Document:

Exhibit 10.11

 

Dated: 30th October, 2008

ALPHA BANK A.E.

as Bank

- and -

KELSEN
SHIPPING CO. and

MONTES
SHIPPING CO.

(as joint and several Borrowers)

- and -

COSTAMARE SHIPPING COMPANY S.A.
(as Manager and existing Corporate Guarantor)

- and -

COSTAMARE INC.
(as New Corporate Guarantor)

FIRST SUPPLEMENTAL AGREEMENT

to a loan agreement dated 7th December, 2007

in relation to a loan facility in the amount of

US$150,000,000

Theo V. Sioufas & Co.

Law Offices

Piraeus

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 CLAUSE

 	
  

 	
 HEADINGS

 	
  

 	
  

 	
 PAGE

 
	

 

 	
  

 	

 

 	
  

 	
  

 	

 

 
	
 1.

 	
 DEFINITIONS

 	
  

 	
 2

 
	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 REPRESENTATIONS
 AND WARRANTIES

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 
	
 3.

 	
 AGREEMENT OF
 THE BANK

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
 CONDITIONS

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
 VARIATIONS
 TO THE PRINCIPAL AGREEMENT

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 CONTINUANCE
 OF PRINCIPAL AGREEMENT AND THE SECURITY DOCUMENTS

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
 RELEASE OF
 MANAGER UNDER THE MANAGER’S GUARANTEE

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 FEES AND
 EXPENSES

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 9.

 	
 MISCELLANEOUS

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 10.

 	
 ENTIRE
 AGREEMENT AND AMENDMENT; EFFECT ON PRINCIPAL AGREEMENT

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 11.

 	
 APPLICABLE
 LAW AND JURISDICTION

 	
  

 	
 22

 

THIS AGREEMENT is dated 30th day of October, 2008 and made

BETWEEN

	
  

 	
  

 
	
 (1)

 	
 KELSEN SHIPPING CO.
 AND MONTES SHIPPING CO,
 as joint and several Borrowers;

 
	
  

 	
  

 
	
 (2)

 	
 ALPHA BANK A.E.,
 as Bank;

 
	
  

 	
  

 
	
 (3)

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

 
	
  

 	
  

 
	
 (4)

 	
 COSTAMARE INC., a
 corporation incorporated in the Republic of the Marshall Islands whose
 registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
 Island, Majuro, Marshall Islands MH96960 (hereinafter called the “New
 Corporate Guarantor”, which expressions shall include its
 successors in title);

 

AND IS SUPPLEMENTAL to a loan agreement dated 7th December, 2007 made between
(1) KELSEN SHIPPING CO. and MONTES SHIPPING CO., each a
Liberian corporation (therein and hereinafter together referred to as the “Borrowers” and
singly a “Borrower”),
as joint and several borrowers, (2) ALPHA BANK A.E., as lender,
and (3) COSTAMARE SHIPPING COMPANY S.A., of Panama,
as Corporate Guarantor (therein called the “Corporate Guarantor” and “Manager”
and hereinafter called the “Manager”), on the terms and conditions of which the
Bank agreed to make and made available to the Borrowers on a joint and several
basis a loan facility in the amount of One hundred fifty million United States
Dollars (US$150,000,000) for the purposes set forth therein (the said loan
agreement hereinafter called the “Principal Agreement”).

W H E R E A S:

	
  

 	
  

 
	
 (A)

 	
 pursuant to a Drawdown Notice from the Borrowers to the Bank, the
 Bank has advanced to the Borrowers, as joint and several Borrowers, the full
 amount of the Commitment in the amount of United States Dollars One hundred
 million (US$150,000,000) (as the Borrowers and the New Corporate Guarantor
 hereby jointly acknowledge), out of which the principal amount of One hundred
 forty six million United States Dollars (US$146,000,000) remains outstanding
 immediately prior to the date of this Agreement 

 

1

	
  

 	
  

 
	
  

 	
 (as the Borrowers and the New Corporate Guarantor hereby jointly and
 severally acknowledge);

 
	
  

 	
  

 
	
 (B)

 	
 pursuant to a master agreement (on the 2002 ISDA Master Agreement
 (Multicurrency-Crossborder) form) dated as of 13th February, 2008 and made
 between the Bank and the Borrowers,
 the Borrowers have entered or may enter into certain Transactions (as such term
 is defined in the said master agreement) under separate Confirmations (as
 such term is defined in the said master agreement) (the said master
 agreement, all Transactions from time to time entered into or Confirmations
 exchanged under the said master agreement and any amending, supplemental or
 replacement agreement are hereinafter called the “Master Agreement”);
 and

 
	
  

 	
  

 
	
 (C)

 	
 the Borrowers, the Manager and the New Corporate Guarantor have
 together requested the Bank to agree to the release of the Manager from its
 obligations under its Corporate Guarantee contained in Clause 13 of the
 Principal Agreement (the “Manager’s Guarantee”) executed in
 security of all the obligations of the Borrowers under the Principal
 Agreement and the replacement of the Manager by the New Corporate Guarantor
 as Corporate Guarantor of the obligations of the Borrowers under the
 Principal Agreement as hereby amended and the Master Agreement, and the Bank
 has agreed so to do conditionally upon terms that (inter alia) the Principal
 Agreement shall be amended in the manner hereinafter set out.

 

NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:

	
  

 	
  

 
	
 1.

 	
 Definitions

 
	
  

 	
  

 
	
 1.1

 	
 Words and expressions defined in the Principal Agreement and not
 otherwise defined herein (including the Recitals hereto) shall have the same
 meanings when used in this Agreement.

 
	
  

 	
  

 
	
 1.2

 	
 In addition, in this Agreement the words and expressions specified
 below shall have the meanings attributed to them below:

 
	
  

 	
  

 
	
  

 	
  “Effective Date” means
 the date, not being later than 30th
 October, 2008 (or such later date as the Bank may agree) upon which all the
 conditions contained in Clause 5 shall have been satisfied and this Agreement
 shall become effective;

 
	
  

 	
  

 
	
  

 	
  “Charterparty
 Assignment Side Agreement” in relation to each
 Vessel means a side agreement, whereby the first priority Charterparty
 Assignment in respect of such Vessel made between the Bank and the Owner
 thereof and dated 19th December, 2007 (in the 

 

2

	
  

 	
  

 
	
  

 	
 case of MAERSK KURE) and dated 14th December, 2007 (in
 the case of MAERSK KAWASAKI) shall be amended by the parties thereto, in form
 satisfactory to the Bank (together, the “Charterparty Assignment Side Agreements”);

 
	
  

 	
  

 
	
  

 	
  “Confirmation” means
 a Confirmation exchanged, or deemed exchanged, between the Bank and the
 Borrowers as contemplated by the Master Agreement;

 
	
  

 	
  

 
	
  

 	
  “General Assignment
 Side Agreement” in relation to each Vessel means a
 side agreement, whereby the first priority General Assignment in respect of
 such Vessel made between the Bank and the Owner thereof and dated 19th
 December, 2007 (in the case of MAERSK KURE) and dated 14th December, 2007 (in the case
 of MAERSK KAWASAKI) shall be amended by the parties thereto, in form
 satisfactory to the Bank (together, the “General Assignment Side Agreements”);

 
	
  

 	
  

 
	
  

 	
  “Loan Agreement” means
 the Principal Agreement as hereby amended and as the same may from time to
 time be further amended and/or supplemented;

 
	
  

 	
  

 
	
  

 	
  “Master Agreement” means
 the Master Agreement (on the 1992 ISDA (Multicurrency - Crossborder) form as
 modified (or any other form of master agreement relating to interest or
 currency exchange transactions)) made or to be made between the Bank and the
 Borrowers, and includes the Schedule thereto and all transactions from time
 to time entered into and Confirmations from time to time exchanged under the
 Master Agreement and any amending, supplementing or replacement agreements
 made from time to time;

 
	
  

 	
  

 
	
  

 	
  “Master Agreement
 Security Deed” means a security deed executed or (as
 the context may require) to be executed by the Borrowers in favour of the
 Bank in relation to certain of the rights of the Borrowers under the Master
 Agreement in form as the Bank shall require;

 
	
  

 	
  

 
	
  

 	
  “Mortgage Addendum”
 means:

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 in relation to the MAERSK KURE, the
 addendum to first preferred Greek Ship mortgage (Notarial Deed No.
 33038/19-12-2007 of Mrs Z. Souri, Notary Public of Piraeus, Greece)
 registered over such Vessel in favour of the Bank, whereby the said first
 mortgage shall be amended, executed or (as the context may require) to be
 executed by the Owner thereof in favour of the Bank in form satisfactory to
 the Bank; and

 

3

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 in relation to the MAERSK KAWASAKI,
 the addendum to first preferred Greek Ship mortgage (Notarial Deed
 No. 33025/14-12-2007 of Mrs Z. Souri, Notary Public of Piraeus, Greece)
 registered over such Vessel in favour of the Bank, whereby the said first
 mortgage shall be amended, executed or (as the context may require) to be
 executed by the Owner thereof in favour of the Bank in form satisfactory to
 the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (together, the “Mortgage Addenda”)

 
	
  

 	
  

 	
  

 
	
  

 	
  “New Manager’s
 Undertaking” the Manager’s undertaking executed or
 (as the context may require) to be executed by the Manager in favour of the
 Bank in respect of the Vessels in form satisfactory to the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
  “New Security
 Documents” means the Master Agreement Security Deed,
 the Mortgage Addenda, the Charterparty Assignment Side Agreements and the
 General Assignment Side Agreements;

 
	
  

 	
  

 	
  

 
	
  

 	
  “Second General
 Assignment” means in relation to each Vessel the
 second priority Deed of Assignment of the Earnings, Insurances and
 Requisition Compensation (as such terms are therein defined) of such Vessel,
 to be executed by the Owner thereof in favour of the Bank, in form and
 substance as the Bank shall reasonably require; and

 
	
  

 	
  

 	
  

 
	
  

 	
  “Second Mortgage” means
 in relation to each Vessel the second preferred Greek Ship mortgage on such
 Vessel executed or (as the context may require) to be executed by the Owner
 thereof in favour of the Bank in form satisfactory to the Bank.

 
	
  

 	
  

 	
  

 
	
 1.3

 	
 (a) where the context so admits words importing the singular number
 only shall include the plural and vice versa and words importing persons
 shall include firms and corporations, (b) clause headings are inserted for
 convenience of reference only and shall be ignored in construing this
 Agreement, (c) references to Clauses are to clauses of this Agreement save as
 may be otherwise expressly provided in this Agreement and (d) all capitalised
 terms used herein and not otherwise defined herein shall have the meanings
 ascribed to them in the Principal Agreement.

 
	
  

 	
  

 	
  

 
	
 2.

 	
 Representations and warranties

 
	
  

 	
  

 	
  

 
	
  

 	
 The Borrowers and the New Corporate Guarantor hereby jointly and
 severally represent and warrant to the Bank as at the date hereof that the
 representations and warranties set forth in clause 6.1 of the Principal
 Agreement as hereby amended (updated mutatis mutandis to the date of this
 Agreement) are (and will be on the Effective Date) true and 

 

4

	
  

 	
  

 	
  

 
	
  

 	
 correct as if all references therein to “this Agreement” were references
 to the Principal Agreement as amended and supplemented by this Agreement.

 
	
  

 	
  

 	
  

 
	
 3.

 	
 Agreement of the Bank

 
	
  

 	
  

 	
  

 
	
  

 	
 The Bank, relying upon each of the representations and warranties set
 out in Clause 2 hereby agrees with the Borrowers and the New Corporate
 Guarantor, subject to and upon the terms and conditions of this Agreement and
 in particular, but without limitation, subject to the fulfilment of the
 conditions precedent set out in Clause 4 to the release of the Manager from
 its obligations under the Manager’s Guarantee and the replacement of the
 Manager by the New Corporate Guarantor as Corporate Guarantor of the
 obligations of the Borrowers under the Principal Agreement as hereby amended,
 and that the Principal Agreement be amended in the manner more particularly
 set out in Clause 5.1.

 
	
  

 	
  

 	
  

 
	
 4.

 	
 Conditions

 
	
  

 	
  

 	
  

 
	
 4.1

 	
 The agreement of the Bank contained in Clause 3 shall be expressly
 subject to the fulfilment of the conditions set out in this Clause and
 further subject to the condition that the Bank shall have received on or
 before the Effective Date in form and substance satisfactory to the Bank and
 its legal advisers:

 

	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 a certificate of good standing or equivalent document issued by the
 competent authorities of the place of its incorporation in respect of each of
 the Borrowers and the New Corporate Guarantor;

 
	
  

 	
  

 	
  

 
	
  

 	
 b.

 	
 certified and duly legalised copies of (i) resolutions of the
 directors and shareholders of each Borrower and (ii) resolutions of the
 directors of the New Corporate Guarantor, evidencing approval of this
 Agreement and of such of the New Security Documents to which each is or is to
 be a party and authorising appropriate officers or attorneys to execute the
 same and to sign all notices required to be given under this Agreement on its
 behalf or other evidence of such approvals and authorisations as shall be
 acceptable to the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
 c.

 	
 all documents evidencing any other necessary action or approvals or
 consents with respect to this Agreement, the New Security Documents and the
 New Manager’s Undertaking;

 
	
  

 	
  

 	
  

 
	
  

 	
 d.

 	
 the original of any power(s) of attorney issued in favour of any
 person executing this Agreement or any of the New Security Documents on
 behalf of each of the Borrowers and the New Corporate Guarantor;

 

5

	
  

 	
  

 	
  

 
	
  

 	
 e.

 	
 such favourable legal opinions from lawyers acceptable to the Bank
 and its legal advisors on such matters concerning the laws of Greece,
 Marshall Islands and such other relevant jurisdiction as the Bank shall
 require;

 
	
  

 	
  

 	
  

 
	
  

 	
 f.

 	
 evidence that each Vessel is fully classed with the highest
 classification available with classification Society a full member of IACS
 and such classification is and will be free of all overdue requirements,
 recommendations or notations (other than such notified in writing to the Bank
 and accepted by the Bank in writing) and with all trading and other class
 certificates, national and international, valid and in full force and effect,
 and will continue throughout the Security Period to maintain such Vessel with
 such classification (or equivalent) and which is in all respects satisfactory
 to the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
 g.

 	
 each of the Master Agreement, the New Security Documents and the New
 Manager’s Undertaking duly executed by the respective parties thereto and,
 where appropriate, duly registered in favour of the Bank;

 
	
  

 	
  

 	
  

 
	
  

 	
 h.

 	
 evidence satisfactory to the Bank that each Vessel is managed by the
 Manager; and

 
	
  

 	
  

 	
  

 
	
  

 	
 i.

 	
 evidence that each Vessel holds a valid SMC and a valid ISSC.

 
	
  

 	
  

 	
  

 
	
 5.

