Exhibit 10.1


 


Date              March 2007


 


 


CAPITAL PRODUCT PARTNERS L.P.


as Borrower


 


 


- and -


 


 


THE BANKS AND FINANCIAL INSTITUTIONS


listed in Schedule 1


as Lenders


 


 


- and -


 


 


HSH NORDBANK AG


as Swap Bank


 


 


- and -


 


 


HSH NORDBANK AG


as Bookrunner


 


 


- and -


 


 


HSH NORDBANK AG


as Agent and Security Trustee


 


 


___________________________________


 


FORM OF LOAN AGREEMENT


____________________________________


 


relating to revolving credit and term loan
facilities not


exceeding US$370,000,000 in aggregate to initially


finance the acquisition cost of fifteen
medium range product tankers


 


 


WATSON, FARLEY & WILLIAMS


Piraeus


 

















 


INDEX


 


	
  Clause

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
  INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  FACILITY

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  POSITION OF THE LENDERS, THE SWAP BANK AND
  THE MAJORITY LENDERS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  DRAWDOWN

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  INTEREST

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  INTEREST PERIODS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  DEFAULT INTEREST

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  CONVERSION TO TERM LOAN; REPAYMENT AND
  PREPAYMENT

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  CONDITIONS PRECEDENT

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  GENERAL UNDERTAKINGS

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  CORPORATE UNDERTAKINGS

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  INSURANCE

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  SHIP COVENANTS

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  SECURITY COVER

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  PAYMENTS AND CALCULATIONS

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  APPLICATION OF RECEIPTS

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  18

  	
  APPLICATION OF EARNINGS

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  EVENTS OF DEFAULT

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  20

  	
  FEES AND EXPENSES

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  INDEMNITIES

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  22

  	
  NO SET-OFF OR TAX DEDUCTION

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  23

  	
  ILLEGALITY, ETC

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  24

  	
  INCREASED COSTS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  25

  	
  SET OFF

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  26

  	
  TRANSFERS AND CHANGES IN LENDING OFFICES

  	
   

  	
  61

  



 


2

















 


	
  27

  	
  VARIATIONS AND WAIVERS

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  28

  	
  NOTICES

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  29

  	
  SUPPLEMENTAL

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  30

  	
  LAW AND JURISDICTION

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1 LENDERS AND COMMITMENTS

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 2 DRAWDOWN NOTICE

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4 TRANSFER CERTIFICATE

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 5 DESIGNATION NOTICE

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 6 FORM OF COMPLIANCE CERTIFICATE

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  
	
  EXECUTION PAGES

  	
   

  	
  82

  



 


3

















 


THIS LOAN
AGREEMENT is made on                March
2007


 


BETWEEN:


 


(1)                                  CAPITAL PRODUCT PARTNERS L.P. being a limited partnership formed in
the Republic of the Marshall Islands whose registered office is at Trust
Company House, Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
the Marshall Islands as Borrower.


 


(2)                                  THE BANKS AND FINANCIAL INSTITUTIONS 
listed in Schedule 1, as Lenders.


 


(3)                                  HSH NORDBANK AG as Swap Bank.


 


(4)                                  HSH NORDBANK AG as Bookrunner.


 


(5)                                  HSH NORDBANK AG as Agent and Security Trustee.


 


WHEREAS


 


(A)                              The Lenders have agreed to make available to the Borrower a
revolving credit facility (initially divided into 3 tranches) of up to
US$370,000,000 initially for the purpose of part-financing or refinancing the
acquisition cost of 15 medium range product tankers owned or to be owned by
subsidiaries of the Borrower.  Subject to
the terms and conditions of this Agreement all amounts outstanding under the
revolving credit facility on the Termination Date shall on that date be
converted into a term loan facility which shall be repaid over a period of 5
years (or, through the operation of Clause 4.9, 2 years) in accordance with the
terms of this Agreement.


 


(B)                                To the extent initially borrowed for the purposes referred to in
Recital (A) and prepaid, the Borrower shall be entitled to reborrow the prepaid
amounts in order to provide the Borrower with additional liquidity for its
general working capital and corporate purposes.


 


IT IS AGREED
as follows:


 


1                                         INTERPRETATION


 


1.1                               Definitions.  Subject to
Clause 1.5, in this Agreement:


“Accounting
Information”  means the annual audited
consolidated accounts to be provided by the Borrower to the Agent in accordance
with Clause 11.6(a)(i) of this Agreement or the quarterly unaudited management
accounts of the Borrower to be provided by the Borrower to the Agent in
accordance with Clause 11.6(b)(i) of this Agreement (as the context may
require);


 


“Advance” 
means the principal amount of each borrowing by the Borrower under this
Agreement;


 


“Affected Lender”  has the meaning given in Clause 5.5;


 


“Agency
and Trust Agreement”  means the agency
and trust agreement executed or to be executed between the Borrower, the
Lenders, the Swap Bank, the Agent and the Security Trustee in such form as the
Lenders may approve or require;


 

















 


“AGISILAOS”  means the medium range product tanker of
approximately 37,000 deadweight tons registered in the ownership of Polarwind
under the Marshall Islands flag with the name “AGISILAOS”;


 


“AIOLOS”  means the medium range product tanker of
approximately 37,000 deadweight tons registered in the ownership of Tempest
under the Marshall Islands flag with the name “AIOLOS” and dual registered on
the Isle of Man flag in the name of BP;


 


“AKERAIOS”  means the newbuilding medium range product
tanker of approximately 47,000 deadweight tons currently being constructed by
the Builder and having Builder’s Hull No. 0413 which is to be purchased by
Laredo pursuant to the Akeraios Shipbuilding Contract and which is to be
registered in the ownership of Laredo under an Approved Flag with the name “AKERAIOS”;


 


“Akeraios
Shipbuilding Contract”  means the
shipbuilding contract dated 16 February 2004 in respect of the construction by
the relevant Builder of “AKERAIOS” and its purchase by Laredo, as supplemented
from time to time;


 


“AKTORAS”  means the medium range product tanker of
approximately 37,000 deadweight tons registered in the ownership of Centurion
under the Marshall Islands flag with the name “AKTORAS” and which is dual
registered on the Isle of Man flag in the name of BP;


 


“ALEXANDROS
II”  means the newbuilding medium range
product tanker of approximately 51,000 deadweight tons currently being
constructed by the relevant Builder and having Builder’s Hull No. 0413 which is
to be purchased by Sorrel pursuant to the Alexandros II Shipping Contract and
which is to be registered in the ownership of Sorrel under an Approved Flag
with the name “ALEXANDROS II”;


 


“Alexandros
II Shipbuilding Contract”  means the
shipbuilding contract dated [•] in respect of the construction by the relevant Builder of “ALEXANDROS
II” and its purchase by Sorrel, as supplemented from time to time;


 


“ANEMOS
I”  means the newbuilding medium range
product tanker of approximately 47,000 deadweight tons currently being
constructed by the relevant Builder and having Builder’s Hull No. 0447 which is
to be purchased by Splendor pursuant to the Anemos Shipbuilding Contract and
which is to be registered in the ownership of Splendor under an Approved Flag
with the name “ANEMOS I”;


 


“Anemos
Shipbuilding Contract”  means the
shipbuilding contract dated 15 July 2004 and made between the Builder and
Splendor in respect of the construction by the relevant Builder of “ANEMOS I”
and its purchase by Splendor, as supplemented from time to time;


 


“APOSTOLOS”  means the newbuilding medium range product
tanker of approximately 47,000 deadweight tons currently being constructed by
the Builder and having Builder’s Hull No. 0446 which is to be purchased by
Lorenzo pursuant to the Apostolos Shipbuilding Contract and which is to be
registered in the ownership of Lorenzo under an Approved Flag with the name “APOSTOLOS”;


 


“Apostolos
Shipbuilding Contract”  means the
shipbuilding contract dated 15 July 2004 and made between the relevant Builder
and Lorenzo in respect of the construction by the Builder of “APOSTOLOS” and
its purchase by Lorenzo, as supplemented from time to time;


 


2

















 


“Approved
Broker”  means each of H. Clarksons &
Company Limited, RS Platou, Galbraith’s Limited, E.A. Gibson Shipbrokers and
Barry Rogliano Salles and in the plural means all of them;


 


“Approved
Flag”  means the Liberian or Marshall
Islands flag or such flag as the Agent may, with the authorisation of all the
Lenders, approve as the flag on which a Ship shall be registered, such approval
not to be unreasonably withheld;


 


“Approved
Flag State”  means any country in which
the Agent may with the authorisation of all the Lenders, approve that a Ship be
registered, such approval not to be unreasonably withheld;


 


“Approved
Manager”  means, in relation to a Ship,
Capital Ship Management Corp., a company incorporated in Panama having its
registered office at Hong
Kong Bank Building, 6th floor, Samuel Lewis Avenue, Panama, Republic
of Panama, or any other company which the Lenders may
approve (such approval not to be unreasonably withheld) from time to time as
the commercial, technical and/or operational manager of that Ship;


 


“Approved
Manager’s Undertaking”  means, in
relation to each Ship, a letter of undertaking executed or to be executed by
the Approved Manager in favour of the Security Trustee in the terms required by
the Security Trustee agreeing certain matters in relation to the Approved
Manager serving as the manager of the Ship and subordinating the rights of the
Approved Manager against such Ship and the Owner thereof to the rights of the
Creditor Parties under the Finance Documents, in such form as the Security
Trustee, with the authorisation of the Majority Lenders, may approve or require
and in the plural means all of them;


 


“ARIONAS”  means the medium range product tanker of
approximately 37,000 deadweight tons registered in the ownership of Carnation
under the Marshall Islands flag with the name “ARIONAS”;


 


“ARIS
II”  means the newbuilding medium range
product tanker of approximately 51,000 deadweight tons currently being
constructed by the relevant Builder and having Builder’s Hull No. [•] which is to be purchased by Belerion pursuant to the Aris II
Shipbuilding Contract and which is to be registered in the ownership of
Belerion under an Approved Flag with the name “ARIS II”;


 


“Aris
II Shipbuilding Contract”  means the
shipbuilding contract dated [•] in respect of the construction by the relevant Builder of “ARIS II”
and its purchase by Belerion, as supplemented from time to time;


 


“ARISTOTELIS
II”  means the newbuilding medium range
product tanker of approximately 51,000 deadweight tons currently being
constructed by the relevant Builder and having Builder’s Hull No. [•] which is to be purchased by Wind Dancer pursuant to the
Aristotelis Shipbuilding Contract and which is to be registered in the
ownership of Wind Dancer under an Approved Flag with the name “ARISTOTELIS II”;


 


“Aristotelis
Shipbuilding Contract”  means the
shipbuilding contract dated [•], the construction by the relevant Builder of “ARISTOTELIS” and its
purchase by Wind Dancer, as supplemented from time to time;


 


“ASSOS”  means the medium range product tanker of
approximately 47,000 deadweight tons registered in the ownership of Canvey
under Liberian flag with the name “ASSOS”;


 


3

















 


“ATLANTAS”  means medium range product tanker of
approximately 37,000 deadweight tons registered in the ownership of Rider under
the Marshall Island flag with the name “ATLANTAS” and dual registered on the
Isle of Man flag in the name of BP;


 


“ATROTOS”  means the newbuilding medium range product
tanker of approximately 47,000 deadweight tons currently being constructed by
the Builder and having Builder’s Hull No. 0412 which is to be purchased by
Epicurus pursuant to the Atrotos Shipping Contract and which is to be
registered in the ownership of Epicurus under an Approved Flag with the name “ATROTOS”;


 


“Atrotos
Shipbuilding Contract”  means the shipbuilding
contract dated 16 February 2004 in respect of the construction by the relevant
Builder of “ATROTOS” and its purchase by Epicurus, as supplemented from time to
time;


 


“Availability
Period”  means the period commencing on
the date of this Agreement and ending on


 


30 June 2012
(as such date may be extended in accordance with Clause 4.9), or such later
date as the Agent may, with the authorisation of all the Lenders, agree with
the Borrower;


 


“AVAX”  means the medium range product tanker of
approximately 47,000 deadweight tons registered in the ownership of Apollonas
under the Liberian flag with the name “AVAX”;


 


“AXIOS”  means the MR product tanker of approximately
37,000 deadweight tons registered in the ownership of Iraklitos under the
Liberian flag with the name “AXIOS”;


 


“Balloon
Instalment”  has the meaning given to
that term in Clause 8.2(b);


 


“Bareboat
Charter”  means, in relation to:


 


(a)           “ATLANTAS”, a bareboat charter in
respect of that Ship dated 20 April 2006 and made between Rider and BP;


 


(b)           “AKTORAS”, a bareboat charter in
respect of that Ship dated 20 April 2006 anad made between Centurion and BP;


 


(c)           “AIOLOS”, a bareboat charter in
respect of that Ship dated 21 July 2006 and made between Tempest and BP;


 


(d)           each of “ALEXANDROS II”, “ARISTOTELIS
II” and “ARIS II”, a bareboat charter to be made between the Owner of the
relevant Ship and OSG or a fully owned subisidiary of OSG,


 


and,
in the plural, means all of them;


 


“Bareboat
Charter Security Agreement”  means, in
relation to any Ship which is subject to a bareboat charter (other than any
Bareboat Charter to which BP or OSG is a party) (which charter may be entered
into by the relevant Owner in accordance with Clause 14.17,, an agreement or
agreements whereby the Security Trustee receives an assignment of the rights of
the relevant Owner under the bareboat charter and certain undertakings from
that Owner and the relevant charterer and, if so agreed by the Security Trustee
(acting with the authorisation of the Lenders), agrees to give certain


 


4

















 


undertakings
to that charterer, in each case, in such form as the Majority Lenders may
approve or require and, in the plural, means all of them;


 


“Borrower”  means Capital Product Partners L.P., a limited
partnership formed under the laws of the Marshall Islands and having its
registered office at Trust Company House, Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, the Marshall Islands;


 


“BP” 
means BP Shipping Limited, a company incorporated in England whose
registered office is at Chartsey Road, Sunbury Upon Thames, Middlesex TW16 7BP,
United Kingdom;


 


“Builder”  means, in relation to:


 


(a)                                  the Tranche B New Ships, Hyundai Mipo Dockyard Co., Ltd., a company
organised and existing under the laws of the 
Republic of Korea, with its principal office at 1381, Bangeo-Dong,
Dong-ku, Ulsan, Korea; and


 


(b)                                 the Tranche C New Ships, STX Shipbuilding Co., Ltd., a corporation
incorporated and existing under the laws of the Republic of Korea having its
registered office at 100, Wonpo-Dong, Jinhae, Gyeongsangnam-Do, Korea;


 


“Business
Day”  means a day on which banks are open
in London, Hamburg, Athens and (in relation to any payment to be made to the
Builder) Seoul and in respect of a day on which a payment is required to be
made under a Finance Document, also in New York City;


 


“Charterparty”  means any charterparty in respect of a Ship
of a duration (or capable of being or exceeding a duration) of 11 months or
more, made on terms and with a charterer acceptable in all respects to the
Lenders, such acceptance not to be unreasonably withheld;


 


“Charterparty
Assignment”  means, in relation to:


 


(a)                                  an Existing Ship (at all times during the term of the Existing
Charter relative thereto), an assignment of the rights of the Owner of that
Existing Ship under the Existing Charter relative to that Existing Ship
executed or to be executed by the relevant Owner in favour of the Security
Trustee; and


 


(b)                                 each New Ship and each Existing Ship (after the expiry of the Existing
Charter relative thereto), an assignment of the rights of the relevant Owner
under any Charterparty in respect of such Ship with a duration of at least 11
consecutive months executed or to be executed by the relevant Owner in favour
of the Security Trustee,


 


in
each case, in such form as the Lenders may approve or require and, in the
plural, means all of them;


 


“Commitment”  means, in relation to a Lender, the amount
set opposite its name in Schedule 1, or, as the case may require, the amount
specified in the relevant Transfer Certificate, as that amount may be reduced,
cancelled or terminated in accordance with this Agreement (and “Total
Commitments” means the aggregate of the Commitments of all the Lenders);


 


“Compliance
Certificate”  means a certificate in the
form set out in Schedule 6 (or in any other form which the Agent, acting with
the authorisation of all the Lenders, approves or requires);


 


5

















 


“Confirmation”  and “Early Termination Date”, in relation to
any continuing Designated Transaction, have the meanings given in the Master
Agreement;


 


“Contractual
Currency”  has the meaning given in
Clause 21.5;


 


“Contribution”  means, in relation to a Lender, the part of
the Loan which is owing to that Lender;


 


“Creditor
Party”  means the Agent, the Security
Trustee, the Swap Bank or any Lender, whether as at the date of this Agreement
or at any later time;


 


“Delivery
Date”  means, in relation to a Ship, the
date on which title to and possession of that Ship is transferred from the
Builder to the relevant Owner;


 


“Designated
Transaction” means a Transaction which fulfils the following requirements:


 


(a)                                  it is entered into by the Borrower pursuant to the Master Agreement
with the Swap Bank which, at the time the Transaction is entered into, is also
a Lender;


 


(b)                                 its purpose is the hedging of the Borrower’s exposure under this
Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any
part thereof) for a period expiring no later than the final Repayment Date; and


 


(c)                                  it is designated by the Borrower, by delivery by the Borrower to the
Agent of a notice of designation in the form set out in Schedule 5, as a
Designated Transaction for the purposes of the Finance Documents;


 


“Distribution
Declaration Date” means, in respect of each quarterly period during each Financial
Year, a date (being a Business Day) falling no later than 60 days after the end
of the relevant preceding financial quarter;


 


“Dollars”
and “$”  means the lawful currency for
the time being of the United States of America;


 


“Drawdown
Date”  means, in relation to an Advance,
the date requested by the Borrower for the Advance to be made, or (as the
context requires) the date on which the Advance is actually made;


 


“Drawdown
Notice”  means a notice in the form set
out in Schedule 2 (or in any other form which the Agent, acting with the
authorisation of all the Lenders, approves or reasonably requires);


 


“Earnings”  means, in relation to a Ship, all moneys
whatsoever which are now, or later become, payable (actually or contingently)
to the Owner owning the Ship or the Security Trustee and which arise out of the
use or operation of the Ship, including (but not limited to):


 


(a)                                  all freight, hire and passage moneys, compensation payable to the
Owner owning the Ship or the Security Trustee in the event of requisition of
the Ship for hire, remuneration for salvage and 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 the
Ship;


 


(b)                                 all moneys which are at any time payable under Insurances in respect
of loss of earnings; and


 


6

















 


(c)                                  if and whenever the Ship is employed on terms whereby any moneys
falling within paragraphs (a) or (b) above are pooled or shared with any other
person, that proportion of the net receipts of the relevant pooling or sharing
arrangement which is attributable to the Ship;


 


“Earnings
Account”  means, with respect to an
Owner, an account in the name of that Owner with the Agent in Hamburg which is
designated by the Agent in writing as the Earnings Account with respect to that
Owner for the purposes of this Agreement and in the plural means all of them;


 


“Earnings
Account Pledge”  means, in relation to an
Earnings Account, a deed of pledge of that Earnings Account, in such form as
the Lender may approve or require, and in the plural means all of them;


 


“EBITDA”  means, in respect of the relevant period, the
aggregate amount of consolidated or combined pre-tax profits of the Group
before extraordinary or exceptional items, depreciation, interest, repayment of
principal in respect of any loan, rentals under finance leases and similar
charges payable;


 


“Environmental
Claim”  means:


 


(a)                                  any claim by any governmental, judicial or regulatory authority
which arises out of an Environmental Incident or an alleged Environmental
Incident or which relates to any Environmental Law; or


 


(b)                                 any claim by any other person which relates to an Environmental
Incident or to an alleged Environmental Incident,


 


and
“claim” means a claim for damages, compensation, fines, penalties or any other
payment of any kind whether or not similar to the foregoing; an order or
direction to take, or not to take, certain action or to desist from or suspend
certain action; and any form of enforcement or regulatory action, including the
arrest or attachment of any asset;


 


“Environmental
Incident”  means:


 


(a)                                  any release of Environmentally Sensitive Material from a Ship; or


 


(b)                                 any incident in which Environmentally Sensitive Material is released
from a vessel other than a Ship and which involves a collision between a Ship
and such other vessel or some other incident of navigation or operation, in
either case, in connection with which a Ship is actually or potentially liable
to be arrested, attached, detained or injuncted and/or a Ship or an Owner
and/or any operator or manager is at fault or allegedly at fault or otherwise
liable to any legal or administrative action; or


 


(c)                                  any other incident in which Environmentally Sensitive Material is
released otherwise than from a Ship and in connection with which a Ship is
actually or potentially liable to be arrested and/or where an Owner and/or any
operator or manager of a Ship is at fault or allegedly at fault or otherwise
liable to any legal or administrative action;


 


“Environmental
Law”  means any law relating to pollution
or protection of the environment, to the carriage of Environmentally Sensitive
Material or to actual or threatened releases of Environmentally Sensitive
Material;


 


7

















 


“Environmentally
Sensitive Material”  means oil, oil
products and any other substance (including any chemical, gas or other
hazardous or noxious substance) which is (or is capable of being or becoming)
polluting, toxic or hazardous;


 


“Event
of Default”  means any of the events or
circumstances described in Clause 19.1;


 


“Existing
Charter”  means, in relation to: [note:
the OSG charters have not been added.please do]


 


(a)           each of “ATLANTAS”, “AKTORAS” AND “AIOLOS”,
the Bareboat Charter relative to such Ship;


 


(b)           “AGISILAOS”, a time charter dated [•], made between Polarwind and BP as charterer;


 


(c)           “ASSOS”, a time charter dated [•], made between Canvey and [Morgan Stanley];


 


(e)           “ARIONAS”, a time charter dated [•], made between Carnation and BP;


 


(f)            “AVAX”, a time charter dated [•], made between Apollonas and BP; and


 


(g)           “AXIOS”, a time charter dated [•], made between Iraklitos and BP,


 


and
in the plural means all of them;


 


“Existing
Owners”  means each of:


 


(a)           Apollonas Shipping Company (“Apollonas”);


 


(b)           Canvey Shipmanagement Co. (“Canvey”);


 


(c)           Carnation Shipping Company (“Carnation”);


 


(d)           Centurion Navigation Limited (“Centurion”);


 


(e)           Iraklitos Shipping Company (“Iraklitos”);


 


(f)            Polarwind Maritime S.A. (“Polarwind”);


 


(g)           Shipping Rider Co. (“Rider”); and


 


(h)           Tempest Marine Inc. (“Tempest”),


 


each
a corporation incorporated under the laws of the Republic of the Marshall
Islands whose registered office is at Trust Company House, Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands,


 


and,
in the singular, means one of them;


 


“Existing
Ships”  means, together, “ATLANTAS”, “AKTORAS”,
“AGISILAOS”, “ASSOS”, “ARIONAS”, “AVAX”, “AXIOS” and “AIOLOS” and in the
singular means any of them;


 


“Fee
Letter” means a letter issued or to be issued by the Borrower to the Agent in
which the Borrower agrees to pay certain fees to the Agent in connection with
this Agreement;


 


8

















 


“Finance Documents”  means:


 


(a)           this Agreement;


 


(b)           the Master Agreement;


 


(c)           the Agency and Trust Agreement;


 


(d)           the Guarantees;


 


(e)           the Master Agreement Assignment;


 


(f)            the General Assignments;


 


(g)           the Mortgages;


 


(h)           the Earnings Account Pledges;


 


(i)            the Retention Account Pledge;


 


(j)            the Swap Account Pledge;


 


(k)           any Charterparty Assignments;


 


(l)            any Bareboat Charter Security
Agreements;


 


(m)          the Approved Manager’s Undertakings;
and


 


(n)                                 any other document (whether creating a Security Interest or not)
which is executed at any time by the Borrower, an Owner or any other person as
security for, or to establish any form of subordination or priorities
arrangement in relation to, any amount payable to the Lenders under this
Agreement or any of the documents referred to in this definition;


 


“Financial
Indebtedness”  means, in relation to a
person (the “debtor”),  a liability of
the debtor:


 


(a)                                  for principal, interest or any other sum payable in respect of any
moneys borrowed or raised by the debtor;


 


(b)                                 under any loan stock, bond, note or other security issued by the
debtor;


 


(c)                                  under any acceptance credit, guarantee or letter of credit facility
made available to the debtor;


 


(d)                                 under a financial lease, a deferred purchase consideration
arrangement or any other agreement having the commercial effect of a borrowing
or raising of money by the debtor;


 


(e)                                  under any interest or currency swap or any other kind of derivative
transaction entered into by the debtor or, if the agreement under which any
such transaction is entered into requires netting of mutual liabilities, the
liability of the debtor for the net amount; or


 


(f)                                    under a guarantee, indemnity or similar obligation entered into by
the debtor in respect of a liability of another person which would fall within
(a) to (e) if the references to the debtor referred to the other person;


 


9

















 


“Fleet
Vessels”  means all of the vessels (including,
but not limited to, the Ships) from time to time wholly owned by members of the
Group (each a “Fleet Vessel”);


 


“General
Assignment”  means, in relation to a
Ship, a general assignment of the Earnings, the Insurances and any Requisition
Compensation, in such form as the Lenders may approve or require and in the
plural means all of them;


 


“Group”  means the Borrower and its subsidiaries
(whether direct or indirect and including, but not limited to, each Owner) from
time to time during the Security Period 
and “member of the Group” shall be construed accordingly;


 


“Guarantee”  means, in relation to an Owner, the guarantee
to be given by that Owner in favour of the Security Trustee, guaranteeing the
obligations of the Borrower under this Agreement and the other Finance
Documents, in such form as the Lenders may approve or require and in the plural
means all of them;


 


“Insurances”  means, in relation to a Ship:


 


