Document:

Private and Confidential 

DATED November  2007

NAVIOS MARITIME PARTNERS L.P.

as Borrower

COMMERZBANK AG and DVB BANK AG

as Lenders

DVB BANK AG

as Swap Bank, Agent, Joint-Arranger

and Security Trustee

and

COMMERZBANK AG

as Payment Agent, Account Bank,

 Joint-Arranger and Swap Bank

FACILITY AGREEMENT FOR A USD 260,000,000

REVOLVING CREDIT AND TERM LOAN FACILITY

INCE & CO

47-49 Akti Miaouli

Piraeus 185 36

Greece

Tel: 210 429 2543

Fax: 210 429 3318

 

 

Index

 

	
      Clause
 	
       
 	
       
 	
       
 	
      Page
 	
       
 
	
      1
 	
       
 	
      Purpose, Definitions, Construction & Majority Lenders
 	
       
 	
      1
 	
       
 
	
                        2
 	
                         
 	
                        The Available Commitment and Cancellation
 	
                         
 	
                        26
 	
                         
 
	
                        3
 	
                         
 	
                        Interest and Interest Periods
 	
                         
 	
                        29
 	
                         
 
	
                        4
 	
                         
 	
                        Repayment and Prepayment
 	
                         
 	
                        33
 	
                         
 
	
                        5
 	
                         
 	
                        Fees and Expenses
 	
                         
 	
                        38
 	
                         
 
	
                        6
 	
                         
 	
                        Payments and Taxes; Accounts and Calculations
 	
                         
 	
                        39
 	
                         
 
	
                        7
 	
                         
 	
                        Representations and Warranties
 	
                         
 	
                        43
 	
                         
 
	
                        8
 	
                         
 	
                        Undertakings
 	
                         
 	
                        49
 	
                         
 
	
                        9
 	
                         
 	
                        Conditions
 	
                         
 	
                        59
 	
                         
 
	
                        10
 	
                         
 	
                        Events of Default
 	
                         
 	
                        61
 	
                         
 
	
                        11
 	
                         
 	
                        Indemnities
 	
                         
 	
                        66
 	
                         
 
	
                        12
 	
                         
 	
                        Unlawfulness and Increased Costs
 	
                         
 	
                        68
 	
                         
 
	
                        13
 	
                         
 	
                        Application of moneys, set off, pro-rata payments and miscellaneous
 	
                         
 	
                        69
 	
                         
 
	
                        14
 	
                         
 	
                        Accounts and Retentions
 	
                         
 	
                        74
 	
                         
 
	
                        15
 	
                         
 	
                        Assignment, transfer and lending office
 	
                         
 	
                        76
 	
                         
 
	
                        16
 	
                         
 	
                        Arrangers, Agent and Security Trustee
 	
                         
 	
                        80
 	
                         
 
	
                        17
 	
                         
 	
                        Notices and other matters
 	
                         
 	
                        95
 	
                         
 
	
                        18
 	
                         
 	
                        Governing law
 	
                         
 	
                        97
 	
                         
 
	
                        19
 	
                         
 	
                        Jurisdiction
 	
                         
 	
                        97
 	
                         
 
	
                        Schedule 1 The Lenders and their Commitments
 	
                         
 	
                        101
 	
                         
 
	
                        Schedule 2 Vessels
 	
                         
 	
                        102
 	
                         
 
	
                        Schedule 3 Form of Drawdown Notice
 	
                         
 	
                        103
 	
                         
 
	
                        Schedule 4 Conditions precedent
 	
                         
 	
                        104
 	
   
 

 

 

 

	
      Schedule 5 Form of Transfer Certificate
 	
       
 	
      5
 	
       
 
	
                        Schedule 6 Form of Compliance Certificate
 	
                         
 	
                        10
 	
                         
 
	
                        Schedule 7 Form of Trust Deed
 	
                         
 	
                        12
 	
                         
 
	
                        Execution Pages
 	
                         
 	
                        13
 	
   
 

 

 

	
                        THIS AGREEMENT dated  
 	
                        November 2007 is made BY and BETWEEN:
 

	
      (1)
 	
                        NAVIOS MARITIME PARTNERS L.P. as Borrower;
 

	
      (2)
 	
  COMMERZBANK AG and DVB BANK AG as Lenders;
 

	
      (3)
 	
                        DVB BANK AG as Agent, Swap Bank, Joint-Arranger and Security Trustee; and
 

	
      (4)
 	
                        COMMERZBANK AG as Payment Agent, Account Bank, Joint-Arranger and Swap Bank.
 

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 Commerzbank AG and DVB Bank AG agree to make available to the Borrower a loan in the sum of two hundred and sixty million Dollars (USD 260,000,000) for the purpose of:

	
       
 	
                        (a)
 	
                        in respect of USD170,000,000, financing the acquisition of the Existing Owners, financing part of the purchase price of “FANTASTIKS” and providing the Borrower with general corporate and working capital;
 

	
       
 	
                        (b)
 	
                        enabling the Borrower to on-lend to Nostos the lesser of (i) USD60,000,000 and (ii) 65% of the Valuation Amount of a 180,000 dwt Capesize bulk carrier currently under construction at Daewoo Shipbuilding & Marine Engineering Co. Ltd. to enable Nostos to purchase the same;
 

	
       
 	
                        (c)
 	
                        enabling the Borrower to on-lend to Fantastiks Shipping Corporation up to USD30,000,000 to finance part of the purchase price of “FANTASTIKS”.
 

	
      1.2
 	
                        Definitions
 

In this Agreement, unless the context otherwise requires:

“Acceptable Charter”  means in respect of “FANTASTIKS”, a charterparty in respect thereof which (i) covers at least the period March 2011 until September 2014, (ii) is at a net 

 

 

1

 

daily charterhire of at least USD35,000 and (iii) is made with a charterer acceptable to the Agent;

“Account Bank” means Commerzbank AG a company incorporated in Germany, acting through its branch at Ness 7, 20457, Hamburg Germany or such other Lender as may be designated by the Agent as the Account Bank for the purposes of this Agreement;

“Advance A” means the advance of USD170,000,000 to be applied in the acquisition by the Borrower of the Existing Owners;

“Advance B” means the advance of USD30,000,000 to be applied in on-lending to Fantastiks for to be applied in or towards the acquisition of “FANTASTIKS”;

 “Advance C” means the advance equal to the lesser of (i) USD60,000,000 and (ii) 65% of the Valuation Amount of the Newbuilding no more than a month prior to her acquisition by Nostos, to be applied to in or towards the acquisition of the Newbuilding;

“Advances” means together, Advance A, Advance B, Advance C and any Revolving Advance and, in the singular, means any of them; 

“Agent” means DVB Bank AG a company incorporated in Germany, acting through its branch at 2-14 Friedrich-Ebert-Anlage, 60325 Frankfurt am Main, Germany (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;

“Applicable Margin” means, in relation to each Interest Period (i) up to and including 31 March 2008, 0.80%, and (ii) thereafter the relevant one of the following as shall be notified to the Borrower by the Payment Agent under Clause 3.5:

	
       
 	
                        (a)
 	
                        0.80% per annum while the Loan Amount is less than 40% of the Security Value;
 

	
       
 	
                        (b)
 	
                        1.00% per annum while the Loan Amount is equal to or more than 40% but less than 65% of the Security Value; and
 

	
       
 	
                        (c)
 	
                        1.25% per annum while the Loan Amount is equal to or more than 65% of the Security Value
 

 

 

2

 

where “Loan Amount” means the average of the amount of the Loan on close of business in Germany on each day during the three months preceding the Interest Period to which the Applicable Interest applies;

“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, 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;

“Arrangers” means, together, DVB Bank AG a company incorporated in Germany, acting through its branch at 2-14 Friedrich-Ebert-Anlage, 60325 Frankfurt am Main, Germany and Commerzbank AG acting through its office at Ness 7-9, 20457 Hamburg, Germany;

“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, Frankfurt and New York City (or any other relevant place of payment under clause 6);

“Banks” means, together, the Arrangers, the Agent, the Payment Agent, the Account Bank, the Security Trustee, the Lenders, the Swap Banks and any Transferee Lenders;

“Borrower” means Navios Maritime Partners L.P, a limited partnership established in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960; 

“Break Costs” means the aggregate amount of all losses, premiums, penalties, costs and expenses whatsoever certified by the Payment 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
 

 

 

3

 

	
       
 	
                        (b)
 	
                        as a result of the Borrower failing or being incapable of drawing an Advance after a relevant Drawdown Notice has been given;
 

“Builder”  means Daewoo Shipbuilding & Marine Engineering Co. Ltd. organised and existing under the laws of South Korea;

“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 each Existing Charter and each Existing Charter-out and of any Extended Employment Contract required to be executed hereunder by any Owner or any Charterer 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;

“Charter Test Date”  means 30 September 2010;

“Chartered Vessels”  means the Vessels referred to in Schedule 2 Part B while the same are subject to an Existing Charter-in;

“Charterer”  means each of the following corporations, each of which is incorporated in the Marshall Islands, and has its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;

	
       
 	
                        (a)
 	
                        Aldebaran Shipping Corporation (“Aldebaran”);
 

	
       
 	
                        (b)
 	
                        Fantastiks Shipping Corporation (“Fantastiks”); and
 

	
       
 	
                        (c)
 	
                        Prosperity Shipping Corporation (“Prosperity”);
 

“Classification” means, in relation to each Mortgaged Vessel, the highest class available for a vessel of her type with the relevant Classification Society;

“Classification Society” means, in relation to each Mortgaged Vessel, any IACS classification society which the Lenders shall, at the request of the Borrower, have agreed

 

 

4

 

 in writing shall be treated as the classification society in relation to such Mortgaged Vessel for the purposes of the relevant Ship Security Documents;

“Commitment” means in relation to each Lender, the sum set out opposite its name in schedule 1 part 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 6 signed by the chief financial officer of the Borrower;

“Compulsory Acquisition” means, in respect of a Mortgaged Vessel, requisition for title or other compulsory acquisition including, if that ship 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 relevant Owner’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;

 “Contribution” means, at any relevant time, in relation to each Lender, the principal amount of the Loan owing to such Lender at such time;

“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;

 

 

5

 

“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 relevant 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 3;

“Drawdown Period” means the period commencing on the Execution Date and ending on either (i)  if “FANTASTIKS” is subject to an Acceptable Charterparty on the Charter Test Date, the date falling 51 months after the Execution Date or (ii) otherwise, the date falling 45 months after the Execution Date or in any case any 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 current account of the Shareholder paying interest at a rate to be agreed between the Account Bank and the Shareholder opened with the Account Bank and includes any sub-accounts thereof and any other account designated in writing by the Payment 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 Shareholder and the Lenders in respect of the Earnings Account in such form as the Agent and the Majority Lenders may require in their sole discretion;

“EBITDA” means the aggregate amount of combined pre-tax profits of the Group before extraordinary or exceptional items, interest, depreciation and amortisation as shown, at any relevant time, by the Latest Accounts;

“Encumbrance” means any mortgage, charge, pledge, lien, hypothecation, assignment, title retention, preferential right, option, trust arrangement or security interest or other 

 

 

6

 

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;

“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 relevant Owner 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 

 

 

7

 

as a result and/or where the Manager and/or the relevant Owner 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 Charters” means, together:

	
       
 	
                        (a)
 	
                        the time charterparty in respect of m.v. “NAVIOS LIBRA II” as described in a recap dated 16 July 2007 made between Cargill International S.A. as charterer and the relevant Owner for a charterhire of USD21,613 net per day until 1 January 2008 and thereafter USD23,513 net per day until 31 December 2010;
 

	
       
 	
                        (b)
 	
                        the time charterparty in respect of m.v. “NAVIOS ALEGRIA” as described in a recap dated 16 July, 2007 made between Cargill International S.A. as charterer and the relevant Owner for a charterhire of USD19,475 net per day until 1 January 2008 and thereafter USD23,595 net per day until 31 March 2010;
 

	
       
 	
                        (c)
 	
                        the time charterparty in respect of m.v. “NAVIOS FELICITY” dated 29th November, 2002 made between Cosco Bulk Carrier as charterer and the relevant Owner for a charterhire of USD9,595 net per day until 25 May 2008 and thereafter USD26,169 net per day until April 2013;
 

 

 

8

 

	
       
 	
                        (d)
 	
                        the time charterparty in respect of m.v. “NAVIOS GALAXY I” dated 13th December, 2004 made between Mitsui Osk Lines Ltd. as charterer and the [Navios International/the relevant Owner] and upon termination of the same shall mean the time charterparty in respect of m.v. “NAVIOS GALAXY I” dated 27 July 2007 made between Rio Tinto Shipping Pty. Ltd. as charterer and [Navios International/the relevant Owner] for a charterhire of USD24,062 net per day until December 2007/March 2008 and thereafter USD21,937 net per day until 25 January 2018]; and
 

	
       
 	
                        (e)
 	
                        the time charterparty in respect of m.v. “NAVIOS GEMINI S” dated 11th August, 2006 made between Augustea Atlantica SrL Charterers of Naples as charterer and [Navios International/the relevant Owner] and upon termination of the same shall mean the time charterparty in respect of m.v. “NAVIOS GEMINI S” dated [                  ] made between Augustea Atlantica SrL Charterers of Naples as charterer and [Navios International/the relevant Owner] for a charterhire of USD19,523 net per day until 1 March 2009 and thereafter USD24,225 net per day until March 2014; and
 

	
       
 	
                        (f)
 	
  the time charterparty in respect of the Capesize dated [                   ] 2007 made between Mitsui Osk Lines Ltd as charterer and the relevant Owner for a charterhire of USD47,400 net per day until June 2014;
 

“Existing Charters-in” means, together:

	
       
 	
                        (a)
 	
                        the time charterparty in respect of m.v. “NAVIOS ALDEBARAN” dated 12th May, 2006 made between [Navios Corporation/Alderbaran] as charterer and Shoei Kisen Kaisha, Ltd. as owner a copy of which has been provided to the Lenders; and
 

	
       
 	
                        (b)
 	
                        the time charterparty in respect of m.v. “NAVIOS PROSPERITY” dated 1st May, 2006 made between [Navios Corporation/Prosperity] as charterer and Ever Bright Shipping SA as owner a copy of which has been provided to the Lenders;
 

“Existing Charters-out” means, together:

	
       
 	
                        (a)
 	
                        the time charterparty in respect of m.v. “NAVIOS ALDEBARAN” dated 31 July 2007 made between [Navios Corporation/Alderbaran] as charterer and Mitsui O.S.K. Lines, Ltd. as sub-charterers for a charterhire of USD28,390 net per day until 1 March 2013; and
 

 

 

9

 

	
       
 	
                        (b)
 	
                        the time charterparty in respect of m.v. “NAVIOS PROSPERITY” dated 13th March 2007 made between [Navios Corporation/Prosperity] as charterer and Daiichi Chuo Kisen Kaisha Ltd as sub-charterer for a charterhire of USD24,000 net per day until 19 June 2012;
 

“Existing Owners” means together: 

	
       
 	
                        (c)
 	
                        Libra Shipping Enterprises Corporation;
 

	
       
 	
                        (d)
 	
                        Alegria Shipping Corporation;
 

	
       
 	
                        (e)
 	
  Felicity Shipping Corporation;
 

	
       
 	
                        (f)
 	
  Gemini Shipping Corporation; and
 

	
       
 	
                        (e)
 	
  Galaxy Shipping Corporation
 

“Extended Employment Contract” means, in respect of a Mortgaged Vessel, any time charterparty, contract of affreightment or other contract of employment of such ship (including the entry of any Vessel in any pool) which has a tenor of not less than thirteen (13) months (including any options to renew or extend such tenor);

“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;

“FANTASTIKS” means the 180,265 dwt capesize bulk carrier owned by the Fantastiks Seller and which is to be purchased by Fantastiks under the Fantastiks MOA and to be registered on the Panamanian flag with the name “FANTASTIKS”;

“Fantastiks Assignment”  means the deed of assignment required to be executed hereunder by Fantastiks in favour of the Security Trustee in respect of its interest in and rights under the Fantastiks Earnings Agreement, in such form as the Agent and the Majority Lenders may require in their sole discretion;

“Fantastiks Charters”  means, together (i) the time charterparty in respect of m.v. “FANTASTIKS” dated 29th September, 2002 made between Kleimar as charterer and 

 

 

10

 

Southern Route Maritime SA as owner for a charterhire of USD14,428 net per day until March 2013 and (ii) the time charterparty (the “Fantastiks Charter-out”) in respect of m.v. “FANTASTIKS” dated 14 June 2005 made between Kleimar as charterer and The Sanko Steamship Co. Ltd. as charterer for a charterhire of USD32,272 net per day until March 2011; 

“Fantastiks Earnings Agreement”  means the agreement made or to be made between Kleimar and Fantastiks in relation to the net Earnings receivable by Kleimar as charterer in respect of “FANTASTIKS”;

“Fantastiks MOA”  means the memorandum of agreement dated 31 October 2007 made between Kleimar as seller and Fantastiks as buyer of “FANTASTIKS”;

“Fantastiks Kleimar MOA”  means the memorandum of agreement dated [                     ] 2007 made between the Fantastiks Seller as seller and Kleimar as buyer of “FANTASTIKS”;

“Fantastiks Seller”  means Southern Route Maritime SA of Panama;

 “Flag State” means Panama or any other country acceptable to the Lenders;

“General Assignment”  means, in respect of each Mortgaged Vessel, the deed of assignment of its earnings, insurances and requisition compensation executed or to be executed by the relevant Owner 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 Borrower and its subsidiaries;

“Group Member” means any member of the Group;

“Guarantee” means each unconditional, irrevocable and on demand guarantee of the obligations of the Borrower under this Agreement and the Master Agreements required to be executed by the Guarantors and the Shareholder  in favour of the Security Trustee in such form as the Agent and the Majority Lenders may require in their sole discretion;

 

 

11

 

“Guarantors” means each of the following corporations, each of which is incorporated in the Marshall Islands, and has its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;

	
       
 	
                        (a)
 	
                        Libra Shipping Enterprises Corporation;
 

	
       
 	
                        (b)
 	
                        Alegria Shipping Corporation;
 

	
       
 	
                        (c)
 	
                        Felicity Shipping Corporation;
 

	
       
 	
                        (d)
 	
                        Gemini Shipping Corporation;
 

	
       
 	
                        (e)
 	
                        Galaxy Shipping Corporation;
 

	
       
 	
                        (f)
 	
  Nostos Shipmanagement Inc. (herein referred to as “Nostos”); and
 

	
       