 	
 Variations to the Principal Agreement

 
	
  

 	
  

 	
  

 
	
 5.1

 	
 In consideration of the agreement of the Bank contained in Clause
 3.1, the Borrowers and the New Corporate Guarantor hereby jointly and
 severally agree with the Bank that (subject to the satisfaction of the
 conditions precedent contained in Clause 4) with effect from the Effective Date:

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 the provisions of the Principal Agreement shall be varied and/or
 amended and/or supplemented as follows:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the following new definitions shall be added in alphabetical order in
 Clause 1.2 of the Principal Agreement reading as follows:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  ““Confirmation” means a
 Confirmation exchanged, or deemed exchanged, between the Bank and the
 Borrowers as contemplated by the Master Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Corporate
 Guarantor” means COSTAMARE
 INC., a company duly incorporated under the
 laws of the Republic of the Marshall Islands, 

 

6

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 whose registered
 office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
 Marshall Islands MH96960;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Credit Support
 Document”, “Credit Support Provider” and “Early
 Termination Date” have the respective meanings given to these
 expressions in section 14 of the Master Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Manager’s
 Undertaking” the Manager’s undertaking executed or (as the
 context may require) to be executed by the Manager in favour of the Bank in respect
 of the Vessels in form and substance as the Bank shall reasonably require;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Master Agreement”
 means the Master Agreement (on the 2002 ISDA
 (Multicurrency - Crossborder) form as modified (or any other form of master
 agreement relating to interest or currency exchange transactions) made or to
 be made between the Bank and the Borrowers, and includes the Schedule thereto
 and all transactions from time to time entered into and Confirmations from
 time to time exchanged under the Master Agreement and any amending,
 supplementing or replacement agreements made from time to time;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Master Agreement
 Liabilities” means, at any relevant time, all liabilities actual
 or contingent, present or future, of the Borrowers to the Bank under the
 Master Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Master Agreement
 Security Deed” means a security deed executed or (as
 the context may require) to be executed by the Borrowers in favour of the
 Bank in relation to certain of the rights of the Borrowers under the Master
 Agreement in form and substance as the Bank shall reasonably require;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Second General
 Assignment” means in relation to each Vessel the second
 priority Deed of Assignment of the Earnings, Insurances and Requisition
 Compensation (as such terms are therein defined) of such Vessel, to be
 executed by the Owner thereof in favour of the Bank, in form and substance as
 the Bank shall reasonably require;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Second Mortgage” means in
 relation to each Vessel the second preferred Greek Ship mortgage on such
 Vessel executed or (as the 

 

7

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 context may
 require) to be executed by the Owner thereof in favour of the Bank in form
 and substance as the Bank shall reasonably require;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Transaction” means a
 transaction entered into between the Bank and the Borrowers governed by the
 Master Agreement”;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “US-GAAP”
 means
 United States generally accepted accounting principles, concepts, bases and
 policies consistently applied.;

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Vasileios Konstantakopoulos Family” means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (a)

 	
 Vasileios Kostantakopoulos;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (b)

 	
 Kostantinos V. Kostantakopoulos;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (c)

 	
 Achillefs V. Kostantakopoulos;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (d)

 	
 Christos V. Kostantakopoulos;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (e)

 	
 all the lineal descendants in direct line
 of the said Vassileios Kostantakopoulos, Achillefs V. Kostantakopoulos,
 Kostantinos V. Kostantakopoulos and Christos V. Konstantakopoulos;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (f)

 	
 a husband and wife
 or former husband or wife or widower or widow of any of the above persons;
 and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (g)

 	
 the estates,
 trusts or legal representatives of any of the above person;.”.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The following definitions of Clause 1.2 of the Principal Agreement
 shall be deleted
 and replaced by the following:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Corporate
 Guarantee” means the irrevocable and unconditional guarantee
 of the obligations of the Borrowers under this Agreement, the Master
 Agreement and the Security Documents executed or to be executed by the
 Corporate Guarantor in favour of the Bank, in form and 

 

8

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 substance
 satisfactory to the Bank,, as the same may from time to time be amended and/or
 supplemented;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Corporate
 Guarantor” means COSTAMARE
 INC., a company duly incorporated under the laws of the
 Republic of the Marshall Islands, whose registered office is at Trust Company
 Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Earnings Account”
 in relation to each Borrower means an account
 opened or to be opened and maintained in the name of such Borrower with the
 Bank and shall include any sub-accounts or call accounts (whether in Dollars
 or any other currency) opened under the same designation or any revised
 designation or number from time to time notified by the Bank to the Borrowers
 and to which (inter alia) all Earnings of the Vessel owned by such Borrower
 are to be paid in accordance with Clauses 11.5 and 8.9(b) (together, the “Earnings
 Accounts”);

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Manager” means COSTAMARE SHIPPING COMPANY S.A.,
 a
 company incorporated in and existing under the laws of the Republic of Panama
 having its registered office at Panama City, Republic of Panama and having an
 office established at 60 Zephyrou Street, Athens, Greece under the Greek laws
 89/67, 378/68, 27/75 and 814/78 (as amended) or such other person as may from
 time to time be approved by the Bank for the purpose of managing the Vessel;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Outstanding
 Indebtedness” means, the aggregate of (a) the Loan
 and interest thereon (and interest on any unpaid interest thereon and on any
 other sums of money on which interest is stated in this Agreement to be
 payable), (b) the Master Agreement Liabilities and (c) all such expenses,
 claims, liabilities, losses, costs, duties, fees, charges or other moneys as
 are stated in this Agreement and the Security Documents to be payable by the
 Borrowers to or recoverable from the Borrowers by the Bank (or in respect of
 which the Borrowers agrees in this Agreement, the Master Agreement and the
 Security Documents to indemnify the Bank) whether actually or contingently,
 presently or in the future together with interest thereon as provided in this
 Agreement and (d) all other sums of money 

 

9

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 from time to time
 owing to the Bank under the Security Documents or any of them whether
 actually or contingently, presently or in the future;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Security
 Documents” means the Mortgage, the General Assignment, the
 Second General Assignment, the Second Mortgage, the Master Agreement Security
 Deed, the Accounts Pledge Agreement, the Corporate Guarantee and any and
 every other document and any other Credit Support Documents (including if the
 context requires this Agreement and the Master Agreement), as may have been
 or shall from time to time after the date of this Agreement be executed to
 guarantee and/or to secure the whole or any part of the Outstanding
 Indebtedness and/or any and all other obligations of the Borrower pursuant to
 this Agreement and/or the Master Agreement and/or the other Security
 Documents;”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Security Party” means each
 of the Borrowers, the Corporate Guarantorand all such other persons (other
 than the Manager) as may from time to time may give guarantees or other
 security to the Bank for the Outstanding Indebtedness (together, the “Security
 Parties”);”;

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 in clause 1.2. of the Principal Agreement the definitions “Collateral
 Guarantee”, “Collateral Mortgage”, “Collateral General Assignment”,
 “Collateral Security Documents”, “Collateral Owners”, “Collateral Vessels”
 shall be deleted and all references to such defined terms in the Principal
 Agreement shall be deleted.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 A new sub-clause (m) is added to Clause 1.3 of the Principal
 Agreement reading as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 “(m)

 	
 words and
 expressions defined in the Master Agreement, unless the context otherwise
 requires, when used herein, have the same meaning.”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 the first paragraph of clause 5.3 of the Principal Agreement is
 numbered to 5.3(a) and a new sub-clause 5.3(b) shall be added in the
 Principal Agreement reading as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

 	
 For the avoidance
 of doubt, Clause 5.3(a) does not apply in respect of sums due from the
 Borrowers to the Bank under or in 

 

10

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 connection with
 the Master Agreement as to which sums the provisions of section 2(d)
 (Deduction or Withholding for Tax) of the Master Agreement shall apply.”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 in sub-clause (a) to clause 6.1 of the Principal Agreement the words “as limited liability companies” shall
 be deleted;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vii)

 	
 sub-clause (g) to clause 6.1 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(g)

 	
 Shipping Company

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (viii)

 	
 new sub-clause (m) to Clause 6.1 of the Principal Agreement shall be
 added reading as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ix)

 	
  “(m)

 	
 Shareholding

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 each Borrower is a
 fully owned Subsidiary of the Corporate Guarantor and 100% of the total
 issued share capital of the Corporate Guarantor is directly or indirectly
 held by the Vasileios Konstantakopoulos Family and post listing at New York
 Stock Exchange or NASDAQ at least 40% of the Corporate Guarantor’s total
 issued share capital shall be directly or indirectly held by the Vasileios
 Konstantakopoulos Family;”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (x)

 	
 Sub-clause (b) to clause 7.2 of the Principal Agreement shall be
 amended to read as follows;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

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

 

11

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xi)

 	
 the introductory paragraph of clause 8 of the Principal Agreement
 shall be amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “It is
 hereby undertaken by the Borrowers that, from the date of this Agreement and
 as long as any moneys are due and/or owing and/or outstanding under this
 Agreement, the Master Agreement and/or any of the other Security Documents,
 the Borrowers will:”

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xii)

 	
 Sub-clause (a) to clause 8.1 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(a)

 	
 Annual financial
 Statements

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 furnish the Bank
 within one hundred and eighty (180) days of the end of each financial year
 with copies of the audited consolidated annual financial statements of the Corporate
 Guarantor (including the Borrowers), prepared in accordance with US-GAAP,
 audited by Ernst & Young or other auditors approved by the Bank, together
 with profit and loss accounts, the first of such statements to be for the
 financial year ending 31st
 December, 2008;”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xiii)

 	
 Sub-clause (b) to clause 8.1 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

 	
 Financial
 Information

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 ensure and procure that the Bank be furnished with all accounts and
 financial information concerning the Vessel, the Borrowers and the Corporate
 Guarantor, including, but not limited to, financial standing commitments and
 operations of the Borrowers as the Bank may from time to time reasonably
 require including (without limiting the generality of the foregoing) cash
 flow analyses and details of the operating costs of the Vessels but excluding
 any information containing confidential pricing information or information
 publicly filed pursuant to regulatory requirements;”;

 

12

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xiv)

 	
 At the beginning of sub-clause (e) to clause 8.1 shall be added: “to the extent
 available to the Borrower,”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xv)

 	
 Clause 8.2 of the Principal Agreement shall be deleted;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xvi)

 	
 Sub-clauses (b), (c) and (d) to Clause 8.3 of the Principal Agreement
 shall be amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

 	
 No Loans

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (c)

 	
 No Dividends

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 not declare or pay
 any dividends or other distribution upon any of the issued shares or
 otherwise dispose of any assets to any of the shareholders of the Borrowers,
 without the prior written consent of the Bank provided however that
 the Borrowers shall be entitled to declare and pay dividends or other
 distributions upon any of the issued shares without the prior written consent
 of the Bank, subject to no Event of Default having occurred and being
 continuing; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (d)

 	
 No Payments

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (other than
 intra-group cashflows or normal trade credit in the ordinary course of
 business) and except pursuant to this Agreement and the Security Documents
 (or as expressly permitted by the same) not pay out any funds to any company
 or person except in connection with the administration of the Borrowers the
 operation and/or repair of the Vessels or the servicing of the Loan;”;

 

13

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xvii)

 	
 a new sub-clause (e) to 8.3 shall be added in the Principal Agreement
 reading as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(e)

 	
 Derivatives

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 not enter into any
 transaction in a derivative other than under the Master Agreement;”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xviii)

 	
 Sub-clauses (a), (b), (c), (d) and (e) to Clause 8.4 of the Principal
 Agreement shall be amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(a)

 	
 Maintenance of
 Business Structure

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (b)

 	
 Maintenance of Legal Structure

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 procure that none
 of the documents defining the constitution of any of the Borrowers shall be
 altered in any manner whatsoever without the prior written consent of the
 Bank, such consent not to be unreasonably withheld;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (c)

 	
 Control

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 ensure that, without
 the prior written consent of the Bank, (i) neither Borrower ceases to be a
 direct fully (100%) owned Subsidiary of the Corporate Guarantor and (ii) the
 Vasileios Konstantakopoulos Family’s direct or indirect holding in the
 Corporate Guarantor falls to less than 100% of the total issued share capital
 of the Corporate Guarantor and after the listing of the Corporate Guarantor
 in the New York Stock Exchange or NASDAQ no change shall be made which may
 result to the Vasileios Konstantakopoulos Family’s direct or indirect holding
 in the Corporate Guarantor falling to less than 40% of the total issued share
 capital of the Corporate Guarantor;”;

 

14

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xix)

 	
 sub-clause (f) to clause 8.4 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(f)

 	
 Share capital

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 not purchase or
 otherwise acquire for value any shares of its capital;”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xx)

 	
 Sub-clause (a) to Clause 8.7 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(a)

 	
 Ownership/Management/Control

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxi)

 	
 Sub-clause (b) to Clause 8.9 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

 	
 Earnings

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxii)

 	
 clause 8.10 of the Principal Agreement shall be deleted without
 change to the numbering of the rest of sub-clause to Clause 8 of the
 Principal Agreement;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxiii)

 	
 clause 8.12 of the Principal Agreement shall be deleted;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxiv)

 	
 sub-clause (i) to Clause 9.2 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(i)

 	
 there is any
 change in the legal and/or ultimate beneficial ownership of any of the shares
 of either Borrower or the Corporate Guarantor from that existing on the date
 of this Agreement as set out in clause 6.1(m) save for the necessary 

 

15

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 changes resulting
 from (a) the creation of the new corporate structure of the Group (provided
 that the Vasileios Konstantakopoulos family’s holding (directly or
 indirectly) in the Corporate Guarantor remains to 100% of the total issued
 share capital of the Corporate Guarantor) and (b) the listing of the
 Corporate Guarantor on the New York Stock Exchange or NASDAQ and which
 change, after the listing of the Corporate Guarantor in the New York Stock
 Exchange or NASDAQ may result to the Vasileios Konstantakopoulos family’s
 (direct or indirect) holding in the Corporate Guarantor falling to less than
 40% of the total issued share capital of the Corporate Guarantor; or”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxv)

 	
 clause 9.4 of the Principal Agreement shall be amended to read as
 follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “9.4

 	
 Cross-default

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 any Indebtedness
 of any Security Party relating to an aggregate amount over $3,000,000 is not
 paid on its due date or within any period of grace specified in the contract
 evidencing the original terms of such Indebtedness or, if repayable on
 demand, shall not be repaid on demand or, being a guarantee, is not honoured
 when first demanded or becomes due or capable of being declared due prior to
 its stated date of payment unless the same is being contested in good faith
 and the Bank is satisfied that the same does not and will not affect the
 performance by the Borrowers (or either of them) of their/its obligations
 under this Agreement and the Security Documents; or”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxvi)

 	
 sub-clause (b) to clause 9.9 of the Principal Agreement shall be
 amended to read as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

 	
 by notice to the
 Borrowers declare that the Loan and all interest and commitment commission
 accrued and all other sums payable under this Agreement and the other
 Security Documents, including, but without limitation, all amounts accrued or
 owing 

 

16

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 from the Borrowers
 to the Bank as a result of termination of any existing Transactions under the
 Master Agreement, have become due and payable, whereupon the same shall,
 immediately or in accordance with the terms of such notice, become due and
 payable without any further diligence, presentment, demand of payment,
 protest or notice or any other procedure from the Bank which are expressly
 waived by the Borrowers; and/or

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxvii)

 	
 Paragraph “Fifthly” to Clause 11.3 of the Principal
 Agreement is re-numbered to “Sixthly” and a new paragraph “Fifthly”
 shall be added in the Principal Agreement reading as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “Fifthly: in or
 towards payment to the Bank of any sum owing under the Master Agreement;”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxviii)

 	
 the first paragraph of clause 11.4 of the Principal Agreement is
 numbered to 11.4(a) (the sub-paragraphs (a), (b) and (c) shall be re-numbered
 as (i), (ii), (iii) respectively, and a new sub-clause (b) to clause 11.4
 shall be added in the Principal Agreement reading as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “(b)

 	
 Without prejudice
 to its rights hereunder and/or under the Master Agreement, the Bank may at
 the same time as, or at any time after, any Event of Default under this Agreement
 which is continuing or the Borrowers’ default under the Master Agreement, set
 off any amount due now or in the future from the Borrowers to the Bank under
 this Agreement against any amount due from the Bank to the Borrowers under
 the Master Agreement and apply the first amount in discharging the second
 amount. The effect of any set off under this clause 14.1(b)) shall be
 effective to extinguish or, as the case may require, reduce the liabilities
 of the Bank under the Master Agreement.”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxix)

 	
 clause 11.5 of the Principal Agreement shall be amended to read as
 follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “11.5

 	
 Earnings Account

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (a)

 	
 The Borrowers and
 the Corporate Guarantor shall procure that throughout the Security Period all
 the Earnings of each of the 

 

17

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Vessels shall be
 paid to the respective Earnings Account. No sums shall be withdrawn from the
 Earnings Accounts except as hereinafter provided.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  (b)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (i)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (ii)

 	
 any credit balance
 shall be available to the Borrowers; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 provided, however,
 that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  (aa)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  (bb)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (c)

 	
 Each of the
 Borrowers hereby irrevocably and unconditionally authorises the Bank to make
 from its Earnings Account any and all above payments and repayments as and
 when the same fall due or at any time thereafter.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (d)

 	
 Each of the
 Borrowers, at their own cost and expense, undertake with the Bank to comply
 with or cause to be 

 

18

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 complied with any
 written requirement of the Bank from time to time as to the location or relocation
 of its Earnings Account and will from time to time enter into such
 documentation as the Bank may require in order to create or maintain a security
 interest in such Earnings Account.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (e)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (f)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (g)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  (h)

 	
 Upon payment in
 full of all principal, interest and all other amounts due to the Bank under
 the terms of this Agreement and the other Security Documents any 

 

19

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 balance then
 standing to the credit of the Earnings Accounts (or either of them) shall be
 released to the Borrowers or whomsoever else may be entitled to receive such
 balance.”;

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (xxx)

 	
 Clause 13 of the Principal Agreement is deleted without affecting the
 numbering of the clauses following such clause 13, which remains unchanged.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 b.

