Document:

exv10w5

Exhibit 10.5

Dated 16 October 2007

as novated, amended and restated on March 2010

GRAND VICTORIA PTE. LTD.

as Borrower

- and -

WESTLB AG, LONDON BRANCH

as Lender

 

LOAN AGREEMENT

 

relating to a term loan facility of up to $27,500,000

to refinance the Borrower’s existing indebtedness secured on

the Borrower’s approximately 75,966 metric tons deadweight

bulk carrier named “GRAND VICTORIA”

WATSON, FARLEY & WILLIAMS

Piraeus

 

INDEX

	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	1	 	INTERPRETATION
	 	 	1	 
	 	 	 
	 	 	 	 
	2	 	FACILITY
	 	 	12	 
	 	 	 
	 	 	 	 
	3	 	DRAWDOWN
	 	 	12	 
	 	 	 
	 	 	 	 
	4	 	INTEREST
	 	 	12	 
	 	 	 
	 	 	 	 
	5	 	INTEREST PERIODS
	 	 	14	 
	 	 	 
	 	 	 	 
	6	 	DEFAULT INTEREST
	 	 	14	 
	 	 	 
	 	 	 	 
	7	 	REPAYMENT AND PREPAYMENT
	 	 	15	 
	 	 	 
	 	 	 	 
	8	 	CONDITIONS PRECEDENT
	 	 	17	 
	 	 	 
	 	 	 	 
	9	 	REPRESENTATIONS AND WARRANTIES
	 	 	18	 
	 	 	 
	 	 	 	 
	10	 	GENERAL UNDERTAKINGS
	 	 	20	 
	 	 	 
	 	 	 	 
	11	 	CORPORATE UNDERTAKINGS
	 	 	22	 
	 	 	 
	 	 	 	 
	12	 	INSURANCE
	 	 	23	 
	 	 	 
	 	 	 	 
	13	 	SHIP COVENANTS
	 	 	28	 
	 	 	 
	 	 	 	 
	14	 	SECURITY COVER
	 	 	32	 
	 	 	 
	 	 	 	 
	15	 	PAYMENTS AND CALCULATIONS
	 	 	33	 
	 	 	 
	 	 	 	 
	16	 	APPLICATION OF RECEIPTS
	 	 	34	 
	 	 	 
	 	 	 	 
	17	 	APPLICATION OF EARNINGS
	 	 	35	 
	 	 	 
	 	 	 	 
	18	 	EVENTS OF DEFAULT
	 	 	35	 
	 	 	 
	 	 	 	 
	19	 	FEES AND EXPENSES
	 	 	38	 
	 	 	 
	 	 	 	 
	20	 	INDEMNITIES
	 	 	39	 
	 	 	 
	 	 	 	 
	21	 	NO SET-OFF OR TAX DEDUCTION
	 	 	41	 
	 	 	 
	 	 	 	 
	22	 	ILLEGALITY, ETC
	 	 	41	 
	 	 	 
	 	 	 	 
	23	 	INCREASED COSTS
	 	 	42	 
	 	 	 
	 	 	 	 
	24	 	SET-OFF
	 	 	43	 
	 	 	 
	 	 	 	 
	25	 	TRANSFERS AND CHANGES IN LENDING OFFICES
	 	 	44	 
	 	 	 
	 	 	 	 
	26	 	VARIATIONS AND WAIVERS
	 	 	44	 

 

	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	27	 	NOTICES
	 	 	45	 
	 	 	 
	 	 	 	 
	28	 	SUPPLEMENTAL
	 	 	46	 
	 	 	 
	 	 	 	 
	29	 	LAW AND JURISDICTION
	 	 	46	 
	 	 	 
	 	 	 	 
	EXECUTION PAGE	 	 	48	 
	 	 	 
	 	 	 	 
	SCHEDULE 1 DRAWDOWN NOTICE	 	 	49	 
	 	 	 
	 	 	 	 
	SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS	 	 	50	 
	 	 	 
	 	 	 	 
	SCHEDULE 3 MANDATORY COST FORMULA	 	 	53	 

 

THIS AGREEMENT originally made on 16 October 2007 as novated, amended and restated by a Deed of
Novation, Amendment and Restatement (as defined below)

BETWEEN:

	(1)	 	GRAND VICTORIA PTE. LTD., a company incorporated in Singapore whose registered office is at
112 Robinson Road, #12-02, Robinson 112, Singapore (068902) (the “Borrower”); and
	 
	(2)	 	WESTLB AG, LONDON BRANCH a company incorporated in Germany, having its registered office at
Herzogstrasse 15 in 40217 Duesseldorf, Germany and acting through its branch at Woolgate
Exchange, 25 Basinghall Street, London EC2V 5HA, England (the “Lender”).

BACKGROUND

The Lender has agreed to make available to the Borrower a term loan facility of up to the lesser of
(i) $27,500,000 and (ii) 100 per cent. of the Initial Market Value of the Ship for (a) the purpose
of refinancing the Borrower’s Existing Indebtedness secured on the Ship and (b) any other purpose
as the Lender may, in its absolute discretion, agree with the Borrower in writing.

IT IS AGREED as follows:

	1	 	INTERPRETATION
	 
	1.1	 	Definitions. Subject to Clause 1.5 in this Agreement:
	 
	 	 	“Account Pledges” means, together, the Earnings Account Pledge and the Holding Account
Pledge and, in the singular, means either of them;
	 
	 	 	“Approved Broker” means each of Arrow Sale & Purchase (UK) Ltd., H. Clarkson & Company
Limited, Fearnley AS, Platou Shipbrokers A.S., Simpson, Spence & Young Shipbrokers Limited
or any other independent sale and purchase shipbroker as may be approved by the Lender from
time to time and in the plural means all of them;
	 
	 	 	“Approved Charter” means:

	 	(a)	 	the time charterparty in relation to the Ship dated 21 October 2009 and entered
into between the Borrower as owner and AWB Geneva S.A. as charterer for a period of
about 12 months commencing as from 22 November 2009 at a daily net charter hire rate of
$18,000; and
	 
	 	(b)	 	any other time charterparty in relation to the Ship for a term of at least 12
months in form and on terms and conditions and entered into with a charterer in all
respects acceptable to the Lender;

	 	 	“Approved Manager” means Newfront Shipping S.A., a corporation incorporated in the Republic
of Panama whose registered office is at HSBC Building, Samuel Lewis Avenue, Panama, City of
Panama, Republic of Panama acting through its office at 83 Akti Miaouli & Flessa Street,
Piraeus 185 38, Greece or any other company which the Lender may approve from time to time
as the manager of the Ship;
	 
	 	 	“Approved Manager’s Undertaking” means a letter of undertaking executed by the Approved
Manager in favour of the Lender in the terms required by the Lender agreeing certain matters
in relation to the Approved Manager serving as the manager of the Ship and subordinating the
rights of the Approved Manager against the Ship and the Borrower to the rights of the Lender
under the Finance Documents in such form as the Lender may approve or require;

 

	 	 	“Availability Period” means the period commencing on the date of this Agreement and ending
on 30 April 2010 (or, such later date as the Lender may agree with the Borrower) or if
earlier, the date on which the Loan is fully drawn or the Lender’s obligation to make the
Loan is cancelled or terminated;
	 
	 	 	“Balloon Instalment” has the meaning given in Clause 7.1(b);
	 
	 	 	“Bond” means the US$145,000,000 principal amount of 7 per cent. senior unsecured
convertible notes due 2015 issued by Aries Maritime Transport Ltd. (renamed as Newlead
Holdings Ltd.);
	 
	 	 	“Business Day” means a day on which banks are open in London, Athens, Piraeus and
Düsseldorf and, in respect of a day on which a payment is required to be made under a
Finance Document, also in New York City;
	 
	 	 	“Charterparty Assignment” means, in relation to the Ship, an assignment of the rights of
the Borrower under any Approved Charter executed or to be executed by the Borrower in such
form as the Lender may approve or require;
	 
	 	 	“Contractual Currency” has the meaning given in Clause 20.4;
	 
	 	 	“Corporate Guarantee” means the guarantee of the obligations of the Borrower under this
Agreement and the Finance Documents to which it is a party, executed or (as the context may
require) to be executed by the applicable Corporate Guarantor in favour of the Lender in
such form as the Lender may approve or require;
	 
	 	 	“Corporate Guarantor” means, subject to Clause 10.19, Grandunion or, as the case may be,
Newlead;
	 
	 	 	“Deed of Covenant” means a deed of covenant collateral to the Mortgage executed or to be
executed by the Borrower in favour of the Lender in such form as the Lender may approve or
require;
	 
	 	 	“Deed of Novation, Amendment and Restatement” means the deed of novation, amendment and
restatement dated            March 2010 and made between (inter alios) (i) the Borrower as
new borrower and (ii) the Lender setting out the terms and conditions upon which this
Agreement shall be novated, amended and restated;
	 
	 	 	“Dollars” and “$” means the lawful currency for the time being of the United States of
America;
	 
	 	 	“Drawdown Date” means the date requested by the Borrower for the Loan to be advanced, or
(as the context requires) the date on which the Loan is actually advanced;
	 
	 	 	“Drawdown Notice” means a notice in the form set out in Schedule 1 (or in any other form
which the Lender approves or reasonably requires);
	 
	 	 	“Earnings” mean all moneys whatsoever which are now, or later become, payable (actually or
contingently) to the Borrower and which arise out of the use or operation of the Ship,
including (but not limited to):

	 	(a)	 	all freight, hire and passage moneys, compensation payable to the Borrower in
the event of requisition of the Ship for hire, remuneration for salvage and towage
services, demurrage and detention moneys and damages for breach (or payments for
variation or termination) of any charterparty or other contract for the employment of
the Ship;

2

 

	 	(b)	 	all moneys which are at any time payable under Insurances in respect of loss of
earnings; and
	 
	 	(c)	 	if and whenever the Ship is employed on terms whereby any moneys falling within
paragraphs (a) or (b) are pooled or shared with any other person (which may only be
effected with the prior consent of the Lender in accordance with Clause 13.15), that
proportion of the net receipts of the relevant pooling or sharing arrangement which is
attributable to the Ship;

	 	 	“Earnings Account” means an account in the name of the Borrower with the Lender in
Duesseldorf designated “Grand Victoria Pte. Ltd. — Earnings Account”, or any other account
(with that or another office of the Lender) which is designated by the Lender as the
Earnings Account for the purposes of this Agreement;
	 
	 	 	“Earnings Account Pledge” means a pledge in respect of the Earnings Account executed or to
be executed by the Borrower in favour of the Lender in such form as the Lender may approve
or require;
	 
	 	 	“Environmental Claim” means:

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

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

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

	 	 	“Environmental Law” means any law relating to pollution or protection of the environment,
to the carriage of Environmentally Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products and any other substance
(including any chemical, gas or other hazardous or noxious substance) which is (or is
capable of being or becoming) polluting, toxic or hazardous;

3

 

	 	 	“Event of Default” means any of the events or circumstances described in Clause 18.1;
	 
	 	 	“Existing Indebtedness” means the Financial Indebtedness owed on the Drawdown Date by
(inter alios) the Borrower to Scotia Bank Europe Plc. pursuant to a loan agreement dated 14
March 2007 made between the Borrower and two other companies as joint and several borrowers
and Scotia Bank Europe Plc.;
	 
	 	 	“Finance Documents” means:

	 	(a)	 	this Agreement;
	 
	 	(b)	 	the Deed of Novation, Amendment and Restatement;
	 
	 	(c)	 	the Account Pledges;
	 
	 	(d)	 	the Corporate Guarantee;
	 
	 	(e)	 	the Mortgage;
	 
	 	(f)	 	the Deed of Covenant;
	 
	 	(g)	 	the General Assignment;
	 
	 	(h)	 	the Shares Pledge Option Agreement;
	 
	 	(i)	 	the Indemnity and Undertaking;
	 
	 	(j)	 	any Charterparty Assignments; and
	 
	 	(k)	 	any other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower, the Corporate Guarantor or any other person as
security for, or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Lender under this Agreement or any of the other
documents referred to in this definition;

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

	 	(a)	 	for principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
	 
	 	(b)	 	under any loan stock, bond, note or other security issued by the debtor;
	 
	 	(c)	 	under any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
	 
	 	(d)	 	under a financial lease, a deferred purchase consideration arrangement or
any other agreement having the commercial effect of a borrowing or raising of money
by the debtor;
	 
	 	(e)	 	under any foreign exchange transaction, any interest or currency swap
or any other kind of derivative transaction entered into by the debtor or, if
the agreement under which any such transaction is entered into requires netting of
mutual liabilities, the liability of the debtor for the net amount; or
	 
	 	(f)	 	under a guarantee, indemnity or similar obligation entered into by the
debtor in respect of a liability of another person which would fall within (a) to (e)
if the references to the debtor referred to the other person;

4

 

	 	 	“General Assignment” means a general assignment of the Earnings, the Insurances and any
Requisition Compensation in such form as the Lender may approve or require;
	 
	 	 	“Grandunion” means Grandunion Inc., a corporation incorporated and existing under the laws
of the Republic of the Marshall Islands whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro MH 96960, Republic of the Marshall Islands;
	 
	 	 	“Group” means the Borrower, the applicable Corporate Guarantor, the Approved Manager and all
other shipping companies in the same beneficial ownership as the Borrower and/or belonging
to the same holding company structure (as the case may be) and their subsidiaries and
“member of the Group” shall be construed accordingly;
	 
	 	 	“Holding Account” means an account in the name of the Borrower with the Lender in
Duesseldorf (or any other office of the Lender) which is designated by the Lender in writing
as the Holding Account for the purposes of this Agreement;
	 
	 	 	“Holding Account Pledge” means a pledge in respect of the Holding Account executed or to be
executed by the Borrower in favour of the Lender in such form as the Lender may approve or
require;
	 
	 	 	“Indemnity and Undertaking” means the indemnity and undertaking to be executed by each
Corporate Guarantor in favour of the Lender in such form as the Lender may approve or
require and, in the plural means both of them;
	 
	 	 	“Initial Market Value” means, in relation to the Ship, its Market Value determined in
accordance with the valuations referred to at paragraph 5 of Schedule 2, Part B;
	 
	 	 	“Insurances” means:

	 	(a)	 	all policies and contracts of insurance, including entries of the Ship in
any protection and indemnity or war risks association, which are effected in respect
of the Ship, her Earnings or otherwise in relation to her; and
	 
	 	(b)	 	all rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a premium;

	 	 	“Interest Period” means a period determined in accordance with Clause 5;

	 	 	“ISM Code” means:

	 	(a)	 	‘The International Management Code for the Safe Operation of Ship and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by
the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4
November 1993 and incorporated on 19 May 1994 into chapter IX of the International
Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
	 
	 	(b)	 	all further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of the
International Maritime Organisation or any other entity with responsibility for
implementing the ISM Code, including without limitation, the ‘Guidelines on
implementation or administering of the International Safety Management (ISM) Code by
Administrations’ produced by the International Maritime Organisations pursuant to
Resolution A.788(19) adopted on 25 November 1995,
	 
	 	 	 	as the same may be amended, supplemented or replaced from time to time;

5

 

	 	 	“ISM Code Documentation” includes, in relation to the Ship:

	 	(a)	 	the document of compliance (DOC) and safety management certificate (SMC)
issued pursuant to the ISM Code in relation to the Ship within the periods specified
by the ISM Code; and
	 
	 	(b)	 	all other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Lender may require; and
	 
	 	(c)	 	any other documents which are prepared or which are otherwise relevant to
establish and maintain the Ship’s compliance or the compliance of the Borrower, with
the ISM Code which the Lender may require;

	 	 	“ISM Code” means the International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly as Resolutions
A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and
the terms “Safety Management System”, “Safety Management Certificate” and “Document of
Compliance” have the same meanings as are given to them in the ISM Code);

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

	 	 	“ISPS Code” means the “International Code for the Security of Ships and of Port Facilities”
as adopted on 12 December 2002 by resolution 2 of the Conference of Contracting Governments
to the International Convention for the Safety of Life at Sea, 1974;

	 	 	“Lender” means WestLB AG, London Branch acting through its branch at Woolgate Exchange, 25
Basinghall Street, London EC2V 5HA, England;

	 	 	“LIBOR” means, for an Interest Period, the rate per annum determined by the Lender to be the
rate at which deposits in Dollars are offered to the Lender by leading banks in the London
Interbank Market at the Lender’s request at or about 11.00 am (London time) on the Quotation
Date for that Interest Period for a period equal to that Interest Period and for delivery on
the first Business Day of it;

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

	 	 	“Major Casualty” means, any casualty to the Ship in respect of which the claim or the
aggregate of the claims against all insurers, before adjustment for any relevant franchise
or deductible, exceeds $1,000,000 or the equivalent in any other currency;

	 	 	“Mandatory Cost” means the percentage rate per annum calculated by the Lender in accordance
with Schedule 3;

	 	 	“Margin” means, subject to the proviso below:

	 	(a)	 	at any time when the Ship is not subject to an Approved Charter and the
Security Cover Ratio is less than 125 per cent., 3.25 per cent. per annum;
	 
	 	(b)	 	at any time when the Ship is subject to an Approved Charter and the Security
Cover Ratio is less than 125 per cent., 3 per cent. per annum;
	 
	 	(c)	 	at any time when the Ship is not subject to an Approved Charter and the
Security Cover Ratio is equal to or greater than 125 per cent, 2.75 per cent. per
annum; and

6

 

	 	(d)	 	at any time when the Ship is subject to an Approved Charter and the Security
Cover Ratio is equal to or greater than 125 per cent., 2.50 per cent. per annum,

	 	 	Provided that at any time when the Corporate Guarantor (a) is in breach of the financial
covenants in clause 11.15 of the Corporate Guarantee (as evidenced by the most recent
compliance certificate provided pursuant to clause 11.16 of the Corporate Guarantee) or (b)
fails to provide a compliance certificate pursuant to clause 11.16 of the Corporate
Guarantee, 3.25 per cent. per annum;

	 	 	“Market Value” means the market value of the Ship determined in accordance with Clause 14.4;

	 	 	“Mortgage” means the first priority Singapore statutory ship mortgage on the Ship to be
executed by the Borrower in favour of the Lender in such form as the Lender may approve or
require;

     “Negotiation Period” has the meaning given in Clause 4.6;

	 	 	“Newlead” means Newlead Holdings Ltd., a company incorporated and existing under the laws of
Bermuda whose registered office is at Canon’s Court, 22 Victoria Street, Hamilton, Bermuda;

	 	 	“Payment Currency” has the meaning given in Clause 20.4;

	 	 	“Pertinent Document” means:

	 	(a)	 	any Finance Document;
	 
	 	(b)	 	any policy or contract of insurance contemplated by or referred to in
Clause 12 or any other provision of this Agreement or another Finance Document;
	 
	 	(c)	 	any other document contemplated by or referred to in any Finance Document;
and
	 
	 	(d)	 	any document which has been or is at any time sent by or to the Lender in
contemplation of or in connection with any Finance Document or any policy, contract
or document falling within paragraphs (b) or (c);

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

	 	(a)	 	England and Wales;
	 
	 	(b)	 	the country under the laws of which the company is incorporated or formed;
	 
	 	(c)	 	a country in which the company’s central management and control is or has
recently been exercised;
	 
	 	(d)	 	a country in which the overall net income of the company is subject to
corporation tax, income tax or any similar tax;
	 
	 	(e)	 	a country in which assets of the company (other than securities issued by,
or loans to, related companies) having a substantial value are situated, in which the
company maintains a permanent place of business, or in which a Security Interest
created by the company must or should be registered in order to ensure its validity
or priority; and
	 
	 	(f)	 	a country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would have

7

 

	 	 	 	such jurisdiction if their assistance were requested by the courts of a country
referred to in paragraphs (b) or (c) above;

	 	 	“Pertinent Matter” means:

	 	(a)	 	any transaction or matter contemplated by, arising out of, or connection
with a Pertinent Document; or
	 
	 	(b)	 	any statement relating to a Pertinent Document or to a transaction or
matter falling within paragraph (a),

	 	 	and covers any such transaction, matter or statement, whether entered into, arising or made
at any time before the signing of this Agreement or on or at any time after that signing;

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

	 	 	“Related Company” of a person 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;

	 	 	“Relevant Person” means the Borrower, the Corporate Guarantor, the Approved Manager, any
member of the Group, the Borrower’s Related Companies, any other Security Party and any
other Security Party’s Related Company;

	 	 	“Repayment Date” means a date on which a repayment is required to be made under Clause 7;

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

	 	 	“Secured Liabilities” means all liabilities which the Borrower, the Security Parties or any
of them have, at the date of this Agreement or at any later time or times, under or in
connection with any Finance Document or any judgment relating to any Finance Document; and
for this purpose, there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in connection with, any
bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any
country;

	 	 	“Security Cover Ratio” means the ratio (expressed as a percentage) which is determined, at
any time, by comparing the aggregate of the amounts referred to in paragraphs (a) and (b) of
Clause 14.1 to the Loan;

	 	 	“Security Interest” means:

	 	(a)	 	a mortgage, charge (whether fixed or floating) or pledge, any maritime or
other lien or any other security interest of any kind;
	 
	 	(b)	 	the security rights of a plaintiff under an action in rem; and
	 
	 	(c)	 	any arrangement entered into by a person (A) the effect of which is to
place another person (B) in a position which is similar, in economic terms, to the
position in which B would have been had he held a security interest over an asset

8

 

	 		 	of A; but this paragraph (c) does not apply to a right of set off or combination of
accounts conferred by the standard terms of business of a bank or financial
institution;

	 	 	“Security Party” means the Borrower, the applicable Corporate Guarantor, the Approved
Manager and any other person who, as a surety or mortgagor, as a party to any subordination
or priorities arrangement, or in any similar capacity, executes a document falling within
the last paragraph of the definition of “Finance Documents”;

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

	 	(a)	 	all amounts which have become due for payment by the Borrower or any other
Security Party under the Finance Documents have been paid;
	 
	 	(b)	 	no amount is owing or has accrued (without yet having become due for
payment) under any Finance Document;
	 
	 	(c)	 	neither the Borrower nor any other Security Party has any future or
contingent liability under Clause 19, 20 or 21 or any other provision of this
Agreement or another Finance Document; and
	 
	 	(d)	 	the Lender does not consider that there is a significant risk that any
payment or transaction under a Finance Document would be set aside, or would have to
be reversed or adjusted, in any present or possible future bankruptcy of the Borrower
or a Security Party or in any present or possible future proceeding relating to a
Finance Document or any asset covered (or previously covered) by a Security Interest
created by a Finance Document;

	 	 	“Shares Pledge Option Agreement” means, in relation to the Borrower, an agreement to create
a pledge of all the shares of that Borrower at the option of the Lender, to be executed at
the same time as the Corporate Guarantee to be executed by Newlead in favour of the Lender
by Newlead as shareholder, in such form as the Lender may approve or require;

	 	 	“Ship” means the 2002-built Panamax bulk carrier of approximately 75,966 metric tons
deadweight registered in the ownership of the Borrower under Singapore flag with the name
“GRAND VICTORIA”;

	 	 	“Total Loss” means:

	 	(a)	 	actual, constructive, compromised, agreed or arranged total loss of the
Ship;
	 
	 	(b)	 	any expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than its proper value, a nominal
consideration or without any consideration, which is effected by any government or
official authority or by any person or persons claiming to be or to represent a
government or official authority (excluding a requisition for hire for a fixed period
not exceeding 1 year without any right to an extension) unless it is within 1 month
redelivered to the Borrower’s full control;
	 
	 	(c)	 	any arrest, capture, seizure or detention of the Ship (including any
hijacking or theft) unless it is within 1 month redelivered to the Borrower’s full
control; and

9

 

	 	 	“Total Loss Date” means:

	 	(a)	 	in the case of an actual loss of the Ship, the date on which it occurred
or, if that is unknown, the date when the Ship was last heard of;
	 
	 	(b)	 	in the case of a constructive, compromised, agreed or arranged total loss
of the Ship, the earliest of:

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

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

	1.2	 	Construction of certain terms. In this Agreement:
	 
	 	 	“approved” means, for the purposes of Clause 12, approved in writing by the Lender;
	 
	 	 	“asset” includes every kind of property, asset, interest or right, including any present,
future or contingent right to any revenues or other payment;
	 
	 	 	“company” includes any partnership, joint venture and unincorporated association;
	 
	 	 	“consent” includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration, notarisation and legalisation;
	 
	 	 	“contingent liability” means a liability which is not certain to arise and/or the amount of
which remains unascertained;
	 
	 	 	“document” includes a deed; also a letter, fax or telex;
	 
	 	 	“excess risks” means the proportion of claims for general average, salvage and salvage
charges not recoverable under the hull and machinery policies in respect of the Ship in
consequence of its insured value being less than the value at which the Ship is assessed for
the purpose of such claims;
	 
	 	 	“expense” means any kind of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other tax;
	 
	 	 	“law” includes any order or decree, any form of delegated legislation, any treaty or
international convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its security council;
	 
	 	 	“legal or administrative action” means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;
	 
	 	 	“liability” includes every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or otherwise;
	 
	 	 	“months” shall be construed in accordance with Clause 1.3;
	 
	 	 	“obligatory insurances” means all insurances effected, or which the Borrower is obliged to
effect, under Clause 12 or any other provision of this Agreement or another Finance
Document;
	 
	 	 	“person” includes any company; any state, political sub-division of a state and local or
municipal authority; and any international organisation;

10

 

	 	 	“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or
other document evidencing the contract of insurance or its terms;
	 
	 	 	“protection and indemnity risks” means the usual risks covered by a protection and
indemnity association managed in London, including pollution risks and the proportion (if
any) of any sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation in them of
clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or (with respect to Insurances
commencing on or after 1/11/1995) clause 8 of the Institute Time Clauses (Hulls) (1/11/1995)
or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
	 
	 	 	“regulation” includes any regulation, rule, official directive, request or guideline
whether or not having the force of law of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other authority or
organisation;
	 
	 	 	“successor” includes any person who is entitled (by assignment, novation, merger or
otherwise) to any other person’s rights under this Agreement or any other Finance Document
(or any interest in those rights) or who, as administrator, liquidator or otherwise, in
entitled to exercise those rights; and in particular references to a successor include a
person to whom those rights (or any interest in those rights) are transferred or pass as a
result of a merger, division, reconstruction or other reorganisation of it or any other
person;
	 
	 	 	“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is
imposed by any state, any political sub-division of a state or any local or municipal
authority (including any such imposed in connection with exchange controls), and any
connected penalty, interest or fine; and
	 
	 	 	“war risks” includes the risk of mines and all risks excluded by clause 23 of the Institute
Time Clauses (Hulls)(1/10/83) or (with respect to Insurances commencing on or after
1/11/1995) clause 24 of the Institute Time Clauses (Hulls) (1/11/1995).
	 
	1.3	 	Meaning of “month”. A period of one or more “months” ends on the day in the relevant
calendar month numerically corresponding to the day of the calendar month on which the period
started (“the numerically corresponding day”), but:
	 
	(a)	 	on the Business Day following the numerically corresponding day if the numerically
corresponding day is not a Business Day or, if there is no later Business Day in the same
calendar month, on the Business Day preceding the numerically corresponding day; or
	 
	(b)	 	on the last Business Day in the relevant calendar month, if the period started on the last
Business Day in a calendar month or if the last calendar month of the period has no
numerically corresponding day,

and “month” and “monthly” shall be construed accordingly.
	 
	1.4	 	General Interpretation. In this Agreement:
	 
	(a)	 	references in Clause 1.1 to a Finance Document or any other document being in the form of a
particular appendix include references to that form with any modifications to that form which
the Lender approves or reasonably requires;
	 
	(b)	 	references to, or to a provision of, a Finance Document or any other document are references
to it as amended or supplemented, whether before the date of this Agreement or otherwise;

11

 

	(c)	 	references to, or to a provision of, any law include any amendment, extension, re-enactment
or replacement, whether made before the date of this Agreement or otherwise;
	 
	(d)	 	words denoting the singular number shall include the plural and vice versa; and
	 
	(e)	 	Clauses 1.1 to 1.5 apply unless the contrary intention appears.
	 
	1.5	 	Headings. In interpreting a Finance Document or any provision of a Finance Document, all
clause, sub-clause and other headings in that and any other Finance Document shall be entirely
disregarded.
	 
	2	 	FACILITY
	 
	2.1	 	Amount of facility. Subject to the other provisions of this Agreement the Lender shall make
available to the Borrower a loan facility of up to the lesser of (i) $27,500,000 and (ii) 100
per cent of the Initial Market Value of the Ship in a single amount.
	 
	2.2	 	Purpose of Loan. The Borrower undertakes with the Lender to use the Loan only for the
purpose stated in the preamble to this Agreement.
	 
	3	 	DRAWDOWN
	 
	3.1	 	Request for Loan. Subject to the following conditions, the Borrower may request the Loan to
be advanced by ensuring that the Lender receives a completed Drawdown Notice not later than
11.00 a.m. (Athens time) 3 Business Days prior to the intended Drawdown Date or as agreed
between the Borrower and the Lender.
	 
	3.2	 	Availability. The conditions referred to in Clause 3.1 are that:
	 
	(a)	 	the Drawdown Date has to be a Business Day during the Availability Period;
	 
	(b)	 	the amount of the Loan shall not exceed the lesser of (i) $27,500,000 and (ii) 100 per cent.
of the Initial Market Value of the Ship;
	 
	(c)	 	the Loan shall be made available in a single amount and any undrawn amount on the Drawdown
Date shall be cancelled and may not be borrowed by the Borrower at a later date.
	 
	3.3	 	Drawdown Notice irrevocable. A Drawdown Notice must be signed by an authorised person of the
Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of
the Lender.
	 
	3.4	 	Disbursement of Loan. Subject to the terms of this Agreement, the Lender shall on the
Drawdown Date make available the Loan to the Borrower by paying the proceeds thereof to the
account which the Borrower specifies in the Drawdown Notice (or in such other manner as the
Lender may require), and the Borrower hereby unconditionally and irrevocably authorises the
Lender to make such payment on its behalf.
	 
	3.5	 	Disbursement of Loan to third party. The payment by the Lender under Clause 3.4 shall
constitute the advance of the Loan and the Borrower shall at that time become indebted, as
principal and direct obligor, to the Lender in an amount equal to the Loan.
	 
	4	 	INTEREST
	 
	4.1	 	Payment of normal interest. Subject to the provisions of this Agreement, interest on the
Loan, in respect of each Interest Period shall be paid by the Borrower on the last day of that
Interest Period.

12

 

	4.2	 	Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest
on the Loan in respect of an Interest Period shall be the aggregate of (a) the applicable
Margin, (b) LIBOR and (c) the Mandatory Cost (if any) for that Interest Period.
	 
	4.3	 	Payment of accrued interest. In the case of an Interest Period longer than 3 months, accrued
interest shall be paid every 3 months during that Interest Period and on the last day of that
Interest Period.
	 
	4.4	 	Notification of market disruption. The Lender shall promptly notify the Borrower if no rate
is quoted on Reuters BBA Page LIBOR 01 or if for any reason the Lender is unable to obtain
Dollars in the London Interbank Market in order to fund the Loan (or any part of it) during
any Interest Period, stating the circumstances which have caused such notice to be given.
	 
	4.5	 	Suspension of drawdown. If the Lender’s notice under Clause 4.4 is served before the Loan is
advanced, the Lender’s obligation to advance the Loan shall be suspended while the
circumstances referred to in the Lender’s notice continue.
	 
	4.6	 	Negotiation of alternative rate of interest. If the Lender’s notice under Clause 4.4 is
served after the Loan is advanced, the Borrower and the Lender shall use reasonable endeavours
to agree, within the 30 days after the date on which the Lender serves its notice under
Clause 4.4 (the “Negotiation Period”), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund the Loan during the Interest
Period concerned.
	 
	4.7	 	Application of agreed alternative rate of interest. Any alternative interest rate or an
alternative basis which is agreed during the Negotiation Period shall take effect in
accordance with the terms agreed.
	 
