Document:

Exhibit 10.3

	
  

 
	

 

 
	
  

 
	
 FORM OF REGISTRATION RIGHTS AGREEMENT

 
	
  

 
	
 dated as of [   ], 2010,

 
	
  

 
	
 among

 
	
  

 
	
 COSTAMARE INC.

 
	
  

 
	
 and

 
	
  

 
	
 THE STOCKHOLDERS NAMED HEREIN

 
	
  

 
	

 

 

                    This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made as of [     ],
2010, among Costamare Inc., a Marshall Islands corporation (the “Company”)
and the stockholders set forth on the signature page of this Agreement
(together, the “Stockholders” and each, a “Stockholder”).

                    WHEREAS,
the Company has agreed to provide the Stockholders with certain registration
rights with respect to its shares of Common Stock.

                    ACCORDINGLY,
in consideration of the mutual covenants and agreements contained herein and
other good and valid consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

          1.
Certain Definitions.

                    As
used in this Agreement, capitalized terms not otherwise defined herein shall
have the meanings ascribed to them below:

          “Additional
Demand Rights” has the meaning set forth in Section 2.3(c).

          “Additional
Piggyback Rights” has the meaning set forth in Section 2.1(c).

          “Additional
Registrable Securities” has the meaning set forth in Section 2.3(c)(i).

          “Claims”
has the meaning set forth in Section 2.9.

          “Common
Stock” means the common stock, par value $0.0001 per share, of the Company
and any securities issued or issuable in exchange for or with respect to the
common stock of the Company by way of a stock dividend, stock split or
combination of shares or in connection with a reclassification,
recapitalization, exchange, merger, consolidation or other reorganization.

          “Common
Stock Equivalent” means all options, warrants and other securities
convertible into, or exchangeable or exercisable for (at any time or upon the
occurrence of any event or contingency and without regard to any vesting or
other conditions to which such securities may be subject) Common Stock.

          “Demand
Exercise Notice” has the meaning set forth in Section 2.1(a)(i).

          “Demand
Registration” has the meaning set forth in Section 2.1(a)(i).

          “Demand
Registration Request” has the meaning set forth in Section 2.1(a)(i).

          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

          “Expenses”
means any and all fees and expenses incurred in connection with the Company’s
performance of or compliance with Section 2, including, without limitation:
(i) SEC, stock exchange or FINRA registration and filing fees and all
listing fees and fees with respect to the inclusion of securities on the New
York Stock Exchange or on any securities market on 

2

which the
Common Stock is listed or quoted, (ii) fees and expenses of compliance
with state securities or “blue sky” laws and in connection with the preparation
of a “blue sky” survey, including without limitation, reasonable fees and
expenses of blue sky counsel, (iii) printing and copying expenses,
(iv) messenger and delivery expenses, (v) expenses incurred in
connection with any road show, (vi) fees and disbursements of counsel for
the Company, (vii) with respect to each registration, the fees and
disbursements of one counsel for the relevant Participating Holder(s) (selected
in each case by the Majority Participating Holders, in the case of a
registration pursuant to Section 2.1 or Section 2.2), (viii) fees and
disbursements of all independent public accountants (including the expenses of
any audit and/or “cold comfort” letter) and fees and expenses of other persons,
including special experts, retained by the Company, (ix) fees and expenses
payable to a Qualified Independent Underwriter (as such term is defined in Schedule
E to the By-Laws of FINRA) and (x) any other fees and disbursements of
underwriters, if any, customarily paid by issuers of securities.

          “FINRA”
means Financial Industry Regulatory Authority, Inc.

          “Holder”
means the Stockholder, for so long as such Stockholder owns any Registrable Securities,
and its successors, assigns and direct and indirect transferees who become
owners of Registrable Securities and become a party hereto pursuant to
Section 4.4(b) and “Holders” means all or any of them.

          “Initiating
Holders” has the meaning set forth in Section 2.1(a)(i).

          “IPO”
means an underwritten initial public offering registered under the Securities
Act of shares of Common Stock held by the Stockholders.

          “Majority
Participating Holders” means Participating Holders holding more than 50% of
the Registrable Securities proposed to be included in any offering of
Registrable Securities by such Participating Holders pursuant to Section 2.1 or
Section 2.2.

          “Manager”
has the meaning set forth in Section 2.3(a).

          “Participating
Holder” has the meaning set forth in Section 2.1(a)(ii) and/or Section
2.2.(a) as qualified in Section 2.2(c) and Section 2.3(a).

          “Person”
means any individual, corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.

          “Piggyback
Securities” has the meaning set forth in Section 2.3(a)(ii).

          “Postponement
Period” has the meaning set forth in Section 2.1(b).

          “Registrable
Securities” means any shares of Common Stock, provided such shares of
Common Stock shall cease to be Registrable Securities when (A) a registration
statement with respect to the sale of such shares of Common Stock shall have
been declared effective under the Securities Act and such shares of Common
Stock shall have been disposed of in accordance with such registration
statement, or (B) such securities shall have been sold (other than in a
privately 

3

negotiated
sale) pursuant to Rule 144 (or any successor provision) under the Securities
Act and in compliance with the requirements of Rule 144. 

          “SEC”
means the Securities and Exchange Commission.

          “Section
2.3(a) Sale Number” has the meaning set forth in Section 2.3(a).

          “Section
2.3(b) Sale Number” has the meaning set forth in Section 2.3(b).

          “Section
2.3(c) Sale Number” has the meaning set forth in Section 2.3(c).

          “Securities
Act” means the Securities Act of 1933, as amended.

          “Selected
Courts” has the meaning set forth in Section 4.6(d).

          “Valid
Business Reason” has the meaning set forth in Section 2.1(b).

          2.
Registration Rights.

                    2.1.
Demand Registrations.

                         (a)
(i) Subject to Section 2.1(b), at any time and from time to time after the date
of this Agreement, any Holder shall have the right to require the Company to
file a registration statement under the Securities Act covering all or a
portion of the Registrable Securities, by delivering a written request therefor
to the Company specifying the number of Registrable Securities to be included
in such registration by such Holder and the intended method of distribution
thereof. All such requests by any Holder pursuant to Section 2.1(a)(i) are
referred to herein as “Demand Registration Requests,” and the
registrations so requested are referred to herein as “Demand Registrations”
(with respect to any Demand Registration Request, the Holders making such
Demand Registration Request being referred to as the “Initiating Holders”).
As promptly as practicable, but no later than ten days after receipt of a
Demand Registration Request, the Company shall give written notice (the “Demand
Exercise Notice”) of such Demand Registration Request to all Holders of
record.

                              (ii)
The Company, subject to Sections 2.3 and 2.6, shall include in a Demand
Registration (x) the Registrable Securities of the Initiating Holders and
(y) the Registrable Securities of any other Holder which shall have made a
written request to the Company for inclusion in such Demand Registration
(together with the Initiating Holders, the “Participating Holders”)
(which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such Participating Holders) within 60 days after
the receipt by the Company of the Demand Exercise Notice (or 30 days if, at the
request of the Initiating Holders, the Company states in such Demand Exercise
Notice or gives telephonic notice to all Holders, with written confirmation to
follow promptly thereafter, that such registration will be on a Form F-3).

                              (iii) The Company shall, as expeditiously
as possible but subject to Section 2.1(b), use its commercially reasonable
efforts to (x) effect such registration under the Securities Act of the
Registrable Securities which the Company has been so requested 

4

by the
Participating Holders to register, for distribution in accordance with such
intended method of distribution and (y) if requested by the Majority
Participating Holders, obtain acceleration of the effective date of the
registration statement relating to such registration.

                         (b)
Notwithstanding anything to the contrary in Section 2.1(a), the Demand
Registration rights granted in Section 2.1(a) to the Holders are subject to the
following limitations: (i) the Company shall not be required to cause a
registration statement pursuant to Section 2.1(a)(i) to be filed, or to be
declared effective, within 90 days after the effective date of any other
registration statement of the Company filed pursuant to the Securities Act
(excluding any registration on Form F-4 or S-8 (or otherwise in connection
with any employee benefits plan) or any “shelf” registration) or, in either
case, within any longer period of time, subject to the Company’s compliance
with Section 4.7, during which the Company may be restricted from filing
or having declared effective a registration statement or the Participating
Holders may be restricted from selling any of their Registrable Securities;
(ii) if the Company, in its good faith judgment, determines that any
registration of Registrable Securities should not be made or continued because
it would materially interfere with any material financing, acquisition,
corporate reorganization or merger or other transaction or event involving the
Company or any of its subsidiaries (a “Valid Business Reason”), the
Company may postpone filing, or may withdraw, or not seek to bring effective, a
registration statement relating to a Demand Registration Request until such
Valid Business Reason no longer exists, but in no event shall the Company avail
itself of such right for more than 90 days, in the aggregate, in any period of
365 consecutive days (such period of postponement or withdrawal under this
clause (ii), the “Postponement Period”); and the Company shall give
notice to the relevant Participating Holders of its determination to postpone
or withdraw a registration statement and of the fact that the Valid Business
Reason for such postponement or withdrawal no longer exists, in each case,
promptly after the occurrence thereof; (iii) the Company shall not be
required to effect a Demand Registration unless the Registrable Securities to
be included in such registration either (A) have an aggregate anticipated
offering price of at least $20,000,000 (based on the then-current market price
of the Common Stock) or (B) consist of all remaining Registrable
Securities held by the relevant Participating Holders. If the Company shall
give any notice of postponement or withdrawal of any registration statement
pursuant to clause (ii) of this Section, the Company shall not, during the period
of postponement or withdrawal, register any equity security of the Company,
other than pursuant to a registration statement on Form F-4 or S-8 (or
otherwise in connection with any employee benefits plan). Each Participating
Holder agrees that, upon receiving notice from the Company that the Company has
withdrawn any registration statement pursuant to clause (ii) of this Section,
it will (x) discontinue its disposition of Registrable Securities pursuant to
such registration statement and (y) if so directed by the Company, deliver to
the Company (at the Company’s expense) all copies, other than permanent file
copies, in its possession of the prospectus covering such Registrable
Securities that was in effect at the time of receipt of such notice. If the
Company shall have withdrawn or prematurely terminated a registration statement
filed under Section 2.1(a)(i) (whether pursuant to clause (ii) above or as
a result of any stop order, injunction or other order or requirement of the SEC
or any other governmental agency or court), the Company shall not be considered
to have effected an effective registration for the purposes of this Agreement
until the Company shall have filed a new registration statement covering the
Registrable Securities covered by the withdrawn registration statement and such
registration statement shall have been declared effective and shall not have
been withdrawn. If the Company shall give any notice of withdrawal or
postponement 

5

of a
registration statement, the Company shall, at such time as the Valid Business
Reason that caused such withdrawal or postponement no longer exists (but in no
event later than three months after the date of the notice notifying the
relevant Participating Holders of the postponement or withdrawal), use its commercially
reasonable efforts to effect the registration under the Securities Act of the
Registrable Securities covered by the withdrawn or postponed registration
statement in accordance with Section 2.1 (unless the Initiating Holders shall
have withdrawn such request, in which case the Company shall not be considered
to have effected an effective registration for the purposes of this Agreement).

                         (c)
The Company, subject to Sections 2.3 and 2.6, may elect to include in any
registration statement and
offering made pursuant to Section 2.1(a)(i), (i) authorized but unissued
shares of Common Stock or shares of Common Stock held by the Company as
treasury shares and (ii) any other shares of Common Stock which are
requested to be included in such registration pursuant to the exercise of
piggyback rights granted by the Company which are not inconsistent with the
rights granted in, or otherwise conflict with the terms of, this Agreement (“Additional
Piggyback Rights”); provided,
however, that such inclusion
shall be permitted only to the extent that it is pursuant to and subject to the
terms of the underwriting agreement or arrangements, if any, entered into by
the relevant Participating Holders. 

                         (d)
With respect to any Demand Registration, the Initiating Holders shall have the
right to designate the lead managing underwriter in connection with such
registration and each other managing underwriter for such registration, provided that
no such managing underwriter shall be reasonably objectionable to the Company. 

                    2.2.
Piggyback Registrations.

                         (a)
If, at any time, the Company proposes or is required to register any of its
equity securities under the Securities Act (other than (i) solely the
registration of securities in connection with an employee benefits plan or
dividend reinvestment plan or an acquisition, merger or consolidation or
(ii) pursuant to a Demand Registration under Section 2.1) on a
registration statement on Form F-1, Form F-3 or an equivalent general
registration form then in effect, whether or not for its own account, the
Company shall give prompt written notice of its intention to do so to each
Holder of record. Upon the written request of any such Holder made within 15
days following the receipt of any such written notice (which request shall
specify the maximum number of Registrable Securities intended to be disposed of
by such Holder and the intended method of distribution thereof), the Company
shall, subject to Sections 2.2(b), 2.3 and 2.6, use its commercially
reasonable efforts to cause all such Registrable Securities, the Holders of
which have so requested the registration thereof, to be included in the
registration statement with the securities which the Company at the time
proposes to register to permit the sale or other disposition by such Holders
(in accordance with the intended method of distribution thereof) of the
Registrable Securities to be so registered. Such Holders shall be referred to
as Participating Holders for the purposes of any Registrable Securities to be
registered under Section 2.2(a). No registration of Registrable Securities
effected under Section 2.2(a) shall relieve the Company of its obligations to
effect Demand Registrations under Section 2.1.

                         (b)
If, at any time after giving written notice of its intention to register any
equity securities and prior to the effective date of the registration statement
filed in 

6

connection
with such registration, the Company shall determine for any reason not to
register or to delay registration of such equity securities, the Company will
give written notice of such determination to all relevant Participating Holders
and (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with
such abandoned registration, without prejudice, however, to the rights of
Holders under Section 2.1, and (ii) in the case of a determination to
delay such registration of its equity securities, shall be permitted to delay
the registration of such Registrable Securities for the same period as the
delay in registering such other equity securities, without prejudice, however,
to the rights of Holders under Section 2.1.

                         (c)
Any Participating Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any registration statement pursuant
to Section 2.2 by giving written notice to the Company of its request to withdraw;
provided, however, that such request must be made in
writing prior to the earlier of the execution of the underwriting agreement or
the execution of the custody agreement with respect to such registration. Any
Holder withdrawing pursuant to the provisions of Section 2.2(c) shall following
such withdrawal no longer be treated as a Participating Holder for the purposes
of this Agreement.

                    2.3.
Allocation of Securities Included in Registration Statement. 

                         (a)
If any requested registration made pursuant to Section 2.1 involves an
underwritten offering and the lead managing underwriter of such offering (the “Manager”)
shall advise the Company that, in its view, the number of securities requested
to be included in such registration by the relevant Participating Holders or
any other persons (including those shares of Common Stock requested by the
Company to be included in such registration) exceeds the largest number (the “Section
2.3(a) Sale Number”) that can be sold in an orderly manner in such offering
within a price range acceptable to the Majority Participating Holders, the
Company shall use its commercially reasonable efforts to include in such
registration:

                              (i)
first, all Registrable Securities requested to be included in such registration
by the Participating Holders thereof; provided,
however, that, if the number of
such Registrable Securities exceeds the Section 2.3(a) Sale Number, the number
of such Registrable Securities (not to exceed the Section 2.3(a) Sale Number)
to be included in such registration shall be allocated on a pro rata basis
among all relevant Participating Holders, based on the number of Registrable
Securities then owned by each such Participating Holder requesting inclusion in
relation to the number of Registrable Securities owned by all Participating
Holders requesting inclusion;

                              (ii)
second, to the extent that the number of securities to be included pursuant to
clause (i) of Section 2.3(a) is less than the Section 2.3(a) Sale Number, the
remaining shares to be included in such registration shall be allocated on a
pro rata basis among all holders requesting that securities be included in such
registration pursuant to the exercise of Additional Piggyback Rights (“Piggyback
Securities”), based on the aggregate number of Piggyback Securities then
owned by each holder requesting inclusion in relation to the aggregate number
of Piggyback Securities owned by all holders requesting inclusion, up to the
Section 2.3(a) Sale Number; and 

7 

                              (iii)
third, to the extent that the number of securities to be included pursuant to
clauses (i) and (ii) of Section 2.3(a) is less than the Section 2.3(a) Sale
Number, any securities that the Company proposes to register, up to the Section
2.3(a) Sale Number. 

                    If,
as a result of the proration provisions of Section 2.3(a), any Participating
Holder shall not be entitled to include in a registration all Registrable
Securities that such Participating Holder has requested be included in such
registration, such Participating Holder may elect to withdraw its request to
include any Registrable Securities in such registration or may reduce the
number requested to be included; provided,
however, that such request must be made in writing prior to the
earlier of the execution of the underwriting agreement or the execution of the
custody agreement with respect to such registration. Any Holder withdrawing all
of its Registrable Securities pursuant to the provisions of the preceding
sentence shall following such withdrawal no longer be treated as a
Participating Holder for the purposes of this Agreement. 

                         (b)
If any registration pursuant to Section 2.2 is an underwritten primary
registration of the Company’s securities, and the Manager shall advise the
Company that, in its view, the number of securities requested to be included in
such registration exceeds the number (the “Section 2.3(b) Sale Number”)
that can be sold in an orderly manner in such registration within a price range
acceptable to the Company, the Company shall include in such registration: 

                              (i)
first, all Common Stock that the Company proposes to register for its own
account; and 

                              (ii)
second, to the extent that the number of securities to be included pursuant to
clause (i) of Section 2.3(b) is less than the Section 2.3(b) Sale Number, the
remaining shares to be included in such registration shall be allocated on a
pro rata basis among all holders requesting that Registrable Securities or
Piggyback Securities be included in such registration pursuant to the exercise
of piggyback rights pursuant to Section 2.2 or Additional Piggyback Rights,
based on the aggregate number of Registrable Securities and Piggyback
Securities then owned by each holder requesting inclusion in relation to the
aggregate number of Registrable Securities and Piggyback Securities owned by
all holders requesting inclusion, up to the Section 2.3(b) Sale Number. 

                         (c)
If any registration pursuant to Section 2.2 is an underwritten secondary
registration on behalf of holders of the Company’s securities (other than
Registrable Securities) that have the right to require such registration pursuant
to an agreement entered into by the Company in accordance with Section 4.7 (“Additional
Demand Rights”) and the Manager shall advise the Company that, in its view,
the number of securities requested to be included in such registration exceeds
the number (the “Section 2.3(c) Sale Number”) that can be sold in an
orderly manner in such registration within a price range acceptable to the
Company, the Company shall include in such registration: 

                              (i)
first, all securities requested to be included in such registration by the
holders of Additional Demand Rights (“Additional Registrable Securities”),  

8

provided,
however,
that, if the number of such Additional Registrable Securities exceeds the
Section 2.3(c) Sale Number, the number of such Additional Registrable
Securities (not to exceed the Section 2.3(c) Sale Number) to be included in
such registration shall be allocated on a pro rata basis among all holders of
Additional Registrable Securities requesting that Additional Registrable
Securities be included in such registration, based on the number of Additional
Registrable Securities then owned by each such holder requesting inclusion in
relation to the number of Additional Registrable Securities owned by all of
such holders requesting inclusion, unless such holders shall have otherwise
agreed; 

                              (ii)
second, to the extent that the number of securities to be included pursuant to
clause (i) of Section 2.3(c) is less than the Section 2.3(c) Sale Number, any
Common Stock that the Company proposes to register for its own account, up to
the Section 2.3(c) Sale Number, and 

                              (iii)
third, to the extent that the number of securities to be included pursuant to
clauses (i) and (ii) of Section 2.3(c) is less than the Section 2.3(c) Sale
Number, the remaining shares to be included in such registration shall be
allocated on a pro rata basis among all holders requesting that Registrable
Securities or Piggyback Securities be included in such registration pursuant to
the exercise of piggyback rights pursuant to Section 2.2 or Additional
Piggyback Rights, based on the aggregate number of Registrable Securities and
Piggyback Securities then owned by each holder requesting inclusion in relation
to the aggregate number of Registrable Securities and Piggyback Securities
owned by all such holders requesting inclusion, up to the Section 2.3(c) Sale
Number. 

                    2.4.
Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its commercially reasonable efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company shall, as
expeditiously as possible: 

                         (a)
prepare and file with the SEC a registration statement on an appropriate
registration form of the SEC for the disposition of such Registrable Securities
in accordance with the intended method of disposition thereof, which form shall
be selected by the Company and shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and the Company shall use
its commercially reasonable efforts to cause such registration statement to
become and remain effective; provided,
however, that before filing a registration statement or prospectus
or any amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, or any free writing prospectus
related thereto, the Company will furnish to one counsel for the relevant
Participating Holders (selected by the Majority Participating Holders) and the
Manager, if any, copies of all such documents proposed to be filed (including
all exhibits thereto), which documents will be subject to the review and
reasonable comment of such counsel, and the Company shall not file any
registration statement or amendment thereto, any prospectus or supplement
thereto or any free writing prospectus related thereto to which the Majority
Participating Holders or the Manager, if any, shall reasonably object; 

9 

                         (b)
prepare and file with the SEC such amendments and supplements to the relevant
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective for such period as
any relevant Participating Holder shall request and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Registrable Securities covered by such registration statement in
accordance with the intended methods of disposition by the relevant
Participating Holders thereof set forth in such registration statement; 

                         
(c) furnish, without charge, to each relevant Participating Holder and each
underwriter, if any, of the securities covered by the relevant registration
statement such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits), the prospectus
included in such registration statement (including each preliminary prospectus)
in conformity with the requirements of the Securities Act, each free writing
prospectus utilized in connection therewith, and other documents, as such
Participating Holder and underwriter may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such Participating Holder (the Company hereby consenting to the use in
accordance with all applicable law of each such registration statement (or
amendment or post-effective amendment thereto) and each such prospectus (or
preliminary prospectus or supplement thereto) or free writing prospectus by each
such Participating Holder and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such registration
statement or prospectus); 

                         
(d) use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the relevant registration statement under
such other securities or “blue sky” laws of such jurisdictions as any relevant
Participating Holder or any managing underwriter, if any, shall reasonably request
in writing, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Participating Holder or underwriter, if
any, to consummate the disposition of the relevant Registrable Securities in
such jurisdictions, except that in no event shall the Company be required to
qualify to do business as a foreign corporation in any jurisdiction where it
would not, but for the requirements of this paragraph (d), be required to be so
qualified, to subject itself to taxation in any such jurisdiction or to consent
to general service of process in any such jurisdiction; 

                         
(e) promptly notify each Participating Holder selling such Registrable
Securities and each managing underwriter, if any: (i) when the relevant
registration statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto, any post-effective amendment to such
registration statement or any free writing prospectus has been filed and, with
respect to such registration statement or any post-effective amendment, when
the same has become effective; (ii) of any request by the SEC or state
securities authority for amendments or supplements to the relevant registration
statement or the prospectus related thereto or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of the relevant registration statement or the initiation of any proceedings for
that purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities
for sale under the securities or blue sky laws of any jurisdiction or the
initiation of any proceeding for such purpose; (v) of the existence of any fact
of which the Company becomes aware which results in the relevant registration
statement, the prospectus related thereto, any document incorporated therein by

10 

reference, any free writing prospectus or the
information conveyed to any purchaser at the time of sale to such purchaser
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statement
therein not misleading; and (vi) if at any time the representations and
warranties contemplated by any underwriting agreement, securities sale
agreement, or other similar agreement, relating to the offering shall cease to
be true and correct in all material respects; and, if the notification relates
to an event described in clause (v), the Company shall promptly prepare and
furnish to each such Participating Holder and each managing underwriter, if
any, a reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading; 

                         (f)
comply with all applicable rules and regulations of the SEC, and make generally
available to its security holders, as soon as reasonably practicable after the
effective date of the relevant registration statement (and in any event within
90 days after the end of such twelve month period described hereafter), an
earnings statement (which need not be audited) covering the period of at least
twelve consecutive months beginning with the first day of the Company’s first calendar
quarter after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; 

                         (g)
(i) cause all such Registrable Securities covered by the relevant registration
statement to be listed on the New York Stock Exchange or the principal
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) if no similar securities
are then so listed, to either cause all such Registrable Securities to be
listed on a national securities exchange or to take all actions that may be
required by the Company as the issuer of such Registrable Securities in order
to facilitate the managing underwriter’s arranging for the registration of at
least two market makers as such with respect to such shares with FINRA; 

                         (h)
provide and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such registration statement not later than
the effective date of such registration statement; 

                         (i)
enter into such customary agreements (including, if applicable, an underwriting
agreement containing customary provisions for indemnification and contribution
covering the underwriters and their affiliates) and take such other actions as
the Majority Participating Holders shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities (it being
understood that the relevant Participating Holders shall be parties to any such
underwriting agreement and may, at their option, require that the Company make
to and for the benefit of such Participating Holders the representations,
warranties and covenants of the Company which are being made to and for the
benefit of such underwriters); 

                         (j)
use its commercially reasonable efforts to obtain an opinion from the Company’s
counsel and “cold comfort” letters from the Company’s independent public 

11 

accountants in customary form and covering
such matters as are customarily covered by such opinions and “cold comfort”
letters delivered to underwriters in underwritten public offerings, which
opinion and letter shall be reasonably satisfactory to the underwriter, if any,
and furnish to each relevant Participating Holder and to each underwriter, if
any, a copy of such opinion and letter addressed to such Participating Holder
or underwriter; 

                         
(k) deliver promptly to each relevant Participating Holder and each
underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions with
the SEC or its staff with respect to the relevant registration statement, other
than those portions of any such memoranda which contain information subject to
attorney-client privilege with respect to the Company, and, upon receipt of
such confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by any Participating Holder relevant to
such registration statement, by any underwriter, if any, participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such Participating Holder
or any such underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company’s officers, directors and employees to supply all information
reasonably requested by any such Participating Holder, underwriter, attorney,
accountant or agent in connection with such registration statement; 

                         (l)
use its commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the relevant registration statement; 

                         (m)
provide a CUSIP number for all such Registrable Securities, not later than the
effective date of the relevant registration statement; 

                         (n)
make reasonably available its employees and personnel for participation in
“road shows” and other marketing efforts and otherwise provide reasonable
assistance to the underwriters (taking into account the needs of the Company’s
businesses and the requirements of the marketing process) in the marketing of
such Registrable Securities in any underwritten offering; 

                         (o)
promptly prior to the filing of any document which is to be incorporated by
reference into the relevant registration statement or the prospectus related
thereto (after the initial filing of such registration statement), and prior to
the filing of any free writing prospectus, provide copies of such document to
counsel for each relevant Participating Holder and to each managing
underwriter, if any, and make the Company’s representatives reasonably
available for discussion of such document and make such changes in such
document concerning any such Participating Holder or managing underwriter prior
to the filing thereof as counsel for such Participating Holder or managing
underwriter may reasonably request; 

                         (p)
cooperate with the relevant Participating Holders and the managing underwriter,
if any, to facilitate the timely preparation and delivery of certificates not
bearing any restrictive legends representing the Registrable Securities to be
sold, and cause such Registrable Securities to be issued in such denominations
and registered in such names in accordance with the underwriting agreement
prior to any sale of Registrable Securities to the underwriters or, if not an
underwritten offering, in accordance with the instructions of the relevant
Participating 

12 

Holders at least three business days prior to
any sale of Registrable Securities and instruct any transfer agent and
registrar of Registrable Securities to release any stop transfer orders in
respect thereof; 

                         (q)
take all such other commercially reasonable actions as are necessary or
advisable in order to expedite or facilitate the disposition of such
Registrable Securities; 

                         (r)
take no direct or indirect action prohibited by Regulation M under the Exchange
Act; provided, however, that to
the extent that any prohibition is applicable to the Company, the Company will
take such action as is necessary to make any such prohibition inapplicable; 

                         (s)
take all reasonable action to ensure that any free writing prospectus utilized
in connection with any registration covered by Section 2.1 or Section 2.2
complies in all material respects with the Securities Act, is filed in
accordance with the Securities Act to the extent required thereby, is retained
in accordance with the Securities Act to the extent required thereby and, when
taken together with the related prospectus, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and 

                         (t)
in connection with any underwritten offering, if at any time the information
conveyed to a purchaser at the time of sale includes any untrue statement of a
material fact or omits to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, promptly file with the SEC such amendments or supplements
to such information as may be necessary so that the statements as so amended or
supplemented will not, in light of the circumstances, be misleading. 

                    
To the extent the Company is a well-known seasoned issuer (as defined in Rule
405 under the Securities Act) (a “WKSI”) at the time any Demand
Registration Request is submitted to the Company, and such Demand Registration
Request requests that the Company file an automatic shelf registration
statement (as defined in Rule 405 under the Securities Act) (an “automatic
shelf registration statement”) on Form F-3, the Company shall file an
automatic shelf registration statement which covers those Registrable
Securities which are requested to be registered. The Company shall use its
commercially reasonable efforts to remain a WKSI (and not become an ineligible
issuer (as defined in Rule 405 under the Securities Act)) during the period
during which such automatic shelf registration statement is required to remain
effective. If the Company does not pay the filing fee covering the Registrable
Securities at the time the automatic shelf registration statement is filed, the
Company agrees to pay such fee at such time or times as the Registrable
Securities are to be sold. If the automatic shelf registration statement has
been outstanding for at least three years, at the end of the third year the
Company shall refile a new automatic shelf registration statement covering the
Registrable Securities. If at any time when the Company is required to
re-evaluate its WKSI status the Company determines that it is not a WKSI, the
Company shall use its commercially reasonable efforts to refile the shelf
registration statement on Form F-3 and, if such form is not available, Form F-1
and keep such registration statement effective during the period during which
such registration statement is required to be kept effective. 

13 

                    
If the Company files any shelf registration statement for the benefit of the
holders of any of its securities other than the Holders, the Company agrees
that it shall include in such registration statement such disclosures as may be
required by Rule 430B (referring to the unnamed selling security holders in a
generic manner by identifying the initial offering of the securities to the
Holders) in order to ensure that the Holders may be added to such shelf
registration statement at a later time through the filing of a prospectus
supplement rather than a post-effective amendment. 

                    
As a condition precedent to the Company’s obligations under Section 2.4 to
register Registrable Securities, the Company may require that each
Participating Holder furnish the Company such information in writing regarding
such Participating Holder and the distribution of the Registrable Securities
owned by such Participating Holder, as the Company may from time to time
reasonably request provided that such information is necessary for the Company
to consummate such registration and shall be used only in connection with such
registration. 

                    
Each Participating Holder agrees that upon receipt of any notice from the
Company of the happening of any event of the kind described in clause (v) of
paragraph (e) of Section 2.4, such Participating Holder will (x) discontinue
disposing Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Participating Holder receives
copies of the supplemented or amended prospectus contemplated by paragraph (e)
of Section 2.4 and (y) if so directed by the Company, deliver to the Company
(at the Company’s expense) all copies, other than permanent file copies, in
such Participating Holder’s possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such
notice. In the event the Company shall give any such notice, the applicable
period mentioned in paragraph (b) of Section 2.4 shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each Participating Holder of any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
paragraph (e) of Section 2.4. 

                    
If any such registration statement or comparable statement under “blue sky”
laws refers to any Holder by name or otherwise as the Holder of any securities
of the Company, then such Holder shall have the right to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company’s securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel to the Company, required by the Securities Act or any
similar federal statute or any state “blue sky” or securities law then in
force, the deletion of the reference to such Holder. 

                    2.5.
Registration Expenses. 

                         (a)
The Company shall pay all Expenses (x) with respect to any Demand Registration
whether or not it becomes effective or remains effective for the period 

14 

contemplated by Section 2.4(b) and (y) with
respect to any registration effected under Section 2.2. 

                         (b)
Notwithstanding the foregoing, (x) the provisions of Section 2.5 shall be
deemed amended to the extent necessary to cause these expense provisions to
comply with “blue sky” laws of each state in which the relevant offering is
made and (y) in connection with any offering hereunder, each Participating
Holder shall pay all brokerage fees or underwriting discounts and commissions
and any transfer taxes, if any, attributable to the sale of the Registrable
Securities of such Participating Holder, pro rata with respect to payments of
fees, discounts and commissions in accordance with the number of shares sold in
such offering by such Participating Holder, and (z) the Company shall, in the
case of all registrations under this Section 2, be responsible for all its
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties). 

                    2.6.
Certain Limitations on Registration Rights. In the case of any
registration under Section 2.1 pursuant to an underwritten offering, or, in the
case of a registration under Section 2.2, if the Company has determined to
enter into an underwriting agreement in connection therewith, all securities to
be included in such registration shall be subject to an underwriting agreement
and no Person may participate in such registration unless such Person agrees to
sell such Person’s securities on the basis provided therein and, subject to
Section 3.1, completes and executes all reasonable questionnaires, and other
documents (including custody agreements and powers of attorney) which must be
executed in connection therewith, and provides such other information to the
Company or the managing underwriter as may be necessary to register such
Person’s securities. 

                    2.7.
Limitations on Sale or Distribution of Other Securities. (a) Each
Participating Holder agrees, (i) to the extent requested in writing by a
managing underwriter, if any, of any registration effected pursuant to Section
2.1 or Section 2.2, not to sell, transfer or otherwise dispose of, including
any sale pursuant to Rule 144 under the Securities Act, any Common Stock or any
other equity security of the Company or any security convertible into or
exchangeable or exercisable for any equity security of the Company (other than
as part of such underwritten public offering) during the time period reasonably
requested by the managing underwriter, not to exceed 180 days (and the Company
hereby also so agrees (except that the Company may effect any sale or
distribution of any such securities pursuant to a registration on Form F-4 (if
reasonably acceptable to such managing underwriter) or Form S-8 (or otherwise in
connection with any employee benefits plan), or any successor or similar form
which is then in effect or upon the conversion, exchange or exercise of any
then outstanding Common Stock Equivalent) to use its commercially reasonable
efforts to cause each holder of any equity security or any security convertible
into or exchangeable or exercisable for any equity security of the Company
purchased from the Company at any time other than in a public offering so to
agree), and (ii) to the extent requested in writing by a managing underwriter
of any underwritten public offering effected by the Company for its own
account, not sell any Common Stock or any Common Stock Equivalent (other than
as part of such underwritten public offering) during the time period reasonably
requested by the managing underwriter, which period shall not exceed 180 days. 

