##### 



th
 BETWEEN
 1.
    
    EGNATIA BANK S.A.,a Banking Corporation, having its registered office at 4, Danaidon Street,
Thessaloniki, Greece, acting for the purposes of this Agreement through its office at 116
Kolokotroni Street, Piraeus 185 35, Greece and
 2.
    
    ADVENTURE FOUR S.A.a company duly incorporated under the laws of the Republic of The
Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Island,
Majuro, The Republic of the Marshall Islands
 WHEREAS
  IT IS HEREBY AGREED
 1. PURPOSE, DEFINITIONS AND INTERPRETATION
  In this Agreement unless the context otherwise requires the following terms shall have the
following meanings:
 Agreed Rate
 Agreement
 Applicable Interest Rate
 Bank
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Banking Day
 Borrower ADVENTURE FOUR S.A.
 Commitment
 Corporate Guarantor(s)
 Default Rate
 Dollars and $
 Drawdown Date
 Drawdown Notice
 Earnings
 2




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Encumbrance
 Environmental Affiliate
 Environmental Approval
 Environmental Claim
 Environmental Law
 Event of Default or Default
 Expenses
 (a)
    
    all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature,
(including, without limitation, taxes, repair costs, fees of Banks Advisors and/or
Consultants, registration fees and insurance premiums, crew wages, repatriation expenses and
seamens pension fund dues) suffered, incurred, charged to or paid or committed to be paid by
the Bank in connection with the exercise of the powers referred to in or granted by any of the
Security Documents or otherwise payable by any Security Party in accordance with the terms of
any of the Security Documents;
 (b)
    
    the expenses referred to in Clause 23.
 (c)
    
    interest on all such losses, liabilities, costs, charges, expenses, damages and
outgoings from the date on which the same were suffered, incurred or paid by the Bank
until the date of receipt or recovery thereof at a rate per annum calculated in accordance
with Clause 8.4.
 3




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Flag State
 Group
 Guarantor(s)
 Indebtedness
 Interest Payment Date
 Interest Period
 ISM Code
 ISPS Code
 Latest Permissible Drawdown Date th
 LIBOR
  4




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Loan
 Manager
 Margin
 Material Adverse Effect
 Material of Environmental Concern
 Minimum Value
 Month (i) (ii)
 Operating Account
 Personal Guarantor(s)
 5




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Relevant Jurisdiction
 Relevant Party
 Relevant Ship
 Repayment Dates
 Repayment Instalment
 Retention Account
 Security Documents
 Security Party
 Shareholder
 Subsidiary
 Taxes
 Total Loss
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(a)
    
    in case of an actual total loss at the actual date and time the Vessel was lost or if such
date is not known on the date on which the Vessel was last reported;(b)
    
    in the case of constructive on compromised or arranged total loss at the date and time notice
of abandonment of the Vessel is given to her insurers;(c)
    
    in the case of capture, seizure, confiscation or compulsory acquisition on the date of such
occurrence, unless it is reasonably expected that the Vessel will be soon restored absolutely
free to the Borrower always provided however that in fact she will be so restored within sixty
(60) days thereafter at the latest.(d)
    
    in the case of detention, arrest, blockade or loss of Vessels possession and/or use because
of any reason whatsoever upon the date of such occurrence, unless it is reasonably expected
that the Vessel will be soon restored absolutely free to the Borrower, always provided however
that in fact she will be so restored within sixty (60) days thereafter at the latest.
 Vessel
 In this Agreement
 (a)
    
    unless the context otherwise requires, words denoting the singular number shall include the
plural and vice versa;(b)
    
    references to persons include bodies corporate, bodies unincorporate and individuals.(c)
    
    references to assets include property, rights and assets of every description;(d)
    
    references to any document are to be construed as references to such document as amended or
supplemented from time to time; and(e)
    
    references to any enactment include re-enactments, amendments and extensions thereof.
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2. DISBURSEMENT
 2.1.
    
    Amount
  2.2.
    
    Drawdown
  (a)
    
    a Drawdown Notice in the form set out in Schedule III not later than 10 a.m. two (2) Banking
Days before the proposed Drawdown Date of the Commitment.(b)
    
    confirmation of the terms of the proposed Insurances (as defined in the Schedule II) and
notification of the identities and of the names of the insurers and of the proposed
Classification Society not later than 10 a.m. two (2) Banking Days before the proposed
Drawdown Date.(c)
    
    the documents and evidences referred to in Schedule I (Conditions Precedent).
  2.3.
    
    Termination of Commitment
  2.4.
    
    Number of Advances
  3. CONDITIONS PRECEDENT
 3.1.
    
    Corporate Documents and Evidences
  8




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(a)
    
    the Bank shall have received, not later than three Banking Days before the day on which the
Drawdown Notice for the Commitment is given, the documents and evidence specified in Part 1 of
Schedule I in form and substance satisfactory to the Bank;(b)
    
    the Bank shall have received, not later than three Banking Days before the day on which the
Drawdown Notice for the Commitment is given, or when this is not possible, simultaneously with
such drawdown, the documents and evidence specified in Part 2 of Schedule I in form and
substance satisfactory to the Bank;
 3.2.
    
    Continuing conditions precedent
  3.3.
    
    General Conditions
  (a)
    
    confirmations from Insurance Brokers and Club Managers that the Vessel will be fully
insured on the Drawdown Date in accordance with the requirements in Clause 4.3. (e) and that
the Banks interest as Mortgagee is duly noted.(b)
    
    the Security Documents duly executed and when appropriate duly registered with the
appropriate registry (save for the Mortgage which, if not delivered upon drawdown, will be
delivered to the Bank simultaneously with its registration).(c)
    
    evidence that the Operating Account and the Retention Account have been duly opened and all
mandate forms, signature cards and authorities have been duly executed and delivered to the
Bank.(d)
    
    There has been no material adverse change in the financial condition and operation of the
Security Parties or in their ability to perform their obligations under the Security Documents
to which they are a party or a material adverse change of circumstances.
 3.4.
    
    Further Documents
  9




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3.5.
    
    Waiver of conditions precedent
  4. REPRESENTATIONS AND WARRANTIES
 4.1.
    
    Continuing representations and warranties
  (a)
    
    Due incorporation.each of the Security Parties are duly incorporated and validly existing in good standing
under the laws of their Relevant Jurisdictions and have power to carry on their
businesses as they are now being conducted and to own their property and other assets;(b)
    
    Corporate powerthe Borrower has power to borrow the Commitment and the Borrower and each of
the other Security Parties has power to execute and deliver and perform its
obligations under the Security Documents to which it is or is to be a party; all
necessary corporate, shareholder and other action has been taken to authorise the
execution, delivery and performance of the same.(c)
    
    Binding obligationsthe Security Documents constitute or will, when executed, constitute valid
and legally binding obligations of the relevant Security Parties enforceable in
accordance with their respective terms;(d)
    
    No conflict with other obligationsthe execution and delivery of, the performance of their obligations under, and compliance
with the provisions of 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 of the Security Parties is subject, (ii) conflict with, or
result in any breach of any of the terms of, or constitute a default under, any agreement
or other instrument to which any of the Security Parties is a party or is subject or by
which it or any of its property is bound.(e)
    
    No litigationthere are no claims or actions pending or to the knowledge of any officer of the Security
Parties, threatened and no litigation, arbitration or administrative proceeding is taking
place, pending or, to the knowledge of any officer of the Security Parties, is threatened
against any of such Parties and/or Subsidiaries, which, if adversely determined could
have a Material Adverse Effect or could affect the validity or enforceability of any of
the Security Documents.
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(f)
    
    No filings requiredsave for the registration of the Mortgage under the laws of the relevant Flag State, it
is not necessary to ensure the legality, validity, enforceability or admissibility in
evidence of any of the Security Documents, that they or any other instrument be, filed,
registered or enrolled in any court, public office or elsewhere or that any tax be paid
in any Relevant Jurisdiction on or in relation to the Security Documents and/or to their
enforcement.(g)
    
    Choice of lawthe choice of English law to govern the Security Documents, except the Mortgage which is
governed by the law of the flag of the Vessel, the Personal Guarantees and the Pledge
which are governed by the laws of Greece, and the submission by the Security Parties to
the non-exclusive jurisdiction of the Courts of Piraeus are valid and binding;(h)
    
    No immunitynone of the Security Parties is entitled to immunity on the grounds of sovereignty or
otherwise from any legal action or proceeding (which shall include, without limitation,
suit, attachment prior to judgement, execution or other enforcement) and in case any such
immunity will be granted to them the Security Parties concerned will unreservedly waive
as against the Bank all their respective rights and/or entitlement to such immunity.(i)
    
    Consents obtainedevery consent, licence or approval of, or registration with or declaration to, public
bodies or authorities or courts required by any Security Party in connection with the
execution, delivery, validity, enforceability or admissibility in evidence of each of the
Security Documents or the performance by each Security Party of its obligations under the
Security Documents has been obtained or made and is in full force and effect;(j)
    
    Certification of beneficial shareholdingall of the shares in each of the Corporate Security Parties are beneficially owned by the
persons set out in the Certificate of beneficial shareholding to be delivered to the
Bank.(k)
    
    Financial statementsThe financial statements of the Security Parties which have been or will be delivered to
the Bank are complete and accurate, have been prepared in accordance with generally
accepted principles of good accounting practice and fairly present the financial
condition of the Security Parties as at the date thereof and the results of their
operations.(1)
    
    No adverse changesThere has been no material adverse change in the financial condition of the Security
Parties or in their ability to perform their obligations under the Security Documents
since the date of the above financial statements.
 11




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4.2.
    
    Further Representations and Warranties
  (a)
    
    No default under any Indebtednessnone of the Security Parties nor any of their Subsidiaries are (nor would with
the giving of notice or lapse of time or the satisfaction of any other condition be)
in breach of or in default under the present or any other agreement relating to
indebtedness to which they are a party or by which they may be bound;(b)
    
    Informationthe information, exhibits and reports furnished by any Security Party to the Bank are
true and accurate in all material respects, do not omit material facts and all reasonable
enquiries have been made to verify the facts and statements contained therein;(c)
    
    No Taxesno Taxes e.t.c. are imposed by withholding or otherwise on any payment to be made by any
Security Party under the Security Documents or are imposed on or by virtue of the
execution or delivery by the Security Parties of the Security Documents or any other
document or instrument to be executed or delivered under any of the Security Documents;
 4.3.
    
