Exhibit 10.1
EXECUTION VERSION
DATED 21 October 2008
GYPSUM TRANSPORTATION LIMITED
(as borrower)
- and -
DVB BANK SE
and others
(as lenders)
- and -
DVB BANK SE
(as agent and security trustee)
 
US$90,000,000 SECURED
LOAN FACILITY AGREEMENT
 
STEPHENSON HARWOOD
One St. Paul’s Churchyard
London EC4M 8SH
Tel: 020 7329 4422
Fax: 020 7329 7100
Ref: 819

 

 

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CONTENTS

              Page  
 
       
1 Definitions and Interpretation
    1  
 
       
2 The Loan and its Purpose
    17  
 
       
3 Conditions Precedent and Subsequent
    19  
 
       
4 Representations and Warranties
    25  
 
       
5 Repayment and Prepayment
    28  
 
       
6 Interest
    30  
 
       
7 Fees
    33  
 
       
8 Security Documents
    33  
 
       
9 Agency and Trust
    34  
 
       
10 Covenants
    43  
 
       
11 Earnings Account
    49  
 
       
12 Events of Default and Application of Monies
    51  
 
       
13 Set-Off and Lien
    57  
 
       
14 Assignment and Sub-Participation
    58  
 
       
15 Payments, Mandatory Prepayment, Reserve Requirements and Illegality
    59  
 
       
16 Communications
    64  
 
       
17 General Indemnities
    65  
 
       
18 Miscellaneous
    67  
 
       
19 Law and Jurisdiction
    72  

 

 

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              Page  
 
       
SCHEDULE 1
       
The Banks and the Commitments
       
 
       
SCHEDULE 2
       
Form of Mortgage
       
 
       
SCHEDULE 3
       
Form of Assignment
       
 
       
SCHEDULE 4
       
Form of Managers’ Undertaking
       
 
       
SCHEDULE 5
       
Form of Compliance Certificate
       
 
       
APPENDIX A
       
Form of Drawdown Notice
       
 
       
APPENDIX B
       
Form of Transfer Certificate
       
 
       
APPENDIX C
       
Form of Loan Administration Form
       
 
       

 

 

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LOAN AGREEMENT
Dated: 21 October 2008
BETWEEN:-

(1)  
GYPSUM TRANSPORTATION LIMITED, a company incorporated according to the law of
Bermuda, with registered office at Clarendon House, 2 Church Street, Hamilton
HM11, Bermuda (“the Borrower”); and
  (2)  
the banks listed in Schedule 1, each acting through its office at the address
indicated against its name in Schedule 1 (together “the Banks” and each a
“Bank”); and
  (3)  
DVB BANK SE, with its registered office in Frankfurt and acting as agent and
security trustee through its office at Parklaan 2, 3016BB Rotterdam, The
Netherlands (in that capacity “the Agent”).

WHEREAS:-

(A)  
The Borrower is the registered owner of Vessel A and is to be the registered
owner of Vessel B upon Vessel B’s Delivery under the Building Contract.
  (B)  
Each of the Vessels will be registered in the ownership of the Borrower under
the flag of Bermuda.
  (C)  
Each of the Banks has agreed to advance to the Borrower its respective
Commitment of an aggregate amount not exceeding the total of (i) the lesser of
forty million Dollars ($40,000,000) and fifty per cent of the Market Value of
Vessel A (in respect of Tranche A) and (ii) the lesser of fifty million dollars
($50,000,000) and fifty per cent of the Market Value of Vessel B (in respect of
Tranche B).

IT IS AGREED as follows:-

1  
Definitions and Interpretation

  1.1  
Definitions

  In this Agreement:-     1.1.1  
“Accounts” means the Earnings Account and the Retention Account (each an
“Account”).
    1.1.2  
“Account Holder” means Bank of Bermuda Limited or such other bank as may be
nominated by the Borrower and acceptable to the Agent.

 

 

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  1.1.3  
“Account Security Deed” means the account security deed referred to in Clause
8.3.
    1.1.4  
“Address for Service” means c/o USG (U.K.) Ltd, 1 Swan Road, South West
Industrial Estate, Peterlee, County Durham, SR8 2HS, Attention: Secretary or, in
relation to any of the Security Parties, such other address in England and Wales
as that Security Party may from time to time designate by no fewer than ten
days’ written notice to the Agent.
    1.1.5  
“Administration” has the meaning given to it in paragraph 1.1.3 of the ISM Code.
    1.1.6  
“Advance Date”, in relation to any Drawing, means the date on which that Drawing
is advanced by the Banks to the Borrower pursuant to Clause 2.
    1.1.7  
“Annex VI” means Annex VI (Regulations for the Prevention of Air Pollution from
Ships) to the International Convention for the Prevention of Pollution from
Ships 1973 (as modified in 1978 and 1997).
    1.1.8  
“Assignments” means the deeds of assignment of the Insurances, Earnings,
Requisition Compensation and CoA Rights in respect of each Vessel referred to in
Clause 8.2 (each an “Assignment”) to be substantially in the form attached as
Schedule 3.
    1.1.9  
“Availability Termination Date” means 31 December 2008 (in the case of Tranche
A) and 31 March 2009 (in the case of Tranche B) or such later date as the Banks
may in their discretion agree.
    1.1.10  
“Borrowings” means in respect of any person the obligations of such person, at
any time, in the aggregate principal amount, but without double counting, of:

  (a)  
moneys borrowed;
    (b)  
bonds, notes, loan stock, debentures, commercial paper or other debt securities;

 

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  (c)  
sums outstanding under acceptances (not being acceptances of trade bills in
respect of the purchase or sale of goods in the ordinary course or trading) by
such person or by any agent or acceptance house under acceptance credits opened
on behalf of such person;
    (d)  
deferred indebtedness for payment of the acquisition or construction price for
assets or services acquired or constructed other than normal trade credit from
suppliers for a period not exceeding 180 days;
    (e)  
the capital element of obligations under finance leases;
    (f)  
receivables sold or discounted to the extent of recourse to such person;
    (g)  
any other liability arising from a transaction having the commercial effect of a
borrowing to the extent shown as a liability on the balance sheet of the
Borrower in accordance with GAAP;
    (h)  
obligations under guarantees in respect of the obligations of any other person
which would fall within paragraphs (a) — (g) above.

  1.1.11  
“Break Costs” means all costs, losses, premiums or penalties incurred by the
Agent or any Bank in the circumstances contemplated by Clause 17.4, or as a
result of it receiving any prepayment of all or any part of the Loan (whether
pursuant to Clause 5 or otherwise), or any other payment under or in relation to
the Security Documents on a day other than the due date for payment of the sum
in question, and includes (without limitation) any losses or costs incurred in
liquidating or re-employing deposits from third parties acquired to effect or
maintain the Loan.
    1.1.12  
“Builder” means Estaleiro Ilha S.A. of Brazil.
    1.1.13  
“Building Contract” means the shipbuilding contract dated 5 December 2005 and
made between the Builder and the Borrower as amended or supplemented from time
to time, in respect of Vessel B.
    1.1.14  
“Business Day” means a day on which banks are open for the transaction of
business of the nature contemplated by this Agreement (and not authorised by law
to close) in New York, New York, United States of America; London, England;
Frankfurt, Germany; and Rotterdam, The Netherlands.

 

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  1.1.15  
“Cash” means cash in hand which is not subject to any charge back or other
Encumbrance (other than in favour of the Agent) and to which the Borrower has
free, immediate and direct access.
    1.1.16  
“Cash Equivalents” means the following where the Borrower has free, immediate
and direct access:

  (a)  
any security issued directly or fully guaranteed or insured by the United States
of America or any OECD government whose securities are readily marketable in
London, Paris, Frankfurt or New York City, or any agency or instrumentality
thereof;
    (b)  
other readily marketable securities or other easily realisable investments
having a rating of at least A from Standard and Poor’s Ratings Group or Moody’s
Investors Service, Inc;
    (c)  
any Eurodollar time deposit, overnight deposit or banker’s acceptance, issued
by, or time deposit of a commercial banking institution which has, on a combined
basis, capital, surplus and undivided profit of not less than $250,000,000 and
has a Moody’s Agent Credit Service rating for short term bank deposits of at
least P2;
    (d)  
repurchase obligations with a term of not more than ninety (90) days for
underlying securities of the types described in paragraph (a) above entered into
with any commercial banking institution meeting the qualifications specified in
paragraph (c) above;
    (e)  
short term commercial paper issued by any person, having one of the top two
investment ratings from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc;
    (f)  
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in paragraphs (a) to (e) above;

 

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  (g)  
deposits which are unrestricted as to withdrawal with commercial banking
institutions meeting the criteria set forth in paragraph (c) above; and
    (h)  
undrawn committed credit lines.

  1.1.17  
“Cash Reserves” means Cash and Cash Equivalents.
    1.1.18  
“Change of Control” means either

  (a)  
the Guarantor ceasing to be the direct or indirect legal and beneficial owner of
all of the shares in the Borrower; or
    (b)  
the consummation of any transaction or a series of related transactions
(including, without limitation, any merger or consolidation) the result of which
is that any person becomes the owner of more than 50% of the then outstanding
shares of the Guarantor’s voting stock entitled to vote generally for the
election of directors, measured by voting power rather than number of shares.

  1.1.19  
“CoAs” means each of:-

  (a)  
the contract of affreightment commencing as of January 1, 2008 made between the
Borrower and United States Gypsum Company;
    (b)  
the contract of affreightment dated 30 October 2007 made between the Borrower
and Public Service of New Hampshire Company;
    (c)  
the contract of affreightment dated 18 April 2008 made between the Borrower and
Mt. Tom Generating Co. LLC; and
    (d)  
any future contracts of affreightment to be entered into by the Borrower in
respect of the Vessels

     
(each a “COA”).

 

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  1.1.20  
“CoA Rights” means all of the rights of the Borrower under or pursuant to the
CoAs.
    1.1.21  
“Commitment” means, in relation to each Bank, the amount of the Maximum Loan
Amount which that Bank agrees to advance to the Borrower as its several
liability as indicated against the name of that Bank in Schedule 1 and/or, where
the context permits, the amount of the Loan advanced by that Bank and remaining
outstanding.
    1.1.22  
“Commitment Commission” means the commitment commission to be paid by the
Borrower to the Agent pursuant to Clause 7.2.
    1.1.23  
a “Communication” means any notice, approval, demand, request or other
communication from one party to this Agreement to any other party to this
Agreement.
    1.1.24  
“Communications Address” means:
       
Gypsum Transportation Limited
c/o Beltship Management Limited
USG Corporation
550 West Adams Street
Chicago, Illinois 60661
USA
Attention: Vice President and Treasurer
Fax No.: +1-312-672-5415
    1.1.25  
“Confidential Information” means information that any Security Party furnishes
to the Agent or to any Bank in writing, designated as confidential, but does not
include any such information that is or becomes generally available to the
public or that is or becomes available to the Agent or such Bank from a source
other than the Security Parties.
    1.1.26  
“Currency of Account” means, in relation to any payment to be made to the Agent
or a Bank under or pursuant to any of the Security Documents, the currency in
which that payment is required to be made by the terms of the relevant Security
Document.

 

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  1.1.27  
“Debt Service” means the aggregate of principal and interest payments due from
the Borrower in the immediately following twelve month period under any
Borrowings.
    1.1.28  
“Default Rate” means the rate of two per centum (2%) per annum above the
aggregate of (a) the Margin and (b) the cost to the Banks of obtaining funds in
amount similar to the amount of the Indebtedness or any relevant part of the
Indebtedness for such periods as the Agent shall determine in its discretion.
    1.1.29  
“Delivery” means the delivery of Vessel B by the Builder to, and acceptance of
Vessel B by, the Borrower pursuant to the Building Contract.
    1.1.30  
“DOC” means, in relation to the ISM Company, a valid Document of Compliance
issued for the ISM Company by the Administration pursuant to paragraph 13.2 of
the ISM Code.
    1.1.31  
“Dollars” and “$” each means available and freely transferable and convertible
funds in lawful currency of the United States of America.
    1.1.32  
“Drawdown Notice” means a notice complying with Clause 2.3.
    1.1.33  
“Drawing” means a part of the Loan advanced by the Banks to the Borrower in
accordance with Clause 2.2.
    1.1.34  
“EBITDA” means earnings before interest expenses, taxes, depreciation and
amortization of the Borrower for the previous period of twelve months.
    1.1.35  
“Earnings” means all hires, freights, pool income and other sums payable to or
for the account of the Borrower in respect of the Vessels including (without
limitation) payments under the CoAs, all remuneration for salvage and towage
services, demurrage and detention moneys, contributions in general average,
compensation in respect of any requisition for hire, and damages and other
payments (whether awarded by any court or arbitral tribunal or by agreement or
otherwise) for breach, termination or variation of any contract for the
operation, employment or use of the Vessels.

 

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  1.1.36  
“Earnings Account” means the bank account in respect of both Vessels to be
opened in the name of the Borrower with the Account Holder and designated “GTL
Vessels — Earnings Account”.
    1.1.37  
“Encumbrance” means any mortgage, charge (fixed or floating), pledge, lien,
assignment, hypothecation, preferential right, option, title retention or trust
arrangement or any other agreement or arrangement which has the effect of
creating security or payment priority.
    1.1.38  
“Event of Default” means any of the events set out in Clause 12.2.
    1.1.39  
“Facility Period” means the period beginning on the date of this Agreement and
ending on the date when the whole of the Indebtedness has been repaid in full
and the Borrower has ceased to be under any further actual or contingent
liability to the Banks or to the Agent under or in connection with the Security
Documents.
    1.1.40  
“Fee Letter” means a letter from the Agent to the Borrower setting out certain
fees, commissions and other sums payable by the Borrower to the Agent in
connection with the Loan.
    1.1.41  
“Finance Parties” means the Banks and the Agent and “Finance Party” means any of
them.
    1.1.42  
“Group” means the Guarantor and all of its Subsidiaries (direct or indirect).
    1.1.43  
“Guarantee” means the guarantee and indemnity of the Guarantor referred to in
Clause 8.4.
    1.1.44  
“Guarantor” means USG Corporation of Delaware and/or (where the context permits)
any other person or company who shall at any time during the Facility Period
give to the Banks or to the Agent on the Banks behalf a guarantee and/or
indemnity for the repayment of all or part of the Indebtedness.
    1.1.45  
“IAPPC” means a valid international air pollution prevention certificate for
each Vessel issued under Annex VI.

 

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  1.1.46  
“Indebtedness” means the Loan; all other sums of any nature (together with all
interest on any of those sums) which from time to time may be payable by the
Borrower to the Banks or to the Agent pursuant to the Security Documents; any
damages payable as a result of any breach by the Borrower of any of the Security
Documents; and any damages or other sums payable as a result of any of the
obligations of the Borrower under or pursuant to any of the Security Documents
being disclaimed by a liquidator or any other person, or, where the context
permits, the amount thereof for the time being outstanding.
    1.1.47  
“Instructing Group” means any one or more Banks whose combined Proportionate
Shares exceed fifty per centum (50%), such group of Banks always to include the
Agent.
    1.1.48  
“Insurances” means all policies and contracts of insurance (including all
entries in protection and indemnity or war risks associations) which are from
time to time taken out or entered into in respect of or in connection with the
Vessels or their increased value or the Earnings and (where the context permits)
all benefits thereof, including all claims of any nature and returns of premium.
    1.1.49  
“Interest Payment Date” means each date for the payment of interest in
accordance with Clause 6.
    1.1.50  
“Interest Period” means each interest period selected by the Borrower or agreed
by the Agent pursuant to Clause 6.
    1.1.51  
“ISM Code” means the International Management Code for the Safe Management of
Ships and for Pollution Prevention, as adopted by the Assembly of the
International Maritime Organisation on 4 November 1993 by resolution A.741 (18)
and incorporated on 19 May 1994 as chapter IX of the Safety of Life at Sea
Convention 1974.
    1.1.52  
“ISM Company” means, at any given time, the company responsible for the Vessels’
compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.
    1.1.53  
“ISPS Code” means the International Ship and Port Security Code.

