Document:

EXHIBIT 4.13 

Private &
Confidential

FACILITY AGREEMENT

for a

Loan of up to US$229,200,000

to

QUENTIN SHIPPING CO.

UNDINE SHIPPING CO.

and

SANDER SHIPPING CO.

provided by

THE BANKS AND FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1, Part I

Agent, Security
Agent, Account Bank
DNB NOR BANK ASA

Swap Providers

THE BANKS AND FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1, Part II

Contents

	
 

	
 

	
 

	
 

	
Clause

	
 

	
Page

	
 

	
 

	
 

	
 

	
1

	
Purpose and
definitions

	
 

	
1

	
 

	
 

	
 

	
 

	
2

	
The Total
Commitment and the Advances

	
 

	
23

	
 

	
 

	
 

	
 

	
3

	
Interest and
Interest Periods

	
 

	
25

	
 

	
 

	
 

	
 

	
4

	
Repayment and
prepayment

	
 

	
28

	
 

	
 

	
 

	
 

	
5

	
Fees, commitment
commission and expenses

	
 

	
30

	
 

	
 

	
 

	
 

	
6

	
Payments and
taxes; accounts and calculations

	
 

	
31

	
 

	
 

	
 

	
 

	
7

	
Representations
and warranties

	
 

	
34

	
 

	
 

	
 

	
 

	
8

	
Undertakings

	
 

	
39

	
 

	
 

	
 

	
 

	
9

	
Conditions

	
 

	
48

	
 

	
 

	
 

	
 

	
10

	
Events of Default

	
 

	
49

	
 

	
 

	
 

	
 

	
11

	
Indemnities

	
 

	
55

	
 

	
 

	
 

	
 

	
12

	
Unlawfulness,
increased costs and mitigation

	
 

	
57

	
 

	
 

	
 

	
 

	
13

	
Security, set-off
and pro-rata payments

	
 

	
59

	
 

	
 

	
 

	
 

	
14

	
Operating Accounts

	
 

	
61

	
 

	
 

	
 

	
 

	
15

	
Assignment,
transfer and lending office

	
 

	
62

	
 

	
 

	
 

	
 

	
16

	
Agent and Security
Agent

	
 

	
65

	
 

	
 

	
 

	
 

	
17

	
Notices and other
matters

	
 

	
74

	
 

	
 

	
 

	
 

	
18

	
Governing law and
jurisdiction

	
 

	
77

	
 

	
 

	
 

	
 

	
Schedule 1
The Banks and their Commitments

	
 

	
78

	
 

	
 

	
 

	
Schedule 2
Form of Drawdown Notice

	
 

	
81

	
 

	
 

	
 

	
Schedule 3
Documents and evidence required as conditions precedent

	
 

	
82

	
 

	
 

	
 

	
Schedule 4
Form of Transfer Certificate

	
 

	
91

	
 

	
 

	
 

	
 

	
Schedule 5
Contract Instalment Advances per Ship

	
 

	
95

	
 

	
 

	
 

	
Schedule 6
Form of Trust Deed

	
 

	
96

	
 

	
 

	
 

	
Schedule 7
Mandatory Cost formula

	
 

	
97

              THIS AGREEMENT is dated 16 August 2011 and made BETWEEN:

	
 

	
 

	
 

	
(1)

	
 

	
QUENTIN
SHIPPING CO., UNDINE SHIPPING CO. and SANDER SHIPPING CO. as joint and several
Borrowers; 

	
 

	
(2)

	
 

	
DNB NOR BANK ASA as Agent, Security Agent and
Account Bank;

	
 

	
(3)

	
 

	
THE BANKS AND
FINANCIAL INSTITUTIONS whose names and addresses are set out in schedule
1, Part II as Swap Providers; and

	
 

	
(4)

	
 

	
THE BANKS AND
FINANCIAL INSTITUTIONS whose names and addresses are set out in schedule
1, Part I as Banks.

              IT IS AGREED as follows:

	
 

	
 

	
 

	
 

	
1

	
 

	
Purpose and
definitions

	
 

	
 

	
 

	
1.1

	
 

	
Purpose

	
 

	
 

	
 

	
 

	
 

	
This Agreement sets out the terms and conditions upon and subject to
which the Banks agree, according to their several obligations, to make
available to the Borrowers, jointly and severally, a loan facility of up to
two hundred and twenty nine million two hundred thousand Dollars
($229,200,000) in twelve (12) Advances, for the purpose of pre-and
post-delivery financing or refinancing part of the construction and
acquisition cost of the Ships.

	
 

	
 

	
 

	
1.2

	
 

	
Definitions

	
 

	
 

	
 

	
 

	
 

	
 

	
In this Agreement, unless the context otherwise requires:

	
 

	
 

	
 

	
 

	
 

	
“Account Bank” means DnB NOR Bank ASA, a company incorporated
in Norway with its registered office at Stranden 21, P.O. Box 1171 Sentrum
N-0107 Oslo, Norway, acting for the purposes of this Agreement through its
branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England (or of such other
address as may last have been notified to the other parties to this Agreement
pursuant to clause 17.1.3) or such other person as may be appointed as
Account Bank by the Agent for the purposes of this Agreement and includes its
successors in title;

	
 

	
 

	
 

	
 

	
 

	
“Advance” means each borrowing of a portion of the Total
Commitment by the Borrowers or (as the context may require) the outstanding
principal amount of such borrowing at any relevant time, and it includes each
Quentin Contract Instalment Advance, the Quentin Delivery Advance, each
Undine Contract Instalment Advance, the Undine Delivery Advance, each Sander
Contract Instalment Advance and the Sander Delivery Advance, and also:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship and/or the Quentin Borrower and/or
the Quentin Tranche, it means the Quentin Contract Instalment Advances and
the Quentin Delivery Advance;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship and/or the Undine Borrower and/or the
Undine Tranche, it means the Undine Contract Instalment Advances and the
Undine Delivery Advance; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship and/or the Sander Borrower and/or the
Sander Tranche, it means the Sander Contract Instalment Advances and the
Sander Delivery Advance,

	
 

	
 

	
 

	
 

	
 

	
 

	
and “Advances” means any or all of them;

	
 

	
 

	
 

	
 

	
 

	
 

	
“Agent” means DnB NOR Bank ASA, a company incorporated in
Norway with its registered office at Stranden 21, P.O. Box 1171 Sentrum
N-0107 Oslo, Norway, acting for the purposes of this Agreement through its
branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England (or of such other
address as may last have been notified to the other parties to this Agreement
pursuant to clause 17.1.3) or such other person as may be appointed as agent
by the Banks, and the Swap Providers pursuant to clause 16.13 and
includes its successors in title;

1

	
 

	
 

	
 

	
“Applicable Accounting Principles” means the most recent and
up-to-date US GAAP at any relevant time;

	
 

	
 

	
 

	
“Applicable Fraction” means, at any time and in relation to a
Ship which is then subject to a Charterer Event or a New Charterer Event, a
fraction having (a) as its numerator the then outstanding balance of the
Tranche relating to such Ship and (b) as its denominator the then outstanding
amount of the Loan;

	
 

	
 

	
 

	
“Approved Shipbrokers” means, together, H. Clarkson and
Company Ltd of London, England, Arrow Research Ltd. of London, England,
Braemar Seascope of London, England, Simpson Spence & Young of London,
England, Maersk Brokers of London, England and Howe Robinson of London,
England and any other independent firm of shipbrokers nominated by the
Borrowers and approved in writing by the Agent in its absolute discretion
from time to time and “Approved Shipbroker” means any of them;

	
 

	
 

	
 

	
“Assigned Contract” means, at any relevant time, a Contract
which is at such time subject to a Pre-delivery Security Assignment and a
Contract shall, for the purposes of this Agreement, be deemed to be an
Assigned Contract as from whichever shall be the earlier of (a) the Drawdown
Date of the first Contract Instalment Advance to be drawn down for the Ship
to which such Contract relates and (b) the date that the Pre-delivery
Security Assignment relevant to that Ship shall have been executed in
accordance with this Agreement until the earlier of (i) the date when the
Borrowers have complied with all their obligations under clause 4.4.2
following the assignment, transfer or novation of such Contract and (ii) the
Drawdown Date of the Delivery Advance for the Ship to which such Contract
relates;

	
 

	
 

	
 

	
“Assigned Refund Guarantee” means, at any relevant time, any
Refund Guarantee which is at such time subject to a Pre-delivery Security
Assignment and a Refund Guarantee shall, for the purposes of this Agreement,
be deemed to be an Assigned Refund Guarantee as from whichever shall be the
earlier of (a) the Drawdown Date of the first Contract Instalment Advance to
be drawn down for the Ship to which such Refund Guarantee relates and (b) the
date that the Pre-delivery Security Assignment relevant to that Ship shall
have been executed in accordance with this Agreement until the earlier of (i)
the date when the Borrowers have complied with all their obligations under
clause 4.4.2 following the assignment, transfer or novation of the Contract
to which such Refund Guarantee relates or the Total Loss of the relevant Ship
and (ii) the Drawdown Date of the Delivery Advance for the Ship to which such
Refund Guarantee relates;

	
 

	
 

	
 

	
“Balloon Instalment” has, in respect of each Tranche, the
meaning ascribed thereto in clause 4.1 and “Balloon Instalments” means
any or all of them;

	
 

	
 

	
 

	
“Banking Day” means a day on which dealings in deposits in
Dollars 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, Rotterdam and New York City (or any other relevant place of payment
under clause 6);

	
 

	
 

	
 

	
“Banks” means the banks and financial institutions set out in
schedule 1 and includes their respective successors in title and Transferee
Banks and “Bank” means any of them;

	
 

	
 

	
 

	
“Basel 2 Accord” means
the “International Convergence of Capital Measurement and Capital Standards,
a Revised Framework” published by the Basel Committee on Banking Supervision
in June 2004 in the form existing on the date of this Agreement;

	
 

	
 

	
 

	
“Basel 2 Approach”
means, in relation to each Bank, either the Standardised Approach or the
relevant Internal Ratings Based Approach (each as defined in the Basel 2
Accord) adopted by such Bank (or its holding company) for the purposes of
implementing or complying with the Basel 2 Accord;

	
 

	
 

	
 

	
“Basel 2 Regulation”
means, in relation to each Bank, (a) any law or regulation implementing the
Basel 2 Accord or (b) any Basel 2 Approach adopted by such Bank;

2

	
 

	
 

	
 

	
 

	
 

	
 

	
“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 (except assets or services obtained on normal commercial terms in
the ordinary course of business), (vi) finance leases and hire purchase contracts
(other than in respect of equipment used in the ordinary course of its
business, the payments of which do not exceed the amount of $500,000 per year
per Security Party), (vii) swaps, forward exchange contracts, futures and
other derivatives (and when calculating the value of any such transaction
where the term “Borrowed Money” is used, only the marked-to-market value
shall be taken into account), (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”:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship and/or the Quentin
Tranche (or any Advance thereof), means the Quentin Borrower;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship and/or the Undine
Tranche (or any Advance thereof), means the Undine Borrower; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship and/or the Sander
Tranche (or any Advance thereof), means the Sander Borrower,

	
 

	
 

	
 

	
 

	
 

	
 

	
and “Borrowers” means any or all of them;

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
“Builder” means Sungdong Shipbuilding & Marine
Engineering Co. Ltd of 1609-2, Hwang-li, Gwangdo-myeon, Tongyoung-si,
Gyeongnam, Korea and includes its successors in title;

	
 

	
 

	
 

	
 

	
 

	
“Capital Adequacy Law” means any law or any regulation
(whether or not having the force of law, but, if not having the force of law,
with which a Bank or, as the case may be, its holding company, habitually
complies), including (without limitation) those relating to Taxation, capital
adequacy, liquidity, reserve assets, cash ratio deposits and special deposits
or other banking or monetary controls or requirements which affect the manner
in which a Bank allocates capital resources to its obligations hereunder
(including, without limitation, those resulting from the implementation or
application of or compliance with the Basel 2 Accord or any Basel 2
Regulation);

	
 

	
 

	
 

	
 

	
 

	
“Casualty Amount” means, in relation to each Ship, two
million Dollars ($2,000,000) or the equivalent in any other currency;

	
 

	
 

	
 

	
 

	
 

	
“Charter” means:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Charter;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Charter; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Charter,

	
 

	
 

	
 

	
 

	
 

	
 

	
and “Charters” means any or all of them;

	
 

	
 

	
 

	
 

	
 

	
“Charter Assignment” means:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Charter Assignment;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Charter Assignment; or

3

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Charter Assignment,

	
 

	
 

	
 

	
and “Charter Assignments” means any or all of them;

	
 

	
 

	
 

	
“Charterer” means either (i) Greencompass Marine S.A. of 2
Floor MMG Tower, East 53rd Street, Panama, Republic of Panama or
(ii) if clause 78 of the Charter applies, Evergreen Marine Corporation
(Taiwan) Ltd of Evergreen Building No. 163, Sec., Hsin-nan Road, Luchu,
Taoyuan County, Taiwan, Republic of China, and includes in each case its
respective successors in title;

	
 

	
 

	
 

	
“Charterer Event” means, in relation to a Ship, the termination,
cancellation, rescission or repudiation for any reason whatsoever of the
Charter for that Ship unless, within 90 days from such event the relevant
Borrower has entered into a Qualifying Charter and within 30 days from the
entry into the Qualifying Charter that Ship has been delivered for service
under such Qualifying Charter and the Borrowers have delivered to the Agent
such Qualifying Charter duly executed together with such executed documents
and evidence in respect of such Qualifying Charter (including a charter
assignment of the same, as the Agent may require) and such other documents
and evidence, as are specified in clause 8.1.16 in respect of charterparties
or other contracts of employment in respect of the Ships; 

	
 

	
 

	
 

	
“Ciel Management” means Ciel Shipmanagement S.A. of 80 Broad
Street, Republic of Liberia and it includes its successors in title; 

	
 

	
 

	
 

	
“Classification” means, in relation to each Ship, the highest
class available for a vessel of her type and her specification as at her
Delivery, with the relevant Classification Society or such other
classification as the Agent shall, at the request of a Borrower, have agreed
in writing shall be treated as the Classification in relation to such
Borrower’s Ship for the purposes of the relevant Ship Security Documents;

	
 

	
 

	
 

	
“Classification Society” means, in relation to each Ship,
such classification society (being a member of the International Association
of Classification Societies (“IACS”) or any successor organisation)
which the Agent shall at the request of the Borrower owning such Ship have
agreed in writing shall be treated as the Classification Society in relation
to such Ship for the purposes of the relevant Ship Security Documents;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Commercial Parties” means, together, the Builder, the
Charterer and the Refund Guarantor and “Commercial Party” means any of them;

	
 

	
 

	
 

	
“Commitment” means, in relation to each Bank, the amount set
out opposite its name in the column headed “Commitment” in schedule 1
and/or, in the case of a Transferee Bank, the amount transferred as specified
in the relevant Transfer Certificate, as reduced in each case by any relevant
term of this Agreement;

	
 

	
 

	
 

	
“Compliance Certificate”
means each certificate received or (as the context may require) to be
received by the Agent pursuant to clause 5.1 of the Corporate Guarantee in
the form set out in the schedule to the Corporate Guarantee;

	
 

	
 

	
 

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

	
 

	
 

	
 

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

4

	
 

	
 

	
 

	
 

	
“Contract” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Contract;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Contract;
or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Contract,

	
 

	
 

	
 

	
 

	
and “Contracts” means any or all of them;

	
 

	
 

	
 

	
“Contract Assignment Consent and Acknowledgement” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Contract
Assignment Consent and Acknowledgement;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Contract
Assignment Consent and Acknowledgement; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Contract
Assignment Consent and Acknowledgement,

	
 

	
 

	
 

	
 

	
and “Contract Assignment Consents and Acknowledgements” means any
or all of them;

	
 

	
 

	
 

	
“Contract Instalment Advance” means each Quentin Contract
Instalment Advance, each Undine Contract Instalment Advance and each Sander
Contract Instalment Advance, and also it means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Contract Instalment
Advances;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Contract Instalment
Advances; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Contract Instalment
Advances,

	
 

	
 

	
 

	
 

	
and “Contract Instalment Advances” means any or all of them;

	
 

	
 

	
 

	
“Contract Price” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Contract
Price;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Contract
Price; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Contract
Price,

	
 

	
 

	
 

	
 

	
and “Contract Prices” means any or all of them;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Corporate Guarantee” means the corporate guarantee
executed or (as the context may require) to be executed by the Corporate
Guarantor in favour of the Security Agent in a form previously agreed between
the Agent and the Borrowers;

	
 

	
 

	
 

	
“Corporate Guarantor” means Costamare Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and
includes its successors in title;

	
 

	
 

	
 

	
 

	
“Costamare Shipping” means Costamare Shipping Company S.A., a
company incorporated under the laws of Panama and having a place of business
at 60 Zephyrou Street & Syngrou Avenue, 175 64 Athens, Greece and it
includes its successors in title; 

5

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Deed of Covenant” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Deed of
Covenant;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Deed of
Covenant; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Deed of
Covenant,

	
 

	
 

	
 

	
 

	
and “Deeds of Covenant” means any or all of them;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Delivery” means, in relation to each Ship, the delivery of
such Ship from the Builder to the relevant Borrower pursuant to the relevant
Contract;

	
 

	
 

	
 

	
“Delivery Advance”:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship and/or the Quentin
Tranche, means the Quentin Delivery Advance;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship and/or the Undine
Tranche, means the Undine Delivery Advance; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship and/or the Sander
Tranche, means the Sander Delivery Advance,

	
 

	
 

	
 

	
 

	
and “Delivery Advances” means any or all of them;

	
 

	
 

	
 

	
“Delivery Date” means, in relation to each Ship, the date on
which the Delivery of such Ship occurs;

	
 

	
 

	
 

	
“Designated Transaction”
means a transaction which is entered into by the Borrowers with a Swap
Provider pursuant to the relevant Master Swap Agreement as contemplated by
clause 2.9;

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Drawdown Date” means, in relation to each Advance, any date,
being a Banking Day falling during the Drawdown Period for such Advance, on
which the relevant Advance is, or is to be, made available;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Drawdown Period” means, in relation to each Advance, the
period commencing on the date of this Agreement and ending on the earlier of:

	
 

	
 

	
 

	
(a)

	
the Final Availability Date for the Tranche of which such Advance
forms part; or

6

	
 

	
 

	
 

	
 

	
(b)

	
the date on which the relevant Advance has been drawn down; or

	
 

	
 

	
 

	
 

	
(c)

	
the date when the Total Commitment is reduced to zero pursuant to
clauses 10.2 or 12; or 

	
 

	
 

	
 

	
 

	
(d)

	
(only in relation to each Delivery Advance) the Delivery Date of the
Ship relevant to such Delivery Advance; or

	
 

	
 

	
 

	
 

	
(e)

	
the date on which a Tranche is cancelled by the Borrowers pursuant to
clause 4.3;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Environmental Approval” means any consent, authorisation,
licence or approval of any governmental or public body or authorities or
courts applicable to any 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 such Ship required under any Environmental Law;

	
 

	
 

	
 

	
“Environmental Claim” means:

	
 

	
 

	
 

	
(a)

	
any and all enforcement, clean-up, removal or other governmental or
regulatory actions or orders or claims instituted or made pursuant to any
Environmental Law or any Environmental Approval, in respect of an amount or
(as the case may be) the cost of which is, in excess of two million Dollars
($2,000,000); and/or 

	
 

	
 

	
 

	
 

	
(b)

	
any claim made by any third party in excess of two million Dollars
($2,000,000) relating to damage, contribution, loss or injury, 

	
 

	
 

	
 

	
 

	
resulting in any such case, from any actual or threatened emission,
spill, release or discharge of a Pollutant from any Ship;

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Fee Letter” means each letter of even date herewith made
between (inter alios) the Borrowers and the Agent in respect of certain of
the fees payable under clause 5.1 and “Fee Letters” means any or all of them;

7

	
 

	
 

	
 

	
 

	
“Final Availability Date” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Tranche and each Advance thereof, 14
January 2014, if and provided that (i) the Quentin Refund Guarantee continues
to remain valid and effective from its issue date until that date and (ii)
the Quentin Charter remains in full force and effect;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Tranche and each Advance thereof, 27 May
2014, if and provided that (i) the Undine Refund Guarantee continues to
remain valid and effective from its issue date until that date and (ii) the
Undine Charter remains in full force and effect; and

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Tranche and each Advance thereof, 27 March
2014, if and provided that (i) the Sander Refund Guarantee continues to
remain valid and effective from its issue date until that date and (ii) the
Sander Charter remains in full force and effect;

	
 

	
 

	
 

	
 

	
“Flag State” means, in relation to each Ship, any of Greece,
Liberia or Hong Kong or such other state or territory designated in writing
by the Agent (acting on the instructions of the Majority Banks) at the
request of the Borrower owning such Ship, as being the “Flag State” of such
Borrower’s Ship for the purposes of the relevant Ship Security Documents;

	
 

	
 

	
 

	
 

	
“General Assignment” means:

	
 

	
 

	
 

	
(d)

	
in relation to the Quentin Ship, the Quentin General Assignment;

	
 

	
 

	
 

	
 

	
(e)

	
in relation to the Undine Ship, the Undine General Assignment; or

	
 

	
 

	
 

	
 

	
(f)

	
in relation to the Sander Ship, the Sander General Assignment,

	
 

	
 

	
 

	
 

	
and “General Assignments” means any or all of them;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Group” means, together, the Corporate Guarantor and its
Subsidiaries from time to time (including, for the avoidance of doubt, the
Borrowers) and “member of the Group” shall be construed
accordingly;

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Interest Period” means, in relation to an Advance or (as the
case may be) Tranche, each period for the calculation of interest in respect
of such Advance or (as the case may be) Tranche, ascertained in accordance
with clauses 3.2 and 3.3; 

8

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Konstantakopoulos Family” means, together, each of the
following:

	
 

	
 

	
 

	
(a)

	
Mr Vasileios Konstantakopoulos;

	
 

	
 

	
 

	
 

	
(b)

	
Mr Kostantinos V. Kostantakopoulos; 

	
 

	
 

	
 

	
 

	
(c)

	
Mr Achillefs V. Kostantakopoulos; 

	
 

	
 

	
 

	
 

	
(d)

	
Mr Christos V. Kostantakopoulos; 

	
 

	
 

	
 

	
 

	
(e)

	
all the lineal descendants in direct line
of any of the said Messrs. Vasileios Konstantakopoulos, Achillefs V.
Kostantakopoulos, Kostantinos V. Kostantakopoulos and Christos V.
Konstantakopoulos; 

	
 

	
 

	
 

	
 

	
(f)

	
a husband or wife, or former husband or wife, or widower or widow of
any of the above persons; 

	
 

	
 

	
 

	
 

	
(g)

	
the estates, trusts, foundations or legal representatives of any of
the above persons (whether controlled by any of them or being the
beneficiaries of any of them); and

	
 

	
 

	
 

	
 

	
(h)

	
each company (other than a member of the Borrower’s Group) legally or
beneficially owned or (as the case may be) controlled by one or more of the
persons or entities which would fall within paragraphs (a) to (f) above,

	
 

	
 

	
 

	
 

	
and each one of the above shall be referred to as “a member
of the Konstantakopoulos Family”;

	
 

	
 

	
 

	
“LIBOR” means in relation to a particular period:

	
 

	
 

	
 

	
(a)

	
the rate for deposits of the relevant currency for a period
equivalent to such period at or about 11:00 a.m. on the Quotation Date for
such period as displayed on Reuters page LIBOR 01 (British Bankers’
Association Interest Settlement Rates) (or such other page as may replace
such page LIBOR 01 on such system or on any other system of the information vendor
for the time being designated by the British Bankers’ Association to
calculate the BBA Interest Settlement Rate (as defined in the British
Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS”
terms) applicable at the relevant time)); or

	
 

	
 

	
 

	
 

	
(b)

	
provided that if on such date no such rate is so displayed, LIBOR for
such period shall be the rate quoted to the Agent by the Reference Bank at
the request of the Agent, as the Reference Bank’s offered rate for deposits
of the relevant currency in an amount approximately equal to the amount in
relation to which LIBOR is to be determined for a period equivalent to such
period to prime banks in the London Interbank Market at or about 11:00 a.m.
on the Quotation Date for such period;

	
 

	
 

	
 

	
 

	
“Loan” means the aggregate principal amount owing to the
Banks under this Agreement at any relevant time;

	
 

	
 

	
 

	
 

	
“Majority Banks” means, at any relevant time, Banks (a) the
aggregate of whose Contributions exceeds sixty six point six seven per cent
(66.67%) of the Loan or (b) (if no principal amounts are outstanding under
this Agreement by way of Advances) the aggregate of 

9

	
 

	
 

	
 

	
 

	
whose Commitments exceeds sixty six point six seven per cent (66.67%)
of the Total Commitment;

	
 

	
 

	
 

	
“Management Agreement” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, each Quentin
Management Agreement;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, each Undine Management
Agreement; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, each Sander Management
Agreement,

	
 

	
 

	
 

	
 

	
and “Management Agreements” means any or all of them;

	
 

	
 

	
 

	
“Manager” means, in relation to a Ship: 

	
 

	
 

	
 

	
(a)

	
any one (or more) of Costamare Shipping, Ciel Management or Shanghai
Costamare; and/or 

	
 

	
 

	
 

	
 

	
(b)

	
any other company which the Agent may (acting on the instructions of
the Majority Banks) approve from time to time as the manager of that Ship,

	
 

	
 

	
 

	
 

	
provided such person has executed a Manager’s Undertaking in relation
to that Ship in accordance with clause 8.1.18 and the Borrowers are in
compliance with such clause on or prior to its appointment, and “Managers”
shall mean any or all of them; 

	
 

	
 

	
 

	
 

	
“Manager’s Undertakings” means, collectively, each of the
manager’s undertakings executed or (as the context may require) to be
executed by any Manager in favour of the Security Agent in respect of each of
the Ships each in such form as the Agent may require in its reasonable
discretion and, singly, each a “Manager’s Undertaking”; 

	
 

	
 

	
 

	
“Mandatory Cost” means,
in relation to any period, a percentage calculated by the Agent for such period
at an annual rate determined by the application of the formula set out in
schedule 7;

	
 

	
 

	
 

	
“Margin” means, in relation to each Tranche two point four
zero per cent (2.40%) per annum; 

	
 

	
 

	
 

	
“Master Swap Agreement” means the agreement made or (as the
context may require) to be made between a Swap Provider and the Borrowers,
comprising an ISDA Master Agreement (including its schedule thereto) in a
form previously agreed between the Agent and the Borrowers and includes any
Designated Transactions from time to time entered into thereunder and any
Confirmations from time to time exchanged thereunder and governed thereby and
“Master
Swap Agreements” means any and all of them;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Mortgage” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Mortgage;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Mortgage;
or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Mortgage,

10

	
 

	
 

	
 

	
 

	
and “Mortgages” means any or all of them;

	
 

	
 

	
 

	
“Mortgaged Ship” means, at any relevant time, any Ship which
is at such time subject to a Mortgage and/or the Earnings, Insurances and
Requisition Compensation of which are subject to an Encumbrance pursuant to
the relevant Ship Security Documents and a Ship shall, for the purposes of
this Agreement, be deemed to be a Mortgaged Ship as from whichever shall be
the earlier of (a) the Drawdown Date of the Delivery Advance relating to that
Ship and (b) the date that the Mortgage of that Ship shall have been executed
and registered in accordance with this Agreement until whichever shall be the
earlier of (i) the payment in full of the amount required to be paid by the
Borrowers pursuant to clause 4.4 following the sale or Total Loss of
such Ship and (ii) the date on which all moneys owing under the Security
Documents have been repaid in full;

	
 

	
 

	
 

	
“New Charterer” means, in relation to a Qualifying Charter
for a Ship, the charterer of that Ship under such Qualifying Charter and it
includes its successors in title;

	
 

	
 

	
 

	
“New Charterer Event” means the termination, cancellation,
rescission or repudiation for any reason whatsoever of a Qualifying Charter
in respect of a Ship, unless within 90 days from such event, the relevant
Borrower has entered into another Qualifying Charter and within 30 days from
the entry into of such other Qualifying Charter that Ship has been delivered
for service under such other Qualifying Charter and the Borrowers have
delivered to the Agent such other Qualifying Charter duly executed together
with such executed documents and evidence in respect of such other Qualifying
Charter (including a charter assignment of the same, as the Agent may require)
and such other documents and evidence, as are specified in clause 8.1.16 in
respect of charterparties or other contracts of employment in respect of the
Ships;

	
 

	
 

	
 

	
“Operating Account” means: 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin Operating
Account;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine Operating
Account; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander Operating
Account,

	
 

	
 

	
 

	
 

	
and “Operating Accounts” means any or all of them;

	
 

	
 

	
 

	
“Operating Account Assignment” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Operating Account, the
Quentin Operating Account Assignment;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Operating Account, the
Undine Operating Account Assignment; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Operating Account, the
Sander Operating Account Assignment,

	
 

	
 

	
 

	
 

	
and “Operating Account Assignments” means any or all of
them;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Permitted Encumbrance” means:

	
 

	
 

	
 

	
(a)

	
any Encumbrance in favour of the Security Agent and/or any of the
other Creditors created pursuant to the Security Documents; 

	
 

	
 

	
 

	
 

	
(b)

	
Permitted Liens; 

11

	
 

	
 

	
 

	
 

	
(c)

	
any Encumbrance over goods and products of a Borrower, or documents
of title to goods and products of the Borrower, arising in the ordinary
course of trading in connection with letters of credit and similar
transactions where such Encumbrance secures only Indebtedness representing
the acquisition cost or selling price (and amounts incidental thereto) of
such goods and products required to be paid within 180 days after the date
upon which such Indebtedness was first incurred; 

	
 

	
 

	
 

	
 

	
(d)

	
any Encumbrance arising by operation of law or which arises pursuant
to any order of attachment, distraint or similar legal process arising in
connection with court proceedings provided that the execution or other
enforcement thereof is effectively stayed and the claims served thereby are
being contested at the time in good faith by appropriate proceedings (and for
the payment of which adequate reserves have been provided); and

	
 

	
 

	
 

	
 

	
(e)

	
any liens arising in the ordinary course of trading by operation of
law in respect of obligations which are not overdue or which are being
contested in good faith by appropriate proceedings (and for the payment of
which adequate reserves have been provided);

	
 

	
 

	
 

	
 

	
“Permitted Liens” means, in relation to each Ship;

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
(b)

	
any lien on that Ship for salvage; and

	
 

	
 

	
 

	
 

	
(c)

	
any ship repairer’s or outfitter’s possessory lien on that Ship for a
sum not (except with the prior written consent of the Agent) exceeding the
Casualty Amount for that Ship;

	
 

	
 

	
 

	
 

	
“Pollutant” means and includes oil and its products, any
other polluting, toxic or hazardous substance and any other substance whose
release into the environment is regulated or penalised by Environmental Laws;

