EX-4.AGREEMENT 3 d545280_ex4-3.txt EX 4(3) Exhibit 4.3 ================================================================================ CREDIT FACILITY PROVIDING FOR A SENIOR SECURED TERM LOAN OF UP TO US$56,500,000 TO BE MADE AVAILABLE TO VITSI SHIPPING COMPANY LIMITED and PARNIS SHIPPING COMPANY LIMITED, as joint and several Borrowers, BY DVB BANK AG, Acting through its New York Branch, as Administrative Agent and Security Trustee, and the Banks and Financial Institutions identified on Schedule 1, as Lenders March 10, 2005 ================================================================================ CONTENTS PAGE ---- 1. DEFINITIONS...............................................................1 1.1 Specific Definitions...............................................1 1.2 Computation of Time Periods; Other Definitional Provisions........12 1.3 Accounting Terms..................................................12 1.4 Certain Matters Regarding Materiality.............................12 1.5 Forms of Documents................................................13 2. REPRESENTATIONS AND WARRANTIES...........................................13 2.1 Representations and Warranties....................................13 (a) Due Organization and Power...............................13 (b) Authorization and Consents...............................13 (c) Binding Obligations......................................13 (d) No Violation.............................................13 (e) Filings; Stamp Taxes.....................................13 (f) Litigation...............................................14 (g) No Default...............................................14 (h) Vessels..................................................14 (i) Insurance................................................14 (j) Financial Information....................................14 (k) Tax Returns..............................................14 (l) Chief Executive Office...................................15 (m) Foreign Trade Control Regulations........................15 (n) Equity Ownership.........................................15 (o) Environmental Matters and Claims.........................15 (p) Compliance with ISM Code, the ISPS Code and the MTSA.....16 (q) No Threatened Withdrawal of DOC, ISSC or SMC.............16 (r) Liens....................................................16 (s) Debt.....................................................16 (t) No Proceedings to Dissolve...............................16 (u) Solvency.................................................16 (v) Compliance with Laws.....................................16 (w) Survival.................................................16 3. THE ADVANCES.............................................................17 3.1 (a) Purposes......................................................17 (b) Making of the Advances........................................17 3.2 Drawdown Notice...................................................18 3.3 Effect of Drawdown Notice.........................................18 3.4 Notation of Advances..............................................18 4. CONDITIONS...............................................................18 4.1 Conditions Precedent to the Initial Advance.......................18 (a) Corporate Authority......................................18 (b) The Credit Facility Agreement and the Note...............19 (c) Guarantor Documents......................................19 (d) Guarantor Solvency.......................................19 (e) Environmental Claims.....................................19 (f) Fees.....................................................19 (g) Accounts.................................................19 (h) Compliance Certificate...................................20 (i) Vessel Appraisal.........................................20 (j) Money Laundering Due Diligence...........................20 (k) Legal Opinions...........................................20 4.2 Conditions Precedent re Delivery Advances.........................20 (a) The Vessels..............................................20 (b) Vessel Documents.........................................20 (c) Vessel Liens.............................................21 (d) ISM DOC..................................................21 (e) Legal Opinions...........................................21 4.3 Further Conditions Precedent......................................21 (a) Drawdown Notice..........................................21 (b) Representations and Warranties...........................21 (c) No Event of Default......................................21 (d) No Change in Laws........................................21 (e) No Material Adverse Effect...............................21 4.4 Breakfunding Costs................................................22 4.5 Satisfaction after Drawdown.......................................22 5. REPAYMENT AND PREPAYMENT.................................................22 5.1 Repayment.........................................................22 5.2 Voluntary Prepayment; No Re-Borrowing.............................22 5.3 Mandatory Prepayment..............................................22 5.4 Interest and Costs with Prepayments/Application of Prepayments....23 6. INTEREST AND RATE........................................................23 6.1 Applicable Rate...................................................23 6.2 Default Rate......................................................23 6.3 Interest Periods..................................................23 6.4 Interest Payments.................................................23 7. PAYMENTS ................................................................24 7.1 Place of Payments, No Set Off.....................................24 7.2 Tax Credits.......................................................24 7.3 Sharing of Setoffs................................................24 7.4 Computations; Banking Days. (a)..................................25 8. EVENTS OF DEFAULT........................................................25 8.1 Events of Default.................................................25 (a) Non-Payment of Principal.................................25 (b) Non-Payment of Interest or Other Amounts.................25 (c) Representations..........................................25 (d) Impossibility; Illegality................................25 (e) Mortgage.................................................25 (f) Covenants................................................25 (g) Debt.....................................................25 (h) Ownership of Borrowers...................................26 (i) Bankruptcy...............................................26 (j) Termination of Operations; Sale of Assets................26 (k) Judgments................................................26 (l) Inability to Pay Debts...................................26 (m) Change in Financial Position.............................26 (n) Change in Control........................................26 (o) Cross-Default............................................26 8.2 Indemnification...................................................27 8.3 Application of Moneys.............................................27 9. COVENANTS................................................................28 9.1 Affirmative Covenants.............................................28 (a) Performance of Agreements................................28 (b) Notice of Default, etc...................................28 (c) Obtain Consents..........................................28 (d) Financial Information....................................28 (e) Vessel Valuations........................................29 (f) Corporate Existence......................................29 (g) Books and Records........................................29 (h) Taxes and Assessments....................................30 (i) Inspection...............................................30 (j) Inspection and Survey Reports............................30 (k) Compliance with Statutes, Agreements, etc................30 (l) Environmental Matters....................................30 (m) Vessel Management........................................30 (n) ISM Code, ISPS Code and MTSA Matters.....................31 (o) Brokerage Commissions, etc...............................31 (p) Deposit Accounts; Assignment.............................31 (q) Insurance................................................31 (r) Interest Rate Agreements.................................31 9.2 Negative Covenants................................................31 (a) Liens....................................................31 (b) Debt.....................................................32 (c) Change of Flag, Class, Management or Ownership...........32 (d) Chartering...............................................32 (e) Change in Business.......................................32 (f) Sale or Pledge of Shares.................................32 (g) Sale of Assets...........................................32 (h) Changes in Offices.......................................32 (i) Consolidation and Merger.................................32 (j) Change Fiscal Year.......................................32 (k) Limitations on Ability to Make Distributions.............32 (l) Use of Corporate Funds...................................33 (m) Issuance of Shares.......................................33 (n) No Money Laundering......................................33 (o) Use of Proceeds..........................................33 (p) Guarantor Chief Executive Officer........................33 9.3 Financial Covenants...............................................33 (a) Adjusted Net Worth.......................................33 (b) EBITDA to Fixed Charges..................................33 (c) Minimum Liquidity........................................33 9.4 Asset Maintenance.................................................33 10. ASSIGNMENT...............................................................34 11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC........................34 11.1 Illegality........................................................34 11.2 Increased Costs...................................................34 11.3 Nonavailability of Funds..........................................35 11.4 Lender's Certificate Conclusive...................................36 11.5 Compensation for Losses...........................................36 12. CURRENCY INDEMNITY.......................................................36 12.1 Currency Conversion...............................................36 12.2 Change in Exchange Rate...........................................36 12.3 Additional Debt Due...............................................36 12.4 Rate of Exchange..................................................36 13. FEES AND EXPENSES........................................................37 13.1 Fees..............................................................37 13.2 Expenses..........................................................37 14. APPLICABLE LAW, JURISDICTION AND WAIVER..................................37 14.1 Applicable Law....................................................37 14.2 Jurisdiction......................................................37 14.3 WAIVER OF JURY TRIAL..............................................38 15. THE AGENTS...............................................................38 15.1 Appointment of Agents.............................................38 15.2 Security Trustee as Trustee.......................................38 15.3 Distribution of Payments..........................................38 15.4 Holder of Interest in Note........................................39 15.5 No Duty to Examine, Etc...........................................39 15.6 Agents as Lenders.................................................39 15.7 Acts of the Agents................................................39 15.8 Certain Amendments................................................40 15.9 Assumption re Event of Default....................................40 15.10 Limitations of Liability..........................................40 15.11 Indemnification of the Agents.....................................41 15.12 Consultation with Counsel.........................................41 15.13 Resignation.......................................................41 15.14 Representations of Lenders........................................41 15.15 Notification of Event of Default..................................41 15.16 No Agency or Trusteeship if not Syndicated........................42 16. NOTICES AND DEMANDS......................................................42 16.1 Notices...........................................................42 17. MISCELLANEOUS............................................................42 17.1 Time of Essence...................................................42 17.2 Unenforceable, etc., Provisions-Effect............................42 17.3 References........................................................42 17.4 Further Assurances................................................42 17.5 Prior Agreements, Merger..........................................43 17.6 Entire Agreement; Amendments......................................43 17.7 Indemnification...................................................43 17.8 Headings..........................................................44 17.9 WAIVER OF IMMUNITY................................................44 SCHEDULE -------- 1 The Lenders and the Initial Commitments 2 The Borrowers and Vessels EXHIBITS -------- A Form of Note B Form of Guaranty C Form of Account Pledge D Form of Mortgage E Form of Earnings Assignment F Form of Insurances Assignment G Form of Assignment and Assumption Agreement H Form of Compliance Certificate I Form of Drawdown Notice J Form of Interest Notice K Form of Comfort Letter SENIOR SECURED TERM CREDIT FACILITY ----------------------------------- THIS SENIOR SECURED TERM CREDIT FACILITY AGREEMENT (this "Credit Facility Agreement") is made as of the 10th day of March, 2005, by and among (1) VITSI SHIPPING COMPANY LIMITED, a corporation organized and existing under the laws of the Republic of Liberia, and PARNIS SHIPPING COMPANY LIMITED, a corporation organized and existing under the laws of the Republic of the Marshall Islands (the "Borrowers"), (2) the banks and financial institutions listed on Schedule 1, as lenders (together with any bank or financial institution which becomes a Lender pursuant to Section 10, the "Lenders") and (3) DVB BANK AG, acting through its New York Branch ("DVB"), as administrative agent for the Lenders (in such capacity, the "Administrative Agent") and as security trustee for the Lenders (in such capacity, the "Security Trustee"). WITNESSETH THAT: --------------- WHEREAS, at the request of the Borrowers, the Administrative Agent has agreed to serve in such capacity under the terms of this Credit Facility Agreement and the Lenders have agreed to provide to the Borrowers a senior secured credit facility for a term loan to be made available in two tranches in the lesser amount of US$ 56,500,000 or 60% of the Fair Market Value of the Vessels, as defined below; NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as set forth below: 1. DEFINITIONS 1.1 Specific Definitions. In this Credit Facility Agreement the words and expressions specified below shall, except where the context otherwise requires, have the meanings attributed to them below: "Acceptable Accounting Firm" means Ernst & Young, or such other recognized international accounting firm as shall be approved by the Administrative Agent, such approval not to be unreasonably withheld; "Account Pledge" means the pledge agreement to be executed by the Borrowers in favor of the Security Trustee in respect of the Operating Account pursuant to Section 4.1(g), substantially in the form set out in Exhibit C; "Accounting Period" means each consecutive period of three months falling during the period (ending on the last day in March, June, September and December of each year) for which quarterly accounting information is required to be provided to the Administrative Agent hereunder; "Adjusted Net Worth" means, measured at the end of an Accounting Period, the amount of Total Assets less Consolidated Debt as stated in then most recent accounting information delivered to the Administrative Agent hereunder; "Administrative Agent" shall have the meaning ascribed thereto in the preamble; "Advance(s)" means any amount advanced to the Borrowers with respect to the Facility or (as the context may require) the aggregate amount of all such Advances for the time being outstanding; "Affiliate" means with respect to any Person, any other Person directly or indirectly controlled by or under common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as applied to any Person means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of that Person whether through ownership of voting securities or by contract or otherwise; "Agents" means each of the Administrative Agent and the Security Trustee; "Applicable Rate" means any rate of interest applicable to the Facility from time to time pursuant to Section 6.1; "Assigned Moneys" means sums assigned to or received by the Agents pursuant to any Security Document; "Assignment and Assumption Agreement(s)" means the Assignment and Assumption Agreement(s) executed pursuant to Section 10 substantially in the form set out in Exhibit G; "Assignment Notices" means: (i) notices with respect to the Earnings Assignments substantially in the form set out in Exhibit 1 thereto; and (ii) notices with respect to the Insurances Assignments substantially in the form set out in Exhibit 3 thereto; "Assignments" means the Earnings Assignments and the Insurances Assignments; "Banking Day(s)" means day(s) on which banks are open for the transaction of business in London, England, New York, New York, Amsterdam, The Netherlands, and Curacao, Netherlands Antillies; "Borrower(s)" shall have the meaning ascribed thereto in the preamble; "Change of Control" means (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a