Document:

EX-4.25

Private and Confidential

DATED February 2008

STEALTHGAS INC.

as Borrower

and

DEUTSCHE BANK AG

FILIALE DEUTSCHLANDGESCHÄFT

as Lender

 

FACILITY AGREEMENT FOR A

TERM LOAN of up to

USD40,250,000

 

 

 

Index

	 	 	 	 	 
	Clause	 	Page
	 
	 	 	 	 
	1     PURPOSE, DEFINITIONS, CONSTRUCTION

	 	 	3	 
	 
	 	 	 	 
	2     THE LENDER’S COMMITMENT, LOAN AND USE OF PROCEEDS

	 	 	10	 
	 
	 	 	 	 
	3     INTEREST AND INTEREST PERIODS

	 	 	11	 
	 
	 	 	 	 
	4     REPAYMENT AND PREPAYMENT

	 	 	13	 
	 
	 	 	 	 
	5     FEES AND EXPENSES

	 	 	15	 
	 
	 	 	 	 
	6     PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS

	 	 	16	 
	 
	 	 	 	 
	7     REPRESENTATIONS AND WARRANTIES

	 	 	17	 
	 
	 	 	 	 
	8     UNDERTAKINGS

	 	 	21	 
	 
	 	 	 	 
	9     CONDITIONS

	 	 	27	 
	 
	 	 	 	 
	10    EVENTS OF DEFAULT

	 	 	28	 
	 
	 	 	 	 
	11    INDEMNITIES

	 	 	31	 
	 
	 	 	 	 
	12    UNLAWFULNESS AND INCREASED COSTS

	 	 	32	 
	 
	 	 	 	 
	13    APPLICATION OF MONEYS, SET OFF, AND MISCELLANEOUS

	 	 	33	 
	 
	 	 	 	 
	14    ACCOUNTS AND RETENTIONS

	 	 	35	 
	 
	 	 	 	 
	15    ASSIGNMENT, TRANSFER AND LENDING OFFICE

	 	 	36	 
	 
	 	 	 	 
	16    NOTICES AND OTHER MATTERS

	 	 	37	 
	 
	 	 	 	 
	17    GOVERNING LAW

	 	 	38	 
	 
	 	 	 	 
	18    JURISDICTION

	 	 	38	 
	 
	 	 	 	 
	SCHEDULE 1 FORM OF DRAWDOWN NOTICE

	 	 	41	 
	 
	 	 	 	 
	SCHEDULE 2 CONDITIONS PRECEDENT PART 1

	 	 	42	 
	 
	 	 	 	 
	CONDITIONS PRECEDENT PART 2

	 	 	43	 
	 
	 	 	 	 
	SCHEDULE 3 FORM OF COMPLIANCE CERTIFICATE

	 	 	545	 
	 
	 	 	 	 
	EXECUTION PAGES

	 	 	56	 

 

 

THIS AGREEMENT dated            February 2008 is made BY and BETWEEN:

	(1)	 	STEALTHGAS INC. as Borrower;
	 
	(2)	 	DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT as Lender;

NOW IT IS HEREBY AGREED AS FOLLOWS:

	1	 	PURPOSE, DEFINITIONS, CONSTRUCTION
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions on which the Lender agrees to make
available to the Borrower a term loan of up to forty million two hundred and fifty
thousand Dollars (USD 40,250,000) in one advance for the purpose of enabling the Borrower
to on-lend the same to its subsidiary MR Roi Inc. to finance the purchase of the oil
products and chemical tanker of 48,000 dwt under construction by Sungdong Shipbuilding and
Marine Engineering Co. Ltd. of South Korea with Hull no. 3014 (tbr “NAVIG8 FAITH”).
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	“Approved Broker” means each of (i) H Clarkson & Co. Ltd. of St Magnus House, 3 Lower
Thames Street, London EC3R 6HE, England, (ii) RS Platou of Haakon VII’s gate 10
N-0119 Oslo Norway, (iii) Galbraiths of Bridgegate House, 124-126 Borough High
Street, London SE1 1BL, England, (iv) Fearnleys of Grev Wedels Plass 9, P.O.Box 1158,
Sentrum 0107 Oslo, Norway and (v) AP Moeller of Copenhagen or such other reputable,
independent and first class firm of shipbrokers specialising in the valuation of
vessels of the relevant type appointed by the Lender and agreed with the Borrower;
	 
	 	 	“Approved Charter” means, in relation to the Vessel, the seven year bareboat charterparty
dated 23 November 2007 made between the Guarantor and the Approved Charterer at a daily
charterhire rate of USD15,295 (USD15,200 net);
	 
	 	 	“Approved Charterer” means Navig8 Faith Corporation of the Marshall Islands;
	 
	 	 	“Approved Manager” means, in respect of the Vessel when subject to the Approved Charter,
or an Extended Employment Contract (as the case may be) such person as is notified to and
accepted by the Lender prior to the Execution Date as technical manager and at all other
times, and at all times as commercial manager, Stealth Maritime Corporation S.A. acting
through its office at 331 Kifissias Avenue, 145 61, Athens, Greece, or any other person
appointed by the Borrower, with the prior written consent of the Lender, as the manager of
the Vessel;
	 
	 	 	“Banking Day” means a day on which dealings in deposits in USD are carried on in the
London Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks
are open for business in London, Athens, Hamburg 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;
	 
	 	 	“Borrower” means StealthGas Inc., a company listed in NASDAQ and incorporated in the
Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Marshall Islands, MH96960;
	 
	 	 	“Break Costs” means the aggregate amount of all losses, premiums, penalties, costs and
expenses whatsoever certified by the Lender at any time and from time to time as having
been incurred by the Lender in maintaining or funding the Loan or any part thereof or in
liquidating or re-employing fixed deposits acquired to maintain the same as a result of
either:

	 	(a)	 	any repayment or prepayment of the Loan or any part thereof otherwise than
(i) in accordance with clause 4.1 or (ii) on an Interest Payment Date whether on a
voluntary or involuntary basis or otherwise howsoever; or
	 
	 	(b)	 	as a result of the Borrower failing or being incapable of drawing the Loan
after the Drawdown Notice has been given;

	 	 	“Builder” means Sungdong Shipbuilding and Marine Engineering Co. Ltd. of South Korea;
	 
	 	 	“Certified Copy” means in relation to any document delivered or issued by or on behalf of
any company, a copy of such document certified as a true, complete and up to date copy of
the original by any of the directors or officers for the time being of such company or by
such company’s attorneys or solicitors;
	 
	 	 	“Charter Assignment” means a specific assignment of the Approved Charter, of any
assignment of earnings executed by the Approved Charterer in favour of the Guarantor and
of the Charter Guarantee or, following the expiry of the Approved Charter, of any Extended
Employment Contract required to be executed hereunder by the Guarantor in favour of the
Lender (including any notices and/or acknowledgements and/or undertakings associated
therewith) in such form as the Lender may require;
	 
	 	 	“Charter Guarantee” means the guarantee issued or to be issued by DVB Bank AG in favour of
the Guarantor for up to USD4,750,000 in respect of the Approved Charterer’s obligations
under the Approved Charter;
	 
	 	 	“Classification” means, in relation to the Vessel, the highest class available for a
vessel of her type with the Classification Society;
	 
	 	 	“Classification Society” means any classification society which is a member of the
International Association of Classification Societies and which the Lender has agreed
shall be treated as the classification society in relation to the Vessel for the purposes
of the Vessel Security Documents;
	 
	 	 	“Commitment” means the maximum amount which the Lender has agreed to lend to the Borrower
under clause 2.1, as reduced by any relevant term of this Agreement;

2

 

	 	 	“Compliance Certificate” means a certificate substantially in the form set out in schedule
3 signed by the chief financial officers of the Borrower and the Guarantor;
	 
	 	 	“Compulsory Acquisition” means, in respect of the Vessel, requisition for title or other
compulsory acquisition including, if that ship is not released therefrom within the
Relevant Period, capture, appropriation, forfeiture, seizure, detention, deprivation or
confiscation howsoever for any reason (but excluding requisition for use or hire) by or on
behalf of any Government Entity or other competent authority or by pirates, hijackers,
terrorists or similar persons; “Relevant Period” means for the purposes of this definition
of Compulsory Acquisition either (i) sixty (60) days or, (ii) if relevant underwriters
confirm in writing (in terms satisfactory to the Lender) prior to the end of such sixty
(60) day period that such capture, seizure, detention or confiscation will be fully
covered by the Guarantor’s war risks insurance for a further period exceeding ten (10)
calendar months, the shorter of twelve (12) months and such period at the end of which
cover is confirmed to attach;
	 
	 	 	“Credit Support Document” has in relation to the Master Agreement, the meaning given to
that expression therein;
	 
	 	 	“Credit Support Provider” means any person defined as such in the Master Agreement;
	 
	 	 	“Default” means any Event of Default or any event or circumstance which with the giving of
notice or lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
	 
	 	 	“Dollars” and “USD” mean the lawful currency of the United States of America and in
respect of all payments to be made under any of the Security Documents means funds which
are for same day settlement in the New York Clearing House Interbank Payments System (or
such other US dollar funds as may at the relevant time be customary for the settlement of
international banking transactions denominated in US dollars);
	 
	 	 	“Drawdown Date” means any date being a Banking Day falling during the Drawdown Period, on
which the Loan is, or is to be, made available;
	 
	 	 	“Drawdown Notice” means a notice substantially in the form of schedule 1;
	 
	 	 	“Drawdown Period” means the period commencing on the Execution Date and ending on the
earlier of (i) 30 April 2008 and (ii) any date on which the Loan is finally cancelled or
drawn under the terms of this Agreement;
	 
	 	 	“Earnings Account” means an interest bearing USD current account of the Guarantor opened
with the Lender and includes any sub-accounts thereof and any other account designated in
writing by the Lender to be the Earnings Account for the purposes of this Agreement;
	 
	 	 	“Earnings Account Pledge” means a first priority pledge required to be executed hereunder
between the Guarantor and the Lender in respect of the Earnings Account in such form as
the Lender may require;
	 
	 	 	“EBITDA” means, at any time, in respect of the preceding four financial quarters, the
aggregate amount of consolidated pre-tax profits of the Group before extraordinary or
exceptional items, interest, depreciation and amortisation;
	 
	 	 	“Encumbrance” means any mortgage, charge, pledge, lien, hypothecation, assignment, title
retention, preferential right, option, trust arrangement or security interest or other
encumbrance, security or arrangement conferring howsoever a priority of payment in respect
of any obligation of any person;

3

 

	 	 	“Environmental Affiliate” means any agent or employee of the Borrower, the Approved
Manager (but only in its capacity as technical manager of a Relevant Ship), the Guarantor
or any other Group Member;
	 
	 	 	“Environmental Approval” means any consent, authorisation, licence or approval of any
governmental or public body or authorities or courts applicable to any Relevant Ship or
its operation or the carriage of cargo and/or passengers thereon and/or the provision of
goods and/or services on or from any Relevant Ship required under any Environmental Law;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable Government
Entity alleging breach of, or non-compliance with, any Environmental Laws or Environmental
Approvals or otherwise howsoever relating to or arising out of an Environmental Incident
or (ii) any claim by any other third party howsoever relating to or arising out of an
Environmental Incident (and, in each such case, “claim” shall include a claim for damages
and/or direction for and/or enforcement relating to clean-up costs, removal, compliance,
remedial action or otherwise) or (iii) any Proceedings arising from any of the foregoing;
	 
	 	 	“Environmental Incident” means, regardless of cause, (i) any actual or threatened
discharge or release of Environmentally Sensitive Material from any Relevant Ship; (ii)
any incident in which Environmentally Sensitive Material is discharged or released from a
vessel other than a Relevant Ship which involves collision between a Relevant Ship and
such other vessel or some other incident of navigation or operation, in either case, where
the Relevant Ship, the Approved Manager and/or the Guarantor and/or the relevant Group
Member and/or the relevant Operator are actually, contingently or allegedly at fault or
otherwise howsoever liable (in whole or in part) or (iii) any incident in which
Environmentally Sensitive Material is discharged or released from a vessel other than a
Relevant Ship and where such Relevant Ship is actually or potentially liable to be
arrested as a result and/or the Approved Manager and/or the Guarantor and/or other Group
Member and/or the relevant Operator are actually, contingently or allegedly at fault or
otherwise howsoever liable;
	 
	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements whatsoever
relating to pollution, human or wildlife well-being or protection of the environment
(including, without limitation, the United States Oil Pollution Act of 1990 and any
comparable laws of the individual States of the USA);
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products or any other products or
substance which are polluting, toxic or hazardous or any substance the release of which
into the environment is howsoever regulated, prohibited or penalised by or pursuant to any
Environmental Law;
	 
	 	 	“Event of Default” means any of the events or circumstances listed in clause 10.1;
	 
	 	 	“Execution Date” means the date on which this Agreement has been executed by all the
parties hereto;
	 
	 	 	“Extended Employment Contract” means any time charterparty, contract of affreightment or
other contract of employment of the Vessel (including the entry of the Vessel in any pool)
which has a tenor of not less than twelve (12) months (including any options to renew or
extend such tenor);
	 
	 	 	“Facility Period” means the period starting on the date of this Agreement and ending on
such date as all obligations whatsoever of all of the Security Parties under or pursuant
to the Security Documents whensoever arising, actual or contingent, have been irrevocably
paid, performed and/or complied with;

4

 

	 	 	“Free Cash Flow” means, at any time, in respect of the preceding four financial quarters
the amount calculated by reference to the Latest Accounts to be (a) the aggregate gross
revenue (as defined in the relevant Latest Accounts) of the Group received during such 12
month period, less (b) the aggregate of (i) costs incurred by the Group related to the
ownership and operation of ships and acceptable (to the Lender) administrative expenses
(each as set out in the relevant Latest Accounts), (ii) the Interest Expenses net of
interest income (as defined in the relevant Latest Accounts) of the Group and (iii) the
aggregate of any principal amounts repaid to any lender by the Group in respect of any
Borrowed Money during such 12 month period;
	 
	 	 	“General Assignment” means the first priority deed of assignment of the Earnings,
Insurances and Requisition Compensation (each as defined therein) executed or to be
executed by the Guarantor in favour of the Lender in such form as the Lender may require;
	 
	 	 	“Government Entity” means any national or local government body, tribunal, court or
regulatory or other agency and any organisation of which such body, tribunal, court or
agency is a part or to which it is subject;
	 
	 	 	“Group” means the Borrower and its subsidiaries;
	 
	 	 	“Group Member” means any member of the Group;
	 
	 	 	“Guarantee” means each unconditional, irrevocable and on first demand guarantee of the
obligations of the Borrower under this Agreement and the Master Agreement required to be
executed by the Guarantor in favour of the Lender in such form as the Lender may require;
	 
	 	 	“Guarantor” means MR Roi Inc. which is incorporated in the Marshall Islands, and has its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands, MH96960:
	 
	 	 	“Indebtedness” means any obligation howsoever arising (whether present or future, actual
or contingent, secured or unsecured as principal, surety or otherwise) for the payment or
repayment of money;
	 
	 	 	“Interest Expense” means, at any time, for the preceding four financial quarters, the
aggregate interest which was payable by the Group Members on any Borrowed Moneys during
such period;
	 
	 	 	“Interest Payment Date” means the last day of an Interest Period and, if an Interest
Period is longer than three (3) months, the date falling at the end of each successive
period of three (3) months from the start of such Interest Period;
	 
	 	 	“Interest Period” means each period for the calculation of interest in respect of the Loan
as ascertained in accordance with clauses 3.2 and 3.3;
	 
	 	 	“ISM Code Documentation” means, in relation to the Vessel, the document of compliance
(DOC) and safety management certificate (SMC) issued by a Classification Society pursuant
to the ISM Code in relation to the Vessel within the periods specified by the ISM Code;
	 
	 	 	“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 Organisation and includes any amendments or extensions thereto and any
regulations issued pursuant thereto;

5

 

	 	 	“ISSC” means an International Ship Security Certificate issued in respect of the Vessel
pursuant to the ISPS Code;
	 
	 	 	“Latest Accounts” means (i) in respect of any financial year of the Borrower and/or the
Guarantor and/or the Group, the latest audited financial statements required to be
prepared pursuant to clause 8.1.6 or (ii) in relation to any other 2 consecutive financial
half-years of the Borrower and/or the Group, the latest unaudited financial statements
required to be prepared pursuant to clause 8.1.6 in relation to the relevant semi-annual
periods;
	 
	 	 	“Lender” means Deutsche Bank AG Filiale Deutschlandgeschäft, Frankfurt am Main, Federal
Republic of Germany, acting through its office at Ludwig-Erhard-Strasse 1, 20459 Hamburg,
Germany;
	 
	 	 	“LIBOR” means, for a particular period, the rate equal to the offered quotation for
deposits in USD in an amount comparable with the amount in relation to which LIBOR is to
be determined for a period equal to, or as near as possible equal to, the relevant period
which appears on Reuters Screen LIBOR01 at or about 11 a.m. on the second Banking Day
before the first day of such period (and, for the purposes of this Agreement, “Reuters
Screen LIBOR01” means the display designated as “LIBOR01” on the Reuters Service or such
other page as may replace LIBOR01 on that service for the purpose of displaying rates
comparable to that rate or on such other service as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying the British
Bankers’ Association Interest Settlement Rates for USD);
	 
	 	 	“Loan” means the aggregate principal amount of up to USD40,250,000 or, as the context may
require, the amount owing to the Lender under this Agreement at any relevant time;
	 
	 	 	“Management Agreement” means, in respect of the Vessel, the agreement between the
Guarantor and the Approved Manager, in a form previously approved by the Lender;
	 
	 	 	“Manager’s Undertaking” means the undertaking and assignment required to be executed
hereunder by the Approved Manager in favour of the Lender in respect of the Vessel, in
such form as the Lender may require;
	 
	 	 	“Margin” means, in relation to each Interest Period, 0.70% per annum;
	 
	 	 	“Master Agreement” means a 2002 ISDA Master Agreement (with Schedule thereto) made or to
be made between the Lender (using the name Deutsche Bank AG) and the Borrower;
	 
	 	 	“Master Agreement Assignment” means the security deed in respect of the Master Agreement
executed or to be executed by the Borrower in favour of the Lender in such form as the
Lender may require;
	 
	 	 	“Material Adverse Change” means any event or occurrence which the Lender reasonably
determines has had or could reasonably be expected to have a material adverse effect on
(i) the Lender’s rights under, or the security provided by, any Security Document, (ii)
the ability of any Security Party to perform or comply with any of its obligations under
any Security Document or (iii) the value or nature of the property, assets, operations,
liabilities or financial condition of any member of the Group;
	 
	 	 	“Maturity Date” means the earlier of (i) 30 April 2020 and (ii) the date falling 12 years
after the Drawdown Date;
	 
	 	 	“MII & MAP Policy” means a mortgagee’s interest insurance and a mortgagee’s interest
insurance additional perils (pollution) in respect of the Vessel to be effected by the
Lender on

6

 

	 	 	or before the Drawdown Date to cover the Vessel as the same may be renewed or replaced
annually thereafter and maintained throughout the Facility Period through such brokers,
with such underwriters and containing such coverage as may be acceptable to the Lender in
its sole discretion, insuring with respect to mortgagee’s interest insurance a sum of at
least one hundred and ten per cent (110%) of the Loan;
	 
	 	 	“MOA” means the memorandum of agreement dated 27 November 2007 made in respect
of the Vessel between the Seller and the Guarantor as buyer for a gross purchase
price of USD 57,500,000;
	 
	 	 	“month” means a period beginning in one calendar month and ending in the next calendar
month on the day numerically corresponding to the day of the calendar month on which it
started, provided that (a) if the period started on the last Banking Day in a calendar
month or if there is no such numerically corresponding day, it shall end on the last
Banking Day in such next calendar month and (b) if such numerically corresponding day is
not a Banking Day, the period shall end on the next following Banking Day in the same
calendar month but if there is no such Banking Day it shall end on the preceding Banking
Day and “months” and “monthly” shall be construed accordingly;
	 
	 	 	“Mortgage” means the first preferred Marshall Islands Ship mortgage over the Vessel
required to be executed by the Guarantor in favour of the Lender in such form as the
Lender may require;
	 
	 	 	“Operator” means any person who is from time to time during the Facility Period concerned
in the operation of a Relevant Ship and falls within the definition of “Company” set out
in rule 1.1.2 of the ISM Code;
	 
	 	 	“Permitted Encumbrance” means any Encumbrance in favour of the Lender created pursuant to
the Security Documents and Permitted Liens;
	 
	 	 	“Permitted Liens” means any lien on the Vessel for master’s, officer’s or crew’s wages
outstanding in the ordinary course of trading, any lien for salvage and any ship
repairer’s or outfitter’s possessory lien for a sum not (except with the prior written
consent of the Lender) exceeding the Casualty Amount (as defined in the Vessel Security
Documents);
	 
	 	 	“Pertinent Jurisdiction” means any jurisdiction in which or where any Security Party is
incorporated, resident, domiciled, has a permanent establishment or assets, carries on, or
has a place of business or is otherwise howsoever effectively connected;
	 
	 	 	“Proceedings” means any litigation, arbitration, legal action or complaint or judicial,
quasi-judicial or administrative proceedings whatsoever arising or instigated by anyone
(private or governmental) in any court, tribunal, public office or other forum whatsoever
and wheresoever (including, without limitation, any action for provisional or permanent
attachment of any thing or for injunctive remedies or interim relief and any action
instigated on an ex parte basis);
	 
	 	 	“Registry” means, in relation to the Vessel, the office of the registrar, commissioner or
representative of the Marshall Islands, who is duly empowered to register such Vessel, the
Guarantor’s title thereto and the Mortgage under the laws and flag of the Marshall
Islands;
	 
	 	 	“Relevant Ship” means the Vessel and any other ship from time to time (whether before or
after the date of this Agreement) owned, managed or crewed by, or chartered to, any Group
Member;

7

 

	 	 	“Repayment Date” means the date on which any instalment of the Loan is repayable
under the provisions of clause 4.1.1;
	 
	 	 	“Required Authorisation” means any authorisation, consent, declaration, licence, permit,
exemption, approval or other document, whether imposed by or arising in connection with
any law, regulation, custom, contract, security or otherwise howsoever which must be
obtained at any time from any person, Government Entity, central bank or other
self-regulating or supra-national authority in order to enable the Borrower lawfully to
borrow the Loan and/or to enable any Security Party lawfully and continuously to continue
its corporate existence and/or perform all its obligations whatsoever whensoever arising
and/or grant security under the relevant Security Documents and/or to ensure the
continuous validity and enforceability thereof;
	 
	 	 	“Required Security Amount” means the amount in USD (as certified by the Lender) which is
at any time one hundred and twenty five per cent (125%) of the Loan;
	 
	 	 	“Security Documents” means this Agreement, the Master Agreement, the Master Agreement
Assignment, the Mortgage, the Guarantee, the General Assignment, the Charter Assignment,
the Earnings Account Pledge, the Manager’s Undertaking, the Tripartite Deed and any other
documents as may have been or shall from time to time after the date of this Agreement be
executed to guarantee and/or to govern and/or secure all or any part of the Loan, interest
thereon and other moneys from time to time owing by the Borrower pursuant to this
Agreement and/or the Master Agreement (whether or not any such document also secures
moneys from time to time owing pursuant to any other document or agreement);
	 
	 	 	“Security Party” means the Borrower, the Approved Manager, the Guarantor or any other
person who may at any time be a party to any of the Security Documents (other than the
Lender);
	 
	 	 	“Security Value” means the amount in USD (as certified by the Lender) which is, at
any time, the aggregate of (a) the Valuation Amount of the Vessel as most recently
determined in accordance with clause 8.2.2 and (b) the net realizable market value of any
additional security for the time being actually provided to the Lender pursuant to clause
8.2.1(b) or otherwise;
	 
	 	 	“Seller” means Navig8 Faith Corporation of the Marshall Islands;
	 
	 	 	“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;
	 
	 	 	“Taxes” includes all present and future income, corporation, capital or value-added
taxes and all stamp and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and penalties in respect thereto,
if any, and charges, fees or other amounts made on or in respect thereof (and “Taxation”
shall be construed accordingly);
	 
	 	 	“Total Assets” and “Total Debt” shall have the meanings assigned to them in accordance
with International Financial Reporting Standards;
	 
	 	 	“Total Loss” means:

	 	(a)	 	actual, constructive, compromised or arranged total loss of the Vessel; or
	 
	 	(b)	 	Compulsory Acquisition; or

8

 

	 	(c)	 	any hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of the Vessel not falling within the definition of Compulsory
Acquisition by any Government Entity, or by persons allegedly acting or purporting
to act on behalf of any Government Entity, unless the Vessel be released and restored
to the Guarantor within thirty (30) days after such incident;

	 	 	“Transaction” means a Transaction as defined in the Master Agreement;
	 
	 	 	“Tripartite Deed” means the deed containing (inter alia) an assignment of the Approved
Charterer’s interest in the insurances of the Vessel, required to be executed by the
Guarantor and Approved Charterer in favour of the Lender in such form as the Lender may
require in its sole discretion;
	 
	 	 	“Underlying Documents” means, together, any Extended Employment Contracts, the
Approved Charter, the Charter Guarantee, any assignment of earnings executed by the
Approved Charterer in favour of the Guarantor and the Management Agreement;
	 
	 	 	“Unencumbered Liquid Assets” means cash or cash equivalents (including marketable
securities) which are not subject, at any relevant time, to any Encumbrance;
	 
	 	 	“Unlawfulness” means any event or circumstance which either is or, as the case may be,
might in the opinion of the Lender become the subject of a notification by the Lender to
the Borrower under clause 12.1;
	 
	 	 	“Valuation Amount” means the value of the Vessel as most recently determined under clause
8.2.2;
	 
	 	 	“Vessel” means the oil products and chemical tanker presently being constructed by the
Builder with Hull no. 3014 and to be acquired by the Guarantor and registered in its
ownership on the Marshall Islands flag with the name “NAVIG8 FAITH”; and
	 
	 	 	“Vessel Security Documents” means the Mortgage, the General Assignment, the Charter
Assignment (if any), the Tripartite Deed and the Manager’s Undertaking (if any);
	 
	1.3	 	Construction
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	1.3.1	 	clause headings and the index are inserted for convenience of reference only and shall be
ignored in the construction of this Agreement;
	 
	1.3.2	 	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 and any
supplemental agreements executed pursuant hereto;
	 
	1.3.3	 	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 duly amended and/or supplemented and/or novated;
	 
	1.3.4	 	references to a “regulation” include any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law) of any Government
Entity, central bank or any self-regulatory or other supra-national authority;
	 
	1.3.5	 	references to any person in or party to this Agreement shall include reference to such
person’s lawful successors and assigns;

9

 

	1.3.6	 	words importing the plural shall include the singular and vice versa;
	 
	1.3.7	 	references to a time of day are, unless otherwise stated, to Frankfurt am Main time;
	 
	1.3.8	 	references to a person shall be construed as references to an individual, firm, company,
corporation or unincorporated body of persons or any Government Entity;
	 
	1.3.9	 	references to a “guarantee” include references to an indemnity or any other kind of
assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill
or note) against financial loss or other liability 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;
	 
	1.3.10	 	references to any statute or other legislative provision are to be construed as references
to any such statute or other legislative provision as the same may be re enacted or modified
or substituted by any subsequent statute or legislative provision (whether before or after the
date hereof) and shall include any regulations, orders, instruments or other subordinate
legislation issued or made under such statute or legislative provision;
	 
	1.3.11	 	a certificate by the Lender as to any amount due or calculation made or any matter
whatsoever determined in connection with this Agreement shall be conclusive and binding on the
Borrower except for manifest error;
	 
	1.3.12	 	time shall be of the essence in respect of all obligations whatsoever of the Borrower under
this Agreement, howsoever and whensoever arising;
	 
	1.3.13	 	and the words “other” and “otherwise” shall not be construed eiusdem generis with any
foregoing words where a wider construction is possible.
	 
	1.4	 	Contracts (Rights of Third Parties Act) 1999
	 
	 	 	Except for clause 18, no part of this Agreement shall be enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
	 
	2	 	THE LENDER’S COMMITMENT, LOAN AND USE OF PROCEEDS
	 
	2.1	 	The Commitment
	 
	 	 	In reliance upon each of the representations and warranties in clause 7, the Lender agrees
to lend to the Borrower on the terms of this Agreement the principal sum of up to
USD40,250,000.
	 
	2.2	 	Advance
	 
	 	 	On the terms and subject to the conditions of this Agreement, the Loan shall be made
available on the Drawdown Date following receipt by the Lender from the Borrower of a
Drawdown Notice not later than 11.00 a.m. on the second Banking Day before the proposed
Drawdown Date. The Drawdown Notice shall be effective on actual receipt by the Lender
and, once given, shall, subject as provided in clause 3.6.1, be irrevocable.
	 
	2.3	 	Amount
	 
	 	 	The principal amount specified in the Drawdown Notice for borrowing on the Drawdown Date
shall, subject to the terms of this Agreement, not exceed the lesser of (i) 70% of the
gross purchase price payable by the Guarantor to the Seller under the MOA or (ii) USD
40,250,000

10

 

	 	 	provided that if drawdown of the Loan in such amount would immediately oblige the Borrower
to provide additional security or make a prepayment of the Loan in accordance with Clause
8.2, then the amount of the Loan shall be reduced so that no such additional security or
prepayment would be required.

	2.4	 	Availability
	 
	 	 	Upon receipt of the Drawdown Notice complying with the terms of this Agreement the Lender
shall, subject to the provisions of clause 9, make the Loan available to the Borrower on
the Drawdown Date. The Borrower acknowledges that payment of the Loan to the Seller or to
a suspense account in readiness for release to the Seller shall satisfy the obligation of
the Lender to lend the Loan to the Borrower under this Agreement.
	 
