**Exhibit4.18**

Dated 20 February 2007

**DANAOSCORPORATION**

as Borrower

- and -

**THEBANKS AND FINANCIAL INSTITUTIONS**

**listedin Schedule 1**

as Lenders

- and -

**THEROYAL BANK OF SCOTLAND PLC**

as Swap Bank

- and -

**THEROYAL BANK OF SCOTLAND PLC**

as Issuing Bank, Agent

and SecurityTrustee

**LOANAGREEMENT**

relating to a revolvingcredit facility

of up to US$700,000,000

to refinance certain existing indebtedness and equityand

to (re)finance thepurchase price

of certainapproved ships/newbuildings

**WATSON, FARLEY & WILLIAMS**

**Piraeus**

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**INDEX**
| Clause     | ** ** | ** **                                                       | ** ** | **Page**   |
|------------|------------|------------------------------------------------------------------|------------|------------|
| ** ** | ** ** | ** **                                                       | ** ** | ** ** |
| 1          |       | INTERPRETATION                                                   |       | 1          |
|       |       |                                                             |       |       |
| 2          |       | FACILITIES                                                       |       | 26         |
|       |       |                                                             |       |       |
| 3          |       | POSITION OF THE LENDERS, THE SWAP BANK AND THE  MAJORITY LENDERS |       | 26         |
|       |       |                                                             |       |       |
| 4          |       | DRAWDOWN                                                         |       | 28         |
|       |       |                                                             |       |       |
| 5          |       | CURRENCY OPTION                                                  |       | 31         |
|       |       |                                                             |       |       |
| 6          |       | INTEREST                                                         |       | 35         |
|       |       |                                                             |       |       |
| 7          |       | INTEREST PERIODS                                                 |       | 38         |
|       |       |                                                             |       |       |
| 8          |       | DEFAULT INTEREST                                                 |       | 38         |
|       |       |                                                             |       |       |
| 9          |       | REPAYMENT, PREPAYMENT AND CANCELLATION                           |       | 39         |
|       |       |                                                             |       |       |
| 10         |       | CONDITIONS PRECEDENT                                             |       | 46         |
|       |       |                                                             |       |       |
| 11         |       | REPRESENTATIONS AND WARRANTIES                                   |       | 47         |
|       |       |                                                             |       |       |
| 12         |       | GENERAL UNDERTAKINGS                                             |       | 49         |
|       |       |                                                             |       |       |
| 13         |       | CORPORATE UNDERTAKINGS                                           |       | 53         |
|       |       |                                                             |       |       |
| 14         |       | INSURANCE                                                        |       | 54         |
|       |       |                                                             |       |       |
| 15         |       | SHIP COVENANTS                                                   |       | 59         |
|       |       |                                                             |       |       |
| 16         |       | SECURITY COVER                                                   |       | 63         |
|       |       |                                                             |       |       |
| 17         |       | PAYMENTS AND CALCULATIONS                                        |       | 65         |
|       |       |                                                             |       |       |
| 18         |       | APPLICATION OF RECEIPTS                                          |       | 67         |
|       |       |                                                             |       |       |
| 19         |       | APPLICATION OF EARNINGS                                          |       | 68         |
|       |       |                                                             |       |       |
| 20         |       | EVENTS OF DEFAULT                                                |       | 69         |
|       |       |                                                             |       |       |
| 21         |       | FEES AND EXPENSES                                                |       | 73         |
|       |       |                                                             |       |       |
| 22         |       | INDEMNITIES                                                      |       | 74         |
|       |       |                                                             |       |       |
| 23         |       | NO SET-OFF OR TAX DEDUCTION                                      |       | 76         |
|       |       |                                                             |       |       |
| 24         |       | ILLEGALITY, ETC                                                  |       | 77         |
|       |       |                                                             |       |       |
| 25         |       | INCREASED COSTS                                                  |       | 77         |
|       |       |                                                             |       |       |
| 26         |       | SET-OFF                                                          |       | 79         |

 

 

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| 27                                                   |   | TRANSFERS AND CHANGES IN LENDING OFFICES | 79     |
|------------------------------------------------------|--------|------------------------------------------|--------|
|                                                 |   |                                     |   |
| 28                                                   |   | VARIATIONS AND WAIVERS                   | 82     |
|                                                 |   |                                     |   |
| 29                                                   |   | NOTICES                                  | 83     |
|                                                 |   |                                     |   |
| 30                                                   |   | REDUCTION OF GUARANTEES                  | 84     |
|                                                 |   |                                     |   |
| 31                                                   |   | SETTLEMENT OF GUARANTEES                 | 85     |
|                                                 |   |                                     |   |
| 32                                                   |   | INDEMNITY OF THE BORROWER                | 85     |
|                                                 |   |                                     |   |
| 33                                                   |   | INDEMNITIES OF THE LENDERS               | 88     |
|                                                 |   |                                     |   |
| 34                                                   |   | SUPPLEMENTAL                             | 89     |
|                                                 |   |                                     |   |
| 35                                                   |   | LAW AND JURISDICTION                     | 90     |
|                                                 |   |                                     |   |
| SCHEDULE 1 LENDERS AND COMMITMENTS                   | 91     |
|                                                 |   |
| SCHEDULE 2 DRAWDOWN NOTICE / GUARANTEE ISSUE REQUEST | 92     |
|                                                 |   |
| SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS             | 94     |
|                                                 |   |
| SCHEDULE 4 TRANSFER CERTIFICATE                      | 101    |
|                                                 |   |
| SCHEDULE 5 DESIGNATION NOTICE                        | 105    |
|                                                 |   |
| SCHEDULE 6 FORM OF COMPLIANCE CERTIFICATE            | 106    |
|                                                 |   |
| SCHEDULE 7 MANDATORY COST FORMULA                    | 107    |
|                                                 |   |
| EXECUTION PAGE                                       | 109    |

 

 

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**THISLOAN AGREEMENT** is made on 20 February 2007

**BETWEEN**:

(1)           **DANAOS CORPORATION**, as **Borrower**;

(2)           **THE BANKS AND FINANCIAL INSTITUTIONS** listedin Schedule 1, as **Lenders**;

(3)           **THE ROYAL BANK OF SCOTLAND PLC**,****acting through its office at Akti Miaouli45, 185 36 Piraeus, Greece, as **Swap Bank**;

(4)           **THE ROYAL BANK OF SCOTLAND PLC**,****acting through its office at Akti Miaouli45, 185 36 Piraeus, Greece, as **Issuing Bank**;and

(5)           **THE ROYAL BANK OF SCOTLAND PLC**, actingthrough its office at Akti Miaouli 45, 185 36 Piraeus, Greece, as **Agent** and **SecurityTrustee**.

**WHEREAS**:

(A)          The Lenders agreed tomake available to the Borrower a revolving credit facility of up toUS$700,000,000 divided into:

(i)            arevolving credit facility of up to US$200,000,000 to be on-lent by the Borrowerto certain wholly-owned subsidiaries of the Borrower to assist suchsubsidiaries in refinancing the Existing Indebtedness (as hereafter defined)and the equity of such subsidiaries; and

(ii)           arevolving credit facility of up to US$500,000,000 to be on-lent by the Borrowerto certain wholly-owned subsidiaries of the Borrower to assist suchsubsidiaries in (re)financing the acquisition cost of certain Approved Ships.

(B)           The Swap Bank hasagreed to enter into interest rate swap and forward foreign exchangetransactions with the Borrower from time to time to hedge the Borrower’sexposure under this Agreement to interest rate fluctuations and to exchangerate fluctuations between any Optional Currencies (as hereafter defined) andDollars.

(C)           Each of the wholly-ownedsubsidiaries of the Borrower mentioned above will execute in favour of theSecurity Trustee a guarantee of the obligations and liabilities of the Borrowerunder this Agreement.

(D)          The Lenders and the SwapBank have agreed to share pari passu in the security to be granted to theSecurity Trustee pursuant to this Agreement.

**IT ISAGREED** as follows:

# **1****             ****INTERPRETATION**

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

“**Advance**” means theprincipal amount of each borrowing by the Borrower under this Agreement or (asthe case may be) the Outstanding Guarantee Amount of each Guarantee issued uponrequest of the Borrower under this Agreement or, as the context may require,the principal amount of each such borrowing from time to time outstanding;

### “**Advance 1Grace Period**”  means theperiod commencing on the first Drawdown Date of an Advance in respect of theTranche A Advance 1 Ship and ending on the earlier of:

### (a)           the date falling 5years after such first Drawdown Date;

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### (b)           the first date on whichany Tranche A Advance 1 Ship has an Age of 19 years or more; or

### (c)           the date on which theAgent notifies the Borrower that any Tranche A Advance 1 Ship is not subject tolong-term time charter employment fully satisfactory to the Lenders;

### “**Advance 3Grace Period**”  means theperiod commencing on the first Drawdown Date of an Advance in respect of theTranche A Advance 3 Ships and ending on the earlier of:

### (a)           the date falling 1 year after such firstDrawdown Date;

### (b)           the first date on whichany Tranche A Advance 3 Ship has an Age of 19 years or more; or

### (c)           the date on which theAgent notifies the Borrower that any Tranche A Advance 3 Ship is not subject tolong-term time charter employment fully satisfactory to the Lenders;

“**Affected Lender**” has themeaning given in Clause 6.7;

“**Age**”  means, in relation to any ship on any date,the number of years (rounded down to the nearest integer) from the year inwhich the construction of that ship was completed until that date;

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

“**Agent**”  means The Royal Bank of Scotland plc, actingin its capacity as agent for the Lenders, the Swap Bank and the Issuing Bankunder the Finance Documents through its office at Akti Miaouli 45, 185 36Piraeus, Greece, or any successor of it in such capacity appointed under clause5 of the Agency and Trust Agreement;

“**Applicable****Accounts**” means, in relation to aCompliance Date or an accounting period, the consolidated balance sheets andrelated consolidated statements of stockholders’ equity, income and cash flows,together with related notes, of the Borrower’s Group set out in the annualfinancial statements or quarterly financial statements of the Borrower’s Groupprepared as of the Compliance Date or, as the case may be, the last day of theaccounting period in question (and which the Borrower is obliged to deliver tothe Agent pursuant to Clause 12.6, which accounts are to be prepared inaccordance with Clause 12.7);

“**Approved Broker**”  means each of Arrow Sale & Purchase (UK)Ltd., Braemer Seascope Ltd., Galbraith’s Limited, Howe Robinson & Co. Ltd.,H. Clarkson & Company Limited, Simpson Spence & Young and any otherindependent sale and purchase shipbroker as may be approved by the Agent fromtime to time;

“**Approved Flag**”  means any of the Greek, Panamanian, Liberian,Marshall Islands, Bahamas, Maltese, Cypriot or Singaporean flags or any otherflag as the Lenders may, in their absolute discretion, approve as the flag onwhich a Ship may be registered;

“**Approved Flag State**”  means any of Greece, Panama, Liberia, theMarshall Islands, the Commonwealth of the Bahamas, Malta, Cyprus or Singaporeor any other country in which the Lenders may, in their absolute discretion,approve that a Ship may be registered;

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“**Approved Guarantor**”  means a company (acceptable in all respectsto the Lenders) which is a wholly-owned subsidiary of the Borrower incorporatedin an Approved Flag State and which shall be the owner of a Mortgaged Ship;

“**Approved Manager**”  means in relation to each Mortgaged Ship,Danaos Shipping Co. Ltd., a company incorporated in the Republic of Cypruswhose registered office is at Libra House, 16 P. Catelari Street, Nicosia,Cyprus or any other company which the Agent may, with the authorisation of theMajority Lenders, approve from time to time as the manager of that Ship;

“**Approved Purchase Contract**”  means, in relation to an Approved Ship, thememorandum of agreement or, as the case may be, shipbuilding contract(including in either case any amendments or supplements thereto) to be madebetween the Approved Seller thereof and the Approved Guarantor who is the buyerthereof on such terms and conditions to be approved by the Lenders (suchapproval not to be unreasonably withheld) and, in the plural, means all ofthem;

“**Approved Seller**”  means, in relation to an Approved Ship, theseller or, as the case may be, builder of such Approved Ship and, in theplural, means all of them;

“**Approved Ship**”  means:

(a)           any container vessel tobe purchased pursuant to an Approved Purchase Contract, which, on theanticipated date of registration of the Mortgage relative thereto, has an Ageof not more than 15 years and will, on delivery to the relevant ApprovedGuarantor, be subject to long-term employment fully satisfactory to theLenders;

(b)           any dry bulk carrier tobe purchased pursuant to an Approved Purchase Contract, which, on theanticipated date of registration of the Mortgage relative thereto, has an Ageof not more than 15 years; or

(c)           any other vessel of anAge and type acceptable to the Lenders (in their sole and absolute discretion)and which will, on delivery to the relevant Approved Guarantor, be subject tolong-term employment satisfactory to the Lenders (in their sole and absolutediscretion),

in each case nominated bythe Borrower, and approved in writing by the Agent (such written approval to begiven by the Agent upon the instructions of all the Lenders (acting in theirsole and absolute discretion)), as an “Approved Ship” for the purposes of thisAgreement and, in the plural, means all of them;

“**Availability Period**”  means, in relation to an Advance, the periodcommencing on the date of this Agreement and ending on:

(a)           subject to Clauses 4.2and 4.8, the date falling 1 month before the final Reduction Date for thatAdvance (or such later date as the Agent may, with the authorisation of all theLenders, agree with the Borrower); or

(b)           if earlier, the date onwhich the Total Commitments are fully cancelled or terminated;

“**Bareboat Charter Security Agreement**”  means, in relation to any Mortgaged Shipwhich is subject to a bareboat charter (including without limitation eachExisting Bareboat Charter) (such bareboat charter to be entered into by therelevant Owner with the prior consent of the Agent pursuant to Clause15.13(a)), an agreement or agreements whereby the Security Trustee receives an assignmentof the rights of the relevant Owner under the bareboat charter and certainundertakings from that Owner and the relevant 

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charterer and, if so agreed by the Security Trustee (acting with theauthorisation of the Lenders), agrees to give certain undertakings to thatcharterer, in each case, in such form as the Lenders may approve or requireand, in the plural, means all of them;

“**Bareboat-equivalent Time CharterIncome**”  means, in relation toa Ship, the aggregate charter hire due and payable to the Owner of that Shipfor the remaining unexpired term of the charter or other contract of employmentrelative to that Ship at the relevant time (excluding any option periods (asthat term is defined in Clause 16.5(a))) less the aggregate operating expensesof the Ship as determined by the Borrower and certified to the satisfaction ofthe Agent for the same period;

“**Beneficiary**” means, inrelation to a Guarantee, the person in whose favour the Guarantee has beenissued under this Agreement;

“**Book Net Worth**”  means, as of any Compliance Date, theaggregate of value of the stockholders’ equity of the Group as shown in theApplicable Accounts;

“**Borrower**”  means Danaos Corporation, a corporationdomesticated and existing under the laws of the Republic of the MarshallIslands whose registered office is at Trust Company Complex, Ajeltake Road,Ajeltake Island, Majuro, The Marshall Islands MH 96960 (and includes itssuccessors);

“**Borrower’s Group**” meansthe Borrower and each of its subsidiaries;

“**Business Day**”  means a day on which banks are generally openfor business in London and Athens and, if on that day a payment or otherdealing is due to take place under this Agreement:

(a)           in Dollars, a day onwhich commercial banks are open in New York City;

(b)           in an Optional Currency(other than Euros), a day on which commercial banks are open in New York Cityand the principal financial centre of the country of that Optional Currency;and

(c)           in Euros, a Target Day;

“**Cash and Cash Equivalents**”  means the aggregate of:

### (a)           the amount of freelyavailable credit balances on any deposit or current account;

### (b)           the market value oftransferable certificates of deposit in a freely convertible currencyacceptable to the Lenders issued by a prime international bank; and

### (c)           the market value ofequity securities (if and to the extent that the Agent is satisfied that suchequity securities are readily saleable for cash and that there is a readymarket therefor) and investment grade debt securities which are publicly tradedon a major stock exchange or investment market (valued at market value as atany applicable date of determination);

in each case owned free of any Security Interest (other than a SecurityInterest in favour of the Security Trustee) by the Borrower or any of itssubsidiaries where:

(i)            the market value ofany asset specified in paragraph (b) and (c) shall be the bid price quoted forit on the relevant calculation date by the Agent; and

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

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~~“**CashCollateral Account**” means an account in the name of the Borrowerwith the Agent in Piraeus designated “Danaos Corporation - Cash CollateralAccount”, or any other account (with that or another office of the Agent orwith a bank or financial institution other than the Agent) which is designatedby the Agent as the Cash Collateral Account for the purposes of this Agreement;~~

“**Charterparty Assignment**”  means, in relation to:

(a)           an Existing Ship (atall times during the term of the Existing Time Charter relative thereto), anassignment of the rights of the Owner of that Existing Ship under the ExistingTime Charter relative to that Existing Ship executed or to be executed by therelevant Owner in favour of the Security Trustee; and

(b)           each other MortgagedShip and each Existing Ship after the expiry of the Existing Time Charter orExisting Bareboat Charter relative thereto, an assignment of the rights of therelevant Owner under any time charterparty or contract of affreightment inrespect of such Ship of at least 12 consecutive months or under any timecharter and any guarantee of such charter or contract of employment in respectof such Ship executed or to be executed by the relevant Owner in favour of theSecurity 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 amountset opposite its name in Schedule 1, or, as the case may require, the amountspecified 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 ofthe Commitments of all the Lenders);

“**Compliance Date”** means 31March, 30 June, 30 September and 31 December in each calendar year (or suchother dates as of which the Borrower prepares the consolidated financialstatements which it is required to deliver pursuant to Clause 12.6);

“**Confirmation**” and “**Early Termination Date**”, in relation to anycontinuing Designated Transaction, have the meanings given in the MasterAgreement;

“**Contractual Currency**” hasthe meaning given in Clause 22.5;

“**Contribution**”  means, in relation to a Lender, the part ofthe Loan which is owing to that Lender (excluding, for the avoidance of doubt,any Outstanding Guarantee Amount);

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

“**Current Percentage**”  means, in relation to a Lender and in respectof a Guarantee, the proportion, expressed as a percentage, which the Lender’sCommitment bore to the Total Commitments as at the Drawdown Date of theGuarantee;

“**Danaos ~~Accounts~~Account Charge**” means the deed containing, inter alia, a charge in respect of the DanaosEarnings~~Account and theCash Collateral~~ Account executed or to beexecuted by the Borrower in favour of the Security Trustee in such form as theLenders may approve or require;

“**Danaos****Earnings Account**”  means an account in the name of the Borrowerwith the Agent in Piraeus designated “Danaos Corporation US$700m facility -Earnings Account” or any other account (with that or another office of theAgent) which is designated by the Agent as the Earnings Account for thepurposes of this Agreement;

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“**Deed of Covenant**”  means, in relation to any Mortgaged Shipregistered on the Maltese, Cyprus, Singapore or Bahamas flag, a deed ofcovenant collateral to the Mortgage on such Ship, to be in such form as theLenders may approve or require and, in the plural, means all of them;

“**Delivery Date**”  means the date on which an Approved Ship isdelivered to, and accepted by, the Approved Guarantor under the ApprovedPurchase Contract;

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

(a)           it is entered into bythe Borrower pursuant to the Master Agreement with the Swap Bank which, at thetime the Transaction is entered into, is also a Lender and the Borrower’srights under the Master Agreement are subject to a Master Agreement Assignment;

(b)           its purpose is thehedging of the Borrower’s exposure (i) under this Agreement to fluctuations inLIBOR or (as the case may be) EURIBOR arising from the funding of the Loan (orany part thereof) for a period expiring no later than the final Reduction Dateor (ii) to fluctuations in the exchange rate between any of the OptionalCurrencies and Dollars; and

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

“**Dollar Spot Rate of Exchange**”  means, in relation to Dollars and in respectof any Interest Period, the Agent’s spot rate of exchange for the purchase inthe London Interbank Market or, as the case may be, the European InterbankMarket of Dollars with an Optional Currency at or about 11.00 a.m. (Londontime) on the Quotation Date for the relevant Interest Period;

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

“**Drawdown Date**”  means, in relation to an Advance, the daterequested by the Borrower for that Advance to be made (or, as the case may be,for the issue of the Guarantee), or (as the context requires) the date on whichthe Advance is actually made (or, as the case may be, the Guarantee is actuallyissued);

“**Drawdown Notice**”  means a notice in the form set out inSchedule 2 (or in any other form which the Agent approves or reasonablyrequires);

“**Earnings**” means, inrelation to each Mortgaged Ship, all moneys whatsoever which are now, or laterbecome, payable (actually or contingently) to the Owner of that Ship or theSecurity Trustee and which arise out of the use or operation of that Ship,including (but not limited to):

(a)           all freight, hire andpassage moneys, compensation payable to the Owner of that Ship or the SecurityTrustee in the event of requisition of that Ship for hire, remuneration forsalvage and towage services, demurrage and detention moneys and damages forbreach (or payments for variation or termination) of any charterparty or othercontract for the employment of that Ship;

(b)           all moneys which are atany time payable under Insurances in relation to that Ship in respect of lossof earnings; and

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(c)           if and whenever thatShip 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 thenet receipts of the relevant pooling or sharing arrangement which isattributable to that Ship;

“**Earnings Accounts”**  means, together, the Danaos Earnings Accountas the Owner’s Earnings Accounts and in the singular means any of them;

“**Earnings Account Charge**”  means, in relation to each Owner’s EarningsAccount, the deed containing, inter alia, a charge in respect of that Owner’sEarnings Account executed or to be executed by the relevant Owner in favour ofthe Security Trustee in such form as the Lenders may approve or require and inthe plural means all of them;

“**EBITDA**”  means, in respect of the relevant period, theNet Income of the Borrower’s Group before interest, taxes, depreciation andamortisation and any capital gains or losses realised from the sale of anyFleet Vessels as shown in the Applicable Accounts;

“**EMU Legislation**”  means legislative measures of the Council ofthe European Union for the introduction of, changeover to, or operation of, a singleor unified European currency being part of the implementation of the ThirdStage;

“**Environmental Claim**”  means:

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

(b)           any claim by any otherperson which relates to an Environmental Incident or to an allegedEnvironmental Incident;

and “**claim**” means a claimfor damages, compensation, fines, penalties or any other payment of any kindwhether or not similar to the foregoing; an order or direction to take, or notto take, certain action or to desist from or suspend certain action; and anyform of enforcement or regulatory action, including the arrest or attachment ofany asset;

“**Environmental Incident**”  means, in relation to each Mortgaged Ship:

(a)           any release ofEnvironmentally Sensitive Material from that Ship; or

(b)           any incident in whichEnvironmentally Sensitive Material is released from a vessel other than thatShip and which involves a collision between that Ship and such other vessel orsome other incident of navigation or operation, in either case, in connectionwith which that Ship is actually or potentially liable to be arrested,attached, detained or injuncted and/or that Ship and/or the Owner of that Shipand/or any operator or manager of it is at fault or allegedly at fault orotherwise liable to any legal or administrative action; or

(c)           any other incident inwhich Environmentally Sensitive Material is released otherwise than from thatShip and in connection with which that Ship is actually or potentially liableto be arrested and/or where the Owner of that Ship and/or any operator ormanager of that Ship is at fault or allegedly at fault or otherwise liable toany legal or administrative action;

“**Environmental Law**”  means any law relating to pollution orprotection of the environment, to the carriage of Environmentally SensitiveMaterial or to actual or threatened releases of Environmentally SensitiveMaterial;

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

“**EURIBOR**”  means, for an Interest Period (or any otherperiod for which an interest rate is to be determined under any provision of aFinance Document):

(a)           the rate per annumequal to the offered quotation for deposits in Euros for a period equal to, oras near as possible equal to, the relevant Interest Period (or, as the case maybe, such other period) which appears on the appropriate page of the ReutersMoney News Service at or about 11.00 a.m. (Brussels time) on the Quotation Datefor that Interest Period (or, as the case may be, such other period); or

(b)           if no rate is quoted onthe appropriate page of the Reuters Money News Service, the rate per annumdetermined by the Agent to be the arithmetic mean (rounded upwards, ifnecessary, to the nearest one-sixteenth of one per cent.) of the rates perannum notified to the Agent by each Lender as the rate at which deposits inEuros are offered to that Lender by leading banks in the European InterbankMarket at that Lender’s request at or about 11.00 a.m. (Brussels time) on theQuotation Date for that Interest Period (or, as the case may be, such otherperiod) for a period equal to that Interest Period (or, as the case may be,such other period) and for delivery on the first Business Day of it;

“**Euro**”  and “**Euros**”means, for the time being, the single currency of Participating Member Statesas provided in the EMU Legislation;

“**European Interbank Market**”means the interbank market for Euros operating in Participating Member States;

“**Existing Bareboat Charter**”  means, in relation to:

(a)           “SA SEDERBERG”, aBarecon 89 bareboat charter dated 5 April 2002 and made between MC RobinShipping Limited as original owner and Safmarine as charterer (as the same maybe supplemented and amended from time to time);

(b)           “SA WINTERBERG”, a Barecon89 bareboat charter dated 5 April 2002 and made between MC Eagle ShippingLimited as original owner and Safmarine as charterer (as the same may besupplemented and amended from time to time);

(c)           “SA HELDERBERG”, aBarecon 89 bareboat charter dated 5 April 2002 and made between MC CanaryShipping Limited as original owner and Safmarine as charterer (as the same maybe supplemented and amended from time to time); and

(d)           “MAERSK CONSTANTIA”, aBarecon 89 bareboat charter dated 5 April 2002 and made between MC SeagullShipping Limited as original owner and Safmarine as charterer (as the same maybe supplemented and amended from time to time),

each of the charters in paragraphs (a) to (d) being supplemented by aside letter dated 5 April 2002 and addenda numbered 1 to 4 thereto and novatedby a deed of novation dated 17 June 2003 in favour of the relevant ExistingOwner as owner and in the plural means all of them;

“**Existing Charter**”  means any Existing Bareboat Charter or anyExisting Time Charter;

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“**ExistingIndebtedness**”  means, at anyrelevant time, the aggregate Financial Indebtedness under the Existing LoanAgreement;

“**Existing LoanAgreement**”  means the loanagreement dated 11 April 2005 made between (inter alia) Sederberg, Winterberg,Helderberg and Constantia as joint and several borrowers and The Royal Bank ofScotland plc. as lender in respect of a loan facility of (originally)$200,000,000 (of which an amount of $75,500,000 is outstanding by way ofprincipal on the date of this Agreement);

“**Existing Owners**”  means in relation to:

(a)           “MOL CONFIDENCE”,Federal Marine Inc. (“**Federal**”);

(b)           “SA HELDERBERG”,Helderberg Maritime Inc. (“**Helderberg**”);

(c)           “SA WINTERBERG”,Winterberg Maritime Inc. (“**Winterberg**”);

(d)           “SA SEDERBERG”,Sederberg Maritime Inc. (“**Sederberg**”);

(e)           “MAERSK CONSTANTIA”,Constantia Maritime Inc. (“**Constantia**”);

(f)            “YM YANTIAN”,Seacaravel Shipping Limited (“**Seacaravel**”);

(g)           “NORASIA HAMBURG”,Seasenator Shipping Limited (“**Seasenator**”);

(h)           “VICTORY I”, VictoryShipholding Inc. (“**Victory**”);

(i)            “YM MILANO”, SaratogaTrading S.A. (“**Saratoga**”); and

(j)            any substitute vesselreferred to in the proviso to the definition of “Existing Ship”, the ApprovedGuarantor which is the registered owner of such vessel,

being, in the case of each of Federal, Helderberg, Winterberg,Sederberg, Constantia, Victory and Saratoga, a corporation incorporated underthe laws of the Republic of Liberia whose registered office is at 80 BroadStreet, Monrovia, Liberia and, in the case of each of Seacaravel andSeasenator, a company incorporated under the laws of the Republic of Cypruswhose registered office is at Tribune House, 10 Skopa Street, P.O. Box 4736,Nicosia, Cyprus and, in the singular means any one of them;

“**Existing Ships**”  means each of:

(a)           the “**Tranche A Advance 1 Ship**”, being “MOLCONFIDENCE”, a 1994-built container vessel of approximately 4,651 TEUscontainer carrying capacity which is registered in the ownership of Federalunder Cyprus flag and having IMO number 9065625 (“**MOL CONFIDENCE**”);

(b)           the “**Tranche A Advance 2 Ships**”, being,

#### (i)            “SA HELDERBERG”, a1977-built container vessel of approximately 3,101 TEUs container carryingcapacity which is registered in the ownership of Helderberg under Bahamas flag(and dual registered on the Belgian flag) and having IMO number 7423029 (“**SA HELDERBERG**”);

#### (ii)           “SA WINTERBERG”, a 1978-builtcontainer vessel of approximately 3,101 TEUs container carrying capacity whichis registered in the ownership of Winterberg under Bahamas flag (and dualregistered on the Belgian flag) and having IMO number 7422192 (“**SA WINTERBERG**”);

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#### (iii)          “SA SEDERBERG”, a 1978-builtcontainer vessel of approximately 3,101 TEUs container carrying capacity whichis registered in the ownership of Sederberg under Bahamas flag (and dual registeredon the Belgian flag) and having IMO number 7423031 (“**SA SEDERBERG**”);and

#### (iv)          “MAERSK CONSTANTIA”, a1979-built container vessel of approximately 3,101 TEUs container carryingcapacity which is registered in the ownership of Constantia under Bahamas flag(and dual registered on the Belgian flag) and having IMO number 7422207 (“**MAERSK CONSTANTIA**”);

(c)           the “**Tranche A Advance 3 Ships**”, being:

(i)            “YM YANTIAN”, a 1989-builtcontainer vessel of approximately 3,908 TEUs container carrying capacity whichis registered in the ownership of Seacaravel under Cyprus flag and having IMOnumber 8718110 (“**YM YANTIAN**”); and

(ii)           “NORASIA HAMBURG”, a1989-built container vessel of approximately 3,908 TEUs container carryingcapacity which is registered in the ownership of Seasenator under Cyprus flagand having IMO number 8718122 (“**NORASIAHAMBURG**”); and

(d)           the “**Tranche A Advance 4 Ships**”, being:

(i)            “VICTORY I”, a 1988-builtcontainer vessel of approximately 3,098 TEUs container carrying capacity whichis registered in the ownership of Victory under Panama flag and having IMOnumber 8705486 (“**VICTORY I**”); and

(ii)           “YM MILANO”, a 1988-builtcontainer vessel of approximately 3,129 TEUs container carrying capacity whichis registered in the ownership of Saratoga under Greek flag and having IMOnumber 8707355 (“**YM MILANO**”),

and, in the singular, means any one of them **Provided that** the Lenders may, in their sole and absolutediscretion and at the request of the Borrower made prior to the first Advanceunder Tranche A, agree to the substitution of any of the vessels set out abovewith another vessel nominated by the Borrower and acceptable to the Lenders;

 “**ExistingTime Charter**”  means, inrelation to:

(a)           “MOLCONFIDENCE”, a time charter dated 11 October 2004 and made between FederalMaritime Limited as original owner and Hyundai Merchant Marine Co., Ltd. ascharterer as novated in favour of Federal as owner pursuant to a tripartitedeed dated 23 February 2006 (as the same may be supplemented and amended fromtime to time);

(b)           “YMYANTIAN”, a time charter dated 30 March 2005 and made between Seacaravel asowner and Yangming (UK) Ltd. as charterer as supplemented by a side letter andaddenda numbered 1 and 2 thereto (as the same may be further supplemented andamended from time to time);

(c)           “NORASIAHAMBURG”, a time charter dated 11 January 2000 and made between Seasenator asowner and Cosco Container Lines as charterer as supplemented by addendanumbered 1 to 5 thereto (as the same may be further supplemental and amendedfrom time to time);

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(d)           “VICTORYI”, a time charter dated 6 February 2004 and made between Victory as owner andNorasia Container Lines Ltd. as charterer (as the same may be supplemented andamended from time to time);

(e)           “YMMILANO”, a time charter dated 9 October 2003 and made between Saratoga as ownerand Yangming (UK) Ltd. as charterer as supplemented by addenda numbered 1 to 4thereto (as the same may be further supplemented and amended from time totime); and

(f)            anycharter of each substitute vessel referred to in the proviso to the definitionof “Existing Ship” which will be continuing on the Drawdown Date of the Advancerelating to that vessel,

and in the plural means all of them;

“**Event of Default**”  means any of the events or circumstancesdescribed in Clause 20.1;

“**Finance Documents**”  means:

(a)           this Agreement;

(b)           the Master Agreement;

(c)           the Agency and TrustAgreement;

(d)           the Owner Guarantees;

(e)           the Mortgages;

(f)            the Deeds of Covenant;

(g)           the GeneralAssignments;

(h)           any Charterparty Assignment;

(i)            any Bareboat CharterSecurity Agreement;

(j)            the Master AgreementAssignment;

(k)           the Danaos ~~Accounts~~Account Charge;

(l)            the Earnings AccountCharges;

(m)          the Manager’sUndertakings;

(n)           the Pre-DeliverySecurity Assignments; and

(o)           any other document(whether creating a Security Interest or not) which is executed at any time bythe Borrower, any Owner or any other person as security for, or to establishany form of subordination or priorities arrangement in relation to, any amountpayable to the Lenders under this Agreement or any of the other documentsreferred to in this definition;

“**Finance Level**”  means:

(a)           (savefor the part-financing of a pre-delivery instalment under an Approved PurchaseContract to which paragraph (c) below shall apply instead) in the case of anApproved Ship to be purchased pursuant to an Approved Purchase Contract, 

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which is a container vessel and which, on the anticipated date ofregistration of the Mortgage relative thereto, has:

(i)            anAge of 4 years or less, 80 per cent. of the lesser of (x) Market Value of theApproved Ship and (y) the net contract price set out in the Approved PurchaseContract for the Approved Ship (any such Approved Ship being a “**New Container Vessel Type A**”);

(ii)           anAge of 5, 6, 7 or 8 years, 75 per cent. of the lesser of (x) the Market Valueof the Approved Ship and (y) the net contract price set out in the ApprovedPurchase Contract for the Approved Ship (any such Approved Ship being a “**New Container Vessel Type B**”);

(iii)          an Age of 9, 10, 11, 12 or 13 years, 70 percent. of the lesser of (x) the Market Value of the Approved Ship and (y) thenet contract price set out in the Approved Purchase Contract for the ApprovedShip (any such Approved Ship being a “**NewContainer Vessel Type C**”);