(a)                                  all policies and contracts of insurance, including entries of such
Ship in any protection and indemnity or war risks association, which are
effected in respect of such Ship, her Earnings or otherwise in relation to her;
and


 


(b)                                 all rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a premium;


 


“Interest
Period”  means a period determined in
accordance with Clause 6;


 


“IPO”  means a successful initial public offering of
the common units of the Borrower on the Nasdaq National Market in New York
identified in the Form F-1 registration statement and the prospectus filed or
to be filed by the Borrower with the US Securities and Exchange Commission;


 


“ISM
Code”  means, in relation to its
application to each Owner, its Ship and its operation:


 


(a)                                  ‘The International Management Code for the Safe Operation of Ships
and for Pollution Prevention’, currently known or referred to as the ‘ISM Code’,
adopted by the Assembly of the International Maritime Organisation by
Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994 into
chapter IX of the International Convention for the Safety of Life at Sea 1974
(SOLAS 1974); and


 


(b)                                 all further resolutions, circulars, codes, guidelines, regulations
and recommendations which are now or in the future issued by or on behalf of
the International Maritime Organisation or any other entity with responsibility
for implementing  the ISM Code, including
without limitation, the ‘Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations’ produced by the
International Maritime Organisations pursuant to Resolution A.788(19) adopted
on 25 November 1995,


 


as
the same may be amended, supplemented or replaced from time to time;


 


“ISM Code Documentation” 
includes:


 


(a)                                  the document of compliance (DOC) and safety management certificate
(SMC) issued pursuant to the ISM Code in relation to the Ships or either or
them within the periods specified by the ISM Code; and


 


10

















 


(b)           all other documents and data which
are relevant to the ISM SMS and its implementation and verification which the
Agent may require; and


 


(c)           any other documents which are
prepared or which are otherwise relevant to establish and maintain the Ships’
or the Owners’ compliance with the ISM Code which the Agent may require;


 


“ISM
SMS”  means the safety management system
for each Ship which is required to be developed, implemented and maintained
under the ISM Code;


 


“ISPS Code” 
means the International Ship and Port Facility Security Code constituted
pursuant to resolution A.924 (22) of the International Maritime Organisation (“IMO”)
adopted by a Diplomatic conference of the IMO on Maritime Security on 13
December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea
Convention (SOLAS) 1974 (as amended) to take effect on 1 July 2004;


 


“ISSC” 
means a valid and current International Ship Security Certificate issued
under the ISPS Code;


 


“Lender”  means, subject to Clause 26.6:


 


(a)           a bank or financial institution
listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or
through another branch notified to the Borrower under Clause 26.14) unless it
has delivered a Transfer Certificate or Certificates covering the entire
amounts of its Commitment and its Contribution; and


 


(b)           the holder for the time being of a
Transfer Certificate;


 


“LIBOR” 
means, for an Interest Period:


 


(a)           the rate per annum equal to the
offered quotation for deposits in Dollars for a period equal to, or as near as
possible equal to, the relevant Interest Period which appears on the
appropriate page of the Reuters Monitor Money Rates Service at or about 11.00
a.m. (London time) on the Quotation Date for that Interest Period or on such
other service as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for Dollars; or


 


(b)           if no rate is quoted on the
appropriate page of the Reuters Monitor Money Rates Service, the rate per annum
determined by the Agent to be the arithmetic mean (rounded upwards, if
necessary, to the nearest one-sixteenth of one per cent.) of the rates per
annum notified to the Agent by each Lender as the rate at which deposits in
Dollars are offered to that Lender by leading banks in the London Interbank
Market at that Lender’s request at or about 11.00 a.m. (London time) on the
Quotation Date for that Interest Period for a period equal to that Interest
Period and for delivery on the first Business Day of it;


 


“Liquid
Assets”  means, at any relevant time
hereunder, the aggregate of:


 


(a)           cash in hand or held with banks or
other financial institutions of the Borrower and/or any other member of the
Group in Dollars or another currency freely convertible into Dollars,;


 


(b)           the market value of transferable
certificates of deposit in a freely convertible currency acceptable to the
Lenders (being for the purposes of this Agreement,


 


11

















 


Dollars,
Japanese Yen, Swiss Francs, Euros or Sterling) issued by a prime international
bank; and


 


(c)                                  the market value of equity securities (if and to the extent that the
Agent is satisfied that such equity securities are readily saleable for cash
and that there is a ready market therefor) and investment grade debt securities
which are publicly traded on a major stock exchange or investment market
(valued at market value as at any applicable date of determination);


 


in each case owned by the Borrower or any other member of the Group
where:


 


(i)                                     the market value of any asset specified in paragraph (b) and (c)
shall be the bid price quoted for it on the relevant calculation date by the
Agent: and


 


(ii)                                  the amount or value of any asset denominated in a currency other
than Dollars shall be converted into Dollars using the Agent’s spot rate for
the purchase of Dollars with that currency on the relevant calculation date.


 


“Loan”  means the principal amount of the Advances
for the time being outstanding under this Agreement;


 


“Major
Casualty”  means, in relation to a Ship,
any casualty to the Ship in respect of which the claim or the aggregate of the
claims against all insurers, before adjustment for any relevant franchise or
deductible, exceeds $ 750,000 or the equivalent in any other currency;


 


“Majority
Lenders”  means:


 


(a)                                  at any time when no Advances are outstanding, Lenders whose
Commitments total 66 2/3 per cent. of the Total Commitments; and


 


(b)                                 at any other time, Lenders whose Contributions total 66 2/3 per
cent. of the Loan;


 


“Margin”  means 0.75 per cent. per annum;


 


“Market
Value”  means, in respect of each Ship
and each Fleet Vessel, the market value thereof determined from time to time in
accordance with Clause 15.4;


 


“Master
Agreement” means a master agreement (on the 1992 or, as the case may be, 2002
ISDA (Multicurrency - Crossborder) form) made between the Borrower and the Swap
Bank and includes all Designated Transactions from time to time entered into
and Confirmations from time to time exchanged under the master agreement;


 


“Master
Agreement Assignment” means the assignment of the Master Agreement in such form
as the Lenders may approve or require;


 


“Mortgage”  means, in relation to a Ship, the first
preferred ship mortgage on the Ship under the relevant Approved Flag executed
by the Owner of that Ship in favour of the Security Trustee, in such form as
the Lenders may approve or require;


 


“Negotiation
Period”  has the meaning given in Clause
5.8;


 


“Net
Interest Expenses”  means, in respect of
the relevant period:


 


12

















 


 


(a)                                  the aggregate of all interest payable by any member of the Group on
any Financial Indebtedness (excluding any amounts owing by one member of the
Group to another member of the Group) and any net amounts payable under
interest rate hedge agreements, less


 


(b)                                 the aggregate of all interest received by any member of the Group
arising from any Liquid Assets and any net amounts received by any member of
the Group under interest rate hedge agreements;


 


“New
Ships”  means, together, the Tranche B
New Ships and the Tranche C New Ships and in the singular means any of them;


 


“New
Ships Owners”  means each of:


 


(a)           Belerion Maritime Co. (“Belerion”);


 


(b)           Epicurus Shipping Company (“Epicurus”);


 


(c)           Laredo Maritime Inc. (“Laredo”);


 


(d)           Lorenzo Shipmanagement Inc. (“Lorenzo”);


 


(e)           Sorrel Shipmanagement Inc. (“Sorrel”);


 


(f)            Splendor Shipholding S.A. (“Splendor”);
and


 


(g)           Wind Dancer Shipping Inc. (“Wind
Dancer”),


 


each
a corporation incorporated under the laws of the Republic of the Marshall Islands
whose registered office is at Trust Company House, Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands,


 


and,
in the singular means any one of them;


 


“Notifying
Lender”  has the meaning given in Clause
23.1 or Clause 24.1 as the context requires;


 


“OSG”  means Overseas Shipholding Group Inc., a
corporation incorporated in [•] acting through its office at [•] or any wholly owned subsidiary of Overseas Shipholding Group Inc.;


 


“Owner”  means, in relation to:


 


(a)           “AGISILAOS”, Polarwind;


 


(b)           “AIOLOS”, Tempest;


 


(c)           “AKERAIOS”, Laredo;


 


(d)           “AKTORAS”, Centurion;


 


(e)           “ALEXANDROS II”, Sorrel;


 


(f)            “ANEMOS I”, Splendor;


 


(g)           “APOSTOLOS”, Lorenzo;


 


(h)           “ARIONAS”, Carnation;


 


13

















 


(i)            “ARIS II”, Belerion;


 


(j)            “ARISTOTELIS II”, Wind Dancer;


 


(k)           “ASSOS”, Canvey;


 


(l)            “ATLANTAS”, Rider;


 


(m)          “ATROTOS”, Epicurus;


 


(n)           “AVAX”, Apollonas; and


 


(o)           “AXIOS”, Iraklitos,


 


and,
in the plural, means all of them;


 


“Partnership
Agreement”  means the first amended and
restated agreement of limited partnership in respect of the Borrower made
between Capital GP L.L.C., a Marshall Islands limited liability company, as
general partner, and Capital Maritime and Trading Corp., a Marshall Islands
corporation, as organisational limited partner;


 


“Payment
Currency”  has the meaning given in
Clause 21.5;


 


“Permitted
Security Interests”  means:


 


(a)           Security Interests created by the
Finance Documents;


 


(b)           liens for unpaid crew’s wages in
accordance with usual maritime practice;


 


(c)           liens for salvage;


 


(d)                                 liens arising by operation of law for not more than 2 months’
prepaid hire under any charter in relation to a Ship not prohibited by this
Agreement;


 


(e)                                  liens for master’s disbursements incurred in the ordinary course of
trading and any other lien arising by operation of law or otherwise in the
ordinary course of the operation, repair or maintenance of a Ship, provided
such liens do not secure amounts more than 45 days overdue (unless the overdue
amount is being contested by the relevant Owner in good faith by appropriate
steps) and subject, in the case of liens for repair or maintenance, to Clause
14.13(e);


 


(f)                                    any Security Interest created in favour of a plaintiff or defendant
in any action of the court or tribunal before whom such action is brought as
security for costs and expenses where the Borrower is prosecuting or defending
such action in good faith by appropriate steps; and


 


(g)                                 Security Interests arising by operation of law in respect of taxes
which are not overdue for payment other than taxes being contested in good
faith by appropriate steps and in respect of which appropriate reserves have
been made;


 


“Pertinent
Jurisdiction”, in relation to a company, means:


 


(a)           England and Wales;


 


(b)           the country under the laws of which
the company is incorporated or formed;


 


(c)           a country in which the company’s
central management and control is or has recently been exercised;


 


14

















 


(d)                                 a country in which the overall net income of the company is subject
to corporation tax, income tax or any similar tax;


 


(e)                                  a country in which assets of the company (other than securities
issued by, or loans to, related companies) having a substantial value are
situated, in which the company maintains a permanent place of business, or in
which a Security Interest created by the company must or should be registered
in order to ensure its validity or priority; and


 


(f)                                    a country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would have
such jurisdiction if their assistance were requested by the courts of a country
referred to in paragraphs (b) or (c) above;


 


“Potential
Event of Default”  means an event or circumstance
which, with the giving of any notice, the lapse of time, a determination of the
Majority Lenders and/or the satisfaction of any other condition, would
constitute an Event of Default;


 


“Quotation
Date” means, in relation to any Interest Period (or any other period for which
an interest rate is to be determined under any provision of a Finance
Document), the day on which quotations would ordinarily be given by leading
banks in the London Interbank Market for deposits in the currency in relation to
which such rate is to be determined for delivery on the first day of that
Interest Period or other period;


 


“Relevant
Distribution Declaration Date”  has the
meaning given in Clause 8.2(a);


 


“Relevant
Person”  has the meaning given in Clause
19.9;


 


“Repayment
Date”  means a date on which a repayment
is required to be made under Clause 8;


 


“Repayment
Instalment”  has the meaning given to
that item in Clause 8.2(b);


 


“Requisition
Compensation”  includes all compensation
or other moneys payable by reason of any act or event such as is referred to in
paragraph (b) of the definition of “Total Loss”;


 


“Retention
Account” means an account in the name of the Borrower with the Agent in Hamburg
designated “Capital Product Partners L.P. - Retention Account” which is designated
by the Agent in writing as the Retention Account for the purposes of this
Agreement and to which transfers are only to be made in the circumstances
referred to in Clause 8.2(a);


 


“Retention
Account Pledge” means a pledge agreement creating security in favour of the
Security Trustee in respect of the Retention Account in such form as the
Lenders may approve or require;


 


“Revolving
Facility”  means the aggregate principal
amount of up to $370,000,000 which may be drawn by the Borrower in accordance with
the terms and conditions of this Agreement or, as the context may require, the
aggregate principal amount of the Advances outstanding under this Agreement at
any time prior to the conversion of the Revolving Facility into the Term Loan
pursuant to Clause 8.1;


 


“Secured
Liabilities”  means all liabilities which
the Borrower, the Security Parties or any of them have, at the date of this
Agreement or at any later time or times, under or by virtue of the Finance
Documents or any judgment relating to the Finance Documents; and for this
purpose, there shall be disregarded any total or partial


 


15

















 


discharge
of these liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other procedure
under the insolvency laws of any country;


 


“Security
Cover Ratio”  means the ratio which is
determined at any time by comparing the aggregate Market Value of the Ships
subject to a Mortgage at the relevant time against the Loan;


 


“Security
Interest”  means:


 


(a)                                  a mortgage, charge (whether fixed or floating) or pledge, any
maritime or other lien or any other security interest of any kind;


 


(b)                                 the rights of the plaintiff under an action in rem in which the vessel concerned has
been arrested or a writ has been issued or similar step taken; and


 


(c)                                  any arrangement entered into by a person (A) the effect of which is
to place another person (B) in a position which is similar, in economic terms,
to the position in which B would have been had he held a security interest over
an asset of A; but (c) does not apply to a right of set off or combination of
accounts conferred by the standard terms of business of a bank or financial
institution;


 


“Security
Party”  means each of the Owners and any
other person (except a Creditor Party and any charterer of any Ship) who, as a
surety or mortgagor, as a party to any subordination or priorities arrangement,
or in any similar capacity, executes a document falling within the final
paragraph of the definition of “Finance Documents”;


 


“Security
Period”  means the period commencing on
the date of this Agreement and ending on the date on which the Agent notifies
the Borrower, the Security Parties and the Lenders that:


 


(a)                                  all amounts which have become due for payment by the Borrower or any
Security Party under the Finance Documents have been paid;


 


(b)                                 no amount is owing or has accrued (without yet having become due for
payment) under any Finance Document;


 


(c)                                  neither the Borrower nor any Security Party has any future or
contingent liability under Clause 20, 21 or 22 below or any other provision of
this Agreement or another Finance Document; and


 


(d)                                 the Agent, the Security Trustee and the Majority Lenders do not
consider that there is a significant risk that any payment or transaction under
a Finance Document would be set aside, or would have to be reversed or
adjusted, in any present or possible future bankruptcy of the Borrower or a
Security Party or in any present or possible future proceeding relating to a
Finance Document or any asset covered (or previously covered) by a Security
Interest created by a Finance Document;


 


“Security
Trustee”  means HSH Nordbank AG or any
successor of it appointed under clause 5 of the Agency and Trust Agreement;


 


“Ships”  means, together, the Existing Ships and the
New Ships, and in the singular means any of them;


 


“Shipbuilding
Contracts”  means, together, the Atrotos
Shipbuilding Contract, the Akeraios Shipbuilding Contract, the Anemos I Shipbuilding
Contract, the Apostolos


 


16

















 


Shipbuilding
Contract, the Alexandros II Shipbuilding Contract, the Aristotelis Shipbuilding
Contract and the Aris II Shipbuilding Contract and in the singular means any of
them;


 


“Swap
Account” means an account in the name of the Borrower with the Agent in Hamburg
designated “Capital Product Partners L.P. - Swap Account”, which is designated
by the Agent as the Swap Account for the purposes of this Agreement;


 


“Swap
Account Pledge” means a pledge agreement creating security in favour of the
Security Trustee in respect of the Swap Account in such form as the Lenders may
approve or require;


 


“Swap
Bank”  means HSH Nordbank AG acting
through its office at Martensdamm 6, D-24103 Kiel, Germany;


 


“Swap
Exposure” means, as at any relevant date, the amount certified by the Swap Bank
to the Agent to be the aggregate net amount in Dollars which would be payable
by the Borrower to the Swap Bank under (and calculated in accordance with)
section 6(e) (Payments on Early Termination) of the Master Agreement if an
Early Termination Date had occurred on the relevant date in relation to all
continuing Designated Transactions entered into between the Borrower and the
Swap Bank;


 


“Term
Loan”  means, on the Termination Date,
the aggregate principal amount of all the Advances (following the conversion of
the Revolving Facility to the Term Loan pursuant to Clause 8.1) and, at all
times thereafter, the Loan for the time being outstanding under this Agreement;


 


“Termination
Date”  means 30 June 2012 (as such date
may be extended pursuant to Clause 4.9);


 


“Total
Indebtedness”“  means the aggregate
Financial Indebtedness of the Group as stated in the most recent Accounting
Information;


 


“Total
Loss”  means, in relation to a Ship:


 


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


 


(b)                                 any expropriation, confiscation, requisition or acquisition of the
Ship, whether for full consideration, a consideration less than her proper
value, a nominal consideration or without any consideration, which is effected
by any government or official authority or by any person or persons claiming to
be or to represent a government or official authority, excluding a requisition
for hire for a fixed period not exceeding one year without any right to an
extension;


 


(c)                                  any condemnation of the Ship by any tribunal or by any person or
person claiming to be a tribunal;


 


(d)                                 any arrest, capture, seizure or detention of the Ship (including any
hijacking or theft) unless she is within 90 days redelivered to the full
control of the Owner owning the Ship;


 


“Total
Loss Date”  means, in relation to a Ship:


 


(a)                                  in the case of an actual loss of the Ship, the date on which it
occurred or, if that is unknown, the date when the Ship was last heard of;


 


(b)                                 in the case of a constructive, compromised, agreed or arranged total
loss of the Ship, the earliest of:


 


17

















 


(i)                                     the date on which a notice of abandonment is given to the insurers;
and


 


(ii)                                  the date of any compromise, arrangement or agreement made by or on
behalf of the Owner owning the Ship, with the Ship’s insurers in which the
insurers agree to treat the Ship as a total loss; and


 


(c)                                  in the case of any other type of total loss, on the date (or the
most likely date) on which it appears to the Agent that the event constituting
the total loss occurred;


 


“Tranche
A”  means an amount of up to $60,000,000
to be made available by the Lenders to the Borrower in up to two Advances
pursuant to the terms of this Agreement and which shall (inter alia) by used to
pay a dividend to Capital Maritime & Trading Corp. or, as the context may
require, the aggregate principal amount thereof outstanding at the relevant
time under this Agreement;


 


“Tranche
B”  means an amount of up to $224,000,000
to be made available by the Lenders to the Borrower in up to four Advances
pursuant to the terms of this Agreement and which shall be on-lent by the
Borrower to the Owners of the Tranche B New Ships to assist such Owners in
their acquisition of the Tranche B New Ships or, as the context may require,
the aggregate principal amount thereof outstanding at the relevant time under
this Agreement;


 


“Tranche
B New Ships”  means together, “ATROTOS”, “AKERAIOS”,
“ANEMOS I” and “APOSTOLOS” and in the singular means any of them;


 


“Tranche
C”  means an amount of up to $86,000,000
to be made available by the Lenders to the Borrower in up to three Advances
pursuant to the terms of this Agreement and which shall be on-lent by the
Borrower to the Owners of the Tranche C New Ships to assist such Owners in
their acquisition of the Tranche C New Ships or, as the context may require,
the aggregate principal amount thereof outstanding at the relevant time under
this Agreement;


 


“Tranche
C New Ships”  means, together, “ALEXANDROS
II”, “ARISTOTELIS” and “ARIS II” and in the singular means any of them;


 


“Tranches”  mean together,  Tranche A, Tranche B and Tranche C, and in
the singular means any of them;


 


“Transaction”  has the meaning given in the Master
Agreement;


 


“Transfer
Certificate”  has the meaning given in
Clause 26.2;


 


“Trust
Property” has the meaning given in clause 3.1 of the Agency and Trust
Agreement; and


 


“US
GAAP”  means generally accepted
accounting principles as from time to time in effect in the United States of
America.


 


1.2          Construction of certain terms. 
In this Agreement:


 


“approved”  means, for the purposes of Clause 13,
approved in writing by the Agent;


 


“asset”
includes every kind of property, asset, interest or right, including any
present, future or contingent right to any revenues or other payment;


 


“company”
includes any partnership, joint venture and unincorporated association;


 


18

















 


“consent”
includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration, notarisation and legalisation;


 


“contingent
liability” means a liability which is not certain to arise and/or the amount of
which remains unascertained;


 


“document”
includes a deed; also a letter, fax or telex;


 


“excess
risks”  means, in relation to a Ship, the
proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the Ship in
consequence of her insured value being less than the value at which the Ship is
assessed for the purpose of such claims;


 


“expense”
means any kind of cost, charge or expense (including all legal costs, charges
and expenses) and any applicable value added or other tax;


 


“law”
includes any form of delegated legislation, any order or decree, any treaty or
international convention and any regulation or resolution of the Council of the
European Union, the European Commission, the United Nations or its Security
Council;


 


“legal
or administrative action” means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;


 


“liability”
includes every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or otherwise;


 


“months”  shall be construed in accordance with Clause
1.3;


 


“obligatory
insurances”  means, in relation to a
Ship, all insurances effected, or which the Borrower owning the Ship is obliged
to effect, under Clause 13 below or any other provision of this Agreement or
another Finance Document;


 


“parent
company”  has the meaning given in Clause
1.4;


 


“person”  includes any company; any state, political
sub-division of a state and local or municipal authority; and any international
organisation;


 


“policy”,
in relation to any insurance, includes a slip, cover note, certificate of entry
or other document evidencing the contract of insurance or its terms;


 


“protection
and indemnity risks”  means the usual
risks covered by a protection and indemnity association managed in London,
including pollution risks and the proportion (if any) of any sums payable to
any other person or persons in case of collision which are not recoverable
under the hull and machinery policies by reason of the incorporation therein of
clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the
Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running
Down Clause (1/10/71) or any equivalent provision;


 


“regulation”
includes any regulation, rule, official directive, request or guideline (either
having the force of law or compliance with which is reasonable in the ordinary
course of business of the party concerned) of any governmental,
intergovernmental or supranational body, agency, department or regulatory, self-regulatory
or other authority or organisation;


 


“subsidiary”  has the meaning given in Clause 1.4;


 


19

















 


“successor”
includes any person who is entitled (by assignment, novation, merger or
otherwise) to any other person’s rights under this Agreement or any other
Finance Document (or any interest in those rights) or who, as administrator,
liquidator or otherwise, is entitled to exercise those rights; and in
particular references to a successor include a person to whom those rights (or
any interest in those rights) are transferred or pass as a result of a merger,
division, reconstruction or other reorganisation of it or any other person;


 


“tax”  includes any present or future tax, duty,
impost, levy or charge of any kind which is imposed by any state, any political
sub-division of a state or any local or municipal authority (including any such
imposed in connection with exchange controls), and any connected penalty,
interest or fine; and


 


“war
risks”  means the risks according to
Institute War and Strike Clauses (Hull Time) (1/10/83) or (1/11/95), or
equivalent conditions, including, but not limited to risk of mines, blocking
and trapping, missing vessel, confiscation and all risks excluded from the
standard form of English or other marine policy.


 


1.3                               Meaning of “month”.  A period
of one or more “months” ends on the day in the relevant calendar month
numerically corresponding to the day of the calendar month on which the period
started (“the numerically corresponding day”), but:


 


(a)                                  on the Business Day following the numerically corresponding day if
the numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or


 


(b)                                 on the last Business Day in the relevant calendar month, if the
period started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding day,


 


and
“month” and “monthly” shall be construed accordingly.


 


1.4                               Meaning of “subsidiary”. A company (S) is a subsidiary of another
company (P) if:


 


(a)                                  a majority of the issued shares in S (or a majority of the issued
shares in S which carry unlimited rights to capital and income distributions)
are directly owned by P or are indirectly attributable to P; or


 


(b)                                 P has direct or indirect control over a majority of the voting
rights attached to the issued shares of S; or


 


(c)                                  P has the direct or indirect power to appoint or remove a majority
of the directors of S,


 


and
any company of which S is a subsidiary is a parent company of S.


 


1.5                               General Interpretation.


 


(a)                                  In this Agreement:


 


(i)                                     references to, or to a provision of, a Finance Document or any other
document are references to it as amended or supplemented, whether before the
date of this Agreement or otherwise;


 


(ii)                                  references to, or to a provision of, any law include any amendment,
extension, re-enactment or replacement, whether made before the date of this
Agreement or otherwise; and


 


20





















 


(iii)                               words denoting the singular number shall include the plural and vice
versa.


 


(b)                                 Clauses 1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless
the contrary intention appears.


 


(c)                                  References in Clause 1.1 to a document being in the form of a
particular Appendix include references to that form with any modifications to
that form which the Agent (with the authorisation of the Majority Lenders in
the case of substantial modifications) approves or reasonably requires.


 


(d)                                 The clause headings shall not affect the interpretation of this
Agreement.


 


2                                         FACILITY


 


2.1                               Amount of facilities.  Subject
to the other provisions of this Agreement, the Lenders shall make available to
the Borrower revolving credit and term loan facilities not exceeding
$370,000,000 in aggregate at any time. 
The revolving credit facility shall initially be made available in three
Tranches as follows:


 


(a)                                  Tranche A shall be in an amount not exceeding $60,000,000;


 


(b)                                 Tranche B shall be in an amount not exceeding $224,000,000;


 


(c)                                  Tranche C shall be in an amount not exceeding $86,000,000; and


 


(d)                                 Tranche A may be drawn in up to two Advances, Tranche B may be drawn
in up to four Advances and Tranche C may be drawn in up to three Advances.