	
 

	
 

	
 

	
“Pre-delivery Security Assignment” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, the Quentin
Pre-delivery Security Assignment;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, the Undine
Pre-delivery Security Assignment; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, the Sander
Pre-delivery Security Assignment,

	
 

	
 

	
 

	
 

	
and “Pre-delivery Security Assignments” means any or all of them;

	
 

	
 

	
 

	
“Qualifying Charter” means, in relation to a Ship any
charterparty in respect of that Ship (other than the Charter for that Ship)
entered by the relevant Borrower and which is:

	
 

	
 

	
 

	
(a)

	
with such charterer (which is not a Related Company of the Corporate
Guarantor);

	
 

	
 

	
 

	
 

	
(b)

	
providing for such charterhire and tenor; and

	
 

	
 

	
 

	
 

	
(c)

	
otherwise on such other terms and conditions, 

	
 

	
 

	
 

	
 

	
as are acceptable in all respects to the Agent (acting on the
instructions of the Majority Banks in their absolute discretion);

	
 

	
 

	
 

	
“Quentin Borrower” means Quentin Shipping Co. of
80 Broad Street, Monrovia, Liberia and includes its successors in title;

	
 

	
 

	
 

	
“Quentin Charter” means the time charterparty dated 30 March
2011 in respect of the Quentin Ship made between the Charterer and the
Quentin Borrower, and as the same may be further amended, supplemented and/or
novated from time to time;

12

	
 

	
 

	
 

	
“Quentin Charter Assignment” means the specific assignment of
the Quentin Charter executed or (as the context may require) to be executed
by the Quentin Borrower in favour of the Security Agent in a form previously
agreed between the Agent and the Borrowers;

	
 

	
 

	
 

	
“Quentin Contract” means the shipbuilding contract dated 20
April 2011 made between the Builder and the Quentin Borrower, as may be
amended and supplemented from time to time, relating to the construction and
sale by the Builder, and the purchase by the Quentin Borrower, of the Quentin
Ship;

	
 

	
 

	
 

	
“Quentin Contract Assignment Consent and Acknowledgement”
means the acknowledgement of notice of, and consent to, the assignment in
respect of the Quentin Contract given or (as the context may require) to be
given in the form scheduled to the Quentin Pre-delivery Security Assignment;

	
 

	
 

	
 

	
“Quentin Contract Instalment Advance” means, in relation to
the Quentin Ship, each of the three (3) Advances of the Total Commitment, each
in the maximum amount in Dollars specified in the second column of schedule 5
opposite the name of the relevant Advance and each made or (as the context
may require) to be made to finance in part or re-finance in part (as the case
may be) the payment of an instalment of the Quentin Contract Price falling
due before the Delivery Date for the Quentin Ship at the time specified in
the third column of schedule 5 opposite the relevant Advance, and “Quentin
Contract Instalment Advances” means any or all of them;

	
 

	
 

	
 

	
“Quentin Contract Price” means the purchase price for the
Quentin Ship under the Quentin Contract, being ninety five million five
hundred thousand Dollars ($95,500,000) or such other lesser sum in Dollars as
may be payable as the purchase price for the Quentin Ship by the Quentin
Borrower to the Builder pursuant to the Quentin Contract;

	
 

	
 

	
 

	
“Quentin Deed of Covenant” means the deed of covenant and/or
(as the case may be) the general assignment collateral to the Quentin
Mortgage executed or (as the context may require) to be executed by the
Quentin Borrower in favour of the Security Agent and/or any of the other
Creditors in such form as the Agent may reasonably require;

	
 

	
 

	
 

	
“Quentin Delivery Advance” means an Advance of up to
$53,480,000 made or (as the context may require) to be made available to the
Borrowers on the Delivery Date of the Quentin Ship for the purpose of
financing part of the construction and acquisition cost of the Quentin Ship
by the Quentin Borrower pursuant to the Quentin Contract;

	
 

	
 

	
 

	
“Quentin General Assignment” means the specific assignment of
the Earnings, Insurances and Requisition Compensation for the Quentin Ship
executed or (as the context may require) to be executed by the Quentin
Borrower in favour of the Security Agent in such form as the Agent may
require in its reasonable discretion;

	
 

	
 

	
 

	
“Quentin Management Agreement” means each agreement made or
(as the context may require) to be made between the Quentin Borrower and any
Manager in the Standard Form or, if in any other form, in a form acceptable
to the Agent (acting on the instructions of the Majority Banks), providing (inter alia)
for that Manager to carry out the commercial and/or the technical management
of the Quentin Ship;

	
 

	
 

	
 

	
“Quentin Mortgage” means the first priority or (as the case
may be) preferred mortgage of the Quentin Ship executed or (as the context
may require) to be executed by the Quentin Borrower in favour of the Security
Agent and/or any of the other Creditors in such form as the Agent may require
in its reasonable discretion;

	
 

	
 

	
 

	
“Quentin Operating Account” means an interest bearing Dollar
account of the Quentin Borrower opened or (as the context may require) to be
opened with the Account Bank and includes any sub-accounts thereof;

	
 

	
 

	
 

	
“Quentin Operating Account Assignment” means the first
priority assignment of the Quentin Operating Account executed or (as the
context may require) to be executed by the Quentin 

13

	
 

	
 

	
 

	
 

	
Borrower in favour of the Security Agent in a form previously agreed
between the Agent and the Borrowers;

	
 

	
 

	
 

	
“Quentin Pre-delivery Security Assignment” means the
assignment of the Quentin Contract and the Quentin Refund Guarantee executed
or (as the context may require) to be executed by the Quentin Borrower in
favour of the Security Agent in a form previously agreed between the Agent
and the Borrowers;

	
 

	
 

	
 

	
“Quentin Refund Guarantee” means each letter of guarantee
issued or (as the context may require) to be issued by the Refund Guarantor
in favour of the Quentin Borrower in respect of the Builder’s obligations
under the Quentin Contract, each in the form prescribed in the Quentin
Contract, and any further guarantee(s) to be issued by the Refund Guarantor
in respect of such obligations pursuant to any agreement supplemental to the Quentin
Contract, and any extensions, renewals or replacements thereto or thereof;

	
 

	
 

	
 

	
“Quentin Refund Guarantee Assignment Consent and Acknowledgement”
means, in relation to each Quentin Refund Guarantee, an acknowledgement of
notice of, and consent to, the assignment in respect of that Quentin Refund
Guarantee given or (as the context may require) to be given by the Refund
Guarantor in the form scheduled to the Quentin Pre-delivery Security
Assignment and “Quentin Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;

	
 

	
 

	
 

	
“Quentin Ship” means the approximately 9,000 teu container
ship known on the date of this Agreement as Hull No. S4020 at the Builder’s
yard, to be constructed and sold by the Builder to the Quentin Borrower
pursuant to the Quentin Contract and to be registered on its Delivery Date in
the ownership of the Quentin Borrower through the relevant Registry under the
laws and flag of the relevant Flag State;

	
 

	
 

	
 

	
“Quentin Tranche” means a tranche of the Total Commitment and
the Loan of up to the lesser or (i) $76,400,000 and (ii) eighty per cent
(80%) of the Contract Price of the Quentin Ship, comprising the three (3)
Quentin Contract Instalment Advances and the Quentin Delivery Advance, or (as
the context may require) the aggregate principal amount of such Tranche
outstanding at any relevant time;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Reference Bank” means the Agent;

	
 

	
 

	
 

	
“Refund Guarantee” means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, each Quentin Refund
Guarantee;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, each Undine Refund
Guarantee; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, each Sander Refund
Guarantee,

	
 

	
 

	
 

	
 

	
and “Refund Guarantees” means any or all of them;

	
 

	
 

	
 

	
“Refund Guarantee Assignment Consent and Acknowledgement”
means:

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, each Quentin Refund
Guarantee Assignment Consent and Acknowledgement;

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, each Undine Refund
Guarantee Assignment Consent and Acknowledgement; or

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, each Sander Refund
Guarantee Assignment Consent and Acknowledgement,

14

	
 

	
 

	
 

	
and “Refund Guarantee Assignment Consents and Acknowledgements”
means any or all of them;

	
 

	
 

	
 

	
“Refund Guarantor” means The Export-Import Bank of Korea, of
16-1, Yoido-Dong, Yeongdeungpo-Gu, Seoul 150-996, Korea or such other entity
as the Agent (acting on the prior consent of all the Banks) may approve in
writing, and it includes its successors in title; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Repayment Dates” means, subject to clause 6.3 and in
respect of the Tranche for each Ship, the date falling three (3) months after
the Drawdown Date of the Delivery Advance for such Ship and each of the dates
falling at three (3) monthly intervals after such date up to and including
the date falling eighty four (84) months after the Drawdown Date of the
Delivery Advance for such Ship;

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Sander Borrower” means Sander Shipping Co. of 80
Broad Street, Monrovia, Liberia and includes its successors in title;

	
 

	
 

	
 

	
“Sander Charter” means the time charterparty dated 30 March
2011 in respect of the Sander Ship made between the Charterer and the Sander
Borrower, and as the same may be further amended, supplemented and/or novated
from time to time;

	
 

	
 

	
 

	
“Sander Charter Assignment” means the specific assignment of
the Sander Charter executed or (as the context may require) to be executed by
the Sander Borrower in favour of the Security Agent in a form previously
agreed between the Agent and the Borrowers;

	
 

	
 

	
 

	
“Sander Contract” means the shipbuilding contract dated 20
April 2011 made between the Builder and the Sander Borrower, as may be
amended and supplemented from time to time, relating to the construction and
sale by the Builder, and the purchase by the Sander Borrower, of the Sander
Ship;

	
 

	
 

	
 

	
“Sander Contract Assignment Consent and Acknowledgement”
means the acknowledgement of notice of, and consent to, the assignment in
respect of the Sander Contract given or (as the context may require) to be
given in the form scheduled to the Sander Pre-delivery Security Assignment;

	
 

	
 

	
 

	
“Sander Contract Instalment Advance” means, in relation to
the Sander Ship, each of the three (3) Advances of the Total Commitment, each
in the maximum amount in Dollars specified in the second column of schedule 5
opposite the name of the relevant Advance and each made or (as the context
may require) to be made to finance or re-finance in part (as the case may be)
the payment of an instalment of the Sander Contract Price falling due before
the Delivery Date for the Sander Ship at the time specified in the third
column of schedule 5 opposite the relevant Advance, and “Sander Contract Instalment Advances”
means any or all of them;

	
 

	
 

	
 

	
“Sander Contract Price” means the purchase price for the
Sander Ship under the Sander Contract, being ninety five million five hundred
thousand Dollars ($95,500,000) or such other 

15

	
 

	
 

	
 

	
lesser sum in Dollars as may be payable as the purchase price for the
Sander Ship by the Sander Borrower to the Builder pursuant to the Sander
Contract;

	
 

	
 

	
 

	
“Sander Deed of Covenant” means the deed of covenant and/or
(as the case may be) the general assignment collateral to the Sander Mortgage
executed or (as the context may require) to be executed by the Sander
Borrower in favour of the Security Agent and/or any of the other Creditors in
such form as the Agent may reasonably require;

	
 

	
 

	
 

	
“Sander Delivery Advance” means an Advance of up to
$53,480,000 made or (as the context may require) to be made available to the
Borrowers on the Delivery Date of the Sander Ship for the purpose of
financing part of the construction and acquisition cost of the Sander Ship by
the Sander Borrower pursuant to the Sander Contract;

	
 

	
 

	
 

	
“Sander General Assignment” means the specific assignment of
the Earnings, Insurances and Requisition Compensation for the Sander Ship
executed or (as the context may require) to be executed by the Sander
Borrower in favour of the Security Agent in such form as the Agent may
require in its reasonable discretion;

	
 

	
 

	
 

	
“Sander Management Agreement” means each agreement made or
(as the context may require) to be made between the Sander Borrower and any
Manager in the Standard Form or, if in any other form, in a form acceptable
to the Agent (acting on the instructions of the Majority Banks), providing (inter alia)
for that Manager to carry out the commercial and/or the technical management
of the Sander Ship;

	
 

	
 

	
 

	
“Sander Mortgage” means the first priority or (as the case
may be) preferred mortgage of the Sander Ship executed or (as the context may
require) to be executed by the Sander Borrower in favour of the Security
Agent and/or any of the other Creditors in such form as the Agent may require
in its reasonable discretion;

	
 

	
 

	
 

	
“Sander Operating Account” means an interest bearing Dollar
account of the Sander Borrower opened or (as the context may require) to be
opened with the Account Bank and includes any sub-accounts thereof;

	
 

	
 

	
 

	
“Sander Operating Account Assignment” means the first
priority assignment of the Sander Operating Account executed or (as the
context may require) to be executed by the Sander Borrower in favour of the
Security Agent in a form previously agreed between the Agent and the
Borrowers;

	
 

	
 

	
 

	
“Sander Pre-delivery Security Assignment” means the assignment
of the Sander Contract and the Sander Refund Guarantee executed or (as the
context may require) to be executed by the Sander Borrower in favour of the
Security Agent in a form previously agreed between the Agent and the
Borrowers;

	
 

	
 

	
 

	
“Sander Refund Guarantee” means each letter of guarantee
issued or (as the context may require) to be issued by the Refund Guarantor
in favour of the Sander Borrower in respect of the Builder’s obligations
under the Sander Contract, each in the form prescribed in the Sander
Contract, and any further guarantee(s) to be issued by the Refund Guarantor
in respect of such obligations pursuant to any agreement supplemental to the
Sander Contract, and any extensions, renewals or replacements thereto or
thereof;

	
 

	
 

	
 

	
“Sander Refund Guarantee Assignment Consent and Acknowledgement”
means, in relation to each Sander Refund Guarantee, an acknowledgement of
notice of, and consent to, the assignment in respect of that Sander Refund
Guarantee given or (as the context may require) to be given by the Refund
Guarantor in the form scheduled to the Sander Pre-delivery Security
Assignment and “Sander Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;

	
 

	
 

	
 

	
“Sander Ship” means the approximately 9,000 teu container
ship known on the date of this Agreement as Hull No. S4022 at the Builder’s
yard, to be constructed and sold by the Builder to the Sander Borrower
pursuant to the Sander Contract and to be registered on its Delivery 

16

	
 

	
 

	
 

	
Date in the ownership of the Sander Borrower through the relevant
Registry under the laws and flag of the relevant Flag State;

	
 

	
 

	
 

	
“Sander Tranche” means a tranche of the Total Commitment and
the Loan of up to the lesser or (i) $76,400,000 and (ii) eighty per cent
(80%) of the Contract Price of the Sander Ship, comprising the three (3)
Sander Contract Instalment Advances and the Sander Delivery Advance, or (as
the context may require) the aggregate principal amount of such Tranche
outstanding at any relevant time;

	
 

	
 

	
 

	
“Security Agent” means DnB NOR Bank ASA, a company
incorporated in Norway with its registered office at Stranden 21, P.O. Box
1171 Sentrum N-0107 Oslo, Norway, acting for the purposes of this Agreement
through its branch at 20 St. Dunstan’s Hill, London EC3R 8HY, England (or of
such other address as may last have been notified to the other parties to
this Agreement pursuant to clause 17.1.3) or such other person as may be
appointed as security agent and trustee by the Banks, the Agent and the Swap
Providers pursuant to clause 16.14 and includes its successors in title;

	
 

	
 

	
 

	
“Security Documents” means this Agreement, the Master Swap
Agreements, the Fee Letters, the Mortgages, the Deeds of Covenant, the
General Assignments, the Charter Assignments, the Operating Account Assignments,
the Corporate Guarantee, the Swap Assignments and the Pre-delivery Security
Assignments and any other documents as may have been or shall from time to
time after the date of this Agreement be executed to guarantee and/or secure
all or any part of the Loan, interest thereon and other moneys from time to
time owing by the Borrowers and/or any other Security Party pursuant to this
Agreement and/or the Master Swap Agreements or any other Security Documents
(whether or not any such document also secures moneys from time to time owing
pursuant to any other document or agreement) (other than the Manager’s
Undertakings);

	
 

	
 

	
 

	
“Security Party” means the Borrowers, the Corporate Guarantor
or any other person who may at any time be a party to any of the Security
Documents (other than the Creditors, any Manager and the Commercial Parties);

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Security Requirement” means, in relation to a Ship, the
amount in Dollars (as certified by the Agent whose certificate shall, in the
absence of manifest error, be conclusive and binding on the Borrowers and the
other Creditors) which is at any relevant time one hundred and twenty five
per cent (125%) of the aggregate of (a) the Tranche outstanding for such Ship
at that time plus (b) the Applicable Fraction (relevant to such Ship) of the
Swap Exposure at that time;

	
 

	
 

	
 

	
“Security Value” means, in relation to a Ship the amount in Dollars (as certified by the Agent whose
certificate shall, in the absence of manifest error, be conclusive and
binding on the Borrowers and the other Creditors) which is, at any relevant
time, the aggregate of (a) the market value of such Ship as most recently
determined in accordance with clause 8.2.2 and (b) the market value of any
additional security for the time being actually provided to the Creditors or
any of them pursuant to clause 8.2.1(b) in connection with the Security
Requirement relating to such Ship;

	
 

	
 

	
 

	
“Shanghai Costamare” means Shanghai Costamare Ship Management
Co., Ltd., a company incorporated in the People’s Republic of China and
having its principal place of business at 38F Sino Life Tower, 707
Zhangyanglu, Pudong New District, Shangai, People’s Republic of China and it
includes its successors in title;

	
 

	
 

	
 

	
“Ship”:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Tranche and/or the Quentin
Borrower, means the Quentin Ship;

17

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Tranche and/or the Undine
Borrower, means the Undine Ship; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Tranche and/or the Sander
Borrower, means the Sander Ship,

	
 

	
 

	
 

	
 

	
 

	
 

	
and “Ships” means any or all of them;

	
 

	
 

	
 

	
 

	
 

	
“Ship Security Documents”:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship, means the Quentin Mortgage, the
Quentin Deed of Covenant, the Quentin General Assignment and the Quentin
Charter Assignment;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship, means the Undine Mortgage, the Undine
Deed of Covenant, the Undine General Assignment and the Undine Charter
Assignment; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship, means the Sander Mortgage, the Sander
Deed of Covenant, the Sander General Assignment and the Sander Charter
Assignment;

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
“Standard Form” means, in relation to any Ship, the Group’s
standard form of Group management agreement for vessels of the Group (including
the individual form of management agreement per vessel) which includes the
amounts of remuneration payable to a Manager for its services thereunder), as
submitted by or on behalf of the Borrowers to the Agent prior to this
Agreement;

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
“Swap Assignments” means the assignments executed or (as the
context may require) to be executed by the Borrowers in favour of the
Security Agent in connection with certain of the rights of the Borrowers
under the relevant Master Swap Agreement in a form previously agreed between
the Agent and the Borrowers and “Swap Assignment” means each of them;

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
“Swap Providers” means the banks and financial institutions
whose names and addresses are set out in schedule 1 and “Swap Provider” means each
of them;

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Compulsory Acquisition of such Ship; or

18

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation (other than where the same amounts to the
Compulsory Acquisition of such Ship) by any Government Entity, or by persons
acting or purporting to act on behalf of any Government Entity, unless such
Ship be released and restored to the relevant Borrower from such hijacking,
theft, condemnation, capture, seizure, arrest, detention, or confiscation
within ninety (90) days after the occurrence thereof; 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Tranche”:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in relation to the Quentin Ship and/or the Quentin
Borrower, means the Quentin Tranche;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in relation to the Undine Ship and/or the Undine
Borrower, means the Undine Tranche; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
in relation to the Sander Ship and/or the Sander
Borrower, means the Sander Tranche,

	
 

	
 

	
 

	
 

	
 

	
 

	
and “Tranches” means any or all of them;

	
 

	
 

	
 

	
 

	
 

	
“Transaction” has the
meaning given to it in a Master Swap Agreement;

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
“Trust Deed” means a trust deed in the form, or substantially
in the form, set out in schedule 6;

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
“Underlying Documents” means, together, the Contracts, the
Refund Guarantees, the Charters and the Management Agreements and “Underlying
Document” means any of them.

	
 

	
 

	
 

	
 

	
 

	
“Undine Borrower” means Undine Shipping Co. of 80
Broad Street, Monrovia, Liberia and includes its successors in title;

	
 

	
 

	
 

	
 

	
 

	
“Undine Charter” means the time charterparty dated 30 March
2011 in respect of the Undine Ship made between the Charterer and the Undine
Borrower, and as the same may be further amended, supplemented and/or novated
from time to time;

	
 

	
 

	
 

	
 

	
 

	
“Undine Charter Assignment” means the specific assignment of
the Undine Charter executed or (as the context may require) to be executed by
the Undine Borrower in favour of the Security Agent in a form previously
agreed between the Agent and the Borrowers;

	
 

	
 

	
 

	
 

	
 

	
“Undine Contract” means the shipbuilding contract dated 20
April 2011 made between the Builder and the Undine Borrower, as may be
amended and supplemented from time to time, 

19

	
 

	
 

	
 

	
 

	
 

	
relating to the construction and sale by the Builder, and the
purchase by the Undine Borrower, of the Undine Ship;

	
 

	
 

	
 

	
 

	
 

	
“Undine Contract Assignment Consent and Acknowledgement”
means the acknowledgement of notice of, and consent to, the assignment in
respect of the Undine Contract given or (as the context may require) to be
given in the form scheduled to the Undine Pre-delivery Security Assignment;

	
 

	
 

	
 

	
 

	
 

	
“Undine Contract Instalment Advance” means, in relation to
the Undine Ship, each of the three (3) Advances of the Total Commitment, each
in the maximum amount in Dollars specified in the second column of schedule 5
opposite the name of the relevant Advance and each made or (as the context
may require) to be made to finance or re-finance in part (as the case may be)
the payment of an instalment of the Undine Contract Price falling due before
the Delivery Date for the Undine Ship at the time specified in the third
column of schedule 5 opposite the relevant Advance, and “Undine Contract Instalment Advances”
means any or all of them;

	
 

	
 

	
 

	
 

	
 

	
“Undine Contract Price” means the purchase price for the
Undine Ship under the Undine Contract, being ninety five million five hundred
thousand Dollars ($95,500,000) or such other lesser sum in Dollars as may be
payable as the purchase price for the Undine Ship by the Undine Borrower to
the Builder pursuant to the Undine Contract;

	
 

	
 

	
 

	
 

	
 

	
“Undine Deed of Covenant” means the deed of covenant and/or
(as the case may be) the general assignment collateral to the Undine Mortgage
executed or (as the context may require) to be executed by the Undine
Borrower in favour of the Security Agent and/or any of the other Creditors in
such form as the Agent may reasonably require;

	
 

	
 

	
 

	
 

	
 

	
“Undine Delivery Advance” means an Advance of up to
$53,480,000 made or (as the context may require) to be made available to the
Borrowers on the Delivery Date of the Undine Ship for the purpose of
financing part of the construction and acquisition cost of the Undine Ship by
the Undine Borrower pursuant to the Undine Contract;

	
 

	
 

	
 

	
 

	
 

	
“Undine General Assignment” means the specific assignment of
the Earnings, Insurances and Requisition Compensation for the Undine Ship
executed or (as the context may require) to be executed by the Undine
Borrower in favour of the Security Agent in such form as the Agent may
require in its reasonable discretion;

	
 

	
 

	
 

	
 

	
 

	
“Undine Management Agreement” means each agreement made or
(as the context may require) to be made between the Undine Borrower and any
Manager in the Standard Form or, if in any other form, in a form acceptable
to the Agent (acting on the instructions of the Majority Banks), providing (inter alia)
for that Manager to carry out the commercial and/or the technical management
of the Undine Ship;

	
 

	
 

	
 

	
 

	
 

	
“Undine Mortgage” means the first priority or (as the case
may be) preferred mortgage of the Undine Ship executed or (as the context may
require) to be executed by the Undine Borrower in favour of the Security
Agent and/or any of the other Creditors in such form as the Agent may require
in its reasonable discretion;

	
 

	
 

	
 

	
 

	
 

	
“Undine Operating Account” means an interest bearing Dollar account
of the Undine Borrower opened or (as the context may require) to be opened
with the Account Bank and includes any sub-accounts thereof;

	
 

	
 

	
 

	
 

	
 

	
“Undine Operating Account Assignment” means the first
priority assignment of the Undine Operating Account executed or (as the
context may require) to be executed by the Undine Borrower in favour of the
Security Agent in a form previously agreed between the Agent and the
Borrowers;

	
 

	
 

	
 

	
 

	
 

	
“Undine Pre-delivery Security Assignment” means the
assignment of the Undine Contract and the Undine Refund Guarantee executed or
(as the context may require) to be executed by the Undine Borrower in favour
of the Security Agent in a form previously agreed between the Agent and the
Borrowers;

20

	
 

	
 

	
 

	
 

	
 

	
 

	
“Undine Refund Guarantee” means each letter of
guarantee issued or (as the context may require) to be issued by the Refund Guarantor
in favour of the Undine Borrower in respect of the Builder’s obligations under
the Undine Contract, each in the form prescribed in the Undine Contract, and any
further guarantee(s) to be issued by the Refund Guarantor in respect of such
obligations pursuant to any agreement supplemental to the Undine Contract, and
any extensions, renewals or replacements thereto or thereof; 

	
 

	
 

	
 

	
 

	
 

	
 

	
“Undine Refund Guarantee Assignment Consent and Acknowledgement”
means, in relation to each Undine Refund Guarantee, an acknowledgement of
notice of, and consent to, the assignment in respect of that Undine Refund
Guarantee given or (as the context may require) to be given by the Refund
Guarantor in the form scheduled to the Undine Pre-delivery Security
Assignment and “Undine Refund Guarantee Assignment Consents and
Acknowledgements” means any or all of them;

	
 

	
 

	
 

	
 

	
 

	
 

	
“Undine Ship” means the approximately 9,000 teu container
ship known on the date of this Agreement as Hull No. S4024 at the Builder’s
yard, to be constructed and sold by the Builder to the Undine Borrower
pursuant to the Undine Contract and to be registered on its Delivery Date in
the ownership of the Undine Borrower through the relevant Registry under the
laws and flag of the relevant Flag State; and

	
 

	
 

	
 

	
 

	
 

	
 

	
“Undine Tranche” means a tranche of the Total Commitment and
the Loan of up to the lesser or (i) $76,400,000 and (ii) eighty per cent
(80%) of the Contract Price of the Undine Ship, comprising the three (3)
Undine Contract Instalment Advances and the Undine Delivery Advance, or (as
the context may require) the aggregate principal amount of such Tranche
outstanding at any relevant time.

	
 

	
 

	
 

	
 

	
1.3

	
 

	
Headings

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
1.4

	
 

	
Construction of certain terms

	
 

	
 

	
 

	
 

	
 

	
 

	
In this Agreement, unless the context otherwise requires:

	
 

	
 

	
 

	
 

	
1.4.1

	
 

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

	
 

	
 

	
 

	
 

	
1.4.2

	
 

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

	
 

	
 

	
 

	
 

	
1.4.3

	
 

	
references to a “regulation” include any present or future
regulation, rule, directive, requirement, request or guideline (whether or
not having the force of law, but if not having the force of law, one with
which the relevant person habitually complies) of any agency, authority,
central bank or government department or any self-regulatory or other
national or supra-national authority and, for the avoidance of doubt, shall
include any Basel 2 Regulation;

	
 

	
 

	
 

	
 

	
1.4.4

	
 

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

	
 

	
 

	
 

	
 

	
1.4.5

	
 

	
references to a time of day are to London time;

	
 

	
 

	
 

	
 

	
1.4.6

	
 

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

	
 

	
 

	
 

	
 

	
1.4.7

	
 

	
“control” means, in relation to a body corporate:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the power (whether by way of ownership of shares, proxy, contract,
agency or otherwise, directly or indirectly) to:

21

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
cast, or control the casting of, more than 50 per cent of the maximum
number of votes that might be cast at a general meeting of such body
corporate; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
appoint or remove all, or the majority, of the directors or other
equivalent officers of such body corporate; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
give directions with respect to the operating and financial policies
of such body corporate with which the directors or other equivalent officers
of such body corporate are obliged to comply; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the holding beneficially of more than 50 per cent of the issued share
capital of such body corporate (excluding any part of that issued share
capital that carries no right to participate beyond a specified amount in a
distribution of either profits or capital),

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
and “controlled” shall be construed accordingly;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.4.8

	
 

	
two or more persons are “acting in concert” if, pursuant to an
agreement or understanding (whether formal or informal), they actively
co-operate, through the acquisition (directly or indirectly) of shares in the
Corporate Guarantor by any of them, either directly or indirectly to obtain
or consolidate control of the Corporate Guarantor;

	
 

	
 

	
 

	
 

	
 

	
 

	
1.4.9

	
 

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

	
 

	
 

	
 

	
1.4.10

	
 

	
references to the “equivalent” of an amount specified in a
particular currency (the “first amount”), shall be construed as a
reference to the net amount of any other currency which the Agent determines
can be purchased with the first amount in the London foreign exchange market
at or about 11.00 a.m. on the day on which the calculation falls to be made
for spot delivery; and

	
 

	
 

	
 

	
1.4.11

	
 

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

	
 

	
 

	
 

	
1.5

	
 

	
Majority Banks

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
1.6

	
 

	
Banks’ Commitments

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
For the purposes of the definition of “Majority Banks” in
clause 1.5, references to the Commitment of a Bank shall, if the Total
Commitment has, at any relevant time, been reduced to zero, be deemed to be a
reference to the Commitment of that Bank immediately prior to such reduction
to zero.

	
 

	
 

	
 

	
 

	
 

	
 

	
1.7

	
 

	
Continuing Defaults

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
For the purposes of this Agreement and the other Security Documents,
a Default or an Event of Default is “continuing” if it has not been remedied
or waived.

22

	
 

	
 

	
 

	
 

	
 

	
2

	
 

	
The Total
Commitment and the Advances 

	
 

	
 

	
 

	
 

	
 

	
2.1

	
 

	
Agreement to lend 

	
 

	
 

	
 

	
 

	
 

	
The Banks, relying upon each of the representations and warranties in
clause 7, agree to lend to the Borrowers, jointly and severally, upon
and subject to the terms of this Agreement, the principal sum of up to two
hundred and twenty nine million two hundred thousand Dollars ($229,200,000)
in twelve (12) Advances comprising three (3) Tranches. The obligation of each
Bank under this Agreement shall be to contribute that proportion of each
Advance which, as at the Drawdown Date of such Advance, its Commitment bears
to the Total Commitment.

	
 

	
 

	
 

	
2.2

	
 

	
Obligations several

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
2.3

	
 

	
Interests several

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Notwithstanding any other term of this Agreement (but without
prejudice to the provisions of this Agreement relating to or requiring action
by the Majority Banks) the interests of the Creditors are several and the
amount due to any Creditor is a separate and independent debt. No Creditor
however shall have the right to protect and enforce its rights arising out of
this Agreement except with the prior written consent of the Majority Banks.
If however such consent by the Majority Banks is given and a Creditor takes
any such action, it shall not be necessary for any other Creditor to be
joined as an additional party in any proceedings for this purpose.

