Document:

exv4w3

 

Exhibit 4.3

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	 
	$5,000,000.00

	 	07-31-2005
	 	07-31-2006
	 	7657418442-34
	 	 	 	 	374563	 	 	K5997	 	 
	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. 

Any item above containing ••***” has been omitted due to text length limitations.

 

	 	 	 	 	 
	Borrower:

	 	Rocky Mountain Chocolate Factory, Inc.
	 	 Lender: Wells Fargo Bank, National Association
	 

	 	265 Turner Drive
	 	Durango Main
	 

	 	Durango, CO 81303-7941
	 	200 West College Drive
	 

	 	 	 	Durango, CO 81301

 

					
	    Principal Amount: $5,000,000.00
	 	Initial Rate: 5.750
	 	Date of Note: July 31, 2005

PROMISE TO PAY. Rocky Mountain Chocolate Factory, Inc. (“Borrower”) promises to pay to Wells
Fargo Bank, National Association (“Lender”), or order, in lawful money of the United States of
America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00) or so much as may
be outstanding, together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on July 31, 2006. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning August 31, 2005, with all
subsequent interest payments to be due on the last day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; and then to any late charges. The annual interest rate for this Note
is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender at Lender’s address
shown above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an index which is the floating rate equal to the Prime Rate set from time to
time by Lender that serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto (the “Index”). The Index is not necessarily the lowest rate
charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute index after notifying
Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest
rate change will not occur more often than each time the Index changes. Each change in the Prime
Rate of interest hereunder shall become effective on the date each Prime Rate change is announced
within Lender. The “initial rate” is the rate per annum which Borrower and Lender agree shall be
the initial rate of this Note, and the “index currently” is the Index amount upon which said
initial rate is based; they do not necessarily reflect the Index in effect on the date of this
Note. Borrower understands that Lender may make loans based on other rates as well. The Index
currently is 6.250 per annum. The interest rate to be applied to the unpaid principal balance of
this Note will be at a rate of 0.500 percentage points under the Index, resulting in an initial
rate of 5.750 per annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it
is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments
marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will
remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment
constitutes “payment in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Wells
Fargo Bank, National Association Ann: Commercial Loan Research Department, PO Box 659713 San
Antonio, TX 78265.

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged $50.00.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, at Lender’s
option, and if permitted by applicable law, Lender may add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the rate provided in this Note
(including any increased rate). Upon default, Lender, at its option, may, if permitted under
applicable law, increase the variable interest rate on this Note 4.000 percentage points. The
interest rate will not exceed the maximum rate permitted by applicable law.

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under
this Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to comply
with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person that may materially affect any of Borrower’s property or
Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or
any of the related documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property,
any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor
of Borrower or by any governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or
forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.

 

 

					
	Loan No: 7657418442-34
	 	PROMISSORY NOTE

(Continued)
	 	Page 2

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any
guarantor, endorser, surety, or accommodation party of any of the indebtedness or any
guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by
this Note.

Change In Ownership. Any change in ownership of twenty-five percent (25) or more of the common
stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note
and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender the reasonable costs of such collection. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal
expenses, whether or not there is a lawsuit, including without limitation attorneys’ fees and
legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any
court costs, in addition to all other sums provided by law.

GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of Colorado without regard to its conflicts of
law provisions. This Note has been accepted by Lender in the State of Colorado.

RIGHT OF SETOFF. To the extent permitted by applicable law. Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to
protect Lender’s charge and setoff rights provided in this paragraph.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be
requested either orally or in writing by Borrower or by an authorized person. Lender may, but need
not, require that all oral requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above.
Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions
of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender’s internal records, including daily computer print-outs. Lender will have no obligation
to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms
of this Note or any agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases
doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D)
Borrower has applied funds provided pursuant to this Note for purposes other than those authorized
by Lender; or (E) Lender in good faith believes itself insecure.

LOAN FEE AUTHORIZATION. Borrower shall pay to Lender any and all fees as specified in the
“Disbursement Request and Authorization” executed by Borrower in connection with this Note. Such
fees are non-refundable and shall be due and payable in full immediately upon Borrower’s execution
of this Note.

APPLICATION OF PAYMENTS. Notwithstanding the application of payment provided in the Payment
section of this Note, unless otherwise agreed, all sums received from Borrower may be applied to
interest, fees, principal, or any other amounts due to Lender in any order at Lender’s sole
discretion. If a final payment amount is set out in the Payment section of this Note, Borrower
understands that it is an estimate, and that the actual final payment amount will depend upon when
payments are received and other factors.

DEFAULT RATE. At Lender’s option and without prior notice, upon default or at any time during the
pendency of any event of default under this Note or any related loan documents. Lender may
increase the interest rate applicable to the Note by four percent (4.0) (the “Default Rate”), not
to exceed the maximum lawful rate. (If the applicable rate is a floating or variable rate, then
the Default Rate will be a varying rate equal to the sum of the normally applicable Index and
spread, plus four percent.) The Default Rate shall remain in effect until the default has been
cured and that fact has been communicated to and confirmed by Lender. Lender shall give written
notice to Borrower of Lender’s imposition of the Default Rate. If the Note is not paid at
maturity, Lender may impose the Default Rate from the maturity date to the date paid in full
without notice. Lender’s imposition of the Default Rate shall not constitute an election of
remedies or otherwise limit Lender’s rights concerning other remedies available to Lender as a
result of the occurrence of an event of default. In the event of a conflict between the provisions
of this paragraph and any other provision of this Note or any related agreement, the provisions of
this paragraph shall control. If a default rate is prohibited by applicable law, then the interest
rate applicable after default or maturity shall be the prematurity rate which would be applicable
in the absence of any default.

ADDITIONAL SECURITY. Notwithstanding anything to the contrary in this or any related agreement, to
further secure the indebtedness and obligations of the Note and related loan documents. Borrower
pledges and grants to Lender a contractual right of offset and security interest in Borrower’s
accounts with Lender and Borrower’s accounts with any Wells Fargo Affiliate, whether checking,
savings, investment, or some other account, including without limitation, accounts held jointly
with others and accounts opened in the future, excluding however all IRAs, Keogh accounts, and
trust accounts to the extent a security interest would be invalid or prohibited by law. As used
herein, “Wells Fargo Affiliate” means any present or future subsidiary of Wells Fargo & Company,
and any subsidiary thereof, and any successors of such financial service companies.

LINE ADVANCES. Notwithstanding anything to the contrary, requests for advances communicated to any
office of Lender by any person believed by Lender in good faith to be authorized to make the
request, whether written, verbal, telephonic or electronic, may be acted upon by Lender, and
Borrower will be liable for sums advanced by Lender pursuant to such request. Such requests for
advances shall be deemed authorized by Borrower, and Lender shall not be liable for such advances
made in good faith, and with respect to advances deposited to the credit of any deposit account of
Borrower, such advances, when so deposited, shall be conclusively presumed to have been made to or
for the benefit of Borrower regardless of the fact that persons other than those authorized to
request advances may have authority to draw against such account. Borrower agrees to indemnify and
hold Lender harmless from and against all damages, liabilities, costs and expenses (including
attorney’s fees) arising out of any claim by Borrower or any third party against Lender in
connection with Lender’s performance of transfers as described above.

 

 

					
	Loan No: 7657418442-34
	 	PROMISSORY NOTE

(Continued)
	 	Page 3

 

EXTENSION AND RENEWAL. Lender may, at Lender’s discretion, renew or extend this Note by written
notice (“Renewal Notice”) to Borrower. Such renewal or extension shall be effective as of the
maturity date of this Note, and may be conditioned among other things on modification of
Borrower’s obligations hereunder, including but not limited to a decrease in the amount available
under this Note, an increase in the interest rate applicable to this Note and/or payment of a fee
for such renewal or extension. In addition, Lender may increase the principal amount available
under the Note at any time. Borrower shall be deemed to have accepted the terms of each Renewal
Notice, including any notice of an increase in availability, if Borrower does not deliver to
Lender written rejection of such renewal or extension within 10 days following receipt of such
Renewal Notice, or if Borrower draws additional funds following the date of notification. After
any renewal or extension of Borrower’s obligations under this Note, the term “maturity date” as
used in this Note shall mean the new maturity date set forth in the Renewal Notice. This Note may
be renewed and extended repeatedly in this manner.

LETTERS OF CREDIT AND FOREIGN EXCHANGE. Trade Finance Subfeatures. Borrower shall have available a
Letter of Credit Subfeature and a Foreign Exchange Subfeature as described in this section, in a
total amount not to exceed the available principal amount of the line of credit evidenced by this
Note.

1. Letter of Credit Subfeature. As a Subfeature this Note, Lender may from time to time issue or
cause to be issued by a Wells Fargo Affiliate (such Lender or Wells Fargo Affiliate being referred
to herein as the “Issuer”) for your account, commercial and/or standby letters of credit (each
individually, a “Letter of Credit” and collectively “Letters of Credit”); provided however, that
the form and substance of each Letter of Credit shall be the subject to approval by the Issuer in
its sole discretion. Each Letter of Credit shall be issued for a term designated by Borrower;
provided however, that no Letter of Credit shall have an expiration subsequent to the maturity of
the Note. Each Letter of Credit shall be subject to the terms and conditions of a Letter of Credit
Agreement and related documents, if any, required by Issuer in connection with the issuance of
such Letter of Credit (each individually a “Letter of Credit Agreement” and collectively, the
“Letter of Credit Agreements”). Each draft paid by Issuer under a Letter of Credit and reimbursed
by Lender and shall be paid with an advance under the Note and shall be repaid by Borrower in
accordance with the terms and conditions of the Note applicable to such advances; provided
however, that if advances under the Note are not available, for any reason whatsoever, at the time
any amount is paid by Lender, then the full amount of such advance shall be immediately due and
payable, together with interest thereon, from the date such amount is paid by Issuer or Lender to
the date such amount is fully repaid by Borrower, at the rate of interest applicable to advances
under the Note. In such event, Borrower agrees that Issuer or Lender, at Issuer’s or Lender’s sole
discretion, may debit Borrower’s deposit account(s) with Lender or a Wells Fargo Affiliate for the
amount of any such draft. Upon the issuance of an amendment to a Letter of Credit, upon the
reimbursement by Lender of a draft under any Letter of Credit, and otherwise as agreed by Borrower
and Issuer pursuant to the Letter of Credit Agreements, Borrower shall pay to Issuer or Lender
fees determined in accordance with Issuer’s/Lender’s standard fees and charges at such time.

2. Foreign Exchange Subfeature. As a Subfeature of this Note, Lender or a Wells Fargo Affiliate
(such Lender or Wells Fargo Affiliate being referred to herein as the “Exchanger”) may make
available to Borrower a foreign exchange facility under which Exchanger, from time to time up to
and including the maturity date of the Note, will enter into foreign exchange contracts for the
account of Borrower for the purchase and/or sale by Borrower in United States Dollars of the
foreign currency or currencies specified in the foreign exchange agreement establishing the
foreign exchange facility. Each foreign exchange transaction shall be subject to the terms and
conditions of the foreign exchange agreement, the form and substance of which must be acceptable
to the Exchanger in all respects in its sole discretion.

3. Subfeature Limits. The outstanding amount of all Letters of Credit and foreign exchange
contracts, plus the reserve percentage applicable to foreign exchange contracts, shall be reserved
under the Note and shall not be available for Note advances. If the Trade Finance Subfeature
relates to a non-revolving line of credit, the amounts described in the preceding sentence shall
permanently reduce the remaining amount available under the non-revolving line of credit. The
amount of all outstanding foreign exchange contracts plus a reserve percentage of 20 of said
amount, plus the aggregate principal amount of all outstanding Letters of Credit, plus the
principal amounts of any advances outstanding under the Note, shall not at any time exceed the
principal amount of the Note, unless allowed by Lender at Lender’s full discretion. Any excess
amount shall be fully due and payable immediately without notice. As used herein, Wells Fargo
Affiliate means any present or future subsidiary of Wells Fargo & Company, any subsidiary thereof,
and any successors of such financial service companies.

FINANCIAL STATEMENTS. Borrower agrees to provide to Lender, upon request, financial statements
prepared in a manner and form acceptable to Lender, and copies of such tax returns and other
financial information and statements as may be requested by Lender. Borrower shall also furnish
such information regarding Borrower or the Collateral as may be requested by Lender. Borrower
warrants that all financial statements and information provided to Lender are and will be
accurate, correct and complete.

CREDIT BUREAU INQUIRIES. The parties hereto agree that Lender may obtain business credit reports
and tax returns.

ADDITIONAL EVENTS OF DEFAULT. If the Borrower is a partnership, in addition to the Events of
Default described above, the following shall also be an Event of Default: (a) the resignation or
expulsion of any general partner with an ownership interest of twenty-five percent (25) or more in
any Borrower which is a partnership or (b) if any general partner of Borrower is generally not
paying its debts as they become due.

FURTHER ASSURANCES. The parties hereto agree to do all things deemed necessary by Lender in order
to fully document the loan evidenced by this Note and any related agreements, and will fully
cooperate concerning the execution and delivery of security agreements, stock powers, instructions
and/or other documents pertaining to any collateral intended to secure the Indebtedness. The
undersigned agree to assist in the cure of any defects in the execution, delivery or substance of
the Note and related agreements, and in the creation and perfection of any liens, security
interests or other collateral rights securing the Note.

CONSENT TO SELL LOAN. The parties hereto agree: (a) Lender may sell or transfer all or part of
this loan to one or more purchasers, whether related or unrelated to Lender; (b) Lender may
provide to any purchaser, or potential purchaser, any information or knowledge Lender may have
about the parties or about any other matter relating to this loan obligation, and the parties
waive any rights to privacy it may have with respect to such matters; (c) the purchaser of a loan
will be considered its absolute owner and will have all the rights granted under the loan
documents or agreements governing the sale of the loan; and (d) the purchaser of a loan may
enforce its interests irrespective of any claims or defenses that the parties may have against
Lender.

FACSIMILE AND COUNTERPART. This document may be signed in any number of separate copies, each of
which shall be effective as an original, but all of which taken together shall constitute a single
document. An electronic transmission or other facsimile of this document or any related document
shall be deemed an original and shall be admissible as evidence of the document and the signer’s
execution.

ARBITRATION AGREEMENT. Arbitration — Binding Arbitration. Lender and each party to this agreement
hereby agree, upon demand by any party, to submit any Dispute to binding arbitration in accordance
with the terms of this Arbitration Program. A “Dispute” shall include any dispute, claim or
controversy of any kind, whether in contract or in tort. Legal or equitable, now existing or
hereafter arising, relating in any way to this Agreement or any related agreement incorporating
this Arbitration Program (the “Documents”), or any past, present, or future loans, transactions,
contracts, agreements, relationships, incidents or injuries of any kind whatsoever relating to or
involving Business Banking, Regional Banking, or any successor group or department of Lender.
DISPUTES SUBMITTED TO ARBITRATION ARE NOT RESOLVED IN COURT BY A JUDGE OR JURY.

 

 

					
	Loan No: 7657418442-34
	 	PROMISSORY NOTE

(Continued)
	 	Page 4

 

Governing Rules. Any arbitration proceeding will (i) be governed by the Federal Arbitration Act
(Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in
any of the documents between the parties; and (ii) be conducted by the AAA (American Arbitration
Association), or such other administrator as the parties shall mutually agree upon, in accordance
with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at
least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex
commercial disputes (the commercial dispute resolution procedures or the optional procedures for
large, complex commercial disputes to be referred to, as applicable, as the “Rules”). If there is
any inconsistency between the terms hereof and the Rules, the terms and procedures set forth
herein shall control. Arbitration proceedings hereunder shall be conducted at a location mutually
agreeable to the parties, or if they cannot agree, then at a location selected by the AAA in the
state of the applicable substantive law primarily governing the Credit. Any party who fails or
refuses to submit to arbitration following a demand by any other party shall bear all costs and
expenses incurred by such other party in compelling arbitration of any Dispute. Arbitration may be
demanded at any time, and may be compelled by summary proceedings in Court. The institution and
maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for judicial relief.
The arbitrator shall award all costs and expenses of the arbitration proceeding. Nothing contained
herein shall be deemed to be a waiver by any party that is a Bank of the protections afforded to
it under 12 U.S.C. °91 or any similar applicable state law.

No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not
limit the right of any party to (i) foreclose against real or personal property collateral; (ii)
exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or
repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the pendency of any
arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of
any party to submit any Dispute to arbitration or reference hereunder, including those arising
from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph.

Arbitrator Qualifications and Powers. Any arbitration proceeding in which the amount in
controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to
the Rules, and who shall not render an award of greater than $5,000,000.00. Any Dispute in which
the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of
three arbitrators; provided however, that all three arbitrators must actively participate in all
hearings and deliberations. Every arbitrator must be a practicing attorney or a retired member of
the state or federal judiciary, in either case with a minimum of ten years experience in the
substantive law applicable to the subject matter of the Dispute. The arbitrator will determine
whether or not an issue is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only
or with a hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to
motions to dismiss for failure to state a claim or motions for summary adjudication. The
arbitrator shall resolve all Disputes in accordance with the applicable substantive law and may
grant any remedy or relief that a court of such state could order or grant within the scope hereof
and such ancillary relief as is necessary to make effective any award. The arbitrator shall also
have the power to award recovery of all costs and fees, to impose sanctions and to take such other
action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal
Rules of Civil Procedure, the applicable State Rules of Civil Procedure, or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any court having
jurisdiction.

Discovery. In any arbitration proceeding discovery will be permitted in accordance with the Rules.
All discovery shall be expressly limited to matters directly relevant to the Dispute being
arbitrated and must be completed no later than 20 days before the hearing date and within 180 days
of the filing of the Dispute with the AAA. Any requests for an extension of the discovery periods,
or any discovery disputes, will be subject to final determination by the arbitrator upon a showing
that the request for discovery is essential for the party’s presentation and that no alternative
means for obtaining information is available.

Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall
take all action required to conclude any arbitration proceeding within 180 days of the filing of
the Dispute with the AAA. The resolution of any Dispute shall be determined by a separate
arbitration proceeding and such Dispute shall not be consolidated with other disputes or included
in any class proceeding. No arbitrator or other party to an arbitration proceeding may disclose
the existence, content or results thereof, except for disclosures of information by a party
required in the ordinary course of its business or by applicable law or regulation. If more than
one agreement for arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the documents between the parties or the subject
matter of the Dispute shall control. This arbitration provision shall survive termination,
amendment or expiration of any of the documents or any relationship between the parties.

State-Specific Provisions.

If California law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no
Dispute shall be submitted to arbitration if the Dispute concerns indebtedness secured directly or
indirectly, in whole or in part, by any real property unless the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the arbitration. If any such
Dispute is not submitted to arbitration, the Dispute shall, at the election of any party, be
referred to a referee in accordance with California Code of Civil Procedure Section 638 et seq.,
and this general reference agreement is intended to be specifically enforceable in accordance with
said Section 638. A referee with the qualifications required herein for arbitrators shall be
selected pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a
referee shall be entered in the court in which such proceeding was commenced in accordance with
California Code of Civil Procedure Sections 644 and 645.

If Idaho law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no
dispute shall be submitted to arbitration if the dispute concerns indebtedness secured directly or
indirectly, in whole or in part, by any real property unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the
single action rule statute of Idaho, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.

If Montana law governs the Dispute, the following provision is included;

Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no
dispute shall be submitted to arbitration if the dispute concerns indebtedness secured directly or
indirectly, in whole or in part, by any real property unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the
single action rule statute of Montana, thereby agreeing that all indebtedness and obligations of
the parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.

 

 

					
	Loan No: 7657418442-34
	 	PROMISSORY NOTE

(Continued)
	 	Page 5

 

If Nevada law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no
dispute shall be submitted to arbitration if the dispute concerns indebtedness secured directly or
indirectly, in whole or in part, by any real property unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the
single action rule statute of Nevada, thereby agreeing that all indebtedness and obligations of
the parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.

If Utah law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no
Dispute shall be submitted to arbitration if the Dispute concerns indebtedness secured directly or
indirectly, in whole or in part, by any real property unless the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the arbitration. If any such
Dispute is not submitted to arbitration, the Dispute shall, at the election of any party, be
referred to a master in accordance with Utah Rule of Civil Procedure 53, and this general
reference agreement is intended to be specifically enforceable. A master with the qualifications
required herein for arbitrators shall be selected pursuant to the AAA’s selection procedures.
Judgment upon the decision rendered by a master shall be entered in the court in which such
proceeding was commenced in accordance with Utah Rule of Civil Procedure 53(e).