(iv)          anAge of 14 or 15 years, 65 per cent. of the lesser of (x) the Market Value ofthe Approved Ship and (y) the net contract price set out in the ApprovedPurchase Contract for the Approved Ship (any such Approved Ship being a “**New Container Vessel Type D**”); or

(b)           (savefor the part-financing of a pre-delivery instalment under an Approved PurchaseContract to which paragraph (c) below shall apply instead) in the case of anApproved Ship to be purchased pursuant to an Approved Purchase Contract, whichis a dry bulk carrier and which, on the anticipated date of registration of theMortgage relative thereto, has:

(i)            anAge of 4 years or less, 75 per cent. of the lesser of (x) the Market Value ofthe Approved Ship and (y) the net contract price set out in the ApprovedPurchase Contract for the Approved Ship (any such Approved Ship being a “**New Bulk Vessel Type A**”);

(ii)           anAge of 5, 6, 7 or 8 years, 70 per cent. of the lesser of (x) the Market Valueof the Approved Ship and (y) the net contract price set out in the ApprovedPurchase Contract for the Approved Ship (any such Approved Ship being a “**New Bulk Vessel Type B**”);

(iii)          an Age of 9, 10, 11, 12 or 13 years, 65 percent. of the lesser of (x) the Market Value of the Approved Ship and (y) thenet contract price set out in the Approved Purchase Contract for the ApprovedShip (any such Approved Ship being a “**NewBulk Vessel Type C**”);

(iv)          anAge of 14 or 15 years, 60 per cent. of the lesser of (x) the Market Value ofthe Approved Ship and (y) the net contract price set out in the ApprovedPurchase Contract for the Approved Ship (any such Approved Ship being a “**New Bulk Vessel Type D**”); or

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(c)           inthe case of a part-financing of a pre-delivery instalment under an ApprovedPurchase Contract, 80 per cent. of the net contract price set out in theApproved Purchase Contract; or

(d)           inthe case of any other Approved Ship, such figure as the Lenders shall determinein their absolute discretion,

savethat, in the case of paragraphs (a), (b) or (c) above, the Lenders may in theirabsolute discretion increase the “Finance Level” subject to the satisfaction ofany conditions (including, without limitation, the provision of additionalsecurity) required by the Lenders;

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

(a)           for principal, interestor any other sum payable in respect of any moneys borrowed or raised by thedebtor;

(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 financiallease, a deferred purchase consideration arrangement or any other agreementhaving the commercial effect of a borrowing or raising of money by the debtor;

(e)           under any foreignexchange transaction, any interest or currency swap or any other kind ofderivative transaction entered into by the debtor; or

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

“**Financial Year**”  means, in relation to the Borrower’s Groupand each Owner, each period of 1 year commencing on 1 January in respect ofwhich its audited accounts are or ought to be prepared;

“**Fleet Vessels**”  means, together, all of the vessels(including, but not limited to, the Ships) from time to time owned or leased bymembers of the Borrower’s Group which, at the relevant time, are includedwithin the Total Assets of the Borrower’s Group in the balance sheet of theApplicable Accounts or which would be included within the balance sheet if theApplicable Accounts were required to be prepared at that time;

“**Forward Currency Swap**”  means any Transaction made between theBorrower and the Swap Bank pursuant to the Master Agreement for the forwardpurchase or sale of one Optional Currency either with another Optional Currencyor with Dollars;

“**General Assignment**”  means, in relation to each Mortgaged Ship, ageneral assignment of the Earnings, the Insurances and any RequisitionCompensation of that Ship executed or to be executed by the relevant Owner infavour of the Security Trustee in such form as the Lenders may approve orrequire and, in the plural, means all of them;

“**Guarantee**” means eachguarantee issued or to be issued by the Issuing Bank in favour of a Beneficiaryin a form which the Issuing Bank approves;

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“**Guaranteed Obligations**”means, in relation to a Guarantee, the actual and contingent, certain andfuture obligations and liabilities owed by the Borrower or (as the case may be)the relevant Owner to the Beneficiary and secured by the Guarantee;

“**Insurances**”  means, in relation to each Mortgaged Ship:

(a)           all policies and contractsof insurance, including entries of that Ship in any protection and indemnity orwar risks association, which are effected in respect of that Ship, her Earningsor otherwise in relation to her; and

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

“**Interest Coverage Ratio**”  means, in relation to a Compliance Date or anaccounting period, the ratio of (a) EBITDA for the most recent financial periodof the Borrower’s Group to (b) the Net Interest Expenses for that financialperiod;

“**Interest Period**”  means a period determined in accordance withClause 7;

“**Interest Rate Swap Rate**”  means, for any applicable period:

(a)           the rateper annum equal to the offered quotation for deposits in Dollars for a periodequal to, or as near as possible equal to, the relevant applicable period whichappears on the appropriate page of the Reuters Monitor Money Rates Service onthe second Business Day prior to the commencement of the applicable period; or

(b)           if norate is quoted on the appropriate page of the Reuters Monitor Money RatesService, the rate per annum determined by the Swap Bank to be the Interest RateSwap Rate for a period equal to, or as near as possible equal to, the relevantapplicable period;

“**ISM Code**” means, in relation to itsapplication to the Approved Manager, each Owner, the Mortgaged Ship owned bythat Owner and its operation:

(a)           ‘TheInternational Management Code for the Safe Operation of Ships and for PollutionPrevention’, currently known or referred to as the ‘ISM Code’, adopted by theAssembly of the International Maritime Organisation by Resolution A.741(18) on4 November 1993 and incorporated on 19 May 1994 into chapter IX of theInternational Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and

(b)           allfurther resolutions, circulars, codes, guidelines, regulations andrecommendations which are now or in the future issued by or on behalf of theInternational Maritime Organisation or any other entity with responsibility forimplementing the ISM Code, including without limitation, the ‘Guidelines onimplementation or administering of the International Safety Management (ISM)Code by Administrations’ produced by the International Maritime Organisationpursuant to Resolution A.788(19) adopted on 25 November 1995,

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

“**ISM Code Documentation**” includes, inrelation to each Mortgaged Ship:

(a)           thedocument of compliance (DOC) and safety management certificate (SMC) issuedpursuant to the ISM Code in relation to that Ship within the periods specifiedby the ISM Code; and

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(b)           allother documents and data which are relevant to the ISM SMS and itsimplementation and verification which the Agent may require; and

(c)           anyother documents which are prepared or which are otherwise relevant to establishand maintain that Ship’s compliance or the compliance of the Owner of that Shipwith the ISM Code which the Agent may require;

“**ISM SMS**” means, inrelation to each Mortgaged Ship, the safety management system for that Shipwhich is required to be developed, implemented and maintained by the Owner ofthat Ship under the ISM Code;

“**Issuing Bank**”  means The Royal Bank of Scotland plc, actingin its capacity as issuing bank through its office at Akti Miaouli 45, 185 36Piraeus, Greece;

“**Japanese Yen**” means thelawful currency for the time being of Japan;

“**ISPS Code**” means the International Ship and Port Facility Security Code adopted bythe International Maritime Organisation Assembly as the same may be amended orsupplemented from time to time;

“**ISPS Code Documentation**”  includes, in relation to each Mortgaged Ship:

(a)           the International ShipSecurity Certificate issued pursuant to the ISPS Code in relation to that Shipwithin the period specified in the ISPS Code; and

(b)           all other documents anddata which are relevant to the ISPS Code and its implementation andverification which the Agent may require;

“**Lender**”  means, subject to Clause 27.6:

(a)           a bank or financialinstitution listed in Schedule 1 and acting through its branch indicated inSchedule 1 (or through another branch notified to the Agent under Clause 27.14)unless it has delivered a Transfer Certificate or Certificates covering theentire amounts of its Commitment and its Contribution; and

(b)           the holder for the timebeing of a Transfer Certificate;

(and includes their respective successors);

“**LIBOR**” means, for anInterest Period (or any other period for which an interest rate is to bedetermined under any provision of a Finance Document):

(a)           the rate per annumequal to the offered quotation for deposits in Dollars or, as the case may be,the relevant Optional Currency for a period equal to, or as near as possibleequal to, the relevant Interest Period (or, as the case may be, such otherperiod) which appears on the appropriate page of the Reuters Money News Serviceat or about 11.00 a.m. (London time) on the Quotation Date for that InterestPeriod (or, as the case may be, such other period) or on such other service asmay be nominated by the British Bankers’ Association as the information vendorfor the purpose of displaying British Bankers’ Association Interest SettlementRates for Dollars or, as the case may be, the relevant Optional Currency); or

(b)           if no rate is quoted onthe appropriate page of the Reuters Money News Service, the rate per annumdetermined by the Agent to be the arithmetic mean (rounded upwards, ifnecessary, to the nearest one-sixteenth of one per cent.) of the rates perannum notified to the Agent by each Lender as the rate at which deposits inDollars****or, as the case may be,the relevant Optional Currency are offered to that

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                Lenderby leading banks in the London Interbank Market at that Lender’s request at orabout 11.00 a.m. (London time) on the Quotation Date for that Interest Period(or, as the case may be, such other period) for a period equal to that InterestPeriod (or, as the case may be, such other period) and for delivery on thefirst Business Day of it;

“**Loan**”  means the aggregate principal amount of theAdvances for the time being outstanding under this Agreement (excluding, forthe avoidance of doubt, the Outstandings);

“**Major Casualty**”  means, in relation to each Mortgaged Ship,any casualty to that Ship in respect of which the claim or the aggregate of theclaims against all insurers, before adjustment for any relevant franchise ordeductible, exceeds $1,000,000 or the equivalent in any other currency;

“**Majority Lenders**”  means:

(a)           at any time when noAdvances are outstanding, Lenders whose Commitments total 66.67 per cent. ofthe Total Commitments; and

(b)           at any other time,Lenders whose Contributions (plus, in the case of the Lender which is also theIssuing Bank, its Outstandings) total 66.67 per cent. of the aggregate of theLoan and the Outstandings;

“**Management Agreement**”  means, in relation to each Mortgaged Ship, anagreement made or to be made between (i) the Owner of that Ship and (ii) theApproved Manager in respect of the commercial and technical management of theShip and, in the plural, means all of them;

“**Manager’s Undertaking**”  means, in relation to each Mortgaged Ship, aletter of undertaking executed or to be executed by the Approved Manager infavour of the Security Trustee in such form as the Lenders may approve orrequire agreeing certain matters in relation to the management of that Ship andsubordinating the rights of the Approved Manager against the Ship and the Ownerthereof to the rights of the Creditor Parties under the Finance Documents and,in the plural, means all of them;

“**Mandatory Cost**”  means the percentage rate per annumcalculated by the Agent in accordance with Schedule 7;

“**Market Value**”  means, in relation to each Mortgaged Ship andeach Fleet Vessel, the market value thereof calculated in accordance withClause 16.4 or, as the case may be, Clause 16.5;

“**Market Value Adjusted Net Worth**”  means, at any time, the amount by which theMarket Value Adjusted Total Assets exceed the Total Liabilities;

“**Market Value Adjusted Total Assets**”  means, at any time, the Total Assets adjustedto reflect the Market Value of all Fleet Vessels (by substituting the value ofeach Fleet Vessel as specified in the Applicable Accounts with the Market Valueof that Fleet Vessel as at the relevant Compliance Date);

“**Margin**” means, 0.75 percent. per annum;

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

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

“**Moratorium Period**”  means the period commencing on the DrawdownDate for the first Advance under Tranche A and ending 5 years thereafter;

“**Mortgage**” means, inrelation to each Mortgaged Ship, a first priority or preferred mortgage on thatShip executed or to be executed by the relevant Owner in favour of the SecurityTrustee or, as the case may be, the Lenders, in each case to be in such form asthe Lenders may approve or require and, in the plural, means all of them;

“**Mortgaged Ship**”  means a Ship which is subject to a Mortgageat any relevant time and, in the plural, means all of them;

“**Negotiation Period**” hasthe meaning given in Clause 6.10;

“**Net Income**” means, inrelation to each Financial Year of the Borrower, the aggregate income of theBorrower’s Group appearing in the Applicable Accounts for that Financial Yearless the aggregate of:

(a)           the amounts incurred bythe Borrower’s Group during that Financial Year as expenses of its business;

(b)           depreciation,amortisation and all interest in respect of all Financial Indebtedness of theBorrower’s Group paid by all members of the Borrower’s Group during thatFinancial Year;

(c)           Net Interest Expenses;

(d)           taxes; and

(e)           other items charged tothe Borrower’s consolidated profit and loss account for the relevant FinancialYear;

“**Net InterestExpenses**”  means, as of anyCompliance Date, the aggregate of all interest, commitment and other fees,commissions, discounts and other costs, charges or expenses accruing due fromall the members the Borrower’s Group during that accounting period lessinterest income received, determined on a consolidated basis in accordance withUSGAAP and as shown in the consolidated statements of income for the Borrower’sGroup in the Applicable Accounts;

“**New Bulk Vessel Type A**”, “**New Bulk Vessel Type B**”, “**New Bulk Vessel Type C**”, “**New Bulk Vessel Type D**”, “**New Container Vessel Type A**”, “**New Container Vessel Type B**”, “**New Container Vessel Type C**” and “**New Container Vessel Type D**”  have the meanings given to them in thedefinition of “**Finance Level**”;

“**Nomination Date**”  means the date determined in accordance withClause 4.8;

“**Optional Currency**” meansany one of Euro, Japanese Yen, Sterling or Swiss Francs or any other majorcurrency which may be approved by all the Lenders (in their sole and 

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absolute discretion) **Provided that**such currency is for the time being freely transferable, freely convertibleinto Dollars and dealt in on the London Interbank Market or, as the case maybe, the European Interbank Market;

“**Outstanding Guarantee Amount**”means, in relation to a Guarantee, the maximum amount for which the Guaranteewas issued less the aggregate amount of all reductions to it which have beenmade in accordance with the provisions of Clause 30.1;

“**Outstandings**” means, atany time, the aggregate of each Outstanding Guarantee Amount at that time;

“**Owner**” means, in relationto:

(a)           each Existing Ship, theExisting Owner thereof; and

(b)           any other Mortgaged Ship,the Approved Guarantor which (i) is the registered owner of such Mortgaged Shipor (ii) acquired, or committed to acquire, such Mortgaged Ship pursuant to theApproved Purchase Contract relative thereto,

and, in the plural, means all of them;

“**Owner Guarantee**”  means, in relation to each Owner, a guaranteeby that Owner of the Borrower’s liabilities under this Agreement and the otherFinance Documents executed or to be executed by the relevant Owner in favour ofthe Security Trustee in such form as the Lenders may approve or require and, inthe plural, means all of them;

“**Owner’s Earnings Account**”  means, in relation to each Mortgaged Ship, anamount in the name of the Owner of such Ship with the Agent in Piraeusdesignated “[name of Ship] - Earnings Account” or any other account (with thator another office of the Agent) which is designated by the Agent as the Owner’sEarnings Account in relation to that Ship for the purposes of this Agreementand, in the plural, means all of them;

“**Participating Member State**”  means each state so described in any EMULegislation;

“**Payment Currency**” has themeaning given in Clause 22.5;

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

(a)           England and Wales;

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

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

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

(e)           a country in whichassets of the company (other than securities issued by, or loans to, relatedcompanies) having a substantial value are situated, in which the companymaintains a permanent place of business, or in which a Security Interestcreated by the company must or should be registered in order to ensure itsvalidity or priority; and

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

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“**Potential Event of Default**”  means an event or circumstance which, withthe giving of any notice, the lapse of time, a determination of the MajorityLenders (in the case of any provision of this Agreement or any of the otherFinance Documents which is made subject to the determination of the MajorityLenders) and/or the satisfaction of any other condition, would constitute anEvent of Default;

“**Pre-Delivery Advance**”  means an Advance under Tranche B which willbe used for the purpose of part-(re)financing the payment of a pre-deliveryinstalment (other than the delivery instalment) for an Approved Ship under ashipbuilding contract which is an Approved Purchase Contract;

“**Pre-Delivery Security Assignment**”  means, in relation to an Approved Ship, afirst priority assignment in favour of the Security Trustee of the ApprovedPurchase Contract for that Approved Ship (save in the case of an ApprovedPurchase Contract which is already the subject of an existing Pre-DeliverySecurity Assignment) and the Refund Guarantee in respect of the instalmentwhich is to be financed by the Pre-Delivery Advance in such form as the Lendersmay approve or require;

“**Quotation Date**” means, inrelation to any Interest Period (or any other period for which an interest rateis to be determined under any provision of a Finance Document):

(a)           in the case of depositsin Dollars or an Optional Currency (other than Euros), the day on whichquotations would ordinarily be given by leading banks in the London InterbankMarket for deposits in the relevant currency to which such rate is to bedetermined for delivery on the first day of that Interest Period or otherperiod; and

(b)           in the case of depositsin Euros, the Target Day on which quotations would ordinarily be given byleading banks in the European Interbank Market for deposits in Euros fordelivery on the first day of that Interest Period or other period;

“**Receiving Bank**”  means American Express Bank Limited, 3 WorldFinancial Centre, 23rd Floor, New York, NY 10285-2300, USA or such other bankas may from time to time be notified by the Agent to the Borrower;

“**Reduction Date**”  means a date on which a reduction is requiredto be made under Clause 9.1;

“**Reference Rate**” means:

(a)           in relation to anAdvance denominated in Dollars or in an Optional Currency (other than Euros),LIBOR; and

(b)           in relation to anAdvance denominated in Euros, EURIBOR;

“**Refund Guarantee**”  means, in relation to an instalment of thepurchase price of an Approved Ship due to the Approved Seller under an ApprovedPurchase Contract, an irrevocable guarantee issued or to be issued by theRefund Guarantor in favour of the relevant Approved Guarantor under the ApprovedPurchase Contract in respect of the refund of that instalment in such form asthe Lenders shall agree;

“**Refund Guarantor**”  means, in relation to a Refund Guarantee, theissuer of that Refund Guarantee;

“**Relevant Person**” has themeaning given in Clause 20.9;

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

“**Safmarine**”  means Safmarine Container Lines NV of DeGerlachekaai 20, 2000 Antwerp, Belgium;

“**Secured Liabilities**”  means all liabilities which the Borrower, theOwners, the other Security Parties or any of them have, at the date of thisAgreement or at any later time or times, under or by virtue of the FinanceDocuments or any judgement relating to the Finance Documents; and for thispurpose, there shall be disregarded any total or partial discharge of theseliabilities, or variation of their terms, which is effected by, or inconnection with, any bankruptcy, liquidation, arrangement or other procedureunder the insolvency laws of any country;

“**Security Interest**”  means:

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

(b)           the rights of the plaintiffunder an action *in rem* in whichthe vessel concerned has been arrested or a writ has been issued or similarstep taken; and

(c)           any arrangement enteredinto by a person (A) the effect of which is to place another person (B) in aposition which is similar, in economic terms, to the position in which B wouldhave been had he held a security interest over an asset of A;

but this definition does not apply to a right of set off or combinationof accounts conferred by the standard terms of business of a bank or financialinstitution;

“**Security Party**”  means each of the Owners and any other person(except a Creditor Party) who, as a surety or mortgagor, as a party to anysubordination or priorities arrangement, or in any similar capacity, executes adocument falling within the last paragraph of the definition of “FinanceDocuments”;

“**Security Period**”  means the period commencing on the date ofthis Agreement and ending on the date on which the Agent notifies the Borrower,the Security Parties, the Lenders and the other Creditor Parties (which noticethe Agent shall give when the conditions set out below are satisfied) that:

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

(b)           no amount is owing orhas accrued (without yet having become due for payment) under any FinanceDocument;

(c)           neither the Borrowernor any Security Party has any future or contingent liability under Clause 21,22 or 23 or any other provision of this Agreement or another Finance Document;

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

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(e)           each Guarantee has beenreturned to the Issuing Bank by the relevant Beneficiary endorsed to the effectthat it is cancelled;

“**Security Trustee**”  means The Royal Bank of Scotland plc, in itscapacity as security trustee for the Lenders, the Swap Bank and the IssuingBank under the Finance Documents through its office at Akti Miaouli 45, 185 36Piraeus, Greece, or any successor of it in such capacity appointed under clause5 of the Agency and Trust Agreement;

“**Settlement Amount**” means, in relation to aGuarantee, the amount payable by the Issuing Bank to the Beneficiary in respectof the Guarantee;

“**Settlement Date**” means, in relation to aGuarantee, the date on which payment of the Settlement Amount is due to theBeneficiary in respect of the Guarantee;

“**Ships**” means, together, the Existing Ships and the Approved Ships and, in thesingular, means any of them;

“**Spot Rate of Exchange**”****means, in relation to an Optional Currencyand in respect of any Interest Period, the Agent’s spot rate of exchange forthe purchase in the London Interbank Market or, as the case may be, theEuropean Interbank Market, of that Optional Currency with Dollars at or about11.00 a.m. (London Time) on the Quotation Date for the relevant InterestPeriod;

“**Sterling**”** **meansthe lawful currency for the time being of the United Kingdom;

“**Swap Bank**”  means The Royal Bank of Scotland plc, actingin its capacity as swap bank through its office at Akti Miaouli 45, 185 36Piraeus, Greece;

“**Swap Exposure**” means, asat any relevant date, the amount certified by the Swap Bank to the Agent to bethe aggregate net amount in Dollars which would be payable by the Borrower tothe Swap Bank under (and calculated in accordance with) section 6(e) (Paymentson Early Termination) of the Master Agreement if an Early Termination Date hadoccurred on the relevant date in relation to all continuing DesignatedTransactions entered into between the Borrower and the Swap Bank;

“**Swiss Francs**” means thelawful currency for the time being of the Swiss Federation;

“**Target Day**” means a dayon which the Trans-European Automated Real-time Gross settlement ExpressTransfer system is open, which is, at the date of this Agreement, any day(other than a Saturday or Sunday) other than Christmas Day and New Year’s Day;

“**Third Stage**”  means the third stage of European economicand monetary union pursuant to the Treaty on European Union;

### “**Total Assets**”means, as of any Compliance Date, the aggregate value of all assets of theBorrower’s Group included in the Applicable Accounts as “current assets” andthe value of all investments (valued in accordance with USGAAP) and all othertangible and intangible assets of the Borrower’s Group properly included in theApplicable Accounts as “fixed assets” in accordance with USGAAP;

“**Total Liabilities**” means,as of any Compliance Date, Total Assets less Book Net Worth;

“**Total Loss**”  means, in relation to each Mortgaged Ship:

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

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(b)           any expropriation, confiscation,requisition or acquisition of that Ship, whether for full consideration, aconsideration less than her proper value, a nominal consideration or withoutany consideration, which is effected by any government or official authority orby any person or persons claiming to be or to represent a government orofficial authority, excluding a requisition for hire for a fixed period notexceeding one year without any right to an extension;

(c)           any condemnation ofthat Ship by any tribunal or by any person or person claiming to be a tribunal;and any arrest, capture, seizure or detention of that Ship (including anyhijacking or theft) unless she is within 30 days redelivered to the fullcontrol of the Owner of that Ship;

“**Total Loss Date**”  means, in relation to each Mortgaged Ship:

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

(b)           in the case of aconstructive, compromised, agreed or arranged total loss of that Ship, theearliest of:

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

(ii)           the date of anycompromise, arrangement or agreement made by or on behalf of the Owner of thatShip with that Ship’s insurers in which the insurers agree to treat that Shipas a total loss; and

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

“**Tranches**”  means Tranche A and Tranche B and, in thesingular, means either of them;

“**Tranche A**”  means, together, the Tranche A AdditionalAdvances, Tranche A Advance 1, Tranche A Advance 2, Tranche A Advance 3 andTranche A Advance 4;

“**Tranche A Additional Advances**”  means the aggregate principal amount of up to$62,000,000 which may be drawn by the Borrower in accordance with Clause 4.2consisting of each Advance under Tranche A in respect of a Tranche A AdditionalAdvance Ship or, as the context requires, the principal amount thereof for thetime being advanced and outstanding under this Agreement;

“**Tranche A Additional Advance Ship**”  means any Approved Ship which is financed bya Tranche A Additional Advance and in the plural means all of them;

“**Tranche A Advance 1**”  means the aggregate principal amount of up to$38,000,000 which may be drawn by the Borrower in accordance with Clause 4.2consisting of each Advance under Tranche A in respect of the Tranche A Advance1 Ship or, as the context requires, the principal amount thereof for the timebeing advanced and outstanding under this Agreement;

“**Tranche A Advance 1 Balloon**”  means the balloon amount calculated inaccordance with Clauses 9.1(a) and 9.2;

“**Tranche A Advance 2**”  means the aggregate principal amount of up to$22,000,000 which may be drawn by the Borrower in accordance with Clause 4.2consisting of each Advance under Tranche A in respect of the Tranche A Advance2 Ships or, as the context 

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requires, the principal amount thereof for the time being advanced andoutstanding under this Agreement;

“**Tranche A Advance 2 Balloon**”  means the balloon amount calculated inaccordance with Clauses 9.1(b) and 9.2;

“**Tranche A Advance 3**”  means the aggregate principal amount of up to$46,000,000 which may be drawn by the Borrower in accordance with Clause 4.2consisting of each Advance under Tranche A in respect of the Tranche A Advance3 Ships or, as the context requires, the principal amount thereof for the timebeing advanced and outstanding under this Agreement;

“**Tranche A Advance 3 Balloon**”  means the balloon amount calculated inaccordance with Clauses 9.1(c) and 9.2;

“**Tranche A Advance 4**”  means the aggregate principal amount of up to$32,000,000 which may be drawn by the Borrower in accordance with Clause 4.2consisting of each Advance under Tranche A in respect of the Tranche A Advance4 Ships or, as the context requires, the principal amount thereof for the timebeing advanced and outstanding under this Agreement;

“**Tranche A Advance 4 Balloon**”  means the balloon amount calculated inaccordance with Clauses 9.1(d) and 9.2;

“**Tranche A Balloons**”  means the Tranche A Advance 1 Balloon, theTranche A Advance 2 Balloon, the Tranche A Advance 3 Balloon and the Tranche AAdvance 4 Balloon and, in the singular, means any of them;

“**Tranche A Limit**”  means an amount not exceeding (initially)$200,000,000 in aggregate which may be reduced by any cancellations orreductions made pursuant to this Agreement;

“**Tranche B**” means the aggregate principal amount of up to $500,000,000 which may bedrawn by the Borrower in accordance with Clause 4.2 consisting of each Advanceunder Tranche B in respect of an Approved Ship or, as the context requires, theaggregate principal amount thereof for the time being advanced and outstandingunder this Agreement;

“**Tranche B Limit**”  means an amount not exceeding (initially)$500,000,000 in aggregate which may be reduced by any cancellations orreductions made pursuant to this Agreement;

“**Transaction” **has the meaning given in theMaster Agreement;

“**Transfer Certificate**”  has the meaning given in Clause 27.2;

“**Treaty on European Union**”  means the Treaty of Rome of 25 March 1957, asamended by the Single European Act 1986 and the Maastricht Treaty of 7 February1992;

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

“**USGAAP**” means generallyaccepted accounting principles as from time to time in effect in the UnitedStates of America.

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## **1.2****         ****Constructionof certain terms.**  In thisAgreement:

“**administration notice**”means a notice appointing an administrator, a notice of intended appointmentand any other notice which is required by law (generally or in the caseconcerned) to be filed with the court or given to a person prior to, or inconnection with, the appointment of an administrator;

“**approved**”  means, for the purposes of Clause 14,approved in writing by the Agent, with the authorisation of the MajorityLenders;

“**asset**” includes everykind of property, asset, interest or right, including any present, future orcontingent right to any revenues or other payment;

“**company**” includes anypartnership, joint venture and unincorporated association;

“**consent**” includes anauthorisation, 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 whichremains unascertained;

“**document**” includes adeed; also a letter or fax;

“**excess risks**”  means, in relation to each Mortgaged Ship,(i) the proportion of claims for general average, salvage and salvage chargeswhich are not recoverable as a result of the value at which that Ship isassessed for the purpose of such claims exceeding her hull and machineryinsured value and (ii) collision liabilities not recoverable in full under theapplicable hull and machinery insurance by reason of such liabilities exceedingsuch proportion of the insured value of that Ship as is covered thereunder;

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

“**financial institution**”  includes, without limitation, any trust, fundor other entity whatsoever which has been established for, or is engaged in,making, purchasing or investing in loans, securities or any other assets;

“**law**” includes any form ofdelegated legislation, any order or decree, any treaty or internationalconvention and any regulation or resolution of the Council of the EuropeanUnion,  the European Commission, theUnited Nations or its Security Council;

“**legal** or administrativeaction” means any legal proceeding or arbitration and any administrative orregulatory action or investigation;

“**liability**” includes everykind of debt or liability (present or future, certain or contingent), whetherincurred as principal or surety or otherwise;

“**months**”  shall be construed in accordance with Clause1.3;

“**obligatory insurances**”  means, in relation to each Mortgaged Ship,all insurances effected, or which the Owner of that Ship is obliged to effect,under Clause 14 or any other provision of this Agreement or another FinanceDocument;

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

“**person**”  includes any company; any state, politicalsub-division of a state and local or municipal authority; and any internationalorganisation;

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“**policy**”, in relation toany insurance, includes a slip, cover note, certificate of entry or otherdocument evidencing the contract of insurance or its terms;

“**protection and indemnity risks**”means the usual risks covered by a protection and indemnity association managedin London, including, but not limited to, pollution, freight, demurrage anddetention risks and the proportion (if any) of any sums payable to any otherperson or persons in case of collision which are not recoverable under the hulland machinery policies by reason of the incorporation in them of Clause 6 ofthe International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the InstituteTime Clauses (Hulls) (1/11/95) or clause 8 of the Institute Time Clauses (Hulls)(1/10/83) or the Institute Amended Running Down Clause (1/10/71) or theConditions and Plan of the Swedish Club or any equivalent provision;

“**regulation**” includes anyregulation, rule, official directive, request or guideline whether or nothaving the force of law of any governmental, intergovernmental or supranationalbody, agency, department or regulatory, self-regulatory or other authority ororganisation;

“**subsidiary**”  has the meaning given in Clause 1.4;

“**successor**” includes anyperson who is entitled (by assignment, novation, merger or otherwise) to anyother person’s rights under this Agreement or any other Finance Document (orany interest in those rights) or who, as administrator, liquidator orotherwise, is entitled to exercise those rights; and in particular referencesto a successor include a person to whom those rights (or any interest in thoserights) 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 politicalsub-division of a state or any local or municipal authority (including any suchimposed in connection with exchange controls), and any connected penalty,interest or fine; and

“**war risks**” includes therisk of mines, blocking and trapping, missing vessel, political risks,deprivation, confiscation and all risks excluded by clause 29 of theInternational Hull Clauses (1/11/02 or 1/11/03), clause 24 of the InstituteTime Clauses (Hulls)(1/11/95) or clause 33 of the Institute Time Clauses(Hulls) (1/10/83) or in the Conditions and Plan of the Swedish Club.

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

### (a)           on the Business Dayfollowing the numerically corresponding day if the numerically correspondingday is not a Business Day or, if there is no later Business Day in the samecalendar month, on the Business Day preceding the numerically correspondingday; or

### (b)           on the last BusinessDay in the relevant calendar month, if the period started on the last BusinessDay in a calendar month or if the last calendar month of the period has nonumerically corresponding day;

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

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

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

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### (b)           P has direct orindirect control over a majority of the voting rights attaching to the issuedshares of S; or

### (c)           P has the direct orindirect power to appoint or remove a majority of the directors of S; or

### (d)           P otherwise has thedirect or indirect power to ensure that the affairs of S are conducted in accordancewith the wishes of P;

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

## **1.5****          GeneralInterpretation.**

### (a)           In this Agreement:

#### (i)            references to, or to aprovision of, a Finance Document or any other document are references to it asamended or supplemented, whether before the date of this Agreement orotherwise;

#### (ii)           references to, or to aprovision of, any law include any amendment, extension, re-enactment orreplacement, whether made before the date of this Agreement or otherwise;

#### (iii)          words denoting thesingular number shall include the plural and vice versa; and

#### (iv)          where a determination oropinion is stated to be “conclusive” it shall be binding on the relevant partysave for manifest error;

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

### (c)           The clause headingsshall not affect the interpretation of this Agreement.

# **2****             ****FACILITIES**

## **2.1****         ****Amount offacilities.**  Subject to theother provisions of this Agreement (including, without limitation, Clause 4.2),the Lenders shall make available to the Borrower a revolving credit facilitynot exceeding $700,000,000 in aggregate at any time.

## **2.2****         ****Lenders’participations in Advances.** Subject to the other provisions of this Agreement, each Lender shallparticipate in each Advance in the proportion which, as at the relevantDrawdown Date, its Commitment bears to the Total Commitments.

# **3****             ****POSITIONOF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS**

## **3.1****         ****Interests ofLenders, Swap Bank and Issuing Bank several.**  The rights of the Lenders, the Swap Bank andthe Issuing Bank under this Agreement and the Master Agreement are several;accordingly:

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

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

### without joining the Agent, the SecurityTrustee, any other Lender, the Swap Bank or the Issuing Bank as additionalparties in the proceedings.

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## **3.2****         ****Proceedingsby individual Lender, Swap Bank or Issuing Bank.**  However, without the prior consent of theMajority Lenders, no Lender nor the Swap Bank nor the Issuing Bank may bringproceedings in respect of:

### (a)           any other liability orobligation of the Borrower or a Security Party under or connected with aFinance Document or the Master Agreement; or

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

## **3.3****         ****Obligationsseveral.**  The obligations ofthe Lenders, the Swap Bank and the Issuing Bank under this Agreement and of theSwap Bank under the Master Agreement are several; and a failure of a Lender,the Swap Bank or the Issuing Bank to perform its obligations under thisAgreement or of the Swap Bank to perform its obligations under the MasterAgreement shall not result in:

### (a)           the obligations of theother Lenders or (as the case may be) the Swap Bank or (as the case may be) theIssuing Bank being increased; nor

### (b)           the Borrower, anySecurity Party or any other Creditor Party being discharged (in whole or inpart) from its obligations under any Finance Document,

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

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

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

### (b)           any instruction or authorisation given bythe Majority Lenders to the Agent or the Security Trustee under or inconnection with any Finance Document (subject always to Clause 28.2);

### (c)           any action taken (or in good faithpurportedly taken) by the Agent or the Security Trustee in accordance with suchan instruction or authorisation.

## **3.5****         ****Reliance onaction of Agent.**  However, theBorrower and each Security Party:

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

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

## **3.6****         ****Construction.**  In Clauses 3.4 and 3.5 references to actiontaken include (without limitation) the granting of any waiver or consent, anapproval of any document and an agreement to any matter.

