Document:

EX-4.21

Date 30 July 2008

STEALTHGAS INC.

as Borrower

- and -

NATIONAL BANK OF GREECE S.A.

as Lender

 

LOAN AGREEMENT

 

relating to a loan facility of up to US$33,240,000 to part-finance

the acquisition of two approximately

5,000 CMB LPGs having hull nos. K404 and 405

under construction at Kanrei Zosen, Japan

WATSON, FARLEY & WILLIAMS

PIRAEUS

 

 

INDEX

	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	 
	 	 	 	 	 	 
	1

	 	INTERPRETATION
	 	 	1	 
	 
	 	 	 	 	 	 
	2

	 	FACILITY
	 	 	14	 
	 
	 	 	 	 	 	 
	3

	 	DRAWDOWN
	 	 	14	 
	 
	 	 	 	 	 	 
	4

	 	INTEREST
	 	 	15	 
	 
	 	 	 	 	 	 
	5

	 	INTEREST PERIODS
	 	 	16	 
	 
	 	 	 	 	 	 
	6

	 	DEFAULT INTEREST
	 	 	16	 
	 
	 	 	 	 	 	 
	7

	 	REPAYMENT AND PREPAYMENT
	 	 	17	 
	 
	 	 	 	 	 	 
	8

	 	CONDITIONS PRECEDENT
	 	 	18	 
	 
	 	 	 	 	 	 
	9

	 	REPRESENTATIONS AND WARRANTIES
	 	 	19	 
	 
	 	 	 	 	 	 
	10

	 	GENERAL UNDERTAKINGS
	 	 	21	 
	 
	 	 	 	 	 	 
	11

	 	CORPORATE UNDERTAKINGS
	 	 	24	 
	 
	 	 	 	 	 	 
	12

	 	INSURANCE
	 	 	25	 
	 
	 	 	 	 	 	 
	13

	 	SHIP COVENANTS
	 	 	30	 
	 
	 	 	 	 	 	 
	14

	 	SECURITY COVER
	 	 	35	 
	 
	 	 	 	 	 	 
	15

	 	PAYMENTS AND CALCULATIONS
	 	 	36	 
	 
	 	 	 	 	 	 
	16

	 	APPLICATION OF RECEIPTS
	 	 	37	 
	 
	 	 	 	 	 	 
	17

	 	APPLICATION OF EARNINGS
	 	 	38	 
	 
	 	 	 	 	 	 
	18

	 	EVENTS OF DEFAULT
	 	 	39	 
	 
	 	 	 	 	 	 
	19

	 	FEES AND EXPENSES
	 	 	42	 
	 
	 	 	 	 	 	 
	20

	 	INDEMNITIES
	 	 	43	 
	 
	 	 	 	 	 	 
	21

	 	NO SET-OFF OR TAX DEDUCTION
	 	 	45	 
	 
	 	 	 	 	 	 
	22

	 	ILLEGALITY, ETC
	 	 	45	 
	 
	 	 	 	 	 	 
	23

	 	INCREASED COSTS
	 	 	46	 
	 
	 	 	 	 	 	 
	24

	 	SET-OFF
	 	 	47	 
	 
	 	 	 	 	 	 
	25

	 	TRANSFERS AND CHANGES IN LENDING OFFICES
	 	 	47	 

 

 

	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	 
	 	 	 	 	 	 
	26

	 	VARIATIONS AND WAIVERS
	 	 	48	 
	 
	 	 	 	 	 	 
	27

	 	NOTICES
	 	 	48	 
	 
	 	 	 	 	 	 
	28

	 	SUPPLEMENTAL
	 	 	50	 
	 
	 	 	 	 	 	 
	29

	 	LAW AND JURISDICTION
	 	 	50	 
	 
	 	 	 	 	 	 
	SCHEDULE 1 DRAWDOWN NOTICE	 	 	52	 
	 
	 	 	 	 	 	 
	SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS	 	 	53	 
	 
	 	 	 	 	 	 
	SCHEDULE 3 FORM OF COMPLIANCE CERTIFICATE	 	 	56	 
	 
	 	 	 	 	 	 
	EXECUTION PAGE	 	 	57	 

 

 

THIS LOAN AGREEMENT is made on 30 July 2008

BETWEEN:

	(1)	 	STEALTHGAS INC., being a corporation incorporated in the Republic of the Marshall Islands
whose registered office is at Trust Company House, Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro MH96960, the Marshall Islands (the “Borrower“); and
	 
	(2)	 	NATIONAL BANK OF GREECE S.A. acting through its branch at 2, Bouboulinas Street & Akti
Miaouli, 185 35 Piraeus, Greece (the “Lender”).

WHEREAS

The Lender has agreed to make available to the Borrower a loan facility (which shall be divided
into two Advances) of up to the lesser of (a) US$33,240,000, (b) 75 per cent. of the Contract Price
of the Ship which will be financed by that Advance or (c) 75 per cent. of the Market Value of that
Ship (as determined by the valuations referred to in Clause 14.4), for the purpose of part
financing the acquisition cost of each Ship.

IT IS AGREED as follows:

	1	 	INTERPRETATION
	 
	1.1	 	Definitions. Subject to Clause 1.5, in this Agreement:
	 
	 	 	“Accounting Information” means the annual audited consolidated accounts to be provided by
the Borrower to the Lender in accordance with Clause 10.5(a)(i) of this Agreement or the
semi-annual unaudited consolidated accounts of the Borrower to be provided by the Borrower
to the Lender in accordance with Clause 10.5(b)(i) of this Agreement (as the context may
require);
	 
	 	 	“Advance” means:
	 
	(a)	 	in relation to “GAS SHURIKEN”, the Gas Shuriken Advance; and
	 
	(b)	 	in relation to “GAS DEFIANCE”, the Gas Defiance Advance,
	 
	 	 	and in the plural means both of them;
	 
	 	 	“Approved Broker” means each of Clarksons and Galbraith’s Limited or any other shipbroker
acceptable to the Lender in its sole discretion;
	 
	 	 	“Approved Manager” means, in relation to a Ship, Stealth Maritime Corp. S.A., a company
incorporated in the Republic of Liberia having its registered office at 80 Broad Street,
Monrovia, Liberia or any other company which the Lender may approve from time to time as the
commercial, technical and/or operational manager of that Ship;
	 
	 	 	“Approved Manager’s Undertaking” means in relation to each Ship, a letter of undertaking
executed or to be executed by the Approved Manager in favour of the Lender and in the terms
required by the Lender, agreeing certain matters in relation to the Approved Manager serving
as the manager of the Ship and subordinating its rights against such Ship and the Owner
thereof to the rights of the Lender under the Finance Documents, in such form as the Lender
may approve or require;
	 
	 	 	“Asset Cover Percentage” means, at any time, the aggregate of the items referred to in
paragraph (a) and (b) of Clause 14.1 expressed as a percentage of the Loan;

 

 

	 	 	“Availability Period” means the period commencing on the date of this Agreement and ending
on:

	 	(a)	 	in relation to the Gas Defiance Advance, 15 August 2008 (or such later date as
the Lender may agree with the Borrower but no later than 30 September 2008);
	 
	 	(b)	 	in relation to the Gas Shuriken Advance, 15 November 2008 (or such later date
as the Lender may agree with the Borrower but no later than 31 December 2008); or
	 
	 	(c)	 	if earlier, the date on which the Commitment is fully borrowed, cancelled or
terminated;

	 	 	“Balloon Instalment” has the meaning given in Clause 7.1;
	 
	 	 	“Borrower” means StealthGas Inc., a corporation incorporated and existing under the laws of
the Marshall Islands and having its registered office at Trust Company House, Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, the Marshall Islands;
	 
	 	 	“Business Day” means a day on which banks are open in London, Piraeus and in respect of a
day on which a payment is required to be made under a Finance Document, also in New York
City;
	 
	 	 	“Charterparty” means in relation to each Ship:

	 	(d)	 	the Initial Charterparty for that Ship;
	 
	 	(e)	 	after expiration of the Initial Charterparty, any charterparty (save for a
demise or bareboat charter party) of a duration (or capable of being or exceeding a
duration) of 12 months, or more; or
	 
	 	(f)	 	after expiration of the Initial Charterparty, any bareboat or demise
charterparty, upon the prior written consent of the Lender,

	 	 	to be made on terms and conditions and entered by the relevant Owner with a charterer
acceptable in all respects to the Lender;
	 
	 	 	“Charterparty Assignment” means, in relation to a Ship, a deed of assignment of the rights
of the relevant Owner in respect of a Charterparty relating thereto, in such form as the
Lender may approve or require;
	 
	 	 	“Commitment” means $33,240,000 as that amount may be reduced, cancelled or terminated in
accordance with this Agreement;
	 
	 	 	“Contract Price” means $22,160,000, being the purchase price for each Ship payable pursuant
to the MOA for that Ship;
	 
	 	 	“Contractual Currency” has the meaning given in Clause 20.5;
	 
	 	 	“Delivery Date” means, in relation to a Ship, the date on which title to and possession of
that Ship is transferred from the relevant Seller to the relevant Owner;
	 
	 	 	“Dollars” and “$” means the lawful currency for the time being of the United States of
America;

2

 

	 	 	“Drawdown Date” means, in relation to an Advance, the date requested by the Borrower for
the Advance to be made, or (as the context requires) the date on which the Advance is
actually made;
	 
	 	 	“Drawdown Notice” means a notice in the form set out in Schedule 1 (or in any other form
which the Lender approves or reasonably requires);
	 
	 	 	“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later
become, payable (actually or contingently) to the Owner owning the Ship or the Lender and
which arise out of the use or operation of the Ship, including (but not limited to):

	 	(a)	 	all freight, hire and passage moneys, compensation payable to the Owner
owning the Ship or the Lender in the event of requisition of the Ship for hire,
remuneration for salvage and towage services, demurrage and detention moneys and
damages for breach (or payments for variation or termination) of any charterparty or
other contract for the employment of the Ship;
	 
	 	(b)	 	all moneys which are at any time payable under the Insurances in respect of
loss of hire; and
	 
	 	(c)	 	if and whenever the Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) above are pooled or shared with any other person, that
proportion of the net receipts of the relevant pooling or sharing arrangement which
is attributable to the Ship;

	 	 	“Earnings Account” means, with respect to each Owner, an account in the name of that Owner
with the Lender in Piraeus (or any other office of the Lender which is designated by it in
writing as the Earnings Account with respect to that Owner for the purposes of this
Agreement), and in the plural means both of them;
	 
	 	 	“EBITDA” means, in respect of the relevant period, the aggregate amount of consolidated or
combined pre-tax profits of the Group before extraordinary or exceptional items,
depreciation, interest, repayment of principal in respect of any loan, rentals under finance
leases and similar charges payable;
	 
	 	 	“Environmental Claim” means:

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

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

	 	(a)	 	any release of Environmentally Sensitive Material from a Ship; or
	 
	 	(b)	 	any incident in which Environmentally Sensitive Material is released from a
vessel other than a Ship and which involves a collision between a Ship and such other
vessel or some other incident of navigation or operation, in either case, in
connection with which a Ship is actually or potentially liable to be arrested,
attached, detained or injuncted and/or a Ship or either Owner and/or any operator

3

 

	 	 	 	or manager is at fault or allegedly at fault or otherwise liable to any legal or
administrative action; or

	 	(c)	 	any other incident in which Environmentally Sensitive Material is released
otherwise than from a Ship and in connection with which a Ship is actually or
potentially liable to be arrested and/or where either Owner and/or any operator or
manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal
or administrative action;

	 	 	“Environmental Law” means any law relating to pollution or protection of the environment,
to the carriage of Environmentally Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products and any other substance
(including any chemical, gas or other hazardous or noxious substance) which is (or is
capable of being or becoming) polluting, toxic or hazardous;
	 
	 	 	“Event of Default” means any of the events or circumstances described in Clause 18.1;
	 
	 	 	“Finance Documents” means:

	 	(a)	 	this Agreement;
	 
	 	(b)	 	the Guarantees;
	 
	 	(c)	 	the Retention Account Pledge;
	 
	 	(d)	 	the General Assignments;
	 
	 	(e)	 	the Mortgages;
	 
	 	(f)	 	the Charterparty Assignments;
	 
	 	(g)	 	the Approved Manager’s Undertakings; and
	 
	 	(h)	 	any other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower, an Owner, or any other person as security for, or
to establish any form of subordination or priorities arrangement in relation to, any
amount payable to the Lender under this Agreement or any of the documents referred to
in this definition;

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

	 	(a)	 	for principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
	 
	 	(b)	 	under any loan stock, bond, note or other security issued by the debtor;
	 
	 	(c)	 	under any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
	 
	 	(d)	 	under a financial lease, a deferred purchase consideration arrangement or
any other agreement having the commercial effect of a borrowing or raising of money
by the debtor;
	 
	 	(e)	 	under any interest or currency swap or any other kind of derivative
transaction entered into by the debtor or, if the agreement under which any such
transaction is

4

 

	 	 	 	entered into requires netting of mutual liabilities, the liability of the debtor for
the net amount; or
	 
	 	(f)	 	under a guarantee, indemnity or similar obligation entered into by the debtor
in respect of a liability of another person which would fall within (a) to (e) if the
references to the debtor referred to the other person;

	 	 	“Financial Power” means Financial Power Inc., a corporation incorporated in The Republic of
Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro MH96960, Republic of Marshall Islands;
	 
	 	 	“First Seller” means, Newgas Limited, a corporation organised and existing under the laws
of the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake
Island, Ajeltake Road, Majuro, 96960MH, Marshall Islands;
	 
	 	 	“Fleet Vessels” means all of the vessels (including, but not limited to, the Ships) from
time to time wholly owned by members of the Group (each a “Fleet Vessel”);
	 
	 	 	“GAS DEFIANCE” means the LPG carrier of 4,309 gross registered tons and 1,374 net
registered tons currently known as builder’s hull no. K404, with IMO Number 9359557 and
Official Number3218, and to be registered from its delivery by the First Seller in the name
of Spacegas under the Marshall Islands flag;
	 
	 	 	“Gas Defiance Advance” means an amount of up to $16,620,000 to be applied in part-payment
of the Contract Price pursuant to the Gas Defiance MOA;
	 
	 	 	“Gas Defiance Initial Charterparty” means the time charterparty dated 13 July 2007 entered
into between Spacegas as owner and the Initial Charterer pursuant to which the Initial
Charterer has agreed to take “GAS DEFIANCE” on time charter for a minimum period of 12
months at a minimum rate of US$285,000 per month;
	 
	 	 	“Gas Defiance MOA” means the memorandum of agreement dated 29 February 2008 as the same may
be amended and supplemented from time to time, entered into between the First Seller and
Spacegas in respect of the sale by the First Seller and the acquisition by Spacegas of “GAS
DEFIANCE”;
	 
	 	 	“Gas Defiance Mortgage” means the first preferred Marshall Islands mortgage on “GAS
DEFIANCE” or, as the context may require, to be executed by Spacegas in favour of the Lender
in such form as the Lender may approve or require;
	 
	 	 	“GAS SHURIKEN” means the LPG carrier of 4,309 gross registered tons and 1,374 net
registered tons currently known as builder’s hull no. K405, with IMO Number 9359569 and to
be registered from its delivery in the name of Financial Power under the Marshall Islands
flag;
	 
	 	 	“GAS SHURIKEN Advance” means an amount of up to $16,620,000 to be applied in part-payment
of the Contract Price pursuant to the Gas Shuriken MOA;
	 
	 	 	“Gas Shuriken Initial Charterparty” means the time charterparty entered into or to be
entered into between Financial Power as owner and the Initial Charterer pursuant to which
the Initial Charterer has agreed to take “GAS SHURIKEN” on time charter for a minimum period
of 24 months at a minimum rate of US$270,000 per month;
	 
	 	 	“Gas Shuriken MOA” means the memorandum of agreement dated 29 February 2008 as the same may
be amended and supplemented from time to time entered into between the Second Seller and
Financial Power in respect of the sale by the Second Seller and the acquisition by Financial
Power of “GAS SHURIKEN”;

5

 

	 	 	“Gas Shuriken Mortgage” means the first priority Marshall Islands statutory mortgage on
“GAS SHURIKEN” executed or, as the context may require, to be executed by Financial Power in
favour of the Lender in such form as the Lender may approve or require;
	 
	 	 	“General Assignment” means, in relation to a Ship, a general assignment of the Earnings,
the Insurances and any Requisition Compensation to be executed by the relevant Owner in
favour of the Lender, in such form as the Lender may approve or require, and in the plural
means both of them;
	 
	 	 	“Group” means the Borrower and its subsidiaries (including, but not limited to, each Owner)
from time to time during the Security Period and “member of the Group” shall be construed
accordingly;
	 
	 	 	“Guarantee” means, in relation to an Owner, a guarantee to be given by that Owner in favour
of the Lender, guaranteeing the obligations of the Borrower under this Agreement and the
other Finance Documents, in such form as the Lender may approve or require, and in the
plural means both of them;
	 
	 	 	“Initial Charterer” means Petredec Limited, a company incorporated in Bermuda in Bermuda
having its registered office at Par La Ville Place, 14 Par-La-Ville Road, Hamilton HM08,
Bermuda;
	 
	 	 	“Initial Charterparty” means:

	 	(a)	 	in relation to “GAS DEFIANCE”, the Gas Defiance Initial Charterparty; and
	 
	 	(b)	 	in relation to “GAS SHURIKEN”, the Gas Shuriken Initial Charterparty; and

	 	 	in the plural means both of them;
	 
	 	 	“Insurances” means, in relation to a Ship:

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

	 	 	“Interest Expense” means, as at any date of calculation, the aggregate of all interest
payable by any member of the Group on any Financial Indebtedness;
	 
	 	 	“Interest Period” means in relation to an Advance, a period determined in accordance with
Clause 5;
	 
	 	 	“ISM Code” means, in relation to its application to each Owner, its Ship and its operation:

	 	(a)	 	‘The International Management Code for the Safe Operation of Ships and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by
the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4
November 1993 and incorporated on 19 May 1994 into chapter IX of the International
Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
	 
	 	(b)	 	all further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of the
International Maritime Organisation or any other entity with responsibility for

6

 

	 	 	 	implementing the ISM Code, including without limitation, the ‘Guidelines on
implementation or administering of the International Safety Management (ISM) Code by
Administrations’ produced by the International Maritime Organisations pursuant to
Resolution A.788(19) adopted on 25 November 1995,
	 
	 	 	 	as the same may be amended, supplemented or replaced from time to time;

	 	 	“ISM Code Documentation” includes:

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

	 	 	“ISM SMS” means the safety management system for each Ship which is required to be
developed, implemented and maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Facility Security Code constituted
pursuant to resolution A.924(22) of the International Maritime Organisation (“IMO”) now set
out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) and
the mandatory ISPS Code as adopted by a Diplomatic Conference of the IMO on Maritime
Security in December 2002 and includes any amendments or extensions to it and any regulation
issued pursuant to it but shall only apply insofar as it is applicable law in the relevant
Ship’s flag state and any jurisdiction on which such Ship is operated;
	 
	 	 	“ISSC” means a valid and current International Ship Security Certificate issued under the
ISPS Code;
	 
	 	 	“Lender” means the National Bank of Greece S.A. acting through its office at 2 Bouboulinas
Street & Akti Miaouli, 185 35, Piraeus, Greece;
	 
	 	 	“Leverage Ratio” means, any relevant time, the ratio (expressed as a percentage) of;

	 	(a)	 	Total Bank Debt less Unencumbered Cash; and
	 
	 	(b)	 	the Market Value Adjusted Total Assets (including, without limitation the
Ships);

	 	 	“LIBOR” means, for an Interest Period:

	 	(a)	 	the rate per annum equal to the offered quotation for deposits in Dollars for a
period equal to, or as near as possible equal to, the relevant Interest Period which
appears on Reuters BBA Page LIBOR 01 at or about 11.00 a.m. (London time) on the second
Business Day prior to the commencement of that Interest Period (and, for the purposes
of this Agreement, “Reuters BBA Page LIBOR 01” means the display designated as “Reuters
BBA Page LIBOR 01” on the Reuters Money News Service or such other page as may replace
BBA Page LIBOR 01 on that service for the purpose of displaying rates comparable to
that rate or on such other service as may be nominated by the British Bankers’
Association as the information vendor for the purpose of displaying British Bankers’
Association Interest Settlement Rates for Dollars); or

7

 

	 	(b)	 	if no rate is quoted on Reuters BBA Page LIBOR 01, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one per cent.) at which deposits
in Dollars are offered to the Reference Bank by leading banks in the London Interbank
Market at the request of the Reference Bank at or about 11.00 a.m. (London time) on the
Quotation Date for that Interest Period for a period equal to that Interest Period and
for delivery on the first Business Day of it;

	 	 	“Loan” means the principal amount for the time being outstanding under this Agreement;
	 
	 	 	“Major Casualty” means, in relation to a Ship, any casualty to the Ship in respect of which
the claim or the aggregate of the claims against all insurers, before adjustment for any
relevant franchise or deductible, exceeds $1,000,000 or the equivalent in any other
currency;
	 
	 	 	“Margin” means:

	 	(a)	 	until the third instalment has been repaid in accordance with Clause 7.1, 0.95 per cent.
per annum; and
	 
	 	(b)	 	0.80 per cent. per annum thereafter;

	 	 	“Market Value Adjusted Total Assets” means, at any time, the Total Assets adjusted to
reflect the aggregate Market Value of all the Fleet Vessels;
	 
	 	 	“Market Value” means, in respect of each Ship and each Fleet Vessel, the market value
thereof determined from time to time in accordance with Clause 14.4;
	 
	 	 	“Material Adverse Change Warranty Letter” means a letter to be issued by the Borrower and
countersigned by the Owners on each Drawdown Date in which they confirm that, as at that
Drawdown Date, here has been no material adverse change in the financial position, state of
affairs or prospects of the Borrower, the Owners or any other member of the Group since the
date of issue by the Lender of the Lender’s commitment letter (being 30 April 2008);
	 
	 	 	“MOA” means:

	 	(a)	 	in relation to “GAS SHURIKEN”, the Gas Shuriken MOA; and
	 
	 	(b)	 	in relation to “GAS DEFIANCE”, the Gas Defiance MOA,

	 	 	and in the plural means both of them;
	 
	 	 	“Mortgage” means:

	 	(a)	 	in relation to “GAS SHURIKEN”, the Gas Shuriken Mortgage; and
	 
	 	(b)	 	in relation to “GAS DEFIANCE”, the Gas Defiance Mortgage,

	 	 	and in the plural means both of them;
	 
	 	 	“Negotiation Period” has the meaning given in Clause 4.6;
	 
	 	 	“Owners” means, together, Spacegas and Financial Power, and in the singular means either of
them;
	 
	 	 	“Payment Currency” has the meaning given in Clause 20.5;

8

 

	 	 	“Permitted Security Interests” means:

	 	(a)	 	Security Interests created by the Finance Documents;
	 
	 	(b)	 	liens for unpaid crew’s wages in accordance with usual maritime practice; and
	 
	 	(c)	 	liens for salvage;

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

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

	 	 	“Potential Event of Default” means an event or circumstance which, with the giving of any
notice, the lapse of time, a determination of the Lender and/or the satisfaction of any
other condition, would, in the Lender’s reasonable opinion, constitute an Event of Default;
	 
	 	 	“Quotation Date” means, in relation to any Interest Period (or any other period for which an
interest rate is to be determined under any provision of a Finance Document), the day on
which quotations would ordinarily be given by leading banks in the London Interbank Market
for deposits in the currency in relation to which such rate is to be determined for delivery
on the first day of that Interest Period or other period;
	 
	 	 	“Reference Bank” means National Bank of Greece S.A. acting through its branch at 75 King
William Street, London, EC4N 7BE; England;
	 
	 	 	“Relevant Person” has the meaning given in Clause 18.7;
	 
	 	 	“Repayment Date” means a date on which a repayment is required to be made under Clause 7;
	 
	 	 	“Requisition Compensation” includes all compensation or other moneys payable by reason of
any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;
	 
	 	 	“Retention Account” means an account in the name of the Borrower with the Lender in Piraeus
designated “StealthGas Inc. — Retention Account”, or any other account (with that or another
office of the Lender) which is designated by the Lender as the Retention Account for the
purposes of this Agreement;

9

 

	 	 	“Retention Account Pledge” means a pledge agreement creating security of the Retention
Account to be executed by the Borrower in favour of the Lender in such form and terms as the
Lender may approve or require in its sole discretion;
	 
	 	 	“Second Seller” means Galactic Imports Limited, a corporation organised and existing under
the laws of the Marshall Islands, having its registered office at Trust Company Complex,
Ajeltake Island, Ajeltake Road, Majuro, 96960MH, Marshall Islands;
	 
	 	 	“Security Interest” means:

	 	(a)	 	a mortgage, charge (whether fixed or floating) or pledge, any maritime or other
lien or any other security interest of any kind;
	 
	 	(b)	 	the rights of the plaintiff under an action in rem in which the vessel
concerned has been arrested or a writ has been issued or similar step taken; and
	 
	 	(c)	 	any arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to the position
in which B would have been had he held a security interest over an asset of A; but (c)
does not apply to a right of set off or combination of accounts conferred by the
standard terms of business of a bank or financial institution;

	 	 	“Secured Liabilities” means all liabilities which the Borrower, the Owners, the other
Security Parties or any of them have, at the date of this Agreement or at any later time or
times, under or by virtue of the Finance Documents or any judgment relating to the Finance
Documents; and for this purpose, there shall be disregarded any total or partial discharge
of these liabilities, or variation of their terms, which is effected by, or in connection
with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws
of any country;
	 
	 	 	“Security Party” means the Borrower, the Owners, the Approved Manager and any other person
(except the Lender) who, as a surety or mortgagor, as a party to any subordination or
priorities arrangement, or in any similar capacity, executes a document falling within the
final paragraph of the definition of “Finance Documents”;
	 
	 	 	“Security Period” means the period commencing on the date of this Agreement and ending on
the date on which the Lender notifies the Borrower and the Security Parties that:

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

	 	 	“Seller” means:

	 	(a)	 	in relation to “GAS DEFIANCE”, the First Seller; and

10

 

	 	(b)	 	in relation to “GAS SHURIKEN”, the Second Seller,

	 	 	and in plural means both of them;
	 
	 	 	“Ships” means, together, “GAS DEFIANCE” and “GAS SHURIKEN”, and in the singular means
either of them;
	 
	 	 	“Spacegas” means Spacegas Inc., a corporation incorporated in The Republic of Marshall
Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro MH96960, Republic of Marshall Islands;
	 
	 	 	“Total Assets” means, the total assets of the Group as stated in the most recent Accounting
Information;
	 
	 	 	“Total Bank Debt” means the total bank debt of the Group as stated in the most recent
Accounting Information;
	 
	 	 	“Total Loss” means, in relation to a Ship:

	 	(a)	 	actual, constructive, compromised, agreed or arranged total loss of the Ship;
	 
	 	(b)	 	any expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than her proper value, a nominal
consideration or without any consideration, which is effected by any government or
official authority or by any person or persons claiming to be or to represent a
government or official authority, excluding a requisition for hire for a fixed period
not exceeding one year without any right to an extension;
	 
	 	(c)	 	any condemnation of the Ship by any tribunal or by any person or person
claiming to be a tribunal;
	 
	 	(d)	 	any arrest, capture, seizure or detention of the Ship (including any hijacking
or theft) unless she is within 30 days redelivered to the full control of the Owner
owning the Ship;

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

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

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

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

	 	 	“Tripartite Agreement” means, in relation to a Ship, a deed of assignment in respect of a
bareboat or demise Charterparty, to be entered by the relevant Owner, the relevant bareboat
or demise charterer and the Lender in such form and on such terms as the Lender may approve
or require in its sole discretion; and

11

 

	 	 	“Unencumbered Cash” means any cash or cash equivalent owned by the Borrower or any member
of the Group which is not subject to a Security Interest as stated in the most recent
audited Accounting Information.

	1.2	 	Construction of certain terms. In this Agreement:

“approved” means, for the purposes of Clause 12, approved in writing by the Lender;
	 
	 	 	“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any
revenues or other payment;
	 
	 	 	“company” includes any partnership, joint venture and unincorporated association;
	 
	 	 	“consent” includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration, notarisation and legalisation;
	 
	 	 	“contingent liability” means a liability which is not certain to arise and/or the amount of
which remains unascertained;
	 
	 	 	“document” includes a deed; also a letter or fax;
	 
	 	 	“excess risks” means, in relation to a Ship, the proportion of claims for general average,
salvage and salvage charges not recoverable under the hull and machinery policies in respect
of the Ship in consequence of her insured value being less than the value at which the Ship
is assessed for the purpose of such claims;
	 
	 	 	“expense” means any kind of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other tax;
	 
	 	 	“law” includes any form of delegated legislation, any order or decree, any treaty or
international convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its Security Council;
	 
	 	 	“legal or administrative action” means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;
	 
	 	 	“liability” includes every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or otherwise;
	 
	 	 	“months” shall be construed in accordance with Clause 1.3;
	 
	 	 	“obligatory insurances” means, in relation to a Ship, all insurances effected, or which the
Borrower or the Owner which owns that Ship is obliged to effect, under Clause 13 below or
any other provision of this Agreement or another Finance Document;
	 
	 	 	“parent company” has the meaning given in Clause 1.4;
	 
	 	 	“person” includes any company; any state, political sub-division of a state and local or
municipal authority; and any international organisation;
	 
	 	 	“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or
other document evidencing the contract of insurance or its terms;
	 
	 	 	“protection and indemnity risks” means the usual risks covered by a protection and
indemnity association managed in London, including pollution risks and the proportion (if
any) of any sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation therein of
clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time

12

 

	 	 	Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any
equivalent provision;
	 
	 	 	“regulation” includes any regulation, rule, official directive, request or guideline (either
having the force of law or compliance with which is reasonable in the ordinary course of
business of the party concerned) of any governmental, intergovernmental or supranational
body, agency, department or regulatory, self-regulatory or other authority or organisation;
	 
	 	 	“subsidiary” has the meaning given in Clause 1.4;
	 
	 	 	“successor” includes any person who is entitled (by assignment, novation, merger or
otherwise) to any other person’s rights under this Agreement or any other Finance Document
(or any interest in those rights) or who, as administrator, liquidator or otherwise, is
entitled to exercise those rights; and in particular references to a successor include a
person to whom those rights (or any interest in those rights) are transferred or pass as a
result of a merger, division, reconstruction or other reorganisation of it or any other
person;
	 
	 	 	“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is
imposed by any state, any political sub-division of a state or any local or municipal
authority (including any such imposed in connection with exchange controls), and any
connected penalty, interest or fine; and
	 
	 	 	“war risks” means the risks according to Institute War and Strike Clauses (Hull Time)
(1/10/83) or (1/11/95), or equivalent conditions, including, but not limited to risk of
mines, blocking and trapping, missing vessel, confiscation and all risks excluded from the
standard form of English or other marine policy.
	 
	1.3	 	Meaning of “month”. A period of one or more “months” ends on the day in the relevant
calendar month numerically corresponding to the day of the calendar month on which the period
started (“the numerically corresponding day”), but:
	 
	(a)	 	on the Business Day following the numerically corresponding day if the numerically
corresponding day is not a Business Day or, if there is no later Business Day in the same
calendar month, on the Business Day preceding the numerically corresponding day; or
	 
	(b)	 	on the last Business Day in the relevant calendar month, if the period started on the last
Business Day in a calendar month or if the last calendar month of the period has no
numerically corresponding day,
	 
	 	 	and “month” and “monthly” shall be construed accordingly.
	 
	1.4	 	Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:
	 
	(a)	 	a majority of the issued shares in S (or a majority of the issued shares in S which carry
unlimited rights to capital and income distributions) are directly owned by P or are
indirectly attributable to P; or
	 
	(b)	 	P has direct or indirect control over a majority of the voting rights attached to the issued shares of S,
	 
	 	 	and any company of which S is a subsidiary is a parent company of S.
	 
	1.5	 	General Interpretation.
	 
	(a)	 	In this Agreement:

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	 	(i)	 	references to, or to a provision of, a Finance Document or any other document
are references to it as amended or supplemented, whether before the date of this
Agreement or otherwise;
	 
	 	(ii)	 	references to, or to a provision of, any law include any amendment, extension,
re-enactment or replacement, whether made before the date of this Agreement or
otherwise; and
	 
	 	(iii)	 	words denoting the singular number shall include the plural and vice versa.

	(b)	 	Clauses 1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary intention
appears.
	 
	(c)	 	References in Clause 1.1 to a document being in the form of a particular Appendix include
references to that form with any modifications to that form which the Lender (with the
authorisation of the Majority Lender in the case of substantial modifications) approves or
reasonably requires.
	 
	(d)	 	The clause headings shall not affect the interpretation of this Agreement.
	 
	2	 	FACILITY
	 
	2.1	 	Amount of facility. Subject to the other provisions of this Agreement, the Lender shall make
available to the Borrower a loan facility of up to $33,240,000 in two Advances each Advance
shall be in an amount equal to the lesser of (i) $16,620,000, (ii) 75 per cent. of the
Contract Price of the Ship to be financed by such Advance or (iii) 75 per cent. of the Market
Value of such Ship.
	 
	2.2	 	Purpose of Loan. The Borrower undertakes with the Lender to use each Advance only for the
purpose stated in the Recital to this Agreement.
	 
	3	 	DRAWDOWN
	 
	3.1	 	Request for Advance. Subject to the following conditions, the Borrower may request an
Advance to be made by ensuring that the Lender receives a completed Drawdown Notice not later
than 11.00 a.m. (Piraeus time) 2 Business Days prior to the intended Drawdown Date.
	 
	3.2	 	Availability. The conditions referred to in Clause 3.1 are that:
	 
	(a)	 	a Drawdown Date has to be a Business Day during the Availability Period;
	 
	(b)	 	each Advance shall, subject to Clause 3.2(c), be in an amount not exceeding the lesser of (i)
$16,620,000, (ii) 75 per cent. of the Contract price of the Ship to be financed by such
Advance or (iii) 75 per cent. of the Market Value of such Ship; and
	 
	(c)	 	the aggregate amount of the Advances shall not exceed the lesser of (i) the Commitment and
(ii) 75 per cent. of the aggregate Contract Prices of the Ships or (iii) 75 per cent. of the
aggregate Market Values of such Ships.
	 
	3.3	 	Drawdown Notice irrevocable. A Drawdown Notice must be signed by an authorised person of the
Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of
the Lender.
	 
	3.4	 	Disbursement of Advance. Subject to the provisions of this Agreement, the Lender shall on
each Drawdown Date make the relevant Advance to the Borrower and that payment to the Borrower
shall be made to the account of the relevant Seller which the Borrower specifies in the
Drawdown Notice.

14

 

	3.5	 	Disbursement of Advance to third party. The payment by the Lender under Clause 3.4 to the
relevant Seller shall constitute the making of the Advance and the Borrower shall thereupon
become indebted, as principal and direct obligor, to the Lender in an amount equal to that
Advance.
	 
