Exhibit 10.10 


	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Dated: 7th December, 2007

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 ALPHA BANK A.E.

 	
  

 
	
  

 	
 (as Bank)

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 - and -

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 KELSEN SHIPPING CO. and

 	
  

 
	
  

 	
 MONTES SHIPPING CO.

 	
  

 
	
  

 	
 (as joint and several Borrowers)

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 - and -

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 COSTAMARE SHIPPING COMPANY S.A.

 	
  

 
	
  

 	
 (as Corporate Guarantor)

 	
  

 









LOAN AGREEMENT

for a secured floating interest rate

loan facility of up to US$150,000,000










	
  

 	
  

 	
  

 
	
  

 	
 THEO V. SIOUFAS LAW OFFICES

 	
  

 
	
  

 	
 13,
 Defteras Merarchias

 	
  

 
	
  

 	
 185
 35 Piraeus

 	
  

 
	
  

 	
 Greece

 	
  

 












TABLE OF CONTENTS


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 CLAUSE

 	
  

 	
 HEADINGS

 	
  

 	
 PAGE

 
	

 


 	
  

 	

 


 	
  

 	

 


 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
  

 	
 AMOUNT,
 PURPOSE, DEFINITIONS AND INTERPRETATION

 	
  

 	
 2

 
	
  

 	
 2.

 	
  

 	
 THE LOAN

 	
  

 	
 14

 
	
  

 	
 3.

 	
  

 	
 INTEREST

 	
  

 	
 17

 
	
  

 	
 4.

 	
  

 	
 REPAYMENT -
 PREPAYMENT

 	
  

 	
 20

 
	
  

 	
 5.

 	
  

 	
 PAYMENTS,
 TAXES AND COMPUTATION

 	
  

 	
 24

 
	
  

 	
 6.

 	
  

 	
 REPRESENTATIONS
 AND WARRANTIES

 	
  

 	
 26

 
	
  

 	
 7.

 	
  

 	
 CONDITIONS
 PRECEDENT

 	
  

 	
 33

 
	
  

 	
 8.

 	
  

 	
 COVENANTS

 	
  

 	
 38

 
	
  

 	
 9.

 	
  

 	
 EVENTS OF
 DEFAULT

 	
  

 	
 47

 
	
  

 	
 10.

 	
  

 	
 INDEMNITIES
 - EXPENSES - FEES

 	
  

 	
 53

 
	
  

 	
 11.

 	
  

 	
 SECURITY AND
 SET-OFF

 	
  

 	
 57

 
	
  

 	
 12.

 	
  

 	
 UNLAWFULNESS,
 INCREASED COSTS

 	
  

 	
 60

 
	
  

 	
 13.

 	
  

 	
 GUARANTEE

 	
  

 	
 62

 
	
  

 	
 14.

 	
  

 	
 ASSIGNMENT,
 PARTICIPATION, LENDING OFFICE

 	
  

 	
 67

 
	
  

 	
 15.

 	
  

 	
 MISCELLANEOUS

 	
  

 	
 68

 
	
  

 	
 16.

 	
  

 	
 NOTICES AND
 OTHER MATTERS

 	
  

 	
 71

 
	
  

 	
 17.

 	
  

 	
 APPLICABLE
 LAW AND JURISDICTION 1 7. 1 Law

 	
  

 	
 72

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 SCHEDULE

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 


 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
  

 	
 FORM OF
 DRAWDOWN NOTICE

 	
  

 	
  

 









 THIS AGREEMENT is dated 7th
December, 2007 and made BETWEEN:


	
  

 	
  

 	
  

 
	
 (1)

 	
 ALPHA BANK A.E.,
 a banking societe anonyme duly incorporated under the laws of Greece, having
 its registered office at 40 Stadiou Street, Athens, Greece, acting for the
 purposes of this Agreement through its office at 89 Akti Miaouli, Piraeus,
 Greece (the “Bank”); and

 
	
  

 	
  

 	
  

 
	
 (2)

 	
 (a)

 	
 KELSEN SHIPPING CO.,
 a company duly incorporated in the Republic of Liberia and having its
 registered office at 80 Broad Street, Monrovia, Liberia (the “Kelsen
 Borrower”); and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 MONTES SHIPPING CO.,
 a company duly incorporated in the Republic of Liberia and having its
 registered office at 80 Broad Street, Monrovia, Liberia (the “Montes
 Borrower”),

 
	
  

 	
  

 	
  

 
	
  

 	
 as joint and several borrowers (hereinafter together called the “Borrowers”
 and singly a “Borrower”); and

 
	
  

 	
  

 	
  

 
	
 (3)

 	
 COSTAMARE SHIPPING
 COMPANY S.A., a company duly incorporated in the
 Republic of Panama and having an office established in Greece at 60 Zefyrou
 Street, Pal. Faliron, Attiki, Greece, pursuant to Greek laws 89/67, 378/68,
 27/75 and 814/79 (as amended) (hereinafter called the “Corporate Guarantor”)

 
	
  

 	
  

 
	
 AND IT IS HEREBY
 AGREED as follows:

 
	
  

 
	
 1.

 	
 AMOUNT, PURPOSE, DEFINITIONS AND
 INTERPRETATION

 
	
  

 	
  

 	
  

 
	
 1.1

 	
 Amount and Purpose

 
	
  

 	
  

 	
  

 
	
  

 	
 This Agreement sets out the terms and conditions upon and subject to
 which it is agreed that the Bank will make available to the Borrowers on a
 joint and several basis by up to two Advances a term loan of up to One
 hundred and fifty million Dollars ($150,000,000) as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Tranche A in an amount of up to $75,000,000 (Seventy five million
 Dollars) shall be used for the purpose of financing part of the acquisition
 cost of “MAERSK KAWASAKI” (the “Tranche A”); and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Tranche B in an amount of up to $75,000,000 (Seventy five million
 Dollars) shall be used for the purpose of financing part of the acquisition
 cost of “MAERSK KURE” (the “Tranche B”).

 
	
  

 	
  

 	
  

 
	
 1.2

 	
 Definitions

 
	
  

 	
  

 
	
  

 	
 In this Agreement, unless the context otherwise requires each term or
 expression defined in the recital of the parties, in this Clause shall have
 the meaning given to it in the recital of the parties, in this Clause and:

 


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  “Advance”
 means each borrowing of a portion of the Commitment by the Borrowers or (as
 the context may require) the principal amount of such borrowing;

 
	
  

 	
  

 
	
  

 	
  “Agreed Rate”
 means a rate agreed between the Bank and the Borrowers on the basis of which
 (instead of LIBOR) the interest rate is determined pursuant to Clause 3.6;

 
	
  

 	
  

 
	
  

 	
  “A.P. Møller
 Charterparty” in relation to a Vessel means the time
 charter entered in connection with such Vessel between the Owner thereof and
 A.P. Moller-Maersk A/S, of Denmark, as charterer, with a duration of ten (10)
 years, at a hire of $41,700 (minus 0.5% commission) per day (together the “A.P.
 Møller Charterparties”);

 
	
  

 	
  

 
	
  

 	
  “Approved
 Charterparty” in relation to a Vessel means any time
 charterparty entered or to be entered in connection with such Vessel between
 the Owner thereof and a first-class charterer acceptable to the Bank, with
 rates and terms acceptable to the Bank and with a minimum duration of twelve
 (12) months, and includes the A.P. Moller Charterparties;

 
	
  

 	
  

 
	
  

 	
  “Availability
 Period” means the period starting on the date hereof
 and ending on 31st January, 2008 or, until such later date as the
 Bank may agree in writing or on such earlier date (if any), (i) on which the
 whole Commitment has (or - in case that the Commitment has been agreed in
 Clause 2.3 to be advanced in more than one Advance - all Advances have) been
 advanced by the Bank to the Borrowers, or (ii) on which the Borrowers cancel
 the whole of the undrawn Commitment under Clause 2.7 or (iii) on which the
 Commitment is reduced to zero pursuant to Clauses 9.9 or 12.1, 12.2 or any
 other Clause of this Agreement;

 
	
  

 	
  

 
	
  

 	
  “Bank”
 means the Bank as specified in the beginning of this Agreement and the
 successors and assigns of the Bank;

 
	
  

 	
  

 
	
  

 	
  “Banking Day”
 means any day on which banks and foreign exchange markets in New York,
 London, Athens and Piraeus and in each country or place in or at which an act
 is required to be done under this Agreement in accordance with the usual
 practice of the Bank, are open for the transaction of business of the nature
 contemplated in this Agreement;

 
	
  

 	
  

 
	
  

 	
  “Borrowed Money”
 means Indebtedness incurred in respect of (i) money borrowed or raised, (ii)
 any bond, note, loan stock, debenture or similar instrument, (iii) acceptance
 or documentary credit facilities, (iv) deferred payments for assets or
 services acquired, (v) rental payments under leases (whether in respect of
 land, machinery, equipment or otherwise) entered into primarily as a method
 of raising finance or of financing the acquisition of the asset leased, (vi)
 guarantees, bonds, stand-by letters of credit or other instruments issued in
 connection with the performance of contracts and (vii) guarantees or other
 assurances against financial loss in respect of Indebtedness of any person
 falling within any of paragraphs (i) to (vi) above;

 
	
  

 	
  

 
	
  

 	
  “Borrowers”
 means the Kelsen Borrower and the Montes Borrower as specified at the
 beginning of this Agreement;

 


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  “Charterparty”
 means in relation to a Vessel, any charterparty which exceeds or is capable
 of exceeding twelve (12) months in duration whether now existing or
 hereinafter entered into by the relevant Borrower or any person, firm or
 company on its behalf;

 
	
  

 	
  

 
	
  

 	
  “Charterparty
 Assignment” means the assignment of each of the A.P.
 Moller Charterparties and any other Approved Charterparty, executed or (as
 the context may require) to be executed by a Borrower in favour of the Bank,
 in form satisfactory to the Bank as the same may from time to time be amended
 and/or supplemented and respective notices and acknowledgements thereof
 and/or, at the discretion of the Bank, copy of irrevocable instructions of
 the Owner to the charterer (servable upon the occurrence of an Event of
 Default) for the payment of the hire to the Bank and/or a copy of the charter
 with appropriate irrevocable notation;

 
	
  

 	
  

 
	
  

 	
  “Collateral
 Guarantee” means the irrevocable and unconditional
 guarantee of a Collateral Guarantor in favour of the Bank in form and
 substance satisfactory to the Bank (together, the “Collateral Guarantees”);

 
	
  

 	
  

 
	
  

 	
  “Collateral
 Mortgage” in relation to a Collateral Vessel, the
 second or, as the case may be, third preferred Greek ship mortgage over such
 Collateral Vessel to be executed by the relevant Collateral Guarantor in
 favour of the Bank in form and substance satisfactory to the Bank (together,
 the “Collateral
 Mortgages”);

 
	
  

 	
  

 
	
  

 	
  “Collateral General
 Assignment” in relation to a Collateral Vessel, the
 second or, as the case may be, third priority General Assignment in respect
 thereof to be executed by the relevant Collateral Guarantor in favour of the
 Bank in form and substance satisfactory to the Bank (together, the “Collateral
 General Assignments”);

 
	
  

 	
  

 
	
  

 	
  “Collateral
 Security Documents” means together the Letters of
 Undertaking, the Collateral Guarantees, the Collateral Mortgages and the
 Collateral General Assignments and “Collateral Security Document” means any
 of them as the context may require;

 
	
  

 	
  

 
	
  

 	
  “Collateral Owners”
 means, together, WEST END SHIPPING CO. LTD.,
 of Liberia, GUILDMORE NAVIGATION S.A., of Liberia
 and DEVONSHIRE CORPORATION, of Liberia, and “Collateral
 Owner” means any of them as the context may require;

 
	
  

 	
  

 
	
  

 	
  “Collateral
 Vessels” means;

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 m/v “SOPHIA BRITANNIA” registered under Greek flag at the Ships
 Registry of the port of Piraeus in the ownership of WEST END
 SHIPPING CO. LTD., of Liberia, under Registration No. 10685;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 m/v “MAERSK TOYAMA” registered under Greek flag at the Ships
 Registry of the port of Piraeus in the ownership of GUILDMORE NAVIGATION S.A., of Liberia, under Registration No. 10535; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 m/v “HYUNDAI CHALLENGER” registered under Greek flag at the Ships
 Registry of the port of Piraeus in the ownership of DEVONSHIRE CORPORATION,
 of Liberia, under Registration No. 10547,

 


4









	
  

 	
  

 	
  

 
	
  

 	
 and “Collateral Vessel” means any of them as the context may
 require; “Commitment” means the amount which the Bank agreed to lend to the
 Borrowers under Clause 2.1 as reduced by any relevant term of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Commitment Letter”
 means the Commitment Letter dated 28th November, 2007 addressed by
 the Bank to the Kelsen Borrower and the Montes Borrower;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Corporate
 Guarantee” means the irrevocable and unconditional
 guarantee of the Corporate Guarantor in favour of the Bank (contained in
 clause 13);

 
	
  

 	
  

 	
  

 
	
  

 	
  “Corporate
 Guarantor” means COSTAMARE
 SHIPPING COMPANY S.A., a company incorporated in and existing
 under the laws of the Republic of Pan a having its registered office at
 Panama City, Republic of Panama and having an office established at 60
 Zephyrou Street, Athens, Greece under the Greek laws 89/67, 378/68, 27/75 and
 814/78 (as amended);

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Default Rate”
 means that rate of interest per annum which is determined in accordance with
 the provisions of Clause 3.4;

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Drawdown Date”
 means the date on which the Commitment (or - in case that the Commitment has
 been agreed in Clause 2.3 to be advanced in more than one advance - each
 Advance) is or, as the context may require, shall be advanced to the
 Borrowers;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Drawdown Notice”
 means a notice substantially in the terms of Schedule 1;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Earnings”
 in relation to a Vessel, means all earnings of such Vessel, both present or
 future, including all freight, hire and passage moneys, compensation payable
 to its owner in the event of requisition of such Vessel for hire,
 remuneration for salvage and towage services, demurrage and detention moneys,
 contributions of any nature whatsoever in respect of general average, damages
 for breach (or payments for variation or termination) of any charterparty or
 other contract for employment of such Vessel and any other earnings
 whatsoever due or to become due to its owner in respect of such Vessel and
 all sums recoverable under the Insurances in respect of loss of Earnings and
 includes, if and whenever such Vessel is employed on terms whereby any and
 all such moneys as 

 


5









	
  

 	
  

 	
  

 
	
  

 	
 aforesaid are pooled or shared with any other person, that proportion
 of the net receipts of the relevant pooling or sharing agreement which is
 attributable to such Vessel;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Earnings Account”
 means an account opened or to be opened and maintained in the name of the
 Corporate Guarantor with the Bank (or any other office of the Bank or with a
 bank or financial institution other than the Bank (whether associated with
 the Bank or not) nominated by the Bank by notice to the Borrowers) pursuant
 to Clause 11.5 and shall include any sub-accounts or call accounts (whether
 in Dollars or any other currency) opened under the same designation or any
 revised designation or number from time to time notified by the Bank to the
 Borrowers and to which (inter alia) all Earnings of each of the Vessels are
 to be paid in accordance with Clauses 11.5 and 8.9(b);

 
	
  

 	
  

 	
  

 
	
  

 	
  “Encumbrance”
 means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
 assignment, security interest, title retention, arrest, seizure, garnishee
 order (whether nisi or absolute) or any other order or judgement having
 similar effect or other encumbrance of any kind securing or any right
 conferring a priority of payment in respect of any obligation of any person;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Environmental
 Affiliate” means any agent or employee of any of the
 Borrowers or any other Relevant Party or any person having a contractual
 relationship with any of the Borrowers or any other Relevant Party in
 connection with any Relevant Ship or her operation or the carriage of cargo
 thereon;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Environmental
 Approval” means any consent, authorisation, licence
 or approval of any governmental or public body or authorities or courts
 applicable to any Relevant Ship or her operation or the carriage of cargo
 thereon and/or passengers therein and/or provisions of goods and/or services
 on or from the Relevant Ship required under any Environmental Law;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Environmental
 Claim” means any and all enforcement, clean up,
 removal or other governmental or regulatory actions or orders instituted or
 completed pursuant to any Environmental Law or any Environmental Approval
 together with claims made by any third party relating to damage,
 contribution, loss or injury, resulting from any actual or threatened
 emission, spill, release or discharge of a Material of Environmental Concern
 from any Relevant Ship, such claim exceeding or which may exceed $1,000,000;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Environmental
 Incident” means (i) any release of Material of
 Environmental Concern from the Vessel, (ii) any incident in which Material of
 Environmental Concern is released from a vessel other than the Vessel and
 which involves collision between the Vessel and such other vessel or some
 other incident of navigation or operation, in either case, involving the
 Vessel, the Borrower or the Manager are actually at fault or otherwise liable
 (in whole or in part) or (iii) any incident in which Material of
 Environmental Concern is released from a vessel other than the Vessel and
 where the Vessel is actually or potentially liable to be arrested as a result
 and/or where the Borrowers are actually or allegedly at fault or otherwise
 liable;

 


6









	
  

 	
  

 	
  

 
	
  

 	
  “Environmental
 Laws” means all national, international and state laws,
 rules, regulations, treaties and conventions applicable to any Relevant Ship
 pertaining to the pollution or protection of human health or the environment
 including, without limitation, the carriage or Materials of Environmental
 Concern and actual or threatened emissions, spills, releases or discharges of
 Materials of Environmental Concern and actual or threatened emissions,
 spills, releases or discharges of Materials of Environmental Concern from any
 Relevant Ship;

 
	
  

 	
  

 
	
  

 	
  “Event of Default”
 means any one of those events set out in Clause 9 or described as such in any
 other of the Security Documents;

 
	
  

 	
  

 
	
  

 	
  “Expenses”
 means the aggregate at any relevant time (to the extent that the same have
 not been received or recovered by the Bank) of:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 all losses, liabilities, costs, charges, expenses, damages and
 outgoings of whatever nature, (including, without limitation, Taxes, repair
 costs, registration fees and insurance premiums, crew wages, repatriation
 expenses and seamen’s pension fund dues) suffered, incurred, charged to or
 paid or committed to be paid by the Bank in connection with the exercise of
 the powers referred to in or granted by any of the Security Documents or
 otherwise payable by the Borrowers or any of them in accordance with the
 terms of any of the Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the expenses referred to in Clause 10.2; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 interest on all such losses, liabilities, costs, charges, expenses,
 damages and outgoings from the date on which the same were suffered, incurred
 or paid by the Bank until the date of receipt or recovery thereof (whether
 before or after judgement) at the Default Rate (as conclusively certified by
 the Bank);

 
	
  

 	
  

 	
  

 
	
  

 	
  “Final Maturity
 Date” means the date falling on the tenth (10th)
 anniversary of the Drawdown Date in respect of Tranche second to be drawn
 down;

 
	
  

 	
  

 
	
  

 	
  “Flag State”
 means the Republic of Greece or such other state or territory proposed in
 writing by the Borrowers to the Bank and approved (at its sole discretion) by
 the Bank, as being the “Flag State” of a Vessel for the purposes of the
 Security Documents;

 
	
  

 	
  

 
	
  

 	
  “General
 Assignment” means in relation to a Vessel, the
 assignment of the Earnings, Insurances and Requisition compensation executed
 or (as the context may require) to be executed by the respective Owner in
 favour of the Bank in form satisfactory to the Bank (together, the “General
 Assignments”);

 
	
  

 	
  

 
	
  

 	
  “Governmental
 Withholdings” means withholdings and any
 restrictions or conditions resulting in any charge whatsoever imposed, either
 now or hereafter, by any sovereign state or by any political sub-division or
 taxing authority of any sovereign state;

 
	
  

 	
  

 
	
  

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

 


7









	
  

 	
  

 	
  

 
	
  

 	
  “Interest Payment
 Date” means in respect of the Loan or any part
 thereof in respect of which a separate Interest Period is fixed the last day
 of the relevant Interest Period and in case of any Interest Period longer
 than six (6) months the date(s) falling at successive six (6) months
 intervals during such longer Interest Period and the last day of such longer
 Interest Period;

 
	
  

 	
  

 
	
  

 	
  “Interest Period”
 means in relation to the Loan or any part thereof, each period for the
 calculation of interest in respect of the Loan or such part ascertained in
 accordance with Clauses 3.2 and 3.3;

 
	
  

 	
  

 
	
  

 	
  “ISM Code”
 means in relation to its application to the Borrowers, the Vessels and their
 operation:

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “ISM Code
 Documentation” includes:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the DOC and SMC issued by a classification society in all respects
 acceptable to the Bank in its absolute discretion pursuant to the ISM Code in
 relation to the Vessels within the period specified by the ISM Code;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 all other documents and data which are relevant to the ISM SMS and
 its implementation and verification which the Bank may require by request;
 and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any other documents which are prepared or which are otherwise
 relevant to establish and maintain the Vessels’ or the Borrowers’ compliance
 with the ISM Code which the Bank may require by request;

 
	
  

 	
  

 	
  

 
	
  

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

 


8









	
  

 	
  

 	
  

 
	
  

 	
  “ISPS Code”
 means the International Ship and Port Security Code of the International
 Maritime Organization and includes any amendments or extensions thereto and
 any regulation issued pursuant thereto;

 
	
  

 	
  

 
	
  

 	
  “ISSC”
 means an International Ship Security Certificate issued in respect of the
 relevant Vessel pursuant to the ISPS Code;

 
	
  

 	
  

 
	
  

 	
  “Lending Branch”
 means the office of the Bank appearing at the beginning of this Agreement or
 any other office of the Bank designated by the Bank as the Lending Branch by
 notice to the Borrowers;

 
	
  

 	
  

 
	
  

 	
  “Letter of
 Undertaking” means the Letter of Undertaking to be
 executed in favour of the Bank by each Collateral Owner, whereby such
 Collateral Owner shall (inter alia) undertake to execute the Collateral
 Security Documents relevant to its Collateral Vessel, in form and substance
 satisfactory to the Bank (together, the “Letters of Undertaking”);

 
	
  

 	
  

 
	
  

 	
  “LIBOR”
 means, in relation to a particular period:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the offered rate (if any) per annum for deposits in Dollars for such
 amount and for such period which is the rate, for such period, appearing on
 the relevant page of the Reuter screen at or about 11 a.m. London time on the
 second Banking Day before the first day of such period (or, if the Bank shall
 have made a determination pursuant to clause 3.6 such later time (not being
 later than 1 p.m. (London time) on the first day of such period) as the Bank
 may determine) or such other page as may replace the relevant Page of the
 Reuter screen on that service for the purpose of displaying rates comparable
 to that rate or on such other service as may be nominated by the British
 Bankers’ Association as the information vendor for the purpose of displaying
 the British Bankers’ Association Interest Settlement Rates for Dollars; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 if on such date no such rate is so displayed, LIBOR for such period
 shall be the rate determined by the Bank to be the rate at which the Bank in
 accordance with its usual practices is able to obtain similar deposit(s) in
 Dollars in an amount approximately equal to the amount in relation to which
 LIBOR is to be determined for a period equivalent to such period in the
 London Interbank Market at or about 11:00 a.m. (London time) on the second
 Banking Day before the first day of such period;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Loan”
 means the aggregate principal amount borrowed by the Borrowers in respect of
 the Commitment or (as the context may require) the principal amount owing to
 the Bank under this Agreement at any time;

 
	
  

 	
  

 
	
  

 	
 Major Casualty
 Amount” means in relation to a Vessel, any casualty
 to such Vessel in respect whereof the claim or the aggregate of the claims
 against all insurers, before adjustment for any relevant franchise or
 deductible, exceeds Five hundred thousand Dollars ($500,000) or the
 equivalent in any other currency;

 


9









	
  

 	
  

 	
  

 
	
  

 	
  “Management
 Agreement” in relation to a Vessel means the
 agreement made or to be made between the Owner thereof and the Manager and
 approved by the Bank providing for the appointment of the Manager to manage
 such Vessel subject to and upon the terms and conditions therein contained
 and approved by the Bank, a certified copy whereof has been or will be
 delivered to the Bank if and when the same becomes compulsory under the ISM
 Code;

 
	
  

 	
  

 
	
  

 	
  “Manager”
 means the Corporate Guarantor or such other person as may from time to time
 be approved by the Bank for the purpose of managing the Vessel:

 
	
  

 	
  

 
	
  

 	
  “Market Value”
 means the market value of a Vessel as determined in accordance with Clause
 8.11(b).