	2.5	 	Cancellation
	 
	 	 	If the Loan is not drawn down by the end of the Drawdown Period, the Commitment shall
thereupon be automatically cancelled and the Lender shall have no further obligation in
respect thereof under this Agreement.
	 
	2.6	 	Use of Proceeds
	 
	 	 	Without prejudice to the Borrower’s obligations under clause 8.1.4, the Lender shall have
no responsibility for the Borrower’s use of the proceeds of the Loan.
	 
	3	 	INTEREST AND INTEREST PERIODS
	 
	3.1	 	Normal interest rate
	 
	 	 	The Borrower must pay interest on the Loan in respect of each Interest Period relating
thereto on each Interest Payment Date at the rate per annum determined by the Lender to be
the aggregate of (a) the Margin and (b) LIBOR.
	 
	3.2	 	Selection of Interest Periods
	 
	 	 	Subject to clause 3.3, the Borrower may by notice received by the Lender not later than
10:00 a.m. on the fourth Banking Day before the beginning of each Interest Period specify
whether such Interest Period shall have a duration of three (3) months, six (6) or twelve
(12) months or such other period as the Borrower may select and the Lender may agree.
	 
	3.3	 	Determination of Interest Periods
	 
	 	 	Subject to Clause 3.3.1 every Interest Period shall be of the duration specified by the
Borrower pursuant to clause 3.2 but so that:
	 
	 	 	the first Interest Period shall start on the date the Loan is drawn and each
subsequent Interest Period shall start on the last day of the previous Interest
Period;
	 
	3.3.1	 	if any Interest Period would otherwise overrun a relevant Repayment Date, then the Loan
shall be divided into parts so that there is one part in the amount of the repayment
instalment due on such Repayment Date and having an Interest Period ending on the relevant
Repayment Date and another part in the amount of the balance of the Loan having an Interest
Period ascertained in accordance with clause 3.2 and the other provisions of this clause 3.3;
and

11

 

	3.3.2	 	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 (other than the Master Agreement), the Borrower must pay interest on such sum on
demand from the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Lender pursuant to this clause 3.4. The period
starting 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 Lender each of
which (other than the first, which shall start on such due date) shall start 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 Lender) of (a) two per cent (2%) per annum,
(b) the Margin and (c) LIBOR for such periods. Such interest shall be due and payable on
demand, or, if no demand is made, then on the last day of each such period as determined
by the Lender and on the day on which all amounts in respect of which interest is being
paid under this clause 3.4 are paid, 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 Lender
under clause 10.2.2 or a prepayment pursuant to clauses 4.3, 4.4, 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 Lender 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 Lender is unable to determine a rate in accordance with the
provisions of this clause 3.4, interest on any sum not paid on its due date for payment
shall be calculated at a rate determined by the Lender to be two per cent (2%) per annum
above the aggregate of the Margin and the cost of funds to the Lender compounded at such
intervals as the Lender selects.
	 
	3.5	 	Calculation of Margin and Notification of Interest Periods and interest rate
	 
	 	 	The Lender shall notify the Borrower promptly of each rate of interest determined by it
under this clause 3.
	 
	3.6	 	Market disruption; non-availability
	 
	3.6.1	 	Whenever, at any time prior to the start of any Interest Period, the Lender determines:

	 	(a)	 	that adequate and fair means do not exist for determining LIBOR during such
Interest Period; or
	 
	 	(b)	 	that deposits in USD are not available to the Lender in the London
Interbank Market in its ordinary course of business in sufficient amounts to fund the
Loan for such Interest Period;

	 	 	the Lender shall promptly give notice (a “Determination Notice”) thereof to the Borrower.
A Determination Notice shall give brief details of the circumstances giving rise to its
issue.
	 
	3.6.2	 	within ten (10) days of any Determination Notice being given by the Lender under clause
3.6.1, the Lender must certify an alternative basis (the “Substitute Basis”) for maintaining
the Loan. The Substitute Basis may include alternative interest periods, alternative
currencies or

12

 

	 	 	alternative rates of interest but must include a
margin above the cost of funds take effect in
accordance with its terms from the date specified
in the Determination Notice until such time as
the Lender notifies the Borrower that none of the
circumstances specified in clause 3.6.1 continues
to exist whereupon the normal interest rate
fixing provisions of this Agreement shall again
apply.

	4	 	REPAYMENT AND PREPAYMENT
	 
	4.1	 	Repayment
	 
	4.1.1	 	Subject to any obligation to pay earlier under this Agreement, the Borrower must repay the
Loan by 47 quarterly instalments of USD 625,000 each and a final balloon instalment in the
amount of USD 10,875,000 (the “Balloon Instalment”) the first such instalment falling due 3
months after the Drawdown Date and subsequent instalments falling due at three-monthly
intervals thereafter, with the final instalment falling due on the Maturity Date,
	 
	 	 	provided that if less than the Commitment is drawn down, then each such repayment
instalment shall be reduced pro rata by the amount of, in aggregate, such undrawn amount.
	 
	4.1.2	 	The Borrower shall on the Maturity Date also pay to the Lender all other amounts in respect
of interest or otherwise then due and payable under this Agreement and the Security Documents.
	 
	4.2	 	Voluntary prepayment
	 
	 	 	Subject to clauses 4.5, 4.6 and 4.7 the Borrower may, subject to having given 3 Banking
Days’ prior notice thereof to the Lender, prepay any specified amount (such part being in
an amount of five hundred thousand Dollars (USD 500,000) or any larger sum which is an
integral multiple of such amount) of the Loan on the last day of any relevant Interest
Period without premium or penalty.
	 
	4.3	 	Mandatory Prepayment on Total Loss
	 
	 	 	On the date falling one hundred and fifty (150) days after that on which the Vessel became
a Total Loss or, if earlier, on the date upon which the insurance proceeds are, or
Requisition Compensation (as defined in the Mortgage) is, received by the Guarantor (or
the Lender pursuant to the Security Documents) the Borrower must prepay the Loan.
	 
	4.3.1	 	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 the Vessel, on the actual date and
at the time the Vessel was lost or, if such date is not known, on the date on which
the Vessel was last reported;
	 
	 	(b)	 	in the case of a constructive total loss of the Vessel, upon the date and
at the time notice of abandonment of the ship is given to the then insurers of the
Vessel or, if such insurers do not immediately admit such a claim, at the earliest of
(i) the date and at the time at which either a total loss is subsequently admitted by
such insurers or (ii) a total loss is subsequently adjudged by a competent court of
law or arbitration tribunal to have occurred or (iii) the date on which the relevant
notice of abandonment has been given;

13

 

	 	(c)	 	in the case of a compromised or arranged total loss of the Vessel, on the
date upon which a binding agreement as to such compromised or arranged total loss has
been entered into by the then insurers of the Vessel;
	 
	 	(d)	 	in the case of Compulsory Acquisition, on the date upon which the relevant
requisition of title or other compulsory acquisition occurs; and
	 
	 	(e)	 	in the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Vessel (other than within the definition of
Compulsory Acquisition) by any Government Entity, or by persons allegedly acting or
purporting to act on behalf of any Government Entity, which deprives the Guarantor of
the use of the Vessel for more than thirty (30) days, upon the expiry of the period
of thirty (30) days after the date upon which the relevant incident occurred.

	4.4	 	Mandatory prepayment on sale of Vessel
	 
	 	 	On the date of completion of the sale of the Vessel the Borrower must prepay the Loan.
	 
	4.5	 	Amounts payable on prepayment
	 
	 	 	Any prepayment of all or part of the Loan under this Agreement shall be made together
with:

	 	(a)	 	accrued interest on the amount to be prepaid to the date of such
prepayment;
	 
	 	(b)	 	any additional amount payable under clauses 3.6, 6.6 or 12.2; and
	 
	 	(c)	 	all other sums payable by the Borrower to the Lender under this Agreement
or any of the other Security Documents including, without limitation any Break Costs.

	4.6	 	Notice of prepayment; reduction of repayment instalments
	 
	4.6.1	 	Every notice of prepayment shall be effective only on actual receipt by the Lender, 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	 	Subject to the other provisions of this Agreement, no amount prepaid under this Clause 4 in
respect of the Loan may be reborrowed.
	 
	4.6.3	 	Any amount prepaid pursuant to clause 4.2 shall be applied first against the Balloon
Instalment and thereafter against the remaining repayment instalments specified in clause
4.1.1 in inverse order of their maturity.
	 
	4.6.4	 	The Borrower may not prepay the Loan except as expressly provided in this Agreement.
	 
	4.7	 	Master Swap Agreement, Repayments and Prepayments
	 
	4.7.1	 	Notwithstanding any provision of the Master Agreement to the contrary, in the case of a
prepayment of all or part of the Loan, the Lender shall be entitled but not obliged to take
any action it deems appropriate in relation to all or any part of the rights, benefits and
obligations created by any Transaction and/or the Master Agreement and/or to obtain or
re-establish any hedge or related trading position in any manner it may reasonably determine
in order to match such Transaction to the amended repayment schedule for the Loan.
	 
	4.7.2	 	If less than the full amount of the Loan remains outstanding following a prepayment and the
Lender agrees, following a written request of the Borrower, that the Borrower may maintain

14

 

	 	 	all or part of a Transaction in an amount not wholly matched with or linked to all or part
of the Loan, the Borrower shall within fifteen (15) days of being notified by the Lender
of such requirement, provide the Lender with such additional security as shall be adequate
to secure the performance of such Transaction, which additional security shall take such
form, be constituted by such documentation and be entered into between such parties, as
the Lender may approve or require, and each document comprising such additional security
shall constitute a Credit Support Document.

	4.7.3	 	The Borrower shall on the first written demand of the Lender indemnify the Lender in respect
of all losses, costs and expenses (including, but not limited to, legal costs and expenses)
incurred or sustained by the Lender as a consequence of or in relation to the effecting of any
matter or transactions referred to in this clause 4.7.
	 
	5	 	FEES AND EXPENSES
	 
	5.1	 	Fees
	 
	 	 	The Borrower shall pay to the Lender a non-refundable arrangement fee of USD80,500 on the
Execution Date.
	 
	5.2	 	Expenses
	 
	 	 	The Borrower agrees to reimburse the Lender on a full indemnity basis within ten (10) days
of demand all expenses and/or disbursements whatsoever (including without limitation
legal, printing, travel and out of pocket expenses and expenses related to the provision
of legal and insurance opinions referred to in schedule 2) certified by the Lender as
having been incurred by it from time to time:
	 
	5.2.1	 	in connection howsoever with the negotiation, preparation, execution and, where relevant,
registration of the Security Documents and of any contemplated or actual amendment, or
indulgence or the granting of any waiver or consent howsoever in connection with, any of the
Security Documents and the syndication of the Loan; and
	 
	5.2.2	 	in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise
or enforcement of, or preservation of any rights, powers, remedies or discretions under any of
the Security Documents, or in consideration of the Lender’s rights thereunder or any action
proposed or taken following the occurrence of a Default or otherwise in respect of the moneys
owing under any of the Security Documents,
	 
	 	 	together with interest at the rate referred to in clause 3.4 from the date on which
reimbursement of such expenses and/or disbursements were due following demand to the date
of payment (as well after as before judgment).
	 
	5.3	 	Value added tax
	 
	 	 	All fees and expenses payable pursuant to this Agreement must be paid together with value
added tax or any similar tax (if any) properly chargeable thereon in any jurisdiction.
Any value added tax chargeable in respect of any services supplied by the Lender under
this Agreement shall, on delivery of the value added tax invoice, be paid in addition to
any sum agreed to be paid hereunder.
	 
	5.4	 	Stamp and other duties
	 
	 	 	The Borrower must pay all stamp, documentary, registration or other like duties or taxes
(including any duties or taxes payable by the Lender) imposed on or in connection with any
of

15

 

	 	 	the Underlying Documents, the Security Documents or the Loan and agrees to indemnify the
Lender 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
	 
	 	 	All payments to be made by the Borrower under any of the Security Documents must 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 USD on or before 11:00 am on the
due date in freely available funds to such account at such bank and in such place as the
Lender may from time to time specify for this purpose. Save as otherwise provided in this
Agreement or any other relevant Security Documents, such payments shall be for the account
of the Lender.
	 
	6.2	 	Payment by the Lender
	 
	 	 	All sums to be advanced by the Lender to the Borrower under this Agreement shall be
remitted in USD on the Drawdown Date to the account specified in the Drawdown Notice.
	 
	6.3	 	Non-Banking Days
	 
	 	 	When any payment under any of the Security Documents would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in which case payment
shall be made on the immediately preceding Banking Day.
	 
	6.4	 	Calculations
	 
	 	 	All interest and other payments of an annual nature under any of the Security Documents
shall accrue from day to day and be calculated on the basis of actual days elapsed and a
three hundred and sixty (360) day year.
	 
	6.5	 	Currency of account
	 
	 	 	If any sum due from the Borrower under any of the Security Documents, or under any order
or judgment given or made in relation thereto, must be converted from the currency (“the
first currency”) in which the same is payable thereunder into another currency (“the
second currency”) for the purpose of (i) making or filing a claim or proof against the
Borrower, (ii) obtaining an order or judgment in any court or other tribunal or (iii)
enforcing any order or judgment given or made in relation thereto, the Borrower undertakes
to indemnify and hold harmless the Lender from and against any loss suffered as a result
of any discrepancy between (a) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and (b) the rate or rates
of exchange at which the Lender 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 6.5 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.
	 
	6.6	 	Grossing-up for Taxes — by the Borrower

16

 

	 	 	If at any time the Borrower must make any deduction or withholding in respect of Taxes or
otherwise from any payment due under any of the Security Documents for the account of the
Lender 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 must be increased to
the extent necessary to ensure that, after the making of such deduction or withholding,
the Lender 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 must indemnify the Lender 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 must
promptly deliver to the Lender any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
	 
	 	 	This clause 6.6 does not apply to any sums due from the Borrower to the Lender under or in
connection with the Master Agreement in respect of which sums the provisions of the Master
Agreement shall apply.
	 
	6.7	 	Loan account
	 
	 	 	The 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. Such account shall, in the absence of manifest error, be prima facie evidence
of the amount from time to time owing by the Borrower under the Security Documents.
	 
	7	 	REPRESENTATIONS AND WARRANTIES
	 
	7.1	 	Continuing representations and warranties
	 
	 	 	The Borrower represents and warrants to the Lender that:
	 
	7.1.1	 	Due incorporation
	 
	 	 	each of the Security Parties and each Group Member is duly incorporated and validly
existing in good standing, under the laws of its respective country of incorporation, in
each case, as a corporation and has power to carry on its respective businesses as it is
now being conducted and to own their respective property and other assets to which it has
unencumbered legal and beneficial title except as disclosed to the Lender in writing;
	 
	7.1.2	 	Corporate power
	 
	 	 	each of the Security Parties has power to execute, deliver and perform its obligations
and, as the case may be, to exercise its rights under the Underlying Documents and the
Security Documents to which it is a party; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and on the execution of the
Security Documents performance of the same and no limitation on the powers of the Borrower
to borrow or any other Security Party to howsoever incur liability and/or to provide or
grant security will be exceeded as a result of borrowing any part of the Loan;
	 
	7.1.3	 	Binding obligations
	 
	 	 	the Underlying Documents and the Security Documents, when executed, will constitute valid
and legally binding obligations of the relevant Security Parties enforceable in accordance
with their respective terms;

17

 

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

no Default has occurred;
	 
	7.1.6	 	No litigation or judgments
	 
	 	 	no Proceedings are current, pending or, to the knowledge of the officers of the Borrower,
threatened against any of the Security Parties or any other Group Members or their assets
which could lead to a Material Adverse Change and there exist no judgments, orders,
injunctions which would materially affect the obligations of the Security Parties under
the Security Documents;
	 
	7.1.7	 	No filings required
	 
	 	 	except for the registration of the Mortgage under the laws of the Marshall Islands through
the Registry, it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Underlying Documents or any of the Security
Documents that they or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Pertinent Jurisdiction or that
any stamp, registration or similar tax or charge be paid in any Pertinent Jurisdiction on
or in relation to any of the Underlying Documents or the Security Documents and each of
the Underlying Documents and the Security Documents is in proper form for its enforcement
in the courts of each Pertinent Jurisdiction;
	 
	7.1.8	 	Required Authorisations and legal compliance
	 
	 	 	all Required Authorisations have been obtained or effected and are in full force and
effect and no Security Party has in any way contravened any applicable law, statute, rule
or regulation;
	 
	7.1.9	 	Choice of law
	 
	 	 	the choice of English law to govern any Underlying Document and the Security Documents
(other than the Mortgage), the choice of the law of the Marshall Islands to govern the
Mortgage and the submissions by the Security Parties to the jurisdiction of the English
courts and the obligations of such Security Parties associated therewith, are valid and
binding;
	 
	7.1.10	 	No immunity
	 
	 	 	no Security Party nor any of their assets is entitled to immunity on the grounds of
sovereignty or otherwise from any Proceedings whatsoever;

18

 

	7.1.11	 	Financial statements correct and complete
	 
	 	 	the latest audited and unaudited consolidated financial statements of the Borrower in
respect of the relevant financial year as delivered to the Lender and present or will
present fairly and accurately the financial position of the Borrower and the consolidated
financial position of the Group as at the date thereof and the results of the operations
of the Borrower and the consolidated results of the operations of the Group for the
financial year ended on such date and, as at such date, neither the Borrower nor any of
its subsidiaries had any significant liabilities (contingent or otherwise) or any
unrealised or anticipated losses which are not disclosed by, or reserved against or
provided for in, such financial statements;
	 
	7.1.12	 	Pari passu
	 
	 	 	the obligations of the Borrower under this Agreement and the Master 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;
	 
	7.1.13	 	Information
	 
	 	 	all information, whatsoever provided by any Security Party to the Lender in connection
with the negotiation and preparation of the Security Documents or otherwise provided
hereafter in relation to, or pursuant to this Agreement is, or will be, true and accurate
in all material respects and not misleading, does or will not omit material facts and all
reasonable enquiries have been, or shall have been, made to verify the facts and
statements contained therein; there are, or will be, no other facts the omission of which
would make any fact or statement therein misleading;
	 
	7.1.14	 	No withholding Taxes
	 
	 	 	no Taxes anywhere are imposed whatsoever by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the Security Documents to
which such Security Party is or is to be a party or are imposed on or by virtue of the
execution or delivery by the Security Parties of the Underlying Documents or the Security
Documents or any other document or instrument to be executed or delivered under any of the
Security Documents;
	 
	7.1.15	 	Use of proceeds
	 
	 	 	the Borrower shall apply the Loan only for the purposes specified in clause 1.1;
	 
	7.1.16	 	The Vessel
	 
	 	 	throughout the Facility Period the Vessel will be :

	 	(a)	 	in the absolute sole, legal and beneficial ownership of the Guarantor;
	 
	 	(b)	 	registered through the offices of the Registry as a ship under the laws and
flag of the Marshall Islands;
	 
	 	(c)	 	in compliance with the ISM Code and the ISPS Code and operationally
seaworthy and in every way fit for service;
	 
	 	(d)	 	in good and sea-worthy and cargo-worthy condition; and

19

 

	 	(e)	 	classed with the Classification free of all requirements and
recommendations of the Classification Society.

	7.1.17	 	Vessel’s employment
	 
	 	 	except under the Approved Charter or with the prior written consent of the Lender, there
will not be any agreement or arrangement whereby the Earnings (as defined in the Vessel
Security Documents) of the Vessel may be shared or pooled howsoever with any other person;
	 
	7.1.18	 	Freedom from Encumbrances
	 
	 	 	Neither the Vessel nor its Earnings, Insurances or Requisition Compensation (each as
defined in the Vessel Security Documents) nor the Earnings Account nor the Approved
Charter or any Extended Employment Contract 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
subject to any Encumbrance except Permitted Encumbrances;
	 
	7.1.19	 	Environmental Matters

	 	(a)	 	except as may already have been disclosed by the Borrower in writing to,
and acknowledged and accepted in writing by, the Lender:
	 
	 	(b)	 	the Guarantor and, to the best of the Borrower’s knowledge and belief
(having made due enquiry), their its Environmental Affiliates have complied with the
provisions of all Environmental Laws;
	 
	 	(c)	 	the Guarantor and, to the best of the Borrower’s knowledge and belief
(having made due enquiry), its Environmental Affiliates have obtained all
Environmental Approvals and are in compliance with all such Environmental Approvals;
	 
	 	(d)	 	no Environmental Claim has been made or threatened or pending against the
Guarantor, or, to the best of the Borrower’s knowledge and belief (having made due
enquiry), any of its Environmental Affiliates; and
	 
	 	(e)	 	there has been no Environmental Incident;

	7.1.20	 	ISM and ISPS Code
	 
	 	 	The Guarantor has complied with and continues to comply with and has procured that the
Approved Manager has complied with and continues to comply with the ISM Code, the ISPS
Code and all other statutory and other requirements relative to its business and in
particular the Guarantor or the Approved Manager has obtained and maintains a valid DOC
and SMC for the Vessel and that it and the Approved Manager has implemented and continues
to implement an ISM SMS;
	 
	7.1.21	 	Copies true and complete
	 
	 	 	the Certified Copies or originals of the Underlying Documents delivered or to be delivered
to the Lender pursuant to clause 9.1 are, or will when delivered be, true and complete
copies or, as the case may be, originals of such documents; and such documents constitute
valid and binding obligations of the parties thereto enforceable in accordance with their
respective terms and there have been no amendments or variations thereof or defaults
thereunder;
	 
	7.1.22	 	the Borrower and other Group Members are the ultimate beneficiaries of the Loan;

20

 

	7.1.23	 	no Security Party has incurred any Indebtedness save under this Agreement or as otherwise
disclosed to the Lender;
	 
	7.1.24	 	the Guarantor and the Borrower have filed all tax and other fiscal returns required to be
filed by any tax authority to which they are subject;
	 
	7.1.25	 	the Borrower does not have an office in England;
	 
	7.1.26	 	The Borrower is acting for its own account in borrowing the Loan and performing and
discharging its obligations and liabilities under this Agreement and the Security Documents to
which it is a party and in relation to the transactions and other arrangements effected or
contemplated by this Agreement or any of the Security Documents to which it is a party, and no
such borrowing, performance, discharge, transaction or arrangement will involve or lead to a
contravention of any law, official requirement or other regulatory measure or procedure which
has been implemented to combat “money laundering” (as defined in Article 1 of the Directive
(91/308/EEC) of the Council of the European Community).
	 
	7.2	 	Repetition of representations and warranties
	 
	 	 	On each day throughout the Facility Period, the Borrower shall be deemed to repeat the
representations and warranties in clause 7 updated mutatis mutandis as if made with
reference to the facts and circumstances existing on such day.
	 
	8	 	UNDERTAKINGS
	 
	8.1	 	General
	 
	 	 	The Borrower undertakes with the Lender that, from the Execution Date until the end of the
Facility Period, it will:
	 
	8.1.1	 	Notice of Default and Proceedings
	 
	 	 	promptly inform the Lender of (a) any Default and of any other circumstances or occurrence
which might adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents and (b) as soon as the same is instituted or
threatened, details of any Proceedings involving any Security Party which could give rise
to a Material Adverse Change on that Security Party and/or the operation of the Vessel
(including, but not limited to any Total Loss of the Vessel or the occurrence of any
Environmental Incident) and will from time to time, if so requested by the Lender, confirm
to the Lender in writing that, save as otherwise stated in such confirmation, no Default
has occurred and is continuing and no such Proceedings are on foot or threatened;
	 
	8.1.2	 	Authorisation
	 
		 	obtain or cause to be obtained, maintain in full force and effect and comply fully with
all Required Authorisations, provide the Lender with Certified Copies of the same and do,
or cause to be done, all other acts and things which may from time to time be necessary or
desirable under any applicable law (whether or not in the Pertinent Jurisdiction) for the
continued due performance of all the obligations of the Security Parties under each of the
Security Documents;
	 
	8.1.3	 	Corporate Existence

21

 

	 	 	ensure that each Security Party maintains its corporate existence as a body corporate duly
organised and validly existing and in good standing under the laws of the Pertinent
Jurisdiction;
	 
	8.1.4	 	Use of proceeds
	 
	 	 	use the Loan exclusively for the purposes specified in clause 1.1;
	 
	8.1.5	 	Pari passu
	 
	 	 	ensure that its obligations under this Agreement and the Master Agreement shall 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;
	 
	8.1.6	 	Financial statements
	 
	 	 	Cause to be prepared audited (by accountants acceptable to the Lender) accounts
of the Guarantor and consolidated accounts of the Group, prepared in accordance with
International Financial Reporting Standards in respect of each financial year and
prepare or cause to be prepared unaudited consolidated financial statements of the
Group in respect of each financial half-year on the same basis as the annual accounts
and duly certified by the chief financial officer of the Group as true and correct,
and deliver the same to the Lender as soon as practicable, but not later than one
hundred and twenty (120) days (in the case of audited accounts) or ninety (90) days
(in the case of unaudited financial statements) after the end of the financial period
to which they relate;
	 
	8.1.7	 	Financial covenants
	 
	 	 	procure that:

	 	(a)	 	at no time shall the aggregate cash owned by the Group which is freely
available and not subject to any Encumbrance be less than USD200,000 multiplied by
the number of ships owned by the Group;
	 
	 	(b)	 	the ratio of EBITDA to Interest Expense shall at all times be at least 2.5
to 1 in relation to the preceding 4 financial quarters; and
	 
	 	(c)	 	at all times the ratio of Total Debt (less Unencumbered Liquid Assets) of
the Group to Total Assets (less Unencumbered Liquid Assets) of the Group shall not be
greater than 0.8 to 1.

	8.1.8	 	Reimbursement of MII & MAP Policy premiums
	 
	 	 	Whether or not any amount is borrowed under this Agreement, reimburse the Lender on the
Lender’s written demand the amount of the premium payable by the Lender for the inception
or, as the case may be, extension and/or continuance of the MII & MAP Policy (including
any insurance tax thereon);
	 
	8.1.9	 	Compliance Certificates
	 
	 	 	deliver to the Lender on the Drawdown Date and on the date on which the accounts are or
are to be delivered under clause 8.1.6 a Compliance Certificate duly and correctly
completed and signed by the chief financial officers of the Borrower and the Guarantor and
confirming

22

 

	 	 	compliance with the financial covenants as set out in clause 8.1.7 as at the end of the
latest financial year or half-year (as the case may be).
	 
	8.1.10	 	Provision of further information
	 
	 	 	provide the Lender, and procure that the Approved Manager shall provide the Lender, with
such financial or other information concerning the Borrower and its affairs, activities,
financial standing, Indebtedness and operations and the performance of the Vessel as the
Lender may from time to time reasonably require;
	 
	8.1.11	 	Obligations under Security Documents
	 
	 	 	duly and punctually perform each of the obligations expressed to be imposed or assumed by
it under the Security Documents and Underlying Documents and will procure that each of the
other Security Parties will, duly and punctually perform each of the obligations expressed
to be assumed by it under the Security Documents and the Underlying Documents to which it
is a party;
	 
	8.1.12	 	Compliance with ISM Code
	 
	 	 	will procure that any Operator will, comply with and ensure that the Vessel and any
Operator complies with the requirements of the ISM Code, including (but not limited to)
the maintenance and renewal of valid certificates pursuant thereto throughout the Facility
Period;
	 
	8.1.13	 	Withdrawal of DOC and SMC
	 
	 	 	Immediately inform the Lender if there is any actual withdrawal of their or any Operator’s
DOC or the SMC of the Vessel;
	 
	8.1.14	 	Issuance of DOC and SMC
	 
	 	 	and will procure that any Operator will promptly inform the Lender of the receipt by the
Guarantor or any Operator of notification that its application for a DOC or any
application for an SMC for the Vessel has been refused;
	 
	8.1.15	 	ISPS Code Compliance
	 
	 	 	and will procure that the Approved Manager or any Operator will:

	 	(a)	 	maintain at all times a valid and current ISSC in respect of the Vessel;
	 
	 	(b)	 	immediately notify the Lender in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of the
Vessel; and
	 
	 	(c)	 	procure that the Vessel will comply at all times with the ISPS Code;

	8.1.16	 	Compliance with Laws and payment of taxes
	 
	 	 	and will comply with all relevant Environmental Laws, laws, statutes and regulations and
pay all taxes for which it is liable as they fall due;
	 
	8.1.17	 	Management.
	 
	 	 	Following the termination of the Approved Charter (unless the Vessel enters into another
bareboat charter) or if the Approved Manager becomes commercial and/or technical
manager
of the Vessel at any other time, (i) deliver to the Lender a Certified Copy of the
Management

23

 

	 	 	Agreement upon its execution, (ii) a Manager’s Undertaking in respect thereof
duly executed by the Approved Manager and any notice of assignment required in connection
therewith and (iii) pay all legal and other costs incurred by the Lender in connection
with any such Manager’s Undertaking, forthwith following the Lender’s demand; and
	 
	8.1.18	 	Charters etc.

	 	(i)	 	deliver to the Lender a Certified Copy of each Extended Employment Contract upon its
execution, (ii) forthwith on the Lender’s request execute (a) a Charter Assignment in
respect thereof and (b) any notice of assignment required in connection therewith and use
reasonable efforts to procure the acknowledgement of any such notice of assignment by the
relevant charterer (provided that any failure to procure the same shall not constitute an
Event of Default) and (iii) pay all legal and other costs incurred by the Lender in
connection with any such Charter Assignment, forthwith following the Lender’s demand; and

	8.1.19	 	Derivatives
	 
	 	 	If at any time the Borrower wishes to enter into any derivative transaction of the type
envisaged by the Master Agreement in relation to the Loan, it shall not enter into any
such transaction with any person other than the Lender unless it has first requested the
Lender to quote for such business.
	 