 

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  1.1.54  
“ISPS Company” means at any time, the Company responsible for the Vessels
compliance with the ISPS Code.
    1.1.55  
“ISSC” means a valid international ship security certificate for each of the
Vessels issued under the ISPS Code.
    1.1.56  
“Law” means any law, statute, treaty, convention, regulation, instrument or
other subordinate legislation or other legislative or quasi-legislative rule or
measure, or any order or decree of any government, judicial or public or other
body or authority, or any directive, code of practice, circular, guidance note
or other direction issued by any competent authority or agency of government
(whether or not having the force of law).
    1.1.57  
“LIBOR” means the rate, rounded to the nearest four decimal places downwards (if
the digit displayed in the fifth decimal place is 1,2,3 or 4) or upwards (if the
digit displayed in the fifth decimal place is 5,6,7,8 or 9) displayed as the
British Bankers’ Association Interest Settlement Rate on any information service
selected by the Agent on which that rate is displayed, for deposits in Dollars
of amounts equal to the amount of the Loan or any relevant part of the Loan for
a period equal in length to the relevant Interest Period, or (if the Agent is
for any reason unable to ascertain that rate) the rate (rounded upwards to the
nearest whole multiple of one-sixteenth of one per centum) at which deposits in
Dollars of amounts comparable to the amount of the Loan (or any relevant part of
the Loan) are offered to the Agent in the London Interbank market for a period
equal in length to the relevant Interest Period.
       
If there is a discrepancy between the rate that is displayed on the information
service screen selected by the Agent and the “actual” rate at which funds are
available to the Agent in the London Interbank Market, then the Agent will (on
request) provide evidence of the discrepancy between the Agent’s cost of funds
and the screen rate for LIBOR to the Borrower and the actual rate at which funds
are available shall be the rate that applies.

 

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  1.1.58  
“Loan” means the aggregate amount from time to time advanced by the Banks to the
Borrower pursuant to Clause 2 or, where the context permits, the amount advanced
and for the time being outstanding.
    1.1.59  
“Loan Administration Form” means a form substantially in the form of Appendix C.
    1.1.60  
“Managers” means Beltship Management Limited, a company incorporated under the
International Business Companies Act of the British Virgin Islands, or such
other commercial and/or technical managers of the Vessels nominated by the
Borrower as the Agent may in its reasonable discretion approve.
    1.1.61  
“Managers’ Undertakings” means the undertakings to be given by the Managers in
respect of each Vessel referred to in Clause 8.5, to be substantially in the
form of Schedule 4.
    1.1.62  
“Margin” means one point six five per centum (1.65%) per annum.
    1.1.63  
“Market Adjusted Net Worth” means Value Adjusted Total Assets less Value
Adjusted Total Liabilities;
    1.1.64  
“Market Value” means the valuation of the Vessels from an independent and
reputable sale and purchase broker, acceptable to the Agent and the Borrower,
such valuation to be made with or without physical inspection (as the Agent may
require) on the basis of a sale for prompt delivery for cash at arm’s length on
normal commercial terms as between a willing buyer and a willing seller and free
of any existing charter or other contract of employment.
    1.1.65  
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets or condition, financial or otherwise, of the Borrower and its
Subsidiaries, taken as a whole, (b) the ability of a Security Party to perform
its material obligations under the Security Documents to which it is a party or
(c) the material rights of or benefits available to the Agent and/or the Banks
under the Security Documents.

 

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  1.1.66  
“Maximum Loan Amount” means the total of (i) the lesser of forty million Dollars
($40,000,000) and fifty per cent of the Market Value of Vessel A (in respect of
Tranche A) and (ii) the lesser of fifty million Dollars ($50,000,000) and fifty
per cent of the Market Value of Vessel B (in respect of Tranche B).
    1.1.67  
“Maximum Tranche Amount” means:-

  (a)  
in relation to Tranche A, the lesser of (i) forty million Dollars ($40,000,000)
and (ii) fifty per centum (50%) of the Market Value of Vessel A ; and
    (b)  
in relation to Tranche B, the lesser of (i) fifty million Dollars ($50,000,000)
and (ii) fifty per centum (50%) of the Market Value of Vessel B.

  1.1.68  
“Mortgagees’ Insurances” means all policies and contracts of mortgagees’
interest insurance, mortgagees’ additional perils (oil pollution) insurance and
any other insurance from time to time taken out by the Agent on behalf of the
Banks in relation to the Vessels.
    1.1.69  
“Mortgages” means the first priority mortgages over the Vessels together with
collateral deeds of covenants thereto referred to in Clause 8.1 to be in the
forms attached as Schedule 2.
    1.1.70  
“Permitted Encumbrances” means any Encumbrances created pursuant to the Security
Documents or reasonably incurred in the ordinary course of business and any
Encumbrance which has the prior written approval of the Agent.
    1.1.71  
“Potential Event of Default” means any event which, with the giving of notice
and/or the passage of time and/or the satisfaction of any materiality test,
would constitute an Event of Default.
    1.1.72  
“Proceedings” means any suit, action or proceedings begun by the Agent or any
Bank arising out of or in connection with the Security Documents.

 

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  1.1.73  
“Proportionate Share” means, at any time, the proportion which that Bank’s
Commitment (whether or not advanced) then bears to the aggregate Commitments of
all the Banks (whether or not advanced).
    1.1.74  
“Repayment Date” means the date for payment of any Repayment Instalment in
accordance with Clause 5.
    1.1.75  
“Repayment Instalment” means any instalment of the Loan to be repaid by the
Borrower pursuant to Clause 5.
    1.1.76  
“Requisition Compensation” means all compensation or other money which may from
time to time be payable to the Borrower as a result of a Vessel being
requisitioned for title or in any other way compulsorily acquired (other than by
way of requisition for hire).
    1.1.77  
“Retention Account” means the account to be opened in the name of the Borrower
with the Account Holder and designated “GTL — Retention Account”.
    1.1.78  
“Security Documents” means this Agreement, the Mortgages, the Assignments, the
Guarantee, the Account Security Deed, the Managers’ Undertakings or (where the
context permits) any one or more of them, and any other agreement or document
which may at any time be executed by any person as security for the payment of
all or any part of the Indebtedness.
    1.1.79  
“Security Parties” means the Borrower, the Guarantor and any other person or
company who may at any time during the Facility Period be liable for, or provide
security for, all or any part of the Indebtedness, and “Security Party” means
any one of them.
    1.1.80  
“SMC” means a valid safety management certificate issued for the Vessels by or
on behalf of the Administration pursuant to paragraph 13.4 of the ISM Code.
    1.1.81  
“SMS” means a safety management system for the Vessels developed and implemented
in accordance with the ISM Code and including the functional requirements,
duties and obligations required by the ISM Code.

 

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  1.1.82  
“Subsidiary” means a subsidiary undertaking, as defined in Section 736 Companies
Act 1985 or any analogous definition under any other relevant system of law.
    1.1.83  
“Taxes” means all taxes, levies, imposts, duties, charges, fees, deductions and
withholdings (including any related interest, fines, surcharges and penalties)
imposed by any governmental authority or other taxing authority, other than
taxes on the overall net income of the Agent or of a Bank, and “Tax” and
“Taxation” shall be interpreted accordingly.
    1.1.84  
“Total Loss” means, in respect of each Vessel:-

  (a)  
an actual, constructive, arranged, agreed or compromised total loss of that
Vessel; or
    (b)  
the requisition for title or compulsory acquisition of that Vessel by or on
behalf of any government or other authority (other than by way of requisition
for hire); or
    (c)  
the capture, seizure, arrest, detention or confiscation of that Vessel, unless
the Vessel is released and returned to the possession of the Borrower within six
months after the capture, seizure, arrest, detention or confiscation in
question.

  1.1.85  
“Tranche A” means that part of the Loan relating to Vessel A.
    1.1.86  
“Tranche B” means that part of the Loan relating to Vessel B.
    1.1.87  
“Tranches” means Tranche A and Tranche B (each a “Tranche”).
    1.1.88  
“Transfer Certificate” means a certificate materially in the form of Appendix B.
    1.1.89  
“Transfer Date”, in relation to a transfer of any of a Bank’s rights and/or
obligations under or pursuant to this Agreement, means the fifth Business Day
after the date of delivery of the relevant Transfer Certificate to the Agent, or
such later Business Day as may be specified in the relevant Transfer
Certificate.

 

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  1.1.90  
“Transferee” means a first class international bank or financial institution to
which a Bank transfers any of its rights and/or obligations under or pursuant to
this Agreement.
    1.1.91  
“Trust Property” means:-

  (a)  
the benefit of the covenant contained in Clause 8; and
    (b)  
all benefits arising under (including, without limitation, all proceeds of the
enforcement of) each of the Security Documents (other than this Agreement), with
the exception of any benefits arising solely for the benefit of the Agent.

  1.1.92  
“Valuations” means the valuation from an independent and reputable sale and
purchase broker, selected by the Agent and the Borrower, certifying the Market
Value of the Vessels such valuations to be made semi-annually, at the Borrower’s
expense, and with or without physical inspection (as the Agent may require) on
the basis of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing buyer and willing seller and free of any
existing charter or other contract of employment.
    1.1.93  
“Value Adjusted Equity” means the amount which is equal to the Value Adjusted
Total Assets of the Borrower less the total liabilities of the Borrower as shown
in the Borrower’s latest balance sheet delivered pursuant to Clause 10.2.3 of
this Agreement.
    1.1.94  
“Value Adjusted Total Assets” means the amount which is equal to the total
assets of the Borrower as shown in the Borrower’s latest balance sheet delivered
pursuant to Clause 10.2.3 of this Agreement less the goodwill (if any) of the
Borrower as shown in such balance sheet, with the value of the Vessels adjusted
to reflect their most recent Valuations.
    1.1.95  
“Value Adjusted Total Liabilities” means the amount which is equal to the total
liabilities of the Borrower as shown in the Borrower’s latest balance sheet
delivered pursuant to Section 10.2.3 of this Agreement as adjusted to reflect
any contingent liabilities of the Borrower which the Agent reasonably considers
should be taken into account.

 

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  1.1.96  
“Vessel A” means the 47,761 dwt bulk carrier named “GYPSUM CENTENNIAL”
registered in the name of the Borrower and having IMO Number 9228734.
    1.1.97  
“Vessel A Security Documents” means the Mortgage and Assignment relating to
Vessel A.
    1.1.98  
“Vessel B” means approximately 48,000 dwt bulk carrier built by the Builder
pursuant to the Building Contract having Hull No. E1-492 at the Builder’s yard
and to be named “GYPSUM INTEGRITY”.
    1.1.99  
“Vessel B Security Documents” means the Mortgage and Assignment relating to
Vessel B.
    1.1.100  
“Vessels” means Vessel A and Vessel B and everything now or in the future
belonging to them on board and ashore (each a “Vessel”).

  1.2  
Interpretation
       
In this Agreement:-

  1.2.1  
words denoting the plural number include the singular and vice versa;
    1.2.2  
words denoting persons include corporations, partnerships, associations of
persons (whether incorporated or not) or governmental or quasi-governmental
bodies or authorities and vice versa;
    1.2.3  
references to Recitals, Clauses and Appendices are references to recitals and
clauses of, and appendices to, this Agreement;
    1.2.4  
references to this Agreement include the Recitals and the Appendices;
    1.2.5  
the headings and contents page(s) are for the purpose of reference only, have no
legal or other significance, and shall be ignored in the interpretation of this
Agreement;
    1.2.6  
references to any document (including, without limitation, to all or any of the
Security Documents) are, unless the context otherwise requires, references to
that document as amended, supplemented, novated or replaced from time to time;

 

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  1.2.7  
references to statutes or provisions of statutes are references to those
statutes, or those provisions, as from time to time amended, replaced or
re-enacted;
    1.2.8  
references to the Agent or to a Bank include its successors, transferees and
assignees;
    1.2.9  
references to times of day are to London time.

  1.3  
Offer letter
       
This Agreement supersedes the terms and conditions contained in any
correspondence relating to the subject matter of this Agreement exchanged
between the Agent or any Bank and the Borrower or their representatives prior to
the date of this Agreement.

2  
The Loan and its Purpose

  2.1  
Agreement to lend Subject to the terms and conditions of this Agreement, and in
reliance on each of the representations and warranties made or to be made in or
in accordance with each of the Security Documents, each of the Banks agrees to
advance to the Borrower, to provide post-delivery financing on the Vessels.
    2.2  
Drawings Subject to satisfaction by the Borrowers of the conditions precedent
set out in Clause 3.1 and 3.2, and subject to Clause 2.3, the Loan shall be
advanced to the Borrower in no more than two (2) Drawings, one per Tranche, in
each case by the Agent transferring the Tranches to the Borrower by such method
of funds transfer as the Agent and the Borrower shall agree.
    2.3  
Advance of Drawings Each Drawing shall be advanced in Dollars on a Business Day,
provided that the Borrower shall have given to the Agent not more than ten and
not fewer than three Business Days’ notice in writing materially in the form set
out in Appendix A (such notice a “Drawdown Notice”) of the required Advance Date
of the Drawing in question. Each Drawdown Notice once given shall be irrevocable
and shall constitute a warranty by the Borrower that:-

  2.3.1  
all conditions precedent to the advance of the Drawing requested in that
Drawdown Notice will have been satisfied on or before the Advance Date
requested;
    2.3.2  
no Event of Default or Potential Event of Default will then have occurred and be
continuing;

 

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  2.3.3  
no Event of Default or Potential Event of Default will result from the advance
of the Drawing in question; and
    2.3.4  
there has been no material adverse change in the business, affairs or financial
condition of the Borrower or the Guarantor from that pertaining at the date of
this Agreement.

     
The Agent shall promptly notify each Bank of the receipt of each Drawdown
Notice, following which each Bank will make its Proportionate Share of the
amount of the requested Drawing available to the Borrower through the Agent on
the Advance Date requested.
    2.4  
Restrictions on Drawings The Borrower shall not be entitled to make more than
one Drawing on any Business Day and each Drawing shall be of an amount of not
less than one million Dollars ($1,000,000).
    2.5  
Availability Termination Date No Bank shall be under any obligation to advance
all or any part of its Commitment after the relevant Availability Termination
Date.
    2.6  
Several obligations The obligations of the Banks under this Agreement are
several. The failure of a Bank to perform its obligations under this Agreement
shall not affect the obligations of the Borrower to the Agent or to the other
Banks, nor shall the Agent or any other Bank be liable for the failure of a Bank
to perform any of its obligations under or in connection with this Agreement.
    2.7  
Application of Loan Without prejudice to the obligations of the Borrower under
this Agreement, neither the Banks nor the Agent shall be obliged to concern
themselves with the application of the Loan by the Borrower.
    2.8  
Secured UK Tax Lease The Banks confirm that subject to compliance with the
following terms and conditions the Borrower shall have the option, at its sole
discretion, but shall have no obligation to utilise all or part of the Loan in
connection with a secured UK lease structure (the “Tax Lease Transfer”):-

  2.8.1  
there being no Event of Default or Potential Event of Default existing at the
date of the Tax Lease Transfer or resulting from the Tax Lease Transfer;
    2.8.2  
following the Tax Lease Transfer, the Banks being in a position substantially
equivalent to their intended position under the Security Documents prior to the
Tax Lease Transfer;

 

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  2.8.3  
the Tax Lease Transfer being acceptable to and approved by all of the Banks in
all respects in their absolute discretion; and
    2.8.4  
the satisfaction of all conditions precedent required by the Banks in connection
with the Tax Lease Transfer (including but not limited to certified copies of
all relevant lease documentation, acceptable intercreditor arrangements with the
lessor and acceptable legal opinions)

provided that the Banks agree to consider all the issues arising out of a
proposed Tax Lease Transfer in good faith and with a view to finding solutions
acceptable to all parties. It is also agreed that the Agent has the right of
first refusal to arrange any Tax Lease Transfer.