 
	
  

 	
  

 
	
  

 	
  “Margin”
 means zero point eight five per centum (0.85%) per annum;

 
	
  

 	
  

 
	
  

 	
  “Material of
 Environmental Concern” means and includes pollutants,
 contaminants, toxic substances, oil as defined in the United States Oil
 Pollution Act of 1990 and all hazardous substances as defined in the United
 States Comprehensive Environmental Response, Compensation and Liability Act
 1988;

 
	
  

 	
  

 
	
  

 	
  “MOAs”
 means in relation to:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 “REGINA MAERSK”, the Memorandum of Agreement dated 3rd
 December, 2007 entered into between the Seller, as sellers and the Kelsen
 Borrower, as buyers in respect of the sale by the Seller and the purchase by
 such Borrower of such Vessel and any and all Addenda thereto; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 “KIRSTEN MAERSK”, the Memorandum of Agreement dated 3rd
 December, 2007 entered into between the Seller, as sellers and the Montes
 Borrower, as buyers in respect of the sale by the Seller and the purchase by
 such Borrower of such Vessel and any and all Addenda thereto,

 
	
  

 	
  

 	
  

 
	
  

 	
 and “MOA” means either of them as the context may require;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Mortgage”
 means in relation to a Vessel the first preferred Greek ship mortgage
 thereon, to be executed by the Owner thereof in favour of the Bank in form
 satisfactory to the Bank (together, the “Mortgages”);

 


10









	
  

 	
  

 	
  

 
	
  

 	
  “Mortgaged
 Vessel(s)” means the Vessel(s) which remain
 mortgaged in favour of the Bank pursuant to this Agreement at any relevant
 time hereunder;

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Operating
 Expenses” in relation to a Vessel means the expenses
 for crewing, victualling, insuring, maintenance (including drydocking and
 special survey cost and expenses), spares, management and operation of such
 Vessel which are reasonably incurred for a vessel of the size and type of
 such Vessel;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Outstanding
 Indebtedness” means the aggregate of the Loan and
 interest accrued and accruing thereon, the Expenses and all other sums of
 money from time to time owing by the Borrowers to the Bank, including,
 without limitation, default interest, damages, indemnities, costs, expenses,
 whether actually or contingently under this Agreement and the other Security
 Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Owner”
 means the owner of each of the Vessels as specified in the definition of the
 Vessels in this Clause 1.2;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Permitted
 Encumbrance” means any Encumbrance in favour of the
 Bank created pursuant to the Security Documents and Permitted Liens;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Permitted Lien”
 means any lien on the Vessel for master’s, officers’ or crew’s wages
 outstanding in the ordinary course of trading, any lien for salvage and any
 ship repairer’s or outfitter’s possessory lien for a sum not (except with the
 prior written consent of the Bank) exceeding the Major Casualty Amount (as
 defined in the Mortgage);

 
	
  

 	
  

 	
  

 
	
  

 	
  “Receiving Bank”
 means Citibank N.A, 399, Park Avenue, New York 10022, N.Y., U.S.A., or such
 other bank in New York as the Bank may notify to the Borrowers;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Registry”
 means the offices of such registrar, commissioner or representative of the
 Flag State who is duly authorised to register the Vessels, each Borrower’s
 title to its respective Vessel and the Mortgage over the Vessels under the
 laws and flag of the Flag State;

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Relevant Ship”
 means the Vessels and any other vessel owned by, managed by or chartered to
 any Security Party;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Repayment Date”
 means each of the dates specified in Clause 4.1 on which the Repayment
 Instalments shall be payable by the Borrowers to the Bank;

 


11









	
  

 	
  

 	
  

 
	
  

 	
  “Repayment
 Instalment” means each instalment of the Loan which
 becomes due for repayment by the Borrowers to the Bank on a Repayment Date
 pursuant to Clause 4.1;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Requisition
 Compensation” means all sums of money or other
 compensation from time to time payable by reason of requisition of a vessel
 otherwise than by requisition for hire;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Security
 Documents” means the General Assignment, the
 Mortgage, the Corporate Guarantee, the Charterparty Assignments, the
 Collateral Security Documents and any document or documents (including if the
 context requires this Agreement) that may now or hereafter be executed to
 secure the whole or any part of the Outstanding Indebtedness as well as for
 the performance by the Borrowers of all its obligations covenants and
 agreements pursuant to this Agreement and/or the Security Documents, each
 such Security Document to be in form and substance as the Bank may require as
 the same may from time to time be amended and/or supplemented;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Security Party”
 means each of the Borrowers, the Corporate Guarantor, the Collateral Owners
 and any person (other than the Bank) which is or will become a party to any
 of the Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Security Period”
 means the period commencing on the date hereof and terminating on the date
 upon which the Loan together with all interest thereon and all other moneys
 payable to the Bank under this Agreement and the other Security Documents has
 been repaid in full to the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Security
 Requirement” means the amount in Dollars (as certified
 by the Bank, whose certificate shall, in the absence of manifest error, be
 conclusive and binding on the Borrowers) which is at any relevant time one
 hundred and fifteen per cent (115%) of the Loan;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Security Value”
 means the amount in Dollars (as certified by the Bank whose certificate
 shall, in the absence of manifest error, be conclusive and binding on the
 Borrowers) which, at any relevant time is the aggregate of (a) the Market
 Value of the Mortgaged Vessel(s) as most recently determined in accordance
 with Clause 8.11 and (b) the market value of any additional security provided
 under Clause 8.11(a) (if any);

 
	
  

 	
  

 	
  

 
	
  

 	
  “Seller”
 means in relation to each Vessel, A.P. Moller, Maersk A/S, Esplanaden 50,
 1098 Copenhagen K, Denmark;

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 


12









	
  

 	
  

 	
  

 
	
  

 	
  “Taxes”
 includes all present and future taxes, levies, imposts, duties, fees or
 charges of whatever nature together with interest thereon and penalties in
 respect thereof (except taxes concerning the Bank and imposed on the net
 income of the Bank) and “Taxation” shall be construed accordingly;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Total Loss”
 means (a) actual, constructive, compromised or arranged total loss of a
 vessel; or (b) requisition for title or other compulsory acquisition of a
 vessel otherwise than by requisition for hire; or (c) hijacking, theft,
 condemnation capture, seizure, detention, arrest or confiscation of the
 Vessel by any government or by any person acting or purporting to act on
 behalf of any government, unless the Vessel is released and restored to the
 Owner thereof within sixty (60) days after the occurrence thereof;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Tranches”
 means the Tranche A and the Tranche B specified in Clause 1.1 and “Tranche”
 means either of them, as the context may require;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Vessels”
 means:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 m/v “REGINA MAERSK” presently registered under the Danish flag, of
 about 81,488 gt and 43,399 nt, built in 1996 in Odense Steel Shipyard, IMO
 No. 9085522, purchased by the Kelsen Borrower pursuant to the relevant MOA
 and which upon delivery shall be registered under Greek flag at the Ships
 Registry of the port of Piraeus in the ownership of the Kelsen Borrower under
 the name “MAERSK KURE” (the “MAERSK KURE”); and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 m/v “KIRSTEN MAERSK” presently registered under the Danish flag, of
 about 81,488 gt and 43,399 nt, built in 1997 in Odense Steel Shipyard, IMO No.
 9107887, purchased by the Montes Borrower pursuant to the relevant MOA and
 which upon delivery shall be registered under Greek flag at the Ships
 Registry of the port of Piraeus in the ownership of the Montes Borrower under
 the name “MAERSK KAWASAKT (the “MAERSK KAWASAKI”);

 
	
  

 	
  

 	
  

 
	
  

 	
 (together, the “Vessels” and “Vessel” means either of
 them, as the context may require).

 
	
  

 	
  

 	
  

 
	
 1.3

 	
 Interpretation

 
	
  

 	
  

 	
  

 
	
  

 	
 In this Agreement:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 each of the terms defined in Clause 1.2 when used in plural and terms
 defined in plural or words used in plural (and unless in the specific clause
 or sentence is otherwise expressly specified) mean all of them collectively
 and/or each of them and/or anyone of them (even if this is not expressly so
 spelled out) as the context may require or permit;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 subject to any specific provision of this Agreement or of any
 assignment and/or participation or syndication agreement of any nature
 whatsoever, reference to 

 


13









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each of the parties hereto and to the other Security Documents shall
 be deemed to be reference to and/or to include, as appropriate, their
 respective successors and permitted assigns;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 reference to a person shall be construed as including reference to an
 individual, firm, company, corporation, unincorporated body of persons or any
 State or any agency thereof;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 where the context so admits, words in the singular include the plural
 and vice versa;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 the words “including” and “in particular” shall not be construed as
 limiting the generality of any foregoing words;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 this Agreement and all documents referred to in this Agreement include
 the same as varied or supplemented from time to time;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 reference to this Agreement includes all the terms of this Agreement
 and any Schedules, Annexes or Appendices to this Agreement, which form an
 integral part of same;

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 reference to Clauses, Sub-Clauses and Schedules are to Clauses,
 Sub-Clauses and Schedules in this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 all obligations imposed on, or assumed by the Borrowers are joint and
 several even if not so expressed;

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 reference to the opinion of the Bank or a determination or acceptance
 by the Bank or to documents, acts, or persons acceptable or satisfactory to
 the Bank or the like shall be construed as reference to opinion,
 determination, acceptance or satisfaction of the Bank at the sole discretion
 of the Bank and such opinion, determination, acceptance or satisfaction of
 the Bank shall be conclusive and binding on the Borrowers.

 
	
  

 	
  

 	
  

 
	
 2.

 	
 THE LOAN

 
	
  

 	
  

 	
  

 
	
 2.1

 	
 Commitment to Lend

 
	
  

 	
  

 	
  

 
	
  

 	
 The Bank, relying upon each of the representations and warranties set
 forth in Clause 6 and in each of the other Security Documents, agrees to lend
 to the Borrowers, upon and subject to the terms of this Agreement the sum
 specified in Clause 1.1.

 


14









	
  

 	
  

 
	
 2.2

 	
 Drawdown Notice and Commitment to Borrow

 
	
  

 	
  

 
	
  

 	
 Subject to the terms and conditions of this Agreement, the Commitment
 (or -in case that the Commitment has been agreed in Clause 2.3 to be advanced
 in more than one Advance - each Advance) shall be advanced to the Borrowers
 following receipt by the Bank from the Borrowers of a Drawdown Notice not
 later than 10 a.m. (London time) on the third (3) Banking Day before the date
 on which the drawdown is intended to be made. A Drawdown Notice shall be
 effective on actual receipt by the Bank and, once given, shall, subject as
 provided in Clause 3.6, be irrevocable.

 
	
  

 	
  

 
	
 2.3

 	
 Number and Purpose of Advances

 
	
  

 	
  

 
	
  

 	
 The Commitment shall be advanced to the Borrowers by the Tranches,
 each such Tranche to be used for the purpose specified in Clause 1.1.

 
	
  

 	
  

 
	
 2.4

 	
 Disbursement

 
	
  

 	
  

 
	
  

 	
 Upon receipt of the Drawdown Notice complying with the terms of this
 Agreement the Bank shall, subject to the provisions of Clause 7, on the date
 specified in the Drawdown Notice, make the Commitment available to the
 Borrowers.

 
	
  

 	
  

 
	
 2.5

 	
 Application of proceeds

 
	
  

 	
  

 
	
  

 	
 Without prejudice to the Borrowers’ obligations under Clause 8.8(a),
 the Bank shall have no responsibility for the application of the proceeds of
 the Loan (or any part thereof) by the Borrowers.

 
	
  

 	
  

 
	
 2.6

 	
 Termination Date

 
	
  

 	
  

 
	
  

 	
 Any part of the Commitment undrawn and uncancelled at the end of the
 Availability Period shall thereupon be automatically cancelled.

 
	
  

 	
  

 
	
 2.7

 	
 Cancellation

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall be entitled to cancel any undrawn part of the
 Commitment under this Agreement upon giving the Bank not less than five (5)
 Banking Days’ notice in writing to that effect, provided, that no
 Drawdown Notice has been given to the Bank under Clause 2.2 for the full
 amount of the Commitment or in respect of the portion thereof in respect of
 which cancellation is required by the Borrowers. Any such notice of
 cancellation, once given, shall be irrevocable. Any amount cancelled may not
 be drawn. Notwithstanding any such cancellation pursuant to this Clause 2.7
 the Borrowers shall continue to be liable for any and all amounts due to the
 Bank under this Agreement including without limitation any amounts due to the
 Bank under Clause 10.

 
	
  

 	
  

 
	
 2.8

 	
 No security or lien from other person

 
	
  

 	
  

 
	
  

 	
 None of the Borrowers has taken or received, and each of the
 Borrowers undertake that until all moneys, obligations and liabilities due,
 owing or incurred by the Borrowers 

 


15









	
  

 	
  

 
	
  

 	
 under this Agreement and the Security Documents have been paid in
 full, will not take or receive, any security or lien from any other person
 liable or for any liability whatsoever.

 
	
  

 	
  

 
	
 2.9

 	
 Joint and Several Liability of the Borrowers

 






	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The liability of each of the Borrowers hereunder shall in all cases,
 whether so expressed to be or not, be joint and several and each
 representation and warranty and each covenant and agreement made or given by
 the Borrowers is made or given by them all jointly and severally.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Bank may at its discretion accept orders, instructions, notices
 or advices from any of the Borrowers hereunder (which Borrower will be deemed
 to act on behalf of all the Borrowers and express authority is given to it by
 this Clause to act on this way) and shall ignore any subsequent conflicting
 instructions, notices or advices from any of the other Borrowers (unless they
 may be deemed at the discretion of the Bank as proper revocation or
 amendments of earlier instructions) and may reach any agreement in connection
 with this Agreement or any of the other Security Documents with any of the
 Borrowers which shall be binding on all the Borrowers.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 None of the Borrowers shall be exonerated and its liability hereunder
 shall not be lessened or impaired by any time, indulgence or relief being
 given by the Bank to any other Borrower or any other person or by any per on
 to the Borrowers, by the taking, variation, compromise, renewal or release of
 or refusal or neglect to perfect or enforce any right, remedies or securities
 against any of the Borrowers or any other person or by anything done or
 omitted which but for this provision might operate to exonerate such Borrower
 (or might be interpreted as such).

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The obligations of each of the Borrowers hereunder shall not be
 affected by any legal limitation, disability, incapacity or other
 circumstances relating to any other Borrower or any other person, whether or
 not known to the Bank, by any invalidity in or irregularity or
 unenforceability of the obligations of any other Borrower or any other person
 under this Agreement or any of the other Security Documents or otherwise or
 by any change in the constitution of, or any amalgamation or reconstruction
 of any other Borrower, the Bank or any other person.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The Borrowers hereby waive all rights any Borrower may have of first
 requiring the Bank to proceed against or enforce any right or security of, or
 claim payment from any other Borrower or any other person.

 
	
  

 	
  

 	
  

 
	
 2.10

 	
 Non competition of the Borrowers with the Bank

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Until all moneys, obligations and liabilities due, owing or incurred
 by the Borrowers to the Bank under this Agreement and the other Security
 Documents have been paid or discharged in full, each Borrower agrees not to
 exercise or enforce any rights of subrogation or indemnity or any other right
 which otherwise it has against any other Borrower and agrees not to claim any
 set-off or 

 


16









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 counterclaim against any other Borrower or to claim or prove in
 competition with the Bank in the event of bankruptcy, insolvency or
 liquidation of any other Borrower or have any benefit of or any share in any
 guarantee or security now or hereafter held by the Bank.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 None of the Borrowers has taken or received, and each Borrower
 undertakes that until all moneys, obligations and liabilities due, owing or
 incurred by the Borrowers under this Agreement and the Security Documents
 have been paid in full, it will not take or receive, any security or lien
 from any other Borrower in respect of borrowing as co-borrower jointly and
 severally liable or for any liability whatsoever.

 
	
  

 	
  

 	
  

 
	
 2.11

 	
 Interest to co-borrow

 






	
  

 	
  

 	
  

 
	
  

 	
 The Borrowers have an interest in borrowing jointly and severally in
 that they are companies which have close financial co-operation and mutual
 assistance and in that the Commitment would not have been available to each
 one of the Borrowers separately.

 
	
  

 	
  

 
	
 3.

 	
 INTEREST

 
	
  

 	
  

 
	
 3.1

 	
 Normal Interest Rate

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall pay interest on the Loan (or as the case may be,
 each portion thereof to which a different Interest Period relates) in respect
 of each Interest Period (or part thereof) on each Interest Payment Date, provided,
 that in the case of an Interest Period of more than six (6) months
 interest accruing during such Interest Period shall be payable six-monthly in
 arrears and on the last day of such Interest Period. The interest rate for
 the calculation of interest shall be the rate per annum determined by the
 Bank to be the aggregate of (i) the Margin and (ii) LIBOR, unless there is an
 Agreed Rate in which case the interest rate for the calculation of interest
 shall be the rate per annum determined by the Bank to be the aggregate of (i)
 the Margin and (ii) the Agreed Rate.

 
	
  

 	
  

 
	
 3.2

 	
 Interest Period

 
	
  

 	
  

 
	
  

 	
 The Borrowers may by notice received by the Bank not later than 10
 a.m. (London time) on the second Banking Day before the beginning of each
 Interest Period specify (subject to Clause 3.3 below) whether such Interest
 Period shall have a duration of one (1) or two (2) or three (3) or six (6) or
 twelve (12) months (or such other period as may be requested by the Borrowers
 subject to Bank’s approval and market availability).

 
	
  

 	
  

 
	
 3.3

 	
 Duration of Interest Period

 
	
  

 	
  

 
	
  

 	
 Every Interest Period shall, subject to market availability to be
 conclusively determined by the Bank, be of the duration specified by the
 Borrowers pursuant to Clause 3.2 but so that:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the initial Interest Period in respect of the Loan (or - in case that
 the Commitment is agreed to be advanced in more than one Advance - of each
 Advance) will 

 


17









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 commence on the date on which the Commitment is advanced and each
 subsequent Interest Period will commence forthwith upon the expiry of the
 previous Interest Period;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 if any Interest Period would otherwise overrun one or more Repayment
 Dates, then, in the case of the last Repayment Date, such Interest Period
 shall end on such Repayment Date, and in the case of any other Repayment Date
 or Dates the Loan shall be divided into parts so that there is one part equal
 to the amount(s) of the Repayment Instalment(s) due on each Repayment Date
 falling during that Interest Period and having an Interest Period ending on
 the relevant Repayment Date and another part equal to the amount of the
 balance of the Loan having an Interest Period determined in accordance with
 Clause 3.2 and the other provisions of this Clause 3.3;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 if the Borrowers fail to specify the duration of an Interest Period
 in accordance with the provisions of Clause 3.2 and this Clause 3.3, such
 Interest Period shall have a duration of three (3) months unless another
 period shall be determined by the Bank at its sole discretion provided,
 always, that such period (whether of three (3) months or of different
 duration) shall comply with this Clause 3.3; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 if the Bank determines that the duration of an Interest Period specified
 by the Borrowers in accordance with Clause 3.2 is not readily available, then
 that Interest Period shall have such duration as the Bank, may determine;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, always that:

 






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 any Interest Period which commences on the last day of a calendar
 month, and any Interest Period which commences on the day on which there is
 no numerically corresponding day in the calendar month during which such
 Interest Period is due to end, shall end on the last Banking Day of the
 calendar month during which such Interest Period is due to end; and I

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 if the last day of an Interest Period is not a Banking Day the
 Interest Period shall be extended until the next following Banking Day unless
 such next following Banking Day falls in the next calendar month in which
 case such Interest Period shall be shortened to expire on the preceding
 Banking Day.