	
 

	
 

	
 

	
2.4

	
 

	
Drawdown 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Subject to the terms and conditions of this Agreement, each Advance
shall be made to the Borrowers following receipt by the Agent from the
Borrowers of a Drawdown Notice not later than 10:00 a.m. (London time) on the
third Banking Day before the date, which shall be a Banking Day falling
within the Drawdown Period for such Advance, on which the Borrowers propose
such Advance is made. A Drawdown Notice (i) shall be effective on actual
receipt by the Agent and (ii) once given, shall, subject as provided in
clause 3.6.1, be irrevocable.

	
 

	
 

	
 

	
2.5

	
 

	
Timing, restrictions and limitation of
Advances 

	
 

	
 

	
 

	
2.5.1

	
 

	
The aggregate amount of the Loan shall not exceed the lower of (a)
two hundred and twenty nine million two hundred thousand Dollars
($229,200,000) and (b) the amount in Dollars which is eighty per cent (80%)
of the aggregate Contract Prices for all Ships. Each Advance shall, subject
to the following provisions of this clause 2.5, be for such amount as is
specified in the Drawdown Notice for that Advance.

	
 

	
 

	
 

	
 

	
 

	
2.5.2

	
 

	
The aggregate amount of the Tranche for each Ship shall not exceed
the lower of (a) $76,400,000 and (b) the amount in Dollars which is eighty
per cent (80%) of the Contract Price for such Ship.

	
 

	
 

	
 

	
 

	
 

	
2.5.3

	
 

	
The aggregate amount of each Contract Instalment Advance shall be as
follows:

	
 

	
 

	
 

	
 

	
 

	
each of the first, second and third Contract Instalment Advances for
each Ship shall not exceed the lower of (i) $7,640,000 and (ii) the amount in
Dollars which is equal to eighty per cent (80%) of the “1st
Instalment” or (as the case may be), the “2nd Instalment” or (as
the case may be) the “3rd Instalment” of the Contract Price for
the Ship relevant to such 

23

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Contract Instalment Advance, which is payable at the time specified
in the third column of schedule 5 opposite the relevant Contract Instalment
Advance,

	
 

	
 

	
 

	
 

	
 

	
and each Contract Instalment Advance for a Ship shall be applied in
or towards payment to the Builder or, in reimbursement to the Borrowers, of
the relevant aforesaid instalment of the Contract Price payable or paid (as
the case may be) under the Contract for the Ship relevant to such Contract
Instalment Advance, and shall be made available to the Borrowers when such
instalment has become due and payable under the relevant Contract or, if
already paid by the Borrowers to the Builder.

	
 

	
 

	
 

	
 

	
 

	
2.5.4

	
 

	
Each Delivery Advance:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
shall not exceed the lower of (i) $53,480,000, (ii) the amount in
Dollars which is equal to eighty per cent (80%) of the “4th
Instalment” of the Contract Price for the Ship relevant to such Advance,
(iii) the amount in Dollars which, when added to the total amount of the
Contract Instalment Advances for such Ship actually drawn down, is equal to
80% of the Contract Price of such Ship and (iv) the amount in Dollars which,
when added to the total amount of the Contract Instalment Advances for such
Ship actually drawn down, is equal to $76,400,000; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
shall be applied in or towards payment to the Builder of the “4th
Instalment” of the Contract Price for such Ship falling due on the relevant
Delivery Date, and shall be made available to the Borrowers when such
instalment has become due and payable. 

	
 

	
 

	
 

	
 

	
 

	
2.6

	
 

	
Availability

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Following a Drawdown Notice

	
 

	
 

	
 

	
 

	
 

	
Upon receipt of a Drawdown Notice complying with the terms of this
Agreement, the Agent shall promptly notify each Bank and, subject to the
provisions of clause 9, each Bank shall, on the Drawdown Date for the relevant
Advance, make available to the Agent its portion of the relevant Advance for
payment by the Agent in accordance with clause 6.2. The Borrowers
acknowledge that payment of any Advance or part thereof to the Builder or to
the Borrowers or any of them in accordance with clause 6.2, shall satisfy the
obligation of the Banks to lend that Advance to the Borrowers under this
Agreement.

	
 

	
 

	
 

	
 

	
 

	
2.7

	
 

	
Termination of Total Commitment 

	
 

	
 

	
 

	
 

	
 

	
Any part of the Total Commitment undrawn and uncancelled at the end
of the relevant Drawdown Period shall thereupon be automatically cancelled.

	
 

	
 

	
 

	
 

	
 

	
2.8

	
 

	
Application of proceeds

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Without prejudice to the Borrowers’ obligations under
clause 8.1.3, no Creditor shall have any responsibility for the
application of the proceeds of the Loan or any part thereof by the Borrowers.

	
 

	
 

	
 

	
2.9

	
 

	
Derivative transactions

	
 

	
 

	
 

	
2.9.1

	
 

	
If, at any time during the Security Period, the Borrowers wish to
enter into interest rate swap or other derivative transactions so as to hedge
all or any part of their exposure under this Agreement to interest rate
fluctuations, they shall advise the Swap Providers in writing.

	
 

	
 

	
 

	
2.9.2

	
 

	
Any such swap or other derivative transaction shall be concluded with
a Swap Provider under the relevant Master Swap Agreement provided however
that no such swap or other derivative transaction shall be concluded unless
that Swap Provider first agrees to it in writing. For the avoidance of doubt,
other than the Swap Providers’ agreement in writing referred to in the preceding
sentence no prior approval is required by the Borrowers from any other
Creditor before concluding any such transaction. If and when any such swap or
other derivative transaction has been concluded, it shall constitute a
Designated Transaction, and the Borrowers and the Corporate Guarantor shall
sign a Confirmation with 

24

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
the relevant Swap Provider and advise the Banks through the Agent
promptly after concluding any Designated Transaction.

	
 

	
 

	
 

	
2.10

	
 

	
 “Pre-placement” of Delivery Advances

	
 

	
 

	
 

	
2.10.1

	
 

	
Notwithstanding that the Borrowers may have not yet satisfied all of
the conditions precedent set out in schedule 3, Part 3 in relation to a Ship,
in order to facilitate compliance by the relevant Borrower with Article
X.4(a) of the Contract relevant to that Ship, and provided that:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the Borrowers have submitted a relevant Drawdown Notice in accordance
with clause 2.4; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in the Agent’s opinion the Borrowers are reasonably likely to satisfy
all such conditions precedent in relation to that Ship within 4 Banking Days
from the Drawdown Date and in any event upon the Release (as defined below in
clause 2.10.2),

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
the Banks may, subject to the other terms and conditions of this
clause 2.10 and the other provisions of this Agreement, make available to the
Agent the Delivery Advance for that Ship, on the date specified in the
relevant Drawdown Notice, being the date on which the “4th
Instalment” for that Ship is required to be deposited in accordance with
Article X.4(ii) of the Contract with the relevant builder’s bank referred to
in that Contract (the “Builder’s Bank”).

	
 

	
 

	
 

	
2.10.2

	
 

	
Any such Delivery Advance drawn down pursuant to this clause 2.10 (a
“Pre-placed
Advance”) shall (subject to the other provisions of this Agreement)
be remitted by the Agent to the Builder’s Bank as a cash deposit in the
Agent’s name with the Builder’s Bank (the “Agent Account”) with its
correspondent bank in New York, and will be held by the Builder’s Bank to the
order of the Agent for release by the Agent to the Builder (the “Release”)
and only subject to such irrevocable instructions (the “Irrevocable Instructions”)
addressed from the Agent to the Builder’s Bank as are acceptable to the Agent
(acting on the instructions of the Majority Banks).

	
 

	
 

	
 

	
 

	
 

	
2.10.3

	
 

	
The Irrevocable Instructions shall provide (inter alia) that the
Pre-placed Advance shall not be released to the Builder or to its order, and
the Agent shall not agree to release a Pre-placed Advance to the Builder or
its order, unless and until the Agent is satisfied that the “Protocol of
Delivery and Acceptance” in respect of the relevant Ship has been signed by
the Builder and the relevant Borrower and counter-signed by the Agent or one
of its duly authorised representatives.

	
 

	
 

	
 

	
2.10.4

	
 

	
The Borrowers hereby irrevocably and unconditionally undertake that
none of the Borrowers shall give any instructions to the Builder’s Bank that
are inconsistent with any Irrevocable Instructions in respect of a Pre-placed
Advance. 

	
 

	
 

	
 

	
2.10.5

	
 

	
The Borrowers shall immediately prepay a Pre-placed Advance, together
with interest thereon (calculated in accordance with clause 3.1), on the date
on which the Builder’s Bank is required to return the moneys funded by that
Pre-placed Advance to the Agent in accordance with the Irrevocable
Instructions (and regardless of whether the Builder’s Bank has then carried
out such instructions), provided that any moneys actually returned to the
Agent from the Agent Account shall be applied by the Agent in satisfaction of
such prepayment obligation of the Borrowers and in payment of any amounts
payable by the Borrowers under clause 4.4 as a result of such prepayment. 

	
 

	
 

	
 

	
2.10.6

	
 

	
In case of application of this clause 2.10 in respect of a Pre-placed
Advance, that Pre-placed Advance shall accrue interest in accordance with the
terms of clause 3.1 from its Drawdown Date.

	
 

	
 

	
 

	
 

	
 

	
3

	
 

	
Interest and
Interest Periods

	
 

	
 

	
 

	
3.1

	
 

	
Normal interest rate

25

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
3.2

	
 

	
Selection of Interest Periods

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Subject to clause 3.3, the Borrowers may by notice received by the
Agent not later than 10:00 a.m. on the second Banking Day before the
beginning of each Interest Period specify whether such Interest Period shall
have a duration of three (3), six (6), nine (9) or twelve (12) months or,
subject to availability, such other period as the Borrowers may select and
the Agent may agree in its absolute discretion, acting on the instructions of
the Majority Banks.

	
 

	
 

	
 

	
3.3

	
 

	
Determination of Interest Periods

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
3.3.1

	
 

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

	
 

	
 

	
 

	
3.3.2

	
 

	
the initial Interest Period in respect of each Advance for a Ship
drawn down after the first Advance for such Ship to be drawn down shall end
on the same day as the then current Interest Period for the other drawn
Advances of the same Tranche and, on such day, all such Advances shall be
consolidated into, and shall thereafter constitute, the Tranche for that
Ship;

	
 

	
 

	
 

	
3.3.3

	
 

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

	
 

	
 

	
 

	
 

	
 

	
3.3.4

	
 

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

	
 

	
 

	
 

	
3.4

	
 

	
Default interest

	
 

	
 

	
 

	
 

	
 

	
If the Borrowers fail to pay any sum (including, without limitation,
any sum payable pursuant to this clause 3.4) on its due date for payment
under any of the Security Documents (except the Master Swap Agreements), the
Borrowers shall pay interest on such sum on demand from the due date up to
the date of actual payment (as well after as before judgment) at a rate
determined by the Agent pursuant to this clause 3.4. The period
beginning on such due date and ending on such date of payment shall be
divided into successive periods of not more than three (3) months as selected
by the Agent each of which (other than the first, which shall commence on
such due date) shall commence on the last day of the preceding such period.
The rate of interest applicable to each such period shall be the aggregate
(as determined by the Agent) of (a) two per cent (2%) per annum, (b) the
Margin, (c) LIBOR for such period and (d) the Mandatory Cost (if any). Such
interest shall be due and payable on the last day of each such period as
determined by the Agent and each such day shall, for the purposes of this Agreement,
be treated as an Interest Payment Date, provided that (i) if such unpaid sum
is an 

26

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
amount of principal which became due and payable by reason of a
declaration by the Agent under clause 10.2.2 or a prepayment pursuant to
clauses 2.10, 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 Agent shall be
of a duration equal to the period between the due date of such principal sum
and such Interest Payment Date and interest shall be payable on such
principal sum during such period at a rate of two per cent (2%) above the
rate applicable thereto immediately before it shall have become so due and
payable and (ii) if the Agent selects under this clause 3.4 Interest Periods
which are shorter than 3 months, interest under this clause shall
(notwithstanding such selection) only be compounded and paid not more
frequently than at 3 monthly intervals. If, for the reasons specified in
clause 3.6.1, the Agent is unable to determine a rate in accordance with
the foregoing provisions of this clause 3.4, each Bank shall promptly
notify the Agent of the cost of funds to such Bank and interest on any sum
not paid on its due date for payment shall be calculated at a rate determined
by the Agent to be two per cent (2%) per annum above the aggregate of the
Margin and the cost of funds to such Bank (including Mandatory Cost, if any).

	
 

	
 

	
 

	
 

	
 

	
3.5

	
 

	
Notification of Interest Periods and
interest rate

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
3.6

	
 

	
Market disruption; non-availability

	
 

	
 

	
 

	
3.6.1

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the Agent shall have determined (which determination shall, in the
absence of manifest error, be conclusive) that adequate and fair means do not
exist for ascertaining LIBOR during such Interest Period due to circumstances
affecting the London interbank market generally (and provided always that if
the screen rate referred to in paragraph (a) of the definition of LIBOR in
clause 1.2 is available at any relevant time, no person may argue under this
paragraph (a) that adequate and fair means did not exist for ascertaining
LIBOR during the relevant Interest Period); or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
where applicable the Reference Bank does not supply the Agent with a
quotation for the purpose of calculating LIBOR; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the Agent shall have received notification from Banks whose aggregate
Contributions are not less than fifty per cent (50%) of the Loan or, prior to
the first drawdown, from Banks whose aggregate Commitments are not less than
fifty per cent (50%) of the Total Commitment, that deposits in Dollars are
not available to such Banks in the London Interbank Market in the ordinary
course of business in sufficient amounts to fund their Commitments or their
Contributions for such Interest Period or that LIBOR does not accurately
reflect the cost to such Banks of obtaining such deposits,

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
3.6.2

	
 

	
During the period of thirty (30) days after any Determination Notice
has been given by the Agent under clause 3.6.1, the Borrowers and the
Banks shall negotiate in good faith with a view to arriving at a mutually
acceptable alternative basis for each Bank to maintain its Contribution. If,
within such 30 day period, no such mutually acceptable alternative basis is
reached for all the Banks, each Bank shall certify an alternative basis (the
“Alternative
Basis”) for maintaining its Contribution. The Alternative Basis
may at the relevant Bank’s sole and unfettered discretion (without
limitation) include alternative interest periods, alternative currencies or
alternative rates of interest but shall include a margin above the cost of
funds (including Mandatory Cost, if any) to such Bank equivalent to the
Margin. The Agent shall calculate the arithmetic mean of the Alternative
Bases provided by the relevant 

27

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Banks (the “Substitute Basis”) and certify the same
to the Borrowers, the Banks and the Swap Providers. The Substitute Basis so
certified shall be binding upon the Borrowers and shall take effect in
accordance with its terms from the date specified in the Determination Notice
until such time as the Agent notifies the Borrowers that none of the
circumstances specified in clause 3.6.1 continues to exist whereupon the
normal interest rate fixing provisions of this Agreement shall apply. For so
long as any Substitute Basis is in force, the Agent shall from time to time
(but at least on a monthly basis) and in consultation with the Banks, review
whether or not the circumstances that have caused the application of the
Substitute Basis have ceased to exist, and if the Majority Banks and the
Agent conclude that they have so ceased to exist and that such Substitute
Basis shall no longer apply, the Agent shall notify the Borrowers and the
Banks that the Substitute Basis shall case to be effective from such date as
the Agent shall reasonably specify.

	
 

	
 

	
 

	
 

	
 

	
4

	
 

	
Repayment and
prepayment

	
 

	
 

	
 

	
 

	
 

	
4.1

	
 

	
Repayment

	
 

	
 

	
 

	
 

	
 

	
4.1.1

	
 

	
Subject to the other provisions of this clause 4.1, the Borrowers
shall repay each Tranche by twenty eight (28) consecutive quarterly repayment
instalments, one such instalment to be repaid on each of the Repayment Dates
for such Tranche. Subject to the provisions of this Agreement, the amount of
each of the first to twenty seventh (27th) instalments (inclusive)
in respect of each such Tranche shall be $1,273,400 and the amount of the
twenty eighth (28th) and final instalment in respect of each such
Tranche shall be $42,018,200 (comprising a repayment instalment of $1,273,400
and a balloon payment of $40,744,800 (each such balloon payment in relation
to a Tranche, a “Balloon Instalment”)). 

	
 

	
 

	
 

	
 

	
 

	
4.1.2

	
 

	
If the Total Commitment in respect of any Tranche is not drawn down
in full, the amount of each repayment instalment in respect of the relevant
Tranche (including the relevant Balloon Instalment) shall be reduced
proportionately.

	
 

	
 

	
 

	
 

	
 

	
4.2

	
 

	
Voluntary prepayment

	
 

	
 

	
 

	
4.2.1

	
 

	
The Borrowers may prepay any Tranche in whole or part (such part
being in an amount of Five hundred thousand Dollars ($500,000) or any larger
sum which is an integral multiple of Five hundred thousand Dollars
($500,000)) on any day, without premium or penalty, but subject always to
their obligations under clause 4.4 (including, without limitation, their
obligations under clause 11.1 if any such prepayment is made on a day which
is not an Interest Payment Date relating to the part of the Loan to be
prepaid). 

	
 

	
 

	
 

	
 

	
 

	
4.2.2

	
 

	
The Borrowers may also prepay (in whole but not in part only),
without premium or penalty, but without prejudice to their obligations under
clauses 3.6, 6.6 and 12.2, and subject to their obligations under clause 4.4:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Contribution of any Bank who has certified an Alternative Basis
under clause 3.6.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Upon any notice of such prepayment being given under this clause
4.2.2, the Commitment of the relevant Bank shall be reduced to zero.

	
 

	
 

	
 

	
 

	
 

	
4.3

	
 

	
Cancellation of a Tranche

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrowers may cancel the whole or any part of an undrawn Tranche,
without premium or penalty subject to giving to the Agent not less than five
(5) Banking Days’ (or such shorter period as the Agent may require) prior
notice in writing.

	
 

	
 

	
 

	
4.4

	
 

	
Prepayment on Total Loss, transfers or
sales

	
 

	
 

	
 

	
 

	
 

	
4.4.1

	
 

	
Before
first drawdown

28

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Immediately prior to the completion of the novation, transfer or
assignment of a Contract by the relevant Borrower to another person (with the
prior written consent of the Creditors as and when required by the Security
Documents), in each case before any Advance for such Ship is drawn down, then
(a) the obligation of the Banks to advance any Advance for such Ship (or part
thereof) shall immediately cease and (b) the Total Commitment shall be
reduced by the amount of the Tranche relevant to such Ship.

	
 

	
 

	
 

	
4.4.2

	
 

	
Following first drawdown but prior to Delivery

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Immediately prior to the completion of the novation, transfer or
assignment of a Contract by the relevant Borrower to another person (with the
prior written consent of the Creditors as and when required by the Security
Documents), (a) if any Advance relating to such Ship has been drawn down, the
Borrowers shall prepay each such Advance in full and (b) (if applicable) the
obligation of the Banks to advance any other Advance for that Ship shall
immediately cease and the Total Commitment shall be reduced accordingly.

	
 

	
 

	
 

	
 

	
 

	
4.4.3

	
 

	
Thereafter
- Mortgaged Ships

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
On the date falling one hundred and eighty (180) days after that on
which a Mortgaged Ship became a Total Loss or, if earlier, on the date upon
which the insurance proceeds in respect of such Total Loss are, or
Requisition Compensation is, received by the relevant Borrower (or the Agent
or any other Creditor pursuant to the Security Documents), the Borrowers
shall prepay in full the Tranche relating to such Mortgaged Ship.

	
 

	
 

	
 

	
4.4.4

	
 

	
Total Loss

	
 

	
 

	
 

	
 

	
 

	
For the purpose of this Agreement and the other Security Documents, a
Total Loss in respect of a Ship shall be deemed to have occurred:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

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

	
 

	
 

	
 

	
 

	
 

	
4.5

	
 

	
Amounts payable on prepayment

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
4.5.1

	
 

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

	
 

	
 

	
 

	
4.5.2

	
 

	
any additional amount payable under clauses 6.6 or 12.2; and 

	
 

	
 

	
 

	
 

	
 

	
4.5.3

	
 

	
all other sums payable by the Borrowers to the Creditors under this
Agreement or any of the other Security Documents including, without
limitation, any accrued commitment

29

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
commission payable under clause 5.1 and any amounts
payable under clause 4.7 or clause 11.

	
 

	
 

	
 

	
 

	
 

	
4.6

	
 

	
Notice of prepayment; reduction of
repayment instalments

	
 

	
 

	
 

	
 

	
 

	
4.6.1

	
 

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

	
 

	
 

	
 

	
 

	
 

	
4.6.2

	
 

	
Any amount prepaid pursuant to clause 4.2 or clause 8.2.1(a) in
respect of all the Tranches, shall be applied in prepayment of all Tranches proportionately
as between them and in reduction of the repayment instalments of each Tranche
under clause 4.1.1 (including each Balloon Instalment) proportionately. 

	
 

	
 

	
 

	
4.6.3

	
 

	
Any amounts prepaid pursuant to clause 4.2 or clause 8.2.1(a) in
respect of a single Tranche shall be applied in reducing the repayment
instalments of that Tranche under clause 4.1.1 (including the relevant
Balloon Instalment) proportionately.

	
 

	
 

	
 

	
 

	
 

	
4.6.4

	
 

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

	
 

	
 

	
 

	
 

	
 

	
4.6.5

	
 

	
No amount prepaid under this Agreement may be reborrowed.

	
 

	
 

	
 

	
 

	
 

	
4.7

	
 

	
Unwinding of Designated Transactions

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
On or prior to any repayment or prepayment of all or part of the Loan
(including, without limitation, pursuant to clauses 2.10, 4.1, 4.2, 4.4,
8.2.1(a), 10.2, 12, 13 or any other provision of this Agreement), the
Borrowers shall, upon the request of the Agent and any Swap Provider, wholly
or partially reverse, offset, unwind, cancel, close out, net out or otherwise
terminate one or more of the continuing Designated Transactions so that the
notional principal amount of the continuing Designated Transactions
thereafter remaining under the relevant Master Swap Agreement does not, and
will not in the future (taking into account the scheduled amortisation),
exceed the amount of the Loan as reducing from time to time thereafter
pursuant to clause 4.1.

	
 

	
 

	
 

	
 

	
 

	
5

	
 

	
Fees, commitment
commission and expenses

	
 

	
 

	
 

	
5.1 

	
 

	
Fees 

	
 

	
 

	
 

	
 

	
 

	
The Borrowers shall pay to the Agent:

	
 

	
 

	
 

	
 

	
 

	
5.1.1

	
 

	
for the account of the Banks pro rata in accordance with their
Commitments, on the date of this Agreement, an up-front participation fee of
such amount as specified in the relevant Fee Letter (for further sharing and
distribution between the Banks as separately agreed between them);

	
 

	
 

	
 

	
 

	
 

	
5.1.2

	
 

	
for the account of the Agent on the date of this Agreement and at
twelve (12) monthly intervals thereafter until all moneys owing under the
Security Documents have been repaid in full, an annual agency fee of such
amount as is specified in the relevant Fee Letter; and

	
 

	
 

	
 

	
 

	
 

	
5.1.3

	
 

	
for the account of each Bank, on each of the dates falling at three
(3) monthly intervals after the date of this Agreement until the last day of
the last Drawdown Period, and on the last day of the last Drawdown Period,
commitment commission computed from the date of this Agreement (in the case
of the first payment of commission) and from the due date of the preceding
payment of commission (in the case of each subsequent payment) at the rate of
thirty five per cent (35%) of the Margin per annum on the daily undrawn and
available amount of such Bank’s Commitment.

30

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The fees and commissions referred to in clause 5.1 shall be payable
by the Borrowers to the Agent, whether or not any part of the Total
Commitment is ever advanced. All such fees and commissions referred to in
clause 5.1 shall be non-refundable.

	
 

	
 

	
 

	
5.2

	
 

	
Expenses

	
 

	
 

	
 

	
 

	
 

	
The Borrowers shall pay to the Agent on a full indemnity basis on
demand all expenses (including legal, printing and out-of-pocket expenses):

	
 

	
 

	
 

	
 

	
 

	
5.2.1

	
 

	
incurred by the Agent or any of the Creditors in connection with the
negotiation, preparation, execution and, where relevant, registration of:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the Security Documents and the Underlying Documents; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
any amendment (except where such amendment is unilaterally requested
by the Agent while no Event of Default has occurred) or extension of, or the
granting of any waiver or consent under, any of the Security Documents; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
provided that any such expenses incurred prior to an Event of Default
or for as long as no Event of Default is continuing shall be reasonable and
documented; and

	
 

	
 

	
 

	
 

	
 

	
5.2.2

	
 

	
incurred by the Agent or any of the Creditors in contemplation of, or
otherwise in connection with, the enforcement of, or preservation of any
rights under, any of the Security Documents, or otherwise in respect of the
moneys owing under any of the Security Documents, 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
5.3

	
 

	
Value added tax

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
5.4

	
 

	
Stamp and
other duties

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrowers shall pay all stamp, documentary, registration or other
like duties or taxes (including any duties or taxes payable by, or assessed
against, any of the Creditors) imposed on or in connection with any of the
Underlying Documents, the Security Documents, the Loan, (but not duties or
taxes as a result of a transfer under clause 15.3) and shall indemnify the
Creditors or any of them against any liability arising by reason of any delay
or omission by the Borrowers to pay such duties or taxes.

	
 

	
 

	
 

	
 

	
 

	
6

	
 

	
Payments and
taxes; accounts and calculations

	
 

	
 

	
 

	
 

	
 

	
6.1

	
 

	
No set-off or counterclaim

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

31

	
 

	
 

	
 

	
 

	
 

	
Agreement or any relevant Security Documents, such payments shall be
for the account of all Banks, and the Agent shall distribute such payments in
like funds as are received by the Agent to the Banks rateably, in accordance
with their respective Commitment or (if after the first drawdown)
Contribution as the case may be. 

	
 

	
 

	
 

	
6.2

	
 

	
Payment by the Banks 

	
 

	
 

	
 

	
 

	
 

	
All sums to be advanced by the Banks to the Borrowers under this
Agreement shall be remitted in Dollars on the Drawdown Date for the relevant
Advance and, in the case of amounts drawn down pursuant to clause 2.6 to the
account of the Agent at such bank as the Agent may have notified to the Banks
and shall be paid by the Agent on such date in like funds as are received by
the Agent to the account specified in the Drawdown Notice for such Advance. 

	
 

	
 

	
 

	
6.3

	
 

	
Non-Banking Days 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
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

	
 

	
Certificates conclusive 

	
 

	
 

	
 

	
 

	
 

	
Any certificate or determination of the Agent or the Security Agent,
or any Bank, or the Swap Providers as to any rate of interest or any other
amount pursuant to and for the purposes of any of the Security Documents
shall, in the absence of manifest error, be conclusive and binding on the
Borrowers and, in the case of a certificate or determination by the Agent or
the Security Agent, also on the other Creditors. 

	
 

	
 

	
 

	
6.6

	
 

	
Grossing-up for Taxes 

	
 

	
 

	
 

	
6.6.1

	
 

	
If at any time the Borrowers or any of them are required to make any
deduction or withholding in respect of Taxes from any payment due under any
of the Security Documents for the account of any Creditor or if the Agent or,
as the case may be, the Security Agent is required to make any such deduction
or withholding from a payment to another Creditor or withholding in respect
of Taxes from any payment due under any of the Security Documents, the sum
due from the Borrowers or any of them in respect of such payment shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, the relevant Creditor receives on the due date for
such payment (and retains, free from any liability in respect of such
deduction or withholding), a net sum equal to the sum which it would have
received had no such deduction or withholding been required to be made and
the Borrowers shall indemnify each Creditor against any losses or costs
incurred by it by reason of any failure of the Borrowers or any of them to
make any such deduction or withholding or by reason of any increased payment
not being made on the due date for such payment. The Borrowers shall promptly
deliver to the Agent any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding
as aforesaid. 

	
 

	
 

	
 

	
6.6.2

	
 

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

32

	
 

	
 

	
 

	
 

	
 

	
Bank to make any such deduction or withholding or by reason of any
increased payment not being made on the due date for such payment.

	
 

	
 

	
 

	
6.6.3

	
 

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

	
 

	
 

	
 

	
6.7

	
 

	
Loan account 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
6.8

	
 

	
Agent may assume receipt 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
6.9

	
 

	
Partial payments 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
6.9.1

	
 

	
first, in or towards payment, on a pro-rata basis, of any unpaid
costs and expenses of the Agent, the Security Agent and the Swap Providers
under any of the Security Documents; 

	
 

	
 

	
 

	
6.9.2

	
 

	
secondly, in or towards payment, on a pro rata basis, of any fees and
accrued commissions payable to the Agent or any of the other Creditors (other
than the Swap Providers) under, or in relation to, the Security Documents
which remain unpaid; 

	
 

	
 

	
 

	
6.9.3

	
 

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

	
 

	
 

	
 

	
6.9.4

	
 

	
fourthly, in or towards payment to the Banks, on a pro rata basis, of
any principal in respect of the Loan; 

33

	
 

	
 

	
 

	
 

	
6.9.5

	
 

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

	
 

	
 

	
 

	
 

	
6.9.6

	
 

	
sixthly, in or towards payment to the Swap Providers of any amounts
owing to any of them under the respective Master Swap Agreement; and 

	
 

	
 

	
 

	
 

	
6.9.7

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
The order of application set out in clauses 6.9.3 - 6.9.5 may be
varied by the Agent if the Majority Banks so direct, without any reference
to, or consent or approval from, the Borrowers. 