	4.8	 	Alternative rate of interest in absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the relevant circumstances
are continuing at the end of the Negotiation Period, then the Lender shall set an interest
period and interest rate representing the cost of funding of the Lender in Dollars or in any
available currency of the Loan plus the applicable Margin and the Mandatory Cost (if any); and
the procedure provided for by this Clause 4.8 shall be repeated if the relevant circumstances
are continuing at the end of the interest period so set by the Lender.
	 
	4.9	 	Notice of prepayment. If the Borrower does not agree with an interest rate set by the Lender
under Clause 4.8, the Borrower may give the Lender not less than 10 Business Days’ notice of
its intention to prepay at the end of the interest period set by the Lender.
	 
	4.10	 	Prepayment. A notice under Clause 4.9 shall be irrevocable; and on the last Business Day of
the interest period set by the Lender, the Borrower shall prepay (without premium or penalty)
the Loan, together with accrued interest thereon at the applicable rate plus the applicable
Margin and the Mandatory Cost (if any).
	 
	4.11	 	Application of prepayment. The provisions of Clause 7 shall apply in relation to the
prepayment.
	 
	4.12	 	Calculation of Security Cover Ratio. The Lender shall calculate the Security Cover Ratio on
the Drawdown Date, on 30 June 2010 and every 3 months thereafter or any other date as may be
agreed between the Lender and the Borrower (each a “Review Date”) and shall advise the
Borrower in writing, within 10 Business Days of each Review Date, of the applicable Margin
which will apply until the date falling one day prior to the next Review Date Provided that
in respect of each Review Date other than the first Review Date, the Lender shall only be
obliged to advise the Borrower of the applicable Margin which will apply for the Interest
Period commencing on the relevant Review Date if that

13

 

	 	 	Margin will be different to the Margin which applied immediately prior to the relevant
Review Date.
	 
	 	 	For the purposes of calculating the Security Cover Ratio pursuant to this Clause 4.12, the
Market Value of the Ship shall be determined no more than 14 days prior to the relevant
Review Date.
	 
	5	 	INTEREST PERIODS
	 
	5.1	 	Commencement of Interest Periods. The first Interest Period shall commence on the Drawdown
Date and each subsequent Interest Period shall commence on the expiry of the preceding
Interest Period.
	 
	5.2	 	Duration of normal Interest Periods. Subject to Clauses 5.3 and 5.4, each Interest Period
shall be:
	 
	(a)	 	3, 6 or 9 months as notified by the Borrower to the Lender not later than 11.00 a.m. (Athens
time) 3 Business Days before the commencement of the Interest Period; or
	 
	(b)	 	3 months, if the Borrower fails to notify the Lender by the time specified in paragraph (a);
or
	 
	(c)	 	such other period as the Lender may agree with the Borrower.
	 
	5.3	 	Duration of Interest Periods for repayment instalments. In respect of an amount due to be
repaid under Clause 7 on a particular Repayment Date, an Interest Period shall end on that
Repayment Date.
	 
	5.4	 	Non-availability of matching deposits for Interest Period selected. If, after the Borrower
has selected and the Lender has agreed an Interest Period longer than 3 months, the Lender
notifies the Borrower by 11.00 a.m. (Athens time) on the third Business Day before the
commencement of the Interest Period that it is not satisfied that deposits in Dollars for a
period equal to the Interest Period will be available to it in the London Interbank Market
when the Interest Period commences, the Interest Period shall be of 3 months duration.
	 
	6	 	DEFAULT INTEREST
	 
	6.1	 	Payment of default interest on overdue amounts. The Borrower shall pay interest in
accordance with the following provisions of this Clause 6 on any amount payable by the
Borrower under any Finance Document which the Lender, or other designated payee does not
receive on or before the relevant date, that is:
	 
	(a)	 	the date on which the Finance Documents provide that such amount is due for payment; or
	 
	(b)	 	if a Finance Document provides that such amount is payable on demand, the date on which the
demand is served; or
	 
	(c)	 	if such amount has become immediately due and payable under Clause 18.4, the date on which it
became immediately due and payable.
	 
	6.2	 	Default rate of interest. Interest shall accrue on an overdue amount from (and including)
the relevant date until the date of actual payment (as well after as before judgment) at the
rate per annum determined by the Lender to be 2 per cent. above:
	 
	(a)	 	in the case of an overdue amount of principal, the higher of the rates set out at paragraphs
(a) and (b) of Clause 6.3; or

14

 

	(b)	 	in the case of any other overdue amount, the rate set out at paragraph (b) of Clause 6.3.
	 
	6.3	 	Calculation of default rate of interest. The rates referred to in Clause 6.2 are:
	 
	(a)	 	the rate applicable to the overdue principal amount immediately prior to the relevant date
(but only for any unexpired part of any then current Interest Period);
	 
	(b)	 	the aggregate of the Mandatory Cost (if any) and the applicable Margin plus, in respect of
successive periods of any duration (including at call) up to 3 months which the Lender may
select from time to time:

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

	6.4	 	Notification of interest periods and default rates. The Lender shall promptly notify the
Borrower of each interest rate determined by the Lender under Clause 6.3 and of each period
selected by the Lender for the purposes of paragraph (b) of that Clause; but this shall not be
taken to imply that the Borrower is liable to pay such interest only with effect from the date
of the Lender’s notification.
	 
	6.5	 	Payment of accrued default interest. Subject to the other provisions of this Agreement, any
interest due under this Clause shall be paid on the last day of the period by reference to
which it was determined; and the payment shall be made to the Lender for the account if the
Lender to which the overdue amount is due.
	 
	6.6	 	Compounding of default interest. Any such interest which is not paid at the end of the
period by reference to which it was determined shall thereupon be compounded.
	 
	7	 	REPAYMENT AND PREPAYMENT
	 
	7.1	 	The Borrower shall repay the Loan:
	 
	(a)	 	by 36 consecutive 3-monthly repayment instalments:

	 	(i)	 	subject to Clause 7.7(b), in the case of the first to the twentieth instalments
(inclusive), in the amount of $375,000 each;
	 
	 	(ii)	 	in the case of the twenty-first to the thirty-sixth instalments (inclusive), in
the amount of $475,000 each; and

	(b)	 	subject to Clause 7.11, a balloon instalment of $12,400,000 (the “Balloon Instalment”)
payable together with the thirty-sixth repayment instalment,
	 
	 	 	Provided that if the principal amount of the Loan drawdown by the Borrower is less than
$27,500,000 each repayment instalment and the Balloon Instalment shall be reduced pro rata
by an amount in aggregate equal to such undrawn amount.
	 
	7.2	 	Repayment Dates. The first repayment instalment in respect of the Loan shall be repaid on
the date falling 3 months after the Drawdown Date and each subsequent repayment instalment
shall be repaid at 3-monthly intervals thereafter and the last repayment instalment, together
with the Balloon Instalment, shall be repaid on the earlier of (a) the date falling on the
ninth anniversary of the Drawdown Date and (b) 31 January 2019.

15

 

	7.3	 	Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to
the Lender for the account of the Lender all other sums then accrued or owing under any
Finance Document.
	 
	7.4	 	Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole
or any part of the Loan on the last day of an Interest Period without penalty or premium
pursuant to Clause 7.8.
	 
	7.5	 	Conditions for voluntary prepayment. The conditions referred to in Clause 7.4 are that:
	 
	(a)	 	a partial prepayment shall be $1,000,000 or a multiple thereof or any other amount mutually
agreed between the Borrower and the Lender;
	 
	(b)	 	the Lender has received from the Borrower at least 5 Business Days’ prior written notice
specifying the amount to be prepaid and the date on which the prepayment is to be made;
	 
	(c)	 	the Borrower has provided evidence satisfactory to the Lender that any consent required by
the Borrower or any other Security Party in connection with the prepayment has been obtained
and remains in force, and that any regulation relevant to this Agreement which affects the
Borrower or any other Security Party has been complied with.
	 
	7.6	 	Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without
the consent of the Lender and the amount specified in the prepayment notice shall become due
and payable by the Borrower on the date for prepayment specified in the prepayment notice.
	 
	7.7	 	Mandatory prepayment. The Borrower shall be obliged to prepay:
	 
	(a)	 	the whole of the Loan:

	 	(i)	 	if the Ship is sold, on or before the date on which the sale is completed by
delivery of the Ship to the buyer; or
	 
	 	(ii)	 	if the Ship becomes a Total Loss, on the earlier of the date falling 150 days
after the Total Loss Date and the date of receipt by the Lender of the proceeds of
insurance relating to such Total Loss; and

	(b)	 	30 Business Days of the Lender’s demand, an amount of the Loan required to ensure that the
Security Cover Ratio is at least equal to 125 per cent. if the Lender determines that the
Security Cover Ratio as at 31 December 2012 is less than 125 per cent.
	 
	7.8	 	Amounts payable on prepayment. A prepayment shall be made together with accrued interest
(and any other amount payable under Clause 20 or otherwise) in respect of the amount prepaid
and, if the prepayment is not made on the last day of an Interest Period together with any
sums payable under Clause 20.1(b) but without premium or penalty.
	 
	7.9	 	Application of partial prepayment. Each partial prepayment shall be applied pro-rata against
the then outstanding repayment instalments referred to in Clause 7.1 and the Balloon
Instalment.
	 
	7.10	 	No reborrowing. No amount prepaid may be reborrowed.
	 
	7.11	 	Prepayment out of Excess Earnings. If on 31 March, 30 June, 30 September and 31 December in
each calendar year during the Security Period (each an “Excess Cash Calculation Date”), with
the first such 3-month period commencing on 1 April 2010, the Lender determines (on the basis
of the individual accounts as provided under Clause

16

 

	 	 	10.6(c)) that the aggregate of the daily Earnings of the Ship for such 3-month period
exceeds the aggregate of:
	 
	(a)	 	the expenditure necessarily incurred during such 3-month period by the Borrower in operating,
insuring, maintaining, repairing and generally trading the Ship (but excluding any exceptional
and extraordinary expenses);
	 
	(b)	 	sums paid by the Borrower in respect of principal on, and interest in respect of, the Loan
pursuant to this Agreement during such 3-month period;
	 
	(c)	 	general and administrative expenditure properly and reasonably incurred by the Borrower
during such 3-month period; and
	 
	(d)	 	7.6/145ths of the interest payable during such 3-month period pursuant to the Bond
(subject to such interest payments not exceeding $500,000 per annum for the purposes of this
Clause 7.11(d)),
	 
	 	 	then the Borrower shall within 75 days of the relevant Excess Cash Calculation Date, pay to
the Lender an amount equal to the Relevant Percentage of such excess which amount shall be
applied by the Lender against the Balloon Instalment (and the Borrower hereby irrevocably
authorises the Lender to make such application),
	 
	 	 	Provided that the Borrower’s obligations under this Clause 7.11 shall cease when the
Balloon Instalment has been reduced to $6,000,000.
	 
	 	 	In this Clause 7.11, “Relevant Percentage” means:

	 	(i)	 	if, on the relevant Excess Cash Calculation Date, the Borrower is in compliance
with Clause 14.1, 50 per cent.; and
	 
	 	(ii)	 	if, on the relevant Excess Cash Calculation Date, the Borrower is not in
compliance with Clause 14.1, 100 per cent.

	8	 	CONDITIONS PRECEDENT
	 
	8.1	 	Documents, fees and no default. The Lender’s obligation to advance the Loan is subject to
the following conditions precedent:
	 
	(a)	 	that, on or before service of the Drawdown Notice, the Lender receives the documents
described in Part A of Schedule 2 in form and substance satisfactory to it and its lawyers;
	 
	(b)	 	that, on or before the Drawdown Date, the Lender receives the documents described in Part B
of Schedule 2 in a form and substance satisfactory to it and its lawyers;
	 
	(c)	 	that, on or before service of the Drawdown Notice, the Lender has received the first
instalment of the restructuring fee referred to in Clause 19.1(a);
	 
	(d)	 	that both at the date of the Drawdown Notice and at the Drawdown Date:

	 	(i)	 	no Event of Default has occurred and is continuing or would result from the
borrowing of the Loan;
	 
	 	(ii)	 	the representations and warranties in Clause 9.1 and those of the Borrower or
any other Security Party which are set out in the other Finance Documents would be true
and not misleading if repeated on each of those dates with reference to the
circumstances then existing;

17

 

	 	(iii)	 	none of the circumstances contemplated by Clause 4.4 has occurred and is
continuing; and
	 
	 	(iv)	 	there has been no material adverse change in the financial position, state of
affairs or prospects of the Borrower or any other Security Party in the light of which
the Lender considers that there is a significant risk that the Borrower or any other
Security Party will later become, unable to discharge its liabilities under the Finance
Documents to which it is a party as they fall due; and

	(e)	 	that, if the ratio set out in Clause 14.1 were applied immediately following the advance of
the Loan, the Borrower would not be obliged to provide additional security or prepay part of
the Loan under that Clause; and
	 
	(f)	 	that the Lender has received, and found to be acceptable to it, any further opinions,
consents, agreements and documents in connection with the Finance Documents which the Lender
may request by notice to the Borrower prior to the Drawdown Date.
	 
	8.2	 	Waivers of conditions precedent. If the Lender, at its discretion, permits the Loan to be
borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the
Borrower shall ensure that those conditions are satisfied within 5 Business Days after the
Drawdown Date (or such longer period as the Lender may specify).
	 
	9	 	REPRESENTATIONS AND WARRANTIES
	 
	9.1	 	General. The Borrower represents and warrants to the Lender as follows.
	 
	9.2	 	Status. The Borrower is duly incorporated and validly existing and in good standing under
the laws of Singapore.
	 
	9.3	 	Share capital and ownership. The Borrower has an authorised share capital of $50,000 divided
into 50,000 ordinary shares of $1 each, all of which shares have been issued and the legal
title and beneficial ownership of all those shares is held free of any Security Interest or
other claim by the applicable Corporate Guarantor.
	 
	9.4	 	Corporate power. The Borrower has the corporate capacity, and has taken all corporate action
and obtained all consents necessary for it:
	 
	(a)	 	to register the Ship in its name under the Singapore flag;
	 
	(b)	 	to execute the Finance Documents to which the Borrower is a party; and
	 
	(c)	 	to borrow under this Agreement, and to make all the payments contemplated by, and to comply
with this Agreement and the other Finance Documents to which the Borrower is a party.
	 
	9.5	 	Consents in force. All the consents referred to in Clause 9.4 remain in force and nothing
has occurred which makes any of them liable to revocation.
	 
	9.6	 	Legal validity; effective Security Interests. The Finance Documents to which the Borrower is
a party, do now or, as the case may be, will, upon execution and delivery (and, where
applicable, registration as provided for in the Finance Documents):
	 
	(a)	 	constitute the Borrower’s legal, valid and binding obligations enforceable against the
Borrower in accordance with their respective terms; and
	 
	(b)	 	create legal, valid and binding Security Interests enforceable in accordance with their
respective terms over all the assets to which they, by their terms, relate,

18

 

	 	 	subject to any relevant insolvency laws affecting creditors’ rights generally.
	 
	9.7	 	No third party Security Interests. Without limiting the generality of Clause 9.6, at the
time of the execution and delivery of each Finance Document:
	 
	(a)	 	the Borrower will have the right to create all the Security Interests which that Finance
Document purports to create; and
	 
	(b)	 	no third party will have any Security Interest or any other interest, right or claim over, in
or in relation to any asset to which any such Security Interest, by its terms, relates.
	 
	9.8	 	No conflicts. The execution by the Borrower of each Finance Document and the borrowing by
the Borrower of the Loan, and the Borrower’s compliance with each Finance Document will not
involve or lead to a contravention of:
	 
	(a)	 	any law or regulation; or
	 
	(b)	 	the constitutional documents of the Borrower; or
	 
	(c)	 	any contractual or other obligation or restriction which is binding on the Borrower or any of
its assets.
	 
	9.9	 	No withholding taxes. All payments which the Borrower is liable to make under the Finance
Documents may be made without deduction or withholding for or on account of any tax payable
under any law of any Pertinent Jurisdiction.
	 
	9.10	 	No default. No Event of Default has occurred and is continuing.
	 
	9.11	 	Information. All information which has been provided in writing by or on behalf of the
Borrower or any other Security Party to the Lender in connection with any Finance Document
satisfied the requirements of Clause 10.5; all accounts which have been so provided satisfied
the requirements of Clause 10.7; and there has been no material adverse change in the
financial position or state of affairs of either the Borrower or the Approved Manager or any
member of the Group which may (in the opinion of the Lender) affect the ability of the
Borrower or any other Security Party to comply with the terms of and/or perform its
obligations under this Agreement and the Financial Documents.
	 
	9.12	 	No litigation. No legal or administrative action involving the Borrower (including, without
limitation, any action relating to any alleged or actual breach of the ISM Code and the ISPS
Code) has been commenced or taken or, to the Borrower’s knowledge, is likely to be commenced
or taken which, in either case, would be likely to have a material adverse effect on the
Borrower’s financial position or profitability.
	 
	9.13	 	No liabilities. As at the date of the Deed of Novation, Amendment and Restatement, to the
Borrower’s knowledge, there are no existing or potential liabilities of the Borrower other
than those already disclosed to the Lender in writing.
	 
	9.14	 	Compliance with certain undertakings. At the date of this Agreement, the Borrower is in
compliance with Clauses 10.2, 10.4, 10.9 and 10.13.
	 
	9.15	 	Taxes paid. The Borrower has paid all taxes applicable to, or imposed on or in relation to
the Borrower, its business or the Ship.
	 
	9.16	 	No money laundering. Without prejudice to the generality of Clause 2.2, in relation to the
borrowing by the Borrower of the Loan, the performance and discharge of its obligations and
liabilities under the Finance Documents, and the transactions and other arrangements effected
or contemplated by the Finance Documents to which the Borrower is a party, the Borrower
confirms (i) that it is acting for its own account, (ii) that it will

19

 

	 	 	use the proceeds of the Loan for its own
benefit, under its full responsibility and
exclusively for the purposes specified in
this Agreement and (iii) that the foregoing
will not involve or lead to contravention of
any law, official requirement or other
regulatory measure or procedure implemented
to combat “money laundering” (as defined in
Article 1 of the Directive (91/308/EEC) of
the Council of the European Communities).
	 
	10	 	GENERAL UNDERTAKINGS
	 
	10.1	 	General. The Borrower undertakes with the Lender to comply with the following provisions of
this Clause 10 at all times during the Security Period, except as the Lender may otherwise
permit.
	 
	10.2	 	Title; negative pledge and pari passu ranking. The Borrower will:
	 
	(a)	 	hold the legal title to, and own the entire beneficial interest in the Ship, the Insurances
and Earnings, free from all Security Interests and other interests and rights of every kind,
except for those created by the Finance Documents and the effect of assignments contained in
the Finance Document;
	 
	(b)	 	not create or permit to arise any Security Interest over any other asset, present or future;
and
	 
	(c)	 	procure that its liabilities under the Finance Documents to which it is party do and will
rank at least pari passu with all other present and future insecured liabilities, except for
Liabilities which are mandatorily preferred by law.
	 
	10.3	 	No disposal of assets. The Borrower will not transfer, lease or otherwise dispose of:
	 
	(a)	 	all or a substantial part of its assets, whether by one transaction or a number of
transactions, whether related or not; or
	 
	(b)	 	any debt payable to it or any other right (present, future or contingent right) to receive a
payment, including any right to damages or compensation.
	 
	10.4	 	No other liabilities or obligations to be incurred. The Borrower will not incur any
liability or obligation except liabilities and obligations under the Finance Documents to
which it is a party and liabilities or obligations reasonably incurred in the ordinary course
of operating and chartering the Ship.
	 
	10.5	 	Information provided to be accurate. All financial and other information which is provided
in writing by or on behalf of the Borrower and/or any other member of the Group under or in
connection with any Finance Document will be true and not misleading and will not omit any
material fact or consideration.
	 
	10.6	 	Provision of financial statements. The Borrower will send to the Lender or, as the case may
be, procure there are sent to the Lender:
	 
	(a)	 	as soon as possible, but in no event later than 180 days after the end of each financial year
of the applicable Corporate Guarantor and the Borrower, the audited consolidated accounts of
the Group and the audited individual accounts of the Borrower;
	 
	(b)	 	as soon as possible, but in no event later than 90 days after the end of each 6-month period
in each financial year of the applicable Corporate Guarantor ending on 30 June and 31
December, the unaudited consolidated accounts of the Group certified as to their correctness
by the chief financial officer of the applicable Corporate Guarantor;
	 
	(c)	 	as soon as possible, but in no event later than 60 days after the end of each 3-month period
in each financial year of the Borrower (ending on 31 March, 30 June, 30

20

 

	 	 	September and 31 December), the unaudited individual accounts of the Borrower certified as
to their correctness by the chief financial officer of the Borrower; and
	 
	(d)	 	as soon as possible, but in no event later than 31 December in each year, a budget in a
format approved by the Lender which shows all anticipated income and expenditure of the Ship
during the next financial year of the Borrower.
	 
	10.7	 	Form of financial statements. All accounts delivered under Clause 10.6 will:
	 
	(a)	 	be prepared in accordance with all applicable laws and generally accepted accounting
principles consistently applied;
	 
	(b)	 	give a true and fair view of the state of affairs of the Borrower or, as the case may be, the
Group at the date of those financial statements and of their profit for the period to which
those accounts relate; and
	 
	(c)	 	fully disclose or provide for all significant liabilities of the Borrower or, as the case may
be, the Group.
	 
	10.8	 	Shareholder and creditor notices. In case of an Event of Default, the Borrower will send the
Lender, at the same time as they are despatched, copies of all communications which are
despatched to the Borrower’s shareholders or creditors or any class of them.
	 
	10.9	 	Consents. The Borrower will maintain in force and promptly obtain or renew, and will
promptly send certified copies to the Lender of, all consents required:
	 
	(a)	 	for the Borrower to perform its obligations under any Finance Document;
	 
	(b)	 	for the validity or enforceability of any Finance Document; and
	 
	(c)	 	for the Borrower to own and operate the Ship,

and the Borrower will comply with the terms of all such consents.

	 
	10.10	 	Maintenance of Security Interests. The Borrower will:
	 
	(a)	 	at its own cost, do all that it reasonably can to ensure that any Finance Document validly
creates the obligations and the Security Interests which it purports to create; and
	 
	(b)	 	without limiting the generality of paragraph (a), at its own cost, promptly register, file,
record or enrol any Finance Document with any court or authority in all Pertinent
Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in
respect of any Finance Document, give any notice or take any other step which may be or become
necessary or desirable for any Finance Document to be valid, enforceable or admissible in
evidence or to ensure or protect the priority of any Security Interest which it creates.
	 
	10.11	 	Notification of litigation. The Borrower will provide the Lender with details of any legal
or administrative action involving the Borrower, any other Security Party, or the Ship, the
Earnings or the Insurances as soon as such action is instituted or it becomes apparent to the
Borrower that it is likely to be instituted, unless it is clear that the legal or
administrative action cannot be considered material in the context of any Finance Document.
	 
	10.12	 	Principal place of business. The Borrower will maintain its place of business, and keep its
corporate documents and records, at the address stated at Clause 27.2(a); and will not
establish, or do anything as a result of which it would be deemed to have a place of business
in any other country other than Singapore or Greece.

21

 

	10.13	 	Confirmation of no default. The Borrower will, within 3 Business Days after service by the
Lender of a written request, serve on the Lender a notice which is signed by 2 directors of
the Borrower and which:
	 
	(a)	 	states that no Event of Default has occurred; or
	 
	(b)	 	states that no Event of Default has occurred, except for a specified event or matter, of
which all material details are given.
	 
	10.14	 	Notification of default. The Borrower will notify the Lender as soon as it becomes aware
of:
	 
	(a)	 	the occurrence of an Event of Default; or
	 
	(b)	 	any matter which indicates that an Event of Default may have occurred,
	 
	 	 	and will keep the Lender fully up-to-date with all developments.
	 
	10.15	 	Ownership. Subject to Clause 10.19, the Borrower shall procure that there is no change in
the legal or beneficial ownership of the shares in the Borrower throughout the Security
Period, or any change in the management of the Borrower.
	 
	10.16	 	Provision of further information. The Borrower will, as soon as practicable after receiving
the request, provide the Lender with any additional financial or other information relating
to:
	 
	(a)	 	the Borrower, the Ship, the Earnings or the Insurances; or
	 
	(b)	 	any other matter relevant to, or to any provision of, a Finance Document; and
	 
	(c)	 	which may be requested by the Lender at any time.
	 
	10.17	 	ISM Code and ISPS Code compliance. The Borrower will ensure that all requirements of the
ISM Code and the ISPS Code as they relate to the Borrower, the Approved Manager and the Ship
have been complied with.
	 
	10.18	 	Provision of “know your customer” information. The Borrower will, as soon as practicable
after receiving a request from the Lender, provide the Lender with any information required by
it in relation to its “know your customer” regulations.
	 
	10.19	 	Replacement of Corporate Guarantor. The Borrower shall procure that on or before 30 April
2010 Newlead will replace Grandunion as Corporate Guarantor and will execute a Corporate
Guarantee in substitution for the Corporate Guarantee from Grandunion subject to Newlead or,
as the case may be, the Borrower providing the Lender with evidence satisfactory to it that
all shares in the Borrower have been transferred by Grandunion to Newlead by no later than the
date of the Corporate Guarantee to be executed by Newlead.
	 
	11	 	CORPORATE UNDERTAKINGS
	 
	11.1	 	General. The Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 11 at all times during the Security Period except as the Lender may
otherwise permit.
	 
	11.2	 	Maintenance of status. The Borrower will maintain its separate corporate existence and
remain in good standing under the laws of Singapore.
	 
	11.3	 	Negative undertakings. The Borrower will not:

22

 

	(a)	 	carry on any business other than the ownership, chartering and operation of the Ship; or
	 
	(b)	 	pay any dividend or make any other form of distribution or effect any form of redemption,
purchase or return of share capital Provided that the Borrower may pay a dividend or make any
other form of distribution with the prior written consent of the Lender and if at that time an
Event of Default has not occurred or will result from the payment of such dividend or the
making of such other form of distribution; or
	 
	(c)	 	provide any form of credit or financial assistance to:

	 	(i)	 	a person who is directly or indirectly interested in the Borrower’s share or
loan capital; or
	 
	 	(ii)	 	any company in or with which such a person is directly or indirectly interested
or connected;
	 
	 	(iii)	 	or enter into any transaction with or involving such a person or company on
terms which are, in any respect, less favourable to the Borrower than those which it
could obtain in a bargain made at arms’ length;

	(d)	 	open or maintain any account with any bank or financial institution other than the Lender for
the purposes of the Finance Documents;
	 
	(e)	 	issue, allot or grant any person a right to any shares in its capital or repurchase or reduce
its issued share capital;
	 
	(f)	 	acquire any shares or other securities other than US or UK Treasury bills and certificates of
deposit issued by major North American or European banks, or enter into any transaction in a
derivative; or
	 
	(g)	 	enter into any form of amalgamation, merger or de-merger or any form of reconstruction or
reorganisation.
	 
	11.4	 	Minimum Liquidity. The Borrower shall ensure that at all times during the Security Period,
an amount of at least $250,000 is standing to the credit of the Holding Account.
	 
	12	 	INSURANCE
	 
	12.1	 	General. The Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 12 at all times during the Security Period except as the Lender may
otherwise permit.
	 
	12.2	 	Maintenance of obligatory insurances. The Borrower shall keep the Ship insured at its
expense against:
	 
	(a)	 	fire and usual marine risks (including hull and machinery, loss of hire and excess risks);
	 
	(b)	 	war risks;
	 
	(c)	 	protection and indemnity risks; and
	 
	(d)	 	any other risks against which the Lender considers, having regard to practices and other
circumstances prevailing at the relevant time, it would in the opinion of the Lender be
reasonable for the Borrower to insure and which are specified by the Lender by notice to the
Borrower.

23

 

	12.3	 	Terms of obligatory insurances. The Borrower shall effect such insurances:
	 
	(a)	 	in Dollars;
	 
	(b)	 	in the case of fire and usual marine risks and war risks, in an amount on an agreed value
basis of at least the greater of (i) an amount equal to 110 per cent. of the Loan and (ii) the
Market Value of the Ship; and
	 
	(c)	 	in the case of oil pollution liability risks, for an aggregate amount equal to the highest
level of cover from time to time available under basic protection and indemnity club entry and
in the international marine insurance market (currently $1,000,000,000);
	 
	(d)	 	in relation to protection and indemnity risks, in respect of the full tonnage of the Ship
owned by it;
	 
	(e)	 	on approved terms; and
	 
	(f)	 	through approved brokers and with approved insurance companies and/or underwriters or, in the
case of war risks and protection and indemnity risks, in approved war risks and protection and
indemnity risks associations.
	 
	12.4	 	Further protections for the Lender. In addition to the terms set out in Clause 12.3, the
Borrower shall procure that the obligatory insurances shall:
	 
	(a)	 	whenever the Lender requires name (or be amended to name) the Lender as additional named
assured for its rights and interests, warranted no operational interest and with full waiver
of rights of subrogation against the Lender, but without the Lender thereby being liable to
pay (but having the right to pay) premiums, calls or other assessments in respect of such
insurance;
	 
	(b)	 	name the Lender as loss payee with such directions for payment as the Lender may specify;
	 
	(c)	 	provide that all payments by or on behalf of the insurers under the obligatory insurances to
the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;
	 
	(d)	 	provide that the insurers shall waive, to the fullest extent permitted by English law, their
entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated
to the rights and remedies of the Lender in respect of any rights or interests (secured or
not) held by or available to the Lender in respect of the Secured Liabilities, until the
Secured Liabilities shall have been fully repaid and discharged, except that the insurers
shall not be restricted by the terms of this paragraph (d) from making personal claims against
persons (other than the Borrower or the Lender) in circumstances where the insurers have fully
discharged their liabilities and obligations under the relevant obligatory insurances;
	 
	(e)	 	provide that such obligatory insurances shall be primary without right of contribution from
other insurances which may be carried by the Lender;
	 
	(f)	 	provide that the Lender may make proof of loss if the Borrower fails to do so;
	 
	(g)	 	provide that if any obligatory insurance is cancelled, or if any substantial change is made
in the coverage which adversely affects the interest of the Lender, or if any obligatory
insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse
shall not be effective with respect to the Lender for 30 days (or 7 days in the case of war
risks) after receipt by the Lender of prior written notice from the insurers of such
cancellation, change or lapse.

24

 

	12.5	 	Renewal of obligatory insurances. The Borrower shall:
	 
	(a)	 	at least 21 days before the expiry of any obligatory insurance:

	 	(i)	 	notify the Lender of the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom the Borrower proposes to renew
that obligatory insurance and of the proposed terms of renewal; and
	 
	 	(ii)	 	obtain the Lender’s approval to the matters referred to in paragraph (i);

	(b)	 	at least 14 days before the expiry of any obligatory insurance, renew that obligatory
insurance in accordance with the Lender’s approval pursuant to paragraph (a); and
	 
	(c)	 	procure that the approved brokers and/or the war risks and protection and indemnity
associations with which such a renewal is effected shall promptly after the renewal notify the
Lender in writing of the terms and conditions of the renewal.
	 
	12.6	 	Copies of policies; letters of undertaking. The Borrower shall ensure that all approved
brokers provide the Lender with pro forma copies of all policies relating to the obligatory
insurances which they are to effect or renew and of a letter or letters or undertaking in a
form required by the Lender and including undertakings by the approved brokers that:
	 
	(a)	 	they will have endorsed on each policy, immediately upon issue, a loss payable clause and a
notice of assignment complying with the provisions of Clause 12.4;
	 
	(b)	 	they will hold such policies, and the benefit of such insurances, to the order of the Lender
in accordance with the said loss payable clause;
	 
	(c)	 	they will advise the Lender immediately of any material change to the terms of the obligatory
insurances;
	 
	(d)	 	they will notify the Lender in writing, not less than 14 days before the expiry of the
obligatory insurances, in the event of their not having received notice of renewal
instructions from the Borrower or its agents and, in the event of their receiving instructions
to renew, they will promptly notify the Lender of the terms of the instructions; and
	 
	(e)	 	they will not set off against any sum recoverable in respect of a claim relating to the Ship
under such obligatory insurances any premiums or other amounts due to them or any other person
whether in respect of the Ship or otherwise, they waive any lien on the policies (including,
without limitation, any fleet lien), or any sums received under them, which they might have in
respect of such premiums or other amounts, and they will not cancel such obligatory insurances
by reason of non-payment of such premiums or other amounts, and will arrange for a separate
policy to be issued in respect of the Ship forthwith upon being so requested by the Lender.
	 