 






	
  

 	
  

 	
  

 
	
 3.4

 	
 Default
 Interest

 
	
  

 	
  

 
	
  

 	
 If the Borrowers fail to pay any sum (including, without limitation,
 any sum payable pursuant to this Clause 3.4) on its due date for payment
 under any of the Security Documents, the Borrowers shall pay interest on such
 sum from the due date up to the date of actual payment (as well after as
 before judgement) at the rate determined by the Bank pursuant to this Clause
 3.4. The period beginning on such due date and ending on such date of payment
 shall be divided into successive periods of a duration to be selected by the
 Bank each of which (other than the first, which shall commence on such due
 date) shall commence on the last day of the preceding such period. The rate
 of interest 

 


18









	
  

 	
  

 	
  

 
	
  

 	
 applicable to each such period shall be the aggregate (as determined
 by the Bank) of (i) two per cent (2%), per annum, (ii) the Margin and (iii)
 LIBOR. Such interest shall be due and payable on the last day of each such
 period as determined by the Bank and each such day shall, for the purposes of
 this Agreement, be treated as an Interest Payment Date, provided, that
 if such unpaid sum is of principal which became due and payable by reason of a
 declaration by the Bank under Clause 9.2 or a prepayment pursuant to Clauses
 4.2, 4.3, 8.11(a) and 12.1 on a date other than an Interest Payment Date
 relating thereto, the first such period selected by the Bank shall be of a
 duration equal to the period between the due date of such principal sum and
 such Interest Payment Date and interest shall be payable on such principal
 sum during such period at a rate two per cent (2%) above the rate applicable
 thereto immediately before it fell due. If for the reasons specified in
 Clause 3.6, the Bank is unable to determine a rate in accordance with the
 foregoing provisions of this Clause 3.4, interest on any sum not paid on its
 due date for payment shall be calculated at a rate determined by the Bank to
 be two per cent (2%) per annum above the aggregate of the relevant Margin and
 costs of funds to the Bank as conclusively determined by the Bank save for
 manifest error. Interest payable by the Borrowers as aforesaid shall be
 compounded semi-annually and shall be payable on demand.

 
	
  

 	
  

 	
  

 
	
 3.5

 	
 Notification of Interest

 
	
  

 	
  

 
	
  

 	
 The Bank shall notify the Borrowers promptly of the duration of each
 Interest Period and of each rate of interest determined by it under this
 Clause 3 without prejudice to the right of the Bank to make determinations at
 its sole discretion. In case that the Bank fails to notify the Borrowers as
 above, such failure will not affect the validity of the determination of the
 Interest Period and Interest Rate made pursuant to this Clause 3 and neither
 constitute nor will be interpreted as if to constitute a breach of obligation
 of the Bank except in case of wilful misconduct.

 
	
  

 	
  

 
	
 3.6

 	
 Market disruption- Non availability

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 If and whenever, at any time prior to the commencement of any
 Interest Period, the Bank (in its reasonable discretion) shall have
 determined (which determination shall, in the absence of manifest error, be
 conclusive) (i) that adequate and fair means do not exist for ascertaining
 LIBOR in respect of Dollars during said Interest Period or (ii) that deposits
 in Dollars are not available to the Bank in the London Interbank Market in
 the ordinary course of business in sufficient amounts for any Interest Period
 or (iii) that by reason of circumstances affecting the London Interbank
 Market generally it is impracticable for the Bank to advance the Commitment
 or fund or continue to fund an Advance or the Loan during any Interest Period
 or (iv) that LIBOR for that Interest Period will not adequately reflect the
 cost of funding of the Loan for that Interest Period, the Bank shall
 forthwith give notice (a “Determination Notice”) thereof to the
 Borrowers. A Determination Notice shall contain particulars of the relevant
 circumstances giving rise to its issue. After the giving of any Determination
 Notice the undrawn amount of the Commitment shall not be borrowed until
 notice to the contrary is given to the Borrowers by the Bank.

 


19









	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 During the period of ten (10) days after any Determination Notice has
 been given by the Bank under Clause 3.6(a) the Bank and the Borrowers shall
 negotiate in good faith (but without incurring any legal obligations) with a
 view to arriving to an acceptable alternative basis (the “Substitute
 Basis”), for maintaining the Loan, failing which the Borrowers
 shall promptly, on first demand or within the time limit which may be
 determined by the Bank, prepay the Loan together with accrued interest
 thereon to the date of prepayment (calculated at the rate or rates most
 lately applicable to the Loan) and all other sums payable by the Borrowers
 under the Security Documents and the Commitment shall be reduced to zero. In
 such case the Borrowers shall also reimburse to the Bank such amount as may
 be determined by the Bank to be necessary to compensate it for the increased
 cost (if any) of maintaining the Loan during the period of negotiation
 referred to in this Clause 3.6 until such prepayment. In case the Bank agrees
 to a Substitute Basis for funding the Loan the Bank shall certify such
 Substitute Basis to the Borrowers. The Substitute Basis may (without
 limitation) include alternative interest period(s), alternative currencies or
 alternative rates of interest but shall include a margin above the cost of
 funds to the Bank equivalent to the relevant Margin. Each Substitute Basis so
 certified shall be binding upon the Borrowers and shall take effect in
 accordance with its terms from the date specified in the Determination Notice
 until such time as the Bank notifies the Borrowers that none of the
 circumstances specified in clause 3.6(a) continues to exist whereupon the
 normal interest rate fixing provisions of this Agreement shall apply.

 
	
  

 	
  

 	
  

 
	
 4.

 	
 REPAYMENT - PREPAYMENT 

 
	
  

 	
  

 
	
 4.1

 	
 Repayment

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall, and it is expressly undertaken by the Borrowers
 to, repay the Loan jointly and severally by twenty (20) consecutive six
 monthly Repayment Instalments, one each to be repaid on each of the Repayment
 Dates so that the first be repaid on the date falling six (6) months from the
 Drawdown Date in respect of the Tranche second to be drawn down and each of
 the subsequent ones consecutively falling due for payment on each of the
 dates falling six (6) months after the immediately preceding Repayment Date
 with the last (the 20th) of such Repayment Instalments falling due for
 payment on the Final Maturity Date; subject to the provisions of this
 Agreement, the Repayment Instalments shall be in the following amounts:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 1st to 6th (inclusive) of such Repayment
 Instalments shall be in the amount of $4,000,000 (four million Dollars) each;
 and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 7th to 19th (inclusive) of such Repayment
 Instalments shall be in the amount of $6,000,000 (Six million Dollars) each;
 and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the 20th and final Repayment Instalment shall be in the
 amount of $48,000,000 (Forty eight million Dollars) (comprising a Repayment
 Instalment of $6,000,000 (Six million Dollars) and a Balloon Instalment of
 $42,000,000 (Forty two million Dollars) (the “Balloon Instalment”));

 


20









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, however, that (a) if the last
 Repayment Date would otherwise fall after the Final Maturity Date, the last
 Repayment Date shall be the Final Maturity Date, (b) there shall be no
 Repayment Dates after the Final Maturity Date, (c) in the event that the
 Commitment is not drawn down in full, the amount of each of the Repayment Instalments
 (and the Balloon Instalment) shall be reduced pro-rata (d) on the Final
 Maturity Date the Borrowers shall also pay to the Bank any and all other
 monies then and payable under this Agreement and the other Security Documents
 and (e) if any of the Repayment Instalments shall become due on a day which
 is not a Banking Day, the due date therefor shall be extended to the next
 succeeding Banking Day unless such Banking Day falls in the next calendar
 month, in which event such due date shall be the immediately preceding
 Banking Day.

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 Voluntary Prepayment

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall have the right, to prepay part or the entire Loan
 in each case together with all unpaid interest accrued thereon and all other
 sums of money whatsoever due and owing from the Borrowers to the Bank
 hereunder or pursuant to the other Security Documents and all interest
 accrued thereon, provided, that:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the Bank shall have received from the Borrowers not less than ten
 (10) Banking Day’s prior notice (which shall be irrevocable) of their
 intention to make such prepayment and specifying the account, the date on
 which such prepayment is to be made;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 such prepayment may take place only on the last day of an Interest
 Period relating to the whole of the Loan provided, however, that if
 the Borrowers shall request consent to make such prepayment on another day
 and the Bank shall accede to such request (it being in the sole discretion of
 the Bank to decide whether or not to do so) the Borrowers will pay in
 addition to the amount to be prepaid, any such sum as may be payable to the
 Bank pursuant to Clause 10.1;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 each such prepayment shall be equal to the amount of $1,000,000 or a
 whole multiple thereof or the balance of the Loan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any prepayment of less than the whole of the Loan will be applied,
 towards satisfaction of the Repayment Instalments (including any Balloon
 Instalment referred to in clause 4.1) in the inverse order of maturity;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 every notice of prepayment shall be effective only on actual receipt
 by the Bank, shall be irrevocable and shall oblige the Borrowers to make such
 prepayment on the date specified;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 no amount prepaid may be re-borrowed; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 


21









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3

 	
 Compulsory Prepayment in case of Total Loss of a Vessel

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 On any Mortgaged Vessel becoming a Total Loss or suffering damage or
 being involved in an incident which in the reasonable opinion of the Bank may
 result in such Vessel being subsequently determined to be a Total Loss:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 prior to the drawdown of the Tranche relative to such Vessel the
 obligation of the Bank to advance such Tranche shall cease; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in case the Commitment (or any part thereof) has been already
 advanced, the amount of the Loan shall, on expiry of a period of one hundred
 and eighty (180) days following the occurrence of such Total Loss or the date
 on which the relevant Vessel suffered damage or the incident which, in the
 reasonable opinion of the Bank, may result in such Vessel being subsequently
 determined to be a Total Loss occurred or, if earlier, on the date upon
 which the insurance proceeds in respect of such Total Loss are or Requisition
 Compensation in respect of such Vessel is received by the Owner thereof, be
 reduced by an amount equal to the Required Amount (as hereinafter defined)
 and the amount so prepaid shall be applied by the Bank in pro- rata
 prepayment of the outstanding Repayment Instalments (including the Balloon
 Instalment).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the purpose of this Agreement:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 an actual total loss of a Vessel shall be deemed to have occurred at
 the actual date and time a Vessel was lost but in the event of the date of
 the loss being unknown then the actual total loss shall be deemed to have
 occurred on the date on which a Vessel was last reported;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in the case of a constructive total loss of a Vessel, upon the date
 and at the time notice of abandonment of such Vessel is given to the insurers
 of such Vessel for the time being (provided a claim for total loss is
 admitted by such insurers) or, if such insurers do not forthwith admit such a
 claim, or, in the event that such notice of abandonment is not given by the
 Owner thereof to the insurers of such Vessel, at the date and time on which
 occurred the incident which may result, in the reasonable opinion of the
 Bank, in such Vessel being subsequently determined to be a Total Loss;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 a compromised or arranged total loss shall be deemed to have occurred
 on the date on which a binding agreement as to such compromised or arranged
 total loss has been entered into by the insurers of a Vessel;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 requisition for title or other compulsory acquisition of a Vessel
 shall be deemed to have occurred on the date upon which the relevant
 requisition for title or other compulsory acquisition occurs; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 hijacking, theft, condemnation, capture, seizure, detention, arrest,
 or confiscation of a Vessel by any government or by any person acting or 

 


22









	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 confiscation of a Vessel by any
 government or by any person acting or purporting to act on behalf of
 any government, which deprives the relevant Owner of the use of its Vessel
 for more than sixty (60) days shall be deemed to occur upon the expiry of the
 period of sixty (60) days after the date upon which the relevant hijacking,
 theft, condemnation, capture, seizure, detention, arrest or confiscation
 occurred.

 






	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If any Mortgaged Vessel is sold the amount of the Loan shall,
 forthwith upon receipt of the proceeds of such sale be reduced by an amount
 equal to the Required Amount of the Loan and the Borrowers shall thereupon be
 obliged to make such repayment of the Loan, provided, that such sale
 is made at the Market Value of the relevant Vessel prevailing at the time.
 The amount so prepaid shall be applied by the Bank in pro-rata prepayment of
 the outstanding Repayment Instalments (including any Balloon Instalment
 referred to in clause 4.1);

 
	
  

 	
  

 	
  

 
	
  

 	
 and for the purpose of this Clause 4.3(i), “Required Amount” means in
 relation to either Vessel an amount equal to 50% of the Loan outstanding at
 the relevant time, provided, however, that if the relevant Vessel so
 lost or sold is the last Mortgaged Vessel, then the full amount of the
 insurance or, as the case may be, the sale proceeds shall apply against full
 repayment of the Outstanding Indebtedness and additionally the Borrowers
 shall pay to the Bank the balance (if any) of the Outstanding Indebtedness.
 In addition the Borrowers shall be obliged together with the Required Amount
 to pay to the Bank the amount of the interest accrued on the Loan to the date
 of prepayment and all other sums (other than the balance of principal of the
 Loan remaining outstanding after such prepayment having been made) due and
 payable by the Borrowers to the Bank pursuant to the Security Documents (or
 any of them) including without limitation, any amounts payable under Clause
 10 as the Bank in its absolute discretion may determine;

 
	
  

 	
  

 
	
  

 	
 provided, however, that if after the payment
 of the Required Amount and any additional amounts payable to the Bank under
 this Clause 4.3 the provisions of Clause 8.11(a) are not complied with, the
 Borrowers shall additionally prepay to the Bank the amount of the shortfall
 or provide additionally security as provided in such Clause 8.11(a); and

 
	
  

 	
  

 
	
  

 	
 provided, always, that if the relevant
 Vessel so lost or sold or otherwise disposed of is the last Mortgaged Vessel,
 then the full amount of the insurance or, as the case may be, the sale
 proceeds shall be paid to the Bank and shall be applied against repayment of
 the Outstanding Indebtedness in accordance with Clause 11.3 and in case the
 amount of such proceeds is not sufficient for the repayment of the
 Outstanding Indebtedness in full the Borrowers shall additionally pay to the
 Bank the balance (if any) of the Outstanding Indebtedness.

 
	
  

 	
  

 
	
 4.4

 	
 Amounts payable on prepayment

 
	
  

 	
  

 
	
  

 	
 Any prepayment of all or part of the Loan under this Agreement shall
 be made together with (a) accrued interest on the amount to be prepaid to the
 date of such prepayment, (b) any additional amount payable under Clause 5.3
 and (c) all other sums payable by the 

 


23









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Borrowers to the Bank under this Agreement or any of the other
 Security Documents including, without limitation, any amounts payable under
 Clause 10.

 
	
  

 	
  

 
	
 5.

 	
 PAYMENTS, TAXES AND COMPUTATION

 
	
  

 	
  

 
	
 5.1

 	
 Payment - No set-off or Counterclaims

 
	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers hereby jointly and severally acknowledge that in
 performing their respective obligations under this Agreement, the Bank will
 be incurring liabilities to third parties in relation to the funding of
 amounts to the Borrowers, such liabilities matching the liabilities of the
 Borrowers to the Bank and that it is reasonable for the Bank to be entitled
 to receive payments from the Borrowers gross on the due date in order that
 the Bank is put in a position to perform its matching obligations to the
 relevant third parties. Accordingly, all payments to be made by the Borrowers
 under this Agreement and/or any of the other Security Documents shall be made
 in full, without any set-off or counterclaim whatsoever and, subject as
 provided in Clause 5.3, free and clear of any deductions or withholdings or
 Governmental Withholdings whatsoever, as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in Dollars, not later than 10.00 a.m. (London time) on the Banking
 Day (in London and New York City) on which the relevant payment is due under
 the terms of this Agreement; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 to the Receiving Bank for the account of the Bank Account
 No.36251442, reference: “KELSEN SHIPPING CO./MONTES
 SHIPPING CO.- Loan Agreement dated ......... December, 2007”;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, however, that the Bank shall have
 the right to change the place of account for payment, upon eight (8) Banking
 Days’ prior written notice to the Borrowers.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If at any time it shall become unlawful or impracticable for the
 Borrowers (or any of them) to make payment under this Agreement to the
 relevant account or bank referred to in Clause 5.1(a), the Borrowers may
 request and the Bank may agree to alternative arrangements for the payment of
 the amounts due by the Borrowers to the Bank under this Agreement or the
 other Security Documents.

 
	
  

 	
  

 	
  

 
	
 5.2

 	
 Payments on Banking Days

 
	
  

 	
  

 
	
  

 	
 All payments due shall be made on a Banking Day. If the due date for
 payment falls on a day which is not a Banking Day, that payment due shall be
 made on the first Banking Day thereafter, provided, that this falls in
 the same calendar month. If it does not, payments shall fall due and be made on
 the last Banking Day before the said due date.

 
	
  

 	
  

 
	
 5.3

 	
 Gross Up

 
	
  

 	
  

 
	
  

 	
 If at any time any law, regulation, regulatory requirement or
 requirement of any governmental authority, monetary agency, central bank or
 the like compels the Borrowers 

 


24









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 to make payment subject to Governmental Withholdings, or any other
 deduction or withholding, the Borrowers shall pay to the Bank such additional
 amounts as may be necessary to ensure that there will be received by the Bank
 a net amount equal to the full amount which would have been received had
 payment not been made subject to such Governmental Withholdings or other
 deduction or withholding. The Borrowers shall indemnify the Bank against any
 losses, or costs incurred by the Bank by reason of any failure of the
 Borrowers to make any such deduction or withholding or by reason of any
 increased payment not being made on the due date for such payment. The
 Borrowers shall, not later than thirty (30) days after each deduction,
 withholding or payment of any Governmental Withholdings, forward to the Bank
 official receipts and any other documentary receipts and any other
 documentary evidence reasonably required by the Bank in respect of the
 payment made or to be made of any deduction or withholding or Governmental
 Withholding. The obligations of the Borrowers under this provision shall,
 subject to applicable law, remain in force notwithstanding the repayment of
 the Loan and the payment of all interest due thereon pursuant to the
 provisions of this Agreement.

 
	
  

 	
  

 
	
 5.4

 	
 Loan Account

 
	
  

 	
  

 
	
  

 	
 All sums advanced by the Bank to the Borrowers under this Agreement
 and all interest accrued thereon and all other amounts due under this
 Agreement from time to time and all repayments and/or payments thereof shall
 be debited and credited respectively to a separate loan account maintained by
 the Bank in accordance with its usual practices in the name of the Borrowers.
 The Bank may, however, in accordance with its usual practices or for its
 accounting needs, maintain more than one account, consolidate or separate
 them but all such accounts shall be considered parts of one single loan
 account maintained under this Agreement. In case that a ship mortgage in the
 form of Account Current is granted as security under this Agreement, the
 account(s) referred to in this Clause shall be the Account Current referred
 to in such mortgage.

 
	
  

 	
  

 
	
 5.5

 	
 Evidence - Certificates conclusive

 
	
  

 	
  

 
	
  

 	
 The Borrowers and the Corporate Guarantor hereby jointly and
 severally expressly agree and admit that abstracts or photocopies or other
 reproductions of the books of the Bank as well as statements of accounts or a
 certificate signed by an authorised officer of the Bank shall (save for
 manifest error) be conclusive binding and full evidence on the Borrowers and
 the Corporate Guarantor (and each of them) as to the existence and/or the
 amount of the at any time Outstanding Indebtedness, of any amount due under
 this Agreement, of the applicable Interest Rate or Default Rate or any other
 rate provided for or referred to in this Agreement, the Interest Period, the
 value of additional securities under Clause 8.11(a), the payment or non
 payment of any amount and/or the occurrence of any other Event of Default.
 Any certificate or determination of the Bank as to any rate of interest or any
 other amount pursuant to and for the purposes of any of the Security
 Documents shall, in the absence of manifest error, be conclusive and binding
 on the Borrowers and the Corporate Guarantor.

 


25









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.6

 	
 Computation

 
	
  

 	
  

 
	
  

 	
 All interest and other payments payable by reference to a rate per
 annum under this Agreement shall accrue from day to day and be calculated on
 the basis of actual days elapsed and a 360 day year.

 
	
  

 	
  

 
	
 6.

 	
 REPRESENTATIONS AND WARRANTIES

 
	
  

 	
  

 
	
 6.1

 	
 Continuing representations and warranties

 
	
  

 	
  

 
	
  

 	
 The Borrowers and the Corporate Guarantor jointly and severally
 represent and warrant to the Bank that:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Due Incorporation/Valid Existence

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each of the Borrowers and the other corporate Security Parties is
 duly incorporated and validly existing and in good standing under the laws of
 their respective countries of incorporation as limited liability companies,
 and have power to own their respective property and assets, to carry on their
 respective business as the same are now being lawfully conducted and to
 purchase, own, finance and operate vessels, or, as the case may be, manage
 vessels, as well as to undertake the obligations which such Security Party
 has undertaken or shall undertake pursuant to the Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Due Corporate Authority

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each of the Security Parties has power to execute, deliver and
 perform its obligations under the Security Documents to which it is or is to
 be a party and to borrow the Commitment and in the case of the Corporate
 Guarantor to grant, execute and deliver the Corporate Guarantee and each of
 the other Security Parties has power to execute and deliver and perform its
 obligations under the Security Documents to which it is or is to be a party;
 all necessary corporate, shareholder and other action has been taken to
 authorise the execution, delivery and performance of the same and no
 limitation on the powers of the Borrowers (or any of them) to borrow will be
 exceeded as a result of borrowing the Loan and none of the corporate Security
 Parties has an established or de-facto place of business in any part of the
 United Kingdom or the United States of America;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Litigation

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 no litigation, arbitration, tax claim or administrative proceeding is
 current or pending or (to its or its officers’ knowledge) threatened against
 the Borrowers and the Corporate Guarantor (or any of them) or any other
 Security Party, which, if adversely determined, would have a materially
 adverse effect on the business assets or the financial condition of any of them;

 


26









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No conflict with other obligations

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the execution and delivery of, the performance of its obligations
 under, and compliance with the provisions of, the Security Documents by the
 relevant Security Parties will not (i) contravene any existing applicable
 law, statute, rule or regulation or any judgment, decree or permit to which
 the Borrowers (or any of them) or any other Security Party is subject, (ii)
 conflict with, or result in any breach of any of the terms of, or constitute
 a default under, any agreement or other instrument to which the Borrowers (or
 any of them) or any other Security Party is a party or is subject to or by
 which it or any of its property is bound, (iii) contravene or conflict with
 any provision of the memorandum and articles of association/articles of
 incorporation/bylaws/statutes or other constitutional documents of the
 Borrowers (or any of them) or any other Security Party or (iv) result in the
 creation or imposition of or oblige the Borrowers (or any of them) or any
 other Security Party to create any Encumbrance (other than a Permitted
 Encumbrance) on any of the undertakings, assets, rights or revenues of the
 Borrowers (or any of them) or any other Security Party;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Financial Condition

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the financial condition of the Borrowers (or any of them) and of the
 other Security Parties has not suffered any material deterioration since that
 condition was last disclosed to the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 No Immunity

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 neither the Borrowers nor any other Security Party nor any of their
 respective assets are entitled to immunity on the grounds of sovereignty or
 otherwise from any legal action or proceeding (which shall include, without
 limitation, suit, attachment prior to judgement, execution or other
 enforcement);

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Shipping Company

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each of the Borrowers and the Corporate Guarantor is a shipping
 company involved in the owning or, as the case may be, managing of ships
 engaged in international voyages and earning profits in free foreign
 currency;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Licences/Authorisation

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 


27









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Perfected Securities

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 when duly executed, the Security Documents will create a perfected
 security interest in favour of the Bank, with the intended priority, over the
 assets and revenues intended to be covered, valid and enforceable against
 each of the Borrowers and the other Security Parties;

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 No Notarisation/Filing/Recording

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 save for the registration of any mortgage in the appropriate shipping
 registry, it is not necessary to ensure the legality, validity,
 enforceability or admissibility in evidence of this Agreement or any of the
 other Security Documents that it or they or any other instrument be
 notarised, filed, recorded, registered or enrolled in any court, public
 office or elsewhere or that any stamp, registration or similar tax or charge
 be paid on or in relation to this Agreement or the other Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 Validity and Binding effect

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the Security Documents constitute (or upon their execution - and in
 the case of the relevant Security Parties any mortgage upon its registration
 at the appropriate registry - will constitute) valid and legally binding
 obligations of the relevant Security Parties enforceable against each of the
 Borrowers and the other Security Parties in accordance with their respective
 terms and that there are no other agreements or arrangements which may
 adversely affect or conflict with the Security Documents or the security
 thereby created; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 Valid Choice of Law

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the choice of law agreed to govern this Agreement and/or any other
 Security Document and the submission to the jurisdiction of the courts agreed
 in each of the Security Documents are or will be, on execution of the
 respective Security Documents, valid and binding on each of the Borrowers and
 any other Security Party which is or is to be a party thereto.

