EX-4.25





Private and Confidential




DATED February 2008




STEALTHGAS INC.

as Borrower




and




DEUTSCHE BANK AG

FILIALE DEUTSCHLANDGESCHÄFT

as Lender




 





FACILITY AGREEMENT FOR A

TERM LOAN of up to

USD40,250,000


 











 









 





Index




	 	 	 	 	 
	Clause	 	Page
	 
	 	 	 	 
	1     PURPOSE, DEFINITIONS, CONSTRUCTION

	 	 	3	 
	 
	 	 	 	 
	2     THE LENDER’S COMMITMENT, LOAN AND USE OF PROCEEDS

	 	 	10	 
	 
	 	 	 	 
	3     INTEREST AND INTEREST PERIODS

	 	 	11	 
	 
	 	 	 	 
	4     REPAYMENT AND PREPAYMENT

	 	 	13	 
	 
	 	 	 	 
	5     FEES AND EXPENSES

	 	 	15	 
	 
	 	 	 	 
	6     PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS

	 	 	16	 
	 
	 	 	 	 
	7     REPRESENTATIONS AND WARRANTIES

	 	 	17	 
	 
	 	 	 	 
	8     UNDERTAKINGS

	 	 	21	 
	 
	 	 	 	 
	9     CONDITIONS

	 	 	27	 
	 
	 	 	 	 
	10    EVENTS OF DEFAULT

	 	 	28	 
	 
	 	 	 	 
	11    INDEMNITIES

	 	 	31	 
	 
	 	 	 	 
	12    UNLAWFULNESS AND INCREASED COSTS

	 	 	32	 
	 
	 	 	 	 
	13    APPLICATION OF MONEYS, SET OFF, AND MISCELLANEOUS

	 	 	33	 
	 
	 	 	 	 
	14    ACCOUNTS AND RETENTIONS

	 	 	35	 
	 
	 	 	 	 
	15    ASSIGNMENT, TRANSFER AND LENDING OFFICE

	 	 	36	 
	 
	 	 	 	 
	16    NOTICES AND OTHER MATTERS

	 	 	37	 
	 
	 	 	 	 
	17    GOVERNING LAW

	 	 	38	 
	 
	 	 	 	 
	18    JURISDICTION

	 	 	38	 
	 
	 	 	 	 
	SCHEDULE 1 FORM OF DRAWDOWN NOTICE

	 	 	41	 
	 
	 	 	 	 
	SCHEDULE 2 CONDITIONS PRECEDENT PART 1

	 	 	42	 
	 
	 	 	 	 
	CONDITIONS PRECEDENT PART 2

	 	 	43	 
	 
	 	 	 	 
	SCHEDULE 3 FORM OF COMPLIANCE CERTIFICATE

	 	 	545	 
	 
	 	 	 	 
	EXECUTION PAGES

	 	 	56	 







 











 




THIS AGREEMENT dated            February 2008 is made BY and BETWEEN:





	(1)	 	STEALTHGAS INC. as Borrower;
	 
	(2)	 	DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT as Lender;




NOW IT IS HEREBY AGREED AS FOLLOWS:





	1	 	PURPOSE, DEFINITIONS, CONSTRUCTION
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions on which the Lender agrees to make
available to the Borrower a term loan of up to forty million two hundred and fifty
thousand Dollars (USD 40,250,000) in one advance for the purpose of enabling the Borrower
to on-lend the same to its subsidiary MR Roi Inc. to finance the purchase of the oil
products and chemical tanker of 48,000 dwt under construction by Sungdong Shipbuilding and
Marine Engineering Co. Ltd. of South Korea with Hull no. 3014 (tbr “NAVIG8 FAITH”).
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	“Approved Broker” means each of (i) H Clarkson & Co. Ltd. of St Magnus House, 3 Lower
Thames Street, London EC3R 6HE, England, (ii) RS Platou of Haakon VII’s gate 10
N-0119 Oslo Norway, (iii) Galbraiths of Bridgegate House, 124-126 Borough High
Street, London SE1 1BL, England, (iv) Fearnleys of Grev Wedels Plass 9, P.O.Box 1158,
Sentrum 0107 Oslo, Norway and (v) AP Moeller of Copenhagen or such other reputable,
independent and first class firm of shipbrokers specialising in the valuation of
vessels of the relevant type appointed by the Lender and agreed with the Borrower;
	 
	 	 	“Approved Charter” means, in relation to the Vessel, the seven year bareboat charterparty
dated 23 November 2007 made between the Guarantor and the Approved Charterer at a daily
charterhire rate of USD15,295 (USD15,200 net);
	 
	 	 	“Approved Charterer” means Navig8 Faith Corporation of the Marshall Islands;
	 
	 	 	“Approved Manager” means, in respect of the Vessel when subject to the Approved Charter,
or an Extended Employment Contract (as the case may be) such person as is notified to and
accepted by the Lender prior to the Execution Date as technical manager and at all other
times, and at all times as commercial manager, Stealth Maritime Corporation S.A. acting
through its office at 331 Kifissias Avenue, 145 61, Athens, Greece, or any other person
appointed by the Borrower, with the prior written consent of the Lender, as the manager of
the Vessel;
	 
	 	 	“Banking Day” means a day on which dealings in deposits in USD are carried on in the
London Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks
are open for business in London, Athens, Hamburg and New York City (or any other relevant
place of payment under clause 6);




 









 












	 	 	“Borrowed Money” means Indebtedness in respect of (i) money borrowed or raised and debit
balances at banks, (ii) any bond, note, loan stock, debenture or similar debt instrument,
(iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted
(otherwise than on a non-recourse basis), (v) deferred payments for assets or services acquired, (vi)
finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts,
futures and other derivatives, (viii) any other transaction (including without limitation
forward sale or purchase agreements) having the commercial effect of a borrowing or
raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of
Indebtedness of any person falling within any of (i) to (viii) above;
	 
	 	 	“Borrower” means StealthGas Inc., a company listed in NASDAQ and incorporated in the
Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Marshall Islands, MH96960;
	 
	 	 	“Break Costs” means the aggregate amount of all losses, premiums, penalties, costs and
expenses whatsoever certified by the Lender at any time and from time to time as having
been incurred by the Lender in maintaining or funding the Loan or any part thereof or in
liquidating or re-employing fixed deposits acquired to maintain the same as a result of
either:






	 	(a)	 	any repayment or prepayment of the Loan or any part thereof otherwise than
(i) in accordance with clause 4.1 or (ii) on an Interest Payment Date whether on a
voluntary or involuntary basis or otherwise howsoever; or
	 
	 	(b)	 	as a result of the Borrower failing or being incapable of drawing the Loan
after the Drawdown Notice has been given;






	 	 	“Builder” means Sungdong Shipbuilding and Marine Engineering Co. Ltd. of South Korea;
	 
	 	 	“Certified Copy” means in relation to any document delivered or issued by or on behalf of
any company, a copy of such document certified as a true, complete and up to date copy of
the original by any of the directors or officers for the time being of such company or by
such company’s attorneys or solicitors;
	 
	 	 	“Charter Assignment” means a specific assignment of the Approved Charter, of any
assignment of earnings executed by the Approved Charterer in favour of the Guarantor and
of the Charter Guarantee or, following the expiry of the Approved Charter, of any Extended
Employment Contract required to be executed hereunder by the Guarantor in favour of the
Lender (including any notices and/or acknowledgements and/or undertakings associated
therewith) in such form as the Lender may require;
	 
	 	 	“Charter Guarantee” means the guarantee issued or to be issued by DVB Bank AG in favour of
the Guarantor for up to USD4,750,000 in respect of the Approved Charterer’s obligations
under the Approved Charter;
	 
	 	 	“Classification” means, in relation to the Vessel, the highest class available for a
vessel of her type with the Classification Society;
	 
	 	 	“Classification Society” means any classification society which is a member of the
International Association of Classification Societies and which the Lender has agreed
shall be treated as the classification society in relation to the Vessel for the purposes
of the Vessel Security Documents;
	 
	 	 	“Commitment” means the maximum amount which the Lender has agreed to lend to the Borrower
under clause 2.1, as reduced by any relevant term of this Agreement;




2









 












	 	 	“Compliance Certificate” means a certificate substantially in the form set out in schedule
3 signed by the chief financial officers of the Borrower and the Guarantor;
	 
	 	 	“Compulsory Acquisition” means, in respect of the Vessel, requisition for title or other
compulsory acquisition including, if that ship is not released therefrom within the
Relevant Period, capture, appropriation, forfeiture, seizure, detention, deprivation or
confiscation howsoever for any reason (but excluding requisition for use or hire) by or on
behalf of any Government Entity or other competent authority or by pirates, hijackers,
terrorists or similar persons; “Relevant Period” means for the purposes of this definition
of Compulsory Acquisition either (i) sixty (60) days or, (ii) if relevant underwriters
confirm in writing (in terms satisfactory to the Lender) prior to the end of such sixty
(60) day period that such capture, seizure, detention or confiscation will be fully
covered by the Guarantor’s war risks insurance for a further period exceeding ten (10)
calendar months, the shorter of twelve (12) months and such period at the end of which
cover is confirmed to attach;
	 
	 	 	“Credit Support Document” has in relation to the Master Agreement, the meaning given to
that expression therein;
	 
	 	 	“Credit Support Provider” means any person defined as such in the Master Agreement;
	 
	 	 	“Default” means any Event of Default or any event or circumstance which with the giving of
notice or lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
	 
	 	 	“Dollars” and “USD” 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 US dollar funds as may at the relevant time be customary for the settlement of
international banking transactions denominated in US dollars);
	 
	 	 	“Drawdown Date” means any date being a Banking Day falling during the Drawdown Period, on
which the Loan is, or is to be, made available;
	 
	 	 	“Drawdown Notice” means a notice substantially in the form of schedule 1;
	 
	 	 	“Drawdown Period” means the period commencing on the Execution Date and ending on the
earlier of (i) 30 April 2008 and (ii) any date on which the Loan is finally cancelled or
drawn under the terms of this Agreement;
	 
	 	 	“Earnings Account” means an interest bearing USD current account of the Guarantor opened
with the Lender and includes any sub-accounts thereof and any other account designated in
writing by the Lender to be the Earnings Account for the purposes of this Agreement;
	 
	 	 	“Earnings Account Pledge” means a first priority pledge required to be executed hereunder
between the Guarantor and the Lender in respect of the Earnings Account in such form as
the Lender may require;
	 
	 	 	“EBITDA” means, at any time, in respect of the preceding four financial quarters, the
aggregate amount of consolidated pre-tax profits of the Group before extraordinary or
exceptional items, interest, depreciation and amortisation;
	 
	 	 	“Encumbrance” means any mortgage, charge, pledge, lien, hypothecation, assignment, title
retention, preferential right, option, trust arrangement or security interest or other
encumbrance, security or arrangement conferring howsoever a priority of payment in respect
of any obligation of any person;




3









 












	 	 	“Environmental Affiliate” means any agent or employee of the Borrower, the Approved
Manager (but only in its capacity as technical manager of a Relevant Ship), the Guarantor
or any other Group Member;
	 
	 	 	“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
its operation or the carriage of cargo and/or passengers thereon and/or the provision of
goods and/or services on or from any Relevant Ship required under any Environmental Law;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable Government
Entity alleging breach of, or non-compliance with, any Environmental Laws or Environmental
Approvals or otherwise howsoever relating to or arising out of an Environmental Incident
or (ii) any claim by any other third party howsoever relating to or arising out of an
Environmental Incident (and, in each such case, “claim” shall include a claim for damages
and/or direction for and/or enforcement relating to clean-up costs, removal, compliance,
remedial action or otherwise) or (iii) any Proceedings arising from any of the foregoing;
	 
	 	 	“Environmental Incident” means, regardless of cause, (i) any actual or threatened
discharge or release of Environmentally Sensitive Material from any Relevant Ship; (ii)
any incident in which Environmentally Sensitive Material is discharged or released from a
vessel other than a Relevant Ship which involves collision between a Relevant Ship and
such other vessel or some other incident of navigation or operation, in either case, where
the Relevant Ship, the Approved Manager and/or the Guarantor and/or the relevant Group
Member and/or the relevant Operator are actually, contingently or allegedly at fault or
otherwise howsoever liable (in whole or in part) or (iii) any incident in which
Environmentally Sensitive Material is discharged or released from a vessel other than a
Relevant Ship and where such Relevant Ship is actually or potentially liable to be
arrested as a result and/or the Approved Manager and/or the Guarantor and/or other Group
Member and/or the relevant Operator are actually, contingently or allegedly at fault or
otherwise howsoever liable;
	 
	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements whatsoever
relating to pollution, human or wildlife well-being or protection of the environment
(including, without limitation, the United States Oil Pollution Act of 1990 and any
comparable laws of the individual States of the USA);
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products or any other products or
substance which are polluting, toxic or hazardous or any substance the release of which
into the environment is howsoever regulated, prohibited or penalised by or pursuant to any
Environmental Law;
	 
	 	 	“Event of Default” means any of the events or circumstances listed in clause 10.1;
	 
	 	 	“Execution Date” means the date on which this Agreement has been executed by all the
parties hereto;
	 
	 	 	“Extended Employment Contract” means any time charterparty, contract of affreightment or
other contract of employment of the Vessel (including the entry of the Vessel in any pool)
which has a tenor of not less than twelve (12) months (including any options to renew or
extend such tenor);
	 
	 	 	“Facility Period” means the period starting on the date of this Agreement and ending on
such date as all obligations whatsoever of all of the Security Parties under or pursuant
to the Security Documents whensoever arising, actual or contingent, have been irrevocably
paid, performed and/or complied with;




4









 












	 	 	“Free Cash Flow” means, at any time, in respect of the preceding four financial quarters
the amount calculated by reference to the Latest Accounts to be (a) the aggregate gross
revenue (as defined in the relevant Latest Accounts) of the Group received during such 12
month period, less (b) the aggregate of (i) costs incurred by the Group related to the
ownership and operation of ships and acceptable (to the Lender) administrative expenses
(each as set out in the relevant Latest Accounts), (ii) the Interest Expenses net of
interest income (as defined in the relevant Latest Accounts) of the Group and (iii) the
aggregate of any principal amounts repaid to any lender by the Group in respect of any
Borrowed Money during such 12 month period;
	 
	 	 	“General Assignment” means the first priority deed of assignment of the Earnings,
Insurances and Requisition Compensation (each as defined therein) executed or to be
executed by the Guarantor in favour of the Lender in such form as the Lender may require;
	 