	12.7	 	Copies of certificates of entry. The Borrower shall ensure that any protection and indemnity
and/or war risks associations in which the Ship is entered provides the Lender with:
	 
	(a)	 	a certified copy of the certificate of entry for the Ship;
	 
	(b)	 	a letter or letters of undertaking in such form as may be required by the Lender;
	 
	(c)	 	where required to be issued under the terms of insurance/indemnity provided by the Borrower’s
protection and indemnity association, a certified copy of each United States of America voyage
quarterly declaration (or other similar document or documents) made by

25

 

	 	 	the Borrower in relation to the Ship in accordance with the requirements of such protection
and indemnity association; and
	 
	(d)	 	a certified copy of each certificate of financial responsibility for pollution by oil or
other Environmentally Sensitive Material issued by the relevant certifying authority in
relation to the Ship.
	 
	12.8	 	Deposit of original policies. The Borrower shall ensure that all policies relating to
obligatory insurances are deposited with the approved brokers through which the insurances are
effected or renewed.
	 
	12.9	 	Payment of premiums. The Borrower shall punctually pay all premiums or other sums payable in
respect of the obligatory insurances and produce all relevant receipts when so required by the
Lender.
	 
	12.10	 	Guarantees. The Borrower shall ensure that any guarantees required by a protection and
indemnity or war risks association are promptly issued and remain in full force and effect.
	 
	12.11	 	Restrictions on employment. The Borrower shall not employ the Ship, nor permit her to be
employed, outside the cover provided by any obligatory insurances.
	 
	12.12	 	Compliance with terms of insurances. The Borrower shall not do or omit to do (or permit to
be done or not to be done) any act or thing which would or might render any obligatory
insurance invalid, void, voidable or unenforceable or render any sum payable under an
obligatory insurance repayable in whole or in part; and, in particular:
	 
	(a)	 	the Borrower shall take all necessary action and comply with all requirements which may from
time to time be applicable to the obligatory insurances, and (without limiting the obligation
contained in Clause 12.7 (c)) ensure that the obligatory insurances are not made subject to
any exclusions or qualifications to which the Lender has not given its prior approval;
	 
	(b)	 	the Borrower shall not make any changes relating to the classification or classification
society or manager or operator of the Ship approved by the underwriters of the obligatory
insurances;
	 
	(c)	 	the Borrower shall make (and promptly supply copies to the Lender of) all quarterly or other
voyage declarations which may be required by the protection and indemnity risks association in
which the Ship is entered to maintain cover for trading to the United States of America and
Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other
applicable legislation); and
	 
	(d)	 	the Borrower shall not employ the Ship, nor allow it to be employed, otherwise than in
conformity with the terms and conditions of the obligatory insurances, without first obtaining
the consent of the insurers and complying with any requirements (as to extra premium or
otherwise) which the insurers specify.
	 
	12.13	 	Alteration to terms of insurances. The Borrower shall neither make nor agree to any
alteration to the terms of any obligatory insurance nor waive any right relating to any
obligatory insurance.
	 
	12.14	 	Settlement of claims. The Borrower shall not settle, compromise or abandon any claim under
any obligatory insurance for Total Loss or for a Major Casualty, and the Borrower shall do all
things necessary and provide all documents, evidence and information to enable the Lender to
collect or recover any moneys which at any time become payable in respect of the obligatory
insurances.

26

 

	12.15	 	Provision of copies of communications. The Borrower shall provide the Lender, at the time
of each such communication, copies of all written communications between itself and:
	 
	(a)	 	the approved brokers; and
	 
	(b)	 	the approved protection and indemnity and/or war risks associations; and
	 
	(c)	 	the approved insurance companies and/or underwriters, which relate directly or indirectly to:

	 	(i)	 	the Borrower’s obligations relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional premiums or
calls; and
	 
	 	(ii)	 	any credit arrangements made between the Borrower and any of the persons
referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or
maintenance of the obligatory insurances.

	12.16	 	Provision of information. In addition, the Borrower shall promptly provide the Lender (or
any persons which it may designate) with any information which the Lender (or any such
designated person) requests for the purpose of:
	 
	(a)	 	obtaining or preparing any report from an independent marine insurance broker as to the
adequacy of the obligatory insurances effected or proposed to be effected; and/or
	 
	(b)	 	effecting, maintaining or renewing any such insurances as are referred to in Clause 12.17
below or dealing with or considering any matters relating to any such insurances;
	 
	 	 	and the Borrower shall, forthwith upon demand, indemnify the Lender in respect of all fees
and other expenses incurred by or for the account of the Lender in connection with any such
report as is referred to in paragraph (a).
	 
	12.17	 	Mortgagee’s interest insurance. The Lender shall be entitled from time to time to effect,
maintain and renew on such terms, through such insurers and generally in such manner as the
Lender may from time to time consider appropriate a mortgagee’s interest marine insurance in
relation to the Ship in an amount equal to at least 110 per cent. of the Loan providing for
the indemnification of the Lender for any losses under or in connection with any Finance
Document which directly or indirectly result from loss of or damage to either Ship or a
liability of either Ship or of either Owner, being a loss or damage which is prima facie
covered by an obligatory insurance but in respect of which there is a non-payment (or reduced
payment) by the underwriters by reason of, or on the basis of an allegation concerning:
	 
	(a)	 	any act or omission on the part of the Borrower, of any operator, charterer, manager or
sub-manager of the Ship or of any officer, employee or Lender of the Borrower or of any such
person, including any breach of warranty or condition or any non-disclosure relating to such
obligatory insurance;
	 
	(b)	 	any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity
of the Borrower, any other person referred to in paragraph (i) above, or of any officer,
employee or agent of the Borrower or of such a person, including the casting away or damaging
of the Ship and/or the Ship being unseaworthy; and/or
	 
	(c)	 	any other matter capable of being insured against under a mortgagee’s interest marine
insurance policy whether or not similar to the foregoing,

27

 

	 	 	and the Borrower shall upon demand fully indemnify the Lender in respect of all premiums and
other expenses which are incurred in connection with or with a view to effecting,
maintaining or renewing any such insurance or dealing with, or considering, any matter
arising out of any such insurance.
	 
	12.18	 	Review of insurance requirements. The Lender shall be entitled to review the requirements
of this Clause 12 from time to time in order to take account of any changes in circumstances
after the date of this Agreement which are, in the opinion of the Lender, significant and
capable of affecting the Borrower or the Ship and its or their insurance (including, without
limitation, changes in the availability or the cost of insurance coverage or the risks to
which the Borrower may be subject), and may appoint insurance consultants in relation to this
review at the cost of the Borrower.
	 
	12.19	 	Modification of insurance requirements. The Lender shall notify the Borrower of any
proposed modification under Clause 12.18 to the requirements of this Clause 12 which the
Lender consider appropriate in the circumstances, and such modification shall take effect on
and from the date it is notified in writing to the Borrower as an amendment to this Clause 12
and shall bind the Borrower accordingly.
	 
	12.20	 	Compliance with mortgagee’s instructions. The Lender shall be entitled (without prejudice
to or limitation of any other rights which it may have or acquire under any Finance Document)
to require the Ship to remain at any safe port or to proceed to and remain at any safe port
designated by the Lender until the Borrower implements any amendments to the terms of the
obligatory insurances and any operational changes required as a result of a notice served
under Clause 12.19.
	 
	13	 	SHIP COVENANTS
	 
	13.1	 	General. The Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 13 at all times during the Security Period except as the Lender may
otherwise permit in writing.
	 
	13.2	 	Ship’s name and registration. The Borrower shall keep the Ship registered in its name under
the laws and flag of Singapore; shall not do or allow to be done anything as a result of which
such registration might be cancelled or imperilled; and shall not change the name or port of
registry of the Ship.
	 
	13.3	 	Repair and classification. The Borrower shall keep the Ship in a good and safe condition and
state of repair:
	 
	(a)	 	consistent with first-class ship ownership and management practice;
	 
	(b)	 	so as to maintain the Ship with the highest class available for vessel of the same type, age
and characteristics as the Ship with a classification society, approved by the Lender, which
is a member of IACS, free of outstanding or overdue recommendations and conditions of such
classification society affecting the Ship’s class (other than outstanding recommendations and
conditions notified to the Lender in writing prior to the date of this Agreement); and
	 
	(c)	 	so as to comply with all laws and regulations applicable to vessels registered at ports in
Singapore or to vessels trading to any jurisdiction to which the Ship may trade from time to
time including but not limited to the ISM Code, the ISPS Code and the ISM Code Documentation.
	 
	13.4	 	Classification society undertaking. The Borrower shall instruct the classification society
referred to in Clause 13.3 (and procure that the classification society undertakes with the
Lender):

28

 

	(a)	 	to send to the Lender, following receipt of a written request from the Lender, certified true
copies of all original class records held by the classification society in relation to the
Ship;
	 
	(b)	 	to allow the Lender (or its agents), at any time and from time to time, to inspect the
original class and related records of the Borrower and the Ship at the offices of the
classification society and to take copies of them;
	 
	(c)	 	to notify the Lender immediately in writing if the classification society:

	 	(i)	 	receives notification from the Borrower or any other person that the Ship’s
classification society is to be changed; or
	 
	 	(ii)	 	becomes aware of any facts or matters which may result in or have resulted in a
change, suspension, discontinuance, withdrawal or expiry of the Ship’s class under the
rules or terms and conditions of the Borrower’s or the Ship’s membership of the
classification society;

	(d)	 	following receipt of a written request from the Lender:

	 	(i)	 	to confirm that the Borrower is not in default of any of its contractual
obligations or liabilities to the classification society and, without limiting the
foregoing, that it has paid in full all fees or other charges due and payable to the
classification society; or
	 
	 	(ii)	 	if the Borrower is in default of any of its contractual obligations or
liabilities to the classification society, to specify to the Lender in reasonable
detail the facts and circumstances of such default, the consequences of such default,
and any remedy period agreed or allowed by the classification society.

	13.5	 	Modification. The Borrower shall not make any modification or repairs to, or replacement of,
the Ship or equipment installed on the Ship which would or might materially alter the
structure, type or performance characteristics of the Ship or materially reduce its value.
	 
	13.6	 	Removal of parts. The Borrower shall not remove any material part of the Ship, or any item
of equipment installed on the Ship, unless the part or item so removed is forthwith replaced
by a suitable part or item which is in the same condition as or better condition than the part
or item removed, is free from any Security Interest or any right in favour of any person other
than the Lender and becomes on installation on the Ship the property of the Borrower and
subject to the security constituted by the Mortgage and the Deed of Covenant Provided that the
Borrower may install equipment owned by a third party if the equipment can be removed without
any risk of damage to the Ship.
	 
	13.7	 	Surveys. The Borrower shall submit the Ship regularly to all periodical or other surveys
which may be required for classification purposes and, if so required by the Lender, provide
the Lender with copies of all survey reports and shall allow the Lender’s representatives to
conduct a comprehensive inspection of the Ship’s records when and if required by the Lender.
	 
	13.8	 	Inspection. The Borrower shall permit the Lender (by surveyors or other persons appointed by
it for that purpose) to board the Ship at all reasonable times (during the pre-delivery and
post-delivery period) to inspect its condition or to satisfy themselves about proposed or
executed repairs and shall afford all proper facilities for such inspections, and all costs
and expenses in relation thereto shall be for the account of the Borrower.

29

 

	13.9	 	Prevention of and release from arrest. The Borrower shall promptly discharge:
	 
	(a)	 	all liabilities which give or may give rise to maritime or possessory liens on or claims
enforceable against the Ship, the Earnings or the Insurances;
	 
	(b)	 	all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the
Insurances; and
	 
	(c)	 	all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances,
	 
	 	 	and, forthwith upon receiving notice of the arrest of the Ship, or of its detention in
exercise or purported exercise of any lien or claim, the Borrower shall procure its release
by providing bail or otherwise as the circumstances may require.
	 
	13.10	 	Compliance with laws etc. The Borrower shall:
	 
	(a)	 	comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and
all other laws or regulations relating to the Ship, its ownership, operation and management or
to the business of the Borrower and the Approved Manager;
	 
	(b)	 	not employ the Ship nor allow its employment in any manner contrary to any law or regulation
in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
	 
	(c)	 	in the event of hostilities in any part of the world (whether war is declared or not), not
cause or permit its to enter or trade to any zone which is declared a war zone by any
government or by the Ship’s war risks insurers unless the prior written consent of the Lender
has been given and the Borrower has (at its expense) effected any special, additional or
modified insurance cover which the Lender may require.
	 
	13.11	 	Provision of information. The Borrower shall promptly provide the Lender with any
information which it requests regarding:
	 
	(a)	 	the Ship, its employment, position and engagements;
	 
	(b)	 	the Earnings and payments and amounts due to the Ship’s master and crew;
	 
	(c)	 	any expenses incurred, or likely to be incurred, in connection with the operation,
maintenance or repair of the Ship and any payments made in respect of the Ship;
	 
	(d)	 	any towages and salvages;
	 
	(e)	 	the Borrower’s, the Approved Manager’s or the Ship’s compliance with the ISM Code and the
ISPS Code;
	 
	 	 	and, upon the Lender’s request, provide copies of any current charter relating to the Ship,
of any current charter guarantee and of the Document of Compliance, Safety Management
Certificate and International Ship Security Certificate of the Ship.
	 
	13.12	 	Notification of certain events. The Borrower shall immediately notify the Lender by fax,
confirmed forthwith by letter, of:
	 
	(a)	 	any casualty which is or is likely to be or to become a Major Casualty;
	 
	(b)	 	any occurrence as a result of which the Ship has become or is, by the passing of time or
otherwise, likely to become a Total Loss;

30

 

	(c)	 	any requirement or recommendation made by any insurer or classification society or by any
competent authority which is not immediately complied with;
	 
	(d)	 	any arrest or detention of the Ship, any exercise or purported exercise of any lien on the
Ship or its Earnings or any requisition of the Ship for hire;
	 
	(e)	 	any intended dry docking of the Ship;
	 
	(f)	 	any Environmental Claim made against the Borrower or in connection with the Ship, or any
Environmental Incident;
	 
	(g)	 	any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, the
Approved Manager or otherwise in connection with the Ship;
	 
	(h)	 	any other matter, event or incident, actual or threatened, the effect of which will or could
lead to the ISM Code or the ISPS Code not being complied with,
	 
	 	 	and the Borrower shall keep the Lender advised in writing on a regular basis and in such
detail as the Lender shall require of the Borrower’s, the Approved Manager’s or any other
person’s response to any of those events or matters.
	 
	13.13	 	Restrictions on chartering, appointment of managers etc. The Borrower shall not:
	 
	(a)	 	let the Ship on demise charter for any period;
	 
	(b)	 	enter into any time or consecutive voyage charter, other than an Approved Charter, in respect
of the Ship for a term which exceeds, or which by virtue of any optional extensions may
exceed, 12 months;
	 
	(c)	 	enter into any charter in relation to the Ship under which more than 2 months’ hire (or the
equivalent) is payable in advance;
	 
	(d)	 	charter the Ship otherwise than on bona fide arm’s length terms at the time when the Ship is
fixed;
	 
	(e)	 	appoint a manager of the Ship other than the Approved Manager or agree to any alteration to
the terms of the Approved Manager’s appointment;
	 
	(f)	 	de-activate or lay up the Ship; or
	 
	(g)	 	put the Ship into the possession of any person for the purpose of work being done upon her in
an amount exceeding or likely to exceed $250,000 (or the equivalent in any other currency)
unless that person has first given to the Lender and in terms satisfactory to it a written
undertaking not to exercise any lien on the Ship or the Earnings for the cost of such work or
for any other reason.
	 
	13.14	 	Notice of Mortgage. The Borrower shall keep the Mortgage registered against the Ship as a
valid first priority mortgage, carry on board the Ship a certified copy of the Mortgage and
place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the
Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Lender.
	 
	13.15	 	Sharing of Earnings. The Borrower shall not:
	 
	(a)	 	enter into any agreement or arrangement for the sharing of any Earnings;

31

 

	(b)	 	enter into any agreement or arrangement for the postponement of any date on which any
Earnings are due; the reduction of the amount of any Earnings or otherwise for the release or
adverse alteration of any right of the Borrower to any Earnings; or
	 
	(c)	 	enter into any agreement or arrangement for the release of, or adverse alteration to, any
guarantee or Security Interest relating to any Earnings.
	 
	13.16	 	Charterparty Assignment. If the Borrower enters into any Approved Charter, the Borrower
shall at the request of the Lender execute in favour of the Lender (and register, if
applicable) a Charterparty Assignment in respect of such Approved Charter, and shall deliver
to the Lender any documents in relation thereto which the Lender may require.
	 
	14	 	SECURITY COVER
	 
	14.1	 	Required security cover. The Borrower hereby undertakes that if, and so often as, the
aggregate of:
	 
	(a)	 	the Market Value of the Ship; and
	 
	(b)	 	the net realisable value of any additional security for the time being actually provided to
the Lender pursuant to this Clause 14,

is less than the amount equal to the Relevant Percentage of the Loan it will within 1 month
after the date on which the Lender’s notice is served, either:

	 	(i)	 	provide, or ensure that a third party provides, additional security which, in
the opinion of the Lender, has a net realisable value at least equal to the shortfall
and is documented in such terms as the Lender may approve or require; or
	 
	 	(ii)	 	prepay such part (at least) of the Loan as will eliminate the shortfall,

	 	 	        where “Relevant Percentage” means:

	 	(A)	 	in relation to the period commencing on the Drawdown Date and ending on 31
December 2012, 100 per cent.; and
	 
	 	(B)	 	at all times thereafter, 125 per cent.

	14.2	 	Meaning of additional security. In Clause 14.1 “security” means a Security Interest over an
asset or assets (whether securing the Borrower’s liabilities under the Finance Documents or a
guarantee in respect of those liabilities), or a guarantee, letter of credit or other security
in respect of the Borrower’s liabilities under the Finance Documents.
	 
	14.3	 	Requirement for additional documents. The Borrower shall not be deemed to have complied with
Clause 14.1(i) above until the Lender has received in connection with the additional security
certified copies of documents referred to in paragraphs 3, 4 and 5 of Schedule 2, Part A below
and such legal opinions in terms acceptable to the Lender from such lawyers as they may
select.
	 
	14.4	 	Valuation of Ship. The Market Value of the Ship at any date is that shown by the average of
two valuations prepared:
	 
	(a)	 	as at a date not more than 14 days previously;
	 
	(b)	 	with or without physical inspection of the Ship (as the Lender may require);
	 
	(c)	 	by two Approved Brokers approved by the Lender;

32

 

	(d)	 	on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms
as between a willing seller and a willing buyer on a charter free basis;
	 
	(e)	 	after deducting the estimated amount of the usual and reasonable expenses which would be
incurred in connection with the sale.
	 
	14.5	 	Value of additional security. The net realisable value of any additional security which is
provided under Clause 14.1 and which consists of a Security Interest over a vessel shall be
that shown by a valuation complying with the requirements of Clause 14.4.
	 
	14.6	 	Valuations binding. Any valuation under Clause 14.1(i), 14.4 or 14.5 shall be binding and
conclusive as regards the Borrower and the Ship, as shall be any valuation which the Lender
makes of a security which does not consist of or include a Security Interest.
	 
	14.7	 	Frequency of valuations. The Borrower acknowledges and agrees that the Lender may commission
valuations of the Ship at such times as the Lender shall deem necessary and in any event not
less often than once during each 3-month period of the Security Period.
	 
	14.8	 	Provision of information. The Borrower shall promptly provide the Lender and any Approved
Broker acting under Clause 14.4 or 14.5 with any information which the Lender or the
Shipbroker or expert may request for the purposes of the valuation; and, if the Borrower fails
to provide the information by the date specified in the request, the valuation may be made on
any basis and assumptions which the shipbroker or the Lender (or the expert appointed by them)
consider prudent.
	 
	14.9	 	Payment of valuation expenses. Without prejudice to the generality of the Borrower’s
obligations under Clauses 19.2, 19.3 and 20.3, the Borrower shall, on demand, pay the Lender
the amount of the fees and expenses of any shipbroker or expert instructed by the Lender under
this Clause and all legal and other expenses incurred by the Lender in connection with any
matter arising out of this Clause Provided that (i) so long as no Event of Default shall have
occurred and (ii) all valuations of the Ship commissioned by the Lender for the purposes of
this Clause 14 confirm that the Borrower has satisfied the test in Clause 14.1, the Borrower
shall not be obliged to pay any such fees and expenses in respect of more than 2 valuations of
the Ship in any 3-month period.
	 
	15	 	PAYMENTS AND CALCULATIONS
	 
	15.1	 	Currency and method of payments. All payments to be made by the Borrower to the Lender under
a Finance Document shall be made to the Lender:
	 
	(a)	 	by not later than 11.00 a.m. (Athens time) on the due date;
	 
	(b)	 	in same day Dollar funds settled through the New York Clearing House Interbank Payments
System (or in such other Dollar funds and/or settled in such other manner as the Lender shall
specify as being customary at the time for the settlement of international transactions of the
type contemplated by this Agreement); and
	 
	(c)	 	to the account of the Lender with JP Morgan Chase New York, CHASUS33 A/C WestLB AG, London
WELAGB2L (Account No 001-1-352267 under reference “Grand Victoria Pte. Ltd.), or to such other
account with such other bank as the Lender may from time to time notify to the Borrower.
	 
	15.2	 	Payment on non-Business Day. If any payment by the Borrower under a Finance Document would
otherwise fall due on a day which is not a Business Day:
	 
	(a)	 	the due date shall be extended to the next succeeding Business Day; or

33

 

	(b)	 	if the next succeeding Business Day falls in the next calendar month, the due date shall be
brought forward to the immediately preceding Business Day;
	 
	 	 	and interest shall be payable during any extension under paragraph (a) at the rate payable
on the original due date.
	 
	15.3	 	Basis for calculation of periodic payments. All interest and any other payments under any
Finance Document which are of an annual or periodic nature shall accrue from day to day and
shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
	 
	15.4	 	Lender accounts. The Lender shall maintain an account or accounts showing the amounts
advanced by the Lender and all other sums owing to the Lender from the Borrower and each
Security Party under the Finance Documents and all payments in respect of those amounts made
by the Borrower and any other Security Party.
	 
	15.5	 	Accounts prima facie evidence. If the account maintained under Clauses 15.4 shows an amount
to be owing by the Borrower or a Security Party to the Lender, that account shall be prima
facie evidence that that amount is owing to the Lender.
	 
	16	 	APPLICATION OF RECEIPTS
	 
	16.1	 	Normal order of application. Except as any Finance Document may otherwise provide, any sums
which are received or recovered by the Lender under or by virtue of any Finance Document shall
be applied:
	 
	(a)	 	FIRST: in or towards satisfaction of any amounts then due and payable under the Finance
Documents (or any of them) in such order of application and/or such proportions as the Lender
may specify by notice to the Borrower and the Security Parties;
	 
	(b)	 	SECONDLY: in retention of an amount equal to any amount not then due and payable under any
Finance Document but which the Lender, by notice to the Borrower and the Security Parties,
states in its opinion will or may become due and payable in the future and, upon those amounts
becoming due and payable, in or towards satisfaction of them in accordance with the provisions
of this Clause; and
	 
	(c)	 	THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be
entitled to it.
	 
	16.2	 	Variation of order of application. The Lender may, by notice to the Borrower and the
Security Parties, provide for a different manner of application from that set out in
Clause 16.1 either as regards a specified sum or sums or as regards sums in a specified
category or categories.
	 
	16.3	 	Notice of variation of order of application. The Lender may give notices under Clause 16.2
from time to time; and such a notice may be stated to apply not only to sums which may be
received or recovered in the future, but also to any sum which has been received or recovered
on or after the third Business Day before the date on which the notice is served.
	 
	16.4	 	Appropriation rights overridden. This Clause 16 and any notice which the Lender gives under
Clause 16.2 shall override any right of appropriation possessed, and any appropriation made,
by the Borrower or any other Security Party.

34

 

	17	 	APPLICATION OF EARNINGS
	 
	17.1	 	Payment of Earnings. The Borrower undertakes with the Lender to ensure that, throughout the
Security Period (subject only to the provisions of the relevant General Assignment), all the
Earnings of the Ship are paid to the Earnings Account.
	 
	17.2	 	Location of accounts. The Borrower shall promptly:
	 
	(a)	 	comply with any requirement of the Lender as to the location or re-location of the Earnings
Account and the Holding Account (or either of them); and
	 
	(b)	 	execute any documents which the Lender specifies to create or maintain in favour of the
Lender a Security Interest over (and/or rights of set-off, consolidation or other rights in
relation to) the Earnings Account and the Holding Account.
	 
	17.3	 	Debits for expenses etc. The Lender shall be entitled (but not obliged) from time to time to
debit the Earnings Account without prior notice in order to discharge any amount due and
payable under Clause 19 or 20 to the Lender or payment of which the Lender has become entitled
to demand under Clause 19 or 20.
	 
	17.4	 	Borrower’s obligations unaffected. The provisions of this Clause 17 (as distinct from a
distribution effected under Clause 17.4) do not affect:
	 
	(a)	 	the liability of the Borrower to make payments of principal and interest on the due dates; or
	 
	(b)	 	any other liability or obligation of the Borrower or any other Security Party under any
Finance Document.
	 
	18	 	EVENTS OF DEFAULT
	 
	18.1	 	Events of Default. An Event of Default occurs if:
	 
	(a)	 	the Borrower or any other Security Party fails to pay when due or (if so payable) on demand
within 3 Business Days of such demand and any sum payable under a Finance Document or under
any document relating to a Finance Document; or
	 
	(b)	 	any breach occurs of Clause 8.2, 10.2, 10.3, 10.15, 10.16, 10.19, 11.2, 11.3, 11.4 or 14.1 or
Clause 11.15 (financial covenants) of the Corporate Guarantee; or
	 
	(c)	 	any breach by the Borrower or any other Security Party occurs of any provision of a Finance
Document (other than a breach covered by paragraphs (a) or (b) above) if, in the opinion of
the Lender, such default is capable of remedy, and such default continues unremedied 30 days
after written notice from the Lender requesting action to remedy the same; or
	 
	(d)	 	any breach by the Borrower or any other Security Party occurs of any provision of a Finance
Document (other than a breach covered by paragraphs (a), (b) or (c) above); or
	 
	(e)	 	any representation, warranty or statement made by, or by an officer of, the Borrower or a
Security Party in a Finance Document or in a Drawdown Notice or any other notice or document
relating to a Finance Document is untrue or misleading when it is made; or

35

 

	(f)	 	any of the following occurs in relation to any Financial Indebtedness of a Relevant Person
(in the case of the applicable Corporate Guarantor, exceeding $1,000,000 (or the equivalent in
any other currency) in aggregate):

	 	(i)	 	any Financial Indebtedness of a Relevant Person is not paid when due or, if so
payable, on demand; or
	 
	 	(ii)	 	any Financial Indebtedness of a Relevant Person becomes due and payable or
capable of being declared due and payable prior to its stated maturity date as a
consequence of any event of default; or
	 
	 	(iii)	 	a lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes
capable of being terminated as a consequence of any termination event; or
	 
	 	(iv)	 	any overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other derivative contract
or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to
be available or becomes capable of being terminated as a result of any event of
default, or cash cover is required, or becomes capable of being required, in respect of
such a facility as a result of any event of default; or
	 
	 	(v)	 	any Security Interest securing any Financial Indebtedness of a Relevant Person
becomes enforceable; or

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

	 	(i)	 	a Relevant Person becomes, in the opinion of the Lender, unable to pay its
debts as they fall due; or
	 
	 	(ii)	 	any assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress or any form of freezing order; or
	 
	 	(iii)	 	any administrative or other receiver is appointed over any asset of a Relevant
Person; or
	 
	 	(iv)	 	a Relevant Person makes any formal declaration of bankruptcy or any formal
statement to the effect that it is insolvent or likely to become insolvent, or a
winding up or administration order is made in relation to a Relevant Person, or the
members or directors of a Relevant Person pass a resolution to the effect that it
should be wound up, placed in administration or cease to carry on business, save that
this paragraph does not apply to a fully solvent winding up of a Relevant Person other
than the Borrower or the Corporate Guarantor which is, or is to be, effected for the
purposes of an amalgamation or reconstruction previously approved by the Lender and
effected not later than 3 months after the commencement of the winding up; or
	 
	 	(v)	 	a petition is presented in any Pertinent Jurisdiction for the winding up or
administration, or the appointment of a provisional liquidator, of a Relevant Person
unless the petition is being contested in good faith and on substantial grounds and is
dismissed or withdrawn within 30 days of the presentation of the petition; or
	 
	 	(vi)	 	a Relevant Person petitions a court, or presents any proposal for, any form of
judicial or non-judicial suspension or deferral of payments, reorganisation of its debt
(or certain of its debt) or arrangement with all or a substantial proportion (by number
or value) of its creditors or of any class of them or any such suspension or

36

 

	 	 	 	deferral of payments, reorganisation or arrangement is effected by court order,
contract or otherwise; or
	 
	 	(vii)	 	any meeting of the members or directors of a Relevant Person is summoned for
the purpose of considering a resolution or proposal to authorise or take any action of
a type described in paragraphs (iii), (iv), (v) or (vi) above; or
	 
	 	(viii)	 	in a Pertinent Jurisdiction other than England, any event occurs or any procedure is
commenced which, in the opinion of the Lender, is similar to any of the foregoing; or

	(h)	 	the Borrower ceases or suspends carrying on its business or a part of its business which, in
the opinion of the Lender, is material in the context of this Agreement; or
	 
	(i)	 	it becomes unlawful in any Pertinent Jurisdiction or impossible:

	 	(i)	 	for the Borrower or any other Security Party to discharge any liability under a
Finance Document or to comply with any other obligation which the Lender considers
material under a Finance Document; or
	 
	 	(ii)	 	for the Lender to exercise or enforce any right under, or to enforce any
Security Interest created by, a Finance Document; or

	(j)	 	any official consent necessary to enable the Borrower to own, operate or charter the Ship or
to enable the Borrower or any other Security Party to comply with any provision which the
Lender considers material of a Finance Document is not granted, expires without being renewed,
is revoked or becomes liable to revocation or any condition of such a consent is not
fulfilled; or
	 
	(k)	 	it appears to the Lender that, without its prior consent, a change has occurred or probably
has occurred after the date of this Agreement (other than pursuant to Clause 10.19) in the
ownership of any of the shares in the Borrower or any other Security Party or in the ultimate
control of the voting rights attaching to any of those shares; or
	 
	(l)	 	any provision which the Lender considers material of a Finance Document proves to have been
or becomes invalid or unenforceable, or a Security Interest created by a Finance Document
proves to have been or becomes invalid or unenforceable or such a Security Interest proves to
have ranked after, or loses its priority to, another Security Interest or any other third
party claim or interest; or
	 
	(m)	 	the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
	 
	(n)	 	any other event occurs or any other circumstances arise or develop including, without
limitation:

	 	(i)	 	a change in the financial position, state of affairs or prospects of the
Borrower, the Corporate Guarantor or the Group; or
	 
	 	(ii)	 	any accident or other event involving the Ship or another vessel owned,
chartered or operated by a Relevant Person

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

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

37

 

	(a)	 	the Lender may:

	 	(i)	 	serve on the Borrower a notice stating that the obligations of the Lender to
the Borrower under this Agreement are terminated; and/or
	 
	 	(ii)	 	serve on the Borrower a notice stating that the Loan, all accrued interest and
all other amounts accrued or owing under this Agreement are immediately due and payable
or are due and payable on demand; and/or
	 
	 	(iii)	 	take any other action which, as a result of the Event of Default or any notice
served under paragraph (i) or (ii) above, the Lender is entitled to take under any
Finance Document or any applicable law; and/or

	(b)	 	the Lender may take any action which, as a result of the Event of Default or any notice
served under paragraph (a) (i) or (ii) above, the Lender is entitled to take under any Finance
Document or any applicable law.
	 