 
	
  

 	
  

 	
  

 
	
 6.2

 	
 Initial representations and warranties

 
	
  

 	
  

 
	
  

 	
 The Borrowers and the Corporate Guarantor further jointly and
 severally represent and warrant to the Bank that;

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Direct obligations - Pan Passu

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the obligations of the Borrowers under this Agreement are direct,
 general and unconditional obligations of the Borrowers and rank at least pan
 passu with all other present and future unsecured and unsubordinated
 Indebtedness of the Borrowers with the exception of any obligations which are
 mandatorily preferred by law;

 


28









	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Information 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 all information, accounts, statements of financial position, exhibits
 and reports furnished by or on behalf of any Security Party to the Bank in
 connection with the negotiation and preparation of this Agreement and each of
 the other Security Documents are true and accurate in all material respects
 and not misleading, do not omit material facts and all reasonable enquiries
 have been made to verify the facts and statements contained therein; there
 are no other facts the omission of which would make any fact or statement
 therein misleading and, in the case of accounts and statements of financial
 position, they have been prepared in accordance with generally accepted
 accounting principles which have been consistently applied; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 No Default 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 no Default has occurred and is continuing; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No Taxes

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 no Taxes are imposed by deduction, withholding or otherwise on any
 payment to be made by any Security Party under this Agreement and/or any
 other of the Security Documents or are imposed on or by virtue of the
 execution or delivery of this Agreement and/or any other of the Security
 Documents or any document or instrument to be executed or delivered hereunder
 or thereunder. In case that any Tax exists now or will be imposed in the
 future, it will be borne by the Borrowers; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 No Default under other Indebtedness 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 neither the Borrowers nor any other Security Party is in Default
 under any agreement relating to Indebtedness to which it is a party or by
 which it may be bound; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Ownership/Flag/Seaworthiness/Class/Insurance of the Vessels 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each Vessel on the Drawdown Date will be: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in the absolute and free from Encumbrances (other than in favour of
 the Bank) ownership of the Owner thereof who will on and after her delivery
 be the sole legal and beneficial owner of such Vessel; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 registered in the name of the Owner thereof through the Registry of
 the under the laws of the respective Flag State; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 operationally seaworthy and in every way fit for service; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 classed with a Classification Society member of IACS, which has been
 approved by the Bank in writing and such classification is and will be free 

 


29









	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 of all overdue requirements and recommendations of such
 Classification Society; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 insured in accordance with the provisions of this Agreement and the
 relevant Mortgage; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 managed by the Manager; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 No Charter 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 unless otherwise permitted in writing by the Bank, none of the
 Vessels will on or before the delivery date thereof be subject to any charter
 or contract nor to any agreement to enter into any charter or contract which,
 if entered into after the delivery date thereof would have required the
 consent of the Bank under any of the Security Documents and there will not on
 or before the delivery date thereof be any agreement or arrangement whereby
 the Earnings of the relevant Vessel may be shared with any other person; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 No Encumbrances 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 neither the Vessels (or any of them) nor their/her Earnings,
 Requisition Compensation or Insurances nor any other properties or rights
 which are, or are to be, the subject of any of the Security Documents nor any
 part thereof will, on the Drawdown Date, be subject to any Encumbrances other
 than Permitted Encumbrances. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Compliance with Environmental Laws and Approvals 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 except as may already have been disclosed by the Borrowers in writing
 to, and acknowledged in writing by, the Bank: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 each Borrower and the Manager have complied with the provisions of
 all Environmental Laws; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 each Borrower have obtained all Environmental Approvals and are in
 compliance with all such Environmental Approvals; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 neither the Borrowers (or any of them) nor the Manager has received
 notice of any Environmental Claim that any of the Borrowers is not in
 compliance with any Environmental Law or any Environmental Approval; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 No Environmental Claims 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 except as may already have been disclosed by the Borrowers in writing
 to, and acknowledged in writing by, the Bank: 

 






	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 aa)

 	
 there is no Environmental Claim pending or, to the best of the
 Borrowers’ knowledge and belief, threatened against the 

 


30









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Borrowers (or any of them) or the Vessels (or any of them) or any
 other Relevant Ship reasonably expected to have a material adverse effect on
 the business assets, operations, property or financial condition of any of
 the Borrowers or any other Security Party or on the security created by any
 of the Security Documents; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 bb)

 	
 there has been no emission, spill, release or discharge of a Material
 of Environmental Concern from the Vessels (or any of them) or any other
 Relevant Ship owned by, managed or crewed by or chartered to the Borrowers
 (or any of them) nor to the best of the Borrowers’ knowledge and belief
 (having made due enquiry) from any Relevant Ship which could give rise to an
 Environmental Claim; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 Copies true and complete 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the copies of the MOAs and the Management Agreements delivered or to
 be delivered to the Bank pursuant to Clause 7.3 are, or will when delivered
 be, true and complete copies of such documents; such documents will when
 delivered constitute valid and binding obligations of the parties thereto
 enforceable in accordance with their respective terms and there will have
 been no amendments or variations thereof or defaults thereunder; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 Compliance with the ISM Code 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each Vessel and any Operator complies or will on the drawdown of the
 Commitment or (as the case may be) of the relevant Advance comply with the
 requirements of the ISM Code; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 Compliance with ISPS Code 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each Borrower, following Delivery of its Vessel, will have, a valid
 and current ISSC in respect of such Vessel and each Vessel, following
 Delivery, will be, in full compliance with the ISPS Code; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 No Default under MOA 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 neither of the Borrowers is in default under any of its obligations
 under the relevant MOA; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (o)

 	
 MOA Valid 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the copy of each MOA to be delivered to the Bank shall be a true and
 complete copy of such document constituting valid and binding obligations of
 the parties thereto enforceable in accordance with its terms and no
 amendments thereto or variations thereof shall have been (or will be) agreed
 nor shall any action been 

 


31









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 taken by the parties thereto which would in any way render such
 document inoperative or unenforceable; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (p)

 	
 No Rebates 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 there will be no commissions, rebates premiums or other payments by
 or to or on account of the Borrowers (or any of them) or any other Security
 Party or, to the knowledge of the Borrowers, any other person in connection
 with any MOA other than as shall be disclosed to the Bank by the Borrowers in
 writing. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (q)

 	
 Commercial Interest 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the Corporate Guarantor has a commercial interest in providing its
 Corporate Guarantee under this Agreement because of its close financial
 co-operation and assistance with the Borrowers and because the Borrowers and
 the Corporate Guarantor have common business interests; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (r)

 	
 Money laundering - acting for own account 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each of the Borrowers confirms that it is the beneficiary for each
 part of the Loan made or to be made available to it and it will promptly
 inform the Bank by written notice if it is not, or ceases to be, the
 beneficiary and notify the Bank in writing of the name and the address of the
 new beneficiary/beneficiaries; each of the Borrowers is aware that under
 applicable money laundering provisions, it has an obligation to state for
 whose account the Loan is obtained; each of the Borrowers confirms that, by
 entering into this Agreement and the other Security Documents, it is acting
 on its own behalf and for its own account and it is obtaining the Loan for
 its own account. In relation to the borrowing by the Borrowers of the Loan,
 the performance and discharge of its obligations and liabilities under this
 Agreement or any of the Security Documents and the transactions and other
 arrangements effected or contemplated by this Agreement or any of the
 Documents to which each of the Borrowers is a party, it is acting for its own
 account and that the foregoing will not involve or lead to a contravention of
 any law, official requirement or other regulatory measure or procedure which
 has been implemented to combat “money laundering” (as defined in Article 1 of
 the Directive (91/308/EEC) of the Council of the European Community). 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.3

 	
 Representations Correct 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 At the time of entering into this Agreement all above representations
 and warranties or any other information given by the Borrowers and/or the
 Manager to the Bank are true and accurate. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.4

 	
 Repetition of Representations and Warranties 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The representations and warranties in this Clause 6 (except in
 relation to the representations and warranties in Clause 6.2) shall be deemed
 to be repeated by the Borrowers and the Corporate Guarantor on and as of each
 day from the date of this 

 


32









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Agreement until all moneys due or owing by the Security Parties or
 any of them under this Agreement and the Security Documents have been repaid
 in full as if made with reference to the facts and circumstances existing on
 each such day. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
 CONDITIONS PRECEDENT 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.1

 	
 Conditions concerning corporate authorisations 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to make the Commitment or any part thereof
 available shall be subject to the condition that the Bank, shall have
 received, not later than two (2) Banking Days before the day on which the
 Drawdown Notice in respect of the Commitment (or, in case that more than one
 advance have been agreed in Clause 2.3, in respect of the first Advance) is
 given, the following documents and evidence in form and substance
 satisfactory to the Bank: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 a duly certified true copy of the Articles of Incorporation and
 By-Laws or the Memorandum and Articles of Association, or of any other
 constitutional documents, as the case may be, of each corporate Security
 Party; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 a recent certificate of incumbency of each corporate Security Party
 issued by the appropriate authority and/or at the discretion of the Bank
 signed by the secretary or a director of each of them respectively, stating
 the corporate body which binds every one of them, the officers and/or the
 directors of each of them and containing specimens of their signatures; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 a recent certificate as to the shareholding of any corporate Security
 Party issued by an appropriate authority or, at the discretion of the Bank,
 signed by the secretary or a director of each of them as the case may be,
 stating respectively the full names and addresses of the person or persons
 beneficially entitled as shareholders/ stockholders of the entire issued and
 outstanding shares/ stock of each of them; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 minutes of separate meetings of the directors and shareholders (or of
 any other body which binds them, if any) of any corporate Security Party at
 which there was approved the entry into, execution, delivery and performance
 of this Agreement, the other Security Documents and any other documents
 executed or to be executed pursuant hereto or thereto to which the relevant
 corporate Security Party is a party; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 original of any power(s) of attorney and any further evidence of the
 due authority of any person signing this Agreement, the other Security
 Documents, the Management Agreement and any other documents executed or to be
 executed pursuant hereto or thereto on behalf of any corporate person; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 evidence of the due authority of any person signing this Agreement,
 the Security Documents and any other documents executed or to be executed
 pursuant hereto or thereto on behalf of any corporate person; 

 


33









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 evidence that all necessary licences, consents, permits and
 authorisations (including exchange control ones) have been obtained by any
 Security Party for the execution, delivery, validity, enforceability,
 admissibility in evidence and the due performance of the respective
 obligations under or pursuant to this Agreement and the other Security
 Documents; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 the shareholders of all Security Parties shall be acceptable in all
 respects to the Bank. In the event that the Bank agrees (at its sole
 discretion) that a Security Party may have a corporate shareholder, the
 conditions set out in Sub-clauses (a), (b), (c) and (h) of this Clause 7.1
 shall apply (mutatis mutandis) to such corporate shareholder; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 a certificate as to the Shareholders signed by the Secretary of each
 Borrower and the Corporate Guarantor and stating the full names and addresses
 of the person or persons beneficially entitled as shareholder(s) of the
 entire issued and outstanding shares in each Borrower and the Corporate
 Guarantor; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 any other documents or recent certificates or other evidence which
 would be required by the Bank in relation to any corporate Security Party
 evidencing that the relevant Security Party has been properly established, continues
 to exist validly and to be in good standing, which is the corporate body
 which binds the company, which is its present board of directors and
 shareholders, that the execution and performance of the Security Documents
 has been duly authorised and generally that the representations in Clause 6
 are correct in all respects. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2

 	
 Conditions concerning the Securities 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The obligations of the Bank to advance the Commitment or (if so
 provided in Clause 2.3) any part thereof is subject to the further condition
 that the Bank at the time of receiving a Drawdown Notice shall have received
 the following documents (save for the securities which, due to the
 requirement of their registration in public registries or due to their
 nature, cannot be delivered to the Bank before the relevant Drawdown Notice
 and which will be delivered to the Bank simultaneously with the relevant
 drawdown): 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 each of the Security Documents duly executed and where appropriate
 duly registered with the appropriate registry; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 unless already delivered to the Bank, a copy (certified by the
 Secretary to be true and complete) of resolutions of the Board of Directors
 of the Corporate Guarantor to open and maintain the Earnings Account and such
 mandate forms, signature specimen cards and other documents as the Bank may
 require in connection therewith; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.3

 	
 Conditions concerning the Vessels 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or (if so
 provided in Clause 2.3) any part thereof is subject to the further condition
 that the Bank shall have received prior 

 


34









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 to the relevant drawdown or, where this is not possible,
 simultaneously with the drawdown of the Commitment or the relevant part
 thereof: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 a valuation of the relevant Vessel as at a date determined by the
 Bank but in any event before the relevant drawdown prepared on the basis
 specified in Clause 8.11(b) (but taking into account of any Approved
 Charterparty) by major shipbrokers appointed and/or approved by the Bank
 evidencing that the value of relevant Vessel is at least 115% of the amount
 of/ the Advance relative to such Vessel and otherwise in form and substance
 satisfactory to the Bank in its sole discretion; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 evidence that, prior to or simultaneously with the relevant drawdown,
 each Vessel will be duly registered in the ownership of its Owner through the
 Registry under the respective Flag State, free from any Encumbrances save for
 those in favour of the Bank and otherwise as contemplated herein and free of
 any charter; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 evidence in form and substance satisfactory to the Bank that each of
 the relevant Vessels has been or will - on drawdown - be insured in
 accordance with the insurance requirements provided for in this Agreement and
 the other Security Documents (including Mortgagee’s Interest Insurance) to be
 followed by full copies of cover notes, policies, certificates of entry or
 other contracts of insurance; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 copy of a Management Agreement in form and substance satisfactory to
 the Bank between the Owner of each of the relevant Vessels and the Manager; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 all necessary confirmations by insurers of each of the relevant
 Vessels that they will issue letters of undertaking and endorse notice of
 assignment and loss payable clauses on the Insurances, in form and substance
 satisfactory to the Bank in its sole discretion; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 evidence that each of the relevant Vessels is classed 100 Al with
 Lloyd’s Register of Shipping, or to a similar standard with another classification
 society of like standing to be specifically approved by the Bank, and remains
 free from recommendations, notations or average damage affecting class; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 evidence that the trading certificates of each of the relevant
 Vessels are valid and in force; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 due authorisation in form and substance satisfactory to the Bank
 authorising the Bank to have access and/or obtain any copies of class records
 or other information at its discretion from the Classification Society of
 each of the relevant Vessel(s); 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 a copy of the relevant MOA certified as true and complete by the
 legal counsel of the Borrowers; 

 


35









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 evidence to the full satisfaction of the Bank, proving the relevant
 Seller’s title to the respective Vessel free of any Encumbrances, debts or
 claims of any nature whatsoever; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 duly certified copies of corporate documentation of the relevant
 Seller - comparable at the discretion of the Bank to that provided in Clause
 7.1 - proving the due incorporation and existence of the relevant Seller and
 the due authorisation of the sale of the respective Vessel and the execution
 of all documents required in connection therewith; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 duly certified copy of the Bill of Sale, the protocol of delivery and
 acceptance of the relevant Vessel as well as of all other relevant Seller’s
 documents. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 evidence that no Encumbrances are registered against any of the
 Vessels on her previous register; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 evidence that the purchase price of the Vessels has been (or upon her
 delivery will have been) paid in full in accordance with the provisions of
 the MOA; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (o)

 	
 a copy of the DOC applicable to each Vessel and of the SMC applicable
 to the Manager certified as true and in effect by the Manager; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (p)

 	
 copies of such ISM Code Documentation as the Bank may by written
 notice to the Borrowers have requested not later than two (2) days before the
 Drawdown Date certified as true and complete in all material respects by the
 Borrowers and the Manager; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (q)

 	
 true and complete copy of the ISSC of the Vessel issued pursuant to
 the ISPS Code. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.4

 	
 No change of circumstances 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or (if so
 provided in Clause 2.3) any part thereof is subject to the further condition
 that at the time of the giving of a Drawdown Notice and on advancing the
 Commitment or (if it has been so agreed in Clause 2.3) on the making of the
 Advance to which such Drawdown Notice relates: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the representations and warranties set out in Clause 6 and in each of
 the Security Documents are true and correct on and as of each such time as if
 each was made with respect to the facts and circumstances existing at such
 time; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 no Event of Default shall have occurred and be continuing or would
 result from the drawdown; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Bank shall be satisfied that there has been no change in the
 ownership, management, operations and/or adverse change financial condition
 of any Security Party which (change) might, in the sole opinion of the Bank,
 be detrimental to the interests of the Bank. 

 


36









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.5

 	
 General
 Conditions 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or (if so
 provided in Clause 2.3) any part thereof is subject to the further condition
 that the Bank, prior to or simultaneously with the drawdown, shall have
 received: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 opinions from lawyers appointed by the Bank as to all the matters
 referred to in Clauses 6.1(a) and (b) and all such aspects of law as the Bank
 shall deem relevant to this Agreement and the other Security Documents and
 any other documents executed pursuant hereto or thereto and any further legal
 or other expert opinion as the Bank at its sole discretion may require; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 confirmation from any agents nominated in this Agreement and
 elsewhere in the other Security Documents for the acceptance of any notice or
 service of process, that they consent to such nomination; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 a receipt in writing in form and substance satisfactory to the Bank
 including an acknowledgement and admission of the Borrowers and/or any, other
 Security Party to the effect that the Commitment or relevant part thereof,
 (as the case may be) was drawn by the Borrowers and a declaration by the
 Borrowers and the Corporate Guarantor that all conditions precedent have been
 fulfilled, that there is no Event of Default and that all the representations
 and warranties are true and correct. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.6

 	
 Know your
 customer and money laundering compliance 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or any part
 thereof is subject to the further condition that the Bank, prior to or
 simultaneously with the drawdown, shall have received, to the extent required
 by any change in applicable law and regulation or any changes in the Bank’s
 own internal guidelines since the date on which the applicable documents and
 evidence were delivered to the Bank pursuant to Clause 8.1(f), such further
 documents and evidence as the Bank shall require to identify the Borrower and
 the other Security Parties and any other persons involved or affected by the
 transaction(s) contemplated by this Agreement. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.7

 	
 Further
 documents 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Without prejudice to the provisions of this Clause 7 the Borrowers
 and the Corporate Guarantor hereby undertakes with the Bank to make or
 procure to be made such amendments and/or additions to any of the documents
 delivered to the Bank in accordance with this Clause 7 and to execute and/or
 deliver to the Bank or procure to be executed and/or delivered to the Bank
 such further documents as the Bank and its legal advisors may reasonably
 require to satisfy themselves that all the terms and requirements of this
 Agreement have been complied with. 