 	
 With effect as from the Effective Date all references to “Corporate Guarantor” shall be construed as references to the New
 Corporate Guarantor and all references in the Principal Agreement to “this Agreement”, “hereunder” and the like and in the Security Documents
 to the “Agreement” shall be construed as references to the Principal Agreement as
 amended and/or supplemented by this Agreement.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 c.

 	
 the definition “Security
 Documents” with effect as from the date hereof shall be deemed to include the Security Documents as
 amended and/or supplemented in pursuance to the terms hereof as well as the
 New Security Documents and any document or documents (including if the
 context requires the Loan Agreement) that may now or hereafter be executed as
 security for the repayment of the Loan, interest thereon and any other moneys
 payable by the Borrowers under the Principal Agreement and the Security
 Documents (as herein defined) as well as for the performance by the Borrowers
 and the other Security Parties (as defined in the Loan Agreement) of all
 obligations, covenants and agreements pursuant to the Principal Agreement
 this Agreement and/or the Security Documents.

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 Continuance of Principal Agreement and the
 Security Documents

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Save for the alterations to the Principal Agreement made or deemed to
 be made pursuant to this Agreement and such further modifications (if any)
 thereto as may be necessary to make the same consistent with the terms of
 this Agreement the Principal Agreement shall remain in full force and effect
 and the security constituted by the Security Documents executed by the
 Borrowers and the other Security Parties shall continue and remain valid and
 enforceable.

 

20

	
  

 	
  

 
	
 7.

 	
 Release of Manager under the Manager’s
 Guarantee

 
	
  

 	
  

 
	
  

 	
 COSTAMARE
 SHIPPING COMPANY S.A., of
 Panama, in its capacity as Corporate Guarantor and Security Party under the
 Principal Agreement, is hereby fully discharged and released of any and all
 its obligations towards the Bank as Corporate Guarantor of the obligations of
 the Borrowers under the Principal Agreement and it shall no longer be a
 Security Party under the Loan Agreement.

 
	
  

 	
  

 
	
 8.

 	
 Fees and expenses

 
	
  

 	
  

 
	
 8.1

 	
 The Borrowers, jointly and severally, agree to pay to the Bank upon
 demand and from time to time all reasonable and documented costs, charges,
 registration and recording fees, duties and expenses (including legal fees)
 incurred by the Bank in connection with the negotiation, preparation,
 execution and enforcement or attempted enforcement of this Agreement and any
 document executed pursuant thereto and/or in preserving or protecting or
 attempting to preserve or protect the security created hereunder and/or under
 the Security Documents.

 
	
  

 	
  

 
	
 9.

 	
 Miscellaneous

 
	
  

 	
  

 
	
 9.1

 	
 The provisions of Clause 14 (Assignment, Participation, Lending
 Office) and 16.1 (Notices) of the Principal Agreement shall extend
 and apply to this Agreement as if the same were (mutatis mutandis) herein
 expressly set forth.

 
	
  

 	
  

 
	
 9.2

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

 
	
  

 	
  

 
	
 10.

 	
 Entire agreement and amendment; Effect on
 Principal Agreement

 
	
  

 	
  

 
	
 10.1

 	
 The Principal Agreement, the Security Documents and this Agreement
 represent the entire agreement among the parties hereto with respect to the
 subject matter hereof and supersede any prior expressions of intent or
 understanding with respect to this transaction and may be amended only by an
 instrument in writing executed by the party or parties to be bound or
 burdened thereby.

 
	
  

 	
  

 
	
 10.2

 	
 Except to the extent that the Principal Agreement is expressly
 amended or supplemented by this Agreement, all terms and conditions of the
 Principal Agreement remain in full force and effect. This Agreement is
 supplementary to and incorporated in the Principal Agreement, all terms and
 conditions whereof, including, but not limited to, provisions on 

 

21

	
  

 	
  

 
	
  

 	
 payments, calculation of interest and Events of Default, shall apply
 to the performance and interpretation of this Agreement.

 
	
  

 	
  

 
	
 11.

 	
 Applicable law and jurisdiction

 
	
  

 	
  

 
	
 This Agreement shall be governed by and construed in accordance with
 English law. The provisions of Clause 17 of the Principal Agreement shall
 extend and apply to this Agreement as if the same were (mutatis mutandis)
 herein expressly set forth.

 

22

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

THE BORROWERS

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 KELSEN SHIPPING CO.

 	
 )

 	
 /s/ Konstantinos Zacharatos

 
	
 of Liberia,
 in the presence of:

 	
 )

 	
 Attorney-in-fact

 

	
  

 	
  

 	
  

 
	
 Witness

 	
 /s/
 Efstratios Kalantzis

 	
  

 
	
 Name:

 	
 Efstratios
 Kalantzis

 	
  

 
	
 Address:

 	
 13 Defteras
 Merarchias Street, Piraeus, Greece

 
	
 Occupation:

 	
 Attorney-at-Law

 	
  

 

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 MONTES SHIPPING CO.

 	
 )

 	
 /s/ Konstantinos Zacharatos

 
	
 of Liberia,
 in the presence of:

 	
 )

 	
 Attorney-in-fact

 

	
  

 	
  

 	
  

 
	
 Witness

 	
 /s/
 Efstratios Kalantzis

 	
  

 
	
 Name:

 	
 Efstratios
 Kalantzis

 	
  

 
	
 Address:

 	
 13 Defteras
 Merarchias Street, Piraeus, Greece

 
	
 Occupation:

 	
 Attorney-at-Law

 	
  

 

THE NEW CORPORATE GUARANTOR

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 COSTAMARE INC.,

 	
 )

 	
 /s/ Konstantinos Zacharatos

 
	
 of the
 Marshall Islands, in the presence of:

 	
 )

 	
 Attorney-in-fact

 

	
  

 	
  

 	
  

 
	
 Witness

 	
 /s/
 Efstratios Kalantzis

 	
  

 
	
 Name:

 	
 Efstratios
 Kalantzis

 	
  

 
	
 Address:

 	
 13 Defteras
 Merarchias Street, Piraeus, Greece

 
	
 Occupation:

 	
 Attorney-at-Law

 	
  

 

23

THE MANAGER

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 
	
 Mr.
 Konstantinos Zacharatos

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 COSTAMARE SHIPPING COMPANY S.A.,

 	
 )

 	
 /s/ Konstantinos Zacharatos

 
	
 of Panama,
 in the presence of:

 	
 )

 	
 Attorney-in-fact

 

	
  

 	
  

 	
  

 
	
 Witness

 	
 /s/
 Efstratios Kalantzis

 	
  

 
	
 Name:

 	
 Efstratios
 Kalantzis

 	
  

 
	
 Address:

 	
 13 Defteras
 Merarchias Street

 	
  

 
	
  

 	
 185 35
 Piraeus, Greece

 	
  

 
	
 Occupation:

 	
 Attorney-at-Law

 	
  

 

THE BANK

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 
	
 Mr.
 Gregorios Kondylis and

 	
 )

 	
 /s/ Gregorios Kondylis

 
	
 Mr.
 Constantinos Flokos

 	
 )

 	
 Attorney-in-fact

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 ALPHA BANK A.E.

 	
 )

 	
 /s/ Constantinos Flokos

 
	
 in the
 presence of:

 	
  

 	
 Attorney-in-fact

 

	
  

 	
  

 	
  

 
	
 Witness

 	
 /s/
 Efstratios Kalantzis

 	
  

 
	
 Name:

 	
 Efstratios
 Kalantzis

 	
  

 
	
 Address:

 	
 13 Defteras
 Merarchias Street

 
	
  

 	
 185 35
 Piraeus, Greece

 	
  

 
	
 Occupation:

 	
 Attorney-at-Law

 	
  

 

24Exhibit 10.12

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Dated: 12th May, 2008

	
 

	
 

	
 

	
 

	
 

	
EMPORIKI BANK OF GREECE S.A.

	
 

	
 

	
(as Bank)

	
 

	
 

	
 

	
 

	
 

	
- and -

	
 

	
 

	
 

	
 

	
 

	
CHRISTOS MARITIME CORPORATION and

	
 

	
 

	
COSTIS MARITIME CORPORATION

	
 

	
 

	
(as joint and several Borrowers)

	
 

LOAN AGREEMENT NO. 190/2008
for a secured floating interest rate

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

	
 

	
 

	
 

	
 

	
THEO V. SIOUFAS & CO.

	
 

	
 

	
LAW OFFICES

	
 

	
 

	
13, Defteras Merarchias Street

	
 

	
 

	
185 35 Piraeus

	
 

	
 

	
Greece

	
 

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
CLAUSE

	
 

	
HEADINGS

	
 

	
PAGE

	

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
1.

	
 

	
AMOUNT,
PURPOSE, DEFINITIONS AND INTERPRETATION

	
 

	
2

	
2.

	
 

	
THE LOAN

	
 

	
13

	
3.

	
 

	
INTEREST

	
 

	
15

	
4.

	
 

	
REPAYMENT -
PREPAYMENT

	
 

	
18

	
5.

	
 

	
PAYMENTS,
TAXES AND COMPUTATION

	
 

	
23

	
6.

	
 

	
REPRESENTATIONS
AND WARRANTIES

	
 

	
25

	
7.

	
 

	
CONDITIONS
PRECEDENT

	
 

	
31

	
8.

	
 

	
COVENANTS

	
 

	
35

	
9.

	
 

	
EVENTS OF
DEFAULT

	
 

	
44

	
10.

	
 

	
INDEMNITIES
- EXPENSES - FEES

	
 

	
50

	
11.

	
 

	
SECURITY,
APPLICATION AND SET-OFF

	
 

	
55

	
12.

	
 

	
UNLAWFULNESS,
INCREASED COSTS

	
 

	
58

	
13.

	
 

	
ASSIGNMENT,
PARTICIPATION, LENDING OFFICE

	
 

	
60

	
14.

	
 

	
MISCELLANEOUS

	
 

	
61

	
15.

	
 

	
NOTICES AND
OTHER MATTERS

	
 

	
64

	
16.

	
 

	
APPLICABLE
LAW AND JURISDICTION

	
 

	
65

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SCHEDULE

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1.

	
FORM OF
DRAWDOWN NOTICE

	
 

	
 

THIS AGREEMENT No. 190 is dated 12th May, 2008 and made
BETWEEN: 

	
 

	
 

	
 

	
(1)

	
EMPORIKI BANK OF GREECE S.A.,
a banking company duly incorporated under the laws of Greece, having its
registered office at 11, Sofokleous Street, Athens, Greece, acting for the
purposes of this Agreement through its office at 114 Kolokotroni Street,
Piraeus, Greece (the “Bank”);
and

	
 

	
 

	
 

	
(2)

	
(a)

	
CHRISTOS MARITIME CORPORATION,
a company duly incorporated in the Republic of Liberia and having its
registered office at 80 Broad Street, Monrovia, Liberia (the “Christos Borrower”); and

	
 

	
 

	
 

	
 

	
(b)

	
COSTIS MARITIME CORPORATION,
a company duly incorporated in the Republic of Liberia and having its
registered office at 80 Broad Street, Monrovia, Liberia (the “Costis Borrower”),

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
AND IT IS HEREBY AGREED as
follows:

	
 

	
 

	
 

	
1. 

	
AMOUNT, PURPOSE, DEFINITIONS AND
INTERPRETATION

	
 

	
 

	
 

	
1.1 

	
Amount and Purpose

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
(a)

	
Tranche A in an amount up to the lesser of (i) 80% of the
charter-free Market Value of the SEALAND WASHINGTON based on a valuation obtained
in accordance with Clause 8.10(c) prior to the Drawdown Date to which such
Tranche relates and (ii) Seventy five million Dollars ($75,000,000) and shall
be used for the purpose of financing part of the Market Value of such Vessel
(the “Tranche A”); and 

	
 

	
 

	
 

	
 

	
(b)

	
Tranche B in an amount up to the lesser of (i) 80% of the
charter-free Market Value of the SEALAND NEW YORK based on a valuation
obtained in accordance with Clause 8.10(c) prior to the Drawdown Date to
which such Tranche relates and (ii) Seventy five million Dollars
($75,000,000) and shall be used for the purpose of financing part of the
Market Value of such Vessel (the “Tranche B”).

	
 

	
 

	
 

	
1.2

	
Definitions

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 “Account Pledge Agreement”
means an agreement to be entered into between the Borrowers and the Bank for the
creation of a pledge over the Earnings Accounts in favour of the Bank, in
form and substance satisfactory to the Bank; 

	
 

	
 

	
 

	
 

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

2

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “A.P. Møller-Maersk Charterparty”
in relation to a Vessel means the time charter entered in connection with
such Vessel between the Owner thereof and A.P. Møller-Maersk A/S, of Denmark,
as charterer, expiring in the case of SEALAND WASHINGTON on 24th
July, 2014 and in the case of SEALAND NEW YORK on 8th April, 2014,
at a hire of $30,000 (minus 0.75% commission) per day (together the “A.P. Møller-Maersk Charterparties”); 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Availability Period”
means the period starting on the date hereof and ending on 31st May, 2008 or,
until such later date as the Bank may agree in writing or on such earlier
date (if any), (i) on which the whole Commitment has (or - in case that the
Commitment has been agreed in Clause 2.3 to be advanced in more than one
Advance - all Advances have) been advanced by the Bank to the Borrowers, or
(ii) on which the Borrowers cancel the whole of the undrawn Commitment under
Clause 2.7 or (iii) on which the Commitment is reduced to zero pursuant to
Clauses 9.10 or 12.1, 12.2 or any other clause of this Agreement; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Borrowers” means
the Christos Borrower and the Costis Borrower as specified at the beginning
of this Agreement; 

	
 

	
 

	
 

	
 “Charterparty Assignment”
means the assignment of each of the A.P. Møller-Maersk Charterparties and any
other Approved Charterparty, executed or (as the context may require) to be
executed by a Borrower in favour of the Bank, in form satisfactory to the
Bank as the same may from time to time be amended and/or supplemented and
respective notices of any such assignment addressed to the relevant charterer
(to be served upon the occurrence of an Event of Default) and, in such case,
endorsed with an acknowledgement of receipt by the relevant charterer and/or,
at the discretion of the Bank, copy of irrevocable instructions of the
relevant Owner to the charterer (to be served upon the occurrence of an Event
of Default) for 

3

	
 

	
 

	
 

	
the payment of the hire to the Bank and/or a copy of the charter with
appropriate irrevocable notation; 

	
 

	
 

	
 

	
 “Commitment” means
the amount which the Bank agreed to lend to the Borrowers under Clause 2.1 as
reduced by any relevant term of this Agreement; 

	
 

	
 

	
 

	
“Commitment Letter”
means the Commitment Letter dated 6th May, 2008 addressed by the
Bank to the Christos Borrower and the Costis Borrower; 

	
 

	
 

	
 