15 

                         (b)
The Company hereby agrees that, if it shall previously have received a request
for registration pursuant to Section 2.1 or Section 2.2, and if such previous
registration shall not have been withdrawn or abandoned, the Company shall not
sell, transfer, or otherwise dispose of, any Common Stock or any Common Stock
Equivalent, or any other equity security of the Company or any security convertible
into or exchangeable or exercisable for any equity security of the Company
(other than as part of such underwritten public offering, a registration on
Form F-4 or Form S-8 (or otherwise in connection with any employee benefits
plan) or any successor or similar form which is then in effect or upon the
conversion, exchange or exercise of any then outstanding Common Stock
Equivalent), until a period of 90 days shall have elapsed from the effective
date of such previous registration; and the Company shall so provide in any
registration rights agreements hereafter entered into with respect to any of
its securities. 

                    2.8.
No Required Sale. Nothing in this Agreement shall be deemed to create an
independent obligation on the part of any Holder to sell any Registrable
Securities pursuant to any effective registration statement. 

                    2.9.
Indemnification. (a) In the event of any registration of any securities
of the Company under the Securities Act pursuant to Section 2, the Company
will, and hereby agrees to, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder and each underwriter for each such Holder, and
their respective directors, officers, fiduciaries, employees, stockholders,
members or general and limited partners (and the directors, officers, employees
and stockholders thereof), and each other Person, if any, who controls such
Holder or such underwriter within the meaning of the Securities Act, from and
against any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) and expenses
(including reasonable fees of counsel and any amounts paid in any settlement
effected with the Company’s consent, which consent shall not be unreasonably
withheld or delayed) to which each such indemnified party may become subject
under the Securities Act or otherwise, including with respect to any indemnity
or contribution provided by such Holder under an underwriting agreement or
other arrangement relating to such registration of securities (collectively, “Claims”),
and the Company will reimburse any such indemnified party for any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim as such expenses are incurred; provided, however, that the Company shall
not be liable to any such indemnified party in any such case to the extent such
Claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material fact
made in the relevant registration statement or amendment thereof or supplement
thereto or in any such prospectus or any preliminary, final or summary
prospectus or free writing prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such
indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder. 

                         (b)
Each Participating Holder of Registrable Securities as to which any
registration under Section 2.1 or Section 2.2 is being effected shall,
severally and not jointly, indemnify and hold harmless (in the same manner and
to the same extent as set forth in paragraph (a) of Section 2.9) to the extent
permitted by law the Company, its officers and 

16 

directors, each Person controlling the
Company within the meaning of the Securities Act and all other prospective
sellers and their respective directors, officers, fiduciaries, managing
directors, employees, agents, affiliates, consultants, representatives, successors,
assigns, general and limited partners, stockholders and respective controlling
Persons with respect to any untrue statement or alleged untrue statement of any
material fact in, or omission or alleged omission of any material fact from,
the relevant registration statement, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or any
free writing prospectus utilized in connection therewith, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or its
representatives by or on behalf of such Participating Holder specifically for
use therein and reimburse such indemnified party for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such Claim as such expenses are incurred; provided,
however, that the aggregate amount which any such Participating
Holder shall be required to pay pursuant to Section 2.9(b) and Sections 2.9(c),
(e) and (f) shall in no case be greater than the amount of the net proceeds
received by such Participating Holder upon the sale of the Registrable
Securities pursuant to the registration statement giving rise to such Claim.
Such indemnity and reimbursement of expenses shall remain in full force and
effect regardless of any investigation made by or on behalf of such indemnified
party and shall survive the transfer of such Registrable Securities by such
Participating Holder. 

                         (c)
Any Person entitled to indemnification under this Agreement shall notify
promptly the indemnifying party in writing of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to Section 2.9, but the failure of any such Person to provide such
notice shall not relieve the indemnifying party of its obligations under the
preceding paragraphs of Section 2.9, except to the extent the indemnifying
party is materially prejudiced thereby and shall not relieve the indemnifying
party from any liability which it may have to any such Person otherwise than
under this Article 2. In case any action or proceeding is brought against an
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, unless in the reasonable opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided,
however, that (i) if the indemnifying party fails to take reasonable
steps necessary to defend diligently the action or proceeding within 20 days
after receiving notice from such indemnified party; or (ii) if such indemnified
party who is a defendant in any action or proceeding which is also brought
against the indemnifying party reasonably shall have concluded that there may
be one or more legal defenses available to such indemnified party which are not
available to the indemnifying party; or (iii) if representation of both parties
by the same counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth above (but with no
more than one firm of counsel for all indemnified parties in each jurisdiction,
except to the extent any 

17 

indemnified party or parties reasonably shall
have concluded that there may be legal defenses available to such party or
parties which are not available to the other indemnified parties or to the
extent representation of all indemnified parties by the same counsel is
otherwise inappropriate under applicable standards of professional conduct) and
the indemnifying party shall be liable for any expenses therefor. No
indemnifying party shall, without the written consent of the indemnified party,
which consent shall not be unreasonably withheld, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or proceeding) unless such
settlement, compromise or judgment (A) includes an unconditional release of the
indemnified party from all liability arising out of such action or proceeding
and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. 

                         (d)
If for any reason the foregoing indemnity is unavailable or is insufficient to
hold harmless an indemnified party under Sections 2.9(a), (b) or (c), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of any Claim in such proportion as is appropriate
to reflect the relative fault of the indemnifying party, on the one hand, and
the indemnified party, on the other hand, with respect to such offering of
securities. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just
and equitable if contributions pursuant to Section 2.9(e) were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the preceding sentences
of Section 2.9(e). The amount paid or payable in respect of any Claim shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such Claim.
No Person guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. Notwithstanding
anything in Section 2.9(e) to the contrary, no indemnifying party (other than
the Company) shall be required pursuant to Section 2.9(e) to contribute any
amount in excess of the net proceeds received by such indemnifying party from
the sale of Registrable Securities in the offering to which the losses, claims,
damages or liabilities of the indemnified parties relate, less the amount of any
indemnification payment made by such indemnifying party pursuant to Sections
2.9(b) and (c). 

                         (e)
The indemnity and contribution agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect 

18

regardless of
any investigation made or omitted by or on behalf of any indemnified party and
shall survive the transfer of any Registrable Securities by any such party. 

                         (f)
The indemnification and contribution required by Section 2.9 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or
liability is incurred. 

          3.
Underwritten Offerings. 

                    3.1.
Requested Underwritten Offerings. If requested by the underwriters for
any underwritten offering pursuant to a registration requested under Section
2.1, the Company shall enter into a customary underwriting agreement with the
underwriters. Such underwriting agreement shall be satisfactory in form and
substance to the Majority Participating Holders and shall contain such
representations and warranties by, and such other agreements on the part of,
the Company and such other terms as are generally prevailing in agreements of
that type, including, without limitation, indemnities and contribution
agreements. Any Participating Holder to the offering shall be a party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Participating Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Participating Holder; provided, however, that the Company shall not be
required to make any representations or warranties with respect to written
information specifically provided by a Participating Holder for inclusion in
the relevant registration statement. Each such Participating Holder shall not
be required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements regarding such Participating Holder, its ownership of and title to
the relevant Registrable Securities, and its intended method of distribution;
and any liability of such Participating Holder to any underwriter or other
Person under such underwriting agreement shall be limited to liability arising
from breach of such Participating Holder’s representations and warranties and
shall be limited to an amount equal to the proceeds (net of expenses and underwriting
discounts and commissions) that such Participating Holder derives from such
registration. 

                    3.2.
Piggyback Underwritten Offerings. In the case of a registration pursuant
to Section 2.2, if the Company shall have determined to enter into an
underwriting agreement in connection therewith, any Registrable Securities to
be included in such registration shall be subject to such underwriting
agreement. Any Participating Holder to such registration may, at its option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Participating
Holder and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the obligations of such Participating Holder. Each such Participating Holder
shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Participating Holder, its ownership of
and title to the relevant Registrable Securities, and its intended method of
distribution; and any liability of such Participating Holder to any underwriter
or other Person 

19

under such
underwriting agreement shall be limited to liability arising from breach of
such Participating Holder representations and warranties and shall be limited
to an amount equal to the proceeds (net of expenses and underwriting discounts
and commissions) that such Participating Holder derives from such registration.

          4.
General. 

                    4.1.
Adjustments Affecting Registrable Securities. The Company agrees that it
shall not effect or permit to occur any combination or subdivision of shares of
Common Stock or Common Stock Equivalent which would adversely affect the
ability of any Holder of any Registrable Securities to include such Registrable
Securities in any registration contemplated by this Agreement or the
marketability of such Registrable Securities in any such registration. The
Company agrees that it will take all reasonable steps necessary to effect a
subdivision of shares if in the reasonable judgment of (a) the Majority
Participating Holders or (b) the managing underwriter for the relevant
offering, such subdivision would enhance the marketability of the Registrable
Securities. Each Holder agrees to vote all of its shares of capital stock in a
manner, and to take all other actions necessary, to permit the Company to carry
out the intent of the preceding sentence including, without limitation, voting
in favor of an amendment to the Company’s certificate of incorporation in order
to increase the number of authorized shares of capital stock of the Company. 

                    4.2.
Rule 144. The Company covenants that (i) upon such time as it becomes,
and so long as it remains, subject to the reporting provisions of the Exchange
Act, it will timely file the reports required to be filed by it under the
Securities Act or the Exchange Act (including, but not limited to, the reports
under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 under the Securities Act), and (ii) it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such
requirements. 

                    4.3.
Nominees for Beneficial Owners. If Registrable Securities are held by a
nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its option, be treated as the Holder of such Registrable Securities for
purposes of any request or other action by any Holder pursuant to this
Agreement (or any determination of any number or percentage of shares
constituting Registrable Securities held by any Holder contemplated by this
Agreement), provided that the Company shall have received assurances reasonably
satisfactory to it of such beneficial ownership. 

                    4.4.
Amendments and Waiver; Transferees. (a) The terms and provisions of this
Agreement may be modified or amended, or any of the provisions hereof waived,
temporarily or permanently, in a writing executed and delivered by the Company
and each of the Holders. No waiver of any of the provisions of this Agreement
shall be deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar). No delay on the part 

20

of any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof. 

                    (b)
Each Stockholder shall be entitled to transfer the benefits of this Agreement
to any Person to whom it shall transfer all or any of its Registrable
Securities, and any such transferee shall similarly be entitled to transfer the
benefits of this Agreement; provided that
each Stockholder agrees that it shall cause any such transferee to become a
party to this Agreement by executing a counterpart of this Agreement and
delivering the same to the Company. The Company shall not be required to effect
the registration of any transfer of shares by a Stockholder unless it shall
have received such a signed counterpart of this Agreement. This Agreement shall
be effective with respect to any such transferee without the need for any
action on the part of any other Stockholder. 

                    4.5.
Notices. All notices, requests, claims, demands and other communications
required or permitted to be given hereunder will be in writing and will be
given when delivered by hand or sent by registered or certified mail (postage
prepaid, return receipt requested) or by overnight courier (providing proof of
delivery) or by telecopy (providing confirmation of transmission). All such
notices, requests, claims, demands or other communications will be addressed as
follows: 

	
  

 	
  

 	
  

 
	
 (a)

 	
  

 	
 if to the
 Company, to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Costamare
 Inc.

 60 Zephyrou Street &

 Syngrou Avenue

 17564 Athens

 Greece

 Telephone No.: +30-210-94-90-000

 Fax No.: +30 210-940-6454

 Attention: Chief Executive Officer

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 With a copy
 to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Cravath,
 Swaine & Moore LLP

 Worldwide Plaza

 825 Eighth Avenue

 New York, New York 10019

 Telephone No.: (212) 474-1000

 Fax No.: (212) 474-3700

 Attention: William P. Rogers, Jr.

 

21

	
  
	 	
  

	
 (b)

 	
  

 	
 If to a
 Stockholder, to:

 
	
  

 	
  

 	
  

 
	
  
	 	
 Costamare
 Shipping Company S.A.

 60 Zephyrou Street &

 Syngrou Avenue

 17564 Athens

 Greece

 Telephone No.: +30-210-94-90-000

 Fax No.: +30 210-940-6454

 Attention: Chief Executive Officer

	
  
	 
	
  

	
  
	 
	
 With a copy
 to:

	
  
	 
	
  

	
  
	 
	
 Cravath,
 Swaine & Moore LLP

 Worldwide Plaza

 825 Eighth Avenue

 New York, New York 10019

 Telephone No.: (212) 474-1000

 Fax No.: (212) 474-3700

 Attention: William P. Rogers, Jr.

or such other
address as the Company or such Stockholder shall have specified to the other
party in writing in accordance with Section 4.5. 

                    4.6.
Miscellaneous. 

                         (a)
Subject to Section 4.4(b), this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and the respective
successors, personal representatives and assigns of the parties hereto. 

                         (b)
This Agreement (with the documents referred to herein or delivered pursuant
hereto) embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements. 

                         (c)
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES THEREOF). 

                         (d)
With respect to any suit, action or proceeding (“Proceeding”) arising
out of or relating to this Agreement each of the parties hereto hereby
irrevocably (i) submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or if such suit, action or
proceeding may not be brought in such court for jurisdictional reasons, in the
Supreme Court of the State of New York, New York County (collectively, the “Selected
Courts”) and waives any objection to venue being laid in the Selected
Courts whether based on the grounds of forum non conveniens or otherwise and
hereby agrees not to commence any such Proceeding other than before one of the
Selected Courts; provided, however, that a party may commence any
Proceeding in a court other than a Selected Court solely for the purpose of
enforcing an order or judgment issued by one of the Selected Courts 

22

and (ii)
consents to service of process in any Proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or by recognized
international express carrier or delivery service, to the Company or such
Stockholder at their respective addresses referred to in Section 4.5; provided, however,
that nothing herein shall affect the right of any party hereto to serve process
in any other manner permitted by law. 

                         (e)
WITH RESPECT TO ANY PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY, TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVE, AND
COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED
TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AND AGREE THAT ANY OF THEM MAY FILE A COPY OF
THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS
AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. 

                         (f)
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. All section references are to
this Agreement unless otherwise expressly provided. 

                         (g)
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one
instrument. 

                         (h)
Any term or provision of this Agreement which is invalid or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. 

                         (i)
The parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
its specific terms or was otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions and other equitable
remedies to prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof in any of the Selected Courts, this being in
addition to any other remedy to which they are entitled at law or in equity.
Any requirements for the securing or posting of any bond with respect to such
remedy are hereby waived by each of the parties hereto. Each party further
agrees that, in the event of any action for an injunction or other equitable
remedy in respect of such breach or enforcement of specific performance, it
will not assert the defense that a remedy at law would be adequate. 

23

                         (j)
Each party hereto shall do and perform or cause to be done and performed all
such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby. 

                    4.7.
No Inconsistent Agreements. The Company represents that the rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with any other agreements to which the Company is a party or by
which it is bound. Without the prior written consent of Holders of a majority
of the then outstanding Registrable Securities, the Company will not, on or
after the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted in this Agreement or
otherwise conflicts with the provisions hereof or provides terms and conditions
which, taken as a whole, are materially more favorable to, or materially less
restrictive on, the other party thereto than the terms and conditions contained
in this Agreement are (insofar as they are applicable) to the Holders, other
than any lock-up agreement with the underwriters in connection with any
registered offering effected hereunder, pursuant to which the Company shall
agree not to register for sale, and the Company shall agree not to sell or
otherwise dispose of, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, for a specified period that is no
longer than 180 days in the case of an IPO, or 90 days, in the case of any
other registered offering, following the registered offering; provided,
however, that in the event that either (a) during the last 17 days of the
180-day period or the 90-day period referred to above, as applicable, the
Company issues an earnings release or material news or a material event
relating to the Company occurs or (b) prior to the expiration of the 180-day
restricted period or the 90-day restricted period, as applicable, the Company
announces that it will release earnings results or becomes aware that material
news or a material event will occur during the 16-day period beginning on the
last day of the 180-day restricted period or the 90-day restricted period, as
applicable, the restrictions described above will continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event. The Company
further agrees that if any other registration rights agreement entered into
after the date of this Agreement with respect to any of its securities contains
terms which, taken as a whole, are materially more favorable to, or materially
less restrictive on, the other party thereto than the terms and conditions
contained in this Agreement are (insofar as they are applicable) to the
Holders, then the terms and conditions of this Agreement shall immediately be
deemed to have been amended without further action by the Company or any of the
Holders so that the Holders shall each be entitled to the benefit of any such
more favorable or less restrictive terms or conditions. 

                    IN
WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the
date first above written. 

	
  

 	
  

 	
  

 
	
 COSTAMARE
 INC.

 	
  

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Vasileios
 Konstantakopoulos, as Stockholder

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Konstantinos
 Konstantakopoulos, as Stockholder

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Christos
 Konstantakopoulos, as Stockholder

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Achillefs
 Konstantakopoulos, as Stockholder

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Kent
 Maritime Investments S.A., as Stockholder

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Yaco
 Maritime Investments S.A., as Stockholder

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Vasska
 Maritime Investments S.A., as Stockholder

 

[SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT]Exhibit 10.4

 

Dated: 22nd
July, 2008

THE LENDERS AND
FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1

- and -

DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT

as joint Arranger, Agent, Swap Bank and
Security Agent 

- and -

BAYERISCHE HYPO-UND VEREINSBANK AKTIENGESELLSCHAFT

as joint Arranger, Swap Bank and Account Bank

- and - 

HSH NORDBANK AG 

as Swap Bank 

- and - 

COSTAMARE INC. 

as Borrower

	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 FACILITY AGREEMENT 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 relating to a loan facility of US$1,000,000,000
 comprising: 

 	
  

 
	
  

 	
 (i) a term loan facility of up to US$700,000,000; and 

 	
  

 
	
  

 	
 (ii) a revolving credit facility of up to US$300,000,000

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 
	
  

 	 

 	
  

 

CONTENTS

	
  

 	
  

 	
  

 	
  

 
	
 Clause

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1

 	
 PURPOSE AND
 DEFINITIONS

 	
 1

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2

 	
 THE TOTAL
 COMMITMENT AND THE ADVANCES

 	
 17

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3

 	
 INTEREST AND
 INTEREST PERIODS

 	
 20

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4

 	
 REPAYMENT
 AND PREPAYMENT

 	
 23

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 5

 	
 FEES,
 COMMITMENT COMMISSION AND EXPENSES

 	
 27

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6

 	
 PAYMENTS AND
 TAXES; ACCOUNTS AND CALCULATIONS

 	
 29

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7

 	
 REPRESENTATIONS
 AND WARRANTIES

 	
 32

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8

 	
 UNDERTAKINGS

 	
 37

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9

 	
 CONDITIONS

 	
 48

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10

 	
 EVENTS OF
 DEFAULT

 	
 49

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11

 	
 INDEMNITIES

 	
 55

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12

 	
 UNLAWFULNESS
 AND INCREASED COSTS

 	
 56

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13

 	
 SECURITIES,
 APPLICATION, SET-OFF AND PRO-RATA PAYMENTS

 	
 58

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14

 	
 ACCOUNTS

 	
 61

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 15

 	
 ASSIGNMENT,
 TRANSFER AND LENDING OFFICE

 	
 62

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16

 	
 ARRANGERS,
 AGENT AND SECURITY AGENT

 	
 65

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 17

 	
 NOTICES AND
 OTHER MATTERS

 	
 75

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 18

 	
 GOVERNING
 LAW AND JURISDICTION

 	
 77

 
	
  

 	
  

 	
  

 
	
 SCHEDULES 

 
	
  

 
	
 Schedule 1
 The Lenders and their Commitments

 	
 85

 
	
  

 	
  

 
	
 Schedule 2
 Form of Drawdown Notice

 	
 87

 
	
  

 	
  

 
	
 Schedule 3
 Documents and evidence required as conditions precedent

 	
 88

 
	
  

 	
  

 
	
 Schedule 4
 Form of Transfer Certificate

 	
 97

 
	
  

 	
  

 
	
 Schedule 5
 Form of Trust Deed

 	
 102

 
	
  

 	
  

 
	
 Schedule 6
 The Swap Banks

 	
 103

 
	
  

 	
  

 
	
 Schedule 7
 Details of Tranche A Ships

 	
 104

 
	
  

 	
  

 
	
 Details of
 Tranche A Ships

 	
 104

 
	
  

 	
  

 
	
 Schedule 8
 Details of the Existing Charterparties of the Tranche A Ships

 	
 105

 
	
  

 	
  

 
	
 Schedule 9
 List of Costamare Fleet vessels

 	
 106

 
	
  

 	
  

 
	
 Schedule 10
 Form of Compliance Certificate

 	
 108

 

THIS AGREEMENT is
dated 22nd July, 2008 and made BETWEEN:

 (1)   COSTAMARE INC.,
as Borrower; 

 (2)   DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT,
as joint Arranger, Security Agent, Swap Bank and Agent; 

 (3)   BAYERISCHE HYPO-UND VEREINSBANK AKTIENGESELLSCHAFT,
as joint Arranger, Swap Bank and Account Bank; 

 (4)   HSH NORDBANK AG, as Swap Bank;
and 

 (5)   THE LENDERS AND FINANCIAL INSTITUTIONS
whose names and addresses are set out in schedule 1 as Lenders. 

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 Lenders agree, according to their several obligations, to make
 available to the Borrower, in several Advances, a loan facility of up to One
 billion Dollars (US$1,000,000,000) comprising: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 a Term Loan Facility of up to Seven hundred million Dollars
 (US$700,000,000) (“Tranche A”)
 to be used for providing the Borrower with funds for general corporate and
 working capital purposes; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 a Revolving Facility of up to Three hundred million Dollars
 (US$300,000,000) (“Tranche B”)
 to be used for the purpose of financing part of the Acquisition Cost of
 Tranche B Ships or to finance part of the Market Value of Tranche B Ships
 already owned by Subsidiaries of the Borrower in order to provide the
 Borrower with funds for general corporate and working capital purposes. 

 
	
  

 	
  

 	
  

 	
  

 
	
 1.2

 	
  

 	
 Definitions 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In this Agreement, unless the context otherwise requires: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  “Account Bank”
 means HVB or such other bank as may be designated by the Lenders as the
 Account Bank for the purpose of this Agreement (and includes its successors
 and assigns); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  “Accounts” means,
 together, the Operating Accounts and any other account opened by the Borrower
 and maintained with the Account Bank and “Account”
 means any of them as the context may require; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  “Accounts Pledge Agreement”
 means the first priority pledge executed or (as the context may require) to
 be entered into between one or more Owners, the Lenders and the Account Bank
 in respect of the Operating Accounts relative to the Ship(s) of such Owner(s)
 in form and substance satisfactory to the Agent (acting on the instructions
 of the Lenders) (together, the “Accounts
 Pledge Agreements”); 

 

1

	
  

 	
  

 
	
  

 	
  “Advance” means
 each Term Advance and each Revolving Advance; 

 
	
  

 	
  

 
	
  

 	
  “Agent” means DSB
 or such other person as may be appointed as agent by the Lenders pursuant to
 clause 16.13 and includes its successors in title; 

 
	
  

 	
  

 
	
  

 	
  “Amalgamation Date”
 means the date following the 12th Repayment Date upon which the
 Term Advances and the Revolving Advances shall be amalgamated; 

 
	
  

 	
  

 
	
  

 	
  “Approved Charterparty”
 in relation to a Ship means any time charter, agreement or related document
 in respect of the employment of such Ship exceeding twelve (12) month charter
 period, whether now existing or hereinafter entered into by the Owner thereof
 (and shall include any addenda thereto) and such expression also includes the
 Existing Charterparties; 

 
	
  

 	
  

 
	
  

 	
  “Approved Valuator”
 means any of Arrow, Howe Robinson, Clarksons, SSY, Ross Shipbrokers, Platou
 and Maerskbroker; 

 
	
  

 	
  

 
	
  

 	
  “Acquisition Cost”
 means, in relation to a Tranche B Ship, the aggregate amount paid or to be
 paid by the relevant Owner to the Seller thereof pursuant to the relevant MOA
 and which relates to the sale and purchase of such Tranche B Ship; 

 
	
  

 	
  

 
	
  

 	
  “Arrangers” means,
 together, DSB and HVB and includes their respective successors in title; 

 
	
  

 	
  

 
	
  

 	
  “Available Revolving Facility Amount”
 in relation to the Revolving Facility means at any time during the
 Availability Period in respect of the Revolving Facility, the maximum amount
 thereof less the aggregate amount of the Revolving Advances
 outstanding at that time; 

 
	
  

 	
  

 
	
  

 	
  “Availability Period”
 means the period starting on the date hereof and ending in respect of (a) the
 Term Loan Facility on the Final Availability Date in respect thereof or until
 such later date as the Lenders may agree in writing or on such earlier date
 (if any), (aa) on which the whole of the Term Loan Facility has been advanced
 by the Lenders to the Borrower, or (bb) on which the Total Commitment in
 respect of the Term Loan Facility is reduced to zero pursuant to clauses 10.2
 or 12 or any other clause of this Agreement and (b) the Revolving Facility
 (i) on the Final Availability Date in respect thereof or (ii) if earlier, the
 date on which the Revolving Facility is fully cancelled or terminated under
 any provision of this Agreement; 

 
	
  

 	
  

 
	
  

 	
  “Balloon Instalment”
 has the meaning ascribed thereto in clause 4.1.1; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “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; 

 

2

	
  

 	
  

 
	
  

 	
  “Borrower” means COSTAMARE INC., a corporation incorporated in the Republic
 of the Marshall Islands whose registered office is at Trust Company Complex,
 Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, and
 includes its successors in title; 

 
	
  

 	
  

 
	
  

 	
  “Cash flow” means
 at any relevant time the net charter hire of all Mortgaged Ships less
 the Operating Expenses; 

 
	
  

 	
  

 
	
  

 	
  “Charterparty Assignment”
 means, in relation to a Ship, the assignment of the Existing Charterparty and
 any other Approved Charterparty relative thereto, executed or (as the context
 may require) to be executed by the Owner thereof in favour of the Security
 Agent, in form satisfactory to the Agent (acting on the instructions of the Lenders)
 and respective notices of any such assignment addressed to the relevant
 charterer (to be served upon the occurrence of an Event of Default) and, in
 such case, endorsed with an acknowledgement of receipt by the relevant
 charterer and/or, at the discretion of the Agent, copy of irrevocable
 instructions of the relevant Owner to such charterer (to be given upon the
 occurrence of an Event of Default) for the payment of the hire to the
 Operating Account of such Ship and/or a copy of the relevant charter with
 appropriate irrevocable notation (together, the “Charterparty Assignments”); 

 
	
  

 	
  

 
	
  

 	
  “Classification”
 in relation to each Ship means the classification assigned to such Ship which
 is referred to in the Mortgage registered or to be registered over such Ship
 with the Classification Society or such other classification as the Agent
 (acting on the instructions of the Majority Lenders) shall, at the request of
 the relevant Owner, have agreed in writing and shall be treated as the
 Classification in relation to such Ship for the purposes of the relevant Ship
 Security Documents; 

 
	
  

 	
  

 
	
  

 	
  “Classification Society”
 in relation to each Ship means Germanischer Lloyd, American Bureau of
 Shipping, NKK, Lloyds Register of Shipping or such other classification
 society which is a member of the International Association of Classifications
 Societies (except the Russian Maritime Register of Shipping, Russia, and
 China Classification Society, P.R. of China) and which the Agent (acting on
 the instructions of the Majority Lenders) shall, at the request of the Owner
 of such Ship, have agreed in writing shall be treated as the Classification
 Society for the purposes of the relevant Security Documents; 

 
	
  

 	
  

 
	
  

 	
  “Commercial Manager”
 means Costamare or such other person as may from time to time be approved by
 the Lenders for the purpose of acting as commercial manager of the Ships, and
 includes its successors in title; 

 
	
  

 	
  

 
	
  

 	
  “Commitment”
 means, in relation to each Lender and in respect of each of the Term Loan
 Facility and the Revolving Facility, the amount set out opposite its name in
 relation to the relevant Facility in the column headed “Commitment” in schedule 1 and/or, in the
 case of a Transferee Lender, 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”, in
 relation to any continuing Transaction, has the meaning given in each Master
 Agreement; 

 

3

	
  

 	
  

 
	
  

 	
  “Contribution”
 means, in relation to each Lender, the principal amount of the aggregate of
 the parts of the Term Advances and the Revolving Advances or, as the case may
 be, the Loan owing to such Lender at any relevant time; 

 
	
  

 	
  

 
	
  

 	
  “Corporate Guarantee”
 means an irrevocable and unconditional guarantee given or, as the context may
 require, to be given by a Corporate Guarantor in favour of the Security Agent
 or the Lenders in form and substance satisfactory to the Agent (acting on the
 instructions of the Lenders) (together, the “Corporate
 Guarantees”); 

 
	
  

 	
  

 
	
  

 	
  “Corporate Guarantor”
 means each of Costamare (subject to the provisions of clause 17.4) and the
 Owners (together, the “Corporate
 Guarantors”); 

 
	
  

 	
  

 
	
  

 	
  “Corporate Structure Completion Date”
 means a date not later than 31st December, 2008 until which the
 totality of the authorized, issued and outstanding shares of the owning
 companies of all the vessels listed in schedule 9 (save any of such vessels
 which, in the meantime, is sold or has become a Total Loss) and all the Ships
 which are not listed in such schedule but which may, in the meantime, be
 acquired by any of the Corporate Guarantors, shall be transferred to the
 Borrower and all such companies and such Corporate Guarantors shall become
 wholly owned Subsidiaries of the Borrower (except Costamare); 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Creditors” means,
 together, the Arrangers, the Agent, the Security Agent, the Swap Banks, the
 Account Bank and the Lenders and “Creditor”
 means any of them as the context may require; 

 
	
  

 	
  

 
	
  

 	
  “Debt Service”
 means, on any relevant day, an amount (as conclusively certified by the
 Agent, save for manifest error) which is equal to the aggregate payments of
 principal and interest which the Borrower will be obliged to pay to the
 Lenders pursuant to this Agreement and the other Security Documents in the
 twelve (12) month period commencing on such day; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Dollars” and “US$” 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, in relation to each Advance, any date, being a Banking Day falling
 into the Availability Period for such Advance, on which the relevant Advance
 is, or is to be, made available; 

 
	
  

 	
  

 
	
  

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

 

4

	
  

 	
  

 
	
  

 	
  “DSB” means DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT,
 Bremen and Hamburg, a banking company duly incorporated under the laws of the
 Federal Republic of Germany acting through its office at Domshof 17, 28195
 Bremen, Federal Republic of 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); 

 
	
  

 	
  

 
	
  

 	
  “Earnings” in
 relation to a Ship, means all earnings of such Ship, both present or future,
 including all freight, hire and passage moneys, compensation payable to the
 Owner thereof in the event of requisition of such Ship for hire, remuneration
 for salvage and towage services, demurrage and detention moneys,
 contributions of any nature whatsoever in respect of general average, damages
 for breach (or payments for variation or termination) of any charterparty or
 other contract for employment of such Ship and any other earnings whatsoever
 due or to become due to the Owner thereof in respect of such Ship and all
 sums recoverable under any Insurances in respect of loss of Earnings and
 includes, if and whenever such Ship is employed on terms whereby any and all
 such moneys as aforesaid are pooled or shared with any other person, that
 proportion of the net receipts of the relevant pooling or sharing agreement
 which is attributable to such 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 of the Borrower and the Owners or any
 other Relevant Party or any person having a contractual relationship with any
 of the Borrower and the Owners or any other Relevant Party in connection with
 any Relevant Ship or her operation or the carriage of cargo thereon; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Environmental Claim”
 means (i) any claim, relating to an amount over US$5,000,000, by, or
 directive from, any applicable governmental, judicial or other regulatory
 authority alleging breach of, or non- compliance with, any Environmental Laws
 or Environmental Approvals or otherwise howsoever relating to or arising out
 of an Environmental Incident or (ii) any claim, relating to an amount over
 US$5,000,000, by any other third party howsoever relating to or arising out
 of an Environmental Incident (and, in each such case, “claim” shall mean a
 claim for damages, clean-up costs, compliance, remedial action or otherwise);
 

 
	
  

 	
  

 
	
  

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

 

5

	
  

 	
  

 	
  

 
	
  

 	
  “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 United States Oil Pollution Act of 1990 and any
 comparable laws of the individual States of the United States of America)
 which are from time to time and at any relevant time applicable to any
 Relevant Ship); 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Existing Charterparty”
 means, in relation to a Ship, the current time charter in respect of the
 employment of such Ship entered into by the Owner thereof, as owner (and
 shall include any addenda thereto); 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

 	
 the expenses referred to in clause 5.2; and 

 
	
  

 	
  

 	
  

 
	
  

 	
   (c)

 	
 interest on all such losses, liabilities, costs, charges, expenses,
 damages and outgoings from, in the case of Expenses referred to in
 sub-paragraph (b) above, the date on which such Expenses were demanded by the
 Creditors (or any of them) from the Borrower and in all other cases, the date
 on which the same were suffered, incurred or paid by the Creditors (or any of
 them) until the date of receipt or recovery thereof (whether before or after
 judgement) at the Default Rate (as conclusively certified by the Agent, save
 in case of manifest error); 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Facilities”
 means, together, the Term Loan Facility and the Revolving Facility and “Facility” means either of them as the
 context may require; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Final Availability Date”
 means in relation to: 

 
	
  

 	
  

 	
  

 
	
  

 	
   (a)

 	
 the Term Loan Facility, the 30th September, 2008; and 

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

 	
 the Revolving Facility, the Amalgamation Date; 

 
	
  

 	
  

 	
  

 
	
  

 	
 or, in each case, such later date as the Agent (acting on the
 instructions of the Lenders in their sole discretion) may agree in writing; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Final Maturity Date”
 in relation to the Loan means the date falling on the tenth (10th)
 anniversary of the Drawdown Date of the first Term Advance; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Flag State” means
 in relation to a Ship, the Republic of Greece or Hong Kong or the Republic of
 Liberia or the Republic of Malta or such state or territory proposed in
 writing by the relevant 

 

6

	
  

 	
  

 
	
  

 	
 Owner to the Agent and approved (at their reasonable discretion) by
 the Majority Lenders, as being the “Flag
 State” of the relevant Ship for the purposes of the Security
 Documents; 

 
	
  

 	
  

 
	
  