    Representations concerning the Vessel
 (a)
    
    The Borrower will be on the Drawdown Date and during the life of this Agreement the sole
legal owner of the Vessel.(b)
    
    The Vessel will conform to existing international regulations, and will be registered as Ship
under the laws and flag of her Flag State.(c)
    
    Neither the Vessel, nor her Earnings or Insurances nor any part thereof will, on the drawdown
of the Commitment, or thereafter during the course of this Agreement, be subject to any
Encumbrances other than Encumbrances in favour of the Bank, neither to any participation
entitlement of any other except the Borrower.(d)
    
    The Borrower shall keep the Vessel insured at all times during the Loan period, while
navigating or in port, to the Banks full satisfaction. Such insurances shall be in form and
substance satisfactory to the Bank and with Underwriters acceptable to it in accordance with
the provisions of Schedule II and shall include as a minimum:
 i.
    
    Hull and Machinery (disbursements and/or an increased value sum
insured) for an amount not less than the market value of the Vessel and in any case
not less than 125% of the amount of the Loan.ii.
    
    War Risks for the above amount.iii.
    
    Protection and Indemnity (with FD and D cover).iv.
    
    Mortgagees Interest Insurance (MII) to be effected and maintained by
the Bank at Borrowers expense for an amount not less than 110% of
 12




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the amount of the Loan.v.
    
    Mortgagees Additional Perils (Pollution) (MAPI) (if required by the Bank
at its sole discretion) to be effected and maintained by the Bank on account of the
Bank at Borrowers expense for an amount not less than 110% of the amount of the Loan
 (e)
    
    there are and there will be no commissions, rebates, premiums or other repayments by or to or
on account of the Borrower, any other Security Party other than as disclosed to the Bank by
the Borrower in writing.4.4.
    
    (a)Compliance with Environmental Laws and Approvals
  (i)
    
    the Borrower, the Corporate Guarantors and the other Relevant Parties and
to the best of the Borrowers knowledge and belief their respective Environmental
Affiliates have complied, and will comply during the tenure of this Agreement with
the provisions of all Environmental Laws applicable at any area the Vessel is
sailing in or anchored at.(ii)
    
    the Borrower and the other Relevant Parties and to the best of the
Borrowers knowledge and belief their respective Environmental Affiliates have
obtained all Environmental Approvals and are and will be during the tenure of this
Agreement in compliance with all such Environmental Approvals; and(iii)
    
    neither the Borrower, nor the Corporate Guarantors, nor any other
Relevant Party nor to the best of the Borrowers knowledge and belief any of their
respective Environmental Affiliates has received notice of any Environmental Claim
that the Borrower or any other Relevant Party or any such Environmental Affiliate is
not in compliance with any Environmental Law or any Environmental Approval;
 (b)
    
    No Environmental Claimsexcept as may already have been disclosed by the Borrower and acknowledged in writing by
the Bank, there is no Environmental Claim pending or, to the best of the Borrowers
knowledge and belief, threatened against the Borrower or the Vessel or any other Relevant
Party or any other Relevant Ship or to the best of the Borrowers knowledge and belief
any of their respective Environmental Affiliates;(c)
    
    The Borrower shall not trade within any area if they do not comply with all Environmental
Laws applicable in that area, and that they shall require that none of their Environmental
Affiliates trade within any area if the Environmental Affiliate cannot or does not comply with
all Environmental Laws applicable in that area which relate to the Vessel or her operation or
her carriage of cargo;(d)
    
    The Borrower shall upon the request of the Bank, conduct and complete all reasonably
necessary investigations, studies, sampling, audits and
 13




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testing required in connection with any known (or threatened) Release of Materials of
Environmental Concern which would have a Material Adverse Effect; and(e)
    
    The Borrower shall, promptly upon the occurrence of any of the following events, provide to
the Bank a certificate specifying in detail the nature of such event and the proposed response
of the Borrower or the Environmental Affiliate concerned:
 (i)
    
    the receipt by the Borrower or any Environmental Affiliate of any
Environmental Claim which would have a Material Adverse Effect; or(ii)
    
    any (or any threatened) Release of Materials of Environmental
Concern which would have a Material Adverse Effect,
 and upon the written request by the Bank, the Borrower shall submit to the Bank, at
reasonable intervals, a report updating the status of any occurrence of an Environmental
Claim or a Release of Materials of Environmental Concern, which would have a Material
Adverse Effect.
 4.5.
    
    ISM Code
 ,
 (a)
    
    at all times comply, and be responsible for compliance by itself and by the Vessel, with the
ISM Code;(b)
    
    at all times ensure that:
 (i)
    
    the Vessel has a valid Safety Management Certificate;(ii)
    
    the Vessel is subject to a safety management system which complies with
the ISM Code; and(iii)
    
    it has a valid Document of Compliance on board the Vessel to which the
Documents of Compliance relates,
  (c)
    
    promptly notify the Bank of any actual or threatened withdrawal of an applicable Safety
Management Certificate or Document of Compliance;(d)
    
    promptly notify the Bank of the identity of the person ashore designated for the purposes of
paragraph 4 of the ISM Code and of any change in the identity of that person; and
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(e)
    
    promptly notify the Bank of the occurrence of any accident or major non-conformity requiring
action under the ISM Code.
 4.6.
    
    ISPS Code
  (a)
    
    at all times comply, and be responsible for compliance by the Vessel with the ISPS Code;(b)
    
    at all times ensure that:
 (i)
    
    the Vessel has a valid Ship Security Certificate;(ii)
    
    the Vessel is subject to a security system and any associated security
equipment of the Vessel which complies with the ISPS Code; and(iii)
    
    it has an approved Ship Security Plan on board the Vessel
  4.6. Repetition of representations and warranties
 (a) (b)
 5. ARRANGEMENT FEE
 5.1.
    
    Arrangement Fee
  15




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5.2.
 6. EVIDENCE
  7. REPAYMENT
 th
   16




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8. INTEREST AND INTEREST PERIODS
 8.1.
    
    Interest Rate
  8.2.
    
    Interest Period
  8.3.
    
    Determination of Interest Periods
  (a)
    
    the initial Interest Period shall commence on the Drawdown Date of the Commitment and each
subsequent Interest Period shall commence on the last day of the immediately preceding
Interest Period.(b)
    
    if the last Interest Period would overrun the Final Repayment Date, such Interest Period
shall end on such Repayment Date. Should an Interest Period determined in accordance with the
provisions of this Clause overrun one or more Repayment Dates, so many additional Interest
Periods will be specified as the number of the Repayment Dates being overrun by the above
Interest Period. Each of such additional Interest Periods will be of a duration ending at the
corresponding Repayment Date and for an amount equal to the instalment due on such Date, while
the above overrunning Interest Period shall be for the remaining balance of the Loan after the
deduction of the amount(s) of the additional Interest Period(s) ending on the Repayment
Date(s) falling within the said overrunning Interest Period.(c)
    
    if the Borrower fails to specify the duration of an Interest Period in accordance with the
provisions of Clause 8.2. and this Clause 8.3. such Interest Period shall have a duration of
three Months or such other period as shall comply with this Clause 8.3.;(d)
    
    if the Bank determines that the duration of an Interest Period specified by the Borrower in
accordance with Clause 8.2. is not readily available, then
 17




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that Interest Period shall have such duration as the Bank after having consulted with the
Borrower may determine.
 8.4.
    
    Default Rate
  8.5.
    
    Notification
  8.6.
    
    Non availability
 (a)
    
    If and whenever, at any time prior to the commencement of any Interest Period, the Bank shall
have determined any of the following facts (which determination in the absence of manifest
error shall be conclusive):
 (i)
    
    that adequate and fair means do not exist for ascertaining LIBOR during
such Interest Period; or(ii)
    
    that deposits in Dollars are not available to the Bank in the London
Interbank Market in the ordinary course of business in sufficient amounts it is
impracticable for the Bank to fund or to continue to fund the Loan in Dollars.(iii)
    
    that LIBOR for that Interest Period will not adequately reflect the cost
of funding the Loan for that Interest Period.
  18




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(b)
    
    During the period of 30 days after any Determination Notice has been given by the
Bank under Clause 8.6.(a), the Bank shall certify an alternative basis (the Substitute
Basis) for maintaining the Loan. The Substitute Basis may (without limitation) include
alternative interest periods, alternative currencies or alternative rates of interest but
shall include a margin above the cost of funds to the Bank equivalent to the Margin. Each
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 Bank notifies the Borrower that none of the circumstances specified in
Sub-clause 8.6.(a) continues to exist whereupon the normal interest rate fixing provisions
of the Agreement shall apply.(c)
    
    In any event, during the thirty (30) days following the giving of a Determination
Notice, the Borrower and the Bank shall negotiate in good faith in order to arrive at the
Substitute Basis for the Bank to fund or continue to fund the Loan (or the relevant part
thereof) during such Interest Period. If within such thirty (30) day period the
Substitute Basis to fund or to continue to fund the Loan (or the relevant part thereof) is
agreed upon, then such Substitute Basis shall take effect in accordance with its terms.
If the Borrower and the Bank fail to agree on such Substitute Basis within such thirty
(30) day period and such circumstances are continuing at the end of such thirty day
period, then the Bank shall set a Substitute Basis as per Clause 8.6. (b). If the
circumstance shall continue at the end of such interest period, the procedure in this
Clause 8.6 (c) shall be repeated. If the Borrower shall not agree with such rate then the
Borrower may give not less than fifteen (15) Business Days irrevocable notice of
prepayment to the Bank in which case the commitment hereunder of the Bank shall thereupon
be cancelled and, if the Loan is outstanding, the Borrower shall prepay the Loan on the
first Business Day after such period in accordance with the terms of this Agreement and
the obligations of the Bank shall thereupon terminate.
 9. PREPAYMENT
 9.1.
    
