WORKING CAPITAL FACILITY AGREEMENT
EHLERMANN
 
RINDFLEISCH
DATED 6-12, 2010
GADOW
 
RECHTSANWALTE
 
PARTNERSCHAFT
12 A.H.T.S Vessels
 
built by Fincantieri Cantieri Navali S.p.A.
BALLINDAMM 26, 20095 HAMBURG
     
TELEFON +49 40 37 48 14 – 0
 
TELEFAX +49 40 37 48 14 – 30
 
INTERNET WWW.ERG-LEGAL.COM

NORDDEUTSCHE LANDESBANK GIROZENTRALE
as Lender

and

THE TWELVE LIMITED PARTNERSHIPS
AS MORE CLOSELY DESCRIBED HEREIN
as jointly and severally liable Borrowers

 

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THIS WORKING CAPITAL FACILITY AGREEMENT (THE "AGREEMENT") IS MADE THIS 6th DAY
OF DECEMBER, 2010 between

(1)
NORDDEUTSCHE LANDESBANK GIROZENTRALE, a banking institution organized and
existing under the laws of the Federal Republic of Germany, having its
registered offices at Friedrichswall 10, 30159 Hannover, Germany, (sometimes
"NORD/LB" or the "Lender", as the case may be), and

on the one part,

and

(2)
ATL OFFSHORE GMBH & CO. MS "JUIST" KG, (the "Borrower 1")

(3)
ATL OFFSHORE GMBH & CO. MS "NORDERNEY" KG, (the "Borrower 2")

(4)
ATL OFFSHORE GMBH & CO. "ISLE OF BALTRUM" KG, (the "Borrower 3")

(5)
ATL OFFSHORE GMBH & CO. "ISLE OF LANGEOOG" KG, (the "Borrower 4")

(6)
ATL OFFSHORE GMBH & CO. "ISLE OF AMRUM" KG, (the "Borrower 5")

(7)
ATL OFFSHORE GMBH & CO. "ISLE OF SYLT" KG, (the "Borrower 6")

(8)
ATL OFFSHORE GMBH & CO. "ISLE OF WANGEROOGE" KG, (the "Borrower 7")

(9)
ATL OFFSHORE GMBH & CO. "ISLE OF NEUWERK" KG, (the "Borrower 8")

(10)
ATL OFFSHORE GMBH & CO. "ISLE OF USEDOM" KG, (the "Borrower 9")

(11)
ATL OFFSHORE GMBH & CO. "ISLE OF FEHMARN" KG, (the "Borrower 10")

(12)
ATL OFFSHORE GMBH & CO. "ISLE OF MEMMERT" KG, (the "Borrower 11")

(13)
ATL OFFSHORE GMBH & CO. "ISLE OF MELLUM" KG, (the "Borrower 12")

each of them a limited partnership incorporated and existing under the laws of
the Federal Republic of Germany having its registered office at Neue Str. 24,
26789 Leer, Germany (collectively the "Borrowers", and each one of them a
"Borrower"), as jointly and severally liable borrowers on the other part.

 
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PREAMBLE

I.
Each of the Borrowers is the owner of one (1) A.H.T.S. newbuilding type Moss
424, 16,000 bhp constructed by FINCANTIERI CANTIERI NAVALI ITALIANI S.P.A. of
Via Cipro, 11, 16129 Genoa, Italy (the "Builder"), bearing the Builder's hull
nos. 6160, 6161, 6162, 6163, 6168, 6169, 6171, 6172, 6173, 6174, 6175 and 6176.

 
II.
Pursuant to the terms and conditions of a loan agreement dated 19th December,
2008 (as amended by an addendum no. 1 dated 17th September, 2010 and as from
time to time further amended, supplemented or varied the "Existing Loan
Agreement"), made between the Lender as lender and the Borrowers as jointly and
severally liable borrowers, the Lender has agreed to grant to the Borrowers
loans in the aggregate maximum amount of Euros four hundred twenty million five
hundred seventy thousand (EUR 420,570,000.00) (the "Loan") (i) for the
part-financing of the construction price of twelve A.H.T.S vessels referred to
above and further described herein and built or to be built by the Builder, (ii)
for the issuing of certain payment guarantees to the Builder and (iii) to enable
the Borrowers to postpone the repayment of part of the Loan.

III.
Upon request of the Borrowers and due to the Borrowers facing liquidity
shortfalls, the Lender is ready under the terms and conditions of this
Agreement, to grant to the Borrowers as jointly and severally liable borrowers
the facility as more closely described herein for the purposes of increasing the
Borrowers' working capital.

NOW THEREFORE the parties hereto agree as follows:

 
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CONTENTS

1
 
DEFINITIONS
 
4
         
2
 
PURPOSE OF THE FACILITY
 
10
         
3
 
DRAWDOWN OF THE TRANCHES
 
10
         
4
 
BORROWERS' LIABILITY
 
10
         
5
 
AVAILABILITY
 
11
         
6
 
FEES AND COMMISSIONS
 
11
         
7
 
INTEREST
 
12
         
8
 
REPAYMENT
 
12
         
9
 
VOLUNTARY AND MANDATORY PREPAYMENT
 
13
         
10
 
PAYMENTS
 
14
         
11
 
SUBSTITUTE RATE AND SUBSTITUTE BASIS
 
15
         
12
 
SECURITY
 
17
         
13
 
INSURANCES
 
17
         
14
 
ENVIRONMENTAL MATTERS
 
20
         
15
 
CHANGE OF CIRCUMSTANCES
 
21
         
16
 
BASEL II
 
23
         
17
 
REPRESENTATIONS AND WARRANTIES
 
23
         
18
 
ASSET PROTECTION
 
26
         
19
 
UNDERTAKINGS
 
26
         
20
 
BAREBOAT REGISTRATION
 
32
         
21
 
ACCOUNTS
 
32
         
22
 
EVENTS OF DEFAULT
 
33
         
23
 
ASSIGNMENT, TRANSFER AND SYNDICATION
 
35
         
24
 
APPLICABLE LAW, JURISDICTION
 
36
         
25
 
JUDGEMENT CURRENCY
 
36
         
26
 
WAIVERS
 
36
         
27
 
INVALIDITY
 
37
         
28
 
SURVIVAL
 
37
         
29
 
EFFECTUATION
 
37
         
30
 
LANGUAGE
 
37
         
31
 
COSTS AND EXPENSES
 
37
         
32
 
NOTICES AND TIME
 
38
         
33
 
GENERAL CONDITIONS
 
39
         
34
 
EXHIBITS
 
39
         
35
 
COUNTERPARTS
 
39
         
35
 
DECLARATION ON MONEY LAUNDERING
 
39
         
SCHEDULES AND EXHIBITS
  
42

 
3

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1
DEFINITIONS

1.1
The terms used in this Agreement shall be defined as follows:

 
Acknowledgement and

 
Submission
The abstract acknowledgement of debt, including the deed of granting of hypothec
and the submission to immediate enforcement by the Borrowers, dated 19th
February, 2009 made by the Borrowers and the General Partner in favour of the
Lender and evidenced in the notarial deed of even date under the register of
deeds 89/2009 of the notary public Mr. Jan de Vries

 
Assured(s)
Any person or party other than the Borrowers which is from time to time shown in
any insurance policy, insurance slip, cover note, certificate of entry or other
insurance document whatsoever as an assured, co-assured or as a party that in
whatever capacity may at any time have a right or claim in relation to the
insurances of any of the Vessels

 
Banking Day
A day on which dealings in Euros are carried out in the relevant Interbank
Market and on which banks are open for business in Frankfurt, Hannover, London
and New York

 
Bareboat Charterer
The bareboat charterer of any of the Vessels, being in each single case a fully
owned and controlled subsidiary of the Relevant Borrower

 
Borrower (1) - (12)
The limited partnerships as set out in Schedule 1 attached hereto

 
Borrowers
Collectively Borrower (1) - (12) and in the singular form any of them

 
Builder
FINCANTIERI CANTIERI NAVALI ITALIANI S.P.A. of Genoa, Italy

Building Contract (1) - (12)
The building contracts between the Builder and the General Partner, as set out
in Schedule 1 attached hereto

 
Building Contracts
Collectively the Building Contract (1) - (12) and in the singular form any of
them

 
Charter
A time charter contract concluded between any of the Borrowers as owner and the
Charterer as charterer, providing (i) for a duration of not less than twelve
(12) Months or an equivalent substitute as more closely described in Clause
19.2.1.2 and (ii) for a daily charter hire satisfactory to the Lender, and
furthermore being concluded on terms and conditions satisfactory to the Lender

 
Charterer
Any well reputed charterer satisfactory to the Lender

 
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Classification Society
American Bureau of Shipping or any other first class classification society
being a member to IACS and being accepted by the Lender

 
Commitment
The commitment of the Lender to grant the Facility

Commitment
 
Termination Date
30th September, 2012 or any earlier date on which the Commitment expires

 
Deeds of Assignment
The deeds of assignment made or to be made, as the case may be, between the
General Partner, the Builder and the Borrowers, pursuant to the terms of which
the General Partner has transferred the Building Contracts to and in favour of
the Borrowers

 
Default Rate
The rate of interest payable for overdue payments as stipulated in Clause 10.4

 
Drawdown
The advance of any Tranche by the Lender to the Borrowers hereunder

 
Drawdown Date
The date upon which any Drawdown is made hereunder

 
Earnings Accounts
The accounts opened and held with the Lender in the name of the Relevant
Borrowers to which the Relevant Vessel's Earnings shall be paid during the
Security Period

 
Earnings
In relation to each of the Vessels, all moneys whatsoever due or to become due
or for the account of the Borrowers at any time until the Outstanding
Indebtedness has been repaid in full to Lender arising out of the use of or
operation of the Relevant Vessel including (but not limited to) all freight,
hire and passage moneys resulting from the contracts, requisition compensation
remuneration for salvage, towage services, demurrage and detention moneys and
damages for breach (or payments for variation or termination) of the Charter and
any other charter party or other contract for the employment of the Relevant
Vessel, or any claims against an employment pool for payment of the relevant
pool participation, and all sums recoverable under the insurances in respect of
the loss of income out of any employment of the Relevant Vessel and includes, if
and whenever the Relevant Vessel is employed on terms whereby any or all such
moneys as aforesaid are pooled or shared with any other person or entity, that
proportion of the net receipts of the relevant pooling or sharing arrangement
which is attributable to the Relevant Vessel

 
Equity Provider 1
SURESH CAPITAL MARITIME PARTNERS GERMANY GMBH, Leer, Germany

 
Equity Provider 2
Together Reederei Hartmann and the Manager and the Pool Manager or any of them
or an affiliated company of Reederei Hartmann accepted by the Lender

 
Equity Provider 3
SURESH CAPITAL MARITIME PARTNERS I-B GERMANY GMBH, Leer, Germany

 
5

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EUR
Euro or such other currency as shall be at the relevant time the legal tender
for the payment of private and public debts in the states participating in the
European Monetary Union

 
EURIBOR
The Interbank Offered Rate for EUR in Frankfurt, i.e. the rate per annum
determined by the Lender (rounded up to the nearest sixteenth (1/16) of one
percent) at which deposits in EUR are offered on a Quotation Date at or about
11.00 hours a.m. (Frankfurt time) in the European interbank market in sums equal
to and for periods of time similar to the Interest Period agreed upon for the
Facility to be funded,

(a) as published in Reuters Monitor Money Service on page “EURIBOR01” (or
another page replacing EURIBOR01), or

(b) in case no such rate as mentioned under (a) is published, the rate at which
the Lender, in accordance with its normal practice, is offered such deposits by
first class banks in the European interbank market

 
Event of Default
Any event listed in Clause 22

Existing Loan Agreement
The loan agreement dated 19th December, 2008 (as amended by an addendum no. 1
dated 17th September, 2010 and as from time to time further amended,
supplemented or varied) made between the Lender as lender and the Borrowers as
jointly and severally liable borrowers for the granting of loans in the
aggregate maximum amount of Euros four hundred twenty million five hundred
seventy thousand (EUR 420,570,000.00) (i) for the part-financing of the
construction price of the Vessels, (ii) for the issuing of certain payment
guarantees to the Builder and (iii) to enable the Borrowers to postpone the
repayment of part of the loan

 
Fair Market Value
The fair market value of the Relevant Vessel as determined in accordance with
Clause 18.1 and 18.2

 
Facility
The working capital facility of up to Euros ten million (EUR 10,000,000.00)

 
Final Maturity Date
30th December, 2012

 
Financial Statements
The annual audited financial statements including the annual reports, balance
sheets and profit and loss statements including cash flow statements, presenting
the relevant company's financial condition, audited by chartered accountants
acceptable to the Lender in accordance with generally accepted international
accounting standards or  accounting standards according to the German Commercial
Code (Handelsgesetzbuch), consistently applied

 
Fixed Funding Costs
The Lender’s costs of funding the Relevant Tranche or any portion thereof in
excess of EURIBOR, to be determined as more closely described in Clause 7.3