	18.3	 	Termination of obligations. On the service of a notice under Clause 18.2(a), all the
obligations of the Lender to the Borrower under this Agreement shall terminate.
	 
	18.4	 	Acceleration of Loan. On the service of a notice under Clause 18.2(b), the Loan, all accrued
interest and all other amounts accrued or owing from the Borrower or any other Security Party
under this Agreement and every other Finance Document shall become immediately due and payable
or, as the case may be, payable on demand.
	 
	18.5	 	Multiple notices; action without notice. The Lender may serve notices under Clause 18.2 (a)
and (b) simultaneously or on different dates and it may take any action referred to in Clause
18.2 if no such notice is served or simultaneously with or at any time after the service of
both or either of such notices.
	 
	18.6	 	Exclusion of Lender liability. Neither the Lender nor any receiver or manager appointed by
the Lender, shall have any liability to the Borrower or a Security Party:
	 
	(a)	 	for any loss caused by an exercise of rights under, or enforcement of a Security Interest
created by, a Finance Document or by any failure or delay to exercise such a right or to
enforce such a Security Interest; or
	 
	(b)	 	as mortgagee in possession or otherwise, for any income or principal amount which might have
been produced by or realised from any asset comprised in such a Security Interest or for any
reduction (however caused) in the value of such an asset;
	 
	 	 	except that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused directly and mainly by the dishonesty or the wilful
misconduct of the Lender’s own officers and employees or (as the case may be) such
receiver’s or manager’s own partners or employees.
	 
	18.7	 	Interpretation. In Clause 18.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of default in a facility
agreement or a termination event in a finance lease; and in Clause 18.1(g) “petition” includes
an application.
	 
	19	 	FEES AND EXPENSES
	 
	19.1	 	Restructuring fee. The Borrower shall pay to the Lender a non-refundable restructuring fee
of $225,000 payable as follows:
	 
	(a)	 	$112,500, on the date of the Deed of Novation, Amendment and Restatement; and

38

 

	(b)	 	$112,500, on the date falling 6 months after the date of the Deed of Novation, Amendment and
Restatement.
	 
	19.2	 	Costs of negotiation, preparation etc. The Borrower shall pay to the Lender on its demand
the amount of all expenses incurred by the Lender in connection with the negotiation,
preparation, execution or registration of any Finance Document or any related document or with
any transaction contemplated by a Finance Document or a related document.
	 
	19.3	 	Costs of variation, amendments, enforcement etc. The Borrower shall pay to the Lender, on
the Lender’s demand, the amount of all expenses incurred by the Lender in connection with:
	 
	(a)	 	any amendment or supplement to a Finance Document, or any proposal for such an amendment to
be made;
	 
	(b)	 	any consent or waiver by the Lender under or in connection with a Finance Document, or any
request for such a consent or waiver;
	 
	(c)	 	the valuation of any security provided or offered under Clause 14 or any other matter
relating to such security;
	 
	(d)	 	the opinions of the independent insurance consultant referred to in paragraph 6 of Part B of
Schedule 2; or
	 
	(e)	 	any step taken by the Lender with a view to the protection, exercise or enforcement of any
right or Security Interest created by a Finance Document or for any similar purpose.
	 
	 	 	There shall be recoverable under paragraph (e) the full amount of all legal expenses,
whether or not such as would be allowed under rules of court or any taxation or other
procedure carried out under such rules.
	 
	19.4	 	Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any
Finance Document, and shall, on the Lender’s demand, fully indemnify the Lender against any
claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower
to pay such a tax.
	 
	19.5	 	Certification of amounts. A notice which is signed by an authorised officer of the Lender,
which states that a specified amount, or aggregate amount, is due to that Lender under this
Clause 19 and which indicates (without necessarily specifying a detailed breakdown) the
matters in respect of which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is due.
	 
	20	 	INDEMNITIES
	 
	20.1	 	Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify
the Lender on its demand in respect of all claims, expenses, liabilities and losses which are
made or brought against or incurred by the Lender, or which the Lender reasonably and with due
diligence estimates that it will incur, as a result of or in connection with:
	 
	(a)	 	the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other
than a default by the Lender;
	 
	(b)	 	the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on
the last day of an Interest Period or other relevant period;

39

 

	(c)	 	any failure (for whatever reason) by the Borrower to make payment of any amount due under a
Finance Document on the due date or, if so payable, on demand (after giving credit for any
default interest paid by the Borrower on the amount concerned under Clause 6; and
	 
	(d)	 	the occurrence and/or continuance of an Event of Default and/or the acceleration of repayment
of the Loan under Clause 18,
	 
	 	 	and in respect of any tax (other than tax on its overall net income) for which the Lender is
liable in connection with any amount paid or payable to the Lender (whether for its own
account or otherwise) under any Finance Document.
	 
	20.2	 	Breakage costs. Without limiting its generality, Clause 20.1 covers any claim, expense,
liability or loss, including a loss of a prospective profit, incurred by the Lender:
	 
	(a)	 	in liquidating or employing deposits from third parties acquired or arranged to fund or
maintain all or any part of the Loan and/or any overdue amount (or an aggregate amount which
includes the Loan or any overdue amount); and
	 
	(b)	 	in terminating, or otherwise in connection with, any interest and/or currency swap or any
other transaction entered into (whether with another legal entity or with another office or
department of the Lender) to hedge any exposure arising under this Agreement or a number of
transactions of which this Agreement is one.
	 
	20.3	 	Miscellaneous indemnities. The Borrower shall fully indemnify the Lender on its respective
demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and
expenses of every kind (“liability items”) which may be made or brought against, or incurred
by, the Lender in any country, in relation to:
	 
	(a)	 	any action taken, or omitted or neglected to be taken, under or in connection with any
Finance Document by the Lender or by any receiver appointed under a Finance Document;
	 
	(b)	 	any other event, matter or question which occurs or arises at any time during the Security
Period and which has any connection with, or any bearing on, any Finance Document, any payment
or other transaction relating to a Finance Document or any asset covered (or previously
covered) by a Security Interest created (or intended to be created) by a Finance Document,
	 
		 	other than liability items which are shown to have been caused by the gross negligence or
the wilful misconduct of the Lender’s or (as the case may be) the Lender’s own officers or
employees.
	 
	 	 	Without prejudice to its generality, this Clause 20.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with any law
relating to safety at sea, the ISM Code, the ISPS Code, or any Environmental law.
	 
	20.4	 	Currency indemnity. If any sum due from the Borrower or any other Security Party to the
Lender under a Finance Document or under any order or judgment relating to a Finance Document
has to be converted from the currency in which the Finance Document provided for the sum to be
paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the
purpose of:
	 
	(a)	 	making or lodging any claim or proof against the Borrower or any other Security Party,
whether in its liquidation, any arrangement involving it or otherwise; or
	 
	(b)	 	obtaining an order or judgment from any court or other tribunal; or

40

 

	(c)	 	enforcing any such order or judgment,

the Borrower shall indemnify the Lender against the loss arising when the amount of the
payment actually received by the Lender is converted at the available rate of exchange into
the Contractual Currency.
	 
	 	 	In this Clause 20.4, the “available rate of exchange” means the rate at which the Lender is
able at the opening of business (London time) on the Business Day after it receives the sum
concerned to purchase the Contractual Currency with the Payment Currency.
	 
	 	 	This Clause 20.4 creates a separate liability of the Borrower which is distinct from its
other liabilities under the Finance Documents and which shall not be merged in any judgment
or order relating to those other liabilities.
	 
	20.5	 	Certification of amounts. A notice which is signed by two authorised officers of the Lender,
which states that a specified amount, or aggregate amount, is due to the Lender under this
Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the
matters in respect of which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is due.
	 
	21	 	NO SET-OFF OR TAX DEDUCTION
	 
	21.1	 	No deductions. All amounts due from the Borrower under a Finance Document shall be paid:
	 
	(a)	 	without any form of set-off, cross-claim or condition; and
	 
	(b)	 	free and clear of any tax deduction except a tax deduction which the Borrower is required by
law to make.
	 
	21.2	 	Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any
payment:
	 
	(a)	 	the Borrower shall notify the Lender as soon as it becomes aware of the requirement;
	 
	(b)	 	the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and
in any event before any fine or penalty arises;
	 
	(c)	 	the amount due in respect of the payment shall be increased by the amount necessary to ensure
that the Lender receives and retains (free from any liability relating to the tax deduction) a
net amount which, after the tax deduction, is equal to the full amount which it would
otherwise have received.
	 
	21.3	 	Evidence of payment of taxes. Within one month after making any tax deduction, the Borrower
shall deliver to the Lender documentary evidence satisfactory to the Lender that the tax had
been paid to the appropriate taxation authority.
	 
	21.4	 	Exclusion of tax on overall net income. In this Clause 21 “tax deduction” means any
deduction or withholding for or on account of any present or future tax except tax on the
Lender’s overall net income.
	 
	22	 	ILLEGALITY, ETC
	 
	22.1	 	Illegality. This Clause 22 applies if the Lender notifies the Borrower that it has become,
or will with effect from a specified date, become:

41

 

	(a)	 	unlawful or prohibited as a result of the introduction of a new law, an amendment to an
existing law or a change in the manner in which an existing law is or will be interpreted or
applied; or
	 
	(b)	 	contrary to, or inconsistent with, any regulation,
	 
	 	 	for the Lender to maintain or give effect to any of its obligations under this Agreement in
the manner contemplated by this Agreement or any of the other Finance Documents.
	 
	22.2	 	Notification and effect of illegality. On the Lender notifying the Borrower under
Clause 22.1, the Lender’s obligation to make the Loan available to the Borrower shall
terminate; and thereupon or, if later, on the date specified in the Lender’s notice under
Clause 22.1 as the date on which the notified event would become effective the Borrower shall
prepay the Loan in full in accordance with Clause 7.
	 
	22.3	 	Mitigation. If circumstances arise which would result in a notification under Clause 22.1
then, without in any way limiting the rights of the Lender under Clause 22.3, the Lender shall
use reasonable endeavours to transfer its obligations, liabilities and rights under this
Agreement and the other Finance Documents to another office or financial institution not
affected by the circumstances but the Lender shall not be under any obligation to take any
such action if, in its opinion, to do would or might:
	 
	(a)	 	have an adverse effect on its business, operations or financial condition; or
	 
	(b)	 	involve it in any activity which is unlawful or prohibited or any activity that is contrary
to, or inconsistent with, any regulation; or
	 
	(c)	 	involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
	 
	23	 	INCREASED COSTS
	 
	23.1	 	Increased costs. This Clause 23 applies if the Lender notifies the Borrower that it
considers that as a result of:
	 
	(a)	 	the introduction or alteration after the date of this Agreement of a law or an alteration
after the date of this Agreement in the manner in which a law is interpreted or applied
(disregarding any effect which relates to the application to payments under this Agreement of
a tax on the Lender’s overall net income); or
	 
	(b)	 	the effect of complying with any regulation (including any which relates to capital adequacy
or liquidity controls or which affects the manner in which the Lender allocates capital
resources to its obligations under this Agreement) which is introduced, or altered, or the
interpretation or application of which is altered, after the date of this Agreement,
	 
	 	 	is that the Lender (or a parent company of it) has incurred or will incur an “increased
cost”, that is to say:

	 	(i)	 	an additional or increased cost incurred as a result of, or in connection with,
the Lender having entered into, or being a party to, this Agreement of funding or
maintaining the Loan or performing its obligations under this Agreement, or of having
outstanding all or any part of the Loan or other unpaid sums; or
	 
	 	(ii)	 	a reduction in the amount of any payment to the Lender under this Agreement or
in the effective return which such a payment represents to the Lender or on its
capital;

42

 

	 	(iii)	 	an additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the Loan or (as
the case may require) the proportion of that cost attributable to the Loan; or
	 
	 	(iv)	 	a liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Lender under this Agreement,

	 	 	but not an item attributable to a change in the rate of tax on the overall net income of the
Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause
20.1 or by Clause 21.
	 
	 	 	For the purposes of this Clause 23.1 the Lender may in good faith allocate or spread costs
and/or losses among its assets and liabilities (or any class thereof) on such basis as it
considers appropriate.
	 
	23.2	 	Payment of increased costs. The Borrower shall pay to the Lender, on the Lender’s demand,
for the account of the Lender the amounts which the Lender from time to time notifies the
Borrower that it has specified to be necessary to compensate the Lender for the increased
cost.
	 
	23.3	 	Notice of prepayment. If the Borrower is not willing to continue to compensate the Lender
for the increased cost under Clause 23.2, the Borrower may give the Lender not less than 14
days’ notice of their intention to prepay the Loan at the end of an Interest Period.
	 
	23.4	 	Prepayment. A notice under Clause 23.3 shall be irrevocable and on the date specified in its
notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the
Loan, together with accrued interest thereon at the applicable rate plus the applicable Margin
and the Mandatory Cost (if any).
	 
	23.5	 	Application of prepayment. Clause 7 shall apply in relation to the prepayment.
	 
	24	 	SET-OFF
	 
	24.1	 	Application of credit balances. The Lender may without prior notice:
	 
	(a)	 	apply any balance (whether or not then due) which at any time stands to the credit of any
account in the name of the Borrower at any office in any country of the Lender in or towards
satisfaction of any sum then due from the Borrower to the Lender under any of the Finance
Documents; and
	 
	(b)	 	for that purpose:

	 	(i)	 	break, or alter the maturity of, all or any part of a deposit of the Borrower;
	 
	 	(ii)	 	convert or translate all or any part of a deposit or other credit balance into
Dollars;
	 
	 	(iii)	 	enter into any other transaction or make any entry with regard to the credit
balance which the Lender considers appropriate.

	24.2	 	Existing rights unaffected. The Lender shall not be obliged to exercise any of its rights
under Clause 24.1; and those rights shall be without prejudice and in addition to any right of
set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any document).

43

 

	24.3	 	No Security Interest. This Clause 24 gives the Lender a contractual right of set-off only,
and does not create any equitable charge or other Security Interest over any credit balance of
the Borrower.
	 
	25	 	TRANSFERS AND CHANGES IN LENDING OFFICES
	 
	25.1	 	Transfer by Borrower. The Borrower may not transfer, novate or assign any of its rights,
liabilities or obligations under any Finance Document.
	 
	25.2	 	Assignment by Lender. The Lender may assign or transfer (at the Lender’s cost) all or any of
the rights and interests which it has under or by virtue of the Finance Documents by giving
notice to the Borrower.
	 
	25.3	 	Rights of assignee. In respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document, or any misrepresentation made in or in connection with a
Finance Document, a direct or indirect assignee of any of the Lender’s rights or interests
under or by virtue of the Finance Documents shall be entitled to recover damages by reference
to the loss incurred by that assignee or, as the case may be, transferee as a result of the
breach or misrepresentation irrespective of whether the Lender would have incurred a loss of
that kind or amount.
	 
	25.4	 	Sub-participation; subrogation assignment. The Lender may sub-participate all or any part of
its rights and/or obligations under or in connection with the Finance Documents without the
consent of the Borrower and the Lender may assign, in any manner and terms agreed by it, all
or any part of those rights to an insurer or surety who has become subrogated to them.
	 
	25.5	 	Disclosure of information. The Lender may disclose to a potential assignee or
sub-participant any information which the Lender has received in relation to the Borrower, any
other Security Party or their affairs under or in connection with any Finance Document, unless
the information is clearly of a confidential nature.
	 
	25.6	 	Change of lending office. The Lender may change its lending office by giving notice to the
Borrower and the change shall become effective on the later of:
	 
	(a)	 	the date on which the Borrower receives the notice; and
	 
	(b)	 	the date, if any, specified in the notice as the date on which the change will come into
effect.
	 
	26	 	VARIATIONS AND WAIVERS
	 
	26.1	 	Variations, waivers etc. by Lender. A document shall be effective to vary, waive, suspend or
limit any provision of a Finance Document, or the Lender’s rights or remedies under such a
provision or the general law, only if the document is signed, or specifically agreed to by fax
or telex, by the Borrower and the Lender and, if the document relates to a Finance Document to
which a Security Party is party, by that Security Party.
	 
	26.2	 	Exclusion of other or implied variations. Except for a document which satisfies the
requirements of Clause 26.1, no document, and no act, course of conduct, failure or neglect to
act, delay or acquiescence on the part of the Lender (or any person acting on its behalf)
shall result in the Lender (or any person acting on its behalf) being taken to have varied,
waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing,
relying on or exercising:
	 
	(a)	 	a provision of this or any other Finance Document; or
	 
	(b)	 	an Event of Default; or

44

 

	(c)	 	a breach by the Borrower or a Security Party of an obligation under a Finance Document or the
general law; or
	 
	(d)	 	any right or remedy conferred by any Finance Document or by the general law;
	 
	 	 	and there shall not be implied into any Finance Document any term or condition requiring any
such provision to be enforced, or such right or remedy to be exercised, within a certain or
reasonable time
	 
	27	 	NOTICES
	 
	27.1	 	General. Unless otherwise specifically provided, any notice under or in connection with any
Finance Document shall be given by letter or fax and references in the Finance Documents to
written notices, notices in writing and notices signed by particular persons shall be
construed accordingly.
	 
	27.2	 	Addresses for communications. A notice shall be sent:

	 	 	 	 	 

	(a)

	 	to the Borrower:
	 	c/o the Approved Manager
	 

	 	 	 	83, Akti Miaouli & Flessa Street
	 

	 	 	 	Piraeus 185 38
	 

	 	 	 	Greece
	 
	 	 	 	 
	 

	 	 	 	Fax No: +30 210 428 8501
	 
	 	 	 	 
	(b)

	 	to the Lender:
	 	Woolgate Exchange
	 

	 	 	 	25 Basinghall Street
	 

	 	 	 	London EC 2V 5HA
	 

	 	 	 	United Kingdom
	 
	 	 	 	 
	 

	 	 	 	Fax No: +44 207 020 8116
	 

	 	 	 	Attention: Shipping

		 	or to such other address as the relevant party may notify the Lender or, if the relevant
party is the Lender, the Borrower, the Lender and the Security Parties.
	 
	27.3	 	Effective date of notices. Subject to Clauses 27.4 and 27.5:
	 
	(a)	 	a notice which is delivered personally or posted shall be deemed to be served, and shall take
effect, at the time when it is delivered;
	 
	(b)	 	a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours
after its transmission is completed.
	 
	27.4	 	Service outside business hours. However, if under Clause 27.3 a notice would be deemed to be
served:
	 
	(a)	 	on a day which is not a Business Day in the place of receipt; or
	 
	(b)	 	on such a Business Day, but after 5 p.m. local time;
	 
	 	 	the notice shall (subject to Clause 27.5) be deemed to be served, and shall take effect, at
9 a.m. on the next day which is such a business day.
	 
	27.5	 	Illegible notices. Clauses 27.4 and 27.5 do not apply if the recipient of a notice notifies
the sender within 1 hour after the time at which the notice would otherwise be deemed to be
served that the notice has been received in a form which is illegible in a material respect.

45

 

	27.6	 	Valid notices. A notice under or in connection with a Finance Document shall not be invalid
by reason that its contents or the manner of serving it do not comply with the requirements of
this Agreement or, where appropriate, any other Finance Document under which it is served if:
	 
	(a)	 	the failure to serve it in accordance with the requirements of this Agreement or other
Finance Document, as the case may be, has not caused any party to suffer any significant loss
or prejudice; or
	 
	(b)	 	in the case of incorrect and/or incomplete contents, it should have been reasonably clear to
the party on which the notice was served what the correct or missing particulars should have
been.
	 
	27.7	 	English language. Any notice under or in connection with a Finance Document shall be in
English.
	 
	27.8	 	Meaning of “notice”. In this Clause 27 “notice” includes any demand, consent, authorisation,
approval, instruction, waiver or other communication.
	 
	28	 	SUPPLEMENTAL
	 
	28.1	 	Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give
to the Lender are:
	 
	(a)	 	cumulative;
	 
	(b)	 	may be exercised as often as appears expedient; and
	 
	(c)	 	shall not, unless a Finance Document explicitly and specifically states so, be taken to
exclude or limit any right or remedy conferred by any law.
	 
	28.2	 	Severability of provisions. If any provision of a Finance Document is or subsequently
becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or
legality of the other provisions of that Finance Document or of the provisions of any other
Finance Document.
	 
	28.3	 	Counterparts. A Finance Document may be executed in any number of counterparts.
	 
	28.4	 	Third party rights. A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of
this Agreement.
	 
	29	 	LAW AND JURISDICTION
	 
	29.1	 	English law. This Agreement and any non-contractual obligations arising out of or in
connection with it shall be governed by, and construed in accordance with, English law.
	 
	29.2	 	Exclusive English jurisdiction. Subject to Clause 29.3, the courts of England shall have
exclusive jurisdiction to settle any Dispute.
	 
	29.3	 	Choice of forum for the exclusive benefit of the Lender. Clause 29.2 is for the exclusive
benefit of the Lender, each of which reserves the right:
	 
	(a)	 	to commence proceedings in relation to any Dispute in the courts of any country other than
England and which have or claim jurisdiction to that Dispute; and

46

 

	(b)	 	to commence such proceedings in the courts of any such country or countries concurrently with
or in addition to proceedings in England or without commencing proceedings in England.
	 
	 	 	The Borrower shall not commence any proceedings in any country other than England in
relation to a Dispute.
	 
	29.4	 	Process Agent. The Borrower irrevocably appoints HFW Nominees Limited at its office for the
time being, presently at Friary Court, 65 Crutched Friars, London EC3N 2AE, England to act as
its agent to receive and accept on its behalf any process or other document relating to any
proceedings in the English courts which are connected with a Dispute.
	 
	29.5	 	Lender’s rights unaffected. Nothing in this Clause 29 shall exclude or limit any right which
the Lender may have (whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of process, the recognition
or enforcement of a judgment or any similar or related matter in any jurisdiction.
	 
	29.6	 	Meaning of “proceedings”. In this Clause 29, “proceedings” means proceedings of any kind,
including an application for a provisional or protective measure and a “Dispute” means any
dispute arising out of or in connection with this Agreement (including a dispute relating to
the existence, validity or termination of this Agreement) or any non-contractual obligation
arising out of or in connection with this Agreement.
	 
	THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

47

 

EXECUTION PAGE

BORROWER

	 	 	 	 	 	 	 	 	 
	SIGNED
by Michail Zolotas
	 	 	)	 	/s/ Michail Zolotas 	 	 	 
	for and on behalf of
	 	 	)	 	 	 	 	
	GRAND VICTORIA PTE. LTD.
	 	 	)	 	 	 	 	 
	in the
presence of: Katerina Naoum
	 	 	)	 	/s/ Katerina Naoum	 	 	 
	 
	LENDER
	 
	SIGNED
by Alexia Hatzimichalis
	 	 	)	 	/s/ Alexia Hatzimichalis 	 	 	 
	for and on behalf of
	 	 	)	 	 	 	 	
	WESTLB AG, LONDON BRANCH
	 	 	)	 	 	 	 	 
	in the
presence of: Katerina Naoum
	 	 	)	 	/s/ Katerina Naoum	 	 	 

48

 

SCHEDULE 1

DRAWDOWN NOTICE

	 	 	 

	To:

	 	WEST LB AG, LONDON BRANCH
	 

	 	Woolgate Exchange
	 

	 	25 Basinghall Street
	 

	 	London EC2V 5HA
	 

	 	England

Attention: Shipping

2010

DRAWDOWN NOTICE

	1	 	We refer to the loan agreement (the “Loan Agreement”) dated 16 October 2007 (as novated,
amended and restated by the Deed of Novation, Amendment and Restatement dated [l] 2010)
and made between ourselves, as Borrower, and yourselves, as Lender, in connection with a
facility of up to $27,500,000. Terms defined in the Loan Agreement have their defined
meanings when used in this Drawdown Notice.
	 
	2	 	We request to borrow the Loan as follows:
	 
	(a)	 	Amount of Loan: $[l].
	 
	(b)	 	Drawdown Date: [      ] 200[l].
	 
	(c)	 	Duration of the first Interest Period shall be [l] months;
	 
	(d)	 	Payment instructions : account of [l] and numbered [l] with [l] of
[l].
	 
	3	 	We represent and warrant that:
	 
	(a)	 	the representations and warranties in Clause 9 of the Loan Agreement would remain true and
not misleading if repeated on the date of this notice with reference to the circumstances now
existing;
	 
	(b)	 	no Event of Default has occurred or will result from the borrowing of the Loan.
	 
	4	 	This notice cannot be revoked without the prior consent of the Lender.

 

For and on behalf of

GRAND VICTORIA PTE. LTD.

49

 

SCHEDULE 2

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 8.1(a).

	1	 	A duly executed original of this Agreement, the Deed of Novation, Amendment and Restatement,
the Corporate Guarantee, the Indemnity and Undertaking by Grandunion and the Accounts Pledge
(and of each document required to be delivered pursuant thereto).
	 
	2	 	Copies of the certificate of incorporation and constitutional documents of the Borrower and
each Security Party.
	 
	3	 	Copies of resolutions of the shareholders and directors of the Borrower and each Security
Party authorising the execution of each of the Finance Documents referred to at paragraph 1
above to which the Borrower and that Security Party is a party and, in the case of the
Borrower, authorising named officers to give the Drawdown Notice and other notices under this
Agreement.
	 
	4	 	The original of any power of attorney under which any Finance Document referred to at
paragraph 1 above is executed on behalf of the Borrower and each Security Party.
	 
	5	 	Copies of all consents which the Borrower or any other Security Party requires to enter into,
or make any payment under, any Finance Document.
	 
	6	 	The originals of any mandates or other documents required in connection with the opening of
operation of each of the Earnings Account and the Holding Account and in relation to the
Lender’s “know your customer” regulations (whether in connection with the opening of the each
of the Earnings Account and the Holding Account or otherwise).
	 
	7	 	Evidence that the Borrower is a wholly-owned indirect subsidiary of Grandunion.
	 
	8	 	Documentary evidence that the agent for service of process named in Clause 29 has accepted
its appointment.
	 
	9	 	Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the
laws of Singapore, the Republic of the Marshall Islands, Bermuda and such other relevant
jurisdictions as the Lender may require.
	 
	10	 	If the Lender so requires, in respect of any of the documents referred to above, a certified
English translation prepared by a translator approved by the Lender.

50

 

PART B

The following are the documents referred to in Clause 8.1(b).

	1	 	A duly executed original of each of the Mortgage, the Deed of Covenant, the General
Assignment, the Charterparty Assignment and the Shares Pledge Option Agreement, the Indemnity
and Undertaking by Newlead (and of each document to be delivered pursuant to each of them).
	 
	2	 	Documentary evidence that:
	 
	(a)	 	the Ship is definitively and permanently registered in the name of the Borrower under the
Singapore flag;
	 
	(b)	 	the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated
by the Finance Documents to which the Borrower is a party;
	 
	(c)	 	the Ship maintains the highest class available for vessels of the same type, age and
characteristics as the Ship with a classification society, approved by the Lender, which is a
member of IACS, free of any outstanding or overdue recommendations and conditions of such
classification society affecting the Ship’s class (other than outstanding recommendations and
conditions notified to the lender in the writing prior to the date of this Agreement;
	 
	(d)	 	the Mortgage has been duly registered against the Ship as a valid first priority ship
mortgage in accordance with the laws of Singapore; and
	 
	(e)	 	the Ship is insured in accordance with the provisions of this Agreement and all requirements
therein in respect of insurances have been complied with.
	 
	3	 	Documents establishing that the Ship is or will be managed by the Approved Manager on terms
acceptable to the Lender, together with:
	 
	(a)	 	the Approved Manager’s Undertaking in relation to the Ship duly signed by the Approved
Manager;
	 
	(b)	 	copies of the Approved Manager’s document of compliance (DOC) and the safety management
certificate (SMC) in respect of the Ship referred to in paragraph (a) of the definition of the
ISM Code Documentation certified as true and in effect by the Borrower and the Approved
Manager; and
	 
	(c)	 	a copy of the International Ship Security Certificate in respect of the Ship certified as
true and in effect by the Borrower and the Approved Manager.
	 
	4	 	A copy of the Approved Charter.
	 
	5	 	Two valuations of the Ship (at the cost of the Borrower), each from an Approved Broker dated
not earlier than 10 days before the Drawdown Date and prepared in accordance with Clause 14.4.
	 
	6	 	Favourable opinions from an independent insurance consultant acceptable to the Lender on such
matters relating to the insurances for the Ship as the Lender may require.
	 
	7	 	Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the
laws of Singapore and such other relevant jurisdictions as the Lender may require.

51

 

	 	 	Every copy document delivered under this Schedule shall be certified as a true and up to date copy
by a director or the secretary (or equivalent officer) of the Borrower.

52

 

SCHEDULE 3

MANDATORY COST FORMULA

	1	 	The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost
of compliance with (a) the requirements of the Financial Services Authority (or any other
authority which replaces all or any of its functions) or (b) the requirements of the European
Central Bank.
	 
	2	 	On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall
calculate, as a percentage rate, a rate (the “Additional Cost
Rate”) for the Lender, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the
Lender and will be expressed as a percentage rate per annum.
	 
	3	 	The Additional Cost Rate for the Lender lending from a lending office in a Participating
Member State will be the percentage certified by the Lender to be its reasonable determination
of the cost of complying with the minimum reserve requirements of the European Central Bank in
respect of loans made from that lending office.
	 
	4	 	The Additional Cost Rate for the Lender lending from a lending office in the United Kingdom
will be calculated by the Lender as follows:

	 	 	 	 	 

	 

	 	E x 0.01
	 	per cent. per annum
	 

	 	300	 	 

	 	 	Where:

	 	E 	 	is designed to compensate the Lender for amounts payable under the Fees Rules
and is calculated by the Lender as being the average of the most recent rates of charge
supplied to the Lender pursuant to paragraph 6 below and expressed in pounds per
£1,000,000.

	5	 	For the purposes of this Schedule:
	 
	(a)	 	“Special Deposits” has the meaning given to it from time to time under or pursuant to the
Bank of England Act 1998 or (as may be appropriate) by the Bank of England;
	 
	(b)	 	“Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or
such other law or regulation as may be in force from time to time in respect of the payment of
fees for the acceptance of deposits;
	 
	(a)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees
Rules but taking into account any applicable discount rate);
	 
	(b)	 	“Participating Member State” means any member state of the European Union that adopts or has
adopted the euro as its lawful currency in accordance with legislation of the European Union
relating to European Monetary Union; and

53

 

	(c)	 	“Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the
Fees Rules.
	 
	6	 	If the Lender is lending from a lending office in the United Kingdom shall, as soon as
practicable after publication by the Financial Services Authority, calculate, the rate of
charge payable by the Lender to the Financial Services Authority pursuant to the Fees Rules in
respect of the relevant financial year of the Financial Services Authority (calculated for
this purpose by the Lender as being the average of the Fee Tariffs applicable to the Lender
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of the
Lender.
	 
	7	 	The Lender shall confirm the jurisdiction of its lending office on or prior to the date on
which it makes available the Loan:
	 
	8	 	Unless a Lender notifies to the contrary, the Lender’s obligations in relation to cash ratio
deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of
incorporation with a lending office in the same jurisdiction as its lending office.
	 
	9	 	Any determination by the Lender pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to the Lender shall, in the
absence of manifest error, be conclusive and binding on all parties.

The Lender may from time to time, after consultation with the Borrower determine and notify to all
parties any amendments which are required to be made to this Schedule in order to comply with any
change in law, regulation or any requirements from time to time imposed by the Financial Services
Authority or the European Central Bank (or, in any case, any other authority which replaces all or
any of its functions) and any such determination shall, in the absence of manifest error, be
conclusive and binding on the Borrower.