EFFECTIVE DATE. The undersigned intends and agrees that the date of this agreement shall be its
effective date, though it is being signed on a later date.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this
Note without losing them. Borrower and any other person who signs, guarantees or endorses this
Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew or extend (repeatedly and
for any length of time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect Lender’s security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OP THIS NOTE,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

	 	 	 	 	 
	By:

	 	/s/ Frank Crail
	 	 
	 

	 	 	 	 
	 

	 	Frank Crail, President, CEO of Rocky Mountain
Chocolate Factory, Inc.Exhibit 10.6

 

Private & Confidential

 

 

LOAN
AGREEMENT

for a

Loan of up
to US$167,800,000

to

THE
COMPANIES SET OUT IN SCHEDULE 1

 

provided by

THE BANKS
AND FINANCIAL INSTITUTIONS

SET OUT IN SCHEDULE 2

 

Arranger,
Agent, Security Agent and Account Bank

HSH NORDBANK
AG

 

Swap
Providers

HSH
NORDBANK AG

and

CREDIT
SUISSE

 

 

 

 

Contents

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Purpose and definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  The Total Commitment

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Interest and Interest Periods

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Repayment and prepayment

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Fees and expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Payments and taxes; accounts
  and calculations

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Representations and warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Undertakings

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Unlawfulness and
  increased costs

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Security,
  set-off and pro-rata payments

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Assignment,
  transfer and lending office

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  Arranger,
  Agent, Security Agent and Reference Banks

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Notices and other
  matters

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Governing law and
  jurisdiction

  	
   

  

 

 

	
  Schedule 1 The Borrowers
  and their particulars

  	
   

  
	
   

  	
   

  
	
  Schedule 2 The Banks
  and their Commitments

  	
   

  
	
   

  	
   

  
	
  Schedule 3 The Ships,
  their details and the relevant Allocated Amounts

  	
   

  
	
   

  	
   

  
	
  Schedule 4 Form of Drawdown Notice

  	
   

  
	
   

  	
   

  
	
  Schedule 5 Documents and evidence required as conditions
  precedent to the Loan being made

  	
   

  
	
   

  	
   

  
	
  Schedule 6 Form of Transfer Certificate

  	
   

  
	
   

  	
   

  
	
  Schedule 7 Form of Trust Deed

  	
   

  
	
   

  	
   

  
	
  Schedule 8 Mandatory Cost formula

  	
   

  
	
   

  	
   

  

 

 

	
  Schedule 9 Form of Master Swap Agreement

  	
   

  
	
   

  	
   

  
	
  Schedule 10 Form of HoldCo Corporate Guarantee

  	
   

  

 

 

THIS AGREEMENT is dated 30 September 2005 and made BETWEEN:

 

(1)                                  THE COMPANIES whose names and registered addresses are set
out in schedule 1 as joint and several Borrowers;

 

(2)                                  HSH NORDBANK AG as Arranger, Agent, Security Agent and
Account Bank;

 

(3)                                  THE BANKS AND FINANCIAL
INSTITUTIONS whose names and
addresses are set out in schedule 2 as Banks; and

 

(4)                                  HSH NORDBANK AG and CREDIT SUISSE as Swap Providers.

 

IT IS AGREED as follows:

 

1                                         Purpose and definitions

 

1.1                               Purpose

 

This Agreement sets out the
terms and conditions upon and subject to which the Banks agree, according to
their several obligations, to make available to the Borrowers, jointly and
severally, a loan of up to One hundred and sixty seven million eight hundred
thousand Dollars ($167,800.000) for the purpose of assisting the Borrowers to
advance funds to Sub-HoldCo for the purpose of financing part of the Purchase
Price.

 

1.2                               Definitions

 

In this Agreement, unless
the context otherwise requires:

 

“Account Bank” means HSH Nordbank AG of
Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany (or of such other address as
may last have been notified to the other parties to this Agreement pursuant to
clause 17.1.3) or such other bank as may be designated by the Agent (acting on
the instructions of the Majority Banks) as the Account Bank for the purposes of
this Agreement and includes its successors in title;

 

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

 

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

 

“Agent” means HSH Nordbank AG of
Gerhart-Hauptmann-Platz 50, 20095 Hamburg. Germany (or of such other address as
may last have been notified to the other parties to this Agreement pursuant to
clause 17.1.3) or such other person as may be appointed as agent by the Banks
and the Swap Providers pursuant to clause 16.1 and includes its successors in
title;

 

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

 

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

 

“Balloon Instalment” has the meaning ascribed thereto in clause
4.1;

 

“Banking Day” means a day on which dealings in deposits in
Dollars are carried on in the London Interbank Market and (other than Saturday or Sunday) on which banks are open
for

 

1

 

business in London, Hamburg,
Bremen, Basel. Athens and New York (or any other relevant place of payment
under clause 6);

 

“Banks” means, together, the banks and financial institutions
listed in schedule 2 and includes their respective successors in title and
Transferees and “Bank” means any of them;

 

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

 

“Borrower” means each of the companies listed in schedule 1,
each of such registered address and country of incorporation as is set out
opposite such company’s name in the columns headed “Name”
and “Registered Address”, respectively, in schedule 1
and includes its successors in title and, in relation to a Ship, means the
company set out opposite the name of such Ship in the column headed “Owning Company” in schedule 3 and “Borrowers”
means any or all of them;

 

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

 

“Casualty Amount” means, in relation to each Ship, Seven
hundred thousand Dollars ($700,000) (or the equivalent in any other currency);

 

“Classification” means, in relation to each Ship, the highest
class available for a vessel of her type with the relevant Classification
Society;

 

“Classification Society” means, in relation to each Ship, such
classification society, being a member of the International Association of
Classification Societies (“IACS”), which the-Agent (acting on the instructions
of the Majority Banks) shall, at the request of a Borrower, have agreed in
writing (such agreement not to be unreasonably withheld) shall be treated as
the Classification Society in relation to such Borrower’s Ship for the purposes
of the relevant Ship Security Documents:

 

“Closing Date” means the date, falling after the completion
of the listing of HoldCo’s shares on NASDAQ, when all the shares in the
Borrowers shall have been transferred by the Seller to Sub-HoldCo, and
Sub-HoldCo shall have paid the Purchase Price to the Seller in full, in each
case in accordance with the Contract;

 

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

 

“Commercial Management Agreement” means, in relation to a Ship, the agreement
made or (as the context may require) to be made between the relevant Borrower
and the Commercial Manager providing (inter alia) for the Commercial Manager to
carry out the commercial management of such Ship and “Commercial
Management Agreements” means any or all of them;

 

“Commercial Manager” means Golden Energy Management S.A. of Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands or
such other person as may be appointed from time to time by a Borrower as the
commercial manager of such Borrower’s Ship

 

2

 

with the prior written
consent of the Agent acting on the instructions of the Majority Banks (such
consent not to be unreasonably withheld) and includes its successors in title;

 

“Commitment” means, in relation to each Bank, the amount
set out opposite its name in the column headed “Commitment”
in schedule 2 and/or, in the case of a Transferee, the amount transferred
as specified in the relevant Transfer Certificate, as reduced in each case by
any relevant term of this Agreement;

 

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

 

“Confirmation” shall have, in relation to any continuing
Designated Transaction, the meaning ascribed thereto in the relevant Master
Swap Agreement;

 

“Contract” means the amended and restated purchase and
sale agreement dated 13 September 2005 made between the Seller and
Sub-HoldCo in relation to the sale by the Seller, and the purchase by
Sub-HoldCo, of all the shares in the Borrowers, as such agreement maybe amended
and/or supplemented from time to time with the prior written consent of the
Agent (acting on the instructions of the Majority Banks);

 

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

 

“Corporate Guarantees” means, together, the HoldCo Corporate
Guarantee and the Sub-HoldCo Corporate Guarantee and “Corporate
Guarantee” means either of them;

 

“Corporate Guarantors” means, together. HoldCo and Sub-HoldCo and “Corporate Guarantor” means either of them;

 

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

 

“CS Master Agreement Security
Deed” means the
security deed executed or (as the context may require) to be executed by the
Borrowers in favour of the Security Agent in relation to certain of the rights
of the Borrowers under the CS Master Swap Agreement in such form as the Agent
(acting on the instructions of all the Banks) may require in Its reasonable
discretion;

 

“CS Master Swap Agreement” means the agreement made or (as the context
may require) to be made between the CS Swap Provider and the Borrowers,
comprising an ISDA Master Agreement (including the Schedule thereto) In
the form set out in schedule 9 and includes any Designated Transactions
from time to time entered into thereunder and any Confirmations from time to time
exchanged thereunder and governed thereby;

 

“CS Swap Provider” means Credit Suisse, a company having its
registered office at Paradeplatz 8, 8070 Zurich. Switzerland, acting for the
purposes of this Agreement and the CS Master Swap Agreement through its branch
at St. Alban-Graben 1-3, P.O. Box CH-4002, Basel, Switzerland (or of such
other address as may last have been notified to the other parties to this Agreement
pursuant to clause 17.1.3 or the CS Master Swap Agreement) and includes its
successors in title;

 

“Deed of Covenant” means, in relation to a Ship, the deed of
covenant collateral to the Mortgage for such Ship executed or (as the context
may require) to be executed by the relevant Borrower in favour of the Security
Agent in such form as the Agent (acting on the instructions of all the Banks)
may require in its reasonable discretion and “Deeds
of Covenant” means any or all of them;

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

“Drawdown Date” means any date, being a Banking Day falling
during the Drawdown Period, on which the Loan is, or is to be, made available;

 

“Drawdown Notice” means a notice substantially in the form of schedule 4;

 

“Drawdown Period” means the period commencing on the date of
this Agreement and ending on the Termination Date or the period ending on such
earlier date (if any) on which (a) the aggregate amount of the Loan is
equal to the Total Commitment or (b) the Total Commitment is reduced to
zero pursuant to clauses 4.3, 10.2 or 12;

 

“Early Termination Date” shall have, in relation to any continuing
Designated Transaction, the meaning ascribed thereto in the relevant Master Swap
Agreement;

 

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

 

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

 

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

 

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

 

“Environmental Claim” means, in relation to a Relevant Ship, any
and all enforcement, cleanup, removal or other governmental or regulatory
actions or orders instituted or completed

 

4

 

pursuant to any
Environmental Law or any Environmental Approval together with claims made by
any third party relating to damage, contribution, loss or injury, resulting
from any emission, spill, release or discharge of a Pollutant from such
Relevant Ship, Provided that the aggregate amount of the subject matter of all
such actions, orders or claims arising from the relevant incident involving
such Relevant Ship exceeds $750,000;

 

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

 

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

 

“Fees Letter” means the letter executed on the same date as
this Agreement and made between (inter alios) the Borrowers and the Agent in relation to the fees referred
to in clause 5.1:

 

“First Repayment Date” means 31 December 2005;

 

“Flag State” means, in relation to a Ship, the Isle of
Man or such other stale or territory designated in writing by the Borrowers and
approved in writing by the Majority Banks (such approval not to be unreasonably
withheld and the request for which to be responded to within reasonable time),
as being the “Flag State” of such Borrower’s
Ship for the purposes of the relevant Ship Security Documents;

 

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

 

“HoldCo” means Golden Energy Marine Corp, of Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro. Marshall Islands
MH96960 and includes its successors in title;

 

“HoldCo Corporate Guarantee” means the corporate guarantee executed or
(as the context may require) to be executed by HoldCo in favour of the Security
Agent in the form set out in schedule 10;

 

“HoldCo Group” means HoldCo and its Subsidiaries from time
to time and “member of HoldCo Group” shall be
construed accordingly;

 

“HSH Master Agreement Security Deed” means the security deed executed or (as the
context may require) to be executed by the Borrowers in favour of the Security
Agent In relation to certain of the rights of the Borrowers under the HSH
Master Swap Agreement in such form as the Agent (acting on the instructions of
all the Banks) may require in its reasonable discretion;

 

“HSH Master Swap Agreement” means the agreement made or (as the context
may require) to be made between the HSH Swap Provider and the Borrowers,
comprising an ISDA Master Agreement (including the Schedule thereto) in
the form set out in schedule 9 and includes any Designated Transactions
from time to time entered into thereunder and any Confirmations from time to
time exchanged thereunder and governed thereby;

 

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

 

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

 

5

 

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

 

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

 

“Interest Period” means each period for the calculation of interest
in respect of the Loan ascertained in accordance with clauses 3.2. and 3.3,

 

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

 

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

 

“LIBOR” means in relation to a particular period:

 

(a)                                  the rate per annum for deposits of Dollars
for a period equivalent to such period at or around 11:00 a.m. on the
Quotation Date for such period as displayed on Reuters BBA page LIBOR01
(and, for the purposes of this Agreement. “Reuters BBA page LIBOR01” means the
display designated as “Reuters BBA page LIBOR01” on the Telerate Service
or such other page as may replace “Reuters BBA page L1BOR01” on the
Telerate Service for the purpose of displaying rates comparable to that rate or
on such other service as may be nominated by the British Bankers’ Association
for the purpose of displaying BBA Interest Settlement Rates (as defined in the
British Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS” terms) dated August, 1996) for Dollars)); or

 

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

 

“Liquid Funds” means cash in hand or held with banks or
other financial institutions which is free of any Encumbrances (except for
Encumbrances in favour of the Creditors or any of them);

 

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

 

“Liquidity Account Pledge” means the first priority pledge executed or
(as the context may require) to be executed by Sub-HoldCo in favour of the
Security Agent and/or the Banks and/or any other Creditor in respect of the
Liquidity Account in such form as the Agent (acting on the instructions of all
the Banks) may require in its reasonable discretion;

 

6

 

“Loan” means the aggregate principal amount
borrowed by the Borrowers on the Drawdown Date or (as the context may require)
the aggregate principal amount owing to the Banks under this Agreement at any
relevant time;

 

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

 

“Management Agreements” means, together, the Commercial Management
Agreements and the Technical Management Agreements and, in relation to a Ship,
the Commercial Management Agreement and the Technical Management Agreement for
such Ship and “Management Agreement” means any
of them;

 

“Manager” means:

 

(a)                                  in relation to the technical management of
the Ships, the Technical Manager; or

 

(b)                                 in relation to the commercial management of
the Ships, the Commercial Manager,

 

and “Managers”
means either or both of them;

 

“Manager’s Undertaking” means, in relation to a Ship, each of the
manager’s undertakings executed or (as the context may require) to be executed
by each of the Managers in favour of the Security Agent in respect of such
Ship, in such form as the Agent (acting on the instructions of all the Banks)
may require in its reasonable discretion and “Manager’s
Undertakings” means, in relation to a Ship, either or both of them
and, in relation to any or all of the Ships, any or all of such Manager’s
Undertakings;

 

“Mandatory Cost” means, in relation to any period, a
percentage calculated by the Agent for such period at an annual rate determined
by the application of the formula set out in schedule 8;

 

“Margin” means zero point eight seven five per cent
(0.875%) per annum;

 

“Master Agreement Security Deed” means:

 

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

 

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

 

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

 

“Master Swap Agreement” means:

 

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

 

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

 

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

 

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

 

7

 

 

Banking Day it shall end on
the preceding Banking Day and “months” and “monthly” shall be construed accordingly;

 

“Mortgage” means, in relation to a Ship, the first
priority statutory Isle of Man mortgage of such Ship, executed or (as the
context may require) to be executed by the relevant Borrower in favour of the
Security Agent in such form as the Agent (acting on the instructions of all the
Banks) may require in its reasonable discretion and “Mortgages”
means any or all of them;

 

“Mortgaged Ship” means, at any relevant time, any Ship which is
at such time subject to a Mortgage and/or the Earnings, Insurances and
Requisition Compensation of which are subject to an Encumbrance pursuant to the
relevant Ship Security Documents and a Ship shall, for the purposes of this
Agreement, be deemed to be a Mortgaged Ship as from whichever shall be the
earlier of (a) the Drawdown Date and (b) the date that the Mortgage
of that Ship shall have been executed and registered in accordance with this
Agreement until whichever shall be the earlier of (i) the payment in full
of the amount required to be paid by the Borrowers pursuant to clause 4.3
following the sale or Total Loss of such Ship or following the discharge of the
relevant Mortgage pursuant to clause 8.4.1 and (ii) the date on which all
moneys owing under the Security Documents have been repaid in full;

 

“Operating Account” means, in relation to each Borrower, the
interest bearing Dollar account of such Borrower opened or (as the context may
require) to be opened by such Borrower with the relevant Operating Account Bank
and includes any sub-accounts thereof and any other account requested by the
relevant Borrower in writing and approved in writing by the Agent (acting
following authorisation by the Majority Banks) (such approval not to be
unreasonably withheld) to be an Operating Account of such Borrower for the
purposes of this Agreement, and “Operating Accounts”
means any or all of them;

 

“Operating Account Bank” means, in relation to a Borrower, Citibank
International plc of 47-49 Akti Miaouli, Piraeus 185 36, Greece or any other
bank or financial institution requested by such Borrower in writing and
approved in writing by the Agent (acting following authorisation by the
Majority Banks) (such approval not to be unreasonably withheld) as the
Operating Account Bank for such Borrower for the purposes of this Agreement,
and includes its successors in title;

 

“Operating Account Pledge” means, in relation to an Operating Account,
the first priority pledge or charge or (as the case may be) assignment of, over
or in respect of such Operating Account executed or (as the context may
require) to be executed by the relevant Borrower in favour of the Security
Agent and/or the Banks and/or any other Creditor in such form as the Agent
(acting on the instructions of all the Banks) may require in its reasonable
discretion and “Operating Account Pledges” means
any or all of them;

 

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

 

“Participating Member State” means any member of the European Union that
adopts or has adopted the euro as its lawful currency in accordance with the
legislation of the European Community relating to the Economic and Monetary
Union;

 

“Permitted Borrowed Money” means Borrowed Money by way of any loans
made to any Borrower by its shareholders, its directors or any other member of
the HoldCo Group Provided that:

 

(c)                                  if an Event of Default has occurred and is
continuing at the time any such Borrowed Money is incurred, the Borrowers have
advised in writing the Agent of, and the Agent (acting on the instructions of
the Majority Banks) in its sole discretion has approved in writing, such
Borrowed Money before it is incurred; and

 

(d)                                 the Borrowers have provided the Agent with
evidence satisfactory to the Agent (acting on the instructions of the Majority
Banks) in its sole discretion, that such loans are 

 

 

8

 

unsecured and fully
subordinated towards any amounts owing to the Creditors or any of them under
the Security Documents;

 

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

 

“Permitted Liens” means, in relation to a Ship:

 

(a)                                  any lien on such Ship for master’s, officer’s
or crew’s wages outstanding in the ordinary course of trading;

 

(b)                                 any lien on such Ship for salvage;

 

(c)                                  liens arising by operation of law for not
more than two (2) months prepaid hire under any charter in relation to
such Ship not prohibited by this Agreement or the relevant Ship Security
Documents;

 

(d)                                 liens for master’s disbursements incurred in
the ordinary course of trading and any other lien arising by operation of law
or otherwise in the ordinary course of the operation, repair or maintenance of
such Ship, provided such liens do not secure amounts more than sixty (60) days
overdue (unless the overdue amount is being contested by the relevant Borrower
in good faith by appropriate steps) and, in the case of liens for repair or
maintenance, subject to the relevant provisions of the Deed of Covenant for
such Ship;

 

(e)                                  any ship repairer’s or outfitter’s possessory
lien on such Ship for a sum not
(except with the prior written consent of the Agent (acting on the instructions
of the Majority Banks) which shall not be unreasonably withheld) exceeding the
Casualty Amount for such Ship and subject to the relevant provisions of the
Deed of Covenant for such Ship;

 

(f)                                    any Encumbrance on such Ship created in
favour of a plaintiff or defendant in any action of the court or tribunal
before which such action is brought as security for costs and expenses where
the relevant Borrower is prosecuting or defending such action in good faith by
appropriate steps Provided that the subject matter of such action, when
aggregated with the subject matter of any other such action in respect of such
Ship; does not exceed the amount of $750,000;

 

(g)                                 any Encumbrance on such Ship arising by
operation of law in respect of taxes (i) which are not overdue for payment
and (ii) which are contested in good faith by appropriate steps and (iii) in
respect of which appropriate reserves have been made; and

 

(h)                                 brokers’ liens on policies of insurance in
relation to such Ship;

 

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

 

“Purchase Price” means the aggregate price payable or (as the
context may require) paid by Sub-HoldCo to the Seller pursuant to the Contract
for the purchase of all the shares in the Borrowers, as the same may be
determined by the terms of such Contract;

 

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

 

“Reference Banks” in relation to LIBOR and Mandatory Cost
means, together, the principal London offices of HSH Nordbank AG, Credit Suisse
and Deutsche Schiffsbank AG and/or any other Bank appointed as such pursuant to
clause 16.22:

 

9

 

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

 

“Related Company” of a person means any Subsidiary of such
person, any company or other entity of which such person is a Subsidiary and
any Subsidiary of any such company or entity;

 

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

 

“Relevant Ships” means, together, the-Ships and any other
vessel from time to time (whether before or after the date of this Agreement)
owned (directly or indirectly) by, or chartered to, any Security Party or
HoldCo and “Relevant Ship” means any of them;

 

“Repayment Dates” means, subject to clause 6.3, the First
Repayment Date and each of the dates falling at three (3) monthly
intervals after the First Repayment Date up to and including the date falling
one hundred and fourteen (114) months after the First Repayment Date;

 

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

 

“Security Agent” means HSH Nordbank AG of Gerhart-Hauptmann-Platz
50, 20095 Hamburg, Germany (or of such other address as may last have been
notified to the other parties to this Agreement pursuant to clause 17.1.3) or
such other person as may be appointed as security agent and trustee by the
Banks, the Agent and the Swap Providers pursuant to clause 16.14 and includes
its successors in title;

 

“Security Documents” means this Agreement, the Mortgages, the
Deeds of Covenant, the Account Pledges, the Manager’s Undertakings, the
Corporate Guarantees, the Trust Deed, the Master Swap Agreements, the Master
Agreement Security Deeds and any other documents as may have been or shall from
time to time after the date of this Agreement be executed to guarantee and/or
secure all or any part of the Loan, interest thereon and other moneys from time
to time owing by the Borrowers pursuant to this Agreement;

 

“Security Party” means the Borrowers, Sub-HoldCo or any other
person who may at any time be a party to any of the Security Documents (other
than the Creditors, HoldCo and the Managers);

 

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

 

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

 

(a)                                  for the purposes of clause 4.3, One hundred
and forty three per cent (143%) of the outstanding amount of the Loan at such
time; and

 

(b)                                 for the purposes of clause 8.2.1, One hundred
and twenty five per cent (125%) of the outstanding amount of the Loan at such
time;

 

“Security Value” means the amount in Dollars (as certified by
the Agent whose certificate shall, in the absence of manifest error, be
conclusive and binding on the Borrowers and the Banks) which, at any relevant
time, is the aggregate of (i) the market value of the Mortgaged Ships as
most recently determined in accordance with clause 8.2.2 and (ii) the
market value of any

 

10

 

additional security for the
time being actually provided to any of the Creditors pursuant to clause B.2;

 

“Seller” means Lincoln Finance Corp. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and
includes its successors in title;