 
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General Conditions
NORD/LB’s General Business Conditions in their German Version ("Allgemeine
Geschäftsbedingungen") and its General Loan Conditions ("Allgemeine
Darlehensbedingungen"), together with English translations thereof, in the form
attached hereto as Exhibit 5

 
General Partner
ATL OFFSHORE GMBH of Leer, Germany

 
Hypothec
The ship hypothec over the Vessels in the form of a fleet hypothec
("Gesamtschiffshypothek") under the laws of the Federal Republic of Germany
registered over the Vessels in the Lender's favour securing the Acknowledgement
and Submission

 
Illicit Origin
Any origin which is illicit or fraudulent, including without limitation, drug
trafficking, corruption, organised criminal activities, terrorism, money
laundering or fraud

 
Insurances
The insurances to be taken out by the Relevant Borrowers for the Vessels

 
Insurance Value
The full market value of a Vessel as determined pursuant to Clause 18.1,
however, not less than one hundred and twenty (120) percent of the aggregate of
(i) the total amount outstanding under the relevant tranche in relation to the
Relevant Vessel under the Existing Loan Agreement, and (ii) Euro one Million
(EUR 1,000,000.00), increased by the nominal value of any other lien or
encumbrance over the Relevant Vessel having priority over the Lender's rights
under the Hypothec

 
Interest Payment
The amount payable for interest at an Interest Payment Date

 
Interest Payment Date
The last day of an Interest Period and the days coinciding with each Reduction
Date falling into such Interest Period, as more closely described in Clause 7.7

 
Interest Period
Periods of three (3) Months or any such other period as agreed by the Lender,
the first such Interest Period commencing on the Relevant Drawdown Date of the
Relevant Tranche and any further Interest Period on the expiry of any
immediately preceding relevant Interest Period in respect of such Tranche and
all Interest Periods running on the Final Maturity Date shall terminate on the
Final Maturity Date

 
Interest Rate
The annual rate of interest which is conclusively certified by the Lender to be
the aggregate of the EURIBOR, the Fixed Funding Costs and the Margin, as further
stipulated in Clause 7

 
ISM Code
The International Management Code for the Safe Operation of Ships and for
Pollution Prevention adopted by the International Maritime Organisation

 
Facility Amount
The aggregate maximum facility amount of Euros ten million (EUR 10,000,000.00)

 
7

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Loss of Hire
The insurance of deprived income (charter hire, earnings, freight, profits,
passage money) as a consequence of an insured peril under the hull & machinery
or war risks insurance subject to ABS 1/10/83 Wording - Including War, the
Norwegian Marine Insurance Plan of 1996 - Chapter 16, or other equivalent
conditions as any of the aforesaid is updated and/or amended from time to time

 
Manager
HARTMANN OFFSHORE GMBH & CO. KG, Leer, Germany, or any other first class,
internationally well reputed manager accepted by the Lender

 
Margin
The margin of four point five (4.5) per cent per annum, and upon new margins
having been assessed and accepted as provided in Clause 16, such new margin

 
Material Adverse Effect
An effect being materially harmful on the Borrowers' ability to repay the
Facility

 
Month(s)
Period calculated from any specified day to and including the day numerically
corresponding to such specified day (or, if such specified day is the last day
or if there shall be no day numerically corresponding to such specified day, the
last day) in the relevant subsequent calendar month

 
New Interest Date
The first day of an Interest Period

 
NORD/LB
NORDDEUTSCHE LANDESBANK GIROZENTRALE, a banking institution organized and
existing under the laws of the Federal Republic of Germany, having its
registered offices at Friedrichswall 10, 30159 Hannover, Germany

 
Obligor(s)
Collectively the Borrowers, Reederei Hartmann and the Manager, and in the
singular form any one of them, as the context may require

Outstanding Indebtedness
The aggregate of all amounts that may from time to time become payable by the
Borrowers to the Lender and all other obligations of the Borrowers pursuant to
the terms of this Agreement and the Security Documents

 
Pool Agreement
The pool agreement made or to be made, as the case may be, between the Borrowers
and the Pool Manager on terms and conditions acceptable to the Lender

 
Pool Manager
United Offshore Support GmbH & Co. KG, Leer, Germany or any other pool manager
of first class reputation being acceptable to the Lender

 
Prohibited Payment
(a) any offer, gift, payment, promise to pay, commission, fee, loan or other
consideration which would constitute bribery or an improper gift or payment
under, or a breach of, any law of any Relevant Jurisdiction; or

 
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(b) any offer, gift, payment, promise to pay, commission, fee, loan or other
consideration which would or might constitute bribery within the OECD Convention
on Combating Bribery of Foreign Public Officials in International Business
Transactions of 17 December 1997

 
Quotation Date
The date two (2) Banking Days prior to the Relevant Drawdown Date or to the
beginning of any Interest Period

 
Reduction Date
The 31st March, 2012, the 30th June, 2012, and the 30th September, 2012 on which
the Facility shall be reduced as set forth in Clause 3.3

 
Reederei Hartmann
REEDEREI HARTMANN GMBH & CO. KG of Leer, Germany

 
Relevant Borrower
Any of the Borrowers, as the context may require

Relevant Building Contract
Any of the Building Contracts, as the context may require

Relevant Earnings Account
Any of the Earnings Accounts, as the context may require

Relevant Fair Market Value
The Fair Market Value of any of the Vessels, as the context may require

 
Relevant Obligor
Any of the Obligors, as the context may require

 
Relevant Vessel
Any of the Vessels, as the context may require

Relevant Vessel's
 
Facility Ratio
In respect of any Vessel on any date the amount determined in accordance with
the following formula:

 
Relevant Fair Market Value * 100

 
         Aggregate Fleet Value

 
where: 'Aggregate Fleet Value' being the aggregate of the Fair Market Values of
all Vessels

 
Security Documents
The documents to be executed pursuant to Clause 12 together with any other
document from time to time executed as security for the Facility or any part
thereof

 
Security Period
The period commencing on the first Drawdown Date and ending on the day on which
all obligations of the Borrowers arising pursuant to the terms of this Agreement
and the Security Documents have been paid and performed in full

 
Ships Registry
The register of sea-going vessels held with the lower court (Amtsgericht) of
Emden, Germany

 
Taxes
Any tax, levies, duties, charges, fees, deductions and withholdings levied or
imposed by any government or other taxing authority whatsoever other than taxes
on the income of the Lender

 
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Total Loss
The actual or constructive or compromised or arranged or agreed total loss of
any of the Vessels and the requisition for title or other compulsory acquisition
of any of the Vessels other than requisition for hire; and the capture, seizure,
arrest, restraint, detainment, detention or confiscation of any of the Vessels
by any government or by a person acting or purporting to act on behalf of any
government which is not released or discharged within ninety (90) days

 
Tranches
Any portion of the Facility drawn by the Borrowers of not less than Euro two
million five hundred thousand (EUR 2,500,000.00) and in the singular any of them

 
Transfer Certificate
The transfer certificate substantially in the form attached hereto as Exhibit 4

 
Vessels
Together the Vessels (1) - (12), and in the singular form any one of them.

1.2
Clause headings are inserted for convenience only and shall not affect the
construction of this Agreement and unless otherwise specified, all references to
"Clauses" are to clauses of this Agreement.

1.3
Unless the context otherwise requires, words denoting the singular number shall
include the plural and vice versa.

1.4
References to persons include corporate bodies and unincorporated bodies.

1.5
References to assets include property, rights and assets of every description.

1.6
References to any document are to be construed as references to such document as
amended or supplemented from time to time.

1.7
References to any enactment include re-enactments, amendments and extensions
thereof.

2
PURPOSE OF THE FACILITY

The Facility shall exclusively be used by the Borrowers to strengthen their
working capital.

3
DRAWDOWN OF THE TRANCHES

3.1
Availability. Upon satisfaction of the conditions set out in Clause 5, the
Lender shall make available to the Borrowers the Facility up to the maximum
amount of the Facility during the period from the date hereof up to and
including the Commitment Termination Date and at the times and in the manner
herein set forth.

3.2
The Facility shall be drawn in one (1) amount or in multiple portions in
Tranches, provided, however, that each Tranche shall be not less than Euro two
million five hundred thousand (EUR 2,500,000.00).

3.3
The maximum amount of the Facility is automatically reduced on each Reduction
Date by Euro one million two hundred fifty thousand (EUR 1,250,000.00).

3.4
The Lender shall make available, and the Borrowers shall repay, the Facility in
Euros.

4
BORROWERS' LIABILITY

Joint and several Liability. The Borrowers shall be jointly and severally liable
(gesamtschuldnerisch) for any and all amounts that may from time to time be owed
actually or contingently to the Lender pursuant to or in connection with this
Agreement and the Security Documents.

 
10

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5
AVAILABILITY

5.1
Availability of Tranches. Any of the Tranches shall be made available in
accordance with Clauses 2, 3 and 4 and upon the Borrowers’ compliance with the
terms and conditions as set out in this Clause 5.

5.2
Drawdown Notice. Not less than (3) Banking Days prior to any Drawdown of any of
Tranches, the Borrowers shall execute and deliver to the Lender a drawdown
notice in the form of Exhibit 1 attached hereto.

5.3
Conditions Precedent. It is a condition precedent to any Drawdown that prior to
or at least simultaneously with the relevant Drawdown

5.3.1
the representation and warranties contained in Clause 17 shall be true and
correct;

5.3.2
none of the circumstances specified in Clause 11 is subsisting;

5.3.3
no Event of Default has occurred and is continuing under this Agreement and
under the Existing Loan Agreement;

5.3.4
the following conditions shall be met to the satisfaction of the Lender:

5.3.4.1
the Lender has received payment of the fees and expenses specified in Clause 6
to the extent due and payable;

5.3.4.2
the Lender has received the documents and evidence as more closely stipulated in
the list of conditions precedent attached hereto as Schedule 2.

6
FEES AND COMMISSIONS

6.1
Arrangement Fee. A non-recurring arrangement fee of two point five (2.5) percent
of the maximum amount of the Facility due and payable on the earlier of (i) the
first Drawdown of any Tranche hereunder or (ii) 30th December, 2010.

6.2
Commitment Fee. The Borrowers shall pay to the Lender a commitment fee of one
(1) percent p.a. calculated on the undrawn amount of the Facility and calculated
on the actual number of days elapsed in a year on a 360-day basis and for the
last time on the earlier of (i) the Commitment Termination Date or (ii) the date
on which the Commitment ceases for any other reason.

The commitment fee shall be due and payable quarter-annually from the date of
this Agreement in arrears, for the first time on 30th December 2010.

6.3
Prepayment Fee. The Borrowers shall pay to the Lender a prepayment fee of (i)
Euro sixty thousand (EUR 60,000.00) for a prepayment of the Facility in full on
or before 30th June, 2011, (ii) Euro forty thousand (EUR 40,000.00) for a
prepayment of the Facility in full between 1st July, 2011 and 31st December,
2011, and (iii) Euro twenty thousand (EUR 20,000.00) for a prepayment of the
Facility in full between 1st January, 2012 and 30th June, 2012. In case of a
partial prepayment of the Facility, the prepayment fee shall be reduced by the
ratio of (i) the part of the Facility to be prepaid to (ii) the total
outstanding Facility.

The prepayment fee shall be due and payable on or before the date of the
relevant prepayment.

 
11

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7
INTEREST

7.1
Obligation to pay Interest. The Borrowers hereby undertake to pay to the Lender
from the day the first Drawdown is made interest on the principal amount of the
Facility outstanding from time to time and on any accrued and unpaid interest
(both before and after judgement) (provided such interest on accrued and unpaid
interest is allowed under applicable law) on the Facility at any time
outstanding.

7.2
Interest Rates. The Borrowers shall pay to the Lender interest on the Tranches
outstanding at the Interest Rate.

7.3
Fixed Funding Costs. The amount of the Fixed Funding Costs will be notified by
the Lender to the Borrowers latest within two (2) Banking Days prior to the
drawdown of any Tranche under this Agreement. Following the Lender’s
notification, the Borrowers shall advise the Lender in writing latest on the
relevant Drawdown Date whether they agree to the amount of the Fixed Funding
Costs. The Fixed Funding Costs shall be binding on the parties until the Final
Maturity Date. If the Borrowers notify the Lender that they do not agree to the
amount of the Fixed Funding Costs, or do not notify the Lender within the time
limit referred to above, this Agreement shall be deemed terminated as of receipt
by the Lender of the Borrowers' notice or the expiry of the aforesaid time
limit, as the case may be, and the Borrowers shall forthwith repay any
Outstanding Indebtedness, if any, on the last of the then prevailing Interest
Period.

7.4
Notice of Interest Rates by Lender. As soon as practicable the Lender shall give
the Borrowers notice of the Interest Rates being applicable from time to time.

7.5
Method of Calculating. Interest on the Relevant Tranche shall be calculated on
the basis of the actual number of days elapsed and a three hundred sixty (360)
days year.

