Document:

d1375470_ex10-25.htm

Exhibit 10.25

Dated 28 November 2012

 

PARAGON SHIPPING INC.

as Borrower

 

-and-

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

 

-and-

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 2

as Swap Banks

 

-and-

 

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

as Arranger, Agent and Security Trustee

	  
	
SECOND SUPPLEMENTAL AGREEMENT

	  

 

 

 

in relation to a Loan Agreement dated 30 March 2009 (as amended)

for a term loan facility of up to US$30,000,000

secured against m.v. "KIND SEAS"

 

CONSTANT & CONSTANT

2, Defteras Merarchias

185 35 Piraeus

Greece

  

  

  

INDEX

 

 

	  	  	  	  	  	  	  
	
Clause

	
 

	
 

	
 

	
Page

	
 

	  	  	  
	
1

	
 

	
DEFINITIONS

	
 

	
 

	
1

	
 

	  	  	  
	
2

	
 

	
REPRESENTATIONS AND WARRANTIES

	
 

	
 

	
1

	
 

	  	  	  
	
3

	
 

	
AGREEMENT OF THE CREDITOR PARTIES

	
 

	
 

	
2

	
 

	  	  	  
	
4

	
 

	
CONDITIONS

	
 

	
 

	
3

	
 

	  	  	  
	
5

	
 

	
VARIATIONS TO LOAN AGREEMENT

	
 

	
 

	
4

	
 

	  	  	  
	
6

	
 

	
CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS

	
 

	
 

	
4

	
 

	  	  	  
	
7

	
 

	
FEES AND EXPENSES

	
 

	
 

	
5

	
 

	  	  	  
	
8

	
 

	
NOTICES

	
 

	
 

	
5

	
 

	  	  	  
	
9

	
 

	
APPLICABLE LAW

	
 

	
 

	
5

	
 

	  	  	  
	
10

	
 

	
THIRD PARTY RIGHTS

	
 

	
 

	
6

	
 

	  	  
	
EXECUTION PAGES

	
 

	
 

	
7

	
 

	  	  
	
SCHEDULE 1 LENDERS AND COMMITMENTS

	
 

	
 

	
9

	
 

	  	  
	
SCHEDULE 2 SWAP BANKS

	
 

	
 

	
10

	
 

	  	  
	
SCHEDULE 3 FORM OF CONFIRMATION

	
 

	
 

	
11

	
 

  

  

  

THIS SECOND SUPPLEMENT AGREEMENT dated 28 November 2012 and made

 

BETWEEN:

 

 

	
(1)

	
PARAGON SHIPPING INC. as Borrower;

 

	
(2)

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

 

	
(3)

	
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 2 as Swap Banks; and

 

	
(4)

	
THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND as Arranger, Agent and Security Trustee,

 

IS SUPPLEMENTAL to a Loan Agreement dated 30 March 2009 as amended by a first supplemental agreement dated 23 March 2010 and two side letters dated 23 December 2011 and 27 September 2012 respectively (together, the "Loan Agreement") made between (i) the Borrower, (ii) the Lenders, (iii) the Swap Banks, (iv) the Arranger, (v) the Agent and (vi) the Security Trustee pursuant to which the Lenders made available to the Borrower a term loan facility of up to Thirty Million United States Dollars (US$30,000,000) upon the terms and for the purposes therein specified.

 

WHEREAS the Lenders, the Swap Banks, the Arranger, the Agent and the Security Trustee have agreed to give their consent, subject to the terms and conditions herein contained, to amongst other things, the rescheduling of the remaining repayment instalments of the Loan.

 

NOW THEREFORE IT IS HEREBY AGREED

 

	
1

	
DEFINITIONS

 

	
1.1

	
Words and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this Second Supplemental Agreement.

 

	
1.2

	
In this Second Supplemental Agreement, unless the context otherwise requires:

 

"Second Mortgage Addendum" means the addendum to the first preferred Marshall Islands mortgage over m.v. "KIND SEAS" dated 31 March 2009, as amended by the first mortgage addendum dated 23 March 2010, executed by the Corporate Guarantor as owner, in favour of the Security Trustee.

 

	
1.3

	
Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this Second Supplemental Agreement. References to Clauses are to clauses of this Second Supplemental Agreement save as may be otherwise expressly provided in this Second Supplemental Agreement.

 

	
2

	
REPRESENTATIONS AND WARRANTIES

 

	
2.1

	
The Borrower hereby represents and warrants to the Creditor Parties that, as at the date of this Second Supplemental Agreement, the representations and warranties set forth in clause 10 of the Loan Agreement (updated mutatis mutandis to the date of this Second Supplemental Agreement) are true and correct as if all references therein to "this Agreement" were references to the Loan Agreement as further amended by this Second Supplemental Agreement.