 

“Ship” means each of the motor vessels listed in schedule 3,
registered in the ownership of the relevant Borrower through the relevant
Registry under the laws and flag of the relevant Flag State under the IMO
number specified opposite such Ship’s name in the column headed “IMO No.” in schedule 3, and “Ships”
means any or all of them;

 

“Ship Security Documents” means, in relation to a Ship, the Mortgage,
the Deed of Covenant and the Manager’s Undertakings in respect of such Ship;

 

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

 

“Sub-HoldCo” means Grand Prix Corp. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and
includes its successors in title;

 

“Sub-HoldCo Corporate Guarantee” means the corporate guarantee executed or
(as the context may require) to be executed by Sub-HoldCo in favour of the
Security Agent in such form as the Agent (acting on the instructions of the
Majority Banks) may require in its reasonable discretion;

 

“Sub-HoldCo Group” means Sub-HoldCo and its Subsidiaries from
time to time and “member of the Sub-HoldCo Group”
shall be construed accordingly;

 

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

 

“Swap Provider” means:

 

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

 

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

 

and
“Swap Providers” means either or both
of them;

 

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

 

“Technical Management Agreement” means, in relation to a Ship, the agreement
made or (as the context may require) to be made between the relevant Borrower
and the Technical Manager providing (inter alia) for the Technical Manager to
carry out the technical management of such Ship and “Technical
Management Agreements” means any or all of them;

 

“Technical Manager” means Enterprises Shipping and Trading S.A.
of 80 Broad Street, Monrovia, Republic of Liberia or such other person as may
be appointed from time to time by a Borrower as the technical manager of such
Borrower’s Ship with the prior written consent of the Agent acting on the
instructions of the Majority Banks (such consent not to be unreasonably
withheld) and includes its successors in title;

 

“Termination Date” means 30 December 2005 or such later
date as the Agent (acting on the instructions of the Majority Banks) in its
sole discretion may agree in writing;

 

11

 

“Total Commitment” means, at any relevant time, the aggregate
of the Commitments of all the Banks at such time;

 

“Total Loss” in relation to a Ship means:

 

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

 

(b)                                 the Compulsory Acquisition of such Ship; or

 

(c)                                  the hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation of such Ship (other than where the
same amounts to the Compulsory Acquisition of such Ship) by any Government
Entity, or by persons acting or purporting to act on behalf of any Government
Entity, unless such Ship be released and restored to the relevant Borrower from
such hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation within sixty (60) days after the occurrence thereof;

 

“Transaction” has, in relation to a Master Swap Agreement,
the meaning ascribed thereto in such Master Swap Agreement;

 

“Transfer Certificate” means a
certificate in substantially the form set out in schedule 6;

 

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

 

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

 

“Trust Deed” means a trust deed in the form, or
substantially in the form, set out in schedule 7;

 

“Trust Property” means (i) the security, powers, rights,
titles, benefits and interests (both present and future) constituted by and
conferred on the Security Agent under or pursuant to the Security Documents
(including, without limitation, the benefit of all covenants, undertakings,
representations, warranties and obligations given, made or undertaken to the
Security Agent in the Security Documents), (ii) all moneys, property and
other assets paid or transferred to or vested in the Security Agent or any
agent of the Security Agent or any receiver or received or recovered by the
Security Agent or any agent of the Security Agent or any receiver pursuant to,
or in connection with, any of the Security Documents whether from any Security
Party, HoldCo, either Manager or any other person and (iii) all moneys,
investments, property and other assets at any time representing or deriving
from any of the foregoing, including all interest, income and other sums at any
time received or receivable by the Security Agent or any agent of the Security
Agent or any receiver in respect of the same (or any part thereof);

 

“Underlying Documents” means, together, the Contract and the
Management Agreements; and

 

“US GAAP” means generally acceptable accounting
principles and practices in the U.S.A.,

 

1.3                               Headings

 

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

 

1.4                               Construction of certain terms

 

In this Agreement, unless
the context otherwise requires:

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.5                               Majority Banks

 

Where this Agreement or any
other Security Document provides for any matter to be determined by reference
to the opinion of the Majority Banks or to be subject to the consent or request
of the Majority Banks or for any action to be taken on the instructions in
writing of the Majority Banks, such opinion, consent, request or instructions
shall (as between the Banks) only be regarded as having been validly given or
issued by the Majority Banks if all the Banks shall have received prior notice
of the matter on which such opinion, consent, request or instructions are
required to be obtained and the relevant majority of Banks shall have given or
issued such opinion, consent, request or instructions but so that (as between
the Borrowers and the Banks) the Borrowers shall be entitled (and bound) to assume
that such notice shall have been duly received by each Bank and that the
relevant majority shall have been obtained to constitute Majority Banks whether
or not this is in fact the case.

 

1.6                               Banks’ Commitment

 

For the purposes of the
definition of “Majority Banks” in clause 1.2 and
the other provisions of this Agreement, references to the Commitment of a Bank
shall, if the Total Commitment has, at any relevant time, been reduced to zero,
be deemed to be a reference to the Commitment of that Bank immediately prior to
such reduction to zero.

 

2                                         The Total Commitment

 

2.1                               Agreement to lend

 

The Banks, relying upon each
of the representations and warranties in clause 7, agree to lend to the
Borrowers, jointly and severally, upon and subject to the terms of this
Agreement, the principal sum of up to One hundred and sixty seven million eight
hundred thousand Dollars ($167,800,000) in a single drawdown. The obligation of
each Bank under this Agreement shall be to contribute that proportion of the
Loan which, as at the Drawdown Date, its Commitment bears to the Total
Commitment.

 

13

 

2.2                               Obligations several

 

The obligations of the Banks
under this Agreement are several according to their respective Commitments
and/or Contributions; the failure of any Bank to perform such obligations or
the failure of either Swap Provider to perform its obligations under the
relevant Master Swap Agreement shall not relieve any other Creditor or the
Borrowers or any of them of any of their respective obligations or liabilities
under this Agreement or, as the case may be, either Master Swap Agreement nor
shall any Creditor be responsible for the obligations of any other Creditor
(except for its own obligations, if any, as a Bank or, as the case may be, as a
Swap Provider) under this Agreement or either Master Swap Agreement.

 

2.3                               Interests several

 

Notwithstanding any other
term of this Agreement (but without prejudice to the provisions of this
Agreement relating to or requiring action by the Majority Banks) the interests
of the Creditors are several and the amount due to any Creditor is a separate
and independent debt. Each Creditor shall have the right to protect and enforce
its rights arising out of this Agreement and it shall not be necessary for any
other Creditor to be joined as an additional party in any proceedings for this
purpose.

 

2.4                               Drawdown

 

Subject to the terms and
conditions of this Agreement, the Loan shall be made to the Borrowers following
receipt by the Agent from the Borrowers of a Drawdown Notice not later than
10:00 a.m. (Hamburg time) on the second Banking Day before the date on
which the Borrowers propose the Loan is made. A Drawdown Notice shall be
effective on actual receipt by the Agent and, once given, shall, subject as
provided in clause 3.6.1, be irrevocable.

 

2.5                               Amount

 

The aggregate amount of the
Loan shall not exceed One hundred and sixty seven million eight hundred
thousand Dollars ($167,800,000).

 

2.6                               Availability

 

Upon receipt of a Drawdown
Notice complying with the terms of this Agreement, the Agent shall promptly
notify each Bank and each Bank shall make available to the Agent its portion of
the Loan for payment by the Agent in accordance with clause 6.2. The Borrowers
acknowledge that payment of the Loan to Sub-HoldCo or the Seller in accordance
with clause 6.2, shall satisfy the obligation of the Banks to lend the Loan to
the Borrowers under this Agreement.

 

2.7                               Termination of Total
Commitment

 

Any part of the Total
Commitment which remains undrawn and uncancelled by the Termination Date shall
thereupon be automatically cancelled.

 

2.8                               Application of proceeds

 

Without prejudice to the
Borrowers’ obligations under clause 8.1.3, none of the Creditors shall have any
responsibility for the application of the proceeds of the Loan or any part
thereof by the Borrowers.

 

2.9                               Hedging transactions

 

2.9.1                                                If at any time the Borrowers wish to enter
into interest rate swap or other hedging transactions or instruments so as to
hedge all or any part of their exposure under this Agreement to interest rate
fluctuations, they shall advise in writing, and discuss with, the Agent their
hedging strategy in respect of such transactions or instruments and, when such

 

14

 

hedging strategy has been
discussed between the Borrowers and the Agent, the Borrowers shall advise the
Swap Providers in writing of such strategy.

 

2.9.2                                                Any such swap or hedging transaction or
instrument shall be entered into pursuant to the hedging strategy discussed
with the Agent pursuant to clause 2.9.1 and shall be concluded (a) with
either or both of the Swap Providers under the relevant Master Swap Agreements
and/or (b) with any other counterparty, Provided however that no such
transaction or instrument shall be concluded or entered into by the Borrowers
with a counterparty other than the Swap Providers, unless (i) the
Borrowers shall have first given both Swap Providers the opportunity to make an
offer for the same or an equivalent transaction or instrument and (ii) each
Swap Provider has made such an offer and (iii) the Borrowers have declined
the offers of both Swap Providers.

 

2.9.3                                                No such swap or other hedging transaction or
instrument shall be concluded or entered into with a Swap Provider unless the
relevant Swap Provider and the Agent first agree to it in writing. For the
avoidance of doubt, other than the Agent’s and the relevant Swap Provider’s
agreement in writing referred to in the preceding sentence, no other prior
approval is required by the Borrowers from any of the Creditors before
concluding any such swap or hedging transaction or instrument with a Swap
Provider.

 

2.9.4                                                If and when any such swap or hedging
transaction or instrument has been concluded or executed with a Swap Provider,
it shall constitute a Designated Transaction, and the Borrowers shall sign a
Confirmation with the relevant Swap Provider and advise the Banks and the other
Swap Provider through the Agent promptly after concluding any Designated
Transaction.

 

2.9.5                                                If and when any such swap or hedging
transaction or instrument has been concluded or executed with a counterparty
other than a Swap Provider, the Borrowers shall advise the Agent promptly after
concluding any such transaction or instrument.

 

3                                         Interest and Interest Periods

 

3.1                               Normal interest rate

 

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

 

3.2                               Selection of Interest
Periods

 

The Borrowers may by notice
received by the Agent not later than 10:00 a.m. (Hamburg time) on the
second Banking Day before the beginning of each Interest Period specify whether
such Interest Period shall have a duration of one (1) month, three (3) months,
six (6) months, nine (9) months or twelve (12) months or such other
period as the Borrowers and the Agent (acting on the Instructions of the
Majority Banks) may agree.

 

3.3                               Determination of Interest
Periods

 

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

 

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

 

15

 

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

 

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

 

3.4                               Default interest

 

If the Borrowers fail to pay
any sum (including, without limitation, any sum payable pursuant to this clause
3.4) within two (2) Banking Days from its due date for payment under any
of the Security Documents (other than a Master Swap Agreement), the Borrowers
shall pay interest on such sum on demand from the due date up to the date of
actual payment (as well after as before judgment) at a rate determined by the
Agent pursuant to this clause 3.4. The period beginning on such due date and
ending on such date of payment shall be divided into successive periods of not
more than three (3) months as selected by the Agent each of which (other
than the first, which shall commence on such due date) shall commence on the
last day of the preceding such period. The rate of interest applicable to each
such period shall be the aggregate (as determined by the Agent) of (a) two
per cent (2%) per annum, (b) the Margin, (c) LIBOR for such period
and (d) the Mandatory Cost. Such interest shall be due and payable on the
last day of each such period as determined by the Agent and each such day
shall, for the purposes of this Agreement, be treated as an Interest Payment
Date, provided that if such unpaid sum is an amount of principal which became
due and payable by reason of a declaration by the Agent under clause 10.2.2 or
a prepayment pursuant to clauses 3.6.2, 4.3, 8.2.1(a) or 12.1, on a date
other than an Interest Payment Date relating thereto, the first such period
selected by the Agent shall be of a duration equal to the period between the
due date of such principal sum and such Interest Payment Date and interest
shall be payable on such principal sum during such period at a rate of two per
cent (2%) above the rate
applicable thereto immediately before it shall have become so due and payable.
If, for the reasons specified in clause 3.6.1, the Agent is unable to determine
a rate in accordance with the foregoing provisions of this clause 3.4,
each Bank shall promptly notify the Agent of the cost of funds to such Bank and
interest on any sum not paid on its due date for payment shall be calculated at
a rate determined by the Agent to be two per cent (2%) per annum above the
aggregate of the Margin and the cost of funds to such Bank.

 

3.5                               Notification of Interest
Periods and interest rate

 

The Agent shall notify the
Borrowers and the Banks promptly of the duration of each Interest Period and of
each rate of interest (or, as the case may be default interest) determined by
it under this clause 3.

 

3.6                               Market disruption;
non-availability

 

3.6.1                                                If and whenever, at any time prior to the
commencement of any Interest Period:

 

(a)                                  the Agent shall have reasonably determined
(which determination shall, in the absence of manifest error, be conclusive)
that adequate and fair means do not exist for ascertaining LIBOR during such
Interest Period; or

 

(b)                                 none or only one of the Reference Banks
supplies the Agent with a quotation for the purposes of calculating LIBOR
(where such a quotation is required having regard to paragraph (b) of the
definition of “LIBOR” in clause 1.2); or

 

16

 

(c)                                  the Agent shall have received notification
from Banks with Contributions aggregating not less than one-third (1/3rd) of the Loan (or, prior to the
Drawdown Date, from Banks with Commitments aggregating not less than one-third
(1/3rd) of
the Total Commitment) (for the purposes of this clause 3.6, each Bank which
have given such notice to the Agent, an “Affected Bank”),
that deposits in Dollars are not available to such Banks in the London
Interbank Market in the ordinary course of business in sufficient amounts to
fund the Loan or their Contributions for such Interest Period or that LIBOR
does not accurately reflect the cost to such Banks of obtaining such deposits,

 

the Agent shall forthwith
give notice (a “Determination Notice”) thereof to
the Borrowers and to each of the Banks and the Swap Providers. A Determination
Notice shall contain particulars of the relevant circumstances giving rise to its
issue. After the giving of any Determination Notice the undrawn amount of the
Total Commitment shall not be borrowed by the Borrowers until notice to the
contrary is given to the Borrowers by the Agent that none of the events
specified in this clause 3.6.1 continues to exist.

 

3.6.2                                                During the period of ten (10) days after
any Determination Notice has been given by the Agent under clause 3.6.1, the
Agent shall negotiate in good faith with the Borrowers (but without incurring
any legal obligations) with a view to arriving at an alternative basis (the “Substitute Basis”) for each Bank (including an Affected
Bank) maintaining Its Contribution, failing which, the Borrowers shall, on
first demand by any Bank (including any Affected Bank) or within any other
time-limit determined by any Bank (including any Affected Bank), prepay the
Contribution of such Bank (including an Affected Bank) in full, together with
accrued interest thereon to the date of prepayment (calculated at the rate or
rates most lately applicable to the Loan) and all other sums payable by the
Borrowers to such Bank (including an Affected Bank) under the Security
Documents. In such a case the Borrowers shall pay to each Bank (including any
Affected Bank) such amount as may be determined by the Agent to be necessary to
compensate such Banks (including an Affected Bank) for the increased cost (if
any) of maintaining its Contribution during the period of negotiations referred
to in this clause 3.6 until the relevant prepayment of its Contribution.

 

3.6.3                                                The Substitute Basis may (without limitation)
include alternative interest periods, alternative currencies or alternative
rates of interest but shall include a margin above the cost of funds to the
Banks (agreed pursuant to clause 3.6.2) equivalent to the Margin.  Each Substitute Basis so agreed shall be
binding upon the Borrowers and shall take effect in accordance with its terms
from the date agreed in the Determination Notice until such time as the Agent
notifies the Borrowers that none of the circumstances specified in clause 3.6.1
continues to exist whereupon the normal interest rate fixing provisions of this
Agreement shall apply.

 

3.7                               Reference Banks quotations

 

If a Reference Bank is
unable or otherwise fails to furnish a quotation for the purposes of
calculating LIBOR, the interest rate shall be determined, subject to clause
3.6, on the basis of quotations furnished by the other Reference Banks.

 

4                                         Repayment and prepayment

 

4.1                               Repayment

 

The Borrowers shall repay
the Loan by thirty nine (39) instalments, one such Instalment to be repaid on
each of the Repayment Dates. Subject to the provisions of this Agreement, the
amount of each of the first to ninth instalments (inclusive) shall be
$4,500,000, the amount of each of the tenth to thirty-eighth instalments
(inclusive) shall be $3,660,000 and the amount of the thirty-ninth and final
instalment shall be $21,160,000 (comprising a repayment instalment of
$3,660,000 and a balloon payment of $17,500,000 (such balloon payment the “Balloon Instalment”)).

 

If the Total Commitment is
not drawn down in full, the amount of each repayment instalment (including the
Balloon Instalment) shall be reduced proportionately (i.e. pro rata).

 

17

 

 

4.2          Voluntary prepayment

 

The Borrowers may, upon
giving to the Agent not less than ten (10) Banking Days prior notice in
writing of their intention to make such prepayment, prepay the Loan in whole or
part (such part being in an amount of Five million Dollars ($5,000,000) or any
larger sum which is an integral multiple of Five million Dollars ($5,000,000))
on any Interest Payment Date relating to the part of the Loan to be repaid
without any premium or penalty whatsoever subject always to their obligations
under clause 4.4.

 

4.3          Prepayment on Total Loss, sale or refinancing

 

4.3.1                Before drawdown

 

On a Ship becoming a Total
Loss (or suffering damage or being involved in an incident which in the
reasonable opinion of the Agent will result in such Ship being subsequently
determined to be a Total Loss or otherwise prejudices the security) before the
Drawdown Date, the Total Commitment shall be reduced by an amount equal to the
Allocated Amount for that Ship and the obligation of the Banks to advance the
part of the Total Commitment that was so cancelled shall immediately cease.

 

4.3.2                After drawdown

 

On the Disposal Reduction
Date for the relevant Mortgaged Ship, the Borrowers shall prepay such part of
the Loan as is equal to the higher of (i) the Relevant Amount and (ii) such
amount in Dollars as shall ensure that, following the relevant prepayment, the
Security Value is not less than the Security Requirement.

 

4.3.3                Defined terms

 

For the purposes of this
clause 4.3:

 

(a)           “Allocated Amount” means, in relation to a Ship, the amount set
opposite such Ship’s name in the column headed “Allocated
Amount” in schedule 3;

 

(b)           “Applicable Fraction” means, in relation to a Mortgaged Ship, a
fraction having a numerator of an amount equal to the market value of such
Mortgaged Ship (as most recently determined in accordance with clause 8.2.2)
and a denominator of an amount equal to the aggregate market values of all of
the Mortgaged Ships (as most recently determined in accordance with clause
8.2.2), In each case as at the Disposal Reduction Date of such Mortgaged Ship;

 

(c)           “Disposal Reduction Date” means:

 

(i)            in relation to a Mortgaged Ship which has
become a Total Loss, its Total Loss Reduction Date; or

 

(ii)           in relation to a Mortgaged Ship which is sold
in accordance with the provisions of the relevant Ship Security Documents, the
date of completion of such sale by the transfer of title to such Mortgaged Ship
to the purchaser in exchange for payment of the relevant purchase price; or

 

(iii)          in relation to a Mortgaged Ship the Mortgage
of which is discharged in accordance with clause 8.4.1, the date of discharge
of such Mortgage by the Security Agent;

 

(d)           “Total Loss Reduction Date” means, in relation to a Mortgaged Ship which
has become a Total Loss, the date which is the earlier of:

 

18

 

(i)            the date falling one hundred and eighty (180)
days after that on which such Mortgaged Ship becomes a Total Loss; and

 

(ii)           the date upon which insurance proceeds are or
Requisition Compensation is received in respect of such Total Loss by the
relevant Borrower (or the Security Agent pursuant to the relevant Deed of
Covenant); and

 

(e)           “Relevant Amount” means, in relation to a Mortgaged Ship which
has become a Total Loss or is sold or the Mortgage of which is discharged in
accordance with clause 8.4.1, the amount in Dollars which is equal to the
amount of the Applicable Fraction multiplied by the amount of the Loan
outstanding as of the Disposal Reduction Date for such Mortgaged Ship.

 

4.3.4                Interpretation

 

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

 

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

 

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

 

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

 

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

 

(e)           in the case of hijacking, theft,
condemnation, capture, seizure, arrest, detention or confiscation of such Ship
(other than where the same amounts to Compulsory Acquisition of such Ship) by
any Government Entity, or by persons purporting to act on behalf of any
Government Entity, which deprives the relevant Borrower of the use of such Ship
for more than sixty (60) days, upon the expiry of the period of sixty (60) days
after the date upon which the relevant hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation occurred.

 

4.4          Amounts payable on prepayment

 

Any prepayment of all or
part of the Loan under this Agreement shall be made together with:

 

4.4.1                accrued interest on the amount to be prepaid to the date of such prepayment;

 

4.4.2                any additional amount payable under clauses
6.6 or 12.2; and

 

4.4.3                all other sums then due and payable by the
Borrowers to the Creditors under this Agreement or any of the other Security
Documents including, without limitation, any amounts payable under clause 11.