	
 

	
 

	
 

	
 

	
7

	
 

	
Representations and warranties 

	
 

	
 

	
 

	
 

	
7.1

	
 

	
Continuing representations and warranties 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.1.1

	
 

	
Due incorporation 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.1.2

	
 

	
Corporate power 

	
 

	
 

	
 

	
 

	
 

	
each of the Borrowers has power to execute, deliver and perform its
obligations under the Underlying Documents and the relevant Borrowers’
Security Documents to which it is or is to be a party and to borrow the Total
Commitment and each of the other Security Parties has power to execute and
deliver and perform its obligations under the Security Documents and the
Underlying 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 any Borrower to borrow will be exceeded as a result of borrowing
the Loan; 

	
 

	
 

	
 

	
 

	
7.1.3

	
 

	
Binding obligations 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.1.4

	
 

	
No conflict with other obligations 

	
 

	
 

	
 

	
 

	
 

	
 

	
the execution and delivery of, the performance of their obligations
under, and compliance with the provisions of, the Underlying Documents and
the Security Documents by the relevant Security Parties will not: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
contravene any existing applicable law, statute, rule or regulation
or any judgment, decree or permit to which any of the Borrowers or any other
Security Party is subject; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
conflict with, or result in any breach of any of the terms of, or
constitute a default under, any agreement or other instrument to which any of
the Borrowers or any other Security Party is a party or is subject or by
which it or any of its property is bound; 

34

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
contravene or conflict with any provision of the constitutional
documents of any of the Borrowers or any other Security Party; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
result in the creation or imposition of or oblige any of the
Borrowers or any other Security Party to create any Encumbrance (other than a
Permitted Encumbrance) on any of the undertakings, assets, rights or revenues
of any of the Borrowers or any other Security Party; 

	
 

	
 

	
 

	
 

	
7.1.5

	
 

	
No filings required 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.1.6

	
 

	
Choice of law 

	
 

	
 

	
 

	
 

	
 

	
 

	
the choice of English law to govern the Underlying Documents and the
Security Documents (other than the Mortgages) and the choice of the law of
the relevant Flag State to govern each of the Mortgages, and the submissions
therein by the Security Parties to the non-exclusive jurisdiction of the
English courts are valid and binding; 

	
 

	
 

	
 

	
 

	
7.1.7

	
 

	
No immunity 

	
 

	
 

	
 

	
 

	
 

	
 

	
neither the Borrowers nor any other Security Party nor any of their
respective assets is entitled to immunity on the grounds of sovereignty or
otherwise from any legal action or proceeding (which shall include, without
limitation, suit, attachment prior to judgement, execution or other
enforcement); 

	
 

	
 

	
 

	
 

	
7.1.8

	
 

	
Consents obtained 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.1.9

	
 

	
Financial statements correct and complete 

	
 

	
 

	
 

	
 

	
 

	
 

	
the audited consolidated financial statements of the Corporate
Guarantor in respect of the financial year ended on 31 December 2010 as
delivered to the Agent, have been prepared in accordance with the Applicable Accounting
Principles which have been consistently applied and present fairly and
accurately the consolidated financial position of the Corporate Guarantor as
at the date they were prepared and the consolidated results of the operations
of the Corporate Guarantor for the financial period ended on such date and,
as at such date, no member of the Corporate Guarantor had any significant
liabilities (contingent or otherwise) or any material unrealised or
anticipated losses which are not disclosed by, or reserved against or
provided for in, such financial statements; and 

	
 

	
 

	
 

	
 

	
7.1.10

	
 

	
Borrowers’ own account 

35

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.2

	
 

	
Initial representations and warranties 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.2.1

	
 

	
Pari passu and subordinated indebtedness 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
any Indebtedness of the Borrowers or the Corporate Guarantor owing to
any of its respective shareholders or other members of the Group is
subordinated in all respects to the Borrowers’ obligations under this Agreement
and the Master Swap Agreements (in the case of the Borrowers) and to the
Corporate Guarantor’s obligations under the Corporate Guarantee (in the case
of the Corporate Guarantor); 

	
 

	
 

	
 

	
 

	
7.2.2

	
 

	
No default under other Borrowed Money 

	
 

	
 

	
 

	
 

	
 

	
 

	
none of the Borrowers nor any other Security Party is in default
under any agreement relating to Borrowed Money to which it is a party or by
which it may be bound; 

	
 

	
 

	
 

	
 

	
7.2.3

	
 

	
Information - full disclosure 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.2.4

	
 

	
No withholding Taxes 

	
 

	
 

	
 

	
 

	
 

	
 

	
no Taxes are imposed by withholding or otherwise on any payment to be
made by any of the Borrowers or any other Security Party under the Security
Documents to which such Borrower or any other Security Party is or is to be a
party or are imposed on or by virtue of the execution or delivery by the
Borrowers or any other Security Parties of the Security Documents; 

	
 

	
 

	
 

	
 

	
7.2.5

	
 

	
No Event of Default

	
 

	
 

	
 

	
 

	
 

	
 

	
no Event of Default has occurred and is continuing;

	
 

	
 

	
 

	
 

	
7.2.6

	
 

	
No default under Contracts or Refund Guarantees 

	
 

	
 

	
 

	
 

	
 

	
 

	
no Borrower is in default of any of its obligations under the
relevant Contract or any of its obligations upon the performance or
observance of which depends the continued liability of the Refund Guarantor
in accordance with the terms of any Refund Guarantee; 

	
 

	
 

	
 

	
 

	
7.2.7

	
 

	
No Encumbrance in respect of pre-delivery security 

36

	
 

	
 

	
 

	
 

	
 

	
 

	
no Borrower has previously charged, encumbered or assigned the
benefit of any of its rights, title and interest in or to the relevant
Contract or any Refund Guarantee and such benefit and all such rights, title
and interest are freely assignable and chargeable in the manner contemplated
by the Security Documents; 

	
 

	
 

	
 

	
 

	
7.2.8

	
 

	
The Ships 

	
 

	
 

	
 

	
 

	
 

	
 

	
each Ship will, on the Delivery Date relevant to such Ship, be: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
in the absolute ownership of the relevant Borrower who will, on and
after its Delivery Date, be the sole, legal and beneficial owner of such
Ship; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
operationally seaworthy and in every way fit for service; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
classed with the relevant Classification free of all requirements and
recommendations of the relevant Classification Society; 

	
 

	
 

	
 

	
 

	
7.2.9

	
 

	
Ships’ employment 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.2.10

	
 

	
Freedom from Encumbrances 

	
 

	
 

	
 

	
 

	
 

	
 

	
no Ship, nor its Earnings, Insurances or Requisition Compensation nor
the Operating Accounts nor the Charters nor any other properties or rights
which are, or are to be, the subject of any of the Security Documents nor any
part thereof will be, on the Drawdown Date of the Delivery Advance relevant
to such Ship, subject to any Encumbrance (except Permitted Encumbrances); 

	
 

	
 

	
 

	
 

	
7.2.11

	
 

	
Compliance with Environmental Laws and Approvals 

	
 

	
 

	
 

	
 

	
 

	
 

	
except as may already have been disclosed by the Borrowers in writing
to, and acknowledged in writing by, the Agent: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
7.2.12

	
 

	
No Environmental Claims 

37

	
 

	
 

	
 

	
 

	
 

	
 

	
except as may already have been disclosed by the Borrowers in writing
to, and acknowledged in writing by, the Agent, there is no Environmental
Claim pending against the Borrowers or any of the Ships or, to the best of
the Borrowers’ knowledge and belief (having made due enquiry), any of their
respective Environmental Affiliates; 

	
 

	
 

	
 

	
 

	
7.2.13

	
 

	
No potential Environmental Claims 

	
 

	
 

	
 

	
 

	
 

	
 

	
except as may already have been disclosed by the Borrowers in writing
to, and acknowledged in writing by, the Agent, there has been no emission,
spill, release or discharge of a Pollutant from any of the Ships; 

	
 

	
 

	
 

	
 

	
7.2.14

	
 

	
Underlying Documents 

	
 

	
 

	
 

	
 

	
 

	
 

	
the original executed Refund Guarantees delivered or to be delivered
to the Agent pursuant to clause 9.1 are, or will when delivered be, true and
complete originals of such documents and the copies of the other Underlying
Documents delivered or to be delivered to the Agent pursuant to clause 9.1 or
any of the other provisions of the Security Documents are, or will when
delivered be, true and complete copies of such documents; and all such
documents constitute valid and binding obligations of the Security Parties
and, to the Borrowers’ knowledge and belief, of the other parties thereto,
enforceable in accordance with their respective terms and there have been no
amendments or variations thereof or defaults thereunder; 

	
 

	
 

	
 

	
 

	
7.2.15

	
 

	
Shareholding 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
each of the Borrowers is a wholly-owned direct Subsidiary of the
Corporate Guarantor; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
no less than 40% of the total issued share capital and of the total
issued voting share capital of the Corporate Guarantor is ultimately
beneficially owned (either directly or indirectly) by members of the
Konstantakopoulos Family; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the Corporate Guarantor is controlled by members of the
Konstantakopoulos Family; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
each of the Managers is controlled by members of the
Konstantakopoulos Family; 

	
 

	
 

	
 

	
 

	
7.2.16

	
 

	
No litigation 

	
 

	
 

	
 

	
 

	
 

	
 

	
no litigation, arbitration, investigation or proceeding (administrative
or otherwise) is taking place against any of the Borrowers or any other
Security Party which could have a material adverse effect on the financial
position, state of affairs or prospects of any of the Borrowers or the
Corporate Guarantor or any other Security Party in light of which there is a
significant risk that the Corporate Guarantor or any Borrower or any other
Security Party is, or will later become, unable to discharge its liabilities
under the Security Documents as they fall due; 

	
 

	
 

	
 

	
 

	
7.2.17

	
 

	
No material adverse change 

	
 

	
 

	
 

	
 

	
 

	
 

	
no event has occurred or any other circumstances arisen or developed
including, without limitation, a material adverse change in the financial
position, state of affairs or prospects of any Security Party, in light of
which there is a significant risk that the Corporate Guarantor or any
Borrower or any other Security Party is, or will later become, unable to
discharge its liabilities under the Security Documents as they fall due; 

	
 

	
 

	
 

	
 

	
7.2.18

	
 

	
Solvency 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
none of the Borrowers nor the Corporate Guarantor is unable, or
admits or has admitted its inability, to pay its debts or has suspended
making payments on any of its debts; 

38

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
none of the Borrowers nor the Corporate Guarantor by reason of actual
financial difficulties has commenced negotiations with one or more of its
creditors with a view to rescheduling any of its Indebtedness; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
no moratorium has been declared in respect of any Indebtedness of any
Borrower or the Corporate Guarantor; 

	
 

	
 

	
 

	
 

	
7.2.19

	
 

	
ISPS Code 

	
 

	
 

	
 

	
 

	
 

	
 

	
with effect on the Delivery Date of a Ship, the relevant Borrower
shall have a valid and current ISSC in respect of that Ship and that Ship
shall be in compliance with the ISPS Code; and 

	
 

	
 

	
 

	
 

	
7.2.20

	
 

	
Application for DOC and SMC 

	
 

	
 

	
 

	
 

	
 

	
 

	
the Operator maintains a DOC for itself and, on the Delivery Date for
a Ship, it will have applied for an SMC in respect of such Ship. 

	
 

	
 

	
 

	
 

	
7.2.21

	
 

	
No breach of sanctions 

	
 

	
 

	
 

	
 

	
 

	
 

	
to the Borrowers’ knowledge neither the Borrowers nor any member of
the Group are currently the subject of any sanctions administered or enforced
by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC)
or the United Nations Security Council (UNSC) or the European Union or Her Majesty’s
Treasury (HMT) (collectively, the “Sanctions”)
nor are the Borrowers located or resident in a country or territory that is
the subject of the Sanctions. For the avoidance of doubt, the Borrowers each
merely by virtue of being a company incorporated under the laws of the
Republic of Liberia shall not be deemed to fall foul of the provisions of
this clause 7.2.21. 

	
 

	
 

	
 

	
 

	
7.3

	
 

	
Repetition of representations and
warranties 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
be deemed to further represent and warrant to each of the Creditors
that the then latest management accounts of the Borrowers delivered to the
Agent by the Borrowers under this Agreement (if any) present fairly and
accurately the financial position of the Borrowers as at the end of the
financial period to which the same relate and the results of the operations
of the Borrowers for the financial period to which the same relate and, as at
the end of such financial period, none of the Borrowers had any significant
liabilities (contingent or otherwise) or any material unrealised or
anticipated losses which are not disclosed by, or reserved against or
provided for in, such management accounts. 

	
 

	
 

	
 

	
 

	
8

	
 

	
Undertakings 

	
 

	
 

	
 

	
 

	
8.1

	
 

	
General 

	
 

	
 

	
 

	
 

	
 

	
 

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

39

	
 

	
 

	
 

	
 

	
8.1.1

	
 

	
Notice of Event of Default 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
promptly inform the Agent of any occurrence of which any of them
becomes aware which materially and adversely affects the ability of any
Security Party to perform its obligations under any of the Security Documents
or any of the Contracts to which it is or is to be a party and, without
limiting the generality of the foregoing, they will inform the Agent of any
Event of Default forthwith upon becoming aware thereof; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
promptly inform the Agent of any occurrence of which any of them
becomes aware which materially and adversely affects the ability or rights of
any Borrower to make any claims under the relevant Contract or any Refund
Guarantee or which might reduce or release any of the obligations of the
Builder under such Contract or the Refund Guarantor under any Refund
Guarantee; 

	
 

	
 

	
 

	
 

	
8.1.2

	
 

	
Consents and licences 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
8.1.3

	
 

	
Use of proceeds 

	
 

	
 

	
 

	
 

	
 

	
 

	
use the Loan or, as the case may be, the Advances for their own
benefit and under their full responsibility and exclusively for the purposes
specified in clauses 1.1 and 2.5; 

	
 

	
 

	
 

	
 

	
8.1.4

	
 

	
Pari passu and subordination 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
ensure that their obligations under this Agreement and the Master
Swap Agreements shall, without prejudice to the provisions of clause 8.3 and
the security intended to be created by the Security Documents, at all times
rank at least pari passu with all their other present and future unsecured
and unsubordinated Indebtedness with the exception of any obligations which
are mandatorily preferred by law and not by contract; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
ensure that the obligations (if any) of the Borrowers to repay any
loan advanced to them by their shareholders or any other member of the Group
are at all times fully subordinated towards their obligations to the
Creditors under this Agreement and the other Security Documents and that any
such loans or advances are and remain at all times on terms and conditions
acceptable to the Agent in all respects; 

	
 

	
 

	
 

	
 

	
8.1.5

	
 

	
Financial statements 

	
 

	
 

	
 

	
 

	
 

	
 

	
upon the Agent’s request following the end of a financial year,
prepare or cause to be prepared unaudited management accounts of each of the
Borrowers in respect of each financial year (including prior financial years)
and deliver as many copies of the same as the Agent may reasonably require as
soon as practicable but not later than the later of (a) thirty (30) days from
the Agent’s request and (b) one hundred and eighty (180) days from the end of
the financial period to which they relate; 

	
 

	
 

	
 

	
 

	
8.1.6

	
 

	
Delivery of reports 

	
 

	
 

	
 

	
 

	
 

	
 

	
deliver to the Agent sufficient copies for all the Banks of every
report, circular, notice or like document issued by the Borrowers or the
Corporate Guarantor to their shareholders or creditors generally, at the same
time when it is issued or given, unless the Borrowers have already advised
the Agent in writing that such information appears on the official website of
any one of the Corporate Guarantor, the New York Stock Exchange or the
Securities and Exchange Commission of the U.S.A.; 

40

	
 

	
 

	
 

	
 

	
8.1.7

	
 

	
Provision of further information 

	
 

	
 

	
 

	
 

	
 

	
 

	
provide the Agent with such financial and other information
concerning the Borrowers, the other Security Parties and their respective
affairs as the Agent may from time to time reasonably require, including,
without limitation, regarding their financial standing, commitments,
operations, vessel sales or purchases, any new borrowings, any material
litigation, arbitration and administrative proceedings and all major
financial developments in relation to each Security Party; 

	
 

	
 

	
 

	
 

	
8.1.8

	
 

	
Know your customer information 

	
 

	
 

	
 

	
 

	
 

	
 

	
deliver to the Agent such documents and evidence as the Agent shall
from time to time require relating to the verification of identity and
knowledge of the Agent’s or any Bank’s or any Swap Provider’s customers and
the compliance by the Agent or any Bank or any Swap Provider (as the case may
be) with all necessary “know your customer” or similar checks, always on the
basis of applicable laws and regulations of the Agent’s or any Bank’s or any
Swap Provider’s own internal guidelines, in each case as such laws,
regulations or internal guidelines apply from time to time;

	
 

	
 

	
 

	
 

	
8.1.9

	
 

	
Obligations under Security Documents 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
8.1.10

	
 

	
Compliance with Code 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
8.1.11

	
 

	
Withdrawal of DOC and SMC 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
8.1.12

	
 

	
Issuance of DOC and SMC 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
8.1.13

	
 

	
ISPS Code Compliance 

	
 

	
 

	
 

	
 

	
 

	
 

	
and will procure that the relevant Manager(s) or any Operator will, with
effect from the Delivery Date for a Ship and at all times thereafter: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
maintain at all times a valid and current ISSC in respect of that
Ship; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
immediately notify the Agent in writing of any suspension,
cancellation or modification of the ISSC in respect of a Ship; 

	
 

	
 

	
 

	
 

	
8.1.14

	
 

	
Conditions subsequent - First Advances; Delivery Advances 

	
 

	
 

	
 

	
 

	
 

	
 

	
deliver to the Agent: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
not later than 15 days after the Drawdown Date of the first Advance
in respect of a Ship: 

41

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
the Refund Guarantee Assignment Consent and Acknowledgement in
respect of the Refund Guarantee for all pre-delivery instalments of the
Contract Price for that Ship, duly executed by the parties thereto;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
if available to the Borrowers, evidence in form and substance
satisfactory to the Agent of the authority of the relevant Refund Guarantor
executing the above said acknowledgement (except if the same has been sent to
the Agent by swift); 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
not later than 45 days after the Drawdown Date of the first Advance
in respect of a Ship: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
a legal opinion (at the expense of the Borrowers) issued by the
Agent’s special legal advisers on matters of Korean law in form and substance
satisfactory to the Agent (it being understood that, as is customary in
banking practice, the procurement of the legal opinion will be the
responsibility of the Agent and its legal counsel); and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
not later than 24 hours after the Delivery of a Ship, evidence in
form and substance satisfactory to the Agent that the Charterer has accepted
delivery of that Ship under the relevant Charter (it being agreed that
evidence that the first payment of hire under such Charter or written
schedule or directions by the Charterer for the employment of that Ship under
such Charter shall constitute such evidence satisfactory to the Agent for the
purposes of this paragraph (c)); and 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.1.15

	
 

	
Supervision 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ensure that each Borrower, or the relevant Manager(s) or any other
person appointed by the relevant Manager(s) (but no other person), will
supervise and superintend the construction of its Ship; 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.1.16

	
 

	
Charters etc. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
advise the Agent promptly of any charterparty or other contract of
employment of a Ship with a tenor exceeding twelve (12) months (other than
the Charters), forthwith after its execution and: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
forthwith after its execution deliver a certified copy of each such
charterparty or other contract of employment to the Agent; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
forthwith following demand by the Agent execute: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
a charter assignment of any such charterparty or other contract of
employment in favour of the Security Agent in a form similar to that of the
Charter Assignments; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
any notice of assignment required in connection therewith in a form
acceptable to the Agent in its reasonable discretion; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
promptly procure the service of any such notice of assignment on the
relevant charterer and the acknowledgement of such notice by the relevant
charterer in a form reasonably acceptable to the Agent and the relevant
charterer; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
forthwith on the Agent’s request, deliver to the Agent such documents
of the type specified in schedule 3 in relation to any such charterparty,
contract, assignment, notice or acknowledgement as the Agent may reasonably
require and which are available to the Borrowers; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
pay all legal and other costs incurred by the Agent or any other
Creditor in connection with any such charter assignments or any other matters
referred to in this clause 

42

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.1.16 forthwith following the Agent’s demand (provided that any such
expenses incurred prior to an Event of Default shall be reasonable and
documented);

	
 

	
 

	
 

	
 

	
 

	
 

	
8.1.17

	
 

	
Taxes 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
and will procure that the Corporate Guarantor will, pay any and all
Taxes owing by it in any jurisdiction at the time they are due; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.1.18

	
 

	
Change of Manager 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Other than when appointing Costamare Shipping, Ciel Management and/or
Shanghai Costamare, which appointment will be subject to the consent of the
Majority Banks, ensure that, on or before the appointment of any person as a
manager of a Ship (and subject always to the consent of the Creditors if and
when the same is required under the Security Documents), they will: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
deliver to the Agent a certified copy of the Management Agreement
duly executed by that Manager and the Borrower owning such Ship;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
procure that such Manager will have created and delivered to the
Agent a Manager’s Undertaking in respect of that Ship before such Manager’s
appointment has become effective under that Management Agreement; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
deliver to the Agent any documents and evidence of the type referred
to in schedule 3 in relation to that Manager’s Undertaking and that Manager
as the Agent may in its reasonable discretion require, 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
each at the cost and expense of the Borrowers. 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.1.19

	
 

	
No employment of Ships in breach of Sanctions 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrowers shall not directly or indirectly, knowingly allow the
use or operation of the Ships in breach of the Sanctions. For the avoidance
of doubt, the Borrowers each by virtue of being a company incorporated under
the laws of the Republic of Liberia shall not be deemed to fall foul of the
provisions of this clause 8.1.19. 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.2

	
 

	
Security value maintenance 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.2.1

	
 

	
Security shortfall 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
If, at any time after the Drawdown Date of the Delivery Advance in
respect of a Ship: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
a Charterer Event has occurred in relation to that Ship and at that
time and for as long as that Ship has not yet become subject to, and
delivered for service under, a Qualifying Charter, the Security Value for
that Ship shall be less than the Security Requirement for such Ship; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
a New Charterer Event has occurred in relation to that Ship and at
that time and for as long as that Ship has not yet become subject to, and
delivered for service under another Qualifying Charter, the Security Value
for that Ship shall be less than the Security Requirement for such Ship; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
the Agent (acting on the instructions of the Majority Banks) shall
give notice to the Borrowers requiring that such deficiency be remedied and
then the Borrowers shall, within a period of thirty (30) days of the date of
receipt by the Borrowers of the Agent’s said notice, either: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
prepay such part of the Tranche relevant to such Ship as will result
in the Security Requirement for such Ship after such prepayment (taking into
account any other 

43

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
repayment of that Tranche made between the date of the notice and the
date of such prepayment) being equal to the Security Value for such Ship; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
constitute in favour of the Agent a first priority cash pledge over a
Dollar account in the name of a member of the Group for an amount standing to
the credit of such account which when added to the Security Value for such
Ship, shall not be less than the Security Requirement for such Ship as at such
date; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
constitute to the satisfaction of the Agent such further security for
the Loan and any amounts owing under the Master Swap Agreements as shall be
acceptable to the Banks having a value for security purposes (as determined
by the Agent in accordance with clause 8.2.5) at the date upon which such
further security shall be constituted which, when added to the Security Value
for such Ship, shall not be less than the Security Requirement for such Ship
as at such date. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
8.2.2

	
 

	
Valuation of Mortgaged Ships 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Each Mortgaged Ship shall, for the purposes of this Agreement, be
valued in Dollars as and when the Agent (acting on the instructions of the
Majority Banks) shall require (and at least twice per calendar year) but
only: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
if a Charterer Event has occurred in relation to that Ship and for as
long as that Ship has not yet become subject to, and delivered for service
under, a Qualifying Charter; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
if a New Charterer Event has occurred in relation to that Ship and
for as long as that Ship has not yet become subject to, and delivered for
service under, another Qualifying Charter. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Each such valuation for a Mortgaged Ship shall be made by two (2)
Approved Shipbrokers, each nominated by the Borrowers approved by, and
addressed to, the Agent. Each valuation shall be made without, unless
required by the Agent or the Borrowers, physical inspection, and on the basis
of a sale for prompt delivery for cash at arm’s length, on normal commercial
terms, as between a willing buyer and a willing seller, without taking into
account the benefit of any charterparty or other engagement concerning the
relevant Mortgaged Ship. The arithmetic mean of the two valuations shall
constitute the value of such Mortgaged Ship for the purposes of this clause
8.2 Provided however that if
such two (2) valuations in respect of a Ship vary by more than ten per cent
(10%) (by reference to the higher figure), the Agent shall appoint a third
Approved Shipbroker to value such Ship on the same basis as the other two (2)
valuations and, in that case, the arithmetic mean of the three (3) valuations
shall constitute the value of such Mortgaged Ship for the purposes of this
clause 8.2. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
The value of each Mortgaged Ship determined in accordance with the
provisions of this clause 8.2.2 shall be binding upon the parties hereto
until such time as any further such valuation shall be obtained. 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.2.3

	
 

	
Information 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
8.2.4

	
 

	
Costs 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
All costs in connection with the Agent
obtaining any of the valuations of each of the Mortgaged Ships referred to in
clause 8.2.2, and all costs in connection with any valuation 

44

	
 

	
 

	
 

	
 

	
 

	
referred to in schedule 3, any valuation either of any additional
security for the purposes of ascertaining the Security Value in respect of
any Ship at any time while an Event of Default is continuing or necessitated
by the Borrowers electing to constitute additional security pursuant to
clause 8.2.1(b), shall be borne by the Borrowers. 

	
 

	
 

	
 

	
8.2.5

	
 

	
Valuation of additional security 

	
 

	
 

	
 

	
 

	
 

	
For the purposes of this clause 8.2, the market value of any
additional security (not being a ship) provided or to be provided to the
Creditors or any of them shall be determined by the Agent in its absolute
discretion without any necessity for the Agent assigning any reason therefor.
If such additional security consists of a ship, the value of such ship shall
be determined in accordance with clause 8.2.2 (except that if a ship is
subject to a charterparty with a remaining tenor in excess of 12 months, the
benefit or detriment of such charterparty shall be taken into account in that
valuation). All costs of each such valuation will be paid by the Borrowers in
accordance with clause 8.2.4. If the additional security is in the form of a
Dollar cash deposit, full credit shall be given for such cash on a “Dollar
for Dollar” basis. If the additional security is in the form of traded bonds,
shares or other securities, their market value shall be their quoted trading
price at any relevant time of calculation (and the Agent shall be entitled to
calculate their value at any time and from time to time).

	
 

	
 

	
 

	
8.2.6

	
 

	
Documents and evidence 

	
 

	
 

	
 

	
 

	
 

	
In connection with any additional security provided in accordance
with this clause 8.2, the Agent shall be entitled to receive such evidence
and documents of the kind referred to in schedule 3 as may in the Agent’s
reasonable opinion be necessary and such favourable legal opinions as the
Agent shall in its reasonable discretion require.

	
 

	
 

	
 

	
8.2.7

	
 

	
Release of additional security 

	
 

	
 

	
 

	
 

	
 

	
If, based on valuations obtained in accordance with the provisions of
clause 8.2.2, the Security Value for a Ship shall at any time exceed the
Security Requirement for a Ship, and the Borrowers shall have previously
provided further security to the Banks and the other Creditors pursuant to
clause 8.2.1(b), the Agent (acting on the instructions of the Majority Banks)
shall, as soon as reasonably practicable after notice from the Borrowers to
do so and subject to being indemnified for its reasonable cost of doing so,
release or procure the release of any such further security specified by the
Borrowers provided that the Agent is satisfied that, immediately following
such release (a) the Security Value for each Ship to which clause 8.2.1 is
applicable will exceed the Security Requirement for that Ship and (b) no
Event of Default has occurred which is then continuing or will occur as a
result of such release. The Borrowers shall be entitled to obtain and provide
the valuations directly to the Agent (to avoid any delay) subject to the
valuations being in accordance with Clause 8.2.2 and at the cost of the
Borrowers.

	
 

	
 

	
 

	
8.3

	
 

	
Negative undertakings 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.3.1

	
 

	
Negative pledge 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.3.2

	
 

	
No merger 

	
 

	
 

	
 

	
 

	
 

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

45

	
 

	
 

	
 

	
8.3.3

	
 

	
Disposals 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.3.4

	
 

	
Other business 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.3.5

	
 

	
Acquisitions 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.3.6

	
 

	
Other obligations 

	
 

	
 

	
 

	
 

	
 

	
incur any obligations except for obligations arising under the
Underlying Documents or the Security Documents to which they are a party or
contracts entered into in the ordinary course of their business of performing
the Contracts and owning, operating and chartering the Ships;

	
 

	
 

	
 

	
8.3.7

	
 

	
No borrowing 

	
 

	
 

	
 

	
 

	
 

	
incur any Borrowed Money except for Borrowed Money pursuant to or
permitted by the Security Documents;

	
 

	
 

	
 

	
8.3.8

	
 

	
Repayment of borrowings 

	
 

	
 

	
 

	
 

	
 

	
repay or prepay the principal of, or pay interest on, or any other
sum in connection with, any of their Borrowed Money except for Borrowed Money
pursuant to the Security Documents;

	
 

	
 

	
 

	
8.3.9

	
 

	
Guarantees 

	
 

	
 

	
 

	
 

	
 

	
issue any guarantees or indemnities or otherwise become directly or
contingently liable for the obligations of any person, firm, or corporation
except pursuant to the Security Documents and except for (a) guarantees or
indemnities from time to time required in the ordinary course by any
protection and indemnity or war risks association with which a Ship is
entered, (b) guarantees required to procure the release of a Ship from any
arrest, detention, attachment or levy or guarantees or undertakings required
for the salvage of a Ship and (c) other guarantees in the ordinary course of
their business but not exceeding the amount of $500,000 per Borrower per
calendar year;

	
 

	
 

	
 

	
8.3.10

	
 

	
Loans 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.3.11

	
 

	
Sureties 

	
 

	
 

	
 

	
 

	
 

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

46

	
 

	
 

	
 

	
 

	
 

	
 

	
or undertakings required for the salvage of a Ship or (c) other
guarantees in the ordinary course of their business not exceeding the amount
of $500,000 per Borrower per calendar year);

	
 

	
 

	
 

	
8.3.12

	
 

	
Share capital and distribution 

	
 

	
 

	
 

	
 

	
 

	
purchase or otherwise acquire for value any shares of their capital
or declare or pay any dividends or distribute any of their present or future
assets, undertakings, rights or revenues to any of their shareholders Provided always that each Borrower may
declare or pay dividends to its shareholders if no Event of Default shall
have occurred and be continuing at the time of, or would result from, the
declaration or payment of such dividends;

	
 

	
 

	
 

	
8.3.13

	
 

	
Subsidiaries 

	
 

	
 

	
 

	
 

	
 

	
form or acquire any Subsidiaries;

	
 

	
 

	
 

	
8.3.14

	
 

	
Manager

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
appoint any manager in respect of the Ships or any of them other than
a Manager; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
terminate or materially amend the terms of any Management Agreement,
unless in doing so, they remain in compliance with clause 8.1.18; 

	
 

	
 

	
 

	
 

	
8.3.15

	
 

	
Financial year and constitutional documents

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
change, cause, permit or agree to any change in, the way of
computation of their financial year; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
change, amend or vary, or agree to or permit any material change,
amendment or variation of or to, their constitutional documents;

	
 

	
 

	
 

	
8.3.16

	
 

	
Intra-Group transactions

	
 

	
 

	
 

	
 

	
 

	
enter into any transactions, agreements or arrangements with any of
their Related Companies or other members of the Group, other than on an arm’s
length basis and for full value and consideration; or

	
 

	
 

	
 

	
8.3.17

	
 

	
Derivative transactions

	
 

	
 

	
 

	
 

	
 

	
enter into any interest rate, currency or other swap, foreign
exchange contracts, futures or other derivative transactions, agreements or
instruments other than Designated Transactions with the Swap Providers under
the Master Swap Agreements and other than on terms and conditions agreed
between the Borrowers and the Swap Providers.