	 	 	“Government Entity” means any national or local government body, tribunal, court or
regulatory or other agency and any organisation of which such body, tribunal, court or
agency is a part or to which it is subject;
	 
	 	 	“Group” means the Borrower and its subsidiaries;
	 
	 	 	“Group Member” means any member of the Group;
	 
	 	 	“Guarantee” means each unconditional, irrevocable and on first demand guarantee of the
obligations of the Borrower under this Agreement and the Master Agreement required to be
executed by the Guarantor in favour of the Lender in such form as the Lender may require;
	 
	 	 	“Guarantor” means MR Roi Inc. which is incorporated in the Marshall Islands, and has its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands, MH96960:
	 
	 	 	“Indebtedness” means any obligation howsoever arising (whether present or future, actual
or contingent, secured or unsecured as principal, surety or otherwise) for the payment or
repayment of money;
	 
	 	 	“Interest Expense” means, at any time, for the preceding four financial quarters, the
aggregate interest which was payable by the Group Members on any Borrowed Moneys during
such period;
	 
	 	 	“Interest Payment Date” means the last day of an Interest Period and, if an Interest
Period is longer than three (3) months, the date falling at the end of each successive
period of three (3) months from the start of such Interest Period;
	 
	 	 	“Interest Period” means each period for the calculation of interest in respect of the Loan
as ascertained in accordance with clauses 3.2 and 3.3;
	 
	 	 	“ISM Code Documentation” means, in relation to the Vessel, the document of compliance
(DOC) and safety management certificate (SMC) issued by a Classification Society pursuant
to the ISM Code in relation to the Vessel within the periods specified by the ISM Code;
	 
	 	 	“ISM SMS” means the safety management system which is required to be developed,
implemented and maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Security Code of the International
Maritime Organisation and includes any amendments or extensions thereto and any
regulations issued pursuant thereto;




5









 






	 	 	“ISSC” means an International Ship Security Certificate issued in respect of the Vessel
pursuant to the ISPS Code;
	 
	 	 	“Latest Accounts” means (i) in respect of any financial year of the Borrower and/or the
Guarantor and/or the Group, the latest audited financial statements required to be
prepared pursuant to clause 8.1.6 or (ii) in relation to any other 2 consecutive financial
half-years of the Borrower and/or the Group, the latest unaudited financial statements
required to be prepared pursuant to clause 8.1.6 in relation to the relevant semi-annual
periods;
	 
	 	 	“Lender” means Deutsche Bank AG Filiale Deutschlandgeschäft, Frankfurt am Main, Federal
Republic of Germany, acting through its office at Ludwig-Erhard-Strasse 1, 20459 Hamburg,
Germany;
	 
	 	 	“LIBOR” means, for a particular period, the rate equal to the offered quotation for
deposits in USD in an amount comparable with the amount in relation to which LIBOR is to
be determined for a period equal to, or as near as possible equal to, the relevant period
which appears on Reuters Screen LIBOR01 at or about 11 a.m. on the second Banking Day
before the first day of such period (and, for the purposes of this Agreement, “Reuters
Screen LIBOR01” means the display designated as “LIBOR01” on the Reuters Service or such
other page as may replace LIBOR01 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 USD);
	 
	 	 	“Loan” means the aggregate principal amount of up to USD40,250,000 or, as the context may
require, the amount owing to the Lender under this Agreement at any relevant time;
	 
	 	 	“Management Agreement” means, in respect of the Vessel, the agreement between the
Guarantor and the Approved Manager, in a form previously approved by the Lender;
	 
	 	 	“Manager’s Undertaking” means the undertaking and assignment required to be executed
hereunder by the Approved Manager in favour of the Lender in respect of the Vessel, in
such form as the Lender may require;
	 
	 	 	“Margin” means, in relation to each Interest Period, 0.70% per annum;
	 
	 	 	“Master Agreement” means a 2002 ISDA Master Agreement (with Schedule thereto) made or to
be made between the Lender (using the name Deutsche Bank AG) and the Borrower;
	 
	 	 	“Master Agreement Assignment” means the security deed in respect of the Master Agreement
executed or to be executed by the Borrower in favour of the Lender in such form as the
Lender may require;
	 
	 	 	“Material Adverse Change” means any event or occurrence which the Lender reasonably
determines has had or could reasonably be expected to have a material adverse effect on
(i) the Lender’s rights under, or the security provided by, any Security Document, (ii)
the ability of any Security Party to perform or comply with any of its obligations under
any Security Document or (iii) the value or nature of the property, assets, operations,
liabilities or financial condition of any member of the Group;
	 
	 	 	“Maturity Date” means the earlier of (i) 30 April 2020 and (ii) the date falling 12 years
after the Drawdown Date;
	 
	 	 	“MII & MAP Policy” means a mortgagee’s interest insurance and a mortgagee’s interest
insurance additional perils (pollution) in respect of the Vessel to be effected by the
Lender on




6









 






	 	 	or before the Drawdown Date to cover the Vessel as the same may be renewed or replaced
annually thereafter and maintained throughout the Facility Period through such brokers,
with such underwriters and containing such coverage as may be acceptable to the Lender in
its sole discretion, insuring with respect to mortgagee’s interest insurance a sum of at
least one hundred and ten per cent (110%) of the Loan;
	 
	 	 	“MOA” means the memorandum of agreement dated 27 November 2007 made in respect
of the Vessel between the Seller and the Guarantor as buyer for a gross purchase
price of USD 57,500,000;
	 
	 	 	“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 (a) if the period started on the last Banking Day in a calendar
month or if there is no such numerically corresponding day, it shall end on the last
Banking Day in such next calendar month and (b) if such numerically corresponding day is
not a Banking Day, the period shall end on the next following Banking Day in the same
calendar month but if there is no such Banking Day it shall end on the preceding Banking
Day and “months” and “monthly” shall be construed accordingly;
	 
	 	 	“Mortgage” means the first preferred Marshall Islands Ship mortgage over the Vessel
required to be executed by the Guarantor in favour of the Lender in such form as the
Lender may require;
	 
	 	 	“Operator” means any person who is from time to time during the Facility Period concerned
in the operation of a Relevant Ship and falls within the definition of “Company” set out
in rule 1.1.2 of the ISM Code;
	 
	 	 	“Permitted Encumbrance” means any Encumbrance in favour of the Lender created pursuant to
the Security Documents and Permitted Liens;
	 
	 	 	“Permitted Liens” means any lien on the Vessel for master’s, officer’s 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 Lender) exceeding the Casualty Amount (as defined in the Vessel Security
Documents);
	 
	 	 	“Pertinent Jurisdiction” means any jurisdiction in which or where any Security Party is
incorporated, resident, domiciled, has a permanent establishment or assets, carries on, or
has a place of business or is otherwise howsoever effectively connected;
	 
	 	 	“Proceedings” means any litigation, arbitration, legal action or complaint or judicial,
quasi-judicial or administrative proceedings whatsoever arising or instigated by anyone
(private or governmental) in any court, tribunal, public office or other forum whatsoever
and wheresoever (including, without limitation, any action for provisional or permanent
attachment of any thing or for injunctive remedies or interim relief and any action
instigated on an ex parte basis);
	 
	 	 	“Registry” means, in relation to the Vessel, the office of the registrar, commissioner or
representative of the Marshall Islands, who is duly empowered to register such Vessel, the
Guarantor’s title thereto and the Mortgage under the laws and flag of the Marshall
Islands;
	 
	 	 	“Relevant Ship” means the Vessel and any other ship from time to time (whether before or
after the date of this Agreement) owned, managed or crewed by, or chartered to, any Group
Member;




7









 






	 	 	“Repayment Date” means the date on which any instalment of the Loan is repayable
under the provisions of clause 4.1.1;
	 
	 	 	“Required Authorisation” means any authorisation, consent, declaration, licence, permit,
exemption, approval or other document, whether imposed by or arising in connection with
any law, regulation, custom, contract, security or otherwise howsoever which must be
obtained at any time from any person, Government Entity, central bank or other
self-regulating or supra-national authority in order to enable the Borrower lawfully to
borrow the Loan and/or to enable any Security Party lawfully and continuously to continue
its corporate existence and/or perform all its obligations whatsoever whensoever arising
and/or grant security under the relevant Security Documents and/or to ensure the
continuous validity and enforceability thereof;
	 
	 	 	“Required Security Amount” means the amount in USD (as certified by the Lender) which is
at any time one hundred and twenty five per cent (125%) of the Loan;
	 
	 	 	“Security Documents” means this Agreement, the Master Agreement, the Master Agreement
Assignment, the Mortgage, the Guarantee, the General Assignment, the Charter Assignment,
the Earnings Account Pledge, the Manager’s Undertaking, the Tripartite Deed and any other
documents as may have been or shall from time to time after the date of this Agreement be
executed to guarantee and/or to govern and/or secure all or any part of the Loan, interest
thereon and other moneys from time to time owing by the Borrower pursuant to this
Agreement and/or the Master Agreement (whether or not any such document also secures
moneys from time to time owing pursuant to any other document or agreement);
	 
	 	 	“Security Party” means the Borrower, the Approved Manager, the Guarantor or any other
person who may at any time be a party to any of the Security Documents (other than the
Lender);
	 
	 	 	“Security Value” means the amount in USD (as certified by the Lender) which is, at
any time, the aggregate of (a) the Valuation Amount of the Vessel as most recently
determined in accordance with clause 8.2.2 and (b) the net realizable market value of any
additional security for the time being actually provided to the Lender pursuant to clause
8.2.1(b) or otherwise;
	 
	 	 	“Seller” means Navig8 Faith Corporation of the Marshall Islands;
	 
	 	 	“subsidiary” of a person means any company or entity directly or indirectly
controlled by such person, and for this purpose “control” means either the ownership of
more than fifty per cent (50%) of the voting share capital (or equivalent rights of
ownership) of such company or entity or the power to direct its policies and management,
whether by contract or otherwise;
	 
	 	 	“Taxes” includes all present and future income, corporation, capital or value-added
taxes and all stamp and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and penalties in respect thereto,
if any, and charges, fees or other amounts made on or in respect thereof (and “Taxation”
shall be construed accordingly);
	 
	 	 	“Total Assets” and “Total Debt” shall have the meanings assigned to them in accordance
with International Financial Reporting Standards;
	 
	 	 	“Total Loss” means:






	 	(a)	 	actual, constructive, compromised or arranged total loss of the Vessel; or
	 
	 	(b)	 	Compulsory Acquisition; or




8









 












	 	(c)	 	any hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of the Vessel not falling within the definition of Compulsory
Acquisition by any Government Entity, or by persons allegedly acting or purporting
to act on behalf of any Government Entity, unless the Vessel be released and restored
to the Guarantor within thirty (30) days after such incident;






	 	 	“Transaction” means a Transaction as defined in the Master Agreement;
	 
	 	 	“Tripartite Deed” means the deed containing (inter alia) an assignment of the Approved
Charterer’s interest in the insurances of the Vessel, required to be executed by the
Guarantor and Approved Charterer in favour of the Lender in such form as the Lender may
require in its sole discretion;
	 
	 	 	“Underlying Documents” means, together, any Extended Employment Contracts, the
Approved Charter, the Charter Guarantee, any assignment of earnings executed by the
Approved Charterer in favour of the Guarantor and the Management Agreement;
	 
	 	 	“Unencumbered Liquid Assets” means cash or cash equivalents (including marketable
securities) which are not subject, at any relevant time, to any Encumbrance;
	 
	 	 	“Unlawfulness” means any event or circumstance which either is or, as the case may be,
might in the opinion of the Lender become the subject of a notification by the Lender to
the Borrower under clause 12.1;
	 
	 	 	“Valuation Amount” means the value of the Vessel as most recently determined under clause
8.2.2;
	 
	 	 	“Vessel” means the oil products and chemical tanker presently being constructed by the
Builder with Hull no. 3014 and to be acquired by the Guarantor and registered in its
ownership on the Marshall Islands flag with the name “NAVIG8 FAITH”; and
	 
	 	 	“Vessel Security Documents” means the Mortgage, the General Assignment, the Charter
Assignment (if any), the Tripartite Deed and the Manager’s Undertaking (if any);
	 
	1.3	 	Construction
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	1.3.1	 	clause headings and the index are inserted for convenience of reference only and shall be
ignored in the construction of this Agreement;
	 
	1.3.2	 	references to clauses and schedules are to be construed as references to clauses of, and
schedules to, this Agreement and references to this Agreement include its schedules and any
supplemental agreements executed pursuant hereto;
	 
	1.3.3	 	references to (or to any specified provision of) this Agreement or any other document shall
be construed as references to this Agreement, that provision or that document as in force for
the time being and as duly amended and/or supplemented and/or novated;
	 
	1.3.4	 	references to a “regulation” include any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law) of any Government
Entity, central bank or any self-regulatory or other supra-national authority;
	 
	1.3.5	 	references to any person in or party to this Agreement shall include reference to such
person’s lawful successors and assigns;




9









 












	1.3.6	 	words importing the plural shall include the singular and vice versa;
	 
	1.3.7	 	references to a time of day are, unless otherwise stated, to Frankfurt am Main time;
	 
	1.3.8	 	references to a person shall be construed as references to an individual, firm, company,
corporation or unincorporated body of persons or any Government Entity;
	 
	1.3.9	 	references to a “guarantee” include references to an indemnity or any other kind of
assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill
or note) against financial loss or other liability including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any other person to
pay any Indebtedness and “guaranteed” shall be construed accordingly;
	 
	1.3.10	 	references to any statute or other legislative provision are to be construed as references
to any such statute or other legislative provision as the same may be re enacted or modified
or substituted by any subsequent statute or legislative provision (whether before or after the
date hereof) and shall include any regulations, orders, instruments or other subordinate
legislation issued or made under such statute or legislative provision;
	 
	1.3.11	 	a certificate by the Lender as to any amount due or calculation made or any matter
whatsoever determined in connection with this Agreement shall be conclusive and binding on the
Borrower except for manifest error;
	 
	1.3.12	 	time shall be of the essence in respect of all obligations whatsoever of the Borrower under
this Agreement, howsoever and whensoever arising;
	 
	1.3.13	 	and the words “other” and “otherwise” shall not be construed eiusdem generis with any
foregoing words where a wider construction is possible.
	 