 


2.2                               Consolidation of Tranches.  On
the Drawdown Date of the last Advance under Tranche C, all the Tranches shall
be consolidated to form a single tranche constituting the Revolving Facility.


 


3                                         POSITION OF THE LENDERS, THE SWAP BANK AND THE MAJORITY
LENDERS


 


3.1                               Interests of Lenders and Swap Bank several.  The rights of the Lenders and the Swap Bank
under this Agreement and the Master Agreement are several; accordingly:


 


(a)                                  each Lender shall be entitled to sue for any amount which has become
due and payable by the Borrower to it under this Agreement; and


 


(b)                                 the Swap Bank shall be entitled to sue for any amount which has
become due and payable by the Borrower to it under the Master Agreement,


 


without joining
the Agent, the Security Trustee, any other Lender or the Swap Bank as
additional parties in the proceedings.


 


3.2                               Proceedings by individual Lender or Swap Bank.  However, without the prior consent of the
Majority Lenders, no Lender and the Swap Bank may bring proceedings in respect
of:


 


(a)                                  any other liability or obligation of the Borrower or a Security
Party under or connected with a Finance Document or the Master Agreement; or


 


(b)                                 any misrepresentation or breach of warranty by the Borrower or a Security
Party in or connected with a Finance Document or the Master Agreement.


 


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3.3                               Obligations several.  The
obligations of the Lenders under this Agreement and of the Swap Bank under the
Master Agreement are several; and a failure of a Lender to perform its
obligations under this Agreement or of the Swap Bank to perform its obligations
under the Master Agreement shall not result in:


 


(a)                                  the obligations of the other Lenders being increased; nor


 


(b)                                 the Borrower, any Security Party or any other Creditor Party being
discharged (in whole or in part) from its obligations under any Finance
Document;


 


and
in no circumstances shall a Lender or the Swap Bank have any responsibility for
a failure of another Lender or the Swap Bank to perform its obligations under
this Agreement or the Master Agreement.


 


3.4                               Parties bound by certain actions of Majority Lenders.  Every Lender, the Swap Bank, the Borrower and
each Security Party shall be bound by:


 


(a)                                  any determination made, or action taken, by the Majority Lenders
under any provision of a Finance Document;


 


(b)                                 any instruction or authorisation given by the Majority Lenders to
the Agent or the Security Trustee under or in connection with any Finance
Document;


 


(c)                                  any action taken (or in good faith purportedly taken) by the Agent
or the Security Trustee in accordance with such an instruction or
authorisation.


 


3.5                               Reliance on action of Agent. 
However, the Borrower and each Security Party:


 


(a)                                  shall be entitled to assume that the Majority Lenders have duly
given any instruction or authorisation which, under any provision of a Finance
Document, is required in relation to any action which the Agent has taken or is
about to take; and


 


(b)                                 shall not be entitled to require any evidence that such an
instruction or authorisation has been given.


 


3.6                               Construction.  In Clauses 3.4
and 3.5 references to action taken include (without limitation) the granting of
any waiver or consent, an approval of any document and an agreement to any
matter.


 


4                                         DRAWDOWN


 


4.1                               Request for Advance.  Subject
to the following conditions, the Borrower may request an Advance to be made by
ensuring that the Agent receives a completed Drawdown Notice not later than
11.00 a.m. (Hamburg time) 3 Business Days prior to the intended Drawdown Date.


 


4.2                               Availability.  The conditions
referred to in Clause 4.1 are that:


 


(a)                                  a Drawdown Date has to be a Business Day during the Availability
Period;


 


(b)                                 each Advance under Tranche B shall be used in financing the acquisition
of a Tranche B New Ship and such Advance shall be in an amount equal to the
least of (i) $56,000,000, (ii) an amount, which when aggregated with all the
other Advances under Tranche B which are then outstanding, is equal to
$224,000,000 and (iii) the


 


22





















 


Loan
does not exceed 67.5 per cent. of the aggregate Market Value of all the Ships
then subject to a Mortgage (including, without limitation, the Tranche B New
Ship to be financed by the relevant Advance);


 


(c)                                  each Advance under Tranche C shall be used in financing the
acquisition of a Tranche C New Ship and such Advance shall be in an amount
equal to the least of (i) $28,700,000, (ii) an amount, which when aggregated
with all the other Advances under Tranche C which are then outstanding, is
equal to $86,000,000 and (iii) the Loan does not exceed 60 per cent. of the
aggregate Market Value of all the Ships then subject to a Mortgage (including,
without limitation, the Tranche C New Ship to be financed by the relevant
Advance)  Provided that the Borrower may
draw down an Advance under Tranche C to finance the acquisition by Sorrel of “ALEXANDROS
II” in the amount of $48,000,000 if, after such Advance is drawn down, the then
outstanding amount of the Revolving Facility does not exceed 65 per cent. of
the aggregate Market Value of all Ships then subject to a Mortgage (including “ALEXANDROS
II”) and, in such circumstances, the Lenders will not be under an obligation to
make available to the Borrower a further Advance under Tranche C unless the
Borrower has first applied an amount of at least $19,300,000 in prepayment of
the Loan or has provided additional security over an unencumbered vessel in
accordance with Clause 8.11;


 


(d)                                 any Advance which is drawn after the consolidation of the Tranches
pursuant to Clause 2.2 shall be in an amount:


 


(i)                                     be in an amount of at least $2,000,000 or a higher integral multiple
of $1,000,000;


 


(ii)                                  which, when aggregated with the then outstanding amount of the
Revolving Facility, does not exceed the lesser of (A) 67.5 per cent. of the
aggregate Market Value of the Ships then subject to a Mortgage and (B) the
Total Commitments; and


 


(e)                                  if any part of the Total Commitments has not been borrowed before
the end of the Availability period, the Total Commitments shall on that date be
permanently cancelled by an amount equal to such undrawn amount.


 


4.3                               Purpose of Advances.  The
Borrower undertakes with each Creditor Party to use each Advance only for the
purposes stated in the Recitals to this Agreement.


 


4.4                               Notification to Lenders of receipt of a Drawdown Notice.  The Agent shall promptly notify the Lenders
that it has received a Drawdown Notice and the Agent shall inform each Lender
of:


 


(a)                                  the amount of the Advance and the Drawdown Date;


 


(b)                                 the amount of that Lender’s participation in the Advance; and


 


(c)                                  the duration of the first Interest Period.


 


4.5                               Drawdown Notice irrevocable. 
A Drawdown Notice must be signed by a director or other authorised
person of the Borrower; and once served, a Drawdown Notice cannot be revoked
without the prior consent of the Agent, acting on the authority of the Majority
Lenders.


 


4.6                               Lenders to make available Contributions.  Subject to the provisions of this Agreement,
each Lender shall, on and with value on each Drawdown Date, make available to
the Agent for the account of the Borrower the amount due from that Lender on
that Drawdown Date under Clause 2.2.


 


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4.7                               Disbursement of Advance. 
Subject to the provisions of this Agreement, the Agent shall on each
Drawdown Date pay to the Borrower the amounts which the Agent receives from the
Lenders under Clause 4.5; and that payment to the Borrower shall be made:


 


(a)                                  to such account which the Borrower specifies in the Drawdown Notice;
and


 


(b)                                 in the like funds as the Agent received the payments from the
Lenders.


 


4.8                               Disbursement of Advance to third party.   The payment by the Agent under Clause 4.7 to
the Builder shall constitute the making of the Advance and the Borrower shall
thereupon become indebted, as principal and direct obligor, to each Lender in
an amount equal to that Lender’s Contribution.


 


4.9                               Extension of Termination Date. 
If on 30 June 2012 (for the purposes of this Clause 4.9, the “Original
Termination Agreement”) the outstanding principal amount of the Revolving
Facility does not exceed 60 per cent. of the aggregate Market Value of the
Ships then subject to a Mortgage (determined by taking the average of the
aggregate Market Value of the Ships on the Original Termination Date and on the
date falling 6 months prior to the Original Termination Date), the Borrower
may, by giving the Agent notice in writing, request the extension of the
Original Termination Date for a further period of up to 3 years.  If the Majority Lenders, acting in their sole
and absolute discretion, agree to extend the Original Termination Date in
accordance with this Clause 4.9 the Agent shall send to the Borrower a notice
in writing advising it of the period by which the Original Termination Date
will be extended  Provided that the new
termination date shall be no later than 30 June 2015 and at all times
thereafter the term “Termination Date” shall be read and construed to mean the
new extended termination date.


 


5                                         INTEREST


 


5.1                               Payment of normal interest. 
Subject to the provisions of this Agreement, interest on each Advance in
respect of each Interest Period shall be paid by the Borrower on the last day
of that Interest Period.


 


5.2                               Normal rate of interest. 
Subject to the provisions of this Agreement, the rate of interest on
each Advance in respect of an Interest Period shall be the aggregate of the
applicable Margin and LIBOR for that Interest Period.


 


5.3                               Payment of accrued interest. 
In the case of an Interest Period longer than 3 months, accrued interest
shall be paid every 3 months during that Interest Period and on the last day of
that Interest Period.


 


5.4                               Notification of Interest Periods and rates of normal interest.  The Agent shall notify the Borrower and each
Lender of:


 


(a)                                  each rate of interest; and


 


(b)                                 the duration of each Interest Period,


 


as
soon as reasonably practicable after each is determined.


 


5.5                               Market disruption.  The
following provisions of this Clause 5 apply if:


 


(a)                                  no rate is quoted on the appropriate page of the Reuters Monitor
Money Rates Service and at least half of the total number of Lenders at any
time do not, before 1.00 p.m. (London time) on the Quotation Date for an
Interest Period, provide quotations to the Agent in order to fix LIBOR; or


 


24





















 


(b)                                 at least 1 Business Day before the start of an Interest Period, the
majority of the Lenders (in numbers) who together have Contributions amounting
to more than 50 per cent. of the Loan (or, if no Advance is outstanding at the
relevant time, Commitments amounting to more than 50 per cent. of the Total
Commitments) notify the Agent that LIBOR fixed by the Agent would not
accurately reflect the cost to those Lenders of funding their respective Contributions
(or any part of them) during the Interest Period in the London Interbank Dollar
Market at or about 11.00 a.m. (London time) on the second Business Day before
the commencement of the Interest Period; or


 


(c)                                  at least 1 Business Day before the start of an Interest Period, the
Agent is notified by a Lender (the “Affected Lender”) that for any reason it is
unable to obtain Dollars in the London Interbank Market in order to fund its
Contribution (or any part of it) during the Interest Period.


 


5.6                               Notification of market disruption. 
The Agent shall promptly notify the Borrower and each of the Lenders
stating the circumstances falling within Clause 5.5 which have caused its
notice to be given.


 


5.7                               Suspension of drawdown.  If
the Agent’s notice under Clause 5.6 is served before an Advance is made:


 


(a)                                  in a case falling within paragraph (a) of Clause 5.5, the Lenders’
obligations to make the Advance;


 


(b)                                 in a case falling within paragraph (b) of Clause 5.5, the Affected
Lender’s obligation to participate in the Advance,


 


                                                shall be suspended while the circumstances referred to in the Agent’s
notice continue.


 


5.8                               Negotiation of alternative rate of interest.  If the Agent’s notice under Clause 5.6 is
served after an Advance is made, the Borrower, the Agent and the Lenders or (as
the case may be) the Affected Lender shall use reasonable endeavours to agree,
within the 30 days after the date on which the Agent serves its notice under
Clause 5.6 (the “Negotiation Period”), an alternative interest rate or (as the
case may be) an alternative basis for the Lenders or (as the case may be) the
Affected Lender to fund or continue to fund their or its Contribution to the
relevant Advance or Advances during the Interest Period concerned.


 


5.9                               Application of agreed alternative rate of interest.  Any alternative interest rate or an
alternative basis which is agreed during the Negotiation Period shall take
effect in accordance with the terms agreed.


 


5.10                        Alternative rate of interest in absence of agreement.  If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the
relevant  circumstances are continuing at
the end of the Negotiation Period, then the Agent shall, with the agreement of
each Lender or (as the case may be) the Affected Lender, set an interest period
and interest rate representing the cost of funding of the Lenders or (as the
case may be) the Affected Lender in Dollars or in any available currency of
their or its Contribution to the relevant Advance or Advances plus the Margin;
and the procedure provided for by this Clause 5.10 shall be repeated if the
relevant circumstances are continuing at the end of the interest period so set
by the Agent.


 


5.11                        Notice of prepayment.  If the
Borrower does not agree with an interest rate set by the Agent under Clause
5.10, the Borrower may give the Agent not less than 15 Business Days’ notice of
its intention to prepay the relevant Advance or Advances at the end of the
interest period set by the Agent.


 


25





















 


5.12                        Prepayment; termination of Commitments.  A notice under Clause 5.11 shall be
irrevocable; the Agent shall promptly notify the Lenders or (as the case may
require) the Affected Lender of the Borrower’ notice of intended prepayment;
and:


 


(a)                                  on the date on which the Agent serves that notice, the Total
Commitments or (as the case may require) the Commitment of the Affected Lender
so far as they relate to the relevant Advance shall be cancelled; and


 


(b)                                 on the last Business Day of the interest period set by the Agent,
the Borrower shall prepay (without premium or penalty) the Loan or, as the case
may be, the Affected Lender’s Contribution, together with accrued interest
thereon at the applicable rate plus the Margin.


 


5.13                        Application of prepayment. 
The provisions of Clause 8 shall apply in relation to the prepayment.


 


6                                         INTEREST PERIODS


 


6.1                               Commencement of Interest Periods. 
The first Interest Period applicable to an Advance shall commence on the
relevant Drawdown Date and each subsequent Interest Period shall commence on
the expiry of the preceding Interest Period.


 


6.2                               Duration of normal Interest Periods. 
Subject to Clauses 6.3 and 6.4, each Interest Period in respect of each
Advance shall be:


 


(a)                                  1, 3 or 6, 9 or 12 months as notified by the Borrower to the Agent
not later than 11.00 a.m. (Hamburg time) 3 Business Days before the
commencement of the Interest Period;


 


(b)                                 in the case of the first Interest Period applicable to the second
and any subsequent Advance of a Tranche, a period ending on the last day of the
then current Interest Period applicable to such Tranche, whereupon all of the
Advances in respect of such Tranche shall be consolidated and treated as a
single advance;


 


(c)                                  3 months, if the Borrower fail to notify the Agent by the time
specified in paragraph (a) above; or


 


(d)                                 such other period as the Borrower may request from the Agent, which
may be agreed by the Agent


 


Provided
that no more than 6 Interest Periods in aggregate of 1-month’s duration may be
current at any time.


 


6.3                               Duration of Interest Periods for repayment instalments.  In respect of an amount due to be repaid
under Clause 8 on a particular Repayment Date, an Interest Period in relation
to the relevant Tranche shall end on that Repayment Date.


 


6.4                               Non-availability of matching deposits for Interest Period
selected.  If, after the Borrower has
selected an Interest Period longer than 6 months, any Lender notifies the Agent
by 11.00 a.m. (Hamburg time) on the third Business Day before the commencement
of the Interest Period that it is not satisfied that deposits in Dollars for a
period equal to the Interest Period will be available to it in the London
Interbank Market when the Interest Period commences, the Interest Period shall
be of 6 months.


 


7                                         DEFAULT INTEREST


 


7.1                               Payment of default interest on overdue amounts.  The Borrower shall pay interest in accordance
with the following provisions of this Clause 7 on any amount payable by


 


26





















 


the
Borrower under any Finance Document which the Agent, the Security Trustee or
the other designated payee does not receive on or before the relevant date,
that is:


 


(a)                                  the date on which the Finance Documents provide that such amount is
due for payment; or


 


(b)                                 if a Finance Document provides that such amount is payable on
demand, the date on which the demand is served; or


 


(c)                                  if such amount has become immediately due and payable under Clause
19.4, the date on which it became immediately due and payable.


 


7.2                               Default rate of interest. 
Interest shall accrue on an overdue amount from (and including) the
relevant date until the date of actual payment (as well after as before
judgment) at the rate per annum determined by the Agent to be 2 per cent.
above:


 


(a)                                  in the case of an overdue amount of principal, the higher of the
rates set out at paragraphs (a) and (b) of Clause 7.3; or


 


(b)                                 in the case of any other overdue amount, the rate set out at
paragraph (b) of Clause 7.3.


 


7.3                               Calculation of default rate of interest.  The rates referred to in Clause 7.2 are:


 


(a)                                  the rate applicable to the overdue principal amount immediately
prior to the relevant date (but only for any unexpired part of any then current
Interest Period);


 


(b)                                 the Margin plus, in respect of successive periods of any duration
(including at call) up to 3 months which the Agent may select from time to
time:


 


(i)                                     LIBOR; or


 


(ii)                                  if the Agent determines that Dollar deposits for any such period are
not being made available to a Lender or (as the case may be) Lenders by leading
banks in the London Interbank Market in the ordinary course of business, a rate
from time to time determined by the Agent by reference to the cost of funds to
the Agent from such other sources as the Agent may from time to time determine.


 


7.4                               Notification of interest periods and default rates.  The Agent shall promptly notify the Lenders
and the Borrower of each interest rate determined by the Agent under Clause 7.3
and of each period selected by the Agent for the purposes of paragraph (b) of
that Clause; but this shall not be taken to imply that the Borrower is liable
to pay such interest only with effect from the date of the Agent’s
notification.


 


7.5                               Payment of accrued default interest. 
Subject to the other provisions of this Agreement, any interest due
under this Clause shall be paid on the last day of the period by reference to
which it was determined; and the payment shall be made to the Agent for the
account of the Creditor Party to which the overdue amount is due.


 


7.6                               Compounding of default interest. 
Any such interest which is not paid at the end of the period by
reference to which it was determined shall thereupon be compounded.


 


7.7                               Application to Master Agreement. 
For the avoidance of doubt, this Clause 7 does not apply to any amount
payable under the Master Agreement in respect of any continuing Designated
Transaction as to which section 2(e) (Default Interest; Other Amounts) of the
Master Agreement shall apply.


 


27





















 


8                                         CONVERSION TO TERM LOAN; 
REPAYMENT AND PREPAYMENT


 


8.1                               Conversion to Term Loan.  On
the Termination Date, the Revolving Facility shall be converted into the Term
Loan.


 


8.2                               Mandatory amortisation and amount of repayments of Term Loan.  The following provisions of this Clause 8.2
shall apply to the repayment of the Loan:


 


(a)                                  if on a Distribution Declaration Date falling before the Termination
Date, the Security Cover Ratio (expressed as a percentage) is less than 125 per
cent., then the Borrower shall repay the Loan in an amount which, once repaid,
shall eliminate the shortfall.  If a
repayment is required pursuant to this Clause 8.2(a) on any Distribution
Declaration Date (being the “Relevant Distribution Declaration Date”), then the
Borrower shall transfer the amount of the repayment due under this Clause
8.2(a) into the Retention Account no later than 5 Business Days after the
Relevant Distribution Declaration Date. 
On the last day of the first Interest Period to expire which is current
as at the Relevant Distribution Declaration Date the Agent shall apply all
amounts standing to the credit of the Retention Account in or towards repayment
of the Loan and the payment of interest thereon in accordance with Clause 18.4;
and


 


(b)                                 after the Termination Date, the Term Loan shall be repaid by up to
20 equal consecutive three-monthly repayment instalments (each a “Repayment
Instalment” and together the “Repayment Instalments”) and a final balloon
instalment (the “Balloon Instalment”). The Balloon Instalment shall be equal to
50 per cent of the Revolving Facility on the Termination Date and each
Repayment Instalment shall be in an amount equal to one-twentieth of the
Balloon Instalment  Provided that if the
Termination Date is extended pursuant to Clause 4.9, the Balloon Instalment
shall remain unchanged but each Repayment Instalment shall be in an amount
equal to one-eighth of the Balloon Instalment.


 


8.3                               Repayment Dates.  The first
Repayment Instalment shall be repaid on the date falling 3 months after the
Termination Date, each subsequent Repayment Instalment shall be repaid at
3-monthly intervals thereafter and the Balloon Instalment, together with the
Final Repayment Instalment, shall be repaid on the date falling on the earlier
of (a) the tenth anniversary of the first Drawdown Date and (b) 30 June 2017.


 


8.4                               Final Repayment Date.  On the
final Repayment Date, the Borrower shall additionally pay to the Agent for the
account of the Creditor Parties all other sums then accrued or owing under any
Finance Document.


 


8.5                               Optional facility cancellation. 
The Borrower shall be entitled, upon giving to the Agent not less than 3
Business Days prior written notice (which notice shall be irrevocable), to
cancel, in whole or in part, and, if in part, by an amount not less than
$1,000,000 or a higher multiple of $1,000,000, the undrawn balance of the
Revolving Facility.  Upon such
cancellation taking effect on expiry of such notice the several obligations of
the Lenders to make their respective Commitments available in relation to the
portion of the Total Commitments to which such notice relates shall terminate
and the commitment fee referred to in Clause 20.1(a)) on such portion shall
cease to accrue.


 


8.6                               Voluntary prepayment.  Subject
to the following conditions, the Borrower may prepay, the whole or any part of
the Loan on the last day of an Interest Period in respect thereof.


 


8.7                               Conditions for voluntary prepayment. 
The conditions referred to in Clause 8.6 are that:


 


(a)                                  a partial prepayment shall be $1,000,000 or a multiple of
$1,000,000;


 


28





















 


(b)                                 the Agent has received from the Borrower at least 5 Business Days’
prior written notice specifying the amount to be prepaid and the date on which
the prepayment is to be made (such date to be the last day of an Interest
Period relative to the amount being so prepaid); and


 


(c)                                  the Borrower has provided evidence satisfactory to the Agent that
any consent required by the Borrower or any Security Party in connection with
the prepayment has been obtained and remains in force, and that any requirement
relevant to this Agreement which affects the Borrower or any Security Party has
been complied with.


 


8.8                               Effect of notice of prepayment. 
A prepayment notice may not be withdrawn or amended without the consent
of the Agent, given with the authority of the Majority Lenders, and the amount
specified in the prepayment notice shall become due and payable by the Borrower
on the date for prepayment specified in the prepayment notice.


 


8.9                               Notification of notice of prepayment.  The Agent shall notify the Lenders promptly
upon receiving a prepayment notice, and shall provide any Lender which so
requests with a copy of any document delivered by the Borrower under Clause
8.7(c).


 


8.10                        Mandatory prepayment.  The
Borrower shall be obliged to prepay the Relevant Amount if a Ship is sold or
becomes a Total Loss:


 


(a)                                  in the case of a sale, on or before the date on which the sale is
completed by delivery of that Ship to the buyer; or


 


(b)                                 in the case of a Total Loss, on the earlier of the date falling 150
days after the Total Loss Date and the date of receipt by the Security Trustee
of the proceeds of insurance relating to such Total Loss.


 


In
this Clause 8.10, “Relevant Amount” 
means an amount which, after giving credit for the amount of the
prepayment made pursuant to this Clause 8.10, results in the Security Cover
Ratio being equal to the higher of (i) the Security Cover Ratio maintained
immediately prior to the prepayment made pursuant to this Clause 8.10 and (ii)
the Security Cover Ratio referred to in Clause 15.1.


 


8.11                        “ALEXANDROS II” - mandatory prepayment.  If the Borrower draws down an Advance of
$48,000,000 in connection with the delivery of “ALEXANDROS II” in accordance
with Clause 4.2(c), the Borrower shall within 6 months from the Drawdown Date
of such Advance apply an amount of at least $19,300,000 in prepayment of the
Loan or provide to the Security Trustee additional security over an
unencumbered vessel whose Market Value and technical characteristics are, in
the reasonable opinion of the Majority Lenders, equivalent to any of the
Tranche C New Ships with such Security Interests being documented in such terms
as the Agent may, with the authorisation of the Majority Lenders, approve or
require.


 


8.12                         Amounts payable on prepayment. 
A prepayment shall be made together with accrued interest (and any other
amount payable under Clause 21 below or otherwise) in respect of the amount
prepaid and, if the prepayment is not made on the last day of an Interest
Period together with any sums payable under Clause 21.1(b) but without premium
or penalty.


 


8.13                        Application of partial prepayment. 
Each partial prepayment made after the Termination Date shall be applied
to reduce pro rata each Repayment Instalment and the Balloon Instalment.


 


8.14                        Reborrowing.


 


29





















 


(a)                                  No amount of the Term Loan prepaid may be reborrowed.


 


(b)                                 Subject to the terms of this Agreement, any amount of the Revolving
Facility repaid or prepaid may be reborrowed.


 


8.15                        Unwinding of Designated Transactions.  On or prior to any repayment or prepayment of
the Loan under this Clause 8 or any other provision of this Agreement, the
Borrower shall wholly or partially reverse, offset, unwind or otherwise
terminate one or more of the continuing Designated Transactions to the extent
necessary to ensure that the notional principal amount of the continuing
Designated Transactions thereafter remaining does not and will not in the
future (taking into account the scheduled amortisation) exceed the amount of
the Loan as reducing from time to time thereafter pursuant to Clause 8.2.


 


8.16                        Prepayment of Swap Benefit. 
If a Designated Transaction is terminated in circumstances where the
Swap Bank would be obliged to pay an amount to the Borrower under the Master
Agreement, the Borrower hereby agrees that such payment shall be applied in
prepayment of the Loan in accordance with Clause 8.13  and authorises the Swap Bank to pay such
amount to the Agent for such purpose.