	8.2	 	Security value maintenance
	 
	8.2.1	 	Security shortfall
	 
	 	 	If, at any time after the Drawdown Date, the Security Value shall be less than the
Required Security Amount, the Lender shall give notice to the Borrower requiring that such
deficiency be remedied and then the Borrower must either:

	 	(a)	 	prepay within a period of thirty (30) days of the date of receipt by the
Borrower of the Lender’s said notice such part of the Loan as will result in the
Security Value 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 or higher than the Required Security Amount; or
	 
	 	(b)	 	within thirty (30) days of the date of receipt by the Borrower of the
Lender’s said notice constitute to the satisfaction of the Lender such further
security for the Loan as shall be acceptable to the Lender having a value for
security purposes (as determined by the Lender in its absolute discretion) at the
date upon which such further security shall be constituted which, when added to the
Security Value, shall not be less than the Required Security Amount as at such date.

	 	 	The provisions of clauses 4.6 and 4.7 shall apply to prepayments under clause 8.2.1(a)
provided that the Lender shall apply such prepayments first to the Balloon Instalment and
thereafter against the outstanding of the repayment instalments under clause 4.1.1 in
inverse of maturity and the amounts of the Loan prepaid hereunder shall not be available
to be re-borrowed.
	 
	8.2.2	 	Valuation of Vessel
	 
	 	 	The Vessel shall, for the purposes of this Agreement (including, but not limited to Clause
2.3), be valued in USD by any two Approved Brokers, such valuations to be made at such
time or
times, as the Lender may require, without physical inspection, and on the basis of a sale
for

24

 

	 	 	prompt delivery for cash at arms’ length, on normal commercial terms, as between a
willing buyer and a willing seller, without taking into account the benefit or burden of
any charterparty or other engagement concerning the Vessel and the average of such two
Approved Broker’s valuations for the Vessel on each such occasion shall constitute the
Valuation Amount of the Vessel for the purposes of this Agreement until superseded by the
next such valuation.
	 
	8.2.3	 	Information
	 
	 	 	The Borrower undertakes with the Lender to supply to the Lender and to the Approved Broker
such information concerning the Vessel and its condition as such shipbrokers may require
for the purpose of determining any Valuation Amount.
	 
	8.2.4	 	Costs
	 
	 	 	All costs in connection with the obtaining and any determining of any Valuation Amount
pursuant to Clause 8.2.2 shall, in respect of two such valuations in each calendar year,
and following the occurrence of an Event of Default which is continuing, any additional
valuation, be paid by the Borrower and 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), must be
paid by the Borrower.
	 
	8.2.5	 	Valuation of additional security
	 
	 	 	For the purposes of this clause 8.2, the market value (i) of any additional security over
a ship (other than the Vessel) shall be determined in accordance with clause 8.2.2 and
(ii) of any other additional security provided or to be provided to the Lender shall be
determined by the Lender in its absolute discretion.
	 
	8.2.6	 	Documents and evidence
	 
	 	 	In connection with any additional security provided in accordance with this clause 8.2,
the Lender shall be entitled to receive (at the Borrower’s expense) such evidence and
documents of the kind referred to in schedule 4 as may in the Lender’s opinion be
appropriate and such favourable legal opinions as the Lender shall in its absolute
discretion require.
	 
	8.3	 	Negative undertakings relating to the Guarantor
	 
	 	 	The Borrower undertakes that:
	 
	8.3.1	 	except with the prior written consent in each case of the Lender, it will retain, directly
or through wholly-owned subsidiaries, full ownership and control of the Guarantor and the
Vessel and will not permit any Encumbrance to exist on any shares of and in the Guarantor; and
	 
	8.3.2	 	it will procure that the Guarantor complies with the undertakings set out in Clause 8.4 as
if the same have been up-dated mutatis mutandis to refer to the Guarantor in place of the
Borrower.
	 
	8.4	 	Negative undertakings relating to the Borrower

25

 

	 	 	The Borrower undertakes with the Lender that, from the Execution Date until the end of the
Facility Period, it will procure that, except with the prior written consent of the
Lender, it will not:
	 
	8.4.1	 	Disposals
	 
	 	 	Permit the Guarantor to sell, transfer, assign, create security or option over, pledge,
pool, abandon, lend or otherwise dispose of or cease to exercise direct control over any
part of its present or future undertaking, assets, rights or revenues (otherwise than by
transfers, sales or disposals for full consideration in the ordinary course of trading)
whether by one or a series of transactions related or not;
	 
	8.4.2	 	No merger or consolidation
	 
	 	 	merge or consolidate with any other person;
	 
	8.4.3	 	Other business or manager
	 
	 	 	undertake any business other than the ownership and operation of vessels (or permit the
Guarantor to undertake any business, other than the ownership and operation of the Vessel)
or employ anyone other than the Approved Manager as commercial and technical manager of
the Vessel;
	 
	8.4.4	 	Acquisitions
	 
	 	 	permit the Guarantor to acquire any assets other than the Vessel and rights arising under
contracts entered into by or on behalf of the Guarantor in the ordinary course of its
business of owning, operating and chartering the Vessel;
	 
	8.4.5	 	Other obligations
	 
	 	 	permit the Guarantor to incur, any obligations except for obligations arising under the
Underlying Documents or the Security Documents or contracts entered into in the ordinary
course of its business of owning, operating and chartering the Vessel;
	 
	8.4.6	 	Guarantees
	 
	 	 	permit the Guarantor to issue any guarantees or otherwise become directly or contingently
liable for the obligations of any person, firm, or corporation except pursuant to the
Security Documents and except for guarantees from time to time required in the ordinary
course by any protection and indemnity or war risks association with which the Vessel is
entered, guarantees required to procure the release of the Vessel from any arrest,
detention, attachment or levy or guarantees required for the salvage of the Vessel;
	 
	8.4.7	 	Loans
	 
		 	other than by on-lending any Borrowed Money, make any loans or grant any credit (save for
normal trade credit in the ordinary course of business) to any person or agree to do so or
permit any Group Member to do so;
	 
	8.4.8	 	Indebtedness

26

 

	 	 	incur, or permit the Guarantor to incur, any Indebtedness owing to any other Group Member,
unless the same is fully subordinated to the rights of the Lender under this Agreement in
terms acceptable to the Lender;
	 
	8.4.9	 	Sureties
	 
	 	 	permit any Indebtedness of the Guarantor to any person (other than the Lender pursuant to
the Security Documents) to be guaranteed by any person (except for guarantees from time to
time required in the ordinary course by any protection and indemnity or war risks
association with which the Vessel is entered, guarantees required to procure the release
of the Vessel from any arrest, detention, attachment or levy or guarantees or undertakings
required for the salvage of the Vessel); or
	 
	8.4.10	 	Share capital and distribution

	 	(i)	 	(prior to the occurrence of an Event of Default which is continuing) declare or pay
any dividends except in an aggregate amount in relation to any four consecutive financial
quarters of up to 50% of the Free Cash Flow for that period or, (ii) following the
occurrence of an Event of Default which is continuing, declare or pay any dividends.

	9	 	CONDITIONS
	 
	9.1	 	Drawdown Notice
	 
	 	 	The obligation of the Lender to make the Commitment available is conditional upon the
Lender, or its authorised representative, having received, not later than two (2) Banking
Days before the day on which the Drawdown Notice is given, the documents and evidence
specified in Part 1 of schedule 2 in form and substance satisfactory to the Lender.
	 
	9.2	 	Advance of the Loan
	 
	 	 	The obligation of the Lender to make the Commitment available is further conditional upon:
	 
	9.2.1	 	the Lender, or its authorised representative, having received, on or prior to the Drawdown
Date, the documents and evidence specified in Part 2 of schedule 2 in form and substance
satisfactory to the Lender;
	 
	9.2.2	 	the representations and warranties contained in clause 7 being then true and correct as if
each was made with respect to the facts and circumstances existing at such time and the same
being unaffected by drawdown of the Loan; and
	 
	9.2.3	 	no Default having occurred and being continuing and there being no Default which would
result from the lending of the Loan.
	 
	9.3	 	Waiver of conditions precedent
	 
	 	 	The conditions specified in this clause 9 are inserted solely for the benefit of the
Lender and may be waived by the Lender in whole or in part.
	 
	9.4	 	Further conditions precedent
	 
	 	 	Not later than five (5) Banking Days prior to the Drawdown Date and not later than five
(5) Banking Days prior to any Interest Payment Date, the Lender may request and the
Borrower must, not later than two (2) Banking Days prior to such date, deliver to the
Lender (at the

27

 

	 	 	Borrower’s expense) on such request further favourable certificates and/or opinions as to
any or all of the matters which are the subject of clauses 7, 8, 9 and 10.
	 
	10	 	EVENTS OF DEFAULT
	 
	10.1	 	Events
	 
	 	 	Each of the following events shall constitute an Event of Default (whether such event
shall occur voluntarily or involuntarily or by operation of law or regulation or in
connection with any judgment, decree or order of any court or other authority or
otherwise, howsoever):
	 
	10.1.1	 	Non-payment: any Security Party fails to pay any sum payable by it under any of the Security
Documents at the time, in the currency and in the manner stipulated in the Security Documents
or the Underlying Documents, except that, if any delay in making a payment is caused by
administrative or technical banking errors, there shall not occur an Event of Default under
this Clause unless such payment shall not have been made within 2 Banking Days of the original
failure to pay coming to the notice of the Borrower ; or
	 
	10.1.2	 	Breach of Insurance and certain other obligations: the Guarantor or, as the context may
require, the Approved Manager or any other person fails to obtain and/or maintain the
Insurances (as defined in, and in accordance with the requirements of, the Vessel Security
Documents) for the Vessel or if any insurer in respect of such Insurances cancels the
Insurances or disclaims liability by reason, in either case, of mis-statement in any proposal
for the Insurances or for any other failure or default on the part of 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 clause 8; 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) unless such breach
or omission, in the opinion of the Lender is capable of remedy, in which case the same shall
constitute an Event of Default if it has not been remedied within fifteen (15) days of the
occurrence thereof; 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: There shall occur a default (howsoever described) under or in respect of any
Indebtedness of any Security Party or other Group Member (subject to applicable grace periods)
or any Indebtedness of any Security Party or other Group Member becomes (whether by
declaration or automatically in accordance with the relevant agreement or instrument
constituting the same) due and payable prior to the date when it would otherwise have become
due (unless as a result of the exercise by the relevant Security Party or other Group Member
of a voluntary right of prepayment), or any creditor of any Security Party or other Group
Member becomes entitled to declare any such Indebtedness due and payable or any facility or
commitment available to any Security Party or other Group Member relating to Indebtedness is
withdrawn, suspended or cancelled by reason of any default (however described) of the person
concerned; or
	 
	10.1.6	 	Execution: any uninsured judgment or order made against any Security Party or other Group
Member is not stayed, appealed against or complied with within fifteen (15) days or a creditor
attaches or takes possession of, or a distress, execution, sequestration or other process is

28

 

	 	 	levied or enforced upon or sued out against, any of the undertakings, assets, rights or
revenues of any Security Party or other Group Member and is not discharged within thirty
(30) days; or
	 
	10.1.7	 	Insolvency: any Security Party or other Group Member 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; or has negative net worth (taking into account
contingent liabilities); or suffers the declaration of a moratorium in respect of any of its
Indebtedness; or
	 
	10.1.8	 	Reduction or loss of capital: a meeting is convened by any Security Party (other than the
Borrower) without the Lender’s prior written consent, for the purpose of passing any
resolution to purchase, reduce or redeem any of its share capital without the Lender’s prior
written consent; or
	 
	10.1.9	 	Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or
wind-up any Security Party or other Group Member or an order is made or resolution passed for
the dissolution or winding up of any Security Party or other Group Member or a notice is
issued convening a meeting for such purpose; or
	 
	10.1.10	 	Administration: any petition is presented, notice given or other steps are taken anywhere
to appoint an administrator of any Security Party or other Group Member or the Lender believes
that any such petition or other step is imminent or an administration order is made in
relation to any Security Party or other Group Member; or
	 
	10.1.11	 	Appointment of receivers and managers: any administrative or other receiver is appointed
anywhere of any Security Party or other Group Member or any part of its assets and/or
undertaking or any other steps are taken to enforce any Encumbrance over all or any part of
the assets of any Security Party or other Group Member; or
	 
	10.1.12	 	Compositions: any corporate action, legal proceedings or other procedures or steps are
taken, or negotiations commenced, by any Security Party or other Group Member or by any of its
creditors with a view to the general readjustment or rescheduling of all or part of its
Indebtedness or to proposing any kind of composition, compromise or arrangement involving such
company and any of its creditors; or
	 
	10.1.13	 	Analogous proceedings: there occurs, in relation to any Security Party or other Group
Member, 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 Lender, 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 or other Group Member 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 or other Group Member suspends or ceases or
threatens to suspend or cease to carry on its business without the prior written consent of
the Lender, such consent not to be unreasonably withheld; 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 or other Group Member are seized,
nationalised, expropriated or compulsorily acquired by or under the authority of any
Government Entity; or
	 
	10.1.16	 	Invalidity: any of the Security Documents and the Underlying Documents shall at any time
and for any reason become invalid or unenforceable or otherwise cease to remain in full force

29

 

	 	 	and effect, or if the validity or enforceability of any of the Security Documents and the
Underlying Documents shall at any time and for any reason be contested by any Security
Party which is a party thereto, or if any such Security Party shall deny that it has any,
or any further, liability thereunder; or
	 
	10.1.17	 	Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for
any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by
it in any of the Security Documents or for the Lender to exercise the rights or any of them
vested in it under any of the Security Documents or otherwise; or
	 
	10.1.18	 	Repudiation: any Security Party repudiates any of the Security Documents or does or causes
or permits to be done any act or thing evidencing an intention to repudiate any of the
Security Documents; or
	 
	10.1.19	 	Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of
the property (or part thereof) which is the subject of any of the Security Documents becomes
enforceable; or
	 
	10.1.20	 	Arrest: the Vessel 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 Guarantor and the Guarantor shall fail to procure
the release of the Vessel within a period of fifteen (15) days thereafter; or
	 
	10.1.21	 	Registration: the registration of the Vessel under the laws and flag of the Marshall
Islands is cancelled or terminated without the prior written consent of the Lender; or
	 
	10.1.22	 	Unrest: the Marshall Islands or the country in which any Security Party is incorporated or
domiciled becomes involved in hostilities or civil war or there is a seizure of power in the
Marshall Islands by unconstitutional means unless the Guarantor shall have transferred the
Vessel onto a new flag acceptable to the Lender within sixty (60) days of the start of such
hostilities or civil war or seizure of power; or
	 
	10.1.23	 	Environmental Incidents: an Environmental Incident occurs which gives rise, or may give
rise, to an Environmental Claim which could, in the opinion of the Lender be expected to lead
to a Material Adverse Change; or
	 
	10.1.24	 	P&I: the Guarantor or the Approved 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 Vessel is entered for insurance or insured against protection and indemnity risks
(including oil pollution risks) to the effect that any cover (including, without limitation,
any cover in respect of liability for Environmental Claims arising in jurisdictions where the
Vessel operates or trades) is or may be liable to cancellation, qualification or exclusion at
any time; or
	 
	10.1.25	 	Material events: any other event occurs or circumstance arises which, in the reasonable
opinion of the Lender, is likely to give rise to a Material Adverse Change; or
	 
	10.1.26	 	Account: moneys are withdrawn from the Earnings Account other than in accordance with
clause 14; or
	 
	10.1.27	 	Required Authorisations: any Required Authorisation 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;

30

 

	10.1.28	 	Money Laundering: any Security Party is in breach of or fails to observe any law,
requirement, measure or procedure implemented to combat “money laundering” as defined in
Article 1 of the Directive (91/308 EEC) of the Council of the European Communities; or
	 
	10.1.29	 	Master Agreement: (i) an Event of Default or Potential Event of Default (in each case as
defined in the Master Agreement) has occurred and is continuing under the Master Agreement or
(ii) an Early Termination Date (as defined in the Master Agreement) has occurred or been
effectively designated under the Master Agreement or (iii) a person entitled to do so gives
notice of an Early Termination Date (as defined in the Master Agreement) or (iv) the Master
Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to
remain in full force and effect for any reason; or
	 
	10.1.30	 	Change of Ownership: without the prior consent of the Lender, there shall occur any change
in any part of the legal ownership of the Guarantor from that existing as at the Execution
Date or the aggregate number of shares of and in the Borrower beneficially owned or controlled
by Mr Charalambos (“Harry”) Vafias and/or any of his parents, children, siblings and his wife
falls below 15% of the total issued shares of and in the Borrower.
	 
	10.2	 	Acceleration
	 
	 	 	The Lender may without prejudice to any its other rights, at any time after the happening
of an Event of Default by notice to the Borrower declare that:
	 
	10.2.1	 	the obligation of the Lender to make the Commitment available shall be terminated, whereupon
the Commitment shall be reduced to zero forthwith; and/or
	 
	10.2.2	 	the Loan and all interest accrued and all other sums payable whatsoever under the Security
Documents have become due and payable, whereupon the same shall, immediately or in accordance
with the terms of such notice, become due and payable.
	 
	10.3	 	Demand Basis
	 
	 	 	If, under clause 10.2.2, the Lender has declared the Loan to be due and payable on demand,
at any time thereafter the Lender may by written notice to the Borrower (a) demand
repayment of the Loan on such date as may be specified whereupon, regardless of any other
provision of this Agreement, 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.
	 
	11	 	INDEMNITIES
	 
	11.1	 	General indemnity
	 
	 	 	The Borrower agrees to indemnify the Lender on demand, without prejudice to any of the
Lender’s other rights under any of the Security Documents, against any loss (including
loss of Margin) or expense (including, without limitation, Break Costs) which the Lender
shall certify as sustained by it as a consequence of any Default, any prepayment of the
Loan or part thereof being made under clauses 4.3, 4.4, 8.2.1(a) or 12.1 or any other
repayment or prepayment of the Loan being made otherwise than on an Interest Payment Date
relating to the part of the Loan prepaid or repaid; and/or the Loan not being advanced for
any reason (excluding any default by the Lender) after the Drawdown Notice has been given.
	 
	11.2	 	Environmental indemnity

31

 

	 	 	The Borrower shall indemnify the Lender on demand and hold it harmless from and against
all costs, claims, expenses, payments, charges, losses, demands, liabilities, actions,
Proceedings, penalties, fines, damages, judgements, orders, sanctions or other outgoings
of whatever nature which may be incurred or made or asserted whensoever against the Lender
at any time, whether before or after the repayment in full of principal and interest under
this Agreement, arising howsoever out of an Environmental Claim made or asserted against
the Lender which would not have been, or been capable of being, made or asserted against
the Lender had it not entered into any of the Security Documents or been involved in any
of the resulting or associated transactions.
	 
	11.3	 	Capital adequacy and reserve requirements indemnity
	 
	 	 	The Borrower shall promptly indemnify the Lender on demand against any reasonable cost
incurred or loss suffered by the Lender as a result of its complying with (i) the minimum
reserve requirements from time to time of the European Central Bank (ii) any capital
adequacy directive of the European Union and/or (iii) any revised framework for
international convergence of capital measurements and capital standards and/or any
regulation imposed by any Government Entity in connection therewith, and/or in connection
with maintaining required reserves with a relevant national central bank to the extent
that such compliance or maintenance relates to the Loan or deposits obtained by it to fund
the whole or part thereof and to the extent such cost or loss is not recoverable by the
Lender under clause 12.2.
	 
	12	 	UNLAWFULNESS AND INCREASED COSTS
	 
	12.1	 	Unlawfulness
	 
	 	 	Regardless of any other provision of this Agreement, in the event that the Lender notifies
the Borrower that by reason of:
	 
	12.1.1	 	the introduction of or any change in any applicable law or regulation or any change in the
interpretation or application thereof; or
	 
	12.1.2	 	compliance by the Lender with any directive, request or requirement (whether or not having
the force of law) of any central bank or Government Entity
	 
	 	 	it becomes unlawful or it is prohibited by or contrary to such directive request or
requirement for the Lender to maintain or give effect to any of its obligations in
connection howsoever with this Agreement then (i) the Commitment shall be reduced to zero
and (ii) the Borrower shall be obliged to prepay the Loan either immediately or on a
future specified date not being earlier than the latest date permitted by the relevant
law, regulation, directive, request or requirement with interest and commitment commission
accrued to the date of prepayment and all other sums payable whensoever by the Borrower
under this Agreement.
	 
	12.2	 	Increased costs
	 
	 	 	If the Lender certifies to the Borrower that at any time the effect of any applicable law,
regulation or regulatory requirements or the interpretation or application thereof or any
change therein (including the imposition upon whomsoever of Taxes on payments hereunder or
otherwise howsoever in connection with this Agreement other than taxes on the overall net
income of the Lender) or the effect of complying with any applicable directive, request or
requirement (whether or not having the force of law) of any central bank or Government
Entity (including any kind of liquidity, stock or capital adequacy controls or other
banking or monetary controls or requirements which affect the manner in which the Lender
or its holding company allocates capital resources to the Lender’s obligations hereunder)
is to:

32

 

	12.2.1	 	subject the Lender to Taxes or change the basis of Taxation of the Lender relating to any
payment under any of the Security Documents (other than Taxes or Taxation on the overall net
income of the 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, the Lender or its holding company in
making or keeping the Commitment available or maintaining or funding all or part of the Loan;
and/or
	 
	12.2.3	 	reduce the amount payable or the effective return to the Lender under any of the Security
Documents; and/or
	 
	12.2.4	 	reduce the 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 the
Lender’s obligations under any of the Security Documents; and/or
	 
	12.2.5	 	require the 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 the Lender under any of the
Security Documents; and/or
	 
	12.2.6	 	require the 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 the Commitment
or the Loan from its capital for regulatory purposes,
	 
	 	 	then and in each such case (subject to clause 12.3) the Borrower must on demand pay to the
Lender the amount which the Lender certifies (in a certificate setting forth the basis of
the computation of such amount but not including any matters which the Lender or its
holding company regards as confidential) is required to compensate the 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 the Lender is included.
	 
	12.3	 	Exception
	 
	 	 	Nothing in clause 12.2 shall entitle the Lender to receive any amount relating to
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	 	APPLICATION OF MONEYS, SET OFF AND MISCELLANEOUS
	 
	13.1	 	Application of moneys
	 
	 	 	All moneys received by the Lender under or pursuant to any of the Security Documents and
expressed to be applicable in accordance with the provisions of this clause 13.1 or in a
manner determined in the Lender’s discretion, shall be applied in the following manner:
	 
	13.1.1	 	first, in or towards payment of any unpaid costs and expenses of the Lender under any of the
Security Documents;
	 
	13.1.2	 	secondly in or towards payment to the Lender, pari passu, of any accrued interest owing in
respect of the Loan which shall have become due and any sums due under the Master Agreement in
respect of any interest rate swap;

33

 

	13.1.3	 	thirdly, pari passu in or towards repayment of the Loan (whether the same is due and payable
or not) and shall be applied, in respect of the Loan, pro rata against the outstanding
repayment instalments and any other sums payable in the nature of Break Costs under the Master
Agreement;
	 
	13.1.4	 	fourthly, the surplus (if any) shall be paid to the Borrower or to whomsoever else may then
be entitled to receive such surplus.
	 
	13.2	 	Set-off
	 
	13.2.1	 	The Borrower irrevocably authorises the Lender (without prejudice to any of the Lender’s
rights at law, in equity or otherwise), at any time 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 the Lender in or towards satisfaction of any sum due and
payable from the Borrower to the Lender under any of the Security Documents. For this
purpose, the Lender is authorised to purchase with the moneys standing to the credit of such
account such other currencies as may be necessary to effect such application.
	 
	13.2.2	 	The Lender shall not be obliged to exercise any right given to it by this clause 13.2. The
Lender shall notify the Borrower forthwith upon the exercise or purported exercise of any
right of set off giving full details in relation thereto.
	 
	13.2.3	 	Nothing in this clause 13.2 shall be effective to create a charge or other security
interest.
	 
	13.3	 	No charge
	 
	 	 	The provisions of this clause 13 shall not, and shall not be construed so as to,
constitute a charge or create or declare a trust by the Lender over all or any part of a
sum received or recovered by it in the circumstances mentioned in clause 13.3.
	 
	13.4	 	Further assurance
	 
	 	 	The Borrower undertakes with the Lender that the Security Documents shall both at the date
of execution and delivery thereof and throughout the Facility Period be valid and binding
obligations of the respective parties thereto which, with the rights of the Lender
thereunder, are 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 Lender may be
necessary or desirable for perfecting the security contemplated or constituted by the
Security Documents.
	 
	13.5	 	Conflicts
	 
	 	 	In the event of any conflict between this Agreement and any of the other Security
Documents, the provisions of this Agreement shall prevail.
	 
	13.6	 	No implied waivers, remedies cumulative
	 
	 	 	No failure or delay on the part of the Lender to exercise any power, right or remedy under
any of the Security Documents shall operate as a waiver thereof, nor shall any single or
partial exercise by the Lender 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. No waiver by the Lender shall be effective unless it is in writing.

34

 

	13.7	 	Severability
	 
	 	 	If any provision of this Agreement is prohibited, invalid, illegal or unenforceable in any
jurisdiction, such prohibition, invalidity, illegality or unenforceability shall not
affect or impair howsoever the remaining provisions thereof or affect the validity,
legality or enforceability of such provision in any other jurisdiction.
	 
	13.8	 	Force Majeure
	 
	 	 	Regardless of any other provision of this Agreement, the Lender shall not be liable for
any failure to perform the whole or any part of this Agreement resulting directly or
indirectly from (i) the action or inaction or purported action of any governmental or
local authority (ii) any strike, lockout, boycott or blockade (including any strike,
lockout, boycott or blockade effected by or upon the Lender or any of its representatives
or employees) (iii) any act of God (iv) any act of war (whether declared or not) or
terrorism (v) any failure of any information technology or other operational systems or
equipment affecting the Lender or (vi) any other circumstances whatsoever outside the
Lender’s control.
	 
	13.9	 	Amendments
	 
	 	 	This Agreement may be amended or varied only by an instrument in writing executed by all
parties hereto who irrevocably agree that the provisions of this clause 13.11 may not be
waived or modified except by an instrument in writing to that effect signed by both of
them.
	 
	13.10	 	Counterparts
	 
	 	 	This Agreement may be executed in any number of counterparts and all such counterparts
taken together shall be deemed to constitute one and the same agreement which may be
sufficiently evidenced by one counterpart.
	 
	13.11	 	English language
	 
	 	 	All documents required to be delivered under and/or supplied whensoever in connection
howsoever with any of the Security Documents and all notices, communications, information
and other written material whatsoever given or provided in connection howsoever therewith
must either be in the English language or accompanied by an English translation certified
by a notary, lawyer or consulate acceptable to the Lender.
	 
	14	 	ACCOUNTS AND RETENTIONS
	 
	14.1	 	General
	 
	 	 	The Borrower undertakes with the Lender that it will ensure that:
	 
	14.1.1	 	the Guarantor will on or before the Drawdown Date, open the Earnings Account; and
	 
	14.1.2	 	all moneys payable to the Guarantor in respect of the Earnings (as defined in the Mortgage)
shall, unless and until the Lender directs to the contrary pursuant to the provisions of the
Mortgage, be paid to the Earnings Account, provided however that if any of the moneys paid to
the Earnings Account are payable in a currency other than USD, they shall be paid to a
sub-account of the Earnings Account denominated in such currency (except that if the Guarantor
fails to open such a sub-account, the Lender shall then convert such moneys into USD at the
Lender’s spot rate of exchange at the relevant time for the purchase of USD 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 USD with such currency).

35

 

	14.2	 	Earnings Account: withdrawals
	 
	 	 	Any sums standing to the credit of the Earnings Account may be applied from time to time
(i) Firstly and to make the payments required under this Agreement, (ii) secondly subject
to there being no breach of Clause 14.3 and to no Event of Default having occurred, in the
operation of the Vessel and (iii) subject to there being at any time sufficient funds to
pay amounts due under (i) and (ii) above as they fall due, thirdly for the general
corporate purposes of the Borrower.
	 
	14.3	 	Application of accounts
	 
	 	 	At any time after the occurrence of an Event of Default, the Lender may, without notice to
the Borrower, apply all moneys then standing to the credit of the Earnings Account
(together with interest from time to time accruing or accrued thereon) in or towards
satisfaction of any sums due to the Lender under the Security Documents in the manner
specified in clause 13.1.
	 
	14.4	 	Pledge of accounts
	 
	 	 	The Earnings Account and all amounts from time to time respectively standing to the credit
thereof shall be subject to the security constituted and the rights conferred by the
Earnings Account Pledge.
	 
	15	 	ASSIGNMENT, TRANSFER AND LENDING OFFICE
	 
	15.1	 	Benefit and burden
	 
	 	 	This Agreement shall be binding upon, and enure for the benefit of, the Lender and the
Borrower and their respective successors.
	 
	15.2	 	No assignment by Borrower
	 
	 	 	The Borrower may not assign or transfer any of its rights or obligations under this
Agreement.
	 
	15.3	 	Transfer by Lender
	 
	 	 	The Lender may assign or transfer all or any part of its rights, benefits and/or
obligations under this Agreement and/or any of the other Security Documents to any one or
more banks or other financial institutions (a “Transferee”) (i) if the Transferee is a
company affiliated to, or in the same group or ownership or control as the Lender, or an
Event of Default has occurred which is continuing, without the consent of the Borrower and
(ii) otherwise, with the prior written consent of the Borrower (such consent not to be
unreasonably withheld) provided always that any such Transferee, by delivery of such
undertaking as the Lender may approve, becomes bound by the terms of this Agreement and
agrees to perform all or, as the case may be, the relevant part of the Lender’s
obligations under this Agreement.
	 