	1.4	 	Contracts (Rights of Third Parties Act) 1999
	 
	 	 	Except for clause 18, no part of this Agreement shall be enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
	 
	2	 	THE LENDER’S COMMITMENT, LOAN AND USE OF PROCEEDS
	 
	2.1	 	The Commitment
	 
	 	 	In reliance upon each of the representations and warranties in clause 7, the Lender agrees
to lend to the Borrower on the terms of this Agreement the principal sum of up to
USD40,250,000.
	 
	2.2	 	Advance
	 
	 	 	On the terms and subject to the conditions of this Agreement, the Loan shall be made
available on the Drawdown Date following receipt by the Lender from the Borrower of a
Drawdown Notice not later than 11.00 a.m. on the second Banking Day before the proposed
Drawdown Date. The Drawdown Notice shall be effective on actual receipt by the Lender
and, once given, shall, subject as provided in clause 3.6.1, be irrevocable.
	 
	2.3	 	Amount
	 
	 	 	The principal amount specified in the Drawdown Notice for borrowing on the Drawdown Date
shall, subject to the terms of this Agreement, not exceed the lesser of (i) 70% of the
gross purchase price payable by the Guarantor to the Seller under the MOA or (ii) USD
40,250,000




10









 






	 	 	provided that if drawdown of the Loan in such amount would immediately oblige the Borrower
to provide additional security or make a prepayment of the Loan in accordance with Clause
8.2, then the amount of the Loan shall be reduced so that no such additional security or
prepayment would be required.






	2.4	 	Availability
	 
	 	 	Upon receipt of the Drawdown Notice complying with the terms of this Agreement the Lender
shall, subject to the provisions of clause 9, make the Loan available to the Borrower on
the Drawdown Date. The Borrower acknowledges that payment of the Loan to the Seller or to
a suspense account in readiness for release to the Seller shall satisfy the obligation of
the Lender to lend the Loan to the Borrower under this Agreement.
	 
	2.5	 	Cancellation
	 
	 	 	If the Loan is not drawn down by the end of the Drawdown Period, the Commitment shall
thereupon be automatically cancelled and the Lender shall have no further obligation in
respect thereof under this Agreement.
	 
	2.6	 	Use of Proceeds
	 
	 	 	Without prejudice to the Borrower’s obligations under clause 8.1.4, the Lender shall have
no responsibility for the Borrower’s use of the proceeds of the Loan.
	 
	3	 	INTEREST AND INTEREST PERIODS
	 
	3.1	 	Normal interest rate
	 
	 	 	The Borrower must pay interest on the Loan in respect of each Interest Period relating
thereto on each Interest Payment Date at the rate per annum determined by the Lender to be
the aggregate of (a) the Margin and (b) LIBOR.
	 
	3.2	 	Selection of Interest Periods
	 
	 	 	Subject to clause 3.3, the Borrower may by notice received by the Lender not later than
10:00 a.m. on the fourth Banking Day before the beginning of each Interest Period specify
whether such Interest Period shall have a duration of three (3) months, six (6) or twelve
(12) months or such other period as the Borrower may select and the Lender may agree.
	 
	3.3	 	Determination of Interest Periods
	 
	 	 	Subject to Clause 3.3.1 every Interest Period shall be of the duration specified by the
Borrower pursuant to clause 3.2 but so that:
	 
	 	 	the first Interest Period shall start on the date the Loan is drawn and each
subsequent Interest Period shall start on the last day of the previous Interest
Period;
	 
	3.3.1	 	if any Interest Period would otherwise overrun a relevant Repayment Date, then the Loan
shall be divided into parts so that there is one part in the amount of the repayment
instalment due on such Repayment Date and having an Interest Period ending on the relevant
Repayment Date and another part in the amount of the balance of the Loan having an Interest
Period ascertained in accordance with clause 3.2 and the other provisions of this clause 3.3;
and




11









 












	3.3.2	 	if the Borrower fails to specify the duration of an Interest Period in accordance with the
provisions of clause 3.2 and this clause 3.3, such Interest Period shall have a duration of
three (3) months or such other period as shall comply with this clause 3.3.
	 
	3.4	 	Default interest
	 
	 	 	If the Borrower fails to pay any sum (including, without limitation, any sum payable
pursuant to this clause 3.4) on its due date for payment under any of the Security
Documents (other than the Master Agreement), the Borrower must pay interest on such sum on
demand from the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Lender pursuant to this clause 3.4. The period
starting on such due date and ending on such date of payment shall be divided into
successive periods of not more than three (3) months as selected by the Lender each of
which (other than the first, which shall start on such due date) shall start on the last
day of the preceding such period. The rate of interest applicable to each such period
shall be the aggregate (as determined by the Lender) of (a) two per cent (2%) per annum,
(b) the Margin and (c) LIBOR for such periods. Such interest shall be due and payable on
demand, or, if no demand is made, then on the last day of each such period as determined
by the Lender and on the day on which all amounts in respect of which interest is being
paid under this clause 3.4 are paid, 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 an
amount of principal which became due and payable by reason of a declaration by the Lender
under clause 10.2.2 or a prepayment pursuant to clauses 4.3, 4.4, 8.2.1(a) or 12.1, on a
date other than an Interest Payment Date relating thereto, the first such period selected
by the Lender 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 of two per cent (2%) above the rate applicable
thereto immediately before it shall have become so due and payable. If, for the reasons
specified in clause 3.6.1, the Lender is unable to determine a rate in accordance with the
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 Lender to be two per cent (2%) per annum
above the aggregate of the Margin and the cost of funds to the Lender compounded at such
intervals as the Lender selects.
	 
	3.5	 	Calculation of Margin and Notification of Interest Periods and interest rate
	 
	 	 	The Lender shall notify the Borrower promptly of each rate of interest determined by it
under this clause 3.
	 
	3.6	 	Market disruption; non-availability
	 
	3.6.1	 	Whenever, at any time prior to the start of any Interest Period, the Lender determines:






	 	(a)	 	that adequate and fair means do not exist for determining LIBOR during such
Interest Period; or
	 
	 	(b)	 	that deposits in USD are not available to the Lender in the London
Interbank Market in its ordinary course of business in sufficient amounts to fund the
Loan for such Interest Period;






	 	 	the Lender shall promptly give notice (a “Determination Notice”) thereof to the Borrower.
A Determination Notice shall give brief details of the circumstances giving rise to its
issue.
	 
	3.6.2	 	within ten (10) days of any Determination Notice being given by the Lender under clause
3.6.1, the Lender must certify an alternative basis (the “Substitute Basis”) for maintaining
the Loan. The Substitute Basis may include alternative interest periods, alternative
currencies or




12









 






	 	 	alternative rates of interest but must include a
margin above the cost of funds take effect in
accordance with its terms from the date specified
in the Determination Notice until such time as
the Lender notifies the Borrower that none of the
circumstances specified in clause 3.6.1 continues
to exist whereupon the normal interest rate
fixing provisions of this Agreement shall again
apply.






	4	 	REPAYMENT AND PREPAYMENT
	 
	4.1	 	Repayment
	 
	4.1.1	 	Subject to any obligation to pay earlier under this Agreement, the Borrower must repay the
Loan by 47 quarterly instalments of USD 625,000 each and a final balloon instalment in the
amount of USD 10,875,000 (the “Balloon Instalment”) the first such instalment falling due 3
months after the Drawdown Date and subsequent instalments falling due at three-monthly
intervals thereafter, with the final instalment falling due on the Maturity Date,
	 
	 	 	provided that if less than the Commitment is drawn down, then each such repayment
instalment shall be reduced pro rata by the amount of, in aggregate, such undrawn amount.
	 
	4.1.2	 	The Borrower shall on the Maturity Date also pay to the Lender all other amounts in respect
of interest or otherwise then due and payable under this Agreement and the Security Documents.
	 
	4.2	 	Voluntary prepayment
	 
	 	 	Subject to clauses 4.5, 4.6 and 4.7 the Borrower may, subject to having given 3 Banking
Days’ prior notice thereof to the Lender, prepay any specified amount (such part being in
an amount of five hundred thousand Dollars (USD 500,000) or any larger sum which is an
integral multiple of such amount) of the Loan on the last day of any relevant Interest
Period without premium or penalty.
	 
	4.3	 	Mandatory Prepayment on Total Loss
	 
	 	 	On the date falling one hundred and fifty (150) days after that on which the Vessel became
a Total Loss or, if earlier, on the date upon which the insurance proceeds are, or
Requisition Compensation (as defined in the Mortgage) is, received by the Guarantor (or
the Lender pursuant to the Security Documents) the Borrower must prepay the Loan.
	 
	4.3.1	 	Interpretation
	 
	 	 	For the purpose of this Agreement, a Total Loss shall be deemed to have occurred:






	 	(a)	 	in the case of an actual total loss of the Vessel, on the actual date and
at the time the Vessel was lost or, if such date is not known, on the date on which
the Vessel was last reported;
	 
	 	(b)	 	in the case of a constructive total loss of the Vessel, upon the date and
at the time notice of abandonment of the ship is given to the then insurers of the
Vessel or, if such insurers do not immediately admit such a claim, at the earliest of
(i) the date and at the time at which either a total loss is subsequently admitted by
such insurers or (ii) a total loss is subsequently adjudged by a competent court of
law or arbitration tribunal to have occurred or (iii) the date on which the relevant
notice of abandonment has been given;




13









 












	 	(c)	 	in the case of a compromised or arranged total loss of the Vessel, on the
date upon which a binding agreement as to such compromised or arranged total loss has
been entered into by the then insurers of the Vessel;
	 
	 	(d)	 	in the case of Compulsory Acquisition, on the date upon which the relevant
requisition of title or other compulsory acquisition occurs; and
	 
	 	(e)	 	in the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Vessel (other than within the definition of
Compulsory Acquisition) by any Government Entity, or by persons allegedly acting or
purporting to act on behalf of any Government Entity, which deprives the Guarantor of
the use of the Vessel for more than thirty (30) days, upon the expiry of the period
of thirty (30) days after the date upon which the relevant incident occurred.






	4.4	 	Mandatory prepayment on sale of Vessel
	 
	 	 	On the date of completion of the sale of the Vessel the Borrower must prepay the Loan.
	 
	4.5	 	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 clauses 3.6, 6.6 or 12.2; and
	 
	 	(c)	 	all other sums payable by the Borrower to the Lender under this Agreement
or any of the other Security Documents including, without limitation any Break Costs.






	4.6	 	Notice of prepayment; reduction of repayment instalments
	 
	4.6.1	 	Every notice of prepayment shall be effective only on actual receipt by the Lender, shall be
irrevocable, shall specify the amount to be prepaid and shall oblige the Borrower to make such
prepayment on the date specified.
	 
	4.6.2	 	Subject to the other provisions of this Agreement, no amount prepaid under this Clause 4 in
respect of the Loan may be reborrowed.
	 
	4.6.3	 	Any amount prepaid pursuant to clause 4.2 shall be applied first against the Balloon
Instalment and thereafter against the remaining repayment instalments specified in clause
4.1.1 in inverse order of their maturity.
	 
	4.6.4	 	The Borrower may not prepay the Loan except as expressly provided in this Agreement.
	 
	4.7	 	Master Swap Agreement, Repayments and Prepayments
	 
	4.7.1	 	Notwithstanding any provision of the Master Agreement to the contrary, in the case of a
prepayment of all or part of the Loan, the Lender shall be entitled but not obliged to take
any action it deems appropriate in relation to all or any part of the rights, benefits and
obligations created by any Transaction and/or the Master Agreement and/or to obtain or
re-establish any hedge or related trading position in any manner it may reasonably determine
in order to match such Transaction to the amended repayment schedule for the Loan.
	 
	4.7.2	 	If less than the full amount of the Loan remains outstanding following a prepayment and the
Lender agrees, following a written request of the Borrower, that the Borrower may maintain




14









 







	 	 	all or part of a Transaction in an amount not wholly matched with or linked to all or part
of the Loan, the Borrower shall within fifteen (15) days of being notified by the Lender
of such requirement, provide the Lender with such additional security as shall be adequate
to secure the performance of such Transaction, which additional security shall take such
form, be constituted by such documentation and be entered into between such parties, as
the Lender may approve or require, and each document comprising such additional security
shall constitute a Credit Support Document.






	4.7.3	 	The Borrower shall on the first written demand of the Lender indemnify the Lender in respect
of all losses, costs and expenses (including, but not limited to, legal costs and expenses)
incurred or sustained by the Lender as a consequence of or in relation to the effecting of any
matter or transactions referred to in this clause 4.7.
	 
	5	 	FEES AND EXPENSES
	 
	5.1	 	Fees
	 
	 	 	The Borrower shall pay to the Lender a non-refundable arrangement fee of USD80,500 on the
Execution Date.
	 
	5.2	 	Expenses
	 
	 	 	The Borrower agrees to reimburse the Lender on a full indemnity basis within ten (10) days
of demand all expenses and/or disbursements whatsoever (including without limitation
legal, printing, travel and out of pocket expenses and expenses related to the provision
of legal and insurance opinions referred to in schedule 2) certified by the Lender as
having been incurred by it from time to time:
	 
	5.2.1	 	in connection howsoever with the negotiation, preparation, execution and, where relevant,
registration of the Security Documents and of any contemplated or actual amendment, or
indulgence or the granting of any waiver or consent howsoever in connection with, any of the
Security Documents and the syndication of the Loan; and
	 
	5.2.2	 	in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise
or enforcement of, or preservation of any rights, powers, remedies or discretions under any of
the Security Documents, or in consideration of the Lender’s rights thereunder or any action
proposed or taken following the occurrence of a Default or otherwise in respect of the moneys
owing under any of the Security Documents,
	 
	 	 	together with interest at the rate referred to in clause 3.4 from the date on which
reimbursement of such expenses and/or disbursements were due following demand to the date
of payment (as well after as before judgment).
	 
	5.3	 	Value added tax
	 
	 	 	All fees and expenses payable pursuant to this Agreement must be paid together with value
added tax or any similar tax (if any) properly chargeable thereon in any jurisdiction.
Any value added tax chargeable in respect of any services supplied by the Lender under
this Agreement shall, on delivery of the value added tax invoice, be paid in addition to
any sum agreed to be paid hereunder.
	 
	5.4	 	Stamp and other duties
	 
	 	 	The Borrower must pay all stamp, documentary, registration or other like duties or taxes
(including any duties or taxes payable by the Lender) imposed on or in connection with any
of




15









 






	 	 	the Underlying Documents, the Security Documents or the Loan and agrees to indemnify the
Lender against any liability arising by reason of any delay or omission by the Borrower to
pay such duties or taxes.






