Document:

Exhibit 10.32

 

Private &
Confidential

 

 

LOAN AGREEMENT

for a

Loan of up to US$17,600,000

to

TASMAN SEAWAYS INC.

and

SANTON LIMITED

provided by

NATIONAL BANK OF GREECE S.A.

 

 

 

 

Contents

 

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1

  	
  Purpose and definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2

  	
  The Commitment
  and the Loan

  	
  17

  
	
   

  	
   

  	
   

  
	
  3

  	
  Interest and Interest Periods

  	
  20

  
	
   

  	
   

  	
   

  
	
  4

  	
  Repayment and
  prepayment

  	
  22

  
	
   

  	
   

  	
   

  
	
  5

  	
  Fees,
  commitment commission and expenses

  	
  24

  
	
   

  	
   

  	
   

  
	
  6

  	
  Payments and
  taxes; accounts and calculations

  	
  25

  
	
   

  	
   

  	
   

  
	
  7

  	
  Representations and warranties

  	
  26

  
	
   

  	
   

  	
   

  
	
  8

  	
  Undertakings

  	
  30

  
	
   

  	
   

  	
   

  
	
  9

  	
  Conditions

  	
  36

  
	
   

  	
   

  	
   

  
	
  10

  	
  Events of Default

  	
  38

  
	
   

  	
   

  	
   

  
	
  11

  	
  Indemnities

  	
  41

  
	
   

  	
   

  	
   

  
	
  12

  	
  Unlawfulness
  and increased costs

  	
  42

  
	
   

  	
   

  	
   

  
	
  13

  	
  Security and
  set-off

  	
  43

  
	
   

  	
   

  	
   

  
	
  14

  	
  Operating
  Accounts

  	
  44

  
	
   

  	
   

  	
   

  
	
  15

  	
  Assignment,
  transfer and lending office

  	
  46

  
	
   

  	
   

  	
   

  
	
  16

  	
  Notices and other matters

  	
  47

  
	
   

  	
   

  	
   

  
	
  17

  	
  Governing law and jurisdiction

  	
  49

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1
  Form of Drawdown Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2
  Documents and evidence required as conditions precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 3
  Pre-delivery Advances per Ship

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4
  Form of Pre-delivery Security Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 5
  Form of Corporate Guarantee

  	
   

  

 

 

THIS
AGREEMENT is dated           October 2006
and made BETWEEN:

 

(1)           TASMAN
SEAWAYS INC. and SANTON
LIMITED as joint and several Borrowers; and

 

(2)           NATIONAL
BANK OF GREECE S.A. as Bank.

 

IT IS AGREED as follows:

 

1              Purpose and definitions

 

1.1          Purpose

 

This
Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrowers, jointly and severally, a loan of up
to Seventeen million six hundred thousand Dollars ($17,600,000) in up to twelve
(12) Advances to be used for the purpose of financing and/or refinancing part
of the construction and acquisition cost of the Ships.

 

1.2          Definitions

 

In this
Agreement, unless the context otherwise requires:

 

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

 

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

 

“Additional Cost Advance”:

 

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

 

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

 

“Advances” means each borrowing of a proportion of the
Commitment by the Borrowers or (as the context may require) the principal
amount of such borrowing, it includes (i) each Santon Pre-delivery
Advance, (ii) the Santon Delivery Advance, (iii) the Santon
Additional Cost Advance, (iv) each Tasman Pre-delivery Advance, (v) the
Tasman Delivery Advance and (vi) the Tasman Additional Cost Advance, and:

 

(a)           in
relation to the Santon Ship and the Santon Tranche, it means the Santon Advances;
or

 

(b)           in
relation to the Tasman Ship and the Tasman Tranche, it means the Tasman Advances,

 

and “Advance” means any of them;

 

“Assignee” has the meaning ascribed thereto in clause 15.3;

 

“Balloon Instalment” has, in respect of each Tranche, the meaning
ascribed thereto in clause 4.1;

 

“Bank” means National Bank of Greece S.A. whose registered
office is at 86 Aeolou Street, 102 32 Athens, Greece acting for the purposes of
this Agreement through its branch at 2 Bouboulinas & Akti Miaouli, 185
35 Piraeus, Greece (or of such other address as may last have been notified to
the Borrowers pursuant to clause 15.6) and includes its successors in
title, Assignees and/or Transferees;

 

1

 

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

 

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

 

“Borrower” means:

 

(a)           in
relation to the Santon Ship, the Santon Borrower; or

 

(b)           in
relation to the Tasman Ship, the Tasman Borrower,

 

and “Borrowers” means either or both of them;

 

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

 

“Builder” means Qingdao Hyundai Shipbuilding Co. Ltd, a
corporation duly organised and existing under the laws of the People’s Republic
of China, having its registered office at Lingshanwei Jiaonan, PC 266427,
Qingdao Shandong Province, the People’s Republic of China and includes it
successors in title;

 

“Casualty Amount” means, in relation to each Ship, Two
hundred and fifty thousand Dollars ($250,000) or the equivalent in any other
currency;

 

“Classification” means in relation to each Ship, the
classification “+100A1 Double Hull Oil Tanker, ESP, LI, +LMC, CCS, descriptive
motor “Shipright BWMP (S or F) & Shipright (SCM)”“ with the relevant
Classification Society, or such other classification as the Bank shall, at the
request of a Borrower, have agreed in writing shall be treated as the
Classification in relation to such Borrower’s Ship for the purposes of the
relevant Ship Security Documents;

 

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

 

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

 

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

 

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

 

2

 

“Construction Cost” means:

 

(a)           in relation to Santon Ship,
the Santon Construction Cost; or

 

(b)           in relation to the Tasman Ship,
the Tasman Construction Cost,

 

and “Construction Costs” means either or both of them;

 

“Contract” means:

 

(a)           in relation to the Santon Ship,
the Santon Contract; or

 

(b)           in relation to the Tasman Ship,
the Tasman Contract,

 

and “Contracts” means either or both of them;

 

“Contract Assignment Consent and Acknowledgement” means:

 

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

 

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

 

and “Contract Assignment Consents and Acknowledgements” means either
or both of them;

 

“Contract Price” means:

 

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

 

(b)           in relation to the Tasman Ship,
the Tasman Contract Price,

 

and “Contract Prices” means either or both of them;

 

“Corporate Guarantee” means:

 

(a)           the Manager
Corporate Guarantee; or

 

(b)           the Holding
Corporate Guarantee,

 

and “Corporate Guarantees” means either or both of them;

 

“Corporate Guarantor” means Aegean Marine Petroleum Network
Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall
Islands MH96960 and includes its successors in title;

 

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

 

“Delivery” means, in relation to each Ship, the delivery of
such Ship by the Builder to, and the acceptance of such Ship by, the relevant
Borrower pursuant to the relevant Contract;

 

“Delivery Advance”:

 

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

 

3

 

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

 

and “Delivery Advances” means either or both of them;

 

“Delivery Date” means, in relation to each Ship, the date
upon which its Delivery occurs;

 

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

 

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

 

“Drawdown Date” means, in relation to an Advance, any date,
being a Banking Day falling during the relevant Drawdown Period, on which the
Borrowers request that Advance to be made as specified in the relevant Drawdown
Notice (whether or not such Advance is actually made or not);

 

“Drawdown Notice” means a notice substantially in the terms
of Error!
Reference source not found.;

 

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

 

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

 

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

 

“Environmental Affiliate” means any agent or employee of either
Borrower or any other Relevant Party or any person having a contractual
relationship with either Borrower or any other Relevant Party in connection
with any Relevant Ship or its operation or the carriage of cargo and/or
passengers thereon and/or the provision of goods and/or services on or from any
Relevant Ship;

 

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

 

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

 

4

 

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

 

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

 

“First Advance”:

 

(a)           in relation to the Santon Ship
and the Santon Tranche, means the Santon First Advance; or

 

(b)           in relation to the Tasman Ship
and the Tasman Tranche, means the Tasman First Advance,

 

and “First Advances” means either or both of them;

 

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

 

“Flag State” means, in relation to each Ship, such state or
territory designated in writing by the Bank in its absolute discretion, at the
request of the relevant Borrower, as being the “Flag State”
of such Ship for the purposes of the relevant Ship Security Documents or such
other state or territory designated in writing by the Bank in its absolute
discretion, at the request of a Borrower as being the “Flag State” of such Borrower’s
Ship for the purpose of the Security Documents;

 

“Fourth Advance”:

 

(a)           in relation to the Santon
Ship and the Santon Tranche, means the Santon Fourth Advance; or

 

(b)           in relation to the Tasman
Ship and the Tasman Tranche, means the Tasman Fourth Advance,

 

and “Fourth Advances” means either or both of them;

 

“General Assignment” means:

 

(a)           in relation to the Santon
Ship, the Santon General Assignment; or

 

(b)           in relation to the Tasman Ship, the Tasman General Assignment,

 

and “General Assignments” means either or both of them;

 

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

 

“Holding Corporate Guarantee” means the corporate guarantee
executed or (as the context may require) to be executed by the Corporate
Guarantor in favour of the Bank in the form set out in schedule 5;

 

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

 

5

 

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

 

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

 

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

 

“Iota” means Iota Corporation, a corporation duly organised
and existing under the laws of the Republic of Liberia having its registered
office at 80 Broad Street, Monrovia, Republic of Liberia and includes its
successors in title;

 

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

 

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

 

“LIBOR” means,
in relation to any amount and for any period, the offered rate (if any) for
deposits of Dollars for such amount and for such period which is:

 

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

 

(b)           if on such date no such rate is displayed, the rate quoted to the Bank
by the Reference Bank at the request of the Bank as the Reference Bank’s
offered rate for deposits of 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 to prime banks in the London Interbank Market at or about 11:00 a.m.
(London time) on the Quotation Date for such period;

 

“Listing Date” means the date when all the shares in the
Corporate Guarantor are successfully listed on the New York Stock Exchange;

 

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

 

“Management Agreement” means:

 

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

 

(b)           in relation to the Tasman Ship, the Tasman Management Agreement,

 

and “Management Agreements” means either or both of them;

 

“Manager” means, in relation to each Ship, Aegean Bunkering
Services Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands MH96960 or any other

 

6

 

person
appointed by the relevant Borrower, with the prior written consent of the Bank,
as the manager of such Ship and, in each such case, includes its successors in
title;

 

“Manager Corporate Guarantee” means the corporate guarantee
executed or (as the context may require) to be executed by the Manager in
favour of the Bank in the form set out in schedule 5;

 

“Manager’s Undertaking” means:

 

(a)           in
relation to the Santon Ship, the Santon Manager’s Undertaking; or

 

(b)           in
relation to the Tasman Ship, the Tasman Manager’s Undertaking,

 

and “Manager’s Undertakings” means either or both of them;

 

“Margin” means:

 

(c)           in
relation to each Tranche minus the part thereof which is repayable by the
Balloon Instalment for such Tranche, one point one five per cent (1.15%) per
annum; and

 

(d)           in
relation to the part of each Tranche which is repayable by the Balloon
Instalment for such Tranche, one point two five per cent (1.25%) per annum;

 

“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 the
period started on the last Banking Day in a calendar month or if there is no
such numerically corresponding day, it shall end on the last Banking Day in
such next calendar month and (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:

 

(a)           in relation to the Santon Ship,
the Santon Mortgage; or

 

(b)           in relation to the Tasman Ship, the Tasman Mortgage,

 

and “Mortgages” means either or both of them;

 

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

 

“Operating Account” means:

 

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

 

(b)           in relation to the Tasman Ship,
the Tasman Operating Account,

 

and “Operating Accounts” means either or both of them;

 

“Operating Account Pledge” means:

 

7

 

(e)           in
relation to the Santon Ship, the Santon Operating Account Pledge; or

 

(f)            in
relation to the Tasman Ship, the Tasman Operating Account Pledge,

 

and “Operating Account Pledges” means either or both of them;

 

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

 

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

 

“Permitted Liens” means, in relation to each Ship, any lien
on that Ship for master’s, officer’s or crew’s wages outstanding in the
ordinary course of trading, any lien for salvage and any ship repairer’s or
outfitter’s possessory lien for a sum not (except with the prior written
consent of the Bank) exceeding the relevant Casualty Amount;

 

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

 

“Pre-delivery Advances”:

 

(a)           in relation to the Santon Ship
and the Santon Tranche, means the Santon Pre-delivery Advances; or

 

(b)           in relation to the Tasman Ship
and the Tasman Tranche, means the Tasman Pre-delivery Advances,

 

and “Pre-delivery Advance” means any of them;

 

“Pre-delivery Security Assignment” means:

 

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

 

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

 

and “Pre-delivery Security Assignments” means either or both of
them;

 

“Quotation Date” means, in respect of any period in respect
of which LIBOR falls to be determined under this Agreement, the day falling two
(2) Banking Days before the first day of such period;

 

“Reference Bank” means the London Branch of National Bank of
Greece S.A. situated at present at 50 St Mary Axe, London EC3A 8EL, England;

 

“Refund Guarantee” means:

 

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

 

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

 

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

 

“Refund Guarantee Assignment Consent and Acknowledgement”
means:

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

“Related Company” means:

 

(a)           of the Bank, means any Subsidiary of the Bank, any
company or other entity of which the Bank is a Subsidiary and any Subsidiary of
any such company or entity; or

 

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

 

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

 

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

 

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

 

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

 

“Relevant Party” means the Borrowers, the Borrowers’ Related
Companies, the other Security Parties and their respective Related Companies;

 

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

 

“Repayment Dates” means, in relation to each Tranche (and subject
to clause 6.3), the First Repayment Date in respect such Tranche and each
of the dates falling at three (3) monthly intervals after such First
Repayment Date up to and including the earlier of (a) the date falling one
hundred and seventeen (117) months after such First Repayment Date and (b) in
the case of the Tasman Tranche, 30 November 2018 or, in the case of the
Santon Tranche, 30 April 2020;

 

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

 

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

 

9

 

“Retention Account Pledge” means a first priority pledge
executed or (as the context may require) to be executed by the Borrowers in
favour of the Bank in respect of the Retention Account in such form as the Bank
may in its sole discretion require;

 

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

 

(a)           one-third
(1/3rd) of the repayment instalment in
respect of such Tranche falling due for payment pursuant to clause 4.1 (as
the same may have been reduced by any prepayment) on the next Repayment Date
for such Tranche after the relevant Retention Date; and

 

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

 

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

 

“Santon Additional Cost” means One million six hundred
thousand Dollars ($1,600,000) or such other lesser sum in Dollars as may be
payable by the Santon Borrower to Iota pursuant to the Santon Supervision
Contract, as the cost for services provided by Iota thereunder;

 

“Santon Additional Cost Advance” means an Advance of up to
$1,280,000 made or (as the context may require) to be made available to the
Borrowers for the purpose of financing and/or refinancing part of the Santon
Additional Cost;

 

“Santon  Advances”
means, together, the Santon Pre-delivery Advances, the Santon Additional Cost
Advance and the Santon Delivery Advance and “Santon
Advance” means any of them;

 

“Santon  Borrower” means
Santon Limited of 80 Broad Street, Monrovia, Republic of Liberia and includes
its successors in title;

 

“Santon Construction Cost” means the aggregate of (a) the
Santon Contract Price and (b) the Santon Additional Cost;

 

“Santon Contract” means the shipbuilding contract dated 13 January 2006,
made between the Builder and the Santon Borrower, as may be amended,
supplemented, varied, replaced or novated from time to time with the prior
written consent of the Bank, relating to the construction and sale by the
Builder, and the purchase by the Santon Borrower, of the Santon Ship;

 

“Santon  Contract Assignment
Consent and Acknowledgement” means the acknowledgement of notice of,
and consent to, the assignment in respect of the Santon Contract to be given by
the Builder in the form scheduled to the Santon Pre-delivery Security
Assignment;

 

“Santon  Contract Price”
means Nine million four hundred thousand Dollars ($9,400,000) or such other
lesser sum in Dollars as may be payable by the Santon Borrower to the Builder
pursuant to the Santon Contract, as the purchase price for the Santon Ship
thereunder;

 

“Santon Delivery Advance” means an Advance of up to One million
eight hundred and eighty thousand Dollars ($1,880,000) made or (as the context
may require) to be made available to the Borrowers for the purpose of financing
or refinancing in part the final instalment of the Santon Contract Price
falling due on the Delivery Date for the Santon Ship;

 

10

 

“Santon First Advance” means an Advance of up to Seven
hundred and fifty two thousand Dollars ($752,000) made or (as the context may
require) to be made available to the Borrowers for the purpose of refinancing
in part the payment of the first instalment of the Santon Contract Price
falling due before the Delivery Date of the Santon Ship as set out in schedule 3;

 

“Santon Fourth Advance” means an Advance of up to One million
eight hundred and eighty thousand Dollars ($1,880,000) made or (as the context
may require) to be made available to the Borrowers for the purpose of financing
or refinancing in part the payment of the fourth instalment of the Santon
Contract Price falling due before the Delivery Date of the Santon Ship as set
out in schedule 3;

 

“Santon  General Assignment”
means the first priority deed of covenant and/or general assignment collateral
to the Santon Mortgage executed or (as the context may require) to be executed
by the Santon Borrower in favour of the Bank in such form as the Bank may require
in its sole discretion;

 

“Santon  Management Agreement”
means the management agreement made or (as the context may require) to be made
between the Santon Borrower and the Manager in a form previously approved in
writing by the Bank providing (inter alia) for
the Manager to manage the Santon Ship;

 

“Santon  Manager’s Undertaking”
means the first priority undertaking and assignment in relation to the Santon
Ship executed or (as the context may require) to be executed by the Manager in
favour of the Bank in such form as the Bank may require in its sole discretion;

 

“Santon  Mortgage” means
the first priority or (as the case may be) preferred mortgage of the Santon
Ship executed or (as the context may require) to be executed by the Santon
Borrower in favour of the Bank in such form as the Bank may require in its sole
discretion;

 

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

 

“Santon  Operating Account Pledge”
means a first priority pledge executed or (as the context may require) to be
executed by the Santon Borrower in favour of the Bank in respect of the Santon
Operating Account in such form as the Bank may in its sole discretion require;

 

“Santon  Pre-delivery Advances”
means, together, the Santon First Advance, the Santon Second Advance, the
Santon Third Advance and the Santon Fourth Advance and “Santon
Pre-delivery Advance” means any of them;

 

“Santon  Pre-delivery Security
Assignment” means the assignment of the Santon Contract and the
Santon Refund Guarantees executed or (as the context may require) to be
executed by the Santon Borrower in favour of the Bank in the form set out in schedule 4;

 

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

 

“Santon  Refund Guarantees”
means, together, the letter of guarantee no. LGG03102000600010 dated 17 March 2006
issued by Bank of Communications, Qingdao Branch as Refund Guarantor in respect
of certain of the Builder’s obligations under the Santon Contract and any other
letters of guarantee to be issued by a Refund Guarantor in respect of the
Builder’s obligations under the Santon Contract, pursuant to the Santon
Contract or any agreement supplemental to the Santon Contract, and any
extensions, renewals or replacements

 

11

 

to or
of any such guarantee(s), in each case in form and substance acceptable to the
Bank in its sole discretion and “Santon  Refund Guarantee” means any of them;

 

“Santon Second Advance” means an Advance of up to One million
five hundred and four thousand Dollars ($1,504,000) made or (as the context may
require) to be made available to the Borrowers for the purpose of financing or
refinancing in part the payment of the second instalment of the Santon Contract
Price falling due before the Delivery Date of the Santon Ship as set out in schedule 3;

 

“Santon  Ship” means the
5,500 dwt (approximately) double-hull oil tanker known on the date of this
Agreement as Hull No. QHS-224 at the Builder’s yard, to be constructed and
sold by the Builder to the Santon Borrower pursuant to the Santon Contract and
to be registered on its Delivery Date in the ownership of the Santon Borrower
through the relevant Registry under the laws and flag of the relevant Flag
State;

 

“Santon  Supervision Contract”
means the contract dated 24 February 2006 made between the Santon Borrower
and Iota as may be amended, supplemented, varied, replaced or novated from time
to time with the prior written consent of the Bank, relating to the design,
building supervision, representation, procurement of machinery and supplies and
turn-key delivery of the Santon Ship;

 

“Santon Third Advance” means an Advance of up to One million
five hundred and four thousand Dollars ($1,504,000) made or (as the context may
require) to be made available to the Borrowers for the purpose of financing or
refinancing in part the payment of the third instalment of the Santon Contract
Price falling due before the Delivery Date of the Santon Ship as set out in schedule 3;

 

“Santon Tranche” means a tranche of the Loan of up to Eight
million eight hundred thousand Dollars ($8,800,000) drawn down or to be drawn
down in not more than six (6) Advances (being the Santon Advances);

 

“Second Advance”:

 

(a)           in relation to the Santon Ship
and the Santon Tranche, means the Santon Second Advance; or

 

(b)           in relation to the Tasman Ship
and the Tasman Tranche, means the Tasman Second Advance,

 

and “Second Advances” means either or both of them;

 

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

 

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

 

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

 

12

 

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

 

(a)           during the period
commencing on the earlier of (i) the Drawdown Date of the second Delivery
Advance to be drawn down and (ii) the last day of the last Drawdown Period
to elapse, and ending on the day falling twelve (12) months thereafter (the “Adjustment Date”), One hundred and eleven point eleven per
cent (111.11%) of the Loan; or

 

(b)           during the period
commencing on the day falling immediately after the First Adjustment Date and
ending on the day when all amounts owing under this Agreement and the other
Security Documents have been paid in full, One hundred and twenty five per cent
(125%) of the Loan;

 

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

 

“Ships” means, together, the Santon Ship and the Tasman Ship
and “Ship” means either of them;

 

“Ship Security Documents”:

 

(a)           in relation to the Santon Ship,
means the Santon Mortgage, the Santon General Assignment and the Santon Manager’s
Undertaking; or

 

(b)           in relation to the Tasman Ship,
means the Tasman Mortgage, the Tasman General Assignment and the Tasman Manager’s
Undertaking;

 

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

 

“Supervision Contract” means:

 

(a)           in
relation to the Santon Ship, the Santon Supervision Contract; or

 

(b)           in
relation to the Tasman Ship, the Tasman Supervision Contract,

 

and “Supervision Contracts” means either or both of them;

 

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

 

“Tasman Additional Cost” means One million six hundred
thousand Dollars ($1,600,000) or such other lesser sum in Dollars as may be
payable by the Tasman Borrower to Iota pursuant to the Tasman Supervision
Contract, as the cost for services provided by Iota thereunder;

 

“Tasman Additional Cost Advance” means an Advance of up to
$1,280,000 made or (as the context may require) to be made available to the
Borrowers for the purpose of financing and/or refinancing part of the Tasman
Additional Cost;

 

“Tasman Advances” means, together, the Tasman Pre-delivery
Advances, the Tasman Additional Cost Advance and the Tasman Delivery Advance
and “Tasman Advance” means any of them;

 

13

 

“Tasman Borrower” means Tasman Seaways Inc. of 80 Broad
Street, Monrovia, Republic of Liberia and includes its successors in title;

 

“Tasman Construction Cost” means the aggregate of (a) the
Tasman Contract Price and (b) the Tasman Additional Cost;

 

“Tasman Contract” means the shipbuilding contract dated 13 January 2006,
made between the Builder and the Tasman Borrower, as may be amended,
supplemented, varied, replaced or novated from time to time with the prior
written consent of the Bank, relating to the construction and sale by the
Builder, and the purchase by the Tasman Borrower, of the Tasman Ship;

 

“Tasman Contract Assignment Consent and Acknowledgement”
means the acknowledgement of notice of, and consent to, the assignment in
respect of the Tasman Contract to be given by the Builder in the form scheduled
to the Tasman Pre-delivery Security Assignment;

 

“Tasman Contract Price” means Nine million four hundred
thousand Dollars ($9,400,000) or such other lesser sum in Dollars as may be
payable by the Tasman Borrower to the Builder pursuant to the Tasman Contract
as the purchase price for the Tasman Ship thereunder;

 

“Tasman Delivery Advance” means an Advance of up to One
million eight hundred and eighty thousand Dollars ($1,880,000) made or (as the
context may require) to be made available to the Borrowers for the purpose of
financing or refinancing in part the final instalment of the Tasman Contract
Price falling due on the Delivery Date of the Tasman Ship;

 