	
“Confirmation” means a
Confirmation exchanged, or deemed exchanged, between the Bank and the
Borrowers as contemplated by the Master Agreement; 

	
 

	
 

	
 

	
“Corporate Guarantee”
means a guarantee given or, as the context may require, to be given by the
Corporate Guarantor in form and substance satisfactory to the Bank as
security for the Outstanding Indebtedness and any and all other obligations
of the Borrowers under this Agreement and the Master Agreement; 

	
 

	
 

	
 

	
“Corporate Guarantor”
means COSTAMARE INC., a company incorporated in and existing under the laws
of the Republic of Marshall Islands; 

	
 

	
 

	
 

	
 “Credit Support Document”
means any document described as such in the Master Agreement and, where the
context permits, any other document referred to in any Credit Support
Document which has the effect of creating an Encumbrance in favour of the
Bank; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Earnings” in
relation to a Vessel, means all earnings of such Vessel, both present or
future, including all freight, hire and passage moneys, compensation payable
to its Owner in the event of requisition of such Vessel for hire,
remuneration for salvage and towage services, demurrage and detention moneys,
contributions of any nature whatsoever in respect of general average, damages
for breach (or payments for variation or termination) of any charterparty or
other contract for employment of such Vessel and any other earnings 

4

	
 

	
 

	
 

	
whatsoever due or to become due to its Owner in respect of such
Vessel and all sums recoverable under the Insurances in respect of loss of
Earnings and includes, if and whenever such Vessel is employed on terms
whereby any and all such moneys as aforesaid are pooled or shared with any
other person, that proportion of the net receipts of the relevant pooling or
sharing agreement which is attributable to such Vessel; 

	
 

	
 

	
 

	
 “Early Termination Date” has
the meaning given to that expression in section 14 of the Master Agreement; 

	
 

	
 

	
 

	
 “Earnings Account”
means an account opened or to be opened and maintained in the name of each
Borrower with the Bank pursuant to Clause 11.5 and shall include any
sub-accounts or call accounts (whether in Dollars or any other currency)
opened under the same designation or any revised designation or number from
time to time notified by the Bank to the Borrowers and to which (inter alia)
all Earnings of the Vessel owned by such Borrower are to be paid in
accordance with Clauses 11.5 and 8.9(b) (together, the “Earnings Accounts”); 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

5

	
 

	
 

	
 

	
 

	
Materials of Environmental Concern and actual or threatened
emissions, spills, releases or discharges of Materials of Environmental
Concern and actual or threatened emissions, spills, releases or discharges of
Materials of Environmental Concern from any Relevant Ship;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
(b)

	
the expenses referred to in Clause 10.2; and 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
 “Final Maturity Date”
in relation to each Tranche means the date falling on the tenth (10th)
anniversary of the Drawdown Date of such Tranche;

	
 

	
 

	
 

	
 

	
 “Flag State” means
the Republic of Greece or such other state or territory proposed in writing
by the Borrowers to the Bank and approved (such approval not to be
unreasonably withheld) by the Bank, as being the “Flag State” of a Vessel for
the purposes of the Security Documents;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 “Group” means the
Corporate Guarantor and its Subsidiaries and “Group Member” means any member of the Group;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

6

	
 

	
 

	
 

	
 

	
(6) months intervals during such longer Interest Period and the last
day of such longer Interest Period; 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 “ISM Code Documentation”
includes: 

	
 

	
 

	
 

	
 

	
(a)

	
the DOC and SMC issued by an IACS classification society pursuant to
the ISM Code in relation to the Vessels within the period specified by the
ISM Code; 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

7

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 “Major Casualty Amount”
means in relation to a Vessel, any casualty to such Vessel in respect whereof
the claim or the aggregate of the claims against all insurers, before
adjustment for any relevant franchise or deductible, exceeds One million
Dollars ($1,000,000) or the equivalent in any other currency; 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 “Manager” means COSTAMARE SHIPPING COMPANY S.A., a company incorporated in and
existing under the laws of the Republic of Panama having its registered
office at Panama City, Republic of Panama and having an office established at
60 Zephyrou Street, Athens, Greece under the Greek laws 89/67, 378/68, 27/75
and 814/78 (as amended) or such other person as may from time to time be
approved by the Bank (such approval not to be unreasonably withheld) for the
purpose of managing the Vessels; 

	
 

	
 

	
 

	
 

	
 “Manager’s Undertaking”
in relation to a Vessel means an undertaking executed or (as the context may
require) to be executed by the Manager in favour of the Bank, such
undertaking to be in form and substance satisfactory to the Bank, as the same
may from time to time be amended and/or supplemented; 

	
 

	
 

	
 

	
 

	
 “Market Value”
means the market value of a Mortgaged Vessel as determined in accordance with
Clause 8.10(b) or, as the case may be 8.10(c); 

	
 

	
 

	
 

	
 

	
 “Margin” means
zero point seven zero per centum (0.70%) per annum; 

8

	
 

	
 

	
 

	
 “Master Agreement” means
the Master Agreement (on the 1992 ISDA (Multicurrency - Crossborder) form as
modified (or any other form of master agreement relating to interest or
currency exchange transactions)) made or to be made between the Bank and the
Borrowers, and includes the Schedule thereto and all transactions from time
to time entered into and Confirmations from time to time exchanged under the
Master Agreement and any amending, supplementing or replacement agreements
made from time to time; 

	
 

	
 

	
 

	
 “Master Agreement Liabilities”
means, at any relevant time, all liabilities actual or contingent, present or
future, of the Borrowers to the Bank under the Master Agreement; 

	
 

	
 

	
 

	
 “Master Agreement Security Deed” means,
in relation to the Master Agreement, the security deed executed or (as the
context may require) to be executed by the Borrowers in favour of the Bank in
relation to certain of the rights of the Borrowers under the Master Agreement
in form and substance satisfactory to the Bank; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Outstanding Indebtedness”
means the aggregate of the Loan and interest accrued and accruing thereon,
the Expenses, the Master Agreement Liabilities and all other sums of money
from time to time owing by the Borrowers to the Bank, whether actually or
contingently under this Agreement, the Master Agreement and the other
Security Documents; 

	
 

	
 

	
 

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

9

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Personal Guarantee”
means the guarantees given or, as the context may require, to be given by the
Personal Guarantor in form and substance satisfactory to the Bank as security
for the Outstanding Indebtedness and any and all other obligations of the
Borrowers under this Agreement and the Master Agreement; 

	
 

	
 

	
 

	
 “Personal Guarantors” means
the person nominated by the Borrowers and acceptable to the Bank which gave
or, as the context may require, shall or may give a Personal Guarantee; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Relevant Party”
means the Borrowers and any other Security Party; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

10

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Security Requirement” means
the amount in Dollars (as certified by the Bank, whose certificate shall, in
the absence of manifest error, be conclusive and binding on the Borrowers)
which is (a) at any relevant time at which both the Vessels are chartered
under the respective A.P. Møller-Maersk Charterparties or Approved
Charterparties and which remain in full force and in effect, one hundred and
ten per cent (110%) of the Loan plus or, as the case may be, minus the Swap
Exposure and (b) at any other relevant time one hundred and twenty per cent
(120%) of the Loan plus or, as the case may be, minus the Swap Exposure; 

	
 

	
 

	
 

	
 “Security Value”
means the amount in Dollars (as certified by the Bank whose certificate
shall, in the absence of manifest error, be conclusive and binding on the
Borrowers) which, at any relevant time is the aggregate of (a) the Market
Value of the Mortgaged Vessel(s) as most recently determined in accordance
with Clause 8.10 and (b) the market value of any additional security provided
under Clause 8.10(a) (if any); 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Swap Exposure”
means, as at any relevant date, the amount certified by the Bank to the
Borrowers to be the market-to-market gain or loss under the Master Agreement
on the relevant date in relation to all continuing Transactions entered into
between the Borrowers and the Bank; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 “Transaction”
means a transaction entered into between the Bank and the Borrowers governed
by the Master Agreement; 

11

	
 

	
 

	
 

	
 

	
 “Vessels” means:

	
 

	
 

	
 

	
 

	
(a)

	
the cargo container motor vessel “SEALAND
WASHINGTON” of approximately 74,586 gt and 41,490 nt, registered
in the ownership of the First Borrower at the Registry under the laws and
flag of the Flag State under Registration Number 10782; and 

	
 

	
 

	
 

	
 

	
(b)

	
the cargo container motor vessel “SEALAND
NEW YORK” of approximately 74,661 gt and 41,490 nt, registered in
the ownership of the Second Borrower at the Registry under the laws and flag
of the Flag State under Registration Number 10726, 

	
 

	
 

	
 

	
 

	
and “Vessel” means either
of them as the context may require.

	
 

	
 

	
 

	
1.3

	
Interpretation 

	
 

	
 

	
 

	
 

	
In this Agreement:

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
(c)

	
subject to any specific provision of this Agreement or of any
assignment and/or participation or syndication agreement of any nature
whatsoever, reference to each of the parties hereto and to the other Security
Documents shall be deemed to be reference to and/or to include, as
appropriate, their respective successors and permitted assigns; 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
(e)

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

	
 

	
 

	
 

	
 

	
(f)

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

	
 

	
 

	
 

	
 

	
(g)

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

	
 

	
 

	
 

	
 

	
(h)

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

	
 

	
 

	
 

	
 

	
(i)

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

	
 

	
 

	
 

	
 

	
(j)

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

12

	
 

	
 

	
 

	
 

	
(k)

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

	
 

	
 

	
 

	
 

	
(l)

	
reference to the opinion of the Bank or a determination or acceptance
by the Bank or to documents, acts, or persons acceptable or satisfactory to
the Bank or the like shall be construed as reference to opinion,
determination, acceptance or satisfaction of the Bank at the reasonable
discretion of the Bank and such opinion, determination, acceptance or
satisfaction of the Bank shall be conclusive and binding on the Borrowers
(save as herein provided); and 

	
 

	
 

	
 

	
 

	
(m)

	
words and expressions defined in the Master Agreement, unless the
context otherwise requires, when used herein, have the same meaning.

	
 

	
 

	
 

	
2.

	
THE LOAN

	
 

	
 

	
 

	
2.1

	
Commitment to Lend 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
2.2

	
Drawdown Notice and Commitment to Borrow 

	
 

	
 

	
 

	
 

	
Subject to the terms and conditions of this Agreement, the Commitment
(or - in case that the Commitment has been agreed in Clause 2.3 to be
advanced in more than one Advance - each Advance) shall be advanced to the
Borrowers following receipt by the Bank from the Borrowers of a Drawdown
Notice not later than 10 a.m. (London time) on the second (2nd)
Banking Day before the date on which the drawdown is intended to be made. A
Drawdown Notice shall be effective on actual receipt by the Bank and, once
given, shall, subject as provided in Clause 3.6, be irrevocable.

	
 

	
 

	
 

	
2.3

	
Number and Purpose of Advances 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
2.4

	
Disbursement 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
2.5

	
Application of proceeds 

	
 

	
 

	
 

	
 

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

13

	
  

 	
  

 	
  

 
	
 2.6

 	
 Termination Date

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 2.7

 	
 Cancellation

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 2.8

 	
 No security or lien from other person

 
	
  

 	
  

 
	
  

 	
 None of the Borrowers has taken or received, and each of the
 Borrowers undertake that until all moneys, obligations and liabilities due,
 owing or incurred by the Borrowers under this Agreement and the Security
 Documents have been paid in full, will not take or receive, any security or
 lien from any other person liable or for any liability whatsoever, save in
 the ordinary course of business.

 
	
  

 	
  

 
	
 2.9

 	
 Joint and Several Liability of the
 Borrowers

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The obligations of each of the Borrowers hereunder shall not be
 affected by any legal limitation, disability, incapacity or other
 circumstances relating to any other Borrower or any other person, whether or
 not known to the Bank, by any invalidity in

 

14

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 or irregularity or unenforceability of the obligations of any other
 Borrower or any other person under this Agreement or any of the other
 Security Documents or otherwise or by any change in the constitution of, or
 any amalgamation or reconstruction of any other Borrower, the Bank or any
 other person.

 
	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
 2.10

 	
 Non competition of the Borrowers with the
 Bank

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Until all moneys, obligations and liabilities due, owing or incurred
 by the Borrowers to the Bank under this Agreement and the other Security
 Documents have been paid or discharged in full, each Borrower agrees not to
 exercise or enforce any rights of subrogation or indemnity or any other right
 which otherwise it has against any other Borrower and agrees not to claim any
 set-off or counterclaim against any other Borrower or to claim or prove in
 competition with the Bank in the event of bankruptcy, insolvency or
 liquidation of any other Borrower or have any benefit of or any share in any
 guarantee or security now or hereafter held by the Bank.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
 2.11

 	
 Interest to co-borrow

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 3.

 	
 INTEREST

 
	
  

 	
  

 
	
 3.1 

 	
 Normal Interest Rate 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 3.2

 	
 Interest Period

 
	
  

 	
  

 
	
  

 	
 The Borrowers may by notice received by the Bank not later than 10
 a.m. (London time) on the second Banking Day before the beginning of each
 Interest Period specify (subject to Clause 3.3 below) whether such
 Interest Period shall have a duration of three (3) or six (6) or

 

15

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 twelve (12) or such other period as may be requested by the Borrowers
 subject to Bank’s approval and market availability.

 
	
  

 	
  

 
	
 3.3

 	
 Duration of Interest Period

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the initial Interest Period in respect of the Loan (or - in case that
 the Commitment is agreed to be advanced in more than one Advance - of each
 Advance) will commence on the date on which the Commitment is advanced and
 each subsequent Interest Period will commence forthwith upon the expiry of
 the previous Interest Period;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 if the Borrowers fail to specify the duration of an Interest Period
 in accordance with the provisions of Clause 3.2 and this
 Clause 3.3, such Interest Period shall have a duration of three (3)
 months provided, always, that such period (whether of three (3) months
 or of different duration) shall comply with this Clause 3.3; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 if the Bank determines that the duration of an Interest Period
 specified by the Borrowers in accordance with Clause 3.2 is not readily
 available the Bank shall advise the Borrowers and the Borrowers shall select
 a readily available Interest Period;

 
	
  

 	
  

 	
  

 
	
  

 	
 provided, always that:

 
	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 
	
 3.4

 	
 Default Interest

 
	
  

 	
  

 
	
  

 	
 If the Borrowers fail to pay any sum (including, without limitation,
 any sum payable pursuant to this Clause 3.4) on its due date for payment
 under any of the Security Documents, the Borrowers shall pay interest on such
 sum from the due date up to the date of actual payment (as well after as
 before judgement) at the rate determined by the Bank pursuant to this
 Clause 3.4. The period beginning on such due date and ending on such
 date of payment shall 

 

16

	
  

 	
  

 	
  

 
	
  

 	
 be divided into successive periods of a duration to be selected by
the Bank each of which (other than the first, which shall commence on such
due date) shall commence on the last day of the preceding such period. The
rate of interest applicable to each such period shall be the aggregate (as
determined by the Bank) of (i) two and a half per cent (2.50%), per
annum, (ii) the Margin and (iii) LIBOR. Such interest shall be due
and payable on the last day of each such period as determined by the Bank and
each such day shall, for the purposes of this Agreement, be treated as an
Interest Payment Date, provided, that if such unpaid sum is of principal
which became due and payable by reason of a declaration by the Bank under
Clause 9.2 or a prepayment pursuant to Clauses 4.2, 4.3, 8.10(a) and
12.1 on a date other than an Interest Payment Date relating thereto, the
first such period selected by the Bank shall be of a duration equal to the
period between the due date of such principal sum and such Interest Payment
Date and interest shall be payable on such principal sum during such period
at a rate two and a half per cent (2.50%) above the rate applicable thereto
immediately before it fell due. If for the reasons specified in
Clause 3.6, the Bank is unable to determine a rate in accordance with
the foregoing provisions of this Clause 3.4, interest on any sum not
paid on its due date for payment shall be calculated at a rate determined by
the Bank to be two and a half per cent (2.50%) per annum above the aggregate
of the relevant Margin and costs of funds to the Bank as conclusively
determined by the Bank save for manifest error. Interest payable by the
Borrowers as aforesaid shall be compounded semi-annually and shall be payable
on demand. 