    Voluntary Prepayment
 (a)
    
    The Borrower may prepay part or all of the Loan at any Interest Payment Date relating to the
whole of the Loan provided that they will have given a ten (10) days prior written notice to
the Bank, specifying the amount to be prepaid on such date, in one or integral multiples of
the instalment amount.
 (b)
    
    The Borrower may also at any other time prepay the Loan or a part thereof upon ten (10) days
prior written notice provided that it will also prepay all sums that the Bank shall determine
to be its loss and cost sustained because of the prepayment within an Interest Period or
Periods including but not limited to payment of interest breakage costs (if any) and of such
additional amounts (if any) to compensate the Bank for the cost of redeploying funds as a
result of such prepayment as well as any loss of Interest up to the end
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of the then current Interest Period or Periods in respect of the whole amount of the Loan
outstanding
 (c)
    
    In the case of a prepayment due to a refinancing from another bank or financial institution
during the first year of the term of the Loan Agreement an amount of 1% shall be paid to the
Bank on any amounts prepaid.
 9.2.
    
    Conditions
  9.2.1.
    
    The interest accrued to the Loan to the date of prepayment and any other additional sums due
hereunder and/or under any of the other Security Documents will be paid to the Bank.9.2.2.
    
    Every notice of prepayment shall be effective on actual receipt by the Bank, shall be
irrevocable, shall oblige the Borrower to make such prepayment on the date specified and shall
specify the amount to be prepaid, which shall be not less than the sum of an instalment amount
or a higher integral multiple thereof. Any amount so prepaid may not be re-borrowed under this
Agreement.9.2.3.
    
    Any prepayment on Interest Payment Dates of less than the whole of the Loan will be applied
by the Bank towards repayment of the Repayment Instalments and the Balloon Payment in inverse
order of their maturity.
 9.3.
    
    Compulsory Prepayment
  (a)
 (b)
   10. PAYMENTS ACCOUNTS & CALCULATIONS
 10.1.
    
    Not set off or counterclaim and no deductions
 (a)
    
    The Borrower acknowledges that in performing its obligations under this Agreement, the Bank
will be incurring liabilities to third parties in relation
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to the funding of amounts to the Borrower, such liabilities matching the liabilities of
the Borrower to the Bank and that it is reasonable for the Bank to be entitled to receive
payments from the Borrower gross on the due date in order that the Bank is put in a
position to perform its matching obligations to the relevant third parties. Accordingly,
all payments to be made by the Borrower under any of the Security Documents shall be made
in full, without any set-off or counterclaim whatsoever and free and clear of any
deductions or withholdings, in Dollars on the due date (for value on the day on which
payment is due) to the account of the Bank (with a direct tested telex advise to the
Bank) or to such other account at such other bank in such place as the Bank may from time
to time specify for this purpose.(b)
    
    If at any time the Borrower is required to make any deduction or withholding in respect of
Taxes or otherwise from any payment due under any of the Security Documents the sum due from
the Borrower in respect of such payment shall be increased to the extent necessary to ensure
that after the making of such deduction or withholding the Bank receives on the due date for
such payment a net sum equal to the sum which it would have received had no such deduction or
withholding been required to be made. The Borrower shall indemnify the Bank against any losses
or costs incurred by the Bank by reason of any failure of the Borrower to make any such
increased payment to the Bank on account of any deduction or withholding or by reason of any
increased payment not being made on the due date for such payment. The Borrower shall within
15 days after each deduction forward to the Bank official receipts and any other proof
evidencing the amounts paid or payable in respect of any deduction or withholding as
aforesaid. The obligations of the Borrower under this provision shall remain in force
notwithstanding the repayment of the Loan.(c)
    
    Payments by the Borrower shall be considered to be made as of the date on which the Bank
receives correctly authenticated advice of the credit of such account provided that such
advice is received at a time of day when the Bank is able in accordance with its usual
practice to process and utilize such funds on such day, failing which such payment shall be
considered to be made as of the next Banking Day following receipt of such advice.
 10.2.
    
    Payments by the Bank
  10.3.
    
    Calculation
  21




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##### 



11.
UNLAWFULNESS AND INCREASED COSTS
 11.1.
    
    Unlawfulness(a)
    
    If it is or becomes contrary to any law or regulation for the Bank to disburse the Loan or to
maintain the Commitment or the Loan, or to fund the Loan or to claim or receive any amount
payable to it hereunder, the Bank shall give notice to the Borrower whereupon (a) the
Commitment shall be reduced to zero and (b) the Borrower shall be obliged to prepay the Loan
either forthwith or on a future specified date not being later than the latest date permitted
by the relevant law or regulation, or, if such date is not provided, within 40 days from the
notice of the Bank, together with interest accrued to the date of prepayment and all other
sums payable by the Borrower under the Security Documents.(b)
    
    If circumstances arise which would result in a Notification under Clause 11.1. then, without
in anyway limiting the rights of the Bank under Clause 11.1., the Bank shall use reasonable
endeavours to transfer each obligations, liabilities and rights under the Security Documents
to another office or financial institution not affected by the circumstances.11.2.
    
    Increased Cost
  (a)
    
    The cost to the Bank of making available the Commitment or maintaining or funding the Loan is
increased; or(b)
    
    The amount payable to the Bank or the effective return to the Bank under any of the Security
Documents, is reduced; or(c)
    
    The basis of taxation of payments to the Bank of principal or of interest on any amounts
advanced by it is changed;
  22




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##### 



12.
SECURITY
 12.1.
    
    Security Documents
  (a)
    
    A duly registered First Priority Panamanian Maritime Mortgage over the Vessel providing on
the basis of the provisions of the applicable law the highest degree of security for the Bank
(the Mortgage);(b)
    
    A first priority General Assignment of all the Insurances (including the Mortgagees Interest
Insurance) and Earnings of the Vessel in form and substance satisfactory to the Bank and
notices of assignment and acknowledgments thereof (the Assignment of Insurances and
Earnings);(c)
    
    Specific Assignments of the benefit of all charters of more than twelve (12) Months duration
in respect of the Vessel and respective notices and acknowledgments thereof (the Assignment
of Charter)(d)
    
    A Corporate Guarantee from the Manager and each of the Corporate in form and substance
satisfactory to the Bank (the Corporate Guarantee(s)).Guarantors The Corporate Guarantees will be given by the Corporate Guarantors others
than the Manager upon condition that they shall be activated and become effective only
in case that the Shareholder is not listed in the NASDAQ or the AMEX or any other major
U.S. Stock Exchange by the 30th September 2005.(e)
    
    A Personal Guarantee from each of the Personal Guarantors in
form and substance
satisfactory to the Bank (the Personal Guarantee(s)The Corporate Guarantee of the Manager and the Personal Guarantees of the Personal
Guarantors will be replaced by a Managers Letter of Undertaking and a Corporate Guarantee
of the Shareholder when and in the case the Shareholder is listed in the NASDAQ or the
AMEX or any other major U.S. Stock Exchange.(f)
    
    A Pledge on the Retention Account in form and substance satisfactory to the Bank (the
Pledge);
 23




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13.
COVENANTS
 
 13.1.
    
    Information Covenants13.1.1.
    
    Furnish the Bank, in form and substance satisfactory to the Bank, with annual, combined
financial statements of the Group within 120 days after the end of the financial year
concerned commencing as of 31st December 2004 prepared in accordance with generally accepted
accounting principles consistently applied;13.1.2.
    
    Provide the Bank from time to time as the Bank may reasonably request and in form and
substance satisfactory to the Bank with any information on the financial condition,
commitments and operations of the Group.13.1.3.
    
    Promptly inform the Bank of any occurrence which came to the knowledge of the Borrower
which might adversely affect the ability of the Borrower or any other Security Party to
perform their respective obligations under this Agreement and/or any of the other Security
Documents and of any Event of Default forthwith upon becoming aware thereof;13.1.4.
    
    Promptly inform the Bank of all major financial developments in the Group such as new
loans, refinancing/restructuring of existing loans, new acquisitions and sales, contracts for
any employment of vessels and for any other borrowed monies.13.2.
    
    Due Performance13.2.1.
    
    Use the Loan exclusively for the purpose specified in this Agreement;13.2.2.
    
    Ensure that all obligations under this Agreement and the other Security Documents will be
duly and punctually performed.13.2.3.
    
    Pay to the Bank on demand any sum of money which is payable to the Bank under this
Agreement and the other Security Documents but in respect of which it is not specified in any
other Clause when it is due and payable;13.2.4.
    
    Accept that a Certificate of the Bank or a statement of account executed by two authorised
officers of the Bank or an Extract of the Books of the Bank certified by an officer of the
Bank shall (save for manifest error) be conclusive evidence of the amount due under this
Agreement and shall be final and binding on all parties hereto;13.2.5.
    
    Upon request by the Bank from time to time provide such information and evidence to the
Bank as the Bank would require, demonstrating
 24




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compliance with the covenants and warranties set forth in this Agreement and any other
Security Document.13.3.
    
    Financial Exposure13.3.1.
    
    Incur no further debt and grant no guarantee to and/or in favour of anybody without the
prior written consent of the Bank, except in the normal course of the Vessels operations.13.3.2.
    
    Not give any loans or credits or advances to any person, or entity without the prior
written consent of the Bank;13.3.3.
    
    Not declare or pay any dividends or other distribution without the prior written consent of
the Bank;13.3.4.
    
    Except as permitted by this Agreement and the other Security Documents not pay out any
funds to any company or person but only in connection with the administration of the Borrower,
the operation and/or the repair(s) of the Vessel;13.3.5.
    
    Not transfer, sell or otherwise dispose any of their real or personal property, assets or
rights, whether present or future, without the prior written consent of the Bank or allow any
part of its undertaking, property, assets or rights, whether present or future, to be
mortgaged, charged, pledged, used as a lien or otherwise encumbered without the prior written
consent of the Bank;13.3.6.
    
    Ensure that the Indebtedness of the Borrower and of any other Security Party to the Bank
hereunder will not be subordinated in priority of payment to any other present or future
claim. Clause 13.3.6. shall not apply to any Security Party which is a shipowner.13.4.
    
    Business and Corporate Structure13.4.1.
    
    Not change the nature, organisation and conduct of the business of the Borrower and/or any
other corporate Security Party as shipowners and/or managers of vessels as the case may be;13.4.2.
    
    Not merge or consolidate with any other company or other legal entity;13.4.3.
    
