6-K
Navios Maritime Partners L.P. (NMM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
DATED: September 8, 2025
Commission File No. 001-33811
NAVIOS MARITIME PARTNERS L.P.
c/o Navios Shipmanagement Inc.
85 Akti Miaouli
Piraeus 18538, Greece
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
| Form 20-F ☒ | Form 40-F ☐ |
|---|
NAVIOS MARITIME PARTNERS L.P.
FORM 6-K
TABLE OF CONTENTS
| Page | |
|---|---|
| Operating and Financial Review and Prospects | 1 |
| Exhibit List | 18 |
| INDEX | F-1 |
This report on Form 6-K is hereby incorporated by reference into the Navios Maritime Partners L.P. Registration Statement on Form F-3, File No. 333-271842.
Operating and Financial Review and Prospects
The following is a discussion of the financial condition and results of operations for the three and six month periods ended June 30, 2025 and 2024 of Navios Maritime Partners L.P. (referred to herein as “we”, “us”, “Company” or “Navios Partners”). All of the financial statements have been stated in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). You should read this section together with the consolidated financial statements and the accompanying notes included in Navios Partners’ 2024 annual report filed on Form 20-F on March 28, 2025 (the “Annual Report”) with the U.S. Securities and Exchange Commission (the “SEC”). For the periods presented in this report, comparative figures have been reclassified to conform to changes in presentation in the current year, where necessary.
This report contains and will contain forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, TCE rates (as defined herein), and Navios Partners’ expected cash flow generation, future contracted revenues, future distributions and its ability to make distributions going forward, opportunities to reinvest cash accretively in a fleet renewal program or otherwise, potential capital gains, its ability to take advantage of dislocation in the market and Navios Partners’ growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters and Navios Partners’ ability to refinance its debt on attractive terms, or at all. Words such as “may”, “expects”, “intends”, “plans”, “believes”, “anticipates”, “hopes”, “estimates”, and variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Partners at the time these statements were made. Although Navios Partners believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Partners. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks relating to: global and regional economic and political conditions including global economic activity, demand for seaborne transportation of the products we ship, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, the economic condition of the markets in which we operate, shipyards performing scrubber installations, construction of newbuilding vessels, drydocking and repairs, changing vessel crews and availability of financing, potential disruption of shipping routes due to accidents, wars, sanctions, diseases, pandemics, political events, piracy or acts by terrorists; uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles, our continued ability to enter into long-term time charters, our ability to maximize the use of our vessels, expected demand in the dry and liquid cargo shipping sectors in general and the demand for our dry bulk, containerships and tanker vessels in particular, fluctuations in charter rates for dry bulk, containerships and tanker vessels, the aging of our fleet and resultant increases in operations costs, the loss of any customer or charter or vessel, the financial condition of our customers, changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors, fluctuation in interest rates and foreign exchange rates, increases in costs and expenses, including but not limited to: crew, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions, competitive factors in the market in which Navios Partners operates; risks associated with operations outside the United States; the growing expectations from investors, lenders, charterers, and other market participants regarding our sustainability practices, as well as our capacity to implement sustainability initiatives and achieve our objectives and targets; and other factors listed from time to time in
Navios Partners’ filings with the SEC, including its Form 20-F and Form 6-K. Navios Partners expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Partners’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Partners makes no prediction or statement about the performance of its common units.
Recent Developments
In July 2025, Navios Partners sold a 2009-built transhipper vessel of 57,573 dwt, to Navios South American Logistics Inc., for a gross sale price of $30.0 million.
In August 2025, Navios Partners agreed to sell a 2005-built Panamax of 75,397 dwt and a 2007-built MR2 Product Tanker vessel of 50,922 dwt, to unrelated third parties, for an aggregate gross sale price of $22.6 million. The sales are expected to be completed during the second half of 2025.
On September 8, 2025, Navios Partners agreed to acquire four 8,850 TEU newbuilding methanol-ready and scrubber-fitted Containerships from an unrelated third party, for a purchase price of $115.1 million each. The vessels have been chartered-out at $44,145 net per day for a period of 5.2 years, with charterer’s option for one additional year at $41,579 net per day, and are expected to be delivered into Navios Partners’ fleet during the second half of 2027 and the first quarter of 2028. The closing of the transaction is subject to completion of customary documentation.
Overview
We are an international owner and operator of dry cargo and tanker vessels that was formed in August 2007 by Navios Maritime Holdings Inc. We have been a public company since November 2007.
As of September 2, 2025, there were outstanding 28,932,658 common units and 622,296 general partnership units. Angeliki Frangou, our Chief Executive Officer and Chairwoman beneficially owned an approximately 17.4% common interest of the total outstanding common units including 4,672,314 common units held through four entities affiliated with her. An entity affiliated with Angeliki Frangou beneficially owned 622,296 general partnerships units, representing an approximately 2.1% ownership interest in Navios Partners based on all outstanding common units and general partnership units.
In July 2022, the Board of Directors of Navios Partners authorized a common unit repurchase program for up to $100.0 million of Navios Partners’ common units. Common unit repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of repurchases under the program will be determined by Navios Partners’ management based upon market conditions and financial and other considerations, including working capital and planned or anticipated growth opportunities. The program does not require any minimum repurchase or any specific number of common units and may be suspended or reinstated at any time in the Navios Partners’ discretion and without notice. The Board of Directors will review the program periodically. As of September 2, 2025, Navios Partners had repurchased 1,251,730 common units since the commencement of the program, for a total cost of approximately $54.8 million.
Fleet
As of September 2, 2025, Navios Partners’ fleet consists of 67 dry bulk vessels, 47 containerships and 57 tanker vessels, including 18 newbuilding tankers (12 Aframax/LR2 and six MR2 Product Tanker chartered-in vessels under bareboat contracts) that are expected to be delivered through the first half of 2028 and four 7,900 TEU newbuilding Containerships, that are expected to be delivered through the first half of 2027. The fleet excludes two Containerships, one Panamax and one MR2 Product Tanker vessel that have been agreed to be sold and four 8,850 TEU newbuilding Containerships that have been agreed to be acquired.
We generate revenues by charging our customers for the use of our vessels to transport their dry cargo commodities, containers, crude oil and/or refined petroleum products. In general, the vessels in our fleet are chartered-out under time charters, with duration of up to 12 years at inception. From time to time, we operate vessels in the spot market until the vessels have been chartered out under short-term, medium-term and long-term charters.
On July 3, 2025, the U.S. Department of Treasury’s Office of Foreign Assets Control added, amongst others, VS Tankers FZE (“VS Tankers”) to the Specially Designated Nationals list after being determined by the State Department to meet the criteria for the imposition of sanctions under Executive Order 13902. Navios Partners had two VLCCs, which were bareboat chartered-out to VS Tankers. On July 4, 2025, Navios Partners terminated the contracts for these vessels.
| The following table provides summary information about our fleet as of September 2, 2025: | ||||
|---|---|---|---|---|
| Owned Dry bulk Vessels | Type | Built | Capacity<br>(DWT) | |
| Navios Christine B | Ultra-Handymax | 2009 | 58,058 | |
| Navios Celestial | Ultra-Handymax | 2009 | 58,063 | |
| Navios Venus | Ultra-Handymax | 2015 | 61,339 | |
| Navios La Paix | Ultra-Handymax | 2014 | 61,485 | |
| N Amalthia | Panamax | 2006 | 75,356 | |
| Navios Hope (3) | Panamax | 2005 | 75,397 | |
| Navios Sun | Panamax | 2005 | 76,619 | |
| Navios Helios | Panamax | 2005 | 77,075 | |
| Navios Victory | Panamax | 2014 | 77,095 | |
| Rainbow N | Panamax | 2011 | 79,602 | |
| Unity N | Panamax | 2011 | 79,642 | |
| Odysseus N | Panamax | 2011 | 79,642 | |
| Navios Amber | Kamsarmax | 2015 | 80,909 | |
| Navios Avior | Kamsarmax | 2012 | 81,355 | |
| Navios Centaurus | Kamsarmax | 2012 | 81,472 | |
| Navios Citrine | Kamsarmax | 2017 | 81,626 | |
| Navios Dolphin | Kamsarmax | 2017 | 81,630 | |
| Navios Horizon I (5) | Kamsarmax | 2019 | 81,692 | |
| Navios Galaxy II (2) | Kamsarmax | 2020 | 81,789 | |
| Navios Uranus (2) | Kamsarmax | 2019 | 81,821 | |
| Navios Felicity I (2) | Kamsarmax | 2020 | 81,962 | |
| Navios Primavera (1) | Kamsarmax | 2022 | 82,003 | |
| Navios Meridian (1) | Kamsarmax | 2023 | 82,010 | |
| Navios Herakles I (2) | Kamsarmax | 2019 | 82,036 | |
| Navios Magellan II (2) | Kamsarmax | 2020 | 82,037 | |
| Navios Sky (1) | Kamsarmax | 2015 | 82,056 | |
| Navios Alegria (5) | Kamsarmax | 2016 | 84,852 | |
| Navios Sphera | Kamsarmax | 2016 | 84,872 | |
| Navios Coral | Kamsarmax | 2016 | 84,904 | |
| Copernicus N | Post-Panamax | 2010 | 93,062 | |
| Navios Stellar (1) | Capesize | 2009 | 168,818 | |
| Navios Aurora II | Capesize | 2009 | 169,031 | |
| Navios Antares (1) | Capesize | 2010 | 169,059 | |
| Navios Symphony | Capesize | 2010 | 177,960 | |
| Navios Ace (1) | Capesize | 2011 | 178,929 | |
| Navios Aster | Capesize | 2010 | 178,978 | |
| Navios Melodia | Capesize | 2010 | 178,982 | |
| Navios Buena Ventura | Capesize | 2010 | 179,109 | |
| Navios Luz | Capesize | 2010 | 179,144 | |
| Navios Altamira | Capesize | 2011 | 179,165 | |
| Navios Azimuth (1) | Capesize | 2011 | 179,169 | |
| Navios Bonheur | Capesize | 2010 | 179,204 | |
| Navios Etoile | Capesize | 2010 | 179,234 | |
| Navios Fulvia | Capesize | 2010 | 179,263 | |
| Navios Ray (1) | Capesize | 2012 | 179,515 | |
| Navios Happiness | Capesize | 2009 | 180,022 | |
| Navios Bonavis (1) | Capesize | 2009 | 180,022 | |
| Navios Fantastiks | Capesize | 2005 | 180,055 | |
| --- | --- | --- | --- | |
| Navios Phoenix (1) | Capesize | 2009 | 180,060 | |
| Navios Sol (1) | Capesize | 2009 | 180,274 | |
| Navios Lumen (5) | Capesize | 2009 | 180,493 | |
| Navios Canary (5) | Capesize | 2015 | 180,528 | |
| Navios Pollux (1) | Capesize | 2009 | 180,727 | |
| Navios Gem | Capesize | 2014 | 181,206 | |
| Navios Joy | Capesize | 2013 | 181,215 | |
| Navios Felix (5) | Capesize | 2016 | 181,221 | |
| Navios Corali (5) | Capesize | 2015 | 181,249 | |
| Navios Mars | Capesize | 2016 | 181,259 | |
| Navios Koyo | Capesize | 2011 | 181,415 | |
| Navios Azalea (2) | Capesize | 2022 | 182,064 | |
| Navios Armonia (2) | Capesize | 2022 | 182,079 | |
| Navios Altair (2) | Capesize | 2023 | 182,115 | |
| Navios Sakura (2) | Capesize | 2023 | 182,169 | |
| Navios Amethyst (2) | Capesize | 2023 | 182,212 | |
| Navios Astra (4) | Capesize | 2022 | 182,393 | |
| Owned Containerships | Built | Capacity<br>(TEU) | ||
| --- | --- | --- | --- | |
| Spectrum N | 2009 | 2,546 | ||
| Fleur N | 2012 | 2,782 | ||
| Ete N | 2012 | 2,782 | ||
| Navios Summer (1) | 2006 | 3,450 | ||
| Navios Verano (1) | 2006 | 3,450 | ||
| Matson Lanai (1) | 2007 | 4,250 | ||
| Navios Verde (1) | 2007 | 4,250 | ||
| Navios Amarillo (1) | 2007 | 4,250 | ||
| Navios Vermilion (1) | 2007 | 4,250 | ||
| Navios Azure | 2007 | 4,250 | ||
| Navios Indigo (1) | 2007 | 4,250 | ||
| Navios Domino (1) | 2008 | 4,250 | ||
| Matson Oahu (1) | 2008 | 4,250 | ||
| Navios Tempo (3) | 2009 | 4,250 | ||
| Navios Destiny (1) | 2009 | 4,250 | ||
| Navios Devotion (1) | 2009 | 4,250 | ||
| Navios Lapis | 2009 | 4,250 | ||
| Navios Dorado | 2010 | 4,250 | ||
| Carmel I | 2010 | 4,360 | ||
| Zim Baltimore | 2010 | 4,360 | ||
| Navios Bahamas | 2010 | 4,360 | ||
| Navios Miami | 2009 | 4,563 | ||
| Navios Magnolia (3) | 2008 | 4,730 | ||
| Navios Jasmine | 2008 | 4,730 | ||
| Navios Chrysalis | 2008 | 4,730 | ||
| Navios Nerine | 2008 | 4,730 | ||
| Sparrow | 2023 | 5,300 | ||
| Zim Eagle | 2024 | 5,300 | ||
| Zim Condor | 2024 | 5,300 | ||
| Hawk I | 2024 | 5,300 | ||
| Zim Falcon | 2024 | 5,300 | ||
| Pelican I | 2024 | 5,300 | ||
| Seagull (5) | 2024 | 5,300 | ||
| Zim Albatross (5) | 2024 | 5,300 | ||
| DP World Jeddah (1) | 2024 | 5,300 | ||
| DP World Jebel Ali (1) | 2024 | 5,300 | ||
| Hyundai Shanghai | 2006 | 6,800 | ||
| --- | --- | --- | ||
| Hyundai Tokyo | 2006 | 6,800 | ||
| Hyundai Hongkong | 2006 | 6,800 | ||
| Hyundai Singapore | 2006 | 6,800 | ||
| Hyundai Busan | 2006 | 6,800 | ||
| HMM Ocean | 2025 | 7,700 | ||
| HMM Sky | 2025 | 7,700 | ||
| Navios Unison (1) | 2010 | 10,000 | ||
| Navios Constellation (1) | 2011 | 10,000 | ||
| Owned Tanker Vessels | Type | Built | Capacity<br>(DWT) | |
| --- | --- | --- | --- | --- |
| Hector N | MR1 Product Tanker | 2008 | 38,402 | |
| Nave Aquila (1) | MR2 Product Tanker | 2012 | 49,991 | |
| Nave Atria (1) | MR2 Product Tanker | 2012 | 49,992 | |
| Nave Capella | MR2 Product Tanker | 2013 | 49,995 | |
| Nave Alderamin | MR2 Product Tanker | 2013 | 49,998 | |
| Nave Pyxis | MR2 Product Tanker | 2014 | 49,998 | |
| Nave Bellatrix (1) | MR2 Product Tanker | 2013 | 49,999 | |
| Nave Orion (1) | MR2 Product Tanker | 2013 | 49,999 | |
| Nave Titan | MR2 Product Tanker | 2013 | 49,999 | |
| Nave Jupiter | MR2 Product Tanker | 2014 | 49,999 | |
| Nave Velocity | MR2 Product Tanker | 2015 | 49,999 | |
| Nave Sextans | MR2 Product Tanker | 2015 | 49,999 | |
| Nave Luminosity | MR2 Product Tanker | 2014 | 50,240 | |
| Nave Equinox | MR2 Product Tanker | 2007 | 50,922 | |
| Nave Pulsar (3) | MR2 Product Tanker | 2007 | 50,922 | |
| Bougainville | MR2 Product Tanker | 2013 | 50,626 | |
| Nave Cetus | LR1 Product Tanker | 2012 | 74,581 | |
| Nave Ariadne | LR1 Product Tanker | 2007 | 74,671 | |
| Nave Rigel | LR1 Product Tanker | 2013 | 74,673 | |
| Nave Atropos | LR1 Product Tanker | 2013 | 74,695 | |
| Nave Cassiopeia | LR1 Product Tanker | 2012 | 74,711 | |
| Nave Cielo | LR1 Product Tanker | 2007 | 74,896 | |
| Nave Andromeda | LR1 Product Tanker | 2011 | 75,000 | |
| Nave Estella | LR1 Product Tanker | 2012 | 75,000 | |
| Nave Cosmos (5) | Aframax / LR2 | 2024 | 115,651 | |
| Nave Polaris (1) | Aframax / LR2 | 2024 | 115,699 | |
| Nave Photon (5) | Aframax / LR2 | 2024 | 115,752 | |
| Nave Dorado(1) | Aframax / LR2 | 2025 | 115,762 | |
| Nave Neutrino (1) | Aframax / LR2 | 2025 | 115,807 | |
| Nave Perseus | Aframax / LR2 | 2025 | 115,812 | |
| Nave Galactic | VLCC | 2009 | 296,945 | |
| Nave Constellation | VLCC | 2010 | 296,988 | |
| Nave Universe | VLCC | 2011 | 297,066 | |
| Nave Quasar | VLCC | 2010 | 297,376 | |
| Nave Buena Suerte | VLCC | 2011 | 297,491 | |
| Nave Synergy | VLCC | 2010 | 309,483 | |
| Bareboat-in Vessels | Type | Built | Capacity<br>(DWT) | |
| --- | --- | --- | --- | --- |
| Navios Star | Kamsarmax | 2021 | 81,994 | |
| Navios Amitie | Kamsarmax | 2021 | 82,002 | |
| Navios Libra | Kamsarmax | 2019 | 82,011 | |
| Nave Electron | VLCC | 2021 | 313,239 | |
| Nave Celeste | VLCC | 2022 | 313,418 | |
| Nave Allegro | VLCC | 2020 | 313,433 | |
| --- | --- | --- | --- | |
| Nave Tempo | VLCC | 2021 | 313,486 | |
| Containerships to be Delivered | Expected<br>Delivery | Capacity<br>(TEU) | ||
| --- | --- | --- | --- | |
| TBN XVII | H1 2026 | 7,900 | ||
| TBN XVIII | H2 2026 | 7,900 | ||
| TBN XIX | H2 2026 | 7,900 | ||
| TBN XX | H1 2027 | 7,900 | ||
| Tanker Vessels to be Delivered | Type | Expected<br>Delivery | Capacity<br>(DWT) | |
| --- | --- | --- | --- | --- |
| TBN I (2) | MR2 Product Tanker | H2 2025 | 52,000 | |
| TBN II (2) | MR2 Product Tanker | H1 2026 | 52,000 | |
| TBN III (2) | MR2 Product Tanker | H2 2026 | 52,000 | |
| TBN IV (2) | MR2 Product Tanker | H2 2026 | 52,000 | |
| TBN V (2) | MR2 Product Tanker | H1 2027 | 52,000 | |
| TBN VI (2) | MR2 Product Tanker | H1 2027 | 52,000 | |
| TBN VII | Aframax/LR2 | H1 2026 | 115,000 | |
| TBN VIII | Aframax/LR2 | H1 2026 | 115,000 | |
| TBN IX | Aframax/LR2 | H1 2026 | 115,000 | |
| TBN X | Aframax/LR2 | H2 2026 | 115,000 | |
| TBN XI | Aframax/LR2 | H1 2027 | 115,000 | |
| TBN XII | Aframax/LR2 | H1 2027 | 115,000 | |
| TBN XIII | Aframax/LR2 | H1 2027 | 115,000 | |
| TBN XXI | Aframax/LR2 | H1 2027 | 115,000 | |
| TBN XXII | Aframax/LR2 | H1 2027 | 115,000 | |
| TBN XIV | Aframax/LR2 | H2 2027 | 115,000 | |
| TBN XV | Aframax/LR2 | H2 2027 | 115,000 | |
| TBN XVI | Aframax/LR2 | H1 2028 | 115,000 |
- The vessel is subject to a sale and leaseback transaction with a purchase obligation at the end of the lease term.
- The vessel is subject to a bareboat contract with a purchase option at the end of the contract.
- Vessel agreed to be sold.
- The vessel is subject to a bareboat contract with a purchase obligation at the end of the contract.
- The vessel is subject to a sale and leaseback transaction with a purchase option at the end of the lease term.
Our Charters
We provide seaborne shipping services under short-term, medium-term, and long-term time charters, bareboat charters and voyage charters with customers that we believe are creditworthy. For the six month period ended June 30, 2025, only one customer accounted for 10.0% or more of our total revenues and represented approximately 15.5% of our total revenues. For the six month period ended June 30, 2024, no customer accounted for 10.0% or more of our total revenues.
Our revenues are driven by the number of vessels in the fleet, the number of days during which the vessels operate and our charter hire rates, which, in turn, are affected by a number of factors, including:
- the duration of the charters;
- the level of spot and long-term market rates at the time of charters;
- decisions relating to vessel acquisitions and disposals;
- the amount of time spent positioning vessels;
- the amount of time that vessels spend off-hire or in drydock undergoing repairs and upgrades;
- the age, condition and specifications of the vessels;
- the aggregate level of supply and demand in the liquid, dry and containerized cargo shipping industry;
- economic conditions, such as the impact of inflationary cost pressures, decreased consumer discretionary spending, increasing interest rates, and the possibility of recession or financial market instability or imposition of tariffs or other fees affecting trade or vessel movements;
- armed conflicts, such as the Israel and Hamas conflict, Russian and Ukrainian conflicts and the attacks in the Red Sea and in the Gulf of Aden; and
- the outbreak of global epidemics or pandemics.
Time charters are available for varying periods, ranging from a single trip (spot charter) to long-term which may be many years. In general, a long-term time charter assures the vessel owner of a consistent stream of revenue. Operating the vessel in the spot market affords the owner greater spot market opportunity, which may result in high rates when vessels are in high demand or low rates when vessel availability exceeds demand. We intend to operate our vessels in the long-term charter market. Vessel charter rates are affected by world economics, international events, weather conditions, strikes, governmental policies, supply and demand and many other factors that might be beyond our control. Please read the section entitled “Risk Factors” in our Annual Report for a discussion of certain risks inherent in our business.
We could lose a customer or the benefits of a charter if:
- the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise;
- the customer exercises certain rights to terminate the charter of the vessel;
- the customer terminates the charter because we fail to deliver the vessel within a fixed period of time, the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged periods of off-hire, or we default under the charter; or
- a prolonged force majeure event affecting the customer, including damage to or destruction of relevant production or end-use facilities, war or political unrest prevents us from performing services for that customer.
Under some of our time charters, either party may terminate the charter contract in the event of war in specified countries or in locations that would significantly disrupt the free trade of the vessel. Some of the time charters covering our vessels require us to return to the charterer, upon the loss of the vessel, all advances paid by the charterer but not earned by us.
Trends and Factors Affecting Our Future Results of Operations
We believe the principal factors that will affect our future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping industry generally and that affect conditions in countries and markets in which our vessels engage in business. Please read “Risk Factors” in our Annual Report for a discussion of certain risks inherent in our business.
Results of Operations
Overview
The following table reflects certain key indicators of Navios Partners’ fleet performance for the three and six month periods ended June 30, 2025 and 2024.
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Available Days(1) | 13,388 | 13,498 | 26,844 | 27,038 | ||||||||
| Operating Days(2) | 13,296 | 13,306 | 26,645 | 26,751 | ||||||||
| Fleet Utilization(3) | 99.3 | % | 98.6 | % | 99.3 | % | 98.9 | % | ||||
| Opex Days(4) | 13,703 | 12,981 | 27,289 | 25,942 | ||||||||
| Time Charter Equivalent rate (per day)(5) | $ | 23,040 | $ | 23,384 | $ | 22,154 | $ | 22,448 | ||||
| Opex rate (per day)(6) | $ | 7,108 | $ | 6,801 | $ | 7,045 | $ | 6,800 | ||||
| Vessels operating at end of periods | 154 | 151 | 154 | 151 |
- Available days for the fleet represent total calendar days the vessels were in Navios Partners’ possession for the relevant period after subtracting off-hire days associated with scheduled repairs, drydockings or special surveys and ballast days. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues.
- Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels were off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.
- Fleet utilization is the percentage of time that Navios Partners’ vessels were available for generating revenue, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels were off-hire for reasons other than scheduled repairs, drydockings or special surveys.
- Opex days for the fleet represent total calendar days the vessels were in Navios Partners’ possession for the relevant period after subtracting total calendar days of Navios Partners’ charter-in vessels and bareboat-out vessels.
- Time Charter Equivalent rate (“TCE rate”) per day is defined as voyage, time charter revenues and charter-out revenues under bareboat contracts (grossed up by the applicable vessel operating expenses for the respective periods) less voyage expenses during a period divided by the number of available days during the period. The TCE rate per day is a customary shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet.
- Opex rate per day is defined as vessel operating expenses divided by the number of opex days during the period.
FINANCIAL HIGHLIGHTS
The following table presents consolidated revenue and expense information for the three and six month periods ended June 30, 2025 and 2024. For changes in the presentation of selected financial information, refer to Note 2 – Summary of significant accounting policies included in the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report.
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| (In thousands of U.S. dollars) | ||||||||||||
| Time charter and voyage revenues | $ | 327,558 | $ | 342,155 | $ | 631,670 | $ | 660,710 | ||||
| Time charter and voyage expenses | (31,215 | ) | (40,044 | ) | (61,232 | ) | (81,955 | ) | ||||
| Vessel operating expenses | (97,404 | ) | (88,282 | ) | (192,246 | ) | (176,410 | ) | ||||
| General and administrative expenses | (23,422 | ) | (20,584 | ) | (45,394 | ) | (41,328 | ) | ||||
| Depreciation and amortization | (80,785 | ) | (72,219 | ) | (159,430 | ) | (142,136 | ) | ||||
| Amortization of unfavorable lease terms | 2,912 | 3,171 | 5,792 | 6,307 | ||||||||
| Gain/ (loss) on sale of vessels, net | 5,601 | 7,256 | (329 | ) | 9,133 | |||||||
| Interest expense and finance cost, net | (33,485 | ) | (30,087 | ) | (66,995 | ) | (59,496 | ) | ||||
| Interest income | 3,069 | 3,596 | 6,463 | 6,992 | ||||||||
| Other expense, net | (2,882 | ) | (3,493 | ) | (6,625 | ) | (6,987 | ) | ||||
| Net income | $ | 69,947 | $ | 101,469 | $ | 111,674 | $ | 174,830 | ||||
| EBITDA(1) | $ | 178,236 | $ | 197,008 | $ | 325,844 | $ | 363,163 | ||||
| Adjusted EBITDA(1) | $ | 172,635 | $ | 189,752 | $ | 326,173 | $ | 354,030 | ||||
| Operating Surplus (1) | $ | 67,208 | $ | 91,171 | $ | 114,296 | $ | 157,785 |
- EBITDA, Adjusted EBITDA and Operating Surplus are non-GAAP financial measures. See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA and Operating Surplus” for a description of EBITDA, Adjusted EBITDA and Operating Surplus and a reconciliation of EBITDA, Adjusted EBITDA and Operating Surplus to the most comparable measure under U.S. GAAP.
Period over Period Comparisons
For the Three Month Period ended June 30, 2025 compared to the Three Month Period ended June 30, 2024
Time charter and voyage revenues: Time charter and voyage revenues of Navios Partners for the three month period ended June 30, 2025 decreased by $14.6 million, or 4.3%, to $327.6 million, as compared to $342.2 million for the same period in 2024. The decrease in revenue was mainly attributable to the decrease in the TCE rate, the available days of our fleet and the revenue from freight voyages. For the three month periods ended June 30, 2025 and 2024, time charter and voyage revenues were positively affected by $6.5 million and $2.4 million, respectively, relating to the straight-line effect of the charters with de-escalating rates. For the three month period ended June 30, 2025, the TCE rate decreased by 1.5% to $23,040 per day, as compared to $23,384 per day for the same period in 2024. The available days of the fleet slightly decreased by 0.8% to 13,388 days for the three month period ended June 30, 2025, as compared to 13,498 days for the same period in 2024.
Time charter and voyage expenses: Time charter and voyage expenses for the three month period ended June 30, 2025 decreased by $8.8 million to $31.2 million, as compared to $40.0 million for the same period in 2024. The decrease was mainly attributable to a: (i) $10.9 million decrease in bunker expenses arising from the decreased days of freight voyages in the second quarter of 2025; (ii) $2.2 million decrease in port expenses; (iii) $1.2 million decrease in bareboat and charter-in hire expense of the dry bulk fleet; and (iv) $0.1 million decrease in brokers’ commissions. The decrease was partially mitigated by: (i) $4.0 million commercial management fee on revenues in accordance with the management agreement; and (ii) a $1.6 million increase in other voyage expenses.
Vessel operating expenses: Vessel operating expenses for the three month period ended June 30, 2025 increased by $9.1 million to $97.4 million, as compared to $88.3 million for the same period in 2024. The increase was due to a 5.6% increase in the opex days and a 4.5% increase in the opex daily rate to $7,108 also as a result of the change in the composition of our fleet.
General and administrative expenses: General and administrative expenses increased by $2.8 million to $23.4 million for the three month period ended June 30, 2025, as compared to $20.6 million for the same period in 2024, mainly due to the increase in administrative expenses in accordance with our administrative services agreement commencing January 1, 2025 (“Administrative Services Agreement”) primarily due to the increase in our fleet as well as the increase in legal and professional fees, audit fees and other administrative expenses.
Depreciation and amortization: Depreciation and amortization amounted to $80.8 million for the three month period ended June 30, 2025, as compared to $72.2 million for the same period in 2024. The increase of $8.6 million was mainly attributable to: (i) an $8.7 million increase in depreciation expense due to the delivery of 21 vessels since the second quarter of 2024; (ii) a $3.3 million increase in amortization of the deferred drydock and special survey costs due to the increase in the number of vessels that underwent drydocking or special survey; and (iii) a $0.6 million increase in depreciation expense mainly due to vessel improvements. The above increase was partially mitigated by a: (i) $3.4 million decrease in depreciation expense due to the sale of 12 vessels since the second quarter of 2024; and (ii) $0.6 million decrease in amortization of favorable lease terms of intangible assets and amortization of finance leases. Depreciation of vessels is calculated using an estimated useful life of 25 years for dry bulk and tanker vessels and 30 years for containerships, respectively, from the date the vessel was originally delivered from the shipyard.
Amortization of unfavorable lease terms: Amortization of unfavorable lease terms amounted to $2.9 million and $3.2 million for the three month periods ended June 30, 2025 and 2024, respectively, relating to the amortization of the fair value of the time charters with unfavorable lease terms as determined at the acquisition date of Navios Maritime Containers L.P. (“Navios Containers”).
Gain/ (loss) on sale of vessels, net: Gain on sale of vessels, net amounted to $5.6 million for the three month period ended June 30, 2025, relating to the sale of our vessels, including one vessel classified as held for sale. Gain on sale of vessels, net amounted to $7.3 million for the three month period ended June 30, 2024, relating to a $14.9 million gain on sale of our vessels, partially mitigated by a $7.6 million impairment loss of two of our vessels.
Interest expense and finance cost, net: Interest expense and finance cost, net for the three month period ended June 30, 2025, increased by $3.4 million to $33.5 million, as compared to $30.1 million for the same period in 2024. The increase was mainly due to the decrease in interest expense capitalized related to deposits for vessel acquisitions and the increase in the discount effect of long-term assets and other finance costs. The weighted average interest rate for the three month period ended June 30, 2025 decreased to 6.3% from 7.1% for the same period in 2024, while Navios Partners’ weighted average loan balance increased to $2,194.0 million for the three month period ended June 30, 2025, as compared to $1,930.2 million for the same period in 2024.
Interest income: Interest income amounted to $3.1 million for the three month period ended June 30, 2025, as compared to $3.6 million for the same period in 2024, mainly due to the decrease of time deposits.
Other expense, net: Other expense, net amounted to $2.9 million for the three month period ended June 30, 2025, as compared to $3.5 million for the same period in 2024, mainly due to the decrease in claims.
Net income: Net income for the three month period ended June 30, 2025 amounted to $69.9 million as compared to $101.5 million for the same period in 2024. The decrease in net income of $31.6 million was due to the factors discussed above.
For the Six Month Period ended June 30, 2025 compared to the Six Month Period ended June 30, 2024
Time charter and voyage revenues: Time charter and voyage revenues of Navios Partners for the six month period ended June 30, 2025 decreased by $29.0 million, or 4.4%, to $631.7 million, as compared to $660.7 million for the same period in 2024. The decrease in revenue was mainly attributable to the decrease in the TCE rate, the available days of our fleet and the revenue from freight voyages. For the six month periods ended June 30, 2025 and 2024, time charter and voyage revenues were positively affected by $3.9 million and $2.5 million, respectively, relating to the straight-line effect of the charters with de-escalating rates. For the six month period ended June 30, 2025, the TCE rate decreased by 1.3% to $22,154 per day, as compared to $22,448 per day for the same period in 2024. The available days of the fleet slightly decreased by 0.7% to 26,844 days for the six month period ended June 30, 2025, as compared to 27,038 days for the same period in 2024.
Time charter and voyage expenses: Time charter and voyage expenses for the six month period ended June 30, 2025 decreased by $20.8 million to $61.2 million, as compared to $82.0 million for the same period in 2024. The decrease was mainly attributable to a: (i) $23.6 million decrease in bunker expenses arising from the decreased days of freight voyages in the six month period ended June 30, 2025; (ii) $4.1 million decrease in port expenses; and (iii) $3.6 million decrease in
bareboat and charter-in hire expense of the dry bulk fleet. The decrease was partially mitigated by: (i) $7.9 million commercial management fee on revenues in accordance with the management agreement; and (ii) a $2.6 million increase in other voyage expenses.
Vessel operating expenses: Vessel operating expenses for the six month period ended June 30, 2025 increased by $15.8 million to $192.2 million, as compared to $176.4 million for the same period in 2024. The increase was due to a 5.2% increase in the opex days and a 3.6% increase in the opex daily rate to $7,045 also as a result of the change in the composition of our fleet.
General and administrative expenses: General and administrative expenses increased by $4.1 million to $45.4 million for the six month period ended June 30, 2025, as compared to $41.3 million for the same period in 2024, mainly due to the increase in administrative expenses in accordance with our Administrative Services Agreement primarily due to the increase in our fleet as well as the increase in legal and professional fees, audit fees and other administrative expenses.
Depreciation and amortization: Depreciation and amortization amounted to $159.4 million for the six month period ended June 30, 2025 as compared to $142.1 million for the same period in 2024. The increase of $17.3 million was mainly attributable to a: (i) $16.9 million increase in depreciation expense due to the delivery of 22 vessels in 2024 and during the first half of 2025; (ii) $6.9 million increase in amortization of the deferred drydock and special survey costs due to the increase in the number of vessels that underwent drydocking or special survey; and (iii) $1.4 million increase in depreciation expense mainly due to vessel improvements. The above increase was partially mitigated by a: (i) $6.9 million decrease in depreciation expense due to the sale of 13 vessels in 2024 and during the first half of 2025; and (ii) $1.0 million decrease in amortization of favorable lease terms of intangible assets and amortization of finance leases. Depreciation of vessels is calculated using an estimated useful life of 25 years for dry bulk and tanker vessels and 30 years for containerships, respectively, from the date the vessel was originally delivered from the shipyard.
Amortization of unfavorable lease terms: Amortization of unfavorable lease terms amounted to $5.8 million and $6.3 million for the six month periods ended June 30, 2025 and 2024, respectively, relating to the amortization of the fair value of the time charters with unfavorable lease terms as determined at the acquisition date of Navios Containers.
Gain/ (loss) on sale of vessels, net: Loss on sale of vessels, net amounted to $0.3 million for the six month period ended June 30, 2025, relating to the sale of our vessels, including one vessel classified as held for sale. Gain on sale of vessels, net amounted to $9.1 million for the six month period ended June 30, 2024, relating to a $16.7 million gain on sale of our vessels, partially mitigated by a $7.6 million impairment loss of two of our vessels.
Interest expense and finance cost, net: Interest expense and finance cost, net for the six month period ended June 30, 2025 increased by $7.5 million to $67.0 million, as compared to $59.5 million for the same period in 2024. The increase was mainly due to the decrease in interest expense capitalized related to deposits for vessel acquisitions and the increase in the discount effect of long-term assets and other finance costs. The weighted average interest rate for the six month period ended June 30, 2025 decreased to 6.3% from 7.1% for the same period in 2024, while Navios Partners’ weighted average loan balance increased to $2,197.3 million for the six month period ended June 30, 2025, as compared to $1,909.3 million for the same period in 2024.
Interest income: Interest income amounted to $6.5 million for the six month period ended June 30, 2025, as compared to $7.0 million for the same period in 2024, mainly due to the decrease of time deposits.
Other expense, net: Other expense, net amounted to $6.6 million for the six month period ended June 30, 2025, as compared to $7.0 million for the same period in 2024, mainly due to the decrease in other miscellaneous expenses, net, partially mitigated by the increase in claims.
Net income: Net income for the six month period ended June 30, 2025 amounted to $111.7 million as compared to $174.8 million for the same period in 2024. The decrease in net income of $63.1 million was due to the factors discussed above.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Liquidity and Capital Resources
We anticipate that our primary sources of funds for our short-term liquidity needs will consist of cash flows from operations, our equity offerings, proceeds from asset sales, long-term bank borrowings and other debt raisings. In addition to distributions on our units and common unit repurchase program, our primary short-term liquidity needs are to fund general working capital requirements, cash reserve requirements including those under our credit facilities and debt service, while our long-term liquidity needs primarily relate to expansion and investment capital expenditures and other maintenance capital expenditures and debt repayment. As of June 30, 2025, Navios Partners’ current assets totaled $500.8 million, while current liabilities totaled $459.0 million, resulting in a positive working capital position of $41.8 million. Navios Partners’ cash forecast indicates that it will generate sufficient cash through its contracted revenue, as of September 2, 2025, of $3.1 billion and cash proceeds from the sale of vessels (see Note 4 - Vessels, net and Note 15 - Subsequent events to the unaudited condensed consolidated financial statements included elsewhere in this report) to make the required principal and interest payments on its indebtedness, to make payments for capital expenditures, provide for the normal working capital requirements of the business for a period of at least 12 months from the date of issuance of our unaudited condensed consolidated financial statements.
Generally, our long-term sources of funds derive from cash from operations, long-term bank borrowings and other debt or equity financings to fund acquisitions and expansion and investment capital expenditures. We cannot assure you that we will be able to secure adequate financing or to obtain additional funds on favorable terms to meet our liquidity needs.
Cash deposits and cash equivalents in excess of amounts covered by government provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Partners does maintain cash deposits and cash equivalents in excess of government provided insurance limits. Navios Partners also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.
Navios Partners may use funds to repurchase its outstanding common units and/or indebtedness from time to time. Repurchases may be made in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms Navios Partners deems appropriate and subject to its cash requirements for other purposes, compliance with the covenants under Navios Partners’ credit facilities, and other factors management deems relevant.
In July 2022, the Board of Directors of Navios Partners authorized a common unit repurchase program for up to $100.0 million of Navios Partners’ common units. Common unit repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of repurchases under the program will be determined by Navios Partners’ management based upon market conditions and financial and other considerations, including working capital and planned or anticipated growth opportunities. The program does not require any minimum repurchase or any specific number of common units and may be suspended or reinstated at any time in the Navios Partners’ discretion and without notice. The Board of Directors will review the program periodically. As of September 2, 2025, Navios Partners had repurchased 1,251,730 common units since the commencement of the program, for a total cost of approximately $54.8 million.
The following table presents cash flow information derived from the unaudited condensed Consolidated Statements of Cash Flows of Navios Partners for the six month periods ended June 30, 2025 and 2024.
| Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||
|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | |||||
| (In thousands of U.S. dollars) | ||||||
| Net cash provided by operating activities | $ | 278,180 | $ | 225,915 | ||
| Net cash used in investing activities | (268,650 | ) | (293,957 | ) | ||
| Net cash provided by financing activities | 68,304 | 98,711 | ||||
| Increase in cash, cash equivalents and restricted cash | $ | 77,834 | $ | 30,669 |
Net cash provided by operating activities for the six month period ended June 30, 2025 as compared to the net cash provided by operating activities for the six month period ended June 30, 2024
Net cash provided by operating activities increased by $52.3 million to $278.2 million for the six month period ended June 30, 2025, as compared to $225.9 million for the same period in 2024. In determining net cash provided by operating activities, net income is adjusted for the effects of certain non-cash items as discussed below.
The aggregate adjustments to reconcile net income to net cash provided by operating activities were $152.7 million of non-cash positive net adjustments for the six month period ended June 30, 2025, which consisted mainly of the following adjustments: (i) $159.4 million depreciation and amortization; (ii) $3.9 million amortization and write-off of deferred finance costs; and (iii) $0.3 million loss on sale of vessels, net. These adjustments were partially mitigated by: (i) $5.8 million amortization of unfavorable lease terms; (ii) $4.7 million other non-cash adjustments; and (iii) $0.4 million amortization of operating lease assets/ liabilities.
The net cash inflow resulting from the change in operating assets and liabilities of $13.8 million for the six month period ended June 30, 2025 resulted from a: (i) $39.5 million increase in amounts due to related parties; (ii) $35.0 million decrease in amounts due from related parties; (iii) $12.1 million decrease in accounts receivable; (iv) $5.1 million increase in accrued expenses; (v) $2.2 million decrease in prepaid expenses and other current assets; and (vi) $0.9 million increase in accounts payable. This was partially mitigated by: (i) $77.2 million in payments for drydock and special survey costs; and (ii) a $3.8 million decrease in deferred revenue.
The aggregate adjustments to reconcile net income to net cash provided by operating activities were $122.8 million of non-cash positive net adjustments for the six month period ended June 30, 2024, which consisted mainly of the following adjustments: (i) $142.1 million depreciation and amortization; and (ii) $3.7 million amortization and write-off of deferred finance costs. These adjustments were partially mitigated by: (i) $9.1 million gain from sale of vessels, net; (ii) $6.3 million amortization of unfavorable lease terms; (iii) $5.0 million other non-cash adjustments; and (iv) $2.6 million amortization of operating lease assets/ liabilities.
The net cash outflow resulting from the change in operating assets and liabilities of $71.7 million for the six month period ended June 30, 2024 resulted from a: (i) $38.6 million in payments for drydock and special survey costs; (ii) $32.0 million decrease in amounts due to related parties; (iii) $7.1 million decrease in accounts payable; (iv) $6.0 million decrease in deferred revenue; and (v) $1.0 million decrease in accrued expenses. This was partially mitigated by a: (i) $10.1 million decrease in amounts due from related parties (including current and non-current portion); (ii) $1.6 million decrease in prepaid expenses and other current assets; and (iii) $1.3 million decrease in accounts receivable.
Net cash used in investing activities for the six month period ended June 30, 2025 as compared to the net cash used in investing activities for the six month period ended June 30, 2024
Net cash used in investing activities for the six month period ended June 30, 2025 amounted to $268.7 million as compared to $294.0 million net cash used in investing activities for the same period in 2024.
Net cash used in investing activities of $268.7 million for the six month period ended June 30, 2025 was mainly due to: (i) $193.4 million related to vessel acquisitions and additions; and (ii) $109.9 million related to deposits for the acquisition/ option to acquire vessels and capitalized expenses. This was partially mitigated by: (i) $33.7 million of proceeds related to the sale of three vessels; and (ii) a $0.9 million decrease in time deposits with original maturities greater than three months.
Net cash used in investing activities of $294.0 million for the six month period ended June 30, 2024 was mainly due to: (i) $211.2 million related to vessel acquisitions and additions; and (ii) $182.6 million related to deposits for the acquisition/ option to acquire vessels and capitalized expenses. This was partially mitigated by: (i) $91.4 million of proceeds related to the sale of four vessels; and (ii) an $8.4 million decrease in time deposits with original maturities greater than three months.
Net cash provided by financing activities for the six month period ended June 30, 2025 as compared to net cash provided by financing activities for the six month period ended June 30, 2024
Net cash provided by financing activities decreased by $30.4 million to $68.3 million inflow for the six month period ended June 30, 2025, as compared to $98.7 million inflow for the same period in 2024.
Net cash provided by financing activities of $68.3 million for the six month period ended June 30, 2025 was mainly due to $345.3 million of proceeds from the new credit facilities and sale and leaseback agreements. This was partially mitigated by: (i) $245.7 million repayments of long-term debt, finance lease and financial liabilities; (ii) $23.0 million related to the acquisition of treasury units; (iii) $5.3 million payments of deferred finance costs related to the new credit facilities and financial liabilities; and (iv) $3.0 million payments for cash distributions.
Net cash provided by financing activities of $98.7 million for the six month period ended June 30, 2024 was mainly due to $311.0 million of proceeds from the new credit facilities and sale and leaseback agreements. This was partially mitigated by: (i) $199.2 million repayments of long-term debt, finance lease and financial liabilities; (ii) $5.0 million related to the acquisition of treasury units; (iii) $5.0 million payments of deferred finance costs related to the new credit facilities and financial liabilities; and (iv) $3.1 million payments for cash distributions.
Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA and Operating Surplus
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| (In thousands of U.S. dollars) | ||||||||||||
| Net cash provided by operating activities | $ | 121,628 | $ | 131,479 | $ | 278,180 | $ | 225,915 | ||||
| Net increase in operating assets | 35,396 | 25,198 | 27,975 | 25,564 | ||||||||
| Net (increase)/ decrease in operating liabilities | (18,706 | ) | 3,122 | (41,752 | ) | 46,105 | ||||||
| Net interest cost | 30,416 | 26,491 | 60,532 | 52,504 | ||||||||
| Amortization and write-off of deferred finance costs | (2,227 | ) | (2,033 | ) | (3,899 | ) | (3,709 | ) | ||||
| Amortization of operating lease assets/liabilities | 187 | 1,803 | 373 | 2,594 | ||||||||
| Other non-cash adjustments | 5,941 | 3,692 | 4,764 | 5,057 | ||||||||
| Gain/ (loss) on sale of vessels, net | 5,601 | 7,256 | (329 | ) | 9,133 | |||||||
| EBITDA(1) | $ | 178,236 | $ | 197,008 | $ | 325,844 | $ | 363,163 | ||||
| (Gain)/ loss on sale of vessels, net | (5,601 | ) | (7,256 | ) | 329 | (9,133 | ) | |||||
| Adjusted EBITDA(1) | $ | 172,635 | $ | 189,752 | $ | 326,173 | $ | 354,030 | ||||
| Cash interest income | 3,084 | 3,390 | 6,962 | 6,180 | ||||||||
| Cash interest paid | (32,130 | ) | (35,865 | ) | (65,539 | ) | (67,978 | ) | ||||
| Maintenance and replacement capital expenditures | (76,381 | ) | (66,106 | ) | (153,300 | ) | (134,447 | ) | ||||
| Operating Surplus(2) | $ | 67,208 | $ | 91,171 | $ | 114,296 | $ | 157,785 |
(1) EBITDA and Adjusted EBITDA
EBITDA represents net income before interest and finance costs, depreciation and amortization and income taxes. Adjusted EBITDA represents EBITDA excluding certain items, as described in the table above. Navios Partners uses Adjusted EBITDA as a liquidity measure and reconciles EBITDA and Adjusted EBITDA to net cash provided by operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by operating activities adding back, when applicable and as the case may be, the effect of: (i) net increase in operating assets; (ii) net (increase)/ decrease in operating liabilities; (iii) net interest cost; (iv) amortization and write-off of deferred finance costs; (v) amortization of operating lease assets/ liabilities; (vi) other non-cash adjustments; and (vii) gain/ (loss) on sale of vessels, net. Navios Partners believes that EBITDA and Adjusted EBITDA are each the basis upon which liquidity can be assessed and present useful information to investors regarding Navios Partners’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and make cash distributions. Navios Partners also believes that EBITDA and Adjusted EBITDA are used: (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
Each of EBITDA and Adjusted EBITDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Partners’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Partners’ performance. Furthermore, our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.
EBITDA for the three month periods ended June 30, 2025 and 2024 was affected by the item described in the table above. Excluding this item, Adjusted EBITDA decreased by $17.2 million to $172.6 million for the three month period ended June 30, 2025, as compared to $189.8 million for the same period in 2024. The decrease in Adjusted EBITDA was primarily due to a: (i) $14.6 million decrease in time charter and voyage revenues; (ii) $9.1 million increase in vessel operating expenses due to a 5.6% increase in the opex days and a 4.5% increase in the opex daily rate to $7,108 also as a result of the change in the composition of our fleet; and (iii) $2.8 million increase in general and administrative expenses in accordance with our Administrative Services Agreement primarily due to the increase in our fleet as well as the increase in legal and professional fees, audit fees and other administrative expenses. The above decrease was partially mitigated by: (i) an $8.8 million decrease in time charter and voyage expenses, mainly due to the decrease in bunker expenses arising from the decreased days of freight voyages in the second quarter of 2025; and (ii) a $0.5 million decrease in other expense, net.
EBITDA for the six month periods ended June 30, 2025 and 2024 was affected by the item described in the table above. Excluding this item, Adjusted EBITDA decreased by $27.8 million to $326.2 million for the six month period ended June 30, 2025, as compared to $354.0 million for the same period in 2024. The decrease in Adjusted EBITDA was primarily due to a: (i) $29.0 million decrease in time charter and voyage revenues; (ii) $15.8 million increase in vessel operating expenses due to a 5.2% increase in the opex days and a 3.6% increase in the opex daily rate to $7,045 also as a result of the change in the composition of our fleet; and (iii) $4.1 million increase in general and administrative expenses in accordance with our Administrative Services Agreement primarily due to the increase in our fleet as well as the increase in legal and professional fees, audit fees and other administrative expenses. The above decrease was partially mitigated by a: (i) $20.8 million decrease in time charter and voyage expenses, mainly due to the decrease in bunker expenses arising from the decreased days of freight voyages in the first six months of 2025; and (ii) $0.3 million decrease in other expense, net.
(2) Operating Surplus
Navios Partners generated Operating Surplus for the six month period ended June 30, 2025 of $114.3 million, as compared to $157.8 million for the same period in 2024. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA and Operating Surplus” contained herein).
Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense, non-cash interest income, estimated maintenance and replacement capital expenditures and one-off items. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Partners’ capital assets.
Operating Surplus is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.
Capital Expenditures
Navios Partners finances its capital expenditures with cash flows from operations, equity offerings, proceeds from asset sales, long-term bank borrowings and other debt raisings. Capital expenditures for each of the six month periods ended June 30, 2025 and 2024 amounted to $303.3 million and $393.8 million, respectively.
Maintenance for our vessels and expenses related to drydocking expenses are reimbursed at cost by Navios Partners to Navios Shipmanagement Inc. and its affiliates, which are entities affiliated with the Company’s Chairwoman and Chief
Executive Officer, under the management agreement. For more information, please read Note 12 – Transactions with related parties and affiliates to the unaudited condensed consolidated financial statements, included elsewhere in this report.
Maintenance and Replacement Capital Expenditures Reserve
The reserves for estimated maintenance and replacement capital expenditures for the three and six month periods ended June 30, 2025 were $76.4 million and $153.3 million, respectively. We estimate that our annual replacement reserve for the year ending December 31, 2025 will be approximately $305.6 million, for replacing our vessels at the end of their useful lives. The reserves for estimated maintenance and replacement capital expenditures for the three and six month periods ended June 30, 2024 were $66.1 million and $134.4 million, respectively.
The amount for estimated replacement capital expenditures attributable to future vessel replacement was based on the following assumptions: (i) current market price to purchase a five-year-old vessel of similar size and specifications; (ii) a 25-year useful life for dry bulk and tanker vessels and a 30-year useful life for containerships; and (iii) a relative net investment rate.
The amount for estimated maintenance capital expenditures attributable to future vessel drydocking and special survey was based on certain assumptions including the remaining useful life of the owned vessels of our fleet, market costs of drydocking and special survey and a relative net investment rate.
Our Board of Directors, with the approval of the conflicts committee, may determine that one or more of our assumptions should be revised, which could cause our Board of Directors to increase or decrease the amount of estimated maintenance and replacement capital expenditures. The actual cost of replacing the vessels in our fleet will depend on a number of factors, including prevailing market conditions, charter hire rates and the availability and cost of financing at the time of replacement. We may elect to finance some or all of our maintenance and replacement capital expenditures through the issuance of additional common units, which could be dilutive to existing unitholders.
Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy
There is no guarantee that unitholders will receive quarterly distributions from us on the common units on any quarter.
Our ability to make distributions to our unitholders depends on the performance of our subsidiaries and their ability to distribute funds to us. The ability of our subsidiaries to make distributions to us may be restricted by, among other things, the provisions of existing and future indebtedness, applicable partnership and limited liability company laws and other laws and regulations.
See Note 13 – Cash distributions and earnings per unit to the unaudited condensed consolidated financial statements included elsewhere in this report.
Quantitative and Qualitative Disclosures about Market Risks
Foreign Exchange Risk
Our functional and reporting currency is the U.S. dollar. We engage in worldwide commerce with a variety of entities. Although our operations may expose us to certain levels of foreign currency risk, our transactions are predominantly U.S. dollar denominated. Transactions in currencies other than the U.S. dollar are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated are recognized.
Interest Rate Risk
The tighter monetary policy and higher long-term interest rates result in a higher cost of capital for our business.
Borrowings under certain of our credit facilities and financial liabilities bear interest at a rate based on a premium over Secured Overnight Financing Rate (“SOFR”). Therefore, we are exposed to the risk that our interest expense may increase if interest rates rise. For the six month periods ended June 30, 2025 and 2024, we paid interest on our outstanding debt at a weighted average interest rate of 6.3% and 7.1%, respectively. A 1% increase in SOFR would have increased our interest expense for the six month periods ended June 30, 2025 and 2024 by $9.4 million and $6.4 million, respectively.
Concentration of Credit Risk
Financial instruments, which potentially subject us to significant concentrations of credit risk, consist principally of cash, other investments and trade accounts receivable. We closely monitor our exposure to customers for credit risk. We have policies in place to ensure that we trade with customers with an appropriate credit history.
For the six month period ended June 30, 2025, only one customer accounted for 10.0% or more of our total revenues and represented approximately 15.5% of our total revenues. For the six month period ended June 30, 2024, no customer accounted for 10.0% or more of our total revenues.
If we lose a charter, we may be unable to re-deploy the related vessel on terms as favorable to us due to the long-term nature of most charters and the cyclical nature of the industry or we may be forced to charter the vessel on the spot market at then market rates which may be less favorable than the charter that has been terminated. If we are unable to re-deploy a vessel for which the charter has been terminated, we will not receive any revenues from that vessel, but we may be required to pay expenses necessary to maintain the vessel in proper operating condition. If we lose a vessel, any replacement or newbuilding would not generate revenues during its construction acquisition period, and we may be unable to charter any replacement vessel on terms as favorable to us as those of the terminated charter.
Even if we successfully charter our vessels in the future, our charterers may go bankrupt or fail to perform their obligations under the charter agreements, they may delay payments or suspend payments altogether, they may terminate the charter agreements prior to the agreed-upon expiration date or they may attempt to renegotiate the terms of the charters. The permanent loss of a customer, time charter or vessel, or a decline in payments under our charters, could have a material adverse effect on our business, results of operations and financial condition and our ability to make cash distributions in the event we are unable to replace such customer, time charter or vessel. For further details, please read “Risk Factors” in our Annual Report.
Recent Accounting Pronouncements
The Company’s recent accounting pronouncements are included in the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report.
Critical Accounting Policies
Our financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates in the application of our accounting policies based on the best assumptions, judgments and opinions of management. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. All significant accounting policies are as described in Note 2 – Summary of significant accounting policies to the notes to the consolidated financial statements included in the Company’s Annual Report and in Note 2 – Summary of significant accounting policies included in the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report.
Exhibit List
*Filed herewith
INDEX
| NAVIOS MARITIME PARTNERS L.P. | Page |
|---|---|
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS AT JUNE 30, 2025 AND DECEMBER 31, 2024 | F-2 |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2025 AND 2024 | F-3 |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2025 AND 2024 | F-4 |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2025 AND 2024 | F-5 |
| NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | F-6 |
F-1
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars except unit data)
| Notes | June 30, 2025<br>(unaudited) | December 31, 2024 | ||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 3 | $ | 377,034 | $ | 270,166 | |
| Restricted cash | 3 | 589 | 29,623 | |||
| Other investments | 3 | 11,386 | 12,289 | |||
| Assets held for sale | 4 | 29,841 | — | |||
| Accounts receivable, net | 21,300 | 33,399 | ||||
| Prepaid expenses and other current assets | 58,973 | 60,894 | ||||
| Amounts due from related parties | 12 | 1,662 | 36,620 | |||
| Total current assets | 500,785 | 442,991 | ||||
| Vessels, net | 4 | 4,552,275 | 4,241,292 | |||
| Deposits for vessel acquisitions | 11 | 265,889 | 444,897 | |||
| Other long-term assets | 11, 14 | 69,176 | 61,749 | |||
| Deferred drydock and special survey costs, net | 12 | 231,102 | 196,194 | |||
| Intangible assets | 5 | 33,651 | 42,311 | |||
| Operating lease assets | 14 | 231,675 | 243,806 | |||
| Total non-current assets | 5,383,768 | 5,230,249 | ||||
| Total assets | $ | 5,884,553 | $ | 5,673,240 | ||
| LIABILITIES AND PARTNERS’ CAPITAL | ||||||
| Current liabilities | ||||||
| Accounts payable | $ | 18,631 | $ | 17,763 | ||
| Accrued expenses | 40,174 | 33,865 | ||||
| Deferred revenue | 64,130 | 66,209 | ||||
| Operating lease liabilities, current portion | 14 | 26,296 | 25,607 | |||
| Amounts due to related parties | 12 | 39,536 | — | |||
| Current portion of finance lease and financial liabilities, net | 6 | 107,020 | 102,996 | |||
| Current portion of long-term debt, net | 6 | 155,276 | 163,226 | |||
| Current liabilities associated with the vessel held for sale | 6 | 7,400 | — | |||
| Fair value of derivatives, current | 8 | 579 | — | |||
| Total current liabilities | 459,042 | 409,666 | ||||
| Operating lease liabilities, net | 14 | 201,802 | 214,995 | |||
| Unfavorable lease terms | 5 | 9,474 | 15,266 | |||
| Long-term finance lease and financial liabilities, net | 6 | 972,290 | 945,613 | |||
| Long-term debt, net | 6 | 985,005 | 917,102 | |||
| Deferred revenue | 50,309 | 55,534 | ||||
| Other long-term liabilities | 14,912 | 8,436 | ||||
| Fair value of derivatives, non-current | 8 | 1,735 | — | |||
| Total non-current liabilities | 2,235,527 | 2,156,946 | ||||
| Total liabilities | $ | 2,694,569 | $ | 2,566,612 | ||
| Commitments and contingencies | 11 | — | — | |||
| Partners’ capital: | ||||||
| Common Unitholders (29,093,133 and 29,694,433 common units outstanding as of June 30, 2025 and December 31, 2024, respectively) | 1, 9 | 3,136,682 | 3,053,295 | |||
| General Partner (622,296 general partnership units outstanding at each of June 30, 2025 and December 31, 2024) | 1 | 55,616 | 53,333 | |||
| Accumulated Other Comprehensive Loss | 8 | (2,314 | ) | — | ||
| Total partners’ capital | 3,189,984 | 3,106,628 | ||||
| Total liabilities and partners’ capital | $ | 5,884,553 | $ | 5,673,240 |
See unaudited notes to the condensed consolidated financial statements
F-2
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of U.S. Dollars except per unit data)
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Notes | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Time charter and voyage revenues | 2, 14 | $ | 327,558 | $ | 342,155 | $ | 631,670 | $ | 660,710 | ||||
| Time charter and voyage expenses <br>(including $4,023, $0, $7,871 and $0 to related parties) | 12, 14 | (31,215 | ) | (40,044 | ) | (61,232 | ) | (81,955 | ) | ||||
| Vessel operating expenses <br>(including $12,802, $85,886, $25,532 and $171,130 to related parties) | 12 | (97,404 | ) | (88,282 | ) | (192,246 | ) | (176,410 | ) | ||||
| General and administrative expenses | 12 | (23,422 | ) | (20,584 | ) | (45,394 | ) | (41,328 | ) | ||||
| Depreciation and amortization | 4, 5 | (80,785 | ) | (72,219 | ) | (159,430 | ) | (142,136 | ) | ||||
| Amortization of unfavorable lease terms | 5 | 2,912 | 3,171 | 5,792 | 6,307 | ||||||||
| Gain/ (loss) on sale of vessels, net | 4 | 5,601 | 7,256 | (329 | ) | 9,133 | |||||||
| Interest expense and finance cost, net | 7 | (33,485 | ) | (30,087 | ) | (66,995 | ) | (59,496 | ) | ||||
| Interest income | 3,069 | 3,596 | 6,463 | 6,992 | |||||||||
| Other expense, net | (2,882 | ) | (3,493 | ) | (6,625 | ) | (6,987 | ) | |||||
| Net income | $ | 69,947 | $ | 101,469 | $ | 111,674 | $ | 174,830 | |||||
| Other comprehensive loss | |||||||||||||
| Unrealized loss on cash flow hedges | 8 | $ | (543 | ) | $ | — | $ | (2,314 | ) | $ | — | ||
| Total other comprehensive loss | $ | (543 | ) | $ | — | $ | (2,314 | ) | $ | — | |||
| Total comprehensive income | $ | 69,404 | $ | 101,469 | $ | 109,360 | $ | 174,830 | |||||
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Net income | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Common Unitholders | $ | 68,478 | $ | 99,439 | $ | 109,329 | $ | 171,333 | |||||
| General Partner | 1,469 | 2,030 | 2,345 | 3,497 | |||||||||
| Net income | $ | 69,947 | $ | 101,469 | $ | 111,674 | $ | 174,830 | |||||
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Earnings per unit (see Note 13): | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Earnings per common unit, basic | $ | 2.34 | $ | 3.30 | $ | 3.72 | $ | 5.68 | |||||
| Earnings per common unit, diluted | $ | 2.34 | $ | 3.30 | $ | 3.72 | $ | 5.68 |
See unaudited notes to the condensed consolidated financial statements
F-3
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
| Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | ||||||
|---|---|---|---|---|---|---|---|
| Notes | (unaudited) | (unaudited) | |||||
| OPERATING ACTIVITIES: | |||||||
| Net income | $ | 111,674 | $ | 174,830 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 4, 5 | 159,430 | 142,136 | ||||
| Amortization of unfavorable lease terms | 5 | (5,792 | ) | (6,307 | ) | ||
| Other non-cash adjustments | (4,764 | ) | (5,057 | ) | |||
| Amortization of operating lease assets/ liabilities | 14 | (373 | ) | (2,594 | ) | ||
| Amortization and write-off of deferred finance costs | 7 | 3,899 | 3,709 | ||||
| Loss/ (gain) on sale of vessels, net | 4 | 329 | (9,133 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Decrease in accounts receivable | 12,098 | 1,348 | |||||
| Decrease in prepaid expenses and other current assets | 2,184 | 1,628 | |||||
| Decrease in amounts due from related parties (including current and non-current portion) | 12 | 34,958 | 10,050 | ||||
| Payments for drydock and special survey costs | (77,215 | ) | (38,590 | ) | |||
| Increase/ (decrease) in accounts payable | 866 | (7,128 | ) | ||||
| Increase/ (decrease) in accrued expenses | 5,105 | (950 | ) | ||||
| Decrease in deferred revenue | (3,755 | ) | (6,021 | ) | |||
| Increase/ (decrease) in amounts due to related parties | 12 | 39,536 | (32,006 | ) | |||
| Net cash provided by operating activities | 278,180 | 225,915 | |||||
| INVESTING ACTIVITIES: | |||||||
| Net cash proceeds from sale of vessels | 4 | 33,717 | 91,400 | ||||
| Other investments | 3 | 903 | 8,457 | ||||
| Deposits for acquisition/ option to acquire vessel | 11 | (109,905 | ) | (182,627 | ) | ||
| Acquisition of/ additions to vessels | 4, 12 | (193,365 | ) | (211,187 | ) | ||
| Net cash used in investing activities | (268,650 | ) | (293,957 | ) | |||
| FINANCING ACTIVITIES: | |||||||
| Cash distributions paid | 13 | (3,004 | ) | (3,080 | ) | ||
| Repayment of long-term debt, finance lease and financial liabilities | 6 | (245,735 | ) | (199,256 | ) | ||
| Payments of deferred finance costs | 6 | (5,271 | ) | (4,973 | ) | ||
| Proceeds from long-term debt, finance lease and financial liabilities | 6 | 345,314 | 311,020 | ||||
| Acquisition of treasury units | 9 | (23,000 | ) | (5,000 | ) | ||
| Net cash provided by financing activities | 68,304 | 98,711 | |||||
| Increase in cash, cash equivalents and restricted cash | 77,834 | 30,669 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 299,789 | 249,175 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 377,623 | $ | 279,844 | |||
| Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | ||||||
| --- | --- | --- | --- | --- | --- | --- | |
| (unaudited) | (unaudited) | ||||||
| Supplemental disclosures of cash flow information | |||||||
| Cash interest paid | $ | 65,539 | $ | 67,978 | |||
| Non-cash financing activities | |||||||
| Financial and finance lease liabilities | $ | — | $ | 27,463 | |||
| Non-cash investing activities | |||||||
| Deposits for acquisition/ option to acquire vessel | $ | 287,381 | $ | 101,687 | |||
| Acquisition of/ additions to vessels | $ | (287,381 | ) | $ | (138,800 | ) |
See unaudited notes to the condensed consolidated financial statements
F-4
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
(Expressed in thousands of U.S. Dollars except unit and per unit data)
| Accumulated | Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Unitholders | Other Comprehensive | Partners’ | ||||||||||||||
| Amount | Units | Amount | Loss | Capital | ||||||||||||
| Balance December 31, 2024 | 622,296 | $ | 53,333 | 29,694,433 | $ | 3,053,295 | $ | — | $ | 3,106,628 | ||||||
| Cash distribution paid (0.05 per unit—see Note 13) | — | (31 | ) | — | (1,480 | ) | — | (1,511 | ) | |||||||
| Acquisition of treasury units (see Note 9) | — | — | (236,459 | ) | (10,000 | ) | — | (10,000 | ) | |||||||
| Other comprehensive loss (see Note 8) | — | — | — | — | (1,771 | ) | (1,771 | ) | ||||||||
| Net income | — | 876 | — | 40,851 | — | 41,727 | ||||||||||
| Balance March 31, 2025 | 622,296 | $ | 54,178 | 29,457,974 | $ | 3,082,666 | $ | (1,771 | ) | $ | 3,135,073 | |||||
| Cash distribution paid (0.05 per unit—see Note 13) | — | (31 | ) | — | (1,462 | ) | — | (1,493 | ) | |||||||
| Acquisition of treasury units (see Note 9) | — | — | (364,841 | ) | (13,000 | ) | — | (13,000 | ) | |||||||
| Other comprehensive loss (see Note 8) | — | — | — | — | (543 | ) | (543 | ) | ||||||||
| Net income | — | 1,469 | — | 68,478 | — | 69,947 | ||||||||||
| Balance June 30, 2025 | 622,296 | $ | 55,616 | 29,093,133 | $ | 3,136,682 | $ | (2,314 | ) | $ | 3,189,984 |
All values are in US Dollars.
| Total | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Unitholders | Partners’ | ||||||||||||
| Amount | Units | Amount | Capital | ||||||||||
| Balance December 31, 2023 | 622,296 | $ | 46,016 | 30,184,388 | $ | 2,724,436 | $ | 2,770,452 | |||||
| Cash distribution paid (0.05 per unit—see Note 13) | — | (31 | ) | — | (1,509 | ) | (1,540 | ) | |||||
| Net income | — | 1,467 | — | 71,894 | 73,361 | ||||||||
| Balance March 31, 2024 | 622,296 | $ | 47,452 | 30,184,388 | $ | 2,794,821 | $ | 2,842,273 | |||||
| Cash distribution paid (0.05 per unit—see Note 13) | — | (31 | ) | — | (1,509 | ) | (1,540 | ) | |||||
| Acquisition of treasury units (see Note 9) | — | — | (100,538 | ) | (5,000 | ) | (5,000 | ) | |||||
| Net income | — | 2,030 | — | 99,439 | 101,469 | ||||||||
| Balance June 30, 2024 | 622,296 | $ | 49,451 | 30,083,850 | $ | 2,887,751 | $ | 2,937,202 |
All values are in US Dollars.
See unaudited notes to the condensed consolidated financial statements
F-5
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
NOTE 1 – DESCRIPTION OF BUSINESS
Navios Maritime Partners L.P. (“Navios Partners” or the “Company”), is an international owner and operator of dry cargo and tanker vessels, formed on August 7, 2007 under the laws of the Republic of the Marshall Islands.
Navios Partners is engaged in the seaborne transportation services of a wide range of liquid and dry cargo commodities including crude oil, refined petroleum, chemicals, iron ore, coal, grain, fertilizer and also containers, chartering its vessels under short-term, medium-term and longer-term charters. The operations of Navios Partners are managed by Navios Shipmanagement Inc. and its affiliates (the “Manager”), which are entities affiliated with the Company’s Chairwoman and Chief Executive Officer (see Note 12 – Transactions with related parties and affiliates).
As of June 30, 2025, there were outstanding 29,093,133 common units and 622,296 general partnership units. Angeliki Frangou, our Chief Executive Officer and Chairwoman beneficially owned an approximately 17.3% common interest of the total outstanding common units including 4,672,314 common units held through four entities affiliated with her. An entity affiliated with Angeliki Frangou beneficially owned 622,296 general partnership units, representing an approximately 2.1% ownership interest in Navios Partners based on all outstanding common units and general partnership units (see Note 12 – Transactions with related parties and affiliates).
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- Basis of presentation: The accompanying interim condensed consolidated financial statements are unaudited, but, in the opinion of management, reflect all adjustments for a fair statement of Navios Partners’ consolidated balance sheets, statement of partners’ capital, statements of comprehensive income and cash flows for the periods presented. The results of operations for the interim periods are not necessarily indicative of results for the full year. The footnotes are condensed as permitted by the requirements for interim financial statements and accordingly, do not include information and disclosures required under United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. All such adjustments are deemed to be of a normal recurring nature. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements and notes included in Navios Partners’ annual report for the year ended December 31, 2024 filed on Form 20-F on March 28, 2025 (the “Annual Report”) with the U.S. Securities and Exchange Commission (“SEC”). Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current periods. The Company has changed its classification of “Direct vessel expenses” to reallocate these amounts between “Vessel operating expenses” and “Depreciation and amortization” in the condensed Consolidated Statements of Comprehensive Income. Management has assessed the impact of this change as immaterial to the financial statements. For the three month period ended June 30, 2024, this resulted in the reclassification of $3,011 and $15,905 of vessel operating expenses and amortization of deferred drydock and special survey costs, respectively, under the captions “Vessel operating expenses” and “Depreciation and amortization” in the condensed Consolidated Statements of Comprehensive Income. The aggregate amount of $18,916 was previously presented under the caption “Direct vessel expenses” in the condensed Consolidated Statements of Operations for the three month period ended June 30, 2024. For the six month period ended June 30, 2024, this resulted in the reclassification of $6,217 and $30,252 of vessel operating expenses and amortization of deferred drydock and special survey costs, respectively, under the captions “Vessel operating expenses” and “Depreciation and amortization” in the condensed Consolidated Statements of Comprehensive Income. The aggregate amount of $36,469 was previously presented under the caption “Direct vessel expenses” in the condensed Consolidated Statements of Operations for the six month period ended June 30, 2024.
Based on internal forecasts and projections that take into account reasonably possible changes in Company’s trading performance, management believes that the Company has adequate financial resources, including cash from sale of vessels (see Note 4 – Vessels, net and Note 15 – Subsequent events) to continue in operation and meet its financial commitments, including but not limited to capital expenditures and debt service obligations, for a period of at least 12 months from the date of issuance of these condensed consolidated financial statements. Accordingly, the Company continues to adopt the going concern basis in preparing its financial statements.
- Principles of consolidation: The accompanying interim condensed consolidated financial statements include Navios Partners’ wholly owned subsidiaries from their dates of incorporation, or from their dates of redomiciliation, or from the date of acquiring control or, for chartered-in vessels, from the dates charter-in agreements were in effect. All significant inter-company balances and transactions have been eliminated in Navios Partners’ condensed consolidated financial statements.
Navios Partners also consolidates entities that are determined to be variable interest entities (“VIE”) as defined in the accounting guidance, if it determines that it is the primary beneficiary. A VIE is defined as a legal entity where either (i)
F-6
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
equity interest holders as a group lack the characteristics of a controlling financial interest, including decision making ability and an interest in the entity’s residual risks and rewards, (ii) the equity holders have not provided sufficient equity investment to permit the entity to finance its activities without additional subordinated financial support, or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights.
Subsidiaries: Subsidiaries are those entities in which Navios Partners has an interest of more than one half of the voting rights.
