Document:

exv4w62

Exhibit 4.62

Dated:16thDecember, 2009

ADVENTURE TWELVE S.A.

(as owner)

-and-

FBB-FIRST BUSINESS BANK S.A.

(as mortgagee)

 

First Preferred Liberian Mortgage

over M/V “FREE NEPTUNE”

 

 

 

FIRST PREFERRED SHIP MORTGAGE ON THE 

M/V “FREE NEPTUNE”

THIS FIRST PREFERRED MORTGAGE is made on this 16th day of December, 2009

BY:

	(1)	 	ADVENTURE TWELVE S.A., a company organised and existing under the laws of the
Republic of Liberia and having its registered office at 80, Broad Street, Monrovia, Liberia
(hereinafter called the “Owner”)

IN FAVOUR OF

	(2)	 	FBB — FIRST BUSINESS BANK S.A., a bank incorporated in Greece with its head office
at 91 Michalakopoulou Street, 115 28 Athens, Greece acting for the time being through its
office at 62, Notara & Sotiros Dios Streets, 185 35 Piraeus, Greece (hereinafter called the
“Mortgagee”, which expression shall include its successors and assigns).

WHEREAS:

	(A)	 	The Owner is the sole owner of the vessel “FREE NEPTUNE” (hereinafter called the “Vessel”).
The Vessel is duly documented in the name of the Owner under and pursuant to the laws of the
Republic of Liberia at the Port of Monrovia under Official No. 12063, International Call Sign
A8DF7, its gross tonnage is 17997 tons, its net tonnage is 10222, and she was built in the
year 1996 by Naikai Zosen Corporation, Japan.
	 
	(B)	 	By a Loan Agreement dated 15th December, 2009 (hereinafter as the same may from
time to time be amended and/or supplemented called the “Loan Agreement”) entered into between
(A) the Mortgagee, as lender and (B) the following companies including the Owner, as joint and
several co-borrowers and co-debtors, i.e. ADVENTURE NINE S.A., of Marshall Islands and
ADVENTURE TWELVE S.A., of Liberia (therein collectively referred to as the “Borrowers”), the
Bank agreed, inter alia, to make available to the Borrowers on a joint and several basis and
upon the terms and conditions therein contained a secured term loan in the amount of up to
United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000)
(the “Commitment”) for the purpose referred to therein.
	 
	(C)	 	Pursuant to the terms of the Loan Agreement, the Mortgagee has advanced to the Borrowers the
full amount of the Commitment i.e. United States Dollars twenty seven million seven hundred
and fifty thousand (US$27,750,000) (and the Owner hereby acknowledges receipt thereof) and the
Owner is indebted as of the date hereof to the Mortgagee in the principal sum of United States
Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000).
	 
	(D)	 	The Owner in order to secure:

	 	(a)	 	the repayment of the said principal amount of the Commitment advanced to the
Borrowers pursuant to the Loan Agreement and interest thereon and all other sums of
money from time to time owing by the Borrowers to the Mortgagee under the Loan
Agreement and the Security Documents; and
	 
	 	(b)	 	the performance and observance of and compliance by the Owner with all of the
covenants terms and conditions in the Loan Agreement and the Security Documents
contained,

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	 	 	has duly authorised the execution and delivery of this First Preferred Mortgage on the
Vessel pursuant to the laws of the Republic of Liberia.

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:

	1.	 	DEFINITIONS AND INTERPRETATION

	 	(a)	 	In this Mortgage unless the context otherwise requires:
	 
	 	 	 	“Dollars” (and the sign “$”) means the legal currency, at any relevant time
hereunder, of the United States of America;
	 
	 	 	 	“Earnings” means all moneys whatsoever due or to become due to the Owner at any time
during the Security Period arising out of the use or operation of the Vessel
including (but without prejudice to the generality of the foregoing) all freight,
hire and passage moneys, compensation payable to the Owner in event of requisition
of the Vessel for hire, remuneration for salvage and towage services, demurrage and
detention moneys and damages for breach (or payments for variations or termination)
of any charterparty or other contract for the employment of the Vessel and all sums
recoverable under the Insurances in respect of loss of Earnings and includes, if and
whenever the 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 the
Vessel;
	 
	 	 	 	“Environmental Approvals” means all approvals, licenses, permits, exemptions or
authorisations required under applicable Environmental Laws:
	 
	 	 	 	“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” means (i) any release of Environmentally Sensitive Material
from the Vessel, (ii) any incident in which Environmentally Sensitive Material is
released from a vessel other than the Vessel and which involves collision between
the Vessel and such other vessel or some other incident of navigation or operation,
in either case, where the Vessel, the Owner or the Manager are actually or allegedly
at fault or otherwise liable (in whole or in part) or (iii) any incident in which
Environmentally Sensitive Material is released from a vessel other than the Vessel
and where the Vessel is actually or potentially liable to be arrested as a result
and/or where the Owner or the Manager are actually or allegedly at fault or
otherwise liable;
	 
	 	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements
whatsoever relating to pollution or protection of the environment (including,
without limitation, the United States Oil Pollution Act of 1990 and any
comparable laws of the individual States of the United States of America) which are
from time to time and at any relevant time applicable to the Vessel;
	 
	 	 	 	“Environmentally Sensitive Material” means oil, oil products, any other substance
which is polluting, toxic or hazardous or any substance the release of

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	 	 	 	which into the environment is regulated, prohibited or penalised by or pursuant to any
Environmental Law;
	 
	 	 	 	“Events of Default” means any of the events described in Clause 9;
	 
	 	 	 	“General Assignment” means the deed of Assignment bearing even date herewith
whereby the Owner has assigned to the Mortgagee the Insurances, the Requisition
Compensation and the Earnings of the Vessel, as the same may from time to time be
supplemented and/or amended.
	 
	 	 	 	“Insurances” means all policies and contracts of insurance (which expression
includes all entries of the Vessel in a protection and indemnity or war risks
association) which are from time to time taken out or entered into in respect of the
Vessel and her Earnings or otherwise howsoever in connection with the Vessel;
	 
	 	 	 	“ISM Code” means in relation to its application to the Owner, the 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;
	 
	 	 	 	“ISM Code Documentation” includes:

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

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

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	 	 	 	“ISPS Code” means the International Security of Ships and Port Safety Code and
includes any amendments or extensions thereto and any regulation issued pursuant
thereto;
	 
	 	 	 	“ISSC” means an International Ship Security Certificate issued in respect of the
Ship pursuant to the ISPS Code;
	 
	 	 	 	“LIBOR” means in relation to any amount and for any period:

	 	(a)	 	the offered rate (if any) per annum for deposits in Dollars for
such amount and for such period which is the rate, for such period, appearing
on the relevant page of the Reuters Screen LIBOR01 at or about 11 a.m. London
time on the Quotation Date (or, if the Mortgagee 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 Mortgagee may
determine) (and, for the purposes of this Agreement, “Reuters Screen LIBOR01”
means the display designated as “LIBOR01” on the Reuters Service or such other
page as may replace LIBOR01 on that service for the purpose of displaying rates
comparable to that rate or on such other service as may be nominated by the
British Bankers’ Association as the information vendor for the purpose of
displaying the British Bankers’ Association Interest Settlement Rates for
Dollars); and
	 
	 	(b)	 	if on such date no such rate is so displayed, LIBOR for such
period shall be the rate determined by the Mortgagee in accordance with its
usual practices to obtain similar deposit(s) in Dollars on the basis of the
rates quoted by the Mortgagee as the Mortgagee’s offered rate for deposits in
Dollars in an amount approximately equal to the amount in relation to which
LIBOR is to be determined for a period equivalent to such period in the London
Interbank Market at or about 11:00 a.m. (London time) on the second Banking Day
before the first day of such period;

	 	 	 	“Loan” means the aggregate principal amount borrowed by the Borrowers in respect of
the Commitment or (as the context may require) the principal amount thereof owing to
the Mortgagee at any relevant time outstanding under the Loan Agreement;
	 
	 	 	 	“Loan Agreement” means the Loan Agreement mentioned in Recital (B as the same may
from time to time be amended and/or supplemented;
	 
	 	 	 	“Major Casualty” means any casualty to the Vessel in respect whereof the claim
or the aggregate of the claims against all insurers, before adjustment for any
relevant franchise or deductible, exceeds Dollars two hundred thousand ($200,000) or
the equivalent in any other currency;
	 
	 	 	 	“Margin” means three percentage points (3%) per annum;
	 
	 	 	 	“Mortgaged Property” means:

	 	(i)	 	the Vessel;
	 
	 	(ii)	 	the Insurances and all benefits thereof (including claims of
whatsoever nature and return of premiums);
	 
	 	(iii)	 	the Earnings; and
	 
	 	(iv)	 	any Requisition Compensation;

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	 	 	 	“person” includes any body of persons corporate or unincorporated;
	 
	 	 	 	“Quotation Date” means, in respect of any period in respect of which LIBOR falls to
be determined under the Loan Agreement, the second Banking Day before the first day
of such period;
	 
	 	 	 	“Requisition Compensation” means all moneys or other compensation payable during the
Security Period by reason of requisition for title or other compulsory acquisition
of the Vessel otherwise than by requisition for hire;
	 
	 	 	 	“Secured Indebtedness” means the aggregate of (a) the Loan, (b) all other sums
of any nature (together with all interest on any of those sums) which from time to
time may be payable by the Borrowers to the Mortgagee pursuant to the Security
Documents (or any of them) whether actually or contingently, presently or in the
future, (c) any damages payable as a result of any breach by the Borrowers of any of
the Security Documents and (d) any damages or other sums payable as a result of any
of the obligations of the Borrowers under or pursuant to any of the Security
Documents being disclaimed by a liquidator or any other person, or, where the
context permits, the amount thereof for the time being outstanding;
	 
	 	 	 	“Security Documents” means the Loan Agreement, this Mortgage, the Guarantee,
the General Assignment and any other such document as may have been or may hereafter
be executed to secure and/or regulate the Secured Indebtedness and any such other
document as may be defined in the Loan Agreement as a Security Document (including,
where the context so admits, the Loan Agreement itself);
	 
	 	 	 	“Security Interest” means a mortgage, charge (whether fixed or floating), pledge,
lien, hypothecation, assignment, trust arrangement, title retention or other
interest given by way of security or arrangement of any kind whatsoever;
	 
	 	 	 	“Security Party(ies)” means the Borrowers, the Approved Manager, the Guarantor and
any other party (other than the Mortgagee) to any of the Security Documents or any
such person as is defined in the Loan Agreement as a Security Party;
	 
	 	 	 	“Security Period” means the period commencing on the date hereof and terminating
upon discharge of the security created by the Security Documents by payment of all
moneys payable thereunder;
	 
	 	 	 	“Total Loss” means:

	 	(i)	 	actual or constructive or compromised or arranged total loss of
the Vessel; or
	 
	 	(ii)	 	requisition for title or other compulsory acquisition of the
Vessel otherwise than by requisition for hire;
	 
	 	(iii)	 	capture, seizure, arrest, detention or confiscation of the
Vessel by any government or by persons acting or purporting to act on behalf of
any government unless the Vessel be released from such seizure capture arrest
or detention within one month after the occurrence thereof.

	 	 	 	“Vessel” means the motor vessel “FREE NEPTUNE” described above in Recital (A) hereto
and as she is more particularly described in her Certificate of Registry and
includes her engines, machinery, boats, tackle, outfit, spare, gear, fuel,

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	 	 	 	consumable or other stores belongings and appurtenances whether on board or ashore
and whether now owned or hereafter acquired;

	 	(b)	 	In 6.1 hereof:

	 	(i)	 	“excess risks” means the proportion of claims for general
average salvage and salvage charges not recoverable under the hull and
machinery policies in respect of the Vessel in consequence of her insured value
being less than the value at which the Vessel is assessed for the purpose of
such claims;
	 
	 	(ii)	 	“protection and indemnity risks” means the usual risks covered
by a protection and indemnity association managed in London including 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 8 of the Institute Time Clauses
(Hulls) (1/11/95) or any equivalent provision;
	 
	 	(iii)	 	“war risks” includes the risk of mines and all risks excluded
by Clause 24 of the Institute Time Clauses (Hulls) 1/11/95

	 	(c)	 	In this Mortgage:

	 	(i)	 	Defined expressions: all capitalised terms which are used
herein and are not otherwise defined herein shall have the meaning given to
them in the Loan Agreement;
	 
	 	(ii)	 	Headings: Clause headings are inserted for convenience only and
shall not affect the construction of this Mortgage and, unless otherwise
specified, all references to Clauses are to clauses of this Mortgage;

	 	(d)	 	Construction of certain terms: In this Mortgage, unless the context otherwise
requires:

	 	(i)	 	words denoting the singular number shall include the plural and
vice versa;
	 
	 	(ii)	 	references to:

	 	aa)	 	persons include bodies corporate and unincorporate;
	 
	 	bb)	 	assets include property, rights and assets of every description;
	 
	 	cc)	 	any document are to be construed as references
to such document as amended or supplemented from time to time;
	 
	 	dd)	 	any enactment include re-enactments, amendments
and extensions thereof;

	 	(e)	 	Conflict with the Loan Agreement: This Mortgage contract shall be read together
with the Loan Agreement and the other Security Documents, but in case of any conflict
between the Loan Agreement and this Mortgage contract, the provisions of the Loan
Agreement shall prevail, provided however, that the law applicable to this Mortgage
shall be solely that of the Republic of Liberia.

	2.	 	GRANT, CONVEYANCE AND MORTGAGE

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	2.1	 	Mortgage: In consideration of the agreement of the Mortgagee to make available the Loan to
the Borrowers and in further consideration of the agreement of the Mortgagee to maintain the
Loan available to the Borrowers throughout the Security Period pursuant and subject to the
terms and conditions of the Loan Agreement and in order to secure the prompt, full and
complete payment to the Mortgagee of the Secured Indebtedness by the Borrowers and to secure
the performance and observance of and compliance with all the covenants terms and conditions
in this Mortgage and in the Loan Agreement by the Owner, the Owner has granted, conveyed,
mortgaged, pledged, set over and confirmed and does by these presents grant, convey, mortgage,
pledge, set over and confirm unto the Mortgagee, its successors and assigns, the whole of the
Vessel, together with any interest therein and her engines, machinery, boats, tackle, outfit
derricks, tools, drillers, cranes, rigging, anchors, drill stem, drilling equipment, pumps and
pumping equipment, boat, blow-out preventers, mud systems, tubing casing spare gear, fuel,
consumable or other stores, belonging and appurtenances whether on board or ashore and whether
now owned or hereafter acquired and also any and all additions, improvements and replacements.
	 
	 	 	TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns, forever, upon
the terms herein set forth, for the enforcement of the payment of the Secured Indebtedness
by the Borrowers to the Mortgagee under the Loan Agreement and to secure the performance and
observance of and compliance with the covenants, terms and conditions in this Mortgage and
in the Loan Agreement contained and supplemental thereto, express or implied.
	 
	 	 	PROVIDED ONLY, and the condition of these presents is such, that if the Owner, its
successors or assigns shall pay or cause to be paid to the Mortgagee the Secured
Indebtedness under the Loan Agreement as and when the same shall become due and payable in
accordance with the terms of this Mortgage, the Loan Agreement and all other such sums as
may hereafter become owing and payable to the Mortgagee or its successors or assigns and
secured by this Mortgage in accordance with the terms hereof, and shall perform, observe and
comply with the covenants, terms and conditions in this Mortgage, the Loan Agreement
contained, expressed or implied to be performed, observed or complied with by and on the
part of the Owner, then these presents and the rights hereunder shall cease, determine and
be void; otherwise to be and remain in full force and effect.
	 
	2.2	 	Extent of property mortgaged: IT IS NOT INTENDED that this Mortgage shall cover and this
Mortgage shall not cover, property other than the Vessel as term “Vessel” is used in Chapter 3
of Title 21 of Liberian Code of Laws Revised.
	 
	3.	 	PAYMENT COVENANTS 

	3.1	 	For the consideration aforesaid the Owner hereby covenants and undertakes with the Mortgagee:

	 	(a)	 	Covenant to repay the Loan: that the Loan will be repaid by the instalments at
the times and in the manner specified in Clause 4.1 of the Loan Agreement.
	 
	 	(b)	 	Covenant to pay interest on the Loan: that the Owner will pay, in accordance
with Clause 3.1 of the Loan Agreement, to the Mortgagee, interest on the Loan (or any
part thereof) calculated on the actual number of days elapsed and on the basis of a 360
day year for each Interest Period selected or determined as per Clause 3.2 and 3.3 of
the Loan Agreement relative thereto at the annual rate of interest (the “Interest
Rate”) which is conclusively (save for manifest error) certified by the Mortgagee to be
(subject to Clause 3.6 of the Loan Agreement), the aggregate of (i) the Margin and (ii)
the LIBOR.

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	 	(c)	 	Covenant to pay default interest: that in the event of any delay by the Owner
in the payment on the due date of any sum due under the Loan Agreement, this Mortgage
or any of the Security Documents the Owner shall, without affecting any other remedy of
the Mortgagee, pay in accordance with Clause 3.4 of the Loan Agreement on demand
interest on all sums overdue from the due date therefor to the date of actual payment
(as well as after as before judgement) accruing on a daily basis at the interest rate
set forth in Clause 3.4 of the Loan Agreement.
	 
	 	(d)	 	Covenant to pay other moneys: that the Owner will pay in full amount of any and
all other moneys comprising the Secured Indebtedness as and when the same shall become
due and payable in accordance with the terms of the Security Documents.
	 
	 	(e)	 	Indemnity: that the Owner will pay to and/or indemnify the Mortgagee for such
additional amounts as may be necessary in order that all payments under this Mortgage
after deduction of for or on account of every present or future tax assessment or
governmental charge imposed by any competent authority in any country to the revenue
laws of which the Owner may for the time be the subject shall be no less than such
payment would have been had there been no such tax assessment or charge;
	 
	 	(f)	 	Covenant to pay expenses etc: that the Owner will pay all such expenses,
liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this
Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee
(or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee)
at the time and in the manner specified in this Mortgage; and
	 
	 	(g)	 	Covenant to pay interest expenses etc: that the Owner will pay interest on any
such expenses, liabilities, losses, costs, duties, fees, charges or other moneys
referred to in Clause 3.1(f) from the date on which the relevant expense, liability,
loss, costs, duty, fee, charge or other money is paid or incurred by the Mortgagee
(both before and after any relevant judgement) at the rate described in Clause 3.1(c),
such interest to be payable on demand, Provided however that this provision
shall not affect the right of the Mortgagee to receive interest calculated at the rate
prescribed in Clause 3.1(c) from such date prior to demand being made as is provided
for by Clause 7.15, 7.17, 8.1, 10.1(g) and 10.1(h) hereof in relation to the matters
therein referred to.

