Exhibit 10.9


 


Private & Confidential


 


 


Dated
                                                     2006


 


 


Facilities Agreement


for a


US$145,000,000 Term Loan


and a


US$150,000,000 Revolving Credit Facility


 


to


OMEGA NAVIGATION ENTERPRISES, INC.


 


provided by the


banks and financial institutions


listed in Schedule 1


 


Arranger


HSH
NORDBANK AG


 


Swap Bank


HSH
NORDBANK AG


 


Agent


HSH
NORDBANK AG


 


 





 

















 


Contents


 


	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1

  	
  Purpose and definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2

  	
  The
  Facilities

  	
  17

  
	
   

  	
   

  	
   

  
	
  3

  	
  Interest and Interest
  Periods

  	
  20

  
	
   

  	
   

  	
   

  
	
  4

  	
  Repayment,
  prepayment and reborrowing

  	
  23

  
	
   

  	
   

  	
   

  
	
  5

  	
  Commitment
  commission, fees and expenses

  	
  26

  
	
   

  	
   

  	
   

  
	
  6

  	
  Payments and
  taxes; accounts and calculations

  	
  27

  
	
   

  	
   

  	
   

  
	
  7

  	
  Representations and warranties

  	
  29

  
	
   

  	
   

  	
   

  
	
  8

  	
  Undertakings

  	
  34

  
	
   

  	
   

  	
   

  
	
  9

  	
  Conditions

  	
  46

  
	
   

  	
   

  	
   

  
	
  10

  	
  Events of Default

  	
  47

  
	
   

  	
   

  	
   

  
	
  11

  	
  Indemnities

  	
  51

  
	
   

  	
   

  	
   

  
	
  12

  	
  Unlawfulness
  and increased costs

  	
  52

  
	
   

  	
   

  	
   

  
	
  13

  	
  Security,
  set-off and pro-rata payments

  	
  54

  
	
   

  	
   

  	
   

  
	
  14

  	
  Earnings
  Accounts

  	
  56

  
	
   

  	
   

  	
   

  
	
  15

  	
  Assignment,
  substitution and lending office

  	
  58

  
	
   

  	
   

  	
   

  
	
  16

  	
  Agent

  	
  60

  
	
   

  	
   

  	
   

  
	
  17

  	
  Notices and other matters

  	
  60

  
	
   

  	
   

  	
   

  
	
  18

  	
  Governing law and jurisdiction

  	
  62

  
	
   

  	
   

  	
   

  
	
  Schedule 1
  The Banks and the Swap Bank

  	
   

  
	
   

  	
  Part 1 -
  Commitment

  	
  63

  
	
   

  	
  Part 2 - The
  Swap Bank

  	
  63

  
	
   

  	
  Part 3 -
  Facility A Commitments

  	
  63

  
	
   

  	
  Part 4 -
  Facility B Commitments

  	
  64

  
	
   

  	
   

  	
   

  
	
  Schedule 2
  Part 1 - Initial Ships

  	
  65

  
	
   

  	
  Part 1 -
  Initial Ships

  	
  65

  
	
   

  	
  Part 2 -
  Additional Ship Selection Criteria

  	
  66

  
	
   

  	
  Part 3 -
  Maximum amount of Advance of Facility A

  	
  66

  
	
   

  	
  Part 4 -
  Details of Initial Owners

  	
  67

  
	
   

  	
   

  	
   

  
	
  Schedule 3
  Form of Drawdown Notice

  	
  68

  
	
  Schedule 4

  	
  69

  
	
   

  	
  Part 1 -
  Documents and evidence required as conditions precedent to the Commitment

  	
  69

  
	
   

  	
  Part 2 -
  Documents and evidence required as conditions precedent to the first Advance

  	
  71

  
	
   

  	
  Part 3 -
  Documents and evidence required as a condition precedent to all Advances being
  made (clause 9.3)

  	
  75

  
	
   

  	
  Part 4 -
  Additional documents and evidence required as a condition precedent to any
  Contract Instalment Advance of Facility B (referred to in clause 9.2)

  	
  79

  
				



 

















 


	
  Schedule 5
  Form of Substitution Certificate

  	
  80

  
	
   

  	
   

  	
   

  
	
  Schedule 6
  Compliance Certificate

  	
  84

  
	
   

  	
   

  	
   

  
	
  Schedule 7
  Calculation of Additional Cost

  	
  86

  



 

















 


THIS AGREEMENT is dated
                                                        
2006 and made BETWEEN:


 


(1)                        OMEGA NAVIGATION ENTERPRISES, INC. as borrower (the “Borrower”);


 


(2)                        the banks and financial institutions whose names and addresses are
set out in Schedule 1, Part 1 (the “Banks”);


 


(3)                        HSH NORDBANK AG in its
capacity as mandated lead arranger (the “Arranger”);


 


(4)                        HSH NORDBANK AG in its
capacity as swap bank (the “Swap Bank”);
and


 


(5)                        HSH NORDBANK AG in its
capacity as Agent, security agent and trustee (the “Agent”).


 


IT IS AGREED as follows:


 


1          Purpose and definitions


 


1.1       Purpose


 


This Agreement sets out the terms and
conditions upon and subject to which the Banks agree, according to their
several obligations, to make available to the Borrower:


 


(i)                           a term loan
facility of the lesser of (A) up to one hundred and forty five million dollars
($145,000,000) and (B) forty per cent (40%) of the Fleet Market Value (as
hereinafter defined) which is to be applied by the Borrower in (a) making
available to the relevant Initial Owners intra-group loans under the
Intra-Group Loan Agreements to refinance all of the Existing Facility in
relation to Ekavi and Electra and (b) to finance up to forty per cent (40%) of
the purchase price of the Initial Ships (other than Ekavi, Electra and
Everhard) (hereinafter defined as “Facility A”);
and


 


(ii)                        a revolving
credit facility of up to one hundred and fifty million dollars ($150,000,000)
which is to be applied by the Borrower in making available to Fulton and the
Additional Owners intra-group loans under the Intra-Group Loan Agreements to
allow the Additional Owners to finance up to 100% of the purchase price of (a)
Everhard and (b) the Additional Ships and Expected Project Costs (hereinafter
defined as “Facility B”).


 


1.2       Definitions


 


In this Agreement, unless the context otherwise
requires:


 


“Acceptable Employment”
means,


 


(a)                        in relation to each Initial Ship (other than Ekavi and Electra), a
charter or other employment arrangement for a minimum period of thirty six (36)
months with a reputable charterer and at a rate of hire, which shall be
acceptable to the Agent in its sole discretion but which shall (inter alia)
cover operational expenses of the relevant Initial Ship and when aggregated
with the Earnings of all the Ships, Debt Service; or


 


(b)                       in relation to each Additional Ship, a charter or other employment
arrangement which shall be acceptable to the Agent in its sole discretion but
which shall (inter alia) cover all operational expenses of the relevant
Additional Ship and when aggregated with the Earnings of all the Ships, Debt
Service;


 


“Account Bank”
means HSH Nordbank AG of Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany and
includes its successors in title;


 


“Accounts” means
the Earnings Accounts, the Swap Account and the Retention Accounts and “Account” means any of them;


 


1

















 


“Accounts Pledges” means the pledges of
the Earnings Accounts executed or (as the context may require) to be executed
by each Owner in favour of the Agent as security agent and trustee on behalf of
the Finance Parties in respect of each Earnings Account in the agreed form and
“Account Pledge” means any of them;


 


“Additional Cost” means in relation to
any period a percentage calculated for such period at an annual rate determined
by the application of the formula in Schedule 7;


 


“Additional Owner” means any company
incorporated in a jurisdiction, capitalised, structured and managed in a manner
acceptable to the Agent in its sole discretion which becomes the owner of an
Additional Ship;


 


“Additional Ship Selection Criteria”
means, in relation to an Additional Ship, the selection criteria for such
Additional Ship set out in Part 2 of Schedule 2 or such other criteria for an
Additional Ship which is approved by the Agent at the request of the Borrower
from time to time;


 


“Additional Ships” means the additional
ships which meet the Additional Ship Selection Criteria purchased or (as the
context may require) to be purchased by an Additional Owner with the prior
written approval of the Agent and “Additional Ship”
means any of them;


 


“Advance” means each borrowing of a
proportion of the Commitment by the Borrower (whether forming part of the
Facility A Loan or the Facility B Loan) or, as the context may require, the
principal amount of such borrowing for the time being outstanding and “Advances” means all of them;


 


“Agency Agreement”
means the agency agreement executed or (as the context may require) to be
executed between the Agent, the Arranger, the Swap Bank and the Banks in the
agreed form;


 


“Agent” means
HSH Nordbank AG of Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany or such
other person as may be appointed agent, security agent and trustee for the
Banks pursuant to the Agency Agreement and includes its successors and assigns;


 


“Approved Brokers”
means Arrow Sale & Purchase (UK) Ltd, Simpson Spencer & Young, R.S.
Platou Shipbrokers A.S., H. Clarksons & Co Ltd and Maersk Broker and “Approved Broker” means any of them;


 


“Arranger” means
HSH Nordbank AG of Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany as
mandated lead arranger;


 


“Assignee” has
the meaning ascribed thereto in clause 15.3;


 


“Assignment of Intra-Group Loan
Agreements” means the assignment executed or (as the context may
require) to be executed by the Borrower in favour of the Agent (as security
agent and trustee on behalf of the Finance Parties) in the agreed form;


 


“Banking Day”
means a day on which dealings in deposits in Dollars are carried on in the
London Interbank Eurocurrency Market and (other than Saturday or Sunday) on
which banks are open for general business in London, Hamburg and New York City
(or any other relevant place of payment under clause 6);


 


“Banks” mean the
banks and financial institutions listed in Schedule 1 and include their
respective successors in title, Assignees and transferees and “Bank” means any or all of them;


 


“Borrowed Money”
means Indebtedness in respect of (i) money borrowed or raised and debit
balances at banks, (ii) any bond, note, loan stock, debenture or similar debt
instrument, (iii) acceptance or documentary credit facilities,
(iv) receivables sold or discounted (otherwise than on a non-recourse
basis), (v) deferred payments for assets or services acquired, (vi) finance
leases and hire purchase contracts, (vii) swaps, forward exchange contracts,
futures and other derivatives, (viii) any other transaction (including without
limitation forward sale or purchase


 


2

















 


agreements) having the commercial effect of a
borrowing or raising of money or of any of (ii) to (vii) above and (ix)
guarantees in respect of Indebtedness of any person falling within any of (i)
to (viii) above;


 


“Borrower” means
Omega Navigation Enterprises, Inc. of Trust Company Complex, Ajeltake Road,
Ajeltake Islands, Majuro MH 96960, Marshall Islands and includes its successors
in title;


 


“Borrower’s Group”
means the Borrower and its Related Companies;


 


“Borrower’s Security
Documents” means, at any relevant time, such of the Security
Documents as shall have been executed by the Borrower at such time;


 


“Builder” means,
in relation to an Additional Ship which is a newbuilding, the builder of that
Additional Ship and includes its successors in title;


 


“Cash” has the
meaning given to that term in clause 8.6;


 


“Cash Equivalent Investment”
has the meaning given to that term in clause 8.6;


 


“Charter” means:


 


(a)                        in relation to an Initial Ship, any time charter or consecutive
voyage charter for an Initial Ship as notified to the Agent by the Borrower and
approved by the Agent in writing;


 


(b)                       in relation to an Additional Ship, any time charter or consecutive
voyage charter for that Additional Ship for a term which exceeds or which by
virtue of any optional extensions may exceed eleven (11) months’ duration,


 


and “Charters” means
all of them;


 


“Charter Assignments”
means the specific assignments of all of the Charters executed (or as the
context may require) to be executed by the Owners in favour of the Agent as
security agent and trustee on behalf of the Finance Parties in the agreed form
and “Charter Assignment” means any of them;


 


“Classification”
means:


 


(a)                        in relation to an Initial Ship, the classification set out in Part 1
of Schedule 2; and


 


(b)                       in relation to any Additional Ship, the highest class available to
vessels of its type with the relevant Classification Society,


 


or, in each case, such other classification as the
Agent shall, at the request of the Borrower, have agreed in writing shall be
treated as the Classification in relation to such Ship for the purposes of the
Security Documents;


 


“Classification Society”
means:


 


(a)                        in relation to an Initial Ship, the classification society set out
in Part 1 of Schedule 2; and


 


(b)                       in relation to any Additional Ship, Lloyd’s Register or any other
classification society which is a member of the International Association of
Classification Societies, as approved by the Agent,


 


or, in each case, such other classification society,
as approved by the Agent, which the Agent shall, at the request of the
Borrower, have agreed in writing shall be treated as the Classification Society
in relation to such Ship for the purposes of the Security Documents;


 


3

















 


“Commitment”
means the aggregate of the Total Facility A Commitments and the Total Facility
B Commitments, being two hundred and ninety five million Dollars ($295,000,000)
at the date of this Agreement and, in relation to each Bank the amount set out
opposite its name in Part 1 of Schedule 1 or, as the case may be, in any
relevant Substitution Certificate as reduced by any relevant term of this
Agreement;


 


“Compliance Certificate”
means the compliance certificate issued by the Borrower under clause 8.7.6;


 


“Compulsory Acquisition”
means requisition for title or other compulsory acquisition, requisition,
appropriation, expropriation, deprivation, forfeiture or confiscation for any
reason of a Ship by any Government Entity or other competent authority, whether
de jure or de facto, but shall exclude requisition for use or hire not
involving requisition of title;


 


“Contract”
means:


 


(a)                        in relation to
each Initial Ship (other than Ekavi and Electra) and any second-hand Additional
Ship, the memorandum of agreement or other contract for the sale and purchase
of a ship (to be in a form and substance satisfactory to the Agent) made or (as
the context may require) to be made, between the Seller of such Ship and the
relevant Owner as buyer of such Ship; and


 


(b)                       in relation to
any Additional Ship which is a newbuilding, a shipbuilding contract made
between the relevant Builder of such Additional Ship and the relevant
Additional Owner of that Additional Ship and/or the relevant Seller of that Additional
Ship (to be in a form and substance satisfactory to the Agent) and as the same
may subsequently be supplemented and/or amended,


 


and “Contracts”
means any or all of them;


 


“Contract Assignment
Consent and Acknowledgements” means the acknowledgements of notice
of, and consent to, the assignment in respect of a Contract relative to an
Additional Ship which is a newbuilding to be given by the relevant Builder, in
the form scheduled to the relevant Pre-delivery Security Assignment;


 


“Contract Instalment
Advance” means, in relation to any Additional Ship which is a
newbuilding, an Advance of Facility B made, or to be made, to finance the
payment of an instalment of the relevant Contract Price falling due before the
Delivery Date for that Additional Ship;


 


“Contract Price”
means;


 


(a)                        in relation to each Initial Ship (other than Ekavi and Electra), the
price payable by the relevant Owner to the relevant Seller under the relevant
Contract for each Initial Ship (other than Ekavi and Electra); and


 


(b)                       in relation to any Additional Ship, the price payable by the
relevant Owner to the relevant Builder or Seller (as appropriate) in accordance
with the relevant Contract;


 


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


 


“Debt Service” means, in respect of any
period, the aggregated:


 


(a)                       Interest
Payable for such period;


 


(b)                      the total amount
of all scheduled (but not voluntary or mandatory) repayments of the Facilities
made by the Borrower or which fell due during such period; and


 


4

















 


(c)                       the total
amount of all scheduled (but not voluntary or mandatory) repayments of
principal under the terms of any other Indebtedness (save for any revolving,
overdraft or ancillary facility that is available for simultaneous re-drawing
according to its terms) made by the members of the Borrower’s Group or which
fell due during such period, including the principal element of scheduled
rental payments which under GAAP should be treated as a finance lease or
otherwise capitalised on the books of such person, in accordance with such
principles;


 


“Deeds of Covenant”
means, where appropriate, the deeds of covenant collateral to the Mortgages
executed or (as the context may require) to be executed by the Owners in favour
of the Agent as security agent and trustee on behalf of the Finance Parties in
the agreed form and “Deed of Covenant”
means any of them;


 


“Default” means
any Event of Default or any event or circumstance which with the giving of
notice or lapse of time or the satisfaction of any other condition (or any
combination thereof) would constitute an Event of Default;


 


“Delivery” means
the delivery of a Ship to, and the acceptance of the relevant Ship by, the
relevant Owner pursuant to the relevant Contract;


 


“Delivery Date”
means, in relation to each Additional Ship and each Initial Ship (other than
Ekavi and Electra), the date on which such Ship is delivered to the relevant
Owner in accordance with the relevant Contract;


 


“Delivery Date Advance”
means, in relation to an Additional Ship which is a newbuilding, an Advance of
Facility B made, or to be made, to finance the instalment of the Contract Price
falling due on the Delivery Date for that Additional Ship;


 


“DOC” means a
document of compliance issued to an Operator in accordance with rule 13 of the
ISM Code;


 


“Dollars” and “$” mean the lawful currency of the United States of America
and in respect of all payments to be made under any of the Security Documents
mean funds which are for same day settlement in the New York Clearing House
Interbank Payments System (or such other U.S. dollar funds as may at the
relevant time be customary for the settlement of international banking
transactions denominated in U.S. dollars);


 


“Drawdown Date”
means any date, being a Banking Day falling during the Drawdown Period, on
which an Advance is, or is to be, made;


 


“Drawdown Notice”
means a notice substantially in the terms of Schedule 3;


 


“Drawdown Period”
means the period from and including the date of this Agreement and ending on
the Termination Date or, in each case, the period ending on such earlier date
(if any) on which (i) the aggregate of all of the Advances is equal to the
Commitment or (ii) the Commitment is reduced to zero pursuant to clauses 10.2
or 12;


 


“Earnings”
means, in relation to each Ship, all moneys whatsoever from time to time due or
payable to the relevant Owner of such Ship during the Security Period arising
out of the use or operation of such Ship including (but without limiting the
generality of the foregoing) all freight, hire and passage moneys, income
arising out of pooling arrangements, compensation payable to the relevant Owner
in the event of requisition of such Ship for hire, remuneration for salvage or
towage services, demurrage and detention moneys and damages for breach (or
payments for variation or termination) of any charterparty or other contract
for the employment of such Ship and any sums recoverable under any loss of
earnings insurance;


 


“Earnings Accounts”
means interest bearing Dollar accounts of the Owners opened or (as the context
may require) to be opened by the Owners with the Account Bank and includes any
other account designated in writing by the Account Bank to be an Earnings
Account for the purposes of this Agreement and “Earnings
Account” means any of them;


 


5

















 


“EBITDA” has the
meaning given to that term in clause 8.6;


 


“Ekavi” means
m.v. “EKAVI I” whose particulars are set out in Part 1 of Schedule 2;


 


“Electra” means
m.v. “ELECTRA I” whose particulars are set out in Part 1 of Schedule 2;


 


“Encumbrance”
means any mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest or other
encumbrance of any kind securing any obligation of any person or any type of
preferential arrangement (including without limitation title transfer and/or
retention arrangements having a similar effect);


 


“Environmental Claim”
means:


 


(a)                        any and all enforcement, clean-up, removal or other governmental or
regulatory action or order or claim instituted or made pursuant to any
Environmental Law or resulting from a Spill; or


 


(b)                       any claim made by any other person relating to a Spill;


 


“Environmental Incident”
means any Spill:


 


(a)                        from any Fleet Vessel; or


 


(b)                       from any other vessel in circumstances where:


 


(i)                          any Fleet Vessel or its owner, operator or manager may be liable for
Environmental Claims arising from the Spill (other than Environmental Claims
arising and fully satisfied before the date of this Agreement); and/or


 


(ii)                       any Fleet Vessel may be arrested or attached in connection with any
such Environmental Claims;


 


“Environmental Laws”
means all laws, regulations and conventions concerning pollution or protection
of human health or the environment;


 


“Event of Default”
means any of the events or circumstances described in clause 10.1;


 


“Everhard” means
m.v. “EVERHARD SCHULTE” whose particulars are set out in Part 1 of Schedule 2;


 


“Existing Facility”
means the loan agreement dated 13 April 2005 executed between (i) Abilene
Navigation Inc. and Hamilton Navigation Inc. and (ii) Nordea Bank Finland plc,
London Branch pursuant to which Nordea Bank Finland plc, London Branch made
thirty nine million Dollars ($39,000,000) available to Abilene Navigation Inc.
and Hamilton Navigation Inc. for the purpose of (inter alia) financing the
purchase of Ekavi and Electra;


 


“Expected Project Costs”
means:


 


(a)                        in connection with the construction of an Additional Ship, all
reasonable pre-delivery costs up to the Delivery Date of such Additional Ship
which have been approved by the Agent;


 


(b)                       in connection with the acquisition of an Additional Ship from a
Seller, the deposit payable in respect of such Additional Ship pursuant to the
relevant Contract in an amount approved by the Agent; and


 


(c)                        all interest paid by the Borrower on the relevant Advance under
clause 3 of this Agreement up to the Delivery Date of such Additional Ship;


 


“Facility” means
Facility A or Facility B and “Facilities”
means both of them;


 


6

















 


“Facility A”
means the term loan facility made available under this Agreement as described
in clause 2.5;


 


“Facility A Commitment”
means:


 


(a)                        in relation to a Bank, the amount set opposite its name under the
heading “Facility A Commitment” in Part 3 of
Schedule 1 and the amount of any other Facility A Commitment transferred to it
under this Agreement; and


 


(b)                       in relation to any other bank, the amount of any Facility A
Commitment transferred to it under this Agreement,


 


to the extent not cancelled, reduced or
transferred by it under this Agreement;


 


“Facility A Loan”
means a loan made or to be made under Facility A or the principal amount
outstanding for the time being of that loan under Facility A;


 


“Facility A Repayment Dates”
means in relation to Facility A and subject to clauses 4.1 and 6.4, a first
repayment date falling on the date six (6) months after the date of the first
Advance relating to Facility A and each of the dates falling at six (6) monthly
intervals thereafter up to and including the Final Repayment Date;


 


“Facility B”
means the revolving credit and term loan facility made available under this
Agreement as described in clause 2.6;


 


“Facility B Commitment”
means:


 


(a)                        in relation to a Bank, the amount set opposite its name under the
heading “Facility B Commitment” in Part 4 of
Schedule 1 and the amount of any other Facility B Commitment transferred to it
under this Agreement; and


 


(b)                       in relation to any other bank, the amount of any Facility B
Commitment transferred to it under this Agreement,


 


to the extent not cancelled, reduced or
transferred by it under this Agreement;


 


“Facility B Loan”
means a loan made or to be made under Facility B or the principal amount
outstanding for the time being of that loan under Facility B;


 


“Facility B Repayment Dates”
means, subject to clauses 4.2 and 6.4:


 


(a)              in relation to the
Advance for Everhard, a first repayment date falling on the date nine (9)
months after the Delivery Date of Everhard (for the purposes of this definition
only, the “First Repayment Date”), a second
repayment date falling six (6) months after the First Repayment Date (for the
purposes of this definition only, the “Second Repayment Date”),
a third repayment date falling three (3) months after the Second Repayment Date
and each of the dates falling at six (6) monthly intervals thereafter up to and
including the Final Repayment Date; and


 


(b)             in relation to each
further Advance of Facility B, a first repayment date falling on the date six
(6) months after the Delivery Date of the relevant Additional Ship and each of
the dates falling at six (6) monthly intervals thereafter up to and including
the Final Repayment Date;


 


“Fair Market Value”
means, in relation to each Ship, the fair market value of such Ship determined
in accordance with clause 8.2.2;


 


7

















 


“Fee Letter”
means the letter of even date herewith executed between the Borrower, the Agent
and the Arranger, setting out the fees to be paid by the Borrower to the Agent
and the Arranger;


 


“Final Repayment Date”
means the date which falls five (5) years after the date of the first Advance
under this Agreement but not later than 31 August 2011;


 


“Financial Covenants”
means the Borrower’s financial covenants set out in clause 8.6;


 


“Finance Parties”
means the Agent, the Arranger, the Swap Bank and the Banks and “Finance Party” means any of them;


 


“Financial Quarter Day”
has the meaning given to that term in clause 8.6;


 


“Financial Quarter”
has the meaning given to that term in clause 8.6;


 


“Financial Year”
has the meaning given to that term in clause 8.6;


 


“Flag State”
means:


 


(a)                        in relation to an Initial Ship, the flag state set out in Part 1 of
Schedule 2; and


 


(b)                       in relation to an Additional Ship, a state or territory designated
in writing by the Agent, at the request of the Borrower, as being the “Flag State” of a Ship for the purposes of the Security
Documents;


 


“Fleet Book Value” means, at the end of
a Relevant Period, the aggregate book value of the Ships less depreciation as
stated in the most recent financial statements delivered pursuant to clause
8.1.5;


 


“Fleet Market Value” means, at the date
of calculation, the aggregate of the Fair Market Values of all of the Mortgaged
Ships as last determined in accordance with clause 8.2.2;


 


“Fleet Vessel”
means a Ship and any other vessel owned, operated, managed or crewed by any
member of the Borrower’s Group;


 


“Free Liquid Assets” means, at any given
time, all Cash and Cash Equivalent Investments held by the Borrower’s Group
less an amount equal to the Debt Service due and payable during the immediately
following two Financial Quarters;


 


“Fulton” means
Fulton Navigation Inc. of Trust Company Complex, Ajeltake Island, Majuro MH
96960, Marshall Islands, the owner of Everhard;


 


“GAAP” means
generally accepted accounting principles in the United States of America and/or
Singapore;


 


“General Assignments”
means, where appropriate, all of the general assignments collateral to the
Mortgages executed or (as the context may require) to be executed by the Owners
in favour of the Agent as security agent and trustee on behalf of the Finance
Parties in substantially the agreed form and “General
Assignment” means any of them;


 


“Government Entity”
means and includes (whether having a distinct legal personality or not) any
national or local government authority, board, commission, department,
division, organ, instrumentality, court or agency and any association,
organisation or institution of which any of the foregoing is a member or to
whose jurisdiction any of the foregoing is subject or in whose activities any
of the foregoing is a participant;


 


“Indebtedness”
means any obligation for the payment or repayment of money, whether as
principal or as surety and whether present or future, actual or contingent;