	15.4	 	Documentation
	 
	 	 	If the 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 Lender, to enter into, and procure that the
other Security Parties shall enter into, such documents as may be necessary or desirable
to transfer to the Transferee all or the relevant part of the Lender’s interest in the
Security Documents. Thereafter, all relevant references in this Agreement to the Lender
shall be construed as a reference to the Lender and/or its Transferee to the extent of
their respective interests.

36

 

	15.5	 	Lending office
	 
	 	 	The Lender shall lend through its office at the address specified above or through any
other office of the Lender selected from time to time by it through which the Lender
wishes to lend for the purposes of this Agreement.
	 
	15.6	 	Disclosure of information
	 
	 	 	The Lender may disclose to a prospective assignee, transferee or to any other person who
may propose entering into contractual relations with the Lender in relation to this
Agreement such information about or in connection with any of the Security Parties and the
Security Documents as the Lender considers appropriate.
	 
	16	 	NOTICES AND OTHER MATTERS
	 
	16.1	 	Notices
	 
	16.1.1	 	unless otherwise specifically provided herein, every notice under or in connection with this
Agreement shall be given in English by letter delivered personally and/or sent by post and/or
transmitted by fax and/or electronically;
	 
	16.1.2	 	in this clause “notice” includes any demand, consent, authorisation, approval, instruction,
certificate, request, waiver or other communication.
	 
	16.2	 	Addresses for communications, effective date of notices
	 
	16.2.1	 	Subject to clause 16.2.2, clause 16.2.4 and 16.3 notices to the Borrower shall be deemed to
have been given and shall take effect when received in full legible form by the Borrower at
the address and/or the fax number appearing below (or at such other address or fax number as
the Borrower may hereafter specify for such purpose to the Lender by notice in writing);

	 	 	 	 	 
	 
	 	Address	 	331 Kifissias Avenue
	 
	 	 	 	Kifissia 145 61
	 
	 	 	 	Greece
	 
	 	 	 	 
	 
	 	Fax No:	 	+ 30 210 625 2817

	16.2.2	 	notwithstanding the provisions of clause 16.2.1 or clause 16.2.4, a notice of Default and/or
a notice given pursuant to clause 10.2 or clause 10.3 to the Borrower shall be deemed to have
been given and shall take effect when delivered, sent or transmitted by the Lender to the
Borrower to the address or fax number referred to in clause 16.2.1;
	 
	16.2.3	 	subject to clause 16.2.4, notices to the Lender shall be deemed to be given, and shall take
effect, when received in full legible form by the Lender at the address and/or the fax number
address appearing below (or at any such other address or fax number as the Lender may
hereafter specify for such purpose to the Borrower by notice in writing);

	 	 	 	 	 
	 

	 	Address
	 	Ludwig-Erhard-Strasse 1
	 

	 	 	 	20459 Hamburg
	 

	 	 	 	Germany
	 
	 	 	 	 
	 

	 	Fax no:
	 	+49 40 3701 4649
	 
	 	 	 	 
	 

	 	Attn:
	 	Eva Neugebauer

37

 

	16.2.4	 	if under clause 16.2.1 or clause 16.2.3 a notice would be deemed to have been given and
effective on a day which is not a working day in the place of receipt or is outside the normal
business hours in the place of receipt, the notice shall be deemed to have been given and to
have taken effect at the opening of business on the next working day in such place.
	 
	16.3	 	Electronic Communication
	 
	16.3.1	 	Any communication to be made by and/or between the Lender and the Security Parties or any of
them under or in connection with the Security Documents or any of them may be made by
electronic mail or other electronic means, if and provided that all such parties:

	 	(a)	 	notify each other in writing of their electronic mail address and/or any
other information required to enable the sending and receipt of information by that
means; and
	 
	 	(b)	 	notify each other of any change to their electronic mail address or any
other such information supplied by them.

	16.3.2	 	Any electronic communication made by and/or between the Lender and the Security Parties or
any of them will be effective only when actually received in readable form and, in the case of
any electronic communication made by the Borrower to the Lender, only if it is addressed in
such manner as the Lender shall specify for this purpose.
	 
	17	 	GOVERNING LAW
	 
	 	 	This Agreement is governed by and shall be construed in accordance with English law.
	 
	18	 	JURISDICTION
	 
	18.1	 	Exclusive Jurisdiction
	 
	 	 	For the benefit of the Lender, and subject to clause 18.4 below, the Borrower hereby
irrevocably agrees that the courts of England shall have exclusive jurisdiction:
	 
	18.1.1	 	to settle any disputes or other matters whatsoever arising under or in connection with this
Agreement and any disputes or other such matters arising in connection with the negotiation,
validity or enforceability of this Agreement or any part thereof, whether the alleged
liability shall arise under the laws of England or under the laws of some other country and
regardless of whether a particular cause of action may successfully be brought in the English
courts; and
	 
	18.1.2	 	to grant interim remedies or other provisional or protective relief.
	 
	18.2	 	Submission and service of process
	 
	 	 	The Borrower accordingly irrevocably and unconditionally submits to the jurisdiction of
the English courts. Without prejudice to any other mode of service the Borrower:
	 
	18.2.1	 	irrevocably empowers and appoints Saville & Co. of One Carey Lane, London EC2V 8AE, England
as its agent to receive and accept on its behalf any process or other document relating to any
proceedings before the English courts in connection with this Agreement;
	 
	18.2.2	 	agrees to maintain such an agent for service of process in England from the date hereof
until the end of the Facility Period;

38

 

	18.2.3	 	agrees that failure by a process agent to notify the Borrower of service of process will not
invalidate the proceedings concerned;
	 
	18.2.4	 	without prejudice to the effectiveness of service of process on its agent under clause
18.2.1 above but as an alternative method, consents to the service of process relating to any
such proceedings by mailing or delivering a copy of the process to its address for the time
being applying under clause 18.2;
	 
	18.2.5	 	agrees that if the appointment of any person mentioned in clause 18.2.1 ceases to be
effective, the Borrower shall immediately appoint a further person in England to accept
service of process on its behalf in England and, failing such appointment within seven (7)
days the Lender shall thereupon be entitled and is hereby irrevocably authorised by the
Borrower in those circumstances to appoint such person by notice to the Borrower.
	 
	18.3	 	Forum non conveniens and enforcement abroad
	 
	 	 	The Borrower:
	 
	18.3.1	 	waives any right and agrees not to apply to the English court or other court in any
jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the
ground that England is an inappropriate forum and/or that Proceedings have been or will be
started in any other jurisdiction in connection with any dispute or related matter falling
within clause 18.1; and
	 
	18.3.2	 	agrees that a final unappealable judgment or order of an English court in a dispute or other
matter falling within clause 18.1 shall be conclusive and binding on the Borrower and may be
enforced against it in the courts of any other jurisdiction.
	 
	18.4	 	Right of Lender, but not Borrower, to bring proceedings in any other jurisdiction
	 
	18.4.1	 	Nothing in this clause 18 limits the right of the Lender to bring Proceedings, including
third party proceedings, against the Borrower, or to apply for interim remedies, in connection
with this Agreement in any other court and/or concurrently in more than one jurisdiction;
	 
	18.4.2	 	the obtaining by the Lender of judgment in one jurisdiction shall not prevent it from
bringing or continuing proceedings in any other jurisdiction, whether or not these shall be
founded on the same cause of action.
	 
	18.5	 	Enforceability despite invalidity of Agreement
	 
	 	 	Without prejudice to the generality of clause 13.9, the jurisdiction agreement contained
in this clause 18 shall be severable from the rest of this Agreement and shall remain
valid, binding and in full force and shall continue to apply notwithstanding this
Agreement or any part thereof being held to be avoided, rescinded, terminated, discharged,
frustrated, invalid, unenforceable, illegal and/or otherwise of no effect for any reason.
	 
	18.6	 	Effect in relation to claims by and against non-parties
	 
	18.6.1	 	For the purpose of this clause “Foreign Proceedings” shall mean any Proceedings except
proceedings brought or pursued in England arising out of or in connection with (i) or in any
way related to any of the Security Documents or any assets subject thereto or (ii) any action
of any kind whatsoever taken by the Lender pursuant thereto or which would, if brought by the
Borrower against the Lender, have been required to be brought in the English courts;

39

 

	18.6.2	 	the Borrower shall not bring or pursue any Foreign Proceedings against the Lender and shall
use its best endeavours to prevent persons not party to this Agreement from bringing or
pursuing any Foreign Proceedings against the Lender;
	 
	18.6.3	 	If, for any reason whatsoever, any Security Party and/or any person connected howsoever with
any Security Party (including but not limited to any shareholder of the Borrower) brings or
pursues against the Lender any Foreign Proceedings, the Borrower shall indemnify the Lender on
demand in respect of any and all claims, losses, damages, demands, causes of action,
liabilities, costs and expenses (including, but not limited to, legal costs) of whatsoever
nature howsoever arising from or in connection with such Foreign Proceedings which the Lender
certifies as having been incurred by it;

the Lender and the Borrower hereby agree and declare that the benefit of this clause 18 shall
extend to and may be enforced by any officer, employee, agent or business associate of the Lender
against whom the Borrower brings a claim in connection howsoever with any of the Security Documents
or any assets subject thereto or any action of any kind whatsoever taken by, or on behalf of or for
the purported benefit of the Lender pursuant thereto or which, if it were brought against the
Lender, would fall within the material scope of clause 18.1. In those circumstances this clause 18
shall be read and construed as if references to the Lender were references to such officer,
employee, agent or business associate, as the case may be.

40

 

Schedule 1

Form of Drawdown Notice

			
	To:	 	Deutsche Bank AG Filiale Deutschlandgeschäft

Ludwig-Erhard-Strasse 1

20459 Hamburg

Germany

[•] 2008

Dear Sirs

Facility agreement dated [          ] February 2008 in respect of a loan of USD40,250,000 (the “Loan
Agreement”) made between (1) Stealthgas Inc. as Borrower and (2) Deutsche Bank AG Filiale
Deutschlandgeschäft as Lender.

We refer to the Loan Agreement. Words and expressions whose meanings are defined therein shall
have the same meanings when used herein.

We hereby give you notice that we wish to draw the sum of USD [                     ] on [date] 2008 in respect of the
Loan for payment to [     ] and select a first Interest Period in respect of such drawing of [•]
months. The funds should be credited to [     ] with [     ] .

We confirm that:

	(a)	 	no Default has occurred;
	 
	(b)	 	the representations and warranties contained in clause 7 of the Loan Agreement 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 the Loan is within our corporate
powers, has been validly authorised by appropriate corporate action; and
	 
	(d)	 	there are no Required Authorisations.

	 	 	 	 	 
	 	 	 
	By  	
 	 	 
	 	Authorised Signatory 	 	 
	 	STEALTHGAS INC. 	 	 

41

 

	 	 	 	 	 

Schedule 2

Conditions precedent

Part 1

	(a)	 	Corporate documents
	 
	 	 	Certified Copies of all documents which evidence or relate to the constitution of each
Security Party and its current corporate existence;
	 
	(b)	 	Corporate authorities

	 	(i)	 	Certified Copies of resolutions of the directors of each Security Party
approving such of the Security Documents to which such Security Party is a party and
authorising the execution and delivery thereof and performance of such Security
Party’s obligations thereunder, additionally certified by an officer of such Security
Party as having been duly passed at a duly convened meeting of the directors of such
Security Party and not having been amended, modified or revoked and being in full
force and effect; and
	 
	 	(ii)	 	originals or Certified Copies of any powers of attorney issued by any
Security Party pursuant to such resolutions;

	(c)	 	Required Authorisations
	 
	 	 	a certificate (dated no earlier than 5 Banking Days prior to the Drawdown Date) that there
are no Required Authorisations or that there are no Required Authorisations except those
described in such certificate and Certified Copies of which as duly executed (including
any conditions and/or documents ancillary thereto) are appended thereto.
	 
	(d)	 	Certificate of incumbency
	 
	 	 	a list of directors and officers of each Security Party specifying the names and positions
of such persons, certified by an officer of such Security Party to be true, complete and
up to date;
	 
	(e)	 	Master Agreement, etc
	 
	 	 	the Master Agreement, the Master Agreement Assignment and the Earnings Account Pledge duly
executed and delivered;
	 
	(f)	 	Know-your-customer
	 
	 	 	all such documentation and information as the Lender may require from any Security Party
pursuant to the Lender’s “know-your-customer” requirements in respect of the Borrower and
the Guarantor;
	 
	(g)	 	Fees
	 
	 	 	evidence that such fees as are due and payable on the Execution Date will have been paid
in full; and
	 
	(h)	 	Borrower’s process agent
	 
	 	 	a letter from the agent for receipt of service of proceedings referred to in clause
18.2.1 accepting its appointment under each of the Security Documents in which it is or
is to be appointed as the agent for any Security Party.

42

 

Part 2

	(a)	 	Evidence satisfactory to the Lender that the Vessel:

	 	(i)	 	Purchase
	 
	 	 	 	has been unconditionally delivered by the Builder to the Seller, and thereafter
unconditionally on-delivered by the Seller to, and accepted by, the Guarantor
under the MOA, and the full purchase price payable under the MOA (in addition to
the part to be financed by the Loan) has been duly paid, together with a copy of
the bill of sale and protocol of delivery and acceptance relating thereto
together with evidence that the gross purchase price payable under the MOA is USD
57,500,000;
	 
	 	(ii)	 	Registration and Encumbrances
	 
	 	 	 	is registered in the name of the Guarantor through the Registry under the laws
and flag of the Marshall Islands and that she and her Earnings, Insurances and
Requisition Compensation (as defined in the Mortgage) and the Approved Charter
are free of Encumbrances except Permitted Encumbrances;
	 
	 	(iii)	 	Classification
	 
	 	 	 	has received and maintains the Classification free of all requirements and
recommendations of the Classification Society; and
	 
	 	(iv)	 	Insurance
	 
	 	 	 	is insured in accordance with the provisions of the Vessel Security Documents and
all requirements of the Vessel Security Documents in respect of such insurance
have been complied with (including without limitation, receipt by the Lender of
customary brokers’ letters of undertaking regarding the placing of hull and
machinery and war risks cover and confirmation from the protection and indemnity
association or other insurer with which the Vessel is entered for insurance or
insured against protection and indemnity 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 her);
	 
	 	(iii)	 	Charter
	 
	 	 	 	has been delivered to and unconditionally accepted by the Approved Charterer
under and in accordance with the Approved Charter;
	 
	 	(v)	 	Sub-charter
	 
	 	 	 	will forthwith be sub-charterered for at least two years by the Approved Charterer
to American Eagle Tankers, a subsidiary of Petroliam Nasional Berhad of Malaysia.

	(b)	 	Security Documents
	 
	 	 	the Guarantee, the Mortgage, the General Assignment, the Tripartite Deed and the Charter
Assignment each duly executed and delivered;
	 
	(c)	 	Notices of assignment and acknowledgements

43

 

	 	 	counterpart originals of duly executed notices of assignment required by the terms of the
Security Documents referred to in (b) above and in the forms prescribed by these Security
Documents and any other documents required to be delivered pursuant thereto;
	 
	(d)	 	Mortgage registration
	 
	 	 	evidence that the Mortgage has been duly registered against the Vessel in accordance with
the laws of the Marshall Islands;
	 
	(e)	 	Underlying Documents
	 
	 	 	Certified Copies of all of the Underlying Documents in a form and substance acceptable to
the Lender.
	 
	(f)	 	Laws of the Marshall Islands opinion
	 
	 	 	an opinion of Messrs Blank Rome, special legal advisers in New York to the Lender;
	 
	(g)	 	Further opinions
	 
	 	 	any such further opinions as may be required by the Lender;
	 
	(h)	 	ISPS Code
	 
	 	 	evidence satisfactory to the Lender that the Vessel is subject to a ship security plan
which complies with the ISPS Code and a copy of the ISSC for the Vessel; and
	 
	(i)	 	Valuations
	 
	 	 	an up-to-date valuation prepared at the cost of the Borrower by an Approved
Broker giving her charter-fee value in scope, form and substance acceptable to
the Lender.

44

 

Schedule 3

Form of Compliance Certificate

To:      Deutsche Bank AG Filiale Deutschlandgeschäft (as Lender)

From:

Date [               ] 200[  ]

Facility agreement dated [          ] 2008 in respect of a loan of USD40,250,000 (the “Loan Agreement”) made
between (1) Stealthgas Inc. as Borrower and (2) Deutsche Bank AS Filiale Deutschlandgeschäft as
Lender.

Dear Sirs

We refer to the Loan Agreement. Words and expressions whose meanings are defined in the Loan
Agreement shall have the same meanings when used herein.

We hereby confirm that [except as stated below] as at the date hereof to the best of our knowledge
and belief after due inquiry:-

	1.	 	the aggregate cash owned by the Group which is freely available and not subject to
any Encumbrance is USD[                    ] and the number of ships owned by the
Group is [          ];
	 
	2.	 	the ratio of EBITDA to Interest Expense for the 12 month period ending on [          ] is [          ]to 1;
	 
	3.	 	the ratio of Total Debt (less Unencumbered Cash) of the Group to Total Assets (less
Unencumbered Cash) is [          ] to 1;
	 
	4.	 	no Default has occurred;
	 
	5.	 	the representations set out in clause 7 of the Loan Agreement are true and accurate
with reference to all facts and circumstances now existing and all Required
Authorisations have been obtained and are in full force and effect.

[State any exceptions/qualifications to the above statements]

Yours faithfully

[          ]

	 	 	 	 	 
	 	 	 
	By        	
 	 	 
	 	[Chief Financial Officer : STEALTHGAS INC./MR ROI INC.] 	 	 
	 	 	 	 

45

 

	 	 	 	 	 

Execution Pages

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

	 	 	 
	SIGNED as a deed by
	 	)
	for and on behalf of
	 	)
	STEALTHGAS INC.
	 	)
	(as Borrower under and pursuant to
	 	)
	a power of attorney dated
	 	)
	February 2008) in the presence of
	 	)
	 
	 	 
	SIGNED by
	 	)
	for and on behalf of
	 	)
	DEUTSCHE BANK AG
	 	)
	FILIALE DEUTSCHLANDGESCHÄFT`
	 	)
	(as Lender under and pursuant to
	 	)
	a power of attorney dated
	 	)
	February 2008) in the presence of
	 	)

46EX-4.26

Private & confidential

Dated: 19th February, 2009

EFG EUROBANK ERGASIAS S.A.

-and-

STEALTHGAS INC.

 

LOAN AGREEMENT

for a secured floating interest rate

loan facility of up to US$37,500,000

 

Theo V. Sioufas & Co.

Law Offices

Piraeus

 

 

TABLE
OF CONTENTS

	 	 	 	 	 	 	 
	CLAUSE	 	HEADINGS	 	PAGE	 

	 	 	 	 	 	 	 
	1.
	 	PURPOSE, DEFINITIONS AND INTERPRETATION 	 	 	1	 
	2.
	 	THE LOAN 	 	 	14	 
	3.
	 	INTEREST 	 	 	17	 
	4.
	 	REPAYMENT — PREPAYMENT 	 	 	20	 
	5.
	 	PAYMENTS, TAXES AND COMPUTATION 	 	 	25	 
	6.
	 	REPRESENTATIONS AND WARRANTIES 	 	 	27	 
	7.
	 	CONDITIONS PRECEDENT 	 	 	33	 
	8.
	 	COVENANTS 	 	 	38	 
	9.
	 	EVENTS OF DEFAULT 	 	 	48	 
	10.
	 	INDEMNITIES — EXPENSES — FEES 	 	 	55	 
	11.
	 	SECURITY, APPLICATION AND SET-OFF 	 	 	60	 
	12.
	 	UNLAWFULNESS, INCREASED COSTS 	 	 	64	 
	13.
	 	ASSIGNMENT, PARTICIPATION, CHANGE OF LENDING BRANCH 	 	 	66	 
	14.
	 	COMMUNICATIONS 	 	 	69	 
	15.
	 	GOVERNING LAW AND JURISDICTION 	 	 	71	 
	 
	 	 	 	 	 	 
	SCHEDULE

	1.
	 	FORM OF DRAWDOWN NOTICE	 	 	 	 

 

 

THIS AGREEMENT is dated 19th February, 2009 made BETWEEN:

	(1)	 	EFG EUROBANK ERGASIAS S.A., a banking societe anonyme duly incorporated
under the laws of Greece, having its registered office at 8 Othonos Street, Athens,
Greece, acting for the purposes of this Agreement through its office at 83 Akti
Miaouli, Piraeus, Greece, as lender (the “Bank”); and
	 
	(2)	 	STEALTHGAS INC., a company duly incorporated in the Republic of The Marshall
Islands having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, P.O. Box 1405, Majuro, Marshall Islands MH 96960 (the
“Borrower”, which expression includes its successors)

AND IT IS HEREBY AGREED as follows:

	1.	 	PURPOSE, DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions upon and subject to which it is agreed
that the Bank will make available to the Borrower a term loan of up to the lesser of (a)
Thirty seven million five hundred thousand Dollars ($37,500,000) and (b) 75% of the Market
Value of the Vessel determined in accordance with Clause 8.10(b) to be used for the purpose
of financing part of the acquisition cost (according to the MOA) of the Vessel.
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires each term or expression defined in
the recital of the parties and in this Clause shall have the meaning given to it in the
recital of the parties and in this Clause and:
	 
	 	 	“Accounts Pledge Agreement” means an agreement to be made between the Owner and the Bank
for the creation of a pledge in favour of the Bank over the Earnings Account and the
Retention Account, in form satisfactory to the Bank;
	 
	 	 	“Agreed Rate” means a rate agreed between the Bank and the Borrower on the basis of which
(instead of LIBOR) the interest rate is determined pursuant to Clause 3.6;
	 
	 	 	“Availability Period” means the period starting on the date hereof and ending on the
earlier of (i) three months after the contractual delivery date of the Vessel and (ii)
30th July, 2009 or until such later date as the Bank may agree in writing or on
such earlier date (if any), (i) on which the whole Commitment has been advanced by the
Bank to the Borrower, or (ii) on which the Borrower cancels the whole of the undrawn
Commitment under Clause 2.7 or (iii) on which the Commitment is reduced to zero pursuant
to Clauses 9.10 or 12.2 or 12.5 or any other Clause of this Agreement;
	 
	 	 	“Balloon Instalment” means the principal part of the Loan amounting to $14,750,000
(Fourteen million seven hundred fifty thousand Dollars);

1

 

	 	 	“Bank” means the Bank as specified in the beginning of this Agreement and the successors and
assigns of the Bank;
	 
	 	 	“Banking Day” means any day on which banks and foreign exchange markets in New York, London, Athens
and Piraeus and in each country or place in or at which an act is required to be done under this
Agreement in accordance with the usual practice of the Bank, are open for the transaction of
business of the nature contemplated in this Agreement;
	 
	 	 	“Borrowed Money” means Indebtedness incurred in respect of (i) money borrowed or raised, (ii) any
bond, note, loan stock, debenture or similar instrument, (iii) acceptance or documentary credit
facilities, (iv) deferred payments for assets or services acquired, (v) rental payments under
leases (whether in respect of land, machinery, equipment or otherwise) entered into primarily as a
method of raising finance or of financing the acquisition of the asset leased, (vi) guarantees,
bonds, stand-by letters of credit or other instruments issued in connection with the performance of
contracts and (vii) guarantees or other assurances against financial loss in respect of
Indebtedness of any person falling within any of paragraphs (i) to (vi) above;
	 
	 	 	“Borrower” means the Borrower as specified at the beginning of this Agreement;
	 
	 	 	“Charterparty” means in respect of the Vessel any time charterparty entered or to be entered by
the Owner or any person, firm or company on its behalf, as owner, and a charterer acceptable to
the Bank (herein a “Charterer”), which Charterparty exceeds or is capable of exceeding twelve (12)
months in duration and on terms and conditions in all respects acceptable to the Bank (and shall
include any addenda thereto) and includes the C & Shipping Charterparty;
	 
	 	 	“Charterparty Assignment” in relation to the Vessel means the assignment of the any Charterparty
executed or (as the context may require) to be executed by the Owner in favour of the Bank and an
acknowledgement of notice of the assignment in respect of such Charterparty to be given by the
relevant Charterer, in form satisfactory to the Bank;
	 
	 	 	“Commitment” means the amount which the Bank has agreed to lend to the Borrower under Clause 2.1
as reduced pursuant to any relevant term of this Agreement;
	 
	 	 	“Commitment Letter” means the Commitment Letter dated 14th January, 2009 of the Bank
and shall include any amendments or addenda thereto;
	 
	 	 	“Confirmation” means a Confirmation exchanged, or deemed exchanged, between the Bank and the
Borrower as contemplated by the Master Agreement;
	 
	 	 	“Corporate Guarantor” means the Owner;

2

 

	 	 	“Corporate Guarantee” means any guarantee given or, as the context may require, to be given by a
Corporate Guarantor in form and substance satisfactory to the Bank as a security for the
Outstanding Indebtedness and any and all other obligations of the Borrower under this Agreement
and the Master Agreement;
	 
	 	 	“Credit Support Document” means any document described as such in the Master Agreement and, where
the context permits, any other document referred to in any Credit Support Document which has the
effect of creating an Encumbrance in favour of the Bank;
	 
	 	 	“C & Shipping Charterparty” means in relation to the Vessel means the time charter to be entered
into between C & Shipping CO. LTD., of 14th Floor, Changgyo Building, 1
Changgyo Dong, Chung-Gu, Seoul, South Korea, as charterer (the “Charterer”), and the Owner, as
owner, for the time-charter employment of the Vessel for a period of at least 36 months, at a
minimum net hire rate of $22,000 and with all other terms and conditions acceptable to the Bank;
	 
	 	 	“Default” means any Event of Default or any event which with the giving of notice or lapse of time
or the satisfaction of any other condition (or any combination thereof) would constitute an Event
of Default;
	 
	 	 	“Default Rate” means that rate of interest per annum which is determined in accordance with the
provisions of Clause 3.4;
	 
	 	 	“Delivery” means the delivery of the Vessel by the Seller to the Borrower, and the acceptance of
the Vessel by the Borrower, pursuant to the MOA;
	 
	 	 	“Delivery Date” means the date upon which Delivery occurs;
	 
	 	 	“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the ISM
Code;
	 
	 	 	“Dollars” and “$” mean the lawful currency of the United States of America and in respect of all
payments to be made under any of the Security Documents means funds which are for same day
settlement in the New York Clearing House Interbank Payments System (or such other U.S. dollar
funds as may at the relevant time be customary for the settlement of international banking
transactions denominated in Dollars);
	 
	 	 	“Drawdown Date” means the day, being a Banking Day, on which the Commitment is or, as the context
may require, shall be advanced to the Borrower;
	 
	 	 	“Drawdown Notice” means a notice substantially in the terms of Schedule 1;
	 
	 	 	“Early Termination Date” has the meaning given to that expression in section 14 of the Master
Agreement;

3

 

	 	 	“Earnings” in relation to the Vessel, means all earnings of the Vessel, both present or future,
including all freight, hire and passage moneys, compensation payable to the Owner in the event
of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage
and detention moneys, contributions of any nature whatsoever in respect of general average,
damages for breach (or payments for variation or termination) of any Charterparty or other
contract for the employment of the Vessel and any other earnings whatsoever due or to become due
to the Owner in respect of the Vessel and all sums recoverable under the Insurances in respect
of loss of Earnings and includes, if and whenever the Vessel is employed on terms whereby any
and all such moneys as aforesaid are pooled or shared with any other person, that proportion of
the net receipts of the relevant pooling or sharing agreement which is attributable to the
Vessel;
	 
	 	 	“Earnings Account” means an account opened or to be opened and maintained in the name of the
Owner with the Bank pursuant to Clause 11.7 and shall include any sub-accounts or call accounts
(whether in Dollars or any other currency) opened under the same designation or any revised
designation or number from time to time notified by the Bank to the Borrower or the Owner and
to which (inter alia) all Earnings of the Vessel are to be paid in accordance with Clauses 11.7
and 8.9(b);
	 
	 	 	“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, security interest, title retention, arrest, seizure, garnishee order
(whether nisi or absolute) or any other order or judgement having similar effect or other
encumbrance of any kind securing or any right conferring a priority of payment in respect of
any obligation of any person;
	 
	 	 	“Environmental Affiliate” in relation to the Vessel means any agent or employee of the Owner or
any other Relevant Party or any person having a contractual relationship with the Owner or any
other Relevant Party in connection with any Relevant Ship or her operation or the carriage of
cargo thereon;
	 
	 	 	“Environmental Approval” means any consent, authorisation, licence or approval of any
governmental or public body or authorities or courts applicable to any Relevant Ship or her
operation or the carriage of cargo thereon and/or passengers therein and/or provisions of goods
and/or services on or from the Relevant Ship required under any Environmental Law;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable governmental,
judicial or other regulatory authority alleging breach of, or non-compliance with, any
Environmental Laws or Environmental Approvals or otherwise howsoever relating to or arising out
of an Environmental Incident or (ii) any claim by any other third party howsoever relating to
or arising out of an Environmental Incident (and, in each such case, “claim” shall mean a claim
for damages, clean-up costs, compliance, remedial action or otherwise);

4

 

	 	 	“Environmental Incident” in relation to the Vessel means (i) any release of Material of
Environmental Concern from the Vessel, (ii) any incident in which Material of Environmental Concern
is released from the Vessel other than the Vessel and which involves collision between the Vessel
and such other vessel or some other incident of navigation or operation, in either case, where the
Vessel, the Owner or the Manager are actually 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 Vessel and where the Vessel is actually liable to be arrested as a result and/or where the
Owner or the Manager are actually at fault or otherwise liable;
	 