	4.	 	PRESERVATION OF SECURITY AND CUMULATIVE REMEDIES
	 
	4.1	 	Continuing security:

It is declared and agreed that:

	 	(a)	 	the security created by this Mortgage and the other Security Documents shall be
held by the Mortgagee as a continuing security for the payment of the Secured
Indebtedness and the performance of all the obligations (express or implied) of the
Owner in the Security Documents contained;
	 
	 	(b)	 	the security so created shall not be satisfied by any intermediate payment or
satisfaction of any part of the amount hereby and thereby secured (or by any settlement
of accounts between the Owner or any other person who may be liable to the Mortgagee in
respect of the Secured Indebtedness or any part thereof and the Mortgagee);

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	 	(c)	 	the security so created shall be in addition to and shall not in any way
prejudice or affect and may be enforced by the Mortgagee without prior recourse to the
security created by any other of the Security Documents or by any deposit of documents,
or any guarantee, lien, bill, note, mortgage or other security now or hereafter held by
the Mortgagee, or any right or remedy of the Mortgagee thereunder and shall not in any
way be prejudiced or affected thereby or by the invalidity or unenforceability thereof,
or by the Mortgagee releasing, modifying or refraining from perfecting or enforcing any
of the same, or granting time or indulgence or compounding with any person liable;
	 
	 	(d)	 	all the rights, powers and remedies given to the Mortgagee hereunder shall be
in addition to and not a limitation of any and every other right, power or remedy
vested in the Mortgagee under the Loan Agreement, this Mortgage, the other Security
Documents or at law and that all the powers so vested in the Mortgagee may be exercised
from time to time and as often as the Mortgagee may deem expedient;
	 
	 	(e)	 	no failure, delay or omission on the part of the Mortgagee to exercise any
right, power or remedy vested in it under the Security Documents or any of them shall
impair such right, power or remedy or be construed as a waiver of or as acquiescence in
any default by the Owner and no express waiver given by the Mortgagee in relation to
any default by the Owner or breach by the Owner of any of its obligations under this
Mortgage shall prejudice the rights of the Mortgagee under this Mortgage arising from
any subsequent default or breach (whether or not such subsequent default or breach is
of a nature different from the previous default or breach) nor the discontinuance,
abandonment or adverse determination of any proceedings taken by the Mortgagee to
enforce any right, power or remedy preclude any other or further exercise thereof or
proceedings to enforce the same or the exercise of any other right, power or remedy nor
shall the giving by the Mortgagee of any consent to the doing of any act which by the
terms hereof requires the consent of the Mortgagee prejudice the right of the Mortgagee
to give or withhold as it thinks fit its consent to the doing of any other similar act;
	 
	 	(f)	 	the Mortgagee shall not be obliged to make any enquiry as to the nature or
sufficiency of any payment received by it hereunder or to make any claim or to take any
action to collect any moneys hereby assigned or to enforce any rights and benefits
hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled
hereunder;
	 
	 	(g)	 	the Mortgagee shall not be bound to enforce any of the other Security Documents
before enforcing the security created by the Mortgage; and
	 
	 	(h)	 	any waiver by the Mortgagee of any terms of this Mortgage or any consent given
by the Mortgagee under this Mortgage shall only be effective if given in writing and
then only for the purpose and upon the terms for which it is given.

	4.2	 	Waiver: The Owner waives any right it may have of first requiring the Mortgagee to proceed
against or claim payment from any other person or enforce any guarantee or security (whether
by the Owner or any other person) before enforcing this Mortgage.
	 
	4.3	 	Settlement or discharge conditional: Any settlement or discharge under this Mortgage between
the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee
by the Owner, any other Security Party or any other person being avoided or set- aside or
ordered to be refunded or reduced by virtue of any provision or enactment relating to
bankruptcy, insolvency or liquidation for the time being in force,

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	 	 	and if such condition is
not satisfied, the Mortgagee shall be entitled to recover from the Owner on demand the value
of such security or the amount of any such payment as if such settlement or discharge had not
occurred.

	4.4	 	Certificates conclusive: Any certificate submitted by the Mortgagee to the Owner as to the
amount owing in respect of the Secured Indebtedness or any part thereof or the Interest Rate
or the default interest rate shall (in the absence of manifest error) be conclusive and
binding on the Owner.
	 
	4.5	 	Owner to remain liable: The Owner shall remain liable to perform all the obligations assumed
by it in relation to the Vessel and the Mortgagee shall not be under any obligation of any
kind whatsoever in respect thereof or be under any liability whatsoever in event of any
failure by the Owner to perform its obligations in respect thereof.
	 
	4.6	 	Discharge of Mortgage: Upon the Mortgagee being satisfied that the Secured Indebtedness has
been unconditionally and irrevocably paid and discharged in full, and following a written
request therefor from the Owner, the Mortgagee will, subject to being indemnified to their
satisfaction for the costs and expenses incurred by the Mortgagee in connection therewith,
release the security created by this Mortgage.
	 
	5.	 	REPRESENTATIONS AND WARRANTIES
	 
	5.1	 	The Owner hereby represents and warrants to the Mortgagee that:

	 	(a)	 	it is a corporation duly organised and existing in good standing under the Laws
of the Republic of Liberia;
	 
	 	(b)	 	the Owner is the sole legal and beneficial owner of the whole of the Vessel and
neither the whole nor any part of the Vessel is subject to any Security Interest (save
as constituted by this Mortgage);
	 
	 	(c)	 	the Owner has power to own the Vessel and register the Vessel under the laws
and flag of the Republic of Liberia; and
	 
	 	(d)	 	this Mortgage is in accordance with the provisions of the Laws of Liberia.

	6.	 	INSURANCES
	 
	6.1	 	The Owner further covenants with the Mortgagee and undertakes throughout the Security Period:

	 	(a)	 	Insured risks, amounts and terms: to insure and keep the Vessel insured at the
expense of the Owner against: fire and usual marine risks (including excess
risks), war risks and protection and indemnity risks (without any exclusion for any
Environmental Incident) as more specifically provided for in the Loan Agreement; and
to indemnify the Mortgagee for any and all costs incurred by it (as conclusively
certified by the Mortgagee) in effecting and keeping effected (i) a Mortgagee’s
Interest Insurance which the Mortgagee may from time to time effect in respect of
the Vessel upon such terms as it shall deem desirable and in an amount of not less
than 110% of the Loan and (ii) (if the Mortgage so requires) a Mortgagee’s Interest
Additional Perils (Pollution) insurance policy, which the Mortgagee may at any time
effect on such terms, in an amount of not less than 110% of the Loan and with such
insurers as shall from time to time be determined by the Mortgagee and any other
insurance cover which the Mortgagee may from time to time effect in respect of the
Vessel and/or in respect of its interest or

10

 

	 	 	 	potential third party liability as
mortgagee of the Vessel as it shall deem desirable having regard to any limitations
in respect of amount or extent of cover which may from time to time be applicable to
any of the insurances referred to in this Clause 6.1(a);

	 	(b)	 	Approved brokers, insurers and associations: to effect the Insurances aforesaid
(i) in Dollars, (ii) in the case of the insurances against fire and usual marine risks
and war risks in amounts not less than such sum which is equal to the greater of (aa)
the Vessel’s full market value (determined pursuant to Sub-Clause 8.5(b) of the Loan
Agreement) and (bb) 125% of the Loan, (iii) in the case of oil pollution liability
risks currently included within the protection and indemnity risks in the maximum
amount available in the International Group of Protection & Indemnity Clubs from time
to time and without any exclusion of any Environmental Incident, (iv) and upon such
terms as shall from time to time be approved in writing by the Mortgagee, (v) through
such brokers (hereinafter, save as regards the brokers employed to effect the
mortgagee’s interest insurance, called “the Approved Brokers”) and with such insurance
companies and/or underwriters as shall from time to time be approved in writing by the
Mortgagee, provided that the Insurance in respect of war risks and protection and
indemnity risks may be effected by entry of the Vessel, on terms approved by the
Mortgagee in writing, in such war risks and protection and indemnity associations as
shall from time to time be approved in writing by the Mortgagee and (vi) if so required
by the Mortgagee (but without liability on the part of the Mortgagee for premiums or
calls) naming the Mortgagee as co-assured;
	 
	 	(c)	 	Fleet liens, set-off and cancellation: if any of the Insurances referred to in
Clause 6.1(a) form part of a fleet cover, to procure that the approved brokers shall
undertake to the Mortgagee that they shall neither set off against any claims in
respect of the Vessel any premiums due in respect of other vessels under such fleet
cover or any premiums due for other insurances, nor cancel the insurance for reason of
non-payment of premiums for other vessels under such fleet cover or of premiums for
such other insurances and shall undertake to issue a separate policy in respect of the
Vessel if and when so requested by the Mortgagee;
	 
	 	(d)	 	Renewal: at least fourteen (14) days before the expiry of any of the policies
or contracts for the said insurances to notify the Mortgagee in writing of the identity
of the brokers (or other insurers) and any protection and indemnity or war risks
association through or with whom the Owner proposes to renew the said insurances and at
least ten (10) days before the relevant policies or contracts expire to renew all such
insurances and upon the renewal of the said insurances to procure that the approved
brokers and/or the war risks and protection and
indemnity associations, with which any such renewal is effected, shall promptly
notify the Mortgagee in writing of the terms and conditions of such renewal;
	 
	 	(e)	 	Payment of premiums and calls: punctually to pay all premiums calls
contributions or other sums payable in respect of all such insurances and to produce
all relevant receipts when so required by the Mortgagee;
	 
	 	(f)	 	Guarantees: to arrange for the execution of such guarantees as may from time to
time be required by any protection and indemnity or war risks association;
	 
	 	(g)	 	Endorsement loss payable clauses: to procure that there are duly endorsed upon
all slips cover notes policies certificates of entry or other instruments of insurance
issued or to be issued in connection with the insurances aforesaid: the interest of

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	 	 	 	the Mortgagee by means of a Notice of Assignment (signed by the Assured) and/or a Loss
Payable Clause providing that unless and until any of the events specified in Clause 9
hereof shall happen and the Mortgagee shall give notice thereof to the insurers
(whereupon all insurance recoveries shall be receivable by the Mortgagee in accordance
with Clause 10.1(c) hereof) there shall be paid to the Mortgagee any and every sum
receivable in respect of a Total Loss and any and every sum receivable in respect of a
Major Casualty and all other sums receivable in respect of the Insurances shall be paid
to the Owner and a cancellation clause providing that the insurers undertake not to
exercise any right of cancellation which they may have by reason of non-payment of
premiums or calls when due without giving 14 days prior written notice of such
cancellation to the Mortgagee and an opportunity of paying any such unpaid premium or
call and a provision that the insurances will not be permitted to lapse or be
materially modified without 14 days’ prior written notice being given to the Mortgagee;
	 
	 	 	 	Provided However that unless and until any of the events specified in Clause
9 hereof shall happen (whereupon all insurance monies shall be applied in accordance
with Clause 11 hereof) the insurance monies received by the Mortgagee in respect of
any Major Casualty shall be paid over to the Assured upon the Assured furnishing
evidence that all loss and damage resulting from the casualty has been properly made
good and repaired and that all repair accounts and other liabilities whatsoever in
connection with the casualty have been fully paid and discharged by the Assured;
	 
	 	(h)	 	Hull policy documents, notices and brokers’ undertakings: to procure that all
such instruments of insurance as are referred to in Clause 6.1(g) above shall be
deposited with the approved brokers and/or insurance companies and that the approved
brokers and/or insurance companies shall (if so required by the Mortgagee) furnish the
Mortgagee with pro forma copies thereof and a letter or letters or undertaking in such
form as may be required by the Mortgagee, such letter or letters to include
undertakings by the approved brokers that:

	 	(i)	 	they will hold the said instruments of insurance, and the
benefit of the insurances thereunder, to be the order of the Mortgagee in
accordance with the terms of the loss payable clause referred to in Clause
6.1(g); and
	 
	 	(ii)	 	they will endorse on each and every policy as and when the same
is issued the loss payable clause and the notice of assignment referred to in
Clause 6.1(g); and
	 
	 	(iii)	 	they will advise immediately the Mortgagee of any material
changes which may be made to the terms of the said insurances and notify the
Mortgagee, not less than fourteen days prior to the expiry of the said
insurance, in the event of their not having received notice of renewal
instructions from the Owner and/or its agents and, in the event of their
receiving instructions to renew, they will advise the Mortgagee promptly of
the details thereof; and
	 
	 	(iv)	 	they will not set off against any sum recoverable in respect of
a claim against the Vessel under the said insurances any premiums or other
amounts due to the approved brokers or any other person in respect of any other
vessel nor cancel the said insurances by reason of non-payment of such premiums
or other amounts;

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	 	(i)	 	P&I: to procure that the protection and indemnity and/or war risks associations
wherein the Vessel is entered shall (if so required by the Mortgagee) furnish the
Mortgagee with a letter or letters of undertaking in such form as may be required by
the Mortgagee;
	 
	 	(j)	 	Employment: not to employ the Vessel or suffer the Vessel to be employed
otherwise than in conformity with the terms of the instruments of insurance aforesaid
(including any warranties express or implied therein) without first obtaining the
consent to such employment of the insurers and complying with such requirements as to
extra premium or otherwise as the insurers may prescribe;
	 
	 	(k)	 	Associations’ loss payable clauses, undertakings and certificates: to apply all
such sums as are received by it in respect of the Insurances for the purpose of making
good the loss and fully repairing all damage in respect whereof the insurance moneys
shall have been received;
	 
	 	(l)	 	Trading to USA: in the event of any trading of the Vessel to the United States
of America and the Exclusive Economic Zone (as defined in the said Oil Pollution Act of
1990), to procure and maintain a Certificate of Financial Responsibility as required by
the United States Oil Pollution Act of 1990 and make all such quarterly or other voyage
declarations as may from time to time be required by the protection and indemnity risks
association in order to maintain cover for trading to the United States of America and
Exclusive-Economic Zone and promptly deliver to the Mortgagee copies of all such
declarations;
	 
	 	(m)	 	Warranties: to comply with all warranties contained in the instruments of
insurance referred to in Clause 6.1(g) including, without limitation, warranties in
relation to the classification of the Vessel;
	 
	 	(n)	 	Independent report: to reimburse to the Mortgagee on demand any costs or
expenses incurred by the Mortgagee in obtaining reports from time to time from an
independent marine insurance broker as to the adequacy of the insurances effected or
proposed to be effected by the Owner pursuant to this Clause 6.1(a) and procure that
there is promptly delivered to such broker any and all such information in relation to
the said insurances as such broker may require;
	 
	 	(o)	 	Alterations: not to make any alteration in any of the terms of any of the
instruments of insurance referred to in Clause 6.1(g) which have been approved by the
Mortgagee and not to make, do, consent or agree to any act or omission which would or
might render any such instrument of insurance invalid, void, voidable or unenforceable
or render any sum payable thereunder repayable in whole or in part;
	 
	 	(p)	 	Total Loss claims: not without the prior written consent of the Mortgagee to
settle, compromise or abandon any claim under the said insurances for Total Loss or for
a Major Casualty;
	 
	 	(q)	 	Extent of cover and exclusions: to take all necessary action and comply with
all requirements which may from time to time be applicable to the Insurances
(including, without limitation, the making of all requisite declarations within any
prescribed time limits and the payment of any additional premiums or calls) so as to
ensure that the Insurances are not made subject to any exclusions or qualifications to
which the Mortgagee has not given its prior written consent and are otherwise
maintained on terms and conditions from time to time approved in writing by the
Mortgagee;

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	 	(r)	 	Correspondence with brokers and associations: to provide to the Mortgagee, at
the time of each such communication, copies of all written communications between the
Owner and the Approved Brokers and approved war risks and protection and indemnity
risks associations which relate to compliance with requirements from time to time
applicable to the Insurances including, without limitation, all requisite declarations
referred to in Clause 6.1(l); and
	 
	 	(s)	 	Collection of claims: to do all things necessary and provide all documents,
evidence and information to enable the Mortgagee to collect or recover any moneys which
shall at any time become due in respect of the Insurances.

	6.2	 	Review: The Mortgagee shall be entitled to review the requirements of Clause 6.1 from time to
time in order to take account of changes in circumstances after the date of this Mortgage
(such changes in circumstances to include, without limitation, changes in the vessel’s trading
patterns, changes in applicable law and changes in the price and availability of insurance
coverage). The Mortgagee may notify the Owner in writing from time to time of any
modification to the requirements of Clause 6.1 which the Mortgagee shall specify and any such
notification shall be binding on the Owner and shall take effect as an amendment to Clause
6.1.
	 
	7.	 	OWNER’S COVENANTS IN RESPECT OF THE VESSEL
	 
	 	 	The Owner covenants with the Mortgagee in respect of the Vessel:
	 
	7.1	 	Vessel’s name and registration: Not to change the Vessel’s name and/or the Owner’s name and
to arrange for the permanent registration of the Vessel under the Liberian flag within a
period of no less than three (3) months from the date hereof and thereafter and thereafter to
keep the Vessel permanently registered and matriculated as a Liberian flag Vessel at the Port
of Monrovia by paying all fees and expenses and filing or producing to the Public Registry and
the Shipping Bureau (and any other appropriate authorities) of the Republic of Liberia any and
all such documents or things as may be required for such purpose to keep the Vessel registered
and matriculated as a Liberian ship and to do or suffer to be done nothing whereby such
registration may be forfeited or imperiled and to procure that no attempts will be made to
abandon, delete or remove the Vessel from the said registry and/or enter the Vessel in a
special registry pursuant to charterparty arrangements or otherwise and/or change the Vessel’s
nationality without the consent of the Mortgagee and promptly furnish to the Mortgagee from
time to time such proofs as the Mortgagee may request for its satisfaction with respect to the
Owner’s compliance with the provisions of this Clause 7.1.
	 
	7.2	 	Modification: Not without the previous written consent of the Mortgagee to make any
modification of the Vessel which would involve material alterations of her structure type or
performance characteristics or materially reduce the value of the Vessel.
	 
	7.3	 	Maintenance of Class — Compliance with Regulations — Repairs — Removal of Parts: To keep the
Vessel or procure that the Vessel is kept, in a good and efficient state of repair so as to
maintain the highest availability class with a classification society which is member of IACS
acceptable in all respects by the Mortgagee and will continue at all times to maintain such
classification (or equivalent) with any other first-class classification society which is a
member of IACS and which is in all respects satisfactory to the Mortgagee, so as to comply
with the provisions of all laws regulations and requirements (statutory or otherwise) from
time to time applicable to vessels registered under the laws and flag of the Republic of
Liberia and to procure that all repairs to or replacement of any damaged worn or lost parts or
equipment be effected in such manner (both as regards workmanship and quality of materials) as
not to diminish the value of the

14

 

	 	 	Vessel and not to remove any material part of, or item of
equipment installed on, the Vessel 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 in favor of any person other than the
Mortgagee and becomes on installation on the Vessel, the property of the Owner and subject to
the security constituted by this Mortgage.

	7.4	 	Surveys: To submit the Vessel or procure that the Vessel be submitted, regularly to such
periodical or other surveys as may be required for classification purposes and if so required
to supply to the Mortgagee copies of all survey reports issued in respect thereof.
	 
	7.5	 	Inspection: To permit the Mortgagee by surveyors or other persons appointed by it in that
behalf to board the Vessel at all reasonable times for the purpose of inspecting her condition
or for the purpose of satisfying itself in regard to proposed or executed repairs and to
afford all proper facilities for such inspection.
	 
	7.6	 	Prevention of, and Release from, Arrest: To pay and discharge or procure the payment and
discharge of all debts damages and liabilities whatsoever which have given or may give rise to
maritime or possessory liens on or claims enforceable against the Vessel and in event of
arrest of the Vessel pursuant to legal process or in event of her detention in exercise or
purported exercise of any such lien as aforesaid to procure the release of the Vessel from
such arrest or detention forthwith upon receiving notice thereof by providing bail or
otherwise as the circumstances may require.
	 