	4	 	INTEREST
	 
	4.1	 	Payment of normal interest. Subject to the provisions of this Agreement, interest on each
Advance in respect of each Interest Period shall be paid by the Borrower:
	 
	(a)	 	in the period prior to the Drawdown Date of the Gas Shuriken Advance, on the earlier of (i)
the date falling 3 months from the Drawdown Date of the Gas Defiance Advance and (ii) the last
day of such Interest Period; and
	 
	(b)	 	at all other times, on the earlier of (i) any Repayment Date which falls within such Interest
Period and (ii) the last day of such Interest Period.
	 
	4.2	 	Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest
on each Advance in respect of an Interest Period shall be the aggregate of the Margin and
LIBOR for that Interest Period.
	 
	4.3	 	Payment of accrued interest. In the case of an Interest Period longer than 6 months, accrued
interest shall be paid every 6 months during that Interest Period and on the last day of that
Interest Period.
	 
	4.4	 	Notification of market disruption. The Lender shall promptly notify the Borrower if no rate
is quoted on Reuters BBA Page LIBOR 01 or the if for any reason both the Lender and the
Reference Bank are unable to obtain Dollars in the London Interbank Market in order to fund an
Advance (or any part of it) during any Interest Period, stating the circumstances which have
caused such notice to be given.
	 
	4.5	 	Suspension of drawdown. If the Lender’s notice under Clause 4.4 is served before an Advance
is made, the Lender’s obligation to make the Advance shall be suspended while the
circumstances referred to in the Lender’s notice continue.
	 
	4.6	 	Negotiation of alternative rate of interest. If the Lender’s notice under Clause 4.4 is
served after an Advance is made, the Borrower and the Lender shall use reasonable endeavours
to agree, within the 30 days after the date on which the Lender serves its notice under Clause
4.4 (the “Negotiation Period”), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund the relevant Advance or Advances
during the Interest Period concerned.
	 
	4.7	 	Application of agreed alternative rate of interest. Any alternative interest rate or an
alternative basis which is agreed during the Negotiation Period shall take effect in
accordance with the terms agreed.
	 
	4.8	 	Alternative rate of interest in absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the relevant circumstances
are continuing at the end of the Negotiation Period, then the Lender shall set an interest
period and interest rate representing the cost of funding of the Lender in Dollars or in any
available currency of the relevant Advance or Advances plus the relevant Margin; and the
procedure provided for by this Clause 4.8 shall be repeated if the relevant circumstances are
continuing at the end of the interest period so set by the Lender.
	 
	4.9	 	Notice of prepayment. If the Borrower does not agree with an interest rate set by the Lender
under Clause 4.8, the Borrower may give the Lender not less than 15 Business

15

 

	 	 	Days’ notice of its intention to prepay the relevant Advance or Advances at the end of the
interest period set by the Lender.
	 
	4.10	 	Prepayment, termination of Commitments. A notice under Clause 4.9 shall be irrevocable; on
the last Business Day of the interest period set by the Lender, the Borrower shall prepay
(without premium or penalty) the Loan, together with accrued interest thereon at the
applicable rate plus the relevant Margin.
	 
	4.11	 	Application of prepayment. The provisions of Clause 7 shall apply in relation to the
prepayment.
	 
	5	 	INTEREST PERIODS
	 
	5.1	 	Commencement of Interest Periods. The first Interest Period applicable to an Advance shall
commence on the relevant Drawdown Date and each subsequent Interest Period shall commence on
the expiry of the preceding Interest Period.
	 
	5.2	 	Duration of normal Interest Periods. Subject to Clauses 5.3 and 5.4, each Interest Period in
respect of each Advance shall be:
	 
	(a)	 	1, 2, 3, 6, 9 or 12 months as notified by the Borrower to the Lender not later than 11.00
a.m. (Piraeus time) 3 Business Days before the commencement of the Interest Period;
	 
	(b)	 	in the case of the first Interest Period applicable to the second Advance, a period ending on
the last day of the then current Interest Period applicable to the first Advance, whereupon
both Advances shall be consolidated and treated as a single Advance;
	 
	(c)	 	6 months, if the Borrower fails to notify the Lender by the time specified in paragraph (a)
above; or
	 
	(d)	 	such other period as the Lender may agree with the Borrower.
	 
	5.3	 	Duration of Interest Periods for repayment instalments. In respect of an amount due to be
repaid under Clause 7 on a particular Repayment Date, an Interest Period in relation to the
relevant Tranche shall end on that Repayment Date.
	 
	5.4	 	Non-availability of matching deposits for Interest Period selected. If, after the Borrower
has selected an Interest Period longer than 6 months, the Lender notifies the Borrower by
11.00 a.m. (Piraeus time) on the third Business Day before the commencement of the Interest
Period that it is not satisfied that deposits in Dollars for a period equal to the Interest
Period will be available to it in the London Interbank Market when the Interest Period
commences, the Interest Period shall be of 6 months.
	 
	6	 	DEFAULT INTEREST
	 
	6.1	 	Payment of default interest on overdue amounts. If the Borrower fails to pay any sum
(including, without limitation, any sum payable pursuant to this Clause 6.1) on its due date
for payment under any of the Finance Documents, the Borrower 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 Lender, on the due date for payment and thereafter on 30 June and
31 December in each calendar year. Each of such periods for the calculation of interest
(other than the first, which shall commence on the due date for payment) shall commence on the
last day of the preceding period. The rate of interest applicable to each such period shall
be the aggregate of (a) 1 per cent. per annum, (b) the Margin and (c) LIBOR for such period.
Such interest shall be due and payable on 30 June and 31 December in each calendar year and
each such day shall, for the purposes of this Agreement, be treated as the final day of an
Interest Period in respect of that amount. The Borrower hereby specifically acknowledges and
agrees that the rate of default interest

16

 

	 	 	payable pursuant to this Clause 6.1 on any amount
which is not paid on its due date shall be the
aggregate (as determined by the Lender ) of (a) 2
per cent. per annum and (b) LIBOR for the
relevant period and that such interest shall also
be determined and payable on 30 June and 31
December in each calendar year. If, for the
reasons specified in Clause 4.4, the Lender is
unable to determine a rate in accordance with the
foregoing provisions of this Clause 6.1, interest
on any sum not paid on its due date for payment
shall be calculated at a rate determined by the
Lender to be 2 per cent. per annum above the
cost of funds to the Lender.
	 
	7	 	REPAYMENT AND PREPAYMENT
	 
	7.1	 	The Borrower shall repay the Loan by 24 consecutive semi-annual instalments in the amount of
$969,500 each and a balloon payment of $9,972,000 (the “Balloon Instalment”) payable together
with the twenty-fourth instalment, Provided that if the principal amount of the Loan drawdown
by the Borrower is less than $33,240,000, each repayment instalment shall be reduced pro rata
by an amount in aggregate equal to such undrawn amount.
	 
	7.2	 	Repayment Dates. The first repayment instalment shall be repaid on the date falling the
earlier of (a) 6 months after the Drawdown Date of the Gas Shuriken Advance and (b) 9 months
after the Drawdown Date of the Gas Defiance Advance (or such later date as the Lender may
agree with the Borrower) and each subsequent repayment instalment shall be repaid at 6 monthly
intervals thereafter and the last repayment instalment, together with the Balloon Instalment,
shall be repaid on the date falling on the earlier of (i) the date falling twelve years and
three months from the Drawdown Date of the Gas Defiance Advance and (ii) 31 December 2020.
	 
	7.3	 	Final Repayment Date. On the final Repayment Date, the Borrower shall additionally pay to
the Lender all other sums then accrued or owing under any Finance Document.
	 
	7.4	 	Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole
or any part of the Loan on the last day of an Interest Period in respect thereof.
	 
	7.5	 	Conditions for voluntary prepayment. The conditions referred to in Clause 7.4 are that:
	 
	(a)	 	a partial prepayment shall be $100,000 or a multiple of $100,000;
	 
	(b)	 	the Lender has received from the Borrower at least 10 days’ prior written notice specifying
the amount to be prepaid and the date on which the prepayment is to be made; and
	 
	(c)	 	the Borrower has provided evidence satisfactory to the Lender that any consent required by
the Borrower in connection with the prepayment has been obtained and remains in force, and
that any requirement or regulation relevant to this Agreement which affects the Borrower or
any Security Party has been complied with.
	 
	7.6	 	Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without
the consent of the Lender, and the amount specified in the prepayment notice shall become due
and payable by the Borrower on the date for prepayment specified in the prepayment notice.
	 
	7.7	 	Mandatory prepayment. The Borrower shall be obliged to prepay the Prepayment Amount:
	 
	(a)	 	if a Ship is sold, on or before the date on which the sale is completed by delivery of the
Ship to the buyer; or

17

 

	(b)	 	if a Ship becomes a Total Loss, on the earlier of the date falling 180 days after the
relevant Total Loss Date and the date of receipt by the Lender of the proceeds of insurance
relating to such Total Loss.
	 
	 	 	In this Clause 7.7, “Prepayment Amount” means an amount equal to the higher of:
	 
	(a)	 	the Advance which has been used to finance the Ship which has been sold or become a Total
Loss;
	 
	(b)	 	if the Ship has become a Total Loss, an amount equal to the proceeds of insurance relating to
such Total Loss;
	 
	(c)	 	an amount, which after giving credit for the prepayment required to be made pursuant to this
Clause 7.7, results in the Asset Cover Percentage being equal to the Asset Cover Percentage
which applied immediately prior to the date of sale of, or as the case may be, the Total Loss
Date applicable to, the Ship; and
	 
	(d)	 	if the Ship has been sold, an amount which is equal to the Relevant Fraction of the Loan.
	 
	 	 	“Relevant Fraction” is the fraction of which the nominator is the purchase price of the Ship
which has been sold (the “Purchase Price”) and the denominator is the aggregate of (i) the
Purchase Price and (ii) the Market Value of the other Ship at that time subject to a
Mortgage.
	 
	7.8	 	Amounts payable on prepayment. A prepayment shall be made together with accrued interest
(and any other amount payable under Clause 20 below or otherwise) in respect of the amount
prepaid and, if the prepayment is not made on the last day of an Interest Period together with
any sums payable under Clause 20.1(b) but without premium or penalty.
	 
	7.9	 	Application of partial prepayment. Each partial prepayment shall if made pursuant to:
	 
	(a)	 	Clause 7.4 be applied pro rata against the then outstanding repayment instalments specified
in Clause 7.1 and the Balloon Instalment; and
	 
	(b)	 	Clause 7.7 be applied first in repayment of the Advance relating to the Ship which has been
sold or become a Total Loss and any balance shall be applied pro rata against the then
outstanding repayment instalments specified in Clause 7.1 and the Balloon Instalment.
	 
	7.10	 	No reborrowing. No amount prepaid may be reborrowed.
	 
	8	 	CONDITIONS PRECEDENT
	 
	8.1	 	Documents, fees and no default. The Lender’s obligation to make an Advance is subject to the
following conditions precedent:
	 
	(a)	 	that on or before the date of this Agreement, the Lender receives:

	 	(i)	 	the documents described in Part A of Schedule 2 in a form and substance
satisfactory to the Lender and its lawyers; and
	 
	 	(ii)	 	the arrangement fee referred to in Clause 19.1;

	(b)	 	that, on or before the Drawdown Date in respect of each Advance, the Lender receives the
documents described in Part B of Schedule 2 in form and substance satisfactory to it and its
lawyers;

18

 

	(c)	 	that both at the date of each Drawdown Notice and at each Drawdown Date:

	 	(i)	 	no Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the relevant Advance; and
	 
	 	(ii)	 	the representations and warranties in Clause 9 and those of the Borrower or any
Security Party which are set out in the other Finance Documents would be true and not
misleading if repeated on each of those dates with reference to the circumstances then
existing; and
	 
	 	(iii)	 	none of the circumstances contemplated by Clause 4.4 has occurred and is
continuing;
	 
	 	(iv)	 	there has been no material adverse change in the financial position, state of
affairs or prospects of the Borrower, any other Security Party or any other member of
the Group, in the light of which the Lender considers that there is a significant risk
that the Borrower or any other Security Party will later become, unable to discharge
its liabilities under the Finance Documents to which it is a party as they fall due;

	(d)	 	that, if the ratio set out in Clause 14.1 were applied immediately following the making of
the relevant Advance, the Borrower would not be obliged to provide additional security or
prepay part of the Loan under that Clause; and
	 
	(e)	 	that the Lender has received, and found to be acceptable to it, any further opinions,
consents, agreements and documents in connection with the Finance Documents which the Lender
may reasonably request by notice to the Borrower prior to the relevant Drawdown Date.
	 
	8.2	 	Waiver of conditions precedent. If the Lender at its discretion, permits an Advance to be
borrowed before certain of the conditions referred to in Clause 8.1 are satisfied, the
Borrower shall ensure that those conditions are satisfied within 5 Business Days after the
relevant Drawdown Date (or such longer period as the Lender may specify).
	 
	9	 	REPRESENTATIONS AND WARRANTIES
	 
	9.1	 	General. The Borrower represents and warrants to the Lender as follows.
	 
	9.2	 	Status. The Borrower is duly incorporated and validly existing and in good standing under
the laws of the Marshall Islands.
	 
	9.3	 	Share capital and ownership. The Borrower has an authorised share capital of $205,000
divided into 200,000,000 shares of common stock of registered shares of $0.001 each and
5,000,000 shares of preferred stock of $0.001 each, 46,330,000 shares of common stock have
been issued fully paid and are in the ownership of the persons disclosed by the Borrower to
the Lender.
	 
	9.4	 	Corporate power. The Borrower or, as the case may be, each Owner has the corporate capacity,
and has taken all corporate action and obtained all consents necessary for it:
	 
	(a)	 	to execute the MOA to which it is a party, to purchase and pay for its Ship under the
relevant MOA and register its Ship in its name under the Marshall Islands flag;
	 
	(b)	 	to execute the Initial Charterparty to which it is a party; and
	 
	(c)	 	to execute each Finance Document to which it is a party.

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	9.5	 	Consents in force. All the consents referred to in Clause 9.4 remain in force and nothing
has occurred which makes any of them liable to revocation.
	 
	9.6	 	Legal validity; effective Security Interests. The Finance Documents to which the Borrower is
a party, do now or, as the case may be, will, upon execution and delivery (and, where
applicable, registration as provided for in the Finance Documents):
	 
	(a)	 	constitute the Borrower’s legal, valid and binding obligations enforceable against the
Borrower in accordance with their respective terms; and
	 
	(b)	 	create legal, valid and binding Security Interests enforceable in accordance with their
respective terms over all the assets to which they, by their terms, relate,
	 
	 	 	subject to any relevant insolvency laws affecting creditors’ rights generally.
	 
	9.7	 	No third party Security Interests. Without limiting the generality of Clause 9.6, at the
time of the execution and delivery of each Finance Document to which the Borrower is a party:
	 
	(a)	 	the Borrower will have the right to create all the Security Interests which that Finance
Document purports to create; and
	 
	(b)	 	no third party will have any Security Interest (except for Permitted Security Interests) or
any other interest, right or claim over, in or in relation to any asset to which any such
Security Interest, by its terms, relates.
	 
	9.8	 	No conflicts. The execution by the Borrower of each Finance Document to which it is a party,
and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document
to which it is a party will not involve or lead to a contravention of:
	 
	(a)	 	any law or regulation; or
	 
	(b)	 	the constitutional documents of the Borrower; or
	 
	(c)	 	any contractual or other obligation or restriction which is binding on the Borrower or any of
its assets.
	 
	9.9	 	No withholding taxes. All payments which the Borrower is liable to make under the Finance
Documents may be made without deduction or withholding for or on account of any tax payable
under any law of any Pertinent Jurisdiction.
	 
	9.10	 	No default. No Event of Default or Potential Event of Default has occurred and is
continuing.
	 
	9.11	 	Information. All information which has been provided in writing by or on behalf of the
Borrower or any Security Party to the Lender in connection with any Finance Document satisfied
the requirements of Clause 10.4; all audited and unaudited accounts which have been so
provided satisfied the requirements of Clause 10.6; and there has been no material adverse
change in the financial position or state of affairs of the Borrower or any member of the
Group which may (in the opinion of the Lender) affect the ability of the Borrower or any other
Security Party to comply with the terms of and/or perform its obligations under this Agreement
and the Financial Documents.
	 
	9.12	 	No litigation. No legal or administrative action involving the Borrower has been commenced
or taken or, to the Borrower’s knowledge, is likely to be commenced or taken.
	 
	9.13	 	Validity and completeness of MOAs and Initial Charterparties.

20

 

	(a)	 	The copies of the MOAs and Initial Charterparties delivered to the Lender before the date of
this Agreement are true and complete copies;
	 
	(b)	 	each MOA constitutes valid, binding and enforceable obligations of the relevant Seller and
each Owner respectively in accordance with its terms;
	 
	(c)	 	each Initial Charterparty constitutes valid, binding and enforceable obligations of the
Initial Charterer and the relevant Owner respectively in accordance with its terms; and
	 
	(d)	 	other than those amendments and additions to either MOA and either Initial Charterparty
disclosed to the Lender before the date of this Agreement, no amendments or additions to
either MOA or either Initial Charterparty have been agreed nor has either Owner, either Seller
or the Initial Charterer waived any of their respective rights under either MOA or either
Initial Charterparty.
	 
	9.14	 	No rebates etc. There is no agreement or understanding to allow or pay any rebate, premium,
commission, discount or other benefit or payment (howsoever described) to the Owners, the
Sellers or any third party in connection with the purchase by each Owner of the Ship to be
owned by it, other than as disclosed to the Lender in writing on or prior to the date of this
Agreement.
	 
	9.15	 	Taxes paid. The Borrower has paid all taxes applicable to, or imposed on or in relation to
the Borrower and its business.
	 
	9.16	 	Compliance with certain undertakings. At the date of this Agreement, the Borrower is in
compliance with Clauses 10.2, 10.4, 10.8 and 10.11.
	 
	9.17	 	ISM Code and ISPS Code compliance. All requirements of the ISM Code and the ISPS Code as
they relate to the Borrower, either Owner, the Approved Manager and either Ship have been
complied with.
	 
	10	 	GENERAL UNDERTAKINGS
	 
	10.1	 	General. The Borrower undertakes with the Lender to comply with the following provisions of
this Clause 10 at all times during the Security Period except as the Lender may otherwise
permit.
	 
	10.2	 	Title; negative pledge. The Borrower will:
	 
	(a)	 	hold the legal title to, and own the entire beneficial interest in each Owner, free from all
Security Interests and other interests and rights of every kind, except for those created by
the Finance Documents and the effect of assignments contained in the Finance Document or any
of them;
	 
	(b)	 	procure that each Owner will hold the legal title to, and own the entire beneficial interest
in the Ship owned by it, its Insurances and Earnings, free from all Security Interests and
other interests and rights of every kind, except for those created by the Finance Documents
and the effect of assignments contained in the Finance Documents and except for Permitted
Security Interests;
	 
	(c)	 	not create or permit to arise, and will procure that each Owner will not create or permit to
arise, any Security Interest over any other asset of either Owner present or future; and
	 
	(d)	 	procure that its liabilities under the Finance Documents to which it is party do and will
rank at least pari passu with all other present and future insecured liabilities, except for
liabilities which are mandatorily preferred by law.

21

 

	10.3	 	No disposal of assets. The Borrower will procure that each Owner will not transfer, lease or
otherwise dispose of:
	 
	(a)	 	all or a substantial part of its assets, whether by one transaction or a number of
transactions, whether related or not; or
	 
	(b)	 	any debt payable to it or any other right (present, future or contingent right) to receive a
payment, including any right to damage or compensation.
	 
	10.4	 	Information provided to be accurate. All financial and other information which is provided
in writing by or on behalf of the Borrower under or in connection with any Finance Document
will be true and not misleading and will not omit any material fact or consideration.
	 
	10.5	 	Provision of financial statements. The Borrower will send or procure there are sent to the
Lender:
	 
	(a)	 	as soon as possible, but in no event later than 180 days after the end of each financial year
of the Borrower:

	 	(i)	 	the audited consolidated annual accounts of the Group; and
	 
	 	(ii)	 	the audited annual accounts of each Owner;

	(b)	 	as soon as possible, but in no event later than 90 days after the end of each 6 month period
in each financial year of the Borrower the unaudited consolidated accounts of the Group for
that 6-month period certified as to their correctness by the chief financial officer of the
Group; and
	 
	(c)	 	promptly after each request by the Lender, such further financial information about the
Borrower, the Ships and the Owners (including, but not limited to, charter arrangements,
Financial Indebtedness, purchase or sale of ships and operating expenses) as the Lender may
require.
	 
	10.6	 	Form of financial statements. All accounts (audited and unaudited) delivered under Clause
10.5 will:
	 
	(a)	 	be prepared in accordance with all applicable laws and generally accepted accounting
principles consistently applied;
	 
	(b)	 	give a true and fair view of the state of affairs of the relevant person at the date of those
accounts and of its profit for the period to which those accounts relate; and
	 
	(c)	 	fully disclose or provide for all significant liabilities of the relevant person and its
subsidiaries.
	 
	10.7	 	Provision of copies of SEC filings. The Borrower will notify the Lender of all filings made
with, and reports submitted to, the US Securities and Exchange Commission promptly after
making such filings or submitting such reports.
	 
	10.8	 	Consents. The Borrower will maintain in force and promptly obtain or renew, and will
promptly send certified copies to the Lender of, all consents required:
	 
	(a)	 	for each Owner to perform its obligations under the relevant MOA and/or the relevant Initial
Charterparty;
	 
	(b)	 	for the Borrower to perform its obligations under any Finance Document to which it is party;

22

 

	(c)	 	for the validity or enforceability of any Finance Document to which it is party; and
	 
	(d)	 	for each Owner to continue to own and operate the Ship owned by it,
	 
	 	 	and the Borrower will comply (or procure compliance as the case may be) with the terms of
all such consents.
	 
	10.9	 	Maintenance of Security Interests. The Borrower will:
	 
	(a)	 	at its own cost, do all that it reasonably can to ensure that any Finance Document validly
creates the obligations and the Security Interests which it purports to create; and
	 
	(b)	 	without limiting the generality of paragraph (a) above, at its own cost, promptly register,
file, record or enrol any Finance Document with any court or authority in all Pertinent
Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in
respect of any Finance Document, give any notice or take any other step which, in the opinion
of the Lender, is or has become necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence or to ensure or protect the priority of any Security
Interest which it creates.
	 
	10.10	 	Notification of litigation. The Borrower will provide the Lender with details of any legal
or administrative action involving the Borrower, any Security Party, the Approved Manager or
the Ships, their Earnings or their Insurances as soon as such action is instituted or it
becomes apparent to that Borrower that it is likely to be instituted, unless it is clear that
the legal or administrative action cannot be considered material in the context of any Finance
Document.
	 
	10.11	 	Principal place of business. The Borrower will maintain its place of business, and keep its
corporate documents and records, at the address stated at clause 27.2 (a) or the commencement
of this Agreement; and the Borrower will not establish, nor do anything as a result of which
it would be deemed to have, a place of business in England or the United States of America.
	 
	10.12	 	Confirmation of no default. The Borrower will, within 2 Business Days after service by the
Lender of a written request, serve on the Lender a notice which is signed by 2 directors of
the Borrower’s and which:
	 
	(a)	 	states that no Event of Default or Potential Event of Default has occurred; or
	 
	(b)	 	states that no Event of Default or Potential Event of Default has occurred, except for a
specified event or matter, of which all material details are given,
	 
	 	 	The Lender may serve requests under this Clause 10.12 from time to time; this Clause 10.12
does not affect the Borrower’s obligations under Clause 10.13.
	 
	10.13	 	Notification of default. The Borrower will notify the Lender as soon as the Borrower
becomes aware of:
	 
	(a)	 	the occurrence of an Event of Default or a Potential Event of Default; or
	 
	(b)	 	any matter which indicates that an Event of Default or a Potential Event of Default may have
occurred,
	 
	 	 	and will thereafter keep the Lender fully up-to-date with all developments.
	 
	10.14	 	Provision of further information. The Borrower will, and procure that the Guarantors will,
as soon as practicable after receiving the request, provide the Lender with any additional
financial or other information relating:

23

 

	(a)	 	to the Borrower, the Group, the Ships, their Insurances, their Earnings or the Owners; or
	 
	(b)	 	to any other matter relevant to, or to any provision of, a Finance Document,
	 
	 	 	which may reasonably be requested by the Lender at any time.
	 
	10.15	 	Provision of copies and translation of documents. If the Lender so requires, the Borrower
will supply the Lender with a certified English translation in respect of any of those
documents referred to above, such translation to be prepared by a translator approved by the
Lender.
	 
	10.16	 	Ownership. The Borrower shall procure that there is no change in the legal or beneficial
ownership of the shares in the Borrower or the Owners throughout the Security Period, or any
change in the management of the Borrower and the Owners unless the current ultimate beneficial
owner in the shares of the Borrower and the Owners, as disclosed to the Lender on or prior to
the date of this Agreement, shall remain the owner or, as the case may be, holder of at least
15 per cent. of the shares in the Borrower and the Owners and shall retain executive control
in the management of the Borrower and each Owner.
	 
	11	 	CORPORATE UNDERTAKINGS
	 
	11.1	 	General. The Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 11 at all times during the Security Period except as the Lender may
otherwise permit.
	 
	11.2	 	Maintenance of status. The Borrower will maintain its separate corporate existence and
remain in good standing under the laws of the Marshall Islands.
	 
	11.3	 	Negative undertakings. The Borrower will not:
	 
	(a)	 	change the nature of its business; or
	 
	(b)	 	pay any dividend or make any other form of distribution or effect any form of redemption,
purchase or return of share capital if at the relevant time an Event of Default has occurred
and has not been remedied within 5 Business Days or an Event of Default will occur as a result
of the payment of any dividend or the making of any other form of distribution; or
	 
	(c)	 	provide any form of credit or financial assistance to:

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

	(d)	 	allow either Owner to open or maintain, any account with any bank or financial institution
except accounts with the Lender for the purposes of the Finance Documents;
	 
	(e)	 	issue, allot or grant any person a right to any shares in its capital or repurchase or reduce
its issued share capital;

24

 

	(f)	 	acquire any shares or other securities other than US or UK Treasury bills and certificates of
deposit issued by major North American or European banks, or enter into any transaction in a
derivative; or
	 
	(g)	 	enter into any form of amalgamation, merger or de-merger or any form of reconstruction or
reorganisation.
	 
	11.4	 	Subordination of rights of Borrower. All rights which the Borrower at any time has against
either Owner or its assets shall be fully subordinated to the rights of the Lender under the
Finance Documents; and in particular, the Borrower shall not during the Security Period:
	 
	(a)	 	claim, or in a bankruptcy of either Owner prove for, any amount payable to the Borrower by
either Owner, whether in respect of this or any other transaction;
	 
	(b)	 	take or enforce any Security Interest for any such amount; or
	 
	(c)	 	claim to set-off any such amount against any amount payable by the Borrower to either Owner.
	 
	11.5	 	Financial Covenants. The Borrower shall ensure that at all times:
	 
	(a)	 	the Leverage Ratio shall be less than 80 per cent.; and
	 
	(b)	 	the ratio of EBITDA to Interest Expense shall be no less than 2,5:1.
	 
	11.6	 	Compliance Check. Compliance with the undertakings contained in Clause 11.5 shall be
determined by reference to the unaudited consolidated accounts for the first 3 financial
quarters in each financial year of the Borrower and for the fourth financial quarter in each
financial year of the Borrower, the audited consolidated accounts for that financial year of
the Borrower delivered to the Lender pursuant to this Agreement. Unless and until the Lender
otherwise agrees in writing, at the same time as it delivers those consolidated accounts, the
Borrower shall deliver to the Lender a certificate in the form set out in Schedule 3 hereto,
signed by the chief financial officer of the Borrower.
	 
	11.7	 	Distribution of Dividends. The Borrower may pay dividends or make other form of distribution
provided that the following conditions are fulfilled to the satisfaction of the Lender:

	 	(i)	 	no Event of Default or Potential Event of Default has occurred or will arise as
a result of the payment of any dividend or the making of any other form of
distribution; and
	 
	 	(ii)	 	if the dividends would not exceed 50 per cent. of the Borrower’s Unencumbered
Cash; the Lender has received evidence acceptable to the Lender in its entire
discretion that the amount of dividends to be distributed would not exceed 50 per cent.
of the Borrower’s Unencumbered Cash; or
	 
	 	(iii)	 	if the dividends would exceed 50 per cent. of the Borrower’s Unencumbered
Cash, the Lender has provided its prior consent in writing, such consent not to be
unreasonably withheld.

	12	 	INSURANCE
	 
	12.1	 	General. The Borrower undertakes with the Lender to procure that each Owner will comply with
the following provisions of this Clause 12 at all times during the Security

25

 

	 	 	Period (after the Ship which is owned or to be owned by that Owner has been delivered to it
under the relevant MOA) except as the Lender may otherwise permit.

	12.2	 	Maintenance of obligatory insurances. The Borrower shall procure that each Owner shall keep
the Ship owned by it insured at the expense of that Owner against:
	 
	(a)	 	fire and usual marine risks (including hull and machinery and excess risks); and
	 
	(b)	 	war risks; and
	 
	(c)	 	protection and indemnity risks in excess of the limit of cover for oil pollution liability
risks included within the protection and indemnity risks; and
	 
	(d)	 	any other risks against which the Lender considers, having regard to practices and other
circumstances prevailing at the relevant time, it would in the opinion of the Lender be
reasonable for that Owner to insure and which are specified by the Lender by notice to that
Owner.
	 
	12.3	 	Terms of obligatory insurances. The Borrower shall procure that each Owner shall effect such
insurances:
	 
	(a)	 	in Dollars;
	 
	(b)	 	in the case of fire and usual marine risks and war risks, in an amount on an agreed value
basis at least the greater of (i) the market value of the Ship owned by that Owner for the
time being (as determined by the Lender pursuant to Clause 14.4 of this Agreement) and (ii)
such amount, which when aggregated with the amount for which the other Ship then subject to a
Mortgage is insured, is equal to 130 per cent. of the Loan; and
	 
	(c)	 	in the case of oil pollution liability risks, for an aggregate amount equal to the highest
level of cover from time to time available under basic protection and indemnity club entry
(with the international group of protection and indemnity clubs) and the international marine
insurance market (currently $1,000,000,000);
	 
	(d)	 	in relation to protection and indemnity risks in respect of the full value and tonnage of the
Ship owned by that Owner;
	 
	(e)	 	on such terms as shall from time to time be approved in writing by the Lender (including,
without limitation, a blocking and trapping clause); and
	 
	(f)	 	through approved brokers and with approved insurance companies and/or underwriters or, in the
case of war risks and protection and indemnity risks, in approved war risks and protection and
indemnity risks associations.
	 
	12.4	 	Further protections for the Lender. In addition to the terms set out in Clause 12.3, the
Borrower shall procure that the obligatory insurances shall:
	 
	(a)	 	(except in relation to risks referred to in Clause 12.2(c)) whenever the Lender so requires
name (or be amended to name) the Lender as additional named assured for its rights and
interests, warranted no operational interest and with full waiver of rights of subrogation
against the Lender, but without the Lender thereby being liable to pay (but having the right
to pay) premiums, calls or other assessments in respect of such insurance;
	 
	(b)	 	name the Lender as sole loss payee with such directions for payment as the Lender may
specify;

26

 

	(c)	 	provide that all payments by or on behalf of the insurers under the obligatory insurances to
the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;
	 
	(d)	 	provide that such obligatory insurances shall be primary without right of contribution from
other insurances which may be carried by the Lender;
	 
	(e)	 	provide that the Lender may make proof of loss if the Owners fail to do so; and
	 
	(f)	 	provide that if any obligatory insurance is cancelled, or if any substantial change is made
in the coverage which adversely affects the interest of the Lender, or if any obligatory
insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse
shall not be effective with respect to the Lender for 30 days (or 7 days in the case of war
risks) after receipt by the Lender of prior written notice from the insurers of such
cancellation, change or lapse.
	 
	12.5	 	Renewal of obligatory insurances. The Borrower shall procure that each Owner shall:
	 
	(a)	 	at least 21 days before the expiry of any obligatory insurance:

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

	(b)	 	at least 14 days before the expiry of any obligatory insurance, renew the insurance; and
	 
	(c)	 	procure that the approved brokers and/or the war risks and protection and indemnity
associations with which such a renewal is effected shall promptly after the renewal notify the
Lender in writing of the terms and conditions of the renewal.
	 
	12.6	 	Copies of policies; letters of undertaking. The Borrower shall procure that each Owner shall
ensure that all approved brokers provide the Lender with copies of all policies relating to
the obligatory insurances which they effect or renew and of a letter or letters or undertaking
in a form required by the Lender and including undertakings by the approved brokers that:
	 
	(a)	 	they will have endorsed on each policy, immediately upon issue, a loss payable clause and a
notice of assignment complying with the provisions of Clause 12.4;
	 
	(b)	 	they will hold such policies, and the benefit of such insurances, to the order of the Lender
in accordance with the said loss payable clause;
	 
	(c)	 	they will advise the Lender immediately of any material change to the terms of the obligatory
insurances;
	 
	(d)	 	they will notify the Lender, not less than 14 days before the expiry of the obligatory
insurances, in the event of their not having received notice of renewal instructions from that
Owner and, in the event of their receiving instructions to renew, they will promptly notify
the Lender of the terms of the instructions; and
	 
	(e)	 	they will not set off against any sum recoverable in respect of a claim relating to the Ship
owned by that Owner under such obligatory insurances any premiums or other amounts due to them
or any other person whether in respect of that Ship or otherwise, they waive any lien on the
policies (including, without limitation, any fleet lien) or, any sums received under them,
which they might have in respect of such premiums or other

27

 

	 	 	amounts, and they will not cancel such obligatory insurances by reason of non-payment of
such premiums or other amounts, and will arrange for a separate policy to be issued in
respect of that Ship forthwith upon being so requested by the Lender.
	 
	12.7	 	Copies of certificates of entry. The Borrower shall procure that each Owner shall ensure
that any protection and indemnity and/or war risks associations in which the Ship owned by
that Owner is entered provides the Lender with:
	 
	(a)	 	a certified copy of the certificate of entry for that Ship; and
	 
	(b)	 	a letter or letters of undertaking in such form as may be required by the Lender; and
	 
	(c)	 	where required to be issued under the terms of insurance/indemnity provided by that Owner’s
protection and indemnity association, a certified copy of each United States of America voyage
quarterly declaration (or other similar document or documents) made by that Owner in relation
to its Ship in accordance with the requirements of such protection and indemnity association;
and
	 
	(d)	 	a certified copy of each certificate of financial responsibility for pollution by oil or
other Environmentally Sensitive Material issued by the relevant certifying authority in
relation to that Ship.
	 
	12.8	 	Deposit of original policies. The Borrower shall procure that each Owner shall ensure that
all policies relating to obligatory insurances are deposited with the approved brokers through
which the insurances are effected or renewed.
	 
