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Credit Facility Agreement

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Title:

Credit Facility Agreement

Entities:

Cm Advisers Family of Funds

Date:

2008

Size:

102KB total

Price:

$60

ID:

#3291277

► Loans ► Facility ► Credit Facility Agreements

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DATED 12th JUNE, 2007

PELEA SHIPPING LTD

(as Borrower)

- and -

DnB NOR BANK ASA

(as Lender)

US$42,000,000 SECURED

MULTI-CURRENCY REDUCING REVOLVING

CREDIT FACILITY AGREEMENT

STEPHENSON HARWOOD

One St. Paul?s Churchyard

London EC4M 8SH

Tel: 020 7329 4422

Fax: 020 7329 7100

Ref: 04.115

CONTENTS

		Page

1	Definitions and Interpretation	1

2	The Loan and its Purpose	10

3	Conditions of Utilisation	10

4	Advance	12

5	Currency	12

6	Repayment	13

7	Prepayment	14

8	Interest	15

9	Indemnities	18

10	Fees	21

11	Security and Application of Moneys	22

12	Representations	26

13	Undertakings and Covenants	29

14	Events of Default	36

15	Assignment and Sub-Participation	40

16	Set-Off	41

17	Payments	41

18	Notices	43

19	Partial Invalidity	44

20	Remedies and Waivers	44

21	Miscellaneous	44

22	Law and Jurisdiction	45

SCHEDULE 1: Conditions Precedent and Subsequent		47

	Part I: Conditions precedent	47

	Part II: Conditions subsequent	51

SCHEDULE 2: Calculation of Mandatory Cost		52

SCHEDULE 3: Form of Drawdown Notice		54

LOAN AGREEMENT

Dated: 12th JUNE, 2007

BETWEEN:

(1)	PELEA SHIPPING LTD, a company incorporated under the laws of the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the ?Borrower?); and

(2)	DnB NOR BANK ASA, acting through its office at 20 St. Dunstan?s Hill, London EC3R 8HY, England (the ?Lender?).

WHEREAS:

(A)	The Borrower is the registered owner of the Vessel which is registered under the flag of Cyprus.

(B)	The Lender has agreed to advance to the Borrower a secured multi-currency reducing revolving credit facility of up to forty two million Dollars ($42,000,000) to assist the Borrower in re-financing the post-delivery cost of the Vessel.

IT IS AGREED as follows:

1	Definitions and Interpretation

1.1

In this Agreement:

?Accounts? means the Operating Account and the Cash Collateral Account.

?Account Charge? means the deed of charge referred to in Clause 11.1.3.

?Administration? has the meaning given to it in paragraph 1.1.3 of the ISM Code.

?Annex VI? means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997).

?Assignment? means the deed of assignment referred to in Clause 11.1.2.

?Availability Termination Date? means three months prior to the Final Maturity Date or such later date as the Lender may in its discretion agree.

?Break Costs? means all sums payable by the Borrower from time to time under Clause 9.3.

?Broker? means any one of Arrow Chartering (UK), Braemer Seascope Group, Clarksons PLC and Fearnleys and ?Brokers? means more than one of them.

?Business Day? means a day (other than a Saturday or Sunday) on which banks are open for general business in New York and London and Tokyo (only if an amount in Japanese Yen is involved) and Zurich (only if an amount in Swiss Francs is involved) and any other financial centre which the Lender may consider appropriate for the operation of the provisions of this Agreement, and in the case of Euro, a day on which the Trans-European Automated Real Time Gross Settlement Express Transfer Payment System (TARGET) is operating.

?Cash Collateral Account? means the bank account to be opened (if and when required) in the name of the Borrower with the Lender and designated ?Pelea Shipping Ltd-Cash Collateral Account?.

?Converted? means actually or notionally (as the case may require) converted by the Lender at the rate at which the Lender, in accordance with its usual practice, is able in the London Interbank market to purchase the Permitted Currency in which any part of the Loan is to be denominated with the Permitted Currency in which the Loan is then denominated, on the second Business Day before the value date for that conversion pursuant to Clause 5, and the words ?Convert? and ?Conversion? shall be interpreted accordingly.

?Currency of Account? means, in relation to any payment to be made to the Lender under a Finance Document, the currency in which that payment is required to be made by the terms of that Finance Document.

?Deed of Covenants? means the deed of covenants referred to in Clause 11.1.1.

?Default? means an Event of Default or any event or circumstance specified in Clause 14.1 which would (with the expiry of a grace period, the giving of notice,

the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

?DOC? means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration under paragraph 13.2 of the ISM Code.

?Dollars? and ?$? each means available and freely transferable and convertible funds in lawful currency of the United States of America.

?Drawdown Date? means the date on which a Drawing is advanced under Clause 4.

?Drawdown Notice? means a notice substantially in the form set out in Schedule 3.

?Drawing? means any one amount advanced or to be advanced pursuant to a Drawdown Notice or, where the context permits, the amount advanced and for the time being outstanding and ?Drawings? means more than one of them.

?Earnings? means all hires, freights, pool income and other sums payable to or for the account of the Borrower in respect of the Vessel including (without limitation) all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of the Vessel.

?Encumbrance? means a mortgage, charge, assignment, pledge, lien, or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

?Euro? and ??? means the single currency of the Participating Member States.

?Event of Default? means any of the events or circumstances set out in Clause 14.1.

?Facility Period? means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been paid in full and the Security Parties have ceased to be under any further actual or contingent liability to the Lender under or in connection with the Finance Documents.

