exv10w1






Exhibit 10.1




Private and Confidential




DATED 20 August 2010




FAITH MARINE LTD.

as Borrower



DNB NOR BANK ASA

as Lenders



DNB NOR BANK ASA

as Swap Bank, Agent, Account Bank

and Security Trustee



 





FACILITY AGREEMENT FOR A USD 40,000,000



TERM LOAN FACILITY



 










 









 





Index




	 	 	 
	Clause	 	Page
	 
	1 Purpose, Definitions, Construction & Majority Lenders

	 	1
	 
	 	 
	2 The Available Commitment and Cancellation

	 	19
	 
	 	 
	3 Interest and Interest Periods

	 	22
	 
	 	 
	4 Repayment and Prepayment

	 	25
	 
	 	 
	5 Fees and Expenses

	 	28
	 
	 	 
	6 Payments and Taxes; Accounts and Calculations

	 	29
	 
	 	 
	7 Representations and Warranties

	 	33
	 
	 	 
	8 Undertakings

	 	39
	 
	 	 
	9 Conditions

	 	50
	 
	 	 
	10 Events of Default

	 	52
	 
	 	 
	11 Indemnities

	 	58
	 
	 	 
	12 Unlawfulness and Increased Costs

	 	59
	 
	 	 
	13 Application of moneys, set off, pro-rata payments and miscellaneous

	 	61
	 
	 	 
	14 Accounts

	 	65
	 
	 	 
	15 Assignment, transfer and lending office

	 	66
	 
	 	 
	16 Agent and Security Trustee

	 	70
	 
	 	 
	17 Notices and other matters

	 	85
	 
	 	 
	18 Governing law

	 	87
	 
	 	 
	20 Jurisdiction

	 	87
	 
	 	 
	Schedule 1 The Lenders and their Commitments

	 	
	 
	 	 
	Schedule 2 Form of Drawdown Notice

	 	
	 
	 	 
	Schedule 3 Conditions precedent

	 	
	 
	 	 
	Schedule 4 Form of Transfer Certificate

	 	






 









 






	 	 	 
	Clause	 	Page
	 
	Schedule 5 Form of Trust Deed

	 	
	 
	 	 
	Schedule 6 Mandatory Costs

	 	
	 
	 	 
	Schedule 7 Indenture Extract/Interest Expenses

	 	
	 
	 	 
	Schedule 8 Indenture Excerpt

	 	
	 
	 	 
	Schedule 9 Form of Compliance Certificate

	 	
	 
	 	 
	Schedule 10 Vessel Details

	 	 
	 
	 	 
	Execution Pages

	 	91






 









 





THIS AGREEMENT dated 20th August 2010 is made BY and BETWEEN:





	(1)	 	FAITH MARINE LTD. as Borrower;
	 
	(2)	 	DNB NOR BANK ASA as Lender; and
	 
	(3)	 	DNB NOR BANK ASA as Agent, Swap Bank, Account Bank and Security Trustee.





NOW IT IS HEREBY AGREED AS FOLLOWS:





	1	 	PURPOSE, DEFINITIONS, CONSTRUCTION & MAJORITY LENDERS
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions on which DnB NOR Bank ASA agrees to make
available to the Borrower a loan in the sum of up to forty million Dollars (USD
40,000,000) in up to 4 Advances, for the purpose of part-financing the purchase price of
one capesize bulk carrier being constructed by the Builder for, and will be purchased by,
the Borrower.
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	“Account Bank” means DnB NOR Bank ASA acting through its through its branch at 20 St.
Dunstan’s Hill, London EC3R 8HY, England or such other Lender as may be designated by the
Agent as the Account Bank for the purposes of this Agreement;
	 
	 	 	“Advance” means the principal amount of each drawing in respect of the Loan to be made
pursuant to Clause 2.5;
	 
	 	 	“Agent” means DnB NOR Bank ASA acting through its branch at 20 St. Dunstan’s Hill, London
EC3R 8HY, England (or of such other address as may last have been notified to the other
parties to this Agreement pursuant to clause 17.2.3) or such other person as may be
appointed as agent by the Lenders pursuant to clause 16.13;
	 
	 	 	“Approved Broker” means each of (i) H Clarkson & Co. Ltd. of St Magnus House, 3 Lower
Thames Street, London EC3R 6HE, England, (ii) Arrow Research Ltd. of Harbour House,
Chelsea Harbour, London SW10 0XE, England and (iii) Fearnleys AS of Grev Wedels Plass 9,




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	 	 	P.O. Box 1158 Sentrum, Oslo N-0107 Norway or such other reputable, independent and first
class firm of shipbrokers specialising in the valuation of vessels of the relevant type
appointed by the Agent and agreed with the Borrower;
	 
	 	 	“Banking Day” means a day on which dealings in deposits in USD are carried on in the
London Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks
are open for business in London, Piraeus and New York City (or any other relevant place of
payment under clause 6);
	 
	 	 	“Banks” means, together, the Agent, the Account Bank, the Security Trustee, the Lenders,
the Swap Bank and any Transferee Lenders;
	 
	 	 	“Borrower” means Faith Marine Ltd. having its registered office at 80 Broad Street,
Monrovia, Liberia;
	 
	 	 	“Break Costs” means the aggregate amount of all losses, premiums, penalties, costs and
expenses whatsoever certified by the Agent at any time and from time to time as having
been incurred by the Lenders or any of them in maintaining or funding their Contributions
or in liquidating or re-employing fixed deposits acquired to maintain the same as a result
of either:






	 	(a)	 	any repayment or prepayment of the Loan or any part thereof otherwise than
(i) in accordance with clause 4.1 or (ii) on an Interest Payment Date whether on a
voluntary or involuntary basis or otherwise howsoever; or
	 
	 	(b)	 	as a result of the Borrower failing or being incapable of drawing an
Advance after a relevant Drawdown Notice has been given;






	 	 	“Certified Copy” means in relation to any document delivered or issued by or on
behalf of any company, a copy of such document certified as a true, complete and up to
date copy of the original by any of the directors or officers for the time being of such
company or by such company’s attorneys or solicitors;
	 
	 	 	“Charter Assignment” means a specific assignment of the Approved Charter and any Extended
Employment Contract required to be executed hereunder by the Borrower in favour of the
Security Trustee (including any notices and/or acknowledgements and/or undertakings
associated therewith) in such form as the Agent and the Majority Lenders may require in
their sole discretion;




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	 	 	“Charter Insurance Assignment” means a first priority assignment of the Charter Insurances
executed or to be executed by such named insured as the Agent may require in favour of the
Security Trustee, in such form as the Agent and the Majority Lenders may in their sole
discretion require;
	 
	 	 	“Charter Insurances” means all policies and contracts of insurance which are from time to
time during the Facility Period in place or taken out or entered into by or for the
benefit of inter alia the Borrower and/or the Collateral Guarantor in respect of loss of
charter earnings and all benefits thereof (including claims of whatsoever nature and
return of premiums);
	 
	 	 	“Classification” means, in relation to the Vessel, the highest class available for a
vessel of her type with the Classification Society;
	 
	 	 	“Classification Society” means any IACS classification society which the Lenders shall, at
the request of the Borrower, have agreed in writing shall be treated as the classification
society in relation to the Vessel for the purposes of the Ship Security Documents;
	 
	 	 	“Collateral Charter Assignment” means a specific assignment of any Extended Employment
Contract in respect of the Collateral Vessel required to be executed hereunder by the
Collateral Guarantor in favour of the Security Trustee (including any notices and/or
acknowledgements and/or undertakings associated therewith) in such form as the Agent and
the Majority Lenders may require in their sole discretion;
	 
	 	 	“Collateral Charter Insurance Assignment” means a second priority assignment of the
Charter Insurances executed or to be executed by such named insured as the Agent may
require in favour of the Security Trustee, in such form as the Agent and the Majority
Lenders may in their sole discretion require;
	 
	 	 	“Collateral General Assignment” means, in respect of the Collateral Vessel, the second
priority deed of assignment of its earnings, insurances and requisition compensation
executed or to be executed by the Collateral Guarantor in favour of the Security Trustee
in such form as the Agent and the Majority Lenders may require in their sole discretion;
	 
	 	 	“Collateral General Assignment” means the guarantee required to be executed hereunder by
the Collateral Guarantor in such form as the Agent and the Majority Lenders may require in
their sole discretion;




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	 	 	“Collateral Guarantee” means the guarantee required to be executed hereunder by the
Collateral Guarantor in such form as the Agent and the Majority Lenders may require in
their sole discretion;
	 
	 	 	“Collateral Manager’s Undertaking” means the undertaking and assignment required to be
executed hereunder by the Manager in favour of the Security Trustee in respect of the
Collateral Vessel in such form as the Agent and the Majority Lenders may require in their
sole discretion;
	 
	 	 	“Collateral Mortgage” means, in respect of the Collateral Vessel, the second preferred
Ship mortgage thereof required to be executed hereunder by the Collateral Guarantor in
favour of the Security Trustee, each in such form as the Agent and the Majority Lenders
may require in their sole discretion;
	 
	 	 	“Commitment” means, in relation to each Lender, the sum set out opposite its name in
schedule 1 or any replacement thereof, pursuant to the terms of any relevant Transfer
Certificate as the amount which, subject to the terms of this Agreement, it is obliged to
advance to the Borrower hereunder in respect of the Loan Facility, in each case as such
amount may have been reduced and/or cancelled under this Agreement;
	 
	 	 	“Compliance Certificate” means a certificate substantially in the form set out in schedule
9 signed by the chief financial officer of the Corporate Guarantor;
	 
	 	 	“Compulsory Acquisition” means, in respect of the Vessel, requisition for title or other
compulsory acquisition including, if the Vessel is not released therefrom within the
Relevant Period, 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; “Relevant Period” means for the purposes of this definition
of Compulsory Acquisition either (i) sixty (60) days or, (ii) if relevant underwriters
confirm in writing (in terms satisfactory to the Majority Lenders) prior to the end of
such sixty (60) day period that such capture, seizure, detention or confiscation will be
fully covered by the Borrower’s war risks insurance if continuing for a further period
exceeding ten (10) calendar months, the shorter of twelve (12) months and such period at
the end of which cover is confirmed to attach;




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	 	 	“Contribution” means, at any relevant time, in relation to each Lender, the principal
amount of the Loan owing to such Lender at such time;
	 
	 	 	“Corporate Guarantee” means the guarantee required to be executed hereunder by the
Corporate Guarantor in such form as the Agent and the Majority Lenders may require in
their sole discretion;
	 
	 	 	“Cost of Funds” means the rate per annum determined by the Agent to be the rate at which
deposits in Dollars are offered to the Agent by leading banks in the London Interbank
Market at the Agent’s request at or about 11.00 a.m. (London time) on the day on which
quotations would ordinarily be given by leading banks in the London Interbank Market for
deposits in the relevant currency to which such rate is to be determined for delivery on
the first day of that period;
	 
	 	 	“Credit Support Document” has in relation to the Master Agreement, the meaning given
to that expression therein;
	 
	 	 	“Credit Support Provider” means any person defined as such in the Master Agreement;
	 
	 	 	“Default” means any Event of Default or any event or circumstance which with the giving of
notice or lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
	 
	 	 	“Delivery Date” means the date on which title to and possession of the Vessel is
transferred from the Builder to the Borrower which is expected to be 15 March 2011;
	 
	 	 	“Dollars” and “USD” mean the lawful currency of the USA and in respect of all
payments to be made under any of the Security Documents means funds which are for same day
settlement in the New York Clearing House Interbank Payments System (or such other US
dollar funds as may at the relevant time be customary for the settlement of international
banking transactions denominated in US dollars);
	 
	 	 	“Drawdown Date” means, in relation to each Advance, any date being a Banking Day falling
during the Drawdown Period, on which the relevant Advance is, or is to be, made available;
	 
	 	 	“Drawdown Notice” means, in relation to each Advance, a notice substantially in the form
of schedule 2;




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	 	 	“Drawdown Period” means the period commencing on the Execution Date and ending on 31 March
2011 or on the date on which the Commitment is finally cancelled or no longer available
under the terms of this Agreement;
	 
	 	 	“Earnings Account” means an interest bearing USD Account required to be opened hereunder
with the Account Bank in the name of the Manager designated “Navios — Earnings Account”
and includes any other account designated in writing by the Agent to be the Earnings
Account for the purposes of this Agreement;
	 
	 	 	“Earnings Account Pledge” means a first priority charge required to be executed hereunder
between the Manager and the Security Trustee in respect of the Earnings Account in such
form as the Agent and the Majority Lenders may require in their sole discretion;
	 
	 	 	“Encumbrance” means any mortgage, charge, pledge, lien, hypothecation, assignment, title
retention, preferential right, option, trust arrangement or security interest or other
encumbrance, security or arrangement conferring howsoever a priority of payment in respect
of any obligation of any person;
	 
	 	 	“Environmental Affiliate” means any agent or employee of the Borrower, the Manager or any
other Group Member or any other person having a contractual relationship with the
Borrower, the Manager or any other Group Member in connection with any Relevant Ship or
its operation or the carriage of cargo and/or passengers thereon and/or the provision of
goods and/or services on or from any Relevant Ship;
	 
	 	 	“Environmental Approval” means any consent, authorisation, licence or approval of any
governmental or public body or authorities or courts applicable to any Relevant Ship or
its operation or the carriage of cargo and/or passengers thereon and/or the provision of
goods and/or services on or from any Relevant Ship required under any Environmental Law;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable
Government Entity alleging breach of, or non-compliance with, any Environmental Laws or
Environmental Approvals or otherwise howsoever relating to or arising out of an
Environmental Incident or (ii) any claim by any other third party howsoever relating to or
arising out of an Environmental Incident (and, in each such case, “claim” shall include a
claim for damages and/or direction for and/or enforcement relating to clean-up costs,
removal, compliance, remedial action or otherwise) or (iii) any Proceedings arising from
any of the foregoing;




6









 






	 	 	“Environmental Incident” means, regardless of cause, (i) any actual or threatened
discharge or release of Environmentally Sensitive Material from any Relevant Ship; (ii)
any incident in which Environmentally Sensitive Material is discharged or released from a
vessel other than a Relevant Ship which involves collision between a Relevant Ship and
such other vessel or some other incident of navigation or operation, in either case, where
the Relevant Ship, the Manager and/or the Borrower and/or the relevant Group Member and/or
the relevant Operator are actually, contingently or allegedly at fault or otherwise
howsoever liable (in whole or in part) or (iii) any incident in which Environmentally
Sensitive Material is discharged or released from a vessel other than a Relevant Ship and
where such Relevant Ship is actually or potentially liable to be arrested as a result
and/or where the Manager and/or the Borrower and/or other Group Member and/or the relevant
Operator are actually, contingently or allegedly at fault or otherwise howsoever liable;
	 
	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements whatsoever
relating to pollution, human or wildlife well-being or protection of the environment
(including, without limitation, the United States Oil Pollution Act of 1990 and any
comparable laws of the individual States of the USA);
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products or any other products or
substance which are polluting, toxic or hazardous or any substance the release of which
into the environment is howsoever regulated, prohibited or penalised by or pursuant to any
Environmental Law;
	 
	 	 	“Event of Default” means any of the events or circumstances listed in clause 10.1;
	 
	 	 	“Execution Date” means the date on which this Agreement has been executed by all the
parties hereto;
	 
	 	 	“Existing Loan Agreement” means the loan agreement dated 28 August 2009 as amended by a
supplemental agreement dated 22 December 2009 made between (inter alia) the Collateral
Guarantor and the Banks;
	 
	 	 	“Extended Employment Contract” means any time charterparty, contract of affreightment or
other contract of employment of the Vessel (including the entry of the Vessel in any pool)
which has a tenor exceeding twelve (12) months (including any options to renew or extend
such tenor);




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	 	 	“Facility Period” means the period starting on the date of this Agreement and ending on
such date as all obligations whatsoever of all of the Security Parties under or pursuant
to the Security Documents whensoever arising, actual or contingent, have been irrevocably
paid, performed and/or complied with;
	 
	 	 	“Flag State” means Panama or any other country acceptable to the Lenders;
	 
	 	 	“General Assignment” means, in respect of the Vessel, the deed of assignment of its
earnings, insurances and requisition compensation executed or to be executed by the
Borrower in favour of the Security Trustee in such form as the Agent and the Majority
Lenders may require in their sole discretion;
	 
	 	 	“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 the Corporate Guarantor and its subsidiaries including any subsidiary which
is listed on any public stock exchange in respect of whose obligations to any person the
Corporate Guarantor has given a guarantee, unless such guarantee is in respect of trade
and operating obligations in the normal course of business only, in which case such
subsidiary shall not be a Group Member and not including any subsidiary listed on any
public stock exchange in respect of which the Corporate Guarantee has not issued any
guarantee;
	 
	 	 	“Group Member” means any member of the Group;
	 
	 	 	“Indebtedness” means any obligation howsoever arising (whether present or future,
actual or contingent, secured or unsecured as principal, surety or otherwise) for the
payment or repayment of money;
	 
	 	 	“Indenture” means the Indenture dated as of 18 December 2006 issued by the Corporate
Guarantor and others for 9 1/2% Senior Notes due on 18 December 2014;
	 
	 	 	“Indenture Excerpt” means the excerpt from the Indenture set out in Schedule 8;
	 
	 	 	“Indenture Extract” means the extract from the Indenture set out in Schedule 7;




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	 	 	“Interest Payment Date” means the last day of an Interest Period and, if an Interest
Period is longer than 3 months, the date falling at the end of each successive period of 3
months during such Interest Period starting from its commencement;
	 
	 	 	“Interest Period” means each period for the calculation of interest in respect of the Loan
ascertained in accordance with the provisions of clause 3;
	 
	 	 	“ISM Code Documentation” means the document of compliance (DOC) and safety management
certificate (SMC) issued by a Classification Society pursuant to the ISM Code in relation
to the Vessel within the periods specified by the ISM Code;
	 
	 	 	“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 Security Code of the International
Maritime Organisation and includes any amendments or extensions thereto and any
regulations issued pursuant thereto;
	 
	 	 	“ISSC” means an International Ship Security Certificate issued in respect of the Vessel
pursuant to the ISPS Code;
	 
	 	 	“Latest Accounts” means, in respect of any financial quarter or year of the Group,
the latest unaudited (in respect of each financial quarter) or audited (in respect of each
financial year) financial statements required to be prepared pursuant to clause 8.1.6;
	 
	 	 	“Lenders” means the banks listed in schedule 1 and Transferee Lenders;
	 
	 	 	“Lending Branch” means, in respect of each Lender, its office or branch at the address set
out beneath its name in schedule 1 (or, in the case of a Transferee, in the Transfer
Certificate to which it is a party as Transferee) or such other office or branch as any
Lender shall from time to time select and notify through the Agent to the other parties to
this Agreement;
	 
	 	 	“LIBOR” means, for a particular period, the rate equal to the offered quotation for
deposits in USD in an amount comparable with the amount in relation to which LIBOR is to
be determined for a period equal to, or as near as possible equal to, the relevant period
which appears at or about 11 a.m. on the second Banking Day before the first day of such
period on such service as may be nominated by the British Bankers’ Association as the
information




9









 






	 	 	vendor for the purpose of displaying the British Bankers’ Association Interest Settlement
Rates for USD or, if such quotation is not available, means the Cost of Funds;
	 
	 	 	“Liquidity” means:






	 	(a)	 	cash in hand legally and beneficially owned by any Group Member; and
	 
	 	(b)	 	cash deposits legally and beneficially owned by any Group Member and which
are deposited with (i) any of the Banks or (ii) any other bank or financial
institution; and
	 
	 	(c)	 	any undrawn Commitment under this Agreement which may be promptly drawn in
accordance with the terms of this Agreement;






	 	 	which in each case:






	 	(a)	 	is free from any Encumbrance other than in respect of any deposit with a
Lender, any Encumbrance given as security for the obligations of the Borrower under
this Agreement; and
	 
	 	(b)	 	is otherwise at the free and unrestricted disposal of the relevant Group
Member by which it is owned;






	 	 	“Loan” means the amount of up to USD40,000,000, being the aggregate of the Advances to be
made available by the Lender to the Borrower to assist the Borrower in its acquisition of
the Vessel, and, as the context requires, means the aggregate principal amount in respect
of the Loan Facility owing to the Lenders under this Agreement at any relevant time;
	 
	 	 	“Loan Facility” means the loan facility provided by the Lenders on the terms and
subject to the conditions of this Agreement in the amount of USD 40,000,000;
	 
	 	 	“Majority Lenders” means at any relevant time when there are two Lenders, both of them,
and at any time when there are more than two Lenders, the Lenders whose Contributions
exceed 75% of the Loan;
	 
	 	 	“Management Agreement” means, in respect of the Vessel, the agreement between the Borrower
and the Manager, in a form previously approved in writing by the Agent (acting on the
instructions of the Majority Lenders);




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	 	 	“Manager” means Navios ShipManagement Inc., a company incorporated in the Marshall Islands
and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands, MH96960 or any other person appointed by the Borrower, with the
prior written consent of the Agent, as the manager of the Vessel;
	 