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# **4****             ****DRAWDOWN**

## **4.1****         ****Request forAdvance.**  Subject to thefollowing conditions, the Borrower may request an Advance to be made undereither Tranche A or Tranche B by ensuring that the Agent receives a completedDrawdown Notice not later than 11.00 a.m. (Greek time) 3 Business Days prior tothe intended Drawdown Date.

## **4.2****         ****Availability.**  The conditions referred to in Clause 4.1 arethat:

### (a)           the Advance shall relate to one of thefollowing:

#### (i)            the Tranche A Additional Advance Ships;

#### (ii)           the Tranche A Advance 1 Ship;

#### (iii)          the Tranche A Advance 2 Ships;

#### (iv)          the Tranche A Advance 3 Ships;

#### (v)           the Tranche A Advance 4 Ships; or

#### (vi)          an Approved Ship;

### (b)           the first drawdown of an Advance relating toany of the Tranche A Additional Advance Ships, the Tranche A Advance 1 Ship,the Tranche A Advance 2 Ships, the Tranche A Advance 3 Ships, the Tranche AAdvance 4 Ships shall be:

#### (i)            made not later than 28 February 2007 (orsuch later date as Lenders may agree with the Borrower);

#### (ii)           applied first in refinancing the ExistingIndebtedness and then, once the Existing Indebtedness has been permanentlyreduced to zero, applied in refinancing the equity of the Approved Guarantorsowning the Existing Ships;

### (c)           the first drawdown of an Advance relating toan Approved Ship shall be:

#### (i)            made on or after the first drawdown of anAdvance under Tranche A; and

#### (ii)           applied to assist an Approved Guarantor in(re)financing the acquisition cost of that Approved Ship;

### (d)           in the case of a second or subsequentdrawdown of an Advance relating to any of the Tranche A Additional AdvanceShips, the Tranche A Advance 1 Ship, the Tranche A Advance 2 Ships, the TrancheA Advance 3 Ships, the Tranche A Advance 4 Ships or an Approved Ship, theDrawdown Date of the Advance shall be a Business Day during the AvailabilityPeriod for that Advance;

### (e)           the amount of the Advance shall not exceed:

#### (i)            in the case of an Advance under Tranche AAdvance 1 when aggregated with the Advance(s) under Tranche A Advance 1 alreadydrawn down and outstanding, the maximum aggregate amount determined inaccordance with Clause 9.1(a);

#### (ii)           in the case of an Advance under Tranche AAdvance 2 when aggregated with the Advance(s) under Tranche A Advance 2 alreadydrawn down and outstanding, the maximum aggregate amount determined inaccordance with Clause 9.1(b);

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#### (iii)          in the case of an Advance under Tranche AAdvance 3 when aggregated with the Advance(s) under Tranche A Advance 3 alreadydrawn down and outstanding, the maximum aggregate amount determined inaccordance with Clause 9.1(c);

#### (iv)          in the case of an Advance under Tranche AAdvance 4 when aggregated with the Advance(s) under Tranche A Advance 4 alreadydrawn down and outstanding, the maximum aggregate amount determined inaccordance with Clause 9.1(d);

#### (v)           in the case of a Tranche A AdditionalAdvance the lesser of (A) an amount, when aggregated with the Tranche AAdditional Advance(s) already drawn down and outstanding, equal to the maximumaggregate amount determined in accordance with Clause 9.1(e) and (ii) an amountwhich does not exceed 80 per cent. of the Market Value of the Approved Ship tobe financed by that Tranche A Additional Advance (with such Market Value beingdetermined in accordance with the valuations referred to in paragraph 13 ofSchedule 3, Part B);

#### (vi)          (save in the case of a Pre-Delivery Advanceto which Clause 4.2(e)(vii) applies instead) in the case of an Advance underTranche B in respect of an Approved Ship when aggregated with the Advance(s)under Tranche B already drawn down and outstanding in respect of that ApprovedShip and the Outstanding Guarantee Amount of each Guarantee relating to thatApproved Ship, the maximum aggregate amount determined in accordance withClause 9.1(e); or

#### (vii)         in the case of a Pre-Delivery Advance underTranche B in respect of an Approved Ship:

##### (A)          when aggregated with the Advance(s) underTranche B already drawn down and outstanding in respect of that Approved Shipand the Outstanding Guarantee Amount of each Guarantee relating to thatApproved Ship, the Finance Level; and

##### (B)           80 per cent. of the net amount of the pre-deliveryinstalment which is the subject of such Pre-Delivery Advance;

### (f)            when such Advance is aggregated with allother then outstanding Advances under that Tranche, the aggregate amount ofsuch Advances does not exceed the Tranche A Limit or (as the case may be) theTranche B Limited;

### (g)           in the case of a Pre-Delivery Advance whenaggregated with the Pre-Delivery Advance(s) already drawn down, the aggregateamount of such Advances does not exceed $200,000,000 (or such higher amount asmay be agreed from time to time between the Lenders and the Agent (acting intheir sole and absolute discretion));

### (h)           in the case of an Advance which is to bedrawndown on the Delivery Date of an Approved Ship to refinance part or all ofthe Pre-Delivery Advance(s) in relation to that Approved Ship, the Borrower hasgiven the Agent at least 3 months’ notice of the Borrower’s intention to borrowsuch Advance and the amount of such Advance;

### (i)            each Advance shall be drawn down in anamount of at least $1,000,000 or a higher integral multiple of $1,000,000;

### (j)            if any part of the Total Commitmentsrelating to Tranche A or Tranche B have not been borrowed before the end of theAvailability Period applicable thereto, the Total Commitments shall on thatdate be permanently cancelled by an amount equal to such undrawn amount;

### (k)           the amount of, and Interest Periodapplicable to, each Advance (including the requested Advance) is compatiblewith the anticipated reductions pursuant to Clause 9.1; and

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### (l)            if the Borrower has elected that an Advanceunder Tranche B should take the form of a Guarantee to be issued by the IssuingBank and the Issuing Bank has (at its absolute discretion) agreed to suchelection:

#### (i)            the Agent must receive, together with theDrawdown Notice, a final draft of the form of Guarantee which the Borrower isrequesting to be issued on the intended Drawdown Date and which the Borrowerintends to use in the normal course of its business; and

#### (ii)           the form of the Guarantee has to be approvedby the Issuing Bank at least 2 Business Days prior to the intended DrawdownDate but it must in any event contain express provisions:

##### (A)          limiting the Outstanding Guarantee Amount ofthe Guarantee to an amount which, in the reasonable opinion of the IssuingBank, from time to time will not result in a breach of the maximum limits setout in Clause 9.1;

##### (B)           limiting the total amount payable by theIssuing Bank under that Guarantee to a stated maximum amount in Dollars; and

##### (C)           stating that that Guarantee shall expire orbe reduced to zero not later than the final Reduction Date,

##### save that, inthe case of a form of Guarantee which does not comply with paragraphs (A) or(C), the Issuing Bank may in its absolute discretion approve such Guaranteesubject to any conditions it may require including, in any case, full cashsecurity for the additional exposure of the Issuing Bank.

## **4.3****         ****Purpose ofAdvances.**  The Borrowerundertakes with each Creditor Party to use each Advance only for the purposesstated in the Recitals to this Agreement.

## **4.4****         ****Notificationto Lenders of receipt of Drawdown Notice.**  The Agent shall promptly notify the Lenders(and, if applicable, the Issuing Bank) it has received a Drawdown Notice andthe Agent shall inform each Lender (and, if applicable, the Issuing Bank) of:

### (a)           the amount of the Advance and the DrawdownDate;

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

### (c)           the duration of the first Interest Periodrelative to such Advance.

## **4.5****         ****DrawdownNotice irrevocable.**  ADrawdown Notice must be signed by a duly authorised person on behalf of theBorrower; and once served, a Drawdown Notice cannot be revoked without theprior consent of the Agent, acting with the authorisation of the MajorityLenders (which authorisation shall not be unreasonably withheld).

## **4.6****         ****Lenders tomake available Contributions/Issuing Bank to make available Guarantee.**

### (a)           If the Borrower has elected for an Advanceto be made available in the form of a Guarantee, Clauses 4.6(b), 4.7, 6, 7 and9 shall not apply in relation to such Advance.

### (b)           Subject to the provisions of this Agreement,each Lender shall, on and with value on each Drawdown Date, make available tothe Agent for the account of the Borrower the amount due from that Lender onthat Drawdown Date under Clause 2.2.

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## **4.7****         ****Disbursementof Advances.**  Subject to theprovisions of this Agreement the Agent shall, on and with value on eachDrawdown Date, pay to the Borrower the amounts which the Agent receives fromthe Lenders under Clause 4.6(b); and that payment to the Borrower shall bemade:

### (a)           in the case of anAdvance under Tranche A which shall be used to refinance the ExistingIndebtedness, to such account of the Existing Owners (or any of them) as may bespecified by the Agent to the Borrower, with such Advance being applied tofully prepay the Existing Indebtedness;

### (b)           in the case of eachother Advance or any amount referred to in sub-clause (a) above in excess ofthat required to fully prepay the Existing Indebtedness, to the EarningsAccount nominated by the Borrower in the relevant Drawdown Notice and, ifapplicable, subject to such conditions or restrictions as the Agent mayreasonably impose; and

### (c)           in each case, in thelike funds as the Agent received the payments from the Lenders.

## **4.8****         ****Approval ofShips**.

### (a)           Each Ship nominated bythe Borrower to be an Approved Ship for the purposes of this Agreement shall benominated by the Borrower no later than the date falling 364 days after thedate of this Agreement (as may be extended pursuant to Clause 4.8(b), the “**Nomination Date**”) and approved by all the Lenders as such **Provided that** if a Lender fails to respond to the Agentwithin 10 Business Days of the Agent’s notice to the Lenders seeking theirapproval of a Ship as an Approved Ship, that Lender shall be deemed to havegiven its approval.

### (b)           The Lenders shall beentitled from time to time to review and consider the extension of theNomination Date in relation to all or any part of Tranche B.  If all the Lenders, acting in their sole andabsolute discretion, agree to extend the Nomination Date in accordance withthis Clause 4.8 the Agent shall send to the Borrower a notice in writingadvising it of the new Nomination Date and the available amount of Tranche Bduring the period in which the Nomination Date has been extended **Provided that** the Lenders shall, in their sole and absolutediscretion, determine how much of the Tranche B Limit may be made available tothe Borrower during any such extended period and the length of any suchextended period and if the Lenders agree to make available less than the wholeof the Tranche B Limit, the balance shall be permanently cancelled and theCommitments of the Lenders shall be permanently reduced by (in aggregate) theamount which has been so cancelled.

# **5****             ****CURRENCYOPTION**

## **5.1****         ****Notice ofOptional Currency. **Subject tothe following provisions of this Clause 5 and the other provisions of thisAgreement, the Borrower may elect that up to 2 Advances each be denominated inan Optional Currency during an Interest Period applicable to each such Advanceby ensuring that the Agent receives, not later than 11.00 a.m. (London time) onthe second Business Day before the commencement of the Interest Period, anotice specifying the Optional Currency in which the Borrower wishes suchAdvance to be denominated during the Interest Period and the amount (inDollars) to be denominated in such Optional Currency **Providedalways that**:

### (a)           the Loan may be dividedat any time into Advances denominated in no more than 3 different currencieswith no more than 2 Advances being denominated in Optional Currencies;

### (b)           the amount of eachAdvance which is denominated in an Optional Currency shall not be less than thehigher of:

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#### (i)            the equivalent in therelevant Optional Currency of $1,000,000 (determined by converting thatOptional Currency into Dollars at the applicable Dollar Spot Rate of Exchange);or

#### (ii)           an amount equal to atleast 20 per cent. of the aggregate amount of all Advances denominated inOptional Currencies (and the amounts referred to in this sub-Clause (ii) shallbe calculated by nominally converting into Dollars each Advance denominated inan Optional Currency using the Dollar Spot Rate of Exchange applicable to therelevant Interest Period or Interest Periods);

### (c)           the aggregate amount ofthe Advances denominated in Optional Currencies (when such Advances arenominally converted into Dollars using the Dollar Spot Rate of Exchangeapplicable to the relevant Interest Period or Interest Periods) shall notexceed the lesser of:

#### (i)            $100,000,000; or

#### (ii)           50 per cent. of theLoan;

### (d)           no Event of Default orPotential Event of Default shall have occurred or be continuing; and

### (e)           the Lenders aresatisfied that funds in the Optional Currency requested by the Borrower areavailable to them in the normal course of business for the duration of theInterest Period.

## **5.2****         ****Failure togive notice. **If the Borrowerfails to give a notice in accordance with, and by the time mentioned in Clause5.1 for any applicable Interest Period, the whole of the relevant Advance shallbe denominated in Dollars for the Interest Period.

## **5.3****         ****Agent tonotify the Lenders. **The Agentshall notify the Lenders, promptly upon receiving a notice under Clause 5.1, ofthe Optional Currency requested by the Borrower in such notice.

## **5.4****          Objectionby a Lender to requested Optional Currency.  **If, after the Borrower has requested that an Advance be denominatedin an Optional Currency during an Interest Period, any Lender notifies theAgent by 11.00 a.m. (London time) on the Business Day falling immediately priorto the commencement of the Interest Period that it is unable to fund itself inthe Optional Currency requested by the Borrower, the whole of the relevantAdvance shall be denominated in Dollars for the Interest Period.

## **5.5****         ****Initialadvance in an Optional Currency.  **Ifan Advance is to be made available in an Optional Currency for the firstInterest Period applicable to that Advance, the Lenders will make available tothe Borrower in accordance with Clause 2.2 an amount determined by convertinginto that Optional Currency the Dollar amount of the Advance at the Spot Rateof Exchange applicable to the Interest Period.

## **5.6****         ****Determinationof Continuing Balance at end of Interest Period.**  At the end of each Interest Period in respectof an Advance (the **“preceding Interest Period”**),the Agent shall determine the amount of the Loan during the immediatelysucceeding Interest Period for that Advance (the **“succeedingInterest Period”**) (such amount being hereinafter referred to as the **“Continuing Balance”**). The Agent’s determination of the Continuing Balance shall be made in thefollowing manner (immediately after the Borrower has made any repayment and/orprepayment of all or any part of the Loan which it is required to make at thattime, and any reduction of the Total Commitments, pursuant to Clause 9):

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### (a)           bynotionally converting any Advances denominated in an Optional Currency intoDollars at the Dollar Spot Rate of Exchange applicable to thesucceeding Interest Period and aggregating such Advances with any Advances atthat time denominated in Dollars (such aggregate amount being hereinafterreferred to as the “**DollarEquivalent Amount of the Loan**”);

### (b)           by notionally converting any Advances under Tranche Adenominated in an Optional Currency into Dollars at the Dollar Spot Rate ofExchange applicable to the succeeding Interest Period and aggregating suchAdvances with any Advances under Tranche A at that time denominated in Dollars(such aggregate amount being hereinafter referred to as the “**Dollar Equivalent Amount of Tranche A**”);

### (c)           by notionally converting any Advances under Tranche Bdenominated in an Optional Currency into Dollars at the Dollar Spot Rate ofExchange applicable to the succeeding Interest Period and aggregating suchAdvances with any Advances under Tranche B at that time denominated in Dollars(such aggregate amount being hereinafter referred to as the “**Dollar Equivalent Amount of Tranche B**”); and

### (d)           if, on the date on which the Agent makes itsdetermination:

#### (i)            the Dollar Equivalent Amount of the Loan exceeds theTotal Commitments, the Borrower shall forthwith prepay an amount equal to suchexcess (and the provisions of sub-paragraphs (ii) and (iii) shall apply to thebalance of the Dollar Equivalent Amount of the Loan (after the application ofthe prepayment to be made pursuant to this sub-paragraph (i));

#### (ii)           the Dollar Equivalent Amount of Tranche A exceeds theTranche A Limit (but not the Total Commitments), the Borrower shall prepay suchamount so that, following the application of such prepayment against Tranche A,the Dollar Equivalent Amount of Tranche A does not exceed the Tranche A Limit;

#### (iii)          the Dollar Equivalent Amount of Tranche B exceeds theTranche B Limit (but not the Total Commitments), the Borrower shall prepay suchamount so that, following the application of such prepayment against Tranche B,the Dollar Equivalent Amount of Tranche B does not exceed the Tranche B Limit;and

#### (iv)          the circumstances referred to in sub-paragraphs (i),(ii) and (iii) do not apply, the Continuing Balance shall be equal to the Loanat that time.

## **5.7****         ****Continuation of an Advance in the samecurrency. **If an Advance is to be continued during thesucceeding Interest Period in the same Optional Currency in which it wasdenominated during the preceding Interest Period, the Agent shall:

### (a)           first determine the Continuing Balance of the Loan inaccordance with Clause 5.6; and

### (b)           thereafter:

#### (i)            if the relevant Advance has been reduced by anyprepayment and/or repayment (pursuant to Clause 5.6 and/or Clause 9), theAdvance shall continue to be made available during the succeeding InterestPeriod in the amount so reduced unless the effect of the prepayment and/orrepayment is to fully repay the Advance in which case the Advance shall notcontinue to be made available in the succeeding Interest Period; and

#### (ii)           if no prepayment or repayment is required to be madepursuant to this Agreement, the Advance will continue to be made availableduring the succeeding Interest Period in the same amount as the Advance wasoutstanding (in the relevant Optional Currency) at the end of the precedingInterest Period.

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## **5.8****         ****Continuation of an Advance in a differentcurrency. **If an Advance is to be continued during thesucceeding Interest Period in a different currency from that in which it wasdenominated during the preceding Interest Period:

### (a)           the Agent shall:

#### (i)            first determine the Continuing Balance of the Loan inaccordance with Clause 5.6;

#### (ii)           secondly:

##### (A)          if the relevant Advance has been reduced by any prepayment and/or repayment(pursuant to Clause 5.6 and/or Clause 9), the Advance shall continue to be madeavailable during the succeeding Interest Period in the amount so reduced unlessthe effect of the prepayment and/or repayment is to fully repay the Advance inwhich case the Advance shall not continue to be made available in thesucceeding Interest Period; and

##### (B)           if no prepayment or repayment is required to be made pursuant to thisAgreement, the Advance will continue to be made available during the succeedingInterest Period in the same amount as the Advance was outstanding (in therelevant Optional Currency) at the end of the preceding Interest Period; and

#### (iii)          thirdly, conditional upon the repayments required byparagraphs (a) and (b) and subject to the other provisions of this Agreement,the relevant Advance shall be re-advanced forthwith on terms that:

##### (A)          if the Advance is to be denominated in Dollars during the succeedingInterest Period, the Lenders shall make available to the Borrower in accordancewith Clause 2.2 an amount in Dollars (the “**relevant Dollar amount**”)determined by converting into Dollars the amount of the relevant Advance (or,if applicable pursuant to sub-paragraph (a)(ii)(A) of this Clause 5.8, itsremaining balance) in the currency in which it is then denominated on the basisof the Dollar Spot Rate of Exchange applicable to the succeeding InterestPeriod; and

##### (B)           if the relevant Advance is to be denominated in another Optional Currencyduring the succeeding Interest Period, the Lenders shall make available to theBorrower in accordance with Clause 2.2 an amount in the other Optional Currencydetermined by converting into that other Optional Currency the relevant Dollaramount on the basis of the Spot Rate of Exchange applicable to the succeedingInterest Period;

### (b)           the Lenders may, with value on the first day of thesucceeding Interest Period, apply a sum equal to the amount (determined asaforesaid) to be advanced (or, as the case may be, so much of that amount asmay be necessary) in purchasing an amount in the currency in which the relevantAdvance is then outstanding sufficient to make the repayment (or so much of therepayment as can be purchased with the amount to be advanced on that date) andshall on receipt thereof apply the amount so purchased in or towards therepayment;

### (c)           (without prejudice to the other provisions of thisClause 5) if:

#### (i)            after the purchase and application referred to inClause 5.8(b) any moneys remain owing to the Lenders or any moneys remain to beadvanced to the Borrower by the Lenders on that date in respect of the relevantAdvance; or

#### (ii)           for any reason the application is not or cannot beeffected on that date;

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the Agent shall promptly notify the Borrower of thefact and of the amount so owing or to be advanced and the Borrower, subject toClause 5.6, shall forthwith pay the amount to the Agent for the account of theLenders or (as the case may be), and so long as no Event of Default hasoccurred and is continuing, the Lenders shall forthwith in accordance withClause 2.2 advance the amount to the Borrower; and

### (d)           the Borrower shall indemnify each Lender on demandagainst all costs, expenses, liabilities and losses sustained as incurred as aresult of or in connection with the operation of this Clause 5.

## **5.9****         ****Determination of Continuing Balance duringInterest Period.**  The Agent may at any time during an InterestPeriod during which an Advance is denominated in an Optional Currency determinethe Continuing Balance of the Loan by first determining the Dollar EquivalentAmount of the Loan and if the Agent determines:

### (a)           that theDollar Equivalent Amount of the Loan is greater than 110 per cent. of the TotalCommitments (for the purposes of this paragraph (a), the “**excess**”), theBorrower shall, within 5 Business Days of notice from the Agent to such effect,pay to a pledged deposit account to be opened in the name of the Borrower withthe Agent (for the account of the Lenders) an amount in Dollars equal to theexcess (but taking account of any moneys already paid pursuant to this Clause5.9 and not then applied as referred to below) and the provisions of paragraphs(b) and (c) below shall apply to the balance of the Dollar Equivalent Amount ofthe Loan.  Amounts paid pursuant to thisClause 5.9 shall be retained by the Agent and applied on the last day of eachInterest Period in respect of the whole of the relevant Advance and on eachReduction Date in or towards satisfaction of the Borrower’s actual obligationto make a payment in accordance with Clause 5.6;

### (b)           that theDollar Equivalent Amount of Tranche A exceeds the Tranche A Limit (but not theTotal Commitments), the Borrower shall, on the first date on which interest ispayable in respect of any Advance under Tranche A pursuant to Clause 6, prepaysuch amount so that, following the application of such prepayment againstTranche A, the Dollar Equivalent Amount of Tranche A does not exceed theTranche A Limit;

### (c)           that theDollar Equivalent Amount of Tranche B exceeds the Tranche B Limit (but not theTotal Commitments), the Borrower shall, on the first date on which interest ispayable in respect of any Advance under Tranche B pursuant to Clause 6, prepaysuch amount so that, following the application of such prepayment againstTranche B, the Dollar Equivalent Amount of Tranche B does not exceed theTranche B Limit; and

### (d)           that thecircumstances referred to in paragraphs (a), (b) and (c) do not apply, theContinuing Balance shall be equal to the Loan at that time.

## **5.10****       ****ForwardCurrency Swap**.  The Borrower may,subject to the other terms and conditions of this Agreement, at any timepursuant to a Transaction under the Master Agreement enter into a ForwardCurrency Swap whereby the Loan (or the relevant part thereof), whetherdenominated in Dollars or in an Optional Currency is bought or sold forward forconversion into an Optional Currency or, as the case may be, Dollars on thefirst day of any Interest Period falling after the entry into of the ForwardCurrency Swap.

# **6****             ****INTEREST**

## **6.1****         ****Payment ofnormal interest.**  Subject to theprovisions of this Agreement, interest on each Advance in respect of eachInterest Period applicable to it shall be paid by the Borrower on the last dayof that Interest Period.

## **6.2****         ****Normal rate ofinterest.**  Subject to theprovisions of this Agreement, the rate of interest on each Advance in respectof an Interest Period applicable to it shall be the aggregate of the Margin,the Mandatory Cost (if any) and the Reference Rate for that Interest Period.

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## **6.3****         ****Payment ofaccrued interest.**  In the case of anInterest Period longer than 3 months, accrued interest shall be paid every 3months during that Interest Period and on the last day of that Interest Period.

## **6.4****         ****Notification ofInterest Periods and rates of normal interest.**  The Agent shall notify the Borrower and eachLender of:

### (a)           each rateof interest; and

### (b)           theduration of each Interest Period,

as soon asreasonably practicable after each is determined.

## **6.5****         ****Obligation ofLenders to quote.**  Each Lender shall,if the circumstances referred to in paragraph (b) of the definitions of eitherLIBOR or EURIBOR arise at any time, use all reasonable efforts to supply anyquotation required of it for the purposes of fixing a rate of interest underthis Agreement.

## **6.6****         ****Absence ofquotations by Lenders.**  If any Lender failsto supply a quotation when required, the Agent shall determine the relevantReference Rate on the basis of the quotations supplied by the other Lender orLenders; but if at least half of the total number of Lenders at any time failto provide a quotation, the relevant rate of interest shall be set inaccordance with the following provisions of this Clause 6.

## **6.7****         ****Marketdisruption.**  The followingprovisions of this Clause 6 apply if:

### (a)           no rate isquoted on the appropriate page of the Reuters Money News Service and at leasthalf 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 quotationsto the Agent in order to fix the Reference Rate for that Interest Period; or

### (b)           at least 1Business Day before the start of an Interest Period, Lenders havingContributions (excluding, for the purposes of this Clause, any OutstandingGuarantee Amount) together amounting to more than 50 per cent. of the Loan (or,if an Advance has not been made, Commitments amounting to more than 50 percent. of the Total Commitments) or at least half of the total number of Lendersat any time notify the Agent that the Reference Rate for that Interest Periodfixed by the Agent would not accurately reflect the cost to those Lenders offunding their respective Contributions (or any part of them) during theInterest Period in the London Interbank Market or (as the case may be) theEuropean Interbank Market at or about 11.00 a.m. (London time) on the QuotationDate for an Interest Period; or

### (c)           at least 1Business Day before the start of an Interest Period, the Agent is notified by aLender (the “**Affected Lender**”) thatfor any reason it is unable to obtain Dollars or, as the case may be, therelevant Optional Currency in the London Interbank Market or (as the case maybe) the European Interbank Market in order to fund its Contribution (or anypart of it) during the Interest Period.

## **6.8****         ****Notification ofmarket disruption.**  The Agent shall promptlynotify the Borrower and each of the Lenders stating the circumstances fallingwithin Clause 6.7 which have caused its notice to be given.

## **6.9****         ****Suspension ofdrawdown.**  If the Agent’snotice under Clause 6.8 is served on the Borrower before an Advance is made:

### (a)           in a casefalling within paragraphs (a) or (b) of Clause 6.7, the Lenders’ obligations tomake, and the Borrower’s obligation to borrow, that Advance; and

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### (b)           in a casefalling within paragraph (c) of Clause 6.7, the Affected Lender’s obligation toparticipate in the Advance,

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

## **6.10****       ****Negotiation ofalternative rate of interest.** If the Agent’s notice under Clause 6.8is served on the Borrower after an Advance is made, the Borrower, the Agent andthe Lenders or (as the case may be) the Affected Lender shall use reasonableendeavours to agree, within the 30 days after the date on which the Agentserves its notice under Clause 6.8 (the “**Negotiation Period**”), an alternativeinterest 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 orits Contribution during the Interest Period concerned.

## **6.11****       ****Application ofagreed alternative rate of interest.** Any alternative interest rate or an alternative basis which is agreedduring the Negotiation Period shall take effect in accordance with the termsagreed.

## **6.12****       ****Alternativerate of interest in absence of agreement**. If an alternative interest rate or alternative basis is not agreedwithin the Negotiation Period, and the relevant circumstances are continuing atthe end of the Negotiation Period, then the Agent shall, with the agreement ofeach Lender or (as the case may be) the Affected Lender, set an interest periodand interest rate representing the cost of funding of the Lenders or (as thecase may be) the Affected Lender in Dollars or, as the case may be, therelevant Optional Currency, or in any available currency of their or its Contributionplus the aggregate of the Margin and the Mandatory Cost (if any); and theprocedure provided for by this Clause 6.12 shall be repeated if the relevantcircumstances are continuing at the end of the interest period so set by theAgent.

## **6.13****       ****Notice ofprepayment.**  If the Borrower doesnot agree with an interest rate set by the Agent under Clause 6.12, theBorrower may give the Agent not less than 5 Business Days’ notice of itsintention to prepay (and, if applicable, procure the cancellation of theOutstandings).

## **6.14****       ****Prepayment;termination of Commitments**.  A notice underClause 6.13 shall be irrevocable; the Agent shall promptly notify the Lendersor (as the case may require) the Affected Lender of the Borrower’s notice ofintended prepayment; and:

### (a)           on thedate on which the Agent serves that notice, the Total Commitments or (as thecase may require) the Commitment of the Affected Lender shall be cancelled;

### (b)           if theprepayment involves the Lenders or the Affected Lender which is the Issuing Bank,no later than the last Business Day of the interest period set by the Agent,the Borrower shall procure the cancellation of the Outstandings and the returnof each Guarantee to the Issuing Bank endorsed by the relevant Beneficiary tothe effect that it is cancelled; and

### (c)           on thedate specified in its notice of intended prepayment, the Borrower shall prepay(without premium or penalty) the Loan or, as the case may be, the AffectedLender’s Contribution, together with accrued interest thereon at the applicablerate plus the aggregate of the Margin and the Mandatory Cost (if any) and, ifthe prepayment or repayment is not made on the last day of the interest periodset by the Agent, any sums payable under Clause 22.1(b).

## **6.15****       ****Application ofprepayment.**  The provisions ofClause 9 shall apply in relation to the prepayment.

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# **7****             ****INTEREST PERIODS**

## **7.1****         ****Commencement ofInterest Periods.**  The first InterestPeriod applicable to an Advance shall commence on the Drawdown Date for thatAdvance and each subsequent Interest Period shall commence on the expiry of thepreceding Interest Period.

## **7.2****         ****Duration ofnormal Interest Periods.**  Subject to Clauses7.3 and 7.4, each Interest Period shall be:

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

### (b)           in thecase of the first Interest Period applicable to the second and any subsequentAdvance relating to any of the Tranche A Advance 1 Ship, the Tranche A Advance2 Ships, the Tranche A Advance 3 Ships, the Tranche A Advance 4 Ships or anApproved Ship, a period ending on the last day of the Interest Periodapplicable to the first Advance relating to that Ship or (as the case may be)those Ships then current, whereupon all of the Advances relating to that Shipor (as the case may be) those Ships shall be consolidated and treated as asingle Advance; or

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

### (d)           such otherperiod as the Agent may, with the authorisation of all the Lenders, agree withthe Borrower,

**Provided that**no more than 6 Interest Periods inaggregate may be current at any time.

## **7.3****         ****Duration ofInterest Periods for repayment instalments.** In respect of an amount due to be repaid under Clause 9 on a particularReduction Date, an Interest Period shall end on that Reduction Date.

## **7.4****         ****Non-availabilityof matching deposits for Interest Period selected.**  If, after the Borrower has selected (and theLenders have agreed) an Interest Period longer than 6 months, any Lendernotifies the Agent:

### (a)           in thecase of an Advance to be denominated in Dollars or an Optional Currency (otherthan Euros), by 11.00 a.m. (London time) on the second Business Day before thecommencement of that Interest Period, that it is not satisfied that deposits inthe relevant currency for a period equal to that Interest Period will beavailable to it in the London Interbank Market when that Interest Periodcommences; and

### (b)           in the caseof an Advance to be denominated in Euros, by 11.00 a.m. (Brussels time) on thethird Business Day before the commencement of that Interest Period, that it isnot satisfied that deposits in Euros for a period equal to that Interest Periodwill be available to it in the European Interbank Market when that InterestPeriod commences,

thatInterest Period shall be of a duration of 3 months.

# **8****             ****DEFAULT INTEREST**

## **8.1****         ****Payment ofdefault interest on overdue amounts.** The Borrower shall pay interest in accordance with the followingprovisions of this Clause 8 on any amount payable by the Borrower under anyFinance Document which the Agent, the Security Trustee or the other designatedpayee does not receive on or before the relevant date, that is:

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

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### (b)           if aFinance Document provides that such amount is payable on demand, the date onwhich the demand is served; or

### (c)           if suchamount has become immediately due and payable under Clause 20.4, the date onwhich it became immediately due and payable.

## **8.2****         ****Default rate ofinterest.**  Interest shallaccrue on an overdue amount from (and including) the relevant date until thedate of actual payment (as well after as before judgment) at the rate per annumdetermined by the Agent to be 1.5 per cent plus:

### (a)           in thecase of an overdue amount of principal, the higher of the rates set out atparagraphs (a) and (b) of Clause 8.3; or

### (b)           in thecase of any other overdue amount, the rate set out at paragraph (b) of Clause8.3.

## **8.3****         ****Calculation ofdefault rate of interest.**  The rates referredto in Clause 8.2 are:

### (a)           the rateapplicable to the overdue principal amount immediately prior to the relevantdate (but only for any unexpired part of any then current Interest Periodapplicable to it); and

### (b)           theaggregate of the Margin (only in the case of an Advance which has not beendrawn down in the form a Guarantee) and the Mandatory Cost (if any) plus, inrespect of successive periods of any duration (including at call) up to 3months which the Agent may select from time to time:

#### (i)            theReference Rate; or

#### (ii)           if theAgent (after consultation with all the Lenders) determines that deposits of thecurrency in which the overdue amount is denominated for any such period are notbeing made available to any Lender by leading banks in the London InterbankMarket or, as the case may be, the European Interbank Market in the ordinarycourse of business, a rate from time to time determined by the Agent by referenceto the cost of funds to the Lender from such other sources as the Agent (afterconsultation with all the Lenders) may from time to time determine.

## **8.4****         ****Notification ofinterest periods and default rates.** The Agent shall promptly notify the Lenders and the Borrower of eachinterest rate determined by the Agent under Clause 8.3 and of each periodselected by the Agent for the purposes of paragraph (b) of that Clause; butthis shall not be taken to imply that the Borrower is liable to pay suchinterest only with effect from the date of the Agent’s notification.

## **8.5****         ****Payment ofaccrued default interest.**  Subject to the otherprovisions of this Agreement, any interest due under this Clause 8 shall bepaid on the last day of the period by reference to which it was determined; andthe payment shall be made to the Agent for the account of the Creditor Party towhich the overdue amount is due.

## **8.6****         ****Compounding ofdefault interest.**  Any such interestwhich is not paid at the end of the period by reference to which it wasdetermined shall be compounded every 3 months.

## **8.7****         ****Application toMaster Agreement.**  For the avoidance ofdoubt, this Clause 8 does not apply to any amount payable under the MasterAgreement in respect of any continuing Designated Transaction as to whichsection 2(e) (Default Interest; Other Amounts) of the Master Agreement shallapply.