“Tasman First Advance” means an Advance of up to Seven
hundred and fifty two thousand Dollars ($752,000) made or (as the context may
require) to be made available to the Borrowers for the purpose of refinancing
in part the payment of the first instalment of the Tasman Contract Price
falling due before the Delivery Date of the Tasman Ship as set out in schedule 3;

 

“Tasman Fourth Advance” means an Advance of up to One million
eight hundred and eighty thousand Dollars ($1,880,000) made or (as the context
may require) to be made available to the Borrowers for the purpose of financing
or refinancing in part the payment of the fourth instalment of the Tasman
Contract Price falling due before the Delivery Date of the Tasman Ship as set
out in schedule 3;

 

“Tasman General Assignment” means the first priority deed of
covenant and/or general assignment collateral to the Tasman Mortgage executed
or (as the context may require) to be executed by the Tasman Borrower in favour
of the Bank in such form as the Bank may require in its sole discretion;

 

“Tasman Management Agreement” means the management agreement
made or (as the context may require) to be made between the Tasman Borrower and
the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Tasman Ship;

 

“Tasman Manager’s Undertaking” means the first priority
undertaking and assignment in relation to the Tasman Ship executed or (as the
context may require) to be executed by the Manager in favour of the Bank in
such form as the Bank may require in its sole discretion;

 

“Tasman Mortgage” means the first priority or (as the case
may be) preferred mortgage of the Tasman Ship executed or (as the context may
require) to be executed by the Tasman Borrower in favour of the Bank in such
form as the Bank may require in its sole discretion;

 

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

 

14

 

“Tasman  Operating Account Pledge”
means a first priority pledge executed or (as the context may require) to be
executed by the Tasman Borrower in favour of the Bank in respect of the Tasman
Operating Account in such form as the Bank may in its sole discretion require;

 

“Tasman Pre-delivery Advances” means, together, the Tasman
First Advance, the Tasman Second Advance, the Tasman Third Advance and the
Tasman Fourth Advance and “Tasman Pre-delivery
Advance” means any of them;

 

“Tasman Pre-delivery Security Assignment” means the
assignment of the Tasman Contract and the Tasman Refund Guarantees executed or
(as the context may require) to be executed by the Tasman Borrower in favour of
the Bank in the form set out in schedule 4;

 

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

 

“Tasman Refund Guarantees” means, together, the letter of
guarantee no. LGG0310200600007 dated 17 March 2006 issued by Bank of
Communications, Qingdao Branch as Refund Guarantor in respect of certain of the
Builder’s obligations under the Tasman Contract and any other letters of
guarantee to be issued by a Refund Guarantor in respect of the Builder’s
obligations under the Tasman Contract, pursuant to the Tasman Contract or any
agreement supplemental to the Tasman Contract, and any extensions, renewals or
replacements to or of any such guarantee(s), in each case in form and substance
acceptable to the Bank in its sole discretion and “Tasman Refund
Guarantee” means any of them;

 

“Tasman Second Advance” means an Advance of up to One million
five hundred and four thousand Dollars ($1,504,000) made or (as the context may
require) to be made available to the Borrowers for the purpose of financing or
refinancing in part the payment of the second instalment of the Tasman Contract
Price falling due before the Delivery Date of the Tasman Ship as set out in schedule 3;

 

“Tasman Ship” means the 5,500 dwt (approximately) double-hull
oil tanker known on the date of this Agreement as Hull No. QHS-221 at the
Builder’s yard, to be constructed and sold by the Builder to the Tasman
Borrower pursuant to the Tasman Contract and to be registered on its Delivery
Date in the ownership of the Tasman Borrower through the relevant Registry
under the laws and flag of the relevant Flag State;

 

“Tasman Supervision Contract” means the contract dated 24 February 2006
made between the Tasman Borrower and Iota as may be amended, supplemented,
varied, replaced or novated from time to time with the prior written consent of
the Bank, relating to the design, building supervision, representation,
procurement of machinery and supplies and turn-key delivery of the Tasman Ship;

 

“Tasman Third Advance” means an Advance of up to One million
five hundred and four thousand Dollars ($1,504,000) made or (as the context may
require) to be made available to the Borrowers for the purpose of financing or
refinancing in part the payment of the third instalment of the Tasman Contract
Price falling due before the Delivery Date of the Tasman Ship as set out in schedule 3;

 

“Tasman Tranche” means a tranche of the Loan of up to Eight
million eight hundred thousand Dollars ($8,800,000) drawn down or to be drawn
down in not more than six (6) Advances (being the Tasman Advances);

 

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

 

15

 

“Termination Date” means:

 

(a)           in
relation to the Santon Tranche and each Advance thereof, 30 April 2010;

 

(b)           in
relation to the Tasman Tranche and each Advance thereof, 30 November 2008,

 

or, in each
such case, such later date as the Borrowers may request and the Bank may in its
absolute discretion consent to;

 

“Third Advance”:

 

(a)           in relation to the Santon Ship
and the Santon Tranche, means the Santon Third Advance; or

 

(b)           in relation to the Tasman Ship
and the Tasman Tranche, means the Tasman Third Advance,

 

and “Third Advances” means either or both of them;

 

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

 

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

 

(b)           the Compulsory Acquisition of such Ship; or

 

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

 

“Tranche” means:

 

(a)           in
relation to the Santon Ship, the Santon Tranche; or

 

(b)           in
relation to the Tasman Ship, the Tasman Tranche,

 

and “Tranches” means either or both of them;

 

“Transferee” has the meaning ascribed thereto in clause 15.4;
and

 

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

 

1.3          Headings

 

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

 

1.4          Construction
of certain terms

 

In this
Agreement, unless the context otherwise requires:

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2              The Commitment and the Loan

 

2.1          Agreement
to lend

 

The
Bank, relying upon each of the representations and warranties in clause 7,
agrees to lend to the Borrowers, jointly and severally, upon and subject to the
terms of this Agreement, the principal sum of up to Seventeen million six
hundred thousand Dollars ($17,600,000) in up to twelve (12) Advances comprising
two (2) Tranches, namely, the Santon Tranche and the Tasman Tranche.

 

2.2          Drawdown

 

Subject
to the terms and conditions of this Agreement, each Advance shall be made
following receipt by the Bank from the Borrowers of a Drawdown Notice not later
than 10:00 a.m. on the second Banking Day before the date, which shall be
a Banking Day falling within the relevant Drawdown Period, on which such
Advance 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 3.6.1, be irrevocable.

 

2.3          Timing
and limitations of Loan, Tranches and Advances

 

2.3.1        The
aggregate amount of the Loan shall not exceed the lower of (a) Seventeen million
six hundred thousand Dollars ($17,600,000), (b) eighty per cent (80%) of
the aggregate Construction Costs of both of the Ships and (c) eighty per
cent (80%) of the aggregate of the market values of the Ships determined in
accordance with the valuations of the Ships obtained pursuant to schedule 2,
Part 6, paragraph 18.

 

2.3.2        The
aggregate amount of all the Advances for a Ship shall not exceed the lower of (a) Eight
million eight hundred thousand Dollars ($8,800,000), (b) eighty per cent (80%)
of the Construction Cost of the relevant Ship and (c) eighty per cent
(80%) of the market value of the relevant Ship determined in accordance with
the valuation of that Ship obtained pursuant to schedule 2, Part 6,
paragraph 18.

 

2.3.3        The
amount of each Pre-delivery Advance shall be:

 

(a)   in the case of each First Advance, not more than $752,000;

 

17

 

(b)   in the case of each Second Advance, not more than $1,504,000;

 

(c)   in the case of each Third Advance, not more than $1,504,000; and

 

(d)   in the case of each Fourth Advance, not more than $1,880,000.

 

2.3.4        Each
First Advance:

 

(a)   shall be applied in or towards payment to the Builder of part of the
first instalment of the Contract Price for the Ship relevant to such Advance;

 

(b)   shall be made when the instalment referred to in paragraph 2.3.4(a) above
has become due and payable, as specified in the second column of schedule 3
opposite the relevant First Advance; and

 

(c)   shall be paid by the Bank to the Builder, unless the relevant
Borrower has already paid the relevant first instalment to the Builder when it
was due, in which case the relevant First Advance (or part thereof) shall be
advanced to the Borrowers in refinancing of such payment.

 

2.3.5        Each
Second Advance:

 

(a)   shall be applied in or towards payment to the Builder of part of the
second instalment of the Contract Price for the Ship relevant to such Advance;

 

(b)   shall be made when the instalment referred to in paragraph 2.3.5(a) above
has become due and payable, as specified in the second column of schedule 3
opposite the relevant Second Advance; and

 

(c)   shall be paid by the Bank to the Builder, unless the relevant
Borrower has already paid the relevant second instalment to the Builder when it
was due, in which case the relevant Second Advance (or part thereof) shall be
advanced to the Borrowers in refinancing of such payment.

 

2.3.6        Each
Third Advance:

 

(a)   shall be applied in or towards payment to the Builder of part of the
third instalment of the Contract Price for the Ship relevant to such Advance;

 

(b)   shall be made when the instalment referred to in paragraph 2.3.6(a) above
has become due and payable, as specified in the second column of schedule 3
opposite the relevant Third Advance; and

 

(c)   shall be paid by the Bank to the Builder unless the relevant
Borrower has already paid the relevant third instalment to the Builder when it
was due, in which case the relevant Third Advance (or part thereof) shall be
advanced to the Borrowers in refinancing of such payment.

 

2.3.7        Each
Fourth Advance

 

(a)   shall be applied in or towards payment to the Builder of part of the
fourth instalment of the Contract Price for the Ship relevant to such Advance;

 

(b)   shall be made when the instalment referred to in paragraph 2.3.7(a) above
has become due and payable, as specified in the second column of schedule 3
opposite the relevant Fourth Advance; and

 

(c)   shall be paid by the Bank to the Builder, unless the relevant
Borrower has already paid the relevant fourth instalment to the Builder when it
was due, in which case the relevant

 

18

 

Fourth Advance (or part thereof) shall be
advanced to the Borrowers in refinancing of such payment.

 

2.3.8        Each
Delivery Advance:

 

(a)   shall not exceed the lower of:

 

(i)    One million eight hundred and eighty thousand Dollars ($1,880,000);

 

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

 

(iii)  the amount in Dollars which, when added to the aggregate amount of
the Pre-delivery Advances for the relevant Ship actually drawn down, will
produce a figure equal to eighty per cent (80%) of the market value of that Ship
determined in accordance with the valuation of such Ship obtained pursuant to schedule 2,
Part 6, paragraph 18; and

 

(iv)  the amount in Dollars which, when added to the aggregate amount of
the Pre-delivery Advances for the relevant Ship actually drawn down, will
produce a total figure of $7,520,000;

 

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

 

(c)   shall be made when the instalment referred to in paragraph 2.3.8(b)(i) above
has become due and payable; and

 

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

 

2.3.9        Each
Additional Cost Advance:

 

(a)   shall not exceed the lower of (i) One million two hundred and
eighty thousand Dollars ($1,280,000) and (ii) eighty per cent (80%) of the
Additional Cost of the Ship relevant to such Additional Cost Advance;

 

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

 

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

 

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

 

2.4          Availability

 

Upon
receipt of a Drawdown Notice complying with the terms of this Agreement the
Bank shall, subject to the provisions of clause 9, on the date specified
in the Drawdown Notice, make the relevant Advance available to the Borrowers in
accordance with clause 6.2.  The
Borrowers acknowledge that payment of any Advance to Iota or, as the case may
be, the Builder, in accordance with clause 6.2 shall satisfy the
obligation of the Bank to lend that Advance to the Borrowers under this
Agreement.

 

19

 

2.5          Termination
of Commitment

 

Any
part of the Commitment undrawn and uncancelled by the relevant Termination
Date, shall thereupon be automatically cancelled.

 

2.6          Application
of proceeds

 

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

 

3              Interest and Interest Periods

 

3.1          Normal
interest rate

 

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

 

3.2          Selection
of Interest Periods

 

The Borrowers
may by notice received by the Bank not later than 10:00 a.m. on the second
Banking Day before the beginning of each Interest Period, specify whether such
Interest Period shall have a duration of one (1) month, three (3) months,
six (6) months, nine (9) months or twelve (12) months or such other shorter
period as the Borrowers may select and the Bank may, in its absolute
discretion, agree.

 

3.3          Determination
of Interest Periods

 

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

 

3.3.1        the
initial Interest Period in respect of each Advance shall commence on the
Drawdown Date of such Advance and each subsequent Interest Period in respect
thereof shall commence on the last day of the previous Interest Period for such
Advance;

 

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

 

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

 

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

 

20

 

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 on demand from
the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Bank pursuant to this clause 3.4.  The period beginning on such due date and
ending on such date of payment shall be divided into successive periods of not
more than six (6) months as 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 (a) two per cent (2%) per annum, (b) the Margin and (c) LIBOR
for such period.  Such interest shall be
due and payable on the last day of each such period as determined by the 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 an amount of
principal which became due and payable by reason of a declaration by the Bank
under clause 10.2.2 or a prepayment pursuant to clauses 4.3, 8.2 or
12.1, on a date other than an Interest Payment Date relating thereto, the first
such period selected by the Bank shall be of a duration equal to the period
between the due date of such principal sum and such Interest Payment Date and
interest shall be payable on such principal sum during such period at a rate two
per cent (2%) above the rate applicable thereto immediately before it shall
have become so due and payable.  If, for
the reasons specified in clause 3.6.1, the Bank is unable to determine a
rate in accordance with the foregoing provisions of this clause 3.4,
interest on any sum not paid on its due date for payment shall be calculated at
a rate determined by the Bank to be two per cent (2%) per annum above the
aggregate of the Margin and the cost of funds to the Bank.

 

3.5          Notification
of Interest Periods and interest rate

 

The
Bank shall notify the Borrowers promptly of the duration of each Interest
Period and of each rate of interest determined by it under this clause 3.

 

3.6          Market
disruption; non-availability

 

3.6.1        If
and whenever, at any time prior to the commencement of any Interest Period, the
Bank shall have determined (which determination shall, in the absence of
manifest error, be conclusive):

 

(a)   that adequate and fair means do not exist for ascertaining LIBOR
during such Interest Period; or

 

(b)   that deposits in Dollars are not available to the Bank in the London
Interbank Market in the ordinary course of business in sufficient amounts to
fund the Loan for such 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.

 

3.6.2        During
the period of ten (10) days after any Determination Notice has been given
by the Bank under clause 3.6.1, the Bank shall certify an alternative
basis (the “Substitute Basis”) for maintaining
the Loan.  The Substitute Basis may
(without limitation) include alternative interest periods, alternative
currencies or alternative rates of interest but shall include a margin above
the cost of funds to the Bank equivalent to the 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 3.6.1
continues to exist whereupon the normal interest rate fixing provisions of this
Agreement shall apply.

 

21

 

4              Repayment and prepayment

 

4.1          Repayment

 

The
Borrowers shall repay each Tranche by forty (40) instalments, one such
instalment to be repaid on each of the Repayment Dates for such Tranche.  Subject to the provisions of this Agreement,
the amount of each of the repayment instalments (other than the last repayment
instalment) for each Tranche shall be One hundred and fifty four thousand
Dollars ($154,000) and the amount of the last repayment instalment for each
Tranche shall be Two million seven hundred and ninety four thousand Dollars
($2,794,000) (comprising a repayment instalment of One hundred and fifty four
thousand Dollars ($154,000) and a balloon payment of Two million six hundred
and forty thousand Dollars ($2,640,000) (each such balloon payment in relation
to a Tranche, the “Balloon Instalment”
for that Tranche)).  If the Commitment in
respect of either Tranche or part thereof is not drawn in full, the amount of the
repayment instalments in respect of the relevant Tranche (including the
relevant Balloon Instalment) shall be reduced proportionately.

 

4.2          Voluntary
prepayment

 

The Borrowers
may prepay either Tranche in whole or part (being One hundred thousand Dollars ($100,000)
or any larger sum which is an integral multiple of One hundred thousand Dollars
($100,000)) on any Interest Payment Date relating to the part of the Tranche to
be prepaid, without premium or penalty.

 

4.3          Prepayment
on Total Loss or demand under Refund Guarantees

 

4.3.1        Before
first drawdown - Ships

 

On a Ship
becoming a Total Loss or suffering damage or being involved in an incident
which, in the opinion of the Bank, may result in such Ship being subsequently
determined to be a Total Loss, before any Advance for such Ship is drawn down,
the obligation of the Bank to advance the Tranche (or part thereof) for such Ship
shall immediately cease and the Commitment shall be reduced accordingly.

 

4.3.2        After
first drawdown but prior to Delivery - Ships

 

(a)   On a Ship becoming a Total Loss or suffering damage or being
involved in an incident which, in the opinion of the Bank, may result in such Ship
being subsequently determined to be a Total Loss, after any Advance for such Ship
has been drawn down but prior to the drawing of the Delivery Advance for such Ship,
the obligation of the Bank to advance any other Advance (or part thereof) for
such Ship shall immediately cease, the Commitment shall be reduced accordingly
and the Borrowers shall prepay the outstanding Pre-delivery Advances for such Ship
in full.

 

(b)   If a claim is made under any Refund Guarantee and such claim is not
paid within twenty (20) Banking Days of it being made (whether or not such
claim has been referred to the appropriate courts pursuant to the relevant
Refund Guarantee), then (a) the obligation of the Bank to advance any
other Advance (or any part thereof) for the Ship relevant to such Refund
Guarantee shall immediately cease and (b) forthwith on the expiry of such
twenty (20) day period the Borrowers shall prepay in full the then outstanding Advances
in respect of that Ship Provided however that
if the relevant claim made under the Contract to which such Refund Guarantee
relates has been referred to arbitration under the terms of such Contract, the
time-limit (and the corresponding prepayment obligation of the Borrowers)
referred to in paragraph (b) of this clause shall be extended to ninety (90)
days of the claim under the relevant Refund Guarantee being made.

 

4.3.3        Thereafter -
Mortgaged Ships

 

(a)   On the date falling one hundred and twenty (120) days after that on
which a Mortgaged Ship became a Total Loss or, if earlier, on the date upon
which the insurance proceeds

 

22

 

in respect of
such Total Loss are, or Requisition Compensation for such Mortgaged Ship is,
received by the relevant Borrower (or the Bank pursuant to the Security
Documents), the Borrowers shall prepay an amount equal to the higher of (i) the
Tranche for such Mortgaged Ship in full (subject to clause 4.3.3(b)) and (ii) the
amount of insurance proceeds or Requisition Compensation actually received by
the relevant Borrower (or the Bank pursuant to the Security Documents) in
respect of such Total Loss.

 

(b)   Notwithstanding sub-paragraph (a) of this clause 4.3.3, if an
Event of Default shall have occurred and be continuing at the time the relevant
Mortgaged Ship becomes a Total Loss, the Borrowers shall, on the date specified
in such paragraph (a), prepay such part of the Loan as the Bank may require in
its sole discretion.

 

4.3.4        Interpretation

 

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

 

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

 

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

 

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

 

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

 

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

 

4.4          Amounts
payable on prepayment

 

Any
prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date
of such prepayment, (b) any additional amount payable under clauses 6.6
or 12.2 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 accrued commitment commission payable under clause 5.1.2
and any amounts payable under clause 11.

 

4.5          Notice
of prepayment; reduction of repayment instalments

 

4.5.1        No
prepayment may be effected under clause 4.2 unless the Borrowers shall
have given the Bank at least ten (10) days’ notice of their intention to
make such prepayment.  Every notice of
prepayment shall be effective only on actual receipt by the Bank, shall be
irrevocable, shall specify the Tranche and the amount thereof to be prepaid and
shall oblige the Borrowers to make such prepayment on the date specified.

 

4.5.2        Any
amount prepaid pursuant to clause 4.2 in respect of a Tranche shall be
applied in reducing the repayment instalments of the relevant Tranche
(including the relevant Balloon Instalment) under clause 4.1 in inverse
order of their due dates for payment or in any other manner requested in
writing by the Borrowers and agreed in writing by the Bank.

 

23

 

4.5.3        Any
amount prepaid pursuant to clause 4.3.3(a)(ii) or clause 4.3.3(b) shall
be applied in reducing such Advances and/or the repayment instalments of such
Tranches, and in such manner, as the Bank may require in its absolute
discretion.

 

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

 

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

 

5              Fees, commitment commission and expenses

 

5.1          Fees

 

The
Borrowers shall pay to the Bank:

 

5.1.1        on
or prior to the date of this Agreement, an arrangement fee of Fifty two thousand
eight hundred Dollars ($52,800) (receipt of which is hereby acknowledged by the
Bank on 25 April 2006); and

 

5.1.2        on
each of the dates falling at three (3) monthly intervals after the date of
this Agreement until the earlier of (i) the last day of the last Drawdown
Period to elapse and (ii) the Drawdown Date of the last Delivery Advance
to be drawn down, and on the earlier of such two dates, commitment commission
computed from the date of this Agreement (in the case of the first payment of
commission) and from the date of the preceding payment of commission (in the
case of each subsequent payment) at the rate of zero point three five per cent
(0.35%) per annum on the daily undrawn amount of the Commitment.

 

The fee
referred to in clause 5.1.1 and the commitment commission referred to in clause 5.1.2
shall be non-refundable and shall be payable by the Borrowers to the Bank
whether or not any part of the Commitment is ever advanced.

 

5.2          Expenses

 

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

 

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

 

5.2.2        in
contemplation of, or otherwise in connection with, the enforcement of, or
preservation of any rights under, any of the Security Documents, or otherwise
in respect of the moneys owing under any of the Security Documents,

 

together
with interest at the rate referred to in clause 3.4 from the date on which
such expenses were incurred to the date of payment (as well after as before
judgment).

 

5.3          Value
Added Tax

 

All
fees, commitment commission and expenses payable pursuant to this clause 5
shall be paid together with value added tax or any similar tax (if any)
properly chargeable thereon.  Any value
added tax chargeable in respect of any services supplied by the Bank under this
Agreement shall, on delivery of the value added tax invoice, be paid in
addition to any sum agreed to be paid hereunder.

 

24

 

5.4          Stamp
and other duties

 

The
Borrowers shall pay all stamp, documentary, registration or other like duties
or taxes imposed on or in connection with any of the Underlying Documents, the
Security Documents or the Loan and shall indemnify the Bank against any
liability arising by reason of any delay or omission by the Borrowers to pay
such duties or taxes.

 

6              Payments and taxes; accounts and
calculations

 

6.1          No
set-off or counterclaim

 

The
Borrowers acknowledge that in performing its obligations under this Agreement,
the Bank will be incurring liabilities to third parties in relation to the
funding of amounts to the Borrowers, such liabilities matching the liabilities
of the Borrowers to the Bank and that it is reasonable for the Bank to be entitled
to receive payments from the Borrowers gross on the due date in order that the
Bank is put in a position to perform its matching obligations to the relevant
third parties.  Accordingly, all payments
to be made by the Borrowers under any of the Security Documents shall be made
in full, without any set-off or counterclaim whatsoever and, subject as
provided in clause 6.6, free and clear of any deductions or withholdings,
in Dollars (except for charges or expenses which shall be paid in the currency
in which they are incurred) on the due date (for value on the day on which
payment is due) to such account at such bank and in such place as the Bank may
from time to time specify for this purpose.

 

6.2          Payment
by the Bank

 

All
sums to be advanced by the Bank to the Borrowers under this Agreement in
respect of an Advance shall be remitted in Dollars on the Drawdown Date for the
relevant Advance to the account specified in the Drawdown Notice for such
Advance.

 

6.3          Non-Banking
Days

 

When
any payment under any of the Security Documents would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be extended to the
next following Banking Day unless such Banking Day falls in the next calendar
month in which case payment shall be made on the immediately preceding Banking
Day.

 

6.4          Calculations

 

All
interest and other payments of an annual nature under any of the Security
Documents shall accrue from day to day and be calculated on the basis of actual
days elapsed and a three hundred and sixty (360) day year.

 

6.5          Certificates
conclusive

 

Any
certificate or determination of the Bank as to any rate of interest, rate of
exchange 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.