	12.9	 	Payment of premiums. The Borrower shall procure that each Owner shall punctually pay all
premiums or other sums payable in respect of the obligatory insurances and produce all
relevant receipts when so required by the Lender.
	 
	12.10	 	Guarantees. The Borrower shall procure that each Owner shall ensure that any guarantees
required by a protection and indemnity or war risks association are promptly issued and remain
in full force and effect.
	 
	12.11	 	Restrictions on employment. The Borrower shall procure that neither Owner shall employ the
Ship owned by it, nor shall permit her to be employed, outside the cover provided by any
obligatory insurances.
	 
	12.12	 	Compliance with terms of insurances. The Borrower shall procure that neither Owner does or
omits to do (or permits to be done or not to be done) any act or thing which would or might
render any obligatory insurance invalid, void, voidable or unenforceable or render any sum
payable thereunder repayable in whole or in part; and in particular:
	 
	(a)	 	the Borrower shall procure that each Owner shall take all necessary action and comply with
all requirements which may from time to time be applicable to the obligatory insurances, and
(without limiting the obligation contained in Clause 12.7(c) above) ensure that the obligatory
insurances are not made subject to any exclusions or qualifications to which the Lender has
not given its prior approval;
	 
	(b)	 	the Borrower shall procure that neither Owner shall make any changes relating to the
classification or classification society or manager or operator of the Ship owned by it
approved by the underwriters of the obligatory insurances;
	 
	(c)	 	the Borrower shall procure that each Owner shall make all quarterly or other voyage
declarations which may be required by the protection and indemnity risks association in which
the Ship owned by it is entered to maintain cover for trading to the United States of America
and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any
other applicable legislation); and

28

 

	(d)	 	the Borrower shall procure that neither Owner shall employ the Ship owned by it, nor shall
allow it to be employed, otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers and complying with
any requirements (as to extra premium or otherwise) which the insurers specify.
	 
	12.13	 	Alteration to terms of insurances. The Borrower shall procure that neither Owner shall
either make or agree to any alteration to the terms of any obligatory insurance or waive any
right relating to any obligatory insurance without the prior written consent of the Lender.
	 
	12.14	 	Settlement of claims. The Borrower shall procure that neither Owner shall settle,
compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents, evidence and
information to enable the Lender to collect or recover any moneys which at any time become
payable in respect of the obligatory insurances.
	 
	12.15	 	Provision of copies of communications. The Borrower shall procure that each Owner shall
provide the Lender, at the time of each such communication, copies of all written
communications between that Owner and:
	 
	(a)	 	the approved brokers; and
	 
	(b)	 	the approved protection and indemnity and/or war risks associations; and
	 
	(c)	 	the approved insurance companies and/or underwriters, which relate directly or indirectly to:

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

	12.16	 	Provision of information. In addition, the Borrower shall procure that each Owner shall
promptly provide the Lender (or any persons which it may designate) with any information which
the Lender (or any such designated person) requests for the purpose of:
	 
	(a)	 	obtaining or preparing any report from an independent marine insurance broker as to the
adequacy of the obligatory insurances effected or proposed to be effected; and/or
	 
	(b)	 	effecting, maintaining or renewing any such insurances as are referred to in Clause 12.17
below or dealing with or considering any matters relating to any such insurances,
	 
	 	 	and the Borrower shall procure that each Owner shall, forthwith upon demand, indemnify the
Lender in respect of all fees and other expenses incurred by or for the account of the
Lender in connection with any such report as is referred to in paragraph (a) above.
	 
	12.17	 	Mortgagee’s interest, additional perils. The Lender shall be entitled from time to time to
effect, maintain and renew all or any of the following insurances in such amounts, on such
terms, through such insurers and generally in such manner as the Lender may from time to time
consider appropriate:
	 
	(a)	 	a mortgagee’s interest marine insurance in relation to each Ship in an amount equal to 115
per cent. of the Loan providing for the indemnification of the Lender for any losses under

29

 

	 	 	or in connection with any Finance Document which directly or indirectly result from
loss of or damage to either Ship or a liability of either Ship or of either Owner, being a
loss or damage which is prima facie covered by an obligatory insurance but in respect of
which there is a non-payment (or reduced payment) by the underwriters by reason of, or on
the basis of an allegation concerning:

	 	(i)	 	any act or omission on the part of an Owner, of any operator, charterer,
manager or sub-manager of the Ship owned by it or of any officer, employee or Lender of
an Owner or of any such person, including any breach of warranty or condition or any
non-disclosure relating to such obligatory insurance;
	 
	 	(ii)	 	any act or omission, whether deliberate, negligent or accidental, or any
knowledge or privity of an Owner, any other person referred to in paragraph (i) above,
or of any officer, employee or agent of that Owner or of such a person, including the
casting away or damaging of the Ship owned by it and/or the Ship owned by it being
unseaworthy; and/or
	 
	 	(iii)	 	any other matter capable of being insured against under a mortgagee’s interest
marine insurance policy whether or not similar to the foregoing;

	(b)	 	a mortgagee’s interest additional perils policy in relation to each Ship in such amount as
the Lender may consider appropriate, providing for the indemnification of the Lender against,
among other things, any possible losses or other consequences of any Environmental Claim,
including the risk of expropriation, arrest or any form of detention of a Ship, the imposition
of any Security Interest over a Ship and/or any other matter capable of being insured against
under a mortgagee’s interest additional perils policy whether or not similar to the foregoing,
	 
	 	 	and the Borrower shall upon demand fully indemnify the Lender in respect of all premiums and
other expenses which are incurred in connection with or with a view to effecting,
maintaining or renewing any such insurance or dealing with, or considering, any matter
arising out of any such insurance.
	 
	12.18	 	Review of insurance requirements. The Lender shall be entitled to review the requirements
of this Clause 12 from time to time in order to take account of any changes in circumstances
after the date of this Agreement which are, in the opinion of the Lender, significant and
capable of affecting either Owner or either Ship and its or their insurance (including,
without limitation, changes in the availability or the cost of insurance coverage or the risks
to which the Owners may be subject), and may appoint insurance consultants in relation to this
review at the cost of the Borrower.
	 
	12.19	 	Modification of insurance requirements. The Lender shall notify the Borrower of any
proposed modification under Clause 12.18 to the requirements of this Clause 12 which the
Lender reasonably consider appropriate in the circumstances, and such modification shall take
effect on and from the date it is notified in writing to the Borrower as an amendment to this
Clause 12 and shall bind the Borrower accordingly.
	 
	12.20	 	Compliance with mortgagee’s instructions. The Lender shall be entitled (without prejudice
to or limitation of any other rights which it may have or acquire under any Finance Document)
to require a Ship to remain at any safe port or to proceed to and remain at any safe port
designated by the Lender until the relevant Owner implements any amendments to the terms of
the obligatory insurances and any operational changes required as a result of a notice served
under Clause 12.19.
	 
	13	 	SHIP COVENANTS
	 
	13.1	 	General. The Borrower also undertakes with the Lender to procure that each Owner complies
with the following provisions of this Clause 13 at all times during the Security

30

 

	 	 	Period except as the Lender, may otherwise permit (such consent not to be unreasonably
withheld in relation to Clause 13.13(b) only).

	13.2	 	Ship’s name and registration. The Borrower shall procure that each Owner shall keep the Ship
owned by it registered in its name under the Approved Flag; shall not do, omit to do or allow
to be done anything as a result of which such registration might be cancelled or imperilled;
and shall not change the name or port of registry of that Ship.
	 
	13.3	 	Repair and classification. The Borrower shall procure that each Owner shall keep the Ship
owned by it in a good and safe condition and state of repair:
	 
	(a)	 	consistent with first-class ship ownership and management practice;
	 
	(b)	 	so as to maintain the highest class with a first class classification society which is a
member of IACS acceptable to the Lender free of outstanding or overdue recommendations and
conditions of such classification society;
	 
	(c)	 	so as to comply with all laws and regulations applicable to vessels registered at ports in
the Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade
from time to time, including but not limited to the ISM Code, the ISM Code Documentation and
the ISPS Code; and
	 
	(d)	 	so as to comply with all laws and regulations applicable to vessels registered, under the
Marshall Islands flag or to vessels trading to any jurisdiction to which that Ship may trade
from time to time including but not limited to the ISM Code, the ISPS Code and the ISM Code
Documentation.
	 
	13.4	 	Classification society undertaking. The Borrower shall provide that the Owners shall
instruct the classification society referred to in Clause 13.3 (and procure that the
classification society undertakes with the Lender):
	 
	(a)	 	to send to the Lender, following receipt of a written request from the Lender, certified true
copies of all original class records held by the classification society in relation to its
Ship;
	 
	(b)	 	to allow the Lender (or its agents), at any time and from time to time, to inspect the
original class and related records of that Owner and its Ship at the offices of the
classification society and to take copies of them;
	 
	(c)	 	to notify the Lender immediately in writing if the classification society:

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

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

	 	(i)	 	to confirm that neither Owner is in default of any of its contractual
obligations or liabilities to the classification society and, without limiting the
foregoing, that it has paid in full all fees or other charges due and payable to the
classification society; or
	 
	 	(ii)	 	if either Owner is in default of any of its contractual obligations or
liabilities to the classification society, to specify to the Lender in reasonable
detail the facts and

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	 	 	 	circumstances of such default, the consequences of such default, and any remedy
period agreed or allowed by the classification society.

	13.5	 	Modification. The Borrower shall procure that neither Owner shall make any modification or
repairs to, or replacement of, either Ship or equipment installed on her which would or might
materially alter the structure, type or performance characteristics of that Ship or materially
reduce her value.
	 
	13.6	 	Removal of parts. The Borrower shall procure that neither Owner shall remove any material
part of either Ship, or any item of equipment installed on, either Ship unless the part or
item so removed is forthwith replaced by a suitable part or item which is in the same
condition as or better condition than the part or item removed, is free from any Security
Interest or any right in favour of any person other than the Lender and becomes on
installation on the relevant Ship the property of the relevant Owner and subject to the
security constituted by the Mortgage Provided that an Owner may install equipment owned by a
third party if the equipment can be removed without any risk of damage to the Ship owned by
it.
	 
	13.7	 	Surveys. The Borrower shall procure that each Owner shall submit the Ship owned by it
regularly to all periodical or other surveys which may be required for classification purposes
and, if so required by the Lender, provide the Lender with copies of all survey reports.
	 
	13.8	 	Inspection. The Borrower shall procure that each Owner shall permit the Lender (by surveyors
or other persons appointed by it for that purpose) to board the Ship owned by it at all
reasonable times to inspect her condition or to satisfy themselves about proposed or executed
repairs and shall afford all proper facilities for such inspections.
	 
	13.9	 	Prevention of and release from arrest. The Borrower shall procure that each Owner shall
promptly discharge:
	 
	(a)	 	all liabilities which give or may give rise to maritime or possessory liens on or claims
enforceable against the Ship owned by it, the Earnings or the Insurances;
	 
	(b)	 	all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or
the Insurances; and
	 
	(c)	 	all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the
Insurances,
	 
	 	 	and, forthwith upon receiving notice of the arrest of the Ship owned by it, or of her
detention in exercise or purported exercise of any lien or claim, the relevant Owner shall
procure her release by providing bail or otherwise as the circumstances may require.
	 
	13.10	 	Compliance with laws etc. The Borrower shall procure that each Owner shall:
	 
	(a)	 	comply, or procure compliance with the ISM Code, all Environmental Laws, the ISPS Code and
all other laws or regulations relating to the Ship owned by it, its ownership, operation and
management or to the business of that Owner; and
	 
	(b)	 	not employ the Ship owned by it nor allow her employment in any manner contrary to any law or
regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS
Code.
	 
	13.11	 	Provision of information. The Borrower shall procure that each Owner shall promptly provide
the Lender with any information which the Lender request regarding:
	 
	(a)	 	the Ship owned by it, her employment, position and engagements;

32

 

	(b)	 	the Earnings and payments and amounts due to the master and crew of the Ship owned by it;
	 
	(c)	 	any expenses incurred, or likely to be incurred, in connection with the operation,
maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;
	 
	(d)	 	any towages and salvages; and
	 
	(e)	 	its compliance or the Approved Manager’s compliance or the compliance of the Ship owned by it
with the ISM Code and the ISPS Code,
	 
	 	 	and, upon the Lender’s request, provide copies of any current charter relating to the Ship
owned by it and of any current charter guarantee, and copies of the ISM Code Documentation
and the ISPS Code Documentation.
	 
	13.12	 	Notification of certain events. The Borrower shall procure that each Owner shall
immediately notify the Lender by letter of:
	 
	(a)	 	any casualty which is or is likely to be or to become a Major Casualty;
	 
	(b)	 	any occurrence as a result of which the Ship owned by it has become or is, by the passing of
time or otherwise, likely to become a Total Loss;
	 
	(c)	 	any requirement or recommendation made by any insurer or classification society or by any
competent authority which is not immediately complied with;
	 
	(d)	 	any arrest or detention of the Ship owned by it, any exercise or purported exercise of any
lien on that Ship or her Earnings or any requisition of that Ship for hire;
	 
	(e)	 	any intended dry docking of the Ship owned by it;
	 
	(f)	 	any Environmental Claim made against that Owner or in connection with the Ship owned by it,
or any Environmental Incident;
	 
	(g)	 	any claim for breach of the ISM Code or the ISPS Code being made against that Owner, an ISM
Responsible Person, the Approved Manager or otherwise in connection with the Ship owned by it;
or
	 
	(h)	 	any other matter, event or incident, actual or threatened, the effect of which will or could
lead to the ISM Code or the ISPS Code not being complied with,
	 
	 	 	and that Owner shall keep the Lender advised in writing on a regular basis and in such
detail as the Lender shall reasonably require of that Owner’s, the Approved Manager’s or any
other person’s response to any of those events or matters.
	 
	13.13	 	Restrictions on chartering, appointment of managers etc. The Borrower shall procure that
neither Owner shall:
	 
	(a)	 	save under a Charterparty, let the Ship owned by it on any other bareboat or demise charter
for any period;
	 
	(b)	 	enter into any time or consecutive voyage charter in respect of the Ship owned by it for a
term which exceeds, or which by virtue of any optional extensions may be equal to or exceed,
12 months;
	 
	(c)	 	enter into any charter in relation to the Ship owned by it under which more than 2 months’
hire (or the equivalent) is payable in advance;

33

 

	(d)	 	charter the Ship owned by it otherwise than on bona fide arm’s length terms at the time when
the Ship is fixed;
	 
	(e)	 	appoint a manager of the Ship owned by it other than the Approved Manager or agree to any
alteration to the terms of the Approved Manager’s appointment;
	 
	(f)	 	de-activate or lay up the Ship owned by it; or
	 
	(g)	 	put the Ship owned by it into the possession of any person for the purpose of work being done
upon her in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other
currency) unless that person has first given to the Lender and in terms satisfactory to it a
written undertaking not to exercise any lien on that Ship or her Earnings for the cost of such
work or otherwise.
	 
	13.14	 	Notice of Mortgage. The Borrower shall procure that each Owner shall keep the Mortgage
registered against the Ship owned by it as a valid first priority mortgage or preferred (as
the case may be), carry on board that Ship a certified copy of the relevant Mortgage and place
and maintain in a conspicuous place in the navigation room and the Master’s cabin of that Ship
a framed printed notice stating that that Ship is mortgaged by that Owner to the Lender.
	 
	13.15	 	Sharing of Earnings. The Borrower shall procure that neither Owner shall:
	 
	(a)	 	enter into any agreement or arrangement for the sharing of any Earnings;
	 
	(b)	 	enter into any agreement or arrangement for the postponement of any date on which any
Earnings are due; the reduction of the amount of any Earnings or otherwise for the release or
adverse alteration of any right of that Owner to any Earnings; or
	 
	(c)	 	enter into any agreement or arrangement for the release of, or adverse alteration to, any
guarantee or Security Interest relating to any Earnings.
	 
	13.16	 	Time Charter Assignment or Tripartite Agreement. If either Owner enters into:

	 	(a)	 	any Charterparty (other than a bareboat or demise Charterparty) the Borrower
shall procure that the relevant Owner shall at the request of the Lender execute in
favour of the Lender a Charterparty Assignment and shall deliver to the Lender such
other documents, including, without limitation documents in respect of the charterer,
equivalent to those referred to at paragraphs 3, 4 and 5 of Part A of Schedule 2 hereof
as the Lender may require; or
	 
	 	(b)	 	any bareboat or demise Charterparty, the Borrower shall procure that the
relevant Owner shall at the request of the Lender execute in favour of the Lender a
Charterparty Assignment and a Tripartite Agreement and shall deliver to the Lender
such other documents, including, without limitation documents in respect of the
relevant bareboat charterer, equivalent to those referred to at paragraphs 3, 4 and 5
of Part A of Schedule 2 hereof as the Lender may require.

	13.17	 	ISPS Code. The Borrower shall procure that each Owner and the Approved Manager complies
with the ISPS Code and in particular, without limitation, shall:
	 
	(a)	 	procure that each Ship and the company responsible for that Ship’s compliance with the ISPS
Code comply with the ISPS Code;
	 
	(b)	 	maintain for each Ship an ISM SMS and an ISSC; and
	 
	(c)	 	notify the Lender immediately in writing of any actual or threatened withdrawal, suspension,
cancellation or material modification of the ISSC.

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	14	 	SECURITY COVER
	 
	14.1	 	Provision of additional security cover; prepayment of Loan. The Borrower undertakes with the
Lender that, if the Lender notifies the Borrower that:
	 
	(a)	 	the aggregate Market Value of the Ships subject to a Mortgage, or as the case may be the
Market Value of the relevant Ship; plus
	 
	(b)	 	the net realisable value of any additional security previously provided under this Clause 14,
	 
	 	 	is below the Relevant Percentage of the Loan, the Borrower will, within 1 month after the
date on which the Lender’s notice is served, either:

	 	(i)	 	provide, or ensure that a third party provides, additional security which, in
the opinion of the Lender, has a net realisable value at least equal to the shortfall
and which consists of either (a) cash pledged to the Lender or (b) a Security Interest
(including, but not limited to, a first priority or preferred (as the case may be)
mortgage over another vessel), covering such asset or assets and documented in such
terms as the Lender may, approve or require; or
	 
	 	(ii)	 	prepay in accordance with Clause 7 such part (at least) of the Loan as will
eliminate the shortfall,

	 	 	where “Relevant Percentage” means 125 per cent.
	 
	 	 	The Borrower’s compliance with this Clause 14.1 shall be determined at the end of every
quarter in each financial year of the Borrower and at any other time that the Lender may (in
its absolute discretion) consider necessary.
	 
	14.2	 	Meaning of additional security. In Clause 14.1 “security” means a Security Interest over an
asset or assets (whether securing the Borrower’s liabilities under the Finance Documents or a
guarantee in respect of those liabilities), or a guarantee, letter of credit or other security
in respect of the Borrower’s liabilities under the Finance Documents.
	 
	14.3	 	Requirement for additional documents. The Borrower shall not be deemed to have complied with
Clause 14.1 (i) above until the Lender has received in connection with the additional security
certified copies of documents of the kinds referred to in paragraphs 3, 4 and 5 of Schedule 2,
Part A and such legal opinions in terms acceptable to the Lender from such lawyers as they may
select.
	 
	14.4	 	Valuation of Ships. The market value of a Ship at any date is that shown by the average of
two valuations prepared:
	 
	(a)	 	as at a date not more than 14 days previously;
	 
	(b)	 	by the 2 Approved Brokers appointed by the Lender in its sole discretion;
	 
	(c)	 	with or without physical inspection of the relevant Ship (as the Lender may require);
	 
	(d)	 	on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms
as between a willing seller and a willing buyer, free of any existing charter or other
contract of employment; and
	 
	(e)	 	after deducting the estimated amount of the usual and reasonable expenses which would be
incurred in connection with the sale.

35

 

	 	 	Provided that if one such valuation is more than 115 per cent. of the other valuation, then
the Lender shall select a third Approved Broker to provide a valuation of the relevant Ship
in accordance with this Clause 14.4 and the Market Value of the Ship shall be the arithmetic
average of all three such valuations.
	 
	 	 	The Borrower shall provide (at its own cost) the valuation of each Ship which is required to
determine its Market Value pursuant to this Clause 14.4 once a year throughout the Security
Period and at any other time that the Lender may (in its absolutely discretion) consider
necessary.
	 
	14.5	 	Value of additional security. The net realisable value of any additional security which is
provided under Clause 14.1 and which consists of a Security Interest over a vessel shall be
that shown by a valuation complying with the requirements of Clause 14.4.
	 
	14.6	 	Frequency of Valuations. The Borrower acknowledges and agrees that the Lender may commission
valuations of each Ship at such times as the Lender shall deem necessary and, in any event,
not less often than once during each 12 month period of the Security Period.
	 
	14.7	 	Valuations binding. Any valuation under Clause 14.1(i), 14.4 or 14.5 shall be binding and
conclusive as regards the Borrower, as shall be any valuation which the Lender makes of a
security which does not consist of or include a Security Interest.
	 
	14.8	 	Provision of information. The Borrower shall promptly provide the Lender and any Approved
Broker or expert acting under Clause 14.4 or 14.5 with any information which the Lender or the
Approved Broker or expert may request for the purposes of the valuation; and, if the Borrower
fails to provide, or procure the provision of, the information by the date specified in the
request, the valuation may be made on any basis and assumptions which the Approved Broker or
the Lender (or the expert appointed by them) consider prudent.
	 
	14.9	 	Payment of valuation expenses. Without prejudice to the generality of the Borrower’s
obligations under Clauses 19.2, 19.3 and 20.3, the Borrower shall, on demand, pay the Lender
the amount of the fees and expenses of any Approved Broker or expert instructed by the Lender
under this Clause and all legal and other expenses incurred by the Lender in connection with
any matter arising out of this Clause.
	 
	15	 	PAYMENTS AND CALCULATIONS
	 
	15.1	 	Currency and method of payments. All payments to be made by the Borrower to the Lender under
a Finance Document shall be made:
	 
	(a)	 	by not later than 13.00 p.m. (Athens time) on the due date;
	 
	(b)	 	in same day Dollar funds settled through the New York Clearing House Interbank Payments
System (or in such other Dollar funds and/or settled in such other manner as the Lender shall
specify as being customary at the time for the settlement of international transactions of the
type contemplated by this Agreement); and
	 
	(c)	 	the account of the Lender at Citibank N.A., New York, NY, USA (Account No. 10928312 under
reference “STEALTHGAS INC. — for Shipping Branch), or to such other account with such other
bank as the Lender may from time to time notify to the Borrower.
	 
	15.2	 	Payment on non-Business Day. If any payment by the Borrower under a Finance Document would
otherwise fall due on a day which is not a Business Day:
	 
	(a)	 	the due date shall be extended to the next succeeding Business Day; or

36

 

	(b)	 	if the next succeeding Business Day falls in the next calendar month, the due date shall be
brought forward to the immediately preceding Business Day,
	 
	 	 	and interest shall be payable during any extension under paragraph (a) at the rate payable
on the original due date.
	 
	15.3	 	Basis for calculation of periodic payments. All interest and commitment fee and any other
payments under any Finance Document which are of an annual or periodic nature shall accrue
from day to day and shall be calculated on the basis of the actual number of days elapsed and
a 360 day year.
	 
	15.4	 	Lender accounts. The Lender shall maintain accounts showing the amounts owing to it by the
Borrower and each Security Party under the Finance Documents and all payments in respect of
those amounts made by the Borrower and any Security Party.
	 
	15.5	 	Accounts prima facie evidence. If any accounts maintained under Clause 15.4 show an amount
to be owing by the Borrower or a Security Party to the Lender, those accounts shall, absent
manifest error, be prima facie evidence that that amount is owing to the Lender.
	 
	16	 	APPLICATION OF RECEIPTS
	 
	16.1	 	Normal order of application. Except as any Finance Document may otherwise provide, any sums
which are received or recovered by the Lender under or by virtue of any Finance Document be
applied:
	 
	(a)	 	FIRSTLY: in or towards the payment of expenses and all sums other than principal or interest
which may be owing to the Lender under the Finance Documents;
	 
	(b)	 	SECONDLY: in or towards the payment of any arrears of interest owing to the Lender hereunder;
	 
	(c)	 	THIRDLY: in or towards the payment of any other sums of money due to the Lender under the
Finance Documents;
	 
	(d)	 	FOURTHLY: in or towards the repayment of the Loan (whether the same is due and payable or
not);
	 
	(e)	 	FIFTHLY: following the occurrence of an Event of Default, in retention of an amount equal to
any amount not then due and payable under any Finance Document but which the Lender, by notice
to the Borrower and the Security Parties, states in its opinion will or may become due and
payable in the future and, upon those amounts becoming due and payable, in or towards
satisfaction of them in accordance with the provisions of this Clause; and
	 
	(f)	 	SIXTHLY: the balance (if any) shall be paid as the Borrower shall direct in writing to the
Lender.
	 
	16.2	 	Variation of order of application. The Lender may by notice to the Borrower and the Security
Parties provide for a different manner of application from that set out in Clause 16.1 either
as regards a specified sum or sums or as regards sums in a specified category or categories.
	 
	16.3	 	Notice of variation of order of application. The Lender may give notices under Clause 16.2
from time to time; and such a notice may be stated to apply not only to sums which may be
received or recovered in the future, but also to any sum which has been received or recovered
on or after the third Business Day before the date on which the notice is served.

37

 

	16.4	 	Appropriation rights overriden. This Clause 16 and any notice which the Lender gives under
Clause 16.2 shall override any right of appropriation possessed, and any appropriation made,
by the Borrower or any Security Party.
	 
	17	 	APPLICATION OF EARNINGS
	 
	17.1	 	Payment of Earnings. The Borrower undertakes with the Lender to ensure that, throughout the
Security Period (subject only to the provisions of the General Assignments), all the Earnings
of a Ship are paid to the Earnings Account for that Ship.
	 
	17.2	 	Monthly retentions. The Borrower undertakes with the Lender to ensure that, at the end of
each calendar month of the Security Period, there is transferred to the Retention Account out
of the aggregate Earnings received in the Earnings Accounts during the preceding calendar
month:
	 
	(a)	 	one-sixth of the amount of each repayment instalment falling due under Clause 7.1 on the next
Repayment Date; and
	 
	(b)	 	the relevant fraction of the aggregate amount of interest on the Loan which is payable on the
next due date for payment of interest under this Agreement.
	 
	 	 	The “relevant fraction” is a fraction of which the numerator is 1 and the denominator the
number of months comprised in the then current Interest Period (or, if the period is
shorter, the number of months from the later of the commencement of the current Interest
Period or the last due date for payment of interest to the next due date for payment of
interest under this Agreement).
	 
	17.3	 	Shortfall in Earnings. If the aggregate Earnings received in the Earnings Accounts are
insufficient in any month for the required amount to be transferred to the Retention Account
under Clause 17.2, the Borrowers shall make up the amount of the insufficiency on demand from
the Lender.
	 
	17.4	 	Application of retentions. Until an Event of Default occurs, the Lender shall on each
Repayment Date and on each due date for the payment of interest under this Agreement apply so
much of the then balance on the Retention Account as equals:
	 
	(a)	 	the repayment instalment due on that Repayment Date; or
	 
	(b)	 	the amount of interest payable on that interest payment date,
	 
	 	 	in discharge of the Borrower’s liability for that repayment instalment or that interest.
	 
	17.5	 	Interest accrued on accounts. Any credit balance on the Earnings Accounts and the Retention
Account shall bear interest at the rate from time to time offered by the Lender to its
customers for Dollar deposits of similar amounts and for periods similar to those for which
such balances appear to the Lender likely to remain the Retention Account.
	 
	17.6	 	Release of accrued interest. Interest accruing under Clause 17.5 shall be released to the
Borrowers on each Repayment Date unless an Event of Default has occurred or the then credit
balance on the Retention Account is less than what would have been the balance had the full
amount required by Clause 17.2 (and Clause 17.3, if applicable) been transferred in that and
each previous month.
	 
	17.7	 	Location of accounts. The Borrower shall promptly:
	 
	(a)	 	comply or procure compliance by the Owners, with any requirement of the Lender as to the
location or re-location of an Earnings Account; and

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	(b)	 	execute, or procure the execution by the Owners of, any documents which the Lender specifies
to create or maintain in favour of the Lender a Security Interest over each Earnings Accounts.
	 
	17.8	 	Debits for expenses etc. The Lender shall be entitled (but not obliged) from time to time to
debit the Earnings Accounts without prior notice in order to discharge any amount due and
payable under Clause 19 or 20 to the Lender or payment of which the Lender has become entitled
to demand under Clause 19 or 20.
	 
	17.9	 	Borrower’s obligations unaffected. The provisions of this Clause 17 (as distinct from a
distribution effected under Clause 17.4) do not affect:
	 
	(a)	 	the liability of the Borrower to make payments of principal and interest on the due dates; or
	 
	(b)	 	any other liability or obligation of the Borrower or any other Security Party under any
Finance Document.
	 
	18	 	EVENTS OF DEFAULT
	 
	18.1	 	Events of Default. An Event of Default occurs if:
	 
	(a)	 	the Borrower or any Security Party (except the Approved Manager) fails to pay when due or (if
so payable) on demand any sum payable under a Finance Document or under any document relating
to a Finance Document; or
	 
	(b)	 	any breach occurs of Clause 8.2, 10.2(a), 10.2(c), 11.2, 11.3, 11.5, 14.1 or 17.1; or
	 
	(c)	 	any breach by the Borrower or any Security Party occurs of any provision of a Finance
Document (other than a breach covered by paragraphs (a) or (b) above) which, in the opinion of
the Lender, is capable of remedy, and such default continues unremedied 10 days after written
notice from the Lender requesting action to remedy the same; or
	 
	(d)	 	(subject to any applicable grace period specified in the Finance Document) any breach by the
Borrower or any Security Party occurs of any provision of a Finance Document (other than a
breach falling within paragraphs (a), (b) or (c) above); or
	 
	(e)	 	any representation, warranty or statement made or repeated by, or by an officer of, the
Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice
or document relating to a Finance Document is untrue or misleading when it is made or
repeated; or
	 
	(f)	 	any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:

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

39

 

	 	 	 	transaction, relating to any Financial Indebtedness of a Relevant Person ceases to
be available or becomes capable of being terminated as a result of any event of
default, or cash cover is required, or becomes capable of being required, in respect
of such a facility as a result of any event of default; or

	 	(v)	 	any Security Interest securing any Financial Indebtedness of a Relevant Person
becomes enforceable; or

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

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

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

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

	(j)	 	any official consent necessary to enable either Owner to own, operate or charter the Ship
owned by it or to enable either Owner, the Borrower or any other Security Party to comply with
any provision which the Lender considers material of a Finance Document, the relevant MOA, is
not granted, expires without being renewed, is revoked or becomes liable to revocation or any
condition of such a consent is not fulfilled; or
	 
	(k)	 	it appears to the Lender that, without its prior consent, a change has occurred or probably
has occurred after the date of this Agreement in the ultimate beneficial ownership of any of
the shares the Borrower, the Owners or in any other Security Party or in the ultimate control
of the voting rights attaching to any of those shares unless the current ultimate beneficial
owner in the shares of the Borrower and the Owners, as disclosed to the Lender on or prior to
the date of this Agreement, shall remain the owner or, as the case may be, holder of at least
15 per cent. of the shares in the Borrower and the Owners and shall retain executive control
in the management of the Borrower and each Owner; or
	 
	(l)	 	any provision which the Lender considers material of a Finance Document proves to have been
or becomes invalid or unenforceable, or a Security Interest created by a Finance Document
proves to have been or becomes invalid or unenforceable or such a Security Interest proves to
have ranked after, or loses its priority to, another Security Interest or any other third
party claim or interest; or
	 
	(m)	 	the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
	 
	(n)	 	any other event occurs or any other circumstances arise or develop including, without
limitation:

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

	 	 	in the light of which the Lender considers that there is a significant risk that the
Borrower or either Owner is, or will later become, unable to discharge its liabilities under
the Finance Documents as they fall due.
	 
	18.2	 	Actions following an Event of Default. On, or at any time after, the occurrence of an Event
of Default the Lender may:
	 
	(a)	 	serve on the Borrower a notice stating that all obligations of the Lender to the Borrower
under this Agreement are terminated; and/or
	 
	(b)	 	serve on the Borrower a notice stating that the Loan, all accrued interest and all other
amounts accrued or owing under this Agreement are immediately due and payable or are due and
payable on demand; and/or
	 
	(c)	 	take any other action which, as a result of the Event of Default or any notice served under
paragraph (a) or (b) above, the Lender is entitled to take under any Finance Document or any
applicable law.

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	18.3	 	Termination of Commitment. On the service of a notice under paragraph (a) of Clause 18.2,
the Commitment and all other obligations of the Lender to the Borrower under this Agreement
shall cancelled.
	 
	18.4	 	Acceleration of Loan. On the service of a notice under paragraph (b) of Clause 18.2, the
Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any
Security Party under this Agreement and every other Finance Document shall become immediately
due and payable or, as the case may be, payable on demand.
	 
	18.5	 	Multiple notices; action without notice. The Lender may serve notices under paragraphs (a)
and (b) of Clause 18.2 simultaneously or on different dates and it and if the Lender may take
any action referred to in that Clause if no such notice is served or simultaneously with or at
any time after the service of both or either of such notices.
	 
	18.6	 	Exclusion of Lender liability. Neither the Lender, nor any receiver or manager appointed by
the Lender, shall have any liability to the Borrower or a Security Party:
	 
	(a)	 	for any loss caused by an exercise of rights under, or enforcement of a Security Interest
created by, a Finance Document or by any failure or delay to exercise such a right or to
enforce such a Security Interest; or
	 
	(b)	 	as mortgagee in possession or otherwise, for any income or principal amount which might have
been produced by or realised from any asset comprised in such a Security Interest or for any
reduction (however caused) in the value of such an asset,
	 
	 	 	except that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused by the gross negligence or the wilful misconduct of the
Lender’s own officers and employees or ( as the case may be) such receiver’s or manager’s
own partners or employees.
	 
	18.7	 	Relevant Persons. In this Clause 18 “a Relevant Person” means the Borrower, the Owners and
any other member of the Group.
	 
	18.8	 	Interpretation. In Clause 18.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of default in a facility
agreement or a termination event in a finance lease; and in Clause 18.1(g) “petition” includes
an application.
	 
	19	 	FEES AND EXPENSES
	 
	19.1	 	Arrangement fee. The Borrower shall pay to the Lender:
	 
	(a)	 	on the date of the commitment letter a non-refundable arrangement fee of $100,800; and
	 
	(b)	 	quarterly in arrears during the period from (and including 30 April 2008) to the earlier of
(i) the Drawdown Date in respect of the Gas Shuriken Advance and (ii) the last day of the
Availability Period and on the last day of that period, for the account of the Lender, a
non-refundable commitment fee equal to 0.20 per cent. per annum of the undrawn amount of the
Loan.
	 