 	
  “General Assignment”
 means in relation to each Ship the deed of general assignment of the
 Earnings, Insurances and Requisition Compensation (each such term as defined
 in the relevant Ship Security Document) thereof executed or (as the context
 may require) to be executed by the Owner thereof in favour of the Security
 Agent in form and substance satisfactory to the Agent (acting on the
 instructions of the Lenders) (together, the “General
 Assignments”); 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Guarantees”
 means, together, the Corporate Guarantees and the Personal Guarantees, and “Guarantee” means any of them as the
 context may require; 

 
	
  

 	
  

 
	
  

 	
  “Guarantors”
 means, together, the Owners and (subject to the provisions of clause 17.4)
 the Personal Guarantors and Costamare and “Guarantor”
 means any of them as the context may require; 

 
	
  

 	
  

 
	
  

 	
  “HVB” means Bayerische HYPO-UND VEREINSBANK AKTIENGESELLSCHAFT,
 a banking company duly incorporated under the laws of Germany, having its
 registered office at Am Tucherpark 16, D-80538, München, Germany, acting for
 the purpose of this Agreement through its office at 62 Notara Street, 185 35,
 Piraeus, Greece (or of such other address as may last have been notified to the
 other parties to this Agreement pursuant to clause 17.1.3); 

 
	
  

 	
  

 
	
  

 	
  “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; 

 
	
  

 	
  

 
	
  

 	
  “Insurances” in relation
 to a Ship means all policies and contracts of insurance (including, without
 limitation, all entries of the Ship in a protection and indemnity, war risks
 (including war P&I liabilities) or other mutual insurance association)
 which are from time to time in place or taken out or entered into by or for
 the benefit of its Owner in respect of such Ship or otherwise howsoever in
 connection with such Ship and all benefits of such policies and/or contracts
 (including all claims of whatsoever nature and return of premiums); 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Interest Payment Date”
 means in respect of the Loan or any part thereof in respect of which a
 separate Interest Period is fixed the last day of the relevant Interest
 Period and in case of any Interest Period longer than three (3) months the
 date(s) falling at successive three (3) months intervals during such longer
 Interest Period and the last day of such longer Interest Period; 

 
	
  

 	
  

 
	
  

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

 

7

	
  

 	
  

 	
  

 
	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “ISM Code Documentation”
 includes: 

 
	
  

 	
  

 	
  

 
	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (c)

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Lenders” means
 the Lenders and financial institutions listed in schedule 1 and includes
 their respective successors in title and Transferee Lenders and “Lender” means any of them as the context
 may require; 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (a)

 	
 the offered rate (if any) per annum for deposits in Dollars for such
 amount and for such period which is the rate, for such period, appearing on
 the relevant page of the Reuter screen at or about 11 a.m. London time on the
 Quotation Date (or, if the Lenders shall have made a determination pursuant
 to clause 3.6 such later time (not being later than 1 p.m. (London time) on
 the first day of such period) as the Agent may determine) or such other page
 as may replace the relevant Page of the Reuter screen on that service for the
 purpose of displaying rates comparable to that rate or on such other service
 as 

 

8

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 may be nominated by the British Bankers’ Association as the
 information vendor for the purpose of displaying the British Bankers’
 Association Interest Settlement Rates for Dollars; and

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Loan” means the
 aggregate principal amount borrowed by the Borrower pursuant to this
 Agreement or (as the context may require) the principal amount thereof owing
 to the Lenders under this Agreement at any relevant time; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Majority Lenders”
 means, at any relevant time, (a) with respect to decisions regarding change
 of the repayment schedule of the Loan, increase any Lender’s Commitment, any
 change of the financial covenants set forth in clause 8.6, change the
 currency in which any amount is payable by any Security Party under any of
 the Security Documents, change any provision of any of the Security Documents
 which expressly or impliedly requires the approval or consent of all of the
 Lenders such that the relevant approval or consent may be given otherwise
 than with the sanction of all of the Lenders, change the order of
 distribution under clause 13.2 (application of moneys), change clause 16.11
 or any definition referred to in clause 16.11, change of pricing, change of
 the Final Maturity Date, amend this definition and/or release of the
 securities constituted or to be constituted by the Security Documents,
 Lender(s) the aggregate of whose Commitments is equal to 100% of the Total
 Commitment at such time or, after a Term Advance and or a Revolving Advance
 has been drawn down, Lender(s) the aggregate of whose Contributions at such
 relevant time is equal to 100% of the Loan and (b) with respect to decisions
 on any other matter, Lender(s), the aggregate of whose Commitments at any
 relevant time equals sixty seven percent (67%) of the Total Commitment or,
 after a Term Advance or a Revolving Advance has been drawn down, Lender(s),
 the aggregate of whose Contributions at any relevant time is equal to sixty
 seven percent (67%) of the Loan; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Management Agreement”
 means, in relation to each Ship, the agreement made or (as the context may
 require) to be made between the Owner thereof and the relevant Manager
 providing for the appointment of such Manager as Commercial Manager or, as
 the case may be, Technical Manager of such Ship subject to and upon the terms
 and conditions therein contained (together, the “Management Agreements”); 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Manager’s Undertaking”
 means in respect of each Ship an undertaking and letter of subordination
 executed or (as the context may require) to be executed by the relevant
 Manager in favour of the Security Agent or the Lenders in form and substance
 satisfactory to the Agent (acting on the instructions of the Lenders)
 (together, the “Manager’s Undertakings”);
 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Managers” means,
 together, the Commercial Manager and the Technical Managers; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Mandatory Cost Rate”
 means in relation to the Loan the rate determined by the Agent to be equal to
 the highest of the respective rates notified by each Lender to the Agent as
 the cost to that Lender (expressed as a percentage rate per annum) as
 determined by it to be attributable to the relevant one of the Loan resulting
 from the imposition under, or pursuant to, the Bank of 

 

9

	
  

 	
  

 
	
  

 	
 England Act 1998 and/or by the Bank of England and/or the Financial
 Services Authority and/or the European Central Bank and/or any other relevant
 regulatory authority of a requirement to pay fees calculated by reference to
 liabilities used to fund the Loan; 

 
	
  

 	
  

 
	
  

 	
  “Market Value” has
 the meaning giving to it in clause 8.6.2(f); 

 
	
  

 	
  

 
	
  

 	
  “Margin” means zero point eight five per cent (0.85%) per annum; 

 
	
  

 	
  

 
	
  

 	
  “Master Agreement”
 means, in relation to each Swap Bank, the master agreement (on the 1992 ISDA
 (Multicurrency - Crossborder) form as modified) or, in the case of DSB, any
 “Deutscher Rahmenvertrag (Rahmenvertrag Für Finanztermingeschäfte)” (or any
 other form of master agreement relating to interest or currency exchange
 transactions), made or to be made between that Swap Bank and the Borrower,
 and includes all transactions from time to time entered into and
 Confirmations from time to time exchanged under the master agreement and any
 amending, supplementing or replacement agreements made from time to time
 (together, the “Master Agreements”);
 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Master Agreement Security Deed”
 means, in relation to each Swap Bank, the security deed executed or (as the
 context may require) to be executed by the Borrower in favour of the Security
 Agent in relation to certain of the rights of the Borrower under such Master
 Agreement in form and substance satisfactory to the Agent (acting on the
 instructions of the Lenders) (together, the “Master
 Agreement Security Deeds”); 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “MOA” means, in relation
 to a Tranche B Ship, a memorandum of agreement made or to be made between the
 Seller of that Tranche B Ship and the Owner thereof which is the buyer
 thereof (together, the “MOAs”); 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Mortgage” in
 relation to each Ship means the first priority or preferred mortgage of such
 Ship and (if applicable) the Deed of Covenants supplemental thereto executed
 or (as the context may require) to be executed by the Owner of such Ship in
 favour of the Security Agent or the Lenders in form and substance
 satisfactory to the Agent (acting on the instructions of the Lenders)
 (together, the “Mortgages”); 

 

10

	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Operating Account”
 means an interest bearing Dollar account of the relevant Owner opened with
 the Account Bank and includes any sub-accounts thereof and any other account
 designated in writing by the Agent (acting on the instructions of the
 Lenders) to be an Operating Account for the purposes of this Agreement
 (together, the “Operating Accounts”);
 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Outstanding Indebtedness”
 means the aggregate of (a) the Term Advances and interest accrued and
 accruing thereon (b) the Revolving Advances and interest accrued and accruing
 thereon, (c) the Expenses, (d) the Master Agreement Liabilities and (e) all
 other sums of money from time to time owing by the Borrower to the Creditors
 including, without limitation, default interest, damages, indemnities, costs,
 expenses, whether actually or contingently under this Agreement, the Master
 Agreement and the other Security Documents; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Owner” means in
 relation to a Ship the registered owner thereof (together, the “Owners”); 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

 	
 any lien for salvage and any ship repairer’s or outfitter’s
 possessory lien for a sum not (except with the prior written consent of the
 Agent) exceeding the Casualty Amount (as defined in the Security Documents); 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Personal Guarantee”
 means the irrevocable and unconditional guarantee given or, as the context
 may require, to be given by each Personal Guarantor in form and substance
 satisfactory to the Agent (acting on the instructions of the Lenders) as
 security for the Outstanding Indebtedness and any and all other obligations
 of the Borrower under this Agreement and the Master Agreements (together, the
 “Personal Guarantees”); 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Personal Guarantors”
 means the persons nominated by the Borrower and acceptable to the Agent
 (acting on the instructions of the Lenders) each of whom shall or, as the
 context may 

 

11

	
  

 	
  

 
	
  

 	
 require, may give a Personal Guarantee and in the singular means
 either of them as the context may require (together, the “Personal Guarantors”); 

 
	
  

 	
  

 
	
  

 	
  “Quotation Date”
 means, in respect of any period in respect of which LIBOR falls to be
 determined under this Agreement, the second Banking Day before the first day
 of such period; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “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 is incorporated,
 resident, domiciled, has a permanent establishment, carries on, or has a
 place of business or is otherwise effectively connected; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “Repayment Dates”
 means, subject to clause 6.3, each of the dates falling at three (3) monthly
 intervals after the Drawdown Date of the first Term Advance up to and
 including the Final Maturity Date; 

 
	
  

 	
  

 
	
  

 	
  “Repayment Instalment”
 means each instalment of the Loan which becomes due for repayment by the
 Borrower to the Lenders on a Repayment Date pursuant to clause 4.1.1; 

 
	
  

 	
  

 
	
  

 	
  “Revolving Advance”
 means the principal amount of each borrowing by the Borrower under the
 Revolving Facility described in clause 2.2 or (as the context may require)
 the amount of such borrowing for the time being outstanding and “Revolving Advances” means the aggregate
 amount of all Revolving Advances outstanding at any relevant time; 

 
	
  

 	
  

 
	
  

 	
  “Revolving Facility”
 means the amount of up to US$300,000,000 (Three hundred million Dollars),
 which the Lenders agreed to make available to the Borrower by way of a
 revolving credit facility under the terms and conditions of this Agreement,
 as the same may be reduced pursuant to any relevant term of this Agreement; 

 
	
  

 	
  

 
	
  

 	
  “Revolving Facility Period”
 means the period commencing on the date hereof and terminating on the
 Amalgamation Date upon which the Term Advances and the Revolving Advances
 shall be amalgamated and shall comprise the Loan; 

 
	
  

 	
  

 
	
  

 	
  “Security Agent”
 means DSB; 

 

12

	
  

 	
  

 	
  

 
	
  

 	
  “Security Documents” means: 

 
	
  

 	
  

 	
  

 
	
  

 	
   (a)

 	
 this Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

 	
 the Master Agreements; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (c)

 	
 the Master Agreement Security Deeds; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (d)

 	
 the Mortgages; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (e)

 	
 the General Assignments; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (f)

 	
 the Corporate Guarantees; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (g)

 	
 the Personal Guarantees; 

 
	
  

 	
  

 	
  

 
	
  

 	
   (h)

 	
 the Accounts Pledge Agreements; and 

 
	
  

 	
  

 	
  

 
	
  

 	
   (i)

 	
 any Charterparty Assignments;

 
	
  

 	
  

 	
  

 
	
  

 	
 and any other agreement or document that may has 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 Outstanding Indebtedness and/or any and all
 other obligations of the Borrower pursuant to this Agreement and the Master
 Agreements and any other moneys from time to time owing by the Borrower under
 or in connection with this Agreement and/or the Master Agreements and/or any
 of the other documents referred to in this definition, as each such document
 may from time to time be amended and/or supplemented, and “Security Document” means any of them as
 the context may require; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Security Party”
 means the Borrower, each Corporate Guarantor (subject to clause 17.4), each
 Personal Guarantor and any other person who may at any time be a party to any
 of the Security Documents (other than the Creditors and the Managers)
 (together, the “Security Parties”);
 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “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
 Borrower) which is at any relevant time one hundred and twenty five percent
 (125%) of the aggregate of (i) the Term Loan and (ii) the Revolving Advances
 and (iii) the Swap Exposure; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “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
 Borrower and the Lenders) which is, at any relevant time, the aggregate of
 (a) the aggregate Market Value of the Mortgaged Ships as most recently
 determined in accordance with clause 8.2.3 or, as the case may be, 8.2.4 and
 (b) the market value of any additional security for the time being actually
 provided to the Creditors or any of them pursuant to clause 8.2 (if any); 

 

13

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Seller” means, in
 relation to a Ship, the company named as seller of such Ship in the relevant
 MOA; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Ships” means
 together the Tranche A Ships, the Tranche B Ships and the Additional Ships
 and “Ship” means any of them as
 the context may require and for the purposes of this Agreement: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
   (a)

 	
  “Tranche A Ships”
 means, together, the ten (10) Ships listed in schedule 7, and when referred
 to by name means that Ship, and in the singular means any of them, as the
 context may require; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
   (b)

 	
  “Tranche B Ship”
 means: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (i)

 	
 any of the vessels referred to in schedule 9 nominated by the
 Borrower or any vessel acquired by a Corporate Guarantor pursuant to the
 relevant MOA and which vessel is, in either case, with a maximum age of 15
 years at the time of the relevant drawdown and of at least 950 TEU and, if of
 10,000 TEU or more such vessel to be subject to a ten (10) years Approved
 Charterparty, and which vessel shall be financed by a Revolving Advance under
 Tranche B (such Revolving Advances in the aggregate to be in an amount not
 less than US$165,000,000 (One hundred sixty five million Dollars)), such
 Revolving Advance shall be used for the purpose stipulated in clause 1.1(b);
 and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (ii)

 	
 any of the vessels referred to in schedule 9 nominated by the
 Borrower or subject to acceptance by the Lenders, any vessel acquired by a
 Corporate Guarantor pursuant to the relevant MOA and which vessel is, in
 either case, of at least 950 TEU and, if of 10,000 TEU or more such vessel to
 be subject to a ten (10) years Approved Charterparty, and which vessel shall
 be financed by a Revolving Advance under Tranche B and such Revolving Advance
 shall be used for the purpose stipulated in clause 1.1(b), 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
    and “Tranche B
 Ships” means any or all of them as the context may require; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
   (c)

 	
  “Additional Ship”
 means any vessel which is owned, or is to be, purchased by a Subsidiary of
 the Borrower and which may be offered by the Borrower as additional security
 as provided in clause 8.2.9; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Subsidiary” of a
 person means any company or entity directly or indirectly controlled by such
 person, and for this purpose “control”
 means either the ownership of more than 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 Bank” means
 a bank or financial institution listed in schedule 6 and acting through its
 branch indicated in such schedule or its transferee, successor or assign; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 

14

	
  

 	
  

 	
  

 
	
  

 	
  “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 Manager”
 means Costamare or (through a sub-contract made or to be made with Costamare
 and after prompt notice of the Borrower to the Agent) SHANGHAI COSTAMARE SHIPMANAGEMENT CO. LTD.,
 a company incorporated and existing under the laws of P.R. of China or CIEL SHIPMANAGEMENT S.A., a company incorporated and existing
 under the laws of Liberia or such other person as may from time to time be
 approved by the Lenders for the purpose of acting as technical manager of any
 of the Ships, and includes their respective successors in title (together,
 the “Technical Managers”); 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Term Advance” means
 the principal amount of each borrowing by the Borrower under the Term
 Facility described in clause 2.2 or (as the context may require) the amount
 of such borrowing for the time being outstanding and “Term Advances” means the aggregate
 amount of all Term Advances outstanding at any relevant time; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Term Loan Facility”
 means the total amount which the Lenders agreed to lend to the Borrower under
 clause 2.1 as reduced by any relevant term of this Agreement; 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
   (a)

 	
 the actual, constructive, compromised or arranged total loss of a
 Ship; or 

 
	
  

 	
  

 	
  

 
	
  

 	
   (b)

 	
 the Compulsory Acquisition of a Ship; or 

 
	
  

 	
  

 	
  

 
	
  

 	
   (c)

 	
 the hijacking, theft, condemnation, capture, seizure, arrest,
 detention or confiscation of a Ship (other than where the same amounts to the
 Compulsory Acquisition of a 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 Owner thereof from such hijacking,
 theft, condemnation, capture, seizure, arrest, detention or confiscation
 within ninety (90) days after the occurrence thereof; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Transaction” has
 the meaning given in each Master Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Transfer Certificate”
 means a certificate in substantially the form set out in schedule 4; 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  “Transferor Lender” 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
 5; and 

 
	
  

 	
  

 	
  

 
	
  

 	
  “Trust Property”
 means (i) the security, powers, rights, titles, benefits and interests (both
 present and future) constituted by and conferred on the Security Agent or any
 receiver 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 

 

15

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 or any other person and (iii) all moneys,
 investments, property and other assets at any time representing or deriving
 from any of the foregoing, including all interest, income and other sums at
 any time received or receivable by the Security Agent or any agent of the
 Security Agent or any receiver in respect of the same (or any part thereof);
 and 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.3

 	
  

 	
 Headings 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.4

 	
  

 	
 Construction of certain terms 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In this Agreement, unless the context otherwise requires: 

 
	
  

 	
  

 	
  

 
	
 1.4.1

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.4.2

 	
  

 	
 references to (or to any specified provision of) this Agreement or
 any other document shall be construed as references to this Agreement, that
 provision or that document as in force for the time being and as amended in
 accordance with 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 and, if not
 having the force of law, to which the relevant person habitually complies) of
 any agency, authority, central bank or government department or any
 self-regulatory or other national or supra-national authority; 

 
	
  

 	
  

 	
  

 
	
 1.4.4

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.4.5

 	
  

 	
 references to a time of day are to Greek time; 

 
	
  

 	
  

 	
  

 
	
 1.4.6

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.4.7

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.4.8

 	
  

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

 

16

	
  

 	
  

 	
  

 
	
 1.4.9

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.5

 	
  

 	
 Majority Lenders 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 1.6

 	
  

 	
 Lenders’ Commitment 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the purposes of the definition of “Majority Lenders” in clause
1.2, references to the Commitment of a Lender in respect of either Facility
shall, if the part of the Total Commitment relating to the relevant Facility
has, at any relevant time, been reduced to zero, be deemed to be a reference
to the Commitment of that Lender in respect of such Facility immediately
prior to such reduction to zero.  

 
	
  

 	
  

 	
  

 
	
 2

 	
  

 	
 THE TOTAL COMMITMENT AND THE ADVANCES 

 
	
  

 	
  

 	
  

 
	
 2.1

 	
  

 	
 The Term Loan Facility 

 
	
  

 	
  

 	
  

 
	
 2.1.1

 	
  

 	
 Agreement to lend: The Lenders, relying upon
 each of the representations and warranties in clause 7, agree to lend to the
 Borrower upon and subject to the terms of this Agreement, the principal sum
 of up to Seven hundred million Dollars (US$700,000,000). The obligation of
 each Lender under this Agreement shall be to contribute that proportion of
 each Advance in respect of the Term Loan Facility which, as at the Drawdown
 Date of such Advance, its Commitment in respect of the Term Loan Facility
 bears to the Total Commitment in respect of the Term Loan Facility. 

 
	
  

 	
  

 	
  

 
	
 2.1.2

 	
  

 	
 Number and Purpose of Term Advances Agreed:
 The Term Loan Facility shall be advanced to the Borrower in up to five (5)
 Term Advances and shall be used for the purposes set forth in clause 1.1. 

 
	
  

 	
  

 	
  

 
	
 2.1.3

 	
  

 	
 Limitation of Term Advances: each Term
 Advance shall not exceed seventy per cent (70%) of the Market Value of the
 Ship to be financed by such Term Advance, as determined in accordance with
 the valuation of such Ship obtained pursuant to clause 8.2.3. 

 
	
  

 	
  

 	
  

 
	
 2.1.4

 	
  

 	
 Termination of the Term Loan Facility: Any
 part of the Term Loan Facility undrawn and uncancelled at the end of the
 relevant Availability Period shall thereupon be automatically cancelled. 

 

17

	
  

 	
  

 	
  

 	
  

 
	
 2.1.5

 	
  

 	
 Cancellation of the Term Loan Facility: The
 Borrower shall be entitled to cancel any undrawn part of the Term Loan
 Facility under this Agreement upon giving the Agent not less than five (5)
 Banking Days’ notice in writing to that effect, provided, that no
 Drawdown Notice has been given to the Agent under clause 2.3 for the full
 amount of the Term Facility or in respect of the portion thereof in respect
 of which cancellation is required by the Borrower. Any such notice of
 cancellation, once given, shall be irrevocable. Any amount cancelled may not
 be drawn. Notwithstanding any such cancellation pursuant to this clause 2.1.5
 the Borrower shall continue to be liable for any and all amounts due to the
 Creditors under this Agreement including without limitation any amounts due
 to the Creditors under clause 11. 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.2

 	
  

 	
 The Revolving Facility 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 Agreement to lend: Subject to the provisions
 of this Agreement, the Lenders agree to make available to the Borrower a
 revolving credit facility not exceeding the principal amount of Three hundred
 million Dollars (US$300,000,000) of which a part in the minimum aggregate
 amount of US$165,000,000 shall be used in respect of the Tranche B Ships
 referred to in paragraph (i) of the definition “Tranche B Ship” and the
 remaining part of the Revolving Facility shall be used in respect of the
 Tranche B Ships referred to in paragraph (ii) of the definition “Tranche B
 Ship”. The obligation of each Lender under this Agreement shall be to
 contribute that proportion of each Revolving Advance which, as at the
 Drawdown Date of such Revolving Advance, its Commitment in respect of the
 Revolving Facility bears to the Total Commitment in respect of the Revolving
 Facility. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 Limitation of Revolving Advances: each Revolving
 Advance shall not exceed seventy per cent (70%) of the lesser of (i) the
 Market Value of the Ship to be financed by such Revolving Advance, as
 determined in accordance with the valuation of such Ship obtained pursuant to
 clause 8.2.3 or, as the case may be, 8.2.4 and (ii) the Acquisition Cost of
 such Ship. 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.3

 	
  

 	
 Drawdown 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Subject to the terms and conditions of this Agreement, each Advance
 shall be made to the Borrower following receipt by the Agent from the
 Borrower of a Drawdown Notice not later than 10:00 a.m. on the third (3rd)
 Banking Day before the date, which shall be a Banking Day falling within the
 Availability Period for such Advance, on which the Borrower proposes such
 Advance is to be 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.4

 	
  

 	
 Disbursement 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.4.1

 	
  

 	
 Disbursement of a Term Advance: Upon receipt
 of a Drawdown Notice in respect of a Term Advance complying with the terms of
 this Agreement the Agent shall promptly notify each Lender and each Lender
 shall, subject to the provisions of clause 9, on the date specified in such
 Drawdown Notice, make available to the Agent its portion of the relevant Term
 Advance for payment by the Agent in accordance with clause 6.2 of the
 relevant Term Advance to the Borrower. 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.4.2

 	
  

 	
 Disbursement of a Revolving Advance: Upon
 receipt of a Drawdown Notice in respect of a Revolving Advance complying with
 the terms of this Agreement the Agent shall promptly notify each Lender and
 each Lender shall, subject to the provisions of clause 9, on the date
 specified in such Drawdown Notice, make available to the Agent its portion of
 the relevant 

 

18

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Revolving Advance for payment by the Agent in accordance with clause
 6.2 of the relevant Revolving Advance to the Borrower,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided
 however that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 the
 aggregate amount of the Revolving Advances shall not exceed US$300,000,000;
 and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 no Revolving
 Advance shall be drawn down prior to the drawdown of the first Term Advance.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.5

 	
  

 	
 Application of Proceeds 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower undertakes with the Creditors to use each Term Advance
 and each Revolving Advance only for the purposes stated in clause 1.1
 provided that, without prejudice to the Borrower’s obligations under clause
 8.1.3, no Creditor shall have any responsibility for the application of the
 proceeds thereof by the Borrower, and no Creditor shall be under any
 obligation to monitor the Borrower’s compliance with this undertaking and no
 breach of this undertaking shall affect the Borrower’s other obligations
 hereunder.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.6

 	
  

 	
 Termination of Total Commitment 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 2.7

 	
  

 	
 Interests of Lenders and Swap Banks 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 Lenders) the rights of the Lenders and of the Swap Banks
 under this Agreement and under the Master Agreements are several and the
 amount due to any Creditor is a separate and independent debt.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.8

 	
  

 	
 Individual Lender’s and Swap Bank’s right of action 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.8.1

 	
  

 	
 Each Lender shall be entitled to sue for any amount which has become
 due and payable by the Borrower to it under this Agreement;

 
	
  

 	
  

 	
  

 	
  

 
	
 2.8.2

 	
  

 	
 Each Swap Bank shall be entitled to sue for any amount which has
 become due and payable by the Borrower to it under the Master Agreement to
 which such Swap Bank is a party, 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 without joining the Agent, the Security Agent or any other Lender or
 any other Swap Bank as additional parties in any proceedings for this
 purpose.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.9

 	
  

 	
 Proceedings by individual Lender or Swap Bank requiring Majority
 Lender consent 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Except as provided in clause 2.8, no Lender or Swap Bank may commence
 proceedings against the Borrower or any other Security Party in connection
 with a Security Document or a Master Agreement without the prior written
 consent of the Majority Lenders.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.10

 	
  

 	
 Obligations of Lenders and Swap Banks several 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The obligations of the Lenders under this Agreement and of each Swap
 Bank under the Master Agreement to which it is a party are several and a
 failure of a Lender to perform its obligations

 

19

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 under this
 Agreement or a failure of a Swap Bank to perform its obligations under the
 Master Agreement to which it is a party shall not result in:

 
	
  

 	
  

 	
  

 	
  

 
	
 2.10.1

 	
  

 	
 The
 obligations of the other Lenders or the other Swap Banks being increased; nor
 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.10.2

 	
  

 	
 the Borrower, any other Security Party or any other Lender or any
 Swap Bank being discharged (in whole or in part) from its obligations under
 any Security Document or under any Master Agreement 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 and in no circumstances shall a Lender or a Swap Bank have any
 responsibility for a failure of another Lender or another Swap Bank to
 perform its obligations under this Agreement or any Master Agreement.

 
	
  

 	
  

 	
  

 	
  

 
	
 3

 	
  

 	
 INTEREST AND INTEREST PERIODS 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.1

 	
  

 	
 Normal interest rate 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Subject to the provisions of this Agreement, the Borrower shall pay
 interest on the Loan (or as the case may be, each portion thereof to which a
 different Interest Period relates), in respect of each Interest Period
 relating thereto on each Interest Payment Date at the rate per annum
 determined by the Agent to be the aggregate of (i) Margin, (ii) LIBOR for
 that Interest Period and (iii) the Mandatory Cost Rate (if any). In addition
 in the event that the Borrower selects (under clause 3.2) an Interest Period
 for the Loan longer than three (3) months but not longer than twelve (12)
 months, the Borrower shall, after 3 months from the commencement of such
 Interest Period, place into a time deposit maintained with the Account Bank
 in an account in the name of the Borrower and pledged, throughout the
 remainder of such Interest Period, in favour of the Lenders and the Swap
 Banks an amount equal to the pro-rata interest on the Loan for the first
 three (3) months of such Interest Period. Such amount placed into the said
 time deposit as well as accrued interest thereon up to the end of the
 relevant Interest Period shall be applied by the Agent in payment of interest
 on the Loan on the relevant Interest Payment Date and the Borrower hereby
 irrevocably and unconditionally authorises the Agent and the Account Bank to
 effect such transfer and application provided, however, that notwithstanding
 the above proviso, interest on the Loan shall accrue and shall be payable by
 the Borrower at the rate provided in this clause 3.1 on each Interest Payment
 Date falling during and on the last Interest Payment Date of, such longer
 Interest Period and such interest shall be applied by the Agent in payment of
 interest on the Loan on each such Interest Payment Date.

 
	
  

 	
  

 	
  

 	
  

 
	
 3.2

 	
  

 	
 Selection of Interest Periods 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Subject to clause 3.3, the Borrower may by notice received by the
 Agent not later than 10:00 a.m. on the third Banking Day before the beginning
 of each Interest Period specify whether such Interest Period shall have a
 duration of three (3) months or six (6) months or nine (9) months or twelve
 (12) months or such other period as the Borrower may select and the Agent
 (acting on the instructions of the Majority Lenders) may approve.

 
	
  

 	
  

 	
  

 	
  

 
	
 3.3

 	
  

 	
 Determination of Interest Periods 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 

20

	
  

 	
  

 	
  

 
	
 3.3.1

 	
  

 	
 the initial Interest Period in respect of each Term Advance shall
 commence on the date such Term Advance is made and each subsequent Interest
 Period for the Loan shall commence on the last day of the previous Interest
 Period for the Loan;

 
	
  

 	
  

 	
  

 
	
 3.3.2

 	
  

 	
 the initial Interest Period in respect of each Term Advance drawn
 down after the first Term Advance shall end on the same day as the then
 current Interest Period for the Loan and all Term Advances outstanding on
 such day shall be consolidated into, and shall thereafter constitute, the
 Loan;

 
	
  

 	
  

 	
  

 
	
 3.3.3

 	
  

 	
 if any Interest Period for the Loan 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 or
 instalments 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;

 
	
  

 	
  

 	
  

 
	
 3.3.4

 	
  

 	
 the initial Interest Period in respect of each Revolving Advance
 shall commence on the date such Revolving Advance is made and shall end on
 the same day as the then current Interest Period for the other Revolving
 Advances and on such day all Revolving Advances shall be consolidated into,
 and shall thereafter constitute, a single Revolving Advance and each
 subsequent Interest Period for the Revolving Advance shall commence on the
 last day of the previous Interest Period for the Revolving Advance; and 

 
	
  

 	
  

 	
  

 
	
 3.3.5

 	
  

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

 
	
  

 	
  

 	
  

 
	
 3.4

 	
  

 	
 Default interest 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If the Borrower fails to pay any sum (including, without limitation,
 any sum payable pursuant to this clause 3.4) on its due date for payment
 under any of the Security Documents, the Borrower shall pay interest on such
 sum 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 Rate, if any. 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 10.2.1(b) or a prepayment
 pursuant to clauses 4.3, 8.2.1(a) or 12.1, on a date other than an Interest
 Payment Date relating thereto, the first such period selected by the Agent
 shall be of a duration equal to the period between the due date of such
 principal sum and such Interest Payment Date and interest shall be payable on
 such principal sum during such period at a rate of two per cent (2%) above
 the rate applicable thereto immediately before it shall have become so due
 and payable. If, for the reasons specified in clause 3.6.1, the Agent is
 unable to determine a rate in accordance with the foregoing provisions of
 this clause 3.4, each

 

21

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Lender shall promptly notify the Agent of the cost of funds to such
 Lender 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, the cost of funds to such Lender and
 the Mandatory Cost Rate, if any. Interest payable by the Borrower as
 aforesaid shall be compounded quarterly (or if the period fixed by the Agent
 is longer, at the end of such longer period) and shall be payable on demand.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the avoidance of doubt, this clause 3.4 does not apply:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 in case the
 failure to effect a payment under this Agreement or any of the other Security
 Documents is solely due to technical problems within the relevant Creditor’s
 payment system which is beyond the control of the Borrower or the relevant
 Security Party; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 to any amount
 payable under a Master Agreement in respect of any continuing Transaction as
 to which section 2(e) (Default Interest; Other Amounts) of that Master
 Agreement shall apply or, in the case of the Master Agreement with DSB as
 Swap Bank, clause 3(4) of that Master Agreement, shall apply.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.5

 	
  

 	
 Notification of Interest Periods and
 interest rate 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.6

 	
  

 	
 Market disruption; non-availability 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.6.1

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 the Agent shall have determined (which determination shall, in the
 absence of manifest error, be conclusive) that adequate and fair means do not
 exist for ascertaining LIBOR during such Interest Period by reasons affecting
 the London interbank market generally; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 the Agent
 shall have received notification:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
   (i)

 	
 from Lenders with Contributions aggregating not less than one-third
 (3rd) of the Loan; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
   (ii)

 	
 prior to the Drawdown Date of the first Term Advance to be drawn down
 hereunder, from Lenders with Commitments aggregating not less than one- third
 (3rd) of the Total Commitment,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (aa)

 	
 deposits in Dollars are not available to such Lenders 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; and/or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (bb)

 	
 LIBOR for that Interest Period will not adequately reflect the cost
 of funding of the Loan for that Interest Period to all Lenders, 

 

22

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 the Agent shall forthwith give notice (a “Determination Notice”) thereof to the Borrower and to each
 of the Lenders. A Determination Notice shall contain particulars of the
 relevant circumstances giving rise to its issue. After the giving of any
 Determination Notice the undrawn amount of the Total Commitment shall not be
 borrowed until notice to the contrary is given to the Borrower by the Agent.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.6.2

 	
  

 	
 During the period of ten (10) days after any Determination Notice has
 been given by the Agent under clause 3.6.1, the Borrower and the Agent in
 consultation with the Lenders shall negotiate in good faith in order to
 arrive at a mutually acceptable substitute basis for each Lender to continue
 its Contribution and, if within such ten (10) day period the Borrower and the
 Agent (in consultation as aforesaid) shall agree in writing upon such an
 alternative basis (the “Substitute Basis”)the Substitute Basis should be
 retroactive to and effective from the first day of the relevant Interest
 Period. If the Borrower and the Agent (in consultation with the Lenders) fail
 to agree on a substitute basis within such ten (10) day period, the Borrower
 shall repay the Loan on the tenth (10th) Banking Day after expiry
 of such twenty day period, together with accrued interest thereon payable to
 each Lender at the rate certified by each such Lender and notified through
 the Agent to the Borrower as being a reasonable interest reflecting the cost
 to such Lender of funding its Contribution during the period ending on the
 date of such prepayment, plus the Margin. So long as any Substitute Basis is
 in force, the Agent shall from time to time (but at least monthly) and in
 consultation with the Lenders review whether or not the circumstances are
 such that such Substitute Basis is no longer necessary and, if the Agent so
 determines it shall notify the Borrower and the Lenders that the Substitute
 Basis shall cease to be effective from such date as the Agent shall
 reasonably specify. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4

 	
  

 	
 REPAYMENT AND PREPAYMENT 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.1

 	
  

 	
 Repayment 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.1.1

 	
  

 	
 Repayment of
 the Loan: The Borrower shall repay the Loan by forty
 (40) consecutive quarterly Repayment Instalments, one such Repayment
 Instalment to be repaid on each of the Repayment Dates. Subject to the
 provisions of this Agreement, the amount of each of such Repayment
 Instalments shall be as follows: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 the amount of each of the 1st to 4th (both
 inclusive) Repayment Instalments shall be in the amount of Six million five
 hundred thousand Dollars (US$6,500,000);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 the amount of each of the 5th to 12th (both
 inclusive) Repayment Instalments shall be Nine million Dollars
 (US$9,000,000);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 the amount of the Loan outstanding after the repayment of the 12th
 Repayment Instalment shall be repaid by twenty eight (28) equal consecutive
 quarterly Repayment Instalments each of which shall be in an amount equal to
 the formula:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Loan amount
(20-WAA)x4]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 where:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “WAA” means the weighted average age of all
 Mortgaged Ships calculated with the following formula:

 

23

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 S1

 	
 = WAA

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 S2

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 where on the
 day of application of the formula:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 S1

 	
 is the sum
 of the products of the TEU of all Mortgaged Ships, each multiplied by her
 age; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 S2

 	
 is the sum of
 the TEU of all Mortgaged Ships;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 The balance of the Loan outstanding after payment of the last
 Repayment Instalment shall constitute the Balloon Instalment payable together
 with the last (the 40th) Repayment Instalment on the final
 Repayment Date.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 provided that (a) if the last Repayment Date
 would otherwise fall after the Final Maturity Date, the last Repayment Date
 shall be the Final Maturity Date, (b) in the event that the Term Loan
 Facility is not drawn down in full, the amount of each of the Repayment
 Instalments (including the Balloon Instalment) shall be proportionally
 reduced, (c) there shall be no Repayment Dates after the Final Maturity Date
 and (d) on the Final Maturity Date the Borrower shall also pay to the Agent
 any and all other moneys then due and payable under this Agreement and the
 other Security Documents; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 provided further that if any of the
 Repayment Instalments shall become due on a day which is not a Banking Day,
 the due date therefor shall be extended to the next succeeding Banking Day
 unless such Banking Day falls in the next calendar month in which event such
 due date shall be the immediately preceding Banking Day.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.1.2

 	
  

 	
 Supplemental agreement: Upon the Agent’s
 request, on the Amalgamation Date the Borrower shall enter with the Creditors
 into an agreement supplemental to this Agreement and any deed of amendment of
 the Mortgages (if required under the law applicable thereon), wherein it
 shall be specified the exact amounts of the 28 Repayment Instalments and the
 Balloon Instalment. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.1.3

 	
  

 	
 Amalgamation of the Revolving Advances and the Term Advances:
 on the Amalgamation Date the Revolving Facility shall be terminated and shall
 be amalgamated with the Term Advances and shall comprise the Loan. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.2

 	
  

 	
 Voluntary prepayment — Reduction of Revolving Facility 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 The Borrower may prepay the Loan in whole or part (such part being in
 an amount of One million Dollars (US$1,000,000) or any larger sum which is an
 integral multiple thereof) on (i) any Interest Payment Date relating to the
 part of the Loan to be repaid without premium or penalty subject always to
 its obligations under clause 4.5 or (ii) any other day subject always to its
 obligations under clause 4.5.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 The Borrower by notice to the Agent may reduce and cancel the
 Revolving Facility in amounts of minimum One million Dollars (US$1,000,000)
 or an integral multiple thereof.