    On demand deliver or cause to be delivered to the Bank official certificates from the
relevant authority confirming that the Borrower and any other corporate Security Party is in
good standing in their countries of incorporation;13.4.4.
    
    Ensure that there is no change in the Directors and Officers of the Borrower and of any
other corporate Security Party and moreover ensure that no change shall be made directly or
indirectly in the ownership, beneficial ownership, control, management or business of the
Borrower or any other corporate Security Party without the prior written consent of the Bank.
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It is agreed between the parties to this Agreement, that the Shareholder may be
listed in the NASDAQ or the AMEX or any other major U.S. Stock Exchange. In case that
the Shareholder is listed in the NASDAQ or the AMEX or any other major U.S. Stock
Exchange a change may be made directly or indirectly in the beneficial ownership of the
Shareholder without the prior written consent of the Bank.
 13.5.
    
    Obligation to maintain the Security Value13.5.1.
    
    At all times the Borrower will procure that the aggregate value of the Vessel as determined
in accordance with Clause 13.5.4. and other security to be granted to the Bank pursuant to
this Clause (the Security Value) is not less than the Minimum Value at any time.13.5.2.
    
    If the Security Value is less than the Minimum Value at any time the Borrower will within
40 days of a request by the Bank and in order to secure the Indebtedness on such terms as may
be acceptable to the Bank:
 i.
    
    prepay a proportionate part of the Loan; and/orii.
    
    procure for or grant to the Bank such other additional security as the
Bank shall expressly approve for the purpose of this Clause 13.5.so that after such prepayment or grant of other security, the Security Value is not less
than the Minimum Value.If the Security Value shall at any time exceed the Minimum Value, and the Borrower shall
have previously provided further security to the Bank pursuant to clause 13.5.2(ii), the
Bank shall, as soon as reasonably practicable after notice from the Borrower to do so and
subject to it being indemnified to its reasonable satisfaction against the cost of doing
so, release any such further security specified by the Borrower provided that the Bank is
satisfied that, immediately following such release, the Security Value will equal or
exceed the Minimum Value.
 13.5.3.
    
    As far as Clause 13.5.2.(ii) is concerned :
 i.
    
    cash provided by way of security shall be valued in Dollars at its
principal amount;ii.
    
    any other security shall be valued on such basis as the Bank shall
reasonably determine in its discretion from time to time; andiii.
    
    there shall be deducted from any value or valuation the amount which is
owing and might become owing and which is secured on the asset concerned by any
prior or equal ranking Security Interest (other than in favour of the Bank to secure
the Indebtedness).iv.
    
    cash deposits and/or any other security acceptable to the Bank it will be
provided in a way and manner also acceptable to the Bank.
 26




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13.5.4.
    
    At least once every year but not more than twice a year the Borrower undertakes to have at
its own cost the Vessel valued with or without physical inspection (as the Bank may require)
in Dollars, on the basis of sale for prompt delivery free of Encumbrances in favour of the
Bank for cash at arms length on normal commercial terms as between a willing seller and a
willing buyer by an independent shipbroker selected by or acceptable to the Bank and reporting
to the Bank. Such valuation shall be made on the basis of the value of the Vessel charter
free. The Borrower agrees to accept the valuation made as aforesaid as conclusive evidence of
the market value of the Vessel at the date of valuation. The Borrower will supply to the Bank
and to the above shipbrokers such information as such shipbrokers shall require.13.6.
    
    Covenants concerning the Vessel13.6.1.
    
    Ensure that the Vessel will maintain her present ownership, management, control and
ultimate beneficial ownership;It is agreed between the parties to this Agreement, that the Shareholder may be
listed in the NASDAQ or the AMEX or any other major U.S. Stock Exchange . In case that
the Shareholder is listed in the NASDAQ or the AMEX or any other major U.S. Stock
Exchange a change may be made directly or indirectly in the beneficial ownership of the
Vessel13.6.2.
    
    Ensure that the Vessel is and will remain properly certified in respect with the ISM Code
and in compliance with the ISO 9001 and the ISPS code when applicable and moreover that the
Vessel shall be classed +100A1 or to a similar standard with Lloyds Register of Shipping, or a
classification society member of IACS and that the Vessel will remain in class free of all
overdue recommendations, notations or average damage affecting class and provide the Bank on
demand with copies of all ISM, ISPS and/or all class and/or trading certificates of the
Vessel.13.6.3.
    
    Ensure that at all times the Vessel is managed by the Manager or by such company as may be
approved in writing by the Bank and that such company is and will remain ISM certified and
that it shall maintain at all times an organisation and personnel which in the reasonable
opinion of the Bank is adequate to provide sufficient management, agency, financial,
secretarial and other services for the Vessel.13.6.4.
    
    Maintain all Insurances of the Vessel and comply with all insurance requirements specified
in this Agreement (including in particular Schedule II) and in case they fail to maintain the
Vessel and/or such other property so insured, the Borrower hereby, for the purpose of serving
the interest of the Bank, irrevocably authorises the Bank and grant to it the right to effect
the insurances of the Vessel and/or of the property as provided for in Schedule II in the
amount and in terms acceptable to the Bank from time to time at the cost and on behalf of the
Borrower. The Bank will have the right but not the obligation to effect all or any of such
insurances at the
 27




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cost of the Borrower and such cost shall consist Expenses in the meaning of the Clause 1;13.6.5.
    
    Supply copies of all cover notes, certificates of entry, insurance policies and documents
and furnish details of all insurances contemplated by Schedule II and/or contracted to the
Bank. The Bank may submit all such insurance documents for examination to an insurance
consultant nominated by the Bank. The Bank will be at liberty to reasonably decide on the
adequacy and the compliance of the cover with the provisions of the Security Documents
including Schedule II and its decision shall be final and binding on the Borrower. The cost
including Value Added Tax of such insurance consultant shall be considered as Expenses;13.6.6.
    
    Promptly provide a consultant nominated and appointed by the Bank to monitor the collection
of claims of whatsoever nature with whatever information and documentation the Bank shall
require. All the cost including Value Added Tax in respect of the appointment of such
consultant shall be considered as Expenses;13.6.7.
    
    Not grant or permit any charge lien or other Encumbrance to be imposed upon the Vessel or
otherwise dispose of any of their rights under any charterparty or contract of affreightment
relating to the Vessel or any other earnings of the Vessel;13.6.8.
    
    Ensure that the Vessel is maintained and trades in conformity with the laws of her flag, of
her owning company or of the nationality of the officers, or crew, and in conformity with the
requirements of the Insurances and nothing is done or permitted to be done which could
endanger the flag of the Vessel, or her free ownership and operation or her Insurances;13.6.9.
    
    Always comply with all the covenants provided for in the Mortgage;13.6.10.
    
    Not without the prior written consent of the Bank enter into a charterparty, contract of
affreightment, agreement or related document in respect of the employment of the Vessel (i)
for a period of more than twelve (12) Months or (ii) below the market rate prevailing at the
time when the Vessel is fixed in or on terms which are not in accordance with the commercial
practice prevailing at the relevant time or (iii) on demise charterparty;13.6.11.
    
    Execute and deliver to the Bank within fifteen (15) days of signing of any charter, the
duration of which is to be for a period, directly or by extension of more than twelve (12)
Months, (a) a specific assignment of such charter in form and substance satisfactory to the
Bank and (b) a notice of any such assignment addressed to the relevant charterer and endorsed
with an acknowledgement of receipt by the relevant charterer all in form and substance
satisfactory to the Bank;13.6.12
    
    Carry out all banking operations in connection with the Vessel through the Banks Piraeus
Branch
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13.6.13
    
    Maintain with the Banks Piraeus Branch average credit balances of USD 500,000 (including
any amounts standing to the credit of the Retention Account)13.6.14.
    
    Notify the Bank forthwith:(a)
    
    of any Environmental Claim for an amount exceeding USD 200,000 made against either Vessel
and/or the Borrower and/or any Security Party.(b)
    
    upon becoming aware of any incident which may give rise to an Environmental Claim and to keep
the Bank advised in writing of the owners response to such Environmental Claim on such
regular basis and in such detail as the Bank shall require.(c)
    
    The Vessel is and will be during the life of this Agreement operationally seaworthy and in
every way fit for service.13.7.
    
    Alternative SecurityEnsure and procure that in the event, that the Shareholder is listed in the NASDAQ or
the AMEX or any other major U.S. Stock Exchange, the existing Corporate Guarantee given
by the Manager and the Personal Guarantees will be replaced by the following Security
Documents duly executed and, where required properly registered in favour of the Bank
at the time as required by the Bank as security for the due repayment of all sums from
time to time payable to the Bank(a)
    
    Managers Letter of Undertaking in form and substance satisfactory to the Bank(b)
    
    Corporate Guarantee of the Shareholder in form and substance satisfactory to the
Bank13.8.
    
    Validity of securities13.8.1.
    
    Ensure and procure that all approvals or consents and/or any other steps required for the
validity, enforceability and legality of this Agreement and the other Security Documents and
for the performance thereof by the Borrower and any other Security Party are appropriately
taken and are maintained in full force and effect.13.8.2.
    
    Ensure and procure that, unless and until directed by the Bank otherwise (i) all the
Earnings of the Vessel shall be paid to the Operating Account and (ii) the persons from whom
the Earnings are from time to time due are irrevocably instructed to pay them to the Operating
Account in accordance with the provisions hereof and of the relevant Security Documents;13.8.3.
    
    Pay all Taxes, and other governmental charges when the same fall due, except to the extent
that the same are being contested in good faith by appropriate proceedings and adequate
reserves have been set aside for their payment if such proceedings fail;
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13.8.4.
    
    From time to time at the request of the Bank execute and deliver to the Bank or procure the
execution and delivery to the Bank of all such documents as shall be deemed desirable at the
sole discretion of the Bank for giving full effect to this Agreement, and for perfecting,
protecting the value of or enforcing any rights or securities granted to the Bank under the
Security Documents and any other documents executed pursuant hereto or thereto.13.8.5.
    
    The covenants specified in this Clause are inserted solely for the benefit of the Bank and
may be waived in whole or in part and with or without conditions by the Bank without
prejudicing the right of the Bank to require fulfilment of such covenants at such time and
manner as specified by the Bank.13.9.
    