7.6
Payment Intervals. Interest shall always be due and payable in arrears on the
Interest Payment Date, provided, however, that

7.6.1
if an Interest Period would otherwise end on a day which is not a Banking Day,
that Interest Period shall be extended to the next succeeding day which is a
Banking Day, unless the result of such extension would be to carry such Interest
Period over into another calendar Month, in which event such Interest Period
shall end on the preceding Banking Day;

7.6.2
any Interest Period which would otherwise extend beyond the Final Maturity Date
shall be of such duration that it shall end on that date.

7.7
Whenever pursuant to the provisions of Clause 8 hereof the Borrowers become
obligated to repay a Tranche in full or in part on a Reduction Date, the
Borrowers shall in respect of such Tranche be deemed to have nominated an
Interest Period of such duration so as to ensure that the same shall expire on
the due date for repayment by the Borrowers of such Tranche.

7.8
Duration of Interest Periods. Any Interest Period shall be of a duration of
three (3) Months.

7.9
Synchronization of Interest Periods. The Lender shall have the right to
synchronize Interest Periods and the Borrowers shall fully co-operate with the
Lender to this effect.

8
REPAYMENT

8.1
The Borrowers shall repay the Facility to the Lender latest on the Final
Maturity Date.

 
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8.2
The Borrowers shall repay those amounts on each Reduction Date so that the
maximum amount of the Facility is in line with the provisions of Clause 3.3,
each repayment to be accompanied by a notice by the Borrower stating which
Tranches are being repaid in whole or in part.

9
VOLUNTARY AND MANDATORY PREPAYMENT

9.1
Prepayment. The Borrowers may prepay any of the Tranches in whole or in whole
multiples of Euros two hundred fifty thousand (EUR 250,000.00). Any such
prepayment shall only be permitted provided the Lender shall have received not
less than ten (10) Banking Days prior to the proposed date of the prepayment
irrevocable written notice of the amount to be prepaid and of the Tranche to
which such prepayment shall be applied.

9.2
Re-Borrowing. The Borrowers may re-draw any sum prepaid, provided the condition
precedent for such new Drawdown are fulfilled in accordance with Clause 5.3. and
all other terms and conditions set forth herein are complied with.

9.3
Prepayment Notice. Any notice of prepayment given by the Borrowers shall be
irrevocable and the Borrowers shall be bound to prepay in accordance with such
notice, such notice to specify which Tranche is to be prepaid in whole or in
part

9.4
Mandatory Prepayment in case of sale or Total Loss or private equity placement.
If any of the Vessels is sold or declared a Total Loss the Borrowers shall
provide the Lender with an evaluation of the Fair Market Values of all Vessels,
such evaluation being not older than three (3) Months and being prepared by a
broker or expert accepted by the Lender, unless the Lender has evaluated the
Vessels' Fair Market Value and such evaluation is not older than three (3)
Months.

9.4.1
In case of a sale or Total Loss of any of the Vessels the Borrowers shall make a
mandatory prepayment in accordance with this Clause.

9.4.1.1
In case of the sale or Total Loss of a Vessel the Borrowers shall prepay an
amount equalling the Relevant Vessel's Facility Ratio of the Facility Amount.

9.4.1.2
In case of a Total Loss the prepayment shall be made upon receipt of the
insurance proceeds in respect of the Total Loss, however not later than forty
five (45) days after the occurrence of the Total Loss, unless either an Event of
Default has occurred or the loans to fair market values ratio requirements as
set out in clause 18.2 of the Existing Loan Agreement are not met in which case
the prepayment shall be made within thirty (30) days after the Total Loss has
been declared or upon receipt of the insurance proceeds in respect of the Total
Loss, whichever is the earlier.

9.4.1.3
In case of a sale of a Vessel the prepayment shall be made on or before the
delivery of the Relevant Vessel to the purchasers.

9.4.2
In case that in addition to the amount of Euro eighteen million one hundred
forty thousand (EUR 18,140,000.00) to be provided to the Borrowers in the
aggregate in form of equity capital or shareholder loans and in addition to any
short term loans (with a term of 364 days or less) provided to the Borrowers for
the sole purpose of covering any liquidity shortfall, (i) an increase of the
equity of any of the Borrowers by way of capital contribution, debt-to-equity
swap, private or public placement or otherwise occurs or (ii) one or more
shareholder loans are provided to the Borrowers or (iii) any other form of
liquidity supply is provided to the Borrowers, the Borrowers shall prepay an
amount equalling such additional received equity, shareholder loan or other
liquidity supply, as the case may be, on the date such equity, shareholder
loans, or liquidity supply, as the case may be, is received by the Borrowers.

 
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Any payments pursuant to this Clause 9.4 shall only be due and payable hereunder
upon full payment of (i) in case of a sale or Total Loss, the amounts due and
payable under the Existing Loan Agreement in connection with such sale or Total
Loss, and (ii) the ongoing guarantee fee pursuant to clause 10.9.9 of the
Existing Loan Agreement, in accordance with the terms and conditions of the
Existing Loan Agreement.

Any mandatory prepayments pursuant to this Clause 9.4 shall reduce the maximum
amount of the Facility irrespective of and in addition to any reduction pursuant
to Clause 3.3.

9.5
Breakage Costs. In case the Lender receives an obligatory or voluntary
prepayment for any reason whatsoever on a day other than the last day of the
then current Interest Period relating to such amount, the Borrowers shall pay to
the Lender on request the amount required to compensate the Lender in full for
any loss, premium or penalty incurred by them in respect of the liquidation or
re-employment of funds borrowed for the purpose of maintaining the amount
prepaid.

10
PAYMENTS

10.1
Payment to the Borrowers. The Borrowers shall specify to the Lender at least
three (3) Banking Days prior to each date on which a payment is to be made to
the Borrowers hereunder the account to which such payment shall be made.

10.2
Payments by the Borrowers. All payments to be made by the Borrowers under this
Agreement or any of the Exhibits shall be made in freely transferable and
convertible funds in the relevant currency in which the relevant Tranche is
denominated by that time not later than 11.00 a.m. Hannover time on the date
upon which the relevant payment is due to the Lender to the account the Lender
nominates by written notice to the Borrowers.

10.3
Payments on non Banking Days. In the event that the date on which a payment is
due to be made hereunder is not a Banking Day, such date of payment shall be the
next following Banking Day unless it would thereby fall in a new calendar Month
in which event it shall be the immediately preceding Banking Day unless the
Borrowers and the Lender shall agree otherwise.

10.4
Default Interest. In the event that any payment to be made hereunder by the
Borrowers to the Lender is not received on the due date therefore, interest will
be charged by the Lender from the due date until the date that payment is
received at a rate which is equal to the aggregate of

10.4.1
One-week EURIBOR applying on the due date for payment and on each succeeding
Banking Day until payment in full of the amount due is received by the Lender,
provided that if the Lender determines that such default may be reasonably
expected to continue unremedied for a period exceeding one (1) week then the
Lender may require by notice to the Borrowers that the funding cost shall be
determined by reference to the EURIBOR for periods of such duration (not
exceeding three (3) Months) as the Lender may designate,

10.4.2
the Margin,

10.4.3
the Fixed Funding Cost, and

10.4.4
a default funding charge of two (2) per cent per annum.

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Interest charged under this sub-clause shall be payable on demand and unless so
paid shall be added to the defaulted amount at the end of each Month following
the due date for payment of such amount. Nothing herein shall limit the right of
the Lender to claim from the Borrowers further compensation for damages suffered
(Schadenersatz) as a result of the Borrowers having failed to pay any amount in
respect of interest payable by them under this Agreement or any of the Security
Documents on the due date for such payment. However, the Borrowers shall retain
the right to prove that the damages suffered by the Lender were less or that the
Lender have not suffered any damage.

10.5
No Set-Off by Borrowers. All payments to be made by the Borrowers hereunder
shall be made without set-off or counterclaim.

10.6
Clear of Taxes. All payments to be made by the Borrowers hereunder shall be made
free and clear of and without deduction for or on account of any present or
future Taxes of any nature now or hereafter imposed unless the Borrowers are
compelled by law to make payment subject to any such Taxes. In that event the
Borrowers shall (i) pay to the Lender such additional amounts as may be
necessary to ensure that the Lender receive a net amount equal to that which it
would have received had such payment not been made subject to any Taxes, and
(ii) deliver to the Lender within ten (10) days of any request by it an official
receipt in respect of the payment of any Taxes so deducted.

10.7
Compensation of Lender. If any amount of principal is, for any reason whatsoever
prepaid on a day other than the last day of the then current Interest Period
relating to such amount the Borrowers shall pay to the Lender on request such
amount as may be necessary to compensate the Lender for any loss or premium or
penalty incurred by them in respect of the liquidation or re-employment of funds
borrowed for the purpose of maintaining the amount prepaid.

10.8
Interest Calculation Method. Interest and any other payments under this Clause
of an annual nature shall accrue from day to day and be calculated on the basis
of the actual number of days elapsed and a year of three hundred sixty
(360) days.

10.9
Priority of Payments, Waterfall. All moneys (unless otherwise stipulated by this
Agreement) received by the Lender under this Agreement shall be applied in the
following order:

10.9.1
in satisfaction of all costs and expenses of the Lender then accrued hereunder
and unpaid,

10.9.2
in satisfaction of any accrued interest then due on the Facility;

10.9.3
in satisfaction of any principal of the Facility then outstanding;

10.9.4
the balance (if any) will be released to the Borrowers.

10.10
Pro rata Application. If several of the claims mentioned above have the same
ranking, the monies received shall be applied pro rata.

11
SUBSTITUTE RATE AND SUBSTITUTE BASIS

11.1
Change in Circumstances. If at any time prior to the commencement of any
Interest Period the Lender shall have determined (which determination shall save
in case of manifest error be conclusive and binding on the Borrowers) that:

11.1.1
by reason of circumstances affecting the Interbank Markets adequate and fair
means do not exist for ascertaining the interbank rate applicable to the
Facility or any part thereof during such Interest Period, or

 
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11.1.2
deposits in an amount or amounts required for the Facility or the relevant part
thereof for the duration of such Interest Period are not available to the Lender
in the Interbank Markets in sufficient amounts in the ordinary course of
business, or

11.1.3
the cost of the Lender for funding the Facility or any part thereof in the
Interbank Markets would be higher than the aggregate of EURIBOR, and twenty five
(25) percent of the Margin for the relevant Interest Period,

the Lender in each case shall as soon as practicable give notice of such
determination to the Borrowers and the provisions of the following paragraphs
shall apply.

11.2
Substitute Rate. In case no means exist for ascertaining the interbank rate as
per Clause 11.1.1, the Lender, during a period of ten (10) Banking Days from the
date of any such notice given pursuant to Clause 11.1, shall certify to the
Borrowers (a) an alternative method of fixing the rate of interest (the
"Substitute Rate") which shall reflect (i) the cost to the Lender of funding the
Facility or any part thereof from the Interbank Markets or other sources, as the
case may be, and (ii) the Margin, and (b) the cost of establishing alternative
Interest Periods, if applicable. In establishing the Substitute Rate the Lender
shall have regard to reasonable wishes of the Borrowers and shall use to the
extent it is reasonably possible its best efforts to reduce its costs of funding
the Facility.

The Borrowers shall notify the Lender in writing within five (5) Banking Days of
the receipt of such certificate from the Lender whether or not they accept such
Substitute Rate. If the Borrowers so accept in writing, or do not notify the
Lender whether or not they accept as aforesaid, such Substitute Rate shall apply
in accordance with its terms. In case the Borrowers notify the Lender in writing
that they do not accept such Substitute Rate, then the Borrowers and the Lender
shall enter into negotiations (for a period of not more than thirty days) with a
view to agreeing on the Substitute Rate for determining the rate of interest.
Should the Borrowers and the Lender not agree on the Substitute Rate, then the
Borrowers shall prepay to the Lender the Facility or any part thereof to which
this Article applies on the next Interest Payment Date in the currency the
Facility or any part thereof was funded together with interest thereon at the
Interest Rate applicable to the immediately preceding Interest Period.

11.3
Review of Circumstances (Substitute Rate). As long as the Substitute Rate
applies, the Lender, in consultation with the Borrowers, shall in sufficient
time prior to the end of any Interest Period review whether the circumstances
are such that a interbank rate may again be determined.

11.4
Substitute Basis. In case deposits in EUR are not available to the Lender as per
Clause 11.1.2 above, the Lender, during a period of ten (10) Banking Days from
the date of any such notice pursuant to Clause 11.1, shall certify to the
Borrowers an alternative basis (the "Substitute Basis") for maintaining the
Facility or any part thereof. Such Substitute Basis may include an alternative
method of fixing the rate of interest (which shall reflect the cost to the
Lender of funding the Facility or any part thereof from other sources plus the
Margin), alternative currencies for the Facility or any part thereof, and in
establishing such Substitute Basis the Lender shall have regard to the
reasonable wishes of the Borrowers and shall use to the extent it is reasonably
possible their best efforts to reduce its costs of funding the Facility.