 

24

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3 

 	
  

 	
 Prepayment on Total Loss or sale

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3.1

 	
  

 	
 Compulsory Prepayment in case of Total Loss:
 On any Mortgaged Ship becoming a Total Loss the Borrower shall prepay the
 Required Amount, without penalty, premium or prepayment fee, together with
 accrued interest on the Loan to the date of prepayment and all other sums
 then payable by the Borrower to the Creditors pursuant to this Agreement and
 the Security Documents, including, without limitation, any amounts payable
 under clause 11, the latest on the date falling one hundred and eighty (180)
 days after the date of the Total Loss or, if earlier, on the date upon which
 the insurance proceeds in respect of such Total Loss are or Requisition
 Compensation (as defined in the relevant Mortgage) is received by the
 relevant Owner (or the Security Agent or any other Creditor pursuant to the
 Security Documents).

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3.2

 	
  

 	
 Compulsory Prepayment in case of sale of a Ship:
 Immediately upon the sale or other disposal of a Mortgaged Ship to a third
 party on terms of a sale or other disposal at arms length terms, the Borrower
 shall prepay to the Lenders the Required Amount, without penalty, premium or
 prepayment fee, together with accrued interest on the Loan to the date of
 prepayment and all other sums then payable by the Borrower to the Creditors
 pursuant to this Agreement, including, without limitation, any amounts
 payable under clause 11;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 and for the purposes of this clause 4.3, “Required Amount” means the higher of (aa) the proportion of
 the Loan which the Market Value of the relevant Mortgaged Ship bears to the
 aggregate of the Market Value of all the at the time Mortgaged Ships based on
 the valuations of such Ships carried out under clause 8.2.3 or, as the case
 may be, 8.2.4 immediately prior to (1) the Total Loss occurred or, as the case
 may be, (2) the sale or other disposal of the relevant Mortgaged Ship and
 (bb) such part of the Loan as shall be necessary to result in the ratio amount of the Loan /Security Value being,
 after such prepayment, the same as it has been immediately prior to (1) the
 Total Loss or, as the case may be, (2) the sale or other disposal of the
 relevant Ship.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3.3

 	
  

 	
 Application:
 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 Each voluntary partial prepayment of the Loan under clause 4.2(a) and
 each mandatory partial prepayment of the Loan under clause 4.3 which is less
 than the Outstanding Indebtedness will be applied by the Lender:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
   (i)

 	
 if it is
 made as a result of a Total Loss or sale or other disposal of the relevant
 Ship:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (A)

 	
 prior to the Amalgamation Date, and the relevant Ship has been
 financed (aa) by a Term Advance, in or towards prepayment of the Loan, but
 without affecting the amount of the first 12 Repayment Instalments, or (bb)
 by a Revolving Advance, in or towards prepayment of the Revolving Advances,
 and in such case the Maximum Available Amount of the Revolving Facility shall
 be increased by an amount equal to the part of amount so prepaid in respect
 of the Revolving Advances, and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (B)

 	
 after the Amalgamation Date, in or towards pro rata prepayment of the
 Repayment Instalments and the Balloon Instalment;

 

25

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
   (ii)

 	
 if it is made as a result of any other voluntary partial prepayment,
 in or towards prepayment of the Repayment Instalments and/or the Balloon
 Instalment and/or the Revolving Advances, in such manner of application as
 the Borrower may determine.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 Each voluntary partial prepayment of any Revolving Advance under
 clause 4.2 will be applied by the Agent in or towards prepayment of such
 Revolving Advance.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3.4

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (e)

 	
 in the case
 of hijacking, theft, condemnation, capture, seizure, arrest, detention or
 confiscation of a Ship (other than where the same amounts to Compulsory
 Acquisition of a Ship) by any Government Entity, or by persons purporting to
 act on behalf of any Government Entity, which deprives the Owner thereof of
 the use of such Ship for more than ninety (90) days, upon the expiry of the
 period of ninety (90) days after the date upon which the relevant hijacking,
 theft, condemnation, capture, seizure, arrest, detention or confiscation
 occurred.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.4

 	
  

 	
 Additional voluntary prepayment 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.4.1

 	
  

 	
 The Borrower may also prepay (in whole but not in part only), without
 premium or penalty, but without prejudice to its obligations under clauses
 3.6, 6.6 and 12.2: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 the
 Contribution of any Lender to which the Borrower shall have become obliged to
 pay additional amounts under clauses 6.6 or 12.2; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 any Lender’s
 Contribution to which a Substitute Basis applies by virtue of clause 3.6.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Upon any notice of such prepayment being given, the Commitment of the
 relevant Lender shall be reduced to zero.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.5

 	
  

 	
 Amounts payable on prepayment 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.5.1

 	
  

 	
 accrued interest on the amount to be prepaid to the date of such
 prepayment in respect of the amount being prepaid;

 

26

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.5.2

 	
  

 	
 any additional amount payable under clauses 6.6 or 12.2; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.5.3

 	
  

 	
 all other sums payable by the Borrower to the Creditors under this
 Agreement or any of the other Security Documents including, without
 limitation, any accrued commitment commission payable under clause 5.1 and
 any amounts payable under clause 11. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.6

 	
  

 	
 Notice of prepayment 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.6.1

 	
  

 	
 No prepayment may be effected under clause 4.2 unless the Borrower
 shall have given the Agent at least five (5) days prior written notice of its
 intention to make such prepayment. Every notice of prepayment shall be
 effective only on actual receipt by the Agent, shall be irrevocable, shall
 specify the amount to be prepaid and shall oblige the Borrower to make such
 prepayment on the date specified. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.6.2

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.7

 	
  

 	
 No re-borrowing 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 No amount of the Term Advances prepaid may be re-borrowed, but any
 Revolving Advance or part thereof which is prepaid (and not cancelled) may be
 re-borrowed, within the Availability Period relative thereto, subject to the
 re-borrowing not resulting in the maximum amount of the Revolving Facility
 exceeding US$300,000,000 (or such other lower amount as a result of any
 cancellation of the Revolving Facility pursuant to this Agreement).

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5

 	
  

 	
 FEES, COMMITMENT COMMISSION AND EXPENSES

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.1

 	
  

 	
 Fees 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower
 shall pay to the Agent:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.1.1

 	
  

 	
 an
 arrangement fee in the amount equal to: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 zero point
 two zero per cent (0.20%) on the amount of the Commitments of HVB and DSB
 (pro rata to their respective Commitments); and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 zero point
 three zero per cent (0.30%) on the amount of the Commitments of the other
 Lenders (pro rata to their respective Commitments),

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 payable on
 the first Drawdown Date;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.1.2

 	
  

 	
 for the account of the Arrangers, an agency fee in the amount equal
 to zero point one five per cent (0.15%) on the amount of the Total
 Commitment, which shall be split equally between the Arrangers and shall be
 payable on the date hereof; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.1.3

 	
  

 	
 for the account of each Lender, on each of the dates falling at three
 (3) monthly intervals after the date of this Agreement until the Final
 Availability Date (in relation to each Facility) and on each such Final
 Availability Date, commitment commission computed from 7th May,
 2008 (in the case of the first payment of commission) and from the date of
 the preceding payment of commission (in the case of each subsequent payment)
 at the rate of zero point two five per cent 

 

27

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (0.25%) per annum on the daily undrawn part of the Term Loan Facility
 and the Revolving Facility.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The fees and commitment commission referred to in this clause 5.1
 shall be payable by the Borrower to the Agent, for the account of the
 relevant Creditors, whether or not any part of the Total Commitment is ever
 advanced and shall be, in each case, nonrefundable.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.2

 	
  

 	
 Expenses 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower shall pay to the Agent on a full indemnity basis on
 demand:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.2.1

 	
  

 	
 Initial and Amendment expenses: all
 reasonable and documented expenses (including legal, printing and
 out-of-pocket expenses) reasonably incurred by the Creditors or any of them
 in connection with the negotiation, preparation and execution of this
 Agreement and the other Security Documents and of any amendment or extension
 of or the granting of any waiver or consent under this Agreement and/or any
 of the Security Documents and/or in connection with any proposal by the
 Borrower to constitute additional security pursuant to clause 8.2.1, whether
 any such security shall in fact be constituted or not;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.2.2

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.2.3

 	
  

 	
 MII costs: reimburse the Agent on demand for
 any and all costs incurred by the Agent (as supported by vouchers/invoices)
 in effecting and keeping effected a mortgagee’s interest insurance which the
 Agent may at any time effect for an amount of 110% of the aggregate of the
 Loan outstanding at the relevant time upon such terms as shall from time to
 time be determined by the Agent (herein “MII”),
 which the Agent may at any time effect on such terms and with such
 insurers as shall from time to time be determined by the Agent, provided
 however, that the Agent shall in its absolute discretion appoint and instruct
 in respect of any such MII the insurance brokers in respect of such insurance
 and provided further, that in the event that the Agent effects any such
 insurance on the basis of any mortgagee’s open cover, the Borrower shall pay
 on demand to the Agent its proportion of premium due in respect of the
 relevant Ship for which such insurance cover has been effected by the Agent,
 and any certificate of the Agent in respect of any such premium due by the
 Borrower (as supported by the necessary invoices/vouchers) shall (save for
 manifest error) be conclusive and binding upon the Borrower; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.2.4

 	
  

 	
 Other
 expenses: any and all other Expenses, 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 together with interest at the Default Rate (as conclusively certified
 by the Agent save in case of manifest error) from the date on which payment
 of such expenses was demanded 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

 

28

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 by the Borrower in addition to any sum agreed to be paid hereunder, provided
 that the relevant Creditor shall have confirmed in writing to the
 Borrower that it has not received or shall not receive a tax credit in
 respect of any such value added tax.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.4

 	
  

 	
 Stamp and other duties 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower 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 Borrower to pay
 such duties or taxes.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6

 	
  

 	
 PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.1

 	
  

 	
 No set-off or counterclaim 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.2

 	
  

 	
 Payment by the Lenders 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.3

 	
  

 	
 Non-Banking Days 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 

29

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 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 Borrower.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.6

 	
  

 	
 Grossing-up for Taxes 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.6.1

 	
  

 	
 If at any time the Borrower is required to make any deduction or
 withholding in respect of Taxes from any payment due under any of the
 Security Documents for the account of any Creditor or if the Agent or the
 Security Agent is required to make any deduction or withholding from a
 payment to another Creditor or withholding in respect of Taxes from any
 payment due under any of the Security Documents, the sum due from the
 Borrower 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 Borrower shall indemnify each
 Creditor against any losses or costs incurred by it by reason of any failure
 of the Borrower to make any such deduction or withholding or by reason of any
 increased payment not being made on the due date for such payment. The
 Borrower shall 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 Borrower to a Swap Bank under or in connection with the
 Master Agreement to which that Swap Bank is a party as to which sums the
 relevant provisions of that Master Agreement shall apply. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.7

 	
  

 	
 Claw-back of Tax benefit 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.7.1

 	
  

 	
 If, following any such deduction or withholding as is referred to in
 clause 6.6 from any payment by the Borrower, a Lender shall receive or be
 granted a credit against or remission for any Taxes payable by it, such
 Lender shall, subject to the Borrower having made any increased payment in
 accordance with clause 6.6 and to the extent that such Lender can do so
 without prejudicing the retention of the amount of such credit or remission
 and without prejudice to the right of such Lender to obtain any other relief
 or allowance which may be available to it, reimburse the Borrower with such
 amount as such Lender shall in its absolute discretion certify to be the
 proportion of such credit or remission as will leave such Lender (after such
 reimbursement) in no worse position than it would have been in had there been
 no such deduction or withholding from the payment by the Borrower as
 aforesaid. Such reimbursement shall be made forthwith upon such Lender
 certifying that the amount of such credit or remission has been received by
 it. Nothing contained in this Agreement shall oblige a Lender to rearrange
 its tax affairs or to disclose any information regarding its tax affairs and
 computations. Without prejudice to the generality of the foregoing, the
 Borrower shall not, by virtue of this clause 6.7, 

 

30

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 be entitled to enquire about a Lender’s tax affairs. Any allocation or
 determination made by such Lender under or in connection with this clause
 shall be binding on the Borrower.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.8

 	
  

 	
 Facility account 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each Lender shall maintain, in accordance with its usual practice, an
 account evidencing the amounts from time to time lent by, owing to and paid
 to it under the Security Documents. The Agent and/or the Security Agent shall
 maintain a control account (being, in the case of any Mortgage which is in
 statutory form, the “Account Current” referred to in such Mortgage) showing
 the Term Advances, the Revolving Advances and other sums owing by the
 Borrower 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
 Borrower 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 Borrower
 under any of the Security Documents, the amount received by the Agent from
 the Borrower falls short of the total amount of the payment due to be made by
 the Borrower on such date then, without prejudice to any rights or remedies
 available to the Agent, the Security Agent and the Lenders under any of the
 Security Documents, the Agent shall apply the amount actually received from
 the Borrower in or towards discharge of the obligations of the Borrower under
 the Security Documents in the following order, notwithstanding any
 appropriation made, or purported to be made, by the Borrower:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.10.2

 	
  

 	
 secondly, in or towards payment, on a pro rata basis of any fees and
 accrued commitment commission payable to the Arrangers, the Agent or any of
 the other Creditors under, or in relation to, the Security Documents which
 remain unpaid;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.10.3

 	
  

 	
 thirdly, in or towards payment to the Lenders, on a pro rata basis,
 of any accrued interest owing in respect of the Loan which shall have become
 due under any of the Security Documents but remains unpaid;

 

31

	
  

 	
  

 	
  

 
	
 6.10.4

 	
  

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

 
	
  

 	
  

 	
  

 
	
 6.10.5

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The order of application set out in clauses 6.10.2 to 6.10.6 may be
 varied by the Agent if the Majority Lenders so direct, without any reference
 to, or consent or approval from, the Borrower.

 
	
  

 	
  

 	
  

 
	
 7

 	
  

 	
 REPRESENTATIONS AND WARRANTIES

 
	
  

 	
  

 	
  

 
	
 7.1

 	
  

 	
 Continuing representations and warranties

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower represents and warrants to each Creditor that:

 
	
  

 	
  

 	
  

 
	
 7.1.1

 	
  

 	
 Due incorporation: the Borrower and each of
 the other corporate Security Parties are duly incorporated and validly
 existing in good standing under the laws of their respective countries of
 incorporation as limited liability companies, 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: the Borrower has power to
 execute, deliver and perform its obligations under the Security Documents to
 which it is or is to be a party and to borrow the Total Commitment and to
 enter into Transactions under each Master Agreement and each of the other
 Security Parties has power to execute and deliver and perform its obligations
 under the Security Documents to which it is or is to be a party; all
 necessary corporate, shareholder and other action has been taken to authorise
 the execution, delivery and performance of the same and no limitation on the
 powers of the Borrower to borrow will be exceeded as a result of borrowing
 the Loan;

 
	
  

 	
  

 	
  

 
	
 7.1.3

 	
  

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

 
	
  

 	
  

 	
  

 
	
 7.1.4

 	
  

 	
 No conflict with other obligations: the
 execution and delivery of, the performance of their obligations under, and
 compliance with the provisions of, the Security Documents by the relevant
 Security Parties will not (i) contravene any existing applicable law,
 statute, rule or regulation or any judgment, decree or permit to which the
 Borrower or any other Security Party is subject, (ii) conflict with, or
 result in any breach of any of the terms of, or constitute a default under,
 any agreement or other instrument to which the Borrower or any other Security
 Party is a party or is subject or by which it or any of its property is
 bound, (iii) contravene or conflict with any provision of the constitutional
 documents of the Borrower or any other Security Party or (iv) result in the
 creation or imposition of or oblige the Borrower or any of its Related
 Companies or any other Security Party to create any Encumbrance (other than a
 Permitted Encumbrance) on any of the undertakings, assets, rights or revenues
 of the Borrower or its Related Companies or any other Security Party;

 
	
  

 	
  

 	
  

 
	
 7.1.5

 	
  

 	
 No litigation: no litigation, arbitration or
 administrative proceeding relating to an amount exceeding in respect of (a)
 the Group cumulatively US$50,000,000 and (b) each Related Company
 US$3,000,000 is taking place, pending or, to the knowledge of the officers of
 the 

 

32

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Borrower, threatened against the Borrower or any of its Related
 Companies or any other Security Party which could have a material (in the
 reasonable opinion of the Majority Lenders) adverse effect on the business,
 assets or financial condition of the Borrower or any of its Related Companies
 or any other Security Party;

 
	
  

 	
  

 	
  

 
	
 7.1.6

 	
  

 	
 No filings required: save for the
 registration of each Mortgage in the relevant register under the laws of the
 relevant Flag State through the relevant Registry, it is not necessary to
 ensure the legality, validity, enforceability or admissibility in evidence of
 any of the 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 Security Documents and each of 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 Security Documents (other than the Accounts Pledge Agreements, the
 Mortgages and the Personal Guarantees), the choice of (i) the law of the
 relevant Flag State to govern each Mortgage (ii) the Greek law to govern the
 Accounts Pledge Agreements and the Personal Guarantees and (iii) and the
 submissions by the Security Parties in any of the Security Documents to the
 non-exclusive jurisdiction of the English courts, are valid and binding;

 
	
  

 	
  

 	
  

 
	
 7.1.8

 	
  

 	
 No immunity: neither the Borrower nor any
 other Security Party nor any of their respective assets is entitled to
 immunity on the grounds of sovereignty or otherwise from any legal action or
 proceeding (which shall include, without limitation, suit, attachment prior
 to judgement, execution or other enforcement);

 
	
  

 	
  

 	
  

 
	
 7.1.9

 	
  

 	
 Consents obtained: every consent,
 authorisation, licence or approval of, or registration with or declaration
 to, governmental or public bodies or authorities or courts required by any
 Security Party to authorise, or required by any Security Party in connection
 with, the execution, delivery, validity, enforceability or admissibility in
 evidence of each of the Security Documents to which it is or is to be a party
 or the performance by each Security Party of its obligations under the
 Security Documents 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

 	
  

 	
 Shareholdings: 100% of the total issued
 share capital of the Borrower and the Corporate Guarantors is directly or in
 directly held by the Vasileios Konstantakopoulos family; and 

 
	
  

 	
  

 	
  

 
	
 7.1.11

 	
  

 	
 Money laundering - acting for own account:
 the Borrower confirms that it is the beneficiary within the meaning of
 section 8 of the German Money Laundering Act (“Gesetz über das Aufspüren von
 Gewinnen aus schweren Straftaten” or “Geldwäschegesetz”) for each part of the
 Total Commitment made or to be made available to it and it will promptly
 inform the Agent by written notice if it is not, or ceases to be, the
 beneficiary and notify the Agent in writing of the name and the address of
 the new beneficiary. The Borrower is aware that under applicable money
 laundering provisions, it has an obligation to state for whose account the
 Total Commitment is being obtained. In relation to the borrowing by the
 Borrower of the Total Commitment, the performance and discharge of its
 obligations and liabilities under this Agreement or any of the Security
 Documents and the transactions and other arrangements effected or
 contemplated by this Agreement or any of the Documents to which the Borrower
 is a party, it is acting for its own account and that the foregoing will not
 involve or lead to a contravention of any law, official requirement or other
 regulatory measure or procedure which 

 

33

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 has been implemented to combat “money laundering” (as defined in
 Article 1 of the Directive (91/308/EEC) of the Council of the European
 Community).

 
	
  

 	
  

 	
  

 
	
 7.2

 	
  

 	
 Initial representations and warranties 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower
 further represents and warrants to each Creditor that:

 
	
  

 	
  

 	
  

 
	
 7.2.1

 	
  

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

 
	
  

 	
  

 	
  

 
	
 7.2.2

 	
  

 	
 No default under other Indebtedness: neither
 the Borrower nor any of its Related Companies nor any other Security Party is
 (nor would with the giving of notice or lapse of time or the satisfaction of
 any other condition or combination thereof be) in breach of or in default
 under any agreement relating to Indebtedness relating to an aggregate amount
 exceeding $1,000,000 in respect of each Owner of a Mortgaged Ship or
 $3,000,000 in respect of each Group member, owner of any other vessel to
 which such Owner or such Group member is a party or by which it may be bound;
 

 
	
  

 	
  

 	
  

 
	
 7.2.3

 	
  

 	
 Information:
 the information, exhibits and reports furnished by any Security Party to the
 Creditors or any of them in connection with the negotiation and preparation
 of the Security Documents are true and accurate in all material respects and
 not materially 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 materially misleading;

 
	
  

 	
  

 	
  

 
	
 7.2.4

 	
  

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

 
	
  

 	
  

 	
  

 
	
 7.2.5

 	
  

 	
 No default: no Event of Default has occurred
 and is continuing;

 
	
  

 	
  

 	
  

 
	
 7.2.6

 	
  

 	
 MOA valid: the copy of each MOA to be
 delivered to the Agent shall be a true and complete copy of such document
 constituting valid and binding obligations of the parties thereto enforceable
 in accordance with its terms and no amendments thereto or variations thereof
 shall have been (or will be) agreed nor shall any action been taken by the
 parties thereto which would in any way render such document inoperative or
 unenforceable;

 
	
  

 	
  

 	
  

 
	
 7.2.7

 	
  

 	
 No Rebates: there will be no commissions,
 rebates premiums or other payments by or to or on account of the Borrower,
 any other Security Party or, to the knowledge of the Borrower or the relevant
 Owner or any other person, in connection with the MOA other than as shall be
 disclosed to the Agent by the Borrower in writing;

 
	
  

 	
  

 	
  

 
	
 7.2.8

 	
  

 	
 No Encumbrance: no Owner has previously
 charged, encumbered or assigned the benefit of any of its rights, title and
 interest in or to the Existing Charterparty relative to its Ship and such
 benefit and all such rights, title and interest are freely assignable and
 chargeable in the manner contemplated by the Security Documents;

 

34

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.9

 	
  

 	
 The Ships:
 Each Tranche A Ship will, on the Drawdown Date of the Advance relative to
 such Ship, be: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 in the absolute ownership of the Owner thereof who is and will, on
 and after such Drawdown Date, be the sole, legal and beneficial owner of such
 Ship;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 registered through the offices of the relevant Registry as a ship
 under the laws and flag of the Republic of Greece;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 operationally
 seaworthy and in every way fit for service; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

 	
 classed with the Classification referred to in the relevant Mortgage,
 free of all overdue requirements and overdue recommendations of the relevant
 Classification Society;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.10

 	
  

 	
 Ship’s employment: no Tranche A Ship is nor
 will, on or before the Drawdown Date of the Advance relative to such Ship, be
 subject to any charter or contract or to any agreement to enter into any
 charter or contract (other than the relevant Existing Charterparty or an
 Approved Charterparty) which, if entered into after the date of the Security
 Documents would have required the consent of the Lenders or, as the context
 may require, the Security Agent, in each case acting on the instructions of
 the Majority Lenders, and, on or before the Drawdown Date of the Advance
 relative to such Ship, there will not be any agreement or arrangement whereby
 the Earnings may be shared with any other person;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.11

 	
  

 	
 Freedom from Encumbrances: neither any
 Tranche A Ship, nor its Earnings, Insurances or Requisition Compensation
 (each as defined in the Security Documents) nor any Operating Account relative
 to such Tranche A Ship nor Fly other account 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 relative to such Ship,
 subject to any Encumbrance (other than any Permitted Encumbrances);

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.12

 	
  

 	
 Compliance with Environmental Laws and Approvals:
 except as may already have been disclosed by the Borrower in writing to, and
 acknowledged in writing by, the Agent: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 the Borrower and the other Relevant Parties and, to the best of the
 Borrower’s 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 Borrower nor any other Relevant Party nor, to the best of
 the Borrower’s knowledge and belief (having made due enquiry), any of their
 respective Environmental Affiliates has received notice of any Environmental
 Claim that the Borrower or any other Relevant Party or any such Environmental
 Affiliate is not in compliance with any Environmental Law or any
 Environmental Approval;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.13

 	
  

 	
 No Environmental Claims: except as may
 already have been disclosed by the Borrower in writing to, and acknowledged
 in writing by, the Agent, there is no Environmental Claim pending or, to the
 best of the Borrower’s knowledge and belief, threatened against the Owners 

 

35

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (or any of them) or the Ships (or any of them) or any other Relevant
 Party or any other Relevant Ship or to the best of the Borrower’s knowledge
 and belief (having made due enquiry) any of their respective Environmental
 Affiliates;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.14

 	
  

 	
 No potential Environmental Claims: except as
 may already have been disclosed by the Borrower in writing to, and
 acknowledged in writing by, the Agent, there has been no emission, spill,
 release or discharge of a Material of Environmental Concern from a Ship or
 any other Relevant Ship owned by, managed or crewed by or chartered to the Borrower
 nor, to the best of the Borrower’s knowledge and belief (having made due
 enquiry), from any Relevant Ship owned by, managed or crewed by or chartered
 to any other Relevant Party which could give rise to an Environmental Claim;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  7.2.15

 	
  

 	
 No material adverse change: there has been
 no material (in the reasonable opinion of the Majority Lenders) adverse
 change in the financial position of the Security Parties or any of them or
 the combined financial position of the Borrower and the Guarantors, from that
 described by the Borrower or any other Security Party to the Creditors or any
 of them in the negotiation of this Agreement;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.16

 	
  

 	
 Copies true and complete: the copies or
 originals of the Management Agreements (including copies of any sub-management
 agreements made between Costamare and a Technical Manager) delivered or to be
 delivered to the Agent pursuant to clause 9.1 are, or will when delivered be,
 true and complete copies or, as the case may be, originals of such documents;
 and such documents constitute valid and binding obligations of the parties
 thereto enforceable in accordance with their respective terms and there have
 been no amendments or variations thereof or defaults thereunder; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.17

 	
  

 	
 Compliance with the ISM Code: each Ship and
 any Operator complies or will on the drawdown of the Advance relative to such
 Ship comply with the requirements of the ISM Code;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2.18

 	
  

 	
 ISPS Code: each Owner has a valid and
 current ISSC in respect of its Ship and each Ship shall be in full compliance
 with the ISPS Code. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.3

 	
  

 	
 Repetition of representations and warranties 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 be deemed to repeat the representations and warranties in clauses 7.1
 (except in relation to 7.1.10)as if made with reference to the facts and
 circumstances existing on such day; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 be deemed to further represent and warrant to each of the Creditors
 that the then latest financial statements delivered to the Agent by the
 Borrower (if any) have been prepared in accordance with US-GAAP and present
 fairly and accurately the financial position and the results of the operations
 of the Borrower and its Subsidiaries (including the Owners) for the financial
 period to which the same relate and, as at the end of such financial period,
 neither the Borrower nor any of its Subsidiaries (including the Owners) 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. 

 

36

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  8

 	
  

 	
 UNDERTAKINGS 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1

 	
  

 	
 General 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.1

 	
  

 	
 Notice of default: promptly inform the Agent
 of any occurrence of which it becomes aware which might materially and
 adversely affect the ability of any Security Party to perform its obligations
 under any of the Security 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 (provided that
 such Event of Default is continuing at the time of provision of such
 information to the Agent) 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 Event of 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 under applicable law for the
 continued due performance of all the obligations of the Security Parties
 under each of the Security Documents;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.3

 	
  

 	
 Use of proceeds: use the Term Advances or,
 as the case may be, the Revolving Advances exclusively for the purposes
 specified in clauses 1.1 and 2.5;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.4

 	
  

 	
 Pari passu: ensure that its obligations
 under the Security Documents to which is a party do and will, without
 prejudice to the provisions of clause 8.3, at all times rank at least pari
 passu with all its other present and future unsecured and unsubordinated
 Indebtedness with the exception of any obligations which are mandatorily
 preferred by law and not by contract;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.5

 	
  

 	
 Financial statements — Compliance Certificate:
 prepare or cause to be prepared and furnish the Agent with: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 within ninety (90) days of the end of each semester of each financial
 year, copies of the unaudited (audited if available) interim consolidated
 financial statements of the Borrower and its Subsidiaries (including the
 Owners);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 within one hundred and eighty (180) days of the end of each financial
 year, audited annual consolidated financial statements of the Borrower and
 its Subsidiaries (including the Owners), prepared in accordance with US-GAAP,
 audited by auditors approved by the Agent, together with profit and loss
 accounts, and cause the same to be reported on by its auditors and deliver as
 many copies of the same as the Agent may reasonably require, the first of
 such statements to be for the financial year ending 31st December,
 2008; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 within ninety (90) days of the end of the first semester of 2009 and
 one hundred and eighty (180) after the financial year ending 31st
 December, 2009 and annually thereafter, a Compliance Certificate duly signed
 by the chief financial officer of

 

37

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 the Borrower in the form set out in schedule 10, duly completed and
 supported by calculations setting out in reasonable detail the materials
 underling the statements made in such compliance certificate;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.6

 	
  

 	
 Delivery of reports: deliver to the Agent sufficient copies for all
 the Lenders of every report, circular, notice or like document (excluding any
 document containing confidential pricing information and/or any document
 which is publically filed in connection with regulatory requirements) issued
 by the Borrower to its shareholders or banks generally;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.7

 	
  

 	
 Provision of further information: provide the Agent with such
 financial or other information (excluding any information containing
 confidential pricing information) concerning the Borrower, the Guarantors,
 the other Security Parties and their respective affairs, activities,
 financial standing, Indebtedness and operations and the performance of the
 Ships, as the Agent or any Lender (acting through the Agent) may from time to
 time reasonably require;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.8

 	
  

 	
 Obligations under Security Documents: and will procure that each of
 the other Security Parties will, duly and punctually perform each of the
 obligations expressed to be assumed by them under the Security Documents to
 which they are a party;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.9

 	
  

 	
 Compliance with ISM Code and ISPS Code: will procure that each
 Manager and any Operator: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 immediately inform the Agent if there is any threatened or actual
 withdrawal of the Owners’, the Managers’ or an Operator’s DOC or the SMC in
 respect of any Mortgaged Ship; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 promptly inform the Agent upon the issue to the any Owner, any
 Manager or any Operator of a DOC and to any Mortgaged Ship of an SMC or the
 receipt by any Owner, any Manager or any Operator of notification that its
 application for the same has been refused; and 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1.10

 	
  

 	
 Charters etc.: (a) deliver to the Agent, a certified copy of each
 Approved Charterparty, forthwith after its execution, (b) forthwith on the
 Agent’s request execute (i) a Charterparty Assignment of any such Approved
 Charterparty party in favour of the Security Agent and (ii) any notice of
 assignment required in connection therewith in such form as the Agent may
 require in its sole discretion (to be served upon the happening of an Event
 of Default which is continuing), and promptly procure (upon the happening of
 an Event of Default which is continuing) the acknowledgement of any such
 notice of assignment by the relevant charterer in such form as the Agent may
 require in its sole discretion and (c) pay all reasonable and documented
 legal and other costs incurred by any Creditor in connection with any such
 specific assignments, forthwith following the Agent’s demand. 