 


8

















 


“Initial Owner”
means, in relation to each Initial Ship, the owner of that Initial Ship set out
in Part 1 of Schedule 2 and “Initial Owners”
means all of them;


 


“Initial Ships”
means the initial ships whose names and particulars are set out in Part 1 of
Schedule 2 and “Initial Ship” means any of them;


 


“Interest Payable”
has the meaning given to that term in clause 8.6;


 


“Interest Payment Date”
means the last day of an Interest Period;


 


“Interest Period”
means, in relation to any Advance, the Facility A Loan, the Facility B Loan or
the Loan (as the case may be), each period for the calculation of interest in
respect of such Advance, the Facility A Loan, the Facility B Loan or the Loan
ascertained in accordance with clauses 3.2 and 3.3;


 


“Intra-Group Loan
Agreements” means the loan agreements in a form and substance
acceptable to the Agent executed or (as the context may require) to be executed
by the Borrower and each Owner relating to the intra-group loan to be made
available by the Borrower to each Owner to enable each such Owner to finance
the acquisition and/or refinancing of the relevant Ship and “Intra-Group Loan Agreement” means any of them;


 


“ISM Code” means
the International Safety Management Code for the Safe Operation of Ships and
for Pollution Prevention constituted pursuant to Resolution A. 741(18) of the
International Maritime Organisation and incorporated into the Safety of Life at
Sea Convention and includes any amendments or extensions thereto and any
regulation issued pursuant thereto;


 


“ISPS Code”
means the International Ship and Port Facility Security Code constituted
pursuant to Resolution A. 924(22) of the International Maritime Organisation
and incorporated into the Safety of Life at Sea Convention and includes any
amendments or extensions thereto and any regulation issued pursuant thereto;


 


“ISSC” means an
International Ship Security Certificate issued in respect of a Ship under the
provisions of the ISPS Code;


 


“LIBOR” means,
in relation to a particular period, the rate determined by the Agent to be that
at which deposits in Dollars and in an amount comparable with the amount in
relation to which LIBOR is to be determined and for a period equal to the
relevant period were being offered by the Banks to prime banks in the London
Interbank Market at the time the rate is fixed in accordance with clauses 3.2
and 3.3 hereof on the second Banking Day before the first day of such period,
provided that if the Borrower shall at any time enter into any Transaction(s)
under the Master Swap Agreement, LIBOR shall (during the period when any such
Transaction(s) are effective and for an amount equal to the notional amount of
such Transaction(s)) be the rate for deposits in Dollars for a period
equivalent to such period at or about 11 a.m. on the second Banking Day before
the first day of such period as displayed on Telerate page 3750 (British
Bankers’ Association Interest Settlement Rates) (or such other page as may
replace such page 3750 on such system or on any other system of the information
vendor for the time being designated by the British Bankers’ Association to
calculate the BBA Interest Settlement Rate (as defined in the British Bankers’
Association’s Recommended Terms and Conditions (“BBAIRS”
terms) dated August, 1985));


 


“Loan” means the
Facility A Loan and/or the Facility B Loan;


 


“Majority Banks”
means that Bank or Banks holding at least sixty six and two thirds per cent
(66 2/3%) of the Commitment and/or sixty six and two
thirds per cent (66 2/3%) of the Loan;


 


“Management Agreements”
means the agreements executed or (as the context may require) to be executed
between the relevant Owner and the Manager in a form previously approved in
writing by the Agent or any other agreement previously approved in writing by
the Agent between the relevant Owner and the Manager providing (inter alia) for
the Manager to manage the Ships and “Management Agreement”
means any of them;


 


9

















 


“Manager” means:


 


(a)                        in relation to Ekavi and Electra and any Additional Ships which are
dry cargo vessels, Target Marine S.A. incorporated in Panama and with its
office at 24, Kaniaos St., Kastella, 18534 Piraeus Greece; and


 


(b)                       in relation to the Initial Ships (other than Ekavi and Electra) and
any Additional Ships which are tankers, V.Ships UK Ltd of Skipart, 8 Elliot
Place, Glasgow, G3 8EP, Scotland,


 


or any other person appointed by the Borrower, with
the prior written consent of the Agent, as the manager of the Ships and
includes its successors in title and assignees;


 


“Manager’s Undertaking”
means an undertaking executed or (as the context may require) to be executed by
the Manager in favour of the Agent as a condition precedent to the approval of
the appointment of the Manager as manager of a Ship, such undertaking to be in
substantially the agreed form and “Manager’s Undertakings”
means all of them;


 


“Margin” means
the margin listed in the following table which shall be adjusted semi-annually
in arrears based upon the most recent Compliance Certificate;


 


	
  Corporate Leverage

  	
   

  	
  Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  < 55%

  	
   

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  >
  55%

  	
   

  	
  1.20

  	
  %

  



 


Where:


 


“Corporate Leverage”
means, at the end of each Financial Quarter in respect of the Borrower’s Group,
the ratio of outstanding Total Liabilities divided by the Total Assets;


 


“MAS” means the
Monetary Authority of Singapore;


 


“Master Swap Agreement”
means the agreement dated                        2006
as amended and modified and made between the Borrower and the Swap Bank and any
Continuations (as defined therein) supplemented thereto;


 


“Master Swap Assignment”
means the security assignments of the Master Swap Agreement executed or (as the
context may require) to be executed by the Borrower in favour of the Agent;


 


“month” means a
period beginning in one (1) calendar month and ending in the next calendar
month on the day numerically corresponding to the day of the calendar month on
which it started, provided that (a) if the period started on the last
Banking Day in a calendar month or if there is no such numerically
corresponding day, it shall end on the last Banking Day in such next calendar
month and (b) if such numerically corresponding day is not a Banking Day,
the period shall end on the next following Banking Day in the same calendar
month but if there is no such Banking Day it shall end on the preceding Banking
Day and “months” and “monthly”
shall be construed accordingly;


 


“Mortgage”
means, in relation to each Ship, a first priority statutory mortgage or first
preferred mortgage of such Ship executed or (as the context may require) to be
executed by the relevant Owner in favour of the Agent as security agent and
trustee on behalf of the Finance Parties in the agreed form and “Mortgages” means all of them;


 


“Mortgaged Ship”
means, at any relevant time, any Ship which is at such time subject to a
Mortgage and the Earnings, Insurances and Requisition Compensation (as defined
in the Ship Security Documents for such Ship) of which are subject to an
Encumbrance pursuant to the


 


10

















 


relevant Ship Security Documents and a Ship
shall for the purposes of this Agreement be deemed to be a Mortgaged Ship as
from the date that the Mortgage of that Ship shall have been executed and
registered in accordance with this Agreement until whichever shall be the
earlier of (a) the payment in full of the amount required to be paid to the
Banks or to the Agent on their behalf pursuant to clause 4.5 following the sale
or Total Loss of such Ship, (b) the date on which all moneys owing under the
Security Documents have been repaid in full and (c) the date upon which the
Agent deletes or procures the deletion of the relevant Mortgage in accordance
with the terms of this Agreement;


 


“NASDAQ” means
the stock exchange run by the US National Association of Securities Dealers
with the main exchange located in the United States of America, originally an
acronym for the National Association of Securities Dealers Automatic
Quotations;


 


“Operator” means
any person who is from time to time during the Security Period concerned in the
operation of the Ship and falls within the definition of “Company”
set out in rule 1.1.2 of the ISM Code;


 


“Owners” means
the Initial Owners and the Additional Owners and “Owner”
means any of them;


 


“Owner’s Guarantee”
means, in relation to each Owner, the guarantee issued or (as the context may
require) to be issued by that Owner in favour of the Agent in the agreed form
as (inter alia) security for the Loan and “Owner’s Guarantees”
means all of them;


 


“Participating Member State”
means any member state of the European Communities that adopts or has adopted
the euro as its lawful currency in accordance with the legislation of the
European Community relating to economic and monetary union;


 


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


 


“Permitted Liens”
means any lien on a Ship for:


 


(a)                        master’s,
officer’s or crew’s wages outstanding in the ordinary course of trading;


 


(b)                       salvage and any
ship repairer’s or outfitter’s possessory lien for a sum not (except with the
prior written consent of the Agent) exceeding the Casualty Amount (as defined
in the relevant Deed of Covenant or relevant Mortgage);


 


(c)                        damages
arising as a result of a claim in tort provided that the same is fully covered
by insurance subject to a reasonable deductible; and


 


(d)                       general average
and for necessaries incurred in the ordinary course of trading and have not
been outstanding for more than 60 days or are being contested in good faith in
a manner satisfactory to the Banks in their sole discretion;


 


“Pollutant”
means and includes oil and its products, any other polluting, toxic or
hazardous substance and any other substance whose release into the environment
is regulated or penalised by Environmental Laws;


 


“Pre-delivery Security
Assignment” means, in relation to any Additional Ship which is a
newbuilding, an assignment of the relevant Contract and the relevant Refund
Guarantee with respect to that Additional Ship executed or (as the context may
require) to be executed by the relevant Owner of that Additional Ship in favour
of the Agent as security agent and trustee on behalf of the Finance Parties in
the agreed form and “Pre-delivery Security
Assignments” means all of them;


 


“Protocol of Delivery and
Acceptance” means, in relation to the Initial Ships (other than
Ekavi and Electra) and any Additional Ship, the protocol of delivery and
acceptance to be signed by or on behalf of the relevant Seller and the relevant
Owner as buyer of such Ship evidencing


 


11

















 


the delivery and acceptance of such Ship pursuant to
the relevant Contract, such protocol to be in a form satisfactory to the Agent;


 


“Refund Guarantee”
means, in relation to any Additional Ship which is a newbuilding, the guarantee
issued or to be issued by the relevant Refund Guarantor in respect of the
relevant Builder’s obligations under the relevant Contract and any further
guarantee(s) to be issued by such Refund Guarantor in respect of such
obligations, pursuant to any agreement supplemental to the relevant Contract,
and any extensions, renewals or replacements thereto or thereof and “Refund Guarantees” means all of them;


 


“Refund Guarantee
Assignment Consent and Acknowledgements” means the acknowledgements
of notice, and consent to, the assignment in respect of any Refund Guarantee to
be given by the relevant Refund Guarantor in the form scheduled to the relevant
Pre-delivery Security Assignment;


 


“Refund Guarantor”
means, in relation to any Refund Guarantee, the refund guarantor stipulated
under the relevant Contract and includes its successors in title (which shall
be acceptable to the Agent in its sole discretion);


 


“Registry” means
the offices of the registrar, commissioner or representative of the relevant
Flag State who is duly authorised and empowered to register the relevant Ship,
the relevant Owner’s title to such Ship and the relevant Mortgage under the
laws and flag of the Flag State through the relevant Registry;


 


“Related Company”
of a person means any Subsidiary of such person, any company or other entity of
which such person is a Subsidiary and any Subsidiary of any such company or
entity;


 


“Relevant Jurisdiction”
means any jurisdiction in which or where the Borrower or any Owner is
incorporated, resident, domiciled, has a permanent establishment, carries on,
or has a place of business or is otherwise effectively connected;


 


“Relevant Period”
has the meaning given to that term in clause 8.6;


 


“Repayment Dates”
means the Facility A Repayment Dates and the Facility B Repayment Dates and “Repayment Date” means any of them;


 


“Repayment Schedule”
means the table specifying the schedule of repayment instalments for each
Advance of Facility B to be determined in accordance with clause 4.2.2;


 


“Requisition Compensation”
means all sums of money or other compensation from time to time payable during
the Security Period by reason of the Compulsory Acquisition of a Ship;


 


“Restricted Companies”
means the Borrower and its Related Companies and the Owners and their
respective Related Companies;


 


“Retention Accounts”
means interest bearing Dollar accounts of the Borrower opened or (as the
context may require) to be opened by the Borrower with the Account Bank and
includes any other account designated in writing by the Account Bank to be a
Retention Account for the purposes of this Agreement and “Retention
Account” means any of them;


 


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


 


(a)   (i)                      in the case of all Advances pursuant to Facility A and Facility B
(except for the Advance of Facility B relating to Everhard) one-sixth (1/6th)
of the repayment instalment falling due for payment pursuant to clauses 4.1 and
4.2 (as the same may have been reduced by any prepayment) on the next Repayment
Date after the relevant Retention Date; or


 


12

















 


(ii)              in the case of the
Advance of Facility B relating to Everhard that fraction of the repayment
instalment falling due for payment pursuant to clause 4.2 (as the same may have
been reduced by any prepayment) on the next Facility B Repayment Date relative
to Everhard after the relevant Retention Date, which fraction shall have a
numerator of one and a denominator equal to the number of months (including the
then current month) falling prior to the next Facility B Repayment Date
relative to Everhard; and;


 


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


 


“Retention Dates”
means the date falling one (1) month after the date of the relevant Drawdown
Date and each of the dates falling at monthly intervals thereafter up to the
date failing six (6) months prior to the Final Repayment Date and “Retention Date” shall be construed accordingly;


 


“Security Documents”
means:


 


(a)                        the Accounts Pledges;


 


(b)                       this Agreement;


 


(c)                        the Assignment of Intra-Group Loan Agreements;


 


(d)                       the Charter Assignments;


 


(e)                        the Contract Assignment Consents and Acknowledgements;


 


(f)                          the Deeds of Covenant;


 


(g)                       the General Assignments;


 


(h)                       the Manager’s Undertakings;


 


(i)                           the Master Swap Agreement;


 


(j)                           the Master Swap Assignment;


 


(k)                        the Mortgages;


 


(l)                           the Owner’s Guarantees;


 


(m)                     any Pre-delivery Security Assignments;


 


(n)                       any Refund Guarantee Assignment Consents and Acknowledgements;


 


(o)                       the Share Charges;


 


(p)                       any Tripartite Deed(s);


 


and any other documents as may have been or shall from
time to time after the date of this Agreement be executed to guarantee and/or
secure all or any part of the Loan, interest thereon and other moneys from time
to time owing by the Borrower pursuant to this Agreement and/or the Master Swap
Agreement (whether or not any such document also secures moneys from time to
time owing pursuant to any other document or agreement);


 


13

















 


“Security Parties”
means collectively the Borrower, the Builder, the Refund Guarantor, the Owners
and the Manager or any other person who may at any time be a party to any of
the Security Documents (other than the Finance Parties and the Account Bank)
and “Security Party” means any of them;


 


“Security Period”
means the period commencing on the date of this Agreement and terminating upon
discharge of the security created by the Security Documents by payment of all
money payable thereunder;


 


“Security Requirement”
means the amount in Dollars (as certified by the Agent whose certificate shall,
in the absence of manifest error, be conclusive and binding on the Borrower and
the Banks) which is at any relevant time one hundred and thirty five per cent
(135%) of the Loan;


 


“Security Value”
means the amount in Dollars (as certified by the Agent whose certificate shall,
in the absence of manifest error, be conclusive and binding on the Borrower and
the Banks) which, at any relevant time, is the aggregate of (a) the Fleet
Market Value as most recently determined in accordance with clause 8.2.2
and (b) the market value of any additional security for the time being
actually provided to the Banks pursuant to clause 8.2;


 


“Seller” means:


 


(a)                        in relation to
the Initial Ships (other than Ekavi and Electra), the seller of the Initial
Ships (other than Ekavi and Electra) under the relevant Contracts; and


 


(b)                       in relation to
any Additional Ship, the relevant seller or the relevant Builder of such
Additional Ship,


 


and “Sellers” means
all of them;


 


“SGX-ST” means
the Singapore Exchange Securities Trading Limited;


 


“Share Charge”
means, in relation to each Owner, the charge of all of the issued shares in the
capital of such Owner executed or (as the context may require) to be executed
by the Borrower (or such other direct shareholder of the Owner (being a
wholly-owned Subsidiary of the Borrower) as the Agent may require) in favour of
the Agent as security agent and trustee on behalf of the Finance Parties
pursuant to clause 8.1.14 such charge to be in form and substance acceptable to
the Agent and “Share Charges” means all of them;


 


“Ship Security Documents”
means, in relation to any Ship, the relevant Mortgage, the relevant Deed of
Covenant, the relevant General Assignment, any Charter Assignment, any
Tripartite Deed and the relevant Manager’s Undertaking and “Ship Security Document” means any of them;


 


“Ships” means
the Initial Ships and the Additional Ships and “Ship”
means any of them;


 


 “SMC” means a safety management certificate issued in respect
of the Ship in accordance with rule 13 of the ISM Code;


 


“Spill” means
any actual or threatened emission, spill, release or discharge of a Pollutant
into the environment;


 


“Subsidiary” of
a person means any company or entity directly or indirectly controlled by such
person, and for this purpose “control” means
either the ownership of more than fifty per cent (50%) of the voting share
capital (or equivalent rights of ownership) of such company or entity or the
power to direct its policies and management, whether by contract or otherwise;


 


“Substitution Certificate”
means a certificate substantially in the form of Schedule 5 (or in such other
form as the Agent shall approve or require);


 


14

















 


“Swap Account”
means an interest bearing Dollar account of the Borrower opened or (as the
context may require) to be opened by the Borrower with the Account Bank and
includes any other account designated in writing by the Account Bank to be a
Swap Account for the purpose of this Agreement;


 


“Swap Bank”
means the bank listed in Schedule 1, Part 2 and includes its successors in
title, Assignees and transferees;


 


“Taxes” includes
all present and future taxes, levies, imposts, duties, fees or charges of
whatever nature together with interest thereon and penalties in respect thereof
and “Taxation” shall be construed
accordingly;


 


“Termination Date”
means:


 


(a)                        in relation to Facility A, the date which is the earlier of (i) the
date upon which the final drawdown with respect to the Initial Ships occurs and
(ii) 31 August 2006; and


 


(b)                       in relation to Facility B, the date which falls three (3) years
after the date of this Agreement;


 


“Total Facility A
Commitments” means the aggregate of the Facility A Commitments,
being the lesser of (a) one hundred and forty five million Dollars
($145,000,000) and (b) forty percent (40%) of the Fleet Market Value at the
date of this Agreement;


 


“Total Facility B
Commitments” means the aggregate of the Facility B Commitments,
being one hundred and fifty million Dollars ($150,000,000) at the date of this
Agreement;


 


“Total Assets” means, at any time in
respect of the Borrower’s Group, the amount of total assets of the Borrower’s
Group on a consolidated basis which would be included as total assets in a
consolidated balance sheet of the Borrower’s Group in accordance with GAAP
drawn up at such time;


 


“Total Debt” means, at any time, the
aggregate outstanding principal, capital or nominal amount of all Borrowed
Money of the Borrower’s Group calculated on a consolidated basis at that time;


 


“Total Liabilities” means, at any time
in the respect of the Borrower’s Group, the amount of total liabilities of the
Borrower’s Group on a consolidated basis which would be included as total
liabilities in the consolidated balance sheet of the Borrower’s Group in
accordance with GAAP drawn up at such time;


 


“Total Loss”
means:


 


(a)                        actual, constructive, compromised or arranged total loss of a Ship;
or


 


(b)                       the Compulsory Acquisition of a Ship; or


 


(c)                        the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of a Ship (other than where the same amounts to the
Compulsory Acquisition of such Ship) by any Government Entity, or by persons
acting or purporting to act on behalf of any Government Entity, unless such
Ship be released and restored to the relevant Owner from such hijacking, theft,
condemnation, capture, seizure, arrest, detention or confiscation within thirty
(30) days after the occurrence thereof;


 


“Transaction”
has the meaning ascribed to it in the Master Swap Agreement;


 


“Tripartite Deed”
means in relation to any Ship which is the subject of a bareboat or demise
charter, a tripartite deed executed or (as the context may require) to be
executed between the relevant bareboat charterer of such Ship, the relevant
Owner of such Ship and the Agent in form and substance satisfactory to the
Agent in its sole discretion and “Tripartite Deeds”
means all of them; and


 


15

















 


“Underlying Documents”
means collectively the Contracts, the Refund Guarantees, the Management
Agreements, any Charter(s) and the Intra-Group Loan Agreements.


 


1.3       Headings


 


Clause headings and the table of contents
are inserted for convenience of reference only and shall be ignored in the
interpretation of this Agreement.


 


1.4       Construction of certain terms


 


In this Agreement, unless the context
otherwise requires:


 


1.4.1                         references to clauses and schedules are to be construed as
references to clauses of, and schedules to, this Agreement and
references to this Agreement include its schedules;


 


1.4.2                         references to (or to any specified provision of) this Agreement or
any other document shall be construed as references to this Agreement, that
provision or that document as in force for the time being and as amended in
accordance with terms thereof, or, as the case may be, with the agreement of
the relevant parties;


 


1.4.3                         references to a “regulation”
include any present or future regulation, rule, directive, requirement, request
or guideline (whether or not having the force of law) of any agency, authority,
central bank or government department or any self-regulatory or other national
or supra-national authority;


 


1.4.4                         words importing the plural shall include the singular and vice
versa;


 


1.4.5                         references to a time of day are to London time;


 


1.4.6                         references to a person shall be construed as references to an
individual, firm, company, corporation, unincorporated body of persons or any
Government Entity;


 


1.4.7                         references to a “guarantee”
include references to an indemnity or other assurance against financial loss
including, without limitation, an obligation to purchase assets or services as
a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly;


 


1.4.8                         references to acts or things to be done by the Agent and references
to the Agent entering into a Security Document are to be construed as acts or
thing to be done for or by the Agent, or security to be given in favour of the
Agent, in the Agent’s capacity as agent, security agent and trustee on behalf
of the Banks; and


 


1.4.9                         references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended.


 


1.5       Agreed forms


 


In this Agreement, any document expressed
to be “in the agreed form” means a document in
a form agreed by (and for the purposes of identification signed by or on behalf
of) the Borrower and the Banks or (in the case of any of the other Security
Documents) a document in the form actually executed by both the relevant
Security Party or relevant Security Parties and the Agent and/or the Banks.


 


1.6       Contracts (Rights of Third Parties) Act 1999


 


No term of this Agreement is enforceable
under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a
party to this Agreement.


 


16

















 


1.7       Effectiveness of Majority Banks decision


 


Where this Agreement provides for any
matter to be determined by reference to the opinion of the Majority Banks or to
be subject to the consent or request of the Majority Banks or for any action to
be taken on the instructions of the Majority Banks, such opinion, consent,
request or instructions shall (as between the Banks and the Agent) only be
regarded as having been validly given or issued by the Majority Banks if all
the Banks and the Agent shall have received prior notice of the matter on which
such opinion, consent, request or instructions are required to be obtained and
a majority of the Banks and the Agent shall have given or issued such opinion,
consent, request or instructions.


 


2          The Facilities


 


2.1       The Facilities


 


Subject to the terms of this Agreement, the
Banks agree to make available to the Borrower:


 


2.1.1                         a Dollar term
loan facility in an aggregate amount equal to the Total Facility A Commitments;
and


 


2.1.2                         a Dollar
revolving credit facility in an aggregate amount equal to the Total Facility B
Commitments.


 


2.2       Obligations several


 


The obligations of each Bank under this
Agreement are several; the failure of any Bank to perform such obligations
shall not relieve any other Bank, the Agent, the Swap Bank or the Borrower of
any of their respective obligations or liabilities under this Agreement or the
Master Swap Agreement nor shall the Agent be responsible for the obligations of
any Bank or Swap Bank (except for its own obligations, if any, as a Bank or
Swap Bank) nor shall any Bank or Swap Bank be responsible for the obligations
of any other Bank or Swap Bank under this Agreement.


 


2.3       Interests several


 


Notwithstanding any other term of this
Agreement, the interests of the Arranger, the Swap Bank, the Agent and the
Banks are several and the amount due to the Arranger, the Swap Bank, the Agent
(for its own account) and to each Bank and/or the Swap Bank is a separate and
independent debt.  The Agent, the
Arranger, the Swap Bank, and each Bank shall have the right to protect and
enforce their respective rights arising out of this Agreement and it shall not
be necessary for the Agent, the Arranger, the Swap Bank, or any Bank (as the
case may be) to be joined as an additional party in any proceedings for this
purpose.


 


2.4       Drawdown


 


Subject to the terms and conditions of this
Agreement, each Advance shall be made following receipt by the Agent from the
Borrower of a Drawdown Notice not later than 10 a.m. on the third Banking Day
before the Drawdown Date relative to such Advance, which shall be a Banking Day
falling within the Drawdown Period, on which such Advance is intended to be
made. A Drawdown Notice shall be effective on actual receipt by the Agent and,
once given, shall, subject as provided in clause 3.6.1, be
irrevocable.  No Advances shall be
available after the Termination Date, and subject to the provisions of this
Agreement more than one Advance may be made on the same date.


 


2.5       Timing and limitation of Advances of Facility A


 


2.5.1                         The amount of each Advance of Facility A shall, subject to the
following provisions of this clause 2.5, be for such amount as is
specified in the Drawdown Notice for that Advance.


 


2.5.2                       Each Advance of
Facility A shall be made solely for the purpose set out in clause 1.1(i).


 


17

















 


2.5.3                       No Advance of
Facility A shall be available if the making of that Advance would result in the
aggregate of all of the Advances of Facility A drawndown at any relevant time
exceeding the Total Facility A Commitments.


 


2.5.4                         No Advance of
Facility A which is to be applied in financing or refinancing an Initial Ship
shall exceed the amount set out alongside that Initial Ship in Part 3 of
Schedule 2.


 


2.5.5                         Other than as
agreed by the Agent, all Advances of Facility A relative to the Initial Ships
(other than Ekavi and Electra) shall be paid directly to the Sellers of the
Initial Ships (other than Ekavi and Electra) and shall only be made available
on the Delivery Date for each of the Initial Ships (other than Ekavi and
Electra).


 


2.5.6                         No Advance of
Facility A shall be made available without that Initial Ship (other than Ekavi
and Electra) having an Acceptable Employment in place.


 


2.6       Timing and limitation of Advances of Facility B


 


2.6.1                         The amount of
each Advance of Facility B shall, subject to the following provisions of this
clause 2.6, be for such amount as is specified in the Drawdown Notice of that
Advance.