    Admission, and warranties of the Security Parties as regards their liability(a)
    
    The giving of the Corporate and the Personal Guarantee by the Guarantors is to the commercial
benefit of such Guarantors in that the Guarantors have close financial cooperation and mutual
assistance with the Borrower and that by lending their support to the Borrower through such
Guarantees they further their own business interests within the scope of their constitutional
documents;(b)
    
    The liability of the Borrower and of the other Security Parties shall in all cases, whether
so expressed to be or not, be joint and several and each representation and warranty and each
covenant and agreement made or given or to be made or given by any one of them will be
considered as made or given by them all jointly and severally;(c)
    
    The Borrower further represents that none of the Security Parties shall be exonerated and its
liability hereunder shall not be lessened or impaired by any time, indulgence or relief being
given by the Bank to any other Security Party or by the variation, compromise, renewal or
release of or refusal or neglect to perfect or enforce any right, remedies or securities
against any of the Borrower or any other Security Party, by anything done or omitted which but
for this provision might operate to exonerate any other Security Parties;(d)
    
    The obligations of the Borrower shall not be affected by any legal limitation, disability,
incapacity or other circumstances relating to any other Security Party, whether or not known
to the Bank, by any invalidity in or irregularity or unenforceability of the obligations of
such other Security Party under any of the Security Documents or otherwise or by any change in
the constitution of, or any amalgamation or reconstruction of any Security Party or of the
Bank.
 14.
EVENTS OF DEFAULT
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14.1.
    
    Non Performance of Obligations14.1.1.
    
    If the Borrower and/or any other Security Party fail to pay any sum due hereunder and/or
under the other Security Documents when due, or in the case of any sum payable on demand,
within seven (7) Banking Days of such demand;14.1.2.
    
    If the Borrower and/or any other Security Party fail to obtain and/or maintain the
Insurances (as defined in Schedule II) or if any insurer in respect of such Insurances becomes
entitled to cancel the insurances or to disclaim liability;14.1.3.
    
    If the Borrower and/or any other Security Party default in the due performance and/or
observance of any covenant, term, obligation or undertaking under this Agreement and/or any of
the other Security Documents (other than those referred to in sub-Clauses 14.1.1. and 14.1.2.
hereinabove). In case such default is in the opinion of the Bank, capable of remedy, if it
will continue unremedied for fourteen (14) Banking Days after its occurrence.14.2.
    
    Representations incorrect
  14.3.
    
    Events affecting the Borrower and/or any other Security Party14.3.1.
    
    If a creditor of the Borrower or of any other Security Party attaches or takes possession
of, or a distress execution, sequestration or other process is levied or enforced upon or sued
against the whole or any part of the property of the Borrower and/or any other Security Party
and it is not discharged within fourteen (14) Banking days;14.3.2.
    
    If the Borrower and/or any other Security Party is found bankrupt or insolvent or any order
is made by any competent court or resolution passed by the Borrower and/or any other Security
Party or petition presented for the winding-up or dissolution of the Borrower and/or any other
Security Party or for the appointment of a liquidator, trustee, receiver, administrator or
conservator of any part of the undertakings, assets, rights or revenues of the Borrower and/or
any other Security Party;14.3.3.
    
    If the Borrower and/or any other Security Party suspend payment of their debts or are (or
are reasonably deemed to be) unable to or admit inability to pay their debts as they fall due
or propose or enter into any composition or other arrangement for the benefit of creditors
generally or proceedings
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are commenced in relation to the Borrower and/or any other Security Party relating to
reconstruction or readjustment of debts;14.3.4.
    
    If a meeting is convened by any corporate Security Party for the purpose of passing any
resolution to purchase, reduce or redeem any of its share capital;14.3.5.
    
    If a material part of the undertakings, assets, rights or revenues of the Borrower and/or
any other Security Party are seized, nationalised, expropriated or compulsorily acquired by or
under the authority of any government;14.3.6.
    
    If any event occurs or proceeding is taken with respect to the Borrower and/or any other
Security Party in any jurisdiction to which anyone of them is subject which has an effect
equivalent or similar to any of the events mentioned in Clauses 14.3.1. to 14.3.5.;14.3.7.
    
    If the Borrower and/or any other Security Party suspend or threaten to suspend or cease to
carry on its business;14.3.8.
    
    If there occurs, in the reasonable opinion of the Bank, a materially adverse change in the
financial condition of the Borrower and/or any Security Party;14.3.9.
    
    If any other event occurs not mentioned in this Clause 14.3. or circumstances arise which,
in the opinion of the Bank, is likely adversely to affect either (i) the ability of the
Borrower and/or any other Security Party to perform all or any of their obligations under or
otherwise to comply with the terms of this Agreement and/or any of the other Security
Documents, or (ii) the security created by this Agreement and/or any of the other Security
Documents;14.3.10.
    
    If there is any change in the beneficial ownership of the shares in the Borrower and/or
any other Security Party as declared to the Bank prior to the execution hereof or as
represented to the Bank in the Certificate of beneficial shareholding given to the Bank
pursuant to Schedule I, Part 1.14.3.11.
    
    If any of the individuals providing a Personal Guarantee to the Bank shall die and the
Borrower shall fail to provide (an) alternative guarantor(s) acceptable to the Bank in its
discretion within twenty one (21) days;14.3.12.
    
    If any of the events specified in Clauses 14.3.1. to 14.3.11 occurs (amended as
appropriate) with respect to any member of the Group which is not a Security Party and in the
reasonable opinion of the Bank the ability of the Security Parties (or any of them) to perform
all or any of their obligations under or otherwise to comply with the terms of this Agreement
and the other Security Documents may be materially and adversely affected thereby.14.3.13.
    
    If any debt of any Security Party is not paid when due or any debt of any Security Party
becomes due and payable prior to the date when it would otherwise have become due (unless as a
result of the exercise by the
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relevant Security Party of a voluntary right of prepayment), or any creditor of any
Security Party becomes entitled to declare its claim due and payable, or any facility or
commitment available to any Security Party is withdrawn, suspended or cancelled by
reason of any default (however described) of such Security Party;14.4.
    
    Events affecting the Security Documents14.4.1.
    
    If this Agreement or any of the other Security Documents shall at any time and for any
reason become invalid or unenforceable or otherwise cease to remain in full force and effect,
or if the validity or enforceability of any of the Security Documents shall at any time and
for any reason be contested by any party thereto (other than the Bank), or if any such party
shall deny that it has any, or any further, liability thereunder or shall otherwise repudiate
any of the Security Documents or do or cause or permit to be done any act or thing evidencing
an intention to repudiate this Agreement or any of the other Security Documents or it becomes
impossible or unlawful for the Borrower and/or any other Security Party to fulfil any of its
covenants and obligations contained in this Agreement or any of the other Security Documents
or for the Bank to exercise the rights or any of them vested in it thereunder or otherwise;14.4.2.
    
    If any Encumbrance in respect of any property or assets (or part thereof) which belong to
the Security Parties (or any of them) becomes enforceable.14.5.
    
    Events concerning the Vessel14.5.1.
    
    If the Vessel either:(a)
    
    becomes a Total Loss or(b)
    
    suffers damage or is involved in an accident which in the opinion of the Bank may result in
being subsequently considered to be a Total Loss or which may otherwise reduce the security of
the Bank.
  14.5.2.
    
    If the registration of the Vessel under the laws and flag of the relevant Flag State is
cancelled or terminated without the prior written consent of the Bank.14.5.3.
    
    If the Flag State of the Vessel becomes involved in hostilities or civil war or there is a
seizure of power in such Flag State by unconstitutional means if, in any such case, such event
could in the opinion of the Bank reasonably be expected to have a material adverse effect on
the security constituted by any of the Security Documents;
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14.6.
    
    Environmental Events
  14.7.
    
    Consequences of Default14.7.1.
    
    At any time after the occurrence of any Event of Default, the Bank may, without prejudice
to any other of its rights,(a)
    
    by notice to the Borrower declare that the obligation of the Bank to make the Commitment
available shall be terminated, whereupon the Commitment shall be reduced to zero forthwith
and/or(b)
    
    by notice to the Borrower (the Notice of Default) declare that the Loan and interest and
all sums payable under this Agreement and the other Security Documents have become due and
payable, or payable on demand, whereupon the same shall immediately, or in accordance with the
terms of such notice, become due and payable jointly and severally by the Borrower and the
other Security Parties, without any further demand protest or notice or any other procedure
from the Bank,(c)
    
    put into force and exercise all or any of the rights, powers and remedies possessed by it
under this Agreement and/or under any other Security Document.14.7.2.
    
    If an event occurs in respect of the Borrower or any of the other Security Parties of the
type described in Clauses 14.3.2. to 14.3.6. (except in the case that such events mentioned in
Clause 14.3 relate to only a part of undertakings, assets, rights or revenues which in the
opinion of the Bank does not affect the ability of the Borrower and/or the Security Parties to
perform their obligations under this Agreement and/or the Security Documents) the obligation
of the Bank to make the Commitment available shall terminate immediately and all amounts under
sub-clause 14.7.1.(b) above shall become immediately due and payable without the need for any
demand from the Bank or any notice to the Borrower or other action of any kind whatsoever.
 15. APPLICATION OF PROCEEDS OF SALE OR OF INSURANCE
  34




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FIRST
    
    in or towards the payment of Expenses and all sums
other than principal or interest which may be owing
to the Bank under this Agreement or the other
Security DocumentsSECOND
    
    in or towards the payment of any arrears of interest owing to the Bank
hereunderTHIRD
    
    in or towards the payment of any other indebtedness
or sums of money due to the Bank under this Agreement
and/or the other Security DocumentsFOURTH
    
    in or towards the repayment of the Loan (whether the same is due and payable or not)FIFTH
    
    the balance (if any) shall be paid as the Borrower shall direct in writing to the Bank.
 16. ACCOUNTS
 16.1.
    
    Loan Account
  16.2.
    
    Set-off
  16.3
    
    Operating Account16.3.1.
    