 

4.5          Notice of prepayment; reduction of repayment instalments

 

Every notice of prepayment
given under clause 4.2 shall be effective only on actual receipt by the Agent,
shall be irrevocable, shall specify the amount to be prepaid and shall oblige
the Borrowers to make such prepayment on the date specified. No amount prepaid
under this Agreement may be re-borrowed. Any amount prepaid pursuant to clauses
4.2, 4.3 or 8.2.1(a) shall be applied in reducing the repayment
instalments under clause 4.1 (including the Balloon

 

19

 

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

 

4.6          Unwinding of Designated Transactions

 

On or prior to any repayment
or prepayment of all or part of the Loan (including, without limitation,
pursuant to clauses 4.2, 4.3 or 8.2.1(a) or any other provision of this
Agreement), the Borrowers shall, upon the request of the Agent, wholly or
partially reverse, offset, unwind, cancel, close out, net out or otherwise
terminate one or more of the continuing Designated Transactions under either
Master Swap Agreement so that the notional principal amount of the continuing
Designated Transactions under both Master Swap Agreements thereafter remaining
does not and will not in the future (taking into account the scheduled
amortisation) exceed the amount of the Loan as reducing from time to time
thereafter pursuant to clause 4.1.

 

5              Fees and expenses

 

5.1          Fees

 

The Borrowers shall pay to
the Agent for its own account on the date of this Agreement and on each of the
dates falling at twelve (12) monthly intervals thereafter, so long as any
moneys are owing under the Security Documents, an agency fee in the amount
agreed between the Borrowers and the Agent in the Fees Letter. The fees
referred to in this clause 5.1 shall be payable by the Borrowers to the Agent,
whether or not any part of the Total Commitment is ever advanced and shall be,
in each case, non-refundable.

 

5.2          Expenses

 

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

 

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

 

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

 

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

 

5.3          Value added tax

 

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

 

5.4          Stamp and other duties

 

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

 

20

 

6              Payments and taxes; accounts
and calculations

 

6.1          No set-off or counterclaim

 

The Borrowers acknowledge
that in performing their obligations under this Agreement, the Banks will be
incurring liabilities to third parties in relation to the funding of amounts to
the Borrowers, such liabilities matching the liabilities of the Borrowers to
the Banks and that it is reasonable for the Banks to be entitled to receive
payments from the Borrowers gross on the due date in order that each of the
Banks is put in a position to perform its matching obligations to the relevant
third parties. Accordingly all payments to be made by the Borrowers under any
of the Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and, subject as provided in clause 6.6, free and clear of
any deductions or withholdings, in Dollars on the due date to such account of
the Agent at such bank in such place as the Agent may from time to time specify
for this purpose. Save as otherwise provided in this Agreement or any relevant
Security Documents, such payments shall be for the account of all Banks and the
Agent shall distribute such payments in like funds as are received by the Agent
to the Banks rateably in accordance with their respective Commitment (prior to
the Drawdown Date) or Contribution (following the Drawdown Date).

 

6.2          Payment by the Banks

 

All sums to be advanced by
the Banks to the Borrowers under this Agreement shall be remitted in Dollars on
the Drawdown Date to the account of the Agent at such bank as the Agent may
have notified to the Banks and shall be paid by the Agent on such date in like
funds as are received by the Agent to the account specified in the Drawdown
Notice.

 

6.3          Non-Banking Days

 

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

 

6.4          Calculations

 

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

 

6.5          Certificates conclusive

 

Any certificate or
determination of the Agent as to any rate of interest or any other amount
pursuant to and for the purposes of any of the Security Documents shall, in the
absence of manifest error, be conclusive and binding on the Borrowers and on
the Banks.

 

6.6          Grossing-up for Taxes - by the Borrowers

 

6.6.1                If at any time the Borrowers or any of them
are required to make any deduction or withholding in respect of Taxes (other
than Taxes on the net overall income of a Bank) from any payment due under any
of the Security Documents for the account of any Creditor or if the Agent or
the Security Agent is required to make any deduction or withholding from a
payment to another Creditor or withholding in respect of Taxes (other than
Taxes on the net overall income of a Bank) from any payment due under any of
the Security Documents, the sum due from the Borrowers or any of them in
respect of such payment shall be increased to the extent necessary to ensure
that, after the making of such deduction or withholding, the relevant Creditor
receives on the due date for such payment (and retains, free from any liability
in respect of such deduction or withholding), a net sum equal to the sum which
it would have received had no such deduction or withholding been required to be
made and the Borrowers shall indemnify each Creditor against any losses or
costs incurred by it by reason

 

21

 

of any failure of the
Borrowers or any of them to make any such deduction or withholding or by reason
of any increased payment not being made on the due date for such payment. The
Borrowers shall promptly deliver to the Agent any receipts, certificates or
other proof evidencing the amounts (if any) paid or payable in respect of any
deduction or withholding as aforesaid.

 

6.6.2                For the avoidance of doubt, clause 6.6.1 does
not apply in respect of sums due from the Borrowers to a Swap Provider under or
in connection with the relevant Master Swap Agreement as to which sums the
provisions of section 2(d) (Deduction or Withholding for Tax) of the
relevant Master Swap Agreement shall apply.

 

6.7          Grossing-up for Taxes - by the Banks

 

If at any time a Bank is
required to make any deduction or withholding in respect of Taxes (other than
Taxes on the net overall income of a Bank) from any payment due under any of
the Security Documents for the account of the Agent or the Security Agent, the
sum due from such Bank in respect of such payment shall be increased to the
extent necessary to ensure that, after the making of such deduction or
withholding, the Agent or, as the case may be, the Security Agent receives on
the due date for such payment (and retains free from any liability in respect
of such deduction or withholding) a net
sum equal to the sum which it would have received had no such deduction or
withholding been required to be made and each Bank shall indemnify the Agent
and the Security Agent against any losses or costs incurred by it by reason of
any failure of such Bank to make any such deduction or withholding or by reason
of any increased payment not being made on the due date for such payment.

 

6.8          Loan account

 

Each Bank shall maintain, in
accordance with its usual practice, an account evidencing the amounts from time
to time lent by, owing to and paid to it under the Security Documents. Each of
the Agent and the Security Agent shall maintain a control account (such control
account of the Security Agent being, in the case of a Mortgage in a statutory
form, the “Account Current” referred to in such
Mortgage) showing the Loan and other sums owing by the Borrowers under the
Security Documents and all payments in respect thereof being made from time to
time. The control account shall, in the absence of manifest error, be
conclusive as to the amount from time to time owing by the Borrowers under the
Security Documents.

 

6.9          Agent may assume receipt

 

Where any sum is to be paid
under the Security Documents to the Agent or, as the case may be, the Security
Agent for the account of another
person, the Agent or, as the case may be, the Security Agent may assume that
the payment will be made when due and the Agent or, as the case may be, the
Security Agent may (but shall not be obliged to) make such sum available to the
person so entitled. If it proves to be the case that such payment was not made
to the Agent or, as the case may be, the Security Agent, then the person to
whom such sum was so made available shall on request refund such sum to the
Agent or, as the case may be, the Security Agent together with interest thereon
sufficient to compensate the Agent or, as the case may be, the Security Agent
for the cost of making available such sum up to the date of such repayment and
the person by whom such sum was payable shall indemnify the Agent or, as the
case may be, the Security Agent for any and all loss or expense which the Agent
or, as the case may be, the Security Agent may sustain or incur as a
consequence of such sum not having been paid on its due date.

 

6.10        Partial payments

 

If, on any date on which a
payment is due to be made by the Borrowers under any of the Security Documents,
the amount received by the Agent from the Borrowers falls short of the total
amount of the payment due to be made by the Borrowers on such date then,
without prejudice to any rights or remedies available to the Agent, the
Security Agent and the Banks under any of the Security Documents, the Agent
shall apply the amount actually received from

 

22

 

the Borrowers in or towards
discharge of the obligations of the Borrowers under the Security Documents in
the following order, notwithstanding any appropriation made, or purported to be
made, by the Borrowers:

 

6.10.1              first, in or towards payment, on a pro-rata
basis, of any unpaid costs and expenses of the Agent and the Security Agent
under any of the Security Documents (other than the Master Swap Agreements);

 

6.10.2              secondly, in or towards payment of any fees
payable to the Arranger, the Agent or any of the other Creditors under, or in
relation to, the Security Documents (other than the Master Swap Agreements)
which remain unpaid;

 

6.10.3              thirdly, in or towards payment to the Banks,
on a pro rata basis, of any accrued interest which shall have become due under
any of the Security Documents (other than the Master Swap Agreements) but
remains unpaid;

 

6.10.4              fourthly, in or towards payment to the Banks,
on a pro rata basis, of any principal amount in respect of the Loan which shall
have become due but remains unpaid;

 

6.10.5              fifthly, in or towards payment to the Banks,
on a pro rata basis, for any loss suffered by reason of any such payment in
respect of principal not being effected on an Interest Payment Date relating to
the part of the Loan repaid and which amounts are so payable under this Agreement;

 

6.10.6              sixthly, in or towards payment to the
relevant person of any other sum which shall have become due under any of the
Security Documents (other than the Master Swap Agreements) but remains unpaid
(and, if more than one such sum so remains unpaid, on a pro rata basis); and

 

6.10.7              seventhly, in or towards payment to a Swap
Provider of any sums owing to it under the relevant Master Swap Agreement (and
if any sums are owing under both Master Swap Agreements, as between the Swap
Providers, on a pro rata basis).

 

The order of application set
out in clauses 6.10.2 to 6.10.6 may be varied by the Agent if the Majority
Banks so direct with prior written notice by the Agent to the Borrowers.

 

7              Representations and warranties

 

7.1          Continuing representations and
warranties

 

The Borrowers jointly and
severally represent and warrant to each Creditor that:

 

7.1.1                Due incorporation

 

each of the Borrowers, HoldCo
and the other Security Parties are duly incorporated and validly existing in
good standing under the laws of their respective countries of incorporation as
corporations or, as the case may be, companies having limited liability and
have power to carry on their respective businesses as they are now being
conducted and to own their respective property and other assets;

 

7.1.2                Corporate power

 

each of the Borrowers has
power to execute, deliver and perform its obligations under the Underlying
Documents and the Borrowers’ Security Documents to which it is or is to be a
party and to borrow the Total Commitment and each of the other Security Parties
and HoldCo has power to execute and deliver and perform its obligations under
the Underlying Documents and the Security Documents to which it is or is to be
a party; all necessary corporate, shareholder and other action has been taken
to authorise the execution, delivery

 

23

 

and performance of the same
and no limitation on the powers of any Borrower to borrow will be exceeded as a
result of borrowing the Loan or any part thereof;

 

7.1.3                Binding obligations

 

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

 

7.1.4                No conflict with other obligations

 

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

 

7.1.5                No litigation

 

no litigation the subject
matter of which is more than $500,000 nor any arbitration or administrative
proceeding is taking place, pending or, to the knowledge of the officers of any
of the Borrowers, threatened against any of the Borrowers or any other Security
Party which could have a material adverse effect on the business, assets or financial
condition of any of the Borrowers or any other Security Party;

 

7.1.6                No filings required

 

save for the registration of
the Mortgages under the laws of the relevant Flag State through the relevant
Registry, it is not necessary to ensure the legality, validity, enforceability
or admissibility in evidence of any of the Underlying Documents or any of the
Security Documents that they or any other instrument be notarised, filed,
recorded, registered or enrolled in any court, public office or elsewhere in
any Relevant Jurisdiction or that any stamp, registration or similar tax or
charge be paid in any Relevant Jurisdiction on or in relation to any of the
Underlying Documents or the Security Documents and each of the Underlying
Documents and the Security Documents is in proper form for its enforcement in
the courts of each Relevant Jurisdiction;

 

7.1.7                Choice of law

 

the choice of English law to
govern the Underlying Documents and the Security Documents (other than the
Mortgages and the Account Pledges), the choice of (i) the law of the
relevant Flag State to govern the Mortgages, (ii) the laws of the country
where each Operating Account is located to govern the Operating Account Pledge
in respect of such Operating Account and (iii) German law to govern the Liquidity
Account Pledge, and the submissions thereunder by the Security Parties and
HoldCo to the non-exclusive jurisdiction of the English courts are valid and
binding;

 

7.1.8                No immunity

 

neither the Borrowers nor
any other Security Party nor HoldCo nor any of their respective assets is
entitled to immunity on the grounds of sovereignty or otherwise from any legal

 

24

 

action or proceeding (which
shall include, without limitation, suit, attachment prior to judgement,
execution or other enforcement);

 

7.1.9                Consents obtained

 

every consent,
authorisation, licence or approval of, or registration with or declaration to,
governmental or public bodies or authorities or courts required by any Security
Party or HoldCo to authorise, or required by any Security Party or HoldCo in
connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of each of the Underlying Documents and each of the
Security Documents to which it is or is to be a party or the performance by
each Security Party and HoldCo of its obligations under the Security Documents
or the Underlying Documents to which it is or is to be a party has been
obtained or made and is in full force and effect and there has been no default
in the observance of any of the conditions or restrictions (if any) imposed in,
or in connection with, any of the same;

 

7.1.10              HoldCo Group corporate structure and
shareholdings

 

(a)           as of the Closing Date, each Borrower will be
a wholly-owned direct Subsidiary of Sub-HoldCo;

 

(b)           Sub-HoldCo is a wholly-owned direct
Subsidiary of HoldCo;

 

(c)           HoldCo is legally and ultimately beneficially
owned by such individuals as are specified in the section headed “Principal
Shareholders” of the Form F-1 in respect of HoldCo (filed in 19 September 2005
with the US Securities and Exchange Commission) to be the legal and ultimate
beneficial owners of all the shares in HoldCo as of the date of filing of such Form F-1;

 

(d)           HoldCo has, as of the date of this Agreement:

 

(i)            Golden Energy Management S.A. of Marshall
Islands and Golden Energy Management S.A. of Liberia, each as its wholly-owned
direct Subsidiary;

 

(ii)           three (3) wholly-owned direct
Subsidiaries, which own the companies referred to in sub-paragraphs (iii), (iv) and
(v) below;

 

(iii)          four (4) wholly-owned indirect
Subsidiaries, each of which owns one (1) medium-range handymax tanker;

 

(iv)          six (6) wholly-owned indirect
Subsidiaries, each of which owns one (1) panamax tanker or has executed a
shipbuilding contract for the construction and acquisition of one (1) panamax
tanker; and

 

(v)           two (2) wholly-owned indirect
Subsidiaries, each of which owns one (1) suezmax tanker.

 

in each case, the details of
which such Subsidiaries and. as the case may be, their vessels and shipbuilding
contracts have been disclosed in writing by the Borrowers to the Agent and/or
the Arranger in the negotiation of this Agreement;

 

(e)           as of the date of this Agreement, HoldCo has
no other direct or indirect Subsidiaries other than (i) the companies
referred to in paragraph (d) above and (ii) Sub-HoldCo and the
Borrowers; and

 

(f)            as of the date of this Agreement, Sub-HoldCo
has no direct or indirect Subsidiaries and, as of the Closing Date. Sub-HoldCo
will have no further Subsidiaries save for the Borrowers; and

 

25

 

7.1.11              No material adverse change

 

there has been no material
adverse change (which, for the avoidance of doubt, shall not, in the case of
HoldCo, concern any market fluctuation in the price of the shares of HoldCo on
NASDAQ):

 

(a)           in the business, assets, operations,
prospects or the financial position of any of the Borrowers and the Corporate
Guarantors from that described by or on behalf of the Borrowers or any other
Security Party or HoldCo to the Banks in the negotiation of this Agreement; or

 

(b)           in the ability of any of the Borrowers and
the Corporate Guarantors or any other Security Party to comply with-any of
their respective obligations under the Security Documents or any of them; or

 

(c)           in the legality, validity or enforceability
of any of the Security Documents or any of the rights or remedies of the
Creditors or any of them thereunder.

 

7.2          Initial representations and warranties

 

The Borrowers jointly and
severally further represent and warrant to each Creditor that:

 

7.2.1                Pari passu

 

the obligations of each
Borrower under this Agreement are direct, general and unconditional obligations
of such Borrower and rank at least pari passu with all other present and future
unsecured and unsubordinated Indebtedness of such Borrower except for
obligations which are mandatory preferred by operation of law and not by
contract;

 

7.2.2                No default under other Indebtedness

 

none of the Borrowers nor
HoldCo nor any other Security Party is (nor would with the giving of notice or
lapse of time or a combination thereof be) in breach of or in default under any
agreement relating to Indebtedness to which it is a party or by which it may be
bound;

 

7.2.3                Information

 

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

 

7.2.4                No withholding Taxes

 

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

 

26

 

7.2.5                No Default

 

no Default has occurred and
is continuing;

 

7.2.6                The Ships

 

each Ship will, on the
Drawdown Date, be:

 

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

 

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

 

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

 

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

 

7.2.7                Ships’ employment

 

none of the Ships is nor
will, on or before the Drawdown Date, be subject to any charter or contract or
to any agreement to enter into any charter or contract which, if entered into
after the date of the relevant Ship Security Documents would have required the
consent of the Agent or, as the context may require, the Security Agent and, on
or before the Drawdown Date, there will not be any agreement or arrangement
whereby the Earnings of such Ship may be shared with any other person;

 

7.2.8                Freedom from Encumbrances

 

none of the Ships, nor their
respective Earnings, Insurances or Requisition Compensation nor the Accounts
nor any other properties or rights which are, or are to be, the subject of any
of the Security Documents nor any part thereof will be, on the Drawdown Date,
subject to any Encumbrance (other than any Permitted Encumbrances);

 

7.2.9                Compliance with Environmental Laws and
Approvals

 

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

 

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

 

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

 

7.2.10              No Environmental Claims

 

there is no Environmental
Claim pending or, to the best of the Borrowers’ knowledge and belief,
threatened against any of the Borrowers or any of the Ships or any other
Relevant Ship or to the best of the Borrowers’ knowledge and belief (having
made due enquiry) any of their respective Environmental Affiliates;

 

27

 

7.2.11              No potential Environmental Claims

 

there has been no emission,
spill, release or discharge of a Pollutant from any of the Ships or any other
Relevant Ship which could give rise to an Environmental Claim;

 

7.2.12              ISPS Code

 

each Borrower shall have at
all times a valid and current ISSC in respect of its Ship and each Ship shall
be in compliance with the ISPS Code at all times;

 

7.2.13              Borrowers’ own account

 

in relation to the borrowing
by each Borrower of the Loan, the performance and discharge of its obligations
and liabilities under the Security Documents and the transactions and other
arrangements effected or contemplated by this Agreement, each Borrower is
acting for its own account and that the foregoing will not involve or lead to a
contravention of any law, official requirement or other regulatory measure or
procedure which has been implemented by any relevant regulatory authority or
otherwise to combat “money laundering”
(as defined in Article 1 of the Directive (91/308/EEC) of the Council of
the European Communities (as amended)); and

 

7.2.14              Copies true and complete

 

the copies of the Underlying
Documents delivered or to be delivered to the Agent pursuant to clause 9.1 are,
or will when delivered be, true and complete copies of such documents; and such
documents constitute valid and binding obligations of the parties thereto
enforceable in accordance with their respective terms and there have been no
amendments or variations thereof or defaults thereunder.

 

7.3          Repetition of representations and warranties

 

On and as of the Drawdown
Date and (except in relation to the representations and warranties in clause
7.2) on each Interest payment Date, the Borrowers shall:

 

(a)           be deemed to repeat the representations and
warranties in clauses 7.1 and 7.2 as if made with reference to the facts and
circumstances existing on such day;

 

(b)           be deemed to further represent and warrant to
each of the Creditors that the then latest audited and unaudited consolidated
financial statements delivered to the Agent and/or the Security Agent by HoldCo
and its Subsidiaries (if any) have been prepared in accordance with US GAAP
which have been consistently applied and present fairly and accurately the
consolidated financial position of HoldCo and its Subsidiaries as at the end of
the financial period to which the same relate and the consolidated results of
the operations of HoldCo and its Subsidiaries for the financial period to which
the same relate and, as at the end of such financial period, neither HoldCo nor
any of its Subsidiaries had any significant liabilities (contingent or
otherwise) or any unrealised or anticipated losses which are not disclosed by,
or reserved against or provided for in, such financial statements; and

 

(c)           be deemed to further represent and warrant to
each of the Creditors that the then latest annual and semi-annual management
accounts of the Borrowers and of SubHoldCo and its Subsidiaries delivered to
the Agent and/or the Security Agent by SubHoldCo and its Subsidiaries (if any)
present fairly and accurately the financial position of SubHoldCo and its
Subsidiaries as at the end of the financial period to which the same relate and
the results of the operations of SubHoldCo and its Subsidiaries for the
financial period to which the same relate and, as at the end of such financial
period, neither SubHoldCo nor any of its Subsidiaries had any significant
liabilities (contingent or otherwise) or any unrealised or anticipated losses
which are not disclosed by, or reserved against or provided for in, such
financial statements.

