Exhibit 10.14


 


Private & Confidential


 


LOAN
AGREEMENT


for a


 


Loan of up to
US$35,500,000


to


KITHNOS
MARITIME INC.


NAXOS MARITIME INC.


PAROS MARITIME INC.


SANTORINI MARITIME INC.


and


SERIFOS MARITIME INC.


 


provided by


THE BANKS AND FINANCIAL
INSTITUTIONS SET OUT IN SCHEDULE 1


 


Arranger, Agent, Security Agent
and Account Bank


AEGEAN BALTIC BANK S.A.


 


Swap Providers


AEGEAN BALTIC BANK S.A.


and


HSH NORDBANK AG


 


NORTON ROSE


 





















 


Contents


 


	
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Purpose and definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  The Total Commitment and the
  Advances

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Interest and Interest Periods

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Repayment and prepayment

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Fees, commitment
  commission and expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Payments and
  taxes; accounts and calculations

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Representations
  and warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Undertakings

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Unlawfulness
  and increased costs

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Security, set-off
  and pro-rata payments

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Assignment,
  transfer and lending office

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  Arranger, Agent
  and Security Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Notices and other
  matters

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Governing law and
  jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1

  	
  The
  Banks and their Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2

  	
  Form of
  Drawdown Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 3

  	
  Documents
  and evidence required as conditions precedent to the Loan being made

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4

  	
  Form of
  Transfer Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 5

  	
  Contract
  Instalment Advances per Ship

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6

  	
  Form of
  Corporate Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 7

  	
  Form of
  Pre-delivery Security Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 8

  	
  Form of
  Master Swap Agreement

  	
   

  
				



 





















 


	
  Schedule 9

  	
  Form of
  Master Agreement Security Deed

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 10

  	
  Form of
  Trust Deed

  	
   

  



 





















 


THIS AGREEMENT is dated 30 August 2005 and made BETWEEN:


 


(1)                                 KITHNOS
MARITIME INC., NAXOS MARITIME INC., PAROS MARITIME INC., SANTORINI MARITIME
INC. and
SERIFOS MARITIME INC. as joint and
several Borrowers;


 


(2)                                 AEGEAN BALTIC BANK S.A. as Arranger, Agent, Security Agent and Account
Bank;


 


(3)                                 THE BANKS AND FINANCIAL
INSTITUTIONS whose names and
addresses are set out in schedule 1 as Banks; and


 


(4)                                 AEGEAN
BALTIC BANK S.A. and HSH NORDBANK AG as Swap
Providers.


 


IT IS AGREED as follows:


 


1                                         Purpose
and definitions


 


1.1                               Purpose


 


This Agreement sets out the terms and conditions
upon and subject to which the Banks agree, according to their several
obligations, to make available to the Borrowers, jointly and severally, in up
to thirty five (35) Advances, a loan of up to Thirty five million five hundred
thousand Dollars ($35,500,000) for the purpose of financing and/or, as the case
may be, refinancing part of the construction and acquisition cost of the Ships.


 


1.2                               Definitions


 


In this Agreement, unless the context otherwise
requires:


 


“ABB Master Agreement Security
Deed” means the security deed executed or (as the context may require) to be
executed by the Borrowers in favour of the Security Agent in relation to
certain of the rights of the Borrowers under the ABB Master Swap Agreement in
the form set out in schedule 9;


 


“ABB Master Swap Agreement” means the agreement
made or (as the context may require) to be made between the ABB Swap Provider
and the Borrowers, comprising an ISDA Master Agreement (including the Schedule thereto)
in the form set out in schedule 8 and includes any Designated Transactions
from time to time entered into thereunder and any Confirmations from time to
time exchanged thereunder and governed thereby;


 


“ABB Swap Provider” means Aegean Baltic
Bank S.A. of 28 Diligianni Street, 145 62 Kifissia, Greece (or of such other
address as may last have been notified to the other parties to this Agreement
pursuant to clause 17.1.3 or the ABB Master Swap Agreement) and includes its
successors in title;


 


“Account Bank” means Aegean Baltic
Bank S.A. of 28 Diligianni Street, 145 62 Kifissia, Greece (or of such other
address as may last have been notified to the other parties to this Agreement
pursuant to clause 17.1.3) or such other bank as may be designated by the Agent
as the Account Bank for the purposes of this Agreement and includes its
successors in title;


 


“Account Pledges” means, together, the
Operating Account Pledges and the Retention Account Pledge and “Account Pledge” means any of them;


 


“Accounts” means, together, the
Operating Accounts and the Retention Account and “Account” means any of them;


 


“Additional Cost” means:


 


(a)                                  in relation to the
Kithnos Ship, the Kithnos Additional Cost;


 


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(b)                                 in relation to the Naxos Ship, the Naxos
Additional Cost;


 


(c)                                  in relation to the Paros Ship, the Paros
Additional Cost;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Additional Cost; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Additional Cost,


 


and “Additional
Costs” means any or all of them;


 


“Additional
Cost Advance”:


 


(a)                                  in relation to the Kithnos Ship and the Kithnos
Tranche, means the Kithnos. Additional Cost Advance;


 


(b)                                 in relation to the Naxos Ship and the Naxos
Tranche, means the Naxos Additional Cost Advance;


 


(c)                                  in relation to the Paros Ship and the Paros
Tranche, means the Paros Additional Cost Advance;


 


(d)                                 in relation to the Santorini Ship and the
Santorini Tranche, means the Santorini Additional Cost Advance; or


 


(e)                                  in relation to the Serifos Ship and the Serifos
Tranche, means the Serifos Additional Cost Advance,


 


and “Additional Cost Advances” means
any or all of them;


 


“Advance” means each borrowing of a proportion of the Total Commitment by the
Borrowers or (as the context may require) the principal amount of such
borrowing, it includes (i) each Kithnos Contract Instalment Advance, (ii) the
Kithnos Delivery Advance, (iii) the Kithnos Additional Cost Advance, (iv) the
Kithnos Top-up Advance, (v) each Naxos Contract Instalment Advance, (vi) the
Naxos Delivery Advance, (vii) the Naxos Additional Cost Advance, (viii) the
Naxos Top-up Advance, (ix) each Paros Contract Instalment Advance, (x) the
Paros Delivery Advance, (xi) the Paros Additional Cost Advance, (xii) the Paros
Top-up Advance, (xiii) each Santorini Contract Instalment Advance, (xiv) the
Santorini Delivery Advance, (xv) the Santorini Additional Cost Advance, (xvi)
the Santorini Top-up Advance, (xvii) each Serifos Contract Instalment Advance,
(xviii) the Serifos Delivery Advance, (xix) the Serifos Additional Cost Advance
and (xx) the Serifos Top-up Advance and:


 


(a)                                  in relation to the Kithnos Ship and the Kithnos
Tranche, means the Kithnos Advances;


 


(b)                                 in relation to the Naxos Ship and the Naxos
Tranche, means the Naxos Advances;


 


(c)                                  in relation to the Paros Ship and the Paros
Tranche, means the Paros Advances;


 


(d)                                 in relation to the Santorini Ship and the
Santorini Tranche, means the Santorini Advances; or


 


(e)                                  in relation to the Serifos Ship and the Serifos
Tranche, means the Serifos Advances,


 


and “Advances” means any or all of them;


 


“Aegean Marine” means Aegean Marine Petroleum S.A. of 80 Broad
Street, Monrovia, Republic of Liberia and includes its successors in title;


 


“Agent” means
Aegean Baltic Bank S.A. of 28 Diligianni Street, 145 62 Kifissia, Greece (or of
such other address as may last have been notified to the other parties to this
Agreement


 


2





















 


pursuant to clause 17.1.3) or such other person as may be appointed as
agent by the Banks and the Swap Providers pursuant to clause 16.13 and includes
its successors in title;


 


“Approved Broker” means each of Arrow Research Ltd. of London,
England, Astrup Fearnley A/S of Oslo, Norway, 

H. Clarkson & Company Ltd. of London, England, Maersk Broker K/S of
Copenhagen, Denmark, Simpson Spence & Young Ltd. of London, England,
R.S. Platou Shipbrokers of Oslo, Norway and Barry Rogliano Salles of Paris,
France and includes their respective successors in title and “Approved Brokers” means any or all of
them;


 


“Arranger” means Aegean Baltic Bank S.A. of 28 Diligianni Street, 145 62 Kifissia,
Greece (or such other address as may last have been notified to the other
parties to this Agreement pursuant to clause 17.1.3) and includes its
successors in title;


 


“Balloon Instalment” has, in respect of each Tranche, the meaning
ascribed thereto in clause 4.1.1;


 


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


 


“Banks” means the banks and financial institutions listed in schedule 1 and
includes their respective successors in title and Transferee Banks and “Bank” means any of them;


 


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


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Borrower;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Borrower;


 


(c)                                  in relation to the Paros Ship, the Paros
Borrower;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Borrower; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Borrower,


 


and “Borrowers”
means any or all of them;


 


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


 


“Builders”
means, together, FSIGC and FSS and “Builder” means
either of them;


 


“Casualty Amount” means, in relation to each Ship, Five hundred
thousand Dollars ($500,000) or the equivalent in any other currency;


 


“Classification” means, in relation to each Ship, the highest
class available for a vessel of her type with the relevant Classification
Society or such other classification as the Agent shall, at the


 


3





















 


request of a Borrower, have agreed in writing shall be treated as the
Classification in relation to such Borrower’s Ship for the purposes of the
relevant Ship Security Documents;


 


“Classification Society” means, in relation to each Ship, American Bureau of Shipping or such
other classification society which the Agent shall, at the request of a
Borrower, have agreed in writing shall be treated as the Classification Society
in relation to such Borrower’s Ship for the purposes of the relevant Ship
Security Documents;


 


“Code” means
the International Management Code for the Safe Operation of Ships and for
Pollution Prevention constituted pursuant to Resolution A. 741 (18) of the
International Maritime Organisation and incorporated into the International
Convention on Safety of Life at Sea 1974 (as amended) and includes any
amendments or extensions thereto and any regulation issued pursuant thereto;


 


“Commitment”
means, in relation to each Bank, the amount set out opposite its name in the
column headed “Commitment” in schedule 1 and/or, in the case of a
Transferee Bank, the amount transferred as specified in the relevant Transfer
Certificate, as reduced in each case by any relevant term of this Agreement;


 


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


 


“Confirmation”
shall have, in relation to any continuing Designated Transaction, the meaning
ascribed to it in the Master Swap Agreement under which the relevant Designated
Transaction is entered into;


 


“Contract”
means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Contract;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Contract;


 


(c)                                  in relation to the Paros Ship, the Paros
Contract;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Contract; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Contract,


 


and “Contracts”
means any or all of them;


 


“Contract Assignment Consent and
Acknowledgement” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos Contract
Assignment Consent and Acknowledgement;


 


(b)                                 in relation to the Naxos Ship, the Naxos Contract
Assignment Consent and Acknowledgement;


 


(c)                                  in relation to the Paros Ship, the Paros Contract
Assignment Consent and Acknowledgement;


 


(d)                                 in relation to the Santorini Ship, the Santorini
Contract Assignment Consent and Acknowledgement; or


 


(e)                                  in relation to the Serifos Ship, the Serifos Contract
Assignment Consent and Acknowledgement,


 


and “Contract Assignment Consents and
Acknowledgements” means any or all of them;


 


4





















 


“Contract Instalment Advances”:


 


(a)                                  in relation to the Kithnos Ship and the Kithnos
Tranche, means the Kithnos Contract Instalment Advances;


 


(b)                                 in relation to the Naxos Ship and the Naxos
Tranche, means the Naxos Contract Instalment Advances;


 


(c)                                  in relation to the Paros Ship and the Paros
Tranche, means the Paros Contract Instalment Advances;


 


(d)                                 in relation to the Santorini Ship and the
Santorini Tranche, means the Santorini Contract Instalment Advances; or


 


(e)                                  in relation to the Serifos Ship and the Serifos
Tranche, means the Serifos Contract Instalment Advances,


 


and “Contract Instalment Advance” means
any of them; 


 


“Contract Price” means:


 


(a)                                  in relation to Kithnos Ship, the Kithnos
Contract Price;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Contract Price;


 


(c)                                  in relation to the Paros Ship, the Paros
Contract Price;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Contract Price; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Contract Price,


 


and “Contract Prices” means any or all of them;


 


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


 


“Corporate Guarantee” means the corporate guarantee executed or (as
the context may require) to be executed by the Corporate Guarantor in favour of
the Security Agent in the form set out in schedule 6;


 


“Corporate Guarantor” means Aegean Bunkering Services Inc. of Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the
Marshall Islands MH96960 and includes its successors in title;


 


“Creditors” means, together, the Arranger, the Agent, the Security Agent, the
Account Bank, the Swap Providers and the Banks and “Creditor” means any of them;


 


“Deed of Covenant” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Deed of Covenant;


 


(b)                                 in relation to the Naxos Ship, the Naxos Deed
of Covenant;


 


(c)                                  in relation to the Paros Ship, the Paros Deed
of Covenant;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Deed of Covenant; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Deed of Covenant,


 


5





















 


and “Deeds of Covenant” means
any or all of them;


 


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


 


“Delivery Advance” means:


 


(a)                                  in relation to the Kithnos Ship and the Kithnos
Tranche, means the Kithnos Delivery Advance;


 


(b)                                 in relation to the Naxos Ship and the Naxos
Tranche, means the Naxos Delivery Advance;


 


(c)                                  in relation to the Paros Ship and the Paros
Tranche, means the Paros Delivery Advance;


 


(d)                                 in relation to the Santorini Ship and the
Santorini Tranche, means the Santorini Delivery Advance; or


 


(e)                                  in relation to the Serifos Ship and the Serifos
Tranche, means the Serifos Delivery Advance,


 


and “Delivery Advances” means
any or all of them;


 


“Delivery Date” means, in relation to each Ship, the date on
which such Ship is delivered to the relevant Borrower in accordance with the
relevant Contract;


 


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


 


(a)                                  it is entered into by the Borrowers with the
relevant Swap Provider pursuant to either Master Swap Agreement as contemplated
by clause 2.9; and


 


(b)                                 its purpose is the hedging of the Borrowers’ exposure
under this Agreement to fluctuations of LIBOR in relation to the funding of one
or more Tranches (or any part thereof) for a period expiring no later than the
final Repayment Date of the relevant Tranche(s) (or the relevant part thereof);


 


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


 


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


 


“Drawdown Date” means, in relation to each Advance, any date,
being a Banking Day falling during the Drawdown Period for such Advance, on
which the relevant Advance is, or is to be, made available;


 


“Drawdown Notice” means, in relation to each Advance, a notice
substantially in the form of schedule 2 in respect of such Advance;


 


“Drawdown Period” means, in relation to each Advance, the period
commencing on the date of this Agreement and ending on the Termination Date or
the period ending on such earlier date (if any) on which (a) the aggregate
amount of the Advances is equal to the Total Commitment or (b) the Total
Commitment is reduced to zero pursuant to clauses 4.3, 10.2 or 12 or (c) the
Delivery of the Ship relevant to such Advance takes place;


 


6





















 


“Early Termination Date” shall have, in relation to any continuing
Designated Transaction, the meaning ascribed to it in the Master Swap Agreement
under which the relevant Designated Transaction is entered into;


 


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


 


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


 


“Environmental Affiliate” means any agent or employee of any Borrower or
any other Relevant Party or any person having a contractual relationship with
any Borrower or any other Relevant Party in connection with 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;


 


“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 any and all enforcement, clean-up,
removal or other governmental or regulatory actions or orders instituted or
completed pursuant to any Environmental Law or any Environmental Approval
together with claims made by any third party relating to damage, contribution,
loss or injury, resulting from any actual or threatened emission, spill,
release or discharge of a Pollutant from any Relevant Ship;


 


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


 


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


 


“Fee Letter” means the fee letter of even date herewith executed or (as the context
may require) to be executed between the Borrowers, the Corporate Guarantor, the
Personal Guarantor, the Manager, the Agent and the Arranger;


 


“First Repayment Date” means, in relation to each Tranche (and subject
to clause 6.3), the date falling three (3) months after the earlier of (a) the
Drawdown Date of the Delivery Advance relevant to such Tranche and (b) the
last day of the Drawdown Period for the Delivery Advance relevant to such
Tranche;


 


“Flag State” means such state or territory designated in writing by the Majority
Banks, at the request of a Borrower, as being the “Flag State” of such Borrower’s Ship for the purposes of the relevant
Ship Security Documents;


 


“FSIGC” means Fujian Shipbuilding Industry Group Corporation of 27 Qunzhong
Road, Fuzhou, Fujian, The People’s Republic of China and includes its
successors in title;


 


“FSS” means
Fujian Southeast Shipyard of 7# Jianshe Road, Economic Technical Development
Zone of Fuzhou, Fujian Province, The People’s Republic of China and includes
its successors in title;


 


7





















 


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


 


“HSH Master Agreement Security Deed” means the security deed executed or (as the
context may require) to be executed by the Borrowers in favour of the Security
Agent in relation to certain of the rights of the Borrowers under the HSH
Master Swap Agreement in the form set out in schedule 9;


 


“HSH Master Swap Agreement” means the agreement made or (as the context may
require) to be made between the HSH Swap Provider and the Borrowers, comprising
an ISDA Master Agreement (including the Schedule thereto) in the form set
out in schedule 8 and includes any Designated Transactions from time to
time entered into thereunder and any Confirmations from time to time exchanged
thereunder and governed thereby;


 


“HSH Swap Provider” means HSH Nordbank AG of Gerhart-Hauptmann-Platz
50, 20095 Hamburg, Germany (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause 17.1.3 or
the HSH Master Swap Agreement) and includes its successors in title;


 


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


 


“Insurances” means, in relation to a Ship, all policies and contracts of insurance
(which expression includes all entries of that Ship in a protection and
indemnity or war risks association) which are from time to time during the
Security Period in place or taken out or entered into by or for the benefit of
the relevant Borrower (whether in the sole name of such Borrower, or in the
joint names of such Borrower and the Security Agent and/or any other Creditor
or otherwise) in respect of such Borrower’s Ship and her Earnings or otherwise
howsoever in connection with such Ship and all benefits thereof (including
claims of whatsoever nature and return of premiums);


 


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


 


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


 


“Iota” means Iota Corporation of 80 Broad Street, Monrovia, Republic of Liberia
and includes its successors in title;


 


“ISPS Code” means the International Ship and Port facility Security Code constituted
pursuant to resolution A.924(22) of the International Maritime Organization now
set out in Chapter XI-2 of the International Convention for the Safety of Life
at Sea 1974 (as amended) as adopted by a Diplomatic conference of the
International Maritime Organisation on Maritime Security in December 2002
and includes any amendments or extensions thereto and any regulation issued
pursuant thereto;


 


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


 


“Kithnos Additional Cost” means One million five hundred and fifty
thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be
payable by the Kithnos Borrower to Iota pursuant to the Kithnos Supervision
Agreement, as the cost for the services provided by Iota thereunder;


 


8





















 


“Kithnos Additional Cost Advance” means an Advance of up to $1,240,000 made or
(as the context may require) to be made available to the Borrowers for the purpose
of financing and/or refinancing part of the Kithnos Additional Cost;


 


“Kithnos Advances” means, together, the Kithnos Contract
Instalment Advances, the Kithnos Delivery Advance, the Kithnos Additional Cost
Advance and the Kithnos Top-up Advance and “Kithnos
Advance” means any of them;


 


“Kithnos Borrower” means Kithnos Maritime Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
Islands MH96960 and includes its successors in title;


 


“Kithnos Contract” means the shipbuilding contract dated 6 February 2005
made between the Kithnos Borrower and the Builders, as amended by an Addendum No. 1
thereto dated 31 March 2005, an Addendum No. 2 thereto dated 27 April 2005
and an Addendum No. 3 thereto dated 27 May 2005 and as may be further
amended and supplemented from time to time with the prior written consent of
the Agent (acting on the instructions of the Majority Banks), relating to the
construction and sale by the Builders, and the purchase by the Kithnos
Borrower, of the Kithnos Ship;


 


“Kithnos Contract Assignment Consent and
Acknowledgement” means
the acknowledgement of notice of, and consent to, the assignment in respect of
the Kithnos Contract given or (as the context may require) to be given by the
Builders in the form scheduled to the Kithnos Pre-delivery Security Assignment;


 


“Kithnos Contract Instalment Advance” means, in relation to the Kithnos Ship, each of
the four (4) Advances of the Kithnos Tranche in the amount of up to
$340,000, in the case of the first such Advance, up to $816,000, in the case of
each of the second and third such Advances, and up to $1,020,000, in the case
of the fourth such Advance, made or, as the context may require, to be made
available to the Borrowers to finance and/or, as the case may be, refinance in
part the payment of an instalment of the Kithnos Contract Price falling due
before the Delivery Date for the Kithnos Ship, in each case as set out in more
detail in schedule 5 and “Kithnos
Contract Instalment Advances” means any or all of them;


 


“Kithnos Contract Price” means Six million eight hundred thousand
Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by
the Kithnos Borrower to the Builders pursuant to the Kithnos Contract as the
contract price for the Kithnos Ship;


 


“Kithnos Deed of Covenant” means the deed of covenant and/or the general
assignment collateral to the Kithnos Mortgage executed or (as the context may
require) to be executed by the Kithnos Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent may require in its sole
discretion;


 


“Kithnos Delivery Advance” means an Advance of up to $2,448,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the final instalment of the
Kithnos Contract Price;


 


“Kithnos Management Agreement” means the agreement made or (as the context may
require) to be made between the Kithnos Borrower and the Manager in a form
previously approved in writing by the Agent (acting on the instructions of the
Majority Banks) providing (inter alia) for
the Manager to manage the Kithnos Ship;


 


“Kithnos Mortgage” means the first priority or (as the case may
be) preferred mortgage of the Kithnos Ship executed or (as the context may
require) to be executed by the Kithnos Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent (acting on the
instructions of the Majority Banks in their sole discretion) may require;


 


“Kithnos Operating Account” means an interest bearing Dollar account of the
Kithnos Borrower opened with the Account Bank and includes any sub-accounts
thereof and any other


 


9





















 


account designated in writing by the Agent to be a Kithnos Operating
Account for the purposes of this Agreement;


 


“Kithnos Operating Account Pledge” means the first priority pledge executed or (as
the context may require) to be executed between the Kithnos Borrower, the
Banks, the Swap Providers, the Agent and the Account Bank in respect of the
Kithnos Operating Account in such form as the Agent (acting on the instructions
of the Majority Banks in their sole discretion) may require;


 


“Kithnos Pre-delivery Security Assignment” means the assignment of the Kithnos Contract
and the Kithnos Refund Guarantees executed or (as the context may require) to
be executed by the Kithnos Borrower in favour of the Security Agent in the form
set out in schedule 7;


 


“Kithnos Refund Guarantee” means the letter of guarantee dated 9 June 2005,
number LGD6600200500006 issued by Bank of Communications, Fuzhou Branch as
Refund Guarantor in favour of the Kithnos Borrower in respect of the Builders’
obligations under the Kithnos Contract and any further guarantee(s) to be
issued by a Refund Guarantor in respect of such obligations pursuant to any
agreement supplemental to the Kithnos Contract, and any extensions, renewals or
replacements thereto or thereof, in each case in form and substance acceptable
to the Agent (acting on the instructions of the Majority Banks in their sole
discretion) and “Kithnos Refund Guarantees” means
any or all of them;


 


“Kithnos Refund Guarantee Assignment Consent and
Acknowledgement” means,
in relation to each Kithnos Refund Guarantee, an acknowledgement of notice of,
and consent to, the assignment in respect of that Kithnos Refund Guarantee
given or (as the context may require) to be given by a Refund Guarantor, in the
form scheduled to the Kithnos Pre-delivery Security Assignment and “Kithnos Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;


 


“Kithnos Ship” means the 3,800 dwt product oil tanker
currently known as Hull No. DN-3500-3, to be constructed and sold by the
Builders to the Kithnos Borrower pursuant to the Kithnos Contract and to be
registered on the Delivery Date for such Ship in the ownership of the Kithnos
Borrower through the relevant Registry under the laws and flag of the relevant
Flag State;


 


“Kithnos Supervision Agreement” means the contract dated 10 February 2005
made between the Kithnos Borrower and Iota, as may be amended and supplemented
from time to time with the prior written consent of the Agent, relating to the
provision of design, building supervision, representation, turn-key delivery
services and the procurement of machinery and supplies by Iota to the Kithnos
Borrower;


 


“Kithnos Top-up Advance” means an Advance of up to $420,000 made or (as
the context may require) to be made available to the Borrowers for the purpose
of financing and/or refinancing part of the Kithnos Contract Price and/or the
Kithnos Additional Cost;


 


“Kithnos Tranche” means a Tranche of the Loan of up to Seven
million one hundred thousand Dollars ($7,100,000) to be drawn down by not more
than seven (7) Advances (being the Kithnos Advances);