 	
                        (g)
 	
  the Shareholder
 

and Fantastiks Shipping Corporation (herein referred to as “Fantastiks”) upon it becoming an Owner pursuant to the Fantastiks MOA;

“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;

“Interest Expense” means, for any relevant financial year, the aggregate interest payable by the Group and any member thereof on any Indebtedness during such period;

“Interest Payment Date” means the last day of an Interest Period and, if an Interest Period is longer than three (3) months, the date falling at the end of each successive period of three (3) months from the start of such Interest Period;

“Interest Period” means, in relation to an Advance and the Loan, each period for the calculation of interest ascertained in accordance with clauses 3.2 and 3.3;

“ISM Code Documentation” means, in relation to a Mortgaged Vessel, the document of compliance (DOC) and safety management certificate (SMC) issued by a Classification Society pursuant to the ISM Code in relation to that Mortgaged Vessel within the periods specified by the ISM Code;

 

 

12

 

“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 a Mortgaged Vessel pursuant to the ISPS Code;

	
       
 	
                        “Kleimar” means Kleimar NV, whose registered office is at [  
 	
  ], Belgium;
 

“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 part 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 Payment 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 on Reuters Screen LIBOR01 at or about 11 a.m. on the second Banking Day before the first day of such period (and, for the purposes of this Agreement, “Reuters Screen LIBOR01” means the display designated as “LIBOR01” on the Reuters Service or such other page as may replace LIBOR01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying the
British Bankers’ Association Interest Settlement Rates for USD);

“Liquidity” means: 

 

 

13

 

	
       
 	
                        (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 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 260,000,000;

“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 Agreements” means, in respect of each Mortgaged Vessel, the agreements between the relevant Owner and the Manager, each in a form previously approved in writing by the Agent (acting on the instructions of the Majority Lenders);

“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 an Owner, with the prior written consent of the Agent, as the commercial and/or technical manager of the relevant Mortgaged Vessel;

 

 

14

 

“Manager’s Undertakings” means, collectively, the undertakings and assignments required to be executed hereunder by the Manager in favour of the Security Trustee in respect of each of the Mortgaged Vessels each in such form as the Agent and the Majority Lenders may require in their sole discretion;

“Master Agreements” means together (i) an ISDA Master Agreement made or to be made between the DVB and the Borrower and (ii) an ISDA Master Agreement made or to be made between Commerzbank and the Borrower;

“Master Agreement Security Deed” means, in relation to each Master Agreement, the security deed 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 and in the plural means both of them;

“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 date falling 10 years after the Execution Date;

“MII & MAP Policy” means a mortgagee’s interest and pollution risks insurance policy (including additional perils (pollution) cover) in respect of each Mortgaged Vessel to be effected by the Security Trustee on or before the first Drawdown Date to cover the Mortgaged Vessels 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 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;

 

 

15

 

“Minimum Liquidity”  means, on the first Drawdown Date, USD5,000,000 as the same shall increase by USD8,000,000 on 31 December 2008 and on each anniversary thereof up to and including 31 December 2011;

“MOAs”  means together the Fantastiks Kleimar MOA, the Fantastiks MOA and the Newbuilding MOA;

“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 each Vessel, the first preferred Panamanian Ship mortgage thereof required to be executed hereunder by the Owner thereof in favour of the Security Trustee, each in such form as the Agent and the Majority Lenders may require in their sole discretion;

“Mortgaged Vessel” means, at any relevant time, any Vessel which is at such time subject to a Mortgage and a Vessel shall, for the purposes of this Agreement, be regarded as a Mortgaged Vessel as from the date on which the Mortgage of that Vessel has been executed and registered in accordance with this Agreement until whichever shall be the earlier of (i) the payment in full of the amount required to be paid to the Agent pursuant to clause 4.3 or 4.4 following the Total Loss or sale respectively of such Vessel and (ii) the end of the Facility Period;

“Navios GP”  means Navios GP L.L.C., a company organised and existing under the laws of the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

 

 

16

 

“Navios Holdings”  means Navios Maritime Holdings Inc., a company incorporated in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

“Navios International”  means Navios International Inc., a corporation incorporated in Connecticut, USA and having its registered office at [                       ];

“Net Worth” means, by reference to the Latest Accounts in respect of the Group, the Total Assets (adjusted for market value) less Total Liabilities of the Group;

“Newbuilding” means the 180,000 dwt capesize bulk carrier which is being constructed by the Builder with Builder’s Hull No. 1172 and which is to be purchased by, Nostos under the Newbuilding MOA and to be registered on the Panamanian flag with the name “[                       ]”;

“Newbuilding MOA” means the memorandum of agreement dated 19 July 2007 entered into between the Newbuilding Seller and Nostos for the sale and purchase of the Newbuilding;

“Newbuilding Seller”  means Dry Bulk World Inc. of Panama;

“Omnibus Agreement” means the agreement made or to be made between the Borrower, the Shareholder, Navios GP and Navios Holdings in relation to certain business opportunities of the parties thereto in a form acceptable to the Lenders;

“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;

 “Owned Vessels”  means the Vessels referred to in Schedule 2 Part A;

“Owner” means, in respect of each Vessel, the Guarantor which is stated in schedule 2 to be the owner thereof or, in relation to the Newbuilding and “FANTASTIKS”,  Nostos and Fantastiks respectively upon becoming the owner thereof;

 “Payment Agent” means Commerzbank AG a company incorporated in Germany, acting through its branch at Ness 7, 20457, Hamburg, Germany (or of such other address

 

 

17

 

 

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;

“Permitted Encumbrance” means any Encumbrance in favour of the Banks or any of them created pursuant to the Security Documents and Permitted Liens;

“Permitted Liens” means any lien on any Mortgaged 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) exceeding the Casualty Amount (as defined in the Ship Security Documents for such Mortgaged Vessel);

“Permitted Owners” means, in relation to the Borrower, any one or more of Navios Holdings, any of its subsidiaries, Navios GP and, (as legal and/or beneficial owner), Mrs. Angeliki Frangou;

“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;

“Prepayment Ratio” means in respect of the sale or Total Loss of a Mortgaged Vessel the Valuation Amount of such Mortgaged Vessel immediately prior to such sale or Total Loss divided by the Security Value immediately prior to such sale or Total Loss and for these purposes any valuation of a Vessel (calculated in accordance with Clause 8.2.2) may be no more than two months old;

 “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);

“Registry” means, in relation to each Vessel, the office of the registrar, commissioner or representative of the Flag State, who is duly empowered to register such Vessel, the 

 

 

18

 

relevant Owner’s title thereto and the relevant Mortgage under the laws and flag of the Flag State;

“Relevant Ship” means each of the Mortgaged Vessels 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 Date” means the date on which any instalment of the Loan is repayable under the provisions of clause 4.1;

“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 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 any 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 forty three per cent (143%) of the Loan;

“Retention Account” means an interest bearing USD current account of the Borrower paying interest at a rate to be agreed between the Account Bank and the Borrower opened with the Account Bank and includes any sub-accounts thereof and any other account designated in writing by the Payment Agent to be the Retention Account for the purposes of this Agreement;

“Retention Account Pledge” means a first priority charge required to be executed hereunder between the Borrower and the Lenders in respect of the Retention Account in such form as the Agent and the Majority Lenders may require in their sole discretion;

“Retention Amount” means, in relation to any Retention Date, such sum as shall be the aggregate of:

 

 

19

 

	
                         
 	
                        (a)
 	
                        (on and after the date falling 2 months before the first Repayment Date under Clause 4.1(a) or, if proviso (ii) to Clause 4.1 applies, then 2 months before each of the Repayment Dates referred to in that proviso) one-third (1/3rd) of the repayment instalment in respect of the Loan falling due for payment pursuant to clause 4.1.3 (as the same may have been reduced by any prepayment) on the next Repayment Date after the relevant Retention Date; and
 

	
                         
 	
                        (b)
 	
                        the applicable fraction (as hereinafter defined) of the aggregate amount of interest falling due for payment in respect of each part of the Loan during and at the end of each Interest Period current at the relevant Retention Date and, for this purpose, the expression “applicable fraction” in relation to each Interest Period shall mean a fraction having a numerator of one and a denominator equal to the number of Retention Dates falling within the relevant Interest Period;
 

“Retention Dates” means the date falling thirty (30) days after the first Drawdown Date and each of the dates falling at monthly intervals after such date and prior to the Maturity Date;

“Revolving Advance” means each amount of any part of the Loan which has been repaid pursuant to clause 4.2 and which the Borrower re-draws in accordance with Clause 2.6;

“Revolving Commitment” means in relation to each Lender in relation to each Revolving Advance, the ratio which that Lender’s Contribution bears to the Loan immediately prior to advance of the relevant Revolving Advance multiplied by the relevant Revolving Advance;

“Revolving Facility” means any part of the Loan which, after it has been drawn down hereunder, has been prepaid by the Borrower pursuant to Clause 4.2, which sums are available subject to the terms of this Agreement to be advanced to the Borrower during the Drawdown Period pursuant to Clause 2.6 and as the amount thereof may be reduced pursuant to Clause 2.8;

“Security Documents” means this Agreement, the Master Agreements, the Master Agreement Security Deeds, the Fantastiks Assignment, the Mortgages, the Guarantees, the General Assignments, the Charter Assignments, the Earnings Accounts Pledge, the 

 

 

20

 

Retention Account Pledge, the Manager’s Undertakings, (with effect from the date of execution pursuant to Clause 8.1.19) the Shares Pledges and any other documents as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or 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 Guarantors 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 DVB Bank AG a company incorporated in Germany, acting through its branch at 2-14 Friedrich-Ebert-Anlage, 60325 Frankfurt am Main, Germany (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 Payment Agent and the Agent pursuant to clause 16.14;

“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 Mortgaged Vessels 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);

 “Shareholder” means, Navios Maritime Operating L.L.C. a company incorporated in the Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;

“Shares Pledge” means the first priority pledge of the shares of and in each Owner required to be executed at any time under clause 8.1.19 by the Shareholder in favour of the Security Trustee and/or a Lender in such form as the Agent and the Majority Lenders may require in their sole discretion and in the plural means all of them;

 

 

21

 

“Ship Security Documents” means, in relation to each Mortgaged Vessel, the relevant Mortgage, the relevant General Assignment, any relevant Charter Assignment and the relevant 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 Banks” means each of DVB Bank AG a company incorporated in Germany, acting through its branch at 2-14 Friedrich-Ebert-Anlage, 60325 Frankfurt am Main, Germany and Commerzbank AG (in such capacity, “Commerzbank”) acting through its office at Kaiserstrasse 16, 60261 Frankfurt am Main, Germany;

“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);

“Total Assets” and “Total Liabilities” mean, respectively, the total assets and total liabilities of the Corporate Guarantor’s 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 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 “FANTASTIKS” (prior to the advance of Advance B) and each Mortgaged Vessel:

 

 

22

 

	
                         
 	
                        (a)
 	
                        actual, constructive, compromised or arranged total loss of “FANTASTIKS” or, as the case may be, such Mortgaged Vessel; or
 

	
                         
 	
                        (b)
 	
                        Compulsory Acquisition; or
 

	
                         
 	
                        (c)
 	
                        any hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of “FANTASTIKS” or, as the case may be, such Mortgaged 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 “FANTASTIKS” or, as the case may be, such Mortgaged Vessel be released and restored to the relevant Owner within thirty (30) days after such incident;
 

“Transaction” means a Transaction as defined in the Master Agreement;

“Transfer Certificate” means a certificate in substantially the form set out in schedule 5;

“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 7;

“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 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);

 

 

23

 

“Underlying Documents” means, together, the Fantastiks Earnings Agreement, the MOAs, the Existing Charters, the Existing Charters-in, the Existing Charters-out, any Extended Employment Contracts and the Management Agreements;

“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 each Mortgaged Vessel, the value thereof as most recently determined under clause 8.2.2; and

“Vessels” means together the Owned Vessels, the Chartered Vessels and the Newbuilding.

	
                        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;
 

	
                        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;
 

 

 

24

 

	
                        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 Payment 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; 
 

	
                        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
 

 

 

25

 

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 by making available the Advances for the purposes of (i) financing part of the purchase price of the Newbuilding, (ii) financing part of the purchase price of “FANTASTIKS” and (iii) financing the acquisition of the Existing Owners, financing part of the purchase price of “FANTASTIKS” and providing the Borrower with general corporate and working capital. 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.

	
                        2.2
 	
                        Obligations several
 

 

 

26

 

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
 	
                        Subject to the terms and conditions of this Agreement, each Advance shall be made available to the Borrower following receipt by the Payment Agent from the Borrower of a Drawdown Notice not later than 10:00 a.m. on the third Banking Day before the date, which shall be a Banking Day falling within the Drawdown Period, on which the Borrower proposes such Advance is made available.
 

	
                        2.4.2
 	
                        A Drawdown Notice shall be effective on actual receipt by the Payment Agent and, once given, shall, subject as provided in clause 3.6, be irrevocable.
 

	
                        2.5
 	
                        Limitation and application of Advances
 

	
                        2.5.1
 	
                        The amount of the Loan shall not exceed the amount of the Loan Facility.
 

	
                        2.5.2
 	
                        The Loan shall be made available by the advance of the Advance A, Advance B and Advance C each in the amounts referred to in clause 1.2 and the Revolving Advances.
 

	
                        2.5.3
 	
                        Each Advance shall be paid forthwith upon drawdown to such account or accounts as the Borrower shall stipulate in the relevant Drawdown Notice.
 

	
                        2.6
 	
                        Revolving Advances
 

 

 

27

 

	
                        2.6.1
 	
                        The Borrower may re-draw any amounts prepaid by it pursuant to Clause 4.2, on the following terms:
 

	
                         
 	
                        (a)
 	
                        The aggregate amount of the Revolving Advances shall not exceed the aggregate amount of sums prepaid by the Borrower under Clause 4.2;
 

	
                         
 	
                        (b)
 	
                        Each Revolving Advance must be five hundred thousand Dollars (USD 500,000) or a whole multiple thereof;
 

	
                         
 	
                        (c)
 	
                        The Borrower shall have given the Payment Agent at least 3 Banking Days notice; 
 

	
                         
 	
                        (d)
 	
                        each Lender shall contribute to each Revolving Advance in the amount of its Revolving Commitment;
 

	
                         
 	
                        (e)
 	
                        no Event of Default shall have occurred which is continuing or would occur as a result of such Revolving Advance being made available;
 

	
                         
 	
                        (f)
 	
                        following the advance of a Revolving Advance, the Security Value exceeds the Required Security Amount;
 

	
                         
 	
                        (g)
 	
                        no Revolving Advance may be made after a repayment instalment has become due under clause 4.1; and
 

	
                         
 	
                        (h)
 	
                        no more than 6 repayments and drawing may be made in aggregate during any three month period commencing on the first Drawdown Date.
 

	
                        2.7
 	
                        Availability
 

Upon receipt of a Drawdown Notice complying with the terms of this Agreement, the Payment Agent shall promptly notify each Lender and each Lender shall make available to the Payment Agent its portion of the relevant Advance for payment by the Payment Agent in accordance with clause 6.2. The Borrower acknowledges that payment of any Advance to the account referred to in Clause 2.5.3 shall satisfy the obligation of the Lenders to lend that Advance to the Borrower under this Agreement. 

	
                        2.8
 	
                        Voluntary cancellation of Facility
 

The Borrower may at any time during the Drawdown Period by notice to the Payment Agent (effective only on actual receipt) cancel with effect from a date not less than five 

 

 

28

 

Banking Days after the receipt by the Payment Agent of such notice the whole or any part (being five hundred thousand Dollars (USD 500,000) or any larger sum which is an integral multiple of five hundred thousand Dollars (USD 500,000) of the Revolving Facility. Any such notice of cancellation, once given, shall be irrevocable and the aggregate Commitments shall be reduced accordingly.

	
                        2.9
 	
                        Cancellation in changed circumstances
 

The Borrower may also at any time during the Facility Period by notice to the Payment Agent (effective only on actual receipt) prepay and cancel with effect from a date not less than fifteen (15) days after receipt by the Payment 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 any further Advances.

	
                        2.10
 	
                        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 any Advance or any part thereof by the Borrower.

	
                        3
 	
                        INTEREST AND INTEREST PERIODS
 

	
                        3.1
 	
                        Normal interest rate
 

The Borrower must pay interest on each Advance and the Loan in respect of each Interest Period relating thereto on each Interest Payment Date at the rate per annum determined by the Payment Agent to be the aggregate of (i) in respect of Interest Periods of 12 months or less (a) the Applicable Margin and (b) LIBOR or (ii) in respect of Interest Periods of more than 12 months (a) the applicable Margin, (b) (in repect of each Contribution) the 

 

 

29

 

actual cost of funds to that Lender to fund its Contribution and (c) Mandatory Costs (if any).

	
                        3.2
 	
                        Selection of Interest Periods
 

Subject to clause 3.3, the Borrower may by notice received by the Payment Agent not later than 10:00 a.m. on the fourth Banking Day before the beginning of each Interest Period specify whether such Interest Period shall have a duration of three (3), six (6), nine (9) or twelve (12) months or such other period as the Borrower may select and the Payment Agent (acting on the instructions of the Lenders) may agree, and if the Borrower wishes to specify an Interest Period of more than 12 months, it must give at least 5 Banking Days prior notice thereof.

	
                        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 in respect of each Advance (including each Revolving Advance) shall start on the date such Advance is drawn and shall terminate simultaneously with the Interest Period in respect of the balance of the Loan which is current on the Drawdown Date in respect of such Advance (from which date all Advances which have been drawn shall be consolidated and be treated as a single Advance) and each subsequent Interest Period shall start on the last day of the previous Interest Period for such Revolving Advance or, as the case may be, the Loan;
 

	
                        3.3.2
 	
                        if any Interest Period would otherwise overrun a relevant Repayment Date, then the Loan shall be divided into parts so that there is one part in the amount of the repayment instalment due on such Repayment Date and having an Interest Period ending on the relevant Repayment Date and another part in the amount of the balance of the Loan having an Interest Period ascertained in accordance with clause 3.2 and the other provisions of this clause 3.3; 
 

	
                        3.3.3
 	
                        if the Borrower fails to specify the duration of an Interest Period in accordance with the provisions of clause 3.2 and this clause 3.3, such Interest Period shall have a duration of three (3) months or such other period as shall comply with this clause 3.3.
 