 


2.6.2                         Each Advance
of Facility B shall be made solely for the purpose set out in clause 1.1(ii).


 


2.6.3                         No part of
Facility B shall be made available unless the vessel which the relevant
Additional Owner intends to acquire using the relevant intra-group loan from
the Borrower has been approved as an Additional Ship, which approval shall only
be granted by the Agent if the relevant vessel has met all the Additional Ship
Selection Criteria.  In relation to the
acquisition by an Additional Owner of a vessel the Borrower shall be required
to follow the procedure set out below:


 


(a)              if the Borrower wishes
to drawdown any part of Facility B the Borrower shall first send to the
Arranger and the Agent a request (the “Request”) which
shall include the information described below and a copy of the inspection
report for the relevant vessel;


 


(b)             where the Request relates
to a second-hand vessel, the Request shall include the following information:


 


Name of vessel


Flag


Official Number


IMO Number


Purchase price


Year built


Type of vessel


Gross tonnage/net tonnage


Deadweight/cubic capacity/TEU of vessel


Classification Society


Class


Seller


Expected delivery date


Charter information (if any), including
name and credit rating (if any) of charterer, charter rate, % commission,
period of charter, options (if any)


Typical running costs for this type of
vessel


Next drydock: expected date of drydock and
estimated amount


Date of next special survey


Requested loan amount


Repayment schedule


Lightweight displacement of vessel;


 


(c)              where the Request
relates to a vessel which is a newbuilding, the Request shall include the
following information:


 


18

















 


Builder


Hull No.


Type of vessel


Gross tonnage/net tonnage


Deadweight/cubic capacity/TEU of vessel


Date of Contract


Date keel laid


Original Contract Price


Purchase price


Payment terms under Contract


Seller


Scheduled delivery date


Date when Buyer has option to cancel the Contract for excessive delay


Name of Refund Guarantor


Type of Refund Guarantee


Classification Society


Class


Flag on delivery.


 


2.6.4                         With respect
to any vessel to be financed under Facility B, the Arranger and the Agent will
use their best efforts to respond to any Request as soon as possible but in any
event within ten (10) Banking Days of the receipt of the Request.


 


2.6.5                                 No
Advance of Facility B shall:


 


(a)              exceed whichever shall
be the lesser of (i) the Contract Price of Everhard or the Additional Ship to
be financed by way of such Advance of Facility B and (ii) the Fair Market Value
of Everhard or the Additional Ship to be financed by way of such Advance of
Facility B and in the case where the Additional Ship, is a newbuilding, the
Expected Project Costs approved by the Agent in its sole discretion; nor


 


(b)             be applied in financing
Everhard and any Additional Ship which has not been approved by the Agent as an
Additional Ship (the “Approval”) in
accordance with clauses 2.6.3 and 2.6.4.


 


2.6.6                         In relation to an Additional Ship which is a newbuilding, Contract
Instalment Advances and a Delivery Date Advance for that Additional Ship shall
be in sums of up to the amounts set out in the relevant Contract and applied in
or towards payment of the instalment of the Contract Price for that Additional
Ship and may be made on any Banking Day falling within the Drawdown Period
relative to Facility B up to and in the case of the Delivery Date Advance upon
the Delivery Date for that Additional Ship subject to the relevant instalment
of the Contract Price for that Additional Ship having become due and payable by
the relevant Owner under such Contract.


 


2.6.7                         Any Advance
constituting a Contract Instalment Advance or a Delivery Date Advance shall be applied
in paying such relevant instalment of the relevant Contract Price and shall be
paid by the Banks (whether or not such Advance has been credited to the
relevant Earnings Account) to the relevant Builder or, as the case may be,
Seller and any Advance which is to be applied in meeting Expected Project Costs
approved by the Agent in its sole discretion shall be paid by the Agent to the
credit of the relevant Earnings Account as appropriate.


 


2.6.8                         Each Advance
of Facility B shall be subject to:


 


(a)              the ratio of Total Debt
to Fleet Market Value not exceeding sixty percent (60%) both prior to and
following the drawdown of the relevant Advance of Facility B;


 


(b)             the aggregate of all
Advances of Facility B drawndown at any relevant time never exceeding the Total
Facility B Commitments; and


 


19

















 


(c)              the making of such
Advance of Facility B not resulting in the Security Value being less than the
Security Requirement.


 


2.7       Maximum number of Advances


 


The Borrower may not deliver a Drawdown
Notice in relation to Facility B if as a result of the proposed Drawdown more
than ten (10) Advances subject to different Interest Periods would be
outstanding under Facility B.


 


2.8       Expected Project Costs


 


No Advance of Facility B shall constitute
Expected Project Costs only.  Any
Drawdown Notices for Advances constituting (in part) Expected Project Costs
shall be accompanied with invoices or pro-forma estimate invoices itemised in a
written inventory each in a form and substance acceptable to the Agent in its
sole discretion certified by an officer of the Borrower and presented to the
Agent no later than fifteen (15) Banking Days before the relevant Drawdown
Date.


 


2.9       Availability


 


Upon receipt of a Drawdown Notice complying
with the terms of this Agreement the Agent shall notify each Bank thereof of
the Drawdown Date and, subject to the provisions of clause 9, on the date
specified in the Drawdown Notice each Bank shall make available to the Borrower
its portion of the Advance in accordance with clause 6.2.  The Borrower acknowledges that payment of any
Advance to a Seller or any Contract Instalment Advance or Delivery Date Advance
to a Builder in accordance with clause 6.2 shall satisfy the obligation of
the Banks to lend that Advance to the Borrower under this Agreement.


 


2.10     Termination of Commitment


 


2.10.1                   Any part of the
Commitment undrawn on the Termination Date shall thereupon be automatically
cancelled.


 


2.10.2                   The Borrower shall
upon three (3) Banking Days notice to the Agent be entitled to permanently
reduce or terminate any undrawn portion of Facility B (being one million
Dollars ($1,000,000) or any larger sum which is an integral multiple of one
million Dollars ($1,000,000)) without penalty.


 


2.11     Application of proceeds


 


Without prejudice to the Borrower’s
obligations under clause 8.1.3, the Banks shall have no responsibility for
the application of proceeds of the Loan (or any part thereof) by the Borrower.


 


3          Interest and Interest Periods


 


3.1       Normal interest rate


 


The Borrower shall pay interest on each
Advance or, as the case may be the Facility A Loan, or the Facility B Loan or
the Loan in respect of each Interest Period relating thereto on each Interest
Payment Date (or, in the case of Interest Periods of more than three (3)
months, by instalments, the first three (3) months from the commencement of the
Interest Period and the subsequent instalments at intervals of three (3) months
or, if shorter, the period from the date of the preceding instalment until the
Interest Payment Date relative to such Interest Period) at the rate per annum
determined by the Agent to be the aggregate of (a) the Margin, (b) the
Additional Cost and (c) LIBOR for such Interest Period.


 


3.2       Selection of Interest Periods


 


The Borrower may by notice received by the
Agent not later than 10 a.m. on the second Banking Day before the
beginning of each Interest Period specify whether such Interest Period shall
have a duration of one (1), three (3) or six (6) months or such other period as
the Borrower may select


 


20

















 


and the Banks may, in their absolute
discretion, agree.  Provided always that
if on any date upon which an Interest Period falls to be selected by the
Borrower pursuant to this clause 3.2 a Transaction or Transactions (which
is/are effective or which shall become effective during the relevant Interest
Period) shall have been entered into between the Swap Bank and the Borrower
pursuant to a Master Swap Agreement LIBOR shall during the period of any such
Transaction(s) and for an amount equal to the notional amount of such
Transaction(s) be determined by reference to the rate for deposits in Dollars
displayed on Telerate page 3750 (British Bankers’ Association Settlement Rates)
in accordance with the proviso to the definition of LIBOR and, for the
avoidance of doubt, LIBOR for that Advance or Tranche (or as the case may be)
part of the Loan which exceeds the notional amount of the Transaction(s) shall
be determined by reference to the rate for deposits in Dollars referred to in
the definition of LIBOR but excluding the proviso to such definition.  A maximum of three (3) one (1) month Interest
Periods will be permitted in any one calendar year.


 


3.3       Determination of Interest Periods


 


Every Interest Period shall be of the
duration specified by the Borrower pursuant to clause 3.2 but so that:


 


3.3.1                         the first
Interest Period in respect of each Advance shall commence on the date on which
such Advance is made;


 


3.3.2                         the initial
Interest Period in respect of each Advance after the first Advance of Facility
A shall end on the same day as the then current Interest Period for the
Facility A Loan and, on the last day of such Interest Period, all Advances of
Facility A shall be consolidated into, and shall thereafter constitute the
Facility A Loan;


 


3.3.3                         each
subsequent Interest Period of each Advance of Facility B shall commence on the
last day of the previous Interest Period for that Advance of Facility B;


 


3.3.4                         if any
Interest Period for any Advance and/or the Facility A Loan and/or the Facility
B Loan and/or the Loan would otherwise overrun a Repayment Date, then, in the
case of the Final Repayment Date, such Interest Period or Interest Period shall
end on such Final Repayment Date, and in the case of any other Repayment Date
or Repayment Dates, the relevant Advance and/or the Facility A Loan and/or the
Facility B Loan and/or the Loan, as the case may be, shall be divided into
parts so that there is one part in the amount of the repayment instalment due on
each Repayment Date falling during that Interest Period and having an Interest
Period ending on the relevant Repayment Date and another part in the amount of
the balance of the relevant Advance and/or the Facility A Loan and/or the
Facility B Loan and/or the Loan having an Interest Period ascertained in
accordance with clause 3.2 and the other provisions of this
clause 3.3; and


 


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


 


The Borrower agrees that the Agent shall
have the right of requiring the Interest Periods for Advances of Facility B to
be consolidated so that interest is payable on the Facility B Loan on the same
Interest Payment Dates.  The Agent may at
any time during the Security Period require the Borrower to select an Interest
Period in respect of any Advance of Facility B that expires on the same
Interest Payment Date as other Advances of Facility B and/or the Facility B
Loan.  Thereafter the Borrower shall
select an Interest Period in accordance with clause 3.2 for the Loan until the
Agent agrees otherwise.


 


3.4       Default interest


 


If the Borrower fails to pay any sum
(including, without limitation, any sum payable pursuant to this
clause 3.4) on its due date for payment under any of the Security
Documents, the Borrower shall pay interest on such sum on demand from the due
date up to the date of actual payment (as well after as before judgment) at a
rate determined by the Agent pursuant to this clause 3.4.


 


21

















 


The period beginning on such due date and
ending on such date of payment shall be divided into successive periods of not
more than three (3) months as selected by the Agent each of which (other than
the first, which shall commence on such due date) shall commence on the last
day of the preceding such period.  The
rate of interest applicable to each such period shall be the aggregate (as
determined by the Agent) of (a) two per cent (2%) per annum, (b) the Margin,
(c) the Additional Cost and (d) LIBOR for such period.  Such interest shall be due and payable on the
last day of each such period as determined by the Agent and each such day
shall, for the purposes of this Agreement, be treated as an Interest Payment
Date, by reason of a declaration by the Agent under clause 10.2.2 or a
prepayment pursuant to clauses 4.3, 4.5, 8.2 or 12.1 provided that if such
unpaid sum is an amount of principal which became due and payable on a date
other than an Interest Payment Date relating thereto, the first such period
selected by the Agent shall be of a duration equal to the period between the
due date of such principal sum and such Interest Payment Date and interest
shall be payable on such principal sum during such period at a rate two per
cent (2%) above the rate applicable thereto immediately before it shall have
become so due and payable.  If, for the
reasons specified in clause 3.6.1, the Agent is unable to determine a rate
in accordance with the foregoing provisions of this clause 3.4, each Bank
shall promptly notify the Agent of the costs of funds to such Bank and interest
on any sum not paid on its due date for payment shall be calculated at a rate
determined by the Agent to be two per cent (2%) per annum above the aggregate
of the Margin, the Additional Cost and the cost of funds to such Bank.


 


3.5       Notification of Interest Periods and interest rate


 


The Agent shall notify the Borrower
promptly of the duration of each Interest Period and of each rate of interest
determined by it under this clause 3.


 


3.6       Market disruption; non-availability


 


3.6.1                         If and
whenever, at any time prior to the commencement of any Interest Period, the
Agent shall have determined (which determination shall, in the absence of
manifest error, be conclusive):


 


(a)              that adequate and fair
means do not exist for ascertaining LIBOR during such Interest Period; or


 


(b)             the Agent shall have
received notification from any of the Banks that deposits in Dollars are not
available to such Bank(s) in the ordinary course of business in sufficient
amounts to fund their Contributions for such Interest Period or, where
applicable, that the quotation for LIBOR (together with (where applicable) the
normal spread being paid by any such Bank in respect of Dollar borrowings) does
not accurately reflect the cost to such Bank(s) of obtaining such deposit;


 


the Agent shall forthwith give notice (a “Determination Notice”) thereof to the Borrower and to each
of the Banks.  A Determination Notice
shall contain particulars of the relevant circumstances giving rise to its
issue.  After the giving of any
Determination Notice the undrawn amount of any of the Commitments of all the
Banks shall not be borrowed until notice to the contrary is given to the
Borrower by the Agent.


 


3.6.2                         During the
period of ten (10) days after any Determination Notice has been given by the
Agent under clause 3.6.1, each Bank shall certify an alternative basis
(the “Substitute Basis”) for maintaining its
Contribution.  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 such 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 each
Bank notifies the Borrower that none of the circumstances specified in
clause 3.6.1 continues to exist whereupon the normal interest rate fixing
provisions of this Agreement shall apply.


 


22

















 


4          Repayment, prepayment and reborrowing


 


4.1       Repayment of Facility A Loan


 


The Borrower shall repay the Facility A
Loan by ten instalments, one such instalment to be repaid on each of the
Facility A Repayment Dates.  Subject to
the provisions of this Agreement, the amount of each such instalment (other
than the tenth and final instalment) shall be one million and five hundred
thousand Dollars ($1,500,000) and the amount of the tenth and final instalment
shall be one hundred and thirty one million five hundred thousand Dollars
($131,500,000).


 


If the Total Facility A Commitments are not
drawn in full, the amount of each repayment instalment shall be reduced
proportionately.


 


4.2       Repayment of Advances of Facility B Loan


 


4.2.1                         Subject as
hereinafter provided, the Borrower shall repay each Advance of Facility B by
instalments payable on each Facility B Repayment Date and in any event by the
Final Repayment Date.  The repayment
instalments of each Advance of Facility B shall be calculated by the Agent in
accordance with the following formula:


 


Amount of Advance


2 x (16 - (YA - YB))


 


Where:


 


YA is the year of acquisition of the
relevant Ship and YB is the year of construction of the relevant Ship, but so
that any part of an Advance not fully amortised using such formula shall form
part of the final repayment instalment of the relevant Advance.


 


4.2.2                         The Agent
shall immediately prior to the drawdown of any Advance of Facility B, prepare a
Repayment Schedule calculated in accordance with this clause 4.2 which shall,
when initialled by the Arranger, the Agent and the Borrower, be conclusive as
to the amount and timing of the repayment instalments for such Advance of
Facility B.  In the event that, for
whatever reason, the Arranger, the Agent and the Borrower shall not be able to
agree such Repayment Schedule, such Advance of Facility B shall not be made.


 


4.2.3                         If any
Advance of Facility B is prepaid by the Borrower under clause 4.3 so that the
amount outstanding for such Advance is equal to 40% or less of the original
amount of such Advance, then the Repayment Schedule shall be amended so that no
repayment shall be applicable until after the Termination Date relative to
Facility B and the repayment instalments shall be amended accordingly by the
Agent.


 


4.2.4                         The Borrower
may at any time prior to the Termination Date relative to Facility B but
subject to no Default having occurred re-borrow any part of Facility B that it
may have repaid and/or prepaid (but not cancelled in accordance with clause
2.10) upon the same terms and conditions as set out in this Agreement provided
that the Borrower may not re-borrow any part of Facility B following the
Termination Date.


 


4.2.5                         If an
Additional Ship which is a second hand vessel is not delivered to the relevant
Additional Owner under the relevant Contract for any reason whatsoever, then
the Borrower shall repay any Advance of Facility B constituting (in part)
Expected Project Costs representing a deposit under the relevant Contract not
later than ten (10) days after the date of expiry or termination of such
Contract.


 


4.3       Voluntary prepayment


 


The Borrower may prepay the Loan in whole
or part (being one million Dollars ($1,000,000) or any larger sum which is an
integral multiple of one million Dollars ($1,000,000) or any lesser sum


 


23

















 


approved by the Banks) on any Interest
Payment Date relating to the part of the Loan to be repaid without premium or
penalty.


 


4.4       Additional voluntary prepayment


 


The Borrower may also prepay, without
premium or penalty, but without prejudice to its obligations under clauses 3.6,
4.7, 6.7 and 12.2:


 


4.4.1                         the
Contribution of any Bank to which the Borrower shall have become obliged to pay
additional amounts under clauses 3.6 or 12.2; or


 


4.4.2                         any Bank’s
Contribution to which a Substitute Basis applies by virtue of clause 3.6.2.


 


Upon any notice of such prepayment being
given, the Commitment of the relevant Bank shall be reduced to zero.


 


4.5       Prepayment on Total Loss and Sale


 


On a Ship becoming a Total Loss or suffering
damage or being involved in an incident which in the opinion of the Banks may
result in such Ship being subsequently determined to be a Total Loss or on any
Ship being sold with the prior written consent of the Agent, the obligation of
the Banks to make any further Advance under this Agreement (other than any Advance(s) relating to
Additional Ship(s) which have already been approved by the Agent and (a) in
respect of which Additional Ship(s) a Contract or Contracts has/have been
executed, (b) in relation to which Advance(s) all conditions precedent to
drawdown have been fully satisfied and (c) no Default has occurred or would
arise as a result of the making of such Advance(s)) shall immediately
cease and no further Advances shall be available until the Borrower has prepaid
an amount equal to one hundred and ten per cent (110%) of the Loan multiplied
by a fraction of which the numerator is equal to the Fair Market Value of such
Ship and the denominator is equal to the Fleet Market Value (i.e.


 


	
   

  	
  (Loan x 110%) x

  	
  Fair Market Value of Ship

  
	
   

  	
   

  	
  Fleet Market Value).

  



 


Such prepayment must be made not later than
the date falling one hundred and twenty (120) days after that on which such
Ship became a Total Loss or, if earlier, on the date upon which the insurance
proceeds in respect of such Total Loss are or Requisition Compensation is
received by the Borrower (or the Agent/any of the Banks pursuant to the
Security Documents) or immediately on the completion of the sale of such Ship.  Any such prepayment shall be applied first in
prepayment of the Advance or Advances relating to that Ship and any balance
shall be applied in prepayment of Facility A and Facility B on a pro-rata
basis.  For the purpose of this
Agreement, a Total Loss shall be deemed to have occurred:


 


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


 


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


 


4.5.3                         in the case
of a compromised or arranged total loss, on the date upon which a binding
agreement as to such compromised or arranged total loss has been entered into
by the insurers of a Ship;


 


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


 


24

















 


4.5.5                         in the case
of hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of a Ship (other than where the same amounts to Compulsory
Acquisition of such Ship) by any Government Entity, or by persons purporting to
act on behalf of any Government Entity, which deprives the Borrower of the use
of such Ship for more than thirty (30) days, upon the expiry of the period of
thirty (30) days after the date upon which the relevant hijacking, theft,
condemnation, capture, seizure, arrest, detention or confiscation occurred.


 


4.6       Mandatory prepayments


 


The Borrower shall immediately prepay such
part of the Loan as may at any time be necessary to ensure that the Security
Value is not less than the Security Requirement.


 


4.7       Amounts payable on prepayment


 


Any prepayment of all or part of the Loan
under this Agreement including, without limitation, pursuant to clauses 4.3,
4.5, 8.2.1 and 12.1 shall be made together with:


 


4.7.1                         accrued
interest on the amount to be prepaid to the date of such prepayment;


 


4.7.2                         any
additional amount payable under clause 6.7 or 12.2; and


 


4.7.3                         all other
sums then payable by the Borrower to the Banks under this Agreement and the
Master Swap Agreement or any of the other Security Documents including, without
limitation, any amounts payable under clause 11.


 


4.8       Notice of prepayment; reduction of repayment
instalments


 


No prepayment may be effected under
clause 4.3 unless the Borrower shall have given the Agent (who shall
notify each Bank thereof of the intended repayment) at least fifteen (15) days’
notice of its intention to make such prepayment.  Every notice of prepayment shall be effective
only on actual receipt by the Agent, shall be irrevocable, shall specify the
amount to be prepaid and shall oblige the Borrower to make such prepayment on
the date specified.


 


No amount of Facility A which is prepaid
may be reborrowed and any amount or the Loan prepaid pursuant to
clause 4.3 or clause 8.2.1 shall be applied in the case of a
prepayment of Facility A in reducing the repayment instalments under
clause 4.1 on a pro rata basis and in the case of a prepayment of Facility
B (but subject to clause 4.2.3) in reducing the repayment instalments under
clause 4.2.1 on a pro-rata basis.


 


The Borrower may not prepay the Loan or any
part thereof save as expressly provided in this Agreement.


 


4.9       Master Swap Agreement, Repayments and Prepayments


 


4.9.1                         Notwithstanding
any provision of the Master Swap Agreement to the contrary, in the case of a
prepayment of all or part of the Loan (including, without limit, upon a Total
Loss in accordance with clause 4.5 and under clause 8.2) then subject
to clause 4.9.2 the Swap Bank shall be entitled but not obliged (and,
where relevant, may do without the consent of the Borrower, where it would
otherwise be required whether under the Master Swap Agreement or otherwise) to
amend, re-book, supplement, cancel, close out, net out, terminate, liquidate,
transfer or assign all or any part of the rights, benefits and obligations
created by any Transaction and/or the Master Swap Agreement and/or to obtain or
re-establish any hedge or related trading position in any manner and with any
person the Swap Bank in their absolute discretion may determine and both the
Swap Bank’s and the Borrower’s continuing obligations under any Transaction
and/or the Master Swap Agreement shall, unless agreed otherwise by the Swap
Bank, be calculated so far as the Swap Bank considers it practicable by
reference to the amended repayment Schedule for the Loan taking into
account the fact that less than the full amount of the Loan remains
outstanding.


 


25

















 


4.9.2                         If less than
the full amount of or the Loan remains outstanding, following a prepayment
under this Agreement and the Swap Bank in its absolute discretion agrees,
following a written request of the Borrower, that the Borrower may be permitted
to maintain all or part of a Transaction in an amount not wholly matched with
or linked to all or part of the Loan, the Borrower shall within ten (10) days
of being notified by the Swap Bank of such requirement, provide the Swap Bank
with, or procure the provision to the Swap Bank of, such additional security as
shall in the opinion of the Swap Bank be adequate to secure the performance of
such Transaction, which additional security shall take such form, be
constituted by such documentation and be entered into between such parties, as
the Swap Bank in its absolute discretion may approve or require, and each
document comprising such additional security shall constitute a Credit Support
Document.


 


4.9.3        The Borrower shall on the first written demand of the Swap Bank
indemnify the Swap Bank in respect of all losses, costs and expenses
(including, but not limited to, legal costs and expenses) incurred or sustained
by the Swap Bank as a consequence of or in relation to the effecting of any
matter or transactions referred to in this clause 4.9.


 


4.9.4        Notwithstanding any provision of the Master Swap Agreement to the
contrary, if for any reason a Transaction has been entered into but the Loan is
not drawn down under this Agreement then, subject to clause 4.9.5, the
Swap Bank shall be entitled but not obliged (and, where relevant, may do so
without the consent of the Borrower where it would otherwise be required
whether under the Master Swap Agreement or otherwise) to amend, re-book,
supplement, cancel, close out, net out, terminate, liquidate, transfer or
assign all or any part of the rights, benefits and obligations created by such
Transaction and/or the Master Swap Agreement and/or to obtain or re-establish
any hedge or related trading position in any manner and with any person the
Swap Bank in its absolute discretion may determine.


 


4.9.5        If a Transaction has been entered into but the Loan is not drawn
down under this Agreement and the Swap Bank in its absolute discretion agrees,
following a written request of the Borrower, that the Borrower may be permitted
to maintain all or part of a Transaction, the Borrower shall within ten (10)
days of being notified by the Swap Bank of such requirement, provide the Swap
Bank with, or procure the provision to the Swap Bank of, such additional
security as shall in the opinion of the Swap Bank be adequate to secure the
performance of such Transaction, which additional security shall take such
form, be constituted by such documentation and be entered into between such
parties, as the Swap Bank in its absolute discretion may approve or require,
and each document comprising such additional security shall constitute a Credit
Support Document for the purposes of the Master Swap Agreement and/or
otherwise.


 


4.9.6        Without prejudice to or limitation of the obligations of the
Borrower under clause 4.9.3, in the event that the Swap Bank exercises any
of its rights under clauses 4.9.1, 4.9.2, 4.9.4 and 4.9.5 and such
exercise results in all or part of a Transaction being terminated such
Transaction or the part thereof terminated (which shall for the purposes hereof
be treated as a separate Transaction) in each case shall be treated under the
Master Swap Agreement in the same manner as if it were a Terminated Transaction
(as defined in Section 14 of the Master Swap Agreement) pursuant to a
Termination Event (as so defined in that Section 14) with the Borrower being
the sole Affected Party (as defined in the Master Swap Agreement) and,
accordingly, the Swap Bank shall be permitted to recover from the Borrower a
payment for early termination calculated in accordance with the provisions of
Section 6(e)(ii) (1) of the Master Swap Agreement in respect of such
Transaction.


 


5          Commitment commission, fees and expenses


 


5.1       Fees


 


The Borrower shall pay to the Agent for
distribution to the Banks on each Financial Quarter Day and on the Final
Repayment Date relative to Facility B or such earlier date upon which the Total
Facility B Commitments is reduced to zero, commitment commission computed from
the date of this Agreement at the rate of zero point four per cent (0.4%) per
annum on the daily undrawn amount of the Total Facility B Commitments.


 


26

















 


The commitment commission referred to in
this clause 5.1 shall be payable by the Borrower to the Agent whether or not
any part of the Total Facility B Commitments is ever advanced.


