Document:

d1276792_ex4-21.htm

EXHIBIT 4.21

Private & Confidential

 

 

 

 

 

Dated 27 October 2011

 

 

 

 

 

 

 

 

 

 

FOURTH SUPPLEMENTAL AGREEMENT

relating to a secured credit facility of

up to US$90,000,000

to

PARAGON SHIPPING INC.

as Borrower

 

provided by

THE BANKS AND FINANCIAL INSTITUTIONS

listed in schedule 1

as Lenders

 

Arranger, Agent and Security Trustee

UNICREDIT BANK AG

(formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG)

Swap Bank

UNICREDIT BANK AG

(formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG)

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Contents

 

	
Clause

	
Page

	
1

	
Definitions

	
2

	 	 	 
	
2

	
Consent of the Creditor Parties

	
3

	 	 	 
	
3

	
Amendments to Principal Agreement

	
3

	 	 	 
	
4

	
Representations and warranties

	
6

	 	 	 
	
5

	
Conditions

	
 7

	 	 	 
	
6

	
Relevant Parties' confirmations

	
8

	 	 	 
	
7

	
Expenses

	
8

	 	 	 
	
8

	
Miscellaneous and notices

	
9

	 	 	 
	
9

	
Applicable law

	
9

 

 

	
Schedule 1 Names and lending offices of the Lenders

	  	
10

	 	 	 
	
Schedule 2 The Owners

	  	
11

	 	 	 
	
Schedule 3 The Relevant Ships and their details

	  	
12

	 	 	 
	
Schedule 4 Documents and evidence required as conditions precedent

	  	
13

  

  

  

 

THIS FOURTH SUPPLEMENTAL AGREEMENT is dated 27 October 2011 and made BETWEEN:

 

	
(1)

	
PARAGON SHIPPING INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the "Borrower");

 

	
(2)

	
THE BANKS AND FINANCIAL INSTITUTIONS listed in schedule 1 as Lenders (together the "Lenders");

 

	
(3)

	
UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Agent (the "Agent");

 

	
(4)

	
UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Arranger (the "Arranger");

 

	
(5)

	
UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Security Trustee (the "Security Trustee");

 

	
(6)

	
UNICREDIT BANK AG (formerly known as BAYERISCHE HYPO- UND VEREINSBANK AG) as Swap Bank (the "Swap Bank");

 

	
(7)

	
THE COMPANIES listed in schedule 2 as Owners (together the "Owners" and each an "Owner"); and

 

	
(8)

	
ALLSEAS MARINE S.A., a corporation organised and existing under the laws of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia, Liberia and maintaining a ship management office at 15, Karamanli Avenue, 166 73 Voula, Greece (the "Approved Manager").

 

WHEREAS:

 

	
(A)

	
this Agreement is supplemental to a loan agreement dated 19 November 2007 (the "Original Agreement") made between (1) the Borrower as borrower, (2) the Lenders, (3) the Agent, (4) the Arranger, (5) the Security Trustee and (6) the Swap Bank as amended and restated by a first supplemental agreement dated 25 February 2009 (the "First Supplemental Agreement"), as amended and restated by a second supplemental agreement dated 24 March 2010 (the "Second Supplemental Agreement") and as further amended and supplemented by a third supplemental agreement dated 29 December 2010 (the "Third Supplemental Agreement" and, together with the First Supplemental Agreement and the Second Supplemental Agreement the "Principal Agreement"), made between (inter alios) the Borrower and the Creditor Parties, relating to a secured credit facility of up to Ninety million Dollars ($90,000,000), of which the principal amount outstanding at the date hereof is Fifty million one hundred and fifty thousand Dollars ($50,150,000), made available by the Lenders to the Borrower upon the terms and conditions set out therein; and

 

	
(B)

	
this Agreement sets out the terms and conditions upon which the Creditor Parties agree, at the request of the Borrower:

 

	
  

	
(a)

	
to receive a prepayment of the Loan in the amount of $7,000,000;

 

	
  

	
(b)

	
to revise the terms for repayment of the Loan;

 

	
  

	
(c)

	
to amend clause 12.4(c) of the Principal Agreement as specified herein; and

 

	
  

	
(d)

	
to certain consequential changes to the Principal Agreement required in connection with the above and agreed to by the Borrower and the Creditor Parties.

  

1

  

NOW IT IS HEREBY AGREED as follows:

 

    1     Definitions

 

     1.1     Defined expressions

 

Words and expressions defined in the Principal Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.