	
                        3.4
 	
                        Default interest
 

 

 

30

 

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 Payment 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 Payment 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 Payment Agent) of (a) two per cent (2%) per annum, (b) the Applicable Margin (which shall be
for the purposes of this Clause, 1.25% per annum) and (c) 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 Payment 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 Payment Agent under clause 10.2.2 or a prepayment pursuant to clauses 4.3, 4.4, 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 Payment 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 Payment Agent is unable to determine a rate in accordance with the foregoing provisions of this clause 3.4, each Lender shall promptly notify the Payment 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 Payment Agent to be two per cent (2%) per annum above the aggregate of the Applicable Margin and the arithmetic mean of the cost of funds to the Lenders compounded at such intervals as the Payment Agent selects.

	
                        3.5
 	
                        Calculation of Applicable Margin and Notification of Interest Periods and interest rate
 

 

 

31

 

The Payment Agent shall on 31 March 2008 and every three months thereafter calculate the Applicable Margin for the following three months and the Payment Agent shall make such calculations by reference to valuations obtained under or in accordance with Clause 8.2.2(a) and the Payment 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 Payment Agent shall have determined that adequate and fair means do not exist for ascertaining LIBOR during such Interest Period; or
 

	
                         
 	
                        (b)
 	
                        the Payment 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 or the Revolving Facility for such Interest Period
 

	
                         
 	
                        (c)
 	
                        the Payment 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 Payment Agent.
 

	
                        3.6.2
 	
                        Within ten (10) days of any Determination Notice being given by the Payment 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 an Applicable Margin above the cost of funds to such Lender. The Payment 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 Payment Agent notifies the Borrower that none of the circumstances specified in clause 3.6.1 continues to exist whereupon the normal interest 
 

 

 

32

 

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 to any obligation to pay earlier under this Agreement, the Borrower must repay the Loan in such amounts as will reduce the amount of the Loan (a) if an Acceptable Charter has been executed by Fantastiks on or before the Charter Test Date, to the amounts set out in Column “B” or (b) if an Acceptable Charter has not been executed by Fantastiks on or before the Charter Test Date, to the amounts set out in Clause “C”, in each case on the dates falling the number of months after the first Drawdown Date set out in Column “A”:
 

	
                        (a)
 	
                        if all three Advances are made available or if Advance B or any part thereof is not made available but nevertheless “FANTASTIKS” is subject to a Mortgage,
 

 

	
                        “A”
 	
                         
 	
                        “B”
 	
                         
 	
                        “C”
 
	
                        Months after first
 Drawdown Date
 	
                         
 	
                        Loan Amount 
 Outstanding
 	
                         
 	
                        Loan Amount 
 Oustanding
 
	
                        45
 	
                         
 	
                        USD260,000,000
 	
                         
 	
                        USD251,750,000
 
	
                        48
 	
                         
 	
                        USD260,000,000
 	
                         
 	
                        USD243,500,000
 
	
                        51
 	
                         
 	
                        USD250,000,000
 	
                         
 	
                        USD235,375,000
 
	
                        54
 	
                         
 	
                        USD240,000,000
 	
                         
 	
                        USD227,250,000
 
	
                        57
 	
                         
 	
                        USD230,000,000
 	
                         
 	
                        USD219,125,000
 
	
                        60
 	
                         
 	
                        USD220,000,000
 	
                         
 	
                        USD211,000,000
 
	
                        63
 	
                         
 	
                        USD210,500,000
 	
                         
 	
                        USD202,875,000
 
	
                        66
 	
                         
 	
                        USD201,000,000
 	
                         
 	
                        USD194,750,000
 
	
                        69
 	
                         
 	
                        USD191,500,000
 	
                         
 	
                        USD186,625,000
 
	
                        72
 	
                         
 	
                        USD182,000,000
 	
                         
 	
                        USD178,500,000
 
	
                        75
 	
                         
 	
                        USD173,000,000
 	
                         
 	
                        USD170,375,000
 
	
                        78
 	
                         
 	
                        USD164,000,000
 	
                         
 	
                        USD162,250,000
 
	
                        81
 	
                         
 	
                        USD155,000,000
 	
                         
 	
                        USD154,125,000
 
	
                        84
 	
                         
 	
                        USD146,000,000
 	
                         
 	
                        USD146,000,000
 
	
                        87
 	
                         
 	
                        USD138,375,000
 	
                         
 	
                        USD138,375,000
 
	
                        90
 	
                         
 	
                        USD130,750,000
 	
                         
 	
                        USD130,750,000
 
	
                        93
 	
                         
 	
                        USD123,125,000
 	
                         
 	
                        USD123,125,000
 
	
                        96
 	
                         
 	
                        USD115,500,000
 	
                         
 	
                        USD115,500,000
 
	
                        99
 	
                         
 	
                        USD107,875,000
 	
                         
 	
                        USD107,875,000
 
	
                        102
 	
                         
 	
                        USD100,250,000
 	
                         
 	
                        USD100,250,000
 
	
                        105
 	
                         
 	
                        USD 92,625,000
 	
                         
 	
                        USD 92,625,000
 
	
                        108
 	
                         
 	
                        USD 85,000,000
 	
                         
 	
                        USD 85,000,000
 
	
                        111
 	
                         
 	
                        USD 77,375,000
 	
                         
 	
                        USD 77,375,000
 
	
                        114
 	
                         
 	
                        USD 69,750,000
 	
                         
 	
                        USD 69,750,000
 
	
                        117
 	
                         
 	
                        USD 62,125,0000
 	
                         
 	
                        USD 62,125,000
 
	
                        120
 	
                         
 	
                        0
 	
                         
 	
                        0
 

 

 

 

33

 

	
                        (b)
 	
                        If Advance A and Advance C are made available but Advance B is not made available hereunder,
 

 

	
                        “A”
 	
                         
 	
                        “B”
 
	
                        Month after first
 Drawdown Date
 	
                         
 	
                        Loan Amount 
 Outstanding
 
	
                         
 	
                         
 	
                        USD200,000,000
 
	
                        45
 	
                         
 	
                        USD193,653,845
 
	
                        48
 	
                         
 	
                        USD187,307,690
 
	
                        51
 	
                         
 	
                        USD181,057,690
 
	
                        54
 	
                         
 	
                        USD174,807,690
 
	
                        57
 	
                         
 	
                        USD168,557,690
 
	
                        60
 	
                         
 	
                        USD162,307,690
 
	
                        63
 	
                         
 	
                        USD156,057,690
 
	
                        66
 	
                         
 	
                        USD149,807,690
 
	
                        69
 	
                         
 	
                        USD143,557,690
 
	
                        72
 	
                         
 	
                        USD137,307,690
 
	
                        75
 	
                         
 	
                        USD131,057,690
 
	
                        78
 	
                         
 	
                        USD124,807,690
 
	
                        81
 	
                         
 	
                        USD118,557,690
 
	
                        84
 	
                         
 	
                        USD112,307,690
 
	
                        87
 	
                         
 	
                        USD106,442,305
 
	
                        90
 	
                         
 	
                        USD100,576,920
 
	
                        93
 	
                         
 	
                        USD 94,711,535
 
	
                        96
 	
                         
 	
                        USD 88,846,150
 
	
                        99
 	
                         
 	
                        USD 82,980,765
 
	
                        102
 	
                         
 	
                        USD 77,115,380
 
	
                        105
 	
                         
 	
                        USD 71,240,995
 
	
                        108
 	
                         
 	
                        USD 65,384,610
 
	
                        111
 	
                         
 	
                        USD 59,519,225
 
	
                        114
 	
                         
 	
                        USD 53,653,840
 
	
                        117
 	
                         
 	
                        USD 47,788,455
 
	
                        120
 	
                         
 	
                        0
 

	
                        (c)
 	
                        If Advance A and B are made available but Advance C is not made available hereunder, 
 

 

	
                        “A”
 	
                         
 	
                        “B”
 	
                         
 	
                        “C”
 
	
                        Month after first
 Drawdown Date
 	
                         
 	
                        Loan Amount 
 Outstanding
 	
                         
 	
                        Loan Amount 
 Oustanding
 
	
                         
 	
                         
 	
                        USD200,000,000
 	
                         
 	
                        USD200,000,000
 
	
                        45
 	
                         
 	
                        USD200,000,000
 	
                         
 	
                        USD194,000,000
 
	
                        48
 	
                         
 	
                        USD200,000,000
 	
                         
 	
                        USD188,000,000
 
	
                        51
 	
                         
 	
                        USD192,625,000
 	
                         
 	
                        USD182,125,000
 
	
                        54
 	
                         
 	
                        USD185,250,000
 	
                         
 	
                        USD176,250,000
 
	
                        57
 	
                         
 	
                        USD177,875,000
 	
                         
 	
                        USD170,375,000
 
	
                        60
 	
                         
 	
                        USD170,050,000
 	
                         
 	
                        USD164,500,000
 
	
                        63
 	
                         
 	
                        USD163,625,000
 	
                         
 	
                        USD158,625,000
 

 

 

 

34

 

 

	
                        66
 	
                         
 	
                        USD156,750,000
 	
                         
 	
                        USD152,750,000
 
	
                        69
 	
                         
 	
                        USD149,875,000
 	
                         
 	
                        USD146,875,000
 
	
                        72
 	
                         
 	
                        USD143,000,000
 	
                         
 	
                        USD141,000,000
 
	
                        75
 	
                         
 	
                        136,625,000
 	
                         
 	
                        USD135,125,000
 
	
                        78
 	
                         
 	
                        USD130,250,000
 	
                         
 	
                        USD129,250,000
 
	
                        81
 	
                         
 	
                        USD123,875,000
 	
                         
 	
                        USD123,375,000
 
	
                        84
 	
                         
 	
                        USD117,500,000
 	
                         
 	
                        USD117,500,000
 
	
                        87
 	
                         
 	
                        USD110,625,000
 	
                         
 	
                        USD110,625,000
 
	
                        90
 	
                         
 	
                        USD103,750,000
 	
                         
 	
                        USD103,750,000
 
	
                        93
 	
                         
 	
                        USD 96,875,000
 	
                         
 	
                        USD 96,875,000
 
	
                        96
 	
                         
 	
                        USD 90,000,000
 	
                         
 	
                        USD 90,000,000
 
	
                        99
 	
                         
 	
                        USD 83,125,000
 	
                         
 	
                        USD 83,125,000
 
	
                        102
 	
                         
 	
                        USD 76,250,000
 	
                         
 	
                        USD 76,250,000
 
	
                        105
 	
                         
 	
                        USD 69,375,000
 	
                         
 	
                        USD 69,375,000
 
	
                        108
 	
                         
 	
                        USD 62,500,000
 	
                         
 	
                        USD 62,500,000
 
	
                        111
 	
                         
 	
                        USD 55,625,000
 	
                         
 	
                        USD 55,625,000
 
	
                        114
 	
                         
 	
                        USD 48,750,000
 	
                         
 	
                        USD 48,750,000
 
	
                        117
 	
                         
 	
                        USD 41,875,000
 	
                         
 	
                        USD 41,875,000
 
	
                        120
 	
                         
 	
                        0
 	
                         
 	
                        0
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 

	
                        4.1.2
 	
                        The Borrower shall on the Maturity Date also pay to the Payment 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 4.3, 4.4, 4.5 and 4.6 the Borrower may, subject to having given 5 Banking Days prior notice thereof to the Payment Agent, prepay any specified amount (such part being in an amount of five hundred thousand Dollars (USD 500,000) 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.

	
                        4.3
 	
                        Mandatory Prepayment/Reduction on Total Loss
 

	
                        4.3.1
 	
                        On the date falling one hundred and eighty (180) days after that on which a Mortgaged 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 for such Vessel) is, received by the Owner thereof (or the Security Trustee or any other Bank pursuant to the Security Documents) the Borrower must prepay the Loan by an amount equal to the amount of the Loan on the date on which such prepayment is required to be made multiplied by the Prepayment Ratio.
 

 

 

35

 

	
                        4.3.2
 	
                        On the date falling one hundred and eighty (180) days after that on which “FANTASTIKS” became a Total Loss, if the same occurs prior to her becoming a Mortgaged Vessel, the Borrower must prepay the Loan by an amount equal to Advance B.
 

	
                        4.4
 	
                        Interpretation
 

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

	
                        4.4.1
 	
                        in the case of an actual total loss of a Vessel, on the actual date and at the time such Vessel was lost or, if such date is not known, on the date on which such Vessel was last reported; 
 

	
                        4.4.2
 	
                        in the case of a constructive total loss of a Vessel, upon the date and at the time notice of abandonment of the ship is given to the then insurers of such 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;
 

	
                        4.4.3
 	
                        in the case of a compromised or arranged total loss of a 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 such Vessel;
 

	
                        4.4.4
 	
                        in the case of Compulsory Acquisition, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and
 

	
                        4.4.5
 	
                        in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of a 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 an Owner of the use of such Vessel for more than thirty (30) days, upon the expiry of the period of thirty (30) days after the date upon which the relevant incident occurred.
 

	
                        4.5
 	
                        Mandatory prepayment/Reduction on sale of Mortgaged Vessel
 

	
                        4.5.1
 	
                        On the date of completion of the sale of any Mortgaged Vessel the Borrower must prepay the Loan by an amount equal to the amount of the Loan on the date on which such prepayment is required to be made multiplied by the Prepayment Ratio.
 

 

 

36

 

	
                        4.5.2
 	
                        On the date of completion of the sale of “FANTASTIKS” otherwise than to Fantastiks prior to her becoming a Mortgaged Vessel, the Borrower must prepay the Loan by an amount equal to Advance B.
 

	
                        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, any accrued commitment commission payable under clause 5.1.
 

	
                        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 Payment 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.
 

	
                        4.7.2
 	
                        Upon prepayment in respect of the Loan pursuant to clauses 4.3 or 4.4 the Loan amounts set out in column “B” or “C” as appropriate in Clause 4.1 relating to the period after such prepayment shall each be reduced pro rata in an amount equal in aggregate to the amount by which the Loan is being prepaid.
 

	
                        4.7.3
 	
                        Upon prepayment in respect of the Loan pursuant to clause 4.2 the Loan amounts set out in column “B” or “C” as appropriate in Clause 4.1 relating to the period after such prepayment shall each be reduced in inverse order in an amount equal in aggregate to the amount by which the Loan is being prepaid.
 

	
                        4.7.4
 	
                        The Borrower may not prepay any part of the Loan except as expressly provided in this Agreement.
 

 

 

 

37

 

 

	
                        5
 	
                        FEES AND EXPENSES
 

	
                        5.1
 	
                        Commission
 

	
                        5.1.1
 	
                        The Borrower agrees to pay to the Payment Agent for the account of the Lenders pro rata in accordance with their Total Commitments quarterly in arrears from the Execution Date until the end of the Drawdown Date and on the last day of the Drawdown Period commitment commission computed from the Execution Date at a rate of zero point three five per cent (0.35%) per annum on the daily amount of the undrawn Loan Facility.
 

	
                        5.1.2
 	
                        The commission referred to in clause 5.1.1 must be paid by the Borrower to the Payment Agent, whether or not any part of the Total Commitment is ever advanced and shall be non-refundable.
 

	
                        5.2
 	
                        Fees
 

The Borrower shall pay to the Payment Agent (i) a non-refundable agency fee of USD20,000 per annum for the account of the Agent and the Payment Agent in such proportion as they shall agree between them, such fee being payable in advance on the Execution Date and annually thereafter and (ii) all amounts required to be paid in accordance with a fee letter bearing even date with this Agreement.

	
                        5.3
 	
                        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 4) certified by the Banks or any of them as having been incurred by them from time to time:

	
                        5.3.1
 	
                        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 howsoever in connection with, any of the Security Documents (including legal fees and any travel expenses); and
 

	
                        5.3.2
 	
                        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
 

 

 

 

 

38

 

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).

	
                        5.4
 	
                        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.

	
                        5.5
 	
                        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 any 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 Payment Agent may from time to time specify for this purpose. Save as otherwise provided in this Agreement or any other relevant Security Documents, such payments shall be for the account of all Lenders and the Payment Agent shall distribute such payments in like funds as are received by the Payment Agent to the Lenders rateably, in

 

 

 

39

 

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 Payment Agent at such bank as the Payment Agent may have notified to the Lenders and shall be paid by the Payment Agent on such date in like funds as are received by the Payment 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

 

 

40

 

purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. Any amount due from the 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 Payment 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 Payment 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 Payment 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 Payment 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

 

 

41

 

had no such deduction or withholding been required to be made and each Lender must indemnify the Payment 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.

	
                        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 Payment 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
 	
                        Payment Agent may assume receipt
 

Where any sum is to be paid under the Security Documents to the Payment Agent or, as the case may be, the Security Trustee for the account of another person, the Payment Agent or, as the case may be, the Security Trustee may assume that the payment will be made when due and the Payment 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 Payment 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 Payment Agent or, as the case may be, the Security Trustee together with interest thereon sufficient to compensate the Payment 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 Payment Agent or, as the case may be, the Security Trustee for any and all loss or expense which the Payment 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 Payment Agent from the Borrower falls short of the total amount of the payment due to be made by the Borrower on such date then,

 

 

42

 

without prejudice to any rights or remedies available to the Agent, the Payment Agent, the Security Trustee and the Lenders under any of the Security Documents, the Payment 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:

	
                        6.10.1
 	
                        first, in or towards payment, on a pro-rata basis, of any unpaid costs and expenses of the Payment 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 Arrangers, the Payment Agent, 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 Banks of any other sum which shall have become due under the Master Agreements but remains unpaid to be applied pro rata between the Swap Banks depending on their respective Settlement Amounts and Unpaid Amounts (as defined in the respective Master Agreements) under the Master Agreements which relate to this Agreement.
 

The order of application set out in clauses 6.10.1 to 6.10.6 may be varied by the Payment 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
 

 

 

 

 

43

 

The Borrower represents and warrants to each Bank that:

	
                        7.1.1
 	
                        Due incorporation
 

each of the Security Parties are 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;

	
                        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

 

 

 

44

 

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 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 Mortgages in the relevant register under the laws of the relevant Flag State through the relevant Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Underlying Documents or any of the Security Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any 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 Mortgages, the Earnings Account Pledge and the Retention Account Pledge), the choice of the law of the Flag State to govern the Mortgages, the choice of German law to

 

 

 

 

45

 

govern the Earnings Account Pledge and the Retention Account Pledge 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;

	
                        7.1.11
 	
                        Financial statements correct and complete
 

the latest audited and unaudited consolidated financial statements of the Borrower in respect of the relevant financial year as delivered to the Agent present or will present fairly and accurately the financial position of the Borrower and the consolidated financial position of the Group as at the date thereof and the results of the operations of the Borrower 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 Borrower 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 and the Master Agreements 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
 

all information, whatsoever provided by any Security Party to the Banks 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; 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.
 