 

6.6          Grossing-up
for Taxes

 

If at
any time the Borrowers are required to make any deduction or withholding in
respect of Taxes from any payment due under any of the Security Documents, the
sum due from the Borrowers in respect of such payment shall be increased to the
extent necessary to ensure that, after the making of such deduction or
withholding, the Bank receives on the due date for such payment (and retains,
free from any liability in respect of such deduction or withholding), a net sum
equal to the sum which it would have received had no such deduction or
withholding been required to be made and the Borrowers shall indemnify the Bank
against any losses or costs incurred by it 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 promptly deliver to the
Bank any receipts, certificates or other

 

25

 

proof
evidencing the amounts (if any) paid or payable in respect of any deduction or
withholding as aforesaid.

 

6.7          Loan
account

 

The
Bank shall maintain, in accordance with its usual practice, an account or
accounts evidencing the amounts from time to time lent by, owing and paid to,
it under the Security Documents.  Such
account or accounts shall, in the absence of manifest error, be conclusive as
to the amount from time to time owing by the Borrowers under the Security Documents.

 

7              Representations and warranties

 

7.1          Continuing
representations and warranties

 

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

 

7.1.1        Due
incorporation

 

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

 

7.1.2        Corporate
power

 

each of
the Borrowers has power to execute, deliver and perform its obligations under
the Borrowers’ Security Documents and the Underlying 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 and the Underlying 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 either Borrower to borrow will be exceeded as a result of
borrowing the Loan;

 

7.1.3        Binding
obligations

 

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

 

7.1.4        No
conflict with other obligations

 

the
execution and delivery of, the performance of their obligations under, and
compliance with the provisions of, the Underlying Documents and the Security
Documents by the relevant Security Parties will not (i) contravene any
existing applicable law, statute, rule or regulation or any judgment,
decree or permit to which either of the Borrowers or any other Security Party
is subject, (ii) conflict with, or result in any breach of any of the
terms of, or constitute a default under, any agreement or other instrument to
which either of the Borrowers or any other Security Party is a party or is
subject or by which it or any of its property is bound, (iii) contravene
or conflict with any provision of the constitutional documents of either of the
Borrowers or any other Security Party or (iv) result in the creation or
imposition of or oblige either of the Borrowers 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 other Security
Party;

 

7.1.5        No
litigation

 

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

 

26

 

financial
condition of either of the Borrowers or any of their Related Companies or any
other Security Party;

 

7.1.6        No
filings required

 

save
for (a) the registration of the Mortgages through the relevant Registry
and (b) the registration of each Refund Guarantee with the State
Administration for Foreign Exchange in the People’s Republic of China, it is
not necessary to ensure the legality, validity, enforceability or admissibility
in evidence of any of the Security Documents or any of the Underlying Documents
that they or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Relevant Jurisdiction
or that any stamp, registration or similar tax or charge be paid in any
Relevant Jurisdiction on or in relation to the Security Documents and the
Underlying Documents and each of the Security Documents and the Underlying
Documents is in proper form for its enforcement in the courts of each Relevant
Jurisdiction;

 

7.1.7        Choice
of law

 

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

 

7.1.8        No
immunity

 

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

 

7.1.9        Consents
obtained

 

every
consent, authorisation, licence or approval of, or registration with or
declaration to, governmental or public bodies or authorities or courts required
by any Security Party to authorise, or required by any Security Party in
connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of each of the Underlying Documents and the Security
Documents or the performance by each Security Party of its obligations under
the Underlying Documents and 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; and

 

7.1.10      Shareholdings

 

each of
the Borrowers and the Manager is a wholly-owned indirect Subsidiary of the
Corporate Guarantor and all of the shares in the Corporate Guarantor are
legally and ultimately beneficially owned by such persons as disclosed by or on
behalf of the Borrowers or any other Security Party to the Bank in the
negotiation of this Agreement.

 

7.2          Initial
representations and warranties

 

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

 

7.2.1        Pari
passu

 

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

 

27

 

7.2.2        No
default under other Indebtedness

 

neither
of the Borrowers nor any of their respective Related Companies nor any other
Security Party is (nor would with the giving of notice or lapse of time or the
satisfaction of any other condition or combination thereof be) in breach of or
in default under any other agreement relating to Indebtedness to which it is a
party or by which it may be bound;

 

7.2.3        Information

 

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

 

7.2.4        No
withholding Taxes

 

no
Taxes are imposed by withholding or otherwise on any payment to be made by any
Security Party under the Underlying Documents or the Security Documents or are
imposed on or by virtue of the execution or delivery by the Security Parties of
the Underlying Documents or the Security Documents or any other document or
instrument to be executed or delivered under any of the Security Documents;

 

7.2.5        No
Default

 

no
Default has occurred and is continuing;

 

7.2.6        No
Default under Contracts, Supervision Contracts or Refund Guarantees

 

neither
Borrower is in default of any of its obligations under the relevant Contract or
the relevant Supervision Contract or any of its obligations upon the
performance or observance of which depend the continued liability of any Refund
Guarantor in accordance with the terms of any Refund Guarantee relating to such
Borrower’s Ship;

 

7.2.7        No
Encumbrance in respect of pre-delivery security

 

neither
Borrower has previously charged, encumbered or assigned the benefit of any of
its rights, title and interest in or to the Contract or the Supervision
Contract or any Refund Guarantee relating to such Borrower’s Ship and such
benefit and all such rights, title and interest are freely assignable and
chargeable in the manner contemplated by the Security Documents;

 

7.2.8        The
Ships

 

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

 

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

 

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

 

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

 

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

 

7.2.9        Ships’
employment

 

neither
of the Ships is, nor will be, on the Drawdown Date of the relevant Delivery
Advance, subject to any charter or contract or to any agreement to enter into
any charter or contract which,

 

28

 

if
entered into after the date of the relevant Ship Security Documents would have
required the consent of the Bank and, on or before the Drawdown Date of the
Delivery Advance relevant to a Ship, there will not be any agreement or
arrangement whereby the Earnings of that Ship may be shared with any other
person;

 

7.2.10      Freedom from Encumbrances

 

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

 

7.2.11      Compliance with Environmental
Laws and Approvals

 

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

 

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

 

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

 

(c)   neither the Borrowers nor any other Relevant Party nor, to the best
of the Borrowers’ knowledge and belief (having made due enquiry), any of their
respective Environmental Affiliates has received notice of any Environmental
Claim that the Borrowers or either of them or any other Relevant Party or any
such Environmental Affiliate is not in compliance with any Environmental Law or
any Environmental Approval;

 

7.2.12      No Environmental Claims

 

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

 

7.2.13      No potential Environmental
Claims

 

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

 

7.2.14      No material adverse change

 

there
has been no material adverse change in the financial position of the Borrowers
or the Manager or the Corporate Guarantor or any other Relevant Party from that
described by the Borrowers to the Bank in the negotiation of this Agreement;

 

29

 

7.2.15      ISPS Code

 

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

 

7.2.16      Copies true and complete -
commissions

 

(a)   the copies of each of the Underlying Documents (other than the
Refund Guarantees) delivered or to be delivered to the Bank pursuant to clause 9.1
are, or will when delivered be, true and complete copies of such documents;
each of such document constitutes valid and binding obligations of the parties
thereto enforceable in accordance with its terms and there will have been no
amendments or variations thereof or defaults thereunder; and

 

(b)   there are no address or other commissions payable to either of the
Borrowers or any other Relevant Party on account of any of the Contracts and
the Supervision Contracts, except as disclosed in writing by or on behalf of
the Borrowers or any other Security Party to the Bank prior to the date of this
Agreement;

 

7.2.17      Refund Guarantees

 

the
original executed copy of each Refund Guarantee delivered or to be delivered to
the Bank pursuant to clause 9 is, or will when delivered be, a true and complete
original of such document; each such document will, when delivered, constitute
valid and binding obligations of the relevant Refund Guarantor enforceable in
accordance with its terms and there will have been no amendments or variations
thereof or defaults thereunder; and

 

7.2.18      Application for DOC and SMC

 

the
Operator maintains a DOC for itself and, on the Drawdown Date of the Delivery Advance
for a Ship, it will have applied, for an SMC in respect of such Ship, and
neither of the Borrowers nor the Operator is aware of any reason why any such
application may be refused.

 

7.3          Repetition
of representations and warranties

 

On and
as of each Drawdown Date and (except in relation to the representations and
warranties in clause 7.2) on each Interest Payment Date, the Borrowers
shall (a) be deemed to repeat the representations and warranties in clauses 7.1
and 7.2 as if made with reference to the facts and circumstances existing on
such day and (b) be deemed to further represent and warrant to the Bank
that the then latest audited financial statements delivered to the Bank (if
any) have been prepared in accordance with generally accepted international
accounting principles and practices which have been consistently applied and
present fairly and accurately the financial position of the Borrowers and the combined
financial position of the Borrowers, the Manager and their Related Companies as
at the end of the financial period to which the same relate and the results of
the operations of the Borrowers and the combined results of the operations of the
Borrowers, the Manager and their Related Companies for the financial period to
which the same relate, respectively, and, as at the end of such financial
period, neither the Borrowers nor the Manager nor any of their Related
Companies had any significant liabilities (contingent or otherwise) or any
unrealised or anticipated losses which are not disclosed by, or reserved
against or provided for in, such financial statements.

 

8              Undertakings

 

8.1          General

 

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

 

30

 

8.1.1        Notice
of Default

 

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

 

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

 

8.1.2        Consents
and licences

 

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

 

8.1.3        Use
of proceeds

 

use the
Loan or, as the case may be, the Advances exclusively for the purpose specified
in clauses 1.1 and 2.3;

 

8.1.4        Pari
passu

 

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

 

8.1.5        Financial
statements

 

prepare
or cause to be prepared financial statements of each of the Borrowers and combined
financial statements of the Borrowers, the Corporate Guarantor, the Manager and
their Related Companies in accordance with generally accepted international
accounting principles and practices consistently applied in respect of each
financial year and cause the same to be reported on by their respective
auditors and prepare or cause to be prepared unaudited financial statements of
each of the Borrowers and combined financial statements of the Borrowers, the
Corporate Guarantor, the Manager and their Related Companies in respect of each
financial half year on the same basis as the annual statements and deliver to
the Bank as many copies of the same as the Bank may reasonably require as soon
as practicable but not later than one hundred and eighty (180) days (in the
case of audited financial statements) and thirty (30) days (in the case of
unaudited financial statements) after the end of the financial period to which
they relate;

 

8.1.6        Delivery
of reports

 

deliver
to the Bank as many copies as the Bank may reasonably require of every report,
circular, notice or like document issued by the Borrowers, the Corporate
Guarantor, the Manager or any of their respective Related Companies to their
shareholders or creditors generally, in each case at the time of issue thereof;

 

31

 

8.1.7        Provision
of further information

 

provide
the Bank with such financial and other information (including, without
limitation, information relating to the Builder and the construction of the Ships)
concerning the Borrowers, the other Security Parties, the other Relevant Parties
and their respective affairs as the Bank may from time to time reasonably require
and shall promptly advise the Bank of all major financial developments in
relation to the Borrowers, the other Security Parties and their Related
Companies including, without prejudice to the generality of the foregoing, any
vessel sales or purchases or any new borrowings;

 

8.1.8        Obligations
under Security Documents

 

and
will procure that each of the other Security Parties will, duly and punctually
perform each of the obligations expressed to be assumed by it under the
Security Documents and the Underlying Documents;

 

8.1.9        Compliance
with Code

 

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

 

8.1.10      Withdrawal of DOC and SMC

 

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

 

8.1.11      Issuance of DOC and SMC

 

and
will procure that any Operator will, promptly inform the Bank upon the issuance
to any Operator of a DOC and to each Ship of an SMC or the receipt by either of
the Borrowers or any Operator of notification that its application for the same
has been refused;

 

8.1.12      ISPS Code compliance

 

and
will procure that the Manager or any Operator will:

 

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

 

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

 

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

 

8.1.13      “KYC” requirements

 

deliver to the Bank such
documents and evidence as the Bank shall from time to time require, based on
applicable law and regulations and the Bank’s own internal guidelines from time
to time, in each case, relating to the verification of identity and knowledge
of the Bank’s customers;

 

8.2          Security
value maintenance

 

8.2.1        Security
shortfall

 

If, at
any time after the earlier of (i) Drawdown Date of the second Delivery
Advance to be drawn down and (ii) the last day of the last Drawdown Period
to elapse, the Security Value shall be less than the Security Requirement, the
Bank may give notice to the Borrowers requiring that such deficiency be
remedied and then the Borrowers shall at its discretion either:

 

32

 

(a)   prepay within a period of fourteen (14) days of the date of receipt
by the Borrowers of the Bank’s said notice such sum in Dollars as will result
in the Security Requirement after such prepayment (taking into account any
other repayment made in accordance with clause 4.1 between the date of the
notice and the date of such prepayment) being at least equal to the Security
Value; or

 

(b)   within fourteen (14) days of the date of receipt by the Borrowers of
the Bank’s said notice constitute to the satisfaction of the Bank such further
security for the Loan as shall be acceptable to the Bank having a value for
security purposes (as determined by the Bank in its discretion) at the date
upon which such further security shall be constituted which, when added to the
Security Value, shall not be less than the Security Requirement as at such
date.

 

The
provisions of clauses 4.4, 4.5.4 and 4.5.5 shall apply to prepayments made
under clause 8.2.1(a).

 

8.2.2        Valuation
of Mortgaged Ships

 

Each
Mortgaged Ship shall, for the purposes of this clause 8.2, be valued in
Dollars as and when the Bank shall require by two (2) independent firms of
shipbrokers appointed by the Bank in its sole discretion.  Each such valuation of a Mortgaged Ship shall
be addressed to the Bank and made without, unless required by the Bank,
physical inspection and on the basis of a sale for prompt delivery for cash at
arm’s length on normal commercial terms, as between a willing buyer and a
willing seller and without taking into account the benefit of any charterparty
or other engagement concerning the relevant Mortgaged Ship.  The arithmetic mean of such valuations shall
constitute the value of such Mortgaged Ship for the purposes of this clause 8.2
provided however that if the two (2) valuations in respect of a Mortgaged
Ship vary by more than fifteen per cent (15%), the Bank acting in its sole discretion
shall appoint a third independent firm of shipbrokers to value such Mortgaged
Ship on the same basis as the other two (2) valuations and, in that case,
the arithmetic mean of the three (3) valuations shall constitute the value
of such Mortgaged Ship for the purpose of this clause 8.2.

 

The
value of each Mortgaged Ship determined in accordance with the provisions of
this clause 8.2 shall be binding upon the parties hereto until such time
as any such further valuations shall be obtained.

 

8.2.3        Information

 

The
Borrowers jointly and severally undertake to the Bank to supply to the Bank and
to any such shipbrokers such information concerning each Mortgaged Ship and its
condition as such shipbrokers may reasonably require for the purpose of making
any such valuation.

 

8.2.4        Costs

 

All
costs in connection with the Bank obtaining any valuation of each of the
Mortgaged Ships referred to in clause 8.2.2 and in schedule 2, Part 6,
paragraph 18, and any valuation either of any additional security for the
purposes of ascertaining the Security Value at any time or necessitated by the
Borrowers electing to constitute additional security pursuant to clause 8.2.1(b),
shall be borne by the Borrowers.

 

8.2.5        Valuation
of additional security

 

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

 

8.2.6        Documents
and evidence

 

In
connection with any additional security provided in accordance with this clause 8.2,
the Bank shall be entitled to receive such evidence and documents of the kind
referred to in Error!

 

33

 

Reference source not found. as may in the Bank’s opinion be appropriate and such favourable
legal opinions as the Bank shall in its absolute discretion require.

 

8.3          Negative
undertakings

 

The
Borrowers jointly and severally undertake with the Bank that, from the date of
this Agreement and so long as any moneys are owing under the Security Documents
and while all or any part of the Commitment remains outstanding, they will not,
without the prior written consent of the Bank;

 

8.3.1        Negative
pledge

 

permit
any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be
created or extended over all or any part of their respective present or future
undertaking, assets, rights or revenues in order to secure or prefer any
present or future Indebtedness or other liability or obligation of the Borrowers
or either of them or any Security Party or any other person;

 

8.3.2        No
merger

 

merge
or consolidate with any other person;

 

8.3.3        Disposals

 

sell,
transfer, abandon, lend or otherwise dispose of or cease to exercise direct
control over any part (being either alone or when aggregated with all other
disposals falling to be taken into account pursuant to this clause 8.3.3
material in the opinion of the Bank in relation to the undertaking, assets,
rights and revenues of the relevant Borrower taken as a whole) of their
respective present or future undertaking, assets, rights or revenues (otherwise
than by transfers, sales or disposals for full consideration in the ordinary
course of trading) whether by one or a series of transactions related or not;

 

8.3.4        Other
business

 

undertake
any business other than the ownership and operation of the Ships and the
chartering of the Ships to third parties;

 

8.3.5        Acquisitions

 

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

 

8.3.6        Other
obligations

 

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

 

8.3.7        No
Borrowed Money

 

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

 

8.3.8        Repayment
of Borrowed Money

 

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

 

34

 

8.3.9        Guarantees

 

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

 

8.3.10      Loans

 

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

 

8.3.11      Sureties

 

permit
any Indebtedness of the Borrowers to any person (other than the Bank) to be
guaranteed by any person (save for guarantees or indemnities from time to time
required in the ordinary course by any protection and indemnity or war risks
association with which a Ship is entered, guarantees required to procure the
release of a Ship from any arrest, detention, attachment or levy or guarantees
or undertakings required for the salvage of a Ship);

 

8.3.12      Share capital and distribution

 

purchase
or otherwise acquire for value any shares of their capital or distribute any of
their other present or future assets, undertakings, rights or revenues to any
of their shareholders or, following a Default, declare or pay any dividends;

 

8.3.13      Subsidiaries

 

form or
acquire any Subsidiaries;

 

8.3.14      Manager

 

appoint
any manager of either of the Ships other than the Manager or terminate or amend
the terms of either of the Management Agreements; or

 

8.3.15      Shareholdings

 

change,
cause or permit any change in, the legal and/or ultimate beneficial ownership
of either of the Borrowers or the Corporate Guarantor or the Manager from that existing
on the date of this Agreement as specified in clause 7.1.10 Provided however that following the Listing Date such
restriction, insofar as it relates to the shares in the Corporate Guarantor,
shall only apply in respect of the ultimate beneficial ownership of thirty five
per cent (35%) of the issued shares in the Corporate Guarantor which shall at
all times after the Listing Date remain ultimately beneficially owned by the
persons ultimately beneficially owning all of the shares in the Corporate
Guarantor on the date of this Agreement as specified in clause 7.1.10;

 

8.4          Pre-delivery
positive undertakings

 

The
Borrowers hereby jointly and severally undertake and agree with the Bank that they
will:

 

8.4.1        Conveyance
on default

 

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

 

35

 

8.4.2        Flag
State

 

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

 

8.4.3        Mortgage

 

immediately
upon Delivery of each Ship procure that the relevant Borrower shall execute,
and procure the registration of, the Mortgage over such Ship under the laws and
flag of the relevant Flag State and provide all other documents and evidence as
specified in Part 6 of schedule 2 in respect of such Ship.

 

8.5          Pre-delivery
negative undertaking

 

The
Borrowers hereby jointly and severally further undertake and agree with the
Bank that they will not, without the prior written consent of the Bank (and
then only subject to such conditions as the Bank may impose), let or agree to
let either Ship:

 

8.5.1        on
demise charter for any period; or

 

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

 

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

 

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

 

9              Conditions

 

9.1          Documents
and evidence

 

9.1.1        Commitment

 

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

 

9.1.2        First
Advances

 

The
obligation of the Bank to make available the First Advance in respect of a Ship
shall be subject to the condition that the Bank or its duly authorised
representative shall have received, on or prior to the drawdown of the relevant
First Advance, the relevant documents and evidence specified in Part 2 of schedule 2
in respect of such Ship, in form and substance satisfactory to the Bank.

 

9.1.3        Second
Advances

 

The
obligation of the Bank to make available the Second Advance in respect of a Ship
shall be subject to the condition that the Bank or its duly authorised
representative shall have received, on or prior to the drawdown of the relevant
Second Advance, the relevant documents and evidence specified in Part 3 of
schedule 2 in respect of such Ship, in form and substance satisfactory to
the Bank.

 

9.1.4        Third
Advances

 

The obligation of the Bank to make available the Third
Advance in respect of a Ship shall be subject to the condition that the Bank or
its duly authorised representative shall have received, on or prior to the
drawdown of the relevant Third Advance, the relevant documents and evidence

 

36

 

specified in Part 4 of schedule 2
in respect of such Ship, in form and substance satisfactory to the Bank.

 

9.1.5        Fourth
Advances

 

The obligation of the Bank to make available the Fourth
Advance in respect of a Ship shall be subject to the condition that the Bank or
its duly authorised representative shall have received, on or prior to the
drawdown of the relevant Fourth Advance, the relevant documents and evidence
specified in Part 5 of schedule 2 in respect of such Ship, in form
and substance satisfactory to the Bank.

 

9.1.6        Delivery
Advances

 

The obligation of the Bank to make available the
Delivery Advance in respect of a Ship shall be subject to the condition that
the Bank or its duly authorised representative shall have received, on or prior
to the drawdown of the relevant Delivery Advance, the documents and evidence
specified in Part 6 of Error! Reference source not found.  in respect of such Ship, in form and substance satisfactory to the
Bank.

 

9.1.7        Additional
Cost Advances

 

The obligation of the Bank to make available the
Additional Cost Advance in respect of a Ship shall be subject to the condition
that the Bank or its duly authorised representative shall have received, on or
prior to the drawdown of the Additional Cost Advance for such Ship, the
documents and evidence specified in Part 7 of schedule 2 in respect
of such Ship, in form and substance satisfactory to the Bank.

 

9.2          General
conditions precedent

 

The obligation of the Bank to make any Advance
available shall be subject to the further conditions that, at the time of the
giving of the Drawdown Notice in respect of the relevant Advance and at the
time of the making of the relevant Advance:

 

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

 

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

 

9.3          Waiver
of conditions precedent

 

The
conditions specified in this clause 9 are inserted solely for the benefit
of the Bank and may be waived by the Bank in whole or in part and with or
without conditions.

 

9.4          Further
conditions precedent

 

Not
later than five (5) Banking Days prior to each Drawdown Date and not later
than five (5) Banking Days prior to each Interest Payment Date, the Bank
may request and the Borrowers shall, not later than two (2) Banking Days
prior to such date, deliver to the Bank on such request further favourable
certificates and/or opinions as to any or all of the matters which are the
subject of clauses 7, 8, 9 and 10 of this Agreement.