 


“LIBOR” means in relation to a particular period:


 


(a)                                  the rate per annum for deposits of Dollars for
a period equivalent to such period at or around 11:00 a.m. on the
Quotation Date for such period as displayed on Reuters BBA page LIBOR01
(and, for the purposes of this Agreement, “Reuters
BBA page LIBOR01” means the display designated as “Reuters BBA page LIBOR01”
on the Telerate Service or such other page as may replace “Reuters BBA page LIBOR01” on the Telerate 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 for the purpose
of displaying BBA Interest Settlement Rates (as defined in the British Bankers’
Association’s Recommended Terms and Conditions (“BBAIRS” terms) dated August, 1996) for Dollars)); or


 


10





















 


(b)                                 if on such date no such rate is displayed,
LIBOR for such period shall be the rate per annum determined by the Agent to be
the arithmetic mean of the rates per annum (rounded upward if necessary to the
nearest one sixteenth (1/16th) of one per cent) quoted to the Agent by each
Bank at the request of the Agent as the rate for deposits in Dollars in an
amount comparable with the amount in relation to which LIBOR is to be
determined and for a period equal to the relevant period offered to that Bank
by prime banks in the London Interbank Market at or about 11:00 a.m. on
the Quotation Date for such period;


 


“Loan” means the aggregate principal amount owing to the Banks under this
Agreement at any relevant time;


 


“Majority Banks” means at any relevant time Banks (i) the
aggregate of whose Contributions exceeds Sixty six point six per cent (66.6%)
of the Loan or (ii) (if no principal amounts are outstanding under this
Agreement) the aggregate of whose Commitments exceeds Sixty six point six per
cent (66.6%) of the Total Commitment;


 


“Management Agreement” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Management Agreement;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Management Agreement;


 


(c)                                  in relation to the Paros Ship, the Paros
Management Agreement;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Management Agreement; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Management Agreement,


 


and “Management Agreements” means any or all of them;


 


“Manager” means Aegean Bunkering Services Inc. of Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 or any
other person appointed by a Borrower, with the prior written consent of the
Agent, as the manager of such Borrower’s Ship and includes its successors in
title;


 


“Manager’s Undertakings” means, collectively, the manager’s undertakings
and assignments executed or (as the context may require) to be executed by the
Manager in favour of the Security Agent and/or any other Creditor in respect of
each of the Ships each in such form as the Agent may require in its sole
discretion and, singly, each a “Manager’s
Undertaking”;


 


“Margin” means, in relation to each Tranche:


 


(a)                                  from the Drawdown Date of the first Contract
Instalment Advance of such Tranche to be drawn down up to the day falling
immediately prior to the Drawdown Date of the Delivery Advance of such Tranche,
One point four zero per cent (1.40%) per annum; and


 


(b)                                 from the Drawdown Date of the Delivery Advance
of such Tranche and at all times thereafter, One point three zero per cent
(1.30%) per annum;


 


“Master Agreement Security Deed” means:


 


(a)                                  in relation to the ABB Master Swap Agreement
and the ABB Swap Provider, the ABB Master Agreement Security Deed; or


 


(b)                                 in relation to the HSH Master Swap Agreement
and the HSH Swap Provider, the HSH Master Agreement Security Deed,


 


and “Master Agreement Security Deeds” means
either or both of them;


 


11





















 


“Master Swap Agreement” means:


 


(a)                                  in relation to the ABB Swap Provider, the ABB
Master Swap Agreement; or


 


(b)                                 in relation to the
HSH Swap Provider, the HSH Master Swap Agreement,


 


and “Master Swap Agreements” means either or
both of them;


 


“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:


 


(a)           in relation to the Kithnos Ship, the Kithnos Mortgage;


 


(b)          in relation to the Naxos Ship, the Naxos Mortgage;


 


(c)           in relation to the Paros Ship, the Paros Mortgage;


 


(d)          in relation to the Santorini Ship, the Santorini Mortgage; or


 


(e)           in relation to the Serifos Ship, the Serifos Mortgage,


 


and “Mortgages” means any or all of them;


 


“Mortgaged Ship” means, at any relevant time, any Ship which is
at such time subject to a Mortgage and/or the Earnings, Insurances and
Requisition Compensation of which are subject to an Encumbrance pursuant to the
relevant Ship Security Documents and a Ship shall, for the purposes of this
Agreement, be deemed to be a Mortgaged Ship as from whichever shall be the
earlier of (a) the Drawdown Date of the Delivery Advance for that Ship and
(b) the date that the Mortgage of that Ship shall have been executed and
registered in accordance with this Agreement until whichever shall be the
earlier of (i) the payment in full of the amount required to be paid by
the Agent pursuant to clause 4.3 following the sale or Total Loss of such Ship
and (ii) the date on which all moneys owing under the Security Documents
have been repaid in full;


 


“Naxos Additional Cost” means One million five hundred and fifty
thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be
payable by the Naxos Borrower to Iota pursuant to the Naxos Supervision
Agreement, as the cost for the services provided by Iota thereunder;


 


“Naxos Additional Cost Advance” means an Advance of up to $1,240,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the Naxos Additional Cost;


 


“Naxos Advances” means, together, the Naxos Contract Instalment
Advances, the Naxos Delivery Advance, the Naxos Additional Cost Advance and the
Naxos Top-up Advance and “Naxos Advance” means
any of them;


 


“Naxos Borrower” means Naxos Maritime Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
Islands MH96960 and includes its successors in title;


 


12





















 


“Naxos Contract” means the shipbuilding contract dated 6 February 2005
made between the Naxos Borrower and the Builders, as amended by an Addendum No. 1
thereto dated 31 March 2005, an Addendum No. 2 thereto dated 27 April 2005
and an Addendum No. 3 thereto dated 27 May 2005 and as may be further
amended and supplemented from time to time with the prior written consent of
the Agent (acting on the instructions of the Majority Banks), relating to the
construction and sale by the Builders, and the purchase by the Naxos Borrower,
of the Naxos Ship;


 


“Naxos Contract Assignment Consent and Acknowledgement”
means the
acknowledgement of notice of, and consent to, the assignment in respect of the Naxos
Contract given or (as the context may require) to be given by the Builders in
the form scheduled to the Naxos Pre-delivery Security Assignment;


 


“Naxos Contract Instalment Advance” means, in relation to the Naxos Ship, each of
the four (4) Advances of the Naxos Tranche in the amount of up to
$340,000, in the case of the first such Advance, up to $816,000, in the case of
each of the second and third such Advances, and up to $1,020,000, in the case
of the fourth such Advance, made or, as the context may require, to be made
available to the Borrowers to finance and/or, as the case may be, refinance in
part the payment of an instalment of the Naxos Contract Price falling due
before the Delivery Date for the Naxos Ship, in each case as set out in more
detail in schedule 5 and “Naxos Contract
Instalment Advances” means any or all of them;


 


“Naxos Contract Price” means Six million eight hundred thousand
Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by
the Naxos Borrower to the Builders pursuant to the Naxos Contract as the
contract price for the Naxos Ship;


 


“Naxos Deed of Covenant” means the deed of covenant and/or the general
assignment collateral to the Naxos Mortgage executed or (as the context may
require) to be executed by the Naxos Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent may require in its sole
discretion;


 


“Naxos Delivery Advance” means an Advance of up to $2,448,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the final instalment of the
Naxos Contract Price;


 


“Naxos Management Agreement” means the agreement made or (as the context may
require) to be made between the Naxos Borrower and the Manager in a form
previously approved in writing by the Agent (acting on the instructions of the
Majority Banks) providing (inter alia) for
the Manager to manage the Naxos Ship;


 


“Naxos Mortgage” means the first priority or (as the case may
be) preferred mortgage of the Naxos Ship executed or (as the context may
require) to be executed by the Naxos Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent (acting on the
instructions of the Majority Banks in their sole discretion) may require;


 


“Naxos Operating Account” means an interest bearing Dollar account of the
Naxos Borrower opened with the Account Bank and includes any sub-accounts
thereof and any other account designated in writing by the Agent to be a Naxos
Operating Account for the purposes of this Agreement;


 


“Naxos Operating Account Pledge” means the first priority pledge executed or (as
the context may require) to be executed between the Naxos Borrower, the Banks,
the Swap Providers, the Agent and the Account Bank in respect of the Naxos
Operating Account in such form as the Agent (acting on the instructions of the
Majority Banks in their sole discretion) may require;


 


“Naxos Pre-delivery Security Assignment” means the assignment of the Naxos Contract and
the Naxos Refund Guarantees executed or (as the context may require) to be
executed by the Naxos Borrower in favour of the Security Agent in the form set
out in schedule 7;


 


13





















 


“Naxos Refund Guarantee” means the letter of guarantee dated 9 June 2005,
number LGD6600200500013 issued by Bank of Communications, Fuzhou Branch as
Refund Guarantor in favour of the Naxos Borrower in respect of the Builders’
obligations under the Naxos Contract and any further guarantee(s) to be issued
by a Refund Guarantor in respect of such obligations, pursuant to any agreement
supplemental to the Naxos Contract, and any extensions, renewals or
replacements thereto or thereof, in each case in form and substance acceptable
to the Agent (acting on the instructions of the Majority Banks in their sole
discretion) and “Naxos Refund Guarantees” means
any or all of them;


 


“Naxos Refund Guarantee Assignment Consent and
Acknowledgement” means,
in relation to each Naxos refund Guarantee, an acknowledgement of notice of,
and consent to, the assignment in respect of that Naxos Refund Guarantee given
or (as the context may require) to be given by a Refund Guarantor, in the form
scheduled to the Naxos Pre-delivery Security Assignment and “Naxos Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;


 


“Naxos Ship” means the 3,800 dwt product oil tanker currently known as Hull No. DN-3500-10,
to be constructed and sold by the Builders to the Naxos Borrower pursuant to
the Naxos Contract and to be registered on the Delivery Date for such Ship in
the ownership of the Naxos Borrower through the relevant Registry under the
laws and flag of the relevant Flag State;


 


“Naxos Supervision Agreement” means the contract dated 10 February 2005
made between the Naxos Borrower and Iota, as may be amended and supplemented
from time to time with the prior written consent of the Agent, relating to the
provision of design, building supervision, representation, turn-key delivery
services and the procurement of machinery and supplies by Iota to the Naxos
Borrower;


 


“Naxos Top-up Advance” means an Advance of up to $420,000 made or (as
the context may require) to be made available to the Borrowers for the purpose
of financing and/or refinancing part of the Naxos Contract Price and/or the
Naxos Additional Cost;


 


“Naxos Tranche” means a tranche of the Loan of up to Seven
million one hundred thousand Dollars ($7,100,000) to be drawn down by not more
than seven (7) Advances (being the Naxos Advances);


 


“Operating Account” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Operating Account;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Operating Account;


 


(c)                                  in relation to the Paros Ship, the Paros
Operating Account;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Operating Account; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Operating Account,


 


and “Operating Accounts” means any or all of them; 


 


“Operating Account Pledge” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Operating Account Pledge;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Operating Account Pledge;


 


(c)                                  in relation to the Paros Ship, the Paros
Operating Account Pledge;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Operating Account Pledge; or


 


14





















 


(e)                                  in relation to the Serifos Ship, the Serifos
Operating Account Pledge,


 


and “Operating Account Pledges” means any or all of them;


 


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


 


“Paros Additional Cost” means One million five hundred and fifty
thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be
payable by the Paros Borrower to Iota pursuant to the Paros Supervision
Agreement, as the cost for the services provided by Iota thereunder;


 


“Paros Additional Cost Advance” means an Advance of up to $1,240,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the Paros Additional Cost;


 


“Paros Advances” means, together, the Paros Contract Instalment
Advances, the Paros Delivery Advance, the Paros Additional Cost Advance and the
Paros Top-up Advance and “Paros Advance” means
any of them;


 


“Paros Borrower” means Paros Maritime Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
Islands MH96960 and includes its successors in title;


 


“Paros Contract” means the shipbuilding contract dated 6 February 2005
made between the Paros Borrower and the Builders, as amended by an Addendum No. 1
thereto dated 31 March 2005, an Addendum No. 2 thereto dated 27 April 2005
and an Addendum No. 3 thereto dated 27 May 2005 and as may be further
amended and supplemented from time to time with the prior written consent of
the Agent (acting on the instructions of the Majority Banks), relating to the
construction and sale by the Builders, and the purchase by the Paros Borrower,
of the Paros Ship;


 


“Paros Contract Assignment Consent and Acknowledgement”
means the
acknowledgement of notice of, and consent to, the assignment in respect of the
Paros Contract given or (as the context may require) to be given by the
Builders in the form scheduled to the Paros Pre-delivery Security Assignment;


 


“Paros Contract Instalment Advance” means, in relation to the Paros Ship, each of
the four (4) Advances of the Paros Tranche in the amount of up to
$340,000, in the case of the first such Advance, up to $816,000, in the case of
each of the second and third such Advances, and up to $1,020,000, in the case
of the fourth such Advance, made or, as the context may require, to be made
available to the Borrowers to finance and/or, as the case may be, refinance in
part the payment of an instalment of the Paros Contract Price falling due
before the Delivery Date for the Paros Ship, in each case as set out in more
detail in schedule 5 and “Paros Contract
Instalment Advances” means any or all of them;


 


“Paros Contract Price” means Six million eight hundred thousand
Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by
the Paros Borrower to the Builders pursuant to the Paros Contract as the
contract price for the Paros Ship;


 


“Paros Deed of Covenant” means the deed of covenant and/or the general
assignment collateral to the Paros Mortgage executed or (as the context may
require) to be executed by the Paros Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent may require in its sole
discretion;


 


“Paros Delivery Advance” means an Advance of up to $2,448,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the final instalment of the
Paros Contract Price;


 


15





















 


“Paros Management Agreement” means the agreement made or (as the context may
require) to be made between the Paros Borrower and the Manager in a form
previously approved in writing by the Agent (acting on the instructions of the
Majority Banks) providing (inter alia) for
the Manager to manage the Paros Ship;


 


“Paros Mortgage” means the first priority or (as the case may
be) preferred mortgage of the Paros Ship executed or (as the context may
require) to be executed by the Paros Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent (acting on the
instructions of the Majority Banks in their sole discretion) may require;


 


“Paros Operating Account” means an interest bearing Dollar account of the
Paros Borrower opened with the Account Bank and includes any sub-accounts
thereof and any other account designated in writing by the Agent to be a Paros
Operating Account for the purposes of this Agreement;


 


“Paros Operating Account Pledge” means the first priority pledge executed or (as
the context may require) to be executed between the Paros Borrower, the Banks,
the Swap Providers, the Agent and the Account Bank in respect of the Paros
Operating Account in such form as the Agent (acting on the instructions of the
Majority Banks in their sole discretion) may require;


 


“Paros Pre-delivery Security Assignment” means the assignment of the Paros Contract and
the Paros Refund Guarantees executed or (as the context may require) to be
executed by the Paros Borrower in favour of the Security Agent in the form set
out in schedule 7;


 


“Paros Refund Guarantee” means the letter of guarantee dated 9 June 2005,
number LGD6600200500012 issued by Bank of Communications, Fuzhou Branch as
Refund Guarantor in favour of the Paros Borrower in respect of the Builders’
obligations under the Paros Contract and any further guarantee(s) to be issued
by a Refund Guarantor in respect of such obligations, pursuant to any agreement
supplemental to the Paros Contract, and any extensions, renewals or
replacements thereto or thereof, in each case in form and substance acceptable
to the Agent (acting on the instructions of the Majority Banks in their sole
discretion) and “Paros Refund Guarantees” means
any or all of them;


 


“Paros Refund Guarantee Assignment Consent and
Acknowledgement” means,
in relation to each Paros Refund Guarantee, an acknowledgement of notice of,
and consent to, the assignment in respect of that Paros Refund Guarantee given
or (as the context may require) to be given by a Refund Guarantor, in the form
scheduled to the Paros Pre-delivery Security Assignment and “Paros Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;


 


“Paros Ship” means the 3,800 dwt product oil tanker currently known as Hull No. DN-3500-9,
to be constructed and sold by the Builders to the Paros Borrower pursuant to
the Paros Contract and to be registered on the Delivery Date for such Ship in the
ownership of the Paros Borrower through the relevant Registry under the laws
and flag of the relevant Flag State;


 


“Paros Supervision Agreement” means the contract dated 10 February 2005
made between the Paros Borrower and Iota, as may be amended and supplemented
from time to time with the prior written consent of the Agent, relating to the
provision of design, building supervision, representation, turn-key delivery
services and the procurement of machinery and supplies by Iota to the Paros
Borrower;


 


“Paros Top-up Advance” means an Advance of up to $420,000 made or (as
the context may require) to be made available to the Borrowers for the purpose
of financing and/or refinancing part of the Paros Contract Price and/or the
Paros Additional Cost;


 


“Paros Tranche” means a tranche of the Loan of up to Seven
million one hundred thousand Dollars ($7,100,000) to be drawn down by not more
than seven (7) Advances (being the Paros Advances);


 


16





















 


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


 


“Permitted Liens” means, in relation to a Ship, any lien on that
Ship 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
Agent) exceeding the Casualty Amount for such Ship;


 


“Personal Guarantee” means the personal guarantee executed or (as
the context may require) to be executed by the Personal Guarantor in favour of
the Banks, the Swap Providers and the Agent in such form as the Agent shall
require in its sole discretion and/or (as the context may require) any
substitute personal guarantee accepted by the Banks pursuant to clause 10.1.27;


 


Personal Guarantor” means such individual as may be agreed by the
Banks in writing or (as the context may require) any substitute individual who
issues a personal guarantee accepted by the Banks pursuant to clause 10.1.27;


 


“Pollutant” means and includes pollutants, contaminants, toxic substances, oil as
defined in the United States Oil Pollution Act of 1990 and all hazardous
substances as defined in the United States Comprehensive Environmental
Response, Compensation and Liability Act 1980;


 


“Pre-delivery Security Assignment” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Pre-delivery Security Assignment;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Pre-delivery Security Assignment;


 


(c)                                  in relation to the Paros Ship, the Paros
Pre-delivery Security Assignment;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Pre-delivery Security Assignment; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Pre-delivery Security Assignment,


 


and “Pre-delivery Security Assignments” means any or all of them;


 


“Quotation Date” means, in relation to any period for which
LIBOR is to be determined under this Agreement, the date on which quotations
would customarily be provided by leading banks in the London Interbank Market
for deposits in the relevant currency for delivery on the first day of that
period;


 


“Refund Guarantee” means:


 


(a)                                  in relation to the Kithnos Ship, any Kithnos
Refund Guarantee;


 


(b)                                 in relation to the Naxos Ship, any Naxos Refund
Guarantee;


 


(c)                                  in relation to the Paros Ship, any Paros Refund
Guarantee;


 


(d)                                 in relation to the Santorini Ship, any
Santorini Refund Guarantee; or


 


(e)                                  in relation to the Serifos Ship, any Serifos
Refund Guarantee,


 


and “Refund Guarantees” means any or all of them;


 


“Refund Guarantee Assignment Consent and
Acknowledgement” means:


 


(a)                                  in relation to the Kithnos Ship, any Kithnos
Refund Guarantee Assignment Consent and Acknowledgement;


 


17





















 


(b)                                 in relation to the Naxos Ship, any Naxos Refund
Guarantee Assignment Consent and Acknowledgement;


 


(c)                                  in relation to the Paros Ship, any Paros Refund
Guarantee Assignment Consent and Acknowledgement;


 


(d)                                 in relation to the Santorini Ship, any Santorini
Refund Guarantee Assignment Consent and Acknowledgement; or


 


(e)                                  in relation to the Serifos Ship, any Serifos
Refund Guarantee Assignment Consent and Acknowledgement,


 


and “Refund Guarantee Assignment
Consents and Acknowledgements” means any or all of them;


 


“Refund Guarantor” means, in relation to each Refund Guarantee,
Bank of Communications, Fuzhou Branch of Fuzhou, The People’s Republic of China
and/or any other bank or financial institution acceptable to the Agent in its
sole discretion and appointed by the Builders to issue that Refund Guarantee
and includes their respective successors in title and “Refund Guarantors” means any or all of
them;


 


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


 


“Regulatory Agency” means the Government Entity or other organisation
in a Flag State which has been designated by the Government of that Flag State
to implement and/or administer and/or enforce the provisions of the Code;


 


“Related Company”:


 


(a)                                  of a person who is a Creditor, means any
Subsidiary of such person, any company or other entity of which such person is
a Subsidiary and any Subsidiary of any such company or entity; or


 


(b)                                 of a Security Party, means any company or other
entity which is active in the bunkering business or services and which is:


 


(i)                                     a Subsidiary of the relevant Security Party; or


 


(ii)                                  any company or other entity (“holding company”) of which such Security
Party is a Subsidiary; or


 


(iii)                               any Subsidiary (other than such Security Party)
of any such holding company;


 


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


 


“Relevant Party” means any of the Borrowers, the Borrowers’
Related Companies, any other Security Party (other than the Builders and the
Refund Guarantors) and their respective Related Companies;


 


“Relevant Ship” means the Ships and any other vessel from time
to time (whether before or after the date of this Agreement) owned, managed or
crewed by, or chartered to, any Relevant Party;


 


“Repayment Dates” means, in respect of each Tranche (and subject
to clause 6.3), the First Repayment Date in respect of such Tranche and each of
the dates falling at three (3) monthly


 


18





















 


intervals after such First Repayment Date up to and including the date
falling one hundred and seventeen (117) months after such First Repayment Date;


 


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


 


“Restricted Companies” means the Borrowers, their respective Related
Companies and the other Security Parties and their respective Related
Companies;


 


“Retention Account” means an interest bearing Dollar account of the
Borrowers opened or (as the context may require) to be opened jointly by the
Borrowers with the Account Bank and includes any sub-accounts thereof and any
other account designated in writing by the Agent to be a Retention Account for
the purposes of this Agreement;


 


“Retention Account Pledge” means the first priority pledge executed or (as
the context may require) to be executed between the Borrowers, the Banks, the
Agent and the Account Bank in respect of the Retention Account in such form as
the Agent (acting on the instructions of the Majority Banks in their sole
discretion) shall require;


 


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


 


(a)                                  one-third (1/3rd)
of the repayment instalment in respect of such Tranche falling due for payment
pursuant to clause 4.1.1 (as the same may have been reduced by any prepayment)
on the next Repayment Date for such Tranche after the relevant Retention Date;
and


 


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


 


“Retention Dates” means, in relation to each Tranche, the date
falling thirty (30) days after the earlier of (a) the Drawdown Date of the
Delivery Advance of such Tranche and (b) the last day of the Drawdown
Period for the Delivery Advance of such Tranche, and each of the dates falling
at monthly intervals after such date and prior to the final Repayment Date for
such Tranche;


 


“SAFE” means the State Administration for Foreign Exchange of The People’s
Republic of China;


 


“Santorini Additional Cost” means One million five hundred and fifty
thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be
payable by the Santorini Borrower to Iota pursuant to the Santorini Supervision
Agreement, as the cost for the services provided by Iota thereunder;


 


“Santorini Additional Cost Advance” means an Advance of up to $1,240,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the Santorini Additional Cost;


 


“Santorini Advances” means, together, the Santorini Contract
Instalment Advances, the Santorini Delivery Advance, the Santorini Additional
Cost Advance and the Santorini Top-up Advance and “Santorini Advance” means any of them;


 


“Santorini Borrower” means Santorini Maritime Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
Islands MH96960 and includes its successors in title;


 


19





















 


“Santorini Contract” means the shipbuilding contract dated 6 February 2005
made between the Santorini Borrower and the Builders, as amended by an Addendum
No. 1 thereto dated 31 March 2005, an Addendum No. 2 thereto
dated 27 April 2005 and an Addendum No. 3 thereto dated 27 May 2005
and as may be further amended and supplemented from time to time with the prior
written consent of the Agent (acting on the instructions of the Majority
Banks), relating to the construction and sale by the Builders, and the purchase
by the Santorini Borrower, of the Santorini Ship;


 


“Santorini Contract Assignment Consent and
Acknowledgement” means
the acknowledgement of notice of, and consent to, the assignment in respect of
the Santorini Contract given or (as the context may require) to be given by the
Builders in the form scheduled to the Santorini Pre-delivery Security
Assignment;


 


“Santorini Contract Instalment Advance” means, in relation to the Santorini Ship, each
of the four (4) Advances of the Santorini Tranche in the amount of up to
$340,000, in the case of the first such Advance, up to $816,000, in the case of
each of the second and third such Advances, and up to $1,020,000, in the case
of the fourth such Advance, made or, as the context may require, to be made
available to the Borrowers to finance and/or, as the case may be, refinance in
part the payment of an instalment of the Santorini Contract Price falling due
before the Delivery Date for the Santorini Ship, in each case as set out in
more detail in schedule 5 and “Santorini
Contract Instalment Advances” means any or all of them;