 

 

 

46

 

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

	
                        7.1.15
 	
                        Use of proceeds
 

the Borrower shall apply the Loan only for the purposes specified in clause 2.1;

	
                        7.1.16
 	
                        The Mortgaged Vessels
 

throughout the Facility Period (or, as the case may be, from their acquisition by the relevant Owner) each Mortgaged Vessel will be :

	
                         
 	
                        (a)
 	
                        In the absolute sole, legal and beneficial ownership of the relevant Owner;
 

	
                         
 	
                        (b)
 	
                        registered through the offices of the relevant Registry as a ship under the laws and flag of the relevant 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 relevant Classification free of all requirements and recommendations of the relevant Classification Society.
 

	
                        7.1.17
 	
                        Earnings
 

except with the prior written consent of the Agent (acting on the instructions of the Majority Lenders), there will not be any agreement or arrangement whereby the Earnings (as defined in the relevant Ship Security Documents) of any Mortgaged Vessel or any Chartered Vessel receivable by a Charterer  may be shared or pooled howsoever with any other person;

	
                        7.1.18
 	
                        Freedom from Encumbrances
 

no Mortgaged Vessel nor its Earnings, Insurances or Requisition Compensation (each as defined in the relevant Ship Security Documents) nor the Earnings Account or the Retention

 

 

47

 

Account nor any Extended Employment Contract in respect of such Mortgaged Vessel or Existing Charter or Existing Charter-out or Existing Charter-in 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;

	
                        7.1.19
 	
                        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 Owners and the Charterers 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 Owners and the Charterers and, to the best of the Borrower’s knowledge and belief (having made due enquiry), their respective Environmental Affiliates have obtained all Environmental Approvals and are in compliance with all such Environmental Approvals;
 

	
                         
 	
                        (c)
 	
                        no Environmental Claim has been made or threatened or pending against any Owner or Charterer 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.
 

	
                        7.1.20
 	
                        ISM and ISPS Code
 

each of the Owners 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 each Owner or the Manager has obtained and maintains a valid DOC and SMC for each Vessel and that it and the Manager has implemented and continues to implement an ISM SMS;

	
                        7.1.21
 	
                        Copies true and complete
 

the Certified Copies or originals of the Underlying Documents delivered or to be delivered to the Agent pursuant to clause 9.1 are, or will when delivered be, true and complete copies or, as the case may be, originals of such documents; and such documents constitute valid and

 

 

 

48

 

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:

	
                        7.1.22
 	
                        the Borrower and other members of the Group are the ultimate beneficiaries of the Loan;
 

	
                        7.1.23
 	
                        no Security Party has incurred any Indebtedness save under this Agreement;  
 

	
                        7.1.24
 	
                        all Guarantors and the Borrower have filed all tax and other fiscal returns required to be filed by any tax authority to which they are subject;
 

	
                        7.1.25
 	
                        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 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 any of the Mortgaged Vessels (including, but not limited to any Total  Loss of a 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;

	
                        8.1.2
 	
                        Authorisation
 

 

 

 

49

 

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 and the Master Agreements 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
 	
                        Provision of financial statements. 
 

send to the Agent (or procure that is sent):

	
                         
 	
                        (a)
 	
                        as soon as possible, but in no event later than 180 days after the end of each of its Financial Years, annual audited (prepared in accordance with US GAAP by a firm of accountants acceptable to the Agent) consolidated accounts of the Borrower and all companies which are owned, directly or indirectly, or controlled by it (commencing with the Financial Year ending 31 December 2007); and
 

	
                         
 	
                        (b)
 	
                        as soon as possible, but in no event later than 60 days after the end of each 3 month period in each of its Financial Years, the Borrower’s unaudited accounts for that 3 month period certified as to their correctness by its chief financial officer;
 

 

 

 

50

 

	
       
 	
                        (c)
 	
  on the Agent’s request, reports on the employment and earnings of each Vessel in a form acceptable to the Agent.
 

	
                        8.1.7
 	
                        Reimbursement of MII & MAP Policy premiums
 

Whether or not any amount is borrowed under this Agreement, reimburse the Security Trustee on the Security Trustee’s written demand the amount of the premium payable by the Security Trustee 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 the earlier of (i) the date on which the quarterly reports are delivered under clause 8.1.6 and (ii) the date falling 75 days after the end of the financial quarter to which they refer, a Compliance Certificate together with such supporting information as the Agent may require.

	
                        8.1.9
 	
                        Provision of further information
 

provide the Agent, and procure that the Guarantors and the General Partner provide the Agent, with such financial or other information concerning the Borrower and their respective affairs, activities, financial standing, Indebtedness and operations and the performance of the Mortgaged Vessels as the Agent or any Lender (acting through the Agent) may from time to time reasonably reasonably require and all other documentation and information as any Lender may from time to time require in order to comply with its, and all other relevant, know-your-customer  regulations;

	
                        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 a party;

	
                        8.1.11
 	
                        Compliance with ISM Code
 

 

 

51

 

and will procure that any Operator will, comply with and ensure that the Vessels and any Operator complies 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 Mortgages);

	
                        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 any Vessel;

	
                        8.1.13
 	
                        Issuance of DOC and SMC
 

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

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

	
                         
 	
                        (c)
 	
                        procure that each 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 and pay all taxes for which it is liable as they fall due;

	
                        8.1.16
 	
                        Charters etc.
 

deliver to the Agent, a Certified Copy of each Extended Employment Contract upon its execution, (ii) forthwith on the request of the Agent (acting on the instructions of the Majority Lenders) execute (a) a Charter Assignment in respect thereof and (b) any notice 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

 

 

52

 

and other costs incurred by any Bank in connection with any such Charter Assignments, forthwith following the Agent’s demand.

	
                        8.1.17
 	
                        Shares Pledges
 

Forthwith upon the written request of the Agent (acting on the instructions of the Majority Lenders), deliver to the Agent or the relevant Lender such Shares Pledges as the Agent or the relevant Lender shall specify, each duly executed by the Shareholder together with documentation equivalent to that referred to in Part 1 of Schedule 4 at items (a)-(d) (inclusive) in respect of the Shareholder and together with all other documentation required to be delivered pursuant to the terms thereof and the Borrower shall pay all legal and other costs incurred by any Bank in relation thereto.

	
                        8.1.18
 	
                        Financial Covenants of the Corporate Guarantor’s Group
 

procure that

	
                         
 	
                        (a)
 	
                        at no time shall the Liquidity of the Group be less than the Minimum Liquidity except if any part thereof is applied, with the consent of the Lenders (not to be unreasonably withheld) in acquisition of a ship or ships (in respect of which the Borrower shall give, or procure that the relevant buyer gives, the Lenders the right to finance such acquisitions on terms at least as favourable as those generally available on the market at that time before entering into discussions with any other financial institution in relation thereto) provided that the Minimum Liquidity shall at no time be less than USD5,000,000;
 

	
                         
 	
                        (b)
 	
                        the ratio of EBITDA to Interest Expense shall at all times be at least 2 to 1; 
 

	
                         
 	
                        (c)
 	
                        the Total Liabilities divided by the Total Assets (adjusted for market values of vessels calculated in accordance with Clause 8.2.2) shall be less than 75%; and
 

	
                         
 	
                        (d)
 	
                        the Net Worth shall at all times be equal to or more than USD120,000,000.
 

	
                        8.1.19
 	
                        Inspection
 

the Agent, at the cost of the Borrower and upon receipt of at least 15 days written notice, by surveyors or other persons appointed by it for such purpose, to board any Mortgaged Vessel at all other reasonable times for the purpose of inspecting her and to afford all proper facilities

 

 

53

 

for such inspections and for this purpose to give the Agent reasonable advance notice of any intended drydocking of each Vessel (whether for the purpose of classification, survey or otherwise) and to pay the costs in respect of one inspection in each calendar year; and

	
                        8.1.20
 	
                        Capital Reserve
 

Maintain at all times a minimum Estimated Maintenance and replacement Capital Expenditure Reserve (as defined in the registration Statement form F1 (as amended) filed in respect of the Borrower under the US Securities act 1933) as the directors of the Borrower may from time to time approve or require.

	
                        8.1.21
 	
                        Subordination
 

Ensure that all Indebtedness of the Borrower to its shareholders or any of them is fully subordinated, and to subordinate any Indebtedness issued to it by any 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 first Drawdown 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.
 

 

 

54

 

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

	
                        8.2.2
 	
                        Valuation of Mortgaged Vessels
 

Each Mortgaged Vessel shall, for the purposes of this Agreement, be valued (at the Borrower’s expense) in USD by taking the average of valuations prepared by any two Approved Brokers appointed by the Agent, such valuations 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 or burden of any charterparty or other engagement concerning the relevant Mortgaged Vessel provided that 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 three months after the first Drawdown Date and quarterly 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 Broker’s valuations for each Mortgaged Vessel on each such occasion shall constitute the Valuation Amount of such Mortgaged Vessel for the purposes of this Agreement until superceded 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 relevant Mortgaged 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

 

 

55

 

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 Vessels) 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 the kind referred to in schedule 4 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
 	
                        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 Banks):

	
                        8.3.1
 	
                        Negative pledge
 

permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be created or extended over all or any part of its present or future undertakings, assets, rights or revenues which secure the Loan to secure or prefer any present or future Indebtedness or other liability or obligation of any person;

	
                        8.3.2
 	
                        No merger or transfer
 

merge or consolidate with any other person or permit any change to the legal or beneficial ownership of (a)  any Security Party’s shares from that existing at the Execution Date and (b) any of the shares of the Borrower which would give rise to an Event of Default under Clause 10.1.29;

	
                        8.3.3
 	
                        Disposals
 

 

 

56

 

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 their present or future undertaking, assets, rights or revenues (otherwise than by transfers, sales or disposals for full consideration in the ordinary course of trading) whether by one or a series of transactions related or not which could have a material (in the reasonable opinion of the Lenders) adverse affect on the ability of the Borrower to perform its obligations under this Agreement;

	
                        8.3.4
 	
                        Other business or manager
 

undertake any business other than the ownership, chartering-in, chartering-out and operation of ships or permit the owners of the Mortgaged Vessels to employ anyone other than the Manager as commercial and technical manager of any Vessel;

	
                        8.3.5
 	
                        Acquisitions
 

permit any Guarantor (other than the Shareholder) to acquire any further assets;

	
                        8.3.6
 	
                        Other obligations
 

incur any obligations with Navios GP, any Guarantor, any Charterer or other company in the Group or associated company of any of them except for obligations arising under the Security Documents, under the Omnibus Agreement or contracts reasonably entered into in the ordinary course of business with such person;

	
                        8.3.7
 	
                        No borrowing 
 

incur any Indebtedness except for Indebtedness pursuant to the Security Documents or otherwise with the consent of the Lenders (which consent shall not be unreasonably withheld);

	
                        8.3.8
 	
                        Repayment of borrowings
 

repay or prepay the principal of, or pay interest on or any other sum in connection with any Indebtedness except for Indebtedness permitted pursuant to Clause 8.3.7 or pursuant to the Security Documents;

	
                        8.3.9
 	
                        Guarantees
 

 

 

 

57

 

issue any guarantees or otherwise become directly or contingently liable for the obligations of any person, firm, or corporation except (i) pursuant to the Security Documents, (ii) in relation to the normal business of the Borrower for a contingent aggregate liability of up to USD500,000 per calendar year or (iii) otherwise with the consent of the Lenders (which consent shall not be unreasonably withheld);

	
                        8.3.10
 	
                        Loans
 

make any loans or grant any credit to any person or agree to do so;

	
                        8.3.11
 	
                        Share capital and distribution
 

purchase or otherwise acquire for value any shares of their capital or declare or pay any dividends or distribute any of their present or future assets, undertakings, rights or revenues to any of their shareholders except the Borrowers may re-purchase its shares or pay dividends only (i) if there has not accrued any Event of Default and (ii) no Event of Default would occur as a result of such payment;

	
                        8.3.12
 	
                        Subsidiaries
 

Permit any Guarantor (other than Shareholder) to form or acquire any Subsidiaries;

	
                        8.3.13
 	
                        Approved Employment Contracts
 

	
                         
 	
                        (a)
 	
                        agree to shorten the tenor of any Approved Employment Contract; or
 

	
                         
 	
                        (b)
 	
                        agree to reduce the charter hire payable under any Approved Employment Contract;
 

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

	
       
 	
                        (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 three (3) months’ duration; or
 

 

 

 

58

 

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

	
       
 	
                        (iv)
 	
                        below the market rate prevailing at the time when the relevant Ship is fixed.
 

 

	
                        9
 	
                        CONDITIONS
 

	
                        9.1
 	
                        Advance of any Advance 
 

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

	
                        9.1.1
 	
                        the Agent, or its authorised representative, having received, not later than two (2) Banking Days before the day on which the relevant Drawdown Notice is given, the documents and evidence specified in Part 1 of schedule 4 in form and substance satisfactory to the Agent (acting on the instructions of the Majority Lenders); and 
 

	
                        9.1.2
 	
                        the representations and warranties contained in clause 7 being then true and correct as if each was made with respect to the facts and circumstances existing at such time and the same being unaffected by drawdown of such Advance; and
 

	
                        9.1.3
 	
                        no Default having occurred and being continuing and there being no Default which would result from the lending of such Advance.
 

	
                        9.2
 	
                        Advance of Advance A
 

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

	
                        9.2.1
 	
                        the Agent, or its authorised representative, having received, on or prior to the relevant Drawdown Date, the documents and evidence specified in Part 2 of schedule 4 in form and substance satisfactory to the Agent (acting on the instructions of the Majority Lenders);
 

	
                        9.2.2
 	
                        the representations and warranties contained in clause 7 being then true and correct as if each was made with respect to the facts and circumstances existing at such time and the same being unaffected by drawdown of such Advance; and
 

	
                        9.2.3
 	
                        no Default having occurred and being continuing and there being no Default which would result from the lending of such Advance.
 

 

 

59

 

	
                        9.3
 	
                        Advance of Advance B
 

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

	
                        9.3.1
 	
                        the Agent, or its authorised representative, having received, on or prior to the relevant Drawdown Date, the documents and evidence specified in Part 3 of schedule 4 in form and substance satisfactory to the Agent (acting on the instructions of the Majority Lenders);
 

	
                        9.3.2
 	
                        the representations and warranties contained in clause 7 being then true and correct as if each was made with respect to the facts and circumstances existing at such time and the same being unaffected by drawdown of such Advance; and
 

	
                        9.3.3
 	
                        no Default having occurred and being continuing and there being no Default which would result from the lending of such Advance.
 

	
                        9.4
 	
                        Advance of Advance C
 

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

	
                        9.4.1
 	
                        the Agent, or its authorised representative, having received, on or prior to the relevant Drawdown Date, the documents and evidence specified in Part 4 of schedule 4 in form and substance satisfactory to the Agent (acting on the instructions of the Majority Lenders);
 

	
                        9.4.2
 	
                        the representations and warranties contained in clause 7 being then true and correct as if each was made with respect to the facts and circumstances existing at such time and the same being unaffected by drawdown of such Advance; and
 

	
                        9.4.3
 	
                        no Default having occurred and being continuing and there being no Default which would result from the lending of such Advance.
 

	
                        9.5
 	
                        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.

	
                        9.6
 	
                        Further conditions precedent
 

 

 

 

 

60

 

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: any Owner 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 any of the Mortgaged Vessels 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 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 Lenders) is capable
 

 

 

 

61

 

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) if any Indebtedness of any Security Party is not paid when due (subject to applicable grace periods) or any Indebtedness of 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 relevant Security Party of a voluntary right of prepayment), or any creditor of any Security Party becomes entitled to declare any such Indebtedness due and payable or any facility or commitment available to 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 Navios GP 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 Borrower) without the Agent’s prior written consent, for the purpose of passing 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 Navios GP or an order is made or resolution passed for the
 

 

 

 

62

 

dissolution or winding up of any Security Party 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 Navios GP 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
 

	
                        10.1.11
 	
                        Appointment of receivers and managers: any administrative or other receiver is appointed anywhere of any Security Party or Navios GP 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
 

	
                        10.1.12
 	
                        Compositions: any corporate action, legal proceedings or other procedures or steps are taken, or negotiations commenced, by any Security Party or Navios GP 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 Navios GP, 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 Navios GP 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
 

	
                        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
 

 

 

63

 

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: any 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 its Owner and that Owner shall fail to procure the release of such Vessel within a period of fifteen (15) days thereafter; or
 

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

	
                        10.1.22
 	
                        Unrest: the Flag State of any Vessel 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 Owner of the Vessel registered in such Flag State shall have transferred its Vessel onto a new flag acceptable to the Lenders 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
 

 

 

 

64

 

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: an Owner or the Manager or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which a Mortgaged 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 such Mortgaged 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 Lenders), 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
 	
                        Account: moneys are withdrawn from the Earnings Account other than in accordance with clause 14; or
 

	
                        10.1.27
 	
                        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;
 

	
                        10.1.28
 	
                        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
 

	
                        10.1.29
 	
                        Change of Ownership. There shall occur a change in the ownership of any Guarantor, the Shareholder or Navios GP from the first Drawdown Date or Permitted Owners cease to own, in aggregate, at least 30% of the Borrower, without the prior consent of the Agent.;
 
	
                        10.1.30
 	
                        Master Agreements:  (i) an Event of Default or Potential Event of Default (in each case as defined in either Master Agreement) has occurred and is continuing under a Master Agreement or (ii) an Early Termination Date (as defined in either Master Agreement) has
 

 

 

 

65

 

occurred or been effectively designated under the relevant Master Agreement or (iii) a person entitled to do so gives notice of an Early Termination Date (as defined in either Master Agreement) or (iv) either Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason 

PROVIDED THAT that there shall not be an Event of Default solely by reason of any of the events or circumstances described in clauses 10.1.5 to 10.1.15 inclusive taking place with respect to any Group Member which is not a Security Party unless in the opinion of the Majority Lenders, the ability of any Security Party to perform all or any of the obligations expressed to be assumed by it under, or otherwise to comply with the terms of, the Security Documents which it is a party would be materially and adversely affected.

	
                        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
 

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
 

 

 

66

 

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 Applicable 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 any Advance not being made for any reason (excluding any default by the Payment 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
 

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.

 

 

67

 

 

	
                        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 any 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
 

	
                        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
 

 

 

 

68

 

	
                        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 Payment 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
 

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 Payment Agent and/or the Security Trustee under or pursuant to any of the Security Documents and expressed to be applicable in accordance with the

 

 

69

 

provisions of this clause 13.1 or in a manner determined in the Security Trustee’s or (as the case may be) the Payment 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 Arrangers, the Payment Agent, 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 or the Revolving Facility 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 Banks of any other sum which shall have become due under the Master Agreements but remains unpaid to be applied pro rata between the Swap Banks depending on their respective Settlement Amounts and Unpaid Amounts (as defined in the respective Master Agreements) under the Master Agreements which relate to this Agreement; 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.
 