	7.7	 	Employment: Not to employ the Vessel or suffer her employment in any trade or business which
is forbidden by International Law or is otherwise illicit or in carrying illicit or prohibited
goods or in any manner whatsoever which may render her liable to condemnation in a Prize Court
or to destruction seizure or confiscation and in event of hostilities in any part of the world
(whether war be declared or not) not to employ the Vessel or suffer her employment in carrying
any contraband goods or to enter or trade to or to continue to trade in any zone after it has
been declared a war zone by any Government or by the Vessel’s war risks Insurers unless the
Mortgagee shall have first given its consent thereto in writing and there shall have been
effected by the Owner and at its expense such special insurance cover as the Mortgagee may
require.
	 
	7.8	 	Information: Promptly to furnish to the Mortgagee all such information as it may from time to
time require regarding the Vessel her employment position and engagement particulars of all
towages .
	 
	7.9	 	Notification of Certain Events: To notify the Mortgagee forthwith by letter or in the case of
urgency by telegram or telex of:

	 	(a)	 	any accident to the Vessel involving repairs the cost whereof will or is likely
to exceed two hundred thousand United States Dollars (US$200,000) (or the equivalent in
any other currency), and
	 
	 	(b)	 	any occurrence in consequence whereof the Vessel has become or is likely to
become a Total Loss, and
	 
	 	(c)	 	any requirement or recommendation made by any insurer or classification society
or by any competent authority which is not immediately complied with, and
	 
	 	(d)	 	any arrest of the Vessel or the exercise or purported exercise of any lien on
the Vessel or her Earnings, and

15

 

	 	(e)	 	any petition or notice of meeting to consider any resolution to wind-up the
Owner (or any event analogous thereto under the laws of the place of its
incorporation);

	7.10	 	Payment of Outgoings and Evidence of Payments: Promptly to pay or procure the payment of, all
tolls due and other outgoings whatsoever in respect of the Vessel and to keep proper books of
account in respect of the Vessel and her Earnings and as and when the Mortgagee may so require
to make such books available for inspection on behalf of the Mortgagee and furnish
satisfactory evidence that the wages and allotments and the insurance and pension
contributions of the Master and crew are being regularly paid and that all deductions from
crew’s wages in respect of any tax liability are being properly accounted for and that the
Master has no claim for disbursements other than those incurred by him in the ordinary course
of trading.
	 
	7.11	 	Encumbrances: Not to mortgage charge or otherwise assign the Vessel nor her Insurances
Earnings or Requisition Compensation or to suffer the creation of any such mortgage charge or
assignment as aforesaid to or in favor of any person other than the Mortgagee.
	 
	7.12	 	Sale or other Disposal: Not without the previous consent in writing of the Mortgagee (and
then only subject to such terms as the Mortgagee may impose) to sell, agree to sell or
otherwise dispose of the Vessel or any share therein.
	 
	7.13	 	Repairer’s Liens: Not without the previous consent in writing of the Mortgagee to put the
Vessel into the possession of any person for the purpose of work being done upon her in an
amount exceeding or likely to exceed two hundred thousand dollars ($200,000) (or the
equivalent in any other currency) unless such person shall first have given to the Mortgagee
and in terms satisfactory to it a written undertaking not to exercise any lien on the Vessel
or her Earnings for the cost of such work or otherwise.
	 
	7.14	 	Maintenance and Protection of the Security: to pay to the Mortgagee on demand all moneys
whatsoever which the Mortgagee shall or may expend be put to or become liable for in or about
the protection maintenance or enforcement of the security created by this Mortgage or in or
about the exercise by the Mortgagee of any the powers vested in it under the Security
Documents and to pay interest thereon at the rate provided for Clause 3.1(c) hereof from the
date whereon such expense or liability was incurred by the Mortgagee until the date of actual
receipt (as well after as before any judgment).
	 
	7.15	 	Sharing of Earnings: Not without the previous consent in writing of the Mortgagee to enter
into any agreement or arrangement whereby the Earnings may be shared with any other person.
	 
	7.16	 	Investigation, legal expenses, etc.: To pay on demand to the Mortgagee (or as it may direct)
the amount of all investigation and legal expenses of any kind whatsoever stamp duties (if
any) registration fees and any other charges incurred by the Mortgagee in connection with the
preparation, completion and registration of the Security Documents or otherwise in connection
with the Secured Indebtedness and the security therefor and to pay interest thereon at the
rate prescribed in Clause 3.1(c) from the date whereon such expense or liability was incurred
by the Mortgagee, until the date of payment whether before or after any relevant judgement.
	 
	7.17	 	Manager: Not without the previous consent in writing of the Mortgagee (and then only on and
subject to such terms and conditions as the Mortgagee from time to time may agree) to appoint
a manager of the Vessel other than the Manager.

16

 

	7.18	 	Books of account: To keep proper books of account in respect of the Vessel and her Earnings
and as and when the Mortgagee may so require make such books available for inspection on
behalf of the Mortgagee and furnish satisfactory evidence that the wages and allotments and
the insurance and pension contributions of the Master and crew are being regularly paid and
that all deductions from crew’s wages in respect of tax and/or social security liability are
being properly accounted for and that the Master has no claim for disbursements other than
those incurred by him in the ordinary course of trading on the voyage then in progress.
	 
	7.19	 	Compliance with Environmental laws — Notification: The Owner further covenants with the
Mortgagee that throughout the Security Period the Owner will:

	 	(a)	 	comply, or procure compliance with, all Environmental Laws and Environmental
Approvals applicable to and relating to the Vessel, her operation or management and the
business of the Owner from time to time;
	 
	 	(b)	 	notify the Mortgagee forthwith upon:

	 	(i)	 	any Environmental Claim being or made against the Owner, the
Manager or otherwise in connection with the Vessel; or
	 
	 	(ii)	 	any Environmental Incident occurring.
	 
	 	(iii)	 	and keep the Mortgagee promptly advised, in writing on such
regular basis and in such detail as the Mortgagee shall require, of the Owner’s
response to such Environmental Claim or Environmental Incident.

	 	 	 	and keep the Mortgagee promptly advised, in writing on such regular basis and in
such detail as the Mortgagee shall require, of the Owner’s response to such
Environmental Claim or Environmental Incident.

	7.20	 	Compliance with the ISM Code: The Owner covenants to procure that any Operator will:

	 	(a)	 	comply with and ensure that the Vessel and any Operator always 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 Mortgagee if there is any threatened or actual
withdrawal of the Owner’s or any Operator’s or DOC or the SMC in respect of the Vessel;
and
	 
	 	(c)	 	promptly inform the Mortgagee upon the issue to the Owner or any Operator of a
DOC and to the Vessel of an SMC or the receipt by the Owner or any Operator of
notification that its application for the same has been realised;

	7.21	 	Compliance with the ISPS Code: The Owner covenants to procure that the Owner or the Manager
will:

	 	(a)	 	maintain at all times a valid and current ISSC respect of the Vessel issued
under the ISPS Code;
	 
	 	(b)	 	immediately notify the Mortgagee in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of the
Vessel; and

17

 

	 	(c)	 	procure full current compliance of the Vessel at all times with the ISPS Code.

	7.22	 	Compliance with Liberian law etc.

	 	(a)	 	to cause this Mortgage to be recorded with the Deputy Commissioner for Maritime
Affairs of the Republic of Liberia as prescribed by Chapter 3 of Title 21 of Liberian
Code of Laws Revised and otherwise to comply with and satisfy all the requirements and
formalities established by the said Liberian Code of Laws and any other pertinent
legislation of the Republic of Liberia to perfect this Mortgage as a valid and
enforceable first and preferred lien upon the Ship and to furnish to the Mortgagee from
time to time such proofs as the Mortgagee may reasonably request for its satisfaction
with respect to the Owner’s compliance with the provisions of this clause 7.21(a); and
	 
	 	(b)	 	to comply, or procure compliance with all laws or official requirements
relating to the Ship, its ownership, operation and management or to the business of the
Owner;

	7.23	 	Notice of Mortgage: At all times to carry on board the Vessel a duly certified copy of this
Mortgage (which shall form a part of the Vessel’s documents) and to cause the same to be shown to
any person having business with the Vessel which might create or imply any commitment or
encumbrance whatsoever on the Vessel and to place and maintain in a conspicuous place in the
navigation room and in the cabin of the Captain of the Vessel a printed notice in the following
form:

“NOTICE OF SHIP MORTGAGE

	 	 	 	This Vessel is mortgaged by the Owner thereof ADVENTURE TWELVE S.A., of
Liberia with a First Preferred Ship Mortgage to FBB-FIRST BUSINES BANK S.A.
of Greece, under authority of Title 21 of Liberian Code of Laws Revised and
other pertinent legislation and pursuant also to the terms of the said
Mortgage, a certified copy of which is preserved with the Vessel’s papers.
Therefore, neither the Owner nor any Charterer nor the Master of this Vessel
nor any other person has any right power or authority to create, incur or
permit to be imposed upon this Vessel any lien whatsoever other than liens
commitments or encumbrances for crew’s wages and salvage.”

	8.	 	PROTECTION OF SECURITY
	 
	8.1	 	Mortgagee’s right to protect or maintain security: The Mortgagee shall without prejudice to
its other rights and powers hereunder be entitled (but not bound) at any time and so often as
may be necessary to take any such action as it may in its discretion think fit for the purpose
of protecting the security created by this Mortgage and the other Security Documents
(including, without limitation, such action as is referred to in Clause 8.2 and each and every
expense or liability or loss so incurred by the Mortgagee in or about the protection of the
security shall be repayable to it by the Owner on demand together with interest thereon at the
rate provided for in Clause 3.1(c) hereof from the date whereon such expense or liability or
loss was incurred by the Mortgagee until the date of actual receipt (as well after as before
any judgement).
	 
	8.2	 	Mortgagee’s right to insure, repair etc.: Without prejudice to the generality of the
foregoing:

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	 	(a)	 	in every case that the provisions of Clause 6.1 hereof or any of them shall not
be complied with the Mortgagee shall be at liberty to effect and hereafter to maintain
all such insurances upon the Vessel as in its discretion it may think fit;
	 
	 	(b)	 	in event that the provisions of Clause 7.4 and/or 7.5 hereof or any of them
shall not be complied with the Mortgagee shall be at liberty to arrange for the
carrying out of such repairs and/or surveys as it may deem expedient or necessary;
	 
	 	(c)	 	in event that the provisions of Clause 7.6 hereof or any of them shall not be
complied with the Mortgagee shall be at liberty to pay and discharge all such debts
damages and liabilities as are therein mentioned and/or to take any such measures as it
may deem expedient or necessary for the purpose of securing the release of the Vessel.

	9.	 	EVENTS OF DEFAULT
	 
	9.1	 	Events of Default: In case anyone or more of the following events (herein termed “Events of
Default”) shall have happened and shall not have been remedied:

	 	(a)	 	if an “Event of Default”, as such term is defined in the Loan Agreement, shall
have occurred and shall be continuing, including without limitation as to the
generality of the foregoing, if default shall be made by any party other than the
Mortgagee in the due and punctual payment of any amount due under the Loan Agreement
and/or performance and observance of any of the term or covenants contained in the Loan
Agreement or in any collateral securing the Secured Indebtedness; or
	 
	 	(b)	 	if the Vessel shall be laid-up or shall become a Total Loss or suffers damage
or is involved in an incident which in the reasonable opinion of the Mortgagee may
result in the Vessel being subsequently determined to be a Total Loss and the insurance
indemnity is not paid by the insurers to the Mortgagee under the General Assignment
within a period of one hundred and eighty (180) days from the date of the occurrence of
the Total Loss or the incident which may result in the Vessel being subsequently
determined to be a Total Loss occurred, or if the Vessel is destroyed, abandoned,
captured, confiscated or forfeited and the Owner shall fail to procure the release
(where relevant) of the Vessel within a period of thirty (30) days thereafter; or
	 
	 	(c)	 	if any charter, legally assigned to the Mortgagee, shall be for any reason
whatsoever and by any of the parties thereto prematurely terminated or interrupted or
otherwise cancelled or repudiated or frustrated and is not substituted within a
reasonable time period by another charter party acceptable to the Mortgagee; or
	 
	 	(d)	 	default shall be made in the due and punctual observance and performance of any
of the provisions Clauses 6.1, 7.1, 7.6, 7.7, 7.11, 7.12, 7.13, 7.15, 7.17 and 7.18
hereof; or
	 
	 	(e)	 	default by the Owner in the observance and performance of any other agreement
under this Mortgage which shall remain unremedied for ten (10) days after written
notice thereof shall have been given to the Owner by the Mortgagee.
	 
	 	(f)	 	any other event or events (whether related or not) occurs (including, without
limitation, a material (in the opinion of the Mortgagee) adverse change, from the
position applicable as at the date of the Loan Agreement, in the business, affairs

19

 

	 		 	or condition (financial or otherwise) of the Owner) (including any such change resulting
from an Environmental Incident) the effect of which is, in the opinion of the
Mortgagee, to impair, delay or prevent the due fulfillment by the Owner or of any of
its obligations or undertakings contained in the Loan Agreement or any of other the
Security Documents.

	9.2	 	Indemnity: Without Prejudice to the Mortgagee’s rights under this Clause 9 or otherwise, on
the occurrence of an Event of Default hereunder the Owner shall indemnify the Mortgagee
against any loss, costs or expenses (and value added tax thereon) which the Mortgagee sustains
or incurs as a consequence of any default in payment of the principal of or interest on the
Loan or any other amount payable under this Clause 9, including (but not limited to) any
legal expenses and any loss, premium or penalties incurred or to be incurred by the Mortgagee
on account of funds borrowed in order to make, fund or maintain the Loan (as certified by the
Mortgagee, such certificate to be conclusive and binding on the Owner in the absence of
manifest error).
	 
	10.	 	MORTGAGEE’S POWERS ON EVENT OF DEFAULT 
	 
	10.1	 	Right to enforce security, to take possession, sell etc: Upon the happening of any of the
Events of Default described in Clause 9.1, the security created by this Mortgage shall become
immediately enforceable and the Secured Indebtedness shall become immediately due and payable
to the Mortgagee (whether or not the Mortgagee shall have given any notice to the Owner, and
without being necessary to obtain a judgement or Court’s Order or make any declaration in any
competent jurisdiction that an Event of Default has occurred) and the Mortgagee shall become
forthwith entitled as and when it may see fit to put into force and exercise all or any of the
rights, powers and remedies possessed by it as mortgagee of the Vessel or otherwise (under
law, by virtue of this Mortgage or otherwise) and in particular (but without limitation):

	 	(a)	 	to take possession of the Vessel (whether actually or constructively) and/or
otherwise to take control of the Vessel, wherever the Vessel may be, without legal
process and without any liability on the Mortgagee for any losses or damages incurred
thereby and without having to render accounts to the Owner in connection therewith and
the Owner shall forthwith upon being required to do so surrender possession and control
of the Vessel to the Mortgagee at its own cost and expense whereupon (inter alia) the
Master, officers and crew shall comply with the instructions given from time to time or
on behalf of the Mortgagee;
	 
	 	(b)	 	to require that all policies contracts and other records relating to the
Insurances (including details of and correspondence concerning outstanding claims) be
forthwith delivered to such adjusters and/or brokers and/or other insurers as the
Mortgagee may nominate;
	 
	 	(c)	 	to collect, recover, compromise and give a good discharge for any and all
moneys or claims of moneys then outstanding or thereafter arising under the Insurances
or any of them or in respect of the Earnings or any Requisition Compensation and to
permit the brokers through whom collection or recovery is effected to charge the usual
brokerage therefor;
	 
	 	(d)	 	to take over or institute (if necessary using the name of the Owner) all such
proceedings in connection of the Vessel, the Insurances, the Earnings or any
Requisition Compensation as the Mortgagee in its absolute discretion thinks fit and to
discharge compound release or compromise claims against the Owner in respect of the
Vessel which have given or may give rise to any charge or lien on the Vessel or which
are or may be enforceable by proceedings against the Vessel;

20

 

	 	(e)	 	to sell the Vessel or any share therein (after twenty calendar days prior
notice to the Owner and other mortgagees of record (if any) or such lesser period of
notice (or no notice at all) as may be permitted under Liberian law from time to time)
and with or without the benefit of any charterparty by public auction or private
contract at such place and upon such terms as the Mortgagee in its absolute discretion
may determine with power to postpone any such sale and without being answerable for any
loss occasioned by such sale or resulting from postponement thereof and/or itself to
purchase the Vessel at public auction and to set-off the purchase price against all or
any part of the Secured Indebtedness;
	 
	 	(f)	 	to manage, insure, maintain and repair the Vessel and to employ or lay up the
Vessel in such manner and for such period as the Mortgagee in its absolute discretion
deems expedient and for the purposes aforesaid the Mortgagee shall be entitled to do
all acts and things incidental or conductive thereto and in particular to enter into
such arrangements respecting the Vessel her insurance management maintenance repair
classification and employment in all respects as if the Mortgagee was the Owner of the
Vessel and without being responsible for any loss thereby incurred;
	 
	 	(g)	 	to recover from the Owner on demand any such expenses, liabilities or losses as
may be incurred by the Mortgagee in or about the exercise of the power vested in the
Mortgagee under sub-clause (f) above with interest thereon at the rate provided for in
Clause 3.1(c) hereof from the date when such expenses, liabilities or losses were
incurred by the Mortgagee until the date of payment or judgement; and
	 
	 	(h)	 	to recover from the Owner on demand all expenses payment and disbursements
incurred by the Mortgagee in or about or incidental to the exercise by it of any of the
powers aforesaid together with interest thereon at the rate provided for in Clause
3.1(c) hereof from the date when such expenses payments or disbursements were incurred
by the Mortgagee until the date of actual receipt (as well after as before any
judgement).
	 
	 	(i)	 	to exercise all the rights and remedies in foreclosure and otherwise given to
mortgagees by the provisions of Chapter 3 of Title 21 of Liberian Code of Laws Revised
and all applicable laws of any other jurisdiction;

	10.2	 	Right to discharge cargo etc.: The Mortgagee shall be entitled to do all acts and things
incidental or conducive to the exercise of any of the rights, powers or remedies possessed by
it as mortgagee of the Vessel (whether at law, under this Mortgage or otherwise) and in
particular (but without prejudice to the generality of the foregoing), upon becoming entitled
to exercise any of its powers under Clause 10.1, the Mortgagee shall be entitled to discharge
any cargo on board the Vessel (whether the same shall belong to the Owner or any other person)
and to enter into such other arrangements in respect of the Vessel, her insurances,
management, maintenance, repair, classification and employment in all respects as if the
Mortgagee was the owner of the Vessel, but without being responsible for any loss incurred as
a result of the Mortgagee doing or omitting to do any such acts or things as aforesaid.
	 
	10.3	 	No liability in respect of expenses etc.: Neither the Mortgagee nor its agents, managers,
officers, employees, delegates and advisers shall be liable for any expense, claim, liability,
loss, cost, damage or expense incurred or arising in connection with the exercise or purported
exercise of any rights, powers and discretions under this Mortgage in the absence of gross
negligence or wilful misconduct.

21

 

	10.4	 	No liability as mortgagee-in-possession: The Mortgagee shall not, by reason of the taking
possession of the Vessel, be liable to account as mortgagee-in-possession in respect of all or
any of the Mortgaged Property or for anything except actual receipts or be liable for any loss
upon realisation or for any default or omission of any nature whatsoever in connection
therewith for which a mortgagee-in-possession might be liable as such.
	 