3  
Conditions Precedent and Subsequent

  3.1  
Conditions precedent Drawing of Tranche A Before any Bank shall have any
obligation to advance any part of Tranche A, the Borrower shall deliver or cause
to be delivered to or to the order of the Agent the following documents and
evidence:-

  3.1.1  
Evidence of incorporation Such evidence as the Agent may reasonably require that
each Security Party was duly incorporated in its country of incorporation and
remains in existence and, where appropriate, in good standing, with power to
enter into, and perform its obligations under, those of the Security Documents
to which it is, or is intended to be, a party, including (without limitation) a
copy, certified by a director or the secretary of the Security Party in question
as true, complete, accurate and unamended, of all documents establishing or
limiting the constitution of each Security Party.
    3.1.2  
Corporate authorities A copy, certified by a director or the secretary of the
Security Party in question as true, complete, accurate and neither amended nor
revoked, of a resolution of the directors (together, where appropriate, with
signed waivers of notice of any directors’ meeting) approving, and authorising
or ratifying the execution of, those of the Security Documents to which that
Security Party is or is intended to be a party and all matters incidental
thereto.

 

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  3.1.3  
Officer’s certificate A certificate signed by a duly authorised officer of each
of the Security Parties setting out the names of the directors, officers and (in
respect of the Borrower only) shareholders of that Security Party.
    3.1.4  
Security Documents This Agreement, the Vessel A Security Documents, the Account
Security Deed and the Guarantee together with all notices and other documents
required by any of them, duly executed.
    3.1.5  
Notices of assignment The notices of assignment required by the Assignment for
Vessel A duly executed by the Borrower and the required form of acknowledgements
approved by the relative recipients.
    3.1.6  
Drawdown Notice A Drawdown Notice.
    3.1.7  
Process agent A letter from USG (U.K.) Ltd. accepting their appointment by each
of the Security Parties as agent for service of Proceedings pursuant to the
Security Documents.
    3.1.8  
Mandates Such duly signed forms of mandate, and/or other evidence of the opening
of the Accounts, as the Account Bank may require.
    3.1.9  
The Fee Letter The Fee Letter countersigned on behalf of the Borrower by way of
acceptance of its terms.
    3.1.10  
Legal opinions Confirmation satisfactory to the Agent that legal opinions on the
laws of England and Wales, the State of Delaware and Bermuda will be given
substantially in the form required by the Agent.
    3.1.11  
Market Value A Valuation of Vessel A addressed to the Agent and dated no more
than one month prior to the Tranche A Advance Date, from brokers acceptable to
the Agent.
    3.1.12  
Miscellaneous Such further documents and evidence as the Agent shall reasonably
require in order that each Bank can be satisfied with the results of all
necessary “Know your Client” or other checks it is required to carry out or
comply with in relation to the transactions contemplated by the Security
Documents and to the identity of any parties to the Security Documents (other
than the Banks and the Agent) and their directors and officers.

 

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  3.1.13  
Vessel documents Photocopies, certified as true, accurate and complete by a
director or the secretary of the Borrower, of (in respect of Vessel A):-

  (a)  
each of the CoAs and any other charterparty or contract of employment of Vessel
A which will be in force on the Advance Date;
    (b)  
Vessel A’s current Safety Construction, Safety Equipment, Safety Radio and Load
Line Certificates;
    (c)  
Vessel A’s current Certificate of Financial Responsibility issued pursuant to
the United States Oil Pollution Act 1990;
    (d)  
Vessel A’s current SMC;
    (e)  
the ISM Company’s current DOC; and
    (f)  
Vessel A’s current ISSC

     
in each case together with all addenda, amendments or supplements.
    3.1.14  
Evidence of ownership Evidence that on the Advance Date (i) Vessel A is
registered under the Bermuda flag in the ownership of the Borrower and (ii) the
Mortgage will be capable of being registered against Vessel A with first
priority.
    3.1.15  
Evidence of insurance Evidence that Vessel A is or will from the Advance Date be
insured in the manner required by the Security Documents and that letters of
undertaking will be issued in the manner required by the Security Documents,
together with the written approval of the Insurances of the Agent’s insurance
adviser, which approval shall not be unreasonably withheld or delayed.
    3.1.16  
Confirmation of class A Certificate of Confirmation of Class for hull and
machinery confirming that Vessel A is classed with the highest class applicable
to vessels of her type with a classification society as may be acceptable to the
Agent.

 

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  3.1.17  
Survey reports Reports by surveyors instructed by the Agent to inspect Vessel A
as to the condition of Vessel A, which shall be in all material respects
acceptable to the Agent (acting reasonably).
    3.1.18  
Managers’ confirmation The written confirmation of the Managers that, throughout
the Facility Period unless otherwise agreed by the Agent, they will remain the
commercial and technical managers of Vessel A and that they will not, without
the prior written consent of the Agent, sub-contract or delegate the commercial
or technical management of Vessel A to any third party.
    3.1.19  
Fees The Borrower shall have paid all fees due hereunder or under the Fee
Letter.
    3.1.20  
Loan Administration Form A duly completed Loan Administration Form.

  3.2  
Conditions precedent to Drawing of Tranche B Before any Bank shall have an
obligation to advance any part of Tranche B, the Borrower shall deliver or cause
to be delivered to the Agent the following documents and evidence:-

  3.2.1  
Bringdown Certificate A certificate dated no more than five Business Days prior
to the Advance Date in question, signed by a director or duly authorised officer
of each of the Security Parties confirming that none of the documents and
evidence delivered to or to the order of the Agent pursuant to Clauses 3.1.1 to
3.1.3 have been modified, amended or revoked since their delivery to or to the
order of the Agent except as set forth in such certificate.
    3.2.2  
Vessel documents Photocopies, certified as true, accurate and complete by a
director or the secretary of the Borrower, of (in respect of Vessel B):-

  (a)  
any charterparty or other contract of employment (other than the CoAs) of Vessel
B which will be in force on the Tranche B Advance Date;
    (b)  
Vessel B’s current Safety Construction, Safety Equipment, Safety Radio and Load
Line Certificates;

 

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  (c)  
Vessel B’s current Certificate of Financial Responsibility issued pursuant to
the United States Oil Pollution Act 1990;
    (d)  
Vessel B’s current SMC;
    (e)  
the ISM Company’s current DOC; and
    (f)  
Vessel B’s current ISSC

     
in each case together with all addenda, amendments or supplements.
    3.2.3  
Evidence of ownership Evidence that on the Advance Date (i) Vessel B is
registered under the Bermuda flag in the ownership of the Borrower and (ii) the
Mortgage will be capable of being registered against Vessel B with first
priority.
    3.2.4  
Evidence of insurance Evidence that Vessel B is or will from the Tranche B
Advance Date be insured in the manner required by the Security Documents and
that letters of undertaking will be issued in the manner required by the
Security Documents, together with the written approval of the Insurances by an
insurance adviser appointed by the Agent.
    3.2.5  
Confirmation of class An interim Certificate of Confirmation of Class for hull
and machinery confirming that Vessel B is classed with the highest class
applicable to vessels of her type with a classification society as may be
acceptable to the Agent.
    3.2.6  
Survey reports Reports by surveyors instructed by the Agent to inspect Vessel B
as to the condition of Vessel B which shall be in all material respects
acceptable to the Agent (acting reasonably).
    3.2.7  
Market Value A Valuation of Vessel B addressed to the Agent and dated no more
than one month prior to the Tranche B Advance Date.
    3.2.8  
The Security Documents The Vessel B Security Documents, together with all
notices and other documents required by any of them, duly executed and, in the
case of the Mortgage, registered with first priority through the Registrar of
Ships (or equivalent official) at the port of registry of Vessel B.

 

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  3.2.9  
A Drawdown Notice A Drawdown Notice.
    3.2.10  
Managers’ confirmation The written confirmation of the Managers that, throughout
the Facility Period unless otherwise agreed by the Agent, they will remain the
commercial and technical managers of Vessel B and that they will not, without
the prior written consent of the Agent, sub-contract or delegate the commercial
or technical management of Vessel B to any third party.
    3.2.11  
Legal opinions Confirmation satisfactory to the Agent that legal opinions on the
laws of England and Wales and Bermuda will be given substantially in the form
required by the Agent.
    3.2.12  
Fees The Borrower shall have paid all fees due hereunder or under the Fee
Letter.

  3.3  
Conditions Subsequent The Borrower undertakes to deliver or to cause to be
delivered to the Agent on, or as soon as practicable after, each Advance Date,
the following additional documents and evidence:-

  3.3.1  
Evidence of registration Evidence of registration of the relevant Mortgage,
(with first priority), with the Registrar of Ships (or equivalent official) at
the Vessel’s port of registry.
    3.3.2  
Letters of undertaking Letters of undertaking as required by the relevant
Security Documents in form and substance acceptable to the Agent.
    3.3.3  
Legal opinions The original legal opinions specified in this Clause 3.

  3.4  
No waiver If the Banks in their sole discretion agree to advance any part of the
Loan to the Borrower before all of the documents and evidence required by
Clauses 3.1 or 3.2 have been delivered to or to the order of the Agent, the
Borrower undertakes to deliver all outstanding documents and evidence to or to
the order of the Agent no later than the date specified by the Agent, and the
advance of any part of the Loan shall not be taken as a waiver of the Agent’s
right to require production of all the documents and evidence required by
Clauses 3.1 and 3.2.

 

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  3.5  
Form and content All documents and evidence delivered to the Agent pursuant to
this Clause shall:-

  3.5.1  
be in form and substance reasonably acceptable to the Agent;
    3.5.2  
be accompanied, if required by the Agent, by translations into the English
language, certified in a manner reasonably acceptable to the Agent;
    3.5.3  
if reasonably required by the Agent, be certified, notarised, apostilled or
attested in a manner reasonably acceptable to the Agent.

  3.6  
Event of Default No Bank shall be under any obligation to advance any part of
its Commitment nor to act on any Drawdown Notice if, at the date of the Drawdown
Notice or at the date on which a Drawing is requested in the Drawdown Notice, an
Event of Default or Potential Event of Default shall have occurred, or if an
Event of Default or Potential Event of Default would result from the advance of
the Drawing in question.

4  
Representations and Warranties

  4.1  
The Borrower represents and warrants to the Agent and each Bank at the date of
this Agreement and (by reference to the facts and circumstances then pertaining)
at the date of each Drawdown Notice, at each Advance Date and, except for
Clauses 4.1.2, 4.1.6 and 4.1.9, at each Interest Payment Date as follows:-

  4.1.1  
Incorporation and capacity Each of the Security Parties is a body corporate duly
constituted and existing and (where applicable) in good standing under the law
of its country of incorporation, in each case with perpetual corporate existence
and the power to sue and be sued, to own its assets and to carry on its business
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect.
    4.1.2  
Solvency The Borrower is not insolvent or in liquidation or administration or
subject to any other insolvency procedure, and no receiver, administrative
receiver, administrator, liquidator, trustee or analogous officer has been
appointed in respect of the Borrower or all or any part of its assets.

 

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  4.1.3  
Binding obligations The Security Documents when duly executed and delivered will
constitute the legal, valid and binding obligations of the Security Parties
enforceable against the Security Parties in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganisation, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity.
    4.1.4  
Satisfaction of conditions All acts, conditions and things required to be done
and satisfied by the Security Parties prior to the execution and delivery of the
Security Documents in order to constitute the Security Documents the legal,
valid and binding obligations of the Security Parties in accordance with their
respective terms have been done and satisfied in compliance with all applicable
laws.
    4.1.5  
Registrations and consents With the exception only of the registrations referred
to in Clause 3.3, all (if any) consents, licences, approvals and authorisations
of, or registrations with or declarations to, any governmental authority, bureau
or agency which may be required by the Borrower in connection with the
execution, delivery, performance, validity or enforceability of the Security
Documents have been obtained or made and remain in full force and effect and the
Borrower is not aware of any event or circumstance which could reasonably be
expected adversely to affect the right of any of the Security Parties to hold
and/or obtain renewal of any such consents, licences, approvals or
authorisations.
    4.1.6  
Disclosure of material facts The Borrower, subject to not being in contravention
of U.S. laws and excluding general market conditions, is not aware of any
material facts or circumstances which have not been disclosed to the Agent and
which the Borrower reasonably believes might, if disclosed as at the date
hereof, have adversely affected the decision of a person considering whether or
not to make loan facilities of the nature contemplated by this Agreement
available to the Borrower.
    4.1.7  
No material litigation There is no action, suit, arbitration or administrative
proceeding pending or to its knowledge about to be pursued before any court,
tribunal or governmental or other authority which would, or would be likely to,
have a Material Adverse Effect.

 

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  4.1.8  
No breach of law or contract The execution, delivery and performance of the
Security Documents will not contravene any material contractual restriction or
any material law binding on any of the Security Parties or on any shareholder
(whether legal or beneficial) of any of the Security Parties, or the
constitutional documents of any of the Security Parties, nor result in the
creation of, nor oblige any of the Security Parties to create, any Encumbrance
over all or any of its assets, with the exception of the Encumbrances created by
or pursuant to the Security Documents and, in entering into those of the
Security Documents to which it is, or is to be, a party, and in borrowing the
Loan, the Borrower is acting for its own account and none of the foregoing
activities will involve or lead to a contravention of any law, official
requirement or other regulatory measure or procedure which has been implemented
to combat “money laundering” (as defined in each of Article 1 of Directive
91/308/EEC issued by the Council of the European Community and the USA Patriot
Act 2001, Publ. L. No. 107-56).
    4.1.9  
No deductions The Borrower is not required to make any deduction or withholding
from any payment which it may be obliged to make to the Agent or any Bank under
or pursuant to the Security Documents.
    4.1.10  
No established place of business in the United Kingdom or United States The
Borrower does not have, nor will it have during the Facility Period, an
established place of business in the United Kingdom or the United States of
America.
    4.1.11  
Use of Loan The Loan will be used for the purpose specified in Clause 2.1.
    4.1.12  
No material adverse change As of the date of this Agreement, no event, change or
condition has occurred since 30 June 2008 that has had, or would reasonably be
expected to have, a Material Adverse Effect.
    4.1.13  
No Event of Default No Event of Default exists and is continuing.

  4.2  
Each Bank severally represents and warrants to the Borrower that no part of the
bonds to be used by it to make any advance hereunder shall constitute assets of
an employee pension plan.

 

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5  
Repayment and Prepayment

  5.1  
Repayment Subject to Clause 5.2, the Borrower agrees to repay each Tranche to
the Agent as agent for the Banks as follows:-

  5.1.1  
Tranche A Repayment
       
By sixteen (16) consecutive quarterly Repayment Instalments each in the sum of
one million Dollars ($1,000,000) followed by sixteen (16) consecutive Repayment
Instalments each in the sum of five hundred thousand Dollars ($500,000).
    5.1.2  
Tranche B Repayment
       
By sixteen (16) consecutive quarterly Repayment Instalments each in the sum of
one million three hundred thousand Dollars ($1,300,000) followed by sixteen
(16) consecutive quarterly Repayment Instalments each in the sum of eight
hundred and twenty five thousand Dollars ($825,000).