 


The Borrower shall pay any fees due under
the Fee Letter to the Agent and/or the Arranger (as applicable upon the terms
and conditions set out in the Fee Letter).


 


5.2       Expenses


 


The Borrower shall pay to the Finance
Parties on a full indemnity basis on demand all reasonable expenses (including
legal, printing and out-of-pocket expenses) incurred by the Finance
Parties:


 


5.2.1        in connection with the negotiation, preparation, execution and,
where relevant, registration of the Security Documents and/or the Master Swap
Agreement and of any amendment or extension of or the granting of any waiver or
consent under, any of the Security Documents and/or the Master Swap Agreement;
and


 


5.2.2        in contemplation of, or otherwise in connection with, the
enforcement of, or preservation of any rights under, any of the Security
Documents and/or the Master Swap Agreement, or otherwise in respect of the
moneys owing under any of the Security Documents and/or the Master Swap
Agreement together with interest at the rate referred to in clause 3.4
from the date on which such expenses were incurred to the date of payment (as
well after as before judgment).


 


5.3       Value Added Tax


 


All fees and expenses payable pursuant to
this clause 5 shall be paid together with value added tax or any similar
tax (if any) properly chargeable thereon. 
Any value added tax chargeable in respect of any services supplied by
any of the Finance Parties under this Agreement shall, on delivery of the value
added tax invoice, be paid in addition to any sum agreed to be paid hereunder.


 


5.4       Stamp and other duties


 


The Borrower shall pay all stamp,
documentary, registration or other like duties or taxes (including any duties
or taxes payable by any Finance Party) imposed on or in connection with any of
the Underlying Documents, the Security Documents and/or the Master Swap
Agreement or the Loan and shall indemnify the Finance Parties against any
liability arising by reason of any delay or omission by the Borrower to pay
such duties or taxes.


 


6          Payments and taxes; accounts and calculations


 


6.1       No set-off or counterclaim


 


The Borrower acknowledges that in
performing their obligations under this Agreement the Banks will be incurring
liabilities to third parties in relation to the funding of amounts to the
Borrower, such liabilities substantially matching the liabilities of the
Borrower to the Banks and that it is reasonable for the Banks to be entitled to
receive payments from the Borrower gross on the due date in order that the
Banks are put in a position to perform its matching obligations to the relevant
third parties.  Accordingly, and/or the
Master Swap Agreement 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, subject as provided in clause 6.7, free and
clear of any deductions or withholdings, in Dollars on the due date to the
account of the Agent or to such account at such bank in such place as the Agent
may from time to time specify for this purpose. 
Save as otherwise provided by any relevant Security Document, such
payments shall be for the account of all the Banks and the Agent shall
forthwith distribute such payments in like funds as are received by the Agent
to the Banks rateably in accordance with their Commitments or Contributions, as
the case may be.


 


27

















 


6.2       Payment by the Banks


 


All sums to be advanced by the Banks to the
Borrower under this Agreement in respect of the Loan shall be remitted in
Dollars on the date of the Drawdown Date for the relevant Advance to the
account of the Agent at such bank as the Agent may have notified to the Banks
and shall be paid by the Agent on such date in like funds as are received by
the Agent to the account of the Borrower and/or the Builder and/or the Seller
as specified in the Drawdown Notice for such Advance.


 


6.3       Agent may assume receipt


 


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


 


6.4       Non-Banking Days


 


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


 


6.5       Calculations


 


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


 


6.6       Certificates conclusive


 


Any certificate or determination of the
Agent or any Bank as to any rate of interest or any other amount pursuant to
and for the purposes of any of the Security Documents shall, in the absence of
manifest error, be conclusive and binding on the Borrower and (in the case of a
certificate or determination by the Agent) on the Banks.


 


6.7       Grossing-up for Taxes


 


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


 


28

















 


6.8       Loan account


 


Each Bank and the Swap Bank shall maintain,
in accordance with its usual practice, an account evidencing the amounts from
time to time lent by, owing to and paid to it under the Security Documents and/or
the Master Swap Agreement.  The Agent
shall maintain a control account (which shall be the “account
current” referred to in certain of the Mortgages) showing the Loan
and other sums owing by the Borrower under the Security Documents and/or the
Master Swap Agreement and all payments in respect thereof made by the Borrower
from time to time.  The control account
shall, in the absence of manifest error, be conclusive as to the amount from
time to time owing by the Borrower under the Security Documents and/or the
Master Swap Agreement.


 


7          Representations and warranties


 


7.1       Continuing representations and warranties


 


Subject to the provisions of clause 7.4,
the Borrower represents and warrants to each of the Finance Parties that:


 


7.1.1        Due incorporation


 


the Borrower and each of the other Security
Parties are duly incorporated and validly existing in good standing under the
laws of the Marshall Islands, in the case of the Borrower, and, in the case of
each of the other Security Parties, under the laws of their respective
countries of incorporation as a corporation with limited liability and have
power to carry on their respective businesses as they are now being conducted
and to own their respective property and other assets;


 


7.1.2        Corporate power


 


the Borrower has power to execute, deliver
and perform its obligations under the Underlying Documents, the Borrower’s
Security Documents and the Master Swap Agreement and to borrow the Commitment
and each of the other Security Parties has power to execute and deliver and
perform its obligations under the Security Documents and the Underlying
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 and no limitation on the powers of the
Borrower to borrow will be exceeded as a result of borrowing the Loan;


 


7.1.3        Binding obligations


 


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


 


7.1.4        No conflict with other obligations


 


the execution and delivery of, the
performance of its obligations under, and compliance with the provisions of,
the Underlying Documents and the Security Documents and the Master Swap
Agreement by the relevant Security Parties will not:


 


(a)     contravene any existing applicable law, statute, rule or regulation
or any judgment, decree or permit to which the Borrower or any other Security
Party is subject;


 


(b)    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 the
Borrower or any other Security Party is a party or is subject or by which it or
any of its property is bound;


 


29

















 


(c)     contravene or conflict with any provision of the memorandum and
articles of association/articles of incorporation/by-laws/statutes or
other constitutional documents of the Borrower or any other Security Party; or


 


(d)    result in the creation or imposition of or oblige the Borrower or
any of its Related Companies or any other Security Party to create any
Encumbrance (other than a Permitted Encumbrance) on any of the undertakings,
assets, rights or revenues of the Borrower or its Related Companies or any
other Security Party;


 


7.1.5        No litigation


 


no litigation, arbitration or
administrative proceeding is taking place, pending or, to the knowledge of the
officers of the Borrower, threatened against the Borrower or any of its Related
Companies or any other Security Party which could have a material adverse
effect on the business, assets or financial condition of the Borrower or any of
its Related Companies or any other Security Party;


 


7.1.6        No filings required


 


save for the registration of the Mortgages
in the relevant Flag States it is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of the Underlying
Documents or any of the Security Documents or the Master Swap Agreement that
they or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Relevant Jurisdiction
or that any stamp, registration or similar tax or charge be paid in any
Relevant Jurisdiction on or in relation to the Underlying Documents or the
Security Documents or the Master Swap Agreement and each of the Underlying
Documents, the Master Swap Agreement and the Security Documents is in proper
form for its enforcement in the courts of each Relevant Jurisdiction;


 


7.1.7        Choice of law


 


the choice of English law to govern the
Underlying Documents, the Master Swap Agreement and the Security Documents
(other than the Mortgages and the Accounts Pledges) and the choice of the laws
of the relevant Flag State to govern each Mortgage and the laws of Germany to
govern the Accounts Pledges and the submissions by the Security Parties to the
non-exclusive jurisdiction of the English courts are valid and binding;


 


7.1.8        No immunity


 


neither the Borrower nor any other Security
Party nor any of their respective assets 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);


 


7.1.9        Financial Statements


 


the Form F-1 Registration Statement
registered with the United States Securities and Exchange Commission the
Singapore prospectus registered with the MAS and the pro forma historical
consolidated financial statements of the Borrower’s Group for the 2003 and 2004
Financial Years and the pro forma opening balance sheet of the Borrower’s Group
provided to the Banks in the negotiation of this Agreement have been prepared
in accordance with GAAP which have been consistently applied and present fairly
and accurately the financial position of the Borrower and the Borrower’s Group
and at such date neither the Borrower nor any member of the Borrower’s Group
had any significant liabilities (contingent or otherwise) or any unrealised or
anticipated losses which are not disclosed by, or reserved against or provided
for in, such financial statements; and


 


30

















 


7.1.10      Consents obtained


 


every consent, authorisation, licence or
approval of, or registration with or declaration to, governmental or public
bodies or authorities or courts required by any Security Party to authorise, or
required by any Security Party in connection with, the execution, delivery,
validity, enforceability or admissibility in evidence of each of the Underlying
Documents, the Master Swap Agreement and each of the Security Documents or the
performance by each Security Party of its obligations under the Underlying
Documents, the Master Swap Agreement and the Security Documents has been
obtained or made and is in full force and effect and there has been no default
in the observance of any of the conditions or restrictions (if any) imposed in,
or in connection with, any of the same; and


 


7.1.11      No money laundering


 


in relation to the borrowing by the
Borrower of the Loan, the performance and discharge of its obligations and
liabilities under this Agreement and the transactions and other arrangements
effected or contemplated by this Agreement, the Borrower is acting for its own
account and that the foregoing will not involve or lead to contravention of any
law, official, requirement or other regulatory measure or procedure implemented
to combat “money laundering” (as defined in
Article 1 of the Directive (91/308/EEC) of the Council of the European
Communities).


 


7.2       Initial representations and warranties


 


Subject to the provisions of clause 7.4,
the Borrower further represents and warrants to each of the Finance Parties
that:


 


7.2.1        Pari passu


 


the obligations of the Borrower under this
Agreement and the Master Swap Agreement are direct, general and unconditional
obligations of the Borrower and rank at least pari passu with all other present
and future unsecured and unsubordinated Indebtedness of the Borrower;


 


7.2.2        No default under other Indebtedness


 


neither the Borrower nor any other Security
Party is (nor would with the giving of notice or lapse of time or the
satisfaction of any other condition or combination thereof be) in breach of or
in default under any agreement relating to Indebtedness to which it is a party
or by which it may be bound;


 


7.2.3        Information


 


the information, exhibits and reports
furnished by any Security Party to the Banks in connection with the negotiation
and preparation of the Security Documents and the Master Swap Agreement are
true and accurate in all material respects and not misleading, do not omit
material facts and all reasonable enquiries have been made to verify the facts
and statements contained therein; there are no other facts the omission of
which would make any fact or statement therein misleading;


 


7.2.4        No withholding Taxes


 


no Taxes are imposed by withholding or
otherwise on any payment to be made by any Security Party under the Underlying
Documents, the Master Swap Agreement or the Security Documents or are imposed
on or by virtue of the execution or delivery by the Security Parties of the
Underlying Documents, the Master Swap Agreement or the Security Documents or
any other document or instrument to be executed or delivered under any of the
Security Documents or the Master Swap Agreement;


 


31

















 


7.2.5        No Default


 


no Default has occurred and is continuing;


 


7.2.6        No Default under any Contract or any Refund
Guarantee


 


no relevant Owner is in default of any of
its obligations under any Contract or any of its obligations upon the
performance or observance of which depend the continued liability of any Refund
Guarantor in accordance with the terms of the relevant Refund Guarantee;


 


7.2.7        No Encumbrance in respect of pre-delivery security


 


no relevant Owner has previously charged,
encumbered or assigned the benefit of any of its rights, title and interest in
or to any Contract or any Refund Guarantee and such benefit and all such
rights, title and interest are freely assignable and chargeable in the manner
contemplated by the Security Documents;


 


7.2.8        Ship


 


each Mortgaged Ship will on the date of
this Agreement or on the relevant Delivery Date be:


 


(a)     in the absolute ownership of the relevant Owner who will on the date
of this Agreement or on and after the relevant Delivery Date be the sole, legal
and beneficial owner of that Ship;


 


(b)    provisionally registered in the name of the relevant Owner under the
laws and flag of the relevant Flag State through the relevant Registry;


 


(c)     operationally seaworthy and in every way fit for service; and


 


(d)    classed with the relevant Classification free of all requirements
and recommendations affecting class of the relevant Classification Society;


 


7.2.9        Ships’ employment


 


except as disclosed to the Finance Parties
and agreed by the Finance Parties in writing, no Mortgaged Ship will, on the
date of this Agreement or on or before the relevant Delivery Date be subject to
any charter or contract or to any agreement to enter into any charter or
contract which, if entered into after the date of the relevant Mortgage or
relevant Deed of Covenant would have required the consent of the Agent and on
the date of this Agreement and on each relevant Delivery Date there will not be
any agreement or arrangement whereby the Earnings for such Mortgaged Ship may
be shared with any other person;


 


7.2.10      Freedom from Encumbrances


 


no Mortgaged Ship, nor its Earnings,
Insurances or Requisition Compensation (each as defined in the relevant
Mortgage or relevant Deed of Covenant) nor its Earnings Account nor any other
properties or rights which are, or are to be, the subject of any of the
Security Documents nor any part thereof will be, on the date of this Agreement
and on the relevant Delivery Date for such Mortgaged Ship, subject to any
Encumbrance other than a Permitted Encumbrance;


 


7.2.11      Environmental matters


 


to the best of the knowledge and belief of
the Borrower and its officers:


 


(a)        all Environmental Laws applicable to any Fleet Vessel have been
complied with and all consents, licences and approvals required under such
Environmental Laws have been obtained and complied with; and


 


32

















 


(b)       no Environmental Claim has been made or threatened or is pending
against any member of the Borrower’s Group or any Fleet Vessel and not fully
satisfied; and


 


(c)        there has been no Environmental Incident;


 


7.2.12      No material adverse change


 


there has been no material adverse change
in the financial position of the Borrower, any Owner or any member of the
Borrower’s Group from that described by the Borrower to the Banks in the
negotiation of this Agreement;


 


7.2.13      Parent company


 


each Owner is a wholly-owned Subsidiary of
the Borrower;


 


7.2.14      Copies true and complete


 


the copies of each of the Underlying
Documents delivered or to be delivered to the Banks pursuant to clause 9.1
are, or will when delivered be, true and complete copies of such documents and
each of such documents will when delivered constitute valid and binding
obligations of the parties thereto enforceable in accordance with its terms and
there have been no amendments or variations thereof or defaults thereunder; and


 


7.2.15      Listing at the SGX-ST


 


in relation to the initial public offering
of its shares in connection with the listing of such shares on the main board
of the SGX-ST:


 


(a)     the Borrower has obtained all necessary consents and approvals of
all Government Entities in connection with such initial public offering of the
Borrower’s shares in connection with the listing and quotation of such shares
on the main board of the SGX-ST, in particular that the Borrower has received a
letter of eligibility from the SGX-ST for the listing of its shares on the
SGX-ST on the terms and conditions set out in the letter of eligibility, and
that the Singapore prospectus has been lodged and registered with the MAS;


 


(b)    all information given in the Singapore prospectus registered with
the MAS on 4 April 2006 are true, fair accurate and not misleading and such
Singapore prospectus constitutes full and true disclosure of all material facts
about the Singapore initial public offering and the Borrower;


 


(c)     no stop order pursuant to section 242 of the Securities and Futures
Act Chapter 289 of the Statutes of the Republic of Singapore has been issued by
MAS to the Borrower and there has been no occurrence which might give rise to
the MAS issuing a stop order against the Borrower; and


 


(d)    the Borrower will not withdraw its IPO prior to its admission into
SGX-ST.


 


7.3       Repetition of representations and warranties


 


On and as of the date of each Advance and
(except in relation to the representations and warranties in clause 7.2) on
each Interest Payment Date the Borrower shall (a) be deemed to repeat the
representations and warranties in clauses 7.1 (and so that representation
and warranty in clause 7.1.9 shall for this purpose refer to the then latest
audited financial statements delivered to the Banks under clause 8.1) and 7.2
as if made with reference to the facts and circumstances existing on such day
and (b) be deemed to further represent and
warrant to the Finance Parties that the then latest audited financial
statements delivered to the Finance Parties have been prepared in accordance
with GAAP which have been consistently applied and present fairly and
accurately the financial position of each of the Borrower and the Owners as at
the end of the financial period to which the same relate and the results of the
operations of each


 


33

















 


of the Borrower and the Owners for the
financial period to which the same relate and, as at the end of such financial
period, neither the Borrower nor any Owner had any significant liabilities
(contingent or otherwise) or any unrealised or anticipated losses which are not
disclosed by, or reserved against or provided for in, such financial
statements.


 


7.4       The Banks accept and acknowledge that all representations and
warranties contained in this clause 7 made by the Borrower with respect to the
Builder, the Refund Guarantor and any Manager (not being Target Marine S.A. or
any other Related Company of the Borrower and/or any Owner) are made by the
Borrower to the best of its information, knowledge and belief, having made due
enquiry.


 


8          Undertakings


 


8.1       General


 


The Borrower undertakes with each of the
Finance Parties that, from the date of this Agreement and so long as any moneys
are owing under any of the Security Documents and while all or any part of the
Commitment remains outstanding, it will:


 


8.1.1        Notices


 


(a)     promptly inform the Agent and each of the Finance Parties of any
occurrence of which it becomes aware which might adversely affect the ability
of any Security Party to perform its obligations under any of the Security
Documents, the Underlying Documents and/or the Master Swap Agreement and,
without limiting the generality of the foregoing, will inform the Agent and
each of the Finance Parties of any Default forthwith upon becoming aware
thereof and will from time to time, if so requested by the Agent or any Finance
Party, confirm to the Agent and each of the Finance Parties in writing that,
save as otherwise stated in such confirmation, no Default has occurred and is
continuing;


 


(b)    promptly inform the Agent and each of the Finance Parties of any
occurrence of which it becomes aware which might adversely affect the ability
or rights of the Borrower to make any claims under a Refund Guarantee or which
might reduce or release any of the obligations of a Refund Guarantor under such
Refund Guarantee; and


 


(c)     promptly inform the Agent and each of the Finance Parties of any
Environmental Incident which might reasonably be expected to adversely affect
the security position of the Banks and/or Finance Parties.


 


8.1.2        Consents and licences


 


without prejudice to clauses 7.1 and 9
and subject to the proviso below, obtain or cause to be obtained, maintain in
full force and effect and comply in all material respects with the conditions
and restrictions (if any) imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things which
may from time to time be necessary or desirable under applicable law for the
continued due performance of all the obligations of the Security Parties under
each of the Security Documents, the Master Swap Agreement and the Underlying
Documents Provided always that the undertaking contained in this clause 8.1.2
given by the Borrower with respect to the Builder, the Refund Guarantor and/or
any Manager (not being Target Marine S.A. or any other Related Company of the
Borrower and/or the Owner) is given by the Borrower to the best of its
information, knowledge and belief, having made due enquiry;


 


8.1.3        Use of proceeds


 


use the Loan exclusively for the purpose
specified in clause 1.1;


 


34

















 


8.1.4        Pari passu


 


ensure that its obligations under this
Agreement shall, without prejudice to the provisions of clause 8.2 or to
the security intended to be created by the Security Documents and/or the Master
Swap Agreement at all times rank at least pari passu with all its other present
and future unsecured and unsubordinated Indebtedness with the exception of any
obligations which are mandatorily preferred by law and not by contract;


 


8.1.5        Financial statements


 


prepare financial statements of the
Borrower and the consolidated financial statements of the Borrower’s Group and
procure that each Owner prepares financial statements in accordance with GAAP
consistently applied in respect of each Financial Year and cause the same to be
reported on by its auditors (which shall be acceptable to the Agent in its sole
discretion) and prepare unaudited consolidated financial statements for the
Borrower’s Group in respect of each Financial Quarter on the same basis as the
annual statements and deliver as many copies of the same as the Finance Parties
may reasonably require as soon as practicable but not later than one hundred
and eighty (180) days (in the case of audited financial statements) or sixty
(60) days (in the case of unaudited financial statements) after the end of the
financial period to which they relate;


 


8.1.6        Delivery of reports


 


deliver to the Finance Parties as many
copies as they may reasonably require of every material report, circular,
notice or like document issued by the Borrower to its shareholders or creditors
generally;


 


8.1.7        Provision of financial and other information


 


in the case of the Borrower, the Owner and any Manager
(that is a Related Company of the Borrower and/or any Owner), deliver and
provide to the Finance Parties, and in the case of any other Security Party,
use its best endeavours to deliver and provide to the Finance Parties:


 


(a)     financial projections for each Financial Year;


 


(b)    budgets for each Financial Year;


 


(c)     appraisal reports and valuations for each Ship on a semi-annual
basis (commencing from the date of this Agreement) pursuant to clause 8.2.2 or,
upon the occurrence of a Default, upon the request of the Agent;


 


(d)    copies of any filings by the Borrower with, and reports to, the
United States Securities and Exchange Commission, the SGX-ST and the MAS, and
any announcement or disclosure made by the Borrower to the SGX-ST and/or the
MAS;


 


(e)     Compliance Certificates at the end of each Financial Quarter
(including supporting schedules); and


 


(f)     such financial and other information concerning the Borrower, the
other Security Parties and their respective affairs as they may from time to
time reasonably require;


 


8.1.8        Obligations under Security Documents


 


duly and punctually perform each of the
obligations expressed to be assumed by it under the Security Documents, the
Master Swap Agreement and the Underlying Documents;


 


8.1.9        Compliance with ISM Code


 


and will procure that any Operator will, comply with and ensure that
each Mortgaged Ship and any Operator comply with the requirements of the ISM Code,
including (but not limited to) the


 


35

















 


maintenance and renewal of valid certificates pursuant thereto
throughout the Security Period;


 


8.1.10         Withdrawal of DOC and SMC


 


and will procure that any Operator will, immediately inform the Agent
if there is any threatened or actual withdrawal of its or an Operator’s DOC or
the SMC in respect of a Mortgaged Ship;


 


8.1.11         Issuance of DOC and SMC


 


and will procure that any Operator will, promptly inform the Agent upon
the issue to the Borrower or any Operator of a DOC and to a Ship of an SMC or
the receipt by any of the Borrower or any Operator of notification that its
application for the same has been refused;


 


8.1.12      Compliance with ISPS Code


 


and will procure that each Mortgaged Ship
will comply with the requirements of the ISPS Code including (but not limited
to) the maintenance and renewal of the ISSC for each Mortgaged Ship pursuant to
the ISPS Code and will immediately inform the Agent if there is any actual or
threatened withdrawal of the ISSC for any Mortgaged Ship;


 


8.1.13      Interest rate hedging


 


within thirty (30) days following the date
of this Agreement, enter into an interest rate swap or similar hedging
agreement with the Swap Bank whether pursuant to the Master Swap Agreement or
other manner acceptable to the Agent for the purpose of hedging its interest
rate risk with respect to at least fifty percent (50%) of Facility A and the
Borrower further undertakes to execute such security as the Agent may require
in respect of the Borrower’s obligations under such instrument;


 


8.1.14      Share Charges


 


at any time during the Security Period,
execute or procure the execution in favour of the Agent of a Share Charge with
respect to any Owner and the Borrower agrees, if and when required to do so by
the Agent (as instructed by the Banks), promptly to execute or to procure the
execution and delivery to the Agent of all documents which the Agent may
require to obtain the full benefit of such charges over all of the issued
shares in the capital of the Owners;


 


8.1.15      Survey reports


 


at least ten (10) days prior to a Facility
B Advance provide a survey report with respect to any Additional Ship that is
not a newbuilding;


 


8.1.16      Owner’s Guarantee


 


procure that on or prior to the Drawdown
Date of each Advance of Facility A and/or Facility B that the relevant Owner
executes and delivers to the Agent an Owner’s Guarantee;


 


8.1.17      Charter Assignment


 


procure that the relevant Owner executes
and delivers to the Agent a Charter Assignment relating to any Mortgaged Ship
which is the subject of a Charter;


 


8.1.18      Listing on NASDAQ and/or SGX-ST


 


(a)     maintain its listing as a public limited company on NASDAQ and/or
the main board of the SGX-ST and comply with all of the listing rules, laws and
regulations applicable to public


 


36

















 


companies
listed on NASDAQ and/or the main board of the SGX-ST and not to seek any
secondary or further listing without the prior consent of the Agent;


 


(b)    comply with all relevant Singapore laws, regulations and rules,
including but not limited to the Securities and Futures Act (Chapter 289) of
the Statutes of the Republic of Singapore and the SGX-ST Listing Manual;


 


8.1.19      Intra-Group Loan Agreements


 


procure that all interest payment dates and
all repayment dates relating to the loans to be made pursuant to the
Intra-Group Loan Agreements match those of each relevant Advance drawn down by
the Borrower under this Agreement in order to make each of the said loans
available to the Owners and shall procure and ensure that all sums paid and/or
payable by the Owners to the credit of the Earnings Accounts shall be freely
available to the Agent to meet all payments of principal and interest and all
other sums payable by the Borrower to the Finance Parties pursuant to this
Agreement and each of the other Security Documents; and


 


8.1.20      Know your customer and money laundering compliance


 


provide the Banks with such documents and
evidence as the Banks shall from time to time require, based on applicable law
and regulations from time to time and the Banks’ own “know your customer”
internal guidelines from time to time to identify the Borrower and the other
Security Parties, including the ultimate legal and beneficial owner or owners
of such entities, and any other persons involved or affected by the
transaction(s) contemplated by this Agreement.


 


8.2       Security value maintenance


 


8.2.1        Security shortfall


 


If at any time on or after the first
Drawdown Date the Security Value shall be less than the relevant Security
Requirement, the Agent may give notice to the Borrower requiring that such
deficiency be remedied and then the Borrower shall (unless a Ship has become a
Total Loss) either:


 


(a)     prepay within a period of fifteen (15) days of the date of receipt
by the Borrower of the Agent’s said notice such sum in Dollars as will result
in the Security Requirement after such prepayment (taking into account any
other repayment of the Loan made between the date of the notice and the date of
such prepayment) being equal to the Security Value; or


 


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


 


Clause 4.6 shall apply to prepayments under
clause 8.2.1(a).