	
 

	
 

	
 

	
8.4

	
 

	
Pre-delivery positive undertakings

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
8.4.1

	
 

	
Conveyance on default

	
 

	
 

	
 

	
 

	
 

	
where any Ship is (or is to be) sold in exercise of any power
contained in the relevant Pre-delivery Security Assignment or otherwise
conferred on the Security Agent or any other Creditor, procure that the
relevant Borrower shall execute, forthwith upon request by the Agent, such
form of conveyance of such Ship as the Agent may require;

	
 

	
 

	
 

	
8.4.2

	
 

	
Flag State

	
 

	
 

	
 

	
 

	
 

	
not later than thirty (30) days prior to the Delivery Date of a Ship,
obtain the Agent’s written approval of the Flag State for such Ship (if other
than Greece, Liberia or Hong Kong); and

47

	
 

	
 

	
 

	
8.4.3

	
 

	
Mortgage

	
 

	
 

	
 

	
 

	
 

	
immediately upon Delivery of a Ship, execute and procure that the
relevant Borrower shall execute, and procure the registration of, the
Mortgage for such Ship under the laws and flag of the relevant Flag State and
the other Security Documents in relation to such Ship and otherwise deliver
to the Agent the documents and evidence set out in clause 9.1.3 in respect of
such Ship.

	
 

	
 

	
 

	
8.5

	
 

	
Pre-delivery negative undertaking

	
 

	
 

	
 

	
 

	
 

	
The Borrowers hereby jointly and severally further undertake and
agree with each Creditor that they will not, without the prior written
consent of the Agent (and then only subject to such conditions as the Agent
(acting on the instructions of the Majority Banks) may impose) let or agree
to let any Ship: 

	
 

	
 

	
 

	
8.5.1

	
 

	
on demise charter for any period; or

	
 

	
 

	
 

	
8.5.2

	
 

	
by any time or consecutive voyage charter for a term which exceeds,
or which by virtue of any optional extensions therein contained may exceed,
twelve (12) months’ duration (except under the relevant Charter); or

	
 

	
 

	
 

	
8.5.3

	
 

	
on terms whereby more than two (2) months’ hire (or the equivalent)
is payable in advance; or

	
 

	
 

	
 

	
8.5.4

	
 

	
otherwise than on an arm’s length basis.

	
 

	
 

	
 

	
9

	
 

	
Conditions

	
 

	
 

	
 

	
9.1

	
 

	
Documents and evidence

	
 

	
 

	
 

	
9.1.1

	
 

	
Commitments

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
9.1.2

	
 

	
Contract Instalment Advances

	
 

	
 

	
 

	
 

	
 

	
The obligation of the Banks to make available a Contract Instalment
Advance in respect of a Ship shall be subject to the condition that the Agent
or its duly authorised representative shall have received, on or prior to the
drawdown of the relevant Contract Instalment Advance for the relevant Ship,
the relevant documents and evidence specified in Part 2 of schedule 3 in
respect of the relevant Contract Instalment Advance and the relevant Ship, in
form and substance reasonably satisfactory to the Agent.

	
 

	
 

	
 

	
9.1.3

	
 

	
Delivery Advances

	
 

	
 

	
 

	
 

	
 

	
The obligation of the Banks to make available the Delivery Advance in
respect of a Ship shall be subject to the condition that the Agent or its
duly authorised representative shall have received, on or prior to the
drawdown of the Delivery Advance for such Ship, the documents and evidence
specified in Part 3 of schedule 3 in respect of such Ship, in form and
substance reasonably satisfactory to the Agent.

48

	
 

	
 

	
 

	
9.2

	
 

	
General conditions precedent

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
9.2.1

	
 

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

	
 

	
 

	
 

	
9.2.2

	
 

	
no Charterer Event shall have occurred in respect of the Ship to
which the relevant Advance relates; and

	
 

	
 

	
 

	
9.2.3

	
 

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

	
 

	
 

	
 

	
9.3

	
 

	
Waiver of conditions precedent

	
 

	
 

	
 

	
 

	
 

	
The conditions specified in this clause 9 are inserted solely for the
benefit of the Banks and may be waived by the Agent (acting on the unanimous
prior written consent of all the Lenders) in whole or in part and with or
without conditions.

	
 

	
 

	
 

	
10

	
 

	
Events of Default

	
 

	
 

	
 

	
10.1

	
 

	
Events

	
 

	
 

	
 

	
 

	
 

	
There shall be an Event of Default if:

	
 

	
 

	
 

	
10.1.1

	
 

	
Non-payment: any Security Party fails to pay
any sum payable by it under any of the Security Documents at the time, in the
currency and in the manner stipulated in the Security Documents or the
Underlying Documents (and so that, for this purpose, sums payable on demand
shall be treated as having been paid at the stipulated time if paid within
three (3) Banking Days of demand), unless any such failure to pay is caused
by an administrative or technical error in the banking system, and payment of
the relevant sum is made within 3 days of its due date; or

	
 

	
 

	
 

	
10.1.2

	
 

	
Breach of Insurance and certain other
obligations: any of the Borrowers or any other person fails to obtain and/or
maintain the Insurances for any Mortgaged Ship in accordance with the
requirements of the relevant Ship Security Documents or if any insurer in
respect of such Insurances cancels such Insurances or disclaims liability by
reason, in either case, of mis-statement in any proposal for such Insurances
or for any other failure or default on the part of any of the Borrowers or
any other person, or any of the Borrowers commits any breach of or omits to
observe any of the obligations or undertakings expressed to be assumed by
them under clauses 8.1.5 or 8.1.18 or 8.2 or 8.3 or 8.4 or 8.5 of this Agreement,
or which have been assumed by them pursuant to the proviso at the end of this
clause 10.1, or the Corporate Guarantor commits any breach of or omits to
observe any of the obligations or undertakings expressed to be assumed by it
under clauses 5.1.4 or 5.1.5 or 5.2 or 5.3 of the Corporate Guarantee; or

	
 

	
 

	
 

	
10.1.3

	
 

	
Breach of other obligations: any Security Party or any
Manager commits any breach of or omits to observe any of its obligations or
undertakings expressed to be assumed by it under any of the Security
Documents or a Manager’s Undertaking to which it is a party (other than those
referred to in clauses 10.1.1 and 10.1.2 above) and, in respect of any such
breach or omission which in the opinion of the Agent (acting on the
instructions of the Majority Banks) is capable of remedy, such action as the
Agent (acting on the instructions of the Majority Banks) may require shall
not have been taken within twenty (20) days of the Agent notifying the
relevant Security Party or (as the case may be) any Manager of such default
and of such required action; or

49

	
 

	
 

	
 

	
 

	
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 to which it is a party or in
any notice, certificate or statement referred to in or delivered under any of
the Security Documents to which it is a party is or proves to have been
incorrect or misleading in any material respect; or

	
 

	
 

	
 

	
10.1.5

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a) 

	
in the case of each Security Party (other than the Corporate
Guarantor), the amount or aggregate amount at any one time of all Borrowed
Money of that Security Party in relation to which any of the foregoing events
shall have occurred and be continuing is equal to or greater than One million
Dollars ($1,000,000) or its equivalent in the currency in which the same is
denominated and payable;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
in the case of the Corporate Guarantor only, the amount or aggregate
amount at any one time of all Borrowed Money of the Corporate Guarantor in
relation to which any of the foregoing events shall have occurred and be
continuing is equal to or greater than Three million Dollars ($3,000,000) or
its equivalent in the currency in which the same is denominated and payable;

	
 

	
 

	
 

	
 

	
 

	
For the avoidance of doubt, for the purposes of this clause 10.1.5, “Borrowed Money” shall not include any
amounts owing to the Creditors under this Agreement and/or any of the other
Security Documents; or

	
 

	
 

	
 

	
10.1.6

	
 

	
Legal process: any judgment or order is made
against any Security Party in respect of an amount exceeding $1,000,000 in
the case of the Corporate Guarantor or $3,000,000 in the case of any other
Security Party, and the same is not stayed or complied with within fifteen
(15) days; or a creditor attaches or takes possession of, or a distress,
execution, sequestration or other process is levied or enforced upon or sued
out against, any of the undertaking, assets, rights or revenues of any
Security Party in respect of an amount exceeding $1,000,000 in the case of
the Corporate Guarantor or $3,000,000 in the case of any other Security
Party, and the same is not discharged within fifteen (15) days; or

	
 

	
 

	
 

	
10.1.7

	
 

	
Insolvency: any Security Party or the Refund
Guarantor is unable or admits inability to pay its debts as they fall due; or
suspends making payments on any of its debts or announces an intention to do
so; or becomes insolvent; or suffers the declaration of a moratorium in
respect of any of its Indebtedness; or any corporate action, legal
proceedings or other procedure or step is taken in relation to any of the
above Provided however that: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
mere discussion about the mere possibility of taking any such a step
in relation to any of the above during a board meeting, shall not constitute
an Event of Default under this clause 10.1.7;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
a mere petition or legal proceedings initiated by a third party,
which the Borrowers can demonstrate to the satisfaction of the Agent in its
absolute discretion, by providing an opinion of leading counsel to that
effect, is frivolous, vexatious or an abuse of the process of the court or
relates to a claim to which the relevant Security Party has a 

50

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
good defence and which is being vigorously contested by the relevant
Security Party, shall not constitute an Event of Default under this clause
10.1.7; or

	
 

	
 

	
 

	
10.1.8

	
 

	
Reduction or loss of capital: a meeting is convened by any
Borrower for the purpose of passing any resolution to reduce or redeem any of
its share capital; or

	
 

	
 

	
 

	
10.1.9

	
 

	
Winding up: any corporate action, legal proceedings
or other procedure or step is taken for the purpose of winding-up any
Security Party or the Refund Guarantor; or an order is made or resolution
passed for the winding up of any Security Party or the Refund Guarantor; or a
notice is issued convening a meeting for the purpose of passing any such
resolution unless, in the case of an involuntary petition, the petition is
being contested in good faith and on substantial grounds and is dismissed or
withdrawn within thirty (30) days of the presentation of the petition above
(but mere discussion about the mere possibility of taking any such a step in
relation to any of the above during a board meeting, shall not constitute an
Event of Default); or

	
 

	
 

	
 

	
10.1.10

	
 

	
Administration: any petition is presented, notice
given or other step is taken for the purpose of the appointment of an
administrator of any Security Party or the Refund Guarantor or an
administration order is made in relation to any Security Party or the Refund
Guarantor; or

	
 

	
 

	
 

	
10.1.11

	
 

	
Appointment of receivers, managers etc.: any administrative or other
receiver, liquidator, compulsory manager or other similar officer is
appointed of any Security Party or the Refund Guarantor 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

	
 

	
 

	
 

	
10.1.12

	
 

	
Compositions: any corporate action, legal
proceedings or other procedures or steps are taken, or negotiations
commenced, by any Security Party 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 the Refund Guarantor, in any country or territory in which
any of them carries on business or to the jurisdiction of whose courts any
part of their assets is subject, any event which, in the reasonable opinion
of the Agent, appears in that country or territory to correspond with, or
have an effect equivalent or similar to, any of those mentioned in clauses
10.1.6 to 10.1.12 (inclusive) in respect of that Security Party and/or the
Refund Guarantor (as the case may be) or any Security Party or the Refund
Guarantor 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 the Refund
Guarantor suspends or ceases to carry on its business; or

	
 

	
 

	
 

	
10.1.15

	
 

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

	
 

	
 

	
 

	
10.1.16

	
 

	
Invalidity: any of the Security Documents or
a Refund Guarantee 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 or a Refund
Guarantee shall at any time and for any reason be contested by any Security
Party or any other person which is a party thereto or (in the case of a
Refund Guarantee) by the Refund Guarantor, or if any such Security Party or
(as the case may be) the Refund Guarantor or such other person shall deny
that it has any, or any further, liability thereunder; or

	
 

	
 

	
 

	
10.1.17

	
 

	
Unlawfulness: 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 a Creditor to exercise the rights or any of them vested in
it under any of the Security Documents or otherwise, unless the Majority
Banks are satisfied that through 

51

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
the implementation of alternative arrangements satisfactory to the
Majority Banks, the unlawfulness or impossibility will be overcome or
rectified within 10 days from its occurrence but without in the meantime
jeopardising in any way the position of the Creditors under this Agreement
and the other Security Documents or the Encumbrances created by the Security
Documents (and such unlawfulness or impossibility is actually overcome or
rectified within such 10 day period); or

	
 

	
 

	
 

	
10.1.18

	
 

	
Repudiation: any Security Party repudiates
any of the Security Documents or threatens, or expresses 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

	
 

	
Material adverse effect: any other event occurs or any
other circumstances arise or develop including, without limitation, a
material adverse change in the financial position, state of affairs or
prospects of any Borrower or the Corporate Guarantor, in light of which the
Majority Banks reasonably consider that there is a significant risk that any
Borrower or the Corporate Guarantor or any other Security Party is, or will
later become, unable to discharge its liabilities under the Security
Documents as they fall due; or

	
 

	
 

	
 

	
10.1.21

	
 

	
Arrest: any Ship is arrested,
confiscated, seized, taken in execution, impounded, forfeited, detained in
exercise or purported exercise of any possessory lien or other claim or
otherwise taken from the possession of the relevant Borrower and the relevant
Borrower shall fail to procure the release of such Ship within a period of
ten (10) days thereafter; or

	
 

	
 

	
 

	
10.1.22

	
 

	
Registration: the registration of any Ship
under the laws and flag of the relevant Flag State is cancelled or terminated
without the prior written consent of the Majority Banks or the registration
of such Ship is not renewed at least thirty (30) days prior to the expiry of
such registration; or

	
 

	
 

	
 

	
10.1.23

	
 

	
Unrest: the Flag State of any Ship
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:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
such event could in the opinion of the Agent (acting on the
instructions of the Majority Banks) reasonably be expected to have a material
adverse effect on the security constituted by any of the Security Documents;
and

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Borrower owning such Ship has failed within thirty (30) days from
receiving notice from the Agent (acting on the instructions of the Majority
Banks) to this effect to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
delete the relevant Ship from its existing Flag State;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
register such Ship under another Flag State through a relevant
Registry; and

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
execute, at its own cost and expense, such other security (including
a mortgage, deed of covenant and general assignment) in favour of the
Creditors over the relevant Ship, its Earnings, Insurances and Requisition
Compensation, as the Agent may in its reasonable discretion require; or

	
 

	
 

	
 

	
10.1.24

	
 

	
Environment: any Borrower and/or any of their
respective Environmental Affiliates fails to comply with any Environmental
Law or any Environmental Approval or any of the Ships is involved in any
incident which gives rise to an Environmental Claim if, in any such case,
such non-compliance or incident or the consequences thereof could, in the
opinion of the Majority Banks acting through the Agent, reasonably be
expected to have a material adverse effect on the ability of any Security
Party to perform all or any of its obligations under or otherwise to comply
with the terms of any of the Security Documents; or

	
 

	
 

	
 

	
10.1.25

	
 

	
P&I: any Borrower or any other person
fails or omits to comply with any requirements of the protection and
indemnity association or other insurer with which a Ship is entered for 

52

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
insurance or insured against protection and indemnity risks
(including oil pollution risks) to the effect that any cover (including,
without limitation, any cover in respect of liability for Environmental
Claims arising in jurisdictions where such Ship operates or trades) is liable
to cancellation, qualification or exclusion at any time; or

	
 

	
 

	
 

	
10.1.26

	
 

	
Shareholdings: without the prior written
consent of the Majority Banks:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
any of the Borrowers ceases at any time to be a wholly-owned direct
Subsidiary of the Corporate Guarantor; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
at any time members of the Konstantakopoulos Family cease to control
any of the Managers; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
any person, or persons acting in concert (other than any financial
institution acting as a passive investor), at any time (i) control the
Corporate Guarantor or (ii) become, directly or indirectly, the legal and/or
beneficial and/or ultimate beneficial owners of a higher percentage of the
total issued share capital of the Corporate Guarantor, than the percentage of
the total issued share capital of the Corporate Guarantor ultimately and
beneficially owned by all members of the Konstantakopoulos Family at that
time; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
at any time while the shares of the Corporate Guarantor are listed
and trade on the New York Stock Exchange, members of the Konstantakopoulos
Family cease (i) to control the Corporate Guarantor or (ii) to be the
ultimate beneficial owners of at least forty per cent (40%) of the total
issued share capital, or of the total issued voting share capital, of the
Corporate Guarantor (either directly or indirectly); or

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
at any time after the shares of the Corporate Guarantor are de-listed
or cease to trade on the New York Stock Exchange, members of the
Konstantakopoulos Family cease (i) to control the Corporate Guarantor or (ii)
to be the ultimate beneficial owners of one hundred per cent (100%) of the
total issued share capital, or of the total issued voting share capital, of
the Corporate Guarantor (either directly or indirectly); or

	
 

	
 

	
 

	
 

	
 

	
 

	
10.1.27

	
 

	
Termination or variation of Assigned
Contracts: any Assigned Contract is terminated or rescinded for any reason
whatsoever (except with the prior written consent of the Majority Banks); or
any Assigned Contract is frustrated; or any Assigned Contract is varied in
any manner not permitted by or pursuant to the relevant Pre-delivery Security
Assignment or this Agreement; or

	
 

	
 

	
 

	
10.1.28

	
 

	
Termination of Assigned Refund Guarantees: any Assigned Refund Guarantee is
repudiated, cancelled, rescinded or otherwise terminated or expires (other
than by the return of such Assigned Refund Guarantee by the relevant Borrower
to the Builder and/or the Refund Guarantor following the Delivery of the
relevant Ship); or

	
 

	
 

	
 

	
10.1.29

	
 

	
Non-Delivery of Ship or non-drawing of
Delivery Advance: any Ship is not delivered to, and accepted by,
the relevant Borrower under the relevant Assigned Contract or the Delivery
Advance for such Ship is not drawn down, in either case, on or before the
Final Availability Date for the Delivery Advance relevant to such Ship; or

	
 

	
 

	
 

	
10.1.30

	
 

	
Builder’s defaults: any of the events specified in
Article XI.3 of any Assigned Contract occurs in respect of the Builder,
unless the relevant Borrower has terminated such Assigned Contract within 30
days after the earlier of (a) the Borrowers or any of them becoming aware of
such event and (b) the Agent notifying the Borrowers that such event has
taken place; or

	
 

	
 

	
 

	
10.1.31

	
 

	
Payments under Refund Guarantees: any claim made under any
Assigned Refund Guarantee is not paid by the Refund Guarantor, at the time
specified by, and in accordance with, the terms of that Assigned Refund
Guarantee after receipt by the Refund Guarantor of the relevant written
demand thereunder; or

	
 

	
 

	
 

	
10.1.32

	
 

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

53

	
 

	
 

	
 

	
 

	
 

	
 

	
10.1.33

	
 

	
Licences, etc: any licence, authorisation,
consent or approval at any time necessary to enable any Security Party to comply
with its material obligations under the Security Documents or the Underlying
Documents is revoked or withheld or modified or is otherwise not granted or
fails to remain in full force and effect or if any exchange control or other
law or regulation shall exist which would make any transaction under the
Security Documents or the Underlying Documents or the continuation thereof,
unlawful or would prevent the performance by any Security Party of any term
of any of the Security Documents or the Underlying Documents, unless, in the
case of unlawfulness referred to above, the Majority Banks are satisfied that
through the implementation of alternative arrangements satisfactory to the
Majority Banks, the unlawfulness will be overcome or rectified within 10 days
from its occurrence but without in the meantime jeopardising in any way the
position of the Creditors under this Agreement and the other Security
Documents or the Encumbrances created by the Security Documents (and such
unlawfulness is actually overcome or rectified within such 10 day period),

	
 

	
 

	
 

	
 

	
 

	
Provided however that:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
there shall not be an Event of Default if any of the events or
circumstances described in clauses 10.1.7, 10.1.9, 10.1.10, 10.1.11, 10.1.13
and 10.1.14 takes place solely and exclusively with respect to the Refund
Guarantor and, within fifteen (15) days after the earlier of (1) the date
when the Borrowers or any of them becomes aware that the relevant event or
the relevant circumstances have occurred or started to exist and (2) the date
when the Agent notifies the Borrowers in writing that the relevant event or
the relevant circumstances have occurred or exist:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
the Borrowers have (A) arranged the issuing of new substitute refund
guarantees for each Assigned Contract in favour of the relevant Borrower, in
form and substance substantially similar to the Assigned Refund Guarantees
and issued by a bank acceptable to the Agent (acting on the instructions of
the Majority Banks in their discretion), (B) assigned in favour of the
Security Agent (at the expense of the Borrowers) the benefit of such
substitute Refund Guarantees by executing security assignment agreements in a
form similar to the Pre-delivery Security Assignments (and have delivered to
the Security Agent any notices of assignment and have used their best
endeavours to deliver to the Security Agent acknowledgements or further
documents required to be delivered pursuant thereto) and (C) provided the
Agent (at the expense of the Borrowers) with any legal opinion in respect of
the matters referred to in this paragraph (a)(i) in form and substance
satisfactory to the Agent; or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
the Borrowers have prepaid the Loan in full;

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
there shall not be an Event of Default if any of the events or circumstances
described in clauses 10.1.27, 10.1.28, 10.1.29, 10.1.30 or 10.1.31 shall
occur with respect to an Assigned Contract or an Assigned Refund Guarantee
(as the case may be), and, within fifteen (15) days after the earlier of (1)
the date when the Borrowers or any of them becomes aware that the relevant
event or the relevant circumstances have occurred or started to exist and (2)
the date when the Agent notifies the Borrowers in writing that the relevant
event or the relevant circumstances have occurred or exist:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
the Borrowers have prepaid in full the Tranche for the Ship to which
such Assigned Contract or Assigned Refund Guarantee relates;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the Borrowers shall not be entitled to serve a Drawdown Notice during
the fifteen (15) day periods referred to in paragraphs (a) and (b) above,
unless the circumstances referred to therein cease to exist and the Borrowers
have complied with their obligations thereunder.

54

	
 

	
 

	
 

	
10.2

	
 

	
Acceleration

	
 

	
 

	
 

	
 

	
 

	
The Agent may, and if so requested by the Majority
Banks shall, without prejudice to any other rights of the Banks, at any time
after the occurrence of an Event of Default and while the same is then
continuing, by notice to the Borrowers:

	
 

	
 

	
 

	
10.2.1

	
 

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

	
 

	
 

	
 

	
10.2.2

	
 

	
declare that 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 at any other time specified in such notice, become due and payable.

	
 

	
 

	
 

	
10.3

	
 

	
Demand basis

	
 

	
 

	
 

	
 

	
 

	
If, pursuant to clause 10.2.2, the Agent declares
the Loan to be due and payable on demand, the Agent may (and if so instructed
by the Majority Banks shall) by written notice to the Borrowers 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 and commitment commission accrued and all other sums payable under
this Agreement.

	
 

	
 

	
 

	
10.4

	
 

	
Position of Swap
Providers

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
11

	
 

	
Indemnities

	
 

	
 

	
 

	
11.1

	
 

	
Miscellaneous
indemnities

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
11.1.1

	
 

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

	
 

	
 

	
 

	
11.1.2

	
 

	
the occurrence of any other Event of Default; 

	
 

	
 

	
 

	
11.1.3

	
 

	
any prepayment of an Advance or Tranche (or any
part thereof) being made under clauses 2.10, 4.2, 4.4, 8.2.1(a) or 12.1 or
any other repayment or prepayment of an Advance or Tranche being made
otherwise than on an Interest Payment Date relating to the part of the
Advance or Tranche prepaid or repaid (but provided that any
loss payable to a Bank under this clause 11.1.3 shall not exceed the amount
(if any) by which (a) the additional interest which would have been payable
to that Bank on the amounts so prepaid had they been repaid on such Interest
Payment Date, exceeds (b) the amount of interest which, in the opinion of
that Bank, would be payable to that Bank in respect of a deposit in Dollars
in an amount similar to the amount so prepaid, if placed by that Bank with a
prime bank in London for a period starting on the day of such prepayment and
ending on such Interest Payment Date);

	
 

	
 

	
 

	
11.1.4

	
 

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

	
 

	
 

	
 

	
 

	
 

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

55

	
 

	
 

	
 

	
 

	
 

	
acquired to effect or maintain its Contribution or,
as the case may be, its Commitment (or any part thereof) or in terminating or
reversing or otherwise in connection with, any interest rate and/or currency
swap or other derivative transaction or other arrangement entered into by a
Creditor (whether with another legal entity or with another office or
department of such Creditor) to hedge any exposure arising under this
Agreement by the Swap Providers under the Master Agreements or in
terminating, reversing, or otherwise in connection with, any open position
arising under this Agreement, or any other amount owing to such Creditor.

	
 

	
 

	
 

	
11.2

	
 

	
Currency
indemnity

	
 

	
 

	
 

	
 

	
 

	
If any sum due from any of the Borrowers under any
of the Security Documents or any order or judgment given or made in relation
thereto has to be converted from the currency (the “first currency”) in which
the same is payable under the relevant Security Document or under such order
or judgment into another currency (the “second currency”) for the purpose of (a)
making or filing a claim or proof against the Borrowers or any of them, (b)
obtaining an order or judgment in any court or other tribunal or (c)
enforcing any order or judgment given or made in relation to any of the
Security Documents, the Borrowers shall indemnify and hold harmless each
Creditor from and against any loss suffered as a result of any difference
between (i) the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (ii) the rate
or rates of exchange at which the relevant Creditor may in the ordinary
course of business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof. Any amount due from the Borrowers under this
clause 11.2 shall be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due under or in respect of any of
the Security Documents and the term “rate of exchange” includes any premium
and costs of exchange payable in connection with the purchase of the first
currency with the second currency.

	
 

	
 

	
 

	
11.3

	
 

	
Environmental
indemnity

	
 

	
 

	
 

	
 

	
 

	
The Borrowers shall indemnify each Creditor on
demand and hold it harmless from and against all costs, expenses, payments,
charges, losses, demands, liabilities, actions, proceedings (whether civil or
criminal), penalties, fines, damages, judgements, orders, sanctions or other
outgoings of whatever nature (including, without limitation, those arising
under Environmental Laws) which may be suffered, incurred or paid by, or made
or asserted against such Creditor at any time, whether before or after the
repayment in full of all amounts of principal and interest under this
Agreement, relating to, or arising directly or indirectly in any manner or
for any cause or reason whatsoever out of an Environmental Claim made or
asserted against such Creditor if such Environmental Claim would or could not
have been, or been capable of being, made or asserted against such Creditor
if it had not entered into any of the Security Documents and/or exercised any
of its rights, powers and discretions thereby conferred and/or performed any
of its obligations thereunder and/or been involved in any of the transactions
contemplated by the Security Documents.

	
 

	
 

	
 

	
11.4

	
 

	
Waiver

	
 

	
 

	
 

	
 

	
 

	
In no event shall a Creditor or any of its Related
Companies or any of their respective officers or directors be liable on any
theory of liability for any special, indirect, consequential or punitive
damages and each Borrower hereby waives, releases and agrees not to sue upon
any such claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favour.

56

	
 

	
 

	
 

	
 

	
11.5

	
 

	
General indemnity

	
 

	
 

	
 

	
 

	
 

	
The Borrowers jointly and severally hereby
indemnify and agree to hold harmless the Creditors and each of their
respective Related Companies and each of their respective officers,
directors, employees, agents, advisors and representatives (each, an “Indemnified
Party”) from and against any and all claims, damages, losses,
liabilities, costs, legal and other expenses (altogether the “Losses”),
joint or several, that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or
relating to any claim, investigation, litigation or proceeding (or the
preparation of any defence with respect thereto) commenced or threatened in
relation to the Security Documents or any of them (or the transactions
contemplated hereby or thereby) or any use made or proposed to be made with
the proceeds of the Loan. This indemnity shall apply whether or not such
claims, investigation, litigation or proceeding is brought by the Borrowers
or any of them, any other Security Party, any other member of the Group, any
of their respective shareholders or creditors, an Indemnified Party or any
other person, or an Indemnified Party is otherwise a party thereto, except to
the extent that such Losses are found in a final, non-appealable judgment by
a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence or wilful misconduct.

	
 

	
 

	
 

	
12

	
 

	
Unlawfulness, increased costs and mitigation

	
 

	
 

	
 

	
12.1

	
 

	
Unlawfulness

	
 

	
 

	
 

	
 

	
 

	
If it is or becomes contrary to any law or
regulation for any Bank to contribute to an Advance or to maintain its
Commitment or fund the Loan or perform any of its other obligations under
this Agreement, such Bank shall promptly, through the Agent, give notice to
the Borrowers whereupon:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
such Bank’s Commitment shall be reduced to zero;
and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Borrowers shall be obliged to prepay such Bank’s
Contribution either (A) forthwith or (B) on a future specified date not being
later than the latest date permitted by the relevant law or regulation
together with interest and commissions accrued to the date of prepayment and
all other sums payable by the Borrowers under this Agreement and/or the
Master Swap Agreements.

	
 

	
 

	
 

	
 

	
12.2

	
 

	
Increased costs

	
 

	
 

	
 

	
 

	
 

	
If the result of any change in, or in the
interpretation or application of, or the introduction of, any Capital
Adequacy Law or of compliance by a Bank with any Capital Adequacy Law
(excluding a switch of that Bank from one Basel II approach to another unless
it is mandatorily required by law) is to:

	
 

	
 

	
 

	
 

	
12.2.1

	
 

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

	
 

	
 

	
 

	
 

	
12.2.2

	
 

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

	
 

	
 

	
 

	
 

	
12.2.3

	
 

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

	
 

	
 

	
 

	
 

	
12.2.4

	
 

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

	
 

	
 

	
 

57

	
 

	
 

	
 

	
 

	
12.2.5

	
 

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

	
 

	
 

	
 

	
 

	
12.2.6

	
 

	
require any Bank or its holding company to incur or
sustain a loss by reason of being obliged to deduct all or part of its
Commitment or the Loan,

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Borrowers shall on demand pay to the Agent for
the account of such Bank at any time after the expiry of the Negotiation
Period (and whether or not the Loan or any part thereof has then been repaid
or prepaid), pay to such Bank the amount which such Bank specifies (in a
certificate (which shall be conclusive on the Borrowers in the absence of manifest
error) setting forth the basis of the computation of such amount but not
including any matters which such Bank or its holding company regards as
confidential) is required to compensate such Bank (or its holding company)
for such liability to Taxes, alternative funding, increased cost, reduction,
payment, loss or foregone return (as the case may be).