 


9                                         CONDITIONS PRECEDENT


 


9.1                               Documents, fees and no default. 
Each Lender’s obligation to contribute to an Advance is subject to the
following conditions precedent:


 


(a)                                  that on or before the date of this Agreement, the Agent receives the
fees referred to in Clause 20.1 which are due and payable at that time;


 


(b)                                 that, on or before the service of the Drawdown Notice in respect of
the first Advance of Tranche A, the Agent receives the documents described in
Part A of Schedule 3 in form and substance satisfactory to the Agent and its
lawyers;


 


(c)                                  that, on or before the service of the Drawdown Notice in respect of
each Advance of Tranche B, the Agent receives the documents described in Part B
of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;


 


(d)                                 that, on or before the service of the Drawdown Notice in respect of
each Advance of Tranche C, the Agent receives the documents described in Part C
of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;


 


(e)                                  that both at the date of each Drawdown Notice and at each Drawdown
Date:


 


(i)                                     no Event of Default or Potential Event of Default has occurred and
is continuing or would result from the borrowing of the relevant Advance; and


 


(ii)                                  the representations and warranties in Clause 10 and those of the
Borrower or any Security Party which are set out in the other Finance Documents
would be true and not misleading if repeated on each of those dates with
reference to the circumstances then existing; and


 


(iii)                               none of the circumstances contemplated by Clause 5.5 has occurred
and is continuing;


 


(iv)                              there has been no material adverse change in the financial
condition, state of affairs or prospects of the Borrower or any Owner from that
applying at the date of this Agreement;


 


30





















 


(v)                                 the Borrower has entered into Designated Transactions with the Swap
Bank in order to hedge all the interest rate risk under this Agreement as at
the relevant Drawdown Date (immediately following the drawdown of the relevant Advance);
and


 


(vi)                              the Agent receives any fees referred to in Clause 20.1 which are due
and payable at that time;


 


(f)                                    that, if the ratio set out in Clause 15.1 were applied immediately
following the making of the relevant Advance, the Borrower would not be obliged
to provide additional security or prepay part of the Loan under that Clause;
and


 


(g)                                 that the Agent has received, and found to be acceptable to it, any
further opinions, consents, agreements and documents in connection with the
Finance Documents which the Agent may, with the authorisation of the Majority
Lenders, request by notice to the Borrower prior to the relevant Drawdown Date.


 


9.2                               Waiver of conditions precedent. 
If the Majority Lenders, at their discretion, permit an Advance to be
borrowed before certain of the conditions referred to in Clause 9.1 are
satisfied, the Borrower shall ensure that those conditions are satisfied within
5 Business Days after the relevant Drawdown Date (or such longer period as the
Agent may, with the authorisation of the Majority Lenders, specify).


 


10                                  REPRESENTATIONS AND WARRANTIES


 


10.1                        General.  The Borrower
represents and warrants to each Creditor Party as follows.


 


10.2                        Status.  The Borrower is a
limited partnership (comprised of a single general partner and multiple limited
partners) formed and validly existing and in good standing under the laws of
the Republic of Marshall Islands.


 


10.3                        Capital.  Following the IPO,
the Borrower’s capital will consist of [•]common units held by public unitholders, [•]subordinated units held by Capital Maritime & Trading Corp. and
a general partner interest held by Capital GP L.L.C.


 


10.4                        Corporate power.  The Borrower
(or, in the case of paragraphs (a) and (b), each Existing Owner) has the
corporate capacity, and has taken all corporate action and obtained all
consents necessary for it:


 


(a)                                  to own and register the Existing Ship owned by it under the relevant
Approved Flag;


 


(b)                                 to enter into, and perform its obligations under, the Existing
Charter to which it is a party;


 


(c)                                  to execute the Finance Documents to which the Borrower is a party;
and


 


(d)                                 to borrow under this Agreement, to enter into Designated
Transactions under the Master Agreement and to make all the payments
contemplated by, and to comply with, those Finance Documents to which the
Borrower is a party.


 


10.5                        Consents in force.  All the
consents referred to in Clause 10.4 remain in force and nothing has occurred
which makes any of them liable to revocation.


 


10.6                        Legal validity; effective Security Interests.  The Finance Documents to which the Borrower
is a party, do now or, as the case may be, will, upon execution and delivery
(and, where applicable, registration as provided for in the Finance Documents):


 


31


















 


(a)                                  constitute the Borrower’s legal, valid and binding obligations
enforceable against the Borrower in accordance with their respective terms; and


(b)                                 create legal, valid and binding Security Interests enforceable in
accordance with their respective terms over all the assets to which they, by
their terms, relate,


 


subject
to any relevant insolvency laws affecting creditors’ rights generally.


 


10.7                        No third party Security Interests. 
Without limiting the generality of Clause 10.6, at the time of the
execution and delivery of each Finance Document to which the Borrower is a
party:


 


(a)                                  the Borrower will have the right to create all the Security
Interests which that Finance Document purports to create; and


 


(b)                                 no third party will have any Security Interest (except for Permitted
Security Interests) or any other interest, right or claim over, in or in
relation to any asset to which any such Security Interest, by its terms,
relates.


 


10.8                        No conflicts.  The execution
by the Borrower of each Finance Document to which it is a party, and the
borrowing by the Borrower of the Loan, and its compliance with each Finance
Document to which it is a party will not involve or lead to a contravention of:


 


(a)                                  any law or regulation; or


 


(b)                                 the constitutional documents of the Borrower; or


 


(c)                                  any contractual or other obligation or restriction which is binding
on the Borrower or any of its assets.


 


10.9                        No withholding taxes.  All
payments which the Borrower is liable to make under the Finance Documents may
be made without deduction or withholding for or on account of any tax payable
under any law of any Pertinent Jurisdiction.


 


10.10                 No default.  No Event of
Default has occurred and is continuing.


 


10.11                 Information.  All information
which has been provided in writing by or on behalf of the Borrower or any
Security Party to any Creditor Party in connection with any Finance Document
satisfied the requirements of Clause 11.5; all audited and unaudited accounts
which have been so provided satisfied the requirements of Clause 11.7; and
there has been no material adverse change in the financial position or state of
affairs of the Borrower from that disclosed in the latest of those accounts.


 


10.12                 No litigation.  No legal or
administrative action involving the Borrower has been commenced or taken or, to
the Borrower’s knowledge, is likely to be commenced or taken.


 


10.13                 Validity and completeness of Existing Charters.


 


(a)                                  each Existing Charter constitutes valid, binding and enforceable
obligations of the parties thereto respectively in accordance with its terms;
and


 


(b)                                 no amendments or additions to any Existing Charter have been agreed
(other than those notified to the Agent prior to the date of this Agreement)
nor has any party thereto waived any of their respective rights under any Existing
Charter.


 


10.14                 Compliance with certain undertakings.  At the date of this Agreement, the Borrower
is in compliance with Clauses 11.2, 11.4, 11.9 and 11.14.


 


32





















 


10.15                 Taxes paid.  The Borrower has
paid all taxes applicable to, or imposed on or in relation to the Borrower and
its business.


 


10.16                 ISM and ISPS Code compliance. 
All requirements of the ISM Code and the ISPS Code as they relate to the
Borrower, any Owner, the Approved Manager and any Existing Ship have been
complied with.


 


10.17                 No money laundering.  Without
prejudice to the generality of Clause 4.3, in relation to the borrowing by the
Borrower of the Loan, the performance and discharge of its obligations and
liabilities under the Finance Documents, and the transactions and other
arrangements effected or contemplated by the Finance Documents to which the
Borrower is a party, the Borrower confirms that it 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).


 


11                                  GENERAL
UNDERTAKINGS


 


11.1                        General.  The Borrower
undertakes with each Creditor Party to comply with the following provisions of
this Clause 11 at all times during the Security Period except as the Agent may,
with the authorisation of the Majority Lenders, otherwise permit (which permission
shall not be unreasonably withheld in connection with Clause 11.13).


 


11.2                        Title; negative pledge and pari passu ranking.  The Borrower will:


 


(a)                                  hold the legal title to, and own the entire beneficial interest in,
each Owner free from all Security Interests and other interests and rights of
every kind, except for those created by the Finance Documents;


 


(b)                                 not create or permit to arise any Security Interest over any other
asset, present or future other than in the normal course of its business of
acquiring and financing vessels; and


 


(c)                                  procure that its liabilities under the Finance Documents to which it
is a party do and will rank at least pari passu with all its other present and
future unsecured liabilities, except for liabilities which are mandatorily
preferred by law.


 


11.3                        No disposal of assets.  The
Borrower will not transfer, lease or otherwise dispose of:


 


(a)                                  all or a substantial part of its assets, whether by one transaction
or a number of transactions, whether related or not if such transfer, lease or
disposal results in the Borrower being in breach of any of the financial
covenants referred to in Clause 12.5 or in the occurrence of an Event of
Default; or


 


(b)                                 any debt payable to it or any other right (present, future or
contingent right) to receive a payment, including any right to damages or
compensation.


 


11.4                        No other liabilities or obligations to be incurred.  The Borrower will not incur any liability or
obligation except liabilities and obligations under the Finance Documents and
liabilities or obligations reasonably incurred in the ordinary course of its
business of acquiring, operating and financing vessels, acquiring shares in
vessel owning companies and financing such acquisitions and all other matters
reasonably incidental thereto (which shall include, without limitation, but
subject to Clause 12.8, any Financial Indebtedness which may be incurred by the
Borrower in the ordinary course of its business).


 


33





















 


11.5                        Information provided to be accurate. 
All financial and other information which is provided in writing by or
on behalf of the Borrower under or in connection with any Finance Document will
be true and not misleading and will not omit any material fact or
consideration.


 


11.6                        Provision of financial statements. 
The Borrower will send or procure there are sent to the Agent:


 


(a)                                  as
soon as possible, but in no event later than 180 days after the end of each
financial year of the Borrower (commencing with the financial statements for
the year ending 31 December 2007) the audited
consolidated annual accounts of the Group  


 


(b)                                 as soon as possible, but in no event later than 90
days after the end of each 3-month period in each financial year of the
Borrower (commencing with the financial statements for the 3-month period
ending 31 March 2007):


 


(i)                                     the unaudited consolidated management accounts of the
Group for that 3-month period certified as to their correctness by the chief
financial officer of the Borrower; and


 


(c)                                  promptly after each request by the Agent, such
further financial information about the Borrower, the Ships and the Owners
(including, but not limited to, charter arrangements, Financial Indebtedness
and operating expenses) as the Agent may require.


 


11.7                        Form of financial statements.  All accounts (audited and unaudited)
delivered under Clause 11.6 will:


 


(a)                                  be prepared in accordance with all applicable laws
and US GAAP consistently applied;


 


(b)                                 give a true and fair view of the state of affairs of
the relevant person at the date of those accounts and of its profit for the
period to which those accounts relate; and


 


(c)                                  fully disclose or provide for all significant
liabilities of the relevant person and its subsidiaries.


 


11.8                        Creditor notices.  The Borrower will send to the Agent, at the
same time as they are despatched, copies of all communications which are
despatched to all of its creditors or to the whole or any class of them.


 


11.9                        Consents. 
The Borrower will maintain in force and promptly obtain or renew, and
will promptly send certified copies to the Agent of, all consents required:


 


(a)                                  for the Borrower to perform its obligations under any
Finance  Document to which it is party;


 


(b)                                 for the validity or enforceability of any Finance
Document to which it is party; and


 


(c)                                  for each Owner to continue to own and operate the
Ship owned by it,


and the Borrower will comply (or procure compliance as the
case may be) with the terms of all such consents.


 


34

















 


11.10                 Maintenance of Security Interests.  The Borrower will:


 


(a)                                  at its own cost, do all that it reasonably can to
ensure that any Finance Document validly creates the obligations and the
Security Interests which it purports to create; and


 


(b)                                 without limiting the generality of paragraph (a)
above, at its own cost, promptly register, file, record or enrol any Finance
Document with any court or authority in all Pertinent Jurisdictions, pay any
stamp, registration or similar tax in all Pertinent Jurisdictions in respect of
any Finance Document, give any notice or take any other step which, in the
opinion of the Majority Lenders, is or has become necessary or desirable for
any Finance Document to be valid, enforceable or admissible in evidence or to
ensure or protect the priority of any Security Interest which it creates.


 


11.11                 Notification of litigation.  The Borrower will provide the Agent with
details of any legal or administrative action involving the Borrower, any
Security Party, the Approved Manager or the Ships, their Earnings or their
Insurances as soon as such action is instituted, unless it is clear that the
legal or administrative action cannot be considered material in the context of
any Finance Document.


 


11.12                 No amendment to Master Agreement;  Transactions. 
The Borrower will not:


 


(a)                                  agree to any amendment or supplement to, or waive or
fail to enforce, the Master Agreement or any of its provisions; or


 


(b)                                 enter into any Transaction pursuant to the Master
Agreement except Designated Transactions.


 


11.13                 No amendment to the Existing
Charters.  The Borrower will ensure that
no Existing Owner shall agree to any material amendment or supplement to, or
waive or fail to enforce, any Existing Charter or any of its provisions


 


11.14                 Principal place of business.  The Borrower will maintain its place of
business, and keep its corporate documents and records, at the address stated
at Clause 28.2(a) and the Borrower will not establish nor do anything as a
result of which it would be deemed to have, a place of business in England or
the United States of America.


 


11.15                 Confirmation of no default.  The Borrower will, within 2 Business Days
after service by the Agent of a written request, serve on the Agent a notice
which is signed by 2 directors of the Borrower and which:


 


(a)                                  states that no Event of Default has occurred; or


 


(b)                                 states that no Event of Default has occurred, except
for a specified event or matter, of which all material details are given,


 


the Agent may serve requests under this Clause 11.15 from
time to time;  this Clause 11.15 does not
affect the Borrower’s obligations under Clause 11.16.


 


11.16                 Notification of default.  The Borrower will notify the Agent as soon as
the Borrower becomes aware of:


 


(a)                                  the occurrence of an Event of Default; or


 


(b)                                 any matter which indicates that an Event of Default
may have occurred,


 


and will thereafter keep the Agent fully up-to-date
with all developments.


 


35

















 


11.17                 Provision of further information.  The Borrower will, as soon as practicable
after receiving the request, provide the Agent with any additional financial or
other information relating:


 


(a)                                  to the Borrower, the Ships, their Insurances, their
Earnings or the Owners; or


 


(b)                                 to any other matter relevant to, or to any provision
of, a Finance Document,


which may be requested by the Agent, the Security Trustee or
any Lender at any time.


 


11.18                 General and administrative costs.  The Borrower shall ensure that the payment of
all the general and administrative costs of the Borrower and the Owners in
connection with the ownership and operation of the Ships (including, without
limitation, the payment of the management fees pursuant to the Management
Agreements) shall be fully subordinated to the payment obligations of the Borrower
and the Owners under this Agreement and the other Finance Documents throughout
the Security Period.


 


11.19                 Provision of copies of SEC filings.  The Borrower will send to the Agent copies of
all filings made with, and reports submitted to, the US Securities and Exchange
Commission promptly after making such filings or submitting such reports  Provided that any such filings or reports
which are made available to the public shall be considered to have been delivered
to the Agent., subject to the Borrower first having notified the Agent that
such filings or reports have been made or submitted.


 


11.20                 Provision of copies and translation of
documents.  The Borrower will supply the
Agent with a sufficient number of copies of the documents referred to above to
provide 1 copy for each Creditor Party; and if the Agent so requires in respect
of any of those documents, the Borrower will provide a certified English
translation prepared by a translator approved by the Agent.


 


11.21                 Hedging of interest rate risks.  The Borrower shall from time to time enter
into Designated Transactions with the Swap Bank in order to hedge all the
interest rate risk under this Agreement.


 


12                                  CORPORATE UNDERTAKINGS


 


12.1                        General. 
The Borrower also undertakes with each Creditor Party to comply with the
following provisions of this Clause 12 at all times during the Security Period
except as the Agent may, with the authorisation of the Majority Lenders,
otherwise permit (such permission not to be unreasonably withheld in the case
of Clause 12.3(d)).


 


12.2                        Maintenance of status.  The Borrower will maintain its separate
existence as a limited partnership and remain in good standing under the laws
of the Republic of the Marshall Islands.


 


12.3                        Negative undertakings.  The Borrower will not:


 


(a)                                  change the nature of its business; or


 


(b)                                 pay any dividend or make any other form of
distribution or effect any form of redemption, purchase or return of share
capital Provided that the Borrower may make a distribution if:


 


(i)                                     the Borrower has first submitted to the Agent a
Compliance Certificate (with supporting evidence satisfactory to the Agent)
which confirms that (A) no Event of Default has occurred or is continuing and
(B) the making of such distribution will not result in the Borrower being in breach
of any of the


 


36





















 


financial covenants referred to in Clause 12.5 or in the occurrence of
an Event of Default; and


 


(ii)                                  the Agent is satisfied that the Security
Cover Ratio referred to in Clause 15.1 is maintained at the time the
distribution is made;


 


(c)                                  provide any form of credit or financial assistance
to:


 


(i)                                     a person who is directly or indirectly interested in
the Borrower’s share or loan capital; or


 


(ii)                                  any company in or with which such a person
is directly or indirectly interested or connected,


 


or enter into any transaction with or involving such a
person or company on terms which are, in any respect, less favourable to the
Borrower than those which it could obtain in a bargain made at arms’ length  Provided that this shall not prevent or
restrict the Borrower from on-lending the Loan to the Owners;


 


(d)                                 allow any Owner to open or maintain any account with
any bank or financial institution except accounts with the Agent or any other
Creditor Party for the purposes of the Finance Documents or other accounts
already opened with other banks for the purposes of previous financings;


 


(e)                                  cause the common units of the Borrower to
cease to be listed on the Nasdaq National Market in New York unless the common
units of the Borrower are listed instead on any other internationally
recognised stock exchange acceptable to the Lenders, such acceptance not to be
unreasonably withheld.


 


12.4                        Subordination of rights of Borrower.  All rights which the Borrower at any time has
against any Owner or its assets shall be fully subordinated to the rights of
the Creditor Parties under the Finance Documents;  and in particular, the Borrower shall not
during the Security Period:


 


(a)                                  claim, or in a bankruptcy of any Owner prove for, any
amount payable to the Borrower by any Owner, whether in respect of the
on-lending of the Loan or any other transaction;


 


(b)                                 take or enforce any Security Interest for any such
amount; or


 


(c)                                  claim to set-off any such amount against any
amount payable by the Borrower to any Owner.


 


12.5                        Financial Covenants.  The Borrower shall ensure that at all times:


 


(a)                                  the ratio of Total Indebtedness less cash and cash
equivalents to the aggregate Market Value of all the Fleet Vessels shall not
exceed 0.725:1;


 


(b)                                 the ratio of EBITDA to Net Interest Expenses
(calculated on a trailing 4-quarter basis (or such other period as the Agent
(acting upon the instructions of the Majority Lenders) may otherwise reasonably
require)) shall be no less than 2:1; and


 


(c)                                  at all times the Borrower and all the other members
of the Group shall maintain immediately freely available and unencumbered bank
or cash deposits in an aggregate amount of not less than the product of
$500,000 and the number of Ships which are


 


37





















 


subject to a Mortgage at the relevant time, 50 per cent. of such
liquidity may be constituted by undrawn Commitments under the Revolving
Facility.


 


12.6                        Compliance Check.  Compliance with the undertakings contained in
Clause 12.5 shall be determined by reference to the unaudited consolidated
accounts for the first 3 financial quarters in each Financial Year of the
Borrower and for the fourth financial quarter in each Financial Year of the
Borrower, the audited consolidated accounts for that Financial Year of the
Group delivered to the Agent pursuant to this Agreement.  At the same time as it delivers those
consolidated accounts, the Borrower shall deliver to the Agent a Compliance
Certificate signed by the chief financial officer of the Borrower.


 


12.7                        Maintenance of ownership of Owners.  The Borrower shall remain the ultimate legal
owner of the entire issued and allotted share capital of each Owner which at
the relevant time is party to a Guarantee free from any Security Interest.


 


12.8                        Free Syndication market.  The Borrower shall not, and shall ensure that
no Owner and no member
of the Group shall, until the earlier of 30 September 2007 and the date on
which the Agent declares that the primary syndication of the Loan has closed:


 


(a)                                  syndicate or issue or attempt to syndicate or issue;
or


 


(b)                                 announce or authorise the announcement of the
syndication or issuance of; or


 


(c)                                  engage in discussions concerning the syndication or
issuance of,


 


 


any Financial Indebtedness with any banks or financial institutions in
the commercial banking market Provided that this shall not restrict the
Borrower from completing the IPO or arranging other financing during such
period.


 


13                                  INSURANCE


 


13.1                        General. 
The Borrower undertakes with each Creditor Party to procure that each
Owner will comply with the following provisions of this Clause 13 at all times
during the Security Period (after the Ship which is owned or to be owned by
that Owner has been delivered to it under the relevant Shipbuilding Contract)
except as the Agent may, with the authorisation of the Majority Lenders,
otherwise permit or except as provided in the Bareboat Charters with BP or any
future bareboat charter with BP.


 


13.2                        Maintenance of obligatory insurances.  The Borrower shall procure that each Owner
will keep the Ship owned by it insured at the expense of that Owner against:


 


(a)                                  fire and usual marine risks (including hull and
machinery and excess risks); and


 


(b)                                 war risks; and


 


(c)                                  protection and indemnity risks in excess of the limit
of cover for oil pollution liability risks included within the protection and
indemnity risks; and


 


(d)                                 any other risks against which the Majority Lenders
consider, having regard to practices and other circumstances prevailing at the
relevant time, it would in the opinion of the Majority Lenders be reasonable
for that Owner to insure and which are specified by the Security Trustee by
notice to that Owner.


 


13.3                        Terms of obligatory insurances.  The Borrower shall procure that each Owner
will effect such insurances:


 


(a)                                  in Dollars;


 


38





















 


(b)                                 in the case of fire and usual marine risks and war
risks, in such amounts as shall from time to time be approved by the Agent but
in any event in an amount not less than the greater of (i) the Market Value of
the Ship owned by that Owner for the time being and (ii) such amount, which
when aggregated with the amount for which any other Ship then subject to a
Mortgage is insured, is equal to 120 per cent. of the Loan; and


 


(c)                                  in the case of oil pollution liability risks, for an
aggregate amount equal to the highest level of cover from time to time
available under basic protection and indemnity club entry (with the
international group of protection and indemnity clubs) and the international
marine insurance market (currently $1,000,000,000);


 


(d)                                 in relation to protection and indemnity risks in
respect of the full value and tonnage of the Ship owned by that Owner;


 


(e)                                  on such terms as shall from time to time be approved
in writing by the Agent (including, without limitation, a blocking and trapping
clause); and


 


(f)                                    through approved brokers and with approved insurance
companies and/or underwriters or, in the case of war risks and protection and
indemnity risks, in approved war risks and protection and indemnity risks
associations.


 


13.4                        Further protections for the Creditor
Parties.  In addition to the terms set
out in Clause 13.3, the Borrower shall procure that the obligatory insurances
shall:


 


(a)                                  (except in relation to risks referred to in Clause
13.2(c)) name (or be amended to name) the Security Trustee as additional named
assured for its rights and interests, warranted no operational interest and
with full waiver of rights of subrogation against the Security Trustee, but
without the Security Trustee thereby being liable to pay (but having the right
to pay) premiums, calls or other assessments in respect of such insurance;


 


(b)                                 name the Security Trustee as sole loss payee with
such directions for payment as the Security Trustee may specify;


 


(c)                                  provide that all payments by or on behalf of the
insurers under the obligatory insurances to the Security Trustee shall be made
without set-off, counterclaim or deductions or condition whatsoever;


 


(d)                                 provide that the insurers shall waive, to the fullest
extent permitted by English law, their entitlement (if any) (whether by
statute, common law, equity, or otherwise) to be subrogated to the rights and
remedies of the Security Trustee in respect of any rights or interests (secured
or not) held by or available to the Security Trustee in respect of the Secured
Liabilities, until the Secured Liabilities shall have been fully repaid and
discharged, except that the insurers shall not be restricted by the terms of
this paragraph (d) from making personal claims against persons (other than the
Owners or any Creditor Party) in circumstances where the insurers have fully
discharged their liabilities and obligations under the relevant obligatory
insurances;


 


(e)                                  provide that such obligatory insurances shall be
primary without right of contribution from other insurances which may be
carried by the Security Trustee;


 


(f)                                    provide that the Security Trustee may make proof of
loss if the Owners fail to do so;  and


 


(g)                                 provide that if any obligatory insurance is
cancelled, or if any substantial change is made in the coverage which adversely
affects the interest of the Security Trustee, or if any obligatory insurance is
allowed to lapse for non-payment of premium, such cancellation, charge or
lapse shall not be effective with respect to the Security Trustee


 


39





















 


for 30 days (or 7 days in the case of war risks) after receipt by the
Security Trustee of prior written notice from the insurers of such
cancellation, change or lapse.


 


13.5                        Renewal of obligatory insurances.  The Borrower shall procure that each Owner
shall:


 


(a)                                  at least 21 days before the expiry of any obligatory
insurance:


 


(i)                                     notify the Security Trustee of the brokers (or other
insurers) and any protection and indemnity or war risks association through or
with whom that Owner proposes to renew that insurance and of the proposed terms
of renewal; and


 


(ii)                                  in case of any substantial change in
insurance cover, obtain the Majority Lenders’ approval to the matters referred
to in paragraph (i) above;


 


(b)                                 at least 14 days before the expiry of any obligatory
insurance, renew the insurance; and


 


(c)                                  procure that the approved brokers and/or the war
risks and protection and indemnity associations with which such a renewal is
effected shall promptly after the renewal notify the Security Trustee in
writing of the terms and conditions of the renewal.