54exv10w6

Exhibit 10.6

	 	 	 

	Private and Confidential

	 	Draft (2): 16 March 2010
	 
	 	 
	 

	 	YIC/MGKA/AT02021
	 
	 	 
	 

	 	Restated Loan Agreement

DATED 19 March 2008

LOAN AGREEMENT

for a

Loan of up to USD 76,000,000

to

CHALLENGER ENTERPRISES LTD.

and

CRUSADER ENTERPRISES LTD.

provided by

PIRAEUS BANK A.E.

1

 

Contents

	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	1	 	Purpose and definitions 
	 	 	3	 
	 	 	 
	 	 	 	 
	2	 	The loan and use of proceeds 
	 	 	20	 
	 	 	 
	 	 	 	 
	3	 	Interest and Interest Periods 
	 	 	21	 
	 	 	 
	 	 	 	 
	4	 	Repayment and prepayment 
	 	 	23	 
	 	 	 
	 	 	 	 
	5	 	Fees, commitment commission and expenses 
	 	 	26	 
	 	 	 
	 	 	 	 
	6	 	Payments and taxes; accounts and calculations 
	 	 	26	 
	 	 	 
	 	 	 	 
	7	 	Representations and warranties 
	 	 	29	 
	 	 	 
	 	 	 	 
	8	 	Undertakings 
	 	 	34	 
	 	 	 
	 	 	 	 
	9	 	Conditions 
	 	 	41	 
	 	 	 
	 	 	 	 
	10	 	Events of Default 
	 	 	42	 
	 	 	 
	 	 	 	 
	11	 	Indemnities 
	 	 	47	 
	 	 	 
	 	 	 	 
	12	 	Unlawfulness and increased costs 
	 	 	48	 
	 	 	 
	 	 	 	 
	13	 	application of moneys, set off, pro-rata payments and miscellaneous 
	 	 	49	 
	 	 	 
	 	 	 	 
	14	 	Accounts 
	 	 	51	 
	 	 	 
	 	 	 	 
	15	 	Assignment, transfer and lending office 
	 	 	53	 
	 	 	 
	 	 	 	 
	16	 	Notices and other matters 
	 	 	54	 
	 	 	 
	 	 	 	 
	17	 	Borrowers’obligations 
	 	 	55	 
	 	 	 
	 	 	 	 
	18	 	Governing law 
	 	 	57	 
	 	 	 
	 	 	 	 
	19	 	Jurisdiction 
	 	 	57	 
	 	 	 
	 	 	 	 
	Schedule 1 Form of Drawdown Notice	 	 	60	 
	 	 	 
	 	 	 	 
	Schedule 2 Conditions Precedent	 	 	61	 

2

 

THIS AGREEMENT is dated 19 March 2008, as amended and supplemented by a first supplemental
agreement dated 26 February 2009 and as further amended, restated and supplemented by a second
supplemental agreement dated [•] 2010 and made BETWEEN:

	(1)	 	CHALLENGER ENTERPRISES LTD. and CRUSADER ENTERPRISES LTD. as joint and several Borrowers;
	 
	(2)	 	PIRAEUS BANK A.E. as Lender.

IT IS AGREED as follows:

	1	 	PURPOSE AND DEFINITIONS
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions upon which the Lender agrees to make
available to the Borrowers, jointly and severally, in two advances, a loan of up to
seventy six million Dollars (USD76,000,000) for the purpose of financing part of the
acquisition cost of “HIOTISSA” and “HIONA”.
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	“Accounts” means, together, the Operating Accounts and the Retention Account;
	 
	 	 	“Advance” means each of Advance A and Advance B, and in the plural means both of them;
	 
	 	 	“Advance A” means the lesser of (i) thirty eight million Dollars (USD38,000,000) and (ii)
80% of the gross purchase price of “HIONA” payable under the Hiona MOA and, as the context
may require, means the principal amount thereof owing to the Lender under this Agreement
at any relevant time;
	 
	 	 	“Advance B” means the lesser of (i) thirty eight million Dollars (USD38,000,000) and (ii)
80% of the gross purchase price of “HIOTISSA” payable under the Hiotissa MOA and, as the
context may require, means the principal amount thereof owing to the Lender under this
Agreement at any relevant time;
	 
	 	 	“Acquisition” means the acquisition by the HoldCo Guarantor of all the issued shares in
the Borrowers and the Collateral Guarantor, in a manner in all respects satisfactory to
the Lender;
	 
	 	 	“Backstop Acquisition Date” means the date falling thirty (30) days after the date of the
Second Supplemental Agreement, or such other later date as the Lender may agree in its
sole discretion;
	 
	 	 	“Banking Day” means a day on which dealings in deposits in USD are carried on in the London
Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks are open
for business in Piraeus, London and New York City (or any other relevant place of payment
under clause 6);

3

 

	 	 	“Basel 2 Accord” means the “International Convergence of Capital Measurement and Capital
Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in
June 2004 in the form existing on the date of this Agreement;
	 
	 	 	“Basel 2 Approach” means either the Standardised Approach or the relevant Internal Ratings
Based Approach (each as defined in the Basel 2 Accord) adopted by the Lender (or its
holding company) for the purposes of implementing or complying with the Basel 2 Accord;
	 
	 	 	“Basel 2 Regulation” means (a) any law or regulation implementing the Basel 2 Accord or (b)
any Basel 2 Approach adopted by the Lender;
	 
	 	 	“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 each of Challenger Enterprises Ltd. (“Challenger”) and Crusader
Enterprises Ltd. (“Crusader”), each being a corporation incorporated in the Republic of
Liberia and having its registered office at 80 Broad Street, Monrovia, Republic of Liberia
and each individually hereafter called by their names in parenthesis above and “Borrowers”
means both of them;
	 
	 	 	“Borrower’s General Assignment” means, in respect of each Borrower’s Ship, each deed of
assignment of such Ship’s earnings, insurances and requisition compensation dated 4 April
2008 (in case of “HIONA”) or 21 April 2008 (in the case of “HIOTISSA”) executed by the
relevant Borrower in favour of the Lender and “Borrowers’ General Assignments” means both
of them;
	 
	 	 	“Borrowers’ Mortgage” means, in relation to each Borrower’s Ship, the first preferred Greek
Ship mortgage of such Ship dated 4 April 2008 (in the case of “HIONA”) or 21 April 2008 (in
the case of “HIOTISSA”) executed by the relevant Borrower in favour of the Lender each as
amended by the relevant First Mortgage Addendum and the relevant Second Mortgage Addendum,
and “Borrowers’ Mortgages” means both of them;
	 
	 	 	“Borrower’s Operating Account” means, in relation to each Borrower, an interest bearing
USD account opened by that Borrower with the Lender and includes any sub-accounts thereof
and any other account designated in writing by the Lender to be a Borrower’s Operating
Account for the purposes of this Agreement and “Borrowers’ Operating Accounts” means both
of them;
	 
	 	 	“Borrower’s Operating Account Charge” means, in respect of each Borrower’s Operating
Account, the first priority account pledge dated 19 March 2008 executed between the
relevant Borrower and the Lender in respect of that Borrower’s Operating Account and
“Borrowers’ Operating Account Charges” means both of them;

4

 

	 	 	“Borrower’s Ship” means each of “HIONA” and “HIOTISSA” and “Borrowers’ Ships” means both of
them;
	 
	 	 	“Borrowers’ Ship Security Documents” means, in relation to each Borrower’s Ship, the
relevant Borrower’s Mortgage, the relevant Borrower’s General Assignment and the relevant
Manager’s Undertaking in respect of such Ship;
	 
	 	 	“Break Costs” means the aggregate amount of all losses, premiums, penalties, costs and
expenses whatsoever certified by the Lender at any time and from time to time as having
been incurred by it in maintaining or funding the Loan or in liquidating or re employing
fixed deposits acquired to maintain the same as a result of either:

	 	(a)	 	any repayment or prepayment of the Loan or any part thereof otherwise than in
accordance with, respectively, clause 4.1 or clause 4.2 whether on a voluntary or
involuntary basis or otherwise howsoever or
	 
	 	(b)	 	as a result of the Borrowers failing or being incapable of drawing the Loan
after a Drawdown Notice has been given;

	 	 	“Capital Adequacy Law” means any law or any regulation (whether or not having the force of
law, but, if not having the force of law, with which the Lender 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 or other banking or monetary controls or requirements which affect the manner in
which the Lender allocates capital resources to its obligations hereunder (including,
without limitation, those resulting from the implementation or application of or compliance
with the Basel 2 Accord or any Basel 2 Regulation);
	 
	 	 	“Casualty Amount” means, in relation to each Ship, five hundred thousand Dollars
(USD500,000);
	 
	 	 	“Certified Copy” means in relation to any document delivered or issued by or on behalf of
any company, a copy of such document certified as a true, complete and up to date copy of
the original by any of the directors or officers for the time being of such company or by
such company’s attorneys or solicitors;
	 
	 	 	“Charter Assignment” means the specific assignment of any charter in relation to any Ship
required to be executed hereunder by the Owner thereof in favour of the Lender pursuant to
Clause 8.1.17 in such form as the Lender may require in its sole discretion;
	 
	 	 	“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
Lender shall, at the request of an Owner, have agreed in writing shall be treated as the
Classification in relation to such Owner’s Ship for the purposes of the relevant Ship
Security Documents;
	 
	 	 	“Classification Society” means any member of IACS which the Lender shall, at the request
of an Owner, have agreed in writing shall be treated as the Classification Society in
relation to such Owner’s Ship for the purposes of the relevant Ship Security Documents;

5

 

	 	 	“Collateral General Assignment” means the second priority general assignment in respect of
“GRAND OCEAN” executed or (as the context may require) to be executed by the Collateral
Guarantor in favour of the Lender in the form set out in schedule 5 of the Second
Supplemental Agreement;
	 
	 	 	“Collateral Guarantee” means the corporate guarantee executed or (as the context may
require) to be executed by the Collateral Guarantor in favour of the Lender in the form set
out in schedule 3 of the Second Supplemental Agreement;
	 
	 	 	“Collateral Guarantor” means Grand Oceanos Inc. of 80 Broad Street, Monrovia, the Republic
of Liberia and includes its successors in title;
	 
	 	 	“Collateral Guarantor’s Ship Security Documents” means the Collateral Mortgage, the
Collateral General Assignment and the Manager’s Undertaking for “GRAND OCEAN”;
	 
	 	 	“Collateral Mortgage” means the second preferred Liberian mortgage in respect of “GRAND
OCEAN” executed or (as the context may require) to be executed by the Collateral Guarantor
in favour of the Lender in the form set out in schedule 4 of the Second Supplemental
Agreement;
	 
	 	 	“Collateral Operating Account” means an interest bearing USD account opened by the
Collateral Guarantor with the Lender and includes any sub-accounts thereof and any other
account designated in writing by the Lender to be a Collateral Operating Account for the
purposes of this Agreement;
	 
	 	 	“Collateral Operating Account Charge” means the second priority account pledge in respect
of the Collateral Operating Account executed or (as the context may require) to be executed
by the Collateral Guarantor in favour of the Lender in such form as the Lender may require
in its sole discretion;
	 
	 	 	“Commitment” means the amount of up to USD76,000,000 which the Lender has agreed to make
available under and in accordance with the terms of this Agreement;
	 
	 	 	“Corporate Guarantee” means:

	 	(a)	 	from the Execution Date until the due execution and delivery of the HoldCo
Guarantee under the terms of this Agreement, the corporate guarantee dated 19 March
2008 executed by GrandUnion in favour of the Lender;
	 
	 	(b)	 	from the Acquisition and at all times thereafter, the HoldCo Guarantee;

	 	 	“Corporate Guarantor” means:

	 	(a)	 	from the Execution Date until the due execution and delivery of the HoldCo
Guarantee under the terms of this Agreement, GrandUnion;
	 
	 	(b)	 	from the Acquisition and at all times thereafter, the HoldCo Guarantor;

6

 

	 	 	“Corporate Guarantor’s Group” means:

	 	(a)	 	from the Execution Date until the Acquisition, GrandUnion and all other
Related Companies of GrandUnion which own a vessel; or
	 
	 	(b)	 	from the Acquisition and at all times thereafter, the HoldCo Guarantor and
all of its Subsidiaries from time to time;

	 	 	“Credit Support Document” has in relation to the Master Agreement, the meaning given to
that expression therein;
	 
	 	 	“Credit Support Provider” means any person defined as such in the Master Agreement;
	 
	 	 	“Default” means any Event of Default or any event or circumstance which with the giving of
notice or lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
	 
	 	 	“Dollars” and “USD” mean the lawful currency of the United States of America and in
respect of all payments to be made under any of the Security Documents 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 any date, being a Banking Day falling during the Drawdown Period, on
which an Advance is, or is to be, advanced to the Borrowers;
	 
	 	 	“Drawdown Notice” means a notice substantially in the form of schedule 2;
	 
	 	 	“Drawdown Period” means the period commencing on the date of this Agreement and ending on
the earlier of 30 April 2008 (or such later date as the Borrowers may request, consent to
which the Lender shall not unreasonably withhold) and any date on which (a) the amount of
the Loan is equal to the Commitment or (b) the Commitment is reduced to zero pursuant to
clauses 10.2 or 12;
	 
	 	 	“Encumbrance” means any mortgage, charge, pledge, lien, hypothecation, assignment, title
retention, preferential right, option, trust arrangement or security interest or other
encumbrance, security or arrangement conferring howsoever a priority of payment in respect
of any obligation of any person;
	 
	 	 	“Environmental Affiliate” means any agent or employee of any Owner or any other Relevant
Company or any person having a contractual relationship with any Owner or any other
Relevant Company 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 Approvals” means all authorisations, consents, licences, permits, exemptions
or other approvals whatsoever required under applicable Environmental Laws;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable Government
Entity alleging breach of, or non-compliance with, any Environmental Laws or Environmental
Approvals or otherwise howsoever relating to or arising out of an Environmental Incident or
(ii) any claim by any other

7

 

	 	 	third party howsoever relating to or arising out of an Environmental Incident (and, in each
such case, “claim” shall include a claim for damages and/or direction for and/or
enforcement relating to clean-up costs, removal, compliance, remedial action or otherwise)
or (iii) any Proceedings arising from any of the foregoing;
	 
	 	 	“Environmental Incident” means, in relation to a Ship, regardless of cause, (i) any actual
or threatened discharge or release of Environmentally Sensitive Material from the Ship;
(ii) any incident in which Environmentally Sensitive Material is discharged or released
from a vessel other than the Ship which involves collision between the Ship and such other
vessel or some other incident of navigation or operation, in either case, where the Ship,
the Manager and/or the relevant Owner and/or the Ship’s operator are actually,
contingently or allegedly at fault or otherwise howsoever liable (in whole or in part) or
(iii) any incident in which Environmentally Sensitive Material is discharged or released
from a vessel other than the Ship and where the Ship is actually or potentially liable to
be arrested as a result and/or where the Manager and/or the relevant Owner and/or the
Ship’s operator are actually, contingently or allegedly at fault or otherwise howsoever
liable;
	 
	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements whatsoever
relating to pollution, human or wildlife well-being or protection of the environment
(including, without limitation, the United States Oil Pollution Act of 1990 and any
comparable laws of the individual States of the United States of America);
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products or any other products or
substance which are polluting, toxic or hazardous or any substance the release of which
into the environment is howsoever regulated, prohibited or penalised by or pursuant to any
Environmental Law;
	 
	 	 	“Event of Default” means any of the events or circumstances listed in clause 10.1;
	 
	 	 	“Execution Date” means the date on which this Agreement has been executed by all the
parties thereto;
	 
	 	 	“Facility Period” means the period starting on the first Drawdown Date and ending on such
date as all obligations whatsoever of all of the Security Parties under or pursuant to the
Security Documents whensoever arising, actual or contingent, have been irrevocably paid,
performed and/or complied with;
	 
	 	 	“First Mortgage Addendum” means, in relation to each Borrower’s Ship, each addendum to the
relevant Borrower’s Mortgage, each dated 20 March 2009 and executed by the relevant
Borrower in favour of the Lender and “First Mortgage Addenda” means both of them;
	 
	 	 	“First Supplemental Agreement” means the agreement dated 26 February 2009 supplemental to
this Agreement made between the Borrowers and the Lender;
	 
	 	 	“General Assignments” means, together, the Borrowers’ General Assignments and the
Collateral General Assignment;
	 
	 	 	“Government Entity” means any national or local government body, tribunal court or
regulatory or other agency and any organisation of which such body, tribunal, court or
agency is a part or to which it is subject;

8

 

	 	 	“GRAND OCEAN” means the [1990]-built bulk carrier “GRAND OCEAN”, of [149,498] dwt and
registered in the ownership of the Collateral Guarantor through the relevant Registry under
the laws and flag of the Republic of Liberia with IMO Number [•];
	 
	 	 	“GrandUnion” means GrandUnion Inc., a corporation organised and existing under the laws of
the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, MH96960, Marshall Islands and includes its successors in title;
	 
	 	 	“Group Member” means any member of the Corporate Guarantor’s Group at any relevant time;
	 
	 	 	“HIONA” means the double-hulled 2004-built chemical tanker “HIONA”, of (approximately)
37,000 dwt, registered in the ownership of Challenger through the relevant Registry under
the laws and flag of Greece with IMO Number [•];
	 
	 	 	“Hiona MOA” means the memorandum of agreement dated 20 February 2008 and made between
Challenger as buyer and the relevant Seller as seller of “HIONA”;
	 
	 	 	“HIOTISSA” means the double-hulled 2003-built chemical tanker “HIOTISSA”, of
(approximately) 37,000 dwt, registered in the ownership of Crusader through the relevant
Registry under the laws and flag of Greece with IMO Number [•];
	 
	 	 	“Hiotissa MOA” means the memorandum of agreement dated 20 February 2008 and made between
Crusader as buyer and the relevant Seller as seller of “HIOTISSA”;
	 
	 	 	“HoldCo Guarantee” means the corporate guarantee executed or (as the context may require)
to be executed by the HoldCo Guarantor in favour of the Lender in the form set out in
schedule 8 of the Second Supplemental Agreement;
	 
	 	 	“HoldCo Guarantor” means Newlead Holdings Ltd. of [•], Bermuda and includes its
successors in title;
	 
	 	 	“Indebtedness” means any obligation howsoever arising (whether present or future, actual
or contingent, secured or unsecured as principal, surety or otherwise) for the payment or
repayment of money;
	 
	 	 	“Interest Expense” means, for any relevant financial year, the aggregate interest payable
by the Corporate Guarantor’s Group and any member thereof on any Indebtedness during such
period;
	 
	 	 	“Interest Payment Date” means the last day of an Interest Period and, if an Interest
Period is longer than 3 months, the date falling at the end of each successive period of 3
months during such Interest Period starting from its commencement;
	 
	 	 	“Interest Period” means each period for the calculation of interest in respect of the Loan
ascertained in accordance with clauses 3.2 and 3.3;
	 
	 	 	“ISM Code” means in relation to its application to an Owner, a Ship and its operation the
International Management Code for the Safe Operation of Ships and for Pollution
Prevention’, currently known or referred to as the ‘ISM Code’, adopted by the Assembly of
the International Maritime Organisation by Resolution

9

 

	 	 	A.741(18) on 4th July 1993 and incorporated on 19th May 1994 into
chapter IX of the International Convention for the Safety of Life at Sea 1974 (SOLAS 1974);
and all further resolutions, circulars, codes, guidelines, regulations and recommendations
which are now or in the future issued by or on behalf of the International Maritime
Organisation or any other entity with responsibility for implementing the ISM Code,
including without limitation, the ‘Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations’ produced by the
International Maritime Organisation pursuant to Resolution A.788(19) adopted on
25th July 1995 as the same may be amended, supplemented or replaced from time to
time;
	 
	 	 	“ISM Code Documentation” means, in relation to each Ship, the document of compliance (DOC)
and safety management certificate (SMC) issued by a Classification Society pursuant to the
ISM Code in relation to such Ship within the periods specified by the ISM Code;
	 
	 	 	“ISM SMS” means the safety management system which is required to be developed,
implemented and maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Security Code of the International
Maritime Organisation and includes any amendments or extensions thereto and any
regulations issued pursuant thereto;
	 
	 	 	“ISSC” means an International Ship Security Certificate issued in respect of each Ship
pursuant to the ISPS Code;
	 
	 	 	“Latest Accounts” means, in respect of any financial half-year or year of the Corporate
Guarantor’s Group, the latest unaudited (in respect of each financial half-year) or audited
(in respect of each financial year) financial statements required to be prepared pursuant
to clause 8.1.6;
	 
	 	 	“Lender” means Piraeus Bank A.E. acting through its branch at 47-49 Akti Miaouli, 185 36
Piraeus, Greece;
	 
	 	 	“Letters of Undertaking” means, together, each of the two (2) letters of undertaking in
the form set out in schedule 9 of the Second Supplemental Agreement, one executed or (as
the context may require) to be executed by each Sponsor in favour of the Lender;
	 
	 	 	“LIBOR” means, in relation to any amount and for any period, the offered rate (if any) for
deposits of Dollars for such amount and for such period which is:

	 	(a)	 	(subject to paragraphs (b) and (c) below) the rate for such period, appearing
on Reuters page LIBOR01 (British Bankers’ Association Interest Settlement Rates) (or
such other page as may replace such page LIBOR 01 on such system or on any other
system of the information vendor for the time being designated by the British Bankers’
Association to calculate the BBA Interest Settlement Rate (as defined in the British
Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS” terms)) at or about
11:00 a.m. (London time) on the Quotation Date for such period (or, if the Lender
shall have made

10

 

	 	 	 	a determination pursuant to clause 3.6, such later time (not being later than 1:00
p.m. (London time) on the first day of such period) as the Lender may determine); or
	 
	 	(b)	 	(subject to paragraph (c) below) if the Lender has advised the Borrowers that
the rate referred to in paragraph (a) above is not displayed on the Reuters screen on
the relevant day or that the Reuters screen is not operating on the relevant day or
that no such offered rate appears on the Reuters screen at the relevant time or that
such rate does not accurately reflect the cost to the Lender of obtaining such
deposits on that day for the purpose of funding the Loan or any part of it, then LIBOR
shall be:

	 	(i)	 	the rate determined by the Lender to be the arithmetic mean of
the rates offered in the London Interbank Market for deposits in Dollars for
such period, as the same are published by the British Bankers’ Association at or
about 11.00 a.m. on the Quotation Date for such period on the corresponding
electronic pages of KLIEMM (Carl Kliem GmgH), USDDEPO=ICAP (Icap Plc) and
USDDEPO=TTKL (Tullett Prebon Plc) on the Reuters screen. If on any day only two
such pages or only one such page publish such rate, then the rate applicable
shall be the rate determined by the Lender to be the arithmetic mean of such two
published rates or, in the event that only one such rate is published, such
rate; or
	 
	 	(ii)	 	in the event that the rate referred to in paragraph (a) above is
displayed on the Reuters screen and is higher than the rate referred to in
paragraph (i) above, such higher rate; or

	 	(c)	 	if the Lender has advised the Borrowers that none of the rates referred to in
paragraph (b) above are displayed on the Reuters screen on the relevant day and time
or that the rate referred to in paragraph (b) above does not accurately reflect the
cost to the Lender of obtaining such deposits for the purpose of funding the Loan or
any part of it, then LIBOR shall be the rate (rounded upwards to four decimal places)
determined by the Lender to be the rate at which deposits of Dollars for such period
are being offered by banks in the London Interbank Market to the Lender at or about
11:00 a.m. (London time) on the Quotation Date for such period (or, if the Lender
shall have made a determination pursuant to clause 3.6, such later time (not being
later than 1:00 p.m. (London time) on the first day of such period) as the Lender may
determine).

	 	 	If any of the agreed pages above is replaced or the service ceases to be available, the
Lender may specify another page or service displaying the appropriate rate after
consultation with the Borrowers. Any determinations made by the Lender under and for the
purposes of this definition of “LIBOR” shall be made in its absolute discretion and in the
absence of manifest error shall be binding and conclusive on the Borrowers;
	 
	 	 	“Loan” means the amount which shall not exceed seventy six million Dollars (USD76,000,000)
and shall be equal to the aggregate of (a) the lesser of (i) thirty eight million Dollars
(USD38,000,000), (ii) 80% of the gross purchase price of “HIONA” payable under the Hiona
MOA and (b) the lesser of (i) thirty eight million Dollars (USD38,000,000) and (ii) 80% of
the gross purchase price of “HIOTISSA” payable under the Hiotissa MOA or, as the context
may require, the aggregate principal amount owing to the Lender under this Agreement at
any relevant time;

11

 

	 	 	“Management Agreement” means:

	 	(a)	 	in relation to each Borrower’s Ship, the agreement dated 4 April 2008 (in the
case of “HIONA”) or the agreement dated 21 April 2008 (in the case of “HIOTISSA”),
executed by the relevant Manager and the relevant Borrower, providing (inter alia) for
the relevant Manager to manage such Borrower’s Ship; and
	 
	 	(b)	 	in relation to “GRAND OCEAN”, the agreement dated [•], executed by the
relevant Manager and the Collateral Guarantor, providing (inter alia) for the relevant
Manager to manage “GRAND OCEAN”,

	 	 	and “Management Agreements” means both of them;
	 
	 	 	“Manager” means:

	 	(a)	 	in respect of each Borrower’s Ship, Newlead Shipping S.A. of [•]; and
	 
	 	(b)	 	in respect of the Collateral Ship, Newlead Bulkers S.A. of [•],

		 	or, in each case, such other person appointed by an Owner, with the prior written consent
of the Lender, as the manager of such Owner’s Ship and “Managers” means both of them;
	 
	 	 	“Manager’s Undertaking” means:

	 	(a)	 	in relation to each Borrower’s Ship, the manager’s undertaking and assignment
dated 4 April 2008 (in the case of “HIONA”) or 21 April 2008 (in the case of
“HIOTISSA”), each executed by the relevant Manager in favour of the Lender; and
	 
	 	(b)	 	in relation to “GRAND OCEAN”, the manager’s undertaking and assignment
executed or (as the context may require) to be executed by the relevant Manager in
favour of the Lender, in the form set out in schedule 6 of the Second Supplemental
Agreement,

	 	 	and “Managers Undertakings” means both of them;
	 
	 	 	“Marketable Securities” means stocks, shares and securities quoted on a recognised stock
exchange;
	 
	 	 	“Margin” means:

	 	(a)	 	from the Execution Date until [•] 2009, one point three five per cent
(1.35%) per annum;
	 
	 	(b)	 	from [•] 2009 until [insert 1 day before date of Second Supplemental
Agreement] 2010, two point two five per cent (2.25%) per annum; and
	 
	 	(c)	 	from [insert date of Second Supplemental Agreement] 2010 and at all times
thereafter, three point five zero per cent (3.50%) per annum;
	 
	 	“Market Value” means, in relation to each Ship at any relevant time, the value thereof
most recently 

12

 

	 	 	determined in accordance with Clause 8.2.2;
	 
	 	 	“Master Agreement” means the master agreement (on the 1992 ISDA (Multicurrency
-Crossborder) form and including the Schedule thereto) dated [19 March 2008] made between
the Borrowers and the Lender;
	 
	 	 	“Master Agreement Assignment” means the assignment of the Master Agreement in favour of
the Lender dated [19 March 2008] executed by the Borrowers;
	 
	 	 	“MII Policy” means a mortgagee’s interest and pollution risks insurance policy (including
additional perils pollution cover) in respect of the Ships to be effected by the Lender
from time to time after the date of this Agreement and renewed or replaced from time to
time and maintained throughout the Facility Period through such brokers, with such
underwriters and containing such coverage as may be acceptable to the Lender in its sole
discretion, insuring a sum of at least 110% of the Loan;
	 
	 	 	“Ministerial Decision” means, in relation to each of the Borrowers’ Ships, the joint
Decision of the Ministers of National Economy, Finance and Mercantile Marine of the
Hellenic Republic relating to such Borrower’s Ship;
	 
	 	 	“MOAs” means, together, the Hiona MOA and the Hiotissa MOA;
	 
	 	 	“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 Addenda” means, together, the First Mortgage Addenda and the Second Mortgage
Addenda;
	 
	 	 	“Mortgages” means, together, the Borrowers’ Mortgages and the Collateral Mortgage and
“Mortgage” means any of them;
	 
	 	 	“Mortgaged Ship” means, at any relevant time, a Ship which is at such time subject to a
Mortgage and/or the Earnings, Insurances and Requisition Compensation (each such term as
defined in the relevant Ship Security Documents) 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 regarded as a Mortgaged Ship as from the date that the Mortgage over that
Ship shall have been executed and registered in accordance with this Agreement until
whichever shall be the earlier of (a) the payment in full of the amount required to be paid
to the Lender pursuant to clause 4.3 following the sale or Total Loss of such Ship and (b)
the end of the Facility Period;
	 
	 	 	“Net Worth” means, by reference to the Latest Accounts in respect of the Corporate
Guarantor’s Group, the Total Assets (adjusted for market value) less Total Liabilities of
the Corporate Guarantor’s Group;
	 
	 	 	“Operating Accounts” means, together, the Collateral Operating Account and the Borrowers’
Operating Accounts;

13

 

	 	 	“Operating Account Charges” means, together, the Collateral Operating Account Charge and
the Borrowers’ Operating Account Charges;
	 
	 	 	“Operator” means any person who is from time to time during the Facility Period concerned
in the operation of a Ship and falls within the definition of “Company” set out in rule
1.1.2 of the ISM Code;
	 
	 	 	“Other Loan” means the total principal amount outstanding at any relevant time under the
Other Loan Agreement:
	 
	 	 	“Other Loan Agreement” means the loan agreement dated [•] 2010 in respect of a
$21,000,000 loan facility made between the Collateral Guarantor and the Lender;
	 
	 	 	“Owners” means, together, Challenger, Crusader and the Collateral Guarantor and:

	 	(a)	 	in relation to “HIONA”, it means Challenger;
	 
	 	(b)	 	in relation to “HIOTISSA”, it means Crusader; or
	 
	 	(c)	 	in relation to “GRAND OCEAN”, it means the Collateral Guarantor,

	 	 	and “Owner” means any of them;
	 
	 	 	“Permitted Encumbrance” means any Encumbrance in favour of the Lender created pursuant to
the Security Documents and Permitted Liens;
	 
	 	 	“Permitted Liens” means any lien on a 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 Lender) exceeding the Casualty Amount for such Ship (as defined in the Ship
Security Documents for such Ship);
	 
	 	 	“Personal Guarantees” means, together, each of the personal guarantees executed or (as the
context may require) to be executed by the Sponsors in favour of the Lender under the
Letters of Undertaking, in such form as the Lender may require in its sole discretion, or
(as the context may require) any substitute personal guarantee accepted by the Lender
pursuant to clause 10.1.32 and “Personal Guarantee” means either of them;
	 
	 	 	“Pertinent Jurisdiction” means any jurisdiction in which or where any Security Party is
incorporated, resident, domiciled, has a permanent establishment or assets, carries on, or
has a place of business or is otherwise howsoever effectively connected;
	 
	 	 	“Proceedings” means any litigation, arbitration, legal action or complaint or judicial,
quasi-judicial or administrative proceedings whatsoever arising or instigated by anyone in
any court, tribunal, public office or other forum whatsoever and wheresoever (including,
without limitation, any action for provisional or permanent attachment of any thing or for
injunctive remedies or interim relief and any action instigated on an ex parte basis);
	 
	 	 	“Quotation Date” means, in relation to any period in respect of which LIBOR falls to be
determined under this Agreement, the day falling two (2) Banking Days before the first day
of such period;

14

 

	 
	 	 	“Registry” means:

	 	(a)	 	in relation to a Borrower’s Ship, the office of such registrar, commissioner
or representative of Greece in Chios who is duly authorised and empowered to register
such Ship, the relevant Borrower’s title to such Ship and the relevant Borrower’s
Mortgage under the laws and flag of Greece; or
	 
	 	(b)	 	in relation to “GRAND OCEAN”, the offices of the Deputy Commissioner for
Maritime Affairs of the Republic of the Republic of Liberia in Piraeus, Greece, duly
authorised and empowered to register such Ship, the Collateral Guarantor’s title to
such Ship and the Collateral Mortgage under the laws and flag of the Republic of
Liberia;