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
12.3

	
 

	
Exception

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
12.4

	
 

	
Mitigation and
Tax credits

	
 

	
 

	
 

	
 

	
12.4.1

	
 

	
Mitigation

	
 

	
 

	
 

	
 

	
 

	
 

	
If circumstances arise which would, or would upon
the giving of notice, result in an increased payment required to be made by
the Borrowers under clause 6.6 or clause 12.2 then, without in any way
limiting the obligations of the Borrowers under either of these clauses, the
relevant Bank shall use reasonable endeavours to transfer its obligations,
liabilities and rights under this Agreement and the other Security Documents
to another of its offices not affected by the circumstances which gave rise
to such increased payment, but no Bank shall be under any obligation to take
any such action, and, in any event, it shall not do so if in its opinion, to
do so would or might:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
have an adverse effect on such Bank’s or its
holding company’s business, operations, administration or financial
condition; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
involve such Bank or its holding company in any
activity which is unlawful or prohibited or any activity that is contrary to,
or inconsistent, with any regulation or such Bank’s general banking policies;
or

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
involve such Bank or its holding company in any
expense (unless indemnified to its satisfaction) or tax disadvantage.

	
 

	
 

	
 

	
 

	
12.4.2

	
 

	
Tax credits

	
 

	
 

	
 

	
 

	
 

	
 

	
If a Bank receives for its own account a repayment
or credit in respect of tax on account for which the Borrowers have made an
increased payment under clause 6.6, it shall pay to the Borrowers a sum equal
to the repayment or credit received, provided always that:

58

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
such Bank can do so without prejudicing the
retention of the amount of such repayment or credit and without prejudice to
the right of such Bank to obtain any other relief or allowance which may be
available to it;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
such Bank shall not be obliged to allocate to this
transaction any part of a tax repayment or credit which is referable to a
number of transactions if the Loan does not fall within such number of
transactions;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
nothing in this clause shall entitle the Borrowers
to enquire about such Bank’s tax affairs or oblige such Bank to arrange its
tax affairs in any particular manner, to disclose any information regarding
its tax affairs and computations, to claim any type of relief, credit,
allowance or deduction instead of, or in priority to, another or to make any
such claim within any particular time; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
nothing in this clause shall oblige such Bank to
make a payment which exceeds any repayment or credit in respect of tax on
account of which the Borrowers have made an increased payment under clause
6.6; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
any allocation or determination made by such Bank
under or in connection with this clause shall be prima facie evidence of the
payment due to the Borrowers under this clause 12.4.2.

	
 

	
 

	
 

	
 

	
13

	
 

	
Security, set-off and pro-rata payments

	
 

	
 

	
 

	
 

	
13.1

	
 

	
Application of
moneys

	
 

	
 

	
 

	
 

	
 

	
 

	
All moneys received by the Agent and/or the
Security Agent under or pursuant to any of the Security Documents and
expressed to be applicable in accordance with the provisions of this clause
13.1 or in a manner determined in the Security Agent’s or (as the case may
be) the Agent’s discretion, shall be applied in the following manner:

	
 

	
 

	
 

	
 

	
13.1.1

	
 

	
first, in or towards payment, on a pro rata basis,
of all unpaid costs and expenses which may be owing to the Agent and/or the
Security Agent and/or the Swap Providers or any of them under any of the
Security Documents;

	
 

	
 

	
 

	
 

	
13.1.2

	
 

	
secondly, in or towards payment, on a pro rata
basis, of any unpaid fees and commissions payable to the Creditors (other
than the Swap Providers) or any of them;

	
 

	
 

	
 

	
 

	
13.1.3

	
 

	
thirdly, in or towards payment, on a pro rata
basis, of any arrears of interest owing in respect of the Loan or any part
thereof;

	
 

	
 

	
 

	
 

	
13.1.4

	
 

	
fourthly, in or towards repayment, on a pro rata
basis, of the Loan;

	
 

	
 

	
 

	
 

	
13.1.5

	
 

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

	
 

	
 

	
 

	
 

	
13.1.6

	
 

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

	
 

	
 

	
 

	
 

	
13.1.7

	
 

	
seventhly, in or towards payment to the Swap
Providers of any sums owing to them under the Master Swap Agreements; 

	
 

	
 

	
 

	
 

	
13.1.8

	
 

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

	
 

	
 

	
 

	
 

	
13.2

	
 

	
Set-off

59

	
 

	
 

	
 

	
 

	
13.2.1

	
 

	
The Borrowers authorise each Creditor (without
prejudice to any of such Creditor’s rights at law, in equity or otherwise),
at any time following the occurrence of an Event of Default and while the
same is continuing and with notice to the Borrowers, to apply any credit
balance to which the Borrowers or any of them is then entitled standing upon
any account of the Borrowers or any of them with any branch of such Creditor
in or towards satisfaction of any sum due and payable from the Borrowers or
any of them to such Creditor under any of the Security Documents. For this
purpose, each Creditor is authorised to purchase with the moneys standing to
the credit of such account such other currencies as may be necessary to
effect such application.

	
 

	
 

	
 

	
 

	
13.2.2

	
 

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

	
 

	
 

	
 

	
 

	
13.2.3

	
 

	
Nothing in this clause 13.2 shall be effective to
create an Encumbrance or any other security interest.

	
 

	
 

	
 

	
 

	
13.3

	
 

	
Pro rata payments

	
 

	
 

	
 

	
 

	
13.3.1

	
 

	
If at any time any Bank (the “Recovering Bank”) receives
or recovers any amount owing to it by the Borrowers under this Agreement by
direct payment, set-off or in any manner other than by payment through the
Agent pursuant to clauses 6.1 or 6.9 (not being a payment received from a
Transferee Bank or a sub-participant in such Bank’s Contribution or any other
payment of an amount due to the Recovering Bank for its sole account pursuant
to clauses 3.6, 5, 6.6, 11.1, 11.2, 12.1, or 12.2), the Recovering Bank
shall, within two (2) Banking Days of such receipt or recovery (a “Relevant
Receipt”) notify the Agent of the amount of the Relevant Receipt.
If the Relevant Receipt exceeds the amount which the Recovering Bank would
have received if the Relevant Receipt had been received by the Agent and
distributed pursuant to clause 6.1 or 6.9 (as the case may be) then:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Agent shall treat the excess amount so paid by
the Recovering Bank as if it were a payment made by the Borrowers and shall
distribute the same to the Banks (other than the Recovering Bank) in
accordance with clause 6.9; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
13.3.2

	
 

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

	
 

	
 

	
 

	
 

	
13.3.3

	
 

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

	
 

	
 

	
 

	
 

	
13.3.4

	
 

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

	
 

	
 

	
 

	
 

	
13.4

	
 

	
No release

60

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
13.5

	
 

	
No charge

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
13.6

	
 

	
Further assurance

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
13.7

	
 

	
Conflicts

	
 

	
 

	
 

	
 

	
 

	
 

	
In the event of any conflict between this Agreement
and any of the other Borrowers’ Security Documents (other than the Master
Swap Agreements), the provisions of this Agreement shall prevail.

	
 

	
 

	
 

	
 

	
14

	
 

	
Operating Accounts

	
 

	
 

	
 

	
 

	
14.1

	
 

	
General

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
14.1.1

	
 

	
on or before the first
Drawdown Date, open the Operating Accounts; and

	
 

	
 

	
 

	
 

	
14.1.2

	
 

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

	
 

	
 

	
 

	
 

	
14.2

	
 

	
Operating Accounts:
withdrawals

	
 

	
 

	
 

	
 

	
 

	
 

	
Moneys payable to each Operating Account in respect
of Earnings of the relevant Ship shall be at the free disposal of each
Borrower and each Borrower may withdraw moneys from its Operating Account.
However, if an Event of Default occurs and while the same is continuing, no
Borrower shall be entitled to withdraw any moneys from its Operating Account
for so long as any moneys are owing under the Security Documents.

	
 

	
 

	
 

	
 

	
14.3

	
 

	
Application of
Operating Accounts

	
 

	
 

	
 

	
 

	
14.3.1

	
 

	
At any time after the occurrence of an Event of
Default and while the same is continuing, the Agent may (and on the
instructions of the Majority Banks shall), with notice to the Borrowers,
instruct the Account Bank to apply all moneys then standing to the credit of an

61

	
 

	
 

	
 

	
 

	
 

	
 

	
Operating Account, together with interest from time
to time accruing or accrued thereon in the manner specified in clause 13.1.

	
 

	
 

	
 

	
 

	
14.4

	
 

	
Operating Account
terms

	
 

	
 

	
 

	
 

	
 

	
Amounts standing to the credit of each Operating
Account shall (unless otherwise agreed between the Account Bank and the
Borrowers) bear interest at the rates from time to time offered by the
Account Bank to its customers for Dollar deposits in comparable amounts for
comparable periods. Interest shall accrue on each Operating Account from day
to day and be calculated on the basis of actual days elapsed and a three
hundred and sixty (360) day year and shall be credited to the relevant
Operating Account at such times as the Account Bank and the Borrowers shall
agree.

	
 

	
 

	
 

	
 

	
14.5

	
 

	
Pledging of
Operating Accounts

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
15

	
 

	
Assignment, transfer
and lending office

	
 

	
 

	
 

	
 

	
15.1

	
 

	
Benefit and
burden

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
15.2

	
 

	
No assignment by
Borrowers

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
15.3

	
 

	
Transfers by
Banks

	
 

	
 

	
 

	
 

	
 

	
 

	
Subject to prior written consent of the Borrowers
(which consent shall not unreasonably withheld and the request for which shall
be promptly responded to), any Bank (the “Transferor Bank”) may at
any time, cause all or any part of its rights, benefits and/or obligations
under this Agreement and the Security Documents to be transferred to any
other bank or financial institution (a “Transferee Bank”) by delivering to the
Agent a Transfer Certificate duly completed and duly executed by the
Transferor Bank and the Transferee Bank. No such transfer is binding on, or
effective in relation to, the Borrowers or the Agent or the other Creditors
unless (i) it is effected or evidenced by a Transfer Certificate which
complies with the provisions of this clause 15.3 and is signed by or on
behalf of the Transferor Bank, the Transferee Bank and the Agent (on behalf
of itself, the Borrowers and the other Creditors) and (ii) such transfer of
rights under the other Security Documents has been effected and registered to
the satisfaction of the Agent. The Borrowers’ consent referred to above shall
not be required in respect of a transfer if (1) the relevant Transferee Bank
is a Related Company of the Transferor Bank and provided that the Borrowers
would not pay additional amounts under clause 6.6 or clause 12.2 compared to
the amounts payable by the Borrowers under such clauses immediately before
such transfer or (2) an Event of Default has occurred which is continuing at
the time of the relevant transfer. Upon signature of any such Transfer
Certificate by the Agent, which signature shall be effected as promptly as is
practicable after such Transfer Certificate has been delivered to the Agent,
and subject to the terms of such Transfer Certificate, such Transfer
Certificate shall have effect as set out below. 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
15.3.1

	
 

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

62

	
 

	
 

	
 

	
 

	
15.3.2

	
 

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

	
 

	
 

	
 

	
 

	
15.3.3

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Transferor Bank’s obligations are discharged to
the extent specified in the Transfer Certificate;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the Transferee Bank becomes a Bank with a
Contribution, Commitment and Percentage of the amounts specified in the
Transfer Certificate;

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(f)

	
the Transferee Bank becomes entitled to all the
rights under this Agreement which are applicable to the Banks generally,
including but not limited to those relating to the Majority Banks and those
under clauses 3.6, 5 and 11.3 and to the extent that the Transferee Bank
becomes entitled to such rights, the Transferor Bank ceases to be entitled to
them;

	
 

	
 

	
 

	
 

	
15.3.4

	
 

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

	
 

	
 

	
 

	
 

	
15.3.5

	
 

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

	
 

	
 

	
 

	
 

	
15.4

	
 

	
Reliance on
Transfer Certificate

	
 

	
 

	
 

	
 

	
15.4.1

	
 

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

	
 

	
 

	
 

	
 

	
15.4.2

	
 

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

63

	
 

	
 

	
 

	
 

	
15.4.3

	
 

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

	
 

	
 

	
 

	
 

	
15.5

	
 

	
Transfer fees and
expenses

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
15.6

	
 

	
Documenting
transfers

	
 

	
 

	
 

	
 

	
 

	
 

	
If any Bank assigns all or any part of its rights
or transfers all or any part of its rights, benefits and/or obligations as
provided in clause 15.3, the Borrowers jointly and severally undertake with
each Creditor, immediately on being requested to do so by the Agent and at
the cost of the Transferor Bank, to enter into, and procure that the other
Security Parties shall (at the cost of the Transferor Bank) enter into, such
documents as may be necessary or desirable to transfer to the Transferee Bank
all or the relevant part of such Bank’s interest in the Security Documents
and all relevant references in this Agreement to such Bank shall thereafter
be construed as a reference to the Transferor Bank and/or its Transferee Bank
(as the case may be) to the extent of their respective interests. Any costs,
fees and expenses incurred in relation to any such transfer will not in any
case create any liability whatsoever on the part of the Borrowers for payment
of the same whether under the Security Documents or otherwise.

	
 

	
 

	
 

	
 

	
15.7

	
 

	
Sub-participation

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
15.8

	
 

	
Lending office

	
 

	
 

	
 

	
 

	
 

	
 

	
Each Bank shall lend through its office at the
address specified in schedule 1 or, as the case may be, in any relevant
Transfer Certificate, or through any other office of such Bank selected from
time to time by it through which such Bank wishes to lend for the purposes of
this Agreement Provided that the Borrowers would not
pay additional amounts under clause 6.6 or clause 12.2 compared to the
amounts payable by the Borrowers under such clauses immediately before such
change of lending office. If the office through which a Bank is lending is
changed pursuant to this clause 15.8, such Bank shall notify the Agent
promptly of such change and the Agent shall notify the Borrowers, the
Security Agent, the Account Bank, the Swap Providers and the other Banks. 

	
 

	
 

	
 

	
 

	
15.9

	
 

	
Disclosure of
information by Banks

	
 

	
 

	
 

	
 

	
 

	
 

	
A Bank may, with the prior consent of the Agent in
its discretion, disclose to a prospective assignee, transferee or to any
other person who may propose entering into contractual relations with such
Bank in relation to this Agreement such information about the Borrowers
and/or the other Security Parties as such Bank shall consider appropriate
Provided that the relevant Bank has entered into a confidentiality agreement
with such person in connection with any such information.

	
 

	
 

	
 

	
15.10

	
 

	
No additional costs

	
 

	
 

	
 

	
 

	
 

	
If at the time of, or after, any assignment by a
Bank of all or any part of its rights or benefits under this Agreement or any
transfer by a Bank of any part of the rights, benefits and/or obligations
under this Agreement, or any change in the office through which it lends for
the purposes of this Agreement, the Borrowers or any of them would be obliged
to pay to the 

64

	
 

	
 

	
 

	
 

	
 

	
 

	
assignee or the Transferee Bank or (in the case of
a change of lending office) such Bank, under clauses 6.6 or 12.2 or any other
term of a Security Document any sum in excess of the sum (if any) which it
would have been obliged to pay to such Bank under the relevant clause in the
absence of such assignment, transfer or change, the Borrowers shall not be
obliged to pay that excess.

	
 

	
 

	
 

	
16

	
 

	
Agent and Security Agent

	
 

	
 

	
 

	
16.1

	
 

	
Appointment of
the Agent 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
16.1.1

	
 

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

	
 

	
 

	
 

	
16.1.2

	
 

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

	
 

	
 

	
 

	
16.2

	
 

	
Agent’s actions

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
16.3

	
 

	
Agent’s duties

	
 

	
 

	
 

	
 

	
 

	
The Agent shall:

	
 

	
 

	
 

	
16.3.1

	
 

	
promptly notify each Bank and each Swap Provider of
the contents of each notice, certificate or other document received by it
from the Borrowers under or pursuant to clauses 8.1.1, 8.1.5 and 8.1.7; and

	
 

	
 

	
 

	
16.3.2

	
 

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

	
 

	
 

	
 

	
16.4

	
 

	
Agent’s rights

	
 

	
 

	
 

	
 

	
 

	
The Agent may:

	
 

	
 

	
 

	
16.4.1

	
 

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

	
 

	
 

	
 

	
16.4.2

	
 

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

65

	
 

	
 

	
 

	
16.4.3

	
 

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

	
 

	
 

	
 

	
16.4.4

	
 

	
deem and treat (i) each Bank as the person entitled
to the benefit of the Contribution of such Bank for all purposes of this
Agreement unless and until a notice shall have been filed with the Agent
pursuant to clause 15.3 and shall have become effective, and (ii) the office
set opposite the name of each of the Banks in schedule 1 as such Bank’s
lending office unless and until a written notice of change of lending office
shall have been received by the Agent and the Agent may act upon any such
notice unless and until the same is superseded by a further such notice;

	
 

	
 

	
 

	
16.4.5

	
 

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

	
 

	
 

	
 

	
16.4.6

	
 

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

	
 

	
 

	
 

	
16.5

	
 

	
No liability of
the Agent

	
 

	
 

	
 

	
 

	
 

	
Neither the Agent nor any of its employees and
agents shall:

	
 

	
 

	
 

	
16.5.1

	
 

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

	
 

	
 

	
 

	
16.5.2

	
 

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

	
 

	
 

	
 

	
16.5.3

	
 

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

	
 

	
 

	
 

	
16.5.4

	
 

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

	
 

	
 

	
 

	
16.5.5

	
 

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

	
 

	
 

	
 

	
16.5.6

	
 

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

	
 

	
 

	
 

	
16.5.7

	
 

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

	
 

	
 

	
 

	
 

	
 

	
For the purposes of this clause 16, the Agent shall
not be treated as having actual knowledge of any matter of which the
corporate finance or any other division outside the agency or loan
administration department of the Agent or the person for the time being
acting as the Agent may become aware in the context of corporate finance, advisory
or lending activities from time 

66

	
 

	
 

	
 

	
 

	
 

	
to time undertaken by the Agent for any Security
Party or any other person which may be a trade competitor of any Security
Party or may otherwise have commercial interests similar to those of any
Security Party.

	
 

	
 

	
 

	
16.6

	
 

	
Non-reliance on
Agent

	
 

	
 

	
 

	
 

	
 

	
Each Bank and each Swap Provider acknowledges that
it has not relied on any statement, opinion, forecast or other representation
made by the Agent to induce it to enter into this Agreement or any of the
other Security Documents and that it has made and will continue to make,
without reliance on the Agent and based on such documents as it considers
appropriate, its own appraisal of the creditworthiness of the Security
Parties and its own independent investigation of the financial condition,
prospects and affairs of the Security Parties in connection with the making
and continuation of such Bank’s Commitment or Contribution under this
Agreement. The Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Bank or Swap Provider with
any credit or other information with respect to any Security Party whether
coming into its possession before the making of the Loan or at any time or
times thereafter other than as provided in clause 16.3.1.

	
 

	
 

	
 

	
16.7

	
 

	
No responsibility
on Agent for Borrower’s performance

	
 

	
 

	
 

	
 

	
 

	
The Agent shall not have any responsibility or
liability to any Bank or Swap Provider:

	
 

	
 

	
 

	
16.7.1

	
 

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

	
 

	
 

	
 

	
16.7.2

	
 

	
for the financial condition of any Security Party;
or

	
 

	
 

	
 

	
16.7.3

	
 

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

	
 

	
 

	
 

	
16.7.4

	
 

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

	
 

	
 

	
 

	
16.7.5

	
 

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

	
 

	
 

	
 

	
16.7.6

	
 

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

	
 

	
 

	
 

	
16.7.7

	
 

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

	
 

	
 

	
 

	
16.7.8

	
 

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

	
 

	
 

	
 

	
16.7.9

	
 

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

	
 

	
 

	
 

	
16.8

	
 

	
Reliance on
documents and professional advice

	
 

	
 

	
 

	
 

	
 

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

67

	
 

	
 

	
 

	
 

	
16.9

	
 

	
Other dealings 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
16.10

	
 

	
Rights of Agent as Bank; no partnership 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
16.11

	
 

	
Amendments and waivers 

	
 

	
 

	
 

	
 

	
16.11.1

	
 

	
Subject to clauses 16.11.2, 16.11.4 and 16.11.5 the Agent may, with
the consent of the Majority Banks (or if and to the extent expressly
authorised by the other provisions of any of the Security Documents) and, if
so instructed by the Majority Banks, the Agent shall: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.11.2

	
 

	
Exceptions An amendment or waiver that has
the effect of changing or which relates to: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a) the definition of “Majority Banks” in Clause 1.2 (Definitions); 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b) an extension to the date of payment of any amount under the
Finance Documents;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c) a reduction in the Margin or a reduction in the amount of any
payment of principal (including a change in the repayment profile pursuant to
clause 4.1 (Repayment)), interest, fees or commission payable; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d) an increase in or an extension of any Commitment; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(e) any provision which expressly requires the consent of all the
Banks; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(f) the release of any Security Documents; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(g) clause 7.2.21 (No breach of sanctions), clause 8.1.19 (No
employment of Ships in breach of sanctions), clause 13.1 (Application of
moneys) or this Clause 16.11, 

	
 

	
 

	
 

	
 

	
 

	
 

	
(h) changing the currency in which any sum is payable under any
Security Document (other than in accordance with the terms of the relevant Security Document); and

	
 

	
 

	
 

	
 

	
 

	
 

	
(i) the nature or scope of the Corporate Guarantee;

	
 

	
 

	
 

	
 

	
 

	
 

	
shall not be made without the prior consent of all the Banks unless,
in relation to the above sub-paragraph (f) of this clause 16.11.2, the
provisions of any Security Documents require that the release of a Security
Document or of any additional security is to be effected by the

68

	
 

	
 

	
 

	
 

	
 

	
 

	
Agent on the instructions of the Majority Banks or otherwise in the
manner specified in that Security Document.

	
 

	
 

	
 

	
 

	
16.11.3

	
 

	
Notwithstanding any provision to the contrary in this Agreement or
any other Security Documents and subject to clause 16.11.2, none of the
matters referred to in clause 16.11.1 nor any other matter or action
whatsoever in relation to this Agreement, the Security Documents and the
transactions contemplated thereby, shall require or be deemed to require the
instructions of all the Banks. In particular, even if a matter or action is
interpreted or found to require action by all the Banks (whether for
practical reasons (e.g. release of any Security Documents which are in the name
of all Banks) or otherwise), any Banks dissenting with the instructions or
decision of the Majority Banks shall take such action or refrain from taking
such action, as required and instructed by the Majority Banks provided that
the relevant instructions and/or decision of the Majority Banks apply to all
the Banks (and not individual Banks). 

	
 

	
 

	
 

	
 

	
16.11.4

	
 

	
The Agent shall be entitled (but not obliged) to (or to instruct the
Security Agent to) make or grant any amendment, waiver or consent in relation
to this Agreement or any other Security Documents, without obtaining the
consent of the Majority Banks if such matter relates solely to: 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the signing of Transfer Certificates; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
amendments or waivers that the Agent reasonably believes to be of a
purely mechanical or clerical nature; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the correction of manifest errors; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
decisions, consents, amendments, directions, waivers or any right
that the Security Documents expressly state may be made by the Agent or the Security
Agent. 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Agent shall promptly notify the other parties to this Agreement
of any amendment or waiver effected by it under this clause 16.11.4. 

	
 

	
 

	
 

	
 

	
16.11.5

	
 

	
An amendment or waiver which relates to the rights or obligations of
the Agent and the Security Agent may not be effected without the consent of
the Agent and the Security Agent. 

	
 

	
 

	
 

	
 

	
16.12

	
 

	
Reimbursement and indemnity by Banks 

	
 

	
 

	
 

	
 

	
 

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

69

	
 

	
 

	
 

	
 

	
16.13

	
 

	
Retirement of Agent 

	
 

	
 

	
 

	
 

	
16.13.1

	
 

	
The Agent may, having given to the Borrowers and each of the Banks
and the Swap Providers not less than fifteen (15) days’ notice of its
intention to do so, retire from its appointment as Agent under this
Agreement, provided that no such retirement shall take effect unless there
has been appointed by the Banks and the Swap Providers as a successor agent: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
a reputable and experienced bank nominated by the Borrowers and
accepted by the Majority Banks in their reasonable discretion or, failing
such nomination or acceptance, 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.13.2

	
 

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

	
 

	
 

	
 

	
 

	
16.14

	
 

	
Appointment and retirement of Security
Agent 

	
 

	
 

	
 

	
 

	
16.14.1

	
 

	
Appointment 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.14.2

	
 

	
Retirement 

	
 

	
 

	
 

	
 

	
 

	
 

	
Without prejudice to clause 16.13, the Security Agent may, having
given to the Borrowers, the Agent, each of the Banks and the Swap Providers
not less than fifteen (15) days’ notice 

70

	
 

	
 

	
 

	
 

	
 

	
 

	
of its intention to do so, retire from its appointment as Security
Agent under this Agreement and any Trust Deed, provided that no such
retirement shall take effect unless there has been appointed by the Banks,
the Agent and the Swap Providers as a successor security agent and trustee:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
a reputable and experienced bank nominated by the Borrowers and
accepted by the Majority Banks in their reasonable discretion or, failing
such nomination or acceptance, 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
and, in any case, such successor security agent and trustee shall
have duly accepted such appointment by delivering to the Agent (i) written
confirmation (in a form acceptable to the Agent) of such acceptance agreeing
to be bound by this Agreement in the capacity of Security Agent as if it had
been an original party to this Agreement and (ii) a duly executed Trust Deed
and (iii) such successor security agent and trustee shall have duly entered
into, whether with the retiring Security Agent and/or with the Borrowers
and/or with the Creditors or with any of them, such documents in connection
with the Security Documents as the Agent shall require in its absolute
discretion. 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.15 

	
 

	
Powers and duties of the Security Agent 

	
 

	
 

	
 

	
 

	
16.15.1

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

71

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.15.2

	
 

	
Subject to clause 16.15.3 the Security Agent may, with the prior
consent of the Majority Banks communicated in writing by the Agent, concur
with any of the Security Parties to: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.15.3

	
 

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

	
 

	
 

	
 

	
 

	
16.15.4

	
 

	
None of the Banks nor the Agent nor the Swap Providers shall have any
independent power to enforce any of the Security Documents referred to in
clause 16.15.1 or to exercise any rights, discretions or powers or to grant
any consents or releases under or pursuant to such Security Documents or any
of them or otherwise have direct recourse to the security and/or guarantees
constituted by such Security Documents or any of them except through the
Security Agent. 

	
 

	
 

	
 

	
 

	
16.15.5

	
 

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

	
 

	
 

	
 

	
 

	
16.15.6

	
 

	
Without prejudice to the foregoing each of the Agent, the Swap
Providers and the Banks (whether directly or through the Agent) shall provide
the Security Agent with such written information as it may reasonably require
for the purpose of carrying out its duties and obligations under the Security
Documents referred to in clause 16.15.1. 

	
 

	
 

	
 

	
 

	
16.15.7

	
 

	
Each Bank shall reimburse the Security Agent (rateably in accordance
with such Bank’s Commitment or, after the first drawdown, Contribution), to
the extent that the Security Agent is not reimbursed by the Borrowers, for
the costs, charges and expenses incurred by the Security Agent which are
expressed to be payable by the Borrowers under clause 5.2 including (in each
case) the fees and expenses of legal or other professional advisers. Each
Bank shall on demand indemnify the Security Agent (rateably in accordance
with such Bank’s Commitment or, after the first drawdown, Contribution)
against all liabilities, damages, costs and claims whatsoever incurred by the
Security Agent in connection with any of the Security Documents or the
performance of its duties under any of the Security 

72

	
 

	
 

	
 

	
 

	
 

	
 

	
Documents or any action taken or omitted by the Security Agent under
any of the Security Documents, unless such liabilities, damages, costs or
claims arise from the Security Agent’s own gross negligence or wilful
misconduct. 

	
 

	
 

	
 

	
 

	
16.16

	
 

	
Trust provisions 

	
 

	
 

	
 

	
 

	
16.16.1

	
 

	
In its capacity as trustee in relation to the Security Documents
specified in clause 16.15.1, the Security Agent shall, without prejudice to
any of the powers, discretions and immunities conferred upon trustees by law
(and to the extent not inconsistent with the provisions of any of those
Security Documents), have all the same powers and discretions as a natural
person acting as the beneficial owner of such property and/or as are
conferred upon the Security Agent by any of those Security Documents. 

	
 

	
 

	
 

	
 

	
16.16.2

	
 

	
It is expressly declared that, in its capacity as trustee in relation
to the Security Documents specified in clause 16.15.1, the Security Agent
shall be entitled to invest moneys forming part of the security and which, in
the opinion of the Security Agent, may not be paid out promptly following
receipt in the name or under the control of the Security Agent in any of the
investments for the time being authorised by law for the investment by
trustees of trust moneys or in any other property or investments whether
similar to the aforesaid or not or by placing the same on deposit in the name
or under the control of the Security Agent as the Security Agent may think
fit without being under any duty to diversify its investments and the
Security Agent may at any time vary or transpose any such property or
investments for or into any others of a like nature and shall not be
responsible for any loss due to depreciation in value or otherwise of such
property or investments. Any investment of any part or all of the security
may, at the discretion of the Security Agent, be made or retained in the
names of nominees. 

	
 

	
 

	
 

	
 

	
16.17

	
 

	
Independent action by Creditors 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.18

	
 

	
Common Agent and Security Agent 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Agent and the Security Agent have entered into the Security
Documents in their separate capacities (a) as agent for the Banks and the
Swap Providers under and pursuant to this Agreement (in the case of the
Agent) and (b) as security agent and trustee for the Banks, the Agent and the
Swap Providers under and pursuant to this Agreement, to hold the guarantees
and/or security created by the Security Documents specified in clause 16.15.1
on the terms set out in such Security Documents (in the case of the Security
Agent). However, from time to time the Agent and the Security Agent may be
the same entity. When the Agent and the Security Agent are the same entity
and any Security Document provides for the Agent to communicate with or
provide instructions to the Security Agent (and vice versa), it will not be
necessary for there to be any such formal communications or instructions on
those occasions. 

	
 

	
 

	
 

	
 

	
16.19

	
 

	
Co-operation to achieve agreed priorities
of application 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
16.20

	
 

	
Prompt distribution of proceeds 

	
 

	
 

	
 

	
 

	
 

	
 

	
Moneys received by any of the Creditors (whether from a receiver or
otherwise) pursuant to the exercise of (or otherwise by virtue of the
existence of) any rights and powers under or pursuant 

73

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17

	
 

	
Notices and other matters 

	
 

	
 

	
 

	
 

	
17.1

	
 

	
Notices 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.1.1

	
 

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

	
 

	
 

	
 

	
 

	
17.1.2

	
 

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

	
 

	
 

	
 

	
 

	
17.1.3

	
 

	
be sent (subject to clause 17.2 herein): 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
if to the Borrowers or any of them at: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
c/o Costamare Inc. 

	
 

	
 

	
 

	
c/o Costamare Shipping Company S.A. 

	
 

	
 

	
 

	
60 Zephyrou Street & Syngrou Avenue 

	
 

	
 

	
 

	
Athens 175 64 

	
 

	
 

	
 

	
Greece

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fax no:    +30 210 9409 051 

	
 

	
 

	
 

	
Attn:         CFO
(of Costamare Inc.)

