated in The Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, (the “Security Agent”) for the benefit of itself and as security agent and trustee for the Secured Creditors (as defined below); and
(3) ABN AMRO BANK N.V., a company incorporated in The Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, as account bank (the “Account Bank”).
WHEREAS:
(A) by a loan agreement dated August 2013 (the “Agreement”) made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd., as joint and several borrowers (herein and therein, together the “Borrowers”), (2) ABN AMRO Bank N.V. as agent (in such capacity the “Agent”), as security agent (in such capacity the “Security Agent”) and account bank and (3) the banks and financial institutions referred to in schedule 1 to the Agreement as lenders (the “Banks”; and, together with the Agent the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, upon the terms and conditions therein contained, the principal sum of up to Thirty one million forty thousand Dollars ($31,040,000);
(B) pursuant to clause 16.14 of the Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a deed of trust dated August 2013 and executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Guarantee for and on behalf of itself and the Secured Creditors; and
(C) the execution and delivery of this Guarantee is one of the conditions precedent to each Bank making its Commitment available under the Agreement and this Guarantee is the Corporate Guarantee referred to in the Agreement.
IT IS AGREED as follows:
1 Interpretation
1.1 Defined expressions
In this Guarantee, unless the context otherwise requires or unless otherwise defined in this Guarantee, words and expressions defined in the Agreement and used in this Guarantee shall have the same meaning where used in this Guarantee.
1.2 Definitions
In this Guarantee, unless the context otherwise requires:
“Account Bank” includes its successors in title, assignees and/or transferees;
“Agent” includes its successors in title, assignees and/or its replacements;
“Applicable Accounting Principles” means the latest and most up-to-date general accounting principles and standards applicable in the United States of America at any relevant time;
“Banks” includes their respective successors in title and/or Transferees;
“Cash Collateral Account” means a Dollar account of the Guarantor opened or (as the context may require) to be opened with the Account Bank and includes any sub-accounts thereof and any other account designated in writing by the Agent to be a Cash Collateral Account for the purposes of this Guarantee and the other Security Documents and is the “Cash Collateral Account” referred to in the Agreement;
“Cash Collateral Account Pledge” means the pledge executed or (as the context may require) to be executed by the Guarantor in favour of the Security Agent in respect of the Cash Collateral Account in such form as required by the Agent in its sole discretion;
“Collateral Instruments” means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or any of them or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind;
“Group” means the Guarantor and its Subsidiaries from time to time and “member of the Group” shall be construed accordingly;
“Guarantee” includes each separate or independent stipulation or agreement by the Guarantor contained in this Guarantee;
“Guaranteed Liabilities” means all moneys, obligations and liabilities expressed to be guaranteed by the Guarantor in clause 2.1;
“Guarantor” includes the successors in title of the Guarantor;
“Incapacity” means, in relation to a person, the death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding up, administration, receivership, amalgamation, reconstruction or other incapacity whatsoever of that person (and, in the case of a partnership, includes the termination or change in the composition of the partnership);
“Relevant Jurisdiction” means any jurisdiction in which or where the Guarantor is incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected;
“Secured Creditors” means, together, the Agent and the Banks and “Secured Creditor” means each one of them;
“Security Agent” includes its successors in title, assignees and/or its replacements; and
“Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Guarantee.
1.4 Construction of certain terms
In this Guarantee, unless the context otherwise requires:
1.4.1 references to clauses are to be construed as references to the clauses of this Guarantee;
1.4.2 references to (or to any specified provision of) this Guarantee or any other document shall be construed as references to this Guarantee, that provision or that document as in force for the time being and as amended from time to time in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;
1.4.3 words importing the plural shall include the singular and vice versa;
1.4.4 references to a time of day are to London time;
1.4.5 references to a person shall be construed as including references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
1.4.6 references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, any obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and
1.4.7 references to any enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.
2 Guarantee
2.1 Covenant to pay
In consideration of the Banks making or continuing loans or advances to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Borrowers or any of them pursuant to the Agreement, the Guarantor hereby irrevocably guarantees to pay to the Security Agent for the account of the Secured Creditors, on demand by the Security Agent, all moneys and discharge all obligations and liabilities now or hereafter due, owing or incurred by the Borrowers or any of them to the Secured Creditors or any of them under or pursuant to the Agreement and/or the other Security Documents or any of them when the same become due for payment or discharge whether by acceleration or otherwise, and whether such moneys, obligations or liabilities are express or implied, present, future or contingent, joint or several, incurred as principal or surety, originally owing to the Secured Creditors or any of them or purchased or otherwise acquired by any of them, denominated in Dollars or in any other currency, or incurred on any banking account or in any other manner whatsoever.
Such liabilities shall, without limitation, include interest (as well after as before judgment) to date of payment at such rates and upon such terms as may from time to time be agreed, commission, fees and other charges and all legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Secured Creditors or any of them in relation to any such moneys, obligations or liabilities or generally in respect of the Borrowers or any of them, the Guarantor or any Collateral Instrument.
2.2 Guarantor as principal debtor; indemnity
As a separate and independent stipulation, the Guarantor agrees that if any purported obligation or liability of the Borrowers or any of them which would have been the subject of this Guarantee had it been valid and enforceable is not or ceases to be valid or enforceable against the Borrowers or any of them on any ground whatsoever whether or not known to the Security Agent or the Secured Creditors or any of them (including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach of duty by, any person purporting to act on behalf of the Borrowers or any of them or any legal or other limitation, whether under the Limitation Acts or otherwise or any disability or Incapacity or any change in the constitution of the Borrowers or any of them) the Guarantor shall nevertheless be liable to the Security Agent in respect of that purported obligation or liability as if the same were fully valid and enforceable and the Guarantor were the principal debtor in respect thereof. The Guarantor hereby agrees to keep the Security Agent fully indemnified on demand against all damages, losses, costs and expenses arising from any failure of the Borrowers or any of them to perform or discharge any such purported obligation or liability.
2.3 Statements of account conclusive
Any statement of account, signed as correct by an officer of the Security Agent, showing the amount of the Guaranteed Liabilities shall, in the absence of material error, be binding and conclusive on and against the Guarantor.
2.4 No security taken by Guarantor
The Guarantor warrants that it has not taken or received, and undertakes that until all the Guaranteed Liabilities have been paid or discharged in full, it will not take or receive, the benefit of any security from the Borrowers or any of them or any other person in respect of its obligations under this Guarantee.
2.5 Interest
The Guarantor agrees to pay interest on each amount demanded of it under this Guarantee from the date of such demand until payment (as well after as before judgment) at the rate specified in clause 3.4 of the Agreement which shall apply to this Guarantee mutatis mutandis. Such interest shall be compounded at the end of each period determined for this purpose by the Security Agent in the event of it not being paid when demanded but without prejudice to the Secured Agent’s right to require payment of such interest.
2.6 Continuing security and other matters
This Guarantee shall:
2.6.1 secure the ultimate balance from time to time owing to the Security Agent and/or any of the Secured Creditors by the Borrowers or any of them and shall be a continuing security, notwithstanding any settlement of account or other matter whatsoever;
2.6.2 be in addition to any present or future Collateral Instrument, right or remedy held by or available to the Security Agent and/or the Secured Creditors or any of them; and
2.6.3 not be in any way prejudiced or affected by the existence of any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Security Agent or the Secured Creditors dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or indulgence or compounding with any other person liable.
2.7 Liability unconditional
The liability of the Guarantor shall not be affected nor shall this Guarantee be discharged or reduced by reason of:
2.7.1 the Incapacity or any change in the name, style or constitution of the Borrowers or any of them or any other person liable;
2.7.2 the Security Agent or any of the Secured Creditors granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, the Borrowers or any of them or any other person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting or varying any compromise, arrangement or settlement or omitting to claim or enforce payment from the Borrowers or any of them or any other person liable; or
2.7.3 any act or omission which would not have discharged or affected the liability of the Guarantor had it been a principal debtor instead of a guarantor or by anything done or omitted which but for this provision might operate to exonerate the Guarantor.
2.8 Collateral Instruments
Neither the Security Agent nor the Secured Creditors shall be obliged to make any claim or demand on the Borrowers or any of them or to resort to any Collateral Instrument or other means of payment now or hereafter held by or available to it before the Security Agent enforcing this Guarantee and no action taken or omitted by the Security Agent or any of the Secured Creditors in connection with any such Collateral Instrument or other means of payment shall discharge, reduce, prejudice or affect the liability of the Guarantor under this Guarantee nor shall the Security Agent or any of the Secured Creditors be obliged to apply any money or other property received or recovered in consequence of any enforcement or realisation of any such Collateral Instrument or other means of payment in reduction of the Guaranteed Liabilities.
2.9 Waiver of Guarantor’s rights
Until all the Guaranteed Liabilities have been paid, discharged or satisfied in full (and notwithstanding payment of a dividend in any liquidation or under any compromise or arrangement) the Guarantor agrees that, without the prior written consent of the Security Agent, it will not:
2.9.1 exercise its rights of subrogation, reimbursement and indemnity against the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities;
2.9.2 demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to the Guarantor from the Borrowers or any of them or from any other person liable in respect of any Guaranteed Liabilities or demand or accept any Collateral Instrument in respect of the same or dispose of the same;
2.9.3 take any step to enforce any right against the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities; and
2.9.4 claim any set-off or counterclaim against the Borrowers or any of them or any other person liable or claim or prove in competition with the Security Agent or any of the Secured Creditors in the liquidation of the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities or have the benefit of, or share in, any payment from or composition with, the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities or
any other Collateral Instrument now or hereafter held by the Security Agent or any of the Secured Creditors for any Guaranteed Liabilities or for the obligations or liabilities of any other person liable but so that, if so directed by the Security Agent, it will prove for the whole or any part of its claim in the liquidation of the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities on terms that the benefit of such proof and of all moneys received by it in respect thereof shall be held on trust for the Security Agent and applied in or towards discharge of the Guaranteed Liabilities in such manner as the Security Agent shall deem appropriate.
2.10 Suspense account
Any moneys received in connection with this Guarantee (whether before or after any Incapacity of the Borrowers or any of them or the Guarantor) may be placed to the credit of a suspense account with a view to preserving the rights of the Security Agent and the Secured Creditors to prove for the whole of their claims against the Borrowers or any of them or any other person liable or may be applied in or towards satisfaction of such of the Guaranteed Liabilities as the Security Agent may from time to time conclusively determine in its absolute discretion.
2.11 Settlements conditional
Any release, discharge or settlement between the Guarantor and the Security Agent or any of the Secured Creditors shall be conditional upon no security, disposition or payment to the Security Agent or any of the Secured Creditors by the Borrowers or any of them or any other person liable being void, set aside or ordered to be refunded pursuant to any enactment or law relating to bankruptcy, liquidation, administration or insolvency or for any other reason whatsoever and if such condition shall not be fulfilled, the Security Agent shall be entitled to enforce this Guarantee subsequently as if such release, discharge or settlement had not occurred and any such payment had not been made.
2.12 Guarantor to deliver up certain property
If, contrary to clauses 2.4 or 2.9, the Guarantor takes or receives the benefit of any security or receives or recovers any money or other property, such security, money or other property shall be held on trust for the Security Agent and shall be delivered to the Security Agent on demand.
2.13 Retention of this Guarantee
The Security Agent shall be entitled to retain this Guarantee after as well as before the payment or discharge of all the Guaranteed Liabilities for such period as the Security Agent may determine.
3 Payments and Taxes
3.1 No set-off or counterclaim
All payments to be made by the Guarantor under this Guarantee shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 3.2, free and clear of any deductions or withholdings, in Dollars on the due date to such account of the Security Agent as the Security Agent may specify in writing to the Guarantor.
3.2 Grossing up for Taxes
If at any time the Guarantor is required to make any deduction or withholding in respect of Taxes or because of FATCA from any payment due under this Guarantee for the account of the Security Agent (or if the Security Agent is required to make any such deduction or withholding from a payment to a Secured Creditor of moneys received under this Guarantee), the sum due from the
Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Security Agent or (as the case may be) the relevant Secured Creditor receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made and the Guarantor shall indemnify the Security Agent or (as the case may be) the relevant Secured Creditor against any losses or costs incurred by it by reason of any failure of the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Guarantor shall promptly deliver to the Security Agent any receipts, certificates or other proof evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
3.3 Currency indemnity
If any sum due from the Guarantor under this Guarantee or any order or judgment given or made in relation hereto has to be converted from the currency (the “first currency”) in which the same is payable under this Guarantee or under such order or judgment into another currency (the “second currency”) for the purpose of (a) making or filing a claim or proof against the Guarantor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to this Guarantee, the Guarantor shall indemnify and hold harmless the Security Agent from and against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the Security Agent may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. Any amount due from the Guarantor under this clause 3.3 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Guarantee and the term “rate of exchange” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
4 Representations and warranties
4.1 Continuing representations and warranties
The Guarantor represents and warrants to the Security Agent that:
4.1.1 Due incorporation
the Guarantor is duly incorporated and validly existing in goodstanding under the laws of the Republic of the Marshall Islands as a Marshall Islands corporation, has no centre of main interests, permanent establishment or place of business in the Republic of the Marshall Islands, the UK or the USA, is not a FATCA FFI or a US Tax Obligor and has power to carry on its business as it is now being conducted and to own its property and other assets;
4.1.2 Corporate power to guarantee
the Guarantor has power to execute, deliver and perform its obligations under this Guarantee; all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same and no limitation on the powers of the Guarantor to borrow or give guarantees will be exceeded as a result of this Guarantee;
4.1.3 Binding obligations
this Guarantee constitutes valid and legally binding obligations of the Guarantor enforceable in accordance with its terms;
4.1.4 No conflict with other obligations
the execution and delivery of, the performance of its obligations under, and compliance with the provisions of, this Guarantee by the Guarantor will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Guarantor is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Guarantor is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the Guarantor’s constitutional documents or (iv) result in the creation or imposition of or oblige the Guarantor to create any Encumbrance on any of the Guarantor’s undertaking, assets, rights or revenues;
4.1.5 No litigation
no litigation, arbitration or administrative proceeding is taking place, pending or, to the knowledge of the officers of the Guarantor, threatened against the Guarantor which could have a material adverse effect on the business, assets or financial condition of the Guarantor;
4.1.6 No filings required
it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Guarantee that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to this Guarantee and this Guarantee is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
4.1.7 Choice of law
the choice of English law to govern this Guarantee and the submission by the Guarantor to the non-exclusive jurisdiction of the English courts are valid and binding;
4.1.8 No immunity
neither the Guarantor nor any of its assets is entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);
4.1.9 Consents obtained
every consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by the Guarantor to authorise, or required by the Guarantor in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Guarantee or the performance by the Guarantor of its obligations under this Guarantee has been obtained or made and is in full force and effect and there has been no default in the observance of the conditions or restrictions (if any) imposed in, or in connection with, any of the same; and
4.1.10 Shareholdings
each of the Borrowers and the Collateral Guarantors is a wholly-owned direct Subsidiary of the Guarantor and all of the issued shares in the Guarantor are legally and ultimately beneficially
owned by the person or persons disclosed by the Borrowers to the Agent and the Banks in the negotiation of the Agreement.
4.2 Initial representations and warranties
The Guarantor further represents and warrants to the Security Agent that:
4.2.1 Pari passu
the obligations of the Guarantor under this Guarantee are direct, general and unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of the Guarantor with the exception of any obligations which are mandatorily preferred by law and not by contract;
4.2.2 No default under other Indebtedness
the Guarantor is not (nor would with the giving of notice or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Indebtedness to which it is a party or by which it may be bound;
4.2.3 Information
the information, exhibits and reports furnished by the Guarantor to the Security Agent in connection or with the negotiation and preparation of this Guarantee are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
4.2.4 No withholding Taxes
no Taxes are imposed by withholding or otherwise on any payment to be made by the Guarantor under this Guarantee or are imposed on or by virtue of the execution or delivery by the Guarantor of this Guarantee or any document or instrument to be executed or delivered under this Guarantee;
4.2.5 No Default
no Default has occurred and is continuing; and
4.2.6 No material adverse change
there has been no material adverse change in the financial position of the Guarantor or the consolidated financial position of the Group from that described by the Borrowers and/or the Guarantor to the Agent in the negotiation of the Agreement and this Guarantee.
4.3 Repetition of representations and warranties
On and as of each day from the date of this Guarantee until the last day of the Security Period, the Guarantor shall be deemed to repeat the representations and warranties in clause 4.1 as if made with reference to the facts and circumstances existing on each such day.
5 Undertakings
5.1 General
The Guarantor undertakes with the Security Agent that, from the date of this Guarantee and at all times during the Security Period, it will:
5.1.1 Notice of default
promptly inform the Security Agent of any occurrence of which it becomes aware which might adversely affect its ability to perform its obligations under this Guarantee and of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Security Agent, confirm to the Security Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing;
5.1.2 Consents and licences
(a) without prejudice to clause 4.1, obtain or cause to be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all its obligations under this Guarantee; and
(b) comply with the terms and conditions of all laws, regulations, agreements, licences and concessions material to the carrying out of its business;
5.1.3 Pari passu
ensure that its obligations under this Guarantee shall at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
5.1.4 Financial statements
prepare or cause to be prepared:
(a) audited consolidated financial statements of the Group in accordance with the Applicable Accounting Principles consistently applied in respect of each financial year (commencing with the financial year ending on 31 December 2012) (namely, each 12-month period ending on 31 December of each calendar year); and
(b) unaudited consolidated financial statements of the Group in accordance with the Applicable Accounting Principles consistently applied in respect of the first half-year of each financial year (namely, each 6-month period ending on 30 June of each calendar year),
and, in each case, deliver to the Security Agent as many copies of the same as the Security Agent may reasonably require as soon as practicable but not later than:
(i) in the case of annual audited financial statements, one hundred and eighty (180) days after the end of the financial period to which they relate (namely, not later than 30 June of each calendar year); and
(ii) in the case of unaudited financial statements, ninety (90) days after the end of the financial period to which they relate (namely, not later than 30 September of each calendar year);
5.1.5 Valuations
deliver or cause to be delivered to the Security Agent valuations of each Fleet Vessel prepared in accordance with, and in the manner specified in, clause 5.3.4 (at the cost of the Guarantor) at the time when the consolidated financial statements of the Group are delivered to the Agent and/or the Security Agent in accordance with clause 8.1.6 of the Agreement and/or and clause 5.1.4, and prepared as at the date to which the relevant financial statements which they accompany are drawn up and, if a Default has occurred, at any other time as and when the Security Agent in its absolute discretion shall require;
5.1.6 Provision of other information
(a) provide the Security Agent with such financial and other information concerning the Guarantor, the Group and their respective affairs as the Security Agent may from time to time reasonably require and shall promptly advise the Security Agent of all major financial developments in relation to the Manager, the Guarantor, the Borrowers, the Collateral Guarantors, the Group, any other member of the Group and their Related Companies including, without prejudice to the generality of the foregoing, any vessel sales or purchases and any new borrowings;
(b) if at any time the Guarantor pursues an initial public offering of its shares on any stock exchange, appoint ABN AMRO Bank N.V. as one of the underwriters in such initial public offering pursuant to the terms agreed by the other selected underwriters or the terms agreed between the Guarantor and ABN AMRO Bank N.V.;
5.1.7 Delivery of reports
deliver to the Security Agent sufficient copies of every report, circular, notice or like document issued by the Guarantor to its shareholders or creditors generally; and
5.1.8 Covenants to other lenders
(a) ensure that the covenants in this Guarantee shall at all times be similar to and, in any case, not less onerous than, the covenants given from time to time by the Guarantor in any guarantee to other banks or financial institutions which have financed the assets owned by other members of the Group; and
(b) if at any time the Guarantor negotiates more onerous covenants that those contained in this Guarantee with another bank or financial institution, promptly notify the Security Agent and offer to amend this Guarantee so as to incorporate any such more onerous covenants in this Guarantee.
5.2 Negative undertakings
The Guarantor undertakes with the Security Agent that, from the date of this Guarantee and at all times during the Security Period, the Guarantor will not, without the prior written consent of the Security Agent acting on the instructions of the Majority Banks:
5.2.1 No merger
merge or consolidate with any other person or enter into any demerger, amalgamation or corporate reconstruction or redomiciliation of any kind whatsoever;
5.2.2 Disposals
and it will procure that none of the Borrowers will, without the prior written consent of the Security Agent (acting on the instructions of the Majority Banks), sell, transfer, abandon, lend or otherwise dispose of or cease to exercise direct control over any part (being, either alone or when aggregated with all other disposals falling to be taken into account pursuant to this clause 5.2.2, material in the reasonable opinion of the Security Agent in relation to the undertaking, assets, rights and revenues of the Guarantor or, as the case may be, the relevant Subsidiary taken as a whole) of its present or future undertaking, assets, rights or revenues whether by one or a series of transactions related or not;
5.2.3 Other business
undertake any business other than the ownership of shares in companies involved in the ownership and operation of ocean going ships of similar type and size to the Ships and the chartering thereof to third parties;
5.2.4 Other obligations
incur any obligations except for:
(a) obligations arising under the Security Documents and/or the Existing Security Documents; or
(b) contracts entered into in the ordinary course of its business of being a holding company of Subsidiaries owning, operating and chartering ships; or
(c) guarantees or indemnities from time to time required in the ordinary course of its business as holding company of Subsidiaries owning, operating and chartering ships (such as this Guarantee);
and in the case of (b) and (c) above, to apply always on normal commercial terms;
5.2.5 Loans
make any loans or grant any credit (save for normal trade credit in the ordinary course of business) to any person or agree to do so;
5.2.6 Share capital and distribution
without prejudice to clause 5.3, purchase or otherwise acquire for value any shares of its capital or distribute any of its present or future assets, undertakings, rights or revenues to any of its shareholders Provided however that the Guarantor may declare or pay cash dividends to its shareholders at any time if no Event of Default shall have occurred and is continuing at the time of declaration or payment of such dividends or would occur as a result of the declaration or payment of such dividends;
5.2.7 Constitutional documents
permit, cause or agree to any amendment or variation of its constitutional documents;
5.2.8 Auditors and financial year
remove or permit the removal of its auditors or appoint new ones or change its financial year end;
5.2.9 Shareholdings
change, cause, or permit any change in, the legal and/or the ultimate beneficial ownership of any of the shares in the Guarantor, the Manager, the Shareholder, any of the Collateral Guarantors or any Borrower, in each case from that set out in clause 4.1.11 and/or clause 7.1.10 of the Agreement; and
5.2.10 FATCA
become a FATCA FFI or a US Tax Obligor.
5.3 Financial undertakings
The Guarantor undertakes with the Security Agent that from the date of this Guarantee and so long as any moneys are owing under the Security Documents and while all or any part of the Total Commitment remains outstanding, it will ensure that:
5.3.1 Leverage Ratio
the Leverage Ratio shall not, exceed 0.65:1;
5.3.2 Consolidated Interest Coverage Ratio
the Consolidated Interest Coverage Ratio in relation to any Four-Quarter Period (or any other period as the Agent may require):
(a) ending on 31 December 2012, shall not be lower than 2:1; and
(b) ending after 1 January 2013, shall not be lower than 2.50:1;
5.3.3 Minimum Liquidity
at any relevant time it is standing to the credit of the Cash Collateral Account an amount in Dollars not less than the aggregate of $500,000 for each Mortgaged Ship at such time;
5.3.4 Definitions and interpretation
(a) For the purposes of this clause 5.3, the following expressions shall have the following meanings:
(i) “Accounting Information” means (a) the annual audited consolidated financial statements of the Group and (b) the half-yearly unaudited consolidated financial statements of the Group, each as provided or (as the context may require) to be provided to the Security Agent in accordance with clause 5.1.4;
(ii) “Cash” means, at any relevant time:
(A) cash in hand legally and beneficially owned by any member of the Group; and
(B) cash deposits legally and beneficially owned by any member of the Group and which are deposited with (i) any of the Banks, (ii) any other deposit taking institution having a rating of at least A from Standard & Poor’s Ratings Group or the equivalent with any other principal credit rating agency in the USA or Europe or (iii) any other lender or financial institution approved by the Security Agent,
which in each case:
(1) is free from any Encumbrance;
(2) is otherwise at the free and unrestricted disposal of the relevant member of the Group by which it is owned; and
(3) in the case of cash in hand or cash deposits held by a member of the Group which is not a Borrower, is (in the opinion of the Security Agent, based upon such documents and evidence as the Security Agent may require the Borrowers to provide in order to form the basis of such opinion) capable or, upon the occurrence of an Event of Default, would become capable, of being paid without restriction to the Guarantor, within five (5) Banking Days of its request or demand therefor, either by way of a dividend or by way of a repayment of principal (or the payment of interest thereon) in respect of an inter-company loan from the Guarantor to that member of the Group,
Provided however that restricted cash of the Group which represents minimum liquidity required to be maintained under borrowing arrangements shall be taken into account as “Cash” if and for as long as it is free from Encumbrances;
(iii) “Consolidated Interest Coverage Ratio” means, in respect of a Four-Quarter Period, the ratio of Consolidated EBITDA to the Consolidated Gross Interest Expense during such period Four-Quarter Period;
(iv) “Consolidated EBITDA” means, in respect of a Four-Quarter Period, the consolidated profit on ordinary activities of the Group for that Four-Quarter Period, as shown in the audited consolidated profit and loss account of the Group provided to the Security Agent under clause 5.1.4 (or, as the case may be, in the unaudited consolidated profit and loss account for the relevant half-year provided to the Security Agent under clause 5.1.4) adjusted by:
(A) deducting amounts (if any) representing exceptional or extraordinary gains during that period;
(B) adding back the amount charged as tax on profit on ordinary activities during that period;
(C) adding back an amount equal to Consolidated Gross Interest Expense during that period; and
(D) adding back the amount deducted for the purposes of depreciation/amortisation.
(v) “Consolidated Gross Interest Expense” means, in respect of a Four-Quarter Period, all interest and other financing charges incurred or paid by the Group, or
stated in the most recent Accounting Information relevant to such Four-Quarter Period;
(vi) “Consolidated Total Assets” at any relevant time and in relation to any relevant period, has the meaning ascribed thereto in the annual audited consolidated financial statements of the Group for such period but, in relation to any Fleet Vessels which are included in the Consolidated Total Assets in such statements, after:
(A) deducting from such Consolidated Total Assets the amount by which the Fleet Book Value of such Fleet Vessels for such period exceeds the Fleet Market Value of such Fleet Vessels; or
(B) adding to such Consolidated Total Assets the amount by which the Fleet Market Value of such Fleet Vessels exceeds the Fleet Book Value of such Fleet Vessels for such period;
(vii) “Consolidated Total Liabilities” at any relevant time and in relation to any relevant period, has the meaning ascribed thereto in the relevant consolidated financial statements of the Group for such period;
(viii) “Fleet Book Value” means, at any relevant time and in relation to any relevant period, the aggregate book value of the Fleet Vessels less depreciation, as stated in the relevant consolidated financial statements of the Group for such period;
(ix) “Fleet Market Value” means, as of the date of calculation, the aggregate market value of the Fleet Vessels as most recently determined pursuant to valuations obtained by the Agent (at the expense of the Guarantor) in accordance with the provisions of clause 8.2.1 of the Agreement;
(x) “Fleet Vessels” means the vessels from time to time owned by the members of the Group (which for the avoidance includes any vessels under construction at the time) and “Fleet Vessel” means each of them;
(xi) “Four-Quarter Period” means each twelve-month period ending on 31 March, 30 June, 30 September or 31 December of any calendar year; and
(xii) “Leverage Ratio” means, at any relevant time and in relation to any relevant period, the ratio of (a) the aggregate of Consolidated Total Liabilities minus Cash during such period to (b) the aggregate of Consolidated Total Assets minus Cash during such period.
(b) All the terms defined in this clause 5.3.4 or in clause 1.2, and used in this clause 5.3, and accounting terms used in this clause 5.3, are to be determined on a consolidated basis in respect of the Group and (except as items are expressly included or excluded in the relevant definition or clause) are used and shall be construed in accordance with the Applicable Accounting Principles and as determined from the latest consolidated financial statements of the Group delivered to the Security Agent pursuant to clause 5.1.4.
(c) The compliance of the Guarantor with the covenants set out in clauses 5.3.1, 5.3.2 and 5.3.3 shall be determined by the Security Agent in its sole discretion on the basis of calculations made by the Security Agent at any time by reference to the then latest consolidated financial statements of the Group delivered to the Security Agent pursuant to clause 5.1.4. For the avoidance of doubt it is hereby agreed and acknowledged that
the Security Agent shall be entitled to make any such determinations and/or calculations at any time, without regard to when any such financial statements are due to be delivered or have been actually delivered to the Security Agent pursuant to clause 5.1.4.
(d) For the purposes of this clause 5.3 (a) no item shall be deducted or credited more than once in any calculation; and (b) any amount expressed in a currency other than Dollars shall be converted into Dollars in accordance with the Applicable Accounting Principles.
5.4 Cash Collateral Account
5.4.1 Withdrawals
Unless the Security Agent (acting on the instructions of the Majority Banks) otherwise agrees in writing, the Guarantor shall not withdraw any moneys from the Cash Collateral Account at any time from the date of this Guarantee and until the end of the Security Period, if following such withdrawal the amount standing to the credit of the Cash Collateral Account shall be less than the minimum amount required under clause 5.3.3.
5.4.2 Account terms
Amounts standing to the credit of the Cash Collateral Account shall (unless otherwise agreed between the Account Bank and the Guarantor) bear interest at the rates from time to time offered by the Account Bank to its customers for Dollar deposits in comparable amounts for comparable periods. Interest shall accrue on the Cash Collateral Account from day to day and be calculated on the basis of actual days elapsed and a three hundred and sixty (360) day year and shall be credited to such account at such times as the Account Bank and the Guarantor shall agree.
5.4.3 Application of Cash Collateral Account
At any time after the occurrence of an Event of Default, the Security Agent may (and on the instructions of the Majority Banks shall), without notice to the Guarantor, instruct the Account Bank to apply all moneys then standing to the credit of the Cash Collateral Account (together with interest from time to time accruing or accrued thereon) in or towards satisfaction of any sums due to the Creditors or any of them under the Security Documents.
5.4.4 Charging of Cash Collateral Account
The Cash Collateral Account and all amounts from time to time standing to the credit thereof shall be subject to the security constituted and the rights conferred by the Cash Collateral Account Pledge.
6 Set-off
The Guarantor authorises the Security Agent, at any time and without notice to the Guarantor, to apply any credit balance to which the Guarantor is then entitled on any account of the Guarantor with the Security Agent at any of its branches, in or towards satisfaction of any sum then due and payable from the Guarantor to the Security Agent under this Guarantee. For this purpose the Security Agent is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application. The Security Agent shall not be obliged to exercise any right given to it by this clause 6. The Security Agent shall notify the Guarantor and the Secured Creditors forthwith upon the exercise or purported exercise of any right of set-off giving full details in relation thereto.
7 Benefit of this Guarantee
7.1 Benefit and burden
This Guarantee shall be binding upon the Guarantor and its successors in title and shall enure for the benefit of the Security Agent and its successors in title, assignees and replacements. The Guarantor expressly acknowledges and accepts the provisions of clause 15 of the Agreement and agrees that any person who replaces the Security Agent in accordance with such clause shall be entitled to the benefit of this Guarantee.
7.2 Changes in constitution or reorganisation of Creditors
For the avoidance of doubt and without prejudice to the provisions of clause 7.1, this Guarantee shall remain binding on the Guarantor notwithstanding any change in the constitution of the Security Agent or any of the Secured Creditors or their absorption in, or amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganisation of any kind, to the intent that this Guarantee shall remain valid and effective in all respects in favour of any successor in title or replacement of the Security Agent in the same manner as if such successor in title or replacement had been named in this Guarantee as a party instead of, or in addition to, the Security Agent.
7.3 No assignment by Guarantor
The Guarantor may not assign or transfer any of its rights or obligations under this Guarantee.
7.4 Disclosure of information
The Security Agent may, without the consent of the Guarantor, disclose to a prospective Transferee or to any other person who may propose entering into contractual relations with a Bank in relation to the Agreement such information about the Guarantor as the Security Agent shall consider appropriate.
8 Notices and other matters
8.1 Notices
The provisions of clause 17.1 of the Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Guarantee as if references to the “Borrowers or any of them” and “this Agreement” were references to the Guarantor and this Guarantee, respectively.
8.2 No implied waivers; remedies cumulative
No failure or delay on the part of the Security Agent, to exercise any power, right or remedy under this Guarantee shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any power, right or remedy under this Guarantee preclude any other or further exercise thereof or the exercise of any other power, right or remedy. The remedies provided in this Guarantee are cumulative and are not exclusive of any remedies provided by law.
8.3 English translations
All certificates, instruments and other documents to be delivered under or supplied in connection with this Guarantee shall be in the English language or shall be accompanied by a certified English translation upon which the Security Agent shall be entitled to rely.
8.4 Other guarantors
The Guarantor agrees to be bound by this Guarantee notwithstanding that any other person intended to execute or to be bound by any other guarantee or assurance under or pursuant to the Agreement may not do so or may not be effectually bound and notwithstanding that such other guarantee or assurance may be determined or be or become invalid or unenforceable against any other person, whether or not the deficiency is known to the Security Agent or any of the Secured Creditors.
8.5 Expenses
The Guarantor agrees to reimburse the Security Agent on demand for all legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Security Agent in relation to the enforcement of this Guarantee against the Guarantor.
8.6 Partial invalidity
If, at any time, any provision of this Guarantee is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision in any other respect or under the law of any other jurisdiction will be affected or impaired in any way.
8.7 Miscellaneous
This Guarantee contains the entire agreement of the parties and its provisions supersede any and all other prior correspondence and oral negotiation by the parties in respect of the matters regulated by the Guarantee.