 
	
  

 	
  

 
	
 3.5

 	
 Notification of Interest

 
	
  

 	
  

 
	
  

 	
 The Bank shall notify the Borrowers promptly of the duration of each
 Interest Period and the applicable rate of interest in respect thereof under
 this Clause 3 without prejudice to the right of the Bank to make
 determinations at its sole discretion under Clause 3.6. In case that the
 Bank fails to notify the Borrowers as above, such failure will not affect the
 validity of the determination of the Interest Period and interest rate made
 pursuant to this Clause 3 and neither constitute nor will be interpreted
 as if to constitute a breach of obligation of the Bank except in case of
 wilful misconduct.

 
	
  

 	
  

 
	
 3.6

 	
 Market disruption- Non availability

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 (b) During the period of ten (10) days after any
 Determination Notice has been given by the Bank under Clause 3.6(a) the
 Bank and the Borrowers shall negotiate in good faith (but without incurring
 any legal obligations) with a view to arriving to an

 

17

	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
 3.7

 	
 Swap Transactions

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 If, at any time during the Security Period, the Borrowers wish to
 enter into swap Transactions so as to (inter alia) hedge all or any part of
 their exposure under this Agreement to interest rate fluctuations, it shall
 advise the Bank in writing.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Any such swap transaction shall be concluded with the Bank under the
 Master Agreement provided however that no such swap transaction shall be
 concluded unless the Bank first agrees to it in writing. If and when any such
 swap transaction has been concluded, it shall constitute a Transaction, and
 the Borrowers shall sign a Confirmation with the Bank.

 
	
  

 	
  

 
	
 4.

 	
 REPAYMENT - PREPAYMENT

 
	
  

 	
  

 
	
 4.1

 	
 Repayment

 
	
  

 	
  

 
	
  

 	
 The Borrowers shall and it is expressly undertaken by the Borrowers
 to repay the Loan jointly and severally as follows: each Tranche shall
 be repaid by (a) twenty (20) consecutive semi annual Repayment
 Instalments to be repaid on each of the Repayment Dates so that the first be
 repaid on the date falling six (6) months after the Drawdown Date relative
 to such Tranche and each of the subsequent ones consecutively falling
 due for payment on each of the dates falling six (6) months after the
 immediately preceding Repayment Date with the last (the 20 m) of such
 Repayment Instalments falling due for payment on the Final Maturity Date
 relative to such Tranche and (b) a final instalment (a “Balloon Instalment” and together the “Balloon Instalments”) in the amount of
 Thirty million Dollars ($30,000,000) payable together with the last (the
 20th) of such Repayment Instalments falling due for payment on the Final
 Maturity Date relative to such Tranche; subject to the provisions of this
 Agreement, the amount of each of the Repayment Instalments relative to each
 Tranche shall be Two million two hundred fifty thousand ($2,250,000);

 
	
  

 	
  

 	
  

 
	
  

 	
 Provided that (a) if either
 Tranche is not drawn down in full, the amount of each Repayment
 Instalment and the Balloon Instalment relative to such Tranche shall be
 reduced

 

18

	
  

 	
  

 	
  

 
	
  

 	
 proportionally (b) if the last Repayment Date relative to either
 Tranche would otherwise fall after the Final Maturity Date for such
 Tranche, such last Repayment Date shall be the Final Maturity Date for such
 Tranche, (c) there shall be no Repayment Dates for either
 Tranche after the Final Maturity Date for such Tranche, (d) on the
 Final Maturity Date for the Tranche last to be drawn down the Borrowers
 shall also pay to the Bank any and all other monies then payable under this
 Agreement and the other Security Documents, and (e) if any of the
 Repayment Instalments shall become due on a day which is not a Banking Day,
 the due date therefor shall be extended to the next succeeding Banking Day
 unless such Banking Day falls in the next calendar month, in which event such
 due date shall be the immediately preceding Banking Day.

 
	
  

 	
  

 
	
 4.2

 	
 Voluntary Prepayment

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 each such prepayment shall be equal to the amount of $2,000,000 or a
 whole multiple thereof or the balance of the Loan;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any prepayment of less than the whole of the Loan will be applied,
 towards satisfaction of the Repayment Instalments (including any Balloon
 Instalment referred to in clause 4.1) in order of maturity or in such
 other manner as the Borrowers may request;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 no amount prepaid may be re-borrowed; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 

19

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3

 	
 Compulsory Prepayment in case of Total Loss of a Vessel

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 For the
 purpose of this Agreement:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 aa)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 bb)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 cc)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 dd)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 ee)

 	
 hijacking,
 theft, condemnation, capture, seizure, detention, arrest, or confiscation of
 a Vessel by any government or by any person acting or purporting to act on
 behalf of any government, which deprives the relevant Owner of the use of its
 Vessel for more than sixty (60) days 

 

20

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 shall be
 deemed to occur upon the expiry of the period of sixty (60) days after the
 date upon which the relevant hijacking, theft, condemnation, capture,
 seizure, detention, arrest or confiscation occurred.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 and for the purpose of this Clause 4.3(i), “Required Amount”
means in relation to either Vessel an amount equal to 50% of the Loan
outstanding at the relevant time, provided, however, that if the relevant
Vessel so lost or sold is the last Mortgaged Vessel, then the full amount of
the insurance or, as the case may be, the sale proceeds shall apply against
full repayment of the Outstanding Indebtedness and additionally the Borrowers
shall pay to the Bank the balance (if any) of the Outstanding Indebtedness in
accordance with Clause 11.3. In addition the Borrowers shall be obliged
together with the Required Amount to pay to the Bank the amount of the
interest accrued on the Loan to the date of prepayment and all other sums
(other than the balance of principal of the Loan remaining outstanding after
such prepayment having been made) due and payable by the Borrowers to the
Bank pursuant to the Security Documents (or any of them) including without
limitation, any amounts payable under Clause 10 as the Bank in its
absolute discretion may determine;  

 
	
  

 	
  

 
	
  

 	
 provided, however, that if after the payment of the Required Amount
and any additional amounts payable to the Bank under this Clause 4.3 the
provisions of Clause 8.10(a) are not complied with, the Borrowers shall
additionally prepay to the Bank the amount of the shortfall or provide
additional security as provided in such Clause 8.10(a). 

 
	
  

 	
  

 
	
 4.4

 	
 Amounts payable on prepayment

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Any prepayment of all or part of the Loan under this Agreement shall
 be made together with (a) accrued interest on the amount to be prepaid
 to the date of such prepayment, (b) any additional amount payable under
 Clause 5.3 and (c) all other sums payable by the Borrowers to the
 Bank under this Agreement or any of the other Security Documents including,
 without limitation, any amounts payable under Clause 10.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 In case the Borrowers request the prepayment of the full amount of
 the Loan or a Tranche and at the relevant time there are any Transaction(s)
 in relation to the Loan or, as the case may be, such Tranche outstanding
 under the Master Agreement, the Borrowers shall pay in addition to the above
 any and all amounts then outstanding under the relevant Transactions.

 
	
  

 	
  

 	
  

 
	
 4.5

 	
 Master Agreement, Repayments and
 Prepayments

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Subject to the execution and delivery to the Bank of the Master
 Agreement, the Bank and the Borrowers may during the Security Period enter,
 into one or more Transactions pursuant to the Master Agreement, subject to
 the Bank’s approval, the

 

21

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 terms and conditions of each of which are or will be specified in a
 Confirmation sent by the Bank to the Borrowers.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Notwithstanding any provision of the Master Agreement to the
 contrary, in the case of a prepayment of all or part of the Loan (including,
 without limitation, upon a Total Loss or sale in accordance with
 clause 4.3 or under clause 8.5(c)), then subject to
 clause 4.5(b) the Bank shall be entitled but not obliged (and, where
 relevant, may do so without the consent of the Borrowers, where it would
 otherwise be required whether under the Master Agreement or otherwise) to
 amend, supplement, cancel, net out, terminate, liquidate, transfer or assign
 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 and with any person the Bank
 in its absolute discretion may determine and both the Bank’s and the
 Borrowers’ continuing obligations under any Transaction and/or the Master
 Agreement shall, unless agreed otherwise by the Bank, be calculated so far as
 the Bank considers it practicable by reference to the amended repayment
 schedule for the Loan taking into account the fact that less than the full
 amount of the Loan remains outstanding.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 If any amount of the Loan remains outstanding following a prepayment
 under this Agreement and the Bank in its absolute discretion agrees,
 following a written request of the Borrowers, that the Borrowers may be
 permitted to maintain all or part of a Transaction in an amount not wholly
 matched with or linked to all or part of the Loan, the Borrowers shall within
 ten (10) days of being notified by the Bank of such requirement, provide
 the Bank with, or procure the provision to the Bank of, such additional
 security as shall in the opinion of the Bank 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 Bank in its absolute discretion may approve or require, and
 each document comprising such additional security shall constitute a Credit
 Support Document.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The Borrowers shall on the first written demand of the Bank indemnify
 the Bank in respect of all losses, costs and expenses (including, but not
 limited to, legal costs and expenses) incurred or sustained by the Bank as a
 consequence of or in relation to the effecting of any matter or transactions
 referred to in this clause 4.5.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Notwithstanding any provision of the Master Agreement to the
 contrary, if for any reason, a Transaction has been entered into but no
 Advance is drawn down under this Agreement then, subject to
 clause 4.5(e) the Bank shall be entitled but not obliged (and, where
 relevant, may do so without the consent of the Borrowers where it would
 otherwise be required whether under the Master Agreement or otherwise) to
 amend, supplement, cancel, net out, terminate, liquidate, transfer or assign
 all or any part of the rights, benefits and obligations created by such
 Transaction and/or the Master Agreement and/or to obtain or re-establish any
 hedge or related trading position in any manner and with any person the Bank
 in its absolute discretion may determine.

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 If a Transaction has been entered into but no Advance is drawn down
 under this Agreement and the Bank in its absolute discretion agrees,
 following a written request of the Borrowers, that the Borrowers may be permitted
 to maintain all or part of a Transaction, the Borrowers shall within ten
 (10) days of being notified by the Bank of such requirement, provide the
 Bank with, or procure the provision to the Bank of,

 

22

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 such additional security as shall in the opinion of the Bank 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 Bank in its absolute discretion may
 approve or require, and each document comprising such additional security
 shall constitute a Credit Support Document for the purposes of the Master
 Agreement and/or otherwise.

 
	
  

 	
  

 
	
  

 	
 (g)

 	
 Without prejudice to or limitation of the obligations of the
 Borrowers under clause 4.5(c), in the event that the Bank exercises any
 of its rights under clauses 4.5 (a), 4.5(b), 4.5(d) or 4.5(e) and such
 exercise results in all or part of a Transaction being terminated such
 termination shall be treated under the Master Agreement in the same manner as
 if it were a Terminated Transaction (as defined in section 14 of the
 Master Agreement) effected by the Bank after an Event of Default (as so
 defined in that section 14) by the Borrowers and, accordingly, the Bank
 shall be permitted to recover from the Borrowers a payment for early
 termination calculated in accordance with the provisions of
 section 6(e)(i) of the Master Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 No Transaction or Confirmation will be entered into without the
 specific consent of the Bank.

 
	
  

 	
  

 
	
 5.

 	
 PAYMENTS, TAXES AND COMPUTATION 

 
	
  

 	
  

 	
  

 
	
 5.1

 	
 Payment - No set-off or Counterclaims

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers hereby jointly and severally acknowledge that in
performing their respective obligations under this Agreement, the Bank will
be incurring liabilities to third parties in relation to the funding of
amounts to the Borrowers, such liabilities matching the liabilities of the
Borrowers to the Bank and that it is reasonable for the Bank to be entitled
to receive payments from the Borrowers gross on the due date in order that
the Bank is put in a position to perform its matching obligations to the
relevant third parties. Accordingly, subject to paragraph (f) of Part 5
of the Schedule to the Master Agreement, all payments to be made by the
Borrowers under this Agreement and/or any of the other Security Documents
shall be made in full, without any set-off or counterclaim whatsoever and,
subject as provided in Clause 5.3, free and clear of any deductions or
withholdings or Governmental Withholdings whatsoever, in Dollars on the due
date to the account of the Bank at such bank and in such place as the Bank
may from time to time specify for that purpose, reference: “CHRISTOS
MARITIME CORPORATION/COSTIS MARITIME
CORPORATION-
Loan Agreement dated 12th May, 2008”, or to such other
account at such other bank in such place as the Bank may from time to time
specify for this purpose.  

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 

23

	
  

 	
  

 	
  

 
	
 5.2

 	
 Payments on Banking Days

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 5.3

 	
 Gross Up

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 For the avoidance of doubt, Clause 5.3(a) does not apply in
 respect of sums due from the Borrowers to the Bank under or in connection
 with the Master Agreement as to which sums the provisions of
 section 2(d) (Deduction or Withholding for Tax) of the Master Agreement
 shall apply.

 
	
  

 	
  

 
	
 5.4

 	
 Loan Account

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 5.5

 	
 Evidence - Certificates conclusive

 
	
  

 	
  

 	
  

 
	
  

 	
 The Borrowers hereby jointly and severally expressly agree and admit
 that abstracts or photocopies or other reproductions of the books of the Bank
 as well as statements of accounts or a certificate signed by an authorised
 officer of the Bank shall (save for manifest error) be

 

24

	
  

 	
  

 	
  

 
	
  

 	
 conclusive binding and full evidence on the Borrowers (and each of
 them) as to the existence and/or the amount of the at any time Outstanding
 Indebtedness, of any amount due under this Agreement and/or the Master
 Agreement, of the applicable interest rate or Default Rate or any other rate
 provided for or referred to in this Agreement, the Interest Period, the value
 of additional securities under Clause 8.10(a), the payment or non
 payment of any amount. Any certificate or determination of the Bank as to any
 rate of interest or any other amount pursuant to and for the purposes of any
 of the Security Documents shall, in the absence of manifest error, be
 conclusive and binding on the Borrowers and the Corporate Guarantor.

 
	
  

 	
  

 
	
 5.6

 	
 Computation

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 6.