The first Repayment Date for each Tranche shall be the date which is three
calendar months after the Advance Date for that Tranche and subsequent Repayment
Dates shall be at consecutive intervals of three calendar months thereafter. A
balloon payment of the lesser of sixteen million Dollars ($16,000,000) and the
unpaid principal amount of each Tranche (“the Balloon”) shall be payable
together with the thirty second and final Repayment Instalment of each Tranche.
In any event each Tranche shall be repaid in full on or before the date falling
eight (8) years after the Advance Date for that Tranche.

  5.2  
Reduction of Repayment Instalments If the aggregate amount advanced to the
Borrower for a Tranche is less than the relevant Maximum Tranche Amount, then
the amount of the Repayment Instalments relating to that Tranche shall be
reduced pro rata to the amount actually advanced.

 

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  5.3  
Prepayment The Borrower may voluntarily prepay either Tranche in whole or in
part in an amount equal to one hundred thousand Dollars ($100,000) or an
integral multiple of that amount (or as allowed pursuant to Clause 5.6 and
Clause 10.2.2 or as otherwise may be agreed by the Agent) provided that it has
first given to the Agent not fewer than five Business Days’ prior written notice
expiring on a Business Day (being the last day of an Interest Period) of its
intention to do so, and provided that it pays to the Agent on behalf of the
Banks, in addition to the amount voluntarily prepaid, a prepayment fee of an
amount equal to zero point two five per centum (0.25%) of the amount prepaid
(which is a genuine pre-estimate of loss and not a penalty) (it being understood
that such prepayment fee is not applicable to prepayments made pursuant to
Clause 10.2.2). Any notice pursuant to this Clause once given shall be
irrevocable and shall oblige the Borrower to make the prepayment referred to in
the notice on the Business Day specified in the notice, together with all
interest accrued on the amount prepaid up to and including that Business Day.
    5.4  
Prepayment indemnity If the Borrower shall, subject always to Clause 5.3, make a
voluntary prepayment on a Business Day other than the last day of an Interest
Period in respect of the whole of the Loan, it shall, in addition to the amount
prepaid, the fee payable pursuant to Clause 5.3 and accrued interest, pay to the
Agent on behalf of the Banks any amount which the Agent may certify is necessary
to compensate the Banks for any Break Costs incurred by the Agent or any of the
Banks as a result of the making of the prepayment in question. The Agent will
give a non-binding estimate of Break Costs within three days of receipt of any
request from the Borrower for such an estimate but the Break Costs payable will
be those actually incurred on the date of prepayment.
    5.5  
Application of prepayments Any prepayment, other than pursuant to Clause 5.6, in
an amount less than the Indebtedness shall be applied in satisfaction or
reduction first of any costs and other amounts outstanding; secondly of all
interest outstanding; thirdly of the Balloon of the relevant Tranche; and
fourthly of the Repayment Instalments of the relevant Tranche in inverse order
of maturity.
    5.6  
Application of prepayment on sale On any prepayment resulting from the sale or
Total Loss of a Vessel prior to the occurrence of an Event of Default, the net
sale proceeds or net Total Loss moneys (as the case may be) shall be applied in
repayment of the relevant Tranche (firstly against the relevant Balloon and
secondly against all other amounts outstanding in respect of the relevant
Tranche) at the date of such sale or within one (1) Business Day of receipt of
the net Total Loss moneys together with such additional amount (if any) as may
be required to ensure that, immediately following the prepayment, the Borrower
complies with Clause 10.2.2.
    5.7  
No reborrowing No amount repaid or prepaid pursuant to this Agreement may in any
circumstances be reborrowed.

 

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6  
Interest

  6.1  
Interest Periods The period during which the Loan shall be outstanding pursuant
to this Agreement shall (subject to clauses 6.2 and 6.9) be divided into
consecutive Interest Periods of three months’ duration or such other duration as
the Borrower may request which may be agreed by the Banks in their discretion.
    6.2  
Beginning and end of Interest Periods For each of Tranche A and Tranche B, the
first Interest Period for each Tranche shall begin on the first Advance Date for
that Tranche and the final Interest Period for each Tranche shall end on the
Repayment Date applicable to the final Repayment Instalment for such Tranche.
    6.3  
Interest Periods to meet Repayment Dates If the Borrower and the Banks shall
agree an Interest Period which does not expire on the next Repayment Date, there
shall, in respect of each part of the Loan equal to a Repayment Instalment
falling due for payment before the expiry of that Interest Period, be a separate
Interest Period which shall expire on the relevant Repayment Date, and the
Interest Period selected or agreed shall apply to the balance of the Loan only.
    6.4  
Interest rate During each Interest Period interest shall accrue on the Loan at
the rate determined by the Agent to be the aggregate of (a) the Margin and
(b) LIBOR determined at or about 11.00 a.m. on the second Business Day prior to
the beginning of that Interest Period.
    6.5  
Accrual and payment of interest Interest shall accrue from day to day, shall be
calculated on the basis of a 360 day year and the actual number of days elapsed
and shall be paid by the Borrower to the Agent on behalf of the Banks on the
last day of each Interest Period and additionally, during any Interest Period
exceeding six months, on the last day of each successive six month period after
the beginning of that Interest Period.

 

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  6.6  
Ending of Interest Periods Each Interest Period shall, subject to Clauses 6.2
and 6.3, end on the date which numerically corresponds to the date on which the
immediately preceding Interest Period ended (or, in the case of the first
Interest Period, to the first Advance Date) in the calendar month which is the
number of months selected or agreed after the calendar month in which the
immediately preceding Interest Period ended (or, in the case of the first
Interest Period, in which the first Advance Date occurred), except that:-

  6.6.1  
if there is no numerically corresponding date in the calendar month in which the
Interest Period ends, the Interest Period shall end on the last Business Day in
that calendar month; and
    6.6.2  
if any Interest Period would end on a day which is not a Business Day, that
Interest Period shall end on the next succeeding Business Day (unless the next
succeeding Business Day falls in the next calendar month, in which event the
Interest Period in question shall end on the next preceding Business Day).

Any adjustment made pursuant to Clause 6.6.1 or 6.6.2 shall be ignored for the
purpose of determining the date on which any subsequent Interest Period shall
end.

  6.7  
Default Rate If an Event of Default shall occur, the whole of the Indebtedness
shall, during the continuance of the Event of Default, bear interest up to the
date of actual payment (both before and after judgment) at the Default Rate,
which interest shall be payable from time to time by the Borrower to the Agent
on behalf of the Banks on demand.

 

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  6.8  
Changes in market circumstances If at any time the Agent determines (which
determination shall be final and conclusive and binding on the Borrower) that in
the London interbank market either adequate and fair means do not exist for
determining the rate of interest on the Loan for any Interest Period or the cost
to a Bank or Banks of obtaining matching deposits for any Interest Period would
be in excess of LIBOR:

  6.8.1  
the Agent shall give notice to the Banks and the Borrower of the occurrence of
such event; and

  6.8.2  
the rate of interest on each Bank’s Commitment for that Interest Period shall be
the rate per annum which is the sum of:

  (a)  
the Margin; and
    (b)  
the rate notified to the Agent by that Bank as soon as practicable, and in any
event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to that Bank of
funding its Commitment from whatever source it may reasonably select,

PROVIDED THAT if the resulting rate of interest on any Commitment is not
acceptable to the Borrower:

  6.8.3  
the Agent on behalf of the Banks will negotiate with the Borrower in good faith
with a view to modifying this Agreement to provide a substitute basis for
determining the rate of interest which is financially a substantial equivalent
to the basis provided for in this Agreement;
    6.8.4  
any substitute basis agreed pursuant to Clause 6.8.3 shall be binding on all the
parties to this Agreement and shall apply to all Commitments; and
    6.8.5  
if, within thirty (30) days of the giving of the notice referred to in Clause
6.8.1, the Borrower and the Agent fail to agree in writing on a substitute basis
for determining the rate of interest, the Borrower will immediately prepay the
relevant Commitment, together with any Break Costs, and the remaining Repayment
Instalments shall be reduced pro rata.

  6.9  
Long Interest Periods The Borrower may request the Agent to arrange long
Interest Periods (for all or a substantial part of the Loan) of greater than
twelve (12) months’ duration. Any such request must be given at least
(5) Business Days prior to commencement of the Interest Period in question. The
Banks shall not be obliged to grant such long Interest Periods, but if they
elect to do so then the Interest Rate for such period shall be calculated as the
aggregate of (a) the Banks’ cost of funds for obtaining the relevant amount for
the relevant period and (b) the Margin.
    6.10  
Determinations conclusive Each determination of an interest rate made by the
Agent in accordance with Clause 6 shall (save in the case of manifest error or
on any question of law) be final and conclusive.

 

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7  
Fees

  7.1  
Fee Letter The Borrower shall pay to the Agent the fees, commissions and other
sums as set out in the Fee Letter.
    7.2  
Commitment commission The Borrower shall pay to the Agent for distribution to
the Banks a commitment commission calculated at the rate of zero point three per
centum (0.3%) per annum on the undrawn amount of the Commitment from time to
time from the date of this Agreement to the earlier to occur of the final
Advance Date and the final Availability Termination Date, both dates inclusive.
The Commitment Commission will accrue from day to day on the basis of a 360 day
year and the actual number of days elapsed, and shall be paid quarterly (at the
same time as payment of interest pursuant to Clause 6.5) in arrears with a final
pro rata payment on the earlier to occur of the final Advance Date and the final
Availability Termination Date.

8  
Security Documents
     
As security for the repayment of the Indebtedness, the Borrower shall execute
and deliver to the Agent or cause to be executed and delivered to the Agent, on
or before the first Advance Date (or, in respect of the documents listed at 8.1,
8.2 and 8.5, the relevant Advance Date), the following Security Documents:-

  8.1  
the Mortgages a first priority mortgage together with collateral deed of
covenants thereto over each Vessel;
    8.2  
the Assignments a deed of assignment of the Insurances, Earnings, Requisition
Compensation and CoA Rights in respect of each Vessel;
    8.3  
the Accounts Security Deed an account security deed in respect of all amounts
from time to time standing to the credit of each Account;
    8.4  
the Guarantee the guarantee and indemnity of the Guarantor; and
    8.5  
the Managers’ Undertakings an undertaking from the Managers relating to each
Vessel.

 

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9  
Agency and Trust

  9.1  
Appointment Each of the Banks appoints the Agent its agent for the purpose of
administering the Loan and the Security Documents.
    9.2  
Authority Each of the Banks irrevocably authorises the Agent (subject to Clauses
9.4 and 9.19):-

  9.2.1  
to execute the Security Documents (other than this Agreement) on its behalf;
    9.2.2  
to collect, receive, release or pay any money on its behalf;
    9.2.3  
acting on the instructions from time to time of an Instructing Group to give or
withhold any waivers, consents or approvals under or pursuant to any of the
Security Documents;
    9.2.4  
acting on the instructions from time to time of the Instructing Group to
exercise, or refrain from exercising, any discretions under or pursuant to any
of the Security Documents; and
    9.2.5  
to enforce the Security Documents on its behalf.

The Agent shall have no duties or responsibilities as agent or as security
trustee other than those expressly conferred on it by the Security Documents and
shall not be obliged to act on any instructions from the Banks or an Instructing
Group if to do so would, in the opinion of the Agent, be contrary to any
provision of the Security Documents or to any law, or would expose the Agent to
any actual or potential liability to any third party.

 

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  9.3  
Trust The Agent agrees and declares, and each of the Banks acknowledges, that,
subject to the terms and conditions of this Clause, the Agent holds the Trust
Property on trust for the Banks, in accordance with their respective
Proportionate Shares absolutely. Each of the Banks agrees that the obligations,
rights and benefits vested in the Agent in its capacity as security trustee
shall be performed and exercised in accordance with this Clause. The Agent in
its capacity as security trustee shall have the benefit of all of the provisions
of this Agreement benefiting it in its capacity as agent for the Banks, and all
the powers and discretions conferred on trustees by the Trustee Act 1925 (to the
extent not inconsistent with this Agreement). In addition:-

  9.3.1  
the Agent (and any attorney, agent or delegate of the Agent) may indemnify
itself or himself out of the Trust Property against all liabilities, costs,
fees, damages, charges, losses and expenses sustained or incurred by it or him
in relation to the taking or holding of any of the Trust Property or in
connection with the exercise or purported exercise of the rights, trusts, powers
and discretions vested in the Agent or any other such person by or pursuant to
the Security Documents or in respect of anything else done or omitted to be done
in any way relating to the Security Documents unless such liabilities, costs,
fees, damages, charges, changes, losses and expenses arise from the Agent’s
wilful misconduct or gross negligence; and
    9.3.2  
the Banks acknowledge that the Agent shall be under no obligation to insure any
property nor to require any other person to insure any property and shall not be
responsible for any loss which may be suffered by any person as a result of the
lack or insufficiency of any insurance; and
    9.3.3  
the Agent and the Banks agree that the perpetuity period applicable to the
trusts declared by this Agreement shall be the period of eighty years from the
date of this Agreement.

  9.4  
Limitations on authority Except with the prior written consent of each of the
Banks, the Agent shall not be entitled to:-

  9.4.1  
release or vary any security given for the Borrower’s obligations under this
Agreement; nor
    9.4.2  
waive the payment of any sum of money payable by any of the Security Parties
under the Security Documents; nor
    9.4.3  
change the meaning of the expressions “Instructing Group” or “Margin”; nor
    9.4.4  
exercise, or refrain from exercising, any discretion, or give or withhold any
consent, the exercise or giving of which is, by the terms of this Agreement,
expressly reserved to the Banks; nor

 

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  9.4.5  
extend the due date for the payment of any sum of money payable by any of the
Security Parties under the Security Documents; nor
    9.4.6  
take or refrain from taking any step if the effect of such action or inaction
may lead to the increase of the obligations of a Bank under any of the Security
Documents; nor
    9.4.7  
agree to change the currency in which any sum is payable under the Security
Documents (other than in accordance with the terms of the Security Documents);
nor
    9.4.8  
agree to amend this Clause 9.4.

  9.5  
Liability Neither the Agent nor any of its directors, officers, employees or
agents shall be liable to the Banks for anything done or omitted to be done by
the Agent under or in connection with the Security Documents unless as a result
of the Agent’s wilful misconduct or gross negligence.
    9.6  
Acknowledgement Each of the Banks acknowledges that:-

  9.6.1  
it has not relied on any representation made by the Agent or any of the Agent’s
directors, officers, employees or agents or by any other person acting or
purporting to act on behalf of the Agent to induce it to enter into any of the
Security Documents;
    9.6.2  
it has made and will continue to make without reliance on the Agent, and based
on such documents and other evidence as it considers appropriate, its own
independent investigation of the financial condition and affairs of the Security
Parties in connection with the making and continuation of the Loan;
    9.6.3  
it has made its own appraisal of the creditworthiness of the Security Parties;
    9.6.4  
the Agent shall not have any duty or responsibility at any time to provide it
with any credit or other information relating to any of the Security Parties
unless that information is received by the Agent pursuant to the express terms
of the Security Documents.

Each of the Banks agrees that it will not assert nor seek to assert against any
director, officer, employee or agent of the Agent or against any other person
acting or purporting to act on behalf of the Agent any claim which it might have
against them in respect of any of the matters referred to in this Clause.