9 Law and jurisdiction
9.1 Law
This Guarantee and any non-contractual obligations in connection with this Guarantee are governed by and shall be construed in accordance with English law.
9.2 Submission to jurisdiction
The Guarantor agrees for the benefit of the Security Agent that any legal action or proceedings arising out of or in connection with this Guarantee and any non-contractual obligations in connection with this Guarantee against the Guarantor or any of its assets may be brought in the English courts, irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Guarantor in the courts of any other competent jurisdiction, nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The Guarantor further agrees that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Guarantor may have against the Security Agent arising out of or in connection with this Guarantee and any non-contractual obligations in connection with this Guarantee.
9.3 Contracts (Rights of Third Parties) Act 1999
No term of this Guarantee is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Guarantee.
IN WITNESS whereof the parties to this Guarantee have caused this Guarantee to be duly executed as a deed on the date first above written.
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Private & Confidential
Dated August 2013
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| [Q A MARITIME LTD.] |
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| [Q JAKE SHIPPING LTD.] |
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| [Q SHEA SHIPPING LTD.] |
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| ABN AMRO BANK N.V. |
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CORPORATE GUARANTEE
Contents
Clause |
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1 | Interpretation | 1 |
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2 | Guarantee | 4 |
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3 | Payments and Taxes | 7 |
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4 | Representations and warranties | 8 |
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5 | Undertakings | 13 |
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6 | Set-off | 17 |
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7 | Benefit of this Guarantee | 18 |
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8 | Notices and other matters | 18 |
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9 | Law and jurisdiction | 19 |
THIS GUARANTEE is dated August 2013 and made BETWEEN:
(1) [Q A MARITIME LTD.], [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.], of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Guarantor”); and
(2) ABN AMRO BANK N.V., a banking corporation incorporated and established under the laws of The Netherlands, acting for the purposes of this Guarantee through its branch at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the “Security Agent”) for itself and as security agent and trustee for and on behalf of the Secured Creditors (as defined below).
WHEREAS:
(A) by a loan agreement dated August 2013 (the “Agreement”) and made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd. (herein and therein referred to together as the “Borrowers”), as joint and several borrowers and (2) ABN AMRO Bank N.V., as arranger, agent (in such capacity the “Agent”), security agent and account bank and (3) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”; and, together with the Agent, the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, upon the terms and conditions therein contained, the principal sum of up to US$31,040,000;
(B) pursuant to clause 16.14 of the Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a deed of trust dated August 2013 executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Guarantee for and on behalf of itself and the Secured Creditors; and
(C) the execution and delivery of this Guarantee is one of the conditions precedent to each of the Banks making its Commitment available under the Agreement and this is the [Q Arion] [Q loanari] [Q Jake] [Q Shea] Guarantee referred to in the Agreement.
IT IS AGREED as follows:
1 Interpretation
1.1 Defined expressions
In this Guarantee, unless the context otherwise requires or unless otherwise defined in this Guarantee, words and expressions defined in the Agreement and used in this Guarantee shall have the same meaning where used in this Guarantee.
1.2 Definitions
In this Guarantee, unless the context otherwise requires:
“Agent” includes its successors in title, assignees and/or its replacements;
“Banks” includes their respective successors in title and/or Transferees;
“Borrower’s Security Documents” means at any relevant time, such of Security Documents as shall have been executed by the Borrowers or any of them at such time;
“Collateral Instruments” means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances
against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Guarantor, the Borrowers or any of them or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind;
“First Borrowers” means, together, the Owner, [Q loanari Shipping Ltd, Q Jake Shipping Ltd. and Q Shea Shipping Ltd.] [Q A Maritime Ltd., Q Jake Shipping Ltd. and Q Shea Shipping Ltd] [Q A Maritime Ltd., Q loanari Shipping Ltd and Q Shea Shipping Ltd.] [Q A Maritime Ltd., Q loanari Shipping Ltd and Q Jake Shipping Ltd.];
“First Loan Agreement” means the loan agreement dated 7 June 2011 as amended and restated by a supplemental agreement dated 2 September 2011 and as further amended and restated by a second supplemental agreement dated 14 June 2012 and made between (1) the Owner and the other First Borrowers as joint and several borrowers, (2) the banks and financial institutions referred to in schedule 1 thereto as lenders and (3) ABN AMRO Bank N.V. as arranger, agent, security agent, account bank and swap provider (the “First Swap Provider”);
“First Master Swap Agreement” means the 2002 ISDA Master Swap Agreement dated as of 7 June 2011 as amended and supplemented by an ISDA amendment agreement dated 2 September 2011 and as further amended and supplemented by an ISDA amendment agreement dated 14 June 2012, each made between the First Borrowers and the First Swap Provider, comprising a 2002 ISDA Master Agreement (and a schedule thereto) together with any Confirmations (as defined therein) supplemental thereto;
“First Security Documents” has the meaning ascribed to “Security Documents” in the First Loan Agreement;
“General Assignment” means the third priority general assignment collateral to the Mortgage executed or (as the context may require) to be executed by the Guarantor in favour of the Security Agent in the form set out in schedule 11 of the Agreement;
“Guarantee” includes each separate or independent stipulation or agreement by the Guarantor contained in this Guarantee;
“Guaranteed Liabilities” means all moneys, obligations and liabilities expressed to be guaranteed by the Guarantor in clause 2.1;
“Guarantor” includes the successors in title of the Guarantor;
“Incapacity” means, in relation to a person, the death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of that person whatsoever (and, in the case of a partnership, includes the termination or change in the composition of the partnership);
“Mortgage” means a third preferred Marshall Islands mortgage over the Ship executed or (as the context may require) to be executed by the Guarantor in favour of the Security Agent;
“Permitted Encumbrance” means any Encumbrance in favour of the Creditors created pursuant to the Security Documents, the First Security Documents, the Second Security Documents and Permitted Liens;
“Relevant Jurisdiction” means any jurisdiction in which or where the Guarantor is incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected;
“Second Account Pledge” means the second ranking account pledge dated 23 October 2012 executed by Quintana Shipping Ltd. as pledgor and ABN AMRO Bank N.V. as pledgee and account bank;
“Second General Assignment” means the second priority deed of assignment dated 23 October 2012 made between the Guarantor and the Second Mortgagee collateral to the Second Mortgage whereby the Guarantor has assigned to the Second Mortgagee the Insurances, any Requisition Compensation and the Earnings (as defined therein);
“Second Loan Agreement” means the loan agreement dated 23 October 2012 made between (1) Q Deb Shipping Ltd. and Q Sue Shipping Ltd. as joint and several borrowers (2) the banks and financial institutions referred to in schedule 1 thereto and (3) ABN AMRO Bank N.V. as arranger, agent, security agent and account bank;
“Second Mortgage” means the second preferred Marshall Islands ship mortgage dated 23 October 2012 and executed by the Guarantor in favour of the Second Mortgagee in respect of the Ship which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM23 at page [943][946][945][944] on 23 October 2012 at 05:06 P.M., E.E.S.T.;
“Second Mortgagee” means ABN AMRO Bank N.V., a company incorporated in the Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, as security agent and trustee for and on behalf of the Secured Creditors (as defined in the Second Mortgage);
“Second Security Documents” has the meaning ascribed to “Security Documents” in the Second Loan Agreement and includes, without limiting the generality of the foregoing, the Second Loan Agreement, the Second Mortgage, the Second General Assignment and the Second Account Pledge;
“Secured Creditors” means, together, the Agent and the Banks and “Secured Creditor” means each one of them;
“Security Agent” includes its successors in title, assignees and/or its replacements; and
“Ship” means the 2011-built, approx. [82,000] [82,000] [82,000] [76,922] tons bulk carrier [Q Arion] [Q Ioanari] [Q Jake] [Q Shea], owned by the Guarantor and registered in its ownership through the relevant Registry under the laws and flag of the relevant Flag State with IMO number [9461336] [9586344] [9461324] [9335991].
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Guarantee.
1.4 Construction of certain terms
In this Guarantee, unless the context otherwise requires:
1.4.1 references to clauses are to be construed as references to the clauses of this Guarantee;
1.4.2 references to (or to any specified provision of) this Guarantee or any other document shall be construed as references to this Guarantee, that provision or that document as in force for the time being and as amended from time to time in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;
1.4.3 words importing the plural shall include the singular and vice versa;
1.4.4 references to a time of day are to London time;
1.4.5 references to a person shall be construed as including references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
1.4.6 references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, any obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and
1.4.7 references to any enactment shall be deemed to include reference to such enactment as re-enacted, amended or extended.
2 Guarantee
2.1 Covenant to pay
In consideration of the Banks making or continuing loans or advances to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Borrowers or any of them pursuant to the Agreement, the Guarantor hereby irrevocably guarantees to pay to the Security Agent for the account of the Secured Creditors, on demand by the Security Agent, all moneys and discharge all obligations and liabilities now or hereafter due, owing or incurred by the Borrowers or any of them to the Secured Creditors or any of them under or pursuant to the Agreement and/or the other Security Documents or any of them when the same become due for payment or discharge whether by acceleration or otherwise, and whether such moneys, obligations or liabilities are express or implied, present, future or contingent, joint or several, incurred as principal or surety, originally owing to the Secured Creditors or any of them or purchased or otherwise acquired by any of them, denominated in Dollars or in any other currency, or incurred on any banking account or in any other manner whatsoever.
Such liabilities shall, without limitation, include interest (as well after as before judgment) to date of payment at such rates and upon such terms as may from time to time be agreed, commission, fees and other charges and all legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Secured Creditors or any of them in relation to any such moneys, obligations or liabilities or generally in respect of the Borrowers, the Guarantor or any Collateral Instrument.
2.2 Guarantor as principal debtor; indemnity
As a separate and independent stipulation, the Guarantor agrees that if any purported obligation or liability of the Borrowers or any of them which would have been the subject of this Guarantee had it been valid and enforceable is not or ceases to be valid or enforceable against the Borrowers or any of them on any ground whatsoever whether or not known to the Security Agent or the Secured Creditors or any of them (including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach of duty by, any person purporting to act on behalf of the Borrowers or any of them or any legal or other limitation, whether under the Limitation Acts or otherwise or any disability or Incapacity or any change in the constitution of the Borrowers or any of them) the Guarantor shall nevertheless be liable to the
Security Agent in respect of that purported obligation or liability as if the same were fully valid and enforceable and the Guarantor were the principal debtor in respect thereof. The Guarantor hereby agrees to keep the Security Agent fully indemnified on demand against all damages, losses, costs and expenses arising from any failure of the Borrowers or any of them to perform or discharge any such purported obligation or liability.
2.3 Statements of account conclusive
Any statement of account, signed as correct by an officer of the Security Agent, showing the amount of the Guaranteed Liabilities shall, in the absence of manifest error, be binding and conclusive on and against the Guarantor.
2.4 No security taken by Guarantor
The Guarantor warrants that it has not taken or received, and undertakes that until all the Guaranteed Liabilities have been paid or discharged in full, it will not take or receive, the benefit of any security from the Borrowers or any of them or any other person in respect of its obligations under this Guarantee.
2.5 Interest
The Guarantor agrees to pay interest on each amount demanded of it under this Guarantee from the date of such demand until payment (as well after as before judgment) at the rate specified in clause 3.4 of the Agreement which shall apply to this Guarantee mutatis mutandis. Such interest shall be compounded at the end of each period determined for this purpose by the Security Agent in the event of it not being paid when demanded but without prejudice to any right of the Secured Creditors to require payment of such interest.
2.6 Continuing security and other matters
This Guarantee shall:
2.6.1 secure the ultimate balance from time to time owing to the Security Agent and/or the Secured Creditors or any of them by the Borrowers or any of them and shall be a continuing security, notwithstanding any settlement of account or other matter whatsoever;
2.6.2 be in addition to any present or future Collateral Instrument, right or remedy held by or available to the Security Agent and/or the Secured Creditors or any of them; and
2.6.3 not be in any way prejudiced or affected by the existence of any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Security Agent or by the Secured Creditors or any of them dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or indulgence or compounding with any other person liable.
2.7 Liability unconditional
The liability of the Guarantor shall not be affected nor shall this Guarantee be discharged or reduced by reason of:
2.7.1 the Incapacity or any change in the name, style or constitution of the Borrowers or any of them or any other person liable;
2.7.2 the Security Agent or any of the Secured Creditors or any of them granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, the
Borrowers or any of them or any other person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting or varying any compromise, arrangement or settlement or omitting to claim or enforce payment from the Borrowers or any of them or any other person liable; or
2.7.3 any act or omission which would have discharged or affected the liability of the Guarantor had it been a principal debtor instead of a guarantor or by anything done or omitted which but for this provision might operate to exonerate the Guarantor.
2.8 Collateral Instruments
Neither the Security Agent nor the Secured Creditors shall be obliged to make any claim or demand on the Borrowers or any of them or to resort to any Collateral Instrument or other means of payment now or hereafter held by or available to it before the Security Agent enforcing this Guarantee and no action taken or omitted by the Security Agent or any of the Secured Creditors in connection with any such Collateral Instrument or other means of payment shall discharge, reduce, prejudice or affect the liability of the Guarantor under this Guarantee nor shall the Security Agent or any of the Secured Creditors be obliged to apply any money or other property received or recovered in consequence of any enforcement or realisation of any such Collateral Instrument or other means of payment in reduction of the Guaranteed Liabilities.
2.9 Waiver of Guarantor’s rights
Until all the Guaranteed Liabilities have been paid, discharged or satisfied in full (and notwithstanding payment of a dividend in any liquidation or under any compromise or arrangement) the Guarantor agrees that, without the prior written consent of the Security Agent, it will not:
2.9.1 exercise its rights of subrogation, reimbursement and indemnity against the Borrowers or any of them or any other person liable;
2.9.2 demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to the Guarantor from the Borrowers or any of them or from any other person liable or demand or accept any Collateral Instrument in respect of the same or dispose of the same;
2.9.3 take any step to enforce any right against the Borrowers or any of them or any other person liable; or
2.9.4 claim any set-off or counterclaim against the Borrowers or any other person liable or claim or prove in competition with the Security Agent or any of the Secured Creditors in the liquidation of the Borrowers or any of them or any other person liable or have the benefit of, or share in, any payment from or composition with, the Borrowers or any other person liable or any other Collateral Instrument now or hereafter held by the Security Agent or any of the Secured Creditors for any Guaranteed Liabilities or for the obligations or liabilities of any other person liable but so that, if so directed by the Security Agent, it will prove for the whole or any part of its claim in the liquidation of the Borrowers or any of them or any other person liable on terms that the benefit of such proof and of all money received by it in respect thereof shall be held on trust for the Security Agent and applied in or towards discharge of the Guaranteed Liabilities in such manner as the Security Agent shall deem appropriate.
The Guarantor also hereby waives unconditionally and unreservedly its rights under Articles 855, 861, 862, 863, 866, 867 and 868 of the Greek Civil Code.
2.10 Application and suspense accounts
All moneys received by the Security Agent (whether before or after any Incapacity of the Borrower or the Guarantor) under or pursuant to this Guarantee or any of the Security Documents to which the Guarantor is, or is to be, a party and expressed to be applied in accordance with the provisions of this clause 2.10, shall be applied or, as the context may require, used by the Security Agent in the following manner:
2.10.1 first, in or towards the Expenses (as defined in the Mortgage);
2.10.2 secondly, in or towards any part of the Guaranteed Liabilities which has become due and payable; and
2.10.3 the surplus (if any) may be held by the Security Agent as continuing security for the Guaranteed Liabilities for a further application in accordance with clauses 2.10.1, 2.10.2 and 2.10.3 as and when any further Expenses are incurred and/or any further part of the Guaranteed Liabilities falls due,
provided however that any money received by the Security Agent in connection with this Guarantee (whether before or after any Incapacity of the Borrowers or any of them or the Guarantor) may be placed to the credit of a suspense account with a view to preserving the rights of the Security Agent and/or the Secured Creditors or any of them to prove for the whole of their claims against the Borrowers or any of them or the Guarantor or any other person liable or may be applied in or towards satisfaction of such part of the Guaranteed Liabilities as the Security Agent may from time to time conclusively determine in its absolute discretion.
2.11 Settlements conditional
Any release, discharge or settlement between the Guarantor and the Security Agent or any of the Secured Creditors shall be conditional upon no security, disposition or payment to the Security Agent or any of the Secured Creditors by the Borrowers or any of them or any other person liable being void, set aside or ordered to be refunded pursuant to any enactment or law relating to bankruptcy, liquidation, administration or insolvency or for any other reason whatsoever and if such condition shall not be fulfilled the Security Agent shall be entitled to enforce this Guarantee subsequently as if such release, discharge or settlement had not occurred and any such payment had not been made.
2.12 Guarantor to deliver up certain property
If, contrary to clauses 2.4 or 2.9, the Guarantor takes or receives the benefit of any security or receives or recovers any money or other property, such security, money or other property shall be held on trust for the Security Agent and shall be delivered to the Security Agent on demand.
2.13 Retention of this Guarantee
The Security Agent shall be entitled to retain this Guarantee after as well as before the payment or discharge of all the Guaranteed Liabilities for such period as the Security Agent may determine.
3 Payments and Taxes
3.1 No set-off or counterclaim
All payments to be made by the Guarantor under this Guarantee shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 3.2, free and clear of any
deductions or withholdings, in Dollars on the due date to such account as the Security Agent may specify in writing to the Guarantor.
3.2 Grossing up for Taxes
If at any time the Guarantor is required to make any deduction or withholding in respect of Taxes or because of FATCA from any payment due under this Guarantee for the account of the Security Agent (or if the Security Agent is required to make any such deduction or withholding from a payment to a Secured Creditor of moneys received under this Guarantee), the sum due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Security Agent receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made and the Guarantor shall indemnify the Security Agent or (as the case may be) the relevant Secured Creditor against any losses or costs incurred by it by reason of any failure of the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Guarantor shall promptly deliver to the Security Agent any receipts, certificates or other proof evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
3.3 Currency indemnity
If any sum due from the Guarantor under this Guarantee or any order or judgment given or made in relation hereto has to be converted from the currency (“first currency”) in which the same is payable under this Guarantee or under such order or judgment into another currency (“second currency”) for the purpose of (a) making or filing a claim or proof against the Guarantor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to this Guarantee, the Guarantor shall indemnify and hold harmless the Security Agent from and against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the Security Agent may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. Any amount due from the Guarantor under this clause 3.3 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Guarantee and the term “rate of exchange” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
4 Representations and warranties
4.1 Continuing representations and warranties
The Guarantor represents and warrants to the Security Agent that:
4.1.1 Due incorporation
the Guarantor is duly incorporated and validly existing in goodstanding under the laws of the Republic of the Marshall Islands as a Marshall Islands corporation, has no centre of main interests, permanent establishment or place of business in the Republic of the Marshall Islands, the UK or the USA, is not a FATCA FFI or a US Tax Obligor and has power to carry on its business as it is now being conducted and to own its property and other assets;
4.1.2 Corporate power to guarantee
the Guarantor has power to execute, deliver and perform its obligations under this Guarantee and the other Security Documents and the Underlying Documents to which it is a party; all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same and no limitation on the powers of the Guarantor to borrow or give guarantees will be exceeded as a result of this Guarantee;
4.1.3 Binding obligations
this Guarantee and the other Security Documents to which it is a party constitutes valid and legally binding obligations of the Guarantor enforceable in accordance with their respective terms;
4.1.4 No conflict with other obligations
the execution and delivery of, the performance of its obligations under, and compliance with the provisions of, this Guarantee and the other Security Documents to which it is a party by the Guarantor will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Guarantor is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Guarantor is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the Guarantor’s constitutional documents or (iv) result in the creation or imposition of or oblige the Guarantor to create any Encumbrance (other than a Permitted Encumbrance) on any of the Guarantor’s undertakings, assets, rights or revenues;
4.1.5 No litigation
no litigation, arbitration or administrative proceeding is taking place, pending or, to the knowledge of the officers of the Guarantor, threatened against the Guarantor which could have a material adverse effect on the business, assets or financial condition of the Guarantor;
4.1.6 No filings required
save for the registration of the Mortgage in the relevant register under the laws of the relevant Flag State through the relevant Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Guarantee, the other Security Documents to which the Guarantor is a party that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to this Guarantee or any of the other Security Documents to which the Guarantor is a party and this Guarantee is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
4.1.7 Choice of law
the choice of English law to govern this Guarantee, the General Assignment and the Manager’s Undertaking and of Marshall Islands law to govern the Mortgage and the submission by the Guarantor to the non-exclusive jurisdiction of the English courts are valid and binding;
4.1.8 No immunity
neither the Guarantor nor any of its assets is entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);
4.1.9 Consents obtained
every consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by the Guarantor to authorise, or required by the Guarantor in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Guarantee and the other Security Documents to which the Guarantor is a party or the performance by the Guarantor of its obligations under this Guarantee and the other Security Documents to which the Guarantor is a party has been obtained or made and is in full force and effect and there has been no default in the observance of the conditions or restrictions (if any) imposed in, or in connection with, any of the same;
4.1.10 Shareholding
the Guarantor is a wholly-owned direct subsidiary of the Shareholder;
4.1.11 Taxation
(a) the Guarantor is not overdue in the filing of any tax returns and the Guarantor is not overdue in the payment of any amounts in respect of Taxes (or its equivalent in any other currency);
(b) no claims or investigations are being, or are reasonably likely to be, made or conducted against the Guarantor with respect to Taxes; and
(c) the Guarantor is resident for taxation purposes only in the jurisdiction of its incorporation; and
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4.1.12 Solvency
(a) the Guarantor is not unable, nor admits or has admitted its inability, to pay its debts or has suspended making payments on any of its debts;
(b) the Guarantor has not by reason of actual or anticipated financial difficulties commenced, nor intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Indebtedness;
(c) the value of the assets of the Guarantor is not less than its liabilities (taking into account contingent and prospective liabilities); and
(d) no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Indebtedness of the Guarantor.
4.2 Initial representations and warranties
The Guarantor further represents and warrants to the Security Agent that:
4.2.1 No material adverse change
there has been no material adverse change in the financial position or the business of the Guarantor from that described by the Borrowers or any of them and/or the Guarantor to the Agent in the negotiation of this Guarantee;
4.2.2 Pari passu
the obligations of the Guarantor under this Guarantee are direct, general and unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of the Guarantor with the exception of any obligations which are mandatorily preferred by law and not by contract;
4.2.3 No default under other Indebtedness
neither the Guarantor nor any of its Related Companies is (nor would with the giving of notice or lapse of time or the satisfaction of any other condition or any combination thereof be) in breach of or in default under any agreement relating to Indebtedness to which it is a party or by which it may be bound;
4.2.4 Information
the information, exhibits and reports furnished by the Guarantor to the Security Agent in connection with the negotiation and preparation of this Guarantee are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
4.2.5 No withholding Taxes
no Taxes are imposed by withholding or otherwise on any payment to be made by the Guarantor under this Guarantee and the other Security Documents or the Underlying Documents to which the Guarantor is a party or are imposed on or by virtue of the execution or delivery by the Guarantor of this Guarantee or any document or instrument to be executed or delivered under this Guarantee;
4.2.6 No Default
no Default has occurred and is continuing;
4.2.7 The Ship
the Ship will, on the date the Mortgage is registered, be:
(a) in the absolute ownership of the Guarantor who will, on and after such date, be the sole, legal and beneficial owner of the Ship;
(b) permanently registered through the offices of the relevant Registry as a ship under the laws and flag of the relevant Flag State;
(c) operationally seaworthy and in every way fit for service; and
(d) classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society;
4.2.8 Ship’s employment
(save as otherwise disclosed by the Guarantor and/or the Borrowers and accepted by the Agent) the Ship is not nor will, on or before the date the Mortgage is registered, be subject to any charter or contract or to any agreement to enter into any charter or contract which, if entered into after the date the Mortgage is registered, would have required the consent of the Security Agent and, on or
before the date the Mortgage is registered, there will not be any agreement or arrangement whereby the Earnings (as defined in the Mortgage) may be shared with any other person;
4.2.9 Freedom from Encumbrances
neither the Ship, nor its Earnings, Insurances, Requisition Compensation (as each such term is defined in the relevant Collateral Ship Security Documents) nor the account referred to in clause 5.3 nor any other properties or rights which are, or are to be, the subject of any of the Security Documents nor any part thereof will be, on the date when the Mortgage is registered, subject to any Encumbrance other than a Permitted Encumbrance;
4.2.10 Compliance with Environmental Laws and Environmental Approvals
except as may already have been disclosed by the Borrowers in writing to, and acknowledged in writing by, the Agent:
(a) the Guarantor and the other Relevant Parties and, to the best of the Guarantor’s knowledge and belief (having made due enquiry), their respective Environmental Affiliates have complied with the provisions of all Environmental Laws;
(b) the Guarantor and the other Relevant Parties, to the best of the Guarantor’s knowledge and belief (having made due enquiry), their respective Environmental Affiliates have obtained all Environmental Approvals and are in compliance with all such Environmental Approvals; and
(c) neither the Guarantor nor any other Relevant Party nor, to the best of the Guarantor’s knowledge and belief (having made due enquiry), any of their respective Environmental Affiliates have received notice of any Environmental Claim that the Guarantor or any other Relevant Party or any such Environmental Affiliate is not in compliance with any Environmental Law or any Environmental Approval;
4.2.11 No Environmental Claims
except as may already have been disclosed by the Guarantor in writing to, and acknowledged in writing by, the Agent, there is no Environmental Claim pending or, to the best of the Guarantor’s knowledge and belief, threatened against the Guarantor or the Ship or any other Relevant Party or any other Relevant Ship, to the best of the Guarantor’s knowledge and belief (having made due enquiry), any of their respective Environmental Affiliates;
4.2.12 No potential Environmental Claims
except as may already have been disclosed by the Guarantor in writing to, and acknowledged in writing by, the Agent, there has been no emission, spill, release or discharge of a Pollutant from the Ship or any other Relevant Ship owned by, managed or crewed or chartered by the Guarantor nor, to the best of the Guarantor’s knowledge and belief (having made due enquiry), from any Relevant Ship owned by, managed or crewed by or chartered to any other Relevant Party which could give rise to an Environmental Claim;
4.2.13 ISPS Code
on the date the Mortgage is registered, the Guarantor shall have a valid and current ISSC in respect of the Ship and the Ship shall be in compliance with the ISPS Code; and
4.2.14 DOC and SMC
on the date the Mortgage is registered, will procure that the Operator will have a DOC for itself and an SMC in respect of the Ship.
4.3 Repetition of representations and warranties
On and as of each day from the date of this Guarantee until the last day of the Security Period, the Guarantor shall be deemed to repeat the representations and warranties in clause 4.1 as if made with reference to the facts and circumstances existing on each such day.
5 Undertakings
5.1 General
The Guarantor undertakes with the Security Agent that, from the date of this Guarantee and at all times during the Security Period, it will:
5.1.1 Notice of default
promptly inform the Security Agent of any occurrence of which it becomes aware which might adversely affect its ability to perform its obligations under this Guarantee or any other Security Document or Underlying Document to which it is or is to be a party and, without limiting the generality of the foregoing, will inform the Security Agent of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Security Agent, confirm to the Security Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing;
5.1.2 Consents and licences
(a) without prejudice to clause 4.1, obtain or cause to be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all its obligations under this Guarantee or any other Security Document or Underlying Documents to which it is a party; and
(b) comply with the terms and conditions of all laws, regulations, agreements, licenses and concessions material to the carrying out of its business;
5.1.3 Pari passu
ensure that its obligations under this Guarantee shall, without prejudice to the provisions of clause 5.1.6, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
5.1.4 Delivery of reports
deliver to the Security Agent sufficient copies for all the Banks of every report, circular, notice or like document issued by the Guarantor to its shareholders or creditors generally;
5.1.5 Provision of other information
provide the Security Agent with such financial and other information concerning the Guarantor, the Ship, any Borrower, the other Security Parties and any other member of the Group and their respective affairs (including, without limitation, information about all major financial developments, new borrowings, the sale and purchase of vessels) as the Security Agent or any Bank (acting through the Security Agent) may from time to time reasonably require;
5.1.6 Obligations under Security Documents
duly and punctually perform each of the obligations expressed to be assumed by it under the Security Documents and the Underlying Documents to which it is a party;
5.1.7 Compliance with Code
and will procure that the Manager or any Operator will, comply with and ensure that the Ship and the Manager or any Operator at all times comply with the requirements of the Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period;
5.1.8 Withdrawal of DOC and SMC
and will procure that the Manager or any Operator will, immediately inform the Security Agent if there is any threatened or actual withdrawal of its Operator’s DOC or the SMC in respect of the Ship;
5.1.9 Issuance of DOC and SMC
and will procure that the Manager or any Operator will, promptly inform the Security Agent upon the issuance to any Operator of a DOC and to the Ship of an SMC or the receipt by the Guarantor, the Manager or any Operator of notification that its application for the same has been refused;
5.1.10 ISPS Code compliance
and will procure that the Manager or any Operator will:
(a) from the date the Mortgage is registered and at all times thereafter, maintain a valid and current ISSC in respect of the Ship;
(b) immediately notify the Security Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of the Ship; and
(c) procure that, from the date the Mortgage is registered and at all times thereafter, the Ship complies with the ISPS Code; and
5.1.11 “Know your customer” requirements
the Guarantor shall produce such documents and evidence as the Security Agent shall from time to time require relating to the Agent’s and/or Security Agent’s verification of identity and knowledge of its customers based on applicable law and regulations and the Agent’s and/or Security Agent’s own internal guidelines from time to time.
5.2 Negative undertakings
The Guarantor undertakes with the Security Agent that, from the date of this Guarantee and at all times during the Security Period, the Guarantor will not, without the prior written consent of the Security Agent acting on the instructions of the Majority Banks:
5.2.1 Negative pledge
permit any Encumbrance (other than a Permitted Encumbrance) by the Guarantor to subsist, arise or be created or extended over all or any part of its present or future undertakings, assets, rights or revenues to secure or prefer any present or future Indebtedness or other liabilities or obligations of the Guarantor or any other person;
5.2.2 No merger
merge or consolidate with any other company or person or enter into any demerger, amalgamation, or any corporate reconstruction or redomiciliation of any kind whatsoever;
5.2.3 Disposals
sell, transfer, lend or otherwise dispose of or cease to exercise direct control over any part (being either alone or when aggregated with all other disposals falling to be taken into account pursuant to this clause 5.2.3 material in the opinion of the Security Agent in relation to the undertaking, assets, rights and revenues of the Guarantor or, as the case may be, the relevant Subsidiary taken as a whole) of its present or future undertaking, assets, rights or revenues whether by one or a series of transactions related or not;
5.2.4 Other business
undertake any business other than the ownership and operation of the Ship and the chartering of the Ship to third parties;
5.2.5 Acquisitions
acquire any further assets other than the Ship and rights arising under contracts entered into by or on behalf of the Guarantor in the ordinary cause of its business of owning, operating and chartering the Ship;
5.2.6 Other obligations
incur any obligations except for obligations arising under the Collateral Ship Security Documents in respect of the Ship or the other Security Documents, the First Security Documents, the Second Security Document or the Underlying Documents to which it is a party or contracts entered into in the ordinary course of its business of owning, operating and chartering the Ship;
5.2.7 No borrowing
incur any Borrowed Money except for Borrowed Money pursuant to the Security Documents or the First Loan Agreement and/or the First Master Swap Agreement;
5.2.8 Repayment of borrowings
repay the principal of, or pay interest on or any other sum in connection with any of its Borrowed Money except for Borrowed Money pursuant to the Security Documents or the First Loan Agreement or the First Master Swap Agreement;
5.2.9 Guarantees
issue any guarantees or indemnities or otherwise become directly or contingently liable for the obligations of any person, firm or corporation except pursuant to the Security Documents or the First Security Documents or the Second Security Documents and except for guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war risks association with which the Ship is entered, guarantees required to procure the release of the Ship from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of the Ship;
5.2.10 Loans
make any loans or grant any credit (save for normal trade credit in the ordinary course of business) to any person or agree to do so;
5.2.11 Sureties
permit any Indebtedness of the Guarantor to any person (other than the Secured Creditors pursuant to the Security Documents or the First Security Documents or the Second Security Documents) to be guaranteed by any person (save for guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war risks association with which its Ship is entered, guarantees required to procure the release of the Ship from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of the Ship);
5.2.12 Share capital and distribution
purchase or otherwise acquire for value any shares of its capital or distribute any of its present or future assets, undertaking rights or revenues to any of its shareholders Provided however that the Guarantor may declare or pay cash dividends to its shareholders at any time if no Event of Default shall have occurred and is continuing at the time of declaration or payment of such dividends, or would occur as a result of the declaration or payment of such dividends;
5.2.13 Subsidiaries
form or acquire any Subsidiaries;
5.2.14 Shareholdings
change, cause or permit any change in, the legal and/or ultimate beneficial ownership of any of the shares in the Guarantor from that specified in clause 4.1.10 and/or clause 7.1.10 of the Agreement;
5.2.15 Constitutional documents
permit, cause or agree to any amendment or variation of its constitutional documents or any change of its corporate name;
5.2.16 Manager
appoint any Manager of the Ship other than the Manager or terminate or amend the terms of the Management Agreement relevant to the Ship; or
5.2.17 FATCA
become a FATCA FFI or a US Tax Obligor.
5.3 Earnings
The Guarantor undertakes with the Security Agent that it will procure that all moneys payable to the Guarantor in respect of the Earnings shall, unless and until the Security Agent directs to the contrary pursuant to clause 2.1.1 of the General Assignment, be paid to an account of a member of the Group held with the Account Bank as the Security Agent shall have approved previously.