	 	 	“Manager’s Undertaking” means the undertaking and assignment required to be executed
respectively hereunder by the Manager in favour of the Security Trustee in respect of the
Vessel in such form as the Agent and the Majority Lenders may require in their sole
discretion;
	 
	 	 	“Mandatory Cost” means the percentage rate calculated by the Agent in accordance with
Schedule 6;
	 
	 	 	“Margin” means 2.75% per annum;
	 
	 	 	“Master Agreement” means an ISDA Master Agreement made or to be made between the Swap
Bank and the Borrower;
	 
	 	 	“Master Agreement Security Deed” means the security deed in respect of the Master
Agreement executed or (as the context may require) to be each executed by the Borrower in
favour of the Security Trustee in such form as the Agent and the Majority Lenders may
require in their sole discretion;
	 
	 	 	“Material Adverse Effect” means any event or occurrence which the Majority Lenders
reasonably determine has had or could reasonably be expected to have a material adverse
effect on (i) the Banks’ rights under, or the security provided by, any Security Document,
(ii) the ability of any Security Party or other member of the Group to perform or comply
with any of its obligations under any Security Document or (iii) the value or nature of
the property, assets, operations, liabilities or financial condition of any member of the
Group;
	 
	 	 	“Maturity Date” means the earlier of 30 March 2017 and the date falling 6 years after the
Delivery Date;
	 
	 	 	“MII & MAP Policy” means a mortgagee’s interest and pollution risks insurance policy
(including additional perils (pollution) cover) in respect of the Vessel to be effected by
the Security Trustee on or before the first Drawdown Date to cover the Vessel as the same
may be renewed or replaced annually thereafter and maintained throughout the Facility
Period through such brokers, with such underwriters and containing such coverage as may be




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	 	 	acceptable to the Security Trustee in its sole discretion, insuring a sum of at least one
hundred and twenty per cent (120%) of the Loan in respect of mortgagee’s interest
insurance and one hundred and twenty per cent (120%) of the Loan in respect of additional
perils cover;
	 
	 	 	“Minimum Liquidity” means USD30,000,000 ;
	 
	 	 	“month” means a period beginning in one calendar month and ending in the next
calendar month on the day numerically corresponding to the day of the calendar month on
which it started, provided that (a) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day, it shall end on the
last Banking Day in such next calendar month and (b) if such numerically corresponding day
is not a Banking Day, the period shall end on the next following Banking Day in the same
calendar month but if there is no such Banking Day it shall end on the preceding Banking
Day and “months” and “monthly” shall be construed accordingly;
	 
	 	 	“Mortgage” means, in respect of the Vessel, the first preferred Ship mortgage thereof
required to be executed hereunder by the Borrower in favour of the Security Trustee, each
in such form as the Agent and the Majority Lenders may require in their sole discretion;
	 
	 	 	“Operator” means any person who is from time to time during the Facility Period concerned
in the operation of a Relevant Ship and falls within the definition of “Company” set out
in rule 1.1.2 of the ISM Code;
	 
	 	 	“Permitted Encumbrance” means:






	 	(a)	 	any Encumbrance in favour of the Banks or any of them created pursuant to
the Security Documents;
	 
	 	(b)	 	any Encumbrance in favour of third parties disclosed to the Agent prior to
the date of this Agreement and approved by the Agent in writing as a “Permitted
Encumbrance”; and
	 
	 	(c)	 	Permitted Liens;






	 	 	“Permitted Liens” means any lien on the Vessel for master’s, officer’s or crew’s wages
outstanding in the ordinary course of trading, any lien for salvage and any ship
repairer’s or outfitter’s possessory lien for a sum not (except with the prior written
consent of the Agent)




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	 	 	exceeding the Casualty Amount (as defined in the Ship Security Documents) and which are no
more than 30 days overdue;
	 
	 	 	“Pertinent Jurisdiction ” means any jurisdiction in which or where any Security Party
is incorporated, resident, domiciled, has a permanent establishment or assets, carries on,
or has a place of business or is otherwise howsoever effectively connected;
	 
	 	 	“Predelivery Security Assignment” means a deed of assignment of the Shipbuilding Contract
and of the Refund Guarantee in such form as the Agent and the Majority Lenders may require
in their sole discretion;
	 
	 	 	“Proceedings” means any litigation, arbitration, legal action or complaint or judicial,
quasi-judicial or administrative proceedings whatsoever arising or instigated by anyone
(private or governmental) in any court, tribunal, public office or other forum whatsoever
and wheresoever (including, without limitation, any action for provisional or permanent
attachment of any thing or for injunctive remedies or interim relief and any action
instigated on an ex parte basis);
	 
	 	 	“Refund Guarantee” means the irrevocable and unconditional guarantee issued by the Refund
Guarantor in favour of the Borrower in relation to the Shipbuilding Contract;
	 
	 	 	“Registry” means the office of the registrar, commissioner or representative of the
Flag State, who is duly empowered to register the Vessel, the Borrower’s title thereto and
the Mortgage under the laws and flag of the Flag State;
	 
	 	 	“Relevant Ship” means the Vessel and any other ship from time to time (whether before
or after the date of this Agreement) owned, managed or crewed by, or chartered to, any
Group Member;
	 
	 	 	“Repayment Dates” means, subject to clause 6.3, each of the dates falling at three monthly
intervals after the Drawdown Date in respect of the Advance referred to in Clause 2.5.1(d)
or (if that Advance is not drawn) the Delivery Date, up to and including the earlier of
(i) the date falling 72 months after such Drawdown Date or, as the case may be, the
Delivery Date and (ii) 31 March 2017;
	 
	 	 	“Required Authorisation” means any authorisation, consent, declaration, licence, permit,
exemption, approval or other document, whether imposed by or arising in connection with
any law, regulation, custom, contract, security or otherwise howsoever which must be




13









 






		 	obtained at any time from any person, Government Entity, central bank or other
self-regulating or supra-national authority in order to enable the Borrower lawfully to
borrow the loan or draw either Advance and/or to enable any Security Party lawfully and
continuously to continue its corporate existence and/or perform all its obligations
whatsoever whensoever arising and/or grant security under the relevant Security Documents
and/or to ensure the continuous validity and enforceability thereof;
	 
	 	 	“Required Security Amount” means the amount in USD (as certified by the Agent) which is at
any relevant time one hundred and twenty five per cent (125%) of the aggregate of the Loan
and any Swap Exposure;
	 
	 	 	“Second Indenture” means the indenture dated as of 9 November 2009 issued by the
Corporate Guarantor and others for 87/8% First Priority Ship Mortgage Notes due on November
1, 2017;
	 
	 	 	“Security Documents” means this Agreement, the Predelivery Security Assignment, the Master
Agreement, the Master Agreement Security Deed, the Mortgage, the Guarantee, the General
Assignment, the Charter Assignment, the Charter Insurance Assignment, the Earnings
Accounts Pledge, the Manager’s Undertaking, the Shares Pledge, the Collateral Guarantee,
the Collateral Mortgage, the Collateral General Assignment, the Collateral Charter
Assignment, the Collateral Charter Insurance Assignment, the Collateral Manager’s
Undertaking and any other documents as may have been or shall from time to time after the
date of this Agreement be executed to guarantee and/or to govern and/or secure all or any
part of the Loan, interest thereon and other moneys from time to time owing by the
Borrower pursuant to this Agreement and/or the Master Agreement (whether or not any such
document also secures moneys from time to time owing pursuant to any other document or
agreement);
	 
	 	 	“Security Party” means the Borrower, the Manager, the Corporate Guarantor, the Collateral
Guarantor or any other person who may at any time be a party to any of the Security
Documents (other than the Banks);
	 
	 	 	“Security Trustee” means DnB NOR Bank ASA acting through its through its branch at 20 St.
Dunstan’s Hill, London EC3R 8HY, England (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause 17.2.3) or such other
person as may be appointed as Security Trustee and trustee by the Lenders, the Agent and
the Agent pursuant to clause 16.14;




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	 	 	“Security Value” means the amount in USD (as certified by the Agent) which is, at any
relevant time, the aggregate of (a) the Valuation Amounts of the Vessel as most recently
determined in accordance with clause 8.2.2 and (b) the net realizable market value of any
additional security for the time being actually provided to the Lenders pursuant to clause
8.2.1(b);
	 
	 	 	“Shares Pledge” means a pledge of all the shares of and in the Borrower required to
be executed by the Shareholder in favour of the Security Trustee in such form as the Agent
may approve or require;
	 
	 	 	“Shareholder” means, Anemos Maritime Holdings Inc., a company incorporated in the Marshall
Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands, MH96960;
	 
	 	 	“Ship Security Documents” means the Mortgage, the General Assignment, any Charter
Assignment, the Charter Insurance Assignment and the Manager’s Undertaking;
	 
	 	 	“subsidiary” of a person means any company or entity directly or indirectly controlled by
such person, and for this purpose “control” means either the ownership of more than fifty
per cent (50%) of the voting share capital (or equivalent rights of ownership) of such
company or entity or the power to direct its policies and management, whether by contract
or otherwise;
	 
	 	 	“Swap Bank” means each of DnB NOR Bank ASA acting through its through its branch at 20 St.
Dunstan’s Hill, London EC3R 8HY, England;
	 
	 	 	“Swap Exposure” means, as at any relevant date the amount certified by the Swap Bank to
be the aggregate net amount in Dollars which would be payable by the Borrower to the Swap
Bank under (and calculated in accordance with) section 6(e) (Payments on Early
Termination) of the Master Agreement if an Early Termination Date (as therein defined) had
occurred on the relevant date in relation to all continuing Transactions (as therein
defined) entered into between the Borrower and the Swap Bank;
	 
	 	 	“Taxes” includes all present and future income, corporation, capital or value-added taxes
and all stamp and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and penalties in respect thereto,
if any, and charges, fees or other amounts made on or in respect thereof (and “Taxation”
shall be construed accordingly);




15









 






	 	 	“Total Assets” and “Total Liabilities” mean, respectively, the total assets and total
liabilities of the Group as evidenced at any relevant time by the Latest Accounts, in
which they shall have been calculated by reference to the meanings assigned to them in
accordance with US GAAP provided that the value of any ship shall be the value thereof
calculated in accordance with Clause 8.2.2 (but taking into account any charter in respect
of which Charter Insurances are in place) and not as set out in the Latest Accounts;
	 
	 	 	“Total Commitment” means, at any relevant time, the aggregate of the Commitments of all
the Lenders at such time (being the aggregate of the sums set out opposite their names in
schedule 1);
	 
	 	 	“Total Loss” means, in relation to the Vessel:






	 	(a)	 	actual, constructive, compromised or arranged total loss of the Vessel; or
	 
	 	(b)	 	Compulsory Acquisition; or
	 
	 	(c)	 	any hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of the Vessel not falling within the definition of Compulsory
Acquisition by any Government Entity, or by persons allegedly acting or purporting
to act on behalf of any Government Entity, unless the Vessel be released and restored
to the Borrower within thirty (30) (or, in the case of seizure of the Vessel by
pirates, ninety (90)) days after such incident;






	 	 	“Transfer Certificate” means a certificate in substantially the form set out in schedule
4;
	 
	 	 	“Transferee Lender” has the meaning ascribed thereto in clause 15.3;
	 
	 	 	“Transferor Lender” has the meaning ascribed thereto in clause 15.3;
	 
	 	 	“Trust Deed” means a trust deed in the form, or substantially in the form, set out in
schedule 5;
	 
	 	 	“Trust Property” means (i) the security, powers, rights, titles, benefits and interests
(both present and future) constituted by and conferred on the Banks or any of them under
or pursuant to the Security Documents (including, without limitation, the benefit of all
covenants, undertakings, representations, warranties and obligations given, made or
undertaken to any Bank in the Security Documents), (ii) all moneys, property and other
assets paid or transferred to or vested in any Bank (or anyone else on such Bank’s behalf)
or received




16









 






		 	or recovered by any Bank (or anyone else on such Bank’s behalf) pursuant to, or in
connection with, any of the Security Documents whether from any Security Party or any
other person and (iii) all moneys, investments, property and other assets at any time
representing or deriving from any of the foregoing, including all interest, income and
other sums at any time received or receivable by any Bank (or anyone else on such Bank’s
behalf) in respect of the same (or any part thereof);
	 
	 	 	“Underlying Documents” means, together, the Approved Charter, the Shipbuilding Contract,
the Refund Guarantee, any Extended Employment Contracts and the Management Agreement;
	 
	 	 	“Unlawfulness” means any event or circumstance which either is or, as the case may be,
might in the opinion of the Agent become the subject of a notification by the Agent to the
Borrower under clause 12.1;
	 
	 	 	“USA” means the United States of America;
	 
	 	 	“Valuation Amount” means, in respect of the Vessel, the value thereof as most recently
determined under clause 8.2.2; and
	 
	 	 	Words and expressions defined in Schedule 10 (Vessel Details) shall have the meanings
given to them therein as if the same were set out in full in this clause 1.2.
	 
	1.3	 	Construction
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	1.3.1	 	clause headings and the index are inserted for convenience of reference only and shall be
ignored in the construction of this Agreement;
	 
	1.3.2	 	references to clauses and schedules are to be construed as references to clauses of, and
schedules to, this Agreement and references to this Agreement include its schedules and any
supplemental agreements executed pursuant hereto;
	 
	1.3.3	 	references to (or to any specified provision of) this Agreement or any other document shall
be construed as references to this Agreement, that provision or that document as in force for
the time being and as duly amended and/or supplemented and/or novated;




17









 






	1.3.4	 	references to a “regulation” include any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law) of any Government
Entity, central bank or any self-regulatory or other supra-national authority;
	 
	1.3.5	 	references to any person in or party to this Agreement shall include reference to such
person’s lawful successors and assigns and references to a Lender shall also include a
Transferee Lender;
	 
	1.3.6	 	words importing the plural shall include the singular and vice versa;
	 
	1.3.7	 	references to a time of day are, unless otherwise stated, to Hamburg time;
	 
	1.3.8	 	references to a person shall be construed as references to an individual, firm, company,
corporation or unincorporated body of persons or any Government Entity;
	 
	1.3.9	 	references to a “guarantee” include references to an indemnity or any other kind of
assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill
or note) against financial loss or other liability including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any other person to
pay any Indebtedness and “guaranteed” shall be construed accordingly;
	 
	1.3.10	 	references to any statute or other legislative provision are to be construed as references
to any such statute or other legislative provision as the same may be re enacted or modified
or substituted by any subsequent statute or legislative provision (whether before or after the
date hereof) and shall include any regulations, orders, instruments or other subordinate
legislation issued or made under such statute or legislative provision;
	 
	1.3.11	 	a certificate by the Agent or the Agent as to any amount due or calculation made or any
matter whatsoever determined in connection with this Agreement shall be conclusive and binding
on the Borrower except for manifest error;
	 
	1.3.12	 	if any document, term or other matter or thing is required to be approved, agreed or
consented to by any of the Banks such approval, agreement or consent must be obtained in
writing unless the contrary is stated;
	 
	1.3.13	 	time shall be of the essence in respect of all obligations whatsoever of the Borrower under
this Agreement, howsoever and whensoever arising;




18









 






	1.3.14	 	and the words “other” and “otherwise” shall not be construed eiusdem generis with any
foregoing words where a wider construction is possible.
	 
	1.4	 	Accounting terms and references to currencies
	 
	 	 	Currencies are referred to in this Agreement by the three letter currency codes (ISO 4217)
allocated to them by the International Organisation for Standardisation.
	 
	1.5	 	Contracts (Rights of Third Parties Act) 1999
	 
	 	 	Except for clause 19, no part of this Agreement shall be enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
	 
	1.6	 	Majority Lenders
	 
	 	 	Where this Agreement or any other Security Document provides for any matter to be
determined by reference to the opinion of the Majority Lenders or to be subject to the
consent or request of the Majority Lenders or for any decision or action to be taken on
the instructions in writing of the Majority Lenders, such opinion, consent, request or
instructions shall (as between the Lenders) only be regarded as having been validly given
or issued by the Majority Lenders if all the Lenders with a Commitment and/or Contribution
shall have received prior notice of the matter on which such opinion, consent, request or
instructions are required to be obtained and the relevant majority of such Lenders shall
have given or issued such opinion, consent, request or instructions but so that (as
between the Borrower and the Banks) the Borrower shall be entitled (and bound) to assume
that such notice shall have been duly received by each relevant Lender and that the
relevant majority shall have been obtained to constitute Majority Lenders whether or not
this is in fact the case.
	 
	2	 	THE AVAILABLE COMMITMENT AND CANCELLATION
	 
	2.1	 	Agreement to lend
	 
	 	 	The Lenders, relying upon each of the representations and warranties in clause 7, agree to
provide to the Borrower upon and subject to the terms of this Agreement, the Loan in up to
4 Advances for the purposes of financing part of the purchase price of the Vessel.
Subject to the terms of this Agreement, the obligations of the Lenders shall be to
contribute to each Advance, the proportion of the relevant Advance which their respective
Commitments bear to the aggregate Commitments on any relevant Drawdown Date.




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	2.2	 	Obligations several
	 
	 	 	The obligations of the Lenders under this Agreement are several according to their
respective Commitments and/or Contributions. The failure of any Lender to perform such
obligations shall not relieve any other party to this Agreement of any of its respective
obligations or liabilities under this Agreement nor shall any Bank be responsible for the
obligations of any other Bank (except for its own obligations, if any, as a Lender) under
this Agreement.
	 
	2.3	 	Interests several
	 
	 	 	Notwithstanding any other term of this Agreement (but without prejudice to the provisions
of this Agreement relating to or requiring action by the Majority Lenders) the interests
of the Banks are several and the amount due to any Bank is a separate and independent
debt. Each Bank shall have the right to protect and enforce its rights arising out of
this Agreement and it shall not be necessary for any other Bank to be joined as an
additional party in any Proceedings for this purpose.
	 
	2.4	 	Drawdown
	 
	2.4.1	 	On the terms and subject to the conditions of this Agreement, the Loan shall be advanced in
up to four (4) Advances on the relevant Drawdown Dates following receipt by the Agent from the
Borrower of Drawdown Notices not later than 10 a.m. on the third Banking Day before each
proposed Drawdown Date.
	 
	2.4.2	 	A Drawdown Notice shall be effective on actual receipt by the Agent and, once given, shall,
subject as provided in clause 3.6, be irrevocable.
	 
	2.5	 	Amount
	 
	2.5.1	 	The principal amount specified in each Drawdown Notice for borrowing on the Drawdown Dates
shall, subject to the terms of this Agreement, in respect of each Tranche, not exceed:






	 	(a)	 	USD9,000,000 to the Borrower to refinance amounts already paid by the Borrower
to the Builder under the Shipbuilding Contract;
	 
	 	(b)	 	USD5,000,000 payable by the Borrower to the Builder under the Shipbuilding
Contract in respect of the keel-laying instalment;




20









 






	 	(c)	 	USD5,000,000 payable by the Borrower to the Builder under the Shipbuilding
Contract in respect of the launching instalment; and
	 
	 	(d)	 	the lesser of (i) USD21,000,000 and (ii) such amount as when added to the
already drawn Advances will be 70% of the Valuation Amount of Vessel on the Delivery
Date, of which up to $19,000,000 will be paid by the Borrower to the Builder under the
Shipbuilding Contract in respect of the delivery instalment, and the balance, if any,
is available to the Borrower.






	2.6	 	Availability
	 
	 	 	Upon receipt of a Drawdown Notice complying with the terms of this Agreement, the Agent
shall promptly notify each Lender and each Lender shall make available to the Agent its
portion of the relevant Advance for payment by the Agent in accordance with clause 6.2.
The Borrower acknowledges that payment of each Advance to the account referred to in the
relevant Drawdown Notice shall satisfy the obligation of the Lenders to lend that Advance
to the Borrower under this Agreement.
	 
	2.7	 	Cancellation in changed circumstances
	 
	 	 	The Borrower may also at any time during the Facility Period by notice to the Agent
(effective only on actual receipt) prepay and cancel with effect from a date not less than
fifteen (15) days after receipt by the Agent of such notice, the whole but not part only,
but without prejudice to the Borrower’s obligations under clauses 6.6 and 12, of the
Contribution and Commitment (if any) of any Lender to which the Borrower shall have become
obliged to pay additional amounts under clause 12 or clause 6.6. Upon any notice of such
prepayment and cancellation being given, the Commitment of the relevant Lender shall be
reduced to zero, the Borrower shall be obliged to prepay the Contribution of such Lender
and such Lender’s related costs (including but not limited to Break Costs) on such date
and such Lender shall be under no obligation to participate in the Loan or the further
Advance.
	 
	2.8	 	Use of proceeds
	 
	 	 	Without prejudice to the Borrower’s obligations under clause 8.1.4, no Bank shall have any
responsibility for the application of the proceeds of either Advance or any part thereof
by the Borrower.






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	3	 	INTEREST AND INTEREST PERIODS
	 
	3.1	 	Normal interest rate






	 	 	The Borrower must pay interest on the Loan in respect of each Interest Period on each
Interest Payment Date at the rate per annum determined by the Agent to be the aggregate of
(a) the Margin, (b) Cost of Funds or, as the case may be, LIBOR and (c) Mandatory Costs
(if any), each for that Interest Period where “Cost of Funds” shall apply (i) from the
date of this Agreement until the Lenders determine that the banking market and in
particular the London Interbank Market have stabilised and (ii) at any time after the
Lenders give the Borrowers written notice that LIBOR does not reflect the actual cost to
them of funding the Loan, and LIBOR shall apply at all other times.