member of the immediate family of Evangelos Pistiolis, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 35% of the total voting power or ownership interest of the Borrowers or (b) the Board of Directors of the Borrowers ceases to consist of a majority of the directors existing on the date hereof or directors nominated by at least two-thirds (2/3) of the then existing directors; "Classification Society" means a member of the International Association of Classification Societies with whom any of the Vessels are entered and who conducted periodic physical surveys and/or inspections of any of the Vessels; "CLO" shall have the meaning ascribed thereto in Section 10; "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute and regulation promulgated thereunder; "Collateral" means all property or other assets, real or personal, tangible or intangible, whether now owned or hereafter acquired in which any Agent or any Lender has been granted a security interest pursuant to a Security Document; "Comfort Letter" means a letter from the Guarantor addressed to the Administrative Agent substantially in the form of Exhibit K; "Commitment(s)" means in relation to a Lender, the portion of the Facility set out opposite its name in Schedule 1 or, as the case may be, as reduced by or set out in any relevant Assignment and Assumption Agreement, as such amount shall be reduced from time to time pursuant to Section 5; "Commitment Fee" shall have the meaning ascribed thereto in Section 13.1; "Compliance Certificate" means a certificate certifying the compliance by each of the Borrowers and/or the Guarantor, as the case may be, with all of its respective covenants contained herein and showing the calculations thereof in reasonable detail, executed and delivered by the chief financial officer of each of the Borrowers to the Administrative Agent from time to time pursuant to Section 9.1(d) in the form set out in Exhibit H, or in such other form as the Administrative Agent may agree; "Consent and Agreement" means the consent and agreement relating to this Credit Facility Agreement to be executed by the Guarantor in the form attached hereto; "Consolidated Debt" means, measured at the end of an Accounting Period for the Guarantor and its subsidiaries on a consolidated basis, the aggregate amount of Debt due by the Security Parties (other than any such Debt owing by one member of the Guarantor Group to another member of the Guarantor Group) as stated in the then most recent accounting information delivered to the Administrative Agent hereunder; "Consolidated Financial Indebtedness" means, measured at the end of each Accounting Period, the aggregate amount of Financial Indebtedness (including current maturities) of the Guarantor Group on a consolidated basis (other than any such Financial Indebtedness owing by one member of the Guarantor Group to another member of the Guarantor Group) as stated in the then most recent accounting information delivered to the Administrative Agent hereunder; "Credit Facility Agreement" means this agreement, as the same shall be amended, modified or supplemented from time to time; "Current Assets" means, measured at the end of each Accounting Period, the aggregate of the cash and marketable securities, trade and other receivables of the Guarantor Group on a consolidated basis from persons (other than a member of the Guarantor Group) which can be realized within one year, inventories and prepaid expenses which are to be charged to income within one year less any doubtful debts and any discounts or allowances given as stated in the then most recent accounting information delivered to the Administrative Agent hereunder; "Debt" means, in relation to any of the members of the Guarantor Group (the "debtor"): (a) Financial Indebtedness of the debtor; (b) liability for any credit to the debtor from a supplier of goods or services or under any installment purchase or payment plan or similar arrangement; (c) contingent liabilities of the debtor (including without limitation any taxes or other payments under dispute) which have been or, under GAAP, should be recorded in the notes to the accounting information; (d) deferred tax of the debtor; and (e) liability under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person who is not a Security Party which would fall within (a) to (d) if the references to the debtor referred to the other Person; "Default Rate" shall have the meaning ascribed thereto in Section 6.2; "Delivery Advance" means with respect to each Tranche, the Advance to be made to the Borrowers in respect of the delivery of the Vessel to which such Tranche relates to the relevant Borrower; "Delivery Date" means with respect to each Vessel the date on which Vessel is delivered to the Borrowers; "DOC" means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code; "Dollars" and the sign "$" means the legal currency, at any relevant time hereunder, of the United States of America and, in relation to all payments hereunder, in same day funds settled through the New York Clearing House Interbank Payments System (or such other Dollar funds as may be determined by the Administrative Agent to be customary for the settlement in New York City of banking transactions of the type herein involved); "Drawdown Date(s)" means the dates, each being a Banking Day, upon which the Borrowers have requested that an Advance be made available to the Borrowers, and such Advance is made, as provided in Section 3; provided, however, that with respect to either Tranche, no Drawdown Date shall fall later than 10 days from the Delivery Date of the Vessel to which such Tranche relates, unless otherwise agreed to by the Lenders; and provided, further, that no Drawdown Date shall occur after April 30, 2005; "Drawdown Notice" shall have the meaning ascribed thereto in Section 3.2; "DVB" shall have the meaning ascribed thereto in the preamble; "EBITDA" means, in respect of an Accounting Period, the aggregate amount of consolidated pre-tax profits of the Guarantor Group before extraordinary or exceptional items, depreciation, interest, rentals under finance leases and similar charges payable as stated in the then most recent accounting information; "Earnings Assignment(s)" means the assignments in respect of the earnings of each Vessel from any and all sources, to be executed by the relevant Borrower in favor of the Security Trustee pursuant to Section 4.2(b), substantially in the form set out in Exhibit E; "Environmental Affiliate(s)" means any person or entity, the liability of which for Environmental Claims any Security Party or Subsidiary of any Security Party may have assumed by contract or operation of law; "Environmental Approval(s)" shall have the meaning ascribed thereto in Section 2.1(o); "Environmental Claim(s)" shall have the meaning ascribed thereto in Section 2.1(o); "Environmental Law(s)" shall have the meaning ascribed thereto in Section 2.1(o); "Event(s) of Default" means any of the events set out in Section 8.1; "Exchange Act" shall mean the Securities and Exchange Act of 1934, as amended; "Facility" means the term loan facility to be made available by the Lenders to the Borrowers hereunder in two Tranches comprising multiple Advances pursuant to Section 3; the lesser of aggregate principal amount of Fifty Six Million Five Hundred Thousand Dollars ($56,500,000) or sixty percent (60%) of the Fair Market Value of the Vessels; "Fair Market Value" means, in respect of either Vessel, the value of a Vessel as determined by an appraisal by a first-class, independent sale and purchase broker acceptable to the Lenders; "Final Availability Date" means the later of the Drawdown Date in respect of Tranche 2 or April 30, 2005; "Final Payment Date" means, that date which is seven years after the Drawdown Date of Tranche 2, but not later than April 30, 2012; "Financial Indebtedness" means, in relation to any member of the Guarantor Group (the "debtor"), a liability of the debtor: (a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor; (b) under any loan stock, bond, note or other security issued by the debtor; (c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor; (d) under a financial lease, a deferred purchase consideration arrangement (in each case, other than in respect of assets or services obtained on normal commercial terms in the ordinary course of business) or any other agreement having the commercial effect of a borrowing or raising of money by the debtor; (e) under any foreign exchange transaction, interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or (f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person; "Fixed Charges" means, measured at the end of an Accounting Period, the aggregate of Interest Expenses and the portion of Consolidated Financial Indebtedness (other than balloon repayments) in respect of the Guarantor Group falling due during that period, as stated in the then most recent accounting information provided to the Administrative Agent hereunder; "GAAP" shall have the meaning ascribed thereto in Section 1.3; "Guarantor" means Top Tankers Inc., a company incorporated under the laws of the Republic of the Marshall Islands; "Guarantor Group" means the Guarantor and each of its Subsidiaries; "Guaranty" means the unconditional and irrevocable guaranty to be executed by the Guarantor in respect of the obligations of the Borrowers under and in connection with this Credit Facility Agreement and the Note in favor of the Security Trustee pursuant to Section 4.l(c), substantially in the set out in form of Exhibit B; "Indemnitee" shall have the meaning ascribed thereto in Section 17.7; "Initial Advance" means the first Advance to be made under the Facility; "Initial Payment Date" means the date which is three (3) months after the Drawdown Date of Tranche 2 of the Facility, but no later than July 31, 2005; "Insurances Assignment" means the assignments in respect of the insurances over each of the Vessels to be executed by the relevant Borrowers in favor of the Security Trustee pursuant to Section 4.2(b), substantially in the form set out in Exhibit F; "Interest Expense" means, measured at the end of an Accounting Period, the aggregate on a consolidated basis of all interest incurred by the Guarantor Group (excluding any amounts owing by one member of the Guarantor Group to another member of the Guarantor Group) and any net amounts payable under interest rate hedge agreements, as stated in the then most recent accounting information provided to the Administrative Agent hereunder; "Interest Notice" means a notice from the Borrowers to the Administrative Agent specifying the duration of any relevant Interest Period, each substantially in the form set out in Exhibit J; "Interest Payment Date" means each date on which accrued interest on the Facility shall be payable pursuant to Section 6.4; "Interest Period(s)" means period(s) of three (3), six (6) or twelve (12) months as selected by the Borrowers, or as otherwise agreed by the Lenders and each of the Borrowers; "Interest Rate Agreements" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement entered into between each of the Borrowers, the Guarantor or any Subsidiary of the Borrowers with DVB, which is designed to protect the Borrowers, the Guarantor or any of the Borrowers' Subsidiaries against fluctuations in interest rates applicable under this Agreement, to or under which the Borrowers, the Guarantor or any of the Borrowers' Subsidiaries is a party or a beneficiary on the date of this Agreement or becomes a party or a beneficiary hereafter; "ISM Code" means the International Safety Management Code for the Safe Operating of Ships and for Pollution Prevention constituted pursuant to Resolution A.741(18) of the International Maritime Organization and incorporated into the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto; "ISPS Code" means the International Ship and Port Facility Security Code adopted by the International Maritime Organization (as the same may be amended from time to time); "ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code; "Lender(s)" shall have the meaning ascribed thereto in the preamble; "LIBOR" means the rate (rounded upward to the nearest 1/16th of one percent) for deposits of Dollars for a period equivalent to the relevant Interest Period at or about 11:00 a.m. (London time) on the second London Banking Day before the first day of such period as displayed on Telerate page 3750 (British Bankers' Association Interest Settlement Rates) (or such other page as may replace such page 3750 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) dated August 1985)), provided that if on such date no such rate is so displayed for the relevant Interest Period, LIBOR for such period shall be the rate quoted to the Administrative Agent by the Reference Bank at the request of the Administrative Agent as the offered rate for deposits of Dollars in an amount approximately equal to the amount in relation to which LIBOR is to be determined for a period equivalent to the relevant Interest Period to prime banks in the London Interbank Market at or about 11:00 a.m. (London time) on the second Banking Day before the first day of such period; "Liquid Funds" means, measured at the end of an Accounting Period: (a) cash in hand or held with banks or other financial institutions of the Guarantor and/or any other Security Party in Dollars or another currency freely convertible into Dollars, which is free of any security interest (other than a permitted security interest and other than ordinary bankers' liens which have not been enforced or become capable of being enforced); or (b) any other short-term financial investments which is free of any Security Interest (other than a permitted security interest), as stated in the then most recent accounting information delivered to the Administrative Agent hereunder; "Majority Lenders" means, at any time, Lenders holding an aggregate of more than 50% of the Advances then outstanding; "Margin" shall have the meaning ascribed thereto in Section 6.1; "Material Adverse Effect" shall mean a material adverse effect on (i) the ability of either of the Borrowers to repay the Advances or perform any of its obligations hereunder or under the Note, (ii) the ability of any Security Party to perform its obligations under any Security Documents or (iii) the business, property, assets, liabilities, operations, condition (financial or otherwise) or prospects of the Security Parties taken as a whole; "Mortgages" means the first preferred cross-collateralized Liberian or Marshall Islands, as the case may be, ship mortgages on each of the Vessels, to be executed by the respective Borrowers as listed in Schedule 2 in favor of the Security Trustee (as trustee for the Lenders) pursuant to Section 4.3(b), substantially in the form set out in Exhibit D; "MTSA" means the Maritime and Transportation Security Act, 2002, as amended, inter alia, by Public Law 107-295; "Note" means the promissory note to be executed by the Borrowers to the order of the Administrative Agent pursuant to Section 4.1(b), to evidence the Facility, substantially in the form set out in Exhibit A; "Operating Account" shall have the meaning ascribed thereto in Section 4.1(g); "Operator" means, in respect of any Vessel, the Person who is concerned with the operation of such Vessel and falls within the definition of "Company" set out in rule 1.1.2 of the ISM Code; "Payment Dates" means the Initial Payment Date and the dates falling at three month intervals thereafter, the last of which is the Final Payment Date; "Person" means any individual, sole proprietorship, corporation, partnership (general or limited), limited liability company, business trust, bank, trust company, joint venture, association, joint stock company, trust or other unincorporated organization, whether or not a legal entity, or any government or agency or political subdivision thereof; "Proceeding" shall have the meaning ascribed thereto in Section 8.1(i); "Reference Banks" means DVB; "Regulation T" means Regulation T of the Board of Governors of the Federal Reserve System, as in effect from time to time; "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time; "Regulation X" means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time; "Required Percentage" means one hundred and thirty percent (130%) of the amount of the outstanding Facility and the notional cost or actual cost (if any) as determined by the Lender of terminating any interest rate swap entered into by the Borrowers; "Security Document(s)" means the Pledge Agreement, the Guaranty, the Mortgages, the Assignments and any other documents that may be executed as security for the Facility and the Borrowers' obligations in connection therewith; "Security Party(ies)" means each of the Borrowers and the Guarantor; "Security Trustee" shall have the meaning ascribed thereto in the preamble; "SMC" means the safety management certificate issued in respect of each Vessel in accordance with rule 13 of the ISM code; "Subsidiary(ies)" means, with respect to any Person, any business entity of which more than 50% of the outstanding voting stock or other equity interest is owned directly or indirectly by such Person and/or one or more other Subsidiaries of such Person; "Tangible Fixed Assets" means, measured at the end of an Accounting Period, the value (less depreciation computed in accordance with GAAP) on a consolidated basis of all tangible fixed assets of the Security Parties as stated in the then most recent accounting information delivered to the Administrative Agent hereunder; "Taxes" means any present or future income or other taxes, levies, duties, charges, fees, deductions or withholdings of any nature now or hereafter imposed, levied, collected, withheld or assessed by any taxing authority whatsoever, except for taxes on or measured by the overall net income of each Lender imposed by its jurisdiction of incorporation or applicable lending office, the United States of America, the State or City of New York or any governmental subdivision or taxing authority of any thereof or by any other taxing authority having jurisdiction over such Lender (unless such jurisdiction is asserted by reason of the activities of any of the Security Parties or any other member of the Guarantor Group); "Total Assets" means, measured at the end of an Accounting Period, the aggregate of Current Assets and Tangible Fixed Assets as stated in the then most recent financial information delivered to the Administrative Agent hereunder; "Total Loss" shall have the meaning ascribed thereto in the Mortgages; "Tranche(s)" means any, all or any combination, as the context requires, of Tranche 1 and Tranche 2; "Tranche 1" means the portion of the Facility attributable to the STOPLESS to be made available by the Lenders pursuant to Section 3.1 hereof to the Borrowers in one or more Advances; "Tranche 2" means the portion of the Facility attributable to the STAINLESS to be made available by the Lenders pursuant to Section 3.1 hereof to the Borrowers in one or more Advances; "Vessel(s)" each of the Vessels listed in Schedule 2, registered or to be registered in the name of the relevant Borrower as set forth in such Schedule, but excluding any Vessel for which a mandatory prepayment is made pursuant to Section 5.3; and 1.2 Computation of Time Periods; Other Definitional Provisions. In this Credit Facility Agreement, the Note and the Security Documents, in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding"; words importing either gender include the other gender; references to "writing" include printing, typing, lithography and other means of reproducing words in a tangible visible form; the words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation"; references to articles, sections (or subdivisions of sections), exhibits, annexes or schedules are to this Credit Facility Agreement, the Note or such Security Document, as applicable; references to agreements and other contractual instruments (including this Credit Facility Agreement, the Note and the Security Documents) shall be deemed to include all subsequent amendments, amendments and restatements, supplements, extensions, replacements and other modifications to such instruments (without, however, limiting any prohibition on any such amendments, extensions and other modifications by the terms of this Credit Facility Agreement, the Note or any Security Document); references to any matter that is "approved" or requires "approval" of a party shall mean approval given in the sole and absolute discretion of such party unless otherwise specified. 