6 Set-off
6.1 Set-off
The Guarantor authorises the Security Agent at any time and without notice to the Guarantor, to apply any credit balance to which the Guarantor is then entitled on any account of the Guarantor with the Security Agent at any of its branches in or towards satisfaction of any sum then due and payable from the Guarantor to the Security Agent under this Guarantee. For this purpose the Security Agent is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application. The Security Agent shall not be obliged to exercise any right given to it by this clause 6.1. The Security Agent shall notify the Guarantor and the Secured Creditors forthwith upon the exercise or purported exercise of any right of set-off giving full details in relation thereto.
7 Benefit of this Guarantee
7.1 Benefit and burden
This Guarantee shall be binding upon the Guarantor and its successors in title and shall enure for the benefit of the Security Agent and its successors in title, assignees and replacements. The Guarantor expressly acknowledges and accepts the provisions of clause 16 of the Agreement and agrees that any person who replaces the Security Agent in accordance with such clause shall be entitled to the benefit of this Guarantee.
7.2 Changes in constitution or reorganisation of Creditors
For the avoidance of doubt and without prejudice to the provisions of clause 7.1, this Guarantee shall remain binding on the Guarantor notwithstanding any change in the constitution of the Security Agent or any of the Secured Creditors or their absorption in, or amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganisation of any kind, to the intent that this Guarantee shall remain valid and effective in all respects in favour of any assignee, transferee or other successor in title or replacement of the Security Agent in the same manner as if such assignee, transferee or other successor in title had been named in this Guarantee as a party instead of, or in addition to, the Security Agent.
7.3 No assignment by Guarantor
The Guarantor may not assign or transfer any of its rights or obligations under this Guarantee.
7.4 Disclosure of information
The Security Agent may, without the consent of the Guarantor, disclose to a prospective Transferee or to any other person who may propose entering into contractual relations with a Bank in relation to the Agreement such information about the Guarantor as the Security Agent shall consider appropriate.
8 Notices and other matters
8.1 Notices
The provisions of clause 17.1 of the Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Guarantee as if references to the “Borrowers or any of them” and “this Agreement” were references to the Guarantor and this Guarantee, respectively.
8.2 No implied waivers; remedies cumulative
No failure or delay on the part of the Security Agent, to exercise any power, right or remedy under this Guarantee shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any power, right or remedy under this Guarantee preclude any other or further exercise thereof or the exercise of any other power, right or remedy. The remedies provided in this Guarantee are cumulative and are not exclusive of any remedies provided by law.
8.3 English translations
All certificates, instruments and other documents to be delivered under or supplied in connection with this Guarantee shall be in the English language or shall be accompanied by a certified English translation upon which the Security Agent shall be entitled to rely.
8.4 Other guarantors
The Guarantor agrees to be bound by this Guarantee notwithstanding that any other person intended to execute or to be bound by any other guarantee or assurance under or pursuant to the Agreement may not do so or may not be effectually bound and notwithstanding that such other guarantee or assurance may be determined or be or become invalid or unenforceable against any other person, whether or not the deficiency is known to the Security Agent or any of the Secured Creditors.
8.5 Expenses
The Guarantor agrees to reimburse the Security Agent on demand for all legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Security Agent in relation to the enforcement of this Guarantee against the Guarantor.
8.6 Partial invalidity
If, at any time, any provision of this Guarantee is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision in any other respect or under the law of any other jurisdiction will be affected or impaired in any way.
8.7 Miscellaneous
This Guarantee contains the entire agreement of the parties and its provisions supersede any and all other prior correspondence and oral negotiation by the parties in respect of the matters regulated by this Guarantee.
9 Law and jurisdiction
9.1 Law
This Guarantee and any non-contractual obligations in connection with this Guarantee are governed by and shall be construed in accordance with English law.
9.2 Submission to jurisdiction
The Guarantor agrees for the benefit of the Security Agent that any legal action or proceedings arising out of or in connection with this Guarantee and any non-contractual obligations in connection with this Guarantee against the Guarantor or any of its assets may be brought in the English courts, irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Guarantor in the courts of any other competent jurisdiction, nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The Guarantor further agrees that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Guarantor may have against the Security Agent arising out of or in connection with this Guarantee and any non-contractual obligations in connection with this Guarantee.
9.3 Contracts (Rights of Third Parties) Act 1999
No term of this Guarantee is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Guarantee.
IN WITNESS whereof the parties to this Guarantee have caused this Guarantee to be duly executed as a deed on the date first above written.
EXECUTED as a DEED | ) |
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[Q A MARITIME LTD.] | ) | Attorney-in-fact | ||
[Q IOANARI SHIPPING LTD] | ) |
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EXECUTED as a DEED | ) |
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ABN AMRO BANK N.V. | ) | Attorney-in-fact | ||
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Private & Confidential
Dated August 2013
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DEED OF ASSIGNMENT
in respect of Hull No. [S1195] [S1194] at
Sungdong Shipbuilding & Marine Engineering
Co., Ltd.
Contents
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1 | Definitions | 1 |
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2 | Assignment | 3 |
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3 | Undertakings | 4 |
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4 | Continuing security and other matters | 6 |
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5 | Powers of Security Agent | 7 |
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6 | Application of moneys | 8 |
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7 | Remedies cumulative and other provisions | 9 |
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8 | Costs and indemnity | 9 |
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9 | Attorney | 10 |
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10 | Further assurance | 11 |
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11 | Assignment | 11 |
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12 | Notices | 11 |
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13 | Law and jurisdiction | 11 |
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Schedule 1 Form of notice of assignment of Contract and acknowledgement | 13 | |
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Schedule 2 Form of notice of assignment of Refund Guarantee and acknowledgement | 16 | |
THIS DEED OF ASSIGNMENT is made the day of August 2013 BETWEEN:
(1) Q [AMREEN] [ANASTASIA] SHIPPING LTD. a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the “Buyer”); and
(2) ABN AMRO BANK N.V., a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting for the purposes of this Deed through its office at Coolsingel 93, 3012 AE Rotterdam as security agent and trustee for the Secured Creditors (the “Security Agent”).
WHEREAS:
(A) the Buyer has entered into a shipbuilding contract dated August 2013 as amended and supplemented from time to time (the “Contract”) with Sungdong Shipbuilding & Marine Engineering Co., Ltd. of 1609-2, Hwang-li, Gwangdomyeon, Tongyong-si, Gyeongnam, Korea (the “Builder”), for the construction and sale by the Builder and the purchase by the Buyer of a 180,000 DWT bulk carrier to be known during construction as Hull No. [S1195] [S1194] (the “Ship”);
(B) by a loan agreement dated August 2013 (the “Loan Agreement”) made between the Buyer and [Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd.] [Q Amreen Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd.] (therein and herein together referred to as the “Borrowers”) as joint and several borrowers and (2) ABN AMRO Bank N.V., as arranger, agent (in such capacity the “Agent”), security agent and account bank and (3) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”; and, together with the Agent, the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, upon the terms and conditions therein contained, the principal sum of up to $31,040,000;
(C) pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Security Agent (referred to in the Loan Agreement as the “Security Agent”) as its security agent and trustee and pursuant to a deed of trust dated August 2013 executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Deed for and on behalf of itself and the Secured Creditors; and
(D) this Deed is the [Q Amreen] [Q Anastasia] Pre-delivery Security Assignment referred to in the Loan Agreement and is supplemental to the Loan Agreement.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED as follows:
1 Definitions
1.1 Defined expressions
Words and expressions defined in the Loan Agreement shall, unless otherwise defined in this Deed, or the context otherwise requires, have the same meanings when used in this Deed.
1.2 Definitions
In this Deed, unless the context otherwise requires:
“Agent” includes its successors in title, assignees and/or its replacements;
“Assigned Documents” means:
(a) the Contract; and
(b) the Refund Guarantee;
“Assigned Property” means all of the Buyer’s rights, title, interest and all its benefits present and future in and under the Assigned Documents and in all moneys payable by the Builder or the Refund Guarantor to the Buyer thereunder including, without prejudice to the generality of the foregoing, all claims for damages in respect of any breach by the Builder of the Contract or by the Refund Guarantor of the Refund Guarantee and all the rights of the Buyer to take delivery of and title to the Ship under the Contract;
“Banks” includes their respective successors in title and/or their respective Transferees;
“Builder” means Sungdong Shipbuilding & Marine Engineering Co., Ltd of 1609-2, Hwang-li, Gwangdomyeon, Tongyong-si, Gyeongnam, Korea and includes its successors in title;
“Buyer” includes the successors in title of the Buyer;
“Contract” means the shipsales contract referred to in recital (A) hereto;
“Expenses” means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Security Agent) of:
(a) all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature (including without limitation Taxes, repair costs, registration fees, insurance premiums, commission in connection with any assignment of the Assigned Property or the sale of the Ship, costs of supervision of construction of the Ship and costs of safeguarding, maintaining and insuring the Ship in the event of her sale after delivery under the Contract) suffered, incurred or paid by the Security Agent or any Secured Creditor in connection with the exercise of the powers referred to in or granted by the Loan Agreement or this Deed or any of the other Security Documents or otherwise payable by the Buyer in accordance with clause 8; and
(b) interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Security Agent or any Secured Creditor until the date of receipt or recovery thereof (whether before or after judgment) at a rate per annum calculated in accordance with clause 3.4 of the Loan Agreement (as conclusively certified by the Agent at the request of the Security Agent);
“Loan Agreement” means the loan agreement referred to in recital (B) hereto;
“Outstanding Indebtedness” means all sums actually or contingently owing to the Secured Creditors under the Loan Agreement, all Expenses and all other sums payable by the Borrowers or any of them to the Secured Creditors or any of them, whether actually or contingently, under or pursuant to the Loan Agreement and the other Security Documents or any of them;
“Refund Guarantee” means the letter guarantee dated 13 May 2013 with number M0902-305-LGO09[22][15] issued by the Refund Guarantor in favour of the Buyer in respect of certain of the Builder’s obligations under the Contract or any agreement supplemental to the Contract and any extensions, renewals or replacements thereto or thereof;
“Refund Guarantor” means The Export-Import Bank of Korea of 38 Eunhaeng-Ro (16-1, Yeouido-Dong), Yeongdeunopo-gu, Seoul 150-996 and includes its successors in title: and
“Security Agent” includes the successors in title and replacements of the Security Agent.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Deed.
1.4 Construction of certain terms
Clause 1.4 of the Loan Agreement shall apply to this Deed as if set out herein.
1.5 Conflict with Loan Agreement
This Deed shall be read together with the Loan Agreement but in case of any conflict between the two instruments the provisions of the Loan Agreement shall prevail.
2 Assignment
2.1 Assignment
By way of security for payment of the Outstanding Indebtedness, the Buyer with full title guarantee hereby assigns and agrees to assign to the Security Agent the Assigned Property provided however that:
2.1.1 all moneys payable to the Buyer comprised in the Assigned Property (other than moneys described in clauses 6.1.1, 6.1.2 6.1.3, 6.1.4, 6.1.5 or 6.1.6 which shall in all circumstances be payable to the Security Agent) shall be payable to such account of the Buyer as the Security Agent shall from time to time agree and shall be at the disposal of the Buyer until such time as a Default shall occur and the Security Agent shall direct to the contrary whereupon the Buyer shall forthwith, and the Security Agent may at any time thereafter, instruct the persons from whom such moneys are then payable to pay the same to the Security Agent or as it may direct and any such moneys then in the hands of the Buyer’s agents shall be deemed to have been received by them for the use and on behalf of the Security Agent and the Secured Creditors;
2.1.2 unless and until a Default shall occur and the Security Agent shall have given notice to the Buyer that the Security Agent intends to enforce its rights under this Deed, the Buyer shall be entitled to exercise all its rights under the Assigned Documents (subject as provided in this Deed) in all respects as if the foregoing assignment had not been made;
2.1.3 the Security Agent shall be under no obligation to implement any of the Assigned Documents unless the Security Agent sees fit to do so;
2.1.4 if the Security Agent sees fit to implement any of the Assigned Documents and if the Security Agent makes any payments in respect of or relating to the Contract (including any payments made by the Security Agent in addition to any such amount or amounts as the Security Agent is obliged to pay pursuant to the terms of the Loan Agreement) all moneys so expended by the Security Agent for the purpose aforesaid shall on demand be repaid by the Buyer to the Security Agent together with interest thereon (as well after as before judgment) at the rate referred to in clause 3.4 of the Loan Agreement from the time of such expenditure until payment (such interest to accrue due from day to day and to be calculated on the basis of actual days elapsed and a year of 360 days) and until so repaid shall be charged on the property hereby assigned; and
2.1.5 upon the payment and discharge in full to the satisfaction of the Security Agent of the Outstanding Indebtedness, the Security Agent shall, at the request and cost of the Buyer, re-assign the Assigned Property to the Buyer or as it may direct.
2.2 Notice of assignment
The Buyer hereby covenants and undertakes with the Security Agent:
2.2.1 forthwith after execution and delivery of this Deed, to give written notice to the Builder and the Refund Guarantor, in each case in the form of the notices set out in schedules 1 and 2, respectively, and in each such case, to procure that the Builder and the Refund Guarantor signs and delivers to the Security Agent the form of acknowledgement attached to the relevant notice forthwith by fax copy, with the original to follow no later than ten (10) days thereafter; and
2.2.2 promptly on being requested to do so by the Security Agent, the Buyer shall give written notice in such form as the Security Agent shall require consistent with this clause 2 to anyone from whom any part of the Assigned Property is or may be due and/or having an interest in the Ship and provide the Security Agent with as many of such notices signed by the Buyer as the Security Agent may require.
3 Undertakings
3.1 Positive undertakings
The Buyer hereby undertakes and agrees with the Security Agent that throughout the Security Period it will:
3.1.1 Document of title to the Ship
give irrevocable instructions to the Builder to hold the Ship and the builder’s certificate and any other document of title to the Ship to the order and at the disposal of the Security Agent and ensure that the Builder complies with such instructions;
3.1.2 Performance of Contract
duly and punctually observe and perform all the conditions and obligations imposed on it by the Contract;
3.1.3 Performance by Builder
ensure that the Builder observes and performs all conditions and obligations imposed on the Builder by the Contract and take all steps within its power to ensure that the Builder proceeds with the construction of the Ship with due diligence and despatch;
3.1.4 Progress of construction
upon the request of the Security Agent, advise the Security Agent of the progress of construction of the Ship and supply the Security Agent with such other information as the Security Agent may require and the Buyer may have regarding the Ship and the materials allocated or appropriated to the Ship, the Assigned Documents, the Assigned Property or otherwise relating to the construction of the Ship;
3.1.5 Arbitration under Contract
in the event that any party to the Contract resorts to arbitration as provided in article XIII of the Contract, immediately notify the Security Agent in writing that such arbitration has been initiated, advise the Security Agent in writing of the identity of the appointed arbitrators and upon termination of the arbitration notify the Security Agent in writing to that effect and supply the
Security Agent with a copy of the arbitration award and, if not in English, a certified English translation thereof;
3.1.6 Enforcement of Buyer’s rights
do or permit to be done each and every act or thing which the Security Agent may from time to time require to be done for the purpose of enforcing the Buyer’s rights under or pursuant to the Assigned Documents and allow the name of the Buyer to be used as and when required by the Security Agent for that purpose; and
3.1.7 Notification of rejection of Ship etc
notify the Security Agent immediately if the Buyer (with the prior written consent of the Security Agent given pursuant to clause 3.2) rejects the Ship or if the Builder or the Refund Guarantor or (with the prior written consent of the Security Agent given pursuant to clause 3.2) the Buyer cancels, rescinds, repudiates or otherwise terminates any of the Assigned Documents or purports to do so or if the Ship shall become a Total Loss or partial loss or shall be damaged.
3.2 Negative undertakings
The Buyer hereby further undertakes and agrees with the Security Agent that throughout the Security Period it will not without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose):
3.2.1 Disposals
sell, assign or otherwise dispose of, or create or grant or permit to subsist any Encumbrance over, of or relating to, any of the Assigned Property other than this Deed;
3.2.2 Sale
sell or agree to sell the Ship or any share or interest therein;
3.2.3 Creation of Encumbrances
create or agree to create or permit to subsist any Encumbrance over the Ship (or any share or interest therein) other than the Encumbrances created or to be created pursuant to this Deed or the Loan Agreement;
3.2.4 Variation of Refund Guarantee; releases and waivers of Refund Guarantee
agree to any variation of the Refund Guarantee or release the Refund Guarantor from any of its obligations thereunder or waive any breach of the Refund Guarantor’s obligations thereunder or consent to any such act or omission of the Refund Guarantor as would otherwise constitute such breach;
3.2.5 Variations of Contract; releases and waivers of Contract
agree to any variation of the Contract or any substantial variation of the specification of the Ship (and for the purpose of this paragraph any extras, additions or alterations which the Buyer may desire to effect in the building of the Ship shall be deemed to constitute a substantial change if the cost thereof (which shall in every case be agreed in writing between the Buyer and the Builder before the work is put in hand irrespective of whether the prior consent thereto of the Security Agent be required hereunder) or if the aggregate cost of the proposed work together with the cost of any work already ordered will alter the fixed price of the Ship by an amount greater than five
per cent (5%) of the said fixed price) or release the Builder from any of its obligations under the Contract or waive any breach of the Builder’s obligations thereunder or consent to any such act or omission of the Builder as would otherwise constitute such breach;
3.2.6 Delays
without prejudice to sub-paragraph 3.2.6, agree to any variation of the Contract or the specification of the Ship which would delay the time for delivery of the Ship;
3.2.7 Assignment of Earnings
assign or agree to assign otherwise than to the Security Agent the future earnings of the Ship or any part thereof; or
3.2.8 Rejection and cancellation
either exercise or fail to exercise any right which the Buyer may have to reject the Ship or cancel or rescind or otherwise terminate the Contract provided always that any such rejection of the Ship or cancellation, rescission or other termination of the Contract by the Buyer after such consent is given shall be without responsibility on the part of the Security Agent who shall be under no liability whatsoever to the extent that such rejection, rescission, cancellation or termination is thereafter adjudged to constitute a repudiation or other breach of the Contract by the Buyer.
4 Continuing security and other matters
4.1 It is declared and agreed that:
4.1.1 Continuing security
the security created by this Deed shall be held by the Security Agent as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions in the Security Documents contained, express or implied and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Buyer or any other person who may be liable to the Security Agent in respect of the Outstanding Indebtedness or any part thereof and the Security Agent or the Secured Creditors or any of them);
4.1.2 Security additional
the security so created shall be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Security Agent without prior recourse to, the security created by any of the other Security Documents or by any deposit of documents, or any guarantee, lien, bill, note, mortgage or other security now or hereafter held by the Security Agent or any Secured Creditor or any right or remedy of the Security Agent or any Secured Creditor thereunder and shall not in any way be prejudiced or affected thereby or by the invalidity or unenforceability thereof, or by the Security Agent or any Secured Creditor releasing, modifying or refraining from perfecting or enforcing any of the same, or granting time or indulgence or compounding with any person liable;
4.1.3 Rights additional
all the rights, remedies and powers vested in the Security Agent hereunder shall be an addition to and not a limitation of any and every other right, power or remedy vested in the Security Agent or any Secured Creditor under the Loan Agreement, this Deed, the other Security Documents or at
law and that all the powers so vested in the Secured Creditors and/or the Security Agent may be exercised from time to time and as often as they may deem expedient;
4.1.4 No enquiry
the Security Agent shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Deed or to make any claim or take any action to collect any moneys hereby assigned or to enforce any rights or benefits hereby assigned to the Security Agent or to which the Security Agent may at any time be entitled under this Deed; and
4.1.5 No liability
the Buyer shall remain liable to perform all the obligations assumed by it in relation to the Assigned Property and the Security Agent shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Buyer to perform its obligations in respect thereof.
5 Powers of Security Agent
5.1 Protective action
The Security Agent shall, without prejudice to its other rights, powers and remedies hereunder or under any of the other Security Documents, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or maintaining the security created by this Deed and all Expenses attributable thereto shall be payable by the Buyer on demand.
5.2 Remedy of defaults
Without prejudice to the provisions of clause 5.1 or the generality of the powers and remedies vested in the Security Agent by virtue of the assignment herein contained, upon the happening of any Event of Default (whether or not the Agent shall have given any notice in accordance with the provisions of clause 10.2 of the Loan Agreement) the Security Agent shall become forthwith entitled, as and when it may see fit, to exercise in relation to the Assigned Property or any part thereof all or any of the rights, powers and remedies possessed by it as assignee of the Assigned Property (whether at law, by virtue of this Deed or otherwise) and in particular (without limiting the generality of the foregoing):
5.2.1 to implement the Contract and take delivery and possession of the Ship as the Security Agent may see fit;
5.2.2 to agree with the Builder to determine the Contract on such terms and conditions as the Security Agent and the Builder may mutually agree;
5.2.3 to assign all the Assigned Property or to sell the Ship on or after her delivery under the Contract or otherwise and upon such terms (including free of or subject to any charter) as the Security Agent shall in its absolute discretion determine and with power, where the Security Agent purchases the Ship and/or takes an assignment of the Assigned Property, to make payment of the price by making an equivalent reduction in the amount of the Outstanding Indebtedness in the manner referred to in clause 6.1;
5.2.4 to undertake the further supervision of the construction of the Ship;
5.2.5 to collect, recover, compromise and give a good discharge for all claims then outstanding or thereafter arising in respect of the Assigned Property or any part thereof and moneys payable to
the Buyer or any damages recoverable by the Buyer under the Assigned Documents in connection therewith and to take over or institute (if necessary using the name of the Buyer) all such proceedings in connection therewith as the Security Agent in its absolute discretion thinks fit;
5.2.6 to implement the Refund Guarantee and to agree with the Refund Guarantor any compromise of the obligations of the Refund Guarantor or grant any release or discharge of the Refund Guarantor;
5.2.7 following delivery of the Ship to manage, insure, maintain and repair the Ship and to employ, sail or lay up the Ship in such manner and for such period as the Security Agent, in its absolute discretion, deems expedient, accounting only for net profits arising from any such employment; and
5.2.8 to recover from the Buyer on demand all Expenses incurred or paid by the Security Agent in connection with the exercise of the powers (or any of them) referred to in this clause 5.2.
5.3 Event of Default
At any time after the happening of any Event of Default (whether or not the Security Agent shall have given any notice in accordance with the provisions of clause 10.2 of the Loan Agreement) the Security Agent shall be entitled to exercise its powers of assignment and sale hereunder in such manner and at such times as the Security Agent in its absolute discretion may determine and the Security Agent shall not in any circumstances be answerable for any loss occasioned by such sale or resulting from postponement thereof.
5.4 No enquiry by purchaser
Upon any assignment or sale of the Contract and/or the Ship or any share therein or part thereof pursuant to this Deed the purchaser shall not be bound to see or enquire whether the Security Agents power of assignment or sale has arisen and the assignment or sale shall be deemed to be within the power of the Security Agent and the receipt of the Security Agent for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor.
5.5 Security Agent’s rights
The Buyer covenants and undertakes with the Security Agent to do or permit to be done each and every act or thing which the Security Agent may from time to time require to be done for the purpose of enforcing the Security Agent’s rights under this Deed and to allow its name to be used as and when required by the Security Agent for that purpose.
6 Application of moneys
6.1 Application
All moneys received by the Security Agent in respect of:
6.1.1 any payment under the Refund Guarantee;
6.1.2 any payment from the Builder under the Contract (including sums arising from any arbitration award);
6.1.3 the determination, cancellation or rescission or other termination of the Contract;
6.1.4 the assignment, sale or other disposal of the Assigned Property or the Ship on enforcement of its rights hereunder;
6.1.5 (if the Ship is delivered to the Security Agent (or its nominee)) freights and other earnings of the Ship until the sale or loss of the Ship after such delivery;
6.1.6 such collections, recoveries or compromises as are referred to in clause 5.2.5; or
6.1.7 otherwise in respect of the Assigned Property, shall be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 13.1 of the Loan Agreement.
6.2 Shortfall
In the event that on application in accordance with clause 6.1, the moneys so applied are insufficient to pay in full the whole of the Outstanding Indebtedness, the Security Agent and/or the Secured Creditors shall be entitled to collect the shortfall from the Buyer or any other person liable for the time being therefor.
7 Remedies cumulative and other provisions
7.1 No waiver
No failure or delay on the part of the Security Agent to exercise any right, power or remedy vested in it under the Security Documents or any of them shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Security Agent to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy. Nor shall the giving by the Security Agent of any consent to any act which by the terms of this Deed requires such consent prejudice the right of the Security Agent to withhold or give consent to the doing of any other similar act. The remedies provided in the Security Documents are cumulative and are not exclusive of any remedies provided by law.
7.2 Delegation
The Security Agent shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by this Deed (including the power vested in it by virtue of clause 9) in such manner, upon such terms and to such persons as the Security Agent in its absolute discretion may think fit.
7.3 Security Agent as assignee
The Security Agent shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as assignee of the Assigned Property (whether at law, under this Deed or otherwise).
8 Costs and indemnity
8.1 Costs
The Buyer shall pay to the Security Agent on demand on a full indemnity basis all expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges (together with any value added tax or similar tax payable in respect thereof)), incurred by the Security Agent in
connection with the enforcement of, or preservation of any rights under, this Deed or otherwise in respect of the Outstanding Indebtedness and the security therefor or in connection with the preparation, completion, execution or registration of this Deed.
8.2 Indemnity
The Buyer hereby agrees and undertakes to indemnify the Security Agent against all losses, actions, claims, expenses, demands, obligations and liabilities whatsoever and whensoever arising which may now or hereafter be incurred by or threatened or brought against it, or incurred by any manager, agent, officer or employee for whose liability, act or omission the Security Agent may be answerable, in respect of, in relation to or in connection with, anything done or omitted in the exercise of, or purported exercise of, the powers contained in this Deed or the implementation of the Assigned Documents, or in respect of the design, construction, equipment or use or operation of the Ship or otherwise in connection herewith or with any part of the Assigned Property or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in any of the Security Documents.
9 Attorney
9.1 Power of attorney
By way of security, the Buyer hereby irrevocably appoints the Security Agent to be its attorney generally for and in the name and on behalf of the Buyer, and as the act and deed or otherwise of the Buyer to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things including, without prejudice to the generality of the foregoing, to ask, require, demand (including, but without limitation, to make demands under the Refund Guarantee), receive, compound and give acquittance for any and all moneys and claims for moneys due and to become due under or arising out of any of the Assigned Documents including all amounts already paid by the Buyer to the Builder pursuant to the Contract, to endorse any cheques or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which to the Security Agent may seem to be necessary or advisable, to execute and deliver a bill of sale of the Ship and generally to do any and all such things as the Buyer itself could do in relation to the property hereby assigned which may be required for the full exercise of all or any of the rights, powers or remedies conferred hereby or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power hereby conferred shall be a general power of attorney under the Powers of Attorney Act 1971, and the Buyer ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Security Agent may execute or do pursuant thereto. Provided always that such power shall not be exercisable by or on behalf of the Security Agent until the happening of any Default.
9.2 Dealings with attorneys
The exercise of such power by or on behalf of the Security Agent shall not put any person dealing with the Security Agent upon any enquiry as to whether any Default has happened, nor shall such person be in any way affected by notice that no such event has happened, and the exercise by the Security Agent of such power shall be conclusive evidence of its right to exercise the same.
9.3 Filings
The Buyer hereby irrevocably appoints the Security Agent to be its attorney in the name and on behalf of the Buyer and as the act and deed or otherwise of the Buyer to agree the form of and to do and execute all deeds, instruments, acts and things to file, record, register or enrol this Deed which the Security Agent may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence hereof.
10 Further assurance
The Buyer hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Security Agent may be necessary or desirable for the purpose of more effectually assigning the Assigned Property or perfecting the security constituted or intended to be constituted by this Deed.
11 Assignment
The provisions of clause 15 of the Loan Agreement shall apply mutatis mutandis in respect of any assignment of rights or transfer of obligations under this Deed and the rights of each of the Buyer and the Security Agent to effect any assignment of rights or transfer of obligations under this Deed.
12 Notices
The provisions of clauses 17.1 and 17.3 of the Loan Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Deed (save that references therein to the “Borrowers or any of them” and to “this Agreement” shall be construed as referring for the purposes of this Deed to the Buyer and this Deed, respectively).
13 Law and jurisdiction
13.1 Law
This Deed and any non-contractual obligations connected with this Deed are governed by and shall be construed in accordance with English law.
13.2 Submission to jurisdiction
For the benefit of the Security Agent, the Buyer irrevocably agrees that any legal action or proceedings arising out of or in connection with this Deed (including any non-contractual obligations connected with this Deed) against the Buyer or any of its assets may be brought in the English courts, or in the courts of any other jurisdiction chosen by the Security Agent, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Deed. The Buyer irrevocably and unconditionally submits to the jurisdiction of such courts, and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive, for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Buyer in any other court of competent jurisdiction nor shall the taking of proceedings by the Security Agent in any one or more jurisdictions preclude the taking of proceedings by the Security Agent in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Buyer may have against the Security Agent arising out of or in connection with this Deed (including any non-contractual obligations connected with this Deed).
13.3 Contracts (Rights of Third Parties) Act 1999
No term of this Deed is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Deed.
IN WITNESS whereof this Deed has been duly executed by way of deed the day and year first above written.
Schedule 1
Form of notice of assignment of Contract and acknowledgement
To: Sungdong Shipbuilding & Marine Engineering Co., Ltd.
1609-2
Hwang-li
Gwangdomyeon
Tongyong-si
Gyeongnam
Korea
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Dear Sirs
Hull No. [S1195] [S1194] (the “Ship”)
We refer to the shipbuilding contract dated [·] 2013 as the same may be amended and supplemented from time to time (the “Contract”) made between (a) us, Q [Amreen] [Anastasia] Shipping Ltd. (the “Buyer”) and (b) Sungdong Shipbuilding & Marine Engineering Co., Ltd. (the “Builder”) and relating to the construction and sale by the Builder and the purchase by the Buyer, of the Ship.
NOW WE HEREBY GIVE YOU NOTICE:
1 that by a deed of assignment (the “Assignment”) dated [·] 2013 and made between the Buyer and ABN AMRO Bank N.V. acting for itself and as security agent and trustee for certain other banks and financial institutions (the “Security Agent”), a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, the Buyer has assigned to the Security Agent all its beneficial interests and all its benefits, right and title in, to and under the Contract but the Buyer continues to be responsible to the Builder for performance of its obligations thereunder;
2 that the Builder is irrevocably authorised and instructed:
(a) to hold the Ship to the order and at the disposal of the Security Agent (subject only to any lien of the Builder as builder under the Contract);
(b) to hold the builder’s certificate and any other document of title to the Ship to the order and at the disposal of the Security Agent (subject only to any lien of the Builder as builder under the Contract); and
(c) to pay to the Security Agent or to its order all sums which the Builder may become due to pay to the Buyer under the Contract (including sums arising from an arbitration award); and
3 that the Assignment includes provisions that:
(a) the Buyer will not (without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose)):
(i) agree to any variation of the Contract (which, for the avoidance of doubt, includes any substantial in the opinion of the Security Agent variation of the specification of the Ship); or
(ii) either exercise or fail to exercise any right which the Buyer may have to reject the Ship or cancel or rescind or otherwise terminate the Contract; and
(b) the Buyer shall remain liable to perform all its obligations under the Contract and the Security Agent shall be under no obligation of any kind in respect thereof.
This letter does not of course affect the right of the Builder to be paid by the Buyer for alterations, additions, extra work and materials required or directed by the Buyer in accordance with the terms of the Contract prior to such notice being given to the Builder and the Buyer by the Security Agent.
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above by signing the enclosed acknowledgement and return it directly to the Security Agent at the address shown, with a copy to us.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
Yours faithfully |
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Q [AMREEN] [ANASTASIA] SHIPPING LTD. |
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Acknowledgement and undertaking
To: ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Netherlands
We acknowledge notice of the fact that Q [Amreen] [Anastasia] Shipping Ltd. (the “Buyer”) has by a deed of assignment (the “Assignment”) dated [·] 2013 assigned to you all its beneficial interest and all its benefits, right and title in, to and under the shipbuilding contract dated [·] 2013 as the same may be amended and supplemented from time to time (the “Contract”) made between ourselves, Sungdong Shipbuilding & Marine Engineering Co., Ltd. (the “Builder”) and the Buyer, for the construction and sale by the Builder and the purchase by the Buyer of the Builder’s Hull No. [S1195] [S1194] (the “Ship”) but that, until such time as you may give notice to the contrary to each of us, the Buyer may continue to superintend the building of the Ship and the Builder’s right to be paid by the Buyer for alterations, additions, extra work and materials required or directed by the Buyer in accordance with the terms of the Contract prior to such notice being given by you, shall not be affected.
In accordance with authority and instructions given to us by the Buyer which cannot be revoked or varied without your consent, and in consideration of your making finance available to the Buyer to assist in payment of the purchase price of the Ship, we hereby undertake:
1 to hold the Ship and the builder’s certificate and any other documents of title to the Ship to your order and disposal which we may have against the Buyer except our lien as builder in respect of money due to us under the Contract;
2 to pay to you or to your order all sums which we may become due to pay to the Buyer under the Contract including sums arising from an arbitration award;
3 that should default be made by the Buyer in the due payment of any instalment or instalments of the purchase price or should the Buyer commit any other default by reason whereof we claim a right to determine the Contract, we shall forthwith give you notice in writing of such default; and
4 that before exercising any option or right accruing to us on any such default including, without limitation, the right of the Builder to sell the Ship, we shall first give you the option following such default by the Buyer (such option to be exercised within 14 days) of you, or your nominee, making good the default and assuming all the Buyer’s liabilities under the Contract.
We confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Contract or the Ship and we hereby agree not to consent or agree to any other assignment of the Contract without your prior written consent and to advise you forthwith of any such attempted assignment, charge or disposal by the Buyer of the Contract or the Ship.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
Yours faithfully |
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SUNGDONG SHIPBUILDING & MARINE ENGINEERING CO., LTD |
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Schedule 2
Form of notice of assignment of Refund Guarantee and acknowledgement
To: [·]
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Dear Sirs
We refer to your letter of guarantee number M0902-305-LG-009[22][15] dated 13 May 2013 (the “Refund Guarantee”) executed in our favour in respect of the refund obligations of Sungdong Shipbuilding & Marine Engineering Co., Ltd. (the “Builder”) under a shipbuilding contract dated [·] 2013 as the same may be amended and supplemented from time to time (the “Contract”) made between the Builder and ourselves, Q [Amreen] [Anastasia] Shipping Ltd. as buyer (the “Buyer”) in respect of the construction and sale by the Builder and the purchase by the Buyer of the Builder’s Hull No. [S1195] [S1194].
NOW WE HEREBY GIVE YOU NOTICE:
1 that by a deed of assignment (the “Assignment”) dated [·] 2013 and made between ourselves and ABN AMRO Bank N.V. acting for itself and as security agent and trustee for certain other banks and financial institutions (the “Security Agent”), a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, acting through its office at Coolsingel 93, 3012 AE Rotterdam, we have assigned to the Security Agent all our beneficial interest and all our benefits, right and title in, to and under the Refund Guarantee and in all moneys payable by you to us under the Refund Guarantee including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by you of the Refund Guarantee;
2 that you are hereby irrevocably authorised and instructed to hold the Refund Guarantee to the order and at the disposal of the Security Agent and to pay to the Security Agent or to its order all sums which you may become due to pay to us under the Refund Guarantee; and
3 that the Assignment includes provisions that we will not, without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose) agree to any variation of the Refund Guarantee or release you from any of your obligations thereunder or waive any breach of your obligations thereunder or consent to any such act or omission as would otherwise constitute such breach.
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above and that the Refund Guarantee remains in full force and effect by signing the acknowledgement endorsed on the enclosed duplicate of this notice and returning that duplicate direct to the Security Agent at the address shown, with a copy to us.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
[on duplicate]
To: ABN AMRO Bank N.V.
Coolsingel 933012 AE
Rotterdam
The Netherlands
We hereby acknowledge receipt of the notice above and agree to act in accordance with the authority and instructions given to us in that notice.
We confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Refund Guarantee.
Dated |
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Private & Confidential
Dated August 2013
| Q [HOUSTON] [KAKI] SHIPPING LTD. |
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| ABN AMRO BANK N.V. |
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DEED OF ASSIGNMENT
in respect of Hull No. [·] [·] at Imabari
Shipbuilding Co., Ltd.
Contents
Clause |
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1 | Definitions | 1 |
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2 | Assignment | 3 |
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3 | Undertakings | 4 |
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4 | Continuing security and other matters | 7 |
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5 | Powers of Security Agent | 7 |
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6 | Application of moneys | 9 |
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7 | Remedies cumulative and other provisions | 10 |
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8 | Costs and indemnity | 10 |
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9 | Attorney | 11 |
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10 | Further assurance | 11 |
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11 | Assignment | 11 |
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12 | Notices | 12 |
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13 | Law and jurisdiction | 12 |
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Schedule 1 Form of notice of assignment of Contract and acknowledgement | 13 | |
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Schedule 2 Form of notice of assignment of Refund Guarantee and acknowledgement | 16 | |
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Schedule 3 Form of notice of assignment of Contract Guarantee and acknowledgement | 19 | |
THIS DEED OF ASSIGNMENT is made the day of August 2013 BETWEEN:
(1) Q [HOUSTON] [KAKI] SHIPPING LTD. a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the “Buyer”); and
(2) ABN AMRO BANK N.V., a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting for the purposes of this Deed through its office at Coolsingel 93, 3012 AE Rotterdam as security agent and trustee for the Secured Creditors (the “Security Agent”).
WHEREAS:
(A) the Buyer has entered into a memorandum of agreement dated 31 May 2013 as amended and supplemented from time to time (the “Contract”) with Lavender Maritime S.A. registered at Microjacket 275739, Roll 39479, Image 64 of the Public Registry Office of Panama with registered agents Morgan & Morgan with offices at 53rd Street, Urbanizacion Obarrio, MMG Tower, 16th Floor, Panama, Republic of Panama (the “Seller”), for the construction and sale by Imabari Shipbuilding Co., Ltd. (the “Builder”) to Venus Sea Marine S.A. (the “Intermediate Seller”), the sale by the Intermediate Seller to the Seller and the sale by the Seller and the purchase by the Buyer of a [·] bulk carrier to be known during construction as Hull No. [·] [·] (the “Ship”);
(B) by a loan agreement dated August 2013 (the “Loan Agreement”) made between the Buyer and [Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd. and Q Kaki Shipping Ltd.] [Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd. and Q Houston Shipping Ltd.] (therein and herein together referred to as the “Borrowers”) as joint and several borrowers and (2) ABN AMRO Bank N.V., as arranger, agent (in such capacity the “Agent”), security agent and account bank and (3) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”; and, together with the Agent, the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, upon the terms and conditions therein contained, the principal sum of up to $31,040,000;
(C) pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Security Agent (referred to in the Loan Agreement as the “Security Agent”) as its security agent and trustee and pursuant to a deed of trust dated August 2013 executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Deed for and on behalf of itself and the Secured Creditors; and
(D) this Deed is the [Q Houston] [Q Kaki] Pre-delivery Security Assignment referred to in the Loan Agreement and is supplemental to the Loan Agreement.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED as follows:
1 Definitions
1.1 Defined expressions
Words and expressions defined in the Loan Agreement shall, unless otherwise defined in this Deed, or the context otherwise requires, have the same meanings when used in this Deed.
1.2 Definitions
In this Deed, unless the context otherwise requires:
“Agent” includes its successors in title, assignees and/or its replacements;
“Assigned Documents” means:
(a) the Contract;
(b) the Refund Guarantees; and
(c) the Contract Guarantee;
“Assigned Property” means all of the Buyer’s rights, title, interest and all its benefits present and future in and under the Assigned Documents and in all moneys payable by the Seller, the Contract Guarantor, the Refund Guarantors or any of them to the Buyer thereunder including, without prejudice to the generality of the foregoing, all claims for damages in respect of any breach by the Seller of the Contract or by a Refund Guarantor of any Refund Guarantee or by the Contract Guarantor of the Contract Guarantee and all the rights of the Buyer to take delivery of and title to the Ship under the Contract;
“Banks” includes their respective successors in title and/or their respective Transferees;
“Builder” means Imabari Shipbuilding Co., Ltd. of 14F, Hibiya Marine Bldg., 5-1, Yurakucho 1-Chome, Chiyoda-ku, Tokyo, Japan and includes its successors in title;
“Buyer” includes the successors in title of the Buyer;
“Contract” means the shipsales contract referred to in recital (A) hereto;
“Contract Guarantee” means the performance guarantee dated 29 May 2013 and executed by the Contract Guarantor in favour of the Buyer in respect of the Seller’s obligations under the Contract and any further guarantee(s) to be issued by the Contract Guarantor in respect of such obligations, pursuant to any agreement supplemental to the Contract, and any extensions, renewals, amendments, supplements or replacements thereto or thereof;
“Contract Guarantor” means Itochu Corporation of 5-1, Kita Aoyama 2-Chome, Minato-ku, Tokyo, Japan and includes its successors in title;
“Expenses” means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Security Agent) of:
(a) all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature (including without limitation Taxes, repair costs, registration fees, insurance premiums, commission in connection with any assignment of the Assigned Property or the sale of the Ship, costs of supervision of construction of the Ship and costs of safeguarding, maintaining and insuring the Ship in the event of her sale after delivery under the Contract) suffered, incurred or paid by the Security Agent or any Secured Creditor in connection with the exercise of the powers referred to in or granted by the Loan Agreement or this Deed or any of the other Security Documents or otherwise payable by the Buyer in accordance with clause 8; and
(b) interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Security Agent or any Secured Creditor until the date of receipt or recovery thereof (whether before or after judgment) at a rate per annum calculated in accordance with clause 3.4 of the Loan Agreement (as conclusively certified by the Agent at the request of the Security Agent);
“Loan Agreement” means the loan agreement referred to in recital (B) hereto;
“Outstanding Indebtedness” means all sums actually or contingently owing to the Secured Creditors under the Loan Agreement, all Expenses and all other sums payable by the Borrowers or any of them to the Secured Creditors or any of them, whether actually or contingently, under or pursuant to the Loan Agreement and the other Security Documents or any of them;
“Refund Guarantees” means, together each guarantee(s) issued or (as the case may be) to be issued by a Refund Guarantor in favour of the Buyer in respect of certain of the Seller’s obligations under the Contract or any agreement supplemental to the Contract and any extensions, renewals or replacements thereto or thereof and “Refund Guarantee” means each one of them;
“Refund Guarantor” means, in relation to each Refund Guarantee, any bank or financial institution appointed by the Seller to issue that Refund Guarantee and, in each case, acceptable to the Agent in its sole discretion and includes, in each case, its successors in title and “Refund Guarantors” means any or all of them;
“Security Agent” includes the successors in title and replacements of the Security Agent; and
“Seller” means Lavender Maritime S.A. registered at Microjacket 275739, Roll 39479, Image 64 of the Public Registry Office of Panama with registered agents Morgan & Morgan with offices at 53rd Street, Urbanizacion Obarrio, MMG Tower, 16th Floor, Panama, Republic of Panama and includes its successors in title.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Deed.
1.4 Construction of certain terms
Clause 1.4 of the Loan Agreement shall apply to this Deed as if set out herein.
1.5 Conflict with Loan Agreement
This Deed shall be read together with the Loan Agreement but in case of any conflict between the two instruments the provisions of the Loan Agreement shall prevail.
2 Assignment
2.1 Assignment
By way of security for payment of the Outstanding Indebtedness, the Buyer with full title guarantee hereby assigns and agrees to assign to the Security Agent the Assigned Property provided however that:
2.1.1 all moneys payable to the Buyer comprised in the Assigned Property (other than moneys described in clauses 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.5 or 6.1.6 which shall in all circumstances be payable to the Security Agent) shall be payable to such account of the Buyer as the Security Agent shall from time to time agree and shall be at the disposal of the Buyer until such time as a Default shall occur and the Security Agent shall direct to the contrary whereupon the Buyer shall forthwith, and the Security Agent may at any time thereafter, instruct the persons from whom such moneys are then payable to pay the same to the Security Agent or as it may direct and any
such moneys then in the hands of the Buyer’s agents shall be deemed to have been received by them for the use and on behalf of the Security Agent and the Secured Creditors;
2.1.2 unless and until a Default shall occur and the Security Agent shall have given notice to the Buyer that the Security Agent intends to enforce its rights under this Deed, the Buyer shall be entitled to exercise all its rights under the Assigned Documents (subject as provided in this Deed) in all respects as if the foregoing assignment had not been made;
2.1.3 the Security Agent shall be under no obligation to implement any of the Assigned Documents unless the Security Agent sees fit to do so;
2.1.4 if the Security Agent sees fit to implement any of the Assigned Documents and if the Security Agent makes any payments in respect of or relating to the Contract (including any payments made by the Security Agent in addition to any such amount or amounts as the Security Agent is obliged to pay pursuant to the terms of the Loan Agreement) all moneys so expended by the Security Agent for the purpose aforesaid shall on demand be repaid by the Buyer to the Security Agent together with interest thereon (as well after as before judgment) at the rate referred to in clause 3.4 of the Loan Agreement from the time of such expenditure until payment (such interest to accrue due from day to day and to be calculated on the basis of actual days elapsed and a year of 360 days) and until so repaid shall be charged on the property hereby assigned; and
2.1.5 upon the payment and discharge in full to the satisfaction of the Security Agent of the Outstanding Indebtedness, the Security Agent shall, at the request and cost of the Buyer, re-assign the Assigned Property to the Buyer or as it may direct.
2.2 Notice of assignment
The Buyer hereby covenants and undertakes with the Security Agent:
2.2.1 forthwith after execution and delivery of this Deed, to give written notice to the Seller, each Refund Guarantor and the Contract Guarantor, in each case in the form of the notices set out in schedules 1, 2 and 3 respectively, and in each such case, to procure that the Seller, each Refund Guarantor and the Contract Guarantor signs and delivers to the Security Agent the form of acknowledgement attached to the relevant notice forthwith by fax copy, with the original to follow no later than ten (10) days thereafter; and
2.2.2 promptly on being requested to do so by the Security Agent, the Buyer shall give written notice in such form as the Security Agent shall require consistent with this clause 2 to anyone from whom any part of the Assigned Property is or may be due and/or having an interest in the Ship and provide the Security Agent with as many of such notices signed by the Buyer as the Security Agent may require.
3 Undertakings
3.1 Positive undertakings
The Buyer hereby undertakes and agrees with the Security Agent that throughout the Security Period it will:
3.1.1 Document of title to the Ship
give irrevocable instructions to the Seller to hold the Ship and the builder’s certificate and any other document of title to the Ship to the order and at the disposal of the Security Agent and ensure that the Seller complies with such instructions;
3.1.2 Performance of Contract
duly and punctually observe and perform all the conditions and obligations imposed on it by the Contract;
3.1.3 Performance by Seller
ensure that the Seller observes and performs all conditions and obligations imposed on the Seller by the Contract and take all steps within its power to ensure that the Seller proceeds with the construction of the Ship with due diligence and despatch;
3.1.4 Progress of construction
upon the request of the Security Agent, advise the Security Agent of the progress of construction of the Ship and supply the Security Agent with such other information as the Security Agent may require and the Buyer may have regarding the Ship and the materials allocated or appropriated to the Ship, the Assigned Documents, the Assigned Property or otherwise relating to the construction of the Ship;
3.1.5 Arbitration under Contract
in the event that any party to the Contract resorts to arbitration as provided in clause [15] of the Contract, immediately notify the Security Agent in writing that such arbitration has been initiated, advise the Security Agent in writing of the identity of the appointed arbitrators and upon termination of the arbitration notify the Security Agent in writing to that effect and supply the Security Agent with a copy of the arbitration award and, if not in English, a certified English translation thereof;
3.1.6 Enforcement of Buyer’s rights
do or permit to be done each and every act or thing which the Security Agent may from time to time require to be done for the purpose of enforcing the Buyer’s rights under or pursuant to the Assigned Documents and allow the name of the Buyer to be used as and when required by the Security Agent for that purpose; and
3.1.7 Notification of rejection of Ship etc
notify the Security Agent immediately if the Buyer (with the prior written consent of the Security Agent given pursuant to clause 3.2) rejects the Ship or if the Seller, the Contract Guarantor or any Refund Guarantor or (with the prior written consent of the Security Agent given pursuant to clause 3.2) the Buyer cancels, rescinds, repudiates or otherwise terminates any of the Assigned Documents or purports to do so or if the Ship shall become a Total Loss or partial loss or shall be damaged.
3.2 Negative undertakings
The Buyer hereby further undertakes and agrees with the Security Agent that throughout the Security Period it will not without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose):
3.2.1 Disposals
sell, assign or otherwise dispose of, or create or grant or permit to subsist any Encumbrance over, of or relating to, any of the Assigned Property other than this Deed;
3.2.2 Sale
sell or agree to sell the Ship or any share or interest therein;
3.2.3 Creation of Encumbrances
create or agree to create or permit to subsist any Encumbrance over the Ship (or any share or interest therein) other than the Encumbrances created or to be created pursuant to this Deed or the Loan Agreement;
3.2.4 Variation of Refund Guarantees; releases and waivers of Refund Guarantees
agree to any variation of any of the Refund Guarantees or release any Refund Guarantor from any of their respective obligations thereunder or waive any breach of any of the Refund Guarantors’ obligations thereunder or consent to any such act or omission of any of the Refund Guarantors as would otherwise constitute such breach;
3.2.5 Variation of Contract Guarantee; releases and waivers of Contract Guarantee
agree to any variation of the Contract Guarantee or release the Contract Guarantor from any of its obligations thereunder or waive any breach of the Contract Guarantor’s obligations thereunder or consent to any such act or omission of the Contract Guarantor as would otherwise constitute such breach;
3.2.6 Variations of Contract; releases and waivers of Contract
agree to any variation of the Contract or any substantial variation of the specification of the Ship (and for the purpose of this paragraph any extras, additions or alterations which the Buyer may desire to effect in the building of the Ship shall be deemed to constitute a substantial change if the cost thereof (which shall in every case be agreed in writing between the Buyer and the Seller before the work is put in hand irrespective of whether the prior consent thereto of the Security Agent be required hereunder) or if the aggregate cost of the proposed work together with the cost of any work already ordered will alter the fixed price of the Ship by an amount greater than five per cent (5%) of the said fixed price) or release the Seller from any of its obligations under the Contract or waive any breach of the Seller’s obligations thereunder or consent to any such act or omission of the Seller as would otherwise constitute such breach;
3.2.7 Delays
without prejudice to sub-paragraph 3.2.6, agree to any variation of the Contract or the specification of the Ship which would delay the time for delivery of the Ship;
3.2.8 Assignment of Earnings
assign or agree to assign otherwise than to the Security Agent the future earnings of the Ship or any part thereof; or
(i) Rejection and cancellation
either exercise or fail to exercise any right which the Buyer may have to reject the Ship or cancel or rescind or otherwise terminate the Contract provided always that any such rejection of the Ship or cancellation, rescission or other termination of the Contract by the Buyer after such consent is given shall be without responsibility on the part of the Security Agent who shall be under no liability whatsoever to the extent that such rejection, rescission, cancellation or termination is thereafter adjudged to constitute a repudiation or other breach of the Contract by the Buyer.
4 Continuing security and other matters
4.1 It is declared and agreed that:
4.1.1 Continuing security
the security created by this Deed shall be held by the Security Agent as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions in the Security Documents contained, express or implied and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Buyer or any other person who may be liable to the Security Agent in respect of the Outstanding Indebtedness or any part thereof and the Security Agent or the Secured Creditors or any of them);
4.1.2 Security additional
the security so created shall be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Security Agent without prior recourse to, the security created by any of the other Security Documents or by any deposit of documents, or any guarantee, lien, bill, note, mortgage or other security now or hereafter held by the Security Agent or any Secured Creditor or any right or remedy of the Security Agent or any Secured Creditor thereunder and shall not in any way be prejudiced or affected thereby or by the invalidity or unenforceability thereof, or by the Security Agent or any Secured Creditor releasing, modifying or refraining from perfecting or enforcing any of the same, or granting time or indulgence or compounding with any person liable;
4.1.3 Rights additional
all the rights, remedies and powers vested in the Security Agent hereunder shall be an addition to and not a limitation of any and every other right, power or remedy vested in the Security Agent or any Secured Creditor under the Loan Agreement, this Deed, the other Security Documents or at law and that all the powers so vested in the Secured Creditors and/or the Security Agent may be exercised from time to time and as often as they may deem expedient;
4.1.4 No enquiry
the Security Agent shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Deed or to make any claim or take any action to collect any moneys hereby assigned or to enforce any rights or benefits hereby assigned to the Security Agent or to which the Security Agent may at any time be entitled under this Deed; and
4.1.5 No liability
the Buyer shall remain liable to perform all the obligations assumed by it in relation to the Assigned Property and the Security Agent shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Buyer to perform its obligations in respect thereof.
5 Powers of Security Agent
5.1 Protective action
The Security Agent shall, without prejudice to its other rights, powers and remedies hereunder or under any of the other Security Documents, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of
protecting or maintaining the security created by this Deed and all Expenses attributable thereto shall be payable by the Buyer on demand.
5.2 Remedy of defaults
Without prejudice to the provisions of clause 5.1 or the generality of the powers and remedies vested in the Security Agent by virtue of the assignment herein contained, upon the happening of any Event of Default (whether or not the Agent shall have given any notice in accordance with the provisions of clause 10.2 of the Loan Agreement) the Security Agent shall become forthwith entitled, as and when it may see fit, to exercise in relation to the Assigned Property or any part thereof all or any of the rights, powers and remedies possessed by it as assignee of the Assigned Property (whether at law, by virtue of this Deed or otherwise) and in particular (without limiting the generality of the foregoing):
5.2.1 to implement the Contract and take delivery and possession of the Ship as the Security Agent may see fit;
5.2.2 to agree with the Seller to determine the Contract on such terms and conditions as the Security Agent and the Seller may mutually agree;
5.2.3 to assign all the Assigned Property or to sell the Ship on or after her delivery under the Contract or otherwise and upon such terms (including free of or subject to any charter) as the Security Agent shall in its absolute discretion determine and with power, where the Security Agent purchases the Ship and/or takes an assignment of the Assigned Property, to make payment of the price by making an equivalent reduction in the amount of the Outstanding Indebtedness in the manner referred to in clause 6.1;
5.2.4 to undertake the further supervision of the construction of the Ship;
5.2.5 to collect, recover, compromise and give a good discharge for all claims then outstanding or thereafter arising in respect of the Assigned Property or any part thereof and moneys payable to the Buyer or any damages recoverable by the Buyer under the Assigned Documents in connection therewith and to take over or institute (if necessary using the name of the Buyer) all such proceedings in connection therewith as the Security Agent in its absolute discretion thinks fit;
5.2.6 to implement the Refund Guarantees and to agree with any Refund Guarantor any compromise of the obligations of such Refund Guarantor or grant any release or discharge of such Refund Guarantor;
5.2.7 to implement the Contract Guarantee and to agree with the Contract Guarantor any compromise of the obligations of the Contract Guarantor or grant any release or discharge of the Contract Guarantor;
5.2.8 following delivery of the Ship to manage, insure, maintain and repair the Ship and to employ, sail or lay up the Ship in such manner and for such period as the Security Agent, in its absolute discretion, deems expedient, accounting only for net profits arising from any such employment; and
5.2.9 to recover from the Buyer on demand all Expenses incurred or paid by the Security Agent in connection with the exercise of the powers (or any of them) referred to in this clause 5.2.
5.3 Event of Default
At any time after the happening of any Event of Default (whether or not the Security Agent shall have given any notice in accordance with the provisions of clause 10.2 of the Loan Agreement) the Security Agent shall be entitled to exercise its powers of assignment and sale hereunder in such manner and at such times as the Security Agent in its absolute discretion may determine and the Security Agent shall not in any circumstances be answerable for any loss occasioned by such sale or resulting from postponement thereof.
5.4 No enquiry by purchaser
Upon any assignment or sale of the Contract and/or the Ship or any share therein or part thereof pursuant to this Deed the purchaser shall not be bound to see or enquire whether the Security Agent’s power of assignment or sale has arisen and the assignment or sale shall be deemed to be within the power of the Security Agent and the receipt of the Security Agent for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor.
5.5 Security Agent’s rights
The Buyer covenants and undertakes with the Security Agent to do or permit to be done each and every act or thing which the Security Agent may from time to time require to be done for the purpose of enforcing the Security Agent’s rights under this Deed and to allow its name to be used as and when required by the Security Agent for that purpose.
6 Application of moneys
6.1 Application
All moneys received by the Security Agent in respect of:
6.1.1 any payment under the Contract Guarantee and/or any of the Refund Guarantees;
6.1.2 any payment from the Seller under the Contract (including sums arising from any arbitration award);
6.1.3 the determination, cancellation or rescission or other termination of the Contract;
6.1.4 the assignment, sale or other disposal of the Assigned Property or the Ship on enforcement of its rights hereunder;
6.1.5 (if the Ship is delivered to the Security Agent (or its nominee)) freights and other earnings of the Ship until the sale or loss of the Ship after such delivery;
6.1.6 such collections, recoveries or compromises as are referred to in clause 5.2.5; or
6.1.7 otherwise in respect of the Assigned Property,
shall be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 13.1 of the Loan Agreement.
6.2 Shortfall
In the event that on application in accordance with clause 6.1, the moneys so applied are insufficient to pay in full the whole of the Outstanding Indebtedness, the Security Agent and/or the
Secured Creditors shall be entitled to collect the shortfall from the Buyer or any other person liable for the time being therefor.
7 Remedies cumulative and other provisions
7.1 No waiver
No failure or delay on the part of the Security Agent to exercise any right, power or remedy vested in it under the Security Documents or any of them shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Security Agent to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy. Nor shall the giving by the Security Agent of any consent to any act which by the terms of this Deed requires such consent prejudice the right of the Security Agent to withhold or give consent to the doing of any other similar act. The remedies provided in the Security Documents are cumulative and are not exclusive of any remedies provided by law.
7.2 Delegation
The Security Agent shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by this Deed (including the power vested in it by virtue of clause 9) in such manner, upon such terms and to such persons as the Security Agent in its absolute discretion may think fit.
7.3 Security Agent as assignee
The Security Agent shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as assignee of the Assigned Property (whether at law, under this Deed or otherwise).
8 Costs and indemnity
8.1 Costs
The Buyer shall pay to the Security Agent on demand on a full indemnity basis all expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges (together with any value added tax or similar tax payable in respect thereof)), incurred by the Security Agent in connection with the enforcement of, or preservation of any rights under, this Deed or otherwise in respect of the Outstanding Indebtedness and the security therefor or in connection with the preparation, completion, execution or registration of this Deed.
8.2 Indemnity
The Buyer hereby agrees and undertakes to indemnify the Security Agent against all losses, actions, claims, expenses, demands, obligations and liabilities whatsoever and whensoever arising which may now or hereafter be incurred by or threatened or brought against it, or incurred by any manager, agent, officer or employee for whose liability, act or omission the Security Agent may be answerable, in respect of, in relation to or in connection with, anything done or omitted in the exercise of, or purported exercise of, the powers contained in this Deed or the implementation of the Assigned Documents, or in respect of the design, construction, equipment or use or operation of the Ship or otherwise in connection herewith or with any part of the Assigned Property or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in any of the Security Documents.
9 Attorney
9.1 Power of attorney
By way of security, the Buyer hereby irrevocably appoints the Security Agent to be its attorney generally for and in the name and on behalf of the Buyer, and as the act and deed or otherwise of the Buyer to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things including, without prejudice to the generality of the foregoing, to ask, require, demand (including, but without limitation, to make demands under the Refund Guarantee), receive, compound and give acquittance for any and all moneys and claims for moneys due and to become due under or arising out of any of the Assigned Documents including all amounts already paid by the Buyer to the Builder pursuant to the Contract, to endorse any cheques or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which to the Security Agent may seem to be necessary or advisable, to execute and deliver a bill of sale of the Ship and generally to do any and all such things as the Buyer itself could do in relation to the property hereby assigned which may be required for the full exercise of all or any of the rights, powers or remedies conferred hereby or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power hereby conferred shall be a general power of attorney under the Powers of Attorney Act 1971, and the Buyer ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Security Agent may execute or do pursuant thereto. Provided always that such power shall not be exercisable by or on behalf of the Security Agent until the happening of any Default.
9.2 Dealings with attorneys
The exercise of such power by or on behalf of the Security Agent shall not put any person dealing with the Security Agent upon any enquiry as to whether any Default has happened, nor shall such person be in any way affected by notice that no such event has happened, and the exercise by the Security Agent of such power shall be conclusive evidence of its right to exercise the same.
9.3 Filings
The Buyer hereby irrevocably appoints the Security Agent to be its attorney in the name and on behalf of the Buyer and as the act and deed or otherwise of the Buyer to agree the form of and to do and execute all deeds, instruments, acts and things to file, record, register or enrol this Deed which the Security Agent may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence hereof.
10 Further assurance
The Buyer hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Security Agent may be necessary or desirable for the purpose of more effectually assigning the Assigned Property or perfecting the security constituted or intended to be constituted by this Deed.
11 Assignment
The provisions of clause 15 of the Loan Agreement shall apply mutatis mutandis in respect of any assignment of rights or transfer of obligations under this Deed and the rights of each of the Buyer and the Security Agent to effect any assignment of rights or transfer of obligations under this Deed.
12 Notices
The provisions of clauses 17.1 and 17.3 of the Loan Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Deed (save that references therein to the “Borrowers or any of them” and to “this Agreement” shall be construed as referring for the purposes of this Deed to the Buyer and this Deed, respectively).
13 Law and jurisdiction
13.1 Law
This Deed and any non-contractual obligations connected with this Deed are governed by and shall be construed in accordance with English law.
13.2 Submission to jurisdiction
For the benefit of the Security Agent, the Buyer irrevocably agrees that any legal action or proceedings arising out of or in connection with this Deed (including any non-contractual obligations connected with this Deed) against the Buyer or any of its assets may be brought in the English courts, or in the courts of any other jurisdiction chosen by the Security Agent, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Deed. The Buyer irrevocably and unconditionally submits to the jurisdiction of such courts, and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive, for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Buyer in any other court of competent jurisdiction nor shall the taking of proceedings by the Security Agent in any one or more jurisdictions preclude the taking of proceedings by the Security Agent in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Buyer may have against the Security Agent arising out of or in connection with this Deed (including any non-contractual obligations connected with this Deed).
13.3 Contracts (Rights of Third Parties) Act 1999
No term of this Deed is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Deed.
IN WITNESS whereof this Deed has been duly executed by way of deed the day and year first above written.
Schedule 1
Form of notice of assignment of Contract and acknowledgement
To: | Lavender Maritime S.A. |
| 53rd Street |
| Urbanizacion Obarrio |
| MMG Tower |
| 16th Floor |
| Panama |
| Republic of Panama |
(Date)
Dear Sirs
Hull No. [·] [·] (the “Ship”)
We refer to the memorandum of agreement dated [·] 2013 as the same may be amended and supplemented from time to time (the “Contract”) made between (a) us, Q [Houston] [Kaki] Shipping Ltd. (the “Buyer”) and (b) Lavender Maritime S.A. (the “Seller”) and relating to the construction by Imabari Shipbuilding Co., Ltd. (the “Builder”), the sale by the Builder to Venus Sea Marine S.A. (the “Intermediate Seller”), the sale by the Intermediate Seller to the Seller and the sale by the Seller and the purchase by the Buyer, of the Ship.
NOW WE HEREBY GIVE YOU NOTICE:
1 that by a deed of assignment (the “Assignment”) dated [·] 2013 and made between the Buyer and ABN AMRO Bank N.V. acting for itself and as security agent and trustee for certain other banks and financial institutions (the “Security Agent”), a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, the Buyer has assigned to the Security Agent all its beneficial interests and all its benefits, right and title in, to and under the Contract but the Buyer continues to be responsible to the Seller for performance of its obligations thereunder;
2 that the Seller is irrevocably authorised and instructed:
(a) to hold the Ship to the order and at the disposal of the Security Agent (subject only to any lien of the Seller as seller under the Contract);
(b) to hold the builder’s certificate and any other document of title to the Ship to the order and at the disposal of the Security Agent (subject only to any lien of the Seller as seller under the Contract); and
(c) to pay to the Security Agent or to its order all sums which the Seller may become due to pay to the Buyer under the Contract (including sums arising from an arbitration award); and
3 that the Assignment includes provisions that:
(a) the Buyer will not (without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose)):
(i) agree to any variation of the Contract (which, for the avoidance of doubt, includes any substantial in the opinion of the Security Agent variation of the specification of the Ship); or
(ii) either exercise or fail to exercise any right which the Buyer may have to reject the Ship or cancel or rescind or otherwise terminate the Contract; and
(b) the Buyer shall remain liable to perform all its obligations under the Contract and the Security Agent shall be under no obligation of any kind in respect thereof.
This letter does not of course affect the right of the Seller to be paid by the Buyer for alterations, additions, extra work and materials required or directed by the Buyer in accordance with the terms of the Contract prior to such notice being given to the Seller and the Buyer by the Security Agent.
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above by signing the enclosed acknowledgement and return it directly to the Security Agent at the address shown, with a copy to us.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
Yours faithfully |
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For and on behalf of |
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Q [HOUSTON] [KAKI] SHIPPING LTD. |
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Acknowledgement and undertaking
To: | ABN AMRO Bank N.V. |
| Coolsingel 93 |
| 3012 AE Rotterdam |
| The Netherlands |
We acknowledge notice of the fact that Q [Houston] [Kaki] Shipping Ltd. (the “Buyer”) has by a deed of assignment (the “Assignment”) dated [·] 2013 assigned to you all its beneficial interest and all its benefits, right and title in, to and under the memorandum of agreement dated [·] 2013 as the same may be amended and supplemented from time to time (the “Contract”) made between ourselves, Lavender Maritime S.A. (the “Seller”) and the Buyer, for the construction by Imabari Shipbuilding Co., Ltd. (the “Builder”), the sale by the Builder to Venus Sea Marine S.A. (the “Intermediate Seller”), the sale by the Intermediate Seller to the Seller and the sale by the Seller and the purchase by the Buyer of the Builder’s Hull No. [·] [·] (the “Ship”) but that, until such time as you may give notice to the contrary to each of us, the Buyer may continue to superintend the building of the Ship and the Seller’s right to be paid by the Buyer for alterations, additions, extra work and materials required or directed by the Buyer in accordance with the terms of the Contract prior to such notice being given by you, shall not be affected.
In accordance with authority and instructions given to us by the Buyer which cannot be revoked or varied without your consent, and in consideration of your making finance available to the Buyer to assist in payment of the purchase price of the Ship, we hereby undertake:
1 to hold the Ship and the builder’s certificate and any other documents of title to the Ship to your order and disposal which we may have against the Buyer except our lien as seller in respect of money due to us under the Contract;
2 to pay to you or to your order all sums which we may become due to pay to the Buyer under the Contract including sums arising from an arbitration award;
3 that should default be made by the Buyer in the due payment of any instalment or instalments of the purchase price or should the Buyer commit any other default by reason whereof we claim a right to determine the Contract, we shall forthwith give you notice in writing of such default; and
4 that before exercising any option or right accruing to us on any such default including, without limitation, the right of the Seller to sell the Ship, we shall first give you the option following such default by the Buyer (such option to be exercised within 14 days) of you, or your nominee, making good the default and assuming all the Buyer’s liabilities under the Contract.
We confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Contract or the Ship and we hereby agree not to consent or agree to any other assignment of the Contract without your prior written consent and to advise you forthwith of any such attempted assignment, charge or disposal by the Buyer of the Contract or the Ship.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
Yours faithfully |
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For and on behalf of |
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LAVENDER MARITIME S.A. |
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Dated: |
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Schedule 2
Form of notice of assignment of Refund Guarantee and acknowledgement
To: [·]
(Date)
Dear Sirs
We refer to your letter of guarantee number [·] dated [·] (the “Refund Guarantee”) executed in our favour in respect of the refund obligations of Lavender Maritime S.A. (the “Seller”) under a memorandum of agreement dated [·] 2013 as the same may be amended and supplemented from time to time (the “Contract”) made between the Seller and ourselves, Q [Houston] [Kaki] Shipping Ltd. as buyer (the “Buyer”) in respect of the construction by Imabari Shipbuilding Co., Ltd. (the “Builder”), the sale by the Builder to Venus Sea Marine S.A. (the “Intermediate Seller”), the sale by the Intermediate Seller to the Seller and the sale by the Seller and the purchase by the Buyer of the Builder’s Hull No. [·] [·].
NOW WE HEREBY GIVE YOU NOTICE:
1 that by a deed of assignment (the “Assignment”) dated [·] 2013 and made between ourselves and ABN AMRO Bank N.V. acting for itself and as security agent and trustee for certain other banks and financial institutions (the “Security Agent”), a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, acting through its office at Coolsingel 93, 3012 AE Rotterdam, we have assigned to the Security Agent all our beneficial interest and all our benefits, right and title in, to and under the Refund Guarantee and in all moneys payable by you to us under the Refund Guarantee including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by you of the Refund Guarantee;
2 that you are hereby irrevocably authorised and instructed to hold the Refund Guarantee to the order and at the disposal of the Security Agent and to pay to the Security Agent or to its order all sums which you may become due to pay to us under the Refund Guarantee; and
3 that the Assignment includes provisions that we will not, without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose) agree to any variation of the Refund Guarantee or release you from any of your obligations thereunder or waive any breach of your obligations thereunder or consent to any such act or omission as would otherwise constitute such breach.
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above and that the Refund Guarantee remains in full force and effect by signing the acknowledgement endorsed on the enclosed duplicate of this notice and returning that duplicate direct to the Security Agent at the address shown, with a copy to us.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
[on duplicate]
To: | ABN AMRO Bank N.V. |
| Coolsingel 933012 AE |
| Rotterdam |
| The Netherlands |
We hereby acknowledge receipt of the notice above and agree to act in accordance with the authority and instructions given to us in that notice.
We confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Refund Guarantee.
Dated |
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Schedule 3
Form of notice of assignment of Contract Guarantee and acknowledgement
To: | Itochu Corporation |
| 5-1, Kita Aoyama 2-Chome |
| Minato-ku |
| Tokyo |
| Japan |
(Date)
Dear Sirs
We refer to your performance guarantee dated [·] 2013 (the “Contract Guarantee”) executed in our favour in respect of the obligations of Lavender Maritime S.A. (the “Seller”) under a memorandum of agreement dated [·] as the same may be amended and supplemented from time to time (the “Contract”) made between (a) the Seller and (b) ourselves, Q [Houston] [Kaki] Shipping Ltd. as buyer (the “Buyer”) in respect of the construction by Imabari Shipbuilding Co., Ltd. (the “Builder”), the sale by the Builder to Venus Sea Marine S.A. (the “Intermediate Seller”), the sale by the Intermediate Seller to the Seller and the sale by the Seller and the purchase by the Buyer of the Builder’s Hull No. [·] [·].
NOW WE HEREBY GIVE YOU NOTICE:
1 that by a deed of assignment (the “Assignment”) dated [·] 2013 and made between ourselves and ABN AMRO Bank N.V. acting for itself and as security agent and for trustee certain other banks and financial institutions (the “Security Agent”), a company incorporated in The Netherlands with its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE, Rotterdam, we have assigned to the Security Agent all our beneficial interest and all our benefits, right and title in, to and under the Contract Guarantee and in all moneys payable by you to us under the Contract Guarantee including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by you of the Contract Guarantee;
2 that you are hereby irrevocably authorised and instructed to hold the Contract Guarantee to the order and at the disposal of the Security Agent and to pay to the Security Agent or to its order all sums which you may become due to pay to us under the Contract Guarantee; and
3 that the Assignment includes provisions that we will not, without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose) agree to any variation of the Contract Guarantee or release you from any of your obligations thereunder or waive any breach of your obligations thereunder or consent to any such act or omission as would otherwise constitute such breach.
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above and that the Refund Guarantee remains in full force and effect by signing the acknowledgement endorsed on the enclosed duplicate of this notice and returning that duplicate direct to the Security Agent at the address shown, with a copy to us.
This letter and/or any non-contractual obligation connected with this letter are governed by and shall be construed in accordance with English law.
Yours faithfully |
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For and on behalf of |
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Q [HOUSTON] [KAKI] SHIPPING LTD. |
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[on duplicate]
To: ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Netherlands
We hereby acknowledge receipt of the notice above and agree to act in accordance with the authority and instructions given to us in that notice.
We confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Contract Guarantee.
Dated |
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Private & Confidential
Dated August 2013
QUINTANA SHIPPING LTD. (1)
and
ABN AMRO BANK N.V. (2)
PLEDGE
over shares
re: Q [Amreen] [Anastasia] [Houston] [Kaki]
Shipping Ltd.
Contents
Clause |
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1 | Definitions |
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2 | Charging clause |
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3 | Representations and warranties |
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4 | Covenants by the Shareholder |
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5 | Dividends and voting rights |
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6 | Further assurance |
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7 | Powers of the Pledgee |
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8 | Attorney |
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9 | Continuing security and other matters |
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10 | Discharge of security |
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11 | Certificates |
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12 | Payments |
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13 | Notices and other matters |
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14 | Law and jurisdiction |
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Schedule 1 The Shares |
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Schedule 2 Specimen instrument of transfer |
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Schedule 3 Shareholder’s letter of authority |
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Schedule 4 Form of irrevocable proxy |
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Schedule 5 Directors’ resignation letter |
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Schedule 6 Directors’ letter of authority |
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Schedule 7 Form of dividend mandate |
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THIS DEED of PLEDGE is dated August 2013 and made BETWEEN:
(1) QUINTANA SHIPPING LTD. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Shareholder”); and
(2) ABN AMRO BANK N.V., a banking corporation incorporated and established under the laws of The Netherlands, acting for the purposes of this Deed through its branch at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the “Pledgee”) for itself and as security agent and trustee for and on behalf of the Secured Creditors (as defined below).
WHEREAS:
(A) the Shareholder is the registered and beneficial owner of [500] registered shares of no par value in Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd., a corporation incorporated in the Republic of the Marshall Islands (the “Corporation”), representing all of the issued, non assessable and paid up share capital of the Corporation;
(B) by a loan agreement dated August 2013 (the “Loan Agreement”) and made between (1) the Corporation and [Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd.] [Q Amreen Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd.] [Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd. and Q Kaki Shipping Ltd.] [Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd. and Q Houston Shipping Ltd.] (therein referred to together as the “Borrowers”), as joint and several borrowers and (2) ABN AMRO Bank N.V., as arranger, agent (in such capacity the “Agent”), security agent and account bank and (3) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”; and, together with the Agent, the “Secured Creditors”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, upon the terms and conditions therein contained, the principal sum of up to US$31,040,000;
(C) pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Pledgee (referred to in the Loan Agreement as the “Security Agent”) as its security agent and trustee and pursuant to a deed of trust dated August 2013 executed by the Pledgee (as trustee) in favour of the Secured Creditors, the Pledgee agreed to hold, receive, administer and enforce this Pledge for and on behalf of itself and the Secured Creditors; and
(D) the Loan Agreement provides that as a condition precedent to the Banks making their Commitment available, the Shareholder should execute in favour of the Pledgee a pledge in respect of the Shares (as defined below) in the form of this Deed and this is the Q [Amreen] [Anastasia] [Houston] [Kaki] Share Pledge referred to in the Loan Agreement.
NOW THIS DEED WITNESSES as follows:
1 Definitions
1.1 Defined expressions
Words and expressions defined in the Loan Agreement shall, unless the context otherwise requires, have the same meanings when used in this Deed.
1.2 Definitions
In this Deed, unless the context otherwise requires;
“Agent” includes its successors in title, assignees and/or its replacements;
“Banks” includes their respective successors in title and/or their respective Transferees;
“Collateral Instruments” means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other insurances against financial loss and other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for any indebtedness or liabilities of the Borrowers or any of them or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, cost arrangement or security interest of any kind;
“Corporation” includes its successors in title;
“Expenses” means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Pledgee) of:
(a) all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature (including, without limitation, Taxes and registration fees) suffered, incurred or paid by the Pledgee or the Secured Creditors or any of them in connection with the exercise of the powers referred to in or granted by this Deed or otherwise payable by the Shareholder in accordance with clauses 7.5 and 7.6; and
(b) interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same was suffered, incurred or paid by the Pledgee until the date of receipt or recovery thereof (whether before or after judgment) at a rate per annum calculated in accordance with clause 3.4 of the Loan Agreement (as conclusively certified by the Pledgee);
“Outstanding Indebtedness” means the aggregate of the Loan, all interest accrued and accruing thereon, the Expenses and all other sums of money from time to time owing to the Pledgee and/or the Secured Creditors or any of them, whether actually or contingently, under or pursuant to the Loan Agreement and the other Security Documents or any of them;
“Pledgee” includes its successor in title, assignees and/or its replacements;
“Relevant Jurisdiction” means any jurisdiction in which or where the Shareholder is incorporated, resident, domiciled has a permanent establishment, carries on or has a place of business or is otherwise effectively connected;
“Secured Property” means the Shares and all stock, shares, warrants, securities, rights, moneys or property (including the dividends, interest or income thereon or therefrom) accruing or acquired at any time and from time to time by way of redemption, purchase, bonus, preference, option or otherwise to or in respect of or derived from all or any of the Shares or any derivatives thereof, including the proceeds of any sale of any of the Shares;
“Shareholder” includes its successors in title;
“Shares” means the registered shares in the capital of the Corporation registered in the name of the Shareholder and beneficially owned by the Shareholder details of which are set out in schedule 1 and shall include any other shares in the capital of the Corporation which may hereafter be registered in the name of, or beneficially owned by, the Shareholder and/or its nominee or trustee; and
“Taxes” includes all present and future taxes, levies, imposts, duties, fees or charges of whatever nature together with interest thereon and penalties in respect thereof and “Taxation” shall be construed accordingly.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Deed.
1.4 Construction of certain terms
In this Deed, unless the context otherwise requires:
1.4.1 references to clauses and schedules are to be construed as references to clauses of, and schedules, to this Deed and references to this Deed include its schedules;
1.4.2 references to (or to any specified provision of) this Deed or any other documents shall be construed as references to this Deed, that provision or that document as in force for the time being as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties and, where such consent is, by the terms of this Deed or the relevant document required to be obtained as a condition to such amendment being permitted, the prior written consent of the Pledgee;
1.4.3 references to a “regulation” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank or government department or any self regulatory or other national or supra-national authority;
1.4.4 words importing the plural shall include the singular and vice versa;
1.4.5 references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity; and
1.4.6 references to any enactment shall be construed as references to such enactment as re-enacted, amended or extended.
1.5 Conflict with Loan Agreement
This Deed shall be read together with the Loan Agreement but, in the case of any conflict between this Deed and the Loan Agreement, the provisions of the Loan Agreement shall prevail.
2 Charging clause
2.1 In consideration of the Banks agreeing to advance to the Borrowers, jointly and severally, pursuant to the Loan Agreement the sum of up to Thirty one million forty thousand Dollars ($31,040,000), the Shareholder with full title guarantee hereby pledges, mortgages, charges, assigns, transfers, deposits, sets over and confirms and agrees to pledge, mortgage, charge, assign, transfer, deposit, set over and confirm to the Pledgee as security for the payment of the Outstanding Indebtedness and as a continuing security for the payment of all moneys and the discharge of all obligations and liabilities hereby covenanted to be paid or otherwise hereby secured by way of a first fixed pledge all of its interest in and to all of the Secured Property.
3 Representations and warranties
3.1 Representations and warranties
The Shareholder hereby represents and warrants to the Pledgee that:
3.1.1 Title to Shares
the Shareholder is the registered holder of the Shares and is the beneficial owner of and has full right and title to, and has hereby pledged, the Secured Property and all the Shares are free from any Encumbrance of any kind (other than the Encumbrance hereby created) and are not, nor shall they be, subject to any option;
3.1.2 Shares fully paid
the Shares are fully paid or credited as fully paid and non-assessable and no calls have been, or can be, made in respect of the Shares;
3.1.3 Due incorporation
the Shareholder is duly incorporated and validly existing in good standing under the laws of the Republic of the Marshall Islands as a Marshall Islands corporation, has no centre of main interests, permanent establishment or place of business in the Republic of the Marshall Islands, the UK or the USA, is not a FATCA FFI or a US Tax Obligor and has power to carry on its business as it is now being conducted and to own its property and other assets;
3.1.4 Corporate power
the Shareholder has power to execute, deliver and perform its obligations under this Deed and to deliver to the Pledgee stock certificates in respect of the Shares and the undated instruments of transfer in respect thereof pursuant to clause 5.1 and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same;
3.1.5 Binding obligations
this Deed constitutes valid and legally binding obligations of the Shareholder enforceable in accordance with its terms;
3.1.6 No conflict with other obligations
the execution and delivery of, the performance of its obligations under, the compliance by the Shareholder with the provisions of this Deed will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Shareholder is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Shareholder is a party or is subject or by which it or any of its property is bound, (iii) contravene or conflict with any provision of the Shareholder’s constitutional documents or (iv) result in the creation or imposition of or oblige the Shareholder to create any Encumbrance (other than a Permitted Encumbrance) on the Shareholder’s undertaking or on any of the Shareholder’s assets, rights or revenues;
3.1.7 No litigation
no litigation, arbitration or administrative proceeding is taking place, pending or, to the knowledge of the officers of the Shareholder, threatened against the Shareholder which could have a material adverse effect on the business, assets or financial condition of the Shareholder;
3.1.8 Choice of law
the choice by the Shareholder of English law to govern this Deed and the submission by the Shareholder to the non-exclusive jurisdiction of the courts of England are valid and binding;
3.1.9 Consents obtained
every consent, authorisation, licence or approval of, or registration with or declaration to, governmental or public bodies or authorities or courts required by the Shareholder to authorise, or required by the Shareholder in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this Deed or the performance by the Shareholder of its obligations hereunder or thereunder has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions imposed in or in connection with any of the same;
3.1.10 Obligations of the Shareholder
the obligations of the Shareholder under this Deed are direct, general and unconditional obligations of the Shareholder;
3.1.11 No other security or lien
the Shareholder has not taken or received any security or lien from the Corporation in respect of any liability hereunder or in respect of any other liability of the Corporation to the Shareholder;
3.1.12 No filings required
it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Deed that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to this Deed and this Deed is in proper form for its enforcement in the courts of any Relevant Jurisdiction; and
3.1.13 No immunity
neither the Shareholder nor any of its assets is entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement).
3.2 Repetition of representations and warranties
The representations and warranties in clause 3.1 shall be deemed to be repeated by the Shareholder on and as of each day from the date of this Deed until all moneys due or owing by the Borrowers under the Loan Agreement have been repaid in full as if made with reference to the facts and circumstances existing on each such day.
4 Covenants by the Shareholder
4.1 Supporting documents
The Shareholder hereby covenants with the Pledgee that during the continuance of this Deed the Shareholder will at all times deposit with the Pledgee and permit the Pledgee during the continuance of this security to hold and retain:
4.1.1 Certificates
all stock and share certificates and documents of title relating to the Shares together with any other documents of title relating to the Secured Property;
4.1.2 Transfers
transfers of the Shares duly completed in favour of the Pledgee or its nominees or otherwise as the Pledgee may direct in the form set out in schedule 2 together with letters of authority in respect of such transfers in the form set out in schedule 3;
4.1.3 Irrevocable proxies
an irrevocable proxy/proxies in respect of the Shares executed by the Shareholder in favour of the Pledgee in the form set out in schedule 4, entitling the Pledgee to exercise, subject to clause 5.1, all voting rights in respect of the Shares;
4.1.4 Directors’ resignation letters
executed undated resignation letters from each Director of the Corporation in the form set out in schedule 5 together with letters of authority from each Director of the Corporation in the form set out in schedule 6; and
4.1.5 Further documents
all such other documents as the Pledgee may from time to time require for perfecting its title to the Shares and/or the Secured Property or for vesting or enabling it to vest the same in itself or its nominees or in any purchaser to the intent that the Pledgee may at any time without notice present them for registration.
4.2 Continuing covenants
The Shareholder hereby further covenants with the Pledgee that during the continuance of this Deed the Shareholder will at all times:
4.2.1 Title
warrant and defend the right, title and interest of the Pledgee in and to the Secured Property against the claims and demands of all persons whomsoever;
4.2.2 Prompt payment
duly and promptly pay all calls, instalments or other payments which from time to time become due in respect of any of the Shares;
4.2.3 New certificates
duly register or procure that the Directors of the Corporation duly register all transfers of the Shares from time to time lodged with them by or on behalf of the Pledgee or its nominees and issue, and deliver to the Pledgee, a new certificate or certificates for the Shares in the name of the Pledgee or its nominees as soon as possible following receipt of such transfers from the Pledgee;
4.2.4 Negative undertakings
not (without the prior written consent of the Pledgee):
(a) create or permit to subsist any Encumbrance other than a Permitted Encumbrance on or over the Secured Property or any part thereof or interest therein; or
(b) sell, transfer or otherwise dispose of the Secured Property or any part thereof or interest therein or attempt or agree so to do; or
(c) suffer or permit the Corporation to cancel, increase, create or issue or agree to issue or put under option or agree to put under option any share or loan capital or obligation now or hereafter convertible into share or loan capital of or in the Corporation of any class or call any uncalled capital; or
(d) suffer or permit the Corporation to make any alteration to, grant any rights in relation to or otherwise re-organise or purchase or reduce the share capital or reserves of the Corporation in any way or enter into any composition or arrangement with its creditors or any class of creditors of the Corporation; or
(e) convene any meeting with a view either to the alteration of any of the provisions of the Corporation’s constitutional documents or to passing a resolution that the Corporation be wound up; or
(f) suffer or permit the Corporation to permit any person other than the Shareholder to be registered as holders of the Shares or any part thereof;
4.2.5 Appointment of further directors
duly and promptly notify the Pledgee of the appointment of any further Director or Directors of the Corporation (whether by way of replacement of, or addition to, any of the existing Directors) and thereafter duly and promptly deliver to the Pledgee the letter or letters of resignation and letter or letters of authority referred to in clause 4.1 duly signed by such additional Director or Directors;
4.2.6 Maintenance of value of security
not do or cause or permit to be done anything which in any way depreciates, jeopardises or otherwise prejudices the value to the Pledgee of the security created by this Deed;
4.2.7 Indebtedness due from the Corporation
not demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to the Shareholder from the Corporation or from any other person liable or demand or accept any security in respect of the same or assign or charge the same as security;
4.2.8 No set-off or counterclaim
not claim any set-off or counterclaim against the Corporation or any other person liable or claim or prove in competition with the Pledgee in the bankruptcy or liquidation (or equivalent) of the Corporation or any other person liable or have the benefit of, or share in, any payment from or composition with, the Corporation or any other person liable for any Indebtedness of the Corporation or other any person liable but so that, if so directed by the Pledgee, it will prove for the whole or any part of its claim in the liquidation or bankruptcy (or equivalent) of the Corporation on terms that the benefit of such proof and of all money received by it in respect thereof shall be held on trust for the Pledgee and applied in or towards discharge of the liabilities and obligations of the Shareholder to the Pledgee under this Deed in such manner as the Pledgee shall deem appropriate;
4.2.9 No subrogation
not exercise its rights of subrogation, reimbursement and indemnity against the Corporation;
4.2.10 Payments and compositions
not have the benefit of any share in any payment or composition from the Corporation or any other person or in any other guarantee or security now or hereafter held by the Pledgee;
4.2.11 No Encumbrance
not take or receive any Encumbrance from the Corporation in respect of the liability of the Shareholder under this Deed;
4.2.12 FATCA
not (without the prior written consent of the Pledgee) become a FATCA FFI or a US Tax Obligor; and
4.2.13 Reports, etc.
promptly send to the Pledgee a copy of every report or other notice, statement or circular sent or delivered to the Shareholder by the Corporation.
4.3 Further covenants
The Shareholder hereby respectively further covenants and agrees with the Pledgee that:
4.3.1 Powers on default
the Pledgee and its nominees may following the occurrence of any Event of Default exercise in the name of the Shareholder or otherwise at any time whether pursuant to the powers conferred upon the Pledgee under any irrevocable proxy/proxies referred to in clause 4.1.3 and whether before or after demand for payment and without any further consent or authority on the part of the Shareholder in respect of the Shares any voting rights and all powers or rights which may be exercisable by the person in whose name the Shares are registered but such power shall be exercised subject to the provisions of clause 5;
4.3.2 Transfer of Shares to Pledgee
if so requested by the Pledgee, transfer all or any of the Shares to the Pledgee or to its nominees and the Pledgee may hold all or any of the Shares in any branch of the Pledgee or with any correspondents or other agents whether in The Netherlands, Greece or overseas and all the Shares shall be held at the expense and risk of the Shareholder; and
4.3.3 Copies of this Deed
it will file or cause to be filed a copy of this Deed with the Secretary (or other appropriate officer) of the Corporation for the purpose of giving notice of this pledge to the Corporation and that it will obtain and deliver to the Pledgee an acknowledgement of such filing.
5 Dividends and voting rights
5.1 Voting rights
Unless and until an Event of Default has occurred or the Shareholder is in breach of any term of this Deed, the Shareholder shall be entitled to exercise all voting and other rights vested in the holder of the Shares notwithstanding that stock certificates in respect of the Shares are held by the Pledgee provided that the Shareholder shall not exercise such rights in a manner which would
or might derogate from the security created by this Deed or conflict with any provision of any of the Security Documents.
5.2 Dividend rights
If an Event of Default has occurred or the Shareholder is in breach of any term of this Deed, the Pledgee may require that any dividends, interest or other moneys which may be paid or payable in respect of the Secured Property shall be paid to the Pledgee and shall be applied by the Pledgee in or towards payment of the Expenses and the balance shall be applied by the Pledgee in accordance with clause 13.1 of the Loan Agreement. So long as no Event of Default has occurred and the Shareholder is not in breach of any term of this Deed and so long as the payment of any dividends, interest or other moneys does not constitute or give rise to a breach of any provision of the Security Documents, any such dividends shall be paid to the Shareholder.
5.3 Delivery of dividend mandate
Where the Pledgee becomes entitled to receive dividends pursuant to clause 5.2, the Shareholder shall immediately execute and deliver to the Corporation a dividend mandate in the form set out in schedule 7.
5.4 Payment of dividends and interest
Any dividends, interest or other moneys or property hereby charged which may be received by the Shareholder after the power of sale under clause 7.1 has arisen shall be held in trust for the Pledgee and paid or delivered to the Pledgee on demand in writing for application in accordance with clause 5.2.
6 Further assurance
6.1 Execution of further charges
The Shareholder shall, at its own expense at any time if and when required by the Pledgee execute such further legal or other pledges, charges or assignments in favour of the Pledgee as the Pledgee shall from time to time reasonably require over all or any of the Secured Property and all rights relating thereto both present and future (including any substituted securities and any vendor’s lien) and any other transfers or documents the Pledgee may from time to time require for perfecting its title to the same or for vesting or enabling it to vest the same in itself or its nominees or in any purchaser to secure all moneys, obligations and liabilities hereby covenanted to be paid or otherwise hereby secured or to facilitate realisation of the Secured Property or the exercise of the powers conferred on the Pledgee, such further pledges, charges or assignments to be prepared by or on behalf of the Pledgee at the cost of the Shareholder.
6.2 Other matters
The Shareholder also undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Pledgee may be necessary or desirable for the purpose of more effectually pledging, charging or assigning the Secured Property or perfecting the security constituted or intended to be constituted by this Deed.
7 Powers of the Pledgee
7.1 Enforcement
At any time after the occurrence of an Event of Default:
7.1.1 Enforcement
the Pledgee or any person nominated by the Pledgee may exercise, without further notice and without any restrictions in respect of all or any of the Secured Property, all the powers or rights which may be exercisable by the registered holder of the Shares and all other powers conferred on mortgagees by law or otherwise. The Pledgee and/or any person nominated by the Pledgee, wheresoever situate, may, at its discretion, prior to, or after, exercising the rights referred above (a) complete the transfers in respect of the Shares deposited with the Pledgee in accordance with clause 4.1.2 by dating the same and (b) submit all or any of the said transfers together with any stock or share certificates in respect thereof for registration in the name of the Pledgee or any person nominated by the Pledgee; and
7.1.2 Application of dividends and interest
any dividends, interest or other payments which may be received or receivable by the Pledgee or by any nominee in respect of any of the Secured Property may be applied by the Pledgee as though they were proceeds of sale.
7.2 Sale or disposal
In exercising the powers referred to in clause 7.1, the Pledgee may sell or dispose of the Secured Property or any part thereof at such times in such manner for such consideration and generally on such terms and conditions as the Pledgee may think fit (and the Pledgee shall be entitled to purchase any and all of the Secured Property so sold). Any such sale or disposition may be for cash, debentures or other obligations, shares, stock, securities or other valuable consideration and be payable immediately or by instalments spread over such period as the Pledgee shall think fit.
7.3 No enquiry by purchaser
No purchaser or other person shall be bound or concerned to see or enquire whether the right of the Pledgee to exercise any of the powers hereby conferred has arisen nor be concerned with notice to the contrary or with the propriety of the exercise or purported exercise of such powers.
7.4 Application of proceeds
All moneys received by the Pledgee under, or in the exercise of any powers conferred by, this Deed shall be applied in or towards payment of the Expenses and the balance shall be applied in accordance with clause 13.1 of the Loan Agreement.
7.5 Expenses
The Shareholder shall pay to the Pledgee on a full indemnity basis on demand:
7.5.1 all expenses (including legal, printing and out-of-pocket expenses) incurred by the Pledgee in connection with the negotiation, preparation, execution or registration of this Deed and of any amendment or extension or the granting of any waiver or consent under this Deed; and
7.5.2 all expenses (including legal, printing and out-of-pocket expenses) incurred by the Pledgee in contemplation of, or otherwise in connection with, the enforcement or preservation of any rights under this Deed or otherwise in respect of the Outstanding Indebtedness or the security therefor.
7.6 Indemnity
The Shareholder hereby agrees and undertakes to indemnify the Pledgee against all losses, actions, claims, expenses, demands, obligations and liabilities whatsoever and whenever arising which may now or hereafter be incurred by the Pledgee or by any manager, agent, officer or employee of the Pledgee for whose liability, act or omission it or they or any of them may be answerable, in respect of, in relation to or in connection with anything done or omitted in the exercise or purported exercise of the powers contained in this Deed or otherwise in connection therewith and herewith or with any part of the Secured Property or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in any of the Security Documents.
7.7 Liability of Pledgee
The Pledgee shall not be liable to account as mortgagee in possession in respect of all or any of the Secured Property and shall not be liable for any loss upon realisation or for any neglect or default to present any interest coupon or any bond or stock drawn for repayment or for any failure to pay any call or instalment or to accept any offer or to notify the Shareholder of any such matter or for any other loss of any nature whatsoever in connection with the Secured Property.
8 Attorney
8.1 Power of attorney
The Shareholder by way of security hereby irrevocably appoints the Pledgee to be its attorney in its name and on its behalf and as its act and deed or otherwise to execute, seal, deliver and complete any transfers or other documents which the Pledgee may require for perfecting its title to or for vesting the Shares both present and future in the Pledgee or its nominees or in any purchaser and to make any alteration or addition to the Shares comprised therein or any other alteration or addition and to re-deliver the same thereafter and otherwise generally to sign, seal, deliver and otherwise perfect any such transfers or other documents and any legal or other pledges or assignments over the Shares referred to in clause 6 and to do all such acts and things as may be required for the full exercise of the powers hereby conferred including any sale or other disposition realisation or getting in of the Secured Property and the Shareholder ratifies and confirms, and agrees to ratify and confirm any deed, assurance, agreement, instrument, act or thing which any such attorney may lawfully execute or do. The appointment of the Pledgee by the Shareholder as its attorney is irrevocable and coupled with an interest. Provided always that such power shall not be exercisable until the occurrence of an Event of Default.
8.2 Dealings with attorneys
The exercise of such power by or on behalf of the Pledgee shall not put any person dealing with the Pledgee upon any enquiry as to whether an Event of Default has occurred, nor shall such person be in any way affected by notice that no such event has occurred, and the exercise by the Pledgee of such power shall constitute conclusive evidence of its right to exercise the same.
8.3 Filings
The Shareholder hereby irrevocably appoints the Pledgee to be its attorney in its name and on its behalf and as its act and deed or otherwise of it to agree the form of and to do and execute all deeds, instruments, acts and things to file, record, register or enrol this Deed which the Pledgee may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence hereof.
9 Continuing security and other matters
9.1 Continuing security
It is agreed that the security created by this Deed and the obligations and liabilities of the Shareholder and rights, remedies and powers of the Pledgee hereunder:
9.1.1 shall be held by the Pledgee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions contained in the Security Documents, express or implied;
9.1.2 shall be in addition to and shall not prejudice or affect and may be enforced by the Pledgee without prior recourse to, the security created by any other of the Security Documents or by any present or future Collateral Instruments right or remedy held by or available to the Pledgee or the Secured Creditors or any of them or any right or remedy of the Pledgee or the Secured Creditors or any of them thereunder;
9.1.3 may be enforced by the Pledgee without prior recourse to any such security or guarantee as is referred to in clause 9.1.2 and the Shareholder waives all rights it may have of first requiring the Pledgee or the Secured Creditors or any of them to enforce any such security or guarantee or to proceed against or claim payment from the Corporation or any other person;
9.1.4 shall not be satisfied by any intermediate payment or satisfaction of any part of the Outstanding Indebtedness or by any settlement of accounts between the Corporation, the Shareholder or any other person who may be liable to the Pledgee or the Secured Creditors or any of them in respect of the Outstanding Indebtedness or any part thereof and the Pledgee or the Secured Creditors or any of them;
9.1.5 shall not in any way be prejudiced or affected by any time, indulgence or relief being given by the Pledgee or the Secured Creditors or any of them to the Corporation or any other person, by any amendment or supplement to the Loan Agreement, any of the other Security Documents or any other document, by the taking, variation, compromise, renewal or release of, or refusal or neglect to perfect or enforce, any right, remedy or security against the Corporation or any other person or by anything done or omitted which but for this provision might operate to exonerate the Shareholder; and
9.1.6 shall not in any way be prejudiced or affected by any change in the constitution of, or any amalgamation or reconstruction of the Corporation, the Pledgee or any other person or by any legal limitation, disability, incapacity or other circumstances relating to the Corporation or any other person, whether or not known to the Pledgee, by any invalidity or irregularity or unenforceability of the obligations of the Corporation or any other person under the Loan Agreement or any of the other Security Documents or otherwise; and so that in the event that any obligation or purported obligation of the Corporation or any other person which, if enforceable or valid or continuing, would be secured by this Deed is or becomes wholly or in part unenforceable or invalid or terminated for any reason whatsoever, the Shareholder will keep the Pledgee fully indemnified against any loss suffered by the Pledgee as a result of any failure by the Corporation or such other party to perform any such obligation or purported obligation.
9.2 Rights additional
All the rights, remedies and powers vested in the Pledgee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Pledgee and/or the Secured Creditors or any of them under this Deed, the Loan Agreement, the other Security Documents or at law and all the powers so vested in the Pledgee may be exercised from time to time and as often as the Pledgee may deem expedient.
9.3 No enquiry
The Pledgee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Deed or to make any claim or take any action to collect any moneys receivable by the Pledgee in the exercise of any powers conferred by this Deed or to enforce any rights or benefits hereby assigned to the Pledgee or to which the Pledgee may at any time be entitled under this Deed.
9.4 Suspense account
Any moneys received by virtue of or in connection with the security created by this Deed may be placed to the credit of a suspense account with a view to preserving the rights of the Pledgee to prove for the whole of the Outstanding Indebtedness against the Corporation or any other person liable in the event of any proceedings in, or analogous to, liquidation, composition or arrangement.
9.5 Settlements conditional
Any release, discharge or settlement between the Shareholder and the Pledgee shall be conditional upon no security, disposition or payment to the Pledgee by the Corporation, the Shareholder or any other person being void or set aside or ordered to be refunded pursuant to any provisions or enactments relating to bankruptcy, liquidation, administration or insolvency or for any other reason whatsoever and if such condition shall not be fulfilled, the Pledgee shall be entitled to enforce the security created by this Deed and the other Security Documents as if such release, settlement or discharge had not occurred and any such payment had not been made.
9.6 No responsibility for loss
The Pledgee shall not be responsible for any loss occasioned by the timing of the exercise of its powers under this Deed.
10 Discharge of security
On payment of the Outstanding Indebtedness in full the security hereby constituted shall terminate and the Pledgee shall, at the request and cost of the Shareholder, deliver, transfer or cause to be released to the Shareholder or to such person or persons as the Shareholder shall direct the documents and other articles referred to in clause 4.1 and release and retransfer the Secured Property to the Shareholder or to such person or persons as the Shareholder shall direct, free and discharged from the security hereby constituted.