The Borrowers shall notify the Lender in writing within five (5) Banking Days of
receipt of such certificate from the Lender whether or not they accept such
Substitute Basis. In case the Borrowers so accept, such Substitute Basis shall
apply in accordance with its terms. In case the Borrowers do not accept or do
not notify whether or not they accept as aforesaid, then the Borrowers and the
Lender shall enter into negotiations (for a period of not more than thirty days)
with a view to agreeing on the Substitute Basis. Should the Borrowers and the
Lender not agree on the Substitute Basis, then the Borrowers shall prepay to the
Lender the Facility or any part thereof to which this Clause applies on the next
Interest Payment Date together with interest thereon at the Interest Rate
applicable to the immediately preceding Interest Period.
 
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11.5
Review of Circumstances (Substitute Basis). As long as the Facility or any part
thereof is maintained on the Substitute Basis, the Lender, in consultation
between the Lender with the Borrowers, shall in sufficient time prior to the end
of any Interest Period review whether the circumstances are such that the
Facility or the respective part thereof may be funded again in the London
Interbank Market.

11.6
Necessary Amendments to Security Documents. If a Substitute Rate or a Substitute
Basis comes into effect or if the interbank rate as per Clause 11.1.1 or the
Interbank Market again governs the Facility or any part thereof, both pursuant
to the terms of this Clause, the Borrowers agree to execute, deliver, record and
endorse at their own expense amendments to the Security Documents reflecting the
same and such other documents as the Lender shall reasonably request in order to
maintain the validity of any of the Security Documents.

12
SECURITY

The Outstanding Indebtedness shall be secured in accordance with this Clause.

12.1
General Rules applicable to this Clause and the Security mentioned herein. It is
hereby expressly agreed that

12.1.1
the collateral listed herein shall serve as security for the Outstanding
Indebtedness,

12.1.2
whenever reference is made in this Clause to an assignment of rights, this shall
include, unless otherwise expressly stipulated, the execution of the notices
related to such assignment and the Lender's right to make use of such notices
and to notify the debtor about the assignment at any time.

12.2
The Facility shall be secured by:

12.2.1
the Acknowledgement and Submission and the Hypothec;

12.2.2
an amendment agreement amending the security purpose of certain security
documents granted under and in connection with the Existing Loan Agreement,
namely of the Vessels' Insurances and Earnings and of pledges of earnings
accounts in favour of the Lender;

provided, however, that all moneys received by the Lender under the Security
Documents set forth in Clause 12.2.1 and Clause 12.2.2 shall be applied in the
following order of priority

 
(i)
firstly on the indebtedness outstanding under the Existing Loan Agreement other
than in relation to the indebtedness outstanding under the credit facility
entitled 'Credit Facility' of the Existing Loan Agreement and

 
(ii)
secondly on the indebtedness outstanding under the credit facility entitled
'Credit Facility' of the Existing Loan Agreement,

 
(iii)
thirdly on the Outstanding Indebtedness hereunder.

13
INSURANCES

13.1
Insurance Conditions. The Borrowers (without prejudice to the terms of the
assignments of insurances referred to in Clause 12) hereby agree that all the
Insurances regarding the Vessels shall be taken out by first class international
underwriters of recognized standing and assigned to the Lender and further
agree:

 
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13.1.1
to insure and keep insured the Vessels against fire, marine and other risks
(including Excess Risks) and War Risks in United States Dollar or such other
currency as may be approved in writing by the Lender at the Borrowers’ own
expense in the full Insurance Value but in no event for less than one hundred
and twenty (120) percent of the aggregate of (i) the total amount outstanding
under the relevant tranche in relation to the Relevant Vessel under the Existing
Loan Agreement, and (ii) Euro one Million (EUR 1,000,000.00);

13.1.2
to enter the relevant Vessel in the name of the Relevant Borrower for its full
value and tonnage in a protection and indemnity association approved by the
Lender against all protection and indemnity risks with highest available limit
of liability (except for the case of oil pollution which shall be covered to the
highest limit for the type of the Vessel accepted by first class protection and
indemnity associations);

13.1.3
to effect war risk insurance (hull and P&I), including cover in respect of
vandalism, sabotage and malicious mischief as well as the London Blocking and
Trapping Addendum, the war P&I cover having a separate limit for the same
amounts insured under the war hull cover, and such additional Insurances and at
such terms and such conditions as shall in the reasonable opinion of the Lender
be necessary or advisable;

13.1.4
Loss of Hire to be taken out for a period of 14/180/180 days or another period
approved by the Lender subject to ABS 1/10/83 Wording - including war, NMIP 1996
- Chapter 16, or equivalent conditions. Loss of Hire war can be taken out under
separate basic war risks insurance; the Loss of Hire insurance shall contain an
automatic renewal clause;

13.1.5
to effect the Insurances upon such terms as shall from time to time be approved
in writing by the Lender and through such brokers (the "Approved Brokers") and
with such insurance companies, underwriters, war risks and protection and
indemnity associations as shall from time to time be approved in writing by the
Lender;

13.1.6
to procure that a Loss Payable Clause in the form attached as exhibit 12 of the
Existing Loan Agreement and being attached to the assignment of Insurances as
per exhibits 7 and 8 of the Existing Loan Agreement are included in all policies
relative to the Insurances referred to in this Clause;

13.1.7
to renew the Insurances at least fourteen (14) days before the relevant policies
or contracts expire and to procure that the Approved Brokers shall promptly
confirm in writing to the Lender as and when each such renewal is effected;

13.1.8
punctually to pay all premiums, calls contributions or other sums payable in
respect of the Insurances and to produce to the Lender all relevant receipts
when so required by the Lender;

13.1.9
to arrange for the execution of such guarantees as may from time to time be
required by any protection and indemnity or War Risks association;

13.1.10
to procure that the interest of the Lender shall be duly endorsed upon all
slips, cover notes, policies, certificates of entry or other instruments of
insurance issued or to be issued in connection with the Insurances aforesaid and
to procure that the said slips, cover notes, policies, certificates of entry or
other instruments of insurance issued or to be issued shall provide for fourteen
(14) days prior written notice to be given to the Lender by the Approved Brokers
in the event of cancellation of Insurances;

 
18

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13.1.11
to procure that all such instruments of insurance as are referred to in Clause
13.1.10 hereinabove shall be deposited with the Lender or with the Approved
Brokers and that such brokers shall provide the Lender with certified copies
thereof and a letter or letters of undertaking in the form of exhibit 13 of the
Existing Loan Agreement or in another form acceptable to the Lender;

13.1.12
to procure that the protection and indemnity and/or war risks association
wherein the Vessels are entered shall provide the Lender with a copy of the
Certificate of Entry and a letter or letters of undertaking in such form as may
be required by the Lender and in the case of the protection and indemnity
association such letter of undertaking shall be in the form of exhibit 14 of the
Existing Loan Agreement or in another form acceptable to the Lender;

13.1.13
to promptly provide the Lender with full information regarding any casualty or
other accident or damage to any of the Vessels involving an amount in excess of
the lesser of (i) five (5) percent of the amount insured and (ii) Euros one
million (EUR 1,000,000.00), or in consequence whereof any of the Vessels has
become or may become a Total Loss;

13.1.14
not to do any act nor voluntarily suffer nor permit any act to be done whereby
any Insurance shall or may be suspended or avoided and not to suffer nor permit
any of the Vessels to engage in any voyage nor to carry any cargo not permitted
under the Insurances in effect without first covering the relevant Vessel to the
amount herein provided for with insurance satisfactory to the Lender for such
voyage or the carriage of such cargo and (without limitation to the generality
of the foregoing) in particular not to permit any of the Vessels to enter or
trade to any zone which is declared a war zone by any Government or by the
relevant Vessel's War Risks Insurers unless the Borrowers have effected at their
expense such special insurance as the Lender may require and the Lender has
received sufficient evidence from the underwriters of the existence of such
insurance cover;

13.1.15
to apply all amounts available in respect of the Insurances as are paid to the
Borrowers to the repair of the damage and the reparation of the loss in respect
of which the said amounts shall have been received or to the reimbursement of
the Borrowers or operators for monies expended by it/them for repair of the
damage or loss;

13.1.16
that according to general principles of insurance law the Lender shall be
entitled to inform the Approved Broker through which the Insurances referred to
in Clause 13.1 are effected about facts and/or circumstances which could be
material for the decision to accept the risk of such Insurances and for the rate
of premium;

13.1.17
ensure that, if any of the Vessels shall be insured under any form of fleet
cover, there shall (unless otherwise agreed by the Lender) be contained in such
letters of undertaking, inter alia, undertakings that the brokers, underwriters,
association or club (as the case may be) will not set off claims relating to the
relevant Vessel against premiums, calls or contributions in respect of any other
vessel or other insurance, and that the insurance cover of the relevant Vessel
will not be cancelled by reason of non-payment of premiums, calls or
contributions relating to any other vessel or other insurance; failing receipt
of such undertaking, the Borrowers will instruct the brokers, underwriters,
association or club concerned to issue a separate policy or certificate of entry
for the Relevant Vessel in the sole name of the Relevant Borrower or its brokers
as agents for the Relevant Borrower.

 
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13.2
MII/MAP. The Lender shall be entitled to take out in its own name

13.2.1
a Mortgagee's Interest insurance covering an amount at least equal to one
hundred twenty percent (120%) of the aggregate maximum amount of the Facility
and the loans granted under the Existing Loan Agreement being outstanding at
that time, and

13.2.2
an Additional Perils (Oil Pollution) insurance covering an amount at least equal
to one hundred twenty percent (120%) of the aggregate maximum amount of the
Facility and the loans granted under the Existing Loan Agreement being
outstanding at that time.

 
Any cost arising from such insurances as mentioned in Sub-Clauses 13.2.1 and
13.2.2 shall be conclusively notified by the Lender to the Borrowers and shall
be borne by the Borrowers.

13.3
US Waters. Should the Vessels or any of them be operated by any of the
Borrowers, any operator or charterer within US territory waters (200 miles zone)
or should it be intended to enter any US harbour then the Borrowers shall inform
the Lender accordingly and are obliged to insure such Vessel against all risks
as the Lender deems necessary by first class underwriters (e.g. maximum
available additional oil pollution cover in excess of the oil pollution cover
provided by the P&I Club, drug seizure etc.).

14
ENVIRONMENTAL MATTERS

14.1
Definitions. In this Clause

14.1.1
"Environmental Approval" means any approval, licence, permit, exemption or
authorisation required under any applicable Environmental Law; and

14.1.2
"Environmental Claim" means:

14.1.2.1
any claim by any governmental, juridical or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or which
relates to any Environmental Law; and

14.1.2.2
any claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident; whereby "claim" means a claim for damages,
compensation or any other payment of any kind; an order or direction to take
certain action or to desist from or suspend certain action, and any form of
enforcement or regulatory action, including the arrest or attachment of any
asset; and

14.1.3
"Environmental Incident" means:

14.1.3.1
any release or potential release of Environmentally Sensitive Material from any
of the Vessels; and

14.1.3.2
any incident in which Environmentally Sensitive Material is released or
threatened to be released from any of the Vessels and which involves a collision
between any of the Vessels and another vessel or some incident of navigation or
operation, in either case, in connection with which that Vessel is actually or
potentially liable to be arrested and/or that Vessel or any of the Borrowers
and/or any operator or the Manager is at fault or allegedly at fault or
otherwise liable to any legal or administrative action; and

14.1.3.3
any other incident in which Environmentally Sensitive Material is released or
threatened to be released otherwise than from any of the Vessels and in
connection with which any of the Vessels is actually or potentially liable to be
arrested and/or where any of the Borrowers and/or any operator or the Manager of
that Vessel is at fault or allegedly at fault or otherwise liable to any legal
or administrative action; and

 
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14.1.4
"Environmental Law" means any law relating to pollution or protection of the
environment, to the carriage of Environmentally Sensitive Material or to actual
or threatened releases of Environmentally Sensitive Material; and

14.1.5
"Environmentally Sensitive Material" means oil, oil products and any other
substance (including any gas) which is (or is capable of being or becoming)
polluting, toxic or hazardous, except for those materials for whose transport
the vessels are dedicated and used for in the ordinary course of their business.

14.2
Borrowers’ Undertakings. The Borrowers will:

14.2.1
comply with all applicable Environmental Laws and will maintain in force and
promptly obtain or renew all Environmental Approvals required to operate its
business as from time to time conducted or reasonably anticipated to be
conducted;

14.2.2
notify the Lender forthwith in writing upon:

14.2.2.1
any Environmental Claim being made against them and/or any operator or the
Manager for the time being of any of the Vessels, or otherwise in connection
with any of the Vessels; and

14.2.2.2
any Environmental Incident occurring;

14.2.3
keep the Lender advised in writing on such regular basis and in such detail(s)
as the Lender shall require, of their response to any Environmental Claim made
in connection with any of the Vessels or Environmental Incident;

14.2.4
to indemnify the Lender against any losses and/or costs and/or taxes of
whatsoever nature they might incur deriving from an Environmental Claim or an
Environmental Incident.