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
if to the Agent, the Security Agent or the Account Bank, at: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
DnB NOR Bank ASA 

	
 

	
 

	
 

	
20 St. Dunstan’s Hill 

	
 

	
 

	
 

	
London EC3R 8HY 

	
 

	
 

	
 

	
England

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fax No:    +44 207 626 5956 

	
 

	
 

	
 

	
Attention: Shipping, Offshore and Logistics 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
if to a Bank, to its address or fax number specified in schedule 1
or, in the case of a Transferee Bank, in any relevant Transfer Certificate;
or 

74

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.2

	
 

	
Notices through the Agent 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.3

	
 

	
No implied waivers, remedies cumulative 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.4

	
 

	
English language 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.5

	
 

	
Borrowers’ obligations 

	
 

	
 

	
 

	
 

	
17.5.1

	
 

	
Joint and several 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.5.2

	
 

	
Borrowers as principal debtors 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.5.3

	
 

	
Indemnity 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrowers hereby agree jointly and severally to keep the
Creditors fully indemnified on demand against all damages, losses, costs and
expenses arising from any failure of any Borrower to perform or discharge any
purported obligation or liability of the other Borrowers which would have
been the subject of this Agreement or any other Security Document had it been
valid and enforceable and which is not or ceases to be valid and enforceable
against the other Borrowers on any ground whatsoever, whether or not known to
a Creditor including, without limitation, any irregular exercise or absence
of any corporate power or lack of authority of, or breach of duty by, any
person purporting to act on behalf of the other 

75

	
 

	
 

	
 

	
 

	
 

	
 

	
Borrowers (or any legal or other limitation, whether under the
Limitation Acts or otherwise or any disability or death, bankruptcy, unsoundness
of mind, insolvency, liquidation, dissolution, winding up, administration,
receivership, amalgamation, reconstruction or any other incapacity of any
person whatsoever (including, in the case of a partnership, a termination or
change in the composition of the partnership) or any change of name or style
or constitution of any Security Party)).

	
 

	
 

	
 

	
 

	
17.5.4

	
 

	
Liability unconditional 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the death, bankruptcy, unsoundness of mind, insolvency, liquidation,
dissolution, winding-up, administration, receivership, amalgamation,
reconstruction or other incapacity of any person whatsoever (including, in
the case of a partnership, a termination or change in the composition of the
partnership) or any change of name or style or constitution of any Borrower
or any other person liable; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
17.5.5

	
 

	
Recourse to other security 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.5.6

	
 

	
Waiver of Borrowers’ rights 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
claim any set-off or counterclaim against the other Borrowers or any
other person liable or claiming or proving in competition with any Creditor
in the liquidation of the other Borrowers or any other person liable or have
the benefit of, or share in, any 

76

	
 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
17.6

	
 

	
Counterparts 

	
 

	
 

	
 

	
 

	
 

	
 

	
This Agreement may be executed in any number of counterparts each of
which shall be original but which shall together constitute the same
instrument. 

	
 

	
 

	
 

	
 

	
18

	
 

	
Governing law and jurisdiction 

	
 

	
 

	
 

	
 

	
18.1 

	
 

	
Law

	
 

	
 

	
 

	
 

	
 

	
 

	
This Agreement and any non-contractual obligations connected with it
are governed by, and shall be construed in accordance with, English law. 

	
 

	
 

	
 

	
 

	
18.2

	
 

	
Submission to jurisdiction 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Borrowers jointly and severally agree, for the benefit of each
Creditor, that any legal action or proceedings arising out of or in
connection with this Agreement (including any non-contractual obligations
connected with this Agreement) against the Borrowers or any of them or any of
their assets may be brought in the English courts. Each of the Borrowers
irrevocably and unconditionally submits to the jurisdiction of such courts
and irrevocably designates, appoints and empowers Mr Richard Coleman c/o H.
Clarkson and Co. Ltd. at present of 3 Lower Thames Street, London EC3R 6HE,
England to receive, for it and on its behalf, service of process issued out
of the courts of England in any such legal action or proceedings and, in the
event that such individual passes away or cannot be found, each of the
Borrowers hereby undertakes (and each of the Borrowers hereby irrevocably and
unconditionally authorises the Agent (for and on behalf of each Creditor) to
do so) to designate, appoint and empower on its behalf, Messrs Saville &
Co. at their then principal place of business in London as substitute process
agents of Mr Richard Coleman for the purposes of this clause. The submission
to such jurisdiction shall not (and shall not be construed so as to) limit
the right of a Creditor to take proceedings against the Borrowers or any of
them in the courts of any other competent jurisdiction nor shall the taking
of proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not. 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
18.3

	
 

	
Contracts (Rights of Third Parties) Act
1999 

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

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

77

Schedule 1

Part I: The Banks and their Commitments

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name

	
Lending office and contact details

	
Commitment

($)

	
 

	
 

	
 

	
 

	
 

	
 

	
DnB NOR

Bank ASA

	
Lending
Office

20
St. Dunstan’s Hill

London EC3R 8HY

England

Address
for Notices

20 St. Dunstan’s Hill

London EC3R 8HY

England

	
64,600,000

	
 

	
 

	
 

	
 

	
 

	
Fax:

	
+44 207 626 5956

	
 

	
 

	
Attn:

	
Shipping, Offshore
and Logistics

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ABN AMRO

BANK N.V.

	
Lending
Office

Gustav
Mahlerlaan 10

1082 PP Amsterdam

The Netherlands

Address for Notices

Merchant Banking Cred.Support/Spec.

  GL 0830,
Coolsingel 93

  3012 AE Rotterdam

  The Netherlands

Loan
Administration

Fax: +31 (0) 401 6118 

Email: alper.sanliunal@nl.abnamro.com

Attn. : Alper Sanliunal

Mid-Office

Fax :
+31 (0) 401 5323

Email:martijn.m.van.den.berg@nl.abnamro.com

Attn :Martijn van den Berg

Email : tom.van.vonderen@nl.abnamro.com

Attn. :
Tom van Vonderen

	
50,000,000

	
 

	
 

	
 

78

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name

	
Lending office and contact details

	
Commitment

($)

	
 

	
 

	
 

	
 

	
 

	
 

	
BANK OF

AMERICA

N.A.

	
Lending
Office

555
California Street, Floor 4

Mail Code CA5-705-04-01

San Francisco, CA 94104

USA

Address
for Notices

555 California Street, Floor 4

Mail Code CA5-705-04-01

San Francisco, CA 94104

USA

	
50,000,000

	
 

	
 

	
 

	
 

	
 

	
Fax: 

	
+1 415-765-7373

	
 

	
 

	
 

	
  +1 415-343-0535

	
 

	
 

	
Email: 

	
anita.l.garfagnoli@baml.com

	
 

	
 

	
Attn: 

	
Anita Garfagnoli

	
 

	
 

	
 

	
 

	
 

	
 

	
Fax:

	
+1 401-278-8075

	
 

	
 

	
Email:

	
Alison.r.hook@baml.com

	
 

	
 

	
Attn:

	
Alison Hook

	
 

	
 

	
 

	
 

	
 

	
 

	
Fax:

	
+1 617-310-2316

	
 

	
 

	
Email:

	
rita.d.menezes@baml.com

	
 

	
 

	
Attn:

	
Rita Menezes

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ING BANK

	
Lending
Office

60 London Wall

London EC2M 5TQ

England

Address for Notices

60 London Wall

London EC2M 5TQ

England

Fax: +44 (0) 20 7767 7252

Attn: Rory Hussey / Olga Terentieva

	
64,600,000

	
 

	
 

	
 

	
 

	
 

	
TOTAL COMMITMENT

	
229,200,000

	
 

	
 

79

Part II: The Swap Providers

	
 

	
 

	
 

	
 

	
Name

	
Swap Provider office and contact

details

	
 

	
 

	
 

	
 

	
DnB NOR Bank

ASA

	
Swap Provider Office

20
St. Dunstan’s Hill

London EC3R 8HY, England,
or any other branch or office as set out in the
relevant Master Swap Agreement

Address
for Notices

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

	
 

	
 

	
 

	
 

	
ABN AMRO BANK

N.V.

	
Swap Provider office

c/o Markets Documentation Unit 

PAC: HQ7000 

Gustav Mahlerlaan 10 

1082 PP

Amsterdam, The Netherlands 

Address
for Notices

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

	
 

	
 

	
 

	
 

	
ING BANK

 

	
Swap Provider Office

Foppingadreef
7, P.O. Box 1800, NL-1000 BV Amsterdam, The Netherlands

Address
for Notices

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

	
 

	
 

80

Schedule 2

Form of Drawdown Notice

Form of Drawdown Notice

(referred to in clause 2.4)

	
 

	
 

	
To:

	
DnB NOR Bank ASA

	
 

	
20 St Dunstan’s
Hill

	
 

	
London EC3R 8HY

	
 

	
England

	
 

	
(as Agent)

[Ÿ] 20[Ÿ]

US$229,200,000 Loan Facility 

Facility Agreement dated
[          ] 2011 (the
“Facility Agreement”)

We refer to the Facility Agreement and hereby
give you notice that we wish to draw down the [Ÿ] Advance[s] namely $[Ÿ] on [Ÿ]
20[Ÿ] and select [a first Interest Period in respect thereof of [Ÿ] months]
[the first interest period in respect hereof to expire on [Ÿ] 200[Ÿ]]. The
funds should be credited to [provide Builder’s bank details and SWIFT address].

	
 

	
 

	
We confirm that:

	
 

	
 

	
(a)

	
no event or circumstance has occurred and is continuing which
constitutes a Default;

	
 

	
 

	
(b)

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

	
 

	
 

	
(c)

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

	
 

	
 

	
(d)

	
no event has occurred or any other circumstances arisen or developed
including, without limitation, a material adverse change in the financial
position, state of affairs or prospects of any Security Party in light of
which there is a significant risk that the Corporate Guarantor or any
Borrower or any other Security Party is, or will later become, unable to
discharge its liabilities under the Security Documents as they fall due; and

	
 

	
 

	
(e)

	
the said Advance[s] will be used for our own benefit and under our
full responsibility and exclusively for the purpose specified in clauses 1.1
and 2.5 of the Facility Agreement.

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

	
 

	
 

	
For and on behalf
of each of

	
 

	
QUENTIN SHIPPING CO.

	
 

	
SANDER SHIPPING CO.

	
 

	
UNDINE SHIPPING CO.

	
 

81

Schedule 3

Documents and evidence required as conditions precedent

(referred to in clause 9.1)

Part 1

	
 

	
 

	
 

	
 

	
1

	
 

	
Constitutional
documents

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
2

	
 

	
Corporate
authorisations

	
 

	
 

	
 

	
 

	
 

	
 

	
copies of resolutions of the directors of each Security Party and
stockholders of each Security Party (other than the Corporate Guarantor)
approving such of the Underlying Documents and the Security Documents to
which such Security Party is, or is to be, party and authorising the
signature, delivery and performance of such Security Party’s obligations
thereunder, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the date of this Agreement) by an officer of such
Security Party as:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
being true and correct;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
not having been amended, modified or revoked; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
being in full force and effect,

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
3

	
 

	
Specimen
signatures

	
 

	
 

	
 

	
 

	
 

	
 

	
copies of the signatures of the persons who have been authorised on
behalf of each Security Party to sign such of the Underlying Documents and
the Security Documents to which such Security Party is, or is to be, party
and to give notices and communications, including notices of drawing, under
or in connection with the Security Documents, certified (in a certificate
dated no earlier than five (5) Banking Days prior to the date of this
Agreement) by an officer of such Security Party as being the true signatures
of such persons;

	
 

	
 

	
 

	
 

	
4

	
 

	
Certificate of
incumbency

	
 

	
 

	
 

	
 

	
 

	
 

	
a list of directors and officers of each Security Party specifying
the names and positions of such persons, certified (in a certificate dated no
earlier than five (5) Banking Days prior to the date of this Agreement) by an
officer of such Security Party to be true, complete and up to date;

	
 

	
 

	
 

	
 

	
5

	
 

	
Borrowers’
consents and approvals

	
 

	
 

	
 

	
 

	
 

	
 

	
a certificate (dated no earlier than five (5) Banking Days prior to
the date of this Agreement) from an officer of each of the Borrowers that no
consents, authorisations, licences or approvals are necessary for that
Borrower to authorise or are required by that Borrower in connection with the
borrowing by that Borrower of the Loan pursuant to this Agreement or the
execution, delivery and performance of that Borrowers’ Security Documents;

	
 

	
 

	
 

	
 

	
6

	
 

	
Other consents
and approvals

82

	
 

	
 

	
 

	
 

	
 

	
 

	
a certificate (dated no earlier than five (5) Banking Days prior to
the date of this Agreement) from an officer of each Security Party (other
than the Borrowers) that no consents, authorisations, licences or approvals
are necessary for such Security Party to guarantee and/or grant security for
the borrowing by the Borrowers of the Total Commitment pursuant to this
Agreement and execute, deliver and perform the Security Documents insofar as
such Security Party is a party thereto;

	
 

	
 

	
 

	
 

	
7

	
 

	
 “KYC”

	
 

	
 

	
 

	
 

	
 

	
 

	
such documentation and other evidence as is reasonably requested by
the Agent, in order for each Creditor to carry out and be satisfied with the
results of all necessary “know your client” or other checks which it is
required to carry out in relation to the transactions contemplated by this
Agreement and the other Security Documents and to the identity of any parties
to the Security Documents (other than the Creditors) and their directors and
officers;

	
 

	
 

	
 

	
 

	
8

	
 

	
Contracts and
Charters; Standard Form

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
a copy, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the date of this Agreement) as a true and complete copy
by legal counsel to the Borrowers, of each of the Contracts and the Charters;
and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the Standard Form has been submitted by the Borrowers to the Agent;

	
 

	
 

	
 

	
 

	
9

	
 

	
Charter terms

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence that each Charter: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
has a term of at least five (5) years from delivery (with an
extension option of 1 + 1 years at the option of either the Charterer or the
relevant Borrower) of the relevant Ship to the Charterer under the relevant
Charter; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
provides for a minimum net daily charterhire in the amount of not
less than $41,700 per day payable throughout the charter term; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
is governed by English law, subject to English arbitration and freely
assignable to the Security Agent;

	
 

	
 

	
 

	
 

	
10

	
 

	
Refund Guarantees

	
 

	
 

	
 

	
 

	
 

	
 

	
the original of the Refund Guarantee in respect of each Contract, in
respect of all the instalments payable thereunder (or, if sent by swift, such
Refund Guarantee sent by swift to the Agent);

	
 

	
 

	
 

	
 

	
11

	
 

	
Security
Documents

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the Corporate Guarantee, the Fee Letters, the Pre-delivery Security
Assignments, the Master Swap Agreements, the Swap Assignments, the Operating
Account Assignments, the Charter Assignments and the Trust Deed, each duly
executed by the parties thereto;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the notices of assignment in respect of each Refund Guarantee for
each Contract, and the notices of assignment in respect of each Contract,
each duly executed by the relevant Borrower in the forms prescribed by the
Pre-delivery Security Assignments; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
the notice of assignment of each Charter under each Charter
Assignment, in the form prescribed thereunder, each duly executed by the
relevant Borrower;

	
 

	
 

	
 

	
 

	
12

	
 

	
Operating Accounts

83

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
13

	
 

	
Fees and
commissions

	
 

	
 

	
 

	
 

	
 

	
evidence that any fees and commissions due under clause 5.1 have been
paid in full;

	
 

	
 

	
 

	
14

	
 

	
Financial
statements

	
 

	
 

	
 

	
 

	
 

	
a certified true copy of the audited consolidated financial
statements of the Corporate Guarantor for the financial year ended 31
December 2010;

	
 

	
 

	
 

	
15

	
 

	
Borrowers’
process agent

	
 

	
 

	
 

	
 

	
 

	
a letter from each Borrower’s agent for receipt of service of
proceedings referred to in clause 18.2 accepting its appointment under the
said clause and under each of the other Security Documents in which it is or
is to be appointed as such Borrower’s agent and referred to in this Part 1;

	
 

	
 

	
 

	
16

	
 

	
Security Parties’
process agent

	
 

	
 

	
 

	
 

	
 

	
a letter from each Security Party’s agent for receipt of service of
proceedings referred to in each of the Security Documents to which such
Security Party is a party and referred to in this Part 1 accepting its
appointment under each such Security Document;

	
 

	
 

	
 

	
17

	
 

	
Liberian opinion

	
 

	
 

	
 

	
 

	
 

	
an opinion of Poles, Tublin, Stratakis & Gonzalez, LLP, legal
advisers on matters of Liberian law to the Agent;

	
 

	
 

	
 

	
18

	
 

	
Korean opinion

	
 

	
 

	
 

	
 

	
 

	
an opinion of Kim & Chang legal advisers on matters of Korean law
to the Agent;

	
 

	
 

	
 

	
19

	
 

	
Marshall Islands
opinion

	
 

	
 

	
 

	
 

	
 

	
an opinion of Poles, Tublin, Stratakis & Gonzalez, LLP, legal
advisers on matters of Marshall Islands law to the Agent; and

	
 

	
 

	
 

	
20

	
 

	
Further
conditions

	
 

	
 

	
 

	
 

	
 

	
any such further conditions, documents or opinions as may be
reasonably required by the Agent.

84

Part 2

	
 

	
 

	
 

	
 

	
1

	
 

	
Drawdown Notice

	
 

	
 

	
 

	
 

	
 

	
 

	
The Drawdown Notice in respect of the relevant first, second, or, as
the case may be, third Contract Instalment Advance to be drawn down in
respect of a Ship (for the purposes of this Part 2 only, the “Relevant
Advance”), duly executed;

	
 

	
 

	
 

	
 

	
2

	
 

	
No claim

	
 

	
 

	
 

	
 

	
 

	
 

	
if required by the Agent, a written confirmation from the Corporate
Guarantor that neither the Builder nor any other party who may have a claim
pursuant to the Contract to which the Relevant Advance relates has any claims
against the Ship or the Borrower relating to the Relevant Advance and that
there have been no breaches of the terms of such Contract or any relevant
Refund Guarantee or any default thereunder;

	
 

	
 

	
 

	
 

	
3

	
 

	
No variations to
Contract or Refund Guarantee

	
 

	
 

	
 

	
 

	
 

	
 

	
if required by the Agent, a written statement from the Borrowers that
there have been no material amendments or variations agreed to the Contract
and no amendments or variations agreed to any Refund Guarantee (except as may
have already been advised by the Borrowers to the Agent in writing) in
respect of the Ship to which the Relevant Advance relates and that no action
has been taken by the Builder or the Refund Guarantor which might in any way
render the relevant Contract or any relevant Refund Guarantee inoperative or
unenforceable, in whole or in part;

	
 

	
 

	
 

	
 

	
4

	
 

	
No encumbrance

	
 

	
 

	
 

	
 

	
 

	
 

	
if required by the Agent, evidence that there is no Encumbrance of
any kind created or permitted by any person on or relating to the Contract or
the Refund Guarantee in respect of the Ship to which any Relevant Advance
relates other than Permitted Encumbrances;

	
 

	
 

	
 

	
 

	
5

	
 

	
Invoices 

	
 

	
 

	
 

	
 

	
 

	
 

	
an invoice or notification from the Builder demanding the payment of
the “1st Instalment”, the “2nd Instalment” or, as the
case may be, the “3rd Instalment” payable under the Contract in
respect of the Ship to which the Relevant Advance relates;

	
 

	
 

	
 

	
 

	
6

	
 

	
Refund Guarantee
matters

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the original of the Refund Guarantee in respect of all of the
pre-delivery instalments of the Contract Price for the Ship to which the
relevant Advance relates (or, if sent by swift, such Refund Guarantee sent by
swift to the Agent); and

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the notice of assignment in respect of such Refund Guarantee, duly
executed by the relevant Borrower in the form prescribed in the relevant
Pre-delivery Security Assignment;

	
 

	
 

	
 

	
 

	
7

	
 

	
Class
confirmation

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence from the Classification Society that:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
the cutting of the first steel plate of the Ship to which the Relevant
Advance relates has been completed at the Builder’s workshop (in the event
that the Relevant Advance is the second Contract Instalment Advance for that
Ship); or

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the first section of keel of the Ship to which the Relevant Advance
relates has been laid at the Builder’s drydock (in the event that the
Relevant Advance is the third Contract Instalment Advance for that Ship);

85

	
 

	
 

	
 

	
8

	
 

	
Equity

	
 

	
 

	
 

	
 

	
 

	
evidence that any part of the relevant instalment of the Contract
Price payable to the Builder in respect of that Ship, which is not being
funded by the Relevant Advance pursuant to this Agreement has been deposited
(not later than three (3) Banking Days before the proposed Drawdown Date of
the Relevant Advance) with the Agent for further payment to the Builder; and 

	
 

	
 

	
 

	
9

	
 

	
Further
conditions

	
 

	
 

	
 

	
 

	
 

	
any such further conditions, documents or evidence as may be
reasonably required by the Agent.

86

Part 3

	
 

	
 

	
 

	
1

	
 

	
Drawdown Notice

	
 

	
 

	
 

	
 

	
 

	
The Drawdown Notice in respect of the relevant Delivery Advance (for
the purposes of this Part 3 only, the “Relevant Advance”), duly executed;

	
 

	
 

	
 

	
2

	
 

	
Updated corporate
authorisations/certificates of incumbency

	
 

	
 

	
 

	
 

	
 

	
a list of directors and officers of each Security Party specifying
the names and positions of such persons and copies of the signatures of the
persons who have been authorised on behalf of each Security Party to sign
such of the Security Documents to which such Security Party is, or is to be,
party and referred to in this Part 3 in respect of the Relevant Advance, and
to give notices and communications, including notices of drawing, under or in
connection with the Security Documents, certified by legal counsel of such
Security Party to be, in the case of the list of directors, true, complete
and up to date and, in the case of the specimen signatures, true signatures
of such persons or a certificate by an officer of such Security Party that
the list provided in respect of that Security Party pursuant to
paragraph 4 of Part 1 of this schedule and that the specimen signatures
provided in respect of the Security Party pursuant to paragraph 3 of
Part 1 of this schedule remain true, complete and up to date;

	
 

	
 

	
 

	
3

	
 

	
Constitutional
documents

	
 

	
 

	
 

	
 

	
 

	
copies, certified by legal counsel of the relevant Manager(s) of the
Ship to which the Relevant Advance relates, as true, complete and up to date
copies of all documents which contain or establish or relate to the
constitution of each such Manager;

	
 

	
 

	
 

	
4

	
 

	
Corporate
authorisations

	
 

	
 

	
 

	
 

	
 

	
copies of resolutions of the directors and also (but only if required
by law in the opinion of the Agent’s legal counsel on matters of laws of the
country of incorporation of the relevant Manager) of the stockholders of the
relevant Manager(s) of the Ship to which the Relevant Advance relates, approving
such of the Underlying Documents and any Manager’s Undertakings in respect of
that Ship to which each such Manager is, or is to be, a party and authorising
the signature, delivery and performance of each such Manager’s obligations
thereunder, certified by legal counsel of each Manager as:

	
 

	
 

	
 

	
4.1

	
 

	
being true and correct;

	
 

	
 

	
 

	
4.2

	
 

	
being duly passed at meetings of the
directors of that Manager and, if applicable, of the stockholders of that
Manager, each duly convened and held;

	
 

	
 

	
 

	
4.3

	
 

	
not having been amended, modified or
revoked; and

	
 

	
 

	
 

	
4.4

	
 

	
being in full force and effect,

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
5

	
 

	
Certificate of
incumbency

	
 

	
 

	
 

	
 

	
 

	
a list of directors and officers of the relevant Manager(s) of the
Ship to which the Relevant Advance relates specifying the names and positions
of such persons, certified by an officer of each such Manager to be true,
complete and up to date;

	
 

	
 

	
 

	
6

	
 

	
Consents and
approvals

	
 

	
 

	
 

	
 

	
 

	
a certificate from an officer of the relevant Manager(s) of the Ship
to which the Relevant Advance relates that no consents, authorisations,
licences or approvals are necessary for each

87

	
 

	
 

	
 

	
 

	
 

	
 

	
such Manager to execute, deliver and perform any Manager’s
Undertaking in respect of that Ship to which it is a party;

	
 

	
 

	
 

	
 

	
7

	
 

	
Ship conditions

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence that the Ship to which the Relevant Advance relates:

	
 

	
 

	
 

	
 

	
7.1

	
 

	
Registration and Encumbrances

	
 

	
 

	
 

	
 

	
 

	
 

	
is registered in the name of the relevant Borrower through the
relevant Registry under the laws and flag of the relevant Flag State and that
such Ship and its Earnings, Insurances and Requisition Compensation are free
of Encumbrances; and

	
 

	
 

	
 

	
 

	
7.2

	
 

	
Classification

	
 

	
 

	
 

	
 

	
 

	
 

	
maintains the relevant Classification free of all overdue
requirements and recommendations of the relevant Classification Society; and 

	
 

	
 

	
 

	
 

	
7.3

	
 

	
Insurance

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
7.4

	
 

	
Delivery under Charter

	
 

	
 

	
 

	
 

	
 

	
 

	
has been delivered to the Charterer for service under the relevant
Charter (such evidence, if not practicable to be provided by the Charterer,
to be in the form of a written confirmation by the Borrowers);

	
 

	
 

	
 

	
 

	
8

	
 

	
Title and no
Encumbrances

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence that the transfer of title to the Ship to which the Relevant
Advance relates from the Builder to the relevant Borrower has been duly
recorded with the relevant Registry free from Encumbrances other than Permitted
Encumbrances;

	
 

	
 

	
 

	
 

	
9

	
 

	
Fees and
commissions

	
 

	
 

	
 

	
 

	
 

	
 

	
payment of any fees and commissions due from the Borrowers to any of
the Creditors pursuant to the terms of clause 5.1 or any other provision
of the Security Documents;

	
 

	
 

	
 

	
 

	
10

	
 

	
Delivery documents

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
a commercial invoice or any other similar document issued by the
Builder to the relevant Borrower in respect of the amount of the Contract
Price in respect of the Ship to which the Relevant Advance relates,
evidencing the payment in full of such Contract Price; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
copies of all the delivery documents to be exchanged between the
Builder and the relevant Borrower under the relevant Contract on Delivery of
such Ship, including, without limitation, the bill of sale, the builder’s certificate,
the protocol of delivery and acceptance and the declaration of warranty;

	
 

	
 

	
 

	
 

	
11

	
 

	
Class
confirmation

88

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence from the relevant Classification Society that the Ship to
which the Relevant Advance relates has been completed to its satisfaction;

	
 

	
 

	
 

	
 

	
12

	
 

	
Security
Documents

	
 

	
 

	
 

	
 

	
 

	
 

	
the Mortgage, the Deed of Covenant (if applicable), the General
Assignment and the Manager’s Undertaking(s) in respect of the Ship to which
the Relevant Advance relates, each duly executed and delivered;

	
 

	
 

	
 

	
 

	
13

	
 

	
Mortgage
registration

	
 

	
 

	
 

	
 

	
 

	
 

	
evidence that the Mortgage in respect of the Ship to which the
Relevant Advance relates has been registered against such Ship through the
relevant Registry under the laws and flag of the relevant Flag State;

	
 

	
 

	
 

	
 

	
14

	
 

	
Notices of
assignment

	
 

	
 

	
 

	
 

	
 

	
 

	
duly executed notices of assignment in the forms prescribed by the
Ship Security Documents for the Ship to which the Relevant Advance relates;

	
 

	
 

	
 

	
 

	
15

	
 

	
Insurance opinion

	
 

	
 

	
 

	
 

	
 

	
 

	
an
opinion from insurance consultants to the Agent in form and substance
satisfactory to the Agent and made at the cost and expense of the Borrowers,
on the insurances effected or to be effected in respect of the Ship to which
the Relevant Advance relates, upon and following the Delivery Date of such
Ship;

	
 

	
 

	
 

	
 

	
16

	
 

	
Borrowers’
process agent

	
 

	
 

	
 

	
 

	
 

	
 

	
a letter from the relevant Borrower’s agent for receipt of service of
proceedings referred to in each of the relevant Mortgage and/or the Deed of
Covenant and the General Assignment for the Ship to which the Relevant
Advance relates and in which it is or is to be appointed as that Borrower’s
agent accepting its appointment under each such document;

	
 

	
 

	
 

	
 

	
17

	
 

	
Security Parties’
process agent

	
 

	
 

	
 

	
 

	
 

	
 

	
a letter from each Security Party’s and each Manager’s agent for receipt
of service of proceedings referred to in each Security Document and Manager’s
Undertaking to which the relevant Security Party and relevant Manager is a
party and which is referred to in this Part 3 in respect of the Relevant
Advance, accepting its appointment under each of the relevant Security
Documents and the relevant Manager’s Undertaking(s);

	
 

	
 

	
 

	
 

	
18

	
 

	
Management
Agreement

	
 

	
 

	
 

	
 

	
 

	
 

	
a copy, certified as a true and complete copy by an officer of the
relevant Borrower, of each Management Agreement for the Ship to which the
Relevant Advance relates;

	
 

	
 

	
 

	
 

	
19

	
 

	
DOC and
application for SMC

	
 

	
 

	
 

	
 

	
 

	
 

	
a certified copy of the DOC and either (i) a certified copy of the
SMC for the Ship to which the Relevant Advance relates or (ii) evidence
satisfactory to the Agent that the Operator has applied for an SMC for such
Ship;

	
 

	
 

	
 

	
 

	
20

	
 

	
ISPS Code
compliance

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
evidence satisfactory to the Agent that the Ship to which the
Relevant Advance relates is subject to a ship security plan which complies
with the ISPS Code; and

89

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
a copy, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the Delivery Date of such Ship) as a true and complete
copy by an officer of the relevant Borrower of the ISSC for such Ship;

	
 

	
 

	
 

	
 

	
21

	
 

	
Liberian opinion

	
 

	
 

	
 

	
 

	
 

	
 

	
an opinion of Poles, Tublin, Stratakis & Gonzalez, LLP, legal
advisers on matters of Liberian law to the Agent;

	
 

	
 

	
 

	
 

	
22

	
 

	
Manager’s opinion

	
 

	
 

	
 

	
 

	
 

	
 

	
an opinion of legal advisers to the Agent on matters of the laws of
the jurisdiction of incorporation of the relevant Manager(s) for the Ship to
which the relevant Advance relates;

	
 

	
 

	
 

	
 

	
23

	
 

	
Flag State
opinion

	
 

	
 

	
 

	
 

	
 

	
 

	
an opinion of legal advisers to the Agent on matters of the laws of
the Flag State for the Ship to which the Relevant Advance relates; and

	
 

	
 

	
 

	
 

	
24

	
 

	
Further
conditions

	
 

	
 

	
 

	
 

	
 

	
 

	
such other conditions, documents or evidence, if any, as may be
reasonably required by the Agent.