	 	 	Provided that in the event that the Borrower deposits cash which is free of any
Encumbrance in a designated account with any Lender (i) for a fixed period of no less than
one month and (ii) in an amount of no more than that Lender’s Contribution (and any amount
standing to the credit of the Earnings Account shall not be counted towards such deposited
cash) (the “Cash Deposit”), the Margin applicable to part of the Loan equal to the amount
of the Cash Deposit shall be two point five five per cent. (2.55%) per annum while the
Cash Deposit remains on such designated account (and the Lender with whom the relevant
designated account has been opened shall receive such reduced Margin on its Contribution,
or part thereof).






	3.2	 	Selection of Interest Periods






	 	 	Subject to clause 3.3, the Borrower may by notice received by the Agent not later than
10:00 a.m. on the third Banking Day before the beginning of each Interest Period specify
whether such Interest Period shall have a duration of three (3) months, six (6) months,
nine (9) months, twelve (12) months or such other period as the Borrower may select and
the Agent (acting on the instructions of the Lenders) may agree.






	3.3	 	Determination of Interest Periods






	 	 	Subject to Clause 3.3.1 every Interest Period shall be of the duration specified by the
Borrower pursuant to clause 3.2 but so that:






	3.3.1	 	the first Interest Period shall start on the Drawdown Date in respect of the first Advance,
and each subsequent Interest Period shall start on the last day of the previous Interest
Period;




22









 












	3.3.2	 	the first Interest Period in respect of the subsequent Advance shall commence on its
Drawdown Date and terminate simultaneously with the Interest Period which is then current;






	3.3.3	 	if any Interest Period would otherwise overrun a Repayment Date, then, in the case of the
last Repayment Date, such Interest Period shall end on such Repayment Date, and in the case of
any other Repayment Date shall be divided into parts so that there is one part in the amount
of the repayment instalment due on each Repayment Date falling in that Interest Period and
having an Interest Period ending on the relevant Repayment Date and another part consisting of
the balance of the Loan having an Interest Period ascertained in accordance with the other
provisions of this clause 3; and






	3.3.4	 	if the Borrower fails to specify the length of an Interest Period in accordance with the
provisions of clause 3.2 and this clause 3.3 such Interest Period shall last three months or
such other period as complies with this clause 3.3.






	3.4	 	Default interest






	 	 	If the Borrower fails to pay any sum (including, without limitation, any sum payable
pursuant to this clause 3.4) on its due date for payment under any of the Security
Documents, the Borrower must pay interest on such sum on demand from the due date up to
the date of actual payment (as well after as before judgment) at a rate determined by the
Agent pursuant to this clause 3.4. The period starting on such due date and ending on
such date of payment shall be divided into successive periods of not more than three (3)
months as selected by the Agent each of which (other than the first, which shall start on
such due date) shall start on the last day of the preceding such period. The rate of
interest applicable to each such period shall be the aggregate (as determined by the
Agent) of (a) two per cent (2%) per annum, (b) the Margin (which shall be for the purposes
of this Clause, 1.25% per annum) and (c) the applicable one of Cost of Funds and LIBOR for
such periods. Such interest shall be due and payable on demand, or, if no demand is made,
then on the last day of each such period as determined by the Agent and on the day on
which all amounts in respect of which interest is being paid under this Clause are paid,
and each such day shall, for the purposes of this Agreement, be treated as an Interest
Payment Date, provided that if such unpaid sum is an amount of principal which became due
and payable by reason of a declaration by the Agent under clause 10.2.2 or a prepayment
pursuant to clauses 4.3, 4.5, 8.2.1(a) or 12.1, on a date other than an Interest Payment
Date relating thereto, the first such period selected by the




23









 






	 	 	Agent shall be of a duration equal to the period between the due date of such principal
sum and such Interest Payment Date and interest shall be payable on such principal sum
during such period at a rate of two per cent (2%) above the rate applicable thereto
immediately before it shall have become so due and payable. If, for the reasons specified
in clause 3.6.1, the Agent is unable to determine a rate in accordance with the foregoing
provisions of this clause 3.4, each Lender shall promptly notify the Agent of the cost of
funds to such Lender and interest on any sum not paid on its due date for payment shall be
calculated at a rate determined by the Agent to be two per cent (2%) per annum above the
aggregate of the Margin and the arithmetic mean of the cost of funds to the Lenders
compounded at such intervals as the Agent selects.






	3.5	 	Notification of Interest Periods and interest rate






	 	 	The Agent agrees to notify (i) the Lenders promptly of the duration of each Interest
Period and (ii) the Borrower and the Lenders promptly of each rate of interest determined
by it under this clause 3.5.






	3.6	 	Market disruption; non-availability






	3.6.1	 	Whenever, at any time prior to the commencement of any Interest Period:






	 	(a)	 	the Agent shall have determined that adequate and fair means do not exist
for ascertaining the applicable one of Cost of Funds and LIBOR during such Interest
Period; or






	 	(b)	 	the Agent shall have received notification from a Lender or Lenders that
deposits in USD are not available to such Lender or Lenders in the London InterBank
Market in the ordinary course of business to fund their Contributions to the Loan for
such Interest Period






	 	(c)	 	the Agent must promptly give notice (a “Determination Notice”) thereof to
the Borrower and to each of the Lenders. A Determination Notice shall contain
particulars of the relevant circumstances giving rise to its issue. After the giving
of any Determination Notice, regardless of any other provision of this Agreement, the
Commitment shall not be borrowed until notice to the contrary is given to the
Borrower by the Agent.




24









 












	3.6.2	 	Within ten (10) days of any Determination Notice being given by the Agent under clause
3.6.1, each Lender must certify an alternative basis (the “Alternative Basis”) for maintaining
its Contribution. The Alternative Basis may at the relevant Lender’s sole discretion include
(without limitation) alternative interest periods, alternative currencies or alternative rates
of interest but shall include a Margin above the cost of funds to such Lender. The Agent
shall calculate the arithmetic mean of the Alternative Bases provided by the relevant Lenders
(the “Substitute Basis”) and certify the same to the Borrower and the Lenders. The Substitute
Basis so certified shall be binding upon the Borrower, and shall take effect in accordance
with its terms from the date specified in the Determination Notice until such time as the
Agent notifies the Borrower that none of the circumstances specified in clause 3.6.1 continues
to exist whereupon the normal interest rate fixing provisions of this Agreement shall again
apply and, subject to the other provisions of this Agreement, the Commitment may again be
borrowed.






	4	 	REPAYMENT AND PREPAYMENT
	 
	4.1	 	Repayment






	4.1.1	 	Subject as otherwise provided in this Agreement, the Borrower must repay the Loan by 24
equal quarterly instalments of US$645,000 each, one such instalment to be repaid on each of
the Repayment Dates and a balloon instalment of US$24,520,000 to be repaid on the final
Repayment Date.






	 	 	If the Commitment is not drawn in full, the amount of each repayment instalment shall be
reduced proportionately.






	4.1.2	 	The Borrower shall on the Maturity Date also pay to the Agent and the Lenders all other
amounts in respect of interest or otherwise then due and payable under this Agreement and the
Security Documents.






	4.2	 	Voluntary prepayment






	 	 	Subject to clauses 4.5 and 4.6 the Borrower may, subject to having given 10 Banking Days
prior notice thereof to the Agent, prepay any specified amount (such part being in an
amount of one million Dollars (USD 1,000,000) or any larger sum which is an integral
multiple of such amount) of the Loan on any relevant Interest Payment Date without premium
or penalty.




25









 












	4.3	 	Mandatory Prepayment on Total Loss






	 	 	On the date falling one hundred and eighty (180) days after that on which the Vessel
became a Total Loss or, if earlier, on the date upon which the relevant insurance proceeds
are, or Requisition Compensation (as defined in the Mortgage) is, received by the Borrower
(or the Security Trustee pursuant to the Security Documents), the Borrower must prepay the
Loan.






	4.3.1	 	Interpretation






	 	 	For the purpose of this Agreement, a Total Loss shall be deemed to have occurred:






	 	(a)	 	in the case of an actual total loss of the Vessel, on the actual date and
at the time the Vessel was lost or, if such date is not known, on the date on which
the Vessel was last reported;






	 	(b)	 	in the case of a constructive total loss of the Vessel, upon the date and
at the time notice of abandonment of the ship is given to the then insurers of the
Vessel (provided a claim for total loss is admitted by such insurers) or, if such
insurers do not immediately admit such a claim, at the date and at the time at which
either a total loss is subsequently admitted by such insurers or a total loss is
subsequently adjudged by a competent court of law or arbitration tribunal to have
occurred;






	 	(c)	 	in the case of a compromised or arranged total loss of the Vessel, on the
date upon which a binding agreement as to such compromised or arranged total loss has
been entered into by the then insurers of the Vessel;






	 	(d)	 	in the case of Compulsory Acquisition, on the date upon which the
requisition of title or other compulsory acquisition occurs; and






	 	(e)	 	in the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Vessel (other than within the definition of
Compulsory Acquisition) by any Government Entity, or by persons allegedly acting or
purporting to act on behalf of any Government Entity, which deprives the Borrower of
the use of the Vessel for more than thirty (30) (or, in the case of an act of piracy,
ninety (90)) days, upon the expiry of the period of thirty (30) or, as the case may
be, ninety (90) days after the date upon which the relevant incident occurred.




26









 












	4.4	 	Mandatory prepayment on sale of the Vessel






	 	 	On the date of completion of the sale of the Vessel the Borrower must prepay the Loan.
	 
	4.5	 	Mandatory prepayment on termination of Shipbuilding Contract or Refund Guarantee






	 	 	On demand by the Agent (acting on the instructions of the Majority Lenders) the Borrower
must prepay the Loan if any of the following occurs:






	 	(a)	 	either the Shipbuilding Contract or the Refund Guarantee is cancelled,
terminated, rescinded or suspended or otherwise ceases to remain in force for any
reason; or






	 	(b)	 	the Shipbuilding Contract is amended or varied without the prior written
consent of the Agent except for any such amendment or variation as is permitted by
this Agreement or any other relevant Security Document; or






	 	(c)	 	the Ship has not for any reason been delivered to, and accepted by, the
Borrower under the Shipbuilding Contract by the cancelling date under the Approved
Charter.






	4.6	 	Amounts payable on prepayment






	 	 	Any prepayment of all or part of the Loan under this Agreement shall be made together with:
	 
	4.6.1	 	accrued interest on the amount to be prepaid to the date of such prepayment;
	 
	4.6.2	 	any additional amount payable under clauses 3.6, 6.6 or 12.2; and






	4.6.3	 	all other sums payable by the Borrower to the Banks under this Agreement or any of the other
Security Documents including, without limitation any Break Costs and, if the whole Loan is
being prepaid, (i) any accrued commitment commission payable under clause 5.1 and (ii) any
amount required to terminate any then existing transaction under the Master Agreement.
	 
	4.7	 	Notice of prepayment; reduction of maximum loan amount
	 
	4.7.1	 	Every notice of prepayment shall be effective only on actual receipt by the Agent, shall be
irrevocable, shall specify the amount to be prepaid and shall oblige the Borrower to make such
prepayment on the date specified. Subject to the other provisions of this Agreement and in
particular Clause 2.6, no amount prepaid under this Clause 4 in respect of the Loan may be
reborrowed.




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	4.7.2	 	Any amounts prepaid pursuant to clause 4.2 shall be applied against the Loan in reducing the
Balloon Instalment and the repayment instalments pro rata.
	 
	4.7.3	 	The Borrower’s obligations set out in Clause 4.1.1 shall not be affected by any prepayment
in respect of the Loan pursuant to clause 4.2.
	 
	4.7.4	 	The Borrower may not prepay any part of the Loan except as expressly provided in this Agreement.
	 
	5	 	FEES AND EXPENSES
	 
	5.1	 	Fees and Commission
	 
	5.1.1	 	The Borrower agrees to pay to the Agent for the account of the Lenders pro rata in
accordance with their Total Commitments quarterly in arrears from 19 August 2010 until the end
of the Drawdown Period and on the last day of the Drawdown Period commitment commission
computed from 19 August 2010 at a rate of one per cent (1.00%) per annum on the daily amount
of the undrawn Loan Facility.
	 
	5.1.2	 	The Borrower agrees to pay to the Agent for the account of the Lenders pro rata in
accordance with their Commitments, an arrangement fee of three hundred and forty thousand
Dollars ($340,000) on the date of this Agreement.
	 
	5.1.3	 	The commission referred to in clause 5.1.1 must be paid by the Borrower to the Agent,
whether or not any part of the Total Commitment is ever advanced and shall be non-refundable.
	 
	5.2	 	Expenses






	 	 	The Borrower agrees to reimburse the Banks on a full indemnity basis within ten (10) days
of demand all expenses and/or disbursements whatsoever (including without limitation
legal, printing, travel and out of pocket expenses and expenses related to the provision
of legal and insurance opinions referred to in schedule 3) certified by the Banks or any
of them as having been incurred by them from time to time:






	5.2.1	 	in connection howsoever with the syndication of the Loan Facility and with the negotiation,
preparation, execution and, where relevant, registration of the Security Documents and of any
contemplated or actual amendment, or indulgence or the granting of any waiver or consent




28









 






	 	 	howsoever in connection with, any of the Security Documents (including legal fees and any
travel expenses); and






	5.2.2	 	in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise
or enforcement of, or preservation of any rights, powers, remedies or discretions under any of
the Security Documents, or in consideration of the Banks’ rights thereunder or any action
proposed or taken following the occurrence of a Default or otherwise in respect of the moneys
owing under any of the Security Documents,






	 	 	together with interest at the rate referred to in clause 3.4 from the date on which
reimbursement of such expenses and/or disbursements were due following demand to the date
of payment (as well after as before judgment).






	5.3	 	Value added tax






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






	5.4	 	Stamp and other duties






	 	 	The Borrower must pay all stamp, documentary, registration or other like duties or taxes
(including any duties or taxes payable by any of the Banks) imposed on or in connection
with any of the Underlying Documents, the Security Documents or the Loan or either Advance
and agree to indemnify the Banks or any of them against any liability arising by reason of
any delay or omission by the Borrower to pay such duties or taxes.






	6	 	PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
	 
	6.1	 	No set-off or counterclaim






	 	 	All payments to be made by the Borrower under any of the Security Documents must be made in
full, without any set off or counterclaim whatsoever and, subject as provided in clause 6.6,
free and clear of any deductions or withholdings, in USD on or before 11:00 am on the due
date in freely available funds to such account at such bank and in such place as the Agent
may from time to time specify for this purpose. Save as otherwise provided in this
Agreement or any




29









 






	 	 	other relevant Security Documents, such payments shall be for the account of all Lenders and
the Agent shall distribute such payments in like funds as are received by the Agent to the
Lenders rateably, in the proportions which their respective Contributions bear to the
aggregate of the Loan and the Advances on the date on which such payment is made.






	6.2	 	Payment by the Lenders






	 	 	All sums to be advanced by the Lenders to the Borrower under this Agreement shall be
remitted in USD on the relevant Drawdown Date to the account of the Agent at such bank as
the Agent may have notified to the Lenders and shall be paid by the Agent on such date in
like funds as are received by the Agent to the account specified in the relevant Drawdown
Notice.






	6.3	 	Non-Banking Days






	 	 	When any payment under any of the Security Documents would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in which case payment
shall be made on the immediately preceding Banking Day.






	6.4	 	Calculations






	 	 	All interest and other payments of an annual nature under any of the Security Documents
shall accrue from day to day and be calculated on the basis of actual days elapsed and a
three hundred and sixty (360) day year.






	6.5	 	Currency of account






	 	 	If any sum due from the Borrower under any of the Security Documents, or under any order or
judgment given or made in relation thereto, must be converted from the currency (“the first
currency”) in which the same is payable thereunder into another currency (“the second
currency”) for the purpose of (i) making or filing a claim or proof against the Borrower,
(ii) obtaining an order or judgment in any court or other tribunal or (iii) enforcing any
order or judgment given or made in relation thereto, the Borrower undertakes to indemnify
and hold harmless the Lender from and against any loss suffered as a result of any
discrepancy between (a) the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (b) the rate or rates of
exchange at which the Lender may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole
or in part, of any such order, judgment,




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	 	 	claim or proof. Any amount due from the Borrower under this clause 6.5 shall be due as a
separate debt and shall not be affected by judgment being obtained for any other sums due
under or in respect of any of the Security Documents and the term “rate of exchange”
includes any premium and costs of exchange payable in connection with the purchase of the
first currency with the second currency.






	6.6	 	Grossing-up for Taxes — by the Borrower






	 	 	If at any time the Borrower must make any deduction or withholding in respect of Taxes or
otherwise from any payment due under any of the Security Documents for the account of any
Bank or if the Agent or the Security Trustee must make any deduction or withholding from a
payment to another Bank or withholding in respect of Taxes from any payment due under any of
the Security Documents, the sum due from the Borrower in respect of such payment must be
increased to the extent necessary to ensure that, after the making of such deduction or
withholding, the relevant Bank receives on the due date for such payment (and retains, free
from any liability in respect of such deduction or withholding), a net sum equal to the sum
which it would have received had no such deduction or withholding been required to be made
and the Borrower must indemnify each Bank against any losses or costs incurred by it by
reason of any failure of the Borrower to make any such deduction or withholding or by reason
of any increased payment not being made on the due date for such payment. The Borrower must
promptly deliver to the Agent any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.






	6.7	 	Grossing-up for Taxes — by the Lenders






	 	 	If at any time a Lender must make any deduction or withholding in respect of Taxes from any
payment due under any of the Security Documents for the account of the Agent or the Security
Trustee, the sum due from such Lender in respect of such payment must be increased to the
extent necessary to ensure that, after the making of such deduction or withholding, the
Agent or, as the case may be, the Security Trustee receives on the due date for such payment
(and retains free from any liability in respect of such deduction or withholding) a net sum
equal to the sum which it would have received had no such deduction or withholding been
required to be made and each Lender must indemnify the Agent and the Security Trustee
against any losses or costs incurred by it by reason of any failure of such Lender to make
any such deduction or withholding or by reason of any increased payment not being made on
the due date for such payment.




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	6.8	 	Loan account






	 	 	Each Lender shall maintain, in accordance with its usual practice, an account evidencing
the amounts from time to time lent by, owing to and paid to it under the Security
Documents. The Agent and/or the Security Trustee shall maintain a control account showing
the Loan, the Advances and other sums owing by the Borrower under the Security Documents
and all payments in respect thereof being made from time to time. The control account
shall, in the absence of manifest error, be prima facie evidence of the amount from time
to time owing by the Borrower under the Security Documents.






	6.9	 	Agent may assume receipt






	 	 	Where any sum is to be paid under the Security Documents to the Agent or, as the case may
be, the Security Trustee for the account of another person, the Agent or, as the case may
be, the Security Trustee may assume that the payment will be made when due and the Agent
or, as the case may be, the Security Trustee may (but shall not be obliged to) make such
sum available to the person so entitled. If it proves to be the case that such payment
was not made to the Agent or, as the case may be, the Security Trustee, then the person to
whom such sum was so made available must on request refund such sum to the Agent or, as
the case may be, the Security Trustee together with interest thereon sufficient to
compensate the Agent or, as the case may be, the Security Trustee for the cost of making
available such sum up to the date of such repayment and the person by whom such sum was
payable must indemnify the Agent or, as the case may be, the Security Trustee for any and
all loss or expense which the Agent or, as the case may be, the Security Trustee may
sustain or incur as a consequence of such sum not having been paid on its due date.






	6.10	 	Partial payments






	 	 	If, on any date on which a payment is due to be made by the Borrower under any of the
Security Documents, the amount received by the Agent from the Borrower falls short of the
total amount of the payment due to be made by the Borrower on such date then, without
prejudice to any rights or remedies available to the Agent, the Agent, the Security
Trustee and the Lenders under any of the Security Documents, the Agent must apply the
amount actually received from the Borrower in or towards discharge of the obligations of
the Borrower under the Security Documents in the following order, notwithstanding any
appropriation made, or purported to be made, by the Borrower:




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	6.10.1	 	first, in or towards payment, on a pro-rata basis, of any unpaid costs and expenses of the
Agent, the Agent and the Security Trustee under any of the Security Documents;






	6.10.2	 	secondly, in or towards payment of any fees payable to the Agent or any of the other Banks
under, or in relation to, the Security Documents which remain unpaid;






	6.10.3	 	thirdly, in or towards payment to the Lenders, on a pro rata basis, of any accrued interest
owing in respect of the Loan which shall have become due under any of the Security Documents
but remains unpaid;






	6.10.4	 	fourthly, in or towards payment to the Lenders, on a pro rata basis, of any principal in
respect of the Loan which shall have become due but remain unpaid;






	6.10.5	 	fifthly, in or towards payment to the Lenders, on a pro rata basis, any Break Costs and any
other sum relating to the Loan which shall have become due under any of the Security Documents
(other than under or in relation to the Master Agreement) but remains unpaid; and






	6.10.6	 	sixthly, in or towards payment to the Swap Bank of any other sum which shall have become due
under the Master Agreement but remains unpaid.