  

  

  

	
2.2

	
The Borrower hereby further represents and warrants to the Creditor Parties that as at the date of this Second Supplemental Agreement:

 

	
(a)

	
it is duly formed and validly existing and in goodstanding under the laws of the country of its incorporation and has full power to enter into and perform its obligations under this Second Supplemental Agreement to which it is a party and has complied with all statutory and other requirements relative to its business;

 

	
(b)

	
all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this Second Supplemental Agreement, the Second Mortgage Addendum and all other documents to be executed in connection with the amendments to the Loan Agreement as contemplated hereby have been obtained and will be maintained in full force and effect throughout the Security Period;

 

	
(c)

	
it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this Second Supplemental Agreement and this Second Supplemental Agreement constitutes the valid and binding obligations of the Borrower enforceable in accordance with its terms;

 

	
(d)

	
the execution, delivery and performance of this Second Supplemental Agreement, the Second Mortgage Addendum and all such other documents as contemplated hereby does not and will not during the Security Period constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or on any of its respective property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents) on any of such property or assets;

 

	
(e)

	
it has fully disclosed in writing to the Creditor Parties all facts which it knows or which it should reasonably know and which are material for disclosure to the Creditor Parties in the context of this Second Supplemental Agreement and all information furnished by the Borrower or on its behalf relating to its business and affairs in connection with this Second Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading; and

 

	
(f)

	
no Event of Default (save for any Event of Default which may exist under Clause 19.1(f) of the Loan Agreement with regard however only to any Financial Indebtedness of a Relevant Person to any person other than the Creditor Parties pursuant to the Finance Documents) has occurred and continues at date of this Second Supplemental Agreement

 

	
3

	
AGREEMENT OF THE CREDITOR PARTIES

 

	
3.1

	
The Creditor Parties, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this Second Supplemental Agreement, hereby agree with the Borrower subject to and upon the terms and conditions of this Second Supplemental Agreement and in particular, but without limitation, subject to and with effect from the fulfillment of the conditions precedent set out in Clause 4, to the rescheduling of the remaining instalments of the Loan in accordance with Clause 5.

 

	
3.2

	
The Borrower confirms that it will continue to remain liable to perform its obligations under the Loan Agreement (as hereby amended) and the Finance Documents to which it is a party.

 

 

  

2

  

	
4

	
CONDITIONS

 

	
4.1

	
The agreement of the Creditor Parties contained in Clause 3.1 of this Second Supplemental Agreement shall be subject to the following condition that the Creditor Parties shall have received in form and substance satisfactory to the Security Trustee on behalf of the Lenders and their legal advisers on or before the signature hereof:

 

	
(a)

	
a certificate of a Director of the Borrower confirming the names and offices of all the Directors and/or Officers of the Borrower, and confirming that the Borrower's incorporation and constitutional documents have not been altered or amended since 23 March 2009;

 

	
(b)

	
true and complete copies of the resolutions passed at a meeting of the Board of Directors of the Borrower, authorising and approving the execution of this Second Supplemental Agreement and any other document or action to which the Borrower is a party, and authorising its appropriate officer or officers or other representatives to execute the same on its behalf;

 

	
(c)

	
the original of any power of attorney issued by the Borrower pursuant to such resolutions aforesaid;

 

	
(d)

	
true and complete copies of the resolutions passed at a meeting of the Board of Directors of the Corporate Guarantor, authorising and approving the execution of the Second Mortgage Addendum and any other document or action to which the Corporate Guarantor is a party, and authorising its appropriate officer or officers or other representatives to execute the same on its behalf;

 

	
(e)

	
the original of any power of attorney issued by the Corporate Guarantor pursuant to such resolutions aforesaid;

 

	
(f)

	
certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this Second Supplemental Agreement and the Second Mortgage Addendum(including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Security Trustee deems appropriate;

 

	
(g)

	
a duly executed original of this Second Supplemental Agreement and the Second Mortgage Addendum, together with evidence that the Second Mortgage Addendum has been duly registered against the Ship in accordance with the laws of the Republic of The Marshall Islands;

 

	
(h)

	
such legal opinions as the Security Trustee may require in respect of the matters contained in this Second Supplemental Agreement and the Second Mortgage Addendum;

 

	
(i)

	
a duly executed confirmation from each Security Party in the form of Schedule 3 hereto, confirming that (notwithstanding the amendments made to the Loan Agreement pursuant to this Agreement) the Finance Documents to which it is a party and its obligations thereunder remain valid and binding; and

 

	
(j)

	
receipt by the Lenders of the expenses referred to in Clause 7.1.

 

	
4.2

	
The agreement of the Creditor Parties contained in Clause 3.1 of this Second Supplemental Agreement shall be further subject to the condition that the Creditor Parties shall receive evidence satisfactory to the Agent of the agreement of the relevant banks and financial institutions to similar amendments (as set out in Clause 5 hereof) to the other loan facilities currently in place with Paragon Shipping Inc. as borrower within 90 days from the date of this Second Supplemental Agreement.

  

3

  

	
5

	
VARIATIONS TO LOAN AGREEMENT

 

	
5.1

	
In consideration of the agreement of the Creditor Parties contained in Clause 3.1 of this Second Supplemental Agreement, the Borrower hereby agrees with the Creditor Parties that the provisions of the Loan Agreement shall as of the date on which the conditions precedent set out in Clause 4 have been complied with to the satisfaction of the Creditor Parties be varied and/or amended and/or supplemented as follows:

 

	
(a)

	
by construing all references therein to "this Agreement" where the context admits as being references to "this Agreement as the same is amended and supplemented by the Second Supplemental Agreement dated 28 November 2012 and as the same may from time to time be further supplemented and/or amended";

 

	
(b)

	
by inserting in clause 1.1 thereof the definition set out in Clause 1.2 hereof;

 

	
(c)

	
by construing the definition of "Finance Documents" set out in clause 1.1 of the Loan Agreement to include the Second Mortgage Addendum defined in Clause 1.2 hereof;

 

	
(d)

	
by deleting the definition of "Margin" in clause 1.1 thereof and replacing it with the following:-

 

""Margin" means two point five zero per cent (2.50%) per annum;"; and

 

	
(e)

	
by deleting clause 8.2 thereof and replacing it with the following:-

 

"8.2 Repayment Dates. The first instalment shall be repaid on the date falling three (3) months after the Drawdown Date and the last instalment on the earlier of (i) the date falling ninety nine (99) months after the Drawdown Date and (ii) 30 June 2017.".