 

     1.2      Definitions

 

In this Agreement, unless the context otherwise requires:

 

"Creditor Parties" means the Agent, the Arranger, the Security Trustee, any Lender and the Swap Bank and "Creditor Party" means any of them;

 

"Effective Date" means the date, no later than 27 October 2011, on which the Agent notifies the Borrower in writing that the Agent has received the documents and evidence specified in clause 5 and schedule 4 in a form and substance satisfactory to it;

 

"Fourth Mortgage Addendum" means, in relation to a Relevant Ship, the addendum executed or (as the context may require) to be executed by the relevant Owner of that Relevant Ship in favour of the Security Trustee in the form required by the Agent in its sole discretion and supplemental to the Mortgage dated 20 November 2007 executed by such Owner of such Relevant Ship in favour of the Security Trustee and "Fourth Mortgage Addenda" means both of them;

 

"Loan Agreement" means the Principal Agreement as amended and supplemented by this Agreement;

 

"Relevant Documents" means this Agreement and the Fourth Mortgage Addenda;

 

"Relevant Parties" means the Borrower, the Owners and the Approved Manager or, where the context so requires or permits, means any or all of them; and

 

"Relevant Ship" means each of the two (2) motor vessels listed in schedule 3 (being two (2) of the Ships referred to in the Principal Agreement).

 

     1.3      Principal Agreement

 

References in the Principal Agreement to "this Agreement" shall, with effect from the Effective Date and unless the context otherwise requires, be references to the Principal Agreement as amended by this Agreement and words such as "herein", "hereof", "hereunder", "hereafter", "hereby" and "hereto", where they appear in the Principal Agreement, shall be construed accordingly.

 

     1.4      Headings

 

Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

 

     1.5      Construction of certain terms

 

Clauses 1.2 to 1.5 (inclusive) of the Principal Agreement shall apply to this agreement (mutatis mutandis) as if set out herein and as if references therein to "this Agreement" were references to this Agreement.

 

  

2

  

     2     Consent of the Creditor Parties

 

The Creditor Parties, relying upon the representations and warranties made by each of the Relevant Parties in clause 4, agree with the Borrower that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment on or before 27 October 2011 of the conditions contained in clause 5 and schedule 4, the Creditor Parties agree:

 

	
   2.1.1

	
that, if the Borrower pays to the Agent, on or before 27 October 2011, the amount of $7,000,000 in prepayment of $7,000,000, such prepayment shall be applied by the Agent and the Lenders in reduction of the then remaining repayment instalments of clause 8.1 of the Principal Agreement in such manner as will result in the balance of the Loan following such prepayment to be repaid as follows:

 

	
  

	
(a)

	
1 repayment instalment in the amount of $2,550,000;

 

	
  

	
(b)

	
8 repayment instalments in the amount of $1,600,000 each;

 

	
  

	
(c)

	
11 repayment instalments in the amount of $1,860,000 each; and

 

	
  

	
(d)

	
a balloon instalment in the amount of $7,340,000 payable together with the last repayment instalment referred to in paragraph (c) above,

 

one such repayment instalment referred to in paragraphs (a)-(c) (inclusive) above payable on the next consecutive 20 Repayment Dates starting from 27 November 2011; and

 

   2.1.2     to the amendment of the Principal Agreement on the terms set out in clause 3.

 

     3     Amendments to Principal Agreement

 

     3.1      Amendments to Principal Agreement

 

The Principal Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended in accordance with the following provisions and the Principal Agreement (as so amended) will continue to be binding upon the Creditor Parties and the Borrower in accordance with its terms as so amended:

 

	
   3.1.1

	
by inserting in clause 1.1 of the Principal Agreement the following new definitions of "Fourth Mortgage Addendum", "Fourth Supplemental Agreement", "Third Mortgage Addendum" and "Third Supplemental Agreement" in the correct alphabetical order:

 

""Fourth Mortgage Addendum" means, in relation to each of m.v.s "CALM SEAS" and "CRYSTAL SEAS", the addendum to the Mortgage over such Ship made or (as the case may be) to be made between the relevant Owner and the Security Trustee, and in the plural means all of them;

 

"Fourth Supplemental Agreement" means the agreement dated 27 October 2011 made between (inter alios) the Borrower and the Creditor Parties supplemental to this Agreement;

 

"Third Mortgage Addendum" means, in relation to each of m.v.s "CALM SEAS" and "CRYSTAL SEAS", the addendum to the Mortgage over such Ship dated 7 January 2011 executed between the relevant Owner and the Security Trustee, and in the plural means all of them;

 

"Third Supplemental Agreement" means the agreement dated 29 December 2010 made between (inter alios) the Borrower and the Creditor Parties supplemental to this Agreement;"

 

	
   3.1.2

	
by deleting the words "28 May 2017" in the definition of "Final Maturity Date" in clause 1.1 of the Principal Agreement and by inserting in their place the words "27 August 2016";

 

  

3

  

 