1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms used in this Credit Facility Agreement, the Note and in the Security Documents shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Administrative Agent or to the Lenders under this Credit Facility Agreement shall be prepared, in accordance with generally accepted accounting principles for the United States ("GAAP") as from time to time in effect. 1.4 Certain Matters Regarding Materiality. To the extent that any representation, warranty, covenant or other undertaking of either of the Borrowers or the Guarantor in this Credit Facility Agreement is qualified by reference to those which are not reasonably expected to result in a "Material Adverse Effect" or language of similar import, no inference shall be drawn therefrom that any Agent or Lender has knowledge or approves of any noncompliance by either of the Borrowers or the Guarantor with any governmental rule. 1.5 Forms of Documents. Except as otherwise expressly provided in this Credit Facility Agreement, references to documents or certificates "substantially in the form" of Exhibits to another document shall mean that such documents or certificates are duly completed in the form of the related Exhibits with substantive changes subject to the provisions of Section 17.6 of this Credit Facility Agreement, as the case may be, or the correlative provisions of the Security Documents. 2. REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties. In order to induce the Agents and the Lenders to enter into this Credit Facility Agreement and to induce the Lenders to make the Facility available, the Borrowers (and the Guarantor by its execution of the Consent and Agreement annexed hereto) each hereby jointly and severally represent and warrant to the Agents and the Lenders (which representations and warranties shall survive the execution and delivery of this Credit Facility Agreement and the Note and the drawdown of each Advance hereunder) that: (a) Due Organization and Power. each Security Party is duly formed and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, has full power to carry on its business as now being conducted and to enter into and perform its obligations under this Credit Facility Agreement, the Note and the Security Documents to which it is a party, and has complied with all statutory, regulatory and other requirements relative to such business and such agreements; (b) Authorization and Consents. all necessary corporate action has been taken to authorize, and all necessary consents and authorities have been obtained and remain in full force and effect to permit, each Security Party to enter into and perform its obligations under this Credit Facility Agreement, the Note and the Security Documents, to which it is a party, and, in the case of each of the Borrowers, to borrow, service and repay the Advances and, as of the date of this Credit Facility Agreement, no further consents or authorities are necessary for the service and repayment of the Advances or any part thereof; (c) Binding Obligations. this Credit Facility Agreement, the Note and the Security Documents constitute or will, when executed and delivered, constitute the legal, valid and binding obligations of each Security Party as is a party thereto enforceable against such Security Party in accordance with their respective terms, except to the extent that such enforcement may be limited by equitable principles, principles of public policy or applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the enforcement of creditors' rights; (d) No Violation. the execution and delivery of, and the performance of the provisions of, this Credit Facility Agreement, the Note and those of the Security Documents to which it is to be a party by each Security Party do not contravene any applicable law or regulation existing at the date hereof or any contractual restriction binding on such Security Party or the certificate of incorporation or by-laws (or equivalent instruments) thereof and that the proceeds of the Advances shall be used by each of the Borrowers exclusively for its own account or for the account of a Subsidiary or Affiliate of the Borrowers; (e) Filings; Stamp Taxes. other than the recording of the Mortgages with the appropriate authorities for the United States, and the filing of UCC Financing Statements in the District of Columbia in respect of the Assignments, and the payment and filing or recording fees consequent thereto, it is not necessary for the legality, validity, enforceability or admissibility into evidence of this Credit Facility Agreement, the Note or the Security Documents that any of them or any document relating thereto be registered, filed, recorded or enrolled with any court or authority in any relevant jurisdiction or that any stamp, registration or similar Taxes be paid on or in relation to this Agreement, the Note or any of the Security Documents; (f) Litigation. except as has been publicly disclosed by each of the Borrowers, no action, suit or proceeding is pending or threatened against either of the Borrowers or any Subsidiary before any court, board of arbitration or administrative agency which is reasonably likely to result in a Material Adverse Effect; (g) No Default. neither the Borrowers, the Guarantor nor any of their Subsidiaries is in default under any material agreement by which it is bound, or is in default in respect of any financial commitment or obligation; (h) Vessels. upon the date of the making of each Advance, each of the Vessels : (i) will be in the sole and absolute ownership of the respective Borrower as set forth in Schedule 2 and duly registered in such Borrower's name under the Liberian or Marshall Islands, as the case may be, flag, unencumbered, save and except for the Mortgage recorded against it and as permitted thereby; (ii) will be classed in the highest classification and rating for vessels of the same age and type with the respective Classification Society as set forth in Schedule 2 without any material outstanding recommendations; (iii) will be operationally seaworthy and in every way fit for its intended service; and (iv) will be insured in accordance with the provisions of the Mortgage recorded against it and the requirements thereof in respect of such insurances will have been complied with; (i) Insurance. each of the Security Parties has insured its properties and assets against such risks and in such amounts as are customary for companies engaged in similar businesses; (j) Financial Information. on or prior to the date hereof, all financial statements, information and other data furnished by each of the Borrowers to the Administrative Agent are complete and correct, such financial statements have been prepared in accordance with GAAP and accurately and fairly present the financial condition of the parties covered thereby as of the respective dates thereof and the results of the operations thereof for the period or respective periods covered by such financial statements, and, since the date of the Borrowers' financial statements most recently delivered to the Administrative Agent, there has been no Material Adverse Effect as to any of such parties and none thereof has any contingent obligations, liabilities for taxes or other outstanding financial obligations, except as disclosed in such statements, information and data; (k) Tax Returns. each of the Borrowers and each of their Subsidiaries have filed all tax returns required to be filed by them and have paid all taxes payable by them which have become due, other than those not yet delinquent and except for those taxes being contested in good faith and by appropriate proceedings or other acts and for which adequate reserves shall have been set aside on its books; (l) Chief Executive Office. the Borrowers' chief executive office and chief place of business and the office in which the records relating to the earnings and other receivables of each Subsidiary are kept is located at 109-111 Messogion Avenue, Polita Center, Athens GR 115 26, Greece; (m) Foreign Trade Control Regulations. none of the transactions contemplated herein will violate the provisions of any statute or regulation enacted to prohibit or limit economic transactions with foreign Persons including, without limitation, the Foreign Assets Control Regulations of the United States of America (Title 31, Code of Federal Regulations, Chapter V, Part 500, as amended), any of the provisions of the Cuban Assets Control Regulations of the United States of America (Title 31, Code of Federal Regulations, Chapter V, Part 515, as amended), any of the provisions of the Iranian Transaction Regulations of the United States of America (Title 31, Code of Federal Regulations, Chapter V, Part 560, as amended), any of the provisions of the Iraqi Sanctions Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 575, as amended) or any of the provisions of the Regulations of the United States of America Governing Transactions in Foreign Shipping of Merchandise (Title 31, Code of Federal Regulations, Chapter V, Part 505, as amended); (n) Equity Ownership. each of the Borrowers is a wholly owned subsidiary of the Guarantor; (o) Environmental Matters and Claims. (a) except as heretofore disclosed in writing to the Administrative Agent and the Lenders (i) each of the Borrowers, each of their Subsidiaries and their Affiliates will, when required to operate their business as then being conducted, be in compliance with all applicable United States federal and state, local, foreign and international laws, regulations, conventions and agreements relating to pollution prevention or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, navigable waters, waters of the contiguous zone, ocean waters and international waters), including, without limitation, laws, regulations, conventions and agreements relating to (1) emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous materials, oil, hazardous substances, petroleum and petroleum products and by-products ("Materials of Environmental Concern"), or (2) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern ("Environmental Laws"); (ii) each of the Borrowers, each of its Subsidiaries and their Affiliates will, when required, have all permits, licenses, approvals, rulings, variances, exemptions, clearances, consents or other authorizations required under applicable Environmental Laws ("Environmental Approvals") and will, when required, be in compliance with all Environmental Approvals required to operate their business as then being conducted; (iii) none of the Borrowers, any Subsidiary nor any Affiliate thereof has received any notice of any claim, action, cause of action, investigation or demand by any person, entity, enterprise or government, or any political subdivision, intergovernmental body or agency, department or instrumentality thereof, alleging potential liability for, or a requirement to incur, material investigator costs, cleanup costs, response and/or remedial costs (whether incurred by a governmental entity or otherwise), natural resources damages, property damages, personal injuries, attorneys' fees and expenses, or fines or penalties, in each case arising out of, based on or resulting from (1) the presence, or release or threat of release into the environment, of any Materials of Environmental Concern at any location, whether or not owned by such person, or (2) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law or Environmental Approval ("Environmental Claim") (other than Environmental Claims that have been fully and finally adjudicated or otherwise determined and all fines, penalties and other costs, if any, payable by the Security Parties in respect thereof have been paid in full or which are fully covered by insurance (including permitted deductibles)); and (iv) there are no circumstances that may prevent or interfere with such full compliance in the future; and (b) except as heretofore disclosed in writing to the Administrative Agent there is no Environmental Claim pending or threatened against either of the Borrowers, any Subsidiary or any Affiliate thereof and there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge or disposal of any Materials of Environmental Concern, that could form the basis of any Environmental Claim against such persons the adverse disposition of which may result in a Material Adverse Effect; (p) Compliance with ISM Code, the ISPS Code and the MTSA. each Vessel complies and each Operator complies with the requirements of the ISM Code, the ISPS Code and the MTSA including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto; (q) No Threatened Withdrawal of DOC, ISSC or SMC. there is no actual or, to the best of the Borrowers' knowledge, threatened withdrawal of any Operator's DOC or any Vessel's ISSC or SMC or other certification or documentation related to the ISM Code or otherwise required for the operation of such vessels in respect of any of the Vessels; (r) Liens. other than as permitted hereby, there are no liens of any kind on any property owned by either of the Borrowers or any Subsidiary of the Borrowers; (s) Debt. other than as permitted hereby, neither of the Borrowers has Debt; (t) No Proceedings to Dissolve. there are no proceedings or actions pending or contemplated by any Security Party, or, contemplated by any third party, to dissolve or terminate any Security Party; (u) Solvency. in the case of each of the Security Parties, (a) the sum of its assets, at a fair valuation, does and will exceed its liabilities, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, (b) the present fair market salable value of its assets is not and shall not be less than the amount that will be required to pay its probable liability on its then existing debts, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, as they mature, (c) it does not and will not have unreasonably small working capital with which to continue its business and (d) it has not incurred, does not intend to incur and does not believe it will incur, debts beyond its ability to pay such debts as they mature; (v) Compliance with Laws. each of the Security Parties is in compliance with all applicable laws except where the failure to comply would not alone or in the aggregate result in a Material Adverse Effect; and (w) Survival. all representations, covenants and warranties made herein and in any certificate or other document delivered pursuant hereto or in connection herewith shall survive the making of the Advances and the issuance of the Note. 3. THE ADVANCES 3.1 (a) Purposes. The Lenders shall make the Advances available to the Borrowers for the purpose of financing the acquisition of the Vessels. (b) Making of the Advances. (i) Each of the Lenders, relying upon each of the representations and warranties set out in Section 2, hereby severally and not jointly agrees with the Borrowers that, subject to and upon the terms of this Credit Facility Agreement, it will, not later than 11:00 A.M. (New York City time) on the Drawdown Date of each Advance (except as provided in subsection (ii) of this Section), make its portion of the relevant Advance, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address and to such account as set forth on Schedule 1 or to such account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. Unless the Administrative Agent determines that any applicable condition specified in Section 4.1, 4.2, 4.3 or 4.4 has not been satisfied, the Administrative Agent will make the funds so received from the Lenders available to the Borrowers at the aforesaid address, subject to the receipt of the funds by the Administrative Agent as provided in the immediately preceding sentence, not later than 10:00A.M. (New York City time) on the date of such Advance, and in any event as soon as practicable after receipt. All Advances, subject to the other terms and conditions hereof, shall be in a minimum amount of One Million Dollars ($1,000,000) and in multiples of Two Hundred Fifty Thousand Dollars ($250,000). The Facility shall be repayable as provided in Section 5. The Lenders' obligation to make any Advance hereunder shall terminate if the Vessels are not delivered to the Borrowers by April 30, 2005. (ii) Unless the Administrative Agent shall have received notice from a Lender prior to the Drawdown Date of any Advance that such Lender will not make available to the Administrative Agent such Lender's share of such Advance, the Administrative Agent may assume that such Lender has made such share available to the Administrative Agent on the date of such Advance in accordance with this Section 3.1 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrowers on such date a corresponding amount. If and to the extent that such Lender shall not have so made such share available to the Administrative Agent, such Lender and the Borrowers (but without duplication and not if such Lender is an affiliate of the Administrative Agent) severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrowers until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrowers, a rate per annum equal to the higher of (y) the LIBOR rate for overnight or weekend deposits plus the Margin and (z) the interest rate applicable thereto pursuant to Section 6.1 and (ii) in the case of such Lender, the LIBOR rate for overnight or weekend deposits. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance included in such Advance for purposes of this Credit Facility Agreement as of the date such Advance was made. Nothing in this subsection (b)(ii) shall be deemed to relieve any Lender of its obligation to make Advances to the extent provided in this Credit Facility Agreement. In the event that the Borrowers are required to repay an Advance to the Administrative Agent pursuant to this Section 3.1(b)(ii), as between the Borrowers and the defaulting Lender, the liability for any breakfunding costs as described in Section 4.5 shall be borne by the defaulting Lender. If the defaulting Lender has not paid any such breakage costs upon demand by the Administrative Agent therefor, the Borrowers shall pay such breakage costs upon demand by the Administrative Agent and the Borrowers shall be entitled to recover any such payment for breakfunding costs made by the Borrowers from the defaulting Lender. 3.2 Drawdown Notice. The Borrowers shall, at least three (3) Banking Days before a Drawdown Date, serve a notice (a "Drawdown Notice"), substantially in the form of Exhibit I, on the Administrative Agent, which notice shall (a) be in writing addressed to the Administrative Agent, (b) be effective on receipt by the Administrative Agent, (c) specify the amount of such Advance to be drawn, (d) specify the Banking Day on which such Advance is to be drawn and, subject to the terms of Section 6.3 hereof, the Interest Period, (e) specify the disbursement instructions and (f) be irrevocable. The Administrative Agent shall deliver the Drawdown Notice to Lenders as soon as practicable after its receipt thereof. 3.3 Effect of Drawdown Notice. Such Drawdown Notice shall be deemed to constitute a warranty by the Borrowers (a) that the representations and warranties stated in Section 2 (updated mutatis mutandis) are true and correct on and as of the date of such Drawdown Notice and will be true and correct on and as of the relevant Drawdown Date as if made on such date, and (b) that no Event of Default nor any event which with the giving of notice or lapse of time or both would constitute an Event of Default has occurred and is continuing. 3.4 Notation of Advances. Each Advance made by the Lenders to the Borrowers may be evidenced by a notation of the same made by the Administrative Agent on the grid attached to the Note, which notation, absent manifest error, shall be prima facie evidence of the amount of the relevant Advance. 4. CONDITIONS 4.1 Conditions Precedent to the Initial Advance. The obligation of the Lenders to make the Initial Advance available to the Borrowers under this Credit Facility Agreement shall be expressly subject to the following conditions precedent: (a) Corporate Authority. the Administrative Agent shall have received the following documents in form and substance satisfactory to the Administrative Agent: (i) copies, certified as true and complete by an officer of each of the Borrowers, of the resolutions of the board of directors of the respective Borrowers evidencing approval of this Credit Facility Agreement and the Note and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf, or other evidence of such approvals and authorizations; (ii) copies, certified as true and complete by an officer of each the Guarantor, of the resolutions of the board of directors evidencing approval of this Credit Facility, the Guaranty and those Security Documents to which it is to be a party and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf, or other evidence of such approvals and authorizations; (iii) copies, certified as true and complete by an officer of each of the Borrowers, of all documents evidencing any other necessary action (including actions by such parties thereto other than the Borrowers as may be required by the Administrative Agent), approvals or consents with respect to this Credit Facility Agreement, the Note and the Security Documents; (iv) copies, certified as true and complete by an officer of the respective Security Party, of the certificate of incorporation and by-laws, certificate of formation and operating agreement, or equivalent instruments thereof; (v) certificate of an authorized officer of the Guarantor certifying that it legally and beneficially owns, directly or indirectly, all of the issued and outstanding capital stock, or limited liability company membership interests, as the case may be, of each of the Borrowers and that such capital stock or membership interests are free and clear of any liens, claims, pledges or other encumbrances whatsoever; (vi) certificate of an authorized officer of each Security Party (other than the Borrowers) certifying as to the record ownership of all of its issued and outstanding capital stock, or limited liability company membership interests, as the case may be; and (vii) certificates of the jurisdiction of incorporation or formation, as the case may be, of each Security Party as to the good standing thereof; (b) The Credit Facility Agreement and the Note. each of the Borrowers shall have duly executed and delivered to the Administrative Agent this Credit Facility Agreement and the Note; (c) Guarantor Documents. the Guarantor shall have duly executed and delivered the Guaranty, its Consent and Agreement hereto and the Comfort Letter to the Administrative Agent. (d) Guarantor Solvency. the Administrative Agent shall have received a certificate of an officer of the Guarantor confirming the representations and warranties with respect to solvency set forth in the Guaranty and containing conclusions as to the solvency of the Guarantor; (e) Environmental Claims. the Administrative Agent shall be satisfied that neither of the Borrowers nor any of their Subsidiaries or their Affiliates is subject to any Environmental Claim; (f) Fees. the Administrative Agent shall have received payment in full of all fees and expenses then due to the Agents and/or the Lenders under Section 13; (g) Accounts. each of the Borrowers shall have established a master operating account into which Assigned Moneys are to be paid (the "Operating Account") with the Administrative Agent, or with another financial institution provided that if such account is established with a financial institution other than the Administrative Agent, each of the Borrowers shall have pledged its interest in such account to the Administrative Agent pursuant to an Account Pledge, and the Guarantor shall have agreed that such Assigned Moneys be paid into the Operating Account(s); (h) Compliance Certificate. the Administrative Agent having received a Compliance Certificate with respect to the most recently ended fiscal quarter; (i) Vessel Appraisal. the Administrative Agent having received an appraisal respect to the Fair Market Value of each of the Vessels; (j) Money Laundering Due Diligence. the Administrative Agent having received such documentation and other evidence as is reasonably requested by the Administrative Agent in order for each of the Lenders to carry out and be satisfied with the results of all necessary "know your client" or other checks which is required to carry out in relation to the transactions contemplated by this Credit Facility Agreement, the Notes and the Security Documents; (k) Legal Opinions. the Administrative Agent, on behalf of the Agents and the Lenders, shall have received legal opinions addressed to the Administrative Agent from (i) G.C. Economou & Associates, counsel for the Security Parties and (ii) Seward & Kissel LLP, special counsel to the Agents and Lenders, in each case in such form as the Administrative Agent may require, as well as such other legal opinions as the Administrative Agent shall have required as to all or any matters under the laws of the United States of America and the State of New York covering the representations and conditions which are the subjects of Section 2 and this Section 4.1. 4.2 Conditions Precedent re Delivery Advances. The obligation of the Lenders to make each Advance available to the Borrowers under this Agreement shall be expressly and separately subject to the following further conditions precedent on the relevant Drawdown Date: (a) The Vessels. the Administrative Agent shall have received evidence satisfactory to it that the relevant Vessel: (i) has been delivered to the relevant Borrower; (ii) is in the sole and absolute ownership of the relevant Borrower and duly registered in such Borrower's name under the Marshall Islands or Liberian flag, respectively, unencumbered, save and except for the Mortgage, recorded against it and as otherwise permitted thereby; (iii) is classed in the highest classification and rating for vessels of the same age and type with the respective classification society as set forth in Schedule 2 without any material outstanding recommendations; (iv) is operationally seaworthy and in every way fit for its intended service; (v) is insured in accordance with the provisions of the Mortgage recorded against it and the requirements thereof in respect of such insurance have been complied with; (b) Vessel Documents. Upon the delivery of its respective Vessel, each Borrower shall have duly executed and delivered to the Administrative Agent: (i) the Mortgage over its Vessel; (ii) an Insurances Assignment with respect to its Vessel; (iii) an Earnings Assignment with respect to its Vessel; (iv) the Assignment Notices with respect to the above-indicated Insurances Assignments and Earnings Assignments; (v) Uniform Commercial Code Financing Statements for filing with the District of Columbia and in such other jurisdictions as the Administrative Agent may reasonably require; (c) Vessel Liens. the Administrative Agent shall have received evidence satisfactory to it and to its legal advisor that, save for the liens created by the Mortgage and the Assignments relating to each Vessel, there are no liens, charges or encumbrances of any kind whatsoever on such Vessel or on its earnings except as permitted hereby or by any of the Security Documents; (d) ISM DOC. the Administrative Agent shall have received a copy of the DOC for the Vessel to which such Delivery Advance relates; (e) Legal Opinions. the Administrative Agent, on behalf of the Agents and the Lenders, shall have received legal opinions addressed to the Administrative Agent from (i) G.C. Economou & Associates, counsel for the Security Parties, and (ii) Seward & Kissel LLP, special counsel to the Agents and Lenders, in each case in such form as the Administrative Agent may require, as well as such other legal opinions as the Administrative Agent shall have required as to all or any matters under the laws of the United States of America and the State of New covering the representations and conditions which are the subjects of Sections 2 and this Section 4.2. 4.3 Further Conditions Precedent. The obligation of the Lenders to make any Advance available to the Borrowers under this Credit Facility Agreement shall be expressly and separately subject to the following further conditions precedent on the relevant Drawdown Date: (a) Drawdown Notice. the Administrative Agent having received a Drawdown Notice in accordance with the terms of Section 3.2; (b) Representations and Warranties. the representations stated in Section 2 (updated mutatis mutandis to such date) being true and correct as if made on and as of that date; (c) No Event of Default. no Event of Default having occurred and being continuing and no event having occurred and being continuing which, with the giving of notice or lapse of time, or both, would constitute an Event of Default; (d) No Change in Laws. the Administrative Agent being satisfied that no change in any applicable laws, regulations, rules or in the interpretation thereof shall have occurred which make it unlawful for any Security Party to make any payment as required under the terms of this Credit Facility Agreement, the Note, the Security Documents or any of them; and (e) No Material Adverse Effect. there having been no Material Adverse Effect since the date hereof. 4.4 Breakfunding Costs. In the event that, on the date specified for the making of an Advance in any Drawdown Notice, the Lenders shall not be obliged under this Credit Facility Agreement to make such Advance available, the Borrowers shall indemnify and hold the Lenders fully harmless against any losses which the Lenders (or any thereof) may sustain as a result of borrowing or agreeing to borrow funds to meet the drawdown requirement of such Drawdown Notice and the certificate of the relevant Lender or Lenders shall, absent manifest error, be conclusive and binding on the Borrowers as to the extent of any such losses. 4.5 Satisfaction after Drawdown. Without prejudice to any of the other terms and conditions of this Credit Facility Agreement, in the event the Lenders, in their sole discretion, make any Advance prior to the satisfaction of all or any of the conditions referred to in Sections 4.1, 4.2 or 4.3, the Borrowers hereby covenant and undertake to satisfy or procure the satisfaction of such condition or conditions within fourteen (14) days after the relevant Drawdown Date (or such longer period as the Lenders, in their sole discretion, may agree). 5. REPAYMENT AND PREPAYMENT 5.1 Repayment. Subject to the provisions of this Section 5 regarding prepayments and the application thereof, the Borrowers shall, on the Payment Dates, repay the principal amount of that portion of the Facility attributable to each Tranche in twenty-eight (28) consecutive installments payable quarterly in arrears commencing on the date occurring three (3) months after the Drawdown Date for Tranche 2, but no later than July 31, 2005; the amount of each installment shall be determined as follows (reduced pro rata in the event less than the maximum amount of the Facility is drawn down): (a) the first eight (8) installments shall each be in the amount of Two Million One Hundred Eighteen Thousand Seven Hundred Fifty Dollars ($2,118,750); (b) the ninth through twelfth installments shall each be in the amount of One Million Six Hundred Ninety Five Thousand Dollars ($1,695,000); (c) the thirteenth through twenty-eighth installments shall each be in the amount of One Million Four Hundred Twelve Thousand Five Hundred Dollars ($1,412,500); and (d) a balloon installment of Ten Million One Hundred Seventy Thousand Dollars ($10,170,000) shall be payable together with the twenty-eighth installment on the Final Payment Date. 5.2 Voluntary Prepayment; No Re-Borrowing. The Borrowers may prepay, upon ten (10) Banking Days written notice, any outstanding Advance or any portion thereof, without penalty, provided that if such prepayment is made on a day other than the last day of the Interest Period of such Advance such prepayment shall be made together with the costs and expenses provided for in Section 5.4. Each prepayment shall be in a minimum amount of Five Hundred Thousand Dollars ($500,000) plus any Five Hundred Thousand Dollar ($500,000) multiple thereof or the full amount of the then outstanding Advances. Prepayments shall be applied to the remaining payments on a pro-rata basis and will not be available for re-borrowing. 5.3 Mandatory Prepayment:Sale or Loss of Vessel . On (i) any sale of a Vessel or (ii) the earlier of (x) one hundred eighty (180) days after the Total Loss of a Vessel or (y) the date on which the insurance proceeds in respect of such loss are received by the Borrowers or the Administrative Agent as assignee thereof or (iii) either of the Borrowers is released from its obligations hereunder, the Advance attributable to such Vessel shall be prepaid and the security interest granted by the relevant Borrower shall be released, and any surplus shall be released to the Borrower. 5.4 Interest and Costs with Prepayments/Application of Prepayments. Any prepayment of the Advances made hereunder (including, without limitation, those made pursuant to Sections 5 and 9.4) shall be subject to the condition that on the date of prepayment all accrued interest to the date of such prepayment shall be paid in full with respect to the Advances or portions thereof being prepaid, together with any and all costs or expenses incurred by any Lender in connection with any breaking of funding (as certified by such Lender, which certification shall, absent any manifest error, be conclusive and binding on the Borrowers). All prepayments of the Facility under Section 5.2 shall be applied towards the installments of the Facility pro rata. 6. INTEREST AND RATE 6.1 Applicable Rate. Each Advance shall bear interest at the Applicable Rate, which shall be the rate per annum which is equal to the aggregate of (a) LIBOR for the relevant Interest Period, plus (b) one and twenty five hundredths of one percent (1.25%) per annum (the "Margin"). The Applicable Rate shall be determined by the Administrative Agent two (2) Banking Days prior to the first (1st) day of the relevant Interest Period and the Administrative Agent shall promptly notify the Borrowers in writing of the Applicable Rate as and when determined. Each such determination, absent manifest error, shall be conclusive and binding upon the Borrowers. 