	
                        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
 

 

 

 

 

70

 

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 Payment 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 Payment 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 Payment 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 Payment Agent, the Recovering Lender shall pay to the Payment Agent an amount equal (or equivalent) to the excess;
 

	
                         
 	
                        (b)
 	
                        the Payment 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
 

	
                         
 	
      (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.
 

 

 

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                        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 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 

 

 

72

 

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 the 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 the Bank or (vi) any other circumstances whatsoever outside the Bank’s control. 

	
                        13.11
 	
                        Amendments
 

 

 

73

 

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
 	
                        ACCOUNTS AND RETENTIONS
 

	
                        14.1
 	
                        General
 

The Borrower undertakes with each Bank that it will ensure that:

	
                        14.1.1
 	
                        the Shareholder will on or before the first Drawdown Date, open the Earnings Account in its name; and
 

	
      14.1.2
 	
                        all moneys payable to any Owner in respect of the Earnings (as defined in the relevant Mortgage) of its Mortgaged Vessel or to any Charterer in respect of any Chartered 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 relevant 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 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).
 

 

 

74

 

	
                        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, in the operation of the Mortgaged Vessels 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
 	
                        Retention Account: credits and withdrawals
 

	
                        14.3.1
 	
                        The Borrower undertakes with each Bank that, throughout the Facility Period, it will procure that, on each Retention Date there is paid (whether from the Earnings Account or elsewhere) to the Retention Account, the Retention Amount for such date.
 

	
                        14.3.2
 	
                        Unless and until there shall occur an Event of Default (whereupon the provisions of clause 14.5 shall apply), all Retention Amounts credited to the Retention Account together with interest from time to time accruing or at any time accrued thereon must be applied by the Account Bank (and the Borrower hereby irrevocably authorises the Account Bank so to apply the same) upon each Repayment Date and/or on each day that interest is payable on the Loan pursuant to clause 3.1, in or towards payment to the Payment Agent of the instalment then falling due for repayment or, as the case may be, the amount of interest then due. Each such application by the Account Bank shall constitute a payment in or towards satisfaction of the Borrower’s corresponding payment obligations under this Agreement but shall be strictly without prejudice to the obligations of the
Borrower to make any such payment to the extent that the aforesaid application by the Account Bank is insufficient to meet the same.
 

Unless the Agent (acting on the instructions of the Majority Banks) otherwise agrees in writing and subject to this clause 14.3.2, Borrower shall not be entitled to withdraw any moneys from the Retention Account at any time during the Facility Period.

	
                        14.4
 	
                        Application of accounts
 

At any time after the occurrence of an Event of Default, the Payment 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  and/or the Retention Account (together with interest from time to time accruing or accrued thereon)

 

 

75

 

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.

	
                        14.5
 	
                        Charging of accounts
 

The Earnings Account and the Retention Account and all amounts from time to time respectively standing to the credit thereof shall be subject to the security constituted and the rights conferred by, respectively,  the Earnings Account Pledge and the Retention 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 their respective successors in title.

	
                        15.2
 	
                        No assignment by Borrower
 

No Borrower may assign or transfer any of its rights or obligations under this Agreement.

	
                        15.3
 	
                        Transfers by Banks
 

Provided that there may be no more than 5 Lenders at any one time, 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”) 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. 

 

 

76

 

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 Payment 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 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 each of the Loan Facility and the Revolving 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 Arrangers, the Payment Agent and 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,
 

 

 

77

 

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 Payment Agent, the Arrangers 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.
 

	
                        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 Payment 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 Payment Agent shall make the said register available for inspection by any Lender or the Borrower during normal banking hours upon receipt by the Payment Agent of reasonable prior notice requesting the Payment 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
 

 

78

 

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 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

 

79

 

notify the Borrower, the Security Trustee, the Payment 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
 

Each Swap Bank and each Lender irrevocably appoints the Agent and the Payment Agent as its agent and payment 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 each Swap Bank hereby authorise the Agent and the Payment Agent:

	
                        16.1.1
 	
                        to execute such documents as may be approved by the Majority Lenders for execution by the Agent and/or (as the case may be) the Payment 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 and/or the Payment Agent by any Security Document, together with such powers and discretions as are reasonably incidental thereto.
 

	
                        16.2
 	
                        Payment Agent’s/Agent’s actions
 

Any action taken by the Agent or the Payment 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 and Payment Agent’s duties
 

 

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                        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 and the Payment 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
 	
                        Agent’s and Payment Agent’s rights
 

The Agent and the Payment 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 Payment Agent 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
 

 

81

 

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 Arrangers or Agent or Payment Agent
 

None of the Arrangers, the Agent, the Payment 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
 

	
                        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
 

 

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                        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, none of the Arrangers nor the Agent or the Payment 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 either Arranger or the person for the time being acting as the Agent or the Payment Agent may become aware in the context of corporate finance, advisory or lending activities from time to time undertaken by either Arranger or, as the case may be, the Agent or Payment 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 Arrangers, Agent or Payment Agent
 

Each Lender and each Swap Bank acknowledges that it has not relied on any statement, opinion, forecast or other representation made by either Arranger, the Agent or the Payment 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 either Arranger, the Agent or the Payment 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 Contribution under this Agreement. None of the Arrangers, the Payment Agent and the Agent shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or a Swap Bank with
any credit or other information with respect to any Security Party whether coming into its possession before the making of any 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 Arrangers, Agent or Payment Agent for Borrower’s performance
 

None of the Arrangers, the Agent or the Payment Agent shall have any responsibility or liability to any Lender or a Swap Bank:

 

83

 

	
                        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 Mortgaged Vessels 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
 

Each of the Arrangers, the Payment Agent 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 relevant Arranger’s or, as the case may be, the Agent’s or Payment Agent’s employment).

	
                        16.9
 	
                        Other dealings
 

 

84

 

Each of the Arrangers, the Payment Agent 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 an Arranger or, as the case may be, the Agent or Payment Agent. 

	
                        16.10
 	
                        Rights of Agent, Payment Agent as Lender; no partnership
 

With respect to its own Commitment and Contribution (if any) the Agent and the Payment 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 Agent and the Payment 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 Agent and/or the Payment 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).
 

Any such action so authorised and effected by the Agent shall be documented in such manner as the Agent and/or the Payment Agent (as the case may be) shall (with the approval of the Majority Lenders) determine, shall be promptly notified to the Lenders by the Agent and/or the Payment Agent (as the case may be) and (without prejudice to the generality of clause 16.2) shall be binding on the Lenders.

 

85

 

	
                        16.11.4
 	
                        Except with the prior written consent of the Lenders, the Agent and the Payment 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 Applicable 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;
 

	
                         
 	
                        (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
 

 

86

 

Each Lender shall reimburse the Agent and the Payment 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 Agent or the Payment Agent is not reimbursed by the Borrower, for the costs, charges and expenses incurred by the Agent or the Payment 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 Agent or the Payment Agent by a Lender under this clause the Agent or the Payment Agent receives payment from the Borrower in respect of the same costs, fees or expenses, the Agent or the Payment Agent shall upon receipt thereof reimburse the relevant Lender. Each Lender must on demand indemnify the Agent or
the Payment 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 Agent in connection with any of the Security Documents or the performance of its duties under any of the Security Documents or any action taken or omitted by the Agent or, as the case may be, the Payment Agent, under any of the Security Documents, unless such liabilities, damages, costs or claims arise from the Agent’s or as the case may be, the Payment Agent’s own gross negligence or wilful misconduct.

	
                        16.13
 	
                        Retirement of Agent/Payment Agent
 

	
                        16.13.1
 	
                        The Agent and the Payment 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 Agent or the Payment 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 Agent or, as the case may be, the Payment Agent nominated by the Agent or, as the case may be, the Payment Agent,
 

	
                         
 	
                        (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 Payment Agent.
 

Any corporation into which the retiring Agent and/or the Payment Agent (as the case may be) may be merged or converted or any corporation with which the Agent and/or the Payment Agent (as the case may be) may be consolidated or any corporation resulting from any

 

87

 

merger, conversion, amalgamation, consolidation or other reorganisation to which the Agent or the Payment Agent (as the case may be) shall be a party shall, to the extent permitted by applicable law, be the successor Agent under this Agreement and the other Security Documents without the execution or filing of any document or any further act on the part of any of the parties to 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 Agent or Payment Agent is unable to fulfil its respective obligations under this Agreement in a professional and acceptable manner, then they may require the Agent or Payment 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 Agent or Payment 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 Payment Agent shall be discharged from any further obligation under the Security Documents (but shall continue to have the benefit of this clause 16 in respect of any action it has taken or refrained from taking prior to such discharge) and its successor and each of the other parties to this Agreement shall have the same rights and obligations among themselves as they would have had if such successor had been a party to this Agreement in place of the retiring Agent or Payment Agent. The retiring Agent or Payment 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.
 

	
                        16.14
 	
                        Appointment and retirement of Security Trustee
 

	
                        16.14.1
 	
                        Appointment
 

Each of the Lenders, the Swap Banks 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 Banks and the Agent hereby authorises the Security Trustee (whether or not by or through employees or

 

88

 

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 Banks 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 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 Banks and the 

 

89

 

 

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 Banks, 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,
 

and, in each and every case, to hold any and all security thereby created upon trust for the Lenders, the Swap Banks 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
 

 

 

90

 

	
                         
 	
      (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.
 

Any such action so authorised and effected by the Security Trustee shall be promptly notified to the Lenders, the Swap Banks 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.
 

	
                        16.15.5
 	
                        None of the Lenders, the Swap Banks 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 
 

 

 

91

 

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 Banks 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 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 
 

 

 

92

 

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 Banks and the Agent under and pursuant to this Agreement, to hold the guarantees and/or security created by the Security Documents specified in clause 16.14 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 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
 

 

 

93

 

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 Banks 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 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.

 

 

94

 

	
                        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 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 Payment Agent and/or the Agent and/or an Arranger and/or Account Bank and/or Security Trustee and/or the Swap Banks shall be deemed to be given, and shall take effect, when received in full legible form by the Payment 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 Payment Agent and/or the Agent (as appropriate) may hereafter specify for such purpose to the Borrower and the other Lenders by notice in writing); 
 

 

 

95

 

 

	
                        Agent:
 	
                         
 
	
                        Address:
 	
                        DVB Bank AG
 
	
                         
 	
                        2-14 Friedrich-Ebert-Anlage
 
	
                         
 	
                        60325 Frankfurt-Am-Main
 
	
                         
 	
                        Germany
 
	
                         
 	
                         
 
	
                        Attn:
 	
                        Loan Administration Dept.
 
	
                        Fax no: 
 	
                        +4969 97504 526
 
	
                         
 	
                         
 
	
                        with a copy to:
 	
                        DVB Bank AG
 
	
                         
 	
                        95 Akti Miaouli
 
	
                         
 	
                        Piraeus 185 38
 
	
                         
 	
                        Greece
 
	
                         
 	
                         
 
	
                        Attn:
 	
                        Loans Administration
 
	
                        Fax no:
 	
                        +30210 429 1284
 
	
                         
 	
                         
 
	
                        Payment Agent:
 	
                         
 
	
                        Address:
 	
                        Ness 7-9
 
	
                         
 	
                        20457 Hamburg
 
	
                         
 	
                        Germany
 
	
                         
 	
                         
 
	
                        Fax:
 	
                        +4940 3683 4068
 
	
                        Attn:
 	
                        Global Shipping
 

	
                        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:
 

 

 

96

 

	
                         
 	
      (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
 

	
                         
 	
      (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 is 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 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.
 

 

 

97

 

	
                        19.2
 	
                        Submission and service of process
 

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 Marlow House, Lloyds Avenue, London EC3N 3AL, 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
 

 

 

98

 

	
                        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.
 

	
                        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 any one or more 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 any one or more of the Borrower against the Lender, have been required to be brought in the English courts;
 

	
                        19.6.2
 	
                        no Borrower shall  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 (including but not limited to any shareholder of the Borrower) brings 
 

 

 

99

 

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;

the Banks and the Borrower hereby agree and declare 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. 

 

 

100

 

Schedule 1 

The Lenders and their Commitments

 

	
                        Name
 	
                         
 	
                        Address and fax number
 	
                         
 	
                        Original
 Commitment
 (USD)
 	
                         
 	
                        Percentage 
 of Total
 Commitment
 	
                         
 
	
      DVB Bank AG
 	
       
 	
                        Lending Office

            2-14 Friedrich-Ebert-Anlage,
 60325 Frankfurt am Main, 
 Germany

            Address for Notices

      As above
 Fax:
 Attn: [    ]
 	
       
 	
      USD 130,000,000
 	
       
 	
      50%
 	
       
 
	
                        Commerzbank AG
 	
                         
 	
                        Lending Office 

            Ness 7-9
 20457 Hamburg
 Germany

            Address for Notices
 As above

            Fax: +4940 3683 4068
 Attn: Global Shipping
 	
                         
 	
                        USD 130,000,000
 	
                         
 	
                        50%
 	
                         
 
	
                         
 	
                         
 	
                        Total Commitment
 	
                         
 	
                        USD 260,000,000
 	
                         
 	
                        100%
 	
   
 

 

 

101

 

Schedule 2

Part A

Owned Vessels

 

	
                        Vessels
 	
                         
 	
                        Description
 	
                         
 	
                        Owner
 	
                         
 
	
      NAVIOS ALEGRIA
 	
       
 	
      a Panamanian flag Panamax bulk carrier of approx 76,466 dwt, built 2004
 	
       
 	
      Alegria Shipping Corporation
 	
       
 
	
                        NAVIOS FELICITY
 	
                         
 	
                        a Panamanian flag Panamax bulk carrier of approx 73,867 dwt, built 1997
 	
                         
 	
                        Felicity Shipping Corporation
 	
                         
 
	
                        NAVIOS GALAXY I
 	
                         
 	
                        a Panamanian flag Panamax bulk carrier of approx 74,195 dwt, built 2001
 	
                         
 	
                        Galaxy Shipping Corporation
 	
                         
 
	
                        NAVIOS GEMINI S
 	
                         
 	
                        a Panamanian flag Panamax Fleet bulk of approx 68,636 dwt, built 1994
 	
                         
 	
                        Gemini Shipping Corporation
 	
                         
 
	
                        NAVIOS LIBRA II
 	
                         
 	
                        a Panamanian flag Panamax bulk carrier of approx 70,136 dwt, built 1995
 	
                         
 	
                        Libra Shipping Enterprises Corporation
 	
   
 

Part B

Chartered Vessels

 

	
                        Vessels
 	
                         
 	
                        Description
 	
                         
 	
                        Charterer
 	
                         
 
	
      NAVIOS ALDEBARAN
 	
       
 	
      a Panamax bulk carrier of approx 76,500? dwt, under construction at [     ]
 	
       
 	
      Aldebaran Shipping Corporation
 	
       
 
	
                        NAVIOS PROSPERITY
 	
                         
 	
                        a [Panamanian] flag Panamax bulk carrier of approx 82,535 dwt, built 2007
 	
                         
 	
                        Prosperity Shipping Corporation
 	
                         
 
	
                        FANTASTIKS
 	
                         
 	
                        a [Panamanian] flag capsize bulk carrier of approx 180,265 dwt, built 2005
 	
                         
 	
                        Fantastiks Shipping Corporation/[Kleimar]
 	
   
 

 

 

102

 

Schedule 3

Form of Drawdown Notice

	
                        To:
 	
                        Commerzbank AG (as Payment Agent)
 

[●] 2007

Dear Sirs

	
                        Re:
 	
                        Facility agreement dated [     ] November 2007 in respect of a loan of USD260,000,000 (the “Loan Agreement”) made between (1) Navios Maritime Partners L.P. as Borrower, (2) DVB Bank AG and Commerzbank AG as Lenders, (3) DVB Bank AG as Agent,  Joint-Arranger, Swap Bank and Security Trustee and (4) Commerzbank AG as Joint-Arranger, Payment Agent, Account Bank and Swap Bank.
 

We refer to the Loan Agreement. Words and expressions whose meanings are defined therein shall have the same meanings when used herein.

We hereby give you notice that we wish to draw the sum of USD [               ] on [date] 2007 for payment to [     ] and select a first Interest Period in respect of such drawing of [●] months. The funds should be credited to [     ] with [     ] .

We confirm that:

	
                        (a)
 	
                        no Default has occurred;
 

	
                        (b)
 	
                        the representations and warranties contained in clause 7 of the Loan Agreement are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date; 
 

	
                        (c)
 	
                        the borrowing to be effected by the drawdown of such Advance will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute, regulation, agreement or otherwise howsoever) to be exceeded; 
 

	
                        (d)
 	
                        there has been no material adverse change in our financial position or in the combined financial position of the Group from that described by us to the Banks or any of them in the negotiation of the Loan Agreement and/or in any documents or statements already delivered to the Agent in connection therewith; and
 

	
                        (e)
 	
                        there are no Required Authorisations.
 

 

	 	 
	
                        By  
 	
                          
 
	
                         
 	
                        Authorised Signatory
 NAVIOS MARITIME PARTNERS L.P.
 

 

 

 

103

 

Schedule 4

Conditions precedent

Part 1

(referred to in clause 9.1)

	
                        (a)
 	
                        Corporate documents
 

Certified Copies of all documents which evidence or relate to the constitution of each Security Party and Navios GP and its current corporate existence together with evidence in form and substance acceptable to the Lenders in respect of the Capital Structure of the Group;

	
                        (b)
 	
                        Corporate authorities
 

	
                         
 	
                        (i)
 	
                        Certified Copies of resolutions of the directors and (if required by the Agent) of the Shareholders of each Security Party approving such of the Security Documents to which such Security Party is a party and authorising the execution and delivery thereof and performance of such Security Party’s obligations thereunder, additionally certified by an officer of such Security Party as having been duly passed at a duly convened meeting of the directors of such Security Party and not having been amended, modified or revoked and being in full force and effect; and
 

	
                         
 	
                        (ii)
 	
                        originals or Certified Copies of any powers of attorney issued by any Security Party pursuant to such resolutions;
 

	
                        (c)
 	
                        Required Authorisations
 

a certificate (dated no earlier than 5 Banking Days prior to the first Drawdown Date) that there are no Required Authorisations or that there are no Required Authorisations except those described in such certificate and Certified Copies of which as duly executed (including any conditions and/or documents ancillary thereto) are appended thereto.