 

38

	
 

	
 

	
 

	
 

	
 

	
8.1.11

	
 

	
Know your customer and money laundering compliance:
provide the Agent with such documents and evidence as the Agent shall from
time to time require, based on law and regulations applicable from time to
time and the Lenders’ own internal guidelines applicable from time to time to
identify the Borrower and the other Security Parties, including the ultimate
legal and beneficial owner or owners of such entities, and any persons
involved or affected by the transaction(s) contemplated by this Agreement and
the Agent acknowledges receipt of adequate documents and evidence from the
Security Parties that has been submitted to the Agent in compliance of their
obligation under this clause 8.1.11.

	
 

	
 

	
 

	
 

	
 

	
8.2

	
 

	
Security value maintenance

	
 

	
 

	
 

	
 

	
 

	
8.2.1

	
 

	
Security shortfall: If, at any time during
the Security Period, the Security Value shall be less than the Security
Requirement, the Agent (acting on the instructions of the Majority Lenders)
shall give notice to the Borrower requiring that such deficiency be remedied
and then the Borrower shall either:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
prepay within a period of thirty (30) days of the date of receipt by
the Borrower 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 (or such longer period as the Lenders may
agree to) of the date of receipt by the Borrower of the Agent’s said notice
constitute to the satisfaction of the Agent (acting on the instructions of
the Lenders) such further security for the Outstanding Indebtedness as shall
be acceptable to the Lenders having a value for security purposes 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. Such additional security shall be constituted by:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (i)

	
additional pledged cash deposits in favour of the Lenders in an
amount equal to such shortfall with the Account Bank and in an account and
manner to be determined by the Agent (acting on the instructions of the
Lenders); and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (ii)

	
additional first preferred/priority mortgages on vessel(s) acceptable
to the Agent (acting on the instructions of the Lenders) the Market Value of
which shall be determined in accordance with clause 8.2.2; and/or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (iii)

	
any other security acceptable to all the Lenders at their absolute
discretion to be provided in a manner determined by the Agent (acting on the
instructions of the Lenders).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The provisions of clauses 4.5 and 4.6 shall apply to prepayments
under clause 8.2.1(a).

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Any amount prepaid pursuant to clause 8.2.1(a) shall be applied as
follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (i)

	
if it is made prior to the Amalgamation Date, in or towards
prepayment of the Loan, but without affecting the amount of the first 12
Repayment Instalments, and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (ii)

	
if it is made after the Amalgamation Date, in or towards pro rata
prepayment of the Repayment Instalments and the Balloon Instalment.

39

	
 

	
 

	
 

	
 

	
 

	
8.2.2

	
 

	
Valuation of Ships: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
Each Mortgaged Ship shall, for the purposes of this Agreement, be
valued in Dollars as and when the Agent (acting on the instructions of the
Majority Lenders) shall require and whenever is required pursuant to this
Agreement by an Approved Valuator appointed by the Borrower and such
valuation, subject as hereinafter provided, shall constitute the value of
such Mortgaged Ship for the purposes of this clause 8.2, provided,
however, that in case any Lender does not accept the valuation of such
Approved Valuator, the Agent shall appoint a second Approved Valuator to
value such Mortgaged Ship and the arithmetic mean of such two (2) valuations
shall constitute the value of such Mortgaged Ship for the purposes of this
clause 8.2. In case there is a difference of more than 10% between said two
valuations the Agent shall be entitled to obtain a third valuation of the
relevant Mortgaged Ship through an Approved Valuator jointly appointed by the
Agent and the Borrower and the arithmetic mean of such three valuations shall
constitute the value of such Mortgaged Ship for the purposes of this clause
8.2.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
The Market Value of each Mortgaged Ship determined in accordance with
the provisions of clause 8.2.3 or, as the case may be, 8.2.4 shall be binding
upon the parties hereto until such time as any further such valuation or, as
the case may be, valuations shall be obtained. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (c)

	
The Lenders and the Borrower each agrees to accept such valuation or,
as the case may be, valuations made by the Approved Valuators appointed as
aforesaid as conclusive evidence of the value of the relevant Mortgaged Ship
at the date of such valuation(s). 

	
 

	
 

	
 

	
 

	
 

	
8.2.3

	
 

	
Valuation of Mortgaged Ship subject to an Approved Charterparty:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
For the purpose of this clause 8.2 the Market Value of a Mortgaged
Ship which at the relevant time is subject to an Approved Charterparty with
an unexpired term of at least 12 months (excluding any option period) shall
be the aggregate of the present values (as conclusively (save in case of
manifest error) determined by the Agent) of: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (i)

	
the Bareboat-equivalent Time Charter Income of such Mortgaged Ship in
respect of the remaining unexpired term of the relevant Approved Charterparty
excluding any periods for which the relevant Approved Charterparty may be
renewed at the option of any party (for the purposes of this clause 8.2, an “option period”); and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (ii)

	
the Residual Value of such Mortgaged Ship as determined by the
Approved Valuator or as the case may be Approved Valuators as per clause
8.2.2(a) and; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
For the purposes of this clause 8.2: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (i)

	
the discount rate which will apply in calculating the present value
of the amounts referred to in paragraphs (i) and (ii) of this clause 8.2.3
will be the applicable interest rate swap rate for a period equal to the
unexpired term of the relevant Mortgaged Ship’s Approved Charterparty
(excluding any option periods (rounded up to the nearest integral year)); 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (ii)

	
 “Bareboat -
equivalent Time Charter Income” means, in
relation to a Mortgaged Ship, the aggregate net charter hire to be paid to
the Owner of that Mortgaged Ship for the remaining unexpired term of the
Approved Charterparty relative to that 

40

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Mortgaged
Ship at the relevant time (excluding any option periods (as that term is
defined in clause 8.2.3(i)) less the aggregate Operating Expenses of that
Mortgaged Ship for the same period; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (iii)

	
 “Residual Value” of
the relevant Mortgaged Ship means the current charter-free market value
(determined in accordance with clause 8.2.4) of a vessel with identical
characteristics to such Mortgaged Ship other than its age which shall, for
the purposes of this clause 8.2, be considered to be the age of such
Mortgaged Ship at the expiration of the Approved Charterparty to which such
Mortgaged Ship is subject at the relevant time (excluding any option
periods); 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (iv)

	
 “Operating Expenses” means,
in relation to a Mortgaged Ship and a relevant period, the expenses for
crewing, victualling, insuring, maintenance (including provision for
dry-docking and special survey cost and expenses), spares, stores, management
and operation of such Mortgaged Ship which are incurred for a vessel of the
size and type of such Mortgaged Ship as evidenced by the most recent annual
audited Accounting Information (as defined in clause 8.6.2) escalated at the
rate of 3% per annum. 

	
 

	
 

	
 

	
 

	
 

	
8.2.4

	
 

	
Valuation of
Mortgaged Ship not subject to an
Approved Charterparty: For the purpose of this
clause 8.2 the Market Value of a Mortgaged Ship which at the relevant time is
not subject to an Approved
Charterparty shall be made on the basis of valuation or, as the case may be,
valuations made by Approved Valuator(s) per clause 8.2.2(a) as may from time
to time be appointed or approved by the Agent. For this purpose, such
valuation or, as the case may be, valuations shall be made on the basis of a
sale for prompt delivery for cash at arm’s length on normal commercial terms
as between a willing seller and a willing buyer, but without taking into
account any existing charter or other engagement concerning such Mortgaged
Ship. 

	
 

	
 

	
 

	
 

	
 

	
8.2.5

	
 

	
Information:
The Borrower undertakes with the Creditors to supply to the Agent and to any
Approved Valuator appointed as aforesaid such information concerning each
Ship and its condition as such Approved Valuator may reasonably require for
the purpose of making any such valuation or, as the case may be, valuations. 

	
 

	
 

	
 

	
 

	
 

	
8.2.6

	
 

	
Costs:
The Borrower shall bear the cost of the following valuations of the Ships: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
the
valuation of the Fleet Vessels as per clause 8.6.5 and, if required pursuant
to clause 8.2.2(a), the second valuation and the third valuation of the Ships
as provided therein; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
the
valuation referred to in schedule 3, Part 2, paragraph 12; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (c)

	
any
valuation either of any additional security for the purposes of ascertaining
the Security Value at any time or necessitated by the Borrower electing to
constitute additional security pursuant to clause 8.2.1(b), shall be borne by
the Borrower. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Any other
additional valuations shall be obtained at Lenders’ cost.

	
 

	
 

	
 

	
 

	
 

	
8.2.7

	
 

	
Valuation of
additional security: For the purposes of this clause
8.2, the market value of any additional security provided or to be provided
to the Creditors or any of them shall be determined by the Agent, acting on
the instructions of the Majority Lenders, in its absolute discretion without
any necessity for the Agent assigning any reason therefor. 

41

	
 

	
 

	
 

	
 

	
 

	
8.2.8

	
 

	
Documents and evidence: In connection with
any additional security provided in accordance with this clause 8.2, the
Agent shall be entitled to receive such evidence and documents of the kind
referred to in schedule 3 as may in the Agent’s opinion be appropriate and
such favourable legal opinions as the Agent, acting on the instructions of
the Majority Lenders, shall in its absolute discretion require. 

	
 

	
 

	
 

	
 

	
 

	
8.2.9

	
 

	
Debt Service deficit: If on or about the
Amalgamation Date the Agent shall determine that the Cash-flow is not
sufficient to cover on an accrual basis the Debt Service for the period
commencing on the Amalgamation Date and ending on the date on which an
Existing Charterparty or any other Approved Charterparty with the shortest
charter period expires, the Agent (upon the instructions of the Majority
Lenders) shall give notice to the Borrower of such fact and the Borrower will
be obliged, within a period of thirty (30) days of the date of receipt by the
Borrower of the Agent’s said notice, either to offer Additional Ship or Ships
to be mortgaged in favour of the Security Agent or the Lenders in security of
the Outstanding Indebtedness and whose Earnings, Insurances and Requisition
Compensation shall be assigned to the Security Agent or the Lenders in
security of the Outstanding Indebtedness and the Cash-flow of such Additional
Ship or Ships shall be sufficient to cover any Debt Service deficit at the
relevant time or to place into a an account in the name of the Borrower
maintained with the Account Bank and pledged in favour of the Lenders and the
Swap Banks an amount equal to such Debt Service deficit, provided however,
that (i) such Additional Ship or Ships shall not be taken into account
when calculating the amount of the Repayment Instalments payable as per
clause 4.1 after the Amalgamation Date and (ii) such cash pledged will not be
deducted from the calculation of 8.6.1(c) covenant). 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The above Cash-flow test shall be made by the Agent upon the expiry
and/or termination of any Existing Charterparty or any other Approved
Charterparty (unless such Existing Charterparty or other Approved
Charterparty has been renewed at a hire rate equal to or better than the
existing one), in respect of the period commencing on the Amalgamation Date
and ending on the date on which such Existing Charterparty or Approved
Charterparty (as the case may be) next expires.

	
 

	
 

	
 

	
 

	
 

	
8.2.10

	
 

	
Release of security: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
If the Security Value shall at any time exceed the Security
Requirement, and the Borrower shall previously have provided further security
to the Security Agent pursuant to clause 8.2.1, the Security Agent shall, as
soon as reasonably practicable after notice from the Borrower to do so,
release any such further security specified by the Borrower provided that
the Security Agent is satisfied that, immediately following such release, the
Security Value will equal or exceed the Security Requirement. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
If following the Amalgamation Date the Cash flow of the Mortgaged
Ships at the time exceeds the Debt Service at the time and the Borrower shall
previously have provided further security to the Security Agent pursuant to
clause 8.2.9, the Security Agent shall, as soon as reasonably practicable
after notice from the Borrower to do so, release any such further security
specified by the Borrower provided that the Security Agent is satisfied that,
immediately following such release, the Cash Flow of the remaining Mortgaged
Ships will equal or exceed the relevant Debt Service. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (c)

	
If the Security Value exceeds the Security Requirement and provided
no Event of Default has occurred and is continuing at the relevant time, the
Borrower may request and the Security Agent at the Lenders’ discretion may
release any such security comprising the Security Value specified by the
Borrower (including, for the avoidance of doubt, any of 

42

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
the Ships) provided that the Security Agent is satisfied that,
immediately following such release, the Security Value will equal or exceed
the Security Requirement.

	
 

	
 

	
 

	
 

	
 

	
8.3

	
 

	
Negative undertakings 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrower undertakes 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, it will not, without the prior written consent of the Agent
(acting on the instructions of the Majority Lenders):

	
 

	
 

	
 

	
 

	
 

	
8.3.1

	
 

	
Negative pledge: and will procure that no
other Security Party will, without the prior written consent of the Agent
(acting on the instructions of the Majority Lenders), permit any Encumbrance
(except for a Permitted Encumbrance) to subsist, arise or be created or
extended over all or any part of its present or future undertakings, assets,
rights or revenues to secure or prefer any present or future Indebtedness or
other liability or obligation of any Security Party or any other person
(including, but not limited to the Borrower’s rights against the Swap Banks
under the Master Agreements or all or any part of the Borrower’s interest in
any amount payable to the Borrower by the Swap Banks under any Master
Agreement) other than in the normal course of its business, provided
however that, in relation to the Borrower only, the Agent’s consent shall
not be required so long as this does not result in a breach of its financial
covenants under clause 8.6; 

	
 

	
 

	
 

	
 

	
 

	
8.3.2

	
 

	
No merger: and will procure that no other
Security Party will, without the prior written consent of the Agent (acting
on the instructions of the Majority Lenders), merge or consolidate with any
other person, unless, in the case of the Borrower only, the new
entity, being the product of such merger or consolidation, will be, in the
sole opinion of the Majority Lenders, at least of equal financial strength
and it will assume all the liabilities of the Borrower under this Agreement
and the other Security Documents; 

	
 

	
 

	
 

	
 

	
 

	
8.3.3

	
 

	
Other business: and will procure that no
other Security Party will, undertake any business other than the ownership
and operation of the respective Ship and will procure that no other Security
Party undertakes, without the prior written consent of the Agent (acting on
the instructions of the Majority Lenders), any business other than that
conducted by such Security Party at the date of this Agreement; 

	
 

	
 

	
 

	
 

	
 

	
8.3.4

	
 

	
Acquisitions: and will procure that no other
Owner will, acquire any further assets other than its Ship(s) and rights
arising under contracts entered into by or on behalf of the Borrower in the
ordinary course of its businesses of owning, operating and chartering its
Ship(s) and will procure that no other Security Party will, without the prior
written consent (such consent not to be unreasonably withheld) of the Agent
(acting on the instructions of the Majority Lenders), acquire any further
assets other than in the ordinary course of its business (other than any vessels
to be acquired by the Borrower); 

	
 

	
 

	
 

	
 

	
 

	
8.3.5

	
 

	
Other obligations: and will procure that no
other Security Party will, without the prior written consent (such consent
not to be unreasonably withheld) of the Agent (acting on the instructions of
the Majority Lenders), incur any obligations except for obligations arising
under the relevant Management Agreements and the relevant Security Documents
to which it is party or contracts entered into in the ordinary course of its
business, provided however that, in relation to the Borrower only, the
Agent’s consent shall not be required so long as this does not result in a
breach of its financial covenants under clause 8.6; 

43

	
 

	
 

	
 

	
8.3.6

	
 

	
No borrowing: and will procure that no other
Security Party will, without the prior written consent of the Agent (acting
on the instructions of the Majority Lenders), incur any Borrowed Money except
for Borrowed Money pursuant to the Security Documents and in the ordinary
course of its business, provided however that, in relation to the
Borrower only, the Agent’s consent shall not be required so long as this does
not result in a breach of its financial covenants under clause 8.6; 

	
 

	
 

	
 

	
8.3.7

	
 

	
Repayment of borrowings: and will procure
that no other Security Party will, without the prior written consent of the
Agent (acting on the instructions of the Majority Lenders), repay or prepay
the principal of, or pay interest on or any other sum in connection with any
of its Borrowed Money except for Borrowed Money pursuant to the Security
Documents and in the ordinary course of its business, provided however
that, in relation to the Borrower only, the Agent’s consent shall not be
required so long as this does not result in a breach of its financial
covenants under clause 8.6; 

	
 

	
 

	
 

	
8.3.8

	
 

	
Guarantees: and will procure that no other
Security Party will, without the prior written consent of the Agent (acting
on the instructions of the Majority Lenders), 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, in the case of each Owner, for guarantees or
indemnities from time to time required in the ordinary course by any
protection and indemnity or war risks association with which its Ship is
entered, guarantees required to procure the release of its Ship from any
arrest, detention, attachment or levy or guarantees or undertakings required
for the salvage of its Ship, provided however that, in relation to the
Borrower only, the Agent’s consent shall not be required so long as this does
not result in a breach of its financial covenants under clause 8.6; 

	
 

	
 

	
 

	
8.3.9

	
 

	
Loans: and will procure that no other
Security Party will, without the prior written consent of the Agent (acting
on the instructions of the Majority Lenders), make any loans or grant any
credit (save for intra-group cashflows or normal trade credit in the ordinary
course of business) to any person or agree to do so; 

	
 

	
 

	
 

	
8.3.10

	
 

	
Sureties: and will procure that no other
Security Party will, without the prior written consent of the Agent (acting
on the instructions of the Majority Lenders), permit any Indebtedness of any
Security Party to any person to be guaranteed by any person (save, in the case
of each Owner, for guarantees or indemnities from time to time required in
the ordinary course by any protection and indemnity or war risks association
with which its Ship is entered, guarantees required to procure the release of
its Ship from any arrest, detention, attachment or levy or guarantees or
undertakings required for the salvage of its Ship or guarantees or
undertakings required in the ordinary course of business in relation to the
Ships); 

	
 

	
 

	
 

	
8.3.11

	
 

	
Dividends - Share capital and distribution: and
will procure that no other Security Party will, without the prior written
consent of the Agent (acting on the instructions of the Majority Lenders),
purchase or otherwise acquire for value any shares of its capital or, declare
or pay any dividends or distribute any of its present or future assets,
undertakings, rights or revenues to any of its shareholders, provided
however that the Borrower and the Owners shall be entitled to declare and
pay dividends or other distributions upon any of the issued shares without
the prior written consent of the Lenders, subject to (a) no Event of Default
having occurred and being continuing, and (b) the Total Debt does not exceed
70% of the aggregate of the Market Value of all the vessels of the Group
(determined as per clause 8.2.3 or clause 8.2.4 as the case may be) and provided
further that, in relation to the Borrower only, the Agent’s consent for
the purchase 

44

	
 

	
 

	
 

	
 

	
 

	
 

	
or otherwise acquisition for value of any shares of its capital shall
not be required so long as this does not result in a breach of its financial
covenants under clause 8.6; and 

	
 

	
 

	
 

	
 

	
8.3.12

	
 

	
Shareholdings: after the listing of the
Borrower in the New York Stock Exchange or NASDAQ permit any change in the
legal and/or ultimate beneficial ownership of the Borrower or the Corporate
Guarantors from that specified in clause 7.1.10, which may result to the
Vasileios Konstantakopoulos family’s direct or indirect holding in the
Borrower falling to less than 40% of the total issued share capital of the Borrower
provided, always, that prior to the listing of the Borrower in the New
York Stock Exchange or NASDAQ no change shall be made without the Lenders
prior consent in the ultimate beneficial ownership of the Borrower or the
Corporate Guarantors from that specified in clause 7.1.10. 

	
 

	
 

	
 

	
 

	
8.4

	
 

	
Positive undertakings 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrower hereby undertakes and agrees with each Creditor that it
will: 

	
 

	
 

	
 

	
 

	
8.4.1

	
 

	
Conveyance on default: where any Ship is (or
is to be) sold in exercise of any power conferred on the Security Agent or
any other Creditor, execute and procure that the Owner thereof shall execute,
forthwith upon request by the Agent, such form of conveyance of such Ship as
the Agent may require; and 

	
 

	
 

	
 

	
 

	
8.4.2

	
 

	
Mortgage: on the Drawdown Date of the
relevant Advance, procure that the respective Owner shall execute, and
procure the registration of, the relevant Mortgage under the laws and flag of
the relevant Flag State on its Ship. 

	
 

	
 

	
 

	
 

	
8.5

	
 

	
Negative undertaking in relation to Ships 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrower hereby further undertakes and agrees with each Creditor
that it will not and will procure that none of the Owners will let or agree
to let any Ship: 

	
 

	
 

	
 

	
 

	
8.5.1

	
 

	
without the prior written consent of the Agent acting on the
instructions of the Majority Lenders (which consent the Majority Lenders
shall have full liberty to withhold) and then, if such consent is given, only
subject to such conditions as the Agent (acting on the instructions of the
Majority Lenders) may impose, on demise charter for any period; or 

	
 

	
 

	
 

	
 

	
8.5.2

	
 

	
without the prior written consent of the Agent acting on the
instructions of the Majority Lenders (which consent shall not be unreasonably
withheld) on terms whereby more than two (2) months’ hire (or the equivalent)
is payable in advance. 

	
 

	
 

	
 

	
 

	
8.6

	
 

	
Financial Covenants 

	
 

	
 

	
 

	
 

	
8.6.1

	
 

	
The Borrower shall ensure that, at all times while compliance with
the Financial Covenants is determined in accordance with clause 8.6.2, its
financial condition on a consolidated basis and as evidenced by the most
recent annual audited Accounting Information, shall be such that: 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
the ratio of Total Liabilities (after deducting all Cash and Cash
Equivalents) to Market Value Adjusted Total Assets (after deducting all Cash
and Cash Equivalents) shall not exceed 0.75:1; 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
the ratio of EBITDA over Net Interest Expense shall be equal to or
higher than 2.5:1; 

45

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (c)

	
the aggregate amount of all Cash and Cash Equivalents shall not be
less than the greater of (i) $30,000,000 (Thirty Million Dollars) or (ii) 3%
of the Total Debt, provided, however, that a minimum cash amount equal to 3%
of the Loan outstanding shall be maintained in accounts of the Borrower with
the Arrangers (pro rata to their respective Commitments); and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (d)

	
the Market Value Adjusted Net Worth shall at all times exceed
$500,000,000 (Five hundred million Dollars). 

	
 

	
 

	
 

	
 

	
 

	
8.6.2

	
 

	
The expressions used in this clause 8.6 shall be construed in
accordance with law and US-GAAP as used in the Accounting Information, and
for the purposes of this Agreement: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
 “Accounting Information” means
the annual audited consolidated financial statements of the Borrower and its
Subsidiaries (including the Owners) and the interim semi-annual unaudited
financial statements of the Borrower and its Subsidiaries (including the
Owners), to be provided by the Borrower to the Agent in accordance with
clause 8.1.5; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
 “Accounting Period” means
each consecutive period of twelve (12) months falling during the Security
Period for which annually Accounting Information is required to be delivered
pursuant to clause 8.1.5; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (c)

	
 “Cash and Cash Equivalents”
means the aggregate of: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (i)

	
the amount of freely available credit balances on any deposit or current
account; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (ii)

	
the market value of transferable certificates of deposit in a freely
convertible currency acceptable to the Majority Lenders issued by a prime
international bank; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (iii)

	
the market value of equity securities (if and to the extent that the
Majority Lenders are satisfied that such equity securities are readily
saleable for cash and that there is a ready market therefor) and investment
grade debt securities which are publicly traded on a major stock exchange or
investment market (valued at market value as at any applicable date of
determination); 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (iv)

	
in each case owned free of any Security Interest (other than a
Security Interest in favour of the Security Agent) by the Borrower or any of
its Subsidiaries where: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
the market value of any asset specified in paragraph (b) and (c)
shall be the bid price quoted for it on the relevant calculation date by the
Agent; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
the amount or value of any asset denominated in a currency other than
Dollars shall be converted into Dollars using the Agent’s spot rate for the
purchase of Dollars with that currency on the relevant calculation date; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (d)

	
 “EBITDA” means, in
respect of an Accounting Period, the aggregate amount of consolidated profits
of the Group, after adding back interest, taxes, depreciation and
amortization; 

46

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (e)

	
 “Fleet Vessels” means,
together, all of the vessels from time to time owned or leased by members of
the Group which, at the relevant time, are included within the Total Assets
of the Group in the balance sheet of the Accounting Information; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (f)

	
 “Market Value” means,
in respect of each Fleet Vessel, the market value thereof determined from
time to time in accordance with clause 8.2.3 (or as the case may be clause
8.2.4) and in respect of newbuldings under construction the advances paid
adjusted for the difference between the contract price and market value of
such newbuldings (such market value to be determined in accordance with
clause 8.2.3 or, as the case may be, 8.2.4); 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (g)

	
 “Market Value Adjusted Net Worth” means,
in respect of an Accounting Period, the amount by which the Market Value
Adjusted Total Assets exceed the Total Liabilities; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (h)

	
 “Market Value Adjusted Total Assets” means,
at any time, the Total Assets adjusted to reflect the Market Value of all
Fleet Vessels (by substituting the value of each Fleet Vessel as specified in
the Applicable Accounts with the Market Value of that Fleet Vessel as at the
relevant Compliance Date); 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (i)

	
 “Net Interest Expenses” means,
in respect of an Accounting Period, the aggregate of all interest, commitment
and other fees, commissions, discounts and other costs, charges or expenses
accruing due from all the members the Group during that accounting period
less interest income received, determined on a consolidated basis in
accordance with US-GAAP and as shown in the consolidated statements of income
for the Group in the Accounting Information; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (j)

	
 “Total Assets” means,
in respect of an Accounting Period, the aggregate value of all assets of the
Group included in the Accounting Information as “current assets” and the value of all investments and all
other tangible and intangible assets of the Group properly included in the
Accounting Information as “fixed assets” in
accordance with US-GAAP; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (k)

	
 “Total Debt” means,
in respect of an Accounting Period, the aggregate on a consolidated basis of
the Group of all short term interest bearing bank debt included in the
financial statements of the Group under current liabilities plus the long
term interest bearing bank debt; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (l)

	
 “Total Liabilities” means,
in respect of an Accounting Period, Total Assets less the aggregate of value
of the stockholders’ equity (including minority interests and provisions) of
the Group as shown in the relevant Accounting Information, 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Provided always that for the calculation of
the market value of assets referred to in clause 8.6.1, the valuations
obtained as per clause 8.2.3 or, as the case may be, 8.2.4 and in respect of
newbuldings under construction the advances paid adjusted for the difference
between the contract price and Market Value of such newbuldings (such Market
Value to be determined in accordance with clause 8.2.3 or, as the case may
be, 8.2.4) will be utilized. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
For the avoidance of doubt, it is hereby clarified and agreed, that
in any conflict between definitions defined in this clause and definitions of
the same terms under US-GAAP or law, the definitions set in this clause will
prevail. 

47

	
 

	
 

	
 

	
8.6.3

	
 

	
Any changes in the accounting principles for the valuation of the
assets of the Borrower must be approved beforehand by the Lenders for the
purposes of the financial ratios contained in this clause 8.6. 

	
 

	
 

	
 

	
8.6.4

	
 

	
Compliance with the undertakings contained in clause 8.6.1 shall be
determined firstly at the end of the first semester of the year 2009 on the
basis of the unaudited (audited if available) interim consolidated financial statements to
be provided1by the Borrower to the Agent as per clause 8.1.5(i) and
thereafter annually starting with the financial year ending 31st
December, 2009. 

	
 

	
 

	
 

	
8.6.5

	
 

	
The Borrower shall provide together with the financial statements and
the Compliance Certificate as per clause 8.1.5 an annual valuation of the
Fleet Vessels, such valuation to be made as per clause 8.2.3 or clause 8.2.4
(as the case may be) at the Borrower’s cost. 

	
 

	
 

	
 

	
8.6.6

	
 

	
The Borrower shall ensure that after the listing of the Borrower in
the New York Stock Exchange or NASDAQ and throughout the remainder of the
Security Period at least 40% of the total issued share capital of the
Borrower shall be directly or indirectly held by members of the Vasileios
Konstantakopoulos family. 

	
 

	
 

	
 

	
8.7

	
 

	
Hedging of interest rate risks 

	
 

	
 

	
 

	
 

	
 

	
The Borrower may, from time to time, enter into Transactions with a
Swap Bank for the purpose of hedging all or the part of the interest rate
risk (for Interest Periods longer than 12 months) under this Agreement
throughout the Security Period, in the amounts set out in schedule 6.

	
 

	
 

	
 

	
9

	
 

	
CONDITIONS

	
 

	
 

	
 

	
9.1

	
 

	
Documents and evidence 

	
 

	
 

	
 

	
9.1.1

	
 

	
Commitments: The
obligation of each Lender to make its Commitment available shall be subject
to the condition that the Agent or its duly authorised representative shall
have received and notified the Lenders for such receipt, not later than two
(2) Banking Days before the date of this Agreement, the documents and
evidence specified in Part 1 of schedule 3, in form and substance satisfactory
to the Lenders. 

	
 

	
 

	
 

	
9.1.2

	
 

	
Term Advance: The obligation of the Lenders
to make available a Term Advance shall be subject to the condition that the
Agent or its duly authorised representative shall have received and notified
the Lenders for such receipt, on or prior to the drawdown of such Term
Advance, the documents and evidence specified in Part 2 of schedule 3, in
form and substance satisfactory to the Lenders. 

	
 

	
 

	
 

	
9.1.3

	
 

	
Revolving Advance: The obligation of the
Lenders to make available any Revolving Advance shall be subject to the
condition that the Agent or its duly authorised representative shall have
received and notified the Lenders for such receipt, on or prior to the
drawdown of such Term Advance, the documents and evidence specified in Part 3
of schedule 3, in form and substance satisfactory to the Lenders. 

48

	
 

	
 

	
 

	
9.2

	
 

	
General conditions precedent 

	
 

	
 

	
 

	
 

	
 

	
The obligation of the Lenders to make any Advance available shall be
subject to the further conditions that, at the time of the giving of the
Drawdown Notice for such Advance, and at the time of the making of such
Advance: 

	
 

	
 

	
 

	
9.2.1

	
 

	
the representations and warranties contained in (a) clauses 7.1, 7.2
and 7.3(b) of this Agreement and (b) clause 4 of each 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

	
 

	
the Agent shall be satisfied that there has been no change in the
ownership, management, operations and/or adverse change financial condition
of any Security Party which (change) might, in the reasonable opinion of the
Agent (acting on the instructions of the Majority Lenders), be detrimental to
the interests of the Creditors; and 

	
 

	
 

	
 

	
9.2.3

	
 

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

	
 

	
 

	
 

	
9.3

	
 

	
Waiver of conditions precedent 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
9.4

	
 

	
Further conditions precedent 

	
 

	
 

	
 

	
 

	
 

	
Not later than two (2) Banking Days prior to each Drawdown Date and
not later than five (5) Banking Days prior to each Interest Payment Date, the
Agent (acting on the instructions of the Majority Lenders) may request and
the Borrower shall, not later than ten (10) Banking Days after such date,
deliver to the Agent on such request further relevant certificates and/or
favourable opinions as to any or all of the matters which are the subject of
clauses 7, 8, 9 and 10. 