?Final Maturity Date? means the date falling twelve (12) years from the first Drawdown Date.

?Finance Documents? means this Agreement, the Security Documents and any other document designated as such by the Lender and the Borrower and ?Finance Document? means any one of them.

?Financial Indebtedness? means any obligation for the payment or repayment of money, whether present or future, actual or contingent, in respect of:

(a)

moneys borrowed;

(b)

any acceptance credit;

(c)

any bond, note, debenture, loan stock or similar instrument;

(d)

any finance or capital lease;

(e)

receivables sold or discounted (other than on a non-recourse basis);

(f)

deferred payments for assets or services;

(g)

any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

(h)

any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

(i)

any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(j)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above.

?IAPPC? means a valid international air pollution prevention certificate for the Vessel issued under Annex VI.

?Indebtedness? means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable to the Lender under all or any of the Finance Documents.

?Insurances? means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with the Vessel or her increased value or the Earnings and (where the context permits) all benefits under such contracts and policies, including all claims of any nature and returns of premium.

?Interest Payment Date? means each date for the payment of interest in accordance with Clause 8.7.

?Interest Period? means each period for the determination and payment of interest selected by the Borrower or agreed or selected by the Lender pursuant to Clause 8.

?ISM Code? means the International Management Code for the Safe Operation of Ships and for Pollution Prevention.

?ISM Company? means, at any given time, the company responsible for the Vessel?s compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.

?ISPS? Code? means the International Ship and Port Facility Security Code.

?ISPS Company? means, at any given time, the company responsible for the Vessel?s compliance with the ISPS Code.

?ISSC? means a valid international ship security certificate for the Vessel issued under the ISPS Code.

?LIBOR? means:

(a)

the applicable Screen Rate: or

(b)

(if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Lender in the London interbank market,

at 11.00 a.m. two (2) Business Days before the first day of the relevant Interest Period for the offering of deposits in Dollars or its equivalent in a Permitted Currency in an amount comparable to the Loan (or any relevant part of the Loan) and for a period comparable to the relevant Interest Period.

?Loan? means the aggregate amount advanced or to be advanced by the Lender to the Borrower under Clause 4 or, where the context permits, the amount advanced and for the time being outstanding.

?Management Agreement? means the agreement(s) for the commercial and/or technical management of the Vessel between the Borrower and the Managers.

?Managers? means Safety Management Overseas S.A., or such other commercial and/or technical managers of the Vessel nominated by the Borrower as the Lender may approve.

?Mandatory Cost? means the percentage rate per annum calculated by the Lender in accordance with Schedule 2.

?Margin? means zero point five seven five per cent (0.575%) per annum.

?Maximum Amount? means forty two million Dollars ($42,000,000) reduced from time to time in accordance with Clause 3.4 and/or Clause 7.4 and/or Clause 8.9.5.

?Mortgage? means the first priority statutory mortgage referred to in Clause 11.1.1 together with the Deed of Covenants.

?Mortgagees? Insurances? means all policies and contracts of mortgagees? interest insurance from time to time taken out by the Lender in relation to the Vessel.

?Operating Account? means the bank account opened in the name of the Managers with the Lender and designated ?Safety Management Overseas S.A.- Operating Account? with account number 60204001.

?Participating Member States? means any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

?Permitted Currency? means Japanese Yen, Swiss Francs and Euro.

?Reduction Date? means each date falling at consecutive six monthly intervals after the first Drawdown Date.

?Relevant Documents? means the Finance Documents, the Management Agreement and the Managers? confirmation specified in Part of Schedule 1.

?Requisition Compensation? means all compensation or other money which may from time to time be payable to the Borrower as a result of the Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).

?Screen Rate? means in relation to LIBOR, the British Bankers? Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or the service ceases to be available, the Lender may specify another page or service displaying the appropriate rate after consultation with the Borrower.

?Security Documents? means the Mortgage, the Deed of Covenants, the Assignment, the Account Charge, or (where the context permits) any one or more of them and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and ?Security Document? means any one of them.

?Security Parties? means the Borrower and any other person who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness, and ?Security Party? means any one of them.

?SMC? means a valid safety management certificate issued for the Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM Code.

?SMS? means a safety management system for the Vessel developed and implemented in accordance with the ISM Code.

?Swiss Francs? and ?SFr? means available and freely transferable and convertible funds in non-resident currency of Switzerland.

?Tax? means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

?Total Loss? means:

(a)

an actual, constructive, arranged, agreed or compromised total loss of the Vessel; or

(b)

the requisition for title or compulsory acquisition of the Vessel by any government or other competent authority (other than by way of requisition for hire); or

(c)

the capture, seizure, arrest, detention or confiscation of the Vessel by any government or by persons acting or purporting to act on behalf of any government, unless the Vessel is released and returned to the possession of the Borrower within one month after the capture, seizure, arrest, detention or confiscation in question.

?Vessel? means the approximately 82,000 dwt kamsarmax dry bulk carrier vessel ?PEDHOULAS LEADER? which was built in 2007 by Tsuneishi Shipbuilding Company in Japan and which is registered in the ownership of the Borrower under the laws and flag of Cyprus together with everything now or in the future belonging to her on board and ashore.

?Japanese Yen? and ?Y? means available and freely transferable and convertible funds in non-resident currency of Japan.

1.2

in this Agreement:

1.2.1

words denoting the plural number include the singular and vice versa;

1.2.2

words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not or governmental or quasi-governmental bodies or authorities and vice versa;

1.2.3

references to Recitals, Clauses and Schedules are references to recitals, clauses and schedules to or of this Agreement;