# **9****             ****REPAYMENT, PREPAYMENT AND CANCELLATION**

## **9.1****         ****Reduction and repayment.**

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### (a)           **Tranche AAdvance 1.**  Subject to any otherClause of this Agreement, the maximum aggregate amount on the date of thisAgreement which may be outstanding at any time in respect of all Advance(s) inrespect of the Tranche A Advance 1 Ship shall be $38,000,000 and shallthereafter reduce:

#### (i)            by 2consecutive semi-annual reductions of $16,700,000 each, with the first suchreduction occurring on the date falling 6 months after the expiry of theAdvance 1 Grace Period; and

#### (ii)           a balloonreduction of $4,600,000 (as such balloon may be reduced in accordance withClause 9.2, the “**Tranche A Advance 1 Balloon**”)together with the final such semi-annual reduction.

### (b)           **Tranche AAdvance 2.**  Subject to any otherClause of this Agreement, the maximum aggregate amount on the date of thisAgreement which may be outstanding at any time in respect of all Advance(s) in respectof the Tranche A Advance 2 Ships shall be $22,000,000 and shall thereafterreduce:

#### (i)            by 4consecutive semi-annual reductions of $750,000 each, with the first suchreduction occurring on the date falling 6 months after the first Drawdown Dateof an Advance in respect of the Tranche A Advance 2 Ships; and

#### (ii)           a balloonreduction of $19,000,000 (as such balloon may be reduced in accordance withClause 9.2, the “**Tranche A Advance 2 Balloon**”)together with the final such semi-annual reduction.

### (c)           **Tranche AAdvance 3.**  Subject to any otherClause of this Agreement, the maximum aggregate amount on the date of thisAgreement which may be outstanding at any time in respect of all Advance(s) inrespect of the Tranche A Advance 3 Ships shall be $46,000,000 and shallthereafter reduce:

#### (i)            by 4consecutive semi-annual reductions of $9,500,000 each, with the first suchreduction occurring on the date falling 6 months after the expiry of theAdvance 3 Grace Period; and

#### (ii)           a balloonreduction of $8,000,000 (as such balloon may be reduced in accordance withClause 9.2, the “**Tranche A Advance 3 Balloon**”)together with the final such semi-annual reduction.

### (d)           **Tranche AAdvance 4.**  Subject to any otherClause of this Agreement, the maximum aggregate amount on the date of thisAgreement which may be outstanding at any time in respect of all Advance(s) inrespect of the Tranche A Advance 4 Ships shall be $32,000,000 and shallthereafter reduce:

#### (i)            by 4consecutive semi-annual reductions of $6,500,000 each, with the first suchreduction occurring on the date falling 6 months after the first Drawdown Dateof an Advance in respect of the Tranche A Advance 4 Ships; and

#### (ii)           a balloonreduction of $6,000,000 (as such balloon may be reduced in accordance withClause 9.2, the “**Tranche A Advance 4 Balloon**”)together with the final such semi-annual reduction.

### (e)           **Tranche B andTranche A Additional Advances.**

#### (i)            Subject toany other Clause of this Agreement and save in respect of the financing of oneor more pre-delivery instalment(s) of an Approved Ship under an ApprovedPurchase Contract (to which Clause 9.1(e)(v) applies instead), the maximumaggregate amount on the date of this Agreement which may be

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#### outstanding at any time in respectof all Advance(s) in respect of an Approved Ship which is, on the firstDrawdown Date applicable to that Ship, a newbuilding delivered on that dateshall be the Finance Level for that Approved Ship and shall thereafter reduce:

##### (A)          byconsecutive equal semi-annual reductions with the first such reductionoccurring on the date falling 6 months after the expiry of the MoratoriumPeriod and the final such reduction occurring on the date falling 120 monthsafter the first Drawdown Date applicable to that Ship; and

##### (B)           a balloonreduction together with the final such semi-annual reduction,

##### with the amount of each equal semi-annualreduction and the balloon reduction calculated so as to result in a 10 yearloan repayable on an 18 year “straight-line” profile (i.e. a 10 year profile ofequal semi-annual instalments reducing to zero at the end of year 18).

##### For the avoidance of doubt, an Advancedrawndown under Tranche B to refinance part or all of the Pre-DeliveryAdvance(s) of an Approved Ship shall be considered as an Advance falling underthis Clause 9.1(e)(i).

#### (ii)           Subject toany other Clause of this Agreement and save in respect of the financing of oneor more pre-delivery instalment(s) of an Approved Ship under an ApprovedPurchase Contract (to which Clause 9.1(e)(v) applies instead), the maximum aggregateamount on the date of this Agreement which may be outstanding at any time inrespect of all Advance(s) in respect of an Approved Ship which has, on thefirst Drawdown Date applicable to that Ship, an Age of 8 years or less shall bethe Finance Level for that Approved Ship and shall thereafter reduce:

##### (A)          byconsecutive equal semi-annual reductions with the first such reductionoccurring on the date falling 6 months after the expiry of the MoratoriumPeriod and the final such reduction occurring on the date falling 10 yearsafter the first Drawdown Date applicable to that Ship; and

##### (B)           a balloonreduction together with the final such semi-annual reduction,

#### with the amount of each equal semi-annualreduction and the balloon reduction calculated so as to result in a 10 yearloan repayable on a “straight-line” full amortisation profile over a period(the “**Loan Profile Period**”) equalto:

###### (1)                           18 years;less

###### (2)                           the Age ofthat Ship on the first Drawdown Date applicable to it.

#### (iii)          Subject toany other Clause of this Agreement, the maximum aggregate amount on the date ofthis Agreement which may be outstanding at any time in respect of allAdvance(s) in respect of an Approved Ship which has, on the first Drawdown Dateapplicable to that Ship, an Age of 9, 10, 11, 12, 13, 14 or 15 years shall bethe Finance Level for that Approved Ship and shall thereafter reduce byconsecutive equal semi-annual reductions, with the first such reductionoccurring on the date falling 6 months after the first Drawdown Date applicableto that Ship and the final such reduction occurring on the date falling:

##### (A)          9 years;less

##### (B)           1 year foreach year which the Age of the Ship exceeds 9 years on the first Drawdown Date,

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###### after such Drawdown Date and with the amountof each reduction required so as to fully reduce such maximum aggregate amountto zero by maturity.

#### (iv)          Notwithstandingthe foregoing provisions of this Clause 9.1(e), the Lenders may (in their soleand absolute discretion based on the condition, characteristics and employmentof the relevant Approved Ship) modify the manner of reduction and repayment ofany Advance under Tranche B or any Tranche A Additional Advance so that thescheduled reductions and repayments are subject to a moratorium period (theduration of which shall be determined by the Lenders in their discretion);

#### (v)           In thecase of the financing of one or more pre-delivery instalment(s) of an ApprovedShip under a Purchase Contract and subject to any other Clause of thisAgreement, the maximum aggregate amount on the date of this Agreement which maybe outstanding at any time in respect of all Advance(s) in respect of thatApproved Ship shall be the Finance Level for that Approved Ship and shallthereafter reduce to zero on the earlier of:

##### (A)          theDelivery Date for that Approved Ship; or

##### (B)           the datefalling 3 years after the date of this Agreement.

### (f)            **Reduction ofTotal Commitments, Tranche A Limit and Tranche B Limit.**  Any reduction in any maximum aggregate amountunder this Clause 9.1 or any other Clause shall cause an equivalent amount ofthe Total Commitments and the Tranche A Limit or (as the case may be) theTranche B Limit to be permanently cancelled, following which the Commitment ofeach Lender shall be permanently reduced pro rata.

### (g)           **Repayment.**  The Borrower shall ensure at all times thateach of Tranche A Advance 1, Tranche A Advance 2, Tranche A Advance 3, TrancheA Advance 4 and all Advance(s) in respect of an Approved Ship (including, ineach case, the Outstanding Guarantee Amount of any Guarantee issued in respectof any Ship to which any such Advance relates) is not greater than the relevantmaximum outstanding amount permitted pursuant to this Clause 9.1 and, withoutprejudice to the generality of the foregoing, the Borrower shall if required pursuantto this Clause 9.1(g) prepay some or all of the outstanding Advances (and/orprocure the cancellation of some or all of the Outstandings) so that theaggregate amount of the Advances and the Outstandings thereafter remaining doesnot and will not in the future (taking into account the scheduled reductionunder this Clause 9.1) exceed the limits set out in this Clause 9.1 as reducingfrom time to time thereafter pursuant to this Clause 9.1.  Clauses 9.7 and 9.11 shall apply in relationto any such prepayment.

## **9.2****         ****Tranche A balloons.**  If, at any time, the Agent determines thatany of the Tranche A Advance 1 Balloon, the Tranche A Advance 2 Balloon, theTranche A Advance 3 Balloon or the Tranche A Advance 4 Balloon exceeds 80 percent. of the aggregate of the prevailing scrap value of each Ship to which thatTranche A Balloon relates, the Agent shall notify the Borrower and, on the 5Business Day following the date of the Agent’s notification:

### (a)           themaximum aggregate amount which may be outstanding at any time in respect of allAdvance(s) in respect of the Ships to which that Tranche A Balloon relatesshall reduce by an amount equal to such excess;

### (b)           thatTranche A Balloon shall reduce by an amount equal to such excess; and

### (c)           withoutprejudice to Clause 9.1(g), the Borrower shall prepay some or all of theoutstanding Advances so that the amount of Tranche A Advance 1, Tranche AAdvance 2, Tranche A Advance 3 or (as the case may be) Tranche A Advance 4 doesnot exceed

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### the maximum aggregate amount as referredto in, and reduced in accordance with, Clause 9.2(a).

## **9.3****         ****Final reductiondate.**  On the date on whichthe maximum aggregate amount of any of the Tranche A Advance 1, Tranche AAdvance 2, Tranche A Advance 3, Tranche A Advance 4 or all Advance(s) in respectof an Approved Ship reduces to zero in accordance with Clause 9.1, the Borrowershall additionally pay to the Agent for the account of the Creditor Parties allother sums (if any) then accrued or owing under such Advance(s).

## **9.4****         ****Optional facility cancellation.**  The Borrower shall be entitled, upon givingto the Agent not less than 14 Business Days (or such shorter notice as theLenders may agree) prior written notice (which notice shall be irrevocable), tocancel, in whole or in part, and, if in part, by an amount not less than$1,000,000 or a higher integral multiple of $1,000,000, the undrawn balance ofTranche A Advance 1, Tranche A Advance 2, Tranche A Advance 3, Tranche AAdvance 4 or all Advance(s) in respect of an Approved Ship.  Upon such cancellation taking effect onexpiry of such notice Clause 9.1(f) shall apply, the commitment fee referred toin Clause 21.1(c)) on such portion shall cease to accrue and the amounts bywhich the relevant maximum aggregate amount outstanding shall periodicallyreduce pursuant to Clause 9.1 shall be reduced pro rata or (at the Borrower’soption if notified to the Agent) in order of maturity by the amount of suchcancellation.

## **9.5****         ****Voluntaryprepayment.**  Subject to thefollowing conditions, the Borrower may prepay the whole or any part of anyAdvance on the last day of an Interest Period applicable to that Advance.

## **9.6****         ****Conditions forvoluntary prepayment.**  The conditionsreferred to in Clause 9.5 are that:

### (a)           a partialprepayment shall be $1,000,000 or a higher integral multiple of $1,000,000;

### (b)           the Agenthas received from the Borrower at least 5 (at any time during the MoratoriumPeriod) or 15 (at any time thereafter) days’ prior written notice specifyingthe amount to be prepaid and the date on which the prepayment is to be made;

### (c)           theBorrower has provided evidence satisfactory to the Agent that any consentrequired by the Borrower or any Security Party in connection with theprepayment has been obtained and remains in force.

## **9.7****         ****Effect ofnotice of prepayment.**  A prepayment noticemay not be withdrawn or amended without the consent of the Agent, given withthe authorisation of the Majority Lenders, and the amount specified in theprepayment notice shall become due and payable by the Borrower on the date forprepayment specified in the prepayment notice **Provided that** theBorrower may, during the Moratorium Period, withdraw or amend a prepaymentnotice up to 3 days prior to the date of prepayment specified in the relevantprepayment notice subject to the Borrower indemnifying the Lenders (or any ofthem) in respect of any costs, liabilities or losses which they may incur inconnection with the withdrawal of, or amendment to, a prepayment notice by theBorrower.

## **9.8****         ****Notification ofnotice of prepayment.**  The Agent shallnotify the Lenders promptly upon receiving a prepayment notice, and shallprovide any Lender which so requests with a copy of any document delivered bythe Borrower under Clause 9.6(c).

## **9.9****         ****Mandatoryprepayment/reductions.**

### (a)           If aMortgaged Ship is sold or becomes a Total Loss or the Mortgage on that Ship isdischarged pursuant to Clause 9.9(C):

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#### (i)            in thecase of an Existing Ship, the Borrower shall ensure that all the sale or TotalLoss proceeds are paid to the Agent or, as the case may be, the SecurityTrustee and the Agent shall apply all (or, in the sole and absolute discretionof the Lenders, part) of such proceeds in repayment of the Loan;

#### (ii)           in thecase of an Approved Ship, the Borrower shall be obliged to prepay all of theAdvance(s) in respect of that Approved Ship whereupon the portion of the TotalCommitments in respect of those Advance(s) (together with any other outstandingTotal Commitments in respect of that Approved Ship) shall be permanentlycancelled and Clause 9.1(f) shall apply.

### (b)           In thecase of an Approved Ship which has been financed by a Pre-Delivery Advance, theBorrower shall be obliged to prepay all of the Advance(s) in respect of thatApproved Ship (whereupon the portion of the Total Commitments in respect ofthose Advance(s) (together with any other outstanding Total Commitments inrespect of that Approved Ship) shall be permanently cancelled and Clause 9.1(f)shall apply) if any of the following occurs, on demand by the Agent:

#### (i)            an eventor circumstance occurs which under the Approved Purchase Contract results ineither party to the Approved Purchase Contract having the right to cancel orrescind the Approved Purchase Contract; or

#### (ii)           either theApproved Purchase Contract or any Refund Guarantee issued under the ApprovedPurchase Contract is cancelled, terminated, rescinded or suspended or otherwiseceases to remain in force for any reason; or

#### (iii)          theApproved Purchase Contract is amended or varied without the prior writtenconsent of the Lenders except for any such amendment or variation as ispermitted by this Agreement or any other relevant Finance Document; or

#### (iv)          theApproved Ship has not for any reason been delivered to, and accepted by, theApproved Guarantor under the Approved Purchase Contract by the earlier of (x)the date set out in the Approved Purchase Contract (as extended by permissibledelays pursuant to the Approved Purchase Contract), (y) the final ReductionDate and (z) the date falling 3 years after the date of this Agreement.

### (c)           If anyExisting Charter or any other charter approved by the Lenders for the purposesof long-term employment under the definition of “Approved Ship” is terminated,becomes invalid or unenforceable or otherwise ceases to be in full force andeffect for any reason (other than by effluxion of time or following the sale orTotal Loss of the Ship to which that charter relates) or the relevant Ownerunder any such charter is in breach such that the other party is entitled toterminate unilaterally or hire payable under any such charter is not paid onthe due date or is suspended (a “**charter termination date**”), theBorrower shall prepay in full the Advance relative to the relevant Ship within3 days of the relevant charter termination date unless (i) the relevant Ownerenters into a new charterparty in respect of its Ship with a chartereracceptable to the Lenders (in their Sole and absolute discretion) on terms, fora period and at a daily charterhire rate which are equivalent or no lessfavourable that those in the Existing Charter or such other charter, with suchsubstitute charter being entered into within 30 days from the chartertermination date relative to the Existing Charter or such other charter or (ii)the Majority Lenders are satisfied that the security cover ratio (as determinedin accordance with Clause 16.1) is sufficient to allow the Lenders to maintainthe Advance (without requiring any prepayment of the same).

### (d)           If any ofthe circumstances referred to in the foregoing provisions of this Clause 9.9which trigger a mandatory prepayment or reduction pursuant to this Clause 9.9should arise, the Borrower hereby agrees to pay to the Agent any amount, inaddition to that required to be paid pursuant to the applicable foregoingprovisions of this Clause 9.9, 

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### which the Agent (acting upon theinstructions of the Majority Lenders) may notify to the Borrower in writingfrom time to time, which amount will be paid at the same time as the applicableprepayment or reduction required to be made pursuant to the applicable foregoingprovisions of this Clause 9.9 and will be applied in prepayment of the Loan(and the Borrower hereby irrevocably authorises the Agent to make suchapplication).

For theavoidance of doubt, references in this Clause 9.9 to the Advance(s) in respectof a Ship shall include (if relevant) the Outstanding Guarantee Amount of anyGuarantee issued in relation to that Ship and references in this Clause 9.9 toprepaying the Advance(s) in respect of a Ship shall include (if relevant)procuring the cancellation of the Outstanding Guarantee Amount of any Guaranteeissued in relation to that Ship.

Theprepayments and/or, as the case may be, permanent cancellations referred to inClause 9.9(a) shall be made:

#### (A)          in thecase of a sale, on or before the date on which the sale is completed bydelivery of the relevant Ship to its buyer; or

#### (B)           in thecase of a Total Loss, on the earlier of the date falling 120 days after theTotal Loss Date and the date of receipt by the Security Trustee of the proceedsof insurance relating to such Total Loss; or

#### (C)           in thecase the Mortgage on the relevant Ship is discharged (other than in thecircumstances referred to in paragraph (A) above and where the Borrower and theSecurity Parties have discharged all their obligations under the FinanceDocuments), on or before the date on which the Mortgage is discharged.

## **9.10****       ****Currency of payment.** Each repayment or prepayment of the Loan orany part thereof shall be made in the currency in which the Loan or therelevant part thereof was outstanding on the relevant date of repayment or (asthe case may be) prepayment (in such proportions as between the currencies inwhich the Loan is denominated at the time of the relevant repayment orprepayment as the Advance or Advances in the one currency bear to the Advanceor Advances in the other currency) and on the basis of the Spot Rate ofExchange applicable to the Interest Period expiring on such repayment date ordate of prepayment or, if not the last day of an Interest Period, applicable tothe then current Interest Period.

## **9.11****       ****Amounts payableon repayment or prepayment.**  Arepayment or prepayment shall be made together with accrued interest (and anyother amount payable under Clause 22 or otherwise) in respect of the amountrepaid or prepaid and, if the repayment or prepayment is not made on the lastday of an applicable Interest Period together with:

### (a)           any sumspayable under Clause 22.1(b); and

### (b)           as anagreed compensation for the loss of the Lender’s anticipated return on capital,a fee equal to the Margin (plus the Mandatory Cost, if any) on the amountprepaid for the balance of the applicable Interest Period,

### but otherwise without premium or penalty.

## **9.12****       ****Reborrowing.**  Subject to the terms of this Agreement, anyamount of the Loan repaid or prepaid may be reborrowed.

## **9.13****       ****Unwinding ofDesignated Transactions.**  On or prior to anyrepayment or prepayment of the Loan under this Clause 9 or any other provisionof this Agreement, the Borrower shall wholly or partially reverse, offset,unwind or otherwise terminate one or more of the continuing DesignatedTransactions to the extent necessary to ensure that the notional

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## principal amount of the continuingDesignated Transactions thereafter remaining does not and will not in thefuture (taking into account the scheduled amortisation) exceed the amount ofthe Loan as reducing from time to time thereafter pursuant to Clause 9.1.

## **9.14****       ****Prepayment ofswap benefit.**  If a DesignatedTransaction is terminated in circumstances where the Swap Bank would be obligedto pay an amount to the Borrower under the Master Agreement, the Borrowerhereby agrees that such payment shall be applied in prepayment of the Loan inaccordance with Clause 9.5 and authorises the Swap Bank to pay such amount tothe Agent for such purpose.

# **10****          ****CONDITIONS PRECEDENT**

## **10.1****       ****Documents, feesand no default.**  Each Lender’sobligation to contribute to an Advance (and, in the case of the Lender which isthe Issuing Bank, to issue any Guarantee) is subject to the followingconditions precedent:

### (a)           that, onor before the Drawdown Date relative to the Advance which will be used in fullyrefinancing the Existing Indebtedness, the Agent receives the documentsdescribed in Part A of Schedule 3 in form and substance satisfactory to theAgent and its lawyers;

### (b)           that, onor before the Drawdown Date relative to each Advance which will be used infinancing an Approved Ship (other than in the case of a Pre-Delivery Advance towhich Clause 10.1(c) applies instead), the Agent receives the documentsdescribed in Part B of Schedule 3 in form and substance satisfactory to theAgent and its lawyers;

### (c)           that, onor before the Drawdown Date relative to a Pre-Delivery Advance which will beused in financing an Approved Ship, the Agent receives the documents describedin Part C of Schedule 3 in form and substance satisfactory to the Agent and itslawyers;

### (d)           that eachDrawdown Notice contains irrevocable instructions from the Borrower to pay onthe Drawdown Date relative to the relevant Advance all fees payable at thattime (including, without limitation, any accrued guarantee commitment andcommitment commission fees) pursuant to Clause 21.1;

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

#### (i)            no Eventof Default or Potential Event of Default has occurred and is continuing orwould result from the borrowing of the relevant Advance or (as the case may be)the issue of the Guarantee;

#### (ii)           therepresentations and warranties in Clause 11 and those of the Borrower or anySecurity Party which are set out in the other Finance Documents would be trueand not misleading if repeated on each of those dates with reference to thecircumstances then existing; and

#### (iii)          none ofthe circumstances contemplated by Clause 6.7 has occurred and is continuing;

### (f)            that, ifthe ratio set out in Clause 16.1 were applied immediately following the makingof the Advance or (as the case may be) the issue of the Guarantee, the Borrowerwould not be obliged to provide additional security or prepay part of the Loanor procure the cancellation of any of the Outstandings under that Clause; and

### (g)           that theAgent has received, and found to be acceptable to it, any further opinions,consents, agreements and documents in connection with the Finance Documentswhich

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### the Agent may, with theauthorisation of the Majority Lenders, reasonably request by notice to theBorrower prior to the relevant Drawdown Date.

## **10.2****       ****Waiver ofconditions precedent**.  If the MajorityLenders, at their discretion, permit an Advance to be borrowed and/or (as thecase may be) a Guarantee to be issued before certain of the conditions referredto in Clause 10.1 are satisfied, the Borrower shall ensure that thoseconditions are satisfied within 10 Business Days after the relevant DrawdownDate (or such longer period as the Agent, with the authorisation of theMajority Lenders, specify).

# **11****          ****REPRESENTATIONS AND WARRANTIES**

## **11.1****       ****General.** TheBorrower represents and warrants to each Creditor Party as follows.

## **11.2****       ****Status.** TheBorrower is a corporation domesticated in and validly existing and in goodstanding under the laws of the Republic of the Marshall Islands.

## **11.3****       ****Share capitaland ownership.**  The Borrower has anauthorised share capital divided into 205,000,000 shares of $0.01 each dividedinto 200,000,000 shares of common stock and 5,000,000 shares of preferredstock.  The Borrower is the indirect andultimate owner of all of the issued share capital of each Existing Owner.

## **11.4****       ****Corporatepower.**  The Borrower (or inthe case of paragraphs (a) and (b), each Existing Owner) has the corporatecapacity, and has taken all corporate action and obtained all consentsnecessary for it:

### (a)           to own andregister the Existing Ship owned by it in its name on the relevant ApprovedFlag;

### (b)           to enterinto, and perform its obligations under, the Existing Charter to which it is aparty;

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

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

## **11.5****       ****Consents inforce.**  All the consentsreferred to in Clause 11.4 remain in force and nothing has occurred which makesany of them liable to revocation.

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

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

### (b)           createlegal, valid and binding Security Interests enforceable in accordance withtheir respective terms over all the assets to which they, by their terms,relate;

subject toany relevant insolvency laws affecting creditors’ rights generally.

## **11.7****       ****No third partySecurity Interests.**  Without limiting thegenerality of Clause 11.6, at the time of the execution and delivery of eachFinance Document:

### (a)           theBorrower will have the right to create all Security Interests which that FinanceDocument purports to create; and

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

## **11.8****       ****No conflicts.**  The execution by the Borrower of each FinanceDocument to which it is a party, the borrowing by the Borrower of the Loan(including, without limitation, any request for issue of a Guarantee), and itscompliance with each Finance Document to which it is a party, will not involveor lead to a contravention of:

### (a)           any law orregulation; or

### (b)           theconstitutional documents of the Borrower; or

### (c)           anycontractual or other obligation or restriction which is binding on the Borroweror any of its assets.

## **11.9****       ****No withholdingtaxes.**  All payments whichthe Borrower is liable to make under the Finance Documents to which it is aparty may be made without deduction or withholding for or on account of any taxpayable under any law of any Pertinent Jurisdiction.

## **11.10****     ****No default.** No Event of Default or Potential Event of Default has occurred and iscontinuing.

## **11.11****     ****Information.**  All information which has been provided inwriting by or on behalf of the Borrower or any Security Party to any CreditorParty in connection with any Finance Document satisfied the requirements ofClause 12.5.

## **11.12****     ****No litigation.**  No legal or administrative action involvingthe Borrower has been commenced or taken or, to the Borrower’s knowledge, islikely to be commenced or taken which, in either case, would be likely to havea material adverse effect on the Borrower’s ability to satisfy and discharge ina timely manner any of its liabilities or obligations under any FinanceDocument.

## **11.13****     ****Compliance withcertain undertakings.**  At the date of thisAgreement, the Borrower is in compliance with Clauses 12.2, 12.4, 12.9 and12.14.

## **11.14****     ****Taxes paid.** TheBorrower has paid all taxes applicable to, or imposed on or in relation to, theBorrower and its business.

## **11.15****     ****Validity andcompleteness of Existing Charters.** The copy of each Existing Charterdelivered to the Agent before the date of this Agreement is a true and completecopy and:

### (a)           eachExisting Charter constitutes valid, binding and enforceable obligations of theparties thereto respectively in accordance with its terms; and

### (b)           noamendments or additions to any Existing Charter have been agreed (other thanthose notified to the Agent prior to the date of this Agreement) nor has anyparty thereto waived any of their respective rights under any Existing Charter.

## **11.16****     ****ISM Code andISPS Code compliance.**  The Borrower willprocure that the Owners of the Existing Ships and the Approved Manager obtainall necessary ISM Code Documentation and ISPS Code Documentation in connectionwith the Existing Ships and comply with the ISM Code and the ISPS Code.

## **11.17****     ****No moneylaundering.**  Without prejudice tothe generality of Clause 4.3, in relation to the borrowing by the Borrower ofthe Loan, the issue of any Guarantee on request of the Borrower, theperformance and discharge of its obligations and liabilities under the FinanceDocuments, and the transactions and other arrangements effected or contemplatedby the Finance Documents to which the Borrower is a party, the Borrower

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## confirms that it is acting for itsown account and that the foregoing will not involve or lead to contravention ofany law, official requirement or other regulatory measure or procedureimplemented to combat “money laundering” (as defined in Article 1 of theDirective (91/308/EEC) of the Council of the European Communities).

# **12****          ****GENERAL UNDERTAKINGS**

## **12.1****       ****General.** TheBorrower undertakes with each Creditor Party to comply with the followingprovisions of this Clause 12 at all times during the Security Period except asthe Agent may, with the authorisation of the Majority Lenders, otherwise permit(which permission will not be unreasonably withheld in the circumstancesreferred to in Clause 12.3 where the permission of the Agent is required).

## **12.2****       ****Title; negativepledge and pari passu ranking**. The Borrower will:

### (a)           Indirectlyhold the entire beneficial interest in, each Owner, free from all SecurityInterests and other interests and rights of every kind, except for thosecreated by the Finance Documents;

### (b)           not createor permit to arise any Security Interest over any other asset, present orfuture (including, but not limited to the Borrower’s rights against the SwapBank under the Master Agreement or all or any part of the Borrower’s interestin any amount payable to the Borrower by the Swap Bank under the MasterAgreement) other than in the normal course of its business of acquiring,financing and operating vessels; and

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

## **12.3****       ****No disposal ofassets.** The Borrower will not transfer, lease or otherwise disposeof:

### (a)           all or asubstantial part of its assets (including, without limitation, the shares ofthe Owners), whether by one transaction or a number of transactions, whetherrelated or not; or

### (b)           any debtpayable to it or any other right (present, future or contingent) to receive apayment, including any right to damages or compensation,

if suchtransfer, lease or disposal results in a reduction of the Market Value AdjustedTotal Assets by at least 50 per cent. (in all other circumstances the Borrowershall be deemed to have complied with its obligations under this Clause 12.3 byproviding the Agent with prior written notice of its decision to transfer,lease or otherwise dispose of its assets as aforesaid).

## **12.4****       ****No otherliabilities or obligations to be incurred.** The Borrower will not, and will procurethat none of the Owners will, incur any liability or obligation exceptliabilities and obligations:

### (a)           under theFinance Documents and the Approved Purchase Contracts to which each is a party;

### (b)           under theMaster Agreement (but in such case, only in connection with any DesignatedTransactions);

### (c)           incurred,in the case of each Owner, in the normal course of its business of operatingvessels; and

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(d)           incurred, in the case of the Borrower, inthe normal course of its business of acquiring and financing vessels throughits wholly-owned subsidiaries.

## **12.5****       ****Informationprovided to be accurate.**  All financial andother information which is provided in writing by or on behalf of the Borrowerunder or in connection with any Finance Document will be true and notmisleading and will not omit any material fact or consideration.

## **12.6****       ****Provision offinancial statements.** The Borrower will send to the Agent:

### (a)           as soon aspossible, but in no event later than 180 days after the end of each FinancialYear of the Borrower (commencing with the Financial Year ended 31 December2005), the audited consolidated accounts of the Borrower’s Group for thatFinancial Year and the audited individual accounts of the Borrower for thatFinancial Year; and

### (b)           as soon aspossible, but in no event later than 90 days after the end of each financialquarter in each Financial Year of the Borrower, the unaudited consolidatedaccounts of the Borrower’s Group for that 3-month period.

## **12.7****       ****Form offinancial statements.**  All accounts(audited and unaudited) delivered under Clause 12.6 will:

### (a)           beprepared in accordance with all applicable laws and USGAAP consistentlyapplied;

### (b)           give atrue and fair view of the state of affairs of the Borrower or (as the case maybe) the Borrower’s Group at the date of those accounts and of their or itsprofit for the period to which those accounts relate; and

### (c)           fullydisclose or provide for all significant liabilities of the Borrower or (as thecase may be) the Borrower’s Group.

## **12.8****       ****Shareholder andcreditor notices.** The Borrower will send the Agent, at the same time as theyare despatched, copies of all documents which are despatched:

### (a)           to theBorrower’s creditors generally;

### (b)           if thereis no Event of Default, to its shareholders (or any class of them) which theBorrower is required to despatch by law; and

### (c)           if thereis an Event of Default which is continuing, all documents despatched by theBorrower to its shareholders (or any class of them).

## **12.9****       ****Consents.**  The Borrower will maintain in force andpromptly obtain or renew (or, as the case may be, will procure that there ismaintained in force and promptly obtained or renewed), and will promptly sendcertified copies to the Agent of, all consents required:

### (a)           for theBorrower and each Owner to perform its obligations under any Finance Documentto which it is a party;

### (b)           for thevalidity or enforceability of any Finance Document to which it is a party; and

### (c)           for eachOwner to continue to own and operate the Ship owned by it;

and theBorrower will comply (or procure compliance) with the terms of all suchconsents.

## **12.10****     ****Maintenance of Security Interests.** TheBorrower will:

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

### (b)           withoutlimiting the generality of paragraph (a) at its own cost, promptly register,file, record or enrol any Finance Document with any court or authority in theMarshall Islands, Liberia, Greece, Panama, Bahamas or Cyprus or such otherjurisdiction which the Lenders may reasonably require (including, withoutlimitation, any Approved Flag State if at the relevant time a Ship isregistered under the laws of such Approved Flag State), pay any stamp,registration or similar tax in any such country in respect of any FinanceDocument, give any notice or take any other step which, in the opinion of theMajority Lenders, is or has become necessary or desirable for any FinanceDocument to be valid, enforceable or admissible in evidence or to ensure orprotect the priority of any Security Interest which it creates.

## **12.11****     ****Notification oflitigation.** The Borrower will provide the Agent with details of anylegal or administrative action involving the Borrower, any Security Party, theApproved Manager, any Ship, their Earnings or their Insurances as soon as suchaction is instituted or it becomes apparent to the Borrower that it is likelyto be instituted, unless it is clear that the legal or administrative actioncannot be considered material in the context of any Finance Document.

## **12.12****     ****No amendment toMaster Agreement;  Transactions.**  The Borrower will not:

### (a)           agree toany amendment or supplement to, or waive or fail to enforce, the MasterAgreement or any of its provisions; or

### (b)           enter intoany Transaction pursuant to the Master Agreement except DesignatedTransactions.

## **12.13****     ****No amendment tothe Existing Charters and Approved Purchase Contracts.**  The Borrower will ensure that:

### (a)           noExisting Owner shall agree to any amendment or supplement to, or waive or failto enforce, any Existing Charter or any of its provisions; and

### (b)           noApproved Guarantor shall agree to any amendment or supplement to, or waive orfail to enforce, an Approved Purchase Contract to which such Approved Guarantoris a party or any of its provisions.

## **12.14****     ****Principal placeof business.** The Borrower will maintain its place of business, and keepits corporate documents and records, at the address stated in Clause 29.2(a);and the Borrower will not establish, or do anything as a result of which itwould be deemed to have, a place of business in any other country.

## **12.15****     ****Confirmation ofno default.** The Borrower will, within 3 Business Days after service bythe Agent of a written request, serve on the Agent a notice which is signed byan authorised officer of the Borrower and which:

### (a)           statesthat no Event of Default or Potential Event of Default has occurred; or

### (b)           statesthat no Event of Default or Potential Event of Default has occurred, except fora specified event or matter, of which all material details are given.

The Agentmay serve requests under this Clause 12.15 from time to time but only if askedto do so by a Lender or Lenders having aggregate Contributions and Outstandingsexceeding 10 per cent. of the aggregate of the Loan and the Outstandings or (ifno Advance is outstanding at the relevant time) Commitments exceeding 10 percent. of the

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aggregateof the Total Commitments; and this Clause 12.15 does not affect the Borrower’sobligations under Clause 12.16.

## **12.16****     ****Notification ofdefault.** The Borrower will notify the Agent as soon as it becomesaware of:

### (a)           theoccurrence of an Event of Default or a Potential Event of Default; or

### (b)           any matterwhich indicates that an Event of Default or a Potential Event of Default mayhave occurred;

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

## **12.17****     ****Provision offurther information.** The Borrower will, as soon as practicable after receivingthe request, provide the Agent with any additional financial or otherinformation relating:

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

### (b)           to anyother matter relevant to, or to any provision of, an Approved PurchaseContract, any Existing Charter or a Finance Document;

which maybe requested by the Agent or the Security Trustee or (through the Agent) by anyLender at any time.