 	
 REPRESENTATIONS AND WARRANTIES 

 
	
  

 	
  

 
	
 6.1

 	
 Continuing representations and warranties

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Due Incorporation/Valid Existence

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Due Corporate Authority

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Litigation

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

25

	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No conflict with other obligations

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
 (e)

 	
 Financial Condition

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 No Immunity

 
	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Shipping Company

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
 (h)

 	
 Licences/Authorisation

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

26

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Perfected
 Securities

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
 (j)

 	
 No Notarisation/Filing/Recording

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 Validity and Binding effect

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 Valid Choice of Law

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 6.2

 	
 Initial representations and warranties

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Direct obligations - Pari Passu

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Information

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 all information, accounts, statements of financial position, exhibits
 and reports furnished by or on behalf of any Security Party to the Bank in
 connection with the negotiation and preparation of this Agreement and each of
 the other Security Documents are true and accurate in all material respects
 and not misleading, do not omit material facts and all reasonable enquiries
 have been made to verify the facts and statements contained therein; there
 are no other facts the omission of which

 

27

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 would make any fact or statement therein misleading and, in the case
 of accounts and statements of financial position, they have been prepared in
 accordance with generally accepted accounting principles which have been
 consistently applied;

 
	
  

 	
  

 
	
  

 	
 (c)

 	
 No Event of Default

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 no Event of Default has occurred and is continuing;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No Taxes

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 No default under other Indebtedness

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 each Vessel on the Drawdown Date will be:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 operationally seaworthy and in every way fit for service;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
 managed by the Manager;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 No Charter 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 save for the A.P. Møller-Maersk Charterparties and unless
 otherwise permitted in writing by the Bank, none of the Vessels will on or
 before the relevant Drawdown Date be subject to any charter or contract nor
 to any agreement to enter into any charter or contract which, if entered into
 after the such Drawdown Date would have required the consent of the Bank
 under any of the Security Documents and there will

 

28

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not on or before such Drawdown Date be any agreement or arrangement
 whereby the Earnings of the relevant Vessel may be shared with any other
 person;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 No Encumbrances

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
 (i)

 	
 Compliance with Environmental Laws and Approvals

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 each Borrower has complied with the provisions of all Environmental
 Laws;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 No Environmental Claims

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 aa)

 	
 there is no Environmental Claim pending or, to the best of the
 Borrowers’ knowledge and belief, threatened against the Borrowers (or any of
 them) or the Vessels (or any of them) or any other Relevant Ship reasonably
 expected to have a material adverse effect on the business assets,
 operations, property or financial condition of any of the Borrowers or any
 other Security Party or on the security created by any of the Security
 Documents; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 bb)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 Copies true and complete

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the copies of the A.P. Møller-Maersk Charterparties and the
 Management Agreements delivered or to be delivered to the Bank pursuant to
 Clause 7.3 are, or will when delivered be, true and complete copies of
 such documents; such documents will when delivered constitute valid and
 binding obligations of the parties thereto

 

29

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 enforceable in accordance with their respective terms and there will
 have been no amendments or variations thereof or defaults thereunder;

 
	
  

 	
  

 
	
  

 	
 (l)

 	
 Compliance with the ISM Code

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 Compliance with ISPS Code

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 Money laundering - acting for own account

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
 6.3

 	
 Representations Correct

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 6.4

 	
 Repetition of Representations and
 Warranties

 
	
  

 	
  

 
	
  

 	
  

 	
 The representations and warranties in this Clause 6 (except in
 relation to the representations and warranties in Clause 6.2) shall be
 deemed to be repeated by the Borrowers on and as of each day from the date of
 this Agreement until all moneys due or owing by the Security Parties or any
 of them under this Agreement and the Security Documents have been repaid in
 full as if made with reference to the facts and circumstances existing on
 each such day.

 

30

	
  

 	
  

 	
  

 
	
 7.

 	
 CONDITIONS PRECEDENT 

 
	
  

 	
  

 	
  

 
	
 7.1

 	
 Conditions concerning corporate
 authorisations 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 the shareholders of all Security Parties shall be acceptable in all
 respects to the Bank. In the event that the Bank agrees (at its sole
 discretion) that a Security Party may 

 

31

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 have a corporate shareholder, the conditions set out in Sub-clauses
 (a), (b), (c) and (h) of this Clause 7.1 shall apply (mutatis mutandis) to
 such corporate shareholder; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

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

 
	
  

 	
  

 	
  

 
	
 7.2

 	
 Conditions concerning the Securities 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 each of the Security Documents and the Manager’s Undertaking duly
 executed and where appropriate duly registered with the appropriate registry;
 and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
 7.3

 	
 Conditions concerning the Vessels 

 
	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or (if so
 provided in Clause 2.3) any part thereof and/or to allow any Transaction to
 be effected under the Master Agreement is subject to the further condition
 that the Bank shall have received prior to the relevant drawdown or, where
 this is not possible, simultaneously with the drawdown of the Commitment or
 the relevant part thereof: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 a valuation of the relevant Vessel as at a date determined by the
 Bank but in any event before the relevant drawdown prepared on the basis
 specified in Clause 8.10(c) (but taking into account of any Approved
 Charterparty) by major shipbrokers appointed and/or approved by the Bank
 evidencing that the value of relevant Vessel is at least 125% of the amount
 of the Advance relative to such Vessel and otherwise in form and substance
 satisfactory to the Bank in its sole discretion; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 evidence that, prior to or simultaneously with the relevant drawdown,
 each Vessel will be duly registered in the ownership of its Owner through the
 Registry under the 

 

32

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 respective Flag State, free from any Encumbrances save for those in
 favour of the Bank and otherwise as contemplated herein; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 a copy of each A.P. Møller-Maersk Charterparty certified as true and
 complete by the legal counsel of the Borrowers; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

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

 
	
  

 	
  

 	
  

 
	
 7.4

 	
 No change of circumstances 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 

33

	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
 7.5

 	
 General Conditions 

 
	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or (if so
 provided in Clause 2.3) any part thereof and/or to allow any Transaction to
 be effected under the Master Agreement is subject to the further condition
 that the Bank, prior to or simultaneously with the drawdown, shall have
 received: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
 7.6

 	
 Know your customer and money laundering
 compliance 

 
	
  

 	
  

 	
  

 
	
  

 	
 The obligation of the Bank to advance the Commitment or any part
 thereof is subject to the further condition that the Bank, prior to or
 simultaneously with the drawdown, shall have received, to the extent required
 by any change in applicable law and regulation or any changes in the Bank’s
 own internal guidelines since the date on which the applicable documents and
 evidence were delivered to the Bank pursuant to Clause 8.1(f), such further
 documents and evidence as the Bank shall require to identify the Borrowers
 and the other Security Parties and any other persons involved or affected by
 the transaction(s) contemplated by this Agreement, including but without
 limitation a declaration of the ultimate beneficial shareholder(s) of the
 Borrowers and the Corporate Guarantor. 

 
	
  

 	
  

 	
  

 
	
 7.7

 	
 Further documents 

 
	
  

 	
  

 	
  

 
	
  

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

 

34

	
  

 	
  

 	
  

 
	
 7.8

 	
 Conditions subsequent 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Bank shall be entitled, upon the happening of an Event of
 Default, to send to the Charterer of each of the Vessels a notice of
 assignment of the relevant A.P. Møller-Maersk Charterparty or, as the case
 may be, the relevant Approved Charterparty. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
 8.

 	
 COVENANTS 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 8.1

 	
 Information Covenants 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Annual financial Statements 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 furnish the Bank, in form and substance satisfactory to the Bank,
 with annual, audited (by auditors acceptable to the Bank) consolidated
 financial statements of the Group (including the Borrowers) at latest within
 180 days after the end of the financial year concerned, prepared in
 accordance with generally accepted accounting principles consistently
 applied, such obligation to commence as from the financial year ending on
 31st December, 2008; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Financial Information 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provide the Bank annually and from time to time as the Bank may
 request and in form and substance satisfactory to the Bank with information
 on all major financial developments of the Group such as sales or purchases
 of vessels, new loans, refinancing/restructuring of existing loans, contracts
 for term employment of such vessels, as well as the financial conditions,
 cash flow position, commitments and operations of the Borrowers, including
 cash flow analysis and voyage accounts of the Vessels with a breakdown of
 income and running expenses showing net trading profit, trade payables and
 trade receivables, such financial details to be certified by one of the
 directors of the Borrowers as to their correctness; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Information on adverse change or Default 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

35

	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Information on the employment of the Vessels 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Know your customer and money laundering compliance 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 8.2

 	
 Banking operations-liquidity 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 ensure that, throughout the Security Period, it is maintained in
 deposit account(s) in the names of the Borrowers maintained with the Bank
 average monthly balances of $3,000,000 (Three million Dollars); 

 
	
  

 	
  

 	
  

 
	
 8.3

 	
 No Further Financial Exposure 

 
	
  

 	
  

 
	
  

 	
 without the prior written consent of the Bank:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 No further Indebtedness 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 No Loans 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 No Dividends 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 upon the occurrence of an Event of Default, which is continuing, not
 declare or pay any dividends or other distribution upon any of the issued
 shares or otherwise dispose of any assets to any of the shareholders of the
 Borrowers, without the prior written consent of the Bank; 

 

36

	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No Payments 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Master Agreement Derivatives 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not enter into any transaction in a derivative other than under the
 Master Agreement; 

 
	
  

 	
  

 	
  

 
	
 8.4

 	
 Maintenance of Business Structure 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Maintenance of Business Structure 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Maintenance of Legal Structure 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Control 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that no change shall be made in the direct or indirect
 ownership, beneficial ownership, control or management of any of the
 Borrowers and the Corporate Guarantor or of any of the Vessels without the
 prior written consent of the Bank (which consent shall not be unreasonably
 withheld) save for the necessary changes required for the creation of the new
 corporate structure of the Group and by the listing of the Corporate
 Guarantor in the New York Stock Exchange; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 No merger 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not merge or consolidate with any other company or person;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Subsidiaries 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not form or acquire any Subsidiaries; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Share capital and distribution 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 8.5

 	
 No Subordination 

 
	
  

 	
  

 	
  

 
	
  

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

 

37

	
  

 	
  

 	
  

 
	
 8.6

 	
 Maintenance of Assets 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 No Transfer of Assets 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 No Encumbrance of Assets 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 8.7

 	
 Covenants Concerning the Vessels 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Ownership/Management/Control 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that the Vessels will maintain their present ownership,
 management, control and beneficial ownership, save for the necessary changes
 required for the creation of the new corporate structure of the Group and by
 the listing of the Corporate Guarantor in the New York Stock Exchange; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Class 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Insurances 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Transfer/Encumbrances 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Not imperil Flag, Ownership, Insurance 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure that each of the Vessels is maintained and trades in
 conformity with the laws of the flag of the respective Vessel, of its owning
 company or of the nationality of the officers, the requirements of the
 Insurances and nothing is done or permitted to be done which could endanger
 the flag of the respective Vessel or its unencumbered (other than Permitted
 Encumbrances) ownership or its Insurances; 

 

38

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Mortgage Covenants 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 Charter 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 not without the prior written consent of the Bank (such consent not
 to be unreasonably withheld) enter into a charterparty, contract of
 affreightment, agreement or related document in respect of the employment of
 the vessels (i) for a period for more than 12 months or (ii) on demise
 charterparty; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Charter Assignment 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Compliance with Environmental Laws 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 Compliance with ISM Code and ISPS Code 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 will procure that the Manager and any Operator:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 

39

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

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

 
	
  

 	
  

 	
  

 	
  

 
	
 8.8

 	
 Observance of Covenants 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Use of the Loan 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Compliance with Covenants 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Payment on Demand 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Evidence of Compliance 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 8.9

 	
 Validity of Securities 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Validity 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Earnings 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ensure and procure that, unless and until directed by the Bank
 otherwise (i) all the Earnings of each Vessel shall be paid to the relevant
 Earnings Account and (ii) the 

 

40

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 persons from whom the Earnings are from time to time due are
 irrevocably instructed to pay them to the relevant Earnings Account in
 accordance with the provisions hereof and of the relevant Security Documents;
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Taxes 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Additional Documents 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 8.10

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers hereby jointly and severally undertake that the
 aggregate of (i) the aggregate Market Values of the Mortgaged Vessels
 (determined in accordance with Clause 8.10(b) or, as the case may be Clause
 8.10(c)) and (ii) the value in Dollars of any additional security given under
 this clause and accepted by the Bank (at its discretion) shall be at least
 equal to of the Security Requirement at the relevant time and if at any
 relevant time the aggregate of the Market Values of the Mortgaged Vessels
 (together with the value in Dollars of any additional security given under
 this clause and accepted by the Bank (at its discretion)) is less than the
 Security Requirement, they will within fifteen (15) Banking Days of being advised
 by the Bank of such event either: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 

41

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 110% or, as the case may be, 120% of the aggregate of (i) the Loan
 and (ii) the Swap Exposure. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Such additional security shall be constituted by: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 aa)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 bb)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Valuation of Mortgaged Vessel subject to Approved Charterparty.
 For the purpose of this Clause 8.10 the Market Value of a Mortgaged Vessel
 which at the relevant time is subject to an Approved Charterparty with an
 unexpired term of at least 12 months with a first class charterer acceptable
 to the Bank (which acceptance shall not be unreasonably withheld) shall be
 the aggregate of the present values (as may be conclusively determined by the
 Bank) of: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the Bareboat-equivalent Time Charter Income of such Mortgaged Vessel
 in respect of the remaining unexpired term of the relevant Approved
 Charterparty excluding any periods for which the relevant Approved
 Charterparty may be renewed at the option of any party (for the purposes of
 this Clause 8.10, an “option period”);
 and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the Residual Value of such Mortgaged Vessel; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 For the purposes of this Clause 8.10: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 aa.

 	
 the discount
 rate which will apply in calculating the present value of the amounts
 referred to in paragraphs (i) and (ii) of this Clause 8.10(b) will be the
 applicable interest rate swap rate for a period equal to the unexpired term
 of the relevant Mortgaged Vessel Approved Charterparty (excluding any option
 periods (rounded up to the nearest integral year)); 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 bb.

 	
  “Bareboat - equivalent Time Charter Income”
 means, in relation to a Mortgaged Vessel the aggregate charter hire due and
 payable to the Owner of that Mortgaged Vessel for the remaining unexpired
 term of the Approved Charterparty relative to that Mortgaged Vessel at the
 relevant time (excluding any option periods (as that term is defined in
 Clause 8.10(b)(i)) less the aggregate operating expenses of that Mortgaged
 Vessel as determined by the Borrowers to the satisfaction of the Bank for the
 same period; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 cc.

 	
  “Residual Value” of the relevant Mortgaged
 Vessel means the current charter-free market value (determined in accordance
 with Clause 8.10(c)) of a vessel with identical characteristics to such 

 

42

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Mortgaged
 Vessel other than its age which shall, for the purposes of this Clause 8.10,
 be considered to be the age of such Mortgaged Vessel at the expiration of the
 Approved Charterparty to which such Mortgaged Vessel is subject at the
 relevant time (excluding any option periods). 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Valuation of Mortgaged Vessel not subject to an Approved Charterparty.
For the purpose of this Clause 8.10 the Market Value of a Mortgaged Vessel
which at the relevant time is not subject to an Approved Charterparty shall
be made on the basis of one valuation made by such first class independent
sale and purchase shipbrokers as may from time to time be appointed or
approved by the Bank. For this purpose, such valuation shall be made on the
basis of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing seller and a willing buyer, but without
taking into account any existing charter in respect of such Mortgaged Vessel.
The Bank and the Borrowers each agrees to accept such valuation made by the
shipbroker appointed as aforesaid as conclusive evidence of the Market Value of
the relevant Mortgaged Vessel at the date of such valuation. Each of the
Borrowers agrees to supply the Bank and any shipbroker appointed as aforesaid
with such information concerning each of the Mortgaged Vessels and her
condition as such shipbroker may reasonably require for the purpose of making
such valuation.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Valuation of additional security For the
 purpose of this Clause 8.10, the market value of any additional security
 provided or to be provided to the Bank shall be determined by the Bank in its
 absolute discretion without any necessity for the Bank assigning any reason
 thereto provided, always, that if the additional security is in the
 form of a collateral vessel such collateral vessel shall be valued in
 accordance with the provisions of Clause 8.10(b) or, as the case may be,
 8.10(c) or if the additional security is in form of a cash deposit full
 credit shall be given for such cash deposit on a Dollar for Dollar basis; and
 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Documents and evidence In connection with
 any additional security provided in accordance with this Clause 8.10, the
 Bank shall be entitled to receive such evidence and documents as may in the
 Bank’s reasonable opinion be appropriate and such favourable legal opinions
 as the Bank shall in its absolute discretion require. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.11

 	
 Substitution of Personal Guarantee -
 Additional Financial covenants 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers may request the substitution of the Corporate Guarantee
 for the Personal Guarantee, subject to satisfaction of the following additional
 financial covenants: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the Corporate Guarantor to maintain market value Adjusted Net Worth
 of at least $500,000,000 (Five hundred million Dollars); 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the Corporate Guarantor to ensure that the Leverage Ratio of the
 Group does not exceed 75%; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 the Corporate Guarantor to maintain minimum cash of the greater of
 $30,000,000 (Thirty million Dollars) and 3% of its total debt; 

 

43

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 the Corporate Guarantor to maintain the consolidated interest cover
 ratio (EBITDA to Net Interest Expense) of 2.5 minimum; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 the Corporate Guarantor not to declare or pay dividends if the
 Leverage Ratio exceeds 70%. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The expressions used in this Clause 8.12 shall be construed in
 accordance with law and accounting principles internationally accepted as
 used in the Accounting Information produced in accordance with sub-clause
 8.1(a), and for the purposes of this Agreement: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
  “Leverage
 Ratio” means, in respect of an Accounting
 Period, total liabilities less cash and cash equivalents over adjusted market
 value of the aggregate on a consolidated basis of the Group assets less cash
 and cash equivalents; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
  “Adjusted
 Net Worth” means, in respect of an
 Accounting Period, book equity adjusted for the difference between the book
 and market value of assets; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
  “EBITDA”
 on a consolidated basis of the Group means the Earnings before interest and
 other taxes, depreciation and amortization; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
  “Net
 Interest Expense” means on a consolidated
 basis the total interest expense minus the total interest income; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
  “Accounting
 Information” means the annual audited
 consolidated financial statements of the Group, to be provided by the
 Borrowers to the Bank in accordance with Clause 8.1(a); and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

 	
  “Accounting
 Period” means each consecutive period of
 twelve months falling during the Security Period for which annually
 Accounting Information is required to be delivered pursuant to Clause 8.1(a).
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The Borrowers shall ensure that after the creation of the new
 corporate structure of the Group and the listing of the Corporate Guarantor
 in the New York Stock Exchange and throughout the remainder of the Security
 Period at least 40% of the shares of the Corporate Guarantor shall be
 directly or indirectly held by members of the Vasileios Konstantakopoulos
 family. 