 


37









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.8

 	
 Conditions subsequent 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers shall pay to the Bank the arrangement fee referred to
 in Clause 10.9 within thirty (30) days from the date hereof; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 In the event of any of the conditions referred to in this Clause 7
 not being satisfied (whether with the express or implied agreement of the
 Bank or otherwise) and the Bank nevertheless makes the Commitment (or any
 part thereof) available to the Borrowers, the Borrowers will comply or
 procure compliance with all such conditions by no later than fourteen (14)
 days after the Drawdown Date or within such longer period as the Bank shall
 agree to. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 COVENANTS 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 It is hereby undertaken by the Borrowers and the Corporate Guarantor
 that, from the date of this Agreement and as long as any money is due and/or
 owing and/or outstanding under this Agreement or any of the other Security
 Documents, the Borrowers and the Corporate Guarantor will: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1

 	
 Information Covenants 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Annual financial Statements 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 furnish the Bank, in form and substance satisfactory to the Bank,
 with annual, audited (by auditors acceptable to the Bank) financial
 statements of the Borrowers and the Corporate Guarantor at latest within 180
 days after the end of the financial year concerned, prepared in accordance
 with generally accepted accounting principles consistently applied; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Financial Information 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provide the Bank annually and from time to time as the Bank may
 request and in form and substance satisfactory to the Bank with information
 on the financial conditions, cash flow position, commitments and operations
 of the Borrowers, the Corporate Guarantor/Manager including cash flow
 analysis and voyage accounts of any Vessels owned by any such party with a
 breakdown of income and running expenses showing net trading profit, trade
 payables and trade receivables, such financial details to be certified by one
 of the directors of the Borrowers as to their correctness; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Information on adverse change or Default 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 promptly inform the Bank of any occurrence which came to the
 knowledge of the Borrowers and/or the Corporate Guarantor which might
 adversely affect the ability of any of the Borrowers or any other Security
 Party to perform its respective obligations under this Agreement and/or any
 of the other Security Documents and of any Default forthwith upon becoming
 aware thereof; 

 


38









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Information on the employment of the Vessels 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provide the Bank from time to time as the Bank may request with
 information on the employment of the Vessels as well as on the terms and
 conditions of any charterparty, contract of affreightment, agreement or
 related document in respect of the employment of the Vessels, such
 information to be certified by one of the directors of the Borrowers as to
 their correctness; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Know your customer and money laundering compliance 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.2

 	
 Banking operations 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ensure that all banking operations in connection with the Vessels are
 carried out through the Lending Branch of the Bank; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.3

 	
 No Further Financial Exposure 

 
	
  

 	
  

 
	
  

 	
 without the prior written consent of the Bank: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 No further Indebtedness

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 incur no further Indebtedness nor authorise or accept any capital
 commitments (other than that normally associated with the day to day
 operations of their business) nor enter into any agreement for payment on
 deferred terms or hire agreement without the prior written consent of the
 Bank; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 No Loans 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not make any loans or advances to, or any investments in any person,
 firm, corporation, joint venture or other entity including (without
 limitation) any loan or advance to any officer, director, stockholder or
 employee or any other company managed by the Manager directly or through the
 managers of the Vessels; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 No Dividends 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not declare or pay any dividends or other distribution upon any of
 the issued shares or otherwise dispose of any assets to any of the
 shareholders of the Borrowers, without the prior written consent of the Bank;
 and 

 


39









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No Payments 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 except pursuant to this Agreement and the Security Documents (or as
 expressly permitted by the same) not pay out any funds to any company or
 person except in connection with the administration of the Borrowers and the
 Corporate Guarantor and the operation and/or repair of the Vessels; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.4

 	
 Maintenance of Business Structure 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Maintenance of Business Structure 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not change the nature, organisation and conduct of the business of
 the Borrowers as owners of the Vessels or as managers of vessels as the case
 may be, or carry on any business other than the business carried on at the
 date of this Agreement; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Maintenance of Legal Structure 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 that none of the documents defining the constitution of any of the
 Borrowers and the Corporate Guarantor shall be altered in any manner
 whatsoever without the prior written consent of the Bank; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Control 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that no voluntary change shall be made in the ultimate
 beneficial ownership, control or management of any of the Borrowers and the
 Corporate Guarantor or of any of the Vessels without the prior written
 consent of the Bank; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No merger 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not merge or consolidate with any other company or person;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Subsidiaries 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not form or acquire any Subsidiaries; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Share capital and distribution 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not purchase or otherwise acquire for value any shares of its capital
 or distribute any of its present or future assets, undertakings, rights or
 revenues to any of its shareholders; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.5

 	
 No Subordination 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ensure that the indebtedness of the Borrowers and the Corporate
 Guarantor to the Bank hereunder will not be subordinated in priority of
 payment to any other present or future indebtedness; 

 


40









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.6

 	
 Maintenance of Assets 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 No Transfer of Assets 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not convey, assign, transfer, sell or otherwise dispose of or deal
 with any of their real or personal property, assets or rights, whether
 present or future, without the prior written consent of the Bank; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 No Encumbrance of Assets 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not allow any part of its undertaking, property, assets or rights,
 whether present or future, to be mortgaged, charged, pledged, used as a lien
 or otherwise encumbered without the prior written consent of the Bank. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.7

 	
 Covenants Concerning the Vessels 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Ownership/Management/Control 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that the Vessels will maintain their present ownership,
 management, control and ultimate beneficial ownership; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Class 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that the Vessels will remain in class free of overdue
 recommendations, notations or average damage affecting class and provide the
 Bank on demand with copies of all class and trading certificates of the
 Vessels; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Insurances 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 maintain all Insurances of the Vessels and comply with all insurance
 requirements specified in this Agreement and the Mortgages and in case of
 failure to maintain the Vessels so insured authorise the Bank (and such
 authorisation is hereby expressly given to the Bank) to have the right but
 not the obligation to effect such Insurances on behalf of the Owner (and in
 case that any of the Vessels remains in port for an extended period to effect
 port risks Insurances at the cost of the Borrowers which, if paid by the
 Bank, shall be Expenses); 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Transfer/Encumbrances 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not without the prior written consent of the Bank sell or otherwise
 dispose of any of the Vessels or any share therein or create or agree to
 create or permit to subsist any Encumbrance over the Vessel (or any share or
 interest therein) other than Permitted Encumbrances;; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Not imperil Flag, Ownership, Insurance 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that each of the Vessels is maintained and trades in
 conformity with the laws of the flag of the respective Vessel, of its owning
 company or of the 

 


41









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 nationality of the officers, the requirements of the Insurances and
 nothing is done or permitted to be done which could endanger the flag of the
 respective Vessel or its unencumbered (other than Permitted Encumbrances)
 ownership or its Insurances; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Mortgage Covenants 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 always comply with all the covenants provided for in the mortgage on
 each of the Vessels; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Charter 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not without the prior written consent of the Bank enter into a charterparty,
 contract of affreightment, agreement or related document in respect of the
 employment of the vessels (i) for a period for more than 12 months or (ii)
 below the market rate prevailing at the time when the respective Vessel is
 fixed in or on terms which are not in accordance with the commercial practice
 prevailing at the relevant time or (iii) on demise charterparty; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Charter Assignment 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 execute and deliver to the Bank within fifteen (15) days of signing
 of any charter, the duration of which is agreed to be for a period, directly
 or by extension more than twelve (12) months, (a) a specific assignment of
 such charter in form and substance satisfactory to the Bank and (b) a notice
 of any such assignment addressed to the relevant charterer and endorsed with
 an acknowledgement of receipt by the relevant charterer (servable upon the
 happening of an Event of Default) all in form and substance satisfactory to
 the Bank or (c) alternatively at the discretion of the Bank, a copy of irrevocable
 instructions of the Owner of the respective Vessel to the charterer for the
 payment of the hire to the Bank and/or a copy of the charterparty with
 appropriate irrevocable notation; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Compliance with Environmental Laws 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 to comply with, and procure that all Environmental Affiliates of the
 Borrowers comply with, all Environmental Laws including without limitation,
 requirements relating to manning and establishment of financial
 responsibility and to obtain and comply with, and procure that all
 Environmental Affiliates of the Borrowers obtain and comply with, all
 Environmental Approvals and to notify the Bank forthwith: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 of any Environmental Claim for an amount or amounts exceeding
 $1,000,000 made against either Vessel and/or the Owner thereof; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 upon becoming aware of any incident which may give rise to an
 Environmental Claim and to keep the Bank advised in writing of the Owner’s
 response to such Environmental Claim on such regular basis and in such detail
 as the Bank shall require. 

 


42









	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 Compliance with ISM Code and ISPS Code 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 will procure that the Manager and any Operator: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 will comply with and ensure that each Vessel and any Operator
 complies with the requirements of the ISM Code, including (but not limited
 to) the maintenance and renewal of valid certificates pursuant thereto
 throughout the Security Period; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 immediately inform the Bank if there is any threatened or actual
 withdrawal of the Borrowers’, the Manager’s or an Operator’s DOC or the SMC
 in respect of the Vessels (or any of them); and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 promptly inform the Bank upon the issue to the Borrowers (or any of
 them), the Manager or any Operator of a DOC and to any of the Vessels of an
 SMC or the receipt by the Borrowers (or any of them), the Manager or any
 Operator of notification that its application for the same has been realised;
 and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 (aa) will maintain at all times a valid and current ISSC in respect
 of each Vessel, (bb) immediately notify the Bank in writing of any actual or
 threatened withdrawal, suspension, cancellation or modification of the ISSC
 in respect of any Vessel and (cc) procure that each Vessel will comply at all
 times with the ISPS Code. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.8

 	
 Observance of Covenants 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Use of the Loan 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 use the Loan exclusively for the purposes specified in this
 Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Compliance with Covenants

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 duly and punctually perform all obligations under this Agreement and
 the other Security Documents; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Payment on Demand 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 pay to the Bank on demand any sum of money which is payable by the
 Borrowers to the Bank under this Agreement but in respect of which it is not
 specified in any other Clause when it is due and payable; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Evidence of Compliance 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 upon request by the Bank from time to time provide such information
 and evidence to the Bank as the Bank would reasonably require to demonstrate
 compliance with the covenants and undertakings set forth in this Agreement
 and any other Security Document; 

 


43









	
  

 	
  

 	
  

 
	
 8.9

 	
 Validity of
 Securities

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Validity

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure and procure that all governmental or other consents required
 by law and/or any other steps required for the validity, enforceability and
 legality of this Agreement and the other Security Documents are maintained in
 full force and effect and/or appropriately taken;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Earnings

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure and procure that, unless and until directed by the Bank
 otherwise (i) all the Earnings of the Vessels shall be paid to the Earnings
 Account and (ii) the persons from whom the Earnings are from time to time due
 are irrevocably instructed to pay them to the Earnings Account in accordance
 with the provisions hereof and of the relevant Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Taxes

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 pay all Taxes, assessments and other governmental charges when the
 same fall due, except to the extent that the same are being contested in good
 faith by appropriate proceedings and adequate reserves have been set aside
 for their payment if such proceedings fail; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Additional Documents

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 from time to time at the request of the Bank execute and deliver to
 the Bank or procure the execution and delivery to the Bank of all such
 documents as shall be deemed desirable at the reasonable discretion of the
 Bank for giving full effect to this Agreement, and for perfecting, protecting
 the value of or enforcing any rights or securities granted to the Bank under
 any one or more of this Agreement, the other Security Documents and any other
 documents executed pursuant hereto or thereto and in case that any Conditions
 Precedent have not been fulfilled prior to the Drawdown, such Conditions
 shall be complied with within fifteen (15) days of Drawdown (unless the Bank
 agrees otherwise in writing) and failure to comply with this Covenant shall
 be an Event of Default;

 
	
  

 	
  

 	
  

 
	
 8.10

 	
 Covenants for the Security Parties

 
	
  

 	
  

 
	
  

 	
 ensure and procure that all other Security Parties and each of them
 duly and punctually comply, with the covenants in Clauses 8.1 to 8.9 which
 are applicable to them mutatis mutandis.

 
	
  

 	
  

 	
  

 
	
 8.11

 	
 Market Value to Debt Ratio-Additional Security - Valuation of the
 Vessels

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers and the Corporate Guarantor hereby jointly and
 severally undertake that the aggregate of (i) the aggregate Market Values of
 the Mortgaged Vessels (determined in accordance with Clause 8.11(b)) and (ii)
 the value in 

 


44









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Dollars of any additional security given under this clause and
 accepted by the Bank (at its discretion) shall be at least equal to of the
 Security Requirement at the relevant time and if at any relevant time the
 aggregate of the Market Values of the Mortgaged Vessels (together with the
 value in Dollars of any additional security given under this clause and
 accepted by the Bank (at its discretion)) is less than the Security Requirement,
 they will within fifteen (15) Banking Days of being advised by the Bank of
 such event either:

 






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 provide the Bank with such additional security as shall in the
 opinion of the Bank be adequate to make up such deficiency and which shall
 take such form and shall be constituted by such documentation and be entered
 into between such parties as the Bank in its absolute discretion may approve
 or require (and, if the Borrowers do not make proposals satisfactory to the
 Bank in relation to such additional security within the aforesaid period of
 fifteen (15) Banking Days of the date of the Bank’s notification to the
 Borrowers aforesaid, the Borrowers shall be deemed to have elected to prepay
 in accordance with sub-clause (ii) below), or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 prepay (in accordance with Clause 4.2 (but without regard to the
 requirement for ten (10) days notice) such amount of the Loan as will ensure
 that the aggregate Market Value (determined as aforesaid) of the Mortgaged
 Vessels and any such additional security is after such prepayment at least
 equal to 115% of the Loan.

 






	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Such additional security shall be constituted by:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 aa)

 	
 additional pledged cash deposits in favour of the Bank in an amount
 equal to such shortfall with a bank and in an account and manner to be
 determined by the Bank; and/or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 bb)

 	
 any other security acceptable to the Bank to be provided in a manner
 determined by the Bank;

 






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Any such additional security provided by the Bank shall be released
 by the Bank once the Security Requirement ratio has been restored. The
 provisions of Clause 4.3 and 4.4 shall apply to prepayments under Clause
 8.11(a);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, however, that the obligation of
 the Borrowers to maintain the Security Requirement/Security Value ratio as
 set forth in this clause 8.11(a) shall not be in effect so long as both the
 Vessels are chartered under Approved Charterparties.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 For the purpose of this Clause 8.11 the Market Value of a Mortgaged
 Vessel shall be determined (at the expense of the Borrowers) at any such time
 as the Bank may reasonably consider to be necessary or useful by means of one
 valuation made by such first class independent sale and purchase shipbrokers
 as may from time to time be selected by the Borrowers and approved by the
 Bank. For this purpose, such valuation shall be made with or without physical
 inspection of the relevant Mortgaged Vessel (at the absolute discretion of
 the Bank) on the basis of a sale 

 


45









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 for prompt delivery for cash at arm’s length on normal commercial
 terms as between a willing seller and a willing buyer, but without taking
 into account any existing charter in respect of such Mortgaged Vessel. The
 Bank and the Borrowers each agrees to accept such valuation made by the
 shipbroker appointed as aforesaid as conclusive evidence of the Market Value
 of the relevant Mortgaged Vessel at the date of such valuation. Each of the
 Borrowers agrees to supply the Bank and any shipbroker appointed as aforesaid
 with such information concerning each of the Mortgaged Vessels and her
 condition as such shipbroker may reasonably require for the purpose of making
 such valuation;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Valuation of additional security

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the purpose of this Clause 8.11, the market value of any
 additional security provided or to be provided to the Bank shall be
 determined by the Bank in its absolute discretion without any necessity for
 the Bank assigning any reason thereto provided, always, that if the
 additional security is in the form of a collateral vessel such collateral
 vessel shall be valued in accordance with the provisions of Clause 8.11(b) or
 if the additional security is in form of a cash deposit full credit shall be
 given for such cash deposit on a Dollar for Dollar basis; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Documents and evidence

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In connection with any additional security provided in accordance
 with this Clause 8.11, the Bank shall be entitled to receive such evidence
 and documents as may in the Bank’s reasonable opinion be appropriate and such
 favourable legal opinions as the Bank shall in its absolute discretion
 require.

 






	
  

 	
  

 	
  

 
	
 8.12

 	
 Additional Security

 
	
  

 	
  

 
	
  

 	
 The Borrowers and the Corporate Guarantor hereby jointly and
 severally undertake to procure and ensure that upon the Bank’ first demand,
 each of the Collateral Owners will sign, execute and deliver in favour of the
 Bank its irrevocable and unconditional guarantee (the “Collateral Guarantee(s)”)
 in security of all the obligations of the Borrowers under the Loan Agreement
 and in security of its obligations under the Guarantee such Collateral Owner
 will sign, execute and deliver and, where appropriate, register in favour of
 the Bank (i) a second or, as the case may be, third preferred Greek ship
 mortgage (the “Collateral Mortgage(s)”) on its Collateral Vessel and a
 second or, as the case may be, third priority General Assignment (the “Collateral
 General Assignment(s)”) in respect of such Collateral Vessel in
 favour of the Bank, as well as all other documents relevant to such
 Collateral Mortgage and Collateral General Assignment, all in form and
 substance satisfactory to the Bank; provided, that this undertaking
 shall cease to be in effect upon the granting of a Corporate Guarantee by a
 holding company which shall be the sole shareholder of (inter alios) the
 Borrowers and other shipping companies of vessels managed by the Corporate
 Guarantor, provided, however, that the substitution of the aforesaid
 security by such Corporate Guarantee by the Bank shall be at the sole
 discretion of the Bank.

 


46









	
  

 	
  

 	
  

 
	
 9.

 	
 EVENTS OF DEFAULT

 
	
  

 	
  

 
	
  

 	
 There shall be an Event of Default whenever an event described in
 Clauses 9.1 to 9.8 occurs:

 
	
  

 	
  

 
	
 9.1

 	
 Non Performance of Obligations

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the Borrowers (or any of them) fail(s) to pay any sum due under this
 Agreement and/or any of the other Security Documents at the time, in the
 currency and in the manner stipulated herein and/or any of the other Security
 Documents, or, in the case of any sum payable on demand, within three (3)
 Banking Days of such demand; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the Borrowers (or any of them) fail(s) to observe and perform any one
 or more of the covenants, terms or obligations contained in this Agreement
 and the Mortgages and/or any other Security Document relating to the
 Insurances; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Borrowers (or any of them) commit(s) any breach of or omits to
 observe any of the covenants, terms, obligations or undertakings under this
 Agreement and/or any of the other Security Documents (other than failure to
 pay any sum when due or to comply with any obligation concerning the
 Insurances) and, in respect of any such breach or omission which in the
 opinion of the Bank is capable of remedy, such action as the Bank may require
 shall not have been taken within fourteen (14) days of the Bank notifying the
 Borrowers of such required action to remedy the breach or omission; or

 
	
  

 	
  

 	
  

 
	
 9.2

 	
 Events affecting the Borrowers

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 any of the Borrowers is adjudicated or found bankrupt or insolvent or
 any judgement or order is made by any competent court or resolution passed by
 any of the Borrowers or petition (which is not in the reasonable opinion of
 the Bank frivolous and is not being contested in good faith by such Security
 Party) presented for the winding-up or dissolution of any of the Borrowers or
 for the appointment of a liquidator, trustee, administrator or conservator of
 the whole or any part of the undertakings, assets, rights or revenues of any
 of the Borrowers; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any of the Borrowers becomes or is deemed to be insolvent or suspends
 payment of its debts or is (or is deemed to be) unable to or admits inability
 to pay its debts as they fall due or proposes or enters into any composition
 or other arrangement for the benefit of its creditors generally or
 proceedings are commenced in relation to any of the Borrowers under any law,
 regulation or procedure relating to reconstruction or readjustment of debts;
 or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 an encumbrancer takes possession or a receiver or similar officer is
 appointed of the whole or any part of the undertakings, assets, rights or
 revenues of any of the Borrowers or a distress, execution, sequestration or
 other process is levied or enforced upon or sued out against any of the
 undertakings, assets, rights or 

 


47









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 revenues of any of the Borrowers and is not discharged within
 fourteen (14) days; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 all or a material part of the undertakings, assets, rights or
 revenues of any of the Borrowers are seized, nationalised, expropriated or
 compulsorily acquired by or under the authority of any government; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 any event occurs or proceeding is taken with respect to any of the
 Borrowers in any jurisdiction to which it is subject which has an effect
 equivalent or similar to any of the events mentioned in Clauses 9.2(a) to
 9.2(d); or

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 any of the Borrowers suspends or ceases or threatens to suspend or
 cease to carry on its business; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 there occurs, in the reasonable opinion of the Bank, a materially
 adverse change in the financial condition of any of the Borrowers; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 any other event occurs or circumstances arise which, in the
 reasonable opinion of the Bank, is likely materially and adversely to affect
 either (i) the ability of any of the Borrowers to perform all or any of its
 obligations under or otherwise to comply with the terms of this Agreement
 and/or any of the other Security Documents, or (ii) the security created by
 this Agreement and/or any of the Security Documents; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 there is any voluntary change in the Borrowers’ and/or in the
 Manager’s ultimate beneficial ownership of the shares in any of the
 Borrowers; or

 
	
  

 	
  

 	
  

 
	
 9.3

 	
 Representations Incorrect

 
	
  

 	
  

 
	
  

 	
 any representation or warranty made or deemed to be made or repeated
 by or in respect of the Borrowers in or pursuant to this Agreement or any of
 the other Security Documents or in any notice, certificate or statement
 referred to in or delivered under this Agreement or any of the other Security
 Documents is or proves to have been incorrect in any material respect; or A

 
	
  

 	
  

 
	
 9.4

 	
 Cross-default

 
	
  

 	
  

 
	
  

 	
 any Indebtedness of any Security Party is not paid on its due date or
 within any period of grace specified in the contract evidencing the original
 terms of such Indebtedness or, if repayable on demand, shall not be repaid on
 demand or, being a guarantee, is not honoured when first demanded or becomes
 due or capable of being declared due prior to its stated date of payment
 unless the same is being contested in good faith and the Bank is satisfied
 that the same does not and will not affect the performance by the Borrowers
 (or either of them) of their/its obligations under this Agreement and the
 Security Documents; or

 


48









	
  

 	
  

 	
  

 
	
 9.5

 	
 Events affecting the Security Documents

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 this Agreement or any of the other Security Documents shall at any
 time and for any reason become invalid or unenforceable or otherwise cease to
 remain in full force and effect, or if the validity or enforceability of any
 of the Security Documents shall at any time and for any reason be contested
 by any party thereto (other than the Bank), or if any such party shall deny
 that it has any, or any further, liability thereunder or it becomes
 impossible or unlawful for any of the Borrowers to fulfil any of its
 covenants and obligations contained in this Agreement or any of the Security
 Documents or for the Bank to exercise the rights vested in it thereunder or
 otherwise; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any consent, authorisation, licence or approval of, or registration
 with or declaration to, governmental or public bodies or authorities or
 courts required by any of the Borrowers to authorise or otherwise in
 connection with, the execution, delivery, validity, enforceability or
 admissibility in evidence of this Agreement and/or any of the other Security
 Documents or the performance by any of the Borrowers of its obligations under
 this Agreement and/or any of the other Security Documents is modified in a
 manner unacceptable to the Bank or is not granted or is revoked or terminated
 or expires and is not renewed or otherwise ceases to be in full force and
 effect; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any Encumbrance in respect of any of the property (or part thereof)
 which is the subject of the Security Documents (or any of them) is enforced;
 or

 
	
  

 	
  

 	
  

 
	
 9.6

 	
 Events concerning the Security Parties

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 any Security Party (other than the Borrowers) fails to pay any sum
 due from it under this Agreement and/or any of the Security Documents when
 due, or, in the case of any sum payable on demand, within three (3) Banking
 Days of demand; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any Security Party (other than the Borrowers) fails to observe and
 perform any one or more of the covenants, terms or obligations contained in
 this Agreement and the Mortgages and/or the other Security Documents relating
 to the Insurances; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any Security Party (other than the Borrowers) commits any breach of
 or omits to observe any of the covenants, terms, obligations or undertakings
 expressed to be assumed by it under this Agreement and/or any of the Security
 Documents (other than failure to pay any sum when due or to observe or
 perform obligations relating to the Insurances) and, in respect of any such
 breach or omission which in the opinion of the Bank is capable of remedy,
 such action as the Bank may require shall not have been taken within fourteen
 (14) days of the Bank notifying the relevant Security Party, of such required
 action to remedy the breach or omission; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any representation or warranty made or deemed to be made or repeated
 by or in respect of any Security Party (other than the Borrowers) in or
 pursuant to this 

 


49









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Agreement or any of the other Security Documents or in any notice,
 certificate or statement referred to in or delivered under this Agreement or
 any of the other Security Documents is or proves to have been incorrect in
 any material respect; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 any of the events referred to in Clauses 9.2 to 9.5 occurs (amended
 as appropriate) in relation to any Security Party (other than the Borrowers);
 or

 
	
  

 	
  

 	
  

 
	
 9.7

 	
 Environmental Events

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 any Security Party and/or any other Relevant Party and/or any of
 their respective Environmental Affiliates fails to comply with any
 Environmental Law or any Environmental Approval or any of the Vessels or any
 other Relevant Ship is involved in any incident which gives rise or which may
 give rise to any Environmental Claim, if in any such case, such non
 compliance or incident or the consequences thereof could (in the reasonable
 opinion of the Bank) be expected to have a material adverse effect on the
 business assets, operations, property or financial condition of any of the
 Borrowers or any other Security Party or on the security created by any of
 the Security Documents; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any Security Party or any other person fails or omits to comply with
 any requirements of the protection and indemnity association or other insurer
 with which any of the Vessels is entered for insurance or insured against
 protection and indemnity risks (including oil pollution risks) to the effect
 that any cover (including without limitation, liability for Environmental
 Claims arising in jurisdictions where any of the Vessels operates or trades)
 is or may be liable to cancellation, qualification or exclusion at any time.