	
 

	
 

	
 

	
10

	
 

	
EVENTS OF DEFAULT

	
 

	
 

	
 

	
10.1

	
 

	
Events 

	
 

	
 

	
 

	
 

	
 

	
There shall be an Event of Default if:

	
 

	
 

	
 

	
10.1.1

	
 

	
Non-payment: any Security Party fails to pay
any sum payable by it under any of the Security Documents at the time, in the
currency and in the manner stipulated in the Security Documents (and so that,
for this purpose, (a) in case any sums are not paid by reason of a problem in
the banking payment system at the stipulated time for payment thereof, such
sums shall be treated as having been paid at the stipulated time if paid
within three (3) Banking Days of the due payment date therefore and (b) sums
payable on demand shall be treated as having been paid at the stipulated time
if paid within three (3) Banking Days of demand); or 

	
 

	
 

	
 

	
10.1.2

	
 

	
Breach of Insurance and certain other obligations:
the Borrower or the Owners or the Managers (as the context may require) or
any other person fails to obtain and/or maintain the Insurances (as defined
in, and in accordance with the requirements of, the Security Documents) or if
any insurer in respect of such Insurances cancels the Insurances or disclaims
liability by reason, in either case, of misstatement in any proposal for the
Insurances or for any other failure or default 

49

	
 

	
 

	
 

	
 

	
 

	
on the part of the Borrower or any other person or the Borrower
commits any breach of, or omits to observe any of the obligations or
undertakings expressed to be assumed by it under, any of clauses 8.2.1,
8.2.9, 8.3, 8.4, 8.5 or 8.6; or 

	
 

	
 

	
 

	
10.1.3

	
 

	
Breach of other obligations: any Security
Party commits any breach of or omits to observe any of its obligations or
undertakings expressed to be assumed by it under any of the Security
Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above)
and, in respect of any such breach or omission which in the opinion of the
Agent (following consultation with the Lenders) is capable of remedy, such
action as the Agent (acting on the instructions of the Majority Lenders) may
require shall not have been taken within ten (10) days of the Agent notifying
the relevant Security Party of such default and of such required action; or 

	
 

	
 

	
 

	
10.1.4

	
 

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

	
 

	
 

	
 

	
10.1.5

	
 

	
Cross-default: any Borrowed Money (relating
to an aggregate amount over US$3,000,000) of any member of the Group or any
other Security Party is not paid when due or any Borrowed Money (relating to
an aggregate amount over US$3,000,000 of any member of the Group or any other
Security Party becomes (whether by declaration or automatically in accordance
with the relevant agreement or instrument constituting the same) due and
payable prior to the date when it would otherwise have become due (unless as
a result of the exercise by the relevant member of the Group or the relevant
Security Party of a voluntary right of prepayment), or any creditor of any
member of the Group or any other Security Party becomes entitled to declare
any such Indebtedness due and payable or any facility or commitment available
to any member of the Group or any other Security Party relating to Borrowed
Money (of an aggregate amount over US$3,000,000)is withdrawn, suspended or
cancelled by reason of any default (however described) of the person
concerned unless the relevant member of the Group or the relevant Security
Party shall have satisfied the Agent that such withdrawal, suspension or
cancellation will not affect or prejudice in a material (in the reasonable
opinion of the Majority Lenders) way the relevant member of the Group’s or
the relevant Security Party’s ability to pay its debts as they fall due and
fund its commitments, or any guarantee (relating to an aggregate amount over
US$3,000,000) given by any member of the Group or any other Security Party in
respect of Borrowed Money is not honoured when due and called upon (unless
the Agent is satisfied that the relevant claim under such guarantee is being
contested in good faith and by the appropriate steps); or 

	
 

	
 

	
 

	
10.1.6

	
 

	
Legal process: any final judgment or order
(relating to an aggregate amount over US$5,000,000) made against any member
of the Group or any other Security Party is not stayed or complied with
within thirty (30) 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 substantial part of the undertakings, assets,
rights or revenues of any member of the Group or any other Security Party and
is not discharged within thirty (30) days; or 

	
 

	
 

	
 

	
10.1.7

	
 

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

	
 

	
 

	
 

50

	
 

	
 

	
 

	
10.1.8

	
 

	
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, save in relation to the
Borrower only, so long as this does not result in a breach of its financial
covenants under clause 8.6; or 

	
 

	
 

	
 

	
10.1.9

	
 

	
Winding up: any corporate action, legal
proceedings or other procedures or steps are taken for the purpose of
winding-up any member of any Security Party or an order is made, (unless the
Agent acting on the instructions of the Majority Lenders is satisfied that
the relevant legal proceedings are being contested in good faith and by the
appropriate steps) or resolution passed for the winding up of any member of
the Group or any other Security Party or a notice is issued convening a
meeting for the purpose of passing any such resolution; or 

	
 

	
 

	
 

	
10.1.10

	
 

	
Administration: any petition is presented,
notice given or other step is taken for the purpose of the appointment of an
administrator of any Security Party or the Agent (acting on the instructions
of the Majority Lenders) believes that any such petition or other step is
imminent or an administration order is made in relation to any Security
Party, (unless the Agent (acting on the instructions of the Majority Lenders)
is satisfied that the relevant petition is being contested in good faith and
by the appropriate steps); or 

	
 

	
 

	
 

	
10.1.11

	
 

	
Appointment of receivers and managers: any
administrative or other receiver is appointed of any Security Party or any
substantial 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
member of the Group or any other Security Party; or 

	
 

	
 

	
 

	
10.1.12

	
 

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

	
 

	
 

	
 

	
10.1.13

	
 

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

	
 

	
 

	
 

	
10.1.14

	
 

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

	
 

	
 

	
 

	
10.1.15

	
 

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

	
 

	
 

	
 

	
10.1.16

	
 

	
Invalidity: any of the Security Documents
shall at any time and for any reason become invalid or unenforceable or
otherwise cease to remain in full force and effect, or if the validity or
enforceability of any of the Security Documents shall at any time and for any
reason be contested by any Security Party which is a party thereto, or if
such Security Party shall deny that it has any, or any further, liability
thereunder, unless the relevant Security Party takes such action as shall be
required by the Agent (acting on the instructions of the Majority Lenders) to

51

	
 

	
 

	
 

	
 

	
 

	
 

	
remedy such invalidity or such unenforceability and succeeds in doing
so within the period determined by the Agent (acting on the instructions of
the Majority Lenders); or 

	
 

	
 

	
 

	
 

	
10.1.17

	
 

	
Unlawfulness: it becomes unlawful in or
impossible: 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
for the Borrower or any other Security Party to discharge any
liability under a Security Document or to comply with any other obligation
which the Majority Lenders consider material under a Security Document; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (b)

	
for a Creditor to exercise or enforce any right under, or to enforce
any Encumbrance created by, a Security Document; or 

	
 

	
 

	
 

	
 

	
10.1.18

	
 

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

	
 

	
 

	
 

	
 

	
10.1.19

	
 

	
Encumbrances enforceable: any Encumbrance in
respect of any of the property (or substantial part thereof) which is the
subject of any of the Security Documents becomes enforceable; or 

	
 

	
 

	
 

	
 

	
10.1.20

	
 

	
Material adverse change: there occurs, in
the reasonable opinion of the Agent (acting on the instructions of the
Majority Lenders), a material adverse change in the financial condition of
any Security Party by reference to the financial position of such Security
Party as described by the Borrower or any other Security Party to the Agent
in the negotiation of this Agreement, provided that such material
adverse change affects in the reasonable opinion of the Agent (acting on the
instructions of the Majority Lenders) the ability of the Borrower to perform
all or any of the obligations expressed to be assumed by it under, or
otherwise to comply with the terms of, this Agreement; or 

	
 

	
 

	
 

	
 

	
10.1.21

	
 

	
Arrest: any Mortgaged 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 Owner the relevant Owner
and fails to procure the release of such Mortgaged Ship within a period of
thirty (30) days thereafter; or 

	
 

	
 

	
 

	
 

	
10.1.22

	
 

	
Registration: the registration of any
Mortgaged Ship under the laws and flag of the relevant Flag State is
cancelled or terminated without the prior written consent of the Majority
Lenders or the registration of any Mortgaged Ship is not renewed at least
fifteen (15) days prior to the expiry of such registration; or 

	
 

	
 

	
 

	
 

	
10.1.23

	
 

	
Unrest: the Flag State of any Mortgaged Ship
becomes involved in hostilities or civil war or there is a seizure of power
in such Flag State by unconstitutional means, which (in the reasonable
opinion of the Majority Lenders) is likely to adversely and materially (in
the reasonable opinion of the Majority Lenders) affect the security created
by the Security Documents relative to such Ship and such Ship is not
reregistered under a flag acceptable to the Agent (acting on the instructions
of the Majority Lenders) within thirty (30) days period after notice of such
event has been given to the Borrower; or 

	
 

	
 

	
 

	
 

	
10.1.24

	
 

	
Environment: any Owner and/or any Manager in
relation to the Mortgaged Ships only and/or any of their respective
Environmental Affiliates fails to comply with any Environmental Law or any
Environmental Approval or any Mortgaged Ship is involved in any incident
which gives rise or may give rise to an Environmental Claim, which failure
(in the reasonable opinion of the 

52

	
 

	
 

	
 

	
 

	
 

	
 

	
Majority Lenders) is likely to adversely and materially (in the
reasonable opinion of the Majority Lenders) affect the security created by
the Security Documents; or 

	
 

	
 

	
 

	
 

	
10.1.25

	
 

	
P&I: any Owner or any Manager or any
other person fails or omits to comply with any requirements of the protection
and indemnity association or other insurer with which the relevant Mortgaged
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 the relevant Mortgaged
Ship operates or trades) is or may be liable to cancellation, qualification
or exclusion at any time; or 

	
 

	
 

	
 

	
 

	
10.1.26

	
 

	
Shareholdings: there is any change in the
legal and/or ultimate beneficial ownership of any of the shares of the Borrower
or the Corporate Guarantors from that existing on the date of this Agreement
as set out in clause 7.1.10 save for the necessary changes resulting from (a)
the creation of the new corporate structure of the Group (provided that the
Vasileios Konstantakopoulos family’s holding (directly or indirectly) in the
Borrower remains to 100% of the total issued share capital of the Borrower)
and (b) the listing of the Borrower on the New York Stock Exchange or NASDAQ
and which change, after the listing of the Borrower in the New York Stock
Exchange or NASDAQ may result to the Vasileios Konstantakopoulos family’s
(direct or indirect) holding in the Borrower falling to less than 40% of the
total issued share capital of the Borrower; or 

	
 

	
 

	
 

	
 

	
10.1.27

	
 

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

	
 

	
 

	
 

	
 

	
10.1.28

	
 

	
Licenses, etc: any license, authorisation,
consent or approval at any time necessary to enable any Security Party to
comply with its obligations under the Security Documents 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
continuation thereof, unlawful or would prevent the performance by any
Security Party of any term of any of the Security Documents; or 

	
 

	
 

	
 

	
 

	
10.1.29

	
 

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

	
 

	
 

	
 

	
 

	
10.2

	
 

	
Actions following an Event of Default

	
 

	
 

	
 

	
 

	
 

	
 

	
On, or at any time after, the occurrence of an Event of Default,
which is continuing: 

	
 

	
 

	
 

	
 

	
10.2.1

	
 

	
the Agent may, and if so requested by the Majority Lenders shall,
without prejudice to any other rights of the Lenders, by notice to the
Borrower declare that: 

	
 

	
 

	
 

	
 

	
 

	
 

	
  (a)

	
the Commitments and all other obligations of each Lender to the
Borrower under this Agreement are terminated, whereupon the Total Commitment
shall be reduced to zero forthwith; and/or 

53

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 take any other action which, as a result of the Event of Default or
 any notice served under paragraph (a) or (b) the Agent and/or the Lenders are
 entitled to take under any Security Document or any applicable law; and/or 

 
	
  

 	
  

 	
  

 	
  

 
	
 10.2.2

 	
  

 	
 the Security Agent may, and if so instructed by the Agent, acting
 with the authorisation of the Majority Lenders, the Security Agent shall take
 any action (other than termination of a Transaction under a Master Agreement)
 which, as a result of the Event of Default or any notice served under clause
 10.2.1, the Security Agent, the Agent and/or the Lenders and/or the Swap
 Banks are entitled to take under any Security Document or any applicable law.
 

 
	
  

 	
  

 	
  

 
	
 10.3

 	
  

 	
 Acceleration 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 On the service of a notice under clause 10.2.1, the Loan, all accrued
 interest and all other amounts accrued or owing from the Borrower or any
 Security Party under this Agreement and every other Security Document shall
 become immediately due and payable or, as the case may be, payable on demand
 together with the Swap Exposure of each Swap Bank which has terminated any
 existing Transactions under the Master Agreement to which that Swap Bank is a
 party.

 
	
  

 	
  

 	
  

 
	
 10.4

 	
  

 	
 Demand basis 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If, pursuant to clause 10.2.1(b), the Agent declares the Loan to be
 due and payable on demand, the Agent may (and if so instructed by the
 Majority Lenders shall) by written notice to the Borrower (a) call for
 repayment of the Loan on such date as may be specified whereupon the Loan
 shall become due and payable on the date so specified together with all
 interest accrued and all other sums payable under this Agreement or (b)
 withdraw such declaration with effect from the date specified in such notice.

 
	
  

 	
  

 	
  

 
	
 10.5

 	
  

 	
 Proof of default 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 It is agreed that (i) the non-payment of any sum of money in time
 will be proved conclusively by mere passage of time and (ii) the occurrence
 of this (non payment) shall be proved conclusively by a mere written
 statement of the Agent (save for manifest error).

 
	
  

 	
  

 	
  

 
	
 10.6

 	
  

 	
 Creditor Party rights unimpaired 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Nothing in this clause shall be taken to impair or restrict the
 exercise of any right given to individual Lenders or each Swap Bank under a
 Security Document, Master Agreement or the general law; and, in particular,
 this clause is without prejudice to clauses 2.8 and 2.9.

 
	
  

 	
  

 	
  

 
	
 10.7

 	
  

 	
 Exclusion of Lender’s liability 

 
	
  

 	
  

 	
  

 
	
 10.7.1

 	
  

 	
 Neither any Lender nor any receiver or manager appointed by any
 Lender, shall have any liability to the Borrower or another Security Party: 

 

54

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

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

 
	
  

 	
  

 	
  

 	
  

 
	
 11

 	
  

 	
 INDEMNITIES 

 
	
  

 	
  

 	
  

 
	
 11.1

 	
  

 	
 Miscellaneous indemnities 

 
	
  

 	
  

 	
  

 
	
 11.1.1

 	
  

 	
 The Borrower 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: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 the occurrence of any other Event of Default; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 any prepayment of the Loan or part thereof being made under clauses
 4.2, 4.3, 4.4, 8.2.1(a), 12.1 or 14.3 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 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 11.2

 	
  

 	
 Currency indenmity 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If any sum due from the Borrower 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 Borrower, (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 Borrower shall indemnify and hold harmless each
 Creditor from and against any loss suffered as a result of any difference
 between (i) the rate of exchange used for such purpose to convert the sum in
 question from the first currency into the second currency and

 

55

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (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
 Borrower 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. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the avoidance of doubt, clause 11.2 does not apply in respect of
 sums due from the Borrower to a Swap Bank under or in connection with the
 Master Agreement to which that Swap Bank is a party as to which sums the
 relevant provisions of that Master Agreement shall apply.

 
	
  

 	
  

 	
  

 
	
 11.3

 	
  

 	
 Environmental indemnity 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower 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.

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 11.4

 	
  

 	
 Central Bank or European Central Bank
 reserve requirements indemnity 

 
	
  

 	
  

 	
  

 
	
 12

 	
  

 	
 UNLAWFULNESS AND INCREASED COSTS 

 
	
  

 	
  

 	
  

 
	
 12.1

 	
  

 	
 Unlawfulness 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If any change in, or introduction of, any law, regulation or regulatory
 requirement or any request of any central bank, monetary, regulatory or other
 authority or any order of any court renders it unlawful or contrary to any
 such regulation, requirement, request or order for any Lender to make
 available its Commitment to the Term Loan Facility and/or the Revolving
 Facility (or any part thereof) or to maintain or fund its Commitment to the
 Loan, notice shall be given promptly by the Agent to the Borrower whereupon
 (a) such Lender’s Commitment shall be reduced to zero and (b), if the Term
 Loan Facility and/or the Revolving Facility or any part thereof has been made
 available by the Lenders to the Borrower, the Borrower shall be obliged to
 prepay

 

56

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 such Lender’s Contribution 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 Borrower under this Agreement.

 
	
  

 	
  

 	
  

 
	
 12.2

 	
  

 	
 Increased costs 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 12.2.1

 	
  

 	
 subject any Lender to Taxes or change the basis of Taxation of any
 Lender 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
 Lender 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 Lender or
 its holding company in making or keeping such Lender’s Commitment available
 or maintaining or funding all or part of such Lender’s Contribution; and/or 

 
	
  

 	
  

 	
  

 
	
 12.2.3

 	
  

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

 
	
  

 	
  

 	
  

 
	
 12.2.4

 	
  

 	
 reduce any Lender’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 Lender’s obligations under any of the
 Security Documents; and/or 

 
	
  

 	
  

 	
  

 
	
 12.2.5

 	
  

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

 
	
  

 	
  

 	
  

 
	
 12.2.6

 	
  

 	
 require any Lender 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):

 

57

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 such Lender shall notify the Borrower in writing of such event
 promptly upon its becoming aware of the same; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 12.3

 	
  

 	
 Exception 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 13

 	
  

 	
 SECURITIES, APPLICATION, SET-OFF AND PRO-RATA
 PAYMENTS 

 
	
  

 	
  

 	
  

 
	
 13.1

 	
  

 	
 Securities 

 
	
  

 	
  

 	
  

 
	
 13.1.1

 	
  

 	
 As security for the due and punctual repayment of the Loan and
 payment of interest thereon as provided in this Agreement and of all other
 Outstanding Indebtedness, the Borrower shall ensure and procure that the
 following Security Documents are duly executed and, where required,
 registered in favour of the Security Agent or the Lenders or the relevant
 Swap Bank (as the case may be) in form and substance satisfactory to the
 Agent (acting on the instructions of the Majority Lenders) at the time
 specified herein or otherwise as required by the Agent (acting on the
 instructions of the Majority Lenders) and ensure that such security consists
 of: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 the Master Agreement Security Deeds;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 the Mortgages;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 the General Assignments; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

 	
 the Personal Guarantees (to be released as provided in clause 17.4); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (e)

 	
 the Corporate Guarantees (the Guarantee of Costamare (to be released
 as provided in clause 17.4); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (f)

 	
 the Accounts Pledge Agreements; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (g)

 	
 any Charterparty Assignments. 

 
	
  

 	
  

 	
  

 	
  

 
	
 13.2

 	
  

 	
 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 (a)
 in accordance with the provisions of this

 

58

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 clause 13.2 or (b) in a manner determined in the Security Agent’s or
 (as the case may be) the Agent’s discretion, shall be applied in the
 following manner:

 
	
  

 	
  

 	
  

 
	
 13.2.1

 	
  

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

 
	
  

 	
  

 	
  

 
	
 13.2.2

 	
  

 	
 secondly, in or towards payment of any
 default interest under clause 3.4; 

 
	
  

 	
  

 	
  

 
	
 13.2.3

 	
  

 	
 thirdly, in or towards payment of any
 arrears of interest (other than default interest) due in respect of the Loan
 or any part thereof; 

 
	
  

 	
  

 	
  

 
	
 13.2.4

 	
  

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

 
	
  

 	
  

 	
  

 
	
 13.2.5

 	
  

 	
 fifthly, in or towards payment to any Lender
 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; 

 
	
  

 	
  

 	
  

 
	
 13.2.6

 	
  

 	
 sixthly, in or towards payment to any
 Creditor of any other sums owing to it under any of the Security Documents; 

 
	
  

 	
  

 	
  

 
	
 13.2.7

 	
  

 	
 seventhly, in or towards pro-rata payment to
 the Swap Banks of any sum owing to them under the Master Agreements; and 

 
	
  

 	
  

 	
  

 
	
 13.2.8

 	
  

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

 
	
  

 	
  

 	
  

 
	
 13.3

 	
  

 	
 Set-off 

 
	
  

 	
  

 	
  

 
	
 13.3.1

 	
  

 	
 Right of Set-off: The Borrower authorises
 each Creditor (without prejudice to any of such Creditor’s rights at law, in
 equity or otherwise), at any time after an Event of Default has occurred and
 is continuing and without notice to the Borrower, to apply any credit balance
 to which the Borrower is then entitled standing upon any account of the
 Borrower with any branch of such Creditor in or towards satisfaction of any
 sum due and payable from the Borrower to such Creditor under any of the
 Security Documents. For this purpose, each Creditor is authorised to purchase
 with the moneys standing to the credit of such account such other currencies
 as may be necessary to effect such application. 

 
	
  

 	
  

 	
  

 
	
 13.3.2

 	
  

 	
 No Creditor shall be obliged to exercise any right given to it by
 this clause 13.3. Each Creditor shall notify the Borrower 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. 

 
	
  

 	
  

 	
  

 
	
 13.3.3

 	
  

 	
 Nothing in this clause 13.3 shall be effective to create a charge or
 other security interest. 

 
	
  

 	
  

 	
  

 
	
 13.3.4

 	
  

 	
 Master Agreement rights: The rights
 conferred on each Swap Bank by this clause 13 shall be in addition to, and
 without prejudice to or limitation of, the rights of netting and set off
 conferred on each Swap Bank by the relevant Master Agreement. The Borrower
 acknowledges that each Swap Bank shall be under no obligation to make any
 payment to the Borrower under the relevant Master Agreement if, at the time
 that payment becomes due, an Event of Default shall 

 

59

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 have occurred and is continuing or an event of Termination (as
 defined in such Master Agreement) shall have occurred.

 
	
  

 	
  

 	
  

 
	
 13.4

 	
  

 	
 Pro rata payments 

 
	
  

 	
  

 	
  

 
	
 13.4.1

 	
  

 	
 If at any time any Lender (the “Recovering
 Bank”) receives or
 recovers any amount owing to it by the Borrower under this Agreement by
 direct payment, set-off or in any manner other than by payment through the
 Agent pursuant to clauses 6.1 or 6.9 (not being a payment received from a
 Transferee Lender or a sub-participant in such Lender’s Contribution or
 any other payment of an amount due to the Recovering Lender for its sole account
 pursuant to clauses 3.6, 5, 6.6, 11.1, 11.2, 12.1, or 12.2), the Recovering
 Lender 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 Lender would have received if the Relevant Receipt had been
 received by the Agent and distributed pursuant to clause 6.1 or 6.9 (as the
 case may be) then: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 within two (2) Banking Days of demand by the Agent, the Recovering
 Lender 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
 Lender as if it were a payment made by the Borrower and shall distribute the
 same to the Lenders (other than the Recovering Bank) in accordance with
 clause 6.9; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 as between the Borrower and the Recovering Lender the excess amount
 so redistributed shall be treated as not having been paid but the obligations
 of the Borrower to the other Lenders shall, to the extent of the amount so
 re-distributed to them, be treated as discharged. 

 
	
  

 	
  

 	
  

 	
  

 
	
 13.4.2

 	
  

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

 
	
  

 	
  

 	
  

 
	
 13.4.3

 	
  

 	
 Each Lender shall on request supply to the Agent such information as
 the Agent may from time to time request for the purposes of this clause 13.4.
 

 
	
  

 	
  

 	
  

 
	
 13.4.4

 	
  

 	
 Notwithstanding the foregoing provisions of this clause 13.4, no
 Recovering Lender 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 Lender are
 instituted by it without prior notice having been given to such party through
 the Agent). 

 
	
  

 	
  

 	
  

 
	
 13.5

 	
  

 	
 No release 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the avoidance of doubt it is hereby declared that failure by any
 Recovering Lender to comply with the provisions of clause 13.4 shall not
 release any other Recovering Lender from any of its obligations or
 liabilities under clause 13.4.

 

60

	
  

 	
  

 	
  

 
	
 13.6

 	
  

 	
 No charge 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The provisions of this clause 13 shall not, and shall not be
 construed so as to, constitute a charge by a Lender over all or any part of a
 sum received or recovered by it in the circumstances mentioned in clause
 13.4.

 
	
  

 	
  

 	
  

 
	
 13.7

 	
  

 	
 Further assurance 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower undertakes 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
 Lender enforceable in accordance with their respective terms and that it
 will, at its expense, execute, sign, perfect and do, and will procure the
 execution, signing, perfecting and doing by each of the other Security
 Parties of, any and every such further assurance, document, act or thing as
 in the reasonable opinion of the Majority Lenders may be necessary or
 desirable for perfecting the security contemplated or constituted by the
 Security Documents.

 
	
  

 	
  

 	
  

 
	
 13.8

 	
  

 	
 Conflicts 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 14

 	
  

 	
 ACCOUNTS 

 
	
  

 	
  

 	
  

 
	
 14.1

 	
  

 	
 General 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower undertakes with each Creditor that it will:

 
	
  

 	
  

 	
  

 
	
 14.1.1

 	
  

 	
 on or before the Drawdown Date of each Advance to be drawn down, open
 or procure to be opened the Operating Account(s) relative to the Ship(s) to
 be financed by such Advance; and 

 
	
  

 	
  

 	
  

 
	
 14.1.2

 	
  

 	
 procure that all moneys payable in respect of the Earnings of each
 Ship to the Owner thereof, unless and until the Agent (acting on the
 instructions of the Majority Lenders) directs to the contrary pursuant to the
 provisions of the relevant Mortgage, be paid to the relevant Operating Account,
 provided however that if any of the moneys paid to any of the
 Operating Accounts are payable in a currency other than Dollars, the Account
 Bank shall (and the Borrower hereby irrevocably instructs the Account Bank
 to) convert such moneys into Dollars at the Account Bank’s spot rate of
 exchange at the relevant time for the purchase of Dollars with such currency
 and the term “spot rate of exchange” shall
 include any premium and costs of exchange payable in connection with the
 purchase of Dollars with such currency. 

 
	
  

 	
  

 	
  

 
	
 14.2

 	
  

 	
 Operating Accounts: withdrawals 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Unless the Agent (acting on the instructions of the Majority Lenders)
 otherwise agrees in writing, none of the Owners shall be entitled to withdraw
 any moneys from its Operating Account at any time from the date of this
 Agreement and so long as any moneys are owing under the Security Documents
 save that, unless and until an Event of Default shall occur and be continuing
 and the Agent (acting on the instructions of the Majority Lenders) shall direct
 to the contrary, each Owner may freely withdraw moneys from the Operating
 Account relative to its Ship.

 

61

	
  

 	
  

 	
  

 
	
 14.3

 	
  

 	
 Application of accounts 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 At any time after the occurrence of an Event of Default which is
 continuing, the Agent may (and on the instructions of the Majority Lenders
 shall), without notice to the Borrower, instruct the Account Bank to apply
 all moneys then standing to the credit of the relevant Account(s) (together
 with interest from time to time accruing or accrued thereon) in or towards
 satisfaction of any sums due to the Creditors or any of them under the
 Security Documents in the manner specified in clause 13.2.

 
	
  

 	
  

 	
  

 
	
 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 Borrower and their respective successors in title.

 
	
  

 	
  

 	
  

 
	
 15.2

 	
  

 	
 No assignment by Borrower 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Borrower may not assign or transfer any of its rights or
 obligations under this Agreement without the prior written consent of the
 Agent and the Security Agent (acting on the instructions of the Lenders).

 
	
  

 	
  

 	
  

 
	
 15.3

 	
  

 	
 Transfers by Lenders 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Any Lender (the “Transferor Lender”)
     may at any time cause all or any part of its rights, benefits and/or obligations
     under this Agreement and the Security Documents to be transferred to any
     other bank or financial institution (a “Transferee Lender”)
     without the prior consent of the Borrower (but after prior consultation
     with the Borrower) and the other Lenders by delivering to the Agent a Transfer
     Certificate duly completed and duly executed by the Transferor Lender and
     the Transferee Lender. No such transfer is binding on, or effective in relation
     to, the Borrower 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 Lender, the Transferee
     Lender and the Agent (on behalf of itself, the Borrower 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 Lender’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 Lender in its capacity as a Lender 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: 

 

62

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 to the extent specified in the Transfer Certificate, the Transferor
 Lender’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 Lender absolutely, free of any defects in the Transferor Lender’s
 title and of any rights or equities which the Borrower had against the Transferor
 Lender; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 the Transferor Lender’s Commitment is discharged to the extent
 specified in the Transfer Certificate; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 the Transferee Lender becomes a Lender with a Contribution and/or a
 Commitment of the amounts specified in the Transfer Certificate; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

 	
 the Transferee Lender becomes bound by all the provisions of this
 Agreement and the Security Documents which are applicable to the Lenders
 generally, including those about pro-rata sharing and the exclusion of
 liability on the part of, and the indemnification of, the other Creditors and
 to the extent that the Transferee Lender becomes bound by those provisions,
 the Transferor Lender ceases to be bound by them; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (e)

 	
 an Advance or part of an Advance which the Transferee Lender 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 Lender, assuming that any defects in the Transferor Lender’s title
 and any rights or equities of any Security Party against the Transferor
 Lender had not existed; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (f)

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

 
	
  

 	
  

 	
  

 	
  

 
	
 15.3.4

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 15.3.5

 	
  

 	
 the Borrower, the Account Bank, the Security Agent, the Arrangers,
 the Swap Banks and the Lenders 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 Borrower, the Transferor Lender and the Transferee Lender. 

 
	
  

 	
  

 	
  

 
	
 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 Lenders holding a Transfer Certificate and the date at
 which the transfer referred to in such Transfer Certificate held by each
 Lender was transferred to such Lender, and the Agent shall make the said
 register available for 

 

63

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 inspection by any Lender or the 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 Lenders from time to
 time and the principal amounts of such Transfer Certificates and may be
 relied upon by the Agent and the other Security Parties for all purposes in
 connection with this Agreement and the Security Documents. 

 
	
  

 	
  

 	
  

 
	
 15.5

 	
  

 	
 Transfer fees and expenses 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If any Lender causes the transfer of all or any part of its rights,
 benefits and/or obligations under the Security Documents, such Lender shall
 pay to the Agent on demand all reasonable costs, fees and expenses
 (including, but not limited to, legal fees, duties and expenses), and all
 value added tax thereon, verified by the Agent as having been incurred in
 connection with such transfer.

 
	
  

 	
  

 	
  

 
	
 15.6

 	
  

 	
 Documenting transfers 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If any Lender 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 Borrower undertakes, immediately on being requested to do so by the
 Agent and at the cost of the Transferor Lender, to enter into, and procure
 that the other Security Parties shall (at the cost of the Transferor Lender)
 enter into, such documents as may be necessary to transfer to the Transferee
 Lender all or the relevant part of such Lender’s interest in the Security
 Documents and all relevant references in this Agreement to such Lender shall
 thereafter be construed as a reference to the Transferor Lender and/or its
 Transferee Lender (as the case may be) to the extent of their respective
 interests.

 
	
  

 	
  

 	
  

 
	
 15.7

 	
  

 	
 Sub-participation 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 A Lender 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 Borrower.

 
	
  

 	
  

 	
  

 
	
 15.8

 	
  

 	
 Lending office 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each Lender shall lend through its office at the address specified in
 schedule 1 or, as the case may be, in any relevant Transfer Certificate or
 through any other office of such Lender selected from time to time by it
 through which such Lender wishes to lend for the purposes of this Agreement.
 If the office through which a Lender is lending is changed pursuant to this
 clause 15.8, such Lender shall notify the Agent promptly of such change and
 the Agent shall notify the Borrower, the Security Agent, the Account Bank and
 the other Lenders.

 
	
  

 	
  

 	
  

 
	
 15.9

 	
  

 	
 Disclosure of information 

 
	
  

 	
  

 	
  

 
	
 15.9.1

 	
  

 	
 A Lender may disclose to a prospective assignee, transferee or to any
 other person who may propose entering into contractual relations with such
 Lender in relation to this Agreement such information about the Borrower
 and/or the other Security Parties as such Lender shall consider appropriate,
 if such Lender fist procures that the relevant prospective assignee,
 substitute or transferee or other person (such person together with any
 prospective assignee, substitute or transferee being hereinafter described as
 the “Prospective Assignee”)
 shall undertake to the Borrower to keep secret and confidential and, not
 without the prior written consent of the 

 

64

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Borrower, disclose to any third party any of the information, reports
 or documents supplied by such Lender provided however that the Prospective
 Assignee shall be entitled to disclose any such information, reports or
 documents in the following situations:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 in relation to any proceedings arising out of this Agreement or the
 other Security Documents to the extent considered necessary by the
 Prospective Assignee to protect its interest; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 pursuant to a court order relating to discovery or otherwise; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 pursuant to any law or regulation or to any fiscal, monetary, tax,
 governmental or other competent authority; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

 	
 to its auditors, legal or other professional advisers. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In addition, the Prospective Assignee shall be entitled to disclose
 or use any such information, reports or documents if the information
 contained therein shall have emanated, in conditions free from
 confidentiality, bona fide from some person other than such Lender.

 
	
  

 	
  

 	
  

 
	
 15.10

 	
  

 	
 No additional costs 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If at the time of, or immediately after, any assignment by a Lender
 of all or any part of its rights or benefits under this Agreement or any
 transfer by a Lender of any part of the rights, benefits and/or obligations
 under this Agreement, or any change in the office through which a Lender
 lends for the purposes of this Agreement, the Borrower would be obliged to
 pay to the Assignee or Transferee or (in the case of a change of lending
 office) such Lender under clauses 6.6 or 12.2 any sum in excess of the sum
 (if any) which it would have been obliged to pay to such Lender under the
 relevant clauses in the absence of such assignment, transfer or change, the
 Borrower shall not be obliged to pay that excess.

 
	
  

 	
  

 	
  

 
	
 16

 	
  

 	
 ARRANGERS, AGENT AND SECURITY AGENT 

 
	
  

 	
  

 	
  

 
	
 16.1

 	
  

 	
 Appointment of the Agent 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each Lender 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 Lenders hereby authorises the Agent:

 
	
  

 	
  

 	
  

 
	
 16.1.1

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.1.2

 	
  

 	
 (whether or not by or through employees or agents) to take such
 action on such Lender’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 Lenders (or as
 otherwise duly authorised) shall be binding on all the Lenders.

 

65

	
  

 	
  

 	
  

 
	
 16.3

 	
  

 	
 Agent’s duties 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Agent shall:

 
	
  

 	
  

 	
  

 
	
 16.3.1

 	
  

 	
 promptly notify each Lender of the contents of each notice,
 certificate or other document received by it, in its capacity as Agent or
 Security Agent for the Lenders, from the Borrower under or pursuant to this
 Agreement and 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 Lenders 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 Lenders, and shall be
 fully protected in so doing; 

 
	
  

 	
  

 	
  

 
	
 16.4.2

 	
  

 	
 unless and until it shall have received directions from the Majority
 Lenders, 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 an Event of Default of which the Agent has actual
 knowledge as it shall deem advisable in the best interests of the Lenders; 

 
	
  

 	
  

 	
  

 
	
 16.4.3

 	
  

 	
 refrain from acting (or authorise the Security Agent to refrain from
 acting) in accordance with any instructions of the Lenders 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 Lender as the person entitled to the benefit
 of the Contribution of such Lender 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 Lenders in schedule 1 unless and until a written notice
 of change of lending office shall have been received by the Agent and the
 Agent may act upon any such notice unless and until the same is superseded by
 a further such notice; 

 
	
  

 	
  

 	
  

 
	
 16.4.5

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.4.6

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.5

 	
  

 	
 No liability of Arrangers or Agent 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

66

	
  

 	
  

 	
  

 
	
 16.5.1

 	
  

 	
 be obliged to make any enquiry as to the use of any of the proceeds
 of the Term Advances and/or the Revolving Advances unless (in the case of the
 Agent) so required in writing by a Lender, in which case the Agent shall
 promptly make the appropriate request to the Borrower; or

 
	
  

 	
  

 	
  

 
	
 16.5.2

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.5.3

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.5.4

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.5.5

 	
  

 	
 be obliged to account to any Lender 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 Lenders; or

 
	
  

 	
  

 	
  

 
	
 16.5.7

 	
  

 	
 be liable to any Lender 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 Arrangers 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 either 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 either
 Arranger or, as the case may be, the Agent for any Security Party or any
 other person which may be a trade competitor of any Security Party or may
 otherwise have commercial interests similar to those of any Security Party.