	
   3.1.3

	
by deleting the words "First Mortgage Addendum and as further amended and supplemented by the relevant Second Mortgage Addendum" at the fifth line of the definition "Mortgage" in clause 1.1 of the Principal Agreement and by inserting in their place the words "the relevant Mortgage Addenda";

 

	
   3.1.4

	
by deleting the definition of "Mortgage Addenda" in clause 1.1 of the Principal Agreement and by inserting in its place the following new definition of "Mortgage Addenda":

 

—Mortgage Addenda" means, together, the First Mortgage Addenda, the Second Mortgage Addenda, the Third Mortgage Addenda and the Fourth Mortgage Addenda;";

 

	
   3.1.5

	
by deleting the words "28 February 2009" in the definition of "Repayment Dates" in clause 1.1 of the Principal Agreement and by replacing them with the words "27 November 2011";

 

	
   3.1.6

	
by deleting the definition "Substitute Vessel" in clause 1.1 of the Principal Agreement and by deleting references to a "Substitute Vessel" in their entirety;

 

	
   3.1.7

	
by deleting the definition of "Supplemental Agreements" in clause 1.1 of the Principal Agreement and by inserting in its place the following new definition of "Supplemental Agreements":

 

""Supplemental Agreements" means, together, the First Supplemental Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement and the Fourth Supplemental Agreement;";

 

	
   3.1.8

	
by deleting Clause 8.1 of the Principal Agreement in its entirety and by inserting in its place the following new Clause 8.1:

 

	
  

	
"8.1

	
Scheduled amortisation. The Borrower shall repay the amount of the Loan outstanding on the Effective Date referred to and defined in the Fourth Supplemental Agreement (being, for the avoidance of doubt, $43,150,000) by twenty (20) repayment instalments, one such instalment to be repaid on each of the Repayment Dates. Subject to the provisions of this Agreement, the amount of the first such instalment shall be $2,550,000, the amount of each of the second to ninth such instalments (inclusive) shall be $1,600,000, the amount of the tenth to nineteenth such instalments (inclusive) shall be $1,860,000 and the amount of the twentieth and final instalment shall be $9,200,000 (comprising a repayment instalment of $1,860,000 and a balloon payment of $7,340,000).

 

For the avoidance of any doubt, the repayment profile described above has been calculated assuming that a prepayment of the Loan in the amount of $7,000,000 has been made on 27 October 2011 pursuant to the terms of the Fourth Supplemental Agreement.";

 

	
   3.1.9

	
by deleting clause 8.12 of the Principal Agreement in its entirety and by inserting in its place the following new clause 8.12:

 

	 	
"8.12

	
Application of partial prepayment. Any sum received by the Agent pursuant to Clauses 8.3, 8.10 and 8.15 shall be applied in prepayment of the Loan and in reduction of the repayment instalments referred to in Clause 8.1 (including the balloon payment referred to therein) proportionately. Subject to no Event of Default being in occurrence or continuing at the time a prepayment is made under Clause 8.10, any balance arising from the sale or Total Loss proceeds of a Ship which is sold or becomes a Total Loss after the prepayment required by Clause 8.10 has been made, shall be released to the Borrower or to such other person (including, without limitation, the Owner of the relevant Ship) as the Borrower may direct.";

 

  

4

  

	
 3.1.10

	
by deleting sub-paragraph (c) of clause 12.3 of the Principal Agreement in its entirety and by inserting in its place the following new sub-paragraph (c):

 

	
  

	
"(c)

	
effect any form of redemption, purchase or return of share capital if such action results in the Liquid Assets of the Borrower and all the other members of the Group (on a consolidated basis) as at the day when any such form of redemption, purchase or return of share capital is effected, to be less than the Debt Service as at such day;"

 

	
 3.1.11

	
by deleting clause 12.4 in its entirety and by inserting in its place the following new clause 12.4:

 

"12.4 Financial Covenants. The Borrower shall ensure that at all times:

 

	
  

	
(a)

	
the ratio of Total Liabilities to EBITDA shall not exceed 6:1;

 

	
  

	
(b)

	
the Market Value Adjusted Net Worth of the Group shall not be less than $100,000,000;

 

	
  

	
(c)

	
there are available to the Borrower and all the other members of the Group on a consolidated basis, Liquid Assets in the amount of $750,000 per Fleet Vessel without, for the avoidance of doubt, taking into account any amount standing to the credit of the Retention Account or any other restricted account but by taking into account amounts standing to the credit of the Cash Collateral Account and the Earnings Accounts; and

 

	
  

	
(d)

	
the Leverage Ratio shall not exceed 0.75:1.";

 

	
 3.1.12

	
by deleting sub-paragraph (a) of clause 12.9 of the Principal Agreement in its entirety and by inserting in its place the following sub-paragraph (a):