 
	
  

 	
  

 	
  

 	
  

 
	
 9.

 	
 EVENTS OF DEFAULT 

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 9.1

 	
 Non Performance of Obligations 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 

44

	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
 9.2

 	
 Events affecting the Borrowers 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 an encumbrancer takes possession or a receiver or similar officer is
 appointed of the whole or any part of the undertakings, assets, rights or
 revenues of any of the Borrowers or a distress, execution, sequestration or
 other process is levied or enforced upon or sued out against any of the
 undertakings, assets, rights or revenues of any of the Borrowers and is not
 discharged within fourteen (14) Banking Days; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

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

 

45

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 there is any change in the Borrowers’ beneficial ownership of the
 shares in any of the Borrowers and the Corporate Guarantor, save for the
 necessary changes required for the creation of the new corporate structure of
 the Group and by the listing of the Corporate Guarantor in the New York Stock
 Exchange as a result of which less than 40% of the shares of the Corporate
 Guarantor are directly or indirectly held by members of the Konstantakopoulos
 family; or 

 
	
  

 	
  

 	
  

 
	
 9.3

 	
 Representations Incorrect 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 9.4

 	
 Cross-default 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 9.5

 	
 Events affecting the Security Documents 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any other event or events (whether related or not) occurs which
 constitutes a material (in the reasonable opinion of the Bank) adverse
 change, from the position applicable as at the date of this Agreement, in the
 business, affairs or condition (financial or 

 

46

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 otherwise) of any Security Party or a Credit Support Provider)
 (including any such material adverse change resulting from an Environmental
 Incident) the effect of which is, in the reasonable opinion of the Bank, to
 impair, delay or prevent the due fulfillment by any Security Party or a
 Credit Support Provider of any of their respective obligations or
 undertakings contained in this Loan Agreement, the Master Agreement or any of
 the Security Documents; or 

 
	
  

 	
  

 	
  

 
	
 9.6

 	
 Events concerning the Security Parties 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 death of the Personal Guarantor or any steps are taken or legal
 proceedings initiated for the Personal Guarantor which jeopardise the
 security constituted by the Personal Guarantee and the Borrowers fail to
 provide the Bank with a new Personal Guarantee executed by a Personal
 Guarantor acceptable to the Bank at its reasonable discretion; or 

 
	
  

 	
  

 	
  

 
	
 9.7

 	
 Environmental Events 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 

47

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 	
  

 
	
 9.8

 	
 Events concerning the Master Agreement 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 an Event of Default or Potential Event of Default (in each case as
 defined in the Master Agreement) has occurred and is continuing under the
 Master Agreement; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 notice of an Early Termination Date is given by the Bank under
 section 6(a) of the Master Agreement; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 an Early Termination Date (as defined in the Master Agreement) has
 occurred or been effectively designated under the Master Agreement; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 a person entitled to do so gives notice of an Early Termination Date
 (as defined in the Master Agreement) under section 6(b)(iv) of the Master
 Agreement; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 the Master Agreement is terminated, cancelled, suspended, rescinded
 or revoked or otherwise ceases to remain in full force and effect for any
 reason; or 

 
	
  

 	
  

 	
  

 	
  

 
	
 9.9

 	
 Events concerning the Vessels 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 either Vessel becomes a Total Loss unless: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 either Vessel ceases to be managed by the Manager (for any reason
 other than the reason of a Total Loss or sale of such Vessel) without the
 approval of the Bank and the Borrowers fail to appoint an Manager within two
 (2) days after the termination of the Management Agreement with the previous
 Manager; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any of the Vessels is arrested, confiscated, seized, taken in
 execution, impounded, forfeited, detained in exercise or purported exercise
 of any possessory lien or other claim and the Borrowers shall fail to procure
 the release of such Vessel within a period of thirty (30) days thereafter; or
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 the registration of any of the Vessels under the laws and flag of her
 Flag State is cancelled or terminated without the prior written consent of
 the Bank or, if a Vessel 

 

48

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 is only provisionally registered on the delivery date for such Vessel
 and is not permanently registered under the laws and flag of her Flag State
 at least ten (10) days prior to the deadline for completing such permanent
 registration; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

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

 
	
  

 	
  

 	
  

 
	
 9.10

 	
 Consequences of default 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 

49

	
  

 	
  

 	
  

 
	
 9.11

 	
 Insolvency Events of Default 

 
	
  

 	
  

 
	
  

 	
 If an event occurs in respect of any of the Borrowers or the other
 Security Parties of the type described in Clause 9.2(a) to (e) (except (i) in
 the case when a petition was presented or proceedings were commenced or a
 suit or writ were issued by a third party and the relevant Borrower or
 Security Party is defending itself in bona fide and (ii) in the case that
 such events mentioned in Clause 9.2 relate to only a part of the
 undertakings, assets, rights or revenues which in the reasonable opinion of
 the Bank does not affect the ability of the Borrowers to perform their
 obligations under this Agreement and/or the other Security Documents) the
 obligation of the Bank to make the Commitment available shall terminate immediately
 upon receipt by the Bank of the relevant information (as such receipt shall
 be conclusively certified by a certificate of the Bank) and all amounts
 payable under sub-clause 9.10(b) above shall become immediately due and
 payable without any notice or other formality which is hereby expressly
 waived by the Borrowers.

 
	
  

 	
  

 
	
 9.12

 	
 Proof of Event of Default 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 9.13

 	
 Exclusion of Bank’s liability 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.

 	
 INDEMNITIES - EXPENSES - FEES 

 
	
  

 	
  

 
	
 10.1

 	
 Miscellaneous Indemnities 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers shall on demand (and it is hereby expressly jointly and
 severally undertaken by the Borrowers to) indemnify the Bank, without
 prejudice to any of the other rights of the Bank under any of the Security
 Documents, against any loss or expense which the Bank shall certify as
 sustained or incurred as a consequence of:

 

50

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the occurrence and/or continuance of any Event of Default (or event
 which, with the giving of notice and/or lapse of time or other applicable
 condition, might constitute an Event of Default) and/or the acceleration of
 repayment of the Loan (or any part thereof) pursuant to Clause 9.10; and/or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 any prepayment of the Loan or part thereof being made under Clauses
 4.2, 4.3, 8.10(a) or 12 or any other repayment of the Loan or part thereof
 being made otherwise than on an Interest Payment Date relating to the part of
 the Loan prepaid or repaid; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 the Commitment or either Tranche not being advanced for any reason
 (excluding any default by the Bank) after the Drawdown Notice has been given,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Without limiting its generality, Clause 10.1(a) covers any claim,
 expense, liability or loss, including a loss of a prospective profit,
 incurred by the Bank: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 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 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in terminating or reversing, or otherwise in connection with, any
 Transaction or any other interest rate and/or currency swap or any other
 transaction or arrangement entered into by the Bank (whether with another
 legal entity or with another office or department of the Bank) to hedge any
 exposure arising under this Agreement or that part which the Bank determines
 is fairly attributable to this Agreement of the amount of the liabilities,
 expenses or losses (including losses of prospective profits) incurred by it
 in terminating or reversing, or otherwise in connection with, any open
 position arising under this Agreement or the Master Agreement.

 
	
 10.2

 	
 Expenses 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Initial and Amendment expenses 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 all expenses (including legal, printing and out-of-pocket expenses)
 incurred by the Bank in connection with the negotiation, preparation and
 execution of this Agreement and the other Security Documents and of any amendment
 or extension of or the granting of any waiver or consent under this Agreement
 and/or any of the Security Documents and/or in connection with any proposal
 by the Borrowers to constitute additional security pursuant to Clause
 8.10(a), whether any such security shall in fact be constituted or not;

 

51

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Enforcement expenses 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Other expenses 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 any and all other Expenses as defined in Clause 1.2.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Legal costs 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.3

 	
 Stamp duty 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.4

 	
 Environmental Indemnity 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.5

 	
 Currency indemnity 

 
	
  

 	
  

 
	
  

 	
 If any sum due from the Borrowers under any of the Security Documents
or any order or judgement given or made in relation hereto has to be
converted from the currency (the “first currency”) in which the same is
payable under the relevant Security Document or under such order or judgement
into another currency (the “second currency”) for the purpose of (i) making
or filing a claim or proof against the Borrowers or any other Security Party,
as the  

 

52

	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.6

 	
 MII costs 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.7

 	
 Maintenance of the Indemnities 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 10.8

 	
 Communications Indemnity 

 
	
  

 	
  

 
	
  

 	
 It is hereby agreed in connection with communications that:

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 each of the Borrowers shall recognise any and all of the said
 notices, requests, instructions or other communications as legal, valid and
 binding, when these notices, requests, instructions or communications come
 from the fax numbers mentioned in Clause 15.1 or any other fax usually used
 by it or its managing company; 

 

53

	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 the Bank shall have the right to ask the Borrowers to furnish any
 information the Bank may require to establish the authority of any person
 purporting to act on behalf of the Borrowers for these notices, requests,
 instructions or communications but it is expressly agreed that there is no
 obligation for the Bank to do so. The Bank shall be fully protected in, and
 the Bank shall incur no liability to the Borrowers for acting upon the said
 notices, requests, instructions or communications which were believed by the
 Bank in good faith to have been given by the Borrowers or by any of their
 authorised representative(s); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

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

 
	
  

 	
  

 	
  

 
	
 10.9

 	
 Central Bank or European Central Bank
 reserve requirements indemnity 

 
	
  

 	
  

 
	
  

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

 

54

	
  

 	
  

 	
  

 
	
 10.10

 	
 Arrangement Fee - Commitment Fee 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The Borrowers shall pay, or as the case may be, have paid to the Bank
 on the date hereof a non-refundable arrangement fee in the sum of Three
 hundred thousand Dollars ($300,000) being equivalent to 0.20% of the
 Commitment payable on the first Drawdown Date. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Borrowers shall pay to the Bank on each of the dates falling at
 three monthly intervals after the date of acceptance of the Commitment Letter
 i.e. 6.05.2008 until the last day of the Availability Period (or if earlier
 on the Drawdown Date last to occur), commitment commission for the account of
 the Bank computed from the date of acceptance of the Commitment Letter in the
 case of the first payment of commission) and from the date of the preceding
 payment of commission (in the case of each subsequent payment) at the rate of
 0.20% per annum on the daily undrawn and uncancelled amount of the Commitment.
 

 
	
  

 	
  

 	
  

 
	
  

 	
 The arrangement fee and commitment commission referred to in this
 Clause 10.10 shall be payable by the Borrowers to the Bank whether or not any
 part of the Commitment is ever advanced.

 
	
  

 	
  

 
	
 11.

 	
 SECURITY, APPLICATION AND SET-OFF 

 
	
  

 	
  

 
	
 11.1

 	
 Securities

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the Mortgages; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the General Assignments; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Personal Guarantee; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 the Corporate Guarantee (upon substitution for the Personal
 Guarantee);

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 the Charterparty Assignments;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 the Accounts Pledge Agreement; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 the Master Agreement Security Deeds. 

 
	
  

 	
  

 	
  

 
	
 11.2

 	
 Maintenance of Securities 

 
	
  

 	
  

 
	
  

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

 

55

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 the Bank may be necessary or desirable for perfecting the security
 contemplated or constituted by the Security Documents.

 
	
  

 	
  

 
	
 11.3

 	
 Application of funds

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 secondly, in or towards payment of any
 default interest; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 sixthly, in or towards payment to the Bank
 of any other sums owing to it under any of the Security Documents (other than
 the Master Agreement); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 seventhly, in or towards payment to the Bank
 of any sum owing under the Master Agreement; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

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

 
	
  

 	
  

 	
  

 
	
 11.4

 	
 Set off 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Right of Set-off 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 to apply any credit balance standing upon any account of the
 Borrowers or any of them with any branch of the Bank and in whatever currency
 in or towards satisfaction of any sum due to the Bank from the Borrowers
 under this Agreement and/or any of the other Security Documents; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

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

 

56

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Rights under Master Agreement 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Without prejudice to its rights hereunder and/or under the Master
 Agreement, the Bank may at the same time as, or at any time after, any Event
 of Default under this Agreement or the Borrowers’ default under the Master
 Agreement, set off any amount due now or in the future from the Borrowers to
 the Bank under this Agreement against any amount due from the Bank to the
 Borrowers under the Master Agreement and apply the first amount in
 discharging the second amount. The effect of any set off under this clause
 11.4(b) shall be effective to extinguish or, as the case may require, reduce the
 liabilities of the Bank under the Master Agreement. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The rights conferred on the Bank by this Clause 11.4 shall be in
 addition to, and without prejudice to or limitation of, the rights of netting
 and set off conferred on the Bank by the Master Agreement. Each of the
 Borrowers acknowledges that the Bank shall be under no obligation to make any
 payment to the Borrowers under or pursuant to the Master Agreement if, at the
 time that payment becomes due, there shall have occurred an Event of Default,
 which is continuing or Potential Event of Default, or an Event of Default or
 Termination Event (as those terms are respectively defined in the Master
 Agreement). 

 
	
  

 	
  

 	
  

 	
  

 
	
 11.5

 	
 Earnings Account 

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any credit balance shall be available to the Borrowers; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided, however, that:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

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

 

57

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Each of the Borrowers hereby irrevocably and unconditionally
 authorises the Bank to make from the relevant Earnings Account any and all
 above payments and repayments as and when the same fall due or at any time
 thereafter. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The Borrowers hereby jointly and severally covenant with the Bank
 that neither of the Earnings Accounts shall be charged, assigned, transferred
 or pledged (other than in favour of the Bank) nor shall there be granted by
 the Borrowers or suffered to arise any third party rights over or against the
 whole or any part of the Earnings Accounts (or either of them). 

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

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

 
	
  

 	
  

 	
  

 
	
 12.

 	
 UNLAWFULNESS, INCREASED COSTS 

 
	
  

 	
  

 
	
 12.1

 	
 Unlawfulness 

 
	
  

 	
  

 
	
  

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

 

58

	
  

 	
  

 	
  

 
	
 12.2

 	
 Change of circumstances 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 12.3

 	
 Increased Cost 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 

59

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 12.4

 	
 Claim for increased cost 

 
	
  

 	
  

 
	
  

 	
 The Bank will promptly notify the Borrowers of any intention to claim
 indemnification pursuant to Clause 12.3 and such notification will be a
 conclusive and full evidence binding on the Borrowers as to the amount of any
 increased cost or reduction and the method of calculating the same and the
 Borrowers shall be allowed to rebut such evidence by any means of evidence
 save for witness. A claim under Clause 12.3 may be made at any time and must
 be discharged by the Borrowers within seven (7) days of demand. It shall not
 be a defence to a claim by the Bank under this Clause 12.4 that any increased
 cost or reduction could have been avoided by the Bank. Any amount due from
 the Borrowers under Clause 12.3 shall be due as a separate debt and shall not
 be affected by judgement being obtained for any other sums due under or in
 respect of this Agreement.