	 	 	“Environmental Laws” means all national, international and state laws, rules, regulations,
treaties and conventions applicable to any Relevant Ship pertaining to the pollution or protection
of human health or the environment including, without limitation, the carriage or Materials of
Environmental Concern and actual or threatened emissions, spills, releases or discharges of
Materials of Environmental Concern and actual or threatened emissions, spills, releases or
discharges of Materials of Environmental Concern from any Relevant Ship (including, without
limitation, the United States Oil Pollution Act of 1990 and any comparable laws of the individual
States of the United States of America);
	 
	 	 	“Event of Default” means any event or circumstance set out in Clause 9 or described as such in any
other of the Security Documents;
	 
	 	 	“Expenses” means the aggregate at any relevant time (to the extent that the same have not been
received or recovered by the Bank) of:

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

	 	 	“Final Maturity Date” means the date falling ten (10) years from the Drawdown Date;

5

 

	 	 	“Flag State” means the Republic of Marshall Islands or such other state or territory proposed in
writing by the Owner to the Bank and approved (at its sole discretion) by the Bank, as being the
Flag State of the Vessel for the purposes of the Security Documents;
	 
	 	 	“Funding Cost” means the discount margin i.e. the spread over the 3 month Euribor the investment
community requires in order to place funds to a floating rate note of at least €500,000,000 (Five
hundred million Euro) with the longest maturity at the time issued by EFG Hellas PLC under the
guarantee of the Bank), provided that the calculation (through Bloomberg pricing) of such discount
margin will be based on the arithmetic average of at least two (2) firm bid prices quoted to the
Bank by leading European or Greek banks two (2) Banking Days before the relevant Interest Payment
Date;
	 
	 	 	“General Assignment” in relation to the Vessel means the assignment collateral to the relevant
Mortgage executed or (as the context may require) to be executed by the Owner in favour of the
Security Agent in form satisfactory to the Security Agent;
	 
	 	 	“Governmental Withholdings” means withholdings and any restrictions or conditions resulting in any
charge whatsoever imposed, either now or hereafter, by any sovereign state or by any political
sub-division or taxing authority of any sovereign state;
	 
	 	 	Group” means the Borrower, its Subsidiaries (including the Owner) and “Group Member” means any
member of the Group;
	 
	 	 	“IAS” means International Accounting Standards consistently applied;
	 
	 	 	“Indebtedness” means any obligation for the payment or repayment of money, whether as principal
or as surety, whether present or future, actual or contingent;
	 
	 	 	“Insurances” in relation to the Vessel means in respect of the Vessel all policies and contracts
of insurance and reinsurances for captive company, if applicable, (including, without limitation,
all entries of the Vessel in a protection and indemnity, war risks or other mutual insurance
association) which are from time to time in place or taken out or entered into by or for the
benefit of the Owner (whether in the sole name of the Owner or in the joint names of the Owner
and the Security Agent) in respect of the Vessel and its earnings or otherwise howsoever in
connection with the Vessel and all benefits of such policies and/or contracts (including all
claims of whatsoever nature and return of premiums);
	 
	 	 	“Interest Payment Date” means in respect of the Loan or any part thereof in respect of which a
separate Interest Period is fixed the last day of the relevant Interest Period and in case of any
Interest Period longer than three (3) months the date(s) falling at successive three (3) monthly
intervals during such longer Interest Period and the last day of such Interest Period;

6

 

	 	 	“Interest Period” means in relation to the Loan or any part thereof, each period for the
calculation of interest in respect of the Loan or such part ascertained in accordance with Clauses
3.2 and 3.3;
	 
	 	 	“ISM Code” means in relation to its application to the Owner, the Vessel and her operation:

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

	 	 	as the same may be amended, supplemented or replaced from time to time;
	 
	 	 	“ISM Code Documentation” includes:

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

	 	 	“ISM SMS” means the safety management system which is required to be developed, implemented and
maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Security Code of the International Maritime
Organization and includes any amendments or extensions thereto and any regulation issued pursuant
thereto;
	 
	 	 	“ISSC” means an International Ship Security Certificate issued in respect of the Vessel pursuant
to the ISPS Code;

7

 

	 	 	“Lending Branch” means the office of the Bank appearing at the beginning of this Agreement or any
other office of the Bank designated by the Bank as the Lending Branch by notice to the Borrower;
	 
	 	 	“LIBOR” means in relation to any amount and for any period:

	 	(a)	 	the offered rate (if any) per annum for deposits in Dollars for such amount and
for such period which is the rate, for such period, appearing on the relevant
page of the Reuters Screen LIBOR01 at or about 11 a.m. London time on the
Quotation Date (or, if the Bank shall have made a determination pursuant to
Clause 3.6 such later time (not being later than 1 p.m. (London time) on the
first day of such period) as the Bank may determine) (and, for the purposes of
this Agreement, “Reuters Screen LIBOR01” means the display designated as
“LIBOR01” on the Reuters Service or such other page as may replace
LIBOR01 on that service for the purpose of displaying rates comparable to that
rate or on such other service as may be nominated by the British Bankers’
Association as the information vendor for the purpose of displaying the British
Bankers’ Association Interest Settlement Rates for Dollars); and
	 
	 	(b)	 	if on such date no such rate is so displayed, LIBOR for such period shall be the
rate determined by the Bank in accordance with its usual practices to obtain
similar deposit(s) in Dollars on the basis of the rates quoted by the Bank as the
Bank’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 for the time being borrowed by and advanced to the
Borrower in respect of the Commitment or (as the context may require) the principal amount owing
to the Bank under this Agreement at any relevant time;
	 
	 	 	“Major Casualty Amount” means any casualty to the Vessel in respect whereof the claim or the
aggregate of the claims against all insurers, before adjustment for any relevant franchise or
deductible, exceeds seven hundred fifty thousand Dollars ($1,500,000) or the equivalent in any
other currency;
	 
	 	 	“Management Agreement” in relation to the Vessel means the agreement made or to be made between
the Owner and the Manager providing for the appointment of the Manager to manage the Vessel
subject to and upon the terms and conditions therein contained and approved by the Bank;
	 
	 	 	“Manager” means stealth maritime corp. S.A., a company duly incorporated under the laws
of the Republic of Liberia, whose registered office is at 80 Broad Street, Monrovia, Liberia and
having an established office in Greece under Greek laws 89/67, 378/68, 25/75 and 814/79 (as
amended) at 331 Kifissias Avenue, 145 61

8

 

	 	 	Kifissia, Athens, Greece and/or any other person nominated by the Borrower and acceptable to the
Bank which shall manage the Vessel;
	 
	 	 	“Manager’s Undertaking” in relation to the Vessel means letter of undertaking and subordination
executed or (as the context may require) to be executed by the Manager in favour of the Bank, such
undertaking to be in form and substance satisfactory to the Bank;
	 
	 	 	“Margin” means either:

	 	(a)	 	two point five zero per centum (2.50%) per annum (“Margin A”);
	 
	 	or	 	 
	 
	 	(b)	 	one point three zero per centum (1.30%) per annum (“Margin B”);

	 	 	“Master Agreement” means the Master Agreement (on the 1992 ISDA (Multicurrency — Crossborder) form
as modified (or any other form of master agreement relating to interest or currency exchange
transactions)) made or to be made between the Bank and the Borrower, and includes the Schedule
thereto and all transactions from time to time entered into and Confirmations from time to time
exchanged under the Master Agreement and any amending, supplementing or replacement agreements
made from time to time;
	 
	 	 	“Master Agreement Liabilities” means, at any relevant time, all liabilities actual or contingent,
present or future, of the Borrower to the Bank under the Master Agreement;
	 
	 	 	“Master Agreement Security Deed” means, in relation to the Master Agreement, the security deed
executed or (as the context may require) to be executed by the Borrower in favour of the Bank in
relation to certain of the rights of the Borrower under the Master Agreement in form and substance
satisfactory to the Bank;
	 
	 	 	“Market Value” in relation to the Vessel means the market value of the Vessel as determined in
accordance with Clause 8.10(b);
	 
	 	 	“Material of Environmental Concern” means and includes pollutants, contaminants toxic substances,
oil as defined in the United States Oil Pollution Act of 1990 and all hazardous substances as
defined in the United States Comprehensive Environmental Response, Compensation and Liability Act
1988;
	 
	 	 	“MOA” means the Memorandum of Agreement
dated
18th
March, 2008 entered into between (a) East Maritime Pte Ltd.,
 of Singapore (herein, the “Seller”) and (b) the Owner, as buyer
of the Vessel, in respect of the sale by the Seller and the purchase by the Owner of the Vessel
and shall include any and all addenda thereto;
	 
	 	 	“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

9

 

	 	 	month on which it started provided that (i) if there is no such numerically corresponding day, it
shall end on the last Banking Day in such next calendar month and (ii) if such numerically
corresponding day is not a Banking Day, the period shall end on the next following Banking Day in
the same calendar month but if there is no such Banking Day it shall end on the proceeding Banking
Day and “months” and “monthly” shall be construed accordingly;
	 
	 	 	“Mortgage” means in relation to the Vessel the first preferred ship mortgage or, as the case may,
first priority ship mortgage and the Deed of Covenants supplemental thereto, to be executed by the
Owner in favour of the Bank in form satisfactory to the Bank and be registered on the Vessel on
the Drawdown Date;
	 
	 	 	“Operator” means in relation to the Vessel any person who is from time to time during the Security
Period concerned in the operation of the Vessel and falls within the definition of “Company” set
out in rule 1.1.2. of the ISM Code;
	 
	 	 	“Outstanding Indebtedness” means the aggregate of the Loan and interest accrued and accruing
thereon, the Expenses, the Master Agreement Liabilities and all other sums of money from time to
time owing by the Borrower to the Bank, including, without limitation, default interest, damages,
indemnities, costs, expenses, whether actually or contingently, presently or in the future, under
this Agreement, the Master Agreement and the other Security Documents;
	 
	 	 	“Owner” means
king of
hearts inc., a company duly incorporated in the Republic
of The Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Marshall Islands MH 96960 (and includes its successors);
	 
	 	 	“Permitted Encumbrance” means any Encumbrance in favour of the Bank created pursuant to the
Security Documents and Permitted Liens;
	 
	 	 	“Permitted Liens” in relation to the Vessel means any lien on the Vessel for master’s, officer’s
or crew’s wages outstanding in the ordinary course of trading, any lien for salvage and any ship
repairer’s or outfitter’s possessory lien for a sum not (except with the prior written consent of
the Bank) exceeding the Major Casualty (as defined in the Mortgage);
	 
	 	 	“Protocol of Delivery and Acceptance” means the protocol of delivery and acceptance executed and
delivered or (as the context may require) to be executed and delivered by or on behalf of the
Builder and the Borrower evidencing the delivery and acceptance of the Vessel pursuant to the
Contract, such protocol to be in a form satisfactory to the Bank;
	 
	 	 	“Registry” in relation to the Vessel means the offices of such registrar, commissioner or
representative of the relevant Flag State who is duly authorised to register the Vessel, her
Owner’s title to the Vessel and the relevant Mortgage over the Vessel under the laws and flag of
the relevant Flag State;

10

 

	 	 	“Related Company” of any company is a company which is controlled by that company from time to
time;
	 
	 	 	“Relevant Jurisdiction” means any jurisdiction in which or where any Security Party is
incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of
business or is otherwise effectively connected;
	 
	 	 	“Repayment Date” means each of the dates specified in Clause 4.1 on which the Repayment
Instalments shall be payable by the Borrower to the Bank;
	 
	 	 	“Relevant Party” means the Borrower, the Borrower’s Related Companies and any other Security Party
and any Security Party’s Related Companies;
	 
	 	 	“Relevant Ship” means the Vessel and any other vessel from time to time (whether before or after
the date of this Agreement) owned by any Relevant Party;
	 
	 	 	“Repayment Date” means each of the dates specified in Clause 4.1 on which the Repayment
Instalments shall be payable by the Borrower to the Bank;
	 
	 	 	“Repayment Instalment” means each instalment of the Loan which becomes due for repayment by the
Borrower to the Bank on a Repayment Date pursuant to Clause 4.1;
	 
	 	 	“Requisition Compensation” in relation to the Vessel means all sums of money or other compensation
from time to time payable by reason of requisition of the Vessel otherwise than by requisition for
hire;
	 
	 	 	“Retention Account” means an interest bearing account of the Borrower opened (or as the context
may require) to be opened by the Borrower with the Lending Office or such other branch of the Bank
or any other bank as may be required by and at the discretion of the Bank and includes any other
account designated by the Bank to be a Retention Account for the purposes of this Agreement;
	 
	 	 	“Security Documents” means the Master Agreement, the Master Agreement Security Deed, the Accounts
Pledge Agreement, the General Assignment, the Mortgage, the Corporate Guarantee, the Charterparty
Assignment, the Manager’s Undertaking and any document or documents (including if the context so
requires this Agreement) that may now or hereafter be executed to secure the whole or any part of
the Outstanding Indebtedness as well as for the performance by the Borrower of all its obligations
covenants and agreements pursuant to this Agreement, the Master Agreement and/or the other
Security Documents, each such Security Document to be in form and substance as the Bank may
require as the same may from time to time be amended and/or supplemented;
	 
	 	 	“Security Party” means the Borrower, the Corporate Guarantor/Owner and any person (other than the
Bank) which is or will become a party to any of the Security Documents;

11

 

	 	 	“Security Period” the period commencing on the date hereof and terminating on the date upon
which the Loan together with all interest thereon and all other moneys payable to the Bank
under this Agreement, the Master Agreement and the Security Documents has been repaid in full
to the Bank;
	 
	 	 	“Security Requirement” means the amount in Dollars (as certified by the Bank whose
certificate shall, in the absence of manifest error, be conclusively binding on the Borrower)
which is at any relevant time one hundred and twenty five percent (125%) of the aggregate of
the Loan and the Swap Exposure;
	 
	 	 	“Security Value” means the amount in Dollars (as certified by the Bank whose certificate
shall, in the absence of manifest error, be conclusive and binding on the Borrower) which, at
any relevant time is the aggregate of (a) the Market Value of the Vessel as most recently
determined in accordance with Clause 8.10(b) and (b) the market value of any additional
security provided under Clause 8.10(c) (if any);
	 
	 	 	“SMC” in relation to the Vessel means a safety management certificate issued in respect of the
Vessel in accordance with rule 13 of the ISM Code;
	 
	 	 	“Subsidiary” means a body corporate from time to time of which another body corporate (a) has
direct or indirect control, or (b) owns directly or indirectly more than fifty percent (50%)
of the share capital or similar right of ownership (and in this definition “control” means the
power to direct the management and the policies of a body corporate, whether through the
ownership of voting capital, by contract or otherwise);
	 
	 	 	“Swap Exposure” means, as at any relevant time, the amount certified by the Bank to the
Borrower to be the aggregate net amount in Dollars which would be payable by the Borrower to
the Bank under (and calculated in accordance with) section 6(e) (Payments on Early
Termination) of the Master Agreement if an Early Termination Date had occurred at the relevant
time in relation to all continuing Transactions;
	 
	 	 	“Taxes” includes all present and future taxes, levies, imposts, duties, fees or charges of
whatever nature together with interest thereon and penalties in respect thereof (except taxes
concerning the Bank and imposed on the net income of the Bank) and “Taxation” shall be
construed accordingly;
	 
	 	 	“Total Loss” in relation to the Vessel, means (a) actual, constructive, compromised or
arranged total loss of the Vessel; or (b) requisition for title or other compulsory
acquisition of the Vessel otherwise than by requisition for hire; or (c) hijacking, theft,
condemnation, capture, seizure, detention, arrest or confiscation of the Vessel by any
government or by any person acting or purporting to act on behalf of any government, unless
the Vessel is released and restored to the Owner within sixty (60) days after the occurrence
thereof;

12

 

	 	 	“Transaction” means a transaction entered into between the Bank and the Borrower
governed by the Master Agreement; and
	 
	 	 	“Vessel” means the 46,000 dwt oil chemical tanker motor vessel presently under
construction at the Shipyard of Hyundai Mipo Dockyard Ltd., of Korea, currently known as
Hull No. 2139, to be constructed by the Builder and sold by the Seller to the
Owner pursuant to the MOA and to be registered upon her delivery in the ownership of the
Owner through the Registry under the laws and flag of the Flag State with the name
“STEALTH SV”.

	1.3	 	Interpretation. In this Agreement:

	 	(a)	 	Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement;
	 
	 	(b)	 	each of the terms defined in Clause 1.2 when used in plural and terms defined
in plural or words used in plural (and unless in the specific clause or sentence
is otherwise expressly specified) mean all of them collectively and/or each of
them and/or anyone of them (even if this is not expressly so spelled out) as the
context may require or permit;
	 
	 	(c)	 	subject to any specific provision of this Agreement or of any assignment
and/or participation or syndication agreement of any nature whatsoever,
reference to each of the parties hereto and to the other Security Documents
shall be deemed to be reference to and/or to include, as appropriate, their
respective successors and permitted assigns;
	 
	 	(d)	 	reference to a person shall be construed as including reference to a firm,
company, corporation or any State or any agency thereof;
	 
	 	(e)	 	where the context so admits, words in the singular include the plural and vice
versa;
	 
	 	(f)	 	the words “including” and “in particular” shall not be construed as limiting
the generality of any foregoing words;
	 
	 	(g)	 	this Agreement and all documents referred to in this Agreement include the
same as varied or supplemented from time to time;
	 
	 	(h)	 	reference to this Agreement includes all the terms of this Agreement and
any Schedules, Annexes or Appendices to this Agreement, which form an integral
part of same;
	 
	 	(i)	 	reference to Clauses, Sub-Clauses and Schedules are to Clauses,
Sub-Clauses and Schedules in this Agreement;
	 
	 	(j)	 	reference to a “guarantee” include references to an indemnity or other
assurance against financial loss including, without limitation, an obligation to

13

 

	 	 	 	purchase assets or services as a consequence of a default by any other person
to pay any Indebtedness and “guaranteed” shall be construed accordingly;
	 
	 	(k)	 	reference to the opinion of the Bank or a determination or acceptance by
the Bank or to documents, acts, or persons acceptable or satisfactory to the Bank
or the like shall be construed as reference to opinion, determination, acceptance
or satisfaction of the Bank at the reasonable discretion of the Bank and such
opinion, determination, acceptance or satisfaction of the Bank shall be conclusive
and binding on the Borrower (save as herein provided); and
	 
	 	(l)	 	words and expressions defined in the Master Agreement, unless the
context otherwise requires, when used herein, have the same meaning.

	2.	 	THE LOAN
	 
	2.1	 	Commitment to Lend. Relying upon each of the representations and warranties in
Clause 6 and in each of the other Security Documents, it is hereby agreed and
undertaken by the Bank to lend to the Borrower upon and subject to the terms of this
Agreement, the sum referred to in Clause 1.1 hereof.
	 
	2.2	 	Drawdown Notice and Commitment to Borrow. Subject to the terms and
conditions of this Agreement, the Commitment shall be advanced to the Borrower
following receipt by the Bank from the Borrower of a Drawdown Notice not later than
10 a.m. (London time) on the second Banking Day before the date on which the
drawdown is intended to be made. A Drawdown Notice shall be effective on actual
receipt by the Bank and, once given, shall subject as provided in Clause 3.6 be
irrevocable.
	 
	2.3	 	Number of advances Agreed. The Commitment shall be advanced to the Borrower
in one (1) advance.
	 
	2.4	 	Disbursement. Upon receipt of a Drawdown Notice complying with the terms of this
Agreement the Bank shall, subject to the provisions of Clause 7, on the date specified
in such Drawdown Notice, make the Commitment available to the Borrower.
	 
	2.5	 	Application of proceeds. Without prejudice to the Borrower’s obligations under
Clause 8.8(a), the Bank shall have no responsibility for the application of the proceeds
of the Loan (or any part thereof) by the Borrower.
	 
	2.6	 	Termination Date. Any part of the Commitment undrawn and uncancelled at the end
of the Availability Period shall thereupon be automatically cancelled.
	 
	2.7	 	Cancellation. The Borrower shall be entitled to cancel any undrawn part of the
Commitment under this Agreement upon giving the Bank not less than five (5)
Banking Days’ notice in writing to that effect, provided that no Drawdown Notice has
been given to the Bank under Clause 2.2 for the full amount of the Commitment or in
respect of the portion thereof in respect of which cancellation is required by the

14

 

	 	 	Borrower. Any such notice of cancellation, once given, shall be irrevocable. Any amount
cancelled may not be drawn. Notwithstanding any such cancellation pursuant to this Clause
2.7 the Borrower shall continue to be liable for any and all amounts due to the Bank under
this Agreement including without limitation any amounts due to the Bank under Clause 10.
	 
	2.8	 	Disbursement of Commitment to Seller’s bank

	 	(a)	 	Notwithstanding the foregoing provisions of this Clause 2, in the event that
the Commitment or any relevant part thereof (as the case may be) is required to be
drawn down prior to the satisfaction of the requirements of Clause 7 and
remitted to the Seller’s Bank in accordance with Clause 3 of the MOA (the
“Seller’s Bank”), the Bank may in its absolute discretion agree to remit such
amount to the Seller’s Bank prior to the satisfaction of the requirements of
Clause 7 expressly subject to the following conditions:

	 	(i)	 	such amount is remitted to the Seller’s Bank to be held by it
in an account in the Bank’s name (the “deposit account”) and to the order of
the Bank;
	 
	 	(ii)	 	the principal amount (the “deposited amount”) of such funds
will only be released to the Seller upon the Seller’s presentation to the
Seller’s Bank of a copy of the Protocol of Delivery and Acceptance for the
Vessel in the form agreed between the Seller and the Owner and duly signed on
behalf of the Seller and the Owner and countersigned by the Bank’s
representative;
	 
	 	(iii)	 	the deposited amount so released may be used only for payment
to the account of the Seller with such Seller’s Bank in satisfaction of the
balance of the purchase price of the Vessel; and
	 
	 	(iv)	 	in the event that none of the said amount so remitted is
released in accordance with the Bank’s instructions or any part thereof is not
so released, the Bank shall instruct the Seller’s Bank five (5) days from the
expected Delivery Date, to pay the said amount and any earned interest to
another account of the Bank and the Borrower shall be obliged to indemnify the
Bank in accordance with Clause 10.1. Any amounts so remitted and returned
pursuant to this Clause will be applied in or towards prepayment of the Loan
pursuant to Clause 4.2.

	 	(b)	 	When either:

	 	(i)	 	the Commitment or any relevant part thereof (as the case may
be) is disbursed (whether on the expected Delivery Date or thereafter) in
accordance with Clause 2.8(a)(i) and (ii) or
	 
	 	(ii)	 	the Bank withdraws the deposited amount under Clause 2.8(d),

15

 

	 	 	 	the Borrower shall forthwith upon demand by the Bank pay to the Bank such amounts that may
be certified by the Bank as being the amount required to indemnify the Bank in respect of
the cost to the Bank of funding the deposited amount from the date of payment thereof to
the Seller’s Bank to the date of disbursement of the deposited amount to the Seller or the
refund of the deposited amount to the Bank less the amount (if any) of the earned interest
received by the Bank from the Seller’s Bank. For this purpose, the cost of the Bank
funding the deposited amount shall be deemed to be interest at a rate equal to the
aggregate of (i) the applicable Margin and (ii) LIBOR for comparable deposits on a call
(day to day) basis.
	 
	 	(c)	 	The Bank shall have no liability to the Borrower if the Seller’s Bank fails to
carry out any instructions given to it by the Bank to disburse or refund the
deposited amount.
	 
	 	(d)	 	If, upon being instructed to do so by the Bank, the Seller’s Bank fails either to
apply the deposited amount in full in accordance with Clause 2.8 (a)(ii) or to
refund the deposited amount in full in accordance with Clause 2.8(a)(iv):

	 	(i)	 	the Bank shall cease to be obliged to make the Commitment or relevant part
thereof (as the case may be) available unless and until the Seller’s Bank carries out
such instructions;
	 
	 	(ii)	 	the Borrower shall indemnify the Bank on demand in respect to all loses
certified by the Bank as suffered or incurred by the Bank as a consequence of the
Seller’s Bank failure to carry the Bank’s instructions; and
	 
	 	(iii)	 	without prejudice to the obligations of the Borrower so to indemnify the
Bank on demand, the Bank shall in good faith take reasonable and proper steps
diligently to seek recovery of the deposited amount from the Seller’s Bank (provided
that prior to taking such action the Borrowers shall have agreed to indemnify the
Bank for all costs and expenses which may be incurred in seeking recovery of such
amount, including, without limitation, all legal fees and disbursements reasonably
and properly incurred) and if the Bank shall recover any part of the deposited amount
(and provided that it has previously recovered full indemnification under Clause
2.8(d)(ii)) the Bank shall, so long as no Event of Default has occurred and is
continuing, pay to the Borrower the amount so recovered after subtracting any tax
suffered or incurred thereon by the Bank.

	 	(c)	 	If, at the time prior to the deposit of funds by the Bank with the Seller’s Bank, the Bank
considers in its reasonable discretion that the Seller’s Bank will be unable or unwilling for
any reason (including, without limitation, by reason of the Seller’s Bank’s financial
position or regulatory requirements applicable to

16

 

	 	 	 	the Seller’s Bank) to take and fully apply such deposit in accordance with the
requirements of this Clause 2.8, the Bank may in its absolute discretion decide not
to make such deposit and this Agreement shall thereupon take effect as if this
Clause 2.8 does not apply and the Commitment or relevant part thereof (as the case
may be) shall, without prejudice to Clause 7, be made and disbursed in the manner
set out in this Agreement.

	3.	 	INTEREST
	 
	3.1	 	Interest Rate. The Borrower shall pay interest on the
Loan (or as the case may be, each portion thereof to which a different Interest Period relates) in respect of each
Interest Period (or part thereof) on each Interest Payment Date in arrears, provided that
in the case of an Interest Period of more than three (3) months interest accruing during
such Interest Period shall be payable quarterly in arrears and on the last day of such
Interest Period. The interest rate for the calculation of interest shall be the rate per
annum determined by the Bank to be the aggregate of (i) the Margin A or, in the
circumstances set forth in the proviso to this clause 3.1, the Margin B, as the case may
be, and (ii) LIBOR, unless (a) there is an Agreed Rate in which case the interest rate
for the calculation of interest shall be the rate per annum determined by the Bank to be
the aggregate of (i) the applicable Margin and (ii) the Agreed Rate.
	 
	 	 	Provided, however, that if and whenever the Bank shall have, in its sole
discretion, determined that the Funding Cost of the Bank does not exceed lOObts, the
applicable Margin on the Loan for the next Interest Period shall be the Margin B, such
determination to be advised to the Borrower two (2) Banking Days prior to the commencement
of such Interest Period.
	 
	3.2	 	Selection of Interest Period. The Borrower may by notice received by the Bank not
later than 10 a.m. (London time) on the second Banking Day before the beginning of
each Interest Period specify (subject to Clause 3.3 below) whether such Interest Period
shall have a duration of one (1), three (3) or six (6) months (or such other period as
may be requested by the Borrower subject to Bank’s approval and market
availability).
	 
	3.3	 	Duration of Interest Period. Every Interest Period shall, subject to market
availability to be conclusively determined by the Bank, be of the duration specified by
the Borrower pursuant to Clause 3.2 but so that:

	 	(a)	 	the initial Interest Period in respect of the Loan (or — in case that the
Commitment is agreed to be advanced in more than one Advance — of each
Advance) will commence on the date on which the Commitment is advanced
and each subsequent Interest Period will commence forthwith upon the expiry
of the previous Interest Period;
	 
	 	(b)	 	if any Interest Period would otherwise overrun one or more Repayment Dates,
then, in the case of the last Repayment Date, such Interest Period shall end on
such Repayment Date, and in the case of any other Repayment Date or Dates

17

 

	 	 	 	the Loan shall be divided into parts so that there is one part equal to the
amount(s) of the Repayment Instalment(s) due on each Repayment Date falling during
that Interest Period and having an Interest Period ending on the relevant Repayment
Date and another part equal to the amount of the balance of the Loan having an
Interest Period determined in accordance with Clause 3.2 and the other provisions
of this Clause 3.3;
	 
	 	(c)	 	if the Borrower fails to specify the duration of an Interest Period in
accordance
with the provisions of Clause 3.2 and this Clause 3.3, such Interest Period
shall have a duration of three (3) months unless another period shall be agreed
between the Bank and the Borrower provided always that such period (whether
of three (3) months or of different duration) shall comply with this Clause 3.3;
and
	 
	 	(d)	 	if the Bank determines that the duration of an Interest Period specified by
the
Borrower in accordance with Clause 3.2 is not readily available, then that
Interest Period shall have such duration as the Bank, in consultation with the
Borrower, may determine,
	 
	 	 	 	provided, always, that:

	 	(i)	 	any Interest Period which commences on the last day of a
calendar month, and any Interest Period which commences on the day on which
there is no numerically corresponding day in the calendar month during which
such Interest Period is due to end, shall end on the last Banking Day of the
calendar month during which such Interest Period is due to end; and
	 
	 	(ii)	 	if the last day of an Interest Period is not a Banking Day the
Interest Period shall be extended until the next following Banking Day unless
such next following Banking Day falls in the next calendar month in which case
such Interest Period shall be shortened to expire on the preceding Banking
Day.