	19.2	 	Costs of negotiation, preparation etc. The Borrower shall pay to the Lender on its demand
the amount of all expenses incurred by the Lender in connection with the negotiation,
preparation, execution or registration of any Finance Document or any related document or with
any transaction contemplated by a Finance Document or a related document (including, without
limitation, out of pocket expenses, legal fees and related VAT).

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	19.3	 	Costs of variations, amendments, enforcement etc. The Borrower shall pay to the Lender, on
the Lender’s demand, the amount of all expenses incurred by the Lender in connection with:
	 
	(a)	 	any amendment or supplement to a Finance Document, or any proposal for such an amendment to
be made;
	 
	(b)	 	any consent or waiver by the Lender under or in connection with a Finance Document, or any
request for such a consent or waiver;
	 
	(c)	 	the valuation of any security provided or offered under Clause 14 or any other matter
relating to such security;
	 
	(d)	 	where the Lender, in its absolute opinion, considers that there has been a material change to
the insurances in respect of either Ship, the review of the insurances or either Ship pursuant
to Clause 12.18; and
	 
	(e)	 	any step taken by the Lender with a view to the protection, exercise or enforcement of any
right or Security Interest created by a Finance Document or for any similar purpose.
	 
	 	 	There shall be recoverable under paragraph (d) the full amount of all legal expenses,
whether or not such as would be allowed under rules of court or any taxation or other
procedure carried out under such rules.
	 
	19.4	 	Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any
Finance Document, and shall, on the Lender’s demand, fully indemnify the Lender against any
liabilities and expenses resulting from any failure or delay by the Borrower to pay such a
tax.
	 
	19.5	 	Certification of amounts. A notice which is signed by two officers of the Lender, which
states that a specified amount, or aggregate amount, is due to the Lender under this Clause 19
and which indicates (without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall be prima facie evidence that
the amount, or aggregate amount, is due.
	 
	20	 	INDEMNITIES
	 
	20.1	 	Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify
the Lender on the Lender’s demand in respect of all expenses, liabilities and losses which are
incurred by the Lender, or which the Lender reasonably and with due diligence estimates that
it will incur, as a result of or in connection with:
	 
	(a)	 	an Advance not being borrowed on the date specified in the Drawdown Notice for any reason
other than a default by the Lender;
	 
	(b)	 	the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on
the last day of an Interest Period or other relevant period;
	 
	(c)	 	any failure (for whatever reason) by the Borrower to make payment of any amount due under a
Finance Document on the due date or, if so payable, on demand (after giving credit for any
default interest paid by the Borrower on the amount concerned under Clause 6); and
	 
	(d)	 	the occurrence and/or continuance of an Event of Default or a Potential Event of Default
and/or the acceleration of repayment of the Loan under Clause 18,

43

 

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

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	 	 	the Borrower shall indemnify the Lender against the loss arising when the amount of the
payment actually received by the Lender is converted at the available rate of exchange into
the Contractual Currency.
	 
	 	 	In this Clause 20.5, the “available rate of exchange” means the rate at which the Lender
concerned is able at the opening of business (London time) on the Business Day after it
receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
	 
	 	 	This Clause 20.5 creates a separate liability of the Borrower which is distinct from its
other liabilities under the Finance Documents and which shall not be merged in any judgment
or order relating to those other liabilities.
	 
	20.6	 	Certification of amounts. A notice which is signed by 2 officers of the Lender, which states
that a specified amount, or aggregate amount, is due to the Lender under this Clause 20 and
which indicates (without necessarily specifying a detailed breakdown) the matters in respect
of which the amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.
	 
	21	 	NO SET-OFF OR TAX DEDUCTION
	 
	21.1	 	No deductions. All amounts due from the Borrower under a Finance Document shall be paid:
	 
	(a)	 	without any form of set-off, cross-claim or condition; and
	 
	(b)	 	free and clear of any tax deduction except a tax deduction which the Borrower is required by
law to make.
	 
	21.2	 	Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any
payment:
	 
	(a)	 	the Borrower shall notify the Lender as soon as it becomes aware of the requirement;
	 
	(b)	 	the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and
in any event before any fine or penalty arises; and
	 
	(c)	 	the amount due in respect of the payment shall be increased by the amount necessary to ensure
that the Lender receives and retains (free from any liability relating to the tax deduction) a
net amount which, after the tax deduction, is equal to the full amount which it would
otherwise have received.
	 
	21.3	 	Evidence of payment of taxes. Within 1 month after making any tax deduction, the Borrower
shall deliver to the Lender documentary evidence satisfactory to the Lender that the tax had
been paid to the appropriate taxation authority.
	 
	21.4	 	Exclusion of tax on overall net income. In this Clause 21 “tax deduction” means any
deduction or withholding for or on account of any present or future tax except tax on the
Lender’s overall net income.
	 
	22	 	ILLEGALITY, ETC
	 
	22.1	 	Illegality. This Clause 22 applies if the Lender notifies the Borrower that it has become,
or will with effect from a specified date, become:
	 
	(a)	 	unlawful or prohibited as a result of the introduction of a new law, an amendment to an
existing law or a change in the manner in which an existing law is or will be interpreted or
applied; or

45

 

	(b)	 	contrary to, or inconsistent with, any regulation,
	 
	 	 	for the Lender to maintain or give effect to any of its obligations under this Agreement in
the manner contemplated by this Agreement.
	 
	22.2	 	Notification and effect of illegality. On the Lender notifying the Borrower under Clause
22.1, the Commitment shall terminate; and thereupon or, if later, on the date specified in the
Lender’s notice under Clause 22.1 as the date on which the notified event would become
effective, the Borrower shall prepay the Loan in full in accordance with Clause 7.
	 
	23	 	INCREASED COSTS
	 
	23.1	 	Increased costs. This Clause 23 applies if the Lender (the “Notifying Lender”) notifies the
Borrower that the Lender considers that as a result of:
	 
	(a)	 	the introduction or alteration after the date of this Agreement of a law or an alteration
after the date of this Agreement in the manner in which a law is interpreted or applied
(disregarding any effect which relates to the application to payments under this Agreement of
a tax on the Lender’s overall net income); or
	 
	(b)	 	the effect of complying with any regulation (including any which relates to capital adequacy
or liquidity controls or which affects the manner in which the Notifying Lender allocates
capital resources to its obligations under this Agreement including, without limitation, the
implementation or application of a compliance with the “International Convergence of Capital
Measurement and Capital Standards a Revised Framework” published by the Basel Committee on
Banking Supervision in June 2004 in the form existing on the date of this Agreement (“Basel
II”) or any other law or regulation which implements Basel II (whether such implementation,
application a compliance is by a government, regulator, Creditor Party or any of its
affiliates),
	 
	 	 	is that the Lender (or a parent company of it) has incurred or will incur an “increased
cost”, that is to say:

	 	(i)	 	an additional or increased cost incurred as a result of, or in connection with,
the Lender having entered into, or being a party to, this Agreement, of funding or
maintaining the Loan or performing its obligations under this Agreement, or of having
outstanding all or any part of the Loan or other unpaid sums; or
	 
	 	(ii)	 	a reduction in the amount of any payment to the Lender under this Agreement or
in the effective return which such a payment represents to the Lender or on its
capital;
	 
	 	(iii)	 	an additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the Loan or (as
the case may require) the proportion of that cost attributable to the Loan; or
	 
	 	(iv)	 	a liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Lender under this Agreement,

	 	 	but not an item attributable to a change in the rate of tax on the overall net income of the
Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in
Clause 20.1 or by Clause 21.
	 
	 	 	For the purposes of this Clause 23.1 the Lender may in good faith allocate or spread costs
and/or losses among its assets and liabilities (or any class thereof) on such basis as it
considers appropriate.

46

 

	23.2	 	Payment of increased costs. The Borrower shall pay to the Lender, on the Lender’s demand,
the amounts which the Lender from time to time notifies the Borrower that it has specified to
be necessary to compensate it for the increased cost.
	 
	23.3	 	Notice of prepayment. If the Borrower is not willing to continue to compensate the Notifying
Lender for the increased cost under Clause 23.2, the Borrower may give the Lender not less
than 15 days’ notice of its intention to prepay the Loan at the end of an Interest Period.
	 
	23.4	 	Prepayment; termination of Commitment. A notice under Clause 23.3 shall be irrevocable; and
on the date specified in the Borrower’s notice of intended prepayment, the Commitment shall be
cancelled and the Borrower shall prepay (without premium or penalty) the Loan together with
accrued interest thereon at the applicable rate plus there relevant Margin.
	 
	23.5	 	Application of prepayment. Clause 7 shall apply in relation to the prepayment.
	 
	24	 	SET-OFF
	 
	24.1	 	Application of credit balances. The Lender may without prior notice:
	 
	(a)	 	apply any balance (whether or not then due) which at any time stands to the credit of any
account in the name of the Borrower at any office in any country of the Lender in or towards
satisfaction of any sum then due from the Borrower to the Lender under any of the Finance
Documents; and
	 
	(b)	 	for that purpose:

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

	24.2	 	Existing rights unaffected. The Lender shall not be obliged to exercise any of its rights
under Clause 24.1; and those rights shall be without prejudice and in addition to any right of
set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any document).
	 
	25	 	TRANSFERS AND CHANGES IN LENDING OFFICES
	 
	25.1	 	Transfer or assignment by Borrower. The Borrower may not:
	 
	(a)	 	transfer or assign any of its rights or obligations under any Finance Document; or
	 
	(b)	 	enter into any merger, de-merger, amalgamation or other reorganisation, or carry out any
other act, as a result of which any of its rights or liabilities would vest in, or pass to,
another person.
	 
	25.2	 	Assignment by Lender. The Lender may assign or transfer all or any of the rights and
interests which it has under or by virtue of the Finance Documents without the consent of the
Borrower.
	 
	25.3	 	Rights of assignee. In respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document, or any misrepresentation made in or in connection with a
Finance Document, a direct or indirect assignee or, as the case may be,

47

 

	 	 	transferee of any of the Lender’s rights or interests under or by virtue of the Finance
Documents shall be entitled to recover damages by reference to the loss incurred by that
assignee or, as the case may be, transferee as a result of the breach or misrepresentation
irrespective of whether the Lender would have incurred a loss of that kind or amount.

	25.4	 	Sub-participation; subrogation assignment. The Lender may sub-participate all or any part of
its rights and/or obligations under or in connection with the Finance Documents without the
consent of, or any notice to, the Borrower or any Security Party and the Lender may assign,
all or any part of those rights to an insurer or surety who has become subrogated to them.
	 
	25.5	 	Disclosure of information. The Lender may disclose to a potential assignee or
sub-participant any information which the Lender has received in relation to the Borrower, any
Security Party or their affairs under or in connection with any Finance Document.
	 
	25.6	 	Change of lending office. The Lender may change its lending office by giving notice to the
Borrower and the change shall become effective on the later of:
	 
	(a)	 	the date on which the Borrower receives the notice; and
	 
	(b)	 	the date, if any, specified in the notice as the date on which the change will come into
effect.
	 
	26	 	VARIATIONS AND WAIVERS
	 
	26.1	 	Variations, waivers etc. by Lender. Subject to Clause 26.2, a document shall be effective to
vary, waive, suspend or limit any provision of a Finance Document, or the Lender’s rights or
remedies under such a provision or the general law, only if the document is signed, or
specifically agreed to by fax, by the Borrower and by the Lender and, if the document relates
to a Finance Document to which a Security Party is party, by that Security Party.
	 
	26.2	 	Exclusion of other or implied variations. Except for a document which satisfies the
requirements of Clauses 26.1 no document, and no act, course of conduct, failure or neglect to
act, delay or acquiescence on the part of the Lender (or any person acting on its behalf)
shall result in the Lender (or any person acting on its behalf) being taken to have varied,
waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing,
relying on or exercising:
	 
	(a)	 	a provision of this Agreement or another Finance Document; or
	 
	(b)	 	an Event of Default; or
	 
	(c)	 	a breach by the Borrower or a Security Party of an obligation under a Finance Document or the
general law; or
	 
	(d)	 	any right or remedy conferred by any Finance Document or by the general law,
	 
	 	 	and there shall not be implied into any Finance Document any term or condition requiring any
such provision to be enforced, or such right or remedy to be exercised, within a certain or
reasonable time.
	 
	27	 	NOTICES
	 
	27.1	 	General. Unless otherwise specifically provided, any notice under or in connection with any
Finance Document shall be given by letter or fax; and references in the Finance

48

 

	 	 	Documents to written notices, notices in writing and notices signed by particular persons shall be
construed accordingly.
	 
	27.2	 	Addresses for communications. A notice by letter or fax shall be sent:

	 	 	 	 	 
	(a)

	 	to the Borrower:
	 	c/o StealthGas Inc.

331 Kiffisias Avenue

Kiffisia 145 61

Greece
	 

	 	 	 	Fax No: +30 210 625 2817
	 
	 	 	 	 
	(b)

	 	to the Lender:
	 	National Bank of Greece S.A.

2 Bouboulinas Street & Akti Miaouli

185 35 Piraeus

Greece

Fax No: +30 210 41 44 120

		 	or to such other address as the relevant party may notify the other.
	 
	27.3	 	Effective date of notices. Subject to Clauses 27.4 and 27.5:
	 
	(a)	 	a notice which is delivered personally or posted shall be deemed to be served, and shall take
effect, at the time when it is delivered; and
	 
	(b)	 	a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours
after its transmission is completed.
	 
	27.4	 	Service outside business hours. However, if under Clause 27.3 a notice would be deemed to be
served:
	 
	(a)	 	on a day which is not a business day in the place of receipt; or
	 
	(b)	 	on such a business day, but after 5 p.m. local time,
	 
	 	 	the notice shall (subject to Clause 27.5) be deemed to be served, and shall take effect, at
9 a.m. on the next day which is such a business day.
	 
	27.5	 	Illegible notices. Clauses 27.3 and 27.4 do not apply if the recipient of a notice notifies
the sender within one hour after the time at which the notice would otherwise be deemed to be
served that the notice has been received in a form which is illegible in a material respect.
	 
	27.6	 	Valid notices. A notice under or in connection with a Finance Document shall not be invalid
by reason that its contents or the manner of serving it do not comply with the requirements of
this Agreement or, where appropriate, any other Finance Document under which it is served if:
	 
	(a)	 	the failure to serve it in accordance with the requirements of this Agreement or other
Finance Document, as the case may be, has not caused any party to suffer any significant loss
or prejudice; or
	 
	(b)	 	in the case of incorrect and/or incomplete contents, it should have been reasonably clear to
the party on which the notice was served what the correct or missing particulars should have
been.
	 
	27.7	 	English language. Any notice under or in connection with a Finance Document shall be in
English.

49

 

	27.8	 	Meaning of “notice”. In this Clause “notice” includes any demand, consent, authorisation,
approval, instruction, waiver or other communication.
	 
	28	 	SUPPLEMENTAL
	 
	28.1	 	Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give
to the Lender are:
	 
	(a)	 	cumulative;
	 
	(b)	 	may be exercised as often as appears expedient; and
	 
	(c)	 	shall not, unless a Finance Document explicitly and specifically states so, be taken to
exclude or limit any right or remedy conferred by any law.
	 
	28.2	 	Severability of provisions. If any provision of a Finance Document is or subsequently
becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or
legality of the other provisions of that Finance Document or of the provisions of any other
Finance Document.
	 
	28.3	 	Third party rights. A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of
this Agreement.
	 
	28.4	 	Counterparts. A Finance Document may be executed in any number of counterparts.
	 
	29	 	LAW AND JURISDICTION
	 
	29.1	 	English law. This Agreement shall be governed by, and construed in accordance with, English
law.
	 
	29.2	 	Exclusive English jurisdiction. Subject to Clause 29.3, the courts of England shall have
exclusive jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.
	 
	29.3	 	Choice of forum for the exclusive benefit of the Lender. Clause 29.2 is for the exclusive
benefit of the Lender, which reserves the right:
	 
	(a)	 	to commence proceedings in relation to any matter which arises out of or in connection with
this Agreement in the courts of any country other than England and which have or claim
jurisdiction to that matter; and
	 
	(b)	 	to commence such proceedings in the courts of any such country or countries concurrently with
or in addition to proceedings in England or without commencing proceedings in England.
	 
	 	 	The Borrower shall not commence any proceedings in any country other than England in
relation to a matter which arises out of or in connection with this Agreement.
	 
	29.4	 	Process Lender. The Borrower irrevocably appoints Saville & Co. at its office for the time
being, presently at One Carey Lane, London, EC2V 8AE, England to act as its Lender to receive
and accept on its behalf any process or other document relating to any proceedings in the
English courts which are connected with this Agreement.
	 
	29.5	 	Lender rights unaffected. Nothing in this Clause 29 shall exclude or limit any right which
the Lender may have (whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of

50

 

	 	 	process, the recognition or enforcement of a judgment or any similar or related matter in
any jurisdiction.
	 
	29.6	 	Meaning of “proceedings”. In this Clause 29, “proceedings” means proceedings of any kind,
including an application for a provisional or protective measure.

AS WITNESS the hands of the duly authorised officers or attorneys of the parties the day and year
first before written.

51

 

SCHEDULE 1

DRAWDOWN NOTICE

	To:  	 	National Bank of Greece S.A.

2 Bouboulinas Street & Akti Miaouli

185 35 Piraeus

Greece

			
	 	 	 
	Attention: [Shipping Department]
	 	[l] 2008

DRAWDOWN NOTICE

	1	 	We refer to the loan agreement (the “Loan Agreement”) dated                      2008 and
made between us, the Borrower and you, the Lender, in connection with a loan facility of up to
US$33,240,000. Terms defined in the Loan Agreement have their defined meanings when used in
this Drawdown Notice.
	 
	2	 	We request to borrow the [     ] Advance as follows:
	 
	(a)	 	Amount: US$[     ];
	 
	(b)	 	Drawdown Date: [     ];
	 
	(c)	 	Duration of the first Interest Period shall be [     ] months;
	 
	(d)	 	Payment instructions : account of [                    ] and numbered [     ] with [          ] of [          ].
	 
	3	 	We represent and warrant that:
	 
	(a)	 	the representations and warranties in Clause 9 of the Loan Agreement would remain true and
not misleading if repeated on the date of this notice with reference to the circumstances now
existing; and
	 
	(b)	 	no Event of Default or Potential Event of Default has occurred or will result from the
borrowing of the Loan.
	 
	4	 	This notice cannot be revoked without your prior consent.
	 
	5	 	We authorise you to deduct any accrued commitment fee referred to in Clause 19 from the
amount of the Advance.
	 

 

Attorney-in-Fact

for and on behalf of

STEALTHGAS INC.

52

 

SCHEDULE 2

CONDITION PRECEDENT DOCUMENTS

In this Schedule 3 “Relevant Ship” means, in relation to an Advance, the Ship which is to be
part-financed by that Advance and “Owner” means the Owner which owns that Ship.

PART A

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

	1	 	A duly executed original of the Agreement, the Retention Account Pledge and each Guarantee.
	 
	2	 	Certified copies of the certificate of incorporation and constitutional documents of the
Borrower and each Owner.
	 
	3	 	Copies of resolutions of the shareholders and directors of the Borrower and each Owner
authorising the execution of each of the Finance Documents to which the Borrower or that Owner
is a party and, in the case of the Borrower, authorising named officers to give the Drawdown
Notices and other notices under this Agreement and in the case of each Owner ratifying the
execution of the MOA to which it is a party.
	 
	4	 	The original of any power of attorney under which any Finance Document is executed on behalf
of the Borrower or each Owner.
	 
	5	 	Copies of all consents which the Borrower or any Security Party requires to enter into, or
make any payment under, any Finance Document or either MOA.
	 
	6	 	Copies of each MOA and all amendments and supplements thereto and of all documents signed or
issued by the relevant Owner or the relevant Seller under or in connection with it evidencing
the relevant Contract Price.
	 
	7	 	All documentation required by the Lender in relation to the Borrower and each Owner pursuant
to the Lender’s “know your customer” requirements.
	 
	8	 	Documentary evidence that the agent for service of process named in Clause 29 has accepted
its appointment.
	 
	9	 	Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the
laws of the Marshall Islands and such other relevant jurisdictions as the Lender may require.
	 
	10	 	If the Lender so requires, in respect of any of the documents referred to above, a certified
English translation prepared by a translator approved by the Lender.

PART B

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

	1	 	A duly executed original of the Mortgage, the General Assignment and the Charterparty
Assignment for the Initial Charterparty (and of each document to be delivered under each of
them) in respect of the Relevant Ship.
	 
	2	 	Documentary evidence that:

53

 

	(a)	 	the Relevant Ship has been unconditionally delivered to, and accepted by, the relevant Owner
under the relevant MOA and the full purchase price payable under that MOA (comprising the
equity contribution of the Owner and the part financed by the relevant Advance) has been duly
paid (together with copies of the documents to be delivered by the relevant Seller to the
Owner pursuant to the relevant MOA, including but not limited to the bill of sale and the
protocol of delivery and acceptance);
	 
	(b)	 	the Relevant Ship is definitively and permanently registered in the name of the relevant
Owner under the Marshall Islands flag;
	 
	(c)	 	the Relevant Ship is in the absolute and unencumbered ownership of the relevant Owner save as
contemplated by the Finance Documents;
	 
	(d)	 	the Relevant Ship maintains the highest available class with such first-class classification
society which is a member of IACS as the Lender may approve free of all recommendations and
conditions of such classification society;
	 
	(e)	 	the Mortgage relative to the Relevant Ship has been duly registered or recorded (as the case
may be) against the Relevant Ship as a valid first priority or preferred ship mortgage in
accordance with the laws of the Marshall Islands;
	 
	(f)	 	the Relevant Ship has been unconditionally delivered by the relevant Owner to the Initial
Charterer under the Initial Charterparty relating to that Ship; and
	 
	(g)	 	the Relevant Ship is insured in accordance with the provisions of this Agreement and all
requirements therein in respect of insurances have been complied with.
	 
	6	 	Documents establishing that the Relevant Ship will, as from its Delivery Date, be managed by
the Approved Manager on terms acceptable to the Lender, together with:
	 
	(a)	 	the Approved Manager’s Undertaking in respect of the Relevant Ship; and
	 
	(b)	 	copies of the document of compliance (DOC), the ISSC and any other ISPS document and the
safety management certificate (SMC) referred to in paragraph (a) of the definition of the ISM
Code Documentation certified as true and in effect by the relevant Owner and the Approved
Manager.
	 
	7	 	Evidence that the Earnings Account in respect of the Relevant Ship has been duly opened with
the Lender by the relevant Owner.
	 
	8	 	Evidence that the Retention Account has been duly opened with the Lender by the Borrower.
	 
	9	 	Evidence satisfactory to the Lender that the Owner of the Relevant Ship remains a direct
wholly-owned subsidiary of the Borrower.
	 
	10	 	The Material Adverse Change Warranty Letter duly signed by the Borrower and countersigned by
the Owners.
	 
	11	 	A copy of the Initial Charterparty for the Ship together with such evidence the Lender may
require as to its due execution by the parties to it.
	 
	12	 	Two valuations of the Relevant Ship prepared by an Approved Broker appointed by the Lender,
stated to be for the purposes of this Agreement and prepared in accordance with Clause 14.4
which shows the value of the Relevant Ship in an amount acceptable to the Lender.

54

 

	13	 	A favourable opinion (at the cost of the Borrower) from an independent insurance consultant
acceptable to the Lender on such matters relating to the insurances for the Relevant Ship as
the Lender may require.
	 
	14	 	Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the
laws of the Marshall Islands and such other relevant jurisdictions as the Lender may require.
	 
	 	 	Every copy document delivered under this Schedule shall be certified as a true and up to
date copy by a director or the secretary (or equivalent officer) of the relevant Owner.

55

 

SCHEDULE 3

FORM OF COMPLIANCE CERTIFICATE

	To:  	 	The National Bank of Greece S.A.

2 Bouboulinas & Akti Miaouli Street

185 35 Piraeus

Greece

[l] 200[l]

Dear Sirs,

We refer to a loan agreement dated [l] 2008 (the “Loan Agreement”) made between (1)
StealthGas Inc. as borrower and (2) yourselves as lender.

Words and expressions defined in the Loan Agreement shall have the same meaning when used in this
compliance certificate.

We enclose with this certificate a copy of the [unaudited consolidated accounts for the Group for
the 6-month period ended [l]]/[the audited consolidated annual accounts of the Group for the
year ended [l]]. The accounts (i) have been prepared in accordance with all applicable laws
and generally accepted accounting principles consistently applied, (ii) give a true and fair view
of the state of affairs of the Group at the date of the accounts and of its profit for the period
to which the accounts relate and (iii) fully disclose or provide for all significant liabilities of
the Group.

The Borrower represents that no Event of Default has occurred as at the date of this certificate
[except for the following matter or event [set out all material details of matter or event]]. In
addition as of [l], the Borrower confirms compliance with the financial covenants set out in
Clause 11.5 of the Loan Agreement for the 6 months ending as at the date to which the enclosed
accounts are prepared.

We now certify that, as at [l]

(a) The Leverage Ratio is [l]; and

(b) the ratio of EBITDA to Interest Expense is [l].

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

 

[l]

Chief Financial Officer of

STEALTHGAS INC.

56

 

EXECUTION PAGE

BORROWER

	 	 	 
	SIGNED by /s/ Andrew Simmons

for and on behalf of

STEALTHGAS INC.

in the presence of:

	 	)

)

)

)

DELPHINE JOLY

Watson, Farley & Williams

2, Defteras Merarchias

Piraeus 185 36

Greece

LENDER

	 	 	 
	SIGNED by /s/ Stavros Stylos

And by /s/ Florakis Panagiotis

for and on behalf of

NATIONAL BANK OF GREECE S.A.

in the presence of:

	 	)

)

)

)

)

DELPHINE JOLY

Watson, Farley & Williams

2, Defteras Merarchias

Piraeus 185 36

Greece

57EX-4.22

Private & confidential

Dated: 28th August, 2008

EMPORIKI BANK OF GREECE S.A.

- and -

STEALTHGAS INC.

 

LOAN AGREEMENT NO. 201/2008

for a secured floating interest rate

loan facility of up to US$29,437,000

 

Theo V. Sioufas & Co.

Law Offices

Piraeus

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	CLAUSE	 	HEADINGS	 	PAGE	 
	 
	 	 	 	 	 	 
	1.
	 	PURPOSE, DEFINITIONS AND INTERPRETATION 	 	 	1	 
	2.
	 	THE LOAN 	 	 	13	 
	3.
	 	INTEREST 	 	 	14	 
	4.
	 	REPAYMENT — PREPAYMENT 	 	 	17	 
	5.
	 	PAYMENTS, TAXES AND COMPUTATION 	 	 	23	 
	6.
	 	REPRESENTATIONS AND WARRANTIES 	 	 	25	 
	7.
	 	CONDITIONS PRECEDENT 	 	 	31	 
	8.
	 	COVENANTS 	 	 	35	 
	9.
	 	EVENTS OF DEFAULT 	 	 	43	 
	10.
	 	INDEMNITIES — EXPENSES — FEES 	 	 	50	 
	11.
	 	SECURITY, APPLICATION AND SET-OFF 	 	 	54	 
	12.
	 	UNLAWFULNESS, INCREASED COSTS 	 	 	58	 
	13.
	 	ASSIGNMENT, PARTICIPATION, CHANGE OF LENDING BRANCH 	 	 	60	 
	14.
	 	COMMUNICATIONS 	 	 	62	 
	15.
	 	GOVERNING LAW AND JURISDICTION 	 	 	64	 

SCHEDULE

	 	 	 	 	 	 	 
	1.
	 	FORM OF DRAWDOWN NOTICE 	 	 	 	 

 

 

THIS AGREEMENT No. 201 is dated 28th August, 2008 made BETWEEN:

	(1)	 	EMPORIKI BANK OF GREECE S.A., a banking societe anonyme duly incorporated under the laws of
Greece, having its registered office at 11, Sofokleous Street, Athens, Greece, acting for the
purposes of this Agreement through its office at 114 Kolokotroni Street, Piraeus, Greece, as
lender (the “Bank”); and
	 
	(2)	 	STEALTHGAS INC., a company duly incorporated in the Republic of The Marshall Islands having
its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, P.O. Box
1405, Majuro, Marshall Islands MH 96960 (the
“Borrower”, which expression includes its
successors);

AND IT IS HEREBY AGREED as follows:

	1.	 	PURPOSE, DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions upon and subject to which it is agreed
that the Bank will make available to the Borrower a term loan of up to the lesser of (a)
Twenty nine million four hundred thirty seven thousand Dollars ($29,437,000) and (b) 75%
of the Market Values of the Vessels determined in accordance with Clause 8.10(b) to be
used for the purpose of financing part of the Market Values of the Vessels determined as
aforesaid.
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires each term or expression defined
in the recital of the parties and in this Clause shall have the meaning given to it in the
recital of the parties and in this Clause and:
	 
	 	 	“Accounts Pledge Agreement” means an agreement to be made between the Owners and the Bank
for the creation of a pledge in favour of the Bank over the Earnings Accounts and the
Retention Account, in form satisfactory to the Bank;
	 
	 	 	“Advance” means each borrowing of a portion of the Commitment by the Borrower or (as the
context may require) the principal amount of such borrowing;
	 
	 	 	“Agreed Rate” means a rate agreed between the Bank and the Borrower on the basis of which
(instead of LIBOR) the interest rate is determined pursuant to Clause 3.6;
	 
	 	 	“Availability Period” means the period starting on the date hereof and ending on the
15th September, 2008 or until such later date as the Bank may agree in writing
or on such earlier date (if any), (i) on which the whole Commitment has (or — in case that
the Commitment has been agreed in Clause 2.3 to be advanced in more than one Advance — all
Advances have) been advanced by the Bank to the Borrower, or (ii) on which the Borrower
cancels the whole of the undrawn Commitment under Clause 2.7 or (iii) on which the
Commitment is reduced to zero pursuant to Clauses 9.10 or 12.2 or 12.5 or any other Clause
of this Agreement;

1

 

	 	 	“Balloon Instalment” means the principal part of the Loan amounting to $8,831,008 (Eight million
eight hundred thirty one thousand and eight Dollars);
	 
	 	 	“Bank” means the Bank as specified in the beginning of this Agreement and the successors and
assigns of the Bank;
	 
	 	 	“Banking Day” means any day on which banks and foreign exchange markets in New York, London,
Athens and Piraeus and in each country or place in or at which an act is required to be done
under this Agreement in accordance with the usual practice of the Bank, are open for the
transaction of business of the nature contemplated in this Agreement;
	 
	 	 	“Borrowed Money” means Indebtedness incurred in respect of (i) money borrowed or raised, (ii) any
bond, note, loan stock, debenture or similar instrument, (iii) acceptance or documentary credit
facilities, (iv) deferred payments for assets or services acquired, (v) rental payments under
leases (whether in respect of land, machinery, equipment or otherwise) entered into primarily as a
method of raising finance or of financing the acquisition of the asset leased, (vi) guarantees,
bonds, stand-by letters of credit or other instruments issued in connection with the performance
of contracts and (vii) guarantees or other assurances against financial loss in respect of
Indebtedness of any person falling within any of paragraphs (i) to (vi) above;
	 
	 	 	“Borrower” means the Borrower as specified at the beginning of this Agreement;
	 
	 	 	“Charterparty” means in respect of each Vessel any time charterparty entered or to be entered by
the Owner thereof or any person, firm or company on its behalf, as owner, and a charterer
acceptable to the Bank (herein a “Charterer”), which Charterparty exceeds or is capable of
exceeding twelve (12) months in duration and on terms and conditions in all respects acceptable to
the Bank (and shall include any addenda thereto) and includes the Shell Charterparties;
	 
	 	 	“Charterparty Assignment” in relation to a Vessel means the assignment of the relevant Shell
Charterparty executed or (as the context may require) to be executed by the Owner thereof in
favour of the Bank and an acknowledgement of notice of the assignment in respect of such Shell
Charterparty to be given by the relevant Charterer, in form satisfactory to the Bank (together,
the “Charterparties Assignments”);
	 
	 	 	“Commitment” means the amount which the Bank has agreed to lend to the Borrower under Clause 2.1
as reduced pursuant to any relevant term of this Agreement;
	 
	 	 	“Commitment Letter” means the Commitment Letter dated 20th February, 2008 of the Bank
and shall include any amendments or addenda thereto;
	 
	 	 	“Confirmation” means a Confirmation exchanged, or deemed exchanged, between the Bank and the
Borrower as contemplated by the Master Agreement;
	 
	 	 	“Corporate Guarantors” means the Owners;

2

 

	 	 	“Corporate Guarantee” means any guarantee given or, as the context may require, to be given by a
Corporate Guarantor in form and substance satisfactory to the Bank as a security for the
Outstanding Indebtedness and any and all other obligations of the Borrower under this Agreement
and the Master Agreement (together, the “Corporate Guarantees”);
	 
	 	 	“Credit Support Document” means any document described as such in the Master Agreement and, where
the context permits, any other document referred to in any Credit Support Document which has the
effect of creating an Encumbrance in favour of the Bank;
	 
	 	 	“Default” means any Event of Default or any event which with the giving of notice or lapse of time
or the satisfaction of any other condition (or any combination thereof) would constitute an Event
of Default;
	 
	 	 	“Default Rate” means that rate of interest per annum which is determined in accordance with the
provisions of Clause 3.4;
	 
	 	 	“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the ISM
Code;
	 
	 	 	“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 means funds which are for same day
settlement in the New York Clearing House Interbank Payments System (or such other U.S. dollar
funds as may at the relevant time be customary for the settlement of international banking
transactions denominated in Dollars);
	 
	 	 	“Drawdown Date” means the day, being a Banking Day, on which the Commitment or an Advance is or,
as the context may require, shall be advanced to the Borrower;
	 
	 	 	“Drawdown Notice” means a notice substantially in the terms of Schedule 1;
	 
	 	 	“Early Termination Date” has the meaning given to that expression in section 14 of the Master
Agreement;
	 
	 	 	“Earnings” in relation to a Vessel, means all earnings of such Vessel, both present or future,
including all freight, hire and passage moneys, compensation payable to the Owner in the event of
requisition of such Vessel for hire, remuneration for salvage and towage services, demurrage and
detention moneys, contributions of any nature whatsoever in respect of general average, damages for
breach (or payments for variation or termination) of any Charterparty or other contract for the
employment of such Vessel and any other earnings whatsoever due or to become due to the Owner in
respect of such Vessel and all sums recoverable under the Insurances in respect of loss of Earnings
and includes, if and whenever such Vessel is employed on terms whereby any and all such moneys as
aforesaid are pooled or shared with any other person, that proportion of the net receipts of the
relevant pooling or sharing agreement which is attributable to such Vessel;
	 
	 	 	“Earnings Account” means an account opened or to be opened and maintained in the name of each
Owner with the Bank pursuant to Clause 11.7 and shall include any sub-