 


“Santorini Contract Price” means Six million eight hundred thousand
Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by
the Santorini Borrower to the Builders pursuant to the Santorini Contract as
the contract price for the Santorini Ship;


 


“Santorini Deed of Covenant” means the deed of covenant and/or the general
assignment collateral to the Santorini Mortgage executed or (as the context may
require) to be executed by the Santorini Borrower in favour of the Security
Agent and/or any other Creditors in such form as the Agent may require in its
sole discretion;


 


“Santorini Delivery Advance” means an Advance of up to $2,448,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the final instalment of the
Santorini Contract Price;


 


“Santorini Management Agreement” means the agreement made or (as the context may
require) to be made between the Santorini Borrower and the Manager in a form
previously approved in writing by the Agent (acting on the instructions of the
Majority Banks) providing (inter alia) for
the Manager to manage the Santorini Ship;


 


“Santorini Mortgage” means the first priority or (as the case may
be) preferred mortgage of the Santorini Ship executed or (as the context may
require) to be executed by the Santorini Borrower in favour of the Security
Agent and/or any other Creditors in such form as the Agent (acting on the
instructions of the Majority Banks in their sole discretion) may require;


 


“Santorini Operating Account” means an interest bearing Dollar account of the
Santorini Borrower opened with the Account Bank and includes any sub-accounts
thereof and any other account designated in writing by the Agent to be a
Santorini Operating Account for the purposes of this Agreement;


 


“Santorini Operating Account Pledge” means the first priority pledge executed or (as
the context may require) to be executed between the Santorini Borrower, the
Banks, the Swap Providers, the Agent and the Account Bank in respect of the
Santorini Operating Account in such form as the Agent (acting on the
instructions of the Majority Banks in their sole discretion) may require;


 


“Santorini Pre-delivery Security Assignment” means the assignment of the Santorini Contract
and the Santorini Refund Guarantees executed or (as the context may require) to
be executed by the Santorini Borrower in favour of the Security Agent in the
form set out in schedule 7;


 


20





















 


“Santorini Refund Guarantee” means the letter of guarantee dated 9 June 2005,
number LGD6600200500011 issued by Bank of Communications, Fuzhou Branch as
Refund Guarantor in favour of the Santorini Borrower in respect of the Builders’
obligations under the Santorini Contract and any further guarantee(s) to be
issued by a Refund Guarantor in respect of such obligations, pursuant to any
agreement supplemental to the Santorini Contract, and any extensions, renewals
or replacements thereto or thereof, in each case in form and substance
acceptable to the Agent (acting on the instructions of the Majority Banks in
their sole discretion) and “Santorini Refund Guarantees”
means any or all of them;


 


“Santorini Refund Guarantee Assignment Consent and
Acknowledgement” means,
in relation to each Santorini Refund Guarantee, an acknowledgement of notice
of, and consent to, the assignment in respect of that Santorini Refund
Guarantee given or (as the context may require) to be given by a Refund
Guarantor, in the form scheduled to the Santorini Pre-delivery Security
Assignment and “Santorini Refund Guarantee
Assignment Consents and Acknowledgements” means any or all of them;


 


“Santorini Ship” means the 3,800 dwt product oil tanker
currently known as Hull No. DN-3500-8, to be constructed and sold by the
Builders to the Santorini Borrower pursuant to the Santorini Contract and to be
registered on the Delivery Date for such Ship in the ownership of the Santorini
Borrower through the relevant Registry under the laws and flag of the relevant
Flag State;


 


“Santorini Supervision Agreement” means the contract dated 10 February 2005
made between the Santorini Borrower and Iota, as may be amended and
supplemented from time to time with the prior written consent of the Agent,
relating to the provision of design, building supervision, representation,
turn-key delivery services and the procurement of machinery and supplies by Iota
to the Santorini Borrower;


 


“Santorini Top-up Advance” means an Advance of up to $420,000 made or (as
the context may require) to be made available to the Borrowers for the purpose
of financing and/or refinancing part of the Santorini Contract Price and/or the
Santorini Additional Cost;


 


“Santorini Tranche” means a tranche of the Loan of up to Seven
million one hundred thousand Dollars ($7,100,000) to be drawn down by not more
than seven (7) Advances (being the Santorini Advances);


 


“Security Agent” means Aegean Baltic Bank S.A. of 28 Diligianni
Street, 145 62 Kifissia, Greece (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause 17.1.3) or
such other person as may be appointed as security agent and trustee by the
Banks, the Agent and the Swap Providers pursuant to clause 16.14 and includes
its successors in title;


 


“Security Documents” means this Agreement, the Fee Letter, the
Master Swap Agreements, the Master Agreement Security Deeds, the Mortgages, the
Deeds of Covenant, the Account Pledges, the Manager’s Undertakings, the
Corporate Guarantee, the Personal Guarantee, the Pre-delivery Security
Assignments, the Contract Assignment Consents and Acknowledgements, the Refund
Guarantee Assignment Consents and Acknowledgements and any other documents as
may have been or shall from time to time after the date of this Agreement be
executed to guarantee and/or secure all or any part of the Loan, interest
thereon and other moneys from time to time owing by the Borrowers or any other
Security Party pursuant to this Agreement, the Master Swap Agreements or any
other Security Documents (whether or not any such document also secures moneys
from time to time owing pursuant to any other document or agreement);


 


“Security Party” means each Borrower, the Manager, each Builder,
each Refund Guarantor, the Corporate Guarantor, the Personal Guarantor or any
other person who may at any time be a party to any of the Security Documents
(other than the Creditors);


 


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


 


21





















 


“Security Requirement” means the amount in Dollars (as certified by
the Agent whose certificate shall, in the absence of manifest error, be
conclusive and binding on the Borrowers and the Creditors) which is, at any
relevant time:


 


(a)          during the period commencing on the earlier of (i) the Drawdown
Date of the last Delivery Advance to be drawn down and (ii) the last day
of the last Drawdown Period to elapse, and ending on the date falling sixty
(60) months thereafter (the “First Adjustment
Date”), One hundred
and twenty five per cent (125%) of the aggregate of (A) the Loan and (B) the
aggregate Swap Exposure under both Master Swap Agreements; or


 


(b)         during the period commencing on the date falling immediately after the
First Adjustment Date and ending on the date when all amounts owing under this
Agreement and the other Security Documents have been paid in full, One hundred
and thirty five per cent (135%) of the aggregate of (i) the Loan and (ii) the
aggregate Swap Exposure under both Master Swap Agreements;


 


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


 


“Serifos Additional Cost” means One million five hundred and fifty
thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be
payable by the Serifos Borrower to Iota pursuant to the Serifos Supervision
Agreement, as the cost for the services provided by Iota thereunder;


 


“Serifos Additional Cost Advance” means an Advance of up to $1,240,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the Serifos Additional Cost;


 


“Serifos Advances” means, together, the Serifos Contract
Instalment Advances, the Serifos Delivery Advance, the Serifos Additional Cost
Advance and the Serifos Top-up Advance and “Serifos
Advance” means any of them;


 


“Serifos Borrower” means Serifos Maritime Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
Islands MH96960 and includes its successors in title;


 


“Serifos Contract” means the shipbuilding contract dated 6 February 2005
made between the Serifos Borrower and the Builders, as amended by an Addendum No. 1
thereto dated 31 March 2005, an Addendum No. 2 thereto dated 27 April 2005
and an Addendum No. 3 thereto dated 27 May 2005 and as may be further
amended and supplemented from time to time with the prior written consent of
the Agent (acting on the instructions of the Majority Banks), relating to the
construction and sale by the Builders, and the purchase by the Serifos
Borrower, of the Serifos Ship;


 


“Serifos Contract Assignment Consent and
Acknowledgement” means
the acknowledgement of notice of, and consent to, the assignment in respect of
the Serifos Contract given or (as the context may require) to be given by the
Builders in the form scheduled to the Serifos Pre-delivery Security Assignment;


 


“Serifos Contract Instalment Advance” means, in relation to the Serifos Ship, each of
the four (4) Advances of the Serifos Tranche in the amount of up to
$340,000, in the case of the first such Advance, up to $816,000, in the case of
each of the second and third such Advances, and up to $1,020,000, in the case
of the fourth such Advance, made or, as the context may require, to be made
available to the Borrowers to finance and/or, as the case may be, refinance in
part the payment of an instalment of the Serifos Contract Price falling due
before the Delivery Date


 


22





















 


for the Serifos Ship, in each case as set out in more detail in schedule 5
and “Serifos Contract Instalment Advances” means
any or all of them;


 


“Serifos Contract Price” means Six million eight hundred thousand
Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by
the Serifos Borrower to the Builders pursuant to the Serifos Contract as the
contract price for the Serifos Ship;


 


“Serifos Deed of Covenant” means the deed of covenant and/or the general
assignment collateral to the Serifos Mortgage executed or (as the context may
require) to be executed by the Serifos Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent may require in its sole
discretion;


 


“Serifos Delivery Advance” means an Advance of up to $2,448,000 made or
(as the context may require) to be made available to the Borrowers for the
purpose of financing and/or refinancing part of the final instalment of the
Serifos Contract Price;


 


“Serifos Management Agreement” means the agreement made or (as the context may
require) to be made between the Serifos Borrower and the Manager in a form
previously approved in writing by the Agent (acting on the instructions of the
Majority Banks) providing (inter alia) for the Manager to manage the Serifos Ship;


 


“Serifos Mortgage” means the first priority or (as the case may
be) preferred mortgage of the Serifos Ship executed or (as the context may
require) to be executed by the Serifos Borrower in favour of the Security Agent
and/or any other Creditors in such form as the Agent (acting on the
instructions of the Majority Banks in their sole discretion) may require;


 


“Serifos Operating Account” means an interest bearing Dollar account of the
Serifos Borrower opened with the Account Bank and includes any sub-accounts
thereof and any other account designated in writing by the Agent to be a
Serifos Operating Account for the purposes of this Agreement;


 


“Serifos Operating Account Pledge” means the first priority pledge executed or (as
the context may require) to be executed between the Serifos Borrower, the
Banks, the Swap Providers, the Agent and the Account Bank in respect of the
Serifos Operating Account in such form as the Agent (acting on the instructions
of the Majority Banks in their sole discretion) may require;


 


“Serifos Pre-delivery Security Assignment” means the assignment of the Serifos Contract
and the Serifos Refund Guarantees executed or (as the context may require) to
be executed by the Serifos Borrower in favour of the Security Agent in the form
set out in schedule 7;


 


“Serifos Refund Guarantee” means the letter of guarantee dated 9 June 2005,
number LGD6600200500015 issued by Bank of Communications, Fuzhou Branch as
Refund Guarantor in favour of the Serifos Borrower in respect of the Builders’
obligations under the Serifos Contract and any further guarantee(s) to be
issued by a Refund Guarantor in respect of such obligations, pursuant to any
agreement supplemental to the Serifos Contract, and any extensions, renewals or
replacements thereto or thereof, in each case in form and substance acceptable
to the Agent (acting on the instructions of the Majority Banks in their sole
discretion) and “Serifos Refund Guarantees” means
any or all of them;


 


“Serifos Refund Guarantee Assignment Consent and
Acknowledgement” means,
in relation to each Serifos Refund Guarantee, an acknowledgement of notice of,
and consent to, the assignment in respect of that Serifos Refund Guarantee
given or (as the context may require) to be given by a Refund Guarantor, in the
form scheduled to the Serifos Pre-delivery Security Assignment and “Serifos Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;


 


“Serifos Ship”
means the 3,800 dwt product oil tanker currently known as Hull No. DN-3500-2,
to be constructed and sold by the Builders to the Serifos Borrower pursuant to
the Serifos Contract and to be registered on the Delivery Date for such Ship in
the ownership of the Serifos Borrower through the relevant Registry under the
laws and flag of the relevant Flag State;


 


23





















 


“Serifos Supervision Agreement” means the contract dated 10 February 2005
made between the Serifos Borrower and Iota, as may be amended and supplemented
from time to time with the prior written consent of the Agent, relating to the
provision of design, building supervision, representation, turn-key delivery
services and the procurement of machinery and supplies by Iota to the Serifos
Borrower;


 


“Serifos Top-up Advance” means an Advance of up to $420,000 made or (as
the context may require) to be made available to the Borrowers for the purpose
of financing and/or refinancing part of the Serifos Contract Price and/or the
Serifos Additional Cost;


 


“Serifos Tranche” means a tranche of the Loan of up to Seven
million one hundred thousand Dollars ($7,100,000) to be drawn down by not more
than seven (7) Advances (being the Serifos Advances);


 


“Ships” means, together, the Kithnos Ship, the Naxos Ship, the Paros Ship, the
Santorini Ship and the Serifos Ship and “Ship”
means any of them;


 


“Ship Security Documents” means:


 


(a)                                  in relation to the Kithnos Ship, the Kithnos
Mortgage, the Kithnos Deed of Covenant and the Manager’s Undertaking in respect
of the Kithnos Ship;


 


(b)                                 in relation to the Naxos Ship, the Naxos
Mortgage, the Naxos Deed of Covenant and the Manager’s Undertaking in respect
of the Naxos Ship;


 


(c)                                  in relation to the Paros Ship, the Paros
Mortgage, the Paros Deed of Covenant and the Manager’s Undertaking in respect
of the Paros Ship;


 


(d)                                 in relation to the Santorini Ship, the
Santorini Mortgage, the Santorini Deed of Covenant and the Manager’s
Undertaking in respect of the Santorini Ship; or


 


(e)                                  in relation to the Serifos Ship, the Serifos
Mortgage, the Serifos Deed of Covenant and the Manager’s Undertaking in respect
of the Serifos Ship;


 


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


 


“Subsidiary” of a person means any company or entity directly or indirectly
controlled by such person, and for this purpose “control” means either the ownership of more than 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;


 


“Supervision Agreement”:


 


(a)                                  in relation to the Kithnos Ship, means the
Kithnos Supervision Agreement;


 


(b)                                 in relation to the Naxos Ship, means the Naxos
Supervision Agreement;


 


(c)                                  in relation to the Paros Ship, means the Paros
Supervision Agreement;


 


(d)                                 in relation to the Santorini Ship, means the
Santorini Supervision Agreement; or


 


(e)                                  in relation to the Serifos Ship, means the
Serifos Supervision Agreement,


 


and “Supervision Agreements” means any or all of them;


 


“Swap Exposure” means, as at any relevant time and in relation
to a Master Swap Agreement, the amount certified by the relevant Swap Provider
to the Agent to be the aggregate net amount in Dollars which would be payable
by the Borrowers to such Swap Provider under (and


 


24





















 


calculated in accordance with) section 6(e) (Payments on Early
Termination) of such Master Swap Agreement if an Early Termination Date had
occurred at the relevant time in relation to all continuing Designated
Transactions under that Master Swap Agreement;


 


“Swap Provider” means:


 


(a)          in relation to the ABB Master Swap Agreement, the ABB Swap Provider; or


 


(b)         in relation to the HSH Master Swap Agreement, the HSH Swap Provider,


 


and “Swap Providers” means either or both of them;


 


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


 


“Termination Date” means 31 October 2008 or such later date
as the Agent (acting on the instructions of the Majority Banks) in its sole
discretion may agree in writing;


 


“Top-up Advance”:


 


(a)          in relation to the Kithnos Ship and the Kithnos Tranche, means the
Kithnos Top-up Advance;


 


(b)         in relation to the Naxos Ship and the Naxos Tranche, means the Naxos
Top-up Advance;


 


(c)          in relation to the Paros Ship and the Paros Tranche, means the Paros Top-up
Advance;


 


(d)         in relation to the Santorini Ship and the Santorini Tranche, means the
Santorini Top-up Advance; or


 


(e)          in relation to the Serifos Ship and the Serifos Tranche, means the
Serifos Top-up Advance,


 


and “Top-up Advances” means
any or all of them;


 


“Total Commitment” means, at any relevant time, the aggregate of
all the Banks’ Commitments at such time;


 


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


 


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


 


(b)         the Compulsory Acquisition of such Ship; or


 


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


 


“Tranche” means:


 


(a)          in relation to the Kithnos Ship, the Kithnos Tranche;


 


(b)         in relation to the Naxos Ship, the Naxos Tranche;


 


(c)          in relation to the Paros Ship, the Paros Tranche;


 


25





















 


(d)         in relation to the Santorini Ship, the Santorini Tranche; or


 


(e)          in relation to the Serifos Ship, the Serifos Tranche,


 


and “Tranches” means any or all of them;


 


“Transaction” has, in relation to a Master Swap Agreement, the meaning given to it in
such Master Swap Agreement;


 


“Transfer Certificate” means a certificate in substantially the form
set out in schedule 4;


 


“Transferee Bank” has the meaning ascribed thereto in clause
15.3;


 


“Transferor Bank” has the meaning ascribed thereto in clause
15.3;


 


“Trust Deed” means a trust deed in the form, or substantially in the form, set out in
schedule 10;


 


“Trust Property” means (i) the security, powers, rights,
titles, benefits and interests (both present and future) constituted by and
conferred on the Security Agent under or pursuant to the Security Documents
(including, without limitation, the benefit of all covenants, undertakings,
representations, warranties and obligations given, made or undertaken to the
Security Agent in the Security Documents), (ii) all moneys, property and
other assets paid or transferred to or vested in the Security Agent or any
agent of the Security Agent or any receiver or received or recovered by the
Security Agent or any agent of the Security Agent or any receiver pursuant to,
or in connection with, any of the Security Documents whether from any Security
Party or any other person and (iii) all moneys, investments, property and
other assets at any time representing or deriving from any of the foregoing,
including all interest, income and other sums at any time received or
receivable by the Security Agent or any agent of the Security Agent or any
receiver in respect of the same (or any part thereof); and


 


“Underlying Documents” means, together, the Contracts, the Refund Guarantees,
the Supervision Agreements and the Management Agreements and “Underlying Document” means any of them.


 


1.3                               Headings


 


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


 


1.4                               Construction of certain terms


 


In this Agreement, unless the context otherwise requires:


 


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


 


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


 


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


 


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


 


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


 


26





















 


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


 


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


 


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


 


1.5                               Majority Banks


 


Where this Agreement or any other Security Document provides for any
matter to be determined by reference to the opinion of the Majority Banks or to
be subject to the consent or request of the Majority Banks or for any action to
be taken on the instructions in writing of the Majority Banks, such opinion,
consent, request or instructions shall (as between the Banks) only be regarded
as having been validly given or issued by the Majority Banks if all the Banks
shall have received prior notice of the matter on which such opinion, consent,
request or instructions are required to be obtained and the relevant majority
of such Banks shall have given or issued such opinion, consent, request or
instructions but so that (as between the Borrowers and the Banks) the Borrowers
shall be entitled (and bound) to assume that such notice shall have been duly
received by each relevant Bank and that the relevant majority shall have been
obtained to constitute Majority Banks whether or not this is in fact the case.


 


1.6                               Banks’ Commitment


 


For the purposes of the definition of “Majority
Banks” in clause 1.2, references to the Commitment of a Bank shall,
if the Total Commitment has, at any relevant time, been reduced to zero, be
deemed to be a reference to the Commitment of that Bank immediately prior to
such reduction to zero.


 


2              The
Total Commitment and the Advances


 


2.1                               Agreement to lend


 


The Banks, relying upon each of the representations and warranties in
clause 7, agree to lend to the Borrowers, jointly and severally, upon and
subject to the terms of this Agreement, the principal sum of up to Thirty five
million five hundred thousand Dollars ($35,500,000) in up to thirty five (35)
Advances comprising five (5) Tranches, namely, the Kithnos Tranche, the
Naxos Tranche, the Paros Tranche, the Santorini Tranche and the Serifos
Tranche. The obligation of each Bank under this Agreement shall be to
contribute that proportion of each Advance which, as at the Drawdown Date of
such Advance, its Commitment bears to the Total Commitment.


 


2.2                               Obligations several


 


The obligations of the Banks under this Agreement are several according
to their respective Commitments and/or Contributions; the failure of any Bank
to perform such obligations or the failure of either Swap Provider to perform
its obligations under the relevant Master Swap Agreement shall not relieve any
other Creditor or any Borrower of any of their respective obligations or
liabilities under this Agreement or, as the case may be, either Master Swap
Agreement nor shall any Creditor be responsible for the obligations of any
other Creditor (except for its own obligations, if any, as a Bank or a Swap
Provider) under this Agreement or either Master Swap Agreement.


 


2.3                               Interests several


 


Notwithstanding any other term of this Agreement (but without prejudice
to the provisions of this Agreement relating to or requiring action by the
Majority Banks) the interests of the Creditors are several and the amount due
to any Creditor is a separate and independent debt. Each Creditor


 


27





















 


shall have the right to protect and enforce its rights arising out of
this Agreement and it shall not be necessary for any other Creditor to be
joined as an additional party in any proceedings for this purpose.


 


2.4                               Drawdown


 


Subject to the terms and conditions of this Agreement, each Advance
shall be made to the Borrowers following receipt by the Agent from the
Borrowers of a Drawdown Notice not later than 10:00 a.m. on the third
Banking Day before the date, which shall be a Banking Day falling within the
Drawdown Period for such Advance, on which the Borrowers propose such Advance
is made. A Drawdown Notice shall be effective on actual receipt by the Agent
and, once given, shall, subject as provided in clause 3.6.1, be irrevocable.


 


2.5                               Timing and limitation of
Advances


 


2.5.1                                                The aggregate amount of the Loan shall not
exceed the lesser of:


 


(a)          Thirty five million five hundred thousand Dollars ($35,500,000); and


 


(b)         the aggregate of:


 


(i)             eighty per cent (80%) of the aggregate of the
Contract Prices;


 


(ii)          eighty per cent (80%) of the aggregate of the
Additional Costs; and


 


(iii)       Two million one hundred thousand Dollars
($2,100,000) comprising the Top-Up Advances,


 


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


 


2.5.2                                                The aggregate amount of each Tranche shall not
exceed the lower of:


 


(a)          Seven million one hundred thousand Dollars ($7,100,000); and


 


(b)         the aggregate of:


 


(i)             eighty per cent (80%) of the Contract Price of
the Ship relevant to such Tranche;


 


(ii)          eighty per cent (80%) of the Additional Cost of the Ship relevant to
such Tranche; and


 


(iii)       Four hundred and twenty thousand Dollars ($420,000) being the Top-Up
Advance for the Ship relevant to such Tranche.


 


2.5.3                                                The aggregate amount of the four (4) Contract
Instalment Advances for each Ship shall not exceed Two million nine hundred and
ninety two thousand Dollars ($2,992,000) and:


 


(a)          the first Contract Instalment Advance for a Ship shall not exceed the lower
of (i) Three hundred and forty thousand Dollars ($340,000) and (ii) fifty
per cent (50%) of the first instalment of the Contract Price for that Ship;


 


(b)         each of the second and third Contract Instalment Advances for a Ship
shall not exceed the lower of (i) Eight hundred and sixteen thousand
Dollars ($816,000) and (ii) eighty per cent (80%) of the relevant
instalment of the Contract Price for that Ship;


 


(c)          the fourth Contract Instalment Advance for a Ship shall not exceed the
lower of One million twenty thousand Dollars ($1,020,000) and (ii) one
hundred per cent (100%) of the fourth instalment of the Contract Price for that
Ship; and


 


28





















 


(d)         each Contract Instalment Advance for a Ship:


 


(i)    shall be applied
in or towards payment to the Builders of part of the relevant instalment of the
Contract Price for that Ship;


 


(ii)   shall be made when such instalment has become due and payable, as
specified in more detail in the third column of schedule 5 opposite the
relevant Contract Instalment Advance; and


 


(iii)   shall be paid by the Agent to the Builders, unless the relevant Borrower
has already paid such instalment to the Builders when it was due, in which case
the relevant Contract Instalment Advance shall be advanced to the Borrowers in
refinancing of such payment.


 


2.5.4                                                Each Delivery Advance:


 


(a)          shall not exceed the lower of:


 


(i)             Two million four hundred and forty eight
thousand Dollars ($2,448,000);


 


(ii)          the amount in Dollars which, when added to the
aggregate amount of the Contract Instalment Advances for the relevant Ship
actually drawn down, will produce a figure equal to eighty per cent (80%) of
the Contract Price for that Ship; and


 


(iii)       the amount in Dollars which, when added to the
aggregate amount of the Contract Instalment Advances for the relevant Ship
actually drawn down, will produce a total figure of Five million four hundred
and forty thousand Dollars ($5,440,000);


 


(b)         shall be applied in or towards payment to the Builders of part of the
final instalment of the Contract Price for the relevant Ship;


 


(c)          shall be made on the Delivery Date of the relevant Ship when such final
instalment has become due and payable; and


 


(d)         shall be paid by the Agent to the Builders, unless the relevant Borrower
has already paid such instalment to the Builders when it was due, in which case
the relevant Delivery Advance shall be advanced to the Borrowers in refinancing
of such payment.