	 	 	The order of application set out in clauses 6.10.1 to 6.10.6 may be varied by the Agent if
the Majority Lenders so direct, without any reference to, or consent or approval from, the
Borrower.






	7	 	REPRESENTATIONS AND WARRANTIES
	 
	7.1	 	Continuing representations and warranties






	 	 	The Borrower represents and warrants to each Bank that:
	 
	7.1.1	 	Due incorporation






	 	 	each of the Security Parties is duly incorporated and validly existing in good standing,
under the laws of its respective country of incorporation, in each case, as a corporation
and has power to carry on its respective businesses as it is now being conducted and to
own their respective property and other assets to which it has unencumbered legal and
beneficial title except as disclosed to the Agent in writing;




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	7.1.2	 	Corporate power






	 	 	each of the Security Parties has power to execute, deliver and perform its obligations
and, as the case may be, to exercise its rights under the Underlying Documents and the
Security Documents to which it is a party; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and on the execution of the
Security Documents performance of the same and no limitation on the powers of the Borrower
to borrow or any other Security Party to howsoever incur liability and/or to provide or
grant security will be exceeded as a result of borrowing any part of the Loan;






	7.1.3	 	Binding obligations






	 	 	the Underlying Documents and the Security Documents, when executed, will constitute valid
and legally binding obligations of the relevant Security Parties enforceable in accordance
with their respective terms;






	7.1.4	 	No conflict with other obligations






	 	 	the execution and delivery of, the performance of their obligations under, and compliance
with the provisions of, the Underlying Documents and the Security Documents by the
relevant Security Parties will not (i) contravene any existing applicable law, statute,
rule or regulation or any judgment, decree or permit to which any Security Party or other
member of the Group 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
Security Party or any other member of the Group is a party or is subject or by which it or
any of its property is bound, (iii) contravene or conflict with any provision of the
constitutional documents of any Security Party or (iv) result in the creation or
imposition of, or oblige any of the Security Parties to create, any Encumbrance (other
than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of
any of the Security Parties;






	7.1.5	 	No default
	 
	 	 	no Default has occurred;
	 
	7.1.6	 	No litigation or judgments






	 	 	no Proceedings are current, pending or, to the knowledge of the officers of the Borrower,
threatened against any of the Security Parties or any other Group Members or their assets




34









 






	 	 	which could have a Material Adverse Effect and there exist no judgments, orders,
injunctions which would materially affect the obligations of the Security Parties under
the Security Documents;






	7.1.7	 	No filings required






	 	 	except for the registration of the Mortgage in the relevant register under the laws of the
Flag State through the Registry, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of any of the Underlying Documents or any of
the Security Documents that they or any other instrument be notarised, filed, recorded,
registered or enrolled in any court, public office or elsewhere in any Pertinent
Jurisdiction or that any stamp, registration or similar tax or charge be paid in any
Pertinent Jurisdiction on or in relation to any of the Underlying Documents or the
Security Documents and each of the Underlying Documents and the Security Documents is in
proper form for its enforcement in the courts of each Pertinent Jurisdiction;






	7.1.8	 	Required Authorisations and legal compliance






	 	 	all Required Authorisations have been obtained or effected and are in full force and
effect and no Security Party has in any way contravened any applicable law, statute, rule
or regulation (including all such as relate to money laundering);






	7.1.9	 	Choice of law






	 	 	the choice of English law to govern the Underlying Documents and the Security Documents
(other than the Mortgage and the Collateral Mortgage), the choice of the law of the Flag
State to govern the Mortgage and the Collateral Mortgage and the submissions by the
Security Parties to the jurisdiction of the English courts and the obligations of such
Security Parties associated therewith, are valid and binding;






	7.1.10	 	No immunity






	 	 	no Security Party nor any of their assets is entitled to immunity on the grounds of
sovereignty or otherwise from any Proceedings whatsoever;




35









 












	7.1.11	 	Financial statements correct and complete






	 	 	the latest audited and unaudited consolidated financial statements of the Corporate
Guarantor in respect of the relevant financial year as delivered to the Agent and present
or will present fairly and accurately the financial position of the Corporate Guarantor
and the consolidated financial position of the Group as at the date thereof and the
results of the operations of the Corporate Guarantor and the consolidated results of the
operations of the Group for the financial year ended on such date and, as at such date,
neither the Corporate Guarantor nor any of its subsidiaries had any significant
liabilities (contingent or otherwise) or any unrealised or anticipated losses which are
not disclosed by, or reserved against or provided for in, such financial statements;






	7.1.12	 	Pari passu






	 	 	the obligations of the Borrower under this Agreement are direct, general and unconditional
obligations of the Borrower and rank at least pari passu with all other present and future
unsecured and unsubordinated Indebtedness of the Borrower except for obligations which are
mandatorily preferred by operation of law and not by contract;






	7.1.13	 	Information/ Material Adverse Effect






	 	 	all information, whatsoever provided by any Security Party to the Agent in connection with
the negotiation and preparation of the Security Documents or otherwise provided hereafter
in relation to, or pursuant to this Agreement is, or will be, true and accurate in all
material respects and not misleading, does or will not omit material facts and all
reasonable enquiries have been, or shall have been, made to verify the facts and
statements contained therein and there has not occurred any event which could have a
Material Adverse Effect on any Security Party since such information was provided to the
Agent; there are, or will be, no other facts the omission of which would make any fact or
statement therein misleading ;






	7.1.14	 	No withholding Taxes






	 	 	no Taxes anywhere are imposed whatsoever by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the Security Documents to
which such Security Party is or is to be a party or are imposed on or by virtue of the
execution or delivery by the Security Parties of the Underlying Documents or the Security




36









 






	 	 	Documents or any other document or instrument to be executed or delivered under any of the
Security Documents;






	7.1.15	 	Indenture






	 	 	The entry by the Borrower into this Agreement, and its borrowing of the Loan
hereunder, and the execution by the Corporate Guarantor of the Corporate Guarantee do not
breach Section 4.10 or any other provision of the Indenture;.






	7.1.16	 	Use of proceeds
	 
	 	 	the Borrower shall apply the Loan only for the purposes specified in clauses 1.1 and 2.1;
	 
	7.1.17	 	The Vessel






	 	 	throughout the Facility Period, the Vessel will, following the Delivery date, be :






	 	(a)	 	in the absolute sole, legal and beneficial ownership of the Borrower;






	 	(b)	 	registered through the offices of the Registry as a ship under the laws and
flag of the Flag State;






	 	(c)	 	in compliance with the ISM Code and the ISPS Code and operationally
seaworthy and in every way fit for service;






	 	(d)	 	in good and sea-worthy and cargo-worthy condition; and






	 	(e)	 	classed with the Classification free of all outstanding requirements and
recommendations of the Classification Society.






	7.1.18	 	Vessel’s employment






	 	 	except with the prior written consent of the Agent, there will not be any agreement or
arrangement whereby the Earnings (as defined in the Ship Security Documents) of the Vessel
may be shared or pooled howsoever with any other person;






	7.1.19	 	Freedom from Encumbrances






	 	 	neither the Vessel nor its Earnings, Insurances or Requisition Compensation (each as
defined in the Ship Security Documents) nor the Earnings Account nor the Approved Charter
nor any




37









 






	 	 	Extended Employment Contract in respect of the Vessel nor any other properties or rights
which are, or are to be, the subject of any of the Security Documents nor any part thereof
will be subject to any Encumbrance except Permitted Encumbrances;






	7.1.20	 	Environmental Matters






	 	 	except as may already have been disclosed by the Borrower in writing to, and acknowledged
and accepted in writing by, the Agent:






	 	(a)	 	the Borrower and, to the best of the Borrower’s knowledge and belief
(having made due enquiry), their respective Environmental Affiliates, have complied
with the provisions of all Environmental Laws;






	 	(b)	 	the Borrower and, to the best of the Borrower’s knowledge and belief
(having made due enquiry), its Environmental Affiliates have obtained all
Environmental Approvals and are in compliance with all such Environmental Approvals;






	 	(c)	 	no Environmental Claim has been made or threatened or pending against the
Borrower, or, to the best of the Borrower’s knowledge and belief (having made due
enquiry), any of their respective Environmental Affiliates; and






	 	(d)	 	there has been no Environmental Incident;






	7.1.21	 	ISM and ISPS Code






	 	 	the Borrower has complied with and continues to comply with and has procured that the
Manager has complied with and continues to comply with the ISM Code, the ISPS Code and all
other statutory and other requirements relative to its business and in particular the
Borrower or the Manager has obtained and maintains a valid DOC and SMC for the Vessel and
that it and the Manager has implemented and continues to implement an ISM SMS;






	7.1.22	 	Copies true and complete






	 	 	the Certified Copies or originals of the Underlying Documents delivered or to be delivered
to the Agent pursuant to clause 8.1 are, or will when delivered be, true and complete
copies or, as the case may be, originals of such documents; and such documents constitute
valid and binding obligations of the parties thereto enforceable in accordance with their
respective terms and there have been no amendments or variations thereof or defaults
thereunder;




38









 












	7.1.23	 	the Borrower is the ultimate beneficiary of the Loan;






	7.1.24	 	no Security Party has incurred any Indebtedness save under the Indenture, the Second
Indenture, this Agreement or as otherwise disclosed to the Agent in writing or as disclosed in
the Group’s public filings;






	7.1.25	 	the Corporate Guarantor and the Borrower have filed all tax and other fiscal returns
required to be filed by any tax authority to which they are subject;






	7.1.26	 	the Borrower does not have an office in England.






	7.2	 	Repetition of representations and warranties






	 	 	On each day throughout the Facility Period, the Borrower shall be deemed to repeat the
representations and warranties in clause 7 updated mutatis mutandis as if made with
reference to the facts and circumstances existing on such day.






	8	 	UNDERTAKINGS
	 
	8.1	 	General






	 	 	The Borrower undertakes with each Bank that, from the Execution Date until the end of the
Facility Period, it will:






	8.1.1	 	Notice of Default and Proceedings






	 	 	promptly inform the Agent of (a) any Default (including the occurrence of any Event of
Default under (and as defined in) the Indenture, in which case the Borrower shall also
provide to the Agent copies of all demands or notices made in connection therewith) and of
any other circumstances or occurrence which might adversely affect the ability of any
Security Party to perform its obligations under any of the Security Documents and (b) as
soon as the same is instituted or threatened, details of any Proceedings involving any
Security Party which could have a material adverse effect on that Security Party and/or
the operation of the Vessel (including, but not limited to any Total Loss of the Vessel
or the occurrence of any Environmental Incident) and will from time to time, if so
requested by the Agent, confirm to the Agent in writing that, save as otherwise stated in
such confirmation, no Default has occurred and is continuing and no such Proceedings are
on foot or threatened;




39









 












	8.1.2	 	Authorisation






	 	 	obtain or cause to be obtained, maintain in full force and effect and comply fully with
all Required Authorisations, provide the Agent with Certified Copies of the same and do,
or cause to be done, all other acts and things which may from time to time be necessary or
desirable under any applicable law (whether or not in the Pertinent Jurisdiction) for the
continued due performance of all the obligations of the Security Parties under each of the
Security Documents;






	8.1.3	 	Corporate Existence






	 	 	ensure that each Security Party maintains its corporate existence as a body corporate duly
organised and validly existing and in good standing under the laws of the Pertinent
Jurisdiction;






	8.1.4	 	Use of proceeds
	 
	 	 	use the Advances exclusively for the purposes specified in clauses 1.1 and 2.1;
	 
	8.1.5	 	Pari passu






	 	 	ensure that their obligations under this Agreement shall at all times rank at least pari
passu with all their other present and future unsecured and unsubordinated Indebtedness
with the exception of any obligations which are mandatorily preferred by law and not by
contract;






	8.1.6	 	Financial statements






	 	 	provide to the Agent:






	 	 	 (a) within 75 days after the end of each of the first three fiscal quarters in each
fiscal year,
quarterly reports on US Form 6-K (or any successor form) in respect of the Corporate
Guarantor containing unaudited financial statements (including a balance sheet and
statement of income, changes in stockholders’ equity and cash flow) and a
management’s discussion and analysis of financial condition and results of operations
(or equivalent disclosure) for and as of the end of such fiscal quarter (with
comparable financial statements for the corresponding fiscal quarter of the
immediately preceding fiscal year);




40









 












	 	 	 (b) within 150 days after the end of each fiscal year of the Corporate
Guarantor, an annual report on US Form 20-F (or any successor form) in respect of the
Corporate Guarantor containing the information required to be contained therein for
such fiscal year; and






	 	 	 (c) at or prior to such times as would be required to be filed or furnished to the SEC (as
defined in the Indenture) (hereinafter, the “SEC”) if the Corporate Guarantor was then a
“foreign private issuer” subject to Section 13(a) or 15(d) of the US Exchange Act, all
such other reports and information that the Corporate Guarantor would have been required
to file pursuant thereto






	 	 	 (d) a copy of all such information and reports referred to in clauses (1) to (3)
(inclusive) of Section 4.17(a) of the Indenture within the time periods specified therein
(unless the SEC shall not accept such a filing) and, upon the Agent’s request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act






	 	 	Provided that, in relation to (a), (b) and (c) above, to the extent that the Corporate
Guarantor ceases to qualify as a “foreign private issuer” within the meaning of the US
Exchange Act, whether or not the Corporate Guarantor is then subject to Section 13(a) or
15(d) of the US Exchange Act, the Borrower shall furnish to the Agent, so long as any
Notes (as defined in the Indenture) are outstanding, within 30 days of the respective
dates on which the Corporate Guarantor would be required to file such documents with the
SEC if it was required to file such documents under the US Exchange Act, all reports and
other information that would be required to be filed with (or furnished to) the SEC
pursuant to Section 13(a) or 15(d) of the US Exchange Act.






	8.1.7	 	Reimbursement of MII & MAP Policy premiums






	 	 	Whether or not any amount is borrowed under this Agreement, reimburse each Bank on the
Agent’s written demand the amount of the premium payable by such Bank for the inception
or, as the case may be, extension and/or continuance of the MII & MAP Policy (including
any insurance tax thereon);






	8.1.8	 	Compliance Certificates






	 	 	deliver to the Agent on each of (a) the earlier of (i) the date on which the annual
reports are delivered under clause 8.1.6(b) and (ii) the date falling 150 days after the
end of the financial




41









 






	 	 	year to which they refer and (b) the earlier of (i) the date on which the second quarterly
reports in each financial year are delivered under clause 8.1.6(a) and (ii) the date
falling 75 days after the financial quarter to which they refer, a Compliance Certificate
together with such supporting information as the Agent may require together with a
valuation of all ocean-going ships owned by a Group Member which is a wholly-owned
subsidiary of the Corporate Guarantor.






	8.1.9	 	Provision of further information






	 	 	provide the Agent, and procure that the Corporate Guarantor and the Manager shall provide
the Agent, with such financial or other information concerning the Borrower, the Corporate
Guarantor and their respective affairs, activities, financial standing, Indebtedness and
operations and the performance of the Vessel and any other ship owned by any Group Member
as the Agent may from time to time reasonably require and, without the need for any
request therefor provide to the Agent information of any significant nature in respect of
the Borrower and/or the Corporate Guarantor and/or any other Group Member including, but
not limited to, details of any loans borrowed or repaid by any of them, the purchase or
sale of any substantial assets (including ships) by any of them and/or the restructuring
of any loan of which any of them is a borrower;






	8.1.10	 	Obligations under Security Documents






	 	 	duly and punctually perform each of the obligations expressed to be imposed or assumed by
them under the Security Documents and Underlying Documents and will procure that each of
the other Security Parties will, duly and punctually perform each of the obligations
expressed to be assumed by it under the Security Documents and the Underlying Documents to
which it is party;






	8.1.11	 	Compliance with ISM Code






	 	 	comply with, and will procure that any Operator will comply with, and ensure that the
Vessel and any Operator comply with the requirements of the ISM Code, including (but not
limited to) the maintenance and renewal of valid certificates pursuant thereto throughout
the Security Period (as defined in the Mortgage);




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	8.1.12	 	Withdrawal of DOC and SMC






	 	 	immediately inform the Agent if there is any actual withdrawal of their or any Operator’s
DOC or the SMC of the Vessel;






	8.1.13	 	Issuance of DOC and SMC






	 	 	and will procure that any Operator will promptly inform the Agent of the receipt by the
Borrower or any Operator of notification that its application for a DOC or any application
for an SMC for the Vessel has been refused;






	8.1.14	 	ISPS Code Compliance






	 	 	and will procure that the Manager or any Operator will:






	 	(a)	 	maintain at all times a valid and current ISSC in respect of the Vessel;






	 	(b)	 	immediately notify the Agent in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of the
Vessel; and






	 	(c)	 	procure that the Vessel will comply at all times with the ISPS Code;






	8.1.15	 	Compliance with Laws and payment of taxes






	 	 	and will comply with all relevant Environmental Laws, laws, statutes and regulations
(including, but not limited to, laws relating to any trading prohibition imposed by the
Flag State, the country of incorporation of the Borrower or the country of nationality of
any crew member of the Vessel by which such Borrower is bound) and pay all taxes for which
it is liable as they fall due;






	8.1.16	 	Charters etc.






	 	 	 (i) deliver to the Agent a Certified Copy of each Extended Employment Contract upon its
execution, (ii) forthwith on the Agent’s request execute (a) a Charter Assignment and
Charter Insurance Assignment in respect thereof and (b) any notices of assignment required
in connection therewith and use reasonable efforts to procure the acknowledgement of any
such notice of assignment by the relevant charterer (provided that any failure to procure
the same shall not constitute an Event of Default) and (iii) pay all legal and other costs
incurred by the




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	 	 	Agent in connection with any such Charter Assignments, forthwith following the Agent’s demand;
	 
	8.1.17	 	New charter






	 	 	if the Approved Charter is terminated other than by mere effluxion of time, no later than
the date falling three months after the date of such termination (a) employ the Vessel
under a time charterparty, contract of affreightment or other contract of employment on
terms and in a form approved in writing by (i) if the insurers are making payments in
respect of such termination, the said insurer, or (ii) if the said insurers are not making
payments, the Banks, (b) provide evidence that Charter Insurances have been placed, taken
out or entered into in respect thereof on terms and in a form approved in writing by the
Banks and (c) execute a Charter Insurance Assignment in respect thereof;






	8.1.18	 	Indenture






	 	 	comply with all of the obligations undertaken by the Corporate Guarantor under the
Indenture which are set out in the Indenture Excerpt and the Borrower further agrees:






	 	 	 (a) any terms defined in the Indenture shall have those meanings when used in the
Indenture Excerpt;






	 	 	 (b) no waiver or variation of any term of the Indenture by any person shall waive or vary
the Borrower’s obligations hereunder to comply with the obligations in the Indenture
Excerpt, except with the consent of the Agent;






	 	 	 (c) the Borrower shall continue to be bound by their, or as the case may be, the Corporate
Guarantor’s obligations as set out in the Indenture Excerpt following a Covenant
Defeasance (as defined in the Indenture) or a Legal Defeasance (as defined in the
Indenture) or other termination or cancellation of the Indenture;






	 	 	 (d) the Borrower will not, and will procure that the Corporate Guarantor will not, vary any
term of the Indenture without the prior written consent of the Banks.






	8.1.19	 	Subordination






	 	 	Ensure that all Indebtedness of the Borrower to its shareholders or to any other Group
Member is fully subordinated, and to subordinate any Indebtedness issued to it by the






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	 	 	Corporate Guarantor, all in a form acceptable to the Agent (acting on the
instructions of the Majority Lenders).






	8.2	 	Security value maintenance






	8.2.1	 	Security shortfall






	 	 	If, at any time after the Delivery Date, the Security Value shall be less than the
Required Security Amount, the Agent (acting on the instructions of the Majority Lenders)
shall give notice to the Borrower requiring that such deficiency be remedied and then the
Borrower must either:






	 	(a)	 	prepay within a period of thirty (30) days of the date of receipt by the
Borrower of the Agent’s said notice such part of the Loan as will result in the
Security Value after such prepayment (taking into account any other repayment of the
Loan made between the date of the notice and the date of such prepayment) being equal
to or higher than the Required Security Amount; or






	 	(b)	 	within thirty (30) days of the date of receipt by the Borrower of the
Agent’s said notice constitute to the satisfaction of the Agent such further security
for the Loan as shall be acceptable to the Majority Lenders having a value for
security purposes (as determined by the Agent in its absolute discretion) at the date
upon which such further security shall be constituted which, when added to the
Security Value, shall not be less than the Required Security Amount as at such date.






	 	 	The provisions of clauses 4.5 and 4.6 shall apply to prepayments under clause 8.2.1(a)
provided that the Bank shall apply such prepayments in pro rata reduction of the repayment
instalments under clause 4.1 and the amounts of the Loan prepaid hereunder shall not be
available to be re-borrowed.