 

	 	
"(a)  

	
 the Agent has received from the Borrower by no later than the relevant Dividend Declaration Date at least 5 days' prior written notice of its intention to announce a dividend payment (such notice hereinafter a "Dividend Declaration");"

 

	
 3.1.13

	
by deleting sub-paragraph (e) of clause 12.9 of the Principal Agreement in its entirety and by renumbering the remaining sub-paragraphs of clause 12.9 of the Principal Agreement accordingly;

 

	
 3.1.14

	
by deleting the word "and" at the end of sub-paragraph (g)(ii) of clause 12.9 of the Principal Agreement, by adding the word "and" after the words "per annum;" at the end of sub-paragraph (g)(iii) of clause 12.9 of the Principal Agreement and by inserting after sub-paragraph (g)(iii) of clause 12.9 of the Principal Agreement the following new sub-paragraph (g)(iv):

 

	
  

	
"(iv)

	
in respect of any financial quarter shall be not higher than such amount as ensures that the Liquid Assets of the Borrower and all the other members of the Group (on a consolidated basis) as at the last day of such financial quarter (but after deducting therefrom the amount of such dividends) are not less than the Debt Service as at such day; and";

 

	
3.1.15

	
by deleting sub-paragraph (i) of clause 12.9 of the Principal Agreement in its entirety and by replacing the words "; and" at the end of sub-paragraph (h) of clause 12.9 of the Principal Agreement with ".";

 

	
3.1.16

	
by deleting clause 12.10 of the Principal Agreement in its entirety and by replacing it with the following new clause 12.10:

 

	 	
"12.10

	
Minimum blocked balances. The Borrower shall maintain at all times in the Cash Collateral Account cash balances which are no less than $750,000 per Ship which is subject to a Mortgage.";

 

  

5

  

 

	
 3.1.17

	
by deleting clause 12.11 in its entirety and by deleting references to clause 12.11 in their entirety; and

 

	
 3.1.18

	
by deleting sub-paragraph (b) of clause 18.5 in its entirety, by deleting "(a)" at the beginning of the existing sub-paragraph (a) of clause 18.5 of the Principal Agreement and by deleting the words "and Cash Collateral Account" from the heading of clause 18.5 of the Principal Agreement.

 

	
     3.2

	
Continued force and effect

 

Save as amended by this Agreement, the provisions of the Principal Agreement shall continue in full force and effect and the Principal Agreement and this Agreement shall be read and construed as one instrument.

 

     4    Representations and warranties

 

	
     4.1

	
Primary representations and warranties

 

Each of the Relevant Parties represents and warrants to the Creditor Parties that:

 

	
   4.1.1

	
Existing representations and warranties

 

the representations and warranties set out in clause 10 of the Principal Agreement and clause 4 of each Guarantee were true and correct on the date of the Principal Agreement and are true and correct, including to the extent that they may have been or shall be amended by this Agreement, as if made on the date of this Agreement with reference to the facts and circumstances existing on such date;

 

   4.1.2     Corporate power

 

each of the Relevant Parties has power to execute, deliver and perform its obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to authorise the execution, delivery and performance of the Relevant Documents to which it is or is to be a party;

 

   4.1.3     Binding obligations

 

the Relevant Documents to which it is or is to be a party constitute valid and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms;

 

   4.1.4     No conflict with other obligations

 

the execution, delivery and performance of the Relevant Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or permit to which any of the Relevant Parties is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is subject or by which it or any of its property is bound or (iii) contravene or conflict with any provision of the constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition of or oblige any of the Relevant Parties to create any Security Interest (other than a Permitted Security Interest) on any of the undertaking, assets, rights or revenues of any of the Relevant Parties;

 

   4.1.5     No filings required

 

save for the registration of the Fourth Mortgage Addenda with the relevant ship registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Pertinent Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Pertinent Jurisdiction on or in relation to the

 

  

6

  

Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the courts of each Pertinent Jurisdiction;

 

   4.1.6     Choice of law

 

the choice of English law to govern the Relevant Documents (other than the Fourth Mortgage Addenda), the choice of the Marshall Islands law to govern the Fourth Mortgage Addendum in respect of m.v. "CALM SEAS" and the choice of Liberian law to govern the Fourth Mortgage Addendum in respect of m.v. "CRYSTAL SEAS", and the submissions by the Relevant Parties to the non-exclusive jurisdiction of the English courts are valid and binding; and

 

   4.1.7     Consents obtained

 

every consent, authorisation, licence or approval of, or registration or declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Relevant Documents to which it is or will become a party or the performance by any of the Relevant Parties of their respective obligations under such documents has been obtained or made and is in full force and effect and there has been no default in the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same.