## **12.18****     ****Provision ofcopies and translation of documents.** The Borrower will supply the Agent with a sufficient number of copies ofthe documents referred to above to provide 1 copy for each Creditor Party; andif the Agent so requires in respect of any of those documents, the Borrowerwill provide a certified English translation prepared by a translator approvedby the Agent.

## **12.19****     ****Time charterassignment**.  Without prejudiceto Clause 15.13, the Borrower shall procure that if any Owner enters into atime charterparty or contract of affreightment in respect of its Ship which isof 12 or more months in duration, or is capable of exceeding 12 months induration or any bareboat charter in respect of its Ship, such Owner shall atthe request of the Agent, execute in favour of the Security Trustee aCharterparty Assignment and (in the case of any bareboat charter of a Ship) aBareboat Charter Security Agreement in respect of such charter and shalldeliver to the Agent such other documents equivalent to those referred to atparagraphs 3, 4 and 5 of Part A of Schedule 3 hereof.

## **12.20****     ****Purchase offurther tonnage.**  The Borrower shallprocure that no Owner shall purchase any vessel other than an Approved Ship.

## **12.21****     ****Provision ofconfirmations.**  The Borrower shallprovide to the Creditor Parties (or any of them) such documentation andevidence as may be required by that Creditor Party from time to time to complywith applicable law and regulations and its own internal guidelines in relationto the opening of bank accounts and the identification of its customers.

## **12.22****     ****Right of firstrefusal in relation to refinancing of Pre-Delivery Advances.**

### (a)           TheBorrower shall not, and shall procure that no Approved Guarantor will, enterinto any discussion with any person in relation to the refinancing of any Pre-DeliveryAdvance without first discussing the same with the Lenders and giving theLenders the option to refinance such Pre-Delivery Advance on terms to be agreedbetween the Borrower and the Lenders.

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### (b)           TheBorrower shall not, and shall procure that no Approved Guarantor will,refinance any Pre-Delivery Advance with any person (other than the Lenders) onterms agreed with that person unless the Lenders have first been given theoption pursuant to Clause 12.23(a) to refinance such Pre-Delivery Advance onthe same (or substantially similar) terms.

## **12.23****     ****Tax LeaseStructure.**  The Borrower mayplace any Mortgaged Ship within a tax lease structure, with the prior writtenconsent of the Agent (to be given with the authorisation of, and upon suchterms and conditions as may be requested by, all the Lenders (acting in theirsole and absolute discretion, which shall include, without limitation, arequirement that the Borrower pay an administration fee to the Agent (for andon behalf of itself and the Lenders) in a reasonable amount to be agreedbetween the Borrower and the Agent (acting with the authorisation of all theLenders (such authorisation not to be unreasonably withheld)) to compensate theAgent and the Lenders for all additional work which will be required toimplement the tax lease structure).

# **13****          ****CORPORATE UNDERTAKINGS**

## **13.1****       ****General.** TheBorrower also undertakes with each Creditor Party to comply with the followingprovisions of this Clause 13 at all times during the Security Period except asthe Agent may, with the authorisation of the Majority Lenders, otherwise permit(such permission not to be unreasonably withheld in the case of Clause13.3(e)).

## **13.2****       ****Maintenance ofstatus.** The Borrower will maintain its separate corporate existenceand remain in good standing under the laws of the Republic of the MarshallIslands.

## **13.3****       ****Negativeundertakings.** The Borrower will not:

### (a)           change thenature of its business; or

### (b)           pay anydividend or make any other form of distribution at any time when an Event ofDefault or a Potential Event of Default has occurred and is continuing or willresult from the payment of any dividend or the making of any other form ofdistribution;

### (c)           effect anyform of redemption, purchase or return of share capital at any time when anEvent of Default or a Potential Event of Default has occurred or is continuingor will result from any form of redemption, purchase or return of sharecapital; or

### (d)           provideany form of credit or financial assistance to:

#### (i)            a personwho is directly or indirectly interested in the Borrower’s share or loancapital; or

#### (ii)           anycompany in or with which such a person is directly or indirectly interested orconnected;

or enterinto any transaction with or involving such a person or company on terms whichare, in any respect, less favourable to the Borrower than those which it couldobtain in a bargain made at arms’ length **Providedthat** this shall not prevent or restrict the Borrower from on-lendingthe Loan to the Owners; or

### (e)           enter intoany form of amalgamation, merger or de-merger or any form of reconstruction orreorganisation; or

### (f)            cause theshares of the Borrower to cease to be listed on the New York Stock Exchange.

## **13.4****       ****Financial covenants.**  The Borrower shall ensure that at all times:

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### (a)           the ratioof Total Liabilities (after deducting all Cash and Cash Equivalents) to MarketValue Adjusted Total Assets (after deducting all Cash and Cash Equivalents)shall not exceed 0.7:1;

### (b)           theaggregate of all Cash and Cash Equivalents shall not be less than $30,000,000;

### (c)           theInterest Coverage Ratio shall not be less than 2.5:1; and

### (d)           the MarketValue Adjusted Net Worth of the Borrower’s Group shall not be less than$400,000,000.

## **13.5****       ****Compliancecheck.**  Compliance with theundertakings contained in Clause 13.4 shall be determined in each FinancialYear:

### (a)           at thetime the Agent receives the Applicable Accounts of the Borrower’s Group for thefirst 6-month period of the Borrower’s Group in each Financial Year (pursuantto Clause 12.6(b)), by reference to the unaudited Applicable Accounts for thefirst two financial quarters in the relevant Financial Year and, in the case ofthe second 6-month period, by reference to the audited Applicable Accounts ofthe Borrower’s Group in each Financial Year;

### (b)           at anyother time as the Agent may reasonably request by reference to such evidence asthe Lenders may require to determine and calculate the financial covenantsreferred to in Clause 13.4.

At thesame time as it delivers the Applicable Accounts referred to in this Clause13.5, the Borrower shall deliver to the Agent a certificate in the form set outin Schedule 6 demonstrating its compliance (or not, as the case may be) withthe provisions of Clause 13.4 signed by the chief financial officer of theBorrower.

## **13.6****       ****Subordinationof rights of Borrower.** All rights which theBorrower at any time has (whether in respect of the on-lending of the Loan orany other transaction) against any Owner or their respective assets shall befully subordinated to the rights of the Creditor Parties under the FinanceDocuments;  and in particular, theBorrower shall not during the Security Period:

### (a)           claim, orin a bankruptcy of any Owner prove for, any amount payable to the Borrower byan Owner, whether in respect of the on-lending of the Loan or any othertransaction;

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

### (c)           claim toset-off any such amount against any amount payable by the Borrower to anyOwner.

## **13.7****       ****Maintenance of ownership ofOwners. **TheBorrower shall remain the ultimate legal and beneficial owner of the entireissued and allotted share capital of each Owner which at the relevant time is partyto an Owner Guarantee free from any Security Interest.

# **14****          ****INSURANCE**

## **14.1****       ****General.** TheBorrower also undertakes with each Creditor Party to procure that each Ownerwill comply with the following provisions of this Clause 14 at all times duringthe Security Period except as the Agent may, with the authorisation of theMajority Lenders, otherwise permit.

## **14.2****       ****Maintenance ofobligatory insurances.**  The Borrower shallprocure that each Owner shall keep the Ship owned by it insured at the expenseof that Owner against:

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

### (b)           war risks;

### (c)           protectionand indemnity risks;

### (d)           any otherrisks against which the Security Trustee considers, having regard to practicesand other circumstances prevailing at the relevant time, it would in theopinion of the Security Trustee be reasonable for that Owner to insure andwhich are specified by the Security Trustee by notice to that Owner.

## **14.3****       ****Terms ofobligatory insurances.** The Borrower shall procure that each Owner shall effectsuch insurances:

### (a)           inDollars;

### (b)           in thecase of fire and usual marine risks and war risks, in an amount on an agreedvalue basis being at least the greater of (i) the Market Value of the Shipowned by it and (ii) together with the other Mortgaged Ships, 120 per cent. of:

#### (i)            theaggregate of the Loan and the Outstandings; less

#### (ii)           theaggregate of all Pre-Delivery Advances;

### (c)           in thecase of oil pollution liability risks, for an aggregate amount equal to thehighest level of cover from time to time available under basic protection andindemnity club entry and in the international marine insurance market;

### (d)           inrelation to protection and indemnity risks in respect of the full tonnage ofthe Ship owned by it;

### (e)           on approvedterms; and

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

## **14.4****       ****Further protectionsfor the Creditor Parties.**  In addition to theterms set out in Clause 14.3, the Borrower shall procure that the obligatoryinsurances shall:

### (a)           (except inrelation to risks referred to in Clause 14.2(c)) if the Security Trustee sorequires, name (or be amended to name) the Security Trustee as additional namedassured for its rights and interests, warranted no operational interest andwith full waiver of rights of subrogation against the Security Trustee, butwithout the Security Trustee thereby being liable to pay (but having the rightto pay) premiums, calls or other assessments in respect of such insurance;

### (b)           name theSecurity Trustee as loss payee with such directions for payment as the SecurityTrustee may specify;

### (c)           providethat all payments by or on behalf of the insurers under the obligatoryinsurances to the Security Trustee shall be made (other than in respect ofpremiums due in relation to the Ships) without set-off, counterclaim ordeductions or condition whatsoever;

### (d)           provide thatsuch obligatory insurances shall be primary without right of contribution fromother insurances which may be carried by the Security Trustee or any otherCreditor Party; and

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### (e)           providethat the Security Trustee may make proof of loss if any Owner fails to do so.

## **14.5****       ****Renewal ofobligatory insurances.** The Borrower shall procure that each Owner shall:

### (a)           at least21 days before the expiry of any obligatory insurance effected by it:

#### (i)            notify theSecurity Trustee of the brokers (or the insurers) and any protection andindemnity or war risks association through or with whom that Owner proposes torenew that insurance and of the proposed terms of renewal; and

#### (ii)           seek theSecurity Trustee’s approval to the matters referred to in paragraph (i);

### (b)           at least14 days before the expiry of any obligatory insurance effected by it, renew theinsurance in accordance with the Security Trustee’s approval pursuant toparagraph (a); and

### (c)           procurethat the approved brokers and/or the war risks and protection and indemnityassociations with which such a renewal is effected shall promptly after therenewal notify the Security Trustee in writing of the terms and conditions ofthe renewal.

## **14.6****       ****Copies ofpolicies; letters of undertaking.** The Borrower shall procure that eachOwner shall ensure that all approved brokers provide the Security Trustee withpro forma copies of all policies relating to the obligatory insurances whichthey are to effect or renew and with a letter or letters of undertaking in aform required by the Security Trustee and including undertakings by theapproved brokers that:

### (a)           they willhave endorsed on each policy, immediately upon issue, a loss payable clause anda notice of assignment complying with the provisions of Clause 14.4;

### (b)           they willhold such policies, and the benefit of such insurances, to the order of theSecurity Trustee in accordance with the said loss payable clause;

### (c)           they willadvise the Security Trustee immediately of any material change to the terms ofthe obligatory insurances;

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

### (e)           they willnot (other than in respect of premiums due in relation to the other MortgagedShips) set off against any sum recoverable in respect of a claim relating tothe Ship owned by that Owner under such obligatory insurances any premiums orother amounts due to them or any other person whether in respect of that Shipor 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 theywill not cancel such obligatory insurances by reason of non-payment of suchpremiums or other amounts, and will arrange for a separate policy to be issuedin respect of that Ship forthwith upon being so requested by the SecurityTrustee.

## **14.7****       ****Copies ofcertificates of entry.** The Borrower shall procure that each Owner shall ensurethat any protection and indemnity and/or war risks associations in which theShip owned by it is entered provides the Security Trustee with:

### (a)           acertified copy of the certificate of entry for that Ship;

### (b)           a letteror letters of undertaking in such form as may be required by the SecurityTrustee;

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### (c)           whererequired to be issued under the terms of insurance/indemnity provided by thatOwner’s protection and indemnity association, a certified copy of each UnitedStates of America voyage quarterly declaration (or other similar document ordocuments) made by that Owner in relation to that Ship in accordance with therequirements of such protection and indemnity association; and

### (d)           acertified copy of each certificate of financial responsibility for pollution byoil or other Environmentally Sensitive Material issued by the relevantcertifying authority in relation to that Ship.

## **14.8****       ****Deposit oforiginal policies.** The Borrower shall procure that each Owner shall ensurethat all policies relating to obligatory insurances effected by it aredeposited with the approved brokers through which the insurances are effectedor renewed.

## **14.9****       ****Payment ofpremiums.** The Borrower shall procure that each Owner shall punctuallypay all premiums or other sums payable in respect of the obligatory insuranceseffected by it and produce all relevant receipts when so required by the SecurityTrustee.

## **14.10****     ****Guarantees.** TheBorrower shall procure that each Owner shall ensure that any guaranteesrequired by a protection and indemnity or war risks association are promptlyissued and remain in full force and effect.

## **14.11****     ****Compliance withterms of insurances.** The Borrower shall procure that no Owner shall do nor omitto do (nor permit to be done or not to be done) any act or thing which would ormight render any obligatory insurance invalid, void, voidable or unenforceableor render any sum payable thereunder repayable in whole or in part; and, inparticular that:

### (a)           each Ownershall take all necessary action and comply with all requirements which may fromtime to time be applicable to the obligatory insurances, and (without limitingthe obligation contained in Clause 14.7(c)) ensure that the obligatoryinsurances are not made subject to any exclusions or qualifications to whichthe Security Trustee has not given its prior approval;

### (b)           no Ownershall make any changes relating to the classification or classification societyor manager or operator of the Ship owned by it unless approved (whereapplicable) by the underwriters of the obligatory insurances;

### (c)           each Ownershall make all quarterly or other voyage declarations which may be required bythe protection and indemnity risks association to maintain cover for trading tothe United States of America and Exclusive Economic Zone (as defined in theUnited States Oil Pollution Act 1990 or any other applicable legislation); and

### (d)           no Ownershall employ the Ship owned by it, nor allow it to be employed, otherwise thanin conformity with the terms and conditions of the obligatory insurances,without first obtaining the consent of the insurers and complying with anyrequirements (as to extra premium or otherwise) which the insurers specify.

## **14.12****     ****Alteration toterms of insurances.**  The Borrower shallprocure that no Owner shall neither make or agree to any alteration to theterms of any obligatory insurance nor waive any right relating to any obligatoryinsurance.

## **14.13****     ****Settlement ofclaims.**  The Borrower shallprocure that no Owner shall settle, compromise or abandon any claim under anyobligatory insurance for Total Loss or (subject as hereinafter provided) for aMajor Casualty, and shall do all things necessary and provide all documents,evidence and information to enable the Security Trustee to collect or recoverany moneys which at any time become payable in respect of the obligatoryinsurances.

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## **14.14****     ****Provision ofcopies of communications.** If the Security Trustee shall so request in respect of anOwner, the Borrower shall procure that that Owner shall provide the SecurityTrustee, at the time of each such communication or as otherwise specified bythe Security Trustee, copies of all written communications which may bereasonably requested by the Security Trustee between that Owner and:

### (a)           theapproved brokers; and

### (b)           theapproved protection and indemnity and/or war risks associations; and

### (c)           theapproved insurance companies and/or underwriters;

whichrelate directly or indirectly to:

#### (i)            that Owner’sobligations relating to the obligatory insurances including, withoutlimitation, all requisite declarations and payments of additional premiums orcalls; and

#### (ii)           any creditarrangements made between that Owner and any of the persons referred to inparagraphs (a) or (b) above relating wholly or partly to the effecting ormaintenance of the obligatory insurances.

## **14.15****     ****Provision ofinformation.**  In addition, theBorrower shall procure that each Owner shall promptly provide the SecurityTrustee (or any persons which it may designate) with any information which theSecurity Trustee (or any such designated person) reasonably requests for thepurpose of:

### (a)           obtainingor preparing any report from an independent marine insurance broker as to theadequacy 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 14.16below or dealing with or considering any matters relating to any suchinsurances;

and theBorrower shall, forthwith upon demand, indemnify the Security Trustee inrespect of all fees and other expenses reasonably incurred by or for theaccount of the Security Trustee in connection with any such report as isreferred to in paragraph (a) above.

## **14.16****     ****Mortgagee’sinterest and additional perils insurances.** The Security Trustee shall maintain and renew all or any of thefollowing insurances on such terms, conditions, through such insurers andgenerally in such manner as the Security Trustee may from time to time considerappropriate:

### (a)           amortgagee’s interest marine insurance in an amount of not less than 120 percent. of the aggregate of the Loan and the Outstandings providing for theindemnification of the Creditor Parties for any losses under or in connectionwith any Finance Document which directly or indirectly result from loss of ordamage to any Ship or a liability of any Ship or of any Owner, being a loss ordamage which is prima facie covered by an obligatory insurance but in respectof which there is a non-payment (or reduced payment) by the underwriters byreason of, or on the basis of an allegation concerning:

#### (i)            any act oromission on the part of any Owner, of any operator, charterer, manager orsub-manager of any Ship or of any officer, employee or agent of any Owner or ofany such person, including any breach of warranty or condition or anynon-disclosure relating to such obligatory insurance;

#### (ii)           any act oromission, whether deliberate, negligent or accidental, or any knowledge orprivity of any Owner, any other person referred to in paragraph (i)

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#### above, or of any officer, employeeor agent of any Owner or of such a person, including the casting away ordamaging of any Ship and/or any Ship being unseaworthy; and/or

#### (iii)          any othermatter capable of being insured against under a mortgagee’s interest marineinsurance policy whether or not similar to the foregoing; and

### (b)           amortgagee’s interest additional perils policy in an amount of not less than 120per cent. of the aggregate of the Loan and the Outstandings providing for theindemnification of the Creditor Parties against, among other things, anypossible losses or other consequences of any Environmental Claim, including therisk of expropriation, arrest or any form of detention of any Ship, or theimposition of any Security Interest over any Ship and/or any other mattercapable of being insured against under a mortgagee’s interest additional perilspolicy,

and theBorrower shall upon demand fully indemnify the Security Trustee in respect ofall premiums and other reasonable expenses which are incurred in connectionwith or with a view to effecting, maintaining or renewing any such insurance ordealing with, or considering, any matter arising out of any such insurance.

## **14.17****     ****Review ofinsurance requirements.**  The Security Trusteeshall be entitled to review after prior consultation with the Borrower therequirements of this Clause 14 from time to time in order to take account ofany changes in circumstances after the date of this Agreement which are, in theopinion of the Security Trustee, significant and capable of affecting theOwners or the Ships and its or their insurance (including, without limitation,changes in the availability or the cost of insurance coverage or the risks towhich the Owners may be subject).

## **14.18****     ****Modification ofinsurance requirements.**  The Security Trusteeshall promptly notify the Borrower and the Owners of any proposed modificationunder Clause 14.17 to the requirements of this Clause 14 which the SecurityTrustee reasonably considers appropriate in the circumstances, and suchmodification shall take effect on and from the date it is notified in writingto the Borrower and the Owners as an amendment to this Clause 14 and shall bindthe Borrower accordingly.

## **14.19****     ****Compliance withmortgagee’s instructions.**  The Security Trusteeshall be entitled (without prejudice to or limitation of any other rights whichit may have or acquire under any Finance Document) to require any Ship toremain at any safe port or to proceed to and remain at any safe port designatedby the Security Trustee until the Owners implement any amendments to the termsof the obligatory insurances and any operational changes required as a resultof a notice served under Clause 14.18 and the Borrower shall procure that theOwners comply with any such requirement within a reasonable period of time inthe context of the then prevailing circumstances.

# **15****          ****SHIP COVENANTS**

## **15.1****       ****General.** TheBorrower also undertakes with each Creditor Party to procure that each Ownershall comply with the following provisions of this Clause 15 at all timesduring the Security Period except as the Agent, with the authorisation of theMajority Lenders (such authorisation not to be unreasonably withheld in thecase of a proposed change of name or port of registry under the same flag of aShip), may otherwise permit.

## **15.2****       ****Ship’s name andregistration.** Each Owner shall keep the Ship owned by it registered inits name as a ship registered under an Approved Flag and shall not do or allowto be done anything as a result of which such registration might be cancelledor imperilled; and shall not change the port of registry or the name of thatShip.

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## **15.3****       ****Repair andclassification.** Each Owner shall keep the Ship owned by it in a good andsafe condition and state of repair:

### (a)           consistentwith first-class ship ownership and management practice;

### (b)           so as tomaintain the highest class with a classification society which is a member ofthe International Association of Classification Societies and which isacceptable to the Agent (acting upon the instructions of the Majority Lenders)free of all overdue recommendations and conditions affecting class; and

### (c)           so as tocomply with all laws and regulations applicable to vessels registered on anApproved Flag or to vessels trading to any jurisdiction to which that Ship maytrade from time to time including, but not limited to, the ISM Code, the ISMCode Documentation, the ISPS Code and the ISPS Code Documentation.

## **15.4****       ****Classificationsociety undertaking**. The Borrower shall procure that each Owner shall instructthe classification society of the Ship owned by it to do all or any of thefollowing after the occurrence of an Event of Default or a Potential Event ofDefault (and procure that the classification society undertakes with theSecurity Trustee at such time):

### (a)           to send tothe Security Trustee, following receipt of a written request from the SecurityTrustee, certified true copies of all original class records held by theclassification society in relation to that Ship;

### (b)           to allowthe Security Trustee (or its agents),  atany time and from time to time, to inspect the original class and relatedrecords of that Owner and that Ship at the offices of the classificationsociety and to take copies of them;

### (c)           to notifythe Security Trustee immediately in writing if the classification society:

#### (i)            receivesnotification from that Owner or any person that that Ship’s classificationsociety is to be changed; or

#### (ii)           becomesaware of any facts or matters which may result in or have resulted in a change,suspension, discontinuance, withdrawal or expiry of that Ship’s class under therules or terms and conditions of that Owner’s or that Ship’s membership of theclassification society;

### (d)           followingreceipt of a written request from the Security Trustee:

#### (i)            to confirmthat that Owner is not in default of any of its contractual obligations orliabilities to the classification society and, without limiting the foregoing,that it has paid in full all fees or other charges due and payable to theclassification society; or

#### (ii)           if thatOwner is in default of any of its contractual obligations or liabilities to theclassification society, to specify to the Security Trustee in reasonable detailthe facts and circumstances of such default, the consequences thereof, and anyremedy period agreed or allowed by the classification society.

## **15.5****       ****Modification.** TheBorrower shall procure that no Owner shall make any modification or repairs to,or replacement of, the Ship owned by it or equipment installed on her whichwould or might materially alter the structure, type or performancecharacteristics of that Ship or materially reduce her value.

## **15.6****       ****Removal ofparts.** The Borrower shall procure that no Owner shall remove anymaterial part of the Ship owned by it, or any item of equipment installed on,that Ship unless the part or item so removed is forthwith replaced by asuitable part or item which is in the

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## same condition as or better condition thanthe part or item removed, is free from any Security Interest or any right infavour of any person other than the Security Trustee and becomes oninstallation on that Ship the property of that Owner and subject to thesecurity constituted by the relevant Mortgage **Provided that** an Owner may installequipment owned by a third party if the equipment can be removed without anyrisk of damage to the Ship owned by it.

## **15.7****                       ****Surveys.** The Borrower shall procurethat each Owner shall submit the Ship owned by it regularly to all periodicalor other surveys which may be required for classification purposes and, if sorequired by the Security Trustee provide the Security Trustee, with copies ofall survey reports.

## **15.8****                       ****Inspection**.  The Borrower shall:

### (a)                                  ensure that each Owner shallpermit the Security Trustee (by surveyors or other persons appointed by it forthat purpose) to board the Ship (at the risk of the relevant Owner save whereany loss is shown to have been directly and mainly caused by the grossnegligence or wilful misconduct of such surveyor or other person) owned by itat all reasonable times to inspect her condition or to satisfy themselves aboutproposed or executed repairs or to prepare a survey report (at the reasonablecost of the Borrower) in respect of such Ship and shall afford all properfacilities for such inspections **Provided that**such boarding and inspection does not materially disrupt the relevant Ship’sreasonable operation, repairs or maintenance; and

### (b)                                 ensure that each Ship shall,both at the time of the survey referred to in this Clause 15.8 and at all othertimes throughout the Security Period, be in a good and safe condition and stateof repair.

## **15.9****                       ****Prevention of and release fromarrest.** TheBorrower shall procure that each Owner shall promptly discharge or settle:

### (a)                                  all liabilities which giveor may give rise to maritime or possessory liens on or claims enforceableagainst the Ship owned by it, her Earnings or her Insurances other than suchliens and claims arising in the ordinary course of business (which must in anyevent be discharged in accordance with best ship management practice);

### (b)                                 all taxes, dues and otheramounts charged in respect of the Ship owned by it, her Earnings or herInsurances; and

### (c)                                  all other outgoingswhatsoever in respect of the Ship owned by it, her Earnings or her Insurances;

and, forthwith uponreceiving notice of the arrest of that Ship, or of her detention in exercise orpurported exercise of any lien or claim, the Borrower shall procure that theOwner of that Ship shall procure her release within 5 Business Days ofreceiving such notice by providing bail or otherwise as the circumstances mayrequire.

## **15.10****                ****Compliance with laws etc.** The Borrower shall procurethat each Owner and the Approved Manager shall:

### (a)                                  comply, or procurecompliance with, the ISM Code, the ISPS Code, all Environmental Laws and allother 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 byit nor allow her employment in any manner contrary to any law or regulation inany relevant jurisdiction including, but not limited to, the ISM Code and theISPS Code; and

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### (c)                                  in the event of hostilitiesin any part of the world (whether war is declared or not), not cause or permitthe Ship owned by it to enter or trade to any zone which is declared a war zoneby any government or by that Ship’s war risks insurers unless, in the case ofsuch a zone where an additional premium would be payable, that Owner has (atits expense) effected any special, additional or modified insurance coverrequired for it to enter or trade to any war zone.

## **15.11****                ****Provision of information.** The Borrower shall procurethat each Owner shall promptly provide the Agent with any information which itreasonably requests regarding:

### (a)                                  the Ship owned by it, heremployment, position, engagements and her Insurances;

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

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

### (d)                                 any towages and salvages;and

### (e)                                  that Owner’s compliance, theApproved Manager’s compliance, or the compliance of the Ship owned by it, withthe ISM Code and the ISPS Code;

and, upon the Agent’srequest, provide copies of any current charter relating to the Ship owned byit, of any current charter guarantee and, of the ISM Code Documentation and theISPS Code Documentation.

## **15.12****                ****Notification of certain events.** The Borrower shall procurethat each Owner shall, as soon as it becomes aware of any of the eventsreferred to in this Clause 15.12, notify the Agent by fax, confirmed forthwithby letter, of:

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

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

### (c)                                  any requirement orrecommendation made by any insurer or classification society or by anycompetent authority which is not complied with in accordance with its terms(including, without limitation, any time limit specified by any insurer or classificationsociety or any competent authority);

### (d)                                 any arrest or detention ofthe Ship owned by it (if the arrest or detention has not been released within 3Business Days of its imposition or the Borrower or the relevant Owner considersthat the arrest or detention will not be released within 3 Business Day of itsimposition), any exercise or purported exercise of any lien on that Ship or herEarnings or her Insurances or any requisition of that Ship for hire;

### (e)                                  any intended dry docking ofthe Ship owned by it which the Owner knows, or reasonably determines, will ormay exceed (or has exceeded) 10 days in total;

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

### (g)                                 any claim for breach of theISM Code or the ISPS Code being made against that Owner and, to the extent thatthat Owner is aware of such claim, the Approved Manager or otherwise inconnection with the Ship owned by it; or

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

and that that Owner shallkeep the Agent advised in writing on a regular basis and in such detail as theAgent shall require of that Owner’s or any other person’s response to any ofthose events or matters.

## **15.13****                ****Restrictions on chartering,appointment of managers etc.** The Borrower shall procure that no Owner shall, inrelation to the Ship owned by it:

### (a)                                  save for any ExistingCharter existing on the date of this Agreement which is a bareboat charter, letthe Ship owned by it on demise charter for any period;

### (b)                                 enter into any time orconsecutive voyage charter in respect of the Ship owned by it for a term of atleast, or which by virtue of any optional extensions may be at least, 12months;

### (c)                                  charter the Ship owned by itotherwise than on bona fide arm’s length terms at the time when that Ship isfixed;

### (d)                                 appoint (or permit theappointment of) a manager of the Ship owned by it other than the ApprovedManager or agree to any alteration to the terms of the Approved Manager’sappointment;

### (e)                                  de-activate or lay up theShip owned by it; or

### (f)                                    put the Ship owned by itinto the possession of any person for the purpose of work being done upon herin an amount exceeding or likely to exceed $1,000,000 (or the equivalent in anyother currency) unless that person has first given to the Security Trustee andin terms satisfactory to it a written undertaking not to exercise any lien onthat Ship or her Earnings or her Insurances for the cost of such work orotherwise or other arrangements satisfactory to the Security Trustee are madeto ensure that no such lien will be exercised.

## **15.14****                ****Notice of Mortgage.** The Borrower shall procurethat each Owner shall keep the relevant Mortgage registered against the Shipowned by it as a valid first priority mortgage, carry on board that Ship acertified copy of the relevant Mortgage and place and maintain in a conspicuousplace in the navigation room and the Master’s cabin of that Ship a framedprinted notice stating that that Ship is mortgaged by that Owner to theLenders.

## **15.15****                ****Sharing of Earnings.** The Borrower shall procurethat no Owner shall:

### (a)                                  enter into any agreement orarrangement for the sharing of any Earnings;

### (b)                                 enter into any agreement orarrangement for the postponement of any date on which any Earnings are due; thereduction of the amount of any Earnings or otherwise for the release or adversealteration of any right of that Owner to any Earnings; or

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

# **16****                                 ****SECURITY COVER**

## **16.1****                       ****Provision of additional securitycover; prepayment.**  The Borrower undertakes with each CreditorParty that, if at any time the Agent notifies the Borrower that:

### (a)                                  the aggregate of the MarketValues of the Mortgaged Ships; plus

### (b)                                 the net realisable value ofany additional security previously provided under this Clause 16,

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is below 125 per cent. ofthe aggregate of the Loan, the Swap Exposure and the Outstandings less theaggregate of all Pre-Delivery Advances, the Borrower will, within 14 BusinessDays after the date on which the Agent’s notice is served, either:

#### (i)                                     provide, or ensure that athird party provides, additional security acceptable to the Lenders which, inthe opinion of the Majority Lenders, has a net realisable value at least equalto the shortfall and which, if it consists of or includes a Security Interest,covers such asset or assets and is documented in such terms as the Agent may,with authorisation from the Majority Lenders, approve or require; or

#### (ii)                                  prepay in accordance withClause 9 such part (at least) of the Loan and/or procure cancellation of suchpart of the Outstandings as will eliminate the shortfall.

## **16.2****                       ****Meaning of additional security.**  In Clause 16.1 “**security**” means a Security Interest over an asset or assetsacceptable to the Lenders (whether securing the Borrower’s liabilities underthe Finance Documents or a guarantee in respect of those liabilities), or aguarantee, letter of credit or other security in respect of the Borrower’sliabilities under the Finance Documents.

## **16.3****                       ****Requirement for additionaldocuments.**  The Borrower shall not be deemed to havecomplied with paragraph (i) of Clause 16.1 until the Agent has received inconnection with the additional security certified copies of documents of thekinds referred to in paragraphs 3, 4 and 5 of Schedule 3 Part A and such legalopinions in terms acceptable to the Majority Lenders from such lawyers as theymay select.

## **16.4****                       ****Valuation of Ship not subject toa long-term charter.**  The Market Value of a Mortgaged Ship which atthe relevant time is not subject to a charter or other contract of employmenthaving an unexpired term of at least 12 months with a first class acceptablecharterer (in the absolute discretion of the Agent) is that shown by taking theaverage of two valuations prepared:

### (a)                                  as at a date not more than 6weeks previously;

### (b)                                 by 2 Approved Brokersappointed by the Borrower, with both reporting to the Agent;

### (c)                                  with or without physicalinspection of that Ship (as the Agent may require);

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

### (e)                                  after deducting theestimated amount of the usual and reasonable expenses which would be incurredin connection with the sale.

**Provided that**if the difference between the 2 valuations obtained at anyone time pursuant to this Clause 16.4 is greater than 10 per cent. a valuationshall be commissioned from a third Approved Broker appointed by the Agent.  Such valuation shall be conducted in accordancewith this Clause 16.4 and the Market Value of the Ship in such circumstancesshall be the average of the initial 2 valuations and the valuation provided bythe third Approved Broker.

## **16.5****                       ****Valuation of Ship subject tolong-term charter. **The Market Value of aMortgaged Ship which at the relevant time is subject to a charter or othercontract of employment having an unexpired term of at least 12 months with afirst class charterer acceptable to the Agent (which acceptance shall not beunreasonably withheld) shall be the aggregate of the present values (as may beconclusively determined by the Agent) of:

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### (a)                                  the Bareboat-equivalent TimeCharter Income of the Ship in respect of the remaining unexpired term of therelevant charter or other contract of employment excluding any periods forwhich the relevant charter or contract of employment may be renewed at theoption of any party (for the purposes of this Clause 16.5, an “**option period**”); and

### (b)                                 the current charter-freemarket value (determined in accordance with Clause 16.4 but subject to theadjustments referred to in this Clause 16.5) of a vessel with identicalcharacteristics to the Ship other that its age which shall, for the purposes ofthis Clause 16.5, be considered to be the age of the Ship at the expiration ofthe charter or other contract of employment to which the Ship is subject at therelevant time (excluding any option periods), as such value may be adjusted totake into account the terms of any commitments undertaken by the Owner of theShip which may affect its value.

For the purposes of thisClause 16.5, the discount rate which will apply in calculating the presentvalue of the amounts referred to in paragraphs (a) and (b) will be theapplicable Interest Rate Swap Rate for a period equal to the unexpired term ofthe Ship’s time charter or other contract of employment (excluding any optionperiods (rounded up to the nearest integral year)) unless the unexpired term ofthe Ship’s charter or other contract of employment (excluding any option periods)is less than 12 months in which the Interest Rate Swap Rate for a period of 12months will apply.

## **16.6****                       ****Value of additional security.**  The net realisable value of any additionalsecurity which is provided under Clause 16.1 and which consists of a SecurityInterest over a vessel shall be that shown by a valuation complying with therequirements of Clause 16.4.