 

	
5.2

	
The parties agree that with effect from and including the repayment instalment due on 28 September 2012, the outstanding Loan shall be repaid by twenty (20) consecutive quarterly instalments, the first eight (8) of which shall be in the amount of US$350,000 each and the next twelve (12) of which shall be in the amount of US$1,000,000 each and by a balloon payment in the amount of US$700,000 payable together with the final quarterly instalment. Clause 8.1 of the Loan Agreement shall be construed accordingly.

 

	
5.3

	
The parties agree that the provisions of Clauses 12.7 (financial covenants) and 15.1 (security cover) of the Loan Agreement shall be waived in each case until 31 December 2014. Thereafter, with effect from 1 January 2015:

 

	
(a)

	
the relevant amount for the purposes of Clause 12.7(c) of the Loan Agreement shall be $500,000 per Fleet Vessel; and

 

	
(b)

	
the relevant Leverage Ratio for the purposes of Clause 12.7(d) of the Loan Agreement shall be 0.8:1.

 

For the avoidance of doubt, any shortfall in the security cover percentage under Clause 15.1 and any breach of Clause 12.7, as may have occurred prior to the date of this Second Supplemental Agreement is hereby waived

 

	
5.4

	
For the avoidance of doubt, the parties confirm that the minimum liquidity requirement under Clause 12.5 of the Loan Agreement shall remain at $750,000.

 

	
6

	
CONTINUANCE OF LOAN AGREEMENT AND FINANCE DOCUMENTS

 

	
6.1

	
Save for the alterations to the Loan Agreement made or to be made pursuant to this Second Supplemental Agreement and such further modifications (if any) thereto as may

 

 

  

4

  

	
 

	
be necessary to make the same consistent with the terms of this Second Supplemental Agreement, the Loan Agreement shall remain in full force and effect and the security constituted by the Finance Documents shall continue and remain valid and enforceable in all respects.

 

	
7

	
FEES AND EXPENSES

 

	
7.1

	
The Borrower agrees to pay to the Creditor Parties upon demand and from time to time all costs, charges and expenses (including legal fees and VAT, if applicable) incurred by the Creditor Parties in connection with the preparation, negotiation, execution and (if required) registration of, or preservation of rights under or the enforcement or attempted enforcement of, the Loan Agreement, the Finance Documents, this Second Supplemental Agreement or otherwise in connection with the Loan or any part thereof.

 

	
8

	
NOTICES

 

	
8.1

	
The provisions of clause 28 (Notices) of the Loan Agreement shall apply to this Second Supplemental Agreement as if the same were set out herein in full, provided that all notices to be sent to The Governor and Company of the Bank of Ireland as a Lender, the Swap Bank, the Agent and the Security Trustee shall henceforth be sent as follows (and the provisions of clause 28 of the Loan Agreement and the relevant provisions of the Master Agreement and the other Finance Documents shall be amended accordingly):

 

The Governor and Company of

the Bank of Ireland

1st Floor,

2 Burlington Plaza

Burlington Road

Dublin 4

Ireland

Fax No.+ 353 7662 44655

 

	
9

	
APPLICABLE LAW

 

	
9.1

	
This Second Supplemental Agreement (and any non contractual obligations connected with it) shall be governed by and construed in accordance with English law.

 

	
9.2

	
Subject to Clause 9.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Second Supplemental Agreement.

 

	
9.3

	
Clause 9.2 is for the exclusive benefit of the Creditor Parties which reserve the right:

 

	
(a)

	
to commence proceedings in relation to any matter which arises out of or in connection with this Second Supplemental Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and

 

 

	
(b)

	
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

 

The Borrower shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Second Supplemental Agreement.

 

 

  

5

  

	
9.4

	
The Borrower irrevocably appoints HTD Services Limited at its office for the time being, presently at Irongate House, Duke's Place, London EC3A 7HX, England to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Second Supplemental Agreement.

 

	
9.5

	
Nothing in this Clause 9 shall exclude or limit any right which the Creditor Parties 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.

 

	
9.6

	
In this Clause 9, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure.

 

	
10

	
THIRD PARTY RIGHTS

 

	
10.1

	
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 Second Supplemental Agreement.

 

IN WITNESS WHEREOF the parties hereto have caused this Second Supplemental Agreement to be duly executed the day and year first above written.

 

 

  

6

  

EXECUTION PAGES

 

 

	
BORROWER

	  	  	  
	  	  	  	  
	
SIGNED by

	  	  	  
	
Anastassios Gabrielides & George Skrimizeas

	
)

	  	/s/ Anastassios Gabrielides              /s/ George Skrimizeas
	
for and on behalf of

	
)

	  	  
	
PARAGON SHIPPING INC.