	
                        (d)
 	
                        Certificate of incumbency
 

a list of directors and officers of each Security Party specifying the names and positions of such persons, certified by an officer of such Security Party to be true, complete and up to date;

	
                        (d)
 	
                        Copies of Underlying Documents
 

 

 

104

 

a Certified Copy of each Management Agreement, the Fantastiks Earnings Agreement, the  MOAs, the Existing Charters, the Existing Charters-in, the Existing Charterers-out, the Omnibus Agreement, the Fantastiks Charters and all ISM Code Documentation for each Owned Vessel all on terms acceptable to the Agent;

	
                        (e)
 	
                        Master Agreement
 

the Master Agreement, duly executed and delivered;

	
                        (f)
 	
                        Valuations
 

made at the cost of the Borrower by an Approved Broker not more than 15 days or less than 5 Banking Days prior to the first Drawdown Date, giving the charter-free values of all of the Owned Vessels in scope, form and substance acceptable to the Lenders;

	
                        (g)
 	
                        Fees 
 

evidence that such fees as are due and payable on the Execution Date and on the first Drawdown Date have been or as the case may be, will have been paid in full;   and

	
                        (h)
 	
                        Borrower’s process agent
 

a letter from the Borrower’s agent for receipt of service of  proceedings referred to in clause 19.2.1 accepting its appointment under the said clause and under each of the other Security Documents in which it is or is to be appointed as the agent for any Security Party.

	
                        (i)
 	
                        ownership
 

Evidence that:

	
                         
 	
                        (i)
 	
                        Navios GP is the general partner of the Borrower;
 

	
                         
 	
                        (ii)
 	
                        Navios GP is the wholly owned subsidiary of Navios Holdings;
 

	
                         
 	
                        (iii)
 	
                        as at the first Drawdown Date Permitted Owners own, in aggregate, at least 40% of the Borrower, and immediately thereafter Permitted Owners will own in aggregate, at least 30% of the Borrower (and the Banks acknowledge and agree that such percentage may reduce from 40% or above to 30% or above immediately upon drawdown of Advance A);
 

 

 

105

 

	
                         
 	
                        (iv)
 	
                        The Shareholder is a wholly owned subsidiary of the Borrower; and
 

	
                         
 	
                        (v)
 	
                        Each Guarantor and each Charterer is a wholly owned subsidiary of the Shareholder.
 

	
                        (j)
 	
                        IPO
 

Evidence that the Borrower has successfully raised at least USD 130,000,000 through an initial public offering on the New York Stock Exchange;

	
                        (k)
 	
                        Know-your-customer
 

all such evidence and documentation on any Lender may reasonably require in relation to its “Know-your-customer” requirements in respect of any Security Party. 

Part 2

(referred to in Clause 9.2)

	
                        (a)
 	
                        Evidence satisfactory to the Lenders that each Owned Vessel:
 

	
                         
 	
                        (i)
 	
                        Registration and Encumbrances
 

is registered in the name of the relevant Owner through the Registry under the laws and flag of the Flag State and that the relevant Vessel and her Earnings, Insurances and Requisition Compensation (as defined in the relevant Mortgage) and any Existing Charter are free of Encumbrances except Permitted Encumbrances (such evidence to include relevant certificates issued by the Flag State and results of searches carried out against the said Registry by the Agent or its lawyers);

	
                         
 	
                        (ii)
 	
                        Classification
 

(to be provided at least 15 days prior to the relevant Drawdown Date) maintains the Classification free of all requirements and recommendations of the Classification Society; and

	
                         
 	
                        (iii)
 	
                        Insurance
 

(to be provided at least 15 days prior to the relevant Drawdown Date) is insured in accordance with the provisions of the relevant Ship Security Documents and all requirements of such Ship Security Documents in respect of such insurance have 

 

 

2

 

been complied with (including without limitation, receipt by the Agent of customary brokers’ letters of undertaking regarding the placing of hull and machinery and war risks cover and confirmation from the protection and indemnity association or other insurer with which the relevant Vessel is entered for insurance or insured against protection and indemnity risks, that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and that any such exclusion does not apply to the relevant Vessel); 

	
                        (b)
 	
                        Security Documents
 

(other than the documents required to be delivered pursuant to part 4 item (b) and part 5 item (b)) the Guarantees, the Mortgages, the Master Agreement Security Deeds, the Earnings Account Pledge, the Retention Account Pledge, the General Assignments, Manager’s Undertakings, the Fantastiks Assignment and the Charter Assignments (other than in respect of “FANTASTIKS”) duly executed and delivered;

	
                        (c)
 	
                        Notices of assignment and acknowledgements
 

counterpart originals of duly executed notices of assignment required by the terms of the Security Documents and in the forms prescribed by the Security Documents and any other documents required to be delivered pursuant thereto;

	
                        (d)
 	
                        Mortgage registration
 

evidence that each Mortgage in respect of each Owned Vessel has been duly registered against the relevant Vessel in accordance with the  laws of the relevant Flag State;

	
                        (e)
 	
                        Bank accounts
 

evidence that Earnings Account and the Retention Account have been opened and duly completed mandates in relation thereto have been delivered to the Account Bank;

	
                        (f)
 	
                        Laws of the Marshall Islands: opinion
 

an opinion of Messrs Cozen O’Connor special legal advisers to the Banks on Marshall Islands law;

	
                        (g)
 	
                        Laws of Panama
 

 

 

2

 

an opinion of Messrs Patton, Moreno & Asvat, special legal advisers in Panama to the Banks;

	
                        (h)
 	
                        Further opinions
 

any such further opinions as may be required by the Agent;

	
                        (i)
 	
                        ISPS Code
 

evidence satisfactory to the Agent that each Owned Vessel is subject to a ship security plan which complies with the ISPS Code and (ii) a copy of the ISSC for such Vessel;

	
                        (j)
 	
                        Manager’s confirmation
 

written confirmation addressed by the Manager to the Agent that the representations and warranties set out in clause 7.1.20 (Environmental Matters) and clause 7.1.21 (ISM Code) are true and correct;

	
                        (k)
 	
                        Insurance Report
 

a written report from a maritime insurance consultant or broker acceptable to the Lenders in a form and content acceptable to the Lenders in respect of the insurances on each of the Owned Vessels, which report shall certify that such insurances are placed through or with insurance brokers and clubs, in amounts, covering risks and on terms acceptable to the Majority Lenders and that the same are in accordance with the terms of the Mortgages in respect of such Vessels;

	
                        (l)
 	
                        Fees and commissions
 

evidence that all fees and commissions due and payable have been paid in full;

	
                        (m)
 	
                        Management fees
 

evidence acceptable to the Agent that (i) during the 2 years following the first Drawdown Date the fees payable to the Manager will not exceed, in relation to “FANTASTIKS” and the Newbuilding, USD 5,000 per day and in relation to the other Owned Vessels, USD 4,000 per day and (ii) that such fees will be applied in payment of management fees, special survey expenses and dry docking fees.

 

 

3

 

Part 3

(referred to in Clause 9.3)

	
                        (a)
 	
                        Evidence satisfactory to the Lenders that “FANTASTIKS”:
 

	
                         
 	
                        (i)
 	
                        Purchase
 

has been unconditionally delivered by the Fantastiks Seller to, and accepted by, Fantastiks under the Fantastiks MOA, and the full purchase price payable under the Fantastiks  Kleimar MOA and the Fantastiks MOA (in addition to the part to be financed by Advance B) has been duly paid, together with copies of the bills of sale and protocols of delivery and acceptance relating thereto;

	
                         
 	
                        (ii)
 	
                        Registration and Encumbrances
 

is registered in the name of Fantastiks through the Registry under the laws and flag of the Flag State and that she and her Earnings, Insurances and Requisition Compensation (as defined in the relevant Mortgage) and any Existing Charter are free of Encumbrances except Permitted Encumbrances (such evidence to include relevant certificates issued by the Flag State and results of searches carried out against the said Registry by the Agent or its lawyers);

	
                         
 	
                        (iii)
 	
                        Classification
 

maintains the Classification free of all requirements and recommendations of the Classification Society; and

	
                         
 	
                        (iv)
 	
                        Insurance
 

is insured in accordance with the provisions of the relevant Ship Security Documents and all requirements of such Ship Security Documents in respect of such insurance have been complied with (including without limitation, receipt by the Agent of customary brokers’ letters of undertaking regarding the placing of hull and machinery and war risks cover and confirmation from the protection and indemnity association or other insurer with which “FANTASTIKS” is entered for insurance or insured against protection and indemnity risks, that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and that any such exclusion does not apply to her); 

 

 

2

 

	
                        (b)
 	
                        Security Documents
 

the Guarantee from Fantastiks, the Mortgage over “FANTASTIKS”, the General Assignment, Managers’ Undertakings and the Charter Assignment in respect of “FANTASTIKS” duly executed and delivered;

	
                        (c)
 	
                        Notices of assignment and acknowledgements
 

counterpart originals of duly executed notices of assignment required by the terms of the Security Documents referred to in (b) above and in the forms prescribed by these Security Documents and any other documents required to be delivered pursuant thereto;

	
                        (d)
 	
                        Mortgage registration
 

evidence that the Mortgage in respect of “FANTASTIKS” has been duly registered against her in accordance with the  laws of the relevant Flag State;

	
                        (e)
 	
                        Laws of the Marshall Islands: opinion
 

an opinion of Messrs Cozen O’Connor special legal advisers to the Banks in respect of  Marshall islands law;

	
                        (f)
 	
                        Further opinions
 

any such further opinions as may be required by the Agent;

	
                        (g)
 	
                        ISPS Code
 

evidence satisfactory to the Agent that “FANTASTIKS” is subject to a ship security plan which complies with the ISPS Code and (ii) a copy of the ISSC for such Vessel;

	
                        (h)
 	
                        Manager’s confirmation
 

written confirmation addressed by the Manager to the Agent that the representations and warranties set out in clause 7.1.20 (Environmental Matters) and clause 7.1.21 (ISM Code) are true and correct;

	
                        (i)
 	
                        Insurance Report
 

 

 

2

 

a written report from a maritime insurance consultant or broker acceptable to the Lenders in a form and content acceptable to the Lenders in respect of the insurances on “FANTASTIKS”, which report shall certify that such insurances are placed through or with insurance brokers and clubs, in amounts, covering risks and on terms acceptable to the Majority Lenders and that the same are in accordance with the terms of the Mortgage in respect of such Vessel; and

	
                        (j)
 	
                        Fees and commissions
 

evidence that all fees and commissions due and payable have been paid in full;  and

Part 4

(referred to in Clause 9.4)

	
                        (a)
 	
                        Evidence satisfactory to the Lenders that the Newbuilding:
 

	
                         
 	
                        (i)
 	
                        Purchase
 

has been unconditionally delivered by the Newbuilding Seller to, and accepted by, Nostos under the Newbuilding MOA, and the full purchase price payable under the Newbuilding MOA (in addition to the part to be financed by Advance C) has been duly paid, together with a copy of the bill of sale and protocol of delivery and acceptance relating thereto;

	
                         
 	
                        (ii)
 	
                        Registration and Encumbrances
 

is registered in the name of Nostos through the Registry under the laws and flag of the Flag State and that she and her Earnings, Insurances and Requisition Compensation (as defined in the relevant Mortgage) are free of Encumbrances except Permitted Encumbrances (such evidence to include relevant certificates issued by the Flag State and results of searches carried out against the said Registry by the Agent or its lawyers);

	
                         
 	
                        (iii)
 	
                        Classification
 

maintains the Classification free of all requirements and recommendations of the Classification Society; and

	
                         
 	
                        (iv)
 	
                        Insurance
 

 

 

3

 

is insured in accordance with the provisions of the relevant Ship Security Documents and all requirements of such Ship Security Documents in respect of such insurance have been complied with (including without limitation, receipt by the Agent of customary brokers’ letters of undertaking regarding the placing of hull and machinery and war risks cover and confirmation from the protection and indemnity association or other insurer with which the Newbuilding is entered for insurance or insured against protection and indemnity risks, that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and that any such exclusion does not apply to her); 

	
                        (b)
 	
                        Security Documents
 

the Guarantee from Nostos, the Mortgage over the Newbuilding, the General Assignment, Managers’ Undertakings and the Charter Assignment in respect of the Newbuilding duly executed and delivered;

	
                        (c)
 	
                        Notices of assignment and acknowledgements
 

counterpart originals of duly executed notices of assignment required by the terms of the Security Documents referred to in (b) above and in the forms prescribed by these Security Documents and any other documents required to be delivered pursuant thereto;

	
                        (d)
 	
                        Mortgage registration
 

evidence that the Mortgage in respect of the Newbuilding has been duly registered against her in accordance with the  laws of the relevant Flag State;

	
                        (e)
 	
                        Laws of the Marshall Islands: opinion
 

an opinion of Messrs Cozen O’Connor special legal advisers to the Banks in respect of  Marshall islands law;

	
                        (f)
 	
                        laws of Panama: opinion
 

an opinion of Messrs Patton, Moreno & Asvat, legal advisors to the Banks on Panamanian law;

	
                        (g)
 	
                        Further opinions
 

 

 

2

 

any such further opinions as may be required by the Agent;

	
                        (h)
 	
                        ISPS Code
 

evidence satisfactory to the Agent that the Newbuilding is subject to a ship security plan which complies with the ISPS Code and (ii) a copy of the ISSC for such Vessel;

	
                        (i)
 	
                        Manager’s confirmation
 

written confirmation addressed by the Manager to the Agent that the representations and warranties set out in clause 7.1.20 (Environmental Matters) and clause 7.1.21 (ISM Code) are true and correct;

	
                        (j)
 	
                        Insurance Report
 

a written report from a maritime insurance consultant or broker acceptable to the Lenders in a form and content acceptable to the Lenders in respect of the insurances on the Newbuilding, which report shall certify that such insurances are placed through or with insurance brokers and clubs, in amounts, covering risks and on terms acceptable to the Majority Lenders and that the same are in accordance with the terms of the Mortgage in respect of such Vessel;

	
                        (k)
 	
                        Valuations 
 

a valuation of the Newbuilding and each of the Mortgaged Vessels prepared at the cost of the Borrower by an Approved Broker not more than 2 months prior to the relevant Drawdown Date and to be provided to the Agent no more than 10 or fewer than 5 Banking Days prior to the relevant Drawdown Date, giving their charter-fee value in scope and form and substance acceptable to the Lenders showing (i) the Loan, after Drawdown of Advance C, to be no more than 70% of the aggregate Valuation Amounts of the Mortgaged Vessels (including the Newbuilding) and (ii) Advance C to be no more than 65% of the Valuation Amount of the Newbuilding;

	
                        (l)
 	
                        Fees and commissions
 

evidence that all fees and commissions due and payable have been paid in full;  and

	
                        (m)
 	
                        Minimum Value
 

 

 

3

 

Evidence that following drawdown of Advance D the Security Value exceeds the Required Security Amount.

 

 

 

4

 

 

Schedule 5

Form of Transfer Certificate

(referred to in clause 15.3)

TRANSFER CERTIFICATE

Lenders are advised not to employ Transfer Certificates or otherwise to assign or transfer interests in the Loan Agreement without further ensuring that the transaction complies with all applicable laws and regulations, including the Financial Services and Markets Act 2000 and regulations made thereunder and similar statutes which may be in force in other jurisdictions

To:   DVB Bank AG as Agent on its own behalf and on behalf of the Borrower, the Lenders, the Payment Agent, the Swap Banks, the Account Bank, the Security Trustee and the Arrangers as defined in the Loan Agreement referred to below.

[Date]

Attention:   [●]

This certificate (“Transfer Certificate”) relates to a USD 260,000,000 revolving and term loan credit facility agreement dated  [   ] November 2007 (the “Loan Agreement”) made between (1) Navios Maritime Partners L.P. (as Borrower) , (2) DVB Bank AG and Commerzbank AG (as Lenders), (3) DVB Bank AG (as Agent, Swap Bank, Joint-Arranger, Account Bank and Security Trustee) and (4) Commerzbank AG (as Joint-Arranger, Payment Agent and Swap Bank). Words and expressions defined in the Loan Agreement shall, unless otherwise defined herein, have the same meanings when used in this Certificate.

In this Certificate:

the “Transferor” means [full name] of [lending office]; and

the “Transferee” means [full name] of [lending office].

 

 

5

 

	
                        1.
 	
                        The Transferor with full title guarantee assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as a Lender under or by virtue of the Loan Agreement and all the other Security Documents in relation to [●] per centum ([●]%) of the [Contribution] [Commitment] of the Transferor (or its predecessors in title).
 

	
                        2.
 	
                        By virtue of this Transfer Certificate and clause 15 of the Loan Agreement, the Transferor is discharged [entirely from its [Contribution] [Commitment] in respect of the Loan, which amounts to USD [●]] [from [●] per centum ([●]%) of its [Contribution] [Commitment] in respect of the Loan and the Transferee assumes all obligations in respect thereof.
 

	
                        3.
 	
                        The Transferee hereby requests the Agent (on behalf of itself, the Borrower, the Account Bank, the Swap Banks the Security Trustee, the Payment Agent, the Arrangers and the Lenders) to accept the executed copies of this Transfer Certificate as being delivered pursuant to and for the purposes of clause 15.3 of the Loan Agreement so as to take effect in accordance with the terms thereof on [date of transfer].
 

	
                        4.
 	
                        The Transferee:
 

	
                        4.1
 	
                        confirms that it has received a copy of the Loan Agreement and the other Security Documents together with such other documents and information as it has required in connection with the transaction contemplated thereby;
 

	
                        4.2
 	
                        confirms that it has not relied and will not hereafter rely on the Transferor, the Agent, the Account Bank, the Payment Agent, the Arrangers, the Lenders or the Security Trustee to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of the Loan Agreement, any of the Security Documents or any such documents or information;
 

	
                        4.3
 	
                        agrees that it has not relied and will not rely on the Transferor or any of the Banks to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of the Borrower, or any other Security Party (save as otherwise expressly provided therein);
 

	
                        4.4
 	
                        warrants that it has power and authority to become a party to the Loan Agreement and has taken all necessary action to authorise execution of this Transfer Certificate and to obtain 
 

 

 

6

 

all necessary approvals and consents to the assumption of its obligations under the Security Documents; and

	
                        4.5
 	
                        if not already a Lender, appoints (i) the Agent to act as its agent and (ii) the Security Trustee to act as its Security Trustee and trustee, as provided in the Security Documents and agrees to be bound by the terms of all of the Security Documents.
 

	
                        5.
 	
                        The Transferor:
 

	
                        5.1
 	
                        warrants to the Transferee that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to authorise it to do so;
 

	
                        5.2
 	
                        warrants to the Transferee that this Transfer Certificate is binding on the Transferor under the laws of England, the country in which the Transferor is incorporated and the country in which its lending office is located; and
 

	
                        5.3
 	
                        agrees that it will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under this Transfer Certificate or for a similar purpose.
 