 

37

 

10             Events of Default

 

10.1          Events

 

There
shall be an Event of Default if:

 

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

 

10.1.2                     Breach of Insurance and certain other obligations:
either of the Borrowers or the Manager fails to obtain and/or maintain the
Insurances (in accordance with the requirements of the Security Documents) for
either of the Ships or if any insurer in respect of such Insurances cancels any
of such Insurances or disclaims liability by reason, in either case, of
mis-statement in any proposal for any of such Insurances or for any other
failure or default on the part of the Borrowers or either of them or any other
person or the Borrowers commit any breach of or omit to observe any of the
obligations or undertakings expressed to be assumed by them under clauses 8.2,
8.3, 8.4 or 8.5 of this Agreement or either Corporate Guarantor commits any
breach of or omits to observe any of the obligations or undertakings expressed
to be assumed by it under clause 5.2 of the Corporate Guarantee to which it is
a party; or

 

10.1.3                     Breach of other obligations:
any Security Party commits any breach of or omits to observe any of its
obligations or undertakings expressed to be assumed by it under any of the
Security Documents or any of the Underlying Documents (other than those
referred to in clauses 10.1.1, 10.1.2 and 10.1.3 above) and, in respect of
any such breach or omission which in the opinion of the Bank is capable of
remedy, such action as the Bank may require shall not have been taken within
fourteen (14) days of the Bank notifying the relevant Security Party of such
default and of such required action; or

 

10.1.4                     Misrepresentation: any representation or
warranty made or deemed to be made or repeated by or in respect of any Security
Party in or pursuant to any of the Security Documents or in any notice,
certificate or statement referred to in or delivered under any of the Security
Documents or any of the Underlying Documents is or proves to have been
incorrect or misleading in any material respect; or

 

10.1.5                     Cross-default: any Indebtedness of any Relevant
Party is not paid when due or any Indebtedness of any Relevant Party becomes
(whether by declaration or automatically in accordance with the relevant
agreement or instrument constituting the same) due and payable prior to the
date when it would otherwise have become due (unless as a result of the
exercise by the relevant Relevant Party of a voluntary right of prepayment) or
any creditor of any Relevant Party becomes entitled to declare any such
Indebtedness due and payable or any facility or commitment available to any Relevant
Party relating to Indebtedness is withdrawn, suspended or cancelled by reason
of any default (howsoever described) of the person concerned unless the
relevant Relevant Party shall have satisfied the Bank that such withdrawal,
suspension or cancellation will not affect or prejudice in any way the relevant
Relevant Party’s ability to pay its debts as they fall due and fund its
commitments, or any guarantee given by any Relevant Party in respect of
Indebtedness is not honoured when due and called upon; or

 

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

 

10.1.7                     Insolvency: any Relevant Party is unable
or admits inability to pay its debts as they fall due; suspends making payments
on any of its debts or announces an intention to do so; becomes insolvent; has
assets the value of which is less than the value of its liabilities (taking
into account

 

38

 

contingent and prospective liabilities); or suffers the
declaration of a moratorium in respect of any of its Indebtedness; or

 

10.1.8                     Reduction or loss of capital:
a meeting is convened by any Relevant Party for the purpose of passing any resolution
to purchase or reduce its share capital or to redeem any of its shares; or

 

10.1.9                     Winding up: any corporate action, legal
proceedings or other procedure or step is taken for the purpose of winding up
any Relevant Party or an order is made or resolution passed for the winding up
of any Relevant Party or a notice is issued convening a meeting for the purpose
of passing any such resolution; or

 

10.1.10               Administration: any petition is presented,
notice given or step is taken for the purpose of the appointment of an administrator
of any Relevant Party or the Bank believes that any such petition or other step
is imminent or an administration order is made in relation to any Relevant Party;
or

 

10.1.11               Appointment of receivers and managers:
any administrative or other receiver is appointed of any Relevant Party or any
part of its assets and/or undertaking or any other steps are taken to enforce
any Encumbrance over all or any part of the assets of any Relevant Party; or

 

10.1.12               Compositions: any corporate action, legal
proceedings or other procedures or steps are taken, or negotiations commenced,
by any Relevant Party or by any of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or to proposing
any kind of composition, compromise or arrangement involving such company and
any of its creditors; or

 

10.1.13               Analogous proceedings: there occurs, in relation to
any Relevant Party, in any country or territory in which any of them carries on
business or to the jurisdiction of whose courts any part of their assets is
subject, any event which, in the reasonable opinion of the Bank, appears in
that country or territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 10.1.6 to 10.1.12 (inclusive)
or any Relevant Party otherwise becomes subject, in any such country or
territory, to the operation of any law relating to insolvency, bankruptcy or
liquidation; or

 

10.1.14               Cessation of business: any Relevant Party suspends
or ceases or threatens to suspend or cease to carry on its business; or

 

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

 

10.1.16               Invalidity: any of the 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 Security Party which is a party thereto, or if any
such Security Party shall deny that it has any, or any further, liability
thereunder; or

 

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

 

10.1.18               Repudiation: any Security Party
repudiates any of the Security Documents or does or causes or permits to be
done any act or thing evidencing an intention to repudiate any of the Security Documents;
or

 

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

 

39

 

10.1.20               Material adverse change: there occurs, in the reasonable
opinion of the Bank, a material adverse change in the financial condition of
any Relevant Party by reference to the financial position of that Relevant Party
as described by or on behalf of the Borrowers or any Security Party to the Bank
in the negotiation of this Agreement; or

 

10.1.21               Arrest: either Ship is arrested, confiscated,
seized, taken in execution, impounded, forfeited, detained in exercise or
purported exercise of any possessory lien or other claim or otherwise taken
from the possession of the relevant Borrower and such Borrower shall fail to
procure the release of such Ship within a period of fifteen (15) days
thereafter; or

 

10.1.22               Registration: the registration of either Ship
under the laws and flag of the relevant Flag State is cancelled or terminated
without the prior written consent of the Bank or if such registration of either
Ship is not renewed at least forty five (45) days prior to the expiry of such registration;
or

 

10.1.23               Unrest: any Flag
State becomes involved in hostilities or civil war or there is a seizure of
power in any Flag State by unconstitutional means if, 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

 

10.1.24               Environment: either of the Borrowers
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 either of the Borrowers and/or any other Relevant Party and/or any
of their respective Environmental Affiliates or either Ship or any other
Relevant Ship is involved in any incident which gives rise or may give rise to
an Environmental Claim if, in any such case, such non-compliance or incident or
the consequences thereof could, in the opinion of the Bank reasonably be
expected to have a material adverse effect on the business, assets, operations,
property or financial condition of either of the Borrowers or any other
Security Party or on the security constituted by any of the Security Documents;
or

 

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

 

10.1.26               Shareholdings: there is any change in the
legal and/or ultimate beneficial ownership of any of the shares of any of the
Borrowers, the Manager or the Corporate Guarantor from that existing on the
date of this Agreement as specified in clause 7.1.10 save for any change in
respect of the shares in the Corporate Guarantor following the Listing Date
which does not result in less than thirty five per cent (35%) of the issued
shares in the Corporate Guarantor being ultimately beneficially owned by the
persons who are the ultimate beneficial owners of all the shares in the Corporate
Guarantor on the date of this Agreement as specified in clause 7.1.10; or

 

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

 

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

 

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

 

40

 

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

 

10.1.31               Licenses, etc:  any license, authorisation, consent or
approval at any time necessary to enable any Security Party to comply with its
obligations under the Security Documents or the Underlying Documents is revoked
or withheld or modified or is otherwise not granted or fails to remain in full
force and effect or if any exchange control or other law or regulation shall
exist which would make any transaction under the Security Documents or the
Underlying Documents or the continuation thereof, unlawful or would prevent the
performance by any Security Party of any term of any of the Security Documents
or the Underlying Documents; or

 

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

 

10.2          Acceleration

 

The
Bank may, without prejudice to any other rights of the Bank, at any time after
the happening of an Event of Default by notice to the Borrowers declare that:

 

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

 

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

 

10.3          Demand
basis

 

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

 

11             Indemnities

 

11.1          Miscellaneous
indemnities

 

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

 

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

 

11.1.2        the
occurrence of any other Event of Default;

 

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

 

11.1.4        any
Advance not being made for any reason (excluding any default by the Bank) after
the Drawdown Notice in relation thereto has been given,

 

41

 

including,
in any such case, but not limited to, any loss or expense sustained or incurred
in maintaining or funding a Tranche or any part thereof or in liquidating or re-employing
deposits from third parties acquired to effect or maintain a Tranche or any
part thereof.

 

11.2        Currency
indemnity

 

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

 

11.3        Environmental
indemnity

 

The
Borrowers shall indemnify 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 whatsoever out of an
Environmental Claim made or asserted against the Bank if such Environmental
Claim would not have been, or been capable of being, made or asserted against
the Bank if it had not entered into any of the Security Documents and/or
exercised any of its rights, powers and discretions thereby conferred and/or
performed any of its obligations thereunder and/or been involved in any of the
transactions contemplated by the Security Documents.

 

11.4        Central
Bank or European Central Bank reserve requirements indemnity

 

The
Borrowers shall on demand promptly indemnify the Bank against any cost incurred
or loss suffered by it 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 or the Loan or deposits obtained by
it to fund or maintain the whole or part of the Loan and such cost or loss is
not recoverable by the Bank under clause 12.2.

 

12           Unlawfulness and increased costs

 

12.1        Unlawfulness

 

If it
is or becomes contrary to any law or regulation for the Bank to make any
Advance or to maintain the Commitment or fund the Loan, the Bank shall promptly
give notice to the Borrowers whereupon (a) the Commitment shall be reduced
to zero and (b) the Borrowers shall be obliged to prepay the Loan either (i) forthwith
or (ii) on a future specified date not being earlier than the latest date
permitted by the relevant law or regulation together with interest and
commitment commission accrued to the date of prepayment and all other sums
payable by the Borrowers under this Agreement.

 

42

 

12.2        Increased
costs

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)   the Borrowers shall on demand pay to the Bank the amount which the
Bank specifies (in a certificate and supporting documents setting forth and
evidencing the basis of the computation of such amount but not including any
matters which the Bank or its holding company regards as confidential) is
required to compensate the Bank and/or (as the case may be) its holding company
for such liability to Taxes, cost, reduction, payment, foregone return or loss.

 

For the
purposes of this clause 12.2, “holding company”
means the company or entity (if any) within the consolidated supervision of
which the Bank is included.

 

12.3        Exception

 

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

 

13           Security and set-off

 

13.1        Application
of moneys

 

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

 

43

 

13.1.1      first,
in or towards payment of all unpaid costs, expenses, fees and commitment
commission which may be owing to the Bank under any of the Security Documents;

 

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

 

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

 

13.1.4      fourthly,
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;

 

13.1.5      fifthly,
in or towards payment to the Bank of any other sums owing to it under any of
the Security Documents; and

 

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

 

13.2        Set-off

 

13.2.1      The
Borrowers authorise the Bank (without prejudice to any of the Bank’s rights at
law, in equity or otherwise), at any time and without prior notice to the
Borrowers, to apply any credit balance to which the Borrowers or either of them
is then entitled standing upon any account of the Borrowers or either of them with
any branch of the Bank in or towards satisfaction of any sum due and payable
from the Borrowers or either of them to the Bank under any of the Security
Documents.  For this purpose, the Bank is
authorised to purchase with the moneys standing to the credit of such account
such other currencies as may be necessary to effect such application.

 

13.2.2      The
Bank shall not be obliged to exercise any right given to it by this
clause 13.2.  The Bank shall notify
the Borrowers forthwith upon the exercise or purported exercise of any right of
set-off giving full details in relation thereto.

 

13.3        Further
assurance

 

The
Borrowers jointly and severally undertake with the Bank that the Security
Documents shall both at the date of execution and delivery thereof and so long
as any moneys are owing under any of the Security Documents be valid and
binding obligations of the respective parties thereto and rights of the Bank
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.

 

13.4        Conflicts

 

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

 

14           Operating Accounts

 

14.1        General

 

The
Borrowers jointly and severally undertake with the Bank that they will:

 

14.1.1      on or before the date of this
Agreement, open each of the Accounts; and

 

14.1.2      procure
that all moneys payable to each Borrower in respect of the Earnings of such
Borrower’s Ship shall, unless and until the Bank directs to the contrary
pursuant to the provisions of the relevant General Assignment, be paid to the Operating
Account for such Ship, Provided however

 

44

 

that if any of the moneys paid to the relevant Operating Account
are payable in a currency other than Dollars, the Bank shall (and each Borrower
in respect of its Operating Account hereby irrevocably instructs the Bank to)
convert such moneys into Dollars at the Bank’s spot rate of exchange at the
relevant time for the purchase of Dollars with such currency and the term “spot rate of exchange” shall include any premium and costs
of exchange payable in connection with the purchase of Dollars with such
currency.

 

14.2        Operating
Accounts: withdrawals

 

Unless
the Bank otherwise agrees in writing, neither Borrower shall be entitled to
withdraw any moneys from its Operating Account at any time from the date of
this Agreement and so long as any moneys are owing under the Security Documents
save that, unless and until a Default shall occur and the Bank shall direct to
the contrary, each Borrower may withdraw moneys from its Operating Account for
the following purposes:

 

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

 

14.2.2      to
pay any unpaid costs, expenses, fees and commitment commission which may be
owing to the Bank under any of the Security Documents;

 

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

 

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

 

14.2.5      to
pay the proper and reasonable expenses of administering its affairs; and

 

14.2.6      to
pay any other amounts to the extent permitted by clause 8.3.12,

 

Provided
however that if, in the opinion of the Bank, there are insufficient sums
standing to the credit of the Operating Accounts to meet principal and interest
falling due on the next Repayment Date and the next Interest Payment Date or
any other moneys which are or will become due and payable to the Bank, the
Borrowers shall not be entitled to make any withdrawal under clauses 14.2.4 and
14.2.5 without the prior written consent of the Bank.

 

14.3        Retention
Account: credits and withdrawals

 

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

 

14.3.2      Unless
and until there shall occur an Event of Default (whereupon the provisions of
clause 14.4 shall apply), all Retention Amounts credited to the Retention
Account together with interest from time to time accruing or at any time
accrued thereon shall be applied by the Bank (and the Borrowers hereby
irrevocably authorise the Bank so to apply the same) upon each Repayment Date
and/or on each day that interest is payable pursuant to clause 3.1, in or
towards payment to the Bank of the instalment then falling due for repayment
or, as the case may be, the amount of interest then due.  Each such application by the Bank shall
constitute a payment in or towards satisfaction of the Borrowers’ corresponding
payment obligations under this Agreement but shall be strictly without
prejudice to the obligations of each of the Borrowers to make any such payment
to the extent that the aforesaid application by the Bank is insufficient to
meet the same.

 

45

 

14.3.3      Unless
the Bank otherwise agrees in writing and subject to clause 14.3.2, neither
of the Borrowers shall be entitled to withdraw any moneys from the Retention
Account at any time from the date of this Agreement and so long as any moneys
are owing under the Security Documents.

 

14.4        Deductions

 

The
Bank shall be entitled (but not obliged) at any time to deduct from the balance
for the time being standing to the credit of any Account all other moneys which
may fall due to be paid to the Bank under the terms of this Agreement and the
other Security Documents or otherwise howsoever in connection with the Loan.

 

14.5        Pledging
of Operating Accounts

 

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

 

15           Assignment,
transfer and lending office

 

15.1        Benefit
and burden

 

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

 

15.2        No
assignment by Borrowers

 

Neither
of the Borrowers may assign or transfer any of its rights or obligations under
this Agreement.

 

15.3        Assignment
by Bank

 

The
Bank may assign all or any part of its rights under this Agreement or under any
of the other Security Documents to any other bank or financial institution (an “Assignee”) without the consent of the Borrowers (the
Borrowers consenting to any such assignment by their execution of this
Agreement).

 

15.4        Transfer

 

The
Bank may transfer all or any part of its rights, benefits and/or obligations
under this Agreement and/or any of the other Security Documents to any one or
more banks or other financial institutions (a “Transferee”)
without the consent of the Borrowers (the Borrowers consenting to any such
transfer by their execution of this Agreement) if the Transferee, by delivery
of such undertaking as the Bank may approve, becomes bound by the terms of this
Agreement and agrees to perform all or, as the case may be, part of the Bank’s
obligations under this Agreement.

 

15.5        Documenting
assignments and transfers

 

If the
Bank assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clauses 15.3 or 15.4,
the Borrowers jointly and severally undertake, immediately on being requested
to do so by the Bank and at the cost of the Bank, to enter into, and procure
that the other Security Parties shall enter into, such documents as may be
necessary or desirable to transfer to the Assignee or Transferee all or the
relevant part of the Bank’s interest 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 its Assignee or Transferee (as the case may be) to
the extent of their respective interests.

 

46

 

15.6        Lending
office

 

The
Bank shall lend through its office at the address specified in the definition
of “Bank” in clause 1.2 or through any other office of the Bank selected from
time to time by it through which the Bank wishes to lend for the purposes of
this Agreement.  If the office through
which the Bank is lending is changed pursuant to this clause 15.6, the
Bank shall notify the Borrowers promptly of such change.

 

15.7        Disclosure
of information

 

The
Bank may disclose to a prospective assignee, transferee 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 as the Bank shall
consider appropriate.

 

16           Notices and other matters

 

16.1        Notices

 

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

 

16.1.1      be
in writing delivered personally or by first-class prepaid letter (airmail if
available) or facsimile transmission or other means of telecommunication in
permanent written form;

 

16.1.2      be
deemed to have been received, subject as otherwise provided in the relevant
Security Document, in the case of a letter, when delivered personally or three (3) days
after it has been put in the post and, in the case of a facsimile transmission
or other means of telecommunication in permanent written form, upon receipt of
confirmation that the facsimile transmission has been received (provided that
if the date receipt is not a business day in the country of the addressee or if
the time of receipt is after the close of business in the country of the
addressee it shall be deemed to have been received at the opening of business
on the next such business day); and

 

16.1.3      be
sent:

 

(a)   if to the Borrowers or either of them at:

 

	
  c/o Aegean Bunkering Services Inc.

  
	
  42 Hatzikiriakou Street

  
	
  185 38 Piraeus

  
	
  Greece

  
	
   

  
	
  Fax no:

  	
  +30 210 458 6242

  
	
  Attention:

  	
  The Directors

  

 

(b)   if to the Bank at:

 

	
  National Bank of Greece S.A.

  
	
  Administration Shipping Division

  
	
  2 Bouboulinas & Akti Miaouli

  
	
  185 35 Piraeus

  
	
  Greece

  
	
   

  
	
  Fax No:

  	
  +30 210 414 4119

  
	
  Attention:

  	
  Corporate Manager

  

 

or to
such other address and/or numbers as is notified by one party to the other
party under this Agreement.

 

47

 

16.2        No
implied waivers, remedies cumulative

 

No
failure or delay on the part of the Bank to exercise any power, right or remedy
under any of the Security Documents shall operate as a waiver thereof, nor
shall any single or partial exercise by the Bank of any power, right or remedy
preclude any other or further exercise thereof or the exercise of any other
power, right or remedy.  The remedies
provided in the Security Documents are cumulative and are not exclusive of any
remedies provided by law.

 

16.3        English
language

 

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

 

16.4        Borrowers’
obligations

 

16.4.1      Joint and several

 

Notwithstanding
anything to the contrary contained in any of the Security Documents, the
agreements, obligations and liabilities of the Borrowers herein contained are joint
and several and shall be construed accordingly. 
Each of the Borrowers agrees and consents to be bound by the Security
Documents to which it is, or is to be, a party notwithstanding that each of the
other Borrower which is intended to sign or to be bound may not do so or be
effectually bound and notwithstanding that any of the Security Documents may be
invalid or unenforceable against the other Borrower, whether or not the
deficiency is known to the Bank.

 

16.4.2      Borrowers as principal debtors

 

Each Borrower
acknowledges and confirms that it is a principal and original debtor in respect
of all amounts which may become payable by the Borrowers in accordance with the
terms of this Agreement or any of the other Security Documents and agrees that
the Bank may also continue to treat it as such, whether or not the Bank is or
becomes aware that such Borrower is or has become a surety for the other
Borrower.

 

16.4.3      Indemnity

 

The
Borrowers hereby agree jointly and severally to keep the Bank fully indemnified
on demand against all damages, losses, costs and expenses (provided that, in
the case of such costs and expenses, they are reasonable and documented) arising
from any failure of either Borrower to perform or discharge any purported
obligation or liability of the other Borrower which would have been the subject
of this Agreement or any other Security Document had it been valid and
enforceable and which is not or ceases to be valid and enforceable against a
Borrower on any ground whatsoever, whether or not known to the Bank (including,
without limitation, any irregular exercise or absence of any corporate power or
lack of authority of, or breach of duty by, any person purporting to act on
behalf of a Borrower (or any legal or other limitation, whether under the Limitation
Acts or otherwise or any disability or death, bankruptcy, unsoundness of mind,
insolvency, liquidation, dissolution, winding up, administration, receivership,
amalgamation, reconstruction or any other incapacity of any person whatsoever
(including, in the case of a partnership, a termination or change in the
composition of the partnership) or any change of name or style or constitution
of any Security Party)).

 

16.4.4      Liability unconditional

 

None of
the obligations or liabilities of either Borrower under this Agreement or any
other Security Document shall be discharged or reduced by reason of:

 

(a)   the death, bankruptcy, unsoundness of mind, insolvency, liquidation,
dissolution, winding-up, administration, receivership, amalgamation,
reconstruction or other incapacity of any person whatsoever (including, in the
case of a partnership, a

 

48

 

termination or
change in the composition of the partnership) or any change of name or style or
constitution of the other Borrower or any other person liable;

 

(b)   the Bank granting any time, indulgence or concession to, or
compounding with, discharging, releasing or varying the liability of, the other
Borrower or any other person liable or renewing, determining, varying or
increasing any accommodation, facility or transaction or otherwise dealing with
the same in any manner whatsoever or concurring in, accepting, varying any
compromise, arrangement or settlement or omitting to claim or enforce payment
from the other Borrower or any other person liable; or

 

(c)   anything done or omitted which but for this provision might operate
to exonerate the Borrower.

 

16.4.5      Recourse to other security

 

The
Bank shall not be obliged to make any claim or demand or to resort to any Security
Document or other means of payment now or hereafter held by or available to it
for enforcing this Agreement or any of the Security Documents against a
Borrower or any other person liable and no action taken or omitted by the Bank
in connection with any such Security Document or other means of payment will
discharge, reduce, prejudice or affect the liability of the Borrowers under
this Agreement and the Security Documents to which any of them is, or is to be,
a party.

 

16.4.6      Waiver of Borrowers’ rights

 

Each
Borrower agrees with the Bank that, from the date of this Agreement and so long
as any moneys are owing under any of the Security Documents and while all or
any part of the Commitment remains outstanding, it will not, without the prior
written consent of the Bank:

 

(a)   exercise any right of subrogation, reimbursement and indemnity
against the other Borrower or any other person liable under the Security
Documents;

 

(b)   demand or accept repayment in whole or in part of any Indebtedness
now or hereafter due to such Borrower from the other Borrower or from any other
person liable or demand or accept any guarantee, indemnity or other assurance
against financial loss or any document or instrument created or evidencing an
Encumbrance in respect of the same or dispose of the same;

 

(c)   take any steps to enforce any right against the other Borrower or
any other person liable in respect of any such moneys; or

 

(d)   claim any set-off or counterclaim against the other Borrower or any
other person liable or claiming or proving in competition with the Bank in the
liquidation of the other Borrower or any other person liable or have the
benefit of, or share in, any payment from or composition with, the other Borrower
or any other person liable or any other Security Document now or hereafter held
by the Bank for any moneys owing under this Agreement or for the obligations or
liabilities of any other person liable but so that, if so directed by the Bank,
it will prove for the whole or any part of its claim in the liquidation of the
other Borrower or other person liable on terms that the benefit of such proof
and all money received by it in respect thereof shall be held on trust for the
Bank and applied in or towards discharge of any moneys owing under this
Agreement in such manner as the Bank shall deem appropriate.

 

17           Governing law and jurisdiction

 

17.1        Law

 

This
Agreement is governed by, and shall be construed in accordance with, English
law.

 

17.2        Submission
to jurisdiction

 

Each Borrower
agrees, for the benefit of the Bank, that any legal action or proceedings
arising out of or in connection with this Agreement against the Borrowers or
either of them or any of

 

49

 

their
assets may be brought in the English courts. 
Each Borrower irrevocably and unconditionally submits to the
jurisdiction of such courts and irrevocably designates, appoints and empowers Riches
Consulting at present of Old Jarretts Farmhouse, Brantridge Lane, Balcombe,
West Sussex, RH17 6JR, England to receive for it and on its behalf, service of
process issued out of the English courts in any such legal action or
proceedings.  The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the right of
the Bank to take proceedings against the Borrowers or either of them in the
courts of any other competent jurisdiction nor shall the taking of proceedings
in any one or more jurisdictions preclude the taking of proceedings in any
other jurisdiction, whether concurrently or not.

 

The parties
further agree that only the Courts of England and not those of any other State
shall have jurisdiction to determine any claim which the Borrowers or either of
them may have against the Bank arising out of or in connection with this
Agreement.

 

17.3        Contracts
(Rights of Third Parties) Act 1999

 

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

 

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

 

Schedule 1

 

50

 

	
  SIGNED

  	
  )

  	
   

  
	
  by

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  Attorney-in-fact

  
	
  SANTON LIMITED

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED

  	
  )

  	
   

  
	
  by

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  Attorney-in-fact

  
	
  TASMAN SEAWAYS INC.

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED

  	
  )

  	
   

  	
   

  
	
  by

  	
  )

  	
  Authorized
  signatory

  
	
  and
  by

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
   

  	
   

  
	
  NATIONAL BANK OF GREECE S.A.

  	
  )

  	
  Authorized
  signatory

  

 

51Exhibit
10.33

 

Private
& Confidential

 

 

LOAN
AGREEMENT

for
a

Loan
of up to US$26,250,000

to

ETON MARINE LTD.

BENMORE
SERVICES S.A.

and

INGRAM
ENTERPRISES CO.

 

provided
by

THE
BANKS AND FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1

 

Arranger,
Agent, Security Agent and Account Bank

AEGEAN
BALTIC BANK S.A.