11 Certificates
Any certificates or determination of the Pledgee as to the amount owing by the Shareholder to the Pledgee under, or secured by, this Deed shall, in the absence of manifest error, be conclusive and binding on and against the Shareholder.
12 Payments
12.1 No deductions
All payments to be made by the Shareholder under this Deed shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 12.2, free and clear of any deductions or withholdings, in Dollars on the due date to such account as the Pledgee shall from time to time notify to the Shareholder.
12.2 Grossing-up for Taxes
If at any time the Shareholder is required to make any deduction or withholding in respect of Taxes from any payment due under this Deed for the account of the Pledgee, the sum due from the Shareholder in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Pledgee receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made and the Shareholder shall indemnify the Pledgee against any losses or costs incurred by reason of any failure of the Shareholder to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Shareholder shall promptly deliver to the Pledgee any receipts, certificates or other proof evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
12.3 Currency indemnity
If any sum due from the Shareholder under this Deed or any order or judgment given or made in relation hereto has to be converted from the currency (the “first currency”) in which the same is payable under this Deed or under such order or judgment into another currency (the “second currency”) for the purpose of (a) making or filing a claim or proof against the Shareholder, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to this Deed, the Shareholder shall indemnify and hold harmless the Pledgee from or against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the Pledgee may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. Any amount due from the Shareholder under this clause 12.3 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Deed and the term “rate of exchange” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
13 Notices and other matters
13.1 Notices
The provisions of clause 17.1 of the Loan Agreement shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Deed save that any references therein to “this Agreement” and the “Security Agent” shall be construed herein as references to this Deed and the Pledgee, respectively, and save further that any certificate, advice, demand or other communication shall be sent, if to be sent to the Shareholder, at:
c/o Quintana Ship Management Ltd. | ||
5 Xenias Street | ||
145 62 Kifissia | ||
Greece | ||
| ||
Fax: |
| +30 210 62 34 493 |
Attention: |
| Ms Viktoria Poziopoulou |
13.2 No waiver
No failure or delay by the Pledgee in exercising any right, power or remedy vested in it under this Deed shall operate as a waiver thereof nor shall any single or partial exercise or waiver of any
right, power or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy. The remedies provided in this Deed are cumulative and are not exclusive of any remedies provided by law.
13.3 Severability
Each of the provisions of this Deed is severable and distinct from the others and if at any time one or more of such provisions is or becomes invalid illegal or unenforceable the validity legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
13.4 Delegation of powers
The Pledgee shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by this Deed (including the power vested in it by virtue of clause 8) in such manner, upon such terms, and to such person as the Pledgee in its absolute discretion may think fit.
13.5 Benefit of this Deed
This Deed shall be binding on, and enure for the benefit of, the Shareholder and the Pledgee and their respective successors and, in the case of the Pledgee, its assignees and/or replacements. The Shareholder expressly acknowledges and accepts the provisions of clause 16.14 of the Loan Agreement and agrees that any person who replaces the Pledgee in accordance with such clause shall be entitled to the benefit of this Deed.
13.6 Assignment by Shareholder
The Shareholder may not assign or transfer any of its rights or obligations under this Deed.
13.7 Disclosure of information
The Pledgee may disclose to any of its Related Companies, any Secured Creditor and to the following other persons:
13.7.1 any person to (or through) whom the Pledgee transfers its duties as security agent and trustee or to (or through) whom a Secured Creditor assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under the Loan Agreement;
13.7.2 any person with (or through) whom a Bank enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, the Loan Agreement;
13.7.3 any person to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation;
13.7.4 any Builder or any Refund Guarantor or the Seller or any Contract Guarantor or any employee, officer, director or representative of a Secured Creditor which needs to know such information or receive such document in the course of such person’s employ or duties;
13.7.5 auditors, insurance and reinsurance brokers, insurers and reinsurers or other professional advisers (including legal advisers);
13.7.6 any person who has entered into a confidentiality undertaking substantially in a recommended form of the Loan Market Association;
13.7.7 any other person who may propose entering or may enter into contractual relations with the Pledgee;
any information about the Shareholder, this Deed, the Corporation and the Shares as the Pledgee shall decide.
14 Law and jurisdiction
14.1 Law
This Deed and any non-contractual obligations connected with this Deed are governed by and shall be construed in accordance with English law.
14.2 Submission to jurisdiction
For the benefit of the Pledgee, the parties hereto irrevocably agree that any legal action or proceedings arising out of or in connection with this Deed and/or any non-contractual obligations connected with this Deed against the Shareholder or its assets may be brought in the courts of England or in the courts of any other country chosen by the Pledgee, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Deed and/or any non-contractual obligations connected with this Deed. The Shareholder hereby unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive, for it and on its behalf, service of process issued out of the courts of England in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Pledgee to take proceedings against the Shareholder in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The Shareholder further agrees that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Shareholder may have against the Pledgee arising out of or in connection with this Deed and/or any non-contractual obligations connected with this Deed.
14.3 Contracts (Rights of Third Parties) Act 1999
No term of this Deed is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Deed.
IN WITNESS whereof the parties hereto have caused this Deed to be duly executed as a deed the day and year first before written.
Schedule 1
The Shares
Name of Shareholder |
| Certificate nos. |
| No. of stocks/shares etc. |
| Par value of each |
|
QUINTANA SHIPPING LTD. |
| [1] |
| [500] |
| no par value |
|
Schedule 2
Specimen instrument of transfer
Stock Power
FOR VALUE RECEIVED [·] hereby sell, assign and transfer unto [please insert Social Security or other identifying number of assignee] ( ) Shares of the Capital Stock of Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. standing in my (our) name(s) on the books of the said Corporation represented by Certificate(s) No(s). herewith, and do hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the said Corporation with full power of substitution in the premises.
Dated
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For and on behalf of |
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QUINTANA SHIPPING LTD. |
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In the presence of: |
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Schedule 3
Shareholder’s letter of authority
To: ABN AMRO Bank N.V.
Date: [·]
Dear Sirs
Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. (the “Corporation”)
We hereby unconditionally and irrevocably authorise you to date and otherwise complete the stock transfer form[s] in respect of our shares in the Corporation deposited by ourselves with yourselves pursuant to the pledge dated [·] 2013 (the “Pledge”) between (1) ourselves Quintana Shipping Ltd. and (2) yourselves, as and when you become entitled to date and complete the same pursuant to the terms of the Pledge.
Yours faithfully
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QUINTANA SHIPPING LTD. |
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Schedule 4
Form of irrevocable proxy
We, QUINTANA SHIPPING LTD. hereby irrevocably appoint ABN AMRO BANK N.V. as our proxy to vote at meetings of the Shareholders of Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. (the “Corporation”) in respect of any existing or further shares in the Corporation which may have been or may from time to time be issued to us and/or registered in our name. This proxy is irrevocable by reason of being coupled with the interest of ABN AMRO BANK N.V. as chargee of the aforesaid shares.
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QUINTANA SHIPPING LTD. |
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Dated: [·] |
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Schedule 5
Directors’ resignation letter
To: | The Secretary and Directors, |
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| Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. (the “Corporation”) |
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Date: [·] | ||
Dear Sirs
I hereby resign as a director/officer of the Corporation and confirm that I have no right to compensation or claims against the Corporation for loss of office, arrears of pay or otherwise howsoever.
Yours faithfully,
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Schedule 6
Directors’ letter of authority
To: | ABN AMRO Bank N.V. | |
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Date: [·] 2013 | ||
Dear Sirs
Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. (the “Corporation”)
I hereby unconditionally and irrevocably authorise you to date the resignation letter in respect of the Corporation deposited by me with you pursuant to the pledge dated [·] 2013 (the “Pledge”) between Quintana Shipping Ltd. and yourselves, as and when you wish to do so following an Event of Default (as defined or referred to in the Pledge).
Yours faithfully,
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Schedule 7
Form of dividend mandate
To: | Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. |
Dividend Mandate
With effect from today’s date and pending receipt by you of instructions from ourselves and ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands, to the contrary we, QUINTANA SHIPPING LTD., hereby authorise and direct you to pay any dividends, interest or other moneys paid or payable on the shares in Q [Amreen] [Anastasia] [Houston] [Kaki] Shipping Ltd. registered in our name to or to the order of ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands. On receipt of this mandate please acknowledge to ABN AMRO BANK N.V. at the above address that you will act in accordance with the instructions contained herein.
Dated: [·]
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For and on behalf of |
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QUINTANA SHIPPING LTD. |
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EXECUTED as a DEED by | ) |
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for and on behalf of | ) |
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QUINTANA SHIPPING LTD. | ) |
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in the presence of: | ) | Attorney-in-fact |
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Witness |
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Name: |
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Address: |
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Occupation: |
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EXECUTED as a DEED by | ) |
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for and on behalf of | ) |
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ABN AMRO BANK N.V. | ) |
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in the presence of: | ) | Attorney-in-fact |
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Witness |
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Name: |
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Address: |
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Occupation: |
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Private & Confidential
Dated August 2013
[Q A MARITIME LTD.] |
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[Q IOANARI SHIPPING LTD] |
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[Q JAKE SHIPPING LTD.] |
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[Q SHEA SHIPPING LTD.] | (1) |
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to |
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ABN AMRO BANK N.V. | (2) |
THIRD PREFERRED MARSHALL ISLANDS SHIP
MORTGAGE on
m.v. [Q Arion] [Q Ioanari] [Q Jake] [Q Shea]
Contents
Clause |
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1 | Definitions | 2 | |
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2 | Grant, conveyance and mortgage | 7 | |
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3 | Covenants to pay and perform | 7 | |
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4 | Continuing security and other matters | 8 | |
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5 | Covenants | 9 | |
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6 | Powers of Mortgagee to protect security and remedy defaults | 16 | |
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7 | Powers of Mortgagee on Event of Default | 17 | |
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8 | Application of moneys | 18 | |
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9 | Remedies cumulative and other provisions | 18 | |
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10 | Costs and indemnity | 19 | |
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11 | Attorney | 19 | |
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12 | Further assurance | 20 | |
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13 | Total amount and maturity | 20 | |
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14 | Law, jurisdiction and other provisions | 20 | |
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15 | Other provisions | 21 | |
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16 | Notices | 21 | |
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Schedule 1 The Loan Agreement | 23 | ||
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Schedule 2 The Corporate Guarantee | 24 | ||
THIS THIRD PREFERRED SHIP MORTGAGE is made the day of August 2013 BY:
(1) [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.], a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”)
IN FAVOUR OF
(2) ABN AMRO BANK N.V., a company incorporated in The Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, for itself and as security agent and trustee for and on behalf of the Secured Creditors (as defined below) (the “Mortgagee”).
WHEREAS:
(A) the Owner is the sole, absolute and (save for the First Mortgage and the Second Mortgage each hereinafter mentioned) unencumbered, legal and beneficial owner of the whole of m.v. [Q Arion] [Q Ioanari] [Q Jake] [Q Shea] documented under the laws and flag of the Republic of the Marshall Islands, with Official Number [4434] [4288] [4365] [4719] of [42,917] [44,625] [42,917] [40,717] gross tons and [26834] [27237] [26824] [25762] net tons;
(B) the Ship (as such term is defined below) is subject to the First Mortgage and subject to the Second Mortgage each as described in clause 1.2;
(C) by a loan agreement dated August 2013 (the “Loan Agreement”) and made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd. as joint and several borrowers (therein and herein referred to as the “Borrowers”), (2) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”) and (3) ABN AMRO Bank N.V. as arranger, agent (in such capacity the “Agent” and, together with the Banks, the “Secured Creditors”), security agent and account bank (a copy of the form of which Loan Agreement without its schedules is annexed hereto as schedule 1 and forms an integral part hereof), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, jointly and severally, upon the terms and conditions therein contained, the principal sum of up to Thirty one million forty thousand Dollars ($31,040,000);
(D) by a corporate guarantee (the “Corporate Guarantee”) dated August 2013 made between the Owner (therein referred to as the “Guarantor”) and the Mortgagee (a copy of the form of which Corporate Guarantee is annexed hereto as schedule 2 and forms an integral part hereof), the Owner (inter alia) guaranteed the payment of any money owing by the Borrowers or any of them to the Secured Creditors under the Loan Agreement and the other Security Documents;
(E) pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Mortgagee as its security agent and trustee and pursuant to a deed of trust dated August 2013 executed by the Mortgagee (as trustee) in favour of the Secured Creditors, the Mortgagee agreed to hold, receive, administer and enforce this Mortgage for and on behalf of itself and the Secured Creditors;
(F) pursuant to the said Loan Agreement, the Banks have agreed to advance to the Borrowers (and the Borrowers are indebted to the Banks in) a total principal amount of up to Thirty one million forty thousand Dollars ($31,040,000) which (together with interest (as provided in clause 3.1 of the said Loan Agreement) thereon and fees) is to be repaid and paid, as the case may be, as provided in the Loan Agreement;
(G) the Owner, in order to secure the payment of all sums of money from time to time owing to the Mortgagee and the Secured Creditors or any of them under the Corporate Guarantee and the performance and observance of and compliance with all of the covenants, terms and conditions contained in this Mortgage and the Corporate Guarantee and the other Security Documents to which the Owner is a party, has duly authorised the execution and delivery of this Third Preferred Mortgage under and pursuant to Chapter 3 of the Maritime Act of 1990 (as amended) of the Republic of the Marshall Islands; and
(H) this is the [Q Arion] [Q loanari] [Q Jake] [Q Shea] Mortgage referred to in the Loan Agreement.
NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:
1 Definitions
1.1 Defined expressions
Words and expressions defined in the Loan Agreement and/or the Corporate Guarantee shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Mortgage.
1.2 Definitions
In this Mortgage unless the context otherwise requires:
“Agent” includes its successors in title, assignees and/or its replacements;
“Approved Brokers” means such firm of insurance brokers, appointed by the Owner, as may from time to time be approved in writing by the Mortgagee for the purposes of this Mortgage;
“Banks” includes their respective successors in title and Transferees;
“Casualty Amount” means Five hundred thousand Dollars ($500,000) (or the equivalent amount in any other currency or currencies);
“Collateral Instruments” means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or any of them or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind;
“Corporate Guarantee” means the corporate guarantee dated August 2013 made between the Owner and the Mortgagee, as mentioned in recital (D) as may be amended and/or supplemented and/or novated from time to time;
“Earnings” means all moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys, and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;
“Event of Default” means any of the events or circumstances described in clause 10.1 of the Loan Agreement;
“Expenses” means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Mortgagee) of:
(a) all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature, (including, without limitation, Taxes, repair costs, registration fees and insurance premiums) suffered, incurred or paid by the Mortgagee or any of the Secured Creditors in connection with the exercise of the powers referred to in or granted by the Corporate Guarantee, the Loan Agreement, this Mortgage, the General Assignment or any other of the Security Documents or otherwise payable by the Owner in accordance with clause 10 of this Mortgage or clause 8 of the General Assignment; and
(b) interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Mortgagee or the relevant Secured Creditors until the date of receipt or recovery thereof (whether before or after judgement) at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee);
“First General Assignment” means the first priority deed of assignment dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] made between the Owner and the First Mortgagee collateral to the First Mortgage whereby the Owner has assigned to the First Mortgagee the Insurances, any Requisition Compensation and the Earnings (as each such term is defined therein);
“First Mortgage” means the first preferred Marshall Islands ship mortgage dated [7 September 2011 and executed by the Owner in favour of the First Mortgagee in respect of the Ship (as such term is defined below) which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 669 on 7 September 2011 at 05:21 A.M., E.E.S.T. and which was amended by an Amendment No. 1 dated 14 June 2012 made between the Owner and the First Mortgagee which Amendment No. 1 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 525 on 14 June 2012 at 09:34 A.M., E.E.S.T.] [29 September 2011 and executed by the Owner in favour of the First Mortgagee in respect of the Ship (as such term is defined below) which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 688 on 29 September 2011 at 09:47 A.M., E.E.S.T. and which was amended by an Amendment No. 1 dated 14 June 2012 made between the Owner and the First Mortgagee which Amendment No. 1 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 526 on 14 June 2012 at 09:34 A.M., E.E.S.T.] [10 June 2011 and executed by the Owner in favour of the First Mortgagee in respect of the Ship (as such term is defined below) which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 398 on 10 June 2011 at 01:51 P.M., E.E.S.T. and which was amended by an Amendment No. 1 dated 2 September 2011 made between the Owner and the First Mortgagee which Amendment No. 1 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 663 on 2 September 2011 at 04:16 P.M., E.E.S.T. and which was further amended by an Amendment No. 2 dated 14 June 2012 made between the Owner and the First Mortgagee which Amendment No. 2 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 527 on 14 June 2012 at 09:34 A.M., E.E.S.T.] [19 June 2012 and executed by the Owner in favour of the First Mortgagee in respect of the Ship (as such term is defined below) which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 530 on 19 June 2012 at 08:43 A.M., E.E.S.T.];
“First Mortgagee” means ABN AMRO Bank N.V., a company incorporated in the Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, as security agent and trustee for and on behalf of the Secured Creditors (as defined in the First Mortgage);
“First Security Documents” means, together, the First Mortgage and the First General Assignment;
“General Assignment” means the third priority deed of assignment bearing even date herewith made between the Owner and the Mortgagee whereby the Owner has assigned to the Mortgagee the Insurances, any Requisition Compensation and the Earnings;
“Guaranteed Liabilities” shall have the meaning ascribed thereto in the Corporate Guarantee;
“Insurances” means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the Owner and the Mortgagee or otherwise) in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and returns of premia);
“Loan” means the total principal amount of up to Thirty one million forty thousand Dollars ($31,040,000) referred to in Recital (C) hereto advanced by the Banks to the Borrowers pursuant to the Loan Agreement or (as the context may require) the amount thereof at any time advanced and outstanding;
“Loan Agreement” means the agreement dated August 2013 and as mentioned in recital (C) hereto;
“Loss Payable Clauses” means the provisions regulating the manner of payment of sums receivable under the Insurances which are to be incorporated in the relevant insurance documents, such provisions to be in the forms set out in schedule 1 to the General Assignment or in such other forms as may from time to time be agreed in writing by the Mortgagee;
“Mortgagee” includes the successors in title, assignees and/or replacements of the Mortgagee;
“Notice of Assignment of Insurances” means a notice of assignment in the form set out in schedule 2 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Mortgagee;
“Outstanding Indebtedness” means the aggregate of the Guaranteed Liabilities and interest accrued and accruing thereon, the Expenses and all other sums of money from time to time owing to the Mortgagee or the Secured Creditors or any of them, whether actually or contingently, under the Corporate Guarantee and/or the other Security Documents or any of them;
“Owner” includes the successors in title of the Owner;
“Permitted Encumbrance” means any Encumbrance in favour of the Mortgagee created pursuant to the Security Documents, any Encumbrance in favour of the First Mortgagee created pursuant to the First Security Documents, any Encumbrance in favour of the Second Mortgagee created pursuant to the Second Security Documents and Permitted Liens;
“Requisition Compensation” means all sums of money or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of the Ship;
“Second General Assignment” means the second priority deed of assignment dated 23 October 2012 made between the Owner and the Second Mortgagee collateral to the Second Mortgage whereby the Owner has assigned to the Second Mortgagee the Insurances, any Requisition Compensation and the Earnings (as each such term is defined therein);
“Second Mortgage” means the second preferred Marshall Islands ship mortgage dated 23 October 2012 and executed by the Owner in favour of the Second Mortgagee in respect of the Ship (as such term is defined below) which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM23 at Page [943][946][945][944] on 23 October 2012 at 05:06 P.M., E.E.S.T.
“Second Mortgagee” means ABN AMRO Bank N.V., a company incorporated in the Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, as security agent and trustee for and on behalf of the Secured Creditors (as defined in the Second Mortgage);
“Second Security Documents” means, together, the Second Mortgage and the Second General Assignment;
“Secured Creditors” means, together, the Agent and the Banks and “Secured Creditor” means any of them;
“Security Documents” means the Corporate Guarantee, the Loan Agreement, this Mortgage, the General Assignment and any other such document as is defined in the Loan Agreement as a Security Document or as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Guaranteed Liabilities, the Loan, interest thereon and other moneys from time to time owing by the Borrowers and/or by any other Security Party (including the Owner) pursuant to the Loan Agreement and/or the Corporate Guarantee and/or the other Security Documents or any of them (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement);
“Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder;
“Ship” means the vessel described in recital (A) hereto and includes any interest therein and her engines, machinery, boats, tackle, outfit, equipment, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and also any and all additions, improvements and replacements hereafter made in or to such vessel or any part thereof or in or to her equipment and appurtenances aforesaid; and
“Total Loss” means:
(a) the actual, constructive, compromised or arranged total loss of the Ship; or
(b) the Compulsory Acquisition of the Ship; or
(c) the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of the Ship) by any person, including by any Government Entity or by persons acting or purporting to act on behalf of any Government Entity, unless the Ship be released and restored to the Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof.
1.3 Insurance terms
In clause 5.1.1:
1.3.1 “excess risks” means the proportion (if any) of claims for general average, salvage and salvage charges and under the ordinary collision clause not recoverable in consequence of the value at which the Ship is assessed for the purpose of such claims exceeding her insured value;
1.3.2 “protection and indemnity risks” means the usual risks (including oil pollution and freight, demurrage and defence cover) covered by a United Kingdom protection and indemnity association or a protection and indemnity association which is managed in London (including, without limitation, the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in such policies of Clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision which may be insured by entry with such an association); and
1.3.3 “war risks” includes those risks covered by the standard form of English marine policy with Institute War and Strikes Clauses Hulls-Time (1/11/95) attached or similar cover.
1.4 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Mortgage.
1.5 Construction of certain terms
In this Mortgage, unless the context otherwise requires:
1.5.1 references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Mortgage and references to this Mortgage include its schedules;
1.5.2 references to (or to any specified provision of) this Mortgage or any other document shall be construed as references to this Mortgage, that provision or that document as in force for the time being and as amended in accordance with the terms thereof or, as the case may be, with the agreement of the relevant parties;
1.5.3 words importing the plural shall include the singular and vice versa;
1.5.4 references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
1.5.5 references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and
1.5.6 references to statutory provisions shall be construed as references to those provisions as replaced or amended or re-enacted from time to time.
1.6 Conflict with Loan Agreement and Corporate Guarantee
This Mortgage shall be read together with the Loan Agreement and the Corporate Guarantee but in case of any conflict between (a) either of such two instruments and (b) this Mortgage, the
provisions of the former shall prevail over the provisions of the latter provided however that this Mortgage shall always be governed solely and exclusively by Marshall Islands law.
2 Grant, conveyance and mortgage
For good and valuable consideration (receipt of which is hereby acknowledged by the Owner) and, pursuant to the Corporate Guarantee and in order to secure the repayment of the Outstanding Indebtedness and to secure the performance and observance of and compliance with the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee and the Loan Agreement, express or implied, the Owner has granted, conveyed and mortgaged, subject and subordinate to all terms, provisions and conditions of the First Mortgage and the Second Mortgage, and does by these presents grant, convey and mortgage unto the Mortgagee, the whole of the Ship TO HAVE AND TO HOLD the same unto the Mortgagee forever, upon the terms herein set forth, for the enforcement of the payment of the Outstanding Indebtedness and to secure the performance and observance of and compliance with the covenants, terms and conditions contained in this Mortgage, the Corporate Guarantee and the Loan Agreement, express or implied.
PROVIDED ONLY, and the condition of these presents is such that, if the Owner shall pay or cause to be repaid to the Mortgagee, the Outstanding Indebtedness as and when the same shall become due and payable in accordance with the terms of the Corporate Guarantee and this Mortgage and shall observe and comply with the covenants, terms and conditions contained in the Corporate Guarantee and this Mortgage, expressed or implied, to be performed, observed or complied with, by and on the part of the Owner, then these presents and the rights hereunder shall cease, determine and be void, otherwise to be and remain in full force and effect.
IT IS NOT INTENDED that this Mortgage shall cover, and this Mortgage shall not cover, property other than the Ship as the term “Vessel” is used in Section 308(2) of Chapter 3 of the Maritime Act of 1990 (as amended) of the Republic of the Marshall Islands.
3 Covenants to pay and perform
3.1 For the consideration aforesaid the Owner hereby covenants with the Mortgagee as follows:
3.1.1 the Owner will pay to the Mortgagee any sums payable by the Owner pursuant to the Corporate Guarantee at the times and in the manner specified in the Corporate Guarantee;
3.1.2 the Owner will pay to the Mortgagee interest on any such sums and overdue interest or other moneys payable under the Corporate Guarantee at the rates, at the times and in the manner specified in the Corporate Guarantee;
3.1.3 the Owner will pay the full amount of all other moneys comprising the Outstanding Indebtedness as and when the same shall become due and payable in accordance with the terms of the Corporate Guarantee and this Mortgage;
3.1.4 the Owner will pay interest at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee) on any moneys which are by this Mortgage expressed to be payable on demand and which are not paid forthwith on demand being made as from the date of demand until payment (both before and after any judgment) provided however that this provision shall not affect the right of the Mortgagee to receive that part of its Expenses as comprises interest from such date prior to demand being made as is referred to in the definition of Expenses; and
3.1.5 the Owner will keep, perform and observe the covenants and provisions of the Corporate Guarantee.
4 Continuing security and other matters
4.1 Continuing security
The security created by this Mortgage shall:
4.1.1 be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions contained in the Corporate Guarantee, the Loan Agreement or this Mortgage, express or implied, and the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or any other person who may be liable to the Mortgagee and/or the Secured Creditors or any of them in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee and/or the Secured Creditors or any of them);
4.1.2 be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Mortgagee without prior recourse to, the security created by any of the other Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee and/or the Secured Creditors or any of them or any right or remedy of the Mortgagee and/or the Secured Creditors or any of them thereunder; and
4.1.3 not be in any way prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee and/or the Secured Creditors or any of them dealing with, exchanging, varying or failing to perfect or enforce any of the same, or giving time for payment or performance or indulgence or compounding with any other person liable.
4.2 Rights additional
All the rights, powers and remedies vested in the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee and/or the Secured Creditors under the Corporate Guarantee, the Loan Agreement, this Mortgage, the other Security Documents or any Collateral Instrument or at law and all the rights, powers and remedies so vested in the Mortgagee may be exercised from time to time and as often as the Mortgagee may deem expedient.
4.3 No enquiry
The Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under this Mortgage or to make any claim or take any action to collect any moneys or to enforce any rights or benefits to which the Mortgagee may at any time be entitled under this Mortgage.
4.4 Waiver of rights
The Owner hereby waives any rights under the provisions of the laws of a given country which require the Mortgagee to levy execution against the Owner or make any demand or claim against the Owner prior to the enforcement of rights under this Mortgage.