3

 

	 	 	accounts or call accounts (whether in Dollars or any other currency) opened under the same
designation or any revised designation or number from time to time notified by the Bank to the
Borrower or the relevant Owner and to which (inter alia) all Earnings of the Vessel owned by such
Owner are to be paid in accordance with Clauses 11.7 and 8.9(b) (together, the “Earnings
Accounts”);
	 
	 	 	“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, security interest, title retention, arrest, seizure, garnishee order (whether nisi or
absolute) or any other order or judgement having similar effect or other encumbrance of any kind
securing or any right conferring a priority of payment in respect of any obligation of any person;
	 
	 	 	“Environmental Affiliate” in relation to a Vessel means any agent or employee of the Owner thereof
or any other Relevant Party or any person having a contractual relationship with such Owner or any
other Relevant Party in connection with any Relevant Ship or her operation or the carriage of
cargo thereon;
	 
	 	 	“Environmental Approval” means any consent, authorisation, licence or approval of any governmental
or public body or authorities or courts applicable to any Relevant Ship or her operation or the
carriage of cargo thereon and/or passengers therein and/or provisions of goods and/or services on
or from the Relevant Ship required under any Environmental Law;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable governmental,
judicial or other regulatory authority alleging breach of, or non-compliance with, any
Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out of
an Environmental Incident or (ii) any claim by any other third party howsoever relating to or
arising out of an Environmental Incident (and, in each such case, “claim” shall mean a claim for
damages, clean-up costs, compliance, remedial action or otherwise);
	 
	 	 	“Environmental Incident” in relation to a Vessel means (i) any release of Material of Environmental
Concern from such Vessel, (ii) any incident in which Material of Environmental Concern is released
from a vessel other than such Vessel and which involves collision between such Vessel and such
other vessel or some other incident of navigation or operation, in either case, where such Vessel,
the Owner thereof or the Manager are actually at fault or otherwise liable (in whole or in part) or
(iii) any incident in which Material of Environmental Concern is released from a vessel other than
such Vessel and where such Vessel is actually liable to be arrested as a result and/or where the
Owner thereof or the Manager are actually at fault or otherwise liable;
	 
	 	 	“Environmental Laws” means all national, international and state laws, rules, regulations, treaties
and conventions applicable to any Relevant Ship pertaining to the pollution or protection of human
health or the environment including, without limitation, the carriage or Materials of Environmental
Concern and actual or threatened emissions, spills, releases or discharges of Materials of
Environmental Concern and actual or threatened emissions, spills, releases or discharges of
Materials of Environmental Concern from any Relevant Ship (including, without limitation, the

4

 

	 	 	United States Oil Pollution Act of 1990 and any comparable laws of the individual States of the
United States of America);
	 
	 	 	“Event of Default” means any event or circumstance set out in Clause 9 or described as such in any
other of the Security Documents;
	 
	 	 	“Expenses” means the aggregate at any relevant time (to the extent that the same have not been
received or recovered by the Bank) of:

	 	(a)	 	all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature,
(including, without limitation, Taxes, repair costs, registration fees and insurance
premiums, crew wages, repatriation expenses and seamen’s pension fund dues) suffered,
incurred, charged to or paid or committed to be paid by the Bank in connection with the
exercise of the powers referred to in or granted by any of the Security Documents or
otherwise payable by the Borrower in accordance with the terms of any of the Security
Documents;
	 
	 	(b)	 	the expenses referred to in Clause 10.2; and
	 
	 	(c)	 	interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings
from, in the case of Expenses referred to in sub-paragraph (b) above, the date on which such
Expenses were demanded by the Bank from the Borrower and in all other cases, the date on
which the same were suffered, incurred or paid by the Bank until the date of receipt or
recovery thereof (whether before or after judgement) at the Default Rate (as conclusively
certified by the Bank);

	 	 	“Final Maturity Date” means the date falling twelve (12) years from the Drawdown Date;
	 
	 	 	“Flag State” means the Republics of Marshall Islands (in the case of the Gastech Vessel) and the
Republic of Malta (in the case of Studio City Vessel) or, in the case of either Vessel, such other
state or territory proposed in writing by the Owner thereof to the Bank and approved (at its sole
discretion) by the Bank, as being the Flag State of such Vessel for the purposes of the Security
Documents;
	 
	 	 	“Gastech Owner” means
Gastech Inc., a company duly incorporated in the Republic of The
Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH 96960 (and includes its successors);
	 
	 	 	“General Assignment” in relation to each Vessel means the assignment collateral to the relevant
Mortgage executed or (as the context may require) to be executed by the Owner thereof in favour of
the Security Agent in form satisfactory to the Security Agent (together, the “General
Assignments”);
	 
	 	 	“Governmental Withholdings” means withholdings and any restrictions or conditions resulting in any
charge whatsoever imposed, either now or hereafter, by any sovereign state or by any political
sub-division or taxing authority of any
sovereign state;

5

 

	 	 	Group” means the Borrower, its Subsidiaries (including the Owners) and “Group Member” means any
member of the Group;
	 
	 	 	“IAS” means International Accounting Standards consistently applied;
	 
	 	 	“Indebtedness” means any obligation for the payment or repayment of money, whether as principal or
as surety, whether present or future, actual or contingent;
	 
	 	 	“Insurances” in relation to each Vessel means in respect of such Vessel all policies and contracts
of insurance and reinsurances for captive company, if applicable, (including, without limitation,
all entries of such Vessel in a protection and indemnity, war risks or other mutual insurance
association) which are from time to time in place or taken out or entered into by or for the
benefit of its Owner (whether in the sole name of its owner or in the joint names of its Owner and
the Security Agent) in respect of such Vessel and its earnings or otherwise howsoever in
connection with such Vessel and all benefits of such policies and/or contracts (including all
claims of whatsoever nature and return of premiums);
	 
	 	 	“Interest Payment Date” means in respect of the Loan or any part thereof in respect of which a
separate Interest Period is fixed the last day of the relevant Interest Period and in case of any
Interest Period longer than six (6) months the date(s) falling at successive six (6) monthly
intervals during such longer Interest Period and the last day of such Interest Period;
	 
	 	 	“Interest Period” means in relation to the Loan or any part thereof, each period for the
calculation of interest in respect of the Loan or such part ascertained in accordance with Clauses
3.2 and 3.3;
	 
	 	 	“ISM Code” means in relation to its application to an Owner, its Vessel and her operation:

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

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

6

 

	 	 	“ISM Code Documentation” includes:

	 	(a)	 	the DOC and SMC issued by a classification society in all respects acceptable to the Bank in
its absolute discretion pursuant to the ISM Code in relation to a Vessel within the period
specified by the ISM Code;
	 
	 	(b)	 	all other documents and data which are relevant to the ISM SMS and its implementation and
verification which the Bank may require by request; and
	 
	 	(c)	 	any other documents which are prepared or which are otherwise relevant to establish and
maintain each Vessel’s or its Owner’s compliance with the ISM Code which the Bank may require
by request;

	 	 	“ISM SMS” means the safety management system which is required to be developed, implemented and
maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Security Code of the International Maritime
Organization and includes any amendments or extensions thereto and any regulation issued pursuant
thereto;
	 
	 	 	“ISSC” means an International Ship Security Certificate issued in respect of each Vessel pursuant
to the ISPS Code;
	 
	 	 	“Lending Branch” means the office of the Bank appearing at the beginning of this Agreement or any
other office of the Bank designated by the Bank as the Lending Branch by notice to the Borrower;
	 
	 	 	“LIBOR” means, in relation to a particular period:

	 	(a)	 	the offered rate (if any) per annum for deposits in Dollars for a period equal to, or as near
as possible equal to, the relevant Interest Period, which appears on REUTERS BBA Page LIBOR 01
at or about 11.00 a.m. (London time) on the second Banking Day prior to the commencement of
that Interest Period (or, if the Bank shall have made a determination pursuant to clause 3.6
such later time (not being later than 1 p.m. (London time) on the first day of such period) as
the Bank may determine) (and, for the purposes of this Agreement, “REUTERS BBA Page LIBOR 01”
means the display designated as “REUTERS BBA Page LIBOR 01” on the Telerate Service or such
other page as may replace REUTERS BBA Page LIBOR 01 on that service for the purpose of
displaying rates comparable to that rate or on such other service as may be nominated by the
British Bankers’ Association for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for Dollars)
	 
	 	(b)	 	if on such date no such rate is so displayed, LIBOR for such period shall be the rate
determined by the Bank to be the rate at which the Bank in accordance with its usual
practices is able to obtain similar deposit(s) in Dollars in an amount approximately equal to
the amount in relation to which LIBOR is to be determined for a period equivalent to such
period in the London Interbank Market at or about 11:00 a.m. (London time) on the second
Banking Day before the first day of such period;

7

 

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

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

“Management Agreement” in relation to a Vessel means the agreement made or to be made between the
Owner thereof and the Manager providing for the appointment of the Manager to manage such Vessel
subject to and upon the terms and conditions therein contained and approved by the Bank (together,
“Management Agreements”);

“Manager”
means Stealth Maritime
Corp. S.A., a company duly incorporated under the laws
of the Republic of Liberia, whose registered office is at 80 Broad Street, Monrovia, Liberia and
having an established office in Greece under Greek laws 89/67, 378/68, 25/75 and 814/79 (as
amended) at 331 Kifissias Avenue, 145 61 Kifissia, Athens, Greece and/or any other person
nominated by the Borrower and acceptable to the Bank which shall manage the Vessels (or either of
them);

“Manager’s Undertaking” in relation to a Vessel means letter of undertaking and subordination
executed or (as the context may require) to be executed by the Manager in favour of the Bank, such
undertaking to be in form and substance satisfactory to the Bank (together, the “Manager’s
Undertakings”);

“Margin” means zero point nine zero per centum (0.90%) per annum;

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

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

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

“Market Value” in relation to a Vessel means the market value of such Vessel as determined in
accordance with Clause 8.10(b);

“Material of Environmental Concern” means and includes pollutants, contaminants toxic substances,
oil as defined in the United States Oil Pollution Act of 1990 and all

8

 

hazardous substances as defined in the United States Comprehensive Environmental Response,
Compensation and Liability Act 1988;

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

“Mortgage” means in relation to a Vessel the first preferred ship mortgage or, as the case may,
first priority ship mortgage and the Deed of Covenants supplemental thereto, to be executed by the
Owner thereof in favour of the Bank in form satisfactory to the Bank and be registered on such
Vessel on the relevant Drawdown Date (together, the
“Mortgages”);

“Mortgaged Vessel” means, at any relevant time, any Vessel which is at such time subject to a
Mortgage and/or the Earnings, the Insurances and Requisition Compensation (each as defined in the
relevant Mortgage or, as the case may be, General Assignment) of which are subject to an
Encumbrance pursuant to the relevant Security Documents and a Vessel shall for the purposes of
this Agreement be deemed to be a Mortgaged Vessel as from whichever shall be the earlier of (a)
the Drawdown Date of the relevant Advance for that Vessel and (b) the date that the Mortgage of
that Vessel 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
Borrower pursuant to Clause 4.3 following the sale or Total Loss of such Vessel and (ii) the date
on which all monies owing under the Security Documents have been repaid in full;

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

“Outstanding Indebtedness” means the aggregate of the Loan and interest accrued and accruing
thereon, the Expenses, the Master Agreement Liabilities and all other sums of money from time to
time owing by the Borrower to the Bank, including, without limitation, default interest, damages,
indemnities, costs, expenses, whether actually or contingently, presently or in the future, under
this Agreement, the Master Agreement and the other Security Documents;

“Owners” means, together, the Gastech Owner and the Studio City Owner and in the singular either
of them as the context may require;

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

“Permitted Liens” in relation to a Vessel means any lien on such Vessel for master’s, officer’s or
crew’s wages outstanding in the ordinary course of trading, any lien for salvage and any ship
repairer’s or outfitter’s possessory lien for a sum not (except

9

 

with the prior written consent of the Bank) exceeding the Major Casualty (as defined in the
Mortgages);

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

“Related Company” of any company is a company which is controlled by that company from time to
time;

“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;

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

“Relevant Party” means the Borrower, the Borrower’s Related Companies and any other Security Party
and any Security Party’s Related Companies;

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

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

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

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

“Retention Account” means an interest bearing account of the Borrower opened (or as the context
may require) to be opened by the Borrower with the Lending Office or such other branch of the Bank
or any other bank as may be required by and at the discretion of the Bank and includes any other
account designated by the Bank to be a Retention Account for the purposes of this Agreement;

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

10

 

“Security Party” means the Borrower, the Corporate Guarantors/Owners and any person (other than
the Bank) which is or will become a party to any of the Security Documents;

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

“Security Requirement” means the amount in Dollars (as certified by the Bank whose certificate
shall, in the absence of manifest error, be conclusively binding on the Borrower) which is at any
relevant time one hundred and twenty five percent (125%) of the aggregate of the Loan and the Swap
Exposure;

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

“Shell Charterparty” means in relation to:

	 	(a)	 	the Gastech Vessel means the time charter (code name “Shelltime 4”) dated February 8, 2006,
made between Shell Tankers Private Limited or Shell Nominee, of Singapore, later changed to
Shell International Eastern Trading Company owned by Shell Eastern Trading (Pte) Ltd., as
charterer (the “Charterer”), and Dreamship Inc., as owner (the “Original Owner”), for the
time-charter employment of such Vessel for a remaining period expiring in May 2009, at a
monthly ceiling hire of $245,000 and with all other terms and conditions acceptable to the
Bank (the “Gastech Shell Charterparty”); and
	 
	 	(b)	 	the Studio City Vessel means the a time charter (code name “Shelltime 4”) dated March 27,
2007, made between Shell Gas Trading (Asia Pacific) Inc., of Philippines, later changed to
Shell International Eastern Trading Company owned by Shell Eastern Trading (Pte) Ltd., as
charterer (the “Charterer”), and Stellar Management Ltd., as owner (the “Original Owner”),
for the time-charter employment of such Vessel for a remaining period expiring in July, 2010,
at a monthly hire of $247,000 and with all other terms and conditions acceptable to the Bank
(the “Studio City Shell Charterparty”),
	 
	 	 	 	(together, the “Shell Charterparties”);

	 	 	“SMC” in relation to a Vessel means a safety management certificate issued in respect of such
Vessel in accordance with rule 13 of the ISM Code;
	 
	 	 	“Studio City Owner” means Studio City Inc., a company duly incorporated in the Republic of
The Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH 96960 (and includes its successors);

11

 

“Subsidiary” means a body corporate from time to time of which another body corporate (a)
has direct or indirect control, or (b) owns directly or indirectly more than fifty percent
(50%) of the share capital or similar right of ownership (and in this definition “control”
means the power to direct the management and the policies of a body corporate, whether
through the ownership of voting capital, by contract or otherwise);

“Swap Exposure” means, as at any relevant time, the amount certified by the Bank to the
Borrower to be the aggregate net amount in Dollars which would be payable by the Borrower
to the Bank under (and calculated in accordance with) section 6(e) (Payments on Early
Termination) of the Master Agreement if an Early Termination Date had occurred at the
relevant time in relation to all continuing Transactions;

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

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

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

“Vessels” means, together:

	 	(a)	 	the gas carrier motor vessel “GAS KALOGEROS” of approximately 4,484 gt and
1,346 nt, registered in the ownership of the Studio City Owner at the Ships’ Registry
of the port of Valletta under the laws and flag of the Republic of Malta under IMO
Number 9392858 (the “Studio City Vessel”); and
	 
	 	(b)	 	the gas carrier motor vessel “GAS SIKOUSIS”
of approximately 3,434 gt and 1,031 nt, built in 2006 and registered in the ownership of the Gastech Owner at the Ships’
Registry of the port of Majuro under the laws and flag of the Republic of Marshall
Islands under Official Number 2843 (the “Gastech Vessel”),

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

	1.3	 	Interpretation. In this Agreement:

	 	(a)	 	Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement;
	 
	 	(b)	 	each of the terms defined in Clause 1.2 when used in plural and terms defined
in plural or words used in plural (and unless in the specific clause or sentence

12

 

	 	 	 	is otherwise expressly specified) mean all of them collectively and/or each of them
and/or anyone of them (even if this is not expressly so spelled out) as the context
may require or permit;

	 	(c)	 	subject to any specific provision of this Agreement or of any assignment
and/or participation or syndication agreement of any nature whatsoever, reference to
each of the parties hereto and to the other Security Documents shall be deemed to be
reference to and/or to include, as appropriate, their respective successors and
permitted assigns;
	 
	 	(d)	 	reference to a person shall be construed as including reference to a firm,
company, corporation or any State or any agency thereof;
	 
	 	(e)	 	where the context so admits, words in the singular include the plural and vice
versa;
	 
	 	(f)	 	the words “including” and “in particular” shall not be construed as limiting
the generality of any foregoing words;
	 
	 	(g)	 	this Agreement and all documents referred to in this Agreement include the
same as varied or supplemented from time to time;
	 
	 	(h)	 	reference to this Agreement includes all the terms of this Agreement and any
Schedules, Annexes or Appendices to this Agreement, which form an integral part of
same;
	 
	 	(i)	 	reference to Clauses, Sub-Clauses and Schedules are to Clauses, Sub-Clauses
and Schedules in this Agreement;
	 
	 	(j)	 	reference to a “guarantee” include references to an indemnity or other
assurance against financial loss including, without limitation, an obligation to
purchase assets or services as a consequence of a default by any other person to pay
any Indebtedness and “guaranteed” shall be construed accordingly;
	 
	 	(k)	 	reference to the opinion of the Bank or a determination or acceptance by the
Bank or to documents, acts, or persons acceptable or satisfactory to the Bank or the
like shall be construed as reference to opinion, determination, acceptance or
satisfaction of the Bank at the reasonable discretion of the Bank and such opinion,
determination, acceptance or satisfaction of the Bank shall be conclusive and binding
on the Borrower (save as herein provided); and
	 
	 	(l)	 	words and expressions defined in the Master Agreement, unless the context
otherwise requires, when used herein, have the same meaning.

	2.	 	THE LOAN
	 
	2.1	 	Commitment to Lend. Relying upon each of the representations and warranties in Clause 6 and
in each of the other Security Documents, it is hereby agreed and undertaken by the Bank to
lend to the Borrower upon and subject to the terms of this Agreement, the sum referred to in
Clause 1.1 hereof.

13

 

	2.2	 	Drawdown Notice and Commitment to Borrow. Subject to the terms and conditions of this
Agreement, the Commitment (or -in case that the Commitment has been agreed in Clause 2.3 to
be advanced in more than one Advance — each Advance) shall be advanced to the Borrower
following receipt by the Bank from the Borrower of a Drawdown Notice not later than 10 a.m.
(London time) on the second Banking Day before the date on which the drawdown is intended
to be made. A Drawdown Notice shall be effective on actual receipt by the Bank and, once
given, shall subject as provided in Clause 3.6 be irrevocable.
	 
	2.3	 	Number of Advances Agreed. The Commitment shall be advanced to the Borrower in up to two (2)
Advances.
	 
	2.4	 	Disbursement. Upon receipt of a Drawdown Notice complying with the terms of this Agreement
the Bank shall, subject to the provisions of Clause 7, on the date specified in such Drawdown
Notice, make the Commitment (or — in case that the Commitment has been agreed in Clause 2.3
to be advanced in more than one Advance — the relevant Advance) available to the Borrower.
	 
	2.5	 	Application of proceeds. Without prejudice to the Borrower’s obligations under Clause
8.10(a), the Bank shall have no responsibility for the application of the proceeds of the
Loan (or any part thereof) by the Borrower.
	 
	2.6	 	Termination Date. Any part of the Commitment undrawn and uncancelled at the end of the
Availability Period shall thereupon be automatically cancelled.
	 
	2.7	 	Cancellation. The Borrower shall be entitled to cancel any undrawn part of the Commitment
under this Agreement upon giving the Bank not less than five (5) Banking Days’ notice in
writing to that effect, provided that no Drawdown Notice has been given to the Bank under
Clause 2.2 for the full amount of the Commitment or in respect of the portion thereof in
respect of which cancellation is required by the Borrower. Any such notice of cancellation,
once given, shall be irrevocable. Any amount cancelled may not be drawn. Notwithstanding any
such cancellation pursuant to this Clause 2.7 the Borrower shall continue to be liable for
any and all amounts due to the Bank under this Agreement including without limitation any
amounts due to the Bank under Clause 10.
	 
	3.	 	INTEREST
	 
	3.1	 	Interest Rate. The Borrower shall pay interest on the Loan (or as the case may be, each
portion thereof to which a different Interest Period relates) in respect of each Interest
Period (or part thereof) on each Interest Payment Date in arrears, provided that in the case
of an Interest Period of more than six (6) months interest accruing during such Interest
Period shall be payable quarterly in arrears and on the last day of such Interest Period. The
interest rate for the calculation of interest shall be the rate per annum determined by the
Bank to be the aggregate of (i) the Margin and (ii) LIBOR, unless there is an Agreed Rate in
which case the interest rate for the calculation of interest shall be the rate per annum
determined by the Bank to be the aggregate of (i) the Margin and (ii) the Agreed Rate.
	 
	3.2	 	Selection of Interest Period. The Borrower may by notice received by the Bank not later than
10 a.m. (London time) on the second Banking Day before the beginning of

14

 

	 	 	each Interest Period specify (subject to Clause 3.3 below) whether such Interest Period
shall have a duration of six (6) or twelve (12) months (or such other period as may be
requested by the Borrower subject to Bank’s approval and market availability).

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

	 	(a)	 	the initial Interest Period in respect of the Loan (or — in case that the
Commitment is agreed to be advanced in more than one Advance — of each Advance) will
commence on the date on which the Commitment (or — as the case may be — the relevant
Advance) is advanced and each subsequent Interest Period will commence forthwith upon
the expiry of the previous Interest Period;
	 
	 	(b)	 	in case that the Commitment is advanced by more than one Advance, the initial
Interest Period in respect of each Advance after the first Advance shall end on the
same day as the then current Interest Period for the Loan;
	 
	 	(c)	 	if any Interest Period would otherwise overrun one or more Repayment Dates,
then, in the case of the last Repayment Date, such Interest Period shall end on such
Repayment Date, and in the case of any other Repayment Date or Dates the Loan shall be
divided into parts so that there is one part equal to the amount(s) of the Repayment
Instalment(s) due on each Repayment Date falling during that Interest Period and
having an Interest Period ending on the relevant Repayment Date and another part equal
to the amount of the balance of the Loan having an Interest Period determined in
accordance with Clause 3.2 and the other provisions of this Clause 3.3;
	 
	 	(d)	 	if the Borrower fails to specify the duration of an Interest Period in
accordance with the provisions of Clause 3.2 and this Clause 3.3, such Interest Period
shall have a duration of three (3) months unless another period shall be agreed
between the Bank and the Borrower provided always that such period (whether of three
(3) months or of different duration) shall comply with this Clause 3.3; and
	 
	 	(e)	 	if the Bank determines that the duration of an Interest Period specified by
the Borrower in accordance with Clause 3.2 is not readily available, then that
Interest Period shall have such duration as the Bank, in consultation with the
Borrower, may determine,
	 
	 	 	 	provided, always, that:

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

15

 

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

	3.4	 	Default Interest. If the Borrower fails to pay any sum (including, without limitation, any
sum payable pursuant to this Clause 3.4) on its due date for payment under any of the
Security Documents, the Borrower shall pay interest on such sum from the due date up to the
date of actual payment (as well after as before judgement) at the rate determined by the Bank
pursuant to this Clause 3.4. The period beginning on such due date and ending on such date of
payment shall be divided into successive periods of such duration 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 (i) two per cent (2%), per
annum, (ii) the Margin and (iii) LIBOR. Such interest shall be due and payable on the last
day of each such period as determined by the Bank and each such day shall, for the purposes
of this Agreement, be treated as an Interest Payment Date. In case that a payment is made in
default for any amount, the Interest Periods will be determined by the Bank at its discretion
including the amounts for which there is no default, even if the Bank has not (yet) exercised
its rights pursuant to Clause 9.10 of this Agreement. If for the reasons specified in Clause
3.6, the Bank is unable to determine a rate in accordance with the foregoing provisions of
this Clause 3.4, interest on any sum not paid on its due date for payment shall be calculated
at a rate determined by the Bank to be two per cent (2%) per annum above the aggregate of the
Margin and costs of funds to the Bank as conclusively determined by the Bank save for
manifest error. Interest payable by the Borrower as aforesaid shall be compounded
semi-annually (or if the period fixed by the Bank is longer, at the end of such longer
period) and shall be payable on demand.
	 
	3.5	 	Notification of Interest. The Bank shall notify the Borrower promptly of the duration of
each Interest Period and of each rate of interest determined by it under this Clause 3
without prejudice to the right of the Bank to make determinations at its sole discretion. In
case that the Bank fails to notify the Borrower as above, such failure will not affect the
validity of the determination of the Interest Period and Interest Rate made pursuant to
Clause 3 and neither constitute nor will be interpreted as if to constitute a breach of
obligation of the Bank except in case of wilful misconduct.
	 
	3.6	 	Market disruption — Non availability. 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) (i) that adequate and fair means do not exist for
ascertaining LIBOR in respect of Dollars during said Interest Period or (ii) that deposits in
Dollars are not available to the Bank in the London Interbank Market in the ordinary course of
business in sufficient amounts for any Interest Period or (iii) that by reason of
circumstances affecting the London Interbank Market generally it is impracticable for the Bank
to advance the Commitment or fund or continue to fund an Advance or the Loan during any
Interest Period or (iv) that LIBOR for that Interest Period will not adequately reflect the
cost of funding of the Loan for that Interest Period, the Bank shall the Bank shall forthwith

16

 

	 	 	give notice (a “Determination Notice”) thereof to the Borrower. 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 Borrower by the Bank.

	 	(a)	 	During the Period of ten (10) days after any Determination Notice has been
given by the Bank under Clause 3.6(a) the Bank and the Borrower shall negotiate in
good faith (but without incurring any legal obligations) with a view to arriving to an
acceptable alternative basis (the “Substitute Basis”), for maintaining the Loan,
failing which the Borrower shall promptly, on first demand or within the time limit
which may be determined by the Bank, prepay the Loan together with accrued interest
thereon to the date of prepayment (calculated at the rate or rates most lately
applicable to the Loan) and all other sums payable by the Borrower under the Security
Documents and the Commitment shall be reduced to zero. In case the Bank agrees to a
Substitute Basis for funding the Loan the Bank shall certify such Substitute Basis to
the Borrower. The Substitute Basis may (without limitation) include alternative
interest period, alternative currencies or alternative rates of interest but shall
include a margin above the cost of funds to the Bank equivalent to the relevant
Margin. Each Substitute Basis so certified shall be binding upon the Borrower 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 Borrower that none of
the circumstances specified in clause 3.6(a) continues to exist whereupon the normal
interest rate fixing provisions of this Agreement shall apply.

	3.7	 	Swap Transactions

	 	(a)	 	If, at any time during the Security Period, the Borrower wishes to enter into
swap Transactions so as to (inter alia) hedge all or any part of their exposure under
this Agreement to interest rate fluctuations, it shall advise the Bank in writing.
	 
	 	(b)	 	Any such swap transaction shall be concluded with the Bank under the Master
Agreement provided however that no such swap transaction shall be concluded unless the
Bank first agrees to it in writing. If and when any such swap transaction has been
concluded, it shall constitute a Transaction, and the Borrower shall sign a
Confirmation with the Bank.

	4.	 	REPAYMENT — PREPAYMENT
	 
	4.1	 	Repayment.

	 	(a)	 	Repayment: The Borrower shall and it is expressly undertaken by the
Borrower to repay the Loan by (i) twenty four (24) consecutive semi-annual repayment
instalments (the “Repayment Instalments”), each of which shall be in the amount of
eight hundred fifty eight thousand five hundred eighty three Dollars ($858,583), each
to be repaid on each of the Repayment Dates so that the first be repaid on the date
falling six (6) months from the Drawdown Date of the first Advance and each of the
subsequent ones consecutively

17

 

	 	 	 	falling due for payment on each of the dates falling six (6) months after the
immediately preceding Repayment Date with the last (the 24th) of such
Repayment Instalments falling due for payment on the Final Maturity Date and (ii)
the Balloon Instalment payable together with the last Repayment Instalment on the
Final Maturity Date;
	 
	 	 	 	provided that (aa) if the Commitment is not drawn down in full, the amount
of each Repayment Instalment and the Balloon Instalment shall be reduced
proportionally (bb) if the last Repayment Date would otherwise fall after the Final
Maturity Date, such last Repayment Date shall be the Final Maturity Date, (cc)
there shall be no Repayment Dates after the Final Maturity Date, (dd) on the Final
Maturity Date the Borrower shall also pay to the Bank any and all other monies then
payable under this Agreement and the other Security Documents, and (ee) if any of
the Repayment Instalments shall become due on a day which is not a Banking Day, the
due date therefor shall be extended to the next succeeding Banking Day unless such
Banking Day falls in the next calendar month, in which event such due date shall be
the immediately preceding Banking Day.
	 
	 	(b)	 	Deferment Option: The Borrower may by giving not less than 15 days’
prior written notice thereof to the Bank, elect to defer the payment of up to one
third of three (3) Repayment Instalments specified in Clause 4.1(a), not necessarily
consecutive, expressly subject to the following terms and conditions:

	 	(i)	 	no deferment of a Repayment Instalment shall be made prior to
the repayment of the first six (6) Repayment Instalments;
	 
	 	(ii)	 	no Default or Event of Default has occurred and is continuing
both at the date of the Borrower’s said request and on the Repayment Date on
which the first deferred Repayment Instalment was due and payable;
	 
	 	(iii)	 	the Security Value is at least equal to the Security
Requirement both at the date of the Borrower’s said request and on the
Repayment Date on which the relevant deferred Repayment Instalment was due and
payable; and
	 
	 	(iv)	 	each deferred Repayment Instalment shall be added pro-rata to
the Balloon Instalments and shall be repaid on the relevant Final Maturity
Dates, provided that in no circumstances shall the period for the
repayment of the Loan be extended beyond the Final Maturity Date.

	4.2	 	Voluntary Prepayment. The Borrower shall have the right, upon giving the Bank not less than
Ten (10) Banking Days’ notice in writing, to prepay, without any penalty or fee, part or all
of the Loan in each case together with all unpaid interest accrued thereon and all other sums
of money whatsoever due and owing from the Borrower to the Bank hereunder or pursuant to the
other Security Documents and all interest accrued thereon, provided that:

	 	(a)	 	the giving of such notice by the Borrower will irrevocably commit the
Borrower to prepay such amount as stated in such notice;

18

 

	 	(b)	 	such prepayment may take place only on the last day of an Interest Period
relating to the whole of the Loan provided, however, that if the Borrower shall
request consent to make such prepayment on another day and the Bank shall accede to
such request (it being in the sole discretion of the Bank to decide whether or not
to do so) the Borrower will pay in addition to the amount to be prepaid, any such
sum as may be payable to the Bank pursuant to Clause 10.1;
	 
	 	(c)	 	each partial prepayment shall be equal to the amount of $800,000 or a whole
multiple thereof or the balance of the Loan and will be applied by the Bank in or
towards first the Balloon Instalment and then the Repayment Instalments, in the
inverse order of their due dates of payment;
	 
	 	(d)	 	every notice of prepayment shall be effective only on actual receipt by the
Bank, shall be irrevocable and shall oblige the Borrower to make such prepayment on
the date specified;
	 
	 	(e)	 	no amount prepaid may be re-borrowed; and
	 
	 	(f)	 	the Borrower may not prepay the Loan or any part thereof save as expressly
provided in this Agreement.

	4.3	 	Compulsory Prepayment in case of Total Loss or sale of a Vessel

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

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

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

19

 

	 	bb)	 	in the case of a constructive total loss of a Vessel, upon the date
and at the time notice of abandonment of such Vessel is given to the
insurers of such Vessel for the time being (provided a claim for total
loss is admitted by such insurers) or, if such insurers do not forthwith
admit such a claim, or, in the event that such notice of abandonment is
not given by the Owner thereof to the insurers of such Vessel, at the
date and time on which occurred the incident which may result, in the
reasonable opinion of the Bank, in such Vessel being subsequently
determined to be a Total Loss;
	 
	 	cc)	 	a compromised or arranged total loss shall be deemed to
have occurred on the date on which a binding agreement as to such
compromised or arranged total loss has been entered into by the insurers of
a Vessel;
	 
	 	dd)	 	requisition for title or other compulsory acquisition of a
Vessel shall be deemed to have occurred on the date upon which the relevant
requisition for title or other compulsory acquisition occurs; and
	 
	 	ee)	 	hijacking, theft, condemnation, capture, seizure, detention,
arrest, or confiscation of a Vessel by any government or by any person acting
or purporting to act on behalf of any government, which deprives the relevant
Owner of the use of its Vessel for more than sixty (60) days shall be deemed
to occur upon the expiry of the period of sixty (60) days after the date upon
which the relevant hijacking, theft, condemnation, capture, seizure,
detention, arrest or confiscation occurred.

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

	 	 	and for the purpose of this Clause 4.3, “Required Amount” means in relation to either Mortgaged
Vessel an amount equal to 50% of the Loan outstanding at the relevant time, provided, however,
that if the relevant Mortgaged Vessel so lost or sold is the last Mortgaged Vessel, then the
full amount of the insurance or, as the case may be, the sale proceeds shall apply against full
repayment of the Outstanding Indebtedness and additionally the Borrower shall pay to the Bank the
balance (if any) of the Outstanding Indebtedness. In addition the Borrower shall be obliged
together with the Required Amount to pay to the Bank the amount of the interest accrued on the Loan
to the date of prepayment and all other sums (other than the balance of principal of the Loan
remaining outstanding after such prepayment having been made) due and payable by the Borrower to
the Bank pursuant to the Security Documents (or

20

 

	 	 	any of them) including without limitation, any amounts payable under Clause 10 as the Bank
in its absolute discretion may determine;
	 
	 	 	provided, however, that if after the payment of the Required Amount and any
additional amounts payable to the Bank under this Clause 4.3 the provisions of Clause
8.10(a) are not complied with, the Borrower shall additionally prepay to the Bank the
amount of the shortfall or provide additional security as provided in such Clause 8.10(a).
	 
	4.4	 	Amounts payable on prepayment. Any prepayment of all or part of the Loan under this
Agreement shall be made together with (a) accrued interest on the amount to be prepaid to the
date of such prepayment, (b) any additional amount payable under Clause 5.3 and 12.3 and (c)
all other sums payable by the Borrower to the Bank under this Agreement or any of the other
Security Documents including, without limitation, any amounts payable under Clause 10.
	 
	4.5	 	Amounts payable on prepayment

	 	(a)	 	Any prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date of such
prepayment, (b) any additional amount payable under Clause 5.3 and 12.3, and (c) all
other sums payable by the Borrower to the Bank under this Agreement or any of the
other Security Documents including, without limitation, any amounts payable under
Clause 10.
	 