    The Borrower undertakes with the Bank that it will:
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(a)
    
    on or before the Drawdown Date open with the Bank the Operating Account and(b)
    
    procure that all moneys payable to the Borrower in respect of the Earnings or other
receivables regarding the Vessel shall, unless and until the Bank directs to the contrary be
paid to the Operating Account free from Encumbrances (save for Encumbrances in favour of the
Bank); Provided however that if any moneys paid to the Operating Account are payable in a
currency other than Dollars, the Bank shall convert such moneys into Dollars at the Banks
spot rate of exchange at the relevant time for the purchase of Dollars 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 Dollars with such currency.(c)
    
    The Operating Account shall bear interest at the rate quoted by the Bank to its customers for
comparable deposits in Dollars and for such periods as the Bank may determine, such interest
to be credited to the Operating Account at intervals the Bank usually pays interest on
deposits.(d)
    
    The Borrower hereby assigns to the Bank as a continuing security for the payment of the
Indebtedness the Operating Account and all moneys from time to time standing to the credit
thereof including any interest from time to time accrued and accruing thereon, such assignment
to take effect immediately upon the occurrence of an Event of Default, but always subject to
the provision of Clause 16.3.3.(b).16.3.2.
    
    Withdrawals.So long as no Default shall have occurred the Borrower shall be entitled to withdraw from the
Operating Account any amount. Provided however that if in the opinion of the Bank there will be
insufficient sums standing to the credit of the Operating Account to meet principal falling due on
the next Repayment Date or interest due on the next Interest Payment Date or any other moneys which
are due and payable to the Bank, the Bank shall be entitled to refuse any withdrawal from the
Operating Account.16.3.3.
    
    Application of Operating Account(a)
    
    The Bank shall be entitled (but not obliged) at any time to deduct from the balance for the
time being standing to the credit of the Operating Account all other moneys which may fall due
to be paid to the Bank under the terms of the Security Documents or otherwise howsoever in
connection with the Loan.(b)
    
    At any time after the occurrence of an Event of Default, the Bank may, without notice to the
Borrower, apply all moneys then standing to the credit of the Operating Account (together with
interest from time to time accruing or accrued thereon) in or towards satisfaction of any sums
due to the Bank under the Security Documents in the manner specified in Clause 15.
 36




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16.3.4.
    
    Relocation of Operating Account
  16.4.
    
    Retention Account16.4.1.
    
    The Borrower on or before the Drawdown Date will open with the Bank the Retention Account.(a)
    
    For so long as any moneys are owing under the Security Documents, the Borrower shall pay to
the Retention Account, at monthly intervals commencing with a first payment on the date
falling one Month after the Drawdown Date and at monthly intervals thereafter (each such day
being hereinafter called Monthly Retention Date) such sum (each sum being hereinafter called
Monthly Retention Amount) as shall be the aggregate of:
 i.
    
    the quotient of the Repayment Instalment amount from time to time falling
due on the each time next Repayment Date divided by the number of the months
intervening between the immediately previous and the such next Repayment Date,
pursuant to Clause 7; andii.
    
    the quotient of the amount of interest from time to time falling due in
respect of the Loan or each part thereof on the each time next Interest Payment Date
divided by the number of months of the relevant Interest Period.
 (b)
    
    The Bank is hereby irrevocably authorised by the Borrower to debit at every Monthly Retention
Date the Operating Account with the Monthly Retention Amounts and to credit them to the
Retention Account.(c)
    
    In case that any Earnings paid to the Operating Account relate to a period of employment of
the Vessel longer than one (1) Month, then upon receipt of such Earnings the Retention Account
shall be funded by an amount equal to so many Monthly Retention Amounts or part thereof as
shall correspond to the longer period to which the said Earnings relate or any amount as may
be determined by the Bank.16.4.2.
    
    Unless and until there shall occur an Event of Default all Monthly Retention Amounts
credited to the Retention Account together with interest from time to time accruing or at any
time accrued thereon shall be set off and applied by the Bank (and express and irrevocable
authority is hereby given by the Borrower to the Bank so to set off and apply the same) upon
each Repayment Date and upon each Interest Payment Date in or towards payment of the Repayment
Instalment then falling due and/or (as the case may be) the amount of interest then due. Each
such set off
 37




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and application by the Bank shall constitute a payment in or towards satisfaction of the
corresponding payment obligations of the Borrower 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 set off application by the Bank is insufficient to meet the
same.16.4.3.
    
    Any amount for the time being standing to the credit of the Retention Account shall bear
interest at the rate quoted by the Bank to its customers for deposits in Dollars for such
period as the Bank may determine and for an amount comparable with the amount for the time
being standing to the credit of the Retention Account.16.4.4.
    
    Upon the occurrence of an Event of Default or at any time thereafter the Bank will set off
and apply all sums standing to the credit of the Retention Account including accrued interest
(if any) in the manner specified in Clause 15 without notice to the Borrowers.
 17. INDEMNITY
 17.1.
    
    Miscellaneous Indemnities
  (a)
    
    the Loan not being drawndown hereunder whether before or after the giving of the Drawdown
Notice in accordance with the provisions of Clause 2.2. hereof for any reason whatsoever
including but not limited to the refusal of the Bank to allow the disbursement of the
Commitment because of the non fulfilment of the Conditions Precedent contained in Schedule I
or any of them(b)
    
    any default in payment by the Borrower of any sum under any of the Security Documents(c)
    
    the occurrence of any other Event of Default(d)
    
    the prepayment or repayment 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.
  17.2.
    
    Currency
 38




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17.3.
    
    Environmental Indemnity
  17.4.
    
    Communications Indemnity
      39




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##### 



18. REMEDIES AND WAIVERS
 18.1.
    
    Remedies Modifications
  18.2.
    
    Cumulative Remedies
  18.3.
    
    Event of Default
  19. LEGAL IMMINENCE
 th
 40




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19.1.
    
    Over Other Security Documents
  20. COUNTERPARTS
  21. INVALIDITY
  22. ASSIGNMENT
  (a)
    
    The Borrower and any other parties to the Security Documents may not assign any rights and/or
obligations hereunder and/or any other Security Document or any documents executed pursuant
thereto without the prior written consent of the Bank and(b)
    
    The Bank may at any time after prior written notice to the Borrower of not less than fifteen
(15) days assign all or any part of its rights or transfer all or any part of its rights
benefits and/or obligations arising or accruing under this Agreement and or any other Security
Document or any documents executed pursuant to the Agreement and/or any other Security
Document. The Borrower undertakes, immediately on being requested to
 41




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do so by the Bank and at the cost of the Bank, to enter into such documents as may be
necessary or desirable to assign or transfer to the Assignee or Transferee all or the
relevant part of the Banks interest in the Agreement and/or the other Security Documents
and all relevant references in this Agreement to the Bank shall thereafter be construed
as a reference to the Bank and/or its Assignee or Transferee (as the case may be) to the
extent of their respective interests.
The Bank may disclose to a prospective Assignee, Transferee or to any other person who
may propose entering into contractual relations with the Bank in relation to this
Agreement such information about the Borrower as the Bank shall consider appropriate
without the consent of the Borrower.(c)
    
    The Bank shall be at liberty to transfer the Loan to any other branch or branches it
maintains in Greece or abroad.
 23. EXPENSES
 (a)
    
    The Borrower shall reimburse the Bank immediately upon demand for all expenses including but
not limited to the fees and expenses of the Legal Counsels of the Insurance Experts and/or any
other Experts the Bank may use e.t.c. as well as all legal fees and disbursements printing
costs and other out of pocket expenses of whatsoever nature incurred by the Bank
 (i)
    
    in the negotiation preparation execution and where relevant registration
of any of the Security Documents and of any amendment or extension of or granting of
any waiver or consent hereunder and/or any other Security Document(ii)
    
    in contemplation of, or the enforcement of or preservation of any rights
under any of the Security Documents or otherwise in respect of moneys owing under
any of the Security Documents(iii)
    
    all fees and expenses payable pursuant to the present Clause shall be
paid together with value added tax or any other tax (if any) properly chargeable
thereon. Any value added tax or other tax chargeable in respect of any services
supplied by the Bank under this Agreement shall be paid in addition to any sum
agreed to be paid hereunder.
 (b)
    
    The Borrower shall pay all Taxes the Security Documents are or at any time may be subject to,
and shall indemnify the Bank against any liabilities costs claims and expenses resulting from
any omission to pay or delay in paying any such duties levies, dues and/or taxes.23.1.
    
    If the Bank pays any of the amounts mentioned above as payable by the Bank, the Borrower
shall reimburse same to the Bank together with interest at the rate referred to in Clause 8.4.
from the date of Banks actual disbursement or loss to the date of payment to the Bank. The
expenses are payable on demand.
 42




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24. NOTICE
 24.1.
    
    Address
 freebulk@otenet.gr
 24.2.
    
    Time of Delivery
  25. GOVERNING LAW AND JURISDICTION
 (a)
    
    This Agreement shall be governed by and construed in accordance with English Law. The
Mortgage shall be governed by the law of the flag of the Vessel. The Personal Guarantees and
the Pledge shall be governed by the laws of Greece.(b)
    
    For the exclusive benefit of the Bank, the Borrower hereby irrevocably submits to the
non-exclusive jurisdiction of the Courts of Piraeus. Further, the Borrower agrees that any
summons, writ or other legal process issued against any of the Security Parties either in
England or Greece or in any other country as the case may be, shall be served upon the
Borrower in Greece c/o Mr John Hadjis at 6, Bouboulinas Street, 185 35 Piraeus , Greece, fax
no +30 210 4225300 or his successors, who is hereby authorised by the Borrower, acting on its
own behalf to accept such service, which shall be deemed to be good service on the Borrower.
The foregoing shall not limit the right of the Bank to start proceedings in any
 43




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other country or to serve process in any other manner permitted by law. The Borrower
hereby waives any objections as to the inconvenience of any forum elected by the Bank.(c)
    
    If it is decided by the Bank that any such proceedings should be commenced in any other
country, then any objections as to the jurisdiction or any claim as to the inconvenience of
the forum is hereby waived by the Borrower all of whom the Borrower confirms that they are
representing and binding, and it is agreed and undertaken by the Borrower to accept service of
legal process and not to contest the validity of such proceedings as far as the jurisdiction
of the court or courts involved is concerned.
 44




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Schedule I  Documents and evidence required as conditions precedent to the Loan being made
 Part 1
 (a)
    