	 	 	“Related Company” means any company which is controlled or managed by the Corporate
Guarantor from time to time and which appears in any accounts delivered under clause 8.1.6
as being managed by the Corporate Guarantor, provided that no company shall cease to be a
Related Company without the consent of the Lender;
	 
	 	 	“Relevant Advance” means, in relation to “HIONA”, Advance A and in relation to “HIOTISSA”,
Advance B;
	 
	 	 	“Relevant Company” means any Security Party and any Security Parry’s Related Companies and
shall include each Group Member at any relevant time;
	 
	 	 	“Relevant Percentage” means:

	 	(a)	 	in respect of the sale or Total Loss of a Mortgaged Ship (other than “GRAND
OCEAN”), the Market Value of such Mortgaged Ship immediately prior to such sale or
Total Loss, divided by the aggregate of the Market Values of the Mortgaged Ships
(other than “GRAND OCEAN”) immediately prior to such sale or Total Loss; or
	 
	 	(b)	 	in respect of the sale or Total Loss of “GRAND OCEAN” while it is a
Mortgaged Ship, the Market Value of such Mortgaged Ship [minus the Other Loan]
immediately prior to such sale or Total Loss, divided by the Market Value of all
Mortgaged Ships [minus the Other Loan] immediately prior to such sale or Total Loss;

	 	 	“Relevant Ship” means each of 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 Company;
	 
	 	 	“Repayment Dates” means, subject to clause 6.3, the date failing three (3) months after
the Drawdown Date in respect of the second Advance to be made available hereunder, and
each of the dates falling at three (3) monthly intervals after such date up to and
including the date falling on the earlier of (a) ninety six (96) months after the Drawdown
Date in respect of the second Advance to be made available hereunder and (b) 30 April
2016;
	 
	 	 	“Required Authorisation” means any authorisation, consent, declaration, licence, permit,
exemption, approval or other document, whether imposed by or arising in connection with any
law, regulation, custom,
contract, security or otherwise howsoever which must be obtained at any time from any
person, Government Entity, central bank or other self-regulating or supra-national
authority in order to enable the Borrowers lawfully to draw the Loan and/or to enable any
Security Party lawfully and continuously to continue its

15

 

	 	 	corporate existence and/or perform
all its obligations whatsoever whensoever arising and/or grant security under the relevant
Security Documents and/or to ensure the continuous validity and enforceability thereof;
	 
	 	 	“Required Security Amount” means the amount in USD (as certified by the Lender) which is,
at any relevant time one hundred and thirty per cent (130%) of the aggregate of the Loan
and the Swap Exposure;
	 
	 	 	“Requisition” means requisition for title or other compulsory acquisition, requisition,
appropriation, expropriation, deprivation, forfeiture or confiscation howsoever for any
reason of a 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;
	 
	 	 	“Retention Account” means an interest bearing USD account opened or (as the context may
require) to be opened in the joint names of the Borrowers with the Lender and includes any
sub-accounts thereof and any other account designated in writing by the Lender to be the
Retention Account for the purposes of this Agreement;
	 
	 	 	“Retention Account Charge” means the first priority account pledge dated 19 March 2008
executed between the Borrowers and the Lender in respect of the Retention Account;
	 
	 	 	“Retention Amount” means, in relation to any Retention Date, such sum as shall be the
aggregate of:

	 	(a)	 	one-third (1/3rd) of the repayment instalment in respect of the Loan falling
due for payment pursuant to clause 4.1 (as the same may have been reduced by any
prepayment) on the next Repayment Date 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 the Loan during and at the
end of each Interest Period current at the relevant Retention Date and, for this
purpose, the expression “applicable fraction” in relation to each Interest Period
shall mean a fraction having a numerator of one and a denominator equal to the number
of Retention Dates falling within the relevant Interest Period;

	 	 	“Retention Dates” means the date falling thirty (30) days after the Drawdown Date in
respect of the second Advance to be made available hereunder, and each of the dates
falling at monthly intervals after such date and prior to the final Repayment Date;
	 
	 	 	“Second Mortgage Addendum” means, in relation to each Borrower’s Ship, each addendum to
the relevant Borrower’s Mortgage executed or (as the context may require) to be executed
by the relevant Borrower in favour of the Lender under the Second Supplemental Agreement,
in such form as the Lender may require in its sole discretion and “Second Mortgage
Addenda” means both of them;
	 
	 	 	“Second Supplemental Agreement” means the agreement dated [•] 2010 supplemental to
this Agreement made
between (inter alios) the Borrowers and the Lender;
	 
	 	 	“Security Documents” means this Agreement, the First Supplemental Agreement, the Second
Supplemental

16

 

	 	 	Agreement, the Mortgages, the Mortgage Addenda, the General Assignments, any
Charter Assignments, the Operating Account Charges, the Retention Account Charge, the
Manager’s Undertakings, the Corporate Guarantee, the Collateral Guarantee, the Master
Agreement, the Master Agreement Assignment, the Letters of Undertaking and any other
documents as may have been or shall from time to time after the date of this Agreement be
executed to guarantee and/or to govern and/or secure all or any part of the Loan, interest
thereon and other moneys from time to time owing by the Borrowers pursuant to this
Agreement and/or the Master Agreement (whether or not any such document also secures
moneys from time to time owing pursuant to any other document or agreement);
	 
	 	 	“Security Party” means the Borrowers, the Collateral Guarantor, the Managers, the
Corporate Guarantor, the Sponsors or any other person who may at any time be a party to
any of the Security Documents (other than the Lender);
	 
	 	 	“Security Value” means the amount in USD (as certified by the Lender) which is, at any
relevant time, the aggregate of:

	 	(a)	 	the aggregate Market Values of the Mortgaged Ships (other than “GRAND
OCEAN”); and
	 
	 	(b)	 	if “GRAND OCEAN” is at that time a Mortgaged Ship, the sum in USD which is
equal to the Market Value of “GRAND OCEAN” minus the Other Loan, but assuming such
sum is a positive figure; and
	 
	 	(c)	 	the market value of any additional security for the time being actually
provided to the Lender pursuant to clause 8.2;

	 	 	“Seller” means:

	 	(a)	 	in respect of “HIOTISSA”, Salta Limited of Jersey; and
	 
	 	(b)	 	in respect of “HIONA”, Maiden Over Limited of Jersey;

	 	 	“Ship” means:

	 	(a)	 	in respect of Challenger, “HIONA”;
	 
	 	(b)	 	in respect of Crusader, “HIOTISSA”; or
	 
	 	(c)	 	in respect of the Collateral Guarantor, “GRAND OCEAN”,

	 	 	and “Ships” means any or all of them;
	 
	 	 	“Ship Security Documents” means, together, the Borrowers’ Ship Security Documents and the
Collateral Guarantor’s Ship Security Documents;
	 
	 	 	“Sponsors” means, together, Mr [Nikolaos Fistes] and Mr [Michail Zolotas], or (as the
context may require) any
substitute individual or individuals who issue a personal guarantee accepted by the Lender
pursuant to clause 10.1.32 and “Sponsor” means either of them;

17

 

	 	 	“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;
	 
	 	 	“Swap Exposure” means, as at any relevant date the amount certified by the Lender to be
the aggregate net amount in Dollars which would be payable by the Borrowers to the Lender
under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of
the Master Agreement if an Early Termination Date had occurred on the relevant date in
relation to all continuing Designated Transactions entered into between the Borrowers and
Lender;
	 
	 	 	“Taxes” includes all present and future income, corporation, capital or value-added taxes
and all stamp and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and penalties in respect thereto,
if any, and charges, fees or other amounts made on or in respect thereof (and “Taxation”
shall be construed accordingly);
	 
	 	 	“Total Assets” and “Total Liabilities” mean, respectively, the total assets and total
liabilities of the Corporate Guarantor’s Group as evidenced at any relevant time by the
Latest Accounts, in which they shall have been calculated by reference to the meanings
assigned to them in accordance with International Financial Reporting Standards provided
that the value of any ship shall be the value thereof calculated in accordance with Clause
8.2.2 and not as set out in the Latest Accounts;
	 
	 	 	“Total Loss” means, in relation to a Ship:

	 	(a)	 	actual, constructive, compromised or arranged total loss of such Ship; or
	 
	 	(b)	 	Requisition; or
	 
	 	(c)	 	the hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of such Ship (other than Requisition) unless such Ship be released and
restored to the relevant Owner within thirty (30) days after such incident;

	 	 	“Transaction” means a Transaction as defined in the Master Agreement;
	 
	 	 	“Underlying Documents” means the MOAs, any charterparty entered into by an Owner under
Clause 8.1.17 and the Management Agreements;
	 
	 	 	“Unencumbered Liquid Assets” means cash or cash equivalents (including Marketable
Securities) which are not subject, at any relevant time, to any Encumbrance; and
	 
	 	 	“Unlawfulness” means any event or circumstance which either is or, as the case may be,
might in the opinion
of the Lender become the subject of a notification by the Lender to the Borrowers under clause 12.1.

18

 

	1,3	 	 Construction
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	1.3.1	 	clause headings and the index are inserted for convenience of reference only and shall be
ignored in the construction of this Agreement;
	 
	1.3.2	 	references to clauses and schedules are to be construed as references to clauses of, and
schedules to, this Agreement and references to this Agreement include its schedules;
	 
	1.3.3	 	references to (or to any specified provision of) this Agreement or any other document shall
be construed as references to this Agreement, that provision or that document as in force for
the time being and as duly amended and/or supplemented and/or novated;
	 
	1.3.4	 	references to a “regulation” include any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law) of any Government
Entity, central bank or any self-regulatory or other supra-national authority and, for the
avoidance of doubt, shall include any Basel 2 Regulation;
	 
	1.3.5	 	references to any person in or party to this Agreement shall include reference to such
person’s lawful successors and assigns;
	 
	1.3.6	 	words importing the plural shall include the singular and vice versa;
	 
	1.3.7	 	references to a time of day are, unless otherwise stated, to London time;
	 
	1.3.8	 	references to a person shall be construed as references to an individual, firm, company,
corporation or unincorporated body of persons or any Government Entity;
	 
	1.3.9	 	references to a “guarantee” include references to an indemnity or any other kind of
assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill
or note) against financial loss or other liability including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any other person to
pay any Indebtedness and “guaranteed” shall be construed accordingly;
	 
	1.3.10	 	references to any statute or other legislative provision are to be construed as references
to any such statute or other legislative provision as the same may be re enacted or modified
or substituted by any subsequent statute or legislative provision (whether before or after the
date hereof) and shall include any regulations, orders, instruments or other subordinate
legislation issued or made under such statute or legislative provision;
	 
	1.3.11	 	a certificate by the Lender as to any amount due or calculation made or any matter
whatsoever determined in connection with this Agreement shall be conclusive and binding on the
Borrowers except for manifest error;
	 
	1.3.12	 	if any document term or other matter or thing is required to be approved, agreed or
consented to by
the Lender such approval, agreement or consent must be obtained in writing unless the contrary is stated;

19

 

	1.3.13	 	“control” means, in relation to a body corporate:

	 	(a)	 	the power (whether by way of ownership of shares, proxy, contract, agency or
otherwise, directly or indirectly) to:

	 	(i)	 	cast, or control the casting of, more than 50 per cent of the
maximum number of votes that might be cast at a general meeting of such body
corporate; or
	 
	 	(ii)	 	appoint or remove all, or the majority, of the directors or other
equivalent officers of such body corporate; or
	 
	 	(iii)	 	give directions with respect to the operating and financial
policies of such body corporate with which the directors or other equivalent
officers of such body corporate are obliged to comply; or

	 	(b)	 	the holding beneficially of more than 50 per cent of the issued share capital
of such body corporate (excluding any part of that issued share capital that carries
no right to participate beyond a specified amount in a distribution of either profits
or capital);

	1.3.14	 	two or more persons are “acting in concert” if, pursuant to an agreement or understanding
(whether formal or informal), they actively co-operate, through the acquisition (directly or
indirectly) of shares in the HoldCo Guarantor by any of them, either directly or indirectly to
obtain or consolidate control of the HoldCo Guarantor;
	 
	1.3.15	 	time shall be of the essence in respect of all obligations whatsoever of the Borrowers under
this Agreement, howsoever and whensoever arising; and
	 
	1.3.16	 	the words “other” and “otherwise” shall not be construed eiusdem generis with any foregoing
words where a wider construction is possible.
	 
	1.4	 	Accounting terms and references to currencies
	 
	 	 	All accounting terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with International Financial Reporting Standards.
Currencies are referred to in this Agreement by the three letter currency codes (ISO 4217)
allocated to them by the International Organisation for Standardisation.
	 
	1.5	 	Contracts (Rights of Third Parties Act) 1999
	 
	 	 	Except for clause 18.6.4, no part of this Agreement shall be enforceable under the
Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this
Agreement.
	 
	2	 	THE LOAN AND USE OF PROCEEDS
	 
	2.1	 	Agreement to lend
	 
	 	 	The Lender, relying upon each of the representations and warranties in clause 7, agrees to
lend to the
Borrowers, jointly and severally, in two advances upon and subject to the terms of this
Agreement, the principal

20

 

	 	 	sum not exceeding seventy six million Dollars (USD76,000,000)
being the aggregate of (a) the lesser of (i) thirty eight million Dollars (USD38,000,000)
and (ii) 80% of the gross purchase price of “HIONA” payable under the Hiona MOA and (b) the
lesser of (i) thirty eight million Dollars (USD38,000,000) and (ii) 80% of the gross
purchase price of “HIOTISSA” payable under the Hiotissa MOA.
	 
	2.2	 	Drawdown
	 
	 	 	Subject to the terms and conditions of this Agreement, each Advance shall be advanced to
the Borrowers in full in one amount on the relevant Drawdown Date following receipt by the
Lender 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, on which the Borrowers propose the Loan is made available. Each Drawdown Notice
shall be effective on actual receipt by the Lender and, once given, shall, subject as
provided in clause 3.6.1, be irrevocable.
	 
	2.3	 	Availability
	 
	 	 	The Borrowers acknowledge that payment of the advances to the relevant Seller shall satisfy
the obligation of the Lender to lend that Advance to the Borrowers under this Agreement.
	 
	2,4 	 	Cancellation
	 
	 	 	Any part of the Commitment which remains undrawn and uncancelled at the end of the Drawdown
Period shall thereupon be automatically cancelled.
	 
	2.5	 	Use of proceeds
	 
	 	 	Without prejudice to the Borrowers’ obligations under clause 8.1.4, the Lender shall not
have any responsibility for the application of the proceeds of the Loan or any part thereof
by the Borrowers.
	 
	3	 	INTEREST AND INTEREST PERIODS
	 
	3.1	 	Normal interest rate
	 
	 	 	The Borrowers agree to pay interest on the Loan in respect of each Interest Period
relating thereto on each Interest Payment Date at the rate per annum determined by the
Lender to be the aggregate of (a) the Margin and (b) LIBOR for such period,
	 
	3.2	 	Selection of Interest Periods
	 
	 	 	Subject to clause 3.3, the Borrowers may by notice received by the Lender 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 or such other period as the Borrowers may select and the Lender may agree.
	 
	3.3	 	Determination of Interest Periods

21

 

	 	 	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 for each Advance shall start on the date that Advance is advanced
and each subsequent Interest Period for that Advance shall start on the last day of the
previous Interest Period for that Advance provided that after drawdown of the second Advance
hereunder Borrower shall select the Interest Period in relation to the first Advance to be
made available so that such Interest Period terminates simultaneously with the then current
Interest Period for such second Advance;
	 
	3.3.2	 	if any Interest Period would otherwise overrun a Repayment Date, then the Loan shall be
divided into parts so that there is one part in the amount of the repayment instalment due on
such Repayment Date and having an Interest Period ending on the relevant Repayment Date and
another part in the amount of the balance of the Loan having an Interest Period ascertained in
accordance with clause 3.2 and the other provisions of this clause 3.3;
	 
	3.3.3	 	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 Agreement), the Borrowers must pay interest on such sum
on demand from the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Lender pursuant to this clause 3.4. The period
starting on such due date and ending on such date of payment shall be divided into
successive periods of not more than three (3) months as selected by the Lender each of
which (other than the first, which shall start on such due date) shall start on the last
day of the preceding such period. The rate of interest applicable to each such period
shall be the aggregate (as determined by the Lender) of (a) two per cent (2%) per annum,
(b) the Margin and (c) LIBOR for such period. Such interest shall be due and payable on
the last day of each such period as determined by the Lender and each such day shall, for
the purposes of this Agreement, be treated as an Interest Payment Date, provided that if
such unpaid sum is an amount of principal which became due and payable by reason of a
declaration by the Lender under clause 10.2.2 or a prepayment pursuant to clauses 4.3,
8.2.1(a) or 12.1, on a date other than an Interest Payment Date relating thereto, the
first such period selected by the Lender shall be of a duration equal to the period
between the due date of such principal sum and such Interest Payment Date and interest
shall be payable on such principal sum during such period at a rate of two per cent (2%)
above the rate applicable thereto immediately before it shall have become so due and
payable.
	 
	3.5	 	Notification of Interest Periods and interest rate
	 
	 	 	The Lender agrees to notify the Borrowers promptly of the duration of each Interest Period
and of each rate of interest determined by it under this clause 3.
	 
	3.6	 	Market disruption; non-availability

22

 

	3.6.1	 	Whenever, at any time prior to the commencement of any Interest Period:

	 	(a)	 	the Lender shall have determined that adequate and fair means do not exist
for ascertaining LIBOR during such Interest Period; or
	 
	 	(b)	 	by reason of circumstances affecting the London Interbank Market generally,
it is impracticable for the Lenders to draw down, fund or continue to fund the
Commitment, the Loan or any part thereof; or
	 
	 	(c)	 	deposits in USD are not available to the Lender in the London Interbank
Market in the ordinary course of business in sufficient amounts to fund the Loan for
such Interest Period, or that LIBOR does not accurately reflect the cost to the Lender
of obtaining such deposits,

	 	 	the Lender must promptly give notice (a “Determination Notice”) thereof to the Borrowers.
	 
	 	 	A Determination Notice shall contain particulars of the relevant circumstances giving rise
to its issue. After the giving of any Determination Notice no undrawn amount shall be made
available to the Borrowers hereunder until notice to the contrary is given to the
Borrowers by the Lender.
	 
	3.6.2	 	Within ten (10) days of any Determination Notice being given by the Lender under clause
3.6.1, the Lender must certify an alternative basis (the “Alternative Basis”) for maintaining
the Loan. The Alternative Basis may at the Lender’s sole 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 the Lender equivalent to the
Margin. The Lender shall certify the same to the Borrowers. The Alternative 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 Lender
notifies the Borrowers that none of the circumstances specified in clause 3.6.1 continues to
exist whereupon the normal interest rate fixing previsions of this Agreement shall again
apply.
	 
	4	 	REPAYMENT AND PREPAYMENT
	 
	4.1	 	Repayment
	 
	 	 	Subject as otherwise provided in this Agreement, the Borrowers must repay the Loan by
thirty two (32) instalments, one such instalment to be repaid on each of the Repayment
Dates together with a balloon instalment (the “Balloon Instalment”) payable on the final
such Repayment Date. The amount of the first 8 instalments shall be USD1,500,000 each, the
amount of the subsequent 4 instalments shall be USD1,250,000 each, the amount of the
subsequent 20 instalments shall be USD1,125,000 each and the amount of the Balloon
Instalment shall be USD36,500,000.
	 
	 	 	If less than USD76,000,000 is drawn down in respect of the Loan, the amount of the Balloon
Instalment shall be reduced by the undrawn amount and thereafter each of said repayment
instalments must be reduced proportionately.
	 
	4.2	 	Voluntary prepayment

23

 

	 	 	Subject always to their obligations under clause 4.5, the Borrowers may prepay the Loan in
whole or part (such part being in an amount of five hundred thousand Dollars (USD 500,000)
or any larger sum which is an integral multiple thereof) on any Interest Payment Date
relating to the part of the Loan to be repaid without premium or penalty.

	4.3	 	Mandatory Prepayment on Total Loss
	 
	 	 	On the date falling one hundred and eighty (180) days after that on which a Mortgaged Ship
became a Total Loss or, if earlier, on the date upon which the relevant insurance proceeds
are, or Requisition Compensation (as defined in the Mortgage for such Ship) is, received
by the relevant Owner (or the Lender pursuant to the Security Documents), the Borrowers
must prepay the Loan by an amount equal to the amount of the Loan on the date on which
such payment is required to be made multiplied by the Relevant Percentage for such
Mortgaged Ship.
	 
	4.3.1	 	Interpretation
	 
	 	 	For the purpose of this Agreement, a Total Loss shall be deemed to have occurred:

	 	(a)	 	in the case of an actual total loss of 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 then insurers of such Ship
(provided a claim for total loss is admitted by such insurers) or, if such insurers do
not immediately admit such a claim, at the date and at the time at which either a
total loss is subsequently admitted by such insurers or a total loss is subsequently
adjudged by a competent court of law or arbitration tribunal to have occurred;
	 
	 	(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 then 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 occurs; and
	 
	 	(e)	 	in the case of hijacking, theft, condemnation, capture, seizure, arrest
detention or confiscation of a Ship (other than within the definition of compulsory
acquisition) which deprives the relevant Owner 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 incident occurred.

	4.4	 	Mandatory prepayment on sale of Mortgaged Ship
	 
	 	 	On the date of completion of the sale of any Mortgaged Ship the Borrowers must prepay the
Loan by an amount equal to the amount of the Loan on the date on which such payment is
required to be made multiplied by the Relevant Percentage.

24

 

	4.5	 	Amounts payable on prepayment
	 
	 	 	Any prepayment of all or part of the Loan under this Agreement shall be made together with:
	 
	4.5.1	 	accrued interest on the amount to be prepaid to the date of such prepayment;
	 
	4.5.2	 	any additional amount payable under clauses 6.6 or 12.2; and
	 
	4.5.3	 	all other sums payable by the Borrowers to the Lender under this Agreement or any of the
other Security Documents including, without limitation, any accrued commitment commission
payable under clause 5.1 and any Break Costs.
	 
	4.6	 	Notice of prepayment; reduction of repayment instalments
	 
	4.6.1	 	No prepayment may be effected under clause 4.2 unless the Borrowers shall have given the
Lender 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
Lender, shall be irrevocable, shall specify the amount to be prepaid and shall oblige the
Borrowers to make such prepayment on the date specified.
	 
	4.6.2	 	Any amounts prepaid pursuant to clauses 4.2, 4.3 and 4.4 shall be applied against the Loan
in reducing the Balloon Instalment and the repayment instalments pro rata.
	 
	4.6.3	 	The Borrowers may not prepay any part of the Loan except as expressly provided in this Agreement.
	 
	4.6.4	 	No amount prepaid may be reborrowed.
	 
	4.7	 	Master Swap Agreement, Repayments and Prepayments
	 
	4.7.1	 	Notwithstanding any provision of the Master Agreement to the contrary, in the case of a
prepayment of all or part of the Loan, the Lender shall be entitled but not obliged to take
any action it deems appropriate in relation to all or any part of the rights, benefits and
obligations created by any Transaction and/or the Master Agreement and/or to obtain or
re-establish any hedge or related trading position in any manner it may reasonably determine
in order to match such Transaction to the amended repayment schedule for the Loan or an
Advance.
	 
	4.7.2	 	If less than the full amount of the Loan remains outstanding following a prepayment and the
Lender agrees, following a written request of the Borrowers, that the Borrowers may maintain
all or part of a Transaction in an amount not wholly matched with or linked to all or part of
the Loan or an Advance, the Borrowers shall within fifteen (15) days of being notified by the
Lender of such requirement, provide the Lender with such additional security as shall be
adequate to secure the performance of such Transaction, which additional security shall take
such form, be constituted by such documentation and be entered into between such parties, as
the Lender may approve or require, and each document comprising such additional security shall
constitute a Credit Support Document.
	 
	4.7.3	 	The Borrowers shall on the first written demand of the Lender indemnify the Lender in
respect of all losses, costs and expenses (including, but not limited to, legal costs and
expenses) incurred or sustained by the

25

 

	 	 	Lender as a consequence of or in relation to the effecting of any matter or transactions
referred to in this clause 4.7.
	 
	5	 	FEES, COMMITMENT COMMISSION AND EXPENSES
	 
	5.1	 	Fees
	 
	 	 	The Borrowers agree to pay to the Lender an arrangement fee of USD342,000 payable on first
Drawdown Date or, if there is no drawdown, at the end of the Drawdown Period.
	 
	 	 	The fee referred to in this clause 5.1 is non-refundable.
	 
	5.2	 	Expenses
	 
	 	 	The Borrowers agree to reimburse the Lender on a full indemnity basis on demand all
expenses and/or disbursements whatsoever (including without limitation legal, printing and
out of pocket expenses) certified by the Lender as having been incurred by it from time to
time:
	 
	5.2.1	 	in connection howsoever with the negotiation, preparation, execution and, where relevant,
registration of the Security Documents and of any contemplated or actual amendment, or
indulgence or the granting of any waiver or consent howsoever in connection with, any of the
Security Documents and the syndication of the Loan; and
	 
	5.2.2	 	in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise
or enforcement of, or preservation of any rights, powers, remedies or discretions under, any
of the Security Documents, or in consideration of the Lender’s rights thereunder or any
action proposed or taken following the occurrence of a Default or otherwise in respect of the
moneys owing under any of the Security Documents,
	 
	 	 	together with interest at the rate referred to in clause 3.4 from the date on which such
expenses and/or disbursements 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 must 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 Lender under this Agreement must, 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 must pay all stamp, documentary, registration or other like duties or taxes
(including any duties or taxes payable by the Lender) imposed on or in connection with any
of the Underlying Documents, the Security Documents or the Loan and agree to indemnify the
Lender against any liability arising by reason of any delay or omission by the Borrowers
to pay such duties or taxes.
	 
	6	 	PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS

26

 

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

27

 

	 	 	that, after the making of such deduction or withholding, the Lender receives on the due
date for such payment (and retains, free from any liability in respect of such deduction or
withholding), a net sum equal to the sum which it would have received had no such deduction
or withholding been required to be made and the Borrowers must indemnify the Lender against
any losses or costs incurred by it by reason of any failure of the Borrowers or either of
them to make any such deduction or withholding or by reason of any increased payment not
being made on the due date for such payment. The Borrowers must promptly deliver to the
Lender any receipts, certificates or other proof evidencing the amounts (if any) paid or
payable in respect of any deduction or withholding as aforesaid.
	 
	 	 	This Clause 6.6 does not apply to any sums due from the Borrowers to the Lender under or
in connection with the Master Agreement in respect of which sums the provisions of the
Master Agreement shall apply.
	 
	6.7	 	Loan account
	 
	 	 	The Lender agrees to maintain a control account 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	 	Lender may assume receipt
	 
	 	 	Where any sum is to be paid under the Security Documents to the Lender, the Lender may
assume that the payment will be made when due and the Lender 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 Lender, then the person to whom such sum was so made
available must on request refund such sum to the Lender together with interest thereon
sufficient to compensate the Lender for the cost of making available such sum up to the
date of such repayment and the person by whom such sum was payable must indemnify the
Lender for any and all loss or expense which the Lender 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 Lender 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 Lender under any of the Security
Documents, the Lender must 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
Lender under any of the Security Documents;
	 
	6.9.2	 	secondly, in or towards payment of any fees payable to the Lender under, or in relation to,
the Security Documents

28

 

	 	 	which remain unpaid;
	 
	6.9.3	 	thirdly, in or towards payment to the Lender of any accrued interest owing in respect of the
Loan or equivalent amount payable under the Master Agreement which shall have become due under
any of the Security Documents but remains unpaid;
	 
	6.9.4	 	fourthly, in or towards payment to the Lender of any principal in respect of the Loan which
shall have become due but remains unpaid;
	 
	6.9.5	 	fifthly, in or towards payment to the Lender for any loss suffered by reason of any such
payment in respect of principal not being effected on an Interest Payment Date relating to the
part of the Loan repaid and which amounts are so payable under this Agreement; and
	 
	6.9.6	 	sixthly, 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 6.95 may be varied by the Lender
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 the Lender that:
	 
	7.1.1	 	Due incorporation
	 
	 	 	each of the Security Parties is duly incorporated and validly existing in good standing,
under the laws of its respective country of incorporation, in each case, as a corporation
or a company with limited liability, has no centre of main interests, permanent
establishment or place of business outside the jurisdiction in which it is incorporated and
has power to carry on its respective businesses as it is now being conducted and to own its
respective property and other assets, to which it has unencumbered legal and beneficial
title except as previously disclosed to the Lender in writing;
	 
	7.1.2	 	Corporate power
	 
	 	 	each of the Security Parries has power to execute, deliver and perform its obligations
and, as the case may be, to exercise its rights under the Underlying Documents and the
Security Documents to which it is a party; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and on the execution of the
Security Documents performance of the same and no limitation on the powers of either
Borrower to borrow or any other Security Party to guarantee or howsoever provide or grant
security will be exceeded as a result of borrowing the Loan;
	 
	7.1.3	 	Binding obligations

29

 

	 	 	the Underlying Documents and the Security Documents, when executed, will constitute valid
and legally binding obligations of the relevant Security Parties enforceable in accordance
with their respective terms;
	 
	7.1.4	 	No conflict with other obligations
	 
	 	 	the execution and delivery of, the performance of their obligations under, and compliance
with the provisions of, the Underlying Documents and the Security Documents by the
relevant Security Parties will not (i) contravene any existing applicable law, statute,
rule or regulation or any judgment, decree or permit to which any Security Party is
subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute
a default under, any agreement or other instrument to which any Security Party is a party
or is subject or by which it or any of its property is bound, (iii) contravene or conflict
with any provision of the constitutional documents of any Security Party or (iv) result in
the creation or imposition of or oblige any of the Security Parties or their Related
Companies or any other Security Party to create any Encumbrance (other than a Permitted
Encumbrance) on any of the undertakings, assets, rights or revenues of any of the Security
Parties or their Related Companies;
	 
	7.1.5	 	No default
	 
	 	 	no default has occurred;
	 
	7.1.6	 	No litigation
	 
	 	 	no Proceedings are current, pending or, to the knowledge of the officers of either of the
Borrowers, threatened against any of the Security Parties or their Related Companies or
their assets which could have a material adverse effect on the business, assets or
financial condition of any of the Security Parties or their Related Companies;
	 
	7.1.7	 	No filings required
	 
	 	 	except for the registration of the Mortgages and the Mortgage Addenda in the relevant
register under the laws of Greece or the Republic of Liberia (as the case may be) 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 Pertinent
Jurisdiction or that any stamp, registration or similar tax or charge be paid in any
Pertinent Jurisdiction on or in relation to any of the Underlying Documents or the
Security Documents and each of the Underlying Documents and the Security Documents is in
proper form for its enforcement in the courts of each Pertinent Jurisdiction;
	 
	7.1.8	 	Required Authorisations

all Required Authorisations have been obtained or effected and are in full force and effect;
	 
	7.1.9	 	Choice of law
	 
	 	 	the choice of English law to govern the Underlying Documents and the Security Documents
(other than the choice of the law of Greece to govern the Borrower’s Mortgages, the
Operating Account Charges and the Retention Account

30

 

	 	 	Charge, and the choice of the law of the Republic of Liberia to govern the Collateral
Mortgage) and the submissions by the Security Parties to the jurisdiction of the English
courts or, as the case may be, the courts of Piraeus and the obligations of such Security
Parties associated therewith, are valid and binding;
	 
	7.1.10	 	No immunity
	 
	 	 	no Security Party nor any of their assets is entitled to immunity on the grounds of
sovereignty or otherwise from any Proceedings whatsoever;
	 
	7.1.11	 	Financial statements correct and complete
	 
	 	 	the latest audited consolidated financial statements of the Corporate Guarantor’s Group in
respect of the relevant financial year as delivered to the Lender have been or will have
been prepared in accordance with International Financial Reporting Standards consistently
applied and present or will present fairly and accurately the consolidated financial
position of the Corporate Guarantor’s Group as at the date thereof and the consolidated
results of the operations of the Corporate Guarantor’s Group for the financial year ended
on such date and, as at such date, neither of the Corporate Guarantor nor its Related
Companies had or will have had any significant liabilities (contingent or otherwise) or
any unrealised or anticipated losses which are not disclosed by, or reserved against or
provided for in, such financial statements;
	 
	7.1.12	 	Pari passu
	 
	 	 	the obligations of each Borrower under this Agreement and the Master 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;
	 
	7.1.13	 	Information
	 
	 	 	all information, whatsoever provided by any Security Party to the Lender in connection
with the negotiation and preparation of the Security Documents is true and accurate in all
material respects and not misleading, does 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;
	 
	7.1.14 	 	No withholding Taxes
	 
	 	 	no Taxes anywhere are imposed whatsoever by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the Security Documents to
which such Security Party is or is to be a party or are imposed on or by virtue of the
execution or delivery by the Security Parties of the Underlying Documents or the Security
Documents or any other document or instrument to be executed or delivered under any of the
Security Documents;
	 
	7.1.15	 	No Encumbrance

31

 

	 	 	none of the Owners has previously charged, encumbered or assigned the benefit of any of its
rights, title and interest in or to its Ship and such benefit and all such rights, title
and interest are freely assignable and capable of being charged in the manner contemplated
by the Security Documents;
	 
	7.1.16	 	The Ships
	 
	 	 	throughout the Facility Period each Ship will be:

	 	(a)	 	in the absolute sole, legal and beneficial ownership of the relevant Owner;
	 
	 	(b)	 	registered through the offices of the relevant Registry as a ship under the
laws and flag of Greece or the Republic of Liberia (as the case may be);
	 
	 	(c)	 	in compliance with the ISM Code and the ISPS Code and 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;

	7.1.17	 	Ships’ employment
	 
	 	 	(save as otherwise disclosed by the Borrowers and accepted in writing by the Lender) none
of the Ships is nor will 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 Lender and there will not be any
agreement or arrangement whereby the Earnings (as defined in the relevant Ship Security
Documents) may be shared or pooled howsoever with any other person;
	 
	7.1.18	 	Freedom from Encumbrances
	 
	 	 	no Ship, nor its Earnings, Insurances or Requisition Compensation (each as defined in the
relevant Ship Security Documents) 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 subject to any Encumbrance except Permitted Encumbrances;
	 
	7.1.19	 	Environmental Matters
	 
	 	 	except as may already have been disclosed by the Borrowers in writing to, and acknowledged
in writing by, the Lender:

	 	(a)	 	the Owners 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 Owners 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;

32

 

	 	(c)	 	no Environmental Claim has been made or threatened or pending against any of
the Owners, any other Relevant Company or, to the best of the Borrowers’ knowledge and
belief (having made due enquiry), any of their respective Environmental Affiliates;
and
	 
	 	(d)	 	there has been no Environmental Incident;

	7.1.20	 	ISM and ISPS Code
	 
	 	 	the Owners have complied with and continue to comply with and have procured that the
relevant Manager of the Ships has complied with and continues to comply with the ISM Code,
the ISPS Code and all other statutory and other requirements relative to their respective
business and in particular they or the Manager have obtained and maintain a valid DOC and
SMC for the Ships and that they and the Manager have implemented and continue to implement
an ISM SMS;
	 
	7.1.21	 	No material adverse change
	 
	 	 	there has been no material adverse change in the financial position of the Security
Parties or any of them or the consolidated financial position of the Borrowers, the
Collateral Guarantor, the Corporate Guarantor and their respective Related Companies, from
that described by the Borrowers to the Lender or any of them in the negotiation of this
Agreement;
	 
	7.1.22	 	Copies true and complete
	 
	 	 	the Certified Copies or originals of the Underlying Documents delivered or to be delivered
to the Lender pursuant to clause 9.1 are, or will when delivered be, true and complete
copies or, as the case may be, originals of such documents; and such documents constitute
valid and binding obligations of the parties thereto enforceable in accordance with their
respective terms and there have been no amendments or variations thereof or defaults
thereunder;
	 
	7.1.23	 	Shareholdings

	 	(a)	 	from the Execution Date until the Acquisition, each of the Borrowers and the
Collateral Guarantor is a wholly-owned direct Subsidiary of GrandUnion, and all of the
shares in each of GrandUnion and each Manager are legally and ultimately beneficially
owned by such person or persons as were disclosed by the Borrowers to the Lender prior
to the date of this Agreement; and
	 
	 	(b)	 	from the Acquisition and at all times thereafter:

	 	(i)	 	the entire issued share capital and the entire issued voting
share capital of the Borrowers, the Collateral Guarantor and each Manager are
legally and beneficially owned by the HoldCo Guarantor;
	 
	 	(ii)	 	no less than 50.1% of the total issued voting share capital and
of the total issued share capital of the HoldCo Guarantor is ultimately
beneficially owned by the Sponsors; and

33

 

	 	(iii)	 	the Sponsors control the HoldCo Guarantor.