	 	(b)	 	In case the Borrower requests the prepayment of the full amount of the Loan
and at the relevant time there are any Transaction(s) in relation to the Loan or, as
the case may be, such Tranche outstanding under the Master Agreement, the Borrower
shall pay in addition to the above any and all amounts then outstanding under the
relevant Transactions.

	4.6	 	Master Agreement, Repayments and Prepayments

	 	(a)	 	Subject to the execution and delivery to the Bank of the Master Agreement,
the Bank and the Borrower may during the Security Period enter, into one or more
Transactions pursuant to the Master Agreement, subject to the Bank’s approval, the
terms and conditions of each of which are or will be specified in a Confirmation sent
by the Bank to the Borrower.
	 
	 	(b)	 	Notwithstanding any provision of the Master Agreement to the contrary, in the
case of a prepayment of all or part of the Loan (including, without limitation, upon a
Total Loss or sale in accordance with clause 4.3 or under clause 8.10(c)), then
subject to clause 4.6(b) the Bank shall be entitled but not obliged (and, where
relevant, may do so without the consent of the Borrower, where it would otherwise be
required whether under the Master Agreement or otherwise) to amend, supplement,
cancel, net out, terminate, liquidate, transfer or assign all or any part of the
rights, benefits and obligations created by any Transaction and/or the Master
Agreement and/or to obtain or re establish any hedge or related trading position in
any manner and with any person the Bank in its absolute discretion may determine and
both the Bank’s and the Borrower’s continuing obligations under any Transaction and/or
the Master

21

 

	 	 	 	Agreement shall, unless agreed otherwise by the Bank, be calculated so far as the Bank
considers it practicable by reference to the amended repayment schedule for the Loan
taking into account the fact that less than the full amount of the Loan remains
outstanding.

	 	(c)	 	If any amount of the Loan remains outstanding following a prepayment under this Agreement
and the Bank in its absolute discretion agrees, following a written request of the Borrower,
that the Borrower may be permitted to maintain all or part of a Transaction in an amount not
wholly matched with or linked to all or part of the Loan, the Borrower shall within ten (10)
days of being notified by the Bank of such requirement, provide the Bank with, or procure the
provision to the Bank of, such additional security as shall in the opinion of the Bank be
adequate to secure the performance of such Transaction, which additional security shall take
such form, be constituted by such documentation and be entered into between such parties, as
the Bank in its absolute discretion may approve or require, and each document comprising such
additional security shall constitute a Credit Support Document.
	 
	 	(d)	 	The Borrower shall on the first written demand of the Bank indemnify the Bank in respect of
all losses, costs and expenses (including, but not limited to, legal costs and expenses)
incurred or sustained by the Bank as a consequence of or in relation to the effecting of any
matter or transactions referred to in this clause 4.6.
	 
	 	(e)	 	Notwithstanding any provision of the Master Agreement to the contrary, if for any reason, a
Transaction has been entered into but no Advance is drawn down under this Agreement then,
subject to clause 4.6(e) the Bank shall be entitled but not obliged (and, where relevant, may
do so without the consent of the Borrower where it would otherwise be required whether under
the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate,
liquidate, transfer or assign all or any part of the rights, benefits and obligations created
by such Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or
related trading position in any manner and with any person the Bank in its absolute
discretion may determine.
	 
	 	(f)	 	If a Transaction has been entered into but no Advance is drawn down under this Agreement and
the Bank in its absolute discretion agrees, following a written request of the Borrower, that
the Borrower may be permitted to maintain all or part of a Transaction, the Borrower shall
within ten (10) days of being notified by the Bank of such requirement, provide the Bank with,
or procure the provision to the Bank of, such additional security as shall in the opinion of
the Bank be adequate to secure the performance of such Transaction, which additional security
shall take such form, be constituted by such documentation and be entered into between such
parties, as the Bank in its absolute discretion may approve or require, and each document
comprising such additional security shall constitute a Credit Support Document for the
purposes of the Master Agreement and/or otherwise.
	 
	 	(g)	 	Without prejudice to or limitation of the obligations of the Borrower under
clause 4.6(c), in the event that the Bank exercises any of its rights under

22

 

	 	 	 	clauses 4.6 (a), 4.6(b), 4.6(d) or 4.6(e) and such exercise results in all or part
of a Transaction being terminated such termination shall be treated under the
Master Agreement in the same manner as if it were a Terminated Transaction (as
defined in section 14 of the Master Agreement) effected by the Bank after an Event
of Default (as so defined in that section 14) by the Borrower and, accordingly, the
Bank shall be permitted to recover from the Borrower a payment for early
termination calculated in accordance with the provisions of section 6(e)(i) of the
Master Agreement.
	 
	 	(h)	 	No Transaction or Confirmation will be entered into without the specific
consent of the Bank.

	5.	 	PAYMENTS, TAXES AND COMPUTATION

	5.1	 	Payment — No set-off or Counterclaims

	 	(a)	 	The Borrower acknowledges 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 Borrower, such liabilities matching the liabilities
of the Borrower to the Bank and that it is reasonable for the Bank to be entitled
to receive payments from the Borrower gross on the due date in order that the
Bank is put in a position to perform its matching obligations to the relevant
third parties. Accordingly, subject to paragraph (f) of Part 5 of the Schedule to
the Master Agreement, all payments to be made by the Borrower under this
Agreement and/or any of the other Security Documents shall be made in full,
without any set-off or counterclaim whatsoever and, subject as provided in
Clause 5.3, free and clear of any deductions or withholdings or Governmental
Withholdings whatsoever, in Dollars on the due date to the account of the
Bank at such bank and in such place as the Bank may from time to time
specify for that purpose, reference: “Stealthgas Inc. — Loan
Agreement
dated 28th August, 2008”;
	 
	 	 	 	provided, however, that the Bank shall have the right to change the place
of account for payment, upon five (5) Banking Days’ prior written notice to the
Borrower.
	 
	 	(b)	 	If at any time it shall become unlawful or impracticable for the Borrower to
make payment under this Agreement to the relevant account or bank referred
to in Clause 5.1(a), the Borrower may request and the Bank may agree to
alternative arrangements for the payment of the amounts due by the Borrower
to the Bank under this Agreement or the other Security Documents.

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

23

 

	5.3	 	Gross Up.

	 	(a)	 	If at any time any law, regulation, regulatory requirement or requirement of
any governmental authority, monetary agency, central bank or the like compels the
Borrower to make payment subject to Governmental Withholdings, or any other deduction
or withholding, the Borrower shall pay to the Bank such additional amounts as may be
necessary to ensure that there will be received by the Bank a net amount equal to the
full amount which would have been received had payment not been made subject to such
Governmental Withholdings or other deduction or withholding. The Borrower shall
indemnify the Bank against any losses or costs incurred by the Bank by reason of any
failure of the Borrower to make any such deduction or withholding or by reason of any
increased payment not being made on the due date for such payment. The Borrower shall,
not later than thirty (30) days after each deduction, withholding or payment of any
Governmental Withholdings, forward to the Bank official receipts and any other
documentary receipts and any other documentary evidence reasonably required by the
Bank in respect of the payment made or to be made of any deduction or withholding or
Governmental Withholding. The obligations of the Borrower under this provision shall,
subject to applicable law, remain in force notwithstanding the repayment of the Loan
and the payment of all interest due thereon pursuant to the provisions of this
Agreement.
	 
	 	(b)	 	For the avoidance of doubt, Clause 5.3(a) does not apply in respect of sums
due from the Borrower to the Bank under or in connection with the Master Agreement as
to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of the
Master Agreement shall apply.

	5.4	 	Tax Credit. If following any such deduction or withholding as is referred to in Clause
7.6 from any payment paid by the Borrower, the Bank shall receive or be granted a
credit against a remission for any Taxes payable by it, the Bank shall, subject to the
Bank having made any increased payment in accordance with Clause 7.6 and to the
extent that the Bank do so without prejudicing the retention of the amount of such
credit or remission and without prejudice to the right of the Bank to obtain any other
relief or allowance available to it, reimburse to the Borrower the proportion of such
credit or remission as shall leave the Bank (after such reimbursement) in no worse
position as it would have been in had there been no such deduction or withholding
from the payment by the Borrower as aforesaid. Such reimbursement shall be made as
soon as reasonably practicable after the amount of such credit, relief, remission or
repayment has been received by the Bank and upon the Bank certifying that the
amount of such credit or remission has been received by it. Nothing contained in this
Agreement shall oblige the Bank to rearrange its tax affairs or to disclose any
information regarding its tax affairs and computations. Without prejudice to the
generality of the foregoing, the Borrower shall not, by virtue of this Clause 5.4 be
entitled to enquire about the Bank’s tax affairs.
	 
	5.5	 	Loan Account. All sums advanced by the Bank to the Borrower under this
Agreement and all interest accrued thereon and all other amounts due under this
Agreement and/or the Master Agreement from time to time and all repayments and/or
payments thereof shall be debited and credited respectively to a separate loan account

24

 

	 	 	maintained by the Bank in accordance with its usual practices in the name of the Borrower.
The Bank may, however, in accordance with its usual practices or for its accounting needs,
maintain more than one account, consolidate or separate them but all such accounts shall be
considered parts of one single loan account maintained under this Agreement. In case that a
ship mortgage in the form of Account Current is granted as security under this Agreement
and the Master Agreement, the account(s) referred to in this Clause shall be the Account
Current referred to in such mortgage.
	 
	5.6	 	Evidence-Certificates conclusive. The Borrower hereby expressly agrees and admits that
abstracts or photocopies or other reproductions of the books of the Bank as well as
statements of accounts or a certificate signed by an authorised officer of the Bank shall
(save for manifest error) be conclusive binding and full evidence on the Borrower as to the
existence and/or the amount of the at any time Outstanding Indebtedness, of any amount due
under this Agreement and/or the Master Agreement, of the applicable interest rate or Default
Rate or any other rate provided for or referred to in this Agreement, the Interest Period,
the value of additional securities under Clause 8.10, the payment or non payment of any
amount. Any certificate or determination of the Bank as to any rate of interest or any other
amount pursuant to and for the purposes of any of the Security Documents shall, in the
absence of manifest error, be conclusive and binding on the Borrower and the other Security
Parties. Nevertheless, enforcement procedures or any other Court or out of Court procedure
can be commenced by the Bank on the basis of the abovementioned means of evidence including
written statements or certificates of the Bank.
	 
	5.7	 	Computation. All interest and other payments payable by reference to a rate per annum under
this Agreement shall accrue from day to day and be calculated on the basis of actual days
elapsed and a 360 day year.
	 
	6.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	This Agreement is entered into by the Bank in reliance upon the following representations
and warranties made by the Borrower and it is hereby represented and warranted by the
Borrower that the following matters are true at the date of this Agreement, and covenant
that they shall remain true so long as there is any Outstanding Indebtedness:
	 
	6.1	 	Continuing representations and warranties
	 
	 	 	The Borrower represents and warrants to the Bank that:

	 	(a)	 	Due Incorporation/Valid Existence
	 
	 	 	 	each of the Security Parties is duly incorporated and validly existing and in good
standing under the laws of their respective countries of incorporation and have
power to own their respective property and assets, to carry on their respective
business as the same are now being lawfully conducted and to purchase, own, finance
and operate vessels, or, as the case may be, manage vessels, as well as to
undertake the obligations which such Security Party has undertaken or shall
undertake pursuant to the Security Documents;

25

 

	 	(b)	 	Due Corporate Authority
	 
	 	 	 	each of the Security Parties has power to execute, deliver and perform its obligations
under the Security Documents to which it is or is to be a party and to borrow the
Commitment and each of the other Security Parties has power to execute and deliver and
perform its obligations under the Security Documents to which it is or is to be a party;
all necessary corporate, shareholder and other action has been taken to authorise the
execution, delivery and performance of the same and no limitation on the powers of the
Borrower to borrow will be exceeded as a result of borrowing the Loan and none of the
corporate Security Parties has an established or de-facto place of business in any part of
the United Kingdom or the United States of America;
	 
	 	(c)	 	Litigation
	 
	 	 	 	no litigation, arbitration, tax claim or administrative proceeding is current or pending
or (to its or its officers’ knowledge) threatened against the Borrower or any other
Security Party, which, if adversely determined, would have a materially adverse effect on
the business assets or the financial condition of any of them;
	 
	 	(d)	 	No conflict with other obligations
	 
	 	 	 	the execution and delivery of, the performance of its obligations under, and compliance
with the provisions of, the Security Documents by the relevant Security Parties will not
(i) contravene any existing applicable law, statute, rule or regulation or any judgment,
decree or permit to which the Borrower or any other Security Party is subject, (ii)
conflict with, or result in any breach of any of the terms of, or constitute a default
under, any agreement or other instrument to which the Borrower or any other Security
Party is a party or is subject to or by which it or any of its property is bound, (iii)
contravene or conflict with any provision of the memorandum and articles of
association/articles of incorporation/by-laws/statutes or other constitutional documents
of the Borrower or any other Security Party or (iv) result in the creation or imposition
of or oblige the Borrower 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 Borrower or any other Security Party;
	 
	 	(e)	 	Financial Condition
	 
	 	 	 	the financial condition of the Borrower and of the other Security Parties has not
suffered any material deterioration since that condition was last disclosed to the Bank;
	 
	 	(f)	 	No Immunity
	 
	 	 	 	neither the Borrower nor any other Security Party nor any of their respective assets are
entitled to immunity on the grounds of sovereignty or otherwise from any legal action or
proceeding (which shall include, without limitation,
suit, attachment prior to judgement, execution or other enforcement);

26

 

	 	(g)	 	Shipping Company
	 
	 	 	 	each of the Borrower and the Manager is a shipping company involved in the owning or, as
the case may be, managing of ships engaged in international voyages and earning profits in
free foreign currency;
	 
	 	(h)	 	Licences/Authorisation
	 
	 	 	 	every consent, authorisation, license or approval of, or registration with or declaration
to, governmental or public bodies or authorities or courts required by any Security Party
to authorise, or required by any Security Party in connection with, the execution,
delivery, validity, enforceability or admissibility in evidence of each of the Security
Documents or the performance by each Security Party of its obligations under the Security
Documents has been obtained or made and is in full force and effect and there has been no
default in the observance of any of the conditions or restrictions (if any) imposed in, or
in connection with, any of the same so far as the Borrower are aware;
	 
	 	(i)	 	Perfected Securities
	 
	 	 	 	when duly executed, the Security Documents will create a perfected Encumbrance in favour
of the Bank, with the intended priority, over the assets and revenues intended to be
covered, valid and enforceable against each of the Borrower and the other Security
Parties;
	 
	 	(j)	 	No Notarisation/Filing/Recording
	 
	 	 	 	save for the registration of any mortgage in the appropriate shipping registry, it is not
necessary to ensure the legality, validity, enforceability or admissibility in evidence
of this Agreement or any of the other Security Documents that it or they or any other
instrument be notarised, filed, recorded, registered or enrolled in any court, public
office or elsewhere or that any stamp, registration or similar tax or charge be paid on
or in relation to this Agreement or the other Security Documents;
	 
	 	(k)	 	Validity and Binding effect
	 
	 	 	 	the Security Documents constitute (or upon their execution — and in the case of any
mortgage upon its registration at the appropriate registry — will constitute) valid and
legally binding obligations of the relevant Security Parties enforceable against each of
the Borrower and the other Security Parties in accordance with their respective terms and
that there are no other agreements or arrangements which may adversely affect or conflict
with the Security Documents or the security thereby created; and
	 
	 	(1)	 	Valid Choice of Law
	 
	 	 	 	the choice of law agreed to govern this Agreement and/or any other Security Document and
the submission to the jurisdiction of the courts agreed in each of the Security Documents
are or will be, on execution of the respective

27

 

	 	 	 	Security Documents, valid and binding on each of the Borrower and any other
Security Party which is or is to be a party thereto.

	6.2	 	Initial representations and warranties
	 
	 	 	The Borrower further represents and warrants to the Bank that;

	 	(a)	 	Direct obligations — Pari Passu
	 
	 	 	 	the obligations of the Borrower under this Agreement are direct, general and
unconditional obligations of the Borrower and rank at least pari passu with all
other present and future unsecured and unsubordinated Indebtedness of the Borrower
with the exception of any obligations which are mandatorily preferred by law;
	 
	 	(b)	 	Information
	 
	 	 	 	all information, accounts, statements of financial position, exhibits and reports
furnished by or on behalf of any Security Party to the Bank in connection with the
negotiation and preparation of this Agreement and each of the other Security
Documents are true and accurate in all material respects and not misleading, do
not omit material facts and all reasonable enquiries have been made to verify the
facts and statements contained therein; there are no other facts the omission of
which would make any fact or statement therein misleading and, in the case of
accounts and statements of financial position, they have been prepared in
accordance with generally accepted accounting principles which have been
consistently applied;
	 
	 	(c)	 	No Event of Default
	 
	 	 	 	no Event of Default has occurred and is continuing;
	 
	 	(d)	 	No Taxes
	 
	 	 	 	no Taxes are imposed by deduction, withholding or otherwise on any payment to be
made by any Security Party under this Agreement and/or any other of the Security
Documents or are imposed on or by virtue of the execution or delivery of this
Agreement and/or any other of the Security Documents or any document or instrument
to be executed or delivered hereunder or thereunder. In case that any Tax exists
now or will be imposed in the future, it will be borne by the Borrower;
	 
	 	(e)	 	No default under other Indebtedness
	 
	 	 	 	neither the Borrower nor any other Security Party is in default under any agreement
relating to Indebtedness to which it is a party or by which it may be bound;
	 
	 	(f)	 	Ownership/Flag/Seaworthiness/Class/Insurance of the
Vessels
	 
	 	 	 	each Vessel on the relevant Drawdown Date will be:

28

 

	 	(i)	 	in the absolute and free from Encumbrances (other than in favour of the Bank)
ownership of the Owner thereof;
	 
	 	(ii)	 	registered in the name of the Owner thereof through the Registry of the
under the laws of the respective Flag State;
	 
	 	(iii)	 	operationally seaworthy and in every way fit for service;
	 
	 	(iv)	 	classed with a Classification Society member of IACS, which has been
approved by the Bank in writing and such classification is and will be free of all
overdue requirements and recommendations of such Classification Society;
	 
	 	(v)	 	insured in accordance with the provisions of this Agreement and the relevant
Mortgage; and
	 
	 	(vi)	 	managed by the Manager;

	 	(g)	 	No Charter
	 
	 	 	 	save for the relevant Shell Charterparty and unless otherwise permitted in writing by the
Bank, neither of the Vessels will on or before the relevant Drawdown Date be subject to
any charter or contract nor to any agreement to enter into any charter or contract which,
if entered into after the such Drawdown Date would have required the consent of the Bank
under any of the Security Documents and there will not on or before such Drawdown Date be
any agreement or arrangement whereby the Earnings of the relevant Vessel may be shared
with any other person;
	 
	 	(h)	 	No Encumbrances
	 
	 	 	 	neither the Vessels (or either of them) nor their/her Earnings, Requisition Compensation
or Insurances nor any other properties or rights which are, or are to be, the subject of
any of the Security Documents nor any part thereof will, on the relevant Drawdown Date, be
subject to any Encumbrances other than Permitted Encumbrances.
	 
	 	(i)	 	Compliance with Environmental Laws and Approvals: except as may already have been
disclosed by the Borrower in writing to, and acknowledged in writing by, the Bank:

	 	(i)	 	each of the Borrower, the Owners and their Related Companies have complied
with the provisions of all Environmental Laws;
	 
	 	(ii)	 	each of the Borrower, the Owners and their Related Companies have obtained
all Environmental Approvals and are in compliance with all such Environmental
Approvals; and
	 
	 	(iii)	 	neither any of the Borrower and the Owners nor any of their Related
Companies have received notice of any Environmental Claim that any of the Borrower
and the Owners or any of its respective Related

29

 

	 	 	 	Companies are not in compliance with any Environmental Law or any Environmental
Approval;

	 	(j)	 	No Environmental Claims

	 	(i)	 	except as may already have been disclosed by the Borrower in writing
to, and acknowledged in writing by, the Bank:

	 	aa)	 	there is no Environmental Claim pending or, to the best of
the Borrower’ knowledge and belief, threatened against the Borrower or the
Owners (or either of them) or the Vessels (or either of them) or any other
Relevant Ship reasonably expected to have a material adverse effect on the
business assets, operations, property or financial condition of any of the
Borrower or the Owners or any other Security Party or on the security
created by any of the Security Documents; and
	 
	 	bb)	 	there has been no emission, spill, release or discharge of
a Material of Environmental Concern from the Vessels (or either of them) or
any other Relevant Ship owned by the Borrower or the Owners nor to the best
of the Borrower’ knowledge and belief from any Relevant Ship which could
give rise to an Environmental Claim;

	 	(k)	 	Copies true and complete
	 
	 	 	 	the copies of the Shell Charterparties and the Management Agreements delivered or to be
delivered to the Bank pursuant to Clause 7.3 are, or will when delivered be, true and
complete copies of such documents; such documents will when delivered constitute valid
and binding obligations of the parties thereto enforceable in accordance with their
respective terms and there will have been no amendments or variations thereof or defaults
thereunder;
	 
	 	(l)	 	Compliance with the ISM Code
	 
	 	 	 	each Vessel and any Operator complies or will on the drawdown of the Commitment or (as
the case may be) of the relevant Advance comply with the requirements of the ISM Code;
	 
	 	(m)	 	Compliance with ISPS Code
	 
	 	 	 	each Owner has a valid and current ISSC in respect of its Vessel and each Vessel will be
in full compliance with the ISPS Code;
	 
	 	(n)	 	Money laundering — acting for own account
	 
	 	 	 	the Borrower confirms that it is the beneficiary for each part of the Loan made or to be
made available to it and it will promptly inform the Bank by written notice if it is not,
or ceases to be, the beneficiary and notify the Bank in writing of the name and the
address of the new beneficiaiy/beneficiaries; the Borrower is aware that under applicable
money laundering provisions, it has an

30

 

	 	 	 	obligation to state for whose account the Loan is obtained; the Borrower confirms
that, by entering into this Agreement and the other Security Documents, it is
acting on its own behalf and for its own account and it is obtaining the Loan for
its own account. In relation to the borrowing by the Borrower of the Loan, the
performance and discharge of its obligations and liabilities under this Agreement
or any of the Security Documents and the transactions and other arrangements
effected or contemplated by this Agreement or any of the Documents to which the
Borrower is a party, it is acting for its own account and that the foregoing will
not involve or lead to a contravention of any law, official requirement or other
regulatory measure or procedure which has been implemented to combat “money
laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council
of the European Community).

	6.3	 	Representations Correct
	 
	 	 	At the time of entering into this Agreement all above representations and warranties or any
other information given by the Borrower to the Bank are true and accurate.
	 
	6.4	 	Repetition of Representations and Warranties
	 
	 	 	The representations and warranties in this Clause 6 shall be deemed to be repeated by the
Borrower on and as of each day from the date of this Agreement until all moneys due or
owing by the Security Parties or any of them under this Agreement and the Security
Documents have been repaid in full as if made with reference to the facts and
circumstances existing on each such day.
	 
	7.	 	CONDITIONS PRECEDENT
	 
	7.1	 	Conditions concerning corporate authorisations. The obligation of the Bank to make the
Commitment or any part thereof available to the Borrower and/or to allow any Transaction to
be effected under the Master Agreement shall be subject to the condition that the Bank, shall
have received, not later than two (2) Banking Days before the day on which the Drawdown
Notice in respect of the Commitment (or, in case that more than one advance have been agreed
in Clause 2.3, in respect of the first Advance) is given, the following documents and
evidence in form and substance satisfactory to the Bank:

	 	(a)	 	a duly certified true copy of the Articles of Incorporation and By-Laws or
the Memorandum and Articles of Association, or of any other constitutional documents,
as the case may be, of each corporate Security Party together, where appropriate,
with certified translations of the same in English;
	 
	 	(b)	 	a recent certificate of incumbency of each corporate Security Party issued by
the appropriate authority and/or at the discretion of the Bank signed by the secretary
or a director of each of them respectively, stating the corporate body which binds
every one of them, the officers and/or the directors of each of them and containing
specimens of their signatures;
	 
	 	(c)	 	minutes of separate meetings of the directors and shareholders (or of any
other body which binds them, if any) of any corporate Security Party at which there

31

 

	 	 	 	was approved the entry into, execution, delivery and performance of this Agreement,
the other Security Documents and any other documents executed or to be executed
pursuant hereto or thereto to which the relevant corporate Security Party is a
party;

	 	(d)	 	the original of any power(s) and any further evidence of the due authority of
any person signing this Agreement, the Security Documents and any other documents
executed or to be executed pursuant hereto or thereto on behalf of any corporate
person;
	 
	 	(e)	 	evidence that all necessary licences, consents, permits and authorisations
(including exchange control ones) have been obtained by any Security Party for the
execution, delivery, validity, enforceability, admissibility in evidence and the due
performance of the respective obligations under or pursuant to this Agreement and the
other Security Documents;
	 
	 	(f)	 	in the event that the Bank agrees (at its sole discretion) that a Security
Party may have a corporate shareholder, the conditions set out in sub-clauses (a),
(b), (c) and (d) of this Clause 7.1 shall apply (mutatis mutandis) to such corporate
shareholder; and
	 
	 	(g)	 	any other documents or recent certificates or other evidence which would be
required by the Bank in relation to any corporate Security Party evidencing that the
relevant Security Party has been properly established, continues to exist validly and
to be in good standing, which is its present board of directors and shareholders, that
the execution and performance of the Security Documents has been duly authorised and
generally that the representations in Clause 6 are correct in all respects.

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

	 	(a)	 	each of the Security Documents duly executed and where appropriate duly
registered with the appropriate registry; and
	 
	 	(b)	 	evidence that the Earnings Accounts and the Retention Account have been duly
opened and all mandate forms, signature cards and authorities have been duly
delivered; and

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

32

 

	 	 	delivered to the Bank before the relevant Drawdown Notice and which will be delivered to the Bank
simultaneously with the relevant drawdown):

	 	(a)	 	evidence that each Vessel on the relevant Drawdown Date will be:

	 	(i)	 	in the absolute and free from Encumbrances (other than in favour of the
Bank) ownership of the Owner thereof who is and on will and after the relevant
Drawdown Date be the sole legal and beneficial owner of such Vessel;
	 
	 	(ii)	 	registered in the name of the Borrower through the Registry under the laws
and flag of the relevant Flag State;
	 
	 	(iii)	 	operationally seaworthy and in every way fit for service;
	 
	 	(iv)	 	classed with a classification society which is a member of the IACS and
which has been approved by the Bank in writing and such class will be free of all
requirements and recommendations of such classification society;
	 
	 	(v)	 	insured in accordance with the provisions of this Agreement;
	 
	 	(vi)	 	managed by the Manager; and
	 
	 	(vii)	 	in full compliance with the ISM Code and the ISPS Code;

	 	(b)	 	evidence that, on or prior to the relevant Drawdown Date a Mortgagee’s Interest Insurance
(herein, “MII”) and a Mortgagee’s Interest Additional Perils (Pollution) Insurance (herein,
“MAPI”), each under the Bank’s wording or upon such terms as shall from time to time be
determined by the Bank but for an amount not exceeding, in each case, 110% of the amount of
the Loan) to be followed by full copies of cover notes, policies, certificates of entry or
other contracts of insurance together with an opinion from insurance consultants appointed by
the Bank, on the Insurances effected or to be effected in respect of each of the Vessels upon
and following the relevant Drawdown Date;
	 
	 	(c)	 	copies of the DOC and SMC referred to in paragraph (a) in the definition of the ISM Code
Documentation certified as true and in effect by the Borrower and the Manager; and
	 
	 	(d)	 	copies of such ISM Code Documentation as the Bank may by written notice to the Borrower have
requested not later than two (2) days before the relevant Drawdown Date certified as true and
complete in all material respects by the Borrower and the Manager;
	 
	 	(e)	 	copy of the ISSC in relation to each Vessel;
	 
	 	(f)	 	true and complete copy of each Charterparty;
	 
	 	(g)	 	if the Bank so requires a report signed by an independent firm of marine insurance brokers
appointed by the Bank at the expense of the Borrower confirming the adequacy of the Insurances
maintained on each Vessel;

33

 

	 	(h)	 	if the Bank so requires, a satisfactory to the Bank physical condition survey
report on each Vessel together with a comprehensive record inspection from a
surveyor appointed by the Bank, at the Borrower’s expense; and
	 
	 	(i)	 	valuation of each Vessel, at the Borrower’s expense, as at a date determined
by the Bank but in any event before the relevant drawdown, prepared on the basis
specified in Clause 8.10(b) by major shipbrokers appointed and/or approved by the Bank
in form and substance satisfactory to the Bank in its sole discretion.

	7.4	 	No change of circumstances. The obligation of the Bank to advance the
Commitment or (if so provided in Clause 2.3) any part thereof to the Borrower and/or
to allow any Transaction to be effected under the Master Agreement is subject to the
further condition that at the time of the giving of a Drawdown Notice and on
advancing the Commitment or (if it has been so agreed in Clause 2.3) on the making
of the Advance to which such Drawdown Notice relates:

	 	(a)	 	the representations and warranties set out in Clause 6 and in each of the
Security Documents are true and correct on and as of each such time as if each was
made with respect to the facts and circumstances existing at such time;
	 
	 	(b)	 	no Event of Default shall have occurred and be continuing or would result
from the relevant drawdown;
	 
	 	(c)	 	the Bank shall be satisfied that there has been no change in the ultimate
ownership, management and/or adverse change financial condition of any Security Party
which (change) might, in the sole opinion of the Bank, be detrimental to the
interests of the Bank; and

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

	 	(a)	 	opinions from the Security Parties’ legal counsel and from lawyers appointed
by the Bank as to all the matters referred to in Clauses 6.1(a) and (b) and all such
aspects of law as the Bank shall deem relevant to this Agreement and the other
Security Documents and any other documents executed pursuant hereto or thereto and
confirms that all the Security Parties are aware of the entire contents of this
Agreement and the other Security Documents as well as opinion from the lawyers
appointed by the Bank and any further legal or other expert opinion as the Bank at
its sole discretion may reasonably require;
	 
	 	(b)	 	confirmation from any agents nominated in this Agreement and elsewhere in the
other Security Documents for the acceptance of any notice or service of process, that
they consent to such nomination;
	 
	 	(c)	 	a receipt in writing in form and substance satisfactory to the Bank
including an acknowledgement and admission of the Borrower and/or any other Security
Party to the effect that the Commitment or relevant part thereof (as the case

34

 

	 	 	 	may be) was drawn by the Borrower and a declaration by the Borrower that all
conditions precedent have been fulfilled, that there is no Event of Default and
that all the representations and warranties are true and correct; and

	 	(d)	 	evidence that the arrangement fee and the commitment fee referred to in Clause
10.8 have been paid in full to the Bank;

	7.6	 	Further documents. The Bank may from time to time request and the Borrower shall, within the
period specified by the Bank, deliver to the Bank such further documents certificates and/or
opinions as reasonably requested at the sole discretion of the Bank.
	 
	8.	 	COVENANTS
	 
	 	 	It is hereby undertaken by the Borrower that, from the date of this Agreement and as long
as any money is due and/or owing and/or outstanding under this Agreement or any of the
other Security Documents, each of the Borrower and the Owners will:
	 
	8.1	 	Information Covenants

	 	(a)	 	Annual financial Statements: furnish the Bank, in form and substance
satisfactory to the Bank, with annual audited consolidated financial statements of
the Borrower and the Group (including the Owners) at latest within 180 days after the
end of the financial year concerned, commencing as at the 31st December,
2007 prepared in accordance with IAS;
	 
	 	(b)	 	Financial Information: provide the Bank annually and from time to
time as the Bank may reasonably request and in form and substance satisfactory to the
Bank with information on all major financial developments of the Borrower and the
Group, such as sales or purchases of vessels, new loans, refinancing/restructuring of
existing loans, as well as the financial conditions, cash flow position, commitments
and operations of the Borrower and its Related Companies including cash flow analysis
and voyage accounts of any vessels owned by any such party with a breakdown of income
and running expenses showing net trading profit, trade payables and trade
receivables, such financial details to be certified by one of the financial officer
of the relevant company as to their correctness;
	 
	 	(c)	 	Information on adverse change or Default: promptly inform the Bank
of any occurrence which came to the knowledge of the Borrower which might adversely
affect the ability of any of the Borrower or any other Security Party to perform its
respective obligations under this Agreement and/or any of the other Security
Documents and of any Default forthwith upon becoming aware thereof;
	 
	 	(d)	 	Information on the employment of the Vessels: provide the Bank from
time to time as the Bank may request with information on the employment of each Vessel
and of any Relevant Ship as well as on the terms and conditions of any charterparty,
contract of affreightment, agreement or related document in respect of the employment
of each Vessel and of any Relevant Ship, such information to be certified by one of
the directors of the Borrower as to their correctness;

35

 

	8.2	 	Banking operations — Minimum Liquidity

	 	(a)	 	ensure that, all banking operations in connection with each Vessel are carried
out through the Lending Office; and
	 
	 	(b)	 	ensure that throughout the Security Period the Borrower and the Owners or any
of them, will maintain in unencumbered (except in favour of the Bank) deposit
account(s) maintained with the Bank (including the Retention Account) an average
monthly balance of Dollars eight hundred thousand ($800,000);

	8.3	 	No Further Financial Exposure
	 
	 	 	without the prior written consent of the Bank:

	 	(a)	 	No further Indebtedness: ensure that neither of the Owners will
incur any further Indebtedness nor authorise or accept any capital commitments (other
than that normally associated with the day to day operations of its Vessel) nor enter
into any agreement for payment on deferred terms or hire agreement without the prior
written consent of the Bank;
	 
	 	(b)	 	No Loans: not make any loans or advances to, or any investments in
any person, firm, corporation, joint venture or other entity including (without
limitation) any loan or advance to any officer, director, stockholder or employee
directly or through the Manager;
	 
	 	(c)	 	No Dividends — No disposal of Assets: not declare or pay any
dividends or other distribution upon any of the issued shares or otherwise dispose of
any assets to any of the shareholders of the Borrower, without the prior written
consent of the Bank, provided, however, that unless an Event of Default has
occurred the Borrower shall be entitled to declare or pay any dividends upon any of
the issued shares for an amount of up to 50% of its Excess Cash Flow;
	 
	 	(d)	 	and for the purpose of this Clause 8.3(c):

	 	(i)	 	“Debt Service” means an amount (as conclusively certified by the
Bank) which is equal to the aggregate payments of principal and interest
which the Borrower will be obliged to pay to the Bank pursuant to this
Agreement and the other Security Documents during the relevant Excess Cash
Flow Calculation Period (including sums standing to the credit of the
Retention Account);
	 
	 	(ii)	 	“Excess Cash Flow Calculation Period” means each successive
annual period during the Security Period, the first commencing with the
financial year terminating on 31st December, 2007 up to the date
when the Outstanding Indebtedness has been repaid in full to the Bank;
	 
	 	(iii)	 	“Excess Cash Flow” means, in relation to any Excess Cash
Flow Calculation Period, the amount (as conclusively calculated by the Bank)
which is equal to the Total Income minus (a) the amount of Debt

36

 

	 	 	 	Service payable pursuant to Clause 4.1 and 3, and (b) the Operating
Expenses paid during such Excess Cash Flow Calculation Period;

	 	(iv)	 	“Total Income” in relation to a Excess Cash Flow Calculation
Period means the total income of the Vessels for such Excess Cash Flow
Calculation Period less brokerage fees and commissions and withholding taxes
(if any);

	 	(e)	 	No Payments: except pursuant to this Agreement and the Security
Documents (or as expressly permitted by the same) not pay out any funds to any company
or person except in connection with the administration of the Borrower, the Owners,
the operation and/or repair of the Vessels; and
	 
	 	(f)	 	Master Agreement Derivatives: not enter into any transaction in a
derivative other than under the Master Agreement;

	8.4	 	Maintenance of Business Structure

	 	(a)	 	Maintenance of Business Structure: not change the nature, organisation
and conduct of the business of the Borrower or either Owner, as owner of its Vessel or
the Manager as manager of vessels, as the case may be, or carry on any business other
than the business carried on at the date of this Agreement;
	 
	 	(b)	 	Maintenance of Legal Structure: ensure that none of the documents
defining the constitution of the Borrower and/or any corporate shareholder shall be
altered in any manner whatsoever without the prior written consent of the Bank;
	 
	 	(c)	 	Control: ensure that no change shall be made directly or indirectly in
the ownership, legal and beneficial ownership control or management of the Borrower or
the Owners or any share therein or of the Vessels without the prior written consent of
the Bank (such consent not to be unreasonably withheld); and
	 
	 	(d)	 	No merger: not merge or consolidate with any other company or person;
	 
	 	(e)	 	Pari passu: ensure that its obligations under this Agreement shall,
without prejudice to the provisions of this Clause 8.4 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;

	8.5	 	Maintenance of Assets

	 	(a)	 	No Transfer of Assets: not convey, assign, transfer, sell or
otherwise dispose of or deal with any of their real or personal property, assets or
rights, whether present or future, without the prior written consent of the Bank, such
consent not to be unreasonably withheld; and
	 
	 	(b)	 	No Encumbrance of Assets: not allow any part of its undertaking,
property, assets or rights, whether present or future, to be mortgaged, charged,
pledged,

37

 

	 	 	 	used as a lien or otherwise encumbered without the prior written consent of the
Bank, such consent not to be unreasonably withheld.