	6	 	PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
	 
	6.1	 	No set-off or counterclaim
	 
	 	 	All payments to be made by the Borrower under any of the Security Documents must be made
in full, without any set off or counterclaim whatsoever and, subject as provided in clause
6.6, free and clear of any deductions or withholdings, in USD on or before 11:00 am on the
due date in freely available funds to such account at such bank and in such place as the
Lender may from time to time specify for this purpose. Save as otherwise provided in this
Agreement or any other relevant Security Documents, such payments shall be for the account
of the Lender.
	 
	6.2	 	Payment by the Lender
	 
	 	 	All sums to be advanced by the Lender to the Borrower under this Agreement shall be
remitted in USD on the Drawdown Date to the account specified in the Drawdown Notice.
	 
	6.3	 	Non-Banking Days
	 
	 	 	When any payment under any of the Security Documents would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in which case payment
shall be made on the immediately preceding Banking Day.
	 
	6.4	 	Calculations
	 
	 	 	All interest and other payments of an annual nature under any of the Security Documents
shall accrue from day to day and be calculated on the basis of actual days elapsed and a
three hundred and sixty (360) day year.
	 
	6.5	 	Currency of account
	 
	 	 	If any sum due from the Borrower under any of the Security Documents, or under any order
or judgment given or made in relation thereto, must be converted from the currency (“the
first currency”) in which the same is payable thereunder into another currency (“the
second currency”) for the purpose of (i) making or filing a claim or proof against the
Borrower, (ii) obtaining an order or judgment in any court or other tribunal or (iii)
enforcing any order or judgment given or made in relation thereto, the Borrower undertakes
to indemnify and hold harmless the Lender from and against any loss suffered as a result
of any discrepancy 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 Lender may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof. Any amount due from the
Borrower under this clause 6.5 shall be due as a separate debt and shall not be affected
by judgment being obtained for any other sums due under or in respect of any of the
Security Documents and the term “rate of exchange” includes any premium and costs of
exchange payable in connection with the purchase of the first currency with the second
currency.
	 
	6.6	 	Grossing-up for Taxes — by the Borrower




16









 












	 	 	If at any time the Borrower must make any deduction or withholding in respect of Taxes or
otherwise from any payment due under any of the Security Documents for the account of the
Lender or withholding in respect of Taxes from any payment due under any of the Security
Documents, the sum due from the Borrower in respect of such payment must be increased to
the extent necessary to ensure that, after the making of such deduction or withholding,
the Lender receives on the due date for such payment (and retains, free from any liability
in respect of such deduction or withholding), a net sum equal to the sum which it would
have received had no such deduction or withholding been required to be made and the
Borrower must indemnify the Lender against any losses or costs incurred by it by reason of
any failure of the Borrower to make any such deduction or withholding or by reason of any
increased payment not being made on the due date for such payment. The Borrower must
promptly deliver to the Lender any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
	 
	 	 	This clause 6.6 does not apply to any sums due from the Borrower to the Lender under or in
connection with the Master Agreement in respect of which sums the provisions of the Master
Agreement shall apply.
	 
	6.7	 	Loan account
	 
	 	 	The Lender shall maintain, in accordance with its usual practice, an account evidencing
the amounts from time to time lent by, owing to and paid to it under the Security
Documents. Such account shall, in the absence of manifest error, be prima facie evidence
of the amount from time to time owing by the Borrower under the Security Documents.
	 
	7	 	REPRESENTATIONS AND WARRANTIES
	 
	7.1	 	Continuing representations and warranties
	 
	 	 	The Borrower represents and warrants to the Lender that:
	 
	7.1.1	 	Due incorporation
	 
	 	 	each of the Security Parties and each Group Member is duly incorporated and validly
existing in good standing, under the laws of its respective country of incorporation, in
each case, as a corporation and has power to carry on its respective businesses as it is
now being conducted and to own their respective property and other assets to which it has
unencumbered legal and beneficial title except as disclosed to the Lender in writing;
	 
	7.1.2	 	Corporate power
	 
	 	 	each of the Security Parties has power to execute, deliver and perform its obligations
and, as the case may be, to exercise its rights under the Underlying Documents and the
Security Documents to which it is a party; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and on the execution of the
Security Documents performance of the same and no limitation on the powers of the Borrower
to borrow or any other Security Party to howsoever incur liability and/or to provide or
grant security will be exceeded as a result of borrowing any part of the Loan;
	 
	7.1.3	 	Binding obligations
	 
	 	 	the Underlying Documents and the Security Documents, when executed, will constitute valid
and legally binding obligations of the relevant Security Parties enforceable in accordance
with their respective terms;




17









 












	7.1.4	 	No conflict with other obligations
	 
	 	 	the execution and delivery of, the performance of their obligations under, and compliance
with the provisions of, the Underlying Documents and the Security Documents by the
relevant Security Parties will not (i) contravene any existing applicable law, statute,
rule or regulation or any judgment, decree or permit to which any Security Party or other
member of the Group is subject, (ii) conflict with, or result in any breach of any of the
terms of, or constitute a default under, any agreement or other instrument to which any
Security Party or any other member of the Group is a party or is subject or by which it or
any of its property is bound, (iii) contravene or conflict with any provision of the
constitutional documents of any Security Party or (iv) result in the creation or
imposition of, or oblige any of the Security Parties to create, any Encumbrance (other
than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of
any of the Security Parties;
	 
	7.1.5	 	No default


no Default has occurred;
	 
	7.1.6	 	No litigation or judgments
	 
	 	 	no Proceedings are current, pending or, to the knowledge of the officers of the Borrower,
threatened against any of the Security Parties or any other Group Members or their assets
which could lead to a Material Adverse Change and there exist no judgments, orders,
injunctions which would materially affect the obligations of the Security Parties under
the Security Documents;
	 
	7.1.7	 	No filings required
	 
	 	 	except for the registration of the Mortgage under the laws of the Marshall Islands through
the Registry, it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Underlying Documents or any of the Security
Documents that they or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Pertinent Jurisdiction or that
any stamp, registration or similar tax or charge be paid in any Pertinent Jurisdiction on
or in relation to any of the Underlying Documents or the Security Documents and each of
the Underlying Documents and the Security Documents is in proper form for its enforcement
in the courts of each Pertinent Jurisdiction;
	 
	7.1.8	 	Required Authorisations and legal compliance
	 
	 	 	all Required Authorisations have been obtained or effected and are in full force and
effect and no Security Party has in any way contravened any applicable law, statute, rule
or regulation;
	 
	7.1.9	 	Choice of law
	 
	 	 	the choice of English law to govern any Underlying Document and the Security Documents
(other than the Mortgage), the choice of the law of the Marshall Islands to govern the
Mortgage and the submissions by the Security Parties to the jurisdiction of the English
courts and the obligations of such Security Parties associated therewith, are valid and
binding;
	 
	7.1.10	 	No immunity
	 
	 	 	no Security Party nor any of their assets is entitled to immunity on the grounds of
sovereignty or otherwise from any Proceedings whatsoever;




18









 












	7.1.11	 	Financial statements correct and complete
	 
	 	 	the latest audited and unaudited consolidated financial statements of the Borrower in
respect of the relevant financial year as delivered to the Lender and present or will
present fairly and accurately the financial position of the Borrower and the consolidated
financial position of the Group as at the date thereof and the results of the operations
of the Borrower and the consolidated results of the operations of the Group for the
financial year ended on such date and, as at such date, neither the Borrower nor any of
its subsidiaries had any significant liabilities (contingent or otherwise) or any
unrealised or anticipated losses which are not disclosed by, or reserved against or
provided for in, such financial statements;
	 
	7.1.12	 	Pari passu
	 
	 	 	the obligations of the Borrower under this Agreement and the Master Agreement are direct,
general and unconditional obligations of the Borrower and rank at least pari passu with
all other present and future unsecured and unsubordinated Indebtedness of the Borrower
except for obligations which are mandatorily preferred by operation of law and not by
contract;
	 
	7.1.13	 	Information
	 
	 	 	all information, whatsoever provided by any Security Party to the Lender in connection
with the negotiation and preparation of the Security Documents or otherwise provided
hereafter in relation to, or pursuant to this Agreement is, or will be, true and accurate
in all material respects and not misleading, does or will not omit material facts and all
reasonable enquiries have been, or shall have been, made to verify the facts and
statements contained therein; there are, or will be, no other facts the omission of which
would make any fact or statement therein misleading;
	 
	7.1.14	 	No withholding Taxes
	 
	 	 	no Taxes anywhere are imposed whatsoever by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the Security Documents to
which such Security Party is or is to be a party or are imposed on or by virtue of the
execution or delivery by the Security Parties of the Underlying Documents or the Security
Documents or any other document or instrument to be executed or delivered under any of the
Security Documents;
	 
	7.1.15	 	Use of proceeds
	 
	 	 	the Borrower shall apply the Loan only for the purposes specified in clause 1.1;
	 
	7.1.16	 	The Vessel
	 
	 	 	throughout the Facility Period the Vessel will be :






	 	(a)	 	in the absolute sole, legal and beneficial ownership of the Guarantor;
	 
	 	(b)	 	registered through the offices of the Registry as a ship under the laws and
flag of the Marshall Islands;
	 
	 	(c)	 	in compliance with the ISM Code and the ISPS Code and operationally
seaworthy and in every way fit for service;
	 
	 	(d)	 	in good and sea-worthy and cargo-worthy condition; and




19









 












	 	(e)	 	classed with the Classification free of all requirements and
recommendations of the Classification Society.






	7.1.17	 	Vessel’s employment
	 
	 	 	except under the Approved Charter or with the prior written consent of the Lender, there
will not be any agreement or arrangement whereby the Earnings (as defined in the Vessel
Security Documents) of the Vessel may be shared or pooled howsoever with any other person;
	 
	7.1.18	 	Freedom from Encumbrances
	 
	 	 	Neither the Vessel nor its Earnings, Insurances or Requisition Compensation (each as
defined in the Vessel Security Documents) nor the Earnings Account nor the Approved
Charter or any Extended Employment Contract nor any other properties or rights which are,
or are to be, the subject of any of the Security Documents nor any part thereof will be
subject to any Encumbrance except Permitted Encumbrances;
	 
	7.1.19	 	Environmental Matters






	 	(a)	 	except as may already have been disclosed by the Borrower in writing to,
and acknowledged and accepted in writing by, the Lender:
	 
	 	(b)	 	the Guarantor and, to the best of the Borrower’s knowledge and belief
(having made due enquiry), their its Environmental Affiliates have complied with the
provisions of all Environmental Laws;
	 
	 	(c)	 	the Guarantor and, to the best of the Borrower’s knowledge and belief
(having made due enquiry), its Environmental Affiliates have obtained all
Environmental Approvals and are in compliance with all such Environmental Approvals;
	 
	 	(d)	 	no Environmental Claim has been made or threatened or pending against the
Guarantor, or, to the best of the Borrower’s knowledge and belief (having made due
enquiry), any of its Environmental Affiliates; and
	 
	 	(e)	 	there has been no Environmental Incident;






	7.1.20	 	ISM and ISPS Code
	 
	 	 	The Guarantor has complied with and continues to comply with and has procured that the
Approved Manager has complied with and continues to comply with the ISM Code, the ISPS
Code and all other statutory and other requirements relative to its business and in
particular the Guarantor or the Approved Manager has obtained and maintains a valid DOC
and SMC for the Vessel and that it and the Approved Manager has implemented and continues
to implement an ISM SMS;
	 
	7.1.21	 	Copies true and complete
	 
	 	 	the Certified Copies or originals of the Underlying Documents delivered or to be delivered
to the Lender pursuant to clause 9.1 are, or will when delivered be, true and complete
copies or, as the case may be, originals of such documents; and such documents constitute
valid and binding obligations of the parties thereto enforceable in accordance with their
respective terms and there have been no amendments or variations thereof or defaults
thereunder;
	 
	7.1.22	 	the Borrower and other Group Members are the ultimate beneficiaries of the Loan;






20











 






	7.1.23	 	no Security Party has incurred any Indebtedness save under this Agreement or as otherwise
disclosed to the Lender;
	 
	7.1.24	 	the Guarantor and the Borrower have filed all tax and other fiscal returns required to be
filed by any tax authority to which they are subject;
	 
	7.1.25	 	the Borrower does not have an office in England;
	 
	7.1.26	 	The Borrower is acting for its own account in borrowing the Loan and performing and
discharging its obligations and liabilities under this Agreement and the Security Documents to
which it is a party and in relation to the transactions and other arrangements effected or
contemplated by this Agreement or any of the Security Documents to which it is a party, and no
such borrowing, performance, discharge, transaction or arrangement will 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).
	 
	7.2	 	Repetition of representations and warranties
	 
	 	 	On each day throughout the Facility Period, the Borrower shall be deemed to repeat the
representations and warranties in clause 7 updated mutatis mutandis as if made with
reference to the facts and circumstances existing on such day.
	 