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	
LENDERS

	  	  	  
	  	  	  	  
	
SIGNED by

	  	  	  
	
Jeremy Watson

	
)

	  	 /s/ Illegible
	
for and on behalf of

	
)

	  	  
	
THE GOVERNOR AND

	
)

	  	  
	
COMPANY OF THE BANK OF

	
)

	  	  
	
IRELAND

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	/s/ Christina Giagka  	  	  	  
	  	  	  	  
	
ARRANGER

	  	  	  
	  	  	  	  
	
SIGNED by

	  	  	  
	
Jeremy Watson

	
)

	  	 /s/ Illegible 
	
for and on behalf of

	
)

	  	  
	
THE GOVERNOR AND

	
)

	  	  
	
COMPANY OF THE BANK OF

	
)

	  	  
	
IRELAND

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	 /s/ Christina Giagka 	  	  	  
	  	  	  	  
	
AGENT

	  	  	  
	  	  	  	  
	
SIGNED by

	  	  	  
	
Jeremy Watson

	
)

	  	 /s/ Illegible 
	
for and on behalf of

	
)

	  	  
	
THE GOVERNOR AND

	
)

	  	  
	
COMPANY OF THE BANK OF

	
)

	  	  
	
IRELAND

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	 /s/ Christina Giagka 	  	  	  
	  	  	  	  

  

7

  

	
SECURITY TRUSTEE

	  	  	  
	  	  	  	  
	
SIGNED by

	  	  	  
	
Jeremy Watson

	
)

	  	 /s/ Illegible 
	
for and on behalf of

	
)

	  	  
	
THE GOVERNOR AND

	
)

	  	  
	
COMPANY OF THE BANK OF

	
)

	  	  
	
IRELAND

	
)

	  	  
	
in the presence of:

	
)

	  	  
	  	  	  	  
	  	  	  	  
	
/s/ Christina Giagka

	  	  	  
	
CHRISTINA GIAGKA

	  	  	  
	
CONSTANT & CONSTANT

	  	  	  
	
2, II MERARCHIAS STREET

	  	  	  
	
PIRAEUS, 185 35 - GREECE

	  	  	  

  

8

  

SCHEDULE 1

 

LENDERS AND COMMITMENTS

 

 

	  	  	  	  	  	  	  
	
Lender

	
 

	
Lending Office

	
 

	
Commitment

	
 

	  	  	  
	
The Governor and Company of the Bank of Ireland

	
 

	
Head Office

40 Mespil Road

Dublin 4

Ireland

	
 

	
$

	
30,000,000

	
 

 

 

  

9

  

SCHEDULE 2

 

SWAP BANKS

 

 

	  	  	  
	
Swap Bank

	
 

	
Booking Office

	  	  
	
The Governor and Company of the Bank of Ireland

	
 

	
Colvill House

Talbot Street

	  	
 

	
Dublin 1

	  	
 

	
Ireland

 

 

  

10

  

SCHEDULE 3

 

FORM OF CONFIRMATION

 

[                    ] 2012

 

We hereby confirm and acknowledge we have read and understood the terms and conditions of the Second Supplemental Agreement dated [                    ] 2012 (the "Second Supplemental Agreement") to the Loan Agreement dated 30 March 2009 as amended by a supplemental agreement dated 23 March 2010 and the side letters dated 23 December 2011 and 27 September 2012 (together, the "Loan Agreement") made between (i) Paragon Shipping Inc. as borrower (the "Borrower"), (ii) the banks and financial institutions listed in schedule 1 therein as lenders, (iii) the banks and financial institutions listed in schedule 2 therein as swap banks and (iv) The Governor and Company of the Bank of Ireland as arranger, agent and security trustee, and agree in all respects to the same and confirm that the Finance Documents (as defined in the Loan Agreement) to which we are a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrower under the Loan Agreement (as amended by the Second Supplemental Agreement).

 

 

	  	  
	

 

	  
	
[                    ]

	  

 

 

SKNYC1:1375470.1

  

11d1375472_ex10-35.htm

Exhibit 10.35

F23.119

 

DATED 30 November 2012

 

ERIS SHIPPING S.A.

(as borrower)

 

-and-

 

PARAGON SHIPPING INC.

(as guarantor)

 

-and-

 

HSBC BANK plc

(as lender)

	  
	  
	
 

FIRST SUPPLEMENTAL AGREEMENT TO

A US$22,000,000 SECURED LOAN

FACILITY

AGREEMENT DATED 02 JULY 2010

	  
	  
	  

 

 

  

  

  

CONTENTS

 

 

	  	  	  	  	  	  	  
	
 

	
 

	
 

	
 

	
Page

	
 

	  	  	  
	
1

	
 

	
Interpretation

	
 

	
 

	
3

	
 

	  	  	  
	
2

	
 

	
Conditions

	
 

	
 

	
4

	
 

	  	  	  
	
3

	
 

	
Representations and Warranties

	
 

	
 

	
6

	
 

	  	  	  
	
4

	
 

	
Amendments to the Loan Agreement and the Security Documents

	
 

	
 

	
6

	
 

	  	  	  
	
5

	
 

	
Confirmation and Undertaking

	
 

	
 

	
12

	
 

	  	  	  
	
6

	
 

	
Communications, Law and Jurisdiction

	
 

	
 

	
13

	
 

	  	  
	
Schedule

	
 

	
 

	
9

	
 

	 	 	 	 	 
	  	
 

	
Effective Date Confirmation

	
 

	
 

	
9

	
 

  

  

  

FIRST SUPPLEMENTAL AGREEMENT

 

Dated: 30 November 2012

 

BETWEEN:

 

	
(1)

	
ERIS SHIPPING S.A., a company incorporated according to the law of the Republic of Liberia whose registered address is at 80 Broad Street, Monrovia, Republic of Liberia (the "Borrower"); and

 

	
(2)

	
PARAGON SHIPPING INC., a company incorporated according to the law of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 acting as guarantor and managers (the "Guarantor"); and

 

	
(3)

	
HSBC BANK plc, having its registered office at 8 Canada Square, London, E14 5HQ, England, acting through its office at 93 Akti Miaouli, GR-185 38 Piraeus, Greece (the "Lender").