 

Swap
Providers

AEGEAN
BALTIC BANK S.A.

and

HSH
NORDBANK AG

 

 

 

Contents

 

	
  Clause

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
  Purpose and definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  The Total Commitment and the Advances

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Interest and Interest Periods

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  Repayment and prepayment

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Fees, commitment commission and expenses

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  Payments and taxes; accounts and calculations

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Representations and warranties

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  Undertakings

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  Conditions

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  Events of Default

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  Indemnities

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  Unlawfulness and increased costs

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  Security, set-off and pro-rata payments

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  Accounts

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  Assignment, transfer and lending office

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  Arranger, Agent and Security Agent

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  Notices and other matters

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  18

  	
  Governing law and jurisdiction

  	
   

  	
  73

  

 

	
  Schedule 1 The Banks and their Commitments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2 Form of Drawdown Notice

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 3 Documents and evidence required as
  conditions precedent to the Loan being made

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 4 Form of Transfer Certificate

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 5 Contract Instalment Advances per Ship

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 6 Form of Corporate Guarantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 7 Form of Pre-delivery Security Assignment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 8 Form of Master Swap Agreement

  	
   

  	
   

  

 

 

	
  Schedule 9 Form of Master Agreement Security Deed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 10 Form of Trust Deed

  	
   

  	
   

  

 

 

THIS
AGREEMENT is dated
         October 2006 and made BETWEEN:

 

(1)                        ETON MARINE LTD., BENMORE SERVICES S.A. and INGRAM ENTERPRISES CO. as joint
and several Borrowers;

 

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

 

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

 

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

 

IT
IS AGREED as follows:

 

1                       Purpose and definitions

 

1.1                    Purpose

 

This Agreement sets out the terms and
conditions upon and subject to which the Banks agree, according to their
several obligations, to make available to the Borrowers, jointly and severally,
in up to eighteen (18) Advances, a loan of up to Twenty six million two hundred
and fifty thousand Dollars ($26,250,000) for the purpose of financing and/or,
as the case may be, refinancing part of the construction and acquisition cost
of the Ships.

 

1.2                    Definitions

 

In this Agreement, unless the context
otherwise requires:

 

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

 

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

 

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

 

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

 

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

 

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

 

“Additional Cost”
means:

 

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

 

1

 

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

 

(c)                        in relation to the Ingram Ship, the Ingram Additional Cost,

 

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

 

“Additional Cost Advance”:

 

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

 

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

 

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

 

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

 

“Advance” means
each borrowing of a proportion of the Total Commitment by the Borrowers or (as
the context may require) the principal amount of such borrowing, it includes (i)
each Eton Contract Instalment Advance, (ii) the Eton Delivery Advance, (iii) the
Eton Additional Cost Advance, (iv) each Benmore Contract Instalment Advance,
(v) the Benmore Delivery Advance, (vi) the Benmore Additional Cost Advance, (vii)
each Ingram Contract Instalment Advance, (viii) the Ingram Delivery Advance and
(ix) the Ingram Additional Cost Advance and:

 

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

 

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

 

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

 

and “Advances” means any or all of
them;

 

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

 

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

 

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

 

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

 

“Agent” means Aegean
Baltic Bank S.A. of 28 Diligianni Street, 145 62 Kifissia, Greece (or of such
other address as may last have been notified to the other parties to this
Agreement pursuant to clause 17.1.3) or such other person as may be appointed
as agent by the Banks and the Swap Providers pursuant to clause 16.13 and
includes its successors in title;

 

“Applicable Accounting
Principles” means US GAAP;

 

2

 

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

 

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

 

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

 

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

 

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

 

“Benmore Additional Cost”
means One million six hundred thousand Dollars ($1,600,000) or such other
lesser sum in Dollars as may be payable by the Benmore Borrower to Iota
pursuant to the Benmore Supervision Agreement, as the cost for the services
provided by Iota thereunder;

 

“Benmore Additional Cost
Advance” means an Advance of up to $1,230,000 made or (as the
context may require) to be made available to the Borrowers for the purpose of
financing and/or refinancing part of the Benmore Additional Cost;

 

“Benmore Advances”
means, together, the Benmore Contract Instalment Advances, the Benmore Delivery
Advance and the Benmore Additional Cost Advance and “Benmore
Advance” means any of them;

 

“Benmore Borrower”
means Benmore Services S.A. of 80 Broad Street, Monrovia, Republic of Liberia
and includes its successors in title;

 

“Benmore Contract”
means the shipbuilding contract dated 13 January 2006 made between the Benmore
Borrower and the Builder and as may be amended and supplemented from time to
time with the prior written consent of the Agent (acting on the instructions of
the Majority Banks), relating to the construction and sale by the Builder, and
the purchase by the Benmore Borrower, of the Benmore Ship;

 

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

 

“Benmore Contract Instalment
Advance” means, in relation to the Benmore Ship, each of the four
(4) Advances of the Benmore Tranche in the amount of up to $470,000, in the
case of the first such Advance, up to $940,000, in the case of the second such
Advance, up to $1,410,000, in the case of the third such Advance, and up to
$2,350,000, in the case of the fourth such Advance, made or, as the context may
require, to be made available to the Borrowers to finance and/or, as the case
may be, refinance in part the payment of an instalment of the Benmore Contract
Price falling due before the Delivery Date for the Benmore Ship, in each case
as set out in more detail in schedule 5 and “Benmore
Contract Instalment Advances” means any or all of them;

 

“Benmore Contract Price”
means Nine million four hundred thousand Dollars ($9,400,000) or such other
lesser sum in Dollars as may be payable by the Benmore Borrower to the Builder
pursuant to the Benmore Contract as the purchase price for the Benmore Ship
thereunder;

 

3

 

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

 

“Benmore Delivery Advance”
means an Advance of up to $2,350,000 made or (as the context may require) to be
made available to the Borrowers for the purpose of financing and/or refinancing
part of the final instalment of the Benmore Contract Price;

 

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

 

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

 

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

 

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

 

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

 

“Benmore Refund Guarantee”
means the letter of guarantee dated 17 March 2006, number LGG0310200600008
issued by Bank of Communications, Qingdao Branch as Refund Guarantor in favour
of the Benmore Borrower in respect of the Builder’s obligations under the
Benmore Contract and any further guarantee(s) to be issued by a Refund
Guarantor in respect of such obligations, pursuant to any agreement
supplemental to the Benmore Contract, and any extensions, renewals or
replacements thereto or thereof, in each case in form and substance acceptable
to the Agent (acting on the instructions of the Majority Banks in their sole
discretion) and “Benmore Refund Guarantees” means
any or all of them;

 

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

 

“Benmore Ship”
means the 5,500 dwt double-hull class oil tanker known on the date of this
Agreement as Hull No. QHS-222, to be constructed and sold by the Builder to the
Benmore Borrower pursuant to the Benmore Contract and to be registered on the
Delivery Date for such Ship in the ownership of the Benmore Borrower through
the relevant Registry under the laws and flag of the relevant Flag State;

 

“Benmore Supervision
Agreement” means the contract dated 24 February 2006 made between
the Benmore Borrower and Iota, as may be amended and supplemented from time to
time with the prior written consent of the Agent, relating to the provision of
design, building 

 

4

 

supervision, representation, turn-key
delivery services and the procurement of machinery and supplies by Iota to the
Benmore Borrower;

 

“Benmore Tranche”
means a tranche of the Loan of up to Eight million seven hundred and fifty
thousand Dollars ($8,750,000) drawn down or (as the context may require) to be
drawn down by not more than six (6) Advances (being the Benmore Advances);

 

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

 

“Borrower”
means:

 

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

 

(b)                       in relation to the Benmore Ship, the Benmore Borrower; or

 

(c)                        in relation to the Ingram Ship, the Ingram Borrower,

 

and “Borrowers”
means any or all of them;

 

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

 

“Builder” means
Qingdao Hyundai Shipbuilding Co. Ltd. of Lingshanwei Jiaonan, PC 266427,
Qingdao Shandong Province, The People’s Republic of China and includes its
successors in title;

 

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

 

“Classification”
means, in relation to each Ship, the highest class available for a vessel of
her type with the relevant Classification Society or such other classification
as the Agent shall, at the request of a Borrower, have agreed in writing shall
be treated as the Classification in relation to such Borrower’s Ship for the
purposes of the relevant Ship Security Documents;

 

“Classification Society”
means, in relation to each Ship, Lloyd’s Register of Shipping or such other
classification society (being a member of the International Association of
Classification Societies (“IACS”)) which the Agent shall, at the request of a
Borrower, have agreed in writing shall be treated as the Classification Society
in relation to such Borrower’s Ship for the purposes of the relevant Ship
Security Documents;

 

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

 

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

 

5

 

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

 

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

 

“Contract”
means:

 

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

 

(b)                       in relation to the Benmore Ship,
the Benmore Contract; or

 

(c)                        in relation to the Ingram Ship, the Ingram Contract,

 

and “Contracts”
means any or all of them;

 

“Contract Assignment
Consent and Acknowledgement” means:

 

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

 

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

 

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

 

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

 

“Contract Instalment
Advances”:

 

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

 

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

 

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

 

and “Contract Instalment
Advance” means any of them;

 

“Contract Price”
means:

 

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

 

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

 

(c)                        in relation to the Ingram Ship, the Ingram Contract Price,

 

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

 

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

 

6

 

“Corporate Guarantees”
means, together, the Aegean Marine Guarantee and the Aegean Shipholdings Guarantee
and “Corporate Guarantee” means either of
them;

 

“Corporate Guarantors”
means, together, the Aegean Marine Guarantor and the Aegean Shipholdings
Guarantor and “Corporate Guarantor” means either
of them;

 

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

 

“Deed of Covenant”
means:

 

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

 

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

 

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

 

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

 

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

 

“Delivery”
means, in relation to each Ship, the delivery of such Ship by the Builder to,
and the acceptance of such Ship by, the relevant Borrower in accordance with
the relevant Contract;

 

“Delivery Advance”
means:

 

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

 

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

 

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

 

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

 

“Delivery Date”
means, in relation to each Ship, the date on which the Delivery of such Ship occurs;

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

“Drawdown Period”
means, in relation to each Advance, the period commencing on the date of this
Agreement and ending on the Termination Date or the period ending on such
earlier date (if any) on which (a) the aggregate amount of the Advances is
equal to the Total Commitment or (b) the Total Commitment is reduced to zero
pursuant to clauses 4.3, 4.7, 10.2 or 12 or (c) the Delivery of the Ship
relevant to such Advance takes place;

 

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

 

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

 

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

 

“Environmental Affiliate”
means any agent or employee of any Borrower or any other Relevant Party or any
person having a contractual relationship with any Borrower or any other
Relevant Party in connection with any Relevant Ship or its operation or the
carriage of cargo and/or passengers thereon and/or the provision of goods
and/or services on or from any Relevant Ship;

 

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

 

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

 

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

 

“Eton Additional Cost”
means One million six hundred thousand Dollars ($1,600,000) or such other
lesser sum in Dollars as may be payable by the Eton Borrower to Iota pursuant
to the Eton Supervision Agreement, as the cost for the services provided by
Iota thereunder;

 

“Eton Additional Cost
Advance” means an Advance of up to $1,230,000 made or (as the
context may require) to be made available to the Borrowers for the purpose of
financing and/or refinancing part of the Eton Additional Cost;

 

8

 

“Eton Advances”
means, together, the Eton Contract Instalment Advances, the Eton Delivery
Advance and the Eton Additional Cost Advance and “Eton Advance”
means any of them;

 

“Eton Borrower”
means Eton Marine Ltd. of 80 Broad Street, Monrovia, Republic of Liberia and
includes its successors in title;

 

“Eton Contract”
means the shipbuilding contract dated 13 January 2006 made between the Eton
Borrower and the Builder and as may be amended and supplemented from time to
time with the prior written consent of the Agent (acting on the instructions of
the Majority Banks), relating to the construction and sale by the Builder, and
the purchase by the Eton Borrower, of the Eton Ship;

 

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

 

“Eton Contract Instalment
Advance” means, in relation to the Eton Ship, each of the four (4)
Advances of the Eton Tranche in the amount of up to $470,000, in the case of
the first such Advance, up to $940,000, in the case of the second such Advance,
up to $1,410,000, in the case of the third such Advance, and up to $2,350,000,
in the case of the fourth such Advance, made or, as the context may require, to
be made available to the Borrowers to finance and/or, as the case may be,
refinance in part the payment of an instalment of the Eton Contract Price
falling due before the Delivery Date for the Eton Ship, in each case as set out
in more detail in schedule 5 and “Eton Contract Instalment
Advances” means any or all of them;

 

“Eton Contract Price”
means Nine million four hundred thousand Dollars ($9,400,000) or such other
lesser sum in Dollars as may be payable by the Eton Borrower to the Builder
pursuant to the Eton Contract as the purchase price for the Eton Ship
thereunder;

 

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

 

“Eton Delivery Advance”
means an Advance of up to $2,350,000 made or (as the context may require) to be
made available to the Borrowers for the purpose of financing and/or refinancing
part of the final instalment of the Eton Contract Price;

 

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

 

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

 

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

 

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

 

9

 

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

 

“Eton Refund Guarantee”
means the letter of guarantee dated 17 March 2006, number LGG0310200600006
issued by Bank of Communications, Qingdao Branch as Refund Guarantor in favour
of the Eton Borrower in respect of the Builder’s obligations under the Eton
Contract and any further guarantee(s) to be issued by the Refund Guarantor in
respect of such obligations pursuant to any agreement supplemental to the Eton
Contract, and any extensions, renewals or replacements thereto or thereof, in
each case in form and substance acceptable to the Agent (acting on the
instructions of the Majority Banks in their sole discretion) and “Eton Refund Guarantees” means any or all of them;

 

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

 

“Eton Ship”
means the 5,500 dwt double-hull class oil tanker known on the date of this
Agreement as Hull No. QHS-220, to be constructed and sold by the Builder to the
Eton Borrower pursuant to the Eton Contract and to be registered on the
Delivery Date for such Ship in the ownership of the Eton Borrower through the
relevant Registry under the laws and flag of the relevant Flag State;

 

“Eton Supervision Agreement”
means the contract dated 24 February 2006 made between the Eton Borrower and
Iota, as may be amended and supplemented from time to time with the prior
written consent of the Agent, relating to the provision of design, building
supervision, representation, turn-key delivery services and the procurement of
machinery and supplies by Iota to the Eton Borrower;

 

“Eton Tranche”
means a Tranche of the Loan of up to Eight million seven hundred and fifty
thousand Dollars ($8,750,000) drawn down or (as the context may require) to be
drawn down by not more than six (6) Advances (being the Eton Advances);

 

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

 

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

 

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

 

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

 

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

 

“Group” means, together, the Aegean Marine Guarantor and its
Subsidiaries from time to time and “member of the Group”
shall be construed accordingly;

 

10

 

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

 

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

 

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

 

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

 

“Ingram Additional Cost”
means One million six hundred thousand Dollars ($1,600,000) or such other
lesser sum in Dollars as may be payable by the Ingram Borrower to Iota pursuant
to the Ingram Supervision Agreement, as the cost for the services provided by
Iota thereunder;

 

“Ingram Additional Cost
Advance” means an Advance of up to $1,230,000 made or (as the
context may require) to be made available to the Borrowers for the purpose of
financing and/or refinancing part of the Ingram Additional Cost;

 

“Ingram Advances”
means, together, the Ingram Contract Instalment Advances, the Ingram Delivery
Advance and the Ingram Additional Cost Advance and “Ingram
Advance” means any of them;

 

“Ingram Borrower”
means Ingram Enterprises Co. of 80 Broad Street, Monrovia, Republic of Liberia
and includes its successors in title;

 

“Ingram Contract”
means the shipbuilding contract dated 13 January 2006 made between the Ingram
Borrower and the Builder and as may be amended and supplemented from time to
time with the prior written consent of the Agent (acting on the instructions of
the Majority Banks), relating to the construction and sale by the Builder, and
the purchase by the Ingram Borrower, of the Ingram Ship;

 

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

 

“Ingram Contract Instalment
Advance” means, in relation to the Ingram Ship, each of the four (4)
Advances of the Ingram Tranche in the amount of up to $470,000, in the case of
the first such Advance, up to $940,000, in the case of the second such Advance,
up to $1,410,000, in the case of the third such Advance, and up to $2,350,000,
in the case of the fourth such Advance, made or, as the context may require, to
be made available to the Borrowers to finance and/or, as the case may be,
refinance in part the payment of an instalment of the Ingram Contract Price
falling due before the Delivery Date for the Ingram Ship, in each case as set
out in more detail in schedule 5 and “Ingram Contract Instalment
Advances” means any or all of them;

 

“Ingram Contract Price”
means Nine million four hundred thousand Dollars ($9,400,000) or such other
lesser sum in Dollars as may be payable by the Ingram Borrower to the Builder
pursuant to the Ingram Contract as the purchase price for the Ingram Ship
thereunder;

 

11

 

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

 

“Ingram Delivery Advance”
means an Advance of up to $2,350,000 made or (as the context may require) to be
made available to the Borrowers for the purpose of financing and/or refinancing
part of the final instalment of the Ingram Contract Price;

 

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

 

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

 

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

 

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

 

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

 

“Ingram Refund Guarantee”
means the letter of guarantee dated 17 March 2006, number LGG0310200600009
issued by Bank of Communications, Qingdao Branch as Refund Guarantor in favour
of the Ingram Borrower in respect of the Builder’s obligations under the Ingram
Contract and any further guarantee(s) to be issued by a Refund Guarantor in
respect of such obligations, pursuant to any agreement supplemental to the
Ingram Contract, and any extensions, renewals or replacements thereto or
thereof, in each case in form and substance acceptable to the Agent (acting on
the instructions of the Majority Banks in their sole discretion) and “Ingram Refund Guarantees” means any or all of them;

 

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

 

“Ingram Ship”
means the 5,500 dwt double-hull class oil tanker known on the date of this
Agreement as Hull No. QHS-223, to be constructed and sold by the Builder to the
Ingram Borrower pursuant to the Ingram Contract and to be registered on the Delivery
Date for such Ship in the ownership of the Ingram Borrower through the relevant
Registry under the laws and flag of the relevant Flag State;

 

“Ingram Supervision
Agreement” means the contract dated 24 February 2006 made between
the Ingram Borrower and Iota, as may be amended and supplemented from time to
time with the prior written consent of the Agent, relating to the provision of
design, building supervision, representation, turn-key delivery services and
the procurement of machinery and supplies by Iota to the Ingram Borrower;

 

12

 

“Ingram Tranche”
means a tranche of the Loan of up to Eight million seven hundred and fifty
thousand Dollars ($8,750,000) drawn down or (as the context may require) to be
drawn down by not more than six (6) Advances (being the Ingram Advances);

 

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

 

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

 

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

 

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

 

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

 

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

 

“LIBOR” means in
relation to a particular period:

 

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

 

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

 

“Listing” means
the successful listing of all the shares in the Aegean Marine Guarantor on the
New York Stock Exchange, NASDAQ or any other stock exchange acceptable to the
Agent;

 

“Listing Date”
means the date when Listing shall have taken place;

 

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

 

13

 

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

 

“Management Agreement”
means:

 

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

 

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

 

(c)                        in relation to the Ingram
Ship, the Ingram Management Agreement,

 

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

 

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

 

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

 

“Margin” means,
in relation to each Tranche:

 

(a)                        for each part
of the Pre-Delivery Period for such Tranche:

 

(i)                                    falling
in the Pre-Listing Period, one point three zero per cent (1.30%) per annum; and

 

(ii)                                 falling
in the Post-Listing Period, one point one five zero per cent (1.150%) per
annum; or

 

(b)                       for each part
of the Post-Delivery Period for such Tranche:

 

(i)                                    falling
in the Pre-Listing Period, one point one eight seven five per cent (1.1875%)
per annum; and

 

(ii)                                 falling
in the Post-Listing Period, one point zero five zero per cent (1.050%) per
annum;

 

“Master Agreement Security
Deed” means:

 

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

 

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

 

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

 

“Master Swap Agreement”
means:

 

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

 

14

 

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

 

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

 

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

 

“Mortgage”
means:

 

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

 

(b)                       in relation to the Benmore Ship,
the Benmore Mortgage; or

 

(c)                        in relation to the Ingram
Ship, the Ingram Mortgage,

 

and “Mortgages”
means any or all of them;

 

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

 

“Operating Account”
means:

 

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

 

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

 

(c)                        in relation to the Ingram
Ship, the Ingram Operating Account,

 

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

 

“Operating Account Pledge”
means:

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

“Permitted Liens”
means, in relation to a Ship, any lien on that Ship for master’s, officer’s or
crew’s wages outstanding in the ordinary course of trading, any lien for
salvage and any ship repairer’s or outfitter’s possessory lien for a sum not
(except with the prior written consent of the Agent) exceeding the Casualty
Amount for such Ship;

 

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

 

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

 

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

 

“Post-Delivery Period”
means, in relation to a Tranche, the period starting on the Drawdown Date of
the Delivery Advance of such Tranche and ending on the date when all moneys
owing under this Agreement and the other Security Documents have been repaid in
full;

 

“Post-Listing Period”
means the period from the date falling immediately after the Listing Date until
all moneys owing under this Agreement and the other Security Documents have
been repaid in full;

 

“Pre-Delivery Period”
means, in relation to a Tranche, the period starting on Drawdown Date of the
first Contract Instalment Advance of such Tranche to be drawn down and ending
on the day falling immediately prior to the Drawdown Date of the Delivery
Advance of such Tranche;

 

“Pre-delivery Security
Assignment” means:

 

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

 

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

 

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

 

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

 

“Pre-Listing Period”
means the period form the date of this Agreement until the Listing Date;

 

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

 

“Refund Guarantee”
means:

 

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

 

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

 

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

 

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

 

16

 

“Refund Guarantee
Assignment Consent and Acknowledgement” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Related Company”:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

one hundred and seventeen (117) months
after such First Repayment Date and (b) 31 December 2019;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

“Security Requirement”
means the amount in Dollars (as certified by the Agent whose certificate shall,
in the absence of manifest error, be conclusive and binding on the Borrowers
and the other Creditors) which is, at any relevant time during the period
commencing on the earlier of (a) the Drawdown Date of the last Delivery Advance
to be drawn down and (b) the last day of the last Drawdown Period to elapse,
and ending on the date when all amounts owing under this Agreement and the other
Security Documents have been paid in full, One hundred and twenty five per cent
(125%) of the aggregate of (i) the Loan and (ii) the aggregate Swap Exposure
under both Master Swap Agreements;

 

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

 

“Ships” means,
together, the Eton Ship, the Benmore Ship and the Ingram Ship and “Ship” means any of them;

 

“Ship Security Documents”:

 

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

 

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

 

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

 

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

 

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

 

“Supervision Agreement”:

 

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

 

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

 

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

 

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

 

“Swap Exposure”
means, as at any relevant time and in relation to a Master Swap Agreement, the
amount certified by the relevant Swap Provider to the Agent to be the aggregate
net amount in Dollars which would be payable by the Borrowers to such Swap
Provider under (and calculated in accordance with) section 6(e) (Payments on
Early Termination) of such Master 

 

19

 

Swap Agreement if an Early Termination Date
had occurred at the relevant time in relation to all continuing Designated Transactions
under that Master Swap Agreement;

 

“Swap Provider”
means:

 

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

 

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

 

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

 

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

 

“Termination Date”
means 31 December 2009 or such later date as the Agent (acting on the
instructions of the Majority Banks) in its sole discretion may agree in
writing;

 

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

 

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

 

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

 

(b)                                the Compulsory Acquisition of such Ship; or

 

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

 

“Tranche” means:

 

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

 

(b)                       in relation to the Benmore
Ship, the Benmore Tranche; or

 

(c)                        in relation to the Ingram
Ship, the Ingram Tranche,

 

and “Tranches” means
any or all of them;

 

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

 

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

 

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

 

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

 

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

 

“Trust Property”
means (i) the security, powers, rights, titles, benefits and interests (both
present and future) constituted by and conferred on the Security Agent under or
pursuant to the Security Documents (including, without limitation, the benefit
of all covenants, undertakings, representations, warranties and obligations
given, made or undertaken to the Security Agent in 

 

20

 

the Security Documents), (ii) all moneys,
property and other assets paid or transferred to or vested in the Security
Agent or any agent of the Security Agent or any receiver or received or
recovered by the Security Agent or any agent of the Security Agent or any receiver
pursuant to, or in connection with, any of the Security Documents whether from
any Security Party or any other person and (iii) all moneys, investments,
property and other assets at any time representing or deriving from any of the
foregoing, including all interest, income and other sums at any time received
or receivable by the Security Agent or any agent of the Security Agent or any receiver
in respect of the same (or any part thereof); and

 

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

 

1.3                    Headings

 

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

 

1.4                    Construction of certain terms

 

In this Agreement, unless the context
otherwise requires:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.5                    Majority Banks

 

Where this Agreement or any other Security
Document provides for any matter to be determined by reference to the opinion
of the Majority Banks or to be subject to the consent or request of the
Majority Banks or for any action to be taken on the instructions in writing of
the Majority Banks, such opinion, consent, request or instructions shall (as
between the Banks) only be regarded as having been validly given or issued by
the Majority Banks if all the Banks shall have received prior notice of the
matter on which such opinion, consent, request or instructions are required to
be obtained and the relevant majority of such Banks shall have given or issued
such opinion, consent, request or instructions but so that (as between the
Borrowers and the Banks) the 

 

21

 

Borrowers shall be entitled (and bound) to
assume that such notice shall have been duly received by each relevant Bank and
that the relevant majority shall have been obtained to constitute Majority
Banks whether or not this is in fact the case.