A discussion of the Company’s significant accounting policies can be found in Note 2 – Summary of significant accounting policies to the Company’s consolidated financial statements included in the Annual Report. There have been no material changes to these policies in the six month period ended June 30, 2025, apart from those discussed below:
- (c)
Revenue from time chartering and bareboat chartering
Revenues from time chartering and bareboat chartering of vessels are accounted for as operating leases and are thus recognized on a straight line basis as the average lease revenue over the rental periods of such charter agreements, as service is performed. A time charter involves placing a vessel at the charterers’ disposal for a period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Short period charters for less than three months are referred to as spot-charters. Charters extending three months to a year are generally referred to as medium-term charters. All other charters are considered long-term. The Company has determined to recognize lease revenue as a combined single lease component for all time charters (operating leases) as the related lease component and non-lease components will have the same timing and pattern of the revenue recognition of the combined single lease component. The performance obligations in a time charter contract are satisfied over term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the Company. Under time charters, operating costs such as for crews, maintenance and insurance are typically paid by the owner of the vessel. Revenue from time chartering and bareboat chartering of vessels amounted to $315,290 and $301,435 for the three month periods ended June 30, 2025 and 2024, respectively. Revenue from time chartering and bareboat chartering of vessels amounted to $607,345 and $571,696 for the six month periods ended June 30, 2025 and 2024, respectively.
Revenue from voyage charters
Under a voyage charter, a vessel is provided for the transportation of specific goods between specific ports in return for payment of an agreed upon freight per ton of cargo. In accordance with ASC 606, the Company recognizes revenue ratably from port of loading to when the charterer’s cargo is discharged as well as defer costs that meet the definition of “costs to fulfill a contract” and relate directly to the contract. Revenue from voyage contracts amounted to $3,568 and $32,729 for the three month periods ended June 30, 2025 and 2024, respectively. Revenue from voyage contracts amounted to $8,798 and $70,870 for the six month periods ended June 30, 2025 and 2024, respectively.
Revenue from pooling arrangements
For vessels operating in pooling arrangements, the Company earns a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Company’s vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel’s age, design and other performance characteristics. Revenue under pooling arrangements is accounted for as variable rate operating leases under the scope of ASC 842 and is recognized for the applicable period when collectability is reasonably assured. The allocation of such net revenue may be subject to future adjustments by the pool however, such changes are not expected to be material. The Company recognizes net pool revenue on a monthly and quarterly basis, when the vessel has participated in a pool during the period and the amount of pool revenue can be estimated reliably based on the pool report. Revenue from vessels operating in pooling arrangements amounted to $8,700 and $7,991 for the three month periods ended June 30, 2025 and 2024, respectively. Revenue from vessels operating in pooling arrangements amounted to $15,527 and $18,144 for the six month periods ended June 30, 2025 and 2024, respectively.
Revenues are recorded net of address commissions. Address commissions represent a discount provided directly to the charterers based on a fixed percentage of the agreed upon charter or freight rate. Since address commissions represent a discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer, these commissions are presented as a reduction of revenue.
F-7
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
- Derivative instruments: Navios Partners may periodically enter into derivative instruments, such as interest rate swaps, to manage exposure to interest rate fluctuations associated with specific borrowings. All derivative instruments are initially recognized on the consolidated balance sheet at their fair value. Transaction costs related to derivatives are expensed as incurred. The accounting treatment for changes in the fair value of the derivative depends on its intended use, whether the Company has designated it as part of a hedging relationship, and whether the hedging relationship meets the necessary criteria for hedge accounting under ASC 815, Derivatives and Hedging.
At the inception of a derivative contract, the Company may designate the derivative as an accounting hedge of the variability in cash flows associated with a forecasted transaction (“Cash Flow Hedge”). For a derivative to qualify for Cash Flow Hedge accounting, the hedging relationship must be formally documented at inception and must be expected to be highly effective in offsetting changes in the cash flows of the hedged item. This effectiveness is assessed both at hedge inception and on an ongoing basis. Changes in the fair value of a derivative designated and qualified as an effective Cash Flow Hedge are recognized in other comprehensive income/ (loss) and reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. Any ineffective portion of a designated Cash Flow Hedge is recognized immediately in earnings. Changes in the fair value of derivatives that are not designated as accounting hedges under ASC 815 are also recognized in earnings in the period in which they occur.
Hedge accounting is discontinued prospectively when the derivative instrument expires, is sold, terminated, or exercised; when the hedging relationship no longer qualifies for hedge accounting under ASC 815; or when the Company elects to remove the hedge designation. Upon discontinuation, the cumulative gain or loss associated with the hedge that remains in accumulated other comprehensive income/ (loss) continues to be deferred and is reclassified into earnings in the same period or periods during which the forecasted transaction affects earnings. However, if the forecasted transaction is no longer probable of occurring, the amount previously recorded in accumulated other comprehensive income/ (loss) is immediately reclassified into earnings.
Recent Accounting Pronouncements:
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in Navios Partners’ Annual Report.
NOTE 3 – CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND OTHER INVESTMENTS
| June 30, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Cash and cash equivalents | $ | 377,034 | $ | 270,166 |
| Restricted cash | 589 | 29,623 | ||
| Total cash and cash equivalents and restricted cash | $ | 377,623 | $ | 299,789 |
Restricted cash relates to amounts held in retention accounts in order to service debt and interest payments, as required by certain of the Company’s credit facilities and financial liabilities.
Cash deposits and cash equivalents in excess of amounts covered by government-provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Partners does maintain cash deposits and cash equivalents in excess of government-provided insurance limits. Navios Partners also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.
Other investments consist of time deposits with original maturities of greater than three months and less than 12 months. As of June 30, 2025 and December 31, 2024, other investments amounted to $11,386 and $12,289, respectively.
F-8
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
NOTE 4 – VESSELS, NET
| Total Vessels | Cost | Accumulated<br>Depreciation | Net<br>Book Value | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance December 31, 2024 | $ | 5,050,766 | $ | (809,474 | ) | $ | 4,241,292 | ||
| Additions/ (Depreciation) | 480,746 | (113,438 | ) | 367,308 | |||||
| Disposals/ (Impairment) | (38,943 | ) | 9,317 | (29,626 | ) | ||||
| Transfer to assets held for sale | (26,699 | ) | — | (26,699 | ) | ||||
| Balance June 30, 2025 | $ | 5,465,870 | $ | (913,595 | ) | $ | 4,552,275 |
The above balances as of June 30, 2025 are analyzed in the following tables:
| Owned Vessels | Cost | Accumulated<br>Depreciation | Net<br>Book Value | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance December 31, 2024 | $ | 4,594,294 | $ | (775,478 | ) | $ | 3,818,816 | ||
| Additions/ (Depreciation) | 480,746 | (105,569 | ) | 375,177 | |||||
| Disposals/ (Impairment) | (38,943 | ) | 9,317 | (29,626 | ) | ||||
| Transfer to assets held for sale | (26,699 | ) | — | (26,699 | ) | ||||
| Balance June 30, 2025 | $ | 5,009,398 | $ | (871,730 | ) | $ | 4,137,668 | ||
| Right-of-use assets under finance lease | Cost | Accumulated<br>Depreciation | Net<br>Book Value | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Balance December 31, 2024 | $ | 456,472 | $ | (33,996 | ) | $ | 422,476 | ||
| Depreciation | — | (7,869 | ) | (7,869 | ) | ||||
| Balance June 30, 2025 | $ | 456,472 | $ | (41,865 | ) | $ | 414,607 |
Right-of-use assets under finance leases are calculated at an amount equal to the corresponding finance liability, increased with the allocated excess value, the initial direct costs and adjusted for the carrying amount of the straight-line effect of finance liability as well as the favorable and unfavorable lease terms derived from charter-in agreements. During the six month period ended June 30, 2024, following the declarations of the Company’s option to extend the charter period for one year for one Kamsarmax vessel and the option to acquire four Kamsarmax vessels (one of which was delivered into Navios Partners’ fleet in June 2024) and one Ultra-Handymax vessel, the corresponding right-of-use asset under finance lease was increased by the aggregate amount of $25,426.
During the six month periods ended June 30, 2025 and 2024, the Company capitalized certain fees and costs related to vessels’ regulatory requirements, including ballast water treatment system installation, exhaust gas cleaning system installation and other improvements, that amounted to $16,134 and $10,284, respectively, and are presented under the caption “Acquisition of/ additions to vessels” in the condensed Consolidated Statements of Cash Flows (see Note 12 – Transactions with related parties and affiliates).
Acquisition of Vessels
2025
During the six month period ended June 30, 2025, Navios Partners took delivery of five
2025
-built vessels (two 7,700 TEU Containerships and three Aframax/LR2 tanker vessels), from unrelated third parties, for an aggregate acquisition cost of $464,612 (including $49,934 capitalized expenses).
2024
During the six month period ended June 30, 2024, Navios Partners took delivery of four
2024
-built vessels (three 5,300 TEU Containerships and one Aframax/LR2 tanker vessel of 115,651 dwt), from unrelated third parties, for an aggregate acquisition cost of $273,801 (including $23,893 capitalized expenses).
During the six month period ended June 30, 2024, Navios Partners paid an amount of $28,789 and acquired from an unrelated third party, a
2016
-built Kamsarmax vessel of 84,904 dwt, which was previously accounted for as a right-of-use asset under a finance lease. At the same date, the Company derecognized the right-of-use asset under the finance lease and recognized the vessel at an aggregate cost of $40,495.
F-9
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
In June 2024, Navios Partners agreed to acquire from an unrelated third party the Navios Venus, a
2015
-built Ultra-Handymax vessel of 61,339 dwt, which was previously chartered-in and accounted for as a right-of-use asset under operating lease. In accordance with the provisions of ASC 842, the Company accounted the transaction as a lease modification and upon reassessment of the classification of the lease, the Company has classified the above transaction as a finance lease, as of the effective date of the modification. Following the reassessment performed, the Company recognized a right-of-use asset at $27,463, being an amount equal to the finance lease liability. The acquisition was completed on December 27, 2024.
Sale of Vessels
2025
During the six month period ended June 30, 2025, Navios Partners sold three vessels to unrelated third parties for an aggregate net sales price of $33,717. Following the sale of such vessels and the classification of a vessel as held for sale, as discussed below, an aggregate loss of $329 (including the remaining carrying balance of drydock and special survey cost of $2,175 and the straight line asset associated with the vessel held for sale of $2,245) is presented under the caption “Gain/ (loss) on sale of vessels, net” in the condensed Consolidated Statements of Comprehensive Income. This amount includes an impairment loss of $2,992 in connection with the classification of a
2009
-built transhipper vessel of 57,573 dwt as held for sale. This amount also includes an impairment loss of $3,790, recognized upon the classification of a
2006
-built Panamax of 76,596 dwt as held for sale as of March 31, 2025, with the sale completed during the three month period ended June 30, 2025.
2024
During the six month period ended June 30, 2024, Navios Partners sold four vessels to unrelated third parties for an aggregate net sales price of $91,400. Following the sale of such vessels, the aggregate gain of $16,747 (including the aggregate remaining carrying balance of drydock and special survey cost of $991) is presented under the caption “Gain/ (loss) on sale of vessels, net” in the condensed Consolidated Statements of Comprehensive Income.
Vessels “agreed to be sold”
2025
During the six month period ended June 30, 2025, Navios Partners agreed to sell a
2009
-built 4,250 TEU Containership and a
2008
-built 4,730 TEU Containership to unrelated third parties. The aggregate gross sale price of the above vessels amounted to $65,500. The Company has performed an assessment based on provisions of ASC 360 and concluded that the held for sale criteria were not met and the vessels were not classified as held for sale as of June 30, 2025. The sale of the
2009
-built 4,250 TEU Containership is expected to be completed during the fourth quarter of 2025 and the sale of the
2008
-built 4,730 TEU Containership is expected to be completed during the first quarter of 2026. In addition, as of June 30, 2025, the Company had initiated a process to sell a
2009
-built transhipper vessel of 57,573 dwt to Navios South American Logistics Inc. (“NSAL”). The Company entered into a definitive agreement with NSAL in July 2025. The transaction was negotiated and approved by the Conflicts Committee of Navios Partners (see Note 12 – Transactions with related parties and affiliates). As of June 30, 2025, the above vessel has been classified as held for sale, according to the provisions of ASC 360, as the relevant criteria for the classification were met and is presented under the caption “Assets held for sale” in the condensed Consolidated Balance Sheets, measured at the lower of carrying value and fair value less costs to sell (see Note - 8 Fair value of financial instruments). The inventories associated with the vessel held for sale of $141 are presented under the caption “Assets held for sale” in the condensed Consolidated Balance Sheets. The sale was completed on July 30, 2025.
Vessels impairment loss
2025
As at June 30, 2025, Navios Partners assessed whether impairment indicators for any of its long-lived assets existed and concluded that no such indicators were present. During the second quarter of 2025, an impairment loss of $2,992 was recognized in connection with the classification of a
2009
-built transhipper vessel of 57,573 dwt as held for sale, as described above, as the carrying amount of the asset group was not recoverable and exceeded its fair value less costs to sell.
F-10
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
2024
As of June 30, 2024, Navios Partners assessed whether impairment indicators for any of its long-lived assets existed and concluded that such indicators were present for two of its dry bulk vessels, mainly due to Company’s intention to sell these vessels. As of June 30, 2024, the undiscounted projected net operating cash flows for the two vessels did not exceed the carrying value of each asset group and an impairment loss of $7,614 was recognized and is presented under the caption “Gain/ (loss) on sale of vessels, net” in the condensed Consolidated Statements of Comprehensive Income. The impairment loss was calculated as the difference between the fair value of the vessel and the carrying value of the asset group.
NOTE 5 – INTANGIBLE ASSETS AND LIABILITIES
Intangible assets as of June 30, 2025 and December 31, 2024 consisted of the following:
| Cost | Accumulated<br>Amortization | Net Book Value | ||||||
|---|---|---|---|---|---|---|---|---|
| Favorable lease terms December 31, 2024 | $ | 211,644 | $ | (169,333 | ) | $ | 42,311 | |
| Amortization | — | (8,660 | ) | (8,660 | ) | |||
| Favorable lease terms June 30, 2025 | $ | 211,644 | $ | (177,993 | ) | $ | 33,651 |
Amortization expense of favorable lease terms for each of the periods ended June 30, 2025 and 2024 is presented in the following table:
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Favorable lease terms | $ | (4,220 | ) | $ | (4,540 | ) | $ | (8,660 | ) | $ | (9,079 | ) |
| Total | $ | (4,220 | ) | $ | (4,540 | ) | $ | (8,660 | ) | $ | (9,079 | ) |
The aggregate amortization of the intangible assets for the next five 12-month periods ending June 30 is estimated to be as follows:
| Period | Amount | |
|---|---|---|
| 2026 | $ | 11,182 |
| 2027 | 5,115 | |
| 2028 | 4,982 | |
| 2029 | 4,982 | |
| 2030 | 4,982 | |
| 2031 and thereafter | 2,408 | |
| Total | $ | 33,651 |
Intangible assets subject to amortization are amortized using straight-line method over their estimated useful lives to their estimated residual value of zero. As of June 30, 2025, the weighted average useful life of the remaining favorable lease terms was
4.6
years. On July 3, 2025, the U.S. Department of Treasury’s Office of Foreign Assets Control added, amongst others, VS Tankers FZE (“VS Tankers”) to the Specially Designated Nationals list after being determined by the State Department to meet the criteria for the imposition of sanctions under Executive Order 13902. Navios Partners had two VLCCs, which were bareboat chartered-out to VS Tankers. On July 4, 2025, Navios Partners terminated the contracts for these vessels. The termination of these contracts is expected to have a $27,277 accelerated amortization impact and the weighted average useful life of the remaining favorable lease term is expected to be
1.0
year. Intangible liabilities as of June 30, 2025 and December 31, 2024 consisted of the following:
| Cost | Accumulated<br>Amortization | Net Book Value | ||||||
|---|---|---|---|---|---|---|---|---|
| Unfavorable lease terms December 31, 2024 | $ | 231,407 | $ | (216,141 | ) | $ | 15,266 | |
| Amortization | — | (5,792 | ) | (5,792 | ) | |||
| Unfavorable lease terms June 30, 2025 | $ | 231,407 | $ | (221,933 | ) | $ | 9,474 |
F-11
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
Amortization income of unfavorable lease terms for each of the periods ended June 30, 2025 and 2024 is presented in the following table:
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||
|---|---|---|---|---|---|---|---|---|
| Unfavorable lease terms | $ | 2,912 | $ | 3,171 | $ | 5,792 | $ | 6,307 |
| Total | $ | 2,912 | $ | 3,171 | $ | 5,792 | $ | 6,307 |
The aggregate amortization of the intangible liabilities for the next five 12-month periods ending June 30 is estimated to be as follows:
| Period | Amount | |
|---|---|---|
| 2026 | $ | 9,474 |
| 2027 | — | |
| 2028 | — | |
| 2029 | — | |
| 2030 | — | |
| 2031 and thereafter | — | |
| Total | $ | 9,474 |
Intangible liabilities subject to amortization are amortized using straight-line method over their estimated useful lives to their estimated residual value of zero. As of June 30, 2025, the weighted average useful life of the remaining unfavorable lease terms was
0.8
years.
NOTE 6 – BORROWINGS
Borrowings as of June 30, 2025 and December 31, 2024 consisted of the following:
| June 30, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Credit facilities <br>(including current liabilities associated with the vessel held for sale) | $ | 1,164,836 | $ | 1,096,178 | ||
| Financial liabilities | 770,464 | 731,206 | ||||
| Finance lease liabilities | 317,447 | 325,784 | ||||
| Total borrowings | $ | 2,252,747 | $ | 2,153,168 | ||
| Less: Current portion of long-term borrowings, net <br>(including current liabilities associated with the vessel held for sale) | (269,696 | ) | (266,222 | ) | ||
| Less: Deferred finance costs, net | (25,756 | ) | (24,231 | ) | ||
| Long-term borrowings, net | $ | 1,957,295 | $ | 1,862,715 |
As of June 30, 2025, the total borrowings, net of deferred finance costs were $2,226,991.
Credit Facilities
NATIONAL BANK OF GREECE S.A.: On June 25, 2025, Navios Partners entered into a reducing revolving credit facility with National Bank of Greece S.A. for a total amount up to $100,000 in order to refinance the existing indebtedness of 13 of its vessels and for working capital purposes. On June 26, 2025, the amount of $40,000 was drawn. As of June 30, 2025, the total outstanding balance was $40,000 and the amount of $60,000 remained undrawn and available. The facility matures in the second quarter of 2030 and bears interest at Term Secured Overnight Financing Rate (“Term
SOFR
”) plus 170 bps per annum.
On September 19, 2024, Navios Partners entered into a credit facility with National Bank of Greece S.A. for a total amount up to $130,000 (divided into two tranches) in order to refinance the existing indebtedness of six of its vessels (tranche A) and to finance part of the acquisition cost of one Aframax/ LR2 newbuilding tanker vessel (tranche B). On September 20, 2024, the amount of $81,218 in relation to tranche A was drawn. On June 18, 2025, in relation to the delivery of the
F-12
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
2025-built Aframax/ LR2 of 115,812 dwt, the amount of $45,000 was drawn (tranche B). As of June 30, 2025, the total outstanding balance was $116,185. The credit facility matures five years after each drawdown date and bears interest at Term
SOFR
(with option to switch to Compounded Secured Overnight Financing Rate (“Compounded SOFR”)) plus 175 bps per annum and 150 bps per annum for drawn amounts of tranche A and tranche B, respectively.
BNP PARIBAS: On June 19, 2025, Navios Partners entered into a credit facility with BNP Paribas for a total amount up to $227,070 in order to refinance the existing indebtedness of six of its vessels (tranche A) and finance part of the acquisition cost of three vessels, which are currently under construction, one 7,900 TEU newbuilding Containership (tranche B) and two Aframax/LR2 newbuilding tanker vessels of 115,000 dwt (tranches C and D). On June 23, 2025, the amount of $62,500 in relation to tranche A was drawn. As of June 30, 2025, the total outstanding balance was $62,500 and tranches B, C and D remained undrawn. The credit facility matures in the second quarter of 2030 and bears interest at Compounded
SOFR
plus 175 bps per annum for drawn amount of tranche A. The credit facility matures seven years after each drawdown date and bears interest at Compounded SOFR plus 150 bps per annum for drawn amounts of tranches B, C and D.
On June 21, 2023, Navios Partners entered into a credit facility with BNP Paribas, Credit Agricole Corporate and Investment Bank and First-Citizens Bank & Trust Company for a total amount up to $107,600 in order to refinance the existing indebtedness of ten of its vessels and for general corporate purposes. On June 26, 2023, the full amount was drawn. In October 2024, following the sale of one 2005-built Panamax vessel of 76,596 dwt, the amount of $3,108 was prepaid. On November 14, 2024, Navios Partners prepaid the amount of $7,679 relating to one dry bulk vessel that was released from the facility. On June 25, 2025, the outstanding balance of $49,893 was fully prepaid and refinanced.
On June 12, 2023, Navios Partners entered into a credit facility with BNP Paribas for a total amount up to $40,000 in order to refinance the existing indebtedness of nine of its containerships. On June 16, 2023, the full amount was drawn. On April 29, 2024, Navios Partners prepaid the amount of $3,990 relating to one containership that was released from the facility. On June 23, 2025, the outstanding balance of $20,577 was fully prepaid and refinanced.
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK: On June 17, 2025, Navios Partners entered into a credit facility with Credit Agricole Corporate and Investment Bank (“CACIB”) for a total amount up to $62,500 in order to refinance the existing indebtedness of six of its vessels. On June 25, 2025, the full amount was drawn. As of June 30, 2025, the total outstanding balance was $62,500. The facility matures in the second quarter of 2030 and bears interest at Term
SOFR
plus 175 bps per annum.
On June 28, 2023, Navios Partners entered into a credit facility with CACIB for a total amount up to $62,400 in order to refinance the existing indebtedness of seven of its dry bulk vessels. On June 30, 2023, the full amount was drawn. During the year ended December 31, 2024, in relation to the sale of a 2006-built Kamsarmax vessel of 82,790 dwt, the amount of $3,818 was prepaid. On June 10, 2025, Navios Partners prepaid the amount of $17,650 relating to three dry bulk vessels that were released from the facility. On June 24, 2025, the outstanding balance of $22,113 was fully prepaid and refinanced.
KFW IPEX-BANK GMBH: On March 18, 2025, Navios Partners entered into an export credit agency-backed facility with KFW IPEX-BANK GMBH (“KFW”) for a total amount up to $151,502 (including insurance premium) in order to finance part of the acquisition cost of two newbuilding 7,900 TEU containerships, currently under construction. As of June 30, 2025, the total amount remained undrawn. The facility is scheduled to mature 12 years after the delivery date of each vessel and bears interest at Compounded SOFR plus 124 bps per annum.
On April 25, 2023, Navios Partners entered into an export agency-backed facility with KFW for a total amount up to $165,638 in order to finance the acquisition cost of two 7,700 TEU newbuilding containerships. During the year ended December 31, 2024, the Company drew a total amount of $119,434 and the remaining amount of $46,204 was drawn during the six month period ended June 30, 2025, in relation to the deliveries of the two 7,700 TEU newbuilding containerships. As of June 30, 2025, the total outstanding balance was $165,638. The credit facility matures in the first quarter of 2037 and bears interest at Compounded SOFR plus 150 bps per annum.
HELLENIC BANK PUBLIC COMPANY LIMITED: On December 4, 2024, Navios Partners entered into a credit facility with Hellenic Bank Public Company Limited (“Hellenic Bank”) for a total amount up to $30,000 in order to refinance the existing indebtedness of four of its vessels. On December 6, 2024, the full amount was drawn. During the six month period ended June 30, 2025, in relation to the sale of a 2006-built Panamax of 76,596 dwt, the amount of $3,750 was prepaid. As of June 30, 2025, the total outstanding balance was $24,000. The outstanding balance includes the amount of $7,400, which is related to a
2009
-built transhipper vessel of 57,573 dwt classified as held for sale and is presented
F-13
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
under the caption “Current liabilities associated with the vessel held for sale” in the condensed Consolidated Balance Sheets. The facility matures in the fourth quarter of 2029 and bears interest at Term
SOFR
plus 175 bps per annum.
On May 9, 2022, Navios Partners entered into a credit facility with Hellenic Bank for a total amount up to $25,235 in order to refinance the existing indebtedness of five of its vessels and for working capital purposes. On May 11, 2022, the full amount was drawn. In January 2023, following the sale of one 2005-built MR2 Product Tanker vessel of 47,999 dwt, the amount of $3,700 was prepaid. During the six month period ended June 30, 2025, in relation to the sale of a
2007
-built 2,741 TEU Containership, the amount of $1,350 was prepaid. As of June 30, 2025, the total outstanding balance was $9,000. The facility matures in the second quarter of 2027 and bears interest at Term
SOFR
plus a credit adjustment spread plus 250 bps per annum.
Financial Liabilities
In January 2024, Navios Partners entered into a sale and leaseback agreement for a total amount up to $45,260 with an unrelated third party, in order to finance the acquisition of one 115,000 dwt Aframax/LR2 newbuilding tanker vessel. Navios Partners has a purchase obligation to acquire the vessel at the end of the lease term and under ASC 842-40, the transfer of the vessel was determined to be a failed sale. In accordance with ASC 842-40, Navios Partners did not derecognize the respective vessel from its balance sheet and accounted for the amounts received under the sale and leaseback transaction as a financial liability. On April 1, 2025, the full amount was drawn in relation to the delivery of the 2025-built Aframax/LR2 tanker vessel of 115,762 dwt. The sale and leaseback transaction matures seven years after the drawdown date and bears interest at Term SOFR plus 190 bps per annum. As of June 30, 2025, the outstanding balance under the sale and leaseback agreement was $45,260.
In November 2023, Navios Partners entered into sale and leaseback agreements of $175,600 with unrelated third parties, in order to finance the acquisition of two 5,300 TEU newbuilding containerships and two Aframax/LR2 newbuilding tanker vessels. During the year ended December 31, 2024, the Company drew a total amount of $131,750 in relation to the deliveries of three vessels, and the remaining amount of $43,850 was drawn during the six month period ended June 30, 2025, in relation to the delivery of the
2025
-built Aframax/LR2 tanker vessel of 115,807 dwt. Navios Partners has a purchase obligation to acquire the vessels at the end of the lease term and under ASC 842-40, the transfer of the vessels was determined to be a failed sale. In accordance with ASC 842-40, Navios Partners did not derecognize the respective vessels from its balance sheet and accounted for the amounts received under the sale and leaseback transaction as a financial liability. The sale and leaseback transaction matures ten years after each drawdown date and bears interest at Term SOFR plus 200 bps per annum. As of June 30, 2025, the outstanding balance under the sale and leaseback agreement was $170,380. In October 2022, Navios Partners completed a $100,000 sale and leaseback agreement with unrelated third parties to refinance the existing sale and leaseback transaction of 12 containerships. Navios Partners has a purchase obligation to acquire the vessels at the end of the lease term and under ASC 842-40, the transfer of the vessels was determined to be a failed sale. In accordance with ASC 842-40, Navios Partners did not derecognize the respective vessels from its balance sheet and accounted for the amounts received under the sale and leaseback agreement as a financial liability. Navios Partners drew the entire amount on October 31, 2022, net of discount of $800. In May 2024, in relation to the sale of one
2007
-built 3,450 TEU containership, the amount of $4,411 was prepaid. The sale and leaseback agreement bears interest at Term SOFR plus 210 bps per annum and was to mature in the first quarter of 2026. Pursuant to an amendment dated March 19, 2025, the agreement matures in the first quarter of 2029 and for the three year extension period bears interest at Term SOFR plus 175 bps per annum. As of June 30, 2025, the outstanding balance under the sale and leaseback agreement was $43,109. In February 2022, Navios Maritime Holdings Inc. (“Navios Holdings”) entered into a sale and leaseback agreement with an unrelated third party for $12,000 in order to finance a Panamax vessel. Following the acquisition of the 36-vessel dry bulk fleet from Navios Holdings, Navios Partners had a purchase option to acquire the vessel at the end of the lease term and given the fact that such exercise price was not equal to the expected fair value of the asset at the end of the lease term, under ASC 842- 40, the transaction was determined to be a failed sale. In accordance with ASC 842-40, the Company did not derecognize the respective vessel from its balance sheet and accounted for the liability assumed under the sale and leaseback agreement as a financial liability. In February 2025, in relation to the sale of the Panamax vessel, the outstanding balance under the sale and leaseback agreement of $6,165 was fully prepaid.
F-14
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
Finance Lease Liabilities
For the six month periods ended June 30, 2025 and 2024, payments related to the finance lease liabilities amounted to $8,337 and $20,307, respectively, and are presented under the caption “Repayment of long-term debt, finance lease and financial liabilities” in the condensed Consolidated Statements of Cash Flows.
Covenants and Other Terms of Credit Facilities and Financial Liabilities
The credit facilities and certain financial liabilities contain a number of restrictive covenants that prohibit or limit Navios Partners from, among other things: incurring or guaranteeing indebtedness; entering into affiliate transactions; charging, pledging or encumbering the vessels; changing the flag, class, management or ownership of Navios Partners’ vessels; changing the commercial and technical management of Navios Partners’ vessels; selling or changing the beneficial ownership or control of Navios Partners’ vessels; not maintaining Angeliki Frangou’s or her affiliates’ ownership in Navios Partners of at least 5.0%; and subordinating the obligations under the credit facilities to any general and administrative costs related to the vessels and the payables under the Master Management Agreement (as defined herein).
The Company’s credit facilities and certain financial liabilities also require compliance with a number of financial covenants, including: (i) maintain a required security ranging over 110% to 140%; (ii) minimum free consolidated liquidity in an amount equal to $500 per owned vessel and a number of vessels as defined in the Company’s credit facilities and financial liabilities; (iii) maintain a ratio of EBITDA to interest expense of at least 2.00:1.00; (iv) maintain a ratio of total liabilities or total debt to total assets (as defined in the Company’s credit facilities and financial liabilities) ranging from less than 0.75 to 0.80; and (v) maintain a minimum net worth of $135,000.
It is an event of default under the credit facilities and certain financial liabilities if such covenants are not complied with in accordance with the terms and subject to the prepayments or cure provisions of the facilities.
As of June 30, 2025, Navios Partners was in compliance with the financial covenants and/or the prepayments and/or the cure provisions, as applicable, in each of its credit facilities and certain financial liabilities.
The annualized weighted average interest rates of the Company’s total borrowings for each of the three and six month periods ended June 30, 2025, were 6.3%. The annualized weighted average interest rates of the Company’s total borrowings for each of the three and six month periods ended June 30, 2024, were 7.1%.
The maturity table below reflects the principal payments for the next five 12-month periods ending June 30 of all borrowings of Navios Partners outstanding as of June 30, 2025, based on the repayment schedules of the respective credit facilities (including current liabilities associated with the vessel held for sale), financial liabilities and finance lease liabilities.
| Period | Amount | |
|---|---|---|
| 2026 | $ | 275,845 |
| 2027 | 332,464 | |
| 2028 | 315,285 | |
| 2029 | 309,118 | |
| 2030 | 292,138 | |
| 2031 and thereafter | 727,897 | |
| Total | $ | 2,252,747 |
F-15
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
NOTE 7 – INTEREST EXPENSE AND FINANCE COST, NET
Interest expense and finance cost, net for the three and six month periods ended June 30, 2025 and 2024 consisted of the following:
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Interest expense incurred on credit facilities and financial liabilities | $ | 29,717 | $ | 26,842 | $ | 59,092 | $ | 52,789 | ||||
| Interest expense incurred on finance lease liabilities | 5,355 | 7,783 | 10,770 | 15,817 | ||||||||
| Interest expense capitalized related to deposits for vessel acquisitions | (4,303 | ) | (6,500 | ) | (8,182 | ) | (12,637 | ) | ||||
| Amortization and write-off of deferred finance costs | 2,227 | 2,033 | 3,899 | 3,709 | ||||||||
| Discount effect of long-term assets and other finance costs | 489 | (71 | ) | 1,416 | (182 | ) | ||||||
| Total interest expense and finance cost, net | $ | 33,485 | $ | 30,087 | $ | 66,995 | $ | 59,496 |
Interest expense incurred on deposits for vessel acquisitions was initially capitalized under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets.
NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of many of Navios Partners’ financial instruments, including accounts receivable and accounts payable approximate their fair value due primarily to the short-term maturity of the related instruments.
Fair value of financial instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash and cash equivalents: The carrying amounts reported in the condensed Consolidated Balance Sheets for interest bearing deposits approximate their fair value because of the short maturity of these deposits.
Restricted cash: The carrying amounts reported in the condensed Consolidated Balance Sheets for interest bearing deposits approximate their fair value because of the short maturity of these deposits.
Other investments: The carrying amounts reported in the condensed Consolidated Balance Sheets for interest bearing deposits approximate their fair value because of the short maturity of these deposits.
Amounts due from related parties, short-term: The carrying amount of due from related parties, short-term reported in the condensed Consolidated Balance Sheets approximates its fair value due to the short-term nature of these receivables.
Amounts due to related parties, short-term: The carrying amount of due to related parties, short-term reported in the condensed Consolidated Balance Sheets approximates its fair value due to the short-term nature of these payables.
Credit facilities and financial liabilities, including current portion, net (including current liabilities associated with the vessel held for sale): The book value has been adjusted to reflect the net presentation of deferred finance costs. The outstanding balance of the floating rate credit facilities, financial liabilities and current liabilities associated with the vessel held for sale continues to approximate its fair value, excluding the effect of any deferred finance costs.
Fair value of derivatives, including current portion: The carrying amounts reported in the condensed Consolidated Balance Sheets for interest rate swap agreements represent their fair value.
The estimated fair values of the Navios Partners’ financial instruments are as follows:
F-16
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
| June 30, 2025 | December 31, 2024 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Book<br>Value | Fair<br>Value | Book<br>Value | Fair<br>Value | |||||||||
| Cash and cash equivalents | $ | 377,034 | $ | 377,034 | $ | 270,166 | $ | 270,166 | ||||
| Restricted cash | $ | 589 | $ | 589 | $ | 29,623 | $ | 29,623 | ||||
| Other investments | $ | 11,386 | $ | 11,386 | $ | 12,289 | $ | 12,289 | ||||
| Amounts due from related parties, short-term | $ | 1,662 | $ | 1,662 | $ | 36,620 | $ | 36,620 | ||||
| Amounts due to related parties, short-term | $ | (39,536 | ) | $ | (39,536 | ) | $ | — | $ | — | ||
| Credit facilities and financial liabilities, including current portion, net (including current liabilities associated with the vessel held for sale) | $ | (1,909,544 | ) | $ | (1,935,300 | ) | $ | (1,803,153 | ) | $ | (1,827,384 | ) |
| Fair value of derivatives, including current portion | $ | (2,314 | ) | $ | (2,314 | ) | $ | — | $ | — |
Fair Value Measurements
The estimated fair value of the Company’s financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:
Level I: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Valuation of these items does not entail a significant amount of judgment.
Level II: Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III: Inputs that are unobservable. The Company did not use any Level III inputs as of June 30, 2025 and December 31, 2024.
| Fair Value Measurements as at June 30, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Total | Level I | Level II | Level III | |||||||
| Cash and cash equivalents | $ | 377,034 | $ | 377,034 | $ | — | $ | — | ||
| Restricted cash | $ | 589 | $ | 589 | $ | — | $ | — | ||
| Other investments | $ | 11,386 | $ | 11,386 | $ | — | $ | — | ||
| Amounts due from related parties, short-term | $ | 1,662 | $ | — | $ | 1,662 | $ | — | ||
| Amounts due to related parties, short-term | $ | (39,536 | ) | $ | — | $ | (39,536 | ) | $ | — |
| Credit facilities and financial liabilities, including current portion, net (including current liabilities associated with the vessel held for sale) (1) | $ | (1,935,300 | ) | $ | — | $ | (1,935,300 | ) | $ | — |
| Fair Value Measurements as at December 31, 2024 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Total | Level I | Level II | Level III | |||||||
| Cash and cash equivalents | $ | 270,166 | $ | 270,166 | $ | — | $ | — | ||
| Restricted cash | $ | 29,623 | $ | 29,623 | $ | — | $ | — | ||
| Other investments | $ | 12,289 | $ | 12,289 | $ | — | $ | — | ||
| Amounts due from related parties, short-term | $ | 36,620 | $ | — | $ | 36,620 | $ | — | ||
| Credit facilities and financial liabilities, including current portion, net (1) | $ | (1,827,384 | ) | $ | — | $ | (1,827,384 | ) | $ | — |
The fair value of the Company’s credit facilities, financial liabilities and current liabilities associated with the vessel held for sale is estimated based on currently available credit facilities, financial liabilities and current liabilities associated with the vessel held for sale with similar contract terms, interest rate and remaining maturities as well as taking into account the Company’s creditworthiness. As of June 30, 2025, the estimated fair value of the Company’s vessel measured at fair value on a non-recurring basis, is based on a third party valuation report and is categorized based upon the fair value hierarchy as follows:
F-17
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
| Fair Value Measurements as at June 30, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Total | Level I | Level II | Level III | |||||
| Vessel held for sale | $ | 30,000 | $ | — | $ | 30,000 | $ | — |
As of December 31, 2024, the estimated fair value of the Company’s vessels measured at fair value on a non-recurring basis, was based on the third party valuation reports and was categorized based upon the fair value hierarchy as follows:
| Fair Value Measurements as at December 31, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Total | Level I | Level II | Level III | |||||
| Vessels, net | $ | 21,250 | $ | — | $ | 21,250 | $ | — |
Derivative Instruments
In February 2025, Navios Partners entered into interest rate swaps with a commercial bank for a notional amount of $87,860 (the “Swap Transaction”) to hedge the interest rate of its existing credit facility. Under the terms of the Swap Transaction, Navios Partners pays a fixed rate of 412 bps per annum and receives a floating rate based on the three month average of the daily Compounded SOFR. No additional collateral is required under the terms of the Swap Transaction.
The Swap Transaction is designated as a Cash Flow Hedge to address the Company’s exposure to variability in expected future cash flows arising from interest rate fluctuations. In accordance with ASC 815, the Company completed the required formal hedge documentation at the inception of the hedging relationship. As a result, the Swap Transaction qualifies for hedge accounting. Changes in the fair value of the Swap Transaction that are determined to be effective are presented under the caption “Accumulated Other Comprehensive Loss” in the condensed Consolidated Balance Sheets and condensed Consolidated Statements of Changes in Partners’ Capital.
As of June 30, 2025, the fair value of the Swap Transaction amounted to $2,314 loss. The amounts of $579 and $1,735 are presented under the captions “Fair value of derivatives, current” and “Fair value of derivatives, non-current”, respectively, in the condensed Consolidated Balance Sheets.
The following table presents the terms of the Swap Transaction and the respective fair value amount as of June 30, 2025:
Derivative liabilities:
| Effective date | Termination date | Notional amount <br>on effective date | Fixed rate | Fair value <br>as at June 30, 2025 <br>(Level II) | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 27/1/2025 | 26/03/2029 | $ | 87,860 | 4.12 | % | $ | (2,314 | ) | ||
| Total fair value of derivatives, including current portion | $ | (2,314 | ) | |||||||
| Amount recognized in<br>other comprehensive loss | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||||
| Unrealized loss on cash flow hedges | $ | (543 | ) | $ | — | $ | (2,314 | ) | $ | — |
| Total other comprehensive loss | $ | (543 | ) | $ | — | $ | (2,314 | ) | $ | — |
As of June 30, 2025, the Company did not hold any interest rate swaps that do not qualify for hedge accounting.
NOTE 9 – REPURCHASES AND ISSUANCE OF UNITS
In July 2022, the Board of Directors of Navios Partners authorized a common unit repurchase program for up to $100,000 of the Company’s common units. Common unit repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of repurchases under the program will be determined by Navios Partners’ management based upon market conditions and financial and other considerations, including working capital and planned or anticipated growth opportunities. The program does not require any minimum repurchase or any specific number of common units and may be suspended or reinstated at any time in the Company’s discretion and without notice. The Board of Directors will review the program periodically. As of
F-18
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
June 30, 2025, the Company had repurchased 601,300 common units in 2025 and 1,091,255 common units since the commencement of the program, for a total cost of approximately $23,000 and $48,000, respectively. As of September 2, 2025, the Company had repurchased 1,251,730 common units since the commencement of the program, for a total cost of approximately $54,820.
NOTE 10 – INCOME TAXES
The Republic of the Marshall Islands does not impose a tax on international shipping income. Under the laws of the countries of the vessel-owning subsidiaries’ incorporation and/or redomiciliation and/or vessels’ registration, the vessel-owning subsidiaries are subject to registration and tonnage taxes, which have been included in vessel expenses in the accompanying condensed Consolidated Statements of Comprehensive Income.
In accordance with the currently applicable Greek law, foreign flagged vessels that are managed by Greek or foreign ship management companies having established an office in Greece on the basis of the applicable licensing regime are subject to tax liability towards the Greek state, which is calculated on the basis of the relevant vessel’s tonnage. A tax credit is recognized for tonnage tax (or similar tax) paid abroad, up to the amount of the tax due in Greece.
The owner, the manager and the bareboat charterer or the financial lessee (where applicable) are liable to pay the tax due to the Greek state. The payment of said tax exhausts the tax liability of the foreign ship owning company, the bareboat charterer, the financial lessee (as applicable) and the relevant manager against any tax, duty, charge or contribution payable on income from the exploitation of the foreign flagged vessel outside Greece.
The Company has elected to be treated and is currently treated as a corporation for U.S. federal income tax purposes. As such, the Company is not subject to section 1446 as that section only applies to entities that for U.S. federal income tax purposes are characterized as partnerships.
Pursuant to Section 883 of the Internal Revenue Code of the United States, U.S. source income from the international operation of ships is generally exempt from U.S. income tax if the company operating the ships meets certain incorporation and ownership requirements. Among other things, in order to qualify for this exemption, the company operating the ships must be incorporated in a country, which grants an equivalent exemption from income taxes to U.S. corporations. All the vessel-owning subsidiaries satisfy these initial criteria.
In addition, these companies must meet an ownership test. The management of Navios Partners believes that this ownership test was satisfied prior to the IPO by virtue of a special rule applicable to situations where the ship operating companies are beneficially owned by a publicly traded company. Although not free from doubt, management also believes that the ownership test will be satisfied based on the trading volume and ownership of Navios Partners’ units, but no assurance can be given that this will remain so in the future.
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Navios Partners is involved in various disputes and arbitration proceedings arising in the ordinary course of business. Provisions have been recognized in the financial statements for all such proceedings where Navios Partners believes that a liability may be probable, and for which the amounts are reasonably estimable, based upon facts known at the date the financial statements were prepared. Management believes the ultimate disposition of these matters will be immaterial individually and in the aggregate to Navios Partners’ financial position, results of operations or liquidity.
In December 2022, Navios Partners agreed to acquire two newbuilding Japanese MR2 Product Tanker vessels, from an unrelated third party, under bareboat contracts. Each vessel is being bareboat-in for ten years. Navios Partners has the option to acquire the vessels starting at the end of year four until the end of the charter period. Navios Partners agreed to pay in total $18,000, representing a deposit for the option to acquire the vessels after the end of the fourth year. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2025 and the first half of 2026. During the year ended December 31, 2023, the aggregate amount of $9,000 in relation to the deposit for the option to acquire the two vessels, was paid. As of June 30, 2025, the total amount of $12,447 including capitalized expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.
During the second quarter of 2023, Navios Partners agreed to acquire two newbuilding Japanese MR2 Product Tanker vessels, from an unrelated third party, under bareboat contracts. Each vessel is being bareboat-in for ten years. Navios Partners has the option to acquire the vessels starting at the end of year four until the end of the charter period. Navios Partners agreed to pay in total $18,000, representing a deposit for the option to acquire the vessels after the end of the
F-19
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
fourth year. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2026. During the year ended December 31, 2023, the aggregate amount of $9,000 in relation to the deposit for the option to acquire the two vessels, was paid. As of June 30, 2025, the total amount of $12,111, including capitalized expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.
In August 2023, Navios Partners agreed to acquire two newbuilding Japanese MR2 Product Tanker vessels, from an unrelated third party, under bareboat contracts. Each vessel is being bareboat-in for ten years. Navios Partners has the option to acquire the vessels starting at the end of year four until the end of the charter period. Navios Partners agreed to pay in total $20,000, representing a deposit for the option to acquire the vessels after the end of the fourth year. The vessels are expected to be delivered into Navios Partners’ fleet during the first half of 2027. During the year ended December 31, 2023, the aggregate amount of $10,000 in relation to the deposit for the option to acquire the two vessels, was paid. As of June 30, 2025, the total amount of $13,232, including capitalized expenses, is presented under the caption “Other long-term assets” in the condensed Consolidated Balance Sheets.
During the third quarter of 2023, Navios Partners agreed to acquire four 115,000 dwt Aframax/LR2 newbuilding scrubber-fitted tanker vessels, from an unrelated third party, for a purchase price of $61,250 each (plus $3,300 per vessel in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during 2026. Navios Partners agreed to pay in total $27,562, plus extras in four installments for each vessel and the remaining amount of $33,688 plus extras for each vessel will be paid upon delivery of each vessel. During the year ended December 31, 2024, the aggregate amount of $55,125 was paid. During the six month period ended June 30, 2025, the aggregate amount of $12,250 was paid. As of June 30, 2025, the total amount of $67,375 is presented under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets.
During the first quarter of 2024, Navios Partners agreed to acquire two 115,000 dwt Aframax/LR2 newbuilding scrubber-fitted tanker vessels from an unrelated third party, for a purchase price of $61,250 each (plus $3,300 per vessel in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during the first half of 2027. Navios Partners agreed to pay in total $27,562, plus extras in four installments for each vessel and the remaining amount of $33,688 plus extras for each vessel will be paid upon delivery of each vessel. During the year ended December 31, 2024, the aggregate amount of $18,375 was paid. As of June 30, 2025, the total amount of $18,375 is presented under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets.
During the second quarter of 2024, Navios Partners agreed to acquire two 7,900 TEU newbuilding methanol-ready and scrubber-fitted containerships from an unrelated third party, for a purchase price of $102,750 each (plus $3,250 per vessel in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during
2026
. Navios Partners agreed to pay in total $82,200, plus extras in four installments for each vessel and the remaining amount of $20,550 plus extras for each vessel will be paid upon delivery of each vessel. During the six month period ended June 30, 2025, the amount of $41,100 was paid. As of June 30, 2025, the total amount of $41,100 is presented under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets. During the second quarter of 2024, Navios Partners agreed to acquire four 115,000 dwt Aframax/LR2 newbuilding scrubber-fitted tanker vessels from an unrelated third party, for a purchase price of $62,250 (plus $3,300 per vessel in additional features) for each of the first two vessels and a purchase price of $63,000 (plus $3,300 per vessel in additional features) for each of the other two vessels. The vessels are expected to be delivered into Navios Partners’ fleet during 2027 and the first half of 2028. For the first two vessels, Navios Partners agreed to pay in total $34,238, plus extras in four installments for each vessel and the remaining amount of $28,012, plus extras for each vessel will be paid upon delivery of each vessel. For the other two vessels, Navios Partners agreed to pay in total $34,650, plus extras in four installments for each vessel and the remaining amount of $28,350, plus extras for each vessel will be paid upon delivery of each vessel. During the year ended December 31, 2024, the aggregate amount of $62,625 was paid. As of June 30, 2025, the total amount of $62,625 is presented under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets.
During the third quarter of 2024, Navios Partners agreed to acquire two 7,900 TEU newbuilding methanol-ready and scrubber-fitted containerships from an unrelated third party, for a purchase price of $102,750 each (plus $3,250 per vessel in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2026 and the first half of 2027. Navios Partners agreed to pay in total $82,200, plus extras in four installments for each vessel and the remaining amount of $20,550, plus extras for each vessel will be paid upon delivery of each vessel. During the six month period ended June 30, 2025, the amount of $41,100 was paid. As of June 30, 2025, the total amount of $41,100 is presented under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets.
F-20
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
During the second quarter of 2025, Navios Partners agreed to acquire two 115,000 dwt Aframax/LR2 newbuilding scrubber-fitted tanker vessels from an unrelated third party, for a purchase price of $63,200 each (plus $3,300 per vessel in additional features). The vessels are expected to be delivered into Navios Partners’ fleet during the first half of 2027. Navios Partners agreed to pay in total $31,600, plus extras in four installments for each vessel and the remaining amount of $31,600, plus extras for each vessel will be paid upon delivery of each vessel.
As of June 30, 2025, an amount of $35,314 related to capitalized costs is presented under the caption “Deposits for vessel acquisitions” in the condensed Consolidated Balance Sheets.
The Company’s future minimum lease commitments under the Company’s bareboat-in contracts for undelivered vessels for the next five 12-month periods ending June 30, are as follows:
| Period | Amount | |
|---|---|---|
| 2026 | $ | 3,310 |
| 2027 | 12,837 | |
| 2028 | 18,666 | |
| 2029 | 18,615 | |
| 2030 | 18,615 | |
| 2031 and thereafter | 114,252 | |
| Total | $ | 186,295 |
NOTE 12 – TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES
Vessel operating expenses: Since the closing of Navios Partners’ IPO in 2007, the Company entered into management agreements, as amended from time to time, with the Manager, pursuant to which the Manager had agreed to provide certain commercial and technical management services to the Company at fixed rates for these services until January 1, 2025. Costs associated with special surveys, drydockings and certain extraordinary items were reimbursed at cost at occurrence.
In August 2024, Navios Partners renewed its management agreements with the Manager commencing January 1, 2025, for a term of ten years, renewing annually (the “Master Management Agreement” and together with the management agreements the “Management Agreements”). At the same time, Navios Partners renewed for a term of ten years its Administrative Services Agreement (as defined herein and together with the Master Management Agreement the “Agreements”). The conflicts committee of the Board of Directors, consisting of independent directors, negotiated and approved the Agreements with the advice of independent legal and financial advisors.
The Master Management Agreement provides for technical and commercial management and related specialized services based on fee structure, including: (i) a technical management fee of $0.95 per day per owned vessel; (ii) a commercial management fee of 1.25% on revenues; (iii) an S&P fee of 1% on purchase or sales price; and (iv) fees for other specialized services (e.g. supervision of newbuilding vessels). Fixed fees will be adjusted annually for United States Consumer Price Index. The Master Management Agreement also allows for fixed incentive awards if equity returns exceed certain thresholds, as identified in such agreement, upon the unanimous consent of the Board of Directors of Navios Partners. The Master Management Agreement also provides for payment of a termination fee, which is equal to the net present value of the technical and commercial management fees charged for the most recent calendar year, as set forth in the latest audited annual financial statements for the number of years remaining for the Master Management Agreement, using a 6% discount rate.
For a detailed description of the Company’s fixed daily fees, as well as fees associated with specialized transhipper vessels in accordance with the Company’s management agreements, reflected in the comparative figures, refer to Note 17 – Transactions with related parties and affiliates, to the Company’s consolidated financial statements included in the Annual Report.
During the three and six month periods ended June 30, 2025, certain fees and costs related to vessels’ regulatory requirements, including ballast water treatment system installation, exhaust gas cleaning system installation and other improvements under the Company’s Management Agreements, amounted to $7,014 and $16,134, respectively, and are presented under the caption “Acquisition of/ additions to vessels” in the condensed Consolidated Statements of Cash Flows.
F-21
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
During the three and six month periods ended June 30, 2024, certain fees and costs related to vessels’ regulatory requirements, including ballast water treatment system installation, exhaust gas cleaning system installation and other improvements under the Company’s Management Agreements, amounted to $6,433 and $10,284, respectively, and are presented under the caption “Acquisition of/ additions to vessels” in the condensed Consolidated Statements of Cash Flows.
During the three and six month periods ended June 30, 2025, fixed management fees amounted to $12,802 and $25,532, respectively, and are presented under the caption “Vessel operating expenses” in the condensed Consolidated Statements of Comprehensive Income.
Total fixed daily fees for the three and six month periods ended June 30, 2024, amounted to $85,271 and $170,193, respectively, and are presented under the caption “Vessel operating expenses” in the condensed Consolidated Statements of Comprehensive Income.
During the three and six month periods ended June 30, 2025, commercial management fee on revenues amounted to $4,023 and $7,871, respectively, and is presented under the caption “Time charter and voyage expenses” in the condensed Consolidated Statements of Comprehensive Income.
During the three and six month periods ended June 30, 2025, fee on sales amounted to $485 and $647, respectively, and is presented under the caption “Gain/ (loss) on sale of vessels, net” in the condensed Consolidated Statements of Comprehensive Income.
During the three and six month periods ended June 30, 2025, fee on purchases amounted to $1,330 for each period and is presented under the caption “Deposits for acquisition/ option to acquire vessel” in the condensed Consolidated Statements of Cash Flows.
During the three and six month periods ended June 30, 2025, fees for supervision and delivery of newbuilding vessels initially presented under the captions “Deposits for vessel acquisitions” and “Other long-term assets” in the condensed Consolidated Balance Sheets amounted to $1,845 and $4,331, respectively.
During the three and six month periods ended June 30, 2024, additional remuneration in accordance with the Company’s management agreements amounted to $1,133 and $1,524, respectively, related to superintendent attendances and claims preparation. Of these amounts, $534 and $722 for the three and six month periods ended June 30, 2024, respectively, are presented under the caption “Vessel operating expenses” in the condensed Consolidated Statements of Comprehensive Income and $599 and $802, respectively, are presented under the captions “Vessels, net”, “Deferred drydock and special survey costs, net” and “Prepaid expenses and other current assets” in the condensed Consolidated Balance Sheets.
During the three and six month periods ended June 30, 2024, certain extraordinary crewing fees and costs amounted to $81 and $215, respectively, and are presented under the caption “Vessel operating expenses” in the condensed Consolidated Statements of Comprehensive Income.
General and administrative expenses: The Manager also provides administrative services to Navios Partners, which include bookkeeping, audit and accounting services, legal and insurance services, administrative and clerical services, banking and financial services, advisory services, client and investor relations and other. The Manager is reimbursed for reasonable allocable general and administrative costs and expenses incurred in connection with the provision of these services. In August 2019, Navios Partners extended the duration of its agreement with the Manager until January 1, 2025. The agreement also provided for payment of a termination fee, equal to the fees charged for the full calendar year preceding the termination date in the event the agreement is terminated on or before its term.
In August 2024, Navios Partners renewed its administrative services agreement commencing January 1, 2025, for a term of ten years, renewing annually (the “Administrative Services Agreement”). The Administrative Services Agreement provides for reimbursement of allocable general and administrative costs. The Administrative Services Agreement also provides for payment of a termination fee, which is equal to the costs charged for the most recent calendar year, as set forth in the latest audited annual financial statements.
Total general and administrative expenses charged by the Manager for the three and six month periods ended June 30, 2025 amounted to $18,454 and $34,790, respectively. Total general and administrative expenses charged by the Manager for the three and six month periods ended June 30, 2024 amounted to $15,770 and $31,549, respectively.
F-22
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
During the three and six month periods ended June 30, 2024, allocable general and administrative costs initially presented under the captions “Deposits for vessel acquisitions” and “Other long-term assets” in the condensed Consolidated Balance Sheets amounted to $2,433 and $4,882, respectively.
Balance due (to)/ from related parties: Balance due (to)/ from Manager, short-term as of June 30, 2025 and December 31, 2024 amounted to $(39,536) and $34,089, respectively. The balances mainly consisted of administrative expenses, drydocking, extraordinary fees and costs related to regulatory requirements including ballast water treatment system, other expenses, as well as vessel operating expenses, in accordance with the Management Agreements and are presented under the captions “Amounts due to related parties” and “Amounts due from related parties” in the condensed Consolidated Balance Sheets.
In October 2023, Navios Partners entered into a time charter agreement with a subsidiary of its affiliate NSAL for the Navios Vega, a 2009-built transhipper vessel. The vessel was delivered during the first quarter of 2024. The term of this time charter agreement is approximately five years, at an originally agreed rate of $25.8 per day. In accordance with an addendum to the time charter agreement, dated in March 2025, the daily rate was amended as follows: (a) $14.0 per day, effective from January 1, 2025, through December 31, 2026; (b) $38.8 per day effective from January 1, 2027, through December 31, 2028; and (c) $25.8 per day effective from January 1, 2029, until termination. This transaction was negotiated with, and unanimously approved by, the conflicts committee of Navios Partners. For the three and six month periods ended June 30, 2025, the amounts of $3,533 and $4,808, respectively, are presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Comprehensive Income. For the three and six month periods ended June 30, 2024, the amounts of $2,334 and $3,313, respectively, are presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Comprehensive Income. As of June 30, 2025 and December 31, 2024, balance due from the above mentioned related party company amounted to $1,662 and $2,531, respectively, and is presented under the caption “Amounts due from related parties” in the condensed Consolidated Balance Sheets. The amount due from the above mentioned related party company as of June 30, 2025 was received in July 2025.
Others: Navios Partners has entered into an omnibus agreement with Navios Holdings (the “Partners Omnibus Agreement”) in connection with the closing of Navios Partners’ IPO governing, among other things, when Navios Holdings and Navios Partners may compete against each other as well as rights of first offer on certain dry bulk carriers. Pursuant to the Partners Omnibus Agreement, Navios Holdings generally agreed not to acquire or own Panamax or Capesize dry bulk carriers under time charters of three or more years without consent as required under such agreement.
As of June 30, 2025, the Company had initiated a process to sell the Navios Vega to NSAL. The Company entered into a definitive agreement with NSAL in July 2025. The sale price of the vessel amounted to $30,000. The transaction was negotiated and approved by the Conflicts Committee of Navios Partners. The sale was completed on July 30, 2025.
General partner: Olympos Maritime Ltd., an entity affiliated to the Company’s Chairwoman and Chief Executive Officer, Angeliki Frangou, is the holder of Navios Partners’ general partner interest.
NOTE 13 – CASH DISTRIBUTIONS AND EARNINGS PER UNIT
The amount of distributions paid by Navios Partners and the decision to make any distribution is determined by the Company’s Board of Directors and will depend on, among other things, Navios Partners’ cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable. There is no guarantee that the Company will pay the quarterly distribution on the common units in any quarter. The Company is prohibited from making any distributions to unitholders if it would cause an event of default, or an event of default exists, under its existing credit facilities.
There are incentive distribution rights held by Navios GP L.L.C., which are analyzed as follows:
F-23
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
| Total Quarterly Distribution Target Amount | Incentive Distribution Right Holder | General Partner | |||||||
| Minimum Quarterly Distribution | up to 5.25 | 98 | % | — | 2 | % | |||
| First Target Distribution | up to 6.0375 | 98 | % | — | 2 | % | |||
| Second Target Distribution | above 6.0375 up to 6.5625 | 85 | % | 13 | % | 2 | % | ||
| Third Target Distribution | above 6.5625 up to 7.875 | 75 | % | 23 | % | 2 | % | ||
| Thereafter | above 7.875 | 50 | % | 48 | % | 2 | % |
All values are in US Dollars.
The first 98% of the quarterly distribution is paid to all common unitholders. The incentive distributions rights (held by Navios GP L.L.C.) apply only after a minimum quarterly distribution of $6.0375 per unit.
The authorized quarterly cash distributions for all quarters during the six month periods ended June 30, 2025 and 2024, are presented below:
| Date | Authorized<br>Quarterly Cash<br>Distribution for the<br>three months ended | Date of record<br>of Common and<br>General Partnership<br>unit Unitholders | Payment of<br>Distribution | / Unit | Amount of<br>the declared<br>distribution | |
|---|---|---|---|---|---|---|
| February 2024 | December 31, 2023 | February 12, 2024 | February 14, 2024 | $ | 1,540 | |
| April 2024 | March 31, 2024 | May 10, 2024 | May 14, 2024 | $ | 1,540 | |
| January 2025 | December 31, 2024 | February 10, 2025 | February 13, 2025 | $ | 1,511 | |
| April 2025 | March 31, 2025 | May 9, 2025 | May 14, 2025 | $ | 1,493 | |
| July 2025 | June 30, 2025 | August 11, 2025 | August 14, 2025 | $ | 1,481 |
All values are in US Dollars.
Navios Partners calculates earnings/ (losses) per unit by allocating reported net income/ (loss) for each period to each class of units based on the distribution waterfall for available cash specified in Navios Partners’ partnership agreement, net of the unallocated earnings/ (losses). Basic earnings/ (losses) per common unit is determined by dividing net income by the weighted average number of common units outstanding during the period. Diluted earnings per unit is calculated in the same manner as basic earnings per unit, except that the weighted average number of outstanding units increased to include the dilutive effect of outstanding unit options or phantom units. Net earnings/ (loss) per unit undistributed is determined by taking the distributions in excess of net income/ (loss) and allocating between common units and general partnership units on a 98%-2% basis. There were no options or phantom units outstanding during each of the six month periods ended June 30, 2025 and 2024.
The calculations of the basic and diluted earnings per unit are presented below.
| Three Month Period Ended June 30, 2025 | Three Month Period Ended June 30, 2024 | Six Month Period Ended June 30, 2025 | Six Month Period Ended June 30, 2024 | |||||
|---|---|---|---|---|---|---|---|---|
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||
| Net income | $ | 69,947 | $ | 101,469 | $ | 111,674 | $ | 174,830 |
| Income attributable to: | ||||||||
| Common unitholders | $ | 68,478 | $ | 99,439 | $ | 109,329 | $ | 171,333 |
| Weighted average units outstanding basic | ||||||||
| Common unitholders | 29,233,736 | 30,162,905 | 29,404,831 | 30,173,646 | ||||
| Earnings per unit basic: | ||||||||
| Common unitholders | $ | 2.34 | $ | 3.30 | $ | 3.72 | $ | 5.68 |
| Weighted average units outstanding diluted | ||||||||
| Common unitholders | 29,233,736 | 30,162,905 | 29,404,831 | 30,173,646 | ||||
| Earnings per unit diluted: | ||||||||
| Common unitholders | $ | 2.34 | $ | 3.30 | $ | 3.72 | $ | 5.68 |
| Earnings per unit distributed basic: | ||||||||
| Common unitholders | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.10 |
| Earnings per unit distributed diluted: | ||||||||
| Common unitholders | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.10 |
F-24
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
No potential common units are included in the calculation of earnings per unit diluted for each of the six month periods ended June 30, 2025 and 2024.
NOTE 14 – LEASES
Time charter out contracts and pooling arrangements
The Company’s contract revenues from time chartering, bareboat chartering and pooling arrangements are governed by ASC 842.
Operating Leases
A discussion of the Company’s operating leases can be found in Note 20 – Leases to the Company’s consolidated financial statements included in the Annual Report.
Based on management estimates and market conditions, the lease term of the leases is being assessed at each balance sheet date. At lease commencement, the Company determines a discount rate to calculate the present value of the lease payments so that it can determine lease classification and measure the lease liability. In determining the discount rate to be used at lease commencement, the Company used its incremental borrowing rate as there was no implicit rate included in charter-in contracts that can be readily determinable. The incremental borrowing rate is the rate that reflects the interest a lessee would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment. The Company then applies the respective incremental borrowing rate based on the remaining lease term of the specific lease. Navios Partners’ incremental borrowing rates were approximately 7% for the Navios Libra and the Nave Celeste, 5% for the Navios Amitie and the Navios Star, 6% for the Nave Allegro and the Nave Tempo, and 4% for the Nave Electron.
As of June 30, 2025 and December 31, 2024, the outstanding balance of the operating lease liability amounted to $228,098 and $240,602, respectively, and is presented under the captions “Operating lease liabilities, current portion” and “Operating lease liabilities, net” in the condensed Consolidated Balance Sheets. Right-of-use assets amounted to $231,675 and $243,806 as at June 30, 2025 and December 31, 2024, respectively, and are presented under the caption “Operating lease assets” in the condensed Consolidated Balance Sheets.
The Company recognizes the lease payments for its operating leases as charter hire expenses on a straight-line basis over the lease term. Lease expense incurred and paid for the three and six month periods ended June 30, 2025 amounted to $9,741 and $19,374, respectively. Lease expense incurred and paid for the three and six month periods ended June 30, 2024 amounted to $10,936 and $22,982, respectively. Lease expense is presented under the caption “Time charter and voyage expenses” in the condensed Consolidated Statements of Comprehensive Income.
For the three and six month periods ended June 30, 2025, the sublease income (net of commissions, if any) for vessels where the Company is a lessee amounted to $17,169 and $33,284, respectively. For the three and six month periods ended June 30, 2024, the sublease income (net of commissions, if any) for vessels where the Company is a lessee amounted to $18,996 and $35,829, respectively. Sublease income is presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Comprehensive Income.
As of June 30, 2025, the weighted average useful life of the remaining operating lease terms was
7.8
years. The table below provides the total amount of lease payments for the next five 12-month periods ending June 30 on an undiscounted basis on the Company’s chartered-in contracts as of June 30, 2025:
| Period | Amount | |
|---|---|---|
| 2026 | $ | 38,340 |
| 2027 | 37,891 | |
| 2028 | 37,312 | |
| 2029 | 36,632 | |
| 2030 | 34,769 | |
| 2031 and thereafter | 96,491 | |
| Total | $ | 281,435 |
| Operating lease liabilities, including current portion | $ | 228,098 |
| Discount based on incremental borrowing rate | $ | 53,337 |
F-25
NAVIOS MARITIME PARTNERS L.P.
UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
Finance Leases
For a detailed description of the finance lease liabilities and right-of-use assets for vessels under finance leases, refer to Note 10 – Borrowings and Note 6 – Vessels, net, respectively, to the Company’s consolidated financial statements included in the Annual Report.
For the three and six month periods ended June 30, 2025, the sublease income (net of commissions, if any) for vessels where the Company is a lessee amounted to $16,777 and $32,313, respectively. For the three and six month periods ended June 30, 2024, the sublease income (net of commissions, if any) for vessels where the Company is a lessee amounted to $23,181 and $46,140, respectively. Sublease income is presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Comprehensive Income.
As of June 30, 2025, the weighted average useful life of the remaining finance lease terms was
10.1
years. The table below provides the total amount of lease payments and options to acquire vessels for the next five 12-month periods ending June 30 on an undiscounted basis under the Company’s finance leases as of June 30, 2025:
| Period | Amount | |
|---|---|---|
| 2026 | $ | 36,753 |
| 2027 | 36,307 | |
| 2028 | 35,997 | |
| 2029 | 35,557 | |
| 2030 | 75,707 | |
| 2031 and thereafter | 235,839 | |
| Total | $ | 456,160 |
| Finance lease liabilities, including current portion (see Note 6 – Borrowings) | $ | 317,447 |
| Discount based on incremental borrowing rate | $ | 138,713 |
Bareboat charter-out contracts
Subsequently to the bareboat charter-in agreement, the Company entered into bareboat charter-out agreements for a firm charter period of ten years for two VLCCs and an extra optional period of five years, for both vessels, and for a firm period of up to two-years, extended in direct continuation of previous bareboat charter-out agreement for an additional period of five years for a third VLCC. The Company performed also an assessment of the lease classification under the ASC 842 and concluded that the agreements are operating leases. On July 4, 2025, Navios Partners terminated the bareboat charter-out agreements for the first two VLCCs.
The Company recognizes in relation to the operating leases for the bareboat charter-out agreements the bareboat charter-out hire income in the condensed Consolidated Statements of Comprehensive Income on a straight-line basis. For the three and six month periods ended June 30, 2025, the charter hire income (net of commissions, if any) amounted to $8,970 and $17,235, respectively. For the three and six month periods ended June 30, 2024, the charter hire income (net of commissions, if any) amounted to $8,465 and $16,530, respectively. Charter hire income (net of commissions, if any) is presented under the caption “Time charter and voyage revenues” in the condensed Consolidated Statements of Comprehensive Income.
NOTE 15 – SUBSEQUENT EVENTS
In August 2025, Navios Partners agreed to sell a
2005
-built Panamax of 75,397 dwt and a
2007
-built MR2 Product Tanker vessel of 50,922 dwt, to unrelated third parties, for an aggregate gross sale price of $22,550. The sales are expected to be completed during the second half of 2025. The aggregate gain on sale of the above vessels and the vessels agreed to be sold (see Note 4 – Vessels, net), is expected to be approximately $20,891. On September 8, 2025, Navios Partners agreed to acquire four 8,850 TEU newbuilding methanol-ready and scrubber-fitted Containerships from an unrelated third party, for a purchase price of $115,095 each. The vessels have been chartered-out at $44.1 net per day for a period of
5.2
years, with charterer’s option for one additional year at $41.6 net per day, and are expected to be delivered into Navios Partners’ fleet during the second half of 2027 and the first quarter of 2028. The closing of the transaction is subject to completion of customary documentation.
F-26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NAVIOS MARITIME PARTNERS L.P. | |
|---|---|
| By: | /s/ Angeliki Frangou |
| Angeliki Frangou | |
| Chief Executive Officer |
Date: September 8, 2025
EX-99.1
Exhibit 99.1
Dated 17 June 2025
BUFF SHIPPING CORPORATION
CHERNAVA MARINE CORP.
SOLANGE SHIPPING LTD.
OPAL SHIPPING CORPORATION
EMERY SHIPPING CORPORATION
DUCALE MARINE INC. as joint and several Borrowers
and
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
and
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Mandated Lead Arranger
and
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Agent and Security Trustee
LOAN AGREEMENT
relating to a term loan facility of up to $62,500,000 secured on two container vessels and four bulk carrier vessels
Index
Clause Page
| 1 | Interpretation | 2 |
|---|---|---|
| 2 | Loan Facility | 24 |
| 3 | Position of the Lenders | 25 |
| 4 | Drawdown | 26 |
| 5 | Interest | 27 |
| 6 | Interest Periods | 28 |
| 7 | Changes to the Calculation of Interest | 29 |
| 8 | Repayment and Prepayment | 31 |
| 9 | Conditions Precedent | 33 |
| 10 | Representations and Warranties | 34 |
| 11 | General Undertakings | 37 |
| 12 | Corporate Undertakings | 44 |
| 13 | Insurance | 45 |
| 14 | Ship covenants | 51 |
| 15 | Security Cover | 56 |
| 16 | Payments and Calculations | 58 |
| 17 | Application of Earnings | 61 |
| 18 | Application of Receipts | 63 |
| 19 | Events of Default | 64 |
| 20 | Fees and Expenses | 69 |
| 21 | Indemnities | 71 |
| 22 | No Set-off or Tax Deduction | 73 |
| 23 | Illegality, etc | 75 |
| 24 | Increased Costs | 76 |
| 25 | Set-off | 77 |
| 26 | Transfers and Changes in Lending Offices | 78 |
| 27 | Variations and Waivers by majority lenders | 82 |
| 28 | Notices | 85 |
| 29 | Supplemental | 87 |
| 30 | Confidentiality | 89 |
| 31 | Law and Jurisdiction | 93 |
| 32 | Bail-In | 94 |
| 33 | Joint and Several Liability | 94 |
Schedules
| Schedule 1 Lenders and Commitments | 96 |
|---|---|
| Schedule 2 Requests | 97 |
| Part A Drawdown Notice | 97 |
| Part B Selection Notice | 99 |
| Schedule 3 Condition Precedent Documents | 100 |
| Part A Conditions Precedent to Loan Agreement | 100 |
| Part B Conditions Precedent to Drawdown | 102 |
| Schedule 4 Transfer Certificate | 104 |
| Schedule 5 Timetables | 108 |
| Schedule 6 Vessel Details | 109 |
| Schedule 7 Account Details | 111 |
EUROPE/78820855v4
Execution
| Execution Pages | 112 |
|---|
EUROPE/78820855v4
THIS AGREEMENT is made on ____ June 2025
Parties
(1) BUFF SHIPPING CORPORATION, CHERNAVA MARINE CORP., SOLANGE SHIPPING LTD., OPAL SHIPPING CORPORATION, EMERY SHIPPING CORPORATION and DUCALE MARINE INC., each a corporation incorporated and existing under the laws of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as joint and several Borrowers;
(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 (Lenders and Commitments), as Lenders;
(3) CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre, as Mandated Lead Arranger; and
(4) CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre, as Agent and Security Trustee.
Background
The Lenders have agreed to make available to the Borrowers, a secured term loan facility, in an aggregate amount not exceeding the lower of (i) $ 62,500,000 and (ii) 40 per cent of the aggregate Initial Market Value of the Ships for the purpose of financing or refinancing the relevant Existing Indebtedness and providing working capital to the Group, secured on the Ships.