 


13.6                        Copies of policies; letters of
undertaking.  The Borrower shall procure
that each Owner shall ensure that all approved brokers provide the Security
Trustee with copies of all policies relating to the obligatory insurances which
they effect or renew and of a letter or letters of undertaking in a form
required by the Majority Lenders and including undertakings by the approved
brokers that:


 


(a)                                  they will have endorsed on each policy, immediately
upon issue, a loss payable clause and a notice of assignment complying with the
provisions of Clause 13.4;


 


(b)                                 they will hold such policies, and the benefit of such
insurances, to the order of the Security Trustee in accordance with the said
loss payable clause;


 


(c)                                  they will advise the Security Trustee immediately of
any material change to the terms of the obligatory insurances;


 


(d)                                 they will notify the Security Trustee, not less than
14 days before the expiry of the obligatory insurances, in the event of their
not having received notice of renewal instructions from that Owner or its
agents and, in the event of their receiving instructions to renew, they will
promptly notify the Security Trustee of the terms of the instructions; and


 


(e)                                  they will not set off against any sum recoverable in
respect of a claim relating to the Ship owned by that Owner under such
obligatory insurances any premiums or other amounts due to them or any other
person whether in respect of that Ship or otherwise, they waive any lien on the
policies or, any sums received under them, which they might have in respect of
such premiums or other amounts, and they will not cancel such obligatory
insurances by reason of non-payment of such premiums or other amounts,
and will arrange for a separate policy to be issued in respect of that Ship
forthwith upon being so requested by the Security Trustee.


 


13.7                        Copies of certificates of entry.  The Borrower shall procure that each Owner
shall ensure that any protection and indemnity and/or war risks associations in
which the Ship owned by that Owner is entered provides the Security Trustee
with:


 


(a)                                  a certified copy of the certificate of entry for that
Ship; and


 


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(b)                                 a letter or letters of undertaking in such form as
may be required by the Majority Lenders; and


 


(c)                                  where required to be issued under the terms of
insurance/indemnity provided by that Owner’s protection and indemnity
association, a certified copy of each United States of America voyage quarterly
declaration (or other similar document or documents) made by that Owner in
relation to its Ship in accordance with the requirements of such protection and
indemnity association; and


 


(d)                                 a certified copy of each certificate of financial
responsibility for pollution by oil or other Environmentally Sensitive Material
issued by the relevant certifying authority in relation to that Ship.


 


13.8                        Deposit of original policies.  The Borrower shall procure that each Owner
shall ensure that all policies relating to obligatory insurances are deposited
with the approved brokers through which the insurances are effected or renewed.


 


13.9                        Payment of premiums.  The Borrower shall procure that each Owner
shall punctually pay all premiums or other sums payable in respect of the
obligatory insurances and produce all relevant receipts when so required by the
Security Trustee.


 


13.10                 Guarantees.  The Borrower shall procure that each Owner
shall ensure that any guarantees required by a protection and indemnity or war
risks association are promptly issued and remain in full force and effect.


 


13.11                 Restrictions on employment.  The Borrower shall procure that no Owner shall
employ the Ship owned by it, nor shall permit her to be employed, outside the
cover provided by any obligatory insurances.


 


13.12                 Compliance with terms of insurances.  The Borrower shall procure that no Owner
shall do or omit to do (or permits to be done or not to be done) any act or
thing which would or might render any obligatory insurance invalid, void,
voidable or unenforceable or render any sum payable thereunder repayable in
whole or in part; and in particular:


 


(a)                                  the Borrower shall procure that each Owner shall take
all necessary action and comply with all requirements which may from time to
time be applicable to the obligatory insurances, and (without limiting the
obligation contained in Clause 13.7(c) above) ensure that the obligatory insurances
are not made subject to any exclusions or qualifications to which the Security
Trustee has not given its prior approval;


 


(b)                                 the Borrower shall procure that no Owner shall make
any changes relating to the classification or classification society or manager
or operator of the Ship owned by it approved by the underwriters of the
obligatory insurances;


 


(c)                                  the Borrower shall procure that each Owner shall make
all quarterly or other voyage declarations which may be required by the
protection and indemnity risks association in which the Ship owned by it is
entered to maintain cover for trading to the United States of America and
Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990
or any other applicable legislation); and


 


(d)                                 the Borrower shall procure that no Owner shall employ
the Ship owned by it, nor shall allow it to be employed, otherwise than in
conformity with the terms and conditions of the obligatory insurances, without
first obtaining the consent of the insurers and complying with any requirements
(as to extra premium or otherwise) which the insurers specify.


 


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13.13                 Alteration to terms of insurances.  The Borrower shall procure that no Owner
shall either make or agree to any alteration to the terms of any obligatory
insurance or waive any right relating to any obligatory insurance without the
prior written consent of the Security Trustee.


 


13.14                 Settlement of claims.  The Borrower shall procure that no Owner
shall settle, compromise or abandon any claim under any obligatory insurance
for Total Loss or for a Major Casualty, and shall procure that the relevant
Owner shall do all things necessary and provide all documents, evidence and
information to enable the Security Trustee to collect or recover any moneys
which at any time become payable in respect of the obligatory insurances.


 


13.15                 Provision of copies of
communications.  The Borrower shall
procure that each Owner shall provide the Security Trustee, at the time of each
such communication, copies of all written communications between that Owner
and:


 


(a)                                  the approved brokers; and


 


(b)                                 the approved protection and indemnity and/or war
risks associations; and


 


(c)                                  the approved insurance companies and/or underwriters,
which relate directly or indirectly to:


 


(i)                                     that Owner’s obligations relating to the obligatory
insurances including, without limitation, all requisite declarations and
payments of additional premiums or calls; and


 


(ii)                                  any credit arrangements made between that
Owner and any of the persons referred to in paragraphs (a) or (b) above
relating wholly or partly to the effecting or maintenance of the obligatory
insurances.


 


13.16                 Provision of information.  In addition, the Borrower shall procure that
each Owner shall promptly provide the Security Trustee (or any persons which it
may designate) with any information which the Security Trustee (or any such
designated person) requests for the purpose of:


 


(a)                                  obtaining or preparing any report from an independent
marine insurance broker as to the adequacy of the obligatory insurances
effected or proposed to be effected; and/or


 


(b)                                 effecting, maintaining or renewing any such
insurances as are referred to in Clause 13.17 below or dealing with or
considering any matters relating to any such insurances,


 


and the Borrower shall procure that each Owner shall,
forthwith upon demand, indemnify the Security Trustee in respect of all
reasonable fees and other expenses incurred by or for the account of the
Security Trustee in connection with any such report as is referred to in
paragraph (a) above.


 


13.17                 Mortgagee’s interest, additional
perils.  The Security Trustee shall be
entitled from time to time to effect, maintain and renew all or any of the
following insurances in an amount equal to 120 per cent. of the Loan in the
case of the mortgagee’s interest marine insurance referred to in paragraph (a)
below and in an amount equal to 110 per cent. of the Loan in the case of the
mortgagee’s interest additional perils policy referred to in paragraph (b)
below, on such terms, through such insurers and generally in such manner as the
Majority Lenders may from time to time consider appropriate:


 


(a)                                  a mortgagee’s interest marine insurance in relation
to each Ship in such amount as the Security Trustee may consider appropriate,
providing for the indemnification of the


 


42





















 


Security Trustee for any losses under or in connection with any Finance
Document which directly or indirectly result from loss of or damage to any Ship
or a liability of any Ship or of any Owner, being a loss or damage which is
prima facie covered by an obligatory insurance but in respect of which there is
a non-payment (or reduced payment) by the underwriters by reason of, or on the
basis of an allegation concerning:


 


(i)                                     any act or omission on the part of an Owner, of any
operator, charterer, manager or sub-manager of the Ship owned by it or of any
officer, employee or agent of that Owner or of any such person, including any
breach of warranty or condition or any non-disclosure relating to such
obligatory insurance;


 


(ii)                                  any act or omission, whether deliberate,
negligent or accidental, or any knowledge or privity of an Owner, any other
person referred to in paragraph (i) above, or of any officer, employee or agent
of that Owner or of such a person, including the casting away or damaging of
the Ship owned by it and/or the Ship owned by it being unseaworthy; and/or


 


(iii)                               any other matter capable of being insured
against under a mortgagee’s interest marine insurance policy whether or not
similar to the foregoing;


 


(b)                                 a mortgagee’s interest additional perils policy in
relation to each Ship in such amount as the Security Trustee may consider
appropriate, providing for the indemnification of the Security Trustee against,
among other things, any possible losses or other consequences of any
Environmental Claim, including the risk of expropriation, arrest or any form of
detention of a Ship, the imposition of any Security Interest over a Ship and/or
any other matter capable of being insured against under a mortgagee’s interest
additional perils policy whether or not similar to the foregoing,


 


and the Borrower shall upon demand fully indemnify the
Security Trustee in respect of all premiums and other expenses which are
incurred in connection with or with a view to effecting, maintaining or
renewing any such insurance or dealing with, or considering, any matter arising
out of any such insurance.


 


13.18                 Review of insurance requirements.  The Majority Lenders shall be entitled to
review the requirements of this Clause 13 from time to time in order to take
account of any changes in circumstances after the date of this Agreement which
are, in the opinion of the Majority Lenders, significant and capable of
affecting the Borrower or any Ship and its or their insurance (including,
without limitation, changes in the availability or the cost of insurance
coverage or the risks to which the Owners may be subject), and may appoint
insurance consultants in relation to this review at the cost of the Borrower.


 


13.19                 Modification of insurance
requirements.  The Security Trustee shall
notify the Borrower of any proposed modification under Clause 13.18 to the
requirements of this Clause 13 which the Majority Lenders reasonably consider
appropriate in the circumstances, and such modification shall take effect on
and from the date it is notified in writing to the Borrower as an amendment to
this Clause 13 and shall bind the Borrower accordingly.


 


13.20                 Compliance with mortgagee’s
instructions.  The Security Trustee shall
be entitled (without prejudice to or limitation of any other rights which it
may have or acquire under any Finance Document) to require a Ship to remain at
any safe port or to proceed to and remain at any safe port designated by the
Security Trustee until the relevant Owner implements any amendments to the
terms of the obligatory insurances and any operational changes required as a
result of a notice served under Clause 13.19.


 


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14                                  SHIP COVENANTS


 


14.1                        General. 
The Borrower also undertakes with each Creditor Party to procure that
each Owner complies with the following provisions of this Clause 14 at all
times during the Security Period (after the Ship has been delivered to it under
the Shipbuilding Contract) except as the Agent, with the authorisation of the
Majority Lenders, may otherwise permit (in the case of the Clauses 14.2,
14.3(b) and 14.13(e), such permission not to be unreasonably withheld).


 


14.2                        Ship’s name and registration.  The Borrower shall procure that each Owner
shall keep the Ship owned by it registered in its name under the relevant
Approved Flag; shall not do or allow to be done anything as a result of which
such registration might be cancelled or imperilled; and shall not change the
name or port of registry of that Ship.


 


14.3                        Repair and classification.  The Borrower shall procure that each Owner
shall keep the Ship owned by it in a good and safe condition and state of
repair:


 


(a)                                  consistent with first-class ship ownership and
management practice;


 


(b)                                 so as to maintain the highest class with a first
class classification society acceptable to the Majority Lenders free of overdue
recommendations and conditions; and


 


(c)                                  so as to comply with all laws and regulations
applicable to vessels registered at ports in the relevant Approved Flag State
or to vessels trading to any jurisdiction to which that Ship may trade from
time to time, including but not limited to the ISM Code, the ISM Code Documentation
and the ISPS Code.


 


14.4                        Modification.  The Borrower shall procure that no Owner
shall make any modification or repairs to, or replacement of, any Ship or
equipment installed on her which would or might materially alter the structure,
type or performance characteristics of that Ship or materially reduce her
value.


 


14.5                        Removal of parts.  The Borrower shall procure that no Owner
shall remove any material part of any Ship, or any item of equipment installed
on, any Ship unless the part or item so removed is forthwith replaced by a
suitable part or item which is in the same condition as or better condition
than the part or item removed, is free from any Security Interest or any right
in favour of any person other than the Security Trustee and becomes on
installation on the relevant Ship the property of the relevant Owner and
subject to the security constituted by the Mortgage and the Deed of Covenant
Provided that an Owner may install equipment owned by a third party if the
equipment can be removed without any risk of damage to the Ship owned by it.


 


14.6                        Surveys. 
The Borrower shall procure that each Owner shall submit the Ship owned
by it regularly to all periodical or other surveys which may be required for
classification purposes and, if so required by the Majority Lenders provide the
Security Trustee, with copies of all survey reports.


 


14.7                        Technical Survey.  Without prejudice to the Owners’ obligations
pursuant to Clause 14.6, if the survey report to be delivered as a condition to
the drawdown of the Advance which shall be used to (inter alia) finance or
refinance a Ship (as referred to in the applicable paragraph of Schedule 3) is
not satisfactory to the Agent (acting reasonably), the Borrower shall procure
that the relevant Owner shall promptly following the request of the Agent (to
be made within 6 months of the Delivery Date of the relevant Ship or, as the
case may be, the Drawdown Date relative to the Advance which was used (inter
alia) to finance or refinance such Ship) submit the Ship owned by it for a
technical survey by an independent surveyor or surveyors appointed by the
Agent. All fees and expenses incurred in relation to the appointment 


 


44





















 


of the surveyor or surveyors and the preparation and issue of all
technical reports pursuant to this Clause 14.7 shall be for the account of the
Borrower.


 


14.8                        Inspection.  The Borrower shall procure that each Owner
shall permit the Security Trustee (by surveyors or other persons appointed by
it for that purpose) to board the Ship owned by it at all reasonable times to
inspect her condition or to satisfy themselves about proposed or executed
repairs and shall afford all proper facilities for such inspections  Provided that 
so long as a Ship is found to be in a satisfactory condition to the
Agent (acting reasonably) and no continuing Event of Default or Potential Event
of Default shall be in existence, the Borrower or the relevant Owner, as the
case may be, shall not be obliged to pay the fees and expenses incurred in
connection with the inspection of the relevant Ship more than once in any
twelve-month period.


 


14.9                        Prevention of and release from
arrest.  The Borrower shall procure that
each Owner shall promptly discharge:


 


(a)                                  all liabilities which give or may give rise to
maritime or possessory liens on or claims enforceable against the Ship owned by
it, the Earnings or the Insurances;


 


(b)                                 all taxes, dues and other amounts charged in respect
of the Ship owned by it, the Earnings or the Insurances; and


 


(c)                                  all other outgoings whatsoever in respect of the Ship
owned by it, the Earnings or the Insurances,


 


and, forthwith upon receiving notice of the arrest of the
Ship owned by it, or of her detention in exercise or purported exercise of any
lien or claim, the Borrower shall procure her release by providing bail or
otherwise as the circumstances may require.


 


14.10                 Compliance with laws etc.  The Borrower shall procure that each Owner
shall:


 


(a)                                  comply, or procure compliance with the ISM Code, all
Environmental Laws, the ISPS Code and all other laws or regulations relating to
the Ship owned by it, its ownership, operation and management or to the
business of that Owner;


 


(b)                                 not employ the Ship owned by it nor allow her
employment in any manner contrary to any law or regulation in any relevant
jurisdiction including, but not limited, to the ISM Code and the ISPS Code; and


 


(c)                                  in the event of hostilities in any part of the world
(whether war is declared or not), not cause or permit the Ship owned by it to
enter or trade to any zone which is declared a war zone by any government or by
the Ship’s war risks insurers unless the prior written consent of the Majority
Lenders has been given and that Owner has (at its expense) effected any
special, additional or modified insurance cover which the Majority Lenders may
require.


 


14.11                 Provision of information.  The Borrower shall procure that each Owner
shall promptly provide the Security Trustee with any information which the
Majority Lenders request regarding:


 


(a)                                  the Ship owned by it, her employment, position and
engagements;


 


(b)                                 the Earnings and payments and amounts due to the
master and crew of the Ship owned by it;


 


45





















 


(c)                                  any expenses incurred, or likely to be incurred, in
connection with the operation, maintenance or repair of the Ship owned by it
and any payments made in respect of that Ship;


 


(d)                                 any towages and salvages; and


 


(e)                                  its compliance or the compliance of the Ship owned by
it with the ISM Code and the ISPS Code,


 


                                                and,
upon the Security Trustee’s request, provide copies of any current charter
relating to the Ship owned by it and of any current charter guarantee, and
copies of the ISM Code Documentation and the ISCC.


 


14.12                 Notification of certain events.  The Borrower shall procure that each Owner
shall immediately notify the Security Trustee by letter of:


 


(a)                                  any casualty which is or is likely to be or to become
a Major Casualty;


 


(b)                                 any occurrence as a result of which the Ship owned by
it has become or is, by the passing of time or otherwise, likely to become a
Total Loss;


 


(c)                                  any requirement or recommendation made by any insurer
or classification society or by any competent authority which is not
immediately complied with;


 


(d)                                 any arrest or detention of the Ship owned by it, any
exercise or purported exercise of any lien on that Ship or her Earnings or any
requisition of that Ship for hire,


 


(e)                                  any intended dry docking of the Ship owned by it
where the cost of the dry docking will, or is likely to, exceed $500,000 (or
the equivalent in any other currency) in aggregate;


 


(f)                                    any Environmental Claim made against that Owner or in
connection with the Ship owned by it, or any Environmental Incident;


 


(g)                                 any claim for breach of the ISM Code or the ISPS Code
being made against that Owner, the Approved Manager or otherwise in connection
with the Ship owned by it; or


 


(h)                                 any other matter, event or incident, actual or
threatened, the effect of which will or could lead to the ISM Code or the ISPS
Code not being complied with,


 


and that Owner shall keep the Security Trustee advised in
writing on a regular basis and in such detail as the Security Trustee shall
require of that Owner’s, the Approved Manager’s or any other person’s response
to any of those events or matters.


 


14.13                 Restrictions on, appointment of
managers  etc.  The Borrower shall procure that no Owner
shall:


 


(a)                                  enter into any charter in relation to the Ship owned
by it under which more than 2 months’ hire (or the equivalent) is payable in
advance;


 


(b)                                 charter the Ship owned by it otherwise than on bona
fide arm’s length terms at the time when the Ship is fixed;


 


(c)                                  appoint a manager of the Ship owned by it other than
the Approved Manager;


 


(d)                                 de-activate or lay up the Ship owned by it; or


 


46





















 


(e)                                  put the Ship owned by it into the possession of any
person for the purpose of work being done upon her in an amount exceeding or
likely to exceed $750,000 (or the equivalent in any other currency) unless that
person has first given to the Security Trustee and in terms satisfactory to it
a written undertaking not to exercise any lien on that Ship or her Earnings for
the cost of such work or otherwise.


 


14.14                 Notice of Mortgage.  The Borrower shall procure that each Owner
shall keep the Mortgage registered against the Ship owned by it as a valid
first priority or, as the case may be, preferred mortgage, carry on board that
Ship a certified copy of the relevant Mortgage and place and maintain in a
conspicuous place in the navigation room and the Master’s cabin of that Ship a
framed printed notice stating that that Ship is mortgaged by that Owner to the
Security Trustee.


 


14.15                 Sharing of Earnings.  The Borrower shall procure that no Owner
shall:


 


(a)                                  enter into any agreement or arrangement for the
sharing of any Earnings;


 


(b)                                 enter into any agreement or arrangement for the
postponement of any date on which any Earnings are due; the reduction of the
amount of any Earnings or otherwise for the release or adverse alteration of
any right of that Owner to any Earnings; or


 


(c)                                  enter into any agreement or arrangement for the
release of, or adverse alteration to, any guarantee or Security Interest
relating to any Earnings.


 


14.16                 Time Charter Assignment.  If any Owner enters into any Charterparty or
a bareboat charter in respect of its Ship, the Borrower shall procure that the
relevant Owner shall, at the request of the Agent, execute in favour of the
Security Trustee a Charterparty Assignment or, in the case of a bareboat
charter, a Bareboat Charter Security Agreement, and shall deliver to the Agent
such other documents equivalent to those referred to at paragraphs 3, 4 and 5
of Part A of Schedule 3 hereof as the Agent may require.


 


14.17                 Bareboat Charterers.  The Borrower
may freely procure for any Owner to enter into any bareboat charter in respect
of its Ship with any of the charterers which is a party to an Existing Charter
or with a company that it is an affiliate or subsidiary of any charterer which
is a party to an Existing Charter  or any
other company which in the reasonable opinion of the Majority Lenders is
equivalent to any such charterer or any other company which may be approved by
the Majority Lenders (acting reasonably) and subject that such bareboat charterer
enters into and executes a Bareboat Charter Security Agreement except in
circumstances where the Majority Lenders (acting reasonably) may agree
otherwise.


 


15                                  SECURITY COVER


 


15.1                        Provision of additional security cover;
prepayment of Loan.  The Borrower
undertakes with each Creditor Party that, if the Agent notifies the Borrower
that at any time after the Drawdown Date of the first Advance to be drawn under
this Agreement the aggregate Market Value of the Ships subject to a Mortgage is
below 125 per cent. of the Loan, the Borrower will, within 1 month after the
date on which the Agent’s notice is served, either:


 


(a)                                  provide, or ensure that a third party provides,
additional security which, in the opinion of the Majority Lenders, has a net
realisable value at least equal to the shortfall and which consists of either
(i) cash pledged to the Security Trustee or (ii) a Security Interest
(including, but not limited to, a first priority or, as the case may be,
preferred mortgage over another vessel), covering such asset or assets and
documented in such terms as the Agent may, with authorisation from the Majority
Lenders, approve or require; or


 


47





















 


(b)                                 prepay in accordance with Clause 8 such part (at
least) of the Loan as will eliminate the shortfall.


 


15.2                        Meaning of additional security.  In Clause 15.1 “security” means a Security
Interest over an asset or assets (whether securing the Borrower’s liabilities
under the Finance Documents or a guarantee in respect of those liabilities), or
a guarantee, letter of credit or other security in respect of the Borrower’s
liabilities under the Finance Documents.


 


15.3                        Requirement for additional documents.  The Borrower shall not be deemed to have
complied with Clause 15.1(a) above until the Agent has received in connection
with the additional security certified copies of documents of the kinds
referred to in paragraphs 3, 4 and 5 of Schedule 3, Part A and such legal
opinions in terms acceptable to the Majority Lenders from such lawyers as they
may select.


 


15.4                        Valuation of Ships.  The market value of a Ship at any date is
that shown by the average of two valuations prepared:


 


(a)                                  as at a date not more than 14 days previously;


 


(b)                                 by 2 Approved Brokers, one appointed by the Borrower
and the other by the Agent;


 


(c)                                  with or without physical inspection of the relevant
Ship (as the Agent may require);


 


(d)                                 on the basis of a sale for prompt delivery for cash
on normal arm’s length commercial terms as between a willing seller and a
willing buyer, free of any existing charter or other contract of employment;
and


 


(e)                                  after deducting the estimated amount of the usual and
reasonable expenses which would be incurred in connection with the sale,


 


Provided  that if the difference between the 2
valuations obtained at any one time pursuant to this Clause 15.4 is greater
than 15 per cent. a valuation shall be
commissioned from a third Approved Broker appointed by the Agent.  Such valuation shall be conducted in
accordance with this Clause 15.4 and the Market Value of the Ship in such
circumstances shall be the average of the initial 2 valuations and the
valuation provided by the third Approved Broker.


 


15.5                        Value of additional security.  The net realisable value of any additional
security which is provided under Clause 15.1 and which consists of a Security
Interest over a vessel shall be that shown by a valuation complying with the
requirements of Clause 15.4.


 


15.6                        Valuations binding.  Any valuation under Clause 15.1(a), 15.4 or
15.5 shall be binding and conclusive as regards the Borrower, as shall be any
valuation which the Majority Lenders make of a security which does not consist
of or include a Security Interest.


 


15.7                        Provision of information.  The Borrower shall promptly provide the Agent
and any Approved Broker or expert acting under Clause 15.4 or 15.5 with any
information which the Agent or the Approved Broker or expert may request for
the purposes of the valuation; and, if the Borrower fails to provide the
information by the date specified in the request, the valuation may be made on
any basis and assumptions which the Approved Broker or the Majority Lenders (or
the expert appointed by them) consider prudent.


 


15.8                        Payment of valuation expenses.  Without prejudice to the generality of the
Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall,
on demand, pay the Agent the amount of the reasonable fees and expenses of any
Approved Broker or expert instructed by the Agent under this Clause and all
reasonable legal and other expenses incurred by any Creditor Party in
connection with any matter arising out of


 


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this Clause  Provided that (so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing) the Borrower shall not be obliged to pay such fees or
expenses in respect of more than one set of valuations of each Ship in any
twelve-month period.


 


15.9                        Frequency of valuations.  The Borrower acknowledges and agrees that the
Agent may commission valuations of the Ships at such times as the Majority
Lenders shall reasonably deem necessary and, in any event, not less often than
once during each 12-month period of the Security Period.


 


16                                  PAYMENTS AND CALCULATIONS


 


16.1                        Currency and method of payments.  All payments to be made:


 


(a)                                  by the Lenders to the Agent; or


 


(b)                                 by the Borrower to the Agent, the Security Trustee or
any Lender,


 


                                                under
a Finance Document shall be made to the Agent or to the Security Trustee, in
the case of an amount payable to it:


 


(i)                                     by not later than 11.00 a.m. (New York City time) on
the due date;


 


(ii)                                  in same day Dollar funds settled through
the New York Clearing House Interbank Payments System (or in such other Dollar
funds and/or settled in such other manner as the Agent shall specify as being
customary at the time for the settlement of international transactions of the
type contemplated by this Agreement);


 


(iii)                               in the case of an amount payable by a
Lender to the Agent or by the Borrower to the Agent or any Lender, to the
account of the Agent at JP Morgan Chase Bank, New York, SWIFT Code CHASUS33
(Account No 001-1-331808 under reference “Capital Product Partners L.P. -
US$370m Facility”), or to such other account with such other bank as the Agent
may from time to time notify to the Borrower and the other Creditor Parties;
and


 


(iv)                              in the case of an amount payable to the
Security Trustee, to such account as it may from time to time notify to the
Borrower and the other Creditor Parties.