## **16.7****                       ****Valuations binding.**  Any valuation under paragraph (i) of Clause16.1, Clauses 16.4, 16.5 or 16.6 shall, in the absence of manifest error, be bindingand conclusive as regards the Borrower, as shall be any valuation which theMajority Lenders make of a security which does not consist of or include aSecurity Interest.

## **16.8****                       ****Provision of information.**  The Borrower shall promptly provide the Agentand any Approved Broker or expert acting under Clause 16.4, 16.5 or 16.6 withany information which the Agent or the Approved Broker or expert may reasonablyrequest for the purposes of the valuation; and, if the Borrower fails toprovide the information by the date specified in the request, the valuation maybe made on any basis and assumptions which the Approved Broker or the MajorityLenders (or the expert appointed by them) consider prudent.

## **16.9****                       ****Payment of valuation expenses.**  Without prejudice to the generality of theBorrower’s obligations under Clauses 21.2, 21.3 and 22.3, the Borrower shall,on demand, pay the Agent the amount of the fees and expenses of any ApprovedBroker or expert instructed or approved by the Agent under this Clause and alllegal and other expenses incurred by any Creditor Party in connection with anymatter arising out of this Clause.

## **16.10****                ****Frequency of Valuations.**  The Borrower acknowledges and agrees that theAgent may commission valuations of the Mortgaged Ships at such times as theMajority Lenders shall deem necessary and, in any event, not less often thanonce during each 3-month period of the Security Period **Provided that** in each calendar year oneset of valuations of each Ship may be obtained from the electronic services providedby an Approved Broker subject to such electronic services having beenpreviously approved by the Agent (acting upon the instructions of the MajorityLenders) in writing.

# **17****                                 ****PAYMENTS AND CALCULATIONS**

## **17.1****                       ****Currency and method of payments**.  All payments to be made:

### (a)                                  by the Lenders to the Agent;or

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

under a Finance Documentshall be made to the Agent or to the Security Trustee, in the case of an amountpayable to it:

#### (i)                                     if in Dollars, by not laterthan 11.00 a.m. (New York City time) and if in an Optional Currency, by notlater than 11.00 a.m. (in the principal financial centre for that OptionalCurrency), in each case on****thedue date;

#### (ii)                                  if in Dollars, in same dayDollar funds settled through the New York Clearing House Interbank PaymentsSystem and if in an Optional Currency, in immediately available funds (or ineach case in such other funds and/or settled in such other manner as the Agentshall specify as being customary at the time for the settlement ofinternational transactions of the type contemplated by this Agreementdenominated in Dollars or the relevant Optional Currency);

#### (iii)                               in the case of an amountpayable by a Lender to the Agent or by the Borrower to the Agent or any Lender,if in Dollars, to the account of the Agent at the Receiving Bank (Account No000261123) with reference “Danaos Corporation - US$700m facility”, or if in anOptional Currency to such account of the Agent with such bank as the Agentshall have notified to the Borrower and the other Creditor Parties, or in eachcase to such other account with such other bank as the Agent may from time totime notify to the Borrower and the other Creditor Parties; and

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

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

### (a)                                  the due date shall beextended to the next succeeding Business Day; or

### (b)                                 if the next succeedingBusiness Day falls in the next calendar month, the due date shall be broughtforward to the immediately preceding Business Day;

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

## **17.3****                       ****Basis for calculation of periodicpayments.**  All interest and commitment fee and any otherpayments under any Finance Document which are of an annual or periodic natureshall accrue from day to day and shall be calculated on the basis of the actualnumber of days elapsed and a 360 day year or (in relation to any amountdenominated in Sterling) a 365 day year.

## **17.4****                       ****Currency of Interest Payments.** All payments of interest in respect of theLoan or any part thereof shall be made in the currency in which the Loan or therelevant part thereof is outstanding at the relevant time.

## **17.5****                       ****Distribution of payments toCreditor Parties.**  Subject to Clauses 17.6, 17.7 and 17.8:

### (a)                                  any amount received by theAgent under a Finance Document for distribution or remittance to a Lender, theIssuing Bank or the Security Trustee shall be made available by the Agent tothat Lender, the Issuing Bank or, as the case may be, the Security Trustee bypayment, with funds having the same value as the funds received, to suchaccount as the Lender, the Issuing Bank or the Security Trustee may havenotified to the Agent not less than 5 Business Days previously; and

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### (b)                                 amounts to be applied insatisfying amounts of a particular category which are due to the Lendersgenerally shall be distributed by the Agent to each Lender pro rata to theamount in that category which is due to it.

## **17.6****                       ****Permitted deductions by Agent.**  Notwithstanding any other provision of thisAgreement or any other Finance Document, the Agent may, before making an amountavailable to a Lender or the Issuing Bank, deduct and withhold from that amountany sum which is then due and payable to the Agent from the Issuing Bank orthat Lender under any Finance Document or any sum which the Agent is thenentitled under any Finance Document to require that Lender or the Issuing Bankto pay on demand.

## **17.7****                       ****Agent only obliged to pay whenmonies received.**  Notwithstanding any other provision of thisAgreement or any other Finance Document, the Agent shall not be obliged to makeavailable to the Borrower, the Issuing Bank or any Lender any sum which theAgent is expecting to receive for remittance or distribution to the Borrower, theIssuing Bank or that Lender until the Agent has satisfied itself that it hasreceived that sum.

## **17.8****                       ****Refund to Agent of monies notreceived.**  If and to the extent that the Agent makesavailable a sum to the Borrower, the Issuing Bank or a Lender, without firsthaving received that sum, the Borrower, the Issuing Bank or (as the case maybe) the Lender concerned shall, on demand:

### (a)                                  refund the sum in full tothe Agent; and

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

## **17.9****                       ****Agent may assume receipt.**  Clause 17.8 shall not affect any claim whichthe Agent has under the law of restitution, and applies irrespective of whetherthe Agent had any form of notice that it had not received the sum which it madeavailable (except an express notice from a Lender that it will not fund itsContribution).

## **17.10****                ****Creditor Party accounts.**  Each Creditor Party shall maintain accountsshowing the amounts owing to it by the Borrower and each Security Party underthe Finance Documents and all payments in respect of those amounts made by theBorrower and any Security Party.

## **17.11****                ****Agent’s memorandum account.**  The Agent shall maintain a memorandum accountshowing the amounts advanced by the Lenders and all other sums owing to theAgent, the Security Trustee, the Issuing Bank and each Lender from the Borrowerand each Security Party under the Finance Documents and all payments in respectof those amounts made by the Borrower and any Security Party.

## **17.12****                ****Accounts prima facie evidence.**  If any accounts maintained under Clauses17.10 and 17.11 show an amount to be owing by the Borrower or a Security Partyto a Creditor Party, those accounts shall be prima facie evidence that thatamount is owing to that Creditor Party.

# **18****                                 ****APPLICATION OF RECEIPTS**

## **18.1****                       ****Normal order of application.** Except as any FinanceDocument may otherwise provide, any sums which are received or recovered by anyCreditor Party under or by virtue of any Finance Document after the service ofa notice on the Borrower under Clauses 20.2(a)(i) or (ii) shall be applied:

### (a)                                  FIRST: in or towardssatisfaction of any amounts then due and payable under the Finance Documentsand the Master Agreement in the following order and proportions:

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### (i)                                     first, in or towardssatisfaction pro rata of all amounts then due and payable to the CreditorParties under the Finance Documents other than those amounts referred to atparagraphs (ii) and (iii) (including, but without limitation, all amountspayable by the Borrower under Clauses 21, 22 and 23 of this Agreement or by theBorrower or any Security Party under any corresponding or similar provision inany other Finance Document or in the Master Agreement);

#### (ii)                                  secondly, in or towardssatisfaction pro rata of any and all amounts of interest or default interestpayable to the Creditor Parties under the Finance Documents and the MasterAgreement (and, for this purpose, the expression “**interest**” shall include any net amount which the Borrower shallhave become liable to pay or deliver under section 2(e) (Obligations) of theMaster Agreement but shall have failed to pay or deliver to the Swap Bank atthe time of application or distribution under this Clause 18); and

#### (iii)                               thirdly, in or towardssatisfaction pro rata of the Loan and the Swap Exposure (in the case of thelatter, calculated as at the actual Early Termination Date applying to eachparticular Designated Transaction, or if no such Early Termination Date shallhave occurred, calculated as if an Early Termination Date occurred on the dateof application or distribution hereunder);

### (b)                                 SECONDLY: in retention of anamount equal to any amount not then due and payable under any Finance Documentor the Master Agreement but which the Agent, by notice to the Borrower, theSecurity Parties and the other Creditor Parties, states in its opinion will ormay become due and payable in the future and, upon those amounts becoming dueand payable, in or towards satisfaction of them in accordance with theprovisions of Clause 18.1(a); and

### (c)                                  THIRDLY: any surplus shallbe paid to the Borrower or to any other person appearing to be entitled to it.

## **18.2****                       ****Variation of order of application.**  The Agent may, with the authorisation of allthe Lenders, the Issuing Bank and the Swap Bank, by notice to the Borrower, theSecurity Parties and the other Creditor Parties provide for a different mannerof application from that set out in Clause 18.1 either as regards a specifiedsum or sums or as regards sums in a specified category or categories.

## **18.3****                       ****Notice of variation of order ofapplication.**  The Agent may give notices under Clause 18.2from time to time in respect of sums which may be received or recovered in thefuture.

## **18.4****                       ****Appropriation rights overridden.**  This Clause 18 and any notice which the Agentgives under Clause 18.2 shall override any right of appropriation possessed,and any appropriation made, by the Borrower or any Security Party.

# **19****                                 ****APPLICATION OF EARNINGS**

## **19.1****                       ****Payment of Earnings.**  The Borrower undertakes with each CreditorParty that, throughout the Security Period it will ensure that (subject only tothe provisions of the General Assignments), all the Earnings of each MortgagedShip are paid to the Owner’s Earnings Account relative to such Ship or, at theoption of the Borrower, to the Danaos Earnings Account **Provided that**at****any time after theoccurrence of an Event of Default the Agent (acting with the authorisation ofthe Majority Lenders) may, by notice to the Borrower, direct that the Earningsof the Ships (or any of them) be paid to a particular Earnings Account orEarnings Accounts and the Borrower shall comply or ensure that the relevantOwner or Owners comply with the Agent’s direction forthwith.

## **19.2****                       ****Location of accounts.**  The Borrower shall, and shall ensure eachOwner shall, promptly:

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### (a)                                  comply with any requirementof the Agent as to the location or re-location of the Earnings Accounts ~~andthe Cash Collateral Account~~ (or any of them); and

### (b)                                 execute any documents whichthe Agent specifies to create or maintain in favour of the Security Trustee aSecurity Interest over (and/or rights of set-off, consolidation or other rightsin relation to) the Earnings Accounts ~~and the Cash Collateral Account~~ (orany of them).

# **20****                                 ****EVENTS OF DEFAULT**

## **20.1****                       ****Events of Default.**  An Event of Default occurs if:

### (a)                                  the Borrower or any SecurityParty fails to pay when due or (if so payable) on demand any sum payable undera Finance Document or under any document relating to a Finance Document;  such failure shall not constitute an Event ofDefault if:

#### (i)                                     such failure is due to abank payment transmission error; and

#### (ii)                                  the Borrower or the relevantSecurity Party remedies such failure within 3 days of the due date of paymentof the relevant amount; or

### (b)                                 any breach occurs of Clause10, 12.3, 13.2, 13.3, 13.4, 14.2 or 16.1; or

### (c)                                  any breach by the Borroweror any Security Party occurs of any provision of a Finance Document (other thana breach covered by paragraphs (a) or (b)) unless, in the opinion of theMajority Lenders, such default is capable of remedy, and such default isremedied within 14 Business Days after written notice from the Agent requestingaction to remedy the same; or

### (d)                                 (subject to any applicablegrace period specified in the Finance Document) any breach (which the SecurityTrustee considers, in its discretion, to be material) by the Borrower or anySecurity Party occurs of any provision of a Finance Document (other than a breachcovered by paragraphs (a), (b) or (c)); or

### (e)                                  any representation, warrantyor statement (which the Security Trustee considers, in its discretion, to bematerial) made by, or by an officer of, the Borrower or a Security Party in aFinance Document or in a Drawdown Notice or any other notice or documentrelating to a Finance Document is untrue or misleading when it is made suchfailure shall not constitute an Event of Default if an innocentmisrepresentation has been made and which, if capable of remedy, is remediedwithin 10 Business Days of its occurrence unless such innocentmisrepresentation is made on a Drawdown Date; or

### (f)                                    any of the following occursin relation to any Financial Indebtedness of a Relevant Person (other than theBorrower) or any Financial Indebtedness of the Borrower of at least $1,000,000(or the equivalent in another currency) in aggregate in the case of anyFinancial Indebtedness falling within paragraph (a) of the definition of thatterm or any Financial Indebtedness falling within all other paragraphs of thedefinition of that term (or, when aggregated with any Financial Indebtednessfalling within paragraph (a) of that term) of at least $10,000,000 in aggregate(or the equivalent in another currency):

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

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

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#### (iii)                               a lease, hire purchaseagreement or charter creating any Financial Indebtedness of a Relevant Personis lawfully terminated by the lessor or owner or becomes capable of beinglawfully terminated as a consequence of any termination event; or

#### (iv)                              any overdraft, loan, noteissuance, acceptance credit, letter of credit, guarantee, foreign exchange orother facility, or any swap or other derivative contract or transaction,relating to any Financial Indebtedness of a Relevant Person ceases to beavailable or becomes capable of being terminated as a result of any event ofdefault, or cash cover is required, or becomes capable of being required, inrespect of such a facility as a result of any event of default; or

#### (v)                                 any Security Interestsecuring any Financial Indebtedness of a Relevant Person becomes enforceable;or

### (g)                                 any of the following occursin relation to a Relevant Person:

#### (i)                                     a Relevant Person becomesunable to pay its debts as they fall due; or

#### (ii)                                  any assets of a Relevant Personare subject of any form of execution, attachment, arrest, sequestration ordistress in respect of a sum of, or sums aggregating, $100,000 (or $10,000,000in the case of the Borrower) or more or the equivalent in another currency; or

#### (iii)                               any administrative or otherreceiver is appointed over any asset of a Relevant Person; or

#### (iv)                              a Relevant Person makes anyformal declaration of bankruptcy or any formal statement to the effect that itis insolvent or likely to become insolvent, or a winding up or administrationorder is made in relation to a Relevant Person, or the members or directors ofa 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 thisparagraph does not apply to a fully solvent winding up of a Relevant Personother than the Borrower or an Owner which is, or is to be, effected for thepurposes of an amalgamation or reconstruction previously approved by theMajority Lenders and effected not later than 3 months after the commencement ofthe winding up; or

#### (v)                                 a petition is presented inany Pertinent Jurisdiction for the winding up or administration, or theappointment of a provisional liquidator, of a Relevant Person unless, in thecase of an involuntary petition, the petition is being contested in good faithand on substantial grounds and is dismissed or withdrawn within 30 days of thepresentation of the petition; or

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

#### (vii)                           any meeting of the membersor directors of a Relevant Person is summoned for the purpose of considering aresolution or proposal to authorise or take any action of a type described inparagraphs (iii), (iv), (v) or (vi); or

#### (viii)                        in a Pertinent Jurisdictionother than England, any event occurs or any procedure is commenced which, inthe reasonable opinion of the Majority Lenders, is similar to any of theforegoing; or

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### (h)                                 the Borrower ceases, orthreatens to cease, to carry on all or a substantial part of its business or,as a result of intervention by or under the authority of any government, thebusiness of the Borrower is wholly or partially curtailed or suspended, or allor a substantial part of the assets or undertaking of the Borrower is seized,nationalised, expropriate of compulsorily acquired; or

### (i)                                     it becomes unlawful in anyPertinent Jurisdiction or impossible:

#### (i)                                     for the Borrower or any SecurityParty to discharge any liability under a Finance Document or to comply with anyother obligation which the Majority Lenders consider material under a FinanceDocument; or

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

### (j)                                     any consent necessary toenable any Owner to own, operate or charter the Ship owned by it or to enablethe Borrower, any Owner or any Security Party to comply with any provisionwhich the Majority Lenders consider material of a Finance Document, anyExisting Charter, any charter referred to in paragraph (b) of the definition of“Charterparty Assignment” or an Approved Purchase Contract is not granted,expires without being renewed, is revoked or becomes liable to revocation orany condition of such a consent is not fulfilled if this materially affects thesecurity position of the Creditor Parties (or any of them) or the ability ofthe Borrower or a Security Party to timely discharge and/or perform its ortheir liabilities and obligations (or any of them) under any Finance Document;or

### (k)                                  if, without the priorconsent of the Majority Lenders, members of the Coustas family (either directlyand/or through companies beneficially owned by members of the Coustas familyand/or trusts or foundations of which members of the Coustas family arebeneficiaries) own and control less than 51 per cent. of the issued votingshare capital of the Borrower; or

### (l)                                     if, without the prior consentof the Majority Lenders, the shares of the Borrower cease to be listed on theNew York Stock Exchange; or

### (m)                               it appears to the MajorityLenders that, without their prior consent, a change has occurred or probablyhas occurred after the date of this Agreement in the ultimate beneficialownership of any of the shares in any Owner or in the ultimate control of thevoting rights attaching to any of those shares; or

### (n)                                 any provision which theMajority Lenders consider material of a Finance Document proves to have been orbecomes invalid or unenforceable, or a Security Interest created by a FinanceDocument proves to have been or becomes invalid or unenforceable or such aSecurity Interest proves to have ranked after, or loses its priority to,another Security Interest or any other third party claim or interest; or

### (o)                                 the security constituted bya Finance Document is in any way imperilled or in jeopardy unless within 14Business Days of the security being so imperilled or jeopardised (i) theBorrower or a Security Party provides to the Security Trustee security in theform of a new Finance Document which, in the opinion of the Lenders, isequivalent to that constituted by the Finance Document which has becomeimperilled or jeopardised or (ii) the security ceases to be imperilled or injeopardy; or

### (p)                                 the Master Agreement isterminated, cancelled, suspended, rescinded or revoked or otherwise ceases toremain in full force and effect for any reason except with the consent of theAgent, acting with the authorisation of the Majority Lenders; or

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### (q)                                 for any reason whatsoever,any Ship ceases to be managed by the Approved Manager on terms in all respectsapproved by the Majority Lenders; or

### (r)

### (s)                                  an Event of Default (asdefined in Section 14 of the Master Agreement) occurs; or

### (t)                                    any other event occurs orany other circumstances arise or develop including, without limitation:

#### (i)                                     a change in the financialposition, state of affairs or prospects of the Borrower or any Owner; or

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

in the light of which theMajority Lenders consider that there is a material risk that the Borrower is,or will later become, unable to discharge its liabilities under the FinanceDocuments as they fall due.

## **20.2****                       ****Actions following an Event ofDefault.**  On, or at any time after, the occurrence ofan Event of Default which is continuing:

### (a)                                  the Agent may, and if soinstructed by the Majority Lenders, the Agent shall:

#### (i)                                     serve on the Borrower anotice stating that the Commitments and all other obligations of each Lenderand the Issuing Bank to the Borrower under this Agreement are terminated;and/or

#### (ii)                                  serve on the Borrower anotice stating that the Loan (excluding, for the avoidance of doubt, anyGuarantee), all accrued interest and all other amounts accrued or owing underthis Agreement are immediately due and payable or are due and payable ondemand; and/or

#### (iii)                               take any other action which,as a result of the Event of Default or any notice served under paragraph (i) or(ii), the Agent and/or the Lenders and/or the Issuing Bank are entitled to takeunder 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 theMajority Lenders, the Security Trustee shall take any action which, as a resultof the Event of Default or any notice served under paragraph (a) (i) or (ii),the Security Trustee, the Agent and/or the Issuing Bank and/or the Lenders areentitled to take under any Finance Document or any applicable law.

## **20.3****                       ****Termination of Commitments.**  On the service of a notice under paragraph(a)(i) of Clause 20.2, the Commitments and all other obligations of each Lenderand the Issuing Bank to the Borrower under this Agreement shall terminate.

## **20.4****                       ****Acceleration.**  On the service of a notice under paragraph(a)(ii) of Clause 20.2, the Loan (excluding, for the avoidance of doubt, anyGuarantee), all accrued interest and all other amounts accrued or owing fromthe Borrower or any Security Party under this Agreement and every other FinanceDocument shall become immediately due and payable or, as the case may be,payable on demand.

## **20.5****                       ****Multiple notices; action withoutnotice.**  The Agent may serve notices under paragraphs(a) (i) and (ii) of Clause 20.2 simultaneously or on different dates and itand/or the

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## Security Trustee may take any action referredto in that Clause if no such notice is served or simultaneously with or at anytime after the service of both or either of such notices.

## **20.6****                       ****Notification of Creditor Partiesand Security Parties.**  The Agent shall send to each Lender, theSecurity Trustee, the Issuing Bank and each Security Party a copy or the textof any notice which the Agent serves on the Borrower under Clause 20.2; but thenotice shall become effective when it is served on the Borrower, and no failureor delay by the Agent to send a copy or the text of the notice to any otherperson shall invalidate the notice or provide the Borrower or any SecurityParty with any form of claim or defence.

## **20.7****                       ****Creditor Party rights unimpaired.**  Nothing in this Clause shall be taken toimpair or restrict the exercise of any right given to individual Lenders undera Finance Document or the general law; and, in particular, this Clause iswithout prejudice to Clause 3.1.

## **20.8****                       ****Exclusion of Creditor Partyliability.**  No Creditor Party, and no receiver or managerappointed by the Security Trustee, shall have any liability to the Borrower ora Security Party:

### (a)                                  for any loss caused by anexercise of rights under, or enforcement of a Security Interest created by, aFinance Document or by any failure or delay to exercise such a right or toenforce such a Security Interest; or

### (b)                                 as mortgagee in possessionor otherwise, for any income or principal amount which might have been producedby or realised from any asset comprised in such a Security Interest or for anyreduction (however caused) in the value of such an asset;

except that this does notexempt a Creditor Party or a receiver or manager from liability for lossesshown to have been caused by the gross negligence or the wilful misconduct ofsuch Creditor Party’s own officers and employees or (as the case may be) suchreceiver’s or manager’s own partners or employees.

## **20.9****                       ****Relevant Persons.**  In this Clause 20 a “**Relevant Person**” means the Borrower, aSecurity Party (other than any bareboat charterer which is a party to aBareboat Charter Security Agreement) and any company which is a subsidiary ofthe Borrower or a Security Party or of which a Security Party is a subsidiarybut excluding any company which is dormant and the value of whose gross assetsis $50,000 or less.

## **20.10****                ****Interpretation.**  In Clause 20.1(f) references to an event ofdefault or a termination event include any event, howsoever described, which issimilar to an event of default in a facility agreement or a termination eventin a finance lease; and in Clause 20.1(g) “**petition**” includes an application.

# **21****                                 ****FEES AND EXPENSES**

## **21.1****                       ****Arrangement, guarantee commissionand commitment commission fees.**  The Borrower shallpay to the Agent arrangement fees, guarantee commission and commitmentcommission of the amounts, at the rates, and at the times, previously agreed inwriting between the Agent and the Borrower for distribution among the Lendersin the proportions agreed.

## **21.2****                       ****Costs of negotiation, preparationetc.**  The Borrower shall pay to the Agent on itsdemand the amount of all expenses reasonably incurred by the Agent, the Lendersor the Security Trustee in connection with the negotiation, preparation,execution or registration of any Finance Document or any related document orwith any transaction contemplated by a Finance Document or a related document.

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## **21.3****                       ****Costs of variations, amendments,enforcement etc.**  The Borrower shall pay to the Agent, on theAgent’s demand, the amount of all expenses incurred by a Lender in connectionwith:

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

### (b)                                 any consent or waiver by theLenders, the Issuing Bank, the Majority Lenders or the Lender concerned underor in connection with a Finance Document, or any request for such a consent orwaiver;

### (c)                                  the valuation of anysecurity provided or offered under Clause 16 or any other matter relating tosuch security; or

### (d)                                 any step taken by the Lenderconcerned with a view to the protection, exercise or enforcement of any rightor Security Interest created by a Finance Document or for any similar purpose.

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

## **21.4****                       ****Documentary taxes.**  The Borrower shall promptly pay any taxpayable on or by reference to any Finance Document, and shall, on the Agent’sdemand, fully indemnify each Creditor Party against any liabilities andexpenses resulting from any failure or delay by the Borrower to pay such a tax.

## **21.5****                       ****Certification of amounts.**  A notice which is signed by an officer of aCreditor Party, which states that a specified amount, or aggregate amount, isdue to that Creditor Party under this Clause 21 and which indicates (withoutnecessarily specifying a detailed breakdown) the matters in respect of whichthe amount, or aggregate amount, is due shall be prima facie evidence that theamount, or aggregate amount, is due save in the case of manifest error.

# **22****                                 ****INDEMNITIES**

## **22.1****                       ****Indemnities regarding borrowingand repayment of Loan.**  The Borrower shall fully indemnify the Agent,the Issuing Bank and each Lender on the Agent’s demand and the Security Trusteeon its demand in respect of all expenses, liabilities and losses (including,without limitation, any loss of Margin) which are incurred by that CreditorParty, or which that Creditor Party reasonably and with due diligence estimatesthat it will incur, as a result of or in connection with:

### (a)                                  an Advance not beingborrowed, and/or a Guarantee not being issued, on the date specified in theDrawdown Notice for any reason other than a default by the Lender claiming theindemnity;

### (b)                                 the receipt or recovery ofall or any part of the Loan or an overdue sum otherwise than on the last day ofan Interest Period applicable to it or other relevant period;

### (c)                                  any failure (for whateverreason) by the Borrower to make payment of any amount due under a FinanceDocument on the due date or, if so payable, on demand (after giving credit forany default interest paid by the Borrower on the amount concerned under Clause8);

### (d)                                 the occurrence and/orcontinuance of an Event of Default or a Potential Event of Default and/or theacceleration of repayment of the Loan under Clause 20;

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

## **22.2****                       ****Breakage costs.**  Without limiting its generality, Clause 22.1covers any liability, expense or loss, including a loss of a prospectiveprofit, incurred by a Lender:

### (a)                                  in liquidating or employingdeposits from third parties acquired or arranged to fund or maintain all or anypart of its Contribution and/or any overdue amount (or an aggregate amountwhich includes its Contribution or any overdue amount); and

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

## **22.3****                       ****Miscellaneous indemnities.**  The Borrower shall fully indemnify eachCreditor Party 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 orbrought against, or incurred by, the Creditor Party concerned, in any country,in relation to:

### (a)                                  any action taken, or omittedor neglected to be taken, under or in connection with any Finance Document bythe Creditor Party concerned or by any receiver appointed under a FinanceDocument;

### (b)                                 any other event, matter orquestion which occurs or arises at any time during the Security Period andwhich has any connection with, or any bearing on, any Finance Document, anypayment or other transaction relating to a Finance Document or any assetcovered (or previously covered) by a Security Interest created (or intended tobe created) by a Finance Document,

other than liability itemswhich are shown to have been caused by the gross negligence or the wilfulmisconduct of the officers or employees of the Creditor Party concerned.

## **22.4****                       ****Extension of indemnities;environmental indemnity.**  Without prejudice to its generality, Clause22.3 covers:

### (a)                                  any matter which would becovered by Clause 21.3 if any of the references in that Clause to a Lender werea reference to the Agent or (as the case may be) to the Security Trustee; and

### (b)                                 any liability items whicharise, or are asserted, under or in connection with any law relating to safetyat sea, pollution or the protection of the environment.

## **22.5****                       ****Currency indemnity.**  If any sum due from the Borrower or any SecurityParty to a Creditor Party under a Finance Document or under any order orjudgment relating to a Finance Document has to be converted from the currencyin which the Finance Document provided for the sum to be paid (the “**Contractual Currency**”) into another currency(the “**PaymentCurrency**”)for the purpose of:

### (a)                                  making or lodging any claimor proof against the Borrower or any Security Party, whether in itsliquidation, any arrangement involving it or otherwise; or

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

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### (c)           enforcingany such order or judgment;

theBorrower shall indemnify the Creditor Party concerned against the loss arisingwhen the amount of the payment actually received by that Creditor Party isconverted at the available rate of exchange into the Contractual Currency.

In thisClause 22.5 the “**available rate of exchange**”means the rate at which the Creditor Party concerned is able at the opening ofbusiness (London time) on the Business Day after it receives the sum concernedto purchase the Contractual Currency with the Payment Currency.

ThisClause 22.5 creates a separate liability of the Borrower which is distinct fromits other liabilities under the Finance Documents and which shall not be mergedin any judgement or order relating to those other liabilities.

## **22.6****       ****Application toMaster Agreement.**  For the avoidance ofdoubt, Clause 22.5 does not apply in respect of sums due from the Borrower tothe Swap Bank under or in connection with the Master Agreement as to which sumsthe provisions of section 8 (Contractual Currency) of the Master Agreementshall apply.

## **22.7****       ****Certificationof amounts.**  A notice which issigned by an officer of a Creditor Party, which states that a specified amount,or aggregate amount, is due to that Creditor Party under this Clause 22 andwhich indicates (without necessarily specifying a detailed breakdown) thematters in respect of which the amount, or aggregate amount, is due shall beprima facie evidence that the amount, or aggregate amount, is due.

## **22.8****       ****Sums deemed dueto a Lender or the Issuing Bank.** For the purposes of this Clause 22, a sum payable by the Borrower to theAgent or the Security Trustee for distribution to a Lender or the Issuing Bankshall be treated as a sum due to that Lender or the Issuing Bank save in the caseof manifest error.

## **22.9****       ****Receiving Bank.**  The Borrower shall indemnify the Agent ondemand against all costs and expenses arising out of the role of the ReceivingBank in relation to the Loan.

# **23****          ****NO SET-OFF OR TAX DEDUCTION**

## **23.1****       ****No deductions.**  All amounts due from the Borrower under aFinance Document shall be paid:

### (a)           withoutany form of set-off, cross-claim or condition; and

### (b)           free andclear of any tax deduction except a tax deduction which the Borrower isrequired by law to make.

## **23.2****       ****Grossing-up fortaxes.**  If the Borrower isrequired by law to make a tax deduction from any payment:

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

### (b)           theBorrower shall pay the tax deducted to the appropriate taxation authoritypromptly, and in any event before any fine or penalty arises;

### (c)           the amountdue in respect of the payment shall be increased by the amount necessary toensure that each Creditor Party receives and retains (free from any liabilityrelating to the tax deduction) a net amount which, after the tax deduction, isequal to the full amount which it would otherwise have received.

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## **23.3****       ****Evidence ofpayment of taxes.**  Within 1 month aftermaking any tax deduction, the Borrower shall deliver to the Agent documentaryevidence satisfactory to the Agent that the tax had been paid to theappropriate taxation authority.

## **23.4****       ****Exclusion oftax on overall net income.**  In this Clause 23 “**tax deduction**” meansany deduction or withholding for or on account of any present or future taxexcept tax on a Creditor Party’s overall net income.

## **23.5****       ****Application tothe Master Agreement.**  For the avoidance ofdoubt, Clause 23 does not apply in respect of sums due from the Borrower to theSwap Bank under or in connection with the Master Agreement as to which sums theprovisions of section 2(d) (Deduction or Withholding for Tax) of the MasterAgreement shall apply.

# **24****          ****ILLEGALITY, ETC**

## **24.1****       ****Illegality.**  This Clause 24 applies if a Lender (the “**NotifyingLender**”) notifies the Agent that it has become, or will witheffect from a specified date, become:

### (a)           unlawfulor prohibited as a result of the introduction of a new law, an amendment to anexisting law or a change in the manner in which an existing law is or will beinterpreted or applied; or

### (b)           contraryto, or inconsistent with, a regulation;

for theNotifying Lender to maintain or give effect to any of its obligations underthis Agreement or any Guarantee in the manner contemplated by this Agreement.

## **24.2****       ****Notification ofillegality.**  The Agent shallpromptly notify the Borrower, the Security Parties, the Security Trustee, theIssuing Bank and the other Lenders of the notice under Clause 24.1 which theAgent receives from the Notifying Lender.

## **24.3****       ****Prepayment;termination of Commitment.**  On the Agentnotifying the Borrower under Clause 24.2:

### (a)           theNotifying Lender’s Commitment shall terminate;

### (b)           if theNotifying Lender is the Issuing Bank, the Borrower shall procure the promptcancellation of the Outstandings and the return of each Guarantee issued to theIssuing Bank endorsed by the relevant Beneficiary to the effect that it iscancelled; and

### (c)           thereuponor, if later, on the date specified in the Notifying Lender’s notice underClause 24.1 as the date on which the notified event would become effective theBorrower shall prepay the Notifying Lender’s Contribution in accordance withClause 9 (other than Clause 9.5).

# **25****          ****INCREASED COSTS**

## **25.1****       ****Increasedcosts.**  This Clause 25applies if a Lender or the Issuing Bank (the “**Notifying Lender**”) notifiesthe Agent that the Notifying Lender considers that as a result of:

### (a)           theintroduction or alteration after the date of this Agreement of a law, or aregulation or an alteration after the date of this Agreement in the manner inwhich a law or regulation is interpreted or applied (disregarding any effectwhich relates to the application to payments under this Agreement of a tax onthe Notifying Lender’s overall net income); or

### (b)           the effectof complying with any law or regulation (including any which relates to capitaladequacy or liquidity controls or which affects the manner in which theNotifying Lender allocates capital resources to its obligations under thisAgreement (including, without

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### limitation,the implementation of any regulations which shall replace, amend and/orsupplement those set out in the statement of the Basle Committee on BankingRegulations and Supervisory Practices dated July 1988 and entitled “InternationalConvergence of Capital Measurement and Capital Structures”) (the “**Basle Accord**”)) whichis introduced, or altered, or the interpretation or application of which isaltered, after the date of this Agreement,

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

#### (i)            an additionalor increased cost incurred as a result of, or in connection with, the NotifyingLender having entered into, or being a party to, this Agreement or a TransferCertificate, of funding or maintaining its Commitment or its Contribution orOutstandings or performing its obligations under this Agreement, or of havingoutstanding all or any part of its Contribution or Outstandings or other unpaidsums;

#### (ii)           areduction in the amount of any payment to the Notifying Lender under thisAgreement or in the effective return which such a payment represents to theNotifying Lender or on its capital;

#### (iii)          anadditional or increased cost of funding or maintaining all or any of theadvances comprised in a class of advances formed by or including the NotifyingLender’s Contribution and/or Outstandings or (as the case may require) theproportion of that cost attributable to the Contribution and/or theOutstandings; or

#### (iv)          aliability to make a payment, or a return foregone, which is calculated byreference to any amounts received or receivable by the Notifying Lender underthis Agreement;

but not anitem attributable to a change in the rate of tax on the overall net income ofthe Notifying Lender (or a parent company of it) or an item covered by theindemnity for tax in Clause 22.1 or by Clause 23.