Operative Provisions
EUROPE/78820855v4
1 Interpretation
1.1 Definitions
Subject to Clause 1.5 (General Interpretation), in this Agreement:
"Account" means each of the Earnings Accounts and the Retention Account and, in the plural, means all of them;
"Account Bank" means Crédit Agricole Corporate and Investment Bank, a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre or any other bank or other financial institution acceptable to the Agent and the Borrowers;
"Account Pledge" means, in relation to each Account, a deed of pledge of that Account in such form as the Lenders may approve or require, and in the plural means all of them;
"Agency and Trust Deed" means the agency and trust deed dated the same date as this Agreement and made between the same parties;
"Agent" means Crédit Agricole Corporate and Investment Bank, a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre or any successor of it appointed under clause 5 (appointment of new servicing bank) of the Agency and Trust Deed;
"Annex VI" means Annex VI of the Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto;
"Applicable Person" has the meaning given in Clause 29.4 (Waiver of Banking Secrecy);
"Approved Broker" means any of Arrow Sale & Purchase (UK) Limited, Barry Rogliano Salles, Braemar ACM Valuations Limited, Clarkson Valuations Limited, E.A. Gibson Shipbrokers Ltd., Fearnleys AS, Simpson Spence & Young Ltd., Howe Robinson Partners, MB Shipbrokers and Affinity (Shipping) LLP (to include, in each case, their successors or assigns and such subsidiary or other company in the same corporate group through which valuations are commonly issued by each of these brokers), or such other first-class independent broker as the Borrowers and the Agent (acting on the instructions of the Majority Lenders) may agree in writing from time to time;
"Approved Flag" means, in relation to a Ship, the flag of the Marshall Islands, the flag of Liberia, the flag of Panama, the flag of Malta, the flag of Cyprus or such other flag as the Agent (acting on the instructions of the Majority Lenders) may approve as the flag on which that Ship is or, as the case may be, shall be registered;
"Approved Flag State" means, in relation to a Ship, the Republic of the Marshall Islands, the Republic of Liberia, the Republic of Panama, the Republic of Malta, the Republic of Cyprus or any other country in which the Agent (acting on the instructions of the Majority Lenders) may approve that that Ship is or, as the case may be, shall be registered;
2 EUROPE/78820855v4
"Approved Manager" means:
(a) in respect of the management of each Ship, Navios Shipmanagement Inc., a corporation domesticated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 or any other company or sub-manager which the Agent may approve from time to time as the manager of any Ship (such approval shall be considered granted in respect of an affiliate or subsidiary of Navios Shipmanagement Holdings);
(b) in respect of the technical management of Ship A and Ship B, Navios Containers Management Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
(c) in respect of the technical management of Ship C, Ship E and Ship F, Navios Corporation Management Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960; and
(d) in respect of the technical management of Ship D, Navios Technical Management S.A., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Approved Manager's Undertaking" means, in relation to a Ship, a letter of undertaking including, without limitation, an assignment of an Approved Manager's rights, title and interest in the Insurances of the relevant Ship executed or to be executed by an Approved Manager in favour of the Agent and the Security Trustee agreeing certain matters in relation to an Approved Manager serving as the manager of that Ship and subordinating the rights of an Approved Manager against that Ship and that Borrower to the rights of the Creditor Parties under the Finance Documents, in such form as the Agent and the Security Trustee, with the authorisation of the Lenders, may approve or require and, in the plural, means all of them;
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms;
"Availability Period" means the period commencing on the date of this Agreement and ending on:
(a) 31 July 2025 (or such later date as the Agent may, acting on the instructions of the Lenders, agree with the Borrowers); or
(b) if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;
"Bail-In Action" means the exercise of any Write-down and Conversion Powers;
"Bail-In Legislation" means:
(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
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(b) in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and
(c) in relation to the United Kingdom, the UK Bail-In Legislation;
"Break Costs" means the amount (if any) by which:
(a) the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or an Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period
exceeds
(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
"Basel III" means:
(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
(c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";
"Borrower" means each of Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F and, in the plural, means all of them;
"Borrower A" means Buff Shipping Corporation, a corporation incorporated and existing under the laws of the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Borrower B" means Chernava Marine Corp., a corporation incorporated and existing under the laws of the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Borrower C" means Solange Shipping Ltd., a corporation incorporated and existing under the laws of the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
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"Borrower D" means Opal Shipping Corporation, a corporation incorporated and existing under the laws of the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Borrower E" means Emery Shipping Corporation a corporation incorporated and existing under the laws of the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Borrower F" means Ducale Marine Inc., a corporation incorporated and existing under the laws of the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Paris, Athens and New York and (in relation to the fixing of an interest rate) a day which is a US Government Securities Business Day;
"Change of Control" means if:
(a) the Designated Unitholder ceases to be the ultimate beneficial owner(s) of, or to have ultimate control of, the voting rights attaching to more than 5 per cent. of all the units (including for the avoidance of doubt both general partner units and common units) in the Corporate Guarantor; or
(b) the Designated Unitholder ceases to be the owner of, or to have ultimate control of, the voting rights attaching to all the issued shares in the general partner of the Corporate Guarantor, which is currently Olympos Maritime Ltd; or
(c) Mrs. Angeliki Frangou ceases to act as chairwoman or chief executive officer of the Corporate Guarantor and/or Olympos Maritime Ltd ceases to be the general partner of the Corporate Guarantor; or
(d) any person or group of persons (other than the Designated Unitholder) acting in concert, becomes the holder, directly or indirectly, of 50% or more of the beneficially issued units of the Corporate Guarantor entitled to vote for members of the board of directors or equivalent governing body of the Corporate Guarantor on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right),
and for the purpose of paragraph (d) above "acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate, through the acquisition, directly or indirectly, of units in the Corporate Guarantor by any of them, either directly or indirectly, to obtain or consolidate the holding of beneficially owned units of the Corporate Guarantor;
"Charterparty" means in relation to a Ship, any charterparty in respect of that Ship (including, without limitation, an Existing Charter) of a duration exceeding or capable of exceeding 12 months, made on terms and with a charterer acceptable in all respects to the Lenders;
"Charterparty Assignment" means in relation to a Ship, the deed of assignment of any Charterparty relating to that Ship in favour of the Security Trustee, in such form as the Lenders may approve or require;
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"Classification Society" means a member of the IACS or any other classification society approved in writing by the Agent acting with the authorisation of the Majority Lenders (such approval not to be unreasonably withheld);
"Code" means the United States Internal Revenue Code of 1986;
"Commitment" means, in relation to a Lender, the amount set opposite its name in Schedule 1 (Lenders and Commitments) or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments" means the aggregate of the Commitments of all the Lenders);
"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Borrowers and the Agent;
"Confidential Information" means all information relating to the Borrowers, any Security Party, the Group, the Finance Documents or the Loan of which a Creditor Party becomes aware in its capacity as, or for the purpose of becoming, a Creditor Party or which is received by a Creditor Party in relation to, or for the purpose of becoming a Creditor Party under, the Finance Documents or the Loan from either:
(a) any member of the Group or any of its advisers; or
(b) another Creditor Party, if the information was obtained by that Creditor Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information, but excludes:
(i) information that:
(A) is or becomes public information other than as a direct or indirect result of any breach by that Creditor Party of Clause 30 (Confidentiality); or
(B) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(C) is known by that Creditor Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Creditor Party after that date, from a source which is, as far as that Creditor Party is aware, unconnected with the Group and which, in either case, as far as that Creditor Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(ii) any Funding Rate;
"Contractual Currency" has the meaning given in Clause 21.4 (Currency indemnity);
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"Contribution" means, in relation to a Lender, the part of the Loan which is owing to that Lender;
"Corporate Guarantee" means the guarantee given or to be given by the Corporate Guarantor in favour of the Security Trustee, guaranteeing the obligations of the Borrowers under this Agreement and the other Finance Documents, in such form as the Lenders may approve or require;
"Corporate Guarantor" means Navios Maritime Partners L.P., a limited partnership formed and existing under the laws of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, listed on the New York Stock Exchange;
"CRD IV" means Directive 2013/36/EU of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2003/87/EC and repealing Directive 2006/48/EC and 2006/29/EC;
"Creditor Party" means the Agent, the Security Trustee or any Lender, whether as at the date of this Agreement or at any later time;
"CRR" means Regulation (EU) No. 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;
"Designated Unitholder" means Mrs. Angeliki Frangou, her direct descendants and their lineal descendants, either directly or indirectly, (through entities owned and controlled by her or any of their affiliates or trusts or foundations established or that may be established of which she is a beneficiary or her direct descendants or their lineal descendants are a beneficiary) being the ultimate beneficial owner(s) of, or having ultimate control of, the voting rights attaching to more than 5 per cent. of all the units (including for the avoidance of doubt both general partner units and common units) in the Corporate Guarantor and in the plural means all of them;
"Dollars" and "$" means the lawful currency for the time being of the United States of America;
"Drawdown Date" means the date requested by the Borrowers for the Loan to be made, or (as the context requires) the date on which the Loan is actually made;
"Drawdown Notice" means a notice in the form set out in Part A of Schedule 2 (Requests) (or in any other form which the Agent approves or reasonably requires);
"Earnings" means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship including (but not limited to):
(a) all freight, hire and passage moneys, compensation payable to that Borrower or the Security Trustee in the event of requisition of the Ship owned by that Borrower 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 that Ship;
(b) all moneys which are at any time payable under any Insurances in respect of loss of earnings; and
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(c) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship;
"Earnings Account" means in relation to a Ship, an account in the name of the Borrower owning that Ship with the Account Bank as per Schedule 7 (Account Details), or any other account (with that or another office of the Account Bank) which replaces that Earnings Account and is designated by the Agent in writing as the Earnings Account in respect of that Ship for the purposes of this Agreement, and, in the plural, means all of them;
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway;
"Environmental Claim" means:
(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
(b) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
and "claim" means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
"Environmental Incident" means in relation to a Ship:
(a) any release of Environmentally Sensitive Material from that Ship; or
(b) any incident in which Environmentally Sensitive Material is released from a vessel other than that Ship and which involves a collision between that Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which that Ship is actually or potentially liable to be arrested, attached, detained and/or injuncted and/or that Ship and/or the Borrower which is the owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material is released otherwise than from that Ship and in connection with which that Ship is actually or potentially liable to be arrested and/or where the Borrower which is the owner thereof and/or any operator or manager of that Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;
"Environmentally Sensitive Material" means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
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"EU Bail-In Legislation Schedule" means the document described as such and published by the LMA from time to time;
"Event of Default" means any of the events or circumstances described in Clause 19.1 (Events of Default);
"Existing Charter" shall have the meaning given to that term in Schedule 6 (Vessel Details);
"Existing Charterer" shall have the meaning given to that term in Schedule 6 (Vessel Details);
"Existing Indebtedness" means:
(a) in relation to Existing Loan Agreement A, at any date, the outstanding Financial Indebtedness of Borrower A, on that date under Existing Loan Agreement A;
(b) in relation to Existing Loan Agreement B, at any date, the outstanding Financial Indebtedness of Borrower B, Borrower D and Borrower F on that date under Existing Loan Agreement B; and
(c) in relation to Existing Loan Agreement C, at any date, the outstanding Financial Indebtedness of Borrower C and Borrower E on that date under Existing Loan Agreement B;
"Existing Loan Agreement" means Existing Loan Agreement A or Existing Loan Agreement B or Existing Loan Agreement C and, in the plural, means all of them;
"Existing Loan Agreement A" means the loan agreement dated 12 June 2023 (as amended, supplemented and/or restated from time to time) and made between, amongst others, (i) Borrower A, as borrower, (ii) the banks and financial institutions listed in schedule 1 thereto as lenders and (iii) BNP PARIBAS as bookrunner, mandated lead arranger, agent and security trustee relating to a term loan facility of (originally) $40,000,000 secured on, amongst others, Ship A;
"Existing Loan Agreement B" means the loan agreement dated 21 June 2023 (as amended and supplemented from time to time) and made between, amongst others, (i) Borrower B, Borrower D and Borrower F, as joint and several borrowers, (ii) the banks and financial institutions listed in schedule 1 thereto as lenders, (iii) BNP PARIBAS as bookrunner and co-ordinator, (iv) BNP PARIBAS and Crédit Agricole Corporate and Investment Bank as mandated lead arrangers, and (v) BNP PARIBAS as agent and security trustee relating to a term loan facility of (originally) $107,600,000 secured on, among others, Ship B, Ship D and Ship F;
"Existing Loan Agreement C" means the loan agreement dated 28 June 2023 (as amended and supplemented from time to time) and made between, amongst others, (i) Borrower C and Borrower E, as joint and several borrowers, (ii) the banks and financial institutions listed in schedule 1 thereto as lenders and (iii) Crédit Agricole Corporate and Investment Bank as mandated lead arranger, agent, account bank and security trustee relating to a term loan facility of (originally) $62,400,000 secured on, among others, Ship C and Ship E;
"Existing Security Interest" means any Security Interest created to secure any Existing Indebtedness;
"Facility" means the term loan facility made available under this Agreement as described in Clause 2 (Loan Facility);
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"FATCA" means:
(a) sections 1471 to 1474 of the Code or any associated regulations;
(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
"FATCA Deduction" means a deduction or withholding from a payment under any Finance Document required by or under FATCA;
"FATCA Exempt Party" means a party to a Finance Document 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 Code which, if any Creditor Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction;
"Fee Letter" means any letter or letters dated on or about the date of this Agreement setting out any of the fees payable by the Borrowers pursuant to this Agreement;
"Final Maturity Date" means the earlier of (i) the date falling 60 months from the Drawdown Date and (ii) 31 July 2030;
"Finance Documents" means:
(a) this Agreement;
(b) the Agency and Trust Deed;
(c) any Fee Letter;
(d) the Corporate Guarantee;
(e) the General Assignments;
(f) the Mortgages;
(g) the Account Pledges;
(h) the Charterparty Assignments;
(i) the Approved Manager's Undertakings;
(j) the Shares Security Deeds; and
(k) any other document (whether creating a Security Interest or not) which is executed at any time by a Borrower, the Corporate Guarantor, a Shareholder, an Approved Manager or any other person as security for, or to establish any form of subordination
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or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the other documents referred to in this definition;
"Financial Indebtedness" means, in relation to a person (the "debtor"), a liability of the debtor:
(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
(b) under any loan stock, bond, note or other security issued by the debtor;
(c) under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person;
"Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 7.3 (Cost of funds);
"General Assignment" means, in relation to a Ship, a general assignment of the Earnings, the Insurances and any Requisition Compensation, in such form as the Lenders may approve or require and, in the plural, means all of them;
"Group" means together, the Corporate Guarantor and its wholly-owned subsidiaries (direct or indirect) including, but not limited to, the Borrowers and the Shareholders from time to time during the Security Period and "member of the Group" shall be construed accordingly;
"Historic Term SOFR" means, in relation to the Loan or any part of the Loan, the most recent applicable Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan and which is as of a day which is no more than three US Government Securities Business Days before the Quotation Day;
"IACS" means the International Association of Classification Societies;
"Initial Market Value" means, in relation to a Ship, the Market Value thereof determined by taking the valuation of that Ship referred to in paragraph 5 of Schedule 3 (Condition Precedent Documents), Part B;
"Insurances" means, in relation to a Ship:
(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, the
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Earnings or otherwise in relation to it whether before, on or after the date of this Agreement; and
(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;
"Interest Payment Date" has the meaning given to it in paragraph (a) of Clause 5.2 (Payment of interest);
"Interest Period" means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 6 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 5.3 (Default interest);
"Interpolated Historic Term SOFR" means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
(a) either:
(i) the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
(ii) if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, the most recent SOFR for a day which is no more than five US Government Securities Business Days (and no less than two US Government Securities Business Days) before the Quotation Day; and
(b) the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;
"Interpolated Term SOFR" means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
(a) either
(i) the applicable Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
(ii) if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for the day which is two US Government Securities Business Days before the Quotation Day; and
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(b) the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;
"ISM Code" means, in relation to its application to the Borrowers, the Ships and their operation:
(a) 'The International Management Code for the Safe Operation of Ships and for Pollution Prevention', currently known or referred to as the 'ISM Code', adopted by the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994 into chapter IX of the International Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
(b) all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the 'Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations' produced by the International Maritime Organisation pursuant to Resolution A.788(19) adopted on 25 November 1995,
as the same may be amended, supplemented or replaced from time to time;
"ISM Code Documentation" includes, in relation to a Ship:
(a) the document of compliance (DOC) and safety management certificate (SMC) issued pursuant to the ISM Code within the periods specified by the ISM Code; and
(b) all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Agent may require; and
(c) any other documents which are prepared or which are otherwise relevant to establish and maintain that Ship's or that Borrower's compliance with the ISM Code which the Agent may require;
"ISM SMS" means the safety management system which is required to be developed, implemented and maintained under the ISM Code;
"ISPS Code" means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924 (22) of the International Maritime Organisation ("IMO") adopted by a Diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) to take effect on 1 July 2004;
"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code;
"Lender" means, subject to Clause 26.6 (Lender re-organisation; waiver of Transfer Certificate):
(a) a bank or financial institution listed in Schedule 1 and acting through its branch or office indicated in Schedule 1 (Lenders and Commitments) (or through another branch notified to the Borrowers under Clause 26.14 (Change of lending office)) unless it has
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delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and
(b) the holder for the time being of a Transfer Certificate;
"LMA" means the Loan Market Association or any successor organisation;
"Loan" means the loan made or, as the case may be, to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a "part of the Loan" means any part of the Loan as the context may require;
"Major Casualty" means, in relation to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 or the equivalent in any other currency;
"Majority Lenders" means:
(a) before the Loan has been made, Lenders whose Commitments total 66.67 per cent. of the Total Commitments; and
(b) after the Loan has been made, Lenders whose Contributions total 66.67 per cent. of the Loan;
"Mandated Lead Arranger" means Crédit Agricole Corporate and Investment Bank, a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre;
"Margin" means 1.75 per cent. per annum;
"Market Value" means the market value of the Ship determined from time to time in accordance with Clause 15.4 (Valuation of Ship);
"Minimum Liquidity" has the meaning given in Clause 11.19 (Minimum Liquidity);
"Mortgage" means, in relation to a Ship, the first preferred or, as the case may be, priority ship mortgage and, if applicable, deed of covenant collateral thereto on that Ship, executed by the Borrower which is the owner thereof in favour of the Security Trustee or (as the case may be) the Lenders, in such form as the Lenders may approve or require and in the plural means all of them;
"Navios Shipmanagement Holdings" means Navios Shipmanagement Holdings Corporation, a corporation incorporated in the Marshall Islands having its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Notifying Lender" has the meaning given in Clause 23.1 (Illegality) or Clause 24.2 (Increased cost claims) as the context requires;
"Party" means a party to this Agreement;
"Payment Currency" has the meaning given in Clause 21.4 (Currency indemnity);
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"Permitted Security Interests" means:
(a) Security Interests created by the Finance Documents;
(b) at any time prior to the Drawdown Date, any Existing Security Interest;
(c) liens for unpaid crew's wages in accordance with usual maritime practice;
(d) liens for salvage;
(e) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
(f) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 45 days overdue (unless the overdue amount is being contested by the relevant Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to paragraph (g) of Clause 14.13 (Restrictions on chartering, appointment of managers etc.);
(g) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the relevant Borrower is prosecuting or defending such action in good faith by appropriate steps; and
(h) Security Interests arising by operation of law in respect of taxes which are not overdue for payment other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;
"Person" has the meaning given to it in Clause 10.18 (Sanctions);
"Pertinent Jurisdiction", in relation to a company, means:
(a) England and Wales;
(b) the country under the laws of which the company is incorporated or formed;
(c) a country in which the company's central management and control is or has recently been exercised;
(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
(e) a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;
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"Poseidon Principles" means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organisation from time to time;
"Potential Event of Default" means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two US Government Securities Business Days before the first day of that period unless market practice differs in the relevant syndicated loan market in which case the Quotation Day will be determined by the Agent in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).
"Reference Rate" means, in relation to the Loan or any part of the Loan:
(a) the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b) as otherwise determined pursuant to Clause 7.1 (Unavailability of Term SOFR),
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero;
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an affiliate of the investment manager or investment adviser of the first fund.
"Relevant Person" has the meaning given in Clause 19.9 (Relevant Persons);
"Relevant Market" means the market for overnight cash borrowing collateralised by US Government Securities;
"Repayment Date" means a date on which a repayment is required to be made under Clause 8 (Repayment and Prepayment);
"Repayment Instalment" has the meaning given to it in Clause 8.1 (Amount of repayment instalments);
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian;
"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers;
"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss";
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"Retention Account" means an account in the joint names of the Borrowers with the Account Bank as per Schedule 7 (Account Details), or any other account (with that or another office of the Account Bank) which replaces this account and is designated by the Agent as the Retention Account for the purposes of this Agreement;
"Sanctioned Person" has the meaning given to it in Clause 10.18 (Sanctions);
"Sanctioned Country" has the meaning given to it in Clause 10.18 (Sanctions);
"Sanctions" means any economic or trade sanctions or restrictive measures enacted, administered, imposed or enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), the U.S. Department of State, the United Nations Security Council and/or the European Union and/or, if applicable to any Borrower or Creditor Party, any of its member states and/or His Majesty's Treasury and/or the Direction Generale du Tresor of the French Republic or other relevant sanctions authority;
"Secured Liabilities" means all liabilities which the Borrowers, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or by virtue of the Finance Documents or any judgment relating to the Finance Documents; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
"Security Cover Ratio" means, at any relevant time, the aggregate of:
(a) the aggregate of the Market Value of the Ships; plus
(b) the net realisable value of any additional security provided at that time under Clause 15 (Security Cover),
expressed as a percentage of the Loan;
"Security Interest" means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind; and
(b) the rights of the plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken;
"Security Party" means the Corporate Guarantor, an Approved Manager, a Shareholder and any other person (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the final paragraph of the definition of "Finance Documents";
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"Security Period" means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrowers, the Security Parties and the other Creditor Parties that:
(a) all amounts which have become due for payment by a Borrower or any Security Party under the Finance Documents have been paid;
(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
(c) no Borrower nor any Security Party has any future or contingent liability under Clause 20 (Fees and Expenses), 21 (Indemnities) or 22 (No Set-off or Tax Deduction) below or any other provision of this Agreement or another Finance Document; and
(d) the Agent, the Security Trustee and the Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;
"Security Trustee" means Crédit Agricole Corporate and Investment Bank, a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France or any successor of it appointed under clause 5 (appointment of new servicing bank) of the Agency and Trust Deed;
"Selection Notice" means a notice substantially in the form set out in Part B of Schedule 2 (Requests) given in accordance with Clause 6 (Interest Periods);
"Shareholder" means:
(a) in relation to Borrower A, Borrower C and Borrower E, Navios Maritime Operating L.L.C., a limited liability company formed in the Republic of the Marshall Islands, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
(b) in relation to Borrower B, Boheme Navigation Company, a corporation incorporated in the Republic of the Marshall Islands, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960; and
(c) in relation to Borrower D and Borrower F, Veja Navigation Company, a corporation incorporated in the Republic of the Marshall Islands, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
"Shares Security Deed" means, in respect of all the issued shares in each Borrower, a pledge of such shares executed or to be executed by the relevant Shareholder in favour of the Security Trustee, in such form as the Lenders may approve or require;
"Ship" means each of Ship A, Ship B, Ship C, Ship D, Ship E and Ship F and, in the plural, means all of them;
"Ship A" has the meaning given to that term in Schedule 6 (Vessel Details);
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"Ship B" has the meaning given to that term in Schedule 6 (Vessel Details);
"Ship C" has the meaning given to that term in Schedule 6 (Vessel Details);
"Ship D" has the meaning given to that term in Schedule 6 (Vessel Details);
"Ship E" has the meaning given to that term in Schedule 6 (Vessel Details);
"Ship F" has the meaning given to that term in Schedule 6 (Vessel Details);
"SOFR" means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate);
"Specified Time" means a day or time determined in accordance with Schedule 5 (Timetables);
"Statement of Compliance" means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI;
"Term SOFR" means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate);
"Total Loss" means in relation to a Ship:
(a) actual, constructive, compromised, agreed or arranged total loss of that Ship;
(b) any expropriation, confiscation, requisition or acquisition of a Ship whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, excluding a requisition for hire for a fixed period not exceeding one year without any right to an extension unless a Ship is within 30 days redelivered to the full control of the Borrower owning that Ship;
(c) any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal; and
(d) any capture, seizure or confiscation of that Ship (including any hijacking or theft) unless it is within the Relevant Period redelivered to the full control of the Borrower owning that Ship.
In this definition "Relevant Period" means in the case of piracy or capture, seizure or confiscation of a Ship (including any hijacking or theft) 90 days Provided that if the relevant underwriters confirm to the Agent in writing prior to the end of the 90-day period referred to in (i) above that the relevant Ship is subject to an approved piracy insurance cover, the earlier of 12 months after the date on which that Ship is captured by pirates and the date on which the piracy insurance cover expires;
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"Total Loss Date" means in relation to a Ship:
(a) in the case of an actual loss, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:
(i) the date on which a notice of abandonment is given to the insurers; and
(ii) the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning that Ship, with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and
(c) in the case of any other type of total loss, on the earlier of:
(i) the date at which a total loss is subsequently admitted by such insurers;
(ii) the date at which a total loss is subsequently adjudged by a competent court of law or arbitration tribunal to have occurred, if such insurers do not immediately admit such claim; or
(iii) the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
"Transfer Certificate" has the meaning given in Clause 26.2 (Transfer by a Lender);
"Trust Property" has the meaning given in clause 3.1 (definition of "Trust Property") of the Agency and Trust Deed;
"UK Bail-In Legislation" means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings);
"Unpaid Sum" means any sum due and payable but unpaid by a Borrower or any Security Party under the Finance Documents;
"US" means the United States of America;
"US Government Securities Business Day" means any day other than:
(a) a Saturday or a Sunday; and
(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities;
"US GAAP" means generally accepted international accounting principles as from time to time in effect in the United States of America;
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"US Tax Obligor" means:
(a) a person which is resident for tax purposes in the United States of America; or
(b) a person some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes; and
"Write-down and Conversion Powers" means:
(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b) in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
(c) in relation to any other applicable Bail-In Legislation:
(i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii) any similar or analogous powers under that Bail-In Legislation.
1.2 Construction of certain terms
In this Agreement:
"approved" means, for the purposes of Clause 13 (Insurance), approved in writing by the Agent;
"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;
"company" includes any partnership, joint venture and unincorporated association;
"consent" includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;
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"contingent liability" means a liability which is not certain to arise and/or the amount of which remains unascertained;
a Lender's "cost of funds" in relation to its participation in the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan or that part of the Loan for a period equal in length to the Interest Period of the Loan or that part of the Loan;
"document" includes a deed; also a letter or fax;
"excess risks" means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;
"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
"law" includes any form of delegated legislation, any order or decree, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
"legal or administrative action" means any legal proceeding or arbitration and any administrative or regulatory action or investigation;
"liability" includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;
"months" shall be construed in accordance with Clause 1.3 (Meaning of "month");
"obligatory insurances" means, in relation to a Ship, all insurances effected, or which the Borrower owning that Ship, is obliged to effect, under Clause 13 (Insurance) or any other provision of this Agreement or another Finance Document;
"parent company" has the meaning given in Clause 1.4 (Meaning of "subsidiary");
"person" includes any individual, any entity, any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;
"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
"protection and indemnity risks" means the usual risks covered by a protection and indemnity association, which is a member of the International Group of P&I Clubs, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
"regulation" includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is reasonable in the ordinary course of business of
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the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self‑regulatory or other authority or organisation;
"subsidiary" has the meaning given in Clause 1.4 (Meaning of "subsidiary");
"successor" includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;
"tax" includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine;
"war risks" includes the risk of mines and all risks excluded by clauses 29, 30 or 31 of the International Hull Clauses (1/11/02), clauses 29 or 30 of the International Hull Clauses (1/11/03), clauses 24, 25 or 26 of the Institute Time Clauses (Hulls) (1/11/95) or clauses 23, 24 or 25 of the Institute Time Clauses (Hulls) (1/10/83) or any equivalent provision; and
"which is continuing" or "is continuing", a Potential Event of Default is continuing if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.
1.3 Meaning of "month"
"month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a) (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last month of any period within which month an Interest Payment Date falls.
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1.4 Meaning of "subsidiary"
A company (S) is a subsidiary of another company (P) if:
(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
(b) P has direct or indirect control over a majority of the voting rights attached to the issued shares of S;
and any company of which S is a subsidiary is a parent company of S Provided that there shall be excluded from this definition any subsidiaries which are listed on a public stock exchange.
1.5 General Interpretation
(a) In this Agreement:
(i) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
(ii) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise; and
(iii) words denoting the singular number shall include the plural and vice versa.
(b) Clauses 1.1 (Definitions) to 1.4 (Meaning of "subsidiary") and paragraph (a) of this Clause 1.5 (General Interpretation) apply unless the contrary intention appears.
(c) References in Clause 1.1 (Definitions) to a document being in the form of a particular Appendix include references to that form with any modifications to that form which the Agent (with the authorisation of the Lenders in the case of substantial modifications) approves or requires.
(d) The clause headings shall not affect the interpretation of this Agreement.
2 Loan Facility
2.1 Amount of loan facility
Subject to the other provisions of this Agreement, the Lenders shall make a term loan facility in an aggregate amount not exceeding the Total Commitments.
2.2 Lenders' participations in Loan
(a) Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.
(b) The Agent shall notify each Lender of the amount of its Commitment and the amount of its participation in the Loan by the Specified Time.
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2.3 Purpose of Loan
The Borrowers undertake with each Creditor Party to use the Loan only for the purpose stated in the preamble to this Agreement.
3 Position of the Lenders
3.1 Interests of Lenders several
The rights of the Creditor Parties under this Agreement are several; accordingly each Lender shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement without joining the Security Trustee or any other Creditor Party as additional parties in the proceedings, save that the Security Interests created by any of the Finance Documents may only be enforced in accordance with Clause 19.2 (Actions following an Event of Default).
3.2 Proceedings by individual Creditor Party
However, without the prior consent of the Lenders, no Creditor Party may bring proceedings in respect of:
(a) any other liability or obligation of any Borrower or a Security Party under or connected with a Finance Document; or
(b) any misrepresentation or breach of warranty by any Borrower or a Security Party in or connected with a Finance Document.
3.3 Obligations of Creditor Parties several
The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:
(a) the obligations of the other Lenders being increased; nor
(b) a Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Documents,
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
3.4 Parties bound by certain actions of Lenders
Every Lender, each Borrower and each Security Party shall be bound by:
(a) any determination made, or action taken, by the Lenders under any provision of a Finance Document;
(b) any instruction or authorisation given by the Lenders to the Agent or the Security Trustee under or in connection with any Finance Document; and
(c) any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.
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3.5 Reliance on action of Agent
However, each Borrower and each Security Party:
(a) shall be entitled to assume that the Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and
(b) shall not be entitled to require any evidence that such an instruction or authorisation has been given.
3.6 Construction
In Clauses 3.4 (Parties bound by certain actions of Lenders) and 3.5 (Reliance on action of Agent) references to action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.
4 Drawdown
4.1 Request for advance of Loan
(a) Subject to the following conditions, the Borrowers may request the Loan to be advanced by ensuring that the Agent receives a completed Drawdown Notice not later than the Specified Time (or such other shorter period as the Lenders may agree).
(b) The Borrowers may not deliver more than one Drawdown Notice.
4.2 Availability
The conditions referred to in Clause 4.1 (Request for advance of Loan) are that:
(a) the Drawdown Date has to be a Business Day during the Availability Period;
(b) the amount of the Loan shall not exceed the lower of (i) $62,500,000 and (ii) 40 per cent. of the aggregate Initial Market Value of the Ships;
(c) the Loan shall be made available in a single amount; and
(d) the amount of the Loan shall not exceed the Total Commitments.
4.3 Notification to Lenders of receipt of a Drawdown Notice
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
(a) the amount of the Loan and the Drawdown Date;
(b) the amount of that Lender's participation in the Loan; and
(c) the duration of the first Interest Period.
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4.4 Drawdown Notice irrevocable
A Drawdown Notice must be signed by an officer or other authorised person of each Borrower; and once served a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.
4.5 Lenders to make available Contributions
Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender under Clause 2.2 (Lenders' participations in Loan).
4.6 Disbursement of Loan
Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5 (Lenders to make available Contributions); and that payment to the Borrowers shall be made:
(a) to the account which the Borrowers specify in the Drawdown Notice; and
(b) in the like funds as the Agent received the payments from the Lenders.
4.7 Disbursement of Loan to third party
The payment by the Agent under Clause 4.6 (Disbursement of Loan) to any third party specified by the Borrowers in the Drawdown Notice shall constitute the making of the Loan and the Borrowers shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.
4.8 Prepositioning of funds
If, in respect of the Loan, the Lenders, at the request of the Borrowers and on terms acceptable to all the Lenders and in their absolute discretion, preposition funds with an escrow agent or any other bank, the Borrowers and the Corporate Guarantor:
(a) agree to pay interest on the amount of the funds so prepositioned at the rate described in Clause 5.1 (Calculation of interest) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on the Loan after its Drawdown Date in respect of it or, if such Drawdown Date does not occur, within three Business Days of demand by the Agent; and
(b) shall, without duplication, indemnify each Creditor Party against any costs, loss or liability it may incur in connection with such arrangement.
5 Interest
5.1 Calculation of interest
The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage rate per annum which is the aggregate of:
(i) the Margin; and
(ii) the Reference Rate.
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5.2 Payment of interest
(a) The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an "Interest Payment Date").
(b) If an Interest Period is longer than three months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three monthly intervals after the first day of the Interest Period.
5.3 Default interest
(a) If a Borrower or a Security Party fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent. Any interest accruing under this Clause 5.3 (Default interest) shall be immediately payable by the Borrowers on demand by the Agent.
(b) If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
(i) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
(c) Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
5.4 Notification of rates of interest
(a) The Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.
(b) The Agent shall promptly notify the Borrowers of each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.
6 Interest Periods
6.1 Selection of Interest Periods
(a) The Borrowers may select the Interest Period for the Loan in the Drawdown Notice. Subject to paragraph (f) below and Clause 6.2 (Changes to Interest Periods), the Borrowers may select each subsequent Interest Period in respect of the Loan in a Selection Notice.
(b) Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrowers not later than the Specified Time.
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(c) If the Borrowers fail to select an Interest Period in the Drawdown Notice or fail to deliver a Selection Notice to the Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraph (f) below and Clause 6.2 (Changes to Interest Periods), be three months.
(d) Subject to this Clause 6 (Interest Periods), the Borrowers may select an Interest Period of three or six months or any other period agreed between the Borrowers, the Agent and the Lenders.
(e) An Interest Period in respect of the Loan or any part of the Loan shall not extend beyond the Final Maturity Date.
(f) In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.
(g) The first Interest Period for the Loan shall start on the Drawdown Date and each subsequent Interest Period shall start on the last day of the preceding Interest Period.
(h) Except for the purposes of paragraph (f) above and Clause 6.2 (Changes to Interest Periods), the Loan shall have one Interest Period only at any time.
6.2 Changes to Interest Periods
(a) In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Agent may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 6.1 (Selection of Interest Periods).
(b) If the Agent makes any change to an Interest Period referred to in this Clause 6.2 (Changes to Interest Periods), it shall promptly notify the Borrowers and the Lenders.
6.3 Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
7 Changes to the Calculation of Interest
7.1 Unavailability of Term SOFR
(a) Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(b) Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.
(c) Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference
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Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(d) Cost of funds: If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 7.3 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.
7.2 Market disruption
If before close of business in Paris on the Quotation Day for the relevant Interest Period, the Agent receives notification from a Lender or Lenders that its cost of funds relating to its participation in the Loan or that part of the Loan would be in excess of the Reference Rate then Clause 7.3 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
7.3 Cost of funds
(a) If this Clause 7.3 (Cost of funds) applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i) the Margin; and
(ii) the rate notified to the Agent by that Lender as soon as practicable and in any event 2 Business Days before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum its cost of funds relating to its participation in the Loan or that part of the Loan.
(b) If this Clause 7.3 (Cost of funds) applies and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
(c) Subject to Clause 27.4 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
(d) If paragraph (e) below does not apply and any rate notified to the Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
(e) If this Clause 7.3 (Cost of funds) applies pursuant to Clause 7.2 (Market disruption) and a Lender's Funding Rate is less than the Reference Rate, that Lender's cost of funds relating to its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be the Reference Rate.
(f) If this Clause 7.3 (Cost of funds) applies but any Lender does not notify a rate to the Agent by the time specified in sub-paragraph (ii) of paragraph (a) above the rate of interest shall be calculated on the basis of the rates notified by the remaining Lenders.
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7.4 Break Costs
(a) The Borrowers shall, within three Business Days of demand by a Creditor Party, pay to that Creditor Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day prior to the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
(b) Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in respect of which they become or may become payable.
8 Repayment and Prepayment
8.1 Amount of repayment instalments
The Borrowers shall repay the Loan by 20 equal consecutive quarterly instalments (each a "Repayment Instalment" and together, the "Repayment Instalments") each in the amount of $3,125,000 each, provided that if the amount of the Loan actually drawn down is less than $62,500,000 each Repayment Instalment shall be reduced pro rata by an amount in aggregate equal to the undrawn amount.
8.2 Repayment Dates
The first Repayment Instalment shall be repaid on the date falling three months after the earlier of (i) the Drawdown Date and (ii) 31 July 2025 with the remaining Repayment Instalments to be repaid at 3-monthly intervals thereafter and the last Repayment Instalment shall be repaid on the Final Maturity Date.
8.3 Final Repayment Date
On the final Repayment Date, the Borrowers shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
8.4 Voluntary prepayment
Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loan on the last day of an Interest Period in respect thereof.
8.5 Conditions for voluntary prepayment
The conditions referred to in Clause 8.4 (Voluntary prepayment) are that:
(a) a partial prepayment shall be $1,000,000 or an integral multiple of $1,000,000;
(b) the Agent has received from the Borrowers at least five Business Days' prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made (such date shall be the last day of an Interest Period); and
(c) the Borrowers have provided evidence satisfactory to the Agent that any consent required by the Borrowers or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrowers or any Security Party has been complied with.
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8.6 Effect of notice of prepayment
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authority of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.
8.7 Notification of notice of prepayment
The Agent shall notify the Lenders promptly upon receiving a prepayment notice and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under paragraph (c) of Clause 8.5 (Conditions for voluntary prepayment).
8.8 Mandatory prepayment
The Borrowers shall be obliged to prepay the Relevant Amount:
(a) in the case of a sale, on or before the date on which the sale is completed by delivery of that Ship to the buyer; or
(b) in the case of a Total Loss, on the earlier of the date falling 180 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.
In this Clause 8.8 (Mandatory prepayment):
"Relevant Amount" means:
(a) an amount equal to the higher of:
(i) the Relevant Fraction of the Loan on the date on which the relevant Ship is sold or becomes a Total Loss; and
(ii) an amount which after the application of the prepayment to be made pursuant to paragraph (b) of Clause 8.10 (Application of partial prepayment) results in the Security Cover Ratio being at last equal to the greater of (A) the Security Cover Ratio required to be maintained under Clause 15.1 (Minimum required security cover) and (B) the percentage which applied immediately prior to the applicable event described in paragraph (a) or (b) of this Clause 8.8 (Mandatory prepayment); or
(b) if the relevant Ship is the last Ship subject to a Mortgage, the whole of the Loan.
"Relevant Fraction" means a fraction of which the numerator is the Market Value of the Ship which is sold or becomes a Total Loss and the denominator is the aggregate of (A) the Market Value of the other Ships then subject to a Mortgage and (B) the Market Value of that Ship.
8.9 Amounts payable on prepayment
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 (Indemnities) below or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period together with any Break Costs, without premium or penalty.
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8.10 Application of partial prepayment
Any partial prepayment shall be applied:
(a) if made pursuant to Clause 8.4 (Voluntary prepayment) or Clause 23.3 (Prepayment; termination of Commitment), pro rata against the then outstanding Repayment Instalments or in such other manner as the Agent (acting on the instructions of the Lenders) may agree with the Borrowers; and
(b) if made pursuant to Clause 8.8 (Mandatory prepayment), pro rata against the Repayment Instalments together with payment of any overdue interest, any accrued interest relating to the Loan, any other costs, fees, expenses, commissions due under this Agreement, and thereafter any surplus shall be released to the Borrowers, provided that no Event of Default or Potential Event of Default has occurred or is continuing.
8.11 No reborrowing
No amount repaid or prepaid may be reborrowed.
9 Conditions Precedent
9.1 Documents, fees and no default
Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:
(a) that on or before the date of this Agreement, the Agent receives:
(i) the documents described in Part A of Schedule 3 (Condition Precedent Documents) in a form and substance satisfactory to the Agent and its lawyers; and
(ii) the upfront fee referred to in Clause 20.1 (Upfront fee);
(b) that, before or on the Drawdown Date, the Agent receives the documents described in Part B of Schedule 3 (Condition Precedent Documents) in form and substance satisfactory to the Agent and its lawyers;
(c) that at the date of the Drawdown Notice and at the Drawdown Date:
(i) no Event of Default or Potential Event of Default has occurred or is continuing or would result from the borrowing of the Loan;
(ii) the representations and warranties in Clause 10 (Representations and Warranties) and those of the Borrowers or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;
(iii) none of the circumstances contemplated by Clause 7.2 (Market disruption) has occurred and is continuing; and
(iv) there has been no material adverse change in the business, management, condition (financial or otherwise), results of operations, operation, performance, prospects or
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properties of the Borrowers or any of them and/or the Corporate Guarantor applying as at 31 December 2024;
(d) that, if the ratio set out in Clause 15.1 (Minimum required security cover) were applied immediately following the making of the Loan, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
(e) that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date.
9.2 Waiver of conditions precedent
If the Majority Lenders, at their discretion, permit the Loan to be borrowed before certain of the conditions referred to in Clause 9.1 (Documents, fees and no default) are satisfied, the Borrowers shall ensure that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authority of the Majority Lenders, specify).
10 Representations and Warranties
10.1 General
Each Borrower represents and warrants (which representations and warranties (other than the ones in Clauses 10.11 (Information) and 10.12 (No litigation)) shall survive the execution of this Agreement and shall be deemed to be repeated throughout the Security Period on the first day of each Interest Period with respect to the facts and circumstances then existing) to each Creditor Party as follows.
10.2 Status
Each of the Borrowers is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands.
10.3 Share capital and ownership
(a) Each of Borrower A, Borrower D and Borrower E is authorised to issue 500 registered shares with a par value of one dollar per share, all of which shares have been issued in registered form, and the legal title and beneficial ownership of all those shares is held, free of any Security Interest (other than any Existing Security Interest) or other claim, by the relevant Shareholder.
(b) Each of Borrower B, Borrower C and Borrower F is authorised to issue 500 registered and/or bearer share(s) without par value, all of which shares have been issued in registered form, and the legal title and beneficial ownership of all those shares is held, free of any Security Interest (other than any Existing Security Interest) or other claim, by the relevant Shareholder.
(c) Each Borrower is 100 per cent. owned indirectly by the Corporate Guarantor.
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10.4 Corporate power
Each Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it to:
(a) continue to own the Ship owned by it under the relevant Approved Flag;
(b) execute the Finance Documents to which that Borrower is a party; and
(c) borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which that Borrower is a party.
10.5 Consents in force
All the consents referred to in Clause 10.4 (Corporate power) remain in force and nothing has occurred which makes any of them liable to revocation.
10.6 Legal validity; effective Security Interests
The Finance Documents to which that Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):
(a) constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and
(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
subject to any relevant insolvency laws affecting creditors' rights generally.
10.7 No third party Security Interests
Without limiting the generality of Clause 10.6 (Legal validity; effective Security Interests), at the time of the execution and delivery of each Finance Document to which a Borrower is a party:
(a) each Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.
10.8 No conflicts
The execution by a Borrower of each Finance Document to which it is a party, and the borrowing by that Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:
(a) any law or regulation; or
(b) the constitutional documents of that Borrower; or
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(c) any contractual or other obligation or restriction which is binding on that Borrower or any of its assets.
10.9 No withholding taxes
All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.
10.10 No default
No Event of Default or Potential Event of Default has occurred and is continuing or would result from the entry into, the performance of, or any transaction contemplated by, any Finance Document.
10.11 Information
All information which has been provided in writing by or on behalf of the Borrowers or any member of the Group to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5 (Information provided to be accurate); all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7 (Form of financial statements); and there has been no material adverse change in the financial position or state of affairs, operation or performance of the Borrowers or any of them or any Security Party (excluding an Approved Manager) as at 31 December 2024 from that disclosed to the Agent.
10.12 No litigation
No material, legal or administrative action involving any Borrower or any Security Party (excluding any Approved Manager) has been commenced or taken or, to a Borrower's knowledge, is likely to be commenced or taken.
10.13 Compliance with certain undertakings
At the date of this Agreement, each Borrower is in compliance with Clauses 11.2 (Title and negative pledge), 11.4 (No other liabilities or obligations to be incurred), 11.9 (Consents) and 11.13 (Confirmation of no default).
10.14 Taxes paid
Each Borrower has paid all taxes applicable to, or imposed on or in relation to that Borrower, its business or the Ship owned by it.
10.15 No money laundering; anti-bribery
None of the Borrowers, the Security Parties and the Designated Unitholder nor any of their subsidiaries, directors or officers, or, to their best knowledge, any affiliate, agent or employee of them, have engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules in any applicable jurisdiction and each of the Borrowers, the Security Parties and the Designated Unitholder has instituted and maintains policies and procedures designed to prevent violation of such laws, regulations and rules.
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10.16 ISM Code, ISPS Code Compliance and Environmental Laws
All requirements of the ISM Code, ISPS Code and Environmental Laws as they relate to the Borrowers, the Approved Managers and the Ships have been complied with.
10.17 No immunity
No Borrower, 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 judgement, execution or other enforcement).
10.18 Sanctions
None of the Borrowers, the Security Parties, the Designated Unitholder or any charterer in respect of a Ship nor any of their subsidiaries, directors or officers, or, to their best knowledge, any affiliate, agent or employee of them, is an individual or entity (a "Person"), that is, or is directly or indirectly, owned or controlled by a Person that is: (i) the target of any Sanctions (a "Sanctioned Person"), (ii) located, organized or resident in a country or territory that is, or whose government is, the target of Sanctions (currently Cuba, Iran, North Korea, Syria and the Crimea, Donetsk People's Republic and Luhansk People's Republic regions of Ukraine) (a "Sanctioned Country") or (iii) in violation of any Sanctions, anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules.
10.19 Validity and completeness of the Existing Charters
(a) Each Existing Charter constitutes legal, valid, binding and enforceable obligations of each Borrower to which is a party thereto.
(b) The copies of the Existing Charters delivered to the Agent before the date of this Agreement are true and complete copies.
(c) No amendments or additions to any Existing Charter have been agreed nor has any Borrower waived any of its respective rights under the relevant Existing Charter.
10.20 Insolvency
In relation to each Borrower, no corporate action, legal proceeding or other procedure or step described in paragraph (f) of Clause 19.1 (Events of Default) or creditors' process described in that clause has been taken or, to its knowledge, threatened in relation to it, and none of the circumstances described in paragraph (f) of Clause 19.1 (Events of Default) applies to it.
11 General Undertakings
11.1 General
Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 (General Undertakings) at all times during the Security Period except as the Agent may, with the authority of the Majority Lenders, otherwise permit in writing.
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11.2 Title and negative pledge
Each Borrower will:
(a) hold the legal title to, and own the entire beneficial interest in the Ship owned by it, the Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents;
(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and
(c) procure that its liabilities under the Finance Documents to which it is party do and will rank at least pari passu with all other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
11.3 No disposal of assets
No Borrower will transfer, lease or otherwise dispose of:
(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or
(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,
but paragraph (a) does not apply to any charter of a Ship as to which Clause 14.13 (Restrictions on chartering, appointment of managers etc.) applies.
11.4 No other liabilities or obligations to be incurred
No Borrower will incur any liability or obligation except:
(a) liabilities and obligations under the Finance Documents to which it is a party;
(b) subject to other provisions of this Agreement, liabilities or obligations reasonably incurred in the ordinary course of trading, maintaining, repairing, operating and chartering the Ship owned by it;
(c) at any time prior to the Drawdown Date, the Existing Indebtedness; and
(d) Financial Indebtedness to any other corporation which is a member of the Group or individual who is a shareholder or majority shareholder in a member of the Group provided that such Financial Indebtedness shall be fully subordinated to the Loan and the relevant Borrower shall, promptly following the Agent's demand, execute or procure the execution of any documents which the Agent specifies to create or maintain the subordination of the rights of the relevant member of the Group against the relevant Borrower to those of the Creditor Parties under the Finance Documents.
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11.5 Information provided to be accurate
All financial and other information which is provided in writing by or on behalf of a Borrower under or in connection with any Finance Document will be true, correct, accurate and not misleading and will not omit any material fact or consideration.
11.6 Provision of financial statements
Each Borrower will send or procure that they are sent to the Agent:
(a) as soon as they become publicly available, but in no event later than 180 days after the end of each financial year of the Corporate Guarantor (commencing with the financial year ending on 31 December 2025), the audited annual consolidated accounts of the Corporate Guarantor; and
(b) as soon as they become publicly available, but in no event later than 90 days after the end of the 6-month period ending on 30 June in each financial year of the Corporate Guarantor (commencing with the 6-month period ending on 30 June 2025), the unaudited semi-annual consolidated accounts of the Corporate Guarantor, duly certified as to their correctness by an officer of the Corporate Guarantor; and
(c) promptly after each request by the Agent, such further financial information about that Borrower, the Ship owned by it and the Corporate Guarantor or any other member of the Group (including, but not limited to, information regarding the charter arrangements, Financial Indebtedness and operating expenses in relation to any member of the Group) as the Agent may reasonably require.
11.7 Form of financial statements
All accounts (audited and unaudited) delivered under Clause 11.6 (Provision of financial statements) will:
(a) be prepared in accordance with all applicable laws and US GAAP;
(b) give a true and fair view of the state of affairs of the relevant person at the date of those accounts and of its profit for the period to which those accounts relate; and
(c) fully disclose or provide for all significant liabilities of the Group.
11.8 Shareholder notices
Each Borrower will send to the Agent following a request by the Agent, and at the same time as they are despatched, copies of all communications which are despatched to that Borrower's shareholders or any class of them.
11.9 Consents
Each Borrower will, and will procure that each Security Party will, maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
(a) for that Borrower and that Security Party to perform its obligations under any Finance Document or any Charterparty to which it is party;
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(b) for the validity or enforceability of any Finance Document and any Charterparty to which it is party; and
(c) for that Borrower to continue to own and operate the Ship owned by it,
and that Borrower will, and will procure that each Security Party will, comply with the terms of all such consents.
11.10 Maintenance of Security Interests
Each Borrower will:
(a) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
(b) without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
11.11 Notification of litigation
Each Borrower will provide the Agent with details of any legal or administrative action involving that Borrower, any Security Party, any Approved Manager, the Ship owned by it, the Earnings or the Insurances in respect of that Ship as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.
11.12 Principal place of business
Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated in paragraph (a) of Clause 28.2 (Addresses for communications); and no Borrower will establish, or do anything as a result of which it would be deemed to have, a place of business in the United States or the United Kingdom or any country other than Greece.
11.13 Confirmation of no default
Each Borrower will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by an officer of each Borrower and which:
(a) states that no Event of Default or Potential Event of Default has occurred; or
(b) states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
The Agent may serve requests under this Clause 11.13 (Confirmation of no default) from time to time; this Clause 11.13 (Confirmation of no default) does not affect the Borrowers' obligations under Clause 11.14 (Notification of default).
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11.14 Notification of default
Each Borrower will notify the Agent as soon as that Borrower becomes aware of the occurrence of an Event of Default or a Potential Event of Default and will thereafter keep the Agent fully up‑to‑date with all developments.
11.15 Provision of further information
Each Borrower will, as soon as practicable after receiving a request, provide the Agent with any additional financial or other information relating:
(a) to that Borrower, the Ship owned by it, the Insurances, the Earnings or the Corporate Guarantor;
(b) to any other matter relevant to, or to any provision of, a Finance Document; or
(c) any information requested in respect of that Borrower, the Corporate Guarantor, the Shareholders and the Designated Unitholder in connection with the Creditor Parties' and/or the Account Bank's "Know your customer" regulations, including, but not limited to information required pursuant to all applicable laws and regulations, including, without limitation, the laws of the European Union, France and the United States of America in connection with that Borrower, the Corporate Guarantor and any other Security Party and their respective beneficial owners,
which may be requested by the Agent, the Security Trustee or any Lender at any time.
11.16 Provision of copies and translation of documents
Each Borrower will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; if the Agent so requires in respect of any of those documents, that Borrower will provide a certified English translation prepared by a translator approved by the Agent.
11.17 "Know your customer" checks
If:
(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(b) any change in the status of any Borrower or any Security Party after the date of this Agreement;
(c) a proposed sale of any Ship; or
(d) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
obliges the Agent or any Lender (or, in the case of paragraph (d), any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence (including for the purposes of paragraph (c) above such documentation and other evidence required in relation to any prospective buyer of a Ship
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provided that there will be a simultaneous closing for the release of such Ship) as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (d), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (d), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
11.18 Sanctions
(a) None of the Borrowers and the Security Parties will, directly or indirectly, use the proceeds of the Loan hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or any other Person: (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, a Sanctioned Person or Sanctioned Country, or (ii) use in repayment of any moneys due to the Creditor Parties any Earnings of the Ships paid directly or indirectly from any activities or business of or with any Person, or in any country, territory or port, that, at the time of such payment, is, a Sanctioned Person or Sanctioned Country, or (iii) in any other manner that would result in a violation of Sanctions by any Person (including, any Creditor Party, whether acting as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise);
(b) Without limiting paragraphs (a) and (b) of Clause 14.10 (Compliance with laws etc.), the Borrowers shall:
(i) comply with, and shall use reasonable endeavours to ensure compliance with, all Sanctions (including, obtaining any applicable consents, authorisations or licenses) in respect to each Ship;
(ii) not cause or permit a Ship to be registered in a Sanctioned Country or used by or for the benefit of a Sanctioned Person;
(iii) not cause or permit a Ship to be used in or otherwise to go to, stop in or call at, a Sanctioned Country when such action is prohibited by Sanctions or would be in violation of Sanctions;
(iv) procure that the Ships shall not be used directly or indirectly in any transport of any goods prohibited by Sanctions;
(v) procure that the Ships shall not be used directly or indirectly in any manner which would expose the Ships, any Security Party, any Existing Charterer, crew or the insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions;
(vi) procure that the Ships shall not be used or traded directly or indirectly in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances and/or re-insurance of the Ships;
(vii) not cause or permit a Ship to be operated by a charterer or, to the best of their knowledge, sub-charterer whose state of incorporation and/or principal place of business is in a Sanctioned Country and/or is a Sanctioned Person;
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(viii) not cause or permit a Ship to be used in any manner or business which is prohibited by applicable anti-corruption, anti-money laundering, countering the financing of terrorism, and export and import laws and regulations; and
(ix) ensure that each Charterparty in respect of a Ship shall contain, and shall cause any charterer of such Ship to include in any sub-charterparty of that Ship, for the benefit of the relevant Borrower, language which broadly gives effect to the provisions of paragraph (b) of Clause 14.10 (Compliance with laws etc.) as regards Sanctions and of this sub-paragraph (vii) of paragraph (b) of this Clause 11.18 (Sanctions) and which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions.
11.19 Minimum Liquidity
The Borrowers or any of them to maintain in their Earnings Accounts or in an Earnings Account or in cash deposits with the Account Bank in their name and/or in the name of the Corporate Guarantor, free credit balances ("Minimum Liquidity") in an aggregate amount of not less than $1,800,000 or such lesser amount which will be equal to $300,000 per Borrower commencing from the Drawdown Date and at all times thereafter.
11.20 No amendment to the Existing Charters
No Borrower will agree to any material amendment (and for, the avoidance of doubt, "material" to mean any amendment which may detrimentally affect the interests of any Creditor Party) or supplement to, or waive or fail to enforce, any Existing Charter or any of its provisions.
11.21 Use of websites
(a) Each Borrower acknowledges an agrees that ay information under this Agreement may be delivered to a Lender (through the Agent) on to an electronic website (a "Website Lender") if:
(i) the Agent and the Lender agree;
(ii) the Agent appoints a website provider and designates an electronic website for this purpose (the "Designated Website");
(iii) the Designated Website is used for communication between the Agent and the Lenders;
(iv) the Agent notifies the Lenders of the address for the website;
(v) the information can only be posted on the website by the Agent; and
(vi) the information posted is in a format agreed between each Borrower and the Agent.
(b) The cost of the website shall be borne by each Borrower, subject to such cost being agreed by each Borrower beforehand.
(c) Any Website Lender may request from any Borrower, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website and each Borrower shall at its own cost comply with any such request within ten Business Days.
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12 Corporate Undertakings
12.1 General
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 (Corporate Undertakings) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
12.2 Maintenance of status
Each of Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.
12.3 Negative undertakings
No Borrower will:
(a) carry on any business other than the ownership, chartering and operation of the Ship owned by it; or
(b) pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital if:
(i) an Event of Default has occurred at such time; or
(ii) an Event of Default would occur as a direct result of such distribution, redemption, purchase or return; or
(c) provide any form of credit or financial assistance or issue guarantees in favour of any other corporation or individual other than in the normal course of its business Provided that that corporation or individual to whom any form of credit or financial assistance has been granted or in favour of whom the guarantee has been issued fully subordinates its rights to the rights of the Creditor Parties under the Finance Documents on terms acceptable to the Agent;
(d) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in that Borrower's share or loan capital; or
(ii) any company in or with which such a person is directly or indirectly interested or connected,
or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length; or
(e) open or maintain any account with any bank or financial institution except accounts with the Account Bank for the purposes of the Finance Documents and any accounts disclosed to the Agent on or prior to the date of this Agreement; or
(f) issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; or
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(g) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative other than for hedging of the Loan; or
(h) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation.
13 Insurance
13.1 General
Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 13 (Insurance), from the Drawdown Date and throughout the term of the Security Period, except as the Agent may, with the authority of the Majority Lenders, otherwise permit in writing.
13.2 Maintenance of obligatory insurances
Each Borrower shall keep the Ship owned by it, at all times during the Security Period, insured at the expense of that Borrower against:
(a) fire and usual marine risks (including hull and machinery and excess risks); and
(b) war risks; and
(c) protection and indemnity risks, meaning the usual risks including liability for oil pollution and excess war risk P&I cover; and
(d) any other risks against which the Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lenders be reasonable for that Borrower to insure and which are specified by the Security Trustee by notice to that Borrower.
13.3 Terms of obligatory insurances
Each Borrower shall effect such insurances:
(a) in dollars;
(b) in the case of fire and usual marine risks and war risks, in such amounts as shall from time to time be approved by the Agent but in any event in an amount not less than the greater of (i) the Market Value of the Ship owned by it and (ii) an amount which, when aggregated with the amount for which the other Ships then subject to a Mortgage is insured, is equal to 120 per cent. of the Loan; and
(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the International Group of P&I Clubs) and the international marine insurance market (currently $1,000,000,000);
(d) in relation to protection and indemnity risks in respect of the relevant Ship's full value and tonnage;
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(e) on such terms as shall from time to time be approved in writing by the Agent (including, without limitation, a blocking and trapping clause); and
(f) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations which are members of the International Group of Protection and Indemnity Associations.
13.4 Further protections for the Creditor Parties
In addition to the terms set out in Clause 13.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances shall:
(a) subject always to paragraph (b), name that Borrower as the sole named assured unless the interest of every other named assured is limited:
(i) in respect of any obligatory insurances for hull and machinery and war risks;
(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and
(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;
(b) name (or be amended to name) the Security Trustee as mortgagee for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
(c) name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;
(d) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set‑off, counterclaim or deductions or condition whatsoever;
(e) provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Security Trustee in respect of any rights or interests (secured or not) held by or available to the Security Trustee in respect of the Secured Liabilities, until the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than any Borrower or any Creditor Party) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;
(f) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee;
(g) provide that the Security Trustee may make proof of loss if that Borrower fails to do so; and
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(h) provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Security Trustee, or if any obligatory insurance is allowed to lapse for non‑payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Security Trustee for 30 days (or 7 days in the case of war risks) after receipt by the Security Trustee of prior written notice from the insurers of such cancellation, change or lapse.
13.5 Renewal of obligatory insurances
Each Borrower shall:
(a) at least 14 days before the expiry of any obligatory insurance:
(i) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that insurance and of the proposed terms of renewal; and
(ii) in case of any substantial change in insurance cover, obtain the Lenders' approval to the matters referred to in paragraph (i) above;
(b) at least 7 days before the expiry of any obligatory insurance, renew the insurance; and
(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.
13.6 Copies of policies; letters of undertaking
Each Borrower shall ensure that all approved brokers provide the Security Trustee with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters or undertaking in a form required by the Lenders and including undertakings by the approved brokers that:
(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4 (Further protections for the Creditor Parties);
(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
(d) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
(e) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by it under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies or, any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non‑payment of such
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premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.
13.7 Copies of certificates of entry
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provides the Security Trustee with:
(a) a certified copy of the certificate of entry for that Ship; and
(b) a letter or letters of undertaking in such form as may be required by the Lenders; and
(c) where required to be issued under the terms of insurance/indemnity provided by that Borrower's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Borrower in relation to that Ship in accordance with the requirements of such protection and indemnity association; and
(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
13.8 Deposit of original policies
Each Borrower shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
13.9 Payment of premiums
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.
13.10 Guarantees
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
13.11 Restrictions on employment
No Borrower shall employ the Ship owned by it, nor permit her to be employed, outside the cover provided by any obligatory insurances.
13.12 Compliance with terms of insurances
No Borrower shall either do or omit to do (or permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable thereunder repayable in whole or in part; and in particular:
(a) each Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in paragraph (c) of Clause 13.6 (Copies of policies; letters of undertaking)
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above) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
(b) no Borrower shall make any changes relating to the classification or the Classification Society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;
(c) each Borrower shall make all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
(d) no Borrower shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances (including but not limited to any applicable laws and Sanctions), without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
13.13 Alteration to terms of insurances
No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Trustee.
13.14 Settlement of claims
No Borrower shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
13.15 Provision of copies of communications
Each Borrower shall provide the Security Trustee, at the time of each such communication, copies of all written communications in case of, but not limited to, an Event of Default, Total Loss or Major Casualty between that Borrower and:
(a) the approved brokers; and
(b) the approved protection and indemnity and/or war risks associations; and
(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:
(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
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13.16 Provision of information
In addition, each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) requests for the purpose of:
(a) obtaining or preparing any report from an independent marine insurance broker appointed by the Agent as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.17 (Mortgagee's interest and additional perils insurances) below or dealing with or considering any matters relating to any such insurances,
and that Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a) above.
13.17 Mortgagee's interest and additional perils insurances
The Security Trustee shall effect, maintain and renew all or any of the following insurances in such amounts, on such terms, through such insurers and generally in such manner as the Lenders may from time to time consider appropriate:
(a) a mortgagee's interest marine insurance in relation to the Ships in an amount equal to 110 per cent. of the Loan, providing for the indemnification of the Creditor Parties for any losses under or in connection with any Finance Document which directly or indirectly result from loss of or damage to a Ship or a liability of that Ship or of the Borrower owning that Ship, being a loss or damage which is prima facie covered by an obligatory insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of an allegation concerning:
(i) any act or omission on the part of that Borrower, of any operator, charterer, manager or sub-manager of that Ship or of any officer, employee or agent of that Borrower or of any such person, including any breach of warranty or condition or any non-disclosure relating to such obligatory insurance;
(ii) any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of that Borrower, any other person referred to in paragraph (i) above, or of any officer, employee or agent of that Borrower or of such a person, including the casting away or damaging of that Ship and/or that Ship being unseaworthy; and/or
(iii) any other matter capable of being insured against under a mortgagee's interest marine insurance policy whether or not similar to the foregoing;
(b) a mortgagee's interest additional perils policy in relation to the Ships in an amount equal to 110 per cent. of the Loan, providing for the indemnification of the Security Trustee against, among other things, any possible losses or other consequences of any Environmental Claim, including the risk of expropriation, arrest or any form of detention of a Ship, the imposition of any Security Interest over that Ship and/or any other matter capable of being insured against under a mortgagee's interest additional perils policy whether or not similar to the foregoing,
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and the Borrowers shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.
13.18 Review of insurance requirements
The Lenders shall be entitled to review the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Lenders, significant and capable of affecting any Borrower or any Ship and its or their Insurances (including, without limitation, changes in the availability or the cost of Insurances or the risks to which the Borrower owning that Ship may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrowers, such review to be carried out at the Agent's request, at any time during the Security Period if the Agent (acting on the instructions of the Lenders) considers necessary (the reasonable fees of the insurance consultants to conduct such review shall be deducted from the Earnings Accounts (or any of them) and each Borrower hereby agrees to arrange the transfer of monies from its Earnings Account in order to pay such fees) Provided that the Borrowers shall not be required to pay the fees of the insurance consultants to conduct such review more often than once a year unless an Event of Default has occurred and is continuing, or unless a change in the material terms of the cover of any Ship has occurred.
13.19 Modification of insurance requirements
The Security Trustee shall notify the Borrowers of any proposed modification under Clause 13.18 (Review of insurance requirements) to the requirements of this Clause 13 (Insurance) which the Lenders consider appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 (Insurance) and shall bind the Borrowers accordingly.
13.20 Compliance with mortgagee's instructions
The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Borrower owning that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.19 (Modification of insurance requirements).
14 Ship covenants
14.1 General
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 (Ship covenants), at all times during the Security Period, except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit in writing.
14.2 Ship's name and registration
Each Borrower shall keep the Ship owned by it registered in its name under an Approved Flag; shall not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship without
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the prior written consent of the Agent, which shall not be unreasonably withheld, and shall remain acceptable to the Agent at all times.
14.3 Repair and classification
Each Borrower shall keep the Ship owned by it in a good, safe and seaworthy condition and state of repair:
(a) consistent with first‑class ship ownership and management practice;
(b) so as to maintain the highest class with a Classification Society which is a member of IACS acceptable to the Agent (acting with the authorisation of the Lenders) free of overdue recommendations and conditions of such Classification Society;
(c) so as to comply with all laws and regulations applicable to vessels registered at ports of the Approved Flag State or to vessels trading to any jurisdiction to which such Ship may trade from time to time, including but not limited to the ISM Code and the ISM Code Documentation and the ISPS Code; and
(d) each Borrower shall use its commercially reasonably efforts to allow the Agent (or its agents), at any time, to inspect the original class and related records of that Borrower and the Ship owned by it electronically (through the Classification Society directly) and to take copies of such records.
14.4 Modification
No Borrower shall make any modification or repairs to, or replacement of, the Ship or equipment installed on the Ship owned by it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
14.5 Removal of parts
No Borrower shall remove any material part of the Ship owned by it, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on the relevant Ship the property of that Borrower and subject to the security constituted by the relevant Mortgage Provided that each Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to its Ship.
14.6 Surveys
Each Borrower shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Lenders provide the Security Trustee, with copies of all survey reports.
14.7 Technical Survey
Without prejudice to each Borrower's obligations pursuant to Clause 14.6 (Surveys), each Borrower promptly following the request of the Agent will, submit the Ship for a technical survey by an independent surveyor or surveyors appointed by the Agent (provided such technical survey does not interfere with the ordinary trading of the Ship owned by it). All fees
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and expenses incurred in relation to the appointment of the surveyor or surveyors and the preparation and issue of all technical reports pursuant to this Clause 14.7 (Technical Survey) shall be for the account of the Borrowers.
14.8 Inspection
Each Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all times (but in any event without interfering with the ordinary trading of the Ship owned by it) to inspect its condition or to satisfy themselves about proposed or executed repairs, shall afford all proper facilities for such inspections and pay to the Agent the amount of all fees, costs and expenses incurred in respect of such inspections Provided that so long as no Event of Default shall have occurred that Borrower shall not be obliged to pay any fees and expenses in respect of more than one inspection of its Ship in any calendar year.
14.9 Prevention of and release from arrest
Each Borrower shall promptly discharge:
(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;
(b) all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and
(c) all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,
and, forthwith upon receiving notice of the arrest of that Ship, or of her detention in exercise or purported exercise of any lien or claim, that Borrower shall procure her release by providing bail or otherwise as the circumstances may require.
14.10 Compliance with laws etc.
Each Borrower shall:
(a) comply, or procure compliance with all laws, rules or regulations: (i) relating to its business generally and (ii) relating to the Ship owned by it, its ownership, employment, operation, management and registration, including, but not limited to, the ISM Code (including, for the avoidance of doubt, by an Approved Manager), the ISPS Code, all Environmental Laws, all Sanctions and the laws of the Approved Flag State;
(b) obtain, comply with and do all that is necessary to maintain in full force and effect any environmental approvals;
(c) without limiting paragraph (a) above, not employ any Ship nor allow its employment, operation or management in any manner contrary to any law, regulation or rule, including, but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions; and
(d) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit it to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Lenders has been given
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and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lenders may require.
14.11 Provision of information
Each Borrower shall promptly provide the Security Trustee with any information which the Lenders request regarding:
(a) the Ship owned by it, its employment, position and engagements;
(b) the Earnings and payments and amounts due to that Ship's master and crew of that Ship;
(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;
(d) any towages and salvages;
(e) any intended dry-docking of that Ship;
(f) that Borrower's, an Approved Manager's compliance or the compliance of that Ship with the ISM Code and the ISPS Code; and
(g) any other information which the Creditor Parties (or any of them) may reasonably request,
and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship, and copies of that Borrower's or any Approved Manager's Document of Compliance or any other document issued under ISM Code Documentation.
14.12 Notification of certain events
Each Borrower shall immediately notify the Security Trustee by letter of:
(a) any casualty which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or Classification Society or by any competent authority which is not complied with in accordance with its terms;
(d) any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on the Ship or its Earnings or any requisition of such Ship for hire;
(e) any dry docking of the Ship owned by it;
(f) any Environmental Claim made against that Borrower or in connection with the Ship owned by it, or any Environmental Incident;
(g) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with the Ship owned by it; or
(h) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
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and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, any Approved Manager's or any other person's response to any of those events or matters.
14.13 Restrictions on chartering, appointment of managers etc.
No Borrower shall, in relation to the Ship owned by it:
(a) let that Ship on demise charter for any period without the prior written consent of the Agent, acting with the authorisation of the Lenders;
(b) enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months except as the Agent may consent, such consent not to be unreasonably withheld;
(c) enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
(d) charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
(e) appoint a manager of that Ship other than an Approved Manager or agree to any material alteration to the terms of an Approved Manager's appointment which could lead to an Event of Default ("material alterations" to include, without limitation, alterations concerning fees, duration and parties);
(f) de‑activate or lay up that Ship; or
(g) put that Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or her Earnings for the cost of such work or otherwise.
14.14 Notice of Mortgage
Each Borrower shall keep the Mortgage relative to its Ship registered against its Ship as a valid first priority or as the case may be preferred mortgage, carry on board that Ship a certified copy of that Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Trustee.
14.15 Sharing of Earnings
No Borrower shall:
(a) enter into any agreement or arrangement for the sharing of any Earnings;
(b) enter into any agreement or arrangement for the postponement of any date on which any Earnings are due; or for the reduction of the amount of any Earnings or otherwise for the release or adverse alteration of any right of that Borrower to any Earnings; or
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(c) enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any Earnings other than customary profit sharing arrangements in time charter contracts.
14.16 Time Charter Assignment
If a Borrower enters into any Charterparty, that Borrower shall, at the request of the Agent, execute in favour of the Security Trustee a Charterparty Assignment, and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Part A and 1 of Part B of Schedule 3 (Condition Precedent Documents) hereof as the Agent may require.
14.17 ISM Code, ISPS Code compliance and Environmental Laws
All requirements of the ISM Code, ISPS Code and Environmental Laws as they relate to each Borrower, an Approved Manager, if and when applicable, the Ship owned by the relevant Borrower shall be complied with at all times.
14.18 Poseidon Principles
Each Borrower shall, upon the request of any Lender and at the cost of the Borrowers, on or before 31st July in each calendar year, supply or procure the supply by the relevant Classification Society (as specified by the relevant Lender) to the Agent of all information necessary in order for any Lender to comply with its obligations under the Poseidon Principles in respect of the preceding year, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance, in each case relating to the Ship owned by it for the preceding calendar year provided always that, for the avoidance of doubt, such information shall be "Confidential Information" for the purposes of Clause 30.1 (Confidential Information) but the Borrowers acknowledge that, in accordance with the Poseidon Principles, such information will form part of the information published regarding the relevant Lender's portfolio climate alignment.
15 Security Cover
15.1 Minimum required security cover
Clause 15.2 (Provision of additional security; prepayment) applies if the Agent notifies the Borrowers that the Security Cover Ratio is below 125 per cent.
15.2 Provision of additional security; prepayment
(a) If the Agent serves a notice on the Borrowers under Clause 15.1 (Minimum required security cover), the Borrowers shall prepay such part (at least) of the Loan as will eliminate the shortfall on or before the date falling 1 month after the date on which the Agent's notice is served under Clause 15.1 (Minimum required security cover) (the "Prepayment Date") unless at least 1 Business Day before the Prepayment Date it has provided, or ensured that a third party has provided, additional security which, in the sole discretion of the Majority Lenders, has a net realisable value at least equal to the shortfall.
(b) In this Clause 15.2 (Provision of additional security; prepayment) "security" means a Security Interest over an asset or assets (whether securing a Borrower's liabilities under the Finance Documents or a guarantee in respect of those liabilities), or a guarantee, letter of credit or
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other security (including any cash pledged to the Security Trustee) in respect of that Borrower's liabilities under the Finance Documents.