 

     4.2      Repetition of representations and warranties

 

Each of the representations and warranties contained in clause 4.1 of this Agreement and clause 10 of the Principal Agreement (as amended by this Agreement) shall be deemed to be repeated by the Relevant Parties on the Effective Date as if made with reference to the facts and circumstances existing on such day.

 

     5     Conditions

 

     5.1     Documents and evidence

 

The consent of the Creditor Parties referred to in clause 2 shall be subject to the receipt by the Agent or its duly authorised representative of the documents and evidence specified in schedule 4 in form and substance satisfactory to the Agent.

 

     5.2     General conditions precedent

 

The consent of the Creditor Parties referred to in clause 2 shall be further subject to.

 

	
   5.2.1

	
the representations and warranties in clause 4 being true and correct on the Effective Date as if each was made with respect to the facts and circumstances existing at such time; and

 

   5.2.2     no Event of Default having occurred and continuing at the time of the Effective Date.

 

      5.3    Waiver of conditions precedent

 

	
   5.3.1

	
The conditions specified in this clause 5 are inserted solely for the benefit of the Lenders and the Agent and may be waived by the Agent (acting on the instructions of the Majority Lenders) in whole or in part with or without conditions.

 

	
   5.3.2

	
If the Borrower has not procured by the Effective Date (a) the execution and delivery by Opera Navigation Co., being the Owner of m.v. "CRYSTAL SEAS", to the Agent of the Fourth Mortgage Addendum in respect of m.v. "CRYSTAL SEAS" and (b) its registration with the relevant ship registry, the Borrower hereby undertakes with the Agent to procure (i) the execution and delivery by Opera Navigation Co. to the Agent of the Fourth Mortgage Addendum in respect of m.v. "CRYSTAL SEAS" and (ii) its registration with the relevant ship registry by no later than 15 November 2011, unless by such date m.v. "CRYSTAL SEAS" has been delivered to Urban Holdings S.A. of the Republic of the Marshall Islands under the memorandum of agreement dated 13 October 2011 made between Opera Navigation Co. as seller and Urban Holdings S.A.

 

  

7

  

of the Republic of the Marshall Islands as buyer. Failure by the Borrower to do so by such time will be an Event of Default under the Principal Agreement.

 

    6      Relevant Parties' confirmations

 

Each of the Relevant Parties hereby confirms its consent to the amendments to the Principal Agreement contained in this Agreement and agrees that:

 

	
      6.1

	
each of the Finance Documents (including any Guarantee) to which it is a party, and its obligations thereunder, shall remain in full force and effect notwithstanding the amendments made to the Principal Agreement by this Agreement;

 

	
      6.2

	
its obligations under the relevant Finance Documents (including any Guarantee) to which it is a party includes any and all amounts owing by the Borrower under the Principal Agreement as amended and restated by this Agreement; and

 

	
      6.3

	
with effect from the Effective Date, references to "the Agreement" or the "the Loan Agreement" in any of the Finance Documents (including any Guarantee) to which it is a party shall henceforth be references to the Principal Agreement as amended and restated by this Agreement and as from time to time hereafter amended.

 

    7      Expenses

 

     7.1     Expenses

 

The Borrower agrees to pay to the Agent on a full indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Creditor Parties or any of them:

 

	
   7.1.1

	
in connection with the negotiation, preparation, execution and, where relevant, registration of this Agreement and the Fourth Mortgage Addenda and of any amendment or extension of or the granting of any waiver or consent under this Agreement or the Fourth Mortgage Addenda; and

 

	
   7.1.2

	
in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under this Agreement or the Fourth Mortgage Addenda or otherwise in respect of the monies owing and obligations incurred under this Agreement and the Fourth Mortgage Addenda,

 

together with interest at the rate and in the manner referred to in clause 7 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as before judgment).

 

     7.2     Value Added Tax

 

All expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by the Creditor Parties or any of them under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.

 

     7.3     Stamp and other duties

 

The Borrower agrees to pay to the Agent on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by the Creditor Parties or any of them) imposed on or in connection with this Agreement and the Fourth Mortgage Addenda and shall indemnify the Creditor Parties against any liability arising by reason of any delay or omission by the Borrower to pay such duties or taxes.

 

  

8

  

 

    8      Miscellaneous and notices

 

     8.1     Notices

 

The provisions of clause 28 of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose any notices to be sent to the Relevant Parties or any of them hereunder shall be sent to the same address as the address indicated for the "Borrower" in the said clause 28.

 

     8.2     Counterparts

 

This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.

 

    9      Applicable law

 

     9.1     Law

 

This Agreement and any non-contractual obligations in connection with this Agreement are governed by, and shall be construed in accordance with, English law.