15
CHANGE OF CIRCUMSTANCES

15.1
Compensation of Lender. If

15.1.1
any law, regulation, treaty or official directive (whether or not having the
force of law) or the interpretation thereof by any authority charged with the
administration thereof:

15.1.1.1
subjects the Lender to any Taxes with respect to payments of principal or of
interest on the Facility or any other amount payable hereunder (other than Tax
assessed, levied or collected on the overall net income of the Lender); or

15.1.1.2
changes the basis of taxation of payments to the Lender of principal or of
interest on the Facility or of any other amount payable hereunder (other than a
change in the basis of taxation on the overall net income of the Lender); or

15.1.1.3
imposes, modifies or deems applicable any reserve and/or special deposit
requirements against or in respect of assets or liabilities of, or deposits with
or for the account of, or loans or credits extended by any office of the Lender;
or

15.1.1.4
imposes on the Lender any other condition affecting this Agreement, other than
interest, the Commitment or the Facility or its funding; or

 
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15.1.1.5
the Lender complies with any request, law, regulation or directive from any
competent fiscal or monetary authority (whether or not having the force of law);

15.1.2
and as a result of any of the foregoing either directly or indirectly

15.1.2.1
the costs to the Lender of making, funding or maintaining the Facility or of
maintaining the Commitment are increased; or

15.1.2.2
the amount of principal or any other amount payable to the Lender hereunder is
reduced, other than interest; or

15.1.2.3
the Lender makes any payment or foregoes any interest or other return on or
calculated by reference to the gross amount of any sum receivable by it from the
Borrowers hereunder;

then and in each case upon demand from time to time the Borrowers shall pay to
the Lender such amount as shall compensate the Lender for such increased costs,
reduction, payment or foregone interest or other return. If the Lender is
entitled to make a claim pursuant to this Clause, the Lender shall notify the
Borrowers of the event by reason of which it is so entitled. The Lender shall
submit to the Borrowers a letter setting out details of the event giving rise to
such compensation, the amount thereof and the manner in which it has been
calculated, in the absence of manifest error such letter shall be conclusive.

In such a case the Borrowers may prepay the Facility in accordance with Clause 9
together with all interest accrued thereon and all fees and other amounts
(including amounts payable referred to above) owing to the Lender hereunder, but
without penalty.

15.2
Tax. If any amount payable by the Borrowers hereunder whether in respect of
principal, interest or otherwise is or becomes subject at any time to taxation
in the Federal Republic of Germany or any other country, except for taxes on the
overall income of the Lender, the Borrowers will indemnify the Lender of such
amount in respect of such tax liability so that the Lender receives or retains a
net sum equal to the amount it would have received or retained had there been no
such tax liability but if the Lender shall be or become entitled to any tax
credit or relief in respect of any such tax liability or deduction and if the
Lender in its sole determination actually receives a benefit from such tax
credit or relief in its relevant country of domicile, incorporation or
residence, the Lender shall, subject to any laws or regulations applicable
thereto, pay to the Borrowers after such benefit is effectively received by the
Lender such amount (which shall be conclusively certified by the Lender) as
shall ensure that the net amount actually retained by that recipient is equal to
the amount which would have been retained if there had been no such liability or
deduction. In addition the Borrowers shall indemnify the Lender of any sum
payable by the Borrowers under this Agreement against any liability for taxes in
the Federal Republic of Germany or any other country, imposed on the Lender by
virtue of the negotiation, preparation or execution of this Agreement, and/or
the Security Documents the performance of any duty or discharge of any liability
hereunder and/or under the Security Documents or the receipt of any payment
hereunder and/or under the Security Documents.

15.3
Change of Law. Notwithstanding anything to the contrary herein contained, if any
change in law, regulation or treaty or in the interpretation or application
thereof by any authority charged with the administration thereof shall make it
unlawful for the Lender to make, fund or maintain the Facility, the Lender may
by written notice of the Lender to the Borrowers declare that the Lender's
obligations hereunder shall be terminated forthwith whereupon the Borrowers will
prepay forthwith (or if permitted by law on the next following Interest Payment
Date) the Facility together with all interest accrued thereon and all fees and
other amounts payable to the Lender hereunder, provided, however, that no
penalty shall be payable. The Lender's obligations and liabilities hereunder and
its Commitment shall be cancelled on the giving of such Lender's notice. In any
such event, but without prejudice to the aforesaid liability of the Borrowers to
prepay the Facility the Borrowers and the Lender shall negotiate in good faith
with a view to agreeing terms for making the Facility available from another
jurisdiction, or funding the Facility from alternative sources, or otherwise
restructuring the Facility on a basis which is lawful.

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16
BASEL II

If the Lender's basis of calculation of the Facility under applicable Basel II
or Basel III regulations or any subsequent Basel accord or any amendment or
modification thereto or any other rule, law or regulation with a similar effect
changes due to a change in any of the Obligors' general financial position
and/or rating, the Lender may reassess the Margins in order to adopt the Margins
to the new calculation basis and thus determine new margins (the “New Margins”),
provided, however, that such adoption shall take effect not earlier than the
Margin Day. The Lender shall notify the Borrowers about the New Margins in
writing. The New Margins shall apply from the day the next Interest Period
commences however not earlier than one (1) Month after the Borrowers having
received the Lender’s notice to this effect.

Upon receipt of the Lender’s notice of New Margins representing an increase
towards the then current Margins the Borrowers may prepay the Facility on the
last Interest Payment Date immediately preceding the date on which the New
Margin shall commence, provided that the Lender has received not less than
fourteen (14) Business Days prior to such last Interest Payment Date the
Borrowers’ written notice to this effect.

The Borrowers may make such prepayment without paying the Lender any penalty
but, as provided in Clause 9.6, the Borrowers shall reimburse the Lender on
demand for any breakage cost, proven out-of-pocket expenses and legal fees the
Lender incur due to such prepayment.

17
REPRESENTATIONS AND WARRANTIES

Borrowers Representation and Warranties. The Borrowers hereby represent and
warrant to and for the benefit of the Lender that, as on the date hereof and on
each Drawdown Date and on each Interest Payment Date and on each Repayment Date:

17.1
the Borrowers are limited partnerships duly organized and validly existing under
the laws of the Federal Republic of Germany;

17.2
the Borrowers have the perpetual corporate existence and power to enter into
this Agreement and each of the documents to which they are a party and to borrow
and perform their obligations hereunder and thereunder and have taken all
necessary corporate or other actions required to authorize the execution,
delivery and performance of this Agreement and those of the documents to which
they are a party;

17.3
the execution, delivery and performance of this Agreement and each of the
documents to which any of the Borrowers is a party will not violate or exceed
the powers granted to it by, or any provisions of (a) any law or regulation in
any jurisdiction to which it is subject, (b) any order or decree of any
governmental agency or court of or in any jurisdiction to which it is subject,
(c) the constitutional documents, or (d) any mortgage, deed, contract or
agreement to which it is a party or which is binding upon it or any of its
assets;

17.4
no approval or consent from any governmental and quasi-governmental authorities
is necessary under applicable law for the execution and delivery of this
Agreement and any document and instrument delivered or to be delivered pursuant
hereto and the mortgaging of the Vessels to the Lender;

 
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17.5
there are no actions, suits or proceedings pending or threatened against or
affecting any of the Borrowers, its property at law or before any governmental
authority which may affect the Borrowers’ solvency or ability to pay their debts
or their ability to own the Vessels or affect a substantial part of any of the
Borrowers’ property and none of the Borrowers is in default with respect to any
order, writ, injunction, claim or demand of any court or any governmental
authority;

17.6
this Agreement, the consummation of the transactions herein contemplated and the
fulfilment of the terms hereof and the compliance by the Borrowers with all of
the terms and conditions of this Agreement and all documents and instruments
referred to herein and/or delivered pursuant hereto will not result in any
breach by them of the terms, conditions or provisions of, or constitute a
default under any indenture, bank loan or credit agreement or instrument to
which any of the Borrowers is bound and will not result in the creation of any
lien, charge or encumbrance (other than the Hypothec) upon any of the Borrower’s
property or assets;

17.7
there are no material facts or circumstances which have not been disclosed to
the Lender in writing which, if disclosed, might reasonably be expected to
adversely affect the decision of a person considering whether to provide finance
to the Borrowers;

17.8
in relation to the borrowing by the Borrowers of the Facility, the performance
and discharge of their obligations and liabilities hereunder and/or under the
Security Documents to which any of the Borrowers is a party, the Borrowers are
acting for their own account and the foregoing will not involve or lead to a
contravention of any law, official requirement or other regulatory measure or
procedure which has been implemented to combat "money laundering" (as defined in
Article 1 of the Directive (91/308/EEC) of the Council of the European
Communities, as from time to time amended);

17.9
this Agreement and each of the Security Documents constitute, or will
constitute, when executed and delivered, and, in case of the Hypothec, when
registered in the Ships Registry, legal, valid and binding obligations of the
Borrowers, enforceable against them in accordance with their respective terms,
subject to laws of bankruptcy, insolvency, liquidation or other laws affecting
generally creditors’ rights;

17.10
the Borrowers have not failed to pay any material sum when due or to perform any
material monetary obligation under the provisions of any agreement to which any
of them is a party or by which any of them may be bound and no event has
occurred and is continuing which entitles, or which with the giving of notice,
lapse of time or other condition would entitle, the other party or parties to
any such agreement to declare such indebtedness to be due and payable by the
Borrowers or any of them;

17.11
the Borrowers are not in default in the performance of any material non-monetary
obligation under the provisions of this Agreement or any other agreement to
which any of them is a party or by which any of them may be bound and no event
has occurred and is continuing which entitles, or which with the giving of
notice, lapse of time or other condition would entitle, the other party or
parties to terminate any such agreement; and

17.12
save as provided by applicable laws of bankruptcy, insolvency, liquidation or
similar laws of general application, the obligations of the Borrowers under this
Agreement rank and will rank at least pari passu in priority of payment,
security and in all other respects with all non-preferred indebtedness of the
Borrowers except with respect to maritime liens which according to applicable
law rank prior to the Hypothec, and

17.13
the Borrowers have not incurred any financial indebtedness other than financial
indebtedness disclosed to the Lender in writing, and

17.14
each of the Relevant Borrower's sole business is the owning and operation of the
Relevant Vessel and other than the Relevant Vessel it does not own other
substantial assets, and

 
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17.15
the financial information provided pursuant to Clause 19 hereof is complete,
accurate and not misleading in all material respects, and

17.16
the Equity Provider 2 shall be and remain a limited partner (Kommanditist) of
each of the Borrowers, such Equity Provider 2  holding at least twenty five (25)
percent of each of the Borrower's share capital, and

17.17
Dr. Niels Hartmann is the sole shareholder of (i) NH Beteiligungen
Geschäftsführungs-GmbH of Leer, Germany, being the sole general partner of NH
Beteiligungen GmbH & Co. KG of Leer, Germany and (ii) NH Beteiligungen GmbH &
Co. KG of Leer, Germany, being the sole shareholder of the General Partner, and

17.18
to the best of their knowledge, no Prohibited Payment has been made or provided,
directly or indirectly, by (or on behalf of) any of it, any of their
subsidiaries, their officers, directors or any other person acting on their
behalf to, or for the benefit of, any authority (or any official, officer,
director, agent or key employee of, or other person with management
responsibilities in, any authority) in connection with this Agreement or any
Security Document, and

17.19
none of the sources of funds to be used by the Borrowers in connection with any
payments to be made by the Borrowers or any of them under the Agreement or any
Security Document or its business are of Illicit Origin, and

17.20
the Facility will not be used to finance equipment or sectors under embargo
decisions of the United Nations, the World Bank, the European Union or Italy;
and

17.21
in relation to the borrowing of the Facility by the Borrowers, the performance
and discharge of their obligations and liabilities hereunder and/or under the
Security Documents and/or the opening of any account with the Lender, each of
the Borrowers is acting for its own account and the foregoing will not involve
or lead to a contravention of any law, official requirement or other regulatory
measure or procedure which has been implemented to combat “money laundering” (as
the term is defined in Article 1 of the Directive (91/308/EEC) of the Council of
the European Union). Should during the Security Period the Borrowers be acting
of the account of a third party, they will promptly furnish the Lender with
names and addresses of the respective economic beneficiaries; and

17.22
Reederei Hartmann is a company or corporation duly organized and validly
existing and in good standing under the laws of its incorporation; and

17.23
according to the Borrowers’ records and best knowledge there are no actions,
suits or proceedings pending or threatened against or affecting Reederei
Hartmann, its property at law or before any governmental authority which may
affect Reederei Hartmann's solvency or ability to pay its debts or affect a
substantial part of Reederei Hartmann's and according to the Borrowers’ records
and best knowledge Reederei Hartmann is not in default with respect to any
order, writ, injunction, claim or demand of any court or any governmental
authority; and

17.24
there are no material facts or circumstances which have not been disclosed to
the Lender in writing which, if disclosed, might reasonably be expected to
adversely affect the decision of a person considering whether to provide finance
to Reederei Hartmann.