	3.4	 	Default Interest. If the Borrower fails to pay any sum (including, without limitation, any
sum payable pursuant to this Clause 3.4) on its due date for payment under any of the
Security Documents, the Borrower shall pay interest on such sum from the due date up to the
date of actual payment (as well after as before judgement) at the rate determined by the Bank
pursuant to this Clause 3.4. The period beginning on such due date and ending on such date of
payment shall be divided into successive periods of such duration as selected by the Bank
each of which (other than the first, which shall commence on such due date) shall commence on
the last day of the preceding such period. The rate of interest applicable to each such
period shall be the aggregate (as determined by the Bank) of (i) two per cent (2%), per
annum, (ii) the applicable Margin and (iii) LIBOR. Such interest shall be due and payable on
the last day of each such period as determined by the Bank and each such day shall, for the
purposes

18

 

	 	 	of this Agreement, be treated as an Interest Payment Date. In case that a payment is made
in default for any amount, the Interest Periods will be determined by the Bank at its
discretion including the amounts for which there is no default, even if the Bank has not
(yet) exercised its rights pursuant to Clause 9.10 of this Agreement. If for the reasons
specified in Clause 3.6, the Bank is unable to determine a rate in accordance with the
foregoing provisions of this Clause 3.4, interest on any sum not paid on its due date for
payment shall be calculated at a rate determined by the Bank to be two per cent (2%) per
annum above the aggregate of the applicable Margin and costs of funds to the Bank as
conclusively determined by the Bank save for manifest error. Interest payable by the
Borrower as aforesaid shall be compounded semi-annually (or if the period fixed by the Bank
is longer, at the end of such longer period) and shall be payable on demand.
	 
	3.5	 	Notification of Interest. The Bank shall notify the Borrower promptly of the duration
of each Interest Period and of each rate of interest determined by it under this Clause 3
without prejudice to the right of the Bank to make determinations at its sole
discretion. In case that the Bank fails to notify the Borrower as above, such failure
will not affect the validity of the determination of the Interest Period and Interest Rate
made pursuant to Clause 3 and neither constitute nor will be interpreted as if to
constitute a breach of obligation of the Bank except in case of wilful misconduct.
	 
	3.6	 	Market disruption — Non availability.

	 	(a)	 	If and whenever, at any time prior to the commencement of any Interest
Period, the Bank shall have determined (which determination shall, in the
absence of manifest error, be conclusive) (i) that adequate and fair means do
not exist for ascertaining LIBOR in respect of Dollars during said Interest
Period or (ii) that deposits in Dollars are not available to the Bank in the
London Interbank Market in the ordinary course of business in sufficient
amounts for any Interest Period or (iii) that by reason of circumstances
affecting materially the London Interbank Market generally with a result that
the Bank has no other alternative but to refuse to advance the Commitment or
fund or continue to fund the Loan — and for such non availability evidence to
be provided during any Interest Period or (iv) that LIBOR for that Interest
Period will not adequately reflect the cost of funding of the Loan for that
Interest Period, the Bank shall forthwith give notice (a “Determination
Notice”) thereof to the Borrower. A Determination Notice shall contain
particulars of the relevant circumstances giving rise to its issue. After the
giving of any Determination Notice the undrawn amount of the Commitment
shall not be borrowed until notice to the contrary is given to the Borrower by
the Bank.
	 
	 	(b)	 	During the Period of ten (10) days after any Determination Notice has been
given by the Bank under Clause 3.6(a) the Bank and the Borrower shall
negotiate in good faith (but without incurring any legal obligations) with a
view to arriving to an acceptable alternative basis(the “Substitute Basis”), for

19

 

	 	 	 	maintaining the Loan, failing which the Borrower shall promptly, on first demand or
within the time limit which may be determined by the Bank, prepay the Loan together
with accrued interest thereon to the date of prepayment (calculated at the rate or
rates most lately applicable to the Loan) and all other sums payable by the
Borrower under the Security Documents and the Commitment shall be reduced to zero.
In case the Bank agrees to a Substitute Basis for funding the Loan the Bank shall
certify such Substitute Basis to the Borrower. The Substitute Basis may (without
limitation) include alternative interest period, alternative currencies or
alternative rates of interest but shall include a margin above the cost of funds to
the Bank equivalent to the applicable Margin. Each Substitute Basis so certified
shall be binding upon the Borrower and shall take effect in accordance with its
terms from the date specified in the Determination Notice until such time as the
Bank notifies the Borrower that none of the circumstances specified in clause
3.6(a) continues to exist whereupon the normal interest rate fixing provisions of
this Agreement shall apply.

	3.7	 	Swap Transactions

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

	4.	 	REPAYMENT — PREPAYMENT
	 
	4.1	 	Repayment. The Borrower shall and it is expressly undertaken by the Borrower to repay the
Loan by (i) forty (40) consecutive quarterly repayment instalments (the “Repayment
Instalments”), each to be repaid on each of the Repayment Dates so that the first be repaid
on the date falling three (3) months from the Drawdown Date and each of the subsequent ones
consecutively falling due for payment on each of the dates falling three (3) months after the
immediately preceding Repayment Date with the last (the 30th) of such Repayment
Instalments falling due for payment on the Final Maturity Date and (ii) the Balloon
Instalment payable together with the last Repayment Instalment on the Final Maturity Date;
subject to the provisions of this Agreement the amount of each Repayment Instalment shall be
as follows:

	 	(a)	 	1st to 10th (both incl.) shall be in the amount of
Seven hundred seventy five thousand Dollars ($775,000) each; and

20

 

	 	(b)	 	11th to 40th (both incl.) shall be in the amount
of Five hundred thousand Dollars ($500,000) each;

	 	 	provided that (i) if the Commitment is not drawn down in full, the amount of
each Repayment Instalment and the Balloon Instalment shall be reduced proportionally
(ii) if the last Repayment Date would otherwise fall after the Final Maturity Date,
such last Repayment Date shall be the Final Maturity Date, (iii) there shall be no
Repayment Dates after the Final Maturity Date, (iv) on the Final Maturity Date the
Borrower shall also pay to the Bank any and all other monies then payable under this
Agreement and the other Security Documents, and (v) 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.
	 
	4.2	 	Voluntary Prepayment. The Borrower shall have the right, upon giving the Bank not less
than Ten (10) Banking Days’ notice in writing, to prepay, without any penalty or fee,
part or all of the Loan in each case together with all unpaid interest accrued thereon
and all other sums of money whatsoever due and owing from the Borrower to the Bank
hereunder or pursuant to the other Security Documents and all interest accrued thereon,
provided that:

	 	(a)	 	the giving of such notice by the Borrower will irrevocably commit the
Borrower to prepay such amount as stated in such notice;
	 
	 	(b)	 	such prepayment may take place only on the last day of an Interest Period
relating to the whole of the Loan provided, however, that if the Borrower shall
request consent to make such prepayment on another day and the Bank shall
accede to such request (it being in the sole discretion of the Bank to decide
whether or not to do so) the Borrower will pay in addition to the amount to be
prepaid, any such sum as may be payable to the Bank pursuant to Clause 10.1;
	 
	 	(c)	 	each partial prepayment shall be equal to the amount of $1,000,000 (One
million Dollars) or a whole multiple thereof or the balance of the Loan and
will be applied by the Bank in or towards first the Balloon Instalment and then
the Repayment Instalments, in the inverse order of their due dates of payment;
	 
	 	(d)	 	every notice of prepayment shall be effective only on actual receipt by
the
Bank, shall be irrevocable and shall oblige the Borrower to make such
prepayment on the date specified;
	 
	 	(e)	 	no amount prepaid may be re-borrowed; and
	 
	 	(f)	 	the Borrower may not prepay the Loan or any part thereof save as expressly
provided in this Agreement.

21

 

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

	 	(a)	 	Before first drawdown: On the Vessel becoming a Total Loss or
suffering damage or being involved in an incident which in the opinion of the Bank
may result in the Vessel being subsequently determined to be a Total Loss
before the Commitment (or any part thereof) is drawn down, the obligation
of the Bank to advance the Commitment (or any part thereof) shall
immediately cease and the Commitment shall be reduced to zero.
	 
	 	(b)	 	After drawdown: On the Vessel becoming a Total Loss or suffering
damage or
being involved in an incident which in the reasonable opinion of the Bank may
result in the Vessel being subsequently determined to be a Total Loss or being
sold, following the draw down of the Loan, then on the date falling
one
hundred and eighty (180) days after that date on which the Vessel became a
Total Loss or the date on which the Vessel suffered damage or the incident
which, in the reasonable opinion of the Bank, may result in the Vessel being
subsequently determined to be a Total Loss occurred or, if earlier, on the
date
when the insurance proceeds in respect of such Total Loss are or Requisition
Compensation is received by the Borrower (or the Bank pursuant to the
Security Documents), or on or prior to the completion of the sale of the
Vessel,
the Commitment shall be reduced to zero and the Borrower shall prepay the
Outstanding Indebtedness in full;
	 
	 	 	 	and for the purpose of this Agreement:

	 	(i)	 	an actual total loss of the Vessel shall be deemed to
have occurred at the actual date and time the Vessel was lost but in the
event of the date of the loss being unknown then the actual total loss
shall be deemed to have occurred on the date on which the Vessel was last
reported;
	 
	 	(ii)	 	in the case of a constructive total loss of the Vessel,
upon the date and at the time notice of abandonment of the Vessel is given
to the insurers of the Vessel for the time being (provided a claim for
total loss is admitted by such insurers) or, if such insurers do not
forthwith admit such a claim, or, in the event that such notice of
abandonment is not given by the Owner to the insurers of the Vessel, at
the date and time on which occurred the incident which may result, in the
reasonable opinion of the Bank, in the Vessel being subsequently
determined to be a Total Loss;
	 
	 	(iii)	 	a compromised or arranged total loss shall be deemed to
have occurred on the date on which a binding agreement as to such
compromised or arranged total loss has been entered into by the insurers
of the Vessel;
	 
	 	(iv)	 	requisition for title or other compulsory acquisition of
the Vessel shall be deemed to have occurred on the date upon which the
relevant requisition for title or other compulsory acquisition occurs;
and

22

 

	 	(v)	 	hijacking, theft, condemnation, capture, seizure, detention,
arrest, or confiscation of the Vessel by any government or by any
person acting or purporting to act on behalf of any government, which
deprives the Owner of the use of the Vessel for more than sixty (60)
days shall be deemed to occur upon the expiry of the period of sixty
(60) days after the date upon which the relevant hijacking, theft,
condemnation, capture, seizure, detention, arrest or confiscation
occurred.

	4.4	 	Amounts payable on prepayment. Any prepayment of all or part of the Loan under
this Agreement shall be made together with (a) accrued interest on the Loan to the
date of such prepayment, (b) any additional amount payable under Clause 5.3 and 12.3
and (c) all other sums payable by the Borrower to the Bank under this Agreement or
any of the other Security Documents including, without limitation, any amounts
payable under Clause 10.
	 
	4.5	 	Amounts payable on prepayment

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

	4.6	 	Master Agreement, Repayments and Prepayments

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

23

 

	 	 	 	in its absolute discretion may determine and both the Bank’s and the Borrower’s
continuing obligations under any Transaction and/or the Master Agreement shall, unless
agreed otherwise by the Bank, be calculated so far as the Bank considers it practicable
by reference to the amended repayment schedule for the Loan taking into account the fact
that less than the full amount of the Loan remains outstanding.
	 
	 	(c)	 	If any amount of the Loan remains outstanding following a prepayment under
this Agreement and the Bank in its absolute discretion agrees, following a
written request of the Borrower, that the Borrower may be permitted to
maintain all or part of a Transaction in an amount not wholly matched with or
linked to all or part of the Loan, the Borrower shall within ten (10) days of
being notified by the Bank of such requirement, provide the Bank with, or
procure the provision to the Bank of, such additional security as shall in the
opinion of the Bank be adequate to secure the performance of such
Transaction, which additional security shall take such form, be constituted by
such documentation and be entered into between such parties, as the Bank in
its absolute discretion may approve or require, and each document comprising
such additional security shall constitute a Credit Support Document.
	 
	 	(d)	 	The Borrower shall on the first written demand of the Bank indemnify the
Bank in respect of all losses, costs and expenses (including, but not limited to,
legal costs and expenses) incurred or sustained by the Bank as a consequence
of or in relation to the effecting of any matter or transactions referred to in this
clause 4.6.
	 
	 	(e)	 	Notwithstanding any provision of the Master Agreement to the contrary, if for
any reason, a Transaction has been entered into but the Commitment (or any
part thereof) is not drawn down under this Agreement then, subject to clause
4.6(e) the Bank shall be entitled but not obliged (and, where relevant, may do
so without the consent of the Borrower where it would otherwise be required
whether under the Master Agreement or otherwise) to amend, supplement,
cancel, net out, terminate, liquidate, transfer or assign all or any part of the
rights, benefits and obligations created by such Transaction and/or the Master
Agreement and/or to obtain or re-establish any hedge or related trading
position in any manner and with any person the Bank in its absolute discretion
may determine.
	 
	 	(f)	 	If a Transaction has been entered into but the Commitment (or any part
thereof) has not been drawn down under this Agreement and the Bank in its
absolute discretion agrees, following a written request of the Borrower, that
the Borrower may be permitted to maintain all or part of a Transaction, the
Borrower shall within ten (10) days of being notified by the Bank of such
requirement, provide the Bank with, or procure the provision to the Bank of,
such additional security as shall in the opinion of the Bank be adequate to
secure the performance of such Transaction, which additional security shall

24

 

	 	 	 	take such form, be constituted by such documentation and be entered into between
such parties, as the Bank in its absolute discretion may approve or require, and
each document comprising such additional security shall constitute a Credit
Support Document for the purposes of the Master Agreement and/or otherwise.
	 
	 	(g)	 	Without prejudice to or limitation of the obligations of the Borrower under
clause 4.6(c), in the event that the Bank exercises any of its rights under clauses
4.6 (a), 4.6(b), 4.6(d) or 4.6(e) and such exercise results in all or part of a
Transaction being terminated such termination shall be treated under the Master
Agreement in the same manner as if it were a Terminated Transaction (as defined in
section 14 of the Master Agreement) effected by the Bank after an Event of Default (as
so defined in that section 14) by the Borrower and, accordingly, the Bank shall be
permitted to recover from the Borrower a payment for early termination calculated in
accordance with the provisions of section 6(e)(i) of the Master Agreement.
	 
	 	(h)	 	No Transaction or Confirmation will be entered into without the specific
consent of the Bank.

	5.	 	PAYMENTS TAXES AND COMPUTATION 
	 
	5.1	 	Payment — No set-off or Counterclaims

	 	(a)	 	The Borrower acknowledges that in performing its obligations under this
Agreement, the Bank will be incurring liabilities to third parties in relation to
the funding of amounts to the Borrower, such liabilities matching the liabilities
of the Borrower to the Bank and that it is reasonable for the Bank to be entitled
to receive payments from the Borrower gross on the due date in order that the
Bank is put in a position to perform its matching obligations to the relevant
third parties. Accordingly, subject to paragraph (f) of Part 5 of the Schedule to
the Master Agreement, all payments to be made by the Borrower under this
Agreement and/or any of the other Security Documents shall be made in full,
without any set-off or counterclaim whatsoever and, subject as provided in
Clause 5.3, free and clear of any deductions or withholdings or Governmental
Withholdings whatsoever, in Dollars on the due date to the account of the
Bank at such bank and in such place as the Bank may from time to time
specify for that purpose, reference: “Stealthgas Inc. — Loan Agreement
dated 19th February, 2009”;
	 
	 	 	 	provided, however, that the Bank shall have the right to change the place
of account for payment, upon five (5) Banking Days’ prior written notice to the
Borrower.
	 
	 	(b)	 	If at any time it shall become unlawful or impracticable for the Borrower to
make payment under this Agreement to the relevant account or bank referred
to in Clause 5.1 (a), the Borrower may request and the Bank may agree to

25

 

	 	 	 	alternative arrangements for the payment of the amounts due by the Borrower to the
Bank under this Agreement or the other Security Documents.

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

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

	5.4	 	Tax Credit. If following any such deduction or withholding as is referred to in Clause
7.6 from any payment paid by the Borrower, the Bank shall receive or be granted a
credit against a remission for any Taxes payable by it, the Bank shall, subject to the
Bank having made any increased payment in accordance with Clause 7.6 and to the
extent that the Bank do so without prejudicing the retention of the amount of such
credit or remission and without prejudice to the right of the Bank to obtain any other
relief or allowance available to it, reimburse to the Borrower the proportion of such
credit or remission as shall leave the Bank (after such reimbursement) in no worse
position as it would have been in had there been no such deduction or withholding

26

 

	 	 	from the payment by the Borrower as aforesaid. Such reimbursement shall be made as soon
as reasonably practicable after the amount of such credit, relief, remission or
repayment has been received by the Bank and upon the Bank certifying that the amount of
such credit or remission has been received by it. Nothing contained in this Agreement
shall oblige the Bank to rearrange its tax affairs or to disclose any information
regarding its tax affairs and computations. Without prejudice to the generality of the
foregoing, the Borrower shall not, by virtue of this Clause 5.4 be entitled to enquire
about the Bank’s tax affairs.
	 
	5.5	 	Loan Account. All sums advanced by the Bank to the Borrower under this
Agreement and all interest accrued thereon and all other amounts due under this
Agreement and/or the Master Agreement from time to time and all repayments and/or
payments thereof shall be debited and credited respectively to a separate loan account
maintained by the Bank in accordance with its usual practices in the name of the
Borrower. The Bank may, however, in accordance with its usual practices or for its
accounting needs, maintain more than one account, consolidate or separate them but
all such accounts shall be considered parts of one single loan account maintained
under this Agreement. In case that a ship mortgage in the form of Account Current is
granted as security under this Agreement and the Master Agreement, the account(s)
referred to in this Clause shall be the Account Current referred to in such mortgage.
	 
	5.6	 	Evidence-Certificates conclusive. The Borrower hereby expressly agrees and admits
that abstracts or photocopies or other reproductions of the books of the Bank as well
as statements of accounts or a certificate signed by an authorised officer of the Bank
shall (save for manifest error) be conclusive binding and full evidence on the
Borrower as to the existence and/or the amount of the at any time Outstanding
Indebtedness, of any amount due under this Agreement and/or the Master Agreement,
of the applicable interest rate or Default Rate or any other rate provided for or referred
to in this Agreement, the Interest Period, the value of additional securities under
Clause 8.10, the payment or non payment of any amount. Any certificate or
determination of the Bank as to any rate of interest or any other amount pursuant to
and for the purposes of any of the Security Documents shall, in the absence of
manifest error, be conclusive and binding on the Borrower and the other Security
Parties. Nevertheless, enforcement procedures or any other Court or out of Court
procedure can be commenced by the Bank on the basis of the abovementioned means
of evidence including written statements or certificates of the Bank.
	 
	5.7	 	Computation. All interest and other payments payable by reference to a rate per
annum under this Agreement shall accrue from day to day and be calculated on the basis of actual days elapsed and a 360 day year.
	 
	6.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	This Agreement is entered into by the Bank in reliance upon the following
representations and warranties made by the Borrower and it is hereby represented and
warranted by the Borrower that the following matters are true at the date of this

27

 

	 	 	Agreement, and covenant that they shall remain true so long as there is any Outstanding
Indebtedness:
	 
	6.1	 	Continuing representations and warranties
	 
	 	 	The Borrower represents and warrants to the Bank that:

	 	(a)	 	Due Incorporation/Valid Existence: each of the Security Parties is duly
incorporated and validly existing and in good standing under the laws of their
respective countries of incorporation and have power to own their respective
property and assets, to carry on their respective business as the same are now
being lawfully conducted and to purchase, own, finance and operate vessels,
or, as the case may be, manage vessels, as well as to undertake the obligations
which such Security Party has undertaken or shall undertake pursuant to the
Security Documents;
	 
	 	(b)	 	Due Corporate Authority: each of the Security Parties has power to
execute,
deliver and perform its obligations under the Security Documents to which it is
or is to be a party and to borrow the Commitment and each of the other
Security Parties has power to execute and deliver and perform its obligations
under the Security Documents to which it is or is to be a party; all necessary
corporate, shareholder and other action has been taken to authorise the
execution, delivery and performance of the same and no limitation on the
powers of the Borrower to borrow will be exceeded as a result of borrowing
the Loan and none of the corporate Security Parties has an established or de-
facto place of business in any part of the United Kingdom or the United States
of America;
	 
	 	(c)	 	Litigation: no litigation, arbitration, tax claim or administrative
proceeding is
current or pending or (to its or its officers’ knowledge) threatened against the
Borrower or any other Security Party, which, if adversely determined, would
have a materially adverse effect on the business assets or the financial
condition of any of them;
	 
	 	(d)	 	No conflict with other obligations: the execution and delivery of, the
performance of its obligations under, and compliance with the provisions of,
the Security Documents by the relevant Security Parties will not (i)
contravene any existing applicable law, statute, rule or regulation or any
judgment, decree or permit to which the Borrower or any other Security
Party is subject, (ii) conflict with, or result in any breach of any of the terms
of, or constitute a default under, any agreement or other instrument to which
the Borrower or any other Security Party is a party or is subject to or by
which it or any of its property is bound, (iii) contravene or conflict with any
provision of the memorandum and articles of association/articles of
incorporation/by-laws/statutes or other constitutional documents of the
Borrower or any other Security Party or (iv) result in the creation or

28

 

	 	 	 	imposition of or oblige the Borrower or any other Security Party to create any
Encumbrance (other than a Permitted Encumbrance) on any of the undertakings, assets,
rights or revenues of the Borrower or any other Security Party;
	 
	 	(e)	 	Financial Condition: the financial condition of the Borrower and of the other
Security Parties has not suffered any material deterioration since that condition
was last disclosed to the Bank;
	 
	 	(f)	 	No Immunity: neither the Borrower nor any other Security Party nor any of
their respective assets are entitled to immunity on the grounds of sovereignty
or otherwise from any legal action or proceeding (which shall include, without
limitation, suit, attachment prior to judgement, execution or other
enforcement);
	 
	 	(g)	 	Shipping Company: each of the Borrower and the Manager is a shipping
company involved in the owning or, as the case may be, managing of ships
engaged in international voyages and earning profits in free foreign currency;
	 
	 	(h)	 	Licences/Authorisation: every consent, authorisation, license or approval of, or
registration with or declaration to, governmental or public bodies or authorities or courts
required by any Security Party to authorise, or required by any Security Party in
connection with, the execution, delivery, validity, enforceability or admissibility in
evidence of each of the Security Documents or the performance by each Security Party of its
obligations under the Security Documents has been obtained or made and is in full force and
effect and there has been no default in the observance of any of the conditions or
restrictions (if any) imposed in, or in connection with, any of the same so far as the
Borrower are aware;
	 
	 	(i)	 	Perfected Securities: when duly executed, the Security Documents will create a
perfected Encumbrance in favour of the Bank, with the intended priority, over the assets
and revenues intended to be covered, valid and enforceable against each of the Borrower
and the other Security Parties;
	 
	 	(j)	 	No Notarisation/Filing/Recording: save for the registration of any mortgage in
the appropriate shipping registry, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or any of the other Security
Documents that it or they or any other instrument be notarised, filed, recorded,
registered or enrolled in any court, public office or elsewhere or that any stamp,
registration or similar tax or charge be paid on or in relation to this Agreement or the
other Security Documents;
	 
	 	(k)	 	Validity and Binding effect: the Security Documents constitute (or upon their
execution — and in the case of any mortgage upon its registration at the appropriate
registry — will constitute) valid and legally binding obligations of the relevant Security
Parties enforceable against each of the Borrower and the

29

 

	 		 	other Security Parties in accordance with their respective terms and that there
are no other agreements or arrangements which may adversely affect or conflict
with the Security Documents or the security thereby created; and
	 
	 	(1)	 	Valid Choice of Law: the choice of law agreed to govern this
Agreement and/or any other Security Document and the submission to the
jurisdiction of the courts agreed in each of the Security Documents are or will
be, on execution of the respective Security Documents, valid and binding on each
of the Borrower and any other Security Party which is or is to be a party thereto.

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

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

30

 

	 	(g)	 	Ownership/Flag/Seaworthiness/Class/Insurance of the Vessel: the Vessel on
the Drawdown Date will be:

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

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

	 	(i)	 	each of the Borrower, the Owner and their Related Companies have
complied with the provisions of all Environmental Laws;
	 
	 	(ii)	 	each of the Borrower, the Owner and their Related Companies have
obtained all Environmental Approvals and are in compliance with all such
Environmental Approvals; and

31

 

	 	(iii)	 	neither any of the Borrower and the Owner nor any of their Related
Companies have received notice of any Environmental Claim that any of the
Borrower and the Owner or any of its respective Related Companies are not in
compliance with any Environmental Law or any Environmental Approval;

	 	(k)	 	No Environmental Claims

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

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

	 	(l)	 	Copies true and complete; the copies of the C & Shipping Charterparty and the
Management Agreement delivered or to be delivered to the Bank pursuant to Clause 7.3 are,
or will when delivered be, true and complete copies of such documents; such documents
will when delivered constitute valid and binding obligations of the parties thereto
enforceable in accordance with their respective terms and there will have been no
amendments or variations thereof or defaults thereunder;
	 
	 	(m)	 	Compliance with the ISM Code; the Vessel and any Operator complies or will on
the drawdown of the Commitment (or any part thereof) comply with the requirements of the
ISM Code;
	 
	 	(n)	 	Compliance with ISPS Code; the Owner has a valid and current ISSC in respect of
the Vessel and the Vessel will be in full compliance with the ISPS Code;
	 
	 	(o)	 	MOA Valid; the copy of the MOA to be delivered to the Bank 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)

32

 

	 	 	 	agreed nor shall any action been taken by the parties thereto which would in
any way render such document inoperative or unenforceable;
	 
	 	(p)	 	No Rebates: there will be no commissions, rebates premiums or
other payments by or to or on account of the Owner, the Borrower or any other
Security Party or, to the knowledge of the Borrower and the Owner, any other
person in connection with the MOA other than as shall be disclosed to the Bank by
the Borrower in writing;
	 
	 	(q)	 	Money laundering — acting for own account: the Borrower confirms
that it is the beneficiary for each part of the Loan made or to be made available
to it and it will promptly inform the Bank by written notice if it is not, or
ceases to be, the beneficiary and notify the Bank in writing of the name and the
address of the new beneficiary/beneficiaries; the Borrower is aware that under
applicable money laundering provisions, it has an obligation to state for whose
account the Loan is obtained; the Borrower confirms that, by entering into this
Agreement and the other Security Documents, it is acting on its own behalf and for
its own account and it is obtaining the Loan for its own account. In relation to
the borrowing by the Borrower of the Loan, the performance and discharge of its
obligations and liabilities under this Agreement or any of the Security Documents
and the transactions and other arrangements effected or contemplated by this
Agreement or any of the Documents to which the Borrower is a party, it is acting
for its own account and that the foregoing will not involve or lead to a
contravention of any law, official requirement or other regulatory measure or
procedure which has been implemented to combat “money laundering” (as defined in
Article 1 of the Directive (91/308/EEC) of the Council of the European Community).

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

33

 

	 	 	part thereof) is given, the following documents and evidence in form and substance
satisfactory to the Bank:

	 	(a)	 	a duly certified true copy of the Articles of Incorporation and By-Laws or
the
Memorandum and Articles of Association, or of any other constitutional
documents, as the case may be, of each corporate Security Party together,
where appropriate, with certified translations of the same in English;
	 
	 	(b)	 	a recent certificate of incumbency of each corporate Security Party issued by
the appropriate authority and/or at the discretion of the Bank signed by the
secretary or a director of each of them respectively, stating the corporate body
which binds every one of them, the officers and/or the directors of each of
them and containing specimens of their signatures;
	 
	 	(c)	 	minutes of separate meetings of the directors and shareholders (or of any
other
body which binds them, if any) of any corporate Security Party at which there
was approved the entry into, execution, delivery and performance of this
Agreement, the other Security Documents and any other documents executed
or to be executed pursuant hereto or thereto to which the relevant corporate
Security Party is a party;
	 
	 	(d)	 	the original of any power(s) and any further evidence of the due authority of
any person signing this Agreement, the Security Documents and any other
documents executed or to be executed pursuant hereto or thereto on behalf of
any corporate person;
	 
	 	(e)	 	evidence that all necessary licences, consents, permits and authorisations
(including exchange control ones) have been obtained by any Security Party
for the execution, delivery, validity, enforceability, admissibility in evidence
and the due performance of the respective obligations under or pursuant to this
Agreement and the other Security Documents;
	 
	 	(f)	 	in the event that the Bank agrees (at its sole discretion) that a Security
Party
may have a corporate shareholder, the conditions set out in sub-clauses (a), (b),
(c) and (d) of this Clause 7.1 shall apply (mutatis mutandis) to such corporate
shareholder; and
	 
	 	(g)	 	any other documents or recent certificates or other evidence which would be
required by the Bank in relation to any corporate Security Party evidencing
that the relevant Security Party has been properly established, continues to
exist validly and to be in good standing, which is its present board of directors
and shareholders, that the execution and performance of the Security
Documents has been duly authorised and generally that the representations in
Clause 6 are correct in all respects.

	7.2	 	Conditions concerning the Securities. The obligations of the Bank to advance
the Commitment (or any part thereof) to the Borrower and/or to allow any Transaction to

34

 

	 	 	be effected under the Master Agreement is subject to the further condition that the Bank at
the time of receiving a Drawdown Notice shall have received the following documents (save
for the securities which, due to the requirement of their registration in public registries
or due to their nature, cannot be delivered to the Bank before the relevant Drawdown Notice
and which will be delivered to the Bank simultaneously with the relevant drawdown):

	 	(a)	 	the Drawdown Notice in respect of the Commitment, or as the case may be,
any part thereof duly executed and issued;
	 
	 	(b)	 	each of the Security Documents duly executed and where appropriate duly
registered with the appropriate registry; and
	 
	 	(c)	 	evidence that the Earnings Account and the Retention Account have been duly
opened and all mandate forms, signature cards and authorities have been duly delivered.