 

     9.2     Submission to jurisdiction

 

Each of the Relevant Parties agrees, for the benefit of the Creditor Parties, that any legal action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement) against any of the Relevant Parties or any of its assets may be brought in the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Hill Dickinson Services (London) Limited at present of Irongate House, Duke's Place, London EC3A 7HX, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Creditor Parties or any of them to take proceedings against any of the Relevant Parties in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties further agree that only the Courts of England and not those of any other State shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the Creditor Parties or any of them arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement).

 

     9.3     Contracts (Rights of Third Parties) Act 1999

 

No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

 

IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.

  

9

  

Schedule 1

 

Names and lending offices of the Lenders

 

	
 

Lender

 

	
 

Lending Office

	
 

UniCredit Bank AG (formerly known as 

Bayerische Hypo- Und Vereinsbank AG)

	
 

62 Notara Street

185 35 Piraeus

Greece

 

 

 

  

10

  

Schedule 2

The Owners

Frontline Marine Company

Trade Force Shipping S.A.

Opera Navigation Co.

  

11

  

Schedule 3

 

The Relevant Ships and their details

 

	  	
(1)

 

Name

 

	
(2)

 

IMO No.

 

	
(3)

 

Owner

 

	
1

	
"CALM

 SEAS"

	
9184835

	
Frontline Marine Company

	
2

	
"CRYSTAL SEAS”

	
9114153

	
Opera Navigation Co.

  

12

  

Schedule 4

Documents and evidence required as conditions precedent

 

(referred to in clause 5.1)

 

1         Corporate authorisation

 

In relation to each of the Relevant Parties (other than the Approved Manager):

 

(a)           Constitutional documents

 

copies certified by an officer of each of the Relevant Parties, as a true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretary's certificate confirming that there have been no changes or amendments to the constitutional documents certified copies of which were previously delivered to the Agent pursuant to the Principal Agreement;

 

(b)           Resolutions

 

copies of resolutions of each of its board of directors and, if required, its shareholders/stockholders approving such of the Relevant Documents to which it is or is to be a party and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such party's obligations thereunder, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of the Relevant Parties as:

 

	
  

	
(i)

	
being true and correct;

 

	
  

	
(ii)

	
being duly passed at meetings of the directors of such Relevant Party and of the shareholders/stockholders of such Relevant Party, each duly convened and held;

 

	
  

	
(iii)

	
not having been amended, modified or revoked; and

 

	
  

	
(iv)

	
being in full force and effect,

 

together with originals or certified copies of any powers of attorney issued by such Relevant Party pursuant to such resolutions; and

 

(c)           Certificate of incumbency

 

a list of directors and officers of each Relevant Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Banking Days prior to the date of this Agreement) by an officer of such Relevant Party to be true, complete and up to date;

 

2         Fourth Mortgage Addenda

 

the Fourth Mortgage Addenda, each duly executed by the relevant Relevant Party and duly registered at the relevant registries;

 

3         Consents

 

a certificate (dated no earlier than five (5) Banking Days prior to the date of this Agreement) from an officer of each of the Relevant Parties (other than the Approved Manager) stating that no

  

13

  

 

consents, authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by each of the Relevant Parties or any other party (other than the Creditor Parties) in connection with, the execution, delivery, and performance of the Relevant Documents to which they are or will be a party;

 

4         Prepayment

 

the Agent has received from the Borrower an amount of $7,000,000 together with irrevocable instructions by the Borrower that such amount may be applied on 27 October 2011 in the manner set out in clause 2.1.1 and the Agent and the Lenders have made such application;

 

5         Legal opinions

 

such legal opinions in relation to the laws of the Cayman Islands, Liberia and the Marshall Islands and any other legal opinions as the Agent shall in its reasonable discretion deem appropriate; and

 

6         Process agent

 

an original or certified true copy of a letter from each Relevant Party's agent for receipt of service of proceedings accepting its appointment under this Agreement in which it is or is to be appointed as such Relevant Party's agent.

  

14

  

	
Borrower

	  	  	  
	  	  	  	  
	
EXECUTED as a DEED by Maria Stefanou and

	
)

	  	
/s/ Maria Stefanou

	
for and on behalf of each of  Robert Perri

	
)

	  	
Attorney-in-fact

	
PARAGON SHIPPING INC.