	
                        6.
 	
                        The Transferee hereby undertakes with the Transferor and each of the other parties to each of the Security Documents that it will perform in accordance with its terms all those obligations which by the terms of the Loan Agreement and the other Security Documents will be assumed by it after delivery of the executed copies of this Transfer Certificate to the Agent and satisfaction of the conditions (if any) subject to which this Transfer Certificate is expressed to take effect.
 

	
                        7.
 	
                        By execution of this Transfer Certificate on their behalf by the Agent and in reliance upon the representations and warranties of the Transferee, the Borrower and each of the Banks accept the Transferee as a party to the Security Documents with respect to all those rights and/or obligations which by the terms of the Security Documents will be assumed by the Transferee (including without limitation those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent, the Account Bank, the Payment Agent, the Arrangers and the Security Trustee as provided by the Loan Agreement) after delivery of the executed copies of this Transfer Certificate to the Agent 
 

 

 

7

 

and satisfaction of the conditions (if any) subject to which this Transfer Certificate is expressed to take effect.

	
                        8.
 	
                        None of the Transferor or the Banks:
 

	
                        8.1
 	
                        makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of any of the Security Documents or any document relating thereto; or
 

	
                        8.2
 	
                        assumes any responsibility for the financial condition of any Security Party or any party to any such other document or for the performance and observance by any Security Party or any party to any such other document (save as otherwise expressly provided therein) and any and all such conditions and warranties, whether express or implied by law or otherwise, are hereby excluded (except as aforesaid).
 

	
                        9.
 	
                        The Transferor and the Transferee each undertake that they will on demand fully indemnify the Agent in respect of any claim, proceeding, liability or expense which relates to or results from this Transfer Certificate or any matter concerned with or arising out of it unless caused by the Agent’s gross negligence or wilful misconduct, as the case may be.
 

	
                        10.
 	
                        The agreements and undertakings of the Transferee in this Transfer Certificate are given to and for the benefit of and made with each of the other parties to each of the Security Documents.
 

	
                        11.
 	
                        This Transfer Certificate shall be governed by, and construed in accordance with, English law.
 

 

	
                        Transferor
 	
                         
 	
                        Transferee
 
	
                        By: 
 	
                        
  
 	
                         
 	
                        By: 
 	
                        
  
 
	
                        Dated: 
 	
                         
 	
                         
 	
                        Dated: 
 	
                         
 

Agent

 

 

8

 

Agreed for and on behalf of itself as Agent, the Arrangers, the Payment Agent, the Borrower, the Swap Banks, the Security Trustee, the Account Bank, the Arrangers and the Lenders.

[●]

 

	
      By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Dated: 
 	
                         
 	
                         
 	
                         
 	
                         
 

NOTE: The execution of this Transfer Certificate alone may not transfer a proportionate share of the Transferor’s interest in the security constituted by the Security Documents in the Transferor’s or Transferee’s jurisdiction. It is the responsibility of the Transferee to ascertain whether any other documents are required to perfect a transfer of such a share in the Transferor’s interest in such security in any such jurisdiction and, if so, to seek appropriate advice and arrange for execution of the same. 

The schedule

 

	
                        Contribution:
 	
                        USD [●]
 
	
                        Commitment:
 	
                        USD [●]
 
	
                        Portion Transferred:
 	
                        [●]%
 

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person:

(Loan Administration Department)

Telephone:

Telefax No:

Contact Person:

(Credit Administration Department)

Telephone:

Telefax No:

[Account for payments:]

 

 

9

 

Schedule 6

Form of Compliance Certificate

	
                        To:
 	
                        DVB Bank AG (as Agent)
 

	
                        From:
 

	
                         
 	
                        Date [  
 	
      ] 200[ ]
 

	
                        Re:
 	
                        USD 260,000,000 revolving and term loan facility agreement dated [    ] November 2007 (the “Loan Agreement”) made between (1) Navios Maritime Partners L.P. (as Borrower), (2) DVB Bank AG and Commerzbank AG (as Lenders), (3) DVB Bank AG (as Agent Swap Bank, Joint-Arranger and Security Trustee) and (4) Commerzbank AG (as Payment Agent, Joint-Arranger, Account Bank and Swap Bank).
 

Dear Sirs

We refer to the Loan Agreement. Words and expressions whose meanings are defined in the Loan Agreement shall have the same meanings when used herein.

We hereby confirm that [except as stated below] as at the date hereof to the best of our knowledge and belief after due inquiry:-

	
                        1.
 	
                        WE confirm that in respect of the last financial quarter/year:
 

	
                         
 	
                        (a)
 	
                        the Liquidity of the Group is USD [       ] which exceeds the Minimum Liquidity;
 

	
                         
 	
                        (b)
 	
                        the ratio of EBITDA to Interest Expense is [  ] to 1; 
 

	
                         
 	
                        (c)
 	
                        the Total Liabilities are USD [  ] and the Total Assets (adjusted for market values of vessels calculated in accordance with Clause 8.2.2) are USD [  ]. The Total Assets divided by the Total Assets (adjusted for market values of vessels calculated in accordance with Clause 8.2.2) is [        ]% and
 

	
                         
 	
                        (d)
 	
                        the Net Worth is USD[          ]..
 

	
                        2.
 	
                        no Default has occurred;
 

 

 

10

 

	
                        3.
 	
                        the representations set out in clause 7 of the Loan Agreement are true and accurate with reference to all facts and circumstances now existing and all Required Authorisations have been obtained and are in full force and effect.
 

[State any exceptions/qualifications to the above statements]

Yours faithfully

	
                        [    ]  

      

By________________________

[Chief Financial Officer : Navios Maritime Partners L.P.]

[Chief Executive Officer : Navios Maritime Partners L.P.]

[Director : Navios Maritime Partners L.P.]

 

 

11

 

Schedule 7

Form of Trust Deed

THIS DECLARATION OF TRUST is made by DVB BANK AG (the “Security Trustee”) on [●] November, 2007 and is supplemental to (and made pursuant to the terms of) a USD 260,000,000 facility agreement dated [    ] November, 2007 (the “Loan Agreement”) made between(1) Navios Maritime Partners L.P. (as Borrower), (2) DVB Bank AG and Commerzbank AG (as Lenders), (3) DVB Bank AG (as Agent, Swap Bank, Joint-Arranger, Account Bank and Security Trustee) and (4) Commerzbank AG (as Joint-Arranger, Payment Agent and Swap Bank). Words and expressions whose meanings are defined in
the Loan Agreement shall have the same meanings when used in this Deed.

NOW THIS DEED WITNESSETH as follows:

	
                        (a)
 	
                        The Security Trustee hereby acknowledges and declares that, from the date of this Deed, it holds and shall hold the Trust Property on trust from time to time and at all times for the other Banks on the terms and basis set out in the Loan Agreement.
 

	
                        (b)
 	
                        The declaration and acknowledgement contained in paragraph 1 above shall be irrevocable.
 

IN WITNESS whereof the Security Trustee has executed this Deed the day and year first above written.

 

	
                        SIGNED, SEALED and DELIVERED 
 	
                        )
 	
                         
 
	
                        as a DEED
 	
                        )
 	
                         
 
	
                        by
 	
                        )
 	
                        Authorised Signatory
 
	
                        and by
 	
                        )
 	
                         
 
	
                        for and on behalf of
 	
                        )
 	
                         
 
	
                        DVB BANK AG
 	
                        )
 	
                         
 
	
                        as Security Trustee
 	
                        )
 	
                        Authorised Signatory
 

 

 

12

 

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 by
 	
                        )
 
	
                        for and on behalf of
 	
                        )
 
	
                        NAVIOS MARITIME PARTNERS L.P. 
 	
                        )
 
	
                        (as Borrower under and pursuant to
 	
                        )
 
	
                        a power of attorney dated 
 	
                        )
 
	
                        January 2007) in the presence of
 	
                        )
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                        SIGNED by
 	
                        )
 
	
                        for and on behalf of
 	
                        )
 
	
                        COMMERZBANK AG
 	
                        )
 
	
                        (as a Lender) in the presence of
 	
                        )
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                        SIGNED by
 	
                        )
 
	
                        for and on behalf of
 	
                        )
 
	
                        DVB BANK AG
 	
                        )
 
	
                        (as a Lender) in the presence of
 	
                        )
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                        SIGNED by
 	
                        )
 
	
                        for and on behalf of
 	
                        )
 
	
                        DVB BANK AG
 	
                        )
 
	
                        (as Joint-Arranger, Agent, Swap Bank and
 	
                        )
 
	
                        Security Trustee) in the presence of
 	
                        )
 
	
                         
 	
                         
 
	
                         
 	
                         
 
	
                        SIGNED by
 	
                        )
 
	
                        for and on behalf of
 	
                        )
 
	
                        COMMERZBANK AG
 	
                        )
 
	
                        (as Payment Agent, Joint-Arranger, Account
 	
                        ) 
 
	
                        Bank, and Swap Bank) in the presence of
 	
                        )
 

 

 

13exv10w1

 

Execution Copy

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (“Agreement”), is made and entered into
as of July 26, 2007, by and between Daniel W. Dienst (“Executive”) and Metal
Management, Inc., a Delaware corporation (“MTLM”).

     NOW, THEREFORE, in consideration of the premises, promises, mutual
covenants and mutual agreements contained herein, Executive and MTLM hereby agree
as follows:

     1. Employment.

     (a) On the terms and subject to the conditions set forth in this
Agreement, MTLM employs Executive as its President and Chief Executive
Officer to perform such duties and responsibilities as are consistent with such
position and such other positions as may be assigned to Executive, from time to
time, by the Board of Directors of MTLM (the “Board”). As of the
Commencement Date (as defined below), Executive is a member of the Board and
has been elected to serve as Chairman of the Board. During the Employment
Period (as defined below), MTLM shall use best efforts to see that Executive
while employed under this Agreement continues to be nominated and elected to
serve on the Board. For as long as Executive is so employed, he shall devote his
full business time, energy and ability to his duties, except for reasonably
necessary attention to the management of his personal affairs. If Executive is
Chairman of the Board and/or a director when his employment terminates under
this Agreement, whether pursuant to Section 6 or 7 of this Agreement, he shall
tender his resignation as Chairman and/or director effective as of the Termination
Date (as defined below) if so requested by the Board.

     (b) Executive’s worksites during the Employment Period (as defined
below) shall be 325 North LaSalle Street, Suite 550, Chicago, Illinois 60610 and
127 East 69th Street, New York, New York 10021 or such other locations as may
be mutually agreed upon by MTLM and Executive, with Executive’s time
allocated between such sites as shall be reasonably determined to be necessary
and appropriate by Executive to fulfill Executive’s duties and responsibilities and
exercise Executive’s powers under the terms of this Agreement.

     (c) Executive shall have the right to continue to serve on the board of
directors of those business, civic and charitable organizations on which Executive
is now serving as of the date of this Agreement, and that are set forth on Exhibit A
attached hereto, as long as doing so has no significant adverse affect on the
performance of Executive’s duties and responsibilities or the exercise of
Executive’s powers under this Agreement. Executive shall not serve on any other
boards of directors and shall not provide services (whether as an employee or

 

 

independent contractor) to any for-profit organization on or after the date of this
Agreement without the prior consent of the Board (which shall not be
unreasonably withheld in light of Executive’s duties and responsibilities under
this Agreement).

     2. Term. The term of employment under this Agreement shall commence on
August 1, 2007 (the “Commencement Date”) and shall continue through, and end as of
the close of business on March 31, 2012 (the “Employment Period”); provided,
however, that on March 31, 2012 and each anniversary thereof, the Employment Period
shall be extended for an additional year unless either MTLM or Executive, as the case
may be, notifies the other not less than 90 days prior to the end of the then current
Employment Period of its or his desire not to extend the Employment Period; provided
further that the Employment Period may terminate sooner upon the occurrence of certain
events as described in Sections 5, 6, 7, 8 and 9 of this Agreement. The date on which
Executive’s employment is terminated shall be referred to herein as the “Termination
Date”.

     3. Compensation.

     (a) Base Compensation. The base compensation to be paid to
Executive for his services under this Agreement shall be not less than $950,000
per year (“Base Compensation”), subject to applicable withholdings, payable in
equal periodic installments in accordance with the usual payroll practices of
MTLM, but no less frequently than monthly, commencing on the Commencement
Date. Executive’s base compensation shall be subject to annual review for cost of
living and merit factors, with any adjustments determined by the compensation
committee of the Board. Notwithstanding anything herein to the contrary, Base
Compensation may be reduced below $950,000 per year if such reduction is in the
same proportion as a reduction generally affecting other executive officers of
MTLM.

     (b) Annual Bonus. For the fiscal year ending March 31, 2008, and for
each subsequent fiscal year ending March 31 during the Employment Period,
Executive’s target annual bonus shall be not less than 100% of Base
Compensation (subject to applicable withholdings) (“Target Bonus”), and
Executive’s maximum bonus (as a percentage of Base Compensation) shall be not
less than that in effect under MTLM’s annual bonus program on the
Commencement Date (“Maximum Bonus”). Executive shall be eligible to
receive an annual bonus in accordance with the terms of MTLM’s annual bonus
program as then in effect for MTLM’s senior executives as such program is
modified by this Section 3(b); provided, however, the compensation committee of
the Board may direct MTLM to pay Executive an annual bonus that exceeds the
annual bonus otherwise payable under such program. Notwithstanding anything
contained herein to the contrary, Executive’s Target Bonus may be reduced below
100% of Base Compensation if such reduction is in the same proportion as a
reduction affecting other executive officers of MTLM. Each annual bonus

2

 

described in this Section 3(b) shall be paid at the time called for under MTLM’s
annual bonus program for senior executives.

     (c) Annual Restricted Stock Grant. For the fiscal year ending
March 31, 2008 and for each subsequent fiscal year ending March 31 during the
Employment period, Executive may, at the discretion of the Compensation
Committee of the Board, be granted a number of shares of common stock, $0.01
par value per share (the “MTLM Stock”) pursuant to the terms of the Amended
and Restated Metal Management, Inc. 2002 Incentive Stock Plan or any successor
plan (the “Plan”). All terms and conditions to such grant shall be set forth for
Executive in a certificate in accordance with the terms of the Plan, including that
that all shares shall become non-forfeitable upon a Triggering Event (as defined
below); in addition to the foregoing, however, such certificate shall provide that
all shares shall become non-forfeitable upon termination of Executive’s
employment if MTLM notifies Executive that it will not extend the Employment
Period as provided under Section 2 of this Agreement.

     (d) Special Restricted Stock Grant. Upon execution and delivery of
the this Agreement by MTLM and Executive, Executive shall be granted 196,532
MTLM Shares pursuant to the Plan. Notwithstanding any provision in the Plan,
Executive’s interest in 117,920 shares shall become non-forfeitable on July 26,
2010 provided Executive is still employed by MTLM on such date, and his
interest in an additional 39,306 shares shall become non-forfeitable on each of the
next two subsequent anniversaries of such date provided Executive is still
employed by MTLM on such anniversary date. All terms and conditions to such
grant shall be set forth for Executive in a certificate in accordance with the terms
of the Plan; provided, however, that such certificate shall provide that all shares
shall become non-forfeitable upon (i) a Triggering Event or (ii) termination of
Executive’s employment if MTLM notifies Executive that it will not extend the
Employment Period as provided under Section 2 of this Agreement, and such
certificate shall include a waiver signed by Executive with respect to the
provisions of Section 15 of the Plan that provide that such shares would become
non-forfeitable solely upon such Change of Control (as defined in the Plan).

     4. Fringe Benefits. MTLM shall furnish Executive with accident, health and
life insurance (“Welfare Benefits”) and reimbursement of all documented reasonable and
necessary out-of-pocket expenses incurred by Executive on behalf of MTLM by reason
of the performance of Executive’s duties and responsibilities hereunder. Further, MTLM
shall furnish Executive with all of the additional fringe benefits made generally available
by MTLM to its executive officers recognizing that such fringe benefits may be changed
from time to time provided Executive shall be deemed immediately eligible for any such
fringe benefits to the extent permissible under the terms of applicable law and the terms
of the underlying plans, programs and policies. Executive shall be entitled to take five
weeks of paid vacation per calendar year, and shall be paid on all national and state
holidays, during the Employment Period. Vacation allowances shall not be cumulative
from year to year. MTLM shall include Executive as a covered person under MTLM’s
directors and officers’ insurance policy. MTLM shall furnish Executive with appropriate

3

 

office space (as set forth in Section 1(b) of this Agreement), equipment, supplies, and
such other facilities and personnel as necessary or appropriate (de minimis use thereof by
Executive for personal reasons shall not be deemed a breach of this Agreement). MTLM
shall pay Executive’s dues in such societies and organizations as MTLM deems
appropriate, and shall pay on behalf of Executive (or reimburse Executive for)
documented reasonable out-of-pocket expenses incurred by Executive in attending
conventions, seminars, trade shows and other business meetings and business
entertainment and promotional expenses. MTLM shall pay Executive an automobile
allowance of $1,000.00 per month, subject to applicable withholdings.

     5. Death or Permanent Disability. If, during the Employment Period,
Executive dies (as confirmed by a certificate of death) or Executive is permanently
disabled such that, in the opinion of a physician selected by MTLM and Executive,
Executive (or his spouse or legal representative) is rendered incapable of performing the
services contemplated under this Agreement for 180 days in any 12 consecutive months
by reason of illness, accident, or other physical or mental disability (“Permanent
Disability”), this Agreement shall be deemed to be terminated as of the date of such
death or of the determination of Permanent Disability. Notwithstanding the foregoing,
Executive shall be entitled to the benefits as provided in Section 8 of this Agreement.
During any period prior to such time when Executive has a Permanent Disability, as
described above, MTLM shall be obligated to perform its obligations under this
Agreement in accordance with its terms, including, but not limited to, its obligations
under Section 3 of this Agreement.

     6. Involuntary Termination. Except in the case of termination for Cause
pursuant to Section 7 of this Agreement, if MTLM terminates Executive’s employment
hereunder without Executive’s consent, such termination shall be a Triggering Event, and
Executive shall be entitled to receive the benefits as provided in Section 8(b) of this
Agreement.

     7. Termination Voluntary or for Cause.

     (a) In the event: (i) Executive voluntarily terminates his employment
hereunder without Good Reason (as defined below) or (ii) Executive’s
employment hereunder is terminated for Cause, unless otherwise provided herein,
all of his compensation and benefits under this Agreement shall cease
immediately upon the date of such termination, provided that Executive shall be
entitled to receive the compensation provided in Section 3 of this Agreement paid
on a pro rata basis to the date of such termination.