 

28

 

8              Undertakings

 

8.1          General

 

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

 

8.1.1                Notice of Default

 

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

 

8.1.2                Consents and licences

 

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

 

8.1.3                Use of proceeds

 

use the Loan exclusively for
the purpose specified in clause 1.1;

 

8.1.4                Pari passu

 

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

 

8.1.5                Financial statements

 

prepare or cause to be
prepared audited consolidated financial statements of HoldCo and its
Subsidiaries in accordance with US GAAP consistently applied in respect of each
financial year (commencing with the financial year ending 31 December 2005)
and cause the same to be reported on by its auditors and prepare or cause to be
prepared unaudited consolidated financial statements of HoldCo and its
Subsidiaries in respect of each half year (commencing with the financial
half-year ending 30 June 2005) on the same basis as the annual statements
and prepare or cause to be prepared annual and semi-annual management accounts
of the Borrowers and of SubHoldCo and its Subsidiaries and, in each case,
deliver as many copies of the same as the Agent may reasonably require as soon
as practicable but not later than one hundred and eighty (180) days (in the
case of audited financial statements and annual management accounts) or ninety
(90) days (in the case of unaudited financial statements or semi-annual
management accounts) after the end of the financial period to which they
relate;

 

29

 

8.1.6                Provision of further information

 

provide the Agent with such
Financial or other information concerning any Borrower, the other Security
Parties, HoldCo and their respective affairs as the Agent (acting on the
instructions of the Majority Banks) may from time to time reasonably require;

 

8.1.7                Obligations under Security Documents

 

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

 

8.1.8                Valuations

 

(a)           at the same time as the Borrowers provide the Agent and/or HoldCo
provides the Security Agent with semi-annual financial statements or semi-annual
management accounts pursuant to clause 8.1.5 of this Agreement and clause 5.1.3
of the HoldCo Corporate Guarantee, respectively, provide the Agent with their
estimate in writing of the then market value of:

 

(i)            each Mortgaged Ship; and

 

(ii)           every other ship owned from time to time by a
member of the HoldCo Group referred to in

paragraph (b) of the definition “Tangible Fixed Assets” in clause 1.2 of
the HoldCo Corporate Guarantee and which is included in such financial
statements,

 

each such estimate to be
prepared and made on the same basis as the valuations referred to in clause
8.2.2; and

 

(b)           (i)          at
the same time as the Borrowers provide the Agent and/or HoldCo provides the
Security Agent with annual financial statements or annual management accounts
pursuant to clause 8.1.5 of this Agreement and clause 5.1.3 of the HoldCo
Corporate Guarantee, respectively; and

 

(ii)           if, following the estimate given by the
Borrowers pursuant to clause 8.1.8(a), any Bank in its reasonable discretion
notifies in writing the Agent that it disagrees with such estimate, promptly
after the Agent has received such notice and has advised the Borrowers in
writing thereof,

 

provide the Agent with two (2) or,
as the case may be, three (3) valuations of:

 

(A)          each Mortgaged Ship; and

 

(B)           every other ship owned from time to time by a
member of the HoldCo Group referred to in

paragraph (b) of the definition “Tangible Fixed Assets” in clause 1.2 of
the HoldCo Corporate Guarantee and which is included in such financial
statements,

 

each such valuation made in
accordance with clause 8.2.2;

 

8.1.9                Compliance with Code

 

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

 

30

 

 

8.1.10              Withdrawal of DOC and SMC

 

and will procure that the
Technical Manager and/or any Operator will, immediately inform the Agent if
there is any threatened or actual withdrawal of such Operator’s DOC or the SMC
in respect of any of the Ships;

 

8.1.11              Issuance of DOC and SMC

 

and will procure that any
Operator will, promptly inform the Agent upon the issue to any of the Borrowers
or any Operator of a DOC and to any of the Ships of an SMC or the receipt by
any of the Borrowers or any Operator of notification that its application for
the same has been refused;

 

8.1.12              ISPS Code compliance

 

and will procure that the
Technical Manager or any Operator of a Ship will:

 

(a)           maintain at all times a valid and current
ISSC in respect of such Ship;

 

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

 

(c)           procure that such Ship will comply at all
times with the ISPS Code;

 

8.1.13              Charters

 

without prejudice to the
rights of the Security Agent under the provisions of the other Security
Documents, advise the Agent promptly of any charterparty in respect of any Ship
of twelve (12) months or longer (including any optional extensions thereof) and
(a) deliver a certified copy of each such charter to the Agent forthwith
after its execution, (b) forthwith following the Agent’s demand, procure
that (i) the relevant Borrower executes a notice of assignment (in the
form set out in the relevant schedule of the relevant Deed of Covenant) of
the Earnings of such Ship payable under the relevant charter and (ii) following
the occurrence of an Event of Default which is continuing, such notice of
assignment is served on the relevant charterer and that the relevant charterer
signs an acknowledgement of such notice (in the form set out in the relevant schedule of
the relevant Deed of Covenant) and (c) pay on the Agent’s demand all legal
and other costs incurred by the Agent and/or the Security Agent in connection
with or in relation to any such notice of assignment and the acknowledgement
thereof; and

 

8.1.14              Operating Account

 

(a)           deliver to the Agent on a monthly basis and
at any other time as the Agent may require from time to time, a bank statement
of the Operating Accounts; and

 

(b)           procure that the Operating Account Bank
(whether by countersigning the relevant Operating Account Pledge or by
accepting service thereof or by signing an acknowledgement of a notice of
assignment pursuant thereto) shall, forthwith following the opening of an
Operating Account, waive and/or forego any rights and/or banker’s liens and/or
any other Encumbrances it may have in, to, over or in relation to such
Operating Account, for the benefit and in favour of the Security Agent or, as
the case may be, the Banks or any other Creditor, its rights and any
Encumbrance created in its favour pursuant to or by the Operating Account
Pledge in respect of such Operating Account.

 

31

 

8.2          Security value maintenance

 

8.2.1                Security shortfall

 

If at any time the Security
Value shall be less than the Security Requirement, the Agent (acting on the
instructions of the Majority Banks) shall give notice in writing to the
Borrowers requiring that such deficiency be remedied and then the Borrowers
shall either:

 

(a)           prepay within a period of thirty (30) days of
the date of receipt by the Borrowers of the Agent’s said notice such sum in
Dollars as will result in the Security Requirement after such prepayment
(taking into account any other repayment of the Loan made between the date of
the notice and the date of such prepayment) being equal to the Security Value;
or

 

(b)           within thirty (30) days of the date of
receipt by the Borrowers of the Agent’s said notice constitute to the
satisfaction of the Agent (acting on the instructions of the Majority Banks)
such further security for the Loan as shall be acceptable to the Banks
(including, without limitation, security by way of a cash deposit held in a
bank account or accounts acceptable to the Agent (acting on the instructions of
the Majority Banks) and pledged in favour of the Creditors or any of them but
excluding, for the avoidance of doubt, moneys held from time to time in any
Account) having a value for security purposes (as determined by the Agent in
its absolute discretion) at the date upon which such further security shall be
constituted which, when added to the Security Value, shall not be less than the
Security Requirement as at such date.

 

The provisions of clauses
4.4 and 4.5 shall apply to prepayments made under this clause 8.2.1(a).

 

8.2.2                Valuation of Mortgaged Ships

 

Each of the Mortgaged Ships
shall, for the purposes of this Agreement, be valued in Dollars:

 

(a)           at any time when the Agent (acting on the
instructions of the Majority Banks) shall require for the purposes of
calculating the amount required to be prepaid pursuant to clause 4.3 Provided
that:

 

(i)            the Agent shall not require valuations of the
Mortgaged Ships in accordance with this clause 8.2.2(a), if the Agent has
already received valuations of the Mortgaged Ships in accordance with this
clause 6.2.2 and such valuations are dated not more than one (1) month
prior to the date when the Agent has to calculate the relevant amount required
to be prepaid pursuant to clause 4.3; and

 

(ii)           the Agent shall be obliged to require
valuations of the Mortgaged Ships in accordance with this clause 8.2.2(a), if
the Agent has never received valuations of the Mortgaged Ships in accordance
with this clause 8.2.2 or if the Agent’s most recent valuations of the
Mortgaged Ships in accordance with this clause 8.2.2 are dated more than one (1) month
prior to the date when the Agent has to calculate the relevant amount required
to be prepaid pursuant to clause 4.3; and

 

(b)           at any other time as and when the Agent shall
require.

 

in each case by two (2) Approved
Brokers. One such Approved Broker shall be nominated by the Borrowers or,
failing that, by the Agent and the other such Approved Broker shall be
nominated by the Agent. Each such valuation shall be addressed to the Agent and
made without, unless required by the Agent (acting on the instructions of the
Majority Banks), physical inspection, and on the basis of a sale for prompt
delivery for cash at arm’s length on normal commercial terms as between a
willing buyer and a willing seller without taking into account the benefit of
any charterparty or other engagement concerning the relevant Mortgaged Ship.
The arithmetic mean of such valuations shall constitute the value of such Mortgaged
Ship for the purposes of this clause 8.2. If the two (2) valuations vary
between

 

32

 

them by more than fifteen
per cent (15%), the Agent shall appoint in its sole discretion a third Approved
Broker to value the Mortgaged Ship on the same basis as the other two (2) valuations
and, in that case, the arithmetic mean of all three (3) such valuations
shall then constitute the value of such Mortgaged Ship for the purposes of this
clause 8.2.

 

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

 

8.2.3                Information

 

The Borrowers jointly and
severally undertake with the Creditors to supply to the Agent and to any such shipbrokers
such information concerning the relevant Mortgaged Ship and its condition as
such shipbroker may require for the purpose of making any such valuation.

 

8.2.4                Costs

 

All costs in connection with
the Agent and/or the Security Agent obtaining:

 

(a)           any valuation of any Mortgaged Ship pursuant
to clause 8.2.2(a);

 

(b)           any valuation of any Mortgaged Ship and any
other ship owned from time to time by a member of the HoldCo Group pursuant to
clause 8.1.8(b) of this Agreement or clause 5.1.5(b) of the HoldCo
Corporate Guarantee;

 

(c)           any valuation either of any additional
security for the purposes of ascertaining the Security Value at any time or
necessitated by the Borrowers electing to constitute additional security
pursuant to clause 8.2.1(b); and

 

(d)           provided a Default shall have occurred and be
continuing, any valuation of any Mortgaged Ship pursuant to clause 8.2.2(b).

 

shall be borne by the
Borrowers.

 

8.2.5                Valuation of additional security

 

For the purpose of this
clause 8.2, the value of any additional security provided or to be provided to
the Agent shall be determined by the Agent (acting on the instructions of the
Majority Banks) in its absolute discretion without any necessity for the Agent
assigning any reason thereto Provided however that (a) if the additional
security is in the form of a cash deposit which is free from any Encumbrances,
full credit shall be given for such cash on a Dollar for Dollar basis and (b) if
the additional security is a ship which is free from any Encumbrances, its
value will be determined by valuations obtained by the Agent and made in
accordance with clause 8.2.2.

 

8.2.6                Documents and evidence

 

In connection with any
additional security provided in accordance with this clause 8.2, the Agent
shall be entitled to receive such evidence and documents of the kind referred
to in schedule 5 as may in the Agent’s opinion (acting on the instructions
of the Majority Banks) be appropriate and such favourable legal opinions as the
Agent (acting on the instructions of the Majority Banks) shall in its absolute
discretion require.

 

8.3          Negative undertakings

 

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

 

33

 

consent of the Agent acting
on the instructions of the Majority Banks (such consent not to be unreasonably
withheld and the request for which to be responded to within reasonable time):

 

8.3.1                Negative pledge

 

permit any Encumbrance
(other than a Permitted Encumbrance) to subsist, arise or be created or
extended over all or any part of their respective present or future
undertakings, assets, rights or revenues to secure or prefer any present or
future Indebtedness or other liability or obligation of any Borrower or any
other person:

 

8.3.2                No merger

 

merge or consolidate with
any other person or enter into any demerger, amalgamation or corporate
redomiciliation;

 

8.3.3                Disposals

 

subject to clause 8.4.2,
sell, transfer, abandon, lend or otherwise dispose of or cease to exercise
direct control over any part of their present or future undertaking, assets,
rights or revenues (otherwise than by transfers, sales or disposals for full
consideration in the ordinary course of trading) whether by one or a series of
transactions related or not;

 

8.3.4                Other business

 

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

 

8.3.5                Acquisitions

 

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

 

8.3.6                Other obligations

 

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

 

8.3.7                No borrowing

 

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

 

8.3.8                Repayment of borrowings

 

repay or prepay the
principal of, or pay interest on or any other sum in connection with any of
their Borrowed Money except for Borrowed Money pursuant to the Security
Documents and, provided no Event of Default has occurred and is continuing,
Permitted Borrowed Money;

 

8.3.9                Guarantees

 

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

 

34

 

8.3.10              Loans

 

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

 

8.3.11              Sureties

 

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

 

8.3.12              Subsidiaries

 

form or acquire any
Subsidiaries;

 

8.3.13              Contract

 

permit any change, variation
or amendment to or of the Contract which has the effect of reducing the
Purchase Price;

 

8.3.14              Shareholdings

 

change, cause or permit any
change in, the corporate structure of the Sub-HoldCo Group and/or in the direct
and/or indirect legal ownership and/or the ultimate beneficial ownership of any
of the Security Parties and HoldCo. in each case from that specified in clause
7.1.10 except that, in the case of HoldCo and following the listing of its
shares on NASDAQ, up to 49% of HoldCo’s shares may be ultimately beneficially
owned by parsons other than the individuals specified in the section headed
“Principal Shareholders” of the Form F-1 in respect of HoldCo (filed in 19
September 2005 with the US Securities and Exchange Commission) to be the
ultimate beneficial owners of 100% of the shares in HoldCo as of the date of
filing of Form F-1;

 

8.3.15              Share capital and distributions

 

purchase or otherwise
acquire for value any shares of its capital or distribute any of its present or
future assets, undertakings, rights or revenues to any of its shareholders (it
being understood, for the avoidance of doubt, that the Borrowers may declare or
pay dividends at any time);

 

8.3.16              Constitutional documents

 

permit, cause or agree to
any material amendment or variation of its constitutional documents;

 

8.3.17              Financial year

 

change its financial year
end; or

 

8.3.18              Designated Transactions

 

(a)           enter into any derivative transactions other
than Designated Transactions unless they have first given the Swap Providers
the opportunity to exercise their right of first refusal, as described in, and
in accordance with the provisions of, clause 2.9.2 but always subject to
paragraph (b) below; or

 

(b)           enter into any freight derivative
transactions of any type whatsoever with any
person.

 

35

 

 

8.4          Permitted Mortgage discharges and permitted Ship sales

 

8.4.1                Neither the Agent nor the Security Agent
(both acting on the instructions of the Majority Banks) shall unreasonably
withhold its consent under any provision of the Security Documents to the
discharge of a Mortgage over, and the other Ship Security Documents in relation
to, a Mortgaged Ship if (a) the Borrowers deliver to the Agent evidence
satisfactory to the Agent that such Mortgaged Ship shall be refinanced by
another bank or financial institution and (b) no Default has occurred and
is continuing or will, on the date of discharge of the relevant Mortgage, occur
and be continuing and (c) the Agent is satisfied that on or immediately
after the discharge of such Mortgage, the proceeds of the relevant refinancing
will be not less than such amount as may be required to be prepaid pursuant to
clause 4.3 as a result of such refinancing, together with all sums payable by
the Borrowers to the Creditors under clause 4.4 in respect of the relevant prepayment.

 

8.4.2                Neither the Agent nor the Security Agent
(both acting on the instructions of the Majority Banks) shall withhold its
consent under any provision of the Security Documents to The sale of a
Mortgaged Ship if (a) the Borrowers deliver to the Agent evidence
satisfactory to the Agent that such sale is or will be for the full value of
such Mortgaged Ship for payment in cash at arm’s length and upon normal
commercial terms and (b) no Default has occurred and is continuing or
will, on completion of such sale, occur and be continuing and (c) the
Agent is satisfied that on or immediately after the delivery of such Mortgaged
Ship to the relevant purchaser, the proceeds of sale of such Mortgaged Ship
(after deducting customary brokers’ commissions and any expenses related to
such sale) will be of an amount not less than such amount as may be required to
be prepaid pursuant to clause 4.3 as a result of such sale, together with all
sums payable by the Borrowers to the Creditors under clause 4.4 in respect of the
relevant prepayment.

 

9              Conditions

 

9.1          Documents and evidence

 

The obligation of each Bank
to make its Commitment available shall be subject to the condition that the
Agent, or its duly authorised representative, shall have received:

 

9.1.1                not later than two (2) Banking Days
before the day on which the Drawdown Notice is given, the documents and
evidence specified in Part 1 of schedule 5 in form and substance
satisfactory to the Agent; and

 

9.1.2                on or prior to the drawdown of the Loan, the
documents and evidence specified in Part 2 of schedule 5 in form and
substance satisfactory to the Agent.

 

9.2          General conditions precedent

 

The obligation of the Banks
to advance the Loan shall be subject to the further conditions that, at the time
of the giving of the Drawdown Notice, and at the time of the making of the
Loan:

 

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

 

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

 

9.3          Waiver of conditions precedent

 

The conditions specified in
this clause 9 are inserted solely for the benefit of the Banks and may be
waived by the Agent (acting on the instructions of the Majority Banks) in whole
or In part and with or without conditions.

 

36

 

9.4          Further conditions precedent

 

Not later than three (3) Banking
Days prior to the Drawdown Date, the Agent (acting on the instructions of the
Majority Banks) may request and the Borrowers shall, not later than one (1) Banking
Day prior to such date, deliver to the Agent on such request further relevant
certificates as to any or all of the matters which are the subject of clauses
7, 8, 9 and 10.

 

9.5          Conditions Subsequent

 

The obligation of each Bank
to maintain its Contribution shall be subject to the condition subsequent that
the Agent, or its duly authorised representative, shall have received, at the
same time as the Liquidity Account is opened (to be opened not later than
twenty (20) days after the Drawdown Date) by Sub HoldCo:

 

9.5.1                a duly executed Liquidity Account Pledge
together with legal opinions in form and substance satisfactory to the Agent
(acting on the instructions of the Majority Banks) covering the execution of
such pledge, which legal opinions shall include an opinion of Norton Rose,
special legal advisors on matters of German law, to the Agent; and

 

9.5.2                duly completed mandate forms in respect of
the Liquidity Account.

 

10           Events of Default

 

10.1        Events

 

There shall be an Event of
Default if:

 

10.1.1              Non-payment: any Security Party or HoldCo or either
Manager fails to pay any sum payable by it under any of the Security Documents
to which it is a party at the time, in the currency and in the manner
stipulated in the Security Documents or the Underlying Documents (and so that,
for this purpose, sums payable on demand shall be treated as having been paid
at the stipulated time if paid within three (3) Banking Days of demand and
all other sums shall be treated as having been paid at the stipulated time if
paid within two (2) Banking Days after their stipulated due date); or

 

10.1.2              Master Swap Agreements: (a) an Event of Default (in each case
as defined in the relevant Master Swap Agreement) has occurred and is
continuing with the Borrowers as the Defaulting Party (as defined in the
relevant Master Swap Agreement) under either Master Swap Agreement or (b) an
Early Termination Date has occurred or been or become capable of being
effectively designated under either Master Swap Agreement by the relevant Swap
Provider or (c) either Master Swap Agreement is terminated, cancelled,
suspended, rescinded or revoked or otherwise ceases to remain in full force and
effect for any reason; or

 

10.1.3              Breach of Insurance and certain
other obligations: any of
the Borrowers fails to obtain and/or maintain the Insurances for any of the
Mortgaged Ships or if any insurer in respect of such Insurances cancels the
Insurances or disclaims liability by reason, in either case, of mis-statement
in any proposal for the Insurances or for any other failure or default on the
part of any of the Borrowers or any other person or any of the Borrowers or
either of the Corporate Guarantors commits any breach of or omits to observe
any of the obligations or undertakings expressed to be assumed by the Borrowers
under clauses 8.1.5, 8.1.8, 8.2, 8.3, 8.4 or 9.5 or by HoldCo under clauses
5.1.3, 5.1.4, 5.1.6 or 5.2 of the HoldCo Corporate Guarantee or by Sub-HoldCo
under clauses 5.2 or 5.3 of the Sub-HoldCo Corporate Guarantee, respectively;
or

 

10.1.4              Breach of other obligations: any Security Party or HoldCo or either
Manager commits any breach of or omits to observe any of its obligations or
undertakings expressed to be assumed by it under any of the Security Documents
to which it is a party (other than those referred to in clauses 10.1.1, 10.1.2
and 10.1.3 above) and, in respect of any such breach or omission which in the
opinion of the Agent (following consultation with the Banks) is capable of

 

37

 

 

remedy, such action as the Agent (acting on the instructions of the
Majority Banks) may require shall not have been taken within fourteen (14) days
of the Agent notifying the relevant Security Party, HoldCo or the relevant
Manager of such default and of such required action; or

 

10.1.5              Misrepresentation: any representation or warranty made or
deemed to be made or repeated by or in respect of any Security Party, HoldCo or
either Manager in or pursuant to any of the Security Documents to which it is a
party or in any notice, certificate or statement referred to in or delivered
under any of the Security Documents is or proves to have been incorrect or
misleading in any material respect at the time it was made or, as the case may
be, repeated; or

 

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

 

(a)   the amount at any one time of all Indebtedness
of any Borrower in relation to which any of the foregoing events shall have
occurred and be continuing exceeds $750,000 (Seven hundred and fifty thousand
Dollars) or its equivalent in any other currency; or

 

(b)   the amount at any one time of all Indebtedness
of Sub-HoldCo in relation to which any of the foregoing events shall have
occurred and be continuing exceeds $2,000,000 (Two million Dollars) or its
equivalent in any other currency; or

 

(c)   the amount at any one time of all Indebtedness
of HoldCo in relation to which any of the foregoing events shall have occurred
and be continuing exceeds $5,000,000 (Five million Dollars) or its equivalent
in any other currency.

 

unless:

 

(i)    the relevant foregoing event is the
non-payment by a Security Party or (as the case may be) HoldCo of Indebtedness
when the same is due; and

 

(ii)   the relevant Security Party or (as the case
may be) HoldCo is contesting in good faith (to the satisfaction of the Agent
(acting on the instructions of the Majority Banks) in its sole discretion) that
the relevant payment has actually been made; and

 

(iii)  the Agent (acting on the instructions of the
Majority Banks) is satisfied in its sole discretion that, within five (5) Banking
Days from the date of the relevant non-payment or. as the case may be, alleged
non-payment, the creditor of such Indebtedness has admitted or acknowledged in
writing that the relevant payment has actually been made by the relevant
Security Party or (as the case may be) HoldCo.