	8.2.2	 	Valuation of Vessel






	 	 	The Vessel shall, for the purposes of this Agreement, be valued (at the Borrower’s
expense) in USD by taking a valuation prepared by any Approved Broker appointed by the
Borrower, such valuation to be made without physical inspection, and on the basis of a
sale for prompt delivery for cash at arms’ length, on normal commercial terms, as between
a willing buyer and a willing seller without taking into account the benefit of any
charterparty or other engagement concerning the Vessel provided that the Agent may, in its
discretion request a




45









 






	 	 	second valuation (on the same terms) from a second Approved Broker and if such two
valuations vary by more than 15%, then the Agent shall appoint a third Approved Broker to
provide a valuation and the Valuation amount shall be the average of such three
valuations, such valuations to be obtained:






	 	(a)	 	On the date falling six months after the Delivery Date and twice yearly
thereafter and






	 	(b)	 	(in addition to (a) above) at any other time as the Agent (acting on the
instructions of the Majority Lenders) shall additionally require, at the cost of the
Lenders






	 	 	The Approved Brokers’ valuations, or, as the case may be, the average of such valuations,
for the Vessel on each such occasion shall constitute the Valuation Amount of the Vessel
for the purposes of this Agreement until superseded by the next such valuation.






	8.2.3	 	Information






	 	 	The Borrower undertakes with the Banks to supply to the Agent and to the Approved Broker
such information concerning the Vessel and its condition as such shipbrokers may require
for the purpose of determining any Valuation Amount.






	8.2.4	 	Costs






	 	 	All costs in connection with the obtaining and any determining of any Valuation Amount
pursuant to Clause 8.2.2 and any valuation either of any additional security for the
purposes of ascertaining the Security Value at any time or necessitated by the Borrower
electing to constitute additional security pursuant to clause 8.2.1(b), must be paid by
the Borrower.






	8.2.5	 	Valuation of additional security






	 	 	For the purposes of this clause 8.2, the market value (i) of any additional security over
a ship (other than the Vessel) shall be determined in accordance with clause 8.2.2 and
(ii) of any other additional security provided or to be provided to the Banks or any of
them shall be determined by the Agent in its absolute discretion.






	8.2.6	 	Documents and evidence






	 	 	In connection with any additional security provided in accordance with this clause 8.2,
the Agent shall be entitled to receive (at the Borrower’s expense) such evidence and
documents of




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	 	 	the kind referred to in schedule 3 as may in the Agent’s opinion be appropriate and such
favourable legal opinions as the Agent shall in its absolute discretion require.






	8.3	 	Indenture






	 	 	Notwithstanding anything in this Agreement:






(i) any terms, transactions or events permitted by the Indenture Excerpt and




(ii) save as otherwise expressly provided in this Agreement, any other terms or
transactions or events permitted by the Indenture




	 	 	shall be deemed to be permitted by this Agreement.
	 
	8.4	 	Financial Covenants of the Group






	 	 	The Borrower shall procure that






	 	(a)	 	at no time shall the Liquidity of the Group be less than the Minimum
Liquidity;
	 
	 	(b)	 	the ratio of Consolidated Cash Flow (defined and applied as set out in the
Indenture Extract, which definition shall not be varied without the Lenders’ consent,
irrespective of any variation of the Indenture itself) to Fixed Charges (defined and
applied as set out in the Indenture Extract which definition shall not be varied
without the Lenders’ consent irrespective of any variation of the Indenture itself)
on a 12 month trailing basis as applied in the Indenture shall at all times be at
least 2 to 1; and
	 
	 	(c)	 	the Total Liabilities divided by the Total Assets (adjusted for market
values of vessels calculated in accordance with Clause 8.2.2 (but taking into account
any charter in respect of which Charter Insurances are in place)) shall be less than
75%.






	8.5	 	Negative undertakings






	 	 	The Borrower undertakes with each Bank that, from the Execution Date until the end of the
Facility Period, it will not, without the prior written consent of the Agent (acting on
the instructions of the Majority Lenders):




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	8.5.1	 	Negative pledge






	 	 	permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be
created or extended over all or any part of its present or future undertakings, assets,
rights or revenues to secure or prefer any present or future Indebtedness or other
liability or obligation of any Group Member or any other person other than liens against
the Vessel arising in the ordinary course of business and which are no more than 30 days
overdue;






	8.5.2	 	No merger or transfer






	 	 	merge or consolidate with any other person or permit any change to the legal or beneficial
ownership of its shares from that existing at the Execution Date;






	8.5.3	 	Disposals






	 	 	sell, transfer, assign, create security or option over, pledge, pool, abandon, lend or
otherwise dispose of or cease to exercise direct control over any part of its present or
future undertaking, assets, rights or revenues (otherwise than by transfers, sales or
disposals for full consideration in the ordinary course of trading) whether by one or a
series of transactions related or not;






	8.5.4	 	Other business or manager






	 	 	undertake any business other than the ownership and operation of the Vessel or (without
the prior written consent of the Agent, such consent not to be unreasonably withheld)
employ anyone other than the Manager as commercial and technical manager of the Vessel;






	8.5.5	 	Acquisitions






	 	 	acquire any assets other than the Vessel and rights arising under contracts entered into
by it or on its behalf in the ordinary course of its business of owning, operating and
chartering the Vessel;






	8.5.6	 	Other obligations






	 	 	incur any obligations except for obligations arising under the Underlying Documents or the
Security Documents or contracts entered into in the ordinary course of its business of
owning, operating and chartering the Vessel;






	8.5.7	 	No borrowing




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	 	 	incur any Borrowed Money except for Borrowed Money pursuant to the Security Documents.
	 
	8.5.8	 	Repayment of borrowings






	 	 	repay or prepay the principal of, or pay interest on or any other sum in connection with
any Borrowed Money except for Borrowed Money pursuant to the Security Documents;






	8.5.9	 	Guarantees






	 	 	Other than pursuant to the Indenture or the Second Indenture, issue any guarantees or
otherwise become directly or contingently liable for the obligations of any person, firm,
or corporation except pursuant to the Security Documents and except for guarantees from
time to time required in the ordinary course by any protection and indemnity or war risks
association with which the Vessel is entered, guarantees required to procure the release
of the Vessel from any arrest, detention, attachment or levy or guarantees required for
the salvage of the Vessel;






	8.5.10	 	Loans






	 	 	make any loans or grant any credit (save for normal trade credit in the ordinary course of
business) to any person or agree to do so;






	8.5.11	 	Sureties






	 	 	permit any Indebtedness of the Borrower to any person (other than the Banks pursuant to
the Security Documents) to be guaranteed by any person (except for guarantees from time to
time required in the ordinary course by any protection and indemnity or war risks
association with which the Vessel is entered, guarantees required to procure the release
of the Vessel from any arrest, detention, attachment or levy or guarantees or undertakings
required for the salvage of the Vessel and guarantees in favour of the Builder in respect
of the Shipbuilding Contract);






	8.5.12	 	Share capital






	 	 	create or permit to arise any Encumbrance (other than Permitted Encumbrances) over the
shares in the Borrower;






	8.5.13	 	Subsidiaries
	 
	 	 	form or acquire any subsidiaries;




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	8.5.14	 	Approved Charter






	 	 	without prejudice to clause 4.1 of the Charter Assignment:






	 	(a)	 	agree to shorten the tenor of the Approved Charter; or






	 	(b)	 	agree to reduce the charter hire payable under the Approved Charter.






	 	 	without the prior written consent of the Agent (acting on the instructions of the Majority
Lenders) and then, if such consent is given, only subject to such conditions as the Agent
(acting on the instructions of the Majority Lenders) may impose, let or agree to let the
Vessel:






	 	(i)	 	on demise charter for any period; or






	 	(ii)	 	by any time or consecutive voyage charter for a term which exceeds or which
by virtue of any optional extensions therein contained may exceed twelve (12) months’
duration; or






	 	(iii)	 	on terms whereby more than two (2) months’ hire (or the equivalent) is
payable in advance; or






	 	(iv)	 	below a fair and reasonable arms-length rate obtainable at the time when
the Vessel is fixed;






	8.5.15	 	Flag, Class etc.






	 	 	permit, without the prior written consent of the Agent (such consent not to be
unreasonably withheld):






	 	(a)	 	any change of flag of the Vessel; or






	 	(b)	 	any change of Classification Society or Classification in respect of the
Vessel; or






	8.5.16	 	Group Members






	 	 	enter into any business or other relationship with any other Group Member other than on
arms length terms.






	9	 	CONDITIONS






	9.1	 	Advance of an Advance




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	 	 	The obligation of each Lender to make its Commitment available in respect of an Advance is
conditional upon:






	9.1.1	 	that, on or before the service of the first Drawdown Notice hereunder, the Agent has
received the documents described in Part A of Schedule 3 in form and substance satisfactory to
the Agent and its lawyers;






	9.1.2	 	that, on or before drawdown of the Advance referred to in Clause 2.5.1(a), the Agent has
received the documents described in Part B of Schedule 3 in respect of the Vessel (as defined
in Schedule 3) in form and substance satisfactory to the Agent and its lawyers;






	9.1.3	 	that, on or before the service of the Drawdown Notice in respect of the Advance relating to
the keel-laying instalment payable under the Shipbuilding Contract, the Agent has received the
documents described in Part C of Schedule 3 in respect of the Vessel in form and substance
satisfactory to the Agent and its lawyers






	9.1.4	 	that, on or before service of the Drawdown Notice in respect of the Advance relating to the
launching instalment payable under the Shipbuilding Contract, the Agent has received the
documents described in Part D of Schedule 3 in respect of the Vessel in form and substance
satisfactory to the Agent and its lawyers;






	9.1.5	 	that on or before the service of the Drawdown Notice in respect of the Advance relating to
the delivery instalment payable under the Shipbuilding Contract, the Agent has received the
documents described in Part E of Schedule 3 in respect of the Vessel in form and substance
satisfactory to the Agent and its lawyers;






	9.1.6	 	the representations and warranties contained in clause 7 and clauses 4.1 and 4.2 of the
Corporate Guarantee being then true and correct as if each was made with respect to the facts
and circumstances existing at such time; and






	9.1.7	 	no Default having occurred and being continuing and there being no Default which would
result from the making of the Loan.






	9.2	 	Waiver of conditions precedent






	 	 	The conditions specified in this clause 9 are inserted solely for the benefit of the
Lenders and may be waived by the Agent in whole or in part and with or without conditions
only with the consent of the Majority Lenders.




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	9.3	 	Further conditions precedent






	 	 	Not later than five (5) Banking Days prior to the Drawdown Date of an Advance and not
later than five (5) Banking Days prior to any Interest Payment Date, the Agent (acting on
the instructions of the Majority Lenders) may request and the Borrower must, not later
than two (2) Banking Days prior to such date, deliver to the Agent (at the Borrower’s
expense) on such request further favourable certificates and/or opinions as to any or all
of the matters which are the subject of clauses 7, 8, 9 and 10.






	10	 	EVENTS OF DEFAULT






	10.1	 	Events






	 	 	Each of the following events shall constitute an Event of Default (whether such event
shall occur voluntarily or involuntarily or by operation of law or regulation or in
connection with any judgment, decree or order of any court or other authority or
otherwise, howsoever):






	10.1.1	 	Non-payment: any Security Party fails to pay any sum payable by it under any of the Security
Documents at the time, in the currency and in the manner stipulated in the Security Documents
or the Underlying Documents (and so that, for this purpose, sums payable (i) under clauses 3.1
and 4.1 shall be treated as having been paid at the stipulated time if (aa) received by the
Agent within two (2) days of the dates therein referred to and (bb) such delay in receipt is
caused by administrative or other delays or errors within the banking system and (ii) on
demand shall be treated as having been paid at the stipulated time if paid within two (2)
Banking Days of demand); or






	10.1.2	 	Breach of Insurance and certain other obligations: the Borrower or, as the context may
require, the Manager or any other person fails to obtain and/or maintain the Insurances (as
defined in, and in accordance with the requirements of, the Ship Security Documents) for the
Vessel or if any insurer in respect of such Insurances cancels the Insurances or disclaims
liability by reason, in either case, of mis-statement in any proposal for the Insurances or
for any other failure or default on the part of the Borrower or any other person or the
Borrower commits any breach of or omits to observe any of the obligations or undertakings
expressed to be assumed by them under clause 8; or






	10.1.3	 	Breach of other obligations: any Security Party commits any breach of or omits to observe
any of its obligations or undertakings expressed to be assumed by it under any of the Security




52









 






	 	 	Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above) unless such
breach or omission, in the opinion of the Agent (following consultation with the Banks) is
capable of remedy, in which case the same shall constitute an Event of Default if it has
not been remedied within fifteen (15) days of the occurrence thereof; or






	10.1.4	 	Misrepresentation: any representation or warranty made or deemed to be made or repeated by
or in respect of any Security Party in or pursuant to any of the Security Documents or in any
notice, certificate or statement referred to in or delivered under any of the Security
Documents is or proves to have been incorrect or misleading in any material respect; or






	10.1.5	 	Cross-default: There shall occur a default (howsoever therein described) under the Indenture
or any Indebtedness of the Borrower or any Indebtedness in excess of USD5,000,000 of any
Security Party is not paid when due (subject to applicable grace periods) or any such
Indebtedness of the Borrower or any Security Party becomes (whether by declaration or
automatically in accordance with the relevant agreement or instrument constituting the same)
due and payable prior to the date when it would otherwise have become due (unless as a result
of the exercise by the Borrower or Security Party of a voluntary right of prepayment), or any
creditor of the Borrower or any Security Party becomes entitled to declare any such
Indebtedness due and payable or any facility or commitment available to the Borrower or any
Security Party relating to Indebtedness is withdrawn, suspended or cancelled by reason of any
default (however described) of the person concerned; or






	10.1.6	 	Execution: any uninsured judgment or order made against any Security Party is not stayed,
appealed against or complied with within fifteen (15) days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is levied or enforced
upon or sued out against, any of the undertakings, assets, rights or revenues of any Security
Party and is not discharged within thirty (30) days; or






	10.1.7	 	Insolvency: any Security Party or any Group Member is unable or admits inability to pay its
debts as they fall due; suspends making payments on any of its debts or announces an intention
to do so; becomes insolvent; or has negative net worth (taking into account contingent
liabilities); or suffers the declaration of a moratorium in respect of any of its
Indebtedness; or






	10.1.8	 	Reduction or loss of capital: a meeting is convened by any Security Party (other than the
Corporate Guarantor) without the Agent’s prior written consent, for the purpose of passing




53









 






	 	 	any resolution to purchase, reduce or redeem any of its share capital without the Agent’s
prior written consent; or






	10.1.9	 	Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or
wind-up any Security Party or any Group Member or an order is made or resolution passed for
the dissolution or winding up of any Security Party or any Group Member or a notice is issued
convening a meeting for such purpose; or






	10.1.10	 	Administration: any petition is presented, notice given or other steps are taken anywhere
to appoint an administrator of any Security Party or any Group Member or the Agent believes
that any such petition or other step is imminent or an administration order is made in
relation to any Security Party or any Group Member; or






	10.1.11	 	Appointment of receivers and managers: any administrative or other receiver is appointed
anywhere of any Security Party or any Group Member or any part of its assets and/or
undertaking or any other steps are taken to enforce any Encumbrance over all or any part of
the assets of any Security Party or any Group Member; or






	10.1.12	 	Compositions: any corporate action, legal proceedings or other procedures or steps are
taken, or negotiations commenced, by any Security Party or any Group Member or by any of its
creditors with a view to the general readjustment or rescheduling of all or part of its
Indebtedness or to proposing any kind of composition, compromise or arrangement involving such
company and any of its creditors; or






	10.1.13	 	Analogous proceedings: there occurs, in relation to any Security Party or any Group Member,
in any country or territory in which any of them carries on business or to the jurisdiction of
whose courts any part of their assets is subject, any event which, in the reasonable opinion
of the Agent, appears in that country or territory to correspond with, or have an effect
equivalent or similar to, any of those mentioned in clauses 10.1.6 to 10.1.12 (inclusive) or
any Security Party or any Group Member otherwise becomes subject, in any such country or
territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or






	10.1.14	 	Cessation of business: any Security Party suspends or ceases or threatens to suspend or
cease to carry on its business without the prior written consent of the Agent, such consent
not to be unreasonably withheld; or




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	10.1.15	 	Seizure: all or a material part of the undertaking, assets, rights or revenues of, or
shares or other ownership interests in, any Security Party are seized, nationalised,
expropriated or compulsorily acquired by or under the authority of any Government Entity; or






	10.1.16	 	Invalidity: any of the Security Documents and the Underlying Documents shall at any time
and for any reason become invalid or unenforceable or otherwise cease to remain in full force
and effect, or if the validity or enforceability of any of the Security Documents and the
Underlying Documents shall at any time and for any reason be contested by any Security Party
which is a party thereto, or if any such Security Party shall deny that it has any, or any
further, liability thereunder; or






	10.1.17	 	Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for
any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by
it in any of the Security Documents or for a Bank to exercise the rights or any of them vested
in it under any of the Security Documents or otherwise; or






	10.1.18	 	Repudiation: any Security Party repudiates any of the Security Documents or does or causes
or permits to be done any act or thing evidencing an intention to repudiate any of the
Security Documents; or






	10.1.19	 	Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of
the property (or part thereof) which is the subject of any of the Security Documents becomes
enforceable; or






	10.1.20	 	Arrest: the Vessel is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory lien or other claim or
otherwise taken from the possession of the Borrower and the Borrower shall fail to procure the
release of the Vessel within a period of fifteen (15) (or in the case of capture of the Vessel
by pirates, ninety (90)) days thereafter; or






	10.1.21	 	Registration: the registration of the Vessel under the laws and flag of the Flag State is
cancelled or terminated without the prior written consent of the Majority Banks; or






	10.1.22	 	Unrest: the Flag State or the country in which any Security Party is incorporated or
domiciled becomes involved in hostilities or civil war or there is a seizure of power in the
Flag State by unconstitutional means unless the Borrower shall have transferred the Vessel
onto a new flag




55









 






	 	 	acceptable to the Banks within sixty (60) days of the start of such hostilities or civil
war or seizure of power; or






	10.1.23	 	Environmental Incidents: an Environmental Incident occurs which gives rise, or may give
rise, to an Environmental Claim which could, in the opinion of the Agent be expected to have a
material adverse effect (i) on the business, assets or financial condition of any Security
Party or the Group taken as a whole or (ii) on the security constituted by any of the Security
Documents or the enforceability of that security in accordance with its terms; or






	10.1.24	 	P&I: the Borrower or the Manager or any other person fails or omits to comply with any
requirements of the protection and indemnity association or other insurer with which the
Vessel is entered for insurance or insured against protection and indemnity risks (including
oil pollution risks) to the effect that any cover (including, without limitation, any cover in
respect of liability for Environmental Claims arising in jurisdictions where the Vessel
operates or trades) is or may be liable to cancellation, qualification or exclusion at any
time; or






	10.1.25	 	Material events: any other event occurs or circumstance arises which, in the opinion of the
Agent (following consultation with the Banks), is likely materially and adversely to affect
either (i) the ability of any Security Party to perform all or any of its obligations under or
otherwise to comply with the terms of any of the Security Documents or (ii) the security
created by any of the Security Documents; or






	10.1.26	 	Required Authorisations: any Required Authorisation is revoked or withheld or modified or
is otherwise not granted or fails to remain in full force and effect or if any exchange
control or other law or regulation shall exist which would make any transaction under the
Security Documents or the continuation thereof, unlawful or would prevent the performance by
any Security Party of any term of any of the Security Documents;






	10.1.27	 	Ownership: there is any change in the ownership of the Borrower without the prior written
consent of the Agent; or






	10.1.28	 	Shipbuilding Contract/Refund Guarantee: the Shipbuilding Contract or the Refund Guarantee
is terminated, cancelled, revoked, suspended, rescinded, transferred, novated or otherwise
ceases to remain in full force and effect for any reason except with the consent of the Banks;




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	10.1.29	 	Charter Insurance: the Charter Insurances in respect of the Vessel are terminated,
cancelled, revoked, suspended, rescinded, transferred, novated or otherwise cease to remain in
full force and effect for any reason except with the consent of the Banks; or






	10.1.29	 	Money Laundering: any Security Party is in breach of or fails to observe any law,
requirement, measure or procedure implemented to combat “money laundering” as defined in
Article 1 of the Directive (91/308 EEC) of the Council of the European Communities; or






	10.1.30	 	Change of Control. There shall occur a “Change of Control” (as defined in the Indenture)
of the Corporate Guarantor or the “Permitted Holder” (as defined in the Indenture) owns less
than 20% of the issued share capital of the Corporate Guarantor; or






	10.1.31	 	Existing Loan Agreement. There shall occur under the Existing Loan Agreement a Default (as
therein defined); or






	10.1.32	 	Master Agreement: (i) an Event of Default or Potential Event of Default (in each case as
defined in the Master Agreement) has occurred and is continuing under the Master Agreement or
(ii) an Early Termination Date (as defined in the Master Agreement) has occurred or been
effectively designated under the Master Agreement or (iii) a person entitled to do so gives
notice of an Early Termination Date (as defined in the Master Agreement) or (iv) the Master
Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to
remain in full force and effect for any reason.