 
	
  

 	
  

 	
  

 
	
 9.8

 	
 Events Concerning the Vessels

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 either Vessel becomes a Total Loss unless:

 






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the Bank shall have received within sixty (60) days after the
 occurrence of the event giving rise to such total Loss confirmation from the
 relevant underwriter that such Total Loss is an insured event and constitutes
 a valid claim against such underwriters; and

 
	
  

 
	
  

 	
  

 	
 (ii)

 	
 after receipt of such confirmation the Bank shall have received
 within one hundred and eighty days (180) after the occurrence of such event,
 the insurance proceeds in an amount equal to the amount for which the Vessel
 was required to be insured in accordance with the provisions of this
 Agreement immediately prior to the event giving rise to such Total Loss; or

 
	
  

 
	
  

 	
 (b)

 	
 either Vessel ceases to be managed by the Manager (for any reason
 other than the reason of a Total Loss or sale of such Vessel) with the
 approval of the Bank and the Borrowers fail to appoint an Manager within two
 (2) days after the termination of the Management Agreement with the previous
 Manager; or

 


50









	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any of the Vessels is arrested, confiscated, seized, taken in
 execution, impounded, forfeited, detained in exercise or purported exercise
 of any possessory lien or other claim and the Borrowers shall fail to procure
 the release of such Vessel within a period of twenty one (21) days
 thereafter; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 the registration of any of the Vessels under the laws and flag of her
 Flag State is cancelled or terminated without the prior written consent of
 the Bank or, if a Vessel is only provisionally registered on the delivery
 date for such Vessel and is not permanently registered under the laws and
 flag of her Flag State at least thirty (30) days prior to the deadline for
 completing such permanent registration;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 the Flag State of any of the Vessels becomes involved in hostilities
 or civil war or there is a seizure of power in such Flag State by
 unconstitutional means or is occupied by any other power and, in any such
 case, such event could in the opinion of the Bank reasonably be expected to
 have a material adverse effect on the security constituted by any of the
 Security Documents; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 any of the Owners or any other person fails or omits to comply with
 any requirements of the protection and indemnity association or other insurer
 with which any of the Vessels is entered for insurance or insured against
 protection and indemnity risks (including oil pollution risks) to the effect
 that any cover (including, without limitation, any cover in respect of
 liability for Environmental Claims arising in jurisdiction where any of the
 Vessels operates or trades) is or may be liable to cancellation,
 qualification or exclusion at any time; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 (without prejudice to the generality of Sub-Clause 9.1(b) and (c))
 for any reason whatsoever the provisions of Clause 8.7(j)(i), (ii) and (iii)
 are not complied with and/or any of the Vessels ceases to comply with the ISM
 Code; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 (without prejudice to the generality of sub-Clause 9.1(b) and (c))
 for any reason whatsoever the provisions of Clause 8.7(j)(iv) are not
 complied with and/or any Vessel ceases to comply with the ISPS Code; or

 
	
  

 	
  

 	
  

 
	
 9.9

 	
 Consequences of Default

 
	
  

 	
  

 
	
  

 	
 The Bank may without prejudice to any other rights of the Bank (which
 will continue to be in force concurrently with the following), at any time
 after the happening of an Event of Default:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 by notice to the Borrowers declare that the obligation of the Bank to
 make the Commitment available shall be terminated, whereupon the Commitment
 shall be reduced to zero forthwith; and/or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 by notice to the Borrowers declare that the Loan and all interest and
 commitment commission accrued and all other sums payable under this Agreement
 and the other Security Documents have become due and payable, whereupon the
 same shall, immediately or in accordance with the terms of such notice,
 become due and payable without any further diligence, presentment, demand of
 payment, 

 


51









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 protest or notice or any other procedure from the Bank which are
 expressly waived by the Borrowers; and/or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 put into force and exercise all or any of the rights, powers and
 remedies possessed by it under this Agreement and/or under any other Security
 Document and/or as mortgagee of the Vessels, mortgagee, chargee or assignee
 or as the beneficiary of any other property right or any other security (as
 the case may be) of the assets charged or assigned to it under the Security
 Documents or otherwise (whether at law, by virtue of any of the Security
 Documents or otherwise);

 
	
  

 	
  

 	
  

 
	
  

 	
 provided, that if an event occurs in respect
 of the Borrowers (or any of them) of the type described in Clause 9.2(a) to
 (e) (except only in the case when a petition was presented or proceedings
 were commenced or a suit or writ were issued by a third party and in the case
 that such events relate to only a part of the undertakings, assets, rights or
 revenues which in the opinion of the Bank does not affect the ability of the
 Borrowers to perform their respective obligations under this Agreement and/or
 the Security Documents) the obligation of the Bank to make the Commitment
 available shall terminate immediately upon receipt by the Bank of the
 relevant information (as such receipt shall be conclusively certified by a
 certificate of the Bank) and all amounts payable under sub-clause 9.9(b)
 above shall become immediately due and payable without any notice or other
 formality which is hereby expressly waived by each of the Borrowers.

 
	
  

 	
  

 
	
 9.10

 	
 Insolvency Events of Default

 
	
  

 	
  

 
	
  

 	
 If an event occurs in respect of any of the Borrowers or the other
 Security Parties of the type described in Clause 9.2(a) to (e) (except (i) in
 the case when a petition was presented or proceedings were commenced or a
 suit or writ were issued by a third party and the relevant Borrower or
 Security Party is defending itself in bona fide and (ii) in the case that
 such events mentioned in Clause 9.2 relate to only a part of the
 undertakings, assets, rights or revenues which in the opinion of the Bank does
 not affect the ability of the Borrowers to perform their obligations under
 this Agreement and/or the other Security Documents) the obligation of the
 Bank to make the Commitment available shall terminate immediately upon
 receipt by the Bank of the relevant information (as such receipt shall be
 conclusively certified by a certificate of the Bank) and all amounts payable
 under sub-clause 9.9(b) above shall become immediately due and payable
 without any notice or other formality which is hereby expressly waived by the
 Borrowers.

 
	
  

 	
  

 
	
 9.11

 	
 Proof of Default

 
	
  

 	
  

 
	
  

 	
 It is agreed that (i) the non-payment of any sum of money in time
 will be proved conclusively by mere passage of time and (ii) the occurrence
 of this (non payment) and any other Event of Default shall be proved
 conclusively by a mere written statement of the Bank which (statement) shall
 be conclusive, binding and full evidence for the Borrowers and the Corporate
 Guarantor, but the Borrowers and the Corporate Guarantor shall be allowed to
 rebut such evidence by any means of evidence save for witnesses.

 


52









	
  

 	
  

 	
  

 
	
 9.12

 	
 Exclusion of Bank’s liability

 
	
  

 	
  

 
	
  

 	
 Neither the Bank nor any receiver or manager appointed by the Bank,
 shall have any liability to the Borrowers (or any of them) or any other
 Security Party:

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.

 	
 INDEMNITIES - EXPENSES - FEES 

 
	
  

 	
  

 
	
 10.1

 	
 Indemnity

 
	
  

 	
  

 
	
  

 	
 Each of the Borrowers shall on demand (and it is hereby expressly
 undertaken by the Borrowers to) indemnify the Bank, without prejudice to any
 of the other rights of the Bank under any of the Security Documents, against
 any loss (including loss of Margin) or expense which the Bank shall certify
 as sustained or incurred as a consequence of (a) any default in payment by
 any of the Security Parties of any sum under any of the Security Documents when
 due, (b) the occurrence of any Event of Default, (c) any prepayment of the
 Loan or part thereof being made under Clauses 4.3, 8.11(a) or 12 or any other
 repayment of the Loan or part thereof being made otherwise than on an
 Interest Payment Date relating to the part of the Loan prepaid or repaid or
 (iv) any drawdown not being made for any reason (excluding any default by the
 Bank) after a Drawdown Notice has been given, including, in any such case,
 but not limited to, any loss or expense sustained or incurred in maintaining
 or funding the Loan or any part thereof or in liquidating or re-employing
 deposits from third parties acquired to effect or maintain the Loan or any
 part thereof.

 
	
  

 	
  

 
	
 10.2

 	
 Expenses

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall (and it is hereby expressly undertaken by the
 Borrowers to) pay to the Bank on demand:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Initial and Amendment expenses

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 all expenses (including legal, printing and out-of-pocket expenses)
 incurred by the Bank in connection with the negotiation, preparation and
 execution of this Agreement and the other Security Documents and of any
 amendment or extension 

 


53









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 of or the granting of any waiver or consent under this Agreement
 and/or any of the Security Documents and/or in connection with any proposal
 by the Borrowers to constitute additional security pursuant to Clause
 8.11(a), whether any such security shall in fact be constituted or not;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Enforcement expenses

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 all expenses (including legal and out-of-pocket expenses) incurred by
 the Bank in contemplation of, or otherwise in connection with, the
 enforcement of, or preservation of any rights under, this Agreement and/or
 any of the other Security Documents, or otherwise in respect of the moneys
 owing under this Agreement and/or any of the other Security Documents or the
 contemplation or preparation of the above, whether they have been effected or
 not; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Other expenses

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 any and all other Expenses as defined in Clause 1.2.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Legal costs

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the legal costs of the Bank’s appointed lawyer, in respect of the
 preparation of this Agreement and the other Security Documents as well as the
 legal costs of the foreign lawyers (if these are available) in respect of the
 registration of the Security Documents or any search or opinion given to the
 Bank in respect of the Security Parties or the Vessels (or any of them) or
 the Security Documents. The said legal costs shall be due and payable on the
 date of drawdown.

 
	
  

 	
  

 	
  

 
	
  

 	
 All expenses payable pursuant to this Clause 10.2 shall be paid
 together with value added tax (if any) thereon.

 
	
  

 	
  

 
	
 10.3

 	
 Stamp duty

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall (and it is hereby expressly undertaken by the
 Borrowers to) pay any and all stamp, registration and similar taxes or
 charges (including those payable by the Bank) imposed by governmental
 authorities in relation to this Agreement and any of the other Security
 Documents, and shall indemnify the Bank against any and all liabilities with
 respect to, or resulting from delay or omission on the part of the Borrowers
 to pay such stamp taxes or charges.

 
	
  

 	
  

 
	
 10.4

 	
 Environmental Indemnity

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall indemnify the Bank on demand and hold the Bank
 harmless from and against all costs, expenses, payments, charges, losses,
 demands, liabilities, actions, proceedings (whether civil or criminal)
 penalties, fines, damages, judgements, orders, sanctions or other outgoings
 of whatever nature which may be suffered, incurred or paid by, or made or
 asserted against the Bank at any time, whether before or after the repayment
 in full of principal and interest under this Agreement, relating to, or
 arising 

 


54









	
  

 	
  

 	
  

 
	
  

 	
 directly or indirectly in any manner or for any cause or reason out
 of an Environmental Claim made or asserted against the Bank.

 
	
  

 	
  

 
	
 10.5

 	
 Currencies

 
	
  

 	
  

 
	
  

 	
 If any sum due from the Borrowers under any of the Security Documents
 or any order or judgement given or made in relation hereto has to be
 converted from the currency (the “first currency”) in which the same is
 payable under the relevant Security Document or under such order or judgement
 into another currency (the “second currency”) for the purpose of (i)
 making or filing a claim or proof against the Borrowers or any other Security
 Party, as the case may be or (ii) obtaining an order or judgement in any
 court or other tribunal or (iii) enforcing any order or judgement given or
 made in relation to any of the Security Documents, the Borrowers shall (and
 it is hereby expressly undertaken by the Borrowers to) indemnify and hold
 harmless the Bank from and against any loss suffered as a result of any
 difference between (a) the rate of exchange used for such purpose to convert
 the sum in question from the first currency into the second currency and (b)
 the rate or rates of exchange at which the Bank may in the ordinary course of
 business purchase the first currency into the second currency upon receipt of
 a sum paid to it in satisfaction, in whole or in part, of any such order,
 judgement, claim or proof. The term “rate of exchange” includes any premium
 and costs of exchange payable in connection with the purchase of the first
 currency with the second currency.

 
	
  

 	
  

 
	
 10.6

 	
 MII costs

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall (and it is hereby expressly undertaken by the
 Borrowers to) reimburse the Bank on demand for any and all costs incurred by
 the Bank (as supported by vouchers/invoices) in effecting and keeping
 effected a mortgagee’s interest insurance which the Bank may at any time
 effect for an amount of 110% of the amount of the Loan at the Bank’s wording
 or upon such terms as shall from time to time be determined by the Bank
 (herein “MII”), provided, however, that the Bank shall in its
 absolute discretion appoint and instruct in respect of any such Mil the
 insurance brokers in respect of such insurance and provided, further, that
 in the event that the Bank effects any such insurance on the basis of any
 mortgagee’s open cover, the Borrowers shall pay on demand to the Bank their
 proportion of premium due in respect of the relevant Ship for which such
 insurance cover has been effected by the Bank, and any certificate of the
 Bank in respect of any such premium due by the Borrowers (as supported by the
 necessary invoices/vouchers) shall (save for manifest error) be conclusive
 and binding upon the Borrowers.

 
	
  

 	
  

 
	
 10.7

 	
 Maintenance of the Indemnities

 
	
  

 	
  

 
	
  

 	
 The indemnities contained in this Clause 10 shall apply irrespective
 of any indulgence granted to the Borrowers or any other party from time to
 time and shall continue to be in full force and effect notwithstanding any
 payment in favour of the Bank and any sum due from the Borrowers under this
 Clause 10 will be due as a separate debt and shall not be affected by
 judgement being obtained for any other sums due under any one or more of 

 


55









	
  

 	
  

 	
  

 
	
  

 	
 this Agreement, the other Security Documents and any other documents
 executed pursuant hereto or thereto.

 
	
  

 	
  

 	
  

 
	
 10.8

 	
 Communications Indemnity

 
	
  

 	
  

 
	
  

 	
 It is hereby agreed in connection with communications that:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Express authority is hereby given by the Borrowers and the Corporate
 Guarantor to the Bank to accept (at the sole discretion of the Bank) all
 tested or untested communications given by facsimile or otherwise, regarding
 any or all of the notices, requests, instructions or other communications
 under this Agreement, subject to any restrictions imposed by the Bank
 relating to such communications including, without limitation (if so required
 by the Bank), the obligation to confirm such communications by letter.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Each of the Borrowers and the Corporate Guarantor shall recognise any
 and all of the said notices, requests, instructions or other communications
 as legal, valid and binding, when these notices, requests, instructions or
 communications come from the fax numbers mentioned in Clause 16.1 or any
 other fax usually used by it or its managing company.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Each of the Borrowers and the Corporate Guarantor hereby assumes full
 responsibility for the execution of the said notices, requests, instructions
 or communications by the Bank and promises and recognises that the Bank shall
 not be held responsible for any loss, liability or expense that may result
 from such notices, requests, instructions or other communications. It is
 hereby undertaken by the Borrowers and the Corporate Guarantor to indemnify
 in full the Bank from and against all actions, proceedings, damages, costs,
 claims, demands, expenses and any and all direct and/or indirect losses which
 the Bank or any third party may suffer, incur or sustain by reason of the
 Bank following such notices, requests, instructions or communications.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 With regard to notices, requests, instructions or communications
 issued by electronic and/or mechanical processes (e.g. by facsimile), the
 risk of equipment malfunction, including, without limitation, paper shortage,
 transmission errors, omissions and distortions is assumed fully and accepted
 by the Borrowers and the Corporate Guarantor.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The risks of misunderstandings and errors of notices, requests,
 instructions or communications being given as mentioned above, are for the
 Borrowers and the Corporate Guarantor, and the Bank will be indemnified in
 full pursuant to this Clause.

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The Bank shall have the right to ask the Borrowers and the Corporate
 Guarantor to furnish any information the Bank may require to establish the
 authority of any person purporting to act on behalf of the Borrowers and the
 Corporate Guarantor for these notices, requests, instructions or
 communications but it is expressly agreed that there is no obligation for the
 Bank to do so. The Bank shall be fully 

 


56









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 protected in, and the Bank shall incur no liability to the Borrowers
 and the Corporate Guarantor for acting upon the said notices, requests,
 instructions or communications which were believed by the Bank in good faith
 to have been given by the Borrowers and the Corporate Guarantor or by any of
 their authorised representative(s).

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 It is undertaken by the Borrowers and the Corporate Guarantor to
 safeguard the function and the security of the electronic and mechanical
 appliance(s) such as fax(es) etc., as well as the code word list, if any, and
 to take adequate precautions to protect such code word list from loss and to
 prevent its terms becoming known to any persons not directly concerned with
 its use. The Borrowers and the Corporate Guarantor shall hold the Bank
 harmless and indemnified from all claims, losses, damages and expenses which
 the Bank may incur by reason of the failure of the Borrowers and the
 Corporate Guarantor to comply with the obligations under this Clause and/or
 this Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 The Bank may at any time, without disclosing to the Borrowers and the
 Corporate Guarantor the reason (and such discretion of the Bank is expressly
 admitted by the Borrowers and the Corporate Guarantor hereby) refuse to
 execute the notices, requests, instructions or communications of the
 Borrowers and the Corporate Guarantor or any part thereof given by fax
 without incurring any responsibility for loss, liability or expense arising
 out of such refusal, unless the original of any such notice, request,
 instruction or communication has also been delivered to the Bank.

 
	
  

 	
  

 	
  

 
	
 10.9

 	
 Arrangement Fee

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall pay to the Bank within thirty (30) days from the
 date hereof a non-refundable arrangement fee equal to 0.25% on the amount of
 the Loan.

 
	
  

 	
  

 
	
 11.

 	
 SECURITY AND SET-OFF

 
	
  

 	
  

 
	
 11.1

 	
 Securities

 
	
  

 	
  

 
	
  

 	
 As security for the due and punctual repayment of the Loan and
 payment of interest thereon as provided in this Agreement and of all other
 Outstanding Indebtedness, the Borrowers shall ensure and procure that the
 following Security Documents are duly executed and, where required,
 registered in favour of the Bank in form and substance satisfactory to the
 Bank at the time specified herein or otherwise as required by the Bank and
 ensure that such security consists of:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the Mortgages;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the General Assignments;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Corporate Guarantee;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Charterparty Assignment;

 


57









	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 the Letters of Undertaking; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 (if the Bank so requests) the Collateral Security Documents.

 
	
  

 	
  

 	
  

 
	
 11.2

 	
 Maintenance of Securities

 
	
  

 	
  

 
	
  

 	
 It is hereby undertaken by the Borrowers and the Corporate Guarantor
 that the Security Documents shall both at the date of execution and delivery
 thereof and so long as any moneys are owing and/or due under this Agreement
 or under the other Security Documents be valid and binding obligations of the
 respective Security Parties thereto and rights of the Bank enforceable in
 accordance with their respective terms and that they will, at the expense of
 the Borrowers, execute, sign, perfect and do any and every such further
 assurance, document, act, omission or thing as in the opinion of the Bank may
 be necessary or desirable for perfecting the security contemplated or
 constituted by the Security Documents.

 
	
  

 	
  

 	
  

 
	
 11.3

 	
 Application of funds

 
	
  

 	
  

 
	
  

 	
 All moneys received by the Bank under or pursuant to any of the
 Security Documents shall be applied by the Bank in the following manner:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 firstly
 in or towards payment of Expenses and all sums other than principal or
 interest which may be due to the Bank under this Agreement and the other
 Security Documents or any of them at the time of application;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 secondly,
 in or towards payment of any default interest;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 thirdly
 in or towards payment of any arrears of interest due in respect of the Loan
 or any part thereof;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 fourthly
 in or towards repayment of the Loan whether the same is due and payable or
 not;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 sixthly
 the surplus (if any) shall be paid to the Borrowers, or to whomsoever else
 shall be entitled thereto.

 
	
  

 	
  

 	
  

 
	
 11.4

 	
 Set off

 
	
  

 	
  

 
	
  

 	
 Express authority is hereby given by the Borrowers and the Corporate
 Guarantor to the Bank without prejudice to any of the rights of the Bank at
 law, contractually or otherwise, at any time and without notice to the
 Borrowers and the Corporate Guarantor:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 to apply any credit balance standing upon any account of the
 Borrowers and the Corporate Guarantor or any of them with any branch of the
 Bank and in whatever 

 


58









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 currency in or towards satisfaction of any sum due to the Bank from
 the Borrowers and/or the Corporate Guarantor under this Agreement and/or any
 of the other Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 to combine and/or consolidate all or any accounts in the name of the
 Borrowers and the Corporate Guarantor or any of them with the Bank.