 

For the avoidance of doubt, for the purposes of this clause 10.1.6,
Indebtedness shall exclude Indebtedness owing under this Agreement and/or the
other Security Documents; or

 

38

 

10.1.7              Legal process: any judgment or order in respect of an amount
in excess of $750,000 made against any Security Party or HoldCo is not stayed
or complied with within seven (7) days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is
levied or enforced upon or sued out against, any of the undertakings, assets,
rights or revenues of any Security Party or HoldCo and is not discharged within
seven (7) days, unless the Borrowers shall have fully satisfied the Agent
(acting on the instructions of the Majority Banks) in its sole discretion (by
providing to the Agent upon its request such evidence as the Agent (acting on
the instructions of the Majority Banks) may from time to time require) that
such distress, execution, sequestration or other process will not affect or
prejudice in any way the relevant Security Party’s or HoldCo’s ability to pay
its debts as they fall due or to fund its commitments; or

 

10.1.8              Insolvency: any Security Party or HoldCo is unable or
admits inability to pay its debts as they fall due; suspends making payments on
any of its debts or announces an intention to do so; becomes insolvent; has
assets the value of which is less than the value of its liabilities (taking
into account contingent and prospective liabilities); or suffers the
declaration of a moratorium in respect of any of its Indebtedness; or

 

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

 

10.1.10            Winding up: any corporate action, legal proceedings or
other procedure or step is taken for the purpose of winding-up any Security
Party or HoldCo or an order is made or resolution passed for the winding up of
any Security Party or HoldCo or a notice is issued convening a meeting for the
purpose of passing any such resolution, unless in the case of an involuntary
petition for any of the above (if applicable), such petition is being contested
in good faith and on substantial grounds and is dismissed or withdrawn within
thirty (30) days of its presentation; or

 

10.1.11            Administration: any petition is presented, notice given or
other step is taken for the purpose of the appointment of an administrator of
any Security Party or HoldCo or an administration order is made in relation to
any Security Party or HoldCo, unless, in the case of an involuntary petition
for any of the above (if applicable), such petition is being contested in good
faith and on substantial grounds and such petition is dismissed or withdrawn
within thirty (30) days of its presentation; or

 

10.1.12            Appointment of receivers and
managers: any administrative
or other receiver is appointed of any Security Party or HoldCo or any part of
its assets and/or undertaking or any other steps are taken to enforce any
Encumbrance over all or any part of the assets of any Security Party or HoldCo.
unless, in the case of any order for the appointment of any such officer, such
order shall have been made ex parte and
the relevant officer has not been removed (and the order withdrawn) within
thirty (30) days from the date the order is made; or

 

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

 

10.1.14            Analogous proceedings: there occurs, in relation to any Security
Party or HoldCo, in any country or territory in which any of them carries on
business or to the jurisdiction of whose courts any part of their assets is
subject, any event which, in the reasonable opinion of the Agent, appears in
that country or territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 10.1.8 and 10.1.10 to 10.1.13
(inclusive) or any Security Party or HoldCo otherwise becomes subject, in any
such country or territory, to the operation of any law relating to insolvency,
bankruptcy or liquidation; or

 

10.1.15            Cessation of business: any Security Party or HoldCo suspends or
ceases or threatens to suspend or cease to carry on its business except, in the
case of a Borrower, on or after a

 

39

 

sale of its Ship in the normal course of its business and in accordance
with the provisions of this Agreement; or

 

10.1.16            Seizure: all or a material part of the undertaking,
assets, rights or revenues of, or shares or other ownership interests in, any
Security Party or HoldCo are seized, nationalised, expropriated or compulsorily
acquired by or under the authority of any government (provided that, in the
case of shares in HoldCo, at least 10% of the outstanding shares in HoldCo has
been seized, nationalised, expropriated or compulsorily acquired by or under
the authority of any government); or

 

10.1.17            Invalidity: any of the Security Documents shall at any
time and for any reason become invalid or unenforceable or otherwise cease to
remain in full force and effect, or if the validity or enforceability of any of
the Security Documents shall at any time and for any reason be contested by any
Security Party or HoldCo which is a party thereto, or if any such Security
Party or HoldCo shall deny that it has any, or any further, liability
thereunder; or

 

10.1.18            Unlawfulness: it becomes impossible or unlawful at any time
for any Security Party or HoldCo, to fulfil any of the covenants and
obligations expressed to be assumed by it in any of the Security Documents to
which it is a party or for a Creditor to exercise the rights or any of them
vested in it under any of the Security Documents or otherwise; or

 

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

 

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

 

10.1.21            Material adverse change: there occurs, in the opinion of the Agent
(acting on the instructions of the Majority Banks), a material adverse change
(which, for the avoidance of doubt, shall not, in the case of HoldCo, concern
any market fluctuation in the price of the shares of HoldCo on NASDAQ):

 

(a)           in the business, assets, operations or
prospects of any Security Party or HoldCo; or

 

(b)           in the financial condition of any of the
Borrowers and the Corporate Guarantors from that described by or on behalf of
the Borrowers or any other Security Party to the Banks in the negotiation of
this Agreement; or

 

(c)           in the consolidated financial condition of
HoldCo and its Subsidiaries from that described by or on behalf of the
Borrowers or any other Security Party or HoldCo to the Banks in the negotiation
of this Agreement; or

 

(d)           in the ability of any Security Party or HoldCo
to comply with or perform any of its obligations under the terms of any of the
Security Documents, or

 

(e)           in the legality, validity or enforceability of
any of the Security Documents or the rights or remedies of the Creditors or any
of them thereunder; or

 

10.1.22            Arrest: any Ship is arrested, confiscated, seized,
taken in execution, impounded, forfeited, detained in exercise or purported
exercise of any possessory lien or other claim or otherwise taken from the
possession of the relevant Borrower and such Borrower shall fail to procure the
release of such Ship within a period of fourteen (14) Banking Days thereafter;
or

 

10.1.23            Registration: the registration of any Ship under the laws
and flag of the relevant Flag State is cancelled or terminated without the
prior written consent of the Majority Banks; or

 

40

 

10.1.24            Unrest: the Flag State of any Ship becomes involved
in hostilities or civil war or there is a seizure of power in the Flag State by
unconstitutional means if, in any such case (a) such event could in the
opinion of the Agent (acting on the instructions of the Majority Banks)
reasonably be expected to have a material adverse effect on the security
constituted by any of the Security Documents and (b) the relevant Borrower
has failed within thirty (30) days from receiving notice from the Agent (acting
on the instructions of the Majority Banks) to this effect to (i) delete
the relevant Ship from its existing Flag State and (ii) re-register such
Ship under another Flag State approved by the Agent (acting on the instructions
of the Majority Banks) in its sole discretion through a relevant Registry, or

 

10.1.25            Environment: any Borrower and/or any of its Environmental
Affiliates fails to comply with any Environmental Law or any Environmental
Approval or any of the Ships or any other Relevant Ship is involved in any
incident which gives rise or may give rise to an Environmental Claim if, in any
such case, such non-compliance or incident or the consequences thereof could,
in the reasonable opinion of the Agent (acting on the instructions of the
Majority Banks), reasonably be expected to have a material adverse effect on
the business, assets, operations, property or financial condition of any
Borrower or on the security constituted by any of the Security Documents; or

 

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

 

10.1.27            Shareholdings: save as otherwise expressly permitted by this
Agreement, there is any change in the corporate structure of the Sub-HoldCo
Group or in the direct and/or indirect legal ownership and/or the ultimate
beneficial ownership of any of the shares of any of the Security Parties and
HoldCo, in each case from that specified in clause 7.1.10; or

 

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

 

10.1.29            Accounts: moneys are withdrawn from any of the Accounts
other than in accordance with clause 14 of this Agreement and/or clause 5.3 of
the Sub-HoldCo Corporate Guarantee and/or the relevant Account Pledges; or

 

10.1.30            Material events: any other event occurs or circumstance arises
(which, for the avoidance of doubt, shall not, in the case of HoldCo, concern
any market fluctuation in the price of the shares of HoldCo on NASDAQ) which,
in the reasonable opinion of the Agent (following consultation with the Banks),
is likely materially and adversely to affect either (i) the ability of any
Security Party or HoldCo to perform all or any of its obligations under or
otherwise to comply with the terms of any of the Security Documents or any of
the Underlying Documents to which it is a party or (ii) the security
created by any of the Security Documents.

 

10.2        Acceleration

 

The Agent may, and if so requested by the Majority Banks shall, without
prejudice to any other rights of the Banks, at any lime after the occurrence of
an Event of Default which is continuing by notice to the Borrowers declare
that:

 

41

 

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

 

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

 

10.3        Demand basis

 

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

 

10.4        Position of Swap Providers

 

Neither the Agent nor the Security Agent shall be obliged, in connection
with any action taken or proposed to be taken under or pursuant to the
foregoing provisions of this clause 10, to have any regard to the requirements
of the Swap Providers except to the extent that either such Swap Provider is
also a Bank.

 

11           Indemnities

 

11.1        Miscellaneous indemnities

 

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

 

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

 

11.1.2              the occurrence of any other Event of Default;

 

11.1.3              any prepayment of the Loan or part thereof
being made under clauses 3.6.2. 4.3, 8.2.1(a) or 12.1 or any other
repayment or prepayment of the Loan or part thereof being made otherwise than
on an Interest Payment Date relating to the part of the Loan prepaid or repaid;
or

 

11.1.4              the Loan not being made for any reason
(excluding any default by the Agent or any Bank) after the Drawdown Notice has
been given,

 

including, in any such case, but not limited to, any loss or expense
sustained or incurred by the relevant Creditor in maintaining or funding its
Contribution or, as the case may be, Commitment or any part thereof or in
liquidating or re-employing deposits from third parties acquired to effect or
maintain its Contribution or, as the case may be, Commitment or any part
thereof or any other amount owing to such Creditor.

 

11.2        Currency indemnity

 

If any sum due from any of the Borrowers under any of
the Security Documents or any order or judgment given or made in relation
thereto has to be converted from the currency (the “first
currency”) in which the same is payable under the relevant Security
Document or under such order or judgment into another currency (the “second currency”) for the purpose of (a) making or
filing a claim or proof against the Borrowers or any of them, (b) obtaining
an order or judgment in any court or other tribunal or (c) enforcing any
order or judgment given or made in relation to any of the Security Documents,
the Borrowers shall indemnify and hold harmless

 

42

 

each Creditor from and against any loss suffered as a result of any
difference between (i) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second currency
and (ii) the rate or rates of exchange at which the relevant Creditor may
in the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. Any amount due from the Borrowers
under this clause 11.2 shall be due as a separate debt and shall not be
affected by judgment being obtained for any other sums due under or in respect
of any of the Security Documents and the term “rate of exchange”
includes any premium and costs of exchange payable in connection with the
purchase of the first currency with the second currency.

 

11.3        Environmental indemnity

 

The Borrowers shall indemnify each Creditor on demand and hold it
harmless from and against all costs, expenses, payments, charges, losses,
demands, liabilities, actions, proceedings (whether civil or criminal),
penalties, fines, damages, judgements, orders, sanctions or other outgoings of
whatever nature which may be suffered, incurred or paid by, or made or asserted
against such Creditor at any time, whether before or after the repayment in
full of principal and interest under this Agreement, relating to, or arising
directly or indirectly in any manner or for any cause or reason whatsoever out
of an Environmental Claim made or asserted against such Creditor if such
Environmental Claim would not have been, or been capable of being, made or
asserted against such Creditor if it had not entered into any of the Security
Documents and/or exercised any of its rights, powers and discretions thereby
conferred and/or performed any of its obligations thereunder and/or been
involved in any of the transactions contemplated by the Security Documents.

 

12           Unlawfulness and increased
costs

 

12.1        Unlawfulness

 

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

 

12.2        Increased costs

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

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

 

(b)           the Borrowers shall on demand made at any time
whether or not such Bank’s Contribution has been repaid, pay to the Agent for
the account of such Bank the amount which such Bank specifies (in a certificate
setting forth the basis of the computation of such amount but not including any
matters which such Bank or its holding company regards as confidential) is
required to compensate such Bank and/or (as the case may be) its holding
company for such liability to Taxes, cost, reduction, payment, foregone return
or loss.

 

For the purposes of this clause 12.2 and clause 12.4, “holding company” means the company or entity (if any) within
the consolidated supervision of which a Bank is included.

 

12.3        Exception

 

Nothing in clause 12.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, foregone return or loss to the extent that
the same is (a) taken into account in calculating Mandatory Cost or (b) the
subject of an additional payment under clause 6.6.

 

12.4        Mitigation

 

If circumstances arise which would, or would upon the giving of notice,
result in:

 

12.4.1              the Borrowers being required to make an
increased payment to any Bank pursuant to clause 6.6; or

 

12.4.2              the reduction of any Bank’s Commitment to zero
or the Borrowers being required to prepay any Bank’s Contribution, in each case
pursuant to clause 12.1; or

 

12.4.3              the Borrowers being required to make a payment
to any Bank to compensate such Bank or its holding company for a liability to
Taxes, increased or additional cost, reduction, payment, foregone return or
loss pursuant to clause 12.2,

 

then, without in any way limiting the obligations of the Borrowers under
clause 6 and this clause 12, such Bank shall, in consultation with the Agent,
endeavour to take such reasonable steps (and/or, in the case of clause 12.2.2
and where the increased or additional cost, reduction, payment, foregone return
or loss is that of its holding company, endeavour to procure that its holding
company takes such reasonable steps) as are open to it (or, as the case may be,
its holding company), to mitigate or remove such circumstances (including (in
the case of such Bank) to transfer its obligations, liabilities and rights
under this Agreement and the other Security Documents to another of its
offices) unless the taking of such steps might or would (in the opinion of such
Bank):

 

44

 

(a)           be prejudicial to such Bank (or, as the case
may be, its holding company); or

 

(b)           involve such Bank (or, as the case may be, its
holding company) in any activity which is unlawful or prohibited or any
activity that is contrary to, or inconsistent, with any regulation or such Bank’s
general banking policies; or

 

(c)           involve such Bank (or, as the case may be, its
holding company) in expense (unless indemnified to its satisfaction) or an increased
administrative burden or a tax disadvantage; or

 

(d)           have an adverse effect on such Bank’s (or, as
the case may be, its holding company’s) business, operations, administration or
financial condition.

 

13           Security, set-off and
pro-rata payments

 

13.1        Application of moneys

 

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

 

13.1.1              first, in or towards payment of all unpaid
costs and expenses which may be owing to the Creditors (other than the Swap
Providers) or any of them under any of the Security Documents;

 

13.1.2              secondly, in or towards payment of any unpaid
fees payable to the Creditors (other than the Swap Providers) or any of them;

 

13.1.3              thirdly, in or towards payment of any arrears
of interest owing in respect of the Loan or any part thereof (and as between
default interest and normal interest, first in or towards payment of default
interest and, secondly, in or towards payment of normal interest);

 

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

 

13.1.5              fifthly, in or towards payment to any Bank for
any loss suffered by reason of any such payment in respect of principal not being
effected on an Interest Payment Date relating to the part of the Loan repaid
and which amounts are so payable under this Agreement;

 

13.1.6              sixthly, in or towards payment to any Creditor
(other than the Swap Providers) of any other sums owing to it under any of the
Security Documents (and if any such sums are owing to more than one Creditors,
as between such Creditors, on a pro rata basis);

 

13.1.7              seventhly, in or towards payment to a Swap
Provider of any sums owing to it under the relevant Master Swap Agreement (and
if any sums are owing under both Master Swap Agreements, as between such Swap
Providers, on a pro rata basis); and

 

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

 

13.2        Set-off

 

13.2.1              The Borrowers authorise each Creditor (other
than the Swap Providers), without prejudice to any of such Creditor’s rights at
law, in equity or otherwise, at any time following the occurrence of an Event
of Default which is continuing and without prior notice to the Borrowers, to
apply any credit balance to which the Borrowers or any of them is then entitled
standing upon any account of the Borrowers or any of them with any branch of
such Creditor in or towards satisfaction of any sum due and payable from the
Borrowers or any of them to such Creditor under any of the Security Documents.
For this purpose, each Creditor (other

 

45

 

than the Swap Providers) is authorised to purchase with the moneys
standing to the credit of such account such other currencies as may be
necessary to effect such application.

 

13.2.2              No such Creditor shall be obliged to exercise
any right given to it by this clause 13.2. Each such Creditor shall notify the
Borrowers through the Agent forthwith upon the exercise or purported exercise
of any right of set-off giving full details in relation thereto and the Agent
shall inform the other Creditors.

 

13.2.3              Nothing in this clause 13.2 shall be effective
to create a charge or other security interest.

 

13.3        Pro rata payments

 

13.3.1              If at any time any Bank (the “Recovering Bank”) receives or recovers any amount owing to
it by the Borrowers under this Agreement by direct payment, set-off or in any
manner other than by payment through the Agent pursuant to clauses 6.1 or 6.10
(not being a payment received from a Transferee or a sub-participant in such
Bank’s Contribution or any other payment of an amount due to the Recovering
Bank for its sole account pursuant to clauses 3.6, 5, 6.6, 11.1, 11.2, 12.1, or
12.2) the Recovering Bank shall, within two (2) Banking Days of such
receipt or recovery (a “Relevant  Receipt”) notify the Agent of the amount of the Relevant
Receipt. If the Relevant Receipt exceeds the amount which the Recovering Bank
would have received if the Relevant Receipt had been received by the Agent and
distributed pursuant to clause 6.1 or 6.10 (as the case may be) then:

 

(a)           within two (2) Banking Days of demand by
the Agent, the Recovering Bank shall pay to the Agent an amount equal (or
equivalent) to the excess;

 

(b)           the Agent shall treat the excess amount so
paid by the Recovering Bank as if it were a payment made by the Borrowers and
shall distribute the same to the Banks (other than the Recovering Bank) in accordance
with clause 6.10; and

 

(c)           as between the Borrowers and the Recovering
Bank the excess amount so re-distributed shall be treated as not having been
paid but the obligations of the Borrowers to the other Banks shall, to the
extent of the amount so re-distributed to them, be treated as discharged.

 

13.3.2              If any part of the Relevant Receipt
subsequently has to be wholly or partly refunded by the Recovering Bank
(whether to a liquidator or otherwise) each Bank to which any part of such
Relevant Receipt was so re-distributed shall on request from the Recovering
Bank repay to the Recovering Bank such Bank’s pro-rata share of the amount
which has to be refunded by the Recovering Bank.

 

13.3.3              Each Bank shall on request supply to the Agent
such information as the Agent may from time to time request for the purpose of
this clause 13.3.

 

13.3.4              Notwithstanding the foregoing provisions of
this clause 13.3, no Recovering Bank shall be obliged to share any Relevant
Receipt which it receives or recovers pursuant to legal proceedings taken by it
to recover any sums owing to it under this Agreement with any other party which
has a legal right to, but does not, either join in such proceedings or commence
and diligently pursue separate proceedings to enforce its rights in the same or
another court (unless the proceedings instituted by the Recovering Bank are
instituted by it without prior notice having been given to such party through
the Agent).

 

13.4        No release

 

For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 13.3 shall not release
any other Recovering Bank from any of its obligations or liabilities under
clause 13.3.

 

46

 

13.5        No charge

 

The provisions of this clause 13 shall not, and shall not be construed
so as to, constitute a charge by a Bank over all or any part of a sum received
or recovered by it in the circumstances mentioned in clause 13.3.

 

13.6        Further assurance

 

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

 

13.7        Conflicts

 

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

 

14           Accounts

 

14.1        General

 

The Borrowers jointly and severally undertake with each Creditor that
they will:

 

14.1.1              procure that not later than twenty (20) days
after the Drawdown Date, Sub-HoldCo shall open the Liquidity Account;

 

14.1.2              procure that on or before the Drawdown Date,
each Borrower shall open its Operating Account; and

 

14.1.3              procure that all moneys payable to each
Borrower in respect of the Earnings of such Borrower’s Ship shall, unless and
until the Agent (acting on the instructions of the Majority Banks) directs to
the contrary in accordance with the terms of the Security Documents, be paid to
the relevant Operating Account and any moneys payable to the Borrowers by
either Swap Provider pursuant to the relevant Master Swap Agreement shall,
unless and until the Agent (acting on the instructions of the Majority Banks)
directs to the contrary following the occurrence of an Event of Default which
is continuing, be paid in equal shares to the Operating Accounts.

 

14.2        Operating Accounts;
withdrawals

 

Unless and until an Event of Default shall occur and be continuing and
the Agent (acting on the instructions of the Majority Banks) shall direct to
the contrary, moneys standing to the credit of each Operating Account shall be
at the free disposal of the relevant Borrower.

 

14.3        Charging of accounts

 

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

 

47

 

15           Assignment, transfer and
lending office

 

15.1        Benefit and burden

 

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

 

15.2        No assignment by Borrowers

 

No Borrower may assign or transfer any of its rights or obligations
under this Agreement.

 

15.3        Transfers by Banks

 

Subject to the prior written consent of the Borrowers (such consent not
to be unreasonably withheld and the request for which to be promptly responded
to), any Bank (the “Transferor”)
may at any time cause all or any part of its rights, benefits and/or
obligations under this Agreement and the Security Documents to be transferred
to any other person (including, without limitation, a bank or financial
institution) (a “Transferee”) by delivering to the
Agent a Transfer Certificate duly completed and duly executed by the Transferor
and the Transferee. No such transfer is binding on, or effective in relation
to, the Borrowers or the Agent unless (i) it is effected or evidenced by a
Transfer Certificate which complies with the provisions of this clause 15.3 and
is signed by or on behalf of the Transferor, the Transferee and the Agent (on
behalf of itself, the Borrowers and the other Creditors) and (ii) such
transfer of rights under the other Security Documents has been effected and
registered. Upon signature of any such Transfer Certificate by the Agent, which
signature shall be effected as promptly as is practicable after such Transfer
Certificate has been delivered to the Agent, and subject to the terms of such
Transfer Certificate, such Transfer Certificate shall have effect as set out
below.