 

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  9.7  
Limitations on responsibility The Agent shall have no responsibility to any of
the Security Parties or to the Banks on account of:-

  9.7.1  
the failure of a Bank or of any of the Security Parties to perform any of their
respective obligations under the Security Documents;
    9.7.2  
the financial condition of any of the Security Parties;
    9.7.3  
the completeness or accuracy of any statements, representations or warranties
made in or pursuant to any of the Security Documents, or in or pursuant to any
document delivered pursuant to or in connection with any of the Security
Documents;
    9.7.4  
the negotiation, execution, effectiveness, genuineness, validity,
enforceability, admissibility in evidence or sufficiency of any of the Security
Documents or of any document executed or delivered pursuant to or in connection
with any of the Security Documents.

  9.8  
The Agent’s rights The Agent may:-

  9.8.1  
assume that all representations or warranties made or deemed repeated by any of
the Security Parties in or pursuant to any of the Security Documents are true
and complete, unless, in its capacity as the Agent, it has acquired actual
knowledge to the contrary; and
    9.8.2  
assume that no Event of Default or Potential Event of Default has occurred
unless, in its capacity as the Agent, it has acquired actual knowledge to the
contrary; and
    9.8.3  
rely on any document or Communication reasonably believed by it to be genuine;
and
    9.8.4  
rely as to legal or other professional matters on opinions and statements of any
legal or other professional advisers selected or approved by it; and

 

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  9.8.5  
rely as to any factual matters which might reasonably be expected to be within
the knowledge of any of the Security Parties on a certificate signed by or on
behalf of that Security Party; and
    9.8.6  
refrain from exercising any right, power, discretion or remedy unless and until
instructed to exercise that right, power, discretion or remedy and as to the
manner of its exercise by the Banks (or, where applicable, by an Instructing
Group) and unless and until the Agent has received from the Banks any payment
which the Agent may require on account of, or any security which the Agent may
require for, any costs, claims, expenses (including legal and other professional
fees) and liabilities which it considers it may incur or sustain in complying
with those instructions.
    9.8.7  
request a Bank to transfer its rights and/or obligations under or pursuant to
this Agreement to another bank or financial institution if at any time during
the Facility Period there is a conflict between the Agent and that Bank.

  9.9  
The Agent’s duties The Agent shall:-

  9.9.1  
if requested in writing to do so by a Bank, make enquiry and advise the Banks as
to the performance or observance of any of the provisions of the Security
Documents by any of the Security Parties or as to the existence of an Event of
Default;
    9.9.2  
inform the Banks promptly of any Event of Default of which the Agent has actual
knowledge; and
    9.9.3  
promptly forward to the Bank concerned the original or copy of any document
which is delivered to the Agent for that Bank.

  9.10  
No deemed knowledge The Agent shall not be deemed to have actual knowledge of
the falsehood or incompleteness of any representation or warranty made or deemed
repeated by any of the Security Parties or actual knowledge of the occurrence of
any Event of Default or Potential Event of Default unless a Bank or any of the
Security Parties shall have given written notice thereof to the Agent in its
capacity as the Agent. Any information acquired by the Agent other than
specifically in its capacity as the Agent shall not be deemed to be information
acquired by the Agent in its capacity as the Agent.

 

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  9.11  
Other business The Agent may, without any liability to account to the Banks,
generally engage in any kind of banking or trust business with any of the
Security Parties or any of their respective subsidiaries or associated companies
or with a Bank as if it were not the Agent.

  9.12  
Indemnity The Banks shall, promptly on the Agent’s request, reimburse the Agent
in their respective Proportionate Shares, for, and keep the Agent fully
indemnified in respect of:-

  9.12.1  
all amounts payable by the Borrower to the Agent pursuant to Clause 17 to the
extent that those amounts are not paid by the Borrower;

  9.12.2  
all liabilities, damages, costs and claims sustained or incurred by the Agent in
connection with the Security Documents, or the performance of its duties and
obligations, or the exercise of its rights, powers, discretions or remedies
under or pursuant to any of the Security Documents; or in connection with any
action taken or omitted by the Agent under or pursuant to any of the Security
Documents, unless in any case those liabilities, damages, costs or claims arise
solely from the Agent’s wilful misconduct or gross negligence.

  9.13  
Employment of agents In performing its duties and exercising its rights, powers,
discretions and remedies under or pursuant to the Security Documents, the Agent
shall be entitled to employ and pay agents to do anything which the Agent is
empowered to do under or pursuant to the Security Documents (including the
receipt of money and documents and the payment of money) and to act or refrain
from taking action in reliance on the opinion of, or advice or information
obtained from, any lawyer, banker, broker, accountant, valuer or any other
person believed by the Agent in good faith to be competent to give such opinion,
advice or information.

  9.14  
Distribution of payments The Agent shall pay promptly to the order of each of
the Banks that Bank’s Proportionate Share of every sum of money received by the
Agent pursuant to the Security Documents or the Mortgagees’ Insurances (with the
exception of any amounts payable pursuant to Clause 7 and/or the Fee Letter and
any amounts which, by the terms of the Security Documents, are paid to the Agent
for the account of the Agent alone or specifically for the account of one or
more Banks alone) and until so paid such amount shall be held by the Agent on
trust absolutely for that Bank.

 

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  9.15  
Reimbursement The Agent shall have no liability to pay any sum to a Bank until
it has itself received payment of that sum. If, however, the Agent does pay any
sum to a Bank on account of any amount prospectively due to that Bank pursuant
to Clause 9.14 before it has itself received payment of that amount, and the
Agent does not in fact receive payment within five Business Days after the date
on which that payment was required to be made by the terms of the Security
Documents or the Mortgagees’ Insurances, each Bank receiving any such payment
will, on demand by the Agent, refund to the Agent an amount equal to the amount
received by it, together with an amount sufficient to reimburse the Agent for
any amount which the Agent may certify that it has been required to pay by way
of interest on money borrowed to fund the amount in question during the period
beginning on the date on which that amount was required to be paid by the terms
of the Security Documents or the Mortgagees’ Insurances and ending on the date
on which the Agent receives reimbursement.

  9.16  
Redistribution of payments Unless otherwise agreed between the Banks and the
Agent, if at any time a Bank receives or recovers by way of set-off, the
exercise of any lien or otherwise (other than from any assignee or transferee of
or sub-participant in that Bank’s Commitment), an amount greater than that
Bank’s Proportionate Share of any sum due from any of the Security Parties under
the Security Documents (the amount of the excess being referred to in this
Clause as the “Excess Amount”) then:-

  9.16.1  
that Bank shall promptly notify the Agent (which shall promptly notify each
other Bank);

  9.16.2  
that Bank shall pay to the Agent an amount equal to the Excess Amount within ten
days of its receipt or recovery of the Excess Amount; and

  9.16.3  
the Agent shall treat that payment as if it were a payment by the Security Party
in question on account of the sum owed to the Banks as aforesaid and shall
account to the Banks in respect of the Excess Amount in accordance with the
provisions of this Clause.

However, if a Bank has commenced any Proceedings to recover sums owing to it
under the Security Documents and, as a result of, or in connection with, those
Proceedings has received an Excess Amount, the Agent shall not distribute any of
that Excess Amount to any other Bank which had been notified of the Proceedings
and had the legal right to, but did not, join those Proceedings or commence and
diligently prosecute separate Proceedings to enforce its rights in the same or
another court.

 

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  9.17  
Rescission of Excess Amount If all or any part of any Excess Amount is rescinded
or must otherwise be restored to any of the Security Parties or to any other
third party, the Banks which have received any part of that Excess Amount by way
of distribution from the Agent pursuant to this Clause shall repay to the Agent
for the account of the Bank which originally received or recovered the Excess
Amount, the amount which shall be necessary to ensure that the Banks share
rateably in accordance with their Proportionate Shares in the amount of the
receipt or payment retained, together with interest on that amount at a rate
equivalent to that (if any) paid by the Bank receiving or recovering the Excess
Amount to the person to whom that Bank is liable to make payment in respect of
such amount, and Clause 9.16.3 shall apply only to the retained amount.

  9.18  
Proceedings Each of the Banks and the Agent shall notify one another of the
proposed commencement of any Proceedings under any of the Security Documents
prior to their commencement.

  9.19  
Instructions Where the Agent is authorised or directed to act or refrain from
acting in accordance with the instructions of the Banks or of an Instructing
Group, each of the Banks shall provide the Agent with instructions within two
calendar weeks of the Agent’s request (which request may be made orally or in
writing). If a Bank does not provide the Agent with instructions within that
period, that Bank shall be bound by the decision of the Agent. Nothing in this
Clause shall limit the right of the Agent to take, or refrain from taking, any
action without obtaining the instructions of the Banks or an Instructing Group
if the Agent in its discretion considers that the situation is sufficiently
urgent and reasonably believes it necessary or appropriate to take, or refrain
from taking, such action in order to preserve the rights of the Banks under or
in connection with the Security Documents. In that event, the Agent will notify
the Banks of the action taken by it as soon as reasonably practicable, and the
Banks agree to ratify any action taken by the Agent pursuant to this Clause.

  9.20  
Communications Any Communication under this Clause shall be given, delivered,
made or served, in the case of the Agent (in its capacity as Agent or as one of
the Banks), and in the case of the other Banks, at the address or fax number
indicated in Schedule 1.

 

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  9.21  
Payments All amounts payable to a Bank under this Clause shall be paid to such
account at such bank as that Bank may from time to time direct in writing to the
Agent.

  9.22  
Retirement Subject to a successor being appointed in accordance with this
Clause, the Agent may retire as agent and/or security trustee at any time
without assigning any reason by giving to the Borrower and the Banks notice of
its intention to do so, in which event the following shall apply:-

  9.22.1  
the Banks may within thirty days after the date of the Agent’s notice appoint a
successor to act as agent and/or security trustee or, if they fail to do so, the
Agent may appoint any other bank or financial institution as its successor, in
each case with the consent of the Borrower in the absence of a continuing Event
of Default;

  9.22.2  
the resignation of the Agent shall take effect simultaneously with the
appointment of its successor (and acceptance of such appointment by its
successor) on written notice of that appointment and acceptance being given to
the Borrower and the Banks;

  9.22.3  
the Agent shall thereupon be discharged from all further obligations as agent
and/or security trustee but shall remain entitled to the benefit of the
provisions of this Clause;

  9.22.4  
the Agent’s duly appointed successor and each of the other parties to this
Agreement shall have the same rights and obligations amongst themselves as they
would have had if that successor had been a party to this Agreement.

  9.23  
No fiduciary relationship Except as provided in Clauses 9.3 and 9.14, the Agent
shall not have any fiduciary relationship with or be deemed to be a trustee of
or for a Bank and nothing contained in any of the Security Documents shall
constitute a partnership between any two or more Banks or between the Agent and
any Bank.

 

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  9.24  
The Agent as a Bank The expression “the Banks” when used in the Security
Documents includes the Agent in its capacity as one of the Banks. The Agent
shall be entitled to exercise its rights, powers, discretions and remedies under
or pursuant to the Security Documents in its capacity as one of the Banks in the
same manner as any other Bank and as if it were not also the Agent.

  9.25  
The Agent as security trustee Unless the context otherwise requires, the
expression “the Agent” when used in the Security Documents includes the Agent
acting in its capacities both as agent and security trustee.

10  
Covenants

  10.1  
Negative covenants
       
The Borrower will not without the Agent’s prior written consent (which consent
will not be unreasonably withheld or delayed in the case of Clauses 10.1.2,
10.1.4, 10.1.6, 10.1.7, 10.1.10, 10.1.12 or 10.1.13):-

  10.1.1  
no disposals or third party rights other than the Permitted Encumbrances,
dispose of or create or permit to arise or continue any Encumbrance or other
third party right on or over all or any part of the Vessels or any other present
or future assets or undertaking pledged to the Banks (or to the Agent on the
Banks’ behalf) pursuant to the Security Documents; nor

  10.1.2  
no borrowings other than in the ordinary course of business borrow any money or
incur any obligations under leases; nor

  10.1.3  
no repayments repay any loans made to it other than the Loan, during the
continuance of an Event of Default or if notice of repayment is not given to the
Agent; nor

  10.1.4  
no substantial liabilities except in the ordinary course of business, incur any
liability to any third party which is in the opinion of the Agent of a
substantial nature; nor

  10.1.5  
no other business engage to any material extent in any business other than the
ownership, operation, chartering and management of the Vessels and other vessels
and businesses reasonably related thereto; nor

 

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  10.1.6  
transactions with affiliates other than transactions reasonably entered into in
the ordinary course of business, enter into any transactions with other
companies in the Group; nor

  10.1.7  
no loans or other financial commitments except in the ordinary course of
business, make any loan nor enter into any guarantee or indemnity or otherwise
voluntarily assume any actual or contingent liability in respect of any
obligation of any other person (other than loans to companies within the Group);
nor

  10.1.8  
no dividends at any time following an Event of Default which has not been cured
or whilst a breach of covenant hereunder remains uncured, pay any dividends or
make any other distributions of a revenue or capital nature to shareholders; nor

  10.1.9  
no sale of Vessels sell or otherwise dispose of the Vessels or any shares in the
Vessels nor agree to do so, unless if the Borrower complies with Clause 5.6; nor

  10.1.10  
chartering charter a Vessel other than to a first class charterer, or enter into
any bareboat charter, or time charter of more than twelve months’ duration; nor

  10.1.11  
no chartering after Event of Default during the continuation of an Event of
Default let any Vessel on charter (other than a pre-existing charter) or renew
or extend any charter or other contract of employment of a Vessel (nor agree to
do so); nor

  10.1.12  
no change in management appoint anyone other than the Managers as commercial or
technical managers of the Vessels, nor terminate or materially vary the
arrangements for the commercial or technical management of the Vessels, nor
permit the Managers to sub-contract or delegate the commercial or technical
management of the Vessels to any third party; nor

  10.1.13  
no purchase of additional vessels purchase nor agree to purchase any additional
vessels.

 

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  10.2  
Positive covenants

  10.2.1  
Registration of Vessels The Borrower undertakes to maintain the registration of
the Vessels under the Bermuda flag or any other flag reasonably acceptable to
the Agent for the duration of the Facility Period.

  10.2.2  
Additional security If and so often as the aggregate of the Valuations of the
Vessels plus the value of any additional security for the time being provided to
the Banks (or to the Agent on their behalf) pursuant to this Clause shall be
less than one hundred and twenty five per centum (125%) of the amount of the
Loan (the “Relevant Percentage”), the Borrower will, within thirty days of the
request of the Agent to do so, at the Borrower’s option:-

  (a)  
pay to the Agent or to its nominee a cash deposit in the amount of the shortfall
to be secured in favour of the Banks or the Agent on their behalf as additional
security for the payment of the Indebtedness; or
    (b)  
give to the Banks or the Agent on their behalf other additional security in
amount and form reasonably acceptable to the Agent in its discretion; or
    (c)  
prepay the amount of the Indebtedness which will ensure that the aggregate of
the Valuations of the Vessels plus the value of any such additional security is
not less than the Relevant Percentage of the amount of the Loan.

Clauses 5.4, 5.5, 5.6 and 5.7 shall apply, mutatis mutandis, to any prepayment
made pursuant to this Clause and the value of any additional security provided
pursuant to this Clause shall be determined by the Agent in its reasonable
discretion.

 

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  10.2.3  
Financial statements The Borrower will supply to the Agent, without request, the
semi-annual unaudited management accounts of the Borrower for each six month
period ending on 30 June and 31 December in each year during the Facility
Period, containing (amongst other things) the Borrower’s profit and loss account
for, and balance sheet at the end of, each such financial period, prepared in
accordance with generally accepted accounting principles and practices
applicable to companies incorporated in the United States of America
consistently applied, in each case within one hundred and eighty (180) days of
the end of the financial half year to which they relate. Such annual financial
statements are to be accompanied by updated details of all off balance sheet and
time charter hire commitments.