 

1.6                    Banks’ Commitment

 

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

 

2                              The Total Commitment and the
Advances

 

2.1                    Agreement to lend

 

The Banks, relying upon each of the
representations and warranties in clause 7, agree to lend to the Borrowers,
jointly and severally, upon and subject to the terms of this Agreement, the
principal sum of up to Twenty six million two hundred and fifty thousand Dollars
($26,250,000) in up to eighteen (18) Advances comprising three (3) Tranches, namely,
the Eton Tranche, the Benmore Tranche and the Ingram Tranche. The obligation of
each Bank under this Agreement shall be to contribute that proportion of each
Advance which, as at the Drawdown Date of such Advance, its Commitment bears to
the Total Commitment.

 

2.2                    Obligations several

 

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

 

2.3                    Interests several

 

Notwithstanding any other term of this
Agreement (but without prejudice to the provisions of this Agreement relating
to or requiring action by the Majority Banks) the interests of the Creditors
are several and the amount due to any Creditor is a separate and independent
debt. Each Creditor shall have the right to protect and enforce its rights
arising out of this Agreement and it shall not be necessary for any other
Creditor to be joined as an additional party in any proceedings for this
purpose.

 

2.4                    Drawdown

 

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

 

2.5                    Timing and limitation of Advances

 

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

 

(a)              Twenty six million two hundred
and fifty thousand Dollars ($26,250,000);

 

(b)             the aggregate of:

 

22

 

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

 

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

 

(c)              the
amount in Dollars equal to eighty per cent (80%) of the aggregate market values
of the Ships as determined in accordance with schedule 3, Part 4, paragraph 19,

 

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

 

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

 

(a)              Eight million seven hundred
and fifty thousand Dollars ($8,750,000);

 

(b)             the aggregate of:

 

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

 

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

 

(c)              the amount in Dollars
equal to eighty per cent (80%) of the market value of the Ship relevant to such
Tranche as determined in accordance with schedule 3, Part 4, paragraph 19.

 

2.5.3                                 The
aggregate amount of the four (4) Contract Instalment Advances for each Ship
shall not exceed Five million one hundred and seventy thousand Dollars ($5,170,000)
and:

 

(a)              the first Contract
Instalment Advance for a Ship shall not exceed the lower of (i) Four hundred
and seventy thousand Dollars ($470,000) and (ii) fifty per cent (50%) of the first
instalment of the Contract Price for that Ship;

 

(b)             the second Contract
Instalment Advance for a Ship shall not exceed the lower of (i) Nine hundred
and forty thousand Dollars ($940,000) and (ii) fifty per cent (50%) of the second
instalment of the Contract Price for that Ship;

 

(c)              the third Contract
Instalment Advance for a Ship shall not exceed the lower of (i) One million
four hundred and ten thousand Dollars ($1,410,000) and (ii) seventy five per
cent (75%) of the third instalment of the Contract Price for that Ship;

 

(d)             the fourth Contract
Instalment Advance for a Ship shall not exceed the lower of (i) Two million three
hundred and fifty thousand Dollars ($2,350,000) and (ii) one hundred per cent
(100%) of the fourth instalment of the Contract Price for that Ship; and

 

(e)              each Contract Instalment
Advance for a Ship:

 

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

 

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

 

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

 

23

 

2.5.4                                 Each
Delivery Advance:

 

(a)              shall not exceed the lower
of:

 

(i)                           Two million
three hundred and fifty thousand Dollars ($2,350,000);

 

(ii)                        one hundred
per cent (100%) of the fifth instalment of the Contract Price for that Ship;

 

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

 

(iv)                    the amount in
Dollars which, when added to the aggregate amount of the Contract Instalment
Advances for the relevant Ship actually drawn down, will produce a total figure
of Seven million five hundred and twenty thousand Dollars ($7,520,000); and

 

(v)                       the amount in
Dollars which, when added to the aggregate amount of the Contract Instalment
Advances for the relevant Ship actually drawn down, will produce a figure equal
to eighty per cent (80%) of the market value of that Ship as determined in
accordance with schedule 3, Part 4, paragraph 19;

 

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

 

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

 

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

 

2.5.5                                 Each Additional
Cost Advance:

 

(a)              shall not exceed the lower
of:

 

(i)                           One million
two hundred and thirty thousand Dollars ($1,230,000);

 

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

 

(iii)                     the amount in
Dollars which, when added to the aggregate of the Contract Instalment Advances
and the Delivery Advance for the relevant Ship actually drawn down, will
produce a figure equal to eighty per cent (80%) of the market value of such
Ship as determined in accordance with schedule 3, Part 4, paragraph 19;

 

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

 

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

 

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

 

24

 

2.6                    Availability

 

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

 

2.7                    Termination of Total Commitment

 

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

 

2.8                    Application of proceeds

 

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

 

2.9                    Derivative transactions

 

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

 

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

 

3                              Interest and Interest Periods

 

3.1                    Normal interest rate

 

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

 

3.2                    Selection of Interest Periods

 

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

 

25

 

3.3                    Determination of Interest Periods

 

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

 

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

 

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

 

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

 

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

 

3.4                    Default interest

 

If the Borrowers fail to pay any sum
(including, without limitation, any sum payable pursuant to this clause 3.4)
on its due date for payment under any of the Security Documents (other than the
Master Swap Agreements), the Borrowers shall pay interest on such sum on demand
from the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Agent pursuant to this clause 3.4. The
period beginning on such due date and ending on such date of payment shall be
divided into successive periods of not more than three (3) months as selected
by the Agent each of which (other than the first, which shall commence on such
due date) shall commence on the last day of the preceding such period. The rate
of interest applicable to each such period shall be the aggregate (as
determined by the Agent) of (a) two per cent (2%) per annum, (b) the Margin and
(c) LIBOR for such period. Such interest shall be due and payable on the last
day of each such period as determined by the Agent and each such day shall, for
the purposes of this Agreement, be treated as an Interest Payment Date,
provided that if such unpaid sum is an amount of principal which became due and
payable by reason of a declaration by the Agent under clause 10.2.2 or a
prepayment pursuant to clauses 4.3, 8.2.1(a) or 12.1, on a date other than
an Interest Payment Date relating thereto, the first such period selected by
the Agent shall be of a duration equal to the period between the due date of
such principal sum and such Interest Payment Date and interest shall be payable
on such principal sum during such period at a rate of two per cent (2%) above
the rate applicable thereto immediately before it shall have become so due and
payable. If, for the reasons specified in clause 3.6.1, the Agent is
unable to determine a rate in accordance with the foregoing provisions of this
clause 3.4, each Bank shall promptly notify the Agent of the cost of funds
to such Bank and interest on any sum not paid on its due date for payment shall
be calculated at a rate determined by the Agent to be two per cent (2%) per
annum above the aggregate of the Margin and the cost of funds to such Bank.

 

26

 

3.5                    Notification of Interest Periods and interest rate

 

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

 

3.6                    Market disruption; non-availability

 

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

 

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

 

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

 

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

 

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

 

3.6.2                                 During
the period of ten (10) days after any Determination Notice has been given by
the Agent under clause 3.6.1, each Bank shall certify an alternative basis
(the “Alternative Basis”) for maintaining its
Contribution. The Alternative Basis may at the relevant Bank’s sole and
unfettered discretion include (without limitation) alternative interest
periods, alternative currencies or alternative rates of interest but shall
include a margin above the cost of funds to such Bank equivalent to the Margin.
The Agent shall calculate the arithmetic mean of the Alternative Bases provided
by the relevant Banks (the “Substitute Basis”)
and certify the same to the Borrowers, the Banks and the Swap Providers. The
Substitute Basis so certified shall be binding upon the Borrowers, and shall
take effect in accordance with its terms from the date specified in the
Determination Notice until such time as the Agent notifies the Borrowers that
none of the circumstances specified in clause 3.6.1 continues to exist
whereupon the normal interest rate fixing provisions of this Agreement shall
apply.

 

4                              Repayment and prepayment

 

4.1                    Repayment

 

4.1.1                                 The
Borrowers shall repay each Tranche by forty (40) repayment instalments, one
such instalment to be repaid on each of the Repayment Dates for such Tranche.
Subject to the provisions of this Agreement, the amount of each of the repayment
instalments (other than the final repayment instalment) for each Tranche shall
be $125,000 and the amount of the final repayment instalment for each Tranche shall
be $3,875,000 (comprising a repayment instalment of $125,000 and a balloon
payment of $3,750,000 (each such balloon payment in relation to a Tranche, the “Balloon Instalment” for that Tranche)).

 

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

 

27

 

4.2                    Voluntary prepayment

 

The Borrowers may prepay any Tranche in
whole or part (such part being in an amount of Five hundred thousand Dollars ($500,000)
or any larger sum which is an integral multiple of Five hundred thousand
Dollars ($500,000)) on any Interest Payment Date relating to the part of the Tranche
to be repaid without premium or penalty.

 

4.3                    Prepayment on Total Loss and Sale

 

4.3.1                                 Before
first drawdown

 

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

 

4.3.2                                 After
first drawdown but prior to Delivery

 

On a Ship becoming a Total Loss or
suffering damage or being involved in an incident which in the reasonable
opinion of the Agent may result in such Ship being subsequently determined to
be a Total Loss or on the Contract for a Ship being assigned, transferred, sold
or novated to or in favour of any person, in each case after any Contract
Instalment Advance for such Ship has been drawn down but prior to the drawing of
the Delivery Advance for such Ship, the obligation of the Banks to advance any
other Advance (or part thereof) for such Ship shall immediately cease, the
Total Commitment shall be reduced accordingly and the Borrowers shall immediately
prepay the outstanding Contract Instalment Advances for such Ship in full.

 

4.3.3                                 Thereafter

 

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

 

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

 

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

 

4.3.4                                 Defined
terms

 

For the purposes of this clause 4.3:

 

(a)              “Disposal Reduction
Date” means:

 

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

 

28

 

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

 

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

 

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

 

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

 

(c)              “Relevant Amount”
means, in relation to a Mortgaged Ship which has been lost or sold, an amount in
Dollars equal to the higher of:

 

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

 

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

 

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

 

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

 

to

 

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

 

immediately after the relevant prepayment is made; and

 

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

 

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

 

to

 

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

 

immediately before the relevant prepayment is made.

 

4.3.5                                 Interpretation

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

4.3.6                                 Application
of Total Loss and sale proceeds

 

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

 

4.4                    Amounts payable on prepayment

 

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

 

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

 

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

 

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

 

4.5                    Notice of prepayment; reduction of repayment instalments

 

4.5.1                                 No
prepayment may be effected under clause 4.2 unless the Borrowers shall
have given the Agent at least fifteen (15) days’ prior written notice of their
intention to make such prepayment. Every notice of prepayment shall be
effective only on actual receipt by the Agent, shall be irrevocable, shall
specify the Tranche and the amount thereof to be prepaid and shall oblige the
Borrowers to make such prepayment on the date specified.

 

4.5.2                                 Any
amount prepaid pursuant to clause 4.2 in respect of a Tranche shall be applied
in reducing the repayment instalments (including the relevant Balloon
Instalment) of the relevant Tranche under clause 4.1 in inverse order of their
due dates for payment.

 

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

 

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

 

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

 

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

 

30

 

4.6                    Unwinding of Designated Transactions

 

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

 

4.7                    Cancellation of Commitments

 

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

 

5                              Fees, commitment commission
and expenses

 

5.1                    Fees

 

The Borrowers shall pay to the Agent:

 

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

 

5.1.2                                 for
the account of each Bank, on 6 July 2006 and on each of the dates falling at
three (3) monthly intervals thereafter until the last day of the last Drawdown
Period to elapse and on such day, commitment commission computed from 6 April
2006 (in the case of the first payment of commission) and from the date of the
preceding payment of commission (in the case of each subsequent payment), at
the rate of zero point three zero per cent (0.30%) per annum on the daily
undrawn amount of such Bank’s Commitment.

 

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

 

5.2                    Expenses

 

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

 

5.2.1                                 in
connection with the negotiation, preparation, execution and, where relevant,
registration of the Security Documents (including, for the avoidance of doubt,
any expenses incurred by the Creditors or any of them in connection with the
legal opinions obtained pursuant to schedule 3) and of any amendment or
extension of or the granting of any waiver or consent under, any of the
Security Documents and the syndication of the Loan; and

 

5.2.2                                 in
contemplation of, or otherwise in connection with, the enforcement of, or
preservation of any rights under, any of the Security Documents, or otherwise
in respect of the moneys owing under any of the Security Documents,

 

31

 

together with interest at the rate referred to in
clause 3.4 from the date on which such expenses were incurred to the date
of payment (as well after as before judgment).

 

5.3                    Value added tax

 

All fees and expenses payable pursuant to
this clause 5 shall be paid together with value added tax or any similar
tax (if any) properly chargeable thereon. Any value added tax chargeable in
respect of any services supplied by the Creditors or any of them under this
Agreement shall, on delivery of the value added tax invoice, be paid in
addition to any sum agreed to be paid hereunder.

 

5.4                    Stamp and other duties

 

The Borrowers shall pay all stamp,
documentary, registration or other like duties or taxes (including any duties
or taxes payable by any of the Creditors) imposed on or in connection with any
of the Underlying Documents, the Security Documents or the Loan and shall
indemnify the Creditors or any of them against any liability arising by reason
of any delay or omission by the Borrowers to pay such duties or taxes.

 

6                              Payments and taxes; accounts
and calculations

 

6.1                    No set-off or counterclaim

 

The Borrowers acknowledge that in
performing their obligations under this Agreement, the Banks will be incurring
liabilities to third parties in relation to the funding of amounts to the
Borrowers, such liabilities matching the liabilities of the Borrowers to the
Banks and that it is reasonable for the Banks to be entitled to receive
payments from the Borrowers gross on the due date in order that each of the
Banks is put in a position to perform its matching obligations to the relevant
third parties. Accordingly, all payments to be made by the Borrowers under any
of the Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and, subject as provided in clause 6.6, free and
clear of any deductions or withholdings, in Dollars on the due date to such
account at such bank and in such place as the Agent may from time to time
specify for this purpose. Save as otherwise provided in this Agreement or any
relevant Security Documents, such payments shall be for the account of all
Banks and the Agent shall distribute such payments in like funds as are
received by the Agent to the Banks rateably in accordance with their respective
Commitment (if prior to the first drawdown) or Contribution (if following the
first drawdown).

 

6.2                    Payment by the Banks

 

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

 

6.3                    Non-Banking Days

 

When any payment under any of the Security
Documents would otherwise be due on a day which is not a Banking Day, the due
date for payment shall be extended to the next following Banking Day unless
such Banking Day falls in the next calendar month in which case payment shall
be made on the immediately preceding Banking Day.

 

6.4                    Calculations

 

All interest and other payments of an
annual nature under any of the Security Documents shall accrue from day to day
and be calculated on the basis of actual days elapsed and a three hundred and
sixty (360) days year.

 

32

 

6.5                    Certificates conclusive

 

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

 

6.6                    Grossing-up for Taxes - by the Borrowers

 

6.6.1                                 If at
any time the Borrowers or any of them are required to make any deduction or
withholding in respect of Taxes from any payment due under any of the Security
Documents for the account of any Creditor or if the Agent or the Security Agent
is required to make any deduction or withholding from a payment to another
Creditor or withholding in respect of Taxes from any payment due under any of
the Security Documents, the sum due from the Borrowers or any of them in
respect of such payment shall be increased to the extent necessary to ensure
that, after the making of such deduction or withholding, the relevant Creditor
receives on the due date for such payment (and retains, free from any liability
in respect of such deduction or withholding), a net sum equal to the sum which it
would have received had no such deduction or withholding been required to be
made and the Borrowers shall indemnify each Creditor against any losses or
costs incurred by it by reason of any failure of the Borrowers or any of them
to make any such deduction or withholding or by reason of any increased payment
not being made on the due date for such payment. The Borrowers shall promptly
deliver to the Agent any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding as
aforesaid.

 

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

 

6.7                    Loan account

 

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

 

6.8                    Agent may assume receipt

 

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

 

33

 

6.9                    Partial payments

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7                              Representations and warranties

 

7.1                    Continuing representations and warranties

 

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

 

7.1.1                                 Due
incorporation

 

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

 

7.1.2                                 Corporate
power

 

each of the Borrowers has power to execute,
deliver and perform its obligations under the Underlying Documents and the
relevant Borrowers’ Security Documents 
to which it is or is to 

 

34

 

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

 

7.1.3                                 Binding
obligations

 

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

 

7.1.4                                 No
conflict with other obligations

 

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

 

7.1.5                                 No
litigation

 

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

 

7.1.6                                 No
filings required

 

save for the registration of the Mortgages
in the relevant register under the laws of the relevant Flag State through the
relevant Registry, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of any of the Underlying Documents
or any of the Security Documents that they or any other instrument be notarised,
filed, recorded, registered or enrolled in any court, public office or
elsewhere in any Relevant Jurisdiction or that any stamp, registration or
similar tax or charge be paid in any Relevant Jurisdiction on or in relation to
any of the Underlying Documents or the Security Documents and each of the
Underlying Documents and the Security Documents is in proper form for its
enforcement in the courts of each Relevant Jurisdiction;

 

7.1.7                                 Choice
of law

 

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

 

35

 

7.1.8                                 No
immunity

 

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

 

7.1.9                         Financial
statements correct and complete

 

the audited consolidated financial statements of the Group in respect
of the financial year ended on 31 December 2005 as delivered to the Agent have
been prepared in accordance with the Applicable Accounting Principles which
have been consistently applied and present fairly and accurately the consolidated
financial position of the Group as at such date and the consolidated results of
the operations of the Group for the financial year ended on such date and, as
at such date, neither the Aegean Marine Guarantor nor any other member of the
Group had any significant liabilities (contingent or otherwise) or any
unrealised or anticipated losses which are not disclosed by, or reserved against
or provided for in, such financial statements;

 

7.1.10                   Consents obtained

 

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

 

7.1.11                           Shareholdings

 

each of the Borrowers is a wholly-owned
direct Subsidiary of the Aegean Shipholdings Guarantor, each of the Aegean
Shipholdings Guarantor and the Manager is a wholly-owned direct Subsidiary of
the Aegean Marine Guarantor and all of the shares in the Aegean Marine Guarantor
are legally and ultimately beneficially owned by such persons as disclosed by
or on behalf of the Borrowers or any other Security Party to the Arranger
and/or the Agent in the negotiation of this Agreement.

 

7.2                    Initial representations and warranties

 

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

 

7.2.1                                 Pari
passu

 

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

 

7.2.2                                 No
default under other Indebtedness

 

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

 

36

 

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

 

7.2.3                                 Information

 

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

 

7.2.4                                 No
withholding Taxes

 

no Taxes are imposed by withholding or
otherwise on any payment to be made by any Security Party under the Underlying
Documents or the Security Documents to which such Security Party is or is to be
a party or are imposed on or by virtue of the execution or delivery by the
Security Parties of the Underlying Documents or the Security Documents or any
other document or instrument to be executed or delivered under any of the
Security Documents;

 

7.2.5                                 No
Default

 

no Default has occurred and is continuing;

 

7.2.6                                 No
Default under Contracts or Refund Guarantees

 

no Borrower is in default of any of its
obligations under the relevant Contract or the relevant Supervision Agreement or
any of its obligations upon the performance or observance of which depends the
continued liability of any Refund Guarantor in accordance with the terms of any
Refund Guarantee relating to such Borrower’s Ship;

 

7.2.7                                 No
Encumbrance in respect of pre-delivery security

 

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

 

7.2.8                                 The
Ships

 

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

 

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

 

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

 

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

 

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

 

7.2.9                                 Ships’
employment

 

none of the Ships is nor will, on or before
the Drawdown Date of the Delivery Advance relevant to such Ship, be subject to
any charter or contract or to any agreement to enter into 

 

37

 

any charter or contract which, if entered
into after the date of the relevant Ship Security Documents would have required
the consent of the Agent or, as the context may require, the Security Agent
and, on or before the Drawdown Date of the Delivery Advance relevant to such
Ship, there will not be any agreement or arrangement whereby the Earnings of
such Ship may be shared with any other person;

 

7.2.10                           Freedom
from Encumbrances

 

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

 

7.2.11                           Compliance
with Environmental Laws and Approvals

 

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

 

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

 

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

 

(c)              neither the Borrowers
nor any other Relevant Party nor, to the best of the Borrowers’ knowledge and
belief (having made due enquiry), any of their respective Environmental
Affiliates has received notice of any Environmental Claim that the Borrowers or
any other Relevant Party or any such Environmental Affiliate is not in
compliance with any Environmental Law or any Environmental Approval;

 

7.2.12                           No
Environmental Claims

 

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

 

7.2.13                           No
potential Environmental Claims

 

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

 

7.2.14                           No material
adverse change

 

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

 

38

 

7.2.15                           Copies true
and complete

 

the copies or originals of the Underlying
Documents delivered or to be delivered to the Agent pursuant to clause 9.1
are, or will when delivered be, true and complete copies or, as the case may
be, originals of such documents; and such documents constitute valid and
binding obligations of the parties thereto enforceable in accordance with their
respective terms and there have been no amendments or variations thereof or
defaults thereunder;

 

7.2.16                           ISPS Code

 

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

 

7.2.17                           Borrowers’
own account

 

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

 

7.3                    Repetition of representations and warranties

 

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

 

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

 

(b)             be deemed to further
represent and warrant to each of the Creditors that the then latest audited
financial statements delivered to the Agent by the Borrowers (if any) have been
prepared in accordance with the Applicable Accounting Principles which have
been consistently applied and present fairly and accurately the consolidated financial
position of the Group as at the end of the financial period to which the same
relate and the consolidated results of the operations of the Group for the
financial period to which the same relate and, as at the end of such financial
period, no member of the Group had any significant liabilities (contingent or
otherwise) or any unrealised or anticipated losses which are not disclosed by,
or reserved against or provided for in, such financial statements.