6.2 Default Rate. Any amounts due under this Credit Facility Agreement, not paid when due, whether by acceleration or otherwise, shall bear interest thereafter from the due date thereof until the date of payment at a rate per annum equal to (i) the Applicable Rate, plus two percent (2%) per annum (the "Default Rate"). In addition, following the occurrence of any Event of Default and until such Event of Default is cured to the satisfaction of the Majority Lenders, the Facility shall bear interest at the Default Rate. 6.3 Interest Periods. The Borrowers shall give the Administrative Agent an Interest Notice specifying the Interest Period selected for the next subsequent Interest Period at least three (3) Banking Days prior to the end of any then existing Interest Period, which notice the Administrative Agent agrees to forward on to all Lenders on a same day basis or as soon as practicable. If at the end of any then existing Interest Period the Borrowers fail to give an Interest Notice, the relevant Interest Period shall be three (3) months. The Borrowers' right to select an Interest Period shall be subject to the restriction that no selection of an Interest Period shall be effective unless each Lender is satisfied that the necessary funds will be available to such Lender for such period and that no Event of Default or event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default shall have occurred and be continuing. Interest Periods for each Tranche hereunder shall be consolidated as soon as practicable, but in no event later than thirty (30) days after the delivery of the Vessel to which Tranches relates. The Borrowers shall reimburse the Lenders for any and all costs or expenses incurred by the Lenders in connection with any breaking of funding (as certified by each Lender, which certification, absent manifest error, shall be conclusive and binding in the Borrowers) as a consequence of such consolidation. 6.4 Interest Payments. Accrued interest on the Facility shall be payable in arrears on the last day of each Interest Period, except that if the Borrowers shall select an Interest Period in excess of three (3) months, accrued interest shall be payable during such Interest Period on each three (3) month anniversary of the commencement of such Interest Period and upon the end of such Interest Period. 7. PAYMENTS 7.1 Place of Payments, No Set Off. All payments to be made hereunder by the Borrowers shall be made to the Administrative Agent, not later than 10 a.m. New York time (any payment received after 10 a.m. New York time shall be deemed to have been paid on the next Banking Day) on the due date of such payment, at its office located at 609 Fifth Avenue, Fifth Floor, New York, New York 10017-1021, or to such other office of the Administrative Agent as the Administrative Agent may direct, without set-off or counterclaim and free from, clear of, and without deduction or withholding for, any Taxes, provided, however, that if the Borrowers shall at any time be compelled by law to withhold or deduct any Taxes from any amounts payable to the Lenders hereunder, then the Borrowers shall pay such additional amounts in Dollars as may be necessary in order that the net amounts received after withholding or deduction shall equal the amounts which would have been received if such withholding or deduction were not required and, in the event any withholding or deduction is made, whether for Taxes or otherwise, the Borrowers shall promptly send to the Administrative Agent such documentary evidence with respect to such withholding or deduction as may be required from time to time by the Lenders. 7.2 Tax Credits. If any Lender obtains the benefit of a credit against the liability thereof for federal income taxes imposed by any taxing authority for all or part of the Taxes as to which the Borrowers has paid additional amounts as aforesaid in Section 7.1, then such Lender shall pay an amount to the Borrowers which that Lender determines will leave it (after such payment) in the same position as it would have been had the Tax payment not been made by the Borrowers. Each Lender agrees that in the event that Taxes are imposed on account of the situs of its loans hereunder, such Lender, upon acquiring knowledge of such event, shall, if commercially reasonable and if, in the opinion of that Lender, is not prejudicial to it, shift such loans on its books to another office of such Lender so as to avoid the imposition of such Taxes. Nothing contained in this clause shall in any way prejudice the right of the Lenders to arrange their tax affairs in such way as they, in their sole discretion, deem appropriate. In particular, no Lender shall be required to obtain such tax credit, if this interferes with the way such Lender normally deals with its tax affairs. 7.3 Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a right of banker's lien, setoff or counterclaim or pursuant to a secured claim under Section 506 of the Federal Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, exercised or received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of any Advance or Advances as a result of which its funded Commitment shall be proportionately less than the funded Commitment of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the funded Commitment of such other Lender so that the aggregate funded Commitment of each Lender shall be in the same proportion to the aggregate funded Commitments then outstanding as its funded Commitment prior to such exercise of banker's lien, setoff or counterclaim or other event was to the principal amount of all funded Commitments outstanding prior to such exercise of banker's lien, setoff or counterclaim or other event; provided, however, that, if any such purchase or purchases or adjustments shall be made pursuant to this Section 7.3 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. Any Lender holding a participation in a funded Commitment deemed to have been so purchased may exercise any and all rights of banker's lien, setoff or counterclaim with respect to any and all moneys owing to such Lender by reason thereof as fully as if such Lender had made an Advance in the amount of such participation. The Borrowers expressly consents to the foregoing arrangement. 7.4 Computations; Banking Days. (a) (a) All computations of interest and fees shall be made by the Administrative Agent or the Lenders, as the case may be, on the basis of a 360-day year, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which interest or fees are payable. Each determination by the Administrative Agent or the Lenders of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error; (b) Whenever any payment hereunder or under the Note shall be stated to be due on a day other than a Banking Day, such payment shall be due and payable on the next succeeding Banking day unless the next succeeding Banking Day falls in the following calendar month, in which case it shall be payable on the immediately preceding Banking Day. 8. EVENTS OF DEFAULT 8.1 Events of Default. The occurrence of any of the following events shall be an Event of Default: (a) Non-Payment of Principal. any payment of principal is not paid when due; or (b) Non-Payment of Interest or Other Amounts. any interest or any other amount becoming payable to the Administrative Agent or any Lender under this Credit Facility Agreement, under the Note or under any of the Security Documents is not paid within three (3) Banking Days of the due date or date of demand (as the case may be); or (c) Representations. any representation, warranty or other statement made by the Borrowers in this Credit Facility Agreement or by any Security Party in any of the Security Documents or in any other instrument, document or other agreement delivered in connection herewith or therewith proves to have been untrue or misleading in any material respect as at the date as of which made or confirmed; or (d) Impossibility; Illegality. it becomes impossible or unlawful for either of the Borrowers or the Guarantor to fulfill any of its covenants or obligations hereunder, under the Note or under any of the Security Documents or for any of the Lenders to exercise any of the rights vested in any of them hereunder, under the Note or under any of the Security Documents; or (e) Mortgage. there is an event of default under any Mortgage; or (f) Covenants. any Security Party (i) defaults in the due and punctual observance or performance of Sections 9.1(c), 9.1(h), 9.1(j), 9.1(k), 9.1(m), 9.1(n), 9.2(h) or 9.2(k) and such default continued unremedied for a period of sixty (60) days or (ii) defaults under any other term, covenant or agreement contained in this Credit Facility Agreement, in the Note, in any of the Security Documents or in any other instrument, document or other agreement delivered in connection herewith or therewith, or there occurs any other event which constitutes a default under this Credit Facility Agreement, under the Note or under any of the Security Documents, in each case other than an Event of Default referred to elsewhere in this Section 8.1; or (g) Debt. any Security Party shall default in the payment when due of any Debt or of any other debt, in either case, in the outstanding principal amount equal to or exceeding Five Hundred Thousand Dollars ($500,000) or such debt or debt is, or by reason of such default is subject to being, accelerated or any party becomes entitled to enforce the security for any such Debt or debt and such party shall take steps to enforce the same, unless such default or enforcement is being contested in good faith and by appropriate proceedings or other acts and the Security Party, Subsidiary or Affiliate of either of the Borrowers, as the case may be, shall set aside on its books adequate reserves with respect thereto; or (h) Ownership of Borrowers. the Guarantor shall cease to own directly or indirectly, one hundred percent (100%) of either of the Borrowers; or (i) Bankruptcy. the Borrowers, any Security Party, any Subsidiary or any Affiliate of the Borrowers commences any proceeding under any reorganization, arrangement or readjustment of debt, dissolution, winding up, adjustment, composition, bankruptcy or liquidation law or statute of any jurisdiction, whether now or hereafter in effect (a "Proceeding"), or there is commenced against any thereof any Proceeding and such Proceeding remains undismissed or unstayed for a period of thirty (30) days or any receiver, trustee, liquidator or sequestrator of, or for, any thereof or any substantial portion of the property of any thereof is appointed and is not discharged within a period of thirty (30) days or any thereof by any act indicates consent to or approval of or acquiescence in any Proceeding or the appointment of any receiver, trustee, liquidator or sequestrator of, or for, itself or of, or for, any substantial portion of its property; or (j) Termination of Operations; Sale of Assets. except as expressly permitted under this Credit Facility Agreement, any Security Party ceases its operations or sells or otherwise disposes of all or substantially all of its assets or all or substantially all of the assets of any Security Party are seized or otherwise appropriated; or (k) Judgments. any judgment or order is made, the effect whereof would be to render ineffective or invalid this Credit Facility Agreement, the Note or any of the Security Documents or any material provision thereof, or the Borrowers or any Security Party asserts that any such agreement or provision thereof is invalid; or (l) Inability to Pay Debts. the Borrowers, any Security Party, any Subsidiary or any Affiliate of the Borrowers is unable to pay or admits its inability to pay its debts as they fall due or a moratorium shall be declared in respect of any material indebtedness of the Borrowers or any Affiliate of the Borrowers; or (m) Change in Financial Position. any change in the financial position of the Borrowers or any Affiliate of the Borrowers which, in the opinion of the Majority Lenders, shall have a Material Adverse Effect; or (n) Change in Control. a Change of Control shall occur with respect to the Guarantor ; or (o) Cross-Default. the Borrowers, any Security Party, any Subsidiary or any Affiliate of the Borrowers defaults under any material contract or material agreement to which it is a party or by which it is bound; or Upon and during the continuance of any Event of Default, the Lenders' obligation to make any Advance available shall cease and the Administrative Agent may, and on the instructions of the Majority Lenders shall, by notice to the Borrowers, declare the entire unpaid balance of the then outstanding Advances, accrued interest and any other sums payable by the Borrowers hereunder or under the Note due and payable, whereupon the same shall forthwith be due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; provided that upon the happening of an event specified in subsections (i) or (l) of this Section 8.1 with respect to the Borrowers, the Note shall be immediately due and payable without declaration or other notice to the Borrowers. In such event, the Lenders may proceed to protect and enforce their rights by action at law, suit in equity or in admiralty or other appropriate proceeding, whether for specific performance of any covenant contained in this Credit Facility Agreement, in the Note or in any Security Document, or in aid of the exercise of any power granted herein or therein, or the Lenders may proceed to enforce the payment of the Note or to enforce any other legal or equitable right of the Lenders, or proceed to take any action authorized or permitted under the terms of any Security Document or by applicable law for the collection of all sums due, or so declared due, on the Note. Without limiting the foregoing, the Borrowers agree that during the continuance of any Event of Default each of the Lenders shall have the right to appropriate and hold or apply (directly, by way of set-off or otherwise) to the payment of the obligations of the Borrowers to the Lenders hereunder and/or under the Note (whether or not then due) all moneys and other amounts of the Borrowers then or thereafter in possession of any Lender, the balance of any deposit account (demand or time, mature or unmatured) of the Borrowers then or thereafter with any Lender and every other claim of the Borrowers then or thereafter against any of the Lenders. 8.2 Indemnification. The Borrowers agree to, and shall, indemnify and hold the Agents and the Lenders harmless against any loss, as well as against any costs or expenses (including legal fees and expenses), which any of the Agents or the Lenders sustains or incurs as a consequence of any default in payment of the principal amount of the Facility, interest accrued thereon or any other amount payable hereunder, under the Note or under any Security Documents, including, but not limited to, all actual losses incurred in liquidating or re-employing fixed deposits made by third parties or funds acquired to effect or maintain the Facility or any portion thereof. Any Lenders' certification of such costs and expenses shall, absent any manifest error, be conclusive and binding on the Borrowers. 8.3 Application of Moneys. Except as otherwise provided in any Security Document, all moneys received by the Agents or the Lenders under or pursuant to this Credit Facility Agreement, the Note or any of the Security Documents after the happening of any Event of Default (unless cured to the satisfaction of the Majority Lenders) shall be applied by the Administrative Agent in the following manner: (a) first, in or towards the payment or reimbursement of any expenses or liabilities incurred by the Agents, or the Lenders in connection with the ascertainment, protection or enforcement of their rights and remedies hereunder, under the Note and under any of the Security Documents, (b) secondly, in or towards payment of any interest owing in respect of the Facility, (c) thirdly, in or towards repayment of principal of the Facility, (d) fourthly, in or towards payment of all other sums which may be owing to the Agents, or any of them, or the Lenders under this Credit Facility Agreement, under the Note or under any of the Security Documents, (e) fifthly, in or towards payments of any amounts then owed under any Interest Rate Agreement, including, but not limited to, any costs associated with unwinding any Interest Rate Agreement, on a pari passu basis, and (f) sixthly, the surplus (if any) shall be paid to the Borrowers or to whosoever else may be entitled thereto. 