 


8.2.2        Valuation of a Ship


 


A Ship shall, for the purposes of this
clause 8.2, be valued in Dollars (i) in relation to an Inital Ship, at the
time of acceptance of a commitment letter between the Agent and the Borrower or
(ii) in relation to an Additional Ship, two (2) weeks prior to the Delivery
Date for such Additional Ship, and thereafter on a semi-annual basis or if
earlier the date upon which the Initial Ships are valued or would have been
valued and thereafter all the Ships then financed by this Agreement shall be
valued semi-annually or following a Default at any time determined by the
Agent.  The value of a Ship shall be calculated
by taking the average of the charterfree evaluations for such Ship from two (2)
Approved Brokers appointed by the


 


37

















 


Agent (one chosen by the Agent and one
chosen by the Borrower) (such valuations to be made without, unless required by
the Agent, physical inspection and on the basis of a sale for prompt delivery
for cash at arm’s length on normal commercial terms as between a willing buyer
and a willing seller without taking into account the benefit of any
charterparty or other contract of employment concerning such Ship).  Such valuation shall constitute the value of
a Ship for the purposes of this clause 8.2 until the next following
valuation.


 


The value of a Ship determined in accordance with the
provisions of this clause 8.2 shall be binding upon the parties hereto
until such time as any further such valuations shall be obtained.


 


8.2.3        Information


 


The Borrower undertakes to the Finance
Parties to supply to the Agent and to any such shipbrokers such information
concerning a Ship and its condition as such shipbrokers may reasonably require
for the purpose of making any such valuation.


 


8.2.4        Costs


 


All costs in connection with the Agent
obtaining any valuation of a Ship referred to in clause 8.2.2, and any
valuation either of any additional security for the purposes of ascertaining
the Security Value at any time or necessitated by the Borrower electing to
constitute additional security pursuant to clause 8.2.1(b) shall be borne
by the Borrower.


 


8.2.5        Valuation of additional security


 


For the purpose of this clause 8.2,
the market value of any additional security provided or to be provided to the
Banks shall be determined by the Banks in their absolute discretion without any
necessity for the Banks assigning any reason thereto.


 


8.2.6        Documents and evidence


 


In connection with any additional security
provided in accordance with this clause 8.2, the Banks shall be entitled
to receive such evidence and documents of the kind referred to in Schedule 4 as
may in the Banks’ opinion be appropriate and such favourable legal opinions as
the Banks shall in their absolute discretion require.


 


8.3       Negative undertakings


 


The Borrower undertakes with each of the
Finance Parties that, from the date of this Agreement and so long as any moneys
are owing under the Security Documents and/or the Master Swap Agreement and
while all or any part of the Commitment remains outstanding, it will not and
will procure that each Owner will not without the prior written consent of the
Agent:


 


8.3.1        Negative pledge


 


permit any Encumbrance (other than a
Permitted Encumbrance) to subsist, arise or be created or extended over all or
any part of its present or future undertakings, assets, rights or revenues
(including, but not limited to the Borrower’s rights against the Swap Bank
under any Transactions and/or the Master Swap Agreement or all or part of the
Borrower’s interest in any amounts payable to the Borrower by the Bank under
any Transaction and/or the Master Swap Agreement) to secure or prefer any
present or future Indebtedness or other liability or obligation of the Borrower
or any other person;


 


8.3.2        No merger


 


to the extent permitted by law, merge or
consolidate with any other person;


 


38














 


8.3.3        Disposals


 


sell, transfer, abandon, lend or otherwise
dispose of or cease to exercise direct control over any part (being either
alone or when aggregated with all other disposals falling to be taken into
account pursuant to this clause 8.3.3 material in the opinion of the Banks
in relation to the undertakings, assets, rights and revenues of the Borrower’s
Group) of its present or future undertakings, assets, rights or revenues
(otherwise than by transfers, sales or disposals for full consideration in the
ordinary course of trading) whether by one or a series of transactions related
or not;


 


8.3.4        Other business


 


undertake any business other than the
ownership and operation of the Ships and the chartering of the Ships to third
parties;


 


8.3.5        Acquisitions


 


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


 


8.3.6        Other obligations


 


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


 


8.3.7        No borrowing


 


incur any Borrowed Money except for
Borrowed Money pursuant to the Security Documents;


 


8.3.8        Repayment of borrowings


 


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


 


8.3.9        Guarantees


 


issue any guarantees or indemnities or
otherwise become directly or contingently liable for the obligations of any
person, firm, or corporation except pursuant to the Security Documents and except
for guarantees or indemnities from time to time required in the ordinary course
by any protection and indemnity or war risks association with which the Ships
is entered, guarantees required to procure the release of a Ship from any
arrest, detention, attachment or levy or guarantees or undertakings required
for the salvage of such Ship);


 


8.3.10      Loans


 


make any loans (other than the loans under
the Intra-Group Loan Agreements) or grant any credit (save for normal trade
credit in the ordinary course of business) to any person or agree to do so and
in the case of the loans to be made under the Intra-Group Loan Agreements, the
Borrower will not without the prior written agreement of the Agent and except
as envisaged in clause 14.4 accept any repayments of principal or interest or
other sums due or payable thereunder or take any action against any Owner;


 


8.3.11      Sureties


 


permit any Indebtedness of the Borrower to
any person (other than the Banks) to be guaranteed by any person (save for
guarantees or indemnities from time to time required in the ordinary course by
any protection and indemnity or war risks association with which any


 


39

















 


Ship is entered, guarantees required to
procure the release a Ship from any arrest, detention, attachment or levy or
guarantees or undertakings required for the salvage of such Ship);


 


8.3.12      Share capital


 


purchase or otherwise acquire for value any
shares of its capital;


 


8.3.13      Dividends and distribution


 


declare or pay any dividends or distribute
any of its present or future assets, undertakings, rights or revenues to any of
its shareholders:


 


(a)     where an Event of Default has occurred and is continuing or would
occur as a result of or following the declaration of such dividend; or


 


(b)    where during the period commencing from the date of this Agreement and
terminating on the date falling twenty four (24) months thereafter (for the
purposes of this clause 8.3.13 the “Second Anniversary”)
the Fleet Market Value is less than one hundred and thirty five per cent
(135%); or


 


(c)     where during the period commencing from the Second Anniversary and
terminating on the date falling thirty six (36) months after the date of this
Agreement (for the purposes of this clause 8.3.13 the “Third
Anniversary”) the Fleet Market Value is less than one hundred and
forty per cent (140%); or


 


(d)    where during the period commencing from the Third Anniversary until
all sums due and payable hereunder have been paid in full the Fleet Market Value
is less than one hundred and forty five per cent (145%);


 


8.3.14      Subsidiaries and parent


 


form or acquire any Subsidiaries other than
in the case of the Borrower, the Owners or cease to legally and beneficially
own 100% of the issued shares in the capital of the Owners, whether directly or
indirectly; and


 


8.3.15      Financial Year


 


make any change to the Financial Year for
the Borrower or any member of the Borrower’s Group.


 


8.4       Pre-delivery positive undertakings


 


In relation to each Additional Ship which
is a newbuilding, the Borrower undertakes and agrees with each of the Finance
Parties that it will or will procure that the relevant Owner will:


 


8.4.1        Document of title to an Additional Ship


 


give irrevocable instructions to the relevant
Builder to hold such Additional Ship and the builder’s certificate and any
other document of title to such Additional Ship to the order and at the
disposal of the Agent and ensure that the relevant Builder complies with such
instructions;


 


8.4.2        Performance of the Contract


 


duly and punctually observe and perform all
the conditions and obligations imposed on it by the relevant Contract;


 


40

















 


8.4.3        Performance by Builder


 


use its best endeavours to ensure that the
Builder of such Additional Ship observes and performs all conditions and
obligations imposed on it by the relevant Contract (including the provision of
the relevant Refund Guarantee) and take all steps within its power to ensure
that the Builder proceeds with the construction of such Additional Ship with
due diligence and despatch;


 


8.4.4        Progress of construction


 


upon the request of the Finance Parties,
advise the Finance Parties of the progress of construction of such Additional Ship
and supply the Finance Parties with such other information as they may require
regarding such Additional Ship, and the materials allocated to such Additional Ship,
the relevant Contract, or otherwise relating to the construction of such
Additional Ship;


 


8.4.5        Arbitration under the Contract


 


in the event that the Builder of such
Additional Ship and/or the relevant Owner resort to arbitration as provided in
the relevant Contract, immediately notify the Finance Parties in writing that
such arbitration has been initiated, advise the Finance Parties in writing of
the identity of the appointed arbitrators and upon termination of the
arbitration notify the Finance Parties in writing to that effect and supply the
Finance Parties with a copy of the arbitration award and a certified English
translation thereof;


 


8.4.6        Conveyance on default


 


where such Additional Ship is (or is to be)
sold in exercise of any power contained in the relevant Pre-delivery Security
Assignment or otherwise conferred on the Agent, to execute, forthwith upon
request by the Agent, such form of conveyance of such Additional Ship as the
Agent may require;


 


8.4.7        Enforcement of Owner’s rights


 


do or permit to be done each and every act
or thing which the Finance Parties may from time to time require to be done for
the purpose of enforcing the relevant Owner’s rights under or pursuant to the relevant
Contract and allow the name of the relevant Owner to be used as and when
required by the Agent for that purpose;


 


8.4.8        Notification of rejection of an Additional Ship


 


notify the Finance Parties immediately if
the relevant Builder or (with the prior written consent of the Agent given
pursuant to clause 8.5) the relevant Owner cancels, rescinds, repudiates
or otherwise terminates the relevant Contract or purports to do so or (with the
prior written consent of the Agent given pursuant to clause 8.5) the relevant
Owner rejects such Additional Ship or purports to do so or if such Additional Ship
shall become a Total Loss or partial loss or shall be damaged;


 


8.4.9        Ship’s name and registration


 


register such Additional Ship provisionally
or permanently under the laws and flag of the relevant Flag State immediately
upon Delivery, procure that (if such Additional Ship is so registered
provisionally on the Delivery Date) such Additional Ship is permanently registered
under the laws and flag of the relevant Flag State within the time limit
imposed by the relevant Flag State (subject always to the relevant Mortgage
remaining in full force as effect) and keep such Additional Ship registered at
all times from the Delivery Date under the laws and flag of the relevant Flag
State; and


 


41

















 


8.4.10      Mortgage


 


execute, and procure the registration of,
the Mortgage relative to such Additional Ship under the laws and flag of the relevant
Flag State immediately upon Delivery.


 


8.5     Pre-delivery negative undertakings


 


In relation to each Additional Ship which
is a newbuilding, the Borrower hereby further undertakes and agrees with each
of the Finance Parties that it will not, and will procure that the relevant
Owner will not without the prior written consent of the Agent (and then only
subject to such conditions as the Agent may impose):


 


8.5.1        Sale or other disposal


 


sell or agree to sell, transfer, abandon or
otherwise dispose of such Additional Ship or any share or interest therein;


 


8.5.2        Creation of Encumbrances


 


create or agree to create or permit to
subsist any Encumbrance as a result of an act or omission of the Borrower or
any Owner over such Additional Ship (or any share or interest therein) other
than the Encumbrances created or to be created pursuant to the Security
Documents;


 


8.5.3        Variation of Contract


 


agree to any variation of the relevant Contract
or any substantial variation of the specification of such Additional Ship (and
for the purpose of this paragraph any extras, additions or alterations
which the relevant Owner may desire to effect in the building of such
Additional Ship shall be deemed to constitute a substantial variation if the
cost thereof (which shall in every case be agreed in writing between the relevant
Owner and the relevant Builder before the work is put in hand irrespective of
whether the prior consent thereto of the Agent be required hereunder) or if the
aggregate cost of the proposed work together with the cost of any work already
ordered will alter the fixed price of any of such Additional Ship by an amount
greater than five per cent (5%) of the said fixed price);


 


8.5.4        Releases and waivers of Contract


 


release the relevant Builder from any of its
obligations under the relevant Contract or waive any breach of the relevant Builder’s
obligations thereunder or consent to any such act or omission of the relevant Builder
as would otherwise constitute such breach;


 


8.5.5        Delays


 


without prejudice to clause 8.5.3,
agree to any variation of the relevant Contract or the specification of such
Additional Ship which would delay the time for delivery of such Additional Ship;


 


8.5.6        Rejection and cancellation


 


either exercise or fail to exercise any
right which the relevant Owner may have to reject such Additional Ship or
cancel or rescind or otherwise terminate the relevant Contract provided always
that any such rejection of such Additional Ship or cancellation, rescission or
other termination of the relevant Contract by the relevant Owner after such
consent is given shall be without responsibility on the part of the Finance
Parties who shall be under no liability whatsoever to the extent that such
rejection, rescission, cancellation or termination is thereafter adjudged to
constitute a repudiation or other breach of such Contract by the relevant Owner;


 


42

















 


8.5.7        Assignment of Earnings


 


assign or agree to assign otherwise than to
the Agent the Earnings of such Additional Ship or any part thereof;


 


8.5.8        Variation of a Refund Guarantee


 


agree to any variation of the relevant Refund
Guarantee;


 


8.5.9        Release and waiver of the Refund Guarantee


 


release the relevant Refund Guarantor from
any of its obligations under the relevant Refund Guarantee or waive any breach
of the relevant Refund Guarantor’s obligations thereunder or consent to any
such act or omission of such Refund Guarantor as would otherwise constitute
such breach;


 


8.5.10      Chartering


 


let or agree to let such Additional Ship:


 


(a)     on demise charter for any period; or


 


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


 


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


 


(d)    below the market rate prevailing at the time when such Additional Ship
is fixed or other than on arms length terms; and


 


8.5.11      Manager


 


to appoint a manager of such Additional Ship
(other than the Manager) or to terminate or amend the terms of any Management
Agreement.


 


8.6       Financial Covenant definitions


 


For the purposes of clause 8.7 the following
expressions shall have the following meanings:


 


“Cash” means
free and available negotiable money, orders, cheques and bank balances and
deposits but to exclude (a) any cash that is specifically blocked and charged
and (b) cash standing to the credit of any blocked account and charged to the
Agent pursuant to this Agreement;


 


“Cash Equivalent
Investments” means at any time:


 


(a)        certificates of deposit maturing within one year after the relevant
date of calculation and issued by a bank or financial institution acceptable to
the Agent;


 


(b)        any investment in marketable debt obligations issued or guaranteed
by the government of the United States of America, the United Kingdom, any
member state of the European Economic Area or any Participating Member State or
by an instrumentality or agency of any of them having an equivalent credit
rating, maturing within one year after the relevant date of calculation and not
convertible or exchangeable to any other security; or


 


(c)        any other debt security approved by the Agent,


 


43

















 


in each case, to which any member of the Borrower’s Group is
beneficially entitled at that time and which is not issued or guaranteed by any
member of the Borrower’s Group or subject to any Encumbrance (other than one
arising under the Security Documents).


 


“Current Assets” means, at any time in
respect of the Borrower’s Group, the amount of current assets of the Borrower’s
Group on a consolidated basis which would be included as current assets in a
consolidated balance sheet of the Borrower’s Group in accordance with GAAP drawn
up at such time;


 


“Current Liabilities”
means, at any time in respect of the Borrower’s Group, the amount of current
liabilities of the Borrower’s Group on a consolidated basis which would be
included as current liabilities in the consolidated balance sheet of the Borrower’s
Group in accordance with GAAP drawn up at such time;


 


“EBITDA” means,
in respect of any period, the consolidated profit on ordinary activities of the
Borrower’s Group before Taxation for such period:


 


(a)        adjusted to exclude Interest Receivable and Interest Payable and
other similar income or costs to the extent not already excluded;


 


(b)        adjusted to exclude any gain or loss realised on the disposal of
fixed assets (whether tangible or intangible);


 


(c)        after adding back depreciation;


 


(d)        adjusted to exclude any exceptional or extraordinary costs or
income;


 


(e)        after deducting any profit arising out of the release of any
provisions against a liability or charge;


 


“Finance Lease” means any lease under
which a member of the Borrower’s Group is the lessee which is or should be
treated as a finance lease under GAAP (and includes any hire purchase contract
or other arrangement which is similarly treated);


 


“Financial Quarter” means each period of
approximately three (3) months commencing on the day after a Financial Quarter
Day and ending on the next following Financial Quarter Day;


 


“Financial Quarter Day” means 31 March,
30 June, 30 September and 31 December in any year;


 


“Financial Year” means the annual
accounting period of the Borrower’s Group ending on 31 December in each
year;


 


“Interest” means, in respect of any
specified Borrowed Money, all continuing regular or periodic costs, charges and
expenses incurred in effecting, servicing or maintaining such Borrowed Money including:


 


(a)     gross interest, commitment fees, discount and acceptance fees and
guarantee, fronting and ancillary facility fees payable or incurred on any form
of such Borrowed Money;


 


(b)    repayment and prepayment premiums payable or incurred in repaying or
prepaying such Borrowed Money; and


 


(c)     the interest element of Finance Leases,


 


but excluding, in respect of such Borrowed
Money, agency and arrangement fees or other up-front fees;


 


“Interest Payable” means, in respect of
any period, the aggregate (calculated on a consolidated basis) of:


 


44

















 


(a)     the amounts charged and posted (or estimated to be charged and
posted) as a current accrual accrued during such period in respect of members
of the Borrower’s Group by way of Interest on all Borrowed Money, but excluding
any amount accruing as interest in-kind (and not as cash pay) to the extent
capitalised as principal during such period; and


 


(b)    net payments in relation to interest rate or currency hedging
arrangements in respect of Borrowed Money (after deducting net income in
relation to such interest rate or currency hedging arrangements);


 


“Interest Receivable” means, in respect
of any period, the amount of Interest accrued on cash balances of the Borrower’s
Group (including the amount of interest accrued on the Earnings Accounts, to
the extent that the account holder is entitled to receive such interest) during
such period;


 


“Leverage Ratio” means the ratio of Total
Debt to total capitalisation of the Borrower;


 


“Minimum Liquidity” means, at any time
in respect of the Borrower’s Group, the minimum amount of Cash and Cash
Equivalent Investments (excluding at any time any balance deposited in the
Retention Accounts in accordance with clause 14.4) which is equal to the higher
of:


 


(a)     four million Dollars ($4,000,000); and


 


(b)    the amount calculated by the following formula: the aggregate of (i)
five hundred thousand Dollars ($500,000) multiplied by the number of Ships with
more than six (6) months remaining charter employment and (ii) seven hundred
and fifty thousand Dollars ($750,000) multiplied by the number of Ships with
less than six (6) months remaining charter employment;


 


“Relevant Period” means each rolling
period of twelve (12) months ending on a Financial Quarter; and


 


 “Working
Capital” means Current Assets less Current Liabilities (including,
at any given time, the current portion of long term debt maturing within six
(6) months).


 


8.7       Financial Covenants


 


The Borrower undertakes with each of the
Finance Parties that, from the date of this Agreement and so long as any moneys
are owing under any of the Security Documents and while all or any part of the
Commitment remains outstanding, it will:


 


8.7.1        Leverage Ratio


 


maintain a Leverage Ratio of not more than sixty
five per cent (65%);


 


8.7.2        Minimum Liquidity


 


maintain on a consolidated basis Minimum
Liquidity;


 


8.7.3        Working Capital


 


maintain on a consolidated basis at all
times during the Security Period a Working Capital of not less than one million
Dollars ($1,000,000);


 


8.7.4        Interest coverage


 


maintain a ratio of EBITDA to Interest
Payable on a trailing four (4) Financial Quarter basis of not less than 3.00 to
1.00;


 


45

















 


8.7.5        Security Value Maintenance


 


ensure that at all times the Security Value
is not less than the Security Requirement; and


 


8.7.6        Compliance Certificate


 


deliver to the Agent at the end of each
Financial Quarter a Compliance Certificate issued and signed by the Borrower’s
Chief Financial Officer certifying that the covenants contained in this clause 8.7
are being complied with and providing full calculations supporting such
compliance derived from the then latest financial statements of the Borrower’s
Group as lodged with the Securities and Exchange Commission of the United
States by way of Form 10K/10Q and/or the SGX-ST, such certificate to be
substantially in the form set out in Schedule 6.


 


8.8       Financial testing


 


The covenants in clause 8.7 shall be tested
each Financial Quarter and details of compliance (or non-compliance) shall be
provided to the Agent in accordance with clause 8.7.6.


 


9          Conditions


 


9.1       Documents and evidence


 


9.1.1        Commitment


 


The obligation of the Banks to make the
Commitment available shall be subject to the condition that the Agent, or its
duly authorised representative, shall have received the documents and evidence
set out in Part 1 of Schedule 4.


 


9.1.2        First Advance


 


The obligation of the Banks to make the
first Advance available shall be subject to the condition that the Agent or its
duly authorised representative shall have received not later than two (2)
Banking Days before the day on which the Drawdown Notice for the first Advance
is given, the documents and evidence specified in Part 2 of Schedule 4 in form
and substance satisfactory to the Banks, provided that this Agreement and all
other Security Documents shall have been executed (in the case of this
Agreement) or agreed in final form (in the case of the other Security
Documents) prior to the pricing of the Initial Public Offering.


 


9.1.3        All Advances


 


The obligation of the Banks to make each
Advance shall be subject to the further condition that the Agent, or its duly
authorised representative, shall have received on or prior to the relevant
Drawdown Date of such Advance, the documents and evidence specified in Part 3
of Schedule 4 in form and substance satisfactory to the Banks.


 


9.1.4        Contract Instalment Advances and Delivery Date
Advances of Facility B


 


The obligation of the Banks to make any
Advance which is a Contract Instalment Advance or Delivery Date Advance of
Facility B shall be subject to the condition that the Agent, or its duly
authorised representative, shall have received, on or prior to the day on which
that Advance is intended to be made, the documents and evidence specified in
Part 4 of Schedule 4 in form and substance satisfactory to the Banks.


 


9.1.5        Expected Project Costs


 


The obligation of the Banks to make any
Advance of Facility B for an Additional Ship which is a newbuilding constituting
in part Expected Project Costs shall be subject to the further condition that
the Agent, or its duly authorised representative, shall have received invoices
or


 


46

















 


pro-forma invoices itemised in a written
inventory which properly and accurately represents the Expected Project Costs
to the satisfaction of the Agent in its sole discretion.


 


9.2       General conditions precedent


 


The obligation of the Banks to make any
Advance shall be subject to the further conditions that, at the time of the
giving of the Drawdown Notice in respect of the relevant Advance, and at the
time of the making of the relevant Advance:


 


9.2.1        the representations and warranties contained in (i) clauses 7.1,
7.2 and 7.3, and (ii) clauses 4.1 and 4.3 of each Owner’s Guarantee and
expressed to be made or repeated on the date of each Advance are true and
correct on and as of each such time as if each was made with respect to the
facts and circumstances existing at such time; and


 


9.2.2        no Default shall have occurred and be continuing or would result
from the making of such Advance.


 


9.3       Waiver of conditions precedent


 


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


 


9.4       Further conditions precedent


 


Not later than five (5) Banking Days prior
to each Drawdown Date and not later than five (5) Banking Days prior to each
Interest Payment Date, the Banks may request and the Borrower shall, not later
than two (2) Banking Days prior to such date, deliver to the Banks on such
request further favourable certificates and/or opinions as to any or all of the
matters which are the subject of clauses 7, 8, 9 and 10 and clauses 4
and 5 of each Owner’s Guarantee.