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

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

	 	(i)	 	in the absolute and free from Encumbrances (other than in
favour of the Bank) ownership of the Owner who is and on will and after the
Drawdown Date be the sole legal and beneficial owner of the Vessel;
	 
	 	(ii)	 	registered in the name of the Borrower through the Registry
under the laws and flag of the relevant Flag State;
	 
	 	(iii)	 	operationally seaworthy and in every way fit for service;
	 
	 	(iv)	 	classed with a classification society which is a member of the
IACS and which has been approved by the Bank in writing and such class will be
free of all requirements and recommendations of such classification society;
	 
	 	(v)	 	insured in accordance with the provisions of this Agreement
and the Mortgage to be followed by full copies of cover notes, policies,
certificates of entry or other contracts of insurance together with an opinion
from insurance consultants appointed by the Bank, on the

35

 

	 	 	 	Insurances effected or to be effected in respect of the Vessel upon and following
the Drawdown Date;
	 
	 	(vi)	 	managed by the Manager; and
	 
	 	(vii)	 	in full compliance with the ISM Code and the ISPS Code;

	 	(b)	 	evidence that, on or prior to the Drawdown Date a Mortgagee’s Interest
Insurance (herein, “MII”) and, if the Bank so requires, a Mortgagee’s Interest
Additional Perils (Pollution) Insurance (herein, “MAPI”), each under the
Bank’s wording or upon such terms as shall from time to time be determined
by the Bank but for an amount not exceeding, in each case, 120% of the
aggregate amount of the Loan and the Swap exposure;
	 
	 	(c)	 	due authorisation in form and substance satisfactory to the Bank authorising
the Bank in case an Event of Default has occurred and is continuing to have
access and/or obtain any copies of class records or other information at its
discretion from the classification society of the Vessel;
	 
	 	(d)	 	copies of the DOC and (upon Vessel’s Delivery) SMC referred to in paragraph
(a) in the definition of the ISM Code Documentation certified as true and in
effect by the Borrower and the Manager; and
	 
	 	(e)	 	(upon Vessel’s Delivery) copies of such ISM Code Documentation as the
Bank may by written notice to the Borrower have requested not later than two
(2) days after Delivery Date, certified as true and complete in all material
respects by the Borrower’s lawyer;
	 
	 	(f)	 	copy of the ISSC in relation to the Vessel certified as true and complete in all
material respects by the Borrower’ lawyer;
	 
	 	(g)	 	true and complete copy of the Management Agreement certified by the
Borrower’s lawyer;
	 
	 	(h)	 	true and complete copy of the C & Shipping Charterparty certified by the Borrower’s lawyer;
	 
	 	(i)	 	true and complete copy of the MOA certified by the Borrower’s lawyer;
	 
	 	(j)	 	true and complete copies of the Bill of Sale, the Builder’s Certificate and the Protocol of
Delivery and Acceptance in respect of the Vessel duly executed, certified by the Borrower’s
lawyer;
	 
	 	(k)	 	evidence that the purchase price of the Vessel has been (or upon her Delivery will have
been) paid in full in accordance with the provisions of the MOA;
	 
	 	(l)	 	duly certified copies of the corporate documentation of the Seller providing the due
incorporation and existence of the Seller and the due authorisation of the

36

 

	 	 	 	sale of the Vessel and the execution of all the documents required in connection
therewith;
	 
	 	(m)	 	a certified copy of a certificate of financial responsibility (COFR) (or
equivalent) for pollution by oil or other Material of Environmental Concern issued by
the relevant certifying authority in relation to the Vessel, in case the Vessel
trades within the USA territorial waters or the USA Exclusive Economic Zone or in
waters requiring a COFR (or equivalent);
	 
	 	(n)	 	if the Bank so reasonably requires a report signed by an independent firm of
marine insurance brokers appointed by the Bank at the expense of the Borrower
confirming the adequacy of the Insurances maintained on the Vessel;
	 
	 	(o)	 	if the Bank so reasonably requires, a satisfactory to the Bank physical
condition survey report on the Vessel together with a comprehensive record inspection
from a surveyor appointed by the Bank, at the Borrower’s expense; and
	 
	 	(p)	 	valuation of the Vessel, at the Borrower’s expense, as at a date determined
by the Bank but in any event before the relevant drawdown, prepared on the basis
specified in Clause 8.10(b) by major shipbrokers appointed and/or approved by the
Bank in form and substance satisfactory to the Bank in its sole discretion.

	7.4	 	No change of circumstances. The obligation of the Bank to advance the
Commitment (or any part thereof) to the Borrower and/or to allow any Transaction to
be effected under the Master Agreement is subject to the further condition that at the
time of the giving of a Drawdown Notice and on advancing the Commitment (or any
part thereof):

	 	(a)	 	the representations and warranties set out in Clause 6 and in each of the
Security Documents are true and correct on and as of each such time as if each

was made with respect to the facts and circumstances existing at such time;
	 
	 	(b)	 	no Event of Default shall have occurred and be continuing or would result
from the relevant drawdown; and
	 
	 	(c)	 	the Bank shall be satisfied that there has been no change in the ultimate
ownership, management and/or adverse change financial condition of any
Security Party which (change) might, in the reasonable opinion of the Bank, be
detrimental to the interests of the Bank.

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

37

 

	 	(a)	 	opinions from the Security Parties’ legal counsel and from lawyers appointed
by the Bank as to all the matters referred to in Clauses 6.1 (a) and (b) and all
such aspects of law as the Bank shall deem relevant to this Agreement and the
other Security Documents and any other documents executed pursuant hereto
or thereto and confirms that all the Security Parties are aware of the entire
contents of this Agreement and the other Security Documents as well as
opinion from the lawyers appointed by the Bank and any further legal or other
expert opinion as the Bank at its sole discretion may reasonably require;
	 
	 	(b)	 	confirmation from any agents nominated in this Agreement and elsewhere in
the other Security Documents for the acceptance of any notice or service of
process, that they consent to such nomination;
	 
	 	(c)	 	a receipt in writing in form and substance satisfactory to the Bank including
an acknowledgement and admission of the Borrower and/or any other Security
Party to the effect that the Commitment or relevant part thereof (as the case
may be) was drawn by the Borrower and a declaration by the Borrower that all
conditions precedent have been fulfilled, that there is no Event of Default and
that all the representations and warranties are true and correct; and
	 
	 	(d)	 	evidence that the arrangement fee and the commitment fee referred to in
Clause 10.8 have been paid in full to the Bank.

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

	 	(a)	 	Annual financial Statements: furnish the Bank, in form and
substance satisfactory to the Bank, with annual audited consolidated financial statements
of the Borrower and the Group (including the Owner) at latest within 180 days
after the end of the financial year concerned, commencing as at the 31st
December, 2007 prepared in accordance with IAS;
	 
	 	(b)	 	Financial Information: provide the Bank annually and from time to time
as the Bank may reasonably request and in form and substance satisfactory to the
Bank with information on all major financial developments of the Borrower
and the Group, such as sales or purchases of vessels, new loans,
refinancing/restructuring of existing loans, as well as the financial conditions,
cash flow position, commitments and operations of the Borrower and its

38

 

	 	 	 	Related Companies including cash flow analysis and voyage accounts of any vessels
owned by any such party with a breakdown of income and running expenses showing
net trading profit, trade payables and trade receivables, such financial details
to be certified by one of the financial officer of the relevant company as to
their correctness;
	 
	 	(c)	 	Information on adverse change or Default: promptly inform the Bank of
any occurrence which came to the knowledge of the Borrower which might
adversely affect the ability of any of the Borrower or any other Security Party
to perform its respective obligations under this Agreement and/or any of the
other Security Documents and of any Default forthwith upon becoming aware
thereof; and
	 
	 	(d)	 	Information on the employment of the Vessel: provide the Bank from
time to time as the Bank may request with information on the employment of the
Vessel and of any Relevant Ship as well as on the terms and conditions of any
charterparty, contract of affreightment, agreement or related document in
respect of the employment of the Vessel and of any Relevant Ship, such
information to be certified by one of the directors of the Borrower as to their
correctness;

	8.2	 	Banking operations -Minimum Liquidity

	 	(a)	 	ensure that, all banking operations in connection with the Vessel are carried
out through the Lending Office; and
	 
	 	(b)	 	ensure that throughout the Security Period the Borrower and the Owner (or
either of them), will maintain in unencumbered (except in favour of the Bank)
deposit account(s) maintained with the Bank (including the Retention
Account) an average monthly balance of Two hundred thousand Dollars
($200,000); also the Borrower will ensure that a fair share of the Group’s
liquidity will be channelled to the Bank;

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

	 	(a)	 	No further Indebtedness: ensure that the Owner will not incur any
further Indebtedness nor authorise or accept any capital commitments (other than that
normally associated with the day to day operations of the Vessel) nor enter into
any agreement for payment on deferred terms or hire agreement without the
prior written consent of the Bank;
	 
	 	(b)	 	No Loans: not make any loans or advances to, or any investments in any
person, firm, corporation, joint venture or other entity including (without
limitation) any loan or advance to any officer, director, stockholder or
employee directly or through the Manager;

39

 

	 	(c)	 	No Dividends — No disposal of Assets: not declare or pay any dividends
or other distribution upon any of the issued shares or otherwise dispose of any
assets to any of the shareholders of the Borrower, without the prior written
consent of the Bank, provided, however, that unless an Event of Default has
occurred the Borrower shall be entitled to declare or pay any dividends upon
any of the issued shares for an amount of up to 50% of its Excess Cash Flow;
	 
	 	(d)	 	and for the purpose of this Clause 8.3(c):

	 	(i)	 	“Debt Service” means an amount (as conclusively certified by
the Bank) which is equal to the aggregate payments of principal and interest
which the Borrower will be obliged to pay to the Bank pursuant to this
Agreement and the other Security Documents during the relevant Excess Cash
Flow Calculation Period (including sums standing to the credit of the
Retention Account);
	 
	 	(ii)	 	“Excess Cash Flow Calculation Period” means each successive
annual period during the Security Period, the first commencing with the
financial year terminating on 31st December, 2008 up to the date
when the Outstanding Indebtedness has been repaid in full to the Bank;
	 
	 	(iii)	 	“Excess Cash Flow” means, in relation to any Excess Cash
Flow Calculation Period, the amount (as conclusively calculated by the
Bank) which is equal to the Total Income minus (a) the amount of
Debt Service payable pursuant to Clause 4.1 and 3, and (b) the Operating
Expenses paid during such Excess Cash Flow Calculation Period;
	 
	 	(iv)	 	“Total Income” in relation to a Excess Cash Flow
Calculation Period means the total income of the Vessel for such Excess
Cash Flow Calculation Period less brokerage fees and commissions and
withholding taxes (if any);

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

	8.4	 	Maintenance of Business Structure

	 	(a)	 	Maintenance of Business Structure: not change the nature,
organisation and conduct of the business of the Borrower or the Owner, as owner of
the Vessel or the Manager as manager of vessels, as the case may be, or carry on
any business other than the business carried on at the date of this Agreement;

40

 

	 	(b)	 	Maintenance of Legal Structure: ensure that none of the documents
defining
the constitution of the Borrower and/or any corporate shareholder shall be
altered in any manner whatsoever without the prior written consent of the
Bank;
	 
	 	(c)	 	Control: ensure that no change shall be made directly or indirectly
in the
ownership, legal and beneficial ownership control or management of the
Borrower or the Owner or any share therein or of the Vessel without the prior
written consent of the Bank (such consent not to be unreasonably withheld);
and
	 
	 	(d)	 	No merger: not merge or consolidate with any other company or person;
	 
	 	(e)	 	Pari passu: ensure that its obligations under this Agreement shall,
without
prejudice to the provisions of this Clause 8.4 at all times rank at least pari
passu with all its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;

	8.5	 	Maintenance of Assets

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

	8.6	 	Covenants Concerning the Vessel

	 	(a)	 	Ownership/Management/Control: ensure that the Vessel will be registered
on
the Drawdown Date under the laws of the relevant Flag State and thereafter
maintain her present ownership, management, control and beneficial
ownership;
	 
	 	(b)	 	Class: ensure that the Vessel will remain in class free of any and all
recommendations, overdue notations or average damage affecting class and
provide the Bank on demand with copies of all class and trading certificates of
the Vessel;
	 
	 	(c)	 	Insurances: ensure that all Insurances of the Vessel are maintained and
comply
with all insurance requirements specified in this Agreement and in the relevant
Mortgage and in case of failure to maintain the Vessel so insured authorise the
Bank (and such authorisation is hereby expressly given to the Bank) to have

41

 

	 	 	 	the right but not the obligation to effect such Insurances on behalf of the Owner (and in
case that the Vessel remains in port for an extended period to effect port risks
insurances at the cost of the Borrower which, if paid by the Bank, shall be Expenses);
	 
	 	(d)	 	Transfer/Encumbrances: not without the prior written consent of the Bank sell
or otherwise dispose of the Vessel or any share therein or create or agree to
create or permit to subsist any Encumbrance over the Vessel (or any share or
interest therein) other than Permitted Encumbrances;
	 
	 	(e)	 	Not imperil Flag. Ownership. Insurances: ensure that the Vessel is maintained
and trades in conformity with the laws of the relevant Flag State, of its owning
company or of the nationality of the officers of the Vessel, the requirements of
the Insurances and nothing is done or permitted to be done which could
endanger the flag of the Vessel or its unencumbered (other than Permitted
Encumbrances) ownership or its Insurances;
	 
	 	(f)	 	Mortgage Covenants: always comply with all the covenants provided for in the
relevant Mortgage;
	 
	 	(g)	 	Charter: ensure that, save for the C & Shipping Charterparty, the Owner does
not enter into a charterparty, contract of affreightment, agreement or related
document in respect of the employment of the Vessel (i) on demise
charterparty or (ii) without the prior written consent of the Bank, for a period
for more than twelve (12) months or below the market rate prevailing at the
time when the Vessel is fixed in or on terms which are not in accordance with
the commercial practice prevailing at the relevant time;
	 
	 	(h)	 	Assignment of Earnings: not assign or agree to assign otherwise than to the Bank the
Earnings or any part thereof; and
	 
	 	(i)	 	Compliance with Environmental Laws: comply with, and procure that all Environmental
Affiliates of any Relevant Party comply with, all Environmental Laws including without
limitation, requirements relating to manning and establishment of financial responsibility
and to obtain and comply with, and procure that all Environmental Affiliates of such Relevant
Party obtain and comply with, all Environmental Approvals and to notify the Bank forthwith:

	 	(i)	 	of any Environmental Claim for an amount or amounts in aggregate exceeding
$750,000 made against the Vessel and or any Relevant Ship and/or her respective
owner; and
	 
	 	(ii)	 	upon becoming aware of any incident which may give rise to an Environmental
Claim and to keep the Bank advised in writing of the Borrower’s response to such
Environmental Claim on such regular basis and in such detail as the Bank shall
require; and

42

 

	 	(j)	 	Ownership: ensure that the Vessel will maintain her present
ownership, management, control and beneficial ownership; and
	 
	 	(k)	 	Mandatory employment: ensure that the Owner enters into the C &
Shipping Charterparty at least ten (10) Banking Days prior to the expected Delivery
Date of the Vessel and in case of bankruptcy or insolvency or liquidation of C &
Shipping Co. Ltd or in case the C & Shipping Charterparty is terminated or
rescinded or frustrated for any reason whatsoever at any time during the first
three (3) years of the Security Period, the Borrower within thirty (30) days from
such event:

	 	(i)	 	shall produce to the Bank a substitute Charterparty for the
employment of the Vessel, entered into between the Owner and the relevant
charterer; or
	 
	 	(ii)	 	shall either prepay part of the Loan or provide the Bank
with such additional security as provided in clause 8.10(a), so that, in
either case, the aggregate of the Vessel’s Market Value (determined in
accordance with the provisions of clause 8(b)) and the value of such
additional security (determined in accordance with the provisions of clause
8(c)) to be at least one hundred and sixty seven percent (167%) of the
aggregate of the Loan and the Swap Exposure;

	 	 	 	Provided, however, that in case the Owner fails to enter into the C & Shipping
Charterparty as aforesaid and the Borrower fails to provide alternative security
to the bank as provided in this clause prior to the Delivery of the Vessel, the
amount of the Commitment shall be reduced to the lesser of (i) $37,500,000 and
(ii) 60% of the at the time Market Value of the Vessel determined in accordance
with Clause 8.10(b).

	8.7	 	Compliance with the ISM Code and ISPS Code, procure that the Manager and any Operator:

	 	(a)	 	will comply with and ensure that the Vessel and any Operator complies with
the requirements of the ISM Code, including (but not limited to) the
maintenance and renewal of valid certificates pursuant thereto throughout the
Security Period;
	 
	 	(b)	 	immediately inform the Bank if there is any threatened or actual withdrawal of
the Owner’s, the Manager’s or an Operator’s DOC or the SMC in respect of
the Vessel; and
	 
	 	(c)	 	promptly inform the Bank upon the issue to the Owner, the Manager or any
Operator of a DOC and to the Vessel of an SMC or the receipt by the Owner,
the Manager or any Operator of notification that its application for the same
has been realised; and

43

 

	 	(d)	 	(aa) will maintain at all times a valid and current ISSC in respect of the
Vessel, (bb) immediately notify the Bank in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of
the Vessel and (cc) procure that the Vessel will comply at all times with the
ISPS Code.

	8.8	 	Observance of Covenants

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

	8.9	 	Validity of Securities

	 	(a)	 	Validity: ensure and procure that all governmental or other consents
required
by law and/or any other steps required for the validity, enforceability and
legality of this Agreement and the other Security Documents are maintained in
full force and effect and/or appropriately taken;
	 
	 	(b)	 	Earnings: ensure and procure that, unless and until directed by the
Bank
otherwise (i) all the Earnings of the Vessel shall be paid to the relevant
Earnings Account and (ii) the persons from whom the Earnings of the Vessel
are from time to time due are irrevocably instructed to pay them to such
Earnings Account in accordance with the provisions hereof and of the relevant
Security Documents;
	 
	 	(c)	 	Taxes: pay all Taxes, assessments and other governmental charges when
the
same fall due, except to the extent that the same are being contested in good
faith by appropriate proceedings and adequate reserves have been set aside for
their payment if such proceedings fail; and
	 
	 	(d)	 	Additional Documents: from time to time at the request of the Bank
execute
and deliver to the Bank or procure the execution and delivery to the Bank of
all such documents as the Bank would reasonably require for giving full effect
to this Agreement, and for perfecting, protecting the value of or enforcing any
rights or securities granted to the Bank under any one or more of this

44

 

	 	 	 	Agreement, the other Security Documents and any other documents executed pursuant
hereto or thereto and in case that any Conditions Precedent have not been
fulfilled prior to the Drawdown, such Conditions shall be complied with within
five (5) days of Drawdown (unless the Bank agrees otherwise in writing) and
failure to comply with this Covenant shall be an Event of Default.

	8.10	 	Vessel’s Value to Debt Ratio-Additional Security

	 	(a)	 	Vessel’s Value to Debt Ratio: The Borrower hereby undertakes that,
from the date of this Agreement and as long as any money is due and/or owing and/or
outstanding under this Agreement or any of the other Security Documents, the
Borrower will ensure that the aggregate of (i) the Security Value shall be at least
equal to of the Security Requirement at the relevant time and if at any relevant
time the Security Value is less than the Security Requirement, they will within
thirty (30) Banking Days of being advised by the Bank of such event either:

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

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

45

 

	 	 	 	Any such additional security provided to the Bank shall be released by the Bank once
the Security Requirement ratio has been restored. The provisions of Clause 4.3 and 4.4
shall apply to prepayments under Clause 8.10(a).and/or
	 
	 	(b)	 	Valuation of the Vessel: At any time (and at least once per year) that the Bank
might consider to be (at the reasonable discretion of the Bank) necessary or
useful and at the expense of the Borrower, have the Vessel valued in Dollars,
without, unless required by the Bank, physical inspection and on the basis of
sale for prompt delivery and free of Encumbrances for cash at arm’s length on
normal commercial terms as between a willing seller and a willing buyer
without taking into account the benefit of any charterparty or other
engagement concerning the Vessel (“the basis of valuation”), by one (1) of
the following shipbrokers namely: (i) H. Clarkson & Company Limited, (ii)
Galbraith’s Ltd., (iii) A.E. Gibson Shipbrokers Ltd, (iv) SSY, (v) Braemar
Seascope Limited, and (vi) Golden Destiny, or any other shipbrokers, as may
from time to time be appointed by the Bank for this purpose at the Bank’s sole
discretion. The Market Value of the Vessel determined as aforesaid shall be
notified by the Bank to the Borrower and such valuation shall constitute the
value of the Vessel for the purposes of this Agreement and shall be binding
upon the parties hereto. The Bank and the Borrower each agrees to accept such
valuation made by the shipbroker appointed as aforesaid as conclusive
evidence of the Market Value of the Vessel at the date of such valuation. The
Borrower further agrees to supply the Bank and any shipbroker appointed as
aforesaid with such information concerning the Vessel and her condition as
such shipbroker may reasonably require for the purpose of making such
valuation;
	 
	 	 	 	Provided, however, that in case of significant market deterioration the Bank
will have the right to request additional valuations at the Borrower’s expense.
	 
	 	(c)	 	Valuation of additional security: For the purpose of this Clause 8.10, the
market value of any additional security provided or to be provided to the Bank
shall be determined by the Bank in its absolute discretion without any
necessity for the Bank assigning any reason thereto provided, always, that if
the additional security is in the form of a collateral vessel such collateral vessel
shall be valued in accordance with the provisions of Clause 8.10(b) or, as the
case may be, 8.10(c) or if the additional security is in form of a cash deposit
full credit shall be given for such cash deposit on a Dollar for Dollar basis.
	 
	 	(d)	 	Documents and evidence: In connection with any additional security provided
in accordance with this Clause 8.10, the Bank shall be entitled to receive such
evidence and documents as may in the Bank’s reasonable opinion be
appropriate and such favourable legal opinions as the Bank shall in its absolute
discretion require.

46

 

	 	(e)	 	Costs: All costs in connection with any valuation made pursuant to
Clauses 8.10(b) and (c) shall be borne by the Borrower. Any valuation referred to
in Clause 8.10 to be addressed to the Bank.

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

	8.12	 	Additional Financial covenants

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

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

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

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

47

 

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

	 	(a)	 	the Borrower or any other Security Party fails to pay any sum due from the
Borrower or, as the case may be such Security Party, under this Agreement
and/or any of the other Security Documents at the time, in the currency and in
the manner stipulated herein and/or any of the other Security Documents, or, in
the case of any sum payable on demand, within three (3) Banking Days of such
demand; or
	 
	 	(b)	 	the Borrower or any other Security Party fails to observe and perform any one
or more of the covenants, terms or obligations contained in this
Agreement and/or any other Security Document relating to the Insurances; or
	 
	 	(c)	 	the Borrower or any other Security Party commits any breach of or omits to
observe any of the covenants, terms, obligations or undertakings under this
Agreement and/or any of the other Security Documents (other than failure to
pay any sum when due or to comply with any obligation concerning the
Insurances) and, in respect of any such breach or omission which in the
opinion of the Bank is capable of remedy, such action as the Bank may require
shall not have been taken within ten (10) days of the Bank notifying the
Borrower and/or the relevant Security Party of such required action to remedy
the breach or omission; or

	9.2	 	Events affecting the Borrower

	 	(a)	 	the Borrower is adjudicated or found bankrupt or insolvent or any order is
made by any competent court or resolution passed by the Borrower or petition
presented for the winding-up or dissolution of the Borrower or for the appointment
of a liquidator, trustee, administrator or conservator of the whole or any part of
the undertakings, assets, rights or revenues of the Borrower; or

48

 

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

	9.3	 	Representations Incorrect
	 
	 	 	any representation or warranty made or deemed to be made or repeated by or in respect of
the Borrower in or pursuant to this Agreement or any of the other Security Documents or
in any notice, certificate or statement referred to in or delivered under this Agreement
or any of the other Security Documents is or proves to have been incorrect in any
material respect; or

49

 

	9.4	 	Cross-default of the Borrower
	 
	 	 	any Indebtedness of the Borrower is not paid when due or becomes due and payable, or any
creditor of the Borrower becomes entitled to declare any such Indebtedness due and
payable prior to the date when it would otherwise have become due, or any guarantee or
indemnity given or any obligation or covenant undertaken or agreement made by the
Borrower in respect of Indebtedness is not honoured when due; or
	 
	9.5	 	Events affecting the Security Documents

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

50

 

	9.6	 	Events concerning the Security Parties

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

	9.7	 	Environmental Events

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

51

 

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

	9.8	 	Events Concerning the Vessel

	 	(a)	 	the Vessel becomes a Total Loss unless:

	 	(i)	 	the Bank shall have received within ninety (90) days after
the occurrence of the event giving rise to such total Loss confirmation from
the relevant underwriter that such Total Loss is an insured event and
constitutes a valid claim against such underwriters; and
	 
	 	(ii)	 	after receipt of such confirmation the Bank shall have
received within one hundred and eighty days (180) after the occurrence of
such event, the insurance proceeds in an amount equal to the amount for
which the Vessel was required to be insured in accordance with the
provisions of this Agreement immediately prior to the event giving rise to
such Total Loss; or

	 	(b)	 	the Vessel ceases to be managed by the Manager (for any reason other than the
reason of a Total Loss or sale of the Vessel) with the approval of the Bank, and
the Owner fails to appoint a Manager within fifteen (15) days after the
termination of the Management Agreement with the previous Manager; or
	 
	 	(c)	 	the Vessel is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory lien or
other claim and the Owner fails to procure the release of the Vessel within a
period of thirty (30) days thereafter; or
	 
	 	(d)	 	(without prejudice to the generality of sub-Clauses 9.1(b) and (c)) for any
reason whatsoever the provisions of Clause 8.7 are not complied with
and/or the Vessel ceases to comply with the ISM Code or the ISPS Code; or
	 
	 	(e)	 	the Flag State of the Vessel becomes involved in hostilities or civil war or
there is a seizure of power in such Flag State by unconstitutional means if, in
any such case, such event could in the reasonable opinion of the Bank
reasonably be expected to have a material adverse effect on the security
constituted by any of the Security Documents and alternative arrangements
satisfactory to the Bank have not been made promptly upon the Bank’s
request; or

52

 

	 	(f)	 	the registration of the Vessel under the laws and flag of the relevant Flag
State
is cancelled or terminated without the prior written consent of the Bank or, if
the Vessel is only provisionally registered on the Drawdown Date and is not
permanently registered under the laws and flag of the relevant Flag State at
least ninety (90) days prior to the deadline for completing such permanent
registration; or
	 
	 	(g)	 	the C & Shipping Charterparty or any other Charterparty is terminated or
rescinded for any reason whatsoever, including, but not limited to, the
bankruptcy or insolvency or liquidation of C & Shipping Co. Ltd or the C &
Shipping Charterparty or any other Charterparty is frustrated and the Borrower
does not produce to the Bank within thirty (30) days from such event a
substitute Charterparty for the employment of the Vessel, entered into between
the Owner and the relevant charterer or in accordance with clause 8.7(k) either
provide additional security or prepay part of the Loan; or
	 
	 	(h)	 	moneys are withdrawn from the Earnings Account otherwise than
in accordance with clause 11.7; or

	9.9	 	Events concerning the Master Agreement

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

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

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

	 	(i)	 	all the obligations of the Bank to the Borrower under this
Agreement
are terminated, whereupon the Total Commitment shall be reduced to zero forthwith; and/or

53

 

	 	(ii)	 	the Loan and all interest and commitment commission accrued and all
other sums payable under the Security Documents have become due and
payable, whereupon the same shall, immediately or in accordance with the
terms of such notice, become due and payable and/or
	 
	 	(iii)	 	take any other action which, as a result of the Event of
Default or any notice served under paragraph (a) or (b) the Bank is entitled
to take under any Security Document or any applicable law; and/or

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

	9.11	 	Acceleration. On the service of a notice under Clause 9.10(a), the Loan, all accrued
interest and all other amounts accrued or owing from the Borrower or any Security
Party under this Agreement and every other Security Document shall become
immediately due and payable or, as the case may be, payable on demand together with
the Swap Exposure of the Bank which has terminated any existing Transactions under
the Master Agreement.
	 
	9.12	 	Insolvency Events of Default. If an event occurs in respect of any of the Borrower or
the other Security Parties of the type described in Clause 9.2(a) to (e) (except (i) in the
case when a petition was presented or proceedings were commenced or a suit or writ
were issued by a third party and the Borrower or the relevant Security Party is
defending itself in bona fide and (ii) in the case that such events mentioned in Clause
9.2 relate to only a part of the undertakings, assets, rights or revenues which in the
reasonable opinion of the Bank does not affect the ability of the Borrower to perform
its obligations under this Agreement and/or the Security Documents) the obligation of
the Bank to make the Commitment available shall terminate immediately upon receipt
by the Bank of the relevant information (as such receipt shall be conclusively certified
by a certificate of the Bank) and all amounts payable under sub-clause 9.10 above
shall become immediately due and payable without any notice or other formality
which is hereby expressly waived by the Borrower.
	 
	9.13	 	Demand basis. If, pursuant to clause 9.10(a), the Bank declares the Loan to be due
and payable on demand, the Bank may by written notice to the Borrower (a) call for
repayment of the Loan on such date as may be specified whereupon the Loan shall
become due and payable on the date so specified together with all interest accrued and
all other sums payable under this Agreement or (b) withdraw such declaration with
effect from the date specified in such notice.
	 