 

SUPPLEMENTAL TO a secured loan facility agreement dated 02 July 2010 (the "Loan Agreement") made between the Borrower and the Lender, on the terms and subject to the conditions of which the Lender agreed to advance to the Borrower an aggregate amount not exceeding twenty two million Dollars ($22,000,000) (the "Loan").

 

WHEREAS:

 

	
(A)

	
The Borrower has requested the consent of the Lender to, amongst other things amend clauses 11.13 (Additional Security) and 13.2 (Financial covenants) of the Loan Agreement as more particularly described in this First Supplemental Agreement.

 

	
(B)

	
In consideration of the Lender consenting to the above amendments, the Borrower has agreed to amend the definition of Margin contained in clause 1.1 of the Loan Agreement.

 

	
(C)

	
Accordingly, the Borrower, the Guarantor and the Lender have agreed to amend and supplement the Loan Agreement on the terms and conditions set forth in this First Supplemental Agreement.

 

	
(D)

	
The outstanding balance of the Loan on the date of this First Supplemental Agreement is eighteen million four hundred thousand Dollars ($18,400,000).

 

 

  

2

  

IT IS AGREED THAT:

 

	
1

	
Interpretation

 

	
 

	
1.1

	
In this First Supplemental Agreement:-

 

	
 

	
1.1.1

	
"Additional Security Documents" means this First Supplemental Agreement, the English Account Charge, the Greek Account Charge and the Side Letter and "Additional Document" means any one of them.

 

	
 

	
1.1.2

	
"English Account Charge" means the deed of charge in respect of the Earnings Account to be executed by the Borrower as security for the payment of the Indebtedness, in such form and containing such terms and conditions as the Lender shall require referred to in clause 11.1.6 (Security Documents) of the Loan Agreement.

 

	
 

	
1.1.3

	
"Greek Account Charge" means the first priority accounts assignment, pledge and charge agreement or agreements in respect of the Earnings Account to be executed by the Borrower as security for the payment of the Indebtedness, in such form and containing such terms and conditions as the Lender shall require referred to in clause 11.1.5 (Security Documents) of the Loan Agreement.

 

	
 

	
1.1.4

	
"Effective Date" means the date of this First Supplemental Agreement.

 

	
 

	
1.1.5

	
"First Supplemental Agreement" means the Agreement contained herein.

 

	
 

	
1.1.6

	
"Side Letter" means the side letter entered or to be entered between the Borrower, the Guarantor and the Lender.

 

	
 

	
1.2

	
In this First Supplemental Agreement "Security Parties" means the Borrower and the Guarantor and "Security Party" means any one of them.

 

	
 

	
1.3

	
All words and expressions defined in the Loan Agreement shall have the same meaning when used in this First Supplemental Agreement unless the context otherwise requires, and clause 1.2 of the Loan Agreement shall apply to the interpretation of this First Supplemental Agreement as if it were set out in full.

 

 

  

3

  

	
2

	
Conditions

 

	
 

	
2.1

	
Conditions Precedent As conditions for the agreement of the Lender to the requests specified in Recital (A) above and for the effectiveness of Clause 4, the Borrower and the Guarantor shall deliver or cause to be delivered to or to the order of the Lender the following documents and evidence:

 

	
 

	
2.1.1

	
a certificate from a duly authorised officer of each Security Party confirming that none of the documents delivered to the Lender pursuant to clause 3.1 and schedule 1, part I, 1 (a), (c), (d), (e) and (g) of the Loan Agreement have been amended or modified in any way since the date of their delivery to the Lender, or copies, certified by a duly authorised officer of the Security Party in question as true, complete, accurate and neither amended nor revoked, of any which have been amended or modified;

 

	
 

	
2.1.2

	
the original resolution of the directors of each Security Party and the resolution of the shareholders of that Security Party (together, where appropriate, with signed waivers of notice of any directors' or shareholders' meetings) approving, and authorising or ratifying the execution of, this First Supplemental Agreement, the English Account Charge, the Greek Account Charge and the Side Letter (as applicable) and any further documents to be executed by each Security Party pursuant to this First Supplemental Agreement, the English Account Charge, the Greek Account Charge and the Side Letter;

 

	
 

	
2.1.3

	
a legalised power of attorney of each Security Party under which this First Supplemental Agreement, the English Account Charge, the Greek Account Charge and the Side Letter and any documents required pursuant to them are to be executed by that Security Party;

 

	
 

	
2.1.4

	
a certificate of good standing in respect of each Security Party;

 

	
 

	
2.1.5

	
the Additional Security Documents duly executed together with all other documents required by any of them;

 

 

  

4

  

	
 

	
2.1.6

	
confirmation satisfactory to the Lender that all legal opinions required by the Lender will be given substantially in the form required by the Lender;

 

	
 