  10.2.4  
Other information The Borrower will promptly supply to the Agent such
information and explanations as the Agent may from time to time reasonably
require in connection with the operation of the Vessels and the Borrower’s
profit and liquidity, and will procure that the Agent be given the like
information and explanations relating to all other Security Parties.

  10.2.5  
Evidence of goodstanding The Borrower will from time to time on the request of
the Agent provide the Agent with evidence in form and substance reasonably
satisfactory to the Agent that the Security Parties remain in good standing.

  10.2.6  
Evidence of current COFR Without limiting the Borrower’s obligations under
Clause 10.2.4, the Borrower will from time to time on the request of the Agent
provide the Agent with such evidence as the Banks may reasonably require that
the Vessels have a valid and current Certificate of Financial Responsibility
pursuant to the United States Oil Pollution Act 1990.

  10.2.7  
ISM Code compliance The Borrower will:-

  (a)  
procure that the Vessels remain for the duration of the Facility Period subject
to a SMS;

  (b)  
maintain a valid and current SMC for the Vessels throughout the Facility Period;

  (c)  
if not itself the ISM Company, procure that the ISM Company maintains a valid
and current DOC throughout the Facility Period;

 

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  (d)  
promptly notify the Agent in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of any Vessel’s SMC or of the ISM
Company’s DOC;

  (e)  
promptly notify the Agent in writing of any “accident” or “major
non-conformity”, as each of those terms is defined in the Guidelines on the
Implementation of the International Safety Management Code by Administrations
adopted by the Assembly of the International Maritime Organisation pursuant to
Resolution A.788(19), affecting a Vessel and of the steps being taken to remedy
the situation; and

  (f)  
not without the prior written consent of the Agent (which will not be
unreasonably withheld) change the identity of the ISM Company,

PROVIDED ALWAYS that the provisions of this Clause only apply to Vessel B
following its Delivery.

  10.2.8  
ISPS Code compliance The Borrower will:-

  (a)  
for the duration of the Facility Period comply with the ISPS Code in relation to
each of the Vessels and procure that each of the Vessels and the ISPS Company
comply with the ISPS Code;

  (b)  
maintain a valid and current ISSC for each of the Vessels throughout the
Facility Period and provide a copy to the Agent; and

  (c)  
promptly notify the Agent in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the ISSC,

PROVIDED ALWAYS that the provisions of this Clause only apply to Vessel B
following its Delivery.

 

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  10.2.9  
Annex VI compliance The Borrower will:

  (a)  
for the duration of the Facility Period comply with Annex VI in relation to each
Vessel and procure that each Vessel’s master and crew are familiar with, and
that each Vessel complies with, Annex VI;
    (b)  
maintain a valid and current IAPPC for each of the Vessels throughout the
Facility Period and provide a copy to the Agent; and

  (c)  
promptly notify the Agent in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the IAPPC,

PROVIDED ALWAYS that the provisions of this Clause only apply to Vessel B
following its Delivery.

  10.2.10  
Inspection of records The Borrower will permit the inspection of its financial
records and accounts from time to time by the Agent or its nominee during normal
business hours PROVIDED ALWAYS that the Agent will give the Borrower three
(3) Business Days prior written notice of its intention to inspect the records
and will use its reasonable endeavours to ensure that the inspection causes as
little unnecessary disruption to the Borrower’s business operations as possible,
provided however that, save if a continuing Event of Default is in existence,
such inspections shall not occur more than twice in any calendar year.

  10.2.11  
Pari passu obligations The Borrower will ensure that, throughout the Facility
Period, the obligations of the Borrower under or pursuant to the Security
Documents rank at least pari passu with all other existing or future
indebtedness, obligations or liabilities of the Borrower, other than any
mandatorily preferred by law.

  10.2.12  
Notification of Event of Default The Borrower will promptly notify the Agent in
writing of the occurrence of any Event of Default or Potential Event of Default.

  10.2.13  
Class The Borrower will ensure that each Vessel maintains highest class, free of
recommendations and qualifications affecting class unless otherwise agreed by
the Agent in writing, and will notify the Agent of the class notation and the
classification society for Vessel B at least fifteen days prior to the Tranche B
Advance Date.

 

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  10.3  
Financial covenants The Borrower covenants that, throughout the Facility Period
(with such covenants being assessed on a group basis to include all subsidiaries
of the Borrower whose results are consolidated into the results of the
Borrower):-

  10.3.1  
its Market Adjusted Net Worth will be, at all times, at least fifty five million
Dollars ($55,000,000);
    10.3.2  
its ratio of Borrowings to Value Adjusted Equity shall not exceed 2.5:1;

  10.3.3  
it will maintain Cash Reserves equal to the higher of (a) four million Dollars
($4,000,000) and (b) five per cent (5%) of its bank debt; and

  10.3.4  
its ratio of EBITDA to Debt Service will be not less than 1:1.

  10.4  
Compliance certificate The Borrower covenants, on a semi annual basis, to
deliver to the Agent a compliance certificate substantially in the form of
Schedule 5, duly signed by a director of the Borrower, evidencing compliance
with the covenants contained in clause 10.3.

11  
Earnings Account

  11.1  
Maintenance of Accounts The Borrower shall maintain the Accounts with the
Account Holder for the duration of the Facility Period free of Encumbrances and
rights of set off other than as created by or pursuant to the Security
Documents.

  11.2  
Earnings The Borrower shall procure that there is credited to the Earnings
Account all Earnings and any Requisition Compensation in respect of each Vessel.

  11.3  
Transfers to Retention Account On the day in each calendar month during the
Facility Period which numerically corresponds to the Advance Date for each
Tranche (or, in any month in which there is no such day, on the last Business
Day of that month), the Borrower shall procure that there is transferred from
the Earnings Account and irrevocably authorises the Agent to instruct the
Account Holder to transfer from the Earnings Account to the Retention Account:-

  11.3.1  
one-third of the amount of the Repayment Instalment due on the next Repayment
Date in respect of that Tranche; and

  11.3.2  
the amount of interest due in respect of that Tranche on the next Interest
Payment Date divided by the number of months between the last Interest Payment
Date and the Interest Payment Date in question.

 

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  11.4  
Additional payments to Retention Account If for any reason the amount standing
to the credit of the Earnings Accounts shall be insufficient to make any
transfer to the Retention Account required by Clause 11.3, the Borrower shall,
without demand, procure that there is credited to the Retention Account, on the
date on which the relevant amount would have been transferred from the Earnings
Account, an amount equal to the amount of the shortfall.

  11.5  
Application of Retention Account The Borrower shall procure that there is
transferred from the Retention Account and irrevocably authorises the Agent to
instruct the Account Holder to transfer from the Retention Account to the Agent
on behalf of the Banks:-

  11.5.1  
on each Repayment Date, the amount of the Repayment Instalment then due in
respect of each Tranche; and

  11.5.2  
on each Interest Payment Date, the amount of interest then due in respect of
each Tranche.

  11.6  
Borrower’s obligations not affected If for any reason the amount standing to the
credit of the Retention Account shall be insufficient to pay any Repayment
Instalment or to make any payment of interest when due, the Borrower’s
obligation to pay that Repayment Instalment or to make that payment of interest
shall not be affected.

  11.7  
Release of surplus Any amount standing to the credit of the Earnings Account
shall (unless an Event of Default or Potential Event of Default shall have
occurred and be continuing) be released to or to the order of the Borrower.

  11.8  
Relocation of Accounts At any time during the continuation of an Event of
Default, the Agent may without the consent of the Borrower relocate the
Accounts, without prejudice to the continued application of this Clause and the
rights of the Banks under or pursuant to the Security Documents. Following the
cure of any such Event of Default pursuant to which the Accounts were relocated
by the Agent, the Borrower may request, but the Agent shall not be obliged, to
restore the Accounts to the Account Holder.

 

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  11.9  
Access to information Subject to Clause 18.20, the Borrower agrees that the
Agent (and its nominees) may from time to time during the Facility Period (and
in the case of the Earning Account after having given three (3) Business Days
notice to the Borrower of its intention to do so) review the records held by the
Account Holder (whether in written or electronic form) in relation to the
Accounts, and irrevocably waives any right of confidentiality which may exist in
relation to those records.

  11.10  
Statements Without prejudice to the rights of the Agent under Clause 11.9, the
Borrower will procure that the Account Holder provides to the Agent, no less
frequently than each calendar month during the Facility Period, written
statements of account showing all entries made to the credit and debit of each
of the Accounts during the immediately preceding calendar month.

12  
Events of Default and Application of Monies

  12.1  
The Agent’s rights If any of the events set out in Clause 12.2 occurs, the Agent
may (and, if instructed to do so by an Instructing Group, shall) by notice to
the Borrower declare the Banks to be under no further obligation to the Borrower
under or pursuant to this Agreement and may (and, if instructed to do so by an
Instructing Group, shall) declare all or any part of the Indebtedness (including
such unpaid interest as shall have accrued) to be immediately payable, in which
event the Indebtedness (or the part of the Indebtedness referred to in the
Agent’s notice) shall immediately become due and payable without any further
demand or notice of any kind.

12.2 Events of Default The events referred to in Clause 12.1 are:-

  12.2.1  
payment default if the Borrower defaults in the payment of any part of the
Indebtedness when due PROVIDED ALWAYS that if the Borrower can demonstrate to
the satisfaction of the Agent that it has given all necessary instructions to
effect payment and the non-receipt thereof is attributable to an error in the
banking system, such Event of Default shall only occur two (2) Business Days
after payment fell due; or

  12.2.2  
other default if any of the Security Parties fails to observe or perform any of
the covenants, conditions, undertakings, agreements or obligations on its part
contained in any of the Security Documents (and, if such breach is in the
reasonable opinion of the Agent remediable and does not in any way relate either
to (i) the insurances or (ii) the covenants of the Borrower contained in clause
10.2.2 or clause 10.3, it remains unremedied for a period of twenty (20)
Business Days) or shall in any other way be in breach of or do or cause to be
done any act repudiating or evidencing an intention to repudiate any of the
Security Documents in each case after notice to the Borrower; or

 

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  12.2.3  
misrepresentation or breach of warranty if any representation or warranty made
or repeated, or any other written information given, by any of the Security
Parties to the Banks or to the Agent in or leading up to or during the currency
of any of the Security Documents, or in or pursuant to any notice or other
document delivered to the Agent under or pursuant to any of the Security
Documents, shall prove to have been false or incorrect or misleading in any
material respect when made, repeated or given and is detrimental to the Agent
and/or the Banks, and such misrepresentation remains uncured for a period of
fifteen (15) Business Days after notice from the Agent; or

  12.2.4  
execution if a distress or execution or other process of a court or authority is
levied on any of the property of any of the Security Parties before or after
final judgment or by order of any competent court or authority and is not
satisfied within seven days of levy and a Material Adverse Effect results; or

  12.2.5  
ceasing to trade if any of the Security Parties ceases trading or threatens to
cease trading; or

  12.2.6  
insolvency proceedings

  (i)  
if any Security Party shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganisation, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts generally, or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of
its assets, or any Security Party shall make a general assignment for the
benefit of its creditors; or

  (ii)  
if there shall be a commenced against any Security Party any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded or unstayed for a period of 60
days; or

 

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  (iii)  
if there shall be commenced against any Security Party any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or

  (iv)  
if any Security Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii) or (iii) above; or

  (v)  
if any Security Party shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts generally as they become due; or

  12.2.7  
impossibility or illegality if any event occurs which would, or would with the
passage of time, render performance of any of the Security Documents by any of
the Security Parties impossible, unlawful or unenforceable by the Banks or the
Agent; or

  12.2.8  
conditions subsequent if any of the conditions set out in Clause 3.3 is not
satisfied within the time reasonably required by the Agent; or

 

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  12.2.9  
revocation or modification of consents etc. if any consent, licence, approval,
authorisation, filing, registration or other requirement of any governmental,
judicial or other public body or authority which is now, or which at any time
during the Facility Period becomes, necessary to enable any of the Security
Parties to comply with any of their obligations in or pursuant to any of the
Security Documents is not obtained or is revoked, suspended, withdrawn or
withheld, or is modified in a manner which is materially prejudicial to the
interests of the Banks; or

  12.2.10  
curtailment of business if the business of any of the Security Parties is wholly
or partially curtailed or suspended by any intervention by or under authority of
any government, or if all or a substantial part of the undertaking, property or
assets of any of the Security Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any government and such event
would, or would be likely to, have a Material Adverse Effect; or

  12.2.11  
loss of Vessel if any Vessel or any other vessel which may from time to time be
mortgaged to the Banks (or to the Agent on their behalf) as security for the
repayment of all or any part of the Indebtedness is destroyed, abandoned,
confiscated, forfeited, condemned as prize or becomes a Total Loss, except that
none of the foregoing shall be an Event of Default if:-

  (a)  
the Vessel or other vessel is insured in accordance with the Security Documents;
and

  (b)  
no insurer has refused to meet or has disputed the claim with respect to such
event or any such refusal or dispute that does arise is resolved within thirty
(30) days from the date on which the claim is made; and

  (c)  
payment of all insurance proceeds in respect thereof is made in full to the
Agent on behalf of the Banks within thirty days from the date upon which leading
underwriters agree to settle the claim or such longer period as the Agent may in
its reasonable discretion agree; or

 

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  12.2.12  
arrest or detention of Vessel if any Vessel or any other vessel which may from
time to time be mortgaged to the Banks (or to the Agent on their behalf) as
security for repayment of all or any part of the Indebtedness is arrested or
detained and is not released within twenty (20) Business Days; or

  12.2.13  
acceleration of other indebtedness (a) if any other material financial
indebtedness or obligation for borrowed money (which shall include obligations
under capitalized leases, foreign exchange contracts or other derivatives
contracts) of a Security Party becomes due prior to its stated maturity by
reason of default on the part of that Security Party, provided always that this
shall only constitute an Event of Default in respect of the Guarantor if it is
for a principal amount in excess of fifty million Dollars ($50,000,000); or

  12.2.14  
challenge to registration if the registration of any Vessels or the Mortgage is
contested by the Borrower, the Guarantor or a company within the Group, or
becomes void or terminated, or if the validity or priority of the Mortgage is
contested; or

  12.2.15  
war if the country of registration of the Vessels becomes involved in war
(whether or not declared) or civil war or is occupied by any other power and the
Agent in its reasonable discretion considers that, as a result, the security
conferred by the Security Documents is materially prejudiced; or

  12.2.16  
notice of termination if the Guarantor gives notice to the Agent to limit its
obligations under the Guarantee; or

  12.2.17  
material adverse change etc. if there occurs (in the opinion of the Agent acting
reasonably) any material adverse change in the business, affairs or financial
condition of the Guarantor (considered together with its Subsidiaries) or the
Borrower from that pertaining at the date of this Agreement which jeopardises
their ability to meet their respective obligations under the Security Documents
as they fall due; or

 

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  12.2.18  
change of control if any Change of Control occurs; or

  12.2.19  
CoAs if any of the CoAs is terminated by reason of default by the Borrower
during the Facility Period; or

  12.2.20  
analogous events if any event which is analogous to any of the events set out in
Clauses 12.2.4 or 12.2.6 above shall occur.