15.3 Requirement for additional documents
The Borrowers shall not be deemed to have complied with Clause 15.2 (Provision of additional security; prepayment) above until the Agent has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 3, 4 and 5 of Schedule 3 (Condition Precedent Documents) and such legal opinions in terms acceptable to the Majority Lenders from such lawyers as they may select.
15.4 Valuation of Ship
The market value of a Ship at any date is that shown in a valuation prepared:
(a) as at a date not more than 30 days previously;
(b) by an Approved Broker selected by the Borrowers and appointed by the Agent (unless the Borrowers have not nominated an Approved Broker within five Business Days of the Agent's request in which case the Agent will be entitled to select and appoint an Approved Broker);
(c) with or without physical inspection of that Ship (as the Agent may require); and
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment (as the Agent may require).
15.5 Value of additional security
The net realisable value of any additional security which is provided under Clause 15.1 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.4 (Valuation of Ship). In the event a Security Interest is granted in favour of the Security Trustee over a dollar cash deposit, such cash shall be valued at par.
15.6 Valuations binding
Any valuation under Clause 15.2 (Provision of additional security; prepayment), 15.4 (Valuation of Ship) or 15.5 (Value of additional security) shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority Lenders make of a security which does not consist of or include a Security Interest.
15.7 Provision of information
The Borrowers shall promptly provide the Agent and any Approved Broker or expert acting under Clause 15.4 (Valuation of Ship) or 15.5 (Value of additional security) with any information which the Agent or the Approved Broker or expert may request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the Approved Broker or the Majority Lenders (or the expert appointed by them) consider prudent.
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15.8 Payment of valuation expenses
Without prejudice to the generality of the Borrowers' obligations under Clauses 20.4 (Costs of negotiation, preparation etc.) and 20.5 (Costs of variations, amendments, enforcement etc.), the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause Provided that so long as no Event of Default shall have occurred and is continuing and so long as all valuations of each Ship commissioned by the Agent for the purposes of this Clause 15 (Security Cover) confirm that the Borrowers have satisfied the test in Clause 15.1 (Minimum required security cover), no Borrower shall be obliged to pay the fees and expenses in respect of more than one valuation or (as applicable) one set of valuations of the Ship owned by it in any calendar year.
15.9 Frequency of valuations
The Borrowers acknowledge and agree that the Agent may commission valuation(s) of any Ship at such times as the Agent may reasonably request (including, without limitation, on the occurrence of any breach of obligation under this Agreement, any Finance Document or any other relevant documentation in connection therewith) and, in any event not less than once in any calendar year, on 31 December of the relevant year.
15.10 Release of additional security
If at any time the Security Trustee holds additional security provided under this Clause 15 (Security Cover), the Borrowers may request, at their own cost and expense, the release of such additional security provided that:
(a) the Borrowers can demonstrate to the Agent's satisfaction that the minimum required security cover, disregarding the value of that additional security, is equal to or above the minimum percentage required pursuant to Clause 15.1 (Minimum required security cover) for a consecutive period of no less than 90 days; and
(b) no Event of Default has occurred and is continuing or would result from the release of such additional security.
16 Payments and Calculations
16.1 Currency and method of payments
All payments to be made:
(a) by the Lenders to the Agent; or
(b) by any Borrower to the Mandated Lead Arranger, the Agent, the Security Trustee or any Lender,
under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
(i) by not later than 11.00 a.m. (New York City time) on the due date;
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(ii) in same day dollar funds settled through the New York Clearing House Interbank Payments System (or in such other dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
(iii) to the account of the Agent, as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and
(iv) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.
16.2 Payment on non-Business Day
If any payment by any Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
(a) the due date shall be extended to the next succeeding Business Day; or
(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
16.3 Basis for calculation of periodic payments
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practices.
16.4 Distribution of payments to Creditor Parties
Subject to Clauses 16.5 (Permitted deductions by Agent), 16.6 (Agent only obliged to pay when monies received) and 16.7 (Refund to Agent of monies not received):
(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
16.5 Permitted deductions by Agent
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
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16.6 Agent only obliged to pay when monies received
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrowers or any Lender any sum which the Agent is expecting to receive for remittance or distribution to the Borrowers or that Lender until the Agent has satisfied itself that it has received that sum.
16.7 Refund to Agent of monies not received
If and to the extent that the Agent makes available a sum to the Borrowers or a Lender, without first having received that sum, the Borrowers or (as the case may be) the Lender concerned shall, on demand:
(a) refund the sum in full to the Agent; and
(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.
16.8 Agent may assume receipt
Clause 16.7 (Refund to Agent of monies not received) shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
16.9 Creditor Party accounts
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
16.10 Agent's memorandum account
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
16.11 Accounts prima facie evidence
If any accounts maintained under Clauses 16.9 (Creditor Party accounts) and 16.10 (Agent's memorandum account) show an amount to be owing by a Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.
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17 Application of Earnings
17.1 Payment of Earnings
Each of the Borrowers undertakes with each Creditor Party that, throughout the Security Period (subject only to the provisions of the General Assignment to which it is party):
(a) it shall maintain the Accounts opened in its name (whether individually or jointly) with the Account Bank;
(b) it shall ensure that all Earnings of the Ship owned by it are paid to the Earnings Account for that Ship; and
(c) the Minimum Liquidity amounts required to be maintained pursuant to Clause 11.19 (Minimum Liquidity) shall be maintained in the relevant Earnings Account of the Ship.
17.2 Monthly retentions
Each of the Borrowers undertakes with each Creditor Party to ensure that, on and from the date falling one month after the Drawdown Date and at monthly intervals thereafter during the Security Period, there are transferred to the Retention Account out of the Earnings received in the Earnings Accounts during the preceding month:
(a) one-third of the amount of the relevant Repayment Instalment falling due under Clause 8.1 (Amount of repayment instalments) on the next Repayment Date; and
(b) the relevant fraction of the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest under this Agreement,
and the Borrowers irrevocably authorise the Agent to make those transfers if the Borrowers fail to do so.
The "relevant fraction", in relation to paragraph (b), is a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period (or if the current Interest Period in respect of the Loan ends after the next due date for payment of interest under this Agreement, the number of months from the later of the commencement of the current Interest Period in respect of the Loan or the last due date for payment of interest to the next due date for payment of interest in respect of the Loan under this Agreement).
17.3 Shortfall in Earnings
If the aggregate Earnings received in an Earnings Account are insufficient at any time for the required amount to be transferred to the Retention Account under Clause 17.2 (Monthly retentions), the Borrowers shall immediately pay the amount of the insufficiency into the Retention Account.
17.4 Application of retentions
Until an Event of Default or a Potential Event of Default occurs, the Agent shall, to the extent there are sufficient funds standing to the credit of the Retention Account, on each Repayment Date and on each due date for the payment of interest under this Agreement distribute to the
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Lenders in accordance with Clause 16.4 (Distribution of payments to Creditor Parties) so much of the then balance on the Retention Account as equals:
(a) the Repayment Instalment due on that Repayment Date pursuant to Clause 8.1 (Amount of repayment instalments); or
(b) the amount of interest in respect of the Loan payable on that Interest Payment Date,
in discharge of the Borrowers' liability for that Repayment Instalment or that interest.
17.5 Application of Earnings
Each Borrower undertakes with the Lenders that money from time to time credited to, or for the time being standing to the credit of, its Earnings Account shall (i) unless and until an Event of Default shall have occurred (whereupon the provisions of Clause 18.1 (Normal order of application) shall be and become applicable) or (ii) unless otherwise agreed in writing between the Borrowers and the Agent, be available for application in the following manner:
(a) in or towards making payments of all amounts due and payable by the Borrowers under this Agreement (other than payments of principal and interest);
(b) in or towards satisfaction of all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents;
(c) in or towards satisfaction of the Loan;
(d) in or towards making payments of all fees due to an Approved Manager and thereafter meeting the costs and expenses from time to time incurred by or on behalf of a Borrower in connection with the operation of the Ship owned by it; and
(e) as to any surplus from time to time arising on an Earnings Account following application as aforesaid, to be paid to the Borrower owning that Ship or to whomsoever it may direct.
17.6 Location of account
Each Borrower shall promptly:
(a) comply with any requirement of the Agent as to the location or re‑location of its Earnings Account; and
(b) execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Accounts.
17.7 Debits for expenses etc.
The Agent shall be entitled (but not obliged) from time to time to debit the Earnings Accounts without prior notice in order to discharge any amount due and payable under Clause 20 (Fees and Expenses) or 21 (Indemnities) to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 (Fees and Expenses) or 21 (Indemnities).
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17.8 Borrowers' obligations unaffected
The provisions of this Clause 17 (Application of Earnings) (as distinct from a distribution effected under Clause 17.4 (Application of retentions)) do not affect:
(a) the liability of the Borrowers to make payments of principal and interest on the due dates; or
(b) any other liability or obligation of the Borrowers or any Security Party under any Finance Document.
17.9 Restriction on withdrawal
During the Security Period no sum may be withdrawn by a Borrower from the Retention Account.
18 Application of Receipts
18.1 Normal order of application
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following proportions:
(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Agent and the Security Trustee under the Finance Documents other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by any Borrower under Clauses 20 (Fees and Expenses), 21 (Indemnities) and 22 (No Set-off or Tax Deduction) of this Agreement or by any Borrower or any Security Party under any corresponding or similar provision in any other Finance Document);
(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest due and payable to the Creditor Parties under the Finance Documents; and
(iii) thirdly, in or towards satisfaction of the Loan;
(b) SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers (or any of them), the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this paragraph (a) of Clause 18.1 (Normal order of application);
(c) THIRDLY: any expenses of the Borrowers or the Ships then due and payable;
(d) FOURTHLY: in or towards satisfaction of any amounts representing management fees then due and payable by the Borrowers (or any of them) to an Approved Manager in connection with the Ships; and
(e) FIFTHLY: any surplus shall be paid to the Borrowers (or any of them) or to any other person appearing to be entitled to it.
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18.2 Variation of order of application
The Agent may, with the authorisation of the Majority Lenders by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 18.1 (Normal order of application) either as regards a specified sum or sums or as regards sums in a specified category or categories.
18.3 Notice of variation of order of application
The Agent may give notices under Clause 18.2 (Variation of order of application) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
18.4 Appropriation rights overridden
This Clause 18 (Application of Receipts) and any notice which the Agent gives under Clause 18.2 (Variation of order of application) shall override any right of appropriation possessed, and any appropriation made, by any Borrower or any Security Party.
19 Events of Default
19.1 Events of Default
An Event of Default occurs if:
(a) the Borrowers or any of them or any Security Party fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document; or
(b) any breach occurs of Clause 9.2 (Waiver of conditions precedent), 10.15 (No money laundering; anti-bribery), 10.18 (Sanctions), 11.2 (Title and negative pledge), 11.3 (No disposal of assets), 11.18 (Sanctions), 11.19 (Minimum Liquidity), 12.2 (Maintenance of status), 12.3 (Negative undertakings), 13.2 (Maintenance of obligatory insurances), 13.3 (Terms of obligatory insurances), 14.2 (Ship's name and registration), 14.3 (Repair and Classification), 15.2 (Provision of additional security; prepayment) or clause 12.3 (negative undertakings) of the Corporate Guarantee; or
(c) any breach by the Borrowers or any of them or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b) above) if, in the opinion of the Majority Lenders, such default is capable of remedy, and such default continues unremedied 14 days after the earlier of (i) written notice from the Agent requesting action to remedy the same and (ii) any Borrower becoming aware of such breach; or
(d) (subject to any applicable grace period specified in the Finance Document) any breach by the Borrowers or any of them or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a), (b) or (c) above); or
(e) any representation, warranty or statement made or repeated by, or by an officer of, any Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or
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(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person (for an amount exceeding, in the case of any Relevant Person other than a Borrower $20,000,000 (or the equivalent in any other currency) in aggregate):
(i) any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or
(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default unless the Relevant Person is contesting the declaration of an event of default or of the Financial Indebtedness becoming due and payable in good faith and on substantial grounds by appropriate proceedings and adequate reserves have been set aside for its payment if such proceedings fail; or
(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or
(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or
(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
(g) any arrest of a Ship or its detention in the exercise or the purported exercise of any lien or claim unless it is redelivered to the full control of the relevant Borrower within 30 days of such arrest or detention; or
(h) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person becomes, in the reasonable opinion of the Lenders, unable to pay its debts as they fall due; or
(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress which in the case of any Relevant Person other than a Borrower, exceeds a sum of, or sums aggregating, $20,000,000 or more or the equivalent in another currency and such execution, attachment, arrest, sequestration or distress is not withdrawn or discharged within thirty (30) days other than an arrest or detention of a Ship referred to in paragraph (g) of Clause 19.1 (Events of Default); or
(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or
(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person
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or by the directors or officers of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or
(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or
(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members, shareholders, officers or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than a Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 60 days of being made or presented, or (bb) within 60 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
(ix) a Relevant Person or its directors or officers take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
(x) any meeting of the members, shareholders or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with
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or without such a meeting) the members, shareholders, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or
(xi) in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the reasonable opinion of the Majority Lenders is similar to any of the foregoing; or
(i) any Borrower or any Security Party ceases or suspends carrying on its business or a part of its business which, in the reasonable opinion of the Majority Lenders, is material in the context of this Agreement Provided that no Event of Default will occur under this paragraph (i) if the Security Party is an Approved Manager and the Borrowers replace such Approved Manager by another Approved Manager within 30 days from the date of such event; or
(j) it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i) for any Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
(ii) for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
(k) any official consent necessary to enable any Borrower to own, operate or charter the Ship owned by it or to enable any Borrower or any Security Party to comply with any provision which the Majority Lenders reasonably consider material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled, unless the relevant Borrower contests any denial, expiration or revocation (other than with respect to a Finance Documents) and on the condition that, in the reasonable opinion of the Majority Lenders (i) there are real prospects of such contest being successfully granted/upheld by the relevant Borrower (ii) such contest being made in good faith; or
(l) it appears to the Majority Lenders that, without their prior written consent, after the date of this Agreement, there is a Change of Control; or
(m) any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
(n) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
(o) any other event occurs or any other circumstances arise or develop including, without limitation:
(i) a material adverse change in the business, condition (financial or otherwise), operation, state of affairs or prospects of the Corporate Guarantor or the Group; or
(ii) any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person,
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in the light of which the Majority Lenders reasonably consider that there is a significant risk that any Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due or the enforceability of any Finance Document may be adversely affected.
19.2 Actions following an Event of Default
On, or at any time after, the occurrence of an Event of Default, which is continuing:
(a) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
(i) serve on the Borrowers a notice stating that all or part of the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are terminated; and/or
(ii) serve on the Borrowers a notice stating that all or part of the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
(iii) take any other action which, as a result of the Event of Default or any notice served under sub-paragraph (i) or (ii) above, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or
(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under sub-paragraph (i) or (ii) of paragraph (a) above, the Security Trustee, the Agent and/or the Majority Lenders are entitled to take under any Finance Document or any applicable law.
19.3 Termination of Commitments
On the service of a notice under sub-paragraph (i) of paragraph (a) of Clause 19.2 (Actions following an Event of Default), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall terminate.
19.4 Acceleration of Loan
On the service of a notice under sub-paragraph (ii) of paragraph (a) of Clause 19.2 (Actions following an Event of Default), the Loan, all accrued interest and all other amounts accrued or owing from the Borrowers or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
19.5 Multiple notices; action without notice
The Agent may serve notices under sub-paragraphs (i) and (ii) of paragraph (a) of Clause 19.2 (Actions following an Event of Default) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in that Clause if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
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19.6 Notification of Creditor Parties and Security Parties
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2 (Actions following an Event of Default); but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrowers or any Security Party with any form of claim or defence.
19.7 Creditor Party's rights unimpaired
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 (Interests of Lenders several).
19.8 Exclusion of Creditor Party Liability
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrowers or a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been caused by the gross negligence or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.
19.9 Relevant Persons
In this Clause 19 (Events of Default), a "Relevant Person" means a Borrower, a Security Party (excluding an Approved Manager), and any company which is a subsidiary of a Security Party (excluding an Approved Manager) or of which any Borrower is a subsidiary.
19.10 Interpretation
In paragraph (f) of Clause 19.1 (Events of Default) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in paragraph (g) of Clause 19.1 (Events of Default) "petition" includes an application.
20 Fees and Expenses
20.1 Agency fee
The Borrowers shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
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20.2 Upfront fee
The Borrowers shall pay to the Agent (for the account of each Lender) an upfront fee in the amount and at the times agreed in a Fee Letter.
20.3 Structuring fee
The Borrowers shall pay to the Arranger (for its own account) a structuring fee in the amount and at the times agreed in a Fee Letter.
20.4 Costs of negotiation, preparation etc.
The Borrowers shall pay to the Agent, within ten calendar days' from its demand, the amount of all documented expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution, printing or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document (including, without limitation, out of pocket expenses, legal fees and any related VAT), even if the transaction is not completed for any reason whatsoever.
20.5 Costs of variations, amendments, enforcement etc.
The Borrowers shall pay to the Agent, within ten calendar days' from its demand, the amount of all documented expenses incurred by a Creditor Party in connection with:
(a) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made (including, without limitation, any amendment or proposal for an amendment contemplated in Clause 27.4 (Changes to reference rates));
(b) any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
(c) the valuation of any security provided or offered under Clause 15 (Security Cover) or any other matter relating to such security;
(d) where the Agent, in its absolute opinion, considers that there has been a material change to the insurances in respect of a Ship, the review of the insurances of a Ship pursuant to Clause 13.18 (Review of insurance requirements);
(e) the opinions of the independent insurance consultant referred to in paragraph 6 of Part B, Schedule 3 (Condition Precedent Documents); and
(f) any step taken by any Lender concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.
20.6 Documentary taxes
The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any liabilities,
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claims losses and expenses resulting from any failure or delay by the Borrowers to pay such a tax.
20.7 Certification of amounts
A notice which is signed by two officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 (Fees and Expenses) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
21 Indemnities
21.1 Indemnities regarding borrowing and repayment of Loan
The Borrowers shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
(a) the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
(b) any failure (for whatever reason) by the Borrowers to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 5.3 (Default Interest)); and
(c) the occurrence and/or continuance of an Event of Default and/or the acceleration of repayment of the Loan under Clause 19 (Events of Default),
and in respect of any tax (other than tax on its overall net income or a FATCA Deduction) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
21.2 Miscellaneous indemnities
The Borrowers shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind ("liability items") which may be made or brought against, or incurred by, a Creditor Party, in any country, in relation to:
(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; and
(b) any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created (or intended to be created) by a Finance Document,
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other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.
21.3 Extension of indemnities; environmental indemnity
Without prejudice to its generality, Clause 21.2 (Miscellaneous indemnities) covers:
(a) any matter which would be covered by Clause 21.2 (Miscellaneous indemnities) if any of the references in that Clause to a Lender were a reference to the Agent or (as the case may be) to the Security Trustee; and
(b) any liability items which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment, the ISM Code, the ISPS Code or any Environmental Law.
21.4 Currency indemnity
If any sum due from a Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:
(a) making or lodging any claim or proof against a Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
(b) obtaining an order or judgment from any court or other tribunal; or
(c) enforcing any such order or judgment,
the Borrowers shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 21.4 (Currency indemnity), the "available rate of exchange" means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 21.4 (Currency indemnity) creates a separate liability of each Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
21.5 Certification of amounts
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 (Indemnities) and which indicates (without necessarily specifying a detailed breakdown of the amounts due) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
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21.6 Sums deemed due to a Lender
For the purposes of this Clause 21 (Indemnities), a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
21.7 Sanctions
(a) The Borrowers shall, within three (3) Business Days of demand by a Creditor Party, indemnify each Creditor Party against any cost, loss or liability incurred by it as a result of any civil penalty or fine against, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with the defence thereof by, the Agent or any Lender as a result of conduct of the Borrowers or any Security Party or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions.
(b) The indemnity in paragraph (a) of Clause 21.7 (Sanctions) above shall cover any losses incurred by each Creditor Party in any jurisdiction arising or asserted under or in connection with any law relating to any Sanctions.
22 No Set-off or Tax Deduction
22.1 No deductions
All amounts due from the Borrowers under a Finance Document shall be paid:
(a) without any form of set‑off, cross-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.
22.2 Grossing-up for taxes
If a Borrower is required by law to make a tax deduction from any payment:
(a) that Borrower shall notify the Agent as soon as it becomes aware of the requirement;
(b) that Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and
(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.
22.3 Evidence of payment of taxes
Within 1 month after making any tax deduction, the Borrowers concerned shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.
22.4 Exclusion of tax on overall net income
In this Clause 22 (No Set-off or Tax Deduction) "tax deduction" means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income or a FATCA Deduction.
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22.5 FATCA information
(a) Subject to paragraph (c) below, each party to the Finance Documents shall, within 5 Business Days of a reasonable request by another party to the Finance Documents:
(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 as that other party reasonably requests for the purposes of that other party's compliance with FATCA; and
(iii) supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation or exchange of information regime;
(b) if a party to any Finance Document confirms to another party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly;
(c) paragraph (a) above shall not oblige any Creditor Party, and sub-paragraph (iii) of paragraph (a) above shall not oblige any other party to a Finance Document, to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any fiduciary duty; or
(iii) any duty of confidentiality;
(d) if a party to any Finance Document fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraph (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information.
(e) If a Borrower is or becomes a US Tax Obligor or a FATCA FFI, it shall as soon as reasonably practicable inform the Agent of the same;
(f) Where the Agent reasonably believes that its obligations under FATCA require it, the relevant Borrower or the relevant Security Party shall provide the Agent, upon request, with a W-8 BEN-E form (or any successor form) or any other forms or documentation the Agent may reasonably require, as soon as reasonably practicable. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (f);
(g) If a Borrower is or becomes a US Tax Obligor or a FATCA FFI, or where the Agent reasonably believes that its obligations under FATCA require it, each Creditor Party shall, within 10 Business Days of the date of a request from the Agent supply to the Agent:
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(i) a withholding certificate on Form W-8 or Form W-9 (or any successor form) (as applicable); and/or
(ii) any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Creditor Party under FATCA,
the Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Creditor Party pursuant to this paragraph (g) to that Borrower or the relevant Security Party and shall be entitled to rely on any such withholding certificate, withholding statement, documentation, authorisations and waivers provided without further verification. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (g); and
(h) The Borrowers, each Security Party and each Creditor Party agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to paragraphs (f) to (g) above is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate, withholding statement, documentation, authorisations and waivers or promptly notify the Agent in writing of its legal inability to do so. The Agent shall, if applicable, provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers to the Borrowers or the relevant Security Party. The Agent shall not be liable for any action which it takes or refrains from taking under or in connection with this paragraph (h).
22.6 FATCA Deduction
(a) Each party to a Finance Document may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(b) Each party to a Finance Document shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the party to a Finance Document to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Creditor Parties.
23 Illegality, etc
23.1 Illegality
This Clause 23 (Illegality, etc) applies if a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become for that Lender or any affiliate of that Lender:
(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
(b) contrary to, or inconsistent with, any regulation,
for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
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23.2 Notification of illegality
The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 (Illegality) which the Agent receives from the Notifying Lender.
23.3 Prepayment; termination of Commitment
On the Agent notifying the Borrowers under Clause 23.2 (Notification of illegality), the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 (Illegality) as the date on which the notified event would become effective the Borrowers shall prepay the Notifying Lender's Contribution in accordance with Clause 8 (Repayment and Prepayment).
24 Increased Costs
24.1 Increased costs
(a) Each Borrower shall, within 3 Business Days of a demand by the Agent, pay for the account of a Creditor Party the amount of any Increased Costs incurred by that Creditor Party or any of its affiliates as a result of:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
(ii) compliance with any law or regulation made,
after the date of this Agreement.
(b) In this Agreement, "Increased Costs" means:
(i) a reduction in the rate of return from the Loan or on a Creditor Party's (or its affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Creditor Party or any of its affiliates to the extent that it is attributable to that Creditor Party having entered into its Commitment or funding or performing its obligations under any Finance Document and, for the avoidance of doubt, includes any Increased Costs incurred or suffered by a Creditor Party or any of its affiliates as a result of or with connection to Basel III, CRD IV or CRR,
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (aa) (or a parent company of it) or (bb) an item covered by the indemnity for tax in Clause 21.1 (Indemnities regarding borrowing and repayment of Loan) or by Clause 22 (No Set-off or Tax Deduction) or (cc) a FATCA Deduction.
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24.2 Increased cost claims
(a) A Creditor Party (the "Notifying Lender") intending to make a claim pursuant to Clause 24.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.
(b) Each Creditor Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
24.3 Notification to Borrowers of claim for increased costs
The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.2 (Increased cost claims).
24.4 Payment of increased costs
The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
24.5 Notice of prepayment
If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4 (Payment of increased costs), the Borrowers may give the Agent not less than 15 days' notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period and/or to cancel the Notifying Lender's Available Commitment.
24.6 Prepayment; termination of Commitment
A notice under Clause 24.5 (Notice of prepayment) shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:
(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
(b) on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin.
24.7 Application of prepayment
Clause 8 (Repayment and Prepayment) shall apply in relation to the prepayment.
25 Set-off
25.1 Application of credit balances
Each Creditor Party may without prior notice:
(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of a Borrower at any office in any country of that Creditor Party in or
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towards satisfaction of any sum then due from that Borrower to that Creditor Party under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a deposit of that Borrower;
(ii) convert or translate all or any part of a deposit or other credit balance into dollars; and
(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
25.2 Existing rights unaffected
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1 (Application of credit balances); and those rights shall be without prejudice and in addition to any right of set‑off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
25.3 Sums deemed due to a Lender
For the purposes of this Clause 25 (Set-off), a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
25.4 No Security Interest
This Clause 25 (Set-off) gives the Creditor Parties a contractual right of set off only and does not create any equitable charge or other Security Interest over any credit balance of any Borrower.
26 Transfers and Changes in Lending Offices
26.1 Transfer by Borrowers
No Borrower may, without the consent of the Agent, given on the instructions of all the Lenders:
(a) transfer any of its rights or obligations under any Finance Document; or
(b) enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.
26.2 Transfer by a Lender
(a) Subject to Clause 26.4 (Effective Date of Transfer Certificate), a Lender (the "Transferor Lender") may at any time, without the prior written consent of the Borrowers (but with a 15 days' prior notice), transfer and/or assign:
(i) its rights in respect of all or part of its Contribution; or
(ii) its obligations in respect of all or part of its Commitment; or
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(iii) a combination of (i) and (ii),
to another Lender, another branch, subsidiary or affiliate of a Lender, another first class international bank or financial institution, any member of the European System of Central Banks, a trust/fund managed by a Lender or an affiliate of a Lender, or to any (re)insurers and insurance companies or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in shipping loans, securities or other financial assets (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 4 (Transfer Certificate) with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.
However, any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.
26.3 Transfer Certificate, delivery and notification
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
(a) sign the Transfer Certificate on behalf of itself, each Borrower, the Security Parties, the Security Trustee and each of the other Lenders;
(b) on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and
(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
provided that the Agent is satisfied that the Transferee Lender has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such Transferee Lender.
26.4 Effective Date of Transfer Certificate
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 26.3 (Transfer Certificate, delivery and notification) on or before that date.
26.5 No transfer without Transfer Certificate
No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, any Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
26.6 Lender re-organisation; waiver of Transfer Certificate
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
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26.7 Effect of Transfer Certificate
A Transfer Certificate takes effect in accordance with English law as follows:
(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrowers or any Security Party had against the Transferor Lender;
(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;
(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro‑rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of any Borrower or any Security Party against the Transferor Lender had not existed;
(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 7.2 (Market disruption) and Clause 20 (Fees and Expenses), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
(g) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
The rights and equities of any Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross‑claim.
26.8 Maintenance of register of Lenders
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4 (Effective Date of Transfer Certificate)) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days prior notice.
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26.9 Reliance on register of Lenders
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
26.10 Authorisation of Agent to sign Transfer Certificates
The Borrowers, the Security Trustee and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
26.11 Registration fee
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,000 (and all costs, fees and expenses incidental to the transfer (including, but not limited to legal fees and expenses)) from the Transferor Lender or (at the Agent's option) the Transferee Lender.
26.12 Sub-participation; subrogation assignment
A Lender may sub‑participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrowers, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms, all or any part of those rights to an insurer or surety who has become subrogated to them.
26.13 Disclosure of information
Subject to Clause 26.4 (Effective Date of Transfer Certificate), a Lender may, disclose to a potential Transferee Lender or, to any sub‑participant any information which the Lender has received in relation to the Borrowers, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature only after a potential Transferee Lender or any sub‑participant to whom disclosure is made agrees to be bound by the terms of the confidentiality undertaking in this Clause 26.13 (Disclosure of information) by way of a confidentiality agreement in a form recommended by the LMA from time to time or acceptable to the Borrowers.
The Borrowers agree that the terms and conditions of this Agreement shall remain confidential and shall not, or shall procure that the Corporate Guarantor shall not, disclose (whether, without limitation, in writing or orally) to third parties (other than any disclosure to the Corporate Guarantor's unitholders, officers, employees or professional advisers provided that the person to whom disclosure is made agrees to be bound by the terms of the confidentiality undertaking in this Clause 26.13 (Disclosure of information) any information required to be disclosed by law, regulation or any governmental or competent regulatory authority (including without limitation, any securities exchange), provided that, to the extent reasonably practicable, the Corporate Guarantor shall inform the Agent on the proposed form, timing, nature and purpose of the disclosure) the existence of this Agreement or the terms and conditions contained herein without the prior written consent of the Lenders.
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26.14 Change of lending office
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
(a) the date on which the Agent receives the notice; and
(b) the date, if any, specified in the notice as the date on which the change will come into effect.
26.15 Notification
On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
26.16 Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause 26 (Transfers and Changes in Lending Offices), each Lender may without consulting with or obtaining consent from any Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
(a) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
(b) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;
except that no such charge, assignment or Security Interest shall:
(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or
(ii) require any payments to be made by the Borrowers or any Security Party other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
27 Variations and Waivers by majority lenders
27.1 Variations, waivers etc. by Lenders
Subject to Clause 27.2 (Variations, waivers etc. requiring agreement of all Lenders), a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrowers, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.
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27.2 Variations, waivers etc. requiring agreement of all Lenders
Subject to Clause 27.4 (Changes to reference rates), as regards the following, Clause 27.1 (Variations, waivers etc. by Lenders) applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender":
(a) a reduction in the Margin;
(b) a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;
(c) an increase in any Lender's Commitment;
(d) a change to the definition of "Majority Lenders";
(e) a change to Clause 3 (Position of the Lenders) or this Clause 27 (Variations and Waivers by majority lenders);
(f) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
(g) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.
27.3 Exclusion of other or implied variations
Except for a document which satisfies the requirements of Clauses 27.1 (Variations, waivers etc. by Lenders) and 27.2 (Variations, waivers etc. requiring agreement of all Lenders), no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by a Borrower or a Security Party of an obligation under a Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by the general law,
and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
27.4 Changes to reference rates
(a) Any amendment or waiver which relates to:
(i) providing for the use of a Replacement Reference Rate in place of (or in addition to) that Published Rate; and
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(ii)
(A) aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
(B) enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
(C) implementing market conventions applicable to that Replacement Reference Rate;
(D) providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
(E) adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Borrowers.
(b) If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) above within five Business Days (or such longer time period in relation to any request which the Borrowers and the Agent may agree) of that request being made:
(i) its Commitment or its participation in the Loan (as the case may be) shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan (as applicable) when ascertaining whether any relevant percentage of Total Commitments or the aggregate of participations in the Loan (as applicable) has been obtained to approve that request; and
(ii) its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
(c) In this Clause 27.4:
"Published Rate" means:
(a) SOFR; or
(b) Term SOFR for any Quoted Tenor.
"Quoted Tenor" means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.
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"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
"Replacement Reference Rate" means a reference rate which is:
(a) formally designated, nominated or recommended as the replacement for a Published Rate by:
(i) the administrator of that Published Rate; or
(ii) any Relevant Nominating Body,
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Reference Rate" will be the replacement under paragraph (ii) above;
(b) in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
(c) in the opinion of the Majority Lenders and the Borrowers, an appropriate successor or alternative to a Published Rate.
28 Notices
28.1 General
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
28.2 Addresses for communications
A notice shall be sent:
(a) to a Borrower: c/o Navios Shipmanagement Inc.
85 Akti Miaouli
Piraeus 185 38
Greece
Tel: +30 210 417 2050
Fax: +30 210 417 2070
E-mail: vpapaefthymiou@Navios.com; legal_corp@Navios.com,
for the attention of: Vassiliki Papaefthymiou
(b) to a Lender: At the address below its name in Schedule 1 or (as the case
may require) in the relevant Transfer Certificate.
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(c) to the Mandated Lead Arranger: Crédit Agricole Corporate and Investment Bank
12, place des Etats-Unis CS 70052
92547 Montrouge Cedex France
E-mail: clementine.costil@ca-cib.com;
romy.roussel@ca-cib.com;
soumaya.anouar@ca-cib.com,
Copy: nicoletta.panayiotopoulos@ca-cib.com; george.gkanasoulis@ca-cib.com;
aristea.thanasoula@ca-cib.com,
(d) to the Agent and the Crédit Agricole Corporate and Investment Bank
Security Trustee: 12, place des Etats-Unis CS 70052
92547 Montrouge Cedex France
E-mail: clementine.costil@ca-cib.com;
romy.roussel@ca-cib.com;
soumaya.anouar@ca-cib.com,
Copy: nicoletta.panayiotopoulos@ca-cib.com; george.gkanasoulis@ca-cib.com;
aristea.thanasoula@ca-cib.com,
(e) to the Account Bank: Crédit Agricole Corporate and Investment Bank
12, place des Etats-Unis
CS 70052
92547 Montrouge Cedex
France
E-mail: clementine.costil@ca-cib.com;
romy.roussel@ca-cib.com;
soumaya.anouar@ca-cib.com,
Copy: nicoletta.panayiotopoulos@ca-cib.com;
george.gkanasoulis@ca-cib.com;
aristea.thanasoula@ca-cib.com,
or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders and the Security Parties.
28.3 Effective date of notices
Subject to Clauses 28.4 (Service outside business hours) and 28.5 (Illegible notices):
(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
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(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
28.4 Service outside business hours
However, if under Clause 28.3 (Effective date of notices) a notice would be deemed to be served:
(a) on a day which is not a business day in the place of receipt; or
(b) on such a business day, but after 5 p.m. local time,
the notice shall (subject to Clause 28.5 (Illegible notices)) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
28.5 Illegible notices
Clauses 28.3 (Effective date of notices) and 28.4 (Service outside business hours) do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
28.6 Valid notices
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
28.7 English language
Any notice under or in connection with a Finance Document shall be in English.
28.8 Meaning of "notice"
In this Clause "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
29 Supplemental
29.1 Rights cumulative, non-exclusive
The rights and remedies which the Finance Documents give to each Creditor Party are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
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(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
29.2 Severability of provisions
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
29.3 Third party rights
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
29.4 Waiver of Banking Secrecy
The Borrowers hereby irrevocably authorise and give consent to the Agent and, each of its affiliates, and their respective subsidiaries, branches and representative offices and their respective directors, officers, employees and agents (the "Authorised Persons" and each an "Authorised Person"), to disclose and transmit to the Applicable Persons, whether orally, in writing or by any other means, information and documents which relates to, or are connected with, the Borrowers, their beneficial owner, any other member of the Group, their business, dealings or assets (the "Information"), from time to time and to the extent that the Authorised Person deems such disclosure or transmission to be necessary or desirable for or incidental to the carrying out of its duties, obligations, commitments and activities whether arising under contract or by operation of law and/or consolidated supervision and risk management policy, to the extent that the Information is covered by banking secrecy under any applicable law in general and French banking secrecy rules in particular and/or:
(a) necessary or desirable for the purposes of its internal cross-selling enabling the Borrowers and/or any other member of the Group to benefit from the Agent's or any other Authorised Person's business activities; and/or
(b) necessary or desirable to insure a risk related to the Borrowers and/or any other member of the Group; and/or
(c) necessary or desirable to syndicate a risk related to the Borrowers and/or any other member of the Group; and/or
(d) necessary or desirable to securitise a risk related to the Borrowers and/or any other member of the Group; and/or
(e) necessary or desirable to open an account or to start a business relation with the Agent's or any other Authorised Person's parent company or any of its subsidiaries or branches.
In this Clause 29.4 (Waiver of Banking Secrecy), "Applicable Person" means any or all of the following persons:
(i) any authority or person against which, pursuant to any applicable law, administrative order or court ruling, banking secrecy may not be validly asserted by an Authorised Person;
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(ii) the Agent's or any other Authorised Person's parent company, any of its subsidiaries, branches or representative offices;
(iii) any rating agency, auditor, insurance and reinsurance company, broker or professional adviser, to the extent such entity or person is bound by a statutory or contractual duty of confidentiality;
(iv) any financial institution and institutional or other investor who is or might be involved in securitisation schemes, hedging agreements, participations, credit derivatives or any other risk transfer or sharing arrangements, including, inter alia, a bank and/or other financial institution's participation in, or syndication in respect of, the Loan;
(v) any potential assignee or transferee or person who has entered into or is proposing to enter into contractual arrangements with the Authorised Person in relation to a Borrower; and
(vi) any external computer services provider, for the purpose of maintenance or repair of the Agent's or any other Authorised Person's computer systems and date provided that such external computer services provider is bound by the confidentiality policy of Crédit Agricole Corporate and Investment Bank.
29.5 Counterparts
A Finance Document may be executed in any number of counterparts.
30 Confidentiality
30.1 Confidential Information
Each Creditor Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clauses 30.2 (Disclosure of Confidential Information) and 30.3 (Disclosure to numbering service providers) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information taking also into account the public nature of the Corporate Guarantor.
30.2 Disclosure of Confidential Information
Any Creditor Party may disclose:
(a) to any of its affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, insurers, reinsurers, brokers, insurance brokers, reinsurance brokers, partners and Representatives such Confidential Information as that Creditor Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
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(b) to any person:
(i) to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent and, in each case, to any of that person's affiliates, Related Funds, Representatives and professional advisers;
(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Borrowers and/or any Security Party and to any of that person's affiliates, Related Funds, Representatives and professional advisers;
(iii) appointed by any Creditor Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
(vii) to whom or for whose benefit that Creditor Party charges, assigns or otherwise creates a Security Interest (or may do so) pursuant to Clause 26.16 (Security over Lenders' rights), including to a federal reserve or central bank (including, for the avoidance of doubt, the European Central Bank) to (or through) whom it creates Security Interest pursuant to Clause 26.16 (Security over Lenders' rights) and any federal reserve or central bank (including, for the avoidance of doubt, the European Central Bank) may disclose such Confidential Information to a third party to whom it transfers (or may potentially transfer) rights under the Finance Documents or the securities issued by the special purpose vehicle in connection with the enforcement of such Security Interest;
(viii) who is a party to a Finance Document, a member of the Group or any related entity of the Borrowers or any Security Party; or
(ix) with the consent of the Borrowers;
in each case, such Confidential Information as that Creditor Party shall consider appropriate if:
(A) in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is
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subject to professional obligations to maintain the confidentiality of the Confidential Information;
(B) in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
(C) in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Creditor Party, it is not practicable so to do in the circumstances;
(c) to any person appointed by that Creditor Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the relevant Creditor Party; and
(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Borrowers and/or the Security Parties.
30.3 Disclosure to numbering service providers
(a) Any Creditor Party may disclose to any national or international numbering service provider appointed by that Creditor Party to provide identification numbering services in respect of this Agreement, the Loan and/or the Borrowers and/or the Security Parties the following information:
(i) names of the Borrowers and the Security Parties;
(ii) country of domicile of the Borrowers and the Security Parties;
(iii) place of incorporation of the Borrowers and the Security Parties;
(iv) date of this Agreement;
(v) governing law;
(vi) the name of the Agent;
(vii) date of each amendment and restatement of this Agreement;
(viii) amount of the Loan;
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(ix) amount of Total Commitments;
(x) currency of the Loan;
(xi) type of facility;
(xii) ranking of facility;
(xiii) final Repayment Date;
(xiv) changes to any of the information previously supplied pursuant to paragraphs (i) to (xiii) above; and
(xv) such other information agreed between such Creditor Party and the Borrowers,
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
(b) The parties to this Agreement acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or the Borrowers and/or any Security Party by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
(c) The Borrowers represent that none of the information set out in sub-paragraphs (i) to (xv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
(d) The Agent shall notify the Borrowers and the other Creditor Parties of:
(i) the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or the Borrowers and/or the Security Parties; and
(ii) the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or the Borrowers and/or the Security Parties by such numbering service provider.
30.4 Entire agreement
This Clause 30 (Confidentiality) constitutes the entire agreement between the parties to this Agreement in relation to the obligations of the Creditor Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
30.5 Inside information
Each of the Creditor Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Creditor Parties undertakes not to use any Confidential Information for any unlawful purpose.
30.6 Notification of disclosure
Each of the Creditor Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:
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(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 30.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 30.
30.7 Continuing obligations
The obligations in this Clause 30 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Creditor Party for a period of 12 months from the earlier of:
(a) the date on which all amounts payable by the Borrowers and the Security Parties under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
(b) the date on which such Creditor Party otherwise ceases to be a Creditor Party.
31 Law and Jurisdiction
31.1 English law
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
31.2 Exclusive English jurisdiction
Subject to Clause 31.3 (Choice of forum for the exclusive benefit of the Creditor Parties), the courts of England shall have exclusive jurisdiction to settle any Dispute.
31.3 Choice of forum for the exclusive benefit of the Creditor Parties
Clause 31.2 (Exclusive English jurisdiction) is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
(a) to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
No Borrower shall commence any proceedings in any country other than England in relation to a Dispute.
31.4 Process agent
Each Borrower irrevocably appoints Hill Dickinson Services (London) Limited at their office for the time being, presently at The Broadgate Tower 7th Floor, 20 Primrose Street, London, EC2A 2EW, England to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.
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31.5 Creditor Party rights unaffected
Nothing in this Clause 31 (Law and Jurisdiction) shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
31.6 Meaning of "proceedings" and "Dispute"
In this Clause 31 (Law and Jurisdiction), "proceedings" means proceedings of any kind, including an application for a provisional or protective measure and a "Dispute" means any dispute arising out of or in connection with this Agreement including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement.
32 Bail-In
32.1 Contractual recognition of bail-in
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each party hereto acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a) any Bail-In Action in relation to any such liability, including (without limitation):
(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
(iii) a cancellation of any such liability; and
(b) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
33 Joint and Several Liability
33.1 General
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be several and, if and to the extent consistent with Clause 33.2 (No impairment of Borrowers' obligations), joint.
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33.2 No impairment of Borrowers' obligations
The liabilities and obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
(b) any Creditor Party entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
(c) any Creditor Party releasing any other Borrower or any Security Interest created by a Finance Document; or
(d) any combination of the foregoing.
33.3 Principal debtors
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall in any circumstances be construed to be a surety for the obligations of any other Borrower under this Agreement.
33.4 Subordination
Subject to Clause 33.5 (Borrowers' required action), during the Security Period, no Borrower shall:
(a) claim any amount which may be due to it from any other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or
(b) take or enforce any form of security from any other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of any other Borrower; or
(c) set off such an amount against any sum due from it to any other Borrower; or
(d) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower or other Security Party; or
(e) exercise or assert any combination of the foregoing.
33.5 Borrowers' required action
If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 33.4 (Subordination), in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent's notice.
THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.
95 EUROPE/78820855v4
Execution Pages
BORROWERS
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
BUFF SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
CHERNAVA MARINE CORP. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
SOLANGE SHIPPING LTD. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
OPAL SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
96 EUROPE/78820855v4
Witness' address: )
97 EUROPE/78820855v4
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
EMERY SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: )
Witness' address: ) /s/ Luke Stafford
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
DUCALE MARINE INC. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
LENDERS
SIGNED by )
duly authorised )
for and on behalf of )
CRÉDIT AGRICOLE CORPORATE ) /s/ Foteini Apalaki
AND INVESTMENT BANK )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
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MANDATED LEAD ARRANGER
SIGNED by )
duly authorised )
for and on behalf of )
CRÉDIT AGRICOLE CORPORATE )
AND INVESTMENT BANK ) /s/ Foteini Apalaki
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
AGENT
SIGNED by )
duly authorised )
for and on behalf of ) /s/ Foteini Apalaki
CRÉDIT AGRICOLE CORPORATE )
AND INVESTMENT BANK )
in the presence of: )
Witness' signature: ) /s/ Luke Stafford
Witness' name: )
Witness' address: )
SECURITY TRUSTEE
SIGNED by )
duly authorised )
for and on behalf of ) /s/ Foteini Apalaki
CRÉDIT AGRICOLE CORPORATE )
AND INVESTMENT BANK )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Luke Stafford
Witness' address: )
99 EUROPE/78820855v4
EX-99.2
Exhibit 99.2
Dated 19 June 2025
$227,070,000
TERM LOAN FACILITY
BRANDEIS SHIPPING CORPORATION
MANDORA SHIPPING LTD
RONDINE MANAGEMENT CORP.
PERAN MARITIME INC.
ZONER SHIPTRADE S.A.
PANDORA MARINE INC.
PYRGI SHIPPING CORPORATION
OTHONOI SHIPPING CORPORATION
EREIKOUSA SHIPPING CORPORATION
as joint and several Borrowers
and Hedge Guarantors
and
BNP PARIBAS
as Mandated Lead Arranger
and
BNP PARIBAS
as Bookrunner
and
BNP PARIBAS
as Co-ordinator
and
BNP PARIBAS
as Facility Agent
and
BNP PARIBAS
as Security Agent
FACILITY AGREEMENT
relating to
the refinancing of existing indebtedness secured on
three container vessels and three bulk carrier vessels,
the financing in part of one 7,900 TEU container vessel and
two 115,000 DWT product and crude oil tanker vessels
Index
Clause Page
| Section 1 Interpretation | 3 | |
|---|---|---|
| 1 | Definitions and Interpretation | 3 |
| Section 2 The Facility | 34 | |
| 2 | The Facility | 34 |
| 3 | Purpose | 34 |
| 4 | Conditions of Utilisation | 34 |
| Section 3 Utilisation | 37 | |
| 5 | Utilisation | 37 |
| Section 4 Repayment, Prepayment and Cancellation | 41 | |
| 6 | Repayment | 41 |
| 7 | Prepayment and Cancellation | 42 |
| Section 5 Costs of Utilisation | 47 | |
| 8 | Interest | 47 |
| 9 | Interest Periods | 50 |
| 10 | Changes to the Calculation of Interest | 51 |
| 11 | Fees | 53 |
| Section 6 Additional Payment Obligations | 54 | |
| 12 | Tax Gross Up and Indemnities | 54 |
| 13 | Increased Costs | 59 |
| 14 | Other Indemnities | 60 |
| 15 | Mitigation by the Finance Parties | 63 |
| 16 | Costs and Expenses | 64 |
| Section 7 Joint and Several Liability of Borrowers and Guarantee | 66 | |
| 17 | Joint and Several Liability of the Borrowers | 66 |
| 18 | Guarantee and Indemnity – Hedge Guarantors | 67 |
| Section 8 Representations, Undertakings and Events of Default | 71 | |
| 19 | Representations | 71 |
| 20 | Information Undertakings | 78 |
| 21 | General Undertakings | 81 |
| 22 | Insurance Undertakings | 87 |
| 23 | Pre-Delivery Contract Undertakings | 93 |
| 24 | General Ship Undertakings | 95 |
| 25 | Security Cover | 102 |
| 26 | Accounts, application of Earnings and Hedge Receipts | 104 |
| 27 | Events of Default | 105 |
| Section 9 Changes to Parties | 111 | |
| 28 | Changes to the Lenders and the Hedge Counterparties | 111 |
| 29 | Changes to the Transaction Obligors | 118 |
| Section 10 The Finance Parties | 119 | |
| 30 | The Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator | 119 |
| 31 | The Security Agent | 130 |
| 32 | Conduct of Business by the Finance Parties | 146 |
| 33 | Sharing among the Finance Parties | 146 |
| Section 11 Administration | 148 | |
| 34 | Payment Mechanics | 148 |
| 35 | Set-Off | 151 |
| 36 | Bail-In | 152 |
| 37 | Notices | 152 |
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| 38 | Calculations and Certificates | 154 |
|---|---|---|
| 39 | Partial Invalidity | 155 |
| 40 | Remedies and Waivers | 155 |
| 41 | Entire Agreement | 155 |
| 42 | Settlement or Discharge Conditional | 155 |
| 43 | Irrevocable Payment | 156 |
| 44 | Amendments and Waivers | 156 |
| 45 | Confidential Information | 160 |
| 46 | Confidentiality of Funding Rates | 164 |
| 47 | Counterparts | 165 |
| Section 12 Governing Law and Enforcement | 166 | |
| 48 | Governing Law | 166 |
| 49 | Enforcement | 166 |
Schedules
| Schedule 1 The Parties | 167 |
|---|---|
| Part A The Obligors | 167 |
| Part B The Original Lenders | 173 |
| Part C The Servicing Parties | 174 |
| Schedule 2 Conditions Precedent | 175 |
| Part A Conditions Precedent to Initial Utilisation Request | 175 |
| Part B Conditions Precedent to Utilisation – Tranche A | 178 |
| Part C Conditions Precedent to Utilisation – Pre-Delivery Advances | 180 |
| Part D Conditions Precedent to Utilisation – Delivery Advances (relating to Ship G, Ship H and Ship I) | 181 |
| Schedule 3 Requests | 183 |
| Part A Utilisation Request | 183 |
| Part B Selection Notice | 185 |
| Schedule 4 Form of Transfer Certificate | 187 |
| Schedule 5 Form of Assignment Agreement | 189 |
| Schedule 6 Form of Hedge Counterparty Accession Letter | 192 |
| Schedule 7 Details of the Ships and other Definitions | 193 |
| Schedule 8 Timetables | 197 |
| Schedule 9 Reference Rate Terms | 198 |
| Schedule 10 Daily Non-Cumulative Compounded RFR Rate | 201 |
| Schedule 11 Cumulative Compounded RFR Rate | 203 |
| Schedule 12 Form of Attestation to be issued by the Borrowers | 204 |
Execution
| Execution Pages | 206 |
|---|
EUROPE/78937797v7
THIS AGREEMENT is made on 19 June 2025
Parties
(1) BRANDEIS SHIPPING CORPORATION, a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower A")
(2) MANDORA SHIPPING LTD, a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower B")
(3) RONDINE MANAGEMENT CORP., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower C")
(4) PERAN MARITIME INC., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower D")
(5) ZONER SHIPTRADE S.A., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower E")
(6) PANDORA MARINE INC., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower F")
(7) PYRGI SHIPPING CORPORATION, a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower G")
(8) OTHONOI SHIPPING CORPORATION, a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower H")
(9) EREIKOUSA SHIPPING CORPORATION, a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower I")
(10) THE COMPANIES listed in Part A of Schedule 1 (The Parties) as hedge guarantors (the "Hedge Guarantors")
(11) THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as lenders (the "Original Lenders")
(12) THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as hedge counterparties (the "Original Hedge Counterparties")
(13) BNP PARIBAS as mandated lead arranger (the "Mandated Lead Arranger")
(14) BNP PARIBAS as bookrunner (the "Bookrunner")
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(15) BNP PARIBAS as co-ordinator (the "Co-ordinator")
(16) BNP PARIBAS as agent of the other Finance Parties (the "Facility Agent")
(17) BNP PARIBAS as security agent for the Secured Parties (the "Security Agent")
Background
(A) The Lenders have agreed to make available to the Borrowers a term loan facility of up to $227,070,000 for the purposes of:
(i) refinancing the Existing Indebtedness in respect of Ship A, Ship B, Ship C, Ship D, Ship E and Ship F by way of a loan in a principal amount not exceeding the lower of (i) 40 per cent. of the aggregate Initial Market Value of Ship A, Ship B, Ship C, Ship D, Ship E and Ship F and (ii) $62,500,000;
(ii) financing in part the acquisition cost of Ship G by way of a loan in a principal amount not exceeding the lower of (i) 70 per cent. of the Initial Market Value of Ship G, (ii) 70 per cent. of the Contract Price of Ship G and (iii) $74,200,000;
(iii) financing in part the acquisition cost of Ship H by way of a loan in a principal amount not exceeding the lesser of (i) 70 per cent of the Initial Market Value of Ship H, (ii) 70 per cent of the Contract Price of Ship H and (iii) $45,185,000; and
(iv) financing in part the acquisition of Ship I by way of a loan in a principal amount not exceeding the lesser of (i) 70 per cent of the Initial Market Value of Ship I, (ii) 70 per cent of the Contract Price of Ship I and (iii) $45,185,000.
(B) The Hedge Counterparties may enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers' exposure under this Agreement to interest rate fluctuations.
Operative Provisions
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Section 1
Interpretation
1 Definitions and Interpretation
1.1 Definitions
In this Agreement:
"2002 ISDA Master Agreement" means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc.
"Account Bank" means BNP Paribas, Paris, Lancy/Geneva branch acting through its office at Place de Hollande 2, CP CH-1211, Geneva 11, Switzerland or any replacement bank or other financial institution as may be approved by the Facility Agent acting with the authorisation of the Majority Lenders.
"Account Security" means a document creating Security over any Earnings Account in agreed form.
"Additional Business Day" means any day specified as such in the Reference Rate Terms;
"Additional Hedge Counterparty" means a bank or financial institution which becomes a Hedge Counterparty in accordance with Clause 28.10 (Additional Hedge Counterparties).
"Advance" means a borrowing of all or part of a Tranche under this Agreement, including any Pre-Delivery Advance or Delivery Advance.
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"Annex VI" means Annex VI of the Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto and as further amended from time to time.
"Approved Brokers" means any firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders.
"Approved Classification" means, in relation to a Ship, the classification in relation to that Ship specified in Schedule 7 (Details of the Ships and other Definitions) or the equivalent classification with another Approved Classification Society.
"Approved Classification Society" means, in relation to a Ship, the classification society in relation to that Ship specified in Schedule 7 (Details of the Ships and other Definitions) or any other classification society approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders and which authorisation shall not be withheld in the case of any classification society which is a member of the International Association of Classification Societies.
"Approved Flag" means, in relation to a Ship, as at the date of this Agreement, the flag in relation to that Ship specified in Schedule 7 (Details of the Ships and other Definitions) or such other flag and, if applicable port of registry, approved in writing by the Facility Agent acting
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with the authorisation of the Majority Lenders, which authorisation shall not be unreasonably withheld and which authorisation shall not be withheld in the case of the Cypriot flag, the Liberian flag, the Maltese flag, the Marshall Islands flag, the Panamanian flag and a reference to "the Approved Flag" in respect of a Ship shall be a reference to the flag and, if applicable port of registry, under which that Ship is then flagged with the agreement of the Facility Agent acting with the authorisation of the Majority Lenders.
"Approved Manager" means, in relation to a Ship:
(a) Navios Shipmanagement Inc., a corporation domesticated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960 as the commercial and/or technical manager of that Ship;
(b) any Affiliate or Subsidiary of Navios Shipmanagement Holdings Corporation, a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960 as commercial and/or technical manager of that Ship; and/or
(c) any other person approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders as the commercial and/or technical manager or sub-manager of that Ship.
"Approved Valuer" means Arrow Valuations, Braemar Seascope Ltd, Clarkson Valuations Limited, E.A. Gibson Shipbrokers Limited, Fearnleys AS, Simpson Spence & Young, Barry Rogliano Salles, Ifchor Galbraiths, MB Shipbrokers, Howe Robinson Partners and Affinity (Shipping) LLP (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders.
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
"Assignable Charter" means any Charter the remaining duration of which exceeds or is capable of exceeding, by virtue of any optional extensions or otherwise, 12 Months.
"Assignment Agreement" means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
"Availability Period" means the period from and including the date of this Agreement to and including:
(a) in relation to Tranche A, 30 July 2025;
(b) in relation to Tranche B, the earlier of (i) the Delivery Date of Ship G and (ii) 28 September 2027;
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(c) in relation to Tranche C, the earlier of (i) the Delivery Date of Ship H and (ii) 11 October 2026; and
(d) in relation to Tranche D, the earlier of (i) the Delivery Date of Ship I and (ii) 10 February 2027,
or such later date as the Facility Agent may, acting on the instructions of the Lenders, agree with the Borrowers.
"Available Commitment" means a Lender's Commitment minus:
(a) the amount of its participation in the outstanding Loan; and
(b) in relation to any proposed Utilisation, the amount of its participation in any Advance that is due to be made on or before the proposed Utilisation Date.
"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.
"Bail-In Action" means the exercise of any Write-down and Conversion Powers.
"Bail-In Legislation" means:
(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
(b) in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and
(c) in relation to the United Kingdom, the UK Bail-In Legislation.
"Balloon Instalments" has the meaning given to it in Clause 6.1 (Repayment of Loan).
"Borrower" means Borrower A, Borrower B, Borrower C, Borrower D, Borrower E, Borrower F, Borrower G, Borrower H or Borrower I.
"Break Costs" means any amount specified as such in the Reference Rate Terms.
"Builder" means (i) in relation to Ship G, Builder A and (ii) in relation to each of Ship H and Ship I, Builder B.
"Builder A" means HJ Shipbuilding & Construction Co., Ltd., a company organised and existing under the laws of the Republic of Korea having its principal office at 233 Taejong-ro (29, 5-Ga, Bongnae-Dong), Yeongdo-Gu, Busan (606-796), Korea.
"Builder B" means, together, (i) Jiangyin Xiagang Changjiang Shipbreaking Co., Ltd., a corporation organized and existing under the laws of the People's Republic of China having its registered address at No. 368 West Binjiang Road, Jiangyin City, Jiangsu Province, People's Republic of China and (ii) Zhoushan Changhong International Shipyard Co., Ltd., a corporation organised and existing under the laws of the People's Republic of China having its registered
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office at No. 19 Chuangyuan Avenue, Dinghai Industrial Park, Zhoushan City, Zhejiang Province, People's Republic of China.
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Paris, Athens, Switzerland and New York and, in relation to Clause 5.6 (Payment to third parties), Zhousan City, the People's Republic of China or, as the case may be, Seoul, the Republic of Korea, and in relation to:
(a) any date for payment or purchase of an amount relating to the Loan, any part of the Loan or Unpaid Sum; or
(b) the determination of the first day or the last day of an Interest Period for the Loan, any part of the Loan or Unpaid Sum, or otherwise in relation to the determination of the length of such an Interest Period,
which is an Additional Business Day relating to the Loan, that part of the Loan or Unpaid Sum.
"Central Bank Rate" has the meaning given to that term in the Reference Rate Terms.
"Central Bank Rate Adjustment" has the meaning given to that term in the Reference Rate Terms.
"Central Bank Rate Spread" has the meaning given to that term in the Reference Rate Terms.
"Change of Control" has the meaning given to it in Clause 27.11 (Change of Control).
"Charter" means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence.
"Charter Guarantee" means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.
"Charter Assignment" means an assignment of an Assignable Charter and any Charter Guarantee relating to that Assignable Charter in favour of the Security Agent in form and substance satisfactory to the Security Agent.
"Code" means the US Internal Revenue Code of 1986.
"Commitment" means:
(a) in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Part B of Schedule 1 (The Parties) and the amount of any other Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this Agreement.
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"Compounded Reference Rate" means, in relation to any RFR Banking Day during the Interest Period of the Loan or any part of the Loan, the percentage rate per annum which is the Daily Non-Cumulative Compounded RFR Rate for that RFR Banking Day.
"Compounding Methodology Supplement" means, in relation to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate, a document which:
(a) is agreed in writing by the Borrowers, the Facility Agent (in its own capacity) and the Facility Agent (acting on the instructions of Majority Lenders);
(b) specifies a calculation methodology for that rate; and
(c) has been made available to the Borrowers and each Finance Party.
"Confidential Information" means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
(a) any member of the Group or any of its advisers; or
(b) another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(i) information that:
(A) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 45 (Confidential Information); or
(B) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(C) is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(ii) any Funding Rate.
"Confidentiality Undertaking" means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrowers and the Facility Agent.
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"Contract Price" means the price payable in relation to each Ship, under article II (contract price) of the relevant Shipbuilding Contract, plus any other amounts further to adjustment as provided in article III (adjustment of the contract price) of the relevant Shipbuilding Contract.
"Contract Price Instalment" means each instalment of the Contract Price payable:
(a) in relation to Ship G, under article X (payment) of the relevant Shipbuilding Contract; and
(b) in relation to each of Ship H and Ship I, under article II (contract price & terms of payment) of the relevant Shipbuilding Contract.
"Corresponding Debt" means any amount, other than any Parallel Debt, which an Obligor owes to a Secured Party under or in connection with the Finance Documents.
"Cumulative Compounded RFR Rate" means, in relation to an Interest Period for the Loan or any part of the Loan, the percentage rate per annum determined by the Facility Agent (or by any other Finance Party which agrees to determine that rate in place of the Facility Agent) in accordance with the methodology set out in Schedule 11 (Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
"Daily Non-Cumulative Compounded RFR Rate" means, in relation to any RFR Banking Day during an Interest Period for the Loan or any part of the Loan, the percentage rate per annum determined by the Facility Agent (or by any other Finance Party which agrees to determine that rate in place of the Facility Agent) in accordance with the methodology set out in Schedule 10 (Daily Non-Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
"Daily Rate" means the rate specified as such in the Reference Rate Terms.
"Deed of Covenant" means, in relation to a Ship, the deed of covenant collateral to a Mortgage which is in account current form over that Ship and creating Security over that Ship in agreed form.
"Deed of Release" means any deed releasing the Existing Security in a form acceptable to the Facility Agent.
"Default" means an Event of Default or a Potential Event of Default.
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Agent.
"Delivery Advance" means the relevant Advance under each of Tranche B, Tranche C and Tranche D relating to the Contract Price Instalment due to the relevant Builder under the relevant Shipbuilding Contract on the relevant Delivery Date.
"Delivery Date" means the date on which each of Ship G, Ship H and Ship I is delivered by the relevant Builder to relevant Borrower under the relevant Shipbuilding Contract.
"Designated Unitholder" means Mrs. Angeliki Frangou, her direct descendants and their lineal descendants, either directly or indirectly, (through entities owned and controlled by her or any of their affiliates or trusts or foundations established or that may be established of which she is a beneficiary or her direct descendants or their lineal descendants are a beneficiary) being the ultimate beneficial owner(s) of, or having ultimate control of, the voting rights attaching
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to more than 5 per cent. of all the units (including for the avoidance of doubt both general partner units and common units) in the Guarantor and in the plural means all of them.
"Disruption Event" means either or both of:
(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Transaction Obligor; or
(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:
(i) from performing its payment obligations under the Finance Documents; or
(ii) from communicating with other Parties or, if applicable, any Transaction Obligor in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Transaction Obligor whose operations are disrupted.
"Document of Compliance" has the meaning given to it in the ISM Code.
"dollars" and "$" mean the lawful currency, for the time being, of the United States of America.
"Earnings" means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Security Agent and which arise out of or in connection with or relate to the use or operation of that Ship, including (but not limited to):
(a) the following, save to the extent that any of them is, with the prior written consent of the Facility Agent, pooled or shared with any other person:
(i) all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;
(ii) the proceeds of the exercise of any lien on sub-freights;
(iii) compensation payable to a Borrower or the Security Agent in the event of requisition of that Ship for hire or use;
(iv) remuneration for salvage and towage services;
(v) demurrage and detention moneys;
(vi) without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
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(vii) all moneys which are at any time payable under any Insurances in relation to loss of hire;
(viii) all monies which are at any time payable to a Borrower in relation to general average contribution; and
(b) if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (viii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.
"Earnings Account" means, in relation to a Borrower:
(a) an account in the name of that Borrower with the Account Bank designated "Earnings Account";
(b) any other account in the name of that Borrower with the Account Bank which may, with the prior written consent of the Facility Agent, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or
(c) any sub-account of any account referred to in paragraphs (a) or (b) above.
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under Environmental Law.
"Environmental Claim" means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, "claim" includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
"Environmental Incident" means:
(a) any release, emission, spill or discharge of Environmentally Sensitive Material whether within a Ship or from a Ship into any other vessel or into or upon the air, water, land or soils (including the seabed) or surface water; or
(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water from a vessel other than any Ship and which involves a collision between any Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
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(c) any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.
"Environmental Law" means any present or future law relating to vessel disposal, energy efficiency, carbon reduction, emissions, emissions trading, pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
"Environmentally Sensitive Material" means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
"EU Bail-In Legislation Schedule" means the document described as such and published by the LMA from time to time.
"EU Ship Recycling Regulation" means Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC.
"Event of Default" means any event or circumstance specified as such in Clause 27 (Events of Default).
"Existing Facility Agent" means the "Agent" as such term is defined in each Existing Facility Agreement.
"Existing Facility Agreement A" means the loan agreement dated 12 June 2023 (as amended and supplemented from time to time) and made between, among others, (i) Borrower A, Borrower D and Borrower E as joint and several borrowers, (ii) the banks and financial institutions listed in Schedule 1 (the Parties) therein as lenders and (iii) BNP Paribas as bookrunner, mandated lead arranger, agent and security trustee relating to a term loan facility of (originally) $40,000,000 secured on, among other things, Ship A, Ship D and Ship E.
"Existing Facility Agreement B" means the loan agreement dated 28 June 2023 (as amended and supplemented from time to time) and made between, among others, (i) Borrower B, Borrower C and Borrower F as joint and several borrowers, (ii) the banks and financial institutions listed in Schedule 1 (the Parties) therein as lenders and (iii) Crédit Agricole Corporate and Investment Bank as mandated lead arranger, agent and security trustee relating to a term loan facility of (originally) $62,400,000 secured on, among other things, Ship B, Ship C and Ship F.
"Existing Facility Agreement" means Existing Facility Agreement A or Existing Facility Agreement B.
"Existing Indebtedness" means:
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(a) in relation to Existing Facility Agreement A, at any date, the outstanding Financial Indebtedness of Borrower A, Borrower D and Borrower E on that date under that Existing Facility Agreement; and
(b) in relation to Existing Facility Agreement B, at any date, the outstanding Financial Indebtedness of Borrower B, Borrower C and Borrower F on that date under that Existing Facility Agreement.
"Existing Security" means any Security created to secure the Existing Indebtedness.
"Facility" means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).
"Facility Office" means the office or two offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days' written notice) as the office or two offices through which it will perform its obligations under this Agreement.
"FATCA" means:
(a) sections 1471 to 1474 of the Code or any associated regulations;
(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.
"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.
"Fee Letter" means any letter or letters dated on or about the date of this Agreement between any of the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, the Facility Agent and the Security Agent and any Borrower setting out any of the fees referred to in Clause 11 (Fees).
"Finance Document" means:
(a) this Agreement;
(b) any Fee Letter;
(c) the Guarantee;
(d) each Utilisation Request;
(e) any Reference Rate Supplement;
(f) any Compounding Methodology Supplement;
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(g) any Security Document;
(h) any Hedging Agreement;
(i) any Manager's Undertaking;
(j) any Negative Pledge;
(k) any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
(l) any other document designated as such by the Facility Agent and the Borrowers.
"Finance Party" means the Facility Agent, the Security Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, a Lender or a Hedge Counterparty.
"Financial Indebtedness" means any indebtedness for or in relation to:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability;
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;
(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
(h) any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
(i) the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
"Funding Rate" means any individual rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.3 (Cost of funds).
"GAAP" means generally accepted accounting principles in the US.
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"General Assignment" means, in relation to a Ship, the general assignment creating Security over:
(a) that Ship's Earnings, its Insurances and any Requisition Compensation in relation to that Ship;
(b) any Charter and any Charter Guarantee in relation to that Ship; and
(c) in the case of each of Ship G, Ship H and Ship I, the benefit of any warranties of quality in favour of the Borrower owning that Ship under the relevant Shipbuilding Contract,
in agreed form.
"Group" means the Guarantor and its wholly-owned Subsidiaries (direct or indirect) for the time being and "member of the Group" shall be construed accordingly.
"Guarantee" means a guarantee executed by the Guarantor in agreed form.
"Guarantor" means Navios Maritime Partners L.P., a limited partnership formed in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
"Hedge Counterparty" means any Original Hedge Counterparty or any Additional Hedge Counterparty.
"Hedge Counterparty Accession Letter" means a document substantially in the form set out in Schedule 6 (Form of Hedge Counterparty Accession Letter).
"Hedge Receipts" means all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Security Agent by a Hedge Counterparty under a Hedging Agreement.
"Hedging Agreement" means any master agreement, confirmation, transaction, schedule or other agreement in agreed form entered into or to be entered into by a Borrower for the purpose of hedging interest payable under this Agreement.
"Hedging Agreement Security" means, in relation to a Borrower, a hedging agreement security creating Security over that Borrower's rights and interests in any Hedging Agreement, in agreed form.
"Hedging Prepayment Proceeds" means any Hedge Receipts arising as a result of termination or closing out under a Hedging Agreement.
"Holding Company" means, in relation to a person, any other person in relation to which it is a Subsidiary.
"Indemnified Person" has the meaning given to it in Clause 14.2 (Other indemnities).
"Initial Charter" has the meaning to that term in Schedule 7 (Details of the Ships and other Definitions).
"Initial Charterer" has the meaning to that term in Schedule 7 (Details of the Ships and other Definitions).
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"Initial Market Value" means, in relation to a Ship, the Market Value of that Ship calculated in accordance with the valuations relating to it in paragraph 3.5 of Part B of Schedule 2 (Conditions Precedent) and paragraph 2.6 of Part D of Schedule 2 (Conditions Precedent).
"Insurances" means, in relation to a Ship:
(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, that Ship's Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
(b) all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
"Interest Payment" means the aggregate amount of interest that is, or is scheduled to become, payable under any Finance Document.
"Interest Payment Date" has the meaning given to it in Clause 8.2 (Payment of interest).
"Interest Period" means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).
"Inventory of Hazardous Materials" means, in relation to a Ship, an inventory certificate or statement of compliance (as applicable) issued by the relevant classification society or shipyard authority which is supplemented by a list of any and all materials known to be potentially hazardous utilised in the construction of, or otherwise installed on, that Ship, pursuant to the requirements of the EU Ship Recycling Regulation.
"Irrevocable Instructions" has the meaning given to it in Clause 5.8 (Prepositioning of funds).
"ISM Code" means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.
"ISPS Code" means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization's (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.
"ITF" means the International Transport Workers' Federation.
"Lender" means:
(a) any Original Lender; and
(b) any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 28 (Changes to the Lenders and the Hedge Counterparties),
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which in each case has not ceased to be a Party as such in accordance with this Agreement.
"LMA" means the Loan Market Association or any successor organisation.
"Loan" means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a "part of the Loan" means an Advance, a Tranche, a part of a Tranche or any other part of the Loan as the context may require.
"Lookback Period" means the number of days specified as such in the Reference Rate Terms.
"Major Casualty" means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 in respect of each of Ship A, Ship B, Ship C, Ship D, Ship E and Ship F, and $1,000,000 in respect of each of Ship G, Ship H and Ship I or the equivalent in any other currency.
"Majority Lenders" means:
(a) if no Advance has yet been made, a Lender or Lenders whose Commitments aggregate more than 66.67 per cent. of the Total Commitments; or
(b) at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66.67 per cent. of the amount of the Loan then outstanding or, if the Loan has been repaid or prepaid in full, a Lender or Lenders whose participations in the Loan immediately before repayment or prepayment in full aggregate more than 66.67 per cent. of the Loan immediately before such repayment.
"Management Agreement" means in relation to a Ship, any agreement entered into with an Approved Manager regarding the commercial and/or technical management of that Ship.
"Manager's Undertaking" means, in relation to a Ship, the letter of undertaking from its Approved Manager subordinating the rights of such Approved Manager against that Ship and the relevant Borrower to the rights of the Finance Parties in agreed form.
"Margin" means:
(a) in respect of Tranche A, 1.75 per cent. per annum; and
(b) in respect of each of Tranche B, Tranche C and Trance D, 1.50 per cent. per annum.
"Market Disruption Rate" means the rate (if any) specified as such in the Reference Rate Terms.
"Market Value" means, in relation to a Ship or any other vessel, at any date, an amount determined by the Facility Agent as being an amount equal to the market value of that Ship or vessel shown by the valuations in accordance with Clause 25.7 (Provision of valuations) prepared:
(a) as at a date not more than 30 days previously;
(b) by an Approved Valuer or Approved Valuers;
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(c) with or without physical inspection of that Ship or vessel (as the Facility Agent may require); and
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter.
"Material Adverse Effect" means in the reasonable opinion of the Majority Lenders a material adverse effect on:
(a) the business, operations, property, condition (financial or otherwise) or prospects of the Group as a whole; or
(b) the ability of any Transaction Obligor to perform its obligations under any Finance Document; or
(c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.
"Month" means, in relation to an Interest Period (or any other period for the accrual of commission or fees), a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, subject to adjustment in accordance with the rules specified as Business Day Conventions in the Reference Rate Terms.
"Mortgage" means, in relation to a Ship, a first preferred or, as the case may be, priority ship mortgage on that Ship in agreed form or any replacement first preferred or first priority ship mortgage on that Ship under the laws of an Approved Flag in agreed form.