	8	 	UNDERTAKINGS
	 
	8.1	 	General
	 
	 	 	The Borrower undertakes with the Lender that, from the Execution Date until the end of the
Facility Period, it will:
	 
	8.1.1	 	Notice of Default and Proceedings
	 
	 	 	promptly inform the Lender of (a) any Default and of any other circumstances or occurrence
which might adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents and (b) as soon as the same is instituted or
threatened, details of any Proceedings involving any Security Party which could give rise
to a Material Adverse Change on that Security Party and/or the operation of the Vessel
(including, but not limited to any Total Loss of the Vessel or the occurrence of any
Environmental Incident) and will from time to time, if so requested by the Lender, confirm
to the Lender in writing that, save as otherwise stated in such confirmation, no Default
has occurred and is continuing and no such Proceedings are on foot or threatened;
	 
	8.1.2	 	Authorisation
	 
		 	obtain or cause to be obtained, maintain in full force and effect and comply fully with
all Required Authorisations, provide the Lender with Certified Copies of the same and do,
or cause to be done, all other acts and things which may from time to time be necessary or
desirable under any applicable law (whether or not in the Pertinent Jurisdiction) for the
continued due performance of all the obligations of the Security Parties under each of the
Security Documents;
	 
	8.1.3	 	Corporate Existence




21









 






	 	 	ensure that each Security Party maintains its corporate existence as a body corporate duly
organised and validly existing and in good standing under the laws of the Pertinent
Jurisdiction;
	 
	8.1.4	 	Use of proceeds
	 
	 	 	use the Loan exclusively for the purposes specified in clause 1.1;
	 
	8.1.5	 	Pari passu
	 
	 	 	ensure that its obligations under this Agreement and the Master Agreement shall at all
times rank at least pari passu with all its other present and future unsecured and
unsubordinated Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;
	 
	8.1.6	 	Financial statements
	 
	 	 	Cause to be prepared audited (by accountants acceptable to the Lender) accounts
of the Guarantor and consolidated accounts of the Group, prepared in accordance with
International Financial Reporting Standards in respect of each financial year and
prepare or cause to be prepared unaudited consolidated financial statements of the
Group in respect of each financial half-year on the same basis as the annual accounts
and duly certified by the chief financial officer of the Group as true and correct,
and deliver the same to the Lender as soon as practicable, but not later than one
hundred and twenty (120) days (in the case of audited accounts) or ninety (90) days
(in the case of unaudited financial statements) after the end of the financial period
to which they relate;
	 
	8.1.7	 	Financial covenants
	 
	 	 	procure that:






	 	(a)	 	at no time shall the aggregate cash owned by the Group which is freely
available and not subject to any Encumbrance be less than USD200,000 multiplied by
the number of ships owned by the Group;
	 
	 	(b)	 	the ratio of EBITDA to Interest Expense shall at all times be at least 2.5
to 1 in relation to the preceding 4 financial quarters; and
	 
	 	(c)	 	at all times the ratio of Total Debt (less Unencumbered Liquid Assets) of
the Group to Total Assets (less Unencumbered Liquid Assets) of the Group shall not be
greater than 0.8 to 1.






	8.1.8	 	Reimbursement of MII & MAP Policy premiums
	 
	 	 	Whether or not any amount is borrowed under this Agreement, reimburse the Lender on the
Lender’s written demand the amount of the premium payable by the Lender for the inception
or, as the case may be, extension and/or continuance of the MII & MAP Policy (including
any insurance tax thereon);
	 
	8.1.9	 	Compliance Certificates
	 
	 	 	deliver to the Lender on the Drawdown Date and on the date on which the accounts are or
are to be delivered under clause 8.1.6 a Compliance Certificate duly and correctly
completed and signed by the chief financial officers of the Borrower and the Guarantor and
confirming




22









 






	 	 	compliance with the financial covenants as set out in clause 8.1.7 as at the end of the
latest financial year or half-year (as the case may be).
	 
	8.1.10	 	Provision of further information
	 
	 	 	provide the Lender, and procure that the Approved Manager shall provide the Lender, with
such financial or other information concerning the Borrower and its affairs, activities,
financial standing, Indebtedness and operations and the performance of the Vessel as the
Lender may from time to time reasonably require;
	 
	8.1.11	 	Obligations under Security Documents
	 
	 	 	duly and punctually perform each of the obligations expressed to be imposed or assumed by
it under the Security Documents and Underlying Documents and will procure that each of the
other Security Parties will, duly and punctually perform each of the obligations expressed
to be assumed by it under the Security Documents and the Underlying Documents to which it
is a party;
	 
	8.1.12	 	Compliance with ISM Code
	 
	 	 	will procure that any Operator will, comply with and ensure that the 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 Facility
Period;
	 
	8.1.13	 	Withdrawal of DOC and SMC
	 
	 	 	Immediately inform the Lender if there is any actual withdrawal of their or any Operator’s
DOC or the SMC of the Vessel;
	 
	8.1.14	 	Issuance of DOC and SMC
	 
	 	 	and will procure that any Operator will promptly inform the Lender of the receipt by the
Guarantor or any Operator of notification that its application for a DOC or any
application for an SMC for the Vessel has been refused;
	 
	8.1.15	 	ISPS Code Compliance
	 
	 	 	and will procure that the Approved Manager or any Operator will:






	 	(a)	 	maintain at all times a valid and current ISSC in respect of the Vessel;
	 
	 	(b)	 	immediately notify the Lender in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of the
Vessel; and
	 
	 	(c)	 	procure that the Vessel will comply at all times with the ISPS Code;






	8.1.16	 	Compliance with Laws and payment of taxes
	 
	 	 	and will comply with all relevant Environmental Laws, laws, statutes and regulations and
pay all taxes for which it is liable as they fall due;
	 
	8.1.17	 	Management.
	 
	 	 	Following the termination of the Approved Charter (unless the Vessel enters into another
bareboat charter) or if the Approved Manager becomes commercial and/or technical
manager
of the Vessel at any other time, (i) deliver to the Lender a Certified Copy of the
Management




23









 






	 	 	Agreement upon its execution, (ii) a Manager’s Undertaking in respect thereof
duly executed by the Approved Manager and any notice of assignment required in connection
therewith and (iii) pay all legal and other costs incurred by the Lender in connection
with any such Manager’s Undertaking, forthwith following the Lender’s demand; and
	 
	8.1.18	 	Charters etc.





	 	(i)	 	deliver to the Lender a Certified Copy of each Extended Employment Contract upon its
execution, (ii) forthwith on the Lender’s request execute (a) a Charter Assignment in
respect thereof and (b) any notice of assignment required in connection therewith and use
reasonable efforts to procure the acknowledgement of any such notice of assignment by the
relevant charterer (provided that any failure to procure the same shall not constitute an
Event of Default) and (iii) pay all legal and other costs incurred by the Lender in
connection with any such Charter Assignment, forthwith following the Lender’s demand; and




	8.1.19	 	Derivatives
	 
	 	 	If at any time the Borrower wishes to enter into any derivative transaction of the type
envisaged by the Master Agreement in relation to the Loan, it shall not enter into any
such transaction with any person other than the Lender unless it has first requested the
Lender to quote for such business.
	 
	8.2	 	Security value maintenance
	 
	8.2.1	 	Security shortfall
	 
	 	 	If, at any time after the Drawdown Date, the Security Value shall be less than the
Required Security Amount, the Lender shall give notice to the Borrower requiring that such
deficiency be remedied and then the Borrower must either:






	 	(a)	 	prepay within a period of thirty (30) days of the date of receipt by the
Borrower of the Lender’s said notice such part of the Loan as will result in the
Security Value after such prepayment (taking into account any other repayment of the
Loan made between the date of the notice and the date of such prepayment) being equal
to or higher than the Required Security Amount; or
	 
	 	(b)	 	within thirty (30) days of the date of receipt by the Borrower of the
Lender’s said notice constitute to the satisfaction of the Lender such further
security for the Loan as shall be acceptable to the Lender having a value for
security purposes (as determined by the Lender in its absolute discretion) at the
date upon which such further security shall be constituted which, when added to the
Security Value, shall not be less than the Required Security Amount as at such date.






	 	 	The provisions of clauses 4.6 and 4.7 shall apply to prepayments under clause 8.2.1(a)
provided that the Lender shall apply such prepayments first to the Balloon Instalment and
thereafter against the outstanding of the repayment instalments under clause 4.1.1 in
inverse of maturity and the amounts of the Loan prepaid hereunder shall not be available
to be re-borrowed.
	 
	8.2.2	 	Valuation of Vessel
	 
	 	 	The Vessel shall, for the purposes of this Agreement (including, but not limited to Clause
2.3), be valued in USD by any two Approved Brokers, such valuations to be made at such
time or
times, as the Lender may require, without physical inspection, and on the basis of a sale
for




24









 






	 	 	prompt delivery for cash at arms’ length, on normal commercial terms, as between a
willing buyer and a willing seller, without taking into account the benefit or burden of
any charterparty or other engagement concerning the Vessel and the average of such two
Approved Broker’s valuations for the Vessel on each such occasion shall constitute the
Valuation Amount of the Vessel for the purposes of this Agreement until superseded by the
next such valuation.
	 
	8.2.3	 	Information
	 
	 	 	The Borrower undertakes with the Lender to supply to the Lender and to the Approved Broker
such information concerning the Vessel and its condition as such shipbrokers may require
for the purpose of determining any Valuation Amount.
	 
	8.2.4	 	Costs
	 
	 	 	All costs in connection with the obtaining and any determining of any Valuation Amount
pursuant to Clause 8.2.2 shall, in respect of two such valuations in each calendar year,
and following the occurrence of an Event of Default which is continuing, any additional
valuation, be paid by the Borrower and any valuation either of any additional security for
the purposes of ascertaining the Security Value at any time or necessitated by the
Borrower electing to constitute additional security pursuant to clause 8.2.1(b), must be
paid by the Borrower.
	 
	8.2.5	 	Valuation of additional security
	 
	 	 	For the purposes of this clause 8.2, the market value (i) of any additional security over
a ship (other than the Vessel) shall be determined in accordance with clause 8.2.2 and
(ii) of any other additional security provided or to be provided to the Lender shall be
determined by the Lender in its absolute discretion.
	 
	8.2.6	 	Documents and evidence
	 
	 	 	In connection with any additional security provided in accordance with this clause 8.2,
the Lender shall be entitled to receive (at the Borrower’s expense) such evidence and
documents of the kind referred to in schedule 4 as may in the Lender’s opinion be
appropriate and such favourable legal opinions as the Lender shall in its absolute
discretion require.
	 
	8.3	 	Negative undertakings relating to the Guarantor
	 
	 	 	The Borrower undertakes that:
	 
	8.3.1	 	except with the prior written consent in each case of the Lender, it will retain, directly
or through wholly-owned subsidiaries, full ownership and control of the Guarantor and the
Vessel and will not permit any Encumbrance to exist on any shares of and in the Guarantor; and
	 
	8.3.2	 	it will procure that the Guarantor complies with the undertakings set out in Clause 8.4 as
if the same have been up-dated mutatis mutandis to refer to the Guarantor in place of the
Borrower.
	 
	8.4	 	Negative undertakings relating to the Borrower





25









 





	 	 	The Borrower undertakes with the Lender that, from the Execution Date until the end of the
Facility Period, it will procure that, except with the prior written consent of the
Lender, it will not:
	 
	8.4.1	 	Disposals
	 
	 	 	Permit the Guarantor to sell, transfer, assign, create security or option over, pledge,
pool, abandon, lend or otherwise dispose of or cease to exercise direct control over any
part of its present or future undertaking, assets, rights or revenues (otherwise than by
transfers, sales or disposals for full consideration in the ordinary course of trading)
whether by one or a series of transactions related or not;
	 
	8.4.2	 	No merger or consolidation
	 
	 	 	merge or consolidate with any other person;
	 
	8.4.3	 	Other business or manager
	 
	 	 	undertake any business other than the ownership and operation of vessels (or permit the
Guarantor to undertake any business, other than the ownership and operation of the Vessel)
or employ anyone other than the Approved Manager as commercial and technical manager of
the Vessel;
	 
	8.4.4	 	Acquisitions
	 
	 	 	permit the Guarantor to acquire any assets other than the Vessel and rights arising under
contracts entered into by or on behalf of the Guarantor in the ordinary course of its
business of owning, operating and chartering the Vessel;
	 
	8.4.5	 	Other obligations
	 
	 	 	permit the Guarantor to incur, any obligations except for obligations arising under the
Underlying Documents or the Security Documents or contracts entered into in the ordinary
course of its business of owning, operating and chartering the Vessel;
	 
	8.4.6	 	Guarantees
	 
	 	 	permit the Guarantor to issue any guarantees or otherwise become directly or contingently
liable for the obligations of any person, firm, or corporation except pursuant to the
Security Documents and except for guarantees from time to time required in the ordinary
course by any protection and indemnity or war risks association with which the Vessel is
entered, guarantees required to procure the release of the Vessel from any arrest,
detention, attachment or levy or guarantees required for the salvage of the Vessel;
	 
	8.4.7	 	Loans
	 
		 	other than by on-lending any Borrowed Money, make any loans or grant any credit (save for
normal trade credit in the ordinary course of business) to any person or agree to do so or
permit any Group Member to do so;
	 
	8.4.8	 	Indebtedness





26









 





	 	 	incur, or permit the Guarantor to incur, any Indebtedness owing to any other Group Member,
unless the same is fully subordinated to the rights of the Lender under this Agreement in
terms acceptable to the Lender;
	 
	8.4.9	 	Sureties
	 
	 	 	permit any Indebtedness of the Guarantor to any person (other than the Lender pursuant to
the Security Documents) to be guaranteed by any person (except for guarantees from time to
time required in the ordinary course by any protection and indemnity or war risks
association with which the Vessel is entered, guarantees required to procure the release
of the Vessel from any arrest, detention, attachment or levy or guarantees or undertakings
required for the salvage of the Vessel); or
	 
	8.4.10	 	Share capital and distribution





	 	(i)	 	(prior to the occurrence of an Event of Default which is continuing) declare or pay
any dividends except in an aggregate amount in relation to any four consecutive financial
quarters of up to 50% of the Free Cash Flow for that period or, (ii) following the
occurrence of an Event of Default which is continuing, declare or pay any dividends.





	9	 	CONDITIONS
	 
	9.1	 	Drawdown Notice
	 
	 	 	The obligation of the Lender to make the Commitment available is conditional upon the
Lender, or its authorised representative, having received, not later than two (2) Banking
Days before the day on which the Drawdown Notice is given, the documents and evidence
specified in Part 1 of schedule 2 in form and substance satisfactory to the Lender.
	 
	9.2	 	Advance of the Loan
	 
	 	 	The obligation of the Lender to make the Commitment available is further conditional upon:
	 
	9.2.1	 	the Lender, or its authorised representative, having received, on or prior to the Drawdown
Date, the documents and evidence specified in Part 2 of schedule 2 in form and substance
satisfactory to the Lender;
	 
	9.2.2	 	the representations and warranties contained in clause 7 being then true and correct as if
each was made with respect to the facts and circumstances existing at such time and the same
being unaffected by drawdown of the Loan; and
	 
	9.2.3	 	no Default having occurred and being continuing and there being no Default which would
result from the lending of the Loan.
	 
	9.3	 	Waiver of conditions precedent
	 
	 	 	The conditions specified in this clause 9 are inserted solely for the benefit of the
Lender and may be waived by the Lender in whole or in part.
	 
	9.4	 	Further conditions precedent
	 
	 	 	Not later than five (5) Banking Days prior to the Drawdown Date and not later than five
(5) Banking Days prior to any Interest Payment Date, the Lender may request and the
Borrower must, not later than two (2) Banking Days prior to such date, deliver to the
Lender (at the




27









 






	 	 	Borrower’s expense) on such request further favourable certificates and/or opinions as to
any or all of the matters which are the subject of clauses 7, 8, 9 and 10.
	 