 


2.5.5                                                Each Additional Cost Advance:


 


(a)          shall not exceed the lower of (i) One million two hundred and forty
thousand Dollars ($1,240,000) and (ii) eighty per cent (80%) of the
Additional Cost of the Ship relevant to such Additional Cost Advance;


 


(b)         may not be drawn down unless the Contract Instalment Advances and the
Delivery Advance for that Ship have also been drawn down;


 


(c)          may only be drawn down simultaneously with the Delivery Advance for that
Ship; and


 


(d)         shall be applied in or towards payment to Iota of part of the Additional
Cost for the relevant Ship and shall be paid by the Agent to Iota, unless the
relevant Borrower has already paid the Additional Cost (or part thereof) for
that Ship to Iota when it was due, in which case the relevant Additional Cost
Advance (or part thereof) shall be advanced to the Borrowers in refinancing of
such payment.


 


2.5.6                                                Each Top-up Advance:


 


(a)          shall not exceed the lower of (A) Four hundred and twenty thousand
Dollars ($420,000) and (B) the amount in Dollars by which:


 


29





















 


 


(i)             a sum equal to seventy five per cent (75%) of
the market value of the relevant Ship determined in accordance with the
relevant valuation obtained pursuant to schedule 3, Part 6, paragraph
3; 


 


exceeds


 


(ii)          the total amount actually drawn down under the
Contract Instalment Advances, the Delivery Advance and the Additional Cost
Advance for the Ship to which such Top-up Advance relates;


 


(b)         may not be drawn down unless the Contract Instalment Advances, the
Delivery Advance and the Additional Cost Advance for that Ship have also been
drawn down;


 


(c)          may only be drawn down simultaneously with the Delivery Advance for that
Ship;


 


(d)         shall be applied (i) first, in or towards payment to the Builders
of part of the final instalment of the Contract Price for the relevant Ship and
(ii) secondly, as to its balance in refinancing of any other part of the
Contract Price and the Additional Cost for that Ship previously paid by the
relevant Borrower when it was due and not financed or refinanced by this
Agreement; and


 


(e)          (except for the part of the relevant Top-up Advance referred to in
paragraph 2.5.6(d)(ii), which shall be paid by the Agent directly to the
Borrowers) shall be paid by the Agent to the Builders, unless the relevant
Borrower has already paid such final instalment to the Builders when it was
due, in which case the relevant Top-up Advance (or part thereof) shall be
advanced to the Borrowers in refinancing of such payment.


 


2.6                               Availability


 


Upon receipt of a Drawdown Notice complying with the terms of this
Agreement, the Agent shall promptly notify each Bank and each Bank shall make
available to the Agent its portion of the relevant Advance for payment by the
Agent in accordance with clause 6.2. The Borrowers acknowledge that payment of
any Advance or part thereof to the Builders, Iota or the Borrowers or any of
them (as the case may be) in accordance with clause 6.2 shall satisfy the
obligation of the Banks to lend that Advance to the Borrowers under this
Agreement.


 


2.7                               Termination of Total
Commitment


 


Any part of the Total Commitment which remains undrawn and uncancelled
by the Termination Date shall thereupon be automatically cancelled.


 


2.8                               Application of proceeds


 


Without prejudice to the Borrowers’ obligations under clause 8.1.3, no
Creditor shall have any responsibility for the application of the proceeds of
the Loan or any part thereof by the Borrowers.


 


2.9                               Derivative transactions


 


2.9.1                                                If, at any time during the Security Period, the
Borrowers wish to enter into interest rate swap or other derivative transactions
so as to hedge all or any part of their exposure under this Agreement to
interest rate fluctuations, they shall advise the Swap Providers in writing.


 


2.9.2                                                Any such swap or other derivative transaction
shall be concluded with either or both the Swap Providers under the relevant
Master Swap Agreements Provided however that no such swap or other derivative
transaction shall be concluded unless the relevant Swap Provider first agrees
to it in writing. For the avoidance of doubt, other than the relevant Swap
Provider’s agreement in writing referred to in the preceding sentence no prior
approval is required by the Borrowers from all or any of the Banks, the Agent,
the Security Agent or the Account Bank before concluding any such swap or other
derivative transaction, if and when any such swap


 


30





















 


or other derivative transaction has been concluded, it shall constitute
a Designated Transaction under the relevant Master Swap Agreement, and the
Borrowers shall sign a Confirmation with the relevant Swap Provider and advise
the Banks and the other Swap Provider through the Agent promptly after
concluding any such Designated Transaction.


 


3                                         Interest
and Interest Periods


 


3.1                               Normal interest rate


 


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


 


3.2                               Selection of Interest Periods


 


The Borrowers may by notice received by the Agent not later than 10:00 a.m.
on the third Banking Day before the beginning of each Interest Period specify
whether such Interest Period shall have a duration of three (3) months,
six (6) months, nine (9) months, twelve (12) months or such other
period as the Borrowers may select and the Agent (acting on the instructions of
the Majority Banks) may agree.


 


3.3                               Determination of Interest
Periods


 


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


 


3.3.1                the first Interest Period in respect of each
Advance shall commence on the date on which such Advance is drawn down and each
subsequent Interest Period shall commence on the last day of the previous
Interest Period for such Advance;


 


3.3.2                the first Interest Period in respect of each
Advance in respect of a Ship (after the first Advance to be drawn down in
respect of such Ship) shall end on the same day as the then current Interest
Period for the Tranche for such Ship and, on the last day of such Interest
Period, such Advances shall be consolidated into, and shall thereafter
constitute, the Tranche in respect of such Ship;


 


3.3.3                if any Interest Period in respect of a Tranche
would otherwise overrun a Repayment Date for such Tranche, then, in the case of
the last Repayment Date for such Tranche, such Interest Period shall end on
such Repayment Date, and in the case of any other Repayment Date or Repayment
Dates for such Tranche, the relevant Tranche shall be divided into parts so
that there is one part in the amount of the repayment instalment or instalments
due on each Repayment Date for such Tranche falling during that Interest Period
and having an Interest Period ending on the relevant Repayment Date and another
part in the amount of the balance of the relevant Tranche having an Interest
Period ascertained in accordance with clause 3.2 and the other provisions of
this clause 3.3; and


 


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


 


3.4                               Default
interest


 


If the Borrowers fail to pay any sum (including, without limitation, any
sum payable pursuant to this clause 3.4) on its due date for payment under any
of the Security Documents (other than the Master Swap Agreements), the
Borrowers shall pay interest on such sum on demand from the due date up to the
date of actual payment (as well after as before judgment) at a rate


 


31





















 


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


 


3.5                               Notification of Interest
Periods and interest rate


 


The Agent shall notify the Borrowers and the Banks promptly of the
duration of each Interest Period and of each rate of interest (or, as the case
may be default interest) determined by it under this clause 3.


 


3.6                               Market disruption;
non-availability


 


3.6.1                                                If and whenever, at any time prior to the
commencement of any Interest Period:


 


(a)          the Agent shall have determined (which determination shall, in the
absence of manifest error, be conclusive) that adequate and fair means do not
exist for ascertaining LIBOR during such Interest Period; or


 


(b)         none or only one of the Banks supplies the Agent with a quotation for
the purposes of calculating LIBOR (where such a quotation is required having
regard to paragraph (b) of the definition of “LIBOR” in clause 1.2); or


 


(c)          the Agent shall have received notification from Banks with Contributions
aggregating not less than one-third (1/3 rd) of the Loan
(or, prior to the Drawdown Date of the first Advance to be drawn down from
Banks with Commitments aggregating not less than one-third (1/3
rd) of the Total Commitment), that deposits in Dollars are not available to
such Banks in the London Interbank Market in the ordinary course of business in
sufficient amounts to fund the Loan or part thereof or their Contributions for
such Interest Period,


 


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


 


3.6.2                During the period of ten (10) days after
any Determination Notice has been given by the Agent under clause 3.6.1, each
Bank shall certify an alternative basis (the “Alternative
Basis”) for maintaining its Contribution. The Alternative Basis may
at the relevant Bank’s sole and unfettered discretion include (without
limitation) alternative interest periods, alternative currencies or alternative
rates of interest but shall include a margin above the cost of funds to such
Bank equivalent to the Margin. The Agent shall calculate the arithmetic mean of
the Alternative Bases provided by the relevant Banks (the “Substitute Basis”) and


 


32





















 


certify the same to the Borrowers, the Banks and the Swap Providers. The
Substitute Basis so certified shall be binding upon the Borrowers, and shall
take effect in accordance with its terms from the date specified in the
Determination Notice until such time as the Agent notifies the Borrowers that
none of the circumstances specified in clause 3.6.1 continues to exist
whereupon the normal interest rate fixing provisions of this Agreement shall
apply.


 


4              Repayment
and prepayment


 


4.1          Repayment


 


4.1.1                The Borrowers shall repay each Tranche by forty
(40) repayment instalments, one such instalment to be repaid on each of the
Repayment Dates for such Tranche. Subject to the provisions of this Agreement,
the amount of each of the first to thirtieth repayment instalments (inclusive)
for each Tranche shall be $120,000, the amount of each of the thirty first to
thirty ninth repayment instalments (inclusive) for each Tranche shall be
$110,000 and the amount of the fortieth and final repayment instalment for each
Tranche shall be $2,510,000 (comprising a repayment instalment of $110,000 and
a balloon payment of $2,400,000 (each such balloon payment in relation to a
Tranche, the “Balloon Instalment” for
that Tranche)).


 


4.1.2                If the Total Commitment in respect of any
Contract Instalment Advance, the Delivery Advance or the Additional Cost
Advance relating to a Ship, is not drawn down in full, the amount of the
repayments instalments in respect of the Tranche for such Ship (including the
relevant Balloon Instalment) shall be reduced proportionately.


 


4.1.3                If the Total Commitment in respect of the
Top-up Advance relating to a Ship is not drawn down in full, the amount of the
Balloon Instalment in respect of the Tranche for such Ship shall be reduced by
an amount equal to the part of the relevant Top-up Advance that was not drawn
down.


 


4.2          Voluntary prepayment


 


The Borrowers may prepay any Tranche in whole or part (such part being
in an amount of Five hundred thousand Dollars ($500,000) or any larger sum
which is an integral multiple of Five hundred thousand Dollars ($500,000)) on
any Interest Payment Date relating to the part of the Tranche to be repaid
without premium or penalty Provided always that if any such prepayment is made
as a result of a re-financing in part or in full of the relevant part of the
Loan by a bank or financial institution other than Banks, the Borrowers shall
pay to the Agent a prepayment fee of zero point two five per cent (0.25%) on
the amount of the Loan to be prepaid. Such fee shall be distributed by the
Agent to the Banks pro-rata in accordance with their Contributions immediately
prior to the relevant prepayment.


 


4.3          Prepayment on Total Loss and
Sale


 


4.3.1                Before first drawdown


 


On a Ship becoming a Total Loss or suffering damage or being involved in
an incident which in the reasonable opinion of the Agent may result in such Ship
being subsequently determined to be a Total Loss or on the Contract for a Ship
being assigned, transferred, sold or novated to and in favour of any person, in
each case before any Contract Instalment Advance for such Ship is drawn down,
the obligation of the Banks to advance any Contract Instalment Advance for such
Ship (or part thereof) shall immediately cease and the Total Commitment shall
be reduced accordingly.


 


4.3.2                After first drawdown but prior to Delivery


 


On a Ship becoming a Total Loss or suffering damage or being involved in
an incident which in the reasonable opinion of the Agent may result in such
Ship being subsequently determined to be a Total Loss or on the Contract for a
Ship being assigned, transferred, sold or novated to and in favour of any
person, in each case after any Contract Instalment


 


33





















 


Advance for such Ship has been drawn down but prior to the drawing of
the Delivery Advance for such Ship, the obligation of the Banks to advance any
other Advance (or part thereof) for such Ship shall immediately cease, the
Total Commitment shall be reduced accordingly and the Borrowers shall
immediately prepay the Contract Instalment Advances for such Ship in full.


 


4.3.3                Thereafter


 


(a)   If a Mortgaged
Ship is sold (with the prior consent of the relevant Creditors pursuant to the
relevant Ship Security Documents) or becomes a Total Loss prior to the last day
of the last Drawdown Period to elapse, then the Borrowers shall, on the
Disposal Reduction Date for such Mortgaged Ship, prepay the Tranche relevant to
such Mortgaged Ship in full (subject to clause 4.3.3(c)).


 


(b)         If a Mortgaged Ship is sold (with the prior consent of the relevant
Creditors pursuant to the relevant Ship Security Documents) or becomes a Total
Loss after the Drawdown Periods for all the Advances have elapsed, then the
Borrowers shall, on the Disposal Reduction Date for such Mortgaged Ship, prepay
the higher of (i) the full amount of the Tranche relevant to such
Mortgaged Ship and (ii) a part of the Loan equal to the Relevant Amount
(subject to clause 4.3.3(c)).


 


(c)          Notwithstanding sub-paragraphs (a) and (b) of this clause
4.3.3, if a Mortgaged Ship is sold (with the prior consent of the relevant
Creditors pursuant to relevant Ship Security Documents) or becomes a Total Loss
and an Event of Default shall have occurred and be continuing, then the
Borrowers shall prepay such proportion of the Loan as the Banks may require in
their absolute discretion.


 


4.3.4                Defined terms


 


For the purposes of this clause 4.3:


 


(a)          “Disposal Reduction Date” means:


 


(i)             in relation to a Mortgaged Ship which has
become a Total Loss, its Total Loss Reduction Date; and


 


(ii)          in relation to a Mortgaged Ship which is sold
in accordance with the provisions of the relevant Ship Security Documents, the
date of completion of such sale by the transfer of title to such Mortgaged Ship
to the purchaser in exchange for payment of the relevant purchase price;


 


(b)         “Total Loss Reduction Date” means, in relation to a Mortgaged Ship which has become a Total Loss,
the date which is the earlier of:


 


(i)             the date falling ninety (90) days after that on
which such Mortgaged Ship became a Total Loss; and


 


(ii)          the date upon which the relevant insurance
proceeds are or Requisition Compensation is, received by the relevant Borrower
(or the relevant Creditors, as such Borrower’s assignees pursuant to the
relevant Ship Security Documents);


 


(c)          “Relevant Amount”
means an amount in Dollars equal to the higher of:


 


(A)      such amount as shall ensure that, immediately after such prepayment, the
Security Value shall not be less than the Security Requirement; and


 


(B)        such amount as shall ensure that X is not lower than Y;


 


(d)         “X” is the ratio (expressed as a percentage) of:


 


34





















 


(i)             the market value of the Mortgaged Ships
(excluding the relevant Mortgaged Ship lost or sold) as determined in
accordance with clause 8.2.2


 


to


 


(ii)          the aggregate amount of the Loan after
deducting the amount of the relevant prepayment,


 


immediately after the relevant
prepayment is made; and


 


(e)          “Y” is the ratio (expressed as a percentage) of:


 


(i)             the market value of the Mortgaged Ships
(including the relevant Mortgaged Ship lost or sold) as determined in accordance
with clause 8.2.2


 


to


 


(ii)          the aggregate amount of the Loan without
deducting the amount of the relevant prepayment,


 


immediately before the
relevant prepayment is made.


 


4.3.5                Interpretation


 


For the purpose of this Agreement, a Total Loss in respect of a Ship
shall be deemed to have occurred:


 


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


 


(b)         in the case of a constructive total loss of a Ship, upon the date and at
the time notice of abandonment of such Ship is given to the insurers of such
Ship for the time being;


 


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


 


(d)         in the case of Compulsory Acquisition of a Ship, on the date upon which
the relevant requisition of title or other compulsory acquisition of such Ship
occurs; and


 


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


 


4.3.6                                                Application of Total Loss and sale proceeds


 


Any insurance moneys or Requisition Compensation or proceeds of sale
received by the Security Agent or any other Creditors (as the case may be) in
respect of such Total Loss or sale of a Mortgaged Ship under the relevant Ship
Security Documents, shall be applied in or towards making any prepayment and
paying any other moneys required under clauses 4.3 and 4.4 and provided no
Event of Default has occurred and is continuing, the balance (if any) shall be
paid to the Borrowers.


 


4.4                               Amounts payable on prepayment


 


Any prepayment of all or part of the Loan under this Agreement shall be
made together with:


 


35





















 


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


 


4.4.2                any additional amount payable under clauses 6.6
or 12.2; and


 


4.4.3                all other sums payable by the Borrowers to the
Creditors under this Agreement or any of the other Security Documents
including, without limitation, any accrued commitment commission payable under
clause 5.1 and any amounts payable under clause 11.


 


4.5          Notice of prepayment;
reduction of repayment instalments


 


4.5.1                No prepayment may be effected under clause 4.2
unless the Borrowers shall have given the Agent at least thirty (30) days’
prior written notice of their intention to make such prepayment. Every notice
of prepayment shall be effective only on actual receipt by the Agent, shall be
irrevocable, shall specify the Tranche and the amount thereof to be prepaid and
shall oblige the Borrowers to make such prepayment on the date specified.


 


4.5.2                Any amount prepaid pursuant to clause 4.2 in
respect of a Tranche shall be applied in reducing the repayment instalments
(including the relevant Balloon Instalment) of the relevant Tranche under
clause 4.1, proportionately.


 


4.5.3                Any amounts prepaid pursuant to clause 4.3.3(b) shall
be applied, first, in full prepayment of the Tranche relevant to the Ship lost
or sold and, secondly, in reducing the repayment instalments (including the
relevant Balloon Instalments) of the other Tranches under clause 4.1.1
proportionately (and proportionately as between such other Tranches).


 


4.5.4                Any amount prepaid pursuant to clause 4.3.3(c) shall
be applied in reducing such Tranches, and in such manner, as the Banks may
require in their absolute discretion.


 


4.5.5                Any amount prepaid pursuant to clause 8.2.1(a) shall
be applied in prepayment of all Tranches proportionately as between them and in
reduction of the repayment instalments (including the Balloon Instalments) of
each Tranche under clause 4.1.1 in inverse order of their due dates for
payment.


 


4.5.6                The Borrowers may not prepay the Loan or any
part thereof save as expressly provided in this Agreement. No amount prepaid
under this Agreement may be re-borrowed.


 


4.6          Unwinding of Designated Transactions


 


On or prior to any repayment or prepayment of all or part of the Loan
(including, without limitation, pursuant to clauses 4.2, 4.3 or 8.2.1(a) or
any other provision of this Agreement), the Borrowers shall, upon the request
of the Agent, wholly or partially reverse, offset, unwind, cancel, close out,
net out or otherwise terminate one or more of the continuing Designated
Transactions under the Master Swap Agreements or either of them so that the
notional principal amount of the continuing Designated Transactions thereafter
remaining under both Master Swap Agreements does not, and will not in the
future (taking into account the scheduled amortisation), exceed the amount of
the Loan as reducing from time to time thereafter pursuant to clause 4.1.


 


4.7          Cancellation of Commitments


 


The Borrowers may at any time during the relevant Drawdown Period(s) by
notice to the Agent (effective only on actual receipt) cancel, with effect from
a date not less than thirty (30) days after the receipt by the Agent of such
notice, the whole or any part (being Five hundred thousand Dollars ($500,000)
or any larger sum which is an integral multiple of Five hundred thousand
Dollars ($500,000)) of the Total Commitment which is then available for drawing
but has not then been borrowed or requested in a Drawdown Notice. Any such
notice of cancellation, once given, shall be irrevocable, shall specify the
Advance(s) and the amount thereof to be cancelled and upon such cancellation
taking effect the Commitment of each Bank shall be reduced proportionately.


 


36


















 


5                                         Fees,
commitment commission and expenses


 


5.1                               Fees


 


The Borrowers shall pay to the Agent:


 


5.1.1                for the account of the Arranger and the Banks,
an arrangement and participation fee of such amount and payable at such time
and in such manner as specified in the Fee Letter. Such arrangement and
participation fee shall be distributed by the Agent to the Arranger and the
Banks in such proportions as separately agreed between the Arranger and each
Bank; and


 


5.1.2                for the account of each Bank, on 24 August 2005
and on each of the dates falling at three (3) monthly intervals thereafter
until the last day of the last Drawdown Period to elapse and on such day,
commitment commission computed from 24 May 2005 (in the case of the first
payment of commission) and from the date of the preceding payment of commission
(in the case of each subsequent payment), at the rate of zero point four zero
per cent (0.40%) per annum on the daily undrawn amount of such Bank’s
Commitment.


 


The fee and commission referred to in clause 5.1 shall be payable by the
Borrowers to the Agent, whether or not any part of the Total Commitment is ever
advanced and shall be, in each case, non-refundable.


 


5.2                               Expenses


 


The Borrowers shall pay to the Agent on a full indemnity basis on demand
all expenses (including legal, printing and out-of-pocket expenses) incurred by
the Creditors or any of them:


 


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


 


5.2.2                in contemplation of, or otherwise in connection
with, the enforcement of, or preservation of any rights under, any of the Security
Documents, 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 such expenses were incurred to the date of payment (as well after
as before judgment).


 


5.3                               Value
added tax


 


All fees and expenses payable pursuant to this clause 5 shall be paid
together with value added tax or any similar tax (if any) properly chargeable
thereon. Any value added tax chargeable in respect of any services supplied by
the Creditors or any of them 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 Borrowers shall pay all stamp, documentary, registration or other
like duties or taxes (including any duties or taxes payable by any of the
Creditors) imposed on or in connection with any of the Underlying Documents,
the Security Documents or the Loan and shall indemnify the Creditors or any of
them against any liability arising by reason of any delay or omission by the
Borrowers to pay such duties or taxes.


 


37





















 


6                                         Payments
and taxes; accounts and calculations


 


6.1                               No set-off or counterclaim


 


The Borrowers acknowledge that in performing their obligations under
this Agreement, the Banks will be incurring liabilities to third parties in
relation to the funding of amounts to the Borrowers, such liabilities matching
the liabilities of the Borrowers to the Banks and that it is reasonable for the
Banks to be entitled to receive payments from the Borrowers gross on the due
date in order that each of the Banks is put in a position to perform its
matching obligations to the relevant third parties. Accordingly, all payments
to be made by the Borrowers under any of the Security Documents shall 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
Dollars on the due date to such account at such bank and in such place as the
Agent may from time to time specify for this purpose. Save as otherwise
provided in this Agreement or any relevant Security Documents, such payments
shall be for the account of all Banks and the Agent shall distribute such
payments in like funds as are received by the Agent to the Banks rateably in
accordance with their respective Commitment (if prior to the first drawdown) or
Contribution (if following the first drawdown).


 


6.2                               Payment by the Banks


 


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


 


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) days year.


 


6.5                               Certificates conclusive


 


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


 


6.6                               Grossing-up for Taxes - by the
Borrowers


 


6.6.1                If at any time the Borrowers or any of them are
required to make any deduction or withholding in respect of Taxes from any
payment due under any of the Security Documents for the account of any Creditor
or if the Agent or the Security Agent is required to make any deduction or
withholding from a payment to another Creditor or withholding in respect of
Taxes from any payment due under any of the Security Documents, the sum due
from the Borrowers or any of them in respect of such payment shall be increased
to the extent necessary to ensure that, after the making of such deduction or
withholding, the relevant Creditor 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 Borrowers shall indemnify each
Creditor against any losses or costs incurred by it by reason of any failure of
the Borrowers or any of them to make any such deduction or withholding or by


 


38





















 


reason of any increased payment not being made on the due date for such
payment. The Borrowers shall promptly deliver to the Agent any receipts,
certificates or other proof evidencing the amounts (if any) paid or payable in
respect of any deduction or withholding as aforesaid.


 


6.6.2                For the avoidance of doubt, clause 6.6.1 does
not apply in respect of sums due from the Borrowers to a Swap Provider under or
in connection with either Master Swap Agreement as to which sums the provisions
of section 2(d) (Deduction or Withholding for Tax) of the relevant
Master Swap Agreement shall apply.


 


6.7                               Loan account


 


Each Bank shall maintain, in accordance with its usual practice, an
account evidencing the amounts from time to time lent by, owing to and paid to
it under the Security Documents. The Agent and/or the Security Agent shall
maintain a control account (being, in the case of any Mortgage which is in
statutory form, the “Account Current” referred to in such Mortgage) showing the
Loan and other sums owing by the Borrowers under the Security Documents and all
payments in respect thereof being made from time to time. The control account
shall, in the absence of manifest error, be conclusive as to the amount from
time to time owing by the Borrowers under the Security Documents.