	10.5	 	Sale of Vessel: Upon any sale of the Vessel or any share therein by the Mortgagee pursuant
to sub-clause 10.1(e) above the purchaser shall not be bound to see or enquire whether the
Mortgagee’s power of sale has become exercisable in the manner herein provided and the sale
shall be deemed to be within the power of the Mortgagee, notwithstanding the observance or not
by the Mortgagee of the terms and conditions therefor which are set forth herein and the
receipt of the Mortgagee for the purchase money shall effectively discharge the purchaser who
shall not be concerned with the manner of application of the proceeds of sale or be in any way
answerable therefor and the sale shall operate to divest the Owner of all rights, title and
interest of any nature whatsoever in the Vessel and to bar any such interest of the Owner and
all persons claiming through, by or under the Owner.
	 
	11.	 	APPLICATION OF MONIES 
	 
	11.1	 	General: All monies received by the Mortgagee:

	 	(a)	 	in respect of a sale of the Vessel or any share therein;
	 
	 	(b)	 	in respect of recovery under the Insurances;
	 
	 	(c)	 	in respect of Requisition Compensation;
	 
	 	(d)	 	in respect of net profits arising out of the employment of the Vessel pursuant
to Clause 10.1(f); and
	 
	 	(e)	 	in respect of any other transaction or arrangement under Clause 10.1,

	 	 	shall be held by it upon trust in the first place to pay or retain all such payments
disbursements expenses and losses whatsoever (together with interest payable thereon under
Clause 3.1(c)) as may have been incurred by the Mortgagee in or about or
incidental to the exercise by the Mortgagee of the powers specified or otherwise referred to
in Clauses 8 and 10 hereof or any of them and the balance shall be applied in the following
manner:
	 
	 	 	FIRST: in or towards satisfaction of any amounts in respect of the balance of the
Secured Indebtedness as are then accrued due and payable or are then due and payable by
virtue of payment demanded, in such order of application as the Mortgagee shall think fit;
	 
	 	 	SECOND: in retention of an amount equal to any part or parts of the Secured
Indebtedness as is or are not then due and payable but which (in the sole and absolute
opinion of the Mortgagee) will or may become due and payable in the future and, upon the
same becoming due and payable, in or towards satisfaction thereof in the manner specified in
Clause 11.3 of the Loan Agreement;
	 
	 	 	THIRD: the surplus (if any) shall be paid to the Owner or to whomsoever else may be
entitled thereto.

22

 

	 	 	Provided always that in the event that such balance is insufficient to pay in full
the whole of the Secured Indebtedness the Mortgagee shall be entitled to collect the
shortfall from the Owner or any other person liable therefor.
	 
	 	 	Notwithstanding the foregoing, the Mortgagee may, at its absolute discretion, apply such
monies on its own books of account in any order or priority among paragraphs FIRST, SECOND
and THIRD above without affecting the obligations of the Owner to the Mortgagee.

	12.	 	DELEGATION
	 
	12.1	 	The Mortgagee shall be entitled at any time and as often as may be expedient to delegate by
power of attorney or in any other manner to any person or persons all or any of the powers,
authorities and discretions which are for the time being exercisable by the Mortgagee under
this Mortgage (including the powers vested in it by virtue of Clause 14 hereof). Any such
delegation may be made upon such terms and subject to such regulations as the Mortgagee may
think fit. The Mortgagee shall not be in any way liable or responsible to the Owner for any
loss or damage arising from any act, default, omission or misconduct on the part of any such
delegate.
	 
	13.	 	INDEMNITIES
	 
	13.1	 	General: The Owner will indemnify and save harmless the Mortgagee and each agent or attorney
appointed under or pursuant to this Mortgage from and against any and all expenses, claims,
liabilities, losses, taxes, costs, duties, fees and charges suffered, incurred or made by the
Mortgagee or such agent or attorney:

	 	(a)	 	in the exercise or purported exercise of any rights, powers or discretions
vested in them pursuant to this Mortgage; or
	 
	 	(b)	 	in the preservation or enforcement of the Mortgagee’s rights under this
Mortgage; or
	 
	 	(c)	 	on the release of the Vessel or any share therein from the security created by
this Mortgage,

	 	 	and the Mortgagee and each such agent or attorney may retain and pay all sums in respect of
the same out of money received under the powers conferred by this Mortgage. All
such amounts recoverable by the Mortgagee or such agent or attorney shall be recoverable on
a full indemnity basis.
	 
	13.2	 	Currency indemnity: If any sum due from the Owner under or in connection with the Loan
Agreement, this Mortgage or under any order or judgement given or made in relation to the Loan
Agreement and this Mortgage (or either of them) has to be converted from the currency (the
“first currency”) in which the same is payable under the Loan Agreement and this Mortgage (or
either of them) or under such order or judgement into another currency (“the second currency”)
for the purpose of (a) making or filing a claim or proof against the Owner, (b) obtaining an
order or judgement in any court or other tribunal, or (c) enforcing any order or judgement
given or made in relation to the Loan Agreement and this Mortgage (or either of them), the
Owner shall indemnify and hold harmless the Mortgagee from and against any loss or damage
suffered as a result of any discrepancy between (i) the rate of exchange used for such purpose
to convert the sum in question from the first currency into the second currency and (ii) the
rate or rates of exchange at which the Mortgagee may in the ordinary course of business
purchase the

23

 

	 	 	first currency with the second currency upon receipt of a sum paid to them in or
towards satisfaction of any such order, judgement, claim or proof.

	13.3	 	Continuation: The indemnity contained in this Clause 13 shall apply irrespective of any
indulgence granted to the Owner from time to time and shall continue in full force and effect
notwithstanding any payment in favour of the Mortgagee and any amount due from the Owner under
this Clause 13 will 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 the Loan Agreement and this Mortgage
(or either of them).
	 
	14.	 	POWER OF ATTORNEY
	 
	14.1	 	Appointment: The Owner, by way of security and in order more fully to secure the performance
of the Owner’s obligations under this Mortgage, HEREBY IRREVOCABLY APPOINTS (such appointment
being coupled with an interest of the Mortgagee) the Mortgagee as its attorney for the
duration of the Security Period for the purposes of:

	 	(a)	 	doing in its name all acts and executing, signing and (if required) registering
in its name all documents which the Owner itself could do, execute, sign or register in
relation to the Vessel (including without limitation, transferring title to the Vessel
to a third party (after prior notice of at least 20 calendar days to the Owner) (or
such lesser period of notice (or no notice at all) as may be permitted under Liberian
law from time to time)) Provided however that such power shall not be
exercisable by or on behalf of the Mortgagee until the Secured Indebtedness shall have
become repayable on demand (whether or not such demand shall have been made) under
Agreement and the security constituted by this Mortgage shall become enforceable
pursuant to Clause 10 hereof; and
	 
	 	(b)	 	executing, signing, perfecting, doing and (if required) registering every such
further assurance document, act or thing as is referred to in Clause 15.

	14.2	 	Exercise of power: The exercise of such power as is referred to in Clause 14.1 by or on
behalf of the Mortgagee shall not put any person dealing with the Mortgagee upon any enquiry
as to whether the Loan have become repayable on demand and/or by this Mortgage has become
enforceable nor shall such person be in any way affected by notice that such security has not
become repayable and/or this Mortgage has become enforceable and in relation to Clauses
14.1(a) and 14.1(b) the exercise by the Mortgagee of such power shall be conclusive evidence
of its rights to exercise the same.
	 
	14.3	 	Ratification of actions of attorney: For the avoidance of doubt and without limiting the
generality of Clause 14.1, the Owner confirms that Clause 14.1 authorizes the Mortgagee to
execute on its behalf a document ratifying any transaction or action which the Mortgagee has
purported to enter into or to take and which the Mortgagee considers was or might have been
outside its powers or otherwise invalid.
	 
	14.4	 	Delegation. The Mortgagee may sub-delegate to any person or persons all or any of the powers
(including the discretions) conferred on the Mortgagee by Clauses 14.1 and/or 14.2, and may do
so on terms authorizing successive sub-delegations.
	 
	15.	 	FURTHER ASSURANCES
	 
	15.1	 	The Owner hereby further undertakes at its own expense to execute sign perfect do and (if
required) register every such further assurance document act or thing as in the opinion of the
Mortgagee may be necessary or desirable for the purpose of more effectual mortgaging and
charging the Vessel or perfecting the security constituted or intended to

24

 

	 	 	be constituted by this Mortgage or contemplated by the Loan Agreement or ensuring that the security constituted
by this Mortgage and the covenants and obligations of the Owner under this Mortgage shall
inure to the benefit of any such assignee of the Mortgagee as is referred to in Clause 23.2.

	16.	 	EXPENSES
	 
	16.1	 	The Owner covenants that it will pay to the Mortgagee (or as it may direct) on demand the
amount of all investigation and legal fees, costs and expenses of any kind whatsoever
(inclusive of value added tax thereon) stamp duties (if any) registration fees and any other
charges and Taxes thereon incurred by the Mortgagee or for which the Mortgagee may become
liable in connection with: (a) the negotiation, preparation, completion and (if required)
registration of the Loan Agreement, this Mortgage and the other Security Documents and the
preserving or enforcing of, or attempting to preserve or enforce, the security created by this
Mortgage or otherwise in connection with the Secured Indebtedness and the security therefor;
and (b) any variation of, or amendment or supplement to, any of the terms of, or any consent
or waiver required from the Mortgagee in relation to, the Loan Agreement and the other
Security Documents (or any of them), and in each case, regardless of whether the same is
actually implemented, completed or granted as the case may be.
	 
	17.	 	MISCELLANEOUS
	 
	17.1	 	Invalidity: If any provision in this Mortgage be or becomes invalid or unenforceable under
any applicable law, the provisions thereof shall in all other respects remain in full force
and effect and the provision in question shall be ineffective to the extent (but only to the
extent) of its disconformity with the requirement of the applicable law and if it is competent
to the parties to waive any requirements which would otherwise operate as aforesaid those
requirements are hereby waived to the extent permitted by such law to the end that this
Mortgage shall be valid binding and enforceable in accordance with its terms.
	 
	17.2	 	Certificates conclusive: For the purposes of enforcement, the interest rate in respect of
each Interest Period, the default interest rate, the occurrence of an Event of Default and in
particular the failure of the Owner to pay any amount due when it was due and the amount at
any time due from the Owner under the Loan Agreement and this Mortgage shall be proven by a
certificate of the Mortgagee, which it is hereby agreed that it shall be conclusive and
binding upon the Owner (save for manifest error).
	 
	18.	 	PREFERRED STATUS
	 
	18.1	 	No provision in this Mortgage can be interpreted or construed as constituting a waiver of the
preferred status of this Mortgage and particularly in respect to the lien created hereby in
relation of the other liens under the laws of any applicable jurisdiction or forum anywhere
world-wide.
	 
	19.	 	SUNDRY PROVISIONS
	 
	19.1	 	The Loan Agreement, the form of which is attached hereto as Exhibit A, and all its terms,
conditions, representations, covenants, etc. form an integral part of this First Preferred
Ship Mortgage and in case of conflict or other discrepancy between the terms of the Loan
Agreement and the other terms of this Mortgage contract the terms of the Loan Agreement shall
have priority and prevail, Provided however, that the law applicable to this Mortgage shall be
solely that of the Republic of Liberia.

25

 

	19.2	 	Conflict: No failure or delay on the part of the Mortgagee in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial exercises thereof
or the exercise of any other right or power hereunder. No modification or waiver of any
provision of the Loan Agreement nor consent to any departure therefrom by any party thereof
shall in any event be effective unless the same shall be in writing and then such waiver or
consent shall be effective only on the specific instances and for the 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.
	 
	20.	 	TOTAL AMOUNT AND MATURITY
	 
	20.1	 	For the purpose of recording this First Preferred Mortgage as required by Chapter 3 of Title
21 of Liberian Code of Laws Revised, the total amount is United States Dollars twenty
seven million seven hundred and fifty thousand (US$27,750,000) plus interest on the
Loan and default interest, indemnities, damages, costs, commissions, expenses and expenses of
the Mortgagee and interest thereon and performance of the Loan Agreement and Mortgage
covenants. The date of maturity in respect of the Loan is the 16th December, 2016
and the discharge amount is the same as the total amount.
	 
	21.	 	COUNTERPARTS
	 
	21.1	 	This Mortgage may be executed in any number of counterparts each of which shall be an
original but such counterparts shall together constitute but one and the same instrument.
	 
	22.	 	NOTICES AND COMMUNICATIONS
	 
	22.1	 	The provisions of Clause 15.1 of the Loan Agreement shall (mutatis mutandis) apply in
relation to any notice, demand or other communication under this Mortgage.
	 
	23.	 	ASSIGNMENTS
	 
	23.1	 	Benefit: This Mortgage shall be binding upon and shall enure to the benefit of the Owner and
the Mortgagee and their respective successors and permitted assigns and references in this
Mortgage shall be construed accordingly, provided that the Owner may not assign or transfer
all or any part of its rights and/or obligations under this Mortgage.
	 
	23.2	 	Right to assign: The Mortgagee may assign or transfer all or any part of its respective
rights or obligations under this Mortgage to any other bank or financial institution of all
or a similar proportion of its respective rights and/or obligations under the Loan Agreement
without the consent of the Owner. The Mortgagee shall notify the Owner promptly following
any such assignment or transfer and the cost of any such assignment shall be borne by the
Mortgagee.
	 
	24.	 	APPLICABLE LAW AND JURISDICTION
	 
	24.1	 	Applicable law: This Mortgage shall be governed by and construed according to the laws of the
Republic of Liberia.
	 
	24.2	 	(a) Choice of forum: The Owner hereby irrevocably and unconditionally submits to the non
exclusive jurisdiction of the Courts of Piraeus and waives any objection to proceedings with
respect to this Mortgage in such Courts on the grounds of venue or convenience forum, and
further the Owner hereby appoints Mr. Ioannis Fassolis, an Attorney-at-Law, whose present
address is at 15 Sachtouri Street, 185 36, Piraeus, Greece (herein called the “Process Agent”)
as agent to accept service upon whom any judicial or extrajudicial process may be served
(including but

26

 

	 	 	 	without limitation any documents initiating legal proceedings) and any notice,
request, demand payment order, announcement of claim, any enforcement process or other
communication under this Mortgage. In the event that the Process Agent (or any substitute
process agent notified to the Mortgagee in accordance with the foregoing) cannot be found at
the address specified above (or, as the case may be, notified to the Mortgagee), which will be
conclusively proved by the affidavit of a process server to that effect, the authority of the
Process Agent as agent to accept service shall be deemed to have ceased and service of
documents may be effected in accordance with the procedure provided by the relevant provisions
on service of process provided by the Hellenic Procedural Code. In case, however, that such
Process Agent is found at any other address, the Mortgagee shall have the right to serve the
documents either on the Process Agent at such address or in accordance with the procedure
provided by the relevant law.
	 
	 	(b)	 	Mortgagee’s rights unaffected: Nothing in this Clause shall affect the
Mortgagee’s right to serve process in any other manner permitted by law or limit the
right of the Mortgagee to take proceedings with respect to this Mortgage in any
jurisdiction (including, without limitation, any jurisdiction where the Vessel may be
located) nor shall the taking of proceedings with respect to this Mortgage in any
jurisdiction preclude the Mortgagee from taking proceedings in any other jurisdiction
or jurisdictions, whether concurrently or not.
	 
	 	(c)	 	Proceedings in any other country: If it is decided by the Mortgagee that any
such proceedings should be commenced in any other country, then any objections as to
the jurisdiction or any claim as to the inconvenience of the forum are hereby waived by
the Owner and it is agreed and undertaken by the Owner to instruct lawyers in that
country to accept service of legal process and not to contest the validity of such
proceedings as far as the jurisdiction of the court or courts involved is concerned.

	24.3	 	Action against Ship: Without prejudice to the generality of Clause 24.2, the Mortgagee shall
have the right to arrest and take action against the Vessel at whatever place the Vessel shall
be found lying and for the purpose of any action which the Mortgagee may bring before the
Courts of such jurisdiction or other judicial authority and for the purpose of any action
which the Mortgagee may bring against the Vessel, any writ, notice, judgement or other legal
process or documents may (without prejudice to any other method of service under applicable
law) be served upon the Master of the Vessel (or upon anyone acting as her Master) and such
service shall be deemed good service on the Owner for all purposes.
	 
	24.4	 	Benefit of this Mortgage: All of the covenants, promises, stipulations and agreements of the
Owner in this Mortgage contained shall bind the Owner and its successors and assigns
and shall inure to the benefit of the Mortgagee and its successors and assigns. In the
event of any assignment of this Mortgage, the term “Mortgagee”, as used in this Mortgage,
shall be deemed to mean any such assignee.
	 
	24.5	 	Mortgagee’s actions: Wherever and whenever herein any right, power or authority is granted or
given to the Mortgagee, such right, power or authority may be exercised in all cases by the
Mortgagee or such agent or agents as it may appoint, and the act or acts of such agent or
agents when taken shall constitute the act of the Mortgagee hereunder.

IN WITNESS WHEREOF, the Owner has executed this Mortgage by its duly authorised Attorney the day
and year first above written.

	 	 	 
	SIGNED BY Mr Ioannis Fassolis
	 	)
	for and on behalf of
	 	)
	ADVENTURE TWELVE S.A.
	 	) /s/ Ioannis Fassolis
	of Liberia, as its duly authorised
	 	)
	Attorney-in-fact
	 	)
	in the presence of:
	 	)

27

 

 ACKNOWLEDGEMENT OF MORTGAGE 

	 	 	 
	CITY OF PIRAEUS
	 	)
	 
	 	-:s:
	REPUBLIC OF GREECE
	 	)

On this
16th day
of December, 2009, before me personally appeared Mr.
Ioannis Fassolis, to me known,
who being by me duly sworn, did depose and say that he resides at Piraeus, Greece, that he is the
Attorney-in-fact of ADVENTURE TWELVE S.A., of Liberia, the corporation described in and which
executed the foregoing First Preferred Ship Mortgage; and he signed his name thereto by order of
the Board of Directors of the said corporation.

[notary stamp]

/s/ Christina Kaisara

Christina Kaisara

28

 

ACCEPTANCE OF MORTGAGE

FBB — FIRST BUSINESS BANK S.A., a banking company duly incorporated under the laws of
Greece, having its registered office at 91 Michalakopoulou Street, 115 28 Athens, Greece acting for
the time being through its office at 62, Notara & Sotiros Dios Streets, 185 35 Piraeus, Greece,
Greece DO HEREBY ACCEPT the annexed First Preferred Ship Mortgage executed in their favour by
ADVENTURE TWELVE S.A., a corporation organised and existing under the laws of the Republic of
Liberia, on the 16th day of December, of the year two thousand nine (2009), whereby a
first preferred Liberian mortgage is granted on M/V “FREE NEPTUNE” and DO HEREBY ACCEPT the said
Mortgage in all respects and agree to all terms and conditions of the aforesaid mortgage.

IN WITNESS WHEREOF, the said FBB — FIRST BUSINESS BANK S.A. has caused this acceptance of
Mortgage to be executed this 16th day of December Two thousand nine (2009).

THE MORTGAGEE

FBB — FIRST BUSINESS BANK S.A.

	 	 	 	 	 
	 	 
	By:  	/s/ Nikolaos Vougioukas 
 	 
	 	Name:  	Nikolaos Vougioukas 	 
	 	Title:  	Attorney-in-fact 	 

29

 

	 	 	 	 	 

Exhibit “A”

Form of Loan Agreement

30exv4w63

Exhibit 4.63

Private and confidential

Dated: 16th December, 2009

ADVENTURE NINE S.A. 