  12.3  
Application of moneys The Agent is irrevocably authorised to apply all sums
which it may receive:

  12.3.1  
pursuant to a sale or other disposition of a Vessel or any right, title or
interest in a Vessel; or

  12.3.2  
by way of payment of any sum in respect of the Insurances, Earnings or
Requisition Compensation; or

12.3.3 otherwise arising under or in connection with any Security Document,
in accordance with Clause 5.6 (if relevant) or otherwise in or towards
satisfaction, or by way of retention on account, of the Indebtedness as
follows:-

  (i)  
first in payment of all outstanding fees and expenses of the Agent;

  (ii)  
secondly in or towards payment of all outstanding interest hereunder;

  (iii)  
thirdly in or towards payment of all outstanding principal hereunder;

  (iv)  
fourthly in or towards payment of all other Indebtedness hereunder; and

  (v)  
fifthly the balance, if any, shall be remitted to the Borrower or whoever may be
entitled thereto.

 

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13  
Set-Off and Lien

  13.1  
Set-off The Borrower irrevocably authorises the Agent and the Banks at any time
after all or any part of the Indebtedness shall have become due and payable to
set off without notice any liability of the Borrower to any of the Banks or the
Agent (whether present or future, actual or contingent, and irrespective of the
branch or office, currency or place of payment) against any credit balance from
time to time standing on any account of the Borrower (whether current or
otherwise and whether or not subject to notice) with any branch of the Agent or
that Bank in or towards satisfaction of the Indebtedness and, in the name of the
Agent or that Bank or the Borrower, to do all acts (including, without
limitation, converting or exchanging any currency) and execute all documents
which may be required to effect such application.

  13.2  
Lien The Agent and each Bank shall have a lien on and be entitled to retain and
realise as additional security for the repayment of the Indebtedness any
cheques, drafts, bills, notes or negotiable or non-negotiable instruments and
any stocks, shares or marketable or other securities and property of any kind of
the Borrower (or of the Agent or that Bank as agent or nominee of the Borrower)
from time to time held by the Agent or that Bank, whether for safe custody or
otherwise.

  13.3  
Restrictions on withdrawal Despite any term to the contrary in relation to any
deposit or credit balance at any time on any account of the Borrower with the
Agent or with any of the Banks, no such deposit or balance shall be repayable or
capable of being assigned, mortgaged, charged or otherwise disposed of or dealt
with by the Borrower during the Facility Period except in accordance with the
Security Documents, but the Agent or any Bank may from time to time permit the
withdrawal of all or any part of any such deposit or balance without affecting
the continued application of this Clause.

 

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14  
Assignment and Sub-Participation

  14.1  
Right to assign Subject to the prior written consent of the Borrower, such
consent not to be unreasonably withheld or delayed, each of the Banks may assign
or transfer all or any of its rights under or pursuant to the Security Documents
to any other branch of that Bank or to any other bank or financial institution,
and may grant sub-participations in all or any part of its Commitment provided
that the Agent’s prior written approval has been obtained.

  14.2  
Borrower’s co-operation The Borrower will co-operate fully with the Banks in
connection with any assignment, transfer or sub-participation permitted by this
Agreement; will execute and procure the execution of such documents as the Banks
may reasonably require in connection therewith; and irrevocably authorises the
Agent to sign any Transfer Certificate on its behalf in connection with such an
assignment, transfer or sub-participation; and, subject to Clause 18.20,
irrevocably authorises the Agent and the Banks to disclose to any proposed
assignee, transferee or sub-participant (whether before or after any assignment,
transfer or sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the Security
Parties, the Loan or the Security Documents which the Agent or that Bank may in
its discretion consider necessary or desirable.

  14.3  
Rights of assignee Any permitted assignee or transferee of a Bank shall (unless
limited by the express terms of the assignment or transfer) take the full
benefit of every provision of the Security Documents benefiting that Bank.

  14.4  
Transfer Certificates If any Bank wishes to transfer any of its rights and/or
obligations under or pursuant to this Agreement, it may do so in accordance with
the other terms of this Agreement by delivering to the Agent a duly completed
Transfer Certificate, in which event on the Transfer Date:-

  14.4.1  
to the extent that that Bank seeks to transfer its rights and/or obligations,
the Borrower (on the one hand) and the Bank in question (on the other) shall be
released from all further obligations towards the other(s);

  14.4.2  
the Borrower (on the one hand) and the Transferee (on the other) shall assume
obligations towards the other(s) identical to those released pursuant to Clause
14.4.1;

  14.4.3  
the Agent, each of the Banks and the Transferee shall have the same rights and
obligations between themselves as they would have had if the Transferee had been
an original party to this Agreement as a Bank; and

  14.4.4  
the Transferee shall pay to the Agent for its own account a transfer fee of five
thousand Dollars.

Each Bank and the Borrower irrevocably authorises the Agent to sign on its
behalf any Transfer Certificate relating to the permitted transfer of any of the
rights and/or obligations of any other Bank.

 

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  14.5  
Security Documents Unless otherwise expressly provided in any Security Document
or otherwise expressly agreed between a Bank and any proposed Transferee and
notified by that Bank to the Agent on or before the relevant Transfer Date,
there shall automatically be assigned to the Transferee with any transfer of a
Bank’s rights and/or obligations under or pursuant to this Agreement the rights
of that Bank under or pursuant to the Security Documents (other than this
Agreement) which relate to the portion of the Bank’s rights and/or obligations
transferred by the relevant Transfer Certificate.

  14.6  
No increased costs Notwithstanding any other provision of this Agreement or any
other Security Document no assignment or transfer by a Bank of all or any of its
interest in the Loan, and no grant by a Bank of a sub-participation in the Loan,
shall increase the obligations of the Borrower under any Security Document or
subject the Borrower to any increased or additional tax, cost or liability under
any Security Document, determined by reference to the laws in effect at the time
of such assignment, transfer or grant of a sub-participation.

15  
Payments, Mandatory Prepayment, Reserve Requirements and Illegality

  15.1  
Payments All amounts payable by the Borrower under or pursuant to any of the
Security Documents shall be paid to such accounts at such banks as the Agent may
from time to time direct to the Borrower, and (unless payable in any other
Currency of Account) shall be paid in Dollars in same day funds (or such funds
as are required by the authorities in the United States of America for
settlement of international payments for immediate value). Payments shall be
deemed to have been received by the Agent on the date on which the Agent
receives authenticated advice of receipt, unless that advice is received by the
Agent on a day other than a Business Day or at a time of day (whether on a
Business Day or not) when the Agent in its discretion considers that it is
impossible or impracticable for the Agent to utilise the amount received for
value that same day, in which event the payment in question shall be deemed to
have been received by the Agent on the Business Day next following the date of
receipt of advice by the Agent.

  15.2  
No deductions or withholdings All payments (whether of principal or interest or
otherwise) to be made by the Borrower pursuant to the Security Documents shall,
subject only to Clause 15.3, be made free and clear of and without deduction for
or on account of any Taxes or other deductions, withholdings, restrictions,
conditions or counterclaims of any nature.

 

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  15.3  
Grossing-up If at any time any law requires (or is interpreted to require) the
Borrower to make any deduction or withholding from any payment, or to change the
rate or manner in which any required deduction or withholding is made, the
Borrower will promptly notify the Agent and, simultaneously with making that
payment, will pay to the Agent whatever additional amount (after taking into
account any additional Taxes on, or deductions or withholdings from, or
restrictions or conditions on, that additional amount) is necessary to ensure
that, after making the deduction or withholding, the Agent and the Banks receive
a net sum equal to the sum which they would have received had no deduction or
withholding been made.

  15.4  
Evidence of deductions If at any time the Borrower is required by law to make
any deduction or withholding from any payment to be made by it pursuant to any
of the Security Documents, the Borrower will pay the amount required to be
deducted or withheld to the relevant authority within the time allowed under the
applicable law and will, no later than thirty days after making that payment,
deliver to the Agent an original receipt issued by the relevant authority, or
other evidence acceptable to the Agent, evidencing the payment to that authority
of all amounts required to be deducted or withheld.

  15.5  
Rebate If the Borrower pays any additional amount under Clause 15.3, and a
Finance Party subsequently receives a refund or allowance from any tax authority
which that Finance Party identifies as being referable to that increased amount
so paid by the Borrower, that Finance Party shall, as soon as reasonably
practicable, pay to the Borrower an amount equal to the amount of the refund or
allowance received, if and to the extent that it may do so without prejudicing
its right to retain that refund or allowance and without putting itself in any
worse financial position than that in which it would have been had the relevant
deduction or withholding not been required to have been made. Nothing in this
Clause 15.5 shall be interpreted as imposing any obligation on any Finance Party
to apply for any refund or allowance nor as restricting in any way the manner in
which any Finance Party organises its tax affairs, nor as imposing on any
Finance Party any obligation to disclose to the Borrower any information
regarding its tax affairs or tax computations.

 

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  15.6  
U.S. Forms Each Bank which is organised under the laws of a jurisdiction outside
the United States of America shall deliver to the Borrower at or before the time
such Bank acquires its interest in the Loan (and from time to time thereafter
upon the reasonable written request of the Borrower, but only if such Bank is
legally entitled to do so) a completed, executed and valid United States
Internal revenue Service Form W-8BEN, 2-8ECI, or W-8EXP (or applicable successor
form).

  15.7  
Adjustment of due dates If any payment or transfer of funds to be made under any
of the Security Documents, other than a payment of interest on the Loan, shall
be due on a day which is not a Business Day, that payment shall be made on the
next succeeding Business Day (unless the next succeeding Business Day falls in
the next calendar month in which event the payment shall be made on the next
preceding Business Day). Any such variation of time shall be taken into account
in computing any interest in respect of that payment.

  15.8  
Change in law If, by reason of the introduction of any law, or any change in any
law, or the interpretation or administration of any law, or in compliance with
any request or requirement from any central bank or any fiscal, monetary or
other authority:-

  15.8.1  
any Bank or the Agent (or the holding company of any Bank or the Agent) shall be
subject to any Tax with respect to payments of all or any part of the
Indebtedness; or

  15.8.2  
the basis of Taxation of payments to any Bank or to the Agent in respect of all
or any part of the Indebtedness shall be changed; or

  15.8.3  
any reserve requirements shall be imposed, modified or deemed applicable against
assets held by or deposits in or for the account of or loans by any branch of
any Bank; or

 

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  15.8.4  
the manner in which any Bank or the Agent allocates capital resources to its
obligations under this Agreement or any ratio (whether cash, capital adequacy,
liquidity or otherwise) which any Bank or the Agent is required or requested to
maintain shall be affected; or

  15.8.5  
there is imposed on any Bank or on the Agent (or on the holding company of any
Bank or the Agent) any other condition in relation to the Indebtedness or the
Security Documents;

and the result of any of the above shall be to increase the cost to any Bank (or
to the holding company of any Bank) of that Bank making or maintaining its
Commitment, or to cause any Bank to suffer (in its opinion) a material reduction
in the rate of return on its overall capital below the level which it reasonably
anticipated at the date of this Agreement and which it would have been able to
achieve but for its entering into this Agreement and/or performing its
obligations under this Agreement, the Bank affected shall notify the Agent and
the Borrower shall from time to time pay to the Agent on demand for the account
of the Bank affected the amount which shall compensate that Bank or the Agent
(or the holding company) for such additional cost or reduced return. A
certificate signed by an authorised signatory of the Agent or of the Bank
affected setting out the amount of that payment and the basis of its calculation
shall be submitted to the Borrower and shall be conclusive evidence of such
amount save for manifest error or on any question of law.

  15.9  
Illegality Notwithstanding anything contained in the Security Documents, the
obligations of a Bank to advance or maintain its Commitment shall terminate in
the event that a change in any law or in the interpretation of any law by any
authority charged with its administration shall make it unlawful for that Bank
to advance or maintain its Commitment. In that event the Bank affected shall
notify the Agent and the Agent shall, by written notice to the Borrower, declare
the Banks’ obligations to be immediately terminated. If all or any part of the
Loan shall have been advanced by the Bank to the Borrower, the Indebtedness
(including all accrued interest) shall be prepaid within thirty days from the
date of such notice. Clause 5.4 shall not apply to that prepayment if it is made
on a day other than the last day of an Interest Period.

 

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  15.10  
Changes in market circumstances If at any time a Bank determines (which
determination shall be final and conclusive and binding on the Borrower) that,
by reason of changes affecting the London Interbank market, either adequate and
fair means do not exist for ascertaining the rate of interest on the Loan
pursuant to this Agreement or the cost to one or more Banks of obtaining
matching deposits for any Interest Period would be in excess of LIBOR:-

  15.10.1  
that Bank shall give notice to the Agent and the Agent shall give notice to the
Borrower of the occurrence of such event; and

  15.10.2  
the Agent shall as soon as reasonably practicable certify to the Borrower in
writing the effective cost to the Bank of maintaining the Loan for such further
period as shall be selected by the Bank and the rate of interest payable by the
Borrower for that period; or, if that is not acceptable to the Borrower; and

  15.10.3  
the Agent on behalf of the Bank will negotiate with the Borrower in good faith
with a view to modifying this Agreement to provide a substitute basis for the
Loan which is financially a substantial equivalent to the basis provided for in
this Agreement.

If, within thirty days of the giving of the notice referred to in Clause
15.10.1, the Borrower and the Agent fail to agree in writing on a substitute
basis for the Loan, the Borrower will compensate the Banks for their additional
costs or the Borrower will immediately prepay the Indebtedness. Clause 5.4 shall
apply to that prepayment if it is made on a day other than the last day of an
Interest Period.

  15.11  
Non-availability of currency If a Bank is for any reason unable to obtain
Dollars in the London Interbank market and is, as a result, or as a result of
any other contingency affecting the London Interbank market, unable to advance
or maintain its Commitment in Dollars, that Bank shall give notice to the Agent
and the Agent shall give notice to the Borrower and that Bank’s obligations to
make the Loan available shall immediately cease. In that event, if all or any
part of the Loan shall have been advanced by that Bank to the Borrower, the
Agent on behalf of that Bank will negotiate with the Borrower in good faith with
a view to establishing a mutually acceptable basis for funding the Loan from an
alternative source. If the Agent and the Borrower have failed to agree in
writing on a basis for funding the Loan from an alternative source by 11.00 a.m.
on the second Business Day prior to the end of the then current Interest Period,
the Borrower will (without prejudice to its other obligations under or pursuant
to this Agreement, including, without limitation, its obligation to pay interest
on the Loan, arising on the expiry of the then current Interest Period) prepay
that Bank’s portion of the Indebtedness to the Agent on behalf of that Bank on
the expiry of the then current Interest Period.

 

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16  
Communications

  16.1  
Method Except for Communications pursuant to Clause 9, which shall be made or
given in accordance with Clause 9.20, any Communication may be given, delivered,
made or served (as the case may be) under or in relation to this Agreement by
letter or fax and shall be in the English language and sent addressed:-

  16.1.1  
in the case of the Banks or the Agent to the Agent at its address at the head of
this Agreement (fax no: +31 10 436 2957) marked for the attention of: Doina van
Tooren-Rotari; and

  16.1.2  
in the case of the Borrower to the Communications Address;

or to such other address or fax number as the Banks, the Agent or the Borrower
may designate for themselves by written notice to the others.

  16.2  
Timing A Communication shall be deemed to have been duly given, delivered, made
or served to or on, and received by, the other party:-

  16.2.1  
in the case of a fax when the sender receives one or more transmission reports
showing the whole of the Communication to have been transmitted to the correct
fax number;

  16.2.2  
if delivered to an officer of the recipient or left at the address specified in
Clause 16.1 at the time of delivery or leaving; or

  16.2.3  
if posted, upon receipt.