	10	 	EVENTS OF DEFAULT
	 
	10.1	 	Events
	 
	 	 	Each of the following events shall constitute an Event of Default (whether such event
shall occur voluntarily or involuntarily or by operation of law or regulation or in
connection with any judgment, decree or order of any court or other authority or
otherwise, howsoever):
	 
	10.1.1	 	Non-payment: any Security Party fails to pay any sum payable by it under any of the Security
Documents at the time, in the currency and in the manner stipulated in the Security Documents
or the Underlying Documents, except that, if any delay in making a payment is caused by
administrative or technical banking errors, there shall not occur an Event of Default under
this Clause unless such payment shall not have been made within 2 Banking Days of the original
failure to pay coming to the notice of the Borrower ; or
	 
	10.1.2	 	Breach of Insurance and certain other obligations: the Guarantor or, as the context may
require, the Approved Manager or any other person fails to obtain and/or maintain the
Insurances (as defined in, and in accordance with the requirements of, the Vessel Security
Documents) for the Vessel or if any insurer in respect of such Insurances cancels the
Insurances or disclaims liability by reason, in either case, of mis-statement in any proposal
for the Insurances or for any other failure or default on the part of the Borrower or any
other person or the Borrower commits any breach of or omits to observe any of the obligations
or undertakings expressed to be assumed by it under clause 8; or
	 
	10.1.3	 	Breach of other obligations: any Security Party commits any breach of or omits to observe
any of its obligations or undertakings expressed to be assumed by it under any of the Security
Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above) unless such breach
or omission, in the opinion of the Lender is capable of remedy, in which case the same shall
constitute an Event of Default if it has not been remedied within fifteen (15) days of the
occurrence thereof; or
	 
	10.1.4	 	Misrepresentation: any representation or warranty made or deemed to be made or repeated by
or in respect of any Security Party in or pursuant to any of the Security Documents or in any
notice, certificate or statement referred to in or delivered under any of the Security
Documents is or proves to have been incorrect or misleading in any material respect; or
	 
	10.1.5	 	Cross-default: There shall occur a default (howsoever described) under or in respect of any
Indebtedness of any Security Party or other Group Member (subject to applicable grace periods)
or any Indebtedness of any Security Party or other Group Member becomes (whether by
declaration or automatically in accordance with the relevant agreement or instrument
constituting the same) due and payable prior to the date when it would otherwise have become
due (unless as a result of the exercise by the relevant Security Party or other Group Member
of a voluntary right of prepayment), or any creditor of any Security Party or other Group
Member becomes entitled to declare any such Indebtedness due and payable or any facility or
commitment available to any Security Party or other Group Member relating to Indebtedness is
withdrawn, suspended or cancelled by reason of any default (however described) of the person
concerned; or
	 
	10.1.6	 	Execution: any uninsured judgment or order made against any Security Party or other Group
Member is not stayed, appealed against or complied with within fifteen (15) days or a creditor
attaches or takes possession of, or a distress, execution, sequestration or other process is




28









 






	 	 	levied or enforced upon or sued out against, any of the undertakings, assets, rights or
revenues of any Security Party or other Group Member and is not discharged within thirty
(30) days; or
	 
	10.1.7	 	Insolvency: any Security Party or other Group Member is unable or admits inability to pay
its debts as they fall due; suspends making payments on any of its debts or announces an
intention to do so; becomes insolvent; or has negative net worth (taking into account
contingent liabilities); or suffers the declaration of a moratorium in respect of any of its
Indebtedness; or
	 
	10.1.8	 	Reduction or loss of capital: a meeting is convened by any Security Party (other than the
Borrower) without the Lender’s prior written consent, for the purpose of passing any
resolution to purchase, reduce or redeem any of its share capital without the Lender’s prior
written consent; or
	 
	10.1.9	 	Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or
wind-up any Security Party or other Group Member or an order is made or resolution passed for
the dissolution or winding up of any Security Party or other Group Member or a notice is
issued convening a meeting for such purpose; or
	 
	10.1.10	 	Administration: any petition is presented, notice given or other steps are taken anywhere
to appoint an administrator of any Security Party or other Group Member or the Lender believes
that any such petition or other step is imminent or an administration order is made in
relation to any Security Party or other Group Member; or
	 
	10.1.11	 	Appointment of receivers and managers: any administrative or other receiver is appointed
anywhere of any Security Party or other Group Member or any part of its assets and/or
undertaking or any other steps are taken to enforce any Encumbrance over all or any part of
the assets of any Security Party or other Group Member; or
	 
	10.1.12	 	Compositions: any corporate action, legal proceedings or other procedures or steps are
taken, or negotiations commenced, by any Security Party or other Group Member or by any of its
creditors with a view to the general readjustment or rescheduling of all or part of its
Indebtedness or to proposing any kind of composition, compromise or arrangement involving such
company and any of its creditors; or
	 
	10.1.13	 	Analogous proceedings: there occurs, in relation to any Security Party or other Group
Member, in any country or territory in which any of them carries on business or to the
jurisdiction of whose courts any part of their assets is subject, any event which, in the
reasonable opinion of the Lender, appears in that country or territory to correspond with, or
have an effect equivalent or similar to, any of those mentioned in clauses 10.1.6 to 10.1.12
(inclusive) or any Security Party or other Group Member otherwise becomes subject, in any such
country or territory, to the operation of any law relating to insolvency, bankruptcy or
liquidation; or
	 
	10.1.14	 	Cessation of business: any Security Party or other Group Member suspends or ceases or
threatens to suspend or cease to carry on its business without the prior written consent of
the Lender, such consent not to be unreasonably withheld; or
	 
	10.1.15	 	Seizure: all or a material part of the undertaking,
assets, rights or revenues of, or shares or other ownership interests in, any Security Party or other Group Member are seized,
nationalised, expropriated or compulsorily acquired by or under the authority of any
Government Entity; or
	 
	10.1.16	 	Invalidity: any of the Security Documents and the Underlying Documents shall at any time
and for any reason become invalid or unenforceable or otherwise cease to remain in full force




29









 






	 	 	and effect, or if the validity or enforceability of any of the Security Documents and the
Underlying Documents shall at any time and for any reason be contested by any Security
Party which is a party thereto, or if any such Security Party shall deny that it has any,
or any further, liability thereunder; or
	 
	10.1.17	 	Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for
any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by
it in any of the Security Documents or for the Lender to exercise the rights or any of them
vested in it under any of the Security Documents or otherwise; or
	 
	10.1.18	 	Repudiation: any Security Party repudiates any of the Security Documents or does or causes
or permits to be done any act or thing evidencing an intention to repudiate any of the
Security Documents; or
	 
	10.1.19	 	Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of
the property (or part thereof) which is the subject of any of the Security Documents becomes
enforceable; or
	 
	10.1.20	 	Arrest: the Vessel is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory lien or other claim or
otherwise taken from the possession of the Guarantor and the Guarantor shall fail to procure
the release of the Vessel within a period of fifteen (15) days thereafter; or
	 
	10.1.21	 	Registration: the registration of the Vessel under the laws and flag of the Marshall
Islands is cancelled or terminated without the prior written consent of the Lender; or
	 
	10.1.22	 	Unrest: the Marshall Islands or the country in which any Security Party is incorporated or
domiciled becomes involved in hostilities or civil war or there is a seizure of power in the
Marshall Islands by unconstitutional means unless the Guarantor shall have transferred the
Vessel onto a new flag acceptable to the Lender within sixty (60) days of the start of such
hostilities or civil war or seizure of power; or
	 
	10.1.23	 	Environmental Incidents: an Environmental Incident occurs which gives rise, or may give
rise, to an Environmental Claim which could, in the opinion of the Lender be expected to lead
to a Material Adverse Change; or
	 
	10.1.24	 	P&I: the Guarantor or the Approved Manager or any other person fails or omits to comply
with any requirements of the protection and indemnity association or other insurer with which
the Vessel is entered for insurance or insured against protection and indemnity risks
(including oil pollution risks) to the effect that any cover (including, without limitation,
any cover in respect of liability for Environmental Claims arising in jurisdictions where the
Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at
any time; or
	 
	10.1.25	 	Material events: any other event occurs or circumstance arises which, in the reasonable
opinion of the Lender, is likely to give rise to a Material Adverse Change; or
	 
	10.1.26	 	Account: moneys are withdrawn from the Earnings Account other than in accordance with
clause 14; or
	 
	10.1.27	 	Required Authorisations: any Required Authorisation is revoked or withheld or modified or
is otherwise not granted or fails to remain in full force and effect or if any exchange
control or other law or regulation shall exist which would make any transaction under the
Security Documents or the continuation thereof, unlawful or would prevent the performance by
any Security Party of any term of any of the Security Documents;




30









 






	10.1.28	 	Money Laundering: any Security Party is in breach of or fails to observe any law,
requirement, measure or procedure implemented to combat “money laundering” as defined in
Article 1 of the Directive (91/308 EEC) of the Council of the European Communities; or
	 
	10.1.29	 	Master Agreement: (i) an Event of Default or Potential Event of Default (in each case as
defined in the Master Agreement) has occurred and is continuing under the Master Agreement or
(ii) an Early Termination Date (as defined in the Master Agreement) has occurred or been
effectively designated under the Master Agreement or (iii) a person entitled to do so gives
notice of an Early Termination Date (as defined in the Master Agreement) or (iv) the Master
Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to
remain in full force and effect for any reason; or
	 
	10.1.30	 	Change of Ownership: without the prior consent of the Lender, there shall occur any change
in any part of the legal ownership of the Guarantor from that existing as at the Execution
Date or the aggregate number of shares of and in the Borrower beneficially owned or controlled
by Mr Charalambos (“Harry”) Vafias and/or any of his parents, children, siblings and his wife
falls below 15% of the total issued shares of and in the Borrower.
	 
	10.2	 	Acceleration
	 
	 	 	The Lender may without prejudice to any its other rights, at any time after the happening
of an Event of Default by notice to the Borrower declare that:
	 
	10.2.1	 	the obligation of the Lender to make the Commitment available shall be terminated, whereupon
the Commitment shall be reduced to zero forthwith; and/or
	 
	10.2.2	 	the Loan and all interest accrued and all other sums payable whatsoever under the Security
Documents have become due and payable, whereupon the same shall, immediately or in accordance
with the terms of such notice, become due and payable.
	 
	10.3	 	Demand Basis
	 
	 	 	If, under clause 10.2.2, the Lender has declared the Loan to be due and payable on demand,
at any time thereafter the Lender may by written notice to the Borrower (a) demand
repayment of the Loan on such date as may be specified whereupon, regardless of any other
provision of this Agreement, the Loan shall become due and payable on the date so
specified together with all interest accrued and all other sums payable under this
Agreement or (b) withdraw such declaration with effect from the date specified in such
notice.
	 
	11	 	INDEMNITIES
	 
	11.1	 	General indemnity
	 
	 	 	The Borrower agrees to indemnify the Lender on demand, without prejudice to any of the
Lender’s other rights under any of the Security Documents, against any loss (including
loss of Margin) or expense (including, without limitation, Break Costs) which the Lender
shall certify as sustained by it as a consequence of any Default, any prepayment of the
Loan or part thereof being made under clauses 4.3, 4.4, 8.2.1(a) or 12.1 or any other
repayment or prepayment of the Loan being made otherwise than on an Interest Payment Date
relating to the part of the Loan prepaid or repaid; and/or the Loan not being advanced for
any reason (excluding any default by the Lender) after the Drawdown Notice has been given.
	 
	11.2	 	Environmental indemnity




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	 	 	The Borrower shall indemnify the Lender on demand and hold it harmless from and against
all costs, claims, expenses, payments, charges, losses, demands, liabilities, actions,
Proceedings, penalties, fines, damages, judgements, orders, sanctions or other outgoings
of whatever nature which may be incurred or made or asserted whensoever against the Lender
at any time, whether before or after the repayment in full of principal and interest under
this Agreement, arising howsoever out of an Environmental Claim made or asserted against
the Lender which would not have been, or been capable of being, made or asserted against
the Lender had it not entered into any of the Security Documents or been involved in any
of the resulting or associated transactions.
	 
	11.3	 	Capital adequacy and reserve requirements indemnity
	 
	 	 	The Borrower shall promptly indemnify the Lender on demand against any reasonable cost
incurred or loss suffered by the Lender as a result of its complying with (i) the minimum
reserve requirements from time to time of the European Central Bank (ii) any capital
adequacy directive of the European Union and/or (iii) any revised framework for
international convergence of capital measurements and capital standards and/or any
regulation imposed by any Government Entity in connection therewith, and/or in connection
with maintaining required reserves with a relevant national central bank to the extent
that such compliance or maintenance relates to the Loan or deposits obtained by it to fund
the whole or part thereof and to the extent such cost or loss is not recoverable by the
Lender under clause 12.2.
	 
	12	 	UNLAWFULNESS AND INCREASED COSTS
	 
	12.1	 	Unlawfulness
	 
	 	 	Regardless of any other provision of this Agreement, in the event that the Lender notifies
the Borrower that by reason of:
	 
	12.1.1	 	the introduction of or any change in any applicable law or regulation or any change in the
interpretation or application thereof; or
	 
	12.1.2	 	compliance by the Lender with any directive, request or requirement (whether or not having
the force of law) of any central bank or Government Entity
	 
	 	 	it becomes unlawful or it is prohibited by or contrary to such directive request or
requirement for the Lender to maintain or give effect to any of its obligations in
connection howsoever with this Agreement then (i) the Commitment shall be reduced to zero
and (ii) the Borrower shall be obliged to prepay the Loan either immediately or on a
future specified date not being earlier than the latest date permitted by the relevant
law, regulation, directive, request or requirement with interest and commitment commission
accrued to the date of prepayment and all other sums payable whensoever by the Borrower
under this Agreement.
	 