5 Covenants
5.1 The Owner further covenants with the Mortgagee and undertakes throughout the Security Period:
5.1.1 Insurance
(a) Insured risks, amounts and terms
to insure and keep the Ship insured free of cost and expense to the Mortgagee and in the sole name of the Owner or, if so required by the Mortgagee (and permitted by the First Mortgage and the Second Mortgage), in the joint names of the Owner and the Mortgagee (but without liability on the part of the Mortgagee for premiums or calls):
(i) against fire and usual marine risks (including, without limitation, hull and machinery, interest, freight and excess risks) and war risks, on an agreed value basis, in such amounts and upon such terms as shall from time to time be approved in writing by the Mortgagee;
(ii) against protection and indemnity risks (including pollution risks for the highest amount in respect of which cover is or may become available for ships of the same type, size, age and flag as the Ship and a freight, demurrage and defence cover) for the full value and tonnage of the Ship (as approved in writing by the Mortgagee) and upon such terms as shall from time to time be approved in writing by the Mortgagee; and
(iii) in respect of such other matters of whatsoever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of the Ship,
and to pay to the Mortgagee the cost (as conclusively certified by the Mortgagee) of (A) any mortgagee’s interest insurance (including, if the Mortgagee shall so require, mortgagee’s additional perils (all P&I risks) coverage) which the Mortgagee may from time to time effect in respect of the Ship upon such terms in such amounts as it shall deem desirable and (B) any other insurance cover which the Mortgagee may from time to time effect in respect of the Ship and/or in respect of its interest or potential third party liability as mortgagee of the Ship as the Mortgagee shall deem desirable having regard to any limitations in respect of amount or extent of cover which may from time to time be applicable to any of the other insurances referred to in this clause 5.1.1(a);
(b) Approved brokers, insurers and associations
to effect the insurances aforesaid in such currency as the Mortgagee may approve and through the Approved Brokers and with such insurance companies and/or underwriters as shall from time to time be approved in writing by the Mortgagee; provided however that the insurances against war risks and protection and indemnity risks may be effected by the entry of the Ship with such war risks and protection and indemnity associations as shall from time to time be approved in writing by the Mortgagee;
(c) Fleet liens, set-off and cancellation
if any of the insurances referred to in clause 5.1.1(a) form part of a fleet cover, to procure that the Approved Brokers shall undertake to the Mortgagee that they shall neither set off against any claims in respect of the Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurances for reason of non-payment of premiums for other vessels under such fleet
cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of the Ship if and when so requested by the Mortgagee;
(d) Payment of premiums and calls
punctually to pay all premiums, calls, contributions or other sums payable in respect of all such insurances and to produce all relevant receipts or other evidence of payment when so required by the Mortgagee;
(e) Renewal
at least fourteen (14) days before the relevant policies, contracts or entries expire, to notify the Mortgagee of the names of the brokers and/or the war risks and protection and indemnity associations proposed to be employed by the Owner or any other party for the purposes of the renewal of such insurances and of the amounts in which such insurances are proposed to be renewed and the risks to be covered and, subject to compliance with any requirements of the Mortgagee pursuant to this clause 5.1.1, to procure that appropriate instructions for the renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or to the approved war risks and protection and indemnity associations at least ten (10) days before the relevant policies, contracts or entries expire, and that the Approved Brokers and/or the approved war risks and protection and indemnity associations will at least seven (7) days before such expiry (or within such shorter period as the Mortgagee may from time to time agree) confirm in writing to the Mortgagee as and when such renewals have been effected in accordance with the instructions so given;
(f) Guarantees
to arrange for the execution and delivery of such guarantees or indemnities as may from time to time be required by any protection and indemnity or war risks association;
(g) Hull policy documents, notices, loss payable clauses and brokers’ undertakings
to deposit with the Approved Brokers (or procure the deposit of) all slips, cover notes, policies, certificates of entry or other instruments of insurance from time to time issued in connection with such of the insurances referred to in clause 5.1.1(a) as are effected through the Approved Brokers and procure that the interest of the Mortgagee shall be endorsed thereon by incorporation of the relevant Loss Payable Clause and, where the Insurances have been assigned to the Mortgagee, by means of a Notice of Assignment of Insurances (signed by the Owner and by any other assured who shall have assigned its interest in the Insurances to the Mortgagee) and that the Mortgagee shall be furnished with pro forma copies thereof and a letter or letters of undertaking from the Approved Brokers in such form as shall from time to time be required by the Mortgagee;
(h) Associations’ loss payable clauses, undertakings and certificates
to procure that any protection and indemnity and/or war risks associations in which the Ship is for the time being entered shall endorse the relevant Loss Payable Clause on the relevant certificate of entry or policy and shall furnish the Mortgagee with a copy of such certificate of entry or policy and a letter or letters of undertaking in such form as shall from time to time be required by the Mortgagee;
(i) Extent of cover and exclusions
to take all necessary action and comply with all requirements which may from time to time be applicable to the Insurances (including, without limitation, the making of all requisite declarations within any prescribed time limits and the payment of any additional premiums or calls) so as to ensure that the Insurances are not made subject to any exclusions or qualifications to which the Mortgagee has not given its prior written consent and are otherwise maintained on terms and conditions from time to time approved in writing by the Mortgagee;
(j) Correspondence with brokers and associations
to provide to the Mortgagee, at the time of each such communication, copies of all written communications between the Owner and the Approved Brokers and approved war risks and protection and indemnity associations which relate to compliance with requirements from time to time applicable to the Insurances including, without limitation, all requisite declarations and payments of additional premiums or calls referred to in clause 5.1.1(i);
(k) Independent report
if so requested by the Mortgagee, but at the cost of the Owner, to furnish the Mortgagee from time to time with a detailed report signed by an independent firm of marine insurance brokers appointed by the Mortgagee dealing with the insurances maintained on the Ship and stating the opinion of such firm as to the adequacy thereof;
(l) Collection of claims
to do all things necessary and provide all documents, evidence and information to enable the Mortgagee to collect or recover any moneys which shall at any time become due in respect of the Insurances;
(m) Employment of Ship
not to employ the Ship or suffer the Ship to be employed otherwise than in conformity with the terms of the Insurances (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe; and
(n) Application of recoveries
to apply all sums receivable under the Insurances which are paid to the Owner in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect of which such sums shall have been received;
5.1.2 Ship’s name and registration
not to change the name of the Ship and to keep the Ship registered as a Marshall Islands ship and not to do or suffer to be done anything, or omit to do anything the doing or omission of which could or might result in such registration being forfeited or imperilled or which could or might result in the Ship being required to be registered under any flag other than the Marshall Islands flag and not to register the Ship or permit its registration under any other flag without the prior written consent of the Mortgagee (such consent not to be unreasonably withheld);
5.1.3 Repair
to keep the Ship in a good and efficient state of repair and to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment are effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Ship;
5.1.4 Modification; removal of parts; equipment owned by third parties
not without the prior written consent of the Mortgagee to or suffer any other person to:
(a) make any modification to the Ship in consequence of which her structure, type or performance characteristics could or might be materially altered or her value materially reduced; or
(b) remove any material part of the Ship or any equipment the value of which is such that its removal from the Ship would materially reduce the value of the Ship without replacing the same with equivalent parts or equipment which are owned by the Owner free from Encumbrances; or
(c) install on the Ship any equipment owned by a third party which cannot be removed without causing damage to the structure or fabric of the Ship;
5.1.5 Maintenance of class; compliance with regulations
to maintain the relevant Classification as the class of the Ship and to comply with and ensure that the Ship at all times complies with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws and flag of the Republic of the Marshall Islands or otherwise applicable to the Ship;
5.1.6 Surveys
to submit the Ship to continuous surveys and such periodical or other surveys as may be required for classification purposes and to supply to the Mortgagee copies of all survey reports issued in respect thereof;
5.1.7 Inspection
to ensure that the Mortgagee, by surveyors or other persons appointed by it for such purpose, but at the cost of the Owner, may board the Ship at all reasonable times for the purpose of inspecting her and to afford all proper facilities for such inspections and for this purpose to give the Mortgagee reasonable advance notice of any intended drydocking of the Ship (whether for the purpose of classification, survey or otherwise);
5.1.8 Prevention of and release from arrest
promptly to pay and discharge all debts, damages, liabilities and outgoings whatsoever which have given or may give rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, her Earnings or Insurances or any part thereof and, in the event of a writ or libel being filed against the Ship, her Earnings or Insurances or any part thereof, or of any of the same being arrested, attached or levied upon pursuant to legal process or purported legal process or in the event of detention of the Ship in exercise or purported exercise of any such lien or claim as aforesaid, to procure the release of the Ship, her Earnings and Insurances from such arrest, detention, attachment or levy or, as the case may be, the discharge of the writ or libel forthwith upon receiving notice thereof by providing bail or procuring the provision of security or otherwise as the circumstances may require;
5.1.9 Employment
not to employ the Ship or permit her employment in any manner, trade or business which is forbidden by Marshall Islands law or international law, or which is otherwise unlawful or illicit under the law of any relevant jurisdiction, or in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a prize court, or to destruction, seizure, confiscation, penalty or sanctions and, in the event of hostilities in any part of the world (whether war be declared or not), not to employ the Ship or permit her employment in carrying any contraband goods, or to enter or trade to or to continue to trade in any zone which has been declared a war zone by any Government Entity or by the Ship’s war risks insurers unless the prior written consent of the Mortgagee is obtained and such special insurance cover as the Mortgagee may require shall have been effected by the Owner and at its expense;
5.1.10 Information
promptly to furnish the Mortgagee with all such information as it may from time to time require regarding the Ship, her employment, position and engagements, particulars of all towages and salvages, and copies of all charters and other contracts for her employment or otherwise howsoever concerning her;
5.1.11 Notification of certain events
to notify the Mortgagee forthwith by facsimile thereafter confirmed by letter of:
(a) any damage to the Ship requiring repairs the cost of which will or might exceed the Casualty Amount;
(b) any occurrence in consequence of which the Ship has or may become a Total Loss;
(c) any requisition of the Ship for hire;
(d) any requirement or recommendation made by any insurer or the relevant Classification Society or by any competent authority which is not, or cannot be, complied with in accordance with its terms;
(e) any arrest or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or the Earnings or Insurances or any part thereof;
(f) any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation);
(g) the occurrence of any Default; or
(h) the occurrence of any Environmental Claim against the Owner, the Ship, any other Relevant Party or any other Relevant Ship or any incident, event or circumstances which may give rise to any such Environmental Claim;
5.1.12 Payment of outgoings and evidence of payments
promptly to pay all tolls, dues and other outgoings whatsoever in respect of the Ship and her Earnings and Insurances and to keep proper books of account in respect of the Ship and her Earnings and, as and when the Mortgagee may so require, to make such books available for inspection on behalf of the Mortgagee, and to furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being promptly and regularly paid and that all deductions from crew’s wages in respect of any
applicable tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress;
5.1.13 Encumbrances
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to create or purport or agree to create or permit to arise or subsist any Encumbrance (other than Permitted Liens) over or in respect of the Ship, any share or interest therein or in the Insurances, Earnings or Requisition Compensation or any part thereof or interest therein other than to or in favour of the Mortgagee;
5.1.14 Sale or other disposal
not without the prior written consent of the Mortgagee (and then only subject to such terms and conditions as the Mortgagee may impose) to sell, agree to sell, transfer, abandon or otherwise dispose of the Ship or any share or interest therein;
5.1.15 Chartering
(save as disclosed to the Mortgagee) not without the prior written consent of the Mortgagee (which the Mortgagee shall have full liberty to withhold) and, if such consent is given, only subject to such conditions as the Mortgagee may impose, to let the Ship:
(a) on demise charter for any period;
(b) by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained may exceed twelve (12) months’ duration;
(c) on terms whereby more than two (2) months’ hire (or the equivalent) is payable in advance; or
(d) below the market rate prevailing at the time when the Ship is fixed or other than on arms’ length terms;
5.1.16 Sharing of Earnings
not without the prior written consent of the Mortgagee (and then only subject to such conditions as the Mortgagee may impose) to enter into any agreement or arrangement whereby the Earnings may be shared with any other person;
5.1.17 Payment of Earnings
subject always to the First Security Documents and the Second Security Documents, to procure that the Earnings are paid to the Mortgagee at all times if and when the same shall be or shall have become so payable in accordance with the Security Documents and that any Earnings which are so payable and which are in the hands of the Owner’s brokers or agents are duly accounted for and paid over to the Mortgagee forthwith on demand;
5.1.18 Repairers’ liens
not without the prior written consent of the Mortgagee to put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed the Casualty Amount unless such person shall first have given to the Mortgagee in terms
satisfactory to it, a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise;
5.1.19 Manager
not without the prior written consent of the Mortgagee (such consent not to be unreasonably withheld) to appoint or permit to be appointed any manager of the Ship other than the Manager or terminate, or amend the terms of, the [Q Arion] [Q loanari] [Q Jake] [Q Shea] Management Agreement;
5.1.20 Compliance with Marshall Islands law
to cause this Mortgage to be recorded as prescribed by Chapter 3 of the Maritime Act of 1990 as amended of the Republic of the Marshall Islands and otherwise to comply with and satisfy all the requirements and formalities established by the said Maritime Act of 1990 (as amended) and any other pertinent legislation of the Republic of the Marshall Islands to perfect this Mortgage as a valid and enforceable third and preferred lien upon the Ship and to furnish to the Mortgagee from time to time such proofs as the Mortgagee may reasonably request for its satisfaction with respect to the Owner’s compliance with the provisions of this sub-clause;
5.1.21 Notice of Mortgage
to place and at all times and places retain a properly certified copy of this Mortgage (which shall form part of the Ship’s documents) on board the Ship with her papers and cause such certified copy of this Mortgage to be exhibited to any and all persons having business with the Ship which might create or imply any commitment or encumbrance whatsoever on or in respect of the Ship (other than a lien for crew’s wages and salvage) and to any representative of the Mortgagee and to place and keep prominently displayed in the navigation room and in the Master’s cabin of the Ship a framed printed notice in plain type reading as follows:
“NOTICE OF MORTGAGE
This Vessel is covered by a Third Preferred Mortgage to ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands under authority of Chapter 3 of the Maritime Act of 1990 (as amended) of the Republic of the Marshall Islands. Under the terms of the said Mortgage neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage”;
5.1.22 Conveyance on default
where the Ship is (or is to be) sold in exercise of any power contained in this Mortgage or otherwise conferred on the Mortgagee to execute, forthwith upon request by the Mortgagee, such form of conveyance of the Ship as the Mortgagee may require;
5.1.23 Anti-drug abuse
without prejudice to clause 5.1.9, to take all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or located or trade or which may otherwise be applicable to the Ship and/or the Owner and, if the Mortgagee shall so require, to enter into a “Carrier Initiative Agreement” with the United States Customs and Border Protection and to procure that such agreement (or any similar agreement hereafter introduced by any Government Entity of the United States of America) is maintained in full force and effect and performed by the Owner;
5.1.24 Compliance with Environmental Laws
to comply with, and procure that all Environmental Affiliates of the Owner comply with, all Environmental Laws including, without limitation, requirements relating to manning submission of oil response plans, designations of qualified individuals and establishment of financial responsibility and to obtain and comply with, and procure that all Environmental Affiliates of the Owner obtain and comply with, all Environmental Approvals; and
5.1.25 Survey reports
to deliver to the Mortgagee on the date falling twelve (12) months after the date of this Mortgage and on each of the dates falling at twelve (12) monthly intervals thereafter, a report prepared by surveyors or inspectors appointed by the Mortgagee in relation to the seaworthiness and safe operation of the Ship, to produce evidence to the Mortgagee that any recommendations made in such reports have been complied with or will be complied with in accordance with their terms, in full and thereafter to procure that such recommendations are so complied with.
6 Powers of Mortgagee to protect security and remedy defaults
6.1 Protective action
The Mortgagee shall, without prejudice to its other rights, powers and remedies, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or maintaining the security created by this Mortgage and the other Security Documents and all Expenses attributable thereto shall be payable by the Owner on demand together with interest thereon at the rate provided for in clause 2.5 of the Corporate Guarantee from the date such expense or liability was incurred by the Mortgagee until the date of actual receipt whether before or after any relevant judgement.
6.2 Remedy of defaults
Without prejudice to the generality of the provisions of clause 6.1 but subject always to the First Mortgage and the Second Mortgage:
6.2.1 if the Owner fails to comply with any of the provisions of clause 5.1.1, the Mortgagee shall be entitled (but not bound) to effect and thereafter to maintain all such insurances upon the Ship as in its discretion it may think fit in order to procure the compliance with such provisions or alternatively, to require the Ship (at the Owner’s risk) to remain in, or to proceed to and remain in, a port designated by the Mortgagee until such provisions are fully complied with;
6.2.2 if the Owner fails to comply with any of the provisions of clauses 5.1.3, 5.1.5 or 5.1.6, the Mortgagee shall be entitled (but not bound) to arrange for the carrying out of such repairs, changes or surveys as it may deem expedient or necessary in order to procure the compliance with such provisions; and
6.2.3 if the Owner fails to comply with any of the provisions of clause 5.1.8, the Mortgagee shall be entitled (but not bound) to pay and discharge all such debts, damages, liabilities and outgoings as are therein mentioned and/or to take any such measures as it may deem expedient or necessary for the purpose of securing the release of the Ship in order to procure the compliance with such provisions,
and the Expenses attributable to the exercise by the Mortgagee of any such powers shall be payable by the Owner to the Mortgagee on demand.
7 Powers of Mortgagee on Event of Default
7.1 Powers
Upon the happening of any Event of Default, the Mortgagee shall become forthwith entitled to demand in accordance with the provisions of the Corporate Guarantee the payment of the Outstanding Indebtedness immediately whereupon the Outstanding Indebtedness shall become so due and payable and (whether or not the Mortgagee shall have made any such demand) the Mortgagee shall become forthwith entitled as and when it may see fit (but subject to the rights of the First Mortgagee under the First Security Documents and subject to the rights of the Second Mortgagee under the Second Security Documents), to put into force and exercise all or any of the rights, powers and remedies possessed by it as mortgagee of the Ship or otherwise (whether at law, by virtue of this Mortgage or otherwise) and in particular (without limiting the generality of the foregoing):
7.1.1 to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by the provisions of Chapter 3 of the Maritime Act of 1990 (as amended) of the Republic of the Marshall Islands and all applicable laws of any other jurisdiction;
7.1.2 to take possession of the Ship;
7.1.3 to require that all policies, contracts, certificates of entry and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be delivered forthwith to such adjusters and/or brokers and/or other insurers as the Mortgagee may nominate;
7.1.4 to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising under the Insurances or any of them or in respect of the Ship, her Earnings or Requisition Compensation or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit, and, in the case of the Insurances, to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;
7.1.5 to discharge, compound, release or compromise claims in respect of the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof which have given or may give rise to any charge or lien or other claim on the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Ship, her Earnings, Insurances or Requisition Compensation or any part thereof;
7.1.6 to sell the Ship or any share or interest therein with or without prior notice to the Owner, and with or without the benefit of any charterparty, and free from any claim by the Owner (whether in admiralty, in equity, at law or by statute) by public auction or private contract, at such place and upon such terms as the Mortgagee in its absolute discretion may determine, with power to postpone any such sale, and without being answerable for any loss occasioned by such sale or resulting from postponement thereof and with power, where the Mortgagee purchases the Ship, to make payment of the sale price by making an equivalent reduction in the amount of the Outstanding Indebtedness in the manner referred to in clause 8.1;
7.1.7 to manage, insure, maintain and repair the Ship, and to employ, sail or lay up the Ship in such manner and for such period as the Mortgagee, in its absolute discretion, deems expedient accounting only for net profits arising from any such employment; and
7.1.8 to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this clause 7.1.
7.2 Dealings with Mortgagee
Upon any sale of the Ship or any share or interest therein by the Mortgagee pursuant to clause 7.1.6 or pursuant to clause 11.1, the purchaser shall not be bound to see or enquire whether the Mortgagee’s power of sale has arisen in the manner provided in this Mortgage or whether the Mortgagee has made a demand for payment under the provisions of the Corporate Guarantee and the sale shall be deemed to be within the power of the Mortgagee and the receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor and the sale shall operate to divest the Owner of all rights, title and interest of any nature whatsoever in the Ship and to bar any such interest of the Owner, and all persons claiming through or under the Owner.
8 Application of moneys
8.1 Application
All moneys received by the Mortgagee in respect of a sale of the Ship or any share or interest therein or in respect of the employment of the Ship pursuant to the provisions of clause 7.1.7 (or otherwise pursuant to the provisions of this Mortgage) and all moneys received and retained by the Mortgagee in respect of the Insurances pursuant to this Mortgage (subject to the rights of the First Mortgagee under the First Security Documents and subject to the rights of the Second Mortgagee under the Second Security Documents) shall be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 2.10 of the Corporate Guarantee.
8.2 Shortfall
In the event that the balance referred to in clause 8.1 is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable for the time being therefor.
9 Remedies cumulative and other provisions
9.1 No implied waivers; remedies cumulative
No failure or delay on the part of the Mortgagee to exercise any right, power or remedy vested in it under the Corporate Guarantee or this Mortgage shall operate as a waiver thereof, nor shall any single or partial exercise by the Mortgagee of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy, nor shall the giving by the Mortgagee of any consent to any act which by the terms of this Mortgage requires such consent prejudice the right of the Mortgagee to give or withhold consent to the doing of any other similar act. The remedies provided in the Corporate Guarantee and this Mortgage are cumulative and are not exclusive of any remedies provided by law.
9.2 Preferred status
Anything herein to the contrary notwithstanding, it is intended that nothing herein shall waive the preferred status of this Mortgage and that, if any provision or portion hereof shall be construed to waive the preferred status of this Mortgage, then such provision or portion to such extent shall be void and of no effect.
9.3 Delegation
The Mortgagee shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by the Corporate Guarantee or this Mortgage (including the power vested in it by virtue of clause 11) in such manner, upon such terms, and to such persons as the Mortgagee in its absolute discretion may think fit.
9.4 Incidental powers
The Mortgagee shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship (whether at law, under this Mortgage or otherwise) and in particular (but without prejudice to the generality of the foregoing), upon becoming entitled to exercise any of its powers under clause 7.1, the Mortgagee shall (subject to the First Security Documents and subject to the Second Security Documents) be entitled to discharge any cargo on board the Ship (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements in respect of the Ship, her insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee was the owner of the Ship, but without being responsible for any loss incurred as a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid.
10 Costs and indemnity
10.1 Costs
The Owner shall pay to the Mortgagee on demand on a full indemnity basis all expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges) together with any value added tax or similar tax payable in respect thereof, incurred by the Mortgagee in connection with the exercise or enforcement of, or preservation of any rights under, the Corporate Guarantee or this Mortgage or otherwise in respect of the Outstanding Indebtedness and the security therefor, or in connection with the preparation, completion, execution or registration of the Corporate Guarantee or this Mortgage.
10.2 Mortgagee’s indemnity
The Owner hereby agrees and undertakes to indemnify the Mortgagee against all losses, actions, claims, expenses, demands, obligations and liabilities whatever and whenever arising which may now or hereafter be incurred by the Mortgagee or by any manager, agent, officer or employee for whose liability, act or omission the Mortgagee may be answerable in respect of, in relation to, or in connection with anything done or omitted in the exercise or purported exercise of the powers contained in this Mortgage or otherwise in connection with such powers or with this Mortgage or with the Ship, its Earnings, Requisition Compensation and Insurances or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in the Corporate Guarantee or this Mortgage.
11 Attorney
11.1 Power
By way of security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred by the Corporate Guarantee, this Mortgage or any of the other Security Documents to which the Owner is a party, or which may be
deemed proper in or in connection with all or any of the purposes aforesaid (including, without prejudice to the generality of the foregoing, the execution and delivery of a bill of sale of the Ship). The power of attorney hereby conferred shall be a general power of attorney and the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto. Provided always that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of an Event of Default.
11.2 Dealings with attorney
The exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened, nor shall such person be in any way affected by notice that no such Event of Default has happened, and the exercise by the Mortgagee of such power shall be conclusive evidence of the Mortgagee’s right to exercise the same.
11.3 Filings
The Owner hereby irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise to agree the form of and to execute and do all deeds, instruments, acts and things in order to file, record, register or enrol this Mortgage in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence thereof and any other assurance, document, act or thing required to be executed by the Owner pursuant to clause 12.
12 Further assurance
The Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of more effectually mortgaging and charging the Ship or perfecting the security constituted or intended to be constituted by this Mortgage or contemplated by the Loan Agreement and/or the Corporate Guarantee.
13 Total amount and maturity
For the purpose of recording this Third Preferred Mortgage as required by Chapter 3 of the Maritime Act of 1990 (as amended) of the Republic of the Marshall Islands the total amount is Thirty one million forty thousand Dollars ($31,040,000) and interest and performance of mortgage covenants. The date of maturity is on demand and the discharge amount is the same as the total amount.
14 Law, jurisdiction and other provisions
14.1 Law
This Mortgage is governed by, and shall be construed and enforceable in accordance with, the laws of the Republic of the Marshall Islands.
14.2 Submission to jurisdiction
For the benefit of the Mortgagee, the Owner irrevocably agrees, that any legal action or proceedings in connection with this Mortgage may be brought in the English courts, or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to
settle any disputes arising out of, or in connection with, this Mortgage. The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Mortgage. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee to take proceedings against the Owner or the Ship in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
15 Other provisions
15.1 Severability
If any provision in this Mortgage be or becomes invalid or unenforceable under any applicable law the provisions hereof shall in all other respects remain in full force and effect and the provision in question shall be ineffective to the extent (but only to the extent) of its disconformity with the requirement of the applicable law and if it is competent to the parties to waive any requirements which would otherwise operate as aforesaid those requirements are hereby waived to the extent permitted by such law to the end that the Corporate Guarantee, the Loan Agreement, this Mortgage and each of the other Security Documents shall be valid, binding and enforceable in accordance with their respective terms.
15.2 Counterparts
This Mortgage may be executed in any number of counterparts each of which shall be an original but such counterparts shall together constitute one and the same instrument.
16 Notices
Every notice, request, demand or other communication under this Mortgage shall:
16.1 be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication in permanent written form;
16.2 be deemed to have been received when delivered personally or three (3) days after it has been put in the post and, in the case of a facsimile transmission or other means of telecommunication in permanent written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee or if the time of despatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day); and
16.3 be sent:
16.3.1 if to the Owner at:
c/o Quintana Ship Management Ltd.
5 Xenias Street
145 62 Kifissia
Greece
Fax no: +30 210 62 34 493
Attn: Ms Viktoria Poziopoulou
16.3.2 if to the Mortgagee at:
ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Netherlands
Fax No: +31 10 401 5323
Attn: Loans Administration
or to such other address and/or numbers as is notified by one party to the other parties under this Mortgage.
IN WITNESS whereof the Owner has executed this Mortgage the day and year first above written.
[Q A MARITIME LTD.]
[Q IOANARI SHIPPING LTD]
[Q JAKE SHIPPING LTD.]
[Q SHEA SHIPPING LTD.]
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Acknowledgement of Mortgage
PIRAEUS | ) |
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PREFECTURE OF ATTICA, REPUBLIC OF GREECE | ) |
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On this day of [·] came before me , known to me and being by me duly sworn did depose and say that he resides at that he is an attorney-in-fact of [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.] the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said Corporation.
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Private & Confidential
Dated August 2013
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GENERAL ASSIGNMENT
relating to m.v. [Q Arion] [Q Ioanari] [Q Jake]
[Q Shea]
Contents
Clause |
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1 | Definitions |
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2 | Assignment and application of funds |
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3 | Continuing security and other matters |
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4 | Powers of Mortgagee to protect security and remedy defaults |
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5 | Powers of Mortgagee on Event of Default |
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6 | Attorney |
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7 | Further assurance |
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8 | Costs and indemnities |
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9 | Remedies cumulative and other provisions |
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10 | Notices |
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11 | Counterparts |
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12 | Law and jurisdiction |
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Schedule 1 Forms of Loss Payable Clauses |
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Schedule 2 Form of Notice of Assignment of Insurances |
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THIS DEED OF ASSIGNMENT is dated August 2013 and made BETWEEN:
(1) [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.], a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”); and
(2) ABN AMRO BANK N.V., a company incorporated in The Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, for itself and as security agent and trustee for and on behalf of the Secured Creditors (as defined below) (the “Mortgagee”).
WHEREAS:
(A) by a loan agreement dated August 2013 (the “Loan Agreement”) and made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd. as joint and several borrowers (therein and herein referred to as the “Borrowers”), (2) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”) and (3) ABN AMRO Bank N.V. as arranger, agent (in such capacity the “Agent”; and, together with the Banks, the “Secured Creditors”), security agent and account bank (in such capacity the “Account Bank”), the Banks agreed (inter alia) to advance by way of loan to the Borrowers, jointly and severally, upon the terms and conditions therein contained, a sum of up to Thirty one million forty thousand Dollars ($31,040,000);
(B) by a corporate guarantee (the “Corporate Guarantee”) dated August 2013 made between the Owner (therein referred to as the “Guarantor”) and the Mortgagee, the Owner (inter alia) guaranteed the payment of any moneys owing by the Borrowers to the Mortgagee under the Loan Agreement and the other Security Documents;
(C) pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Mortgagee as its security agent and trustee and pursuant to a deed of trust dated August 2013 executed by the Mortgagee (as trustee) in favour of the Secured Creditors, the Mortgagee agreed to hold, receive, administer and enforce this Deed for and on behalf of itself and the Secured Creditors;
(D) pursuant to the Loan Agreement and the Corporate Guarantee there has been or will be executed by the Owner in favour of the Mortgagee a third preferred Marshall Islands ship mortgage dated August 2013 (the “Mortgage”) on the motor vessel [Q Arion] [Q Ioanari] [Q Jake] [Q Shea] documented in the name of the Owner under the laws and flag of the Republic of the Marshall Islands under Official Number [4434] [4288] [4365] [4719] (the “Ship”) and the Mortgage of even date herewith has been or will be registered under the provisions of Chapter 3 of the Maritime Act of 1990 (as amended) of the Republic of the Marshall Islands as security for the payment by the Owner of the Outstanding Indebtedness (as that expression is defined in the Mortgage);
(E) the security constituted by the Mortgage and this Deed is in all respects subject and subordinate to the rights of the First Mortgagee under the First Security Documents and the rights of the Second Mortgagee under the Second Security Documents; and
(F) this Deed is supplemental to the Corporate Guarantee and the Mortgage and to the security thereby created and is the [Q Arion] [Q loanari] [Q Jake] [Q Shea] General Assignment referred to in the Loan Agreement but shall nonetheless continue in full force and effect notwithstanding any discharge of the Mortgage.
NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED as follows:
1 Definitions
1.1 Defined expressions
Words and expressions defined in the Loan Agreement and/or the Corporate Guarantee and/or the Mortgage shall, unless otherwise defined in this Deed, or the context otherwise requires, have the same meanings when used in this Deed.
1.2 Definitions
In this Deed, unless the context otherwise requires:
“Agent” includes its successors in title, assignees and/or its replacements;
“Assigned Property” means:
(a) the Earnings;
(b) the Insurances; and
(c) any Requisition Compensation;
“Banks” includes their respective successors in title and/or Transferees;
“Casualty Amount” means Five hundred thousand Dollars ($500,000) (or the equivalent amount in any other currency or currencies);
“Collateral Instruments” means notes, bills of exchange, certificates of deposit and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or any of them or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest of any kind;
“Corporate Guarantee” means the corporate guarantee dated August 2013 mentioned in recital (B) hereto as amended and/or supplemented and/or novated from time to time;
“Default” means any Event of Default or any event or circumstance which with the giving of notice or lapse of time or the satisfaction of any other condition (or any combination thereof) would constitute an Event of Default;
“Earnings” means all moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys, and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship;
“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest or other encumbrance of any
kind securing any obligation of any person or any type of preferential arrangement (including without limitation, title transfer and/or retention arrangements having a similar effect);
“Event of Default” means any of the events or circumstances described in clause 10.1 of the Loan Agreement;
“Expenses” means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the Mortgagee) of:
(a) all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature (including without limitation Taxes, repair costs, registration fees and insurance premiums) suffered, incurred or paid by the Mortgagee or the Secured Creditors or any of them in connection with the exercise of the powers referred to in or granted by the Loan Agreement, the Corporate Guarantee, the Mortgage, this Deed or any of the other Security Documents or otherwise payable by the Owner in accordance with clause 10 of the Mortgage or clause 8; and
(b) interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Mortgagee or the Secured Creditors or any of them until the date of receipt or recovery thereof (whether before or after judgment) at a rate per annum calculated in accordance with clause 2.5 of the Corporate Guarantee (as conclusively certified by the Mortgagee);
“First General Assignment” means the first priority general assignment dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] made between the Owner and the First Mortgagee whereby the Owner has assigned to the First Mortgagee the Insurances, any Requisition Compensation and the Earnings (as each such term is defined therein);
“First Mortgage” means the first preferred Marshall Islands ship mortgage dated [7 September 2011 and executed by the Owner in favour of the First Mortgagee in respect of the Ship which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 669 on 7 September 2011 at 05:21 A.M., E.E.S.T. and which was amended by an Amendment No. 1 dated 14 June 2012 made between the Owner and the First Mortgagee which Amendment No. 1 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 525 on 14 June 2012 at 09:34 A.M., E.E.S.T.] [29 September 2011 and executed by the Owner in favour of the First Mortgagee in respect of the Ship which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 688 on 29 September 2011 at 09:47 A.M., E.E.S.T. and which was amended by an Amendment No. 1 dated 14 June 2012 made between the Owner and the First Mortgagee which Amendment No. 1 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 526 on 14 June 2012 at 09:34 A.M., E.E.S.T.] [10 June 2011 and executed by the Owner in favour of the First Mortgagee in respect of the Ship which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 398 on 10 June 2011 at 01:51 P.M., E.E.S.T. and which was amended by an Amendment No. 1 dated 2 September 2011 made between the Owner and the First Mortgagee which Amendment No. 1 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-22 at Page 663 on 2 September 2011 at 04:16 P.M., E.E.S.T. and which was further amended by an Amendment No. 2 dated 14 June 2012 made between the Owner and the First Mortgagee which Amendment No. 2 was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 527 on 14 June 2012 at 09:34 A.M., E.E.S.T.] [19 June 2012 and executed by the Owner in favour of the First Mortgagee in respect of the Ship which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM-23 at Page 530 on 19 June 2012 at 08:43 A.M., E.E.S.T.];
“First Mortgagee” means ABN AMRO Bank N.V., a company incorporated in the Netherlands whose registered office is at Gustav Mahlerlean 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, as security agent and trustee for and on behalf of the Secured Creditors (as defined in the First Mortgage);
“First Security Documents” means, together, the First Mortgage and the First General Assignment;
“Guaranteed Liabilities” has the meaning ascribed to it in the Corporate Guarantee;
“Insurances” means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the Owner and the Mortgagee or otherwise) in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and return of premiums);
“Loan Agreement” means the loan agreement dated [·] 2013 mentioned in recital (A) hereto as amended and/or supplemented and/or novated from time to time;
“Loss Payable Clauses” means the provisions regulating the manner of payment of sums receivable under the Insurances which are to be incorporated in the relevant insurance documents, such provisions to be in the forms set out in schedule 1 or in such other forms as may from time to time be required or agreed in writing by the Mortgagee;
“Mortgagee” includes the successors in title, assignees, transferees and/or replacements of the Mortgagee;
“Notice of Assignment of Insurances” means a notice of assignment in the form set out in schedule 2 or in such other form as may from time to time be required or agreed in writing by the Mortgagee;
“Outstanding Indebtedness” means the aggregate of the Guaranteed Liabilities and interest accrued and accruing thereon, the Expenses and all other sums of money from time to time owing to the Mortgagee or the Secured Creditors or any of them, whether actually or contingently, under the Corporate Guarantee, the Loan Agreement and the other Security Documents or any of them;
“Owner” includes the successors in title of the Owner;
“Requisition Compensation” means all moneys or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of the Ship;
“Second General Assignment” means the second priority general assignment dated 23 October 2012 made between the Owner and the Second Mortgagee whereby the Owner has assigned to the Second Mortgagee the Insurances, any Requisition Compensation and the Earnings (as each such term is defined therein);
“Second Mortgage” means the second preferred Marshall Islands ship mortgage dated 23 October 2012 and executed by the Owner in favour of the Second Mortgagee in respect of the Ship which was recorded by the Office of the Maritime Administrator of the Republic of the Marshall Islands in Piraeus, Greece in Book PM 23 at Page [943][946][945][944] on 23 September 2012 at 05:06 P.M., E.E.S.T.;
“Second Mortgagee” means ABN AMRO Bank N.V., a company incorporated in the Netherlands whose registered office is at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands, acting through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands, as security agent and trustee for and on behalf of the Secured Creditors (as defined in the Second Mortgage);
“Second Security Documents” means, together, the Second Mortgage and the Second General Assignment;
“Secured Creditors” means, together, the Agent and the Banks and includes their respective successors in title and, in the case of the Banks, their respective Transferees and, in the case of the Agent, its assignees, transferees and/or replacements and “Secured Creditor” means any of them;
“Security Documents” means the Loan Agreement, the Corporate Guarantee, the Mortgage, this Deed and any other document which is defined in the Loan Agreement as a Security Document and such other documents as may have been or may hereafter be executed to guarantee and/or secure all or any part of the Guaranteed Liabilities, the Loan, interest thereon and other moneys from time to time owing by the Borrowers or any of them or any other Security Party pursuant to the Loan Agreement and/or the Corporate Guarantee and/or any other Security Party (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); and
“Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all moneys payable thereunder.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Deed.
1.4 Construction of certain terms
In this Deed, unless the context otherwise requires:
1.4.1 references to clauses and schedules are to be construed as references to clauses of and schedules to this Deed and references to this Deed include its schedules;
1.4.2 references to (or to any specified provision of) this Deed or any other document shall be construed as references to this Deed, that provision or that document as in force for the time being and as amended in accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;
1.4.3 words importing the plural shall include the singular and vice versa;
1.4.4 references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
1.4.5 references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and
1.4.6 references to statutory provisions shall be construed as references to those provisions as replaced or amended or re-enacted from time to time.
1.5 Conflict with Loan Agreement and/or Corporate Guarantee
This Deed shall be read together with the Loan Agreement and the Corporate Guarantee, but in case of any conflict between (a) either of such two instruments and (b) this Deed, the provisions of the Corporate Guarantee shall prevail.
2 Assignment and application of funds
2.1 Assignment
By way of security for payment of the Outstanding Indebtedness the Owner with full title guarantee (but subject to the First General Assignment and subject to the Second General Assignment) hereby assigns and agrees to assign to the Mortgagee absolutely all its rights title and interest in and to the Assigned Property and all its benefits and interests present and future therein. Provided however that:
2.1.1 Earnings
the Earnings shall (subject to the First General Assignment and subject to the Second General Assignment) be at the Owner’s disposal until such time as a Default shall occur and the Mortgagee shall direct to the contrary whereupon the Owner shall forthwith, and the Mortgagee may at any time thereafter, instruct the persons from whom the Earnings are then payable to pay the same to the Mortgagee or as it may direct and any Earnings then in the hands of the Owner’s brokers or other agents shall be deemed to have been received by them for the use and on behalf of the Mortgagee; and
2.1.2 Insurances
subject to the First General Assignment and subject to the Second General Assignment unless and until a Default shall occur (whereupon all insurance recoveries, other than any moneys payable under any loss of earnings insurance, shall be receivable by the Mortgagee and applied in accordance with clause 2.3):
(a) any moneys payable under the Insurances, other than any moneys payable under any loss of earnings insurance, shall be payable in accordance with the terms of the relevant Loss Payable Clause and the Mortgagee will not in the meantime give any notification to the contrary to the insurers as contemplated by the Loss Payable Clauses;
(b) any insurance moneys received by the Mortgagee in respect of any major casualty (as specified in the relevant Loss Payable Clause) shall, unless prior to receipt or whilst such moneys are in the hands of the Mortgagee there shall have occurred a Default (whereupon such insurance monies shall be applied in accordance with clause 2.3), be paid over to the Owner upon the Owner furnishing evidence satisfactory to the Mortgagee that all loss and damage resulting from such casualty has been properly made good and repaired, and that all repair accounts and other liabilities whatsoever in connection with the casualty have been fully paid and discharged by the Owner, provided however that the insurers with whom the fire and usual marine risks insurances are effected may, in the case of a major casualty (as specified in the relevant Loss Payable Clause), and with the previous consent in writing of the Mortgagee, make payment on account of repairs in the course of being effected; and
(c) any moneys payable under any loss of earnings insurance shall be payable in accordance with the terms of the relevant Loss Payable Clause and shall be subject to such provisions of this clause 2 as shall apply to Earnings and the Mortgagee will not give any notification to the insurers as contemplated in such Loss Payable Clause unless
and until the Mortgagee shall have become entitled under clause 2.1.1 to direct that the Earnings be paid to the Mortgagee.