 
	
  

 	
  

 
	
 12.5

 	
 Option to prepay 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 13.

 	
 ASSIGNMENT, PARTICIPATION, LENDING OFFICE 

 
	
  

 	
  

 
	
 13.1

 	
 Binding Effect 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 13.2

 	
 No Assignment by the Borrowers 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 13.3

 	
 Assignment by the Bank 

 
	
  

 	
  

 
	
  

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

 

60

	
  

 	
  

 
	
 13.4

 	
 Documentation 

 
	
  

 	
  

 
	
  

 	
 If the Bank assigns, transfers or in any other manner grants
 participation in respect of all or any part of its rights or benefits or
 transfers all or any of its obligations as provided in this Clause 13.4 each
 of the Borrowers undertakes, immediately on being requested to do so by the
 Bank, to enter into and procure that each Security Party enters into such
 documents as may be necessary or desirable to transfer to the assignee,
 transferee or participant all or the relevant part of the interest of the
 Bank in the Security Documents and all relevant references in this Agreement
 to the Bank shall thereafter be construed as a reference to the Bank and/or
 assignee, transferee or participant of the Bank to the extent of their
 respective interests and, in the case of a transfer of all or part of the
 obligations of the Bank, the Borrowers shall thereafter look only to the
 assignee, transferee or participant in respect of that proportion of the
 obligations of the Bank under this Agreement assumed by such assignee,
 transferee or participant. The Borrowers hereby expressly consent to any
 subsequent transfer of the rights and obligations of the Bank and undertake
 that they shall join in and execute such supplemental or substitute
 agreements as may be necessary to enable the Bank to assign and/or transfer
 and/or grant participation in respect of its rights and obligations to
 another branch or to one or more banks or financial institutions in a
 syndicate or otherwise. 

 
	
  

 	
  

 
	
 13.5

 	
 Disclosure of information 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 The Bank shall inform the Borrowers of its intention to disclose the
 information referred to in Clause 13.5 to any other bank or financial
 institution. 

 
	
  

 	
  

 
	
 13.6

 	
 Change of Lending Office 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 14.

 	
 MISCELLANEOUS 

 
	
  

 	
  

 
	
 14.1

 	
 Cumulative Remedies 

 
	
  

 	
  

 
	
  

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

 

61

	
  

 	
  

 
	
 14.2

 	
 Waivers 

 
	
  

 	
  

 
	
  

 	
 No delay or omission by the Bank to exercise any right, remedy or
 power vested in the Bank under this Agreement and/or the other Security
 Documents or by law shall impair such right or power, or be construed as a
 waiver of, or as an acquiescence in any default by the Borrowers and/or any
 other Security Party, nor shall any single or partial exercise by the Bank of
 any power, right or remedy preclude any other or further exercise thereof or
 the exercise of any other power, right or remedy. In the event of the Bank on
 any occasion agreeing to waive any such right, remedy or power, or consenting
 to any departure from the strict application of the provisions of this
 Agreement or of any other Security Document, such waiver shall not in any way
 prejudice or affect the powers conferred upon the Bank under this Agreement
 and the other Security Documents or the right of the Bank thereafter to act
 strictly in accordance with the terms of this Agreement and the other
 Security Documents. No modification or waiver by the Bank of any provision of
 this Agreement or of any of the other Security Documents nor any consent by
 the Bank to any departure therefrom by any Security Party shall be effective
 unless the same shall be in writing and then shall only be effective in the
 specific case and for the specific purpose for which given. No notice to or
 demand on any such party in any such case shall entitle such party to any
 other or further notice or demand in similar or other circumstances. 

 
	
  

 	
  

 
	
 14.3

 	
 Integration of Terms 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 14.4

 	
 Amendments 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 14.5

 	
 Invalidity of Terms 

 
	
  

 	
  

 
	
  

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

 

62

	
  

 	
  

 	
  

 
	
 14.6

 	
 Inconsistency of Terms 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 14.7

 	
 Language and genuineness of documents 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Language

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 All certificates, instruments and other documents to be delivered
 under or supplied in connection with this Agreement or any of the other
 Security Documents shall be in the Greek or the English language (or such
 other language as the Bank shall agree) or shall be accompanied by a
 certified Greek translation upon which the Bank shall be entitled to rely.

 
	
  

 	
  

 
	
  

 	
 (b)

 	
 Certification
 of documents

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
 (c)

 	
 Certification
 of signature

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

 	
 (d)

 	
 Further
 assurances

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Conflicts

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

63

	
  

 	
  

 	
  

 
	
 15.

 	
 NOTICES AND OTHER MATTERS 

 
	
  

 	
  

 
	
 15.1

 	
 Notices 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 be sent: 

 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 if to be
 sent to any Security Party, to: 

 
	
  

 	
  

 	
 c/o COSTOMARE SHIPPING COMPANY S.A.,

 
	
  

 	
  

 	
 60 Zephyrou
 Street, Pal. Faliro, 

 
	
  

 	
  

 	
 Athens,
 Greece, 

 
	
  

 	
  

 	
 Fax No.
 (+30210) 9406454 

 
	
  

 	
  

 	
 Attention:
 The Chief Financial Officer 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 if to be
 sent to the Bank, to 

 
	
  

 	
  

 	
 EMPORIKI
 BANK OF GREECE S.A. 

 
	
  

 	
  

 	
 114
 Kolokotroni Street 

 
	
  

 	
  

 	
 GR 185.35
 Piraeus, Greece 

 
	
  

 	
  

 	
 Fax No.: +30
 210 4226779 

 
	
  

 	
  

 	
 Attention:
 The Manager 

 
	
  

 	
  

 	
  

 
	
  

 	
 or to such other person, address or fax number as is notified by the
 relevant Security Party or the Bank (as the case may be) to the other parties
 to this Agreement and, in the case of any such change of address or fax
 number notified to the Bank, the same shall not become effective until notice
 of such change is actually received by the Bank and a copy of the notice of
 such change is signed by the Bank.

 

	
  

 	
  

 	
  

 
	
 15.2

 	
 Confidentiality 

 
	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Each of the Borrowers acknowledge and accept that the Bank may be
 required by law or that it may be appropriate for the Bank to disclose
 information and deliver documentation relating to the Borrowers and the
 transactions and matters in relation 

 

64

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 to this Agreement and/or the other Security Documents to governmental
 or regulatory agencies and authorities.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

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

 
	
  

 	
  

 	
  

 
	
 16.

 	
 APPLICABLE LAW AND JURISDICTION 

 
	
  

 	
  

 
	
 16.1

 	
 Law 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 This Agreement shall be governed by and construed in accordance with
 Greek Law and in particular with the provisions of (i) Act of the Monetary
 Committee under Serial No. 187/1978 (as amended), (ii) the provisions of L.D.
 dated 17.7/13.8.1923 on “Special Provisions on Societes Anonymes” and (iii)
 the special terms set out in the resolutions of the Bank of Greece or any
 other competent Authority. Moreover, the Borrower hereby acknowledges and
 declares that it is fully familiar with the General Transaction Terms of the
 Bank and it is hereby agreed that the said General Transaction Terms shall be
 deemed an integral part of this Agreement. 

 
	
  

 	
  

 
	
 16.2

 	
 Submission to Jurisdiction 

 
	
  

 	
  

 
	
  

 	
 For the exclusive benefit of the Bank, the Borrower hereby (i)
 irrevocably submits to the non exclusive jurisdiction of the Courts of
 Piraeus in Greece and (ii) agrees that any summons, writ, judicial or extra
 judicial notice, protest, payment order, order for payment, order for
 enforcement, announcement of claim or other legal process issued against it
 in Greece shall be served upon the Process Agent, who is hereby authorised to
 accept such service, which shall be deemed to be good service on the
 Borrower. 

 
	
  

 	
  

 
	
 16.3

 	
 Proceedings in any other country 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If it is decided by the Bank that any such proceedings should be
 commenced in any other country, then any objections as to the jurisdiction or
 any claim as to the inconvenience of the forum is hereby waived by each of
 the Borrowers and it is agreed and undertaken by each of the Borrowers to
 instruct lawyers in that country to accept service of legal process and not
 to contest the validity of such proceedings as far as the jurisdiction of the
 court or courts involved is concerned and each of the 

 

65

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Borrowers agrees that any judgement or order obtained in a Greek
 court shall be conclusive and binding on the Borrowers (and each of them) and
 shall be enforceable without review in the courts of any other jurisdiction.

 
	
  

 	
  

 	
  

 
	
 16.4

 	
 Exclusive jurisdiction

 
	
  

 	
  

 
	
  

 	
 The parties further agree that subject to sub-Clause 16.3 the Courts
 of Piraeus shall have exclusive jurisdiction to determine any claim which the
 Borrower may have against the Bank arising out of or in connection with this
 Agreement and the Borrower hereby waives any objections to proceedings with
 respect to this Agreement in such courts on the grounds of venue or
 inconvenient forum.

 
	
  

 	
  

 
	
 16.5

 	
 Process Agent (Antiklitos)

 
	
  

 	
  

 
	
  

 	
 Mr. Konstantinos Zacharatos, an Attorney-at-law, presently c/o
 Costamare Shipping Company S.A., 60 Zephyrou Street, 175.64 Athens, Greece,
 is hereby appointed by the Borrowers as agent to accept service (hereinafter
 called the “Process Agent”) upon whom any judicial or extrajudicial process
 may be served (including but without limitation any documents initiating
 legal proceedings) and any notice, request, demand payment order, announcement
 of claim, any enforcement process or other communication under this Agreement
 or any of the Security Documents. In the event that the Process Agent (or any
 substitute process agent notified to the Bank in accordance with the
 foregoing) cannot be found at the address specified above (or, as the case
 may be, notified to the Bank), which will be conclusively proved by the
 affidavit of a process server to that effect, the authority of the Process
 Agent as agent to accept service shall be deemed to have ceased and service
 of documents may be effected in accordance with the procedure provided by the
 relevant provisions on service of process provided by the Hellenic Procedural
 Code.

 
	
  

 	
  

 
	
 16.6

 	
 Meaning of “proceedings”

 
	
  

 	
  

 
	
  

 	
 In this Clause 16 “proceedings” means proceedings of any kind,
 including an application for a provisional or protective measure.

 

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

	
  

 	
  

 
	
  

 	
 /s/ 

 
	
  

 	

 

 

66

EXECUTION PAGE

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 THE BORROWERS

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 )

 	
  

 
	
 Mr.
 Konstantinos V. Konstantakopoulos

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 CHRISTOS MARITIME CORPORATION,

 	
 )

 	
 /s/ Konstantinos V. Konstantakopoulos

 
	
 of Liberia,
 in the presence of:

 	
 )

 	
 Attorney-in-fact

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/
 Konstantinos Zacharatos

 	
  

 	
 )

 	
  

 
	
 Name:

 	
 Konstantinos
 Zacharatos

 	
 )

 	
  

 
	
 Address:

 	
 60 Zephyrou
 Street, Pal. Faliro,

 	
 )

 	
  

 
	
  

 	
 175.64
 Athens, Greece,

 	
 )

 	
  

 
	
 Occupation:
 Attorney-at-law

 	
  

 	
 )

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 )

 	
  

 
	
 Mr.
 Konstantinos V. Konstantakopoulos

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
 COSTIS MARITIME CORPORATION,

 	
 )

 	
 /s/ Konstantinos V. Konstantakopoulos

 
	
 of Liberia,
 in the presence of:

 	
 )

 	
 Attorney-in-fact

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/
 Konstantinos Zacharatos

 	
  

 	
 )

 	
  

 
	
 Name:

 	
 Konstantinos
 Zacharatos

 	
  

 	
 )

 	
  

 
	
 Address:

 	
 60 Zephyrou
 Street, Pal. Faliro,

 	
 )

 	
  

 
	
  

 	
 175.64
 Athens, Greece,

 	
 )

 	
  

 
	
 Occupation:
 Attorney-at-law

 	
  

 	
 )

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 THE BANK

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 )

 	
 /s/ Christina Margelou

 
	
 Mrs.
 Christina Margelou

 	
  

 	
 )

 	
 Attorney-in-fact

 
	
 and Mrs.
 Cryssoula Voulgari

 	
  

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
  

 	
 )

 	
  

 
	
 EMPORIKI BANK OF GREECE S.A.

 	
 )

 	
 /s/ Cryssoula Voulgari

 
	
 in the
 presence of:

 	
  

 	
 Attorney-in-fact

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Witness:

 	
 /s/
 Konstantinos Zacharatos

 	
  

 	
 )

 	
  

 
	
 Name:

 	
 Konstantinos
 Zacharatos

 	
  

 	
 )

 	
  

 
	
 Address:

 	
 60 Zephyrou
 Street, Pal. Faliro,

 	
 )

 	
  

 
	
  

 	
 175.64
 Athens, Greece,

 	
  

 	
 )

 	
  

 
	
 Occupation:
 Attorney-at-law

 	
  

 	
 )

 	
  

 

67

SCHEDULE 1

FORM OF DRAWDOWN NOTICE
(referred to in Clause 2.2)

	
  

 	
  

 	
  

 
	
 To:

 	
 EMPORIKI BANK OF GREECE S.A. 

 
	
  

 	
 114
 Kolokotroni Street 

 
	
  

 	
 Piraeus,
 Greece 

 	
 [ ] May, 2008

 
	
  

 	
  

 	
  

 
	
 Re:

 	
 US$150,000,000
 Loan Agreement (the “Loan Agreement”)
 dated 12th May, 2008 made between (1) the Bank, as lender and (2) CHRISTOS MARITIME CORPORATION
and COSTIS MARITIME CORPORATION, as joint and several borrowers
 (the “Borrowers”).

 
				

We refer to the Loan Agreement and hereby give you notice that we wish
to draw the full amount of the [Commitment/Tranche [A] [B] in the amount of
$75,000,000 (Seventy five million Dollars) on [ ] May, 2008.
We select a first Interest Period in respect of the Loan of [ ] months/
terminating on [ ],
200.... The funds should be credited to ([ ]
[name and number of account] [ ]) with [ ], New York,
USA. 

We confirm that: 

	
  

 	
  

 
	
 (i)

 	
 no event or
 circumstance has occurred and is continuing which constitutes an Event of
 Default;

 
	
  

 	
  

 
	
 (ii)

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

 
	
  

 	
  

 
	
 (iii)

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

 
	
  

 	
  

 
	
 (iv)

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

 

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

	
  

 	
  

 
	
 SIGNED by

 	
 )

 
	
 Mr.

 	
 )

 
	
 for and on
 behalf of

 	
 )

 
	
 CHRISTOS MARITIME CORPORATION

 	
 )

 
	
 of Liberia,
 in the presence of:

 	
 )

 

	
  

 	
  

 	
  

 
	
 Witness:

 	
  

 	
  

 
	
 Name:

 	
  

 
	
 Address:

 	
  

 
	
 Occupation:

 	
  

 

68

	
  

 	
  

 
	
 SIGNED by

 	
 )

 
	
 Mr.

 	
 )

 
	
 for and on
 behalf of

 	
 )

 
	
 COSTIS MARITIME CORPORATION,

 	
 )

 
	
 of Liberia,
 in the presence of:

 	
 )

 

	
  

 	
  

 	
  

 
	
 Witness:

 	
  

 	
  

 
	
 Name:

 	
  

 
	
 Address:

 	
  

 
	
 Occupation:

 	
  

 

69

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