 

The following further provisions shall have effect in relation to any
Transfer Certificate:

 

15.3.1              a Transfer Certificate may be in respect of a
Bank’s rights in respect of all, or part of, its Commitment and shall be in
respect of the same proportion of its Contribution;

 

15.3.2              a Transfer Certificate shall only be in
respect of rights and obligations of the Transferor in its capacity as a Bank
and shall not transfer its rights and obligations as the Agent, or in any other
capacity, as the case may be and such other rights and obligations may only be
transferred in accordance with any applicable provisions of this Agreement;

 

15.3.3              a Transfer Certificate shall take effect in
accordance with English law as follows:

 

(a)           to the extent specified in the Transfer
Certificate, the Transferor’s payment rights and all its other rights (other
than those referred to in clause 15.3.2 above) under this Agreement are
assigned to the Transferee absolutely, free of any defects in the Transferor’s
title and of any rights or equities which the Borrowers had against the
Transferor;

 

(b)           the Transferor’s Commitment is discharged to
the extent specified in the Transfer Certificate;

 

(c)           the Transferee becomes a Bank with a
Contribution and/or a Commitment of the amounts specified in the Transfer
Certificate;

 

(d)           the Transferee becomes bound by all the
provisions of this Agreement and the Security Documents which are applicable to
the Banks generally, including those about pro-rata sharing and the exclusion
of liability on the part of, and the indemnification of, the Arranger, the
Agent and the Security Agent and to the extent that the Transferee becomes
bound by those provisions, the Transferor ceases to be bound by them;

 

48

 

(e)           a part of the Loan which the Transferee makes
after the Transfer Certificate comes into effect ranks in point of priority and
security in the same way as it would have ranked had it been made by the
Transferor, assuming that any defects in the Transferor’s title and any rights
or equities of any Security Party or HoldCo against the Transferor had not
existed; and

 

(f)            the Transferee becomes entitled to all the
rights under this Agreement which are applicable to the Banks generally,
including but not limited to those relating to the Majority Banks and those
under clauses 3.6, 5 and 12 and to the extent that the Transferee becomes
entitled to such rights, the Transferor ceases to be entitled to them;

 

15.3.4              the rights and equities of the Borrowers or of
any other Security Party or HoldCo referred to above include, but are not
limited to, any right of set-off and any other kind of cross-claim; and

 

15.3.5              the Borrowers and the other Creditors hereby
irrevocably authorise and instruct the Agent to sign any such Transfer
Certificate on their behalf and undertake not to withdraw, revoke or qualify
such authority or instruction at any time. Promptly upon its signature of any
Transfer Certificate, the Agent shall notify the Borrowers, the Transferor, the
Transferee and the other Banks.

 

15.4        Reliance on Transfer Certificate

 

15.4.1              The Agent shall be entitled to rely on any
Transfer Certificate believed by it to be genuine and correct and to have been
presented or signed by the persons by whom it purports to have been presented
or signed, and shall not be liable to any of the parties to this Agreement and
the Security Documents for the consequences of such reliance.

 

15.4.2              The Agent shall at all times during the
continuation of this Agreement maintain a register in which it shall record the
name, Commitments, Contributions and administrative details (including the
lending office) from time to time of the Banks holding a Transfer Certificate
and the date at which the transfer referred to in such Transfer Certificate
held by each Bank was transferred to such Bank, and the Agent shall make the
said register available for inspection by any Bank or either Borrower during
normal banking hours upon receipt by the Agent of reasonable prior notice
requesting the Agent to do so.

 

15.4.3              The entries on the said register shall, in the
absence of manifest error, be conclusive in determining the identities of the
Commitments, the Contributions and the Transfer Certificates held by the Banks
from time to time and the principal amounts of such Transfer Certificates and
may be relied upon by the Agent and the other Security Parties and HoldCo for
all purposes in connection with this Agreement and the Security Documents.

 

15.5        Transfer fees and expenses

 

15.5.1              If any Bank causes the transfer of all or any
part of its rights, benefits and/or obligations under the Security Documents
and such transfer is effected on or prior to 31 March 2006, the Borrowers
shall pay to the Agent on demand all costs, fees and expenses (including, but
not limited to, legal fees and expenses), and all value added tax thereon (but
up to a maximum amount of $3,000 per transfer), verified by the Agent as having
been incurred by such Bank in connection with such transfer. The balance of any
such costs, fees and expenses and value added tax thereon in respect of a
transfer which, in accordance with the above, is not payable by the Borrowers,
shall be borne by the relevant Transferor.

 

15.5.2              If any Bank causes the transfer of all or any
part of its rights, benefits and/or obligations under the Security Documents
and such transfer is effected after 31 March 2006, any costs, fees and
expenses in relation to or in connection with any such transfer effected shall
be for the account of the relevant Transferor and shall not in any case create
any liability whatsoever on

 

49

 

 

the part of the Borrowers or any of them for payment of the same whether
under the Security Documents or otherwise.

 

15.6        Documenting transfers

 

15.6.1              If any Bank assigns all or any part of its
rights or transfers all or any part of its rights, benefits and/or obligations
as provided in clause 15.3, the Borrowers jointly and severally undertake,
immediately on being requested to do so by the Agent, to enter into, and
procure that the other Security Parties, HoldCo and the Managers shall enter
into, such documents as may be necessary or desirable to transfer to the Transferee
all or the relevant part of such Bank’s interest in the Security Documents and
all relevant references in this Agreement to such Bank shall thereafter be
construed as a reference to the Transferor and/or its Transferee (as the case
may be) to the extent of their respective interests.

 

15.6.2              Any costs, fees and expenses in relation to or
in connection with the matters referred to in clause 15.6.1 in respect of a
transfer effected on or prior to 31 March 2006 shall be for the account of
the Borrowers but up to a maximum amount of $3,000 per transfer. The balance of
any such costs, fees and expenses in respect of a transfer which, in accordance
with the above, is not payable by the Borrowers, shall be borne by the relevant
Transferor.

 

15.6.3              Any costs, fees and expenses in relation to or
in connection with the matters referred to in clause 15.6.1 in respect of a
transfer effected after 31 March 2006 shall be for the account of the
relevant Transferor and shall not in any case create any liability whatsoever
on the part of the Borrowers or any of them for payment of the same whether
under the Security Documents or otherwise.

 

15.7        Sub-participation

 

A Bank may sub-participate all or any part of its rights and/or
obligations under the Security Documents without the consent of, or notice to,
the Borrowers.

 

15.8        Lending office

 

Each Bank shall lend through its office at the address specified in schedule 2
or, as the case may be, in any relevant Transfer Certificate or through any
other office of such Bank selected from time to time by it through which such
Bank wishes to lend for the purposes of this Agreement. If the office through
which a Bank is lending is changed pursuant to this clause
15.8, such Bank shall notify the Agent promptly of such change and the Agent
shall notify the Borrowers, the Security Agent, the Account Bank and the other
Banks. Any costs, fees and expenses in relation to or in connection with any
such change by a Bank shall be for the account of such Bank.

 

15.9        Disclosure of Information

 

A Bank may disclose to a prospective assignee, transferee or to any
other person who may propose entering into contractual relations with such Bank
in relation to this Agreement such information about the Borrowers and/or the
other Security Parties and/or HoldCo as such Bank shall consider appropriate
subject to such Bank executing a confidentiality agreement with any such person
in respect of any such information.

 

16           Arranger, Agent, Security Agent
and Reference Banks

 

16.1        Appointment of the Agent

 

Each Bank and each Swap Provider irrevocably appoints the Agent as its
agent for the purposes of this Agreement and such of the Security Documents to
which it may be appropriate for the Agent to be party. By virtue of such appointment, each of the
Banks and the Swap Providers hereby authorises the Agent:

 

50

 

16.1.1              to execute such documents as may be
approved by the Majority Banks for execution by the Agent; and

 

16.1.2              (whether or not by or through employees or
agents) to take such action on such Bank’s and such Swap Provider’s behalf and
to exercise such rights, remedies, powers and discretions as are specifically
delegated to the Agent by this Agreement and/or any other Security Document,
together with such powers and discretions as are reasonably incidental thereto.

 

16.2        Agent’s actions

 

Any action taken by the Agent under or in relation to this Agreement or
any of the other Security Documents whether with requisite authority or on the
basis of appropriate instructions, received from the Banks (or as otherwise
duly authorised)-shall be binding on all the Banks, the Swap Providers and the
other Creditors.

 

16.3        Agent’s duties

 

The Agent shall:

 

16.3.1              promptly (a) notify each Bank of the
contents of each notice, certificate or other document received by it from the
Borrowers under or pursuant to clauses 8.1.1, 8.1.5, 8.1.6 and 8.1.8 and (b) notify
any Bank following such Bank’s request in writing, of the contents of each
notice, certificate or other document received by it from the Borrowers or any
other Security Party or HoldCo under or pursuant to any other provisions of the
Security Documents; and

 

16.3.2              (subject to the other provisions of this
clause 16) take (or instruct the Security Agent to take) such action or, as the
case may be, refrain from taking (or authorise the Security Agent to refrain
from taking) such action with respect to the exercise of any of its rights,
remedies, powers and discretions as agent, as the Majority Banks may direct.

 

16.4        Agent’s rights

 

The Agent may:

 

16.4.1              in the exercise of any right, remedy, power or
discretion in relation to any matter, or in any context, not expressly provided
for by this Agreement or any of the other Security Documents, act or, as the
case may be, refrain from acting (or authorise the Security Agent to act or
refrain from acting) in accordance with the instructions of the Banks, and
shall be fully protected in so doing;

 

16.4.2              unless and until it shall have received
directions from the Majority Banks, take such action or, as the case may be,
refrain from taking such action (or authorise the Security Agent to take or
refrain from taking such action) in respect of a Default of which the Agent has
actual knowledge as it shall deem advisable in the best interests of the Banks
(but shall not be obliged to do so);

 

16.4.3              refrain from acting (or authorise the Security
Agent to refrain from acting) in accordance with any instructions of the Banks
to institute any legal proceedings arising out of or in connection with this
Agreement or any of the other Security Documents until it and/or the Security
Agent has been indemnified and/or secured to its satisfaction against any and
all costs, expenses or liabilities (including legal fees) which it would or
might incur as a result;

 

16.4.4              deem and treat (i) each Bank as the
person entitled to the benefit of the Contribution of such Bank for all
purposes of this Agreement unless and until a notice shall have been filed with
the Agent pursuant to clause 15.3 and shall have become effective, and (ii) the
office set opposite the name of each of the Banks in schedule 2 as the lending office of such Bank,
unless and until a written notice of change of lending office shall have been
received by the Agent and the Agent may act upon any such notice unless and
until the same is superseded by a further such notice;

 

51

 

16.4.5              rely as to matters of fact which might
reasonably be expected to be within the knowledge of any Security Party or
HoldCo upon a certificate signed by any director or officer of the relevant
Security Party or HoldCo on behalf of the relevant Security Party or HoldCo;
and

 

16.4.6              do anything which is in its opinion necessary
or desirable to comply with any law or regulation in any jurisdiction.

 

16.5        No liability of Arranger or
Agent

 

Neither the Arranger nor the Agent nor any of their respective employees
and agents shall:

 

16.5.1              be obliged to make any enquiry as to the use
of any of the proceeds of the Loan unless (in the case of the Agent) so
required in writing by a Bank, in which case the Agent shall promptly make the
appropriate request to the Borrowers; or

 

16.5.2              be obliged to make any enquiry as to any
breach or default by the Borrowers or any of them or any other Security Party
or HoldCo in the performance or observance of any of the provisions of this
Agreement or any of the other Security Documents or as to the existence of a
Default unless (in the case of the Agent) the Agent has actual knowledge thereof
or has been notified in writing thereof by a Bank or a Security Party or
HoldCo, in which case the Agent shall promptly notify the Banks of the relevant
event or circumstance; or

 

16.5.3              be obliged to enquire whether or not any
representation or warranty made by the Borrowers or any of them or any other
Security Party or HoldCo pursuant to this Agreement or any of the other
Security Documents is true; or

 

16.5.4              be obliged to do anything (including, without
limitation, disclosing any document or information) which would, or might in
its opinion, be contrary to any law or regulation or be a breach of any duty of
confidentiality or otherwise be actionable or render it liable to any person;
or

 

16.5.5              be obliged to account to any Bank or either
Swap Provider for any sum or the profit element of any sum received by it for
its own account; or

 

16.5.6              be obliged to institute any legal proceedings
arising out of or in connection with this Agreement or any of the other
Security Documents other than on the instructions of the Majority Banks; or

 

16.5.7              be liable to any Bank or either Swap Provider
for any action taken or omitted under or in connection with this Agreement or
any of the other Security Documents unless caused by its gross negligence or
wilful misconduct.

 

For the purposes of this clause 16, neither the Arranger nor the Agent
shall be treated as having actual knowledge of any matter of which the
corporate finance or any other division outside the agency or loan
administration department of the Arranger or the person for the time being
acting as the Agent may become aware in the context of corporate finance,
advisory or lending activities from time to time undertaken by the Arranger or,
as the case may be, the Agent for any Security Party or HoldCo or any other
person which may be a trade
competitor of any Security Party or HoldCo or may otherwise have commercial
interests similar to those of any Security Party or HoldCo.

 

16.6        Non-reliance on Arranger or
Agent

 

Each Bank and each Swap Provider acknowledges that it has not relied on
any statement, opinion, forecast or other representation made by the Arranger
or the Agent to induce it to enter into this Agreement or any of the other
Security Documents and that it has made and will continue to make, without
reliance on the Arranger or the Agent and based on such documents as it
considers appropriate, its own appraisal of the creditworthiness of the
Security Parties or HoldCo and its own independent investigation of the
financial condition, prospects and affairs of

 

52

 

the Security Parties or HoldCo in connection with the making and
continuation of such Bank’s Commitment or Contribution under this Agreement (in
the case of a Bank) and in connection with the entry into a Master Swap
Agreement and any Designated Transactions thereunder (in the case of a Swap
Provider). Neither the Arranger nor the Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect to any Security Party or
HoldCo whether coming into its possession before the making of the Loan or at
any time or times thereafter other than as provided in clause 16.3.1.

 

16.7        No responsibility on Arranger
or Agent for Borrowers’ performance

 

Neither the Arranger nor the Agent shall have any responsibility or
liability to any Bank:

 

16.7.1              on account of the failure of any Security
Party or HoldCo to perform its obligations under any of the Security Documents;
or

 

16.7.2              for the financial condition of any Security
Party or HoldCo; or

 

16.7.3              for the completeness or accuracy of any
statements, representations or warranties in any of the Security Documents or
any document delivered under any of the Security Documents; or

 

16.7.4              for the execution, effectiveness, adequacy,
genuineness, validity, enforceability or admissibility in evidence of any of
the Security Documents or of any certificate, report or other document executed
or delivered under any of the Security Documents; or

 

16.7.5              to investigate or make any enquiry into the
title of the Borrowers or any other Security Party or HoldCo to the Ships or
any other security or any part thereof; or

 

16.7.6              for the failure to register any of the
Security Documents with any official or regulatory body or office or elsewhere;
or

 

16.7.7              for taking or omitting to take any other
action under or in relation to any of the Security Documents or any aspect of
any of the Security Documents; or

 

16.7.8              on account of the failure of the Security
Agent to perform or discharge any of its duties or obligations under the
Security Documents; or

 

16.7.9              otherwise in connection with this Agreement or
its negotiation or for acting (or, as the case may be, refraining from acting)
in accordance with the instructions of the Banks.

 

16.8        Reliance on documents and
professional advice

 

Each of the Arranger and the Agent shall be entitled to rely on any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person and shall be entitled to
rely as to legal or other professional matters on opinions and statements of
any legal or other professional advisers selected or approved by it (including
those in the Arranger’s or, as the case may be, the Agent’s employment).

 

16.9        Other dealings

 

Each of the Arranger and the Agent may, without any liability to account
to the Banks or the Swap Providers, accept deposits from, lend money to, and
generally engage in any kind of banking or other business with, and provide
advisory or other services to, any Security Party or HoldCo or any of their
respective Related Companies or any of the Banks or either of the Swap
Providers as if it were not the Arranger or, as the case may be, the Agent.

 

53

 

16.10      Rights of Agent as Bank; no partnership

 

With respect to its own Commitment and Contribution (if any) the Agent
shall have the same rights and powers under the Security Documents as any other
Bank and may exercise the same as though it were not performing the duties and
functions delegated to it under this Agreement and the term “Banks” shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity as a Bank. This
Agreement shall not and shall not be construed so as to constitute a
partnership between the parties or any of them.

 

16.11      Amendments and waivers

 

16.11.1            Subject to clause 16.11.2, the Agent may, with
the consent of the Majority Banks (or if and to the extent expressly authorised
by the other provisions of any of the Security Documents) and, if so instructed
by the Majority Banks, shall:

 

(a)           agree (or authorise the Security Agent to
agree) amendments or modifications to any of the Security Documents with the
Borrowers and/or any other Security Party and/or HoldCo; and/or

 

(b)           vary or waive breaches of, or defaults under,
or otherwise excuse performance of, any provision of any of the other Security
Documents by the Borrowers and/or any other Security Party and/or HoldCo (or
authorise the Security Agent to do so).

 

Any such action so authorised and effected by the Agent shall be
documented in such manner as the Agent shall (with the approval of the Majority
Banks) determine, shall be promptly notified to the Banks by the Agent and
(without prejudice to the generality of clause 16.2) shall be binding on the
Banks and the Swap Providers.

 

16.11.2            Except with the prior written consent of all
Banks, the Agent shall have no authority on behalf of the Banks or the Swap
Providers to agree (or authorise the Security Agent to agree) with the
Borrowers and/or any other Security Party and/or HoldCo any amendment or
modification to any of the Security Documents or to grant (or authorise the
Security Agent to grant) waivers in respect of breaches or defaults or to vary
or excuse (or authorise the Security Agent to vary or excuse) performance of or
under any of the Security Documents by the Borrowers or any of them and/or any
other Security Party and/or HoldCo, if the effect of such amendment,
modification, waiver or excuse would be to:

 

(a)           reduce the Margin;

 

(b)           postpone the due date or reduce the amount of
any payment of principal, interest or other amount payable by any Security
Party or HoldCo under any of the Security Documents;

 

(c)           change the currency in which any amount is
payable by any Security Party or HoldCo under any of the Security Documents;

 

(d)           increase any Bank’s Commitment;

 

(e)           extend the Termination Date;

 

(f)            change any provision of any of the Security
Documents which expressly or implied requires the approval or consent of all
the Banks such that the relevant approval or consent may be given otherwise
than with the sanction of all the Banks;

 

(g)           change the order of distribution under clauses
6.10 and 13.1; 

 

(h)                                 change this clause 16.11;

 

(i)            change the definition of “Majority
Banks” in clause 1.2; or

 

54

 

(j)            release any Security Party, either Manager or
HoldCo from the security constituted by any Security Document (except as
required by the terms thereof or by law) or change the terms and conditions
upon which such security or guarantee may be, or is required to be, released.

 

16.12      Reimbursement and indemnity
by Banks

 

Each Bank shall reimburse the Agent (rateably in accordance with such
Bank’s Commitment or, after the first drawdown, its Contribution), to the
extent that the Agent is not reimbursed by the Borrowers, for the costs,
charges and expenses incurred by the Agent which are expressed to be payable by
the Borrowers under clause 5.1 including (in each case) the fees and expenses
of legal or other professional advisers. Each Bank shall on demand indemnify
the Agent (rateably in accordance with such Bank’s Commitment or, after the
first drawdown, its Contribution) against all liabilities, damages, costs and
claims whatsoever incurred by the Agent in connection with any of the Security
Documents or the performance of its duties under any of the Security Documents
or any action taken or omitted by the Agent under any of the Security
Documents, unless such liabilities, damages, costs or claims arise from the
Agent’s own gross negligence or wilful misconduct.

 

16.13      Retirement of Agent

 

16.13.1            The Agent may, having given to the Borrowers
and each of the Banks and the Swap Providers not less than thirty (30) days’
prior written notice of its intention to do so, retire from its appointment as
Agent under this Agreement, provided that no such retirement shall take effect
unless there has been appointed by the Banks and the Swap Providers as a
successor agent:

 

(a)           a Related Company of the Agent nominated by
the Agent which the Banks and the Swap Providers hereby irrevocably and
unconditionally agree to appoint or, failing such nomination,

 

(b)           a Bank nominated by the Majority Banks or,
failing such a nomination,

 

(c)           any reputable and experienced bank or
financial institution nominated by the retiring Agent,

 

Provided that in the case of appointment of a successor agent in
accordance with paragraphs (b) and (c) of this clause 16.13.1, the
appointment shall be made with the prior written consent of the Borrowers (such
consent not to be unreasonably withheld and the request for which to be
promptly responded to).

 

Any corporation into which the retiring Agent may be merged or converted
or any corporation with which the Agent may be consolidated or any corporation
resulting from any merger, conversion, amalgamation, consolidation or other
reorganisation to which the Agent shall be a party shall, to the extent
permitted by applicable law, be the successor Agent under this Agreement and
the other Security Documents without the execution or filing of any document or
any further act on the part of any of the parties to this Agreement and the
other Security Documents save that notice of any such merger, conversion,
amalgamation, consolidation or other reorganisation shall forthwith be given to
each Security Party, HoldCo, the Banks and the Swap Providers.

 

16.13.2            Upon any such successor as aforesaid being
appointed, the retiring Agent shall be discharged from any further obligation
under the Security Documents (but shall continue to have the benefit of this
clause 16 in respect of any action it has taken or refrained from taking prior
to such discharge) and its successor and each of the other parties to this
Agreement shall have the same rights and obligations among themselves as they
would have had if such successor had been a party to this Agreement in place of
the retiring Agent. The retiring Agent shall (at the expense of the Borrowers)
provide its successor with copies of such of its

 

55

 

records as its successor reasonably requires to carry out its functions
under the Security Documents.

 

16.14      Appointment and retirement of Security Agent

 

16.14.1            Appointment

 

Each of the Banks, the Swap Providers and the Agent irrevocably appoints
the Security Agent as its security agent and trustee for the purposes of this
Agreement and the other Security Documents, in each case on the terms set out
in this Agreement. By virtue of such appointment, each of the Banks, the Swap
Providers and the Agent hereby authorises the Security Agent (whether or not by
or through employees or agents) to take such action on its behalf and to
exercise such rights, remedies, powers and discretions as are specifically
delegated to the Security Agent by this Agreement and/or the Security
Documents, together with such powers and discretions as are reasonably
incidental thereto.