 


16.2                        Payment on non-Business Day.  If any payment by the Borrower under a
Finance Document would otherwise fall due on a day which is not a Business Day:


 


(a)                                  the due date shall be extended to the next succeeding
Business Day; or


 


(b)                                 if the next succeeding Business Day falls in the next
calendar month, the due date shall be brought forward to the immediately
preceding Business Day,


 


and interest shall be payable during any extension under
paragraph (a) at the rate payable on the original due date.


 


16.3                        Basis for calculation of periodic
payments.  All interest and commitment
fee and any other payments under any Finance Document which are of an annual or
periodic nature shall accrue from day to day and shall be calculated on the
basis of the actual number of days elapsed and a 360 day year.


 


16.4                        Distribution of payments to Creditor
Parties.  Subject to Clauses 16.5, 16.6
and 16.7:


 


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(a)                                  any amount received by the Agent under a Finance
Document for distribution or remittance to a Lender or the Security Trustee
shall be made available by the Agent to that Lender or, as the case may be or
the Security Trustee by payment, with funds having the same value as the funds
received, to such account as the Lender or the Security Trustee may have
notified to the Agent not less than 5 Business Days previously; and


 


(b)                                 amounts to be applied in satisfying amounts of a
particular category which are due to the Lenders generally shall be distributed
by the Agent to each Lender pro rata to the amount in that category which is
due to it.


 


16.5                        Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance
Document, the Agent may, before making an amount available to a Lender, deduct
and withhold from that amount any sum which is then due and payable to the
Agent from that Lender under any Finance Document or any sum which the Agent is
then entitled under any Finance Document to require that Lender to pay on
demand.


 


16.6                        Agent only obliged to pay when monies received.  Notwithstanding any other provision of this
Agreement or any other Finance Document, the Agent shall not be obliged to make
available to the Borrower or any Lender any sum which the Agent is expecting to
receive for remittance or distribution to the Borrower or that Lender until the
Agent has satisfied itself that it has received that sum.


 


16.7                        Refund to Agent of monies not
received.  If and to the extent that the
Agent makes available a sum to the Borrower or a Lender, without first having
received that sum, the Borrower or (as the case may be) the Lender concerned
shall, on demand:


 


(a)                                  refund the sum in full to the Agent; and


 


(b)                                 pay to the Agent the amount (as certified by the
Agent) which will indemnify the Agent against any funding or other loss,
liability or expense incurred by the Agent as a result of making the sum
available before receiving it.


 


16.8                        Agent may assume receipt.  Clause 16.7 shall not affect any claim which
the Agent has under the law of restitution, and applies irrespective of whether
the Agent had any form of notice that it had not received the sum which it made
available.


 


16.9                        Creditor Party accounts.  Each Creditor Party shall maintain accounts
showing the amounts owing to it by the Borrower and each Security Party under
the Finance Documents and all payments in respect of those amounts made by the
Borrower and any Security Party.


 


16.10                 Agent’s memorandum account.  The Agent shall maintain a memorandum account
showing the amounts advanced by the Lenders and all other sums owing to the
Agent and the Security Trustee and each Lender from the Borrower and each
Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrower and any Security Party.


 


16.11                 Accounts prima facie evidence.  If any accounts maintained under Clauses 16.9
and 16.10 show an amount to be owing by the Borrower or a Security Party to a
Creditor Party, those accounts shall, absent manifest error, be prima facie
evidence that that amount is owing to that Creditor Party.


 


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17                                  APPLICATION OF RECEIPTS


 


17.1                        Normal order of application.  Except as any Finance Document may otherwise
provide, any sums which are received or recovered by any Creditor Party under
or by virtue of any Finance Document shall be applied:


 


(a)                                  FIRST: in or towards satisfaction of any amounts then due and
payable under the Finance Documents and the Master Agreement in the following
order and proportions:


 


(i)                                     first, in or towards satisfaction pro rata of all
amounts then due and payable to the Creditor Parties under the Finance
Documents other than those amounts referred to at paragraphs (ii) and (iii)
(including, but without limitation, all amounts payable by the Borrower under
Clauses 20, 21 and 22 of this Agreement or by the Borrower or any Security
Party under any corresponding or similar provision in any other Finance
Document or in the Master Agreement);


 


(ii)                                  secondly, in or towards satisfaction pro
rata of any and all amounts of interest or default interest payable to the
Creditor Parties under the Finance Documents 
and the Master Agreement (and, for this purpose, the expression
“interest” shall include any net amount which the Borrower shall have become
liable to pay or deliver under section 2(e) (Obligations) of the Master
Agreement but shall have failed to pay or deliver to the Swap Bank at the time
of application or distribution under this Clause 17); and


 


(iii)                               thirdly, in or towards satisfaction pro
rata of the Loan and the Swap Exposure (in the case of the latter, calculated
as at the actual Early Termination Date applying to each particular Designated
Transaction, or if no such Early Termination Date shall have occurred,
calculated as if an Early Termination Date occurred on the date of application
or distribution hereunder);


 


(b)                                 SECONDLY: in retention of an amount equal to any
amount not then due and payable under any Finance Document or the Master
Agreement but which the Agent, by notice to the Borrower, the Security Parties
and the other Creditor Parties, states in its opinion will or may become due
and payable in the future and, upon those amounts becoming due and payable, in
or towards satisfaction of them in accordance with the provisions of Clause
17.1(a); and


 


THIRDLY: any surplus shall be paid to the Borrower or to any
other person appearing to be entitled to it.


 


17.2                        Variation of order of application.  The Agent may, with the authorisation of the
Majority Lenders, by notice to the Borrower, the Security Parties and the other
Creditor Parties provide for a different manner of application from that set
out in Clause 17.1 either as regards a specified sum or sums or as regards sums
in a specified category or categories.


 


17.3                        Notice of variation of order of
application.  The Agent may give notices
under Clause 17.2 from time to time; and such a notice may be stated to apply
not only to sums which may be received or recovered in the future, but also to
any sum which has been received or recovered on or after the third Business Day
before the date on which the notice is served.


 


17.4                        Appropriation rights overriden.  This Clause 17 and any notice which the Agent
gives under Clause 17.2 shall override any right of appropriation possessed,
and any appropriation made, by the Borrower or any Security Party.


 


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18                                  APPLICATION OF EARNINGS


 


18.1                        Payment of Earnings.  The Borrower undertakes with each Creditor
Party to ensure that, throughout the Security Period (subject only to the
provisions of the General Assignments), all the Earnings of each Ship are paid
to the Earnings Account for that Ship and all payments by the Swap Bank to the
Borrower under a Designated Transaction are paid to the Swap Account.   Any monies standing to the credit of the
Earnings Accounts shall be freely available to the Owners subject to there not
being any Event of Default or Potential Event of Default in existence at the
relevant time.


 


18.2                        Retentions.  The Borrower undertakes with each Creditor
Party (only if the circumstances referred to in Clause 8.2(a) shall apply at
the relevant time) to ensure that no later than 3 Business Days after a
Relevant Distribution Declaration Date, there shall be transferred to the
Retention Account out of the aggregate Earnings received in the Earnings
Accounts, the repayment instalment falling due under Clause 8.2(a) at that
time.


 


18.3                        Application of Earnings.  The Borrower undertakes with the Lenders to
procure that money from time to time credited to, or for the time being standing
to the credit of, an Earnings Account shall, unless and until an Event of
Default or Potential Event of Default shall have occurred (whereupon the
provisions of Clause 17.1 shall be and become applicable), be available for
application in the following manner:


 


(a)                                  in or towards meeting the costs and expenses from
time to time incurred by or on behalf of the relevant Owner in connection with
the operation of the Ship owned by it;


 


(b)                                 in or towards making payments of all amounts due and payable by the
Borrower under this Agreement other than the payments of principal and interest
pursuant to Clauses 8.2 and 5.1;


(c)                                  in or towards making any transfers to the
Retention Account in accordance with Clause 18.2; and


 


(d)                                 as to any surplus from time to time arising
on an Earnings Account following application as aforesaid, to be paid to the
relevant Owner or to whomsoever it may direct.


 


18.4                        Application of retentions.  Until an Event of Default occurs, the Agent
shall on each due date for the payment of interest under this Agreement
distribute to the Lenders in accordance with Clause 16.4 so much of the then
balance on the Retention Account as equals any repayment instalment due in
accordance with Clause 8.2(a) on that interest payment date in discharge of the
Borrower’s liability for that repayment instalment.


 


18.5                        Interest accrued on Retention
Account.  Any credit balance on the
Retention Account shall bear interest at the rate from time to time offered by
the Agent to its customers for Dollar deposits of similar amounts and for
periods similar to those for which such balances appear to the Agent likely to
remain on the Retention Account.


 


18.6                        Release of accrued interest.  Interest accruing under Clause 18.5 shall be
released to the Borrower on each interest payment date unless an Event of
Default or a Potential Event of Default has occurred or the then credit balance
on the Retention Account is less than what would have been the balance had the
full amount required by Clause 18.2 been transferred in that and each previous
month.


 


52





















 


18.7                        Location of accounts.  The Borrower shall promptly:


 


(a)                                  comply or procure compliance by the Owners with any
requirement of the Agent as to the location or re-location of the Retention
Account, the Swap Account and the Earnings Accounts (or any of them); and


 


(b)                                 execute any documents which the Agent specifies to
create or maintain in favour of the Lenders a Security Interest over the
Retention Account, the Swap Account and the Earnings Accounts (or any of them).


 


19                                  EVENTS OF DEFAULT


 


19.1                        Events of Default.  An Event of Default occurs if:


 


(a)                                  the Borrower or any Security Party fails to pay when
due or (if so payable) on demand any sum payable under a Finance Document or
under any document relating to a Finance Document; or


 


(b)                                 any breach occurs of Clause 9.2, 11.2, 11.3, 12.2,
12.3, 12.5, 13.2, 13.3, 15.1 or 18.1; or


 


(c)                                  any breach by the Borrower or any Security Party
occurs of any provision of a Finance Document (other than a breach covered by
paragraphs (a) or (b) above) if, in the reasonable opinion of the Majority
Lenders, such default is capable of remedy, and such default continues
unremedied  20 days after written notice
from the Agent requesting action to remedy the same; or


 


(d)                                 (subject to any applicable grace period specified in
the Finance Document) any breach by the Borrower or any Security Party occurs
of any provision of a Finance Document (other than a breach covered by
paragraphs (a), (b) or (c) above); or


 


(e)                                  any representation, warranty or statement made by, or
by an officer of, the Borrower or a Security Party in a Finance Document or in
a Drawdown Notice or any other notice or document relating to a Finance
Document is untrue or misleading when it is made; or


 


(f)                                    any of the following occurs in relation to
any Financial Indebtedness of a Relevant Person exceeding $750,000 (or, in the
case of the Borrower, $5,000,000) (or, in either case, the equivalent in any
other currency) in aggregate:


 


(i)                                     any Financial Indebtedness of a Relevant Person is
not paid when due or, if so payable, on demand; or


 


(ii)                                  any Financial Indebtedness of a Relevant
Person becomes due and payable or capable of being declared due and payable
prior to its stated maturity date as a consequence of any event of default; or


 


(iii)                               a lease, hire purchase agreement or
charter creating any Financial Indebtedness of a Relevant Person is terminated
by the lessor or owner or becomes capable of being terminated as a consequence
of any termination event; or


 


(iv)                              any overdraft, loan, note issuance,
acceptance credit, letter of credit, guarantee, foreign exchange or other
facility, or any swap or other derivative contract or transaction, relating to
any Financial Indebtedness of a Relevant Person ceases to be available or
becomes capable of being terminated as a result of any event of default, or
cash cover is required, or becomes capable of being required, in respect of
such a facility as a result of any event of default; or


 


(v)                                 any Security Interest securing any Financial
Indebtedness of a Relevant Person becomes enforceable; or


 


53





















 


(g)                                 any of the following occurs in relation to a Relevant
Person:


 


(i)                                     a Relevant Person becomes, in the reasonable opinion of
the Majority Lenders, unable to pay its debts as they fall due; or


 


(ii)                                  any assets of a Relevant Person are
subject to any form of execution, attachment, arrest, sequestration or distress
in respect of a sum of, or sums aggregating, $1,000,000 or more or the
equivalent in another currency unless such execution, attachment, arrest,
sequestration or distress is dismissed, withdrawn, released or lifted within 10
Business Days of the occurrence of such event; or


 


(iii)                               any administrative or other receiver is
appointed over any asset of a Relevant Person; or


 


(iv)                              a Relevant Person makes any formal
declaration of bankruptcy or any formal statement to the effect that it is
insolvent or likely to become insolvent, or a winding up or administration
order is made in relation to a Relevant Person, or the members or directors of
a Relevant Person pass a resolution to the effect that it should be wound up,
placed in administration or cease to carry on business, save that this
paragraph does not apply to a fully solvent winding up of a Relevant Person
other than the Borrower or an Owner which is, or is to be, effected for the
purposes of an amalgamation or reconstruction previously approved by the
Majority Lenders and effected not later than 3 months after the commencement of
the winding up; or


 


(v)                                 a petition is presented in any Pertinent Jurisdiction
for the winding up or administration, or the appointment of a provisional
liquidator, of a Relevant Person unless the petition is being contested in good
faith and on substantial grounds and is dismissed or withdrawn within 30 days
of the presentation of the petition; or


 


(vi)                              a Relevant Person petitions a court, or
presents any proposal for, any form of judicial or non-judicial
suspension or deferral of payments, reorganisation of its debt (or certain of
its debt) or arrangement with all or a substantial proportion (by number or
value) of its creditors or of any class of them or any such suspension or
deferral of payments, reorganisation or arrangement is effected by court order,
contract or otherwise; or


 


(vii)                           any meeting of the members or directors of
a Relevant Person is summoned for the purpose of considering a resolution or
proposal to authorise or take any action of a type described in paragraphs
(iii), (iv), (v) or (vi) above; or


 


(viii)                        in a Pertinent Jurisdiction other than
England, any event occurs or any procedure is commenced which, in the opinion
of the Majority Lenders, is similar to any of the foregoing; or


 


(h)                                 the Borrower or any Owner ceases or suspends carrying
on its business or a part of its business which, in the opinion of the Majority
Lenders, is material in the context of this Agreement; or


 


(i)                                     it becomes unlawful in any Pertinent Jurisdiction or
impossible:


 


(i)                                     for the Borrower or any Security Party to discharge
any liability under a Finance Document or to comply with any other obligation
which the Majority Lenders consider material under a Finance Document; or


 


54





















 


(ii)                                  for the Agent, the Security Trustee or the
Lenders to exercise or enforce any right under, or to enforce any Security
Interest created by, a Finance Document; or


 


(j)                                     any official consent necessary to enable any Owner to
own, operate or charter the Ship owned by it or to enable any Owner or any
Security Party to comply with any provision which the Majority Lenders consider
material of a Finance Document is not granted, expires without being renewed,
is revoked or becomes liable to revocation or any condition of such a consent
is not fulfilled; or


 


(k)                                  if the common units of the Borrower cease to be
quoted on the Nasdaq National Market in New York or any other internationally
recognised stock exchange acceptable to the Lenders or if the whole of the
issued share capital of any Owner whose Ship is at the relevant time subject to
a Mortgage is not wholly owned by the Borrower; or


 


(l)                                     any provision which the Majority Lenders reasonably
consider material of a Finance Document proves to have been or becomes invalid
or unenforceable, or a Security Interest created by a Finance Document proves
to have been or becomes invalid or unenforceable or such a Security Interest
proves to have ranked after, or loses its priority to, another Security
Interest or any other third party claim or interest; or


 


(m)                               the Master Agreement is terminated, cancelled,
suspended, rescinded or revoked or otherwise ceases to remain in full force and
effect for any reason except with the consent of the Agent, acting with the
authorisation of the Majority Lenders; or


 


(n)                                 an Event of Default (as defined in Section 14 of the
Master Agreement) occurs which remains unremedied 5 Business Days after the
occurrence thereof; or


 


(o)                                 the security constituted by a Finance Document is in
any way imperilled or in jeopardy; or


 


(p)                                 any other event occurs or any other circumstances
arise or develop including, without limitation:


 


(i)                                     a material adverse change in the financial position,
state of affairs or prospects of the Borrower or the Owners; or


 


(ii)                                  any accident or other event involving a
Ship or another vessel owned, chartered or operated by a Relevant Person,


 


in the light of which the Majority Lenders reasonably
consider that there is a significant risk that any Security Party is, or will
later become, unable to discharge its liabilities under the Finance Documents
as they fall due.


 


19.2                        Actions following an Event of
Default.  On, or at any time after, the
occurrence of an Event of Default:


 


(a)                                  the Agent may, and if so instructed by the Majority
Lenders, the Agent shall:


 


(i)                                     serve on the Borrower a notice stating that the
Commitments and all other obligations of each Lender to the Borrower under this
Agreement are terminated; and/or


 


(ii)                                  serve on the Borrower a notice stating
that the Loan, all accrued interest and all other amounts accrued or owing
under this Agreement are immediately due and payable or are due and payable on
demand; and/or


 


55





















 


(iii)                               take any other action which, as a result
of the Event of Default or any notice served under paragraph (i) or (ii) above,
the Agent and/or the Lenders are entitled to take under any Finance Document or
any applicable law; and/or


 


(b)                                 the Security Trustee may, and if so instructed by the
Agent, acting with the authorisation of the Majority Lenders, the Security
Trustee shall take any action which, as a result of the Event of Default or any
notice served under paragraph (a) (i) or (ii) above, the Security Trustee, the
Agent and/or the Lenders are entitled to take under any Finance Document or any
applicable law.


 


19.3                        Termination of Commitments.  On the service of a notice under paragraph
(a)(i) of Clause 19.2, the Commitments and all other obligations of each Lender
to the Borrower under this Agreement shall terminate.


 


19.4                        Acceleration of Loan.  On the service of a notice under paragraph
(a)(ii) of Clause 19.2, the Loan, all accrued interest and all other amounts
accrued or owing from the Borrower or any Security Party under this Agreement
and every other Finance Document shall become immediately due and payable or,
as the case may be, payable on demand.


 


19.5                        Multiple notices; action without
notice.  The Agent may serve notices
under paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different
dates and it and/or the Security Trustee may take any action referred to in
that Clause if no such notice is served or simultaneously with or at any time
after the service of both or either of such notices.


 


19.6                        Notification of Creditor Parties and
Security Parties.  The Agent shall send to
each Lender, the Security Trustee and each Security Party a copy or the text of
any notice which the Agent serves on the Borrower under Clause 19.2; but the
notice shall become effective when it is served on the Borrower, and no failure
or delay by the Agent to send a copy or the text of the notice to any other
person shall invalidate the notice or provide the Borrower or any Security
Party with any form of claim or defence.


 


19.7                        Lender’s rights unimpaired.  Nothing in this Clause shall be taken to impair
or restrict the exercise of any right given to individual Lenders under a
Finance Document or the general law; and, in particular, this Clause is without
prejudice to Clause 3.1.


 


19.8                        Exclusion of Creditor Party
Liability.  No Creditor Party, and no receiver
or manager appointed by the Security Trustee, shall have any liability to the
Borrower or a Security Party:


 


(a)                                  for any loss caused by an exercise of rights under,
or enforcement of a Security Interest created by, a Finance Document or by any
failure or delay to exercise such a right or to enforce such a Security
Interest; or


 


(b)                                 as mortgagee in possession or otherwise, for any
income or principal amount which might have been produced by or realised from
any asset comprised in such a Security Interest or for any reduction (however
caused) in the value of such an asset,


 


except that this does not exempt a Creditor Party or a
receiver or manager from liability for losses shown to have been caused by the
gross negligence or the wilful misconduct of such Creditor Party’s own officers
and employees or ( as the case may be) such receiver’s or manager’s own
partners or employees.


 


19.9                        Relevant Persons.  In this Clause 19 “a Relevant Person” means
the Borrower, an Owner and any company which is a subsidiary of the Borrower or
an Owner.


 


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19.10                 Interpretation.  In Clause 19.1(f) references to an event of
default or a termination event include any event, howsoever described, which is
similar to an event of default in a facility agreement or a termination event
in a finance lease; and in Clause 19.1(g) “petition” includes an application.


 


20                                  FEES AND EXPENSES


 


20.1                        Arrangement, agency and commitment
fees.  The Borrower shall pay to the
Agent:


 


(a)                                  a commitment fee for distribution among the Lenders
pro rata to their Commitments at the rate of 0.20 per cent. per annum on the
amount of the Total Commitments less the amount of the Loan for the period from
(and including) the date of this Agreement up to and including the Termination
Date, such fee to be paid quarterly in arrears and on the last day of such
period; and


 


(b)                                 arrangement and agency fees as are referred to in the
Fee Letter, such fees to be in such amount and to be payable at the times and
in the manner referred to in the Fee Letter.


 


20.2                        Costs of negotiation, preparation
etc.  The Borrower shall pay to the Agent
on its demand the amount of all expenses incurred by the Agent or the Security
Trustee in connection with the negotiation, preparation, execution or
registration of any Finance Document or any related document (including, for
the avoidance of doubt, any expenses incurred by the Lenders in obtaining the
legal opinions referred to in Schedule 3) or with any transaction contemplated
by a Finance Document or a related document.


 


20.3                        Costs of variations, amendments,
enforcement etc.  The Borrower shall pay
to the Agent, on the Agent’s demand, the amount of all expenses incurred by a
Lender in connection with:


 


(a)                                  any amendment or supplement to a Finance Document, or
any proposal for such an amendment to be made;


 


(b)                                 any consent or waiver by the Lenders, the Majority
Lenders or the Lender concerned under or in connection with a Finance Document,
or any request for such a consent or waiver;


 


(c)                                  the valuation of any security provided or offered
under Clause 15 or any other matter relating to such security;


 


(d)                                 where the Agent, in its absolute opinion, considers
that there has been a material change to the insurances in respect of any Ship,
the review of the insurances or any Ship pursuant to Clause 13.18; and


 


(e)                                  any step taken by any Lender concerned with a view to
the protection, exercise or enforcement of any right or Security Interest
created by a Finance Document or for any similar purpose.


 


There shall be recoverable under paragraph (d) the full
amount of all legal expenses, whether or not such as would be allowed under
rules of court or any taxation or other procedure carried out under such rules.


 


20.4                        Documentary taxes.  The Borrower shall promptly pay any tax
payable on or by reference to any Finance Document, and shall, on the Agent’s
demand, fully indemnify each Creditor Party against any liabilities and
expenses resulting from any failure or delay by the Borrower to pay such a tax.


 


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20.5                        Certification of amounts.  A notice which is signed by two officers of a
Creditor Party, which states that a specified amount, or aggregate amount, is
due to that Creditor Party under this Clause 20 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of which
the amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.


 


21                                  INDEMNITIES


 


21.1                        Indemnities regarding borrowing and
repayment of Loan.  The Borrower shall
fully indemnify the Agent and each Lender on the Agent’s demand and the
Security Trustee on its demand in respect of all expenses, liabilities and
losses which are incurred by that Creditor Party, or which that Creditor Party
reasonably and with due diligence estimates that it will incur, as a result of
or in connection with:


 


(a)                                  an Advance not being borrowed on the date specified
in the Drawdown Notice for any reason other than a default by the Lender
claiming the indemnity;


 


(b)                                 the receipt or recovery of all or any part of the
Loan or an overdue sum otherwise than on the last day of an Interest Period or
other relevant period;


 


(c)                                  any failure (for whatever reason) by the Borrower to
make payment of any amount due under a Finance Document on the due date or, if
so payable, on demand (after giving credit for any default interest paid by the
Borrower on the amount concerned under Clause 7); and


 


(d)                                 the occurrence and/or continuance of an Event of
Default or a Potential Event of Default and/or the acceleration of repayment of
the Loan under Clause 19,


 


and in respect of any tax (other than tax on its overall net
income) for which a Creditor Party is liable in connection with any amount paid
or payable to that Creditor Party (whether for its own account or otherwise)
under any Finance Document.


 


21.2                        Breakage costs.  Without limiting its generality, Clause 21.1
covers any liability, expense or loss, including a loss of a prospective
profit, incurred by a Lender:


 


(a)                                  in liquidating or employing deposits from third
parties acquired or arranged to fund or maintain all or any part of its
Contribution and/or any overdue amount (or an aggregate amount which includes
its Contribution or any overdue amount); and


 


(b)                                 in terminating, or otherwise in connection with, any
interest and/or currency swap or any other transaction entered into (whether
with another legal entity or with another office or department of the Lender
concerned) to hedge any exposure arising under this Agreement or that part
which the Lender concerned determines is fairly attributable to this Agreement
of the amount of the liabilities, expenses or losses (including losses of
prospective profits) incurred by it in terminating, or otherwise in connection
with, a number of transactions of which this Agreement is one.


 


21.3                        Miscellaneous indemnities.  The Borrower shall fully indemnify the Agent
and the Security Trustee severally on their respective demands in respect of
all claims, demands, proceedings, liabilities, taxes, losses and expenses of
every kind (“liability items”) which may be made or brought against, or
incurred by, the Agent or the Security Trustee, in any country, in relation to:


 


(a)                                  any action taken, or omitted or neglected to be taken,
under or in connection with any Finance Document by the Agent, the Security
Trustee or any other Creditor Party or by any receiver appointed under a
Finance Document; and


 


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(b)                                 any other event, matter or question which occurs or
arises at any time during the Security Period and which has any connection
with, or any bearing on, any Finance Document, any payment or other transaction
relating to a Finance Document or any asset covered (or previously covered) by
a Security Interest created (or intended to be created) by a Finance Document,


 


other than liability items which are shown to have been
caused by the gross negligence or the wilful misconduct of the Agent’s or (as
the case may be) the Security Trustee’s own officers or employees.