2.2 Notice
The Owner hereby covenants and undertakes with the Mortgagee that it will from time to time upon the written request of the Mortgagee give written notice (in such form as the Mortgagee shall reasonably require) of the assignment herein contained to the persons from whom any part of the Assigned Property is or may be due.
2.3 Application
All moneys received by the Mortgagee in respect of:
2.3.1 recovery under the Insurances (other than under any loss of earnings insurance and any such sum or sums as may have been received by the Mortgagee in accordance with the relevant Loss Payable Clause in respect of a major casualty as therein defined and paid over to the Owner as provided in clause 2.1.2(b)); and
2.3.2 Requisition Compensation, shall (subject to the First General Assignment and subject to the Second General Assignment) be held by it upon trust in the first place to pay or make good the Expenses and the balance shall be applied by the Mortgagee in the manner specified in clause 2.10 of the Corporate Guarantee.
2.4 Shortfalls
In the event that the balance referred to in clause 2.3 is insufficient to pay in full the whole of the Outstanding Indebtedness, the Mortgagee shall be entitled to collect the shortfall from the Owner or any other person liable for the time being therefor.
2.5 Use of Owner’s name
The Owner covenants and undertakes with the Mortgagee to do or permit to be done each and every act or thing which the Mortgagee may from time to time require to be done for the purpose of enforcing the Mortgagee’s rights under this Deed and to allow its name to be used as and when required by the Mortgagee for that purpose.
2.6 Reassignment
Upon payment and discharge in full to the satisfaction of the Mortgagee of the Outstanding Indebtedness, the Mortgagee shall, at the request and cost of the Owner, re-assign the Earnings, the Insurances and any Requisition Compensation to the Owner or as it may direct.
2.7 Representations and warranties
The Owner hereby represents and warrants to the Mortgagee that:
2.7.1 it is the sole, absolute, legal and beneficial owner of the Assigned Property; and
2.7.2 neither the Assigned Property nor any part thereof is subject to any Encumbrance (other than Permitted Encumbrances), save as constituted by the Mortgage and this Deed or otherwise permitted by the terms of this Deed.
3 Continuing security and other matters
3.1 Continuing security
The security created by this Deed shall:
3.1.1 be held by the Mortgagee as a continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions contained in the Security Documents, express or implied, and that the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Owner or the other Borrowers or any other person who may be liable to the Mortgagee and/or the Secured Creditors or any of them in respect of the Outstanding Indebtedness or any part thereof and the Mortgagee and/or the Secured Creditors or any of them);
3.1.2 be in addition to, and shall not in any way prejudice or affect, and may be enforced by the Mortgagee without prior recourse to, the security created by any of the other Security Documents or by any present or future Collateral Instruments, right or remedy held by or available to the Mortgagee and/or the Secured Creditors or any of them or any right or remedy of the Mortgagee and/or the Secured Creditors or any of them thereunder; and
3.1.3 not be in any way prejudiced or affected by the existence of any of the other Security Documents or any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Mortgagee and/or the Secured Creditors or any of them dealing with, exchanging, varying or failing to perfect or enforce any of the same, or giving time for payment or performance or indulgence or compounding with any other person liable.
3.2 Rights additional
All the rights, powers and remedies vested in the Mortgagee hereunder shall be in addition to and not a limitation of any and every other right, power or remedy vested in the Mortgagee and/or the Secured Creditors or any of them under the Loan Agreement, the Corporate Guarantee, this Deed, the other Security Documents or any Collateral Instrument or at law and all the rights, powers and remedies so vested in the Mortgagee and/or the Secured Creditors or any of them may be exercised from time to time and as often as the Mortgagee and/or the Secured Creditors or any of them may deem expedient.
3.3 No enquiry
The Mortgagee shall not be obliged to make any enquiry as to the nature or sufficiency of any payment received by it under the Mortgage and/or this Deed or to make any claim or take any action to collect any moneys hereby assigned or to enforce any rights or benefits hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled under the Mortgage and/or this Deed.
3.4 Obligations of Owner and Mortgagee
The Owner shall remain liable to perform all the obligations assumed by it in relation to the Assigned Property and the Mortgagee shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Owner to perform its obligations in respect thereof.
3.5 Discharge of Mortgage
Notwithstanding that this Deed is expressed to be supplemental to the Mortgage it shall continue in full force and effect after any discharge of the Mortgage.
4 Powers of Mortgagee to protect security and remedy defaults
4.1 Protective action
The Mortgagee shall (subject to the First Security Documents and subject to the Second Security Documents), without prejudice to its other rights, powers and remedies under any of the Security Documents, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or maintaining the security created by this Deed and the other Security Documents, and all Expenses attributable thereto shall be payable by the Owner on demand, together with interest thereon at the rate provided for in clause 2.5 of the Corporate Guarantee from the date such expense or liability was incurred by the Mortgagee until the date of actual receipt whether before or after any relevant judgment.
4.2 Remedy of defaults
Without prejudice to the generality of the provisions of clause 4.1 (but subject to the First Security Documents and subject to the Second Security Documents), if the Owner fails to comply with the provisions of clause 5.1.1 of the Mortgage, the Mortgagee shall become forthwith entitled (but not bound) to effect and thereafter to maintain all such insurances upon the Ship as in its discretion it may think fit in order to procure the compliance with such provisions or alternatively, to require the Ship (at the Owner’s risk) to remain in, or to proceed to and remain in, a port designated by the Mortgagee until such provisions are fully complied with and the Expenses attributable to the exercise by the Mortgagee of any such powers shall be payable by the Owner to the Mortgagee on demand.
5 Powers of Mortgagee on Event of Default
5.1 Powers
At any time after the occurrence of an Event of Default, the Mortgagee shall (subject to the rights of the First Mortgagee under the First Security Documents and subject to the rights of the Second Mortgagee under the Second Security Documents) forthwith become entitled (but not bound) as and when it may see fit (but subject to the rights of the First Mortgagee under the First Security Documents and subject to the rights of the Second Mortgagee under the Second Security Documents), to put into force and exercise in relation to the Assigned Property or any part thereof all or any of the rights, powers and remedies possessed by it as assignee and/or chargee of the Assigned Property (whether at law, by virtue of this Deed or otherwise) and in particular (without limiting the generality of the foregoing):
5.1.1 to require that all policies, contracts, certificates of entry and other records relating to the Insurances (including details of and correspondence concerning outstanding claims) be delivered forthwith to such adjusters and/or brokers and/or other insurers as the Mortgagee may nominate;
5.1.2 to collect, recover, compromise and give a good discharge for, all claims then outstanding or thereafter arising under the Insurances or any of them or in respect of the Earnings or Requisition Compensation or any part thereof, and to take over or institute (if necessary using the name of the Owner) all such proceedings in connection therewith as the Mortgagee in its absolute discretion thinks fit, and, in the case of the Insurances, to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;
5.1.3 to discharge, compound, release or compromise claims in respect of the Earnings, Insurances or Requisition Compensation or any part thereof which have given or may give rise to any charge or lien or other claim on the Earnings, Insurances or Requisition Compensation or any part thereof or which are or may be enforceable by proceedings against the Earnings, Insurances or Requisition Compensation or any part thereof; and
5.1.4 to recover from the Owner on demand all Expenses incurred or paid by the Mortgagee in connection with the exercise of the powers (or any of them) referred to in this clause 5.1.
6 Attorney
6.1 Appointment
By way of security, the Owner hereby irrevocably appoints the Mortgagee to be its attorney generally for and in the name and on behalf of the Owner, and as the act and deed or otherwise of the Owner to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred by the Corporate Guarantee, the Mortgage, this Deed or any of the other Security Documents or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power hereby conferred shall be a general power of attorney under the Powers of Attorney Act 1971, and the Owner ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Mortgagee may execute or do pursuant thereto. Provided always that such power shall not be exercisable by or on behalf of the Mortgagee until the happening of any Event of Default.
6.2 Exercise of power
The exercise of such power by or on behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry as to whether any Event of Default has happened or whether the Mortgagee has made a demand for payment under clause 2.1 of the Corporate Guarantee, nor shall such person be in any way affected by notice that no such Event of Default has happened or that no such demand has been made under clause 2.1 of the Corporate Guarantee, and the exercise by the Mortgagee of such power shall be conclusive evidence of the Mortgagee’s right to exercise the same.
6.3 Filings
The Owner hereby irrevocably appoints the Mortgagee to be its attorney in its name and on its behalf and as its act and deed or otherwise to agree the form of and to execute and do all deeds, instruments, acts and things in order to file, record, register or enrol this Deed in any court, public office or elsewhere which the Mortgagee may in its discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence thereof.
7 Further assurance
The Owner hereby further undertakes at its own expense from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the opinion of the Mortgagee may be necessary or desirable for the purpose of more effectually mortgaging and charging the Assigned Property or perfecting the security constituted or intended to be constituted by this Deed.
8 Costs and indemnities
8.1 Costs
The Owner shall pay to the Mortgagee on demand on a full indemnity basis all expenses or liabilities of whatever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges) together with any Taxes (including value added tax or other similar tax) payable in respect thereof, incurred by the Mortgagee in connection with the exercise or enforcement of, or preservation of any rights under this Deed or otherwise in respect of the Outstanding Indebtedness and the security therefor, or in connection with the preparation, completion, execution or registration of this Deed.
8.2 Mortgagee’s indemnity
The Owner hereby agrees and undertakes to indemnify the Mortgagee against all losses, actions, claims, expenses, demands, obligations and liabilities whatever and whenever arising which may now or hereafter be incurred by the Mortgagee or by any manager, agent, officer or employee for whose liability, act or omission the Mortgagee may be answerable in respect of, in relation to, or in connection with anything done or omitted in the exercise or purported exercise of the powers contained in this Deed or otherwise in connection with such powers or with this Deed or with the Ship, its Earnings, Requisition Compensation and Insurances or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in this Deed.
9 Remedies cumulative and other provisions
9.1 No implied waivers; remedies cumulative
No failure or delay on the part of the Mortgagee to exercise any right, power or remedy vested in it under this Deed, the Corporate Guarantee, the Mortgage or any of the other Security Documents shall operate as a waiver thereof, nor shall any single or partial exercise by the Mortgagee of any right, power or remedy nor the discontinuance, abandonment or adverse determination of any proceedings taken by the Mortgagee to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy, nor shall the giving by the Mortgagee of any consent to any act which by the terms of this Deed requires such consent prejudice the right of the Mortgagee to give or withhold consent to the doing of any other similar act. The remedies provided in this Deed, the Corporate Guarantee, the Mortgage and the other Security Documents are cumulative and are not exclusive of any remedies provided by law.
9.2 Delegation
The Mortgagee shall be entitled, at any time and as often as may be expedient, to delegate all or any of the powers and discretions vested in it by this Deed, the Corporate Guarantee, the Loan Agreement, the Mortgage (including the power vested in it by clause 11 of the Mortgage) or any of the other Security Documents in such manner, upon such terms, and to such persons as the Mortgagee in its absolute discretion may think fit.
9.3 Incidental powers
The Mortgagee shall be entitled to do all acts and things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as mortgagee of the Ship (whether at law, under this Deed or otherwise) and in particular (but without prejudice to the generality of the foregoing) upon becoming entitled to exercise any of its powers under clause 7.1 of the Mortgage, the Mortgagee shall (subject to the rights of the First Mortgagee under the First Security Documents and subject to the rights of the Second Mortgagee under the Second
Security Documents) be entitled to discharge any cargo on board the Ship (whether the same shall belong to the Owner or any other person) and to enter into such other arrangements respecting the Ship, the insurances, management, maintenance, repair, classification and employment in all respects as if the Mortgagee was the owner of the Ship, but without being responsible for any loss incurred as a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid.
10 Notices
The provisions of clause 8.1 of the Corporate Guarantee shall apply mutatis mutandis in respect of any certificate, notice, demand or other communication given or made under this Deed save that any references in clause 8.1 of the Corporate Guarantee to “this Guarantee”, the “Guarantor” or the “Security Agent” should be read as referring to this Deed, the Owner and the Mortgagee, respectively.
11 Counterparts
This Deed may be entered into in the form of two counterparts, each executed by one of the parties hereto, and, provided both the parties shall so execute this Deed, each of the executed counterparts, when duly exchanged or delivered, shall be deemed to be an original but, taken together, they shall constitute one instrument.
12 Law and jurisdiction
12.1 Law
This Deed and any non-contractual obligations in connection with this Deed are governed by, and shall be construed in accordance with, English law.
12.2 Submission to jurisdiction
For the benefit of the Mortgagee, the parties hereto irrevocably agree that any legal action or proceedings in connection with this Deed and/or any non-contractual obligations connected with this Deed may be brought in the English courts, or in the courts of any other country chosen by the Mortgagee, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Deed and/or any non-contractual obligations connected with it. The Owner irrevocably and unconditionally submits to the jurisdiction of the English courts and the courts of any country chosen by the Mortgagee and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England to receive, for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Deed (including any non-contractual obligations in connection with this Deed). The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Mortgagee to take proceedings against the Owner in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Owner may have against the Mortgagee arising out of or in connection with this Deed and/or any non-contractual obligations connected with this Deed.
12.3 Contracts (Rights of Third Parties) Act 1999
No term of this Deed is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Deed.
IN WITNESS whereof this Deed has been duly executed as a deed the day and year first above written.
Schedule 1
Forms of Loss Payable Clauses
1 Hull and machinery (marine and war risks)
By a Deed of Assignment dated [·] 2013 [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.] of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”) has assigned (subject to the prior first assignment dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] to ABN AMRO Bank N.V. and subject to the prior second assignment dated 23 October 2012 to ABN AMRO BANK N.V.) to ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the “Mortgagee”) all the Owner’s rights, title and interest in and to all policies and contracts of insurance from time to time taken out or entered into by or for the benefit of the Owner in respect of m.v. [Q Arion] [Q Ioanari] [Q Jake] [Q Shea] and accordingly:
(a) all claims hereunder in respect of an actual or constructive or compromised or arranged total loss and all claims in respect of a major casualty (that is to say any casualty the claim in respect of which exceeds Five hundred thousand Dollars ($500,000) (or the equivalent in any other currency) inclusive of any deductible) shall be paid in full to the Mortgagee or to its order; and
(b) all other claims hereunder shall be paid in full to the Owner or to its order, unless and until the Mortgagee shall have notified the insurers hereunder to the contrary, whereupon all such claims shall be paid to the Mortgagee or to its order.
2 War risks
It is noted that ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the “Mortgagee”) is interested as third mortgagee in the subject matter of this insurance. Save as hereinafter provided, all claims (whether in respect of actual, constructive, arranged or compromised total loss or otherwise) which, but for this Loss Payable Clause, would be payable to [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.] of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”) shall (subject to the prior rights of ABN AMRO Bank N.V. as first mortgagee and as second mortgagee) be payable to the Mortgagee, provided always that unless and until notice in writing to the contrary has been received by the Association, claims (other than total loss claims) not exceeding Five hundred thousand Dollars ($500,000) (or the equivalent in any other currency) in respect of any one claim shall be paid direct to the Owner or to its order.
3 Protection and indemnity risks
Payment of any recovery which [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.] of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”) is entitled to make out of the funds of the Association in respect of any liability, costs or expenses incurred by the Owner, shall be made to the Owner or to its order, unless and until the Association receives notice to the contrary from ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the “Mortgagee”) in which event all recoveries shall thereafter (subject to the prior rights of ABN AMRO Bank N.V. as first mortgagee and as second mortgagee) be paid to the Mortgagee or its order; provided always that no liability whatsoever shall attach to the Association, its Managers or their agents for failure to comply with the latter obligation until the expiry of two (2) clear business days from the receipt of such notice.
4 Loss of earnings
By a Deed of Assignment dated [·] 2013 [Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.] of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”) has assigned to ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the “Mortgagee”) (subject to the prior first assignment dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] to ABN AMRO Bank N.V. and subject to the prior second assignment dated 23 October 2012 to ABN AMRO Bank N.V.) all its rights, title and interest in and to all policies and contracts of insurance from time to time taken out or entered into by or for the benefit of the Owner in respect of m.v. [Q Arion] [Q Ioanari] [Q Jake] [Q Shea] and her earnings and accordingly all claims hereunder shall be paid (subject to the prior rights of ABN AMRO Bank N.V. as first mortgagee and as second mortgagee) in full to the Owner unless and until the Mortgagee shall have notified the insurers hereunder to the contrary, whereupon all such claims shall be paid to the Mortgagee or its order.
Schedule 2
Form of Notice of Assignment of Insurances
[Q A MARITIME LTD.] [Q IOANARI SHIPPING LTD] [Q JAKE SHIPPING LTD.] [Q SHEA SHIPPING LTD.] of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 (the “Owner”), the Owner of the motor vessel [Q Arion] [Q loanari] [Q Jake] [Q Shea], HEREBY GIVES NOTICE that by a Deed of Assignment dated [·] 2013 and entered into by us with ABN AMRO BANK N.V. of Coolsingel 93, 3012 AE Rotterdam, The Netherlands there has been assigned by us (subject to the prior first assignment dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] to ABN AMRO Bank N.V. and subject to the prior second assignment dated 23 October 2012 to ABN AMRO Bank N.V.) to ABN AMRO BANK N.V. as third mortgagees of the said vessel all insurances in respect thereof, including the insurances constituted by the Policy whereon this notice is endorsed.
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Private & Confidential
Manager’s Undertaking
To: ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Nederlands
(as security agent and trustee)
From: Quintana Ship Management Ltd.
Trust Company Complex
Ajeltake Road
Ajeltake Island
Majuro
Republic of the Marshall Islands MH96960
August 2013
Dear Sirs
Loan of up to US$31,040,000 to Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd.
1 Loan Agreement
1.1 We understand that under a loan agreement dated August 2013 (the “Loan Agreement”) and made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd. (together the “Borrowers”) as joint and several borrowers, (2) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”) and (3) ABN AMRO Bank N.V. as arranger, agent (in such capacity the “Agent”; and, together with the Banks, the “Secured Creditors”), security agent (in such capacity the “Security Agent”) and account bank, the Banks agreed (inter alia) to advance by way of loan to the Borrowers, jointly and severally, upon the terms and conditions therein contained, the principal sum of up to Thirty one million forty thousand Dollars ($31,040,000) (the “Loan”) and that it is a condition precedent to the Banks making available their Commitments to the Borrowers that we, Quintana Ship Management Ltd. (the “Manager”), enter into this letter of undertaking (the “Letter”) in favour of the Security Agent.
1.2 We further understand that under a corporate guarantee dated August 2013 (the “Corporate Guarantee”) made between [Q A Maritime Ltd.] [Q loanari Shipping Ltd] [Q Jake Shipping Ltd.] [Q Shea Shipping Ltd.] of the Marshall Islands (the “Owner”) and the Bank, the Owner guaranteed the obligations of the Borrowers under the Loan Agreement.
1.3 We further understand that pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a deed of trust dated August 2013 and executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Letter for and on behalf of itself and the Secured Creditors.
1.4 This undertaking is subject to a prior first undertaking dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] executed by us in favour of ABN AMRO Bank N.V. (the “First Undertaking”) and subject to a prior second undertaking dated 23 October 2012 executed by us in favour of ABN AMRO Bank N.V. (the “Second Undertaking”) and this Letter is in all respects subordinate to the First Undertaking and the Second Undertaking.
1.5 Words and expressions defined in the Loan Agreement and/or the Corporate Guarantee shall, unless otherwise specified herein, have the same meanings when used herein.
2 Confirmation of appointment
We hereby confirm that we have been appointed as the manager of m.v. [Q Arion] [Q Ioanari] [Q Jake] [Q Shea] (the ��Ship”) registered under the flag of the Republic of the Marshall Islands in the name of the Owner pursuant to a management agreement dated [1 August 2011] [14 September 2011] [2 May 2011] [11 June 2012] (the “Management Agreement”) made between ourselves and the Owner and that we have accepted our appointment thereunder in accordance with the terms and conditions thereof.
3 Representations and warranties
3.1 We hereby represent and warrant that the copy of the Management Agreement set out in Appendix 1 to this Letter is a true and complete copy of the Management Agreement, that the Management Agreement constitutes valid and binding obligations of the Manager enforceable in accordance with its terms and that there have been no amendments or variations thereto or defaults thereunder by the Manager or, to the best of the Manager’s knowledge and belief, by the Owner.
3.2 We hereby confirm that the representations and warranties set out in clauses 4.2.10, 4.2.11 and 4.2.12 of the Corporate Guarantee are true and correct in all respects.
4 Undertakings
The Manager undertakes with the Security Agent that throughout the Security Period:
4.1 the Manager will not agree or purport to agree to any amendment or variation of the Management Agreement without the prior written consent of the Security Agent;
4.2 the Manager will procure that any sub-manager appointed by the Manager pursuant to the provisions of the Management Agreement or otherwise will, on or before the date of such appointment, enter into an undertaking in favour of the Security Agent in substantially the same form (mutatis mutandis) as this Letter;
4.3 the Manager will not, without the prior written consent of the Security Agent (acting on the instructions of the Majority Banks), take any action or institute any proceedings or make or assert any claim on or in respect of the Ship or its policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner or in the joint names of the Owner and/or the Security Agent or otherwise) in respect of the Ship and her Earnings (as such term is defined below) or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and return of premiums) (the “Insurances”) or any moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship (the “Earnings”) or any other property or other assets of the Owner which the Security Agent has previously advised the Manager are subject to any Encumbrance or right of set-off in favour of the Security Agent or the Secured Creditors or any of them by virtue of any of the Security Documents;
4.4 the Manager will discontinue any such action or proceedings or claim which may have been taken, instituted or made or asserted, promptly upon notice from the Security Agent to do so;
4.5 the Manager does hereby subordinate any claim that it may have against the Owner or otherwise in respect of the Ship and its Earnings, Insurances and all sums of money or other compensation from time to time payable during the Security Period by reason of Requisition Compensation (as such term is defined in the third priority general assignment dated [·] 2013 (the “General Assignment”) executed by the Owner in favour of the Security Agent) to the claims of the Security Agent and/or the Secured Creditors or any of them under the Loan Agreement and the other Security Documents and undertakes not to exercise any right to which it may be entitled in respect of the Owner and/or the Ship and/or its Earnings and/or Insurances and/or Requisition Compensation in competition with the Security Agent and/or the Secured Creditors or any of them;
4.6 the Manager will promptly notify the Security Agent if at any time the amount owed by the Owner to the Manager pursuant to the Management Agreement (whether in respect of the Manager’s remuneration or disbursements or otherwise) exceeds Twenty thousand Dollars ($20,000) or the equivalent in other currencies; and
4.7 the Manager will provide the Security Agent with such information concerning the Ship as the Security Agent may from time to time reasonably require.
5 Insurance assignment
By way of security for the repayment of the aggregate of the Loan and interest accrued and accruing thereon, the Expenses (as such term is defined in the General Assignment) and all other sums of money from time to time owing to the Security Agent and/or the Security Creditors or any of them, whether actually or contingently under the Loan Agreement, the Corporate Guarantee and the other Security Documents or any of them (the “Outstanding Indebtedness”), the Manager with full title guarantee hereby irrevocably and unconditionally (subject to the assignments contained in the First Undertaking and the Second Undertaking) assigns and agrees to assign to the Security Agent all of the Manager’s rights, title and interest in and to all the benefit of the Insurances.
5.1 The Manager hereby undertakes to procure that a duly completed notice in the form set out in Appendix 2 to this Letter is given to all insurers of the Ship and to procure that such notice is promptly endorsed on all policies and entries in respect of the Insurances and agrees promptly to authorise and/or instruct any broker, insurer or association with or through whom Insurances may be effected to endorse on any policy or entry or otherwise to give effect to such loss payable clause as may be stipulated by the Security Agent.
5.2 The Security Agent shall, at the Manager’s cost and request, re-assign to the Manager all the Manager’s right, title and interest in the Insurances upon the Outstanding Indebtedness being paid and discharged in full to the satisfaction of the Security Agent.
5.3 Any moneys in respect of the Insurances which would (but for the assignment contained in clause 5.1 above) be payable to the Manager shall be applied in accordance with clause 2.3 of the General Assignment.
6 Acknowledgement
The Manager hereby acknowledges that it has seen and has reviewed the Loan Agreement and the other Security Documents and agrees to (a) abide by and to observe the provisions thereof insofar as the same are applicable to it as therein provided and (b) perform its rights and
obligations under the Management Agreement in a manner which will not be contrary to the provisions of the Loan Agreement and/or the other Security Documents.
7 Law and jurisdiction
7.1 The agreement constituted by this Letter and any non-contractual obligations connected with it are governed by, and shall be construed in accordance with, English law.
7.2 The Manager agrees, for the benefit of the Security Agent, that any legal action or proceedings arising out of or in connection with this Letter and/or any non-contractual obligations connected with this Letter against the Manager or any of its assets may be brought in the English courts. The Manager irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England, to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the rights of the Security Agent to take any proceedings against the Manager in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
7.3 No term of this Letter is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Letter or to whom this Letter is not addressed.
Yours faithfully, |
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Appendix 2
Notice of Assignment
We, QUINTANA SHIP MANAGEMENT LTD., the managers of the motor vessel [Q Arion] [Q loanari] [Q Jake] [Q Shea] HEREBY GIVE NOTICE that by a third assignment dated [·] 2013 and entered into by us with ABN AMRO BANK N.V. there has been assigned by us (subject to (i) a prior first assignment dated [7 September 2011] [29 September 2011] [10 June 2011] [19 June 2012] to the said ABN AMRO BANK N.V. and (ii) a prior second assignment dated 23 October 2012 to the said ABN AMRO BANK N.V.) as third assignees all of our right, title and interest in and to the insurances in respect of the said Ship including the insurances constituted by the Policy whereon this notice is endorsed.
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QUINTANA SHIP MANAGEMENT LTD. |
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Dated: [·] |
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Private & Confidential
Manager’s Undertaking
To: ABN AMRO Bank N.V.
Coolsingel 93
3012 AE Rotterdam
The Nederlands
(as security agent and trustee)
From: Quintana Ship Management Ltd.
Trust Company Complex
Ajeltake Road
Ajeltake Island
Majuro
Republic of the Marshall Islands MH96960
August 2013
Dear Sirs
Loan of up to US$31,040,000 to Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd.
1 Loan Agreement
1.1 We understand that under a loan agreement dated August 2013 (the “Loan Agreement”) and made between (1) Q Amreen Shipping Ltd., Q Anastasia Shipping Ltd., Q Houston Shipping Ltd. and Q Kaki Shipping Ltd. (together the “Borrowers”) as joint and several borrowers, (2) the banks and financial institutions referred to in schedule 1 thereto as lenders (the “Banks”) and (3) ABN AMRO Bank N.V. as arranger, agent (in such capacity the “Agent”; and, together with the Banks, the “Secured Creditors”), security agent (in such capacity the “Security Agent”) and account bank, the Banks agreed (inter alia) to advance by way of loan to the Borrowers, jointly and severally, upon the terms and conditions therein contained, the principal sum of up to Thirty one million forty thousand Dollars ($31,040,000) (the “Loan”) and that it is a condition precedent to the Banks making available their Commitments to the Borrowers that we, Quintana Ship Management Ltd. (the “Manager”), enter into this letter of undertaking (the “Letter”) in favour of the Security Agent.
1.2 We further understand that pursuant to clause 16.14 of the Loan Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a deed of trust dated August 2013 and executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Letter for and on behalf of itself and the Secured Creditors.
1.3 Words and expressions defined in the Loan Agreement shall, unless otherwise specified herein, have the same meanings when used herein.
2 Confirmation of appointment
We hereby confirm that pursuant to a management agreement dated [·] 2013 (the “Management Agreement”) made between ourselves and Q [Amreen][Anastasia][Houston][Kaki] Shipping Ltd. (the “Owner”) we have been appointed as the manager of the 180,000 dwt dry bulk carrier, currently known as Hull No. [S1195][S1194][·][·] and under construction by [Sundong Shipbuilding & Marine Engineering Co., Ltd.] [Sundong Shipbuilding & Marine Engineering Co.,
Ltd.] [Imabari Shipbuilding Co., Ltd.] [Imabari Shipbuilding Co., Ltd.] to be purchased by the Owner pursuant to the terms and conditions of the Q [Amreen][Anastasia][Houston][Kaki] Contract (the “Ship”) and that we have accepted our appointment thereunder in accordance with the terms and conditions thereof.
3 Representations and warranties
We hereby represent and warrant that the copy of the Management Agreement set out in the Appendix to this Letter is a true and complete copy of the Management Agreement, that the Management Agreement constitutes valid and binding obligations of the Manager enforceable in accordance with its terms and that there have been no amendments or variations thereto or defaults thereunder by the Manager or, to the best of the Manager’s knowledge and belief, by the Owner.
4 Undertakings
The Manager undertakes with the Security Agent that throughout the Security Period:
4.1 the Manager will not agree or purport to agree to any amendment or variation of the Management Agreement without the prior written consent of the Security Agent;
4.2 the Manager will procure that any sub-manager appointed by the Manager pursuant to the provisions of the Management Agreement or otherwise will, on or before the date of such appointment, enter into an undertaking in favour of the Security Agent in substantially the same form (mutatis mutandis) as this Letter;
4.3 the Manager will not, without the prior written consent of the Security Agent (acting on the instructions of the Majority Banks), take any action or institute any proceedings or make or assert any claim on or in respect of the Ship or its policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner or in the joint names of the Owner and/or the Security Agent or otherwise) in respect of the Q [Amreen][Anastasia][Houston][Kaki] Contract, the Ship and her Earnings (as such term is defined below) or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and return of premiums) (the “Insurances”) or any moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the Q [Amreen][Anastasia][Houston][Kaki] Contract, or out of the use or operation of the Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising under pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship (the “Earnings”) or any other property or other assets of the Owner which the Security Agent has previously advised the Manager are subject to any Encumbrance or right of set-off in favour of the Security Agent or the Secured Creditors or any of them by virtue of any of the Security Documents including (but without limiting the generality of the foregoing) the Q [Amreen][Anastasia][Houston][Kaki] Contract;
4.4 the Manager will discontinue any such action or proceedings or claim which may have been taken, instituted or made or asserted, promptly upon notice from the Security Agent to do so;
4.5 the Manager does hereby subordinate any claim that it may have against the Owner or otherwise in respect of the Ship and its Earnings, Insurances and all sums of money or other compensation from time to time payable during the Security Period by reason of Requisition Compensation to
the claims of the Security Agent and/or the Secured Creditors or any of them under the Loan Agreement and the other Security Documents and undertakes not to exercise any right to which it may be entitled in respect of the Owner and/or the Ship and/or its Earnings and/or Insurances and/or Requisition Compensation in competition with the Security Agent and/or the Secured Creditors or any of them;
4.6 the Manager will promptly notify the Security Agent if at any time the amount owed by the Owner to the Manager pursuant to the Management Agreement (whether in respect of the Manager’s remuneration or disbursements or otherwise) exceeds Twenty thousand Dollars ($20,000) or the equivalent in other currencies; and
4.7 the Manager will provide the Security Agent with such information concerning the Ship as the Security Agent may from time to time reasonably require.
5 Acknowledgement
The Manager hereby acknowledges that it has seen and has reviewed the Loan Agreement and the other Security Documents and agrees to (a) abide by and to observe the provisions thereof insofar as the same are applicable to it as therein provided and (b) perform its rights and obligations under the Management Agreement in a manner which will not be contrary to the provisions of the Loan Agreement and/or the other Security Documents.
6 Law and jurisdiction
6.1 The agreement constituted by this Letter and any non-contractual obligations connected with it are governed by, and shall be construed in accordance with, English law.
6.2 The Manager agrees, for the benefit of the Security Agent, that any legal action or proceedings arising out of or in connection with this Letter and/or any non-contractual obligations connected with this Letter against the Manager or any of its assets may be brought in the English courts. The Manager irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Service (London) Limited at present of Irongate House, 22-30 Duke’s Place, London EC3A 7HX, England, to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the rights of the Security Agent to take any proceedings against the Manager in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
6.3 No term of this Letter is enforceable under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Letter or to whom this Letter is not addressed.
Yours faithfully, |
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QUINTANA SHIP MANAGEMENT LTD. |
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SIGNED by Viktoria Poziopoulou | ) |
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for and on behalf of | ) |
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Q AMREEN SHIPPING LTD. | ) | /s/ Viktoria Poziopoulou |
as Borrower | ) | Attorney-in-fact |
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SIGNED by V. Poziopoulou | ) |
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for and on behalf of | ) |
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Q ANASTASIA SHIPPING LTD. | ) | /s/ V. Poziopoulou |
as Borrower | ) | Attorney-in-fact |
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SIGNED by V. Poziopoulou | ) |
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for and on behalf of | ) |
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Q KAKI SHIPPING LTD. | ) | /s/ V. Poziopoulou |
as Borrower | ) | Attorney-in-fact |
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SIGNED by V. Poziopoulou | ) |
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for and on behalf of | ) |
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Q HOUSTON SHIPPING LTD. | ) | /s/ V. Poziopoulou |
as Borrower | ) | Attorney-in-fact |
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SIGNED by A. Kekatou | ) |
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for and on behalf of | ) |
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ABN AMRO BANK N.V. | ) | /s/ A. Kekatou |
as Arranger, Agent, Security Agent, Account Bank and Bank | ) | Attorney-in-fact |