	
2.1.7

	
evidence that the process agent referred to in clause 22.5.1 of the Loan Agreement and any process agent appointed under any other Finance Document has accepted its appointment as agent for service of process in relation to any proceedings before the English Courts in connection with the Additional Security Documents;

 

	
 

	
2.1.8

	
on the Effective Date summary table of amendments similar to those contained in this First Supplemental Agreement, also contained in other loan agreements of the Group agreed or to be agreed no later than sixty (60) days from the Effective Date;

 

	
 

	
2.1.9

	
any further debt incurred by the Group, during the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive), is subject to such Lender's approval, such further debt to exclude existing, committed but undrawn (including committed pending documentation) and replacement loan facilities made available to the Group in respect of existing vessels and/or existing newbuildings of the Group on the Effective Date; and

 

	
 

	
2.1.10

	
a copy of any other consent, licence, approval, authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any of the Relevant Documents or for the validity and enforceability of any of the Relevant Documents.

 

	
 

	
2.2

	
Conditions Subsequent The Borrower undertakes to deliver to the Lender within ninety (90) days after the date of this First Supplemental Agreement but by no later than 28 February 2013, evidence satisfactory to the Lender in its discretion that the Guarantor has increased its equity by ten million Dollars ($10,000,000).

 

	
 

	
2.3

	
No waiver If any of the documents and evidence required by Clauses 2.1 and 2.2 have not been delivered to or to the order of the Lender in accordance therewith, the Borrower undertakes to deliver all outstanding documents and evidence to or to the

 

 

  

5

  

	
 

	
order of the Lender no later than the date specified by the Lender, and delivery on such later date shall not be taken as a waiver of the Lender's right to require production of all the documents and evidence required by Clauses 2.1 and 2.2.

 

	
 

	
2.4

	
All documents and evidence delivered to the Lender pursuant to this Clause shall:

 

	
 

	
2.4.1

	
be in form and substance acceptable to the Lender;

 

	
 

	
2.4.2

	
be accompanied, if required by the Lender, by translations into the English language, certified in a manner acceptable to the Lender; and

 

	
 

	
2.4.3

	
if required by the Lender, be certified, notarised, legalised or attested in a manner acceptable to the Lender.

 

	
3

	
Representations and Warranties

 

Each of the representations and warranties contained in clause 12 of the Loan Agreement and clause 2 of the Guarantee shall be deemed repeated by the Borrower and the Guarantor respectively at the date of this First Supplemental Agreement and at the Effective Date, by reference to the facts and circumstances then pertaining, as if references to the Finance Documents included this First Supplemental Agreement (save that in the case of clause 12.1.9 of the Loan Agreement such representation and warranty shall be subject to the Event of Default previously notified to the Lender in respect of clause 14.1.4 of the Loan Agreement, which the Lender has agreed to waive subject to terms and conditions of a side letter of even date with this First Supplemental Agreement).

 

	
4

	
Amendments to the Loan Agreement and the Security Documents

 

With effect from the Effective Date:-

 

	
 

	
4.1

	
the definitions contained in Clause 1.1 of this First Supplemental Agreement (other than the definition of "Effective Date") shall be added to clause 1.1 of the Loan Agreement in alphabetical order;

 

 

	
 

	
4.2

	
the definition of "Earnings Account" shall be deleted and replaced as follows:-

 

"Earnings Account" means a bank account opened in the name of the Borrower with the Lender at the Piraeus branch and a bank account opened or to be opened in the name of the Borrower with the Lender with the London branch and both accounts designated "Eris Shipping S.A. – Earnings Account".;

  

6

  

	  	
4.3

	
the definition of "Margin" shall be deleted and replaced as follows:-

 

""Margin" means, for the period from 30 November 2012 until 31 December 2013 (inclusive), three per cent (3%) per annum and, for the period from 1 January 2014 and for the remainder of the Facility Period, two point six per cent (2.6%) per annum.";

 

	
 

	
4.4

	
the definition of "Security Documents" set out in clause 1.1 of the Loan Agreement shall be construed to include the Additional Security Documents;

 

	
 

	
4.5

	
the following sub-clauses 11.1.5 and 11.1.6 shall be added to the Loan Agreement:-

 

	
 

	
"11.1.5

	
a first priority Greek accounts assignment, pledge and charge agreement over the Earnings Account and all amounts from time to time standing to the credit of the Earnings Account.;

 

	
 

	
11.1.6

	
a deed of charge over the Earnings Account and all amounts from time to time standing to the credit of the Earnings Account."; and

 

	
 

	
11.1.7

	
a side letter from the Borrower, the Guarantor and the Lender.

 

	
 

	
4.6

	
in line one of clause 11.4 of the Loan Agreement (Application of Earnings Account) the words "Clause 11.5" shall be deleted and replaced with the words "Clauses 11.5 and 11.6";

 

	
 

	
4.7

	
clause 11.5 (Minimum Free Liquidity) of the Loan Agreement shall be deleted and replaced with the following:-

 

	
 

	
"11.5

	
Minimum Free Liquidity The Borrower shall maintain credited and pledged in favour of the Lender in the Earnings Account at all times (free of any Encumbrances (other than in favour of the Lender) or third party rights of set off) a minimum aggregate positive account balance of not less than five hundred thousand Dollars ($500,000) at all times throughout the Facility Period. The Lender shall have the right to transfer such Minimum Free Liquidity amount to any other branch of its group at its absolute discretion and the Borrower will co-operate fully with the Lender in

 

 

  

7

  