 


10        Events of Default


 


10.1     Events


 


There shall be an Event of Default if:


 


10.1.1      Non-payment: any
Security Party fails to pay any sum payable by it under any of the Security
Documents or the Underlying Documents at the time, in the currency and in the
manner stipulated in the Security Documents or the Underlying Documents (and so
that, for this purpose, sums payable on demand shall be treated as having been
paid at the stipulated time if paid within three (3) Banking Days of demand);
or


 


10.1.2      Master Swap Agreements:
(a) an Event of Default or Potential Event of Default (in each case as defined
in the Master Swap Agreement) has occurred and is continued under the Master
Swap Agreement or (b) an Early Termination Date (as defined in the Master Swap
Agreement) has occurred or been or become capable of being effectively
designated under the Master Swap Agreement or (c) a person entitled to do so
gives notice of an Early Termination Date under Section 6(b)(iv) of the
Master Swap Agreement or (d) the Master Swap Agreement is terminated,
cancelled, suspended, rescinded or revoked or otherwise ceases to remain in
full force and effect for any reason; or


 


10.1.3      Breach of Insurance and certain other obligations: the Borrower or any Owner fails to obtain and/or maintain the
Insurances (as defined in, and in accordance with the requirements of, the
Security Documents) for a Ship or if any insurer in respect of such Insurances
cancels the Insurances or disclaims liability by reason, in either case, of
mis-statement in any proposal for the Insurances or for any other failure or
default on the part of the Borrower or any Owner or any other person or the
Borrower or any Owner commits any breach of or omits to observe any of the
obligations or undertakings expressed to be assumed by it under clauses 8.2
or 8.3 or 8.4; or


 


47

















 


10.1.4      Breach of other obligations: any Security Party commits any breach of or omits to observe any
of its obligations or undertakings (including, without limitation, any
Financial Covenant) expressed to be assumed by it under any of the Security
Documents or any of the Underlying Documents (other than those referred to in
clauses 10.1.1 and 10.1.3 above) and, in respect of any such breach or
omission which in the opinion of the Banks is capable of remedy, such action as
the Banks may require shall not have been taken within fourteen (14) days of
the Banks notifying the relevant Security Party of such default and of such
required action; or


 


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


 


10.1.6      Cross-default: any
Indebtedness of any Security Party is not paid when due or any Indebtedness of
any Security Party becomes (whether by declaration or automatically in
accordance with the relevant agreement or instrument constituting the same) due
and payable prior to the date when it would otherwise have become due (unless
as a result of the exercise by the relevant Security Party of a voluntary right
of prepayment), or any creditor of any Security Party becomes entitled to
declare any such Indebtedness due and payable or any facility or commitment
available to any Security Party relating to Indebtedness is withdrawn,
suspended or cancelled by reason of any default (however described) of the
person concerned unless the relevant Security Party shall have satisfied the
Banks that such withdrawal, suspension or cancellation will not affect or
prejudice in any way the relevant Security Party’s ability to pay its debts as
they fall due and fund its commitments, or any guarantee given by any Security
Party in respect of Indebtedness is not honoured when due and called upon; or


 


10.1.7      Legal process: any
judgment or order made against any Security Party is not stayed or complied
with within seven (7) days or a creditor attaches or takes possession of, or a
distress, execution, sequestration or other process is levied or enforced upon
or sued out against, any of the undertakings, assets, rights or revenues of any
Security Party and is not discharged within seven (7) days; or


 


10.1.8      Insolvency: the
Borrower or any Owner is unable or admits inability to pay its debts as they
fall due; suspends making payments on any of its debts or announces an
intention to do so;  becomes
insolvent;  has assets the value of which
is less than the value of its liabilities (taking into account contingent and
prospective liabilities); or suffers the declaration of a moratorium in respect
of any of its Indebtedness;  or


 


10.1.9      Reduction or loss of capital: a meeting is convened by the Borrower for the purpose of passing
any resolution to purchase, reduce or redeem any of its share capital; or


 


10.1.10    Winding up: any
corporate action, legal proceedings or other procedure or step is taken for the
purpose of winding up any Security Party or an order is made or resolution
passed for the winding up of any Security Party or a notice is issued convening
a meeting for the purpose of passing any such resolution; or


 


10.1.11    Administration: any
petition is presented, notice given or other step is taken for the purpose of
the appointment of an administrator of any Security Party or the Banks and/or
the Agent believe that any such petition or other step is imminent or an
administration order is made in relation to any Security Party; or


 


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


 


10.1.13    Compositions: any
corporate action, legal proceedings or other procedures or steps are taken, or
negotiations commenced, by any Security Party or by any of its creditors with a
view to the general readjustment or rescheduling of all or part of its
indebtedness or to proposing


 


48

















 


any
kind of composition, compromise or arrangement involving such company and any
of its creditors; or


 


10.1.14    Analogous proceedings:
there occurs, in relation to any Security Party, in any country or territory in
which any of them carries on business or to the jurisdiction of whose courts
any part of their assets is subject, any event which, in the reasonable opinion
of the Banks and/or the Agent, appears in that country or territory to
correspond with, or have an effect equivalent or similar to, any of those
mentioned in clauses 10.1.7 to 10.1.13 (inclusive) or any Security Party
otherwise becomes subject, in any such country or territory, to the operation
of any law relating to insolvency, bankruptcy or liquidation; or


 


10.1.15    Cessation of business:
any Security Party suspends or ceases or threatens to suspend or cease to carry
on its business; or


 


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


 


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


 


10.1.18    Unlawfulness: it
becomes impossible or unlawful at any time for any Security Party, to fulfil
any of the covenants and obligations expressed to be assumed by it in any of
the Security Documents, the Master Swap Agreement or any of the Underlying
Documents or for the Agent or the Banks to exercise the rights or any of them
vested in them under any of the Security Documents, the Master Swap Agreement or
any Underlying Documents or otherwise; or


 


10.1.19    Repudiation: any
Security Party repudiates any of the Security Documents, the Master Swap
Agreement or any of the Underlying Documents or does or causes or permits to be
done any act or thing evidencing an intention to repudiate any of the Security
Documents, the Master Swap Agreement or any of the Underlying Documents; or


 


10.1.20    Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of
the property (or part thereof) which is the subject of any of the Security
Documents and/or the Master Swap Agreement becomes enforceable; or


 


10.1.21    Material adverse change: there occurs, in the opinion of the Banks and/or the Agent, a
material adverse change in the financial condition of any Security Party as
described by the Borrower or any Security Party to the Banks and/or the Agent
in the negotiation of this Agreement; or


 


10.1.22    Arrest: any Ship is
arrested, confiscated, seized, taken in execution, impounded, forfeited,
detained in exercise or purported exercise of any possessory lien or other
claim or otherwise taken from the possession of the Borrower or Owner and the
Borrower or Owner shall fail to procure the release of such Ship within a
period of fourteen (14) days thereafter; or


 


10.1.23    Registration: the
registration of any Ship under the laws and flag of the Flag State is cancelled
or terminated without the prior written consent of the Agent or, if any Ship is
only provisionally registered on the relevant Delivery Date, such Ship is not
permanently registered under the laws and flag of the Flag State within the
time limit imposed by the relevant Flag State (subject always to the relevant Mortgage
remaining in full force and effect);


 


10.1.24    Unrest: any of the Flag
States becomes involved in hostilities or civil war or there is a seizure of
power in any of the Flag States by unconstitutional means if, in any such case,
such event could in the opinion of the Banks and/or the Agent reasonably be
expected to have a material adverse effect on the security constituted by any
of the Security Documents; or


 


49

















 


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


 


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


 


10.1.27    Parent company: any
Owner ceases to be a wholly-owned Subsidiary of the Borrower or the Borrower (without
the prior written consent of the Agent) ceases to be a listed company on NASDAQ
and/or the main board of the SGX-ST; or


 


10.1.28    Breach of Contract:
there is a material breach by the Borrower or any Owner, a Seller or a Builder
of any Contract or the Borrower fails to repay any Advance of Facility B
constituting (in part) Expected Project Costs representing a deposit under a Contract
relating to a purchase of an Additional Ship which is a second hand vessel within
7 days of the date of expiry or termination of the relevant Contract; or


 


10.1.29    Termination or variation of a Contract: a Contract is terminated for any reason whatsoever or a Contract
is frustrated or varied in any manner not permitted by or pursuant to the relevant
Pre-delivery Security Assignment or this Agreement; or


 


10.1.30    Termination of a Refund Guarantee: a Refund Guarantee is repudiated, cancelled, rescinded or
otherwise terminated; or


 


10.1.31    Non-Delivery of Ship: a
Ship is not delivered to, and accepted by, the Borrower or relevant Owner under
a Contract on or before the Termination Date (or such later date as the Banks
and/or the Agent in their absolute discretion, may agree in writing); or


 


10.1.32    Material events: any
other event occurs or circumstance arises which, in the opinion of the Banks
and/or the Agent, is likely materially and adversely to affect either


 


(a)     the ability of any Security Party to perform all or any of its
obligations under or otherwise to comply with the terms of any of the Security
Documents or the Master Swap Agreement; or


 


(b)    the security created by any of the Security Documents; or


 


10.1.33    Failure to Drawdown Delivery Date Advance: the Borrower fails to drawdown a Delivery Date Advance without the
prior written consent of the Agent which shall not be unreasonably withheld; or


 


10.1.34    Intra-Group Loans Agreements:  the Borrower demands or
accepts any repayments of principal or interest or any other sum payable under
the Intra-Group Loan Agreements save as envisaged by clause 14.5 or takes any
action against any Owner without the prior written consent of the Agent.


 


Provided
always, that upon the occurrence of any Event(s) of Default which relate solely
to the Builder and the Refund Guarantor (and do not arise whether directly or
indirectly as a result of any act or omission on the part of the Borrower
and/or any Owner), the Banks agree that such Event(s) of Default may be
remedied by the Borrower prepaying within such time as the Banks shall notify
the Borrower that part of the Loan which the Banks in their reasonable
discretion determine to be adversely affected by the relevant Event(s) of
Default.


 


50

















 


The Banks further agree, that in relation to any Event(s) of Default
that relate solely to any Manager (not being Target Marine S.A. or any other
Related Company of the Borrower and/or any Owner (which have not arisen,
whether directly or indirectly as a result of any act or omission on the part
of the Borrower and/or any Owner)) such Event(s) of Default may be remedied by
the Borrower and/or any relevant Owner replacing the Manager which has caused
the relevant Event(s) of Default to arise with such other manager as shall be
acceptable to the Banks in their sole discretion within such time period as the
Banks shall notify the Borrower.


 


10.2     Acceleration


 


The Agent may, with the prior approval of
the Majority Banks and without prejudice to any other rights of the Banks, at
any time after the happening of an Event of Default by notice to the Borrower
declare that:


 


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


 


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


 


10.3     Demand basis


 


If, pursuant to clause 10.2.2, the Agent declares
the Loan to be due and payable on demand, the Agent may (with the prior
approval of the Majority Banks) by written notice to the Borrower:


 


10.3.1      call for repayment of the Loan on such date as may be specified
whereupon the Loan shall become due and payable on the date so specified
together with all interest and commitment commission accrued and all other sums
payable under this Agreement; or


 


10.3.2      withdraw such declaration with effect from the date specified in such
notice.


 


11        Indemnities


 


11.1     Miscellaneous indemnities


 


The Borrower shall on demand indemnify each
Finance Party, without prejudice to any of their other rights under any of the
Security Documents and/or the Master Swap Agreement, against any loss (including
loss of Margin) or expense which the Finance Parties shall certify as sustained
or incurred by it as a consequence of:


 


11.1.1      any default in payment by the Borrower of any sum under any of the
Security Documents when due;


 


11.1.2      the occurrence of any other Event of Default;


 


11.1.3      any prepayment of the Loan or part thereof being made under
clause 4.3, 4.5, 8.2.1 or 12.1, or any other 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; or


 


11.1.4      any Advance not being made for any reason (excluding any default by
the Agent or any Bank) after the Drawdown Notice in relation thereto has been
given,


 


including, in any such case, but not limited to, any
loss or expense sustained or incurred by any Bank in maintaining or funding its
Contribution or any part thereof or in liquidating or re-employing
deposits from third parties acquired to effect or maintain its Contribution or
any part thereof or any other amount owing to such Bank Provided always that no
such indemnity shall be payable in the case where such loss or expenses
sustained or incurred has arisen as a result of the gross negligence or wilful
misconduct of the Finance Parties.


 


51

















 


11.2     Currency indemnity


 


If any sum due from the Borrower under any
of the Security Documents or any order or judgment given or made in relation
thereto has to be converted from the currency (the “first
currency”) in which the same is payable under the relevant Security
Document or under such order or judgment into another currency (the “second currency”) for the purpose of:


 


11.2.1      making or filing a claim or proof against the Borrower;


 


11.2.2      obtaining an order or judgment in any court or other tribunal; or


 


11.2.3      enforcing any order or judgment given or made in relation to any of
the Security Documents, the Borrower shall indemnify and hold harmless the
Agent and each Bank from and against any loss suffered as a result of any difference
between:


 


(a)     the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency; and


 


(b)    the rate or rates of exchange at which the Agent and/or any Bank may
in the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. 
Any amount due from the Borrower under this clause 11.2 shall be
due as a separate debt and shall not be affected by judgment being obtained for
any other sums due under or in respect of any of the Security Documents and the
term “rate of exchange” includes any premium
and costs of exchange payable in connection with the purchase of the first
currency with the second currency.


 


11.3     Environmental indemnity


 


The Borrower shall indemnify each Finance
Party on demand in respect of all costs, claims, losses, demands, liabilities,
penalties and fines, of whatever nature (including, without limitation, those
arising under Environmental Laws) which may be incurred or made against any Finance
Party at any time relating to, or arising directly or indirectly in any manner
or for any cause or reason whatsoever out of an Environmental Claim made or asserted
against any Finance Party which would or could not have been brought if such Finance
Party had not entered into any of the Security Documents or been involved in
any of the transactions contemplated by the Security Documents.


 


12        Unlawfulness and increased costs


 


12.1     Unlawfulness


 


If it is or becomes contrary to any law or
regulation for any Bank to make any Advance to, or to maintain its Commitment
or fund its Contribution such Bank shall promptly, through the Agent, give
notice to the Borrower whereupon:


 


12.1.1      such Bank’s Commitment shall be reduced to zero; and


 


12.1.2      the Borrower shall be obliged to prepay the Contribution of such
Bank either:


 


(a)     forthwith; or


 


(b)    on a future specified date not being earlier than the latest date
permitted by the relevant law or regulation together with interest and
commitment commission accrued to the date of prepayment and all other sums
payable by the Borrower under this Agreement.


 


In any such event the Borrower and the Banks shall (as per the
provisions of clause 12.2) negotiate in good faith (but without incurring any
legal obligations) with a view to agreeing terms for making the Loan or any
Advance (as the case may be) available from another


 


52

















 


jurisdiction or funding the Loan or any Advance (as the case may be)
from alternative sources.


 


12.2     Increased costs


 


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


 


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


 


12.2.2      increase the cost to, or impose an additional cost on, any Bank or
its holding company in making or keeping the Commitment available or
maintaining or funding its Contribution; and/or


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)    the Agent shall negotiate with the Borrower in good faith with a
view to restructuring the transaction constituted by the Security Documents in
a way which will (in the reasonable opinion of the Agent) satisfactorily avoid
either the unlawfulness or increased costs concerned (each as the case may be)
without either decreasing the amounts or net returns due to the Agent and the
Banks under the Security Documents or which would, but for such unlawfulness or
such increased costs (each as the case may be), have been so due, or otherwise
adversely affecting the rights, interests and security of the Banks under the
transaction as presently constituted and will not (in the reasonable opinion of
the Agent) increase the cost to the Borrower of or otherwise adversely affect
the rights, and interests of the Borrower under the transactions (and unless
the Agent nominates a longer period (which it shall be at liberty to do)), such
negotiations shall continue for a period of thirty (30) days after the Borrower
has been given notice under clause 12.2.6(a) or for such lesser period as is
permitted under applicable law having regard to either the unlawfulness or the
increased costs concerned (such period called the “Negotiation
Period”);


 


(c)     if at the end of the Negotiation Period the Agent and the Borrower
have not reached agreement on a restructuring of the transaction on the basis
described in sub-clause (b) above then the Borrower shall on demand, made at
any time after expiry of the Negotiation Period whether or not the relevant
Bank’s Contribution has been repaid, pay to such Bank the amount which the Bank
specifies (in a certificate (which shall be


 


53

















 


conclusive
in the absence of manifest error) setting forth the basis of the computation of
such amount but not including any matters which such Bank regards as
confidential in relation to its funding arrangements) is required to compensate
such Bank for such alternative funding, increased cost, reduction, payment or
forgone return.


 


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


 


12.3     Exception


 


Nothing in clause 12.2 shall entitle
any Bank to receive any amount in respect of compensation for any such
liability to Taxes, increased or additional cost, reduction, payment, foregone
return or loss to the extent that the same is the subject of an additional
payment under clause 6.7.


 


13        Security, set-off and pro-rata payments


 


13.1     Application of moneys


 


All moneys received by the Agent and/or the
Banks under or pursuant to any of the Security Documents and expressed to be
applicable in accordance with the provisions of this clause 13.1 shall be
applied by the Agent and/or the Banks in the following manner:


 


13.1.1      first in or toward payment of all unpaid fees, commissions and
expenses which may be owing to any Finance Party (other than the Swap Bank) under
any of the Security Documents (other than the Master Swap Agreement);


 


13.1.2      secondly in or towards payment of any arrears of interest owing in
respect of the Loan or any part thereof;


 


13.1.3      thirdly in or towards repayment of the Loan (whether the same is due
and payable or not);


 


13.1.4      fourthly in or towards payment to any Bank for any loss suffered by
reason of any such payment in respect of principal not being effected on an
Interest Payment Date relating to the part of the Loan repaid;


 


13.1.5      fifthly in or towards payments to the Swap Bank of any sum
(including without limitation all unpaid, fees, commissions and expenses) owing
to the Swap Bank under the Master Swap Agreement;


 


13.1.6      sixthly in or towards payment to any Bank of any other sums owing to
it under any of the Security Documents; and


 


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


 


or in such other manner as the Banks may
determine.


 


13.2     Set-off


 


The Borrower authorises each Bank (without
prejudice to any of such Bank’s rights at law, in equity or otherwise), at any
time and without notice to the Borrower:


 


13.2.1      to apply any credit balance to which the Borrower is then entitled
standing upon any account of the Borrower with any branch of such Bank in or
towards satisfaction of any sum due and payable from the Borrower to such Bank
under any of the Security Documents;


 


13.2.2      in the name of the Borrower and/or such Bank to do all such acts and
to execute all such documents as may be necessary or expedient to effect such
application; and


 


13.2.3      to combine and/or consolidate all or any accounts in the name of the
Borrower with such Bank.


 


54

















 


For this purpose, each such Bank is
authorised to purchase with the moneys standing to the credit of such account
such other currencies as may be necessary to effect such application.  No Bank shall be obliged to exercise any
right given to it by this clause 13.2. 
Each Bank shall notify the Agent and the Borrower forthwith upon the
exercise or purported exercise of any right of set-off giving full
details in relation thereto and the Agent shall inform the other Banks.


 


13.3   Pro-rata payments


 


If at any time the proportion which any
Bank (the “Recovering Bank”) has received or
recovered (other than from an Assignee, a Substitute or a sub-participant in
such Bank’s Contribution or any other payment of an amount due to the
Recovering Bank for its sole account pursuant to clauses 3.6, 4.4, 5.1, 6.1,
11.1, 11.2, 12.1 or 12.2) in respect of its share of any payment to be made for
the account of the Recovering Bank and one or more other Banks under any of the
Security Documents is greater (the amount of the excess being referred to in
this clause 13.3 as the “excess amount”)
than the proportion of the share of such payment received or recovered by the
Bank receiving or recovering the smallest or no proportion of its share, then:


 


13.3.1      within two (2) Banking Days of such receipt or recovery, the
Recovering Bank shall pay to the Agent an amount equal (or equivalent) to the
excess amount;


 


13.3.2      the Agent shall treat such payment as if it were part of the payment
to be made by the Borrower and shall distribute the same in accordance with
clause 13.1; and


 


13.3.3      as between the Borrower and the Recovering Bank the excess amount
shall be treated as not having been paid but the obligations of the Borrower to
the other Banks shall, to the extent of the amount so paid to them, be treated
as discharged.


 


Each Bank shall forthwith notify the Agent
of any such receipt or recovery by such Bank other than by payment through the
Agent.  If any excess amount subsequently
has to be wholly or partly refunded by the Recovering Bank which paid an amount
equal thereto to the Agent under (a) above each Bank to which any part of such
amount was distributed shall on request from the Recovering Bank repay to the
Recovering Bank such Bank’s pro-rata share of the amount which has to be
refunded by the Recovering Bank.  Each
Bank shall on request supply to the Agent such information as the Agent may
from time to time request for the purpose of this clause 13.3.  Notwithstanding the foregoing provisions of
this clause 13.3 no Recovering Bank shall be obliged to share any excess amount
which it receives or recovers pursuant to legal proceedings taken by it to
recover any sums owing to it under this Agreement with any other party which
has a legal right to, but does not, either join in such proceedings or commence
and diligently pursue separate proceedings to enforce its rights in the same or
another court (unless the proceedings instituted by the Recovering Bank are
instituted by it without prior notice having been given to such party through
the Agent).


 


13.4   No release


 


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


 


13.5   No charge


 


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


 


13.6   Further assurance


 


The Borrower undertakes that the Security
Documents shall both at the date of execution and delivery thereof and so long
as any moneys are owing under any of the Security Documents be valid and
binding obligations of the respective parties thereto and rights of the Agent
enforceable in accordance with their respective terms and that it will, at its
expense, execute, sign, perfect


 


55

















 


and do, and will procure the execution,
signing, perfecting and doing by each of the other Security Parties of, any and
every such further assurance, document, act or thing as in the reasonable
opinion of the Agent and/or any other Finance Party may be necessary or
desirable for perfecting the security contemplated or constituted by the
Security Documents.


 


13.7     Conflicts


 


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


 


14        Earnings Accounts


 


14.1     General


 


The Borrower undertakes with each of the Finance
Parties that it will:


 


14.1.1      on or before the first Drawdown Date procure that each Owner will open
each of the Earnings Accounts;


 


14.1.2      on or before the first Drawdown Date open the Retention Accounts and
the Swap Account; and


 


14.1.3      procure that all moneys payable to the Borrower and/or the Owners in
respect of the Earnings of the Ships shall, unless and until the Agent directs
to the contrary pursuant to proviso (a) to clause 2.1 of the relevant Deed
of Covenant or relevant General Assignment, be paid to the Earnings Accounts
Provided however that if any of the moneys paid to the Earnings Accounts are
payable in a currency other than Dollars, the Borrower shall instruct and shall
procure that the relevant Owner shall instruct the Account Bank to convert such
moneys into Dollars at the Account 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; and


 


14.2     Earnings Accounts terms


 


14.2.1      The Banks acknowledge that the relevant Owner shall, unless and
until a Default shall occur and the Agent shall direct to the contrary, be
entitled from time to time, subject to the agreement of the Account Bank to
require that moneys for the time being standing to the credit of the Earnings
Accounts be transferred in such amounts and for such periods as the Borrower or
relevant Owner selects to fixed-term deposit accounts (“deposit
accounts”) opened in the name of the relevant Owner with the Account
Bank.  The relevant Owner shall not be
entitled pursuant to clause 14.3 to withdraw moneys standing to the credit
of the Earnings Accounts which are the subject of a fixed term deposit until
the expiry of the period of such deposit unless the relevant Owner shall, on
withdrawing such moneys pay to the Account Bank on demand any loss or expense
which the Account Bank shall certify that it has sustained or incurred as a
result of such withdrawal being made prior to the expiry of the period of the
relevant deposit and the Account Bank shall be entitled to debit the Earnings
Accounts for the amount so certified prior to such withdrawal being made.  In the event that any moneys so deposited are
to be applied pursuant to clause 14.4, the Borrower or relevant Owner
shall, on such application being made, pay to the Account Bank on demand any
loss or expense which the Account Bank shall certify that it has sustained or
incurred as a result of such application being made prior to the expiry of the
period of the relevant deposit and the Account Bank shall be entitled to debit
the relevant Earnings Account for the amount so certified prior to such
application being made.  Any deposit
accounts shall, for all the purposes of the Security Documents, be deemed to be
sub-accounts of Earnings Accounts from which the moneys deposited in the
deposit accounts were transferred and all references in the Security Documents
to the Earnings Accounts shall be deemed to include the deposit accounts deemed
as aforesaid to be sub-accounts thereof.


 


56

















 


14.3     Earnings Accounts: withdrawals


 


Unless the Agent otherwise agrees in
writing, neither the Borrower nor the Owners shall be entitled to withdraw any
moneys from the Earnings Accounts at any time during the Security Period save
that, unless and until a Default shall occur and the Agent shall direct to the
contrary, the Borrower and each of the Owners may, subject to clause 14.2.1,
withdraw moneys from the Earnings Accounts:


 


14.3.1      to transfer to the Retention Accounts on each Retention Date all or
part of the Retention Amount for such Retention Date;


 


14.3.2      to pay any amount to the Agent and/or the other Finance Parties in
or towards payments of any instalments of interest or principal or any other
amounts then payable pursuant to the Security Documents (including any amounts
owing to the Swap Bank under the Master Swap Agreement) and the Borrower hereby
irrevocably and unconditionally instructs the Account Bank to make such
payments on their due date if and to the extent the Borrower does not issue the
appropriate instructions on or before such due date;


 


14.3.3      prior to the Delivery Date of a Ship to apply any sums deposited to
the relevant Earnings Account by the Agent as Expected Project Costs for such Ship
in full and final payment of such Expected Project Costs subject always to the relevant
Owner applying no more than the sum deposited to the relevant Earnings Account
by the Agent;


 


14.3.4      following the Delivery of a Ship to pay the proper and reasonable
operating expenses (including costs of insuring, repairing and maintaining such
Ship) of such Ship and the proper and reasonable expenses of administering the
affairs of the relevant Owner;


 


14.3.5      to pay any Manager’s remuneration under any Management Agreement in
the amounts and at the times therein stated;


 


14.3.6      to pay or discharge liabilities or obligations to third parties not
exceeding the aggregate of any deductible under a Ship’s insurances applicable
to such liabilities or obligations and the amount of any insurance moneys in
respect of such liabilities or obligations which have been paid by such Ship’s
insurers to the relevant Earnings Account with the knowledge and approval of
the Agent; and


 


14.3.7      to pay for the making good and/or repair of any loss or damage
resulting from a casualty to a Ship not exceeding the aggregate of any
deductible under such Ship’s insurances applicable to such casualty and the
amount of any insurance moneys in respect of such casualty and not exceeding
the costs of making good and/or repairing any such loss or damage which have
been paid by such Ship’s insurers to the relevant Earnings Account with the
knowledge and approval of the Agent.


 


14.4     Retention Accounts: credits and withdrawals


 


14.4.1      The Borrower undertakes with the Agent and the Finance Parties that it
will, from the date of this Agreement and so long as any moneys are owing under
the Security Documents, on each Retention Date pay to the Account Bank for
credit to the Retention Accounts, the Retention Amount for such Retention Date
provided however that, to the extent that there are moneys standing to the
credit of the Earnings Accounts as at the relevant Retention Date, such moneys
shall, up to an amount equal to the Retention Amount, be transferred to the
Retention Accounts on such Retention Date (and the Borrower hereby instructs
the Account Bank to effect each such transfer) and to that extent the Borrower’s
obligations to make the payments referred to in this clause 14.4.1 shall have
been fulfilled upon such transfer being effected.


 


14.4.2      Unless and until there shall occur an Event of Default (whereupon
the provisions of clause 14.5 shall apply), all Retention Amounts credited to
the Retention Accounts together with interest from time to time accruing or at
any time accrued thereon shall be applied by the Account Bank (and the Borrower
hereby irrevocably and unconditionally instructs the Account Bank so to apply
the same) in the following manner:


 


57

















 


(a)     upon each Repayment Date, and on each day that interest is payable
pursuant to clause 3.1 whether in respect of an Advance, the Facility A Loan,
the Facility B Loan or the Loan, in or towards payment to the Agent of the
instalment then falling due for repayment or (as the case may be) the amount of
interest then due. Each such application by the Account Bank shall constitute a
payment in or towards satisfaction of the Borrower’s corresponding payment
obligations under this Agreement but shall be strictly without prejudice to the
obligations of the Borrower to make any such payment to the extent that the
aforesaid application by the Account Bank is insufficient to meet the same; and


 


(b)    following any application by the Account Bank pursuant to clause
14.4.2(a) in transfer to the Earnings Accounts of any moneys standing to the
credit of the Retention Accounts to the extent that such moneys do not
constitute Retention Amounts or any payments received from the Swap Bank
pursuant to the provisions of the Swap Assignment.


 


14.4.3      Unless the Agent otherwise agrees in writing and subject to clause
14.4.2, the Borrower shall not be entitled to withdraw any moneys from the
Retention Accounts at any time from the date of this Agreement and so long as
any moneys are owing under the Security Documents.