90

Schedule 4

Form of Transfer Certificate

(refer to in clause 15.3)

TRANSFER CERTIFICATE

Banks are advised not to employ Transfer Certificates
or otherwise to assign or transfer interests in the Facility Agreement without
further ensuring that the transaction complies with all applicable laws and
regulations, including the Financial Services and Markets Act 2000 and
regulations made thereunder and similar statutes which may be in force in other
jurisdictions 

	
 

	
 

	
 

	
To:

	
 

	
DNB NOR BANK ASA as agent on its own behalf
and on behalf of the Borrowers, the Banks, the Account Bank, the Security
Agent and the Swap Providers defined in the Facility Agreement referred to
below. 

	
 

	
 

	
 

	
 

	
 

	
[Date]

	
Attention:

	
[Ÿ]

	
 

This certificate (“Transfer
Certificate”) relates to a facility agreement dated
[     ] 2011 (the “Facility
Agreement”) and made between (1) Quentin Shipping Co., Undine
Shipping Co. and Sander Shipping Co. (the “Borrowers”),
(2) the banks and financial institutions referred to therein as lenders (the “Banks”), (3) DnB NOR Bank ASA as Agent,
Security Agent and Account Bank and (4) the banks and financial institutions
referred to therein as swap providers, in relation to a loan facility of up to
two hundred and twenty nine million two hundred thousand Dollars ($229,200,000).
Terms defined in the Facility Agreement shall, unless otherwise defined herein,
have the same meanings herein as therein. 

In this Certificate:

the “Transferor” means [full name] of [lending office]; and 

the “Transferee” means [full name] of [lending office]. 

	
 

	
 

	
 

	
1

	
 

	
The
Transferor with full title guarantee assigns to the Transferee absolutely all
rights and interests (present, future or contingent) which the Transferor has
as a Bank under or by virtue of the Facility Agreement and all the Security Documents
in relation to [     ] per centum
([     ]%) of the [Contribution] [Commitment] of the
Transferor (or its predecessors in title), details of which are set out
below: 

	
 

	
 

	
 

	
 

	
Date of

	
Amount of

	
Transferor’s

	
Maturity Date

	
Advance[s]

	
Advance[s]

	
 [Contribution]

	
 

	
 

	
 

	
 [Commitment]

	
 

	
 

	
 

	
to Advance[s]

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
2

	
 

	
By virtue
of this Transfer Certificate and clause 15 of the Facility Agreement, the
Transferor is discharged [entirely from its [Contribution] [Commitment]
[which amounts to $[          ]] [from [        ]
per centum ([        ]%) of its [Contribution]
[Commitment], which percentage represents
$[          ]]. 

91

	
 

	
 

	
 

	
3

	
 

	
The
Transferee hereby requests the Agent (on behalf of itself, the Borrowers, the
Account Bank, the Security Agent, the Swap Providers and the Banks) to accept
the executed copies of this Transfer Certificate as being delivered pursuant
to and for the purposes of clause 15.3 of the Facility Agreement so as to
take effect in accordance with the terms thereof on [date of transfer]. 

	
 

	
 

	
 

	
4

	
 

	
The
Transferee: 

	
 

	
 

	
 

	
4.1

	
 

	
confirms
that it has received a copy of the Facility Agreement and the other Security
Documents together with such other documents and information as it has
required in connection with the transaction contemplated thereby;

	
 

	
 

	
 

	
4.2

	
 

	
confirms
that it has not relied and will not hereafter rely on the Transferor, the
Agent, the Account Bank, the Banks, the Swap Providers or the Security Agent
to check or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of the Facility Agreement, any of the
Security Documents or any such documents or information;

	
 

	
 

	
 

	
4.3

	
 

	
agrees
that it has not relied and will not rely on the Transferor, the Agent, the
Account Bank, the Banks, the Swap Providers or the Security Agent to assess
or keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrowers, or any other Security
Party (save as otherwise expressly provided therein);

	
 

	
 

	
 

	
4.4

	
 

	
warrants
that it has power and authority to become a party to the Facility Agreement
and has taken all necessary action to authorise execution of this Transfer
Certificate and to obtain all necessary approvals and consents to the
assumption of its obligations under the Facility Agreement and the Security
Documents; and 

	
 

	
 

	
 

	
4.5

	
 

	
if not
already a Bank, appoints (i) the Agent to act as its agent and (ii) the
Security Agent to act as its security agent and trustee, as provided in the
Facility Agreement and the Security Documents and agrees to be bound by the
terms of the Facility Agreement and the Security Documents. 

	
 

	
 

	
 

	
5

	
 

	
The
Transferor:

	
 

	
 

	
 

	
5.1

	
 

	
warrants
to the Transferee that it has full power to enter into this Transfer
Certificate and has taken all corporate action necessary to authorise it to
do so;

	
 

	
 

	
 

	
5.2

	
 

	
warrants
to the Transferee that this Transfer Certificate is binding on the Transferor
under the laws of England, the country in which the Transferor is
incorporated and the country in which its lending office is located; and 

	
 

	
 

	
 

	
5.3

	
 

	
agrees
that it will, at its own expense, execute any documents which the Transferee
reasonably requests for perfecting in any relevant jurisdiction the
Transferee’s title under this Transfer Certificate or for a similar purpose. 

	
 

	
 

	
 

	
6

	
 

	
The
Transferee hereby undertakes with the Transferor and each of the other
parties to the Facility Agreement and the other Security Documents that it
will perform in accordance with its terms all those obligations which by the
terms of the Facility Agreement and the other Security Documents will be
assumed by it after delivery of the executed copies of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any) subject
to which this Transfer Certificate is expressed to take effect. 

	
 

	
 

	
 

	
7

	
 

	
By
execution of this Transfer Certificate on their behalf by the Agent and in
reliance upon the representations and warranties of the Transferee, the
Borrowers, the Agent, the Security Agent, the Account Bank, the Swap
Providers and the Banks accept the Transferee as a party to the Facility
Agreement and the Security Documents with respect to all those rights and/or
obligations which by the terms of the Facility Agreement and the Security
Documents will be assumed by the Transferee (including those about pro-rata
sharing and the exclusion of liability on the part of, and the
indemnification of, the Agent, the Account Bank, the Swap Providers and the
Security Agent as provided by the Facility Agreement) after delivery of the
executed copies of this Transfer Certificate to the Agent and satisfaction of
the conditions (if any) subject to which this Transfer Certificate is
expressed to take effect. 

92

	
 

	
 

	
 

	
8

	
 

	
None of
the Transferor, the Agent, the Security Agent, the Account Bank, the Swap
Providers or the Banks: 

	
 

	
 

	
 

	
8.1

	
 

	
makes any
representation or warranty nor assumes any responsibility with respect to the
legality, validity, effectiveness, adequacy or enforceability of the
Facility Agreement or any of the Security Documents or any document relating
thereto; or 

	
 

	
 

	
 

	
8.2

	
 

	
assumes
any responsibility for the financial condition of the Borrowers or any of
them or any other Security Party or any party to any such other document or
for the performance and observance by the Borrowers or any of them or any
other Security Party or any party to any such other document (save as
otherwise expressly provided therein) and any and all such conditions and
warranties, whether express or implied by law or otherwise, are hereby
excluded (except as aforesaid). 

	
 

	
 

	
 

	
9

	
 

	
The
Transferor and the Transferee each undertake that they will on demand fully
indemnify the Agent in respect of any claim, proceeding, liability or expense
which relates to or results from this Transfer Certificate or any matter
concerned with or arising out of it unless caused by the Agent’s gross
negligence or wilful misconduct, as the case may be. 

	
 

	
 

	
 

	
10

	
 

	
The
agreements and undertakings of the Transferee in this Transfer Certificate
are given to and for the benefit of and made with each of the other parties
to the Facility Agreement and the Security Documents. 

	
 

	
 

	
 

	
11

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Transferor

	
 

	
Transferee

	
 

	
 

	
 

	
By:

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
Dated:

	
 

	
 

	
Dated:

	
 

Agent 

Agreed for and on behalf of itself as Agent, the Borrowers, the Security
Agent, the Account Bank, the Swap Providers and the Banks. 

	
 

	
 

	
 

	
DNB NOR BANK ASA

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
Dated:

	
 

	
 

Note: The
execution of this Transfer Certificate alone may not transfer a proportionate
share of the Transferor’s interest in the security constituted by the Security
Documents in the Transferor’s or Transferee’s jurisdiction. It is the
responsibility of the Transferee to ascertain whether any other documents are required
to perfect a transfer of such a share in the Transferor’s interest in such
security in any such jurisdiction and, if so, to seek appropriate advice and
arrange for execution of the same. 

93

The
Schedule

	
 

	
Outstanding Contribution: $[Ÿ]

	
Portion Transferred: [Ÿ]%

	
 

	
Commitment: $[Ÿ]

	
Portion Transferred: [Ÿ]%

	
 

	
Percentage of Transferor
immediately before transfers: [Ÿ]%

	
Percentage of Transferee
following transfers: [Ÿ]%

	
 

	
Administrative Details of Transferee

	
Name of Transferee:

	
Lending Office:

	
Contact Person:

	
(Loan Administration Department)

	
Telephone:

	
Telefax No:

	
 

	
Contact Person:

	
(Credit Administration
Department)

	
Telephone:

	
Telefax No:

	
[Account for
payments:]

94

Schedule 5

Contract Instalment Advances per Ship

	
 

	
 

	
 

	
Contract
Instalment 

Advances per Ship

	
Amount per Ship

($)

	
Time when
relevant Contract instalment
payable
(per Ship)

	
 

	
 

	
 

	
1st Contract
Instalment Advance

	
7,640,000

	
Later of (a) Specified
Date and (b) 5 New York business days from the issue of the Refund Guarantee

	
 

	
 

	
 

	
2nd Contract
Instalment Advance

	
7,640,000

	
Later of (a) Specified
Date and (b) 5 New York business days from cutting of the first steel plate
of the relevant Ship at the Builder’s workshop

	
 

	
 

	
 

	
3rd Contract
Instalment Advance

	
7,640,000

	
Later of (a) Specified
Date and (b) 5 New York business days from keel-laying of the first section
of the relevant Ship at the Builder’s drydock

“New York business day” for the purposes of this
schedule 5 shall have the meaning given to it in the Contracts.

“Specified Date” for the
purposes of this schedule 5 means, in relation to each instalment of the
Contract Price of a Ship referred to in the above table, the fixed date
specified in paragraph ©, (d) or (e) (as the case may be) of Article X(2) of
the Contract for that Ship as the earliest due date of that instalment.

95

Schedule 6

Form of Trust Deed

THIS DECLARATION OF TRUST by DNB NOR BANK
ASA (the “Security
Agent”) is made on [Ÿ] 20[ ] and is supplemental to (and made
pursuant to the terms of) a Facility Agreement dated [ ] 2011 (the “Agreement”)
and made between (1) Quentin Shipping Co., Undine Shipping Co. and Sander
Shipping Co. as joint and several Borrowers, (2) DnB NOR Bank ASA as Agent, (3)
the Security Agent, (4) the banks and financial institutions mentioned in
schedule 1 to the Agreement as Swap Providers and (5) the banks and
financial institutions mentioned in schedule 1 to the Agreement as the
Banks. Words and expressions defined in the Agreement shall have the same
meanings when used in this Deed.

NOW THIS DEED WITNESSETH as follows:

	
 

	
 

	
1

	
The Security Agent hereby acknowledges and declares that, from the
date of this Deed, it holds and shall hold the Trust Property on trust for
certain of the other Creditors on the terms and basis set out in the
Agreement.

	
 

	
 

	
2

	
The declaration and acknowledgement contained in paragraph 1
above shall be irrevocable.

	
 

	
 

	
 

	
 

	
EXECUTED as a DEED

	
)

	
 

	
by

	
)

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
DNB
NOR BANK ASA

	
)

	
Attorney-in-fact

	
(as Security
Agent)

	
)

	
 

	
in the presence
of:

	
)

	
 

96

Schedule 7

Mandatory Cost formula

	
 

	
 

	
 

	
1

	
The Mandatory Cost is an addition to the interest rate to compensate
Banks for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any
other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.

	
 

	
 

	
 

	
2

	
On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional
Cost Rate”) for each Bank, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Agent as a weighted
average of the Banks’ Additional Cost Rates (weighted in proportion to the
percentage participation of each Bank in the Loan or any relevant unpaid sum)
and will be expressed as a percentage rate per annum.

	
 

	
 

	
 

	
3

	
The Additional Cost Rate for any Bank lending from a lending office
in a Participating Member State will be the percentage notified by that Bank
to the Agent. This percentage will be certified by that Bank in its notice to
the Agent to be its reasonable determination of the cost (expressed as a
percentage of that Bank’s participation in the Loan or the relevant unpaid
sum made from that lending office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from that
lending office.

	
 

	
 

	
 

	
4

	
The Additional Cost Rate for any Bank lending from a lending office
in the United Kingdom will be calculated by the Agent as follows:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
per cent per
annum.

	
 

	
 

	
 

	
 

	
 

	
 

	
Where E is designed to compensate Banks for amounts payable
under the Fees Rules and is calculated by the Agent as being the most recent
rate of charge supplied by the Reference Bank to the Agent pursuant to
paragraph 6 below and expressed in pounds per £1,000,000.

	
 

	
 

	
 

	
5

	
For the purposes of this Schedule:

	
 

	
 

	
 

	
 

	
(a)

	
“Fees Rules” means the rules on periodic fees contained in
the Financial Services Authority Fees Manual or such other law or regulation
as may be in force from time to time in respect of the payment of fees for
the acceptance of deposits; 

	
 

	
 

	
 

	
 

	
(b)

	
“Fee Tariffs” means the fee tariffs specified in the Fees
Rules under Column 1 of the activity group A.1 Deposit acceptors (ignoring
any minimum fee or zero rated fee required pursuant to the Fees Rules but
taking into account any applicable discount rate);

	
 

	
 

	
 

	
 

	
(c)

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

	
 

	
 

	
 

	
 

	
(d)

	
“Special Deposits” has the meaning given to it from time to
time under or pursuant to the Bank of England Act 1998 or (as may be
appropriate) by the Bank of England; and

	
 

	
 

	
 

	
 

	
(e)

	
“Tariff Base” has the meaning given to it in, and will be
calculated in accordance with, the Fees Rules.

	
 

	
 

	
 

	
6

	
If requested by the Agent, the Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply to
the Agent, the rate of charge payable by the Reference Bank to the Financial
Services Authority pursuant to the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for this
purpose by the

97

	
 

	
 

	
 

	
 

	
Reference Bank as being the average of the Fee Tariffs
applicable to the Reference Bank for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of the Reference Bank.

	
 

	
 

	
 

	
7

	
Each Bank shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but without
limitation, each Bank shall supply the following information on or prior to
the date on which it becomes a Bank:

	
 

	
 

	
 

	
 

	
(a)

	
the jurisdiction
of its lending office; and

	
 

	
 

	
 

	
 

	
(b)

	
any other
information that the Agent may reasonably require for such purpose.

	
 

	
 

	
 

	
 

	
Each Bank shall
promptly notify the Agent of any change to the information provided by it
pursuant to this paragraph.

	
 

	
 

	
 

	
8

	
The rates of charge of the Reference Bank for the purpose of E
above shall be determined by the Agent based upon the information supplied to
it pursuant to paragraphs 6 and 7 above and on the assumption that, unless a
Bank notifies the Agent to the contrary, each Bank’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a
typical bank from its jurisdiction of incorporation with a lending office in
the same jurisdiction as its lending office.

	
 

	
 

	
 

	
9

	
The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any Bank
and shall be entitled to assume that the information provided by any Bank or
the Reference Bank pursuant to paragraphs 3, 6 and 7 above is true and
correct in all respects. 

	
 

	
 

	
 

	
10

	
The Agent shall distribute the additional amounts received as a
result of the Mandatory Cost to the Banks on the basis of the Additional Cost
Rate for each Bank based on the information provided by each Bank and the
Reference Bank pursuant to paragraphs 3, 6 and 7 above.

	
 

	
 

	
 

	
11

	
Any determination by the Agent pursuant to this schedule in relation
to a formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable to a Bank shall, in the absence of manifest error, be conclusive and
binding on all parties to this Agreement.

	
 

	
 

	
 

	
12

	
The Agent may from time to time, after consultation with the
Borrowers and the Banks, determine and notify to all parties to this
Agreement any amendments which are required to be made to this schedule in
order to comply with any change in law, regulation or any requirements from
time to time imposed by the Bank of England, the Financial Services Authority
or the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in
the absence of manifest error, be conclusive and binding on all parties to
this Agreement.

98

	
 

	
 

	
 

	
 

	
BORROWERS

	
 

	
 

	
 

	
SIGNED by

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
QUENTIN SHIPPING CO.

	
)

	
Attorney-in-fact

	
 

	
as Borrower

	
)

	
 

	
 

	
 

	
 

	
 

	
 

	
SIGNED by

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
UNDINE SHIPPING CO.

	
)

	
Attorney-in-fact

	
 

	
as Borrower

	
)

	
 

	
 

	
 

	
 

	
 

	
 

	
SIGNED by

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
SANDER SHIPPING CO.

	
)

	
Attorney-in-fact

	
 

	
as Borrower

	
)

	
 

	
 

	
 

	
 

	
 

	
 

	
CREDITORS

	
 

	
 

	
 

	
SIGNED by Pinelopi Karamadouki

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
DNB
NOR BANK ASA

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Agent, Account
Bank, Security Agent and Bank

	
)

	
Authorised
signatory 

	
 

	
 

	
 

	
 

	
 

	
SIGNED by Pinelopi Karamadouki

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
ABN
AMRO BANK N.V.

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Bank

	
)

	
Authorised
signatory 

	
 

	
 

	
 

	
 

	
 

	
SIGNED by

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
and by

	
)

	
Authorised
signatory

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
BANK OF AMERICA N.A.

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Bank

	
)

	
Authorised
signatory

	
 

	
 

	
 

	
 

	
 

	
SIGNED by Pinelopi Karamadouki

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
ING BANK

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Bank

	
)

	
Authorised signatory

	
 

	
 

	
 

	
 

	
 

	
SIGNED by Pinelopi Karamadouki

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
DNB
NOR BANK ASA

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Swap Provider

	
)

	
Authorised
signatory 

	
 

99

	
 

	
 

	
 

	
 

	
SIGNED by Pinelopi Karamadouki

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
ABN
AMRO BANK N.V

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Swap Provider

	
)

	
Authorised
signatory 

	
 

	
 

	
 

	
 

	
 

	
SIGNED by Pinelopi Karamadouki

	
)

	
 

	
 

	
for and on behalf
of

	
)

	
 

	
 

	
ING BANK

	
)

	
 

	
 

	
 

	
 

	 

	
 

	
as Swap Provider

	
)

	
Authorised
signatory

	
 

100eme10k2011ex1011

Exhibit 10.11
MISSION ENERGY HOLDING COMPANY 
AMENDED AND RESTATED TAX ALLOCATION AGREEMENT
This AMENDED AND RESTATED TAX ALLOCATION AGREEMENT (this “Agreement”) is entered into as of February 13, 2012, by and among Mission Energy Holding Company, a Delaware corporation (“MEHC”), its wholly owned subsidiary, Edison Mission Energy, a Delaware corporation (“EME”), and Capistrano Wind Holdings, Inc., a Delaware corporation (“CWHoldCo”), (each a “First Tier Subsidiaries”), and amends and restates in its entirety the Tax Allocation Agreement dated as of July 2, 2001, between MEHC and EME.
RECITALS
A.    Edison International, a California corporation, (“EIX”) which is the corporate parent of Edison Mission Group, a California corporation (“EMG”), has entered into an Amended and Restated Agreement for the Allocation of Income Tax Liabilities and Benefits (the “Master Agreement”) dated as of September 10, 1996, as amended, with Southern California Edison Company (“SCE”) and EMG providing, among other things, for an equitable allocation among EIX, SCE, and EMG of tax benefits and tax liabilities reflected in or resulting from the filing of consolidated or combined income or franchise tax returns.
B.    Pursuant to the Master Agreement, EMG makes payments to and receives payments from EIX reflecting tax benefits and tax liabilities realized by the Consolidated Group (as defined by the Master Agreement) arising from net operating income and losses, net capital gains and losses, and credits against tax attributable to EMG, its wholly owned subsidiaries and their respective subsidiaries.
C.    EMG has entered into an amended and restated tax allocation agreement with its wholly-owned first-tier subsidiaries, including MEHC (the “EMG Agreement”), dated February 13, 2012, providing for the allocation of tax benefits and tax liabilities between EMG and each of its wholly-owned first-tier subsidiaries and their respective subsidiaries.
D.    Pursuant to the EMG Agreement, the first-tier subsidiaries of EMG shall make and receive payments reflecting tax liabilities and tax benefits realized by the Consolidated Group (as defined in the Master Agreement) arising from net operating income and losses, net capital gains and losses, and credits against tax, in each case attributable to such first-tier subsidiaries and their respective subsidiaries (collectively, the “Subsidiaries”).
E.    The parties desire to further provide for the payment by MEHC to each of the First Tier Subsidiaries, or from each of the First Tier Subsidiaries, as the case may be, of the Separate Tax Benefits or Separate Tax Liabilities of each Subsidiary, calculated in accordance with the Master Agreement.
F.    Terms used and not defined herein have the meanings given them in the Master Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1     Tax Liability and Benefit Payments.  For each taxable period to which the Master Agreement is applicable, MEHC shall utilize the calculation made by EIX under the Master Agreement of the amount of the Separate Tax Liability or Separate Tax Benefit (as such terms are defined in the Master Agreement) of the First Tier Subsidiaries and each of the Subsidiaries which is owned directly or indirectly by such First Tier Subsidiary (“Lower Tier Subsidiaries”). On each date that any payment under the Master Agreement is to be made or received by MEHC (or would have been made or received if an amount had been owed or receivable), each of the First Tier Subsidiaries shall pay to MEHC the amount by which (a) the aggregate of the Separate Tax Liability of such First Tier Subsidiary, if it has a Separate Tax Liability, and the Separate Tax Liabilities of each of the Lower Tier Subsidiaries which has a Separate Tax Liability, exceeds (b) the aggregate of the Separate Tax Benefit of such First Tier Subsidiary, if it has a Separate Tax Benefit, and the Separate Tax Benefits of each of its Lower Tier Subsidiaries which has a Separate Tax Benefit. If, for any such taxable period, (a) the aggregate of the Separate Tax Benefit of a First Tier Subsidiary, if it has a Separate Tax Benefit, and the Separate Tax Benefits of each of its Lower Tier 

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Subsidiaries which has a Separate Tax Benefit exceeds (b) the aggregate of the Separate Tax Liability of such First Tier Subsidiary, if it has a Separate Tax Liability, and the Separate Tax Liabilities of each of its Lower Tier Subsidiaries which has a Separate Tax Liability, MEHC shall pay to such First Tier Subsidiary an amount equal to such excess.
All payments either by MEHC or by any First Tier Subsidiary shall be made without setoff, counterclaim or deduction of any kind whatsoever, and whether or not payment is due or has been received from EIX under the Master Agreement or from EMG under the EMG Agreement. MEHC shall give notice to, and invoice each of the First Tier Subsidiaries immediately after receipt of such invoice described in Section 1 of the EMG Agreement, which invoice shall state the date and the amount of each payment to be made by MEHC or the First Tier Subsidiary, as the case may be.  Each of the First Tier Subsidiaries shall provide (or cause to be provided) to EIX on a monthly basis, or upon demand as necessary, all relevant information necessary, to calculate federal and state tax liabilities and payments for itself and its Subsidiaries.
Section 2     Reconciliation of Tax Liability.  Upon receipt of each notice provided for in Section 2 of the EMG Agreement, relating to reconciliation of quarterly estimated tax payments against the Consolidated Returns, MEHC shall forthwith determine and notify each of the First Tier Subsidiaries of the effect, if any, of such reconciliation on the payments made to or received from such First Tier Subsidiary.  Each First Tier Subsidiary shall pay to MEHC any additional tax liability due, or receive payment from MEHC for any overpayment, on the same date that MEHC makes or receives any payments under Section 2 of the EMG Agreement.
Section 3     Adjustments to Tax Liability.  If any adjustments are made to the income, gains, losses, deductions or credits pertaining to the Subsidiaries, as reported in a Consolidated Return filed by EIX, by reason of the filing of an amended return or claim for refund, or arising out of an audit of such Consolidated Return by the Internal Revenue Service or applicable state agency, then the Separate Tax Liability or the Separate Tax Benefit of the Subsidiaries shall be redetermined to give effect to any such adjustment as if it had been made as part of the filed Consolidated Return.  If any interest or penalty is to be paid or interest received as a result of a tax deficiency or refund, such interest or penalty shall be allocated in accordance with the item(s) giving rise to such interest or penalty.
MEHC agrees to exercise its contest rights under the EMG Agreement on behalf of and First Tier Subsidiary and the reasonable costs so incurred by MEHC shall be allocated upon such basis as is mutually agreed to by MEHC and such First Tier Subsidiary in advance of such contest.  If, as a result of such re determination, any amounts due to MEHC or any of the First Tier Subsidiaries under this Agreement, as the case may be; shall exceed the amounts previously paid to such party, then payment of such excess shall be made by the appropriate party, as the case may be, on the earliest date on which (i) EIX shall pay, or be deemed to have paid, any additional taxes resulting from any such adjustment; (ii) EIX shall receive, or be deemed to have received, a refund of taxes resulting from any such adjustment; or (iii) such adjustment shall become final.  Any payment between MEHC and any of the First Tier Subsidiaries pursuant to (i) or (ii) above, however, shall not become final until the adjustment with respect to which the redetermination was made becomes final.  For purposes of this Section 3, an adjustment shall become final at the time of the expiration of the applicable statute of limitations with respect to the taxable period to which such adjustment relates, or, if such adjustment was made pursuant to a decision of a court, at the time such decision shall become final.  If a First Tier Subsidiary is unable to pay to MEHC any amounts due and owing under this Section 3, MEHC shall have the right to offset such deficiency against any present or future payment obligations of MEHC to such First Tier Subsidiary under Section 1 of this Agreement.
Section 4     Carryovers and Carrybacks.  If, for any taxable period ending on or after December 31,1986, any of the Subsidiaries has Net Losses which, under the applicable tax codes may be carried over or carried back to any taxable period in which EIX filed, or reasonably anticipates. that it will file, a Consolidated Return which includes such Subsidiary, and such Net Losses give rise to a reduction in the tax liability of the Consolidated Group that would not have arisen if such Subsidiary were excluded from the Consolidated Group for any such taxable period, MEHC shall pay to the applicable First Tier Subsidiary an amount equal to the actual reduction in the tax liability of the Consolidated Group for the taxable period to which such Net Losses may be carried, which is attributable to such carryover or carryback. Payment of such amount shall be made by MEHC (i) in the case of a carryover, on or before the later of (a) the 15th day of the third month after the end of the taxable period with respect to which the tax liability of the Consolidated Group was reduced and (b) the date on which such reduction in tax liability is finally determined, which shall be not later than 90 days after the Consolidated Return for such taxable period is filed; and (ii) in the case of a carryback, when the Consolidated Group shall receive, or be deemed to receive, the refund attributable to such carryback.
Section 5     Termination; Modification.  MEHC and Subsidiaries recognize that the EMG Agreement may be terminated or modified by EMG in accordance with its terms.  Should the EMG Agreement be so terminated or modified, this Agreement shall be terminated or deemed to be similarly modified, as of the same effective date and to the same extent as the 

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termination or modification of the EMG Agreement.  Notwithstanding the previous sentence, except as required by law, including, without limitation, the requirements of the California Public Utilities Commission, for so long as Capistrano Wind, LLC may reasonably be expected to be allocated Separate Tax Benefits from Capistrano Wind Partners, LLC (“Capistrano”), (a) this Agreement may not be (i) terminated with respect to CWHoldCo or (ii) modified if such modification grants a priority to any Subsidiary with respect to the utilization of Net Losses of such Subsidiary, in each case without the prior written consent of Capistrano, (b) MEHC shall not, and shall cause its Subsidiaries to not, take any action or fail to take any action which would cause Capistrano Wind, LLC (or its direct or indirect members) to be excluded from the Consolidated Group, without the prior written consent of Capistrano and (c) MEHC shall not waive or fail to enforce any of its rights under this Agreement or the EMG Agreement related to Capistrano (whether directly or indirectly through one or more tax sharing agreements by and among CWHoldCo and its Subsidiaries).  Any termination shall not relieve any party of any obligation arising under this Agreement with respect to any tax year commencing prior to the giving of such notice.
Section 6     Successors and Beneficiaries.  This Agreement may not be assigned, pledged, transferred or hypothecated by MEHC or any of the Subsidiaries without the express, mutual, written consent of MEHC and Subsidiaries, and the express, written consent of EMG.  This Agreement shall not confer any rights or remedies upon any person or entity other than (i) the parties hereto and their respective successors and permitted assigns and (ii) Capistrano, an express intended third party beneficiary of Section 5 of this Agreement who is entitled to enforce the provisions thereof as if Capistrano were a party hereto.  The parties hereto further acknowledge and agree that (w) Capistrano is not an incidental beneficiary, (x) the performance of Section 5 of this Agreement is of a pecuniary benefit to Capistrano, (y) Capistrano and its members would not enter into the amended and restated limited liability company agreement of Capistrano and certain related agreements (the “Capistrano Agreements”) but for the agreements and inducements of full and timely performance of the parties hereto as set forth herein, and (z) such performance is appropriate to effectuate the intention of the parties hereto in connection with this Agreement.  The parties hereto expressly waive any rights or defenses (including but not limited to lack of privity of contract and that Capistrano is not an intended beneficiary) they may have whatsoever with respect to Capistrano's right to enforce the terms of Section 5 of this Agreement.  The parties hereto expressly acknowledge that the provisions of Section 5 and this Section 6 of this Agreement are made expressly for the benefit of Capistrano and that this Agreement is irrevocable and may not be rescinded with respect to Capistrano's rights under such provisions.  The parties hereto acknowledge that this Agreement contemplates certain performance by such parties in satisfaction of the obligations set forth in the Capistrano Agreements.
Section 7     Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one and the same agreement.
Section 8     Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California.
Section 9     Additional First Tier Subsidiaries.  Any other wholly owned first tier MEHC subsidiary may be added to this Agreement as a First Tier Subsidiary at any time by addendum executed by MEHC and the subsidiary.  The addendum must provide such subsidiary will be bound by the terms of the Agreement.  MEHC shall provide a copy of the addendum to all other First Tier Subsidiaries.
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Agreement by their respective officers thereunto duly authorized as of the date first above written.
	
		
	MISSION ENERGY HOLDING COMPANY

	By:
	 /s/ Maria Rigatti

	Name:
	Maria Rigatti

	Title:
	Senior Vice President and Chief Financial Officer

	
		
	EDISON MISSION ENERGY

	By:
	 /s/ Maria Rigatti

	Name:
	Maria Rigatti

	Title:
	Senior Vice President and Chief Financial Officer

	
		
	CAPISTRANO WIND HOLDINGS, INC.

	By:
	 /s/ Maria Rigatti

	Name:
	Maria Rigatti

	Title:
	Vice President and Chief Financial Officer

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