 
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18
ASSET PROTECTION

18.1
Evaluation. The Borrowers covenant and undertake with the Lender that they will
from time to time annually upon request by the Lender, in any event not more
than twice per year, cause the Fair Market Value of the Vessels to be valued in
United States Dollars, Euros or British Pounds, such Fair Market Value being the
arithmetic average of the valuations provided by one (1) internationally well
reputed ship sale and purchase broker approved by the Lender, each such
valuation to be made, unless the Lender requests otherwise, without physical
inspection and on the basis of an arms-length transaction between willing buyer
and willing seller without taking into account any charter party of the Vessels
in force at the time of any such valuation and such broker being instructed to
deliver to the Lender the aforesaid valuation in writing. All costs arising in
connection with the obtaining of these valuations (including, but not limited
to, the fees of the relevant broker and surveyor) shall be borne by the
Borrowers.

18.2
Shortfall. If the aggregate of the Fair Market Values assessed in accordance
with Clause 18.1 at any time after the delivery of any or all Vessels shall be
less than one hundred twenty (120) percent of the then outstanding aggregate
balance of the long term tranches entitled 'Tranches LT' and the credit facility
tranches entitled 'Tranches CF' in the Existing Loan Agreement and the Facility,
then and in such case within a period of thirty (30) days following receipt by
the Borrowers of written notice from the Lender notifying the Borrowers of such
shortfall and specifying the amount thereof (which amount shall in the absence
of manifest error be conclusive and binding upon the Borrowers) either furnish
the Lender with such additional security as shall be acceptable to the Lender in
its sole discretion for the purpose of remedying such deficiency in security or
prepay to the Lender (together with interest accrued thereon and any costs
arising through such prepayment being made otherwise than at the end of an
Interest Period) such part of the Facility as shall be necessary to ensure
compliance with the provisions of this Clause. Any additional security required
as a result of the operation of this Clause is separate from and additional to
any other security provided or to be provided under the other provisions of this
Agreement and the Security Documents.

18.3
In addition to Clauses 18.1 and 18.2, the Borrowers undertake to the Lender that
if the ratio of the average Fair Market Values of the Vessels 10, 11 and 12 to
the then outstanding aggregate balance of the long term tranches entitled
'Tranches LT 1 - 12' and the credit facility tranches entitled 'Tranches CF 1 -
12' in the Existing Loan Agreement and the Facility is less than the ratio of
the average Fair Market Values of the Vessels 1 - 9 to the then outstanding
aggregate balance of the long term tranches titled 'Tranches LT 1 - 12' and the
credit facility tranches entitled 'Tranches CF 1 - 12' in the Existing Loan
Agreement and the Facility, it being understood that the Fair Market Values to
be assessed in each case in accordance with Clause 18.1, then and in such case
within a period of thirty (30) days following receipt by the Borrowers of
written notice from the Lender notifying the Borrowers of such shortfall and
specifying the amount thereof (which amount shall in the absence of manifest
error be conclusive and binding upon the Borrowers) to either furnish the Lender
with such additional security as shall be acceptable to the Lender in its sole
discretion for the purpose of remedying such deficiency in security or to prepay
to the Lender (together with interest accrued thereon and any costs arising
through such prepayment being made otherwise than at the end of an Interest
Period) such part of the Facility as shall be necessary to ensure that the above
described ratios are equal. Unless and until the Facility have been prepaid or
the additional security has been granted as described above, no dividend
payments by any of the Borrowers to any of their shareholders shall be
permitted. Any additional security required as a result of the operation of this
clause is separate from and additional to any other security provided or to be
provided under the other provisions of this Agreement and the Security
Documents.

19
UNDERTAKINGS

19.1
Financial Covenants

19.1.1
Each of the Borrowers undertakes to the Lender that during the Security Period
it will

19.1.1.1
maintain the Relevant Earnings Account with the Lender;

 
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19.1.1.2
have all Earnings of the Relevant Vessel paid into the Relevant Earnings
Account.

19.1.2
The Borrowers undertake to the Lender that during the Security Period they will:

19.1.2.1
not without the Lender's prior written consent assume, guarantee or endorse or
otherwise become or remain liable in connection with any obligation of any
person, firm, company or other entity;

19.1.2.2
not without the Lender's prior written consent authorize or accept any capital
commitments exceeding Euros one million (EUR 1,000,000.00), in the single or in
the aggregate, per Borrower other than those referred to and allowed in
accordance with Clause 19.1.2.3;

19.1.2.3
not enter into any shareholder loans and/or inter company borrowings other than
for the purpose of covering liquidity shortfalls due to different employment
situations of the Vessels provided, however that any such shareholder loans
and/or inter company borrowings shall be (a) fully subordinated to the
Borrowers' obligations hereunder, under the Existing Loan Agreement and under
the security documents granted pursuant to the Existing Loan Agreement, (b) on
terms and conditions acceptable to the Lender, (c) not amended, varied, changed
or supplemented without the prior written consent of the Lender and (d) not
terminated and/or accelerated for any reason whatsoever without the prior
written consent of the Lender ;

19.1.2.4
not create or permit to subsist any collateral over any of its assets with the
exception of (i) suppliers' collateral as common in trade or industry, such as
reservation of title or subsequent assignment by way of security, and (ii)
banking collateral as required by banks' general business conditions, and (iii)
the collateral created by the Security Documents and by the security documents
granted pursuant to the Existing Loan Agreement; provided, however, that in case
of the exceptions described in (i) and (ii) above the Borrowers shall secure
that the Lender participate before or at the same time and in the same rank in
this collateral or providing the Lender with equal collateral (pari passu),

19.1.2.5
not pay dividends, reduce any of its share capital or make other distributions
of a revenue or capital nature or payments of principal or interest on debt to
any officer, director, shareholder, employee or customer of any of the
Borrowers, unless and until the Outstanding Indebtedness has been repaid in full
to the satisfaction of the Lender and either (i) the Commitment Termination Date
has occurred or (ii) the Borrowers have waived their rights for re-borrowing
under Clause 9.2.

19.2
Covenants related to the Vessels

19.2.1
The Borrowers undertake to the Lender that during the Security Period they will

19.2.1.1
have the Vessels registered in the Ships Registry and fly the German flag or any
other flag acceptable to the Lender;

19.2.1.2
procure that at least two (2) of the first four (4) Vessels be employed under a
time charter of a minimum duration of twelve (12) Months (or equivalent
substitute satisfactory to the Lender, such as a cash deposit to be opened and
maintained by the Borrowers with the Lender and to be pledged to the Lender,
with an amount to cover operating expenses and financing cost under this
Agreement for twelve (12) months), at a charter hire in a sufficient amount to
cover operating expenses and financing costs under this Agreement and
furthermore on terms and conditions acceptable to the Lender;

 
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19.2.1.3
present a pool concept for the Vessels' employment to the full satisfaction of
the Lender;

19.2.1.4
cause at least four (4) of the Vessels after the delivery of the last Vessel to
be employed under the Charters or any other contract of employment on terms and
conditions acceptable to the Lender (or equivalent substitute, as described in
clause 19.2.1.2 above), provided that this covenant shall only be applicable
until 31st December, 2014 in case the Borrowers have made all payments due
hereunder from time to time and under any Security Documents and no Event of
Default has occurred;

19.2.1.5
cause the Vessels to be managed by the Manager;

19.2.1.6
ensure that the Vessels are insured in accordance with the requirements of this
Agreement and at all times comply with all terms and conditions of such
Insurances;

19.2.1.7
maintain the Vessels with, or procure that the Vessels maintain the following
class:

ABS: +A1 (E), Offshore Support Vessel AH, +AMS, *ACCU, Oil Recovery Capability
Class 1, DPS-1, FiFi-II, TCM, UWILD,

and furthermore to be classed in the highest class for vessels of its kind with
the Classification Society or with such other classification society as shall
previously have been agreed to in writing by the Lender without any overdue
recommendations or qualifications;

19.2.1.8
without prejudice to the aforesaid,

19.2.1.8.1.
maintain the Vessels or procure that the Vessels be maintained in accordance
with the highest standards of ship maintenance and operation for vessels of its
kind;

19.2.1.8.2.
ensure that the Lender and/or its agents are permitted to inspect the Vessel at
all reasonable times, whereby the costs of one (1) inspection per year per
Vessel shall be at the Borrowers' cost, unless a Vessel has been repaired in a
shipyard or there has occurred and is continuing an Event of Default: in these
cases also the costs of further inspections shall be borne by the Borrowers;

19.2.1.8.3.
promptly effect or cause to be effected at its expense all repairs and
replacements as and when the Lender or the Classification Society may from time
to time require the same;

19.2.1.8.4.
not to remove material parts or material equipment from any of the Vessels
unless replaced with equipment of the same or higher value and not to make
material alterations, which would affect any of the Vessels' class.

 
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19.2.1.9
comply with all applicable national and international laws, rules, regulations
and orders of any governmental entity or administrative agency including,
without limitation, constitutional provisions, statutes, decrees, treaties,
laws, conventions and regulations having the force of law, applicable to the
Borrowers or any of its businesses, properties or assets or the Vessels,
including, but not limited to, the ISPS Code;

19.2.1.10
obtain promptly at any time or from time to time (as the case may be) and will
at any time comply with the terms of and do all that is necessary to maintain in
full force and effect all registrations, licences, consents, approvals,
authorizations and/or declarations required under any applicable law or
regulation of any applicable jurisdiction to enable the Borrowers to lawfully
enter into and perform its obligations hereunder and under the Security
Documents to which they are a party and to ensure the legality, validity,
enforceability or admissibility in evidence in all applicable jurisdictions of
this Agreement and the Security Documents and furnish the Lender with a copies
of the documents obtained in complying with this Clause;

19.2.1.11
if an Event of Default has occurred and the Lender has accelerated the Facility,
direct or cause to direct any of the Vessels or all of them to any destination
or port as the Lender may request;

19.2.1.12
if (i) an increase of the equity of any of the Borrowers by way of capital
contribution, debt-to-equity swap, private or public placement or otherwise or
(ii) the granting of one or more shareholder loans to the Borrowers or (iii) the
granting of any other form of liquidity supply in an amount of at least Euro six
million two hundred fifty thousand (EUR 6,250,000.00) can not be achieved latest
until 31st December, 2011, shall use their best efforts to sell a minimum of two
Vessels until 30th December, 2011 to a third party on an arm's length basis and
apply the entire sale proceeds (after deduction of reasonable costs for the
operation of the Relevant Vessels accrued until the Sale thereof and of
reasonable costs accrued in connection with the sale of the Relevant Vessels and
evidenced in writing to the Lender) firstly on the payment of the ongoing
guarantee fee pursuant to clause 10.9.9 of the Existing Loan Agreement and
secondly in repayment of the outstanding indebtedness then being due and payable
in accordance with clause 9.4 of the Existing Loan Agreement or otherwise under
the Existing Loan Agreement and thirdly in repayment of the Outstanding
Indebtedness hereunder in part or in full;

19.2.1.13
enter into an addendum to the Existing Loan Agreement latest until 31st
December, 2010 in form and substance satisfactory to the Lender to the effect
that (a) clauses 18.2 of the Existing Loan Agreement is amended to the effect
that the Facility is taken into account when calculating the outstanding loan
amount and (b) - after the Outstanding Indebtedness has been repaid in full to
the satisfaction of the Lender and either (i) the Commitment Termination Date
has occurred or (ii) the Borrowers have waived their rights for re-borrowing
hereunder under Clause 9.2 - the Borrowers shall make additional prepayments of
twenty (20) percent of their annual earnings after tax (equalling the annual
turnover less operating expenses of the Vessels less debt service under the
Existing Loan Agreement less ten (10) percent dividend payout in relation to the
paid-in share-capital and less any taxes to be paid by the Relevant Borrowers)
until the utilized credit facility tranches entitled 'Tranches CF' under the
Existing Loan Agreement have been repaid in full.

19.2.2
The Borrowers furthermore undertake to the Lender that during the Security
Period to comply or to procure that the Manager will comply within the requisite
applicable time limits for vessels of same type, size, age and flag of the
Vessels with the International Management Code for Safe Operation of Ships and
for Pollution Prevention (as the same may be amended from time to time, the "ISM
Code") adopted by the International Maritime Organisation or any replacement of
the ISM Code and in particular, without prejudice to the generality of the
foregoing, as and when required to do so by the ISM Code and at all times
thereafter,

 
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19.2.2.1
to hold or to procure that the Manager holds, a valid Document of Compliance
(being a document issued to a vessel operator as evidence of its compliance with
the requirements of the ISM Code) duly issued to the Borrowers or the Manager
(as the case may be) pursuant to the ISM Code and a valid Safety Management
Certificate (being a document issued to a vessel as evidence that the vessel
operator and its shipboard management operate in accordance with an approved
structured and documented system enabling the personnel of that vessel operator
to implement effectively the safety and environmental protection policy of that
vessel operator) duly issued to the Vessels pursuant to the ISM Code,

19.2.2.2
upon the Lender’s request, to provide the Lender with copies of any such
Document of Compliance and Safety Management Certificate as soon as the same are
issued and after every renewal, and

19.2.2.3
to keep or to procure that there is kept, on board of each Vessel a copy of any
such Document of Compliance and the original of any such Safety Management
Certificate.