 


21.4                        Extension of indemnities; environmental
indemnity.  Without prejudice to its
generality, Clause 21.3 covers:


 


(a)                                  any matter which would be covered by Clause 20.3 if
any of the references in that Clause to a Lender were a reference to the Agent
or (as the case may be) to the Security Trustee; and


 


(b)                                 any liability items which arise, or are asserted,
under or in connection with any law relating to safety at sea, pollution or the
protection of the environment, the ISM Code or the ISPS Code.


 


21.5                        Currency indemnity.  If any sum due from the Borrower or any
Security Party to a Creditor Party under a Finance Document or under any order
or judgment relating to a Finance Document has to be converted from the currency
in which the Finance Document provided for the sum to be paid (the “Contractual
Currency”) into another currency (the “Payment Currency”) for the purpose of:


 


(a)                                  making or lodging any claim or proof against the
Borrower or any Security Party, whether in its liquidation, any arrangement
involving it or otherwise; or


 


(b)                                 obtaining an order or judgment from any court or
other tribunal; or


 


(c)                                  enforcing any such order or judgment,


 


the Borrower shall indemnify the Creditor Party concerned
against the loss arising when the amount of the payment actually received by
that Creditor Party is converted at the available rate of exchange into the
Contractual Currency.


 


In this Clause 21.5, the “available rate of exchange” means
the rate at which the Creditor Party concerned is able at the opening of
business (London time) on the Business Day after it receives the sum concerned
to purchase the Contractual Currency with the Payment Currency.


 


This Clause 21.5 creates a separate liability of the
Borrower which is distinct from its other liabilities under the Finance
Documents and which shall not be merged in any judgment or order relating to
those other liabilities.


 


21.6                        Certification of amounts.  A notice which is signed by 2 officers of a
Creditor Party, which states that a specified amount, or aggregate amount, is
due to that Creditor Party under this Clause 21 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of which
the amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.


 


21.7                        Sums deemed due to a Lender.  For the purposes of this Clause 21, a sum
payable by the Borrower to the Agent or the Security Trustee for distribution
to a Lender shall be treated as a sum due to that Lender.


 


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22                                  NO SET-OFF OR TAX DEDUCTION


 


22.1                        No deductions.  All amounts due from the Borrower under a
Finance Document shall be paid:


 


(a)                                  without any form of set-off, cross-claim or
condition; and


 


(b)                                 free and clear of any tax deduction except a tax
deduction which the Borrower is required by law to make.


 


22.2                        Grossing-up for taxes.  If the Borrower is required by law to make a
tax deduction from any payment:


 


(a)                                  the Borrower shall notify the Agent as soon as it
becomes aware of the requirement;


 


(b)                                 the Borrower shall pay the tax deducted to the
appropriate taxation authority promptly, and in any event before any fine or
penalty arises; and


 


(c)                                  the amount due in respect of the payment shall be
increased by the amount necessary to ensure that each Creditor Party receives
and retains (free from any liability relating to the tax deduction) a net
amount which, after the tax deduction, is equal to the full amount which it
would otherwise have received.


 


22.3                        Evidence of payment of taxes.  Within 1 month after making any tax
deduction, the Borrower shall deliver to the Agent documentary evidence
satisfactory to the Agent that the tax had been paid to the appropriate taxation
authority.


 


22.4                        Exclusion of tax on overall net
income.  In this Clause 22 “tax
deduction” means any deduction or withholding for or on account of any present
or future tax except tax on a Creditor Party’s overall net income.


 


23                                  ILLEGALITY, ETC


 


23.1                        Illegality.  This Clause 23 applies if a Lender (the
“Notifying Lender”) notifies the Agent that it has become, or will with effect
from a specified date, become:


 


(a)                                  unlawful or prohibited as a result of the
introduction of a new law, an amendment to an existing law or a change in the
manner in which an existing law is or will be interpreted or applied; or


 


(b)                                 contrary to, or inconsistent with, any regulation,


 


for the Notifying Lender to maintain or give effect to any
of its obligations under this Agreement in the manner contemplated by this
Agreement.


 


23.2                        Notification of illegality.  The Agent shall promptly notify the Borrower,
the Security Parties, the Security Trustee and the other Lenders of the notice
under Clause 23.1 which the Agent receives from the Notifying Lender.


 


23.3                        Prepayment; termination of
Commitment.  On the Agent notifying the
Borrower under Clause 23.2, the Notifying Lender’s Commitment shall terminate;
and thereupon or, if later, on the date specified in the Notifying Lender’s
notice under Clause 23.1 as the date on which the notified event would become
effective the Borrower shall prepay the Notifying Lender’s Contribution in
accordance with Clause 8.


 


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24                                  INCREASED COSTS


 


24.1                        Increased costs.  This Clause 24 applies if a Lender (the
“Notifying Lender”) notifies the Agent that the Notifying Lender considers that
as a result of:


 


(a)                                  the introduction or alteration after the date of this
Agreement of a law or an alteration after the date of this Agreement in the manner
in which a law is interpreted or applied (disregarding any effect which relates
to the application to payments under this Agreement of a tax on the Lender’s
overall net income); or


 


(b)                                 the effect of complying with any regulation
(including any which relates to capital adequacy or liquidity controls or which
affects the manner in which the Notifying Lender allocates capital resources to
its obligations under this Agreement including, without limitation, the
implementation of any regulations which may replace those set out in the
statement of the Basle Committee on Banking Regulations and Supervisory
Practices dated July 1998 and entitled “International Convergence of Capital
Measurement and Capital Structures”) which is introduced, or altered, or the interpretation
or application of which is altered, after the date of this Agreement,


 


is that the Notifying Lender (or a parent company of it) has
incurred or will incur an “increased cost”, that is to say,:


 


(i)                                     an additional or increased cost incurred as a result
of, or in connection with, the Notifying Lender having entered into, or being a
party to, this Agreement or a Transfer Certificate, of funding or maintaining
its Commitment or Contribution or performing its obligations under this
Agreement, or of having outstanding all or any part of its Contribution or
other unpaid sums; or


 


(ii)                                  a reduction in the amount of any payment
to the Notifying Lender under this Agreement or in the effective return which
such a payment represents to the Notifying Lender or on its capital;


 


(iii)                               an additional or increased cost of funding
all or maintaining all or any of the advances comprised in a class of advances
formed by or including the Notifying Lender’s Contribution or (as the case may
require) the proportion of that cost attributable to the Contribution; or


 


(iv)                              a liability to make a payment, or a return
foregone, which is calculated by reference to any amounts received or
receivable by the Notifying Lender under this Agreement,


 


but not an item attributable to a change in the rate of tax
on the overall net income of the Notifying Lender (or a parent company of it)
or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22.


 


For the purposes of this Clause 24.1 the Notifying Lender
may in good faith allocate or spread costs and/or losses among its assets and
liabilities (or any class thereof) on such basis as it considers appropriate.


 


24.2                        Notification to Borrower of claim for
increased costs.  The Agent shall
promptly notify the Borrower and the Security Parties of the notice which the
Agent received from the Notifying Lender under Clause 24.1.


 


24.3                        Payment of increased costs.  The Borrower shall pay to the Agent, on the
Agent’s demand, for the account of the Notifying Lender the amounts which the
Agent from time to time notifies the Borrower that the Notifying Lender has
specified to be necessary to compensate the Notifying Lender for the increased
cost.


 


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24.4                        Notice of prepayment.  If the Borrower is not willing to continue to
compensate the Notifying Lender for the increased cost under Clause 24.3, the
Borrower may give the Agent not less than 15 days’ notice of its intention to
prepay the Notifying Lender’s Contribution at the end of an Interest Period.


 


24.5                        Prepayment; termination of
Commitment.  A notice under Clause 24.4
shall be irrevocable; the Agent shall promptly notify the Notifying Lender of
the Borrower’s notice of intended prepayment; and:


 


(a)                                  on the date on which the Agent serves that notice,
the Commitment of the Notifying Lender shall be cancelled; and


 


(b)                                 on the date specified in its notice of intended
prepayment, the Borrower shall prepay (without premium or penalty) the
Notifying Lender’s Contribution, together with accrued interest thereon at the
applicable rate plus the Margin.


 


24.6                        Application of prepayment.  Clause 8 shall apply in relation to the
prepayment.


 


25                                  SET-OFF


 


25.1                        Application of credit balances.  Each Creditor Party may following the
occurrence of an Event of Default and without prior notice:


 


(a)                                  apply any balance (whether or not then due) which at
any time stands to the credit of any account in the name of the Borrower at any
office in any country of that Creditor Party in or towards satisfaction of any
sum then due from the Borrower to that Creditor Party under any of the Finance
Documents; and


 


(b)                                 for that purpose:


 


(i)                                     break, or alter the maturity of, all or any part of a
deposit of the Borrower;


 


(ii)                                  convert or translate all or any part of a
deposit or other credit balance into Dollars; and


 


(iii)                               enter into any other transaction or make
any entry with regard to the credit balance which the Creditor Party concerned
considers appropriate.


 


25.2                        Existing rights unaffected.  No Creditor Party shall be obliged to
exercise any of its rights under Clause 25.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party is
entitled (whether under the general law or any document).


 


25.3                        Sums deemed due to a Lender.  For the purposes of this Clause 25, a sum
payable by the Borrower to the Agent or the Security Trustee for distribution
to, or for the account of, a Lender shall be treated as a sum due to that Lender;
and each Lender’s proportion of a sum so payable for distribution to, or for
the account of, the Lenders shall be treated as a sum due to such Lender.


 


26                                  TRANSFERS AND CHANGES IN LENDING
OFFICES


 


26.1                        Transfer by Borrower.  The Borrower may not, without the consent of
the Agent, given on the instructions of all the Lenders:


 


(a)                                  transfer any of its rights or obligations under any
Finance Document; or


 


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(b)                                 enter into any merger, de-merger or other reorganisation,
or carry out any other act, as a result of which any of its rights or
liabilities would vest in, or pass to, another person.


 


26.2                        Transfer by a Lender.  Subject to Clause 26.4 and the other terms
and conditions of this Clause 26.2, a Lender (the “Transferor Lender”) may at
any time cause:


 


(a)                                  its rights in respect of all or part of its
Contribution; or


 


(b)                                 its obligations in respect of all or part of its
Commitment; or


 


(c)                                  a combination of (a) and (b),


 


to be (in the case of its rights) transferred to, or (in the
case of its obligations) assumed by, another bank, financial institution,
pension scheme or single purpose vehicle (a “Transferee Lender”) by delivering
to the Agent a completed certificate in the form set out in Schedule 4 with any
modifications approved or required by the Agent (a “Transfer Certificate”)
executed by the Transferor Lender and the Transferee Lender.


 


However any rights and obligations of the Transferor Lender
in its capacity as Agent or Security Trustee will have to be dealt with
separately in accordance with the Agency and Trust Agreement.


 


A transfer pursuant to this Clause 26.2 shall:


 


(i)                                     require the prior written the consent of the Agent;


 


(ii)                                  the Contribution or Commitment (or the
combination of the two) being transferred by the Transferor Lender to the
Transferee Lender shall not be less than $30,000,000;


 


(iii)                               be effected without the consent of, but
with notice to, the Borrower and without any cost to the Borrower:


 


(A)                              following the occurrence of an Event of Default;


 


(B)                                if such transfer is to a subsidiary or any other
company or financial institution which is in the same ownership or control as
the Transferor Lender; and


 


(iv)                              require the consent of the Borrower (such
consent not to be unreasonably withheld or delayed) in all other circumstances.


 


26.3                        Transfer Certificate, delivery and
notification.  As soon as reasonably
practicable after a Transfer Certificate is delivered to the Agent, it shall
(unless it has reason to believe that the Transfer Certificate may be
defective):


 


(a)                                  sign the Transfer Certificate on behalf of itself the
Borrower, the Security Parties, the Security Trustee and each of the other
Lenders;


 


(b)                                 on behalf of the Transferee Lender, send to the
Borrower and each Security Party letters or faxes notifying them of the
Transfer Certificate and attaching a copy of it; and


 


(c)                                  send to the Transferee Lender copies of the letters
or faxes sent under paragraph (b) above.


 


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26.4                        Effective Date of Transfer
Certificate.  A Transfer Certificate
becomes effective on the date, if any, specified in the Transfer Certificate as
its effective date Provided that it is signed by the Agent under Clause 26.3 on
or before that date.


 


26.5                        No transfer without Transfer
Certificate.  No assignment or transfer
of any right or obligation of a Lender under any Finance Document is binding
on, or effective in relation to, the Borrower, any Security Party, the Agent or
the Security Trustee unless it is effected, evidenced or perfected by a
Transfer Certificate.


 


26.6                        Lender re-organisation; waiver of Transfer
Certificate.  However, if a Lender enters
into any merger, de-merger or other reorganisation as a result of which all its
rights or obligations vest in another person (the “successor”), the Agent may,
if it sees fit, by notice to the successor and the Borrower and the Security
Trustee waive the need for the execution and delivery of a Transfer
Certificate; and, upon service of the Agent’s notice, the successor shall
become a Lender with the same Commitment and Contribution as were held by the
predecessor Lender.


 


26.7                        Effect of Transfer Certificate.  A Transfer Certificate takes effect in
accordance with English law as follows:


 


(a)                                  to the extent specified in the Transfer Certificate,
all rights and interests (present, future or contingent) which the Transferor
Lender has under or by virtue of the Finance Documents are assigned to the
Transferee Lender absolutely, free of any defects in the Transferor Lender’s title
and of any rights or equities which the Borrower or any Security Party had
against the Transferor Lender;


 


(b)                                 the Transferor Lender’s Commitment is discharged to
the extent specified in the Transfer Certificate;


 


(c)                                  the Transferee Lender becomes a Lender with the
Contribution previously held by the Transferor Lender and a Commitment of an
amount specified in the Transfer Certificate;


 


(d)                                 the Transferee Lender becomes bound by all the
provisions of the Finance Documents which are applicable to the Lenders
generally, including those about pro-rata sharing and the exclusion of
liability on the part of, and the indemnification of, the Agent and the
Security Trustee and, to the extent that the Transferee Lender becomes bound by
those provisions (other than those relating to exclusion of liability), the
Transferor Lender ceases to be bound by them;


 


(e)                                  any part of the Loan which the Transferee Lender
advances after the Transfer Certificate’s effective date ranks in point of
priority and security in the same way as it would have ranked had it been
advanced by the transferor, assuming that any defects in the transferor’s title
and any rights or equities of the Borrower or any Security Party against the
Transferor Lender had not existed;


 


(f)                                    the Transferee Lender becomes entitled to all the
rights under the Finance Documents which are applicable to the Lenders
generally, including but not limited to those relating to the Majority Lenders
and those under Clause 5.7 and Clause 20, and to the extent that the Transferee
Lender becomes entitled to such rights, the Transferor Lender ceases to be
entitled to them; and


 


(g)                                 in respect of any breach of a warranty, undertaking,
condition or other provision of a Finance Document or any misrepresentation
made in or in connection with a Finance Document, the Transferee Lender shall
be entitled to recover damages by reference to the loss incurred by it as a
result of the breach or misrepresentation, irrespective of whether the original
Lender would have incurred a loss of that kind or amount.


 


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


 


26.8                        Maintenance of register of Lenders.  During the Security Period the Agent shall
maintain a register in which it shall record the name, Commitment, Contribution
and administrative details (including the lending office) from time to time of
each Lender holding a Transfer Certificate and the effective date (in
accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall
make the register available for inspection by any Lender, the Security Trustee
and the Borrower during normal banking hours, subject to receiving at least 3
Business Days prior notice.


 


26.9                        Reliance on register of Lenders.  The entries on that register shall, in the
absence of manifest error, be conclusive in determining the identities of the
Lenders and the amounts of their Commitments and Contributions and the
effective dates of Transfer Certificates and may be relied upon by the Agent
and the other parties to the Finance Documents for all purposes relating to the
Finance Documents.


 


26.10                 Authorisation of Agent to sign Transfer
Certificates.  The Borrower, the Security
Trustee and each Lender irrevocably authorise the Agent to sign Transfer
Certificates on its behalf.


 


26.11                 Registration fee.  In respect of any Transfer Certificate, the
Agent shall be entitled to recover a registration fee of $3,000 (and all costs,
fees and expenses incidental to the transfer (including, but not limited to
legal fees and expenses)) from the Transferor Lender or (at the Agent’s option)
the Transferee Lender.


 


26.12                 Sub-participation;
subrogation assignment.   A Lender may sub-participate all or
any part of its rights and/or obligations under or in connection with the
Finance Documents without the consent of, or any notice to, the Borrower, any
Security Party, the Agent or the Security Trustee; and the Lenders may assign,
in any manner and terms agreed by the Majority Lenders, the Agent and the
Security Trustee, all or any part of those rights to an insurer or surety who
has become subrogated to them.


 


26.13                 Disclosure of information.  A Lender may disclose to a potential
Transferee Lender or sub-participant any information which the Lender has
received in relation to the Borrower, any Security Party or their affairs under
or in connection with any Finance Document, unless the information is clearly
of a confidential nature.


 


26.14                 Change of lending office.  A Lender may change its lending office by
giving notice to the Agent and the change shall become effective on the later
of:


 


(a)                                  the date on which the Agent receives the notice; and


 


(b)                                 the date, if any, specified in the notice as the date
on which the change will come into effect.


 


26.15                 Notification.  On receiving such a notice, the Agent shall
notify the Borrower and the Security Trustee; and, until the Agent receives
such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.


 


27                                  VARIATIONS AND WAIVERS


 


27.1                        Variations, waivers etc. by Majority
Lenders.  Subject to Clause 27.2, a
document shall be effective to vary, waive, suspend or limit any provision of a
Finance Document, or any Creditor Party’s rights or remedies under such a
provision or the general law, only if the document is signed, or specifically
agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders,
by the Agent and the


 


65





















 


Security Trustee in their own rights, and, if the document relates to a
Finance Document to which a Security Party is party, by that Security Party.


 


27.2                        Variations, waivers etc. requiring
agreement of all Lenders.  However, as
regards the following, Clause 27.1 applies as if the words “by the Agent on
behalf of the Majority Lenders” were replaced by the words “by or on behalf of
every Lender”:


 


(a)                                  a change in the Margin or in the definition of LIBOR;


 


(b)                                 a change to the date for, the amount of, any payment
of principal, interest, fees, or other sum payable under this Agreement;


 


(c)                                  a change to any Lender’s Commitment;


 


(d)                                 an extension of the Availability Period;


 


(e)                                  a change to the definition of “Majority Lenders” or
“Finance Documents”;


 


(f)                                    a change to the preamble or to Clause 2, 3, 4, 5.1,
17, 18 or 30;


 


(g)                                 a change to this Clause 27;


 


(h)                                 any release of, or material variation to, a Security
Interest, guarantee, indemnity or subordination arrangement set out in a
Finance Document; and


 


(i)                                     any other change or matter as regards which this
Agreement or another Finance Document expressly provides that each Lender’s
consent is required.


 


27.3                        Exclusion of other or implied variations.  Except for a document which satisfies the
requirements of Clauses 27.1 and 27.2, no document, and no act, course of
conduct, failure or neglect to act, delay or acquiescence on the part of the
Creditor Parties or any of them (or any person acting on behalf of any of them)
shall result in the Creditor Parties or any of them (or any person acting on
behalf of any of them) being taken to have varied, waived, suspended or
limited, or being precluded (permanently or temporarily) from enforcing, relying
on or exercising:


 


(a)                                  a provision of this Agreement or another Finance
Document; or


 


(b)                                 an Event of Default; or


 


(c)                                  a breach by the Borrower or a Security Party of an
obligation under a Finance Document or the general law; or


 


(d)                                 any right or remedy conferred by any Finance Document
or by the general law,


 


and there shall not be implied into any Finance Document any
term or condition requiring any such provision to be enforced, or such right or
remedy to be exercised, within a certain or reasonable time.


 


28                                  NOTICES


 


28.1                        General. 
Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter or fax; and
references in the Finance Documents to written notices, notices in writing and
notices signed by particular persons shall be construed accordingly.


 


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28.2                        Addresses for communications.  A notice shall be sent:


 


	
  (a)

  	
   

  	
  to the Borrower:

  	
   

  	
  c/o Capital Ship Management Corp.

  3 Iassonos - Street

  185 37 Piraeus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Greece

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Fax No: +30 210 4285 679

  
	
   

  	
   

  	
   

  	
   

  	
  for
  the
  attention of:
  the Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  to a Lender:

  	
   

  	
  at the address below its name in
  Schedule 1 or (as the case may require) in the relevant Transfer Certificate.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  to the Swap Bank:

  	
   

  	
  Martensdamm 6

  
	
   

  	
   

  	
   

  	
   

  	
  D-24103 Kiel

  
	
   

  	
   

  	
   

  	
   

  	
  Germany

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Fax No: +49 40 3333 34086

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  to the Agent

  	
   

  	
  HSH Nordbank AG

  
	
   

  	
   

  	
  and Security Trustee:

  	
   

  	
  Shipping, Greek clients

  
	
   

  	
   

  	
   

  	
   

  	
  Gerhart-Hamptmann-Platz
  50

  
	
   

  	
   

  	
   

  	
   

  	
  D-20095 Hamburg

  
	
   

  	
   

  	
   

  	
   

  	
  Germany

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Fax No: +49 40 3333 34118

  



 


or to such other address as the relevant party may notify
the Agent or, if the relevant party is the Agent or the Security Trustee, the
Borrower, the Lenders and the Security Parties.


 


28.3                        Effective date of notices.  Subject to Clauses 28.4 and 28.5:


 


(a)                                  a notice which is delivered personally or posted
shall be deemed to be served, and shall take effect, at the time when it is
delivered; and


 


(b)                                 a notice which is sent by fax shall be deemed to be
served, and shall take effect, 2 hours after its transmission is completed.


 


28.4                        Service outside business hours.  However, if under Clause 28.3 a notice would
be deemed to be served:


 


(a)                                  on a day which is not a business day in the place of
receipt; or


 


(b)                                 on such a business day, but after 5 p.m. local time,


 


the notice shall (subject to Clause 28.5) be deemed to be
served, and shall take effect, at 9 a.m. on the next day which is such a
business day.


 


28.5                        Illegible notices.  Clauses 28.3 and 28.4 do not apply if the
recipient of a notice notifies the sender within one hour after the time at
which the notice would otherwise be deemed to be served that the notice has
been received in a form which is illegible in a material respect.


 


28.6                        Valid notices.  A notice under or in connection with a
Finance Document shall not be invalid by reason that its contents or the manner
of serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:


 


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(a)                                  the failure to serve it in accordance with the requirements of this
Agreement or other Finance Document, as the case may be, has not caused any
party to suffer any significant loss or prejudice;  or


(b)                                 in the case of incorrect and/or incomplete contents,
it should have been reasonably clear to the party on which the notice was
served what the correct or missing particulars should have been.


 


28.7                        English language.  Any notice under or in connection with a
Finance Document shall be in English.


 


28.8                        Meaning of “notice”.  In this Clause “notice” includes any demand,
consent, authorisation, approval, instruction, waiver or other communication.


 


29                                  SUPPLEMENTAL


 


29.1                        Rights cumulative,
non-exclusive.  The rights and remedies which the Finance Documents
give to each Creditor Party are:


 


(a)                                  cumulative;


 


(b)                                 may be exercised as often as appears expedient; and


 


(c)                                  shall not, unless a Finance Document explicitly and
specifically states so, be taken to exclude or limit any right or remedy
conferred by any law.


 


29.2                        Severability of provisions.  If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect the
validity, enforceability or legality of the other provisions of that Finance
Document or of the provisions of any other Finance Document.


 


29.3                        Third party rights.  A person who is not a party to this Agreement
has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce
or to enjoy the benefit of any term of this Agreement.


 


29.4                        Counterparts.  A Finance Document may be executed in any
number of counterparts.


 


30                                  LAW AND JURISDICTION


 


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


 


30.2                        Exclusive English jurisdiction.  Subject to Clause 30.3, the courts of England
shall have exclusive jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement.


 


30.3                        Choice of forum for the exclusive benefit
of the Creditor Parties.  Clause 30.2 is
for the exclusive benefit of the Creditor Parties, each of which reserves the
right:


 


(a)                                  to commence proceedings in relation to any matter
which arises out of or in connection with this Agreement in the courts of any
country other than England and which have or claim jurisdiction to that matter;
and


 


(b)                                 to commence such proceedings in the courts of any
such country or countries concurrently with or in addition to proceedings in
England or without commencing proceedings in England.


 


68





















 


No Borrower shall commence any proceedings in any country
other than England in relation to a matter which arises out of or in connection
with this Agreement.


 


30.4                        Process agent.  The Borrower irrevocably appoints Curzon
Maritime Ltd. at its office for the time being, presently at 30/33 Minories Street, St.
Clare House, London EC3N 1DJ,
England, to act as its agent to receive and accept on its behalf any process or
other document relating to any proceedings in the English courts which are
connected with this Agreement.


 


30.5                        Creditor Party rights unaffected.  Nothing in this Clause 30 shall exclude or
limit any right which any Creditor Party may have (whether under the law of any
country, an international convention or otherwise) with regard to the bringing
of proceedings, the service of process, the recognition or enforcement of a
judgment or any similar or related matter in any jurisdiction.


 


30.6                           Meaning of “proceedings”.  In
this Clause 30, “proceedings” means proceedings of any kind, including an
application for a provisional or protective measure.