	
)

	  	
/s/ Robert Perri

	  	  	  	
Attorney-in-fact

	
as Borrower

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	
/s/ Pinelopi-Anna Miliou

	 	 	 	 
	
Witness

	 	 	 	 	 
	Name: 	
Pinelopi-Anna Miliou

	
 

	  	  	  
	Address:	
Norton Rose LLP, Athens

	
 

	  	  	  
	Occupation: 	
Solicitor

	
 

	  	  	  
	 	  	  	  
	  	  	  	  
	
Lenders

	  	  	  
	  	  	  	  
	
SIGNED by A. KERPINIOTI

	
)

	  	
/s/ A. KERPINIOTI

	
and by P. LYKOUDIS

	
)

	  	
Authorised Signatory

	
for and on behalf of

	
)

	  	  
	
UNICREDIT BANK AG (formerly known as

	
)

	  	  
	
BAYERISCHE HYPO- UND VEREINSBANK AG)

	
)

	  	
/s/ P. LYKOUDIS

	
as Lender

	
)

	  	
Authorised Signatory

	  	  	  	  
	  	  	  	  
	
Agent

	  	  	  
	  	  	  	  
	
SIGNED by A. KERPINIOTI

	
)

	  	
/s/ A. KERPINIOTI

	
and by P. LYKOUDIS

	
)

	  	
Authorised Signatory

	
for and on behalf of

	
)

	  	  
	
UNICREDIT BANK AG (formerly known as

	
)

	  	  
	

BAYERISCHE HYPO- UND VEREINSBANK AG)

	
)

	  	
/s/ P. LYKOUDIS

	
as Agent

	
)

	  	
Authorised Signatory

	  	  	  	  
	 	 	 	 
	Arranger	 	 	 
	 	 	 	 
	
SIGNED by A. KERPINIOTI

	)	 	
/s/ A. KERPINIOTI

	
and by P. LYKOUDIS

	)	 	
Authorised Signatory

	
for and on behalf of

	)	 	 
	
UNICREDIT BANK AG (formerly known as

	)	 	 
	
BAYERISCHE HYPO- UND VEREINSBANK AG)

	)	 	
/s/ P. LYKOUDIS

	
as Arranger

	)	 	
Authorised Signatory

	 	 	 	 
	 	  	  	  
	
Swap Bank

	  	  	  
	  	  	  	  
	
SIGNED by A. KERPINIOTI

	
)

	  	
/s/ A. KERPINIOTI

	
and by P. LYKOUDIS

	
)

	  	
Authorised Signatory

	
for and on behalf of

	
)

	  	  
	
UNICREDIT BANK AG (formerly known as

	
)

	  	  
	
BAYERISCHE HYPO- UND VEREINSBANK AG)

	
)

	  	
/s/ P. LYKOUDIS

	
as Swap Bank

	
)

	  	
Authorised Signatory

 

 

15

 

 

	
Security Trustee

	  	  	  
	  	  	  	  
	
SIGNED by A. KERPINIOTI

	
)

	  	
/s/ A. KERPINIOTI

	
and by P. LYKOUDIS

	
)

	  	
Authorised Signatory

	
for and on behalf of

	
)

	  	  
	
UNICREDIT BANK AG (formerly known as

	
)

	  	  
	
BAYERISCHE HYPO- UND VEREINSBANK AG)

	
)

	  	
/s/ P. LYKOUDIS

	
as Security Trustee

	
)

	  	
Authorised Signatory

	  	  	  	  
	  	  	  	  
	
Owners

	  	  	  
	  	  	  	  
	
EXECUTED as a DEED by Maria Stefanou

	
)

	  	
/s/ Maria Stefanou

	
for and on behalf of 

	
)

	  	
Attorney-in-fact

	
FRONTLINE MARINE COMPANY

	
)

	  	  
	  	  	  	  
	
as Owners

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	

/s/ Pinelopi-Anna Miliou

	
 

	  	  	  
	
Witness

	 	
 

	  	  	  
	Name:  	Pinelopi-Anna Miliou	
 

	  	  	  
	Address:  	Norton Rose LLP, Athens	
 

	  	  	  
	Occupation:   	Solicitor	
 

	  	  	  
	  	  	  	  
	  	  	  	  
	
EXECUTED as a DEED by Maria Stefanou

	
)

	  	
/s/ Maria Stefanou

	
for and on behalf of 

	
)

	  	
Attorney-in-fact

	
TRADE FORCE SHIPPING S.A.

	
)

	  	  
	  	  	  	  
	
as Owners

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	
/s/ Pinelopi-Anna Miliou

	
 

	  	  	  
	
Witness

	 	
 

	  	  	  
	Name:	
Pinelopi-Anna Miliou

	
 

	  	  	  
	Address:	
Norton Rose LLP, Athens

	
 

	  	  	  
	Occupation:	
Solicitor

	
 

	  	  	  
	  	  	  	  
	  	  	  	  
	
EXECUTED as a DEED by Maria Stefanou

	
)

	  	
/s/ Maria Stefanou

	
for and on behalf of 

	
)

	  	
Attorney-in-fact

	
OPERA NAVIGATION CO.