	10.2	 	Acceleration






	 	 	The Agent may, and if so requested by the Majority Lenders shall, without prejudice to any
other rights of the Lenders, at any time after the happening of an Event of Default by
notice to the Borrower declare that:






	10.2.1	 	the obligation of each Lender to make its Commitment available shall be terminated,
whereupon the Commitment shall be reduced to zero forthwith; and/or






	10.2.2	 	the Loan and all interest accrued and all other sums payable whatsoever under the Security
Documents have become due and payable, whereupon the same shall, immediately or in accordance
with the terms of such notice, become due and payable.






	10.3	 	Demand Basis




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	 	 	If, under clause 10.2.2, the Agent has declared the Loan to be due and payable on demand,
at any time thereafter the Agent may (and if so instructed by the Majority Lenders shall)
by written notice to the Borrower (a) demand repayment of the g Loan on such date as may
be specified whereupon, regardless of any other provision of this Agreement, the Loan
shall become due and payable on the date so specified together with all interest accrued
and all other sums payable under this Agreement or (b) withdraw such declaration with
effect from the date specified in such notice.






	11	 	INDEMNITIES






	11.1	 	General indemnity






	 	 	The Borrower agrees to indemnify each Bank on demand, without prejudice to any of such
Bank’s other rights under any of the Security Documents, against any loss (including loss
of Margin) or expense (including, without limitation, Break Costs) which such Bank shall
certify as sustained by it as a consequence of any Default, any prepayment of the Loan
being made under clauses 4.3, 4.4, 8.2.1(a) or 12.1 or any other repayment or prepayment
of the Loan or part thereof being made otherwise than on an Interest Payment Date relating
to the part of the Loan prepaid or repaid; and/or either Advance not being made for any
reason (excluding any default by the Agent, the Agent or any Lender) after the Drawdown
Notice for such Advance has been given.






	11.2	 	Environmental indemnity






	 	 	The Borrower shall indemnify each Bank on demand and hold it harmless from and against all
costs, claims, expenses, payments, charges, losses, demands, liabilities, actions,
Proceedings, penalties, fines, damages, judgements, orders, sanctions or other outgoings
of whatever nature which may be incurred or made or asserted whensoever against such Bank
at any time, whether before or after the repayment in full of principal and interest under
this Agreement, arising howsoever out of an Environmental Claim made or asserted against
such Bank which would not have been, or been capable of being, made or asserted against
such Bank had it not entered into any of the Security Documents or been involved in any of
the resulting or associated transactions.






	11.3	 	Capital adequacy and reserve requirements indemnity




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	 	 	The Borrower shall promptly indemnify each Lender on demand against any cost incurred or
loss suffered by such Lender as a result of its complying with (i) the minimum reserve
requirements from time to time of the European Central Bank (ii) any capital adequacy
directive of the European Union and/or (iii) any revised framework for international
convergence of capital measurements and capital standards and/or any regulation imposed by
any Government Entity in connection therewith, and/or in connection with maintaining
required reserves with a relevant national central bank to the extent that such compliance
or maintenance relates to such Lender’s Commitment and/or Contribution or deposits
obtained by it to fund the whole or part thereof and to the extent such cost or loss is
not recoverable by such Lender under clause 12.2.






	12	 	UNLAWFULNESS AND INCREASED COSTS






	12.1	 	Unlawfulness






	 	 	If it is or becomes contrary to any law, directive or regulation for any Lender to
contribute to an Advance or to maintain its Commitment or fund its Contribution to the
Loan or either Advance, such Lender shall promptly, through the Agent, give notice to the
Borrower whereupon (a) such Lender’s Contribution and Commitment shall be reduced to zero
and (b) the Borrower shall be obliged to prepay such Lender’s Contribution either (i)
forthwith or (ii) on a future specified date not being earlier than the latest date
permitted by the relevant law, directive or regulation together with interest accrued to
the date of prepayment and all other sums payable by the Borrower under this Agreement.






	12.2	 	Increased costs






	 	 	If the result of any change in, or in the interpretation or application of, or the
introduction of, any law or any regulation, request or requirement (whether or not having
the force of law, but, if not having the force of law, with which a Lender or, as the case
may be, its holding company habitually complies), including (without limitation) those
relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and
special deposits, is to:






	12.2.1	 	subject any Lender to Taxes or change the basis of Taxation of any Lender with respect to
any payment under any of the Security Documents (other than Taxes or Taxation on the overall
net income, profits or gains of such Lender imposed in the jurisdiction in which its principal
or lending office under this Agreement is located); and/or




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	12.2.2	 	increase the cost to, or impose an additional cost on, any Lender or its holding company in
making or keeping such Lender’s Commitment available or maintaining or funding all or part of
such Lender’s Contribution; and/or






	12.2.3	 	reduce the amount payable or the effective return to any Lender under any of the Security
Documents; and/or






	12.2.4	 	reduce any Lender’s or its holding company’s rate of return on its overall capital by reason
of a change in the manner in which it is required to allocate capital resources to such
Lender’s obligations under any of the Security Documents; and/or






	12.2.5	 	require any Lender or its holding company to make a payment or forgo a return on or
calculated by reference to any amount received or receivable by such Lender under any of the
Security Documents; and/or






	12.2.6	 	require any Lender or its holding company to incur or sustain a loss (including a loss of
future potential profits) by reason of being obliged to deduct all or part of its Contribution
or the Loan from its capital for regulatory purposes,






	 	 	then and in each such case (subject to clause 12.3):






	 	(a)	 	such Lender shall notify the Borrower in writing of such event promptly
upon its becoming aware of the same; and






	 	(b)	 	the Borrower shall on demand made at any time whether or not such Lender’s
Contribution has been repaid, pay to the Agent for the account of such Lender the
amount which such Lender specifies (in a certificate setting forth the basis of the
computation of such amount but not including any matters which such Lender or its
holding company regards as confidential) is required to compensate such Lender and/or
(as the case may be) its holding company for such liability to Taxes, cost,
reduction, payment , forgone return or loss.






	 	 	For the purposes of this clause 12.2 “holding company” means the company or entity (if
any) within the consolidated supervision of which a Lender is included.






	12.3	 	Exception




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	 	 	Nothing in clause 12.2 shall entitle any Lender to receive any amount in respect of
compensation for any such liability to Taxes, increased or additional cost, reduction,
payment, foregone return or loss to the extent that the same is the subject of an
additional payment under clause 6.6.






	13	 	APPLICATION OF MONEYS, SET OFF, PRO-RATA PAYMENTS AND MISCELLANEOUS






	13.1	 	Application of moneys






	 	 	All moneys received by the Agent and/or the Security Trustee under or pursuant to any of
the Security Documents and expressed to be applicable in accordance with the provisions of
this clause 13.1 or in a manner determined in the Security Trustee’s or (as the case may
be) the Agent’s discretion, shall be applied in the following manner:






	13.1.1	 	first, in or towards payment, on a pro-rata basis, of any unpaid costs and expenses of the
Banks or any of them under any of the Security Documents;






	13.1.2	 	secondly, in or towards payment of any fees payable to the Agent or any of the other Banks
under, or in relation to, the Security Documents which remain unpaid;






	13.1.3	 	thirdly, in or towards payment to the Lenders, on a pro rata basis, of any accrued interest
owing in respect of the Loan which shall have become due under any of the Security Documents
but remains unpaid;






	13.1.4	 	fourthly, in or towards repayment of the Loan and the Advances (in such proportions as the
Lenders require and whether the same is due and payable or not) and shall be applied, in
respect of the Loan, pro rata against the outstanding repayment instalments;






	13.1.5	 	fifthly, in or towards payment to the Lenders, on a pro rata basis any Break Costs and any
other sum relating to the Loan which shall have become due under any of the Security Documents
(other than under or in relation to the Master Agreement) but remains unpaid;






	13.1.6	 	sixthly, in or towards payment to the Swap Bank of any other sum which shall have become due
under the Master Agreement but remains unpaid; and






	13.1.7	 	seventhly, the surplus (if any) shall be paid to the Borrower or to whomsoever else may then
be entitled to receive such surplus.




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	13.2	 	Set-off






	13.2.1	 	The Borrower irrevocably authorises each Bank (without prejudice to any of such Bank’s
rights at law, in equity or otherwise), at any time and without notice to the Borrower, to
apply any credit balance to which the Borrower is then entitled standing upon any account of
the Borrower with any branch of such Bank in or towards satisfaction of any sum due and
payable from the Borrower to such Bank under any of the Security Documents. For this purpose,
each Bank is authorised to purchase with the moneys standing to the credit of such account
such other currencies as may be necessary to effect such application.






	13.2.2	 	No Bank shall be obliged to exercise any right given to it by this clause 13.2. Each Bank
shall notify the Borrower through the Agent forthwith upon the exercise or purported exercise
of any right of set off giving full details in relation thereto and the Agent shall inform the
other Banks.






	13.2.3	 	Nothing in this clause 13.2 shall be effective to create a charge or other security
interest.






	13.3	 	Pro rata payments






	13.3.1	 	If at any time any Lender (the “Recovering Lender”) receives or recovers any amount owing to
it by the Borrower under this Agreement (other than pursuant to any other Security Document)
by direct payment, set-off or in any manner other than by payment through the Agent pursuant
to clauses 6.1 or 6.9 (not being a payment received from a Transferee Bank or a
sub-participant in such Lender’s Contribution or any other payment of an amount due to the
Recovering Lender for its sole account pursuant to clauses 3.6, 5, 6.6, 11.1, 11.2, 11.3,
12.1, or 12.2), the Recovering Lender shall, within two (2) Banking Days of such receipt or
recovery (a “Relevant Receipt”) notify the Agent of the amount of the Relevant Receipt. If the
Relevant Receipt exceeds the amount which the Recovering Lender would have received if the
Relevant Receipt had been received by the Agent and distributed pursuant to clause 6.1 or 6.10
(as the case may be) then:






	 	(a)	 	within two (2) Banking Days of demand by the Agent, the Recovering Lender
shall pay to the Agent an amount equal (or equivalent) to the excess;
	 
	 	(b)	 	the Agent shall treat the excess amount so paid by the Recovering Lender as
if it were a payment made by the Borrower and shall distribute the same to the
Lenders (other than the Recovering Lenders) in accordance with clause 6.10; and




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	 	(c)	 	as between the Borrower and the Recovering Lender the excess amount so
re-distributed shall be treated as not having been paid but the obligations of the
Borrower to the other Lenders shall, to the extent of the amount so re-distributed to
them, be treated as discharged.






	13.3.2	 	If any part of the Relevant Receipt subsequently has to be wholly or partly refunded by the
Recovering Lender (whether to a liquidator or otherwise) each Lender to which any part of such
Relevant Receipt was so re-distributed shall on request from the Recovering Lender repay to
the Recovering Lender such Lender’s pro-rata share of the amount which has to be refunded by
the Recovering Lender.






	13.3.3	 	Each Lender shall on request supply to the Agent such information as the Agent may from time
to time request for the purposes of this clause 13.3.






	13.3.4	 	Notwithstanding the foregoing provisions of this clause 13.3, no Recovering Lender shall be
obliged to share any Relevant Receipt which it receives or recovers pursuant to Proceedings
taken by it to recover any sums owing to it under this Agreement with any other party which
has a legal right to, but does not, either join in such Proceedings or commence and diligently
pursue separate Proceedings to enforce its rights in the same or another court (unless the
Proceedings instituted by the Recovering Lender are instituted by it without prior notice
having been given to such party through the Agent).






	13.4	 	No release






	 	 	For the avoidance of doubt it is hereby declared that failure by any Recovering Lender to
comply with the provisions of clause 13.3 shall not release any other Recovering Lender
from any of its obligations or liabilities under clause 13.3.






	13.5	 	No charge






	 	 	The provisions of this clause 13 shall not, and shall not be construed so as to,
constitute a charge or create or declare a trust by a Lender over all or any part of a sum
received or recovered by it in the circumstances mentioned in clause 13.3.






	13.6	 	Further assurance






	 	 	The Borrower undertakes with each Bank that the Security Documents shall both at the date
of execution and delivery thereof and throughout the Facility Period be valid and binding




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	 	 	obligations of the respective parties thereto which, with the rights of each Lender
thereunder, are enforceable in accordance with their respective terms and that they will,
at their expense, execute, sign, perfect and do, and will procure the execution, signing,
perfecting and doing by each of the other Security Parties of, any and every such further
assurance, document, act or thing as in the reasonable opinion of the Majority Lenders may
be necessary or desirable for perfecting the security contemplated or constituted by the
Security Documents.






	13.7	 	Conflicts






	 	 	In the event of any conflict between this Agreement and any of the other Security
Documents, the provisions of this Agreement shall prevail.






	13.8	 	No implied waivers, remedies cumulative






	 	 	No failure or delay on the part of any of the Banks to exercise any power, right or remedy
under any of the Security Documents shall operate as a waiver thereof, nor shall any
single or partial exercise by any Bank of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy. The
remedies provided in the Security Documents are cumulative and are not exclusive of any
remedies provided by law. No waiver by any Bank shall be effective unless it is in
writing.






	13.9	 	Severability






	 	 	If any provision of this Agreement is prohibited, invalid, illegal or unenforceable in any
jurisdiction, such prohibition, invalidity, illegality or unenforceability shall not
affect or impair howsoever the remaining provisions thereof or affect the validity,
legality or enforceability of such provision in any other jurisdiction.






	13.10	 	Force Majeure






	 	 	Regardless of any other provision of this Agreement, none of the Banks shall be liable
for any failure to perform the whole or any part of this Agreement resulting directly or
indirectly from (i) the action or inaction or purported action of any governmental or
local authority (ii) any strike, lockout, boycott or blockade (including any strike,
lockout, boycott or blockade effected by or upon any Bank or any of its representatives or
employees) (iii) any act of God (iv) any act of war (whether declared or not) or terrorism
(v) any failure of any information technology or other operational systems or equipment
affecting any Bank or (vi) any other circumstances whatsoever outside any Bank’s control.




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	13.11	 	Amendments






	 	 	This Agreement may be amended or varied only by an instrument in writing executed by all
parties hereto who irrevocably agree that the provisions of this clause 13.11 may not be
waived or modified except by an instrument in writing to that effect signed by both of
them.






	13.12	 	Counterparts






	 	 	This Agreement may be executed in any number of counterparts and all such counterparts
taken together shall be deemed to constitute one and the same agreement which may be
sufficiently evidenced by one counterpart.






	13.13	 	English language






	 	 	All documents required to be delivered under and/or supplied whensoever in connection
howsoever with any of the Security Documents and all notices, communications, information
and other written material whatsoever given or provided in connection howsoever therewith
must either be in the English language or accompanied by an English translation certified
by a notary, lawyer or consulate acceptable to the Agent.






	14	 	EARNINGS ACCOUNT
	 
	14.1	 	General
	 
	 	 	The Borrower undertakes with each Bank that it will ensure that:
	 
	14.1.1	 	the Manager will on or before the first Drawdown Date, open the Earnings Account in its name; and






	14.1.2	 	all moneys payable to the Borrower in respect of the Earnings (as defined in the Mortgage)
of the Vessel shall, unless and until the Agent (acting on the instructions of the Majority
Lenders) directs to the contrary pursuant to the provisions of the Mortgage, be paid to the
Earnings Account, Provided however that if any of the moneys paid to the Earnings Account are
payable in a currency other than USD, they shall be paid to a sub-account of the Earnings
Account denominated in such currency (except that if the Shareholder fails to open such a
sub-account, the Account Bank shall then convert such moneys into USD at the Account Bank’s
spot rate of exchange at the relevant time for the purchase of USD with such currency




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	 	 	and the term “spot rate of exchange” shall include any
premium and costs of exchange payable in connection
with the purchase of USD with such currency).
	 
	14.2	 	Earnings Account: withdrawals






	 	 	Any sums standing to the credit of the Earnings Account may be applied from time to time
(i) Firstly and to make the payments required under this Agreement, (ii) secondly subject
to there being no breach of Clause 14.3 and to no Event of Default having occurred and to
no Event of Default occurring as a result of such a payment, in the operation of the
Vessel and (iii) subject to there being at any time sufficient funds to pay amounts due
under (i) and (ii) above as they fall due, thirdly for the general corporate purposes of
the Borrower.






	14.3	 	Application of accounts






	 	 	At any time after the occurrence of an Event of Default, the Agent may (and on the
instructions of the Majority Lenders shall), without notice to the Borrower, instruct the
Account Bank to apply all moneys then standing to the credit of the Earnings Account
(together with interest from time to time accruing or accrued thereon) in or towards
satisfaction of any sums due to the Banks or any of them under the Security Documents in
the manner specified in clause 13.1.






	14.4	 	Charging of accounts






	 	 	The Earnings Account and all amounts from time to time standing to the credit thereof
shall be subject to the security constituted and the rights conferred by the Earnings
Account Pledge.






	15	 	ASSIGNMENT, TRANSFER AND LENDING OFFICE






	15.1	 	Benefit and burden






	 	 	This Agreement shall be binding upon, and enure for the benefit of, the Banks and the
Borrower and its successors in title.






	15.2	 	No assignment by Borrower
	 
	 	 	The Borrower may not assign or transfer any of its rights or obligations under this Agreement.




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	15.3	 	Transfers by Banks






	 	 	any Lender (the “Transferor Lender”) may at any time cause all or any part of its
rights, benefits and/or obligations under this Agreement and the other Security Documents
to be transferred to another first class international bank or financial institution (in
either case a “Transferee Lender”) (i) without the Borrower’s consent if such transfer is
to another branch, a subsidiary or affiliate of such Lender and (ii) otherwise with the
prior consent of the Borrower, (which may not be unreasonably delayed or withheld), in
each case by delivering to the Agent a Transfer Certificate duly completed and duly
executed by the Transferor Lender and the Transferee Lender. No such transfer is binding
on, or effective in relation to, the Borrower or the Agent unless (i) it is effected or
evidenced by a Transfer Certificate which complies with the provisions of this clause 15.3
and is signed by or on behalf of the Transferor Lender, the Transferee Lender and the
Agent (on behalf of itself, the Borrower and the other Banks) and (ii) such transfer of
rights under the other Security Documents has been effected and registered. Upon
signature of any such Transfer Certificate by the Agent, which signature shall be effected
as promptly as is practicable after such Transfer Certificate has been delivered to the
Agent, and subject to the terms of such Transfer Certificate, such Transfer Certificate
shall have effect as set out below.






	 	 	The following further provisions shall have effect in relation to any Transfer
Certificate:






	15.3.1	 	a Transfer Certificate may be in respect of a Lender’s rights in respect of all, or part of,
its Commitment and shall be in respect of the same proportion of its Contribution;






	15.3.2	 	a Transfer Certificate shall only be in respect of rights and obligations of the Transferor
Lender in its capacity as a Lender and shall not transfer its rights and obligations (if
applicable) as the Agent and/or the Agent, or in any other capacity, as the case may be and
such other rights and obligations may only be transferred in accordance with any applicable
provisions of this Agreement;






	15.3.3	 	a Transfer Certificate shall take effect in accordance with English law as follows:






	 	(a)	 	to the extent specified in the Transfer Certificate, the Transferor
Lender’s payment rights and all its other rights (other than those referred to in
clause 15.3.2 above) under this Agreement are assigned to the Transferee Lender
absolutely, free of any defects in the Transferor Lender’s title and of any rights or
equities which the




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	 	 	 	Borrower had against the Transferor Lender and the Transferee Lender assumes all
obligations of the Transferor Lender as are transferred by such Transfer
Certificate;
	 
	 	(b)	 	the Transferor Lender’s Commitment is discharged to the extent specified in
the Transfer Certificate;
	 
	 	(c)	 	the Transferee Lender becomes a Lender with a Contribution and/or a
Commitment in respect of the Loan Facility of the amounts specified in the Transfer
Certificate;






	 	(d)	 	the Transferee Lender becomes bound by all the provisions of this Agreement
and the Security 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, the Transferor Lender ceases to
be bound by them;
	 
	 	(e)	 	an Advance or part of an Advance which the Transferee Lender makes after
the Transfer Certificate comes into effect ranks in point of priority and security in
the same way as it would have ranked had it been made by the Transferor Lender,
assuming that any defects in the Transferor Lender’s title and any rights or equities
of any Security Party against the Transferor Lender had not existed; and
	 
	 	(f)	 	the Transferee Lender becomes entitled to all the rights under this
Agreement which are applicable to the Lenders generally, including but not limited to
those relating to the Majority Lenders and those under clauses 3.6, 5 and 12 and to
the extent that the Transferee Lender becomes entitled to such rights, the Transferor
Lender ceases to be entitled to them;






	15.3.4	 	the rights and equities of the Borrower or of any other Security Party referred to above
include, but are not limited to, any right of set-off and any other kind of cross-claim; and






	15.3.5	 	the Borrower, the Account Bank, the Security Trustee, the Agent and the Lenders hereby
irrevocably authorise and instruct the Agent to sign any such Transfer Certificate on their
behalf and undertake not to withdraw, revoke or qualify such authority or instruction at any
time. Promptly upon its signature of any Transfer Certificate, the Agent shall notify the
Borrower, the Transferor Lender and the Transferee Lender.




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	15.4	 	Reliance on Transfer Certificate






	15.4.1	 	The Agent shall be entitled to rely on any Transfer Certificate believed by it to be genuine
and correct and to have been presented or signed by the persons by whom it purports to have
been presented or signed, and shall not be liable to any of the parties to this Agreement and
the Security Documents for the consequences of such reliance.