 


14.5     Application of Accounts


 


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


 


14.6     Repayment under the Intra-Group Loan Agreements


 


The Borrower acknowledges and agrees that until
such time as all sums due and payable under this Agreement and each of the
other Security Documents have been satisfied in full the obligation of each
Owner to pay all sums of principal and interest and any other sums payable
under the relevant Intra-Group Loan Agreements shall be fully satisfied by that
Owner depositing the relevant sums to the credit of its Earnings Account and
the Borrower hereby irrevocably and unconditionally acknowledges that all
moneys from time to time standing to the credit of the Earnings Accounts shall
be freely available to the Agent for application in or towards payment of any
instalments of principal or interest or any other amounts then due and payable
pursuant to this Agreement and any of the other Security Documents.


 


14.7     Security over account


 


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


 


15        Assignment, substitution and lending office


 


15.1     Benefit and burden


 


This Agreement shall be binding upon, and
enure for the benefit of, the Finance Parties, the Borrower and their
respective successors.


 


15.2     No assignment by Borrower


 


The Borrower may not assign or transfer any
of its rights or obligations under this Agreement.


 


15.3     Assignment by Banks


 


Each Bank may assign all or any part of its
rights subject to a minimum assignment amount of ten million Dollars ($10,000,000)
in respect of its Contribution under this Agreement or under any


 


58

















 


of the other Security Documents to any
other bank or financial institution or to a trust, fund or other entity which
is regularly engaged in or established for the purpose of making, purchasing or
investing in liens, securities or other financial assets (an “Assignee”) with the approval of the Agent and provided that
no Default has occurred the consent of the Borrower (which consent shall not be
unreasonably withheld or delayed), and on the date upon which such assignment
takes effect, the Assignee shall pay to the Agent for its own account an
assignment fee of three thousand Dollars ($3,000).


 


15.4     Substitution


 


Each Bank may transfer, by way of novation,
all or any part of its rights, benefits and/or obligations under this Agreement
to another person subject to a minimum transfer amount of ten million Dollars
($10,000,000) to be transferred (a “Substitute”)
and provided that no Default has occurred and is continuing the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed).  Any such novation shall be effected upon five
(5) Banking Days’ prior notice by delivery to the Agent of a duly completed
Substitution Certificate duly executed by such Bank, the Substitute and the
Agent (for itself, the Borrower and the other Banks) and following receipt by
the transferring Bank from the Substitute of an amount equal to the purchase
price to be paid by the Substitute for the Contribution being transferred.  On the effective date specified in a
Substitution Certificate so executed and delivered, to the extent that they are
expressed in such Substitution Certificate to be the subject of the novation
effected pursuant to this clause 15.4:


 


15.4.1      the existing parties to this Agreement and the Bank party to the
relevant Substitution Certificate shall be released from their respective
obligations towards one another under this Agreement (“discharged
obligations”) and their respective rights against one another under
this Agreement (“discharged rights”) shall be
cancelled;


 


15.4.2      the Substitute party to the relevant Substitution Certificate and
the existing parties to this Agreement (other than the Bank party to such
Substitution Certificate) shall assume obligations towards each other which
differ from the discharged obligations only insofar as they are owed to or
assumed by such Substitute instead of to or by such Bank; and


 


15.4.3      the Substitute party to the relevant Substitution Certificate and
the existing parties to this Agreement (other than the Bank party to such
Substitution Certificate) shall acquire rights against each other which differ
from the discharged rights only insofar as they are exercisable by or against
such Substitute instead of by or against such Bank


 


and, on the date upon which such novation
takes effect, the Substitute shall pay to the Agent for its own account a transfer
fee of three thousand Dollars ($3,000). 
The Agent shall promptly notify the other parties hereto of the receipt
by it of any Substitution Certificate and shall promptly deliver a copy of such
Substitution Certificate to the Borrower.


 


15.5     Reliance on Substitution Certificate


 


The Agent, the Banks and the Borrower shall
be fully entitled to rely on any Substitution Certificate delivered to the
Agent in accordance with the foregoing provisions of this clause 15 which is
complete and regular on its face as regards its contents and purportedly signed
on behalf of the relevant Bank and the Substitute and neither the Agent, nor
the Banks nor the Borrower shall have any liability or responsibility to any
party as a consequence of placing reliance on and acting in accordance with any
such Substitution Certificate if it proves to be the case that the same was not
authentic or duly authorised.


 


15.6     Signing of Substitution Certificate


 


The Borrower and each of the Banks
irrevocably authorise the Agent to countersign each Substitution Certificate on
its behalf without any further consent of, or consultation with, the Borrower
or such Bank (as the case may be).


 


59

















 


15.7     Construction of certain references


 


If any Bank assigns all or any part of its
rights or novates all or any part of its rights, benefits and obligations as
provided in clause 15.3 or 15.4 all relevant references in this Agreement to
such Bank shall thereafter be construed as a reference to such Bank and/or its
Assignee or Substitute (as the case may be) to the extent of their respective
interests.


 


15.8     Documenting assignments and novations


 


If any Bank assigns all or any part of its
rights or novates all or any part of its rights, benefits and/or obligations as
provided in clauses 15.3 or 15.4 the Borrower undertakes, immediately on
being requested to do so by the Agent and at the cost of the Bank that has so
assigned or novated all or any part of its rights and/or obligations, to enter
into, and procure that the other Security Parties shall enter into, such
documents as may be necessary or desirable to transfer to the Assignee or
Substitute all or the relevant part of such Bank’s interest in the Security Documents
and all relevant references in this Agreement to such Bank shall thereafter be
construed as a reference to the Bank and/or its Assignee or Substitute (as the
case may be) to the extent of their respective interests.


 


15.9     Lending office


 


Each Bank shall lend through its office at
the address specified in Schedule 1 or, as the case may be, in any relevant
Substitution Certificate or through any other office of such Bank selected from
time to time by it through which such Bank wishes to lend for the purposes of
this Agreement Provided always that such change of office shall not result in
an increase in the obligations of the Borrower under clause 6.7.  If the office through which such Bank is
lending is changed pursuant to this clause 15.9, such Bank shall notify the
Agent promptly of such change and the Agent shall notify the Banks and the
Borrower.


 


15.10   Disclosure of information


 


Any Bank or the Agent may, with the prior
consent of the Borrower which shall not be unreasonably withheld, disclose to a
prospective assignee, substitute or transferee or to any other person who may
propose entering into contractual relations with such Bank or the Agent in
relation to this Agreement information about the Borrower.


 


16        Agent


 


16.1     Appointment of the Agent


 


The terms and basis on which the Agent has
been appointed by the Banks as facility agent and as security agent and trustee
respectively are set out in the Agency Agreement including, among other things,
the manner in which any decision to exercise any right, powers, discretion or
authority or to carry out any duty are to be made between the Banks and the
Agent.


 


17        Notices and other matters


 


17.1     Notices


 


Every notice, request, demand or other
communication under this Agreement or (unless otherwise provided therein) under
any of the other Security Documents shall:


 


17.1.1      be in writing delivered personally or by first-class prepaid
letter (airmail if available) or facsimile transmission or other means of
telecommunication in permanent written form;


 


17.1.2      be deemed to have been received, subject as otherwise provided in
the relevant Security Document, in the case of a letter, when delivered
personally or three (3) days after it has been put in to the post and, in the
case of a facsimile transmission or other means of telecommunication in
permanent written form, at the time of despatch (provided that if the date


 


60

















 


of
despatch is not a business day in the country of the addressee or if the time
of despatch is after the close of business in the country of the addressee it
shall be deemed to have been received at the opening of business on the next
such business day); and


 


17.1.3      be sent:


 


(a)     to the Borrower and any Owner at:


 


24, Kanigos St

Kastella


18534 Piraeus


Greece


 


Fax No:        + 30 210 422 2541 /2542


 


(b)    to the Agent and/or the Banks at:


 


HSH Nordbank AG


Gerhart-Hauptmann-Platz 50

20095 Hamburg

Germany


 


Fax no:        + 49 40 3333 34118


Attention:   Shipping, Greek Clients


 


(c)     to the Arranger at:


 


HSH Nordbank AG


Gerhart-Hauptmann-Platz 50

20095 Hamburg

Germany


 


Fax no:        + 49 40 3333 34118


Attention:   Shipping, Greek Clients


 


(d)    to the Swap Bank at:


 


HSH Nordbank AG


Martensdamm 6 

24103 Kiel

Germany


 


Fax No:        + 4940 3333 34086


Attention:   Mr Heiko Ludwig, Head of Financial Markets


 


or to such other address and/or numbers as is notified
by one party to the other party under this Agreement.


 


17.2     No implied waivers, remedies cumulative


 


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


 


61

















 


17.3     English language


 


All certificates, instruments and other
documents to be delivered under or supplied in connection with any of the
Security Documents shall be in the English language or shall be accompanied by
a certified English translation upon which the Bank shall be entitled to rely.


 


17.4     Counterparts


 


This Agreement may be entered into in any
number of counterparts and by the parties to it on separate counterparts, each
of which when executed and delivered shall be an original, but all the
counterparts shall together constitute one and the same instrument.


 


18        Governing law and jurisdiction


 


18.1     Law


 


This Agreement is governed by and shall be construed
in accordance with English law.


 


18.2     Submission to jurisdiction


 


The Borrower agrees, for the benefit of the Agent and
the Banks, that any legal action or proceedings arising out of or in connection
with this Agreement against the Borrower or any of its assets may be brought in
the English courts.  The Borrower
irrevocably and unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Hill Taylor Dickinson at present
of Irongate House, Duke’s Place, London EC3A 7HX to receive for it and on its
behalf, service of process issued out of the English courts in any such legal
action or proceedings.  The submission to
such jurisdiction shall not (and shall not be construed so as to) limit the
right of the Agent and/or the Banks to take proceedings against the Borrower in
the courts of any other competent jurisdiction nor shall the taking of proceedings
in any one or more jurisdictions preclude the taking of proceedings in any
other jurisdiction, whether concurrently or not.


 


The parties further agree that only the Courts of
England and not those of any other State shall have jurisdiction to determine
any claim which the Borrower may have against the Agent, the Banks or any of
them arising out of or in connection with this Agreement.


 


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


 


62














 


Schedule 1


 


The Banks and the Swap Bank


 


Part 1


The Banks’ Commitment


 


	
  Name

  	
   

  	
  Address and fax

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ($)

  	
   

  
	
  HSH Nordbank AG

  	
   

  	
  Attn: Shipping, Greek Clients

  Gerhart-Hauptmann-Platz 50

  20095 Hamburg

  Germany

  

  Fax: + 49 40 3333 34118

  	
   

  	
  $

  	
  295,000,000

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  $

  	
  295,000,000

  	
   

  



 


Part 2


The Swap Bank


 




	
  Name

  	
   

  	
  Address and fax

  
	
  HSH Nordbank AG

  	
   

  	
  Martensdamm 6

  24103 Kiel

  Germany

  

  Fax: + 4940 3333 34086

  






 


 


63

















 


Part 3


Facility A Commitments


 


	
  Name

  	
   

  	
  Address and fax

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ($)

  	
   

  
	
  HSH Nordbank AG

  	
   

  	
  Attn: Shipping, Greek Clients

  Gerhart-Hauptmann-Platz 50

  20095 Hamburg

  Germany

  

  Fax: + 49 40 3333 34118

  	
   

  	
  $

  	
  145,000,000

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  $

  	
  145,000,000

  	
   

  



 


Part 4


Facility B Commitments


 


	
  Name

  	
   

  	
  Address and fax

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ($)

  	
   

  
	
  HSH Nordbank AG

  	
   

  	
  Attn: Shipping, Greek Clients

  Gerhart-Hauptmann-Platz 50

  20095 Hamburg

  Germany

  

  Fax: + 49 40 3333 34118

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  $

  	
  150,000,000

  	
   

  



 


64

















 


Schedule 2

Part 1 - Initial Ships


 


	
  Ship

  	
   

  	
  Owner

  	
   

  	
  Country of

  Incorporation of

  Owner

  	
   

  	
  Flag

  	
   

  	
  Official

  Number

  	
   

  	
  Country of

  Underlying

  Registration

  	
   

  	
  IMO

  Number

  	
   

  	
  Classification

  Society

  	
   

  	
  Classification

  	
   

  	
  Ship Type

  	
   

  	
  Year

  Built

  	
   

  	
  Deadweight/

  TEU

  	
   

  	
  Charterer

  	
   

  
	
  “EKAVI I”

  	
   

  	
  Abilene Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy-max Bulker

  	
   

  	
  2004

  	
   

  	
  52,810

  	
   

  	
   

  	
   

  
	
  “ELECTRA I”

  	
   

  	
  Hamilton Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy-max Bulker

  	
   

  	
  2004

  	
   

  	
  52,810

  	
   

  	
   

  	
   

  
	
  “ARISTIDIS”

  	
   

  	
  Carrolton Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy-max MR PT

  	
   

  	
  2006

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ANDONIS”

  	
   

  	
  Decatur Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy -max MR PT

  	
   

  	
  2006

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “IASONAS”

  	
   

  	
  Beaumont Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy -max LR1 PT

  	
   

  	
  2004

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “MILITIADISM”

  	
   

  	
  Galveston Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy -max LR1 PT

  	
   

  	
  2003

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “EVERHARD SCHULTE”

  	
   

  	
  Fulton Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy -max LR1 PT

  	
   

  	
  2004

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “RUDOLF SCHULTE”

  	
   

  	
  Elgin Navigation Inc

  	
   

  	
  Marshall
  Islands

  	
   

  	
  Marshall Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Handy -max LR1 PT

  	
   

  	
  2004

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


65

















 


Part 2 - Additional Ship Selection Criteria


 


(A)                    Each Additional Ship shall:


 


1                                be a (i) panamax, handymax or capsize drybulk vessel or (ii) a
double hull crude oil tanker, or double hull product tanker in each case up to
Suezmax size or (iii) a container ship from handy size up to 5,500TEU;


 


2                                be aged 8 years or less on the relevant Delivery Date;


 


3                                maintain a flag and class acceptable to the Agent;


 


4                                be wholly owned by the Borrower or an Additional Owner;


 


5                                have a purchase price which shall not exceed the Fair Market Value
for such Additional Ship; and


 


6                                have Acceptable Employment in place.


 


Part 3 - Maximum amount of Advance of
Facility A


 


	
  Initial Ships

  	
   

  	
  Maximum Amount

  	
   

  	
  Purchase Price

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  “EKAVI I”

  	
   

  	
   

  	
   

  	
  N/A

  	
   

  
	
  “ELECTRA I”

  	
   

  	
   

  	
   

  	
  N/A

  	
   

  
	
  “ARISTIDIS”

  	
   

  	
   

  	
   

  	
  52,000,000

  	
   

  
	
  “ANDONIS”

  	
   

  	
   

  	
   

  	
  52,000,000

  	
   

  
	
  “IASONAS”

  	
   

  	
   

  	
   

  	
  64,500,000

  	
   

  
	
  “MILITIADIM”

  	
   

  	
   

  	
   

  	
  63,000,000

  	
   

  
	
  “EVERHARD SCHULTE”

  	
   

  	
   

  	
   

  	
  64,000,000

  	
   

  
	
  “RUDOLF SCHULTE”

  	
   

  	
   

  	
   

  	
  64,000,000

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  145,000,000

  	
   

  	
   

  	
   

  
							



 


66

















 


Part 4 - Details of Initial Owners


 


	
  Initial Owner

  	
   

  	
  Country of Incorporation

  	
   

  	
  Address

  	
   

  	
  Shareholder

  
	
  Abilene Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Hamilton Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Carrolton Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Decatur Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Beaumont Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Galveston Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Fulton Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  
	
  Elgin Navigation Inc

  	
   

  	
  Marshall Islands

  	
   

  	
  Trust Company Complex,
  Ajeltake Road, Ajeltake Island, Majuro MH 96960, Marshall Islands

  	
   

  	
  Borrower

  



 


67

















 


Schedule 3


 


Form of Drawdown Notice


 


(referred to in clause 9)


 


	
  To:

  	
  HSH NORDBANK AG

  
	
   

  	
  Gerhart-Hauptmann-Platz
  50

  
	
   

  	
  20095
  Hamburg

  
	
   

  	
  Germany

  



 


[Date] 200•


 


Facilities Agreement dated [•] 2006 (the “Agreement”)


 


We refer to the above Agreement and hereby give you
notice that we wish to draw down the sum of [•] [$(•)] representing:


 


Advance[s] of Facility [A][B]


 


[the Contract Instalment Advance of
Facility B payable at [stage]];


 


[the Delivery Date Advance of Facility B];


 


Expected Project Costs of Facility B


 


on {date} [and
select a first Interest Period in respect thereof of • months] [the first Interest Period in respect thereof to expire on{date}].  The funds
should be credited to [name and number of
account] with [details of bank.]


 


We confirm that:


 


(a)                        no event or circumstance has occurred and is continuing which
constitutes a Default;


 


(b)                       the representations and warranties contained in:


 


(i)                          clauses 7.1, 7.2 and 7.3 of the Agreement; and


 


(ii)                       clauses 4.1 and 4.2 of the Owners’ Guarantees;


 


are true and correct at the date hereof as
if made with respect to the facts and circumstances existing at such date.


 


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


 


(d)                       there has been no material adverse change in our financial position
from that described by us to the Finance Parties in the negotiation of the
Agreement.


 


Words and expressions defined in the Agreement shall
have the same meanings where used herein.


 


For and on behalf of


 


....................................


OMEGA NAVIGATION ENTERPRISES, INC.


 


68














 


Schedule 4


 


Part 1

Documents and evidence required as conditions precedent to the Commitment


 


(referred to in clause 9.1.1)


 


(a)        Constitutional
documents


 


copies, certified by an officer of each
relevant Security Party as true, complete and up to date copies of all
documents which contain or establish or relate to the constitution of that
Security Party;


 


(b)        Corporate
authorisations


 


copies of resolutions of the directors and
shareholders of each relevant Security Party approving such of the Underlying
Documents and the Security Documents to which such Security Party is, or is to
be, party and authorising the signature, delivery and performance of such
Security Party’s obligations thereunder, certified (in a certificate dated no
earlier than five (5) Banking Days prior to the date of this Agreement) by
an officer of such Security Party;


 


(i)         being true and correct;


 


(ii)        being duly passed at meetings
of the directors of such Security Party and of the shareholders of such
Security Party each duly convened and held;


 


(iii)       not having been amended,
modified or revoked; and


 


(iv)       being in full force and effect


 


together with originals or certified copies
of any powers of attorney issued by any Security Party pursuant to such
resolutions;


 


(c)        Specimen
signatures


 


copies of the signatures of the persons who
have been authorised on behalf of each Security Party to sign such of the
Underlying Documents and the Security Documents to which such Security Party
is, or is to be, party and to give notices and communications, including
notices of drawing, under or in connection with the Security Documents,
certified (in a certificate dated no earlier than five (5) Banking Days
prior to the date of this Agreement) by an officer of such Security Party as
being the true signatures of such persons;


 


(d)        Certificates
of incumbency


 


a list of directors and officers of each
Security Party specifying the names and positions of such persons, certified
(in a certificate dated no earlier than five (5) Banking Days prior to the
date of this Agreement) by an officer of such Security Party to be true,
complete and up to date;


 


(e)        Know your
customer and money laundering compliance


 


such documents and evidence as the Banks
shall require to identify the Borrower and the other Security Parties and any
other persons involved or affected by the transaction(s) contemplated by this
Agreement as required by any applicable law or the Banks’ own “know your
customer” internal guidelines; and


 


69

















 


(f)         Fees,
commissions and expenses


 


evidence that any fees and commission due
from the Borrower pursuant to the terms of clause 5.1 or any other provision of
the Security Documents and all expenses under clause 5.2 have been paid in
full.


 


70

















 


Part 2


 


Documents and evidence required as conditions
precedent to the first Advance


 


(referred to in clause 9.1)


 


(a)        Conditions
precedent


 


evidence that the conditions precedent set
out in Part 1 of Schedule 4 remain fully satisfied;


 


(b)        Borrower’s
consents and approvals


 


a confirmation from the Borrower that no
consents, authorisations, licences and approvals are necessary in any Relevant
Jurisdiction to enable it to borrow the Loan and to perform its obligations
under this Agreement and each of the other Security Documents and evidence in
form and substance satisfactory to the Agent that all necessary consents and
approvals of any Governmental Entity and all third party approvals in
connection with the initial public offering of the Borrower on NASDAQ and/or
the listing and quotation of the Borrower’s shares on the main board of the
SGX-ST and the borrowing of the Loan under this Agreement have been obtained
and remain in full force and effect and that all applicable waiting periods
shall have expired without any action being taken by any Government Entity
which in the sole opinion of the Agent restrains, prevents or imposes any
materially adverse conditions upon the consummation of the initial public
offering of the Borrower on NASDAQ and/or the listing and quotation of the
Borrower’s shares on the main board of the SGX-ST or the borrowing of the Loan
by the Borrower under this Agreement;


 


(c)        No
judgments etc


 


evidence in form and substance satisfactory
to the Agent that there are no judgments, orders, injunctions or restraints of
any kind prohibiting or imposing materially adverse conditions on the initial
public offering of the Borrower on NASDAQ and/or the initial public offering of
the Borrower’s shares in connection with the listing and quotation of such
shares on the main board of the SGX-ST or the borrowing by the Borrower of the
Loan under this Agreement and there has been no occurrence which in the opinion
of the Borrower and/or the Agent might give rise to a material adverse change
in the financial condition or any Security Party or the ability of any Security
Party to perform its obligations under this Agreement or any of the other
Security Documents or which is reasonably likely to have a material adverse
effect on the business, property, assets, liability, condition or the property
of the Borrower or the Borrower’s Group;


 


(d)        No
litigation or other event


 


evidence in form and substance satisfactory
to the Agent that there is to the knowledge of the Borrower having made due
enquiry, no event or existing or threatened litigation by any person with
respect to the initial public offering of the Borrower on NASDAQ and/or the
listing and quotation of the Borrower’s shares on the main board of the SGX-ST or
to the transactions contemplated by the Security Documents or which the Agent
shall in its sole discretion determine is reasonably likely to have a
materially adverse effect on the initial public offering of the Borrower on NASDAQ
and/or the listing and quotation of the Borrower’s shares on the main board of
the SGX-ST or on the business, property, assets, liabilities, financial
condition or otherwise or prospects of the Borrower or of the Borrower’s Group
taken as a whole, either before or after giving effect to the consummation of
such initial public offering;


 


(e)        Other
consents and approvals


 


a confirmation from each of the other
Security Parties that no consents, authorisations, licences and approvals are
necessary in any Relevant Jurisdiction to enable that Security Party to enter
into and to perform its obligations under the Security Documents to which it is
a party;


 


71

















 


(f)         Certified
Underlying Documents


 


a copy, certified (in a certificate dated
no earlier than five (5) Banking Days prior to the date of this Agreement)
as a true and complete copy by an officer of the Borrower of each of the
Underlying Documents in a form acceptable to the Agent;


 


(g)        Security
Documents


 


the Accounts Pledges, the relevant Owner’s Guarantees
and the Intra-Company Loan Agreements, duly executed;


 


(h)        Legal
opinions


 


	
  (i)

  	
  Marshall Islands opinion

  
	
   

  	
   

  
	
   

  	
  an opinion of Seward & Kissel special legal
  advisers to the Agent dated no earlier than two (2) days prior to the
  date of this Agreement;

  
	
   

  	
   

  
	
  (ii)

  	
  Owner(s)’ opinion

  
	
   

  	
   

  
	
   

  	
  an opinion of the Agent’s special legal advisers in
  each Relevant Jurisdiction with respect to the relevant Owner dated no
  earlier than two (2) days prior to the date of this Agreement;

  
	
   

  	
   

  
	
  (iii)

  	
  Manager(s)’ opinion

  
	
   

  	
   

  
	
   

  	
  an opinion of the Agent’s special legal advisers in
  each Relevant Jurisdiction with respect to the relevant Manager dated no
  earlier than two (2) days prior to the date of this Agreement;

  
	
   

  	
   

  
	
  (iv)

  	
  New York opinion

  
	
   

  	
   

  
	
   

  	
  an opinion of Seward & Kissel special legal
  advisers to the Agent in New York dated no later than two (2) days prior
  to the date of this Agreement;

  
	
   

  	
   

  
	
  (v)

  	
  Singapore opinion

  
	
   

  	
   

  
	
   

  	
  an opinion of Norton Rose special legal advisers to
  the Agent in Singapore dated no later than two (2) days prior to the
  date of this Agreement;

  
	
   

  	
   

  
	
  (vi)

  	
  German opinion

  
	
   

  	
   

  
	
   

  	
  an opinion of Norton Rose special legal advisers to
  the Agent in Germany dated no later than two (2) days prior to the date
  of this Agreement; and

  
	
   

  	
   

  
	
  (vii)

  	
  Further opinions

  
	
   

  	
   

  
	
   

  	
  any such further opinion as may be required by the
  Agent and/or the Banks;

  



 


(i)         Borrower’s
process agent


 


a copy, certified as a true copy by the
Borrower’s solicitors or other person acceptable to the Agent of a letter from
the Borrower’s agent for receipt of service of proceedings referred to in
clause 18.2 accepting its appointment under the said clause and under
each of the other Security Documents in which it is or is to be appointed as
the Borrower’s agent;


 


72

















 


(j)         Owner’s process
agent


 


a copy, certified as a true copy by the
Borrower’s solicitors or other person acceptable to the Agent of a letter from
the Owner’s or the Security Party’s agent for receipt of service of proceedings
referred to in, inter alia, clause 9.2 of the Owner’s Guarantee accepting
its appointment under the said clause and under each of the other Security
Documents in which it is or is to be appointed as the Owner’s or the Security
Party’s agent;


 


(k)       Initial
public offering on NASDAQ and/or SGX-ST


 


evidence that the Borrower has duly
completed its initial public offering on NASDAQ of its shares identified in its
Form F-1 Registration Statement filed with the United States
Securities and Exchange Commission and evidence that the Borrower has duly completed
the initial public offering of its shares identified in the Singapore
prospectus registered with the MAS as on 4 April 2006; in connection with
the listing and quotation such shares on the main board of the SGX-ST;