9. COVENANTS 9.1 Affirmative Covenants. Each of the Borrowers hereby covenant and undertake with the Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing in respect of this Credit Facility Agreement, under the Note or under any of the Security Documents, each of the Borrowers will: (a) Performance of Agreements. duly perform and observe, and procure the observance and performance by all other parties thereto (other than the Agents and the Lenders) of, the terms of this Credit Facility Agreement, the Note and the Security Documents; (b) Notice of Default, etc. promptly upon, and in any event no later than five (5) Banking Days after, obtaining knowledge thereof, inform the Administrative Agent of the occurrence of (a) any Event of Default or of any event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, (b) any litigation or governmental proceeding pending or threatened against it or against any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect, including but not limited to, in respect of any Environmental Claim, (c) the withdrawal of any Vessel's rating by its Classification Society or the issuance by the Classification Society of any material recommendation or notation affecting class and (d) any other event or condition which is reasonably likely to have a Material Adverse Effect; (c) Obtain Consents. without prejudice to Section 2.1 and this Section 9.1, obtain every consent and do all other acts and things which may from time to time be necessary or advisable for the continued due performance of all its and the other Security Parties' respective obligations under this Credit Facility Agreement, under the Note and under the Security Documents; (d) Financial Information. deliver to each Lender: (i) as soon as available but not later than one hundred twenty (120) days after the end of each fiscal year of each of the Borrowers, complete copies of the consolidated financial reports of each of the Borrowers and its Subsidiaries (together with a Compliance Certificate and a detailed reconciliation of all of the differences between GAAP as at December 31, 2004 and as at the time of delivery), all in reasonable detail, which shall include at least the consolidated balance sheet of each of the Borrowers and its Subsidiaries as of the end of such year and the related consolidated statements of income and sources and uses of funds for such year, which shall be audited reports prepared by an Acceptable Accounting Firm, and the Borrowers shall use reasonable efforts to provide to each Lender as soon as available but not later than one hundred eighty (180) days after the end of each fiscal year of the Guarantor, complete copies of the consolidated financial reports of the Guarantor; (ii) as soon as available but not later than forty-five (45) days after the end of each of the first three quarters of each fiscal year of each of the Borrowers, a quarterly interim consolidated balance sheet of each of the Borrowers and its Subsidiaries and the related consolidated profit and loss statements and sources and uses of funds (together with a Compliance Certificate and a detailed reconciliation of all of the differences between GAAP as at December 31, 2004 and as at the time of delivery), all in reasonable detail, unaudited, but certified to be true and complete by the chief financial officer of each of the Borrowers; (iii) within ten (10) days of the filing thereof at the email addresses set forth in Schedule 1, electronic copies of all registration statements and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and other material filings which each of the Borrowers shall have filed with the Securities and Exchange Commission or any similar governmental authority; (iv) promptly upon the mailing thereof to the shareholders of the Borrowers, copies of all financial statements, reports, proxy statements and other communications provided to the Borrowers' shareholders; (v) within ten (10) days of the Borrowers' receipt thereof, copies of all audit letters or other correspondence from any external auditors including material financial information in respect of the Borrowers; (vi) such other statements (including, without limitation, monthly consolidated statements of operating revenues and expenses), lists of assets and accounts, budgets, forecasts, reports and other financial information with respect to its business as the Administrative Agent may from time to time request, certified to be true and complete by the chief financial officer of each of the Borrowers; (e) Vessel Valuations. reimburse the Administrative Agent for the cost of appraisals of the Fair Market Value of the Vessels. The Administrative Agent shall be entitled to obtain such valuations from two ship brokers approved by the Lenders two times in each calendar year and upon the occurrence of an Event of Default; (f) Corporate Existence. do or cause to be done, and procure that each Subsidiary of each of the Borrowers shall do or cause to be done, all things necessary to preserve and keep in full force and effect its corporate existence, or limited liability company existence, as the case may be, and all licenses, franchises, permits and assets necessary to the conduct of its business; (g) Books and Records. at all times keep, and cause each Subsidiary of each of the Borrowers to keep, proper books of record and account into which full and correct entries shall be made in accordance with GAAP; (h) Taxes and Assessments. pay and discharge, and cause each Subsidiary of each of the Borrowers to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or property prior to the date upon which penalties attach thereto; provided, however, that it shall not be required to pay and discharge, or cause to be paid and discharged, any such tax, assessment, charge or levy so long as the legality thereof shall be contested in good faith and by appropriate proceedings or other acts and it shall set aside on its books adequate reserves with respect thereto; (i) Inspection. allow, and cause each Subsidiary to allow, upon ten (10) Banking Days notice from the Administrative Agent, any representative or representatives designated by the Administrative Agent, subject to applicable laws and regulations, to visit and inspect any of its properties, and, on request, to examine its books of account, records, reports, agreements and other papers and to discuss its affairs, finances and accounts with its officers, all at such times and as often as the Administrative Agent requests; (j) Inspection and Survey Reports. if the Lenders shall so request, each of the Borrowers shall permit the Lenders to inspect the Vessels and shall provide the Lenders with copies of all internally generated inspection or survey reports on the Vessels; (k) Compliance with Statutes, Agreements, etc. do or cause to be done, and cause each Subsidiary to do and cause to be done, all things necessary to comply with all contracts or agreements to which it, or any Subsidiary is a party, and all laws, and the rules and regulations thereunder, applicable to the Borrowers or such Subsidiary, including, without limitation, those laws, rules and regulations relating to employee benefit plans and environmental matters; (l) Environmental Matters. promptly upon the occurrence of any of the following conditions, provide to the Administrative Agent a certificate of an executive officer thereof, specifying in detail the nature of such condition and its proposed response or the response of its Environmental Affiliates: (a) its receipt or the receipt by any other Security Party or any Environmental Affiliates of either of the Borrowers or any other Security Party of any written communication whatsoever that alleges that such person is not in compliance with any applicable Environmental Law or Environmental Approval, if such noncompliance could reasonably be expected to have a Material Adverse Effect, (b) knowledge by it, or by any other Security Party or any Environmental Affiliates of either of the Borrowers or any other Security Party that there exists any Environmental Claim pending or threatened against any such person, which could reasonably be expected to have a Material Adverse Effect, or (c) any release, emission, discharge or disposal of any material that could form the basis of any Environmental Claim against it, any other Security Party or against any Environmental Affiliates of either of the Borrowers or any other Security Party, if such Environmental Claim could reasonably be expected to have a Material Adverse Effect. Upon the written request by the Administrative Agent, it will submit to the Administrative Agent at reasonable intervals, a report providing an update of the status of any issue or claim identified in any notice or certificate required pursuant to this subsection; (m) Vessel Management. cause each of the Vessels to be managed commercially by the Top Tanker Management Inc., a wholly-owned subsidiary of the Guarantor, which may subcontract the technical management of the Vessels to V Ships or Unicom Management Services (Cyprus) Ltd. or any other management company acceptable to the Majority Lenders; (n) ISM Code, ISPS Code and MTSA Matters. (i) procure that the Operator will comply with and ensure each of the Vessels will comply with the requirements of the ISM Code, ISPS Code and MTSA in accordance with the implementation schedule thereof, including (but not limited to) the maintenance and renewal of valid certificates and when required, security plans, pursuant thereto; and (ii) will procure that the Operator will immediately inform the Administrative Agent if there is any threatened or actual withdrawal of its DOC, SMC or the ISSC in respect of any Vessel; and (iii) will procure that the Operator will promptly inform the Administrative Agent upon the issuance to the Borrowers or Operator of a DOC and the issuance to any Vessel of an SMC or ISSC; (o) Brokerage Commissions, etc. indemnify and hold each of the Agents and the Lenders harmless from any claim for any brokerage commission, fee, or compensation from any broker or third party resulting from the transactions contemplated hereby; (p) Deposit Accounts; Assignment. maintain an Operating Account with the Administrative Agent and, upon the request of the Administrative Agent, shall procure, and shall cause each other Security Party to procure, that all earnings of any Vessels shall be paid into the Operating Account and the Borrowers, and by its execution of the Consent and Agreement hereto, each other Security Party, hereby pledges, assigns and grants to the Security Trustee, for the benefit of the Lenders, a security interest in all funds from time to time in the Operating Account; (q) Insurance. maintain, and cause each other Security Party to maintain, with financially sound and reputable insurance companies, insurance on all their respective properties and against all such risks and in at least such amounts as are usually insured against by companies of established reputation engaged in the same or similar business from time to time; and (r) Interest Rate Agreements. DVB shall be entitled to provide the Borrowers with a quote for any interest rate derivatives product to be entered into by the Borrowers in connection with the Facility and the Borrowers agree to grant DVB a right of first refusal in respect thereof. 9.2 Negative Covenants. The Borrowers hereby covenant and undertake with the Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing in respect of this Credit Facility Agreement, under the Note or under any of the Security Documents, the Borrowers will not, and will procure that the Guarantor will not, to the extent of Sections 9.2(e), (g), (h), (i), (j) or (p), without the prior written consent of the Majority Lenders (or all of the Lenders if required by Section 15.8): (a) Liens. create, assume or permit to exist, any mortgage, pledge, lien, charge, encumbrance or any security interest whatsoever upon any Collateral or other property except: (i) liens for taxes not yet payable for which adequate reserves have been maintained; (ii) the Mortgages, the Assignments and other liens in favor of the Security Trustee; (iii) liens, charges and encumbrances against their respective Vessels permitted to exist under the terms of the Mortgages; and (iv) pledges of certificates of deposit or other cash collateral securing any Security Party's reimbursement obligations in connection with letters of credit now or hereafter issued for the account of such Security Party in connection with the establishment of the financial responsibility of the Security Parties under 33 C.F.R. Part 130 or 46 C.F.R. Part 540, as the case may be, as the same may be amended or replaced; (b) Debt. (i) incur any Debt, excluding Debt to the Agents or any of the Lenders hereunder, other than in the ordinary course of business, (ii) incur any Debt that would cause the Borrowers to be in default under any provision of Section 9.3 or (iii) make advances or extend credit to, or become obligated, contingently or otherwise, in respect of any Debt of, a Subsidiary that is not the Guarantor; (c) Change of Flag, Class, Management or Ownership. change the flag of any Vessel other than to a jurisdiction acceptable to the Majority Lenders, their Classification Society other than to another member of the International Association of Classification Societies, the technical management of any Vessel other than to one or more technical management companies acceptable to the Majority Lenders or the immediate or ultimate ownership of any Vessel; (d) Chartering. enter into any bareboat charter with any party other than the Borrowers or a Subsidiary or an Affiliate thereof, with respect to any of the Vessels having a duration of, including any options to extend such charter, more than twelve (12) months without the prior consent of the Majority Lenders; (e) Change in Business. materially change the nature of its business or commence any business materially different from its current business; (f) Sale or Pledge of Shares. sell, assign, transfer, pledge or otherwise convey or dispose of any of the shares (including by way of spin-off, installment sale or otherwise) of the capital stock, or limited liability company interests, as the case may be, of either Borrower; (g) Sale of Assets. sell, or otherwise dispose of, any Vessel (unless otherwise in accordance with this Credit Facility Agreement) or, with respect to the Guarantor, any other asset (including by way of spin-off, installment sale or otherwise) which is substantial in relation to its assets taken as a whole, other than such sales by the Guarantor to another; (h) Changes in Offices. change the location of the chief executive office of any Security Party, the office of the chief place of business of any such parties or the office of the Security Parties in which the records relating to the earnings or insurances of any Vessel are kept unless the Lenders shall have received thirty (30) days prior written notice of such change; (i) Consolidation and Merger. consolidate with, or merge into, any corporation or other entity, or merge any corporation or other entity into it; (j) Change Fiscal Year. change its fiscal year; (k) Limitations on Ability to Make Distributions. create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of the Guarantor to (i) pay dividends or make any other distributions on its capital stock or limited liability company interests, as the case may be, to the Borrowers or the Guarantor or pay any Debt owed to the Borrowers, (ii) make any loans or advances to the Borrowers, or (iii) transfer any of its property or assets to the Borrowers; (l) Use of Corporate Funds. permit the Guarantor to pay out any funds to any company or person except (i) in the ordinary course of business in connection with the management of the business of the Borrowers and their Subsidiaries, including the operation and/or repair of any of the Vessels and other vessels owned or operated by such parties and (ii) the servicing of the Debt permitted hereunder; (m) Issuance of Shares. permit the Guarantor to issue or dispose of any shares of its own capital stock or limited liability company interests, as the case may be, to any person other than the Borrowers; (n) No Money Laundering. in connection with this Credit Facility Agreement or any of the Security Documents, contravene or permit the Guarantor or any other Subsidiary to contravene, any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities) and comparable United States Federal and state laws. In addition, the Borrowers confirm that they are the beneficiary (within the meaning of Section 8 of the German Money Laundering Act (Geldwaschegesetz)) for each Advance made or to be made available to it. The Borrowers will promptly inform the Lenders (by written notice to the Agent) if the Borrowers are not or ceases to be the beneficiary and will provide in writing the name and address of the beneficiary; (o) Use of Proceeds. will not use the proceeds of Advances in violation of Regulation T, U or X; and (p) Guarantor Chief Executive Officer. will not permit the Guarantor to appoint a Chief Executive Officer other than Evangelos Pistiolis, without the Lenders' prior consent. 9.3 Financial Covenants. The Guarantor hereby covenants and undertakes with the Lenders that, from the date hereof and so long as any principal or interest are outstanding or other moneys are owing in respect of this Credit Facility Agreement, under the Note or under any of the Security Documents, the Guarantor will: (a) Adjusted Net Worth. maintain at all times an Adjusted Net Worth of not less than Two Hundred Million Dollars ($200,000,000) and not less than Thirty Five Percent (35%) of the Total Assets; (b) EBITDA to Fixed Charges. ensure that EBITDA shall at all times exceed 120% of the aggregate amount of Fixed Charges; and (c) Minimum Liquidity. at all times maintain Liquid Funds in the greater of Ten Million Dollars ($10,000,000) for the Guarantor's total fleet, or Five Hundred Thousand Dollars ($500,000) per Vessel. 