 

8                              Undertakings

 

8.1                    General

 

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

 

8.1.1                                 Notice
of Default

 

(a)              promptly inform the
Agent of any occurrence of which it becomes aware which might adversely affect
the ability of any Security Party to perform its obligations under any of the
Security Documents or the Underlying Documents to which it is or is to be a
party and, without limiting the generality of the foregoing, will inform the
Agent of any Default forthwith upon becoming aware thereof and will from time
to time, if so requested by the 

 

39

 

Agent,
confirm to the Agent in writing that, save as otherwise stated in such
confirmation, no Default has occurred and is continuing; and

 

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

 

8.1.2                                 Consents
and licences

 

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

 

8.1.3                                 Use
of proceeds

 

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

 

8.1.4                                 Pari
passu

 

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

 

8.1.5                                 Financial
statements

 

prepare or cause to be prepared:

 

(a)              consolidated financial
statements of the Group in accordance with the Applicable Accounting Principles
consistently applied in respect of each financial year (starting with the
financial year ending on 31 December 2006) and cause the same to be reported on
by their auditors;

 

(b)             consolidated financial
statements of the Group in accordance with the Applicable Accounting Principles
consistently applied in respect of each financial quarter (starting with the
financial quarter ending 31 March 2006); and

 

(c)              unaudited financial
statements of the Borrowers in accordance with the Applicable Accounting
Principles consistently applied in respect of each financial year,

 

and, in
each case, deliver as many copies of the same as the Agent may reasonably
require as soon as practicable but not later than ninety (90) days (in the case
of the audited financial statements) or forty five (45) days (in the case of
the unaudited financial statements) after the end of the financial period to
which they relate;

 

8.1.6                                 Delivery
of reports

 

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

 

40

 

8.1.7                                 Provision
of further information

 

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

 

8.1.8                                 Obligations
under Security Documents

 

and will procure that each of the other
Security Parties will, duly and punctually perform each of the obligations
expressed to be assumed by it under the Security Documents and the Underlying
Documents to which it is a party;

 

8.1.9                                 Compliance
with Code

 

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

 

8.1.10                           Withdrawal
of DOC and SMC

 

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

 

8.1.11                           Issuance of
DOC and SMC

 

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

 

8.1.12                           ISPS Code compliance

 

and will procure that the Manager or any
Operator will:

 

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

 

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

 

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

 

8.1.13                           Charters

 

provided it has first obtained the consent
of the Security Agent or any other Creditors in accordance with the relevant
Ship Security Documents and/or clause 8.5, (i) deliver to the Agent, a
certified copy of each time charter or other contract of employment of its Ship
with a tenor (including any options to extend) exceeding six (6) months,
forthwith after its execution, (ii) forthwith on the Agent’s request execute
(1) a specific assignment of any such time charter or other contract of
employment in favour of the Security Agent in a form acceptable to the Agent in
its sole discretion and (2) any notice of assignment required in connection
therewith in a form acceptable to the Agent in its sole discretion, and
promptly procure the acknowledgement of any such notice of assignment by the
relevant charterer in a form acceptable to the Agent in its sole discretion,
and (iii) pay all legal and other costs incurred by 

 

41

 

any Creditor in connection with any such
specific assignments, forthwith following the Agent’s demand.

 

8.2                    Security value maintenance

 

8.2.1                                 Security
shortfall

 

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

 

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

 

(b)             within thirty (30) days
of the date of receipt by the Borrowers of the Agent’s said notice constitute
to the satisfaction of the Majority Banks such further security for the Loan
and any amounts owing under the Master Swap Agreements as shall be acceptable
to the Banks having a value for security purposes (as determined by the Agent
in its absolute discretion) at the date upon which such further security shall
be constituted which, when added to the Security Value, shall not be less than
the Security Requirement as at such date.

 

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

 

8.2.2                                 Valuation
of Mortgaged Ships

 

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

 

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

 

8.2.3                                 Information

 

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

 

8.2.4                                 Costs

 

All costs in connection with the Agent
obtaining any valuation of each of the Mortgaged Ships referred to in clause
8.2.2, any valuation referred to in schedule 3, Part 4, paragraph 19 and any
valuation either of any additional security for the purposes of ascertaining
the Security Value at any time or necessitated by the Borrowers electing to
constitute additional security pursuant to clause 8.2.1(b), shall be borne
by the Borrowers.

 

42

 

8.2.5                                 Valuation
of additional security

 

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

 

8.2.6                                 Documents
and evidence

 

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

 

8.3                    Negative undertakings

 

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

 

8.3.1                                 Negative
pledge

 

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

 

8.3.2                                 No
merger

 

merge or consolidate with any other person
or enter into any demerger, amalgamation, corporate reconstruction or
redomiciliation of any kind;

 

8.3.3                                 Disposals

 

sell, transfer, abandon, lend or otherwise
dispose of or cease to exercise direct control over any part (being, either
alone or when aggregated with all other disposals falling to be taken into
account pursuant to this clause 8.3.3, material in the opinion of the
Agent in relation to the undertaking, assets, rights and revenues of a Borrower
taken as a whole) of their present or future undertaking, assets, rights or
revenues (otherwise than by transfers, sales or disposals for full
consideration in the ordinary course of trading, which however shall exclude
any assets, rights or revenues which are the subject of the Security Documents)
whether by one or a series of transactions related or not;

 

8.3.4                                 Other
business

 

undertake any business other than the
ownership and operation of the Ships and will procure that neither Corporate
Guarantor will, without the prior written consent of the Agent (acting on the
instructions of the Majority Banks), undertake any business other than that
conducted by such Corporate Guarantor at the date of this Agreement;

 

8.3.5                                 Acquisitions

 

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

 

43

 

8.3.6                                 Other
obligations

 

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

 

8.3.7                                 No
borrowing

 

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

 

8.3.8                                 Repayment
of borrowings

 

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

 

8.3.9                                 Guarantees

 

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

 

8.3.10                           Loans

 

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

 

8.3.11                           Sureties

 

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

 

8.3.12                           Share
capital and distribution

 

purchase or otherwise acquire for value any
shares of their capital or declare or pay any dividends or distribute any of
their present or future assets, undertakings, rights or revenues to any of
their shareholders Provided always that following
the Listing Date, the Borrowers may declare or pay dividends to their
respective shareholders in respect of any financial year if no Default shall
have occurred at the time of declaration or payment of such dividends or would
occur as a result thereof;

 

8.3.13                           Subsidiaries

 

form or acquire any Subsidiaries;

 

8.3.14                           Shareholdings

 

permit any change in the legal and/or
ultimate beneficial ownership of any of the shares in any of the Borrowers, the
Aegean Shipholdings Guarantor, the Manager or the Aegean Marine Guarantor from
that specified in clause 7.1.11 Provided however that
following the Listing Date such restriction, insofar as it relates to the
shares in the Aegean Marine Guarantor, shall only apply in respect of the
ultimate beneficial ownership of thirty five per cent (35%) of the issued shares
in the Aegean Marine Guarantor which shall at all times after the Listing Date
remain ultimately beneficially owned by the persons who are the ultimate 

 

44

 

beneficial owners of all of the shares in
the Aegean Marine Guarantor on the date of this Agreement as specified in
clause 7.1.11 Provided further that, in any
event, such persons shall not, at any time after the Listing Date, ultimately
beneficially own in aggregate less issued shares in the Aegean Marine Guarantor
than any other person; or

 

8.3.15                           Hedging
arrangements

 

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

 

8.4                    Pre-delivery positive undertakings

 

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

 

8.4.1                                 Conveyance
on default

 

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

 

8.4.2                                 Flag
State

 

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

 

8.4.3                                 Mortgage

 

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

 

8.5                    Pre-delivery negative undertaking

 

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

 

8.5.1                                 on
demise charter for any period; or

 

8.5.2                                 by
any time or consecutive voyage charter for a term which exceeds or which by
virtue of any optional extensions therein contained may exceed six (6) months’
duration; or

 

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

 

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

 

45

 

9                              Conditions

 

9.1                    Documents and evidence

 

9.1.1                                 Commitments

 

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

 

9.1.2                                 First
Contract Instalment Advances

 

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

 

9.1.3                                 Second,
third and fourth Contract Instalment Advances

 

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

 

9.1.4                                 Delivery
Advances

 

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

 

9.1.5                                 Additional
Cost Advances

 

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

 

9.2                    General conditions precedent

 

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

 

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

 

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

 

46

 

9.3                    Waiver of conditions precedent

 

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

 

9.4                    Further conditions precedent

 

Not later than five (5) Banking Days prior
to each Drawdown Date and not later than five (5) Banking Days prior to each
Interest Payment Date, the Agent (acting on the instructions of the Majority
Banks) may request and the Borrowers shall, not later than two (2) Banking Days
prior to such date, deliver to the Agent on such request further relevant
certificates and/or favourable opinions as to any or all of the matters which
are the subject of clauses 7, 8, 9 and 10.

 

10                       Events of Default

 

10.1             Events

 

There shall be an Event of Default if:

 

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

 

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

 

10.1.3                           Breach
of Insurance and certain other obligations: any of
the Borrowers or, as the context may require, the Manager or any other person
fails to obtain and/or maintain the Insurances for any of the Mortgaged Ships
or if any insurer in respect of such Insurances cancels the Insurances or
disclaims liability by reason, in either case, of mis-statement in any proposal
for the Insurances or for any other failure or default on the part of any of
the Borrowers or any other person or any of the Borrowers commits any breach of
or omits to observe any of the obligations or undertakings expressed to be
assumed by them under clauses 8.2 or 8.3 or 8.4 or 8.5 or either Corporate
Guarantor commits any breach of or omits to observe any of the obligations or
undertakings expressed to be assumed by it under clauses 5.2 or 5.3 of the relevant
Corporate Guarantee; or

 

10.1.4                           Breach
of other obligations: any Security Party commits
any breach of or omits to observe any of its obligations or undertakings
expressed to be assumed by it under any of the Security Documents (other than
those referred to in clauses 10.1.1, 10.1.2 and 10.1.3 above) and, in
respect of any such breach or omission which in the opinion of the Agent
(following consultation with the Banks) is capable of remedy, such action as
the Agent (acting on the instructions of the Majority Banks) may require shall
not have been taken within fourteen (14) days of the Agent notifying the
relevant Security Party of such default and of such required action; or

 

10.1.5                           Misrepresentation: any representation or warranty made or deemed to be made or
repeated by or in respect of any Security Party in or pursuant to any of the
Security Documents or in any notice, certificate or statement referred to in or
delivered under any of the Security Documents is or proves to have been
incorrect or misleading in any material respect; or

 

47

 

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

 

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

 

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

 

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

 

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

 

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

 

10.1.12                     Appointment
of receivers and managers: any administrative or
other receiver is appointed of any Security Party or other Restricted Company
or any part of its assets and/or undertaking or any other steps are taken to
enforce any Encumbrance over all or any part of the assets of any Security
Party or other Restricted Company; or

 

10.1.13                     Compositions: any corporate action, legal proceedings or other procedures or
steps are taken, or negotiations commenced, by any Security Party or other
Restricted Company or by any of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or to proposing
any kind of composition, compromise or arrangement involving such company and
any of its creditors; or

 

10.1.14                     Analogous
proceedings: there occurs, in relation to any
Security Party or other Restricted Company, in any country or territory in
which any of them carries on business or to the jurisdiction of whose courts
any part of their assets is subject, any event which, in the reasonable opinion
of the Agent, appears in that country or territory to correspond with, or have
an effect equivalent or similar to, any of those mentioned in clauses 10.1.7 to
10.1.13 

 

48

 

(inclusive)
or any Security Party or other Restricted Company otherwise becomes subject, in
any such country or territory, to the operation of any law relating to
insolvency, bankruptcy or liquidation; or

 

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

 

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

 

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

 

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

 

10.1.19                     Repudiation: any Security Party repudiates any of the Security Documents or
does or causes or permits to be done any act or thing evidencing an intention
to repudiate any of the Security Documents; or

 

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

 

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

 

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

 

10.1.23                     Registration: the registration of any Ship under the laws and flag of the
relevant Flag State is cancelled or terminated without the prior written
consent of the Majority Banks or the registration of such Ship is not renewed
at least forty-five (45) days prior to the expiry of such registration; or

 

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

 

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

 

10.1.26                     P&I: any Borrower or the Manager or any other person fails or omits to
comply with any requirements of the protection and indemnity association or
other insurer with which a Ship is 

 

49

 

entered
for insurance or insured against protection and indemnity risks (including oil
pollution risks) to the effect that any cover (including, without limitation,
any cover in respect of liability for Environmental Claims arising in
jurisdictions where such Ship operates or trades) is or may be liable to
cancellation, qualification or exclusion at any time; or

 

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

 

10.1.28                     Shareholdings: there is any change in the legal and/or ultimate beneficial
ownership of any of the shares of any of the Borrowers, either of the Corporate
Guarantors or the Manager from that existing on the date of this Agreement as specified
in clause 7.1.11 save for any change in respect of the shares in the Aegean
Marine Guarantor following the Listing Date which does not result in:

 

(a)              less than thirty five
per cent (35%) of the issued shares in the Aegean Marine Guarantor being
ultimately beneficially owned by the persons who are the ultimate beneficial
owners of all the shares in the Aegean Marine Guarantor on the date of this
Agreement as specified in clause 7.1.11 (for the purposes of this clause the “original beneficial owners”); or

 

(b)             the original beneficial
owners ultimately beneficially owning in aggregate less issued shares in the
Aegean Marine Guarantor than any other person; or

 

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

 

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

 

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

 

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

 

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

 

10.1.34                     Licenses,
etc:  any
license, authorisation, consent or approval at any time necessary to enable any
Security Party to comply with its obligations under the Security Documents or
the Underlying Documents is revoked or withheld or modified or is otherwise not
granted or fails to remain in full force and effect or if any exchange control
or other law or regulation shall exist which would make any transaction under
the Security Documents or the Underlying 

 

50

 

Documents
or the continuation thereof, unlawful or would prevent the performance by any
Security Party of any term of any of the Security Documents or the Underlying
Documents; or

 

10.1.35                     Listing: following the Listing Date, the shares of the Aegean Marine
Guarantor are de-listed or suspended from, or cease to trade (whether
temporarily or permanently) on, the New York Stock Exchange, NASDAQ or any
other stock exchange (as the case may be) where such shares are listed at such
time; or

 

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

 

10.2             Acceleration

 

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

 

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

 

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

 

10.3             Demand
basis

 

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

 

10.4             Position
of Swap Providers

 

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

 

11                       Indemnities

 

11.1             Miscellaneous
indemnities

 

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

 

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

 

11.1.2                           the
occurrence of any other Event of Default;

 

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

 

51

 

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

 

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

 

11.2             Currency
indemnity

 

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

 

11.3             Environmental
indemnity

 

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

 

11.4             Central
Bank or European Central Bank reserve requirements indemnity

 

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

 

12                       Unlawfulness and increased
costs

 

12.1             Unlawfulness

 

If it is or becomes contrary to any law or
regulation for any Bank to contribute to an Advance or to maintain its
Commitment or fund the Loan, such Bank shall promptly, through the Agent, give
notice to the Borrowers whereupon (a) such Bank’s Commitment shall be reduced
to zero and 

 

52

 

(b) the Borrowers shall be obliged to
prepay such Bank’s Commitment either (i) forthwith or (ii) on a future
specified date not being earlier than the latest date permitted by the relevant
law or regulation together with interest accrued to the date of prepayment and
all other sums payable by the Borrowers under this Agreement and/or the Master
Swap Agreements or any of them.

 

12.2             Increased
costs

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)             the Borrowers shall on
demand made at any time whether or not such Bank’s Contribution has been
repaid, pay to the Agent for the account of such Bank the amount which such
Bank specifies (in a certificate setting forth the basis of the computation of
such amount but not including any matters which such Bank or its holding
company regards as confidential) is required to compensate such Bank and/or (as
the case may be) its holding company for such liability to Taxes, cost,
reduction, payment , forgone return or loss.

 

For the purposes of this clause 12.2 “holding company” means the company or entity (if any) within
the consolidated supervision of which a Bank is included.

 

12.3             Exception

 

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

 

53

 

13                       Security, set-off and pro-rata
payments

 

13.1             Application
of moneys

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.2             Set-off

 

13.2.1                           The
Borrowers authorise each Creditor (without prejudice to any of such Creditor’s
rights at law, in equity or otherwise), at any time after the occurrence of an
Event of Default and without notice to the Borrowers, to apply any credit
balance to which the Borrowers or any of them is then entitled standing upon
any account of the Borrowers or any of them with any branch of such Creditor in
or towards satisfaction of any sum due and payable from the Borrowers or any of
them to such Creditor under any of the Security Documents. For this purpose,
each Creditor is authorised to purchase with the moneys standing to the credit
of such account such other currencies as may be necessary to effect such
application.

 

13.2.2                           No Creditor
shall be obliged to exercise any right given to it by this clause 13.2. Each
Creditor shall notify the Borrowers through the Agent forthwith upon the
exercise or purported exercise of any right of set-off giving full details in
relation thereto and the Agent shall inform the other Creditors.

 

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

 

13.3             Pro
rata payments

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.4             No
release

 

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

 

13.5             No
charge

 

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

 

13.6             Further
assurance

 

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

 

55

 

13.7             Conflicts

 

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

 

14                       Accounts

 

14.1             General

 

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

 

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

 

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

 

14.2             Operating
Accounts: withdrawals

 

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

 

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

 

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

 

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

 

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

 

14.2.5                           to pay
dividends to the extent permitted by clause 8.3.12.

 

14.3             Retention
Account: credits and withdrawals

 

14.3.1                           The
Borrowers hereby jointly and severally undertake with each Creditor that they
will, from the date of this Agreement and so long as any moneys are owing under
the Security Documents, on each Retention Date pay to the Account Bank for
credit to the Retention Account, the Retention Amount for such Retention Date
provided however that, to the extent that there are moneys standing to the
credit of the Operating Accounts (or any of them) as at any Retention Date,
such moneys shall, up to an amount equal to the Retention Amount for such
Retention Date, be transferred to the Retention Account on that Retention Date
(and the Borrowers hereby irrevocably authorise the Account Bank to effect each
such transfer) and to that extent the Borrowers’ obligations to make the
payments referred to in this clause 14.3.1 shall have been fulfilled upon
such transfer being effected. The obligation of the Borrowers under this clause
14.3.1 to pay moneys to the credit of the Retention Account shall cease to
exist on the date falling after the Listing Date when the Aegean Marine
Guarantor shall have complied with the financial undertakings contained in
clause 5.3.1 of the Aegean Marine Guarantee.

 

56

 

14.3.2                           Unless and
until there shall occur an Event of Default (whereupon the provisions of
clause 14.4 shall apply), each Retention Amount in respect of a Tranche
credited to the Retention Account together with interest from time to time
accruing or at any time accrued thereon shall be applied by the Account Bank
(and the Borrowers hereby irrevocably authorise the Account Bank so to apply
the same) upon each Repayment Date for the relevant Tranche and/or on each day
that interest is payable pursuant to clause 3.1 on such Tranche, in or
towards payment to the Agent of the relevant instalment then falling due for
repayment or, as the case may be, the relevant amount of interest then due. Each
such application by the Account Bank shall constitute a payment in or towards
satisfaction of the Borrowers’ corresponding payment obligations under this
Agreement but shall be strictly without prejudice to the obligations of each of
the Borrowers to make any such payment to the extent that the aforesaid
application by the Account Bank is insufficient to meet the same.

 

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

 

14.4      Application
of Accounts

 

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

 

14.5             Charging
of Accounts

 

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

 

15                       Assignment, transfer and
lending office

 

15.1             Benefit
and burden

 

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

 

15.2             No
assignment by Borrowers

 

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

 

15.3             Transfers
by Banks

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15.4             Reliance
on Transfer Certificate

 

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

 

58

 

15.4.2                           The Agent
shall at all times during the continuation of this Agreement maintain a
register in which it shall record the name, Commitments, Contributions and
administrative details (including the lending office) from time to time of the
Banks holding a Transfer Certificate and the date at which the transfer
referred to in such Transfer Certificate held by each Bank was transferred to
such Bank, and the Agent shall make the said register available for inspection
by any Bank or any Borrower during normal banking hours upon receipt by the
Agent of reasonable prior notice requesting the Agent to do so.

 

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

 

15.5             Transfer
fees and expenses

 

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

 

15.6             Documenting
transfers

 

If any Bank assigns all or any part of its
rights or transfers all or any part of its rights, benefits and/or obligations
as provided in clause 15.3, the Borrowers jointly and severally undertake,
immediately on being requested to do so by the Agent and at the cost of the
Transferor Bank, to enter into, and procure that the other Security Parties
shall (at the cost of the Transferor Bank) enter into, such documents as may be
necessary or desirable to transfer to the Transferee Bank all or the relevant
part of such Bank’s interest in the Security Documents and all relevant
references in this Agreement to such Bank shall thereafter be construed as a
reference to the Transferor Bank and/or its Transferee Bank (as the case may
be) to the extent of their respective interests.

 

15.7             Sub-participation

 

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

 

15.8             Lending
office

 

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

 

15.9             Disclosure
of information

 

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

 

59

 

16                       Arranger, Agent and Security
Agent

 

16.1             Appointment
of the Agent

 

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

 

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

 

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

 

16.2             Agent’s
actions

 

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

 

16.3             Agent’s
duties

 

The Agent shall:

 

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

 

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

 

16.4             Agent’s
rights

 

The Agent may:

 

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

 

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

 

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

 

60

 

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

 

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

 

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

 

16.5             No
liability of Arranger or Agent

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

61

 

16.6             Non-reliance
on Arranger or Agent

 

Each Bank and each Swap Provider acknowledges
that it has not relied on any statement, opinion, forecast or other
representation made by the Arranger or the Agent to induce it to enter into
this Agreement or any of the other Security Documents and that it has made and
will continue to make, without reliance on the Arranger or the Agent and based
on such documents as it considers appropriate, its own appraisal of the
creditworthiness of the Security Parties and its own independent investigation
of the financial condition, prospects and affairs of the Security Parties in
connection with the making and continuation of such Bank’s Commitment or
Contribution under this Agreement. Neither the Arranger nor the Agent shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Bank or either Swap Provider with any credit or other information
with respect to any Security Party whether coming into its possession before
the making of the Loan or at any time or times thereafter other than as
provided in clause 16.3.1.

 

16.7             No
responsibility on Arranger or Agent for Borrowers’ performance

 

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

 

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

 

16.7.2                           for the
financial condition of any Security Party; or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16.8             Reliance
on documents and professional advice

 

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

 

16.9             Other
dealings

 

Each of the Arranger and the Agent may,
without any liability to account to the Banks or the Swap Providers, accept
deposits from, lend money to, and generally engage in any kind of 

 

62

 

banking or other business with, and provide
advisory or other services to, any Security Party or any of its Related
Companies or any of the Banks or the Swap Providers as if it were not the Arranger
or, as the case may be, the Agent.

 

16.10      Rights of
Agent as Bank; no partnership

 

With respect to its own Commitment and
Contribution (if any) the Agent shall have the same rights and powers under the
Security Documents as any other Bank and may exercise the same as though it
were not performing the duties and functions delegated to it under this
Agreement and the term “Banks” shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity as a Bank. This Agreement shall not and shall not be
construed so as to constitute a partnership between the parties or any of them.

 

16.11      Amendments
and waivers

 

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

 

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

 

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

 

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

 

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

 

(a)              reduce the Margin;

 

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

 

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

 

(d)             increase any Bank’s
Commitment;

 

(e)              extend the Termination
Date;

 

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

 

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

 

(h)             change this
clause 16.11;

 

63

 

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

 

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

 

16.12      Reimbursement
and indemnity by Banks

 

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

 

16.13      Retirement
of Agent

 

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

 

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

 

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

 

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

 

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

 

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

 

64

 

16.14      Appointment
and retirement of Security Agent

 

16.14.1                     Appointment

 

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

 

16.14.2                     Retirement

 

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

 

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

 

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

 

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

 

and, in any case, such successor security agent and
trustee shall have duly accepted such appointment by delivering to the Agent
(i) written confirmation (in a form acceptable to the Agent) of such acceptance
agreeing to be bound by this Agreement in the capacity of Security Agent as if
it had been an original party to this Agreement and (ii) a duly executed Trust
Deed.

 

Any corporation into which the retiring Security Agent
may be merged or converted or any corporation with which the Security Agent may
be consolidated or any corporation resulting from any merger, conversion,
amalgamation, consolidation or other reorganisation to which the Security Agent
shall be a party shall, to the extent permitted by applicable law, be the
successor Security Agent under this Agreement, any Trust Deed and the other
Security Documents referred to in clause 16.14.1 without the execution or
filing of any document or any further act on the part of any of the parties to
this Agreement, any Trust Deed and the other Security Documents save that
notice of any such merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to each Security Party and the Banks
and the Swap Providers. Prior to any such successor being appointed, the Security
Agent agrees to consult with the Borrowers as to the identity of the proposed
successor and to take account of any reasonable objections which the Borrowers
may raise to such successor being appointed.

 

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

 

65

 

copies of such of its records as its successor
reasonably requires to carry out its functions under the Security Documents.