 
	
  

 	
  

 	
  

 
	
 16.6

 	
  

 	
 Non-reliance on
 Arranger or Agent

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each Lender acknowledges that it has not relied on any statement,
 opinion, forecast or other representation made by the Arrangers (or either of
 them) 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 Arrangers (or either of them) or the Agent and based
 on such documents as it considers appropriate, its own appraisal of the
 creditworthiness of the Security Parties and its own independent investigation
 of the financial condition, prospects and affairs of the Security Parties in
 connection with the making and continuation of such Lender’s Commitment or
 Contribution under this Agreement. Neither the Arrangers nor the Agent shall
 have any duty or responsibility, either initially or on a continuing basis,
 to provide any Lender 

 

67

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with any credit or other information with respect to any Security
 Party whether coming into its possession before the making of the Term
 Advances and/or any Revolving Advance 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
 Borrower’s performance

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Neither the Arrangers nor the Agent shall have any responsibility or
 liability to any Lender:

 
	
  

 	
  

 	
  

 
	
 16.7.1

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.7.2

 	
  

 	
 for the financial condition of any Security Party; or

 
	
  

 	
  

 	
  

 
	
 16.7.3

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.7.4

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.7.5

 	
  

 	
 to investigate or make any enquiry into the title of the Borrower or
 any other Security Party to the relevant Ship 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 Lenders.

 
	
  

 	
  

 	
  

 
	
 16.8

 	
  

 	
 Reliance on documents and professional advice

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each of the Arrangers 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 either Arranger’s or, as the case may be, the
 Agent’s employment).

 
	
  

 	
  

 	
  

 
	
 16.9

 	
  

 	
 Other dealings

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each of the Arrangers and the Agent may, without any liability to
 account to the Lenders, 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 any of its Related Companies or any
 of the Lenders as if it were not an Arranger or, as the case may be, the
 Agent.

 

68

	
  

 	
  

 	
  

 	
  

 
	
 16.10

 	
  

 	
 Rights of Agent as Lender; 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 Lender and may exercise the same as though it were not performing
 the duties and functions delegated to it under this Agreement and the term “Lenders” 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 Lenders (unless and to the extent expressly authorised by the other
 provisions of any of the Security Documents) and, if so instructed by the
 Majority Lenders, shall:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.11.2

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 reduce the Margin;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 change the currency in which any amount is payable by any Security
 Party under any of the Security Documents;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (d)

 	
 increase any Lender’s Commitment in respect of either Facility;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (e)

 	
 extend any Final Availability Date;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (f)

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

 

69

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (g)

 	
 change the order of distribution under clauses 6.9 and 13.2;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (h)

 	
 change clause 8.6.1

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (i)

 	
 change this clause 16.11;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (j)

 	
 change the definition of “Majority Lenders” in clause 1.2; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (k)

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

 
	
  

 	
  

 	
  

 	
  

 
	
 16.12

 	
  

 	
 Reimbursement and indemnity by Lenders

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each Lender shall reimburse the Agent (rateably in accordance with
 such Lender’s Commitment or Contribution), to the extent that the Agent is
 not reimbursed by the Borrower, for the costs, charges and expenses incurred
 by the Agent which are expressed to be payable by the Borrower under clause
 5.1 including (in each case) the fees and expenses of legal or other
 professional advisers. Each Lender shall on demand indemnify the Agent
 (rateably in accordance with such Lender’s Commitment or 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 Borrower and each of the Lenders
 not less than fifteen (15) days’ notice of its intention to do so and shall
 if required from the Majority Lenders, retire from its appointment as Agent
 under this Agreement, provided that no such retirement shall take effect
 unless there has been appointed by the Lenders as a successor agent:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

 	
 a Related Company of the Agent nominated by the Agent which the
 Lenders hereby irrevocably and unconditionally agree to appoint or, failing
 such nomination,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 a Lender nominated by the Majority Lenders or, failing such a
 nomination,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

 	
 any reputable and experienced bank or financial institution nominated
 by the retiring Agent.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Any corporation into which the retiring Agent may be merged or
 converted or any corporation with which the Agent may be consolidated or any
 corporation resulting from any merger, conversion, amalgamation,
 consolidation or other reorganisation to which the Agent shall be a party
 shall, to the extent permitted by applicable law, be the successor Agent
 under this Agreement and the other Security Documents without the execution
 or filing of any document or any further act on the part of any of the
 parties to this Agreement and the other Security Documents save that notice
 of any such merger, conversion, amalgamation, consolidation or other
 reorganisation shall forthwith be given to each Security Party and the
 Lenders. Prior to any such successor being appointed, the Agent agrees to
 consult with the Borrower as to the identity of the proposed successor and to
 take account of any reasonable objections which the Borrower may raise to
 such successor being appointed.

 

70

	
  

 	
  

 	
  

 	
  

 
	
 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 no expense to the Borrower)
 provide its successor with copies of such of its records as its successor
 reasonably requires to carry out its functions under the Security Documents.

 
	
  

 	
  

 	
  

 
	
 16.14

 	
  

 	
 Appointment and retirement of Security
 Agent

 
	
  

 	
  

 	
  

 
	
 16.14.1

 	
  

 	
 Appointment

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each of the Lenders, the Swap Banks and the Agent irrevocably
 appoints the Security Agent as its Security Agent and trustee for the
 purposes of this Agreement and the Security Documents, in each case on the
 terms set out in this Agreement. By virtue of such appointment, each of the
 Lenders, the Swap Banks 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 Borrower and each of the Lenders and the Swap Banks not less
 than fifteen (15) days’ notice of its intention to do so and shall if
 required from the Majority Lenders, 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 Lenders,
 the Swap Banks 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 Lenders and the Swap Banks hereby irrevocably and
 unconditionally agree to appoint or, failing such nomination,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 a bank or trust corporation nominated by the Majority Lenders or,
 failing such a nomination,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (c)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 and, in any case, such successor Security Agent and trustee shall
 have duly accepted such appointment by delivering to the Agent (i) written
 confirmation (in a form acceptable to the Agent) of such acceptance agreeing
 to be bound by this Agreement in the capacity of Security Agent as if it had
 been an original party to this Agreement and (ii) a duly executed Trust Deed.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Any corporation into which the retiring Security Agent may be merged
 or converted or any corporation with which the Security Agent may be
 consolidated or any corporation resulting from any merger, conversion,
 amalgamation, consolidation or other reorganisation to which the Security
 Agent shall be a party shall, to the extent permitted by applicable law, be
 the successor Security Agent under this Agreement, any Trust Deed and the
 other Security Documents without the execution or filing of any document or
 any further act on the part of any of the 

 

71

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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, the Lenders and the Swap Banks. Prior to any such successor
 being appointed, the Security Agent agrees to consult with the Borrower as to
 the identity of the proposed successor and to take account of any reasonable
 objections which the Borrower may raise to such successor being appointed.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Upon any such successor as aforesaid being appointed, the retiring
 Security Agent shall be discharged from any further obligation under the
 Security Documents (but shall continue to have the benefit of this clause 16
 in respect of any action it has taken or refrained from taking prior to such
 discharge) and its successor and each of the other parties to this Agreement
 shall have the same rights and obligations among themselves as they would
 have had if such successor had been a party to this Agreement in place of the
 retiring Security Agent. The retiring Security Agent shall (at no expense to
 the Borrower) 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 Lenders, the Swap Banks and the Agent beyond those expressly
 stated in any of the Security Documents. Each of the Agent, the Lenders and
 the Swap Banks hereby authorises the Security Agent to enter into and execute
 and (where required) register:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

 	
 any and all such other Security Documents as may be approved by the
 Agent in writing (acting on the instructions of the Majority Lenders or all
 Lenders, as applicable) 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 Lenders, the Swap Banks 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 Lenders communicated in writing by the Agent, concur
 with any of the Security Parties to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (a)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
   (b)

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 16.15.3

 	
  

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

 

72

	
  

 	
  

 	
  

 	
  

 
	
 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 Lenders and the Swap 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 Lenders, the Swap Banks 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
 otherwise have direct recourse to the security and/or guarantees constituted
 by such Security Documents except through the Security Agent.

 
	
  

 	
  

 	
  

 
	
 16.15.6

 	
  

 	
 For the purpose of this clause 16, the Security Agent may, rely and
 act in reliance upon any information from time to time furnished to the
 Security Agent by the Agent (whether pursuant to clause 16.15.7 or otherwise)
 unless and until the same is superseded by further such information, so that
 the Security Agent shall have no liability or responsibility to any party as
 a 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 and the Lenders
 and the Swap 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 

 

73

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 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
 Lenders but, Provided such consent has been obtained, it shall not be
 necessary for any other Creditor to be joined as an additional party in any
 proceedings for this purpose.

 
	
  

 	
  

 	
  

 
	
 16.18

 	
  

 	
 Common Agent and Security Agent

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Agent and the Security Agent have entered into the Security
 Documents in their separate capacities (a) as agent for the Lenders under and
 pursuant to this Agreement (in the case of the Agent) and (b) as security
 agent and trustee for the Lenders, the Swap Banks 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 Lenders, the Swap Banks 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 13.2.

 
	
  

 	
  

 	
  

 
	
 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 

 

74

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 case of moneys so received by the Agent or, as the case may be, the
 Security Agent) in each case in accordance with clause 13.2. 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 Lenders) or any
 receiver may credit any moneys received by it to a suspense account for so
 long and in such manner as the Agent or such receiver may from time to time
 determine with a view to preserving the rights of the Agent and/or the
 Security Agent and/or the Account Bank and/or the Arrangers and/or the
 Lenders and/or the Swap Banks or any of them to provide for the whole of
 their respective claims against the Borrower or any other person liable.

 
	
  

 	
  

 	
  

 	
  

 
	
 16.21

 	
  

 	
 Reconventioning

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 After
 consultation with the Borrower and the Lenders 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.

 
	
  

 	
  

 	
  

 	
  

 
	
 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,
 at the time of despatch (provided that if the date of despatch is not
 a business day in the country of the addressee or if the time of despatch is
 after the close of business in the country of the addressee it shall be
 deemed to have been received at the opening of business on the next such
 business day); and

 

75

	
  

 	
  

 	
  

 	
  

 
	
 17.1.3

 	
  

 	
 be sent:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 if to the
 Borrower at:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 COSTAMARE INC.

 Costamare Shipping Company S.A.,

 60 Zephyrou Street, Pal. Faliro,

 175.64 Athens, Greece,

 Fax No. (+30210) 9406454

 Attention: The Chief Financial Officer

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 if to DSB in
 its capacity as joint Arranger and/or Swap Bank and/or Agent and/or Security
 Agent, at:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT

 Domshof 17,

 28195 Bremen,

 Federal Republic of Germany

 Fax No.: (+0049) 421 3609 293

 Attention: International Loans

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 if to HVB in
 its capacity as joint Arranger and/or Swap Bank and/or Account Bank, at:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Bayerische
 Hypo-Und Vereinsbank Aktiengesellschaft,

 62 Notara Street, 185 35, Piraeus, Greece

 Fax No.: +30 210 4126597

 Attention: The Manager

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)

 	
 if to a
 Lender, to its address or fax number specified in schedule 1 or in any
 relevant Transfer Certificate,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 17.2

 	
  

 	
 Notices through the Agent

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Every notice, request, demand or other communication under this
 Agreement or (unless otherwise provided therein) any other Security Document
 to be given by the Borrower to any other party, shall be given to the Agent
 for onward transmission as appropriate and if it is to be given to the
 Borrower it shall (except otherwise provided in the Security Documents) be
 given to the Agent.

 
	
  

 	
  

 	
  

 
	
 17.3

 	
  

 	
 No implied waivers, remedies cumulative

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

76

	
  

 	
  

 	
  

 	
  

 
	
 17.4

 	
  

 	
 Release of certain Guarantors

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 It is hereby expressly agreed that the Security Agent on the
 Corporate Structure Completion Date shall release Costamare and the Personal
 Guarantors from their obligations under their respective Guarantees upon
 production of certified true copies of the registered share certificates
 evidencing that the shares in all the Borrower’s Subsidiaries are registered
 in the name of the Borrower, whereupon Costamare and Personal Guarantors shall
 cease to be considered as Security Parties hereunder.

 
	
  

 	
  

 	
  

 
	
 17.5

 	
  

 	
 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.

 
	
  

 	
  

 	
  

 
	
 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 Borrower agrees, for the benefit of each Creditor, that any legal
 action or proceedings arising out of or in connection with this Agreement
 against the Borrower or any of its assets may be brought in the English
 courts. The Borrower irrevocably and unconditionally submits to the
 jurisdiction of such courts and irrevocably designates, appoints and empowers
 MR. RICHARD COLEMAN c/o
 H. Clarkson and Co. Ltd., presently located at 3 Lower Thames Street, London
 EC3R 6HE, England, to receive for it and on its behalf, service of process
 issued out of the English courts in any such legal action or proceedings, who
 is hereby authorised to accept such service, which shall be deemed to be good
 service on the Borrower, provided, however, that the Borrower further
 agrees that in the event that (i) Mr. Richard Coleman (or any other agent
 appointed by the Borrower in substitution of Mr. Richard Coleman and
 acceptable to the Lenders) close or fail to maintain a business presence in
 England, or (ii) the Lenders, in their sole discretion, shall determine that
 service of process on the said agents is not feasible or may be insufficient
 under the Laws of England, then any summons, writ or other legal process issued
 against the Borrower in England may be served upon Messrs. The Law Debenture
 Corporate Services Limited, currently located at 5th Floor, 100 Wood Street, London EC2V 7EX, England,
 (hereinafter called the “Process Agent for
 English Proceedings”)or their successors, who are hereby authorised to accept such
 service, which shall be deemed to be good service on the Borrower. The
 appointment of the Process Agent for English Proceedings shall be valid and
 binding from the date notice of such appointment is given by the Agent to the
 Borrower in accordance with Clauses 17.1 and 17.2. The submission to such
 jurisdiction shall not (and shall not be construed so as to) limit the right
 of a Creditor to take proceedings against the Borrower in the courts of any
 other competent jurisdiction nor shall the taking of proceedings in any one
 or more jurisdictions preclude the taking of proceedings in any other
 jurisdiction, whether concurrently or not.

 

77

	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
 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.

 

78

Schedule 1 
The Lenders and their Commitments

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name

 	
  

 	
  

 	
 Address
 and fax number

 	
  

 	
  

 	
 Commitment

 (US$)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Term Loan

 Facility

 	
  

 	
  

 	
 Revolving

 Facility

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 DEUTSCHE
 SCHIFFSBANK 

 AKTIENGESELLSCHAFT

 	
  

 	
  

 	
 Lending
 Office

 

 Domshof 17 28195
 Bremen,

 Federal Republic of Germany

 

 Address for Notices

 

 Deutsche Schiffsbank Aktiengesellschaft

 Domshof 17, 28195 Bremen,

 Federal Republic of Germany

 Fax No.: +49 421 3609 293
e-mail:
 achim.boehme@schiffsbank.com 
Attn: International Loans

 	
  

 	
  

 	
 210,000,000

 	
  

 	
  

 	
 90,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BAYERISCHE
 HYPO-UND

 VEREINSBANK

 AKTIENGESELLSCHAFT

 	
  

 	
  

 	
 Lending
 Office

 

 Bayerische
 Hypo-Und Vereinsbank

 Aktiengesellschaft,

 7 Heraklitou Street, 106 73 Athens,

 Greece

 

 Address for Notices

 

 Bayerische Hypo-Und Vereinsbank

 Aktiengesellschaft,

 Notara Street, 185 35, Piraeus, Greece 

 Fax No.: +30 210 4126597

 e-mail:

 vassilis.mantzavinos@unicreditgroup.gr 

 Attn: Mr. Vassilis Mantzavinos

 	
  

 	
  

 	
 210,000,000

 	
  

 	
  

 	
 90,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 CREDIT
 SUISSE

 	
  

 	
  

 	
 Lending
 Office

 

 St.
 Alban-Graben 1, CH-4002 Basel,
Switzerland
Fax No.: 41 61 266 79 39

 e-mail:lydia.lampadaridou@credit-suisse.com

 

 Address for
 Notices

 
St. Alban-Graben 1, CH-4002 Basel,

 Switzerland

 Fax No.: 41 61 266 79 39

 e-mail:meike.maettig@credit-suisse.com

 Attn:Ms. Meike Mättig

 e-mail:lydia.lampadaridou@creditsuisse.com

 Attn: Ms. Lydia Lampadaridou

 	
  

 	
  

 	
 140,000,000

 	
  

 	
  

 	
 60,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

79

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name

 	
  

 	
  

 	
 Address
 and fax number

 	
  

 	
  

 	
 Commitment

 (US$)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Term Loan

 Facility

 	
  

 	
  

 	
 Revolving

 Facility

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 HSH
 NORDBANK AG

 	
  

 	
  

 	
 Lending
 Office

 

 Gerhart-Hauptmann-Platz
 50, 20095
Hamburg,
Federal Republic of Germany

 Address for
 Notices

 
Gerhart-Hauptmann-Platz 50, 20095
Hamburg,
Federal Republic of Germany
Fax No.: +49 40/3333 34121
Attn: Mr. Jan Herzel

 e-mail:jan.herzel@hsh-nordbank.com

 	
  

 	
  

 	
 105,000,000

 	
  

 	
  

 	
 45,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 FORTIS
 BANK S.A./N.V.

 	
  

 	
  

 	
 Lending
 Office

 

 166 Syngrou
 Avenue, 17671 Athens,

 Greece,

 Address for
 Notices

 
166 Syngrou Avenue, 17671 Athens,
Greece,
Fax No.:
e-mail:dimitris.christacopoulos @fortis.com

 
Attn: Mr. Dimitris Christacopoulos

 	
  

 	
  

 	
 35,000,000

 	
  

 	
  

 	
 15,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Total
 Commitment

 	
  

 	
  

 	
 70,000,000

 	
  

 	
  

 	
 300,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

80

Schedule 2 
Form of Drawdown Notice

(referred to in clause 2.5)

	
  

 	
  

 
	
 To:

 	
 DEUTSCHE
 SCHIFFSBANK AKTIENGESELLSCHAFT,

 
	
  

 	
 Domshof 17,
 28195 Bremen,

 
	
  

 	
 Federal
 Republic of Germany

 
	
  

 	
 (as Agent)

 

[  ]
2008

US$1,000,000,000 Facility Agreement dated 22”
July, 2008

We refer to the above Facility Agreement and hereby give you notice
that we wish to draw down the [  ]
[  ] Advance[s] namely USS[  ]
on [  ] 200[  ]
and select [a first Interest Period in respect thereof of [  ]
months] [the first interest period in respect hereof to expire on [  ]
200[  ]]. The funds should be credited to [name and number of account] with [details of bank in New York City].

We confirm
that:

	
  

 	
  

 
	
 (a)

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

 
	
  

 	
  

 
	
 (b)

 	
 the representations and warranties contained in (i) clauses
 7.1[(except in relation to 7.1.10)], 7.2 and 7.3(b) of the Facility Agreement
 and (ii) clause 4 of the Guarantees (except in relation to 4.1(m)) are true
 and correct at the date hereof as if made with respect to the facts and
 circumstances existing at such date;

 
	
  

 	
  

 
	
 (c)

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

 
	
  

 	
  

 
	
 (d)

 	
 there has been no material adverse change in our financial position
 or in the combined financial position of ourselves, the Guarantors, from that
 described by us or any other Security Party to the Creditors or any of them
 in the negotiation of the Facility Agreement; and

 
	
  

 	
  

 
	
 (e)

 	
 we will use the proceeds of the above Advance[s] for our benefit and
 under our full responsibility and exclusively for the purposes specified in
 the Loan Agreement.

 

Words and expressions defined in the Facility Agreement shall have the
same meanings where used herein.

	
  

 	
  

 
	
  

 	
  

 
	
 For and on
 behalf of

 	
  

 
	
 COSTAMARE INC.

 	
  

 

81

Schedule 3 
Documents and evidence required as conditions
precedent

(referred to in clause 9.1)

PART 1

Documents and evidence required as conditions
precedent

to the execution of this Agreement:

	
  

 	
  

 	
  

 
	
 1

 	
 Constitutional documents

 
	
  

 	
  

 	
  

 
	
  

 	
 Copies, certified by an officer of each Security Party and each
 Manager as true, complete and up to date copies of all documents which
 contain or establish or relate to the constitution of that Security Party and
 each Manager;

 
	
  

 	
  

 	
  

 
	
 2

 	
 Corporate authorisations

 
	
  

 	
  

 	
  

 
	
  

 	
 copies of resolutions of the directors and stockholders of each
 Security Party approving such of the Security Documents to which such
 Security Party is, or is to be, party and authorising the signature, delivery
 and performance of such Security Party’s obligations thereunder, certified
 (in a certificate dated no earlier than the date of this Agreement) by an
 officer of such Security Party as:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 being true and correct;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 being duly passed at meetings of the directors of such Security Party
 and of the stockholders of such Security Party duly convened and held;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 not having been amended, modified or revoked; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 being in full force and effect,

 
	
  

 	
  

 	
  

 
	
  

 	
 together with originals or certified copies of any powers of attorney
 issued by any Security Party pursuant to such resolutions;

 
	
  

 	
  

 	
  

 
	
 3

 	
 Certificate of incumbency

 
	
  

 	
  

 	
  

 
	
  

 	
 a list of directors and officers of each Security Party and each
 Manager specifying the names and positions of such persons, certified (in a
 certificate dated 15th July, 2008) by an officer of such Security Party or,
 as the case may be, such Manager to be true, complete and up to date;

 
	
  

 	
  

 	
  

 
	
 4

 	
 Good standing certificate

 
	
  

 	
  

 	
  

 
	
  

 	
 recent certificates or other evidence satisfactory to the Agent, in
 its sole discretion, of the existence and good standing of each of the
 Security Parties and each Manager;

 
	
  

 	
  

 	
  

 
	
 5

 	
 Borrower’s consents and approvals

 
	
  

 	
  

 	
  

 
	
  

 	
 a certificate (dated no earlier than the date of this Agreement) from
 an officer of the Borrower that no consents, authorisations, licences or
 approvals are necessary for the Borrower to authorise or are required by the
 Borrower in connection with the borrowing by the Borrower of the Term
 Advances and/or the Revolving Advances pursuant to this Agreement or the
 execution, delivery and performance of the Security Documents to which the
 Borrower is a party;

 

82

	
  

 	
  

 
	
 6

 	
 Other consents and approvals

 
	
  

 	
  

 
	
  

 	
 a certificate (dated no earlier than the date of this Agreement) from
 an officer of each Security Party (other than the Borrower) that no consents,
 authorisations, licences or approvals are necessary for such Security Party
 to guarantee and/or grant security for the borrowing by the Borrower of the
 Total Commitment pursuant to this Agreement and execute, deliver and perform
 the Security Documents insofar as such Security Party is a party thereto;

 
	
  

 	
  

 
	
 7

 	
 Fees

 
	
  

 	
  

 
	
  

 	
 evidence that any fees due under clause 5.1.2 have been paid in full;

 
	
  

 	
  

 
	
 8

 	
 Borrower’s process agent

 
	
  

 	
  

 
	
  

 	
 a letter from the Borrower’s agent for receipt of service of
 proceedings referred to in clause 18.2 accepting its appointment under the
 said clause and under each of the Security Documents to which the Borrower is
 a party and in which it is or is to be appointed as the Borrower’s agent; and

 
	
  

 	
  

 
	
 9

 	
 Marshall Islands legal opinion

 
	
  

 	
  

 
	
  

 	
 an opinion of the Lenders’ legal advisers on Marshall Islands Law
 matters in relation to the Borrower.

 

83

PART 2

Documents and evidence required as conditions
precedent to a Term Advance

being made:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (in this Part 2 the Tranche A Ship(s) to be refinanced by a Term
 Advance is herein called the “Relevant
 Ship(s)”)

 
	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 1

 	
 Drawdown notice

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The Drawdown Notice in respect of the relevant Term Advance duly
 executed;

 
	
  

 	
  

 	
  

 	
  

 
	
 2

 	
 Conditions precedent

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 evidence that the conditions precedent set out in Part 1 of schedule
 3 have been fully satisfied;

 
	
  

 	
  

 	
  

 	
  

 
	
 3

 	
 Ship conditions

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 evidence that each of the Relevant Ship(s):

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (i) 

 	
 Registration and Encumbrances

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 is registered in the name of the Owner thereof through the relevant
 Registry under the laws and flag of the relevant Flag State and that such
 Ship and its Earnings, Insurances and Requisition Compensation (as each such
 term is defined in the Security Documents relative to such Ship) are free of
 Encumbrances (save for any Encumbrances in favour of the existing
 mortgagee(s)) together with evidence that such Encumbrances shall be
 discharged on drawdown of the relevant Term Advance; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (ii) 

 	
 Classification

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 maintains the Classification referred to in the relevant Mortgage
 free of all overdue requirements and overdue recommendations of the relevant
 Classification Society which would lead to the withdrawal of class; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (iii) 

 	
 Insurance

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 is insured in accordance with the provisions of the relevant Security
 Documents and all requirements of the relevant Security Documents in respect
 of such insurance have been complied with (including without limitation,
 confirmation from the protection and indemnity association or other insurer
 with which each Relevant Ship is, or is to be, entered for insurance or
 insured against protection and indemnity risks (including oil pollution
 risks) that any necessary declarations required by the association or insurer
 for the removal of any oil pollution exclusion have been made and that any
 such exclusion does not apply to such Ship);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (iv) 

 	
 ISM Code and ISPS Code

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (aa)

 	
 a copy of the DOC applicable to each Relevant Ship and of the SMC
 applicable to each Manager certified as true and in effect by the Borrower’s
 lawyer;

 

84

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (cc)

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

 
	
  

 	
  

 	
  

 	
  

 
	
 4

 	
 Security Documents

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 the Master Agreements, the Corporate Guarantee of Costamare, the
 Personal Guarantees, the Corporate Guarantees of the Owners of the Relevant
 Ship(s), the Mortgage(s) over the Relevant Ship(s), the Deed(s) of Covenants
 (if required under the laws of relevant Flag State) supplemental to such
 Mortgage(s), the General Assignment(s) relative to the Relevant Ship(s), the
 Account Pledge Agreements, any Charterparty Assignment relative to such
 Ship(s) which is subject to an Existing Charterparty or an Approved Charterparty,
 each duly executed;

 
	
  

 	
  

 	
  

 	
  

 
	
 5

 	
 Notices of assignment

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 duly executed notices of assignment in the forms prescribed by the
 Security Documents;

 
	
  

 	
  

 	
  

 	
  

 
	
 6

 	
 Mortgages’ registration

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 evidence that each Mortgage relative to the Relevant Ship(s) has been
 registered against such Ship through the relevant Registry under the laws and
 flag of the relevant Flag State;

 
	
  

 	
  

 	
  

 	
  

 
	
 7

 	
 Accounts

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 evidence that the Accounts have been opened and duly completed
 mandate forms in respect thereof have been delivered to the Agent;

 
	
  

 	
  

 	
  

 	
  

 
	
 8

 	
 Security Parties’ process agent

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a letter from each Security Party’s agent for receipt of service of
 proceedings referred to in each of the Security Documents to which such
 Security Party is a party accepting its appointment under each such Security
 Document;

 
	
  

 	
  

 	
  

 	
  

 
	
 9

 	
 Fees and commissions

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 evidence that any fees and commissions payable from the Borrower to
 the Creditors pursuant to the terms of clause 5.1 or any other provision of
 the Security Documents have been paid in full;

 
	
  

 	
  

 	
  

 	
  

 
	
 10

 	
 Flag State opinion

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 an opinion of the Lenders’ legal advisers on matters of Flag State
 law to the Agent;

 
	
  

 	
  

 	
  

 	
  

 
	
 11

 	
 Liberian legal opinion

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 an opinion of the Lenders’ legal advisers on Liberian Law matters in
 relation to the Owners;

 

85

	
  

 	
  

 	
  

 
	
 12

 	
 Valuation

 
	
  

 	
  

 	
  

 
	
  

 	
 a valuation of each Relevant Ship made on the basis and in the manner
 specified in clause 8.2.3;

 
	
  

 	
  

 	
  

 
	
 13

 	
 Insurance opinion

 
	
  

 	
  

 	
  

 
	
  

 	
 an opinion from insurance consultants to the Agent, on the Insurances
 effected or to be effected in respect of the Relevant Ship(s);

 
	
  

 	
  

 	
  

 
	
 14

 	
 Manager’s Undertaking(s)-Management
 Agreement etc.

 
	
  

 	
  

 	
  

 
	
  

 	
 the Manager’s Undertaking(s) relative to such Ship(s) duly executed
 and a copy, certified as a true and complete copy by an officer of the
 relevant Owner or the Borrower’s Lawyer, of each Management Agreement,
 Existing Charterparty or any Approved Charterparty of the Relevant Ship(s);

 
	
  

 	
  

 	
  

 
	
 15

 	
 DOC and application for SMC

 
	
  

 	
  

 	
  

 
	
  

 	
 a certified copy of each of the DOC and SMC for each Relevant Ship;

 
	
  

 	
  

 	
  

 
	
 16

 	
 ISSC

 
	
  

 	
  

 	
  

 
	
  

 	
 a certified copy of ISSC for each Relevant Ship;

 
	
  

 	
  

 	
  

 
	
 17

 	
 Further opinions

 
	
  

 	
  

 	
  

 
	
  

 	
 such further opinions as the Agent may reasonably require; and

 
	
  

 	
  

 	
  

 
	
 18

 	
 Further conditions precedent

 
	
  

 	
  

 	
  

 
	
  

 	
 such further conditions precedent as the Agent may reasonably require.

 

86

PART 3

Documents and evidence required as conditions
precedent to any Revolving

Advance being made:

	
  

 	
  

 	
  

 
	
  

 	
 (in this Part 3 the Tranche B Ship(s) to be financed by a Revolving
 Advance is herein called the “Relevant
 Ship(s)”)

 
	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 1

 	
 Drawdown notice

 
	
  

 	
  

 	
  

 
	
  

 	
 The Drawdown Notice in respect of the relevant Revolving Advance duly
 executed;

 
	
  

 	
  

 	
  

 
	
 2

 	
 Conditions precedent

 
	
  

 	
  

 	
  

 
	
  

 	
 evidence that the conditions precedent set out in Parts 1 and 2 of
 schedule 3 have been fully satisfied;

 
	
  

 	
  

 	
  

 
	
 3

 	
 Fees and commissions

 
	
  

 	
  

 	
  

 
	
  

 	
 evidence that any fees and commissions payable from the Borrower to
 the Creditors pursuant to the terms of clause 5.1 or any other provision of
 the Security Documents have been paid in full;

 
	
  

 	
  

 	
  

 
	
 4

 	
 Ship conditions

 
	
  

 	
  

 	
  

 
	
  

 	
 evidence that each of the Relevant Ship(s):

 
	
  

 	
  

 	
  

 
	
  

 	
  (i) 

 	
 Registration and Encumbrances

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 is registered in the name of the Owner thereof through the relevant
 Registry under the laws and flag of the relevant Flag State and that such
 Ship and its Earnings, Insurances and Requisition Compensation (as each such
 term is defined in the Security Documents relative to such Ship) are free of
 Encumbrances (save for any Encumbrances in favour of the existing
 mortgagee(s)) together with evidence that such Encumbrances shall be
 discharged on drawdown of the relevant Revolving Advance; and

 
	
  

 	
  

 	
  

 
	
  

 	
  (ii) 

 	
 Classification

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 maintains the Classification referred to in the relevant Mortgage
 free of all overdue requirements and overdue recommendations of the relevant
 Classification Society which would lead to the withdrawal of class; and

 
	
  

 	
  

 	
  

 
	
  

 	
  (iii) 

 	
 Insurance

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 is insured in accordance with the provisions of the relevant Security
 Documents and all requirements of the relevant Security Documents in respect
 of such insurance have been complied with (including without limitation,
 confirmation from the protection and indemnity association or other insurer
 with which each Relevant Ship is, or is to be, entered for insurance or
 insured against protection and indemnity risks (including oil pollution risks)
 that any necessary declarations required by the association or insurer for
 the removal of any oil pollution exclusion have been made and that any such
 exclusion does not apply to such Ship);

 

87

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (iv) 

 	
 ISM Code and ISPS Code

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (aa)

 	
 a copy of the DOC applicable to each Relevant Ship and of the SMC
 applicable to each Manager certified as true and in effect by the Borrower’s
 lawyer;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

 	
 copies of such ISM Code Documentation as the Agent may by written
 notice to the Borrower have requested not later than two (2) days before the
 relevant Drawdown Date certified as true and complete in all material
 respects by the Borrower and the Borrower’s lawyer; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (cc)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  (v) 

 	
 In case the Relevant Ship is a newly
 acquired Ship

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (aa)

 	
 a copy of the relevant MOA certified as true and complete by the
 legal counsel of the Borrower;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

 	
 evidence that the ten per cent (10%) deposit in respect of the
 Relevant Ship and all other sums of money (other than the relevant Revolving
 Advance) required to be paid by the Owner thereof to the relevant Seller
 pursuant to the relevant MOA have been duly paid;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

 	
 evidence to the full satisfaction of the Agent, proving the relevant
 Seller’s title to the Relevant Ship free of any Encumbrances, debts or claims
 of any nature whatsoever;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

 	
 duly certified copies of corporate documentation of the relevant
 Seller proving the due incorporation and existence of the Seller of the
 Relevant Ship and the due authorisation of the sale of the Relevant Ship and
 the execution of all documents required in connection therewith;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

 	
 duly certified copy of the Bill of Sale, the protocol of delivery and
 acceptance of the Relevant Ship and the SMC, ISSC and DOC as well as of all
 other Seller’s documents relative to such Ship; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (bb)

 	
 evidence satisfactory to the Agent that the Operator complies with
 the requirements of the ISM Code, has obtained a DOC for itself, has applied
 to the appropriate Regulatory Agency for an SMC in respect of the Relevant
 Ship to be issued pursuant to the ISM Code within any time limit required or
 recommended by such Regulatory Agency and that neither the Borrower nor any Operator
 is aware of any reason why such application may be refused.