For thepurposes of this Clause 25.1 the Notifying Lender may in good faith allocate orspread costs and/or losses among its assets and liabilities (or any classthereof) on such basis as it considers appropriate.

In theevent that it appears to the Agent that an increased cost will arise pursuantto this Clause 25.1 as a result of the implementation of the Basle Accord, theAgent shall consult with the Borrower but without prejudice to the obligationsand liabilities of the Borrower under the above provisions of this Clause 25.1.

## **25.2****       ****Notification toBorrower of claim for increased costs.** The Agent shall promptly notify the Borrower and the Security Parties ofthe notice which the Agent received from the Notifying Lender under Clause25.1.

## **25.3****       ****Payment ofincreased costs.**  The Borrower shallpay to the Agent, on the Agent’s demand, for the account of the NotifyingLender the amounts which the Agent from time to time notifies the Borrower thatthe Notifying Lender has specified to be necessary to compensate the NotifyingLender for the increased cost.

## **25.4****       ****Notice ofprepayment.**  If the Borrower isnot willing to continue to compensate the Notifying Lender for the increasedcost under Clause 25.3, the Borrower may give the Agent not less than 3Business Days’ notice of its intention to prepay the Notifying Lender’sContribution and, if the Notifying Lender is the Issuing Bank, to cancel theOutstandings.

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## **25.5****       ****Prepayment;termination of Commitment.**  A notice underClause 25.4 shall be irrevocable; the Agent shall promptly notify the NotifyingLender of the Borrower’s notice of intended prepayment; and:

### (a)           on thedate on which the Agent serves that notice, the Commitment of the NotifyingLender shall be cancelled;

### (b)           if theNotifying Lender is the Issuing Bank, the Borrower shall procure the promptcancellation of the Outstandings and the return of each Guarantee to theIssuing Bank endorsed by the relevant Beneficiary to the effect that it iscancelled; and

### (c)           on thedate specified in its notice of intended prepayment, the Borrower shall prepay(without premium or penalty) the Notifying Lender’s Contribution, together withaccrued interest thereon at the applicable rate plus the aggregate of theMargin and the Mandatory Cost (if any) (but subject to Clause 22.1).

## **25.6****       ****Application ofprepayment.**  Clause 9 shall applyin relation to the prepayment.

# **26****          ****SET-OFF**

## **26.1****       ****Application ofcredit balances.**  Each Creditor Partymay without prior notice but following the occurrence of an Event of Defaultwhich is continuing:

### (a)           apply anybalance (whether or not then due) which at any time stands to the credit of anyaccount in the name of the Borrower at any office in any country of thatCreditor Party in or towards satisfaction of any sum then due from the Borrowerto that Creditor Party under any of the Finance Documents; and

### (b)           for thatpurpose:

#### (i)            break, oralter the maturity of, all or any part of a deposit of the Borrower;

#### (ii)           convert ortranslate all or any part of a deposit or other credit balance into Dollars;and/or

#### (iii)          enter intoany other transaction or make any entry with regard to the credit balance whichthe Creditor Party concerned considers appropriate.

## **26.2****       ****Existing rightsunaffected.**  No Creditor Partyshall be obliged to exercise any of its rights under Clause 26.1; and thoserights 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 aCreditor Party is entitled (whether under the general law or any document).

## **26.3****       ****Sums deemed dueto a Lender.**  For the purposes ofthis Clause 26, a sum payable by the Borrower to the Agent or the SecurityTrustee for distribution to, or for the account of, a Lender shall be treatedas a sum due to that Lender; and each Lender’s proportion of a sum so payablefor distribution to, or for the account of, the Lenders shall be treated as asum due to such Lender.

## **26.4****       ****No SecurityInterest.**  This Clause 26 givesthe Creditor Parties a contractual right of set-off only, and does not createany equitable charge or other Security Interest over any credit balance of theBorrower.

# **27****          ****TRANSFERS AND CHANGES IN LENDING OFFICES**

## **27.1****       ****Transfer byBorrower.** The Borrower may not, without the prior consent of theAgent, given with the authorisation of all the Lenders:

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### (a)           transferany of its rights or obligations under any Finance Document; or

### (b)           enter intoany merger, de-merger or other reorganisation, or carry out any other act, as aresult of which any of its rights or liabilities would vest in, or pass to,another person.

## **27.2****       ****Transfer by aLender.**  Subject to Clause27.4, a Lender (the “**Transferor Lender**”) may atany time, with the prior consent of the Agent but without needing the consentof the Borrower or any Security Party, cause:

### (a)           its rightsin respect of all or part of its Contribution; and

### (b)           an equalproportion of its obligations in respect of all or part of its Commitment,

to be (inthe case of its rights) transferred to, or (in the case of its obligations)assumed by, another bank or financial institution or special purpose vehicleestablished by any Lender (a “**TransfereeLender**”) by delivering to the Agent a completed certificate in theform set out in Schedule 4 with any modifications approved or required by theAgent (a “**Transfer Certificate**”)executed by the Transferor Lender and the Transferee Lender.

Howeverany rights and obligations of the Transferor Lender in its capacity as Agent,the Agent or Security Trustee will have to be dealt with separately in accordancewith the Agency and Trust Agreement.

## **27.3****       ****TransferCertificate, delivery and notification.** As soon as reasonably practicable after a Transfer Certificate isdelivered to the Agent, it shall (unless it has reason to believe that theTransfer Certificate may be defective):

### (a)           sign theTransfer Certificate on behalf of itself, the Agent, the Borrower, the SecurityParties, the Security Trustee and each of the other Lenders;

### (b)           on behalfof the Transferee Lender, send to the Borrower and each Security Party lettersor faxes notifying them of the Transfer Certificate and attaching a copy of it;and

### (c)           send tothe Transferee Lender copies of the letters or faxes sent under paragraph (b).

## **27.4****       ****Effective Dateof Transfer Certificate.**  A Transfer Certificatebecomes effective on the date, if any, specified in the Transfer Certificate asits effective date **Provided that** it issigned by the Agent under Clause 27.3 on or before that date.

## **27.5****       ****No transferwithout Transfer Certificate.** No assignment or transfer of any right or obligation of a Lender underany 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.

## **27.6****       ****Lenderre-organisation; waiver of Transfer Certificate. **If a Lender enters into any merger,de-merger or other reorganisation as a result of which all its rights orobligations vest in a successor, the successor shall automatically and withoutany further act being necessary become a Lender with the same Commitment andContribution as were held by the predecessor Lender.

## **27.7****       ****Effect ofTransfer Certificate.**  A TransferCertificate takes effect in accordance with English law as follows:

### (a)           to theextent specified in the Transfer Certificate, all rights and interests(present, future or contingent) which the Transferor Lender has under or byvirtue of the Finance Documents are assigned to the Transferee Lenderabsolutely;

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### (b)           theTransferor Lender’s Commitment is discharged to the extent specified in theTransfer Certificate;

### (c)           theTransferee Lender becomes a Lender with a Contribution and a Commitment of anamount specified in the Transfer Certificate;

### (d)           theTransferee Lender becomes bound by all the provisions of the Finance Documentswhich are applicable to the Lenders generally, including those about pro-ratasharing and the exclusion of liability on the part of, and the indemnificationof, the Agent and the Security Trustee and, to the extent that the TransfereeLender becomes bound by those provisions (other than those relating toexclusion of liability), the Transferor Lender ceases to be bound by them;

### (e)           any partof the Loan which the Transferee Lender advances after the Transfer Certificate’seffective date ranks in point of priority and security in the same way as itwould have ranked had it been advanced by the Transferor Lender;

### (f)            theTransferee Lender becomes entitled to all the rights under the FinanceDocuments which are applicable to the Lenders generally, including but notlimited to those relating to the Majority Lenders and those under Clause 6.7and Clause 21, and to the extent that the Transferee Lender becomes entitled tosuch rights, the Transferor Lender ceases to be entitled to them; and

### (g)           in respectof any breach of a warranty, undertaking, condition or other provision of aFinance Document or any misrepresentation made in or in connection with aFinance Document, the Transferee Lender shall be entitled to recover damages byreference to the loss incurred by it as a result of the breach ormisrepresentation, irrespective of whether the original Lender would haveincurred a loss of that kind or amount.

The rightsand 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.

## **27.8****       ****Maintenance ofregister of Lenders.**  During the SecurityPeriod the Agent shall maintain a register in which it shall record the name,Commitment, Contribution and administrative details (including the lendingoffice) from time to time of each Lender, the Outstandings from time to timeand the effective date (in accordance with Clause 27.4) of each TransferCertificate; and the Agent shall make the register available for inspection byany Lender, the Security Trustee and the Borrower during normal banking hours,subject to receiving at least 3 Business Days prior notice.

## **27.9****       ****Reliance onregister of Lenders.**  The entries on thatregister shall, in the absence of manifest error, be conclusive in determiningthe identities of the Lenders and the amounts of their Commitments andContributions, the amount of the Outstandings and the effective dates ofTransfer Certificates and may be relied upon by the Agent and the other partiesto the Finance Documents for all purposes relating to the Finance Documents.

## **27.10****     ****Authorisationof Agent to sign Transfer Certificates.** The Borrower, the Security Trustee andeach Lender irrevocably authorises the Agent to sign Transfer Certificates onits behalf.

## **27.11****     ****Registrationfee.**  In respect of anyTransfer Certificate, the Agent shall, following its request and at its option,be entitled to recover a registration fee of $2,500 from the Transferor Lenderor (at the Agent’s option) the Transferee Lender.

## **27.12****     ****Sub-participation;subrogation assignment.**  A Lender may sub-participateall or any part of its rights and/or obligations under or in connection withthe Finance Documents without the consent of, or any notice to, the Borrower, anySecurity Party, the Issuing Bank, the Agent or the Security Trustee; and theLenders may assign, in any manner and

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## termsagreed by the Majority Lenders, the Issuing Bank, the Agent and the SecurityTrustee, all or any part of those rights to an insurer or surety who has becomesubrogated to them.

## **27.13****     ****Disclosure ofinformation.**  A Lender may provideor disclose to an actual or potential Transferee Lender, any proposed or actualassignee or sub-participant or any person who may otherwise enter into (orpropose to enter into) contractual relations with that Lender in connectionwith this Agreement or to any other person as required by any applicable law orregulation, a copy of this Agreement, copies of all information provided by theBorrower or any of the Security Parties under or in connection with eachFinance Document, details of drawings made by the Borrower under this Agreementand information regarding the performance by the Borrower and the SecurityParties of their obligations under this Agreement and the other FinanceDocuments.  Any Creditor Party may,disclose the size and term of the Total Commitments and the Loan and the nameof the Borrower and each of the Security Parties to any investor or a potentialinvestor in a securitisation (or similar transaction of broadly equivalenteconomic effect) of that Creditor Party’s rights or obligations under theFinance Documents (or any of them).

## **27.14****     ****Change oflending office.**  A Lender may changeits lending office and may change its booking office by giving notice to theAgent and the change shall become effective on the later of:

### (a)           the dateon 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 intoeffect.

## **27.15****     ****Notification.**  On receiving such a notice, the Agent shallnotify the Borrower and the Security Trustee; and, until the Agent receivessuch a notice, it shall be entitled to assume that a Lender is acting throughthe lending office or is acting through the booking office of which the Agentlast had notice.

# **28****          ****VARIATIONS AND WAIVERS**

## **28.1****       ****Variations,waivers etc. by Majority Lenders.** Subject to Clause 28.2, a document shall be effective to vary, waive,suspend or limit any provision of a Finance Document, or any Creditor Party’srights or remedies under such a provision or the general law, only if thedocument is signed, or specifically agreed to by fax, by the Borrower, by theAgent on behalf and with the consent of the Majority Lenders, by the IssuingBank, by the Agent and the Security Trustee in their own rights, and, if thedocument relates to a Finance Document to which a Security Party is party, bythat Security Party.

## **28.2****       ****Variations,waivers etc. requiring agreement of all Lenders.**  However, as regards the following, Clause28.1 applies as if the words “by the Agent on behalf and with the consent ofthe Majority Lenders” were replaced by the words “by or on behalf and with theconsent of every Lender, the Swap Bank and the Issuing Bank”:

### (a)           a changein the definition of the Margin, the Mandatory Cost or in the definition ofLIBOR or EURIBOR;

### (b)           a changeto the date for, or the amount of, any payment of principal, interest, fees, orother sum payable under this Agreement;

### (c)           a changeto any Lender’s Commitment;

### (d)           anextension of the Availability Period for any Advance;

### (e)           a changeto the definition of “Majority Lenders” or “Finance Documents”;

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### (f)            a changeto the preamble or to Clause 2, 3, 4, 6.1, 9.1, 12, 13.4, 18, 19, 20, 30, 31,32, 33 or 35;

### (g)           a changeto this Clause 28;

### (h)           anyrelease of, or material variation to, a Security Interest, guarantee, indemnityor subordination arrangement set out in a Finance Document; and

### (i)            any otherchange or matter as regards which this Agreement or another Finance Documentexpressly provides that each Lender’s consent is required.

## **28.3****       ****Exclusion ofother or implied variations.** Except for a document which satisfies the requirements of Clauses 28.1and 28.2, no document, and no act, course of conduct, failure or neglect toact, 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 CreditorParties or any of them (or any person acting on behalf of any of them) beingtaken to have varied, waived, suspended or limited, or being precluded(permanently or temporarily) from enforcing, relying on or exercising:

### (a)           aprovision of this Agreement or another Finance Document; or

### (b)           an Eventof Default; or

### (c)           a breachby the Borrower or a Security Party of an obligation under a Finance Documentor the general law; or

### (d)           any rightor remedy conferred by any Finance Document or by the general law;

and thereshall not be implied into any Finance Document any term or condition requiringany such provision to be enforced, or such right or remedy to be exercised,within a certain or reasonable time.

# **29****          ****NOTICES**

## **29.1****       ****General.**  Unless otherwise specifically provided, anynotice under or in connection with any Finance Document shall be given byletter or fax; and references in the Finance Documents to written notices,notices in writing and notices signed by particular persons shall be construedaccordingly.

## **29.2****       ****Addresses forcommunications.**  A notice shall besent:

| (a)    | to the Borrower:  | c/o the Approved Manager                           |
|--------|-------------------|----------------------------------------------------|
|   |              | Akti Kondyli 14                                    |
|   |              | 185 45 Piraeus                                     |
|   |              | Greece                                             |
|   |              |                                               |
|   |              | Fax No: +30 210 422 0855                           |
|   |              |                                               |
| (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 Agent,     | The Royal Bank of Scotland plc                     |
|   | the Security      | Akti Miaouli 45                                    |
|   | Trustee or        | 185 36 Piraeus                                     |
|   | the Issuing Bank: | Greece                                             |
|   |              | Attn: Shipping Department                          |
|   |              |                                               |
|   |              | Fax No: +30 210 459 6600                           |

 

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or to suchother address as the relevant party may notify the Agent or, if the relevantparty is the Agent or the Security Trustee, the Borrower, the Lenders and theSecurity Parties.

## **29.3****       ****Effective dateof notices.**  Subject to Clauses29.4 and 29.5:

### (a)           a noticewhich is delivered personally or posted shall be deemed to be served, and shalltake effect, at the time when it is delivered;

### (b)           a noticewhich is sent by fax shall be deemed to be served, and shall take effect, 2hours after its transmission is completed.

## **29.4****       ****Service outsidebusiness hours.**  However, if underClause 29.3 a notice would be deemed to be served:

### (a)           on a daywhich is not a business day in the place of receipt; or

### (b)           on such abusiness day, but after 5 p.m. local time;

the noticeshall (subject to Clause 29.5) be deemed to be served, and shall take effect,at 9 a.m. on the next day which is such a business day.

## **29.5****       ****Illegiblenotices.**  Clauses 29.3 and29.4 do not apply if the recipient of a notice notifies the sender within onehour after the time at which the notice would otherwise be deemed to be servedthat the notice has been received in a form which is illegible in a materialrespect.

## **29.6****       ****Valid notices.**  A notice under or in connection with aFinance Document shall not be invalid by reason that the manner of serving itdoes not comply with the requirements of this Agreement or, where appropriate,any other Finance Document under which it is served if the failure to serve itin accordance with the requirements of this Agreement or other FinanceDocument, as the case may be, has not caused any party to suffer anysignificant loss or prejudice.

## **29.7****       ****Englishlanguage.**  Any notice under orin connection with a Finance Document shall be in English.

## **29.8****       ****Meaning of “notice”.**  In this Clause “notice” includes any demand,consent, authorisation, approval, instruction, waiver or other communication.

# **30****          ****REDUCTION OF GUARANTEES**

## **30.1****       ****Reduction ofOutstanding Guarantee Amounts.** The Outstanding Guarantee Amount of a Guarantee shall not be treated asreduced for the purposes of this Agreement unless and until:

### (a)           theIssuing Bank, or the Agent on its behalf, has received a written confirmationfrom the Beneficiary of the amount of such reduction; or

### (b)           theIssuing Bank has notified the Agent in writing that (notwithstanding theabsence of a written confirmation from the Beneficiary) it is satisfied thatits liability under the Guarantee has been irrevocably reduced or discharged;or

### (c)           the amountof the Guarantee irrevocably and unconditionally reduces in accordance with itsterms; or

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### (d)           the expirydate of the Guarantee elapses and the Issuing Bank has notified the Borrower inwriting, through the Agent, that it is satisfied that no claim or demand hasbeen made, or may thereafter be made, under the Guarantee.

# **31****          ****SETTLEMENT OF GUARANTEES**

## **31.1****       ****Notification ofSettlement Amount.**  The Issuing Bankshall, immediately after receiving a demand from, or after being notified by,the Beneficiary that it is required to make payment under a Guarantee, notifythe Agent that such payment is due and of the Settlement Amount and theSettlement Date, and the Agent shall promptly notify the Borrower.

## **31.2****       ****Borrower’ssettlement.**  The Borrower shall:

### (a)           immediatelyafter notification from the Agent under Clause 31.1, acknowledge to the Agentthat it will reimburse the Settlement Amount; and

### (b)           pay to theAgent, for the account of the Issuing Bank, the Settlement Amount in Dollars onthe Settlement Date.

## **31.3****       ****Borrower’sfailure to reimburse.**  If the Borrowerfails to reimburse the Settlement Amount to the Agent, for the account of theIssuing Bank, on the Settlement Date pursuant to Clause 31.2, it shall pay tothe Agent, for the account of the Issuing Bank, interest on the SettlementAmount from the Settlement Date to the date the Issuing Bank is reimbursed bythe Borrower at the rate described in Clause 8 such interest to be compoundedin accordance with Clause 8.6 and payable on demand.

# **32****          ****INDEMNITY OF THE BORROWER**

## **32.1****       ****Borrower’sundertaking to indemnify.**  The Borrower agreesthat it shall:

### (a)           pay to theAgent, for the account of the Issuing Bank, upon demand by the Agent an amountequal to each amount:

#### (i)            demandedfrom or paid by the Issuing Bank under a Guarantee;

#### (ii)           paid bythe Issuing Bank to a Beneficiary under Clause 32.9;

and whichis not otherwise fully reimbursed, paid or repaid by the Borrower under thisAgreement;

### (b)           pay to theAgent, for the account of the Lenders, upon demand by the Agent an amount equalto each amount paid by the Lenders to the Issuing Bank, or the Agent on itsbehalf, pursuant to Clause 33.1;

### (c)           indemnify,as a principal and independent debtor, the Issuing Bank and each of the Lendersseverally on demand against all actions, claims, demands, liabilities, costs,losses, damages and expenses incurred, suffered or sustained or any penalty orother expenditure which may result or which the Issuing Bank or any Lender mayincur, suffer or sustain in connection with or arising out of or in relation toany Guaranteed Obligations and/or the payment under or other performance of aGuarantee or Clause 33.

## **32.2****       ****Payment toLenders.**  The Borrower shallpay to the Agent, for the account of the Lender concerned, upon demand by theAgent an amount equal to each amount paid by a Lender to the Issuing Bank, orthe Agent on its behalf, pursuant to Clause 33 notwithstanding that:

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### (a)           thatamount may not properly be due whether because the corresponding amount was notproperly due to the Beneficiary under a Guarantee or for any other reasonwhatsoever (other than in the case of gross negligence or wilful misconduct ofthe Issuing Bank); or

### (b)           anyGuarantee and/or any Guaranteed Obligations and/or the indemnities contained inClause 33 is or are void or invalid or not binding on or enforceable againstthe Borrower or the Issuing Bank or a Beneficiary (as the case may be) for anyreason whatsoever (other than in the case of gross negligence or wilfulmisconduct of the Issuing Bank) including (without limitation) the effect ofany enactment, any legal limitation, illegality, disability, lack of corporatecapacity or lack of powers of any party thereto or of any of its directors orofficers.

## **32.3****       ****Guaranteepayments.**  The Borrower:

### (a)           irrevocablyauthorises the Issuing Bank to make any payment demanded from it pursuant to aGuarantee if that demand is made in accordance with its terms;

### (b)           acceptsthat any demand for payment made by the Beneficiary pursuant to a Guarantee andwhich is made in accordance with its terms shall be conclusive evidence thatthe Issuing Bank was liable to make payment under the Guarantee and any paymentwhich the Issuing Bank makes pursuant to any such demand shall be accepted bythe Borrower as binding upon the Borrower; and

### (c)           acknowledgesand agrees that the Issuing Bank shall not in any circumstances whatsoever beliable to the Borrower in respect of any loss or damage suffered by theBorrower by reason of the Issuing Bank making a payment to the Beneficiary inconnection with any payment demanded under a Guarantee.

## **32.4****       ****Continuingindemnities.**  The liabilities andobligations of the Borrower under the indemnities set out in Clause 32.1 shallremain in force as a continuing security until:

### (a)           the full,prompt and complete performance of all the terms of such indemnities includingthe proper and valid payment of all amounts that may become due to the IssuingBank and each of the Lenders under this Clause 32.4; and

### (b)           subject toClause 32.5, an absolute discharge or release of the Borrower signed by theIssuing Bank or the Lender concerned,

andaccordingly the Borrower shall not have, as regards those indemnities, any ofthe rights or defences of a surety.

## **32.5****       ****Discharges.**  Any such discharge or release referred to inClause 32.4, and any composition or arrangement which the Borrower may effectwith the Issuing Bank or any Lender shall be deemed to be made subject to thecondition that it will be void if any payment or security which any CreditorParty may previously have received or may thereafter receive is set aside underany applicable law or proves to have been for any reason invalid.

## **32.6****       ****Waiver ofrights and defences.**  Without limiting thegenerality of Clauses 32.4 and 32.5, the Borrower shall neither be dischargedfrom any of its liabilities or obligations under Clause 32.1 by, nor have anyclaim against any Creditor Party in respect of:

### (a)           anymisrepresentation or non-disclosure respecting the affairs or condition of theIssuing Bank or any Lender made to the Borrower by any person; or

### (b)           aBeneficiary and/or any Creditor Party releasing or granting any time or anyindulgence whatsoever or making any settlement, composition or arrangement withthe Borrower, a Beneficiary or any other person; or

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### (c)           aBeneficiary and/or any Creditor Party asserting or pursuing, failing orneglecting to assert or pursue, or delaying in asserting or pursuing, orwaiving, any of their rights or remedies against the Borrower, a Beneficiary orany other person; or

### (d)           aBeneficiary and/or any Creditor Party and/or the Borrower, with the consent ofthe Borrower (or with or without the consent of the Borrower in the case of anyvariation agreed between a Beneficiary and the Borrower or the person whoseobligations are guaranteed thereby), making, whether expressly or by conduct,any variation to any Guaranteed Obligations or a Guarantee; or

### (e)           a Beneficiaryand/or any Creditor Party and/or the Borrower:

#### (i)            taking,accepting, varying, dealing with, enforcing, abstaining from enforcing,surrendering or releasing any security in relation to a Beneficiary or theIssuing Bank or any Lender or the Borrower or any other person in such manneras it or they think fit; or

#### (ii)           claiming,proving for, accepting or transferring any payment in respect of theobligations and liabilities of the Borrower and/or a Beneficiary relative toany Guaranteed Obligations or under this Agreement in any composition by, orwinding up of, the Borrower and/or any third party or abstaining from soclaiming, proving, accepting or transferring; or

### (f)            anyassignment or transfer by a Beneficiary of, or any succession to, any of itsrights relative to any Guaranteed Obligations or a Guarantee.

## **32.7****       ****Provision ofcash collateral security.**  Forthwith upon, orat any time following:

### (a)           theoccurrence of an Event of Default or a Potential Event of Default; or

### (b)           ashortfall in the level of security cover required to be maintained pursuant toClause 16.1;

### (c)           theservice of a notice under paragraph (a)(ii) of Clause 20.2; or

### (d)           theservice of a notice under Clause 24.2 or Clause 25.4,

then in any such circumstances theAgent on behalf of the Issuing Bank and the Lenders shall be entitled (but notobliged) to demand payment by the Borrower of, and the Borrower forthwith uponsuch demand shall pay to the Agent on behalf of the Issuing Bank and theLenders such amount as shall be, the aggregate of:

#### (i)            anySettlement Amount then due from the Borrower to the Issuing Bank pursuant toClause 31.2 and not reimbursed; and

#### (ii)           theOutstandings.

## **32.8****       ****Application ofcash collateral security.**  Subject always tothe overriding provisions of Clause 18, moneys received by the Agent for theaccount of the Issuing Bank and the Lenders pursuant to Clause 32.7 shall beapplied (as between the Borrower on the one hand and the Issuing Bank and theLenders on the other) in the following manner:

### (a)           firstly,in or towards payment of any Settlement Amount then due from the Borrower tothe Lenders pursuant to Clause 31.2 and not reimbursed;

### (b)           secondly,in payment to an account or accounts of the Agent for application from time totime by the Agent (and the Borrower hereby irrevocably authorises the Agent soto apply

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### anysuch moneys) in or towards payment of, or reimbursement to the Issuing Bankfor, any amount which the Issuing Bank shall or may at any time and from timeto time thereafter pay or be or become liable to pay to the Beneficiary underor pursuant to or in connection with a Guarantee; and

### (c)           thirdly,in or towards payment of all other sums which may be owing to the Issuing Bankand each Lender under or in connection with a Guarantee.

## **32.9****       ****Negotiationwith Beneficiaries.**  The Borrower:

### (a)           irrevocablyauthorises the Agent (acting on the instructions of the Majority Lenders) tonegotiate with any Beneficiary at any time after the occurrence of any Event ofDefault or Potential Event of Default with a view to arranging for theprepayment by the Issuing Bank, for the account of the Borrower, of anyGuaranteed Obligations;

### (b)           agreesthat at any time after the occurrence of any Event of Default or PotentialEvent of Default the Issuing Bank shall be entitled (but not, so far as theBorrower is concerned, bound) to pay to any Beneficiary, in such manner andupon such terms as the Issuing Bank and the Beneficiary shall agree, anyGuaranteed Obligations.

# **33****          ****INDEMNITIES OF THE LENDERS**

## **33.1****       ****Lenders’undertakings to indemnify.**  Each Lenderseverally agrees that it shall:

### (a)           indemnify,as a principal and independent debtor, the Issuing Bank on demand in an amountequal to its Current Percentage of any amount payable by the Borrower to or forthe account of the Issuing Bank under Clause 32.1(a) or (c) but unpaid; and

### (b)           pay to theAgent (for the account of the Issuing Bank) interest upon any amounts payableby it pursuant to this Clause 33.1 from the date of demand to the date ofactual payment by it at a rate from time to time determined by the Issuing Bankby reference to the cost of funds of the Issuing Bank from such sources as theIssuing Bank may from time to time determine.

## **33.2****       ****Continuingindemnities.**  The liabilities andobligations of each Lender under the indemnities set out in Clause 33.1 shallremain in force as a continuing security until the full, prompt and completeperformance of all the terms of those indemnities including the proper andvalid payment of all amounts that may become due to the Issuing Bank under thisAgreement and accordingly no Lender shall have, as regards those indemnities,any of the rights or defences of a surety.

## **33.3****       ****Discharges.**  Any discharge or release granted to anyLender in respect of the foregoing indemnities and any composition orarrangement which the Agent or the Security Trustee on behalf of the Lendersmay effect with the Issuing Bank, shall be deemed to be made subject to thecondition that it will be void to the extent that any payment or security whichthe Issuing Bank may previously have received or may thereafter receive is setaside under any applicable law or proves to have been for any reason invalid.

## **33.4****       ****Waiver ofrights and defences.**  Without limiting thegenerality of Clause 33.2, no Lender shall be discharged from any of itsliabilities or obligations under Clause 33.1 by, nor shall any Lender have anyclaim against any other Creditor Party in respect of:

### (a)           theIssuing Bank releasing or granting any time or any indulgence whatsoever ormaking any settlement, composition or arrangement with the Borrower or aBeneficiary or any other person; or

### (b)           aBeneficiary and/or any Creditor Party and/or the Borrower, making, whetherexpressly or by conduct, any variation to any Guaranteed Obligations or aGuarantee; or

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### (c)           aBeneficiary and/or the Issuing Bank and/or the Borrower and/or the Agent and/orthe Security Trustee:

#### (i)            taking,accepting, varying, dealing with, enforcing, abstaining from enforcing,surrendering or releasing any security in relation to a Beneficiary or theIssuing Bank or the Borrower or any other person in such manner as it or theymay think fit; or

#### (ii)           claiming,proving for, accepting or transferring any payment in respect of theobligations and liabilities of the Borrower and/or a Beneficiary relative toany Guaranteed Obligations or under this Agreement in any composition by, orwinding up of, the Borrower and/or any third party or abstaining from soclaiming, proving, accepting or transferring; or

### (d)           anyassignment or transfer by a Beneficiary of, or any succession to, any of itsrights relative to any Guaranteed Obligations or a Guarantee.

## **33.5****       ****Transfer ofbenefit of security on Lender’s failure to pay.**  If any Lender fails to make any payment tothe Agent for account of the Issuing Bank pursuant to Clause 33.1 on the duedate then until such Lender’s failure has been remedied in full the IssuingBank shall be entitled to:

### (a)           thebenefit of such Lender’s share of the Borrower’s indemnity under Clause 32 andthe benefit of all security then existing or thereafter created to secure theobligations of the Borrower under this Agreement to which such Lender wouldhave been entitled had it performed its obligations in full as aforesaid; and

### (b)           suchLender’s rights to commissions and fees in respect of the Guarantee in respectof which it has failed to perform its obligations.

The rightsconferred upon the Issuing Bank by this Clause 33.5 shall be in addition andwithout prejudice to its other rights against such Lender under this Clause 33.

# **34****          ****SUPPLEMENTAL**

## **34.1****       ****Rightscumulative, non-exclusive.**  The rights andremedies which the Finance Documents give to each Creditor Party are:

### (a)           cumulative;

### (b)           may beexercised as often as appears expedient; and

### (c)           shall not,unless a Finance Document explicitly and specifically states so, be taken toexclude or limit any right or remedy conferred by any law.

## **34.2****       ****Severability ofprovisions.**  If any provision ofa Finance Document is or subsequently becomes void, unenforceable or illegal,that shall not affect the validity, enforceability or legality of the otherprovisions of that Finance Document or of the provisions of any other FinanceDocument.

## **34.3****       ****Counterparts.**  A Finance Document may be executed in anynumber of counterparts.

## **34.4****       ****Benefit andbinding effect**.  The terms of thisAgreement shall be binding upon, and shall enure to the benefit of, the partieshereto and their respective (including subsequent) successors and permittedassigns and transferees.

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## **34.5****       ****Third partyrights.**  A person who is nota party to this Agreement has no right under the Contracts (Rights of ThirdParties) Act 1999 to enforce or to enjoy the benefit of any term of thisAgreement.

# **35****          ****LAW AND JURISDICTION**

## **35.1****       ****English law.**  This Agreement shall be governed by, andconstrued in accordance with, English law.

## **35.2****       ****ExclusiveEnglish jurisdiction.**  Subject to Clause35.3, the courts of England shall have exclusive jurisdiction to settle anydisputes which may arise out of or in connection with this Agreement.

## **35.3****       ****Choice of forumfor the exclusive benefit of the Creditor Parties.**  Clause 35.2 is for the exclusive benefit ofthe Creditor Parties, each of which reserves the right:

### (a)           tocommence proceedings in relation to any matter which arises out of or inconnection with this Agreement in the courts of any country other than Englandand which have or claim jurisdiction to that matter; and

### (b)           tocommence such proceedings in the courts of any such country or countriesconcurrently with or in addition to proceedings in England or without commencingproceedings in England.

TheBorrower shall not commence any proceedings in any country other than Englandin relation to a matter which arises out of or in connection with thisAgreement.

## **35.4****       ****Process agent.** TheBorrower irrevocably appoints Danaos Management Consultants at their office forthe time being, presently at 4 Staple Inn, Holborn, London WC1V 7QU, England,to act as its agent to receive and accept on its behalf any process or otherdocument relating to any proceedings in the English courts which are connectedwith this Agreement.

## **35.5****       ****Creditor Partyrights unaffected.**  Nothing in thisClause 35 shall exclude or limit any right which any Creditor Party may have(whether under the law of any country, an international convention orotherwise) with regard to the bringing of proceedings, the service of process,the recognition or enforcement of a judgment or any similar or related matterin any jurisdiction.

## **35.6****       ****Meaning of “proceedings”.**  In this Clause 35, “proceedings” meansproceedings of any kind, including an application for a provisional orprotective measure.