    Constitutional documentscopies, legalized by a lawyer and certified by an officer of the relative corporate
Security Party as true, complete and up to date copies of all documents which contain or
establish or relate to the constitution and organization of such Security Party as well
as of any corporate shareholder of such Security Party (or correspondingly similar copies
in case of a different Company).(b)
    
    Corporate authorisationscopies of the relevant minutes containing the unanimous resolutions of the directors and
shareholders of each corporate Security Party approving the Security Documents to which
such Security Party is, or is to be, party and authorizing the signature, delivery and
performance of such Security Partys obligations thereunder, as well as copies of the
resolutions of the Corporate Shareholders to participate at and/or to approve the
relative meeting of the shareholders of the respective Security Party. All copies of the
meetings and resolutions of the Directors and Shareholders of each such Security Party to
be certified (in a certificate dated not earlier than five Banking Days prior to the date
of this Agreement) by the Secretary of such Security Party as:
 (i)
    
    being complete true and correct;(ii)
    
    being duly passed at meetings duly convened and held of the directors of
such Security Party where the directors were present in person at and throughout the
said meetings and the resolutions were passed unanimously;(iii)
    
    not having being amended, modified or revoked; and(iv)
    
    being in full force and effect
 and duly legalised by the appropriate consul as well as the originals or certified copies
of any Powers of Attorney issued by any Security Party pursuant to such resolutions duly
legalized by the appropriate consul.(c)
    
    Official Certificate of Good Standing of each corporate Security Party and of the corporate
shareholders thereof.(d)
    
    Certificate of the legal shareholding of each corporate Security Party and of the corporate
shareholders thereof stating the number of shares held by each shareholder, issued by the
appropriate authority or, if there is no such possibility issued and signed by the respective
Secretary.
 45




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(e)
    
    Evidence of the ultimate beneficial shareholding and number of shares held by each
shareholder of each corporate Security Party and of the corporate shareholders in form and
substance satisfactory to the Bank.(f)
    
    Certificate of Incumbencya list of directors and officers of each corporate Security Party and of every corporate
shareholder specifying the names and positions of such persons, certified (in a
certificate dated no earlier than five Banking Days prior to the date of this Agreement)
by an appropriate government authority, or if this is not possible, by the Secretary of
such Security Party, or of the corporate shareholder to be true, complete and up to date
and duly legalized by the appropriate consul.(g)
    
    A certificate, on behalf of each Security Party by a Director having been authorised to
execute same duly legalized by the appropriate consul on which the documents mentioned
sub-sections (a), (b), (c), (d), (e) and (g) of this Part 1 of Schedule I will have been
attached, reading substantially as follows:
 CERTIFICATE
  1.
    
    Attached hereto and marked A is a true and complete copy of the
Articles of Incorporation and of all documents relating to the
constitution and organization of the Company (and of all amendments
thereof) which are in full force and effect as of the date hereof.2.
    
    Attached hereto and marked B is a true and complete copy of the
Minutes of a Meeting of the Directors of the Company held in ....................... on
the .......... day of ............. 2005 at which Meeting all the Directors of the
Company were present in person and acted throughout such meeting having
been convened and notice thereof having been duly waived by all persons
entitled thereto and the Resolutions passed at the Meeting were passed
unanimously and have not been varied or revoked and remain in full force
and effect as of the date hereof.3.
    
    Attached hereto and marked C is a true and complete copy of the
Minutes of the Meeting of the Shareholders of the Company held in
...................... on the ............ day of .................. 2005 at which meeting bearer share
certificates representing all of the authorised and issued shares of the
Company were tabled and voted throughout by the holders thereof (or, as
the case may be, the registered shareholders of all of the authorised
and issued shares of the Company were present in person or by proxy and
acted throughout) such meeting having been convened and notice thereof
having
 46




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been duly waived by all persons entitled thereto and the
Resolutions passed at such meeting were passed unanimously and have not
been varied or revoked and remain in full force and effect and
unamended as of the date hereof.4.
    
    Attached hereto-marked D is a true and complete copy of the Power
of Attorney approved by the Directors and Shareholders of the Company at
the Meetings described in paragraphs, 2 and 3 above.5.
    
    The Directors and Officers of the Company are, as at the date hereof,
and were, as at the date of the Meeting of the Directors, the following,
being all the Directors and Officers of the Company:
 Director/PresidentDirector/SecretaryDirector/Treasurer
 6.
    
    The legal shareholder(s) of the Company is/are, as at the date
hereof, and was/were, as at the date of the Meetings of the
Shareholders, that referred to in the copy of the minutes of the Meeting
of Shareholders attached hereto and marked C.7.
    
    The name, title and specimen signature of each person who has
executed or will execute any of the Security Documents (as such term is
defined in the Loan Agreement referenced in the Resolutions certified in
item 2 above) and/or any other document incidental hereto and thereto on
behalf of our Company are as set forth below, and each such person is on
the date hereof and thereunto duly authorised.
 Name and Title
    
    Specimen Signature
 8.
    
    I confirm that I am duly authorised by the Company to execute this
certificate.If any certification contained herein ceases to be true and correct at
any time prior to the execution and delivery of the documentation
referenced in the Resolutions in paragraph 2 above, I will immediately
give to the Bank notice to that effect.All terms defined in the Loan Agreement and used but not defined herein
have the meanings given to them in such Agreement.
  47




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(name of the Security Party)by:Title:
 (g)
    
    Opinionsan opinion on the validity of the Security Documents addressed to the Bank by special
legal advisers approved by it and having particular knowledge of the national law by
which the validity of the relative Security Document may be affected.(h)
    
    Further opinionsan opinion of the legal adviser to the Borrower as to all matters of law as the Bank
shall deem relevant and any further legal or other expert opinion as it may require.(j)
    
    Borrowers process agenta copy, certified as a true copy by the Borrowers solicitors of a letter from the
Borrowers agent for receipt of service of proceedings accepting its appointment under
the Security Documents in which it is or is to be appointed as such agent; and(k)
    
    Any other Security Parties process agenta copy, certified as true copy by the Borrowers solicitors of a letter from any of the
Security Parties agent for receipt of service of proceedings referred to in the Security
Documents accepting its appointment, and(l)
    
    Insurance Opinionan opinion from insurance consultants approved by the Bank, on the insurances effected in
respect of the Vessel.(m)
    
    Arrangement Feeevidence that the Arrangement Fee has been paid in full.
 48




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Documents and evidence required as conditions precedent and
subsequent
 Part 2
 Evidence concerning the Vessel
 (a)
    
    Charter free valuation of the Vessel as at the date determined by the Bank prepared on the
basis specified in the Agreement.(b)
    
    Evidence that the Vessel has been duly registered in the ownership of her owner under the
laws and flag of her shipping registry free from any Encumbrances (including those on her
earnings, insurances, and requisition compensation) save for those in favour of the Bank and
that the Mortgage on the Vessel has been recorded in the respective Registry with first
priority.(c)
    
    Evidence that the Vessel has been surveyed at the cost of the Borrower by surveyors appointed
and/or approved by the Bank and a copy of the surveyors report has been delivered to it.(d)
    
    Certificate of Confirmation of Class for hull and machinery confirming that the Vessel is
classed in the highest Class of a Classification Society acceptable to the Bank and remains
free of recommendations notations affecting class The Bank should be notified of the
Classification Society with which the Vessel will be or is (as the case may be) classed at
least fifteen days prior to the Drawdown Date.(e)
    
    Due authorisation enabling the Bank to obtain copies of class records or other information at
its discretion from the Classification Society regarding the Vessel and a confirmation from
the classification Society that it will forward to the Bank all the quarterly listings issued
in respect with the Vessels condition.(f)
    
    Photocopies of the Vessels current and unexpired trading certificates.(g)
    
    Evidence that the Vessel has been or will -on drawdown- be insured in accordance with the
insurance requirements provided for in the Schedule of this Agreement with Underwriters,
Insurance Companies, P & I and War Risks Associations which meet with the approval of the
Bank. Such evidence shall include Hull and Machinery Marine risks full cover notes, stating
all terms and conditions listing the security involved and incorporating the Loss Payable
Clause and in the case of War Risks and Protection and Indemnity cover the Certificate of
Entry and/or cover notes if appropriate.(h)
    
    Letters of Undertaking for the Vessel acceptable to the Bank and issued by Hull and Machinery
brokers and/or War Risks Associations or brokers and Protection & Indemnity Associations
approved by the Bank for the Vessel acceptable to the Bank.
 
 49




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(i)
    
    Certified true photocopies of any charterparty or other contract of employment of Vessel
which will be in force on the Drawdown Date.(j)
    
    Certified true photocopies of the management agreement relating to the Vessel.(k)
    
    Evidence that the Manager and the Vessel has obtained certification of compliance with ISM
code and ISPS code.(l)
    
    Evidence that the Manager has obtained certification from YEN as to the management of the
Vessel (GREECE LANGUAGE)(m)
    
    Government Gazette in relation to the Manager regarding the establishment of an office under
law 89/67, 378/78 and a recent certificate from YEN as to the operation and legal
representation of the office established in Greece (GREECE LANGUAGE)(n)
    
    In case the Bank deems it necessary to have evidence of the title of the previous owner of
the Vessel, the Borrower will provide to it the evidence the Bank may require including the
documents mentioned in sub-sections (b), (d) and (e) above.
 Evidence concerning newly purchased vessels
 (a)
    
    A copy of the M.O.A for the Vessel certified as true and complete by the legal counsel of the
Borrower;(b)
    
    Photocopy of the notarially certified and legalized Bill of Sale transferring title in the
Vessel to the Borrower free of all encumbrances, maritime liens and other debts whatsoever as
well as a copy of the Protocol of delivery and acceptance of such Vessel and of the Commercial
Invoice.(c)
    
    Confirmations by the Insurers of the Vessel addressed to the Bank that they will issue
letters of undertaking and endorse notices of assignment and loss payable Clauses on the
Insurances, as soon the Vessel will be registered in the ownership of the Borrower.(d)
    
    Evidence in the form of a certificate from the Vessels Registry proving the Sellers title
to the Vessel free of any Encumbrances, debts or claims of any nature whatsoever;(e)
    