	9.14	 	Proof of Default. It is agreed that (i) the non-payment of any sum of money in time
will be proved conclusively by mere passage of time and (ii) the
occurrence of this (non payment) and any other Event of Default shall be proved conclusively by a mere

54

 

	 	 	written statement of the Bank which statement shall (save for manifest error) be
conclusive, binding and full evidence for the Borrower.
	 
	9.15	 	Exclusion of Bank’s liability. Neither the Bank nor any receiver or manager appointed by
the Bank, shall have any liability to the Borrower or a Security Party:

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

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

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

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

55

 

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

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

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

	 	(a)	 	Initial and Amendment expenses: all expenses (including legal, printing
and
out-of-pocket expenses) incurred by the Bank in connection with the
negotiation, preparation and execution of this Agreement and the other
Security Documents and of any amendment or extension of or the granting of
any waiver or consent under this Agreement and/or any of the Security
Documents and/or in connection with any proposal by the Borrower to
constitute additional security pursuant to Clause 8.10(c), whether any such
security shall in fact be constituted or not;
	 
	 	(b)	 	Enforcement expenses: all expenses (including legal and out-of- pocket
expenses) incurred by the Bank in contemplation of, or otherwise in
connection with, the enforcement of, or preservation of any rights under, this
Agreement and/or any of the other Security Documents, or otherwise in
respect of the moneys owing under this Agreement and/or any of the other
Security Documents or the contemplation or preparation of the above, whether
they have been effected or not; and
	 
	 	(c)	 	MII and MAPI costs: reimburse the Bank on demand for any and all costs
incurred by the Bank (as conclusively certified by the Bank) in effecting and
keeping effected (i) a MII and (ii) a MAPI, provided, however, that the Bank
shall in its absolute discretion appoint and instruct in respect of any such MII
and MAPI the insurance brokers in respect of each such Insurance and
provided, further, that in the event that the Bank effects any such
Insurance on
the basis of any mortgagee’s open cover, the Borrower shall pay on demand to

56

 

	 	 	 	the Bank its proportion of premium due in respect of the Vessel for which such
insurance cover has been effected by the Bank, and any certificate of the Bank in
respect of any such premium due by the Borrower shall (save for manifest error)
be conclusive and binding upon the Borrower;
	 
	 	(d)	 	Other expenses: any and all other Expenses; and
	 
	 	(e)	 	Legal costs: the legal costs of the Bank’s appointed lawyer, in respect
of the
preparation of this Agreement and the other Security Documents as well as the
legal costs of the foreign lawyers (if these are available) in respect of the
registration of the Security Documents or any search or opinion given to the
Bank in respect of the Security Parties or the Vessel or the Security
Documents. The said legal costs shall be due and payable on the date of
drawdown.

	 	 	All expenses payable pursuant to this Clause 10.2 shall be paid together with Value Added
Tax (if any) thereon.
	 
	10.3	 	Stamp duty. The Borrower shall (and it is hereby expressly undertaken by the
Borrower to pay any and all stamp, registration and similar taxes or charges (including
those payable by the Bank) imposed by governmental authorities in relation to this
Agreement and any of the other Security Documents, and shall indemnify the Bank
against any and all liabilities with respect to, or resulting from delay or omission on
the part of the Borrower to pay such stamp taxes or charges.
	 
	10.4	 	Environmental Indemnity. The Borrower shall indemnify the Bank on demand and
hold the Bank harmless from and against all costs, expenses, payments charges,
losses, demands, liabilities, actions, proceedings (whether civil or criminal) penalties,
fines, damages, judgements, orders, sanctions or other outgoings of whatever nature
which may be suffered, incurred or paid by, or made or asserted against the Bank at
any time, whether before or after the repayment in full of principal and interest under
this Agreement, relating to, or arising directly or indirectly in any manner or for any
cause or reason out of an Environmental Claim made or asserted against the Bank.
	 
	10.5	 	Currency indemnity. If any sum due from the Borrower under any of the Security
Documents or any order or judgement given or made in relation hereto has to be
converted from the currency (the “first currency”) in which the same is payable
under the relevant Security Document or under such order or judgement into another
currency (the “second currency”) for the purpose of (i) making or filing a claim or
proof against the Borrower or any other Security Party, as the case may be, (ii)
obtaining an order or judgement in any court or other tribunal or (iii) enforcing any
order or judgement given or made in relation to any of the Security Documents, the
Borrower shall (and it is hereby expressly undertaken by the Borrower to) indemnify
and hold harmless the Bank from and against any loss suffered as a result of any
difference between (a) the rate of exchange used for such purpose to convert the sum
in question from the first currency into the second currency and (b) the rate or rates of

57

 

	 	 	exchange at which the Bank may in the ordinary course of business purchase the first
currency into the second currency and (b) the rate or rates of exchange at which the Bank
may in the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any
such order, judgement, claim or proof. Any amount due from the Borrower under this Clause
10.5 shall be due as a separate debt and shall not be affected by judgement being
obtained for any other sums due under or in respect of any of the Security Documents, and
the term “rate of exchange” includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second currency.
	 
	10.6	 	Maintenance of the Indemnities. The indemnities contained in this Clause 10 shall
apply irrespective of any indulgence granted to the Borrower or any other party from
time to time and shall continue to be in full force and effect notwithstanding any
payment in favour of the Bank and any sum due from the Borrower under this Clause
10 will be due as a separate debt and shall not be affected by judgement being
obtained for any other sums due under any one or more of this Agreement, the other
Security Documents and any other documents executed pursuant hereto or thereto.
	 
	10.7	 	Communications Indemnity. It is hereby agreed in connection with communications
that:

	 	(a)	 	express authority is hereby given by the Borrower to the Bank to accept (at the
sole discretion of the Bank) all tested or untested communications given by
facsimile cable or otherwise, regarding any or all of the notices, requests,
instructions or other communications under this Agreement, subject to any
restrictions imposed by the Bank relating to such communications including,
without limitation (if so required by the Bank), the obligation to confirm such
communications by letter;
	 
	 	(b)	 	the Borrower shall recognise any and all of the said notices, requests,
instructions or other communications as legal, valid and binding, when these
notices, requests, instructions or communications come from the fax numbers
mentioned in Clause 14.1 or any other fax usually used by it or its managing
company;
	 
	 	(c)	 	the Borrower hereby assumes full responsibility for the execution of the said
	 
	 	 	 	notices, requests, instructions or communications by the Bank and promises
and recognises that the Bank shall not be held responsible for any loss, liability
or expense that may result from such notices, requests, instructions or other
communications. It is hereby undertaken by the Borrower to indemnify in full
the Bank from and against all actions, proceedings, damages, costs, claims,
demands, expenses and any and all direct and/or indirect losses which the
Bank or any third party may suffer, incur or sustain by reason of the Bank
following such notices, requests, instructions or communications;

58

 

	 	(d)	 	with regard to notices, requests, instructions or communications issued by
electronic and/or mechanical processes (e.g. by facsimile), the risk of
equipment malfunction, including, without limitation, paper shortage,
transmission errors, omissions and distortions is assumed fully and accepted
by the Borrower;
	 
	 	(e)	 	the risks of misunderstandings and errors of notices, requests, instructions or
communications being given as mentioned above, are for the Borrower
and the Bank will be indemnified in full pursuant to this Clause;
	 
	 	(f)	 	the Bank shall have the right to ask the Borrower to furnish any information
the Bank may require to establish the authority of any person purporting to act
on behalf of the Borrower for these notices, requests, instructions or
communications but it is expressly agreed that there is no obligation for the
Bank to do so. The Bank shall be fully protected in, and the Bank shall incur
no liability to the Borrower for acting upon the said notices, requests,
instructions or communications which were believed by the Bank in good faith
to have been given by the Borrower or by any of its authorised
representative(s); and
	 
	 	(g)	 	it is undertaken by the Borrower to safeguard the function and the security of
the electronic and mechanical appliance(s) such as fax(es) etc., as well as the
code word list, if any, and to take adequate precautions to protect it from loss
and to prevent its terms becoming known to any persons not directly
concerned with its use. The Borrower shall hold the Bank harmless and
indemnified from all claims, losses, damages and expenses which the Bank
may incur by reason of the failure of the Borrower to comply with the
obligations under this Clause and/or this Agreement.

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

	 	(a)	 	an arrangement fee in an amount equal to 0.40% of the amount of the
Commitment, payable on the date hereof; and
	 
	 	(b)	 	in arrears on each of the dates falling at three monthly intervals after the
14th
January, 2009 until the earlier of (a) the last day of the Availability Period (b)
the Drawdown Date and (c) the date of cancellation of the Commitment in full
by the Borrower (the “Commitment Commission Period”) commitment
commission at the rate of zero point four zero (0.40%) percent per annum on
the daily undrawn and uncancelled amount of the Commitment, computed
from the date of acceptance of the Commitment Letter by or on behalf of the
Borrower (in the case of the first payment of commission) and from the date of
the preceding payment of commission (in the case of each subsequent
payment) until the last day of the Commitment Commission Period.

59

 

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

	 	(a)	 	the Mortgage;
	 
	 	(b)	 	the General Assignment;
	 
	 	(c)	 	the Corporate Guarantee;
	 
	 	(d)	 	the Charterparty Assignment;
	 
	 	(e)	 	the Accounts Pledge Agreement;
	 
	 	(f)	 	the Master Agreement Security Deed; and

(g) the Manager’s Undertaking.

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

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

60

 

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

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

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

61

 

	11.6	 	Rights under Master Agreement.

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

	11.7	 	Earnings Account-Retention Account.

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

	 	(i)	 	first: in payment of any and all sums whatsoever
due and payable to the Bank hereunder (such sums to be paid in such order
as the Bank may in its sole discretion elect);
	 
	 	(ii)	 	second: during each month of the Security Period
(but no later than, in the case of the first such month, the date falling
thirty (30) days after the Drawdown Date and, in the case of each
subsequent month, the same date of that month), the Borrower and the Owner
shall cause to be transferred from the Earnings Account to the Retention
Account of the aggregate amount of the Earnings of the Vessel received in
the Earnings Account during the preceding month:

	 	aa)	 	one third (1/3rd) of the amount of the
Repayment Instalment specified in Clause 4.1 falling due for payment
on the next following Repayment Date; and

62

 

	 	bb)	 	the relevant fraction of the amount of interest on the Loan falling
due on the next due date for payment of interest under this Agreement.

	 	 	 	The expression “relevant fraction” in relation to an amount of interest on the
Loan falling due for payment means a fraction (which shall be notified by the
Bank to the Borrower at the beginning of each Interest Period) where the
numerator is always one and where the denominator shall always be three (3)
except in the case of an Interest Period of less than three (3) months, in
which case the denominator shall be the number of months comprised in such
Interest Period; and
	 
	 	(iii)	 	thirdly: any balance shall be released to the Owner.

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

63

 

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

	12.	 	UNLAWFULNESS. INCREASED COSTS
	 
	12.1	 	Unlawfulness. If any change in, or introduction of, any law, regulation or regulatory
requirement or any request of any central bank, monetary, regulatory or other authority or
any order of any court renders it unlawful or contrary to any such regulation,
requirement, request or order for the Bank to advance the Commitment (or any part thereof)
or to maintain or fund the Loan, notice shall be given promptly by the Bank to the
Borrower whereupon the Commitment shall be reduced to zero and the Borrower shall be
obliged to prepay the Loan in accordance with such notice, together with

64

 

	 	 	accrued interest thereon to the date of prepayment and all other sums payable by the
Borrower under this Agreement and/or the Master Agreement. In any such event the Borrower
and the Bank shall (as per the provisions of sub-Clause 3.6) negotiate in good faith (but
without incurring any legal obligations) with a view to agreeing the terms for making the
Loan available from another jurisdiction or providing the Loan from alternative sources.
	 
	12.2	 	Change of circumstances. If any change in or in the interpretation of any applicable
law or regulation, by any government or governmental authority or agency, makes it
unlawful for the Bank to maintain or give effect to its obligations or to claim or
receive any amount payable to the Bank under this Agreement, then the Bank may
serve written notice on the Borrower declaring its obligations under this Agreement
terminated in whole or in part, whereupon the same shall terminate forthwith and the
Borrower will immediately repay the Loan and accrued interest to the date of
prepayment together with all other Outstanding Indebtedness to the Bank pursuant to
the terms of the notice.
	 
	12.3	 	Increased Cost. If, as a result of (a) any change in or in the interpretation of any law,
regulation or official directive (whether or not having the force of law but, if not
having the force of law, with which the Bank habitually complies), by any
governmental authority in any country the laws or regulations of which are applicable
on the Bank, or (b) compliance by the Bank with any request from any applicable
fiscal or monetary authority (whether or not having the force of law but, if not having
the force of law, with which the Bank habitually complies) or (c) any other set of
circumstances affecting the Bank including (without limitation) those relating to
Taxation, stock or capital adequacy, any type of liquidity, reserve assets, cash ratio
deposits and special deposits or other banking or monetary controls or requirements
(except to the extent included in the Mandatory Cost) which affects the manner in
which the Bank allocates capital resources to its obligations hereunder (including
(without limitation) those resulting from the implementation of or compliance with
any amendment of the “International Convergence of Capital Measurement and
Capital Standards, a Revised Framework” published by the Basle Committee on
Banking Supervision (July 1988, as amended) or any amendatory or substitute
agreement thereof including, without limitation, the proposed new Basle Capital
Accord (Basle II) or any law or regulation which implements Basle II):

	 	(a)	 	the cost to the Bank of making the Commitment or any part thereof or
maintaining or funding the Loan is increased or an additional cost on the Bank
is imposed; and/or
	 
	 	(b)	 	subject the Bank to Taxes or the basis of Taxation (other than Taxes or
Taxation on the overall net income of the Bank) in respect of any payments to
the Bank under this Agreement or any of the other Security Documents is
changed; and/or

65

 

	 	(c)	 	the amount payable or the effective return to the Bank under any of the
Security Documents is reduced; and/or
	 
	 	(d)	 	the Bank’s rate of return on its overall capital by reason of a change in the
manner in which it is required to allocate capital resources to the Bank’s
obligations under any of the Security Document is reduced; and/or
	 
	 	(e)	 	require the Bank to make a payment or forgo a return on or calculated by
references to any amount received or receivable by it under any of the Security
Documents is required; and/or
	 
	 	(f)	 	require the Bank to incur or sustain a loss (including a loss of future
potential
profits) by reason of being obliged to deduct all or part of the Commitment or
the Loan from its capital for regulatory purposes,

	 	 	then and in each case (subject to Clause 12.6) the Borrower shall pay to the Bank, from
time to time, upon demand, such additional moneys as shall indemnify the Bank for any
increased or additional cost, reduction, payment, foregone return or loss whatsoever
	 
	12.4	 	Claim for increased cost. The Bank will promptly notify the Borrower of any
intention to claim indemnification pursuant to Clause 12.3 and such notification will
be a conclusive and full evidence binding on the Borrower as to the amount of any
increased cost or reduction and the method of calculating the same and the Borrower
shall be allowed to rebut such evidence by any means of evidence save for witness. A
claim under Clause 12.3 may be made at any time and must be discharged by the
Borrower within seven (7) days of demand. It shall not be a defence to a claim by the
Bank under this Clause 12.3 that any increased cost or reduction could have been
avoided by the Bank. Any amount due from the Borrower under Clause 12.3 shall be
due as a separate debt and shall not be affected by judgement being obtained for any
other sums due under or in respect of this Agreement.
	 
	12.5	 	Option to prepay. If any additional amounts are required to be paid by the Borrower
to the Bank by virtue of Clause 12.3, the Borrower shall be entitled, on giving the
Bank not less than fourteen (14) days prior notice in writing, to prepay the Loan and
accrued interest thereon, together with all other Outstanding Indebtedness, on the next
Repayment Date. Any such notice, once given, shall be irrevocable.
	 
	12.6	 	Exception. Nothing in Clause 12.3 shall entitle the Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or additional cost,
reduction, payment, foregone return or loss to the extent that the same is subject of an
additional payment under Clause 5.3.
	 
	13.	 	ASSIGNMENT. PARTICIPATION. CHANGE OF LENDING BRANCH
	 
	13.1	 	Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
Bank and the Borrower and their respective successors and assigns.

66

 

	13.2	 	No Assignment by the Borrower. The Borrower and any other parties to the
Security Documents may not assign any rights and/or obligations under this
Agreement or any of the other Security Documents or any documents executed
pursuant to this Agreement and/or the other Security Documents.
	 
	13.3	 	Assignment by the Bank. The Bank may at any time (following adequate notice
being given to the Borrower and the other Security Parties but without the consent of
the Borrower), assign, transfer, or offer participation to any other bank or financial
institution, in whole or in part, or in any manner dispose of all or any of its rights
and/or obligations arising or accruing under this Agreement or any of the other
Security Documents or any documents executed pursuant to this Agreement and/or the
other Security Documents.
	 
	13.4	 	Documentation. If the Bank assigns, transfers or in any other manner grants
participation in respect of all or any part of its rights or benefits or transfers all or any
of its obligations as provided in this Clause 13 the Borrower undertakes, immediately
on being requested to do so by the Bank, to enter into and procure that each Security
Party enters into (at the Bank’s expense) such documents as may be necessary or
desirable to transfer to the assignee, transferee or participant all or the relevant part of
the interest of the Bank in the Security Documents and all relevant references in this
Agreement to the Bank shall thereafter be construed as a reference to the Bank and/or
assignee, transferee or participant of the Bank to the extent of their respective interests
and, in the case of a transfer of all or part of the obligations of the Bank, the Borrower
shall thereafter look only to the assignee, transferee or participant in respect of that
proportion of the obligations of the Bank under this Agreement assumed by such
assignee, transferee or participant. The Borrower hereby expressly consents to any
subsequent transfer of the rights and obligations of the Bank and undertakes that it
shall join in and execute such supplemental or substitute agreements as may be
necessary to enable the Bank to assign and/or transfer and/or grant participation in
respect of its rights and obligations to another branch or to one or more banks or
financial institutions in a syndicate or otherwise.
	 
	13.5	 	Disclosure of information. The Bank may without the consent of the Borrower,
disclose (on a confidential basis) to a prospective assignee, substitute or transferee or
to any other person who may propose entering into contractual relations with the Bank
in relation to this Agreement such information about the Borrower and the other
Security Parties as the Bank shall consider appropriate.
	 
	13.6	 	Change of Lending Branch. The Bank shall be at liberty to transfer the Loan to any
branch or branches, and upon notification of any such transfer, the word “Bank” in
this Agreement and in the other Security Documents shall mean the Bank, acting
through such branch or branches and the terms and provisions of this Agreement and
of the other Security Documents shall be construed accordingly.
	 
	13.7	 	Cumulative Remedies. The rights and remedies of the Bank contained in this
Agreement and the other Security Documents are cumulative and not
neither exclusive of each other nor of any other rights or remedies conferred by law.

67

 

	13.8	 	Waivers. No delay or omission by the Bank to exercise any right, remedy or power
vested in the Bank under this Agreement and/or the other Security Documents or by
law shall impair such right or power, or be construed as a waiver of, or as an
acquiescence in any default by the Borrower and/or any other Security Party, nor shall
any single or partial exercise by the Bank of any power, right or remedy preclude any
other or further exercise thereof or the exercise of any other power, right or remedy.
In the event of the Bank on any occasion agreeing to waive any such right, remedy or
power, or consent to any departure from the strict application of the provisions of this
Agreement or of any Security Document, such waiver shall not in any way prejudice
or affect the powers conferred upon the Bank under this Agreement and the other
Security Documents or the right of the Bank thereafter to act strictly in accordance
with the terms of this Agreement and the other Security Documents. No modification
or waiver by the Bank of any provision of this Agreement or of any of the other
Security Documents nor any consent by the Bank to any departure therefrom by any
Security Party shall be effective unless the same shall be in writing and then shall only
be effective in the specific case and for the specific purpose for which given. No
notice to or demand on any such party in any such case shall entitle such party to any
other or further notice or demand in similar or other circumstances.
	 
	13.9	 	Integration of Terms. This Agreement contains the entire agreement of the parties
and its provisions supersede the provisions of the Commitment Letter (save for the
provisions thereof which relate to fees) and any and all other prior correspondence and
oral negotiation by the parties in respect of the matters regulated by this Agreement.
	 
	13.10	 	Amendments. This Agreement and any other Security Documents shall not be
amended or varied in their respective terms by any oral agreement or representation or
in any other manner other than by an instrument in writing of even date herewith or
subsequent hereto executed by or on behalf of the parties hereto or thereto.
	 
	13.11	 	Invalidity of Terms. In the event of any provision contained in one or more of this
Agreement, the other Security Documents and any other documents executed pursuant
hereto or thereto being invalid, illegal or unenforceable in any respect under any
applicable law in any jurisdiction whatsoever, such provision shall be ineffective as to
the jurisdiction only without affecting the remaining provisions hereof or thereof. If,
however, this event becomes known to the Bank prior to the Drawdown of the
Commitment or of any part thereof the Bank shall be entitled to refuse drawdown
until this discrepancy is remedied. Where, however, the provisions of any such
applicable law may be waived, they are hereby waived by the parties hereto to the full
extent permitted by the law to the intent that this Agreement, the other Security
Documents and any other documents executed pursuant hereto or thereto shall be
deemed to be valid binding and enforceable in accordance with their respective terms.
	 
	13.12	 	Inconsistency of Terms. In the event of any inconsistency between the provisions of
this Agreement and the provisions of a Security Document the
provisions of this Agreement shall prevail.

68

 

	13.13	 	Language and genuineness of documents

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

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

	 	(a)	 	be in writing delivered personally or be first-class prepaid letter (airmail if
available), or cable or shall be served through a process server or
subject to Clause 10.7 by fax;
	 
	 	(b)	 	be deemed to have been received, subject as otherwise provided in this
Agreement or the relevant Security Document, in the case of a fax, at the time
of dispatch as per transmission report (provided that if the date of despatch is
not a business day in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business day), in the
case of a cable 24 hours after despatch and in the case of a letter when
delivered or served personally or five (5) days after it has been put into the
post; and
	 
	 	(c)	 	be sent:

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

EFG Eurobank Ergasias
S.A.

Shipping Division,

69

 

	 		 	83 Akti Miaouli, 
GR 185 38

Piraeus, Greece, F
ax No.:+30 210
4587877 
Attention: The Manager

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

	14.2	 	Confidentiality

	 	(a)	 	Each of the parties hereto agree and undertake to keep confidential any
documentation and any confidential information concerning the business,
affairs, directors or employees of the other which comes into its possession
during this Agreement and not to use any such documentation, information for
any purpose other than for which it was provided.
	 
	 	(b)	 	The Borrower acknowledges and accepts that the Bank may be required by law
or that it may be appropriate for the Bank to disclose information and deliver
documentation relating to the Borrower and the transactions and matters in
relation to this Agreement and/or the other Security Documents to
governmental or regulatory agencies and authorities.
	 
	 	(c)	 	The Borrower acknowledges and accepts that in case of occurrence of any of
the Events of Default the Bank may disclose information and deliver
documentation relating to the Borrower and the transactions and matters in
relation to this Agreement and/or the other Security Documents to third parties
to the extend that this is necessary for the enforcement or the contemplation of
enforcement of the Bank’s rights or for any other purpose for which in the
opinion of the Bank, such disclosure should be useful or appropriate for the
interests of the Bank or otherwise and the Borrower expressly authorise any
such disclosure and delivery.
	 
	 	(d)	 	The Borrower acknowledges and accepts that the Bank may be prohibited or it
may be inappropriate for the Bank to disclose information to the
Borrower by reason of law or duties of confidentiality owed or to be owed to other persons.
	 
	 	(e)	 	The Borrower hereby grants its consent to the communication by the Bank for
process in the meaning of law 2472/97 of its personal data contained in this
Agreement, the Security Documents, in the Earnings Account and the
Retention Account for onwards communication thereof to the inter-banking
database record called “Teiresias” kept and solely used by banks and financial
institutions. The Borrower is entitled at any relevant time throughout the
Security Period to revoke its consent given hereunder by written notice

70

 

	 	 	 	addressed to the Bank and the Registrar of “Teiresias A.E.” at 2, Alamanas street,
15125 Maroussi, Athens, Greece.

	15.	 	GOVERNING LAW AND JURISDICTION
	 
	15.1	 	Law. This Agreement is governed by, and shall be construed in accordance with,
English law.
	 
	15.2	 	Submission to jurisdiction. The Borrower agrees, for the benefit of each Creditor,
that any legal action or proceedings arising out of or in connection with this
Agreement against the Borrower or any of its assets may be brought in the English
courts. The Borrower irrevocably and unconditionally submits to the jurisdiction of
such courts and irrevocably designates, appoints and empowers Messrs. Saville &
Co. (attention: Mr. Richard Saville) at their office for the time being at One Carey
Lane, London, EC2V 8AE, England, to receive for it and on its behalf, service of
process issued out of the English courts in any such legal action or proceedings, who
is hereby authorised to accept such service, which shall be deemed to be good service
on the Borrower, provided, however, that the Borrower further agrees that in the
event
that (i) Messrs. Saville & Co. (or any other agent appointed by the Borrower in
substitution of Messrs. Saville & Co. and acceptable to the Bank) close or fail to
maintain a business presence in England, or (ii) the Bank, in its sole discretion, shall
determine that service of process on the said agents is not feasible or may be
insufficient under the Laws of England, then any summons, writ or other legal process
issued against 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.
	 
	 	 	The parties further agree that only the courts of England and not those of any other
State shall have jurisdiction to determine any claim which the Borrower may have against
any Creditor arising out of or in connection with this Agreement.
	 
	15.3	 	Contracts (Rights of Third Parties) Act 1999. No term of this Agreement is
enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is
not a party to this Agreement.
	 
	15.4	 	Process Agent in Greece. Mrs. Sophia Damigou, an attorney-at-law, c/o Stealth
Maritime Corp. S.A., 331 Kifissias Avenue, 145 61 Kifissia, Athens, Greece, is

71

 

	 	 	hereby appointed by the Borrower as agent to accept service (hereinafter “Process Agent”)
upon whom any judicial process in respect of proceedings in Greece may be served and any
process notice, judicial or extra-judicial request, demand for payment, payment order,
foreclosure proceedings, notarial announcement of claim, notice, request, demand or other
communication under this Agreement or any of the Security Documents. In the event that the
Process Agent (or any substitute process agent notified to the Bank in accordance with the
foregoing) cannot be found at the address specified above (or, as the case may be,
notified to the Bank), which will be conclusively proved by a deed of a process server to
the effect that the Process Agent was not found at such address, any process notice,
judicial or extra-judicial request, demand for payment, payment order, foreclosure
proceedings, notarial announcement of claim or other communication to be sent to any
Security Party may be validly notified in accordance with the relevant provisions of the
Hellenic Code on Civil Procedure.
	 
	15.5	 	Meaning of “proceedings”. In this Clause 15 “proceedings” means proceedings of any kind,
including an application for a provisional or protective measure.

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

72

 

EXECUTION PAGE

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

	 	 	 	 	 	 	 	 
	of Marshall Islands, in the presence of:	 	 	)	 	 	Attorney-in-Fact
	 
	 	 	 	 	 	 	 	 
	Witness:
	 	/s/ Sophia Damigou 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	Sophia Damigou	 	 	 	 	 	 
	Address:

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

331 Kifissias Avenue, 

145 61 Athens, Greece	 	 	 	 	 	 
	Occupation: Attorney-at-law	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	THE BANK	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED by	 	 	)	 	 	 
	Mr. Ioannis Tsirikos	 	 	)	 	 	/s/ Ioannis Tsirikos 
	 

	 	 	 	 	 	 	 	 
	Mrs. Stavroula-Sotiria Ydreou	 	 	)	 	 	Attorney-in-Fact
	for and on behalf of	 	 	)	 	 	 
	EFG EUROBANK ERGASIAS S.A.	 	 	)	 	 	 
	in the presence of:	 	 	)	 	 	/s/ Stavroula-Sotiria Ydreou 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Attorney-in-Fact
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Witness:
	 	/s/ Aristeidis D. Vourdas 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	Aristeidis D. Vourdas	 	 	 	 	 	 
	Address:

	 	13 Defteras Merarchias Street

Piraeus, Greece	 	 	 	 	 	 
	Occupation: Attorney-at-law	 	 	 	 	 	 

73

 

SCHEDULE 1

FORM OF DRAWDOWN NOTICE

(referred to in Clause 2.2)

	To: 	 	 EFG EUROBANK ERGASIAS S.A.

83 Akti Miaouli, GR

185.38 Piraeus, Greece

(the “Bank”)

[•], 2009

Re: US$37,500,000 Loan Agreement (the “Loan Agreement”) dated [•] February, 2009 made between (1)
the Bank, as lender, (2)
Stealthgas Inc., of Marshall Islands, as borrower, (the
“Borrower”).

We refer to the Loan Agreement and hereby give you notice that we wish to draw the Commitment in
the amount of $[•] (Dollars [•]) on [•], 2009. We select a first Interest Period in respect of
the Loan of [•] months/ terminating on [•], 2009. The funds should be credited to [•] [name and
number of account] [•]) with [•], New York, USA.

We confirm that:

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

74

 

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

	 	 	 	 	 
	SIGNED by

	 	 	)	 
	Mr.

	 	 	)	 
	for and on behalf of the Borrower

	 	 	)	 
	STEALTHGAS INC.

	 	 	)	 
	of Marshall Islands, in the presence of:

	 	 	)	 

	 	 	 	 	 
	 	 	 
	Witness:	 	 	 
	 	Name:  	[•] 	 	 
	 	Address: [•]
Piraeus, Greece,

Occupation: Attorney-at-law 	 	 
	 

75

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]