     (b) Termination for Cause. Any of the following events shall be
considered as “Cause” for the immediate termination of the Employment Period
by MTLM:

     (i) conviction of Executive for a felony, or a nolo contendere
plea with respect to a the same; or

4

 

     (ii) conviction of Executive for misappropriation by Executive
of funds or property of MTLM or the commission of acts of fraud relating
to his employment in each case resulting in material harm to MTLM, or a
nolo contendere plea with respect to the same; or

     (iii) (a) willful breach of this Agreement that is not cured by
Executive within 10 days following receipt by Executive of written notice
of such breach from MTLM or (b) material neglect by Executive of any of
his material duties or responsibilities hereunder that is not cured by
Executive within 30 days following receipt by Executive of written notice
of the acts that MTLM assert constitute such neglect by Executive,
provided, however, that any such willful breach or material neglect that is
not curable shall be considered Cause for the immediate termination of the
Employment Period by MTLM; or

     (iv) conduct on the part of Executive that is materially adverse
to any known interest of MTLM that continues unabated, or uncured to the
reasonable satisfaction of MTLM, after the expiration of 10 days
following receipt of written notice by Executive from MTLM.

Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered
to him a written termination notice signed by a member of the Board duly
authorized to deliver such notice.

     8. Acceleration of Payments.

     (a) For this Agreement, the following terms shall have the following
meanings:

     (i) “Good Reason” shall mean the occurrence of any of the
following events without Executive’s express written consent: (a) a
reduction by MTLM of Executive’s Base Compensation, Target Bonus or
Maximum Bonus provided in Section 3 of this Agreement unless such
reduction is in the same proportion as a reduction generally affecting other
executive officers of MTLM; (b) a material reduction in Welfare Benefits
unless such reduction is in the same proportion as a reduction generally
affecting other executive officers of MTLM; (c) any material breach by
MTLM of any provisions of this Agreement (including Section 1(b) of this
Agreement) that is not cured by MTLM within 10 days following receipt
by MTLM of written notice of such breach from Executive; (d) the
assignment of Executive by MTLM without his consent to a position,
responsibility or duties of a materially lesser status or degree of
responsibility than his position, responsibilities or duties as of the
Commencement Date as provided for in Section 1 of the Agreement;
provided, however that Executive no longer being President or Chairman
of the Board shall not be nor shall be deemed to be Good Reason; or
(e) upon a Change of Control (as defined below), the failure by the

5

 

acquiring company or its direct or indirect parent, subsidiary or affiliate to
assume MTLM’s obligations hereunder.

     (ii) “Trigger Date” means the date on which a Triggering Event
occurs.

     (iii) “Triggering Event” means any of: (A) a resignation of
Executive as an employee of MTLM due to Good Reason; (B) termination
of the Employment Period under Section 5 of this Agreement; or
(C) involuntary termination of the Employment Period by MTLM, except
in the case of termination for Cause (which, for the avoidance of doubt,
does not include the non-extension of this Agreement as provided in
Section 2 of this Agreement).

     (b) Occurrence of Triggering Event. Upon the occurrence of a
Triggering Event described in clause (A) or (C) of Section 8(a)(iii) of this
Agreement, Executive shall continue to receive from MTLM for two years after
such Triggering Event: (i) Base Compensation as provided under Section 3(a) of
this Agreement, (ii) an amount equal to Target Bonus and (iii) Welfare Benefits
(with the same cost sharing arrangements in effect at the time of such Triggering
Event) as provided under Section 4 of this Agreement. The payments described
in clauses (i) and (ii) above are subject to applicable withholdings, and are
payable in equal periodic installments in accordance with the usual payroll
practices of MTLM, but no less frequently than monthly, commencing on the
Termination Date. In the event of a Triggering Event, Executive shall receive a
pro rata annual bonus for the year of termination based upon actual performance
results during such period and payable at time called for under MTLM’s annual
bonus program for senior executives. The Welfare Benefits are subject to
applicable withholdings to the extent such benefits are taxable benefits.
Furthermore, upon the occurrence of a Triggering Event, any unvested stock
options or stock grants or any unvested long term incentive plan compensation
shall immediately become vested. If this Agreement is terminated as a result of
Executive’s death, Executive’s then current spouse and dependent children shall
be entitled to continue to participate in the MTLM provided health and medical
insurance programs for one year after such death, unless, in each case, such
continued participation is prohibited by any applicable laws or would otherwise
jeopardize the tax qualified status of any such programs. If MTLM is prohibited
by applicable law or would otherwise jeopardize the tax qualified status of any
health or medical insurance plan and as a result MTLM terminates coverage, it
shall promptly reimburse Executive for the cost of obtaining comparable third
party coverage.

     (c) Code Section 409A.

     (i) If the Executive is a “specified employee” (as defined in
Treasury Regulation Section 1.409A-l(i)) of MTLM and if MTLM
reasonably determines that amounts payable under Section 8(b) of this

6

 

Agreement are on account of an “involuntary separation from service” (as
defined in Treasury Regulation Section 1.409A-l(m)) and are not subject
to tax under Section 409A of the Code, the Executive shall receive
payments during the six-month period immediately following the
Termination Date equal to the lesser of (A) the amount payable under
Section 8(b) of this Agreement and (B) two times the compensation limit
in effect under Code Section 40l(a)(17) for the calendar year in which the
Termination Date occurs (with any amounts that otherwise would have
been payable under Section 8(b) of this Agreement during such six-month
period being paid on the first regular payroll date following the six-month
anniversary of the Termination Date).

     (ii)
If MTLM reasonably determines that such termination is
not an “involuntary separation from service” (as defined in Treasury
Regulation Section 1.409A-l(m)), amounts that would otherwise have
been paid during the six-month period immediately following the
Termination Date shall be paid on the first regular payroll date
immediately following the six-month anniversary of the Termination Date
without regard to whether such amounts are then taxable under
Section 409A of the Code.

     (iii) Any amounts not paid during such six-month period
pursuant to the special timing rule in Section 8(c)(i) or (ii) of this
Agreement shall accrue at an annual rate (compounded monthly) equal to
the federal short-term rate (as in effect under Section l274(d) of the Code
on the Termination Date), and shall be paid on the first regular payroll
date immediately following the six-month anniversary of the Termination
Date.

     9. Non-Competition.

     (a) General. In addition to any other obligations of Executive under
any other agreement with MTLM, in order to assure that MTLM shall realize the
benefits of this Agreement and in consideration of the employment set forth in
this Agreement, Executive shall not:

     (i) during the period beginning on the date of this Agreement
and ending 18 months after the Termination Date (the “Non-Competition
Period”), directly or indirectly, whether through an affiliate or otherwise,
alone or as a partner, joint venturer, member, officer, director, employee,
consultant, agent, independent contractor, stockholder, or in any other
capacity of any company or business, engage in any business activity in
any state in the United States or any other country or region in which,
prior to the Termination Date, MTLM or any subsidiary or affiliate of
MTLM conducts business or is actively planning to conduct business and,
on and after the Termination Date, MTLM or any subsidiary or affiliate of
MTLM on the Termination Date conducts business or is actively planning
to conduct business, which business activity is directly or indirectly in

7

 

competition with the business, prior to the Termination Date, that is
conducted by or is actively planned to be conducted by MTLM or any
subsidiary or affiliate of MTLM and, on and after the Termination Date, is
on the Termination Date conducted by or is actively planned to be
conducted by MTLM or any subsidiary or affiliate of MTLM; provided,
however; that, the beneficial ownership of less than 5% of the shares of
stock of any corporation having a class of equity securities actively traded
on a national securities exchange or over-the-counter market shall not be
deemed, in and of itself, to violate the prohibitions of this Section 9;
provided, however, that Executive shall not be bound by the restrictions
set forth in this Section 9(a)(i) if MTLM shall not have cured the failure to
make any material payment to Executive under this Agreement within 30
days following receipt by MTLM of written notice from Executive of such
failure unless such failure to make such payment is due to MTLM’s
allegation of a material breach of the terms of this Agreement;

     (ii) during the Non-Competition Period, directly or indirectly
(a) induce any person that is a customer of MTLM or any subsidiary or
affiliate of MTLM on the Termination Date to patronize any business
directly or indirectly in competition with the business conducted by
MTLM or any subsidiary or affiliate of MTLM on the Termination Date;
(b) canvass, solicit or accept from any person that is a customer of MTLM
or any subsidiary or affiliate of MTLM on the Termination Date, any such
competitive business, or (c) request or advise any person that is a customer
of MTLM or any subsidiary or affiliate of MTLM on the Termination
Date to withdraw, curtail or cancel any such customer’s business with
MTLM or any subsidiary or affiliate of MTLM on the Termination Date;

     (iii) during the Non-Competition Period, directly or indirectly
employ, or knowingly permit any company or business directly or
indirectly controlled by him, to employ, any person who was employed by
any of MTLM or any then subsidiary or affiliate of MTLM at or within six
months prior to the Termination Date, or in any manner seek to induce any
such person to leave his or her employment; or

     (iv) directly or indirectly, at any time following the Termination
Date, in any way utilize, disclose, copy, reproduce or retain in his
possession any of MTLM’s or any subsidiary’s or affiliate’s proprietary
rights or records, including, but not limited to, any of their customer or
price lists.

     (b) Scope of Restriction. Executive agrees and acknowledges that the
restrictions contained in this Section 9 are reasonable in scope and duration and
are necessary to protect MTLM after the Commencement Date. If any provision
of this Section 9 as applied to any party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same shall in no way affect any other
circumstance or the validity or enforceability of this Agreement. If any such
provision, or any part thereof, is held to be unenforceable because of the duration
of such provision or the area covered thereby, the parties agree that the court

8

 

making such determination shall have the power to reduce the duration and/or
area of such provision, and/or to delete specific words or phrases, and in its
reduced form, such provision shall then be enforceable and shall be enforced.
The parties agree and acknowledge that the breach of this Section 9 shall cause
irreparable damage to MTLM and upon breach of any provision of this Section 9,
MTLM shall be entitled to injunctive relief, specific performance or other
equitable relief; provided, however, that this shall in no way limit any other
remedies that MTLM may have (including, but not limited to, the right to seek
monetary damages).

     (c) Termination of Payments Upon Breach. If Executive shall have
breached this Section 9 in any material respect, all amounts and all benefits
otherwise payable to Executive pursuant to Section 8 of this Agreement shall
immediately cease. In addition, upon determination by a court of competent
jurisdiction that Executive shall have breached this Section 9 in any material
respect, Executive shall repay all amounts and all benefits previously paid by
MTLM to Executive pursuant to Section 8 of this Agreement. Nothing in this
Section 9(c) shall in any way limit any other remedies that MTLM may have with
respect to any such breach.

     10. Change Of Control.

     (a) General. Notwithstanding anything in the Plan to the contrary, for
purposes of this Agreement and with respect to any options, stock grants and
stock appreciation rights issued under the Plan to Executive, “Change of
Control” shall be deemed to have occurred at such time as (1) any “person” (as
that term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) becomes after the
effective date of this
Agreement the beneficial owner (as defined in Rule 13d-3 under the 1934 Act)
directly or indirectly of securities representing 40% or more of the combined
voting power of the then outstanding securities for election of directors of the
Company or any successor to the Company, (2) during any period of two
consecutive years or less, individuals who at the beginning of such period
constitute the Board cease, for any reason, to constitute at least a majority of the
Board, unless the election or nomination for election of each person who was not
a director at the beginning of such period was approved by vote of at
least two-thirds
of the directors then in office who were directors at the beginning of such
period or who were directors previously so approved, (3) there is a dissolution or
liquidation of the Company or any sale or disposition of 50% or more of the
assets or business of the Company, or (4) there is a reorganization, merger,
consolidation or share exchange (other than a reorganization, merger,
consolidation, or share exchange with a wholly-owned subsidiary of the
Company) of the Company unless (A) the persons who were the beneficial
owners of the outstanding shares of the common stock of the Company
immediately before the consummation of such transaction beneficially own more
than 50% of the outstanding shares of the common stock of the successor or

9

 

survivor corporation in such transaction immediately following the consummation
of such transaction and (B) the shares of the common stock of such successor or
survivor corporation beneficially owned by the persons described in clause
(A) immediately following the consummation of such transaction are beneficially
owned by each such person in substantially the same proportion that each such
person had beneficially owned shares of Company common stock immediately
before the consummation of such transaction.

     (b) Special Tax Payments. If any payment or benefit to Executive
under this Agreement, either alone or together with other payments or benefits to
Executive from the Company, would constitute a “parachute payment” (as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), such payments or benefits shall be reduced to an amount that would no
longer constitute a “parachute payment”; provided, however, if such amount
exceeds 10% of the total amounts Executive would otherwise have been entitled
to receive, such amounts to be received shall be grossed up to an amount such that
after payment of the excise tax imposed by Section 4999 of the Code, Executive
will receive on an after tax basis the same amount Executive would have received
if no such excise tax was imposed.

     11. Confidentiality of Information; Duty of Non-Disclosure. Executive
acknowledges and agrees that his employment by MTLM under this Agreement
necessarily involves his understanding of and access to certain trade secrets and
confidential information pertaining to the business of MTLM or any subsidiary or
affiliate of MTLM. Accordingly, Executive shall not, directly or indirectly, at any time
(whether during the Employment Period or at any time thereafter) without the prior
written consent of MTLM, disclose to or use for the benefit of any person, corporation or
other entity, or for himself any and all files, trade secrets or other confidential
information concerning the internal affairs of MTLM or any subsidiary or affiliate of
MTLM, including, but not limited to, confidential information pertaining to clients,
services, products, earnings, finances, operations, methods or other activities; provided,
however, that the foregoing shall not apply to information that is of public record or is
generally known, disclosed or available to the general public or the industry generally.
Further, Executive shall not, directly or indirectly, remove or retain, without the express
prior written consent of MTLM, and upon termination of this Agreement for any reason
shall return to MTLM, any confidential figures, calculations, letters, papers, records,
computer disks, computer print-outs, lists, documents, instruments, drawings, designs,
programs, brochures, sales literature, or any copies thereof, or any information or
instruments derived therefrom, or any other similar information of any type or
description, however such information might be obtained or recorded, arising out of or in
any way relating to the business of MTLM or any subsidiary or affiliate of MTLM or
obtained as a result of his employment by MTLM or any subsidiary or affiliate of
MTLM. Executive acknowledges that all of the foregoing are proprietary information,
and are the exclusive property of MTLM. The covenants contained in this Section 11
shall survive the termination of this Agreement.

10

 

     12. Authority; Enforceability. MTLM has full corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement, the performance by MTLM of its obligations
hereunder have been duly and validly authorized by all necessary corporate action on the
part of MTLM. This Agreement has been duly executed and delivered by MTLM and
constitutes a valid and binding agreement of MTLM, enforceable against MTLM in
accordance with its terms, subject to applicable bankruptcy, insolvency and other similar
laws affecting the enforceability of creditors’ rights generally, general equitable
principles and the discretion of courts in granting equitable remedies.

     13. Goodwill. MTLM has invested substantial time and money in the
development of its products, services, territories, advertising and marketing thereof,
soliciting clients and creating goodwill. By accepting employment with MTLM,
Executive acknowledges that the customers are the customers of MTLM and its
subsidiaries and affiliates and that any goodwill created by Executive belongs to and shall
inure to the benefit of MTLM.

     14. No Duty to Mitigate. In the event that Executive’s employment terminates
hereunder, MTLM acknowledges and agrees that Executive has no duty to mitigate the
costs to MTLM with respect to any amounts payable hereunder to Executive.

     15. Notices. Any notice or request to be given hereunder to either party hereto
shall be deemed effective only if in writing and either (a) delivered personally or (b) sent
by certified or registered mail, postage prepaid, to the following addresses or to such
other address as either party may hereafter specify to the other by notice similarly served:

If to Executive:

Daniel W. Dienst

At the most recent address

in MTLM’s records

with a copy to:

Vedder Price

222 North LaSalle Street

Chicago, Illinois 60601

Attn: Philip L. Mowery

11

 

If to MTLM:

Metal Management, Inc.

325 North LaSalle Street

Suite 550

Chicago, Illinois 60610

Attn: Chief Financial Officer

with a copy to:

King & Spalding LLP

1185 Avenue of the Americas

New York, New York 10036

Attn: E. William Bates, II

     16. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of MTLM, whether by merger, sale of assets or
otherwise. This Agreement shall be binding upon and inure to the benefit of Executive’s
heirs.

     17. Attorneys’ Fees.

     (a) Upon receipt by MTLM of statement for legal services from the
attorneys representing Executive, MTLM shall reimburse Executive or to pay on
behalf of Executive the reasonable and necessary attorneys’ fees and associated
expenses incurred by Executive in connection with the negotiation of this
Agreement.

     (b) In the event suit or action is brought by any party under this
Agreement to enforce or construe any of its terms, the prevailing party shall be
entitled to recover, in addition to all other amounts and relief, its reasonable and
necessary attorneys’ fees and associated expenses incurred at and in preparation
for arbitration, trial, appeal and review.

     18. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York without reference to its choice-of-law
principles.

     19. Modification. No modification or waiver of any provision hereof shall be
made unless it is in writing and signed by both of the parties hereto.

     20. Scope of Agreement. This Agreement constitutes the whole of the
agreement between the parties on the subject matter, superseding all prior oral and
written conversations, negotiations, understandings, and agreements in effect as of the
date of this Agreement.

12

 

     21. Severability. To the extent that any provision of this Agreement may be
deemed or determined to be unenforceable for any reason, such unenforceability shall not
impair or affect any other provision, and this Agreement shall be interpreted so as to most
fully give effect to its terms and still be enforceable.

     22. Execution In Counterparts. This Agreement may be executed in any
number of counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date first above
written.

	 	 	 	 	 
	 	METAL MANAGEMENT, INC.

 	 
	 	By:  	/s/ Robert C. Larry
 	 
	 	 	Robert C. Larry 	 
	 	 	Executive Vice President, Finance and
Chief Financial Officer 	 
	 
	 	 	 
	 	 	/s/ Daniel W. Dienst
 	 
	 	 	Daniel W. Dienst 	 
	 	 	 

14

 

	 	 	 	 	 

EXHIBIT A

DIRECTORSHIPS

	1.	 	Director, Ryerson Inc., Chicago, IL (prospective service as a director previously
approved by the Board)
	 
	2.	 	Trustee, Kips Bay Boys & Girls Club, Bronx, NY
	 
	3.	 	Chairman, Newark Police Foundation, Newark, NJ

15

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