 

16.14.2            Retirement

 

Without prejudice to clause 16.13, the Security Agent may, having given
to the Borrowers and each of the Banks and the Swap Providers not less than
fifteen (15) days’ prior written notice of its intention to do so, retire from
its appointment as Security Agent under this Agreement and any Trust Deed,
provided that no such retirement shall take effect unless there has been
appointed by the Banks, the Swap Providers and the Agent as a successor
security agent and trustee:

 

(a)           a Related Company of the Security Agent
nominated by the Security Agent which the Agent, the Banks and the Swap
Providers hereby irrevocably and unconditionally agree to appoint or, failing
such nomination,

 

(b)           a bank or trust corporation nominated by the
Majority Banks or, failing such a nomination,

 

(c)           any bank or trust corporation nominated by the
retiring Security Agent,

 

and, in any case, such successor security agent and trustee shall have
duly accepted such appointment by delivering to the Agent (i) written
confirmation (in a form acceptable to the Agent) of such acceptance agreeing to
be bound by this Agreement in the capacity of Security Agent as if it had been
an original party to this Agreement and (ii) a duly executed Trust Deed
Provided that in the case of appointment of a successor security agent in
accordance with paragraphs (b) and (c) of this clause 16.14.2, the
appointment shall be made with the prior written consent of the Borrowers (such
consent not to be unreasonably withheld and the request for which to be
promptly responded to).

 

Any corporation into which the retiring Security Agent may be merged or
converted or any corporation with which the Security Agent may be consolidated
or any corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the Security Agent shall be a
party shall, to the extent permitted by applicable law, be the successor
Security Agent under this Agreement, any Trust Deed and the other Security
Documents without the execution or filing of any document or any further act on
the part of any of the parties to this Agreement, any Trust Deed and the other
Security Documents save that notice of any such merger, conversion,
amalgamation, consolidation or other reorganisation shall forthwith be given to
each Security Party, HoldCo and the Agent, the Banks and the Swap Providers.

 

Upon any such successor as aforesaid being appointed, the retiring
Security Agent shall be discharged from any further obligation under the
Security Documents (but shall continue to have the benefit of this clause 16 in
respect of any action it has taken or refrained from taking prior to such
discharge) and its successor and each of the other parties to this Agreement
shall have the same rights and obligations among themselves as they would have
had if such

 

56

 

successor had been a party to this Agreement in place of the retiring
Security Agent. The retiring Security Agent shall (at the expense of the
Borrowers) provide its successor with copies of such of its records as its
successor reasonably requires to carry out its functions under the Security
Documents.

 

16.15      Powers and duties of the Security Agent

 

16.15.1            The Security Agent shall have no duties,
obligations or liabilities to any of the Banks, the Swap Providers and the
Agent beyond those expressly stated in any of the Security Documents. Each of
the Agent, the Banks and the Swap Providers hereby authorises the Security
Agent to enter into and execute:

 

(a)           each of the Security Documents to which the
Security Agent is or is intended to be a party; and

 

(b)           any and all such other Security Documents as
may be approved by the Agent in writing (acting on the instructions of all
Banks) for entry into by the Security Agent,

 

and, in each and every case, to hold any and all security thereby
created upon trust for the Banks, the Swap Providers and the Agent in the
manner contemplated by this Agreement.

 

16.15.2            Subject to clause 16.15.3 the Security Agent
may, with the prior consent of the Majority Banks communicated in writing by
the Agent and, if so instructed by the Majority Banks, shall concur with any of
the Security Parties or HoldCo to:

 

(a)           amend, modify or otherwise vary any provision
of the Security Documents to which the Security Agent is or is intended to be a
party; or

 

(b)           waive breaches of, or defaults under, or
otherwise excuse performance of, any provision of the Security Documents to
which the Security Agent is or is intended to be a party.

 

Any such action so authorised and effected by the Security Agent shall
be promptly notified to the Banks, the Swap Providers and the Agent by the
Security Agent and Shall be binding on the other Creditors.

 

16.15.3            The Security Agent shall not concur with any
Security Party or HoldCo with respect to any of the matters described in clause
16.11.2 without the consent of the Banks communicated in writing by the Agent.

 

16.15.4            The Security Agent shall (subject to the other
provisions of this clause 16) take such action or, as the case may be, refrain
from taking such action, with respect to any of its rights, powers and
discretions as security agent and trustee, as the Agent may direct. Subject as
provided in the foregoing provisions of this clause, unless and until the
Security Agent shall have received such instructions from the Agent, the
Security Agent may, but shall not be obliged to, take (or refrain from taking)
such action under or pursuant to the Security Documents referred to in clause
16.14 as the Security Agent shall deem advisable in the best interests of the
Creditors provided that (for the avoidance of doubt), to the extent that this
clause might otherwise be construed as authorising the Security Agent to take,
or refrain from taking, any action of the nature referred to in clause 16.15.2
- and for which the prior consent of the Banks is expressly required under
clause 16.15.3 - clauses 16.15.2 and 16.15.3 shall apply to the exclusion of
this clause.

 

16.15.5            None of the Banks and the Swap Providers nor
the Agent shall have any independent power to enforce any of the Security
Documents referred to in clause 16.14 or to exercise any rights, discretions or
powers or to grant any consents or releases under or pursuant to such Security
Documents or any of them or otherwise have direct recourse to the security
and/or guarantees constituted by such Security Documents or any of them except
through the Security Agent.

 

57

 

16.15.6            For the purpose of this clause 16, the
Security Agent may, rely and act in reliance upon any information from time to
time furnished to the Security Agent by the Agent (whether pursuant to clause
16.15.7 or otherwise) unless and until the same is superseded by further such
information, so that the Security Agent shall have no liability or
responsibility to any party as a consequence of placing reliance on and acting
in reliance upon any such information unless the Security Agent has actual
knowledge that such information is inaccurate or incorrect.

 

16.15.7            Without prejudice to the foregoing, each of
the Agent, the Swap Providers and the Banks (whether directly or through the
Agent) shall provide the Security Agent with such written information as it may
reasonably require for the purpose of carrying out its duties and obligations
under the Security Documents referred to in clause 16.14.

 

16.16      Trust provisions

 

16.16.1            The trusts constituted or evidenced in or by
this Agreement and the Trust Deed shall remain in full force and effect until
whichever is the earlier of:

 

(a)           the expiration of a period of eighty (80)
years from the date of this Agreement; and

 

(b)           receipt by the Security Agent of confirmation
in writing by the Agent that there is no longer outstanding any Indebtedness
(actual or contingent) which is secured or guaranteed or otherwise assured by
or under any of the Security Documents.

 

and the parties to this Agreement declare that the perpetuity period
applicable to this Agreement and the trusts declared by the Trust Deed shall
for the purposes of the Perpetuities and Accumulations Act 1964 be the period
of eighty (80) years from the date of this Agreement.

 

16.16.2            In its capacity as trustee in relation to the
Security Documents specified in clause 16.14, the Security Agent shall, without
prejudice to any of the powers, discretions and immunities conferred upon
trustees by law (and to the extent not inconsistent with the provisions of any
of those Security Documents), have all the same powers and discretions as a
natural person acting as the beneficial owner of such property and/or as are
conferred upon the Security Agent by any of those Security Documents.

 

16.16.3            It is expressly declared that, in its capacity
as trustee in relation to the Security Documents specified in clause 16.14, the
Security Agent shall be entitled to invest moneys forming part of the security
and which, in the opinion of the Security Agent, may not be paid out promptly
following receipt in the name or under the control of the Security Agent in any
of the investments for the time being authorised by law for the investment by
trustees of trust moneys or in any other property or investments whether
similar to the aforesaid or not or by placing the same on deposit in the name
or under the control of the Security Agent as the Security Agent may think fit without
being under any duty to diversify its investments and the Security Agent may at
any time vary or transpose any such property or investments for or into any
others of a like nature and shall not be responsible for any loss due to
depreciation in value or otherwise of such property or investments. Any
investment of any part or all of the security may, at the discretion of the
Security Agent, be made or retained in the names of nominees.

 

16.17      Independent action by
Creditors

 

None of the Creditors shall enforce, exercise any rights, remedies or
powers or grant any consents or releases under or pursuant to, or otherwise
have a direct recourse to the security and/or guarantees constituted by any of
the Security Documents without the prior written consent of the Majority Banks
but, Provided such consent has been obtained, it shall not be necessary for any
other Creditor to be joined as an additional party in any proceedings for this
purpose.

 

58

 

16.18      Common Agent and Security Agent

 

The Agent and the Security Agent have entered into the Security
Documents in their separate capacities (a) as agent for the Banks and the
Swap Providers under and pursuant to this Agreement (in the case of the Agent)
and (b) as security agent and trustee for the Banks, (the Swap Providers
and the Agent under and pursuant to this Agreement, to hold the guarantees
and/or security created by the Security Documents specified in clause 16.14 on
the terms set out in such Security Documents (in the case of the Security
Agent). However, from time to time the Agent and the Security Agent may be the
same entity. When the Agent and the Security Agent are the same entity and any
Security Document provides for the Agent to communicate with or provide
instructions to the Security Agent (and vice versa), it will not be necessary
for there to be any such formal communications or instructions on those
occasions.

 

16.19      Co-operation to achieve agreed priorities of application

 

The Banks, the Swap Providers and the Agent shall co-operate with each
other and with the Security Agent and any receiver under the Security Documents
in realising the property and assets subject to the Security Documents and in
ensuring that the net proceeds realised under the Security Documents after
deduction of the expenses of realisation are applied in accordance with clause
13.1.

 

16.20      Prompt distribution of proceeds

 

Moneys received by any of the Creditors (whether from a receiver or
otherwise) pursuant to the exercise of (or otherwise by virtue of the existence
of) any rights and powers under or pursuant to any of the Security Documents
shall (after providing for all costs, charges, expenses and liabilities and
other payments ranking in priority) be paid to the Agent for distribution (in
the case of moneys so received by any of the Creditors other than the Agent or
the Security Agent) and shall be distributed by the Agent or, as the case may
be, the Security Agent (in the case of moneys so received by the Agent or, as
the case may be, the Security Agent) in each case in accordance with clause
13.1. The Agent or, as the case may be, the Security Agent shall make each such
application and/or distribution as soon as is practicable after the relevant
moneys are received by, or otherwise become available to, the Agent or, as the
case may be, the Security Agent save that (without prejudice to any other
provision contained in any of the Security Documents) the Agent or, as the case
may be, the Security Agent (acting on the instructions of the Majority Banks)
or any receiver may credit any moneys received by it to a suspense account for
so long and in such manner as the Agent or such receiver may from time to time
determine with a view to preserving the rights of the Agent and/or the Security
Agent and/or the other Creditors or any of them to provide for the whole of
their respective claims against the Borrowers or any other person liable.

 

16.21      Reconventioning

 

After consultation with the Borrowers and the Banks and notwithstanding
clause 16.11, the Agent shall be entitled to make such amendments to this
Agreement as it may determine to be necessary to take account of any changes in
market practices as a consequence of the European Monetary Union (whether as to
the settlement or rounding of obligations, business days, the calculation of
interest or otherwise whatsoever). So far as possible such amendments shall be
such as to put the parties in the same position as if the event or events
giving rise the need to amend this Agreement had not occurred. Any amendment so
made to this Agreement by the Agent shall be promptly notified to the other
parties hereto and shall be binding on all parties hereto.

 

16.22      Change of Reference Banks

 

If any Reference Bank ceases to provide quotations to the Agent for the
purposes of determining LIBOR or the Mandatory Cost, the Agent may, acting on
the instructions of the Majority Banks, terminate the appointment of such
Reference Bank and appoint another Bank to replace such Reference Bank.

 

59

 

17           Notices and other matters

 

17.1        Notices

 

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

 

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

 

17.1.2              be deemed to have been received, subject as
otherwise provided in the relevant Security Document, in the case of a letter,
when delivered personally or three (3) days after it has been put in to
the post and, in the case of a facsimile transmission or other means of
telecommunication in permanent written form, within two (2) hours after
the time of despatch (provided that if the date of despatch is not a business
day in the country of the addressee or if the time of despatch is after the
close of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business day); and

 

17.1.3              be sent:

 

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

 

c/o Golden Energy Marine Corp.

2 Gamma Street

Athens 167 77

 

Fax no:           +30 210 894 8403

Attn:               Mr Konstantlnos Koutsoubelis

 

(b)           if to the Arranger and/or the Agent and/or the
Account Bank and/or the Security Agent at:

 

HSH Nordbank AG

Gerhart-Hauptmann-Plalz 50

20095 Hamburg

Germany

 

Fax No:           +49 40 3333 34118

Attn:               Shipping, Greek Clients

 

(c)           if to a Bank, to its address or fax number specified
in schedule 2 or in any relevant Transfer Certificate; and

 

(d)           if to a Swap Provider, to its address or fax
number specified in paragraph (a) of Part 4 of the Schedule to
the relevant Master Swap Agreement, 

 

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

 

17.2        Notices through the Agent

 

Every notice, request, demand or other communication under this
Agreement to be given by the Borrowers or any of them to any other party other
than a Swap Provider shall be given to the Agent for onward transmission as
appropriate and if it is to be given to the Borrowers it shall (except as
otherwise provided in the Security Documents) be given to the Agent.

 

60

 

17.3        No implied waivers, remedies cumulative

 

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

 

17.4        English language

 

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

 

17.5        Borrowers’ obligations

 

17.5.1              Joint and several

 

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

 

17.5.2              Borrowers as principal debtors

 

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

 

17.5.3              Indemnity

 

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

 

17.5.4              Liability unconditional

 

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

 

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

 

61

 

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

 

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

 

(c)           anything done or omitted which but for this
provision might operate to exonerate the Borrowers or any of them.

 

17.5.5              Recourse to other security

 

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

 

17.5.6              Waiver of Borrowers’ rights

 

Each Borrower agrees with each Creditor that, from the date of this
Agreement and so long as any moneys are owing under any of the Security
Documents and while all or any part of the Commitment remains outstanding, it
will not, without the prior written consent of the Agent (acting on the
instructions of the Majority Banks):

 

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

 

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

 

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

 

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

 

62

 

18           Governing law and
Jurisdiction

 

18.1        Law

 

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

 

18.2        Submission to jurisdiction

 

The Borrowers jointly and severally agree, for the benefit of each Creditor,
that any legal action or proceedings arising out of or in connection with this
Agreement against the Borrowers or any of them or any of their respective
assets may be brought in the English courts. Each of the Borrowers irrevocably
and unconditionally submits to the jurisdiction of such courts and irrevocably
designates, appoints and empowers Messrs. Cheeswrights at present of 10
Philpot Lane, London EC3M BAA, England to receive for it and on its behalf,
service of process issued out of the English courts in any such legal action or
proceedings. The submission to such jurisdiction shall not (and shall not be
construed so as to) limit the right of a Creditor to take proceedings against
the Borrowers or any of them in the courts of any other competent jurisdiction
nor shall the taking of proceedings in any one or more jurisdictions preclude
the taking of proceedings in any other jurisdiction, whether concurrently or
not.

 

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

 

18.3        Contracts (Rights of Third Parties) Act 1999

 

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

 

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

 

63

 

Schedule 1

 

The
Borrowers and their particulars

 

	
   

  	
   

  	
  (1)

  Name

  	
   

  	
  (2)

  Registered address

  	
   

  	
  (3)

  Country of Incorporation

  
	
  1

  	
   

  	
  Awley
  Investments Inc.

  	
   

  	
  PO
  Box 3174 Road Town, Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  2

  	
   

  	
  Brazey
  Worldwide Corp.

  	
   

  	
  PO
  Box 3174 Road Town, Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  3

  	
   

  	
  Carsten
  World Inc.

  	
   

  	
  PO
  Box 3174 Road Town, Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  4

  	
   

  	
  Fayton
  Maritime Corp.

  	
   

  	
  PO
  Box 3174 Road Town. Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  5

  	
   

  	
  Ikeston
  Star Shipping Inc.

  	
   

  	
  PO
  Box 3174 Road Town. Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  6

  	
   

  	
  Pavey
  Services Ltd.

  	
   

  	
  PO
  Box 3174 Road Town, Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  7

  	
   

  	
  Shoreline
  Universal Limited

  	
   

  	
  PO
  Box 3174 Road Town. Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  8

  	
   

  	
  Spelman
  International Corp.

  	
   

  	
  PO
  Box 3174 Road Town. Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  
	
  9

  	
   

  	
  Waxstone
  Shipping Inc.

  	
   

  	
  PO
  Box 3174 Road Town, Tortola, British Virgin Islands

  	
   

  	
  British
  Virgin Islands

  

 

64

 

Schedule 2

 

The Banks
and their Commitments

 

	
  Name

  	
   

  	
  Lending
  office and contract details

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ($)

  	
   

  
	
  HSH Nordbank AG

  	
   

  	
  Lending Office

  	
   

  	
  69,637,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HSH
  Nordbank AG

  Gerhart-Hauptmann-Platz 50

  20095 Hamburg

  Germany

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  HSH
  Nordbank AG

  Gerhart-Hauptmann-Platz 50

  20095 Hamburg

  Germany

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  +49
  40 33 33 34 118

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
  Shipping,
  Greek Clients

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit
  Suisse

  	
   

  	
  Lending Office

  	
   

  	
  64,603,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  St.
  Alban - Graben 1-3

  P.O. Box CH-4002

  Basle

  Switzerland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  St.
  Alban - Graben 1-3

  P.O. Box CH-4002

  Basel

  Switzerland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  +41
  61 266 7939

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
  Ms Meike Maettig

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Schiffsbank AG

  	
   

  	
  Lending Office

  	
   

  	
  33,560,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Deutsche
  Schiffsbank AG

  Domshof 17

  D 28195 Bremen

  Germany

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  Deutsche
  Schiffsbank AG

  Domshof 17

  D 28195 Bremen

  Germany

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  +49
  421 360 9329

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
  Mr
  Dirk Polster

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TOTAL

  	
   

  	
  167,800,000

  	
   

  

 

65

 

Schedule 3 

 

The Ships, their details and the
relevant Allocated Amounts

 

	
   

  	
   

  	
  (1)

  Name

  	
   

  	
  (2)

  IMO No.

  	
   

  	
  (3)

  Owning Company

  	
   

  	
  (4)

  Allocated Amount ($)

  	
   

  
	
  1

  	
   

  	
  Ghent Max

  	
   

  	
  9164641

  	
   

  	
  Awley
  Investments Inc.

  	
   

  	
  19,708,055

  	
   

  
	
  2

  	
   

  	
  Antwerp Max

  	
   

  	
  9164627

  	
   

  	
  Brazey
  Worldwide Corp.

  	
   

  	
  19,708,055

  	
   

  
	
  3

  	
   

  	
  Ostende Max

  	
   

  	
  9164653

  	
   

  	
  Carsten
  World Inc.

  	
   

  	
  19,708,055

  	
   

  
	
  4

  	
   

  	
  Brugge Max

  	
   

  	
  9164639

  	
   

  	
  Fayton
  Maritime Corp.

  	
   

  	
  19,708,055

  	
   

  
	
  5

  	
   

  	
  Bergen Max

  	
   

  	
  9050383

  	
   

  	
  Ikeston
  Star Shipping Inc.

  	
   

  	
  18,018,790

  	
   

  
	
  6

  	
   

  	
  Bremen Max

  	
   

  	
  9050369

  	
   

  	
  Pavey
  Services Ltd.

  	
   

  	
  16,329,530

  	
   

  
	
  7

  	
   

  	
  Hamburg Max

  	
   

  	
  9050395

  	
   

  	
  Shoreline
  Universal Limited

  	
   

  	
  18,018,790

  	
   

  
	
  8

  	
   

  	
  Miden Max

  	
   

  	
  9050371

  	
   

  	
  Spelman
  International Corp.

  	
   

  	
  16,329,530

  	
   

  
	
  9

  	
   

  	
  Elbe Max

  	
   

  	
  9171278

  	
   

  	
  Waxstone
  Shipping Inc.

  	
   

  	
  20,271,140

  	
   

  

 

66

 

	
  THE BORROWERS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  AWLEY
  INVESTMENTS INC.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  BRAZEY WORLDWIDE CORP.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  CARSTEN
  WORLD INC.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  FAYTON
  MARITIME CORP.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  IKESTON STAR SHIPPING INC.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  PAVEY
  SERVICES LTD.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  SHORELINE UNIVERSAL LIMITED

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  SPELMAN INTERNATIONAL CORP.

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by Konstantinos Koutsoubelis 

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
  /s/ Konstantinos Koutsoubelis

  	
   

  
	
  WAXSTONE
  SHIPPING INC.

  	
  )

  	
  Attorney-in-fact

  	
   

  

 

83

 

	
  THE CREDITORS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by YIANNIS CHEILAS

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
   

  	
   

  
	
  HSH NORDBANK
  AG 

  	
  )

  	
   

  	
   

  
	
  as
  Arranger, Agent, Security Agent, Account Bank, 

  	
  )

  	
  /s/  Yiannis Cheilas

  	
   

  
	
  Bank
  and Swap Provider

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by YIANNIS CHEILAS

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
   

  	
   

  
	
  CREDIT
  SUISSE 

  	
  )

  	
  /s/  Yiannis Cheilas

  	
   

  
	
  as
  Bank and Swap Provider

  	
  )

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by YIANNIS CHEILAS

  	
  )

  	
   

  	
   

  
	
  for
  and on behalf of 

  	
  )

  	
   

  	
   

  
	
  DEUTSCHE
  SCHIFFSBANK AG 

  	
  )

  	
  /s/  Yiannis Cheilas

  	
   

  
	
  as
  Bank

  	
  )

  	
  Attorney-in-fact

  	
   

  

 

84

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]