 


(l)         Proceeds
from initial public offering


 


evidence that the Borrower has received net
cash proceeds of not less than one hundred and eighty nine million Dollars ($189,000,000)
from (i) its initial public offering on NASDAQ and/or the initial public
offering of the Borrower’s shares in connection with the listing of such shares
on the main board of the SGX-ST;


 


(m)       Corporate
and capital structure


 


evidence that the corporate and capital
structure of the Borrowers’ Group following the initial public offering on
NASDAQ and/or the SGX-ST is in form and substance acceptable to the Agent;


 


(n)        Form F-1
Registration Statement


 


a copy, certified as a true copy by an
officer of the Borrower, of


 


(a)        the Form F-1
Registration Statement and any attachments registered with the United States
Securities and Exchange Commission; and/or


 


(b)        the Singapore prospectus and
any attachments or documents registered with the MAS, giving effect to the
initial public offering and the transactions contemplated by this Agreement,
which shall, in each case, be in form and substance acceptable to the Agent;


 


(o)        Indebtedness
of the Borrower’s Group


 


evidence in form and substance satisfactory
to the Agent that following the initial public offering on NASDAQ and/or the
initial public offering of the Borrower’s shares in connection with the listing
of such shares on the main board of the SGX-ST and following the borrowing of
the Loan by the Borrower under this Agreement that there shall be no
outstanding Indebtedness in respect of the Borrower’s Group, except for
Borrowed Money pursuant to the Security Documents and such other disclosed
Indebtedness of the Borrowers Group as shall be acceptable to the Agent in its
sole discretion;


 


(p)        Parent
company


 


evidence in form and substance satisfactory
to the Agent that each Owner is a wholly-owned Subsidiary of the Borrower and
that the Borrower and each Owner and their respective assets are free of any
Encumbrance except for Permitted Encumbrances;


 


(q)        Valuations


 


copies, certified by an officer of the
Borrower, of valuations of each Initial Ship dated no earlier than fifteen (15)
days prior to the Drawdown Date of the first Advance setting out the Fair
Market


 


73

















 


Value of each relevant Ship, such valuations
to be conducted in accordance with clause 8.2.2 and each valuation to be in
form and substance acceptable to the Agent;


 


(r)        Solvency
certificate


 


The Agent shall have received a solvency
certificate signed by the Chief Financial Officer of the Borrower and certified
as correct by the Borrower’s auditor (such auditor to be acceptable to the Agent),
such solvency certificate to be in a form and substance acceptable to the Agent
and certifying that following (i) the initial public offering of the
Borrower on NASDAQ and/or the initial public offering of the Borrower’s shares
in connection with the listing of such shares on the main board of the SGX-ST
and (ii) the borrowing of the Loan under this Agreement and incurring all of
the other financial accommodation that the Borrower shall incur, that individually
and the Borrower’s Group on a consolidated basis are not insolvent and will not
be rendered insolvent by the Indebtedness incurred in connection with such
transactions and the Borrower and the Borrower’s Group will have sufficient Free
Liquid Assets to utilise as working capital to pay the debts of the Borrower
and the Borrower’s Group as and when they fall due (on the basis that the Fleet
Market Value shall not be less than $295,000,000);


 


(s)        No
Default under any material agreement


 


evidence in form and substance satisfactory
to the Agent that after giving effect to the initial public offering on NASDAQ and
to the initial public offering of the Borrower’s shares in connection with the
listing of such shares on the main board of the SGX-ST and the borrowing of the
Loan under this Agreement, that there shall be no Default under any Security
Document, Underlying Document or any other material agreement of the Borrower’s
Group;


 


(t)         Accounts


 


evidence that the Accounts have been opened
with the Account Bank; and


 


(u)        Fees,
commissions and expenses


 


evidence that any fees and commission due
from the Borrower pursuant to the terms of clause 5.1 or any other provision of
the Security Documents and all expenses under clause 5.2 have been paid in
full.


 


74

















 


Part 3


 


Documents and evidence required as a
condition precedent to all Advances being made

(clause 9.1)


 


(a)        Conditions
precedent


 


if an Additional Ship is a newbuilding, evidence
that the conditions precedent set out in Part 1 and Part 2 of
Schedule 4, remain fully satisfied;


 


(b)        No claim


 


if an Additional Ship is a newbuilding, evidence
satisfactory to the Agent and/or the Banks that the relevant Builder (and any
other party who may have a claim pursuant to the relevant Contract) has no
claims against such Additional Ship or the Borrower or relevant Owner and that
there have been no breaches of the terms of the relevant Contract or the Refund
Guarantee or any default thereunder;


 


(c)        No variations
to Contract


 


if an Additional Ship is a newbuilding, evidence
that there have been no amendments or variations agreed to the relevant Contract
and that no action has been taken by the Borrower; the relevant Owner or the relevant
Builder which might in any way render the relevant Contract inoperative or
unenforceable, in whole or in part;


 


(d)        No Encumbrance


 


if an Additional Ship is a newbuilding, evidence
that there is no Encumbrance of any kind created or permitted by any person on
or relating to the relevant Contract other than a Permitted Encumbrance;


 


(e)        Ship
conditions


 


evidence that the Ship for which the
relevant Advance is to be made:


 


(i)         Registration
and Encumbrances


 


is registered in the name of the Borrower or
the relevant Owner through the relevant Registry under the laws and flag of the
relevant Flag State and that such Ship and its Earnings, Insurances and
Requisition Compensation (as defined in the relevant Ship Security Document)
are free of Encumbrances;


 


(ii)       Classification


 


maintains the Classification for such Ship free
of all requirements and recommendations affecting class of the relevant Classification
Society; and


 


(iii)      Insurance


 


is insured in accordance with the
provisions of the Security Documents and all requirements of the Security
Documents in respect of such insurance have been complied with (including
without limitation, confirmation from the protection and indemnity association
or other insurer with which such Ship is, or is to be, entered for insurance or
insured against protection and indemnity risks (including oil pollution risks)
that any necessary declarations required by the association or insurer for the
removal of any oil pollution exclusion have been made and that any such
exclusion does not apply to such Ship); and


 


75

















 


(f)         Security
documents and delivery documents


 


the relevant Owner’s Guarantee and the Ship
Security Documents for such Ship and the relevant Account Pledge duly executed;


 


(g)        Borrower’s
and Owner’s further corporate authorisations


 


copies of the resolutions of the Borrower’s
and relevant Owner’s directors and shareholders evidencing authorisation of the
acceptance of the delivery of such Ship and authorisation and approval of the
Ship Security Documents for such Ship and the transactions contemplated therein
and any other documents issued or to be issued pursuant thereto and authorising
their appropriate officers or other representatives to execute the same on their
behalf certified in the manner referred to in paragraph (b) of Part 1
of this Schedule (or other evidence of such authorisation, approval and/or
ratification) and any power of attorney issued pursuant to the said
resolutions;


 


(h)        Covenants
and approvals


 


a confirmation for the relevant Owner(s)
that no consents, authorisations, licenses and approvals are necessary in any
Relevant Jurisdiction to enable such owner(s) to enter into and to perform its
obligations under the Security Documents to which it is a party;


 


(i)         Updated
certificates of incumbency


 


a list of directors and officers of each the
Borrower and each relevant Owner specifying the names and positions of such
persons and copies of the signatures of the persons who have been authorised on
behalf of each person to sign such of the Underlying Documents and the Security
Documents to which such person is, or is to be, party and to give notices and
communications, including notices of drawing, under or in connection with the
Security Documents, certified (in a certificate dated no earlier than five (5) Banking
Days prior to the Delivery Date for such Ship) by an officer of such person to
be, in the case of the list of directors, true, complete and up to date and, in
the case of the specimen signatures, true signatures of such persons or a
certificate by an officer of such person that the list provided in respect of such
person pursuant to paragraph (d) of Part 1 of this
Schedule and that the specimen signatures provided in respect of such
person pursuant to paragraph (c) of Part 1 of this
Schedule remain true, complete and up to date;


 


(j)         Management


 


to the extent not provided pursuant to
Schedule 4, Part 2, the Manager’s Undertaking duly executed and copies,
certified by an officer of the Borrower or the relevant Owner, of the Management
Agreement for such Ship;


 


(k)       Mortgage
registration


 


evidence that the Mortgage has been
provisionally registered against such Ship through the Registry for such Ship under
the laws and flag of the Flag State for such Ship;


 


(l)         Notices
of assignment and acknowledgements


 


copies of duly executed notices of
assignment required by the terms of the Security Documents and in the forms
prescribed by the Security Documents;


 


(m)       Bank
accounts


 


evidence that the Earnings Account for such
Ship has been opened;


 


76

















 


(n)        Insurance
opinion


 


an opinion from insurance consultants
appointed by the Banks, on the insurances effected or to be effected in respect
of such Ship upon and following the Delivery Date for such Ship;


 


(o)        Legal
opinions


 


(i)        Marshall Islands opinion


 


an opinion of Seward & Kissel special
legal advisers in the Marshall Islands to the Agent;


 


(ii)       Owner(s)’ opinion


 


an opinion of the Agent’s special legal
advisers in each Relevant Jurisdiction with respect to the relevant Owner;


 


(iii)      Flag State opinion


 


an opinion of the special legal advisers to
the Agent in the Flag State of such Ship and an opinion from the special legal
advisers to the Agent in any Relevant Jurisdiction where such Ship has its underlying
registration as set out in Part 1 of Schedule 2;


 


(iv)      German opinion


 


an opinion of Norton Rose special legal
advisers to the Agent in Germany; and


 


(v)       Further opinions


 


any such further opinion as may be required
by the Agent and/or Banks;


 


(p)        Borrower’s
and Owner’s process agent


 


a copy, certified as a true copy by the
Borrower’s or relevant Owner’s solicitors or other person acceptable to the
Agent of a letter from the Borrower’s or relevant Owner’s or the relevant
Security Party’s agent for receipt of service of proceedings referred to in
each of the relevant Ship Security Documents in which it is or is to be
appointed as the Borrower’s agent;


 


(q)        Valuation


 


valuation (dated not more than two (2) weeks
prior to the Delivery Date of such Ship) of such Ship in its anticipated
condition as at the Delivery Date of such Ship;


 


(r)        Inspection
report


 


if an Additional Ship is not a newbuilding,
an inspection report (dated not more than thirty (30) days prior to the
Delivery Date of such Ship) of such Ship by a surveyor appointed by the Agent;


 


(s)        Manager’s
confirmation


 


the Manager has confirmed in writing that
the representations and warranties set out in clause 7.2.11 are true and
correct;


 


(t)         Certificates
of financial responsibility


 


if applicable, a copy of a certificate of
financial responsibility complying with the requirements of the United States
Oil Pollution Act 1990 or the United States Comprehensive Environmental
Response Compensation Liability Act 1980 together with evidence of approval thereof
by the relevant regulatory authorities;


 


77

















 


(u)        Payment
of Contract Price


 


if an Additional Ship is a newbuilding, evidence
that the Contract Price for such Ship has been (or upon drawdown of the Delivery
Advance for such Ship will have been) paid in full;


 


(v)        ISM
Code and ISPS Code documentation


 


a copy, certified by an officer of the
Borrower, of the SMC, DOC and ISSC Certificate for such Ship; and


 


(w)       Fees,
commissions and expenses


 


evidence that any fees and commission due from
the Borrower pursuant to the terms of clause 5.1 and any other provision
of the Security Documents and all expenses under clause 5.2 have been paid in
full.


 


78

















 


Part 4


 


Additional documents and evidence required as
a condition precedent to any Contract

Instalment Advance and/or Delivery Date Advance of Facility B (referred to in
clause 9.2)


 


(a)        Conditions
precedent


 


evidence that the conditions precedent set
out in Part 1 and Part 2 of Schedule 4, remain fully satisfied;


 


(b)        No claim


 


evidence satisfactory to the Agent and/or
the Banks that the relevant Builder (and any other party who may have a claim
pursuant to the relevant Contract) has no claims against the Additional Ship or
the Borrower or relevant Owner and that there have been no breaches of the
terms of the relevant Contract or the Refund Guarantee or any default
thereunder;


 


(c)        No
variations to Contract


 


evidence that there have been no amendments
or variations agreed to the relevant Contract and that no action has been taken
by the Borrower, the relevant Owner or the relevant Builder which might in any
way render such Contract inoperative or unenforceable, in whole or in part;


 


(d)        No
Encumbrance


 


evidence that there is no Encumbrance of
any kind created or permitted by any person on or relating to the relevant
Contract other than a Permitted Encumbrance;


 


(e)        Equity
contribution


 


evidence in a form and substance
satisfactory to the Agent, that the Borrower or the relevant Owner has paid to
the relevant Builder any required equity contribution for such Additional Ship;


 


(f)         Invoices


 


a certified copy of the invoices in respect
of which payment is due to the relevant Builder from the Borrower or the
relevant Owner and such other evidence as the Agent may reasonably require that
such payment is due and payable to such Builder;


 


(g)        Fees, commissions
and expenses


 


evidence that any fees due from the
Borrower pursuant to the terms of clause 5.1 or any expenses under clause
5.2 or any other provision of the Security Documents have been paid in full;


 


(h)        Title
documents


 


if the Advance is a Delivery Date Advance, copies
of the Builder’s certificate and bill of sale in favour of the relevant Owner
from the Builder and a protocol of delivery and acceptance duly executed and
such other evidence as the Agent may reasonably require (including evidence of
the Builder’s corporate authorisations to deliver title to the relevant Ship)
that the relevant Owner will obtain good title to the relevant Ship on or before
the relevant Delivery Date; and


 


(i)         Refund
Guarantee and Security Documents


 


if the Advance is the first Contract
Instalment Advance to be made in respect of the relevant Additional Ship,
evidence that the relevant Refund Guarantee has been issued and the relevant
Pre-delivery Security Assignment duly executed.


 


79

















 


Schedule 5 

Form of Substitution Certificate


 


[Note: Banks are advised not to employ
Substitution Certificates or otherwise to assign, novate or transfer interests
in the Agreement without first ensuring that the transaction complies with all
applicable laws and regulations in all applicable jurisdictions.]


 


To:       HSH NORDBANK AG on its own
behalf, as agent for the Banks party to the Loan Agreement mentioned below and
on behalf of Omega Navigation Enterprises, Inc.


 


Attention:


 


[Date]


 


Substitution Certificate


 


This Substitution Certificate relates to a $295,000,000
Secured Facilities Agreement (the “Agreement”)
dated [                                   2006]
between (i) Omega Navigation Enterprises, Inc., (ii) the banks
whose respective names and addresses are set out in Schedule 1 thereto as
Banks, (iii) HSH NORDBANK AG as Arranger, (iv) HSH NORDBANK AG as
Swap Bank and (v) HSH NORDBANK AG as Agent.


 


1              [name of
Existing Bank] (the “Existing Bank”)
(a) confirms the accuracy of the summary of its participation in the
Agreement set out in the schedule below; and (b) requests [name of Substitute Bank] (the “Substitute”)
to accept by way of novation the portion of such participation specified in the
schedule hereto by counter-signing and delivering this Substitution Certificate
to the Agent at its address for the service of notices specified in the
Agreement along with the transfer fee of $3,000.


 


2              The Substitute hereby
requests the Agent (on behalf of itself and the other Banks) to accept this
Substitution Certificate as being delivered to the Agent pursuant to and for
the purposes of clause 15.4 of the Agreement, so as to take effect in
accordance with the respective terms thereof on [date of
transfer] (the “Effective Date”)
or on such later date as may be determined in accordance with the respective
terms thereof.


 


3              The Agent (on behalf of
itself, the other Banks and all other parties to the Agency Agreement) confirms
the novation effected by this Substitution Certificate pursuant to and for the
purposes of clause 15.4 of the Agreement so as to take effect in
accordance with the respective terms thereof.


 


4              The Substitute confirms:


 


(a)           that it has received a copy
of the Agreement and each of the other Security Documents and all other
documentation and information required by it in connection with the
transactions contemplated by this Substitution Certificate;


 


(b)           that it has made and will
continue to make its own assessment of the validity, enforceability and
sufficiency of the Agreement, the other Security Documents and this
Substitution Certificate and has not relied and will not rely on the Existing
Bank or the Agent or any statements made by either of them in that respect;


 


80

















 


(c)           that it has made and will
continue to make its own credit assessment of the Borrower and has not relied
and will not rely on the Existing Bank or the Agent or any statements made by
either of them in that respect; and


 


(d)           that, accordingly, neither
the Existing Bank nor the Agent shall have any liability or responsibility to
the Substitute in respect of any of the foregoing matters.


 


5              Execution of this
Substitution Certificate by the Substitute constitutes its representation to
the Existing Bank and all other parties to the Agreement that it has power to
become party to the Agreement as a Bank on the terms herein and therein set out
and has taken all necessary steps to authorise execution and delivery of this
Substitution Certificate.


 


6              The Existing Bank makes
no representation or warranty and assumes no responsibility with respect to the
legality, validity, effectiveness, adequacy or enforceability of the Agreement
or any of the other Security Documents or any document relating thereto and
assumes no responsibility for the financial condition of the Borrower or any
other party to the Agreement or any of the other Security Documents or for the performance
and observance by the Borrower or any other such party of any of its
obligations under the Agreement or any of the other Security Documents or any
document relating thereto and any and all such conditions and warranties,
whether express or implied by law or otherwise, are hereby excluded.


 


7              The Substitute hereby
undertakes to the Existing Bank, the Borrower and the Agent and each of the
other parties to the Agreement that it will perform in accordance with their
terms all those obligations which by the respective terms of the Agreement will
be assumed by it after acceptance of this Substitution Certificate by the
Agent.


 


8              All terms and
expressions used but not defined in this Substitution Certificate shall bear
the meaning given to them in the Agreement.


 


9              This Substitution
Certificate and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with English law.


 


Note:   This Substitution Certificate is
not a security, bond, note, debenture, investment or similar instrument.


 


AS WITNESS
the hands of the authorised signatories of the parties hereto on the date
appearing below.


 


81

















 


The Schedule


 


	
  Commitment: $

  	
  Portion Transferred: $

  
	
   

  	
   

  
	
  Contribution: $

  	
  Portion Transferred: $

  
	
   

  	
   

  
	
  Next Interest Payment Date:

  



 


82

















 


Administrative Details of Substitute


 


Lending Office:


 


Account for payments:


 


Telephone:


 


Telex:


 


Attention:


 


	
  [Existing Bank]

  	
  [Substitute]

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Date:

  	
  Date:

  
	
   

  	
   

  
	
  The Agent

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
							



on its own behalf


and on behalf of the Borrower, the Banks, the Arranger,
the Swap Bank and the Security Trustee


 


Date:


 


83

















 


Schedule 6

Compliance Certificate


 


To:      HSH NORDBANK AG


Gerhart-Hauptmann-Platz 50

20095 Hamburg

Germany


 


From:  Omega Navigation Enterprises, Inc


Trust Company Complex


Ajeltake Road


Ajeltake Island


Majuro MH 96960


Marshall Island


 


Dated: [•]


 


Dear Sirs


 


$295,000,000 Facilities Agreement

dated [•] 2006 (the “Agreement”)


 


1           We refer to the
Agreement.  This is a Compliance
Certificate.  Terms defined in the
Agreement have the same meaning when used in this Compliance Certificate unless
given a different meaning in this Compliance Certificate.


 


2           We refer to clause 8.7 of
the Agreement and hereby certify that:


 


(1)        Leverage Ratio


 


Requirement:  Leverage
Ratio of not more than 65%.


 


Satisfied [YES] : [NO]


 


(2)        Minimum
Liquidity


 


Requirement:  maintain on a consolidated
basis Minimum Liquidity.


 


Satisfied [YES] : [NO]


 


(3)        Working Capital


 


Requirement:  maintain a
consolidated basis Working Capital of not less than on million Dollars ($1,000,000).


 


Satisfied [YES] : [NO]


 


(4)        Interest
Coverage


 


Requirement:  maintain a ratio of EBITDA
to Interest Payable on a trailing four (4) Financial Quarter basis of not
less than 3.00 to 1.00.


 


Satisfied [YES] : [NO]


 


84

















 


(5)        Security Value
Maintenance


 


Requirement:  Security Value is not less
than the Security Requirement.


 


Satisfied [YES] : [NO]


 


3           We confirm that no Default
is continuing.*


 


	
   

  	
   

  	
   

  
	
   

  	
  Chief Financial Officer

  
	
   

  	
  Omega Navigation Enterprises, Inc.

  



 


 


	
   

  	
   

  
	
  for and on behalf of

  
	
  [name of auditors of the Company]***

  



 






*              If this statement cannot be made, the certificate
should identify any Default that is continuing and the steps, if any, being
taken to remedy it.


***         Only applicable if the
Compliance Certificate accompanies the audited financial statements and is to
be signed by the auditors.  To be agreed
with the Company’s auditors prior to signing the Agreement


 


85

















 


Schedule 7

Calculation of Additional Cost


 


1           The Additional Cost is an
addition to the interest rate to compensate Banks for the cost of compliance
with (a) the requirements of the Bank of England and/or the Financial
Services Authority (or, in either case, any other authority which replaces all
or any of its functions) or (b) the requirements of the European Central
Bank.


 


2           On the first day of each
Interest Period (or as soon as possible thereafter) the Agent shall calculate,
as a percentage rate, a rate (the “Additional Cost Rate”)
for each Bank, in accordance with the paragraphs set out below.  The Additional Cost will be calculated by the
Agent as a weighted average of the Banks’ Additional Cost Rates (weighted in
proportion to the percentage participation of each Bank in the relevant Loan)
and will be expressed as a percentage rate per annum.


 


3           The Additional Cost Rate
for any Bank lending from an office in any member state of the European
Community that has adopted or adopts the Euro as its lawful currency in
accordance with the legislation of the European Community relating to Economic
and Monetary Union will be the percentage notified by that Bank to the
Agent.  This percentage will be certified
by that Bank in its notice to the Agent to be its reasonable determination of
the cost (expressed as a percentage of that Bank’s participation in all Loans
made from that office) of complying with the minimum reserve requirements of
the European Central Bank in respect of loans made from that office.


 


4           The Additional Cost Rate
for any Bank lending from an Office in the United Kingdom will be calculated by
the Agent as follows:


 


in relation to an Advance or an unpaid
amount in any currency other than sterling:


 


	
  

  	
   per cent. per
  annum.

  



 


Where:


 


E          is designed to compensate
Banks for amounts payable under the Fees Rules and is calculated by the
Agent as being the average of the most recent rates of charge supplied by the Arranger
to the Agent pursuant to paragraph 6 below and expressed in Pounds per
£1,000,000.


 


5           For the purposes of this
Schedule:


 


(a)        “Fees Rules”
means the rules on periodic fees contained in the Supervision Manual of
the Financial Services Authority Handbook of rules and guidance or such
other law or regulation as may be in force from time to time in respect of the
payment of fees for the acceptance of deposits;


 


(b)        “Fee Tariffs”
means the fee tariffs specified in the Fees Rules under the activity group
A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required
pursuant to the Fees Rules but taking into account any applicable discount
rate);


 


(c)        “Tariff Base”
has the meaning given to it in, and will be calculated in accordance with, the
Fees Rules; and


 


(d)        “Pounds”
and “£” mean the lawful currency of the
United Kingdom.


 


6           If requested by the Agent,
each Reference Bank shall, as soon as practicable after publication by the
Financial Services Authority, supply to the Agent, the rate of charge payable
by that


 


86

















 


Reference Bank to the Financial Services
Authority pursuant to the Fees Rules in respect of the relevant financial
year of the Financial Services Authority (calculated for this purpose by that
Reference Bank as being the average of the Fee Tariffs applicable to that
Reference Bank for that financial year) and expressed in Pounds per £1,000,000
of the Tariff Base of that Reference Bank.


 


7           Each Bank shall supply any
information required by the Agent for the purpose of calculating its Additional
Cost Rate.  In particular, but without
limitation, each Bank shall supply the following information on or prior to the
date on which it becomes a Bank:


 


(a)        the jurisdiction of its
lending office; and


 


(b)        any other information that the
Agent may reasonably require for such purpose.


 


Each Bank shall promptly notify the Agent
of any change to the information provided by it pursuant to this paragraph.


 


8           The rates of charge of each
Reference Bank for the purpose of E above shall be determined by the Agent
based upon the information supplied to it pursuant to paragraphs 6 and 7 above
and on the assumption that, unless a Bank notifies the Agent to the contrary,
each Bank’s obligations in relation to cash ratio deposits are the same as
those of a typical bank from its jurisdiction of incorporation with a lending
office in the same jurisdiction as its lending office.


 


9           The Agent shall have no
liability to any person if such determination results in an Additional Cost
Rate which over or under compensates any Bank and shall be entitled to assume
that the information provided by any Bank or Reference Bank pursuant to
paragraphs 3, 6 and 7 above is true and correct in all respects.


 


10         The Agent shall distribute
the additional amounts received as a result of the Additional Cost to the Banks
on the basis of the Additional Cost Rate for each Bank based on the information
provided by each Bank and each Reference Bank pursuant to paragraphs 3, 6 and 7
above.


 


11         Any determination by the
Agent pursuant to this Schedule in relation to a formula, the Additional Cost,
an Additional Cost Rate or any amount payable to a Bank shall, in the absence
of manifest error, be conclusive and binding on all Parties.


 


12         The Agent may from time to
time, after consultation with the Borrowers and the Banks, determine and notify
to all Parties any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements from
time to time imposed by the Bank of England, the Financial Services Authority
or the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in the
absence of manifest error, be conclusive and binding on all Parties.


 


87

















 


	
  Borrower

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  OMEGA NAVIGATION ENTERPRISES, INC.

  	
  )

  	
   

  	
   

  
	
  pursuant to a power of attorney

  	
  )

  	
   

  	
   

  
	
  dated
                                             
  2006

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Arranger

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HSH NORDBANK AG

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Swap Bank

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HSH NORDBANK AG

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HSH NORDBANK AG

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Banks

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HSH NORDBANK AG

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised signatory

  	
   

  



 


88