  16.3  
Indemnity The Borrower shall indemnify the Agent and each Bank against any cost,
claim, liability, loss or expense (including legal fees and any Value Added Tax
or any similar or replacement tax (if applicable)) which the Agent or any Bank
may sustain or incur as a consequence of any Communication sent by or on behalf
of the Borrower by fax not being received by its intended recipient, or being
received incomplete, or by reason of any Communication purportedly having been
sent by or on behalf of the Borrower having been sent fraudulently.

 

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  16.4  
Loans Administration Form The Borrower undertakes to provide a completed Loans
Administration Form (as provided by the Agent) which, amongst other things,
shall provide the Agent with the list of authorised persons (“Authorised
Persons”) who, on behalf of the Borrower, may make information requests or
communicate generally with the Agent in relation to the ongoing administration
of the Facility by the Agent throughout the Facility Period. The Authorised
Persons shall also be the point of first contact with the Borrower for the Agent
in relation to the administration of the Facility. The list of Authorised
Persons may only be amended or varied by an Authorised Person or a director of
the Borrower.

17  
General Indemnities

  17.1  
Currency In the event of the Agent or a Bank receiving or recovering any amount
payable under any of the Security Documents in a currency other than the
Currency of Account, and if the amount received or recovered is insufficient
when converted into the Currency of Account at the date of receipt to satisfy in
full the amount due, the Borrower shall, on the Agent’s written demand, pay to
the Agent such further amount in the Currency of Account as is sufficient to
satisfy in full the amount due and that further amount shall be due to the Agent
on behalf of the Banks as a separate debt under this Agreement.

  17.2  
Costs and expenses The Borrower will, within fourteen days of the Agent’s
written demand, reimburse the Agent on behalf of itself and the Banks for all
reasonable costs and expenses (including Value Added Tax or any similar or
replacement tax if applicable) of and incidental to:-

  17.2.1  
the negotiation, preparation, execution and registration of the Security
Documents (whether or not any of the Security Documents are actually executed or
registered and whether or not all or any part of the Loan is advanced);

  17.2.2  
any amendments, addenda or supplements to any of the Security Documents (whether
or not completed);

 

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  17.2.3  
any other documents which may at any time be required by any Bank or by the
Agent to give effect to any of the Security Documents or which any Bank or the
Agent is entitled to call for or obtain pursuant to any of the Security
Documents (including, without limitation, all premiums and other sums from time
to time payable by the Agent in relation to the Mortgagees’ Insurances); and

  17.2.4  
the exercise of the rights, powers, discretions and remedies of the Banks and/or
the Agent under or pursuant to the Security Documents.

  17.3  
Events of Default The Borrower shall indemnify the Banks and the Agent from time
to time on demand against all losses and costs incurred or sustained by any Bank
or by the Agent as a consequence of any Event of Default, including (without
limitation) any Break Costs.

  17.4  
Funding costs The Borrower shall indemnify the Banks and the Agent from time to
time on demand against all losses and costs incurred or sustained by any Bank or
by the Agent if, for any reason, any Drawing is not advanced to the Borrower
after the relevant Drawdown Notice has been given to the Agent, or is advanced
on a date other than that requested in the Drawdown Notice (unless, in either
case, as a result of any default by the Agent or by any of the Banks), including
(without limitation) any Break Costs.

  17.5  
Protection and enforcement The Borrower shall indemnify the Banks and the Agent
from time to time on demand against all losses, costs and liabilities which any
Bank or the Agent may from time to time sustain, incur or become liable for in
or about the protection, maintenance or enforcement of the rights conferred on
the Banks and/or the Agent by the Security Documents or in or about the exercise
or purported exercise by the Banks and/or the Agent of any of the rights,
powers, discretions or remedies vested in them under or arising out of the
Security Documents, or in connection with any third party liability claims
(including but not limited to environmental or pollution claims) including
(without limitation) any losses, costs and liabilities which any Bank or the
Agent may from time to time sustain, incur or become liable for by reason of the
Banks or the Agent being mortgagees of the Vessels and/or a lender to the
Borrower, or by reason of any Bank or the Agent being deemed by any court or
authority to be an operator or controller, or in any way concerned in the
operation or control, of a Vessel.

 

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  17.6  
Liabilities of Banks and Agent The Borrower will from time to time reimburse the
Banks and the Agent on demand for all sums which any Bank or the Agent may pay
or become actually or contingently liable for on account of the Borrower or in
connection with the Vessels (whether alone or jointly or jointly and severally
with any other person) including (without limitation) all sums which the Bank
may pay or guarantees which any Bank or the Agent may give in respect of the
Insurances, any expenses incurred by any Bank or by the Agent in connection with
the maintenance or repair of any Vessel or in discharging any lien, bond or
other claim relating in any way to any Vessel, and any sums which any Bank or
the Agent may pay or guarantees which they may give to procure the release of
any Vessel from arrest or detention.

  17.7  
Taxes The Borrower shall pay all Taxes to which all or any part of the
Indebtedness or any of the Security Documents may be at any time subject and
shall indemnify the Agent and the Banks on demand against all liabilities,
costs, claims and expenses resulting from any omission to pay or delay in paying
any such Taxes.

18  
Miscellaneous

  18.1  
Waivers No failure or delay on the part of the Agent or a Bank in exercising any
right, power, discretion or remedy under or pursuant to any of the Security
Documents, nor any actual or alleged course of dealing between the Agent and any
Bank and the Borrower, shall operate as a waiver of, or acquiescence in, any
default on the part of any Security Party, unless expressly agreed to do so in
writing by the Agent, nor shall any single or partial exercise by the Agent or a
Bank of any right, power, discretion or remedy preclude any other or further
exercise of that right, power, discretion or remedy, or the exercise by the
Agent or a Bank of any other right, power, discretion or remedy.

  18.2  
No oral variations No variation or amendment of any of the Security Documents
shall be valid unless in writing and signed on behalf of the Borrower and the
Agent.

  18.3  
Severability If at any time any provision of any of the Security Documents is
invalid, illegal or unenforceable in any respect that provision shall be severed
from the remainder and the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired in any way.

 

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  18.4  
Successors etc. The Security Documents shall be binding on the Security Parties
and on their successors and permitted transferees and assignees, and shall inure
to the benefit of the Banks and the Agent and their respective successors,
transferees and assignees. The Borrower may not assign nor transfer any of its
rights under or pursuant to any of the Security Documents without the prior
written consent of the Agent.

  18.5  
Further assurance If any provision of the Security Documents shall be invalid or
unenforceable in whole or in part by reason of any present or future law or any
decision of any court, or if the documents at any time held by the Banks or by
the Agent on their behalf are considered by the Banks for any reason
insufficient to carry out the terms of this Agreement, then from time to time
the Borrower will promptly, on demand by the Agent, execute or procure the
execution of such further documents as in the reasonable opinion of the Agent
are necessary to provide adequate security for the repayment of the
Indebtedness.

  18.6  
Other arrangements The Banks and the Agent may, without prejudice to their
rights under or pursuant to the Security Documents, at any time and from time to
time, on such terms and conditions as they may in their discretion determine,
and without notice to the Borrower, grant time or other indulgence to, or
compound with, any other person liable (actually or contingently) to the Banks
and/or the Agent in respect of all or any part of the Indebtedness, and may
release or renew negotiable instruments and take and release securities and hold
funds on realisation or suspense account without affecting the liabilities of
the Borrower or the rights of the Banks and the Agent under or pursuant to the
Security Documents.

  18.7  
Advisers The Borrower irrevocably authorises the Agent, at any time and from
time to time during the Facility Period, to consult insurance advisers on any
matters relating to the Insurances, including, without limitation, the
collection of insurance claims, and from time to time to consult or retain
advisers or consultants to monitor or advise on any other claims relating to the
Vessels. Subject to such confidentiality agreements as the Borrower may
reasonably require, the Borrower will provide such advisers and consultants with
all information and documents which they may from time to time reasonably
require and will reimburse the Agent on demand for all reasonable costs and
expenses incurred by the Agent in connection with the consultation or retention
of such advisers or consultants.

 

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  18.8  
Delegation The Banks and the Agent may at any time and from time to time
delegate to any person any of their rights, powers, discretions and remedies
pursuant to the Security Documents on such terms as they may consider
appropriate (including the power to sub-delegate).

  18.9  
Rights etc. cumulative Every right, power, discretion and remedy conferred on
the Banks and/or the Agent under or pursuant to the Security Documents shall be
cumulative and in addition to every other right, power, discretion or remedy to
which they may at any time be entitled by law or in equity. The Banks and the
Agent may exercise each of their rights, powers, discretions and remedies as
often and in such order as they deem appropriate. The exercise or the beginning
of the exercise of any right, power, discretion or remedy shall not be
interpreted as a waiver of the right to exercise that or any other right, power,
discretion or remedy either simultaneously or subsequently.

  18.10  
No enquiry The Banks and the Agent shall not be concerned to enquire into the
powers of the Security Parties or of any person purporting to act on behalf of
any of the Security Parties, even if any of the Security Parties or any such
person shall have acted in excess of their powers or if their actions shall have
been irregular, defective or informal, whether or not any Bank or the Agent had
notice thereof.

  18.11  
Continuing security The security constituted by the Security Documents shall be
continuing and shall not be satisfied by any intermediate payment or
satisfaction until the Indebtedness shall have been repaid in full and neither
the Banks nor the Agent shall be under any further actual or contingent
liability to any third party in relation to the Vessels, the Insurances,
Earnings or Requisition Compensation or any other matter referred to in the
Security Documents.

  18.12  
Security cumulative The security constituted by the Security Documents shall be
in addition to any other security now or in the future held by the Banks or by
the Agent for or in respect of all or any part of the Indebtedness, and shall
not merge with or prejudice or be prejudiced by any such security or any other
contractual or legal rights of the Banks or the Agent, nor affected by any
irregularity, defect or informality, or by any release, exchange or variation of
any such security. Section 93 of the Law of Property Act 1925 and all provisions
which the Agent considers analogous thereto under the law of any other relevant
jurisdiction shall not apply to the security constituted by the Security
Documents.

 

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  18.13  
No liability Neither the Banks nor the Agent nor any agent or employee of any
Bank or of the Agent, nor any receiver and/or manager appointed by the Agent,
shall be liable for any losses which may be incurred in or about the exercise of
any of the rights, powers, discretions or remedies of the Banks and/or the Agent
under or pursuant to the Security Documents nor liable as mortgagee in
possession for any loss on realisation or for any neglect or default of any
nature for which a mortgagee in possession might otherwise be liable except for
the consequences of gross negligence or wilful misconduct.

  18.14  
Rescission of payments etc. Any discharge, release or reassignment by the Banks
and/or the Agent of any of the security constituted by, or any of the
obligations of any Security Party contained in, any of the Security Documents
shall be (and be deemed always to have been) void if any act (including, without
limitation, any payment) as a result of which such discharge, release or
reassignment was given or made is subsequently wholly or partially rescinded or
avoided by operation of any law.

  18.15  
Subsequent Encumbrances If the Agent receives notice of any subsequent
Encumbrance (other than a Permitted Encumbrance) affecting any Vessel or all or
any part of the Insurances, Earnings or Requisition Compensation or the
Accounts, the Agent may open a new account in its books for the Borrower. If the
Agent does not open a new account, then (unless the Agent gives written notice
to the contrary to the Borrower) as from the time of receipt by the Agent of
notice of such subsequent Encumbrance, all payments made to the Agent shall be
treated as having been credited to a new account of the Borrower and not as
having been applied in reduction of the Indebtedness.

  18.16  
Releases If any Bank or the Agent shall at any time release any party from all
or any part of any of the Security Documents, the liability of any other party
to the Security Documents shall not be varied or diminished.

  18.17  
Discretions Unless otherwise expressly indicated, where any Bank or the Agent is
stated in the Security Documents to have a discretion and/or where the opinion
of any Bank or the Agent is referred to and/or where the consent, agreement or
approval of any Bank or the Agent is required for any course of action, or where
anything is required to be acceptable to any Bank or the Agent, the Banks and
the Agent shall have a sole, absolute and unfettered discretion and/or may give
or withhold its consent, agreement or approval at their sole, absolute and
unfettered discretion.

 

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  18.18  
Certificates Any certificate or statement signed by an authorised signatory of
the Agent purporting to show the amount of the Indebtedness (or any part of the
Indebtedness) or any other amount referred to in any of the Security Documents
shall, save for manifest error or on any question of law, be conclusive evidence
as against the Borrower of that amount.

  18.19  
Survival of representations and warranties The representations and warranties on
the part of the Borrower contained in this Agreement shall survive the execution
of this Agreement and the advance of the Loan.

  18.20  
Confidentiality Neither the Agent nor any Bank shall disclose any Confidential
Information to any person without the consent of the Borrower, other than (a) to
the Agent’s or such Bank’s affiliates and their officers, directors, employees,
agents and advisors and to actual or prospective assignees and participants, and
then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process, (c) as requested or required by any governmental
authority or examiner regulating such Bank, (d) to any rating agency when
required by it, provided that, prior to any such disclosure, such rating agency
shall undertake to preserve the confidentiality of any Confidential Information
relating to the Security Parties received by it from such Bank, (e) in
connection with any litigation or proceeding to which the Agent or such bank or
any of its affiliates may be a party or (f) in connection with the exercise of
any right or remedy under this Agreement or any other Security Document.

  18.21  
Counterparts This Agreement may be executed in any number of counterparts each
of which shall be original but which shall together constitute the same
instrument.

  18.22  
Contracts (Rights of Third Parties) Act 1999 No term of this Agreement is
enforceable by a person who is not a party to it.

 

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19  
Law and Jurisdiction

  19.1  
Governing law This Agreement shall in all respects be governed by and
interpreted in accordance with English law.

  19.2  
Jurisdiction For the exclusive benefit of the Banks and the Agent, the parties
to this Agreement irrevocably agree that the courts of England are to have
jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement and that any Proceedings may be brought in those courts.

  19.3  
Alternative jurisdictions Nothing contained in this Clause shall limit the right
of the Banks or the Agent to commence any Proceedings against the Borrower in
any other court of competent jurisdiction nor shall the commencement of any
Proceedings against the Borrower in one or more jurisdictions preclude the
commencement of any Proceedings in any other competent jurisdiction, whether
concurrently or not.

  19.4  
Waiver of objections The Borrower irrevocably waives any objection which it may
now or in the future have to the laying of the venue of any Proceedings in any
court referred to in this Clause, and any claim that those Proceedings have been
brought in an inconvenient or inappropriate forum, and irrevocably agrees that a
judgment in any Proceedings commenced in any such court shall be conclusive and
binding on it and may be enforced in the courts of any other competent
jurisdiction.

  19.5  
Service of process Without prejudice to the right of the Agent and the Banks to
use any other method of service permitted by law, the Borrower irrevocably
agrees that any writ, notice, judgment or other legal process shall be
sufficiently served on it if addressed to it and left at or sent by post to the
Address for Service, and in that event shall be conclusively deemed to have been
served at the time of leaving or if posted, upon receipt.

 

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IN WITNESS of which the parties to this Agreement have executed this Agreement
the day and year first before written.

             
SIGNED by
    )     /s/ J. D. Barth
duly authorised for and on behalf
    )     Jeffrey D. Barth
of GYPSUM TRANSPORTATION
    )      
LIMITED
    )      
 
           
SIGNED by Ian Mace
    )     /s/ Ian Mace
duly authorised for and on behalf
    )     Attorney-in-fact
of DVB BANK SE
    )      
(as a Bank)
    )      
 
           
SIGNED by Ian Mace
    )     /s/ Ian Mace
duly authorised for and on behalf
    )     Attorney-in-fact
of DVB BANK SE
    )      
(as Agent and Security Trustee)
    )      

 

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