9.4 Asset Maintenance. If at any time during the term of the Credit Facility Agreement, the Fair Market Value of Vessels is less than the Required Percentage, the Borrowers shall, within a period of thirty (30) days following receipt by the Borrowers of written notice from the Administrative Agent notifying the Borrowers of such shortfall and specifying the amount thereof (which amount shall, in the absence of manifest error, be deemed to be conclusive and binding on the Borrowers), either (i) deliver to the Security Trustee such additional collateral as may be satisfactory to the Lenders in their sole discretion of sufficient value to make the aggregate Fair Market Value of said Vessel plus the additional collateral, equal to the Required Percentage of the outstanding amount of the Tranche relating to that Vessel or (ii) the Borrowers shall prepay such amount of the Facility (together with interest thereon and any other monies payable in respect of such prepayment pursuant to Section 5.4) as shall result in the Fair Market Value of that Vessels being not less than the Required Percentage 10. ASSIGNMENT This Credit Facility Agreement shall be binding upon, and inure to the benefit of, the Borrowers and the Lenders, the Agents and their respective successors and assigns, except that the Borrowers may not assign any of its rights or obligations hereunder. Each Lender shall be entitled to assign its rights and obligations under this Credit Facility Agreement or grant participation(s) in the Facility to any subsidiary, holding company or other affiliate of such Lender, to any subsidiary or other affiliate company of any thereof or to any other bank or financial institution or collateralized loan obligation trust or fund (a "CLO") without the consent of the Borrowers. Each Lender may transfer all or any part of its rights, benefits and its obligations under this Credit Facility Agreement and any of the other Security Documents to any subsidiary or other affiliate company of any thereof or to any other bank or financial institution or CLO (the "Transferee") if the Transferee, by delivery of such undertaking, becomes bound by the terms of this Credit Facility Agreement and agrees to perform all or, as the case may be, part of such Lender's obligations under this Credit Facility Agreement. Each Lender may disclose to a prospective assignee, transferee or to any other person who may propose entering into contractual relations with such Lender in relation to the Credit Facility Agreement and such information about each if the Borrowers and the Guarantor as such Lender shall consider appropriate. The Borrowers will take all actions requested by the Agents or any Lender to effect such assignment, including, without limitation, the execution of a written consent to any Assignment and Assumption Agreement. 11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC. 11.1 Illegality. In the event that by reason of any change in any applicable law, regulation or regulatory requirement or in the interpretation thereof, a Lender has a basis to conclude that it has become unlawful for any Lender to maintain or give effect to its obligations as contemplated by this Credit Facility Agreement, such Lender shall inform the Administrative Agent and the Borrowers to that effect, whereafter the liability of such Lender to make its Commitment available shall forthwith cease and the Borrowers shall be required either to repay to such Lender that portion of the Facility advanced by such Lender immediately or, if such Lender so agrees, to repay such portion of the Facility to such Lender on the last day of any then current Interest Period in accordance with and subject to the provisions of Section 11.5. In any such event, but without prejudice to the aforesaid obligations of the Borrowers to repay such portion of the Facility, the Borrowers and the relevant Lender shall negotiate in good faith with a view to agreeing on terms for making such portion of the Facility available from another jurisdiction or otherwise restructuring such portion of the Facility on a basis which is not unlawful. 11.2 Increased Costs. If any change in applicable law, regulation or regulatory requirement (including any applicable law, regulation or regulatory requirement which relates to capital adequacy or liquidity controls or which affects the manner in which any Lender allocates capital resources under this Credit Facility Agreement), or in the interpretation or application thereof by any governmental or other authority, shall: (i) subject any Lender to any Taxes with respect to its income from the Facility, or any part thereof; or (ii) change the basis of taxation to any Lender of payments of principal or interest or any other payment due or to become due pursuant to this Credit Facility Agreement (other than a change in the basis effected by the jurisdiction of organization of such Lender, the jurisdiction of the principal place of business of such Lender, the United States of America, the State or City of New York or any governmental subdivision or other taxing authority having jurisdiction over such Lender (unless such jurisdiction is asserted by reason of the activities of the Borrowers or any of the other Security Parties) or such other jurisdiction where the Facility may be payable); or (iii) impose, modify or deem applicable any reserve requirements or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, a Lender; or (iv) impose on any Lender any other condition affecting the Facility or any part thereof; and the result of the foregoing is either to increase the cost to such Lender of making available or maintaining its Commitment or any part thereof or to reduce the amount of any payment received by such Lender, then and, in any such case, if such increase or reduction, in the opinion of such Lender, materially affects the interests of such Lender under or in connection with this Credit Facility Agreement: (i) the Lender shall notify the Administrative Agent and the Borrowers of the happening of such event, and (ii) the Borrowers agree forthwith upon demand to pay to such Lender such amount as such Lender certifies to be necessary to compensate such Lender for such additional cost or such reduction. 11.3 Nonavailability of Funds. If the Administrative Agent shall determine that, by reason of circumstances affecting the London Interbank Market generally, adequate and reasonable means do not or will not exist for ascertaining the Applicable Rate for the Facility for any Interest Period, the Administrative Agent shall give notice of such determination to the Borrowers. The Majority Lenders shall then determine the interest rate and/or Interest Period to be substituted for those which would otherwise have applied under this Credit Facility Agreement. If the Majority Lenders are unable to agree upon such a substituted interest rate and/or Interest Period within thirty (30) days of the giving of such determination notice, the Administrative Agent shall set an interest rate and Interest Period to take effect from the expiration of the Interest Period in effect at the date of determination, which rate shall be equal to the Margin plus the cost to the Lenders (as certified by each Lender) of funding the Facility. In the event the state of affairs referred to in this Section 11.3 shall extend beyond the end of the Interest Period, the foregoing procedure shall continue to apply until circumstances are such that the Applicable Rate may be determined pursuant to Section 6. 11.4 Lender's Certificate Conclusive. A certificate or determination notice of any Lender as to any of the matters referred to in this Section 11 shall, absent manifest error, be conclusive and binding on the Borrowers. 11.5 Compensation for Losses. Where the Facility or any portion thereof is to be repaid by the Borrowers pursuant to this Section 11, the Borrowers agrees simultaneously with such repayment to pay to the relevant Lender all accrued interest to the date of actual payment on the amount repaid and all other sums then payable by the Borrowers to the relevant Lender pursuant to this Credit Facility Agreement, together with such amounts as may be certified by the relevant Lender to be necessary to compensate such Lender for any actual loss, premium or penalties incurred or to be incurred thereby on account of funds borrowed to make, fund or maintain its Commitment or such portion thereof for the remainder (if any) of the then current Interest Period or Interest Periods, if any, but otherwise without penalty or premium. 12. CURRENCY INDEMNITY 12.1 Currency Conversion. If, for the purpose of obtaining or enforcing a judgment in any court in any country, it becomes necessary to convert into any other currency (the "judgment currency") an amount due in Dollars under this Credit Facility Agreement, the Note or any of the Security Documents, then the conversion shall be made, in the discretion of the Administrative Agent, at the rate of exchange prevailing either on the date of default or on the day before the day on which the judgment is given or the order for enforcement is made, as the case may be (the "conversion date"), provided that the Administrative Agent shall not be entitled to recover under this section any amount in the judgment currency which exceeds at the conversion date the amount in Dollars due under this Credit Facility Agreement, the Note, the Guaranty and/or any of the Security Documents. 12.2 Change in Exchange Rate. If there is a change in the rate of exchange prevailing between the conversion date and the date of actual payment of the amount due, the Borrowers shall pay such additional amounts (if any, but, in any event, not a lesser amount) as may be necessary to ensure that the amount paid in the judgment currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount then due under this Credit Facility Agreement, the Note and/or any of the Security Documents in Dollars; any excess over the amount due received or collected by the Lenders shall be remitted to the Borrowers. 12.3 Additional Debt Due. Any amount due from the Borrowers under this Section 12 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 this Credit Facility Agreement, the Note and/or any of the Security Documents. 12.4 Rate of Exchange. The term "rate of exchange" in this Section 12 means the rate at which the Administrative Agent in accordance with its normal practices is able on the relevant date to purchase Dollars with the judgment currency and includes any premium and costs of exchange payable in connection with such purchase. 13. FEES AND EXPENSES 13.1 Fees. During the period beginning on the date of this Credit Facility Agreement and ending on the Final Availability Date, the Borrowers shall pay, quarterly in arrears, with the final payment to be made on the Final Availability Date, from the date of this Credit Facility Agreement, to the Administrative Agent (for the account of the Lenders), a commitment fee (the "Commitment Fee") of twenty-five hundredths of one percent (.25%) per annum payable on the average undrawn amount of the Facility. The Borrowers shall also pay to the Administrative Agent an arrangement fee (the "Arrangement Fee") and a Structuring Fee each equal to one-half of one percent (1/2%) of the Facility payable to the Administrative Agent upon the execution of the Credit Facility and each of which shall be refundable pro rata should either or both Advances not be made for reasons soley the fault of the Lenders. The Borrowers shall also pay to the Administrative Agent an agency fee (the "Agency Fee") equal to Five Thousand Dollars ($5,000) per annum, payable to the Administrative Agent upon the execution of the Credit Facility and on that date every year thereafter. 13.2 Expenses. The Borrowers agrees, whether or not the transactions hereby contemplated are consummated, on demand to pay, or reimburse the Agents for their payment of, the expenses of the Agents and (after the occurrence and during the continuance of an Event of Default) the Lenders incident to said transactions (and in connection with any supplements, amendments, waivers or consents relating thereto or incurred in connection with the enforcement or defense of any of the Agents' and the Lenders' rights or remedies with respect thereto or in the preservation of the Agent's and the Lenders' priorities under the documentation executed and delivered in connection therewith), including, without limitation, all costs and expenses of preparation, negotiation, execution and administration of this Credit Facility Agreement and the documents referred to herein (including, but not limited to, Value Added Tax imposed on any Lender related to those expenses), the fees and disbursements of the Agents' and Lenders' counsel in connection therewith, as well as the fees and expenses of any independent appraisers, surveyors, engineers, inspectors and other consultants retained by the Agents in connection with this Agreement and the transactions contemplated hereby and under the Security Documents, all costs and expenses, if any, in connection with the enforcement of this Credit Facility Agreement, the Note and the Security Documents and stamp and other similar taxes, if any, incident to the execution and delivery of the documents (including, without limitation, the Note) herein contemplated and to hold the Agents and the Lenders free and harmless in connection with any liability arising from the nonpayment of any such stamp or other similar taxes. Such taxes and, if any, interest and penalties related thereto as may become payable after the date hereof shall be paid immediately by the Borrowers to the Agents or the Lenders, as the case may be, when liability therefor is no longer contested by such party or parties or reimbursed immediately by the Borrowers to such party or parties after payment thereof (if the Agents or the Lenders, at their sole discretion, chooses to make such payment). 14. APPLICABLE LAW, JURISDICTION AND WAIVER 14.1 Applicable Law. This Credit Facility Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. 14.2 Jurisdiction. The Borrowers hereby irrevocably submit to the jurisdiction of the courts of the State of New York and of the United States District Court for the Southern District of New York in any action or proceeding brought against either of the Borrowers by any of the Lenders or the Agents under this Credit Facility Agreement or under any document delivered hereunder and hereby irrevocably agrees that valid service of summons or other legal process on it may be effected by serving a copy of the summons and other legal process in any such action or proceeding on the Borrowers by mailing or delivering the same by hand to the Borrowers at the address indicated for notices in Section 16.1. The service, as herein provided, of such summons or other legal process in any such action or proceeding shall be deemed personal service and accepted by the Borrowers as such, and shall be legal and binding upon the Borrowers for all the purposes of any such action or proceeding. Final judgment (a certified or exemplified copy of which shall be conclusive evidence of the fact and of the amount of any indebtedness of the Borrowers to the Lenders or the Agent) against the Borrowers in any such legal action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment. The Borrowers will advise the Administrative Agent promptly of any change of address for the purpose of service of process. Notwithstanding anything herein to the contrary, the Lenders may bring any legal action or proceeding in any other appropriate jurisdiction. 14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWERS, THE OTHER SECURITY PARTIES, THE AGENT AND THE LENDERS THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTE OR THE SECURITY DOCUMENTS. 15. THE AGENTS 15.1 Appointment of Agents. Each of the Lenders irrevocably appoints and authorizes the Agents severally each to take such action as agent on its behalf and to exercise such powers under this Credit Facility Agreement, the Note and the Security Documents as are delegated to such Agent by the terms hereof and thereof. No Agent nor any of their respective directors, officers, employees or agents shall be liable for any action taken or omitted to be taken by it or them under this Credit Facility Agreement, the Note or the Security Documents or in connection therewith, except for its or their own gross negligence or willful misconduct. 15.2 Security Trustee as Trustee. Each of the Lenders irrevocably appoints the Security Trustee as trustee on its behalf with regard to (i) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Lenders or any of them or for the benefit thereof under or pursuant to this Credit Facility Agreement, the Note or any of the Security Documents (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to any Lender in the Agreement, the Note or any Security Document), (ii) all moneys, property and other assets paid or transferred to or vested in any Lender or any agent of any Lender or received or recovered by any Lender or any agent of any Lender pursuant to, or in connection with, this Credit Facility Agreement, the Note or the Security Documents whether from any Security Party or any other person and (iii) all money, 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 any Lender or any agent of any Lender in respect of the same (or any part thereof). The Security Trustee hereby accepts such appointment. 15.3 Distribution of Payments. Whenever any payment is received by the Administrative Agent from the Borrowers or any other Security Party for the account of the Lenders, or any of them, whether of principal or interest on the Note, commissions, fees under Section 13 or otherwise, it will thereafter cause to be distributed on the same day if received before 3 p.m. New York time, or on the next day if received thereafter, like funds relating to such payment ratably to the Lenders according to their respective Commitments, in each case to be applied according to the terms of this Credit Facility Agreement. 15.4 Holder of Interest in Note. The Agents may treat each Lender as the holder of all of the interest of such Lender in the Note. 15.5 No Duty to Examine, Etc. The Agents shall not be under a duty to examine or pass upon the validity, effectiveness or genuineness of any of this Credit Facility Agreement, the Note, the Security Documents or any instrument, document or communication furnished pursuant to this Credit Facility Agreement or in connection therewith or in connection with the Note or any Security Document, and the Agents shall be entitled to assume that the same are valid, effective and genuine, have been signed or sent by the proper parties and are what they purport to be. 15.6 Agents as Lenders. With respect to that portion of the Facility made available by it, each Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not an Agent, and the term "Lender" or "Lenders" shall include each Agent in its capacity as a Lender. Each Agent and its affiliates may accept deposits from, lend money to and generally engage in any kind of business with, the Borrowers and the other Security Parties, as if it were not an Agent. 