 


6.8                               Agent may assume receipt


 


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


 


6.9                               Partial payments


 


If, on any date on which a payment is due to be made by the Borrowers
under any of the Security Documents, the amount received by the Agent from the
Borrowers falls short of the total amount of the payment due to be made by the
Borrowers on such date then, without prejudice to any rights or remedies
available to the Agent, the Security Agent and the Banks under any of the
Security Documents, the Agent shall apply the amount actually received from the
Borrowers in or towards discharge of the obligations of the Borrowers under the
Security Documents in the following order, notwithstanding any appropriation
made, or purported to be made, by the Borrowers:


 


6.9.1                first, in or towards payment, on a pro-rata
basis, of any unpaid costs and expenses of the Agent and the Security Agent
under any of the Security Documents;


 


6.9.2                secondly, in or towards payment, on a pro rata
basis, of any fees and accrued commitment commission payable to the Arranger,
the Agent or any of the other Creditors under, or in relation to, the Security
Documents which remain unpaid;


 


6.9.3                thirdly, in or towards payment to the Banks, on
a pro rata basis, of any accrued interest which shall have become due under any
of the Security Documents but remains unpaid;


 


6.9.4                fourthly, in or towards payment to the Banks,
on a pro rata basis, of any principal amount which shall have become due but
remains unpaid;


 


39





















 


6.9.5                fifthly, in or towards payment to the Banks, on
a pro rata basis, for any loss suffered by reason of any such payment in
respect of principal not being effected on an Interest Payment Date relating to
the part of the Loan repaid;


 


6.9.6                sixthly, in or towards payment to a Swap
Provider of any sums owing to it under the relevant Master Swap Agreement (and
if sums are owing under both Master Swap Agreements, proportionately as between
the Swap Providers); and


 


6.9.7                seventhly, in or towards payment to the
relevant person of any other sum which shall have become due under any of the
Security Documents but remains unpaid (and, if more than one such sum so
remains unpaid, on a pro rata basis).


 


The order of application set out in clauses 6.9.2 to 6.9.6 may be varied
by the Agent if the Majority Banks so direct, without any reference to, or
consent or approval from, the Borrowers.


 


7                                         Representations
and warranties


 


7.1                               Continuing representations and
warranties


 


The Borrowers jointly and severally represent and warrant to each
Creditor that:


 


7.1.1                Due incorporation


 


each of the Borrowers and each of the other Security Parties (other than
the Personal Guarantor) are duly incorporated and validly existing in good
standing, under the laws of the Republic of the Marshall Islands as Marshall
Islands corporations (in the case of the Borrowers, the Corporate Guarantor and
the Manager) and under the laws of their respective countries of incorporation
as limited liability companies (in the case of the other Security Parties) and
have power to carry on their respective businesses as they are now being
conducted and to own their respective property and other assets;


 


7.1.2                Corporate power


 


each of the Borrowers has power to execute, deliver and perform its
obligations under the Underlying Documents and the relevant Borrowers’ Security
Documents to which it is or is to be a party and to borrow the Total Commitment
and each of the other Security Parties has power to execute and deliver and
perform its obligations under the Security Documents to which it is or is to be
a party; all necessary corporate, shareholder and other action has been taken
to authorise the execution, delivery and performance of the same and no
limitation on the powers of any Borrower to borrow will be exceeded as a result
of borrowing the Loan;


 


7.1.3                Binding obligations


 


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


 


7.1.4                No conflict with other obligations


 


the execution and delivery of, the performance of 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 of the Borrowers or any other Security Party is
subject, (ii) conflict with, or result in any breach of any of the terms
of, or constitute a default under, any agreement or other instrument to which
any of the Borrowers or any other Security Party 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 of the Borrowers or
any other Security Party (other than the Personal Guarantor) or (iv) result
in the creation or imposition of or oblige any of the Borrowers or any of their
Related Companies or any other Security Party to create any Encumbrance (other
than a Permitted Encumbrance)


 


40





















 


on any of the undertakings, assets, rights or revenues of any of the
Borrowers or their Related Companies or any other Security Party;


 


7.1.5                No litigation


 


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


 


7.1.6                No filings required


 


save for the registration of the Mortgages in the relevant register
under the laws of the relevant Flag State through the relevant 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 Relevant Jurisdiction
or that any stamp, registration or similar tax or charge be paid in any
Relevant 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 Relevant
Jurisdiction;


 


7.1.7                Choice of law


 


the choice of English law to govern the Underlying Documents and the
Security Documents (other than the Mortgages, the Personal Guarantee and the
Account Pledges), the choice of (i) the law of the relevant Flag State to
govern each Mortgage and (ii) Greek law to govern the Account Pledges and
the Personal Guarantee, and the submissions by the Security Parties to the
non-exclusive jurisdiction of the English courts or (as the case may be) the
Greek courts, are valid and binding;


 


7.1.8                No immunity


 


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


 


7.1.9                Financial statements correct and complete


 


the unaudited combined financial statements of the Manager’s Related
Companies in respect of the financial year ended on 31 December 2004 as
delivered to the Agent have been prepared in accordance with generally accepted
international accounting principles and practices which have been consistently
applied and present fairly and accurately the combined financial position of
the Manager’s Related Companies as at such date and the combined results of the
operations of the Manager’s Related Companies for the financial year ended on
such date and, as at such date, none of its Related Companies 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;


 


7.1.10              Consents obtained


 


every consent, authorisation, licence or approval of, or registration
with or declaration to, governmental or public bodies or authorities or courts
required by any Security Party to authorise, or required by any Security Party
in connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of each of the Underlying Documents and each of the
Security Documents to which it is or is to be a party or the performance by
each Security Party of its obligations under the Security Documents or the
Underlying Documents to which it is or is to be a party has been obtained or
made and is in full force and effect and


 


41





















 


there has been no default in the observance of any of the conditions or
restrictions (if any) imposed in, or in connection with, any of the same; and


 


7.1.11              Shareholdings


 


each of the Borrowers, the Corporate Guarantor and the Manager is
legally and ultimately beneficially owned by such person or persons as
disclosed by or on behalf of the Borrower or any other Security Party to the
Arranger and/or the Agent in the negotiation of this Agreement.


 


7.2                               Initial representations and
warranties


 


The Borrowers jointly and severally further represent and warrant to
each Creditor that:


 


7.2.1                Pari passu


 


the obligations of each Borrower under this Agreement are direct,
general and unconditional obligations of such Borrower and rank at least pari
passu with all other present and future unsecured and unsubordinated
Indebtedness of such Borrower except for obligations which are mandatorily
preferred by operation of law and not by contract;


 


7.2.2                No default under other Indebtedness


 


(a)   none of the
Borrowers nor any of their respective Related Companies nor any other Security
Party is (nor would with the giving of notice or lapse of time or the
satisfaction of any other condition or combination thereof be) in breach of or
in default under any agreement relating to Indebtedness to which it is a party
or by which it may be bound; and


 


(b)   neither of the
Builders nor any Refund Guarantor is (nor would with the giving of notice or
lapse of time or the satisfaction of any other condition or combination thereof
be) in breach of or in default under any agreement relating to Borrowed Money
to which it is a party or by which it may be bound;


 


7.2.3                Information


 


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


 


7.2.4                No withholding Taxes


 


no Taxes are imposed by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents 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;


 


7.2.5                No Default


 


no Default has occurred and is continuing;


 


7.2.6                No Default under Contracts or Refund Guarantees


 


no Borrower is in default of any of its obligations under the relevant
Contract or the relevant Supervision Agreement or any of its obligations upon
the performance or observance of


 


42





















 


which depends the continued liability of any Refund Guarantor in accordance
with the terms of any Refund Guarantee relating to such Borrower’s Ship;


 


7.2.7                No Encumbrance in respect of pre-delivery
security


 


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


 


7.2.8                The Ships


 


each Ship will, on the Drawdown Date of the Delivery Advance relevant to
such Ship, be:


 


(a)   in the
absolute ownership of the relevant Borrower who will, on and after such
Drawdown Date, be the sole, legal and beneficial owner of such Ship;


 


(b)   registered
through the offices of the relevant Registry as a ship under the laws and flag
of the relevant Flag State;


 


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


 


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


 


7.2.9                Ships’ employment


 


none of the Ships is nor will, on or before the Drawdown Date of the
Delivery Advance relevant to such Ship, be subject to any charter or contract or
to any agreement to enter into any charter or contract which, if entered into
after the date of the relevant Ship Security Documents would have required the
consent of the Agent or, as the context may require, the Security Agent and, on
or before the Drawdown Date of the Delivery Advance relevant to such Ship,
there will not be any agreement or arrangement whereby the Earnings of such
Ship may be shared with any other person;


 


7.2.10              Freedom from Encumbrances


 


no Ship, nor its Earnings, Insurances or Requisition Compensation nor
the Accounts nor any other properties or rights which are, or are to be, the
subject of any of the Security Documents nor any part thereof will be, on the
Drawdown Date of the Delivery Advance relevant to such Ship, subject to any
Encumbrance (other than any Permitted Encumbrances);


 


7.2.11              Compliance with Environmental Laws and
Approvals


 


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


 


(a)   the Borrowers
and the other Relevant Parties and, to the best of the Borrowers’ knowledge and
belief (having made due enquiry), their respective Environmental Affiliates
have complied with the provisions of all Environmental Laws;


 


(b)   the Borrowers
and the other Relevant Parties and, to the best of the Borrowers’ knowledge and
belief (having made due enquiry), their respective Environmental Affiliates
have obtained all Environmental Approvals and are in compliance with all such
Environmental Approvals; and


 


(c)   neither the
Borrowers nor any other Relevant Party nor, to the best of the Borrowers’
knowledge and belief (having made due enquiry), any of their respective
Environmental


 


43





















 


Affiliates has received notice of any Environmental Claim that the
Borrowers or any other Relevant Party or any such Environmental Affiliate is
not in compliance with any Environmental Law or any Environmental Approval;


 


7.2.12              No Environmental Claims


 


except as may already have been disclosed by the Borrowers in writing
to, and acknowledged in writing by, the Agent, there is no Environmental Claim
pending or, to the best of the Borrowers’ knowledge and belief, threatened
against any of the Borrowers or any of the Ships or any other Relevant Party or
any other Relevant Ship or to the best of the Borrowers’ knowledge and belief
(having made due enquiry) any of their respective Environmental Affiliates;


 


7.2.13              No potential Environmental Claims


 


except as may already have been disclosed by the Borrowers in writing
to, and acknowledged in writing by, the Agent, there has been no emission,
spill, release or discharge of a Pollutant from any of the Ships or any other
Relevant Ship owned by, managed or crewed by or chartered to the Borrowers nor,
to the best of the Borrowers’ knowledge and belief (having made due enquiry),
from any Relevant Ship owned by, managed or crewed by or chartered to any other
Relevant Party which could give rise to an Environmental Claim;


 


7.2.14              No material adverse change


 


there has been no material adverse change in the financial position of
any Security Party or Aegean Marine, from that described by or on behalf of the
Borrowers to the Creditors or any of them in the negotiation of this Agreement;


 


7.2.15              Copies true and complete


 


the copies or originals of the Underlying Documents delivered or to be
delivered to the Agent 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;


 


7.2.16              ISPS Code


 


on the Drawdown Date of the Delivery Advance for a Ship, the relevant
Borrower shall have a valid and current ISSC in respect of that Ship and such
Ship shall be in compliance with the ISPS Code; and


 


7.2.17              Borrowers’ own account


 


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


 


7.3                               Repetition of representations
and warranties


 


On and as of each Drawdown Date and (except in relation to the
representations and warranties in clause 7.2) on each Interest Payment Date,
the Borrowers shall:


 


44





















 


(a)   be deemed to
repeat the representations and warranties in clauses 7.1 and 7.2 as if made
with reference to the facts and circumstances existing on such day; and


 


(b)   be deemed to
further represent and warrant to each of the Creditors that the then latest
audited financial statements delivered to the Agent by the Borrowers (if any)
have been prepared in accordance with generally accepted international
accounting principles and practices which have been consistently applied and
present fairly and accurately the financial position of the Borrowers, the
Manager and Aegean Marine and the combined financial position of the Borrowers,
the Manager and their respective Related Companies, respectively, as at the end
of the financial period to which the same relate and the results of the
operations of the Borrowers, the Manager and Aegean Marine and the combined
results of the operations of the Borrowers, the Manager and their respective
Related Companies, respectively, for the financial period to which the same
relate and, as at the end of such financial period, neither the Borrowers nor
the Manager nor any of their respective Related Companies nor Aegean Marine 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.


 


8                                         Undertakings


 


8.1                               General


 


The Borrowers jointly and severally undertake with each Creditor that, from
the date of this Agreement and so long as any moneys are owing under any of the
Security Documents and while all or any part of the Total Commitment remains
outstanding, each Borrower will:


 


8.1.1                Notice of Default


 


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


 


(b)   promptly
inform the Agent of any occurrence of which it becomes aware which might
adversely affect the ability or rights of any Borrower to make any claims under
the Contract or the Supervision Agreement or any Refund Guarantee relating to
such Borrower’s Ship or which might reduce or release any of the obligations of
the Builders or either of them under such Contract or of Iota under such
Supervision Agreement or of the relevant Refund Guarantor under such Refund Guarantee
(as the case may be);


 


8.1.2                Consents and licences


 


without prejudice to clauses 7.1 and 9, obtain or cause to be obtained,
maintain in full force and effect and comply in all material respects with the
conditions and restrictions (if any) imposed in, or in connection with, every
consent, authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things
which may from time to time be necessary or desirable under applicable law for
the continued due performance of all the obligations of the Security Parties
under each of the Security Documents and the Underlying Documents;


 


8.1.3                Use of proceeds


 


use the Loan or, as the case may be, the Advances exclusively for the
purposes specified in clauses 1.1 and 2.5;


 


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8.1.4                Pari passu


 


ensure that its obligations under this Agreement shall, without
prejudice to the provisions of clause 8.3, at all times rank at least pari
passu with all its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;


 


8.1.5                Financial statements


 


prepare or cause to be prepared:


 


(a)   financial statements
of each of the Borrowers and the Manager and combined financial statements of
the Borrowers, the Manager and their respective Related Companies in accordance
with generally accepted international accounting principles and practices
consistently applied in respect of each financial year (starting with the
financial year ending on 31 December 2005) and cause the same to be
reported on by their auditors; and


 


(b)   financial
statements of Aegean Marine in accordance with generally accepted international
accounting principles and practices consistently applied in respect of each
financial year (starting with the financial year ending 31 December 2004)
and cause the same to be reported on by their auditors,


 


and, in each case, deliver as many copies of the same as the Agent may
reasonably require as soon as practicable but not later than one hundred and
eighty (180) days after the end of the financial year to which they relate;


 


8.1.6                Delivery of reports


 


deliver to the Agent sufficient copies for all the Banks of every
report, circular, notice or like document issued by any Relevant Party to its
shareholders or creditors generally;


 


8.1.7                Provision of further information


 


provide the Agent, and procure that the Corporate Guarantor and the
Manager shall provide the Agent, with such financial or other information
concerning any Borrower, their Related Companies, the other Security Parties
and their respective Related Companies and their respective affairs (including,
without limitation, their activities, financial standing, Indebtedness and
operations and the performance of the Ships) as the Agent, any Bank or the Swap
Providers (each acting through the Agent) may from time to time require;


 


8.1.8                Obligations under Security 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;


 


8.1.9                Compliance with Code


 


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


 


8.1.10              Withdrawal of DOC and SMC


 


and will procure that any Operator will, immediately inform the Agent if
there is any threatened or actual withdrawal of such Operator’s DOC or the SMC
in respect of any of the Ships;


 


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8.1.11              Issuance of DOC and SMC


 


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


 


8.1.12              ISPS Code compliance


 


and will procure that the Manager or any Operator will:


 


(a)   from the
Drawdown Date of the Delivery Advance of a Ship and at all times thereafter,
maintain a valid and current ISSC respect of that Ship;


 


(b)   immediately
notify the Agent in writing of any actual or threatened withdrawal, suspension,
cancellation or modification of the ISSC in respect of a Ship; and


 


(c)   procure that,
from the Drawdown Date of the Delivery Advance of a Ship and at all times
thereafter, that Ship complies with the ISPS Code; and


 


8.1.13              Charters


 


provided it has first obtained the consent of the Security Agent or any
other Creditors in accordance with the relevant Ship Security Documents and/or
clause 8.5, (i) deliver to the Agent, a certified copy of each time
charter or other contract of employment (excluding any time-charters entered
into with any of its Related Companies) of its Ship with a tenor (including any
options to extend) exceeding twelve (12) months, forthwith after its execution,
(ii) forthwith on the Agent’s request execute (1) a specific
assignment of any such time charter or other contract of employment in favour
of the Security Agent in a form acceptable to the Agent in its sole discretion
and (2) any notice of assignment required in connection therewith in a
form acceptable to the Agent in its sole discretion, and promptly procure the
acknowledgement of any such notice of assignment by the relevant charterer in a
form acceptable to the Agent in its sole discretion, and (iii) pay all
legal and other costs incurred by any Creditor in connection with any such
specific assignments, forthwith following the Agent’s demand.


 


8.2                               Security value maintenance


 


8.2.1                Security shortfall


 


If, at any time after the earlier of (i) the Drawdown Date of the
last Delivery Advance to be drawn down and (ii) the last day of the last
Drawdown Period to elapse, the Security Value shall be less than the Security
Requirement, the Agent (acting on the instructions of the Majority Banks) shall
give notice to the Borrowers requiring that such deficiency be remedied and
then the Borrowers shall either:


 


(a)   prepay within
a period of thirty (30) days of the date of receipt by the Borrowers of the
Agent’s said notice such sum in Dollars as will result in the Security
Requirement after such prepayment (taking into account any other repayment of
the Loan made between the date of the notice and the date of such prepayment)
being equal to the Security Value; or


 


(b)   within thirty
(30) days of the date of receipt by the Borrowers of the Agent’s said notice
constitute to the satisfaction of the Agent such further security for the Loan
and any amounts owing under the Master Swap Agreements as shall be acceptable
to the Banks having a value for security purposes (as determined by the Agent
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 Security Requirement as at such date.


 


The provisions of clauses 4.4 and 4.5 shall apply to prepayments under
clause 8.2.1(a).


 


47





















 


8.2.2                Valuation of Mortgaged Ships


 


Each Mortgaged Ship shall, for the purposes of this Agreement, be valued
in Dollars as and when the Agent (acting on the instructions of the Majority
Banks) shall require (and at least once every calendar year) by two (2) Approved
Brokers selected by the Borrowers or, failing such selection by the Borrowers, appointed
by the Agent in its discretion. Each such valuation shall be made without,
unless required by the Agent, physical inspection, and on the basis of a sale
for prompt delivery for cash at arm’s length, on normal commercial terms, as
between a willing buyer and a willing seller, without taking into account the
benefit of any charterparty or other engagement concerning the relevant
Mortgaged Ship. The arithmetic mean of such two (2) valuations shall
constitute the value of such Mortgaged Ship for the purposes of this clause
8.2.


 


The value of each Mortgaged Ship determined in accordance with the
provisions of this clause 8.2.2 shall be binding upon the parties hereto until
such time as any further such valuation shall be obtained.


 


8.2.3                Information


 


The Borrowers jointly and severally undertake with the Creditors to
supply to the Agent and to any such shipbrokers such information concerning the
relevant Mortgaged Ship and its condition as such shipbroker may require for
the purpose of making any such valuation.


 


8.2.4                Costs


 


All costs in connection with the Agent obtaining any valuation of each
of the Mortgaged Ships referred to in clause 8.2.2, any valuation referred to
in schedule 3, Part 6, paragraph 3 and any valuation either of any
additional security for the purposes of ascertaining the Security Value at any
time or necessitated by the Borrowers electing to constitute additional
security pursuant to clause 8.2.1(b), shall be borne by the Borrowers.


 


8.2.5                Valuation of additional security


 


For the purposes of this clause 8.2, the market value of any additional
security provided or to be provided to the Creditors or any of them shall be
determined by the Agent in its absolute discretion without any necessity for
the Agent assigning any reason therefor.


 


8.2.6                Documents and evidence


 


In connection with any additional security provided in accordance with
this clause 8.2, the Agent shall be entitled to receive such evidence and
documents of the kind referred to in schedule 3 as may in the Agent’s
opinion be appropriate and such favourable legal opinions as the Agent shall in
its absolute discretion require.


 


8.3                               Negative undertakings


 


The Borrowers jointly and severally undertake with each Creditor that,
from the date of this Agreement and so long as any moneys are owing under the
Security Documents and while all or any part of the Total Commitment remains
outstanding, they will not, without the prior written consent of the Agent
(acting on the instructions of the Majority Banks):


 


8.3.1                Negative pledge


 


permit any Encumbrance (other than a Permitted Encumbrance) to subsist,
arise or be created or extended over all or any part of their respective
present or future undertakings, assets, rights or revenues to secure or prefer
any present or future Indebtedness or other liability or obligation of any
Relevant Party or any other person;


 


48





















 


8.3.2                No merger


 


merge or consolidate with any other person;


 


8.3.3                Disposals


 


sell, transfer, abandon, lend or otherwise dispose of or cease to
exercise direct control over any part of their 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;


 


8.3.4                Other business


 


undertake any business other than the ownership and operation of the
Ships and will procure that the Corporate Guarantor will not, without the prior
written consent of the Agent (acting on the instructions of the Majority
Banks), undertake any business other than that conducted by the Corporate
Guarantor at the date of this Agreement;


 


8.3.5                Acquisitions


 


acquire any further assets other than the Ships and rights arising under
contracts entered into by or on behalf of the Borrowers in the ordinary course
of their businesses of owning, operating and chartering the Ships;


 


8.3.6                Other obligations


 


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


 


8.3.7                No borrowing


 


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


 


8.3.8                Repayment of borrowings


 


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


 


8.3.9                Guarantees


 


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


 


8.3.10              Loans


 


make any loans or grant any credit (save for normal trade credit in the
ordinary course of business) to any person or agree to do so;


 


8.3.11              Sureties


 


permit any Indebtedness of any Borrower to any person (other than the
Creditors pursuant to the Security Documents) to be guaranteed by any person
(save for guarantees or indemnities from time to time required in the ordinary
course by any protection and indemnity or war risks association with which a
Ship is entered, guarantees required to procure the release of such


 


49





















 


Ship from any arrest, detention, attachment or levy or guarantees or
undertakings required for the salvage of such Ship);


 


8.3.12              Share capital and distribution


 


and will procure that the Corporate Guarantor will not, without the
prior written consent of the Agent (acting on the instructions of the Majority
Banks), purchase or otherwise acquire for value any shares of their capital or
declare or pay any dividends or distribute any of their present or future assets,
undertakings, rights or revenues to any of their shareholders;


 


8.3.13              Subsidiaries


 


form or acquire any Subsidiaries;


 


8.3.14              Shareholdings


 


permit any change in the legal and/or ultimate beneficial ownership of
any of the Borrowers, the Corporate Guarantor or the Manager from that
specified in clause 7.1.11; or


 


8.3.15              Hedging arrangements


 


enter into any interest rate, currency or other swaps, forward exchange
contracts, futures or other derivative transactions with any person other than
with the Swap Providers pursuant to the Master Swap Agreements and other than
on terms and conditions agreed between the relevant Swap Provider and the
Borrowers.


 


8.4                               Pre-delivery positive
undertakings


 


The Borrowers hereby jointly and severally undertake and agree with each
Creditor that they will:


 


8.4.1                Conveyance on default


 


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


 


8.4.2                Flag State


 


not later than thirty (30) days prior to the Delivery Date of a Ship,
obtain the Agent’s written approval of the Flag State for such Ship; and


 


8.4.3                Mortgage


 


immediately upon Delivery of a Ship, procure that the relevant Borrower
shall execute, and procure the registration of, the Mortgage for such Ship
under the laws and flag of the relevant Flag State.


 


8.5                               Pre-delivery negative
undertaking


 


The Borrowers hereby jointly and severally further undertake and agree
with each Creditor that they will not, without the prior written consent of the
Agent acting on the instructions of the Majority Banks (which consent the Agent
and the Banks shall have full liberty to withhold) and then, if such consent is
given, only subject to such conditions as the Agent (acting on the instructions
of the Majority Banks) may impose, let or agree to let any Ship:


 


8.5.1                on demise charter for any period; or


 


8.5.2                by any time or consecutive voyage charter for a
term which exceeds or which by virtue of any optional extensions therein
contained may exceed twelve (12) months’ duration; or


 


50





















 


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


 


8.5.4                below the market rate prevailing at the time
when the relevant Ship is fixed.


 


9                                         Conditions


 


9.1                               Documents and evidence


 


9.1.1                Commitments


 


The obligation of each Bank to make its Commitment available shall be
subject to the condition that the Agent or its duly authorised representative
shall have received, not later than two (2) Banking Days before the date
of this Agreement, the documents and evidence specified in Part 1 of schedule 3,
in form and substance satisfactory to the Agent.