	8.6	 	Covenants Concerning the Vessels

	 	(a)	 	Ownership/Management/Control: ensure that each Vessel will be
registered on the relevant Drawdown Date under the laws of the relevant Flag State and
thereafter maintain her present ownership, management, control and beneficial
ownership;
	 
	 	(c)	 	Class: ensure that each Vessel will remain in class free of any and
all recommendations, overdue notations or average damage affecting class and provide
the Bank on demand with copies of all class and trading certificates of each Vessel;
	 
	 	(d)	 	Insurances: ensure that all Insurances of each Vessel are maintained
and comply with all insurance requirements specified in this Agreement and in the
relevant Mortgage and in case of failure to maintain each Vessel so insured authorise
the Bank (and such authorisation is hereby expressly given to the Bank) to have the
right but not the obligation to effect such Insurances on behalf of its Owner (and in
case that either Vessel remains in port for an extended period to effect port risks
insurances at the cost of the Borrower which, if paid by the Bank, shall be
Expenses);
	 
	 	(e)	 	Transfer/Encumbrances: not without the prior written consent of the
Bank sell or otherwise dispose of either Vessel or any share therein or create or
agree to create or permit to subsist any Encumbrance over either Vessel (or any share
or interest therein) other than Permitted Encumbrances;
	 
	 	(f)	 	Not imperil Flag. Ownership, Insurances: ensure that each Vessel is
maintained and trades in conformity with the laws of the relevant Flag State, of its
owning company or of the nationality of the officers of such Vessel, the requirements
of the Insurances and nothing is done or permitted to be done which could endanger
the flag of either Vessel or its unencumbered (other than Permitted Encumbrances)
ownership or its Insurances;
	 
	 	(g)	 	Mortgage Covenants: always comply with all the covenants provided
for in the relevant Mortgage;
	 
	 	(h)	 	Charter: save for the relevant Shell Charterparty, neither Owner
enters into a charterparty, contract of affreightment, agreement or related document
in respect of the employment of its Vessel (i) on demise charterparty or (ii) without
the prior written consent of the Bank, for a period for more than twelve (12) months
or below the market rate prevailing at the time when the relevant Vessel is fixed in
or on terms which are not in accordance with the commercial practice prevailing at
the relevant time;
	 
	 	(i)	 	Assignment of Earnings: not assign or agree to assign otherwise than
to the Bank the Earnings or any part thereof; and

38

 

	 	(j)	 	Compliance with Environmental Laws: comply with, and procure
that all Environmental Affiliates of any Relevant Party comply with, all
Environmental Laws including without limitation, requirements relating to manning
and establishment of financial responsibility and to obtain and comply with, and
procure that all Environmental Affiliates of such Relevant Party obtain and comply
with, all Environmental Approvals and to notify the Bank forthwith:

	 	(i)	 	of any Environmental Claim for an amount or amounts in
aggregate exceeding $1,000,000 made against either Vessel and or any Relevant
Ship and/or her respective owner; and
	 
	 	(ii)	 	upon becoming aware of any incident which may give rise to an
Environmental Claim and to keep the Bank advised in writing of the Borrower’s
response to such Environmental Claim on such regular basis and in such detail
as the Bank shall require; and

	 	(k)	 	Ownership: ensure that each Vessel will maintain her present
ownership, management, control and beneficial ownership;

	8.7	 	Compliance with the ISM Code and ISPS Code

	 	 	 	procure that the Manager and any Operator:
	 
	 	(a)	 	will comply with and ensure that each Vessel and any Operator complies with
the requirements of the ISM Code, including (but not limited to) the maintenance and
renewal of valid certificates pursuant thereto throughout the Security Period;
	 
	 	(b)	 	immediately inform the Bank if there is any threatened or actual withdrawal of
the either Owner’s, the Manager’s or an Operator’s DOC or the SMC in respect of the
Vessels (or any of them); and
	 
	 	(c)	 	promptly inform the Bank upon the issue to either Owner, the Manager or any
Operator of a DOC and to any of the Vessels of an SMC or the receipt by the Owners (or
either of them), the Manager or any Operator of notification that its application for
the same has been realised; and
	 
	 	(d)	 	(aa) will maintain at all times a valid and current ISSC in respect of each
Vessel, (bb) immediately notify the Bank in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of either
Vessel and (cc) procure that each Vessel will comply at all times with the ISPS Code.

	8.8	 	Observance of Covenants

	 	(a)	 	Use of the Loan: use the Loan exclusively for the purpose specified
in this Agreement;
	 
	 	(b)	 	Compliance with Covenants: duly and punctually perform all
obligations under this Agreement and the other Security Documents;

39

 

	 	(c)	 	Payment on Demand: pay to the Bank on demand any sum of money which is
payable by the Borrower to the Bank under this Agreement but in respect of which it
is not specified in any other Clause when it is due and payable; and
	 
	 	(d)	 	Evidence of Compliance: upon request by the Bank from time to time
provide such information and evidence to the Bank as the Bank would reasonably require
to demonstrate compliance with the covenants and undertakings set forth in this
Agreement and any other Security Document.

	8.9	 	Validity of Securities

	 	(a)	 	Validity: ensure and procure that all governmental or other consents
required by law and/or any other steps required for the validity, enforceability and
legality of this Agreement and the other Security Documents are maintained in full
force and effect and/or appropriately taken;
	 
	 	(b)	 	Earnings: ensure and procure that, unless and until directed by the
Bank otherwise (i) all the Earnings of each Vessel shall be paid to the relevant
Earnings Account and (ii) the persons from whom the Earnings of such Vessel are from
time to time due are irrevocably instructed to pay them to such Earnings Account in
accordance with the provisions hereof and of the relevant Security Documents;
	 
	 	(c)	 	Taxes: pay all Taxes, assessments and other governmental charges when
the same fall due, except to the extent that the same are being contested in good
faith by appropriate proceedings and adequate reserves have been set aside for their
payment if such proceedings fail; and
	 
	 	(d)	 	Additional Documents: from time to time at the request of the Bank
execute and deliver to the Bank or procure the execution and delivery to the Bank of
all such documents as the Bank would reasonably require for giving full effect to this
Agreement, and for perfecting, protecting the value of or enforcing any rights or
securities granted to the Bank under any one or more of this Agreement, the other
Security Documents and any other documents executed pursuant hereto or thereto and in
case that any Conditions Precedent have not been fulfilled prior to the Drawdown, such
Conditions shall be complied with within five (5) days of Drawdown (unless the Bank
agrees otherwise in writing) and failure to comply with this Covenant shall be an
Event of Default.

	8.10	 	Vessels’ Value to Debt Ratio-Additional Security

	 	(a)	 	Vessels’ Value to Debt Ratio: The Borrower hereby undertakes that,
from the date of this Agreement and as long as any money is due and/or owing and/or
outstanding under this Agreement or any of the other Security Documents, the Borrower
will ensure that the aggregate of (i) the Security Value shall be at least equal to of
the Security Requirement at the relevant time and if at any relevant time the Security
Value is less than the Security Requirement, they will within fifteen (15) Banking
Days of being advised by the Bank of such event either:

40

 

	 	(i)	 	provide the Bank with such additional security as shall in the opinion of the
Bank be adequate to make up such deficiency and which shall take such form and
shall be constituted by such documentation and be entered into between such
parties as the Bank may reasonable approve or require (and, if the Borrower does
not make proposals satisfactory to the Bank in relation to such additional
security within the aforesaid period of fifteen (15) Banking Days of the date of
the Bank’s notification to the Borrower aforesaid, the Borrower shall be deemed to
have elected to prepay in accordance with sub-clause (ii) below), or
	 
	 	(ii)	 	prepay (in accordance with Clause 4.2 (but without regard to the requirement
for ten (10) days notice) such amount of the Loan as will ensure that the aggregate
Market Value (determined as aforesaid) of the Mortgaged Vessels and any such
additional security is after such prepayment at least equal to 125% of the aggregate
of (i) the Loan and (ii) the Swap Exposure.
	 
	 	 	 	Such additional security shall be constituted by:

	 	aa)	 	additional pledged cash deposits in favour of the Bank in
an amount equal to such shortfall with a bank and in an account and manner
to be determined by the Bank; and/or
	 
	 	bb)	 	a priority mortgage in form and substance satisfactory to
the Bank; and/or
	 
	 	cc)	 	any other security acceptable to the Bank to be provided
in a manner determined by the Bank.

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

	 	(b)	 	Valuation of the Vessels: At any time (and at least once per year) that the Bank
might consider to be (at the reasonable discretion of the Bank) necessary or useful and at the
expense of the Borrower, have each Vessel valued in Dollars, without, unless required by the
Bank, physical inspection and on the basis of sale for prompt delivery and free of
Encumbrances for cash at arm’s length on normal commercial terms as between a willing seller
and a willing buyer without taking into account the benefit of any charterparty or other
engagement concerning such Vessel (“the basis of valuation”), by one (1) of the following
shipbrokers namely: (i) H. Clarkson & Company Limited, (ii) Galbraith’s Ltd., (iii) A.E.
Gibson Shipbrokers Ltd. (iv) Barry Rogliano, and (v) Braemar Seascope Limited, or any other
shipbrokers, as may from time to time be appointed by the Bank for this purpose at the Bank’s
sole discretion. The Market Value of each Vessel determined as aforesaid shall be notified by
the Bank to the Borrower and such valuation shall constitute the value of such Vessel for the
purposes of this Agreement and shall be binding upon the parties hereto. The Bank and the
Borrower each agrees to accept such valuation made by the shipbroker appointed as aforesaid as
conclusive evidence of the Market Value of the relevant Vessel at the date of such

41

 

	 	 	 	valuation. The Borrower further agrees to supply the Bank and any shipbroker
appointed as aforesaid with such information concerning each of the Vessels and her
condition as such shipbroker may reasonably require for the purpose of making such
valuation.
	 	(c)	 	Valuation of additional security: For the purpose of this Clause 8.10,
the market value of any additional security provided or to be provided to the Bank
shall be determined by the Bank in its absolute discretion without any necessity for
the Bank assigning any reason thereto provided, always, that if the additional
security is in the form of a collateral vessel such collateral vessel shall be valued
in accordance with the provisions of Clause 8.10(b) or, as the case may be, 8.10(c) or
if the additional security is in form of a cash deposit full credit shall be given for
such cash deposit on a Dollar for Dollar basis.
	 
	 	(d)	 	Documents and evidence: In connection with any additional security
provided in accordance with this Clause 8.10, the Bank shall be entitled to receive
such evidence and documents as may in the Bank’s reasonable opinion be appropriate and
such favourable legal opinions as the Bank shall in its absolute discretion require.
	 
	 	(e)	 	Costs: All costs in connection with any valuation made pursuant to
Clauses 8.10(b) and (c) shall be borne by the Borrower. Any valuation referred to in
Clause 8.10 to be addressed to the Bank.

	8.11	 	No security or lien from other person. The Borrower has not taken or received, and the
Borrower undertakes that until all moneys, obligations and liabilities due, owing or incurred
by the Borrower under this Agreement and the Security Documents have been paid in full, it
will not take or receive, any security or lien from any other person liable or for any
liability whatsoever.
	 
	8.12	 	Additional Financial covenants

	 	(a)	 	The Borrower shall ensure that, throughout the Security Period, its
financial condition on a consolidated basis and as evidenced by the most recent
annual audited Accounting Information, shall be such that:

	 	(i)	 	Total Debt not to exceed 0.8:1 of the total Adjusted Net Worth;
	 
	 	(ii)	 	it is always maintained the consolidated interest cover
ratio (EBITDA to Net Interest Expense) greater than or equal to 2.5:1;

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

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

42

 

	 	 	 	“Accounting Period” means each consecutive period of twelve months falling
during the Security Period for which annually Accounting Information is
required to be delivered pursuant to Clause 8.1(a);
	 
	 	(ii)	 	“Adjusted Net Worth” means, in respect of an Accounting
Period, book equity adjusted for the difference between the book and market
value of assets;
	 
	 	(iii)	 	“EBITDA” on a consolidated basis of the Group means the
Earnings before interest and other taxes, depreciation and amortization;
	 
	 	(iv)	 	“Net Interest Expense” means on a consolidated basis the total
interest expense minus the total interest income; and
	 
	 	(v)	 	“Total Debt” means, in respect of an Accounting Period, the
aggregate on a consolidated basis of the Group of all short term interest
bearing bank debt included in the financial statements of the Group under
current liabilities plus the long term interest bearing bank debt, plus any
cash and/or any short term financial investments encumbered as security for
funded loan.

	8.13	 	Stock-holding. The Borrower shall ensure that throughout the Security Period at least 15% of
the shares of the Borrower shall be directly or indirectly held by members of the Vafias
family.
	 
	8.14	 	Covenants for the Security Parties. The Borrower undertakes that until all moneys,
obligations and liabilities due, owing or incurred by the Borrower under this Agreement and
the Security Documents have been paid in full, that will ensure and procure that all other
Security Parties and each of them duly and punctually comply with the covenants in Clauses
8.1 to 8.12 which are applicable to them mutatis mutandis.
	 
	9.	 	EVENTS OF DEFAULT
	 
	 	 	There shall be an Event of Default whenever an event described in Clauses 9.1 to 9.9
occurs:
	 
	9.1	 	Non Performance of Obligations

	 	(a)	 	the Borrower or any other Security Party fails to pay any sum due from the
Borrower or, as the case may be such Security Party, under this Agreement and/or any
of the other Security Documents at the time, in the currency and in the manner
stipulated herein and/or any of the other Security Documents, or, in the case of any
sum payable on demand, within three (3) Banking Days of such demand; or
	 
	 	(b)	 	the Borrower or any other Security Party fails to observe and perform any one
or more of the covenants, terms or obligations contained in this Agreement and/or any
other Security Document relating to the Insurances; or

43

 

	 	(c)	 	the Borrower or any other Security Party commits any breach of or omits to
observe any of the covenants, terms, obligations or undertakings under this
Agreement and/or any of the other Security Documents (other than failure to pay any
sum when due or to comply with any obligation concerning the Insurances) and, in
respect of any such breach or omission which in the opinion of the Bank is capable
of remedy, such action as the Bank may require shall not have been taken within ten
(10) days of the Bank notifying the Borrower and/or the relevant Security Party of
such required action to remedy the breach or omission; or

	9.2	 	Events affecting the Borrower

	 	(a)	 	the Borrower is adjudicated or found bankrupt or insolvent or any order is
made by any competent court or resolution passed by the Borrower or petition presented
for the winding-up or dissolution of the Borrower or for the appointment of a
liquidator, trustee, administrator or conservator of the whole or any part of the
undertakings, assets, rights or revenues of the Borrower; or
	 
	 	(b)	 	any Security Party becomes or is deemed to be insolvent or suspends payment of
its debts or is (or is deemed to be) unable to or admits inability to pay its debts as
they fall due or proposes or enters into any composition, compromise or other
arrangement for the benefit of its creditors generally or good faith proceedings are
commenced in relation to any Security Party under any law, regulation or procedure
relating to reconstruction or readjustment of debts; or
	 
	 	(c)	 	an encumbrancer takes possession or a receiver or similar officer is appointed
of the whole or any part of the undertakings, assets, rights or revenues of the
Borrower 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 the Borrower and is not discharged within thirty (30) days; or
	 
	 	(d)	 	all or a material part of the undertakings, assets, rights or revenues of the
Borrower are seized, nationalised, expropriated or compulsorily acquired by or under
the authority of any government; or
	 
	 	(e)	 	any event occurs or proceeding is taken with respect to the Borrower in any
jurisdiction to which it is subject which has an effect equivalent or similar to any
of the events mentioned in Clauses 9.2(a) to 9.2(d); or
	 
	 	(f)	 	the Borrower suspends or ceases or threatens to suspend or cease to carry on
its business; or
	 
	 	(g)	 	there occurs, in the reasonable opinion of the Bank, a materially adverse
change in the financial condition of the Borrower; or
	 
	 	(h)	 	any other event occurs or circumstances arise which, in the reasonable
opinion of the Bank, is likely materially and adversely to affect either (i) the
ability of the Borrower to perform all or any of its obligations under or otherwise to
comply with the terms of this Agreement and/or any of the other Security Documents, or
(ii) the security created by this Agreement and/or any of the Security Documents; or

44

 

	 	(i)	 	there is any change in the beneficial ownership of the shares in any of the
Borrower, the Corporate Guarantors and/or in the Manager; or

	9.3	 	Representations Incorrect
	 
	 	 	any representation or warranty made or deemed to be made or repeated by or in respect of
the Borrower in or pursuant to this Agreement or any of the other Security Documents or in
any notice, certificate or statement referred to in or delivered under this Agreement or
any of the other Security Documents is or proves to have been incorrect in any material
respect; or
	 
	9.4	 	Cross-default of the Borrower
	 
	 	 	any Indebtedness of the Borrower is not paid when due or becomes due and payable, or any
creditor of the Borrower becomes entitled to declare any such Indebtedness due and payable
prior to the date when it would otherwise have become due, or any guarantee or indemnity
given or any obligation or covenant undertaken or agreement made by the Borrower in
respect of Indebtedness is not honoured when due; or
	 
	9.5	 	Events affecting the Security Documents

	 	(a)	 	this Agreement or any of the other Security Documents shall at any time and
for any reason become invalid or unenforceable or otherwise cease to remain in full
force and effect, or if the validity or enforceability of any of the Security
Documents shall at any time and for any reason be contested by any party thereto
(other than the Bank), or if any such party shall deny that it has any, or any
further, liability thereunder or it becomes impossible or unlawful for the Borrower
to fulfil any of its covenants and obligations contained in this Agreement or any of
the Security Documents or for the Bank to exercise the rights vested in it thereunder
or otherwise; or
	 
	 	(b)	 	any consent, authorisation, licence or approval of, or registration with or
declaration to, governmental or public bodies or authorities or courts required by
the Borrower to authorise or otherwise in connection with, the execution, delivery,
validity, enforceability or admissibility in evidence of this Agreement and/or any of
the other Security Documents or the performance by the Borrower of its obligations
under this Agreement and/or any of the other Security Documents is modified in a
manner unacceptable to the Bank or is not granted or is revoked or terminated or
expires and is not renewed or otherwise ceases to be in full force and effect; or
	 
	 	(c)	 	any Encumbrance in respect of any of the property (or part thereof) which is
the subject of the Security Documents (or any of them) is enforced; or
	 
	 	(d)	 	any other event or events (whether related or not) occurs which constitutes a
material (in the reasonable opinion of the Bank) adverse change, from the position
applicable as at the date of this Agreement, in the business, affairs or condition
(financial or otherwise) of any Security Party or a Credit Support Provider)
(including any such material adverse change resulting from an Environmental Incident)
the effect of which is, in the reasonable opinion of the Bank, to impair, delay or
prevent the due fulfillment by any Security Party or a

45

 

	 	 	 	Credit Support Provider of any of their respective obligations or undertakings
contained in this Loan Agreement, the Master Agreement or any of the Security
Documents; or

	9.6	 	Events concerning the Security Parties

	 	(a)	 	any Security Party (other than the Borrower) fails to pay any sum due from it
under this Agreement and/or any of the Security Documents when due, or, in the case of
any sum payable on demand, within three (3) Banking Days of demand; or
	 
	 	(b)	 	any Security Party (other than the Borrower) fails to observe and perform any
one or more of the covenants, terms or obligations contained in this Agreement
(including Schedule 1) and/or the other Security Documents relating to the Insurances;
or
	 
	 	(c)	 	any Security Party (other than the Borrower) commits any breach of or omits to
observe any of the covenants, terms, obligations or undertakings expressed to be
assumed by it under this Agreement and/or any of the Security Documents (other than
failure to pay any sum when due or to observe or perform obligations relating to the
Insurances) and, in respect of any such breach or omission which in the opinion of the
Bank is capable of remedy, such action as the Bank may require shall not have been
taken within seven (7) days of the Bank notifying the relevant Security Party, of such
required action to remedy the breach or omission; or
	 
	 	(d)	 	any representation or warranty made or deemed to be made or repeated by or in
respect of any Security Party (other than the Borrower) in or pursuant to this
Agreement or any of the other Security Documents or in any notice, certificate or
statement referred to in or delivered under this Agreement or any of the other
Security Documents is or proves to have been incorrect in any material respect; or
	 
	 	(e)	 	any of the events referred to in Clauses 9.2 to 9.5 occurs (amended as
appropriate) in relation to any Security Party (other than the Borrower); or
	 
	 	(f)	 	the provisions of Clause 8.12 are not complied with within the period therein
prescribed; or

	9.7	 	Environmental Events

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

46

 

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

	9.8	 	Events Concerning the Vessels

	 	(a)	 	either Vessel becomes a Total Loss unless:

	 	(i)	 	the Bank shall have received within sixty (60) days after the
occurrence of the event giving rise to such total Loss confirmation from the
relevant underwriter that such Total Loss is an insured event and constitutes
a valid claim against such underwriters; and
	 
	 	(ii)	 	after receipt of such confirmation the Bank shall have
received within one hundred and eighty days (180) after the occurrence of
such event, the insurance proceeds in an amount equal to the amount for which
such Vessel was required to be insured in accordance with the provisions of
this Agreement immediately prior to the event giving rise to such Total Loss;
or

	 	(b)	 	either Vessel ceases to be managed by the Manager (for any reason other than
the reason of a Total Loss or sale of such Vessel) with the approval of the Bank, and
the Owner thereof fails to appoint a Manager within
two fifteen (215) days after the
termination of the relevant Management Agreement with the previous Manager; or
	 
	 	(c)	 	either Vessel is arrested, confiscated, seized, taken in execution,
impounded, forfeited, detained in exercise or purported exercise of any possessory
lien or other claim and the Owner thereof fails to procure the release of such Vessel
within a period of thirty (30) days thereafter; or
	 
	 	(d)	 	(without prejudice to the generality of sub-Clauses 9.1(b) and (c)) for any
reason whatsoever the provisions of Clause 8.7 are not complied with and/or either
Vessel ceases to comply with the ISM Code or the ISPS Code; or
	 
	 	(e)	 	the Flag State of either Vessel becomes involved in hostilities or civil war
or there is a seizure of power in such Flag State by unconstitutional means if, in
any such case, such event could in the reasonable opinion of the Bank reasonably be
expected to have a material adverse effect on the security constituted by any of the
Security Documents and alternative arrangements satisfactory to the Bank have not
been made promptly upon the Bank’s request; or
	 
	 	(f)	 	the registration of either Vessel under the laws and flag of the relevant
Flag State is cancelled or terminated without the prior written consent of the Bank
or, if either Vessel is only provisionally registered on the relevant Drawdown Date
and is not permanently registered under the laws and flag of the relevant

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	 	 	 	Flag State at least ninety (90) days prior to the deadline for completing such
permanent registration; or
	 
	 	(g)	 	either Shell Charterparty or any other Charterparty is terminated or rescinded
for any reason whatsoever or either Shell Charterparty or any other Charterparty is
frustrated and the Borrower does not produce to the Bank within one (1) month from
such event a substitute Charterparty for the employment of the relevant Vessel,
entered into between the Owner thereof and the relevant charterer; or
	 
	 	(h)	 	moneys are withdrawn from either of the Earnings Accounts otherwise than in
accordance with clause 11.7; or

	9.9	 	Events concerning the Master Agreement

	 	(a)	 	an Event of Default or Potential Event of Default (in each case as defined
in the Master Agreement) has occurred and is continuing under the Master Agreement;
or
	 
	 	(b)	 	notice of an Early Termination Date is given by the Bank under section 6(a)
of the Master Agreement; or
	 
	 	(c)	 	an Early Termination Date (as defined in the Master Agreement) has occurred
or been effectively designated under the Master Agreement; or
	 
	 	(d)	 	a person entitled to do so gives notice of an Early Termination Date (as
defined in the Master Agreement) under section 6(b)(iv) of the Master Agreement; or
	 
	 	(e)	 	the Master Agreement is terminated, cancelled, suspended, rescinded or
revoked or otherwise ceases to remain in full force and effect for any reason.

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

	 	(a)	 	the Bank may, without prejudice to any of its other rights, by notice to the
Borrower declare that:

	 	(i)	 	all the obligations of the Bank to the Borrower under this
Agreement are terminated, whereupon the Total Commitment shall be reduced to
zero forthwith; and/or
	 
	 	(ii)	 	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 and/or
	 
	 	(iii)	 	take any other action which, as a result of the Event of
Default or any notice served under paragraph (a) or (b) the Bank is entitled
to take under any Security Document or any applicable law; and/or

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	 	(b)	 	the Bank may take any action (other than termination of a Transaction under a
Master Agreement) which, as a result of the Event of Default or any notice served
under clause 9.10(a), the Bank is entitled to take under any Security Document or
any applicable law.

	9.11	 	Acceleration. On the service of a notice under Clause 9.10(a), the Loan, all accrued
interest and all other amounts accrued or owing from the Borrower or any Security Party under
this Agreement and every other Security Document shall become immediately due and payable or,
as the case may be, payable on demand together with the Swap Exposure of the Bank which has
terminated any existing Transactions under the Master Agreement.
	 
	9.12	 	Insolvency Events of Default. If an event occurs in respect of any of the Borrower or the
other Security Parties of the type described in Clause 9.2(a) to (e) (except (i) in the case
when a petition was presented or proceedings were commenced or a suit or writ were issued by
a third party and the Borrower or the relevant Security Party is defending itself in bona
fide and (ii) in the case that such events mentioned in Clause 9.2 relate to only a part of
the undertakings, assets, rights or revenues which in the reasonable opinion of the Bank does
not affect the ability of the Borrower to perform its obligations under this Agreement and/or
the Security Documents) the obligation of the Bank to make the Commitment available shall
terminate immediately upon receipt by the Bank of the relevant information (as such receipt
shall be conclusively certified by a certificate of the Bank) and all amounts payable under
sub-clause 9.10 above shall become immediately due and payable without any notice or other
formality which is hereby expressly waived by the Borrower.
	 
	9.13	 	Demand basis. If, pursuant to clause 9.10(a), the Bank declares the Loan to be due and
payable on demand, the Bank may by written notice to the Borrower (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.
	 
	9.14	 	Proof of Default. It is agreed that (i) the non-payment of any sum of money in time will be
proved conclusively by mere passage of time and (ii) the occurrence of this (non payment) and
any other Event of Default shall be proved conclusively by a mere written statement of the
Bank which statement shall (save for manifest error) be conclusive, binding and full evidence
for the Borrower.
	 
	9.15	 	Exclusion of Bank’s liability. Neither the Bank nor any receiver or manager appointed by the
Bank, shall have any liability to the Borrower or a Security Party:

	 	(a)	 	for any loss caused by an exercise of rights under, or enforcement of an
Encumbrance created by, a Security Document or by any failure or delay to exercise
such a right or to enforce such an Encumbrance; or
	 
	 	(b)	 	as mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in such an
Encumbrance or for any reduction (however caused) in the value of such an asset;

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

	10.	 	INDEMNITIES — EXPENSES — FEES
	 
	10.1	 	Miscellaneous Indemnities.

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

	 	(i)	 	any default in payment by any of the Security Parties of any
sum under any of the Security Documents when due;
	 
	 	(ii)	 	the occurrence and/or continuance of any Event of Default (or
event which, with the giving of notice and/or lapse of time or other
applicable condition, might constitute an Event of Default) and/or the
acceleration of repayment of the Loan (or any part thereof) pursuant to Clause
9.10; and/or
	 
	 	(iii)	 	any prepayment of the Loan or part thereof being made under
Clauses 4.2, 4.3, 8.10(a) or 12 or any other repayment of the Loan or part
thereof being made otherwise than on an Interest Payment Date relating to the
part of the Loan prepaid or repaid; or
	 
	 	(iv)	 	the Commitment or an Advance not being advanced for any
reason (excluding any default by the Bank) after the relevant Drawdown Notice
has been given,

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

	 	(i)	 	in liquidating or employing deposits from third parties
acquired or arranged to fund or maintain all or any part of the Loan and/or
any overdue amount (or an aggregate amount which includes the Loan or any
overdue amount); and
	 
	 	(ii)	 	in terminating or reversing, or otherwise in connection with,
any Transaction or any other interest rate and/or currency swap or any other
transaction or arrangement entered into by the Bank (whether with another
legal entity or with another office or department of the Bank) to hedge any
exposure arising under this Agreement or that part which the Bank determines
is fairly attributable to this Agreement of the amount of the liabilities,
expenses or losses (including losses of prospective profits) incurred by it in
terminating or reversing, or otherwise in connection with, any open position
arising under this Agreement or the Master Agreement.

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	10.2	 	Expenses. The Borrower shall (and it is hereby expressly undertaken by the Borrower) pay
to the Bank on demand:

	 	(a)	 	Initial and Amendment expenses: all expenses (including legal,
printing and out-of-pocket expenses) incurred by the Bank in connection with the
negotiation, preparation and execution of this Agreement and the other Security
Documents and of any amendment or extension of or the granting of any waiver or
consent under this Agreement and/or any of the Security Documents and/or in connection
with any proposal by the Borrower to constitute additional security pursuant to Clause
8.10(c), whether any such security shall in fact be constituted or not;
	 
	 	(b)	 	Enforcement expenses: all expenses (including legal and out-of- pocket
expenses) incurred by the Bank in contemplation of, or otherwise in connection with,
the enforcement of, or preservation of any rights under, this Agreement and/or any of
the other Security Documents, or otherwise in respect of the moneys owing under this
Agreement and/or any of the other Security Documents or the contemplation or
preparation of the above, whether they have been effected or not; and
	 
	 	(c)	 	MII and MAPI costs: reimburse the Bank on demand for any and all costs
incurred by the Bank (as conclusively certified by the Bank) in effecting and keeping
effected (i) a MII and (ii) a MAPI, provided, however, that the Bank shall in
its absolute discretion appoint and instruct in respect of any such MII and MAPI the
insurance brokers in respect of each such Insurance and provided, further,
that in the event that the Bank effects any such Insurance on the basis of any
mortgagee’s open cover, the Borrower shall pay on demand to the Bank its proportion of
premium due in respect of the relevant Vessel for which such insurance cover has been
effected by the Bank, and any certificate of the Bank in respect of any such premium
due by the Borrower shall (save for manifest error) be conclusive and binding upon the
Borrower;
	 
	 	(d)	 	Other expenses: any and all other Expenses; and
	 
	 	(e)	 	Legal costs: the legal costs of the Bank’s appointed lawyer, in respect
of the preparation of this Agreement and the other Security Documents as well as the
legal costs of the foreign lawyers (if these are available) in respect of the
registration of the Security Documents or any search or opinion given to the Bank in
respect of the Security Parties or the Vessels or the Security Documents. The said
legal costs shall be due and payable on the date of drawdown.

	 	 	All expenses payable pursuant to this Clause 10.2 shall be paid together with Value Added
Tax (if any) thereon.
	 
	10.3	 	Stamp duty. The Borrower shall (and it is hereby expressly undertaken by the Borrower to pay
any and all stamp, registration and similar taxes or charges (including those payable by the
Bank) imposed by governmental authorities in relation to this Agreement and any of the other
Security Documents, and shall indemnify the Bank against any and all liabilities with respect
to, or resulting from delay or omission on the part of the Borrower to pay such stamp taxes
or charges.

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	10.4	 	Environmental Indemnity. The Borrower shall indemnify the Bank on demand and hold the
Bank harmless from and against all costs, expenses, payments charges, losses, demands,
liabilities, actions, proceedings (whether civil or criminal) penalties, fines, damages,
judgements, orders, sanctions or other outgoings of whatever nature which may be suffered,
incurred or paid by, or made or asserted against the Bank at any time, whether before or
after the repayment in full of principal and interest under this Agreement, relating to, or
arising directly or indirectly in any manner or for any cause or reason out of an
Environmental Claim made or asserted against the Bank.
	 
	10.5	 	Currency indemnity. If any sum due from the Borrower under any of the Security Documents or
any order or judgement given or made in relation hereto has to be converted from the currency
(the “first currency”) in which the same is payable under the relevant Security Document or
under such order or judgement into another currency (the
“second currency”) for the purpose
of (i) making or filing a claim or proof against the Borrower or any other Security Party, as
the case may be, (ii) obtaining an order or judgement in any court or other tribunal or (iii)
enforcing any order or judgement given or made in relation to any of the Security Documents,
the Borrower shall (and it is hereby expressly undertaken by the Borrower to) indemnify and
hold harmless the Bank from and against any loss suffered as a result of any difference
between (a) the rate of exchange used for such purpose to convert the sum in question from
the first currency into the second currency and (b) the rate or rates of exchange at which
the Bank may in the ordinary course of business purchase the first currency into the second
currency and (b) 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, judgement, claim or proof. Any
amount due from the Borrower under this Clause 10.5 shall be due as a separate debt and shall
not be affected by judgement being obtained for any other sums due under or in respect of 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.
	 