15.7 Acts of the Agents. Each Agent shall have duties and reasonable discretion, and shall act as follows: (a) Obligations of the Agents. The obligations of each Agent under this Credit Facility Agreement, under the Note and under the Security Documents are only those expressly set forth herein and therein. (b) No Duty to Investigate. No Agent shall at any time be under any duty to investigate whether an Event of Default, or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, has occurred or to investigate the performance of this Credit Facility Agreement, the Note or any Security Document by any Security Party. (c) Discretion of the Agents. Each Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of, this Credit Facility Agreement, the Note and the Security Documents, unless the Administrative Agent shall have been instructed by the Majority Lenders to exercise such rights or to take or refrain from taking such action; provided, however, that no Agent shall be required to take any action which exposes such Agent to personal liability or which is contrary to this Credit Facility Agreement or applicable law. (d) Instructions of Majority Lenders. Each Agent shall in all cases be fully protected in acting or refraining from acting under this Credit Facility Agreement, under the Note, or under any Security Document in accordance with the instructions of the Majority Lenders, and any action taken, or failure to act pursuant to such instructions, shall be binding on all of the Lenders. 15.8 Certain Amendments. Neither this Credit Facility Agreement, the Note nor any of the Security Documents nor any terms hereof or thereof may be amended unless such amendment is approved by the Borrowers and the Majority Lenders, provided that no such amendment shall, without the written consent of each Lender affected thereby, (i) reduce the interest rate or extend the time of a scheduled payment of principal or interest or fees on the Facility, or reduce the principal amount of the Facility or any fees hereunder, (ii) increase or decrease the Commitment of any Lender or subject any Lender to any additional obligation (it being understood that a waiver of any Event of Default, other than a payment default, or any mandatory repayment of Facility shall not constitute a change in the terms of any Commitment of any Lender), (iii) amend, modify or waive any provision of this Section 15.8, (iv) amend the definition of Majority Lenders or any other definition referred to in this Section 15.8, (v) consent to the assignment or transfer by the Borrowers of any of their rights and obligations under this Credit Facility Agreement, (vi) release any Security Party from any of its obligations under any Security Document except as expressly provided herein or in such Security Document or (vii) amend any provision relating to the maintenance of collateral under Section 9.4; provided, further, that approval by all Lenders shall be required for any amendment or waivers with respect to Section 5.3 of this Credit Facility Agreement. All amendments approved by the Majority Lenders under this Section 15.8 must be in writing and signed by the Borrowers, each of the Lenders comprising the Majority Lenders and, if applicable, each Lender affected thereby and any such amendment shall be binding on all the Lenders; provided, however, that any amendments or waivers with respect to Section 5.3 of this Credit Facility Agreement must be in writing and signed by the Borrowers and all of the Lenders. 15.9 Assumption re Event of Default. Except as otherwise provided in Section 15.15, the Administrative Agent shall be entitled to assume that no Event of Default, or event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, has occurred and is continuing, unless the Administrative Agent has been notified by any Security Party of such fact, or has been notified by a Lender that such Lender considers that an Event of Default or such an event (specifying in detail the nature thereof) has occurred and is continuing. In the event that the Administrative Agent shall have been notified, in the manner set forth in the preceding sentence, by any Security Party or any Lender of any Event of Default or of an event which with the giving of notice or lapse of time, or both, would constitute an Event of Default, the Administrative Agent shall notify the Lenders and shall take action and assert such rights under this Credit Facility Agreement, under the Note and under Security Documents as the Majority Lenders shall request in writing. 15.10 Limitations of Liability. Neither any Agent nor any of the Lenders shall be under any liability or responsibility whatsoever: (a) to any Security Party or any other person or entity as a consequence of any failure or delay in performance by, or any breach by, any other Lenders or any other person of any of its or their obligations under this Credit Facility Agreement or under any Security Document; (b) to any Lender or Lenders as a consequence of any failure or delay in performance by, or any breach by, any Security Party of any of its respective obligations under this Credit Facility Agreement, under the Note or under the Security Documents; or (c) to any Lender or Lenders for any statements, representations or warranties contained in this Credit Facility Agreement, in any Security Document or in any document or instrument delivered in connection with the transaction hereby contemplated; or for the validity, effectiveness, enforceability or sufficiency of this Credit Facility Agreement, the Note, any Security Document or any document or instrument delivered in connection with the transactions hereby contemplated. 15.11 Indemnification of the Agents. The Lenders agree to indemnify each Agent (to the extent not reimbursed by the Security Parties or any thereof), pro rata according to the respective amounts of their Commitments, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including legal fees and expenses incurred in investigating claims and defending itself against such liabilities) which may be imposed on, incurred by or asserted against, such Agent in any way relating to or arising out of this Credit Facility Agreement, the Note or any Security Document, any action taken or omitted by such Agent thereunder or the preparation, administration, amendment or enforcement of, or waiver of any provision of, this Credit Facility Agreement, the Note or any Security Document, except that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's gross negligence or willful misconduct. 15.12 Consultation with Counsel. Each of the Agents may consult with legal counsel reasonably selected by such Agent and shall not be liable for any action taken, permitted or omitted by it in good faith in accordance with the advice or opinion of such counsel. 15.13 Resignation. Any Agent may resign at any time by giving thirty (30) days' written notice thereof to the other Agents, the Lenders and the Borrowers. Upon any such resignation, the Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent's giving notice of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a bank or trust company of recognized standing. Any resignation by an Agent pursuant to this Section 15.13 shall be effective only upon the appointment of a successor Agent. The appointment of any successor Agent shall be subject to the prior written consent of the Borrowers, such consent not to be unreasonably withheld. After any retiring Agent's resignation as Agent hereunder, the provisions of this Section 15 shall continue in effect for its benefit with respect to any actions taken or omitted by it while acting as Agent. 15.14 Representations of Lenders. Each Lender represents and warrants to each other Lender and each Agent that: (a) in making its decision to enter into this Credit Facility Agreement and to make its Commitment available hereunder, it has independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of the Security Parties, that it has made an independent credit judgment and that it has not relied upon any statement, representation or warranty by any other Lender or any Agent; and (b) so long as any portion of its Commitment remains outstanding, it will continue to make its own independent evaluation of the financial condition and affairs of the Security Parties. 15.15 Notification of Event of Default. The Administrative Agent hereby undertakes to promptly notify the Lenders, and the Lenders hereby promptly undertake to notify the Administrative Agent and the other Lenders, of the existence of any Event of Default, which shall have occurred and be continuing, of which the Administrative Agent or Lender has actual knowledge. 15.16 No Agency or Trusteeship if not Syndicated. Unless and until the Loan is syndicated or at any other time DVB is the only Lender, all references to the terms "Agent" and "Security Trustee" shall be deemed to be references to DVB as Lender and not as agent or security trustee. 16. NOTICES AND DEMANDS 16.1 Notices. All notices, requests, demands and other communications to any party hereunder shall be in writing (including prepaid overnight courier, facsimile transmission or similar writing) and shall be given to the Borrowers at the address or facsimile number set forth below and to the Lenders and the Agents at their address and facsimile numbers set forth in Schedule 1 or at such other address or facsimile numbers as such party may hereafter specify for the purpose by notice to each other party hereto. Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 16.1 and telephonic confirmation of receipt thereof is obtained or (ii) if given by mail, prepaid overnight courier or any other means, when received at the address specified in this Section or when delivery at such address is refused. If to the Borrowers: c/o Top Tanker Management Inc. 109-111 Messogion Avenue Polita Centre, Bldg. C1 2nd Floor 11526 Athens, Greece 17. MISCELLANEOUS 17.1 Time of Essence. Time is of the essence with respect to this Credit Facility Agreement but no failure or delay on the part of any Lender or any Agent to exercise any power or right under this Credit Facility Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by any Lender or any Agent of any power or right hereunder preclude any other or further exercise thereof or the exercise of any other power or right. The remedies provided herein are cumulative and are not exclusive of any remedies provided by law. 17.2 Unenforceable, etc., Provisions-Effect. In case any one or more of the provisions contained in this Credit Facility Agreement, the Note or in any Security Document would, if given effect, be invalid, illegal or unenforceable in any respect under any law applicable in any relevant jurisdiction, said provision shall not be enforceable against the relevant Security Party, but the validity, legality and enforceability of the remaining provisions herein or therein contained shall not in any way be affected or impaired thereby. 17.3 References. References herein to Sections, Exhibits and Schedules are to be construed as references to sections of, exhibits to, and schedules to, this Credit Facility Agreement, unless the context otherwise requires. 17.4 Further Assurances. The Borrowers agree that if this Credit Facility Agreement or any Security Document shall, in the reasonable opinion of the Lenders, at any time be deemed by the Lenders for any reason insufficient in whole or in part to carry out the true intent and spirit hereof or thereof, it will execute or cause to be executed such other and further assurances and documents as in the opinion of the Lenders may be required in order to more effectively accomplish the purposes of this Credit Facility Agreement, the Note or any Security Document. 17.5 Prior Agreements, Merger. Any and all prior understandings and agreements heretofore entered into between the Security Parties on the one part, and the Agents or the Lenders, on the other part, whether written or oral, other than the Fee Letter, are superseded by and merged into this Credit Facility Agreement and the other agreements (the forms of which are exhibited hereto) to be executed and delivered in connection herewith to which the Security Parties, the Agents and/or the Lenders are parties, which alone fully and completely express the agreements between the Security Parties, the Agents and the Lenders. 17.6 Entire Agreement; Amendments. This Credit Facility Agreement constitutes the entire agreement of the parties hereto, including all parties added hereto pursuant to an Assignment and Assumption Agreement. Subject to Section 15.8, any provision of this Credit Facility Agreement, the Note or any Security Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrowers, the Agents and the Majority Lenders. This Credit Facility Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute one and the same instrument. 17.7 Indemnification. The Borrowers and, by its execution and delivery of the Consent and Agreement set forth below, each of the other Security Parties jointly and severally agree to indemnify each Lender and each Agent, their respective successors and assigns, and their respective officers, directors, employees, representatives and agents (each an "Indemnitee") from, and hold each of them harmless against, any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the fees and disbursements of counsel for such Indemnitee in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitee shall be designated a party thereto) that may at any time (including, without limitation, at any time following the payment of the obligations of the Borrowers hereunder) be imposed on, asserted against or incurred by, any Indemnitee as a result of, or arising out of or in any way related to or by reason of, (a) any violation by any Security Party (or any charterer or other operator of any Vessel) of any applicable Environmental Law, (b) any Environmental Claim arising out of the management, use, control, ownership or operation of property or assets by any Security Party (or, after foreclosure, by any Lender or any Agent or any of their respective successors or assigns), (c) the breach of any representation, warranty or covenant set forth in Sections 2.1 (p) or 9.1(l), (d) the Facility (including the use of the proceeds of the Facility and any claim made for any brokerage commission, fee or compensation from any Person), or (e) the execution, delivery, performance or non-performance of this Credit Facility Agreement, the Note, any Security Document, or any of the documents referred to herein or contemplated hereby (whether or not the Indemnitee is a party thereto). If and to the extent that the obligations of the Security Parties under this Section are unenforceable for any reason, the Borrowers and, by its execution and delivery of the Consent and Agreement set forth below, each of the other Security Parties jointly and severally agree to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. The obligations of the Security Parties under this Section 17.7 shall survive the termination of this Credit Facility Agreement and the repayment to the Lenders of all amounts owing thereto under or in connection herewith. 17.8 Headings. In this Credit Facility Agreement, section headings are inserted for convenience of reference only and shall not be taken into account in the interpretation of this Credit Facility Agreement. 17.9 WAIVER OF IMMUNITY. TO THE EXTENT THAT ANY SECURITY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH SECURITY PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS CREDIT FACILITY AGREEMENT AND THE OTHER SECURITY DOCUMENTS. IN WITNESS whereof, the parties hereto have caused this Credit Facility Agreement to be duly executed by their duly authorized representatives as of the day and year first above written. VITSI SHIPPING COMPANY LIMITED By: /s/ Smaro Zoulia ---------------------------------- Name: SMARO ZOULIA Title: PRESIDENT/DIRECTOR PARNIS SHIPPING COMPANY LIMITED By: /s/ Smaro Zoulia ---------------------------------- Name: SMARO ZOULIA Title: PRESIDENT/DIRECTOR DVB BANK AG acting through its New York Branch, as Administrative Agent and Security Trustee By: /s/ Sybren Hoelstre ---------------------------------- Name: Sybren Hoelstre Title: SVP By: /s/ Gorh Eikemo ---------------------------------- Name: Gorh Eikemo Title: VP The Lenders: DVB BANK AG acting through its New York Branch By: /s/ Sybren Hoelstre ---------------------------------- Name: Sybren Hoelstre Title: SVP By: /s/ Gorh Eikemo ---------------------------------- Name: Gorh Eikemo Title: VP CONSENT AND AGREEMENT --------------------- The undersigned, referred to in the foregoing Credit Facility Agreement as the "Guarantor", hereby consents and agrees to said Credit Facility Agreement and to the documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations to be performed by the undersigned pursuant to or in connection with said Credit Facility Agreement and agrees particularly to be bound by the representations, warranties and covenants relating to the undersigned contained in Sections 2 and 9 of said Credit Facility Agreement to the same extent as if the undersigned were a party to said Credit Facility Agreement, and expressly agrees to the grant of a security interest in favor of the Security Trustee pursuant to Section 9.1(q) of said Credit Facility Agreement. TOP TANKERS INC. By: /s/ Stamatios N. Tsantanis ----------------------------- Name: STAMATIOS N. TSANTANIS Title: CFO Schedule 1 Lenders Commitment DVB Bank AG $56,500,000 New York Representative Office 609 Fifth Avenue New York, New York 10017-1021 Attention: Sybren Hoekstra/Gorm Eikemo Fax: (212) 588-0424 With copy to: DVB Bank America N.V. Zeelandia Office Park Kaya W.F.G. Mensing 14 Curacao, Netherlands Antillies Attention: Gershwin Maduro/Eric Maduro Fax: 599 9 465 2366 Agents DVB Bank AG New York Representative Office 609 Fifth Avenue New York, New York 10017-1021 Attention: Sybren Hoekstra/Gorm Eikemo Fax: (212) 588-0424 With copy to: DVB Bank America N.V. Zeelandia Office Park Kaya W.F.G. Mensing 14 Curacao, Netherlands Antillies Attention: Gershwin Maduro/Eric Maduro Fax: 599 9 465 2366 Schedule 2 The Vessels Official Vessel Name Flag Built Dwt Number Type Owner ---- ---- ----- --- ------ ---- ----- M/T STOPLESS Liberia 1991 154,970 12600 Suezmax Vitsi Shipping (ex M/T KAMLESH) Tanker Company Limited M/T STAINLESS Marshall 1992 149,599 2233 Suezmax Parnis Shipping (ex M/T NANDU) Islands Tanker Company Limited 01029.0026 #545280v3