 
	
  

 	
  

 	
  

 	
  

 
	
 5

 	
 Security Documents

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 the Corporate Guarantees of the Owners of the Relevant Ship(s), the
 Mortgage(s) over the Relevant Ship(s), the Deed(s) of Covenants (if required
 under the laws of relevant Flag State) supplemental to such Mortgage(s), the
 General Assignment(s) relative to the Relevant Ship(s), any Charterparty
 Assignment relative to such Ship(s) which is subject to an Existing
 Charterparty or an Approved Charterparty, each duly executed;

 
	
  

 	
  

 	
  

 	
  

 
	
 6

 	
 Notices of assignment

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 duly executed notices of assignment in the forms prescribed by the Security
 Documents;

 

88

	
  

 	
  

 
	
 7

 	
 Mortgages’ registration

 
	
  

 	
  

 
	
  

 	
 evidence
 that each Mortgage relative to the Relevant Ship(s) has been registered
 against such Ship through the relevant Registry under the laws and flag of
 the relevant Flag State;

 
	
  

 	
  

 
	
 8

 	
 Accounts

 
	
  

 	
  

 
	
  

 	
 evidence
 that the Accounts have been opened and duly completed mandate forms in
 respect thereof have been delivered to the Agent;

 
	
  

 	
  

 
	
 9

 	
 Security Parties’ process agent

 
	
  

 	
  

 
	
  

 	
 a
 letter from each Security Party’s agent for receipt of service of proceedings
 referred to in each of the Security Documents to which such Security Party is
 a party accepting its appointment under each such Security Document;

 
	
  

 	
  

 
	
 10

 	
 Fees and commissions

 
	
  

 	
  

 
	
  

 	
 evidence
 that any fees and commissions payable from the Borrower to the Creditors
 pursuant to the terms of clause 5.1 or any other provision of the Security
 Documents have been paid in full;

 
	
  

 	
  

 
	
 11

 	
 Flag State opinion

 
	
  

 	
  

 
	
  

 	
 an
 opinion of the Lenders’ legal advisers on matters of Flag State law to the
 Agent;

 
	
  

 	
  

 
	
 12

 	
 Valuation

 
	
  

 	
  

 
	
  

 	
 a
 valuation of each Relevant Ship made on the basis and in the manner specified
 in clause 8.2.3;

 
	
  

 	
  

 
	
 13

 	
 Insurance opinion

 
	
  

 	
  

 
	
  

 	
 an
 opinion from insurance consultants to the Agent, on the Insurances effected
 or to be effected in respect of the Relevant Ship(s);

 
	
  

 	
  

 
	
 14

 	
 Manager’s Undertaking-Management Agreement
 etc.

 
	
  

 	
  

 
	
  

 	
 the
 Manager’s Undertaking(s) relative to such Ship(s) duly executed and a copy,
 certified as a true and complete copy by an officer of the relevant Owner or
 the Borrower’s Lawyer, of each Management Agreement, Existing Charterparty or
 any Approved Charterparty of the Relevant Ship(s);

 
	
  

 	
  

 
	
 15

 	
 MOA

 
	
  

 	
  

 
	
  

 	
 a copy, certified as a true and complete copy the MOA in respect of
 the Relevant Ship;

 
	
  

 	
  

 
	
 16

 	
 DOC and application for SMC

 
	
  

 	
  

 
	
  

 	
 a certified copy of each of the DOC and SMC for each Relevant Ship;

 
	
  

 	
  

 
	
 17

 	
 ISSC

 
	
  

 	
  

 
	
  

 	
 a certified copy of ISSC for each Relevant Ship;

 

89

	
  

 	
  

 
	
 18

 	
 Further opinions

 
	
  

 	
  

 
	
  

 	
 such further
 opinions as the Agent may reasonably require; and

 
	
  

 	
  

 
	
 19

 	
 Further conditions precedent

 
	
  

 	
  

 
	
  

 	
 such further conditions precedent as the Agent may reasonably
 require.

 

90

Schedule 4
Form of Transfer Certificate

(referred to in clause 15.3)

TRANSFER CERTIFICATE

Lenders are advised not to employ Transfer
Certificates or otherwise to assign or transfer interests in the Facility
Agreement without further ensuring that the transaction complies with all
applicable laws and regulations, including the Financial Services and Markets
Act 2000 and regulations made thereunder and similar statutes which may be in
force in other jurisdictions 

	
  

 	
  

 
	
 To:

 	
 DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT,
 as agent on its own behalf and on behalf of the Borrower, the Lenders, the
 Account Bank, the Security Agent, and the Arrangers and the Swap Banks
 defined in the Facility Agreement referred to below. 

 

[Date] [  ]

Attention: [  ]

This certificate (“Transfer
Certificate”) relates to a facility agreement dated [  ] July, 2008
(the “Facility Agreement”) and
made between COSTAMARE INC. (the “Borrower”), (2) the Lenders and financial
institutions defined therein as banks (the “Lenders”),
(3) DEUTSCHE SCHIFFSBANK
AKTIENGESELLSCHAFT, as joint Arranger, Security Agent, Swap Bank and
Agent, (3) BAYERISCHE HYPO-UND VEREINSBANK
AKTIENGESELLSCHAFT, as joint Arranger, Swap Bank and Account Bank
and (4) HSH NORDBANK AG, as Swap
Bank, in relation to a term loan facility of up to Seventy million Dollars
(US$700,000,000) and a revolving credit facility of up to Forty one million
Dollars (US$300,000,000). Terms defined in the Facility Agreement shall, unless
otherwise defined herein, have the same meanings herein as therein. 

In this
Certificate: 

the “Transferor”
means [full name] of [lending office]; and 

the “Transferee” means [full name] of [lending office].

	
  

 	
  

 
	
 1

 	
 The Transferor with full title guarantee assigns to the Transferee
 absolutely all rights and interests (present, future or contingent) which the
 Transferor has as a Lender under or by virtue of the Facility Agreement and
 all the Security Documents in relation to [  ] per centum
 ([  ]%) of the [Contribution] [Commitment] of the Transferor (or its
 predecessors in title) in respect of each Facility, details of which are set
 out below: 

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Date of Advance[s]

 of [Term Loan

 Facility] [Revolving

 Facility]

 	
  

 	
  

 	
 Amount of

 Advance[s] of

 [Term Loan Facility]

 [Revolving Facility]

 	
  

 	
  

 	
 Transferor’s

 [Contribution]

 [Commitment]

 to Advance[s] of

 [Term     Loan

 Facility]

 [Revolving

 Facility]

 	
  

 	
  

 	
 Maturity Date

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

91

	
  

 	
  

 	
  

 
	
 2

 	
  

 	
 By virtue of this Transfer Certificate and clause 15 of the Facility
 Agreement, the Transferor is discharged [entirely from its [Contribution]
 [Commitment] in respect of the [Term Loan Facility] [Revolving Facility],
 which amounts to US$[  ]] [from [  ] per centum
 ([  ]%) of its [Contribution] [Commitment] in respect of the [Term
 Loan Facility] [Revolving Facility], which percentage represents
 US$[     ]]. 

 
	
  

 	
  

 	
  

 
	
 3

 	
  

 	
 The Transferee hereby requests the Agent (on behalf of itself, the
 Borrower, the Account Bank, the Security Agent, the Arrangers, the Swap Banks
 and the Lenders) to accept the executed copies of this Transfer Certificate
 as being delivered pursuant to and for the purposes of clause 15.3 of the
 Facility Agreement so as to take effect in accordance with the terms thereof
 on [date of transfer]. 

 
	
  

 	
  

 	
  

 
	
 4

 	
  

 	
 The Transferee: 

 
	
  

 	
  

 	
  

 
	
 4.1

 	
  

 	
 confirms that it has received a copy of the Facility Agreement and
 the other Security Documents together with such other documents and
 information as it has required in connection with the transaction
 contemplated thereby;

 
	
  

 	
  

 	
  

 
	
 4.2

 	
  

 	
 confirms that it has not relied and will not hereafter rely on the
 Transferor, the Agent, the Account Bank, the Arrangers, the Swap Banks, the
 Lenders or the Security Agent to check or enquire on its behalf into the
 legality, validity, effectiveness, adequacy, accuracy or completeness of the
 Facility Agreement, any of the Security Documents or any such documents or
 information;

 
	
  

 	
  

 	
  

 
	
 4.3

 	
  

 	
 agrees that it has not relied and will not rely on the Transferor,
 the Agent, the Account Bank, the Arrangers, the Swap Banks, the Lenders or
 the Security Agent to assess or keep under review on its behalf the financial
 condition, creditworthiness, condition, affairs, status or nature of the
 Borrower, or any other Security Party (save as otherwise expressly provided
 therein);

 
	
  

 	
  

 	
  

 
	
 4.4

 	
  

 	
 warrants that it has power and authority to become a party to the
 Facility Agreement and has taken all necessary action to authorise execution
 of this Transfer Certificate and to obtain all necessary approvals and
 consents to the assumption of its obligations under the Facility Agreement
 and the Security Documents; and 

 
	
  

 	
  

 	
  

 
	
 4.5

 	
  

 	
 if not already a Lender, appoints (i) the Agent to act as its agent
 and (ii) the Security Agent to act as its security agent and trustee, as
 provided in the Facility Agreement and the Security Documents and agrees to
 be bound by the terms of the Facility Agreement and the Security Documents. 

 
	
  

 	
  

 	
  

 
	
 5

 	
  

 	
 The Transferor: 

 
	
  

 	
  

 	
  

 
	
 5.1

 	
  

 	
 warrants to the Transferee that it has full power to enter into this
 Transfer Certificate and has taken all corporate action necessary to
 authorise it to do so;

 
	
  

 	
  

 	
  

 
	
 5.2

 	
  

 	
 warrants to the Transferee that this Transfer Certificate is binding
 on the Transferor under the laws of England, the country in which the
 Transferor is incorporated and the country in which its lending office is
 located; and 

 
	
  

 	
  

 	
  

 
	
 5.3

 	
  

 	
 agrees that it will, at its own expense, execute any documents which
 the Transferee reasonably requests for perfecting in any relevant
 jurisdiction the Transferee’s title under this Transfer Certificate or for a
 similar purpose. 

 

92

	
  

 	
  

 	
  

 
	
 6

 	
  

 	
 The Transferee hereby undertakes with the Transferor and each of the
 other parties to the Facility Agreement and the other Security Documents that
 it will perform in accordance with its terms all those obligations which by
 the terms of the Facility Agreement and the other Security Documents will be
 assumed by it after delivery of the executed copies of this Transfer
 Certificate to the Agent and satisfaction of the conditions (if any) subject
 to which this Transfer Certificate is expressed to take effect. 

 
	
  

 	
  

 	
  

 
	
 7

 	
  

 	
 By execution of this Transfer Certificate on their behalf by the
 Agent and in reliance upon the representations and warranties of the
 Transferee, the Borrower, the Agent, the Security Agent, the Arrangers, the
 Swap Banks, the Account Bank and the Lenders accept the Transferee as a party
 to the Facility Agreement and the Security Documents with respect to all
 those rights and/or obligations which by the terms of the Facility Agreement
 and the Security Documents will be assumed by the Transferee (including those
 about pro-rata sharing and the exclusion of liability on the part of, and the
 indemnification of, the Agent, the Account Bank, the Arrangers, the Swap
 Banks and the Security Agent as provided by the Facility Agreement) after
 delivery of the executed copies of this Transfer Certificate to the Agent and
 satisfaction of the conditions (if any) subject to which this Transfer
 Certificate is expressed to take effect. 

 
	
  

 	
  

 	
  

 
	
 8

 	
  

 	
 None of the Transferor, the Agent, the Security Agent, the Account
 Bank, the Arrangers, the Swap Banks or the Lenders: 

 
	
  

 	
  

 	
  

 
	
 8.1

 	
  

 	
 makes any representation or warranty nor assumes any responsibility
 with respect to the legality, validity, effectiveness, adequacy or
 enforceability of the Facility Agreement or any of the Security Documents or
 any document relating thereto; or 

 
	
  

 	
  

 	
  

 
	
 8.2

 	
  

 	
 assumes any responsibility for the financial condition of the
 Borrower or any other Security Party or any party to any such other document
 or for the performance and observance by the Borrower or any other Security
 Party or any party to any such other document (save as otherwise expressly
 provided therein) and any and all such conditions and warranties, whether
 express or implied by law or otherwise, are hereby excluded (except as
 aforesaid). 

 
	
  

 	
  

 	
  

 
	
 9

 	
  

 	
 The Transferor and the Transferee each undertake that they will on
 demand fully indemnify the Agent in respect of any claim, proceeding,
 liability or expense which relates to or results from this Transfer
 Certificate or any matter concerned with or arising out of it unless caused
 by the Agent’s gross negligence or wilful misconduct, as the case may be. 

 
	
  

 	
  

 	
  

 
	
 10

 	
  

 	
 The agreements and undertakings of the Transferee in this Transfer
 Certificate are given to and for the benefit of and made with each of the
 other parties to the Facility Agreement and the Security Documents. 

 
	
  

 	
  

 	
  

 
	
 11

 	
  

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

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Transferor

 	
  

 	
 Transferee

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Dated:

 	
  

 	
 Dated:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 

93

Agent  

Agreed for and
on behalf of itself as Agent, the Borrower, the Security Agent, the Account
Bank, the Arrangers, the Swap Banks and the Lenders. 

	
  

 	
  

 	
  

 
	
 DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Dated:

 	
  

 	
  

 

Note: The execution
of this Transfer Certificate alone may not transfer a proportionate share of
the Transferor’s interest in the security constituted by the Security Documents
in the Transferor’s or Transferee’s jurisdiction. It is the responsibility of
the Transferee to ascertain whether any other documents are required to perfect
a transfer of such a share in the Transferor’s interest in such security in any
such jurisdiction and, if so, to seek appropriate advice and arrange for
execution of the same. 

94

The Schedule

Outstanding
Contribution [in respect of the [Term Loan Facility] [Revolving Facility]: US$•
Commitment [in respect of the [Term Loan Facility] [Revolving Facility]: US$•

Portion Transferred: •% 

Administrative Details of Transferee 

Name of
Transferee:

Lending Office: 

Contact
Person: 

(Loan Administration Department)

Telephone:

Telefax No: 

Contact
Person:

(Credit Administration Department)

Telephone:

Telefax No: 

[Account for
payments:] 

95

Schedule 5

Form of Trust Deed

THIS DECLARATION OF TRUST
made by DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
(the “Security Agent”) is made on
[  ] July, 2008 and is supplemental to (and made pursuant to the terms of) a
Facility Agreement dated [  ] July, 2008 (the “Facility
Agreement”) and made between (1)
COSTAMARE INC., as Borrower, (2) DEUTSCHE
SCHIFFSBANK AKTIENGESELLSCHAFT, as joint Arranger, Security Agent,
Swap Bank and Agent, (3) BAYERISCHE HYPO-UND
VEREINSBANK AKTIENGESELLSCHAFT, as joint Arranger, Swap Bank and
Account Bank, (4) HSH NORDBANK AG,
as Swap Bank and (5) the Lenders and financial institutions mentioned in
schedule 1 to the Facility Agreement as the Lenders. Words and expressions
defined in the Facility Agreement shall have the same meaning when used in this
Deed. 

NOW THIS DEED WITNESSETH
as follows: 

	
  

 	
  

 
	
 1

 	
 The Security
 Agent hereby acknowledges and declares that, from the date of this Deed, it
 holds and shall hold the Trust Property on trust for certain of the other
 Creditors on the terms and basis set out in the Facility Agreement. 

 
	
  

 	
  

 
	
 2

 	
 The
 declaration and acknowledgement contained in paragraph 1 above shall be
 irrevocable. 

 

IN WITNESS whereof
the Security Agent has executed this Deed the day and year first above written.

	
  

 	
  

 	
  

 
	
 SIGNED, SEALED and DELIVERED as a DEED

 	
 )

 	
  

 
	
 by

 	
 )

 	
 Authorised Signatory

 
	
 and by

 	
 )

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 
	
   Deutsche Schiffsbank Aktiengesellschaft  

 	
 )

 	
  

 
	
 as Security
 Agent

 	
 )

 	
 Authorised Signatory

 

96

Schedule 6

The Swap Banks

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name

 	
  

 	
  

 	
 Office

 	
  

 	
  

 	
 Swap Amount

 (US$)

 
	
 Deutsche Schiffsbank Aktiengesellschaft

 	
  

 	
  

 	
 Domshof 17 28195 Bremen, Federal Republic of Germany

 	
  

 	
  

 	
 425,000,000

 
	
 Bayerische Hypo-Und

 Vereinsbank

 Aktiengesellschaft

 	
  

 	
  

 	
 Arabellastrasse 12

 81925 Munich

 Germany

 	
  

 	
  

 	
 425,000,000

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Hsh Nordbank Ag

 	
  

 	
  

 	
 Martensdamm 6, 24103 Kiel,

 Federal Republic of Germany

 	
  

 	
  

 	
 150,000,000

 

97

Schedule 7

Details of Tranche A Ships

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Ship name

 	
 Owner

 	
 Flag

 	
  

 	
  

 	
 Year

 built

 	
  

 	
  

 	
 Size

 (TEU)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1

 	
 ZIM SHANGHAI

 	
 Fastsailing Maritime Co.

 	
 Greek

 	
  

 	
  

 	
 2002

 	
  

 	
  

 	
 4,992

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2

 	
 MAERSK

 KOLKATA

 	
 Kalamata Shipping Corporation

 	
 Greek

 	
  

 	
  

 	
 2003

 	
  

 	
  

 	
 6,416

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3

 	
 MAERSK

 KINGSTON

 	
 Navarino Maritime Corporation

 	
 Greek

 	
  

 	
  

 	
 2003

 	
  

 	
  

 	
 6,416

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4

 	
 COSCO NINGBO

 	
 Marina Maritime Corporation

 	
 Greek

 	
  

 	
  

 	
 2006

 	
  

 	
  

 	
 9,469

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5

 	
 COSCO YANTIAN

 	
 Costachille Maritime Corporation

 	
 Greek

 	
  

 	
  

 	
 2006

 	
  

 	
  

 	
 9.469

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6

 	
 ZIM NEW YORK

 	
 Angistri Corporation

 	
 Greek

 	
  

 	
  

 	
 2002

 	
  

 	
  

 	
 4,992

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7

 	
 SINGAPORE

 EXPRESS

 	
 Takoulis Maritime Corporation

 	
 Greek

 	
  

 	
  

 	
 2000

 	
  

 	
  

 	
 4,890

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8

 	
 OAKLAND

 EXPRESS

 	
 Fanakos Maritime Corporation

 	
 Greek

 	
  

 	
  

 	
 2000

 	
  

 	
  

 	
 4,890

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9

 	
 MAERSK

 KALAMATA

 	
 Merten Shipping Co.

 	
 Greek

 	
  

 	
  

 	
 2003

 	
  

 	
  

 	
 6,416

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10

 	
 NEW YORK

 EXPRESS

 	
 Flow Shipping Co.

 	
 Greek

 	
  

 	
  

 	
 2000

 	
  

 	
  

 	
 4,890

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

98

Schedule 8

Details of the Existing Charterparties of the
Tranche A Ships

	
 

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Ship’s name

 	
 Charterer

 	
 Date

 	
 Period

 	
 Hire per

 day in $

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
1 

 	
 ZIM SHANGHAI

 	
 Zim Israel
 Navigation Co. Ltd.

 	
 17-08-2000

 (as amended)

 	
 10 years

 plus 2+2+2

 	
 22,700 to

 25,250

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
2 

 	
 MAERSK KOLKATA

 	
 A.P. Moller-Maersk A/S 

 	
 05-02-2001

 (as amended)

 	
 7 years plus

 1+/-45 days

 (fm 13.01.09

 30,000)

 	
 32,360 to

 36,560 (fm

 13.01.09

 30,000)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
3 

 	
 MAERSK KINGSTON

 	
 A.P. Moller-Maersk A/S 

 	
 05-02-2001

 (as amended)

 	
 7 years plus

 1+/-45 days

 (fm 28.04.09

 30,000)

 	
 32,360 to

 36,560 (fm

 28.04.09

 30,000)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
4 

 	
 COSCO NINGBO

 	
 Cosco
 Container Lines Co. Ltd.

 	
 16-01-2004

 (as amended)

 	
 12 years

 	
 36,400

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
5 

 	
 COSCO YANTIAN

 	
 Cosco
 Container Lines Co. Ltd.

 	
 16-01-2004

 (as amended)

 	
 12 years

 	
 36,400

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
6 

 	
 ZIM NEW YORK

 	
 Zim Israel
 Navigation Co. Ltd.

 	
 17-08-2000

 (as amended)

 	
 10 years plus

 2+2+2

 	
 22,700 to

 25,250

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
7 

 	
 SINGAPORE EXPRESS

 	
 Hapag-Lloyd
 Container Lithe GmbH

 	
 18-08-1998

 (as amended)

 	
 8 years (fm

 28.08.08)

 	
 30,500

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
8 

 	
 OAKLAND EXPRESS

 	
 Hapag-Lloyd
 Container Linie GmbH

 	
 18-08-1998

 (as amended)

 	
 8 years (fm

 23.10.08)

 	
 30,500

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
9 

 	
 MAERSK KALAMATA

 	
 A.P. Moller-Maersk A/S 

 	
 05-02-2001

 (as amended)

 	
 7 years plus

 1+/-45 days

 (fm 11.06.09

 30,000)

 	
 32,360 to

 36,560 (fm

 11.06.09

 30,000)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
10 

 	
 NEW YORK EXPRESS

 	
 Hapag-Lloyd
 Container Linie GmbH

 	
 18-08-1998

 (as amended)

 	
 8 years (fm

 09.12.08)

 	
 30,500

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

99

Schedule 9

List of Costamare Fleet vessels

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 VESSEL’S NAME

 	
  

 	
 FLAG

 	
  

 	
 REGISTRATION NO.

 OFFICIAL NO.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1

 	
  

 	
 COSCO GUANGZOU

 	
  

 	
 GREEK

 	
  

 	
 11454

 
	
 2

 	
  

 	
 COSCO NINGBO

 	
  

 	
 GREEK

 	
  

 	
 11463

 
	
 3

 	
  

 	
 COSCO YANTIAN

 	
  

 	
 GREEK

 	
  

 	
 11482

 
	
 4

 	
  

 	
 COSCO BEIJING

 	
  

 	
 GREEK

 	
  

 	
 11492

 
	
 5

 	
  

 	
 COSCO HELLAS

 	
  

 	
 GREEK

 	
  

 	
 11503

 
	
 6

 	
  

 	
 MAERSK KAWASAKI

 	
  

 	
 GREEK

 	
  

 	
 11693

 
	
 7

 	
  

 	
 MAERSK KURE

 	
  

 	
 GREEK

 	
  

 	
 11694

 
	
 8

 	
  

 	
 MAERSK KOKURA

 	
  

 	
 GREEK

 	
  

 	
 11710

 
	
 9

 	
  

 	
 SEALAND NEW YORK

 	
  

 	
 GREEK

 	
  

 	
 10726

 
	
 10

 	
  

 	
 MAERSK KOBE

 	
  

 	
 GREEK

 	
  

 	
 10754

 
	
 11

 	
  

 	
 SEALAND WASHINGTON

 	
  

 	
 GREEK

 	
  

 	
 10782

 
	
 12

 	
  

 	
 SEALAND MICHIGAN

 	
  

 	
 GREEK

 	
  

 	
 10797

 
	
 13

 	
  

 	
 SEALAND ILLINOIS

 	
  

 	
 GREEK

 	
  

 	
 10818

 
	
 14

 	
  

 	
 MAERSK KOLKATA

 	
  

 	
 GREEK

 	
  

 	
 11088

 
	
 15

 	
  

 	
 MAERSK KINGSTON

 	
  

 	
 GREEK

 	
  

 	
 11147

 
	
 16

 	
  

 	
 MAERSK KALAMATA

 	
  

 	
 GREEK

 	
  

 	
 11167

 
	
 17

 	
  

 	
 ZIM NEW YORK

 	
  

 	
 GREEK

 	
  

 	
 11044

 
	
 18

 	
  

 	
 ZIM SHANGHAI

 	
  

 	
 GREEK

 	
  

 	
 11060

 
	
 19

 	
  

 	
 ZIM PIRAEUS

 	
  

 	
 GREEK

 	
  

 	
 11299

 
	
 20

 	
  

 	
 OAKLAND EXPRESS

 	
  

 	
 GREEK

 	
  

 	
 10796

 
	
 21

 	
  

 	
 NEW YORK EXPRESS

 	
  

 	
 GREEK

 	
  

 	
 10814

 
	
 22

 	
  

 	
 SINGAPORE EXPRESS

 	
  

 	
 GREEK

 	
  

 	
 10783

 
	
 23

 	
  

 	
 MAERSK MANDRAKI

 	
  

 	
 GREEK

 	
  

 	
 11346

 
	
 24

 	
  

 	
 MAERSK MYKONOS

 	
  

 	
 GREEK

 	
  

 	
 11372

 
	
 25

 	
  

 	
 SOPHIA BRITANNIA

 	
  

 	
 GREEK

 	
  

 	
 10685

 
	
 26

 	
  

 	
 MSC WASHINGTON

 	
  

 	
 GREEK

 	
  

 	
 10671

 
	
 27

 	
  

 	
 MSC TOBA

 	
  

 	
 GREEK

 	
  

 	
 11164

 
	
 28

 	
  

 	
 MSC KYOTO

 	
  

 	
 GREEK

 	
  

 	
 11160

 
	
 29

 	
  

 	
 MAERSK TOYAMA

 	
  

 	
 GREEK

 	
  

 	
 10535

 
	
 30

 	
  

 	
 CAP AKRITAS

 	
  

 	
 HONG KONG

 	
  

 	
 HK1812

 
	
 31

 	
  

 	
 GARDEN

 	
  

 	
 LIBERIA

 	
  

 	
 13710

 
	
 32

 	
  

 	
 GENTLE

 	
  

 	
 LIBERIA

 	
  

 	
 13711

 
	
 33

 	
  

 	
 GATHER

 	
  

 	
 LIBERIA

 	
  

 	
 13709

 
	
 34

 	
  

 	
 GEM

 	
  

 	
 LIBERIA

 	
  

 	
 13712

 
	
 35

 	
  

 	
 MSC AUSTRIA

 	
  

 	
 LIBERIA

 	
  

 	
 11596

 

100

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 VESSEL’S NAME

 	
  

 	
 FLAG

 	
  

 	
 REGISTRATION NO.

 OFFICIAL NO.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 36

 	
  

 	
 MSC GERMANY

 	
  

 	
 LIBERIA

 	
  

 	
 11597

 
	
 37

 	
  

 	
 MSC MEXICO

 	
  

 	
 LIBERIA

 	
  

 	
 11598

 
	
 38

 	
  

 	
 HYUNDAI CHALLENGER

 	
  

 	
 HONG KONG

 	
  

 	
 HK2105

 
	
 39

 	
  

 	
 MSC ANTWERP

 	
  

 	
 GREEK

 	
  

 	
 10274

 
	
 40

 	
  

 	
 MSC YOKOHAMA

 	
  

 	
 GREEK

 	
  

 	
 10367

 
	
 41

 	
  

 	
 MSC NAMIBIA

 	
  

 	
 GREEK

 	
  

 	
 10059

 
	
 42

 	
  

 	
 MSC SUDAN

 	
  

 	
 GREEK

 	
  

 	
 10099

 
	
 43

 	
  

 	
 SIERRA EXPRESS

 	
  

 	
 GREEK

 	
  

 	
 10084

 
	
 44

 	
  

 	
 MSC TOGO

 	
  

 	
 LIBERIA

 	
  

 	
 13020

 
	
 45

 	
  

 	
 MSC TUSCANY

 	
  

 	
 GREEK

 	
  

 	
 9842

 
	
 46

 	
  

 	
 MSC SICILY

 	
  

 	
 HONG KONG

 	
  

 	
 HK2190

 
	
 47

 	
  

 	
 MSC ROMANIA II

 	
  

 	
 LIBERIA

 	
  

 	
 11458

 
	
 48

 	
  

 	
 MSC VENICE

 	
  

 	
 LIBERIA

 	
  

 	
 11459

 
	
 49

 	
  

 	
 WESTMED II

 	
  

 	
 LIBERIA

 	
  

 	
 11456

 
	
 50

 	
  

 	
 HORIZON

 	
  

 	
 MALTA

 	
  

 	
 09770

 
	
 51

 	
  

 	
 WINDWARD

 	
  

 	
 LIBERIA

 	
  

 	
 11457

 
	
 52

 	
  

 	
 CITY OF GLASGOW

 	
  

 	
 HONG KONG

 	
  

 	
 HK1680

 
	
 53

 	
  

 	
 LIGURIA

 	
  

 	
 HONG KONG

 	
  

 	
 HK1679

 

101

Schedule 10

Form of Compliance Certificate

(referred to in clause 8.1.5)

	
  

 	
  

 	
  

 
	
 To:

 	
Deutsche Schiffsbank Aktiengesellschaft, 

 
	
  

 	
 Domshof 17, 28195 Bremen, 

 
	
  

 	
 Federal
 Republic of Germany 

 
	
  

 	
 (the “Agent”)

 
	
  

 	
  

 
	
 From: 

 	
 COSTAMARE
 INC.

 
	
  

 	
  

 
	
  

 	
 (the “Borrower”)

 	
 Dated: [  ]

 

Re: Facility Agreement for up to
US$1,000,000,000 dated 22nd July, 2008 (the “Facility Agreement”).

Terms defined
in the Facility Agreement shall have the same meaning when used herein.

I, [  ],
being the CFO of the Borrower, refer to clause 8.1.5 of the Agreement and
hereby certify that, as at [insert date of accounts] and on the date hereof;

	
  

 	
  

 	
  

 
	
 1.

 	
 Financial
 Covenants:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the ratio of
 Total Liabilities (after deducting all Cash and Cash Equivalents) to Market
 Value Adjusted Total Assets (after deducting all Cash and Cash Equivalents)
 in respect of the financial [period/year] concerned is [  ]
 calculated as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the ratio of
 EBITDA over Net Interest Expense is [  ]
 calculated as follows;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Borrower
 maintains Cash and Cash Equivalents of US$[...........] (...........) in accounts with
 the Arrangers; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 the Borrower
 maintains Market Value Adjusted Net Worth of US$[.............] (............ Dollars)
 calculated as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 [..............]

 
	
  

 	
  

 	
  

 
	
 2.

 	
 Default:

 

[No Event of
Default has occurred and is continuing]

or

[The following
Event of Default has occurred and in continuing: [provide details of Event of
Default]. [The following steps are being taken to remedy it: [provide details
of steps being taken to remedy the Event of Default]].

COSTAMARE INC.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signed:

 	
  

 	
  

 
	
  

 	
  

 	
 Chief
 Financial Officer

 

102

EXECUTION PAGES

	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 	
  

 
	
 Mr.
 Konstantinos V. Konstantakopoulos

 	
 )

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 
	
 COSTAMARE INC.,

 	
 )

 	
  

 	
  

 
	
 as Borrower

 	
 )

 	
  

 	
  

 
	
 in the
 presence of:

 	
 )

 	
 Attorney-in-fact

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 Witness: 

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Konstantinos
 Zacharatos

 
	
 Address:

 	
  

 	
 60 Zephyrou
 Street, Pal. Faliro,

 
	
  

 	
 175.64
 Athens, Greece

 
	
 Occupation: 

 	
 Attorney-at-Law

 

	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 	
  

 
	
 Mr. Klaus
 Pieper and Mr. Achim Boehme

 	
 )

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 
	
Deutsche Schiffsbank Aktiengesellschaft,

 	
 )

 	
  

 	
  

 
	
 as joint
 Arranger, Security Agent, Swap Bank,

 	
 )

 	
  

 	
  

 
	
 Agent and
 Lender

 	
 )

 	
  

 	
  

 
	
 in the
 presence of:

 	
 )

 	
 Attorney-in-fact

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 Witness: 

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Angeliki C.
 Arcadis

 
	
 Address:

 	
  

 	
 13 Defteras
 Merarchias Street

 
	
  

 	
 185 35
 Piraeus, Greece

 
	
 Occupation: 

 	
 Attorney-at-Law

 

	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 	
  

 
	
 Mr.
 Vassilios Mantzavinos

 	
 )

 	
  

 	
  

 
	
 and Mrs.
 Anastasia Kerpinioti

 	
 )

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
 Attorney-in-fact

 	
  

 
	
Bayerische Hypo-Und

 	
 )

 	
  

 	
  

 
	
Vereinsbank Aktiengesellschaft,

 	
 )

 	
  

 	
  

 
	
 as joint
 Arranger,

 	
 )

 	
  

 	
  

 
	
 Account
 Bank, Swap Bank and Lender

 	
 )

 	
  

 	
  

 
	
 in the
 presence of:

 	
 )

 	
 Attorney-in-fact

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 Witness: 

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Angeliki C.
 Arcadis

 
	
 Address:

 	
  

 	
 13 Defteras
 Merarchias Street

 
	
  

 	
 185 35
 Piraeus, Greece

 
	
 Occupation: 

 	
 Attorney-at-Law

 

103

	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 	
  

 
	
 Mr. Mario
 Béhé

 	
 )

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 
	
 Credit Suisse,

 	
 )

 	
  

 	
  

 
	
 as Lender

 	
 )

 	
  

 	
  

 
	
 in the
 presence of:

 	
 )

 	
 Authorised Officer

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 Witness: 

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Angeliki C.
 Arcadis

 
	
 Address:

 	
  

 	
 13 Defteras
 Merarchias Street

 
	
  

 	
 185 35
 Piraeus, Greece

 
	
 Occupation: 

 	
 Attorney-at-Law

 

	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 	
  

 
	
 Mr. George
 Arcadis and Dimitris Christacopoulos

 	
 )

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
 Authorised Officer

 	
  

 
	
 Fortis Bank S.A./N.V.,

 	
)

 	
  

 	
  

 
	
 as Lender

 	
 )

 	
  

 	
  

 
	
 in the
 presence of:

 	
 )

 	
  

 	
  

 
	
 Attorney-in-fact

 	
 )

 	
 Authorised Officer

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 Witness: 

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Angeliki C.
 Arcadis

 
	
 Address:

 	
  

 	
 13 Defteras
 Merarchias Street

 
	
  

 	
 185 35
 Piraeus, Greece

 
	
 Occupation: 

 	
 Attorney-at-Law

 

	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by

 	
 )

 	
  

 	
  

 
	
 Mr. Charalambos
 V. Sioufas

 	
 )

 	
  

 	
  

 
	
 for and on
 behalf of

 	
 )

 	
  

 	
  

 
	
 HSH Nordbank AG,

 	
 )

 	
  

 	
  

 
	
 as Lender
 and Swap Bank

 	
 )

 	
  

 	
  

 
	
 in the
 presence of:

 	
 )

 	
 Attorney-in-fact

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 Witness: 

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Angeliki C.
 Arcadis

 
	
 Address:

 	
  

 	
 13 Defteras
 Merarchias Street

 
	
  

 	
 185 35
 Piraeus, Greece

 
	
 Occupation: 

 	
 Attorney-at-Law

 

104

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]