 

16.15      Powers and
duties of the Security Agent

 

16.15.1                     The Security
Agent shall have no duties, obligations or liabilities to any of the Banks, the
Swap Providers and the Agent beyond those expressly stated in any of the
Security Documents. Each of the Agent, the Banks and the Swap Providers hereby
authorises the Security Agent to enter into and execute:

 

(a)              each of the Security
Documents to which the Security Agent is or is intended to be a party; and

 

(b)             any and all such other
Security Documents as may be approved by the Agent in writing (acting on the
instructions of the Majority Banks) for entry into by the Security Agent,

 

and, in each and every case, to hold any
and all security thereby created upon trust for the Banks, the Swap Providers
and the Agent in the manner contemplated by this Agreement.

 

16.15.2                     Subject to
clause 16.15.3 the Security Agent may, with the prior consent of the
Majority Banks communicated in writing by the Agent, concur with any of the
Security Parties to:

 

(a)              amend, modify or
otherwise vary any provision of the Security Documents to which the Security
Agent is or is intended to be a party; or

 

(b)             waive breaches of, or
defaults under, or otherwise excuse performance of, any provision of the
Security Documents to which the Security Agent is or is intended to be a party.

 

Any such action so authorised and effected
by the Security Agent shall be promptly notified to the Banks, the Swap
Providers and the Agent by the Security Agent and shall be binding on the other
Creditors.

 

16.15.3                     The Security
Agent shall not concur with any Security Party with respect to any of the
matters described in clause 16.11.2 without the consent of the Banks
communicated in writing by the Agent.

 

16.15.4                     The Security
Agent shall (subject to the other provisions of this clause 16) take such
action or, as the case may be, refrain from taking such action, with respect to
any of its rights, powers and discretions as security agent and trustee, as the
Agent may direct. Subject as provided in the foregoing provisions of this
clause, unless and until the Security Agent shall have received such
instructions from the Agent, the Security Agent may, but shall not be obliged
to, take (or refrain from taking) such action under or pursuant to the Security
Documents referred to in clause 16.14.1 as the Security Agent shall deem
advisable in the best interests of the Creditors provided that (for the
avoidance of doubt), to the extent that this clause might otherwise be
construed as authorising the Security Agent to take, or refrain from taking,
any action of the nature referred to in clause 16.15.2 - and for which the
prior consent of the Banks is expressly required under clause 16.15.3 -
clauses 16.15.2 and 16.15.3 shall apply to the exclusion of this clause.

 

16.15.5                     None of the Banks
nor the Agent nor the Swap Providers shall have any independent power to
enforce any of the Security Documents referred to in clause 16.14.1 or to
exercise any rights, discretions or powers or to grant any consents or releases
under or pursuant to such Security Documents or any of them or otherwise have
direct recourse to the security and/or guarantees constituted by such Security
Documents or any of them except through the Security Agent.

 

16.15.6                     For the purpose
of this clause 16, the Security Agent may, rely and act in reliance upon
any information from time to time furnished to the Security Agent by the Agent
(whether pursuant to clause 16.15.7 or otherwise) unless and until the
same is superseded by further such information, so that the Security Agent
shall have no liability or responsibility to any party as a 

 

66

 

consequence
of placing reliance on and acting in reliance upon any such information unless
the Security Agent has actual knowledge that such information is inaccurate or
incorrect.

 

16.15.7                     Without prejudice
to the foregoing each of the Agent, the Swap Providers and the Banks (whether
directly or through the Agent) shall provide the Security Agent with such
written information as it may reasonably require for the purpose of carrying
out its duties and obligations under the Security Documents referred to in
clause 16.14.1.

 

16.15.8                     Each Bank shall
reimburse the Security Agent (rateably in accordance with such Bank’s
Commitment or Contribution), to the extent that the Security Agent is not
reimbursed by the Borrowers, for the costs, charges and expenses incurred by
the Agent which are expressed to be payable by the Borrowers under clause 5.2
including (in each case) the fees and expenses of legal or other professional
advisers. Each Bank shall on demand indemnify the Security Agent (rateably in
accordance with such Bank’s Commitment or Contribution) against all
liabilities, damages, costs and claims whatsoever incurred by the Security
Agent in connection with any of the Security Documents or the performance of
its duties under any of the Security Documents or any action taken or omitted
by the Security Agent under any of the Security Documents, unless such
liabilities, damages, costs or claims arise from the Security Agent’s own gross
negligence or wilful misconduct.

 

16.16      Trust
provisions

 

16.16.1                     The trusts
constituted or evidenced in or by this Agreement and the Trust Deed shall
remain in full force and effect until whichever is the earlier of:

 

(a)              the expiration of a
period of eighty (80) years from the date of this Agreement; and

 

(b)             receipt by the Security
Agent of confirmation in writing by the Agent that there is no longer
outstanding any Indebtedness (actual or contingent) which is secured or
guaranteed or otherwise assured by or under any of the Security Documents,

 

and the parties to this Agreement declare
that the perpetuity period applicable to this Agreement and the trusts declared
by the Trust Deed shall for the purposes of the Perpetuities and Accumulations
Act 1964 be the period of eighty (80) years from the date of this Agreement.

 

16.16.2                     In its capacity
as trustee in relation to the Security Documents specified in clause 16.14.1,
the Security Agent shall, without prejudice to any of the powers, discretions
and immunities conferred upon trustees by law (and to the extent not
inconsistent with the provisions of any of those Security Documents), have all
the same powers and discretions as a natural person acting as the beneficial
owner of such property and/or as are conferred upon the Security Agent by any
of those Security Documents.

 

16.16.3                     It is expressly
declared that, in its capacity as trustee in relation to the Security Documents
specified in clause 16.14.1, the Security Agent shall be entitled to
invest moneys forming part of the security and which, in the opinion of the
Security Agent, may not be paid out promptly following receipt in the name or
under the control of the Security Agent in any of the investments for the time
being authorised by law for the investment by trustees of trust moneys or in
any other property or investments whether similar to the aforesaid or not or by
placing the same on deposit in the name or under the control of the Security
Agent as the Security Agent may think fit without being under any duty to
diversify its investments and the Security Agent may at any time vary or
transpose any such property or investments for or into any others of a like
nature and shall not be responsible for any loss due to depreciation in value
or otherwise of such property or investments. Any investment of any part or all
of the security may, at the discretion of the Security Agent, be made or
retained in the names of nominees.

 

67

 

16.17      Independent
action by Creditors

 

None of the Creditors shall enforce,
exercise any rights, remedies or powers or grant any consents or releases under
or pursuant to, or otherwise have a direct recourse to the security and/or guarantees
constituted by any of the Security Documents without the prior written consent
of the Majority Banks but, Provided such consent has been obtained, it shall
not be necessary for any other Creditor to be joined as an additional party in
any proceedings for this purpose.

 

16.18      Common
Agent and Security Agent

 

The Agent and the Security Agent have
entered into the Security Documents in their separate capacities (a) as agent
for the Banks and the Swap Providers under and pursuant to this Agreement (in
the case of the Agent) and (b) as security agent and trustee for the Banks, the
Swap Providers and the Agent under and pursuant to this Agreement, to hold the
guarantees and/or security created by the Security Documents specified in
clause 16.14.1 on the terms set out in such Security Documents (in the
case of the Security Agent). However, from time to time the Agent and the
Security Agent may be the same entity. When the Agent and the Security Agent
are the same entity and any Security Document provides for the Agent to
communicate with or provide instructions to the Security Agent (and vice
versa), it will not be necessary for there to be any such formal communications
or instructions on those occasions.

 

16.19      Co-operation
to achieve agreed priorities of application

 

The Banks, the Swap Providers and the Agent
shall co-operate with each other and with the Security Agent and any receiver
under the Security Documents in realising the property and assets subject to
the Security Documents and in ensuring that the net proceeds realised under the
Security Documents after deduction of the expenses of realisation are applied
in accordance with clause 13.1 (unless otherwise expressly provided for in
any such Security Document).

 

16.20      Prompt
distribution of proceeds

 

Moneys received by any of the Creditors
(whether from a receiver or otherwise) pursuant to the exercise of (or
otherwise by virtue of the existence of) any rights and powers under or
pursuant to any of the Security Documents shall (after providing for all costs,
charges, expenses and liabilities and other payments ranking in priority) be
paid to the Agent for distribution (in the case of moneys so received by any of
the Creditors other than the Agent or the Security Agent) and shall be
distributed by the Agent or, as the case may be, the Security Agent (in the
case of moneys so received by the Agent or, as the case may be, the Security
Agent) in each case in accordance with clause 13.1. The Agent or, as the
case may be, the Security Agent shall make each such application and/or
distribution as soon as is practicable after the relevant moneys are received
by, or otherwise become available to, the Agent or, as the case may be, the
Security Agent save that (without prejudice to any other provision contained in
any of the Security Documents) the Agent or, as the case may be, the Security
Agent (acting on the instructions of the Majority Banks) or any receiver may
credit any moneys received by it to a suspense account for so long and in such
manner as the Agent or such receiver may from time to time determine with a
view to preserving the rights of the Agent and/or the Security Agent and/or the
Account Bank and/or the Arranger and/or the Banks and/or the Swap Providers or
any of them to provide for the whole of their respective claims against the
Borrowers or any other person liable.

 

17                       Notices and other matters

 

17.1             Notices

 

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

 

17.1.1                           be in
writing delivered personally or by first-class prepaid letter (airmail if
available) or facsimile transmission or other means of telecommunication in
permanent written form;

 

68

 

17.1.2                           be deemed
to have been received, subject as otherwise provided in the relevant Security
Document, in the case of a letter, when delivered personally or three (3) days
after it has been put in to the post and, in the case of a facsimile transmission
or other means of telecommunication in permanent written form, at the time of
despatch (provided that if the date of despatch is not a business day in the
country of the addressee or if the time of despatch is after the close of
business in the country of the addressee it shall be deemed to have been
received at the opening of business on the next such business day); and

 

17.1.3                           be sent:

 

(a)              if to the Borrowers or
any of them at:

 

c/o Aegean Bunkering Services Inc.

42 Hadjikyriakou Street

185 38 Piraeus

Greece

 

Fax no:                         +30 210 458 6242

Attn:                                   Mr A. Manitsas

 

(b)             if to the Arranger and/or
Agent and/or the Account Bank and/or the Security Agent at:

 

Aegean Baltic Bank S.A.

28 Diligianni Street

145 62 Kifissia

Greece

 

Fax No:                       +30 210 62 34 192

Attn:                                   Business Development

 

(c)              if to a Bank, to its
address or fax number specified in schedule 1 or in any relevant Transfer
Certificate; and

 

(d)             if to a Swap Provider, to
its address or fax number specified in paragraph (a) of Part 4 of the Schedule
to the relevant Master Swap Agreement,

 

or to such other address and/or numbers as
is notified by one party to the other parties under this Agreement.

 

17.2             Notices
through the Agent

 

Every notice, request, demand or other
communication under this Agreement or (unless otherwise provided therein) any
other Security Document to be given by the Borrowers or any of them to any
other party (other than the Swap Providers), shall be given to the Agent for
onward transmission as appropriate and if it is to be given to the Borrowers it
shall (except otherwise provided in the Security Documents) be given to the
Agent.

 

17.3             No
implied waivers, remedies cumulative

 

No failure or delay on the part of a
Creditor to exercise any power, right or remedy under any of the Security Documents
shall operate as a waiver thereof, nor shall any single or partial exercise by
such Creditor of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy. The
remedies provided in the Security Documents are cumulative and are not
exclusive of any remedies provided by law.

 

17.4             English
language

 

All certificates, instruments and other
documents to be delivered under or supplied in connection with any of the
Security Documents shall be in the English language or shall be accompanied by
a certified English translation upon which the Creditors or any of them shall
be entitled to rely.

 

69

 

17.5             Borrowers’
obligations

 

17.5.1                           Joint and
several

 

Notwithstanding anything to the contrary
contained in any of the Security Documents, the agreements, obligations and
liabilities of the Borrowers herein contained are joint and several and shall
be construed accordingly. Each of the Borrowers agrees and consents to be bound
by the Security Documents to which it is, or is to be, a party notwithstanding
that the other Borrowers which are intended to sign or to be bound may not do
so or be effectually bound and notwithstanding that any of the Security Documents
may be invalid or unenforceable against the other Borrowers, whether or not the
deficiency is known to any of the Creditors.

 

17.5.2                           Borrowers
as principal debtors

 

Each Borrower acknowledges and confirms
that it is a principal and original debtor in respect of all amounts which may
become payable by the Borrowers in accordance with the terms of this Agreement
or any of the other Security Documents and agrees that the Creditors may also
continue to treat it as such, whether or not any Creditor is or becomes aware
that such Borrower is or has become a surety for the other Borrowers.

 

17.5.3                           Indemnity

 

The Borrowers hereby agree jointly and
severally to keep the Creditors fully indemnified on demand against all
damages, losses, costs and expenses arising from any failure of any Borrower to
perform or discharge any purported obligation or liability of the other
Borrowers which would have been the subject of this Agreement or any other
Security Document had it been valid and enforceable and which is not or ceases
to be valid and enforceable against the other Borrowers on any ground
whatsoever, whether or not known to a Creditor including, without limitation,
any irregular exercise or absence of any corporate power or lack of authority
of, or breach of duty by, any person purporting to act on behalf of the other
Borrowers (or any legal or other limitation, whether under the Limitation Acts
or otherwise or any disability or death, bankruptcy, unsoundness of mind,
insolvency, liquidation, dissolution, winding up, administration, receivership,
amalgamation, reconstruction or any other incapacity of any person whatsoever
(including, in the case of a partnership, a termination or change in the
composition of the partnership) or any change of name or style or constitution
of any Security Party).

 

17.5.4                           Liability
unconditional

 

None of the obligations or liabilities of
the Borrowers under this Agreement or any other Security Document shall be
discharged or reduced by reason of:

 

(a)              the death, bankruptcy,
unsoundness of mind, insolvency, liquidation, dissolution, winding-up,
administration, receivership, amalgamation, reconstruction or other incapacity
of any person whatsoever (including, in the case of a partnership, a
termination or change in the composition of the partnership) or any change of
name or style or constitution of any Borrower or any other person liable;

 

(b)             the Agent (acting on the
instructions of the Majority Banks) granting any time, indulgence or concession
to, or compounding with, discharging, releasing or varying the liability of,
any Borrower or any other person liable or renewing, determining, varying or
increasing any accommodation, facility or transaction or otherwise dealing with
the same in any manner whatsoever or concurring in, accepting, varying any
compromise, arrangement or settlement or omitting to claim or enforce payment
from any Borrower or any other person liable; or

 

(c)              anything done or omitted
which but for this provision might operate to exonerate the Borrowers or any of
them.

 

70

 

17.5.5                           Recourse to
other security

 

The Creditors shall not be obliged to make
any claim or demand or to resort to any Security Document or other means of
payment now or hereafter held by or available to it for enforcing this
Agreement or any of the Security Documents against any Borrower or any other
person liable and no action taken or omitted by any Creditor in connection with
any such Security Document or other means of payment will discharge, reduce, prejudice
or affect the liability of the Borrowers under this Agreement and the Security
Documents to which any of them is, or is to be, a party.

 

17.5.6                           Waiver of
Borrowers’ rights

 

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

 

(a)              exercise any right of
subrogation, reimbursement and indemnity against the other Borrowers or any
other person liable under the Security Documents;

 

(b)             demand or accept
repayment in whole or in part of any Indebtedness now or hereafter due to such
Borrower from the other Borrowers or from any other person liable or demand or
accept any guarantee, indemnity or other assurance against financial loss or
any document or instrument created or evidencing an Encumbrance in respect of
the same or dispose of the same;

 

(c)              take any steps to
enforce any right against the other Borrowers or any other person liable in
respect of any such moneys; or

 

(d)             claim any set-off or
counterclaim against the other Borrowers or any other person liable or claiming
or proving in competition with any Creditor in the liquidation of the other
Borrowers or any other person liable or have the benefit of, or share in, any
payment from or composition with, the other Borrowers or any other person
liable or any other Security Document now or hereafter held by any Creditor for
any moneys owing under this Agreement or for the obligations or liabilities of
any other person liable but so that, if so directed by the Agent, it will prove
for the whole or any part of its claim in the liquidation of the other
Borrowers or other person liable on terms that the benefit of such proof and
all money received by it in respect thereof shall be held on trust for the
Banks and applied in or towards discharge of any moneys owing under this
Agreement in such manner as the Agent (acting on the instructions of the
Majority Banks) shall deem appropriate.

 

17.5.7                           Maximum liability

 

(a)              Each Borrower shall be
entitled to rights of contribution as against the other Borrowers however, such
rights of contribution shall (i) not in any way (except as otherwise expressly
set forth in clause 17.5.7(b) below) condition or lessen the liability of
each Borrower as a joint and several borrower for the whole of the obligation
owed to the Creditors hereunder, and under the Security Documents and (ii) be
fully subject and subordinate to the rights of the Creditors against the
Borrowers hereunder, and under the Security Documents.

 

(b)             Notwithstanding anything
to the contrary contained in this Agreement, or any of the Security Documents,
in the event that any court or other judicial body of competent jurisdiction
determines that legal principles of fraudulent conveyances, fraudulent
transfers or similar concepts are applicable in evaluating the enforceability
against any particular Borrower or its assets of this Agreement or any Security
Document granted by the Borrowers as security for their respective obligations
thereunder and that under such principles, this Agreement or such other
Security Document would not be enforceable against such Borrower or its assets
unless the following provisions of this 

 

71

 

clause 17.5.7(b)
had effect, then, the maximum liability of any of the Borrowers hereunder, (the
“Maximum Liability Amount”) shall be
limited so that in no event shall such amount exceed the lesser of (i) the
obligations of the Borrowers hereunder (in the principal amount of up to Twenty
six million two hundred and fifty thousand Dollars ($26,250,000), plus
interest, expenses and fees and any amounts owing under the Master Swap
Agreements from time to time), and (ii) an amount equal to the aggregate,
without double counting, of (A) ninety-five per cent (95%) of such Borrower’s
Adjusted Net Worth (as hereinafter defined) on the date hereof, on the date of
commencement of a case under the Bankruptcy Code of the United States of
America, as amended (11 U.S.C. ss 101-1330) (the “Bankruptcy
Code”) or any similar legislation in any other jurisdiction, in
which such Borrower is a debtor, or on the date enforcement of this Agreement
is sought (the “Determination Date”), whichever is
greater, (B) the aggregate fair value of such Borrower’s Subrogation and
Contribution Rights (as hereinafter defined) and (C) the amount of any Valuable
Transfer (as hereinafter defined) to such Borrower; provided that any Borrower’s
liability under this Agreement shall further be limited to the extent, if any,
required so that the obligations of any Borrower under this Agreement shall not
be subject to avoidance under Section 548 of the Bankruptcy Code or any
similar provision under the legislation of any other relevant jurisdiction, or
to being set aside or annulled under any applicable law relating to fraudulent
transfers or fraudulent conveyances. In determining the limitations, if any, on
the amount of any Borrower’s obligations hereunder pursuant to the preceding
sentence, any rights of subrogation or contribution (collectively the “Subrogation and Contribution Rights”) which such Borrower
may have on the Determination Date with respect to the Funding Borrower (as
hereinafter defined) under applicable law shall be taken into account.

 

(c)              As used herein “Adjusted Net Worth” of each Borrower shall mean, as of any
date of determination thereof, an amount equal to the lesser of (i) an amount
equal to the excess of (A) the amount of the present fair saleable value of the
assets of such Borrower over (B) the amount that will be required to pay such
Borrower’s probable liability on its then existing debts, including contingent
liabilities, as they become absolute and matured, and (ii) an amount equal to the
excess of (aa) the sum of such Borrower’s property at a fair valuation over
(bb) the amount of all liabilities of such Borrower, contingent or otherwise,
as such terms are construed in accordance with applicable federal and state
laws in the United States of America, or the laws of other applicable
jurisdictions, governing determinations of the insolvency of debtors.

 

(d)             In determining the
Adjusted Net Worth of each Borrower for purposes of calculating the Maximum
Liability Amount for such Borrower, the liabilities of such Borrower to be used
in such determination pursuant to each clause of the preceding sentence
shall in any event exclude (i) the liabilities of such Borrower under this
Agreement, (ii) any liabilities of such Borrower subordinated in right of
payment to this Agreement and (iii) any liabilities of such Borrower for
Subrogation and Contribution Rights to the other Borrowers.

 

(e)              As used herein “Valuable Transfer” shall mean, in respect of each Borrower,
(i) all loans, advances or capital contributions made to such Borrower with
proceeds of the Loan, (ii) all debt securities or other obligations of such
Borrower acquired from such Borrower or retired by such Borrower with proceeds
of the Loan and transferred, absolutely and not as collateral, to such
Borrower, (iii) the fair market value of all property acquired with proceeds of
the Loan and transferred, absolutely and not as collateral, to such Borrower, (iv)
all equity securities of such Borrower acquired from such Borrower with
proceeds of the Loan and (v) the value of any other economic benefits in
accordance with applicable federal and state laws, or the laws of other
applicable jurisdictions, governing determinations of the insolvency of
debtors, in each case accruing to such Borrower as a result of the Loan.

 

(f)                Without in any way
modifying or affecting the obligations of any of the Borrowers hereunder, in
the event any of the Borrowers shall make any payment or payments to the
Creditors under this Agreement in an aggregate amount in excess of such 

 

72

 

Borrower’s
Percentage (such Borrower the “Funding Borrower”;
the Borrowers other than the Funding Borrower, the “Other
Borrowers”), the Other Borrowers shall contribute to the Funding
Borrower an amount equal to the Other Borrowers’ Percentage of such payment or
payments made by the Funding Borrower. For the purposes hereof, the Funding
Borrower’s or Other Borrowers’ Percentage shall be determined as of the date on
which such payment was made by reference to the ratio of (i) the Funding
Borrower’s or Other Borrowers’ Adjusted Net Worth as of such date to (ii) the
aggregate Adjusted Net Worth of all the Borrowers (including the Funding
Borrower) as of such date. Nothing in this paragraph shall affect each
Borrower’s several liability to the Creditors for the entire amount of the
obligations of the Borrowers under this Agreement (up to the limitations set
forth in the preceding paragraph) or in any other manner impair any right or
remedy of the Creditors hereunder. The limitations provided above are intended
solely to preserve the rights of the Agent under this Agreement to the maximum
extent permitted by applicable law and none of the Borrowers nor any other
person shall have any right hereunder that it would not otherwise have under
applicable law.

 

18                       Governing law and jurisdiction

 

18.1             Law

 

This Agreement is governed by, and shall be
construed in accordance with, English law.

 

18.2             Submission
to jurisdiction

 

The Borrowers jointly and severally agree,
for the benefit of each Creditor, that any legal action or proceedings arising
out of or in connection with this Agreement against the Borrowers or any of them
or any of their assets may be brought in the English courts. Each of the
Borrowers irrevocably and unconditionally submits to the jurisdiction of such
courts and irrevocably designates, appoints and empowers Riches Consulting at
present of Old Jarretts Farmhouse, Brantridge Lane, Balcombe, West Sussex RH17
6JR, England to receive for it and on its behalf, service of process issued out
of the English courts in any such legal action or proceedings. The submission
to such jurisdiction shall not (and shall not be construed so as to) limit the
right of a Creditor to take proceedings against the Borrowers or any of them in
the courts of any other competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of proceedings
in any other jurisdiction, whether concurrently or not.

 

The parties further agree that only the
courts of England and not those of any other State shall have jurisdiction to
determine any claim which the Borrowers or any of them may have against any
Creditor arising out of or in connection with this Agreement.

 

18.3             Contracts
(Rights of Third Parties) Act 1999

 

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

 

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

 

73

 

	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  ETON MARINE LTD.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
  as Borrower

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  BENMORE SERVICES S.A.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
  as Borrower

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  INGRAM ENTERPRISES CO.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
  as Borrower

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
   

  	
   

  
	
  and by

  	
  )

  	
  Authorised Signatory

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  AEGEAN BALTIC BANK S.A.

  	
  )

  	
   

  	
   

  
	
  as Arranger, Agent, Security Agent, Account Bank,
  Bank

  	
  )

  	
   

  	
   

  
	
  and
  Swap Provider

  	
  )

  	
  Authorised
  Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
   

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HSH NORDBANK AG

  	
  )

  	
   

  	
   

  
	
  as Bank and Swap Provider

  	
  )

  	
  Attorney-in-fact

  	
   

  

 

74

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