	7.2	 	Repetition of representations and warranties
	 
	 	 	On each day throughout the Facility Period the Borrowers shall be deemed to repeat the
representations and warranties in clause 7 updated mutatis mutandis as if made with
reference to the facts and circumstances existing on such day.
	 
	8	 	UNDERTAKINGS
	 
	8.1	 	General
	 
	 	 	The Borrowers jointly and severally undertake with the Lender that, from the Execution
Date until the end of the Facility Period, they will:
	 
	8.1.1	 	Notice of Default and Proceedings
	 
	 	 	promptly inform the Lender of (a) any Default and of any other circumstances or occurrence
which might adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents and (b) as soon as the same is instituted or
threatened, details of any Proceedings involving any Security Party which could have a
material adverse effect on that Security Party and/or the operation of any Ship and will
from time to time, if so requested by the Lender, confirm to the Lender in writing that,
save as otherwise stated in such confirmation, no Default has occurred and is continuing
and no such Proceedings are on foot or threatened;
	 
	8.1.2	 	Authorisation
	 
	 	 	obtain or cause to be obtained, maintain in full force and effect and comply fully with
all Required Authorisations, provide the Lender with Certified Copies of the same and do,
or cause to be done, all other acts and things which may from time to time be necessary or
desirable under any applicable law (whether or not in the Pertinent Jurisdiction) for the
continued due performance of all the obligations of the Security Parties under each of the
Security Documents;
	 
	8.1.3	 	Corporate Existence
	 
	 	 	ensure that each Security Party maintains its corporate existence as a body corporate duly
organised and validly existing and in good standing under the laws of the Pertinent
Jurisdiction;
	 
	8.1.4	 	Use of proceeds
	 
	 	 	use the Loan exclusively for the purposes specified in clauses 1.1 and 2.5;
	 
	8.1.5	 	Pari passu
	 
	 	 	ensure that their obligations under this Agreement and the Master Agreement shall, without
prejudice to the provisions of clause 8.3, at all times rank at least pari passu with all
their other present and future unsecured

34

 

	 	 	and unsubordinated Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract;
	 
	8.1.6	 	Financial statements
	 
	 	 	prepare consolidated financial statements of the Corporate Guarantor’s Group and financial
statements of each Borrower and the Collateral Guarantor, each in accordance with
International Financial Reporting Standards in respect of each financial year and cause the
same to be reported on by their auditors and prepare or cause to be prepared unaudited
consolidated financial statements of the Corporate Guarantor’s Group and financial
statements of each Borrower and the Collateral Guarantor, each in respect of each financial
half-year (ending on 30 June and 31 December in each year) on the same basis as the annual
statements and deliver as many copies of the same as the Lender may reasonably require as
soon as practicable but not later than one hundred and eighty (180) days (in the case of
audited financial statements) or ninety (90) days (in the case of unaudited financial
statements) after the end of the financial period to which they relate;
	 
	8.1.7	 	Financial Covenants
	 
	 	 	procure that:

	 	(a)	 	the Net Worth shall at all times be equal to or more than USD60,000,000;
	 
	 	(b)	 	the Total Liabilities divided by the Total Assets (adjusted for market values
of vessels calculated in accordance with clause 8.2.2) shall be less than 75%; and
	 
	 	(c)	 	(commencing with the financial year ended 31 December 2009) at no time shall
the value of the Unencumbered Liquid Assets of the Corporate Guarantor’s Group be less
than 5% of the Long Term Debt (as defined in the Latest Accounts and including the
current portion thereof) of the Corporate Guarantor’s Group;

	8.1.8	 	Delivery of reports
	 
	 	 	deliver to the Lender concurrently with the issue thereof as many Certified Copies as the
Lender may reasonably require of every report, circular, notice or like document issued by
any Relevant Company to its shareholders or creditors generally;
	 
	8.1.9	 	Reimbursement of MII Policy premiums
	 
	 	 	reimburse the Lender on the first Drawdown Date and annually thereafter on the Lender’s
written demand the amount of the premium payable by the Lender for the MII Policy;
	 
	8.1.10	 	Provision of further information, know-your-customer
	 
	 	 	provide the Lender, and procure that the Corporate Guarantor, the Collateral Guarantor and
the Manager shall provide the Lender, with such financial or other information concerning
any Relevant Company and the vessels owned or operated by them, and their respective
affairs, activities, financial standing, Indebtedness, operating

35

 

	 	 	expenses and charter arrangements and operations as the Lender may from time to time
reasonably require and all other documentation and information as the Lender may from time
to time reasonably require in order to comply with its, and all other relevant,
know-your-customer regulations;
	 
	8.1.11	 	Obligations under Security Documents
	 
	 	 	duly and punctually perform each of the obligations expressed to be imposed or assumed by
them under the Security Documents and Underlying Documents and will procure that each of
the other Security Parties will, duly and punctually perform each of the obligations
expressed to be assumed by it under the Security Documents and the Underlying Documents to
which it is a party;
	 
	8.1.12	 	Compliance with ISM Code
	 
	 	 	and will procure that any Operator will, comply with and ensure that the Ships and any
Operator complies with the requirements of the ISM Code, including (but not limited to)
the maintenance and renewal of valid certificates pursuant thereto throughout the Security
Period (as defined in the relevant Mortgage);
	 
	8.1.13	 	Withdrawal of DOC and SMC
	 
	 	 	immediately inform the Lender if there is any threatened or actual withdrawal of their or
any Operator’s DOC or the SMC of any Ship;
	 
	8.1.14	 	Issuance of DOC and SMC
	 
	 	 	and will procure that any Operator will, promptly inform the Lender upon the issue to any
of the Owners or any Operator of a DOC and to any of the Ships of an SMC or the receipt by
any of the Owners or any Operator of notification that its application for the same has
been refused;
	 
	8.1.15	 	ISPS Code Compliance
	 
	 	 	and will procure that the Manager or any Operator will:

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

	8.1.16	 	ISO 9002 standards
	 
	 	 	and will procure that the Manager and any Operator will, manage and in all other respects
operate each of the Ships in accordance with ISO 9002 standards (as and when the same
shall apply to the Ships); and
	 
	8.1.17	 	Charters etc.

36

 

	 	(a)	 	procure that within 6 months of the acquisition by an Owner of its Ship, such
Ship will be on charter for a period of at least 12 months with a charterer and on
terms acceptable to the Lender and at a daily gross charterhire of at least USD19,000;
and
	 
	 	(b)	 	Provided it has first obtained the consent of the Lender in accordance with
the relevant Ship Security Documents and/or clause 8.3.14, (i) deliver to the Lender
a Certified Copy of each charter or other contract of employment of each Ship with a
tenor exceeding nine (9) months, forthwith after its execution, (ii) forthwith on the
Lender’s request execute (1) a Charter Assignment of any such charter or other
contract of employment in favour of the Lender and (2) any notice of assignment
required in connection therewith, and promptly procure the acknowledgement of any
such notice of assignment by the relevant charterer in a form appended to the
relevant Charter Assignment, and (3) pay all legal and other costs incurred by the
Lender in connection with any such specific assignments, forthwith following the
Lender’s demand;

	8.1.18	 	Inspection
	 
	 	 	ensure that the Lender, by surveyors or other persons appointed by it for such purpose,
may board each Ship at all reasonable times for the purpose of inspecting her and to
afford all proper facilities for such inspections and for this purpose to give the Lender
reasonable advance notice of any intended drydocking of each Ship (whether for the purpose
of classification, survey or otherwise) and to pay the costs in respect of one inspection
in each calendar year; and
	 
	8.1.19	 	Sponsors’ guarantees
	 
	 	 	procure that if the Acquisition does not take place by the Backstop
Acquisition Date, each of the Sponsors will execute a Personal
Guarantee forthwith upon the Lender’s demand; and
	 
	8.1.20	 	Third party debt
	 
	 	 	ensure that at all times after 31 December 2010, the aggregate amount of Indebtedness owing
by each Borrower to any person (including, without limitation, to crew, trade creditors,
management companies, ports and yards but excluding amounts owing under the Security
Documents) shall not exceed (a) $400,000 per Borrower at the end of every calendar quarter
or (b) $800,000 per Borrower at any other time.
	 
	8.2	 	Security value maintenance
	 
	8.2.1	 	Security shortfall
	 
	 	 	If, at any time after the Security Value is less than the Required Security Amount, the
Lender gives notice to the Borrowers requiring that such deficiency be remedied, then the
Borrowers must either:

	 	(a)	 	prepay within a period of thirty (30) days of the date of receipt by the
Borrowers of the Lender’s said notice, such sum in USD as will result in the Required
Security Amount 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

37

 

	 	(b)	 	within thirty (30) days of the date of receipt by the Borrowers of the
Lender’s said notice constitute to the satisfaction of the Lender such further
security for the Loan as shall be acceptable to the Lender having a value for security
purposes (as determined by the Lender in its absolute discretion) at the date upon
which such further security shall be constituted which, when added to the Security
Value, shall not be less than the Required Security Amount as at such date.

	 	 	The provisions of clauses 4.5 and 4.6 shall apply to prepayments under clause 8.2.1(a).
	 
	8.2.2	 	Valuation of Mortgaged Ships
	 
	 	 	Each Mortgaged Ship shall, for the purposes of this Agreement, be valued in USD as and
when the Lender shall require by taking the average of valuations prepared by two
independent firms of shipbrokers appointed by the Lender in its sole discretion (such
valuations to be made without, unless required by the Lender, physical inspection, and on
the basis of a sale for prompt delivery for cash at arms’ length, on normal commercial
terms, as between a willing buyer and a willing seller, without taking into account the
benefit of any charterparty or other engagement concerning the relevant Mortgaged Ship and
to be dated no more than 30 days prior to the date the Market Value is ascertained). The
average of such 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 Lender to supply to the Lender 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 Lender obtaining one valuation of each of the Mortgaged
Ships referred to in clause 8.2.2 in any calendar year, any valuation referred to in
schedule 2, Part 2, paragraph (m) 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), must be
paid 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 Lender shall be determined by the Lender in its absolute
discretion.
	 
	8.2.6	 	Documents and evidence
	 
	 	 	In connection with any additional security provided in accordance with this clause 8.2,
the Lender shall be

38

 

	 	 	entitled to receive (at the Borrowers’ expense) such evidence and documents of the kind
referred to in schedule 3 as may in the Lender’s opinion be appropriate and such
favourable legal opinions as the Lender shall in its absolute discretion require.
	 
	8.3	 	Negative undertakings
	 
	 	 	The Borrowers jointly and severally undertake with the Lender that, from the Execution
Date until the end of the Facility Period, they will not, without the prior written
consent of the Lender:
	 
	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 Company or any other person;
	 
	8.3.2	 	No merger or transfer
	 
	 	 	merge or consolidate with any other person or enter into any amalgamation, demerger or
corporate reconstruction or redomiciliation, or permit any change to the legal or
beneficial ownership of their, or the Collateral Guarantor’s, shares from that existing at
the date of the Second Supplemental Agreement other than as a result of the Acquisition;
	 
	8.3.3	 	Disposals
	 
	 	 	sell, transfer, assign, create security or option over, pledge, pool, abandon, lend or
otherwise dispose of or cease to exercise direct control over any part of 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 or manager
	 
	 	 	undertake any business other than the ownership and operation of the Ships or employ anyone
other than the Manager as commercial and technical manager of the Ships;
	 
	8.3.5	 	Acquisitions
	 
	 	 	acquire any further assets other than the Borrowers’ 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 Borrowers’ Ships;

39

 

	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 Borrowers’ 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 otherwise become directly or contingently liable for the
obligations of any person, firm, or corporation except pursuant to the Security Documents
and except for guarantees from time to time required in the ordinary course by any
protection and indemnity or war risks association with which a Borrower’s Ship is entered,
guarantees required to procure the release of such Ship from any arrest, detention,
attachment or levy or guarantees required for the salvage of a Borrowers’ 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 either Borrower to any person (other than the Lender pursuant
to the Security Documents) to be guaranteed by any person (except for guarantees from time
to time required in the ordinary course by any protection and indemnity or war risks
association with which a Borrower’s Ship is entered, guarantees required to procure the
release of such Borrower’s Ship from any arrest detention, attachment or levy or
guarantees or undertakings required for the salvage of a Borrower’s Ship);
	 
	8.3.12	 	Share capital and distribution
	 
	 	 	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;

40

 

	8.3.14	 	Employment
	 
	 	 	let or agree to let a Ship:

	 	(a)	 	on demise charter for any period; or
	 
	 	(b)	 	by any time or consecutive voyage charter for a term which exceeds or which
by virtue of any optional extensions therein contained may exceed nine (9) months’
duration; or
	 
	 	(c)	 	on terms whereby more than two (2) months’ hire (or the equivalent) is
payable in advance; or
	 
	 	(d)	 	below the market rate prevailing at the time when the relevant Ship is fixed;

	8.3.15	 	Flag, Class etc.
	 
	 	 	permit, without the prior written consent of the Lender:

	 	(a)	 	any change of flag of any Ship;
	 
	 	(b)	 	any change of Classification Society in respect of any Ship;
	 
	 	(c)	 	any change in the ownership (including ultimate beneficial ownership) or
control of any Owner from that existing as at the date of the Second Supplemental
Agreement (other than as a result of the Acquisition); or

	8.4	 	HoldCo Guarantee
	 
	 	 	If the Acquisition takes place on or before the Backstop Acquisition Date, then the
Borrowers shall procure that, forthwith after the Acquisition and in any event not after
the end of the Backstop Acquisition Date, the HoldCo Guarantor shall, at the cost and
expense of the Borrowers, execute the HoldCo Guarantee in favour of the Lender and deliver
it to the Lender together with such documents and evidence in respect of the HoldCo
Guarantor and the HoldCo Guarantee of the type set out in schedule 1 of the Second
Supplemental Agreement, as may be requested by the Lender.
	 
	9	 	CONDITIONS
	 
	9.1	 	Documents and evidence
	 
	9.1.1	 	Commitments
	 
	 	 	The obligation of the Lender to make either Advance available is conditional upon the
Lender or its duly authorised representative having received, not later than two (2)
Banking Days before the proposed first Drawdown Date, the documents and evidence specified
in Part 1 of schedule 2, in form and substance satisfactory to the Lender.
	 
	9.1.2	 	The obligation of the Lender to make available Advance A or, as the case may be, Advance B
is conditional upon the Lender or its duly authorised representative having received, not
later than the relevant Drawdown Date the documents and evidence specified in Part 2 of
schedule 2, in form and substance satisfactory to the Lender.

41

 

	9.2	 	General conditions precedent
	 
	 	 	The obligation of the Lender to make the Loan available is subject to the additional
conditions that, at the time both of the giving of each Drawdown Notice, and at the time
of the advance of the relevant Advance:
	 
	9.2.1	 	the representations and warranties contained in (a) clause 7 of this Agreement and (b)
clause 4 of the Corporate 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 has occurred and be continuing and there being no Default which would or might
result from the advance of the Loan.
	 
	9.3	 	Waiver of conditions precedent
	 
	 	 	The conditions specified in this clause 9 are inserted solely for the benefit of the
Lender and may be waived by the Lender in whole or in part 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 Lender may request and the
Borrowers shall not later than two (2) Banking Days prior to such date, deliver to the
Lender 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
	 
	 	 	Each of the following events shall constitute an Event of Default (whether such event
shall occur voluntarily or involuntarily or by operation of law or regulation or in
connection with any judgment, decree or order of any court or other authority or
otherwise, howsoever):
	 
	10.1.1	 	Non-payment: any Security Party fails to pay any sum payable by it under any of the Security
Documents at the time, in the currency and in the manner stipulated in the Security Documents
or the Underlying Documents (and so that, for this purpose, sums payable on demand shall be
treated as having been paid at the stipulated time if paid within one (1) Banking Day of
demand); or
	 
	10.1.2	 	Breach of Insurance and certain other obligations: any of the Owners or, as the context may
require, a Manager or any other person fails to obtain and/or maintain the Insurances (as
defined in, and in accordance with the requirements of, the relevant Ship Security Documents)
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 Owners or
any other person, or either of the Borrowers commits any breach of or omits to observe any of
the obligations or undertakings expressed to be imposed on them under clause 8, or the
Collateral Owner commits

42

 

	 	 	any breach of or omits to observe any of the obligations or undertakings expressed to be
imposed on it under clause 5 of the Collateral Guarantee, or the Corporate Guarantor
commits any breach of or omits to observe any of the obligations or undertakings expressed
to be imposed on it under clause 5 of the Corporate Guarantee; or
	 
	10.1.3	 	Breach of other obligations: any Security Party commits any breach of or omits to observe
any of its obligations or undertakings expressed to be assumed by it under any of the Security
Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above) and, in respect of
any such breach or omission which in the opinion of the Lender is capable of remedy, such
action as the Lender may require shall not have been taken within five (5) days of the Lender
notifying the relevant Security Party of such default and of such required action; or
	 
	10.1.4	 	Misrepresentation: any representation or warranty made or deemed to be made or repeated by
or in respect of any Security Party in or pursuant to any of the Security Documents or in any
notice, certificate or statement referred to in or delivered under any of the Security
Documents is or proves to have been incorrect or misleading in any material respect; or
	 
	10.1.5	 	Cross-default: any Indebtedness of any Relevant Company is not paid when due or any
Indebtedness of any Relevant 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 Company of a voluntary right of prepayment), or any creditor of any Relevant
Company becomes entitled to declare any such Indebtedness due and payable or any facility or
commitment available to any Relevant Company relating to Indebtedness is withdrawn, suspended
or cancelled by reason of any default (however described) of the person concerned unless such
Relevant Company shall have satisfied the Lender that such withdrawal, suspension or
cancellation will not affect or prejudice in any way such Relevant Company’s ability to pay
its debts as they fall due and fund its commitments, or any guarantee given by any Relevant
Company in respect of Indebtedness is not honoured when due and called upon; or
	 
	10.1.6	 	Execution: any judgment or order made against any Relevant Company is not stayed or complied
with within five (5) Banking 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 Relevant Company and is
not discharged within five (5) Banking Days; or
	 
	10.1.7	 	Insolvency: any Relevant 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; or has negative net worth (taking into account contingent liabilities); or suffers
the declaration of a moratorium in respect of any of its Indebtedness; or
	 
	10.1.8	 	Reduction or loss of capital: a meeting is convened by any Relevant Company for the purpose
of passing any resolution to purchase, reduce or redeem any of its share capital; or
	 
	10.1.9	 	Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or wind
up any Relevant Company or an order is made or resolution passed for the dissolution or
winding up of any Relevant

43

 

	 	 	Company or a notice is issued convening a meeting for such purpose; or
	 
	10.1.10	 	Administration: any petition is presented, notice given or other steps are taken anywhere
to appoint an administrator of any Relevant Company or the Lender believes that any such
petition or other step is imminent or an administration order is made in relation to any
Relevant Company; or
	 
	10.1.11	 	Appointment of receivers and managers: any administrative or other receiver is appointed
anywhere of any Relevant Company or any part of its assets and/or undertaking or any other
steps are taken to enforce any Encumbrance over all or any part of the assets of any Relevant
Company; or
	 
	10.1.12	 	Compositions: any corporate action, legal proceedings or other procedures or steps are
taken, or negotiations commenced, by any Relevant 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
	 
	10.1.13	 	Analogous proceedings: there occurs, in relation to any Relevant 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 Lender,
appears in that country or territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 10.1.6 to 10.1.12 (inclusive) or any Relevant
Company otherwise becomes subject, in any such country or territory, to the operation of any
law relating to insolvency, bankruptcy or liquidation; or
	 
	10.1.14	 	Cessation of business: any Relevant Company suspends or ceases or threatens to suspend or
cease to carry on its business; or
	 
	10.1.15	 	Seizure: all or a material part of the undertaking, assets, rights or revenues of, or
shares or other ownership interests in, any Relevant Company are seized, nationalised,
expropriated or compulsorily acquired by or under the authority of any Government Entity; or
	 
	10.1.16	 	Invalidity: any of the Security Documents and the Underlying Documents shall at any time
and for any reason become invalid or unenforceable or otherwise cease to remain in full force
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 Relevant Company
which is a party thereto, or if any such Relevant Company shall deny that it has any, or any
further, liability thereunder; or
	 
	10.1.17	 	Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for
any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by
it in any of the Security Documents or for the Lender to exercise the rights or any of them
vested in it under any of the Security Documents or otherwise; or
	 
	10.1.18	 	Repudiation: any Security Party repudiates any of the Security Documents or does or causes
or permits to be done any act or thing evidencing an intention to repudiate any of the
Security Documents; or
	 
	10.1.19	 	Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of
the property (or part thereof) which is the subject of any of the Security Documents becomes
enforceable; or

44

 

	10.1.20	 	Material adverse change: there occurs, in the opinion of the Lender, a material adverse
change in the financial condition of any Security Party by reference to the financial position
of such Security Party as described by any Security Party to the Lender in the negotiation of
this Agreement; or
	 
	10.1.21	 	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 Owner and the relevant Owner shall fails
to procure the release of such Ship within a period of seven (7) days thereafter; or
	 
	10.1.22	 	Registration: the registration of any Ship under the laws and flag of Greece or the
Republic of Liberia (as the case may be) is cancelled or terminated without the prior written
consent of the Lender or the registration of such Ship is not renewed at least forty-five (45)
days prior to the expiry of such registration; or
	 
	10.1.23	 	Unrest: Greece or Liberia or the country in which any Security Party is incorporated or
domiciled becomes involved in hostilities or civil war or there is a seizure of power in
Greece or Liberia, Bermuda or the Marshall Islands by unconstitutional means; or
	 
	10.1.24	 	Environmental Incidents: an Environmental Incident occurs which gives rise, or may give
rise, to an Environmental Claim which could, in the opinion of the Lender be expected to have
a material adverse effect (i) on the business, assets or financial condition of any Security
Party or the Corporate Guarantor’s Group taken as a whole or (ii) on the security constituted
by any of the Security Documents or the enforceability of that security in accordance with
its terms; or
	 
	10.1.25	 	P&I: any of the Owners 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
	 
	10.1.26	 	Shareholdings:

	 	(a)	 	at any time before the Acquisition, there is any change in the legal and/or
ultimate beneficial ownership of any of the shares of any Security Party, from that
existing on the date of this Agreement and/or the date of the Second Supplemental
Agreement as set out in clause 7.1.23(a); or
	 
	 	(b)	 	at any time after the Acquisition, the Sponsors are the ultimate beneficial
owners of less than 50.1% of the total issued share capital or of the total issued
voting share capital of the HoldCo Guarantor; or
	 
	 	(c)	 	at any time after the Acquisition, any person, or persons acting in concert
(other than the Sponsors) (i) become the ultimate beneficial owners of more than 50%
(or of a percentage higher than that then owned by the Sponsors) of the total issued
share capital or of the total issued voting share capital of the HoldCo Guarantor or
(ii) obtain, have or exercise the control of the HoldCo Guarantor or of its board of
directors; or

45

 

	 	(d)	 	at any time after the Acquisition, the Sponsors do not have or exercise the
control of the HoldCo Guarantor; or
	 
	 	(e)	 	at any time after the Acquisition, any of the Borrowers, the Collateral
Guarantor or a Manager ceases to be a wholly-owned direct Subsidiary of the HoldCo
Guarantor; or

	10.1.27	 	Material events: any other event occurs or circumstance arises which, in the opinion of the
Lender, 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; or
	 
	10.1.28	 	Accounts: moneys are withdrawn from any of the Accounts other than in accordance with
clause 14; or
	 
	10.1.29	 	Required Authorisations: any Required Authorisation is revoked or withheld or modified or
is otherwise not granted or fails to remain in full force and effect or if any exchange
control or other law or regulation comes into existence which would make any transaction under
the Security Documents or the Underlying Documents or the continuation thereof, unlawful or
would howsoever prevent the performance by any Security Party of any term of any of the
Security Documents or the Underlying Documents; or
	 
	10.1.30	 	Master Agreement: (i) an Early Termination Date (as defined in the Master Agreement) has
occurred or been effectively designated under the Master Agreement or (ii) a person entitled
to do so gives notice of an Early Termination Date (as defined in the Master Agreement) or
(iii) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or
otherwise ceases to remain in full force and effect for any reason; or
	 
	10.1.31	 	Money Laundering: any Security Party is in breach of or fails to observe any law,
requirement, measure or procedure implemented to combat “money laundering” as defined in
Article 1 of the Directive (91/308 EEC) of the Council of the European Communities; or
	 
	10.1.32	 	Sponsors: if the Sponsors have executed the Personal Guarantees, either of the Sponsors
passes away or is found to be of unsound mind by a court of a Pertinent Jurisdiction, unless
there shall have been delivered to the Lender a substitute guarantee or other security
acceptable to the Lender within fifteen (15) days of either of the events mentioned
hereinabove occurring; or
	 
	10.1.33	 	Breach of Ministerial Decision: either of the Borrowers commits any breach of or varies or
cancels the Ministerial Decision in relation to its Ship without the previous written consent
of the Lender; or
	 
	10.1.34	 	HoldCo Guarantor events: at any time following the Acquisition:

	 	(a)	 	the shares of the HoldCo Guarantor are de-listed or suspended from, or cease to
trade (whether temporarily or permanently) on, [NASDAQ]; or
	 
	 	(b)	 	there is a change of the Chief Executive Officer or of the Chairman of the
HoldCo Guarantor [from the individuals having such positions on the date of the Second
Supplemental Agreement].

46

 

	10.2	 	Acceleration
	 
	 	 	The Lender may without prejudice to any other rights of the Lender, at any time after the
happening of an Event of Default so long as the same is continuing by notice to the
Borrowers declare that:
	 
	10.2.1	 	the obligation of the Lender to make its Commitment available shall be terminated, whereupon
the Commitment shall be reduced to zero forthwith; and/or
	 
	10.2.2	 	the Loan and all interest accrued and all other sums payable whensoever under the Security
Documents have become due and payable, whereupon the same shall, immediately or in accordance
with the terms of such notice, become due and payable.
	 
	10.3	 	Demand basis
	 
	 	 	If, under clause 10.2.2, the Lender has declared the Loan to be due and payable on demand,
at any time thereafter the Lender may by written notice to the Borrowers (a) demand
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.
	 
	11	 	INDEMNITIES
	 
	11.1	 	General indemnity
	 
	 	 	The Borrowers agree to indemnify on demand the Lender, without prejudice to any of the
Lender’s other rights under any of the Security Documents, against any loss (including loss
of Margin) or expense (including, without limitation, Break Costs) which the Lender shall
certify as sustained by it as a consequence of any Default, any prepayment of the Loan or
part thereof being made under clauses 4.3, 8.2.1(a) or 12.1 or any other repayment or
prepayment of the Loan or part thereof being made otherwise than on an Interest Payment
Date relating to the part of the Loan prepaid or repaid and/or the Loan not being made for
any reason (excluding any default by the Lender) after the Drawdown Notice has been given.
	 
	11.2	 	Environmental indemnity
	 
	 	 	The Borrowers shall indemnify the Lender on demand and hold it harmless from and against
all costs, claims, expenses, payments, charges, losses, demands, liabilities, actions,
Proceedings (civil or criminal), penalties, fines, damages, judgements, orders, sanctions
or other outgoings of whatever nature which may be incurred or made or asserted whensoever
against the Lender at any time, whether before or after the repayment in full of principal
and interest under this Agreement, arising howsoever out of an Environmental Claim made or
asserted against the Lender which would not have been, or been capable of being, made or
asserted against the Lender had it not entered into any of the Security Documents or been
involved in any of the resulting or associated transactions.