	15.4.2	 	The Agent shall at all times during the continuation of this Agreement maintain a register
in which it shall record the name, Commitments, Contributions and administrative details
(including the lending office) from time to time of the Lenders holding a Transfer Certificate
and the date at which the transfer referred to in such Transfer Certificate held by each
Lender was transferred to such Lender, and the Agent shall make the said register available
for inspection by any Lender or the Borrower during normal banking hours upon receipt by the
Agent of reasonable prior notice requesting the Agent to do so.






	15.4.3	 	The entries on the said register shall, in the absence of manifest error, be conclusive in
determining the identities of the Commitments, the Contributions and the Transfer Certificates
held by the Lenders from time to time and the principal amounts of such Transfer Certificates
and may be relied upon by all parties to this Agreement.






	15.5	 	Transfer fees and expenses






	 	 	Any Transferor Lender who causes the transfer of all or any part of its rights, benefits
and/or obligations under the Security Documents in accordance with the foregoing
provisions of this clause 15, must, on each occasion, pay to the Agent a transfer fee of
one thousand five hundred Dollars (USD 1,500) and, in addition, be responsible for all
other costs and expenses (including, but not limited to, reasonable legal fees and
expenses) associated therewith and all value added tax thereon, as well as those of the
Agent (in addition to its fee as aforesaid) in connection with such transfer.






	15.6	 	Documenting transfers






	 	 	If any Lender assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clause 15.3, the Borrower undertakes,
immediately on being requested to do so by the Agent and at the cost of the Transferor
Lender, to enter into, and procure that the other Security Parties shall (at the cost of
the Transferor Lender) enter into, such documents as may be necessary or desirable to
transfer to the Transferee




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	 	 	Lender all or the relevant part of such Lender’s interest in the Security Documents
and all relevant references in this Agreement to such Lender shall thereafter be construed
as a reference to the Transferor Lender and/or its Transferee Lender (as the case may be)
to the extent of their respective interests.
	 
	15.7	 	Sub-Participation
	 
	 	 	A Lender may sub-participate all or any part of its rights and/or obligations under the
Security Documents at its own expense without the consent of, or notice to, the Borrower.
	 
	15.8	 	Lending office
	 
	 	 	Each Lender shall lend through its office at the address specified in schedule 1 or, as
the case may be, in any relevant Transfer Certificate or through any other office of such
Lender selected from time to time by it through which such Lender wishes to lend for the
purposes of this Agreement. If the office through which a Lender is lending is changed
pursuant to this clause 15.8, such Lender shall notify the Agent promptly of such change
and the Agent shall notify the Borrower, the Security Trustee, the Agent, the Account Bank
and the other Lenders.
	 
	15.9	 	Disclosure of information
	 
	 	 	A Bank may disclose to and of its branches and affiliates, its head office, any relevant
fiscal authorities. a prospective assignee, transferee or to any other person who may
propose entering into contractual relations with such Bank in relation to this Agreement
and/or the Master Agreement such information about the Borrower and/or the other Security
Parties and/or the Loan and/or the Security Documents as such Bank shall consider
appropriate in relation to any transfer and/or enforcement hereunder.
	 
	16	 	ARRANGERS, AGENT AND SECURITY TRUSTEE
	 
	16.1	 	Appointment of the Agent
	 
	 	 	The Swap Bank and each Lender irrevocably appoints the Agent as its agent respectively for
the purposes of this Agreement and such of the Security Documents to which it may be
appropriate for the Agent to be party. Accordingly each of the Lenders and the Swap Bank
hereby authorise the Agent and the Agent:




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	16.1.1	 	to execute such documents as may be approved by the Majority Lenders for execution by the
Agent; and
	 
	16.1.2	 	(whether or not by or through employees or agents) to take such action on such Lender’s
behalf and to exercise such rights, remedies, powers and discretions as are specifically
delegated to the Agent by any Security Document, together with such powers and discretions as
are reasonably incidental thereto.
	 
	16.2	 	Agent’s actions
	 
	 	 	Any action taken by the Agent under or in relation to any of the Security Documents
whether with requisite authority or on the basis of appropriate instructions received from
the Majority Lenders (or as otherwise duly authorised) shall be binding on all the Banks.
	 
	16.3	 	Agent’s duties
	 
	16.3.1	 	The Agent shall promptly notify each Lender of the contents of each notice, certificate or
other document received by it from the Borrower under or pursuant to clauses 8.1.1, 8.1.6,
8.1.9, 8.1.10, 8.1.13 and 8.1.17; and
	 
	16.3.2	 	The Agent shall (subject to the other provisions of this clause 16) take (or instruct the
Security Trustee to take) such action or, as the case may be, refrain from taking (or
authorise the Security Trustee to refrain from taking) such action with respect to the
exercise of any of its rights, remedies, powers and discretions as agent, as the Majority
Lenders may direct.
	 
	16.4	 	Security Trustee’s and Agent’s rights
	 
	 	 	The Security Trustee and the Agent may:
	 
	16.4.1	 	in the exercise of any right, remedy, power or discretion in relation to any matter, or in
any context, not expressly provided for by this Agreement or any of the other Security
Documents, act or, as the case may be, refrain from acting (or authorise the Security Trustee
to act or refrain from acting) in accordance with the instructions of the Lenders, and shall
be fully protected in so doing;
	 
	16.4.2	 	unless and until it has received directions from the Majority Lenders, take such action or,
as the case may be, refrain from taking such action (or authorise the Security Trustee to take
or refrain from taking such action) in respect of a Default of which the Agent and/or the
Agent




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	 	 	has actual knowledge as it shall consider advisable in the best interests of the Lenders
(but shall not be obliged to do so);
	 
	16.4.3	 	refrain from acting (or authorise the Security Trustee to refrain from acting) in accordance
with any instructions of the Lenders to institute any Proceedings arising out of or in
connection with any of the Security Documents until it and/or the Security Trustee has been
indemnified and/or secured to its satisfaction against any and all costs, expenses or
liabilities (including legal fees) which it would or might incur as a result;
	 
	16.4.4	 	deem and treat (i) each Lender as the person entitled to the benefit of the Contribution of
such Lender for all purposes of this Agreement unless and until a notice shall have been filed
with the Agent pursuant to clause 15.3 and shall have become effective, and (ii) the office
set opposite the name of each of the Lenders in schedule 1 as its lending office unless and
until a written notice of change of lending office shall have been received by the Agent and
the Agent may act upon any such notice unless and until the same is superseded by a further
such notice;
	 
	16.4.5	 	rely as to matters of fact which might reasonably be expected to be within the knowledge of
any Security Party upon a certificate signed by any director or officer of the relevant
Security Party on behalf of the relevant Security Party; and
	 
	16.4.6	 	do anything which is in its opinion necessary or desirable to comply with any law or
regulation in any jurisdiction.
	 
	16.5	 	No Liability of Agent
	 
	 	 	None of the Security Trustee, the Agent nor any of their respective employees and agents
shall:
	 
	16.5.1	 	be obliged to make any enquiry as to the use of any of the proceeds of the Loan unless (in
the case of the Agent) so required in writing by a Lender, in which case the Agent shall
promptly make the appropriate request to the Borrower; or
	 
	16.5.2	 	be obliged to make any enquiry as to any breach or default by the Borrower or any other
Security Party in the performance or observance of any of the provisions of the Security
Documents or as to the existence of a Default unless (in the case of the Agent) the Agent has
actual knowledge thereof or has been notified in writing thereof by a Bank, in which case the
Agent shall promptly notify the Banks of the relevant event or circumstance; or




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	16.5.3	 	be obliged to enquire whether or not any representation or warranty made by the Borrower or
any other Security Party pursuant to this Agreement or any of the other Security Documents is
true; or
	 
	16.5.4	 	be obliged to do anything (including, without limitation, disclosing any document or
information) which would, or might in its opinion, be contrary to any law or regulation or be
a breach of any duty of confidentiality or otherwise be actionable or render it liable to any
person; or
	 
	16.5.5	 	be obliged to account to any Lender for any sum or the profit element of any sum received by
it for its own account; or
	 
	16.5.6	 	be obliged to institute any Proceedings arising out of or in connection with any of the
Security Documents other than on the instructions of the Majority Lenders; or
	 
	16.5.7	 	be liable to any Lender for any action taken or omitted under or in connection with any of
the Security Documents unless caused by its gross negligence or wilful misconduct.
	 
	 	 	For the purposes of this clause 16, neither of the Security Trustee or the Agent shall be
treated as having actual knowledge of any matter of which the corporate finance or any
other division outside the agency or loan administration department of the Security
Trustee or the Agent or the person for the time being acting as the Security Trustee or
the Agent may become aware in the context of corporate finance, advisory or lending
activities from time to time undertaken by the Security Trustee or the Agent or, as the
case may be, the Security Trustee or Agent for any Security Party or any other person
which may be a trade competitor of any Security Party or may otherwise have commercial
interests similar to those of any Security Party.
	 
	16.6	 	Non —reliance on Security Trustee or Agent
	 
	 	 	Each Lender and the Swap Bank acknowledges that it has not relied on any statement,
opinion, forecast or other representation made by the Security Trustee or the Agent to
induce it to enter into any of the Security Documents and that it has made and will
continue to make, without reliance on the Security Trustee or the Agent and based on such
documents as it considers appropriate, its own appraisal of the creditworthiness of the
Security Parties and its own independent investigation of the financial condition,
prospects and affairs of the Security Parties in connection with the making and
continuation of such Lender’s Commitment or




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	 	 	Contribution under this Agreement. Neither of the Security Trustee and the Agent shall
have any duty or responsibility, either initially or on a continuing basis, to provide any
Lender or the Swap Bank with any credit or other information with respect to any Security
Party whether coming into its possession before the making of either Advance or the Loan
or at any time or times thereafter other than as provided in clause 16.3.1.
	 
	16.7	 	No responsibility on the Security Trustee or Agent for Borrower’s performance
	 
	 	 	Neither of the Security Trustee or the Agent shall have any responsibility or liability
to any Lender or the Swap Bank:
	 
	16.7.1	 	on account of the failure of any Security Party to perform its obligations under any of the
Security Documents; or
	 
	16.7.2	 	for the financial condition of any Security Party; or
	 
	16.7.3	 	for the completeness or accuracy of any statements, representations or warranties in any of
the Security Documents or any document delivered under any of the Security Documents; or
	 
	16.7.4	 	for the execution, effectiveness, adequacy, genuineness, validity, enforceability or
admissibility in evidence of any of the Security Documents or of any certificate, report or
other document executed or delivered under any of the Security Documents; or
	 
	16.7.5	 	to investigate or make any enquiry into the title of the Borrower or any other Security
Party to the Vessel or any other security or any part thereof; or
	 
	16.7.6	 	for the failure to register any of the Security Documents with any official or regulatory
body or office or elsewhere; or
	 
	16.7.7	 	for taking or omitting to take any other action under or in relation to any of the Security
Documents or any aspect of any of the Security Documents; or
	 
	16.7.8	 	on account of the failure of the Security Trustee to perform or discharge any of its duties
or obligations under the Security Documents; or
	 
	16.7.9	 	otherwise in connection with the Security Documents or their negotiation or for acting (or,
as the case may be, refraining from acting) in accordance with the instructions of the
Lenders.
	 
	16.8	 	Reliance on documents and professional advice




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	 	 	Each of the Security Trustee and the Agent shall be entitled to rely on any
communication, instrument or document believed by it to be genuine and correct and to have
been signed or sent by the proper person and shall be entitled to rely as to legal or
other professional matters on opinions and statements of any legal or other professional
advisers selected or approved by it (including those in the Security Trustee’s or Agent’s
employment).
	 
	16.9	 	Other dealings
	 
	 	 	Each of the Security Trustee and the Agent may, without any liability to account to the
Lenders, accept deposits from, lend money to, and generally engage in any kind of banking
or other business with, and provide advisory or other services to, any Security Party or
any company in the same group of companies as such Security Party or any of the Lenders as
if it were not the Security Trustee or Agent.
	 
	16.10	 	Rights of Agent, Agent as Lender; no partnership
	 
	 	 	With respect to its own Commitment and Contribution (if any) the Security Trustee and the
Agent shall have the same rights and powers under the Security Documents as any other
Lender and may exercise the same as though it were not performing the duties and functions
delegated to it under this Agreement and the term “Lenders” shall, unless the context
clearly otherwise indicates, include the Security Trustee and the Agent in their
respective individual capacity as a Lender. This Agreement shall not be construed so as to
constitute a partnership between the parties or any of them.
	 
	16.11	 	Amendments and waivers
	 
	16.11.1	 	Subject to clause 16.11, the Security Trustee and/or the Agent (as the case may be) may,
with the consent of the Majority Lenders (or if and to the extent expressly authorised by the
other provisions of any of the Security Documents) and, if so instructed by the Majority
Lenders, shall:
	 
	16.11.2	 	agree (or authorise the Security Trustee to agree) amendments or modifications to any of
the Security Documents with the Borrower and/or any other Security Party; and/or
	 
	16.11.3	 	vary or waive breaches of, or defaults under, or otherwise excuse performance of, any
provision of any of the other Security Documents by the Borrower and/or any other Security
Party (or authorise the Security Trustee to do so).




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	 	 	Any such action so authorised and effected by the Agent shall be documented in such manner
as the Security Trustee and/or the Agent (as the case may be) shall (with the approval of
the Majority Lenders) determine, shall be promptly notified to the Lenders by the
Security Trustee and/or the Agent (as the case may be) and (without prejudice to the
generality of clause 16.2) shall be binding on the Lenders.
	 
	16.11.4	 	Except with the prior written consent of the Lenders, the Security Trustee and the Agent
shall have no authority on behalf of the Lenders to agree (or authorise the Security Trustee
to agree) with the Borrower and/or any other Security Party any amendment or modification to
any of the Security Documents or to grant (or authorise the Security Trustee to grant) waivers
in respect of breaches or defaults or to vary or excuse (or authorise the Security Trustee to
vary or excuse) performance of or under any of the Security Documents by the Borrower and/or
any other Security Party, if the effect of such amendment, modification, waiver or excuse
would be to:






	 	(a)	 	reduce the Margin, postpone the due date or reduce the amount of any
payment of principal, interest or other amount payable by any Security Party under
any of the Security Documents;
	 
	 	(b)	 	change the currency in which any amount is payable by any Security Party
under any of the Security Documents;
	 
	 	(c)	 	increase any Lender’s Commitment;
	 
	 	(d)	 	extend the Maturity Date;
	 
	 	(e)	 	change any provision of any of the Security Documents which expressly or
impliedly requires the approval or consent of all the Lenders such that the relevant
approval or consent may be given otherwise than with the sanction of all the Lenders;
	 
	 	(f)	 	change the order of distribution under clauses 6.10 and 13.1;
	 
	 	(g)	 	change this clause 16.11;
	 
	 	(h)	 	change the definition of “Majority Lenders” in clause 1.2;




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	 	(i)	 	release any Security Party from the security constituted by any Security
Document (except as required by the terms thereof or by law) or change the terms and
conditions upon which such security or guarantee may be, or is required to be,
released.






	16.12	 	Reimbursement and indemnity by Lenders
	 
	 	 	Each Lender shall reimburse the Security Trustee and the Agent (rateably in accordance
with such Lender’s Commitment or, after the first Advance or the Loan has been drawn, its
Contribution,) to the extent that the Security Trustee or the Agent is not reimbursed by
the Borrower, for the costs, charges and expenses incurred by the Security Trustee or the
Agent which are expressed to be payable by the Borrower under clause 5.2 including (in
each case), without limitation, the fees and expenses of legal or other professional
advisers provided that, if following any payment to the Security Trustee or the Agent by
a Lender under this clause the Security Trustee or the Agent receives payment from the
Borrower in respect of the same costs, fees or expenses, the Security Trustee or the
Agent shall upon receipt thereof reimburse the relevant Lender. Each Lender must on
demand indemnify the Security Trustee or the Agent (rateably in accordance with such
Lender’s Commitment or, after the first Advance or the Loan has been drawn, its
Contribution) against all liabilities, damages, costs and claims whatsoever incurred by
the Security Trustee in connection with any of the Security Documents or the performance
of its duties under any of the Security Documents or any action taken or omitted by the
Security Trustee or, as the case may be, the Agent, under any of the Security Documents,
unless such liabilities, damages, costs or claims arise from the Security Trustee’s or as
the case may be, the Agent’s own gross negligence or wilful misconduct.
	 
	16.13	 	Retirement of the Security Trustee /Agent
	 
	16.13.1	 	The Agent may, having given to the Borrower and each of the Lenders not less than fifteen
(15) days’ notice of its intention to do so, retire from its appointment as the Security
Trustee or the Agent (as the case may be) under this Agreement, provided that no such
retirement shall take effect unless there has been appointed by the Lenders as a successor
agent:






	 	(a)	 	a company in the same group of companies as the Security Trustee or, as
the case may be, the Agent nominated by the Security Trustee or, as the case may be,
the Agent,




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	 	(b)	 	a Lender nominated by the Majority Lenders or, failing such a nomination,
	 
	 	(c)	 	any reputable and experienced bank or financial institution nominated by
the retiring Agent or, as the case may be, the retiring Security Trustee.






	 	 	Any corporation into which the retiring Agent and/or the retiring Security Trustee (as
the case may be) may be merged or converted or any corporation with which the Security
Trustee and/or the Agent (as the case may be) may be consolidated or any corporation
resulting from any merger, conversion, amalgamation, consolidation or other reorganisation
to which the Security Trustee or the Agent (as the case may be) shall be a party shall,
to the extent permitted by applicable law, be the successor Agent or Security Trustee
under this Agreement and the other Security Documents without the execution or filing of
any document or any further act on the part of any of the parties to the Security
Documents save that notice of any such merger, conversion, amalgamation, consolidation or
other reorganisation shall forthwith be given to each Security Party and the Lenders.
Prior to any such successor being appointed, the Agent agrees to consult with the Borrower
and the Lenders as to the identity of the proposed successor and to take account of any
reasonable objections which the Borrower and the Lenders may raise to such successor being
appointed.
	 
	16.13.2	 	If the Majority Lenders, acting reasonably, are of the opinion that the Security Trustee or
Agent is unable to fulfil its respective obligations under this Agreement in a professional
and acceptable manner, then they may require the Security Trustee or Agent, by written
notice, to resign in accordance with clause 16.13.1, which the Agent shall promptly do, and
the terms of clause 16.13.1 shall apply to the appointment of any substitute Security Trustee
or Agent, save that the same shall be appointed by the Majority Lenders and not by all of the
Lenders.
	 
	16.13.3	 	Upon any such successor as aforesaid being appointed, the retiring Agent or, as the case
may be, the Security Trustee shall be discharged from any further obligation under the
Security Documents (but shall continue to have the benefit of this clause 16 in respect of any
action it has taken or refrained from taking prior to such discharge) and its successor and
each of the other parties to this Agreement shall have the same rights and obligations among
themselves as they would have had if such successor had been a party to this Agreement in
place of the retiring Agent or Security Trustee. The retiring Agent or Agent shall (at its own
expense) provide its successor with copies of such of its records as its successor reasonably
requires to carry out its functions under the Security Documents.




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	16.14	 	Appointment and retirement of Security Trustee
	 
	16.14.1	 	Appointment
	 
	 	 	Each of the Lenders, the Swap Bank and the Agent irrevocably appoints the Security Trustee
as its Security Trustee and trustee for the purposes of the Security Documents, in each
case on the terms set out in this Agreement. Accordingly, each of the Lenders, the Swap
Bank and the Agent hereby authorises the Security Trustee (whether or not by or through
employees or agents) to take such action on its behalf and to exercise such rights,
remedies, powers and discretions as are specifically delegated to the Security Trustee by
this Agreement and/or the Security Documents, together with such powers and discretions as
are reasonably incidental thereto.
	 
	16.14.2	 	Retirement
	 
	 	 	Without prejudice to clause 16.13, the Security Trustee may, having given to the Borrower
and each of the Lenders and the Swap Bank not less than fifteen (15) days’ notice of its
intention to do so, retire from its appointment as Security Trustee under this Agreement
and any Trust Deed, provided that no such retirement shall take effect unless there has
been appointed by the Lenders and the Agent as a successor Security Trustee and trustee:






	 	(a)	 	a company in the same group of companies of the Security Trustee nominated
by the Security Trustee which the Lenders hereby irrevocably and unconditionally
agree to appoint or, failing such nomination,
	 
	 	(b)	 	a Lender or trust corporation nominated by the Majority Lenders or, failing
such a nomination,
	 
	 	(c)	 	any bank or trust corporation nominated by the retiring Security Trustee,






	 	 	and, in any case, such successor Security Trustee and trustee shall have duly accepted
such appointment by delivering to the Agent (i) written confirmation (in a form acceptable
to the Agent) of such acceptance agreeing to be bound by this Agreement in the capacity of
Security Trustee as if it had been an original party to this Agreement and (ii) a duly
executed Trust Deed.
	 