 
	
  

 	
  

 	
  

 
	
  

 	
 For all or any of the above purposes authority is hereby given to the
 Bank to purchase with the monies standing to the credit of any such account
 or accounts such other currencies as may be necessary to effect such
 application. The Bank shall not be obliged to exercise any right given by
 this Clause.

 
	
  

 	
  

 
	
 11.5

 	
 Earnings Account

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers and the Corporate Guarantor shall procure that
 throughout the Security Period all the Earnings of each of the Vessels shall
 be paid to the Earnings Account. No sums shall be withdrawn from the Earnings
 Account except as hereinafter provided.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Subject to Clause 9, all moneys paid to the Earnings Account after
 discharging the cost (if any) incurred by the Bank in collecting such moneys,
 shall be applied by the Bank as follows:

 






	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in payment of any and all sums whatsoever due and payable to the Bank
 hereunder (such sums to be paid in such order as the Bank may in its sole
 discretion elect); and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any credit balance shall be available to the Borrowers; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, however, that:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 sums standing to the credit of the Earnings Account shall bear
 interest at the rate the Bank customarily pays on deposits in the relevant
 currency in comparable amounts for comparable periods (as conclusively
 certified by the Bank) and any interest accruing thereon shall be paid to the
 Earnings Account;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 nothing herein contained shall be deemed to affect the absolute
 obligation of the Borrowers to repay the Loan and pay interest thereon as
 provided in Clauses 3 and 4.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Each of the Borrowers and the Corporate Guarantor hereby irrevocably
 and unconditionally authorises the Bank to make from the Earnings Account any
 and 

 


59









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 all above payments and repayments as and when the same fall due or at
 any time thereafter.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The Borrowers, at their own costs and expenses, undertake with the
 Bank to comply with or cause to be complied with any written requirement of
 the Bank from time to time as to the location or re-location of the Earnings
 Account and will from time to time enter into such documentation as the Bank
 may require in order to create or maintain a security interest in the
 Earnings Account.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Upon the occurrence of an Event of Default or at any time thereafter
 the Bank shall be entitled to set off and apply all sums standing to the
 credit of the Earnings Account and accrued interest (if any) without notice
 to the Borrowers in the manner specified in Clause 11.3 (and express and
 irrevocable authority is hereby given by the Borrowers to the Bank so to set
 off and apply the same and the Bank shall be released to the extent of such
 set off and application).

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The Borrowers and the Corporate Guarantor hereby jointly and
 severally covenant with the Bank that the Earnings Account shall not be
 charged, assigned, transferred or pledged (other than in favour of the Bank)
 nor shall there be granted by the Borrowers and/or the Corporate Guarantor or
 suffered to arise any third party rights over or against the whole or any
 part of the Earnings Account.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 The Earnings Account shall be operated in accordance with Bank’s
 usual terms and conditions (full knowledge of which each of the Borrowers and
 the Corporate Guarantor hereby acknowledge) and subject to the Bank’s usual
 charges levied on such accounts and/or transactions conducted on such accounts
 (as from time to time notified by the Bank to the Corporate Guarantor).

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Upon payment in full of all principal, interest and all other amounts
 due to the Bank under the terms of this Agreement and the other Security
 Documents any balance then standing to the credit of the Earnings Account
 shall be released to the Borrowers or whomsoever else may be entitled to
 receive such balance.

 
	
  

 	
  

 	
  

 
	
 12.

 	
 UNLAWFULNESS, INCREASED COSTS

 
	
  

 	
  

 
	
 12.1

 	
 Unlawfulness

 
	
  

 	
  

 
	
  

 	
 If any change in, or introduction of, any law, regulation or
 regulatory requirement or any request of any central bank, monetary,
 regulatory or other authority or any order of any court renders it unlawful
 or contrary to any such regulation, requirement, request or order for the
 Bank to advance the Commitment or any Advance as the case may be, or to
 maintain or fund the Loan, notice shall be given promptly by the Bank to the
 Borrowers, whereupon the Commitment shall be reduced to zero and the
 Borrowers shall prepay the Loan in accordance with such notice, together with
 accrued interest thereon to the date of prepayment and all other sums payable
 by the Borrowers under this Agreement.

 


60









	
  

 	
  

 	
  

 
	
 12.2

 	
 Change of
 circumstances

 
	
  

 	
  

 	
  

 
	
  

 	
 If any change in or in the interpretation of any applicable law or
 regulation, by any government or governmental authority or agency, makes it
 unlawful for the Bank to maintain or give effect to its obligations or to claim
 or receive any amount payable to the Bank under this Agreement, then the Bank
 may serve written notice on the Borrowers declaring its obligations under
 this Agreement terminated in whole or in part, whereupon the same shall
 terminate forthwith and the Borrowers will immediately repay the Loan and
 accrued interest to the date of prepayment together with all other
 Outstanding Indebtedness to the Bank pursuant to the terms of the notice.

 
	
  

 	
  

 	
  

 
	
 12.3

 	
 Increased Cost

 
	
  

 	
  

 	
  

 
	
  

 	
 If, as a result of (a) any change in or in the interpretation of any
 law, regulation or official directive (whether or not having the force of law
 but, if not having the force of law, with which the Bank habitually
 complies), by any governmental authority in any country the laws or regulations
 of which are applicable on the Bank, or (b) compliance by the Bank with any
 request from any applicable fiscal or monetary authority (whether or not
 having the force of law but, if not having the force of law, with which the
 Bank habitually complies) or (c) any other set of circumstances affecting the
 Bank including (without limitation) those relating to Taxation, stock or
 capital adequacy, any type of liquidity, reserve assets, cash ratio deposits
 and special deposits or other banking or monetary controls or requirements
 (except to the extent included in the Mandatory Cost) which affects the
 manner in which the Bank allocates capital resources to its obligations
 hereunder (including (without limitation) those resulting from the
 implementation of or compliance with any amendment of the “International
 Convergence of Capital Measurement and Capital Standards, a Revised
 Framework” published by the Basle Committee on Banking Supervision (July
 1988, as amended) or any amendatory or substitute agreement thereof including,
 without limitation, the proposed new Basle Capital Accord (Basle II) or any
 law or regulation which implements Basle II):

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the cost to the Bank of making the Commitment or any part thereof or
 maintaining or funding the Loan is increased or an additional cost on the
 Bank is imposed; and/or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 subject the Bank to Taxes or the basis of Taxation (other than Taxes
 or Taxation on the overall net income of the Bank) in respect of any payments
 to the Bank under this Agreement or any of the other Security Documents is
 changed; and/or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 


61









	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 require the Bank to make a payment or forgo a return on or calculated
 by references to any amount received or receivable by it under any of the
 Security Documents is required; and/or

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 then and in each case the Borrowers shall pay to the Bank, from time
 to time, upon demand, such additional moneys as shall indemnify the Bank for
 any increased or additional cost, reduction, payment, foregone return or loss
 whatsoever.

 
	
  

 	
  

 	
  

 
	
 12.4

 	
 Claim for increased cost

 
	
  

 	
  

 	
  

 
	
  

 	
 The Bank will promptly notify the Borrowers of any intention to claim
 indemnification pursuant to Clause 12.3 and such notification will be a
 conclusive and full evidence binding on the Borrowers as to the amount of any
 increased cost or reduction and the method of calculating the same and the
 Borrowers shall be allowed to rebut such evidence by any means of evidence
 save for witness. A claim under Clause 12.3 may be made at any time and must
 be discharged by the Borrowers within seven (7) days of demand. It shall not
 be a defence to a claim by the Bank under this Clause 12.3 that any increased
 cost or reduction could have been avoided by the Bank. Any amount due from
 the Borrowers under Clause 12.3 shall be due as a separate debt and shall not
 be affected by judgement being obtained for any other sums due under or in
 respect of this Agreement.

 
	
  

 	
  

 	
  

 
	
 12.5

 	
 Option to prepay

 
	
  

 	
  

 	
  

 
	
  

 	
 If any additional amounts are required to be paid by the Borrowers to
 the Bank by virtue of Clause 12.3, the Borrowers shall be entitled, on giving
 the Bank not less than fourteen (14) days prior notice in writing, to prepay
 the Loan and accrued interest thereon, together with all other Outstanding
 Indebtedness, on the next Repayment Date. Any such notice, once given, shall
 be irrevocable.

 
	
  

 	
  

 	
  

 
	
 13.

 	
 GUARANTEE

 
	
  

 	
  

 	
  

 
	
 13.1

 	
 (a)

 	
 In consideration of the Bank agreeing to make available to the
 Borrowers, as joint and several borrowers, the Commitment under this
 Agreement and other good and valuable consideration (the receipt and adequacy
 whereof the Corporate Guarantor hereby acknowledges) the Corporate Guarantor
 for itself and its successors and permitted assigns, hereby guarantees
 unconditionally and irrevocably as a primary obligor and not a surety only
 and waiving all the rights and objections granted by the Law to a guarantor
 including, but without limitation, the rights of division and discussion, to
 the Bank, the due, prompt and punctual performance, observance of and compliance
 by the Borrowers with any and all covenants, agreements, warranties,
 conditions and provisions express or implied on the part of the Borrowers to
 be performed, observed or complied with under this Agreement and the Security
 Documents including, without limitation, the due and punctual

 


62









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 payment of the principal amount outstanding under this Agreement from
 time to time and all interest and other moneys expressed to be payable by the
 Borrowers in accordance with the terms of this Agreement and the Security
 Documents (hereinafter together called the “Guaranteed Obligations”)
 and the Corporate Guarantor hereby covenants that, if any amount of principal
 or interest or any amount due in respect of the Loan or other moneys payable
 by the Borrowers under this Agreement and/or any of the Security Documents or
 otherwise shall not be paid when the same shall be due and payable, the
 Corporate Guarantor will, forthwith upon demand, make such payment or cause
 such payment to be made together with interest to the date of payment at the
 rate specified in Clause 3.4 of this Agreement in respect of which an amount
 becomes due together with all other charges and all expenses (including legal
 and other costs on a full indemnity basis) incurred by the Bank in relation
 to this Agreement, the Security Documents, this Guarantee or any other
 guarantee or security now or hereafter held for the same indebtedness or in
 enforcing payment whether by the Borrowers or any other person.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 In addition to the obligations of the Corporate Guarantor under
 Clause 13.1(a) hereof and separate therefrom, the Corporate Guarantor
 irrevocably agrees to indemnify and keep the Bank indemnified forthwith upon
 demand against any loss of whatsoever kind resulting from the failure by the
 Borrowers (or either of them) to make when stated to be due any payment due
 to the Bank or to perform when due any other obligation under or in respect
 of this Agreement, the Security Documents or any of them, whether or not the
 Bank has attempted to enforce any right against the Borrowers (or either of
 them). Without prejudice to the generality of the foregoing, such loss shall
 include the total amount of all those amounts (to the extent to which the
 Bank shall not already have received them) as are expressed to fall within
 the obligations of the Corporate Guarantor under Clause 13.1 hereof.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Any statement of account purporting to show the amount due from the
 Borrowers (or either of them) under the terms of this Agreement or any of the
 Security Documents or otherwise signed as correct by any duly authorised
 officer of the Bank shall (save in the case of manifest error) be conclusive
 evidence against the Corporate Guarantor of the amount so due.

 
	
  

 	
  

 	
  

 
	
 13.2

 	
 This Guarantee shall be a continuing security and shall secure the
 ultimate balance from time to time owing to the Bank under this Agreement and
 each of the Security Documents notwithstanding the liquidation incapacity or
 any change in the constitution of the Borrowers (or either of them) or in the
 name or style thereof or any settlement of account or other matter
 whatsoever. This Guarantee is in addition to any other guarantee lien bill
 note mortgage or other security now or hereafter held by the Bank.

 
	
  

 	
  

 	
  

 
	
 13.3

 	
 Should any purported obligation of the Borrowers (or either of them)
 which if valid or enforceable would be the subject of this Guarantee be or
 become wholly or in part invalid or unenforceable against the Borrowers (or
 either of them) by reason of any defect in or insufficiency or want of powers
 of the Borrowers (or either of them) or irregular or 

 


63









	
  

 	
  

 	
  

 
	
  

 	
 improper purported exercise thereof or by reason of the avoidance or
 invalidity of any assurance security or payment on any ground whatsoever
 including (without limitation) avoidance under any enactment relating to
 bankruptcy or liquidation or because the Bank’s rights have become barred by
 the Limitation Acts or otherwise or by reason of any legal limitation
 disability incapacity or any other facts or circumstances whether or not always
 known to the Bank or if for any other reason whatsoever the Borrowers (or
 either of them) are/is not or ceases to be legally liable to discharge an
 obligation undertaken or purported to be undertaken on its behalf under this
 Agreement or any of the Security Documents the Corporate Guarantor shall
 nevertheless be liable to the Bank in respect of that purported obligation as
 if the same were wholly valid and enforceable and the Corporate Guarantor was
 the principal debtor in respect thereof. The Bank is not to be concerned to
 see or enquire into the powers of the Borrowers (or either of them) or
 their/its officers and employees purporting to act on its behalf. The
 Corporate Guarantor hereby agrees to keep the Bank fully indemnified against
 all damages loss costs and expenses arising from any failure of the Borrowers
 (or either of them) to carry out any such purported obligation.

 
	
  

 	
  

 	
  

 
	
 13.4

 	
 (a)

 	
 The Corporate Guarantor hereby agrees that the Bank may at all times
 without the Corporate Guarantor’s consent and without discharging or in any
 way affecting the liability of the Corporate Guarantor hereunder grant to the
 Borrowers (or either of them) or to any other person any time or indulgence
 or concession or give up deal with exchange vary realise release or abstain
 from perfecting or enforcing any guarantees liens bills notes mortgages
 securities or other rights under the Security Documents or any of them, this
 Agreement or otherwise which the Bank may now or hereafter have from or
 against the Borrowers (or either of them) or any other Security Party or any
 other person whether hereunder or otherwise or determine vary or increase any
 credit facilities to or the terms or conditions in respect of any transaction
 with the Borrowers (or either of them) in any manner whatsoever or agree with
 the Borrowers (or either of them) as to the application of any advance made
 or to be made to the Borrowers (or either of them) or compound with discharge
 release or vary the liability of the Borrowers (or either of them) or any
 other person or concur in accepting or varying any compromise arrangement or
 settlement or omit to claim or enforce payment of any dividend or composition
 when and in such manner as the Bank may think expedient and no such act or
 omission on the part of the Bank shall in any way diminish the validity of
 this Guarantee which shall remain binding upon the Corporate Guarantor as if
 such the Corporate Guarantor was originally liable as principal debtor for
 the moneys obligations and liabilities payment whereof is hereby guaranteed.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Without prejudice to the generality of Clause 13.4(a) hereof, the
 Corporate Guarantor hereby expressly agrees that the Bank is not and shall
 not be under any obligation to take any action of whatsoever nature against
 the Borrowers (or either of them) or any other Security Party or any other
 person prior to or after taking proceedings against the Corporate Guarantor
 under this Guarantee.

 
	
  

 	
  

 	
  

 
	
 13.5

 	
 (a)

 	
 The Corporate Guarantor hereby declares that it has not received any
 security from the Borrowers (or either of them) for the giving of this
 Guarantee and hereby

 


64









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 agrees that it will not so long as any moneys remain owing by the
 Borrowers to the Bank (whether actually or contingently) take any security
 from the Borrowers or any other Security Party or any other person in respect
 of the Corporate Guarantor’s liability hereunder without first obtaining the
 written consent of the Bank and the Corporate Guarantor hereby further agrees
 that in the event of the Corporate Guarantor taking any security, any
 security so taken shall be held in trust for the Bank as security for the
 liability of the Corporate Guarantor to the Bank hereunder.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 In respect of the Corporate Guarantor’s liability hereunder the Bank
 shall have a lien on all securities or other property of the Corporate
 Guarantor held by the Bank whether for safe custody or otherwise. The Bank
 shall further be entitled (as well before as after demand hereunder) to
 set-off against any credit balance in any account of the Corporate Guarantor
 with the Bank, its respective parent company and/or Subsidiaries, if any,
 (whether current or otherwise or subject to notice or not) and against any
 interest accruing thereon the liability of the Corporate Guarantor to the
 Bank hereunder and if the liability or any part thereof is in a different
 currency from a credit balance against which the Bank seeks to set it off the
 Bank shall be entitled to utilise the currency of the account in credit for
 the purchase at the spot rate of exchange of an amount in the currency of the
 liability not exceeding the amount of such liability.

 
	
  

 	
  

 	
  

 
	
 13.6

 	
 Until all obligations and liabilities hereby guaranteed or intended
 to be guaranteed have been paid or discharged in full (which expression shall
 not embrace payment of a dividend in liquidation or bankruptcy of less than
 100 per cent) the Corporate Guarantor waives all rights of subrogation and
 will not claim any set-off or counterclaims against the Borrowers (or either
 of them) nor claim or prove (unless so required by the Bank in which case the
 benefit of any such claim or proof shall be held upon trust for the
 obligations of the Corporate Guarantor hereunder) in competition with the
 Bank in the event of the insolvency of the Borrowers (or either of them) nor
 have the benefit of any share in any other guarantee or security now or
 hereafter held by the Bank.

 
	
  

 	
  

 	
  

 
	
 13.7

 	
 Any money received by virtue of this Guarantee and any document
 executed or to be executed by the Corporate Guarantor in security of the
 Guaranteed Obligations (hereinafter together called the “Corporate
 Guarantor’s Security Documents”) may be placed to the credit of a suspense
 account (without obligation on the part of the Bank to apply the same in
 reduction of the Guaranteed Obligations) with a view to preserving the rights
 of the Bank to prove for the whole of its claims against the Borrowers (or
 either of them) or any other person in the event of any proceedings in or
 analogous to bankruptcy, liquidation, composition or arrangement.

 
	
  

 	
  

 	
  

 
	
 13.8

 	
 This Guarantee shall at all times remain the property of the Bank.

 
	
  

 	
  

 	
  

 
	
 13.9

 	
 No disposition or payment which may be avoided pursuant to any
 enactment relating to bankruptcy liquidation or insolvency and no release
 discharge or settlement made in reliance in whole or in part upon any such
 disposition or payment shall prejudice the right of the Bank to enforce this
 Guarantee.

 


65









	
  

 	
  

 	
  

 
	
 13.10

 	
 All amounts payable by the Corporate Guarantor hereunder (whether on
 account of principal or interest or otherwise) shall be made in the currency
 or currencies in which the obligation of the Borrowers is expressed to be
 payable in full and free of set-off or counter-claim whatsoever and without
 any withholding or deductions whatsoever on account of any present or future
 Taxes or charges or otherwise. In the event of the Corporate Guarantor being
 compelled by law to make any such withholding or deduction from any payment
 to the Bank the Corporate Guarantor will forthwith pay to the Bank such
 additional amount as will result in the receipt by the Bank of the amount
 which would otherwise have been receivable.

 
	
  

 	
  

 	
  

 
	
 13.11

 	
 No payment to the Bank pursuant to any judgement of any Court or
 otherwise shall operate to discharge the obligation of the Corporate
 Guarantor in respect of which it was made, unless and until payment in full
 shall have been received in the currency in which payment was due pursuant to
 the provisions of this Agreement and/or the Security Documents and to the
 extent that the amount of any such payment was under any such judgement or
 otherwise shall on conversion into the currency in which payment is required
 to be made under the provisions of this Agreement, fall short of the amount
 of the relevant obligation expressed in the currency of payment pursuant to
 the provisions of this Agreement and/or the Security Documents, the Bank
 shall have a further cause of action and shall remain entitled to recover
 such a sum as shall, upon conversion into the currency in which payment is
 required to be made under this Agreement, be equal to the amount of the
 shortfall.

 
	
  

 	
  

 	
  

 
	
 13.12

 	
 The Corporate Guarantor hereby covenants and undertakes with the Bank
 (without prejudice to the generality of Clause 13.1) that until the
 Guaranteed Obligations have been paid and discharged in full:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 it will execute and deliver forthwith the Corporate Guarantor’s
 Security Documents so that all such documents shall both at the date of such
 execution and delivery and at all times during the Security Period be valid
 and binding obligations of the Corporate Guarantor in accordance with their
 respective terms;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 it will procure the due performance and observance by the Borrowers
 of the terms of this Agreement and the Security Documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 it will promptly inform the Bank of any occurrence of which the
 Corporate Guarantor becomes aware which, in the Corporate Guarantor’s
 reasonable opinion, might adversely affect the ability of the Borrowers (or
 either of them) to perform its respective obligations under this Agreement
 and the Security Documents or any of them; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 it will obtain every consent and do all other acts and things (or
 procure the same to be done) which may from time to time be necessary or
 desirable for the continued due performance of all its obligations under this
 Guarantee and the Corporate Guarantor’s Security Documents.

 


66









	
  

 	
  

 
	
 14.

 	
 ASSIGNMENT, PARTICIPATION, LENDING OFFICE

 
	
  

 	
  

 
	
 14.1

 	
 Binding Effect

 
	
  

 	
  

 
	
  

 	
 This Agreement shall be binding upon and inure to the benefit of the
 Bank and the Borrowers and their respective successors and assigns.

 
	
  

 	
  

 
	
 14.2

 	
 No Assignment by the Borrowers

 
	
  

 	
  

 
	
  

 	
 The Borrowers and any other parties to the Security Documents (other
 than the Bank) may not assign any rights and/or obligations under this
 Agreement or any of the other Security Documents or any documents executed
 pursuant to this Agreement and/or the other Security Documents.

 
	
  

 	
  

 
	
 14.3

 	
 Assignment by the Bank

 
	
  

 	
  

 
	
  

 	
 The Bank may (after prior consultation with the Borrowers) at any
 time, assign, transfer, or offer participation to other banks or financial
 institutions with shipping experience, in whole or in part, or in any manner
 dispose of all or any of its rights and/or obligations arising or accruing
 under this Agreement or any of the other Security Documents or any documents
 executed pursuant to this Agreement and/or the other Security Documents. The
 Bank may disclose to a potential assignee, transferee or participant or to
 any other person who may propose entering into contractual relations with the
 Bank in relation to this Agreement such information about the Borrowers and
 the Security Parties as the Bank shall consider appropriate.