47

 

	11.3	 	Central Bank or European Central Bank reserve requirements indemnity
	 
	 	 	The Borrowers shall on demand promptly indemnify the Lender against any cost incurred or
loss suffered by the Lender 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 the loan or deposits obtained by the Lender to fund the whole or part of the
Lender and to the extent such cost or loss is not recoverable by the Lender under clause
12.2.
	 
	12	 	UNLAWFULNESS AND INCREASED COSTS
	 
	12.1	 	Unlawfulness
	 
	 	 	Regardless of any other provision of this Agreement, in the event that the Lender notifies
the Borrowers that by reason of:

	 	(a)	 	the introduction of or any change in any applicable law or regulation or any
change in the interpretation or application thereof; or
	 
	 	(b)	 	compliance by the Lender with any directive, request or requirement (whether
or not having the force of law) of any central bank or Government Entity

	 	 	it becomes unlawful or it is prohibited by or contrary to such directive request or
requirement for the Lender to maintain or give effect to any of its obligations in
connection howsoever with this Agreement then (i) the Lender shall be under no obligation
to make available any further amounts hereunder and (ii) the Borrowers must prepay the
Loan either immediately or on a future specified date not being earlier than the latest
date permitted by the relevant law, regulation, directive, request or requirement with
interest and commitment commission accrued to the date of prepayment and all other sums
payable whensoever by the Borrowers under this Agreement.
	 
	12.2	 	Increased costs
	 
	 	 	If the Lender certifies to the Borrowers that at any time the effect of any Capital
Adequacy Law or the interpretation or application thereof or the introduction of any
Capital Adequacy Law or any change therein or the effect of complying with any applicable
Capital Adequacy Law, is to:
	 
	12.2.1	 	subject the Lender to Taxes or change the basis of Taxation of the Lender relating to any
payment under any of the Security Documents (other than Taxes or Taxation on the overall net
income of the Lender imposed in the jurisdiction in which its principal or lending office
under this Agreement is located); and/or
	 
	12.2.2	 	increase the cost to, or impose an additional cost on, the Lender or its holding company in
making or continuing to make the Loan available; and/or
	 
	12.2.3	 	reduce the amount payable or the effective return to the Lender under any of the Security
Documents; and/or
	 
	12.2.4	 	reduce the Lender’s or its holding company’s rate of return on its overall capital by reason
of a change in the

48

 

	 	 	manner in which it is required to allocate capital resources to the Lender’s obligations
under any of the Security Documents; and/or
	 
	12.2.5	 	require the Lender or its holding company to make a payment or forgo a return on or
calculated by reference to any amount received or receivable by the Lender under any of the
Security Documents; and/or
	 
	12.2.6	 	require the Lender or its holding company to incur or sustain a loss (including a loss of
future potential profits) by reason of being obliged to deduct all or part of the Loan from
its capital for regulatory purposes,
	 
	 	 	then and in each such case (subject to clause 12.2) the Borrowers must on demand pay to
the Lender the amount which the Lender certifies (in a certificate setting forth the basis
of the computation of such amount but not including any matters which the Lender or its
holding company regards as confidential) is required to compensate the Lender and/or (as
the case may be) its holding company for such liability to Taxes, cost, reduction,
payment, forgone return or loss.
	 
	 	 	For the purposes of this clause 12.2 “holding company” means the company or entity (if
any) within the consolidated supervision of which the Lender is included.
	 
	12.3	 	Exception
	 
	 	 	Nothing in clause 12.2 shall entitle the Lender to receive any amount 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.
	 
	13	 	APPLICATION OF MONEYS, SET OFF, PRO-RATA PAYMENTS AND MISCELLANEOUS
	 
	13.1	 	Application of moneys
	 
	 	 	All moneys received by the Lender under or pursuant to any of the Security Documents and
expressed to be applicable in accordance with the provisions of this clause 13.1 or in a
manner determined in the Lender’s discretion, shall be applied in the following manner:
	 
	13.1.1	 	first, in or towards payment of all unpaid costs and expenses which may be owing to the
Lender under any of the Security Documents;
	 
	13.1.2	 	secondly, in or towards payment of any unpaid fees payable hereunder;
	 
	13.1.3	 	thirdly, in or towards payment to the Lender of any accrued interest owing in respect of the
Loan which shall have become due under this Agreement and any sums due under the Master
Agreement;
	 
	13.1.4	 	fourthly, in or towards repayment of the Loan (whether the same is due and payable or not);
13.15 fifthly, in or towards payment to the Lender for any loss or Break Costs incurred by it;
	 
	13.1.6	 	sixthly, in or towards payment of any other sums owing to the Lender under any of the
Security Documents; and

49

 

	13.1.7	 	seventhly, the surplus (if any) shall be paid to the Borrowers or to whomsoever else may
appear to the Lender to be entitled to receive such surplus.
	 
	13.2	 	Set-off
	 
	 	 	The Borrowers authorise the Lender (without prejudice to any of the Lender’s rights at
law, in equity or otherwise), at any time and without notice to the Borrowers, to apply
any credit balance to which the Borrowers or either of them is then entitled standing upon
any account of the Borrowers or either of them with any branch of the Lender in or towards
satisfaction of any sum due and payable from the Borrowers or either of them to the Lender
under any of the Security Documents. For this purpose, the Lender is authorised to
purchase with the moneys standing to the credit of such account such other currencies as
may be necessary to effect such application. The Lender shall not be obliged to exercise
any right given to it by this clause 13.2. The Lender shall notify the Borrowers forthwith
upon the exercise or purported exercise of any right of set off giving full details in
relation thereto. Nothing in this clause 13.2 shall be effective to create a charge or
other security interest.
	 
	13.3	 	Further assurance
	 
	 	 	The Borrowers undertake with the Lender to ensure that, throughout the Facility Period,
the Security Documents shall be valid and binding obligations of the respective parties
thereto and rights of the Lender 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
Lender may be necessary or desirable for perfecting the security contemplated or
constituted by the Security Documents.
	 
	13.4	 	Conflicts
	 
	 	 	In the event of any conflict between this Agreement and any of the other Borrower’s
Security Documents, the provisions of this Agreement shall prevail.
	 
	13.5	 	No implied waivers, remedies cumulative
	 
	 	 	No failure or delay on the part of the Lender to exercise any power, right or remedy under
any of the Security Documents shall operate as a waiver thereof, nor shall any single or
partial exercise by the Lender of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy. The remedies provided
in the Security Documents are cumulative and are not exclusive of any remedies provided by
law. No waiver by the Lender shall be effective unless it is in writing.
	 
	13.6	 	Severability
	 
	 	 	If any provision of this Agreement is prohibited, invalid, illegal or unenforceable in any
jurisdiction, such prohibition, invalidity, illegality or unenforceability shall not
affect or impair howsoever the remaining provisions thereof or affect the validity,
legality or enforceability of such provision in any other jurisdiction.
	 
	13.7	 	Force Majeure

50

 

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

51

 

	14.3	 	Each Borrower undertakes with the Lender that money from time to time credited to, or for the
time being standing to the credit of, a Borrower’s Operating Account shall, unless and until a
Default shall have occurred (whereupon the provisions of Clause 13.1 shall be and become
applicable), be available for application in the following manner:
	 
	14.3.1	 	FIRST: in or towards making payment to the Lender of any amounts due and payable to it under
any Security Document other than as referred to in (b) below;
	 
	14.3.2	 	SECONDLY: in or towards making the transfers to the Retention Account required pursuant to
Clause 14.4.1;
	 
	14.3.3	 	THIRDLY: as to any surplus from time to time arising on a Borrower’s Operating Account
following application as aforesaid, in or towards payment of the proper and reasonable
operating expenses of such Borrowers’ Ship.
	 
	14.4	 	Retention Account: credits and withdrawals
	 
	14.4.1	 	The Borrowers undertake with the Lender that, throughout the Facility Period, they will, in
relation to each Advance on each Retention Date relating thereto pay to the Lender for credit
to the Retention Account, the Retention Amount for such date, provided however that, to the
extent that there are moneys standing to the credit of the Borrowers’ Operating Accounts (or
either of them) as at the Retention Date, such moneys shall, up to an amount equal to the
Retention Amount, be transferred to the Retention Account from any or both of the Borrowers’
Operating Accounts on that Retention Date and to that extent the Borrowers’ obligations to
make the payments referred to in this clause 14.4.1 shall have been fulfilled upon such
transfer being effected.
	 
	14.4.2	 	Unless and until there shall occur an Event of Default (whereupon the provisions of clause
14.5 shall apply), all Retention Amounts credited to the Retention Account together with
interest from time to time accruing or at any time accrued thereon must be applied by the
Lender (and the Borrowers hereby irrevocably authorise the Lender so to apply the same) upon
each Repayment Date and/or on each day that interest is payable pursuant to clause 3.1, in or
towards payment to the Lender of the instalment then falling due for repayment or, as the case
may be, the amount of interest then due. Each such application by the Lender 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 Lender
is insufficient to meet the same.
	 
	14.4.3	 	Unless the Lender otherwise agrees in writing and subject to clause 14.4.2, neither of the
Borrowers shall be entitled to withdraw any moneys from the Retention Account at any time
during the Facility Period,
	 
	14.5	 	Application of accounts
	 
	 	 	At any time after the occurrence of an Event of Default, the Lender may without notice to
the Borrowers 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 under the Security Documents in the manner specified in clause
13.1.

52

 

	14.6	 	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 Operating Account
Charges and the Retention Account Charge.
	 
	15	 	ASSIGNMENT, TRANSFER AND LENDING OFFICE
	 
	15.1	 	Benefit and burden
	 
	 	 	This Agreement shall be binding upon, and enure for the benefit of, the Lender and the
Borrowers and their respective successors in title.
	 
	15.2	 	No assignment by Borrowers
	 
	 	 	Neither Borrower may assign or transfer any of its rights or obligations under this Agreement.

	 
	15.3 	 	
Transfers by Lender
	 
	 	 	The Lender may assign or transfer all or any part of its rights, benefits and/or
obligations under this Agreement and/or any of the other Security Documents to any one or
more banks or other financial institutions (a “Transferee”) (i) if the Transferee is a
company affiliated to, or in the same group or ownership or control as the Lender, without
the consent of, or consultation with, the Borrowers and (ii) otherwise, without the prior
written consent of the Borrowers but after consultation with the Borrowers, provided
always that any such Transferee, by delivery of such undertaking as the Lender may
approve, becomes bound by the terms of this Agreement and agrees to perform all or, as the
case may be, relevant part of the Lender’s obligations under this Agreement.
	 
	15.4	 	Transfer fees and expenses
	 
	 	 	If the Lender 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 Lender on demand
all costs, fees and expenses (including, but not limited to, legal fees and expenses), and
all value added tax thereon, certified by the Lender as having been incurred by the Lender
in connection with such transfer.
	 
	15.5	 	Documenting transfers
	 
	 	 	If the Lender assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clause 15.3, the Borrowers jointly and
severally undertake, immediately on being requested to do so by the Lender and at the cost
of the Lender, to enter into, and procure that the other Security Parties shall (at the
cost of the Lender) enter into, such documents as may be necessary or desirable to
transfer to the Transferee all or the relevant part of the Lender’s interest in the
Security Documents and all relevant references in this Agreement to the Lender shall
thereafter be construed as a reference to the Lender and/or its Transferee (as the case
may be) to the extent of their respective interests.
	 
	15.6	 	Sub-participation

53

 

	 	 	The Lender 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.
	 
	15.7	 	Lending office
	 
	 	 	The Lender shall lend through its office at the address specified in Clause 1.1 or through
any other office of the Lender selected from time to time by it through which the Lender
wishes to lend for the purposes of this Agreement. If the office through which the Lender
is lending is changed pursuant to this clause 15.7, the Lender shall notify the Borrowers.
	 
	15.8	 	Disclosure of information
	 
	 	 	The Lender may disclose to a prospective assignee, transferee or to any other person who
may propose entering into contractual relations with the Lender in relation to this
Agreement such information about the Borrowers and/or the other Security Parties as the
Lender shall consider appropriate.
	 
	16	 	NOTICES AND OTHER MATTERS
	 
	16.1	 	Notices
	 
	16.1.1	 	unless otherwise specifically provided herein, every notice under or in connection with this
Agreement shall be given in English by letter delivered personally and/or sent by post and/or
transmitted by fax; and
	 
	16.1.2	 	in this clause “notice” includes any demand, consent, authorisation, approval, instruction,
certificate, request, waiver or other communication.
	 
	16.2	 	Addresses for communications, effective date of notices
	 
	16.2.1	 	Subject to clause 16.2.2 and clause 16.2.4 notices to the Borrowers shall be deemed to have
been given and shall take effect when received in full legible form by the Borrowers at the
address and/or the fax number appearing below for at such other address or fax number as the
Borrowers may hereafter specify for such purpose to the Lender by notice in writing);

			
	            Address:	 	c/o the Manager,

83 Akti Miaouli & Flessa

Piraeus 185 83

Fax no: +30 210 4288501

	16.2.2	 	Notwithstanding the provisions of clause 16.2.1 or clause 16.2.4, a notice of Default and/or
a notice given pursuant to clause 10.2 or clause 10.3 shall be deemed to have been given and
shall take effect when delivered, sent or transmitted by the Lender to the Borrowers to the
address or fax number referred to in clause 16.2.1;
	 
	16.2.3	 	Subject to clause 16.2.4, notices to the Lender shall be deemed to be given, and shall take
effect, when received in full legible form by the Lender at the address and/or the fax number
appearing below (or at any

54

 

	 	 	such other address or fax number as the Lender may hereafter specify for such purpose to
the Borrowers by notice in writing);

			
	            Address:	 	47-49 Akti Miaouli

185 36 Piraeus

Greece

Fax No: +30 210 429 2601

	16.2.4	 	If under clause 16.2.1, clause 16.2.3 or clause 16.2.4 a notice would be deemed to have been
given and effective on a day which is not a working day in the place of receipt or is outside
the normal business hours in the place of receipt, the notice shall be deemed to have been
given and to have taken effect at the opening of business on the next working day in such
place.
	 
	17	 	BORROWERS’ OBLIGATIONS
	 
	17.1	 	Joint and several
	 
	 	 	Regardless of any other provision in any of the Security Documents, all obligations and
liabilities whatsoever of the Borrowers herein contained are joint and several and shall be
construed accordingly. Each of the Borrowers agrees and consents to be bound by the
Security Documents to which it becomes a party notwithstanding that the other Borrower may
not do so or be effectually bound and notwithstanding that any of the Security Documents
may be invalid or unenforceable against the other Borrower, whether or not the deficiency
is known to any of the Lender.
	 
	17.2	 	Borrowers as principal debtors
	 
	 	 	Each Borrower acknowledges 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 any of
the Security Documents and agrees that the Lender may continue to treat it as such,
whether or not the Lender is or becomes aware that such Borrower is or has become a surety
for the other Borrower.
	 
	17.3	 	Indemnity
	 
	 	 	The Borrowers undertake to keep the Lender fully indemnified on demand against all claims,
damages, losses, costs and expenses arising from any failure of either Borrower to perform
or discharge any purported obligation or liability of that Borrower 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
Borrower on any ground whatsoever, whether or not known to the Lender 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 Borrower (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)).

55

 

	17.4	 	Liability unconditional
	 
	 	 	None of the obligations or liabilities of the Borrowers under any Security Document shall
be discharged or reduced by reason of:
	 
	17.4.1	 	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 either
Borrower or any other person liable;
	 
	17.4.2	 	the Lender granting any time, indulgence or concession to, or compounding with,
discharging, releasing or varying the liability of, either 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 either
Borrower or any other person liable; or
	 
	17.4.3	 	anything done or omitted which but for this provision might operate to exonerate the
Borrowers or either of them.
	 
	17.5	 	Recourse to other security
	 
	 	 	The Lender shall not be obliged to make any claim or demand or to resort to any security
or other means of payment now or hereafter held by or available to them for enforcing any
of the Security Documents against either Borrower or any other person liable and no action
taken or omitted by the Lender in connection with any such security or other means of
payment will discharge, reduce, prejudice or affect the liability of the Borrowers under
the Security Documents to which any of them is, or is to be, a party.
	 
	17.6	 	Waiver of Borrowers’ rights
	 
	 	 	Each Borrower agrees with the Lender that, throughout the Facility Period, it will not,
without the prior written consent of the Lender:
	 
	17.6.1	 	exercise any right of subrogation, reimbursement and indemnity against the other Borrower or
any other person liable under the Security Documents;
	 
	17.6.2	 	demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to
such Borrower from the other Borrower or from any other person liable or demand or accept any
guarantee against financial loss or any document or instrument created or evidencing an
Encumbrance in respect of the same or dispose of the same;
	 
	17.6.3	 	take any steps to enforce any right against the other Borrower or any other person liable in
respect of any such moneys; or
	 
	17.6.4	 	claim any set-off or counterclaim against the other Borrower or any other person liable or
claim or prove in

56

 

	 	 	competition with the Lender in the
liquidation of the other Borrower or
any other person liable or have the
benefit of, or share in, any payment
from or composition with, the other
Borrower or any other person liable or
any security granted under any
Security Document now or hereafter
held by the Lender 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 Lender, it will prove
for the whole or any part of its claim
in the liquidation of the other
Borrower 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 Lender and applied in or
towards discharge of any moneys owing
under this Agreement in such manner as
the Lender shall require.
	 
	18	 	GOVERNING LAW
	 
	 	 	This Agreement and any non-contractual obligations in connection with this Agreement are
governed by and shall be construed in accordance with English law.
	 
	19	 	JURISDICTION
	 
	19.1	 	Exclusive jurisdiction
	 
	 	 	For the benefit of the Lender, and subject to clause 19 below, each of the Borrowers hereby
irrevocably agrees that the courts of England shall have exclusive jurisdiction:
	 
	19.1.1	 	to settle any disputes or other matters whatsoever arising under or in connection with this
Agreement (including any non-contractual obligations connected with this Agreement) and any
disputes or other such matters arising in connection with the negotiation, validity or
enforceability of this Agreement (including any non-contractual obligations connected with
this Agreement) or any part thereof, whether the alleged liability shall arise under the laws
of England or under the laws of some other country and regardless of whether a particular
cause of action may successfully be brought in the English courts; and
	 
	19.1.2	 	to grant interim remedies or other provisional or protective relief.
	 
	19.2	 	Submission and service of process
	 
	 	 	Each Borrower accordingly, irrevocably and unconditionally submits to the jurisdiction of
the English courts. Without prejudice to any other mode of service each Borrower:
	 
	19.2.1	 	irrevocably empowers and appoints HFW Nominees Ltd at present of Marlow House, Lloyds
Avenue, London EC3N 3AL, England as its agent to receive and accept on its behalf any process
or other document relating to any proceedings before the English courts in connection with
this Agreement (including any non-contractual obligations connected with this Agreement);
	 
	19.2.2	 	agrees to maintain such an agent for service of process in England from the date hereof
until the end of the Facility Period;
	 
	19.2.3	 	agrees that failure by a process agent to notify a Borrower of service of process will not
invalidate the

57

 

	 	 	proceedings concerned;
	 
	19.2.4	 	without prejudice to the effectiveness of service of process on its agent under clause
19.2.1 above but as an alternative method, consents to the service of process relating to any
such proceedings by mailing or delivering a copy of the process to its address for the time
being applying under clause 16.2;
	 
	19.2.5	 	agrees that if the appointment of any person mentioned in clause 19.2.1 ceases to be
effective, such Borrower shall immediately appoint a further person in England to accept
service of process on its behalf in England and, failing such appointment within seven (7)
days the Lender shall thereupon be entitled and is hereby irrevocably authorised by such
Borrower in those circumstances to appoint such person by notice to such Borrower.
	 
	19.3	 	Forum non conveniens and enforcement abroad
	 
	 	 	Each Borrower:
	 
	19.3.1	 	waives any right and agrees not to apply to the English courts or other court in any
jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the
ground that England is an inappropriate forum and/or that Proceedings have been or will be
started in
	 
	 	 	any other jurisdiction in connection with any dispute or related matter falling within
clause 19.1; and
	 
	19.3.2	 	agrees that a judgment or order of an English court in a dispute or other matter falling
within clause 19.1 shall be conclusive and binding on such Borrower and may be enforced
against it in the courts of any other jurisdiction.
	 
	19.4	 	Right of Lender, but not Borrowers, to bring Proceedings in any other jurisdiction
	 
	19.4.1	 	nothing in this clause 19 limits the right of the Lender to bring Proceedings, including
third party proceedings, against either Borrower, or to apply for interim remedies, in
connection with this Agreement in any other court and/or concurrently in more than one
jurisdiction;
	 
	19.4.2	 	the obtaining by the Lender of judgment in one jurisdiction shall not prevent the Lender
from bringing or continuing Proceedings in any other jurisdiction, whether or not these shall
be founded on the same cause of action.
	 
	19.5	 	Enforceability despite invalidity of Agreement
	 
	 	 	Without prejudice to the generality of clause 13.9, the jurisdiction agreement contained
in this clause 19 shall be severable from the rest of this Agreement and shall remain
valid, binding and in full force and shall continue to apply notwithstanding this
Agreement or any part thereof being held to be avoided, rescinded, terminated, discharged,
frustrated, invalid, unenforceable, illegal and/or otherwise of no effect for any reason.
	 
	19.6	 	Effect in relation to claims by and against non-parties
	 
	19.6.1	 	for the purpose of this clause “Foreign Proceedings” shall mean any Proceedings except
proceedings

58

 

	 	 	brought or pursued in England arising out of or in connection with or in any way related to
(i) any of the Security Documents or any assets subject thereto or (ii) any action of any
kind whatsoever taken by the Lender pursuant thereto or which would, if brought by either
Borrower against the Lender, have been required to be brought in the English courts;
	 
	19.6.2	 	neither Borrower may bring or pursue any Foreign Proceedings against the Lender and shall
use its best endeavours to prevent persons not party to this Agreement from bringing or
pursuing any Foreign Proceedings against the Lender;
	 
	19.6.3	 	if, for any reason whatsoever, any Security Party and/or any third party brings or pursues
against the Lender, any Foreign Proceedings, the Borrowers must indemnify the Lender on demand
in respect of any and all claims, losses, damages, demands, causes of action, liabilities,
costs and expenses (including, but not limited to, legal costs) of whatsoever nature howsoever
arising from or in connection with such Foreign Proceedings which the Lender certifies as
having been incurred by it;
	 
	19.6.4	 	the Lender and the Borrowers hereby agree and declare that the benefit of this clause 19
shall extend to and may be enforced by any officer, employee, agent or business associate of
the Lender against whom either Borrower brings a claim in connection howsoever with any of the
Security Documents or any assets subject thereto or any action of any kind whatsoever taken
by, or on behalf of or for the purported benefit of the Lender pursuant thereto or which, if
it were brought against the Lender, would fall within the material scope of clause 19.1. In
those circumstances this clause 19 shall be read and construed as if references to the Lender
were references to such officer, employee, agent or business associate, as the case may be.

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

59

 

Schedule 1

Form of Drawdown Notice

(referred to in clause 2.4)

			
	To:	 	PIRAEUS BANK A.E. 47-49 Akti
 Miaouli 185 36 Piraeus Greece

[•]

Loan Agreement dated 19 March 2008

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

We hereby give you notice that we wish to draw down Advance [A] [B] namely USD [•] on [•]

20[•] and select a first Interest Period in respect thereof of [•] months. The funds
should be credited to [name and number of account] with [details of bank in New York City].

We confirm that:

	(a)	 	no Default has occurred;
	 
	(b)	 	the representations and warranties contained in clause 7 of the Loan are true and correct at
the date hereof as if made with respect to the facts and circumstances existing at such date;
	 
	(c)	 	the borrowing to be effected by the drawdown of the Loan will be within our corporate powers,
has been validly authorised by appropriate corporate action and will not cause any limit on
our borrowings (whether imposed by statute, regulation, agreement or otherwise howsoever) to
be exceeded;
	 
	(d)	 	there has been no material adverse change in our financial position or in the combined
financial position of ourselves, the Manager and our respective Related Companies, from that
described by us to the Lender in the negotiation of the Loan Agreement and/or in any documents
or statements already delivered to the Lender in connection therewith; and
	 
	(e)	 	there are no Required Authorisations.

CHALLENGER ENTERPRISES LTD.

CRUSADER ENTERPRISES LTD.

	 	 	 	 	 

	By

	 	 

	 	 
	Authorised Signatory	 	 

60

 

Schedule 2

Conditions Precedent

(referred to in clause 9.1)

	Part 1
	 
	(a)	 	Corporate Documents
	 
	 	 	Certified copies of all documents which evidence or relate to the constitution of each
corporate Security Party and its current corporate existence;
	 
	b)	 	Corporate Authorities

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

	(c)	 	Required Authorisations
	 
	 	 	a certificate (dated no earlier than 5 Banking Days prior to the relevant Drawdown Date)
that there are no Required Authorisations or that there are no Required Authorisations
except those described in such certificate and Certified Copies of which as duly executed
(including any conditions and/or documents ancillary thereto) are appended thereto;
	 
	(d)	 	Certificate of incumbency
	 
	 	 	a list of directors and officers of each Corporate Security Party specifying the names and
positions of such persons, certified by an officer of such Security Party to be true,
complete and up to date;
	 
	(e)	 	Beneficial Ownership
	 
	 	 	Evidence acceptable to the Lender confirming the beneficial ownership and control of the
Borrowers and the Corporate Guarantor;
	 
	(f)	 	Certified Copies of Underlying Documents
	 
	 	 	Certified copies of the MOAs and such of the Underlying Documents as are then in existence;

61

 

	(g)	 	Security Documents
	 
	 	 	the Master Agreement, the Master Agreement Assignment and the Corporate Guarantee;
	 
	(h)	 	Accounts and “Know your Customer”
	 
	 	 	evidence that the Accounts have been duly established and duly completed mandate forms and
all other documentation required by the Lender in relation to the Accounts and in relation
to the Lender’s “Know your Customer” requirements;
	 
	(i)	 	Fees
	 
	 	 	evidence that the arrangement fee due under clause 5.1 has been paid in full; and
	 
	(j)	 	Security Parties’ process agent
	 
	 	 	a letter from each Security Party’s agent for receipt of service of proceedings referred
to in each of the Security Documents to which such Security Party is a party accepting its
appointment under each such Security Document

Part 2

	 	 	In this Part 2 “Relevant Advance” means the Advance which is to be drawn down, “Relevant
Ship” means the Ship to be financed thereby and “Relevant Owner” means the Borrower which
is the buyer of the Relevant Ship.
	 
	(a)	 	Drawdown notice
	 
	 	 	a Drawdown Notice, duly executed;
	 
	(b)	 	Conditions precedent
	 
	 	 	evidence that the conditions precedent set out in Part 1 of schedule 2 remain fully
satisfied;
	 
	(c)	 	Ship conditions
	 
	 	 	evidence that the Relevant Ship:

	 	(i)	 	Registration and Encumbrances
	 
	 	 	 	is registered in the name of the relevant Borrowers through the relevant Registry
under the laws and flag of Greece and that such Ship and its Earnings, Insurances
and Requisition Compensation are free of Encumbrances (except Permitted
Encumbrances); and

62

 

	 	(ii)	 	Classification
	 
	 	 	 	maintains the relevant Classification free of all requirements and
recommendations of the relevant Classification Society (such evidence to be
provided at least 15 days prior to the relevant Drawdown Date); and
	 
	 	(iii)	 	Insurance
	 
	 	 	 	is insured in accordance with the provisions of the Ship Security Documents
relating to the Relevant Ship, and all requirements of the Security Documents in
respect of such insurance have been complied with (including without limitation,
confirmation from the protection and indemnity association or other insurer with
which such Ship is, or is to be, entered for insurance or insured against
protection and indemnity risks (including oil pollution risks) that any necessary
declarations required by the association or insurer for the removal of any oil
pollution exclusion have been made and that any such exclusion does not apply to
such Ship), such evidence to be provided at least 15 days prior to the relevant
Drawdown Date together with evidence that all insurance, brokers and clubs will
provide upon request a letter of undertaking to the lender as a form acceptable to
the Lender.

	(d)	 	No claim
	 
	 	 	evidence that neither the Seller of the Relevant Ship nor any other party who may have a
claim against has a claim against the Relevant Ship or the Relevant Owner and that there
have been no breaches of the terms of the MOA relating thereto or any default thereunder;
	 
	(e)	 	Title and no Encumbrances
	 
	 	 	evidence that good title to the Relevant Ship has passed to the Relevant Owner which is
the buyer thereof and that there is no Encumbrance of any kind created or permitted by any
person on or relating to the MOA in respect of the relevant Ship other than Permitted
Encumbrances and evidence that the gross acquisition cost does not exceed USD47,250,000;
	 
	(f)	 	Equity
	 
	 	 	evidence that the part of the purchase price payable to the Seller of the Relevant Ship
pursuant to the relevant MOA, which is not being funded pursuant to this Agreement has been
paid to the Seller;
	 
	(g)	 	Class confirmation
	 
	 	 	evidence from the Classification Society that the Relevant Ship is in class, free of any
outstanding recommendations;
	 
	(h)	 	Fees and commissions
	 
	 	 	evidence that any fees and commissions due payable by the Borrowers to the Lender pursuant
to the terms of clause 5.1 or any other provision of the Security Documents have been paid
in full;

63

 

	(i)	 	Security Documents
	 
	 	 	The Operating Account Charges and the Retention Account Charge in respect of the Operating
Accounts and the Retention Account opened by the Relevant Owner, the Mortgage, the General
Assignment and the Manager’s Undertaking in respect of the Relevant Ship, each duly
executed and delivered;
	 
	(j)	 	Notices of assignment
	 
	 	 	duly executed notices of assignment in the forms prescribed by the relevant Ship Security
Documents for the Relevant Ship;
	 
	(k)	 	Mortgage registration
	 
	 	 	evidence that the Mortgage in respect of the Relevant Ship has been registered against
such Ship through the relevant Registry under the laws and flag of Greece;
	 
	(l)	 	Security Parties’ process agent
	 
	 	 	a letter from each Security Party’s agent for receipt of service of proceedings referred
to in each Security Document to which the relevant Security Party is a parry, accepting
its appointment under each of the relevant Security Documents;
	 
	(m)	 	Registration forms
	 
	 	 	such statutory forms duly signed by the Borrowers and the other Security Parries as may be
required by the Lender to perfect the security contemplated by the Security Documents;
	 
	(n)	 	Insurance opinion
	 
	 	 	an opinion from insurance consultants appointed by the Lender at the Borrower’s expense,
on the insurances effected or to be effected in respect of Relevant Ship and satisfactory
in all respects to the Lender;
	 
	(o)	 	Management Agreement
	 
	 	 	a certified copy of the Management Agreement in respect of the Relevant Ship;
	 
	(p)	 	DOC and application for SMC
	 
	 	 	a Certified Copy of the DOC and, for the Relevant Ship, either (i) a Certified Copy of the
SMC therefor or (ii) evidence satisfactory to the Lender that the Operator has applied to
the relevant Regulatory Agency for an SMC for such Ship to be issued pursuant to the Code
within any time limit required or recommended by such Regulatory Agency;
	 
	(q)	 	Material Adverse Change
	 
	 	 	satisfactory evidence that there has been no material adverse change in the financial
position of the Security Parties or any of them or the combined financial position of the
Borrowers, the Corporate Guarantor and their

64

 

	 	 	respective Related Companies, from that described by the Borrowers to the Lender or any of
them in the negotiation of this Agreement;
	 
	(r)	 	Foreign legal opinions
	 
	 	 	opinions on matters on Liberian and Greek law satisfactory to the Lender;
	 
	(s)	 	Further opinions
	 
	 	 	such further professional opinions as the Lender may require; and
	 
	(t)	 	Further conditions precedent
	 
	 	 	evidence of fulfilment of such further conditions precedent as the Lender may require.

65

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}]]