	 	 	Any corporation into which the retiring Security Trustee may be merged or converted or any
corporation with which the Security Trustee may be consolidated or any corporation
resulting




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	 	 	from any merger, conversion, amalgamation, consolidation or other reorganisation to which
the Security Trustee shall be a party shall, to the extent permitted by applicable law, be
the successor Security Trustee under this Agreement, any Trust Deed and the other Security
Documents without the execution or filing of any document or any further act on the part
of any of the parties to this Agreement, any Trust Deed and the other Security Documents
save that notice of any such merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to each Security Party, the Swap Bank and the
Lenders. Prior to any such successor being appointed, the Security Trustee agrees to
consult with the Borrower as to the identity of the proposed successor and to take account
of any reasonable objections which the Borrower may raise to such successor being
appointed.
	 
	 	 	Upon any such successor as aforesaid being appointed, the retiring Security Trustee shall
be discharged from any further obligation under the Security Documents (but shall continue
to have the benefit of this clause 16 in respect of any action it has taken or refrained
from taking prior to such discharge) and its successor and each of the other parties to
this Agreement shall have the same rights and obligations among themselves as they would
have had if such successor had been a party to this Agreement in place of the retiring
Security Trustee. The retiring Security Trustee shall (at its own expense) provide its
successor with copies of such of its records as its successor reasonably requires to carry
out its functions under the Security Documents.
	 
	16.15	 	Powers and duties of the Security Trustee
	 
	16.15.1	 	The Security Trustee shall have no duties, obligations or liabilities to any of the Lenders
and the Agent beyond those expressly stated in any of the Security Documents. Each of the
Agent and the Swap Bank, the Lenders hereby authorises the Security Trustee to enter into and
execute:






	 	(a)	 	each of the Security Documents to which the Security Trustee is or is
intended to be a party; and
	 
	 	(b)	 	any and all such other Security Documents as may be approved by the Agent
in writing (acting on the instructions of the Majority Lenders) for entry into by the
Security Trustee,




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	 	 	and, in each and every case, to hold any and all security thereby created upon trust for
the Lenders, the Swap Bank and the Agent for the time being in the manner contemplated by
this Agreement.






	16.15.2	 	Subject to clause 16.15.3 the Security Trustee may, with the prior consent of the Majority
Lenders communicated in writing by the Agent, concur with any of the Security Parties to:






	 	(a)	 	amend, modify or otherwise vary any provision of the Security Documents to
which the Security Trustee is or is intended to be a party; or
	 
	 	(b)	 	waive breaches of, or defaults under, or otherwise excuse performance of,
any provision of the Security Documents to which the Security Trustee is or is
intended to be a party; or
	 
	 	(c)	 	give any consents to any Security Party in respect of any provision of any
Security Document






	 	 	Any such action so authorised and effected by the Security Trustee shall be promptly
notified to the Lenders, the Swap Bank and the Agent by the Security Trustee and shall be
binding on the other Banks.
	 
	16.15.3	 	The Security Trustee shall not concur with any Security Party with respect to any of the
matters described in clause 16.11.4 without the consent of the Lenders communicated in writing
by the Agent.
	 
	16.15.4	 	The Security Trustee shall (subject to the other provisions of this clause 16) take such
action or, as the case may be, refrain from taking such action, with respect to any of its
rights, powers and discretions as Security Trustee and trustee, as the Agent may direct.
Subject as provided in the foregoing provisions of this clause, unless and until the Security
Trustee has received such instructions from the Agent, the Security Trustee may, but shall not
be obliged to, take (or refrain from taking) such action under or pursuant to the Security
Documents referred to in clause 16.14 as the Security Trustee shall deem advisable in the best
interests of the Banks provided that (for the avoidance of doubt), to the extent that this
clause might otherwise be construed as authorising the Security Trustee to take, or refrain
from taking, any action of the nature referred to in clause 16.15.2 — and for which the prior
consent of the Lenders is expressly required under clause 16.15.3 — clauses 16.15.2 and
16.15.3 shall apply to the exclusion of this clause.




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	16.15.5	 	None of the Lenders, the Swap Bank nor the Agent shall have any independent power to
enforce any of the Security Documents referred to in clause 16.14 or to exercise any rights,
discretions or powers or to grant any consents or releases under or pursuant to such Security
Documents or any of them or otherwise have direct recourse to the security and/or guarantees
constituted by such Security Documents or any of them except through the Security Trustee.
	 
	16.15.6	 	For the purpose of this clause 16, the Security Trustee may, rely and act in reliance upon
any information from time to time furnished to the Security Trustee by the Agent (whether
pursuant to clause 16.15.7 or otherwise) unless and until the same is superseded by further
such information, so that the Security Trustee shall have no liability or responsibility to
any party as a consequence of placing reliance on and acting in reliance upon any such
information unless the Security Trustee has actual knowledge that such information is
inaccurate or incorrect.
	 
	16.15.7	 	Without prejudice to the foregoing each of the Agent, the Swap Bank and the Lenders
(whether directly or through the Agent) shall provide the Security Trustee with such written
information as it may reasonably require for the purpose of carrying out its duties and
obligations under the Security Documents referred to in clause 16.14.
	 
	16.16	 	Trust provisions
	 
	16.16.1	 	The trusts constituted or evidenced in or by this Agreement and the Trust Deed shall remain
in full force and effect until whichever is the earlier of:






	 	(a)	 	the expiration of a period of eighty (80) years from the date of this
Agreement; and
	 
	 	(b)	 	receipt by the Security Trustee of confirmation in writing by the Agent
that there is no longer outstanding any Indebtedness (actual or contingent) which is
secured or guaranteed or otherwise assured by or under any of the Security Documents,






	 	 	and the parties to this Agreement declare that the perpetuity period applicable to this
Agreement and the trusts declared by the Trust Deed shall for the purposes of the
Perpetuities and Accumulations Act 1964 be the period of eighty (80) years from the date
of this Agreement.
	 
	16.16.2	 	In its capacity as trustee in relation to the Security Documents specified in clause 16.14,
the Security Trustee shall, without prejudice to any of the powers, discretions and immunities
conferred upon trustees by law (and to the extent not inconsistent with the provisions of any




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	 	 	of those Security Documents), have all the same powers and discretions as a natural person
acting as the beneficial owner of such property and/or as are conferred upon the Security
Trustee by any of those Security Documents.
	 
	16.16.3	 	It is expressly declared that, in its capacity as trustee in relation to the Security
Documents specified in clause 16.14, the Security Trustee shall be entitled to invest moneys
forming part of the security and which, in the opinion of the Security Trustee, may not be
paid out promptly following receipt in the name or under the control of the Security Trustee
in any of the investments for the time being authorised by law for the investment by trustees
of trust moneys or in any other property or investments whether similar to the aforesaid or
not or by placing the same on deposit in the name or under the control of the Security Trustee
as the Security Trustee may think fit without being under any duty to diversify its
investments and the Security Trustee may at any time vary or transpose any such property or
investments for or into any others of a like nature and shall not be responsible for any loss
due to depreciation in value or otherwise of such property or investments. Any investment of
any part or all of the security may, at the discretion of the Security Trustee, be made or
retained in the names of nominees.
	 
	16.17	 	Independent action by Banks
	 
	 	 	None of the Banks shall enforce, exercise any rights, remedies or powers or grant any
consents or releases under or pursuant to, or otherwise have a direct recourse to the
security and/or guarantees constituted by any of the Security Documents without the prior
written consent of the Majority Lenders but, provided such consent has been obtained, it
shall not be necessary for any other Bank to be joined as an additional party in any
Proceedings for this purpose.
	 
	16.18	 	Common Agent and Security Trustee
	 
	 	 	The Agent and the Security Trustee have entered into the Security Documents in their
separate capacities (a) as agent for the Lenders under and pursuant to this Agreement (in
the case of the Agent) and (b) as Security Trustee and trustee for the Lenders, the Swap
Bank and the Agent under and pursuant to this Agreement, to hold the guarantees and/or
security created by the Security Documents specified in clause 16.14 on the terms set out
in such Security Documents (in the case of the Security Trustee). If and when the Agent
and the Security Trustee are the same entity and any Security Document provides for the
Agent to communicate with or provide instructions to the Security Trustee (and vice
versa), all parties




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	 	 	to this Agreement agree that any such communications or instructions on such occasions are
unnecessary and are hereby waived.
	 
	16.19	 	Co-operation to achieve agreed priorities of application
	 
	 	 	The Lenders and the Agent shall co-operate with each other and with the Security Trustee
and any receiver under the Security Documents in realising the property and assets subject
to the Security Documents and in ensuring that the net proceeds realised under the
Security Documents after deduction of the expenses of realisation are applied in
accordance with clause 13.1.
	 
	16.20	 	The Prompt distribution of proceeds
	 
	 	 	Moneys received by any of the Banks (whether from a receiver or otherwise) pursuant to the
exercise of (or otherwise by virtue of the existence of) any rights and powers under or
pursuant to any of the Security Documents shall (after providing for all costs, charges,
expenses and liabilities and other payments ranking in priority) be paid to the Agent for
distribution (in the case of moneys so received by any of the Banks other than the Agent
or the Security Trustee) and shall be distributed by the Agent or, as the case may be, the
Security Trustee (in the case of moneys so received by the Agent or, as the case may be,
the Security Trustee) in each case in accordance with clause 13.1. The Agent or, as the
case may be, the Security Trustee shall make each such application and/or distribution as
soon as is practicable after the relevant moneys are received by, or otherwise become
available to, the Agent or, as the case may be, the Security Trustee save that (without
prejudice to any other provision contained in any of the Security Documents) the Agent or,
as the case may be, the Security Trustee (acting on the instructions of the Majority
Lenders) or any receiver may credit any moneys received by it to a suspense account for so
long and in such manner as the Agent or such receiver may from time to time determine with
a view to preserving the rights of the Agent and/or the Security Trustee and/or the
Account Bank and/or the Arrangers and/or the Lenders, the Swap Bank or any of them to
provide for the whole of their respective claims against the Borrower or any other person
liable.
	 
	16.21	 	Reconventioning
	 
	 	 	After consultation with the Borrower and the Lenders and notwithstanding clause 16.11, the
Agent shall be entitled to make such amendments to this Agreement as it may determine to
be necessary to take account of any changes in market practices as a consequence of the




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	 	 	European Monetary Union (whether as to the settlement or rounding of obligations, business
days, the calculation of interest or otherwise whatsoever). So far as possible such
amendments shall be such as to put the parties in the same position as if the event or
events giving rise the need to amend this Agreement had not occurred. Any amendment so
made to this Agreement by the Agent shall be promptly notified to the other parties hereto
and shall be binding on all parties hereto.
	 
	16.22	 	Exclusivity
	 
	 	 	Without prejudice to the Borrower’s rights, in certain instances, to give their consent
thereunder, clauses 15 and 16 are for the exclusive benefit of the Banks.
	 
	17	 	NOTICES AND OTHER MATTERS
	 
	17.1	 	Notices
	 
	17.1.1	 	unless otherwise specifically provided herein, every notice under or in connection with this
Agreement shall be given in English by letter delivered personally and/or sent by post and/or
transmitted by fax and/or electronically;
	 
	17.1.2	 	in this clause “notice” includes any demand, consent, authorisation, approval, instruction,
certificate, request, waiver or other communication.
	 
	17.2	 	Addresses for communications, effective date of notices
	 
	17.2.1	 	Subject to clause 17.2.2, clause 17.2.5 and 17.3 notices to the Borrower shall be deemed to
have been given and shall take effect when received in full legible form by the Borrower at
the address and/or the fax number appearing below (or at such other address or fax number as
the Borrower may hereafter specify for such purpose to the Agent by notice in writing);
	 
	 	 	Address             c/o Navios ShipManagement Inc.

                          85 Akti Miaouli

                          Piraeus

                          Greece

	 
	 	 	Fax no:             + 30 210 453 2070






	17.2.2	 	notwithstanding the provisions of clause 17.2.1 or clause 17.2.5, a notice of Default and/or
a notice given pursuant to clause 10.2 or clause 10.3 to the Borrower shall be deemed to have




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	 	 	been given and shall take effect when delivered, sent or transmitted by the Banks or any
of them to the Borrower to the address or fax number referred to in clause 17.2.1;
	 
	17.2.3	 	subject to clause 17.2.5, notices to the Agent and/or the Agent and/or an Arranger and/or
Account Bank and/or Security Trustee and/or the Swap Bank shall be deemed to be given, and
shall take effect, when received in full legible form by the Agent and/or the Agent at the
address and/or the fax number address appearing below (or at any such other address or fax
number as the Agent and/or the Agent (as appropriate) may hereafter specify for such purpose
to the Borrower and the other Lenders by notice in writing);
	 
	 	 	Agent:          
	 
	 	 	Address:            DnB NOR Bank ASA

                          20 St. Dunstan’s Hill

                          London EC3R 8HY

                          England

	 
	 	 	Attn:                 Shipping Dept.

Fax no: +           +44 207 626 5956
	 
	17.2.4	 	subject to clause 17.2.5 and 17.3, notices to a Lender shall be deemed to be given and shall
take effect when received in full legible form by such Lender at its address and/or fax number
specified in schedule 1 or in any relevant Transfer Certificate (or at any other address or
fax number as such Lender may hereafter specify for such purpose to the other Banks); and
	 
	17.2.5	 	if under clause 17.2.1 or clause 17.2.3 a notice would be deemed to have been given and
effective on a day which is not a working day in the place of receipt or is outside the normal
business hours in the place of receipt, the notice shall be deemed to have been given and to
have taken effect at the opening of business on the next working day in such place.
	 
	17.3	 	Electronic Communication
	 
	17.3.1	 	Any communication to be made by and/or between the Banks or any of them and the Security
Parties or any of them under or in connection with the Security Documents or any of them may
be made by electronic mail or other electronic means, if and provided that all such parties:






	 	(a)	 	notify each other in writing of their electronic mail address and/or any
other information required to enable the sending and receipt of information by that
means; and




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	 	(b)	 	notify each other of any change to their electronic mail address or any
other such information supplied by them.






	17.3.2	 	Any electronic communication made by and/or between the Banks or any of them and the
Security Parties or any of them will be effective only when actually received in readable form
and, in the case of any electronic communication made by the Borrower or the Lenders to the
Agent, only if it is addressed in such manner as the Agent shall specify for this purpose
	 
	17.4	 	Notices through the Agent
	 
	 	 	Every notice under this Agreement or (unless otherwise provided therein) any other
Security Document to be given by the Borrower to any other party, shall be given to the
Agent for onward transmission as appropriate and every notice under this Agreement to be
given to the Borrower shall (except otherwise provided in the Security Documents) be given
to the Borrower by the Agent.
	 
	18	 	GOVERNING LAW
	 
	 	 	This Agreement and any non-contractual obligations arising out of or in connection with it
are governed by and shall be construed in accordance with English law.
	 
	19	 	JURISDICTION
	 
	19.1	 	Exclusive Jurisdiction
	 
	 	 	For the benefit of the Banks, and subject to clause 19.4 below, the Borrower hereby
irrevocably agrees that the courts of England shall have exclusive jurisdiction:
	 
	19.1.1	 	to settle any disputes or other matters whatsoever arising under or in connection with this
Agreement (or any non-contractual obligation arising out of or in connection with this
Agreement), and any disputes or other such matters arising in connection with the negotiation,
validity or enforceability of this Agreement or any part thereof, whether the alleged
liability shall arise under the laws of England or under the laws of some other country and
regardless of whether a particular cause of action may successfully be brought in the English
courts; and
	 
	19.1.2	 	to grant interim remedies or other provisional or protective relief.
	 
	19.2	 	Submission and service of process




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	 	 	The Borrower accordingly irrevocably and unconditionally submits to the jurisdiction of
the English courts. Without prejudice to any other mode of service the Borrower:
	 
	19.2.1	 	irrevocably empowers and appoints HFW Nominees Ltd at present of Friary Court, 65 Crutched
Friars, London EC3N 2AE, England as its agent to receive and accept on its behalf any process
or other document relating to any proceedings before the English courts in connection with
this Agreement;
	 
	19.2.2	 	agrees to maintain such an agent for service of process in England from the date hereof
until the end of the Facility Period;
	 
	19.2.3	 	agrees that failure by a process agent to notify the Borrower of service of process will not
invalidate the proceedings concerned;
	 
	19.2.4	 	without prejudice to the effectiveness of service of process on its agent under clause
19.2.1 above but as an alternative method, consents to the service of process relating to any
such proceedings by mailing or delivering a copy of the process to its address for the time
being applying under clause 17.2;
	 
	19.2.5	 	agrees that if the appointment of any person mentioned in clause 19.2.1 ceases to be
effective, the Borrower shall immediately appoint a further person in England to accept
service of process on its behalf in England and, failing such appointment within seven (7)
days the Lender shall thereupon be entitled and is hereby irrevocably authorised by the
Borrower in those circumstances to appoint such person by notice to the Borrower.
	 
	19.3	 	Forum non conveniens and enforcement abroad
	 
	 	 	The Borrower:
	 
	19.3.1	 	waives any right and agrees not to apply to the English court or other court in any
jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the
ground that England is an inappropriate forum and/or that Proceedings have been or will be
started in any other jurisdiction in connection with any dispute or related matter falling
within clause 19.1; and
	 
	19.3.2	 	agrees that a judgment or order of an English court in a dispute or other matter falling
within clause 19.1 shall be conclusive and binding on the Borrower and may be enforced against
it in the courts of any other jurisdiction.




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	19.4	 	Right of Lender, but not Borrower, to bring proceedings in any other jurisdiction
	 
	19.4.1	 	Nothing in this clause 19 limits the right of any Lender to bring Proceedings, including
third party proceedings, against the Borrower, or to apply for interim remedies, in connection
with this Agreement in any other court and/or concurrently in more than one jurisdiction;
	 
	19.4.2	 	the obtaining by any Lender of judgment in one jurisdiction shall not prevent such Lender
from bringing or continuing proceedings in any other jurisdiction, whether or not these shall
be founded on the same cause of action.
	 
	19.5	 	Enforceability despite invalidity of Agreement
	 
	 	 	Without prejudice to the generality of clause 13.9, the jurisdiction agreement contained
in this clause 19 shall be severable from the rest of this Agreement and shall remain
valid, binding and in full force and shall continue to apply notwithstanding this
Agreement or any part thereof being held to be avoided, rescinded, terminated, discharged,
frustrated, invalid, unenforceable, illegal and/or otherwise of no effect for any reason.
	 
	19.6	 	Effect in relation to claims by and against non-parties
	 
	19.6.1	 	For the purpose of this clause “Foreign Proceedings” shall mean any Proceedings except
proceedings brought or pursued in England arising out of or in connection with (i) or in any
way related to any of the Security Documents or any assets subject thereto or (ii) any action
of any kind whatsoever taken by any Bank pursuant thereto or which would, if brought by the
Borrower against the Lender, have been required to be brought in the English courts;
	 
	19.6.2	 	the Borrower shall not bring or pursue any Foreign Proceedings against any Bank and shall
use its best endeavours to prevent persons not party to this Agreement from bringing or
pursuing any Foreign Proceedings against any Bank;
	 
	19.6.3	 	If, for any reason whatsoever, any Security Party and/or any person connected howsoever with
any Security Party brings or pursues against any Bank any Foreign Proceedings, the Borrower
shall indemnify such Bank on demand in respect of any and all claims, losses, damages,
demands, causes of action, liabilities, costs and expenses (including, but not limited to,
legal costs) of whatsoever nature howsoever arising from or in connection with such Foreign
Proceedings which such Bank (or the Agent on its behalf) certifies as having been incurred by
it;




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	19.6.4	 	the Banks and the Borrower hereby agrees and declares that the benefit of this clause 19
shall extend to and may be enforced by any officer, employee, agent or business associate of
any of the Banks against whom the Borrower brings a claim in connection howsoever with any of
the Security Documents or any assets subject thereto or any action of any kind whatsoever
taken by, or on behalf of or for the purported benefit of any Bank pursuant thereto or which,
if it were brought against the Lender, would fall within the material scope of clause 19.1.
In those circumstances this clause 19 shall be read and construed as if references to any Bank
were references to such officer, employee, agent or business associate, as the case may be.










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Execution Pages



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




	 	 	 

	SIGNED as a deed for and on behalf of
	 	)
	FAITH MARINE LTD. by Todd Johnson
	 	)
	(as Borrower under and pursuant to
	 	)     /s/ Todd Johnson
	a power of attorney dated
	 	)
	August 2010) in the presence of
	 	)
	 
	 	 
	SIGNED by Ronan Le Du
	 	)
	for and on behalf of
	 	)
	DNB NOR BANK ASA
	 	)     /s/ Ronan Le Du
	(as a Lender) in the presence of Robin Parry
	 	)
	 
	 	 
	SIGNED by Ronan Le Du
	 	)
	for and on behalf of
	 	)
	DNB NOR BANK ASA
	 	)     /s/ Ronan Le Du
	(as Account Bank, Agent, Swap Bank and
	 	)
	Security Trustee) in the presence of Robin Parry
	 	)
	 
	 	 
	/s/ Robin Parry
	 	 
	Ince & Co.
	 	 
	Akti Miaouli 47-49
	 	      
	Piraeus 185 36
	 	 
	Greece
	 	 






91