	10.6	 	Maintenance of the Indemnities. The indemnities contained in this Clause 10 shall apply
irrespective of any indulgence granted to the Borrower or any other party from time to time
and shall continue to be in full force and effect notwithstanding any payment in favour of
the Bank and any sum due from the Borrower under this Clause 10 will be due as a separate
debt and shall not be affected by judgement being obtained for any other sums due under any
one or more of this Agreement, the other Security Documents and any other documents executed
pursuant hereto or thereto.
	 
	10.7	 	Communications Indemnity. It is hereby agreed in connection with communications
that:

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

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	 	(b)	 	the Borrower shall recognise any and all of the said notices, requests,
instructions or other communications as legal, valid and binding, when these
notices, requests, instructions or communications come from the fax numbers
mentioned in Clause 14.1 or any other fax usually used by it or its managing
company;
	 
	 	(c)	 	the Borrower hereby assumes full responsibility for the execution of the said
notices, requests, instructions or communications by the Bank and promises and
recognises that the Bank shall not be held responsible for any loss, liability or
expense that may result from such notices, requests, instructions or other
communications. It is hereby undertaken by the Borrower to indemnify in full the Bank
from and against all actions, proceedings, damages, costs, claims, demands, expenses
and any and all direct and/or indirect losses which the Bank or any third party may
suffer, incur or sustain by reason of the Bank following such notices, requests,
instructions or communications;
	 
	 	(d)	 	with regard to notices, requests, instructions or communications issued by
electronic and/or mechanical processes (e.g. by facsimile), the risk of equipment
malfunction, including, without limitation, paper shortage, transmission errors,
omissions and distortions is assumed fully and accepted by the Borrower;
	 
	 	(e)	 	the risks of misunderstandings and errors of notices, requests, instructions or
communications being given as mentioned above, are for the Borrower and the Bank will
be indemnified in full pursuant to this Clause;
	 
	 	(f)	 	the Bank shall have the right to ask the Borrower to furnish any information the
Bank may require to establish the authority of any person purporting to act on behalf
of the Borrower for these notices, requests, instructions or communications but it is
expressly agreed that there is no obligation for the Bank to do so. The Bank shall be
fully protected in, and the Bank shall incur no liability to the Borrower for acting
upon the said notices, requests, instructions or communications which were believed by
the Bank in good faith to have been given by the Borrower or by any of their authorised
representative(s); and
	 
	 	(g)	 	it is undertaken by the Borrower to safeguard the function and the security of
the electronic and mechanical appliance(s) such as fax(es) etc., as well as the
code word list, if any, and to take adequate precautions to protect it from loss
and to prevent its terms becoming known to any persons not directly
concerned with its use. The Borrower shall hold the Bank harmless and
indemnified from all claims, losses, damages and expenses which the Bank
may incur by reason of the failure of the Borrower to comply with the
obligations under this Clause and/or this Agreement.

	10.8	 	Arrangement Fee — Commitment Fee. As an inducement for the Bank to enter into this
Agreement the Borrower shall pay to the Bank:

	 	(a)	 	on or before the date hereof an arrangement fee in an amount equal to 0.20% of
the amount of the Commitment; and

53

 

	 	(b)	 	in arrears on each of the dates falling at three monthly intervals after the
date hereof until the earlier of (a) the last day of the Availability Period (b)
the Drawdown Date of the Advance second to occur and (c) the date of cancellation
of the Commitment in full by the Borrower (the “Commitment Commission Period”)
commitment commission at the rate of zero point two zero (0.20%) percent per annum
on the daily undrawn and uncancelled amount of the Commitment, computed from the
date hereof (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) until
the last day of the Commitment Commission Period.

	 	 	The arrangement fee and commitment commission referred to in this Clause 10.8 are not
refundable and shall be payable by the Borrower to the Bank whether or not any part of the
Commitment is ever advanced.
	 
	11.	 	SECURITY, APPLICATION AND SET-OFF
	 
	11.1	 	Securities. As security for the due and punctual repayment of the Loan and payment
of interest thereon as provided in this Agreement and of all other Outstanding
Indebtedness, the Borrower shall ensure and procure that the following Security
Documents are duly executed and, where required, registered in favour of the Bank in
form and substance satisfactory to the Bank at the time specified herein or otherwise
as required by the Bank and ensure that such security consists of:

	 	(a)	 	the Mortgages;
	 
	 	(b)	 	the General Assignments;
	 
	 	(c)	 	the Corporate Guarantees;
	 
	 	(d)	 	the Charterparties Assignments;
	 
	 	(e)	 	the Accounts Pledge Agreements;
	 
	 	(f)	 	the Master Agreement Security Deeds; and
	 
	 	(g)	 	the Manager’s Undertaking.

	11.2	 	Maintenance of Securities. It is hereby undertaken by the Borrower that the Security
Documents shall both at the date of execution and delivery thereof and so long as any moneys
are owing and/or due under this Agreement or under the other Security Documents be valid and
binding obligations of the respective Security Parties thereto and rights of the Bank
enforceable in accordance with their respective terms and that they will, at the expense of
the Borrower, execute, sign, perfect and do any and every such further assurance, document,
act, omission or thing as in the opinion of the Bank may be necessary or desirable for
perfecting the security contemplated or constituted by the Security Documents.
	 
	11.3	 	Application of funds. All moneys received or recovered by the Bank under or pursuant to any
of the Security Documents and expressed to be applicable in

54

 

	 	 	accordance with the provisions of this clause 11.3 shall be applied by the Bank in the
following manner:

	 	(a)	 	firstly in or towards payment of Expenses and all sums other than
principal or interest which may be due to the Bank under this Agreement and the
Security Documents or any of them, at the time of application;
	 
	 	(b)	 	secondly in or towards payment of any default interest;
	 
	 	(c)	 	thirdly in or towards payment of any arrears of interest due in
respect of the Loan or any part thereof;
	 
	 	(d)	 	fourthly in or towards repayment of the Loan or any part thereof which
is due and payable; and
	 
	 	(e)	 	fifthly in or towards payment to the Bank for any loss suffered by
reason of any such payment in respect of principal not being effected on an Interest
Payment Date relating to the part of the Loan repaid; and
	 
	 	(f)	 	sixthly, in or towards payment to the Bank of any other sums owing to
it under any of the Security Documents (other than the Master Agreement);
	 
	 	(g)	 	seventhly, in or towards payment to the Bank of any sum owing under
the Master Agreement; and
	 
	 	(h)	 	eighthly the surplus (if any) shall be paid to the Borrower, or to
whomsoever else shall be entitled thereto.

	11.4	 	Waiver of right of appropriation. The Borrower hereby irrevocably waives any rights of
appropriation to which it may be entitled.
	 
	11.5	 	Right of Set-off. Express authority is hereby given by the Borrower to the Bank without
prejudice to any of the rights of the Bank at law contractually or otherwise, at any time and
without notice to the Borrower:

	 	(a)	 	to apply any credit balance standing upon any account of the Borrower with any
branch of the Bank and in whatever currency in or towards satisfaction of any sum due
to the Bank from the Borrower under this Agreement and/or any of the other Security
Documents;
	 
	 	(b)	 	in the name of the Borrower and/or the Bank to do all such acts and execute
all such documents as may be necessary or expedient to effect such application; and
	 
	 	(c)	 	to combine and/or consolidate all or any accounts in the name of the Borrower
with the Bank.
	 
	 	(d)	 	For all or any of the above purposes authority is hereby given to the Bank to
purchase with the monies standing to the credit of any such account or accounts such
other currencies as may be necessary to effect such application. The Bank shall not be
obliged to exercise any right given by this Clause.

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	11.6	 	Rights under Master Agreement.

	 	(a)	 	Without prejudice to its rights hereunder and/or under the Master Agreement,
the Bank may at the same time as, or at any time after, any Event of Default under
this Agreement or the Borrower’s default under the Master Agreement, set off any
amount due now or in the future from the Borrower to the Bank under this Agreement
against any amount due from the Bank to the Borrower under the Master Agreement and
apply the first amount in discharging the second amount. The effect of any set off
under this clause 11.6(a) shall be effective to extinguish or, as the case may
require, reduce the liabilities of the Bank under the Master Agreement.
	 
	 	(b)	 	The rights conferred on the Bank by this Clause 11.6 shall be in addition to,
and without prejudice to or limitation of, the rights of netting and set off conferred
on the Bank by the Master Agreement. The Borrower acknowledges that the Bank shall be
under no obligation to make any payment to the Borrower under or pursuant to the
Master Agreement if, at the time that payment becomes due, there shall have occurred
an Event of Default, which is continuing or Potential Event of Default, or an Event of
Default or Termination Event (as those terms are respectively defined in the Master
Agreement).

	11.7	 	Earnings Account-Retention Account.

	 	(a)	 	The Borrower and the Owners shall procure that all moneys payable in respect
of the Earnings of each Vessel shall be paid to the relevant Earnings Account free
from Encumbrances. Unless and until an Event of Default shall occur (whereupon the
provisions of Clause 11.3 shall be applicable) no monies shall be withdrawn from the
Earnings Accounts save as hereinafter provided:

	 	(i)	 	first: in payment of any and all sums whatsoever due
and payable to the Bank hereunder (such sums to be paid in such order as the
Bank may in its sole discretion elect);
	 
	 	(ii)	 	second: during each month of the Security Period (but
no later than, in the case of the first such month, the date falling fifteen
(15) days after the Drawdown Date of the first Advance and, in the case of
each subsequent month, the same date of that month), the Borrower and each
Owner shall cause to be transferred from the Earnings Accounts to the
Retention Account of the aggregate amount of the Earnings of the Vessels
received in the Earnings Accounts during the preceding month:

	 	aa)	 	one sixth (l/6th) of the amount
of the Repayment Instalment specified in Clause 4.1 falling due for
payment on the next following Repayment Date; and
	 
	 	bb)	 	the relevant fraction of the amount of
interest on the Loan falling due on the next due date for payment of
interest under this Agreement.

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	 	 	 	The expression “relevant fraction” in relation to an amount of interest on the
Loan falling due for payment means a fraction (which shall be notified by the Bank
to the Borrower at the beginning of each Interest Period) where the numerator is
always one and where the denominator shall always be three except in the case of
an Interest Period of less than three months, in which case the denominator shall
be the number of months comprised in such Interest Period; and

	 	(iii)	 	thirdly: any balance shall be released to the relevant Owner.

	 	(b)	 	If the aggregate amount of the Earnings of the Vessels received in the Earnings Accounts is
insufficient in any month for the required transfer to be made from the Earnings Accounts to
the Retention Account in accordance with Clause 11.7(a), the Borrower shall make up the
amount of such insufficiency on demand from the Bank, but, without prejudice to its right to
make such demand, the Bank may elect (at its absolute discretion) to make up the whole or any
part of such insufficiency by increasing the amount of any transfer to be made in accordance
with Clause 11.7(a)(ii) from the aggregate amount of such Earnings received in the next or
subsequent months.
	 
	 	(c)	 	Until the occurrence of a Default, the Bank shall on each Repayment Date and on each due
date for the payment of interest under this Agreement apply in accordance with the provisions
of Clause 11.7 (ii) the relevant part of the balance then standing to the credit of the
Retention Account as shall be required to make payment of the Repayment Instalment specified
in Clause 4.1 then due under the terms of this Agreement or payment of interest then due
under the terms of this Agreement and such transfer shall constitute a pro tanto satisfaction
of the Borrower’s obligations to pay such repayment instalment or interest (as the case may
be) then due under this Agreement.
	 
	 	(d)	 	Any amounts for the time being standing to the credit of the Retention Account shall bear
interest at the rate from time to time offered by the Bank to its customers for Dollar
deposits of similar amounts and for periods similar to those for which such amounts are
likely to remain standing to the credit of the Retention Account. Such interest shall,
provided that the foregoing provisions of this Clause 11.7 shall have been complied with and
provided that no Default shall have occurred, be released to the relevant Owner.
	 
	 	(e)	 	Nothing herein contained shall be deemed to affect the absolute obligation of the Borrower to
pay interest on and to repay the Loan as provided in Clauses 3 and 4 or shall constitute a
manner or postponement thereof.
	 
	 	(f)	 	Each Owner hereby irrevocably authorises the Bank to make from its Earnings Account any and
all above payments and repayments as and when the same fall due or at any time thereafter.
	 
	 	(g)	 	The Borrower and the Owners will comply with any written requirement of the
Bank from time to time as to the location or re-location of the Earning
Accounts and the Retention Account (or any of them) and will from time to
time enter into such documentation as the Bank may require in order to create

57

 

	 		 	or maintain in favour of the Bank an Encumbrance in the Earnings Accounts and the
Retention Account, all at cost and expense of the Borrower.
	 
	 	(h)	 	The Borrower and the Owners covenant with the Bank that the Earnings Accounts,
the Retention Account and any moneys therein shall not be charged, assigned,
transferred or pledged nor shall there be granted by the Borrower or either Owner or
suffered to arise any third party rights over or against the whole or any part of the
Earnings Accounts (or either of them) other than in favour of the Bank.
	 
	 	(i)	 	The Earnings Accounts shall be operated in accordance with the Bank’s usual
terms and conditions (full knowledge of which the Borrower and each Owner hereby
acknowledges) and subject to the Bank’s usual charges levied on such accounts and/or
transactions conducted on such accounts (as from time to time notified by the Bank to
the Borrower).
	 
	 	(j)	 	The Borrower hereby warrants that sufficient monies to meet the next Repayment
Instalment plus interest thereon will be accumulated each and every month in the
Retention Account.
	 
	 	(k)	 	After the occurrence of a Default the balance (if any) including any accrued
interest standing to the credit of the Earnings Accounts (or either of them) and the
Retention Account shall be applied in accordance with the provisions of Clause 11.3.
	 
	 	(l)	 	Upon payment in full of all principal, interest and all other amounts due to
the Bank under the terms of this Agreement and the other Security Documents, any
balance then standing to the credit of the Retention Account and/or the Earnings
Accounts shall be released and paid to the relevant Owner or to whomsoever else may be
entitled to receive such balance.

	12.	 	UNLAWFULNESS, INCREASED COSTS
	 
	12.1	 	Unlawfulness. If any change in, or introduction of, any law, regulation or regulatory
requirement or any request of any central bank, monetary, regulatory or other authority
or any order of any court renders it unlawful or contrary to any such regulation,
requirement, request or order for the Bank to advance the Commitment or to maintain
or fund the Loan, notice shall be given promptly by the Bank to the Borrower
whereupon the Commitment shall be reduced to zero and the Borrower shall be
obliged to prepay the Loan in accordance with such notice, together with accrued
interest thereon to the date of prepayment and all other sums payable by the Borrower
under this Agreement and/or the Master Agreement.
	 
	 	 	In any such event the Borrower and the Bank shall (as per the provisions of sub-Clause
3.6) negotiate in good faith (but without incurring any legal obligations) with a view to
agreeing the terms for making the Loan available from another jurisdiction or providing
the Loan from alternative sources.
	 
	12.2	 	Change of circumstances. If any change in or in the interpretation of any applicable
law or regulation, by any government or governmental authority or
agency, makes it unlawful for the Bank to maintain or give effect to its obligations or to claim or

58

 

	 	 	receive any amount payable to the Bank under this Agreement, then the Bank may serve
written notice on the Borrower declaring its obligations under this Agreement terminated in
whole or in part, whereupon the same shall terminate forthwith and the Borrower will
immediately repay the Loan and accrued interest to the date of prepayment together with all
other Outstanding Indebtedness to the Bank pursuant to the terms of the notice.
	 
	12.3	 	Increased Cost. If, as a result of (a) any change in or in the interpretation of any law,
regulation or official directive (whether or not having the force of law but, if not having
the force of law, with which the Bank habitually complies), by any governmental authority in
any country the laws or regulations of which are applicable on the Bank, or (b) compliance by
the Bank with any request from any applicable fiscal or monetary authority (whether or not
having the force of law but, if not having the force of law, with which the Bank habitually
complies) or (c) any other set of circumstances affecting the Bank including (without
limitation) those relating to Taxation, stock or capital adequacy, any type of liquidity,
reserve assets, cash ratio deposits and special deposits or other banking or monetary
controls or requirements (except to the extent included in the Mandatory Cost) which affects
the manner in which the Bank allocates capital resources to its obligations hereunder
(including (without limitation) those resulting from the implementation of or compliance with
any amendment of the “International Convergence of Capital Measurement and Capital Standards,
a Revised Framework” published by the Basle Committee on Banking Supervision (July 1988, as
amended) or any amendatory or substitute agreement thereof including, without limitation, the
proposed new Basle Capital Accord (Basle II) or any law or regulation which implements Basle
II):

	 	(a)	 	the cost to the Bank of making the Commitment or any part thereof or
maintaining or funding the Loan is increased or an additional cost on the Bank is
imposed; and/or
	 
	 	(b)	 	subject the Bank to Taxes or the basis of Taxation (other than Taxes or
Taxation on the overall net income of the Bank) in respect of any payments to the
Bank under this Agreement or any of the other Security Documents is changed; and/or
	 
	 	(c)	 	the amount payable or the effective return to the Bank under any of the
Security Documents is reduced; and/or
	 
	 	(d)	 	the Bank’s rate of return on its overall capital by reason of a change in
the manner in which it is required to allocate capital resources to the Bank’s
obligations under any of the Security Document is reduced; and/or
	 
	 	(e)	 	require the Bank to make a payment or forgo a return on or calculated by
references to any amount received or receivable by it under any of the Security
Documents is required; and/or
	 
	 	(f)	 	require the Bank to incur or sustain a loss (including a loss of future
potential profits) by reason of being obliged to deduct all or part of the Commitment
or the Loan from its capital for regulatory purposes,

59

 

	 	 	then and in each case (subject to Clause 12.6) the Borrower shall pay to the Bank, from
time to time, upon demand, such additional moneys as shall indemnify the Bank for any
increased or additional cost, reduction, payment, foregone return or loss whatsoever
	 
	12.4	 	Claim for increased cost. The Bank will promptly notify the Borrower of any intention to
claim indemnification pursuant to Clause 12.3 and such notification will be a conclusive and
full evidence binding on the Borrower as to the amount of any increased cost or reduction and
the method of calculating the same and the Borrower shall be allowed to rebut such evidence
by any means of evidence save for witness. A claim under Clause 12.3 may be made at any time
and must be discharged by the Borrower within seven (7) days of demand. It shall not be a
defence to a claim by the Bank under this Clause 12.3 that any increased cost or reduction
could have been avoided by the Bank. Any amount due from the Borrower under Clause 12.3 shall
be due as a separate debt and shall not be affected by judgement being obtained for any other
sums due under or in respect of this Agreement.
	 
	12.5	 	Option to prepay. If any additional amounts are required to be paid by the Borrower to the
Bank by virtue of Clause 12.3, the Borrower shall be entitled, on giving the Bank not less
than fourteen (14) days prior notice in writing, to prepay the Loan and accrued interest
thereon, together with all other Outstanding Indebtedness, on the next Repayment Date. Any
such notice, once given, shall be irrevocable.
	 
	12.6	 	Exception. Nothing in Clause 12.3 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 subject of an additional
payment under Clause 5.3.
	 
	13.	 	ASSIGNMENT, PARTICIPATION, CHANGE OF LENDING BRANCH
	 
	13.1	 	Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Bank
and the Borrower and their respective successors and assigns.
	 
	13.2	 	No Assignment by the Borrower. The Borrower and any other parties to the Security Documents
may not assign any rights and/or obligations under this Agreement or any of the other
Security Documents or any documents executed pursuant to this Agreement and/or the other
Security Documents.
	 
	13.3	 	Assignment by the Bank. The Bank may at any time (following adequate notice being given to
the Borrower and the other Security Parties but without the consent of the Borrower), assign,
transfer, or offer participation to any other bank or financial institution, in whole or in
part, or in any manner dispose of all or any of its rights and/or obligations arising or
accruing under this Agreement or any of the other Security Documents or any documents
executed pursuant to this Agreement and/or the other Security Documents.
	 
	13.4	 	Documentation. If the Bank assigns, transfers or in any other manner grants participation in
respect of all or any part of its rights or benefits or transfers all or any of its
obligations as provided in this Clause 13 the Borrower undertakes, immediately on being
requested to do so by the Bank, to enter into and procure that each Security Party enters into
(at the Bank’s expense) such documents as may be necessary or desirable to transfer to the
assignee, transferee or participant all or the relevant part of

60

 

	 	 	the interest of the Bank in the Security Documents and all relevant references in this
Agreement to the Bank shall thereafter be construed as a reference to the Bank and/or
assignee, transferee or participant of the Bank to the extent of their respective interests
and, in the case of a transfer of all or part of the obligations of the Bank, the Borrower
shall thereafter look only to the assignee, transferee or participant in respect of that
proportion of the obligations of the Bank under this Agreement assumed by such assignee,
transferee or participant. The Borrower hereby expressly consents to any subsequent
transfer of the rights and obligations of the Bank and undertake that they shall join in
and execute such supplemental or substitute agreements as may be necessary to enable the
Bank to assign and/or transfer and/or grant participation in respect of its rights and
obligations to another branch or to one or more banks or financial institutions in a
syndicate or otherwise.
	 
	13.5	 	Disclosure of information. The Bank may without the consent of the Borrower, disclose (on a
confidential basis) to a prospective assignee, substitute or 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 Borrower and the other Security Parties as the Bank
shall consider appropriate.
	 
	13.6	 	Change of Lending Branch. The Bank shall be at liberty to transfer the Loan to any branch or
branches, and upon notification of any such transfer, the word “Bank” in this Agreement and
in the other Security Documents shall mean the Bank, acting through such branch or branches
and the terms and provisions of this Agreement and of the other Security Documents shall be
construed accordingly.
	 
	13.7	 	Cumulative Remedies. The rights and remedies of the Bank contained in this Agreement and the
other Security Documents are cumulative and not neither exclusive of each other nor of any
other rights or remedies conferred by law.
	 
	13.8	 	Waivers. No delay or omission by the Bank to exercise any right, remedy or power vested in
the Bank under this Agreement and/or the other Security Documents or by law shall impair such
right or power, or be construed as a waiver of, or as an acquiescence in any default by the
Borrower and/or any other Security Party, nor shall any single or partial exercise by the
Bank of any power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. In the event of the Bank on any occasion
agreeing to waive any such right, remedy or power, or consent to any departure from the
strict application of the provisions of this Agreement or of any Security Document, such
waiver shall not in any way prejudice or affect the powers conferred upon the Bank under this
Agreement and the other Security Documents or the right of the Bank thereafter to act
strictly in accordance with the terms of this Agreement and the other Security Documents. No
modification or waiver by the Bank of any provision of this Agreement or of any of the other
Security Documents nor any consent by the Bank to any departure therefrom by any Security
Party shall be effective unless the same shall be in writing and then shall only be effective
in the specific case and for the specific purpose for which given. No notice to or demand on
any such party in any such case shall entitle such party to any other or further notice or
demand in similar or other circumstances.
	 
	13.9	 	Integration of Terms. This Agreement contains the entire agreement of the parties and its
provisions supersede the provisions of the Commitment Letter (save for the

61

 

	 	 	provisions thereof which relate to fees) and any and all other prior correspondence and
oral negotiation by the parties in respect of the matters regulated by this Agreement.
	 
	13.10	 	Amendments. This Agreement and any other Security Documents shall not be amended or varied
in their respective terms by any oral agreement or representation or in any other manner
other than by an instrument in writing of even date herewith or subsequent hereto executed by
or on behalf of the parties hereto or thereto.
	 
	13.11	 	Invalidity of Terms. In the event of any provision contained in one or more of this
Agreement, the other Security Documents and any other documents executed pursuant hereto or
thereto being invalid, illegal or unenforceable in any respect under any applicable law in
any jurisdiction whatsoever, such provision shall be ineffective as to the jurisdiction only
without affecting the remaining provisions hereof or thereof. If, however, this event becomes
known to the Bank prior to the Drawdown of the Commitment or of any part thereof the Bank
shall be entitled to refuse drawdown until this discrepancy is remedied. Where, however, the
provisions of any such applicable law may be waived, they are hereby waived by the parties
hereto to the full extent permitted by the law to the intent that this Agreement, the other
Security Documents and any other documents executed pursuant hereto or thereto shall be
deemed to be valid binding and enforceable in accordance with their respective terms.
	 
	13.12	 	Inconsistency of Terms. In the event of any inconsistency between the provisions of this
Agreement and the provisions of a Security Document the provisions of this Agreement shall
prevail.
	 
	13.13	 	Language and genuineness of documents

	 	(a)	 	Language: All certificates, instruments and other documents to be
delivered under or supplied in connection with this Agreement or any of the other
Security Documents shall be in the Greek or the English language (or such other
language as the Bank shall agree) or shall be accompanied by a certified Greek
translation upon which the Bank shall be entitled to rely.
	 
	 	(b)	 	Certification of documents: Any copies of documents delivered to the
Bank shall be duly certified as true, complete and accurate copies by appropriate
authorities or legal counsel practising in Greece or otherwise as it will be
acceptable to the Bank at the sole discretion of the Bank.
	 
	 	(c)	 	Certification of signature: Signatures on Board or shareholder
resolutions, Secretary’s certificates and any other documents are, at the discretion
of the Bank, to be verified for their genuineness by appropriate Consul or other
competent authority.

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

	 	(a)	 	be in writing delivered personally or be first-class prepaid letter (airmail
if available), or cable or shall be served through a process server or subject to
Clause 10.7 by fax;

62

 

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

	 	(i)	 	if to be sent to any
Security Party, to:
 c/o Stealth Maritime
Corp. S.A.,
 331 Kifissias Avenue,
 145 61
Kifissia, Athens, Greece, 
Facsimile No: +30
210 6252817 
Attention: Chief Financial
Officer
	 
	 	(ii)	 	if to be sent to the Bank, to

Emporiki Bank of Greece S.A.

Shipping Division, 
114
Kolokotroni Street, 
GR 185 35
Piraeus, Greece, 
Fax No.: +30 210 4226779 
Attention: The Manager

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

	14.2	 	Confidentiality

	 	(a)	 	Each of the parties hereto agree and undertake to keep confidential any
documentation and any confidential information concerning the business, affairs,
directors or employees of the other which comes into its possession during this
Agreement and not to use any such documentation, information for any purpose other
than for which it was provided.
	 
	 	(b)	 	The Borrower acknowledges and accepts that the Bank may be required by law or
that it may be appropriate for the Bank to disclose information and deliver
documentation relating to the Borrower and the transactions and matters in relation to
this Agreement and/or the other Security Documents to governmental or regulatory
agencies and authorities.
	 
	 	(c)	 	The Borrower acknowledges and accepts that in case of occurrence of any of the
Events of Default the Bank may disclose information and deliver documentation relating
to the Borrower and the transactions and matters in relation to this Agreement and/or
the other Security Documents to third parties

63

 

	 	 	 	to the extend that this is necessary for the enforcement or the contemplation of
enforcement of the Bank’s rights or for any other purpose for which in the opinion
of the Bank, such disclosure should be useful or appropriate for the interests of
the Bank or otherwise and the Borrower expressly authorise any such disclosure and
delivery.
	 
	 	(d)	 	The Borrower acknowledges and accepts that the Bank may be prohibited or it
may be inappropriate for the Bank to disclose information to the Borrower by reason of
law or duties of confidentiality owed or to be owed to other persons.
	 
	 	(e)	 	The Borrower hereby grants its consent to the communication by the Bank for
process in the meaning of law 2472/97 of its personal data contained in this
Agreement, the Security Documents, in the Earnings Accounts and the Retention Account
for onwards communication thereof to the inter-banking database record called
“Teiresias” kept and solely used by banks and financial institutions. The Borrower is
entitled at any relevant time throughout the Security Period to revoke its consent
given hereunder by written notice addressed to the Bank and the Registrar of
“Teiresias A.E.” at 2, Alamanas street, 15125 Maroussi, Athens, Greece.

	15.	 	GOVERNING LAW AND JURISDICTION
	 
	15.1	 	Law. This Agreement is governed by, and shall be construed in accordance with, English law.
	 
	15.2	 	Submission to jurisdiction. The Borrower agrees, for the benefit of each Creditor, that any
legal action or proceedings arising out of or in connection with this Agreement against the
Borrower or any of its assets may be brought in the English courts. The Borrower irrevocably
and unconditionally submits to the jurisdiction of such courts and irrevocably designates,
appoints and empowers Messrs. Saville & Co. (attention: Mr. Richard Saville) at their
office for the time being at One Carey Lane, London, EC2V 8AE, 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, who is hereby authorised to accept such service, which shall be deemed to be good
service on the Borrower, provided, however, that the Borrower further agrees that in
the event that (i) Messrs. Saville & Co. (or any other agent appointed by the
Borrower in substitution of Messrs. Saville & Co. and acceptable to the Lenders)
close or fail to maintain a business presence in England, or (ii) the Lenders, in their sole
discretion, shall determine that service of process on the said agents is not feasible or may
be insufficient under the Laws of England, then any summons, writ or other legal process
issued against the Borrower in England may be served upon Messrs. The Law Debenture Corporate
Services Limited, currently located at 5th Floor, 100 Wood Street, London EC2V 7EX,
England, (hereinafter called the “Process Agent for English Proceedings”) or their successors,
who are hereby authorised to accept such service, which shall be deemed to be good service on
the Borrower. The appointment of the Process Agent for English Proceedings shall be valid and
binding from the date notice of such appointment is given by the Agent to the Borrower in
accordance with Clauses 17.1 and 17.2. 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
Borrower in the courts of any other competent jurisdiction nor shall the taking of

64

 

	 	 	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 Borrower may have against any
Creditor arising out of or in connection with this Agreement.
	 
	15.3	 	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.
	 
	15.4	 	Process Agent in Greece. Mrs. Sophia Damigou, an attorney-at-law, c/o Stealth
Maritime Corp. S.A., 331 Kifissias Avenue, 145 61 Kifissia, Athens, Greece, is hereby
appointed by the Borrower as agent to accept service (hereinafter “Process Agent”) upon whom
any judicial process in respect of proceedings in Greece may be served and any process
notice, judicial or extra-judicial request, demand for payment, payment order, foreclosure
proceedings, notarial announcement of claim, notice, request, demand or other communication
under this Agreement or any of the Security Documents. In the event that the Process Agent
(or any substitute process agent notified to the Bank in accordance with the foregoing)
cannot be found at the address specified above (or, as the case may be, notified to the
Bank), which will be conclusively proved by a deed of a process server to the effect that the
Process Agent was not found at such address, any process notice, judicial or extra-judicial
request, demand for payment, payment order, foreclosure proceedings, notarial announcement of
claim or other communication to be sent to any Security Party may be validly notified in
accordance with the relevant provisions of the Hellenic Code on Civil Procedure.
	 
	15.5	 	Meaning of “proceedings”. In this Clause 15 “proceedings” means proceedings of any kind,
including an application for a provisional or protective measure.

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

65

 

EXECUTION PAGE

THE BORROWER

	 	 	 	 	 	 	 	 	 
	SIGNED by	 	 	)	 	 	 
	Mr. Andrew Simmons	 	 	)	 	 	 
	for and on behalf of the Borrower	 	 	)	 	 	 
	STEALTHGAS INC.	 	 	)	 	 	/s/ Andrew Simmons
	 

	 	 	 	 	 	 	 	 
	of Marshall Islands, in the presence of:	 	 	)	 	 	Attorney-in-Fact
	 
	 	 	 	 	 	 	 	 
	 
	Witness:

	 	/s/ Konstantinos Samaritis	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	Konstantinos Samaritis	 	 	 	 	 	 
	Address:

	 	c/o Stealth Maritime Corp. S.A.,

331 Kifissias Avenue,

145 61 Athens, Greece	 	 	 	 	 	 
	Occupation:

	 	Attorney-at-law	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	THE BANK	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED by	 	 	)	 	 	 
	Mrs. Christina Margelou and	 	 	)	 	 	/s/ Christina Margelou
	 

	 	 	 	 	 	 	 	 
	Mr. Cryssoula Voulgari	 	 	)	 	 	Attorney-in-Fact
	for and on behalf of	 	 	)	 	 	 
	EMPORIKI BANK OF GREECE S.A.	 	 	)	 	 	 
	in the presence of:	 	 	)	 	 	/s/ Cryssoula Voulgari
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Attorney-in-Fact
	 
	 	 	 	 	 	 	 	 
	Witness:

	 	/s/ Aristeidis D. Vourdas	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	Aristeidis D. Vourdas	 	 	 	 	 	 
	Address:

	 	13 Defteras Merarchias Street	 	 	 	 	 	 
	 

	 	Piraeus, Greece	 	 	 	 	 	 
	Occupation:

	 	Attorney-at-law	 	 	 	 	 	 

66

 

SCHEDULE 1

FORM OF DRAWDOWN NOTICE

(referred to in Clause 2.2)

	To:	 	EMPORIKI BANK OF GREECE S.A.

144 Kolokotroni Street,
 GR
185.35 Piraeus, 
Greece (the
“Bank”)

[•], 2008

Re: US$29,437,000 Loan Agreement (the “Loan Agreement”) dated [•] August, 2008 made between (1) the
Bank, as lender, (2)
Stealthgas Inc., of Marshall Islands, as borrower, (the “Borrower”).

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

We confirm that:

	(i)	 	no event or circumstance has occurred and is continuing which constitutes a Default;
	 
	(ii)	 	the representations and warranties contained in Clause 6 of the Loan Agreement and the
representations and warranties contained in each of the Security Documents are true and
correct at the date hereof as if made with respect to the facts and circumstances existing
at such date;
	 
	(iii)	 	the borrowing to be effected by the drawing of the said Advance will be within our
corporate powers, has been validly authorised by appropriate corporate action and will not
cause any limit on our borrowings (whether imposed by statute, regulation, agreement or
otherwise) to be exceeded;
	 
	(iv)	 	there has been no change in the ownership, management or financial condition of any of the
Security Parties from that previously disclosed to the Bank in writing other than [•]; and
	 
	(v)	 	we will use the proceeds of the above Advance[s] for our benefit and under our full
responsibility and exclusively for the purposes specified in the Loan Agreement.

					
	 	 	 	 	 
	Schedule 1
	 	67
	 	 

 

 

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

	 	 	 	 	 	 	 	 	 
	SIGNED by	 	 	)	 	 	 
	Mr.	 	 	)	 	 	 
	for and on behalf of the Borrower	 	 	)	 	 	 
	STEALTHGAS INC.	 	 	)	 	 	 
	of Marshall Islands, in the presence of:	 	 	)	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Witness:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	      [•]	 	 	 	 	 	 
	Address:

	 	      [•]

      Piraeus, Greece,	 	 	 	 	 	 

Occupation: Attorney-at-law

					
	 	 	 	 	 
	Schedule 1
	 	68

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