 


9.1.2                First Contract Instalment Advances


 


The obligation of the Banks to make available the first Contract
Instalment Advance in respect of any Ship shall be subject to the condition
that the Agent or its duly authorised representative shall have received, on or
prior to the drawdown of the first Contract Instalment Advance for such Ship,
the documents and evidence specified in Part 2 of schedule 3 in respect
of such Ship, in form and substance satisfactory to the Agent.


 


9.1.3                Second, third and fourth Contract Instalment
Advances


 


The obligation of the Banks to make available any of the second, the
third or the fourth Contract Instalment Advance in respect of any Ship shall be
subject to the condition that the Agent or its duly authorised representative
shall have received, on or prior to the drawdown of the relevant Contract
Instalment Advance for such Ship, the documents and evidence specified in Part 3
of schedule 3 in respect of such Ship and such Advance, in form and
substance satisfactory to the Agent.


 


9.1.4                Delivery Advances


 


The obligation of the Banks to make available the Delivery Advance in
respect of any Ship shall be subject to the condition that the Agent or its
duly authorised representative shall have received, on or prior to the drawdown
of the Delivery Advance for such Ship, the documents and evidence specified in Part 4
of schedule 3 in respect of such Ship, in form and substance satisfactory
to the Agent.


 


9.1.5                Additional Cost Advances


 


The obligation of the Banks to make available the Additional Cost
Advance in respect of any Ship shall be subject to the condition that the Agent
or its duly authorised representative shall have received, on or prior to the
drawdown of the Additional Cost Advance for such Ship, the documents and
evidence specified in Part 5 of schedule 3 in respect of such Ship,
in form and substance satisfactory to the Agent.


 


9.1.6                Top-up Advances


 


The obligation of the Banks to make available the Top-up Advance in
respect of any Ship shall be subject to the condition that the Agent or its
duly authorised representative shall have received, on or prior to the drawdown
of the Top-up Advance for such Ship, the documents and evidence specified in Part 6
of schedule 3 in respect of such Ship, in form and substance satisfactory
to the Agent.


 


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9.2                               General
conditions precedent


 


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


 


9.2.1                the representations and warranties contained in
(a) clauses 7.1, 7.2 and 7.3(b) of this Agreement, (b) clause 4
of the Corporate Guarantee and (c) clause 3.1 of, and the schedule to,
the Personal Guarantee, are true and correct on and as of each such time as if
each was made with respect to the facts and circumstances existing at such
time; and


 


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


 


9.3                               Waiver
of conditions precedent


 


The conditions specified in this clause 9 are inserted solely for the
benefit of the Banks and may be waived by the Agent (acting on the instructions
of the Majority Banks) in whole or in part and with or without conditions.


 


9.4                               Further
conditions precedent


 


Not later than five (5) Banking Days prior to each Drawdown Date
and not later than five (5) Banking Days prior to each Interest Payment
Date, the Agent (acting on the instructions of the Majority Banks) may request
and the Borrowers shall, not later than two (2) Banking Days prior to such
date, deliver to the Agent on such request further relevant certificates and/or
favourable 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


 


There shall be an Event of Default if:


 


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


 


10.1.2              Master Swap Agreements: (a) an Event of Default or Potential Event
of Default (in each case as defined in the relevant Master Swap Agreement) has
occurred and is continuing with a Borrower as the Defaulting Party (as defined
in the relevant Master Swap Agreement) under either Master Swap Agreement or (b) an
Early Termination Date has occurred or has been or become capable of being
effectively designated under either Master Swap Agreement by the relevant Swap
Provider or (c) either Master Swap Agreement is terminated, cancelled,
suspended, rescinded or revoked or otherwise ceases to remain in full force and
effect for any reason; or


 


10.1.3              Breach of Insurance and certain
other obligations: any of the
Borrowers or, as the context may require, the Manager or any other person fails
to obtain and/or maintain the Insurances for any of the Mortgaged Ships 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 any of the
Borrowers or any other person or any of the Borrowers commits any breach of or
omits to observe any of the obligations or undertakings expressed to be assumed
by them under clauses 8.2 or 8.3 or 8.4 or 8.5 or the Corporate Guarantor
commits any breach of or omits to observe any of the obligations or
undertakings expressed to be assumed by it under clause 5.2 of the Corporate
Guarantee; or


 


52





















 


10.1.4              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, 10.1.2 and 10.1.3 above) and, in respect of any such breach or
omission which in the opinion of the Agent (following consultation with the
Banks) is capable of remedy, such action as the Agent (acting on the
instructions of the Majority Banks) may require shall not have been taken
within fourteen (14) days of the Agent notifying the relevant Security Party of
such default and of such required action; or


 


10.1.5              Misrepresentation: any representation or warranty made or deemed
to be made or repeated by or in respect of any Security Party in or pursuant to
any of the Security Documents 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


 


10.1.6              Cross-default: any Indebtedness of any Security Party or any
other Restricted Company is not paid when due or any Indebtedness of any
Security Party or any other Restricted Company 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 any other Restricted Company of a voluntary right of
prepayment), or any creditor of any Security Party or any other Restricted
Company becomes entitled to declare any such Indebtedness due and payable or any
facility or commitment available to any Security Party or any other Restricted
Company relating to Indebtedness is withdrawn, suspended or cancelled by reason
of any default (however described) of the person concerned unless the relevant
Security Party or other Restricted Company shall have satisfied the Agent that
such withdrawal, suspension or cancellation will not affect or prejudice in any
way the relevant Security Party’s or other Restricted Company’s ability to pay
its debts as they fall due and fund its commitments, or any guarantee given by
any Security Party or other Restricted Company in respect of Indebtedness is
not honoured when due and called upon; or


 


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


 


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


 


10.1.9              Reduction or loss of capital: a meeting is convened by any Security Party
(other than the Personal Guarantor) or other Restricted Company for the purpose
of passing any resolution to purchase, reduce or redeem any of its share
capital; or


 


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


 


10.1.11            Administration: any petition is presented, notice given or
other step is taken for the purpose of the appointment of an administrator of
any Security Party (other than the Personal Guarantor) or other Restricted
Company or the Agent believes that any such petition or other step is imminent
or an administration order is made in relation to any Security Party (other
than the Personal Guarantor) or other Restricted Company; or


 


10.1.12            Appointment of receivers and
managers: any administrative
or other receiver is appointed of any Security Party or other Restricted
Company or any part of its assets and/or


 


53





















 


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 Restricted
Company; or


 


10.1.13            Compositions: any corporate action, legal proceedings or
other procedures or steps are taken, or negotiations commenced, by any Security
Party or other Restricted Company 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


 


10.1.14            Analogous proceedings: there occurs, in relation to any Security Party
or other Restricted Company, 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 Agent,
appears in that country or territory to correspond with, or have an effect
equivalent or similar to, any of those mentioned in clauses 10.1.7 to 10.1.13
(inclusive) or any Security Party or other Restricted Company otherwise becomes
subject, in any such country or territory, to the operation of any law relating
to insolvency, bankruptcy or liquidation; or


 


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


 


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


 


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


 


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


 


10.1.19            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


 


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


 


10.1.21            Material adverse change: there occurs, in the opinion of the Agent
(following consultation with the Banks), a material adverse change in the
financial condition of any Security Party or Aegean Marine by reference to the
financial position of such Security Party as described by or on behalf of any
Borrower or any other Security Party to the Creditors or any of them in the
negotiation of this Agreement; or


 


10.1.22            Arrest: any Ship is arrested, confiscated, seized,
taken in execution, impounded, forfeited, detained in exercise or purported
exercise of any possessory lien or other claim or otherwise taken from the
possession of the relevant Borrower and the relevant Borrower shall fail to
procure the release of such Ship within a period of seven (7) days
thereafter; or


 


10.1.23            Registration: the registration of any Ship under the laws and
flag of the relevant Flag State is cancelled or terminated without the prior
written consent of the Majority Banks or the


 


54





















 


registration of such Ship is not renewed at least forty-five (45) days
prior to the expiry of such registration; or


 


10.1.24            Unrest: the Flag State
of any Ship becomes involved in hostilities or civil war or there is a seizure
of power in the Flag State of any Ship by unconstitutional means; or


 


10.1.25            Environment: any Borrower and/or any other Relevant Party
and/or any of their respective Environmental Affiliates fails to comply with
any Environmental Law or any Environmental Approval or any of the Ships or any
other Relevant Ship is involved in any incident which gives rise or may give
rise to an Environmental Claim; or


 


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


 


10.1.27            Personal Guarantor: the Personal Guarantor passes away or is found
to be of unsound mind by a court of a Relevant Jurisdiction, unless there shall
have been delivered to the Agent a substitute guarantee or other security
acceptable to the Banks within seven (7) days of either of such events
occurring; or


 


10.1.28            Shareholdings: there is any change in the legal and/or
ultimate beneficial ownership of any of the shares of any of the Borrowers, the
Corporate Guarantor or the Manager from that existing on the date of this
Agreement as specified in clause 7.1.11; or


 


10.1.29                                    Termination or variation of,
or dispute under, Contracts or Supervision Agreements: any Contract or Supervision Agreement is
terminated or rescinded for any reason whatsoever; or any Contract or
Supervision Agreement is frustrated; or any Contract or Supervision Agreement
is varied in any manner not permitted by or pursuant to the relevant
Pre-delivery Security Assignment or this Agreement; or there is any material
dispute or litigation or any other material proceedings between the relevant
parties under or in respect of any Contract or Supervision Agreement; or


 


10.1.30            Termination of Refund
Guarantees: any Refund
Guarantee is repudiated, cancelled, rescinded or otherwise terminated or
expires (other than by the return of such Refund Guarantee by the relevant
Borrower to the Builders or either of them and/or any Refund Guarantor
following the Delivery of the relevant Ship); or


 


10.1.31            Non-Delivery of Ship or
non-drawing of Delivery Advance: any Ship is not delivered to, and accepted by, the relevant Borrower
under the relevant Contract or the Delivery Advance for such Ship is not drawn
down, in either case, on or before the end of the Drawdown Period for the
Delivery Advance relevant to such Ship; or


 


10.1.32            Payments under Refund
Guarantees: any claim made
under any Refund Guarantee is not paid within twenty (20) Banking Days of it
being made and whether or not such claim has been referred to arbitration
pursuant to the relevant Refund Guarantee Provided however that, if there is a
related claim made under the relevant Contract which has been referred to
arbitration thereunder, it shall not be an Event of Default unless the relevant
claim under the relevant Refund Guarantee has not been paid within one hundred
and eighty (180) days of it being made; or


 


10.1.33            Accounts: moneys are withdrawn from any of the Accounts
other than in accordance with clause 14; or


 


10.1.34            Licenses, etc: any license, authorisation, consent or approval
at any time necessary to enable any Security Party to comply with its
obligations under the Security Documents or the Underlying Documents 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


 


55





















 


exist which would make any transaction under the Security Documents or
the Underlying Documents or the continuation thereof, unlawful or would prevent
the performance by any Security Party of any term of any of the Security
Documents or the Underlying Documents; or


 


10.1.35            Material events: any other event occurs or circumstance arises
which, in the reasonable opinion of the Agent (following consultation with the
Banks), is likely materially and adversely to affect either (i) the
ability of any Security Party to perform all or any of its obligations under or
otherwise to comply with the terms of any of the Security Documents or any of
the Underlying Documents or (ii) the security created by any of the
Security Documents.


 


10.2                        Acceleration


 


The Agent may, and if so requested by the Majority Banks shall, without
prejudice to any other rights of the Banks, at any time after the occurrence of
an Event of Default by notice to the Borrowers declare that:


 


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


 


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


 


10.3                        Demand basis


 


If, pursuant to clause 10.2.2, the Agent declares the Loan to be due and
payable on demand, the Agent may (and if so instructed by the Majority Banks
shall) by written notice to the Borrowers (a) call for repayment of the
Loan on such date as may be specified whereupon the Loan shall become due and
payable on the date so specified together with all interest accrued and all
other sums payable under this Agreement or (b) withdraw such declaration
with effect from the date specified in such notice.


 


10.4                        Position of Swap Providers


 


Neither the Agent nor the Security Agent shall be obliged, in connection
with any action taken or proposed to be taken under or pursuant to the
foregoing provisions of this clause 10, to have any regard to the requirements
of the Swap Providers except to the extent that either such Swap Provider is
also a Bank.


 


11                                  Indemnities


 


11.1                        Miscellaneous indemnities


 


The Borrowers shall on demand indemnify each Creditor, without prejudice
to any of such Creditor’s other rights under any of the Security Documents,
against any loss (including loss of Margin) or expense which such Creditor
shall certify as sustained or incurred by it as a consequence of:


 


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


 


11.1.2              the occurrence of any other Event of Default;


 


11.1.3              any prepayment or reduction of a Tranche or
part thereof being made under clauses 4.3, 8.2.1(a) or 12.1 or any other
repayment or prepayment of a Tranche or part thereof being made otherwise than
on an Interest Payment Date relating to the part of the Tranche prepaid or
repaid; or


 


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


 


56





















 


including, in any such case, but not limited to, any loss or expense
sustained or incurred by the relevant Creditor in maintaining or funding its
Contribution or, as the case may be, its Commitment (or any part thereof) or in
liquidating or re-employing deposits from third parties acquired to effect or
maintain its Contribution or, as the case may be, its Commitment (or any part
thereof) or any other amount owing to such Creditor.


 


11.2                        Currency indemnity


 


If any sum due from any of the Borrowers under any of the Security
Documents or any order or judgment given or made in relation thereto has to be
converted from the currency (the “first
currency”) in which
the same is payable under the relevant Security Document or under such order or
judgment into another currency (the “second currency”) for the purpose of (a) making
or filing a claim or proof against the Borrowers or any of them, (b) obtaining
an order or judgment in any court or other tribunal or (c) enforcing any
order or judgment given or made in relation to any of the Security Documents,
the Borrowers shall indemnify and hold harmless each Creditor from and against
any loss suffered as a result of any difference between (i) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (ii) the rate or rates of exchange
at which the relevant Creditor 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 Borrowers under this clause 11.2 shall be due as a
separate debt and shall not be affected by judgment being obtained for any
other sums due under or in respect of any of the Security Documents and the
term “rate of exchange” includes
any premium and costs of exchange payable in connection with the purchase of
the first currency with the second currency.


 


11.3                        Environmental indemnity


 


The Borrowers shall indemnify each Creditor on demand and hold it
harmless from and against all costs, expenses, payments, charges, losses,
demands, liabilities, actions, proceedings (whether civil or criminal),
penalties, fines, damages, judgements, orders, sanctions or other outgoings of
whatever nature which may be suffered, incurred or paid by, or made or asserted
against such Creditor at any time, whether before or after the repayment in
full of principal and interest under this Agreement, relating to, or arising
directly or indirectly in any manner or for any cause or reason whatsoever out
of an Environmental Claim made or asserted against such Creditor if such
Environmental Claim would not have been, or been capable of being, made or
asserted against such Creditor if it had not entered into any of the Security
Documents and/or exercised any of its rights, powers and discretions thereby
conferred and/or performed any of its obligations thereunder and/or been
involved in any of the transactions contemplated by the Security Documents.


 


11.4                        Central Bank or European
Central Bank reserve requirements indemnity


 


The Borrowers shall on demand promptly indemnify each Bank against any
cost incurred or loss suffered by such Bank as a result of its complying with the minimum reserve
requirements of the European Central Bank and/or with respect to maintaining
required reserves with the relevant national Central Bank to the extent that
such compliance relates to such Bank’s Commitment and/or Contribution or
deposits obtained by it to fund the whole or part of its Contribution and to
the extent such cost or loss is not recoverable by such Bank under clause 12.2.


 


12                              Unlawfulness
and increased costs


 


12.1                     Unlawfulness


 


If it is or becomes contrary to any law or regulation for any Bank to
contribute to an Advance or to maintain its Commitment or fund the Loan, such
Bank shall promptly, through the Agent, give notice to the Borrowers whereupon (a) such
Bank’s Commitment shall be reduced to zero and (b) the Borrowers shall be
obliged to prepay such Bank’s Commitment either (i) forthwith or (ii) on
a future specified date not being earlier than the latest date permitted by the
relevant law or


 


57





















 


regulation together with interest accrued to the date of prepayment and
all other sums payable by the Borrowers under this Agreement and/or the Master
Swap Agreements or any of them.


 


12.2                        Increased costs


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)   the Borrowers
shall on demand made at any time whether or not such Bank’s Contribution has
been repaid, pay to the Agent for the account of such Bank the amount which such
Bank specifies (in a certificate setting forth the basis of the computation of
such amount but not including any matters which such Bank or its holding
company regards as confidential) is required to compensate such Bank 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 a Bank is included.


 


12.3                        Exception


 


Nothing in clause 12.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, foregone return or loss to the extent that
the same is the subject of an additional payment under clause 6.6.


 


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13                                  Security,
set-off and pro-rata payments


 


13.1                           Application of moneys


 


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


 


13.1.1              first, in or towards payment of all unpaid
costs and expenses which may be owing to the Agent and/or the Security Agent or
either of them under any of the Security Documents;


 


13.1.2              secondly, in or towards payment of any unpaid
fees and commitment commission payable to the Creditors or any of them;


 


13.1.3              thirdly, in or towards payment of any arrears
of interest owing in respect of the Loan or any part thereof;


 


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


 


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


 


13.1.6              sixthly, in or towards payment to a Swap
Provider of any sums owing to it under the relevant Master Swap Agreement (and
if any sums are owing under both Master Swap Agreements, proportionately as
between such Swap Providers);


 


13.1.7              seventhly, in or towards payment to any
Creditor of any other sums owing to it under any of the Security Documents; and


 


13.1.8              eighthly, the surplus (if any) shall be paid to
the Borrowers or to whomsoever else may be entitled to receive such surplus.


 


13.2                        Set-off


 


13.2.1              The Borrowers authorise each Creditor (without
prejudice to any of such Creditor’s rights at law, in equity or otherwise), at any
time and without notice to the Borrowers, to apply any credit balance to which
the Borrowers or any of them is then entitled standing upon any account of the
Borrowers or any of them with any branch of such Creditor in or towards
satisfaction of any sum due and payable from the Borrowers or any of them to
such Creditor under any of the Security Documents. For this purpose, each
Creditor 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              No Creditor shall be obliged to exercise any
right given to it by this clause 13.2. Each Creditor shall notify the Borrowers
through the Agent forthwith upon the exercise or purported exercise of any
right of set-off giving full details in relation thereto and the Agent shall
inform the other Creditors.


 


13.2.3              Nothing in this clause 13.2 shall be effective
to create a charge or other security interest.


 


13.3                        Pro rata payments


 


13.3.1              If at any time any Bank (the “Recovering Bank”) receives or recovers any
amount owing to it by the Borrowers under this Agreement by direct payment,
set-off or in any manner other than by payment through the Agent pursuant to
clauses 6.1 or 6.9 (not being a payment received from a Transferee Bank or a
sub-participant in such Bank’s Contribution or any other payment of an amount
due to the Recovering Bank for its sole account pursuant to clauses 3.6, 5,
6.6, 11.1, 11.2, 12.1, or 12.2), the Recovering Bank shall, within two (2) Banking
Days of such receipt or recovery (a “Relevant
Receipt”) notify the
Agent of the


 


59





















 


amount of the Relevant Receipt. If the Relevant Receipt exceeds the
amount which the Recovering Bank would have received if the Relevant Receipt
had been received by the Agent and distributed pursuant to clause 6.1 or 6.9
(as the case may be) then:


 


(a)   within two (2) Banking
Days of demand by the Agent, the Recovering Bank shall pay to the Agent an
amount equal (or equivalent) to the excess;


 


(b)   the Agent
shall treat the excess amount so paid by the Recovering Bank as if it were a
payment made by the Borrowers and shall distribute the same to the Banks (other
than the Recovering Bank) in accordance with clause 6.9; and


 


(c)   as between the
Borrowers and the Recovering Bank the excess amount so re-distributed shall be
treated as not having been paid but the obligations of the Borrowers to the
other Banks shall, to the extent of the amount so re-distributed to them, be
treated as discharged.


 


13.3.2              If any part of the Relevant Receipt
subsequently has to be wholly or partly refunded by the Recovering Bank
(whether to a liquidator or otherwise) each Bank to which any part of such
Relevant Receipt was so re-distributed shall on request from the Recovering
Bank repay to the Recovering Bank such Bank’s pro-rata share of the amount
which has to be refunded by the Recovering Bank.


 


13.3.3              Each Bank shall on request supply to the Agent
such information as the Agent may from time to time request for the purposes of
this clause 13.3.


 


13.3.4              Notwithstanding the foregoing provisions of
this clause 13.3, no Recovering Bank shall be obliged to share any Relevant
Receipt which it receives or recovers pursuant to legal proceedings taken by it
to recover any sums owing to it under this Agreement with any other party which
has a legal right to, but does not, either join in such proceedings or commence
and diligently pursue separate proceedings to enforce its rights in the same or
another court (unless the proceedings instituted by the Recovering Bank are
instituted by it without prior notice having been given to such party through
the Agent).


 


13.4                        No release


 


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


 


13.5                        No charge


 


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


 


13.6                        Further assurance


 


The Borrowers jointly and severally undertake with each Creditor that
the Security Documents shall both at the date of execution and delivery thereof
and so long as any moneys are owing under any of the Security Documents be
valid and binding obligations of the respective parties thereto and rights of
each Bank enforceable in accordance with their respective terms and that they
will, at their 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 Majority Banks may be necessary or desirable for
perfecting the security contemplated or constituted by the Security Documents.


 


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13.7        Conflicts


 


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


 


14                                  Accounts


 


14.1                        General


 


The Borrowers jointly and severally undertake with each Creditor that
they will:


 


14.1.1              on or before the Drawdown Date of the first
Advance to be drawn down, open each of the Accounts; and


 


14.1.2              procure that all moneys payable to each
Borrower in respect of the Earnings of such Borrower’s Ship shall, unless and
until the Agent (acting on the instructions of the Majority Banks) directs to
the contrary pursuant to the provisions of the relevant Deed of Covenant, be
paid to the such Borrower’s Operating Account, Provided however that if any of
the moneys paid to any of the Operating Accounts are payable in a currency
other than Dollars, the Account Bank shall (and each Borrower in respect of its
own Operating Account hereby irrevocably instructs the Account Bank to) convert
such moneys into Dollars at the Account Bank’s spot rate of exchange at the
relevant time for the purchase of Dollars with such currency and the term “spot rate of exchange” shall include any
premium and costs of exchange payable in connection with the purchase of
Dollars with such currency.


 


14.2                        Operating Accounts:
withdrawals


 


Unless the Agent (acting on the instructions of the Majority Banks)
otherwise agrees in writing, no Borrower shall be entitled to withdraw any
moneys from its Operating Account at any time from the date of this Agreement
and so long as any moneys are owing under the Security Documents save that,
unless and until a Default shall occur and the Agent (acting on the
instructions of the Majority Banks) shall direct to the contrary, each Borrower
may withdraw moneys from its Operating Account for the following purposes:


 


14.2.1              to transfer to the Retention Account on each
Retention Date all or part of the Retention Amount for such Retention Date;


 


14.2.2              to pay any amount to the Agent in or towards
payments of any instalments of interest or principal or any other amounts then
payable pursuant to the Security Documents;


 


14.2.3              to pay the proper and reasonable expenses of
its Ship; and


 


14.2.4              to pay the proper and reasonable expenses of
administering its affairs.


 


14.3                        Retention Account: credits and
withdrawals


 


14.3.1              The Borrowers hereby jointly and severally
undertake with each Creditor that they will, from the date of this Agreement
and so long as any moneys are owing under the Security Documents, on each
Retention Date pay to the Account Bank for credit to the Retention Account, the
Retention Amount for such Retention Date provided however that, to the extent
that there are moneys standing to the credit of the Operating Accounts (or any
of them) as at any Retention Date, such moneys shall, up to an amount equal to
the Retention Amount for such Retention Date, be transferred to the Retention
Account on that Retention Date (and the Borrowers hereby irrevocably authorise
the Account Bank to effect each such transfer) and to that extent the Borrowers’
obligations to make the payments referred to in this clause 14.3.1 shall have
been fulfilled upon such transfer being effected.


 


14.3.2              Unless and until there shall occur an Event of
Default (whereupon the provisions of clause 14.4 shall apply), each Retention
Amount in respect of a Tranche credited to the Retention Account together with
interest from time to time accruing or at any time accrued


 


61





















 


thereon shall be applied by the Account Bank (and the Borrowers hereby
irrevocably authorise the Account Bank so to apply the same) upon each
Repayment Date for the relevant Tranche and/or on each day that interest is
payable pursuant to clause 3.1 on such Tranche, in or towards payment to the
Agent of the relevant instalment then falling due for repayment or, as the case
may be, the relevant amount of interest then due. Each such application by the
Account Bank shall constitute a payment in or towards satisfaction of the
Borrowers’ corresponding payment obligations under this Agreement but shall be
strictly without prejudice to the obligations of each of the Borrowers to make
any such payment to the extent that the aforesaid application by the Account
Bank is insufficient to meet the same.