(as owner)

and

FBB-FIRST BUSINESS BANK S.A. 

(as mortgagee)

 

DEED OF COVENANT

supplemental to a First Priority Statutory

Bahamian Ship Mortgage over

M/V “FREE IMPALA”

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	CLAUSE	 	HEADINGS	 	PAGE	 
	1.
	 	DEFINITIONS AND INTERPRETATION	 	 	2	 
	 
	 	 	 	 	 	 
	2.
	 	PAYMENT COVENANTS	 	 	7	 
	 
	 	 	 	 	 	 
	3.
	 	MORTGAGE	 	 	9	 
	 
	 	 	 	 	 	 
	4.
	 	PRESERVATION OF THE SECURITY - REMEDIES CUMULATIVE	 	 	9	 
	 
	 	 	 	 	 	 
	5.
	 	INSURANCES	 	 	11	 
	 
	 	 	 	 	 	 
	6.
	 	OWNER’S COVENANTS IN RESPECT OF THE SHIP	 	 	12	 
	 
	 	 	 	 	 	 
	7.
	 	PROTECTION OF THE SECURITY	 	 	17	 
	 
	 	 	 	 	 	 
	8.
	 	EVENTS OF DEFAULT	 	 	18	 
	 
	 	 	 	 	 	 
	9.
	 	ENFORCEABILITY AND POWERS OF THE MORTGAGEE	 	 	21	 
	 
	 	 	 	 	 	 
	10.
	 	APPLICATION OF MONIES	 	 	24	 
	 
	 	 	 	 	 	 
	11.
	 	DELEGATION	 	 	25	 
	 
	 	 	 	 	 	 
	12.
	 	INDEMNITIES	 	 	25	 
	 
	 	 	 	 	 	 
	13.
	 	POWER OF ATTORNEY	 	 	26	 
	 
	 	 	 	 	 	 
	14.
	 	FURTHER ASSURANCES	 	 	26	 
	 
	 	 	 	 	 	 
	15.
	 	EXPENSES	 	 	27	 
	 
	 	 	 	 	 	 
	16.
	 	NOTICES	 	 	27	 
	 
	 	 	 	 	 	 
	17.
	 	ASSIGNMENT	 	 	27	 
	 
	 	 	 	 	 	 
	18.
	 	REPRESENTATIONS AND WARRANTIES	 	 	27	 
	 
	 	 	 	 	 	 
	19.
	 	MISCELLANEOUS	 	 	28	 
	 
	 	 	 	 	 	 
	20.
	 	LAW AND JURISDICTION	 	 	28	 

 

 

DEED OF COVENANT

M/V “FREE IMPALA”

Under the Flag of the Commonwealth of the Bahamas

THIS DEED OF COVENANT is made this 16th day of December, 2009

B E T W E E N:

	(1)	 	ADVENTURE NINE S.A., a corporation incorporated and validly existing under the laws
of the Republic of the Marshall Islands and having its registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (hereinafter called
the “Owner”) (which expression shall include its successors and permitted assigns) and
	 
	(2)	 	FBB-FIRST BUSINESS BANK S.A., a bank incorporated in the Republic of Greece with its head
office at 91 Michalakopoulou Street, 11528 Athens, Greece, acting except otherwise herein
provided, through its office at 62, Notara and Sotiros Dios streets, 185 35 Piraeus, Greece
(hereinafter called the “Mortgagee” which expression shall include its successors and
assigns).

W H E R E A S:

	(A)	 	The Owner is the absolute and unencumbered legal and beneficial owner of the sixty-four
sixty-fourth shares of and in the motor vessel “FREE IMPALA” built by Shanghai Shipyard, in
1997, lawfully and permanently registered under Bahamas flag in the Ships’ Register of the
Port of Nassau and having Official No. 8000947, Call Sign C6UF9, IMO No.: 9138680, of 15888
gross tonnage and 8036 net tonnage, propelled by a diesel internal combustion engine of 6074
KW, together with all her boats, engines, machinery tackle outfit spare gear fuel consumable
and other stores belongings and appurtenances whether on board or ashore and whether now owned
or hereafter acquired and all the additions, improvements and replacements in or on the above
described ship (the said Ship together with all aforesaid is hereinafter called the “Ship”).
	 
	(B)	 	By a Loan Agreement dated 15th December, 2009 (hereinafter as the same may from
time to time be amended and/or supplemented called the “Loan Agreement”) entered into between
(A) the Mortgagee, as lender and (B) the following companies including the Owner, as joint and
several co-borrowers and co-debtors, i.e. ADVENTURE NINE S.A., of Marshall Islands and
ADVENTURE TWELVE S.A., of Liberia (therein collectively referred to as the “Borrowers”), the
Bank agreed, inter alia, to make available to the Borrowers on a joint and several basis and
upon the terms and conditions therein contained a secured term loan in the amount of up to
United States Dollars twenty seven million seven hundred and fifty thousand (US$27,750,000)
(the “Loan”) for the purposes referred to therein.
	 
	(C)	 	It is a condition precedent for the Mortgagee to advance the Loan to the Borrowers and to
maintain the Loan available to the Borrowers throughout the Security Period subject to the
terms of the Loan Agreement that the Owner as security for, inter alia, its obligations under
the said Loan Agreement shall execute, deliver and register a first priority Statutory
Mortgage in favour of the Mortgagee over sixty-four sixty-fourth shares in the Ship and shall
enter into a Deed of Covenant supplemental thereto in the form of this Deed and the

1

 

	 	 	Owner has agreed to execute the said Statutory Mortgage and this Deed in favour of the
Mortgagee in consideration of the foregoing.
	 
	(D)	 	There has contemporaneously with the execution of this Deed, been executed and delivered by
the Owner to the Mortgagee the said Statutory Mortgage in account current form constituting a
first mortgage of sixty-four sixty-fourth shares in the Ship.
	 
	(E)	 	This Deed is supplemental to the said Loan Agreement and the Statutory Mortgage aforesaid and
to the security thereby created.

NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED as follows:

	1.	 	DEFINITIONS AND INTERPRETATION

	1.1	 	In this Deed unless the context otherwise requires, the following expressions shall have the
following meaning:
	 
	 	 	“Account Current” means, as used in this Deed and in the Mortgage, an account which shall be
kept by the Owner with the Mortgagee and to which the Mortgagee, shall (without demand or
notice) debit the whole of the Secured indebtedness) and shall be deemed to include any and
all accounts whatsoever now or from time to time kept by the Owner with the Mortgagee;
	 
	 	 	“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the
ISM Code;
	 
	 	 	“Dollars” (and the sign “$”) means the legal currency, at any relevant time hereunder, of
the United States of America;
	 
	 	 	“Earnings” means all moneys whatsoever due or to become due to the Owner at any time during
the Security Period arising out of the use or operation of the Ship including (but without
prejudice to the generality of the foregoing) all freight hire and passage moneys, income
arising under pooling arrangements, compensation payable to the Owner in event of
requisition of the Ship for hire remuneration for salvage and towage services, demurrage and
detention moneys, contribution of any nature whatsoever in respect of general average and
damages for breach (or payments for variation or termination) of any charter or contract of
affreightment or other contract for the employment of the Ship; Provided, that if and so
long as the Ship may be used for the purpose of any pooling arrangement or joint venture
between the Owner and any other person or persons (the terms of which pooling arrangement or
joint venture shall be subject to the prior written approval of the Mortgagee), the term
“Earnings” shall be construed for the period during which the Ship is used for such purpose
as meaning that proportion of the net revenue from the relevant pooling or joint venture
agreement or agreements as is attributed to the Ship;
	 
	 	 	“Environmental Approvals” means any consent, authorisation, licence or approval of any
governmental or public body or authorities or courts applicable to the Ship or her operation
or the carriage of cargo and/or passengers thereon and/or provisions of goods and/or
services on the 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-

2

 

	 	 	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” means (i) any release of Material of Environmental Concern from the
Ship, (ii) any incident in which Material of Environmental Concern is released from a vessel
other than the Ship and which involves collision between the Ship and such other vessel or
some other incident of navigation or operation, in either case, where the Ship, the Owner or
the Manager are at fault or otherwise liable (in whole or in part) or (iii) any incident in
which Material of Environmental Concern is released from a vessel other than the Ship and
where the Ship is liable to be arrested as a result and/or where the Owner or the Manager
are at fault or otherwise liable;
	 
	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements whatsoever
relating to pollution or protection of the environment (including, without limitation, the
United States Oil Pollution Act of 1990 and any comparable laws of the individual States of
the United States of America) which are from time to time and at any relevant time
applicable to the Ship;
	 
	 	 	“Events of Default” means any of the events or circumstances described in Clauses 8.1 to 8.8
(incl.) hereof;
	 
	 	 	“Expenses” means the aggregate at any relevant time (to the extent that the same have not
been received or recovered by the Mortgagee or any Receiver) 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) suffered, incurred or paid by the Mortgagee or any Receiver in
connection with the exercise of powers referred to in or granted by the Mortgage or
this Deed or otherwise payable by the Owner in accordance with Clause 8 and Clause 12;
and
	 
	 	(b)	 	interest on all such losses, liabilities, costs charges, expenses, damages and
outgoings from the date on which the same were suffered, incurred or paid by the
Mortgagee or any Receiver until the date of receipt or recovery thereof (whether before
or after judgement) at a rate per annum calculated in accordance with Clause 2.3 hereof
(as conclusively certified by the Mortgagee or such Receiver, as the case may be);

	 	 	“General Assignment” means the Deed of Assignment bearing even date herewith whereby the
Owner has assigned to the Mortgagee the Earnings, the Insurances and any Requisition
Compensation of the Ship, as the same may from time to time thereafter be supplemented
and/or amended;
	 
	 	 	“Insurances” means all policies and contracts of insurance (which expression includes all
entries of the Ship in a protection and indemnity or war risks association) which are from
time to time taken out or entered into in respect of the Ship and her Earnings or otherwise
howsoever in connection with the Ship;

3

 

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

	 	 	 	“LIBOR” means in relation to any amount and for any period:

	 	(a)	 	the offered rate (if any) per annum for deposits in Dollars for
such amount and for such period which is the rate, for such period, appearing
on the relevant page of the Reuters Screen LIBOR01 at or about 11 a.m. London
time on the Quotation Date (or, if the Mortgagee 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 Mortgagee may
determine) (and, for the purposes of this Agreement, “Reuters Screen LIBOR01”
means the display designated as “LIBOR01” on the Reuters Service or such other
page as may replace LIBOR01 on that service for the purpose of displaying rates
comparable to that rate or on such other service as may be nominated by the
British Bankers’ Association as the information vendor for the purpose of
displaying the British Bankers’ Association Interest Settlement Rates for
Dollars); and
	 
	 	(b)	 	if on such date no such rate is so displayed, LIBOR for such
period shall be the rate determined by the Mortgagee in accordance with its
usual practices to obtain similar deposit(s) in Dollars on the basis of the
rates quoted by the Mortgagee as the Mortgagee’s offered rate for deposits in
Dollars in an amount approximately equal to the amount in relation to which
LIBOR is to be determined for a period equivalent to such period in the London
Interbank Market at or about 11:00 a.m. (London time) on the second Banking Day
before the first day of such period;

	 	 	“Loan” means the principal amount of Dollars twenty seven million seven hundred and fifty
thousand ($27,750,000) advanced or to be advanced by the Mortgagee to the Borrowers or, as
the context may require, the principal amount thereof outstanding at any relevant time under
the Loan Agreement;
	 
	 	 	“Loan Agreement” means the Loan Agreement mentioned in Recital (B) hereto as the same may
from time to time be amended or supplemented;
	 
	 	 	“Major casualty” means any casualty to the Ship in respect whereof the claim or the
aggregate of the claims against all insurers, before adjustment for any relevant franchise
or deductible, exceeds Dollars two hundred thousand ($200,000) or the equivalent thereof in
any other currency;
	 
	 	 	“Material of Environmental Concern” means and includes oil, oil products, pollutants,
contaminants, toxic substances, as defined in the United States Oil Pollution Act of 1990

4

 

	 	 	and all hazardous substances as defined in the United States Comprehensive Environmental
Response, Compensation and Liability Act 1988;
	 	 	“Mortgage” means the statutory mortgage mentioned in Recital (D) hereto;
	 
	 	 	“Mortgagee” includes its successors in title and assignees;
	 
	 	 	“Mortgaged Property” means:

	 	(a)	 	the Ship;
	 
	 	(b)	 	the Insurances and all benefits thereof (including claims of whatsoever nature
and return of premiums);
	 
	 	(c)	 	the Earnings;
	 
	 	(d)	 	Requisition Compensation;

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

	 	 	“person” includes any body of persons corporate or unincorporate;
	 
	 	 	“Receiver” means any receiver and/or manager appointed pursuant to Clause 8.2;
	 
	 	 	“Requisition Compensation” means all moneys or other compensation payable during the
Security Period by reason of requisition for title or other compulsory acquisition of the
Ship otherwise than by requisition for hire;
	 
	 	 	“Secured indebtedness” means the aggregate of (a) the Loan and interest thereon (and
interest on any unpaid interest thereon and on any other sums of money on which interest is
stated in the Loan Agreement to be payable), (b) all such expenses, claims, liabilities,
losses, costs, duties, fees, charges or other moneys as are stated in this Deed to be
payable by the Owner to or recoverable from the Owner by the Mortgagee or any Receiver (or
in respect of which the Owner agrees in this Deed to indemnify the Mortgagee or any
Receiver) whether actually or contingently, presently or in the future together with
interest thereon as provided in the Loan Agreement and this Deed and (c) all other sums of
money from time to time owing to the Mortgagee under the Security Documents or any of them
whether actually or contingently, presently or in the future;
	 
	 	 	“Security Documents” means the Loan Agreement, this Deed, the Mortgage, the General
Assignment and any other such document as may have been or may hereafter be executed by any
person as security for or as guarantee of the Secured Indebtedness or any part thereof as
the same may hereafter be supplemented and/or amended and any such other document as is
defined in the Loan Agreement as a Security Document;
	 
	 	 	“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;

5

 

	 	 	“Security Period” means the period commencing on the date hereof and terminating upon
discharge of the security created by the Security Documents by payment of all moneys payable
thereunder;
	 
	 	 	“Security Parties” means the Owner and any other party (other than the Mortgagee) to any of
the Security Documents or any such person as is defined in the Loan Agreement as a Security
Party and in singular means any of them;
	 
	 	 	“Ship” means the motor vessel “FREE IMPALA” described above in Recital (A) hereto;
	 
	 	 	“Total Loss” means:

	 	(a)	 	actual or constructive or compromised or arranged total loss of the Ship; or
	 
	 	(b)	 	requisition for title or other compulsory acquisition of the Ship otherwise
than by requisition for hire;
	 
	 	(c)	 	capture, seizure, arrest, detention or confiscation of the Ship by any
government or by persons acting or purporting to act on behalf of any government unless
the Ship be released from such seizure capture arrest or detention within one month
after the occurrence thereof.

	1.2	 	In Clause 5.1 hereof:

	 	(a)	 	“excess risks” means the proportion of claims for general average, salvage and
salvage charges not recoverable under the hull and machinery policies in respect of the
Ship in consequence of her insured value being less than the value at which the Ship is
assessed for the purpose of such claims;
	 
	 	(b)	 	“protection and indemnity risks” means the usual risks (including oil pollution
and freight, demurrage and defence cover) covered by a protection and indemnity
association which is a member of the International Group of P+I Clubs (including,
without limitation, 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 the Institute Amended Running Down Clause (1/10/71) or
(with respect to insurances commencing on or after (1/11/95)) the Institute Time
Clauses (1/11/95) which may be insured by entry with such association or any equivalent
provision); and
	 
	 	(c)	 	“war risks” includes the risk of war protection and indemnity, mines,
terrorism, blocking and trapping, missing vessel, confiscation and all risks excluded
by Clause 24 of the Institute Time Clauses (Hulls) (1/11/95).

	1.3	 	This Deed shall be read together with the Loan Agreement and the other Security Documents,
but in case of any conflict between the Loan Agreement and this Deed the provisions of the
Loan Agreement shall prevail.

6

 

	1.4	 	Notwithstanding that this Deed is supplemental to the Loan Agreement and the Mortgage it
shall continue in full force and effect after any discharge of the Mortgage until full
repayment of the Secured Indebtedness.

	1.5	 	In this Deed:

	 	(a)	 	Clause headings are inserted for convenience only and shall not affect the
construction of this Deed and, unless otherwise specified, all references to Clauses
are to clauses of this Deed;
	 
	 	(b)	 	unless the context otherwise requires, words denoting the singular number shall
include the plural and vice versa;
	 
	 	(c)	 	references to:

	 	(i)	 	persons include bodies corporate and unincorporate;
	 
	 	(ii)	 	assets include property, rights and assets of every
description;
	 
	 	(iii)	 	any document are to be construed as references to such
document as amended or supplemented from time to time;
	 
	 	(iv)	 	any enactment include re-enactments, amendments and extensions
thereof; and
	 
	 	(v)	 	“interest” means interest covenanted to be paid in accordance
with Clauses 2, 6.15, 6.17, 7.1 and 8.1(g) and (h) hereof.

	 	(d)	 	the expression “all sums for the time being owing to the Mortgagee” means the
whole of the Secured Indebtedness.

	1.6	 	Any expressions which are not defined herein shall have the meanings respectively assigned to
them in Clause 1.2 of the Loan Agreement.

	2.	 	PAYMENT COVENANTS
	 
	2.1	 	In consideration of the agreement of the Mortgagee to make available the Loan to the
Borrowers and to maintain available the Loan to the Borrowers throughout the Security Period
in accordance with the provisions of and subject to the terms and conditions of the Loan
Agreement, the Owner hereby covenants with the Mortgagee to repay the Loan by (a) twenty
eight (28) consecutive quarterly repayment instalments (the “Repayment Instalments”), each
to be repaid on each of the Repayment Dates so that the first be repaid three (3) months
from the Drawdown Date and each of the subsequent ones consecutively falling due for payment
on each of the dates falling three (3) months after the immediately preceding Repayment Date
with the last of such Repayment Instalments falling due for payment on the Final Maturity
Date and (b) a balloon instalment of Dollars five million six hundred fifty thousand
($5,650,000) (the “Balloon Instalment”) falling due for payment together with the last
(28th) Repayment Instalment on the Final Maturity Date; subject to the provisions
of the Loan Agreement, each Repayment Instalment shall be in amounts as follows:

	 	(i)	 	1st to 4th (both inclusive) of such Repayment Instalments
shall be in the amount of Dollars five hundred thousand ($500,000) each; and

7

 

	 	(ii)	 	5th to 28th (both inclusive) of such Repayment
Instalments shall be in the amount of Dollars eight hundred and thirty seven thousand
five hundred ($837,500) each;

	 	 	Provided that (a) if the last Repayment Date would otherwise fall after the Final
Maturity Date, the last Repayment Date shall be the Final Maturity Date, (b) in the event
that the Commitment is not drawn down in full, the amount of each of the Repayment
Instalments and the Balloon Instalment shall be proportionally reduced, (c) there shall be
no Repayment Dates after the Final Maturity Date and (d) on the Final Maturity Date the
Borrowers shall also pay to the Mortgagee any and all other moneys then due and payable
under this Agreement and the other Security Documents.
	 
	 	 	The Owner shall be entitled to prepay the Loan in whole or in part, subject to and in
accordance with Clause 4.2 of the Loan Agreement and the Loan or any part thereof may become
repayable or prepayable in accordance with Clauses 3.6, 4.3, 9.9, 12.1 and 12.2 of the Loan
Agreement.
	 