	12.2	 	Increased costs
	 
	 	 	If the Lender certifies to the Borrower that at any time the effect of any applicable law,
regulation or regulatory requirements or the interpretation or application thereof or any
change therein (including the imposition upon whomsoever of Taxes on payments hereunder or
otherwise howsoever in connection with this Agreement other than taxes on the overall net
income of the Lender) or the effect of complying with any applicable directive, request or
requirement (whether or not having the force of law) of any central bank or Government
Entity (including any kind of liquidity, stock or capital adequacy controls or other
banking or monetary controls or requirements which affect the manner in which the Lender
or its holding company allocates capital resources to the Lender’s obligations hereunder)
is to:




32









 






	12.2.1	 	subject the Lender to Taxes or change the basis of Taxation of the Lender relating to any
payment under any of the Security Documents (other than Taxes or Taxation on the overall net
income of the Lender imposed in the jurisdiction in which its principal or lending office
under this Agreement is located); and/or
	 
	12.2.2	 	increase the cost to, or impose an additional cost on, the Lender or its holding company in
making or keeping the Commitment available or maintaining or funding all or part of the Loan;
and/or
	 
	12.2.3	 	reduce the amount payable or the effective return to the Lender under any of the Security
Documents; and/or
	 
	12.2.4	 	reduce the Lender’s or its holding company’s rate of return on its overall capital by reason
of a change in the manner in which it is required to allocate capital resources to the
Lender’s obligations under any of the Security Documents; and/or
	 
	12.2.5	 	require the Lender or its holding company to make a payment or forgo a return on or
calculated by reference to any amount received or receivable by the Lender under any of the
Security Documents; and/or
	 
	12.2.6	 	require the Lender or its holding company to incur or sustain a loss (including a loss of
future potential profits) by reason of being obliged to deduct all or part of the Commitment
or the Loan from its capital for regulatory purposes,
	 
	 	 	then and in each such case (subject to clause 12.3) the Borrower must on demand pay to the
Lender the amount which the Lender certifies (in a certificate setting forth the basis of
the computation of such amount but not including any matters which the Lender or its
holding company regards as confidential) is required to compensate the Lender and/or (as
the case may be) its holding company for such liability to Taxes, cost, reduction,
payment, forgone return or loss.
	 
	 	 	For the purposes of this clause 12.2 “holding company” means the company or entity (if
any) within the consolidated supervision of which the Lender is included.
	 
	12.3	 	Exception
	 
	 	 	Nothing in clause 12.2 shall entitle the Lender to receive any amount relating to
compensation for any such liability to Taxes, increased or additional cost, reduction,
payment, foregone return or loss to the extent that the same is the subject of an
additional payment under clause 6.6.
	 
	13	 	APPLICATION OF MONEYS, SET OFF AND MISCELLANEOUS
	 
	13.1	 	Application of moneys
	 
	 	 	All moneys received by the Lender under or pursuant to any of the Security Documents and
expressed to be applicable in accordance with the provisions of this clause 13.1 or in a
manner determined in the Lender’s discretion, shall be applied in the following manner:
	 
	13.1.1	 	first, in or towards payment of any unpaid costs and expenses of the Lender under any of the
Security Documents;
	 
	13.1.2	 	secondly in or towards payment to the Lender, pari passu, of any accrued interest owing in
respect of the Loan which shall have become due and any sums due under the Master Agreement in
respect of any interest rate swap;




33









 






	13.1.3	 	thirdly, pari passu in or towards repayment of the Loan (whether the same is due and payable
or not) and shall be applied, in respect of the Loan, pro rata against the outstanding
repayment instalments and any other sums payable in the nature of Break Costs under the Master
Agreement;
	 
	13.1.4	 	fourthly, the surplus (if any) shall be paid to the Borrower or to whomsoever else may then
be entitled to receive such surplus.
	 
	13.2	 	Set-off
	 
	13.2.1	 	The Borrower irrevocably authorises the Lender (without prejudice to any of the Lender’s
rights at law, in equity or otherwise), at any time and without notice to the Borrower, to
apply any credit balance to which the Borrower is then entitled standing upon any account of
the Borrower with any branch of the Lender in or towards satisfaction of any sum due and
payable from the Borrower to the Lender under any of the Security Documents. For this
purpose, the Lender is authorised to purchase with the moneys standing to the credit of such
account such other currencies as may be necessary to effect such application.
	 
	13.2.2	 	The Lender shall not be obliged to exercise any right given to it by this clause 13.2. The
Lender shall notify the Borrower forthwith upon the exercise or purported exercise of any
right of set off giving full details in relation thereto.
	 
	13.2.3	 	Nothing in this clause 13.2 shall be effective to create a charge or other security
interest.
	 
	13.3	 	No charge
	 
	 	 	The provisions of this clause 13 shall not, and shall not be construed so as to,
constitute a charge or create or declare a trust by the Lender over all or any part of a
sum received or recovered by it in the circumstances mentioned in clause 13.3.
	 
	13.4	 	Further assurance
	 
	 	 	The Borrower undertakes with the Lender that the Security Documents shall both at the date
of execution and delivery thereof and throughout the Facility Period be valid and binding
obligations of the respective parties thereto which, with the rights of the Lender
thereunder, are 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 Lender may be
necessary or desirable for perfecting the security contemplated or constituted by the
Security Documents.
	 
	13.5	 	Conflicts
	 
	 	 	In the event of any conflict between this Agreement and any of the other Security
Documents, the provisions of this Agreement shall prevail.
	 
	13.6	 	No implied waivers, remedies cumulative
	 
	 	 	No failure or delay on the part of the Lender to exercise any power, right or remedy under
any of the Security Documents shall operate as a waiver thereof, nor shall any single or
partial exercise by the Lender of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy. The remedies
provided in the Security Documents are cumulative and are not exclusive of any remedies
provided by law. No waiver by the Lender shall be effective unless it is in writing.




34









 






	13.7	 	Severability
	 
	 	 	If any provision of this Agreement is prohibited, invalid, illegal or unenforceable in any
jurisdiction, such prohibition, invalidity, illegality or unenforceability shall not
affect or impair howsoever the remaining provisions thereof or affect the validity,
legality or enforceability of such provision in any other jurisdiction.
	 
	13.8	 	Force Majeure
	 
	 	 	Regardless of any other provision of this Agreement, the Lender shall not be liable for
any failure to perform the whole or any part of this Agreement resulting directly or
indirectly from (i) the action or inaction or purported action of any governmental or
local authority (ii) any strike, lockout, boycott or blockade (including any strike,
lockout, boycott or blockade effected by or upon the Lender or any of its representatives
or employees) (iii) any act of God (iv) any act of war (whether declared or not) or
terrorism (v) any failure of any information technology or other operational systems or
equipment affecting the Lender or (vi) any other circumstances whatsoever outside the
Lender’s control.
	 
	13.9	 	Amendments
	 
	 	 	This Agreement may be amended or varied only by an instrument in writing executed by all
parties hereto who irrevocably agree that the provisions of this clause 13.11 may not be
waived or modified except by an instrument in writing to that effect signed by both of
them.
	 
	13.10	 	Counterparts
	 
	 	 	This Agreement may be executed in any number of counterparts and all such counterparts
taken together shall be deemed to constitute one and the same agreement which may be
sufficiently evidenced by one counterpart.
	 
	13.11	 	English language
	 
	 	 	All documents required to be delivered under and/or supplied whensoever in connection
howsoever with any of the Security Documents and all notices, communications, information
and other written material whatsoever given or provided in connection howsoever therewith
must either be in the English language or accompanied by an English translation certified
by a notary, lawyer or consulate acceptable to the Lender.
	 
	14	 	ACCOUNTS AND RETENTIONS
	 
	14.1	 	General
	 
	 	 	The Borrower undertakes with the Lender that it will ensure that:
	 
	14.1.1	 	the Guarantor will on or before the Drawdown Date, open the Earnings Account; and
	 
	14.1.2	 	all moneys payable to the Guarantor in respect of the Earnings (as defined in the Mortgage)
shall, unless and until the Lender directs to the contrary pursuant to the provisions of the
Mortgage, be paid to the Earnings Account, provided however that if any of the moneys paid to
the Earnings Account are payable in a currency other than USD, they shall be paid to a
sub-account of the Earnings Account denominated in such currency (except that if the Guarantor
fails to open such a sub-account, the Lender shall then convert such moneys into USD at the
Lender’s spot rate of exchange at the relevant time for the purchase of USD with such currency
and the term “spot rate of exchange” shall include any premium and costs of exchange payable
in connection with the purchase of USD with such currency).




35









 






	14.2	 	Earnings Account: withdrawals
	 
	 	 	Any sums standing to the credit of the Earnings Account may be applied from time to time
(i) Firstly and to make the payments required under this Agreement, (ii) secondly subject
to there being no breach of Clause 14.3 and to no Event of Default having occurred, in the
operation of the Vessel and (iii) subject to there being at any time sufficient funds to
pay amounts due under (i) and (ii) above as they fall due, thirdly for the general
corporate purposes of the Borrower.
	 
	14.3	 	Application of accounts
	 
	 	 	At any time after the occurrence of an Event of Default, the Lender may, without notice to
the Borrower, apply all moneys then standing to the credit of the Earnings Account
(together with interest from time to time accruing or accrued thereon) in or towards
satisfaction of any sums due to the Lender under the Security Documents in the manner
specified in clause 13.1.
	 
	14.4	 	Pledge of accounts
	 
	 	 	The Earnings Account and all amounts from time to time respectively standing to the credit
thereof shall be subject to the security constituted and the rights conferred by the
Earnings Account Pledge.
	 
	15	 	ASSIGNMENT, TRANSFER AND LENDING OFFICE
	 
	15.1	 	Benefit and burden
	 
	 	 	This Agreement shall be binding upon, and enure for the benefit of, the Lender and the
Borrower and their respective successors.
	 
	15.2	 	No assignment by Borrower
	 
	 	 	The Borrower may not assign or transfer any of its rights or obligations under this
Agreement.
	 
	15.3	 	Transfer by Lender
	 
	 	 	The Lender may assign or transfer all or any part of its rights, benefits and/or
obligations under this Agreement and/or any of the other Security Documents to any one or
more banks or other financial institutions (a “Transferee”) (i) if the Transferee is a
company affiliated to, or in the same group or ownership or control as the Lender, or an
Event of Default has occurred which is continuing, without the consent of the Borrower and
(ii) otherwise, with the prior written consent of the Borrower (such consent not to be
unreasonably withheld) provided always that any such Transferee, by delivery of such
undertaking as the Lender may approve, becomes bound by the terms of this Agreement and
agrees to perform all or, as the case may be, the relevant part of the Lender’s
obligations under this Agreement.
	 
	15.4	 	Documentation
	 
	 	 	If the Lender assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clause 15.3 the Borrower undertakes,
immediately on being requested to do so by the Lender, to enter into, and procure that the
other Security Parties shall enter into, such documents as may be necessary or desirable
to transfer to the Transferee all or the relevant part of the Lender’s interest in the
Security Documents. Thereafter, all relevant references in this Agreement to the Lender
shall be construed as a reference to the Lender and/or its Transferee to the extent of
their respective interests.




36









 






	15.5	 	Lending office
	 
	 	 	The Lender shall lend through its office at the address specified above or through any
other office of the Lender selected from time to time by it through which the Lender
wishes to lend for the purposes of this Agreement.
	 
	15.6	 	Disclosure of information
	 
	 	 	The Lender may disclose to a prospective assignee, transferee or to any other person who
may propose entering into contractual relations with the Lender in relation to this
Agreement such information about or in connection with any of the Security Parties and the
Security Documents as the Lender considers appropriate.
	 
	16	 	NOTICES AND OTHER MATTERS
	 
	16.1	 	Notices
	 
	16.1.1	 	unless otherwise specifically provided herein, every notice under or in connection with this
Agreement shall be given in English by letter delivered personally and/or sent by post and/or
transmitted by fax and/or electronically;
	 
	16.1.2	 	in this clause “notice” includes any demand, consent, authorisation, approval, instruction,
certificate, request, waiver or other communication.
	 
	16.2	 	Addresses for communications, effective date of notices
	 
	16.2.1	 	Subject to clause 16.2.2, clause 16.2.4 and 16.3 notices to the Borrower shall be deemed to
have been given and shall take effect when received in full legible form by the Borrower at
the address and/or the fax number appearing below (or at such other address or fax number as
the Borrower may hereafter specify for such purpose to the Lender by notice in writing);





	 	 	 	 	 
	 
	 	Address	 	331 Kifissias Avenue
	 
	 	 	 	Kifissia 145 61
	 
	 	 	 	Greece
	 
	 	 	 	 
	 
	 	Fax No:	 	+ 30 210 625 2817







	16.2.2	 	notwithstanding the provisions of clause 16.2.1 or clause 16.2.4, a notice of Default and/or
a notice given pursuant to clause 10.2 or clause 10.3 to the Borrower shall be deemed to have
been given and shall take effect when delivered, sent or transmitted by the Lender to the
Borrower to the address or fax number referred to in clause 16.2.1;
	 
	16.2.3	 	subject to clause 16.2.4, notices to the Lender shall be deemed to be given, and shall take
effect, when received in full legible form by the Lender at the address and/or the fax number
address appearing below (or at any such other address or fax number as the Lender may
hereafter specify for such purpose to the Borrower by notice in writing);





	 	 	 	 	 
	 

	 	Address
	 	Ludwig-Erhard-Strasse 1
	 

	 	 	 	20459 Hamburg
	 

	 	 	 	Germany
	 
	 	 	 	 
	 

	 	Fax no:
	 	+49 40 3701 4649
	 
	 	 	 	 
	 

	 	Attn:
	 	Eva Neugebauer






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	16.2.4	 	if under clause 16.2.1 or clause 16.2.3 a notice would be deemed to have been given and
effective on a day which is not a working day in the place of receipt or is outside the normal
business hours in the place of receipt, the notice shall be deemed to have been given and to
have taken effect at the opening of business on the next working day in such place.
	 
	16.3	 	Electronic Communication
	 
	16.3.1	 	Any communication to be made by and/or between the Lender and the Security Parties or any of
them under or in connection with the Security Documents or any of them may be made by
electronic mail or other electronic means, if and provided that all such parties:






	 	(a)	 	notify each other in writing of their electronic mail address and/or any
other information required to enable the sending and receipt of information by that
means; and
	 
	 	(b)	 	notify each other of any change to their electronic mail address or any
other such information supplied by them.






	16.3.2	 	Any electronic communication made by and/or between the Lender and the Security Parties or
any of them will be effective only when actually received in readable form and, in the case of
any electronic communication made by the Borrower to the Lender, only if it is addressed in
such manner as the Lender shall specify for this purpose.
	 
	17	 	GOVERNING LAW
	 
	 	 	This Agreement is governed by and shall be construed in accordance with English law.
	 