19.2.3
The Borrowers undertake to the Lender that during the Security Period they will
not

19.2.3.1
without the Lender's prior written consent cancel, change, amend or modify any
Charter;

19.2.3.2
enter into any bareboat charter contract regarding any of the Vessels other than
those referred to in Clause 20;

19.2.3.3
create, incur or allow to exist over any of the Vessels any further hypothec,
mortgage, charge, lien or pledge other than (a) the Hypothec, (b) liens for
Taxes not delinquent or being contested in good faith, (c)  liens for current
crew's wages and salvage, (d) liens covered by valid policies of insurance held
by the Lender and meeting the requirements of Clause 13, and (e) liens not
covered by insurance, incurred in the ordinary course of business and not more
than thirty (30) days past due;

19.2.3.4
without the Lender's prior written consent permit any change of register, flag,
Classification Society, ownership or management of any of the Vessels;

19.2.3.5
own, charter or manage any vessel other than the Vessels;

19.2.3.6
permit any of the Vessels to be operated in any way contrary to applicable law;

19.2.3.7
permit any of the Vessels to carry nuclear fuels or radioactive products or
waste;

19.2.3.8
permit any of the Vessels to carry toxic waste;

19.2.3.9
permit any of the Vessels to carry arms or ammunition.

 
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19.3
Reporting Covenants

The Borrowers undertake to the Lender that during the Security Period they will

19.3.1
deliver to the Lender copies of the Borrowers’ Financial Statements, not later
than 30th April of each year, for the first time until 30th April, 2011 for the
business year 2010, and such other information (including financial information)
as the Lender may from time to time reasonably require;

19.3.2
deliver to the Lender copies of the Borrowers’ unaudited semi annual financial
results and cash flow projections, not later than ninety (90) days after the end
of each half-year, for the first time until 30th September, 2011;

19.3.3
deliver to the Lender copies of the Financial Statements of Hartmann Offshore
GmbH & Co. KG of Leer, Germany, on a consolidated basis, not later than 30th
September of each year, for the first time until 30th September, 2011 for the
business year 2010, and such other information (including financial information)
as the Lender may from time to time reasonably require regarding Hartmann
Offshore GmbH & Co. KG of Leer, Germany;

19.3.4
deliver to the Lender upon the Lender’s request, class certificates for hull and
machinery and the Lender shall be permitted access to all reports, files and
records of the Classification Society;

19.3.5
deliver to the Lender upon the Lender’s request, information as to the
employment of the Vessels, such as charter contracts, operating expenses etc;

19.3.6
deliver to the Lender any information on changes of the terms and conditions of
the Building Contracts;

19.3.7
deliver to the Lender such financial information on the Borrowers and the
Manager and such further information on the Vessels as the Lender may from time
to time require;

19.3.8
promptly inform the Lender of any occurrence of which they become aware which in
their reasonable opinion might adversely affect their ability to perform their
obligations hereunder or under any Security Document to which they are a party
or constitute an Event of Default;

19.3.9
promptly inform the Lender of any damage to or alteration of any of the Vessels
exceeding the value of an amount in excess of the lesser of (i) five (5) percent
of the amount for which the relevant Vessel is insured or (ii) Euros one million
(EUR 1,000,000.00);

19.3.10
deliver to the Lender any information regarding each inter company loan and
shareholder loan to which a Borrower is a party (i) promptly after conclusion of
the relevant loan agreement and (ii) not later than ninety (90) days after the
end of each half-year, for the first time on 31st March, 2011;

19.3.11
according to the Germany money laundering act (GWG) provide to the Lender any
information required by law (§ 1 subpara 6 of the German Money Laundering Act
(GWG)) regarding the beneficial owner(s). The Borrowers further undertake to
promptly and voluntarily inform the Lender about any change of the beneficial
owner(s) occurring during the Security Period (§ 4 subpara 6 of the German Money
Laundering Act (GWG)) and to provide the Lender upon request with all documents
and information necessary for the determination and verification of the
information provided by the Borrowers.

 
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19.4
Covenants regarding Corporate Structure

The Borrowers further undertake to the Lender that during the Security Period
they will not without the prior written consent of the Lender:

19.4.1
allow any change in any of the Borrowers’ corporate or shareholder structure to
the effect that Equity Provider 2 holds less than twenty five (25) percent in
advance or to the effect that any of the Borrowers ceases to be a limited
partnership;

19.4.2
allow any change of the General Partner or any change in the General Partner's
corporate or shareholder structure without (i) promptly informing the Lender in
detail prior to any such proposed change in writing and (ii) agreeing with the
Lender any amendments to this Agreement in respect of e.g. margin, term,
security or any other terms;

19.4.3
change the nature of any of the Borrowers’ business or commence any business
other than the ownership and operation of the Vessels;

19.4.4
consolidate with or merge into any other corporation or merge any other
corporation into any of the Borrowers.

20
BAREBOAT REGISTRATION

20.1
Approval to Bareboat Registration. At the Borrowers' request the Lender is ready
to consent to the Vessels being temporarily registered in the name of a Bareboat
Charterer as a chartered bareboat in a ships registry under a flag acceptable to
the Lender provided

20.1.1
the relevant Bareboat Charterer is a wholly owned and controlled subsidiary of
the Relevant Borrower,

20.1.2
all necessary or advisable approvals, consents, permits, certificates of
registry, etc. have been granted by the German and the relevant authorities of
the flag state and have been produced to the Lender in original or certified
true and complete copy and the following documents have been produced to the
Lender:

20.1.2.1
evidence in writing that the relevant Bareboat Charterer is a wholly owned and
controlled subsidiary of the Relevant Borrower,

20.1.2.2
with respect to each Vessel to be registered under the flag accepted by the
Lender the documentation set out in Exhibit 11 attached hereto.

20.2
Lender's Reservation. The Lender reserves the right to grant its consent under
additional conditions and to revoke such consent whenever it deems necessary or
advisable.

21
ACCOUNTS

21.1
Earnings Accounts. The Borrowers shall establish and maintain in their relevant
names throughout the Security Period the Earnings Accounts with the Lender.

21.2
Costs of Operations. The Relevant Borrower shall be entitled to debit its
Earnings Account with the Vessel's current costs of operation always provided
that such debits are either covered by the credit balance on the relevant
Earnings Account or are within the credit line of such relevant Earnings
Account.

 
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21.3
Lender's Authorisation. The Borrowers hereby instruct and authorize the Lender,
and the Lender is entitled to make use of this instruction upon its sole
discretion, to debit the Earnings Account with the Tranches outstanding on the
Final Maturity Date, the Interest Payments, and the payments of any cost or
expenses to be borne by the Borrowers pursuant to this Agreement on their
respective due dates

21.4
Interest. Interest (at the rate applicable from time to time for the period the
relevant deposit has been made) accruing on the Earnings Accounts shall be for
the Borrowers' credit.

21.5
Keeping Accounts. The Lender shall maintain and keep accounts showing all sums
due to the Lender from the Borrowers and the amounts in such accounts and in the
books of the Lender shall be conclusive, save for manifest error.

22
EVENTS OF DEFAULT

Single Events of Default. Without prejudice to no. 26 paragraph 2 of the
Lender's general business conditions (Allgemeine Geschäftsbedingungen), in case:

22.1
any of the Borrowers fails to pay when due any instalment of principal or
interest or other sum payable hereunder or under or pursuant to any of the
Security Documents or other document relating to this Agreement; or

22.2
any of the Borrowers defaults in the performance or observance of any other
obligation or term contained herein, in any of the Security Documents or other
document relating to this Agreement; or

22.3
this Agreement or any of the Security Documents ceases in whole or in part to be
valid, binding and enforceable; or

22.4
any representation, warranty or undertaking made in this Agreement or in any
certificate, statement or other document delivered in connection with the
execution and delivery hereof shall prove to have been incorrect, inaccurate or
misleading in any material respect; or

22.5
there is any material adverse change in the financial situation of any of the
Obligors and such occurrence in the opinion of the Lender makes it unlikely that
the Obligors will be able to perform their obligations hereunder and/or under
the Security Documents in the manner provided herein and /or therein; or

22.6
any of the Borrowers ceases or threatens to cease to carry on its business or
disposes or threatens to dispose of any substantial part of its assets or the
same are seized or appropriated for any reason; or

22.7
any of the Obligors (other than the Manager) becomes insolvent or bankrupt or
becomes unable to pay its debts as they mature or makes any composition with or
assignment for the benefit of its creditors or applies for or consents to or
sustains the appointment of a trustee or receiver in respect of its assets or a
substantial part thereof or ceases or threatens to cease to carry on business;
or

22.8
any consent required for the performance by any of the Borrowers of its
obligations hereunder or under any Security Document is revoked or is otherwise
modified in a manner unacceptable to the Lender; or

22.9
the Facility or any portion thereof has not been utilized for its intended
purpose; or

22.10
pursuant to a legal opinion given to the Lender by any of its counsels the
validity and/or enforceability of this Agreement and or any Security Document
may be subject to material doubt and if the Borrowers fail to comply within
fourteen (14) days from receipt of the Lender’s written demand to remedy such
material doubt to the Lender's satisfaction; or

 
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22.11
any of the Borrowers is in default under the Existing Loan Agreement and/or any
other agreement with the Lender, or under any financing agreement to which the
Borrowers, or any of them, is/are a party in which the Lender is participating
on the lender’s side; or

22.12
any of the Borrowers is in default under any other financial agreement and the
lender thereunder has cancelled such agreement and demanded early repayment; or

22.13
any of the Vessels is not delivered to the Relevant Borrower in due time in
accordance with the terms of the Relevant Building Contract;

22.14
any Charter, the Pool Agreement is terminated, rescinded, invalid or
unenforceable;

22.15
the performance by any of the Borrowers of its obligations under this Agreement
or any of the Security Documents becomes illegal;

22.16
the General Partner changes its corporate and/or shareholder structure as
described in Clause 17.17 without the Lender’s prior written consent;

22.17
the Equity Provider 1 ceases to be a limited partner (Kommanditist) of each of
the Borrowers (except for Borrower 10, Borrower 11, and Borrower 12) holding at
least seventy five (75) percent of each of the Borrowers (except for Borrower
10, Borrower 11 and Borrower 12) share capital, unless (i) the Equity Provider 1
transfers its shares in the Borrowers to any entity referred to in the
definition of the term Equity Provider 2 or an affiliated company thereof
accepted by the Lender or (ii) the Equity Provider 1 transfers its shares in the
Borrowers to another third party accepted by the Lender and a mandatory
prepayment is made in accordance with clause 9.4.2 hereof;

22.18
the Equity Provider 2 ceases to hold at least twenty five (25) percent of each
of the Borrowers or if any of the Borrowers ceases to be a limited partnership;

22.19
the Equity Provider 3 ceases to be a limited partner (Kommanditist) of each of
the Borrowers 10,11 and 12 holding at least seventy five (75) percent of each of
the Borrower's 10, 11 and 12 share capital;

then, and in any such event and at any time thereafter, if any such event shall
be continuing, the Lender shall be entitled:

 
(i)
by written notice from the Lender to the Borrowers to declare the Facility
immediately due and payable, whereupon the same shall become so payable in
accordance together with interest accrued thereon and all other amounts payable
hereunder and under the Security Documents; and/or

 
(ii)
by written notice from the Lender to the Borrowers to declare that the
Commitment be cancelled, whereupon the same shall be cancelled and all amounts
payable hereunder shall become immediately due and payable,

provided, however, that in case of an event as set out in this Clause resulting
from a breach of obligations arising from this Agreement, the Lender shall be
entitled to the rights set out in Subclause 22.1 (i) and Subclause 22.1 (ii)
only after expiry, without result, of a reasonable period fixed for corrective
action by the Borrowers or after a warning to the Borrowers has proved
unsuccessful, unless this proviso can be dispensed due to the specific features
of the particular case pursuant to Section 323 (2) and (3) of the German Civil
Code (BGB), in particular, if the Borrowers definitely refuse performance or
fail to render performance on a contractually fixed date or within a specified
time-period.
 
34

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23
ASSIGNMENT, TRANSFER AND SYNDICATION

23.1
Assignment by Borrowers. The Borrowers shall not without the Lender’s prior
written consent assign all or part of their rights or transfer all or part of
their obligations hereunder to any third party.

23.2
Assignment by Lender to Branches. The Lender is entitled to assign, transfer (by
way of Vertragsübernahme) pledge, and/or sub-participate its rights and
obligations and the credit risk hereunder and under the Security Documents, in
part or in full to any branch, wholly owned subsidiary or affiliate of such
Lender.