	
 

	
connection with such transfer and the Borrower will execute and procure the execution of any further documents as the Lender may in its absolute discretion consider necessary or desirable.";

 

	
 

	
4.8

	
clause 11.13 of the Loan Agreement shall be deleted and replaced with the following:-

 

	
 

	
"11.13

	
Additional security If at any time the aggregate of the Market Value and the value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Lender (in the case of other charged assets), and determined by the Lender in its discretion (in all other cases)) for the time being provided to the Lender under this Clause 11.13 is less than (a) for the period commencing on the signing date of this Agreement up to and including 29 November 2012 (i) one hundred and thirty per cent (130%) of the amount of the Loan then outstanding or if there are any Master Agreement Liabilities (ii) one hundred and thirty five per cent (135%) of the aggregate of the amount of the Loan then outstanding and the amount certified by the Lender to be the amount which would be payable by the Borrower to the Lender under the Master Agreement if an Early Termination Date were to occur at that time, (b) for the period commencing on 30 November 2012 up to and including 31 December 2013 one hundred and five per cent (105%) of the aggregate of (i) the amount of the Loan then outstanding and (ii) the amount certified by the Lender to be the amount which would be payable by the Borrower to the Lender under the Master Agreement if an Early Termination Date where to occur at that time, (c) for the period commencing on 1 January 2014 up to and including 31 December 2014 one hundred and ten per cent (110%) of the aggregate of (ii) the amount of the Loan then outstanding and (ii) the amount certified by the Lender to be the amount which would be payable by the Borrower to the Lender under the Master Agreement if an Early Termination Date where to occur at that time and (d) for the period commencing on 1 January 2015 and throughout the remainder of the Facility Period one hundred and twenty per cent (120%) of the aggregate of (i) the amount of the Loan then outstanding and (ii) the amount certified by the Lender to be the amount which would be payable by the Borrower to the Lender under the Master Agreement if an Early Termination Date where to occur at that time, the Borrower shall, within thirty (30) days of the Lender's request, at the Borrower's option:

 

	
 

	
11.13.1

	
pay to the Lender or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Lender as additional security for the payment of the Indebtedness; or

 

 

  

8

  

	
 

	
11.13.2

	
give to the Lender other additional security in amount and form acceptable to the Lender in its discretion; or

 

	
 

	
11.13.3

	
prepay the Loan in the amount of the shortfall.

 

Clauses 5.3 (Reborrowing), 6.2 (Voluntary prepayment of Loan) and 6.4 (Restrictions) shall apply, mutatis mutandis, to any prepayment made under this Clause 11.13 and the value of any additional security provided shall be determined as stated above.";

 

	
 

	
4.9

	
the following clause 12.1.16 shall be added to the Loan Agreement:-

 

	
 

	
"12.1.16

	
The Borrower has obtained or shall obtain no later than sixty (60) days from the Effective Date consent from all other lenders of the Group, that they have acquired approval in respect of amendments similar to those contained in the First Supplemental Agreement, also contained in other loan agreements of the Group.";

 

	
 

	
4.10

	
clause 13.2 (Financial covenants) of the Loan Agreement shall be deleted and replaced with the following:-

 

"Financial covenants The Borrower shall procure that the Guarantor shall throughout the Facility Period (on a Group basis) comply with the following financial covenants, to be assessed quarterly on the basis of the Accounting Information:-"

 

	
 

	
"(a)

	
the ratio of Total Liabilities to EBITDA shall not exceed 7:1, except during the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive);"

  

9

  

 

	
 

	
(b)

	
the ratio of EBITDA to Group Interest Expense shall be not less than 2.5:1, except during the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive);"

 

	
 

	
(c)

	
(i) for the period commencing on the Drawdown Date and ending on 29 November 2012 (inclusive), the Market Value Adjusted Net Worth shall be at least one hundred million Dollars ($100,000,000), (ii) for the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive), the Market Value Adjusted Net Worth shall be at least fifty million Dollars ($50,000,000) and (iii) for the period commencing on 1 January 2014 and for the remainder of the Facility Period, the Market Value Adjusted Net Worth shall be at least one hundred million Dollars ($100,000,000), in each case assessed on the basis of the Value Adjusted Total Assets;" and

 

	
 

	
(d)

	
(i) for the period commencing on the Drawdown Date and ending on 29 November 2012 (inclusive), the ratio of Total Liabilities to Value Adjusted Total Assets shall be not less than 0.75:1, (ii) for the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive), the ratio of Total Liabilities to Value Adjusted Total Assets shall not be applicable and (ii) from 1 January 2014 and for the remainder of the Facility Period, the ratio of Total Liabilities to Value Adjusted Total Assets shall be not less than 0.80.";

 

	
 

	
4.11

	
in clause 13.2 (Value Adjusted Total Assets) of the Loan Agreement paragraph (c) shall be deleted and replaced with the following:-

 

	
 

	
"(c)

	
the total market value of all assets of the Group comprising all items of the Group as shown in the balance sheet adjusted to their prevailing market value on a quarterly basis including, without limitation, the market value of any existing vessels of the Group, the resale value of any newbuilding contract measured on a novation basis and the value of any investments in publicly quoted listed affiliates.";

 

	
 

	
4.12

	
the following clause 13.3.21 shall be added to the Loan Agreement:-

  

10

  