 
	
  

 	
  

 
	
 14.4

 	
 Documentation

 
	
  

 	
  

 
	
  

 	
 If the Bank assigns, transfers or in any other manner grants
 participation in respect of all or any part of its rights or benefits or
 transfers all or any of its obligations as provided in this Clause 14.4 each
 of the Borrowers undertakes, immediately on being requested to do so by the
 Bank, to enter into and procure that each Security Party enters into such
 documents as may be necessary or desirable to transfer to the assignee,
 transferee or participant all or the relevant part of the interest of the
 Bank in the Security Documents and all relevant references in this Agreement
 to the Bank shall thereafter be construed as a reference to the Bank and/or
 assignee, transferee or participant of the Bank to the extent of their
 respective interests and, in the case of a transfer of all or part of the
 obligations of the Bank, the Borrowers shall thereafter look only to the
 assignee, transferee or participant in respect of that proportion of the
 obligations of the Bank under this Agreement assumed by such assignee,
 transferee or participant. The Borrowers hereby expressly consent to any
 subsequent transfer of the rights and obligations of the Bank and undertake
 that they shall join in and execute such supplemental or substitute
 agreements as may be necessary to enable the Bank to assign and/or transfer
 and/or grant participation in respect of its rights and obligations to
 another branch or to one or more banks or financial institutions in a
 syndicate or otherwise.

 


67









	
  

 	
  

 
	
 14.5

 	
 Disclosure of information

 
	
  

 	
  

 
	
  

 	
 The Bank may disclose to a potential assignee or transferee of or
 sub-participant in respect of any of its rights and/or obligations under this
 Agreement and the Security Documents (or any of them) (or any other person
 with whom the Bank is contemplating entering into contractual relations with
 respect to this Agreement and the Security Documents (or any of them)) such
 information concerning the Borrowers and the other Security Parties, the
 Vessels and all companies managed by the Manager and/or about this Agreement
 and/or the Security Documents (or any of them) and the Security Parties (or
 any of them) and/or their related entities as shall have been made available
 to the Bank or as the Bank thinks fit and additionally may disclose such
 information to any affiliate of the Bank or, on being requested to provide
 the same, to any governmental or regulatory body.

 
	
  

 	
  

 
	
  

 	
 The Bank shall inform the Borrowers of its intention to disclose the
 information referred to in Clause 14.5 to any other bank or financial
 institution.

 
	
  

 	
  

 
	
 14.6

 	
 Change of Lending Office

 
	
  

 	
  

 
	
  

 	
 The Bank shall be at liberty to transfer the Loan to any branch or
 branches, and upon notification of any such transfer, the word “Bank” in this
 Agreement and in the other Security Documents shall mean the Bank, acting
 through such branch or branches and the terms and provisions of this
 Agreement and of the other Security Documents shall be construed accordingly.

 
	
  

 	
  

 
	
 15.

 	
 MISCELLANEOUS

 
	
  

 	
  

 
	
 15.1

 	
 Cumulative Remedies

 
	
  

 	
  

 
	
  

 	
 The rights and remedies of the Bank contained in this Agreement and
 the other Security Documents are cumulative and neither exclusive of each
 other nor of any other rights or remedies conferred by law.

 
	
  

 	
  

 
	
 15.2

 	
 Waivers

 
	
  

 	
  

 
	
  

 	
 No delay or omission by the Bank to exercise any right, remedy or
 power vested in the Bank under this Agreement and/or the other Security
 Documents or by law shall impair such right or power, or be construed as a waiver
 of, or as an acquiescence in any default by the Borrowers and/or any other
 Security Party, nor shall any single or partial exercise by the Bank of any
 power, right or remedy preclude any other or further exercise thereof or the
 exercise of any other power, right or remedy. In the event of the Bank on any
 occasion agreeing to waive any such right, remedy or power, or consenting to
 any departure from the strict application of the provisions of this Agreement
 or of any other Security Document, such waiver shall not in any way prejudice
 or affect the powers conferred upon the Bank under this Agreement and the
 other Security Documents or the right of the Bank thereafter to act strictly
 in accordance with the terms of this Agreement and the other Security Documents.
 No modification or waiver by the Bank of any provision of this Agreement or
 of any of the other Security Documents nor any consent

 


68









	
  

 	
  

 	
  

 
	
  

 	
 by the Bank to any departure therefrom by any Security Party shall be
 effective unless the same shall be in writing and then shall only be
 effective in the specific case and for the specific purpose for which given.
 No notice to or demand on any such party in any such case shall entitle such
 party to any other or further notice or demand in similar or other circumstances.

 
	
  

 	
  

 	
  

 
	
 15.3

 	
 Integration of Terms

 
	
  

 	
  

 	
  

 
	
  

 	
 This Agreement contains the entire agreement of the parties and its
 provisions supersede the provisions of the Commitment Letter and any and all
 other prior correspondence and oral negotiation by the parties in respect of
 the matters regulated by this Agreement.

 
	
  

 	
  

 	
  

 
	
 15.4

 	
 Amendments

 
	
  

 	
  

 	
  

 
	
  

 	
 This Agreement and any other Security Documents shall not be amended
 or varied in their respective terms by any oral agreement or representation
 or in any other manner other than by an instrument in writing of even date
 herewith or subsequent hereto executed by or on behalf of the parties hereto
 or thereto.

 
	
  

 	
  

 	
  

 
	
 15.5

 	
 Invalidity of Terms

 
	
  

 	
  

 	
  

 
	
  

 	
 In the event of any provision contained in one or more of this
 Agreement, the other Security Documents and any other documents executed
 pursuant hereto or thereto being invalid, illegal or unenforceable in any
 respect under any applicable law in any jurisdiction whatsoever, such
 provision shall be ineffective as to that jurisdiction only without affecting
 the remaining provisions hereof or thereof. If, however, this event becomes
 known to the Bank prior to the drawdown of the Commitment or of any part
 thereof the Bank shall be entitled to refuse drawdown until this discrepancy
 is remedied. In case that the invalidity of a part results in the invalidity
 of the whole Agreement, it is hereby agreed that there will exist a separate
 obligation of the Borrowers for the prompt payment to the Bank of all the
 Outstanding Indebtedness. Where, however, the provisions of any such
 applicable law may be waived, they are hereby waived by the parties hereto to
 the full extent permitted by the law to the intent that this Agreement, the
 other Security Documents and any other documents executed pursuant hereto or
 thereto shall be deemed to be valid binding and enforceable in accordance
 with their respective terms.

 
	
  

 	
  

 	
  

 
	
 15.6

 	
 Inconsistency of Terms

 
	
  

 	
  

 	
  

 
	
  

 	
 In the event of any inconsistency between the provisions of this
 Agreement and the provisions of any other Security Document the provisions of
 this Agreement shall prevail.

 
	
  

 	
  

 	
  

 
	
 15.7

 	
 Language and genuineness of documents

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Language

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 All certificates, instruments and other documents to be delivered
 under or supplied in connection with this Agreement or any of the other
 Security

 


69









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Documents shall be in the Greek or the English language (or such
 other language as the Bank shall agree) or shall be accompanied by a
 certified Greek translation upon which the Bank shall be entitled to rely.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Certification of documents

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Any copies of documents delivered to the Bank shall be duly certified
 as true, complete and accurate copies by appropriate authorities or legal
 counsel practising in Greece or otherwise as will be acceptable to the Bank
 at the sole discretion of the Bank.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Certification of signature

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Signatures on Board or shareholder resolutions, Secretary’s
 certificates and any other documents are, at the discretion of the Bank, to
 be verified for their genuineness by appropriate Consul or other competent
 authority.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Further assurances

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each of the Borrowers and the Corporate Guarantor undertakes that the
 Security Documents shall both at the date of execution and delivery thereof
 and so long as any moneys are owing under any of the Security Documents be
 valid and binding obligations of the respective parties thereto and
 enforceable in accordance with their respective terms and that it will, at
 its expense, execute, sign, perfect and do, and will procure the execution,
 signing, perfecting and doing by each of the other Security Parties of, any
 and every such further assurance, document, act or thing as in the reasonable
 opinion of the Bank may be necessary or desirable for perfecting the security
 contemplated or constituted by the Security Documents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Conflicts

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 15.8

 	
 Third Party rights

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 15.9

 	
 Process Agent in Greece

 
	
  

 	
  

 	
  

 
	
  

 	
 Mr. Konstantinos Zacharatos, an Attorney-at-law, presently c/o
 Costamare Shipping Company S.A., 60 Zephyrou Street, 175.64 Athens, Greece,
 is hereby appointed by the Borrowers and the Corporate Guarantor as agent to
 accept service (hereinafter called the “Process Agent”) upon whom any judicial or
 extrajudicial process may be served (including but without limitation any
 documents initiating legal proceedings) and any notice, request, demand
 payment order, announcement of claim, any enforcement process or other
 communication under this Agreement or any of the Security Documents. In the

 


70









	
  

 	
  

 	
  

 	
  

 
	
  

 	
 event that the Process Agent (or any substitute process agent
 notified to the Bank in accordance with the foregoing) cannot be found at the
 address specified above (or, as the case may be, notified to the Bank), which
 will be conclusively proved by the affidavit of a process server to that
 effect, the authority of the Process Agent as agent to accept service shall
 be deemed to have ceased and service of documents may be effected in
 accordance with the procedure provided by the relevant provisions on service
 of process provided by the Hellenic Procedural Code.

 
	
  

 	
  

 	
  

 
	
 16.

 	
 NOTICES AND OTHER MATTERS

 
	
  

 	
  

 	
  

 
	
 16.1

 	
 Notices

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 be in writing delivered personally or by first-class prepaid letter
 (airmail if available), or cable or shall be served through a process server
 or subject to Clause 10.8 by fax;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 be deemed to have been received, subject as otherwise provided in
 this Agreement or the relevant Security Document, in the case of fax, at the
 time of dispatch as per transmission report (provided, in either case,
 that if the date of despatch is not a business day in the country of the
 addressee it shall be deemed to have been received at the opening of business
 on the next such business day), in the case of a cable 24 hours after
 despatch and in the case of a letter when delivered or served personally or
 five (5) days after it has been put into the post; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 be sent:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 if to be sent to any Security Party, to: 

 
	
  

 	
  

 	
  

 	
 c/o Costamare Shipping Company S.A., 

 
	
  

 	
  

 	
  

 	
 60 Zephyrou Street, Pal. Faliro, 

 
	
  

 	
  

 	
  

 	
 175.64 Athens, Greece,

 
	
  

 	
  

 	
  

 	
 Telex No. 220602 or 220603 MARE GR, 

 
	
  

 	
  

 	
  

 	
 Fax No. (+30210) 9409051

 
	
  

 	
  

 	
  

 	
 Attention: The Chief Financial Manager

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 if to be sent to the Bank, to

 
	
  

 	
  

 	
  

 	
 ALPHA BANK A.E.

 
	
  

 	
  

 	
  

 	
 Shipping Division

 
	
  

 	
  

 	
  

 	
 89 Akti Miaouli

 
	
  

 	
  

 	
  

 	
 185 38 Piraeus, Greece

 
	
  

 	
  

 	
  

 	
 Fax No.: (+30) 210 4290 348 

 
	
  

 	
  

 	
  

 	
 Attention: The Manager

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 or to such other person, address or fax number as is notified by the
 relevant Security Party or the Bank (as the case may be) to the other parties
 to this

 


71









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Agreement and, in the case of any such change of address or fax
 number notified to the Bank, the same shall not become effective until notice
 of such change is actually received by the Bank and a copy of the notice of
 such change is signed by the Bank.

 
	
  

 	
  

 	
  

 
	
 16.2

 	
 Confidentiality

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Each of the parties hereto agree and undertake to keep confidential
 any documentation and any confidential information concerning the business,
 affairs, directors or employees of the other which comes into its possession
 in connection with this Agreement and not to use any such documentation,
 information for any purpose other than for which it was provided.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Each of the Borrowers and the Corporate Guarantor acknowledge and
 accept that the Bank may be required by law or that it may be appropriate for
 the Bank to disclose information and deliver documentation relating to the
 Borrowers and the transactions and matters in relation to this Agreement
 and/or the other Security Documents to governmental or regulatory agencies
 and authorities.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Each of the Borrowers and the Corporate Guarantor acknowledge and
 accept that in case of occurrence of any of the Events of Default the Bank
 may disclose information and deliver documentation relating to the Borrowers
 and the Corporate Guarantor and the transactions and matters in relation to
 this Agreement and/or the other Security Documents to third parties to the
 extent that this is necessary for the enforcement or the contemplation of
 enforcement of the Bank’s rights or for any other purpose for which in the
 opinion of the Bank, such disclosure would be useful or appropriate for the
 interests of the Bank or otherwise and each of the Borrowers and the
 Corporate Guarantor expressly authorise any such disclosure and delivery.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Each of the Borrowers and the Corporate Guarantor acknowledges and
 accepts that the Bank may be prohibited or it may be inappropriate for the
 Bank to disclose information to any of the Borrowers and the Corporate
 Guarantor by reason of law or duties of confidentiality owed or to be owed to
 other persons.

 
	
  

 	
  

 	
  

 
	
 17.

 	
 APPLICABLE LAW AND JURISDICTION 1 7. 1 Law

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 For the purposes of enforcement in Greece, it is hereby expressly
 agreed that English law as the governing law of the Loan Agreement will be
 proved by an affidavit of a solicitor from an English law firm to be
 appointed by the Bank and the said affidavit shall constitute full and
 conclusive evidence binding on the Borrowers, the Corporate Guarantor and
 each of them, but the Borrowers and the Corporate Guarantor shall be allowed
 to rebut such evidence save for witness.

 


72









	
  

 	
  

 	
  

 
	
 17.2

 	
 Submission
 to jurisdiction - Agent

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 For the exclusive benefit of the Bank, each of the Borrowers and the
 Corporate Guarantor hereby irrevocably submits to the non-exclusive
 jurisdiction of the High Court of Justice in London, England. Further, each
 of the Borrowers and the Corporate Guarantor agrees that any summons, writ or
 other legal process issued against them in England shall be served upon MR. RICHARD COLEMAN c/o H. Clarkson and Co.
 Ltd., presently located at 3 Lower Thames Street, London EC3R 6HE, England or
 his successors, who is hereby authorised to accept such service, which shall
 be deemed to be good service on the Borrowers and the Corporate Guarantor; provided,
 however, that each of the Borrowers and the Corporate Guarantor further
 agrees that in the event that (i) MR. RICHARD COLEMAN,
 closes or fails to maintain a business presence in England, or (ii) the Bank,
 in its sole discretion, shall determine that service of process on the said
 agents is not feasible or may be insufficient under the Laws of England, then
 any summons, writ or other legal process issued against them in England may
 be served upon Messrs. The Law Debenture Corporate Services Limited, Fifth
 Floor, 100 Wood Street, London EC2V 7EX, England (hereinafter called the “Process Agent
 for English Proceedings”), or their successors, who are hereby
 authorised to accept such service, which shall be deemed to be good service
 on the Borrowers and the Corporate Guarantor. The Bank is hereby irrevocably
 appointed by each of the Borrowers and the Corporate Guarantor as the duly
 authorised agent of each of the Borrowers and the Corporate Guarantor and for
 the purpose of appointing the Process Agent for English Proceedings as
 provided herein. The appointment of the Process Agent for English Proceedings
 shall be valid and binding from the date notice of such appointment is given
 by the Bank to the Borrowers and the Corporate Guarantor in accordance with
 Clause 16.1.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The submission to the jurisdiction of the English courts shall not
 (and shall not be construed so as to) limit the right of the Bank to take
 proceedings against the Borrowers (or any of them) in the courts of any other
 competent jurisdiction nor shall the taking of proceedings in any one or more
 jurisdictions preclude the taking of proceedings in any other jurisdiction,
 whether concurrently or not.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The parties further agree that subject to Clause 17.2(b) the Courts
 of England shall have exclusive jurisdiction to determine any claim which the
 Borrowers (or any of them) may have against the Bank arising out of or in
 connection with this Agreement and each of the Borrowers hereby waives any
 objections to proceedings with respect to this Agreement in such courts on
 the grounds of venue or inconvenient forum.

 
	
  

 	
  

 	
  

 
	
 17.3

 	
 Proceedings in any other country

 
	
  

 	
  

 	
  

 
	
  

 	
 If it is decided by the Bank that any such proceedings should be
 commenced in any other country, then any objections as to the jurisdiction or
 any claim as to the inconvenience of the forum is hereby waived by each of
 the Borrowers and it is agreed and undertaken by each of the Borrowers to
 instruct lawyers in that country to accept service of legal 

 


73









	
  

 	
  

 
	
  

 	
 process and not to contest the validity of such proceedings as far as
 the jurisdiction of the court or courts involved is concerned and each of the
 Borrowers agrees that any judgement or order obtained in an English court
 shall be conclusive and binding on the Borrowers (and each of them) and shall
 be enforceable without review in the courts of any other jurisdiction.

 
	
  

 	
  

 
	
 In this Clause 17 “proceedings” means proceedings of any
 kind, including an application for a provisional or protective measure.

 
	
  

 	
  

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

 


74






EXECUTION PAGE


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 THE BORROWERS 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
  

 	
  

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 	
  

 
	
 KELSEN SHIPPING CO.,

 	
 )

 	
  

 	
 /s/ Konstantinos Zacharatos

 	
  

 
	
 of Liberia,
 in the presence of:

 	
 )

 	
  

 	
 Attorney-in-fact

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/ Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
  

 	



 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
 Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
 Address:

 	
 13 Defteras Merarchias
 Street

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Piraeus, Greece

 	
  

 	
  

 	
  

 	
  

 
	
 Occupation:

 	
 Attorney-at-law

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
  

 	
  

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 	
  

 
	
 MONTES SHIPPING CO.,

 	
 )

 	
  

 	
 /s/ Konstantinos Zacharatos

 	
  

 
	
 of Liberia,
 in the presence of:

 	
 )

 	
  

 	
 Attorney-in-fact

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/ Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
  

 	



 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
 Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
 Address:

 	
 13 Defteras Merarchias
 Street

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Piraeus, Greece

 	
  

 	
  

 	
  

 	
  

 
	
 Occupation:

 	
 Attorney-at-law

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 THE CORPORATE GUARANTOR

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
  

 	
  

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 	
  

 
	
 COSTAMARE SHIPPING COMPANY S.A.

 	
 )

 	
  

 	
 /s/ Konstantinos Zacharatos

 	
  

 
	
 of Panama,
 in the presence of:

 	
 )

 	
  

 	
 Attorney-in-fact

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/ Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
  

 	



 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
 Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
 Address:

 	
 13 Defteras Merarchias
 Street

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Piraeus, Greece

 	
  

 	
  

 	
  

 	
  

 
	
 Occupation:

 	
 Attorney-at-law

 	
  

 	
  

 	
  

 	
  

 


75









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 THE BANK 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
  

 	
  

 	
  

 
	
 Mr. Christos Kokkinis

 	
 )

 	
  

 	
  

 	
  

 
	
 and Mr. Konstantinos
 Sotiriou

 	
 )

 	
  

 	
 /s/ Christos Kokkinis

 	
  

 
	
 for and on behalf of

 	
 )

 	
  

 	
 Attorney-in-fact

 	
  

 
	
 ALPHA BANK A.E.

 	
 )

 	
  

	
  

 	
  

 
	
 in the presence of:

 	
 )

 	
  

 	
/s/ Konstantinos Zacharatos

 	
  

 
	
  

 	
  

 	
  

 	
  Attorney-in-fact



 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/ Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
  

 	



 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
 Charalambos V. Sioufas

 	
  

 	
  

 	
  

 	
  

 
	
 Address:

 	
 13 Defteras Merarchias
 Street

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Piraeus, Greece

 	
  

 	
  

 	
  

 	
  

 
	
 Occupation:

 	
 Attorney-at-law

 	
  

 	
  

 	
  

 	
  

 


76





SCHEDULE 1


FORM OF DRAWDOWN NOTICE
(referred to in Clause 2.2)


	
  

 	
  

 	
  

 
	
 To:

 	
 ALPHA BANK A.E.

 	
  

 
	
  

 	
 89 Akti
 Miaouli

 	
  

 
	
  

 	
 Piraeus,
 Greece

 	
 [ ]
 December, 2007

 
	
  

 	
  

 	
  

 
	
 Re:

 	
 US$150,000,000 Loan Agreement (the “Loan Agreement”) dated [ ]
 December, 2007 made between (1) the Bank, as lender and (2) Kelsen Shipping
 Co. and Montes Shipping Co., as joint and several borrowers (the “Borrowers”).

 
	
  

 	
  

 
	
 We refer to the Loan Agreement and hereby give you notice that we
 wish to draw the full amount of Tranche [A] [B] in the amount of $75,000,000
 (Seventy five million Dollars) on [ ]
 December, 2007. We select a first Interest Period in respect of the Loan of [ ]
 months/ terminating on [ ],
 200.... The funds should be credited to ([ ]
 [name
 and number of account] [ ])
 with [ ], New York, USA.

 


We confirm that:


	
  

 	
  

 
	
 (i)

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

 
	
  

 	
  

 
	
 (ii)

 	
 the representations and warranties contained in Clause 6 of the Loan
 Agreement and the representations and warranties contained in each of the
 other Security Documents are true and correct at the date hereof as if made
 with respect to the facts and circumstances existing at such date;

 
	
  

 	
  

 
	
 (iii)

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

 
	
  

 	
  

 
	
 (iv)

 	
 there has been no change in the ownership, management, operations or
 financial condition of any of the Security Parties from that previously
 disclosed to the Bank in writing other than [ ]

 
	
  

 	
  

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

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
  

 	
  

 	
  

 
	
 Mr.

 	
 )

 	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 	
  

 
	
 KELSEN SHIPPING CO.

 	
 )

 	
  

 	
  

 	
  

 
	
 of Liberia
 in the presence of:

 	
 )

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	



 	
  

 	
  

 	
  

 	
  

 


77









	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
  

 	
  

 
	
 Address:

 	
  

 	
  

 	
  

 	
  

 
	
 Occupation:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
  

 	
  

 	
  

 
	
 Mr.

 	
 )

 	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 	
  

 
	
 MONTES SHIPPING CO.,

 	
 )

 	
  

 	
  

 	
  

 
	
 of Liberia
 in the presence of:

 	
 )

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	



 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Address:

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Occupation:

 	
  

 	
  

 	
  

 	
  

 	
  

 


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