    Duly certified copies of the corporate documentation of the Seller proving the legal
existence of the Seller and the due authorization of the sale of the Vessel.(f)
    
    Evidence that the ten per cent (10%) deposit in respect of the Vessel and all other sums of
money (other than the Loan) required to be paid by the respective Borrower to the Seller
pursuant to the M.O.A. have been duly paid.
 50




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(g)
    
    As a condition subsequent authenticated copy of a Transcript of Registry issued by the
Registrar of Ships proving the registration of the Vessel in the ownership of the Buyer and
the recording of the Mortgage on first priority. Such evidence must be produced to the Bank
not later than three (3) Banking Days after the Drawdown Date.
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Schedule II
 INSURANCE REQUIREMENTS
    Approved Brokers:
 Excess Risks:
 Insurances:
 Insurers
 Loss Payable Clause:
 Owners:
 Protection and Indemnity Risks:
 52




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Required Amount
 War Risks:
 B. INSURANCES TO BE EFFECTED AND MAINTAINED
  a. Hull and Machinery
  b. Increased Value
  c. Loss of Earnings and/or Loss of Hire and/or Freight Interest
  d. War Risks
  e. Protection and Indemnity
  53




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f. Pollution Liability
  g. USA Pollution Risk
  h. FD & D Cover
  i. Mortgagees Interest
  j. Mortgagee Rights
  k. Other
  l. Port Risks
  54




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C. TERMS AND OBLIGATIONS FOR EFFECTING AND MAINTAINING INSURANCES
  1.
 2.
 3.
 4.
 5.
 (a)
    
    procure and ensure that the Approved Brokers and/or Insurers as the case may be, shall send
to the Bank a Letter of Undertaking in respect of the Insurances in form and substance
satisfactory to the Bank and a Notice of Cancellation as per Paragraph D hereinbelow. Said
Letter of Undertaking shall be in accordance with the form recommended by Lloyds Insurance
Brokers Committee, or any subsequent LIBC form, or any other similar form, which is approved
by the Bank and shall include a further undertaking to give immediate notice of any insurance
being subject to the Condition Survey Warranty (J.H. 115) and/or structural Conditions
Warranty (J.H. 722) and/or the Classification Clause (Hulls) dated 29/6/89, fifteen days prior
to the attachment date of any insurance bearing any of these warranties, or in such shorter
time as the Bank may agree.(b)
    
    If any of the Insurances form part of a fleet cover, procure that the Vessel shall be
considered by insurers as separately insured and further procure that the Approved Brokers
and/or Insurers as the case may be, shall undertake to the Bank that they shall neither set
off against any claims in respect of the Vessel any premiums due in respect of other Vessel
under such fleet cover or any premiums due for other insurances, nor cancel the
 55




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insurance of the Vessel for reason of non-payment of premiums for other Vessel under such
fleet cover or of premiums for such other insurances, and shall undertake to issue a
separate policy in respect of the Vessel if and when so requested by the bank;(c)
    
    punctually pay all premiums, calls, contributions or other sums payable in respect of all
Insurances and produce all relevant receipts and details or other evidence of payment when so
required by the Bank;(d)
    
    notify the Bank of the names of the brokers and/or all of the Insurers proposed to be
employed by the Owners for the purposes of the renewal of such Insurances and of the amounts
and terms in which such Insurances are proposed to be renewed and the risks to be covered at
least fifteen (15) days before the relevant policies, contracts or entries, expire, (or in
such shorter period as the Bank may agree), and, subject to compliance with any requirements
of the Bank under these Insurance Requirements, procure that appropriate instructions for the
renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or
to the approved Insurers at least fifteen (15) days before the relevant policies, contracts or
entries expire, and that the Approved Brokers and/or the approved Insurers will at least seven
(7) days before such expiry (or within such shorter period as the Bank may from time to time
agree) confirm in writing to the Bank as and when such renewals have been effected in
accordance with the instructions so given and to procure that a Cancellation Clause shall be
endorsed on the relevant policies, contracts or entries for a Notice of Cancellation to the
Bank on the terms set out in Paragraph D of this Schedule.(e)
    
    arrange for the execution and delivery of such guarantees or indemnities as may from time to
time be required by any protection and indemnity or war risks association;(f)
    
    deposit with the Approved Brokers (procure the deposit of) all slips, cover notes, policies,
certificates of entry or other instruments of insurance from time to time issued and procure
that the interest of the Bank shall be endorsed thereon by incorporation of the relevant Loss
Payable Clause and by means of a Notice of Assignment (signed by the Owners) in the form set
out in Paragraph D hereinbelow or in such other form as may from time to time be agreed in
writing by the Bank, and that the Bank shall be furnished with pro forma copies thereof.(g)
    
    procure that the Insurers shall note the Banks interest and endorse the relevant Loss
Payable Clause on the relevant certificates of entry or policies and shall furnish the Bank
with a copy of such certificates of entry or policies;(h)
    
    do all other necessary things and provide all such documents, evidence and information, so as
to enable the Bank to collect and recover any moneys which shall at any time become due in
respect of the Insurances;(i)
    
    not employ or permit the Vessel to be employed in any other way than in conformity with the
terms of the Insurances (including any warranties
 56




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express or implied therein) and with any applicable law without first obtaining the
consent of the Insurers to such employment and complying with such requirements as to
extra premium or otherwise as the Insurers may prescribe;(j)
    
    apply all sums receivable under the Insurances which are paid to the Owner in accordance with
the Loss Payable Clauses in repairing all damage and/or in discharging the liability in
respect of which such sums shall have been received;(k)
    
    in case that the Vessel is scheduled to operate or operates within or nearby USA, make all
the Protection & Indemnity Club US Voyage Quarterly Declarations for each quarter in time
and/or obtain prior to Vessels arrival in US territorial waters all relevant certificates as
from time to time may be required, such as COFR, or any other similar, and forward copies of
same to the Bank;(l)
    
    not without the prior consent of the Bank alter any insurance nor make, consent or agree to
any act or omission which would or might render any insurance invalid, void, voidable or
unenforceable or render any sum paid out under any insurance repayable in whole or in part.(m)
    
    reimburse the Bank for any premiums paid by the Bank or pay to the Bank the amount of any
premiums to be paid by the Bank in order to effect and maintain a policy of Mortgagees
Interest Insurance or any other additional insurance that the Bank decides to take at its
discretion as well as reimburse the Bank for all expenses and premiums paid by the Bank in
order to effect insurances that the Owner failed to effect.
 6.
 D. FORMS AND WORDING
 (a) Loss payable clause
  (1) Hull and Machinery (Marine & War Risks):
  57




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(2) Protection and Indemnity Risks:
 (b) Notice of Assignment
   
 (c) Notice of Cancellation
  (1)
 (2)
 58




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##### 



(3)
 59




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##### 



Schedule III
 Notice of Drawdown
 
  Notice of Drawdown
         Your faithfully,For and on behalf of
  60




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Schedule IV
 Instalment
    
    
    
    Repayment
    
    Total PrincipalNo
    
    Payment Date
    
    Instalment
    
    Amount1
    
    3 months after the Drawdown Date
    
    $1,000,000
    
    $6,000,0002
    
    6 months after the Drawdown Date
    
    $1,000,000
    
    $5,000,0003
    
    9 months after the Drawdown Date
    
    $750,000
    
    $4,250,0004
    
    12 months after the Drawdown Date
    
    $750,000
    
    $3,500,0005
    
    15 months after the Drawdown Date
    
    $750,000
    
    $2,750,0006
    
    18 months after the Drawdown Date
    
    $750,000
    
    $2,000,0007
    
    21 months after the Drawdown Date
    
    $250,000
    
    $1,750,0008
    
    24 months after the Drawdown Date
    
    $250,000
    
    $1,500,0009
    
    27 months after the Drawdown Date
    
    $250,000
    
    $1,250,50010
    
    30 months after the Drawdown Date
    
    $250,000
    
    $1,000,00011
    
    33 months after the Drawdown Date
    
    $250,000
    
    $750,50012
    
    36 months after the Drawdown Date
    
    $250,000
    
    $500,000Plus Balloon Payment
    
    $500,000
    
    0
 61




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##### 



IN WITNESS
 SIGNEDby
    
    
    )Stefanos Kardamakis
    
    
    )Pantelis Vokos
    
    
    )the duly authorised attorneys
    
    
    )for and on behalf of
    
    
    )EGNATIA BANK S.A.
    
    
    )SIGNEDby
    
    
    ))/s/
[ILLEGIBLE]
the duly authorised attorney
    
    
    )for and on behalf of
    
    
    )ADVENTURE FOUR S.A.
    
    
    )
 62




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##### 



TABLE OF CONTENTS
 CLAUSE
    
    PAGE1.
    
    PURPOSE, DEFINITIONS AND INTERPRETATION
    
    12.
    
    DISBURSEMENT
    
    83.
    
    CONDITIONS PRECEDENT
    
    84.
    
    REPRESENTATIONS AND WARRANTIES
    
    105.
    
    ARRANGEMENT FEE
    
    156.
    
    EVIDENCE
    
    167.
    
    REPAYMENT
    
    168.
    
    INTEREST AND INTEREST PERIODS
    
    179.
    
    PREPAYMENT
    
    1910.
    
    PAYMENTS ACCOUNTS & CALCULATIONS
    
    2011.
    
    UNLAWFULNESS AND INCREASED COSTS
    
    2212.
    
    SECURITY
    
    2313.
    
    COVENANTS
    
    2414.
    
    EVENTS OF DEFAULT
    
    3015.
    
    APPLICATION OF PROCEEDS OF SALE OR OF INSURANCE
    
    3416.
    
    ACCOUNTS
    
    3517.
    
    INDEMNITY
    
    3818.
    
    REMEDIES AND WAIVERS
    
    4019.
    
    LEGAL IMMINENCE
    
    4020.
    
    COUNTERPARTS
    
    4121.
    
    INVALIDITY
    
    4122.
    
    ASSIGNMENT
    
    4123.
    
    EXPENSES
    
    4224.
    
    NOTICE
    
    4325.
    
    GOVERNING LAW AND JURISDICTION
    
    43Schedule I
    
    45Schedule II
    
    52Schedule III
    
    60Schedule IV
    
    61
 63