	2.2	 	The Owner will pay in accordance with Clause 3.1 of the Loan Agreement to the Mortgagee
interest on the Loan calculated on the actual number of days elapsed and on the basis of a 360
day year for each Interest Period relative thereto at the annual rate of interest which is
conclusively certified by the Mortgagee to be the aggregate of (i) on three percentage points
(3%) (the “Margin”) and (ii) LIBOR. Such interest shall be paid in arrears on the last day of
each Interest Period, provided that, in the case of an Interest Period during which one or
more Repayment Date(s) fall(s), interest accruing during such Interest Period shall be payable
on each such Repayment Date and on the last day of such Interest Period;
	 
	 	 	Provided however, that the rate of interest for the Loan or the method of
computation thereof may be varied in accordance with Clause 3.6 of the Loan Agreement; and
	 
	 	 	Provided always, that the actual method of calculating the Interest Rate payable in
respect of the Loan or any part thereof and the dates for the payment thereof shall be
governed by the relevant provisions of the Loan Agreement.
	 
	2.3	 	In the event of any delay by the Borrowers in the payment on the due date of any sum due
under the Loan Agreement or any of the Security Documents the Owner shall, without affecting
any other remedy of the Mortgagee, pay interest on all sums overdue from the due date therefor
to the date of actual payment (as well as after as before judgement) at the interest rate per
annum determined by the Mortgagee pursuant to Clause 3.4 of the Loan Agreement. The period
beginning on such due date and ending on such date of payment shall be divided into successive
periods of not more than six (6) months as selected by the Mortgagee 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 Mortgagee) 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 Mortgagee and each such day shall, for the purposes of the Loan Agreement
and this Deed, 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 Mortgagee at its
discretion including the amounts for which there is no default, even if the Mortgagee has not
(yet) exercised its rights pursuant to Clause 9.9 (b) of the Loan Agreement. If for the reasons
specified in Clause 3.6 of the Loan Agreement, the Mortgagee is unable to determine a rate
in accordance with the foregoing provisions of this Clause 2.3, interest on any sum 

8

 

	 	 	not paid
on its due date for payment shall be calculated at a rate determined by the Mortgagee to be
two per cent (2%) per annum above the aggregate of the Margin and costs of funds to the
Mortgagee as conclusively determined by the Mortgagee save for manifest error. Interest
payable by the Owner as aforesaid shall be compounded semi-annually and shall be payable on
demand.
	 
	 	 	Provided always that the actual method of calculating the Interest Rate in respect
of any sum or sums overdue and the dates for the payment thereof shall be governed by the
relevant provisions of the Loan Agreement.
	 
	2.4	 	The Owner will pay interest at a rate calculated in accordance with Clause 2.3 hereof (as if
the moneys payable hereunder were amounts payable under the Loan Agreement) on any moneys
which are by this Deed expressed to be payable on demand and which be not paid when demanded
from the date of demand until payment (before or after any relevant judgement) Provided
however, that this provision shall not affect the right of the Mortgagee to receive interest
calculated at the rate herein prescribed from such date prior to demand being made as is
provided for by Clauses 6.15 and 6.17, 7.1 and 8.1(g) and (h) hereof in relation to the
matters therein referred to.
	 
	2.5	 	The Owner will pay to and/or indemnify the Mortgagee for such additional amounts as may be
necessary in order that all payments under this Deed after deduction of for or on account of
every present or future tax assessment or governmental charge imposed by any competent
authority in any country to the revenue laws of which the Owner may for the time being be
subject shall be no less than such payments would have been had thereto been no such tax
assessment or charge.
	 
	2.6	 	The Owner will pay all such Expenses or other moneys as are stated in this Deed to be payable
by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the
Owner agrees in this Deed to indemnify the Mortgagee) at the time and in the manner specified
in this Deed.
	 
	2.7	 	The Owner will pay interest on any such Expenses or other moneys referred to in Clause 2.6
from the date on which the relevant expense, liability, loss, costs, duty, fee, charge or
other money is paid or incurred by the Mortgagee (both before and after any relevant
judgement) at the rate described in Clause 2.3, such interest to be payable on demand.
	 
	3.	 	MORTGAGE 
	 
	 	 	In pursuance of the Loan Agreement, in consideration of the premises and by way of security
for payment of the Secured Indebtedness THE OWNER WITH FULL TITLE GUARANTEE HEREBY MORTGAGES
AND CHARGES to and in favour of the Mortgagee all its interest present and future in the
Mortgaged Property and without prejudice to the generality of the foregoing HEREBY ASSIGNS
AND AGREES to assign to the Mortgagee the Earnings the Insurances and all benefits thereof
and any Requisition Compensation, PROVIDED HOWEVER that as to the payment and/or receipt
and/or the application of any amount payable to and/or received by the Mortgagee
in respect of the Earnings and/or the Insurances or any Requisition Compensation as well as
any other matter relevant thereto the provisions of the General Assignment shall apply.
	 
	4.	 	PRESERVATION OF THE SECURITY — REMEDIES CUMULATIVE

9

 

	4.1	 	It is declared and agreed that:

	 	(a)	 	the security created by this Deed and the other Security Documents shall be
held by the Mortgagee as a continuing security for the payment of the Secured
Indebtedness and the performance of all the obligations (express or implied) of the
Owner in the Security Documents contained; and
	 
	 	(b)	 	the security so created shall not be satisfied by any intermediate payment or
satisfaction of any part of the amount hereby and thereby secured (or by any settlement
of accounts between the Owner or any other person who may be liable to the Mortgagee in
respect of the Secured Indebtedness or any part thereof and the Mortgagee); and
	 
	 	(c)	 	the security so created shall be in addition to and shall not in any way
prejudice or affect and may be enforced by the Mortgagee without prior recourse to the
security created by any other of the Security Documents or by any deposit of documents,
or any guarantee, lien, bill, note, mortgage or other security now or hereafter held by
the Mortgagee, or any right or remedy of the Mortgagee thereunder and shall not in any
way be prejudiced or affected thereby or by the invalidity or unenforceability thereof,
or by the Mortgagee releasing, modifying or refraining from perfecting or enforcing any
of the same, or granting time or indulgence or compounding with any person liable; and
	 
	 	(d)	 	all the rights, powers and remedies given to the Mortgagee hereunder shall be
in addition to and not a limitation of any and every other right, power or remedy
vested in the Mortgagee under the Loan Agreement, this Deed, the other Security
Documents or at law and that all the powers so vested in the Mortgagee may be exercised
from time to time and as often as the Mortgagee may deem expedient; and
	 
	 	(e)	 	no failure, delay or omission on the part of the Mortgagee to exercise any
right, power or remedy vested in it under the Security Documents or any of them shall
impair such right, power or remedy or be construed as a waiver of or as acquiescence in
any default by the Owner and no express waiver given by the Mortgagee in relation to
any default by the Owner or breach by the Owner of any of its obligations under this
Deed shall prejudice the rights of the Mortgagee under the Mortgage and/or this Deed
arising from any subsequent default or breach (whether or not such subsequent default
or breach is of a nature different from the previous default or breach) nor the
discontinuance, abandonment or adverse determination of any proceedings taken by the
Mortgagee to enforce any right, power or remedy preclude any other or further exercise
thereof or proceedings to enforce the same or the exercise of any other right, power or
remedy nor shall the giving by the Mortgagee of any consent to the doing of any act
which by the terms hereof requires the consent of the Mortgagee prejudice the
right of the Mortgagee to give or withhold as it think fit its consent to the doing
of any other similar act; and
	 
	 	(f)	 	the Mortgagee shall not be obliged to make any enquiry as to the nature or
sufficiency of any payment received by it hereunder or to make any claim or to take any
action to collect any moneys hereby assigned or to enforce any rights 

10

 

	 	 	 	and benefits
hereby assigned to the Mortgagee or to which the Mortgagee may at any time be entitled
hereunder; and
	 
	 	(g)	 	the Mortgagee shall not be bound to enforce any of the other Security Documents
before enforcing the security created by the Mortgage and this Deed (or either of
them); and
	 
	 	(h)	 	any waiver by the Mortgagee of any terms of this Deed or any consent given by
the Mortgagee under this Deed shall only be effective if given in writing and then only
for the purpose and upon the terms for which it is given.

	4.2	 	Any settlement or discharge under the Mortgage and this Deed (or either of them) between the
Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by
the Owner or any other person being avoided or set aside or ordered to be refunded or reduced
by any provision or enactment relating to bankruptcy, insolvency, administration or
liquidation for the time being in force and, if such condition is not satisfied, the Mortgagee
shall be entitled to recover from the Owner on demand the value of such security or the amount
of any such payment as if such settlement or discharge had not occurred.
	 
	4.3	 	The Owner waives any right it may have of first requiring the Mortgagee to proceed against or
claim payment from any other person or enforce any guarantee or security (whether by the Owner
or any other person) before enforcing the Mortgage and this Deed.
	 
	4.4	 	Any moneys received, recovered or realised by the Mortgagee under the Mortgage and/or this
Deed or any of the other Security Documents to which the Owner is or is to be a party will be
applied in or towards the discharge of the Secured Indebtedness.
	 
	4.5	 	Upon the Mortgagee being satisfied that the Secured Indebtedness has been unconditionally and
irrevocably paid and discharged in full and following a written request therefore from the
Owner, the Mortgagee will, subject to being indemnified to its satisfaction for the costs and
expenses incurred by the Mortgagee in connection therewith, release the security created by
the Mortgage.
	 
	5.	 	INSURANCES
	 
	5.1	 	The Owner further covenants with the Mortgagee and undertakes throughout the Security Period:

	 	(a)	 	to insure and keep the Ship insured at no expense of the Mortgagee against (i)
fire and usual marine risks (including excess risks) (ii) war risks (including excess
risks) and (iii) protection and indemnity risks (including full insurance cover for oil
pollution risks in the maximum amount available within the protection and indemnity
risks) in accordance with Schedule 1 of the Loan Agreement;
	 
	 	(b)	 	to reimburse to the Mortgagee on the Mortgagee’s first demand from time to time
all costs and expenses incurred by the Mortgagee (as conclusively certified by the
Mortgagee) in effecting and keeping effected a Mortgagee’s Interest Insurance which the
Mortgagee may at any time effect for an amount of 110% of the Loan 

11

 

	 	 	 	upon such terms and
with such insurers as the Mortgagee shall, in its absolute discretion, consider
appropriate.

	5.2	 	The Mortgagee shall be entitled to review the requirements of Clause 5.1 from time to time in
order to take account of changes in circumstances after the date of this Deed (such changes in
circumstances to include, without limitation, changes in the ship’s trading patterns, changes
in applicable law and changes in the price and availability of insurance coverage). The
Mortgagee may notify the Owner in writing from time to time of any modification to the
requirements of Clause 5.1 which the Mortgagee shall specify and any such notification shall
be binding on the Owner and shall take effect as an amendment to Clause 5.1.
	 
	6.	 	OWNER’S COVENANTS IN RESPECT OF THE SHIP
	 
	 	 	The Owner further covenants with the Mortgagee that throughout the Security Period the Owner
will:
	 
	6.1	 	Ship’s name and registration
	 
	 	 	not (without the previous consent of the Mortgagee) to change the Ship’s name and/or the
Owner’s name and to keep the Ship registered as a Bahamian flag Ship at the Port of Nassau
and not to do or suffer to be done anything whereby such registration may be forfeited or
imperilled and to procure that no attempts will be made to abandon, delete or remove the
Ship from the said registry and/or enter the Ship in a special registry pursuant to
charterparty arrangements or otherwise and/or change the Ship’s nationality without the
consent of the Mortgagee and promptly furnish to the Mortgagee from time to time such proofs
as the Mortgagee may request for its satisfaction with respect to the Owner’s compliance
with the provisions of this sub-clause;
	 
	6.2	 	Modification
	 
	 	 	not without the previous consent in writing of the Mortgagee to make any further
modification to the Ship which would involve material alterations of her structure type or
performance characteristics other than in order to comply with any international convention
or other provisions applicable to the Ship to enable her to trade on a world-wide basis;
	 
	6.3	 	Maintenance of Class — Compliance with Regulations — Repairs — Removal of Parts
	 
	 	 	to keep the Ship or procure that the Ship is kept, in a good and efficient state of repair
consistent with first-class ship-ownership and management practice and so as to be classed
100A1 with the Bureau Veritas or to a similar standard with another classification society
of like standing and member of IACS to be specifically approved by the Mortgagee and to
maintain such class free of recommendations affecting class save those notified and approved
in writing by the Mortgagee and so as to comply with the provisions of the Merchant Shipping
Acts and all other laws, regulations and requirements (statutory or otherwise) from time to
time applicable to vessels registered
under the Bahamian flag and applicable to vessels of the same type of the Ship trading to
any jurisdiction to which the Ship may, subject to the provisions of this Deed, trade from
time to time and to procure that all repairs to or replacements of any damaged, worn or lost
parts or equipment be effected in such manner (both as regards workmanship and 

12

 

	 	 	quality of
materials) as not to diminish the value of the Ship and not to remove any material part of,
or item of equipment installed on, the Ship unless the part or item so removed is forthwith
replaced by a suitable part or item which is in the same condition as or better condition
than the part or item removed, is free from any Encumbrance in favour of any person other
than the Mortgagee and becomes on installation on the Ship, the property of the Owner and
subject to the security constituted by the Mortgage and this Deed;
	 
	6.4	 	Surveys
	 
	 	 	to submit the Ship regularly to such periodical or other surveys as may be required for
classification purposes and if so required to supply to the Mortgagee copies of all survey
reports issued in respect thereof;
	 
	6.5	 	Inspection
	 
	 	 	to permit the Mortgagee by surveyors or other persons appointed by the Mortgagee on its
behalf to board the Ship at all reasonable times and without interference for her trading
for the purpose of inspecting her condition or for the purpose of satisfying itself in
regard to proposed or executed repairs and to afford all proper facilities for such
inspection;
	 
	6.6	 	Prevention of, and Release from, Arrest
	 
	 	 	to pay and discharge or procure the payment and discharge of all debts damages and
liabilities whatsoever which have given or may give rise to maritime or possessory liens on
or claims enforceable against the Ship, unless contested in good faith, and in event of
arrest of the Ship pursuant to legal process or in event of her detention in exercise or
purported exercise of any such lien as aforesaid to procure the release of the Ship from
such arrest or detention forthwith upon receiving notice thereof by providing bail or
otherwise as the circumstances may require;
	 
	6.7	 	Employment
	 
	 	 	not to employ the Ship or suffer her employment in any trade or business which is forbidden
by International Law or is otherwise illicit or in carrying illicit or prohibited goods or
in any manner whatsoever which may render her liable to condemnation in a Prize Court or to
destruction seizure or confiscation and in event of hostilities in any part of the world
(whether war be declared or not) not to employ the Ship or suffer her employment in carrying
any contraband goods or to enter or trade to or to continue to trade in any zone after it
has been declared a war zone by any Government or by the Ship’s war risks Insurers unless
the Mortgagee shall have first given its consent thereto in writing and there shall have
been effected by the Owner and at its expense such special insurance cover as the Mortgagee
may require;
	 
	6.8	 	Information
	 
	 	 	promptly to furnish to the Mortgagee all such information as it may from time to time
reasonably require regarding the Ship her employment position and engagement particulars of
all towages and salvages and copies of all charters and other contracts for her employment
or otherwise howsoever concerning her;

13

 

	6.9	 	Notification of Certain Events
	 
	 	 	to notify the Mortgagee forthwith by letter or in the case of urgency by telegram or telex
of:

	 	(a)	 	any accident to the Ship involving repairs the cost whereof will or is likely
to exceed two hundred thousand Dollars ($200,000) (or the equivalent in any other
currency), and
	 
	 	(b)	 	any occurrence in consequence whereof the Ship has become or is likely to
become a Total Loss, and
	 
	 	(c)	 	any requirement or recommendation made by any insurer or classification society
affecting class or by any competent authority which is not immediately complied with,
and
	 
	 	(d)	 	any arrest of the Ship or the exercise or purported exercise of any lien on the
Ship or her Earnings, which is not lifted within five (5) working days, and
	 
	 	(e)	 	any petition or notice of meeting to consider any resolution to wind-up the
Owner (or any event analogous thereto under the laws of the place of its
incorporation); and
	 
	 	(f)	 	any intended dry-docking of the Ship; and
	 
	 	(g)	 	the occurrence of any Event of Default, which is continuing;

	6.10	 	Payment of Outgoings and Evidence of Payments
	 
	 	 	promptly to pay or procure the payment of, all tolls due and other outgoings whatsoever in
respect of the Ship and to keep proper books of account in respect of the Ship and her
Earnings and as and when the Mortgagee may so require to make such books available for
inspection on behalf of the Mortgagee and furnish satisfactory evidence that the wages and
allotments and the insurance and pension contributions of the Master and crew are being
regularly paid and that all deductions from crew’s wages in respect of any tax liability are
being properly accounted for and that the Master has no claim for disbursements other than
those incurred by him in the ordinary course of trading;
	 
	6.11	 	Encumbrances
	 
	 	 	not to create or to suffer the creation of any Encumbrance on or in respect of the Ship nor
other part of the Mortgaged Property in favour of any person other than the Mortgagee;
	 
	6.12	 	Sale or other Disposal
	 
	 	 	not without the previous consent in writing of the Mortgagee, which shall not be
unreasonably withheld (and then only subject to such terms as the Mortgagee may
impose) to sell, agree to sell or otherwise dispose of the Ship or any share or interest
therein;

14

 

	6.13	 	Chartering — Laid-up
	 
	 	 	not without the previous consent of the Mortgagee in writing (which shall not be
unreasonably withheld except in the case under (a) below which the Mortgagee shall have full
liberty to withhold):

	 	(a)	 	to let the Ship on demise charter for any period; or
	 
	 	(b)	 	to let the Ship by any time or consecutive voyage charter for a term which
exceeds or which by virtue of any optional extension therein contained is likely to
exceed twelve (12) months’ duration; or
	 
	 	(c)	 	to let the Ship on terms whereby more than two months’ hire is payable in
advance; or
	 
	 	(d)	 	to let the Ship otherwise than on an arms length basis; or
	 
	 	(e)	 	to de-activate or lay up the Ship;

	6.14	 	Repairer’s Liens
	 
	 	 	not without the previous consent in writing of the Mortgagee to put the Ship into the
possession of any person for the purpose of work being done upon her in an amount exceeding
or likely to exceed two hundred thousand Dollars ($200,000) (or the equivalent in any other
currency) unless (i) such person shall first have given to the Mortgagee and in terms
satisfactory to it a written undertaking not to exercise any lien on the Ship or her
Earnings for the cost of such work or otherwise or (ii) the previous written consent of the
Mortgagee shall have been obtained (which consent shall not be unreasonably withheld);
	 
	6.15	 	Maintenance and Protection of the Security
	 
	 	 	to pay to the Mortgagee on demand all moneys whatsoever which the Mortgagee shall or may
expend be put to or become liable for in or about the protection maintenance or enforcement
of the security created by the Mortgage and this Deed or in or about the exercise by the
Mortgagee of any of the powers vested in it under the Security Documents and to pay interest
thereon at the rate provided for in Clause 2.3;
	 
	6.16	 	Sharing of Earnings
	 
	 	 	not without the previous consent in writing of the Mortgagee to enter into any agreement or
arrangement whereby the Earnings may be shared with any other person;
	 