"Negative Pledge" means, in relation to a Borrower, the negative pledge agreement containing undertakings in respect of the issued shares in that Borrower in agreed form.
"Net Zero Banking Alliance" means the UN-convened group of leading global banks committed to financing ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050.
"Obligor" means a Borrower or a Hedge Guarantor.
"Original Financial Statements" means the annual audited consolidated financial statements of the Guarantor for its financial year ended 31 December 2024.
"Original Jurisdiction" means, in relation to a Transaction Obligor, the jurisdiction under whose laws that Transaction Obligor is incorporated as at the date of this Agreement.
"Overseas Regulations" means the Overseas Companies Regulations 2009 (SI 2009/1801).
"Parallel Debt" means any amount which an Obligor owes to the Security Agent under Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent)) or under that clause as incorporated by reference or in full in any other Finance Document.
"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
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"Party" means a party to this Agreement.
"Permitted Charter" means, in relation to a Ship:
(a) an Initial Charter; and
(b) a Charter:
(i) which is a time, voyage or consecutive voyage charter;
(ii) the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 12 months plus a redelivery allowance of not more than 30 days;
(iii) which is entered into on bona fide arm's length terms at the time at which that Ship is fixed; and
(iv) in relation to which not more than two months' hire is payable in advance,
and any other Charter which is approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders which authorisation no Lender shall unreasonably withhold or delay.
"Permitted Earnings Account" means, in relation to each of Borrower G, Borrower H and Borrower I, the relevant account in the name of that Borrower with Hamburg Commercial Bank AG acting through its office at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany designated "Earnings Account".
"Permitted Financial Indebtedness" means:
(a) any Financial Indebtedness incurred under the Finance Documents;
(b) in relation to Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F, until the Utilisation Date of Tranche A, the Existing Indebtedness;
(c) any trade debt incurred in the ordinary course of a Borrower's trading activities; and
(d) any Financial Indebtedness (including, without limitation, any shareholder or intra-Group loan made available to a Borrower in the ordinary course of its business of trading and operating its Ship) that is subordinated to all Financial Indebtedness incurred under the Finance Documents in a manner satisfactory to the Facility Agent in all respects.
"Permitted Security" means:
(a) Security created by the Finance Documents;
(b) in relation to Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F, until the Utilisation Date of Tranche A, the Existing Security;
(c) liens for unpaid master's and crew's wages in accordance with first class ship ownership and management practice and not being enforced through arrest;
(d) liens for salvage;
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(e) liens for master's disbursements incurred in the ordinary course of trading in accordance with first class ship ownership and management practice and not being enforced through arrest; and
(f) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship:
(i) not as a result of any default or omission by any Borrower;
(ii) not being enforced through arrest; and
(iii) subject, in the case of liens for repair or maintenance, to Clause 24.18 (Restrictions on chartering, appointment of managers etc.),
provided such lien does not secure amounts more than 45 days overdue (unless the overdue amount is being contested in good faith by appropriate steps).
"Poseidon Principles" means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios originally published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organisation from time to time.
"Potential Event of Default" means any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
"Pre-delivery Contract" means each Shipbuilding Contract and each Refund Guarantee.
"Pre-delivery Advance" means any Tranche B Pre-delivery Advance, the Tranche C Pre-delivery Advance or the Tranche D Pre-delivery Advance.
"Pre-delivery Security" means, in relation to each relevant Ship, a document creating Security over the relevant Pre-delivery Contracts in agreed form.
"Prepositioned Utilisation" has the meaning given to it in Clause 5.8 (Prepositioning of funds).
"Protected Party" has the meaning given to it in Clause 12.1 (Definitions).
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
"Reference Rate Supplement" means a document which:
(a) is agreed in writing by the Borrowers and the Facility Agent (in its own capacity) and the Facility Agent (acting on the instructions of the Majority Lenders);
(b) specifies the relevant terms which are expressed in this Agreement to be determined by reference to the Reference Rate Terms; and
(c) has been made available to the Borrowers and each Finance Party.
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"Reference Rate Terms" means the terms set out in Schedule 9 (Reference Rate Terms) or in any Reference Rate Supplement.
"Refund Guarantee" means the guarantee issued or to be issued by the relevant Refund Guarantor in favour of the relevant Borrower pursuant to the relevant Shipbuilding Contract in such a form as the relevant Borrower and the relevant Refund Guarantor have agreed (or in such other form as the relevant Borrower and the Facility Agent (acting on the instructions of all of the Lenders) shall agree).
"Refund Guarantor" means:
(a) in relation to the Refund Guarantee relating to Ship G, The Korea Development Bank, a company incorporated in Korea whose registered office is at 14 Eunhaeng-ro, Yeongdeungpo-gu, Seoul 07242, Korea;
(b) in relation to the Refund Guarantee relating to Ship H, Bank of Communications Co., Ltd., a company incorporated in the People's Republic of China whose registered office is at No. 188, Yincheng Zhonglu, Shanghai, Postal code: 200120, People's Republic of China; and
(c) in relation to the Refund Guarantee relating to Ship I, Agricultural Bank of China Limited, a company incorporated in the People's Republic of China whose registered office is at No. 69 Jianguomen Nei Avenue, Dongcheng District, Postal Code: 100005, Beijing, People's Republic of China, or
such other the financial institution as it may be approved by the Facility Agent and the Borrowers.
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
"Release" has the meaning given to it in Clause 5.8 (Prepositioning of funds).
"Relevant Jurisdiction" means, in relation to a Transaction Obligor:
(a) its Original Jurisdiction;
(b) any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;
(c) any jurisdiction where it conducts its business; and
(d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
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"Repayment Date" means each date on which a Repayment Instalment is required to be paid under Clause 6.1 (Repayment of Loan).
"Repayment Instalments" has the meaning given to it in Clause 6.1 (Repayment of Loan).
"Repeating Representation" means each of the representations set out in Clause 19 (Representations) except Clause 19.10 (Insolvency), Clause 19.11 (No filing or stamp taxes) and Clause 19.12 (Deduction of Tax) and any representation of any Transaction Obligor made in any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.
"Reporting Day" means the day (if any) specified as such in the Reference Rate Terms.
"Reporting Time" means the relevant time (if any) specified as such in the Reference Rate Terms.
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
"Requisition" means in relation to a Ship:
(a) any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected (whether de jure or de facto) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and
(b) any capture or seizure of that Ship (including any hijacking, piracy or theft) by any person whatsoever.
"Requisition Compensation" includes all compensation or other moneys payable to a Borrower by reason of any Requisition or any arrest or detention of a Ship in the exercise or purported exercise of any lien or claim.
"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.
"RFR" means the rate specified as such in the Reference Rate Terms.
"RFR Banking Day" means any day other than:
(a) a Saturday or Sunday; and
(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
"Russian Oil Products" means oil or petroleum products of Russian Federation origin or exported from Russia.
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"Russian Price Cap Framework" means, without limitation, the implementation and interpretation of the provisions of Article 3n of Council Regulation (EU) No 833/2014 and US Executive Order 14071 and Determinations thereunder.
"Safety Management Certificate" has the meaning given to it in the ISM Code.
"Safety Management System" has the meaning given to it in the ISM Code.
"Sanctions" means any economic or restrictive measures enacted, administered, or enforced by the United States of America, the United Nations Security Council, the European Union, the French Republic or other relevant sanctions authority.
"Sanctioned Country" means a country or territory whose government is the target of Sanctions or that is subject to comprehensive country-wide or territory-wide Sanctions (including, without limitation, Cuba, Syria, Iran, North Korea, Crimea and Donetsk and Luhansk regions of Ukraine as at the date of this Agreement).
"Sanctioned Person" means any person who is the target of, or directly or indirectly owned or controlled by a person that is the target of, Sanctions.
"Sanctioned Ship" means a ship which is the subject of Sanctions.
"Secured Liabilities" means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to any Secured Party under or in connection with each Finance Document.
"Secured Party" means each Finance Party from time to time party to this Agreement, a Receiver or any Delegate.
"Security" means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.
"Security Assets" means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
"Security Document" means:
(a) the Pre-Delivery Security;
(b) any Mortgage;
(c) any Deed of Covenant;
(d) any General Assignment;
(e) any Charter Assignment;
(f) any Account Security;
(g) any Hedging Agreement Security;
(h) any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
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(i) any other document designated as such by the Facility Agent and the Borrowers.
"Security Period" means the period starting on the date of this Agreement and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
"Security Property" means:
(a) the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;
(b) all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Security Agent as trustee for the Secured Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Security Agent as trustee for the Secured Parties;
(c) the Security Agent's interest in any turnover trust created under the Finance Documents;
(d) any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,
except:
(i) rights intended for the sole benefit of the Security Agent; and
(ii) any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.
"Selection Notice" means a notice substantially in the form set out in Part B of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).
"Servicing Party" means the Facility Agent or the Security Agent.
"Shareholder" means:
(a) in relation to Borrower A, Borrower B, Borrower C and Borrower F, Navios Maritime Operating L.L.C., a limited liability company formed in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
(b) in relation to Borrower D, Borrower E and Borrower G, Boheme Navigation Company, a corporation incorporated in the Republic of the Marshall Islands, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960; and
(c) in relation to Borrower H and Borrower I, Aegean Sea Maritime Holdings Inc., a corporation incorporated in the Republic of the Marshall Islands, whose registered
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address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
"Ship" means Ship A, Ship B, Ship C, Ship D, Ship E, Ship F, Ship G, Ship H or Ship I.
"Ship A" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship B" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship C" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship D" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship E" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship F" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship G" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship H" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Ship I" has the meaning given to that term in Schedule 7 (Details of the Ships and other Definitions).
"Shipbuilding Contract" means:
(a) in relation to Ship G, the shipbuilding contract dated 12 September 2024 and made between (i) Builder A and (ii) Borrower G for the construction by Builder A of Ship G and its purchase by Borrower G, as amended and supplemented by an addendum no.1 dated 3 February 2024 and an addendum no.2 dated 18 April 2025;
(b) in relation to Ship H, the shipbuilding contract dated 22 August 2023 and made between (i) Builder B and (ii) Borrower H for the construction by Builder B of Ship H and its purchase by Borrower H, as amended and supplemented by an addendum no.1 dated 6 January 2025; and
(c) in relation to Ship I, the shipbuilding contract dated 22 August 2023 and made between (i) Builder B and (ii) Borrower I for the construction by Builder B of Ship I and its purchase by Borrower I, as amended and supplemented by an addendum no.1 dated 6 January 2025,
and as each may be amended and/or supplemented from time to time.
"Specified Time" means a day or time determined in accordance with Schedule 8 (Timetables).
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"Statement of Compliance" means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.
"Subsidiary" means that a company (S) is a subsidiary of another company (P) if a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P and any company of which S is a subsidiary is a parent company of S Provided that there shall be excluded from this definition any subsidiaries which are listed on a public stock exchange.
"Swiss Security Documents" has the meaning given to it at Clause 31.1 (Trust).
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
"Tax Credit" has the meaning given to it in Clause 12.1 (Definitions).
"Tax Deduction" has the meaning given to it in Clause 12.1 (Definitions).
"Tax Payment" has the meaning given to it in Clause 12.1 (Definitions).
"Termination Accounts" means:
(a) in relation to each of Borrower B, Borrower C and Borrower F, the relevant account in the name of that Borrower with Crédit Agricole Corporate and Investment Bank, a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre designated "Earnings Account"; and
(b) the relevant account in the joint names of, among others, Borrower B, Borrower C and Borrower F with Crédit Agricole Corporate and Investment Bank, a sociéte anonyme incorporated under the laws of France acting through its office at 12 place des Etats-Unis, CS 70052, 92547 Montrouge Cedex, France, registered under the SIREN No. 304 187 701 of the Registre du Commerce et des Sociétés of Nanterre designated "Retention Account".
"Termination Date" means in relation to:
(a) Tranche A, the date falling five years from the Utilisation Date of Tranche A; and
(b) each of Tranche B, Tranche C and Tranche D, the earlier of (i) the date falling seven years from the Delivery Date of the Ship relating to that Tranche and (ii) 28 September 2034.
"Third Parties Act" has the meaning given to it in Clause 1.5 (Third party rights).
"Total Commitments" means the aggregate of the Commitments, being $227,070,000 at the date of this Agreement.
"Total Loss" means, in relation to a Ship:
(a) actual, constructive, compromised, agreed or arranged total loss of that Ship;
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(b) in the case of any of the events described in paragraph (a) of the definition "Requisition", any such Requisition of a Ship, unless that Ship is redelivered to the full control of the relevant Borrower within 60 days of such Requisition; and
(c) in the case of any of the events described in paragraph (b) of the definition "Requisition", any such Requisition of a Ship, unless that Ship is redelivered to the full control of the relevant Borrower within 90 days of such Requisition, provided that in the event of piracy the relevant underwriters confirm to the Facility Agent in writing (in customary terms) that prior to the end of the 90-day period the relevant Ship is subject to an approved piracy insurance cover, the earlier of (i) 12 Months after the date on which that Ship is captured by pirates and (ii) the date on which the piracy insurance cover expires.
"Total Loss Date" means, in relation to the Total Loss of a Ship:
(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:
(i) the date on which a notice of abandonment is given (or deemed or agreed to be given) to the insurers; and
(ii) the date of any compromise, arrangement or agreement made by or on behalf of the relevant Borrower with that Ship's insurers in which the insurers agree to treat that Ship as a total loss;
(c) in the case of a Requisition of that Ship, the date on which that Requisition occurs; and
(d) in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Facility Agent that the event constituting the total loss occurred.
"Tranche" means Tranche A, Tranche B, Tranche C, or Tranche D.
"Tranche A" means that part of the Loan made or to be made available to Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F to refinance the Existing Indebtedness in a principal amount being the lesser of (i) 40 per cent. of the aggregate Initial Market Value of Ship A, Ship B, Ship C, Ship D, Ship E and Ship F and (ii) $62,500,000.
"Tranche B" means that part of the Loan made or to be made available to Borrower G to finance part of the Contract Price of Ship G in an aggregate principal amount being the lesser of (i) 70 per cent. of the Initial Market Value of Ship G, (ii) 70 per cent. of the Contract Price of Ship G and (iii) $74,200,000.
"Tranche B Delivery Advance" means an Advance under Tranche B, in a principal amount not exceeding:
(a) if the Tranche B Pre-delivery Advance C has been utilised, $21,200,000 made or to be made available to Borrower G for the purpose of financing 20 per cent. of the Contract Price due to the relevant Builder under the relevant Shipbuilding Contract in accordance with sub-paragraph (v) of paragraph (b) of Clause 5.3 (Currency and amount); or
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(b) if the Tranche B Pre-delivery Advance C has not been utilised, $53,000,000 made or to be made available to Borrower G for the purpose of financing 50 per cent. of the Contract Price due to the relevant Builder under the relevant Shipbuilding Contract in accordance with sub-paragraph (v) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche B Pre-delivery Advance" means Tranche B Pre-delivery Advance A, Tranche B Pre-delivery Advance B or Tranche B Pre-delivery Advance C.
"Tranche B Pre-delivery Advance A" means an Advance under Tranche B, in a principal amount not exceeding $10,600,000 made or to be made available to Borrower G in accordance with sub-paragraph (ii) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche B Pre-delivery Advance B" means an Advance under Tranche B, in a principal amount not exceeding $10,600,000 made or to be made available to Borrower G in accordance with sub-paragraph (iii) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche B Pre-delivery Advance C" means an Advance under Tranche B, in a principal amount not exceeding $31,800,000 made or to be made available to Borrower G in accordance with sub-paragraph (iv) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche C" means that part of the Loan made or to be made available to Borrower H to finance part of the Contract Price of Ship H in an aggregate principal amount being the lesser of (i) 70 per cent. of the Initial Market Value of Ship H, (ii) 70 per cent. of the Contract Price of Ship H and (iii) $45,185,000.
"Tranche C Delivery Advance" means an Advance under Tranche C, in a principal amount not exceeding $38,730,000 made or to be made available to Borrower H for the purpose of financing 55 per cent. of the Contract Price due to the relevant Builder under the relevant Shipbuilding Contract and to provide working capital to the Group in accordance with sub-paragraph (vii) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche C Pre-delivery Advance" means an Advance under Tranche C, in a principal amount not exceeding $6,455,000 made or to be made available to Borrower H in accordance with sub-paragraph (vi) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche D" means that part of the Loan made or to be made available to Borrower I to finance part of the Contract Price of Ship I in an aggregate principal amount being the lesser of (i) 70 per cent. of the Initial Market Value of Ship I, (ii) 70 per cent. of the Contract Price of Ship I and (iii) $45,185,000.
"Tranche D Delivery Advance" means an Advance under Tranche D, in a principal amount not exceeding $38,730,000 made or to be made available to Borrower I for the purpose of financing 55 per cent. of the Contract Price due to the relevant Builder under the relevant Shipbuilding Contract and to provide working capital to the Group in accordance with sub-paragraph (vii) of paragraph (b) of Clause 5.3 (Currency and amount).
"Tranche D Pre-delivery Advance" means an Advance under Tranche D, in a principal amount not exceeding $6,455,000 made or to be made available to the Borrowers in accordance with sub-paragraph (vi) of paragraph (b) of Clause 5.3 (Currency and amount).
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"Transaction Document" means:
(a) a Finance Document;
(b) a Pre-delivery Contract;
(c) any Assignable Charter;
(d) any Initial Charter;
(e) any Charter Guarantee relating to an Assignable Charter; or
(f) any other document designated as such by the Facility Agent and a Borrower.
"Transaction Obligor" means a Borrower, the Guarantor, a Shareholder, any Approved Manager who is a member of the Group or any other member of the Group who executes a Transaction Document.
"Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
"Transfer Certificate" means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrowers.
"Transfer Date" means, in relation to an assignment or a transfer, the later of:
(a) the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and
(b) the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.
"UK Bail-In Legislation" means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
"UK Establishment" means a UK establishment as defined in the Overseas Regulations.
"Unpaid Sum" means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.
"US" means the United States of America.
"US Tax Obligor" means:
(a) a person which is resident for tax purposes in the US; or
(b) a person some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
"Utilisation" means a utilisation of the Facility.
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"Utilisation Date" means the date of a Utilisation, being the date on which the relevant Advance is to be made.
"Utilisation Request" means a notice substantially in the form set out in Part A of Schedule 3 (Requests).
"VAT" means:
(a) any value added tax imposed by the Value Added Tax Act 1994;
(b) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
(c) any other tax of a similar nature, whether imposed in the United Kingdom or a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) or (b) above, or imposed elsewhere.
"Write-down and Conversion Powers" means:
(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b) in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
(c) in relation to any other applicable Bail-In Legislation:
(i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii) any similar or analogous powers under that Bail-In Legislation.
1.2 Construction
(a) Unless a contrary indication appears, a reference in this Agreement to:
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(i) any "Account Bank", the "Mandated Lead Arranger", the "Bookrunner", the "Co-ordinator", the "Facility Agent", any "Finance Party", any "Hedge Counterparty", any "Lender", any "Obligor", any "Party", any "Secured Party", the "Security Agent", any "Transaction Obligor" or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;
(ii) "assets" includes present and future properties, revenues and rights of every description;
(iii) a liability which is "contingent" means a liability which is not certain to arise and/or the amount of which remains unascertained;
(iv) "document" includes a deed and also a letter, fax, email or telex;
(v) a Lender's "cost of funds" in relation to its participation in the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan or that part of the Loan for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(vi) "expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
(vii) a "Finance Document", a "Security Document" or "Transaction Document" or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended, replaced, novated, supplemented, extended or restated;
(viii) a "group of Lenders" includes all the Lenders;
(ix) "indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(x) "law" includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
(xi) "proceedings" means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;
(xii) a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
(xiii) a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
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(xiv) a reference to a "Ship", its name, its flag and, if applicable, its port of registry shall include any replacement name, flag and, if applicable, replacement port of registry, in each case, as may be approved in writing from time to time by the Facility Agent acting with the authorisation of the Majority Lenders;
(xv) a provision of law is a reference to that provision as amended or re-enacted from time to time;
(xvi) a time of day is a reference to Paris time;
(xvii) any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;
(xviii) words denoting the singular number shall include the plural and vice versa; and
(xix) "including" and "in particular" (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
(b) Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
(c) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(d) A reference in this Agreement to a page or screen of an information service displaying a rate shall include:
(i) any replacement page of that information service which displays that rate; and
(ii) the appropriate page of such other information service which displays that rate from time to time in place of that information service,
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Facility Agent after consultation with the Borrowers.
(e) A reference in this Agreement to a Central Bank Rate shall include any successor rate to, or replacement rate for, that rate.
(f) Any Reference Rate Supplement overrides anything in:
(i) Schedule 9 (Reference Rate Terms); or
(ii) any earlier Reference Rate Supplement.
(g) A Compounding Methodology Supplement relating to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate overrides anything relating to that rate in:
(i) Schedule 10 (Daily Non-Cumulative Compounded RFR Rate) or Schedule 11 (Cumulative Compounded RFR Rate), as the case may be; or
(ii) any earlier Compounding Methodology Supplement.
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(h) A Potential Event of Default is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.
1.3 Construction of insurance terms
In this Agreement:
"approved" means, for the purposes of Clause 22 (Insurance Undertakings), approved in writing by the Facility Agent.
"excess risks" means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims.
"obligatory insurances" means all insurances effected, or which any Borrower is obliged to effect, under Clause 22 (Insurance Undertakings) or any other provision of this Agreement or of another Finance Document.
"policy" includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.
"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision.
"war risks" includes the risk of mines and all risks excluded by clauses 29, 30 or 31 of the International Hull Clauses (1/11/02), clauses 29 or 30 of the International Hull Clauses (1/11/03), clauses 24, 25 or 26 of the Institute Time Clauses (Hulls) (1/11/95) or clauses 23, 24 or 25 of the Institute Time Clauses (Hulls) (1/10/83) or any equivalent provision.
1.4 Agreed forms of Finance Documents
References in Clause 1.1 (Definitions) to any Finance Document being in "agreed form" are to that Finance Document:
(a) in a form attached to a certificate dated the same date as this Agreement (and signed by each Borrower and the Facility Agent); or
(b) in any other form agreed in writing between each Borrower and the Facility Agent acting with the authorisation of the Majority Lenders or, where Clause 44.2 (All Lender matters) applies, all the Lenders.
1.5 Third party rights
(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.
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(b) Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.
(c) Any Affiliate, Receiver, Delegate or any other person described in paragraph (d) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 30.11 (Exclusion of liability), or paragraph (b) of Clause 31.11 (Exclusion of liability) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.
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Section 2
The Facility
2 The Facility
2.1 The Facility
Subject to the terms of this Agreement, the Lenders make available to the Borrowers a dollar term loan facility in four Tranches in an aggregate amount not exceeding the Total Commitments.
2.2 Finance Parties' rights and obligations
(a) The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(b) The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Transaction Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of the Loan or any other amount owed by a Transaction Obligor which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Transaction Obligor.
(c) A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.
3 Purpose
3.1 Purpose
Each Borrower shall apply all amounts borrowed by it under the Facility only for the purpose stated in the preamble (Background) to this Agreement.
3.2 Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4 Conditions of Utilisation
4.1 Initial conditions precedent
The Borrowers may not deliver a Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent.
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4.2 Further conditions precedent
The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if:
(a) on the date of the Utilisation Request and on the proposed Utilisation Date and before the Advance is made available:
(i) no Default is continuing or would result from the proposed Advance;
(ii) the Repeating Representations to be made by each Transaction Obligor are true;
(iii) in the case of the Advance under Tranche A, the Ship in respect of which such Advance is to be made has neither been sold nor become a Total Loss; and
(iv) in the case of an Advance under any of Tranches B, C and D, no event described in paragraphs (a) to (e) of Clause 7.4 (Mandatory prepayment on default under Shipbuilding Contract) has occurred and has not be remedied;
(b) in the case of the Advance under Tranche A, the Facility Agent has received on or before the relevant Utilisation Date, or is satisfied it will receive when the Advance is made available, all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent;
(c) in the case of a Pre-Delivery Advance, the Facility Agent has received on or before the relevant Utilisation Date, or is satisfied it will receive when such Pre-delivery Advance is made available, all of the documents and other evidence listed in Part C of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent; and
(d) in the case of a Delivery Advance, the Facility Agent has received on or before the relevant Utilisation Date, or is satisfied it will receive when such Delivery Advance is made available, all of the documents and other evidence listed in Part D of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent or, taking into account the fact that certain of those documents and other evidence will only be available when the relevant Ship has been delivered to the relevant Borrower, immediately after its delivery to the relevant Borrower.
4.3 Notification of satisfaction of conditions precedent
(a) The Facility Agent shall notify the Borrowers and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).
(b) Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
4.4 Waiver of conditions precedent
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) has been satisfied, the Borrowers shall ensure that that
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condition is satisfied within five Business Days after the relevant Utilisation Date or such later date as the Facility Agent, acting with the authorisation of the Majority Lenders, may agree in writing with the Borrowers. 36 EUROPE/78937797v7
Section 3
Utilisation
5 Utilisation
5.1 Delivery of a Utilisation Request
(a) The Borrowers may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.
(b) The Borrowers may not deliver more than one Utilisation Request under Tranche A.
(c) The Borrowers may not deliver more than one Utilisation Request under each of Tranche B, Tranche C and Tranche D in respect of the same Contract Price Instalment.
(d) The Borrowers may not deliver a Utilisation Request if, as a result of the proposed Utilisation:
(i) more than four Advances would have been made under Tranche B;
(ii) more than two Advances would have been made under Tranche C; and
(iii) more than two Advances would have been made under Tranche D.
5.2 Completion of a Utilisation Request
(a) Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(i) the proposed Utilisation Date is a Business Day within the relevant Availability Period;
(ii) the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount);
(iii) all applicable deductible items have been completed; and
(iv) the proposed Interest Period complies with Clause 9 (Interest Periods).
(b) Only one Advance may be requested in each Utilisation Request.
5.3 Currency and amount
(a) The currency specified in a Utilisation Request must be dollars.
(b) The amount of the proposed Advance must be an amount which is not more than:
(i) in respect of the Advance under Tranche A, the lower of (i) 40 per cent. of the aggregate Initial Market Value of Ship A, Ship B, Ship C, Ship D, Ship E and Ship F and (ii) $62,500,000;
(ii) in respect of Tranche B Pre-delivery Advance A, the lower of (i) $10,600,000 and (ii) 10 per cent. of the relevant Contract Price due to the relevant Builder under the relevant Shipbuilding Contract and to be financed by this Agreement on the proposed Utilisation Date;
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(iii) in respect of Tranche B Pre-delivery Advance B, the lower of (i) $10,600,000 and (ii) 10 per cent. of the relevant Contract Price due to the relevant Builder under the relevant Shipbuilding Contract and to be financed by this Agreement on the proposed Utilisation Date;
(iv) on the basis that a second Refund Guarantee relating to the fourth Contract Price Instalment in respect of the Shipbuilding Contract of Ship G has been issued, in respect of Tranche B Pre-delivery Advance C, the lower of (i) $31,800,000 and (ii) 30 per cent. of the relevant Contract Price due to the relevant Builder under the relevant Shipbuilding Contract and to be financed by this Agreement on the proposed Utilisation Date;
(v) in respect of the Tranche B Delivery Advance:
(A) if the Tranche B Pre-delivery Advance C has been utilised, the lower of (i) $21,200,000 and (ii) an amount which when aggregated with the Tranche B Pre-delivery Advances already drawn shall not exceed (A) 70 per cent. of the acquisition cost of Ship G (including the relevant part of the Contract Price and any extra amounts payable to the relevant Builder) and (B) 70 per cent. of the Initial Market Value of Ship G and to be financed by this Agreement on the proposed Utilisation Date; or
(B) if the Tranche B Pre-delivery Advance C has not been utilised, the lower of (i) $53,000,000 and (ii) an amount which when aggregated with the Tranche B Pre-delivery Advances already drawn shall not exceed (A) 70 per cent. of the acquisition cost of Ship G (including the relevant part of the Contract Price and any extra amounts payable to the relevant Builder) and (B) 70 per cent. of the Initial Market Value of Ship G and to be financed by this Agreement on the proposed Utilisation Date;
(vi) in respect of each of the Tranche C Pre-delivery Advance and Tranche D Pre-delivery Advance, the lower of (i) $6,455,000 and (ii) 10 per cent. of the relevant Contract Price due to the relevant Builder under the relevant Shipbuilding Contract and to be financed by this Agreement on the proposed Utilisation Date; and
(vii) in respect of each of Tranche C Delivery Advance and Tranche D Delivery Advance, the lower of (i) $38,730,000 and (ii) an amount which when aggregated with each of Tranche C Pre-delivery Advance and Tranche D Pre-delivery Advance respectively already drawn shall not exceed (A) 70 per cent. of the acquisition cost of each relevant Ship (including the relevant part of the Contract Price and any extra amounts payable to the relevant Builder) and (B) 70 per cent. of the Initial Market Value of the relevant Ship and to be financed by this Agreement on the proposed Utilisation Date.
(c) The amount of the proposed Advance must be an amount which is not more than the Available Facility.
(d) The amount of the proposed Delivery Advance must be an amount which would not oblige the Borrowers to provide additional security or prepay part of the Advance if the ratio set out in Clause 25 (Security Cover) were applied and notice was given by the Facility Agent under Clause 25.1 (Minimum required security cover) immediately after the Delivery Advance was made.
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5.4 Lenders' participation
(a) If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Advance available by the Utilisation Date through its Facility Office.
(b) The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Available Commitment to the Available Facility immediately before making that Advance.
(c) The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its participation in that Advance by the Specified Time.
5.5 Cancellation of Commitments
The Commitments in respect of any Tranche which are unutilised at the end of the Availability Period for such Tranche shall then be cancelled.
5.6 Payment to third parties
(a) The Borrowers irrevocably authorise the Facility Agent on each Utilisation Date, to pay to, or for the account of, the Borrower which is to utilise the relevant Advance the amounts which the Facility Agent receives from the Lenders in respect of the relevant Advance.
(b) That payment shall be made in like funds as the Facility Agent received from the Lenders in respect of the relevant Advance, in the case of each of Tranche B, Tranche C and Tranche D:
(i) each Pre-delivery Advance to the account of the relevant Builder which the Borrowers specify in the relevant Utilisation Request; and
(ii) each Delivery Advance to the account of the relevant Builder which the Borrowers specify in the relevant Utilisation Request and released in accordance with an interbank payment message in the MT199 form agreed between the Facility Agent and the relevant Builder,
or to such other account as agreed between the Facility Agent and the Borrowers.
5.7 Disbursement of Advance to third party
Payment by the Facility Agent under Clause 5.6 (Payment to third parties) to a person other than a Borrower shall constitute the making of the relevant Advance and the Borrowers shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's participation in that Advance.
5.8 Prepositioning of funds
(a) Notwithstanding that the Borrowers may not yet have satisfied all of the conditions precedent in accordance with Clause 4.2 (Further conditions precedent) and provided that:
(i) the Borrowers have submitted the Utilisation Request in accordance with Clause 5.1 (Delivery of the Utilisation Request); and
(ii) in the Facility Agent's reasonable opinion, the Borrowers are likely to satisfy all such conditions precedent not later than the Release (as defined in paragraph (b) below),
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the Lenders may, subject to the provisions of this Agreement, make available to the Borrowers the proposed Delivery Advance under Tranches B, C or D on the date specified in the Utilisation Request, being the date on which the fifth Contract Price Instalment for the relevant Ship is required to be deposited in accordance with the relevant Shipbuilding Contract with the relevant Builder's bank.
(b) Any such Utilisation pursuant to this Clause 5.8 (Prepositioning of funds) (the "Prepositioned Utilisation") shall, subject to the other provisions of this Agreement, be remitted by the Facility Agent (on behalf of the Lenders) to the relevant Builder's bank as a cash deposit with the Builder's bank through its correspondent bank in New York, and will be held by the Builder's bank to the order of the Facility Agent for release by the Facility Agent to the relevant Builder (the "Release") and only subject to such irrevocable instructions (the "Irrevocable Instructions") addressed from the Facility Agent to the Builder's bank (in such form as the Facility Agent may, in its sole discretion, require) or by the Facility Agent countersigning the protocol of delivery and acceptance in respect of the relevant Ship.
(c) The Irrevocable Instructions shall provide, among other things, that the Prepositioned Utilisation shall not be released to the Builder or held to its order and the Facility Agent shall not agree to release a Prepositioned Utilisation to the Builder, unless the Release is in a form and substance satisfactory to the Facility Agent in its sole discretion.
(d) The Borrowers shall not give any instructions to the Builder's bank that are inconsistent with the Irrevocable Instructions in respect of the Prepositioned Utilisation.
(e) If the Prepositioned Utilisation does not occur by the date specified in the Irrevocable Instructions for return of the Prepositioned Utilisation in accordance with such Irrevocable Instructions, the Borrowers shall on such date prepay the Prepositioned Utilisation, together with interest thereon (calculated in accordance with Clause 8.1 (Calculation of interest)) and any Break Costs, to the Facility Agent (for the account of the Lenders) (and irrespective of whether the Builder's Bank has then carried out such instructions), provided that any monies actually returned to the Facility Agent (for the account of the Lenders) shall be applied by the Facility Agent to prepay the Preposition Utilisation subject to the provisions of Clause 7.8 (Restrictions).
(f) The Prepositioned Utilisation under this Clause 5.8 (Prepositioning of funds) shall accrue interest at the rate described in Clause 8.1 (Calculation of interest) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on such Advance after the Utilisation Date in respect of it or, if such Utilisation Date does not occur, within three Business Days of demand by the Facility Agent and each Borrower shall, without duplication, indemnify each Finance Party against any costs, loss or liability it may incur in connection with Prepositioned Utilisation.
(g) Any amount prepaid under this Clause 5.8 (Prepositioning of funds) in respect of the Prepositioned Utilisation shall, subject to the other provisions of this Agreement, be available to be redrawn as a future Prepositioned Utilisation by the relevant Borrower where delivery of the relevant Ship under the relevant Shipbuilding Contract has been delayed, in again assisting the relevant Borrower to satisfy its obligations under the relevant Shipbuilding Contract.
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Section 4
Repayment, Prepayment and Cancellation
6 Repayment
6.1 Repayment of Loan
The Borrowers shall repay the Loan as follows:
(a) Tranche A shall be repaid by 20 equal consecutive quarterly instalments, each in an amount of $3,125,000 (each a "Tranche A Repayment Instalment"), the first of which shall be repaid on the date falling three Months after the Utilisation Date of Tranche A and the last on the Termination Date relating to Tranche A;
(b) Tranche B shall be repaid by 28 consecutive quarterly instalments, the first 20 being in an amount of $1,300,000 and the remaining eight each being in an amount of $900,000 (each a "Tranche B Repayment Instalment"), the first of which shall be repaid on the date falling three Months after the Delivery Date of Ship G and the last on the Termination Date relating to Tranche B together with a balloon instalment in an amount of $41,000,000 (the "Tranche B Balloon Instalment");
(c) Tranche C shall be repaid by 28 equal consecutive quarterly instalments, the first 20 being in an amount of $800,000 and the remaining eight each being in an amount of $550,000 (each a "Tranche C Repayment Instalment"), the first of which shall be repaid on the date falling three Months after the Delivery Date of Ship H and the last on the Termination Date relating to Tranche C together with a balloon instalment in an amount of $24,785,000 (the "Tranche C Balloon Instalment"); and
(d) Tranche D shall be repaid by 28 equal consecutive quarterly instalments, the first 20 being in an amount of $800,000 and the remaining eight each being in an amount of $550,000 (each a "Tranche D Repayment Instalment" and together with the Tranche A Repayment Instalments, the Tranche B Repayment Instalments and the Tranche C Repayment Instalments, the "Repayment Instalments"), the first of which shall be repaid on the date falling three Months after the Delivery Date of Ship I and the last on the Termination Date relating to Tranche D together with a balloon instalment in an amount of $24,785,000 (the "Tranche D Balloon Instalment" and together with the Tranche B Ballon Instalment and the Tranche C Balloon Instalment, the "Balloon Instalments").
6.2 Effect of cancellation and prepayment on scheduled repayments
(a) If the Borrowers cancel the whole or any part of any Available Commitment in accordance with Clause 7.7 (Right of repayment and cancellation in relation to a single Lender) or if the Available Commitment of any Lender is cancelled under Clause 7.1 (Illegality and Sanctions affecting a Lender) then the Repayment Instalments and, where applicable, the Balloon Instalments falling after that cancellation will reduce pro rata by the amount of the Available Commitments so cancelled.
(b) If the whole or part of any Commitment is cancelled pursuant to Clause 5.5 (Cancellation of Commitments) or Clause 7.2 (Voluntary and automatic cancellation), the Repayment Instalments and, where applicable, the Balloon Instalment for the relevant Tranche for each Repayment Date falling after that cancellation will reduce pro rata by the amount of the Commitments so cancelled.
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(c) If any part of the Loan is repaid or prepaid in accordance with Clause 7.7 (Right of repayment and cancellation in relation to a single Lender) or Clause 7.1 (Illegality and Sanctions affecting a Lender) then the Repayment Instalments and, where applicable, the Balloon Instalments for each Repayment Date falling after that repayment or prepayment will reduce pro rata by the amount of the Loan repaid or prepaid.
(d) If any part of the Loan is prepaid in accordance with Clause 7.3 (Voluntary prepayment of Loan) then the amount of the Repayment Instalments and, where applicable, the Balloon Instalment for the relevant Tranche for each Repayment Date falling after that repayment or prepayment will reduce in chronological order of maturity by the amount of the Loan repaid or prepaid or as otherwise agreed between the Facility Agent, acting with the authorisation of the Lenders, and the Borrowers.
(e) If any part of Tranche A is prepaid in accordance with Clause 7.5 (Mandatory prepayment on sale or Total Loss) or Clause 7.6 (Mandatory prepayment of Hedging Prepayment Proceeds) then the amount of the Tranche A Repayment Instalments for each Repayment Date falling after that repayment or prepayment will reduce pro rata against the Repayment Instalments and the Balloon Instalment or in such other manner as the Agent (acting on the instructions of the Lenders) may agree with the Borrowers by the amount of Tranche A repaid or prepaid.
(f) If any part of Tranche B, Tranche C or Tranche D is prepaid in accordance with Clause 7.4 (Mandatory prepayment on default under Shipbuilding Contract), Clause 7.5 (Mandatory prepayment on sale or Total Loss) or Clause 7.6 (Mandatory prepayment of Hedging Prepayment Proceeds) then the amount of the Repayment Instalments and, where applicable, the Balloon Instalment for the relevant Tranche for each Repayment Date falling after that repayment or prepayment will reduce pro rata against the Repayment Instalments and the Balloon Instalment or in such other manner as the Agent (acting on the instructions of the Lenders) may agree with the Borrowers by the amount of Tranche B, Tranche C or Tranche D repaid or prepaid, unless such mandatory repayment or prepayment is made against the full amount of Tranche B, Tranche C or Tranche D.
6.3 Termination Date
On each Termination Date, the Borrowers shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.
6.4 Reborrowing
No Borrower may reborrow any part of the Facility which is repaid.
7 Prepayment and Cancellation
7.1 Illegality and Sanctions affecting a Lender
If it becomes unlawful or contrary to Sanctions in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in an Advance or the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so; or
(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
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(b) upon the Facility Agent notifying the Borrowers, the Available Commitment of that Lender will be immediately cancelled;
(c) the Borrowers shall prepay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be immediately cancelled in the amount of the participation prepaid; and
(d) accrued interest and all other amounts accrued for that Lender under the Finance Documents shall be immediately due and payable.
7.2 Voluntary and automatic cancellation
(a) The Borrowers may, if they give the Facility Agent not less than five Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of $1,000,000 or an integral multiple of that amount) of the Available Facility. Any cancellation under this Clause 7.2 (Voluntary and automatic cancellation) shall reduce the Commitments of the Lenders rateably and the amount of the relevant Tranche(s).
(b) The unutilised Commitment (if any) of each Lender shall be automatically cancelled at close of business on the date on which the last Delivery Advance is made available.
7.3 Voluntary prepayment of Loan
The Borrowers may, if they give the Facility Agent not less than five Business Days' (or such shorter period as the Facility Agent (acting for itself) and the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $1,000,000 or an integral multiple of that amount).
7.4 Mandatory prepayment on default under Shipbuilding Contracts
If:
(a) any of the events specified in Clause 27.7 (Insolvency), Clause 27.8 (Insolvency proceedings) or Clause 27.9 (Creditors' process) occurs in relation to a Builder or a Refund Guarantor; or
(b) a Pre-delivery Contract is terminated, rescinded, cancelled, repudiated, suspended or otherwise ceases to remain in full force and effect, or is transferred, assigned, novated or otherwise disposed of to any person (other than pursuant to the relevant Security Documents); or
(c) any obligation of a Builder under a Shipbuilding Contract, or of a Refund Guarantor under a Refund Guarantee becomes unlawful or unenforceable;
(d) a party to any Pre-delivery Contract rescinds or repudiates a Pre-delivery Contract or any Pre-delivery Contract otherwise ceases to remain in full force and effect for any reason; or
(e) each of Ship G, Ship H and Ship I have not been delivered to, and accepted by, each of Borrower G, Borrower H and Borrower I, respectively, by the date specified in article VII (delivery) of the
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Shipbuilding Contract relating to Ship G, including delays permitted in article VIII (delays and extensions of time (force majeure)) of the Shipbuilding Contract relating to Ship G, or article VII (delivery) of the Shipbuilding Contracts relating to Ships H and I, including delays permitted in article VIII (delays & extensions of time of time for delivery) of the Shipbuilding Contracts relating to Ships H and I,
then:
(i) the Borrowers shall promptly notify the Facility Agent upon becoming aware of that event; and
(ii) if the Majority Lenders so require, the Facility Agent shall, by not less than 10 days' notice to the Borrowers, cancel the relevant Tranche and declare the relevant Tranche, together with interest accrued on it, and all other amounts relating to it and accrued under the Finance Documents immediately due and payable, whereupon the relevant Tranche will be cancelled and all such outstanding amounts will become immediately due and payable.
7.5 Mandatory prepayment on sale or Total Loss
(a) If a Ship is sold (without prejudice to paragraph (a) of Clause 21.12 (Disposals)) or becomes a Total Loss, the Borrowers shall on the Relevant Date prepay the Relevant Amount.
(b) Provided that no Event of Default has occurred and is continuing, any remaining proceeds of the sale or Total Loss of a Ship after the prepayment referred to in paragraph (a) above has been made together with all other amounts that are payable on any such prepayment pursuant to the Finance Documents shall be paid to the Borrower that owned the relevant Ship.
(c) In this Clause 7.5 (Mandatory prepayment on sale or Total Loss):
"Relevant Amount" means:
(i) in relation to each Ship relating to Tranche A which has been sold or become a Total Loss, an amount which after the prepayment to be made pursuant to paragraph (a) of Clause 7.5 (Mandatory prepayment on sale or Total Loss) results in the ratio set out in Clause 25 (Security Cover) being equal to the greater of (i) the ratio set out in Clause 25 (Security Cover) and (ii) the ratio set out in Clause 25 (Security Cover) which applied immediately prior to that Ship being sold or becoming a Total Loss;
(ii) in relation to each Ship relating to Tranche B, Tranche C or Tranche D which has been sold or become a Total Loss, an amount equal to the greater of (i) the Tranche applicable to that Ship and (ii) such part of the Loan as shall eliminate any shortfall arising if the ratio set out in Clause 25 (Security Cover) were applied immediately following the payment referred to in paragraph (a) of Clause 7.5 (Mandatory prepayment on sale or Total Loss); or
(iii) if the Ship which has been sold or become a Total Loss is the last Ship subject to a Mortgage, the whole of the Loan.
"Relevant Date" means:
(i) in the case of a sale of a Ship, on or before the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and
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(ii) in the case of a Total Loss of a Ship, on the earlier of:
(A) the date falling 180 days after the Total Loss Date; and
(B) the date on which the proceeds of any such Total Loss are released.
7.6 Mandatory prepayment of Hedging Prepayment Proceeds
Any Hedging Prepayment Proceeds arising as a result of any cancellation or prepayment under this Agreement shall, following payment into each Borrower's Earnings Account in accordance with Clause 26.2 (Payment of Earnings), be applied on the last day of the next Interest Period which ends after such payment in prepayment of each Tranche.
7.7 Right of repayment and cancellation in relation to a single Lender
(a) If:
(i) any sum payable to any Lender by a Transaction Obligor is required to be increased under paragraph (c) of Clause 12.2 (Tax gross-up) or under that clause as incorporated by reference or in full in any other Finance Document; or
(ii) any Lender claims indemnification from a Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs)
the Borrowers may whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.
(b) On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
(c) On the last day of each Interest Period which ends after the Borrowers have given notice of cancellation under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender's participation in the Loan.
7.8 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made, the amount of that cancellation or prepayment and, if relevant, the part of the Loan to be prepaid or cancelled.
(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and amounts (if any) payable under the Hedging Agreements in connection with that prepayment and, subject to any Break Costs, without premium or penalty.
(c) No Borrower may reborrow any part of the Facility which is prepaid.
(d) No Borrower shall repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
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(e) No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(f) If the Facility Agent receives a notice under this Clause 7 (Prepayment and Cancellation) it shall promptly forward a copy of that notice to either the Borrowers or the affected Lenders and/or Hedge Counterparties, as appropriate.
(g) If all or part of any Lender's participation in the Loan is repaid or prepaid, an amount of that Lender's Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.
7.9 Application of prepayments
Any prepayment of any part of the Loan (other than a prepayment pursuant to Clause 7.1 (Illegality and Sanctions affecting a Lender) or Clause 7.7 (Right of repayment and cancellation in relation to a single Lender)) shall be applied pro rata to each Lender's participation in that part of the Loan.
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Section 5
Costs of Utilisation
8 Interest
8.1 Calculation of interest
(a) The rate of interest on the Loan or any part of the Loan for any day during an Interest Period is the percentage rate per annum which is the aggregate of:
(i) the applicable Margin; and
(ii) Compounded Reference Rate for that day.
(b) If any day during an Interest Period for the Loan or any part of the Loan is not an RFR Banking Day, the rate of interest on the Loan or that part of the Loan for that day will be the rate applicable to the immediately preceding RFR Banking Day.
8.2 Payment of interest
The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an "Interest Payment Date").
8.3 Default interest
(a) If a Transaction Obligor fails to pay any amount payable by it under a Finance Document other than a Hedging Agreement on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which is 2 per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent. Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Obligors on demand by the Facility Agent.
(b) Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8.4 Notifications
(a) The Facility Agent shall:
(i) no later than two Business Days prior to each Interest Payment Date, notify:
(A) the Borrowers of that Interest Payment; and
(B) each Lender of the proportion of that Interest Payment which relates to that Lender's participation in the Loan or the relevant part of the Loan; and
(ii) upon a Lender's or a Borrower's request and within two Business Days of such request, notify the Lenders or the Borrowers (as applicable) of:
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(A) each applicable rate of interest relating to the determination of that Interest Payment; and
(B) to the extent it is then determinable, the Market Disruption Rate (if any) relating to the Loan or the relevant part of the Loan.
This paragraph (a) shall not apply to any Interest Payment determined pursuant to Clause 10.3 (Cost of funds).
(b) The Facility Agent shall promptly notify the Borrowers of each Funding Rate relating to the Loan or any part of the Loan.
(c) The Facility Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest relating to the Loan or any part of the Loan to which Clause 10.3 (Cost of funds) applies.
(d) This Clause 8.4 (Notifications) shall not require the Facility Agent to make any notification to any Party on a day which is not a Business Day.
8.5 Hedging
(a) On or after the date of this Agreement, the Borrowers may enter into Hedging Agreements with the consent of the Hedge Counterparties and shall after that date maintain such Hedging Agreements in accordance with this Clause 8.5 (Hedging).
(b) If a Hedging Agreement is entered into after a Mortgage has been registered, the relevant Borrower shall (at the cost of the Borrowers) enter into any supplemental documentation and/or addenda to that Mortgage as reasonably required by the Facility Agent.
(c) The aggregate notional amount of the transactions in respect of the Hedging Agreements shall be no more than 105 per cent. of the aggregate amount of the Loan.
(d) Each Hedging Agreement shall:
(i) be with a Hedge Counterparty;
(ii) be for a term ending no later than the Termination Date;
(iii) have settlement dates coinciding with the Interest Payment Dates;
(iv) be based on a 2002 ISDA Agreement and otherwise in form and substance satisfactory to the Facility Agent; and
(v) provide that the Termination Currency (as defined in the relevant Hedging Agreement) shall be dollars.
(e) The rights of each Borrower under the Hedging Agreements shall be charged or assigned by way of security under a Hedging Agreement Security.
(f) The parties to each Hedging Agreement must comply with the terms of that Hedging Agreement.
(g) Neither a Hedge Counterparty nor Borrower may amend, supplement, extend or waive the terms of any Hedging Agreement without the consent of the Security Agent.
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(h) Paragraph (g) above shall not apply to an amendment, supplement or waiver that is administrative and mechanical in nature or does not give rise to a conflict with any provision of this Agreement or the Hedging Agreement Security.
(i) If, at any time, the aggregate notional amount of the transactions in respect of the Hedging Agreements exceeds or, as a result of any repayment or prepayment under this Agreement, will exceed 105 per cent. of the Loan at that time, the Borrowers must promptly notify the Facility Agent and must, at the request of the Facility Agent, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Facility Agent so that it no longer exceeds or will not exceed 105 per cent. of the Loan then or that will be outstanding.
(j) Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreements in accordance with paragraph (i) above will be apportioned as between those transactions pro rata.
(k) Paragraph (i) above shall not apply to any transactions in respect of any Hedging Agreement under which no Borrower has any actual or contingent indebtedness.
(l) Neither a Hedge Counterparty nor a Borrower may terminate or close out any transactions in respect of any Hedging Agreement (in whole or in part) except:
(i) in accordance with paragraphs (i)-(k) above;
(ii) on the occurrence of an Illegality, Tax Event, Force Majeure or failure to pay (as such expressions are defined in the relevant Hedging Agreement);
(iii) if that Hedge Counterparty ceases to be a Lender pursuant to the terms of this Agreement provided that no Event of Default is continuing, the Hedge Counterparty ceases to be a Lender (other than under Clause 7.1 (Illegality and Sanctions affecting a Lender) and Clause 7.7 (Right of repayment and cancellation in relation to a single Lender)), it shall use reasonable endeavours to novate the relevant Hedging Agreement in accordance with Clause 28.11 (Change of Hedge Counterparty);
(iv) in the case of termination or closing out by a Hedge Counterparty, if the Facility Agent serves notice under sub-paragraph (ii) of paragraph (a) of Clause 27.22 (Acceleration) or, having served notice under sub-paragraph (iii) of paragraph (a) of Clause 27.22 (Acceleration), makes a demand;
(v) in the case of any other termination or closing out by a Hedge Counterparty, or a Borrower, with the consent of the Facility Agent; or
(vi) if the Secured Liabilities (other than in respect of the Hedging Agreements) have been irrevocably and unconditionally paid and discharged in full;
(m) If a Hedge Counterparty, or a Borrower terminates or closes out a transaction in respect of a Hedging Agreement (in whole or in part) in accordance with sub-paragraphs (ii), (iii), or (in the case of a Hedge Counterparty only) (iv) of paragraph (l) above, it shall promptly notify the Facility Agent of that termination or close out.
(n) If a Hedge Counterparty is entitled to terminate or close out any transaction in respect of any Hedging Agreement under sub-paragraph (iv) of paragraph (l) above, such Hedge Counterparty
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shall promptly terminate or close out such transaction following a request to do so by the Security Agent.
(o) A Hedge Counterparty may only suspend making payments under a transaction in respect of a Hedging Agreement if a Borrower is in breach of its payment obligations under any transaction in respect of that Hedging Agreement.
(p) Each Hedge Counterparty consents to, and acknowledges notices of, the charging or assigning by way of security by each Borrower pursuant to the relevant Hedging Agreement Security of its rights under the Hedging Agreements to which it is party in favour of the Security Agent.
(q) Any such charging or assigning by way of security is without prejudice to, and after giving effect to, the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.
(r) The Security Agent shall not be liable for the performance of any of a Borrower's obligations under a Hedging Agreement.
(s) No Borrower or a Hedge Counterparty shall assign any of its rights or transfer any of its rights or obligations under a Hedging Agreement without the consent of the Facility Agent acting on the instructions of the Majority Lenders.
9 Interest Periods
9.1 Selection of Interest Periods
(a) The Borrowers may select the Interest Period for each Tranche in the Utilisation Request for Tranche A and, in relation to Tranches B, C and D, for the first Advance in that Tranche. Subject to paragraphs (f) and (h) below and Clause 9.2 (Changes to Interest Periods), the Borrowers may select each subsequent Interest Period in respect of a Tranche in a Selection Notice.
(b) Each Selection Notice is irrevocable and must be delivered to the Facility Agent by the Borrowers not later than the Specified Time.
(c) If the Borrowers fail to select an Interest Period in the first Utilisation Request or fail to deliver a Selection Notice to the Facility Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraphs (f) and (h) below and Clause 9.2 (Changes to Interest Periods), be the period specified in the Reference Rate Terms.
(d) Subject to this Clause 9 (Interest Periods), the Borrowers may select an Interest Period any period specified in the Reference Rate Terms or any other period agreed between the Borrowers, the Facility Agent and the Lenders.
(e) An Interest Period in respect of a Tranche or any part of a Tranche shall not extend beyond the relevant Termination Date.
(f) In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of the relevant Tranche equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of that Tranche.
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(g) The first Interest Period for each Tranche shall start on the first Utilisation Date relating to such Tranche and, subject to paragraph (h) below, each subsequent Interest Period shall start on the last day of its preceding Interest Period.
(h) The first Interest Period for the second and any subsequent Advance under a Tranche shall start on the Utilisation Date of such Advance and end on the last day of the Interest Period applicable to that Tranche on the date on which such Advance is made.
(i) Except for the purposes of paragraphs (f) and (h) above and Clause 9.2 (Changes to Interest Periods), each Tranche shall have one Interest Period only at any time.
(j) No Interest Period shall be longer than six Months.
9.2 Changes to Interest Periods
(a) In respect of a Repayment Instalment, before the commencement of an Interest Period for the relevant Tranche, the Facility Agent may establish an Interest Period for a part of the relevant Tranche equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of that Tranche shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 (Selection of Interest Periods).
(b) If the Facility Agent makes any change to an Interest Period referred to in this Clause 9.2 (Changes to Interest Periods), it shall promptly notify the Borrowers and the Lenders.
9.3 Non-Business Days
Any rules specified as "Business Day Conventions" in the Reference Rate Terms, shall apply to each Interest Period.
10 Changes to the Calculation of Interest
10.1 Interest calculation if no RFR or Central Bank Rate
If:
(a) there is no RFR or Central Bank Rate for the purposes of calculating the Daily Non-Cumulative Compounded RFR Rate for an RFR Banking Day during an Interest Period for the Loan or any part of the Loan; and
(b) "Cost of funds will apply as a fallback" is specified in the Reference Rate Terms,
Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for that Interest Period.
10.2 Market disruption
If:
(a) a Market Disruption Rate is specified in the Reference Rate Terms; and
(b) before the Reporting Time for the Loan or any part of the Loan, the Facility Agent receives notifications from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 66.67 per cent. of the Loan or the relevant part of the Loan as appropriate)
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that its cost of funds relating to its participation in the Loan or that part of the Loan would be in excess of the applicable Market Disruption Rate,
then Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
10.3 Cost of funds
(a) If this Clause 10.3 (Cost of funds) applies to the Loan or part of the Loan for an Interest Period, Clause 8.1 (Calculation of interest) shall not apply to the Loan or that part of the Loan for that Interest Period and the rate of interest on the Loan or that part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i) the Margin; and
(ii) the weighted average of the rates notified to the Facility Agent by each Lender as soon as practicable and in any event by the Reporting Time for the Loan or that part of the Loan,
to be that which expresses as a percentage rate per annum its cost of funds relating to its participation in the Loan or that part of the Loan.
(b) If this Clause 10.3 (Cost of funds) applies and the Facility Agent or the Borrowers so require, the Facility Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
(c) Subject to Clause 44.4 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.
(d) If paragraph (e) below does not apply and any rate notified to the Facility Agent under sub‑paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
(e) If this Clause 10.3 (Cost of funds) applies pursuant to Clause 10.2 (Market disruption) and a Lender's Funding Rate is less than the applicable Market Disruption Rate that Lender's cost of funds relating to its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of sub-paragraph (ii) of paragraph (a) above, to be the applicable Market Disruption Rate.
(f) If this Clause 10.3 (Cost of funds) applies but any Lender does not notify a rate to the Facility Agent by the time specified in sub-paragraph (ii) of paragraph (a) above, the rate of interest shall be calculated on the basis of the rates notified by the remaining Lenders.
(g) If this Clause 10.3 (Cost of funds) applies, the Facility Agent shall, as soon as practicable, notify the Borrower.
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11 Fees
11.1 Commitment fee
The Borrowers shall pay to the Facility Agent (for the account of each Lender) a commitment fee in accordance with the relevant Fee Letter.
11.2 Other fees
The Borrowers shall pay to the relevant Finance Party the relevant fees in accordance with each Fee Letter.
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Section 6
Additional Payment Obligations
12 Tax Gross Up and Indemnities
12.1 Definitions
(a) In this Agreement:
"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.
"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).
(b) Unless a contrary indication appears, in this Clause 12 (Tax Gross Up and Indemnities) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
(c) This Clause 12 (Tax Gross Up and Indemnities) shall not apply to any Hedging Agreement.
12.2 Tax gross-up
(a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b) The Borrowers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrowers and that Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(e) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance
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12.5 Stamp taxes
The Obligors shall pay and, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability which that Secured Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
12.6 VAT
(a) All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).
(b) If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
(i) (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
(ii) (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
(c) Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
(d) Any reference in this Clause 12.6 (VAT) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union or equivalent provisions imposed elsewhere) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or
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the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).
(e) In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.
12.7 FATCA Information
(a) Subject to paragraph (c) below, each Party shall, within 10 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 as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.
(b) If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(c) Paragraph (a) above shall not oblige any Finance Party to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any fiduciary duty; or
(iii) any duty of confidentiality.
(d) If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
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(e) If a Borrower is a US Tax Obligor, or the Facility Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:
(i) where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;
(ii) where a Borrower is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender, the relevant Transfer Date; or
(iii) where a Borrower is not a US Tax Obligor, the date of a request from the Facility Agent,
supply to the Facility Agent:
(iv) a withholding certificate on Form W-8, Form W-9 or any other relevant form; or
(v) any withholding statement or other document, authorisation or waiver as the Facility Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
(f) The Facility Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the Borrowers.
(g) If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Facility Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Facility Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Facility Agent). The Facility Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrowers.
(h) The Facility Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without further verification. The Facility Agent shall not be liable for any action taken by it under or in connection with paragraphs (e), (f) or (g) above.
12.8 FATCA Deduction
(a) 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 Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(b) 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 each Obligor and the Facility Agent and the Facility Agent shall notify the other Finance Parties.
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13 Increased Costs
13.1 Increased costs
(a) Subject to Clause 13.3 (Exceptions), the Borrowers shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
(ii) compliance with any law or regulation made,
in each case after the date of this Agreement; or
(iii) the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.
(b) In this Agreement:
(i) "Basel III" means:
(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(B) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
(C) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
(ii) "CRD IV" means:
(A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012, as amended by, amongst others, Regulation (EU) 2019/876;
(B) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended by, amongst others, Directive (EU) 2019/878; and
(C) any other law or regulation which implements Basel III.
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(iii) "Increased Costs" means:
(A) a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;
(B) an additional or increased cost; or
(C) a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
13.2 Increased cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrowers.
(b) Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.
13.3 Exceptions
Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by an Obligor;
(b) attributable to a FATCA Deduction required to be made by a Party;
(c) compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied);
(d) compensated for by any payment made pursuant to Clause 14.3 (Mandatory Cost);
(e) attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or
(f) incurred by a Hedge Counterparty in its capacity as such.
14 Other Indemnities
14.1 Currency indemnity
(a) If any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:
(i) making or filing a claim or proof against that Obligor; or
(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
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that Obligor shall, as an independent obligation, on demand, indemnify each Secured Party to which that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
(c) This Clause 14.1 (Currency indemnity) does not apply to any sum due to a Hedge Counterparty in its capacity as such.
14.2 Other indemnities
(a) Each Obligor shall, on demand, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:
(i) the occurrence of any Event of Default;
(ii) a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 33 (Sharing among the Finance Parties);
(iii) funding, or making arrangements to fund, its participation in an Advance requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Secured Party alone); or
(iv) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers.
(b) Each Obligor shall, on demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an "Indemnified Person"), against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Ship unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
(c) Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
(i) arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
(ii) in connection with any Environmental Claim.
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(d) Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 (Other indemnities) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.
14.3 Mandatory Cost
Each Borrower shall, on demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:
(a) in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank (or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and
(b) in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),
which, in each case, is referable to that Lender's participation in the Loan.
14.4 Indemnity to the Facility Agent
Each Obligor shall, on demand, indemnify the Facility Agent against:
(a) any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:
(i) investigating any event which it reasonably believes is a Default; or
(ii) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
(iii) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and
(b) any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 34.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents.
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14.5 Indemnity to the Security Agent
(a) Each Obligor shall, on demand, indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them:
(i) in relation to or as a result of:
(A) any failure by a Borrower to comply with its obligations under Clause 16 (Costs and Expenses);
(B) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
(C) the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;
(D) the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;
(E) any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
(F) any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and
(G) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents.
(ii) acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).
(b) The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 (Indemnity to the Security Agent) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.
15 Mitigation by the Finance Parties
15.1 Mitigation
(a) Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality and Sanctions affecting a Lender), Clause 12 (Tax Gross Up and Indemnities), Clause 13 (Increased Costs) or paragraph (a) of Clause 14.3 (Mandatory Cost) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
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(b) Paragraph (a) above does not in any way limit the obligations of any Transaction Obligor under the Finance Documents.
15.2 Limitation of liability
(a) Each Obligor shall, on demand, indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if either:
(i) a Default has occurred and is continuing; or
(ii) in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
16 Costs and Expenses
16.1 Transaction expenses
The Obligors shall, within 5 Business Days (in Paris, France) of demand, pay the Facility Agent, the Security Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator the amount of all documented costs and expenses (including legal fees) reasonably incurred by any Secured Party in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
(a) this Agreement and any other documents referred to in this Agreement or in a Security Document; and
(b) any other Finance Documents executed after the date of this Agreement.
16.2 Amendment costs
Subject to Clause 16.4 (Reference rate transition costs) if:
(a) a Transaction Obligor requests an amendment, waiver or consent; or
(b) an amendment is required either pursuant to Clause 34.9 (Change of currency); or
(c) a Transaction Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,
the Obligors shall, on demand, reimburse each of the Facility Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by each Secured Party in responding to, evaluating, negotiating or complying with that request or requirement.
16.3 Enforcement and preservation costs
The Obligors shall, on demand, pay to each Secured Party the amount of all costs and expenses (including legal fees) incurred by that Secured Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against that Secured Party as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
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16.4 Reference rate transition costs
The Borrowers shall on demand reimburse each of the Facility Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by each Secured Party in connection with:
(a) the negotiation or entry into of any Reference Rate Supplement or Compounding Methodology Supplement; or
(b) any amendment, waiver or consent relating to:
(i) any Reference Rate Supplement or Compounding Methodology Supplement; or
(ii) any change arising as a result of an amendment required under Clause 44.4 (Changes to reference rates).
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Section 7
Joint and Several Liability of Borrowers and Guarantee
17 Joint and Several Liability of the Borrowers
17.1 Joint and several liability
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.
17.2 Waiver of defences
The liabilities and obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
(b) any Lender or the Security Agent entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
(c) any Lender or the Security Agent releasing any other Borrower or any Security created by a Finance Document; or
(d) any time, waiver or consent granted to, or composition with any other Borrower or other person;
(e) the release of any other Borrower or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(f) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any other Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(g) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any other Borrower or any other person;
(h) any amendment, novation, supplement, extension, restatement (however fundamental, and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(i) any unenforceability, illegality or invalidity of any obligation or any person under any Finance Document or any other document or security; or
(j) any insolvency or similar proceedings.
17.3 Principal Debtor
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no
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Borrower shall, in any circumstances, be construed to be a surety for the obligations of any other Borrower under this Agreement.
17.4 Borrower restrictions
(a) Subject to paragraph (b) below, during the Security Period no Borrower shall:
(i) claim any amount which may be due to it from any other Borrower whether in respect of a payment made under, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or
(ii) take or enforce any form of security from any other Borrower for such an amount, or in any way seek to have recourse in respect of such an amount against any asset of any other Borrower; or
(iii) set off such an amount against any sum due from it to any other Borrower; or
(iv) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower; or
(v) exercise or assert any combination of the foregoing.
(b) If during the Security Period, the Facility Agent, by notice to a Borrower, requires it to take any action referred to in paragraph (a) above in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Facility Agent's notice.
17.5 Deferral of Borrowers' rights
Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Borrower will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:
(a) to be indemnified by any other Borrower; or
(b) to claim any contribution from any other Borrower in relation to any payment made by it under the Finance Documents.
18 Guarantee and Indemnity – Hedge Guarantors
18.1 Guarantee and indemnity
Each Hedge Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to each Hedge Counterparty punctual performance by each Borrower of all that Borrower's obligations under the Hedging Agreements;
(b) undertakes with each Hedge Counterparty that whenever a Borrower does not pay any amount when due under or in connection with any Hedging Agreement, that Hedge Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
(c) agrees with each Hedge Counterparty that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify
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that Hedge Counterparty immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Hedging Agreement on the date when it would have been due. The amount payable by a Hedge Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors) if the amount claimed had been recoverable on the basis of a guarantee.
18.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Borrower under the Hedging Agreements, regardless of any intermediate payment or discharge in whole or in part.
18.3 Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Borrower or any security for those obligations or otherwise) is made by a Secured Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Hedge Guarantor under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors) will continue or be reinstated as if the discharge, release or arrangement had not occurred.
18.4 Waiver of defences
The obligations of each Hedge Guarantor under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors) and in respect of any Transaction Security will not be affected or discharged by an act, omission, matter or thing which, but for this Clause 18.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors) or in respect of any Transaction Security (without limitation and whether or not known to it or any Secured Party) including:
(a) any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;
(b) the release of any other Transaction Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Transaction Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Transaction Obligor or any other person;
(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
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(f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
(g) any insolvency or similar proceedings.
18.5 Immediate recourse
Each Hedge Guarantor waives any right it may have of first requiring any Secured Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
18.6 Appropriations
Until all amounts which may be or become payable by the Borrowers under or in connection with the Hedging Agreements have been irrevocably paid in full, each Secured Party (or any trustee or agent on its behalf) may:
(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Secured Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Hedge Guarantor shall be entitled to the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys received from any Hedge Guarantor or on account of any Hedge Guarantor's liability under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors).
18.7 Deferral of Hedge Guarantors' rights
All rights which each Hedge Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against any Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Secured Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent otherwise directs, no Hedge Guarantor will exercise any rights which it may have (whether in respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 18 (Guarantee and Indemnity – Hedge Guarantors):
(a) to be indemnified by a Transaction Obligor;
(b) to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor's obligations under the Finance Documents;
(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Secured Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Secured Party;
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(d) to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which any Hedge Guarantor has given a guarantee, undertaking or indemnity under Clause 18 (Guarantee and Indemnity – Hedge Guarantors);
(e) to exercise any right of set-off against any Transaction Obligor; and/or
(f) to claim or prove as a creditor of any Transaction Obligor in competition with any Secured Party.
If a Hedge Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Secured Parties by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Secured Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 34 (Payment Mechanics).
18.8 Additional security
This guarantee and any other Security given by a Hedge Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Secured Party or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.
18.9 Applicability of provisions of Guarantee to other Security
Clauses 18.2 (Continuing guarantee), 18.3 (Reinstatement), 18.4 (Waiver of defences), 18.5 (Immediate recourse), 18.6 (Appropriations), 18.7 (Deferral of Hedge Guarantors' rights) and 18.8 (Additional security) shall apply, with any necessary modifications, to any Security which a Hedge Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.
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Section 8
Representations, Undertakings and Events of Default
19 Representations
19.1 General
Each Obligor makes the representations and warranties set out in this Clause 19 (Representations) to each Finance Party on the date of this Agreement.
19.2 Status
(a) It is a limited liability corporation duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.
(b) It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.
19.3 Share capital and ownership
(a) Each of Borrower A, Borrower H and Borrower I is authorised to issue 500 registered shares with a par value of one dollar per share, all of which have been issued in registered form, fully paid and non-assessable.
(b) Each of Borrower B, Borrower C, Borrower D, Borrower E and Borrower F is authorised to issue 500 registered and/or bearer shares without par value, all of which have been issued in registered form, fully paid and non-assessable.
(c) Borrower G is authorised to issue 500 registered shares without par value, all of which have been issued in registered form, fully paid and non-assessable.
(d) The legal title to and beneficial interest in the shares in each Borrower is held by the relevant Shareholder free of any Security or any other claim and each Borrower is 100 per cent. owned, indirectly, by the Guarantor.
(e) None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
19.4 Binding obligations
The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.
19.5 Validity, effectiveness and ranking of Security
(a) Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery create the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.
(b) No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.
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(c) The Transaction Security granted by it to the Security Agent or any other Secured Party has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking Security.
(d) No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.
19.6 Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:
(a) any law or regulation applicable to it;
(b) the constitutional documents of any Transaction Obligor or any member of the Group; or
(c) any agreement or instrument binding upon it or any member of the Group or any member of the Group's assets or constitute a default or termination event (however described) under any such agreement or instrument.
19.7 Power and authority
(a) It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:
(i) its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents;
(ii) in the case of Borrower G, its registration of Ship G under its Approved Flag;
(iii) in the case of Borrower H, its registration of Ship H under its Approved Flag; and
(iv) in the case of Borrower I, its registration of Ship I under its Approved Flag.
(b) No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.
19.8 Validity and admissibility in evidence
All Authorisations required or desirable:
(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
(b) to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
have been obtained or effected and are in full force and effect.
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19.9 Governing law and enforcement
(a) The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.
(b) Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.
19.10 Insolvency
No:
(a) corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 27.8 (Insolvency proceedings); or
(b) creditors' process described in Clause 27.9 (Creditors' process),
has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 27.7 (Insolvency) applies to a member of the Group.
19.11 No filing or stamp taxes
Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents except:
(a) permanent registration of the Mortgage relating to Ship C at the registry of the Approved Flag of Ship C, which registration will be made promptly after the date of that Mortgage; and
(b) permanent registration of the Mortgage relating to Ship F at the registry of the Approved Flag of Ship F, which registration will be made promptly after the date of that Mortgage.
19.12 Deduction of Tax
It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.
19.13 No default
(a) No Event of Default and, on the date of this Agreement and on each Utilisation Date, no Default is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
(b) No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which might have a Material Adverse Effect.
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19.14 No misleading information
(a) Any factual information provided by any member of the Group for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
(b) The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
(c) Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.
19.15 Financial Statements
(a) The Original Financial Statements were prepared in accordance with GAAP consistently applied.
(b) The Original Financial Statements give a true and fair view of the Guarantor's consolidated financial condition as at the end of the relevant financial year and its results of operations during the relevant financial year.
(c) There has been no material adverse change in the Obligors' or the Guarantor's assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Guarantor) since 31 December 2024.
(d) The Guarantor's most recent financial statements delivered pursuant to Clause 20.2 (Financial statements):
(i) have been prepared in accordance with Clause 20.3 (Requirements as to financial statements); and
(ii) give a true and fair view of (if audited) or fairly represent (if unaudited) the Group's consolidated financial condition as at the end of the relevant financial year and operations during the relevant financial year.
(e) Since the date of the most recent financial statements delivered pursuant to Clause 20.2 (Financial statements) there has been no material adverse change in the business, assets or consolidated financial condition of the Group.
19.16 Pari passu ranking
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
19.17 No proceedings pending or threatened
(a) No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge
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and belief (having made due and careful enquiry)) been started or threatened in writing against it or any other Transaction Obligor or any member of the Group.
(b) No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any other Transaction Obligor or any member of the Group.
19.18 Validity and completeness of the Deed of Release and Pre-delivery Contracts
(a) With effect on and from the Utilisation Date of Tranche A:
(i) each Deed of Release constitutes legal, valid, binding and enforceable obligations of the relevant Existing Facility Agent; and
(ii) no amendments or additions to each Deed of Release have been agreed nor have any rights under each Deed of Release been waived.
(b) Each of the Shipbuilding Contracts and the Refund Guarantees constitutes legal, valid, binding and enforceable obligations of the relevant Builder and the relevant Refund Guarantor respectively.
(c) The copies of the Pre-delivery Contracts delivered to the Facility Agent before the date of this Guarantee are true and complete copies.
(d) No amendments or additions to any Pre-delivery Contracts have been agreed nor have any rights under any Pre-delivery Contract been waived.
19.19 No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, inducement, commission, discount or other benefit or payment (however described) to any Borrower or any other member of the Group, any Builder or a third party in connection with the purchase by a Borrower of a Ship, other than as disclosed to the Facility Agent in writing on or before the date of this Agreement.