 


AS
WITNESS the hands of the duly authorised officers or attorneys of the parties
the day and year first before written.


 


69














 


SCHEDULE 1


 


LENDERS AND COMMITMENTS


 


	
  Lender

  	
   

  	
  Lending Office

  	
   

  	
  Commitment

  ($)

  	
   

  	
  Percentage of Total

  Commitments

  (%)

  	
   

  
	
  HSH Nordbank AG

  	
   

  	
  Gerhart-Hauptmann-Platz 50
 20095 Hamburg
 Germany

   

  Fax No: +(49) 40 33 33 34118

  	
   

  	
  [•]

  	
   

  	
  [•]

  	
   

  



 


70

















 


SCHEDULE 2


 


DRAWDOWN NOTICE


 


To:
                           HSH
Norbank AG


Gerhart-Hauptmann-Platz
50


20095
Hamburg


Germany


 


	
  Attention:
  Loans Administration

  	
   

  	
  200[  ]

  



 


DRAWDOWN NOTICE


 


1                                         We refer to the loan agreement (the “Loan
Agreement”) dated                March
2007 and made between us, as Borrower, the Lenders referred to therein, HSH
Nordbank AG as Swap Bank and you as Bookrunner, Agent and Security Trustee in
connection with revolving credit and term loan facilities of up to
US$370,000,000 in aggregate.  Terms
defined in the Loan Agreement have their defined meanings when used in this
Drawdown Notice.


 


2                                         We request to borrow an Advance under
Tranche [         ] as follows:


 


(a)                                  Amount: US$[           ];


 


(b)                                 Drawdown Date:  [              ];


 


(c)                                  Duration of the first Interest Period
shall be [        ] months;


 


(d)                                 Payment instructions : account of [                      ]
and numbered [                                 ]
with [                ]
of [                     ].


 


3                                         We represent and warrant that:


 


(a)                                  the representations and warranties in
Clause 10 of the Loan Agreement would remain true and not misleading if
repeated on the date of this notice with reference to the circumstances now
existing; and


 


(b)                                 no Event of Default or Potential Event of
Default has occurred or will result from the borrowing of the Loan.


 


4                                         This notice cannot be revoked without the
prior consent of the Majority Lenders.


 


5                                         [We authorise you to deduct any facility
fees referred to in Clause 20.1 from the amount of the Advance].


 






 


Attorney-in-Fact


for and on behalf of


CAPITAL PRODUCT PARTNERS L.P.


 


71

















 


SCHEDULE 3


 


CONDITION PRECEDENT DOCUMENTS


 


PART A


 


The following are the
documents referred to in Clause 9.1(b) required before the Drawdown Date of the
first Advance of Tranche A.


 


1                                         A duly executed original of each of:


 


(a)                                  this Agreement;


 


(b)                                 the Agency and Trust Deed;


 


(c)                                  the Master Agreement;


 


(d)                                 the Master Agreement Assignment;


 


(e)                                  the Fee Letter;


 


(f)                                    the Guarantees to be entered into by the
Existing Owners;


 


(g)                                 the Mortgages, the General Assignments and
the Charterparty Assignments relative to the Existing Ships (and each document
to be delivered pursuant to each such Finance Document);


 


(h)                                 the Earnings Account Pledges relative to
the Existing Ships;


 


(i)                                     the Retention Account Pledge; and


 


(j)                                     the Swap Account Pledge.


 


2                                         Copies of the certificate of limited
partnership (in the case of the Borrower), the certificate of incorporation (in
the case of each Existing Owner) and the constitutional documents of the
Borrower and each Existing Owner.


 


3                                         Copies of resolutions of the directors of
the Borrower and the directors and shareholders of each Existing Owner
authorising the execution of each of the Finance Documents to which the
Borrower or that Owner is a party and, in the case of the Borrower, authorising
named officers to give the Drawdown Notices and other notices under this
Agreement.


 


4                                         The original of any power of attorney
under which any Finance Document is executed on behalf of the Borrower or an
Existing Owner.


 


5                                         Copies of all consents which the Borrower
or any Existing Owner requires to enter into, or make any payment under, any
Finance Document.


 


6                                         The originals of any mandates or other
documents required in connection with the opening or operation of each Earnings
Account relative to an Existing Ship, the Retention Account and the Swap
Account.


 


7                                         Evidence satisfactory to the Agent that
each Existing Owner is a direct or indirect wholly-owned subsidiary of the
Borrower.


 


8                                         Documentary evidence that:


 


72

















 


(a)                                  each Existing Ship is definitively and
permanently registered in the name of its Owner under Marshall Islands flag or,
in the case of each of “ASSOS” and “AXIOS”, Liberian flag and, in the case of
each of “AKTORAS”, “AIOLOS” and “ATLANTAS”, additionally that such Ship is dual
registered in the name of BP under Isle of Man flag;


 


(b)                                 each Existing Ship is in the absolute and
unencumbered ownership of its Owner save as contemplated by the Finance
Documents to which that Owner is a party;


 


(c)                                  each Existing Ship maintains the highest
available class with a classification society which is a member of the IACS as
the Agent may approve free of all overdue recommendations and conditions of
such classification society;


 


(d)                                 each Mortgage relative to an Existing Ship
has been duly registered against that Existing Ship as a valid first preferred
mortgage in accordance with the laws of the Marshall Islands or, in the case of
each of “ASSOS” and “AXIOS”, Liberia; and


 


(e)                                  each Existing Ship is insured in
accordance with the provisions of this Agreement and all requirements therein
in respect of such insurances have been complied with.


 


9                                         A copy of the Management Agreement and a
duly executed original of the Approved Manager’s Undertaking in relation to
each Existing Ship.


 


10                                  Copies of:


 


(a)                                  the document of compliance (DOC) and
safety management certificate (SMC) referred to in paragraph (a) of the
definition of the ISM Code Documentation in respect of each Existing Ship and
the Approved Manager certified as true and in effect by the Owner of such
Existing Ship; and


 


(b)                                 the ISPS Code Documentation in respect of
each Existing Ship and the Owner thereof certified as true and in effect by
that Owner.


 


11                                  Two valuations (at the cost of the
Borrower) of each Existing Ship addressed to the Agent, stated to be for the
purpose of this Agreement and dated not earlier than 4 weeks before the
Drawdown Date for the first Advance of Tranche A, each from an Approved Broker
(such valuations to be made in accordance with Clause 15.4).


 


12                                  A survey report in respect of each
Existing Ship prepared (at the cost of the Borrower) by an independent marine
surveyor appointed by the Agent dated no later than 20 days prior to the
Drawdown Date for the first Advance of Tranche A in form, scope and substance
satisfactory to the Agent and its technical advisers.


 


13                                  Documentary evidence that the IPO has been
completed.


 


14                                  Copies of all the Existing Charter duly
executed by the parties thereto.


 


15                                  A copy of the Partnership Agreement duly
executed by the parties thereto.


 


16                                  All documentation required by each
Creditor Party in relation to the Borrower and any Security Party pursuant to
that Creditor Party’s “know your customer” requirements.


 


17                                  Documentary evidence that the agent for
service of process named in Clause 29 has accepted its appointment.


 


73

















 


18                                  Favourable legal opinions from lawyers
appointed by the Agent on such matters concerning the laws of the Marshall
Islands, Liberia and such other relevant jurisdictions as the Agent may
require.


 


19                                  A favourable opinion from an independent
insurance consultant acceptable to the Agent on such matters relating to the
insurances of the Existing Ships as the Agent may require.


 


20                                  If the Agent so requires, in respect of
any of the documents referred to above, a certified English translation
prepared by a translator approved by the Agent.


 


PART B


 


The following are
the documents referred to in Clause 9.1(c) required before the Drawdown Date of
each Advance under Tranche B.


 


In Part B of
Schedule 3, the following definitions shall have the following meanings:


 


“Relevant Owner” means the Owner of the Relevant Ship; and


 


“Relevant Ship” means, in relation to each Advance under Tranche B, the
Tranche B New Ship which is to act as security for such Advance.


 


1                                         Copies of resolutions of the shareholders
and directors of the Relevant Owner and the Borrower authorising the execution
of each of the Finance Documents to which such Owner is a party and, in the
case of the Borrower, approving the borrowing of the relevant Advance and
authorising named directors or attorneys to give the Drawdown Notices and other
notices under this Agreement.


 


2                                         The original of any power of attorney
under which any Finance Document is executed on behalf of the Relevant Owner.


 


3                                         Copies of all consents which the Relevant
Owner or the Borrower requires to enter into, or make any payment under, any Finance
Document.


 


4                                         A duly executed original of the Guarantee
of the Relevant Owner and of the Mortgage and the General Assignment relative
to the Relevant Ship, the Earnings Account Pledge and of each document to be
delivered pursuant to each such Finance Document.


 


5                                         If applicable, a duly executed original of
the Charterparty Assignment or the Bareboat Charter Security Agreement in
respect of the Relevant Ship and of each document to be delivered pursuant to
each such Finance Document.


 


6                                         Evidence satisfactory to the Agent that
the Relevant Owner is a direct or indirect wholly-owned subsidiary of the
Borrower.


 


7                                         The originals of any documents required in
connection with the opening of the Earnings Account in respect of the Relevant
Ship.


 


8                                         Documentary evidence that:


 


(a)                                  the Relevant Ship is registered in the
ownership of the Relevant Owner under an Approved Flag;


 


(b)                                 the Relevant Ship is in the absolute and
unencumbered ownership of the Relevant Owner save as contemplated by the
Finance Documents;


 


74

















 


(c)                                  the Relevant Ship maintains the highest
available class with a classification society which is a member of the IACS as
the Agent may approve free of all overdue recommendations and conditions of
such classification society;


 


(d)                                 the Mortgage relating to the Relevant Ship
has been duly registered or recorded against the Relevant Ship as a valid first
preferred ship mortgage in accordance with the laws of the relevant Approved
Flag State; and


 


(e)                                  the Relevant Ship is insured in accordance
with the provisions of this Agreement and all requirements therein in respect
of insurances have been complied with.


 


9                                         A copy of the Management Agreement and a
duly executed original of the Approved Manager’s Undertaking in relation to the
Relevant Ship.


 


10                                  Copies of:


 


(a)                                  the document of compliance (DOC) and
safety management certificate (SMC) referred to in paragraph (a) of the
definition of the ISM Code Documentation in respect of the Relevant Ship and
the Approved Manager certified as true and in effect by the Relevant Owner; and


 


(b)                                 the ISPS Code Documentation in respect of
the Relevant Ship and the Relevant Owner certified as true and in effect by the
Relevant Owner.


 


11                                  Two valuations (at the cost of the
Borrowers) of the Relevant Ship, addressed to the Agent, stated to be for the
purposes of this Agreement and dated not earlier than 4 weeks before the
Drawdown Date relative to the relevant Advance, each from an Approved Broker
(such valuations to be made in accordance with Clause 15.4).


 


12                                  A survey report in respect of the Relevant
Ship prepared (at the cost of the Borrower) by an independent marine surveyor
appointed by the Agent dated no later than 20 days prior to the Drawdown Date
of the relevant Advance in form, scope and substance satisfactory to the Agent
and its technical advisers.


 


13                                  At the cost of the Borrower, a favourable
opinion from an independent insurance consultant acceptable to the Lenders on
such matters relating to the insurances for the Relevant Ship as the Agent may
require.


 


14                                  Favourable legal opinions from lawyers
appointed by the Lender on such matters concerning the laws of the Approved
Flag State in which the Relevant Ship is registered and such other relevant
jurisdictions as the Agent may require.


 


15                                  If the Agent so requires, in respect of
any of the documents referred to above, a certified English translation
prepared by a translator approved by the Agent.


 


PART C


 


The following are
the documents referred to in Clause 9.1(d) required before the Drawdown Date of
each Advance under Tranche C.


 


In Part C of
Schedule 3, the following definitions shall have the following meanings:


 


“Relevant Owner”
means the owner of the Relevant Ship; and


 


“Relevant Ship”
means, in relation to each Advance under Tranche C, the Tranche C New Ship
which is to act as security for such Advance.


 


75

















 


1                                         Copies of resolutions of the shareholders
and directors of each Relevant Owner and the Borrower authorising the execution
of each of the Finance Documents to which such Owner is a party and, in the
case of the Borrower, approving the borrowing of the relevant Advance and
authorising named directors or attorneys to give the Drawdown Notices and other
notices under this Agreement.


 


2                                         The original of any power of attorney
under which any Finance Document is executed on behalf of the Relevant Owner.


 


3                                         Copies of all consents which each Relevant
Owner or the Borrower requires to enter into, or make any payment under, any
Finance Document.


 


4                                         A duly executed original of the Guarantee
of the Relevant Owner and of the Mortgage and the General Assignment relative
to the Relevant Ship, the Owner’s Earnings Account Pledge and of each document
to be delivered pursuant to each such Finance Document.


 


5                                         If applicable, a duly executed original of
the Charterparty Assignment or the Bareboat Charter Security Agreement in
respect of the Relevant Ship and of each document to be delivered pursuant to
each such Finance Document.


 


6                                         Evidence satisfactory to the Agent that
the Relevant Owner is a direct or indirect wholly-owned subsidiary of the
Borrower.


 


7                                         The originals of any documents required in
connection with the opening of the Earnings Account in respect of the Relevant
Ship.


 


8                                         Documentary evidence that:


 


(a)                                  the Relevant Ship is registered in the
ownership of the Relevant Owner under an Approved Flag;


 


(b)                                 the Relevant Ship is in the absolute and
unencumbered ownership of the Relevant Owner save as contemplated by the
Finance Documents;


 


(c)                                  the Relevant Ship maintains the highest
available class with a classification society which is a member of the IACS as
the Agent may approve free of all overdue recommendations and conditions of
such classification society;


 


(d)                                 the Mortgage relating to the Relevant Ship
has been duly registered or recorded against the Relevant Ship as a valid first
preferred ship mortgage in accordance with the laws of the relevant Approved
Flag State; and


 


(e)                                  the Relevant Ship is insured in accordance
with the provisions of this Agreement and all requirements therein in respect
of insurances have been complied with.


 


9                                         A copy of the Management Agreement and a
duly executed original of the Approved Manager’s Undertaking in relation to the
Relevant Ship.


 


10                                  Copies of:


 


(a)                                  the document of compliance (DOC) and
safety management certificate (SMC) referred to in paragraph (a) of the
definition of the ISM Code Documentation in respect of the Relevant Ship and
the Approved Manager certified as true and in effect by the Relevant Owner; and


 


76

















 


(b)                                 the ISPS Code Documentation in respect of
the Relevant Ship and the Relevant Owner certified as true and in effect by the
Relevant Owner.


 


11                                  Two valuations (at the cost of the Borrowers)
of the Relevant Ship, addressed to the Agent, stated to be for the purposes of
this Agreement and dated not earlier than 4 weeks before the Drawdown Date
relative to the relevant Advance, each from an Approved Broker (such valuations
to be made in accordance with Clause 15.4).


 


12                                  A survey report in respect of the Relevant
Ship prepared (at the cost of the Borrower) by an independent marine surveyor
appointed by the Agent dated no later than 20 days prior to the Drawdown Date
of the relevant Advance in form, scope and substance satisfactory to the Agent
and its technical advisers.


 


13                                  At the cost of the Borrower, a favourable
opinion from an independent insurance consultant acceptable to the Lenders on
such matters relating to the insurances for each Relevant Ship as the Agent may
require.


 


14                                  Favourable legal opinions from lawyers
appointed by the Lender on such matters concerning the laws of the Approved
Flag State in which the Relevant Ship is registered and such other relevant
jurisdictions as the Agent may require.


 


15                                  If the Agent so requires, in respect of
any of the documents referred to above, a certified English translation
prepared by a translator approved by the Agent.


 


Every copy document delivered under this Schedule shall be certified as
a true and up to date copy by a director or the secretary (or equivalent
officer) of the Borrower.


 


77

















 


SCHEDULE 4


 


TRANSFER CERTIFICATE


 


The Transferor and the
Transferee accept exclusive responsibility for ensuring that this Certificate
and the transaction to which it relates comply with all legal and regulatory
requirements applicable to them respectively.


 


To:                              HSH
NORDBANK AG for itself and for and on behalf of the Borrower, each Security
Party, the Security Trustee and each Lender, as defined in the Loan Agreement
referred to below.


 


[                ]
200[   ]


 


1                                         This Certificate relates to a Loan
Agreement (the “Loan Agreement”) dated     
March 2007 and made between (1) Capital Product Partners L.P. (the “Borrower”),
(2) the banks and financial institutions named therein, (3) HSH Nordbank AG as
Swap Bank and (4) HSH Nordbank AG as Bookrunner, Agent and Security Trustee
and, for revolving credit and term loan facilities of up to US$370,000,000 in
aggregate.


 


2                                         In this Certificate:


 


                                                “the
Relevant Parties” means the Agent, the Borrower, [each Security Party], the
Security Trustee, and each Lender;


 


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


 


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


 


                                                Terms
defined in the Loan Agreement shall, unless the contrary intention appears,
have the same meanings when used in this Certificate.


 


3                                         The effective date of this Certificate is
..........200[ ]    Provided that this
Certificate shall not come into effect unless it is signed by the Agent on or
before that date.


 


4                                         The Transferor assigns to the Transferee
absolutely all rights and interests (present, future or contingent) which the
Transferor has as Lender under or by virtue of the Loan Agreement and every
other Finance Document in relation to [   
] per cent. of the Contribution outstanding to the Transferor (or its
predecessors in title) which is set out below:


 


	
  Contribution

  	
   

  	
  Amount transferred

  



 


5                                         By virtue of this Transfer Certificate and
Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from
its Commitment which amounts to $[         ]]
[from [     ] per cent. of its Commitment, which
percentage represents $[           ]]
and the Transferee acquires a Commitment of $[              ].


 


6                                         The Transferee undertakes with the
Transferor and each of the Relevant Parties that the Transferee will observe
and perform all the obligations under the Finance


 


 


78

















 


Documents which Clause 26 of the Loan Agreement provides will become
binding on it upon this Certificate taking effect.


 


7                                         The Agent, at the request of the
Transferee (which request is hereby made) accepts, for the Agent itself and for
and on behalf of every other Relevant Party, this Certificate as a Transfer
Certificate taking effect in accordance with Clause 26 of the Loan Agreement.


 


8                                         The Transferor:


 


(a)                                  warrants to the Transferee and each
Relevant Party:


 


(i)                                     that the Transferor has full capacity to
enter into this transaction and has taken all corporate action and obtained all
consents which are in connection with this transaction; and


 


(ii)                                  that this Certificate is valid and binding
as regards the Transferor;


 


(b)                                 warrants to the Transferee that the
Transferor is absolutely entitled, free of encumbrances, to all the rights and
interests covered by the assignment in paragraph 4 above;


 


(c)                                  undertakes with the Transferee that the
Transferor will, at its own expense, execute any documents which the Transferee
reasonably requests for perfecting in any relevant jurisdiction the Transferee’s
title under this Certificate or for a similar purpose.


 


9                                         The Transferee:


 


(a)                                  confirms that it has received a copy of
the Loan Agreement and each other Finance Document;


 


(b)                                 agrees that it will have no rights of
recourse on any ground against either the Transferor, the Agent, the Security
Trustee, any Lender in the event that:


 


(i)                                     the Finance Documents prove to be invalid
or ineffective,


 


(ii)                                  the Borrower or any Security Party fails
to observe or perform its obligations, or to discharge its liabilities, under
the Finance Documents;


 


(iii)                               it proves impossible to realise any asset
covered by a Security Interest created by a Finance Document, or the proceeds
of such assets are insufficient to discharge the liabilities of the Borrower or
Security Party under the Finance Documents;


 


(c)                                  agrees that it will have no rights of
recourse on any ground against the Agent, the Security Trustee or any Lender in
the event that this Certificate proves to be invalid or ineffective;


 


(d)                                 warrants to the Transferor and each
Relevant Party (i) that it has full capacity to enter into this transaction and
has taken all corporate action and obtained all official consents which it
needs to take or obtain in connection with this transaction; and (ii) that this
Certificate is valid and binding as regards the Transferee; and


 


(e)                                  confirms the accuracy of the
administrative details set out below regarding the Transferee.


 


10                                  The Transferor and the Transferee each
undertake with the Agent and the Security Trustee severally, on demand, fully
to indemnify the Agent and/or the Security


 


79

















 


Trustee in respect of any claim,
proceeding, liability or expense (including all legal expenses) which they or
either of them may incur in connection with this Certificate or any matter
arising out of it, except such as are shown to have been mainly and directly
caused by the gross and culpable negligence or dishonesty of the Agent’s or the
Security Trustee’s own officers or employees.


 


11                                  The Transferee shall repay to the
Transferor on demand so much of any sum paid by the Transferor under paragraph
10 above as exceeds one-half of the amount demanded by the Agent or the
Security Trustee in respect of a claim, proceeding, liability or expense which
was not reasonably foreseeable at the date of this Certificate; but nothing in
this paragraph shall affect the liability of each of the Transferor and the
Transferee to the Agent or the Security Trustee for the full amount demanded by
it.


 


	
  [Name
  of Transferor]

  	
   

  	
  [Name
  of Transferee]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  



 


Agent


 


Signed for itself and
for and on behalf of itself


as Agent and for every
other Relevant Party


 


HSH Nordbank AG


 


By:


 


Date:


 


80

















 


Administrative Details of Transferee


 


Name of Transferee:


 


Lending Office:


 


Contact Person


(Loan Administration
Department):


 


Telephone:


 


Telex:


 


Fax:


 


Contact Person


(Credit Administration
Department):


 


Telephone:


 


Telex:


 


Fax:


 


Account for payments:


 


 


Note:                   This Transfer
Certificate alone may not be sufficient to transfer a proportionate share of
the Transferor’s interest in the security constituted by the Finance Documents
in the Transferor’s or Transferee’s jurisdiction.  It is the responsibility of each Lender to
ascertain whether any other documents are required for this purpose.


 


81

















 


SCHEDULE 5


 


DESIGNATION NOTICE


 


To:          HSH Norbank AG


Gerhart-Hauptmann-Platz
50


20095
Hamburg


Germany


 


[•]


 


Dear Sirs


 


Loan Agreement dated [•]
March 2007 made between (inter alia) (i) ourselves as Borrower, (ii) the
Lenders and (iii) yourselves as Swap Bank, Bookrunner, Agent and Security
Trustee in respect of revolving credit and term loan facilities of up to
US$370,000,000 in aggregate (the “Loan Agreement”)


 


We refer to:


 


1                                         the Loan Agreement;


 


2                                         the Master Agreement dated [•]
made between ourselves and HSH Nordbank AG; and


 


3                                         a Confirmation delivered pursuant to the
said Master Agreement dated [•] and addressed by HSH Nordbank AG to us.


 


In accordance with the
terms of the Loan Agreement, we hereby give you notice of the said Confirmation
and hereby confirm that the Transaction evidenced by it will be designated as a
“Designated Transaction” for the purposes of the Loan Agreement and the Finance
Documents.


 


Yours faithfully,


 






 


for and on behalf of


CAPITAL PRODUCT
PARTNERS L.P.


 


82

















 


SCHEDULE 6


 


FORM OF COMPLIANCE CERTIFICATE


 


To:          HSH NORDBANK AG


Gerhart-Hauptmann-Platz 50


20095 Hamburg


Germany


 


From:   Capital Product Partners L.P.


 


 


Dated:    [•]


Dear Sirs


 


USD
370,000,000 Loan Agreement

dated [•] 2007 (the “Agreement”)


1                                We refer to the
Agreement. This is a Compliance Certificate and attached hereto are the
calculations which will provide evidence of compliance. 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
clauses 12.5 and 15.1 of the Agreement and hereby certify that:


(1)                        Leverage Ratio


Requirement:  Leverage Ratio of not more than 72.50%.


Satisfied
[YES] : [NO]


(2)                        Minimum
Liquidity


Requirement:  maintain on a consolidated basis liquidity in
a minimum amount determined in accordance with Clause 12.5(c) of the Agreement.


Satisfied
[YES] : [NO]


(3)                        Interest
Coverage


Requirement:  maintain a ratio of EBITDA to Net Interest
Expenses on a trailing 4-quarter basis of not less than 2.00 to 1.00.


Satisfied
[YES] : [NO]


(4)                        Collateral
Maintenance


Requirement:  Market Value of the Ships subject to a
Mortgage is not less than 125% of the Loan.


Satisfied
[YES] : [NO]


3                                We confirm that
no Event of Default is continuing and that no Event of Default would occur
out of the distribution of dividend.*


 






*
                                      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.


 


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  Chief
  Financial Officer

  



 


 


for and on
behalf of


[name of auditors of the Company]**


 


 






**                                  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.


 


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EXECUTION PAGES


 


	
  BORROWER

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  CAPITAL
  PRODUCT

  	
  )

  
	
  PARTNERS
  L.P.

  	
  )

  
	
   

  	
   

  
	
  LENDERS

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  HSH NORDBANK AG

  	
  )

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  [•]

  	
  )

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  [•]

  	
  )

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  [•]

  	
  )

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  [•]

  	
  )

  
	
   

  	
   

  
	
  SWAP
  BANK

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  HSH NORDBANK AG

  	
  )

  



 


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  BOOKRUNNER

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  HSH NORDBANK AG

  	
  )

  
	
   

  	
   

  
	
  AGENT

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  HSH NORDBANK AG

  	
  )

  
	
   

  	
   

  
	
  SECURITY
  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  
	
  for
  and on behalf of

  	
  )

  
	
  HSH NORDBANK AG

  	
  )

  
	
   

  	
   

  
	
  Witness
  to all the above

  	
  )

  
	
  Signatures:

  	
  )

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  



 


86