	6.17	 	Investigation, legal expenses, etc.
	 
	 	 	to pay on demand to the Mortgagee (or as it may direct) the amount of all investigation and
legal expenses of any kind whatsoever stamp duties (if any) registration fees and any other
charges incurred by the Mortgagee in connection with the preparation, completion and
registration of the Security Documents or otherwise in connection with the Secured
Indebtedness and the security therefor and if any such amount be not paid forthwith upon
demand being made to pay interest thereon at the rate prescribed in Clause 2.3 from the date
of demand until the date of payment whether before or after any relevant judgement;

15

 

	6.18	 	Manager
	 
	 	 	not without the previous consent in writing of the Mortgagee (such consent not to be
unreasonably withheld and then only on and subject to terms and conditions acceptable to the
Mortgagee) to appoint a manager of the Ship other than the Manager;
	 
	6.19	 	Conveyance
	 
	 	 	where the Ship is (or is to be) sold in exercise of any power contained in the Mortgage and
this Deed, to execute, forthwith upon request by the Mortgagee, such form of conveyance of
the Ship as the Mortgagee may require;
	 
	6.20	 	Compliance with Environmental Laws — Notification

	 	(a)	 	comply with, and procure that all Environmental Affiliates of the Owner comply
with, all Environmental Laws including without limitation, requirements relating to
manning and establishment of financial responsibility and to obtain and comply with,
and procure that all Environmental Affiliates of the Owner obtain and comply with, all
Environmental Approvals applicable to and relating to the Ship, her operation or
management and the business of the Owner from time to time;
	 
	 	(b)	 	notify the Mortgagee forthwith upon:

	 	(i)	 	any Environmental Claim being or made against the Owner, the
Manager or otherwise in connection with the Ship;
	 
	 	(ii)	 	any Environmental Incident occurring,

	 	 	 	and keep the Mortgagee promptly advised, in writing on such regular basis and in such detail
as the Mortgagee shall require, of the Owner’s response to such Environmental Claim or
Environmental Incident and on such regular basis and in such detail as the Mortgagee shall
require;

	6.21	 	Compliance with obligations
	 
	 	 	without prejudice to the provisions of Section 34 of the Merchant Shipping Act 1894, to
perform all the obligations assumed by the Owner in relation to the Ship without any
liability to the Mortgagee in the event of failure by the Owner to perform its obligations
in respect thereof;
	 
	6.22	 	Compliance with ISM Code
	 
	 	 	procure that the Manager and any Operator will:

	 	(a)	 	comply with and ensure that any Operator and the Manager and the Ship comply
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 Mortgagee if there is any threatened or actual
withdrawal of the Owner’s the Manager’s or an Operator’s or DOC or the SMC in respect
of the Ship; and

16

 

	 	(c)	 	promptly inform the Mortgagee upon the issue to the Owner, the Manager or any
Operator of a DOC and to the Ship of an SMC or the receipt by the Owner, the Manager or
any Operator of notification that its application for the same has been realised;

	6.23	 	Compliance with ISPS Code

	 	 	 	the Owner will procure that the Owner or any Operator will:

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

	6.24	 	Notice of Mortgage
	 
	 	 	to keep the Mortgage registered against the Ship as a valid first priority mortgage, to
carry on board the Ship a certified copy of the Mortgage and this Deed and (if this is
required by the laws of the Flag State) to place and maintain in a conspicuous place in the
navigation room and the Master’s cabin of the Ship a framed printed notice stating that the
Ship is mortgaged by the Owner to the Mortgagee.

	7.	 	PROTECTION OF THE SECURITY
	 
	7.1	 	The Mortgagee shall, without prejudice to its other rights and powers hereunder, be entitled
(but not bound) at any time and so often as may be necessary to take any such action as it may
in its discretion think fit for the purpose of protecting the security created by this Deed
and the other Security Documents and each and every expense or liability so incurred by the
Mortgagee in or about the protection of the security hereby and by the Mortgage constituted
shall be repayable to it by the Owner on demand together with interest thereon at the rate
provided for in Clause 2.3 from the date whereon such expense or liability was incurred by the
Mortgagee until the date of payment, whether before or after any relevant judgement.
	 
	7.2	 	Without prejudice to the generality of the foregoing:

	 	(a)	 	in the event that the Owner does not comply with the provisions of Clause 5.1
hereof or any of them the Mortgagee shall be at liberty to effect and thereafter to
maintain all such insurances upon the Ship as in its discretion it may think fit;
	 
	 	(b)	 	in event that the Owner does not comply with the provisions of Clause 6.3
and/or 6.4 hereof or any of them the Mortgagee shall be at liberty to arrange for the
carrying out of such repairs and/or surveys as it may deem expedient or necessary;
and
	 
	 	(c)	 	in event that the Owner does not comply with the provisions of Clause 6.6
hereof or any of them the Mortgagee shall be at liberty to pay and discharge all such
debts damages and liabilities as are therein mentioned and/or to take any such 

17

 

	 	 	 	measures
as it may deem expedient or necessary for the purpose of securing the release of the
Ship.

	8.	 	EVENTS OF DEFAULT
	 
	 	 	There shall be an Event of Default whenever an event occurs described in Clauses 8.1 to 8.8:
	 
	8.1	 	Non Performance of Obligations

	 	(a)	 	the Owner or any other Security Party fails to pay any sum due from the Owner
or, as the case may be such Security Party, under the Loan 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)	 	failure by the Owner to observe and perform any one or more of the covenants,
terms or obligations contained in the Loan Agreement, the Mortgage, this Deed and/or
any other Security Document relating to the Insurances; or
	 
	 	(c)	 	any breach by the Owner of or omission of the Owner to observe any of the
covenants, terms, obligations or undertakings under the Loan Agreement, the Mortgage,
this Deed 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 reasonable opinion of the Mortgagee is capable
of remedy, such action as the Mortgagee may require shall not have been taken within
ten (10) days of the Mortgagee notifying the Owner of such required action to remedy
the breach or omission); or
	 
	 	(d)	 	the Owner or any other Security Party fails to observe and perform any one or
more of the covenants, terms or obligations contained in the Loan Agreement and/or any
other Security Document relating to the Insurances; or

	8.2	 	Events affecting the Owner

	 	(a)	 	the Owner is adjudicated or found bankrupt or insolvent or any order is made by
any competent court or resolution passed by the Owner or petition presented for the
winding-up or dissolution of the Owner 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 Owner; or
	 
	 	(b)	 	the Owner 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 within the meaning of section 123 of The Insolvency Act 1986) or
proposes or enters into any composition or other arrangement for the benefit of its
creditors generally or proceedings are commenced in relation to the Owner under any
law, regulation or procedure relating to reconstruction or readjustment of debts; or

18

 

	 	(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 Owner
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 Owner and
is not discharged within fourteen (14) days; or
	 
	 	(d)	 	all or a material part of the undertakings, assets, rights or revenues of the
Owner 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 Owner in any
jurisdiction to which it is subject which has an effect equivalent or similar to any of
the events mentioned in Clauses 8.2(a) to 8.2(d); or
	 
	 	(f)	 	the Owner suspends or ceases or threatens to suspend or cease to carry on its
business; or
	 
	 	(g)	 	there occurs, in the reasonable opinion of the Mortgagee, a materially adverse
change in the financial condition of the Owner; or
	 
	 	(h)	 	any other event occurs or circumstances arise which, in the reasonable opinion
of the Mortgagee, is likely materially and adversely to affect either (i) the ability
of the Owner to perform all or any of its obligations under or otherwise to comply with
the terms of the Loan Agreement, the Mortgage, this Deed and/or any of the other
Security Documents, or (ii) the security created by the Loan Agreement, the Mortgage,
this Deed and/or any of the other Security Documents; or
	 
	 	(i)	 	(without the prior written consent of the Mortgagee) there is any change in the
beneficial ownership of the shares in the Owner and the Manager which is not otherwise
permitted under the terms of the Loan Agreement; or
	 
	 	(j)	 	a meeting is convened by the Owner for the purpose of passing any resolution to
purchase, reduce or redeem any of its share capital, without the Mortgagee’s prior
written consent which shall not be unreasonably withheld; or

	8.3	 	Representations Incorrect
	 
	 	 	any representation or warranty made or deemed to be made or repeated by or in respect of the
Owner in or pursuant to the Loan Agreement, this Deed or any of the other Security Documents
or in any notice, certificate or statement referred to in or delivered under the Loan
Agreement, this Deed or any of the other Security Documents is or proves to have been
intentionally and/or fraudulently incorrect in any material respect; or

	8.4	 	Cross default of the Owner in respect of other Indebtedness
	 
	 	 	any Indebtedness of the Owner is not paid when due or becomes due and payable (unless
contested in good faith with the appropriate judicial proceedings);
	 
	8.5	 	Events affecting the Security Documents

19

 

	(a)	 	the Loan Agreement, the Mortgage, this Deed 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 Mortgagee), or if any such party shall deny that it has any, or any
further, liability thereunder or it becomes impossible or unlawful for the Owner to fulfil
any of its covenants and obligations contained in the Loan Agreement, the Mortgage, this
Deed or any of the Security Documents or for the Mortgagee 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 Owner to
authorise or otherwise in connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of the Loan Agreement, the Mortgage, this Deed
and/or any of the other Security Documents or the performance by the Owner of its
obligations under the Loan Agreement, the Mortgage, this Deed and/or any of the other
Security Documents is modified in a manner unacceptable to the Mortgagee 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. The occurrence of any of the circumstances described in this Sub-clause
(b) hereinabove would not give rise to an Event of Default if the Owner remedies the
relevant circumstances within ten (10) days after the occurrence of such modification, not
granting, revocation, termination or expiry or not renewal (as the case may be) of any such
consent, authorisation, licence or approval of, or registration with or declaration to,
governmental or public bodies or authorities or courts; 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)	 	the registration of the Mortgage is contested or becomes void or voidable or liable to
cancellation or termination, or if the validity or priority of the Mortgage is contested;
or
	 
	8.6	 	Events concerning the Security Parties
	 
	 	 	any of the events referred to in Clauses 8.2 to 8.5 occurs (amended as appropriate) in
relation to any Security Party; or
	 
	8.7	 	Environmental Events
	 
	(a)	 	the Owner and/or the Manager and/or any of their respective Environmental Affiliates
fails to comply with any Environmental Law or any Environmental Approval or the Ship is
involved in any incident which gives rise or which may give rise to any Environmental
Claim, if in any such case, such non compliance or incident or the consequences thereof
could (in the opinion of the Mortgagee) reasonably be expected to have a material
adverse effect on the business assets, operations, property or financial condition of the
Owner or the Manager or on the security created by any of the Security Documents; or
	 
	(b)	 	the Owner or any other person fails or omits to comply with any requirements of the
protection and indemnity association or other insurer with which the Ship is entered for
insurance or insured against protection and indemnity risks (including oil pollution risks)
to the effect that any cover (including without limitation, liability for Environmental
Claims arising in jurisdictions where the Ship operates or trades) is or may be liable to
cancellation, qualification or exclusion at any time and the relevant cover is not
reinstated or reconstituted in a manner meeting the requirements of the Loan Agreement and
this Deed within seven (7) days of such cancellation, qualification or exclusion; or

20

 

	 	 	cancellation, qualification or exclusion at any time and the relevant cover is not
reinstated or reconstituted in a manner meeting the requirements of the Loan Agreement and
this Deed within seven (7) days of such cancellation, qualification or exclusion; or
	 
	8.8	 	Events affecting the Ship
	 
	(a)	 	the Ship becomes a Total Loss or suffers damage or is involved in an incident which in
the reasonable opinion of the Mortgagee may result in the Ship being subsequently
determined to be a Total Loss and the insurance indemnity is not paid by the insurers to
the Lenders under the relevant General Assignment within a period of one hundred eighty
(180) days from the earlier of: (1) the date such Total Loss occurred and (2) the date on
which in the reasonable opinion of the Mortgagee the incident may result in the Ship being
subsequently determined to be a Total Toss has occurred; or
	 
	(b)	 	the Ship ceases to be managed by the Manager (for any reason other than the reason of a
Total Loss or sale of the Ship) with the approval of the Mortgagee (such approval not to be
unreasonably withheld) and the Owner fail to appoint an Manager within seven (7) days after
the termination of the Management Agreement with the previous Manager; or
	 
	(c)	 	the Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited,
detained in exercise or purported exercise of any possessory lien or other claim or
otherwise taken from the possession of the Owner thereof and such Owner shall fail to
procure the release of the Ship within a period of fourteen (14) days thereafter; or
	 
	(d)	 	the registration of the Ship under the laws of the state under the flag of which she is
registered of the is cancelled or terminated without the prior written consent of the
Mortgagee or, if the Ship is only provisionally registered on the relevant Drawdown Date
and is not permanently registered under the laws and flag of the of the state under the
flag of which she is registered at least thirty (30) days prior to the final deadline for
completing such permanent registration as such may be validly extended; or
	 
	(e)	 	(without prejudice to the generality of Sub-Clause 8.1(b) and (c)) for any reason
whatsoever the provisions of Clause 6.22 are not complied with and/or, the Ship ceases to
comply with the ISM Code; or
	 
	(f)	 	(without prejudice to the generality of sub-Clause 8.1(b) and (c)) for any reason
whatsoever the provisions of Clause 6.23 are not complied with and/or, the Ship ceases to
comply with the ISPS Code; or
	 
	(g)	 	any other Event of Default specified in Clause 10.1 of the Loan Agreement or in any
other Security Document, occurs; or
	 
	9.	 	ENFORCEABILITY AND POWERS OF THE MORTGAGEE 
	 
	9.1	 	Upon the happening of any of the Events of Default set out in Clause 8.1 to 8.8 (both incl.)
which is continuing, but without the necessity for any Court’s order or any declaration to be
made in any jurisdiction to the effect that an Event of Default has occurred (and whether
prior to or after the Mortgagee having made demand on the Owner as referred to in Clause 10.2
of the Loan Agreement) the Secured Indebtedness together with interest accrued and other
moneys owing in respect thereof shall immediately become due and payable to the Mortgagee, and
the security created by this Deed and the 

21

 

	 	 	Mortgage shall become immediately enforceable and
the Mortgagee shall (whether or not any such demand shall have been made) become forthwith
entitled as and when it may see fit to put into force and to exercise all the powers possessed
by it as mortgagee and chargee of the Mortgaged Property and in particular (but without
limitation):

	 	(a)	 	to take possession of the Ship (whether actually or constructively) and/or
otherwise to take control of the Ship, wherever the Ship may be, without legal process
and (other than to the extend provided as a matter of law) without any liability of the
Mortgagee or any Receiver for any losses or damages incurred thereby and the Owner
shall forthwith upon being required to do so surrender possession and control of the
Ship to the Mortgagee or any Receiver at its own cost and expense whereupon (inter
alia) the Master, officers and crew shall comply with the instructions given from time
to time by or on behalf of the Mortgagee or any such Receiver;
	 
	 	(b)	 	to require that all policies, contracts and other records relating to the
Insurances (including details of and correspondence concerning outstanding claims) be
forthwith delivered to such brokers as the Mortgagee may nominate;
	 
	 	(c)	 	to collect, recover, compromise and give a good discharge for all claims then
outstanding or thereafter arising under the Insurances or any of them or in respect of
the Earnings or any Requisition Compensation and to permit the brokers through whom
collection or recovery is effected to charge the usual brokerage therefor;
	 
	 	(d)	 	to take over or institute (if necessary using the name of the Owner) all such
proceedings in connection with the Ship, the Insurances, the Earnings or any
Requisition Compensation as the Mortgagee in its absolute discretion think fit and to
discharge, compound, release or compromise claims against the Owner in respect of the
Ship which have given or may give rise to any charge or lien on the Ship or which are
or may be enforceable by proceedings against the Ship;
	 
	 	(e)	 	To sell the Ship or any share or interest therein with or without prior notice
to the Owner and with or without the benefit of a charter by public auction or private
contract at such place and upon such terms as the Mortgagee or any Receiver in its
absolute discretion may determine with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting from postponement
thereof and/or themselves to purchase the Ship at any such public auction and to set
off the purchase price against all or any part of the Secured Indebtedness;
	 
	 	(f)	 	to manage, insure, maintain and repair the Ship and to employ or sail or lay up
the Ship in such manner and for such period as the Mortgagee or any Receiver in
their/its absolute discretion deem expedient and for the purposes aforesaid the
Mortgagee or such Receiver shall be entitled to do all acts and things incidental or
conductive thereto and in particular to enter into such arrangements respecting the
Ship her insurance, management, maintenance, repair, classification and employment in
all respects as if the Mortgagee or such Receiver were the owner of the Ship and
without being responsible for any loss thereby incurred;

22

 

	 	(g)	 	to recover from the Owner on demand any such losses as may be incurred by the
Mortgagee or any Receiver in or about the exercise of the power vested under sub-clause
(f) above with interest thereon at the rate provided for in Clause 2.3 from the date
when such losses were incurred by the Mortgagee or any Receiver until the date of
payment whether before or after any relevant judgement; and
	 
	 	(h)	 	to recover from the Owner on demand all expenses payments and disbursements
incurred by the Mortgagee or any Receiver in or about or incidental to the exercise by
it of any of the powers aforesaid together with default interest thereon at the rate
prescribed in Clause 2.3 from the date when such expenses, payments or disbursements
were incurred by the Mortgagee or any Receiver until the date of payment whether before
or after any relevant judgement.

	9.2	(a)  	At any time after the Secured Indebtedness shall have become due and payable in
accordance with a notice given by the Mortgagee to the Owner pursuant to Clause 10.2 of the
Loan Agreement, the Mortgagee shall (in addition to the other powers described in this Clause
9) be entitled (but not bound) by an instrument in writing under its Common seal or under the
hand of any director or officer of the Mortgagee to appoint any person or persons to be a
Receiver of the Mortgaged Property or any part thereof (with power to authorise any joint
receiver and/or manager to exercise any power independently of any other joint receiver and/or
manager) and may from time to time fix his remuneration, and may remove any Receiver so
appointed and appoint another in his place. Any Receiver so appointed shall be the Mortgagee
of the Owner and the Owner shall be solely responsible for his acts or defaults and for his
remuneration, and such Receiver so appointed shall have all powers conferred by the Law of
Property Act 1925 without the restrictions contained in Sections 93 and 103 of that Act and,
in addition, power on behalf of and at the cost of the Owner (notwithstanding any liquidation
of the Owner) to do or omit to do anything which the Owner could do or omit to do in relation
to the Mortgaged Property or any part thereof and in particular (but without prejudice to the
generality of the foregoing) any such Receiver may exercise all the powers and discretions
conferred on the Mortgagee by the Mortgage and this Deed.

	 	(b) 	Any Receiver shall be entitled to remuneration appropriate to the work and
responsibilities involved, upon the basis of charging from time to time adopted by the
Receiver in accordance with the current practice of his firm, without being limited to
the maximum rate specified in Section 109(6) of the Law of Property Act 1925.

	9.3	 	The Mortgagee or any Receiver shall be entitled to do all acts and things incidental or
conducive to the exercise of any of the rights, powers or remedies possessed by it as
mortgagee of the Ship (whether at law, under the Mortgage and/or this Deed or otherwise) and
in particular (but without prejudice to the generality of the foregoing), upon becoming
entitled to exercise any of its powers under Clause 9.1 and 9.2, the Mortgagee or any such
Receiver shall be entitled to discharge any cargo on board the Ship (whether the same shall
belong to the Owner or any other person) and to enter into such other arrangements in
respect of the Ship, her insurances, management, maintenance, repair, classification and
employment in all respects as if the Mortgagee or any such Receiver was the owner of the
Ship, but without being responsible for any loss 

23

 

	 	 	incurred as a result of the Mortgagee or
any such Receiver doing or omitting to do any such acts or things as aforesaid.
	 