19.20 Valuations
(a) All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Facility Agent in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.
(b) It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.
(c) There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
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19.21 No breach of laws
It has not (and no other member of the Group has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
19.22 No Charter
No Ship is subject to any Charter other than a Permitted Charter.
19.23 Compliance with Environmental Laws
All Environmental Laws relating to the ownership, operation and management of each Ship and the business of each member of the Group (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
19.24 No Environmental Claim
No Environmental Claim has been made or threatened against any member of the Group or any Ship which might reasonably be expected to have a Material Adverse Effect.
19.25 No Environmental Incident
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.
19.26 ISM and ISPS Code compliance
All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, an Approved Manager and each Ship have been complied with.
19.27 Taxes paid
(a) It is not and no other member of the Group is materially overdue in the filing of any Tax returns and it is not (and no other member of the Group is) overdue in the payment of any amount in respect of Tax.
(b) No claims or investigations are being, or to the Borrower's knowledge, are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.
19.28 Financial Indebtedness
No Borrower has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
19.29 Overseas companies
No Transaction Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Facility Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.
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19.30 Good title to assets
It has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
19.31 Ownership
(a) Each of Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F is the sole legal and beneficial owner of the relevant Ship, its Earnings and its Insurances.
(b) Each of Borrower G, Borrower H and Borrower I is the sole legal and beneficial owner of all rights and interests which each of the relevant Pre-delivery Contracts creates in its favour.
(c) With effect on and from the relevant Delivery Date, each of Borrower G, Borrower H and Borrower I will be the sole legal and beneficial owner of the relevant Ship, its Earnings and its Insurances.
(d) With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.
(e) The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of the Borrowers on creation or enforcement of the security conferred by the Security Documents.
19.32 Centre of main interests and establishments
For the purposes of The Council of the European Union Regulation No. 2015/848 on Insolvency Proceedings (recast) (the "Regulation"), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is not situated in the US or the United Kingdom and it has no "establishment" (as that term is used in Article 2(10) of the Regulation) in the US or the United Kingdom.
19.33 Place of business
No Obligor has a place of business in the US or the United Kingdom and its head office functions are carried out at the address stated in Part A of Schedule 1 (The Parties).
19.34 No employee or pension arrangements
No Obligor has any employees or any liabilities under any pension scheme.
19.35 Sanctions
None of:
(a) the Transaction Obligors, nor any of their respective Subsidiaries, directors or officers, Affiliates or employees or, to the best knowledge of the Transaction Obligors, their agents is an individual or entity that is; and
(b) the Charterers in respect of a Ship, nor any of their respective Subsidiaries is an individual or entity that is:
(i) a Sanctioned Person; or
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(ii) located, organised or resident in a Sanctioned Country; or
(iii) in violation of Sanctions, anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules.
19.36 US Tax Obligor
No Transaction Obligor is a US Tax Obligor.
19.37 Anti-Money Laundering
No Transaction Obligor nor any of their Subsidiaries, directors or officers, or, to the best knowledge of the Obligors, any Affiliate, agent or employee of any Transaction Obligor, has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules in any applicable jurisdiction and they have each instituted and maintain policies and procedures designed to prevent violation of such laws, regulations and rules.
19.38 Repetition
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of each Utilisation Request and the first day of each Interest Period, except that the representations contained in paragraphs (a) and (b) of Clause 19.15 (Financial Statements) will cease to be so made once subsequent financial statements have been delivered under this Agreement.
20 Information Undertakings
20.1 General
The undertakings in this Clause 20 (Information Undertakings) remain in force throughout the Security Period unless the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders), may otherwise permit.
20.2 Financial statements
The Borrowers procure that the Guarantor shall supply to the Facility Agent in sufficient copies for all the Lenders:
(a) as soon as they become available, but in any event within 180 days after the end of each of its financial years its annual audited consolidated financial statements for that financial year, commencing with its financial year ended on 31 December 2025; and
(b) as soon as the same become available, but in any event within 90 days after the end of each half of its financial years its semi-annual unaudited management accounts for that financial half year, commencing with its financial half year ended on 30 June 2025.
20.3 Requirements as to financial statements
(a) Each set of financial statements delivered by a Borrower pursuant to Clause 20.2 (Financial statements) shall be certified by an officer of the Guarantor as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the
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date as at which those financial statements were drawn up, if these have not been filed with the US Securities and Exchange Commission.
(b) The Borrowers shall procure that each set of financial statements of the Guarantor delivered pursuant to Clause 20.2 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for the Guarantor unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in GAAP, the accounting practices or reference periods, unless such change is described in the filings made with the US Securities and Exchange Commission, and its auditors deliver to the Facility Agent:
(i) a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and
(ii) sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether clause 10 (financial covenants) of the Guarantee has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
20.4 DAC6
(a) In this Clause 20.4 (DAC6), "DAC6" means the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU.
(b) The Borrowers shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(i) promptly upon the making of such analysis or the obtaining of such advice, any analysis made or advice obtained on whether any transaction contemplated by the Transaction Documents or any transaction carried out (or to be carried out) in connection with any transaction contemplated by the Transaction Documents contains a hallmark as set out in Annex IV of DAC6 or is required to be disclosed pursuant to The International Tax Enforcement (Disclosable Arrangements) Regulations 2023; and
(ii) promptly upon the making of such reporting and to the extent permitted by applicable law and regulation, any reporting made to any governmental or taxation authority by or on behalf of any member of the Group or by any adviser to such member of the Group in relation to DAC6 or any law or regulation which implements DAC6 or under The International Tax Enforcement (Disclosable Arrangements) Regulations 2023 and any unique identification number issued by any governmental or taxation authority to which any such report has been made (if available).
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20.5 Information: miscellaneous
Each Obligor shall and shall procure that each other Transaction Obligor shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(a) all material documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched, unless such documents have already been disclosed in the filings made with the US Securities and Exchange Commission;
(b) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened in writing or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;
(c) promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Group and which might have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding, in relation to any Borrower, $1,000,000 or, in relation to any other member of the Group, $5,000,000 (or their equivalent in other currencies);
(d) promptly, its constitutional documents where these have been amended or varied, unless such documents have already been disclosed in the filings made with the US Securities and Exchange Commission;
(e) promptly, such further information and/or documents regarding:
(i) each Ship, goods transported on each Ship, its Earnings and its Insurances;
(ii) the Security Assets;
(iii) compliance of the Transaction Obligors with the terms of the Finance Documents;
(iv) the financial condition, business and operations of any member of the Group,
as any Finance Party (through the Facility Agent) may reasonably request; and
(f) promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it or as may be required by any regulatory authority.
20.6 Notification of Default
(a) Each Obligor shall, and shall procure that each other Transaction Obligor shall, notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b) Promptly upon a request by the Facility Agent, each Borrower shall supply to the Facility Agent a certificate signed by an officer on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
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20.7 "Know your customer" checks
(a) If:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation (including, without limitation, any law or regulation of the European Union, Switzerland and the US) made after the date of this Agreement;
(ii) any change in the status of a Transaction Obligor (including, without limitation, a change of ownership of a Transaction Obligor (other than an Approved Manager)) after the date of this Agreement; or
(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
obliges a Finance Party (or, in the case of sub-paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) in order for such Finance Party or, in the case of the event described in sub-paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(b) Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
21 General Undertakings
21.1 General
The undertakings in this Clause 21 (General Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
21.2 Authorisations
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly:
(a) obtain, comply with and do all that is necessary to maintain in full force and effect;
(b) supply certified copies to the Facility Agent of,
any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the Approved Flag at any time of each Ship to enable it to:
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(i) perform its obligations under the Transaction Documents to which it is a party;
(ii) ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction and in the state of the Approved Flag at any time of each Ship of any Transaction Document to which it is a party;
(iii) own and operate each Ship (in the case of the Borrowers); and
(c) without prejudice to the generality of the above, ensure that if, but for the obtaining of an Authorisation, an Obligor would be in breach of any of the provisions of this Agreement which relate to Sanctions or, by reason of Sanctions, would be prohibited from performing any provision of this Agreement, such an Authorisation is obtained so as to avoid such breach or to enable such performance.
21.3 Compliance with laws
Each Obligor shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
21.4 Environmental compliance
Each Obligor shall, and shall procure that each other Transaction Obligor will:
(a) comply with all applicable Environmental Laws;
(b) obtain, maintain and ensure compliance with all requisite Environmental Approvals;
(c) implement procedures to monitor compliance with and to prevent liability under any applicable Environmental Law,
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
21.5 Environmental Claims
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly upon becoming aware of the same, inform the Facility Agent in writing of:
(a) any Environmental Claim against any member of the Group which is current, pending or threatened; and
(b) any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
21.6 Taxation
(a) Each Obligor shall, and shall procure that each other Transaction Obligor will, pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
(i) such payment is being contested in good faith;
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(ii) adequate reserves are maintained for those Taxes and the costs required to contest them and both have been disclosed in its latest financial statements delivered to the Facility Agent under Clause 20.2 (Financial statements); and
(iii) such payment can be lawfully withheld.
(b) No Obligor shall change its residence for Tax purposes.
21.7 Overseas companies
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly inform the Facility Agent if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Facility Agent regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.
21.8 No change to centre of main interests
No Obligor shall change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) to either jurisdiction referred to in Clause 19.32 (Centre of main interests and establishments) and it will create no "establishment" (as that term is used in Article 2(10) of the Regulation) in the US or the United Kingdom.
21.9 Pari passu ranking
Each Obligor shall, and shall procure that each other Transaction Obligor will, ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
21.10 Title
(a) Each of Borrower A, Borrower B, Borrower C, Borrower D, Borrower E and Borrower F shall hold the legal title to, and own the entire beneficial interest in the relevant Ship, its Earnings and its Insurances.
(b) Each of Borrower G, Borrower H and Borrower I shall hold the legal title to, and own the entire beneficial interest in:
(i) the relevant Pre-delivery Contracts; and
(ii) with effect from the Delivery Date, the relevant Ship, its Earnings and its Insurances.
(c) With effect on and from its creation or intended creation, each Transaction Obligor shall hold the legal title to, and own the entire beneficial interest in any other assets the subject of any Transaction Security created or intended to be created by such Transaction Obligor.
21.11 Negative pledge
(a) No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, create or permit to subsist any Security over any of its assets which are, in the case of any Transaction
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Obligor other than the Obligors, the subject of the Security created or intended to be created by the Finance Documents.
(b) No Obligor shall:
(i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Transaction Obligor or any other member of the Group;
(ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(iv) enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c) Paragraphs (a) and (b) above do not apply to any Permitted Security.
21.12 Disposals
(a) No Obligor shall, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including without limitation any Ship, its Earnings or its Insurances).
(b) Paragraph (a) above does not apply to any Charter as all Charters are subject to Clause 24.18 (Restrictions on chartering, appointment of managers etc.).
21.13 Merger
No Obligor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.
21.14 Change of business
(a) Each Obligor shall procure that no substantial change is made to the general nature of the business of the Guarantor or the Group from that carried on at the date of this Agreement.
(b) No Borrower shall engage in any business other than the ownership and operation of its Ship.
21.15 Financial Indebtedness
No Obligor shall incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
21.16 Expenditure
No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, maintaining and repairing its Ship.
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21.17 Share capital
No Borrower shall:
(a) purchase, cancel, redeem or retire any of its issued shares;
(b) increase or reduce its authorised share capital, the number of shares that it is authorised to issue or change the par value of such shares or create any new class of shares; or
(c) issue any further shares except to the relevant Shareholder.
21.18 Dividends
No Borrower shall following the occurrence of an Event of Default which is continuing or where any of the following would result in the occurrence of an Event of Default:
(a) declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);
(b) repay or distribute any dividend or share premium reserve; or
(c) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so.
21.19 Other transactions
No Obligor shall:
(a) be the creditor in respect of any loan or any form of credit to any person other than another Transaction Obligor and where such loan or form of credit is Permitted Financial Indebtedness;
(b) give or allow to be outstanding any guarantee or indemnity in the ordinary course of its business in aggregate not more than $500,000 to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which that Obligor assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents;
(c) enter into any material agreement other than:
(i) the Transaction Documents;
(ii) any other agreement expressly allowed under any other term of this Agreement; and
(d) enter into any transaction on terms which are, in any respect, less favourable to that Obligor than those which it could obtain in a bargain made at arms' length; or
(e) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks.
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21.20 Unlawfulness, invalidity and ranking; Security imperilled
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:
(a) make it unlawful or contrary to Sanctions for a Transaction Obligor to perform any of its obligations under the Transaction Documents;
(b) cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid, binding or enforceable;
(c) cause any Transaction Document to cease to be in full force and effect;
(d) cause any Transaction Security to rank after, or lose its priority to, any other Security; and
(e) imperil or jeopardise the Transaction Security.
21.21 Sanctions undertakings
None of the Obligors will, and shall procure that no Transaction Obligor will, directly or indirectly, use the proceeds of the Loan, or lend, contribute or otherwise make available such proceeds to any Subsidiary, Affiliate, joint venture partner or any other person:
(a) to fund any activities or business of or with any person, or in any country or territory, that, at the time of such funding, is a Sanctioned Person or Sanctioned Country; or
(b) use in repayment of any moneys due to the Finance Parties any Earnings paid directly or indirectly from any activities or business of, or with, any person, or in any country, territory or port, that, at the time of such payment, is a Sanctioned Person or Sanctioned Country; or
(c) in any other manner that would result in a violation of Sanctions by any Obligor, any other Transaction Obligor or Finance Party (whether acting as underwriter, advisor, investor, Lender, Hedge Counterparty, Facility Agent or Security Agent or otherwise).
21.22 Delivery Security and other documentation and evidence
If a Delivery Advance is not requested or is not for any reason made available, each of Borrower G, Borrower H and Borrower I shall, on or before the Delivery Date relating to its Ship, execute and deliver the documents and evidence referred to in Part D of Schedule 2 (Conditions Precedent), with necessary modifications (if any) to reflect the non-utilisation of the Delivery Advance relating to its Ship, in form and substance satisfactory to the Facility Agent.
21.23 Further assurance
(a) Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly, and in any event within the time period specified by the Security Agent do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of
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attorney), as the Security Agent may specify (and in such form as the Security Agent may require in favour of the Security Agent or its nominee(s)):
(i) to create, perfect, vest in favour of the Security Agent or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of any of the Secured Parties provided by or pursuant to the Finance Documents or by law;
(ii) to confer on the Security Agent or confer on the Secured Parties Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;
(iii) to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or
(iv) to enable or assist the Security Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
(b) Each Obligor shall, and shall procure that each other Transaction Obligor will, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Secured Parties by or pursuant to the Finance Documents.
(c) At the same time as an Obligor delivers to the Security Agent any document executed by itself or another Transaction Obligor pursuant to this Clause 21.22 (Further assurance), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Security Agent a certificate signed by one of that Obligor's or Transaction Obligor's officers which shall:
(i) set out the text of a resolution of that Obligor's or Transaction Obligor's directors specifically authorising the execution of the document specified by the Security Agent; and
(ii) state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors or officers and is valid under that Obligor's or Transaction Obligor's articles of incorporation, bylaws, limited liability company agreement, limited partnership agreement or other constitutional documents, as applicable.
22 Insurance Undertakings
22.1 General
The undertakings in this Clause 22 (Insurance Undertakings) remain in force from the date of this Agreement for Ship A, Ship B, Ship C, Ship D, Ship E and Ship F and from the relevant
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Delivery Date for Ship G, Ship H and Ship I and throughout the rest of the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
22.2 Maintenance of obligatory insurances
Each Borrower shall keep the Ship owned by it insured at its expense against:
(a) fire and usual marine risks (including hull and machinery and excess risks);
(b) war risks;
(c) protection and indemnity risks, meaning the usual risks including liability for oil pollution and excess war risk P&I cover; and
(d) any other risks against which the Facility Agent acting on the instructions of the Majority Lenders considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for that Borrower to insure and which are specified by the Facility Agent by notice to that Borrower.
22.3 Terms of obligatory insurances
Each Borrower shall effect such insurances:
(a) in dollars;
(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:
(i) an amount which, when aggregated with the amount for which the other Ships then subject to a Mortgage are insured, is equal to 120 per cent. of the Loan; and
(ii) the Market Value of that Ship;
(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;
(d) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry (with the International Group of P&I Clubs) and the international marine insurance market (currently $1,000,000,000);
(e) in the case of protection and indemnity risks, in respect of the full tonnage of its Ship;
(f) on approved terms; and
(g) through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
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22.4 Further protections for the Finance Parties
In addition to the terms set out in Clause 22.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances effected by it shall:
(a) subject always to paragraph (b), name that Borrower as the sole named insured unless the interest of every other named insured is limited:
(i) in respect of any obligatory insurances for hull and machinery and war risks;
(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and
(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;
and every other named insured has undertaken in writing to the Security Agent (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;
(b) whenever the Facility Agent requires, name (or be amended to name) the Security Agent as additional named insured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Agent, but without the Security Agent being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
(c) name the Security Agent as loss payee with such directions for payment as the Facility Agent may specify;
(d) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Agent shall be made without set off, counterclaim or deductions or condition whatsoever;
(e) provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Agent or any other Finance Party; and
(f) provide that the Security Agent may make proof of loss if that Borrower fails to do so.
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22.5 Renewal of obligatory insurances
Each Borrower shall:
(a) at least 21 days before the expiry of any obligatory insurance effected by it:
(i) notify the Facility Agent of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which it proposes to renew that obligatory insurance and of the proposed terms of renewal; and
(ii) obtain the Facility Agents' approval to the matters referred to in sub-paragraph (i) above;
(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Facility Agent's approval pursuant to paragraph (a) above; and
(c) procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Facility Agent in writing of the terms and conditions of the renewal.
22.6 Copies of policies; letters of undertaking
Each Borrower shall ensure that the Approved Brokers provide the Security Agent with:
(a) pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and
(b) a letter or letters of undertaking in a form required by the Facility Agent and including undertakings by the Approved Brokers that:
(i) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 22.4 (Further protections for the Finance Parties);
(ii) they will hold such policies, and the benefit of such insurances, to the order of the Security Agent in accordance with such loss payable clause;
(iii) they will advise the Security Agent immediately of any material change to the terms of the obligatory insurances;
(iv) they will, if they have not received notice of renewal instructions from the relevant Borrower or its agents, notify the Security Agent not less than 14 days before the expiry of the obligatory insurances;
(v) if they receive instructions to renew the obligatory insurances, they will promptly notify the Facility Agent of the terms of the instructions;
(vi) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts and they will not cancel such
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obligatory insurances by reason of non-payment of such premiums or other amounts; and
(vii) they will arrange for a separate policy to be issued in respect of the Ship owned by that Borrower forthwith upon being so requested by the Facility Agent.
22.7 Copies of certificates of entry
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provide the Security Agent with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by the Facility Agent acting on the instructions of Majority Lenders; and
(c) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
22.8 Deposit of original policies
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the Approved Brokers through which the insurances are effected or renewed.
22.9 Payment of premiums
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Facility Agent or the Security Agent.
22.10 Guarantees
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
22.11 Compliance with terms of insurances
(a) No Borrower shall do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part.
(b) Without limiting paragraph (a) above and without prejudice to the Borrowers' obligations under Clause 24 (General Ship Undertakings), each Borrower shall:
(i) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in sub-paragraph (iii) of paragraph (b) of Clause 22.6 (Copies of policies; letters of undertaking)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Facility Agent has not given its prior approval;
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(ii) not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless they are approved by the underwriters of the obligatory insurances;
(iii) make (and promptly supply copies to the Facility Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
(iv) not employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
22.12 Alteration to terms of insurances
No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.
22.13 Settlement of claims
Each Borrower shall:
(a) not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and
(b) do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
22.14 Provision of copies of communications
Each Borrower shall provide the Security Agent, at the time of each such communication, with copies of all written communications between that Borrower and:
(a) the Approved Brokers;
(b) the approved protection and indemnity and/or war risks associations; and
(c) the approved insurance companies and/or underwriters,
which relate directly or indirectly to:
(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
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22.15 Provision of information
Each Borrower shall promptly provide the Facility Agent (or any persons which it may designate) with any information which the Facility Agent (or any such designated person) requests for the purpose of:
(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 22.16 (Mortgagee's interest and additional perils insurances) or dealing with or considering any matters relating to any such insurances,
and the Borrowers shall, forthwith upon demand, indemnify the Security Agent in respect of documented fees and other expenses incurred by or for the account of the Security Agent in connection with any such report as is referred to in paragraph (a) above once in each calendar year unless an Event of Default has occurred and is continuing.
22.16 Mortgagee's interest and additional perils insurances
(a) The Security Agent shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance and a mortgagee's interest additional perils insurance in each case in an amount equal to 110 per cent. of the Loan, on such terms, through such insurers and generally in such manner as the Security Agent acting on the instructions of the Majority Lenders may from time to time consider appropriate.
(b) The Borrowers shall upon demand fully indemnify the Security Agent in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any insurance referred to in paragraph (a) above or dealing with, or considering, any matter arising out of any such insurance.
23 Pre-Delivery Contract Undertakings
23.1 General
The undertakings in this Clause 23 (Pre-Delivery Contract Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
23.2 Performance of Pre-delivery Contracts
Each of Borrower G, Borrower H and Borrower I shall:
(a) observe and perform all its obligations and meet all its liabilities under or in connection with each Pre-delivery Contract;
(b) use its best endeavours to ensure performance and observance by the other parties of their obligations and liabilities under each Pre-delivery Contract; and
(c) take any action, or refrain from taking any action, which the Facility Agent may specify in connection with any breach, or possible future breach, of a Pre-delivery Contract by that Borrower or any other party or with any other matter which arises or may later arise out of or in connection with a Pre-delivery Contract.
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23.3 No variation, release etc. of Pre-delivery Contracts
Each Borrower G, Borrower H and Borrower I shall not, whether by a document, by conduct, by acquiescence or in any other way:
(a) vary any Pre-delivery Contract in any material way without the consent of the Facility Agent, however all amendments of any Pre-delivery Contract shall be notified to the Facility Agent;
(b) release, waive, suspend, subordinate or permit to be lost or impaired any interest or right of any kind which each of Borrower G, Borrower H and Borrower I has at any time to, in or in connection with each of the Pre-delivery Contracts or in relation to any matter arising out of or in connection with any Pre-delivery Contract;
(c) waive any person's breach of any Pre-delivery Contract; or
(d) rescind or terminate any Pre-delivery Contract or treat itself as discharged or relieved from further performance of any of its obligations or liabilities under a Pre-delivery Contract,
for the purposes of this Clause "material" shall mean, without limitation, any amendments in respect of the duration of each Pre-delivery Contract, the parties to each Pre-delivery Contract, the Purchase Price of each Ship and the Delivery Date of each Ship.
23.4 Action to protect validity of Pre-delivery Contracts
Each of Borrower G, Borrower H and Borrower I shall use its best endeavours to ensure that all interests and rights conferred by each Pre-delivery Contract remain valid and enforceable in all respects and retain the priority which they were intended to have.
23.5 No assignment etc. of Pre-delivery Contracts
Save as permitted by the Finance Documents, each of Borrower G, Borrower H and Borrower I shall not assign, novate, transfer or dispose of any of its rights or obligations under any Pre-delivery Contract.
23.6 Provision of information relating to Pre-delivery Contracts
Without prejudice to Clause 20.5 (Information: miscellaneous) each of Borrower G, Borrower H and Borrower I shall:
(a) immediately inform the Facility Agent if any breach of any Pre-delivery Contract occurs or a serious risk of such a breach arises and of any other event or matter affecting a Pre-delivery Contract which has or is reasonably likely to have a Material Adverse Effect;
(b) provide the Facility Agent, promptly upon request, with copies of all notices served on or by that Borrower under or in connection with any Pre-delivery Contract; and
(c) provide the Facility Agent with any information which it requests about any interest or right of any kind which each of Borrower G, Borrower H and Borrower I has at any time to, in or in connection with, each of the Pre-delivery Contracts or in relation to any matter arising out of or in connection with any Pre-delivery Contract including the progress of the construction of the relevant Ship.
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24 General Ship Undertakings
24.1 General
The undertakings in this Clause 24 (General Ship Undertakings) remain in force on and from the date of this Agreement and throughout the rest of the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
24.2 Ships' names and registration
Each Borrower shall, in respect of the Ship owned by it:
(a) keep that Ship registered in its name under the Approved Flag from time to time at its port of registration;
(b) not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled;
(c) not enter into any dual flagging arrangement in respect of that Ship; and
(d) not change the name of that Ship,
provided that any agreed change of name or flag of a Ship shall be subject to:
(i) that Ship remaining subject to Security securing the Secured Liabilities created by a first priority or preferred ship mortgage on that Ship and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority Security) on substantially the same terms as the Mortgage on that Ship and, if applicable, the related Deed of Covenant and on such other terms and in such other form as the Facility Agent, acting with the authorisation of the Majority Lenders, shall approve or require; and
(ii) the execution of such other documentation amending and supplementing the Finance Documents as the Facility Agent, acting with the authorisation of the Majority Lenders, shall approve or require.
24.3 Repair and classification
Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:
(a) consistent with first class ship ownership and management practice; and
(b) so as to maintain the Approved Classification free of overdue recommendations and conditions.
24.4 Classification society undertaking
Each Borrower shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society:
(a) to send to the Security Agent, following receipt of a written request from the Security Agent, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;
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(b) to allow the Security Agent (or its agents), at any time and from time to time, to inspect the original class and related records of that Borrower and that Ship at the offices of the Approved Classification Society and to take copies of them;
(c) to notify the Security Agent immediately in writing if the Approved Classification Society:
(i) receives notification from that Borrower or any person that that Ship's Approved Classification Society is to be changed; or
(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Borrower or that Ship's membership of the Approved Classification Society;
(d) following receipt of a written request from the Security Agent:
(i) to confirm that that Borrower is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
(ii) to confirm that that Borrower is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Security Agent in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
24.5 Modifications
No Borrower shall make any modification or repairs to, or replacement of, any Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value, unless such alteration is an improvement and increases the value of the Ship.
24.6 Removal and installation of parts
(a) Subject to paragraph (b) below, no Borrower shall remove any material part of any Ship, or any item of equipment installed on any Ship unless:
(i) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;
(ii) the replacement part or item is free from any Security in favour of any person other than the Security Agent; and
(iii) the replacement part or item becomes, on installation on that Ship, the property of that Borrower and subject to the security constituted by the Mortgage on that Ship and, if applicable, the related Deed of Covenant.
(b) A Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Borrower.
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24.7 Surveys
Each Borrower shall submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Facility Agent acting on the instructions of the Majority Lenders, provide the Facility Agent, with copies of all survey reports.
24.8 Inspection
(a) Each Borrower shall permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times and provided there is no interference with that Ship's operation to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
(b) The Borrowers shall pay for one inspection of each Ship in each calendar year, unless an Event of Default has occurred, in which case the cost of all inspections while the Event of Default is continuing shall be borne by the Borrowers.
24.9 Prevention of and release from arrest
(a) Each Borrower shall, in respect of the Ship owned by it, promptly discharge:
(i) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;
(ii) all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and
(iii) all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.
(b) Each Borrower shall immediately upon receiving notice of the arrest of the Ship owned by it or of its detention in exercise or purported exercise of any lien or claim, take all steps necessary to procure its release by providing bail or otherwise as the circumstances may require.
24.10 Compliance with laws etc.
Each Borrower shall:
(a) comply, or procure compliance with all laws or regulations:
(i) relating to its business generally; and
(ii) relating to the Ship owned by it, its ownership, employment, operation, management and registration,
including, but not limited to:
(A) the ISM Code;
(B) the ISPS Code;
(C) all Environmental Laws;
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(D) all Sanctions; and
(E) the laws of the Approved Flag;
(b) obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals; and
(c) without limiting paragraph (a) above, not employ any Ship nor allow its employment, operation or management in any manner contrary to any law, regulation or rule, including, but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions.
24.11 ISPS Code
Without limiting paragraph (a) of Clause 24.10 (Compliance with laws etc.), each Borrower shall:
(a) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and
(b) maintain an ISSC for that Ship; and
(c) notify the Facility Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
24.12 Sanctions and Ship trading
Without limiting Clause 24.10 (Compliance with laws etc.), each Borrower shall procure:
(a) comply with, and shall use reasonable endeavours to ensure compliance with, all Sanctions (including obtaining any applicable consents, authorisations or licenses) in respect to each Ship;
(b) not cause or permit a Ship to be registered in a Sanctioned Country or used by, or for the benefit of, a Sanctioned Person;
(c) not cause or permit a Ship to be used in or otherwise to go to, stop in or call at, a Sanctioned Country when such action is prohibited by Sanctions or would be in violation of Sanctions;
(d) not cause or permit a Ship to be operated by a Charter or sub-charterer whose state of incorporation and/or principal place of business is in a Sanctioned Country and/or is Sanctioned Person;
(e) without prejudice to the above provisions of this Clause 24.12 (Sanctions and Ship trading), ensure that any Charter (and in the case of any sub-Charter shall use its reasonable endeavours to ensure that any sub-Charter) in respect of a Ship shall contain contractual language which has the effect of prohibiting the use of that Ship in violation of any Sanctions; and
(f) not cause or permit a Ship to be used in any manner or business which is prohibited by applicable anti-corruption, anti-money laundering, countering the financing of terrorism, and export and import laws and regulations.
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24.13 Russian Price Cap Framework
The Borrowers shall not, and procure that the Guarantor shall not, use, cause or permit the Ships to be used in a way that would result in a violation of Sanctions including, without limitation, the Russian Price Cap Framework, in each case related to the maritime transportation of the Russian Oil Products by them, any Initial Charterer, charterer, Finance Party or, to the best of their knowledge, any sub-charterer or shipper.
24.14 Specific Price Cap Undertaking
(a) The Borrowers shall provide to the Facility Agent:
(i) on 31 January and 31 July each year, with reference to the period of six Months ending on the preceding 31 December or 30 June, an attestation in the form set out in Schedule 12 (Form of Attestation to be issued by the Borrowers) duly signed by an officer and/or, as applicable, director of each Borrower; and
(ii) on completion of every voyage to a port located in Russia, an attestation from any charterer of a Ship in a form satisfactory to the Lenders that, among other things, any Russian Oil Products loaded onto any of the Ships during the above-referenced voyage were purchased at or below any applicable cap pursuant to the Russian Price Cap Framework.
(b) The Facility Agent shall provide to the Lenders the attestation referred to in paragraph (a) above as soon as practicable after it receives it from the Borrowers.
24.15 Trading in war zones or excluded areas
No Borrower shall cause or permit any Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers or which is otherwise excluded from the scope of coverage of the obligatory insurances unless that Borrower has (at its expense) effected any special, additional or modified insurance cover which the insurers require to ensure that that Ship remains properly insured in accordance with the Finance Documents (including, without limitation, any requirement for the payment of additional or extra insurance premia).
24.16 Provision of information
Without prejudice to Clause 20.5 (Information: miscellaneous) each Borrower shall, in respect of the Ship owned by it, promptly provide the Facility Agent with any information which it requests regarding:
(a) that Ship, its employment, position and engagements;
(b) the Earnings and payments and amounts due to its master and crew;
(c) any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made by it in respect of that Ship;
(d) any towages and salvages; and
(e) its compliance, the Approved Manager's compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
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and, upon the Facility Agent's request, promptly provide copies of any current Charter relating to that Ship, of any current guarantee of any such Charter, the Ship's Safety Management Certificate and any relevant Document of Compliance.
24.17 Notification of certain events
Each Borrower shall, in respect of the Ship owned by it, immediately notify the Facility Agent by fax, confirmed forthwith by letter, of:
(a) any casualty to that Ship which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which that Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
(c) any requisition of that Ship for hire;
(d) any requirement or recommendation made in relation to that Ship by any insurer or classification society or by any competent authority which is not complied with by its due date;
(e) any arrest or detention of that Ship or any exercise or purported exercise of any lien on that Ship or the Earnings;
(f) any intended dry docking of that Ship;
(g) any Environmental Claim made against that Borrower or in connection with that Ship, or any Environmental Incident;
(h) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with that Ship; or
(i) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with in connection with that Ship;
(j) any notice, or such Borrower becoming aware, of any claim, action, suit, proceeding or investigation against any Transaction Obligor, any of its Subsidiaries or any of their respective directors, officers, employees or agents with respect to Sanctions; or
(k) any circumstances which could give rise to a breach of any representation or undertaking in this Agreement, or any Event of Default, relating to Sanctions,
and each Borrower shall keep the Facility Agent advised in writing on a regular basis and in such detail as the Facility Agent shall require as to that Borrower's, any such Approved Manager's or any other person's response to any of those events or matters.
24.18 Restrictions on chartering, appointment of managers etc.
No Borrower shall, in relation to the Ship owned by it:
(a) let that Ship on demise charter for any period;
(b) enter into any time, voyage or consecutive voyage charter in respect of that Ship other than a Permitted Charter;
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(c) amend, supplement or terminate a Management Agreement in a way that may lead to an Event of Default;
(d) appoint a manager of that Ship other than an Approved Manager or agree to any material alteration to the terms of an Approved Manager's appointment which could lead to an Event of Default ("material alterations" to include, without limitation, alterations concerning fees, duration and parties);
(e) de activate or lay up that Ship; or
(f) put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency) unless that person has first given to the Security Agent and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
24.19 Notice of Mortgage
Each Borrower shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority, or as the case may be, preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Agent.
24.20 Sharing of Earnings
No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings other than any profit-sharing arrangements on arm's length terms.
24.21 Charter assignment
Without prejudice to application of paragraph (b) of Clause 24.18 (Restrictions on chartering, appointment of managers etc.), each Borrower will procure that the Facility Agent is provided with a copy of any Assignable Charter or a copy of any Assignable Charter's recapitulation, together with any Charter Guarantee in relation thereto, upon the same being entered into and the relevant Borrower shall forthwith enter into a Charter Assignment in respect of such Charter and any related Charter Guarantee and shall use commercially reasonable efforts to procure its acknowledgement by the relevant charterer and any charter guarantor in accordance with the terms of such Charter Assignment.
24.22 Poseidon Principles / Net Zero Banking Alliance
Each Borrower shall, upon the request of any Lender and at the cost of the Borrowers, on or before 30th June in each calendar year, supply or procure the supply by the relevant Approved Classification Society (as specified by the relevant Lender) to the Facility Agent of all information necessary in order for any Lender to comply with its obligations under the Poseidon Principles and/or its commitments in relation to the Net Zero Banking Alliance in respect of the preceding year, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 27 of Annex VI and any Statement of Compliance, in each case relating to the Ship owned by it for the preceding calendar year provided always that, for the avoidance of doubt, such information shall be "Confidential Information" for the purposes of Clause 45 (Confidential Information) but the Borrowers acknowledge that, in accordance with the Poseidon Principles and the Net Zero
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Banking Alliance, such information will form part of the information published regarding the relevant Lender's portfolio climate alignment.
24.23 Inventory of Hazardous Materials
Each Borrower shall procure that the Ship owned by it has, from the Delivery Date and/or next dry dock of that Ship, obtained an Inventory of Hazardous Materials, in respect of such Ship which shall be maintained until the end of the Security Period.
24.24 ITF Compliance
The Obligors shall procure that each Approved Manager shall be approved by the ITF if and when applicable.
24.25 Notification of compliance
Each Borrower shall promptly provide the Facility Agent from time to time with evidence (in such form as the Facility Agent requires) that it is complying with this Clause 24 (General Ship Undertakings).
25 Security Cover
25.1 Minimum required security cover
Clause 25.2 (Provision of additional security; prepayment) applies if, the Facility Agent notifies the Borrowers that:
(a) the aggregate Market Value of each Ship then subject to a Mortgage; plus
(b) the net realisable value of additional Security previously provided under this Clause 25 (Security Cover),
is below 120 per cent. of the Loan (excluding, in relation to each of Tranche B, C and/or D, any Pre-delivery Advance under such Tranche only for the period commencing from the first Utilisation Date until the Ship relevant to such Tranche is subject to a Mortgage).
25.2 Provision of additional security; prepayment
(a) If the Facility Agent serves a notice on the Borrowers under Clause 25.1 (Minimum required security cover), the Borrowers shall, on or before the date falling 15 days after the date (the "Prepayment Date") on which the Facility Agent's notice is served, prepay such part of the Loan as shall eliminate the shortfall.
(b) A Borrower may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that a third party has provided, additional security which, in the opinion of the Facility Agent acting on the instructions of the Majority Lenders:
(i) has a net realisable value at least equal to the shortfall (save for cash collateral provided in Dollars which shall be valued at par); and
(ii) is documented in such terms as the Facility Agent may approve or require,
before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.
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25.3 Value of additional vessel security
The net realisable value of any additional security which is provided under Clause 25.2 (Provision of additional security; prepayment) which constitutes a first preferred or first priority mortgage over a vessel shall be the Market Value of the vessel concerned.
25.4 Valuations binding
Any valuation under this Clause 25 (Security Cover) shall be binding and conclusive as regards each Borrower.
25.5 Provision of information
(a) Each Borrower shall promptly provide the Facility Agent and any shipbroker acting under this Clause 25 (Security Cover) with any information which the Facility Agent or the shipbroker may request for the purposes of the valuation.
(b) If a Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Facility Agent considers prudent.
25.6 Prepayment mechanism
Any prepayment pursuant to Clause 25.2 (Provision of additional security; prepayment) shall be made in accordance with the relevant provisions of Clause 7 (Prepayment and Cancellation) and shall be treated as a voluntary prepayment pursuant to Clause 7.3 (Voluntary prepayment of Loan).
25.7 Provision of valuations
(a) For the purpose of the Utilisation of Tranche A and each Delivery Advance and subject to paragraph (b) below, the Market Value of each Ship shall be determined by reference to two valuations of that Ship as given by Approved Valuers selected and appointed by the Borrowers and addressed to the Facility Agent or, in the event that the Borrowers fail to do so, appointed by the Facility Agent and the Market Value shall be the arithmetic average of the two valuations.
(b) The Facility Agent shall be entitled, after the Utilisation Date, to test the security cover requirement under Clause 25.1 (Minimum required security cover) by reference to the Market Value of any Ship by providing one valuation per Ship twice per year (June and December of each year) during the Security Period and from time to time as the Facility Agent may reasonably request.
(c) Each of the valuations referred to at paragraphs (a) and (b) above shall be provided by the Borrowers not more than 30 days before the relevant Utilisation Date, while the valuations referred to in paragraph (b) shall be provided together with the financial statements of the Guarantor delivered pursuant to Clause 20.2 (Financial statements).
(d) The Facility Agent may at any time after an Event of Default has occurred and is continuing obtain valuations of any Ship and any other vessel over which additional security has been created in accordance with Clause 25.2 (Provision of additional security; prepayment) from Approved Valuers to enable the Facility Agent to determine the Market Value of that Ship and any other vessel and also for the purpose of testing the security cover requirement under
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Clause 25.1 (Minimum required security cover). The Facility Agent shall be entitled to determine the Market Value of any Ship at any other time.
(e) The valuations referred to in paragraphs (a), (b) and (c) above shall be obtained at the cost and expense of the Borrowers and the Borrowers shall within 3 Business Days from demand by the Facility Agent pay to the Facility Agent all costs and expenses incurred by it in obtaining any such valuation, unless an Event of Default has occurred or the covenant contained in Clause 25.1 (Minimum required security cover) is not complied with, in which case the cost of all valuations shall be borne by the Borrowers.
25.8 Release of additional security
If at any time the Security Agent holds additional security provided under this Clause 25 (Security Cover) for a consecutive period of no less than 90 days, the Borrower may request, at its own cost and expense, the release of such additional security provided that:
(a) the Borrower can demonstrate to the Facility Agent's satisfaction that the minimum required security cover, disregarding the value of that additional security, is at least equal to the security cover required pursuant to Clause 25.1 (Minimum required security cover); and
(b) no Event of Default has occurred and is continuing or would result from the release of such additional security.
26 Accounts, application of Earnings and Hedge Receipts
26.1 Accounts
No Borrower may, without the prior consent of the Facility Agent, maintain any bank account other than:
(a) its Earnings Account;
(b) in relation to Borrower G, Borrower H and Borrower I, the Permitted Earnings Accounts, which Borrower G, Borrower H and Borrower I shall procure will be closed within 60 days from the Delivery Date of each of Ship G, Ship H and Ship I, respectively; and
(c) in relation to Borrower B, Borrower C and Borrower F, the Termination Accounts, which Borrower B, Borrower C and Borrower F shall procure will be closed within one Month from the date of this Agreement.
26.2 Payment of Earnings
Each Borrower shall ensure that,
(a) subject only to the provisions of the General Assignment to which it is a party, all the Earnings in respect of the Ship owned by it are paid in to its Earnings Account; and
(b) all Hedge Receipts are paid into its Earnings Account.
26.3 Location of Accounts
Each Borrower shall promptly:
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(a) comply with any requirement of the Facility Agent as to the location or relocation of its Earnings Account and, as the case may be, its Permitted Earnings Account; and
(b) execute any documents which the Facility Agent specifies to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts and, as the case may be, the Permitted Earnings Accounts.
26.4 Restriction on withdrawals
During the Security Period each Borrower may withdraw any sum from its Earnings Account provided that (i) no Event of Default has occurred from such withdrawal and (ii) no notice has been given to that Borrower by the Facility Agent or the Security Agent that such withdrawal is not permitted.
27 Events of Default
27.1 General
Each of the events or circumstances set out in this Clause 27 (Events of Default) is an Event of Default except for Clause 27.22 (Acceleration) and Clause 27.23 (Enforcement of security).
27.2 Non-payment
A Transaction Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
(a) its failure to pay is caused by:
(i) administrative or technical error; or
(ii) a Disruption Event; and
(b) payment is made within 3 Business Days of its due date.
27.3 Specific obligations
A breach occurs of Clause 4.4 (Waiver of conditions precedent), Clause 21.10 (Title), Clause 21.11 (Negative pledge), Clause 21.20 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 21.22 (Delivery Security and other documentation and evidence), Clause 22.2 (Maintenance of obligatory insurances), Clause 22.3 (Terms of obligatory insurances), Clause 22.5 (Renewal of obligatory insurances), Clause 24.12 (Sanctions and Ship trading), Clause 24.13 (Russian Price Cap Framework), clause 10 (financial covenants) of the Guarantee or, save to the extent such breach is a failure to pay and therefore subject to Clause 27.2 (Non-payment), Clause 25 (Security Cover).
27.4 Other obligations
(a) A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.2 (Non-payment) and Clause 27.3 (Specific obligations)).
(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 14 days of the Facility Agent giving notice to the Borrowers or (if earlier) any Transaction Obligor becoming aware of the failure to comply.
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27.5 Misrepresentation
Any representation or statement made or deemed to be made by a Transaction Obligor in the Finance Documents or any other document delivered by or on behalf of any Transaction Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.
27.6 Cross default
(a) Any Financial Indebtedness of any Transaction Obligor (other than an Approved Manager) is not paid when due nor within any originally applicable grace period.
(b) Any Financial Indebtedness of any Transaction Obligor (other than an Approved Manager) is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c) Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
(d) Any creditor of any Transaction Obligor (other than an Approved Manager) becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).
(e) No Event of Default will occur under this Clause 27.6 (Cross default):
(i) in respect of a Borrower, a Shareholder or the Guarantor if the aggregate amount of Financial Indebtedness falling within paragraphs (a), (b) or (d) above; or
(ii) in respect of a Borrower or the Guarantor, commitment for Financial Indebtedness falling within paragraph (c) above,
in each case, is less than $20,000,000 (or its equivalent in any other currency).
27.7 Insolvency
(a) A Transaction Obligor (other than an Approved Manager):
(i) is unable or admits inability to pay its debts as they fall due;
(ii) is deemed to, or is declared to, be unable to pay its debts under applicable law;
(iii) suspends or threatens to suspend making payments on any of its debts; or
(iv) by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness unless such negotiations have concluded successfully within two (2) months from the date of their commencement.
(b) A moratorium is declared in respect of any indebtedness of any member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
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27.8 Insolvency proceedings
(a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group other than a solvent liquidation or reorganisation of any member of the Group which is not an Obligor or the Guarantor;
(ii) a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor (other than an Approved Manager);
(iii) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor (other than an Approved Manager) or any of its assets; or
(iv) enforcement of any Security over any assets of any Transaction Obligor (other than an Approved Manager),
or any analogous procedure or step is taken in any jurisdiction.
(b) Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement.
27.9 Creditors' process
Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of a Transaction Obligor having an aggregate value of $20,000,000 (other than an arrest or detention of a Ship referred to in Clause 27.15 (Arrest)) and is not discharged within 30 days.
27.10 Ownership of the Obligors
An Obligor is not or ceases to be a 100 per cent. indirectly owned Subsidiary of the Guarantor.
27.11 Change of Control
A Change of Control occurs.
In this Clause 27.11 (Change of Control):
"Change of Control" means if:
(a) the Designated Unitholder ceases to be the ultimate beneficial owner(s) of, or to have ultimate control of, the voting rights attaching to more than 5 per cent. of all the units (including for the avoidance of doubt both general partner units and common units) in the Guarantor; or
(b) the Designated Unitholder ceases to be the owner of, or to have ultimate control of, the voting rights attaching to all the issued shares in the general partner of the Guarantor, which is currently Olympos Maritime Ltd; or
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(c) Mrs. Angeliki Frangou ceases to act as chairwoman or chief executive officer of the Guarantor and/or Olympos Maritime Ltd ceases to be the general partner of the Guarantor; or
(d) any person or group of persons (other than the Designated Unitholder) acting in concert, becomes the holder, directly or indirectly, of 50 per cent. or more of the beneficially issued units of the Guarantor entitled to vote for members of the board of directors or equivalent governing body of the Guarantor on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right),
and for the purpose of paragraph (d)above "acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate, through the acquisition, directly or indirectly, of units in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate the holding of beneficially owned units of the Guarantor.
27.12 Unlawfulness, invalidity and ranking
(a) It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.
(b) Any obligation of a Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable.
(c) Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than a Finance Party) to be ineffective.
(d) Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.
27.13 Security imperilled
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
27.14 Cessation of business
Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
27.15 Arrest
Any arrest of a Ship or its detention in the exercise or the purported exercise of any lien or claim unless it is redelivered to the full control of the relevant Borrower within 90 days of such arrest or detention.
27.16 Expropriation
The authority or ability of any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets other than:
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(a) an arrest or detention of a Ship referred to in Clause 27.15 (Arrest); or
(b) any Requisition.
27.17 Repudiation and rescission of agreements
A Transaction Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.
27.18 Initial Charters
(a) Any Initial Charter relating to Ship G, Ship H or Ship I is frustrated (except as a result of a Total Loss of that Ship), terminated (except by mere effluxion of time), cancelled or rescinded or the relevant Ship is withdrawn from service under that Initial Charter, respectively, prior to its termination by effluxion of time.
(b) No Event of Default will occur under paragraph (a) of this Clause 27.18 (Initial Charters) if, as soon as possible, but in any event not later than 90 days after such frustration, termination, cancellation, rescission or withdrawal the Borrower owning the relevant Ship:
(i) has entered into a new charter (a "Replacement Charter") in respect of that Ship on terms acceptable to the Facility Agent (acting on the instructions of the Majority Lenders at their sole discretion), which shall not be unreasonably withheld or delayed;
(ii) has delivered to the Facility Agent copies of such Replacement Charter or sufficient evidence that such Replacement Charter has been agreed and, if applicable, any related Charter Guarantee duly executed by the parties thereto and of each document to be delivered under or pursuant to each of them; and
(iii) has complied with its obligations pursuant to Clause 24.21 (Charter assignment) in relation to such Replacement Charter (as if same was by definition an Assignable Charter) and, if applicable, any related Charter Guarantee.
27.19 Litigation
Any litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency are started or threatened in writing, or any judgment or order of a court, arbitral body or agency is made, in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.
27.20 Sanctions
(a) Any Transaction Obligor or any of their respective Subsidiaries, directors, officers, employees or agents is designated a Sanctioned Person or a Ship is designated a Sanctioned Ship.
(b) This Clause 27.20 (Sanctions) is without prejudice to any other Event of Default which may occur by reason of breach of, or non-compliance with, any of the other provisions of this Agreement which relate to Sanctions.
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27.21 Material adverse change
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
27.22 Acceleration
On and at any time after the occurrence of an Event of Default which is continuing the Facility Agent may, and shall if so directed by the Majority Lenders:
(a) by notice to the Borrowers:
(i) cancel the Available Commitment of each Lender, whereupon they shall immediately be cancelled;
(ii) declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon it shall become immediately due and payable; and/or
(iii) declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Facility Agent acting on the instructions of the Majority Lenders; and/or
(b) exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents,
and the Facility Agent may serve notices under sub-paragraphs (i), (ii) or (iii) of paragraph (a) above simultaneously or on different dates and any Servicing Party may take any action referred to in paragraph (b) above or Clause 27.23 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
27.23 Enforcement of security
On and at any time after the occurrence of an Event of Default which is continuing the Security Agent may, and shall if so directed by the Majority Lenders, take any action which, as a result of the Event of Default or any notice served under Clause 27.22 (Acceleration), the Security Agent is entitled to take under any Finance Document or any applicable law or regulation.
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Section 9
Changes to Parties
28 Changes to the Lenders and the Hedge Counterparties
28.1 Assignments and transfers by the Lenders
Subject to this Clause 28 (Changes to the Lenders and the Hedge Counterparties), a Lender (the "Existing Lender"):
(a) assign any of its rights; or
(b) transfer by novation any of its rights and obligations,
under the Finance Documents to another Lender, another branch, Subsidiary or Affiliate of a Lender, another first class international bank or financial institution or to a trust, fund or any member of the European System of Central Banks or other entity which is regularly engaged in, or established for, the purpose of making, purchasing or investing in shipping loans, securities or other financial assets (the "New Lender").
28.2 Borrowers' notification
An Existing Lender shall notify the Borrowers for no more than 15 days before it making an assignment or transfer in accordance with Clause 28.1 (Assignments and transfers by the Lenders) unless the assignment or transfer is:
(a) to another Lender or an Affiliate of any Lender;
(b) if the Existing lender is a fund, to a fund which is a Related Fund; or
(c) without prejudice to paragraph (a) above, to the Mandated Arranger, the Bookrunner, the Co-ordinator or an Affiliate of the Mandated Lead Arranger, the Bookrunner and the Co-ordinator and made in connection with the facilitation of either the primary syndication of the Facility or the first Utilisation under this Agreement; or
(d) made at a time when an Event of Default is continuing.
28.3 Borrowers' consent
The consent of the Borrowers for an assignment or transfer by the Original Lender in accordance with Clause 28.1 (Assignments and transfers by the Lenders), will only be required if that assignment or transfer is more than 50 per cent. of the Commitment of the Original Lender provided however that such consent shall not be required if such assignment or transfer is made at a time when an Event of Default is continuing.
28.4 Conditions of assignment or transfer
(a) An assignment will only be effective on:
(i) receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the
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Facility Agent) that the New Lender will assume the same obligations to the other Secured Parties as it would have been under if it had been an Original Lender; and
(ii) performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.
(b) Each Obligor on behalf of itself and each Transaction Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other Transaction Obligor had against the Existing Lender.
(c) A transfer will only be effective if the procedure set out in Clause 28.7 (Procedure for transfer) is complied with.
(d) If:
(i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing at the date the assignment, transfer or change occurs, a Transaction Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This paragraph (d) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.
(e) Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
28.5 Assignment or transfer fee
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $3,500.
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28.6 Limitation of responsibility of Existing Lenders
(a) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
(i) the legality, validity, effectiveness, adequacy or enforceability of the Transaction Documents, the Transaction Security or any other documents;
(ii) the financial condition of any Transaction Obligor;
(iii) the performance and observance by any Transaction Obligor of its obligations under the Transaction Documents or any other documents; or
(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Transaction Document or any other document,
and any representations or warranties implied by law are excluded.
(b) Each New Lender confirms to the Existing Lender and the other Finance Parties and the Secured Parties that it:
(i) has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Transaction Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Transaction Document or the Transaction Security; and
(ii) will continue to make its own independent appraisal of the creditworthiness of each Transaction Obligor and its related entities throughout the Security Period.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 28 (Changes to the Lenders and the Hedge Counterparties); or
(ii) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Transaction Obligor of its obligations under the Transaction Documents or otherwise.
28.7 Procedure for transfer
(a) Subject to the conditions set out in Clause 28.3 (Conditions of assignment or transfer), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate.
(b) The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know
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your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
(c) Subject to Clause 28.16 (Pro rata interest settlement), on the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Transaction Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the "Discharged Rights and Obligations");
(ii) each of the Transaction Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Transaction Obligor and the New Lender have assumed and/or acquired the same in place of that Transaction Obligor and the Existing Lender;
(iii) the Facility Agent, the Security Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Security Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and
(iv) the New Lender shall become a Party as a "Lender".
28.8 Procedure for assignment
(a) Subject to the conditions set out in Clause 28.3 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.
(b) The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
(c) Subject to Clause 28.16 (Pro rata interest settlement), on the Transfer Date:
(i) the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;
(ii) the Existing Lender will be released from the obligations (the "Relevant Obligations") expressed to be the subject of the release in the Assignment Agreement (and any
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corresponding obligations by which it is bound in respect of the Transaction Security); and
(iii) the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.
(d) Lenders may utilise procedures other than those set out in this Clause 28.8 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 28.7 (Procedure for transfer), to obtain a release by that Transaction Obligor from the obligations owed to that Transaction Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 28.2 (Conditions of assignment or transfer).
28.9 Copy of Transfer Certificate or Assignment Agreement to Borrowers
The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.
28.10 Additional Hedge Counterparties
(a) The Borrowers or a Lender may request that a Lender or an Affiliate becomes an Additional Hedge Counterparty, with the prior approval of Facility Agent and (in the case of a request by a Lender) the Borrowers, by delivering to the Facility Agent a duly executed Hedge Counterparty Accession Letter.
(b) The relevant Lender or Affiliate will become an Additional Hedge Counterparty when (i) the Facility Agent enters into the relevant Hedge Counterparty Accession Letter and (ii) the relevant Borrowers have entered into any supplemental documentation and/or addenda to any Mortgage as reasonably required by the Facility Agent (which those Borrowers shall do upon the Facility Agent's request).
28.11 Change of Hedge Counterparty
Subject to Clause 28.14 (Costs), a Hedge Counterparty (the "Existing Hedge Counterparty") may (in accordance with the terms of the relevant Hedging Agreement and subject to any consent required under that Hedging Agreement and paragraph (s) of Clause 8.5 (Hedging)), transfer by novation any of its rights and obligations in respect of the Hedging Agreements to which it is a party if any transferee (the "New Hedge Counterparty") has (if not already a Party as a Hedge Counterparty) acceded to this Agreement pursuant to Clause 28.10 (Additional Hedge Counterparties) as a Hedge Counterparty.
28.12 Conditions of transfer
Each New Hedge Counterparty, by executing the Hedge Counterparty Accession Letter, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the Existing Hedge Counterparty in accordance with this Agreement on or prior to the date on which the transfer becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Hedge Counterparty would have been had it remained a Hedge Counterparty.
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28.13 Limitation of responsibility of Hedge Counterparty
(a) Unless expressly agreed to the contrary, an Existing Hedge Counterparty makes no representation or warranty and assumes no responsibility to a New Hedge Counterparty for:
(i) the legality, validity, effectiveness, adequacy or enforceability of the Transaction Documents, the Transaction Security or any other documents;
(ii) the financial condition of any Transaction Obligor;
(iii) the performance and observance by any Transaction Obligor of its obligations under the Transaction Documents or any other documents; or
(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Transaction Document or any other document,
and any representations or warranties implied by law are excluded.
(b) Each New Hedge Counterparty confirms to the Existing Hedge Counterparty and the other Finance Parties and the Secured Parties that it:
(i) has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Transaction Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Hedge Counterparty or any other Finance Party in connection with any Transaction Document or the Transaction Security; and
(ii) will continue to make its own independent appraisal of the creditworthiness of each Transaction Obligor and its related entities throughout the Security Period.
(c) Nothing in any Finance Document obliges an Existing Hedge Counterparty to:
(i) accept a re-transfer from a New Hedge Counterparty of any of the rights and obligations transferred under this Clause 28 (Changes to the Lenders and Hedge Counterparties) or
(ii) support any losses directly or indirectly incurred by the New Hedge Counterparty by reason of the non-performance by any Transaction Obligor of its obligations under the Transaction Documents or otherwise.
28.14 Costs
The Existing Hedge Counterparty shall on demand (and irrespective of whether the novation is entered into) reimburse each of the Facility Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by each Secured Party in responding to, evaluating, negotiating or complying with the requested novation.
28.15 Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause 28 (Changes to the Lenders and the Hedge Counterparties), each Lender may without consulting with or obtaining consent from any Transaction Obligor, at any time charge, assign or otherwise create Security in or over
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(whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
(b) any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
except that no such charge, assignment or Security shall:
(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
(ii) require any payments to be made by a Transaction Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
28.16 Pro rata interest settlement
(a) If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.7 (Procedure for transfer) or any assignment pursuant to Clause 28.8 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):
(i) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period; and
(ii) the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
(A) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and
(B) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.16 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.
(b) In this Clause 28.16 (Pro rata interest settlement) references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.
(c) An Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 28.16 (Pro rata interest settlement) but which does not have a Commitment shall be deemed not to be a Lender for the purposes of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents.
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29 Changes to the Transaction Obligors
29.1 Assignment or transfer by Transaction Obligors
No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
29.2 Release of security
(a) If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:
(i) the disposal is permitted by the terms of any Finance Document;
(ii) all the Lenders agree to the disposal;
(iii) the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or
(iv) the disposal is being effected by enforcement of a Security Document,
the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document. However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).
(b) If the Security Agent is satisfied that a release is allowed under this Clause 29.2 (Release of security) (at the request and expense of the Borrowers) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release. Each other Finance Party irrevocably authorises the Security Agent to enter into any such document. Any release will not affect the obligations of any other Transaction Obligor under the Finance Documents.
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Section 10
The Finance Parties
30 The Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator
30.1 Appointment of the Facility Agent
(a) Each of the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, the Lenders and the Hedge Counterparties appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(b) Each of the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, the Lenders and the Hedge Counterparties authorises the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.
30.2 Instructions
(a) The Facility Agent shall:
(i) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:
(A) all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B) in all other cases, the Majority Lenders; and
(ii) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
(b) The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
(c) Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d) Paragraph (a) above shall not apply:
(i) where a contrary indication appears in a Finance Document;
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(ii) where a Finance Document requires the Facility Agent to act in a specified manner or to take a specified action;
(iii) in respect of any provision which protects the Facility Agent's own position in its personal capacity as opposed to its role of Facility Agent for the relevant Finance Parties.
(e) If giving effect to instructions given by the Majority Lenders would in the Facility Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 44 (Amendments and Waivers), the Facility Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Facility Agent) whose consent would have been required in respect of that amendment or waiver.
(f) In exercising any discretion to exercise a right, power or authority under the Finance Documents where it has not received any instructions as to the exercise of that discretion the Facility Agent shall do so having regard to the interests of all the Finance Parties.
(g) The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.
(h) Without prejudice to the remainder of this Clause 30.2 (Instructions), in the absence of instructions, the Facility Agent shall not be obliged to take any action (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Finance Parties. The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.
(i) The Facility Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.
30.3 Duties of the Facility Agent
(a) The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b) Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.
(c) Without prejudice to Clause 28.9 (Copy of Transfer Certificate or Assignment Agreement to Borrower), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.
(d) Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
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(e) If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(f) If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.
(g) The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
30.4 Role of the Mandated Lead Arranger, Bookrunner and Co-ordinator
Except as specifically provided in the Finance Documents, each of the Mandated Lead Arranger, the Bookrunner and the Co-ordinator has no obligations of any kind to any other Party under or in connection with any Finance Document.
30.5 No fiduciary duties
(a) Nothing in any Finance Document constitutes the Facility Agent, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator as a trustee or fiduciary of any other person.
(b) None of the Facility Agent, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.
30.6 Application of receipts
Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 34.5 (Application of receipts; partial payments).
30.7 Business with the Group
The Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.
30.8 Rights and discretions
(a) The Facility Agent may:
(i) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
(ii) assume that:
(A) any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and
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(B) unless it has received notice of revocation, that those instructions have not been revoked; and
(iii) rely on a certificate from any person:
(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
(B) to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of sub-paragraph (A) above, may assume the truth and accuracy of that certificate.
(b) The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:
(i) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 27.2 (Non-payment));
(ii) any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
(iii) any notice or request made by any Borrower (other than a Utilisation Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.
(c) The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(d) Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.
(e) The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
(f) The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:
(i) be liable for any error of judgment made by any such person; or
(ii) be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,
unless such error or such loss was directly caused by the Facility Agent's gross negligence or wilful misconduct.
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(g) Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.
(h) Notwithstanding any other provision of any Finance Document to the contrary, none of the Facility Agent, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator is obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
(i) Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
30.9 Responsibility for documentation
None of the Facility Agent, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator is responsible or liable for:
(a) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(c) any determination as to whether any information provided or to be provided to any Finance Party or Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
30.10 No duty to monitor
The Facility Agent shall not be bound to enquire:
(a) whether or not any Default has occurred;
(b) as to the performance, default or any breach by any Transaction Obligor of its obligations under any Transaction Document; or
(c) whether any other event specified in any Transaction Document has occurred.
30.11 Exclusion of liability
(a) Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 34.11 (Disruption to Payment Systems etc.) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
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(i) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;
(ii) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(iii) any shortfall which arises on the enforcement or realisation of the Security Property; or
(iv) without prejudice to the generality of sub-paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A) any act, event or circumstance not reasonably within its control; or
(B) the general risks of investment in, or the holding of assets in, any jurisdiction,
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
(b) No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Facility Agent may rely on this paragraph (b) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.
(c) The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.
(d) Nothing in this Agreement shall oblige the Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator to carry out:
(i) any "know your customer" or other checks in relation to any person; or
(ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,
on behalf of any Finance Party and each Finance Party confirms to the Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator that it is solely responsible for
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any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator.
(e) Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent's liability, any liability (including, without limitation, for negligence or any other category of liability whatsoever) of the Facility Agent arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss. In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.
30.12 Lenders' indemnity to the Facility Agent
(a) Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 34.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by a Transaction Obligor pursuant to a Finance Document).
(b) Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Facility Agent pursuant to paragraph (a) above.
(c) Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Facility Agent to an Obligor.
30.13 Resignation of the Facility Agent
(a) The Facility Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the Borrowers.
(b) Alternatively, the Facility Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders may appoint a successor Facility Agent.
(c) If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent.
(d) If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes
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(acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 30 (The Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator) and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent's normal fee rates and those amendments will bind the Parties.
(e) The retiring Facility Agent shall make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
(f) The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.
(g) Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 14.4 (Indemnity to the Facility Agent) and this Clause 30 (The Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent. Any fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(h) The Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In this event, the Facility Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrowers.
(i) The consent of any Borrower (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.
30.14 Confidentiality
(a) In acting as Facility Agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(b) If information is received by a division or department of the Facility Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
(c) Notwithstanding any other provision of any Finance Document to the contrary, none of the Facility Agent, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the
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disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.
30.15 Relationship with the other Finance Parties
(a) Subject to Clause 28.16 (Pro rata interest settlement), the Facility Agent may treat the person shown in its records as Lender or Hedge Counterparty at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office or, as the case may be, the Hedge Counterparty:
(i) entitled to or liable for any payment due under any Finance Document on that day; and
(ii) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days' prior notice from that Lender or Hedge Counterparty to the contrary in accordance with the terms of this Agreement.
(b) Each Finance Party shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Finance Party shall deal with the Security Agent exclusively through the Facility Agent and shall not deal directly with the Security Agent and any reference to any instructions being given by or sought from any Finance Party or group of Finance Parties by or to the Security Agent in this Agreement must be given or sought through the Facility Agent.
(c) Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 37.5 (Electronic communication)) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 37.2 (Addresses) and sub-paragraph (ii) of paragraph (a) of Clause 37.5 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
30.16 Credit appraisal by the Finance Parties
Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator that it has been, and will continue to be, solely responsible for making its own independent appraisal
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and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:
(a) the financial condition, status and nature of each member of the Group;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(c) whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(d) the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
(e) the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
30.17 Facility Agent's management time
Any amount payable to the Facility Agent under Clause 14.4 (Indemnity to the Facility Agent), Clause 16 (Costs and Expenses) and Clause 30.12 (Lenders' indemnity to the Facility Agent) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrowers and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 10.1 (Fees).
30.18 Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
30.19 Reliance and engagement letters
Each Secured Party confirms that each of the Mandated Lead Arranger, the Bookrunner, the Co-ordinator and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Mandated Lead Arranger, the Bookrunner, the Co-ordinator or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the
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transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.
30.20 Full freedom to enter into transactions
Without prejudice to Clause 30.7 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:
(a) to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);
(b) to deal in and enter into and arrange transactions relating to:
(i) any securities issued or to be issued by any Transaction Obligor or any other person; or
(ii) any options or other derivatives in connection with such securities; and
(c) to provide advice or other services to any Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
30.21 Amounts paid in error
(a) If the Facility Agent pays an amount to another Party and the Facility Agent notifies that Party that such payment was an Erroneous Payment then the Party to whom that amount was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
(b) Neither:
(i) the obligations of any Party to the Facility Agent; nor
(ii) the remedies of the Facility Agent,
(whether arising under this Clause 30.21 (Amounts paid in error) or otherwise) which relate to an Erroneous Payment will be affected by any act, omission, matter or thing which, but for this paragraph (b), would reduce, release or prejudice any such obligation or remedy (whether or not known by the Facility Agent or any other Party).
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(c) All payments to be made by a Party to the Facility Agent (whether made pursuant to this Clause 30.21 (Amounts paid in error) or otherwise) which relate to an Erroneous Payment shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
(d) In this Agreement, "Erroneous Payment" means a payment of an amount by the Facility Agent to another Party which the Facility Agent determines (in its sole discretion) was made in error.
31 The Security Agent
31.1 Trust
(a) The Security Agent declares that it holds the Security Property on trust for the Secured Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 31 (The Security Agent) and the other provisions of the Finance Documents.
(b) Each other Finance Party authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.
(c) Without limiting any other rights of the Security Agent under this Agreement or any other Finance Document, with respect to any Security Documents governed by Swiss law (the "Swiss Security Documents"):
(i) the Security Agent shall hold (i) any security interest created by such Swiss Security Documents (but only with respect to an assignment or any other non-accessory (nicht akzessorische) security), (ii) the benefit of this paragraph (a), and (iii) any proceeds of such security, as fiduciary (treuhänderisch) in its own name but for the account of any Finance Party; and
(ii) each present and future Finance Party hereby authorises the Security Agent (i) acting for itself and in the name and for the account of such Finance Party to accept as its direct representative (direkter Stellvertreter) any Swiss law pledge or any other Swiss law accessory (akzessorische) security made or expressed to be made to such Finance Party with respect to any Swiss Security Documents, to hold, administer and, if necessary, enforce any such security on behalf of each relevant Finance Party which has the benefit of such security, (ii) to agree as its direct representative (direkter Stellvertreter) to amendments and alterations to any such Swiss Security Documents, (iii) to effect as its direct representative (direkter Stellvertreter) any release of a security created thereunder in accordance with this Agreement, and (iv) to exercise as its direct representative (direkter Stellvertreter) any such other rights granted to the Security Agent.
31.2 Parallel Debt (Covenant to pay the Security Agent)
(a) Each Obligor irrevocably and unconditionally undertakes to pay to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.
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(b) The Parallel Debt of an Obligor:
(i) shall become due and payable at the same time as its Corresponding Debt;
(ii) is independent and separate from, and without prejudice to, its Corresponding Debt.
(c) For purposes of this Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent)), the Security Agent:
(i) is the independent and separate creditor of each Parallel Debt;
(ii) acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and
(iii) shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).
(d) The Parallel Debt of an Obligor shall be:
(i) decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and
(ii) increased to the extent that its Corresponding Debt has increased,
and the Corresponding Debt of an Obligor shall be decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged,
in each case provided that the Parallel Debt of an Obligor shall never exceed its Corresponding Debt.
(e) All amounts received or recovered by the Security Agent in connection with this Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent)) to the extent permitted by applicable law, shall be applied in accordance with Clause 34.5 (Application of receipts; partial payments).
(f) This Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent)) shall apply, with any necessary modifications, to each Finance Document.
31.3 Enforcement through Security Agent only
The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.
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31.4 Instructions
(a) The Security Agent shall:
(i) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by:
(A) all Lenders (or the Facility Agent on their behalf) if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B) in all other cases, the Majority Lenders (or the Facility Agent on their behalf); and
(ii) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).
(b) The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or the Facility Agent on their behalf) (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
(c) Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d) Paragraph (a) above shall not apply:
(i) where a contrary indication appears in a Finance Document;
(ii) where a Finance Document requires the Security Agent to act in a specified manner or to take a specified action;
(iii) in respect of any provision which protects the Security Agent's own position in its personal capacity as opposed to its role of Security Agent for the relevant Secured Parties.
(iv) in respect of the exercise of the Security Agent's discretion to exercise a right, power or authority under any of:
(A) Clause 31.28 (Application of receipts);
(B) Clause 31.29 (Permitted Deductions); and
(C) Clause 31.30 (Prospective liabilities).
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(e) If giving effect to instructions given by the Majority Lenders would in the Security Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 44 (Amendments and Waivers), the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Security Agent) whose consent would have been required in respect of that amendment or waiver.
(f) In exercising any discretion to exercise a right, power or authority under the Finance Documents where either:
(i) it has not received any instructions as to the exercise of that discretion; or
(ii) the exercise of that discretion is subject to sub-paragraph (iv) of paragraph (d) above,
the Security Agent shall do so having regard to the interests of all the Secured Parties.
(g) The Security Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any applicable VAT) which it may incur in complying with those instructions.
(h) Without prejudice to the remainder of this Clause 31.4 (Instructions), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.
(i) The Security Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Transaction Security or Security Documents.
31.5 Duties of the Security Agent
(a) The Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b) The Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party.
(c) Except where a Finance Document specifically provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(d) If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(e) The Security Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
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31.6 No fiduciary duties
(a) Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Transaction Obligor.
(b) The Security Agent shall not be bound to account to any other Secured Party for any sum or the profit element of any sum received by it for its own account.
31.7 Business with the Group
The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.
31.8 Rights and discretions
(a) The Security Agent may:
(i) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
(ii) assume that:
(A) any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents;
(B) unless it has received notice of revocation, that those instructions have not been revoked;
(C) if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and
(iii) rely on a certificate from any person:
(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
(B) to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of sub-paragraph (A) above, may assume the truth and accuracy of that certificate.
(b) The Security Agent shall be entitled to carry out all dealings with the other Finance Parties through the Facility Agent and may give to the Facility Agent any notice or other communication required to be given by the Security Agent to any Finance Party.
(c) The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Secured Parties) that:
(i) no Default has occurred;
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(ii) any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
(iii) any notice or request made by any Borrower (other than a Utilisation Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.
(d) The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(e) Without prejudice to the generality of paragraph (c) above or paragraph (f) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.
(f) The Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
(g) The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:
(i) be liable for any error of judgment made by any such person; or
(ii) be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part of any such person,
unless such error or such loss was directly caused by the Security Agent's gross negligence or wilful misconduct.
(h) Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.
(i) Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
(j) Notwithstanding any provision of any Finance Document to the contrary, the Security Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
31.9 Responsibility for documentation
None of the Security Agent, any Receiver or Delegate is responsible or liable for:
(a) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator, a Transaction Obligor or any other person in, or in connection with, any
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Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(c) any determination as to whether any information provided or to be provided to any Secured Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
31.10 No duty to monitor
The Security Agent shall not be bound to enquire:
(a) whether or not any Default has occurred;
(b) as to the performance, default or any breach by any Transaction Obligor of its obligations under any Transaction Document; or
(c) whether any other event specified in any Transaction Document has occurred.
31.11 Exclusion of liability
(a) Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:
(i) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;
(ii) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(iii) any shortfall which arises on the enforcement or realisation of the Security Property; or
(iv) without prejudice to the generality of sub-paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A) any act, event or circumstance not reasonably within its control; or
(B) the general risks of investment in, or the holding of assets in, any jurisdiction,
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including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
(b) No Party other than the Security Agent, that Receiver or that Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this paragraph (b) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.
(c) The Security Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Security Agent if the Security Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Security Agent for that purpose.
(d) Nothing in this Agreement shall oblige the Security Agent to carry out:
(i) any "know your customer" or other checks in relation to any person; or
(ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,
on behalf of any Finance Party and each Finance Party confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.
(e) Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate, any liability (including, without limitation, for negligence or any other category of liability whatsoever) of the Security Agent or any Receiver or Delegate arising under or in connection with any Transaction Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Security Agent, Receiver or Delegate or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Security Agent, any Receiver or Delegate at any time which increase the amount of that loss. In no event shall the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.
31.12 Lenders' indemnity to the Security Agent
(a) Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Security Agent and every Receiver, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or
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any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the Security Agent's or Receiver's gross negligence or wilful misconduct) in acting as Security Agent or Receiver under the Finance Documents (unless the Security Agent or Receiver has been reimbursed by a Transaction Obligor pursuant to a Finance Document).