	18	 	JURISDICTION
	 
	18.1	 	Exclusive Jurisdiction
	 
	 	 	For the benefit of the Lender, and subject to clause 18.4 below, the Borrower hereby
irrevocably agrees that the courts of England shall have exclusive jurisdiction:
	 
	18.1.1	 	to settle any disputes or other matters whatsoever arising under or in connection with this
Agreement and any disputes or other such matters arising in connection with the negotiation,
validity or enforceability of this Agreement or any part thereof, whether the alleged
liability shall arise under the laws of England or under the laws of some other country and
regardless of whether a particular cause of action may successfully be brought in the English
courts; and
	 
	18.1.2	 	to grant interim remedies or other provisional or protective relief.
	 
	18.2	 	Submission and service of process
	 
	 	 	The Borrower accordingly irrevocably and unconditionally submits to the jurisdiction of
the English courts. Without prejudice to any other mode of service the Borrower:
	 
	18.2.1	 	irrevocably empowers and appoints Saville & Co. of One Carey Lane, London EC2V 8AE, England
as its agent to receive and accept on its behalf any process or other document relating to any
proceedings before the English courts in connection with this Agreement;
	 
	18.2.2	 	agrees to maintain such an agent for service of process in England from the date hereof
until the end of the Facility Period;




38









 






	18.2.3	 	agrees that failure by a process agent to notify the Borrower of service of process will not
invalidate the proceedings concerned;
	 
	18.2.4	 	without prejudice to the effectiveness of service of process on its agent under clause
18.2.1 above but as an alternative method, consents to the service of process relating to any
such proceedings by mailing or delivering a copy of the process to its address for the time
being applying under clause 18.2;
	 
	18.2.5	 	agrees that if the appointment of any person mentioned in clause 18.2.1 ceases to be
effective, the Borrower shall immediately appoint a further person in England to accept
service of process on its behalf in England and, failing such appointment within seven (7)
days the Lender shall thereupon be entitled and is hereby irrevocably authorised by the
Borrower in those circumstances to appoint such person by notice to the Borrower.
	 
	18.3	 	Forum non conveniens and enforcement abroad
	 
	 	 	The Borrower:
	 
	18.3.1	 	waives any right and agrees not to apply to the English court or other court in any
jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the
ground that England is an inappropriate forum and/or that Proceedings have been or will be
started in any other jurisdiction in connection with any dispute or related matter falling
within clause 18.1; and
	 
	18.3.2	 	agrees that a final unappealable judgment or order of an English court in a dispute or other
matter falling within clause 18.1 shall be conclusive and binding on the Borrower and may be
enforced against it in the courts of any other jurisdiction.
	 
	18.4	 	Right of Lender, but not Borrower, to bring proceedings in any other jurisdiction
	 
	18.4.1	 	Nothing in this clause 18 limits the right of the Lender to bring Proceedings, including
third party proceedings, against the Borrower, or to apply for interim remedies, in connection
with this Agreement in any other court and/or concurrently in more than one jurisdiction;
	 
	18.4.2	 	the obtaining by the Lender of judgment in one jurisdiction shall not prevent it from
bringing or continuing proceedings in any other jurisdiction, whether or not these shall be
founded on the same cause of action.
	 
	18.5	 	Enforceability despite invalidity of Agreement
	 
	 	 	Without prejudice to the generality of clause 13.9, the jurisdiction agreement contained
in this clause 18 shall be severable from the rest of this Agreement and shall remain
valid, binding and in full force and shall continue to apply notwithstanding this
Agreement or any part thereof being held to be avoided, rescinded, terminated, discharged,
frustrated, invalid, unenforceable, illegal and/or otherwise of no effect for any reason.
	 
	18.6	 	Effect in relation to claims by and against non-parties
	 
	18.6.1	 	For the purpose of this clause “Foreign Proceedings” shall mean any Proceedings except
proceedings brought or pursued in England arising out of or in connection with (i) or in any
way related to any of the Security Documents or any assets subject thereto or (ii) any action
of any kind whatsoever taken by the Lender pursuant thereto or which would, if brought by the
Borrower against the Lender, have been required to be brought in the English courts;




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	18.6.2	 	the Borrower shall not bring or pursue any Foreign Proceedings against the Lender and shall
use its best endeavours to prevent persons not party to this Agreement from bringing or
pursuing any Foreign Proceedings against the Lender;
	 
	18.6.3	 	If, for any reason whatsoever, any Security Party and/or any person connected howsoever with
any Security Party (including but not limited to any shareholder of the Borrower) brings or
pursues against the Lender any Foreign Proceedings, the Borrower shall indemnify the Lender on
demand in respect of any and all claims, losses, damages, demands, causes of action,
liabilities, costs and expenses (including, but not limited to, legal costs) of whatsoever
nature howsoever arising from or in connection with such Foreign Proceedings which the Lender
certifies as having been incurred by it;




the Lender and the Borrower hereby agree and declare that the benefit of this clause 18 shall
extend to and may be enforced by any officer, employee, agent or business associate of the Lender
against whom the Borrower brings a claim in connection howsoever with any of the Security Documents
or any assets subject thereto or any action of any kind whatsoever taken by, or on behalf of or for
the purported benefit of the Lender pursuant thereto or which, if it were brought against the
Lender, would fall within the material scope of clause 18.1. In those circumstances this clause 18
shall be read and construed as if references to the Lender were references to such officer,
employee, agent or business associate, as the case may be.





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Schedule 1




Form of Drawdown Notice





			
	To:	 	Deutsche Bank AG Filiale Deutschlandgeschäft

Ludwig-Erhard-Strasse 1

20459 Hamburg

Germany





[•] 2008




Dear Sirs




Facility agreement dated [          ] February 2008 in respect of a loan of USD40,250,000 (the “Loan
Agreement”) made between (1) Stealthgas Inc. as Borrower and (2) Deutsche Bank AG Filiale
Deutschlandgeschäft as Lender.



We refer to the Loan Agreement. Words and expressions whose meanings are defined therein shall
have the same meanings when used herein.



We hereby give you notice that we wish to draw the sum of USD [                     ] on [date] 2008 in respect of the
Loan for payment to [     ] and select a first Interest Period in respect of such drawing of [•]
months. The funds should be credited to [     ] with [     ] .



We confirm that:




	(a)	 	no Default has occurred;
	 
	(b)	 	the representations and warranties contained in clause 7 of the Loan Agreement are
true and correct at the date hereof as if made with respect to the facts and
circumstances existing at such date;
	 
	(c)	 	the borrowing to be effected by the drawdown of the Loan is within our corporate
powers, has been validly authorised by appropriate corporate action; and
	 
	(d)	 	there are no Required Authorisations.





	 	 	 	 	 
	 	 	 
	By  	
 	 	 
	 	Authorised Signatory 	 	 
	 	STEALTHGAS INC. 	 	 



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Schedule 2

Conditions precedent

Part 1





	(a)	 	Corporate documents
	 
	 	 	Certified Copies of all documents which evidence or relate to the constitution of each
Security Party and its current corporate existence;
	 
	(b)	 	Corporate authorities






	 	(i)	 	Certified Copies of resolutions of the directors of each Security Party
approving such of the Security Documents to which such Security Party is a party and
authorising the execution and delivery thereof and performance of such Security
Party’s obligations thereunder, additionally certified by an officer of such Security
Party as having been duly passed at a duly convened meeting of the directors of such
Security Party and not having been amended, modified or revoked and being in full
force and effect; and
	 
	 	(ii)	 	originals or Certified Copies of any powers of attorney issued by any
Security Party pursuant to such resolutions;






	(c)	 	Required Authorisations
	 
	 	 	a certificate (dated no earlier than 5 Banking Days prior to the Drawdown Date) that there
are no Required Authorisations or that there are no Required Authorisations except those
described in such certificate and Certified Copies of which as duly executed (including
any conditions and/or documents ancillary thereto) are appended thereto.
	 
	(d)	 	Certificate of incumbency
	 
	 	 	a list of directors and officers of each Security Party specifying the names and positions
of such persons, certified by an officer of such Security Party to be true, complete and
up to date;
	 
	(e)	 	Master Agreement, etc
	 
	 	 	the Master Agreement, the Master Agreement Assignment and the Earnings Account Pledge duly
executed and delivered;
	 
	(f)	 	Know-your-customer
	 
	 	 	all such documentation and information as the Lender may require from any Security Party
pursuant to the Lender’s “know-your-customer” requirements in respect of the Borrower and
the Guarantor;
	 
	(g)	 	Fees
	 
	 	 	evidence that such fees as are due and payable on the Execution Date will have been paid
in full; and
	 
	(h)	 	Borrower’s process agent
	 
	 	 	a letter from the agent for receipt of service of proceedings referred to in clause
18.2.1 accepting its appointment under each of the Security Documents in which it is or
is to be appointed as the agent for any Security Party.





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Part 2





	(a)	 	Evidence satisfactory to the Lender that the Vessel:






	 	(i)	 	Purchase
	 
	 	 	 	has been unconditionally delivered by the Builder to the Seller, and thereafter
unconditionally on-delivered by the Seller to, and accepted by, the Guarantor
under the MOA, and the full purchase price payable under the MOA (in addition to
the part to be financed by the Loan) has been duly paid, together with a copy of
the bill of sale and protocol of delivery and acceptance relating thereto
together with evidence that the gross purchase price payable under the MOA is USD
57,500,000;
	 
	 	(ii)	 	Registration and Encumbrances
	 
	 	 	 	is registered in the name of the Guarantor through the Registry under the laws
and flag of the Marshall Islands and that she and her Earnings, Insurances and
Requisition Compensation (as defined in the Mortgage) and the Approved Charter
are free of Encumbrances except Permitted Encumbrances;
	 
	 	(iii)	 	Classification
	 
	 	 	 	has received and maintains the Classification free of all requirements and
recommendations of the Classification Society; and
	 
	 	(iv)	 	Insurance
	 
	 	 	 	is insured in accordance with the provisions of the Vessel Security Documents and
all requirements of the Vessel Security Documents in respect of such insurance
have been complied with (including without limitation, receipt by the Lender of
customary brokers’ letters of undertaking regarding the placing of hull and
machinery and war risks cover and confirmation from the protection and indemnity
association or other insurer with which the Vessel is entered for insurance or
insured against protection and indemnity risks, that any necessary declarations
required by the association or insurer for the removal of any oil pollution
exclusion have been made and that any such exclusion does not apply to her);
	 
	 	(iii)	 	Charter
	 
	 	 	 	has been delivered to and unconditionally accepted by the Approved Charterer
under and in accordance with the Approved Charter;
	 
	 	(v)	 	Sub-charter
	 
	 	 	 	will forthwith be sub-charterered for at least two years by the Approved Charterer
to American Eagle Tankers, a subsidiary of Petroliam Nasional Berhad of Malaysia.






	(b)	 	Security Documents
	 
	 	 	the Guarantee, the Mortgage, the General Assignment, the Tripartite Deed and the Charter
Assignment each duly executed and delivered;
	 
	(c)	 	Notices of assignment and acknowledgements




43









 






	 	 	counterpart originals of duly executed notices of assignment required by the terms of the
Security Documents referred to in (b) above and in the forms prescribed by these Security
Documents and any other documents required to be delivered pursuant thereto;
	 
	(d)	 	Mortgage registration
	 
	 	 	evidence that the Mortgage has been duly registered against the Vessel in accordance with
the laws of the Marshall Islands;
	 
	(e)	 	Underlying Documents
	 
	 	 	Certified Copies of all of the Underlying Documents in a form and substance acceptable to
the Lender.
	 
	(f)	 	Laws of the Marshall Islands opinion
	 
	 	 	an opinion of Messrs Blank Rome, special legal advisers in New York to the Lender;
	 
	(g)	 	Further opinions
	 
	 	 	any such further opinions as may be required by the Lender;
	 
	(h)	 	ISPS Code
	 
	 	 	evidence satisfactory to the Lender that the Vessel is subject to a ship security plan
which complies with the ISPS Code and a copy of the ISSC for the Vessel; and
	 
	(i)	 	Valuations
	 
	 	 	an up-to-date valuation prepared at the cost of the Borrower by an Approved
Broker giving her charter-fee value in scope, form and substance acceptable to
the Lender.





44









 





Schedule 3

Form of Compliance Certificate



To:      Deutsche Bank AG Filiale Deutschlandgeschäft (as Lender)



From:




Date [               ] 200[  ]




Facility agreement dated [          ] 2008 in respect of a loan of USD40,250,000 (the “Loan Agreement”) made
between (1) Stealthgas Inc. as Borrower and (2) Deutsche Bank AS Filiale Deutschlandgeschäft as
Lender.



Dear Sirs




We refer to the Loan Agreement. Words and expressions whose meanings are defined in the Loan
Agreement shall have the same meanings when used herein.



We hereby confirm that [except as stated below] as at the date hereof to the best of our knowledge
and belief after due inquiry:-




	1.	 	the aggregate cash owned by the Group which is freely available and not subject to
any Encumbrance is USD[                    ] and the number of ships owned by the
Group is [          ];
	 
	2.	 	the ratio of EBITDA to Interest Expense for the 12 month period ending on [          ] is [          ]to 1;
	 
	3.	 	the ratio of Total Debt (less Unencumbered Cash) of the Group to Total Assets (less
Unencumbered Cash) is [          ] to 1;
	 
	4.	 	no Default has occurred;
	 
	5.	 	the representations set out in clause 7 of the Loan Agreement are true and accurate
with reference to all facts and circumstances now existing and all Required
Authorisations have been obtained and are in full force and effect.





[State any exceptions/qualifications to the above statements]




Yours faithfully




[          ]




	 	 	 	 	 
	 	 	 
	By        	
 	 	 
	 	[Chief Financial Officer : STEALTHGAS INC./MR ROI INC.] 	 	 
	 	 	 	 



45









 






	 	 	 	 	 



Execution Pages





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



	 	 	 
	SIGNED as a deed by
	 	)
	for and on behalf of
	 	)
	STEALTHGAS INC.
	 	)
	(as Borrower under and pursuant to
	 	)
	a power of attorney dated
	 	)
	February 2008) in the presence of
	 	)
	 
	 	 
	SIGNED by
	 	)
	for and on behalf of
	 	)
	DEUTSCHE BANK AG
	 	)
	FILIALE DEUTSCHLANDGESCHÄFT`
	 	)
	(as Lender under and pursuant to
	 	)
	a power of attorney dated
	 	)
	February 2008) in the presence of
	 	)







46