	
)

	  	  
	  	  	  	  
	
as Owners

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	
/s/ Pinelopi-Anna Miliou

	
 

	  	  	  
	
Witness

	 	
 

	  	  	  
	Name:	
Pinelopi-Anna Miliou

	
 

	  	  	  
	Address:	
Norton Rose LLP, Athens

	
 

	  	  	  
	Occupation:	
Solicitor

	
 

	  	  	  

 

 

16

 

 

	
Approved Manager

	  	  	  
	  	  	  	  
	
EXECUTED as a DEED by Maria Stefanou

	
)

	  	
/s/ Maria Stefanou

	
for and on behalf of 

	
)

	  	
Attorney-in-fact

	
ALLSEAS MARINE S.A.

	
)

	  	  
	
as Approved Manager

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	
/s/ Pinelopi-Anna Miliou

	
 

	  	  	  
	
Witness

	 	
 

	  	  	  
	Name:	
Pinelopi-Anna Miliou

	
 

	  	  	  
	Address:	
Norton Rose LLP, Athens

	
 

	  	  	  
	Occupation:	
Solicitor

	
 

	  	  	  
	  	  	  	  

  

 

SK 25744 0001 1276792

 

 

17d1276803_ex4-28.htm

EXHIBIT 4.28

 

 

 

Athens, December 15, 2011

 

Messrs:

 

Bank of Scotland Plc.

New Uberior House

11-13 Earl Grey Street,

Edinbourgh, EH3 9BN

Wholesale Loans Agency

 

Attn : Mr. Alan Cadden

 

Re:  Loan Agreement dated 4 December 2007

 

Dear Mr. Cadden,

 

We refer to a loan agreement dated 4 December 2007 (as supplemented and amended by the supplemental agreements dated respectively 20 May 2008, 13 March 2009, 12 June 2009, as amended and restated by an amending and restating agreement dated 9 March 2010 and as further amended and supplemented by a supplemental letter agreement dated 31 December 2010, the "Loan Agreement") and made between (i) Paragon Shipping Inc. as borrower (the "Borrower"), (ii) the banks and financial institutions listed therein as lenders (the "Lenders") and (iii) yourselves as agent, mandated lead arranger, underwriter, swap bank and security trustee, pursuant to which the Lenders made available to the Borrower a secured revolving credit facility in an amount of (originally) up to US$89,000,000 (the "Loan").

 

Expressions defined in the Loan Agreement shall have the same meaning when used in this letter.

 

In response to the reservation of rights letter dated 17 November, 2011 addressed by the Agent to us, the Borrower (the "Reservation of Rights Letter"), we deposited into the Retention Account, held with the Agent, the total amount of US$3,750,000 as additional security in order to rectify the shortfall in the minimum security cover which we are required to maintain pursuant to Clause 15.1 of the Loan Agreement. Payments into the Retention Account have been made as follows:

 

	
  

	
(1)

	
US$2,147,528 has been transferred to the Retention Account on 25 November 2011,

 

	
  

	
(2)

	
US$935,805 was transferred on 9 December 2011 (upon maturity of the Time Deposit held with Bank of Scotland in the amount of US$1,000,132),

 

	
  

	
(3)

	
Taking into account that as at 10 November the amount deposited in the Retention Account stood at US$666,667 the balance on the Retention Account thus became US$3,750,000 (US$666,667 plus US$2,147,528 plus US$935,805).

 

	
  

	
(4)

	
Out of the Retention Account the Borrower has paid the Debt Service due on 9 December 2011 amounting to US$1,101,091.29 (principal repayment US$ 1,000,000 plus interest payment US$101,091.29)

 

	
  

	
(5)

	
The balance of US$2,648,908.71 shall remain on the Retention Account and will not be released (whether in whole or in part) unless the Agent confirms that we are in satisfaction of the minimum security cover which we are required to maintain pursuant to 

 

___________________________________________________

15, Karamanli Ave., GR 166 73 Voula, Athens, Greece

Tel: +30 210 8914 600, Fax: +30 210 8995 088 - www.paragonship.com

  

  

  

Clause 15.1 of the Loan Agreement without taking into account of this cash balance (or the relevant part thereof)

 

We understand that the provision of additional security in the form of cash collateral in the amount of US$3,750,000 as above has cured the shortfall in the minimum security cover and that the Borrower is no longer in breach of Clause 15.1 of the Loan Agreement (as referred to in the Reservation of Rights Letter).

 

 

For Paragon Shipping Inc.

 

/s/ George Skrimizeas   

George Skrimizeas

Chief Operating Officer

 

 

Accepted and agreed

 

 

/s/ Illegible                                           

Bank of Scotland Plc.

(acting in its capacity as Agent on

behalf of the Lenders)

 

 

SK 25744 0001 1276803

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