(b) Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above.
(c) Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor.
31.13 Resignation of the Security Agent
(a) The Security Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the Borrowers.
(b) Alternatively, the Security Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders may appoint a successor Security Agent.
(c) If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent.
(d) The retiring Security Agent shall make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Security Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
(e) The Security Agent's resignation notice shall only take effect upon:
(i) the appointment of a successor; and
(ii) the transfer, by way of a document expressed as a deed, of all the Security Property to that successor.
(f) Upon the appointment of a successor, the retiring Security Agent shall be discharged, by way of a document executed as a deed, from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 31.25 (Winding up of trust) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 (Indemnity to the Security Agent) and this Clause 31 (The Security Agent) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent. Any fees for the account of the retiring Security Agent shall cease to accrue from (and shall be payable on) that date. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(g) The Majority Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above. In this event, the Security Agent shall resign in accordance with
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paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrowers.
(h) The consent of any Borrower (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.
31.14 Confidentiality
(a) In acting as Security Agent for the Finance Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any other of its divisions or departments.
(b) If information is received by a division or department of the Security Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
(c) Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty.
31.15 Credit appraisal by the Finance Parties
Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:
(a) the financial condition, status and nature of each member of the Group;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(c) whether that Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(d) the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
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(e) the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
31.16 Security Agent's management time
(a) Any amount payable to the Security Agent under Clause 14.5 (Indemnity to the Security Agent), Clause 16 (Costs and Expenses) and Clause 31.12 (Lenders' indemnity to the Security Agent) shall include the cost of utilising the Security Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrowers and the other Finance Parties, and is in addition to any fee paid or payable to the Security Agent under Clause 10.1 (Fees).
(b) Without prejudice to paragraph (a) above, in the event of:
(i) a Default;
(ii) the Security Agent being requested by a Transaction Obligor or the Majority Lenders to undertake duties which the Security Agent and the Borrowers agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or
(iii) the Security Agent and the Borrowers agreeing that it is otherwise appropriate in the circumstances,
the Borrowers shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.
(c) If the Security Agent and the Borrowers fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrowers or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrowers) and the determination of any investment bank shall be final and binding upon the Parties.
31.17 Reliance and engagement letters
Each Secured Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.
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31.18 No responsibility to perfect Transaction Security
The Security Agent shall not be liable for any failure to:
(a) require the deposit with it of any deed or document certifying, representing or constituting the title of any Transaction Obligor to any of the Security Assets;
(b) obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
(c) register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;
(d) take, or to require any Transaction Obligor to take, any step to perfect its title to any of the Security Assets or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation; or
(e) require any further assurance in relation to any Finance Document.
31.19 Insurance by Security Agent
(a) The Security Agent shall not be obliged:
(i) to insure any of the Security Assets;
(ii) to require any other person to maintain any insurance; or
(iii) to verify any obligation to arrange or maintain insurance contained in any Finance Document,
(iv) and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.
(b) Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Majority Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.
31.20 Custodians and nominees
The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.
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31.21 Delegation by the Security Agent
(a) Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.
(b) That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties.
(c) No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate.
31.22 Additional Security Agents
(a) The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:
(i) if it considers that appointment to be in the interests of the Secured Parties; or
(ii) for the purposes of conforming to any legal requirement, restriction or condition which the Security Agent deems to be relevant; or
(iii) for obtaining or enforcing any judgment in any jurisdiction,
and the Security Agent shall give prior notice to the Borrowers and the Finance Parties of that appointment.
(b) Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
(c) The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.
31.23 Acceptance of title
The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any Transaction Obligor may have to any of the Security Assets and shall not be liable for or bound to require any Transaction Obligor to remedy any defect in its right or title.
31.24 Releases
Upon a disposal of any of the Security Assets pursuant to the enforcement of the Transaction Security by a Receiver, a Delegate or the Security Agent, the Security Agent is irrevocably authorised (at the cost of the Obligors and without any consent, sanction, authority or further confirmation from any other Secured Party) to release, without recourse or warranty, that property from the Transaction Security and to execute any release of the Transaction Security
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or other claim over that asset and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.
31.25 Winding up of trust
If the Security Agent, with the approval of the Facility Agent determines that:
(a) all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and
(b) no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Transaction Obligor pursuant to the Finance Documents,
then
(i) the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and
(ii) any Security Agent which has resigned pursuant to Clause 31.13 (Resignation of the Security Agent) shall release, without recourse or warranty, all of its rights under each Security Document.
31.26 Powers supplemental to Trustee Acts
The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.
31.27 Disapplication of Trustee Acts
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement and the other Finance Documents. Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.
31.28 Application of receipts
All amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document, under Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent)) or in connection with the realisation or enforcement of all or any part of the Security Property (for the purposes of this Clause 31 (The Security Agent), the "Recoveries") shall be held by the Security Agent on trust to apply them at any time as the Security Agent (in its
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discretion) sees fit, to the extent permitted by applicable law (and subject to the remaining provisions of this Clause 31 (The Security Agent)), in the following order of priority:
(a) in discharging any sums owing to the Security Agent (in its capacity as such) (other than pursuant to Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent))) or any Receiver or Delegate;
(b) in payment or distribution to the Facility Agent, on its behalf and on behalf of the other Secured Parties, for application towards the discharge of all sums due and payable by any Transaction Obligor under any of the Finance Documents in accordance with Clause 34.5 (Application of receipts; partial payments);
(c) if none of the Transaction Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any Transaction Obligor; and
(d) the balance, if any, in payment or distribution to the relevant Transaction Obligor.
31.29 Permitted Deductions
The Security Agent may, in its discretion:
(a) set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and
(b) pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
31.30 Prospective liabilities
Following enforcement of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later payment to the Facility Agent for application in accordance with Clause 31.28 (Application of receipts) in respect of:
(a) any sum to the Security Agent, any Receiver or any Delegate; and
(b) any part of the Secured Liabilities,
that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.
31.31 Investment of proceeds
Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 31.28 (Application of receipts) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in
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the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Agent's discretion in accordance with the provisions of Clause 31.28 (Application of receipts).
31.32 Currency conversion
(a) For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.
(b) The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
31.33 Good discharge
(a) Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Secured Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.
(b) The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) above in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.
31.34 Amounts received by Obligors
If any of the Obligors receives or recovers any amount which, under the terms of any of the Finance Documents, should have been paid to the Security Agent, that Obligor will hold the amount received or recovered on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement.
31.35 Application and consideration
In consideration for the covenants given to the Security Agent by each Obligor in relation to Clause 31.2 (Parallel Debt (Covenant to pay the Security Agent)), the Security Agent agrees with each Obligor to apply all moneys from time to time paid by such Obligor to the Security Agent in accordance with the foregoing provisions of this Clause 31 (The Security Agent).
31.36 Full freedom to enter into transactions
Without prejudice to Clause 31.7 (Business with the Group) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:
(a) to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);
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(b) to deal in and enter into and arrange transactions relating to:
(i) any securities issued or to be issued by any Transaction Obligor or any other person; or
(ii) any options or other derivatives in connection with such securities; and
(c) to provide advice or other services to the Borrowers or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Security Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
32 Conduct of Business by the Finance Parties
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
33 Sharing among the Finance Parties
33.1 Payments to Finance Parties
If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from a Transaction Obligor other than in accordance with Clause 34 (Payment Mechanics) (a "Recovered Amount") and applies that amount to a payment due to it under the Finance Documents then:
(a) the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;
(b) the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 34 (Payment Mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(c) the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering
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Finance Party as its share of any payment to be made, in accordance with Clause 34.5 (Application of receipts; partial payments).
33.2 Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 34.5 (Application of receipts; partial payments) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.
33.3 Recovering Finance Party's rights
On a distribution by the Facility Agent under Clause 33.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from a Transaction Obligor, as between the relevant Transaction Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Transaction Obligor.
33.4 Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(a) each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and
(b) as between the relevant Transaction Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Transaction Obligor.
33.5 Exceptions
(a) This Clause 33 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Transaction Obligor.
(b) A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(i) it notified that other Finance Party of the legal or arbitration proceedings; and
(ii) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
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Section 11
Administration
34 Payment Mechanics
34.1 Payments to the Facility Agent
(a) On each date on which a Transaction Obligor or a Lender is required to make a payment under a Finance Document, that Transaction Obligor or Lender shall make an amount equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
(b) Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or Paris, as specified by the Facility Agent) and with such bank as the Facility Agent, in each case, specifies.
34.2 Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 34.3 (Distributions to a Transaction Obligor) and Clause 34.4 (Clawback and pre-funding) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or Paris), as specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrowers in a Utilisation Request.
34.3 Distributions to a Transaction Obligor
The Facility Agent may (with the consent of the Transaction Obligor or in accordance with Clause 35 (Set-Off)) apply any amount received by it for that Transaction Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Transaction Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
34.4 Clawback and pre-funding
(a) Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(b) Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest
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on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
(c) If the Facility Agent is willing to make available amounts for the account of the Borrowers before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrowers:
(i) the Borrowers shall on demand refund it to the Facility Agent; and
(ii) the Lender by whom those funds should have been made available or, if the Lender fails to do so, the Borrowers shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
34.5 Application of receipts; partial payments
(a) If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in the following order:
(i) first, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver or any Delegate under the Finance Documents;
(ii) secondly, in or towards payment pro rata of:
(A) any accrued interest and fees due but unpaid to the Lenders under this Agreement; and
(B) any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(iii) thirdly, in or towards payment pro rata of:
(A) any principal due but unpaid to the Lenders under this Agreement; and
(B) any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(iv) fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents;
(v) fifthly, in or towards payment of any commercial and/or technical management fees due to an Approved Manager and the balance to be paid at the discretion of the Borrowers;
(vi) sixthly, in or towards payment of any other expenses of the Borrower relating to the Ships due but unpaid; and
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(vii) seventhly, any remaining balance to be paid to the Borrowers.
(b) The Facility Agent shall, if so directed by the Majority Lenders and all the Hedge Counterparties, vary, or instruct the Security Agent to vary (as applicable), the order set out in sub-paragraphs (ii) to (iv) of paragraph (a) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by a Transaction Obligor.
34.6 No set-off by Transaction Obligors
(a) All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
(b) Paragraph (a) above shall not affect the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.
34.7 Business Days
(a) Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
34.8 Currency of account
(a) Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.
(b) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
34.9 Change of currency
(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Borrowers); and
(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).
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(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.
34.10 Currency Conversion
(a) For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.
(b) The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
34.11 Disruption to Payment Systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by a Borrower that a Disruption Event has occurred:
(a) the Facility Agent may, and shall if requested to do so by a Borrower, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;
(b) the Facility Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(c) the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(d) any such changes agreed upon by the Facility Agent and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 44 (Amendments and Waivers);
(e) the Facility Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 34.11 (Disruption to Payment Systems etc.); and
(f) the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
35 Set-Off
A Finance Party may set off any matured obligation due from a Transaction Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Transaction Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in
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different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
36 Bail-In
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a) any Bail-In Action in relation to any such liability, including (without limitation):
(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
(iii) a cancellation of any such liability; and
(b) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
37 Notices
37.1 Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
37.2 Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:
(a) in the case of the Borrowers, that specified in Schedule 1 (The Parties);
(b) in the case of each Lender, each Hedge Counterparty or any other Obligor, that specified in Schedule 1 (The Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Facility Agent on or before the date on which it becomes a Party;
(c) in the case of the Facility Agent, that specified in Schedule 1 (The Parties); and
(d) in the case of the Security Agent, that specified in Schedule 1 (The Parties),
or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.
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37.3 Delivery
(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
(i) if by way of fax, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant address or [five] Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its address details provided under Clause 37.2 (Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 (The Parties) (or any substitute department or officer as that Servicing Party shall specify for this purpose).
(c) All notices from or to a Transaction Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.
(d) Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.
(e) Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
37.4 Notification of address and fax number
Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 37.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.
37.5 Electronic communication
(a) Any communication to be made or document to be delivered by one Party to another under or in connection with the Finance Documents may be made or delivered by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
(ii) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.
(b) Any such electronic communication or delivery as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication or delivery.
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(c) Any such electronic communication or document as specified in paragraph (a) above made or delivered by one Party to another will be effective only when actually received (or made available) in readable form and in the case of any electronic communication or document made or delivered by a Party to the Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent shall specify for this purpose.
(d) Any electronic communication or document which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication or document is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(e) Any reference in a Finance Document to a communication being sent or received or a document being delivered shall be construed to include that communication or document being made available in accordance with this Clause 37.5 (Electronic communication).
37.6 English language
(a) Any notice given under or in connection with any Finance Document must be in English.
(b) All other documents provided under or in connection with any Finance Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
37.7 Hedging Agreement
Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by a Borrower with a Hedge Counterparty in connection with the Facility.
38 Calculations and Certificates
38.1 Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
38.2 Certificates and determinations
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
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38.3 Day count convention and interest calculation
(a) Any interest, commission or fee accruing under a Finance Document will accrue from day to day and the amount of any such interest, commission or fee is calculated:
(i) on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice; and
(ii) subject to paragraph (b) below, without rounding.
(b) The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by an Obligor under a Finance Document shall be rounded to 2 decimal places.
39 Partial Invalidity
If, at any time, any provision of a Finance Document 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 under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
40 Remedies and Waivers
(a) No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of a Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
(b) No variation or amendment of a Finance Document shall be valid unless in writing and signed by or on behalf of all the relevant Finance Parties in accordance with the provisions of Clause 44 (Amendments and waivers).
41 Entire Agreement
(a) This Agreement, in conjunction with the other Finance Documents, constitutes the entire agreement between the Parties and supersedes all previous agreements, understandings and arrangements between them, whether in writing or oral, in respect of its subject matter.
(b) Each Obligor acknowledges that it has not entered into this Agreement or any other Finance Document in reliance on, and shall have no remedies in respect of, any representation or warranty that is not expressly set out in this Agreement or in any other Finance Document.
42 Settlement or Discharge Conditional
Any settlement or discharge under any Finance Document between any Finance Party and any Transaction Obligor shall be conditional upon no security or payment to any Finance Party by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
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43 Irrevocable Payment
If the Facility Agent considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to a Secured Party under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.
44 Amendments and Waivers
44.1 Required consents
(a) Subject to Clause 44.2 (All Lender matters) and Clause 44.3 (Other exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and, in the case of an amendment, the Obligors and any such amendment or waiver will be binding on all Parties.
(b) The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 44 (Amendments and Waivers).
(c) Without prejudice to the generality of Clause 30.8 (Rights and discretions), the Facility Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.
(d) Paragraph (c) of Clause 28.16 (Pro rata interest settlement) shall apply to this Clause 44 (Amendments and Waivers).
44.2 All Lender matters
Subject to Clause 44.4 (Changes to reference rates), an amendment of or waiver or consent in relation to any term of any Finance Document that has the effect of changing or which relates to:
(a) the definition of "Majority Lenders" in Clause 1.1 (Definitions);
(b) a postponement to or extension of the date of payment of any amount under the Finance Documents;
(c) a reduction in the Margin or the amount of any payment of principal, interest, fees or commission payable;
(d) a change in currency of payment of any amount under the Finance Documents;
(e) an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments rateably under the Facility;
(f) a change to any Transaction Obligor other than in accordance with Clause 29 (Changes to the Transaction Obligors);
(g) any provision which expressly requires the consent of all the Lenders;
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(h) this Clause 44 (Amendments and Waivers);
(i) any change to the preamble (Background), Clause 2 (The Facility), Clause 3 (Purpose), Clause 5 (Utilisation), Clause 6.2 (Effect of cancellation and prepayment on scheduled repayments), Clause 7.4 (Mandatory prepayment on default under Shipbuilding Contract), Clause 7.5 (Mandatory prepayment on sale or Total Loss) or Clause 7.6 (Mandatory prepayment of Hedging Prepayment Proceeds), Clause 8 (Interest), Clause 24.10 (Compliance with laws etc.), Clause 24.12 (Sanctions and Ship trading), Clause 24.13 (Russian Price Cap Framework), Clause 26 (Accounts, application of Earnings and Hedge Receipts), Clause 28 (Changes to the Lenders and the Hedge Counterparties), Clause 33 (Sharing among the Finance Parties), Clause 48 (Governing Law) or Clause 49 (Enforcement);
(j) (other than as expressly permitted by the provisions of any Finance Document), the nature or scope of:
(i) the guarantees and indemnities granted under any of Clause 18 (Guarantee and Indemnity – Hedge Guarantors) or clause 2 (guarantee and indemnity) of the Guarantee or any other guarantee and indemnity forming part of the Finance Documents;
(ii) the joint and several liability of the Borrowers under Clause 17 (Joint and Several Liability of the Borrowers);
(iii) the Security Assets; or
(iv) the manner in which the proceeds of enforcement of the Transaction Security are distributed,
(except in the case of sub-paragraphs (iii) and (iv) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document); or
(k) the release or any material variation of the guarantees and indemnities granted under Clause 18 (Guarantee and Indemnity – Hedge Guarantors) or clause 2 (guarantee and indemnity) of the Guarantee, the joint and several liability of the Borrowers under Clause 17 (Joint and Several Liability of the Borrowers) or of any Transaction Security or any guarantee, indemnity or subordination arrangement set out in a Finance Document unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document,
shall not be made, or given, without the prior consent of all the Lenders.
44.3 Other exceptions
(a) An amendment or waiver which relates to the rights or obligations of a Servicing Party, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator (each in their capacity as such) may not be effected without the consent of that Servicing Party, the Mandated Lead Arranger, the Bookrunner or the Co-ordinator, as the case may be.
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(b) An amendment or waiver which relates to and would adversely affect the rights or obligations of a Hedge Counterparty (in its capacity as such) may not be effected without the consent of that Hedge Counterparty.
(c) The Borrowers and the Facility Agent, the Mandated Lead Arranger, the Bookrunner, the Co-ordinator or the Security Agent, as applicable, may amend or waive a term of a Fee Letter to which they are party.
(d) The Hedge Counterparty and the relevant Borrower may amend, supplement or waive the terms of any Hedging Agreement if permitted by paragraph (h) of Clause 8.5 (Hedging).
44.4 Changes to reference rates
(a) Subject to Clause 44.3 (Other exceptions), any amendment or waiver which relates to:
(i) providing for the use of a Replacement Reference Rate in place of the RFR; and
(ii)
(A) aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
(B) enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
(C) implementing market conventions applicable to that Replacement Reference Rate;
(D) providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
(E) adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
may be made with the consent of the Facility Agent (acting on the instructions of the Majority Lenders) and the Borrowers.
(b) An amendment or waiver that relates to, or has the effect of, aligning the means of calculation of interest on the Loan or any part of the Loan under this Agreement to any recommendation of a Relevant Nominating Body which:
(i) relates to the use of the RFR on a compounded basis in the international or any relevant domestic syndicated loan markets; and
(ii) is issued on or after the date of this Agreement,
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may be made with the consent of the Facility Agent (acting on the instructions of the Lenders) and the Borrowers.
(c) If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) or (b) above within 10 Business Days (or such longer time period in relation to any request which the Borrowers and the Facility Agent may agree) of that request being made:
(i) its Commitment or its participation in the Loan (as the case may be) shall not be included for the purpose of calculating the Total Commitments or the amount of the Loan (as applicable) when ascertaining whether any relevant percentage of Total Commitments or the aggregate of participations in the Loan (as applicable) has been obtained to approve that request; and
(ii) its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
(d) In this Clause 44.4 (Changes to reference rates):
"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
"Replacement Reference Rate" means a reference rate which is:
(a) formally designated, nominated or recommended as the replacement for the RFR by:
(i) the administrator of the RFR (provided that the market or economic reality that such reference rate measures is the same as that measured by the RFR); or
(ii) any Relevant Nominating Body,
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Reference Rate" will be the replacement under sub‑paragraph (ii) above;
(b) in the opinion of the Majority Lenders and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to the RFR; or
(c) in the opinion of the Majority Lenders and the Borrowers, an appropriate successor or alternative to the RFR.
44.5 Obligor Intent
Without prejudice to the generality of Clauses 1.2 (Construction), 17.2 (Waiver of defences) and 18.4 (Waiver of defences), each Obligor expressly confirms that it intends that any guarantee contained in this Agreement or any other Finance Document and any Security created by any Finance Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature;
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increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
45 Confidential Information
45.1 Confidentiality
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 45.2 (Disclosure of Confidential Information) and Clause 45.4 (Disclosure to numbering service providers) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
45.2 Disclosure of Confidential Information
Any Finance Party may disclose:
(a) to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, brokers, insurers, reinsurers, insurance advisors, insurance brokers, reinsurance brokers, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
(b) to any person:
(i) to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(iii) appointed by any Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (c) of Clause 30.15 (Relationship with the other Finance Parties));
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(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;
(vii) to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.11 (Security over Lenders' rights);
(viii) which is a classification society or other entity which a Lender has engaged to make the calculations necessary to enable that Lender to comply with its reporting obligations under the Poseidon Principles and the Net Zero Banking Alliance;
(ix) who is a Party, a member of the Group or any related entity of a Transaction Obligor;
(x) as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
(xi) with the consent of the Guarantor;
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
(A) in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(B) in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
(C) in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
(c) to any person appointed by that Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may
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be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/ Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the relevant Finance Party;
(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors.
45.3 DAC6
Nothing in any Finance Document shall prevent disclosure of any Confidential Information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A 1 of Annex IV of Directive 2011/16/EU.
45.4 Disclosure to numbering service providers
(a) Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Transaction Obligors the following information:
(i) names of Transaction Obligors;
(ii) country of domicile of Transaction Obligors;
(iii) place of incorporation of Transaction Obligors;
(iv) date of this Agreement;
(v) Clause 48 (Governing Law);
(vi) the names of the Facility Agent, the Mandated Lead Arranger, the Bookrunner and the Co-ordinator;
(vii) date of each amendment and restatement of this Agreement;
(viii) amount of Total Commitments;
(ix) currency of the Facility;
(x) type of Facility;
(xi) ranking of Facility;
(xii) Termination Date for Facility;
(xiii) changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and
(xiv) such other information agreed between such Finance Party and the Borrowers,
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to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
(b) The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Transaction Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
(c) Each Obligor represents, on behalf of itself and the other Transaction Obligors, that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
(d) The Facility Agent shall notify the Guarantor and the other Finance Parties of:
(i) the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Transaction Obligors; and
(ii) the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Transaction Obligors by such numbering service provider.
45.5 Entire agreement
This Clause 45 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
45.6 Inside information
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
45.7 Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:
(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 45.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function;
(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 45 (Confidential Information); and
(c) in respect of any publicity regarding the Facility or any of the terms thereof which shall be agreed in advance by the Guarantor and the Facility Agent unless otherwise provided in the Facility Agreement.
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45.8 Continuing obligations
The obligations in this Clause 45 (Confidential Information) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:
(a) the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
(b) the date on which such Finance Party otherwise ceases to be a Finance Party.
46 Confidentiality of Funding Rates
46.1 Confidentiality and disclosure
(a) The Facility Agent and each Obligor agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b) and (c) below.
(b) The Facility Agent may disclose:
(i) any Funding Rate to the Borrower pursuant to Clause 8.4 (Notifications); and
(ii) any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender.
(c) The Facility Agent and each Obligor may disclose any Funding Rate, to:
(i) any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives, if any person to whom that Funding Rate is to be given pursuant to this sub-paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or is otherwise bound by requirements of confidentiality in relation to it;
(ii) any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
(iii) any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate is to be given is
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informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and
(iv) any person with the consent of the relevant Lender.
46.2 Related obligations
(a) The Facility Agent and each Obligor acknowledge that each Funding Rate is or may be price sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate for any unlawful purpose.
(b) The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender:
(i) of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (c) of Clause 46.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(ii) upon becoming aware that any information has been disclosed in breach of this Clause 46 (Confidentiality of Funding Rates).
46.3 No Event of Default
No Event of Default will occur under Clause 27.4 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 46 (Confidentiality of Funding Rates).
47 Counterparts
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
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Section 12
Governing Law and Enforcement
48 Governing Law
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
49 Enforcement
49.1 Jurisdiction
(a) Unless specifically provided in another Finance Document in relation to that Finance Document, the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with any Finance Document (including a dispute regarding the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) (a "Dispute").
(b) The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
(c) To the extent allowed by law, this Clause 49.1 (Jurisdiction) is for the benefit of the Secured Parties only. As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.
49.2 Service of process
(a) Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
(i) irrevocably appoints Hill Dickinson Services (London) Limited at its registered office from time to time, presently at The Broadgate Tower 7th Floor, 20 Primrose Street, London, EC2A 2EW, England, as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(ii) agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
(b) If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrowers (on behalf of all the Obligors) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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Execution Pages
BORROWERS
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
BRANDEIS SHIPPING CORPORATION )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by ) /s/ Panagiotis Boumpouras
as attorney-in-fact )
for and on behalf of )
MANDORA SHIPPING LTD )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by ) /s/ Panagiotis Boumpouras
as attorney-in-fact )
for and on behalf of )
RONDINE MANAGEMENT CORP. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by ) /s/ Panagiotis Boumpouras
as attorney-in-fact )
for and on behalf of )
PERAN MARITIME INC. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
167 EUROPE/78937797v7
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
ZONER SHIPTRADE S.A. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by ) /s/ Panagiotis Boumpouras
as attorney-in-fact )
for and on behalf of )
PANDORA MARINE INC. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by ) /s/ Panagiotis Boumpouras
as attorney-in-fact )
for and on behalf of )
PYRGI SHIPPING CORPORATION )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by ) /s/ Panagiotis Boumpouras
as attorney-in-fact )
for and on behalf of )
OTHONOI SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
168 EUROPE/78937797v7
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
EREIKOUSA SHIPPING CORPORATION )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
HEDGE GUARANTORS
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
BRANDEIS SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
MANDORA SHIPPING LTD )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
RONDINE MANAGEMENT CORP. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
169 EUROPE/78937797v7
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
PERAN MARITIME INC. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
ZONER SHIPTRADE S.A. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
for and on behalf of )
PANDORA MARINE INC. ) /s/ Panagiotis Boumpouras
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
for and on behalf of )
PYRGI SHIPPING CORPORATION ) /s/ Panagiotis Boumpouras
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
170 EUROPE/78937797v7
SIGNED by )
as attorney-in-fact )
for and on behalf of ) /s/ Panagiotis Boumpouras
OTHONOI SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
for and on behalf of )
EREIKOUSA SHIPPING CORPORATION )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
ORIGINAL LENDERS
SIGNED by )
duly authorised ) /s/ Marianna Psarrou
for and on behalf of )
BNP PARIBAS )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
ORIGINAL HEDGE COUNTERPARTIES
SIGNED by )
duly authorised )
for and on behalf of ) /s/ Marianna Psarrou
BNP PARIBAS )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
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MANDATED LEAD ARRANGER
SIGNED by )
duly authorised )
for and on behalf of ) /s/ Marianna Psarrou
BNP PARIBAS )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
BOOKRUNNER
SIGNED by )
duly authorised ) /s/ Marianna Psarrou
for and on behalf of )
BNP PARIBAS )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
CO-ORDINATOR
SIGNED by ) /s/ Marianna Psarrou
duly authorised )
for and on behalf of )
BNP PARIBAS )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
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FACILITY AGENT
SIGNED by )
duly authorised ) /s/ Marianna Psarrou
for and on behalf of )
BNP PARIBAS )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SECURITY AGENT
SIGNED by )
duly authorised ) s/ Marianna Psarrou
for and on behalf of )
BNP PARIBAS )
in the presence of: ) /s/ Ioli Petroula Vasalaki
Witness' signature: )
Witness' name: )
Witness' address: )
173 EUROPE/78937797v7
EX-99.3
Exhibit 99.3
Dated 25 June 2025
up to $100,000,000
REDUCING REVOLVING CREDIT LOAN FACILITY
Legato Shipholding Inc.
Crayon Shipping Ltd
Inastros Maritime Corp.
Jasmer Shipholding Ltd
Chilali Corp.
Highbird Management Inc.
Iris Shipping Corporation
Kymata Shipping Co.
Aurora Shipping Enterprises Ltd.
Sun Shipping Corporation
Kerkyra Shipping Corporation
Zakynthos Shipping Corporation
Persephone Shipping Corporation
as joint and several Borrowers
and
NATIONAL BANK OF GREECE S.A.
as Original Lender
FACILITY AGREEMENT
secured on three tanker vessels, six bulk carrier vessels and four container carrier vessels
Index
Clause Page
| Section 1 Interpretation | 3 | |
|---|---|---|
| 1 | Definitions and Interpretation | 3 |
| Section 2 The Facility | 26 | |
| 2 | The Facility | 26 |
| 3 | Purpose | 26 |
| 4 | Conditions of Utilisation | 26 |
| Section 3 Utilisation | 28 | |
| 5 | Utilisation | 28 |
| Section 4 Repayment, Prepayment and Cancellation | 29 | |
| 6 | Repayment | 29 |
| 7 | Prepayment and Cancellation | 30 |
| Section 5 Costs of Utilisation | 33 | |
| 8 | Interest | 33 |
| 9 | Interest Periods | 34 |
| 10 | Changes to the Calculation of Interest | 34 |
| 11 | Fees | 36 |
| Section 6 Additional Payment Obligations | 37 | |
| 12 | Tax Gross Up and Indemnities | 37 |
| 13 | Increased Costs | 40 |
| 14 | Other Indemnities | 42 |
| 15 | Costs and Expenses | 44 |
| Section 7 Joint and Several Liability of Borrowers | 45 | |
| 16 | Joint and Several Liability of the Borrowers | 45 |
| Section 8 Representations, Undertakings and Events of Default | 47 | |
| 17 | Representations | 47 |
| 18 | Information Undertakings | 53 |
| 19 | General Undertakings | 56 |
| 20 | Insurance Undertakings | 62 |
| 21 | Ship Undertakings | 67 |
| 22 | Security Cover | 75 |
| 23 | Accounts and Application of Earnings | 77 |
| 24 | Events of Default | 78 |
| Section 9 Changes to The Parties | 84 | |
| 25 | Changes to the Lender | 84 |
| 26 | Changes to the Transaction Obligors | 85 |
| Section 10 Administration | 86 | |
| 27 | Payment Mechanics | 86 |
| 28 | Set-Off | 87 |
| 29 | Conduct of Business by the Lender | 88 |
| 30 | Bail-In | 88 |
| 31 | Notices | 88 |
| 32 | Calculations and Certificates | 90 |
| 33 | Partial Invalidity | 91 |
| 34 | Remedies and Waivers | 91 |
| 35 | Entire Agreement | 91 |
| 36 | Settlement or Discharge Conditional | 91 |
| 37 | Irrevocable Payment | 91 |
| 38 | Amendments | 92 |
EUROPE/78974442v6
| 39 | Confidential Information | 94 |
|---|---|---|
| 40 | Confidentiality of Funding Rates | 97 |
| 41 | Counterparts | 98 |
| Section 11 Governing Law and Enforcement | 99 | |
| 42 | Governing Law | 99 |
| 43 | Enforcement | 99 |
Schedules
| Schedule 1 The Parties | 100 |
|---|---|
| Part A The Borrowers | 100 |
| Part B The Original Lender | 104 |
| Schedule 2 Conditions precedent | 105 |
| Part A Conditions precedent to Initial Utilisation Request | 105 |
| Part B Conditions precedent to Utilisation | 107 |
| Schedule 3 Utilisation Request | 109 |
| Schedule 4 Details of the Ships and Other Definitions | 111 |
| Schedule 5 Timetables | 116 |
Execution
| Execution Pages | 117 |
|---|
EUROPE/78974442v6
THIS AGREEMENT is made on ____ June 2025
Parties
(1) Legato Shipholding Inc., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower A")
(2) CRAYON SHIPPING LTD, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower B")
(3) INASTROS MARITIME CORP., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower C")
(4) Jasmer Shipholding Ltd, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower D")
(5) Chilali Corp., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower E")
(6) Highbird Management Inc., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower F")
(7) IRIS SHIPPING CORPORATION, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower G")
(8) KYMATA SHIPPING CO., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower H")
(9) AURORA SHIPPING ENTERPRISES LTD., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower I")
(10) SUN SHIPPING CORPORATION, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower J")
(11) KERKYRA SHIPPING CORPORATION, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower K")
(12) ZAKYNTHOS SHIPPING CORPORATION, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower L")
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(13) PERSEPHONE SHIPPING CORPORATION, a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as a borrower ("Borrower M")
(14) NATIONAL BANK OF GREECE S.A. acting through its office at 2 Bouboulinas Street & Akti Miaouli, Piraeus 185 35, Greece as lender (the "Original Lender")
Background
The Lender has agreed to make available to the Borrowers a reducing revolving credit loan facility not exceeding the lower of (i) $100,000,000 and (ii) 50 per cent. of the aggregate Initial Market Value of the Ships for the purposes of (i) refinancing any existing indebtedness and (ii) the general corporate and working capital of the Group.
Operative Provisions
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Section 1
Interpretation
1 Definitions and Interpretation
1.1 Definitions
In this Agreement:
"Account Bank" means National Bank of Greece S.A. acting through its office at 2 Bouboulinas Street & Akti Miaouli, Piraeus 185 35, Greece or any replacement bank or other financial institution as may be approved by the Lender.
"Accounts" means the Earnings Accounts.
"Advance" means any Utilisation under this Agreement.
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"Approved Brokers" means any first class firm or firms of insurance brokers approved in writing by the Lender.
"Approved Classification" means, in relation to a Ship, as at the date of this Agreement, the classification in relation to that Ship specified in Schedule 4 (Details of the Ships and Other Definitions) with the relevant Approved Classification Society or the equivalent classification with another Approved Classification Society.
"Approved Classification Society" means, in relation to a Ship, as at the date of this Agreement, the classification society in relation to that Ship specified in Schedule 4 (Details of the Ships and Other Definitions) or any other classification society approved in writing by the Lender such approval not to be unreasonably withheld.
"Approved Flag" means, in relation to a Ship, as at the date of this Agreement, the flag in relation to that Ship specified in Schedule 4 (Details of the Ships and Other Definitions) or such other flag and, if applicable port of registry, approved in writing by the Lender and which approval shall not be withheld in the case of the Panamanian, Cypriot, Liberian, Maltese, Portuguese or Marshall Islands flags and a reference to "the Approved Flag" in respect of a Ship shall be a reference to the flag and, if applicable port of registry, under which that Ship is then flagged with the agreement of the Lender.
"Approved Manager" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Approved Valuer" means Fearnleys AS, Clarkson Valuations Limited, Howe Robinson, Simpson Spence & Young, MB Shipbrokers, E.A. Gibson Shipbrokers Limited, Arrow Valuations, Braemar Seascope Ltd, VesselsValue Limited and Allied Shipbroking Inc. (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Lender.
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
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"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
"Availability Period" means the period from and including the date of this Agreement to and including the date falling one Business Day before the last Reduction Date.
"Available Facility" means the Commitment minus:
(a) the amount of any outstanding Advances; and
(b) in relation to any proposed Utilisation, the amount of any Advances that are due to be made on or before the proposed Utilisation Date,
other than, any Advances that are due to be repaid or prepaid on or before the proposed Utilisation Date.
"Bail-In Action" means the exercise of any Write-down and Conversion Powers.
"Bail-In Legislation" means:
(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
(b) in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and
(c) in relation to the United Kingdom, the UK Bail-In Legislation.
"Borrower" means Borrower A, Borrower B, Borrower C, Borrower D, Borrower E, Borrower F, Borrower G, Borrower H, Borrower I, Borrower J, Borrower K, Borrower L or Borrower M.
"Break Costs" means the amount (if any) by which:
(a) the interest (excluding the Margin) which the Lender should have received for the period from the date of receipt of all or any part of the Loan or that Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period,
exceeds:
(b) the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Athens, Piraeus and New York and (in relation to the fixing of an interest rate) which is an RFR Banking Day.
"Change of Control" has the meaning given to it in Clause 24.11 (Change of control).
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"Charter" means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence.
"Charter Assignment" means an assignment of a Charter and any Charter Guarantee which is assignable pursuant to Clause 21.21 (Charter assignment) in favour of the Lender in form and substance satisfactory to the Lender.
"Charter Guarantee" means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.
"Code" means the US Internal Revenue Code of 1986.
"Commitment" means $100,000,000, to the extent not cancelled or reduced under this Agreement.
"Confidential Information" means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which the Lender becomes aware in its capacity as, or for the purpose of becoming, the Lender or which is received by the Lender in relation to, or for the purpose of becoming the Lender under, the Finance Documents or the Facility from any member of the Group or any of its advisers in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(a) information that:
(i) is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 39 (Confidential Information);
(ii) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers;
(iii) is known by the Lender before the date the information is disclosed to it by any member of the Group or any of its advisers or is lawfully obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with the Group and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; or
(iv) in relation to the Guarantor, such information as the Guarantor is entitled to disclose by rules and regulations of the US Securities and Exchange Commission and any US stock exchange applicable to the Guarantor; and
(b) any Funding Rate.
"Confidentiality Undertaking" means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrowers and the Lender.
"Deed of Covenant" means, in relation to a Ship, if required by the laws of the Approved Flag of that Ship, the deed of covenant collateral to the Mortgage over that Ship and creating Security over that Ship in agreed form.
"Default" means an Event of Default or a Potential Event of Default.
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"Designated Unitholder" means Mrs. Angeliki Frangou, her direct descendants and their lineal descendants, either directly or indirectly, (through entities owned and controlled by her or any of their affiliates or trusts or foundations established or that may be established of which she is a beneficiary or her direct descendants or their lineal descendants are a beneficiary) being the ultimate beneficial owner(s) of, or having ultimate control of, the voting rights attaching to more than 5 per cent. of all the units (including for the avoidance of doubt both general partner units and common units) in the Corporate Guarantor and in the plural means all of them.
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Lender.
"Disruption Event" means either or both of:
(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Transaction Obligor; or
(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:
(i) from performing its payment obligations under the Finance Documents; or
(ii) from communicating with other Parties or, if applicable, any Transaction Obligor in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Transaction Obligor whose operations are disrupted.
"Document of Compliance" has the meaning given to it in the ISM Code.
"dollars" and "$" mean the lawful currency, for the time being, of the United States of America.
"Earnings" means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Lender and which arise out of or in connection with or relate to the use or operation of that Ship, including (but not limited to):
(a) the following, save to the extent that any of them is, with the prior written consent of the Lender, pooled or shared with any other person:
(i) all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;
(ii) the proceeds of the exercise of any lien on sub-freights;
(iii) compensation payable to a Borrower or the Lender in the event of requisition of that Ship for hire or use;
(iv) remuneration for salvage and towage services;
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(v) demurrage and detention moneys;
(vi) without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
(vii) all moneys which are at any time payable under any Insurances in relation to loss of hire;
(viii) all monies which are at any time payable to a Borrower in relation to general average contribution; and
(b) if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (viii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.
"Earnings Account" means, in relation to a Borrower:
(a) an account in the name of that Borrower with the Account Bank designated "Earnings Account";
(b) any other account in the name of that Borrower with the Account Bank which may, with the prior written consent of the Lender, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or
(c) any sub-account of any account referred to in paragraph (a) or (b) above.
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under Environmental Law.
"Environmental Claim" means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, "claim" includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
"Environmental Incident" means:
(a) any release, emission, spill or discharge of Environmentally Sensitive Material whether within a Ship or from a Ship into any other vessel or into or upon the air, water, land or soils (including the seabed) or surface water; or
(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water from a vessel other than any Ship and which involves a collision between any Ship and such other vessel or some other incident of navigation or operation, in either
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case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action.
"Environmental Law" means any present or future law in force relating to vessel disposal, energy efficiency, carbon reduction, emissions, emissions trading, pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
"Environmentally Sensitive Material" means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
"EU Bail-In Legislation Schedule" means the document described as such and published by the LMA from time to time.
"EU Ship Recycling Regulation" means Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC.
"Event of Default" means any event or circumstance specified as such in Clause 24 (Events of Default).
"Facility" means the reducing revolving credit facility made available under this Agreement as described in Clause 2 (The Facility).
"Facility Office" means the office or offices through which the Lender will perform its obligations under this Agreement.
"FATCA" means:
(a) sections 1471 to 1474 of the Code or any associated regulations;
(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.
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"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.
"Fee Letter" means any letter or letters dated on or about the date of this Agreement between any of the Lender and the Borrowers setting out fees referred to in Clause 11 (Fees).
"Finance Document" means:
(a) this Agreement;
(b) any Fee Letter;
(c) each Utilisation Request;
(d) any Security Document;
(e) any Manager's Undertaking;
(f) the Guarantee;
(g) any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
(h) any other document designated as such by the Lender and the Borrowers.
"Financial Indebtedness" means any indebtedness for or in relation to:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability;
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;
(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
(h) any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
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(i) the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
"Funding Rate" means any rate notified by the Lender to the Borrowers pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.3 (Cost of funds).
"GAAP" means generally accepted accounting principles in the US.
"General Assignment" means, in relation to a Ship, the general assignment creating Security over:
(a) that Ship's Earnings, its Insurances and any Requisition Compensation in relation to that Ship; and
(b) any Charter and any Charter Guarantee in relation to that Ship,
in agreed form.
"Government Entity" means any national or local government body, tribunal, court or regulatory or other agency and any organisation of which such body, tribunal, court or agency is a part or to which it is subject.
"Group" means, at any relevant time (excluding any Subsidiaries whose shares are listed on any public stock exchange and/or whose financial statements are not consolidated into the financial statements of the Group), the Borrowers, the Guarantor and their Subsidiaries and "member of the Group" shall be construed accordingly.
"Guarantee" means a guarantee executed by the Guarantor in agreed form.
"Guarantor" means Navios Maritime Partners L.P., a limited partnership formed in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
"Historic Term SOFR" means, in relation to the Loan or any part of the Loan, the most recent applicable Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan and which is as of a day which is no more than three RFR Banking Days before the Quotation Day.
"Holding Company" means, in relation to a person, any other person in relation to which it is a Subsidiary.
"Indemnified Person" has the meaning given to it in Clause 14.2 (Other indemnities).
"Initial Charter" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Initial Charterer" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Initial Market Value" means, in relation to a Ship, the Market Value of that Ship calculated in accordance with the valuation(s) relating to it referred to in paragraph 2.5 of Part B of Schedule 2 (Conditions precedent).
"Insurances" means, in relation to a Ship:
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(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
(b) all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
"Interest Payment Date" has the meaning given to it in paragraph (a) of Clause 8.2 (Payment of interest).
"Interest Period" means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).
"Interpolated Historic Term SOFR" means in relation to the Loan or any part of the Loan the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
(a) either:
(i) the most recent applicable Term SOFR (as of a day which is not more than three RFR Banking Days before the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
(ii) if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, the most recent RFR for a day which is no more than five RFR Banking Days (and no less than two RFR Banking Days) before the Quotation Day; and
(b) the most recent applicable Term SOFR (as of a day which is not more than three RFR Banking Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.
"Interpolated Term SOFR" means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
(a) either:
(i) the applicable Term SOFR (as of the Specified Time) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
(ii) if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, the RFR for the day which is two RFR Banking Days before the Quotation Day; and
(b) the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.
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"Inventory of Hazardous Materials" means, in relation to a Ship, an inventory certificate or statement of compliance (as applicable) issued by the relevant classification society or shipyard authority which is supplemented by a list of any and all materials known to be potentially hazardous utilised in the construction of, or otherwise installed on, that Ship, pursuant to the requirements of the EU Ship Recycling Regulation.
"ISM Code" means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.
"ISPS Code" means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization's (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.
"Lender" means:
(a) the Original Lender; and
(b) any bank, financial institution, trust, fund or other entity which has become the Lender in accordance with Clause 25 (Changes to the Lender),
which in each case has not ceased to be a Party in accordance with this Agreement.
"LMA" means the Loan Market Association or any successor organisation.
"Loan" means the aggregate amount of Advances made or to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a "part of the Loan" means an Advance or any other part of the Loan as the context may require.
"Lookback Period" means the number of days specified as such in the Reference Rate Terms.
"Major Casualty" means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,000,000 or the equivalent in any other currency.
"Management Agreement" means the agreement entered into between a Borrower or the Guarantor and an Approved Manager regarding the commercial and/or technical management of a Ship.
"Manager's Undertaking" means, in relation to a Ship, the letter of undertaking from its Approved Manager assigning the rights of such Approved Manager in respect of the Insurances of that Ship and subordinating the rights of such Approved Manager against that Ship and the relevant Borrower to the rights of the Lender in agreed form.
"Margin" means 1.70 per cent. per annum.
"Market Disruption Rate" means the Reference Rate.
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"Market Value" means, in relation to a Ship or any other vessel, at any date, the market value of that Ship or vessel determined by valuation(s) in accordance with Clause 22.7 (Provision of valuations) and, prepared:
(a) unless otherwise specified by the Lender, as at a date not more than 30 days previously;
(b) by Approved Valuers (selected and appointed by the Lender for the purpose of the annual valuations to be provided thereafter);
(c) with or without physical inspection of that Ship or vessel (as the Lender may require); and
(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter.
"Material Adverse Effect" means a material adverse effect on:
(a) the business, operations, property or condition (financial or otherwise) of the Guarantor or the Group as a whole; or
(b) the ability of any Transaction Obligor to perform its obligations under any Finance Document; or
(c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents.
"Minimum Liquidity" has the meaning given to it in Clause 23.5 (Minimum Liquidity).
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a) (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period.
"Mortgage" means, in relation to a Ship, a first preferred or, as the case may be, priority ship mortgage on that Ship in agreed form or any replacement first preferred or first priority ship mortgage on that Ship under the laws of an Approved Flag in agreed form.
"Original Financial Statements" means the annual audited consolidated financial statements of the Group for its financial year ended 31 December 2024.
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"Original Jurisdiction" means, in relation to a Borrower, the jurisdiction under whose laws that Borrower is incorporated as at the date of this Agreement.
"Overseas Regulations" means the Overseas Companies Regulations 2009 (SI 2009/1801).
"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
"Party" means a party to this Agreement.
"Permitted Charter" means, in relation to a Ship:
(a) each Initial Charter; and
(b) a Charter;
(i) which is a time, voyage or consecutive voyage charter;
(ii) the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 12 months plus a redelivery allowance of not more than 30 days;
(iii) which is entered into on bona fide arm's length terms at the time at which that Ship is fixed; and
(iv) in relation to which not more than two months' hire is payable in advance,
and any other Charter which is approved in writing by the Lender such approval not to be unreasonably withheld.
"Permitted Earnings Account" means:
(a) in relation to each of Borrower A, Borrower B, Borrower C and Borrower D, the relevant account in the name of that Borrower with BNP Paribas (Suisse) S.A. acting through its office at Place de Hollande 2, CP CH-1211, Geneva, Switzerland designated "Earnings Account".
(b) In relation to each of Borrower E, Borrower F, Borrower G, Borrower K, Borrower L and Borrower M, the relevant account in the name of that Borrower with Crédit Agricole Corporate and Investment Bank acting through its office at 12, Place des Etats0Unis, CS 70052, 92547 Montrouge Cedex, France designated "Earnings Account".
"Permitted Financial Indebtedness" means:
(a) any Financial Indebtedness incurred under the Finance Documents;
(b) any Financial Indebtedness (including without limitation, any shareholder or intra-Group loans made available to any Borrower in the normal course of its business of trading and operating its Ship) that is subordinated to all Financial Indebtedness incurred under the Finance Documents in a manner acceptable to the Lender in all respects.
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"Permitted Security" means:
(a) Security created by the Finance Documents;
(b) liens for unpaid master's and crew's wages in accordance with first class ship ownership and management practice and not being enforced through arrest;
(c) liens for salvage;
(d) liens for master's disbursements incurred in the ordinary course of trading in accordance with first class ship ownership and management practice and not being enforced through arrest; and
(e) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship:
(i) not as a result of any default or omission by any Borrower;
(ii) not being enforced through arrest; and
(iii) subject, in the case of liens for repair or maintenance, to Clause 21.17 (Restrictions on chartering, appointment of managers etc.),
provided such liens (i) do not exceed the amount of $600,000 and (ii) do not secure amounts more than 30 days overdue (unless the overdue amount is being contested in good faith by appropriate steps).
"Potential Event of Default" means any event or circumstance specified in Clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
"Prohibited Party" means any persons, entities or parties that are:
(a) listed on, or owned or controlled by, a person, entity or party listed on any Sanctions List; or
(b) located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person, entity or party located in, or organised under the laws of, a country or territory that is the target of country-wide Sanctions (or whose government is the target of Sanctions), as applicable; or
(c) being otherwise a target of Sanctions; or
(d) acting or purporting to act on behalf of any of the parties listed under paragraphs (a) and (b) above; or
(e) with which the Lender is prohibited from dealing, or otherwise engaging in any transaction, pursuant to OFAC, United Nations, European Union and HMT Sanctions.
"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two RFR Banking Days before the first day of that period unless market practice differs in the relevant syndicated loan market in which case the Quotation Day will be
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determined by the Lender in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
"Reduction Date" means each date by which the Facility must be reduced set out in paragraph (a) of Clause 6.2 (Reduction of the Facility).
"Reduction Instalment" means each instalment for reduction of the Advances under the Facility referred to in Clause 6.5 (Effect of cancellation and prepayment on scheduled reductions).
"Reference Rate" means, in relation to the Loan or any part of the Loan:
(a) the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b) as otherwise determined pursuant to Clause 10.1 (Unavailability of Term SOFR),
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
"Relevant Jurisdiction" means, in relation to a Transaction Obligor:
(a) its Original Jurisdiction;
(b) any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;
(c) any jurisdiction where it conducts its business; and
(d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
"Relevant Market" means the market for overnight cash borrowing collateralised by US Government Securities.
"Relevant Period" means either (i) 90 days or (ii) in respect of pirates, hijackers, terrorists or similar persons, if relevant underwriters confirm in writing (in terms satisfactory to the Lender) prior to the end of such 90 day period that such capture, appropriation, forfeiture, seizure, detention, deprivation or confiscation will be covered by the relevant Borrower's war risks insurance, the shorter of six months after the date upon which the relevant incident occurred and such period for which cover is confirmed to attach.
"Repeating Representation" means each of the representations set out in Clause 17 (Representations) except Clause 17.10 (Insolvency), Clause 17.11 (No filing or stamp taxes) and Clause 17.12 (Deduction of Tax) and any representation of any Transaction Obligor made in
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any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
"Requisition" means, in relation to a Ship, any requisition for title or other compulsory acquisition of that Ship including, capture, appropriation, forfeiture, seizure, detention, deprivation or confiscation howsoever for any reason (but excluding requisition for use or hire) by or on behalf of any Government Entity or other competent authority or by pirates, hijackers, terrorists or similar persons if that Ship is not released therefrom within the Relevant Period.
"Requisition Compensation" includes all compensation or other moneys payable to a Borrower by reason of any Requisition or any arrest or detention of a Ship in the exercise or purported exercise of any lien or claim.
"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.
"RFR" means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).
"RFR Banking Day" means any day other than:
(a) a Saturday or Sunday; and
(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
"Rollover Advance" means one or more Advances:
(a) made or to be made on the same day that a maturing Advance is due to be repaid;
(b) the aggregate amount of which is equal to or less than the amount of the maturing Advance; and
(c) made or to be made for the purpose of refinancing that maturing Advance.
"Russian Oil Price Cap Measures" means the Russian oil price cap restrictions and requirements imposed by law or regulation of the United Kingdom, the Council of the European Union and the United States of America and any other similar restrictions on the supply or delivery or maritime transportation of Russian Oil Products applicable to any Borrower.
"Russian Oil Products" means oil and oil products falling within commodity codes 2709 or 2710 which originate in or are consigned from Russia.
"Safety Management Certificate" has the meaning given to it in the ISM Code.
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"Safety Management System" has the meaning given to it in the ISM Code.
"Sanctioned Country" means a country or territory whose government is the target of Sanctions or that is subject to comprehensive country-wide or territory-wide Sanctions.
"Sanctioned Ship" means a ship which is the subject of Sanctions.
"Sanctions" means any sanctions (including US "secondary sanctions" and always taking into account cases of exemptions and licenses which render a trade being lawful and non-sanctionable), embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):
(a) imposed by law or regulation of Greece, the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America;
(b) otherwise imposed by any law or regulation binding on a Transaction Obligor or to which a Transaction Obligor is subject; or
(c) otherwise imposed by the respective governmental institutions and agencies of any of the foregoing, including without limitation, OFAC, HMT, the Council of the European Union, the United Nations and its Security Council (together, the "Sanctions Authorities").
"Sanctions List" means the "Specially Designated Nationals and Blocked Persons" list issued by OFAC, the "Consolidated List of Financial Sanctions Targets and Investment Ban List" issued by HMT, the Consolidated list of persons, groups and entities subject to European Union financial sanctions and the United Nations or any similar list issued or maintained or made public by any of the Sanctions Authorities, as applicable.
"Secured Liabilities" means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to the Lender under or in connection with each Finance Document.
"Security" means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.
"Security Assets" means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
"Security Document" means:
(a) any Mortgage;
(b) any Deed of Covenant;
(c) any General Assignment;
(d) any Charter Assignment;
(e) any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
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(f) any other document designated as such by the Lender and the Borrowers.
"Security Period" means the period starting on the date of this Agreement and ending on the date on which the Lender is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
"Security Property" means:
(a) the Transaction Security expressed to be granted in favour of the Lender and all proceeds of that Transaction Security;
(b) all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Lender and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Lender; and
(c) the Lender's interest in any turnover trust created under the Finance Documents.
"Ship" means Ship A, Ship B, Ship C, Ship D, Ship E, Ship F, Ship G, Ship H, Ship I, Ship J, Ship K, Ship L and Ship M.
"Ship A" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship B" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship C" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship D" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship E" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship F" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship G" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship H" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship I" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship J" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship K" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship L" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Ship M" has the meaning given to it in Schedule 4 (Details of the Ships and Other Definitions).
"Specified Time" means a day or time determined in accordance with Schedule 5 (Timetables).
"Subsidiary" means that a company (S) is a subsidiary of another company (P) if:
(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; and
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(b) P has direct or indirect control over a majority of the voting rights attached to the issued shares of S;
and any company of which S is a subsidiary is a parent company of S.
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
"Tax Credit" has the meaning given to it in Clause 12.1 (Definitions).
"Tax Deduction" has the meaning given to it in Clause 12.1 (Definitions).
"Tax Payment" has the meaning given to it in Clause 12.1 (Definitions).
"Term SOFR" means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).
"Termination Date" means the date falling on the earlier of (i) five years from first Utilisation or (ii) 30 June 2030.
"Third Parties Act" has the meaning given to it in Clause 1.5 (Third party rights).
"Total Loss" means, in relation to a Ship:
(a) any actual, constructive, compromised, agreed or arranged total loss of that Ship;
(b) any Requisition; or
(c) any hijacking, forfeiture, theft, condemnation, capture, seizure, arrest, detention or confiscation of that Ship not falling within the definition of Requisition by any Government Entity, or by persons allegedly acting or purporting to act on behalf of any Government Entity, unless (i) the Ship be released and restored to the relevant Borrower within ninety days after such incident, or (ii) if relevant underwriters confirm in writing (in customary terms) prior to the end of such ninety day period that such capture, seizure, detention or confiscation will be fully covered by the relevant Borrower's war risks insurance, the shorter of six months and such period for which cover is confirmed to attach.
"Total Loss Date" means, in relation to the Total Loss of a Ship:
(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
(b) in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:
(i) the date on which a notice of abandonment is given (or deemed or agreed to be given) to the insurers; and
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(ii) the date of any compromise, arrangement or agreement made by or on behalf of the relevant Borrower with that Ship's insurers in which the insurers agree to treat that Ship as a total loss;
(c) in the case of a Requisition, the date on which that Requisition occurs; and
(d) in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred.
"Transaction Document" means:
(a) a Finance Document;
(b) any Charter which is assignable in accordance with Clause 21.21 (Charter assignment);
(c) any Charter Guarantee which is assignable in accordance with Clause 21.21 (Charter assignment); or
(d) any other document designated as such by the Lender and a Borrower.
"Transaction Obligor" means a Borrower, the Guarantor, any Approved Manager who is a member of the Group or any other member of the Group who executes a Transaction Document.
"Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
"UK Bail-In Legislation" means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
"UK Establishment" means a UK establishment as defined in the Overseas Regulations.
"Unpaid Sum" means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.
"US" means the United States of America.
"US Tax Obligor" means:
(a) a person which is resident for tax purposes in the US; or
(b) a person some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
"Utilisation" means a utilisation of the Facility.
"Utilisation Date" means the date of a Utilisation, being the date on which the relevant Advance is to be made.
"Utilisation Request" means a notice substantially in the form set out in Schedule 3 (Utilisation Request).
"VAT" means:
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(a) any value added tax imposed by the Value Added Tax Act 1994;
(b) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
(c) any other tax of a similar nature, whether imposed in the United Kingdom or a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraphs (a) or (b) above, or imposed elsewhere.
"Write-down and Conversion Powers" means:
(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b) in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
(c) in relation to any other applicable Bail-In Legislation:
(i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii) any similar or analogous powers under that Bail-In Legislation.
1.2 Construction
(a) Unless a contrary indication appears, a reference in this Agreement to:
(i) the "Account Bank", the "Lender", any "Borrower", any "Party", any "Transaction Obligor" or any other person shall be construed so as to include its successors in title and permitted assigns;
(ii) "assets" includes present and future properties, revenues and rights of every description;
(iii) a liability which is "contingent" means a liability which is not certain to arise and/or the amount of which remains unascertained;
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(iv) the Lender's "cost of funds" in relation to the funding of the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which the Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of the Loan or that part of the Loan for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(v) "document" includes a deed and also a letter, fax, email or telex;
(vi) "expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
(vii) a "Finance Document", a "Security Document" or "Transaction Document" or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended, replaced, novated, supplemented, extended or restated;
(viii) "indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(ix) "law" includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
(x) "proceedings" means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;
(xi) a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
(xii) a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
(xiii) a reference to a "Ship", its name, its flag and, if applicable, its port of registry shall include any replacement name, flag and, if applicable, replacement port of registry, in each case, as may be approved in writing from time to time by the Lender;
(xiv) a provision of law is a reference to that provision as amended or re-enacted from time to time;
(xv) a time of day is a reference to Piraeus time;
(xvi) any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;
(xvii) words denoting the singular number shall include the plural and vice versa; and
(xviii) "including" and "in particular" (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
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(b) The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
(c) Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
(d) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(e) A Potential Event of Default is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.
1.3 Construction of insurance terms
In this Agreement:
"approved" means, for the purposes of Clause 20 (Insurance Undertakings), approved in writing by the Lender.
"excess risks" means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims.
"obligatory insurances" means all insurances effected, or which any Borrower is obliged to effect, under Clause 20 (Insurance Undertakings) or any other provision of this Agreement or of another Finance Document.
"policy" includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.
"protection and indemnity risks" means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision.
"war risks" includes the risk of mines and all risks excluded by clauses 29, 30 or 31 of the International Hull Clauses (1/11/02), clauses 29 or 30 of the International Hull Clauses (1/11/03), clauses 24, 25 or 26 of the Institute Time Clauses (Hulls) (1/11/95) or clauses 23, 24 or 25 of the Institute Time Clauses (Hulls) (1/10/83) or any equivalent provision.
1.4 Agreed forms of Finance Documents
References in Clause 1.1 (Definitions) to any Finance Document being in "agreed form" are to that Finance Document:
(a) in a form attached to a certificate dated the same date as this Agreement (and signed by each Borrower and the Lender); or
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(b) in any other form agreed in writing between each Borrower and the Lender.
1.5 Third party rights
(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.
(b) Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.
(c) Any Affiliate, Receiver or Delegate or any other person described in paragraph (f) of Clause 14.2 (Other indemnities), may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.
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Section 2
The Facility
2 The Facility
2.1 The Facility
Subject to the terms of this Agreement, the Lender makes available to the Borrowers a dollar reducing revolving credit facility in an aggregate amount not exceeding the Commitment.
3 Purpose
3.1 Purpose
Each Borrower shall apply all amounts borrowed by it under the Facility only for the purpose stated in the preamble (Background) to this Agreement.
3.2 Monitoring
The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4 Conditions of Utilisation
4.1 Initial conditions precedent
The Borrowers may not deliver a Utilisation Request unless the Lender has received all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Lender.
4.2 Further conditions precedent
The Lender will only be obliged to comply with Clause 5.4 (Advances) if:
(a) on the date of the Utilisation Request and on the proposed Utilisation Date and before the Advance is made available:
(i) in the case of a Rollover Advance, no Event of Default is continuing or would result from the proposed Advance, and in the case of any other Advance, no Event of Default is continuing or would result from the proposed Advance;
(ii) the Repeating Representations to be made by each Transaction Obligor are true; and
(iii) each Ship has neither been sold nor become a Total Loss; and
(b) the Lender has received on or before the first Utilisation Date, or is satisfied it will receive when the relevant Advance is made available, all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent).
4.3 Notification of satisfaction of conditions precedent
The Lender shall notify the Borrowers promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).
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4.4 Waiver of conditions precedent
If the Lender, at its discretion, permits an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) has been satisfied, the Borrowers shall ensure that that condition is satisfied within five Business Days after the relevant Utilisation Date or such later date as the Lender may agree in writing with the Borrowers.
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Section 3
Utilisation
5 Utilisation
5.1 Delivery of a Utilisation Request
The Borrowers may utilise the Facility by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time.
5.2 Completion of a Utilisation Request
(a) Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(i) the proposed Utilisation Date is a Business Day within the Availability Period;
(ii) the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and
(iii) the proposed Interest Period complies with Clause 9 (Interest Periods).
(b) Only one Advance may be requested in each Utilisation Request.
5.3 Currency and amount
(a) The currency specified in a Utilisation Request must be dollars.
(b) Subject to paragraph (c) below, the amount of the proposed Advance must be a minimum of $10,000,000.
(c) The amount of the proposed Advance must be an amount which is not more than the Available Facility.
(d) The amount of any Advance must be an amount which would not oblige the Borrowers to provide additional security or prepay part of the Advance if the ratio set out in Clause 22 (Security Cover) were applied and notice was given by the Lender under Clause 22.1 (Minimum required security cover) immediately after the relevant Advance was made.
5.4 Advances
If the conditions set out in this Agreement have been met, and subject to Clause 6.1 (Repayment of Advances), the Lender shall make each requested Advance available by the Utilisation Date through its Facility Office.
5.5 Cancellation of Commitment
The Commitment which is unutilised at the end of the Availability Period shall then be cancelled.
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Section 4
Repayment, Prepayment and Cancellation
6 Repayment
6.1 Repayment of Advances
(a) The Borrowers shall repay an Advance on the last day of its Interest Period.
(b) Without prejudice to the Borrowers' obligation under paragraph (a) above, if one or more Advances are to be made available to the Borrowers:
(i) on the same day that a maturing Advance is due to be repaid by the Borrowers; and
(ii) in whole or in part for the purpose of refinancing the maturing Advance,
the aggregate amount of the new Advances shall, unless the Borrowers notify the Lender to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Advance so that:
(A) if the amount of the maturing Advance exceeds the aggregate amount of the new Advances:
(1) the Borrowers will only be required to make a payment under Clause 27.1 (Payments to the Lender) in an amount equal to that excess; and
(2) the new Advances shall be treated as having been made available and applied by the Borrowers in or towards repayment of the maturing Advance and the Lender will not be required to make a payment in respect of the new Advances; and
(B) if the amount of the maturing Advance is equal to or less than the aggregate amount of the new Advances:
(1) the Borrowers will not be required to make a payment under Clause 27.1 (Payments to the Lender); and
(2) the Lender will be required to make a payment in respect of the new Advances only to the extent that the new Advances exceed the maturing Advance and the remainder of the new Advances shall be treated as having been made available and applied by the Borrowers in or towards repayment of the maturing Advance.
6.2 Reduction of Facility
(a) The Commitment shall be reduced by 20 equal consecutive quarterly instalments, each in an amount equal to $5,000,000, the first of which shall reduce the Commitment on the date falling on the earlier of (i) the date falling three Months after the first Utilisation or (ii) 30 September 2025.
(b) The Borrowers shall ensure that sufficient Advances are repaid on a Reduction Date to the extent necessary so that the aggregate of the outstanding Advances (after that repayment) is equal to or less than the reduced amount of the Commitment.
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6.3 Termination Date
On the Termination Date, the Borrowers shall additionally pay to the Lender all other sums then accrued and owing under the Finance Documents.
6.4 Reborrowing
Unless a contrary indication appears in this Agreement, any part of the Facility which is repaid may be reborrowed in accordance with the terms of this Agreement.
6.5 Effect of cancellation and prepayment on scheduled reductions
(a) If any part of the Available Facility is cancelled under Clause 7.1 (Illegality and Sanctions affecting the Lender) then the amount of the Reduction Instalment for each Reduction Date falling after that cancellation will be reduced pro rata by the amount of the Commitment so cancelled.
(b) If the Borrowers cancel the whole or any part of any Available Facility in accordance with Clause 7.2 (Voluntary and automatic cancellation) or if the whole or part of any Commitment is cancelled pursuant to Clause 5.5 (Cancellation of Commitment) and paragraph (a) of Clause 7.4 (Mandatory prepayment on sale or Total Loss) the amount of the Reduction Instalment for each Reduction Date falling after that cancellation will be reduced pro rata by the amount cancelled.
(c) If any Advance is prepaid in accordance with paragraph (a) of Clause 7.4 (Mandatory prepayment on sale or Total Loss) then the amount of the Reduction Instalment for each Reduction Date falling after that repayment or prepayment will be reduced pro rata by the amount of those Advances repaid or prepaid.
7 Prepayment and Cancellation
7.1 Illegality and Sanctions affecting the Lender
If it becomes unlawful or contrary to Sanctions in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain all or any part of the Loan or to determine or charge interest rates based upon Term SOFR, or it becomes unlawful for any Affiliate of the Lender for the Lender to do so:
(a) the Lender shall promptly notify the Borrowers upon becoming aware of that event and the Available Facility will be immediately cancelled; and
(b) the Borrowers shall prepay the Loan on the last day of the Interest Period for the Loan occurring after the Lender has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law) and the Commitment shall be cancelled; and
(c) accrued interest and all other amounts accrued for the Lender under the Finance Documents shall be immediately due and payable.
7.2 Voluntary and automatic cancellation
The Borrowers may, if they give the Lender not less than five Business Days' (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part of the Available Facility.
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7.3 Voluntary prepayment of Advances
The Borrowers may, if they give the Lender not less than five Business Days (or such shorter period as the Lender may agree) prior notice, prepay the whole or any part of an Advance (but, if in part, being an amount that reduces the amount of the relevant Advance by a minimum amount of $100,000 or a multiple of that amount).
7.4 Mandatory prepayment on sale or Total Loss
(a) If a Ship is sold (without prejudice to paragraph (a) of Clause 19.12 (Disposals)) or becomes a Total Loss, the Lender will calculate the Relevant Commitment and on the Relevant Date:
(i) in the event that the Relevant Commitment is greater or equal to the outstanding Advances on the Relevant Date no prepayment will be required and the Available Facility will be equal to the Relevant Commitment;
(ii) in the event that the Relevant Commitment is less than the outstanding Advances, the Borrowers shall prepay the Loan by an amount equal to the difference between the outstanding Advances and the Relevant Commitment on the Relevant Date and the Available Facility shall be reduced by an amount equal to such prepayment.
(b) If an Event of Default has occurred and is continuing, any remaining proceeds of the sale or Total Loss of a Ship after the prepayment referred to in paragraph (a) above has been made together with all other amounts that are payable on any such prepayment pursuant to the Finance Documents shall be paid by the Borrower that owned the relevant Ship to cure such Event of Default.
(c) Provided that no Event of Default has occurred and is continuing, any remaining proceeds of the sale or Total Loss of a Ship after the prepayment referred to in paragraph (a) above has been made together with all other amounts that are payable on any such prepayment pursuant to the Finance Documents shall be paid to the Borrower that owned the relevant Ship.
(d) In this Clause 7.4 (Mandatory prepayment on sale or Total Loss):
"Index Amount" means, in relation to a Ship, as at the Relevant Date, the sale price of that Ship sold or to be sold in the case of a sale or the Market Value of that Ship in the case of a Total Loss of that Ship.
"Relevant Amount" means an amount equal to the product of (i) the amount of the Commitment applicable immediately prior to completion of the sale of the relevant Ship or the Total Loss Date of the Relevant Ship multiplied by (ii) the Relevant Fraction.
"Relevant Commitment" means the amount equal to the Commitment applicable immediately prior to completion of the sale of the Relevant Ship or the Total Loss Date of the Relevant Ship less the higher of (i) the Relevant Amount and (ii) the amount required to be prepaid pursuant to Clause 22.2 (Provision of additional security; prepayment).
"Relevant Date" means:
(a) in the case of a sale of a Ship, on or before the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and
(b) in the case of a Total Loss of a Ship, on the earlier of:
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(i) the date falling 90 days after the Total Loss Date; and
(ii) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.
"Relevant Fraction" means: an amount calculated by reference to the following formula:
Relevant Fraction = A x 100
B 1
Where:
A = the Index Amount of the Ship to be sold or which becomes a Total Loss; and
B = the Index Amount of the Ship to be sold or which has become a Total Loss plus the aggregate of the Market Value of the Ships subject to a Mortgage.
7.5 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
(c) Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid may be reborrowed in accordance with the terms of this Agreement.
(d) No Borrower shall repay or prepay all or any part of the Loan or cancel all or any part of the Commitment except at the times and in the manner expressly provided for in this Agreement.
(e) No amount of the Commitment cancelled under this Agreement may be subsequently reinstated.
(f) If all or part of an Advance is repaid or prepaid and is not available for redrawing (other than by operation of Clause 4.2 (Further conditions precedent)), an amount of the Commitment (equal to the amount of the Advances which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.
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Section 5
Costs of Utilisation
8 Interest
8.1 Calculation of interest
The rate of interest on the Loan or any part of the Loan for an Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(a) Margin; and
(b) Reference Rate.
8.2 Payment of interest
(a) The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an "Interest Payment Date").
(b) If an Interest Period is longer than three Months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.
8.3 Default interest
(a) If a Transaction Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Lender. Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Transaction Obligor on demand by the Lender.
(b) If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
(i) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
(c) Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8.4 Notification of rates of interest
(a) The Lender shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
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(b) The Lender shall promptly notify the Borrower of each Funding Rate relating to the Loan or any part of the Loan.
9 Interest Periods
9.1 Selection of Interest Periods
(a) The Borrowers may select an Interest Period for an Advance in the Utilisation Request for that Advance.
(b) If the Borrowers fail to select an Interest Period in the relevant Utilisation Request, the relevant Interest Period will, subject to Clause 9.2 (Changes to Interest Periods), be three Months.
(c) Subject to this Clause 9 (Interest Periods), the Borrowers may select an Interest Period of one or three Months or of any other period agreed between the Borrowers and the Lender in relation to the relevant Advance.
(d) In addition, the Borrowers may select an Interest Period of a period of less than one Month, if necessary to ensure that (when aggregated with the Available Facility) there are sufficient Advances (with an aggregate amount equal to or greater than the Reduction Instalment) which have an Interest Period ending on a Reduction Date for the scheduled reduction to occur.
(e) An Interest Period for an Advance shall not extend beyond the Termination Date.
(f) Each Interest Period for an Advance shall start on the Utilisation Date.
(g) An Advance has one Interest Period only.
(h) No Interest Period shall be longer than six Months.
9.2 Changes to Interest Periods
(a) Before the commencement of an Interest Period for an Advance, the Lender may shorten the Interest Period for any Advance to ensure that, when aggregated with the Available Facility, there are sufficient Advances (with an aggregate amount equal to or greater than the Reduction Instalment) which have an Interest Period ending on a Reduction Date for the scheduled reduction to occur.
(b) If the Lender makes any change to an Interest Period referred to in this Clause 9.2 (Changes to Interest Periods), it shall promptly notify the Borrowers.
9.3 Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
10 Changes to the Calculation of Interest
10.1 Unavailability of Term SOFR
(a) Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
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(b) Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.
(c) Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Term Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(d) Cost of funds: If paragraph (c) above applies but no Interpolated Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.
10.2 Market disruption
If before close of business in Athens on the Quotation Day for the relevant Interest Period, the Lender notifies the Borrowers that its cost of funds relating to the Loan or the relevant part of the Loan would be in excess of the applicable Market Disruption Rate then Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
10.3 Cost of funds
(a) If this Clause 10.3 (Cost of funds) applies to the Loan or part of the Loan for an Interest Period, Clause 8.1 (Calculation of interest) shall not apply to the Loan or that part of the Loan for that Interest Period and the rate of interest on the Loan or that part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i) the Margin; and
(ii) the rate notified to the Borrowers by the Lender as soon as practicable and in any event before the date on which interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the cost to the Lender of funding the Loan or that part of the Loan.
(b) If this Clause 10.3 (Cost of funds) applies and the Lender or the Borrowers so require, the Lender and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
(c) Subject to Clause 38.1 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (a) above shall be binding on all Parties.
(d) If this Clause 10.3 (Cost of funds) applies, the Lender shall, as soon as practicable, notify the Borrowers.