	9.4	 	Neither the Mortgagee nor any Receiver nor its respective agents, managers, officers,
employees, delegates and advisers shall be liable for any expense, claim, liability, loss,
cost, damage or expense incurred or arising in connection with the exercise or purported
exercise of any rights, powers and discretions under the Mortgage and this Deed (or either of
them) in the absence of wilful misconduct or gross negligence.
	 
	9.5	 	Neither the Mortgagee nor any Receiver shall, by reason of the taking possession of the Ship,
be liable to account as mortgagee-in-possession in respect of all or any of the Mortgaged
Property or for anything except actual receipts or be liable for any loss upon realisation or
for any default or omission of any nature whatsoever in connection therewith for which a
mortgagee-in-possession might be liable as such.
	 
	9.6	 	Upon any sale of the Ship or any share or interest therein by the Mortgagee or by any
Receiver pursuant to Clause 9.1(e), the purchaser shall not be bound to see or enquire whether
the Mortgagee’s power of sale has arisen in the manner herein provided and the sale shall be
deemed to be within the power of the Mortgagee or any such Receiver and shall operate to
divest title and ownership on the Ship to the purchaser not-withstanding the observance or not
by the Mortgagee or any such Receiver of the terms and conditions therefor which are set forth
herein and the receipt of the Mortgagee or any such Receiver for the purchase moneys shall
effectively discharge the purchaser who shall not be concerned with the manner of application
of the proceeds of sale or be in any way answerable therefor and the sale shall operate to
transfer full and complete title and benefit to the purchaser and to divest the Owner of all
rights, title and interest of any nature whatsoever in the Ship and to bar any such interest
of the Owner and all persons claiming through, by or under the Owner.
	 
	9.7	 	The Owner hereby waives the entitlement conferred by Section 93 of the Law of Property Act
1925 and agrees that Section 103 of that Act shall not apply to the security created by the
Mortgage and this Deed. For the avoidance of doubt, the powers of the Mortgagee and any
Receiver by virtue of the Mortgage and this Deed shall not be limited to those specified in
Section 101 of the Law of Property Act 1925. For the purposes of all powers conferred by
statute the Secured Indebtedness shall be deemed to have become due and payable on the date
hereof.
	 
	10.	 	APPLICATION OF MONIES
	 
	10.1	 	All moneys received by the Mortgagee or any Receiver in respect of:

	 	(a)	 	a sale of the Ship or any share or interest therein; or
	 
	 	(b)	 	any recovery under the Insurances (other than any such sum or sums as may have
been received by the Mortgagee in accordance with proviso (b) to Clause 2.1 of the
General Assignment in respect of a Major Casualty (as therein defined) and which has or
have been paid over to the Owner as therein provided) ; or
	 
	 	(c)	 	any Requisition Compensation; or
	 
	 	(d)	 	net profits arising out of the employment of the Ship pursuant to Clause
9.1(f); or

24

 

	 	(e)	 	otherwise received by the Mortgagee or any Receiver pursuant to the Mortgage or
this Deed,

	 	 	shall be held by it upon trust in the first place to pay or make good all such expenses,
liabilities, losses, costs, duties, fees, charge and other moneys whatsoever (together with
interest thereon under Clause 2.3) as may have been incurred by the Mortgagee in or about or
incidental to the exercise by the Mortgagee of the powers specified or otherwise referred to
in Clause 7 and Clause 9 or any of them and the balance shall be applied in discharge of the
Secured Indebtedness in the manner provided for in Clause 11.3 of the Loan Agreement.
	 
	 	 	In the event that such moneys are insufficient to pay the Secured Indebtedness in full shall
be entitled to recover the balance from the Owner or any other person liable therefor.
	 
	11.	 	DELEGATION
	 
	 	 	The Mortgagee at any time and from time to time, may delegate by power of attorney or in any
other manner to any person or persons all or any of the powers, authorities and discretions
which are for the time being exercisable by the Mortgagee or any Receiver under the Mortgage
and this Deed (or either of them) in relation to the Ship. Any such delegation may be made
upon such terms and subject to such regulations as the Mortgagee may think fit. The
Mortgagee shall not be in any way liable or responsible to the Owner for any loss or damage
arising from any act, default, omission or misconduct on the part of any such delegate.
	 
	12.	 	INDEMNITIES
	 
	12.1	 	The Owner will indemnify and save harmless the Mortgagee and each Receiver and each agent or
attorney appointed under or pursuant to this Deed from and against any and all expenses,
claims, liabilities, losses, taxes, costs, duties, fees and charges suffered, incurred or made
by the Mortgagee or any Receiver or such agent or attorney:

	 	(a)	 	in the exercise or purported exercise of any rights, powers or discretions
vested in it pursuant to the Mortgage and this Deed (or either of them); or
	 
	 	(b)	 	in the preservation or enforcement of the Mortgagee’ or any Receiver’s rights
under the Mortgage and this Deed (or either of them); or
	 
	 	(c)	 	on the release of the Ship or any share or interest therein from the security
created by the Mortgage and this Deed (or either of them)

and the Mortgagee or any Receiver and each such agent or attorney may retain and pay all
sums in respect of the same out of money received under the powers conferred by the Mortgage
and this Deed (or either of them). All such amounts recoverable by the Mortgagee or any
Receiver or such agent or attorney shall be recoverable on a full indemnity basis.

	12.2	 	If any sum due from the Owner under or in connection with the Loan Agreement, the Mortgage
and this Deed (or any of them) or under any order or judgement given or made in relation to
the Loan Agreement, the Mortgage and this Deed (or any of them) has to be 

25

 

	 	 	converted from the
currency (the “first currency”) in which the same is payable under the Loan Agreement, the
Mortgage and this Deed (or any of them) 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
Owner (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 the Loan Agreement, the Mortgage and this
Deed (or any of them), the Owner shall indemnify and hold harmless the Mortgagee from and
against any loss or damage suffered as a result of any discrepancy 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 Mortgagee may in the
ordinary course of business purchase the first currency with the second currency upon receipt
of a sum paid to it in or towards satisfaction of any such order, judgement, claim or proof.
	 
	12.3	 	The indemnity contained in this Clause 12 shall apply irrespective of any indulgence granted
to the Owner from time to time and shall continue in full force and effect notwithstanding any
payment in favour of the Mortgagee and any amount due from the Owner under this Clause 12 will
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 the Loan Agreement, the Mortgage and the Deed (or any of
them).
	 
	13.	 	POWER OF ATTORNEY
	 
	13.1	 	The Owner, by way of security and in order more fully to secure the performance of the
Owner’s obligations under the Mortgage and this Deed, HEREBY IRREVOCABLY APPOINTS (such
appointment being coupled with an interest of the Mortgagee) the Mortgagee as its attorney for
the duration of the Security Period for the purposes of:

	 	(a)	 	doing in its name all acts which the Owner itself could do in relation to or in
connection the Mortgaged Property and executing signing and (if required) registering
in its name all documents which the Owner itself could do, execute, sign or register in
relation to the Ship (including but without limitation the execution of bills of sale
for the Ship transferring title to the Ship to a third party)
	 
	 	 	 	PROVIDED HOWEVER that such power shall not be exercisable by or on behalf of the
Mortgagee until the Secured Indebtedness shall have become repayable on demand
(whether or not such demand shall have been made) under Clause 10.2 of the Loan
Agreement hereof and the Mortgage and this Deed shall have become immediately
enforceable pursuant to Clause 9; and
	 
	 	(b)	 	executing, signing, perfecting, doing and (if required) registering every such
further assurance document, act or thing as is referred to in Clause 13.

	13.2	 	The exercise of such power as is referred to in Clause 13.1 by or on behalf of the Mortgagee
shall not put any person dealing with the Mortgagee upon any enquiry as to whether the Loan
have become repayable on demand and/or the Mortgage and this Deed have become enforceable nor
shall such person be in any way affected by notice that such security has not become repayable
and/or the Mortgage and this Deed have not become enforceable and in relation to both Clauses
13.1(a) and (b) and the exercise by the Mortgagee of such power shall be conclusive evidence
of its rights to exercise the same.
	 
	14.	 	FURTHER ASSURANCES

26

 

	 	 	The Owner hereby further undertakes at its own expense to execute, sign, perfect, do and (if
required) register every such further assurance document, act or thing as in the opinion of
the Mortgagee may be necessary or desirable for the purpose of more effectually mortgaging
and charging the Mortgaged Property or perfecting the security constituted by the Security
Documents.
	 
	15.	 	EXPENSES
	 
	 	 	The Owner covenants that it will pay to the Mortgagee and any Receiver (or as they/it may
direct) on demand the amount of all investigation and legal expenses of any kind whatsoever
(inclusive of value added tax thereon) stamp duties (if any) registration fees and any other
charges incurred by the Mortgagee or any Receiver or for which the Mortgagee or any Receiver
may become liable in connection with (a) the negotiation, preparation, completion and (if
required) registration of the Loan Agreement, the Mortgage and the other Security Documents
and the preserving or enforcing of, or attempting to preserve or enforce, the security
created by the Mortgage and this Deed or otherwise in connection with the Secured
Indebtedness and the security therefor; and (b) any variation of, or amendment or supplement
to, any of the terms of, or any consent or waiver required from the Mortgagee or any
Receiver in relation to, the Loan Agreement and the Security Documents (or any of them), and
in each case, regardless of whether the same is actually implemented, completed or granted
as the case may be.
	 
	16.	 	NOTICES
	 
	 	 	The provisions of Clause 15.1 of the Loan Agreement shall apply mutatis mutandis in respect
of any certificate, notice, demand or other communication given or made under the Mortgage
and this Deed.
	 
	17.	 	ASSIGNMENT
	 
	 	 	The provisions of Clause 13 of the Loan Agreement shall, mutatis mutandis, apply in relation
to the ability of the Mortgagee to assign its rights under the Mortgage and/or this Deed to
the effect that the security constituted by the Mortgage and/or this Deed and the covenants
and obligations of the Owner under the Mortgage and/or this Deed shall enure to the benefit
of such assignees of the Mortgagee.
	 
	18.	 	REPRESENTATIONS AND WARRANTIES
	 
	18.1	 	The Owner hereby represents and warrants that:

	 	(a)	 	the Owner is the sole legal and beneficial owner of sixty-four sixty-fourth
shares of and in the Ship and none of the said shares is subject to any mortgage,
charge, lien, hypothecation, assignment, title retention or encumbrance of whatsoever
nature or any other interest given by way of security (save as constituted by the
Mortgage and this Deed);
	 
	 	(b)	 	the Owner has not sold or transferred, or agreed to sell or transfer, the Ship
or any part thereof;

27

 

	 	(c)	 	the representations and warranties contained in Clause 6 of the Loan Agreement
are true and correct with respect to the facts and circumstances existing at the date
of this Deed and are hereby repeated and restated as if set out in full herein; and
	 
	 	(d)	 	the Owner has the power as security for the Secured Indebtedness to mortgage
its property including the Ship and to assign the Insurances, Requisition Compensation
and the Earnings of the Ship in favour of the Mortgagee.

	18.2	 	The Owner hereby further represents and warrants to the Mortgagee that:

	 	(a)	 	all applicable Environmental Laws and Environmental Approvals in relation to
the Ship, her operation and management and the business of the Owner (as now conducted
and as reasonably anticipated to be conducted in the future) have been complied with;
	 
	 	(b)	 	no Environmental Claim has been made threatened against the Owner, the Manager
or otherwise in connection with the Ship;
	 
	 	(c)	 	no Environmental Incident has occurred; and
	 
	 	(d)	 	the Ship will be in full compliance with the provisions of the ISM Code and
ISPS Code.

	19.	 	MISCELLANEOUS 
	 
	19.1	 	Any provision of the Security Documents prohibited by or unlawful or unenforceable under any
applicable law shall (to the extent required by such law) be ineffective without modifying the
remaining provisions of the Security Documents but where the provisions of any such applicable
law may be waived they are hereby waived to the full extent permitted by such law to the end
that the Security Documents shall be valid and binding documents enforceable in accordance
with their respective terms.
	 
	19.2	 	For the purposes of enforcement, the interest rate in respect of each Interest Period and the
Default Rate, the occurrence of an Event of Default and in particular the failure of the Owner
to pay any amount due when it was due and the amount at any time due from the Owner under the
Loan Agreement, the Mortgage and this Deed shall be proved by a Certificate of the Mortgagee,
which it is hereby agreed that it shall be conclusive and binding upon the Owner (save for
manifest error).
	 
	19.3	 	This Deed may be executed in several counterparts, each of which shall be an original, but
which together shall constitute but one and the same document.
	 
	19.4	 	No term of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by
a person who is not a party to this Deed.
	 
	20.	 	LAW AND JURISDICTION
	 
	20.1	 	This Deed shall be governed and construed in accordance with the laws of the Commonwealth of
the Bahamas.
	 
	20.2	 	Subject to Clause 20.3, the courts of England shall have exclusive jurisdiction to settle any
dispute which may arise out of or in connection with the Mortgage and this Deed (or either of

28

 

		 	them) and the Owner hereby waives any objections to proceedings with respect to the Mortgage
and this Deed (or either of them) in such courts on the grounds of venue or inconvenient
forum.
	 
	20.3	 	Clause 20.2 is for the exclusive benefit of the Mortgagee and any Receiver, each of which
reserves the right:

	 	(a)	 	to commence proceeding in relation to any matter which arises out of or in
connection with the Mortgage and this Deed (or either of them) in the courts of any
country other than England and which have or claim jurisdiction to that matter; and
	 
	 	(b)	 	to commence 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 Owner shall not commence any proceedings in any country other than England in relation
to a matter which arises out of or in connection with the Mortgage and this Deed (or either
of them).
	 
	20.4	 	Further, the Owner agrees that any summons, writ or other legal process issued against them
in England shall be served upon Messrs. Atlas Maritime Services Limited, currently located at
Enterprise House, 113-115 George Lane, London, England, or their successors, who are hereby
authorised to accept such service, which shall be deemed to be good service on the Owner.
Provided, however, that the Owner further agrees that in the event that (i) Messrs. Atlas
Maritime Services Limited close or fail to maintain a business presence in England, or (ii)
the Mortgagee, in its 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 them 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 Owner. The Mortgagee is hereby irrevocably appointed
by the Owner as the duly authorised attorney of the Owner for the purpose of appointing the
Process Agent for English Proceedings as provided herein. 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 Mortgagee to the Owner in accordance with Clauses 15.1 of the Loan
Agreement. Finally, the Owner hereby waives any objections to the inconvenience of England as
a forum and 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 Owner may have against
the Mortgagee arising out of or in connection with this Deed.
	 
	20.5	 	Nothing in this Clause 20 shall exclude or limit any right which the Mortgagee or any
Receiver may have (whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of process, the recognition
or enforcement of a judgement or any similar or related matter in any jurisdiction
(including, without limitation any jurisdiction where any part of the Mortgaged Property may
be located) nor shall the taking of proceedings with respect to the Mortgage and this Deed
(or either of them) in any jurisdiction preclude the Mortgagee or any Receiver from taking
proceedings in any other jurisdiction or jurisdictions, whether concurrently or not.
	 
	20.6	 	Without prejudice to the generality of this Clause 20 the Mortgagee or any Receiver shall
have the right to arrest and take action against the Ship at whatever place the Ship shall be
found lying and for the purpose of any action which the Mortgagees may bring before the Courts
of such jurisdiction or other judicial authority and for the purpose of any action which the
Mortgagee or any Receiver may bring against the Ship, any writ, notice, judgement or 

29

 

	 	 	other
legal process or documents may (without prejudice to any other method of service under
applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master)
and such service shall be deemed good service on the Owner for all purposes.
	 
	20.7	 	The parties further agree that subject to Clause 20.3, the courts of England shall have
exclusive jurisdiction to settle any dispute which may arise out of or in connection with the
Mortgage and this Deed (or either of them) and the Owner hereby waives any objections to
proceedings with respect to the Mortgage and this Deed (or either of them) in such courts on
the grounds of venue or inconvenient forum.
	 
	20.8	 	If it is decided by the Mortgagee that any such proceedings should be commenced in any other
country, then any objections as to the jurisdiction or any claim as to the inconvenience of
the forum is hereby waived by the Owner and it is agreed and undertaken by the Owner to
instruct lawyers in that country to accept service of legal process and not to contest the
validity of such proceedings as far as the jurisdiction of the court or courts involved is
concerned and the Owner agrees that any judgement or order obtained in an English court shall
be conclusive and binding on the Owner and shall be enforceable without review in the courts
of any other jurisdiction.
	 
	20.9	 	The Owner hereby appoints Mr. Ioannis Fassolis, an Attorney-at-Law, whose present address is
at 15 Sachtouri Street, 185 36, Piraeus, Greece, as agent to accept service in Greece
(hereinafter called the “Process Agent for Hellenic
Proceedings”) upon whom any judicial or
extra-judicial process in Greece may be served as well as any notice, request, demand payment
order or other communication under the Mortgage and this Deed. In the event that the Process
Agent for Hellenic Proceeding (or any substitute process agent notified to the Mortgagee in
accordance with the foregoing) cannot be found at the address specified above (or, as the case
may be, notified to the Mortgagee), which will be conclusively proved by a deed of a process
server that the process agent cannot be found at such address, any judicial process in Greece
and any notice, request, payment order, announcement of claim, demand or other communication
to be sent to the Owner may be validly effected in accordance with the procedure provided by
the relevant law. In case, however, that such Process Agent is found at any other address, the
Mortgagee shall have the right to serve the documents either on such Process Agent at such
address or in accordance with the procedure provided by the relevant law.

In this Clause 20 “proceedings” means proceedings of any kind, including an application for a
provisional or protective measure.

IN WITNESS WHEREOF, the parties hereto have caused this Deed to be duly executed the date first
above written.

THE OWNER

	 	 	 
	Signed and Delivered as a Deed
	 	)
	By Mr. Ion
Varouxakis 

	 	) /s/ Ion
Varouxakis
	for and on behalf of
	 	)
	ADVENTURE NINE S.A.
	 	)
	of Marshall Islands, in the presence of:
	 	)

30

 

	 	 	 	 	 
	 	 
	Witness:  	/s/ Ioannis Fassolis 	 
	Name: 	Ioannis Fassolis 	 
	Address: 	15, Sachtouri Street,
Pireas, Greece

	 
	  	Occupation: 	Attorney-at-Law  	 	 
	 

THE MORTGAGEE

	 	 	 	 	 	 	 
	EXECUTED as a DEED

	 	 	)	 	 	 
	for and on behalf of

	 	 	)	 	 	 
	FBB-FIRST BUSINESS BANK S.A.

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	by Mr. Nikolaos Vougioukas

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	its duly authorised Attorney-in-fact,

	 	 	)	 	 	/s/ Nikolaos Vougioukas
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	in the presence of:

	 	 	)	 	 	Attorney-in-fact

	 	 	 	 
	 	 
	Witness:  	/s/ Maria C. Galanopoulou 	 
	Name: 	  	Maria C. Galanopoulou 	 
	Address:  	  13, Defteras Merarchias street, Pireas, Greece

 	 
	Occupation: 	  	Attorney-at-law 	 
	 

31

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