**THIS AGREEMENT** has beenentered into and amended and restated on the dates stated at the beginning ofthis Agreement.

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**SCHEDULE 1**

**LENDERS AND COMMITMENTS**
| Lender and Lending Office                                                          | ** ** | **Tranche A  Commitment  (US Dollars)** | ** ** | **Tranche B  Commitment  (US Dollars)** | ** ** |
|---------------------------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|---------------------------------------------------|------------|
| The Royal Bank of Scotland plc  Akti Miaouli 45  185 36 Piraeus  Greece  Fax No: +30 210 459 6600 |       | 200,000,000                                       |       | 500,000,000                                       |       |

 

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**SCHEDULE 2**

**DRAWDOWN NOTICE / GUARANTEE ISSUE REQUEST**
| To:        | The Royal  Bank of Scotland plc |
|------------|---------------------------------|
|       | Akti  Miaouli 45                |
|       | 185 36  Piraeus                 |
|       | Greece                          |
|       |                            |
| Attention: | Shipping  Department            |

 

2007

**DRAWDOWN NOTICE / GUARANTEE ISSUE REQUEST**

1              We refer to the loanagreement dated 20 February 2007 (the “**LoanAgreement**”) and made between (amongst others) ourselves, asBorrower, the Lenders referred to therein and yourselves as Agent and SecurityTrustee in connection with revolving credit facilities of up to US$700,000,000in aggregate.  Terms defined in the LoanAgreement have their defined meanings when used in this Drawdown Notice.

2              We request to borrow anAdvance under [Tranche A][Tranche B] as follows:

(a)           Amount: US$[  ];

(b)           The Advance shall be drawn in [$] or [Optional Currency];

(c)           The Advance relates to the vessel[s] [·];

(d)           Drawdown Date: [                ]2007;

(e)           Duration of the first Interest Period shall be [ ] months;and

(f)            Payment instructions:[account in the name of [·] and numbered [·] with [·] of [·]]/[ the [Danaos] EarningsAccount [in respect of [·]].

3              [We request the issue of aGuarantee in the form attached as follows:

(a)           Amount of the Guarantee: [·];

(b)           Guarantee Issue Date (“**DrawdownDate**”):  [·];

(c)           Expiry date of the Guarantee: [·];

(d)           Delivery Instructions: [·].]

4              We represent and warrantthat:

(a)           the representations and warranties in Clause 11 of the LoanAgreement and in the other Finance Documents would remain true and notmisleading if repeated on the date of this notice with reference to thecircumstances now existing;

(b)           no Event of Default or Potential Event of Default hasoccurred or will result from [the borrowing of the Advance][the issue of theGuarantee].

4              This notice cannot berevoked without the prior consent of the Majority Lenders.

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5              We authorise you to deductfrom the Advance the amount of all fees payable pursuant to Clause 21.1.
|            | *[Name of signatory]*  | * *   |
|------------|------------------------|------------|
|       |                   |       |
|       |                   |       |
|       | for and on behalf of   |       |
| ** ** | **DANAOS CORPORATION** | ** ** |

 

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**SCHEDULE 3**

**CONDITION PRECEDENT DOCUMENTS**

**PART A**

Thefollowing are the documents referred to in Clause 10.1(a) required before theDrawdown Date of the Advance which will be used in fully refinancing theExisting Indebtedness.

1              A duly executed original ofeach of:

### (a)           this Agreement;

### (b)           the Agency and Trust Deed;

### (c)           the Master Agreement;

### (d)           the Master AgreementAssignment;

### (e)           the Owner Guarantees to beentered into by the Existing Owners;

### (f)            the Mortgages, the Deeds ofCovenant, the General Assignments and the Charterparty Assignments relative tothe Existing Ships;

### (g)           the Danaos ~~Accounts~~AccountCharge; and

### (h)           the Earnings Account Chargesrelative to the Existing Ships unless the Borrower elects that all the Earningsof the Existing Ships shall be paid to the Danaos Earnings Account.

2              Copies of the certificate ofincorporation and constitutional documents of the Borrower and each ExistingOwner.

3              Copies of resolutions of thedirectors of the Borrower and the directors and shareholders of each ExistingOwner authorising the execution of each of the Finance Documents to which theBorrower or that Owner is a party and, in the case of the Borrower, authorisingnamed officers to give the Drawdown Notices and other notices under thisAgreement.

4              The original of any power ofattorney under which any Finance Document is executed on behalf of the Borroweror an Existing Owner.

5              Copies of all consents whichthe Borrower or any Existing Owner requires to enter into, or make any paymentunder, any Finance Document.

6              The originals of anymandates or other documents required in connection with the opening oroperation of the Danaos Earnings Account~~,~~ and each Owner’sEarnings Account relative to an Existing Ship~~and the Cash CollateralAccount~~.

7              Evidence satisfactory to theAgent that each Existing Owner is a direct or indirect wholly-owned subsidiaryof the Borrower.

8              Documentary evidence that:

(a)           each Existing Ship is definitively and permanentlyregistered in the name of its Owner under the flag on which it is registered;

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(b)           each Existing Ship is in the absolute and unencumberedownership of its Owner save as contemplated by the Finance Documents to whichthat Owner is a party;

(c)           each Existing Ship maintains the highest available classwith a classification society which is a member of the IACS as the Agent mayapprove free of all overdue recommendations and conditions of suchclassification society;

(d)           each Mortgage relative to an Existing Ship has been dulyregistered against that Existing Ship as a valid first preferred or (as thecase may be) priority mortgage in accordance with the laws of the flag on whichthat Ship is registered; and

(e)           each Existing Ship is insured in accordance with the provisionsof this Agreement and all requirements therein in respect of such insuranceshave been complied with.

9              A copy of the ManagementAgreement and a duly executed original of the Manager’s Undertaking in relationto each Existing Ship.

10            Copies of:

(a)           the document of compliance (DOC) and safety managementcertificate (SMC) referred to in paragraph (a) of the definition of the ISMCode Documentation in respect of each Existing Ship and the Approved Managercertified as true and in effect by the Owner of such Existing Ship; and

(b)           the ISPS Code Documentation in respect of each ExistingShip and the Owner thereof certified as true and in effect by that Owner.

11            Two valuations (at the costof the Borrower) of each Existing Ship addressed to the Agent, stated to be forthe purpose of this Agreement and dated not earlier than 6 weeks before theDrawdown Date for the first Advance, each from an Approved Broker (suchvaluations to be made in accordance with Clause 16.4 or, as the case may be,Clause 16.5).

12            Evidence of the lightweightof each Existing Vessel.

13            All documentation requiredby each Creditor Party in relation to the Borrower and any Security Partypursuant to that Creditor Party’s “know your customer” requirements.

14            In relation to each ExistingShip, a letter from the Owner of the Ship to the protection and indemnityassociation in which the Ship is or is to be entered instructing it to providethe Security Trustee with a copy of the certificate of entry of the Ship andany other information relating to the entry of the Ship in such protection andindemnity association.

15            A written confirmation fromthe Borrower as to which individuals are authorised to give verbal and/orwritten instructions to the Agent on behalf of the Borrower in respect of theselection of any Interest Period pursuant to Clause 7.2.

~~15~~16       Such documents and evidence as any Creditor Party shallrequire in relation to the Borrower or any Security Party, based on applicablelaw and regulations and that Creditor Party’s own internal guidelines, relatingto that Creditor Party’s knowledge of its customers.

~~16~~17       Documentary evidence of the Existing Indebtedness whichwill be refinanced by the Advance(s).

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~~17~~18       In relation to each Advance to be made, notification by theAgent of the reduction amounts, term and amortisation/reduction profile toapply to that Advance for the purposes of Clause 9.1 and an acknowledgement bythe Borrower of such amounts and dates.

~~18~~19       Documentary evidence that the agent for service of processnamed in Clause 35 has accepted its appointment.

~~19~~20       Favourable legal opinions from lawyers appointed by theAgent on such matters concerning the laws of the Marshall Islands, Liberia, Panama,Greece, Cyprus, Bahamas, Belgium and such other relevant jurisdictions as theAgent may require.

~~20~~21       A favourable opinion from an independent insuranceconsultant acceptable to the Agent on such matters relating to the insurancesof the Existing Ships as the Agent may require.

~~21~~22       If the Agent so requires, in respect of any of thedocuments referred to above, a certified English translation prepared by atranslator approved by the Agent.

**PART B**

The following are the documents referred to in Clause 10.1(b)required before the Drawdown Date of each Advance which shall be used inpart-financing an Approved Ship (other than in the case of a Pre-DeliveryAdvance to which Part C below applies instead).

In Part B of Schedule 3, the following definitions shallhave the following meanings:

(a)              “**Relevant Advance**” means the Advance which shall be used topart-finance the acquisition of the Approved Ship;

(b)             “**Relevant Owner**” means the Approved Guarantor which is theowner or (as the case may be) buyer of the Relevant Ship; and

(c)              “**Relevant Ship**” means the Approved Ship which is to be financedby the Relevant Advance.

1              Copies of resolutions of theshareholders and directors of the Relevant Owner and the Borrower authorisingthe execution of each of the Finance Documents to which the Relevant Owner is aparty and, in the case of the Borrower, approving the borrowing of the RelevantAdvance and authorising named directors or attorneys to give the DrawdownNotices and other notices under this Agreement and, in the case of the RelevantOwner, ratifying the execution of the Approved Purchase Contract to which it isa party.

2              The original of any power ofattorney under which any Finance Document is executed on behalf of the RelevantOwner.

3              Copies of all consents whichthe Relevant Owner or the Borrower requires to enter into, or make any paymentunder, any Finance Document or the Approved Purchase Contract.

4              The written confirmation ofthe Agent that the Relevant Ship has been approved by the Lenders as anApproved Ship for the purposes of this Agreement pursuant to Clause 4.8.

5              Copies of the ApprovedPurchase Contract in respect of the Relevant Ship and of all documents issuedby the Relevant Owner and the relevant Approved Seller under or in connectiontherewith.

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6              A duly executed original ofthe Owner Guarantee of the Relevant Owner and of the Mortgage, the GeneralAssignment, the relevant Earnings Account Charge (only if the Earnings of theRelevant Ship are not to be paid to the Danaos Earnings Account) and, if requiredby the relevant Approved Flag State, the Deed of Covenant, relative to theRelevant Ship and of each document to be delivered pursuant to each suchFinance Document.

7              If applicable, a dulyexecuted original of the Charterparty Assignment and the Bareboat CharterSecurity Agreement in respect of the Relevant Ship and of each document to bedelivered pursuant to each such Finance Document.

8              Evidence satisfactory to theAgent that the Relevant Owner is a direct or indirect wholly-owned subsidiaryof the Borrower.

9              Documentary evidence that:

(a)           in the case of a financing of the purchase of the RelevantShip, the Relevant Ship has been unconditionally delivered by the ApprovedSeller thereof to, and accepted by, the Relevant Owner under the Approved PurchaseContract, and the full purchase price payable under the Approved PurchaseContract (in addition to the part of the purchase price to be financed by theRelevant Advance) has been duly paid;

(b)           the Relevant Ship is registered in the ownership of theRelevant Owner under an Approved Flag;

(c)           the Relevant Ship is in the absolute and unencumberedownership of the Relevant Owner save as contemplated by the Finance Documents;

(d)           the Relevant Ship maintains the highest available classwith a classification society which is a member of the IACS as the Agent mayapprove free of all overdue recommendations and conditions of suchclassification society;

(e)           the Mortgage relating to the Relevant Ship has been dulyregistered or recorded against the Relevant Ship as a valid first priority shipmortgage in accordance with the laws of the relevant Approved Flag State; and

(f)            the Relevant Ship is insuredin accordance with the provisions of this Agreement and all requirementstherein in respect of insurances have been complied with.

10            A copy of the ManagementAgreement and duly executed original of the Manager’s Undertaking in relationto the Relevant Ship.

11            Copies of:

(a)           the document of compliance (DOC) and safety management certificate(SMC) referred to in paragraph (a) of the definition of the ISM CodeDocumentation in respect of the Relevant Ship and the Approved Managercertified as true and in effect by the Relevant Owner; and

(b)           the ISPS Code Documentation in respect of the Relevant Shipand the Relevant Owner certified as true and in effect by the Relevant Owner.

12            In the case of a financingof the purchase of the Relevant Ship, such documentary evidence as the Agentand its legal advisers may require in relation to the due authorisation andexecution by the relevant Approved Seller of the Approved Purchase Contract andof all documents to be executed by such Approved Seller under the ApprovedPurchase Contract.

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13            Two valuations (at the costof the Borrowers) of the Relevant Ship, addressed to the Agent, stated to befor the purposes of this Agreement and dated not earlier than 6 weeks beforethe Drawdown Date relative to the Relevant Advance, each from an ApprovedBroker (such valuations to be made in accordance with Clause 16.4 or, as thecase may be, Clause 16.5).

14            If required by the Lenders,a satisfactory (in the absolute opinion of the Lenders) survey report (at thecost of the Borrower) in respect of the Relevant Ship, addressed to the Agent,stated to be for the purposes of this Agreement and dated not earlier than 6weeks before the Drawdown Date relative to the Relevant Advance, from anindependent marine surveyor selected by the Lenders who shall have conducted aphysical inspection of the Relevant Ship.

15            The originals of anydocuments required in connection with the opening of the Owner’s EarningsAccount in respect of the Relevant Ship (only if the Earnings of the RelevantShip are not to be paid to the Danaos Earnings Account).

16            Confirmation that theconditions (if any) required by the Lenders and referred to in the proviso tothe definition of “Finance Level” have been satisfied.

17            Notification by the Agent ofthe reduction amounts, term and amortisation/reduction profile to apply to theRelevant Advance for the purposes of Clause 9.1 and an acknowledgement by theBorrower of such amounts and dates.

18            At the cost of the Borrower,a favourable opinion from an independent insurance consultant acceptable to theLenders on such matters relating to the insurances for the Relevant Ship as theAgent may require.

19            Documentary evidence thatthe agent for service of process named in the Owner Guarantee of the RelevantOwner has accepted its appointment.

20            Favourable legal opinionsfrom lawyers appointed by the Lender on such matters concerning the laws of theApproved Flag State, the jurisdiction of incorporation of the ApprovedGuarantor and such other relevant jurisdictions as the Agent may require.

21            If the Agent so requires, inrespect of any of the documents referred to above, a certified Englishtranslation prepared by a translator approved by the Agent.

**PART C**

The following are the documents referred to in Clause10.1(c) required before the Drawdown Date of each Pre-Advance which shall beused in part-financing the payment of a pre-delivery instalment for an ApprovedShip under a shipbuilding contract which is an Approved Purchase Contract.

In Part C of Schedule 3, the following definitions shallhave the following meanings:

(a)              “**Relevant Advance**” means the Pre-Delivery Advance which shallbe used to part-finance the payment of the relevant pre-delivery instalment ofthe Approved Ship;

(b)             “**Relevant Instalment**” means the instalment of the purchase price under the Approved PurchaseContract which is to be part-financed by the Relevant Advance;

(c)              “**Relevant Owner**” means the Approved Guarantor which is thebuyer of the Relevant Ship; and

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(d)             “**Relevant Ship**” means the Approved Ship which is to be financedby the Relevant Advance.

1              Copies of resolutions of theshareholders and directors of the Relevant Owner and the Borrower authorisingthe execution of each of the Finance Documents to which the Relevant Owner is aparty and, in the case of the Borrower, approving the borrowing of the RelevantAdvance and authorising named directors or attorneys to give the DrawdownNotices and other notices under this Agreement and, in the case of the RelevantOwner, ratifying the execution of the Approved Purchase Contract to which it isa party.

2              The original of any power ofattorney under which any Finance Document is executed on behalf of the RelevantOwner.

3              Copies of all consents whichthe Relevant Owner or the Borrower requires to enter into, or make any paymentunder, any Finance Document or the Approved Purchase Contract.

4              The written confirmation ofthe Agent that the Relevant Ship has been approved by the Lenders as anApproved Ship for the purposes of this Agreement pursuant to Clause 4.8.

5              Copies of the ApprovedPurchase Contract in respect of the Relevant Ship and of all documents issuedby the Relevant Owner and the relevant Approved Seller under or in connectiontherewith.

6              The original of the RefundGuarantee in respect of the Relevant Instalment.

7              A duly executed original ofthe Owner Guarantee of the Relevant Owner and of the Pre-Delivery SecurityAssignment relative to the Relevant Ship and of each document to be deliveredpursuant to each such Finance Document.

8              Evidence satisfactory to theAgent that the Relevant Owner is a direct or indirect wholly-owned subsidiaryof the Borrower.

9              Such documentary evidence asthe Agent and its legal advisers may require in relation to the dueauthorisation and execution by the relevant Approved Seller of the ApprovedPurchase Contract and of all documents to be executed by such Approved Sellerunder the Approved Purchase Contract.

10            A duly issued invoice from theApproved Seller showing the amount due and payable to the Approved Sellerpursuant to the Approved Purchase Contract in respect of the RelevantInstalment together with evidence that all amounts payable thereunder (inaddition to the part to be paid by the requested Pre-Delivery Advance) havebeen duly paid.

11            Documentary evidence that theconstruction of the Approved Ship has reached the stage required (if any) forpayment of the Relevant Instalment under the Approved Purchase Contract.

12            Written confirmation from theRelevant Owner to the Agent that the Relevant Owner has irrevocably acceptedand approved the building works (if any) which have been completed on theApproved Ship up to the stage of construction referred to in the previousparagraph.

13            Stage certificates issued by suchclassification society as the Agent may approve in a form acceptable to theAgent, confirming that the building works (if any) carried out up to and includingthe stage of construction referred above of the Approved Ship have beencompleted to the satisfaction of such classification society.

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14            Confirmation that theconditions (if any) required by the Lenders and referred to in the proviso tothe definition of “Finance Level” have been satisfied.

15            Documentary evidence thatthe agent for service of process named in the Owner Guarantee of the RelevantOwner has accepted its appointment.

16            Favourable legal opinionsfrom lawyers appointed by the Lender on such matters concerning the laws of thejurisdiction of incorporation of each of the Approved Guarantor, the ApprovedSeller and the Refund Guarantor and such other relevant jurisdictions as theAgent may require.

17            If the Agent so requires, inrespect of any of the documents referred to above, a certified Englishtranslation prepared by a translator approved by the Agent.

Every copy document delivered under this Schedule shall becertified as a true and up to date copy by a director or the secretary of the Borrower.

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**SCHEDULE 4TRANSFER CERTIFICATE**

**The Transferor and the Transferee acceptexclusive responsibility for ensuring that this Certificate and the transactionto which it relates comply with all legal and regulatory requirementsapplicable to them respectively.**

To:          **THE ROYALBANK OF SCOTLAND PLC**for itself and for and on behalf of the Borrower, each Security Party, theSecurity Trustee, and each Lender, as defined in the Loan Agreement referred tobelow.

[·] 200[·]

1              This Certificate relates toa Loan Agreement dated [·] 2007 (as amended and/orsupplemented from time to time, the “**Agreement**”)and made between (1) Danaos Corporation (the “**Borrower**”),(2) certain banks and financial institutions as lenders (together in suchcapacity, the “**Lenders**”), (3) TheRoyal Bank of Scotland plc as swap bank (in such capacity, the “**Swap Bank**”), (4) The Royal Bank of Scotlandplc as issuing bank (in such capacity, the “**IssuingBank**”) and (5) The Royal Bank of Scotland plc as agent (in suchcapacity, the “**Agent**”) and assecurity trustee (in such capacity, the “**SecurityTrustee**”) for revolving credit facilities of up to $700,000,000 inaggregate.

2              In this Certificate, termsdefined in the Agreement shall, unless the contrary intention appears, have thesame meanings when used in this Certificate and in addition:

“**Relevant Parties**” means the Agent, the Borrower, each SecurityParty, the Security Trustee, each Lender, the Swap Bank and the Issuing Bank;

“**Transferor**” means [*fullname*] of [*lending office*];and

“**Transferee**” means [*fullname*] of [*lending office*].

3              The effective date of thisCertificate is [·] **Provided that** this Certificate shall not come into effectunless it is signed by the Agent on or before that date.

4              The Transferor assigns tothe Transferee absolutely and without recourse all rights and interests(present, future or contingent) which the Transferor has as Lender under or byvirtue of the Agreement and every other Finance Document in relation to [·] per cent. of itsContribution, which amounts to $[·].

5              By virtue of thisCertificate and Clause 27 of the Agreement, the Transferor is discharged[entirely from its Commitment which amounts to $[·]][from [·] per cent. of itsCommitment which percentage represents $[·]].

6              The Transferee undertakeswith the Transferor and each of the Relevant Parties that the Transferee willobserve and perform all the obligations under the Finance Documents whichClause 27 of the Agreement provides will become binding on it upon thisCertificate taking effect.

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7              The Agent, at the request ofthe Transferee (which request is hereby made) accepts, for the Agent itself andfor and on behalf of every other Relevant Party, this Certificate as a TransferCertificate taking effect in accordance with Clause 27 of the Agreement.

8              The Transferor:

(a)           warrants to the Transferee and each Relevant Party:

(i)            that the Transferor has fullcapacity to enter into this transaction and has taken all corporate action andobtained all consents which it needs in connection with this transaction; and

(ii)           that this Certificate is valid and binding as regards theTransferor;

(b)           warrants to the Transferee that the Transferor isabsolutely entitled, free of encumbrances, to all the rights and interestscovered by the assignment in paragraph 4 above; and

(c)           undertakes with the Transferee that the Transferor will, atits own expense, execute any documents which the Transferee reasonably requestsfor perfecting in any relevant jurisdiction the Transferee’s title under thisCertificate or for a similar purpose.

9              The Transferee:

(a)           confirms that it has received a copy of the Agreement andof each other Finance Document;

(b)           agrees that it will have no rights of recourse on anyground against either the Transferor, the Agent, the Security Trustee, anyLender, the Issuing Bank or the Swap Bank in the event that:

(i)            any Finance Document provesto be invalid or ineffective;

(ii)           the Borrower or any Security Party fails to observe orperform its obligations, or to discharge its liabilities, under any FinanceDocument; or

(iii)          it proves impossible to realise any asset covered by aSecurity Interest created by a Finance Document or the proceeds of such assetsare insufficient to discharge the liabilities of the Borrower or any SecurityParty under the Finance Documents;

(c)           agrees that it will have no rights of recourse on anyground against the Agent, the Security Trustee, any Lender, the Issuing Bank orthe Swap Bank in the event that this Certificate proves to be invalid orineffective;

(d)           warrants to the Transferor and each Relevant Party:

(i)            that it has full capacity toenter into this transaction and has taken all corporate action and obtained allconsents which it needs to take or obtain in connection with this transaction;and

(ii)           that this Certificate is valid and binding as regards theTransferee; and

(e)           confirms the accuracy of the administrative details set outbelow regarding the Transferee.

10            The Transferor and theTransferee each undertake with the Agent and the Security Trustee severally, ondemand, fully to indemnify the Agent and/or the Security Trustee in 

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respect ofany claim, proceeding, liability or expense (including all legal expenses)which they or either of them may incur in connection with this Certificate orany matter arising out of it, except such as are shown to have been mainly anddirectly caused by the gross and culpable negligence or dishonesty of the Agent’sor the Security Trustee’s own officers or employees.

11            The Transferee shall repayto the Transferor on demand so much of any sum paid by the Transferor underparagraph 10 above as exceeds one-half of the amount demanded by the Agent orthe Security Trustee in respect of a claim, proceeding, liability or expensewhich was not reasonably foreseeable at the date of this Certificate; butnothing in this paragraph shall affect the liability of each of the Transferorand the Transferee to the Agent or the Security Trustee for the full amountdemanded by it.

12            This Certificate shall begoverned by, and construed in accordance with, English law.
| *[Name of Transferor]* | *[Name of  Transferee]* |
|------------------------|-------------------------|
|                   |                    |
| By:                    | By:                     |
|                   |                    |
| Date:                  | Date:                   |

 

**Agent**

Signed for itself and forand on behalf of itself

as Agent and for every other Relevant Party

**THE ROYAL BANK OF SCOTLAND PLC**

By:

Date:

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**Administrative Details of Transferee**

Name of Transferee:

Lending Office:

Contact Person

(Loan Administration Department):

Telephone:

Fax:

Contact Person

(Credit Administration Department):

Telephone:

Fax:

Account for payments:

**NOTE**:                  THIS TRANSFER CERTIFICATE ALONEMAY NOT BE SUFFICIENT TO TRANSFER A PROPORTIONATE SHARE OF THE TRANSFEROR’SINTEREST IN THE SECURITY CONSTITUTED BY THE FINANCE DOCUMENTS IN THETRANSFEROR’S OR TRANSFEREE’S JURISDICTION OR IN THE JURISDICTION OF THE LAWWHICH GOVERNS A PARTICULAR SECURITY INTEREST. IT IS THE RESPONSIBILITY OF EACH LENDER TO ASCERTAIN WHETHER ANY OTHERDOCUMENTS ARE REQUIRED FOR THIS PURPOSE.

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**SCHEDULE 5DESIGNATION NOTICE**
| To:    | The Royal  Bank of Scotland plc |
|--------|---------------------------------|
|   | Akti Miaouli 45                 |
|   | 185 36 Piraeus                  |
|   | Greece                          |

 

[·] 2007

DearSirs

**Loan agreement dated 20 February 2007 (as amended and/orsupplemented from time to time, the “Loan Agreement”) made between (inter alia)(i) ourselves as Borrower, (ii) the Lenders, (iii) yourselves as Agent andSecurity Trustee and (iv) The Royal Bank of Scotland plc as Swap Bank inrespect of revolving credit facilities of up to US$700,000,000 in aggregate**

Werefer to:

1              the Loan Agreement;

2              the Master Agreement datedas of February 2007 made between ourselves and The Royal Bank of Scotland plc;and

3              a Confirmation deliveredpursuant to the said Master Agreement dated February 2007 and addressed by TheRoyal Bank of Scotland plc to us.

Inaccordance with the terms of the Loan Agreement, we hereby give you notice ofthe said Confirmation and hereby confirm that the Transaction evidenced by itwill be designated as a “Designated Transaction” for the purposes of the LoanAgreement and the Finance Documents.
| Yours faithfully       |
|------------------------|
|                   |
|                   |   |
|                   |
| for and on behalf of   |
| **DANAOS CORPORATION** |

** **

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**SCHEDULE 6FORM OF COMPLIANCE CERTIFICATE**
| To:    | The Royal  Bank of Scotland plc |
|--------|---------------------------------|
|   | Akti Miaouli 45                 |
|   | 185 36 Piraeus                  |
|   | Greece                          |

 

2007

Dear Sirs,

We refer to a loan agreement 20 February 2007 (as amendedand/or supplemented from time to time, the “**LoanAgreement**”) made between (amongst others) yourselves and ourselvesin relation to revolving credit and term facilities of up to $700,00000 inaggregate.

Words and expressions defined in the Loan Agreement shallhave the same meaning when used in this compliance certificate.

We enclose with this certificate a copy of the[audited]/[unaudited] consolidated accounts for the Borrower’s Group for the[Financial Year] [6-month period] ended [·].  The accounts (i) have been prepared inaccordance with all applicable laws and USGAAP all consistently applied, (ii)give a true and fair view of the state of affairs of the Borrower’s Group atthe date of the accounts and of its profit for the period to which the accountsrelate and (iii) fully disclose or provide for all significant liabilities ofthe Borrower’s Group.

We also enclose copies of the valuations of all the FleetVessels which were used in calculating the Market Value Adjusted Total Assetsof the Borrower’s Group as at [·].

The Borrower represents that no Event of Default orPotential Event of Default has occurred as at the date of this certificate[except for the following matter or event [*setout all material details of matter or event*]].  In addition as of [·], the Borrower confirmscompliance with the financial covenants set out in Clause 13.4 of the LoanAgreement for the [12][6] months ending as of the date to which the enclosedaccounts are prepared.

We now certify that, as at [·]:

(a)           the ratio of Total Liabilities (after deducting all Cashand Cash Equivalents) to Market Value Adjusted Total Assets (after deductingall Cash and Cash Equivalents) is [·]:[·];

(b)           the aggregate of all Cash and Cash Equivalents is $[·];

(c)           the Interest Coverage Ratio is [·]:[·]; and

(d)           the Market Value Adjusted Net Worth is $[·].

This certificate shall be governed by, and construed inaccordance with, English law.
|                                |   |
|--------------------------------|--------|
| [·]                       |
| **Chief Financial Officer of** |
| **Danaos Corporation**         |

 

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**SCHEDULE 7MANDATORY COST FORMULA**

1              The Mandatory Cost is anaddition to the interest rate to compensate Lenders for the cost of compliancewith (a) the requirements of the Financial Services Authority (or any otherauthority which replaces all or any of its functions) or (b) the requirementsof the European Central Bank.

2              On the first day of eachInterest Period (or as soon as possible thereafter) the Agent shall calculate,as a percentage rate, a rate (the**“AdditionalCost Rate”**) for each Lender, in accordance with the paragraphs setout below.  The Mandatory Cost will becalculated by the Agent as a weighted average of the Lenders’ Additional CostRates (weighted in proportion to the percentage participation of each Lender inthe relevant Advance) and will be expressed as a percentage rate per annum.

3              The Additional Cost Rate forany Lender lending from a lending office in a Participating Member State willbe the percentage notified by that Lender to the Agent.  This percentage will be certified by thatLender in its notice to the Agent to be its reasonable determination of thecost (expressed as a percentage of that Lender’s participation in all Advancesmade from that lending office) of complying with the minimum reserverequirements of the European Central Bank in respect of loans made from thatlending office.

4              The Additional Cost Rate forany Lender lending from a lending office in the United Kingdom will becalculated by the Agent as follows:
|        | *E x* 0.01 |   |                |
|--------|------------|--------|---------------------|
|   | 300        |   | per cent. per annum |

 

where:

E              isdesigned to compensate Lenders for amounts payable under the Fees Rules and iscalculated by the Agent as being the average of the most recent rates of chargesupplied by the Lenders to the Agent pursuant to paragraph 6 below andexpressed in pounds per £1,000,000.

5              For the purposes of thisSchedule:

### (a)           ~~(a)_~~~~        ~~“**Eligible Liabilities**” and “**Special Deposits**” have the meanings given tothem from time to time under or pursuant to the Bank of England Act 1998 or (asmay be appropriate) by the Bank of England;

(b)           “**Fees Rules**”  means the rules on periodic fees contained inthe FSA Supervision Manual or such other law or regulation as may be in forcefrom time to time in respect of the payment of fees for the acceptance ofdeposits;

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

(d)           “**Participating Member State**”  means any member state of the European Unionthat adopts or has adopted the euro as its lawful currency in accordance withlegislation of the European Union relating to European Monetary Union; and

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(e)           “**Tariff Base**”  has the meaning given to it in, and will becalculated in accordance with, the Fees Rules.

6              If requested by the Agent,each Lender shall, as soon as practicable after publication by the FinancialServices Authority, supply to the Agent, the rate of charge payable by thatLender to the Financial Services Authority pursuant to the Fees Rules inrespect of the relevant financial year of the Financial Services Authority(calculated for this purpose by that Lender as being the average of the FeeTariffs applicable to that Lender for that financial year) and expressed inpounds per £1,000,000 of the Tariff Base of that Lender.

7              Each Lender shall supply anyinformation required by the Agent for the purpose of calculating its AdditionalCost Rate.  In particular, but withoutlimitation, each Lender shall supply the following information in writing on orprior to the date on which it becomes a Lender:

(a)           the jurisdiction of its lending office; and

(b)           any other information that the Agent may reasonably requirefor such purpose.

Each Lender shall promptlynotify the Agent in writing of any change to the information provided by itpursuant to this paragraph.

8              The rates of charge of eachLender for the purpose of E above shall be determined by the Agent based uponthe information supplied to it pursuant to paragraph 6 above and on theassumption that, unless a Lender notifies the Agent to the contrary, eachLender’s obligations in relation to cash ratio deposits and special Depositsare the same as those of a typical bank from its jurisdiction of incorporationwith a lending office in the same jurisdiction as its lending office.

9              The Agent shall have noliability to any person if such determination results in an Additional CostRate which over or under compensates any Lender and shall be entitled to assumethat the information provided by any Lender pursuant to paragraphs 3, 6 and 7above is true and correct in all respects.

10            The Agent shall distributethe additional amounts received as a result of the Mandatory Cost to theLenders on the basis of the Additional Cost Rate for each Lender based on theinformation provided by each Lender pursuant to paragraphs 3, 6 and 7 above.

11            Any determination by theAgent pursuant to this Schedule in relation to a formula, the Mandatory Cost,an Additional Cost Rate or any amount payable to a Lender shall, in the absenceof manifest error, be conclusive and binding on all parties.

12            The Agent may from time totime, after consultation with the Borrowers and the Lenders, determine andnotify to all parties any amendments which are required to be made to thisSchedule in order to comply with any change in law, regulation or anyrequirements from time to time imposed by the Financial Services Authority orthe European Central Bank (or, in any case, any other authority which replacesall or any of its functions) and any such determination shall, in the absenceof manifest error, be conclusive and binding on all parties.

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**EXECUTION PAGE**

**BORROWER**
| **SIGNED** by John Coustas        | )                                          |
|----------------------------------------|--------------------------------------------|
| for and on behalf of                   | )   /s/ John Coustas        |
| **DANAOS CORPORATION**                 | )                                          |
| ** **                             |                                       |
| ** **                             |                                       |
| **LENDERS**                            |                                       |
| ** **                             |                                       |
| **SIGNED** by Alexios Rodopoulos  | )                                          |
| for and on behalf of                   | )   /s/  Alexios Rodopoulos |
| **THE ROYAL BANK**                     | )                                          |
| **OF SCOTLAND PLC**                    | )                                          |
| ** **                             |                                       |
| ** **                             |                                       |
| **SWAP BANK**                          |                                       |
| ** **                             |                                       |
| **SIGNED** by Alexios  Rodopoulos | )                                          |
| for and on behalf of                   | )   /s/  Alexios Rodopoulos |
| **THE ROYAL BANK**                     | )                                          |
| **OF SCOTLAND PLC**                    | )                                          |
| ** **                             |                                       |
| ** **                             |                                       |
| **ISSUING BANK**                       |                                       |
| ** **                             |                                       |
| **SIGNED** by Alexios  Rodopoulos | )                                          |
| for and on behalf of                   | )   /s/  Alexios Rodopoulos |
| **THE ROYAL BANK**                     | )                                          |
| **OF SCOTLAND PLC**                    | )                                          |
| ** **                             |                                       |
| ** **                             |                                       |
| **AGENT AND SECURITY TRUSTEE**         |                                       |
| ** **                             |                                       |
| **SIGNED** by Alexios  Rodopoulos | )                                          |
| for and on behalf of                   | )   /s/  Alexios Rodopoulos |
| **THE ROYAL BANK**                     | )                                          |
| **OF SCOTLAND PLC**                    | )                                          |

 

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| **Witness to  the above**          | )               |
|------------------------------------|-----------------|
| **signatures:**                    | )               |
| ** **                         |            |
| Name: Alexia  Matzmichalis    | /s/ illeligible |
| ** **                         |            |
| Address: 2 Defteras Merachias |            |
| Piraeus 185 36 Greece              |            |

 

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