10.4 Break Costs
The Borrowers shall pay to the Lender its Break Costs (if any) attributable to all or any part of the Loan or Unpaid Sum being paid by a Borrower on a day prior to the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
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11 Fees
11.1 Commitment fee
The Borrowers shall pay to the Lender a commitment fee in the amount and at the times agreed in a Fee Letter.
11.2 Arrangement fee
The Borrowers shall pay to the Lender an arrangement fee in the amount and at the times agreed in a Fee Letter.
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Section 6
Additional Payment Obligations
12 Tax Gross Up and Indemnities
12.1 Definitions
(a) In this Agreement:
"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.
"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
"Tax Payment" means either the increase in a payment made by a Borrower to the Lender under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).
Unless a contrary indication appears, in this Clause 12 (Tax Gross Up and Indemnities) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
12.2 Tax gross-up
(a) Each Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b) The Borrowers shall promptly upon becoming aware that a Borrower must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly. Similarly, the Lender shall notify the Borrowers and that Borrower on becoming so aware in respect of a payment payable to the Lender.
(c) If a Tax Deduction is required by law to be made by a Borrower, the amount of the payment due from that Borrower shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d) If a Borrower is required to make a Tax Deduction, that Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(e) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall deliver to the Lender evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
12.3 Tax indemnity
(a) The Borrowers shall (within three Business Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.
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(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on the Lender:
(A) under the law of the jurisdiction in which the Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Lender is treated as resident for tax purposes; or
(B) under the law of the jurisdiction in which the Lender's Facility Office is located in respect of amounts received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or
(B) relates to a FATCA Deduction required to be made by a Party.
(c) The Lender shall, if making, or intending to make, a claim under paragraph (a) above, promptly notify the Borrowers of the event which will give, or has given, rise to the claim.
12.4 Tax Credit
If a Borrower makes a Tax Payment and the Lender determines that:
(a) a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and
(b) the Lender has obtained and utilised that Tax Credit,
the Lender shall pay an amount to the Borrower which the Lender determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Borrower.
12.5 Stamp taxes
The Borrowers shall pay and, within three Business Days of demand, indemnify the Lender against any cost, loss or liability which the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
12.6 VAT
(a) All amounts expressed to be payable under a Finance Document by any Party to the Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, if VAT is or becomes chargeable on any supply made by the Lender to any Party under a Finance Document and the Lender is required to account to the relevant tax authority for the VAT, that Party must pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Lender must promptly provide an appropriate VAT invoice to that Party).
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(b) Where a Finance Document requires any Party to reimburse or indemnify the Lender for any cost or expense, that Party shall reimburse or indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
(c) Any reference in this Clause 12.6 (VAT) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union or equivalent provisions imposed elsewhere) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).
(d) In relation to any supply made by the Lender to any Party under a Finance Document, if reasonably requested by the Lender, that Party must promptly provide the Lender with details of that Party's VAT registration and such other information as is reasonably requested in connection with the Lender's VAT reporting requirements in relation to such supply.
12.7 FATCA Information
(a) Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
(i) confirm to that other Party whether it is:
(A) a FATCA Exempt Party; or
(B) not a FATCA Exempt Party; and
(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and
(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.
(b) If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(c) Paragraph (a) above shall not oblige the Lender to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any fiduciary duty; or
(iii) any duty of confidentiality.
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(d) If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
12.8 FATCA Deduction
(a) 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 Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(b) 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.
13 Increased Costs
13.1 Increased costs
(a) Subject to Clause 13.3 (Exceptions), the Borrowers shall, within three Business Days of a demand by the Lender, pay for the account of the Lender the amount of any Increased Costs incurred by the Lender or any of its Affiliates as a result of:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
(ii) compliance with any law or regulation made,
in each case after the date of this Agreement; or
(iii) the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.
(b) In this Agreement:
(i) "Basel III" means:
(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
(B) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
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(C) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
(ii) "CRD IV" means:
(A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012, as amended by, amongst others, Regulation (EU) 2019/876;
(B) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended by, amongst others, Directive (EU) 2019/878; and
(C) any other law or regulation which implements Basel III.
(iii) "Increased Costs" means:
(A) a reduction in the rate of return from the Facility or on the Lender's (or its Affiliate's) overall capital;
(B) an additional or increased cost; or
(C) a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by the Lender or any of its Affiliates to the extent that it is attributable to the Lender having entered into the Commitment or funding or performing its obligations under any Finance Document.
13.2 Increased cost claims
If the Lender intends to make a claim pursuant to Clause 13.1 (Increased costs) it shall promptly notify the Borrowers.
13.3 Exceptions
Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by a Borrower;
(b) attributable to a FATCA Deduction required to be made by a Party;
(c) compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied); or
(d) attributable to the wilful breach by the Lender or its Affiliates of any law or regulation.
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14 Other Indemnities
14.1 Currency indemnity
(a) If any sum due from a Borrower under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:
(i) making or filing a claim or proof against that Borrower; or
(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Borrower shall, as an independent obligation, on demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) Each Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
14.2 Other indemnities
(a) Each Borrower shall, on demand, indemnify the Lender and any Receiver and Delegate against:
(i) any cost, loss or liability incurred by it as a result of:
(A) the occurrence of any Event of Default;
(B) a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date;
(C) funding, or making arrangements to fund, an Advance requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender alone); or
(D) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers; or
(E) investigating any event which it reasonably believes is a Default; and
(ii) any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Lender (otherwise than by reason of the Lender's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 27.8 (Disruption to Payment Systems etc.) notwithstanding the Lender's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender in acting as Lender under the Finance Documents.
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(b) Each Borrower shall, on demand, indemnify the Lender, each Affiliate of the Lender and any Receiver and Delegate and each officer or employee of the Lender or its Affiliate or any Receiver or Delegate (as applicable) (each such person for the purposes of this Clause 14.2 (Other indemnities) an "Indemnified Person"), against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Ship unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
(c) No Party other than the Lender or the Receiver or Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Lender or the Receiver or Delegate (as applicable) in respect of any claim it might have against the Lender or the Receiver or Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property.
(d) Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
(i) arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
(ii) in connection with any Environmental Claim.
(e) Each Borrower shall, on demand, indemnify the Lender and every Receiver and Delegate against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them:
(i) in relation to or as a result of:
(A) any failure by a Borrower to comply with its obligations under Clause 15 (Costs and Expenses);
(B) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
(C) the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;
(D) the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by law;
(E) any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
(F) any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and
(G) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents;
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(ii) which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the Lender's or Receiver's or Delegate's gross negligence or wilful misconduct).
(f) Any Affiliate or Receiver or any officer or employee of the Lender, or of any of its Affiliates or any Receiver (as applicable) may rely on this Clause 14.2 (Other indemnities) and the provisions of the Third Parties Act, subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.
15 Costs and Expenses
15.1 Transaction expenses
The Borrowers shall, on demand, pay the Lender the amount of all costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation, printing, execution and perfection of:
(a) this Agreement and any other documents referred to in this Agreement or in a Security Document; and
(b) any other Finance Documents executed after the date of this Agreement.
15.2 Amendment costs
Subject to Clause 15.4 (Reference rate transition costs) if:
(a) a Transaction Obligor requests an amendment, waiver or consent;
(b) an amendment is required pursuant to Clause 27.6 (Change of currency); or
(c) a Transaction Obligor requests, and the Lender agrees to, the release of all or any part of the Security Assets from the Transaction Security,
the Borrowers shall, on demand, reimburse the Lender for the amount of all costs and expenses (including legal fees) incurred by the Lender in responding to, evaluating, negotiating or complying with that request or requirement.
15.3 Enforcement and preservation costs
The Borrowers shall, on demand, pay to the Lender the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against the Lender as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
15.4 Reference rate transition costs
The Borrowers shall on demand reimburse the Lender for the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with any amendment, waiver or consent relating to any change arising as a result of an amendment required under Clause 38.1 (Changes to reference rates).
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Section 7
Joint and Several Liability of Borrowers
16 Joint and Several Liability of the Borrowers
16.1 Joint and several liability
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.
16.2 Waiver of defences
The liabilities and obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
(b) the Lender entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
(c) the Lender releasing any other Borrower or any Security created by a Finance Document;
(d) any time, waiver or consent granted to, or composition with any other Borrower or other person;
(e) the release of any other Borrower or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(f) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any other Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(g) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any other Borrower or any other person;
(h) any amendment, novation, supplement, extension, restatement (however fundamental, and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(i) any unenforceability, illegality or invalidity of any obligation or any person under any Finance Document or any other document or security; or
(j) any insolvency or similar proceedings.
16.3 Principal Debtor
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall, in any circumstances, be construed to be a surety for the obligations of any other Borrower under this Agreement.
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16.4 Borrower restrictions
(a) Subject to paragraph (b) below, during the Security Period no Borrower shall:
(i) claim any amount which may be due to it from any other Borrower whether in respect of a payment made under, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document;
(ii) take or enforce any form of security from any other Borrower for such an amount, or in any way seek to have recourse in respect of such an amount against any asset of any other Borrower;
(iii) set off such an amount against any sum due from it to any other Borrower;
(iv) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower; or
(v) exercise or assert any combination of the foregoing.
(b) If during the Security Period, the Lender, by notice to a Borrower, requires it to take any action referred to in paragraph (a) above in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Lender's notice.
16.5 Deferral of Borrowers' rights
Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full and unless the Lender otherwise directs, no Borrower will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:
(a) to be indemnified by any other Borrower; or
(b) to claim any contribution from any other Borrower in relation to any payment made by it under the Finance Documents.
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Section 8
Representations, Undertakings and Events of Default
17 Representations
17.1 General
Each Borrower makes the representations and warranties set out in this Clause 17 (Representations) to the Lender on the date of this Agreement.
17.2 Status
(a) It is a limited liability corporation or, as the case may be, company, duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.
(b) It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.
17.3 Share capital and ownership
(a) Each of Borrower A, Borrower B, Borrower C, Borrower D, Borrower E, Borrower F and Borrower H is authorised to issue 500 registered and/or bearer shares without par value, all of which have been issued in registered form, fully paid and non-assessable.
(b) Each of Borrower G, Borrower J, Borrower K, Borrower L and Borrower M is authorised to issue 500 registered shares with a par value of one dollar per share, all of which have been issued in registered form, fully paid and non-assessable.
(c) Borrower I is authorised to issue 50,000 registered shares with a par value of one dollar per share, all of which have been issued in registered form, fully paid and non-assessable.
(d) The legal title to and beneficial interest in the shares in each Borrower is held indirectly by the Guarantor free of any Security or any other claim.
(e) None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
17.4 Binding obligations
The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.
17.5 Validity, effectiveness and ranking of Security
(a) Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery create the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.
(b) No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.
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(c) The Transaction Security granted by it to the Lender has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking Security.
(d) No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.
17.6 Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:
(a) any law or regulation applicable to it;
(b) the constitutional documents of any member of the Group; or
(c) any agreement or instrument binding upon it or any member of the Group or any member of the Group's assets or constitute a default or termination event (however described) under any such agreement or instrument.
17.7 Power and authority
(a) It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents.
(b) No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.
17.8 Validity and admissibility in evidence
All Authorisations required or desirable:
(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
(b) to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
have been obtained or effected and are in full force and effect.
17.9 Governing law and enforcement
(a) The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.
(b) Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.
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17.10 Insolvency
No:
(a) corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 24.8 (Insolvency proceedings); or
(b) creditors' process described in Clause 24.9 (Creditors' process),
has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 24.7 (Insolvency) applies to a member of the Group.
17.11 No filing or stamp taxes
Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents except permanent registration of the relevant Mortgage relating to each of Ship D, Ship E, Ship F, Ship G, Ship I, Ship J and Ship M at the registry of the Approved Flag of each of Ship D, Ship E, Ship F, Ship G, Ship I, Ship J and Ship M, which registration will be made promptly after the date of that Mortgage.
17.12 Deduction of Tax
It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.
17.13 No default
(a) No Event of Default and, on the date of this Agreement and on each Utilisation Date, no Default is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
(b) No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which might have a Material Adverse Effect.
17.14 No misleading information
(a) Any factual information provided by any member of the Group for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
(b) The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
(c) Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.
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17.15 Financial Statements
(a) The Original Financial Statements were prepared in accordance with GAAP consistently applied.
(b) The Original Financial Statements give a true and fair view of the Guarantor's consolidated financial condition as at the end of the relevant financial year and its results of operations during the relevant financial year.
(c) There has been no material adverse change in a Borrower's and the Guarantor's assets, business or consolidated financial condition since 31 March 2025.
(d) The Guarantor's most recent financial statements delivered pursuant to Clause 18.2 (Financial statements):
(i) have been prepared in accordance with Clause 18.3 (Requirements as to financial statements); and
(ii) give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of the relevant financial year and operations during the relevant financial year.
(e) Since the date of the most recent financial statements delivered pursuant to Clause 18.2 (Financial statements) there has been no material adverse change in the Group's business, assets or consolidated financial condition.
17.16 Pari passu ranking
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
17.17 No proceedings pending or threatened
(a) No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any other Transaction Obligor.
(b) No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any other Transaction Obligor.
17.18 Valuations
(a) All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Lender in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.
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(b) It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.
(c) There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
17.19 No breach of laws
It has not breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
17.20 No Charter
No Ship is subject to any Charter other than a Permitted Charter.
17.21 Compliance with Environmental Laws
All Environmental Laws relating to the ownership, operation and management of each Ship and the business of each Transaction Obligor (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
17.22 No Environmental Claim
No Environmental Claim has been made or threatened against any member of the Group or any Ship which might reasonably be expected to have a Material Adverse Effect.
17.23 No Environmental Incident
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred which might reasonably be expected to have a Material Adverse Effect.
17.24 ISM and ISPS Code compliance
All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, each Approved Manager and each Ship have been complied with.
17.25 Taxes paid
(a) It is not and no other member of the Group is materially overdue in the filing of any Tax returns and it is not (and no other member of the Group is) overdue in the payment of any amount in respect of Tax.
(b) No claims or investigations are being, or, to the best of its knowledge, are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.
17.26 Financial Indebtedness
No Borrower has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
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17.27 Overseas companies
No Borrower has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Lender sufficient details to enable an accurate search against it to be undertaken by the Lender at the Companies Registry.
17.28 Good title to assets
It has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
17.29 Ownership
(a) Each of Borrower is the sole legal and beneficial owner of its Ship, its Earnings and its Insurances.
(b) With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.
(c) The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of the Borrowers on creation or enforcement of the security conferred by the Security Documents.
17.30 Centre of main interests and establishments
For the purposes of The Council of the European Union Regulation No. 2015/848 on Insolvency Proceedings (recast) (the "Regulation"), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is not in the US or the United Kingdom and it has no "establishment" (as that term is used in Article 2(10) of the Regulation) in the US or the United Kingdom.
17.31 Place of business
No Borrower has a place of business in the US or the United Kingdom and its head office functions are carried out at the address stated in Part A of Schedule 1 (The Parties).
17.32 No employee or pension arrangements
No Borrower has any employees or any liabilities under any pension scheme.
17.33 Sanctions
(a) No Transaction Obligor, and none of its Subsidiaries and none of their respective directors, officers or employees or, to the best of the knowledge of each such Transaction Obligor, its agents:
(i) is a Prohibited Party or is otherwise owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Party;
(ii) owns or controls or is an Affiliate of a Prohibited Party; or
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(iii) has received notice of or is aware of any claim, action, suit, proceedings or investigation against it with respect to Sanctions.
(b) Each Transaction Obligor, its Subsidiaries and their respective directors, officers and employees and, to the best of the knowledge of each such Transaction Obligor its agents, are in compliance with Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in such Transaction Obligor being designated as a Prohibited Party.
(c) None of the Ships is a Sanctioned Ship.
(d) Each Transaction Obligor or its Subsidiaries shall procure that it will, to the extent permitted by law and promptly upon becoming aware of them, supply to the Lender details of any claim, action, suit, proceedings, or investigation against it with respect to Sanctions by the Sanctions Authorities.
17.34 US Tax Obligor
No Transaction Obligor is a US Tax Obligor.
17.35 Repetition
The Repeating Representations are deemed to be made by each Borrower by reference to the facts and circumstances then existing on the date of each Utilisation Request and the first day of each Interest Period and, in relation to paragraph (c) of Clause 17.15 (Financial Statements), on each Utilisation Date.
18 Information Undertakings
18.1 General
The undertakings in this Clause 18 (Information Undertakings) remain in force throughout the Security Period unless the Lender otherwise permits.
18.2 Financial statements
The Borrowers procure that the Guarantor shall supply to the Lender:
(a) as soon as they become available, but in any event within 180 days after the end of each of the Guarantor's financial years (ending 31 December), commencing with the financial year ended on 31 December 2025, the annual audited consolidated financial statements of the Group for that financial year; and
(b) as soon as the same become available, but in any event within 90 days after the end of each half year of each of the Guarantor's financial years (ending 30 June), commencing with the half year ending on 30 June 2025, the semi-annual unaudited consolidated financial statements of the Group for that half year.
18.3 Requirements as to financial statements
(a) Each set of financial statements delivered by the Guarantor pursuant to Clause 18.2 (Financial statements) shall be certified by an officer of the Guarantor as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the
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date as at which those financial statements were drawn up if these have not been filed with the US Securities and Exchange Commission.
(b) The Borrowers shall procure that each set of financial statements of the Group delivered pursuant to Clause 18.2 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for the Group unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods or such change is described in the filings made with the US Securities and Exchange Commission, and its auditors (or, if appropriate, the auditors of the Group) deliver to the Lender:
(i) a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Group's Original Financial Statements were prepared; and
(ii) sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to determine whether clause 9 (financial covenants) of the Guarantee has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Group's Original Financial Statements.
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
18.4 DAC6
(a) In this Clause 18.4 (DAC6), "DAC6" means the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU or any replacement legislation applicable in the United Kingdom.
(b) The Borrowers shall supply to the Lender:
(i) promptly upon the making of such analysis or the obtaining of such advice, any analysis made or advice obtained on whether any transaction contemplated by the Transaction Documents or any transaction carried out (or to be carried out) in connection with any transaction contemplated by the Transaction Documents contains a hallmark as set out in Annex IV of DAC6 or is required to be disclosed pursuant to The International Tax Enforcement (Disclosable Arrangements) Regulations 2023; and
(ii) promptly upon the making of such reporting and to the extent permitted by applicable law and regulation, any reporting made to any governmental or taxation authority by or on behalf of any member of the Group or by any adviser to such member of the Group in relation to DAC6 or any law or regulation which implements DAC6 or under The International Tax Enforcement (Disclosable Arrangements) Regulations 2023 and any unique identification number issued by any governmental or taxation authority to which any such report has been made (if available).
(c) The Lender does not provide, under the terms of this present service agreement, any kind of tax advice to the Borrowers or the Guarantor in relation to its cross-border transactions or tax advice on the use of the loan facility or any kind of advisory services in relation to DAC6 opinions or any suggestions, amendments or contributions to the relevant cross-border
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arrangement and is not involved under any circumstances in the tax planning of the Borrowers and/or the Guarantor.
18.5 Information: miscellaneous
Each Borrower shall, and shall procure that each other Transaction Obligor shall, supply to the Lender:
(a) all material documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched unless such documents have already been disclosed in the filings made with the US Securities and Exchange Commission;
(b) promptly upon becoming aware of them, the details of any material litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;
(c) promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Group and which might have a Material Adverse Effect or which would involve an uninsured liability, or a potential or alleged uninsured liability, exceeding $1,000,000 in relation to any Borrower or $15,000,000 in relation to any other member of the Group (or their equivalent in other currencies);
(d) promptly, its constitutional documents where these have been amended or varied;
(e) promptly, such further information and/or documents regarding:
(i) each Ship, goods transported on each Ship, its Earnings and its Insurances;
(ii) the Security Assets;
(iii) compliance of the Transaction Obligors with the terms of the Finance Documents;
(iv) the financial condition, business and operations of any member of the Group,
as the Lender may reasonably request; and
(f) promptly, such further information and/or documents as the Lender may reasonably request so as to enable the Lender to comply with any laws applicable to it or as may be required by any regulatory authority.
18.6 Notification of Default
(a) Each Borrower shall, and shall procure that each other Transaction Obligor shall, notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Borrower is aware that a notification has already been provided by another Borrower).
(b) Promptly upon a request by the Lender, each Borrower shall supply to the Lender a certificate signed by one of its officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
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18.7 "Know your customer" checks
If:
(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(b) any change in the status of a Transaction Obligor (including, without limitation, a change of ownership of a Transaction Obligor (other than an Approved Manager)) after the date of this Agreement; or
(c) a proposed assignment by the Lender of any of its rights and obligations under this Agreement,
obliges the Lender (or, in the case of paragraph (c) above, any prospective assignee) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective assignee) in order for the Lender or, in the case of the event described in paragraph (c) above, any prospective assignee to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
19 General Undertakings
19.1 General
The undertakings in this Clause 19 (General Undertakings) remain in force throughout the Security Period except as the Lender may otherwise permit.
19.2 Authorisations
Each Borrower shall, and shall procure that each other Transaction Obligor will, promptly:
(a) obtain, comply with and do all that is necessary to maintain in full force and effect;
(b) supply certified copies to the Lender of,
any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the Approved Flag at any time of each Ship to enable it to:
(i) perform its obligations under the Transaction Documents to which it is a party;
(ii) ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction or in the state of the Approved Flag at any time of each Ship of any Transaction Document to which it is a party;
(iii) own and operate each Ship (in the case of the Borrowers); and
(c) without prejudice to the generality of the above, ensure that if, but for the obtaining of an Authorisation, a Borrower would be in breach of any of the provisions of this Agreement which relate to Sanctions or, by reason of Sanctions, would be prohibited from performing any
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provision of this Agreement, such an Authorisation is obtained so as to avoid such breach or to enable such performance.
19.3 Compliance with laws
Each Borrower shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
19.4 Environmental compliance
Each Borrower shall, and shall procure that each other Transaction Obligor will:
(a) comply with all Environmental Laws;
(b) obtain, maintain and ensure compliance with all requisite Environmental Approvals;
(c) implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
19.5 Environmental Claims
Each Borrower shall, and shall procure that each other Transaction Obligor will, promptly upon becoming aware of the same, inform the Lender in writing of:
(a) any Environmental Claim against any member of the Group which is current, pending or threatened; and
(b) any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
19.6 Taxation
Each Borrower shall, and shall procure that each other Transaction Obligor will, pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
(a) such payment is being contested in good faith;
(b) adequate reserves are maintained for those Taxes and the costs required to contest them and both have been disclosed in its latest financial statements delivered to the Lender under Clause 18.2 (Financial statements); and
(c) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
19.7 Overseas companies
Each Borrower shall, and shall procure that each other Transaction Obligor will, promptly inform the Lender if it delivers to the Registrar particulars required under the Overseas
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Regulations of any UK Establishment and it shall comply with any directions given to it by the Lender regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.
19.8 No change to centre of main interests
No Borrower shall change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) to either jurisdiction referred to in Clause 17.30 (Centre of main interests and establishments) and it will create no "establishment" (as that term is used in Article 2(10) of the Regulation) in the US or the United Kingdom.
19.9 Pari passu ranking
Each Borrower shall, and shall procure that each other Transaction Obligor will, ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
19.10 Title
(a) Each Borrower shall hold the legal title to, and own the entire beneficial interest in its Ship, its Earnings and its Insurances.
(b) With effect on and from its creation or intended creation, each Borrower shall hold the legal title to, and own the entire beneficial interest in any other assets the subject of any Transaction Security created or intended to be created by such Borrower.
19.11 Negative pledge
(a) No Borrower shall, and the Borrowers shall procure that no other Transaction Obligor will, create or permit to subsist any Security over any of its assets which are, in the case of any Transaction Obligor other than the Borrowers, the subject of the Security created or intended to be created by the Finance Documents.
(b) No Borrower shall:
(i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Transaction Obligor or any other member of the Group;
(ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(iv) enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c) Paragraphs (a) and (b) above do not apply to any Permitted Security.
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19.12 Disposals
(a) No Borrower shall enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including without limitation any Ship in respect of which the Lender shall not unreasonably withhold its prior written consent, its Earnings or its Insurances).
(b) Paragraph (a) above does not apply to any Charter as all Charters are subject to Clause 21.17 (Restrictions on chartering, appointment of managers etc.).
19.13 Merger
No Borrower shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.
19.14 Change of business
(a) Each Borrower shall procure that no substantial change is made to the general nature of the business of the Guarantor or the Group from that carried on at the date of this Agreement.
(b) No Borrower shall engage in any business other than the ownership and operation of its Ship.
19.15 Financial Indebtedness
No Borrower shall incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
19.16 Expenditure
No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, maintaining and repairing its Ship.
19.17 Share capital
No Borrower shall:
(a) purchase, cancel, redeem or retire any of its issued shares; or
(b) increase or reduce its authorised share capital, the number of shares that it is authorized to issue or change the par value of such shares or create any new class of shares.
19.18 Dividends
No Borrower shall following the occurrence of an Event of Default which is continuing or where any of the following would result in the occurrence of an Event of Default:
(a) declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its issued shares (or any class of its issued shares);
(b) repay or distribute any dividend or share premium reserve; or
(c) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so.
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19.19 Other transactions
No Borrower shall:
(a) be the creditor in respect of any loan or any form of credit to any person other than another Transaction Obligor and where such loan or form of credit is Permitted Financial Indebtedness or is in the ordinary course of its business and in a manner acceptable to the Lender;
(b) give or allow to be outstanding any guarantee or indemnity in the ordinary course of its business in aggregate not more than $500,000 to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which that Transaction Obligor assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents;
(c) enter into any material agreement other than:
(i) the Transaction Documents;
(ii) any other agreement expressly allowed under any other term of this Agreement; and
(d) enter into any transaction on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length; or
(e) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks.
19.20 Unlawfulness, invalidity and ranking; Security imperilled
No Borrower shall, and the Borrowers shall procure that no other Transaction Obligor will, do (or fail to do) or cause another person to do (or omit to do) anything which is likely to:
(a) make it unlawful or contrary to Sanctions for a Transaction Obligor to perform any of its obligations under the Transaction Documents;
(b) cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid, binding or enforceable;
(c) cause any Transaction Document to cease to be in full force and effect;
(d) cause any Transaction Security to rank after, or lose its priority to, any other Security; and
(e) imperil or jeopardise the Transaction Security.
19.21 Sanctions undertakings
(a) No proceeds of the Loan or any part of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Party nor shall they be otherwise, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions, or to fund any activity in a Sanctioned Country or in any manner which would cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions.
(b) No Transaction Obligor shall fund all or any part of any payment or repayment under the Loan out of proceeds directly or indirectly derived from any activity in a Sanctioned Country or any transaction with a Prohibited Party, or out of proceeds directly or indirectly derived from any other transactions which would be prohibited by Sanctions or in any other manner which
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would cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions and no such proceeds shall be paid into any Account.
(c) Each of the Transaction Obligors has implemented and shall maintain in effect a Sanctions compliance policy which is designed to ensure compliance by each such Transaction Obligor, its Subsidiaries and their respective directors, officers, employees and agents with Sanctions. Without limitation on the foregoing, such Sanctions compliance policy shall procure that each Transaction Obligor, its Subsidiaries and their respective directors officers, employees and agents shall, where applicable:
(i) conduct their activities in a manner consistent with Sanctions; and
(ii) ensure Subsidiaries and Affiliates comply with the relevant policies, as applicable.
19.22 Further assurance
(a) Each Borrower shall, and shall procure that each other Transaction Obligor will, promptly, and in any event within the time period specified by the Lender do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Lender may specify (and in such form as the Lender may require in favour of the Lender or its nominee(s)):
(i) to create, perfect, vest in favour of the Lender or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Lender or any Receiver or Delegate provided by or pursuant to the Finance Documents or by law;
(ii) to confer on the Lender Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;
(iii) to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or
(iv) to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
(b) Each Borrower shall, and shall procure that each other Transaction Obligor will, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Lender by or pursuant to the Finance Documents.
(c) At the same time as a Borrower delivers to the Lender any document executed by itself or another Transaction Obligor pursuant to this Clause 19.22 (Further assurance), that Borrower shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Lender a certificate signed by an officer of that Borrower's or Transaction Obligor's officer which shall:
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(i) set out the text of a resolution of that Borrower's or Transaction Obligor's directors specifically authorising the execution of the document specified by the Lender; and
(ii) state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors or officers and is valid under that Borrower's or Transaction Obligor's articles of association, articles of incorporation, articles of formation, by-laws or other constitutional documents.
20 Insurance Undertakings
20.1 General
The undertakings in this Clause 20 (Insurance Undertakings) remain in force on and from the date of this Agreement and throughout the rest of the Security Period except as the Lender may otherwise permit.
20.2 Maintenance of obligatory insurances
Each Borrower shall keep the Ship owned by it insured at its expense against:
(a) fire and usual marine risks (including hull and machinery plus freight interest and hull interest and excess risks);
(b) war risks (including terrorism and piracy);
(c) protection and indemnity risks; and
(d) any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for that Borrower to insure and which are specified by the Lender by notice to that Borrower.
20.3 Terms of obligatory insurances
Each Borrower shall effect such insurances:
(a) in dollars;
(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:
(i) an amount at least equal to each Ship's Market Value; and
(ii) an amount which when aggregated to the equivalent insurance values of the other Ships subject to a Mortgage amounts to 120 per cent. of the Loan;
(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;
(d) on approved terms; and
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(e) through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
20.4 Further protections for the Lender
In addition to the terms set out in Clause 20.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances effected by it shall:
(a) subject always to paragraph (b), name that Borrower, the Guarantor or any Approved Manager as the named insured or co-assured unless the interest of every other named insured is limited:
(i) in respect of any obligatory insurances for hull and machinery and war risks;
(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and
(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;
and every other named insured has undertaken in writing to the Lender (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances and, if so required by the Lender, has duly executed and delivered a first priority assignments of its interest in the Ship's Insurances to the Lender in an approved form and provided such supporting documents and opinions in relation to that assignment as the Lender requires;
(b) whenever the Lender requires, name (or be amended to name) the Lender as additional named insured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
(c) name the Lender as loss payee with such directions for payment as the Lender may specify;
(d) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set off, counterclaim or deductions or condition whatsoever;
(e) provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and
(f) provide that the Lender may make proof of loss if that Borrower fails to do so.
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20.5 Renewal of obligatory insurances
Each Borrower shall:
(a) at least 21 days before the expiry of any obligatory insurance effected by it:
(i) notify the Lender of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which it proposes to renew that obligatory insurance and of the proposed terms of renewal; and
(ii) obtain the Lender's approval to the matters referred to in sub-paragraph (i) above;
(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender's approval pursuant to paragraph (a) above; and
(c) procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.
20.6 Copies of policies; letters of undertaking
Each Borrower shall ensure that the Approved Brokers provide the Lender with:
(a) pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and
(b) a letter or letters of undertaking in a form required by the Lender and including undertakings by the Approved Brokers that:
(i) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 20.4 (Further protections for the Lender);
(ii) they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with such loss payable clause;
(iii) they will advise the Lender immediately of any material change to the terms of the obligatory insurances;
(iv) they will, if they have not received notice of renewal instructions from the relevant Borrower or its agents, notify the Lender not less than 14 days before the expiry of the obligatory insurances;
(v) if they receive instructions to renew the obligatory insurances, they will promptly notify the Lender of the terms of the instructions;
(vi) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts;
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(vii) they will arrange for a separate policy to be issued in respect of the Ship owned by that Borrower forthwith upon being so requested by the Lender;
(viii) they will notify the Lender promptly if they cease to be the brokers through which the obligatory insurances are placed; and
(ix) they will notify the Lender if they receive any notices of cancellation from the underwriters in respect of the Insurances.
20.7 Copies of certificates of entry
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provide the Lender with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by the Lender; and
(c) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
20.8 Deposit of original policies
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the Approved Brokers through which the insurances are effected or renewed.
20.9 Payment of premiums
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Lender.
20.10 Guarantees
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
20.11 Compliance with terms of insurances
(a) No Borrower shall do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part.
(b) Without limiting paragraph (a) above and without prejudice to the Borrowers' obligations under Clause 20 (Ship Undertakings), each Borrower shall:
(i) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in sub-paragraph (iii) of paragraph (b) of Clause 20.6 (Copies of policies; letters of undertaking)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;
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(ii) not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless they are approved by the underwriters of the obligatory insurances;
(iii) make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
(iv) not employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
20.12 Alteration to terms of insurances
No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.
20.13 Settlement of claims
Each Borrower shall:
(a) not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and
(b) do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
20.14 Provision of copies of communications
Each Borrower shall provide the Lender, at the time of each such communication, with copies of all written communications between that Borrower and:
(a) the Approved Brokers;
(b) the approved protection and indemnity and/or war risks associations; and
(c) the approved insurance companies and/or underwriters,
which relate directly or indirectly to:
(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
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20.15 Provision of information
Each Borrower shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) requests for the purpose of:
(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 20.16 (Mortgagee's interest and additional perils insurances) or dealing with or considering any matters relating to any such insurances,
and the Borrowers shall, forthwith upon demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.
20.16 Mortgagee's interest and additional perils insurances
(a) The Lender shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance and a mortgagee's interest additional perils insurance in each case, in an amount which equals 110 per cent. of the Commitment at the time of calculation together with interest, expenses and any other amounts payable under the Finance Documents, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate.
(b) The Borrowers shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any insurance referred to in paragraph (a) above or dealing with, or considering, any matter arising out of any such insurance.
21 Ship Undertakings
21.1 General
The undertakings in this Clause 21 (Ship Undertakings) remain in force on and from the date of this Agreement and throughout the rest of the Security Period except as the Lender may otherwise permit.
21.2 Ships' names and registration
Each Borrower shall, in respect of the Ship owned by it:
(a) keep that Ship registered in its name under the Approved Flag from time to time at its port of registration;
(b) not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled;
(c) not enter into any dual flagging arrangement in respect of that Ship; and
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(d) not change the name of that Ship,
provided that any agreed change of name or flag of a Ship shall be subject to:
(i) that Ship remaining subject to Security securing the Secured Liabilities created by a first priority or preferred ship mortgage on that Ship and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority Security) on substantially the same terms as the Mortgage on that Ship and, if applicable, the related Deed of Covenant and on such other terms and in such other form as the Lender shall approve or require; and
(ii) the execution of such other documentation amending and supplementing the Finance Documents as the Lender shall approve or require, such approval not to be unreasonably withheld.
21.3 Repair and classification
Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:
(a) consistent with first class ship ownership and management practice; and
(b) so as to maintain the Approved Classification free of overdue recommendations and conditions affecting that Ship's class.
21.4 Classification society undertaking
Each Borrower shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society:
(a) to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;
(b) to allow the Lender (or its agents), at any time and from time to time, to inspect the original class and related records of that Borrower and that Ship at the offices of the Approved Classification Society and to take copies of them;
(c) to notify the Lender immediately in writing if the Approved Classification Society:
(i) receives notification from that Borrower or any person that that Ship's Approved Classification Society is to be changed; or
(ii) becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Borrower or that Ship's membership of the Approved Classification Society;
(d) following receipt of a written request from the Lender:
(i) to confirm that that Borrower is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
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(ii) to confirm that that Borrower is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Lender in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
21.5 Modifications
No Borrower shall make any modification or repairs to, or replacement of, any Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship, unless such alteration is an improvement and the Lender receives written notification, or materially reduce its value.
21.6 Removal and installation of parts
(a) Subject to paragraph (b) below, no Borrower shall remove any material part of any Ship, or any item of equipment installed on any Ship unless:
(i) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;
(ii) the replacement part or item is free from any Security in favour of any person other than the Lender; and
(iii) the replacement part or item becomes, on installation on that Ship, the property of that Borrower and subject to the security constituted by the Mortgage on that Ship and, if applicable, the related Deed of Covenant.
(b) A Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Borrower.
21.7 Surveys
Each Borrower shall submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender, with copies of all survey reports.
21.8 Inspection
(a) Each Borrower shall permit the Lender (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times, but without interfering the operation of that Ship, to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections, unless an Event of Default has occurred and is continuing in which case the Lender shall be entitled to carry out such inspection whether or not it interferes with the operation and trading of that Ship.
(b) The cost of the inspection referred to in paragraph (a) above shall be borne by the Borrowers once per annum, unless an Event of Default has occurred, in which case the cost of all inspections while the Event of Default is continuing shall be borne by the Borrowers.
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21.9 Prevention of and release from arrest
(a) Each Borrower shall, in respect of the Ship owned by it, promptly discharge:
(i) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;
(ii) all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and
(iii) all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.
(b) Each Borrower shall, immediately upon receiving notice of the arrest of the Ship owned by it or of its detention in exercise or purported exercise of any lien or claim, take all steps necessary to procure its release by providing bail or otherwise as the circumstances may require.
21.10 Compliance with laws etc.
Each Borrower shall:
(a) comply, or procure compliance with all laws or regulations:
(i) relating to its business generally; and
(ii) relating to the Ship owned by it, its ownership, employment, operation, management and registration,
including, but not limited to:
(A) the ISM Code;
(B) the ISPS Code;
(C) all Environmental Laws;
(D) all Sanctions; and
(E) the laws of the Approved Flag; and
(b) obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals.
21.11 ISPS Code
Without limiting paragraph (a) of Clause 21.10 (Compliance with laws etc.), each Borrower shall:
(a) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code;
(b) maintain an ISSC for that Ship; and
(c) notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
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21.12 Sanctions and Ship trading
Without limiting Clause 21.10 (Compliance with laws etc.), each Borrower shall procure:
(a) that the Ship owned by it shall not be used by or for the benefit of a Prohibited Party or in trading to or from a Sanctioned Country;
(b) that the Ship owned by it shall not otherwise be used in any manner contrary to Sanctions, or in a manner that creates a risk that a Transaction Obligor will become a Prohibited Party or in any manner which would cause the Lender to be in breach of or made subject to Sanctions, or at material risk of being in breach of or made subject to Sanctions;
(c) that the Ship owned by it shall not be used in trading in any manner that creates a material risk that such Ship will become a Sanctioned Ship;
(d) that the Ship owned by it shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances; and
(e) without prejudice to the above provisions of this Clause 21.12 (Sanctions and Ship trading), that each time charterparty in respect of the Ship owned by it shall contain, for the benefit of that Borrower, language which gives effect to the provisions of paragraph (a) of Clause 21.10 (Compliance with laws etc.) as regards Sanctions and paragraph (b) and (c) of this Clause 21.12 (Sanctions and Ship trading) and shall use all commercially reasonable endeavours to ensure such charterparty permits refusal of employment or voyage orders if such employment or compliance with such orders either results, or risks resulting in non-compliance with such provisions or breaches, or risks breaching (in the opinion of that Borrower) Sanctions.
21.13 Russian oil price cap
(a) Each Borrower undertakes that it will at all times comply, and require compliance by:
(i) all charterers and sub-charterers of the Ship owned by it; and
(ii) all parties with whom a Borrower, a charterer or a sub-charterer enters into a contract of carriage in respect of the Ship owned by it,
with the Russian Oil Price Cap Measures.
(b) Without prejudice to the generality of paragraph (a) above, each Borrower undertakes that it will prior to the Ship owned by it commencing loading (including any ship-to-ship or similar transfer) of Russian Oil Products obtain:
(i) price information demonstrating that the Russian Oil Products were purchased at or below the applicable price cap; or
(ii) a signed attestation from its applicable counterparty that:
(A) the Russian Oil Products were purchased at or below the applicable price cap; or
(B) the purchase of the Russian Oil Products was pursuant to a licence or an exception granted by the relevant authority in each applicable jurisdiction.
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(c) Without prejudice to the generality of paragraph (a) above, each Borrower shall promptly, and in any event no later than 28 days after the Ship owned by it commencing loading (including any ship-to-ship or similar transfer) of Russian Oil Products provide to the Lender:
(i) price information demonstrating that the Russian Oil Products were purchased at or below the applicable price cap; and/or
(ii) an attestation signed by an authorised signatory in such form as may be agreed by the Lender (acting reasonably) confirming that it has complied in all respects with the Russian Oil Price Cap Measures; and/or
(iii) Documentary evidence that the purchase of the Russian Oil Products was pursuant to a licence or an exception granted by the relevant authority in each applicable jurisdiction.
(d) Without prejudice to the generality of paragraph (a) above, each Borrower undertakes to the lender in respect of the Ship owned by it that it will not carry Russian Oil Products unless the relevant charterparty includes for the benefit of that Borrower provisions requiring the charterer (i) to comply with the Russian Oil Price Cap Measures and to provide such information and documentation at such times as is necessary for that Borrower to comply with this Clause 21.13 (Russian oil price cap) and (ii) to procure that such provisions are incorporated into all sub-charters and any bills of lading, waybills or other documents evidencing contracts of carriage issued pursuant to the charterparty.
(e) Each Borrower undertakes that it will:
(i) provide the Lender with such information, and at such times, as it may require for the purposes of the Lender satisfying any record keeping obligations applicable to it under the Russian Oil Price Cap Measures;
(ii) within 30 days of any request provide the Lender with such other information in relation to compliance with the Russian Oil Price Cap Measures as the Lender may from time to time reasonably request including without limitation any information relating to ancillary costs as may be specified from time to time pursuant to the Russian Oil Price Cap Measures; and
(iii) comply with such further or additional requirements as the Lender may from time to time require in writing, acting reasonably, in response to changes to any of the Russian Oil Price Cap Measures, or the introduction of similar measures relating to Russian Oil Products, or changes to any guidance, application, interpretation or market practice in respect of the Russian Oil Price Cap Measures.
The obligations in this paragraph (d) are continuing and, in particular, shall survive and remain binding on each Borrower until all attestations and such other information as may be requested pursuant to this paragraph (e) have been received in satisfactory form by the Lender.
(f) Each Borrower shall undertake appropriate due diligence on its counterparties to satisfy itself, based on the information available, of the reliability and accuracy of any information provided by such counterparties for the purposes of or relating to satisfying the requirements of paragraph (b) above.
(g) Each Borrower agrees that the Lender may forward all attestations and other documents which that Borrower may from time to time deliver to the Lender pursuant to paragraphs (c) and (e)
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above to any applicable regulators or to any other party to which the Lender may be required to forward or disclose such attestations or other documents in accordance with the Russian Oil Price Cap Measures.
21.14 Trading in war zones or excluded areas
No Borrower shall cause or permit any Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers or which is otherwise excluded from the scope of coverage of the obligatory insurances unless:
(a) the prior written consent of that Ship's war risk insurers has been given; or
(b) that Borrower has (at its expense) effected any special, additional or modified insurance cover which the insurers require to ensure that that Ship remains properly insured in accordance with the Finance Documents (including, without limitation, any requirement for the payment of additional or extra insurance premia).
21.15 Provision of information
Without prejudice to sub-paragraph (i) of paragraph (e) of Clause 18.5 (Information: miscellaneous) each Borrower shall, in respect of the Ship owned by it, promptly provide the Lender with any information which it requests regarding:
(a) that Ship, its employment, position and engagements;
(b) the Earnings and payments and amounts due to its master and crew;
(c) any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made by it in respect of that Ship;
(d) any towages and salvages; and
(e) its compliance, the Approved Manager's compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
and, upon the Lender's request, promptly provide copies of any current Charter relating to that Ship, of any current guarantee of any such Charter, the Ship's Safety Management Certificate and any relevant Document of Compliance.
21.16 Notification of certain events
Each Borrower shall, in respect of the Ship owned by it, immediately notify the Lender by fax, confirmed forthwith by letter, of:
(a) any casualty to that Ship which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which that Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
(c) any requisition of that Ship for hire;
(d) any requirement or recommendation made in relation to that Ship by any insurer or classification society or by any competent authority which is not complied with by its due date;
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(e) any arrest or detention of that Ship or any exercise or purported exercise of any lien on that Ship or the Earnings;
(f) any extraordinary dry docking (other than scheduled dry docking) of that Ship;
(g) any Environmental Claim made against that Borrower or in connection with that Ship, or any Environmental Incident which might reasonably be expected to have a Material Adverse Effect;
(h) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with that Ship;
(i) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
(j) any notice, or such Borrower becoming aware, of any claim, action, suit, proceeding or investigation against any Transaction Obligor, any of its Subsidiaries or any of their respective directors, officers, employees or agents with respect to Sanctions; or
(k) any circumstances which could give rise to a breach of any representation or undertaking in this Agreement, or any Event of Default, relating to Sanctions,
and each Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require as to that Borrower's, any such Approved Manager's or any other person's response to any of those events or matters.
21.17 Restrictions on chartering, appointment of managers etc.
No Borrower shall, in relation to the Ship owned by it:
(a) let that Ship on demise charter for any period;
(b) enter into any time, voyage or consecutive voyage charter in respect of that Ship other than a Permitted Charter;
(c) amend and/or supplement a Management Agreement in a way that would lead to an Event of Default or terminate a Management Agreement;
(d) appoint a manager of that Ship other than an Approved Manager;
(e) de activate or lay up that Ship; or
(f) put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
21.18 Notice of Mortgage
Each Borrower shall keep the relevant Mortgage registered against the Ship owned by it as a valid first preferred or, as the case may be, priority mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Lender.
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21.19 Sharing of Earnings
No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings other than any profit-sharing arrangements on arm's length terms.
21.20 Inventory of Hazardous Materials
Each Borrower shall maintain an Inventory of Hazardous Materials in respect of the Ship owned by it.
21.21 Charter assignment
Without prejudice to application of paragraph (b) of Clause 21.17 (Restrictions on chartering, appointment of managers etc.), each Borrower will procure that the Lender is provided with:
(a) a copy of any Charter which exceeds or is capable of exceeding 12 months in duration, together with any Charter Guarantee, upon the same being entered into and the relevant Borrower shall forthwith enter into a Charter Assignment in respect of such Charter and any Charter Guarantee and shall use commercially reasonable efforts to procure its acknowledgement by the relevant charterer and any charter guarantor in accordance with the terms of such Charter Assignment; or
(b) a copy of any Charter which is a bareboat charter, upon the same being entered into and the relevant Borrower shall forthwith enter into a Charter Assignment and shall use commercially reasonable efforts to procure its acknowledgement by the relevant charterer in accordance with the terms of such Charter Assignment or, as the case may be, a tripartite assignment in respect of such Charter, including an assignment and subordination of the bareboat charterer's rights, title and interest in and to the Insurances in respect of the relevant Ship.
21.22 Notification of compliance
Each Borrower shall promptly provide the Lender from time to time with evidence (in such form as the Lender requires) that it is complying with this Clause 21 (Ship Undertakings).
22 Security Cover
22.1 Minimum required security cover
Clause 22.2 (Provision of additional security; prepayment) applies if the Lender notifies the Borrowers that:
(a) the aggregate Market Value of each Ship then subject to a Mortgage; plus
(b) the net realisable value of additional Security previously provided under this Clause 22 (Security Cover),
is below 130 per cent. of the Loan.
22.2 Provision of additional security; prepayment
(a) If the Lender serves a notice on the Borrowers under Clause 22.1 (Minimum required security cover), the Borrowers shall, on or before the date falling one Month after the date on which the Lender's notice is served (the "Prepayment Date"), prepay such part of the Loan as shall eliminate the shortfall.
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(b) A Borrower may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that a third party has provided, additional security which, in the opinion of the Lender:
(i) has a net realisable value at least equal to the shortfall; and
(ii) is documented in such terms as the Lender may approve or require,
before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.
22.3 Value of additional vessel security
The net realisable value of any additional security which is provided under Clause 22.2 (Provision of additional security; prepayment) which constitutes a first preferred or first priority mortgage over a vessel shall be the Market Value of the vessel concerned.
22.4 Valuations binding
Any valuation under this Clause 22 (Security Cover) shall be binding and conclusive as regards each Borrower.
22.5 Provision of information
(a) Each Borrower shall promptly provide the Lender and any shipbroker acting under this Clause 22 (Security Cover) with any information which the Lender or the shipbroker may request for the purposes of the valuation.
(b) If a Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Lender considers prudent.
22.6 Prepayment mechanism
Any prepayment pursuant to Clause 22.2 (Provision of additional security; prepayment) shall be made in accordance with the relevant provisions of Clause 7 (Prepayment and Cancellation) and shall reduce the Commitment by an amount equal to such prepayment.
22.7 Provision of valuations
(a) The Market Value of any Ship shall be determined by reference to two valuations of that Ship as given by Approved Valuers selected and appointed by the Borrowers and/or the Guarantor and addressed to, the Lender or in the event that the Borrowers fail to do so appointed by the Lender and such Market Value shall be the arithmetic average of the two valuations.
(b) If the two valuations in respect of a Ship obtained pursuant to paragraph (a) above differ by more than 15 per cent., then a third valuation for that Ship shall be obtained from a third Approved Valuer selected and appointed by the Lender and such valuation shall be addressed to the Lender and the Market Value of that Ship shall be the arithmetic average of all three such valuations.
(c) The Lender shall be entitled, before each Utilisation Date, to test the security cover requirement under Clause 22.1 (Minimum required security cover) by reference to the Market Value of any Ship as determined in accordance with paragraphs (a) to (b) above, annually
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during the Security Period, commencing on 31 December 2025, and from time to time as the Lender may reasonably request.
(d) Each of the valuations referred to in paragraphs (a) to (c) above shall be provided not more than 30 days (or such other longer period as the Lender may accept in its sole discretion) before the relevant Utilisation Date and 15 days before the financial statements of the Group are delivered pursuant to Clause 18.2(a) (Financial statements).
(e) The Lender may at any time after an Event of Default has occurred and is continuing obtain valuations of any Ship and any other vessel over which additional security has been created in accordance with Clause 22.2 (Provision of additional security; prepayment) from Approved Valuers to enable the Lender to determine the Market Value of that Ship and any other vessel and also for the purpose of testing the security cover requirement under Clause 22.1 (Minimum required security cover).
(f) The valuations referred to in paragraphs (a) to (c) above shall be obtained at the cost and expense of the Borrowers and the Borrowers shall within three Business Days of demand by the Lender pay to the Lender all costs and expenses incurred by it in obtaining any such valuation, unless an Event of Default has occurred or the covenant contained in Clause 22.1 (Minimum required security cover) is not complied with, in which case the cost of all valuations shall be borne by the Borrowers.
22.8 Release of additional security
If at any time the Lender holds additional security provided under this Clause 22 (Security Cover) for a consecutive period of no less than 90 days, the Borrowers may request, at their own cost and expense, the release of such additional security provided that:
(a) the Borrowers can demonstrate to the Lender's satisfaction that the minimum required security cover, without taking into account the value of that additional security, is at least equal to the security cover requirement under Clause 22.1 (Minimum required security cover); and
(b) no Event of Default has occurred and is continuing or would result from the release of such additional security.
23 Accounts and Application of Earnings
23.1 Accounts
No Borrower may, without the prior consent of the Lender, maintain any bank account other than:
(a) its Earnings Account; and
(b) in relation to each of Borrower A, Borrower B, Borrower C, Borrower D, Borrower E, Borrower F, Borrower G, Borrower K, Borrower L and Borrower M, the Permitted Earnings Accounts which Borrower A, Borrower B, Borrower C, Borrower D, Borrower E, Borrower F, Borrower G, Borrower K, Borrower L and Borrower M shall procure will be closed within 30 days from the first Utilisation Date.
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23.2 Payment of Earnings
Each Borrower shall ensure that subject only to the provisions of the General Assignment to which it is a party, all the Earnings in respect of the Ship owned by it are paid in to its Earnings Account.
23.3 Location of Accounts
Each Borrower shall promptly:
(a) comply with any requirement of the Lender as to the location or relocation of its Earnings Account; and
(b) execute any documents which the Lender specifies to create or maintain in favour of the Lender Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts.
23.4 Restriction on withdrawal
During the Security Period, a Borrower may withdraw any sum from its Earnings Account, provided that no Event of Default has occurred and is continuing or would occur from such withdrawal.
23.5 Minimum Liquidity
The Borrowers or the Guarantor shall maintain in any non-pledged account of the Borrowers or the Guarantor held with the Account Bank, on and from the first Utilisation Date and at all times thereafter during the Security Period, a credit balance of not less than $250,000 for each Ship subject to a Mortgage (the "Minimum Liquidity").
24 Events of Default
24.1 General
Each of the events or circumstances set out in this Clause 24 (Events of Default) is an Event of Default except for Clause 24.22 (Acceleration) and Clause 24.23 (Enforcement of security).
24.2 Non-payment
A Transaction Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
(a) its failure to pay is caused by:
(i) administrative or technical error; or
(ii) a Disruption Event; and
(b) payment is made within three Business Days of its due date.
24.3 Specific obligations
A breach occurs of Clause 4.4 (Waiver of conditions precedent), clause 10 (financial covenants) of the Guarantee, Clause 19.10 (Title), Clause 19.11 (Negative pledge), Clause 19.20 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 20 (Insurance Undertakings),
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Clause 21.12 (Sanctions and Ship trading), Clause 21.13 (Russian oil price cap) or, save to the extent such breach is a failure to pay and therefore subject to Clause 24.2 (Non-payment), Clause 22 (Security Cover).
24.4 Other obligations
(a) A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 24.2 (Non-payment) and Clause 24.3 (Specific obligations)).
(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 15 calendar days of the Lender giving notice to the Borrowers or (if earlier) any Transaction Obligor becoming aware of the failure to comply.
24.5 Misrepresentation
Any representation or statement made or deemed to be made by a Transaction Obligor in the Finance Documents or any other document delivered by or on behalf of any Transaction Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
24.6 Cross default
(a) Any Financial Indebtedness of any Transaction Obligor (other than an Approved Manager) is not paid when due nor within any originally applicable grace period.
(b) Any Financial Indebtedness of any Transaction Obligor (other than an Approved Manager) is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c) Any creditor of any Transaction Obligor (other than an Approved Manager) becomes entitled to declare any Financial Indebtedness of any Transaction Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
(d) No Event of Default will occur under this Clause 24.6 (Cross default) in respect of the Guarantor if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (c) above is less than $20,000,000 (or its equivalent in any other currency) and relates to any Financial Indebtedness of the Borrowers and/or the Guarantor and/or any Subsidiaries of the Guarantor with any creditor other than the Lender.
24.7 Insolvency
(a) A Transaction Obligor (other than an Approved Manager):
(i) is unable or admits inability to pay its debts as they fall due; or
(ii) is deemed to, or is declared to, be unable to pay its debts under applicable law.
(b) A moratorium is declared in respect of any indebtedness of any Transaction Obligor (other than an Approved Manager). If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
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24.8 Insolvency proceedings
(a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Transaction Obligor (other than an Approved Manager);
(ii) a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor (other than an Approved Manager);
(iii) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor (other than an Approved Manager) or any of its assets; or
(iv) enforcement of any Security over any assets of any Transaction Obligor (other than an Approved Manager),
or any analogous procedure or step is taken in any jurisdiction.
(b) Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement.
24.9 Creditors' process
Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of a Transaction Obligor (other than an Approved Manager) having an aggregate value of $5,000,000 (other than an arrest or detention of a Ship referred to in Clause 24.15 (Arrest)) and is not discharged within 14 days.
24.10 Ownership of the Borrowers
A Borrower is not or ceases to be a 100% indirectly owned Subsidiary of the Guarantor.
24.11 Change of control
(a) A Change of Control occurs.
(b) In this Clause 24.11 (Change of control):
"Change of Control" means a change which results in:
(a) the Designated Unitholder ceases to be the ultimate beneficial owner(s) of, or to have ultimate control of, the voting rights attaching to more than five per cent. of all the units (including for the avoidance of doubt both general partner units and common units) in the Guarantor; or
(b) the Designated Unitholder ceases to be the owner of, or to have ultimate control of, the voting rights attaching to all the issued shares in the general partner of the Guarantor, which is currently Olympos Maritime Ltd; or
(c) Mrs. Angeliki Frangou ceases to act as chairwoman or chief executive officer of the Guarantor and/or Olympos Maritime Ltd ceases to be the general partner of the Guarantor; or
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(d) any person or group of persons (other than the Designated Unitholder) acting in concert, becomes the holder, directly or indirectly, of 50 per cent. or more of the beneficially issued units of the Guarantor entitled to vote for members of the board of directors or equivalent governing body of the Guarantor on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right).
For the purpose of paragraph (d) above "acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate, through the acquisition, directly or indirectly, of units in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate the holding of beneficially owned units of the Guarantor.
24.12 Unlawfulness, invalidity and ranking
(a) It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.
(b) Any obligation of a Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable if that cessation individually or together with any other cessations materially or adversely affects the interests of the Lender under the Finance Documents.
(c) Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than the Lender) to be ineffective.
(d) Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.
24.13 Security imperilled
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
24.14 Cessation of business
Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
24.15 Arrest
Any arrest of a Ship or its detention in the exercise or the purported exercise of any lien or claim unless it is redelivered to the full control of the relevant Borrower within 30 days of such arrest or detention.
24.16 Expropriation
The authority or ability of any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets other than:
(a) an arrest or detention of a Ship referred to in Clause 24.15 (Arrest); or
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(b) any Requisition.
24.17 Repudiation and rescission of agreements
A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security or a Finance Document or any of the Transaction Security otherwise ceases to remain in full force and effect for any reason.
24.18 Litigation
Any litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency are started or threatened, or any judgment or order of a court, arbitral body or agency is made, in relation to any of the Finance Documents or the transactions contemplated in any of the Finance Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.
24.19 Sanctions
(a) Any Transaction Obligor or any of their respective Subsidiaries, directors, officers, employees or agents is designated a Prohibited Party or a Ship is designated a Sanctioned Ship.
(b) This Clause 24.19 (Sanctions) is without prejudice to any other Event of Default which may occur by reason of breach of, or non-compliance with, any of the other provisions of this Agreement which relate to Sanctions.
24.20 Material adverse change
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
24.21 Involvement in business
The Designated Unitholder ceases, for any reason, to be, directly or indirectly, involved in the management of the Ships (unless approved by the Lender in its sole discretion) and/or the Guarantor.
24.22 Acceleration
On and at any time after the occurrence of an Event of Default which is continuing the Lender may by notice to the Borrowers:
(a) cancel the Commitment, whereupon it shall immediately be cancelled and the Facility shall immediately cease to be available for further utilisation; and/or
(b) declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon it shall become immediately due and payable; and/or
(c) declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Lender,
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and the Lender may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Lender may take any action referred to in Clause 24.23 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
24.23 Enforcement of security
On and at any time after the occurrence of an Event of Default which is continuing the Lender may take any action which, as a result of the Event of Default or any notice served under Clause 24.22 (Acceleration), the Lender is entitled to take under any Finance Document or any applicable law or regulation.
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Section 9
Changes to The Parties
25 Changes to the Lender
25.1 Assignment by the Lender
Subject to this Clause 25 (Changes to the Lender), the Lender (the "Existing Lender") may assign all or part of its rights under the Finance Documents to another bank or financial institution or to a 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 (the "New Lender").
25.2 Conditions of assignment
(a) The consent of the Borrowers is required for an assignment by the Existing Lender, unless the assignment is:
(i) to an Affiliate of the Existing Lender;
(ii) if the Existing Lender is a fund, to a fund which is a Related Fund; or
(iii) made at a time when an Event of Default is continuing.
(b) The consent of the Borrowers to an assignment must not be unreasonably withheld. Each Borrower will be deemed to have given its consent 15 Business Days after the Existing Lender has requested it unless consent is expressly refused by that Borrower within that time.
(c) If:
(i) the Existing Lender assigns any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing at the date the assignment or change occurs, a Transaction Obligor would be obliged to make a payment to the New Lender or the Existing Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or under that Clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),
then the New Lender or the Existing Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment or change had not occurred.
(d) Each Borrower on behalf of itself and each Transaction Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which any Borrower or any other Transaction Obligor had against the Existing Lender.
25.3 Security over Lender's rights
In addition to the other rights provided to the Lender under this Clause 25 (Changes to the Lender), the Lender may without consulting with or obtaining consent from any Transaction
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Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of the Lender including, without limitation:
(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
(b) if the Lender is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by the Lender as security for those obligations or securities,
except that no such charge, assignment or Security shall:
(i) release the Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
(ii) require any payments to be made by a Transaction Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the Lender under the Finance Documents.
26 Changes to the Transaction Obligors
No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
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Section 10
Administration
27 Payment Mechanics
27.1 Payments to the Lender
(a) On each date on which a Transaction Obligor is required to make a payment under a Finance Document, that Transaction Obligor shall make an amount equal to such payment available to the Lender (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
(b) Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the Lender) and with such bank as the Lender, in each case, specifies.
27.2 Application of receipts; partial payments
(a) If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Lender may apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in any manner it may decide.
(b) Paragraph (a) above will override any appropriation made by a Transaction Obligor.
27.3 No set-off by Transaction Obligors
All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
27.4 Business Days
(a) Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
27.5 Currency of account
(a) Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.
(b) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
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27.6 Change of currency
(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Lender (after consultation with the Borrowers); and
(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Lender (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Lender (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.
27.7 Currency conversion
The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
27.8 Disruption to Payment Systems etc.
If either the Lender determines (in its discretion) that a Disruption Event has occurred or the Lender is notified by a Borrower that a Disruption Event has occurred:
(a) the Lender may, and shall if requested to do so by a Borrower, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Lender may deem necessary in the circumstances;
(b) the Lender shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(c) any such changes agreed upon by the Lender and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents;
(d) the Lender shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 27.8 (Disruption to Payment Systems etc.).
28 Set-Off
The Lender may set off any matured obligation due from a Transaction Obligor under the Finance Documents (to the extent beneficially owned by the Lender) against any matured obligation owed by the Lender to that Transaction Obligor, regardless of the place of payment,
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booking branch or currency of either obligation. If the obligations are in different currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
29 Conduct of Business by the Lender
No provision of this Agreement will:
(a) interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(c) oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
30 Bail-In
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a) any Bail-In Action in relation to any such liability, including (without limitation):
(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
(iii) a cancellation of any such liability; and
(b) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
31 Notices
31.1 Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
31.2 Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:
(a) in the case of the Borrowers, that specified in Schedule 1 (The Parties); and
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(b) in the case of any other Borrower or the Lender, that specified in Schedule 1 (The Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Lender on or before the date on which it becomes a Party;
or any substitute address, fax number or department or officer as a Borrower may notify to the Lender (or the Lender may notify to the other Parties, if a change is made by the Lender) by not less than five Business Days' notice.
31.3 Delivery
(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
(i) if by way of fax, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its address details provided under Clause 31.2 (Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to the Lender will be effective only when actually received by it and then only if it is expressly marked for the attention of the department or officer of the Lender specified in Schedule 1 (The Parties) (or any substitute department or officer as the Lender shall specify for this purpose).
(c) Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.
(d) Any communication or document which becomes effective, in accordance with paragraphs (a) to (c) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
31.4 Electronic communication
(a) Any communication to be made or document to be delivered by one Party to another under or in connection with the Finance Documents may be made or delivered by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
(ii) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.
(b) Any such electronic communication or delivery as specified in paragraph (a) above to be made between a Borrower and the Lender may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication or delivery.
(c) Any such electronic communication or document as specified in paragraph (a) above made or delivered by one Party to another will be effective only when actually received (or made
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available) in readable form and in the case of any electronic communication or document made or delivered by a Party to the Lender only if it is addressed in such a manner as the Lender shall specify for this purpose.
(d) Any electronic communication or document which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication or document is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(e) Any reference in a Finance Document to a communication being sent or received or a document being delivered shall be construed to include that communication or document being made available in accordance with this Clause 31.4 (Electronic communication).
31.5 English language
(a) Any notice given under or in connection with any Finance Document must be in English.
(b) All other documents provided under or in connection with any Finance Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Lender, accompanied by a certified English translation prepared by a translator approved by the Lender and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
32 Calculations and Certificates
32.1 Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Lender are prima facie evidence of the matters to which they relate.
32.2 Certificates and determinations
Any certification or determination by the Lender of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
32.3 Day count convention and interest calculation
(a) Any interest, commission or fee accruing under a Finance Document will accrue from day to day and the amount of any such interest, commission or fee is calculated:
(i) on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice; and
(ii) subject to paragraph (b) below, without rounding.
(b) The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by a Borrower under a Finance Document shall be rounded to 2 decimal places.
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33 Partial Invalidity
If, at any time, any provision of a Finance Document 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 under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
34 Remedies and Waivers
(a) No failure to exercise, nor any delay in exercising, on the part of the Lender or any Receiver or Delegate, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of the Lender or any Receiver or Delegate shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
(b) No variation or amendment of a Finance Document shall be valid unless in writing and signed by the Lender.
35 Entire Agreement
(a) This Agreement, in conjunction with the other Finance Documents, constitutes the entire agreement between the Parties and supersedes all previous agreements, understandings and arrangements between them, whether in writing or oral, in respect of its subject matter.
(b) Each Borrower acknowledges that it has not entered into this Agreement or any other Finance Document in reliance on, and shall have no remedies in respect of, any representation or warranty that is not expressly set out in this Agreement or in any other Finance Document.
36 Settlement or Discharge Conditional
Any settlement or discharge under any Finance Document between the Lender and any Transaction Obligor shall be conditional upon no security or payment to the Lender by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
37 Irrevocable Payment
If the Lender considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to the Lender under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.
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38 Amendments
38.1 Changes to reference rates
(a) If a Published Rate Replacement Event has occurred in relation to a Published Rate, any amendment or waiver which relates to:
(i) providing for the use of a Replacement Reference Rate in place of that Published Rate; and
(ii)
(A) aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
(B) enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
(C) implementing market conventions applicable to that Replacement Reference Rate;
(D) providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
(E) adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
may be made with the consent of the Lender and the Borrowers.
(b) In this Clause 38.1 (Changes to reference rates):
"Published Rate" means:
(a) the RFR; or
(b) Term SOFR for any Quoted Tenor.
"Published Rate Contingency Period" means, in relation to:
(a) in relation to Term SOFR (all Quoted Tenors), ten RFR Banking Days; and
(b) in relation to RFR, ten RFR Banking Days.
"Published Rate Replacement Event" means, in relation to a Published Rate:
(a) the methodology, formula or other means of determining that Published Rate has, in the opinion of the Lender, and the Borrowers materially changed;
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(b)
(i)
(A) the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or
(B) information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;
(ii) the administrator of that Published Rate publicly announces that it has ceased or will cease, to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;
(iii) the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or
(iv) the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
(c) the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
(i) the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender and the Borrowers) temporary; or
(ii) that Published Rate is calculated in accordance with any such policy or arrangement for a period which is no less than the applicable Published Rate Contingency Period; or
(d) in the opinion of the Lender and the Borrowers, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
"Quoted Tenor" means any period for which Term SOFR is customarily displayed on the relevant page or screen of an information service.
"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
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"Replacement Reference Rate" means a reference rate which is:
(a) formally designated, nominated or recommended as the replacement for a Published Rate by:
(i) the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or
(ii) any Relevant Nominating Body,
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Reference Rate" will be the replacement under sub-paragraph (ii) above;
(b) in the opinion of the Lender and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
(c) in the opinion of the Lender and the Borrowers, an appropriate successor or alternative to a Published Rate.
38.2 Borrower Intent
Without prejudice to the generality of Clauses 1.2 (Construction) and 16.2 (Waiver of defences), each Borrower expressly confirms that it intends that any guarantee contained in any Finance Document and any Security created by any Finance Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
39 Confidential Information
39.1 Confidentiality
The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 39.2 (Disclosure of Confidential Information) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
39.2 Disclosure of Confidential Information
The Lender may disclose:
(a) to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, insurers, insurance advisors, insurance brokers, partners and Representatives such Confidential Information as the Lender shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential
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Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
(b) to any person:
(i) to (or through) whom it assigns (or may potentially assign) all or any of its rights and/or obligations under one or more Finance Documents and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(iii) appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;
(vii) to whom or for whose benefit the Lender charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 25.3 (Security over Lender's rights);
(viii) who is a Party, a member of the Group or any related entity of a Transaction Obligor;
(ix) as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
(x) with the consent of the Guarantor;
in each case, such Confidential Information as the Lender shall consider appropriate if:
(A) in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
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(B) in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
(C) in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender, it is not practicable so to do in the circumstances;
(c) to any person appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the Lender;
(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
39.3 DAC6
Nothing in any Finance Document shall prevent disclosure of any Confidential Information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A 1 of Annex IV of Directive 2011/16/EU.
39.4 Entire agreement
This Clause 39 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Lender under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
39.5 Inside information
The Lender acknowledges that some or all of the Confidential Information is or may be price‑sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Lender undertakes not to use any Confidential Information for any unlawful purpose.
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39.6 Notification of disclosure
The Lender agrees (to the extent permitted by law and regulation) to inform the Borrowers:
(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub‑paragraph (v) of paragraph (b) of Clause 39.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function;
(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 39 (Confidential Information); and
(c) in respect of any publicity regarding the Facility or any of the terms thereof which shall be agreed in advance by the Guarantor and the Lender unless otherwise required in connection with the Guarantor's reporting obligations under or in connection with the rules and regulations of the US Securities and Exchange Commission and any US stock exchange applicable to the Guarantor.
39.7 Continuing obligations
The obligations in this Clause 39 (Confidential Information) are continuing and, in particular, shall survive and remain binding on the Lender for a period of 12 months from the earlier of:
(a) the date on which all amounts payable by the Borrowers under or in connection with this Agreement have been paid in full and the Commitment has been cancelled or otherwise ceased to be available; and
(b) the date on which the Lender otherwise ceases to be the Lender.
40 Confidentiality of Funding Rates
40.1 Confidentiality and disclosure
(a) Each Borrower agrees to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraph (b) below.
(b) Each Borrower may disclose any Funding Rate, to:
(i) any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives, if any person to whom that Funding Rate is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or is otherwise bound by requirements of confidentiality in relation to it;
(ii) any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender or the relevant Borrower, as the case may be, it is not practicable to do so in the circumstances;
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(iii) any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender or the relevant Borrower, as the case may be, it is not practicable to do so in the circumstances; and
(iv) any person with the consent of the Lender.
40.2 Related obligations
(a) Each Borrower acknowledges that each Funding Rate is or may be price sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each Borrower undertakes not to use any Funding Rate for any unlawful purpose.
(b) Each Borrower agrees (to the extent permitted by law and regulation) to inform the Lender:
(i) of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (b) of Clause 40.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(ii) upon becoming aware that any information has been disclosed in breach of this Clause 40 (Confidentiality of Funding Rates).
40.3 No Event of Default
No Event of Default will occur under Clause 24.4 (Other obligations) by reason only of a Borrower's failure to comply with this Clause 40 (Confidentiality of Funding Rates).
41 Counterparts
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
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Section 11
Governing Law and Enforcement
42 Governing Law
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
43 Enforcement
43.1 Jurisdiction
(a) Unless specifically provided in another Finance Document in relation to that Finance Document, the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with any Finance Document (including a dispute regarding the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) (a "Dispute").
(b) The Borrowers accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Borrower will argue to the contrary.
(c) This Clause 43.1 (Jurisdiction) is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. The Lender may take concurrent proceedings in any number of jurisdictions.
43.2 Service of process
(a) Without prejudice to any other mode of service allowed under any relevant law, each Borrower (other than a Borrower incorporated in England and Wales):
(i) irrevocably appoints Hill Dickinson Services (London) Limited at its current address at The Broadgate Tower 7th Floor, 20 Primrose Street, London EC2A 2EW, England as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(ii) agrees that failure by a process agent to notify the relevant Borrower of the process will not invalidate the proceedings concerned.
(b) If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrowers (on behalf of all the Borrowers) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Lender. Failing this, the Lender may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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Execution Pages
BORROWERS
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
duly authorised )
for and on behalf of )
Legato Shipholding Inc. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
duly authorised )
for and on behalf of )
Crayon Shipping Ltd )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Inastros Maritime Corp. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
100 EUROPE/78974442v6
SIGNED by )
as attorney-in-fact ) /s/ Panagiotis Boumpouras
duly authorised )
for and on behalf of )
Jasmer Shipholding Ltd )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Chilali Corp. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Highbird Management Inc. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Iris Shipping Corporation )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
101 EUROPE/78974442v6
Witness' address: ) 102 EUROPE/78974442v6
SIGNED by )
as attorney-in-fact )
duly authorised )
for and on behalf of ) /s/ Panagiotis Boumpouras
Kymata Shipping Co. )
in the presence of: )
Witness' signature: ) /s/ Ioli Petroula Vasalaki
Witness' name: )
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Aurora Shipping Enterprises Ltd. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Sun Shipping Corporation )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised )
for and on behalf of ) /s/ Panagiotis Boumpouras
Kerkyra Shipping Corporation )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
103 EUROPE/78974442v6
Witness' address: ) 104 EUROPE/78974442v6
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Zakynthos Shipping Corporation )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
SIGNED by )
as attorney-in-fact )
duly authorised ) /s/ Panagiotis Boumpouras
for and on behalf of )
Persephone Shipping Corporation )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
ORIGINAL LENDER
SIGNED by )
and by )
duly authorised ) /s/ Sarri Aikaterini
for and on behalf of ) /s/ Andreas Mitsiopoulos
NATIONAL BANK OF GREECE S.A. )
in the presence of: )
Witness' signature: )
Witness' name: ) /s/ Ioli Petroula Vasalaki
Witness' address: )
105 EUROPE/78974442v6