 


14.3.3              Unless the Agent (acting on the instructions of
the Majority Banks) otherwise agrees in writing and subject to clause 14.3.2,
none of the Borrowers shall be entitled to withdraw any moneys from the
Retention Account at any time from the date of this Agreement and so long as
any moneys are owing under the Security Documents.


 


14.4                        Application of Accounts


 


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


 


14.5                        Charging of Accounts


 


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


 


15                                  Assignment,
transfer and lending office


 


15.1                        Benefit and burden


 


This Agreement shall be binding upon, and enure for the benefit of, the
Creditors and the Borrowers and their respective successors in title.


 


15.2                        No assignment by Borrowers


 


No Borrower may assign or transfer any of its rights or obligations
under this Agreement.


 


15.3                        Transfers by Banks


 


Any Bank (the “Transferor Bank”) may
at any time cause all or any part of its rights, benefits and/or obligations
under this Agreement and the Security Documents to be transferred to any other
bank or financial institution (a “Transferee
Bank”) by delivering to the Agent a Transfer Certificate duly
completed and duly executed by the Transferor Bank and the Transferee Bank. No
such transfer is binding on, or effective in relation to, the Borrowers or the
Agent unless (i) it is effected or evidenced by a Transfer Certificate
which complies with the provisions of this clause 15.3 and is signed by or on
behalf of the Transferor Bank, the Transferee Bank and the Agent (on behalf of
itself, the Borrowers and the other Creditors) and (ii) such transfer of
rights under the other Security Documents has been effected and registered.
Upon signature of any such Transfer Certificate by the Agent, which signature
shall be effected as promptly as is practicable after such Transfer Certificate
has been delivered to the Agent, and subject to the terms of such Transfer
Certificate, such Transfer Certificate shall have effect as set out below.


 


The following further provisions shall have effect in relation to any
Transfer Certificate:


 


15.3.1              a Transfer Certificate may be in respect of a
Bank’s rights in respect of all, or part of, its Commitment and shall be in
respect of the same proportion of its Contribution;


 


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15.3.2              a Transfer Certificate shall only be in respect
of rights and obligations of the Transferor Bank in its capacity as a Bank and
shall not transfer its rights and obligations as the Agent, or in any other
capacity, as the case may be and such other rights and obligations may only be
transferred in accordance with any applicable provisions of this Agreement;


 


15.3.3              a Transfer Certificate shall take effect in
accordance with English law as follows:


 


(a)   to the extent
specified in the Transfer Certificate, the Transferor Bank’s payment rights and
all its other rights (other than those referred to in clause 15.3.2 above)
under this Agreement are assigned to the Transferee Bank absolutely, free of
any defects in the Transferor Bank’s title and of any rights or equities which
the Borrowers had against the Transferor Bank;


 


(b)   the Transferor
Bank’s Commitment is discharged to the extent specified in the Transfer
Certificate;


 


(c)   the Transferee
Bank becomes a Bank with a Contribution and/or a Commitment of the amounts
specified in the Transfer Certificate;


 


(d)   the Transferee
Bank becomes bound by all the provisions of this Agreement and the Security
Documents which are applicable to the Banks generally, including those about
pro-rata sharing and the exclusion of liability on the part of, and the
indemnification of, the Arranger, the Agent and the Security Agent and to the
extent that the Transferee Bank becomes bound by those provisions, the
Transferor Bank ceases to be bound by them;


 


(e)   an Advance or
part of an Advance which the Transferee Bank makes after the Transfer
Certificate comes into effect ranks in point of priority and security in the
same way as it would have ranked had it been made by the Transferor Bank,
assuming that any defects in the Transferor Bank’s title and any rights or
equities of any Security Party against the Transferor Bank had not existed; and


 


(f)    the
Transferee Bank becomes entitled to all the rights under this Agreement which
are applicable to the Banks generally, including but not limited to those
relating to the Majority Banks and those under clauses 3.6, 5 and 12 and to the
extent that the Transferee Bank becomes entitled to such rights, the Transferor
Bank ceases to be entitled to them;


 


15.3.4              the rights and equities of the Borrowers or of
any other Security Party referred to above include, but are not limited to, any
right of set-off and any other kind of cross-claim; and


 


15.3.5              the Borrowers, the Account Bank, the Security
Agent, the Arranger, the Swap Providers and the Banks hereby irrevocably
authorise and instruct the Agent to sign any such Transfer Certificate on their
behalf and undertake not to withdraw, revoke or qualify such authority or
instruction at any time. Promptly upon its signature of any Transfer
Certificate, the Agent shall notify the Borrowers, the Transferor Bank and the
Transferee Bank.


 


15.4                        Reliance on Transfer
Certificate


 


15.4.1              The Agent shall be entitled to rely on any
Transfer Certificate believed by it to be genuine and correct and to have been
presented or signed by the persons by whom it purports to have been presented
or signed, and shall not be liable to any of the parties to this Agreement and
the Security Documents for the consequences of such reliance.


 


15.4.2              The Agent shall at all times during the
continuation of this Agreement maintain a register in which it shall record the
name, Commitments, Contributions and administrative details (including the
lending office) from time to time of the Banks holding a Transfer Certificate
and the date at which the transfer referred to in such Transfer Certificate
held by each Bank was transferred to such Bank, and the Agent shall make the
said register available for inspection


 


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by any Bank or any Borrower during normal banking hours upon receipt by
the Agent of reasonable prior notice requesting the Agent to do so.


 


15.4.3              The entries on the said register shall, in the
absence of manifest error, be conclusive in determining the identities of the
Commitments, the Contributions and the Transfer Certificates held by the Banks
from time to time and the principal amounts of such Transfer Certificates and
may be relied upon by the Agent and the other Security Parties for all purposes
in connection with this Agreement and the Security Documents.


 


15.5                        Transfer fees and expenses


 


If any Bank causes the transfer of all or any part of its rights,
benefits and/or obligations under the Security Documents, the Borrowers shall
pay to the Agent on demand all
costs, fees and expenses (including, but not limited to, legal fees and
expenses), and all value added tax thereon, verified by the Agent as having
been incurred by such Bank in connection with such transfer.


 


15.6                        Documenting transfers


 


If any Bank 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 Borrowers jointly and severally undertake, immediately on being requested
to do so by the Agent and at the cost of the Transferor Bank, to enter into,
and procure that the other Security Parties shall (at the cost of the
Transferor Bank) enter into, such documents as may be necessary or desirable to
transfer to the Transferee Bank all or the relevant part of such Bank’s
interest in the Security Documents and all relevant references in this
Agreement to such Bank shall thereafter be construed as a reference to the
Transferor Bank and/or its Transferee Bank (as the case may be) to the extent
of their respective interests.


 


15.7                        Sub-participation


 


A Bank may sub-participate all or any part of its rights and/or
obligations under the Security Documents without the consent of, or notice to,
the Borrowers.


 


15.8                        Lending office


 


Each Bank shall lend through its office at the address specified in schedule 1
or, as the case may be, in any relevant Transfer Certificate or through any
other office of such Bank selected from time to time by it through which such
Bank wishes to lend for the purposes of this Agreement. If the office through
which a Bank is lending is changed pursuant to this clause 15.8, such Bank
shall notify the Agent promptly of such change and the Agent shall notify the
Borrowers, the Security Agent, the Account Bank, the Swap Providers and the
other Banks.


 


15.9                        Disclosure of information


 


A Bank may disclose to a prospective assignee, transferee or to any
other person who may propose entering into contractual relations with such Bank
in relation to this Agreement such information about the Borrowers and/or the
other Security Parties as such Bank shall consider appropriate.


 


16                                  Arranger,
Agent and Security Agent


 


16.1                        Appointment of the Agent


 


Each Bank and each Swap Provider irrevocably appoints the Agent as its
agent for the purposes of this Agreement and such of the Security Documents to which
it may be appropriate for the Agent to be party. By virtue of such appointment,
each of the Banks and each of the Swap Providers hereby authorises the Agent:


 


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16.1.1              to execute such documents as may be approved by
the Majority Banks for execution by the Agent; and


 


16.1.2              (whether or not by or through employees or
agents) to take such action on such Bank’s or such Swap Provider’s behalf and
to exercise such rights, remedies, powers and discretions as are specifically
delegated to the Agent by this Agreement and/or any other Security Document,
together with such powers and discretions as are reasonably incidental thereto.


 


16.2                        Agent’s actions


 


Any action taken by the Agent under or in relation to this Agreement or
any of the other Security Documents whether with requisite authority or on the
basis of appropriate instructions, received from the Banks and/or the Swap
Providers (or as otherwise duly authorised) shall be binding on all the Banks
and the Swap Providers.


 


16.3                        Agent’s duties


 


The Agent shall:


 


16.3.1              promptly notify each Bank and each Swap
Provider of the contents of each notice, certificate or other document received
by it from the Borrowers under or pursuant to clauses 8.1.1, 8.1.5 and 8.1.7;
and


 


16.3.2              (subject to the other provisions of this clause
16) take (or instruct the Security Agent to take) such action or, as the case
may be, refrain from taking (or authorise the Security Agent to refrain from
taking) such action with respect to the exercise of any of its rights,
remedies, powers and discretions as agent, as the Majority Banks may direct.


 


16.4                        Agent’s rights


 


The Agent may:


 


16.4.1              in the exercise of any right, remedy, power or
discretion in relation to any matter, or in any context, not expressly provided
for by this Agreement or any of the other Security Documents, act or, as the
case may be, refrain from acting (or authorise the Security Agent to act or
refrain from acting) in accordance with the instructions of the Banks and/or the
Swap Providers, and shall be fully protected in so doing;


 


16.4.2              unless and until it shall have received
directions from the Majority Banks, take such action or, as the case may be,
refrain from taking such action (or authorise the Security Agent to take or
refrain from taking such action) in respect of a Default of which the Agent has
actual knowledge as it shall deem advisable in the best interests of the Banks
and the Swap Providers (but shall not be obliged to do so);


 


16.4.3              refrain from acting (or authorise the Security
Agent to refrain from acting) in accordance with any instructions of the Banks
and/or the Swap Providers to institute any legal proceedings arising out of or
in connection with this Agreement or any of the other Security Documents until
it and/or the Security Agent has been indemnified and/or secured to its
satisfaction against any and all costs, expenses or liabilities (including
legal fees) which it would or might incur as a result;


 


16.4.4              deem and treat (i) each Bank as the person
entitled to the benefit of the Contribution of such Bank for all purposes of
this Agreement unless and until a notice shall have been filed with the Agent
pursuant to clause 15.3 and shall have become effective, and (ii) the
office set opposite the name of each of the Banks in schedule 1 unless and
until a written notice of change of lending office shall have been received by
the Agent and the Agent may act upon any such notice unless and until the same
is superseded by a further such notice;


 


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16.4.5              rely as to matters of fact which might
reasonably be expected to be within the knowledge of any Security Party upon a
certificate signed by any director or officer of the relevant Security Party on
behalf of the relevant Security Party; and


 


16.4.6              do anything which is in its opinion necessary
or desirable to comply with any law or regulation in any jurisdiction.


 


16.5                        No liability of Arranger or
Agent


 


Neither the Arranger nor the Agent nor any of their respective employees
and agents shall:


 


16.5.1              be obliged to make any enquiry as to the use of
any of the proceeds of the Loan unless (in the case of the Agent) so required
in writing by a Bank, in which case the Agent shall promptly make the
appropriate request to the Borrowers; or


 


16.5.2              be obliged to make any enquiry as to any breach
or default by the Borrowers or any of them or any other Security Party in the
performance or observance of any of the provisions of this Agreement or any of
the other Security Documents or as to the existence of a Default unless (in the
case of the Agent) the Agent has actual knowledge thereof or has been notified
in writing thereof by a Bank or a Swap Provider, in which case the Agent shall
promptly notify the Banks and the Swap Providers of the relevant event or
circumstance; or


 


16.5.3              be obliged to enquire whether or not any
representation or warranty made by the Borrowers or any of them or any other
Security Party pursuant to this Agreement or any of the other Security Documents
is true; or


 


16.5.4              be obliged to do anything (including, without
limitation, disclosing any document or information) which would, or might in
its opinion, be contrary to any law or regulation or be a breach of any duty of
confidentiality or otherwise be actionable or render it liable to any person;
or


 


16.5.5              be obliged to account to any Bank or either
Swap Provider for any sum or the profit element of any sum received by it for
its own account; or


 


16.5.6              be obliged to institute any legal proceedings
arising out of or in connection with this Agreement or any of the other
Security Documents other than on the instructions of the Majority Banks; or


 


16.5.7              be liable to any Bank or either Swap Provider
for any action taken or omitted under or in connection with this Agreement or
any of the other Security Documents unless caused by its gross negligence or
wilful misconduct.


 


For the purposes of this clause 16, neither the Arranger nor the Agent
shall be treated as having actual knowledge of any matter of which the
corporate finance or any other division outside the agency or loan
administration department of the Arranger or the person for the time being
acting as the Agent may become aware in the context of corporate finance,
advisory or lending activities from time to time undertaken by the Arranger or,
as the case may be, the Agent for any Security Party or any other person which
may be a trade competitor of any Security Party or may otherwise have
commercial interests similar to those of any Security Party.


 


16.6                        Non-reliance on Arranger or
Agent


 


Each Bank and each Swap Provider acknowledges that it has not relied on
any statement, opinion, forecast or other representation made by the Arranger
or the Agent to induce it to enter into this Agreement or any of the other
Security Documents and that it has made and will continue to make, without
reliance on the Arranger or the Agent and based on such documents as it
considers appropriate, its own appraisal of the creditworthiness of the
Security Parties and its own independent investigation of the financial
condition, prospects and affairs of the Security Parties in connection with the
making and continuation of such Bank’s Commitment or Contribution under this
Agreement. Neither the Arranger nor the Agent shall have any duty or


 


66





















 


responsibility, either initially or on a continuing basis, to provide
any Bank or either Swap Provider with any credit or other information with
respect to any Security Party whether coming into its possession before the
making of the Loan or at any time or times thereafter other than as provided in
clause 16.3.1.


 


16.7                        No responsibility on Arranger
or Agent for Borrowers’ performance


 


Neither the Arranger nor the Agent shall have any responsibility or
liability to any Bank or either Swap Provider:


 


16.7.1              on account of the failure of any Security Party
to perform its obligations under any of the Security Documents; or


 


16.7.2              for the financial condition of any Security
Party; or


 


16.7.3              for the completeness or accuracy of any
statements, representations or warranties in any of the Security Documents or
any document delivered under any of the Security Documents; or


 


16.7.4              for the execution, effectiveness, adequacy,
genuineness, validity, enforceability or admissibility in evidence of any of
the Security Documents or of any certificate, report or other document executed
or delivered under any of the Security Documents; or


 


16.7.5              to investigate or make any enquiry into the
title of the Borrowers or any other Security Party to the Ships or any other
security or any part thereof; or


 


16.7.6              for the failure to register any of the Security
Documents with any official or regulatory body or office or elsewhere; or


 


16.7.7              for taking or omitting to take any other action
under or in relation to any of the Security Documents or any aspect of any of
the Security Documents; or


 


16.7.8              on account of the failure of the Security Agent
to perform or discharge any of its duties or obligations under the Security
Documents; or


 


16.7.9              otherwise in connection with this Agreement or
its negotiation or for acting (or, as the case may be, refraining from acting)
in accordance with the instructions of the Banks or the Swap Providers.


 


16.8                        Reliance on documents and professional
advice


 


Each of the Arranger and the Agent shall be entitled to rely on any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person and shall be entitled to
rely as to legal or other professional matters on opinions and statements of
any legal or other professional advisers selected or approved by it (including
those in the Arranger’s or, as the case may be, the Agent’s employment).


 


16.9                        Other dealings


 


Each of the Arranger and the Agent may, without any liability to account
to the Banks or the Swap Providers, accept deposits from, lend money to, and
generally engage in any kind of banking or other business with, and provide
advisory or other services to, any Security Party or any of its Related
Companies or any of the Banks or the Swap Providers as if it were not the
Arranger or, as the case may be, the Agent.


 


16.10                 Rights of Agent as Bank; no
partnership


 


With respect to its own Commitment and Contribution (if any) the Agent
shall have the same rights and powers under the Security Documents as any other
Bank and may exercise the same as though it were not performing the duties and
functions delegated to it under this Agreement and the term “Banks” shall, unless the context clearly
otherwise indicates, include the Agent in


 


67





















 


its individual capacity as a Bank. This Agreement shall not and shall
not be construed so as to constitute a partnership between the parties or any of
them.


 


16.11                 Amendments
and waivers


 


16.11.1            Subject to clause 16.11.2, the Agent may, with
the consent of the Majority Banks (or if and to the extent expressly authorised
by the other provisions of any of the Security Documents) and, if so instructed
by the Majority Banks, shall:


 


(a)   agree (or
authorise the Security Agent to agree) amendments or modifications to any of
the Security Documents with the Borrowers and/or any other Security Party;
and/or


 


(b)   vary or waive
breaches of, or defaults under, or otherwise excuse performance of, any
provision of any of the other Security Documents by the Borrowers and/or any
other Security Party (or authorise the Security Agent to do so).


 


Any such action so authorised and effected by the
Agent shall be documented in such manner as the Agent shall (with the approval
of the Majority Banks) determine, shall be promptly notified to the Banks and
the Swap Providers by the Agent and (without prejudice to the generality of
clause 16.2) shall be binding on the Banks and the Swap Providers.


 


16.11.2            Except with the prior written consent of the
Banks and the Swap Providers, the Agent shall have no authority on behalf of
the Banks and the Swap Providers to agree (or authorise the Security Agent to
agree) with the Borrowers and/or any other Security Party any amendment or
modification to any of the Security Documents or to grant (or authorise the
Security Agent to grant) waivers in respect of breaches or defaults or to vary
or excuse (or authorise the Security Agent to vary or excuse) performance of or
under any of the Security Documents by the Borrowers or any of them and/or any
other Security Party, if the effect of such amendment, modification, waiver or
excuse would be to:


 


(a)   reduce the
Margin;


 


(b)   postpone the
due date or reduce the amount of any payment of principal, interest or other
amount payable by any Security Party under any of the Security Documents;


 


(c)   change the
currency in which any amount is payable by any Security Party under any of the
Security Documents;


 


(d)   increase any
Bank’s Commitment;


 


(e)   extend the
Termination Date;


 


(f)    change any
provision of any of the Security Documents which expressly or implied requires
the approval or consent of all the Banks such that the relevant approval or
consent may be given otherwise than with the sanction of all the Banks;


 


(g)   change the
order of distribution under clauses 6.9 and 13.1;


 


(h)   change this clause 16.11;


 


(i)    change the
definition of “Majority Banks” in
clause 1.2; or


 


(j)    release any
Security Party from the security constituted by any Security Document (except
as required by the terms thereof or by law) or change the terms and conditions
upon which such security or guarantee may be, or is required to be, released.


 


16.12                 Reimbursement
and indemnity by Banks


 


Each Bank shall reimburse the Agent (rateably in accordance with such
Bank’s Commitment or, if after the drawdown of the first Advance to be drawn
down, in accordance with such Bank’s


 


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Contribution), to the extent that the Agent is not reimbursed by the
Borrowers, for the costs, charges and expenses incurred by the Agent which are
expressed to be payable by the Borrowers under clause 5.1 including (in each
case) the fees and expenses of legal or other professional advisers. Each Bank
shall on demand indemnify the Agent (rateably in accordance with such Bank’s
Commitment or, if after the drawdown of the first Advance to be drawn down, in
accordance with such Bank’s Contribution) against all liabilities, damages,
costs and claims whatsoever incurred by the Agent in connection with any of the
Security Documents or the performance of its duties under any of the Security
Documents or any action taken or omitted by the Agent under any of the Security
Documents, unless such liabilities, damages, costs or claims arise from the
Agent’s own gross negligence or wilful misconduct.


 


16.13                 Retirement of Agent


 


16.13.1            The Agent may, having given to the Borrowers
and each of the Banks and each of the Swap Providers not less than fifteen (15)
days’ notice of its intention to do so, retire from its appointment as Agent
under this Agreement, provided that no such retirement shall take effect unless
there has been appointed by the Banks and the Swap Providers as a successor agent:


 


(a)   a Related
Company of the Agent nominated by the Agent which the Banks and the Swap
Providers hereby irrevocably and unconditionally agree to appoint or, failing
such nomination,


 


(b)   a Bank
nominated by the Majority Banks or, failing such a nomination,


 


(c)   any reputable
and experienced bank or financial institution nominated by the retiring Agent.


 


Any corporation into which the retiring Agent may be merged or converted
or any corporation with which the Agent may be consolidated or any corporation
resulting from any merger, conversion, amalgamation, consolidation or other
reorganisation to which the Agent shall be a party shall, to the extent
permitted by applicable law, be the successor Agent under this Agreement and
the other Security Documents without the execution or filing of any document or
any further act on the part of any of the parties to this Agreement and the
other Security Documents save that notice of any such merger, conversion,
amalgamation, consolidation or other reorganisation shall forthwith be given to
each Security Party and the Banks and the Swap Providers. Prior to any such
successor being appointed, the Agent agrees to consult with the Borrowers as to
the identity of the proposed successor and to take account of any reasonable
objections which the Borrowers may raise to such successor being appointed.


 


16.13.2            Upon any such successor as aforesaid being
appointed, the retiring Agent shall be discharged from any further obligation
under the Security Documents (but shall continue to have the benefit of this
clause 16 in respect of any action it has taken or refrained from taking prior
to such discharge) and its successor and each of the other parties to this
Agreement shall have the same rights and obligations among themselves as they
would have had if such successor had been a party to this Agreement in place of
the retiring Agent. The retiring Agent shall (at the expense of the Borrowers)
provide its successor with copies of such of its records as its successor
reasonably requires to carry out its functions under the Security Documents.


 


16.14                 Appointment and retirement of
Security Agent


 


16.14.1            Appointment


 


Each of the Banks, the Swap Providers and the Agent irrevocably appoints
the Security Agent as its security agent and trustee for the purposes of this
Agreement and the Security Documents to which the Security Agent is or is to be
a party, in each case on the terms set out in this Agreement. By virtue of such
appointment, each of the Banks, the Swap Providers and the Agent hereby
authorises the Security Agent (whether or not by or through employees or
agents) to take such action on its behalf and to exercise such rights,
remedies, powers


 


69





















 


and discretions as are specifically delegated to the Security Agent by
this Agreement and/or the Security Documents to which the Security Agent is or
is intended to be a party, together with such powers and discretions as are
reasonably incidental thereto.


 


16.14.2            Retirement


 


Without prejudice to clause 16.13, the Security Agent may, having given
to the Borrowers and each of the Banks and the Swap Providers not less than
fifteen (15) days’ notice of its intention to do so, retire from its
appointment as Security Agent under this Agreement and any Trust Deed, provided
that no such retirement shall take effect unless there has been appointed by
the Banks, the Swap Providers and the Agent as a successor security agent and
trustee:


 


(a)   a Related
Company of the Security Agent nominated by the Security Agent which the Agent,
the Banks and the Swap Providers hereby irrevocably and unconditionally agree
to appoint or, failing such nomination,


 


(b)   a bank or
trust corporation nominated by the Majority Banks or, failing such a
nomination,


 


(c)   any bank or
trust corporation nominated by the retiring Security Agent,


 


and, in any case, such successor security agent and trustee shall have
duly accepted such appointment by delivering to the Agent (i) written
confirmation (in a form acceptable to the Agent) of such acceptance agreeing to
be bound by this Agreement in the capacity of Security Agent as if it had been
an original party to this Agreement and (ii) a duly executed Trust Deed.


 


Any corporation into which the retiring Security Agent may be merged or
converted or any corporation with which the Security Agent may be consolidated
or any corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the Security Agent shall be a
party shall, to the extent permitted by applicable law, be the successor
Security Agent under this Agreement, any Trust Deed and the other Security
Documents referred to in clause 16.14.1 without the execution or filing of any
document or any further act on the part of any of the parties to this
Agreement, any Trust Deed and the other Security Documents save that notice of
any such merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to each Security Party and the Banks
and the Swap Providers. Prior to any such successor being appointed, the
Security Agent agrees to consult with the Borrowers as to the identity of the
proposed successor and to take account of any reasonable objections which the
Borrowers may raise to such successor being appointed.


 


Upon any such successor as aforesaid being appointed, the retiring
Security Agent shall be discharged from any further obligation under the
Security Documents (but shall continue to have the benefit of this clause 16 in
respect of any action it has taken or refrained from taking prior to such
discharge) and its successor and each of the other parties to this Agreement
shall have the same rights and obligations among themselves as they would have
had if such successor had been a party to this Agreement in place of the
retiring Security Agent. The retiring Security Agent shall (at the expense of
the Borrowers) provide its successor with copies of such of its records as its
successor reasonably requires to carry out its functions under the Security Documents.