	  	
"13.3.21

	
The Borrower shall procure that no later than sixty (60) days from the Effective Date all other lenders of the Group will provide evidence that they have acquired approval in respect of amendments similar to those contained in the First Supplemental Agreement, also contained in other loan agreements of the Group".;

 

	
 

	
4.13

	
the following clause 13.3.22 shall be added to the Loan Agreement:-

 

	
 

	
"13.3.22

	
The Borrower shall procure during the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive), that the Guarantor shall not incur any further debt unless it has obtained the Lender's prior written approval, such approval shall not be required in respect of existing or committed (including committed but undocumented) loan facilities made available to the Group in respect of existing vessels and/or existing newbuildings of the Group or in respect of the refinancing of existing or committed loan facilities made available to the Group".;

 

	
 

	
4.14

	
clause 18.2.2 of the Loan Agreement shall be deleted and replaced with the following:-

 

	
 

	
"18.2.2

	
in the case of the Lender, European Corporate & Structured Banking Centre, L28, 8 Canada Square, London E14 5HQ, United Kingdom (fax no: +44 207 991 4619) marked for the attention of Mr Alastair Muir."; and

 

	
 

	
4.15

	
clause 6.8 of the Guarantee shall be deleted and replaced with the following:-

 

"The Guarantor shall, throughout the Facility Period on a Group basis, comply with the following financial covenants, to be assessed quarterly on the basis of the Accounting Information:-

 

	
 

	
"(a)

	
the ratio of Total Liabilities to EBITDA shall not exceed 7:1, except during the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive);"

 

	
 

	
(b)

	
the ratio of EBITDA to Group Interest Expense shall be not less than 2.5:1, except during the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive);"

 

 

  

11

  

	
 

	
(c)

	
(i) for the period commencing on the Drawdown Date and ending on 29 November 2012 (inclusive), the Market Value Adjusted Net Worth shall be at least one hundred million Dollars ($100,000,000), (ii) for the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive), the Market Value Adjusted Net Worth shall be at least fifty million Dollars ($50,000,000) and (iii) for the period commencing on 1 January 2014 and for the remainder of the Facility Period, the Market Value Adjusted Net Worth shall be at least one hundred million Dollars ($100,000,000), in each case assessed on the basis of the Value Adjusted Total Assets;"; and

 

	
 

	
(d)

	
(i) for the period commencing on the Drawdown Date and ending on 29 November 2012 (inclusive), the ratio of Total Liabilities to Value Adjusted Total Assets shall be not less than 0.75:1, (ii) for the period commencing on 30 November 2012 and ending on 31 December 2013 (inclusive), the ratio of Total Liabilities to Value Adjusted Total Assets shall not be applicable and (ii) from 1 January 2014 and for the remainder of the Facility Period, the ratio of Total Liabilities to Value Adjusted Total Assets shall be not less than 0.80.".

 

	
5

	
Confirmation and Undertaking

 

	
 

	
5.1

	
Each of the Security Parties confirms that all of its respective obligations under or pursuant to each of the Security Documents to which it is a party remain in full force and effect, despite the amendments to the Loan Agreement and the Security Documents made in this First Supplemental Agreement, as if all references in any of the Security Documents to the Loan Agreement and Security Documents (however described) were references to the Loan Agreement and the Security Documents as amended and supplemented by this First Supplemental Agreement.

 

	
 

	
5.2

	
The definition of any term defined in any of the Security Documents shall, to the extent necessary, be modified to reflect the amendments to the Loan Agreement and the Security Documents made in this First Supplemental Agreement.

 

 

  

12

  

	
6

	
Communications, Law and Jurisdiction

 

The provisions of clauses 18 (Notices) and 22 (Law and Jurisdiction) of the Loan Agreement shall apply to this First Supplemental Agreement as if they were set out in full and as if references to the Loan Agreement were references to this First Supplemental Agreement and references to the Borrower were references to the Security Parties.

 

IN WITNESS of which the parties to this First Supplemental Agreement have executed this First Supplemental Agreement as a deed the day and year first before written.

 

 

	
SIGNED and DELIVERED

	
)

	  	  
	
as

	
)

	  	  
	
a DEED by

	
)

	  	  
	
ERIS SHIPPING S.A.

	
)

	  	 /s/ Maria Stefanou 
	
acting by

	
)

	  	  
	  	
)

	  	  
	
its duly authorised attorney-in-

	
)

	  	  
	
fact

	  	  	  
	
in the presence of:

	  	  	  
	  	  	  	  
	  	  	  	  
	
SIGNED and DELIVERED

	
)

	  	  
	
as

	
)

	  	  
	
a DEED by

	
)

	  	  
	
PARAGON SHIPPING INC.

	
)

	  	 /s/ George Skrimizeas            /s/ Maria Stefanou 
	
acting by

	
)

	  	  
	  	
)

	  	  
	
its duly authorised attorney-in-

	
)

	  	  
	
fact

	  	  	  
	
in the presence of:

	  	  	  
	  	  	  	  
	  	  	  	  
	
SIGNED and DELIVERED

	
)

	  	  
	
as

	
)

	  	  
	
a DEED by

	
)

	  	  
	
HSBC BANK plc

	
)

	  	 /s/ Illegible 
	
acting by

	
)

	  	  
	  	
)

	  	  
	
its duly authorised attorney-in-

	
)

	  	  
	
fact

	  	  	  
	
in the presence of:

	  	  	  
	  	  	  	  
	  	  	  	  

 

SKNYC1:1375472.1

  

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}]]