 


16.15                 Powers and duties of the
Security Agent


 


16.15.1            The Security Agent shall have no duties,
obligations or liabilities to any of the Banks, the Swap Providers and the
Agent beyond those expressly stated in any of the Security Documents. Each of the
Agent, the Banks and the Swap Providers hereby authorises the Security Agent to
enter into and execute:


 


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(a)   each of the
Security Documents to which the Security Agent is or is intended to be a party;
and


 


(b)   any and all
such other Security Documents as may be approved by the Agent in writing
(acting on the instructions of the Majority Banks) for entry into by the
Security Agent,


 


and, in each and every case, to hold any and all security thereby created
upon trust for the Banks, the Swap Providers and the Agent in the manner
contemplated by this Agreement.


 


16.15.2            Subject to clause 16.15.3 the Security Agent
may, with the prior consent of the Majority Banks communicated in writing by
the Agent, concur with any of the Security Parties to:


 


(a)   amend, modify
or otherwise vary any provision of the Security Documents to which the Security
Agent is or is intended to be a party; or


 


(b)   waive breaches
of, or defaults under, or otherwise excuse performance of, any provision of the
Security Documents to which the Security Agent is or is intended to be a party.


 


Any such action so authorised and effected by the Security Agent shall
be promptly notified to the Banks, the Swap Providers and the Agent by the
Security Agent and shall be binding on the other Creditors.


 


16.15.3            The Security Agent shall not concur with any
Security Party with respect to any of the matters described in clause 16.11.2
without the consent of the Banks communicated in writing by the Agent.


 


16.15.4            The Security Agent shall (subject to the other
provisions of this clause 16) take such action or, as the case may be, refrain
from taking such action, with respect to any of its rights, powers and
discretions as security agent and trustee, as the Agent may direct. Subject as
provided in the foregoing provisions of this clause, unless and until the
Security Agent shall have received such instructions from the Agent, the
Security Agent may, but shall not be obliged to, take (or refrain from taking) such
action under or pursuant to the Security Documents referred to in clause
16.14.1 as the Security Agent shall deem advisable in the best interests of the
Creditors provided that (for the avoidance of doubt), to the extent that this
clause might otherwise be construed as authorising the Security Agent to take,
or refrain from taking, any action of the nature referred to in clause 16.15.2
- and for which the prior consent of the Banks is expressly required under
clause 16.15.3 - clauses 16.15.2 and 16.15.3 shall apply to the exclusion of
this clause.


 


16.15.5            None of the Banks nor the Agent nor the Swap
Providers shall have any independent power to enforce any of the Security
Documents referred to in clause 16.14.1 or to exercise any rights, discretions
or powers or to grant any consents or releases under or pursuant to such
Security Documents or any of them or otherwise have direct recourse to the
security and/or guarantees constituted by such Security Documents or any of
them except through the Security Agent.


 


16.15.6            For the purpose of this clause 16, the Security
Agent may, rely and act in reliance upon any information from time to time
furnished to the Security Agent by the Agent (whether pursuant to clause
16.15.7 or otherwise) unless and until the same is superseded by further such
information, so that the Security Agent shall have no liability or
responsibility to any party as a consequence of placing reliance on and acting
in reliance upon any such information unless the Security Agent has actual knowledge
that such information is inaccurate or incorrect.


 


16.15.7            Without prejudice to the foregoing each of the
Agent, the Swap Providers and the Banks (whether directly or through the Agent)
shall provide the Security Agent with such written information as it may
reasonably require for the purpose of carrying out its duties and obligations
under the Security Documents referred to in clause 16.14.1.


 


16.15.8            Each Bank shall reimburse the Security Agent
(rateably in accordance with such Bank’s Commitment or Contribution), to the
extent that the Security Agent is not reimbursed by the


 


71





















 


Borrowers, for the costs, charges and expenses incurred by the Agent
which are expressed to be payable by the Borrowers under clause 5.2 including
(in each case) the fees and expenses of legal or other professional advisers.
Each Bank shall on demand indemnify the Security Agent (rateably in accordance
with such Bank’s Commitment or Contribution) against all liabilities, damages,
costs and claims whatsoever incurred by the Security Agent in connection with
any of the Security Documents or the performance of its duties under any of the
Security Documents or any action taken or omitted by the Security Agent under
any of the Security Documents, unless such liabilities, damages, costs or
claims arise from the Security Agent’s own gross negligence or wilful
misconduct.


 


16.16                 Trust
provisions


 


16.16.1            The trusts constituted or evidenced in or by
this Agreement and the Trust Deed shall remain in full force and effect until
whichever is the earlier of:


 


(a)   the expiration
of a period of eighty (80) years from the date of this Agreement; and


 


(b)   receipt by the
Security Agent of confirmation in writing by the Agent that there is no longer
outstanding any Indebtedness (actual or contingent) which is secured or
guaranteed or otherwise assured by or under any of the Security Documents,


 


and the parties to this Agreement declare that the perpetuity period
applicable to this Agreement and the trusts declared by the Trust Deed shall
for the purposes of the Perpetuities and Accumulations Act 1964 be the period
of eighty (80) years from the date of this Agreement.


 


16.16.2            In its capacity as trustee in relation to the
Security Documents specified in clause 16.14.1, the Security Agent shall,
without prejudice to any of the powers, discretions and immunities conferred
upon trustees by law (and to the extent not inconsistent with the provisions of
any of those Security Documents), have all the same powers and discretions as a
natural person acting as the beneficial owner of such property and/or as are
conferred upon the Security Agent by any of those Security Documents.


 


16.16.3            It is expressly declared that, in its capacity
as trustee in relation to the Security Documents specified in clause 16.14.1,
the Security Agent shall be entitled to invest moneys forming part of the
security and which, in the opinion of the Security Agent, may not be paid out
promptly following receipt in the name or under the control of the Security
Agent in any of the investments for the time being authorised by law for the
investment by trustees of trust moneys or in any other property or investments
whether similar to the aforesaid or not or by placing the same on deposit in the
name or under the control of the Security Agent as the Security Agent may think
fit without being under any duty to diversify its investments and the Security
Agent may at any time vary or transpose any such property or investments for or
into any others of a like nature and shall not be responsible for any loss due
to depreciation in value or otherwise of such property or investments. Any
investment of any part or all of the security may, at the discretion of the
Security Agent, be made or retained in the names of nominees.


 


16.17                 Independent
action by Creditors


 


None of the Creditors shall enforce, exercise any rights, remedies or
powers or grant any consents or releases under or pursuant to, or otherwise
have a direct recourse to the security and/or guarantees constituted by any of
the Security Documents without the prior written consent of the Majority Banks
but, Provided such consent has been obtained, it shall not be necessary for any
other Creditor to be joined as an additional party in any proceedings for this
purpose.


 


16.18                 Common
Agent and Security Agent


 


The Agent and the Security Agent have entered into the Security
Documents in their separate capacities (a) as agent for the Banks and the
Swap Providers under and pursuant to this


 


72





















 


Agreement (in the case of the Agent) and (b) as security agent and
trustee for the Banks, the Swap Providers and the Agent under and pursuant to
this Agreement, to hold the guarantees and/or security created by the Security
Documents specified in clause 16.14.1 on the terms set out in such Security
Documents (in the case of the Security Agent). However, from time to time the
Agent and the Security Agent may be the same entity. When the Agent and the
Security Agent are the same entity and any Security Document provides for the
Agent to communicate with or provide instructions to the Security Agent (and
vice versa), it will not be necessary for there to be any such formal
communications or instructions on those occasions.


 


16.19                 Co-operation to achieve agreed
priorities of application


 


The Banks, the Swap Providers and the Agent shall co-operate with each
other and with the Security Agent and any receiver under the Security Documents
in realising the property and assets subject to the Security Documents and in
ensuring that the net proceeds realised under the Security Documents after
deduction of the expenses of realisation are applied in accordance with clause
13.1 (unless otherwise expressly provided for in any such Security Document).


 


16.20                 Prompt distribution of
proceeds


 


Moneys received by any of the Creditors (whether from a receiver or
otherwise) pursuant to the exercise of (or otherwise by virtue of the existence
of) any rights and powers under or pursuant to any of the Security Documents
shall (after providing for all costs, charges, expenses and liabilities and
other payments ranking in priority) be paid to the Agent for distribution (in
the case of moneys so received by any of the Creditors other than the Agent or
the Security Agent) and shall be distributed by the Agent or, as the case may
be, the Security Agent (in the case of moneys so received by the Agent or, as
the case may be, the Security Agent) in each case in accordance with clause
13.1.  The Agent or, as the case may be,
the Security Agent shall make each such application and/or distribution as soon
as is practicable after the relevant moneys are received by, or otherwise
become available to, the Agent or, as the case may be, the Security Agent save
that (without prejudice to any other provision contained in any of the Security
Documents) the Agent or, as the case may be, the Security Agent (acting on the
instructions of the Majority Banks) or any receiver may credit any moneys
received by it to a suspense account for so long and in such manner as the
Agent or such receiver may from time to time determine with a view to
preserving the rights of the Agent and/or the Security Agent and/or the Account
Bank and/or the Arranger and/or the Banks and/or the Swap Providers or any of
them to provide for the whole of their respective claims against the Borrowers
or any other person liable.


 


17                                  Notices
and other matters


 


17.1                        Notices


 


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


 


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


 


17.1.2              be deemed to have been received, subject as
otherwise provided in the relevant Security Document, in the case of a letter,
when delivered personally or three (3) days after it has been put in to
the post and, in the case of a facsimile transmission or other means of
telecommunication in permanent written form, at the time of despatch (provided
that if the date of despatch is not a business day in the country of the
addressee or if the time of despatch is after the close of business in the country
of the addressee it shall be deemed to have been received at the opening of
business on the next such business day); and


 


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17.1.3              be sent:


 


(a)   if to the Borrowers or any of them at:


 


c/o Aegean Bunkering Services Inc.


42 Hadjikyriakou Street


185 38 Piraeus


Greece


 


Fax no:   +30 210 458 6242


Attn:       Mr Koutsoukos


 


(b)   if to the Arranger and/or Agent and/or the
Account Bank and/or the Security Agent at:


 


Aegean Baltic Bank S.A.


28 Diligianni Street


145 62 Kifissia


Greece


 


Fax No:   +30 210 62 34 192


Attn:       Business Development


 


(c)   if to a Bank, to its address or fax number
specified in schedule 1 or in any relevant Transfer Certificate; and


 


(d)   if to a Swap Provider, to its address or fax
number specified in paragraph (a) of Part 4 of the Schedule to
the relevant Master Swap Agreement, 


 


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


 


17.2                        Notices through the Agent


 


Every notice, request, demand or other
communication under this Agreement or (unless otherwise provided therein) any
other Security Document to be given by the Borrowers or any of them to any
other party (other than the Swap Providers), shall be given to the Agent for
onward transmission as appropriate and if it is to be given to the Borrowers it
shall (except otherwise provided in the Security Documents) be given to the
Agent.


 


17.3                        No implied waivers, remedies
cumulative


 


No failure or delay on the part of a Creditor 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 such
Creditor 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.


 


17.4                        English language


 


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


 


17.5                        Borrowers’ obligations


 


17.5.1              Joint and several


 


Notwithstanding anything to the contrary
contained in any of the Security Documents, the agreements, obligations and
liabilities of the Borrowers herein contained are joint and several and shall
be construed accordingly. Each of the Borrowers agrees and consents to be bound


 


74





















 


by the Security Documents to which it is, or is to be, a party
notwithstanding that the other Borrowers which are intended to sign or to be
bound may not do so or be effectually bound and notwithstanding that any of the
Security Documents may be invalid or unenforceable against the other Borrowers,
whether or not the deficiency is known to any of the Creditors.


 


17.5.2              Borrowers as principal debtors


 


Each Borrower acknowledges and confirms that it is a principal and
original debtor in respect of all amounts which may become payable by the
Borrowers in accordance with the terms of this Agreement or any of the other
Security Documents and agrees that the Creditors may also continue to treat it
as such, whether or not any Creditor is or becomes aware that such Borrower is
or has become a surety for the other Borrowers.


 


17.5.3              Indemnity


 


The Borrowers hereby agree jointly and severally to keep the Creditors
fully indemnified on demand against all damages, losses, costs and expenses
arising from any failure of any Borrower to perform or discharge any purported
obligation or liability of the other Borrowers which would have been the
subject of this Agreement or any other Security Document had it been valid and
enforceable and which is not or ceases to be valid and enforceable against the
other Borrowers on any ground whatsoever, whether or not known to a Creditor
including, without limitation, any irregular exercise or absence of any corporate
power or lack of authority of, or breach of duty by, any person purporting to
act on behalf of the other Borrowers (or any legal or other limitation, whether
under the Limitation Acts or otherwise or any disability or death, bankruptcy,
unsoundness of mind, insolvency, liquidation, dissolution, winding up,
administration, receivership, amalgamation, reconstruction or any other
incapacity of any person whatsoever (including, in the case of a partnership, a
termination or change in the composition of the partnership) or any change of
name or style or constitution of any Security Party).


 


17.5.4              Liability unconditional


 


None of the obligations or liabilities of the Borrowers under this
Agreement or any other Security Document shall be discharged or reduced by
reason of:


 


(a)   the death,
bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution,
winding-up, administration, receivership, amalgamation, reconstruction or other
incapacity of any person whatsoever (including, in the case of a partnership, a
termination or change in the composition of the partnership) or any change of
name or style or constitution of any Borrower or any other person liable;


 


(b)   the Agent
(acting on the instructions of the Majority Banks) granting any time,
indulgence or concession to, or compounding with, discharging, releasing or
varying the liability of, any Borrower or any other person liable or renewing,
determining, varying or increasing any accommodation, facility or transaction
or otherwise dealing with the same in any manner whatsoever or concurring in,
accepting, varying any compromise, arrangement or settlement or omitting to
claim or enforce payment from any Borrower or any other person liable; or


 


(c)   anything done
or omitted which but for this provision might operate to exonerate the
Borrowers or any of them.


 


17.5.5              Recourse to other
security


 


The Creditors shall not be obliged to make any claim or demand or to
resort to any Security Document or other means of payment now or hereafter held
by or available to it for enforcing this Agreement or any of the Security
Documents against any Borrower or any other person liable and no action taken
or omitted by any Creditor in connection with any such Security Document or
other means of payment will discharge, reduce, prejudice or affect the
liability of


 


75





















 


the Borrowers under this Agreement and the Security Documents to which
any of them is, or is to be, a party.


 


17.5.6              Waiver of Borrowers’ rights


 


Each Borrower agrees with each Creditor that, from the date of this
Agreement and so long as any moneys are owing under any of the Security
Documents and while all or any part of the Total Commitment remains
outstanding, it will not, without the prior written consent of the Agent
(acting on the instructions of the Majority Banks):


 


(a)   exercise any
right of subrogation, reimbursement and indemnity against the other Borrowers
or any other person liable under the Security Documents;


 


(b)   demand or
accept repayment in whole or in part of any Indebtedness now or hereafter due
to such Borrower from the other Borrowers or from any other person liable or
demand or accept any guarantee, indemnity or other assurance against financial
loss or any document or instrument created or evidencing an Encumbrance in
respect of the same or dispose of the same;


 


(c)   take any steps
to enforce any right against the other Borrowers or any other person liable in
respect of any such moneys; or


 


(d)   claim any
set-off or counterclaim against the other Borrowers or any other person liable
or claiming or proving in competition with any Creditor in the liquidation of
the other Borrowers or any other person liable or have the benefit of, or share
in, any payment from or composition with, the other Borrowers or any other
person liable or any other Security Document now or hereafter held by any
Creditor for any moneys owing under this Agreement or for the obligations or
liabilities of any other person liable but so that, if so directed by the
Agent, it will prove for the whole or any part of its claim in the liquidation
of the other Borrowers or other person liable on terms that the benefit of such
proof and all money received by it in respect thereof shall be held on trust
for the Banks and applied in or towards discharge of any moneys owing under
this Agreement in such manner as the Agent (acting on the instructions of the
Majority Banks) shall deem appropriate.


 


17.5.7              Maximum liability


 


(a)   Each Borrower
shall be entitled to rights of contribution as against the other Borrowers
however, such rights of contribution shall (i) not in any way (except as
otherwise expressly set forth in clause 17.5.7(b) below) condition or
lessen the liability of each Borrower as a joint and several borrower for the
whole of the obligation owed to the Creditors hereunder, and under the Security
Documents and (ii) be fully subject and subordinate to the rights of the
Creditors against the Borrowers hereunder, and under the Security Documents.


 


(b)   Notwithstanding
anything to the contrary contained in this Agreement, or any of the Security
Documents, in the event that any court or other judicial body of competent
jurisdiction determines that legal principles of fraudulent conveyances,
fraudulent transfers or similar concepts are applicable in evaluating the
enforceability against any particular Borrower or its assets of this Agreement
or any Security Document granted by the Borrowers as security for their
respective obligations thereunder and that under such principles, this
Agreement or such other Security Document would not be enforceable against such
Borrower or its assets unless the following provisions of this clause 17.5.7(b) had
effect, then, the maximum liability of any of the Borrowers hereunder, (the “Maximum Liability Amount”) shall be limited so that in no
event shall such amount exceed the lesser of (i) the obligations of the
Borrowers hereunder (in the principal amount of up to Thirty five million five
hundred thousand Dollars ($35,500,000), plus interest, expenses and fees and
any amounts owing under the Master Swap Agreements from time to time), and (ii) an
amount equal to the aggregate, without double counting, of (A) ninety-five
per cent (95%) of such Borrower’s Adjusted Net


 


76





















 


Worth (as hereinafter defined) on the date hereof, on the date of
commencement of a case under the Bankruptcy Code of the United States of
America, as amended (11 U.S.C. ss 101-1330) (the “Bankruptcy Code”) or
any similar legislation in any other jurisdiction, in which such Borrower is a
debtor, or on the date enforcement of this Agreement is sought (the “Determination Date”), whichever is
greater, (B) the aggregate fair value of such Borrower’s Subrogation and
Contribution Rights (as hereinafter defined) and (C) the amount of any
Valuable Transfer (as hereinafter defined) to such Borrower; provided that any
Borrower’s liability under this Agreement shall further be limited to the
extent, if any, required so that the obligations of any Borrower under this
Agreement shall not be subject to avoidance under Section 548 of the
Bankruptcy Code or any similar provision under the legislation of any other
relevant jurisdiction, or to being set aside or annulled under any applicable
law relating to fraudulent transfers or fraudulent conveyances. In determining
the limitations, if any, on the amount of any Borrower’s obligations hereunder
pursuant to the preceding sentence, any rights of subrogation or contribution
(collectively the “Subrogation and
Contribution Rights”) which
such Borrower may have on the Determination Date with respect to the Funding
Borrower (as hereinafter defined) under applicable law shall be taken into
account.


 


(c)   As used herein
“Adjusted Net Worth” of each
Borrower shall mean, as of any date of determination thereof, an amount equal
to the lesser of (i) an amount equal to the excess of (A) the amount
of the present fair saleable value of the assets of such Borrower over (B) the
amount that will be required to pay such Borrower’s probable liability on its
then existing debts, including contingent liabilities, as they become absolute
and matured, and (ii) an amount equal to (aa) the excess of the sum of
such Borrower’s property at a fair valuation over (bb) the amount of all
liabilities of such Borrower, contingent or otherwise, as such terms are
construed in accordance with applicable federal and state laws in the United
States of America, or the laws of other applicable jurisdictions, governing
determinations of the insolvency of debtors.


 


(d)   In determining
the Adjusted Net Worth of each Borrower for purposes of calculating the Maximum
Liability Amount for such Borrower, the liabilities of such Borrower to be used
in such determination pursuant to each clause of the preceding sentence shall in
any event exclude (i) the liabilities of such Borrower under this
Agreement, (ii) any liabilities of such Borrower subordinated in right of
payment to this Agreement and (iii) any liabilities of such Borrower for
Subrogation and Contribution Rights to the other Borrowers.


 


(e)   As used herein
“Valuable Transfer” shall mean, in
respect of each Borrower, (i) all loans, advances or capital contributions
made to such Borrower with proceeds of the Loan, (ii) all debt securities
or other obligations of such Borrower acquired from such Borrower or retired by
such Borrower with proceeds of the Loan and transferred, absolutely and not as
collateral, to such Borrower, (iii) the fair market value of all property
acquired with proceeds of the Loan and transferred, absolutely and not as
collateral, to such Borrower, (iv) all equity securities of such Borrower
acquired from such Borrower with proceeds of the Loan and (v) the value of
any other economic benefits in accordance with applicable federal and state
laws, or the laws of other applicable jurisdictions, governing determinations
of the insolvency of debtors, in each case accruing to such Borrower as a
result of the Loan.


 


(f)    Without in
any way modifying or affecting the obligations of any of the Borrowers
hereunder, in the event any of the Borrowers shall make any payment or payments
to the Creditors under this Agreement in an aggregate amount in excess of such
Borrower’s Percentage (such Borrower the “Funding
Borrower”; the
Borrowers other than the Funding Borrower, the “Other Borrowers”), the
Other Borrowers shall contribute to the Funding Borrower an amount equal to the
Other Borrowers’ Percentage of such payment or payments made by the Funding
Borrower. For the purposes hereof, the Funding Borrower’s or Other Borrowers’
Percentage shall be determined as of the date on which such payment was made by
reference to the ratio of (i) the Funding Borrower’s or Other Borrowers’
Adjusted Net Worth as of such date to (ii) the aggregate


 


77





















 


Adjusted Net Worth of all the Borrowers (including the Funding Borrower)
as of such date.  Nothing in this
paragraph shall affect each Borrower’s several liability to the Creditors for
the entire amount of the obligations of the Borrowers under this Agreement (up
to the limitations set forth in the preceding paragraph) or in any other manner
impair any right or remedy of the Creditors hereunder.  The limitations provided above are intended
solely to preserve the rights of the Agent under this Agreement to the maximum
extent permitted by applicable law and none of the Borrowers nor any other
person shall have any right hereunder that it would not otherwise have under
applicable law.


 


18                                  Governing
law and jurisdiction


 


18.1                        Law


 


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


 


18.2                        Submission to jurisdiction


 


The Borrowers jointly and severally agree, for the benefit of each
Creditor, that any legal action or proceedings arising out of or in connection
with this Agreement against the Borrowers or any of them or any of their assets
may be brought in the English courts.  Each
of the Borrowers irrevocably and unconditionally submits to the jurisdiction of
such courts and irrevocably designates, appoints and empowers Riches Consulting
at present of Old Jarretts Farmhouse, Brantridge Lane, Balcombe, West Sussex
RH17 6JR, England to receive for it and on its behalf, service of process
issued out of the English courts in any such legal action or proceedings.  The submission to such jurisdiction shall not
(and shall not be construed so as to) limit the right of a Creditor to take
proceedings against the Borrowers or any of them in the courts of any other
competent jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.


 


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


 


18.3                        Contracts (Rights of Third
Parties) Act 1999


 


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


 


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


 


78





















 


	
  SIGNED by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  /s/
  SPYRIDON FOKAS

  	
   

  
	
  KITHNOS
  MARITIME INC.

  	
  )

  	
  Attorney-in-fact

  
	
  as
  Borrower

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  /s/
  SPYRIDON FOKAS

  	
   

  
	
  NAXOS
  MARITIME INC.

  	
  )

  	
  Attorney-in-fact

  
	
  as
  Borrower

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  /s/
  SPYRIDON FOKAS

  	
   

  
	
  PAROS
  MARITIME INC.

  	
  )

  	
  Attorney-in-fact

  
	
  as
  Borrower

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  /s/
  SPYRIDON FOKAS

  	
   

  
	
  SANTORINI
  MARITIME INC.

  	
  )

  	
  Attorney-in-fact

  
	
  as
  Borrower

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  /s/
  SPYRIDON FOKAS

  	
   

  
	
  SERIFOS
  MARITIME INC.

  	
  )

  	
  Attorney-in-fact

  
	
  as
  Borrower

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  and
  by

  	
  )

  	
  /s/
  PHILIPPOS TSAMANIS

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  Authorised
  Signatory

  	
   

  
	
  AEGEAN
  BALTIC BANK S.A.

  	
  )

  	
   

  
	
  as
  Arranger, Agent, Security Agent, Account Bank, Bank

  	
  )

  	
  /s/
  KONSTANTINOS HADJIPANAYOTIS

  	
   

  
	
  and
  Swap Provider

  	
  )

  	
  Authorised
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  /s/
  ELIZABETH POLLOCK

  	
   

  
	
  HSH
  NORDBANK AG

  	
  )

  	
  Attorney-in-fact

  
	
  as
  Bank and Swap Provider

  	
  )

  	
   

  



 


105