23.3
Syndication. The Lender is entitled to assign, transfer (by way of
Vertragsübernahme) pledge, and/or sub-participate their rights and obligations
and the credit risk hereunder and under the Security Documents, in part or in
full to any Lender or to any other third party (the "Syndicate Members" or, in
case of an assignment and transfer (by way of Vertragsübernahme) the "New
Lender"), provided, however, (i) the Lender remains the Borrowers’ sole
co-ordinator and contact-person hereunder and (ii) the Borrowers have given
their prior written consent, such consent not to be unreasonably withheld.

23.4
Syndication Procedure. The procedure for the assignment and transfer (by way of
Vertragsübernahme) shall be as described below.

23.4.1
In this Clause "Transfer Date" in a Transfer Certificate has the following
meaning:

23.4.1.1
the Transfer Date which is specified in detail in the Transfer Certificate, or,
if later,

23.4.1.2
the date on which the Lender signs the Transfer Certificate.

23.4.2
A transfer is effected if:

23.4.2.1
the transferring Lender and the New Lender furnish the Lender with a duly signed
Transfer Certificate;

23.4.2.2
the Lender signs the Transfer Certificate; and

23.4.2.3
the New Lender has acceded to the Agency and Security Pooling Agreement.

23.4.3
Each party, including, but not limited to, the Borrowers, hereby grants the
Lender an irrevocable power of attorney for the acceptance of the Transfer
Certificate in its name and subject to release from the restrictions imposed by
§ 181 of the German Civil Code.

23.4.4
On the Transfer Date:

23.4.4.1
The New Lender assumes the rights and obligations of the transferring Lender,
which, pursuant to the Transfer Certificate are the subject of the transfer; and

23.4.4.2
the transferring Lender is released from its relevant duties.

 
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23.5
Disclosure. The Lender shall be entitled to disclose to any potential Syndicate
Member, New Lender as well as – where relevant – to rating agencies, trustees,
and accountants, such financial and other information regarding the Borrowers,
the Facility, the collateral, the financial circumstances and other information,
as the Lender may deem reasonably necessary or appropriate in connection with
the (potential) syndication, the assessment of the risk and the ongoing
monitoring of the loan by any (potential) Syndicate Member or New Lender.
Insofar the Lender shall be released from any obligation of secrecy and from
banking confidentiality. Where Syndicate Members, New Lenders, rating agencies,
trustees and accountants are not already by law subject to rules of
confidentiality, the Lender shall require such Syndicate Members, New Lenders,
rating agencies, trustees and accountants to sign a confidentiality agreement.
The Lender shall be entitled to release deal tables containing standard
information for marketing purposes. Furthermore, the Lender shall be entitled to
inform each New Lender or Syndicate Member of any events or information of which
they become aware affecting any of the Facility or the Security Documents. The
Lender shall be released from any obligation of secrecy and from banking
confidentiality in this respect as well.

23.6
Borrowers' Cooperation. The Borrowers herewith irrevocably agree to the
above-mentioned measures. To the extent the cooperation of the Borrowers shall
be required in the course of syndication, the Borrowers will take all necessary
steps, provided that this shall not result in any additional costs to them. The
Borrowers undertake to and procure that each of third party sureties will, upon
request of the Lender, participate and assist in a transfer of the security
created by the Security Documents.

23.7
Binding Documents. The Security Documents shall be binding upon, and shall inure
to the benefit of, the Lender and its relevant successors and assigns and their
respective successors (in each case whether by merger, amalgamation,
consolidation, take over or otherwise, and each such case a “Succession”), and
each party hereby agrees that from the completion of the Succession the
Agreement and the Security Documents shall be read and construed as if all
references to the Lender were references to the relevant successor. For the
avoidance of doubt, the relevant successor shall not be a transferee or assignee
for the purpose of the Security Documents but shall be (or shall be treated as)
the same legal entity as the Lender (or the relevant preceding successor, as the
case may be).

24
APPLICABLE LAW, JURISDICTION

The terms and conditions set out in this Agreement shall unless otherwise
specifically provided be governed by and construed in accordance with the laws
of the Federal Republic of Germany and by the Borrowers’ acceptance hereof the
Borrowers submit to the jurisdiction of the courts in Hannover, Federal Republic
of Germany.

Nothing in this Clause shall affect the right of the Lender to serve process in
any manner permitted by law or limit the right of the enders to proceed against
the Borrowers or any of them in any other jurisdiction.

25
JUDGEMENT CURRENCY

If in obtaining judgement in any court it becomes necessary or advisable for the
Lender to convert any amount owed pursuant hereto into another currency then
such conversion shall be deemed to be made at the rate of exchange prevailing
the day before the Lender's action is brought into court with prime banks in the
country of such court. If in such case due to alterations of the exchange rate
the amount finally received by the Lender or any of them shall be insufficient
to cover the amount owed in Euros then the Borrowers shall pay to the Lender the
amount required to compensate for such loss.

26
WAIVERS

Time is of the essence of this Agreement. No failure or delay on the part of the
Lender to exercise any power or right under this Agreement shall operate as a
waiver thereof or of any other power or right. The remedies provided herein are
cumulative and are not exclusive of any remedies provided by law.
 
36

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27
INVALIDITY

In the event that this Agreement or any provision hereof or any of the documents
or instruments which may from time to time be delivered hereunder or any
provision thereof shall be deemed invalid by present or future law of any nation
or by decision of any court this shall not affect the validity of this
Agreement, such documents and instruments as a whole and in such case the
parties hereto shall execute and deliver such other and further agreements
and/or documents and/or instruments and such things as the Lender in its
reasonable discretion, may deem to be necessary to carry out the original intent
of the parties to this Agreement.

28
SURVIVAL

All of the covenants, representations and warranties made herein or in any of
the documents or instruments delivered pursuant hereto shall survive the making
of the Facility and shall be binding upon the Borrowers until all obligations of
the Borrowers arising pursuant to the terms of this Agreement and/or such
documents or instruments delivered pursuant hereto have been paid and performed
in full.

29
EFFECTUATION

The Borrowers undertake to take all such steps and actions that are within their
power in order to execute and deliver all such further documents and instruments
as may be necessary in the sole discretion of the Lender to effectuate the
intent of this Agreement.

The Lender reserves the right to obtain legal opinions from its counsel in any
relevant country as to the validity and enforceability of this Agreement and all
documents and instruments delivered pursuant thereto and the Borrowers agree and
undertake to take all such steps and actions including but not limited to any
alterations thereto as may be deemed necessary by such opinion or opinions.

30
LANGUAGE

Any document to be delivered by the Borrowers to the Lender pursuant to this
Agreement shall be in German or English or accompanied by a German or an English
translation. The Lender may request the Borrowers to have any such translation
certified by an authorized translator.

31
COSTS AND EXPENSES

31.1
Costs and Expenses. Unless otherwise stipulated herein, all costs and expenses
and claims for damages of the Lender which occur during the legal relations
between these parties on the one side and the Borrowers on the other side and
which are in relation to the Facility shall be borne by the Borrowers whether or
not any Drawdown ultimately takes place and all costs and expenses and claims
for damages incurred in the maintenance of the security created by this
Agreement and the Security Documents or the actual or attempted enforcement at
any time of the rights of the Lender hereunder and thereunder shall be borne by
the Borrowers. This refers especially to expenses for maintenance, safeguarding
and insurance of the Vessels or for upkeep and security of the Hypothec, costs
for lifting a seizure of the Vessels, costs incident to guarding and custody of
the Vessels, costs for every evaluation requested by the Lender with regard to
value and condition of the Vessels in case of an Event of Default of the
Borrowers and the fees for outside attorneys or other persons commissioned by
the Lender. This also includes expenses incurred by the Lender in connection
with the drafting, preparation, execution, carrying out, enforcement or
attempted enforcement of this Agreement and/or the Security Documents as well as
costs for translations and for legal opinions.

All such costs and expenses have to be paid when due and payable according to
the respective invoice, which will be notified by the Lender to the Borrowers.
All amounts so disbursed or expended by the Lender shall be subject to (a) the
Default Rate from the day five (5) Banking Days after the Lender has requested
refunding or repayment thereof from the Borrowers until the time of refunding or
repayment or (b) the Default Rate from the day of disbursement until the time of
refunding or repayment thereof, if the Lender has given notice of default
hereunder.
 
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31.2
Taxes. The Borrowers shall bear all Taxes which are levied in Germany and other
countries on the capital, the repayment rates, the interest and other payments,
today or in future related to the Facility except for Taxes charged in the
Federal Republic of Germany on the income of the Lender. This provision concerns
all Taxes and dues of any kind, whether they have direct or indirect, personal
or real character (as e.g. income tax, capital tax, trade tax and turnover tax),
whether these Taxes be levied on the total income or the aggregate property of
the Lender as mortgagee or on the extraordinary income or property or on any
portion of the income and property or for reason of any legal or real events.
This Agreement must be understood in its broadest sense as to entitle the Lender
(who fix the rate of interest without regard to any Taxes in Germany or other
countries and who has entered into this Agreement on the basis - inter alia - of
receiving payments in full and free of any such Taxes) to pass on the Taxes. The
Taxes will be charged to, and promptly paid by the Borrowers also if for reason
of any legal or authoritative regulations they are to be collected from the
Lender.

Such Taxes collected from the Lender and must be reimbursed by the Borrowers
immediately when the Borrowers are informed to this effect by the Lender. Any
failure of the Borrowers as a result of the foregoing to remit to the Lender
full payments required hereunder shall not waive default for non-payments as
defined under Clause 22 of this Agreement.

32
NOTICES AND TIME

32.1
Addresses. Any notice or other communication to be given pursuant hereto shall
be by letter or registered letter or telefax and addressed

-  if to the Borrowers, to

the Borrowers
c/o HARTMANN OFFSHORE GMBH & CO. KG
Neue Straße 24
26789 Leer
Germany
Fax:      +49-491-9995020

-  if to the Lender, to:

NORDDEUTSCHE LANDESBANK GIROZENTRALE
Shipping and Aircraft Finance Department
Friedrichswall 10
30159 Hannover
Federal Republic of Germany
Fax:      +49-511-3614785,

 
or to such other address as either party may notify to the other in writing.

32.2
Form of Communicating. Communications sent by telefax shall be effective when
sent and if sent by letter shall be effective on receipt. Any communication by
telefax from a party to the relevant other party/ies shall be confirmed by
letter if so requested by the relevant party and the relevant party may (in its
absolute discretion) refuse to act on any such communication pending receipt of
such letter.

32.3
Receipt. A notice or other communication received on a day which is not a
Banking Day or after business hours in the place of receipt on a Banking Day
shall be deemed to be served on the next following Banking Day in such place.

 
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32.4
Authorisation. Each Borrower irrevocably authorises each of the other Borrowers
and the Manager (the "Representative") to act on its behalf as its agent in
relation to this Agreement and the Security Documents and irrevocably
authorises:

32.4.1
the Representative on its behalf to supply all information concerning itself,
its financial condition and otherwise to the relevant persons contemplated under
this Agreement and to give all notices and instructions and to make any
agreement capable of being made by it on its behalf under this Agreement and the
Security Documents; and

32.4.2
each Lender to make any communication or deliver any document to be made or
delivered to such Borrower pursuant to this Agreement and/or the Security
Documents to the Representative on its behalf in accordance with this Clause,

and in each such case, irrespective if such Representative has given express or
implied statement to act as representative on behalf of such Borrower, such
Borrower will be bound thereby as though such Borrower had itself supplied such
information, given such notice and instructions or made such agreement or, as
the case may be, as if such communication or document had been made or delivered
to it in accordance with this Clause.

33
GENERAL CONDITIONS

33.1
Part of this Agreement. The General Conditions are deemed to be part of this
Agreement. By signing this Agreement, the Borrowers acknowledge that they
received a copy of the General Conditions and agree that they shall be part of
this Agreement.

33.2
Language. The German wording of the General Conditions is binding in all
respects and in the case of any conflict or divergence between the English
translation and the German wording in any respect whatsoever, the German wording
shall prevail and govern this Agreement.

33.3
Conflict. In case of conflict between this Agreement and the General Conditions
the terms and conditions of this Agreement shall prevail over those of the
General Conditions.

34
EXHIBITS

The Exhibits to this Agreement form an integral part of this Agreement and their
terms shall accordingly be deemed to have been set out herein in full.

35
COUNTERPARTS

This Agreement may be executed in several counterparts and by each party hereto
on a separate counterpart, each of which shall be deemed to be an original and
all of which when taken together shall constitute one and the same instrument.

36
DECLARATION ON MONEY LAUNDERING

Declaration according to German Money Laundering Act (Geldwäschegesetz)

The Borrowers hereby confirms to the Lender by ticking the box or initial that
in respect of the Facility it is acting for its own account:

for                           ©           own account

for                           £           account of third party

39

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(Remainder of page left blank intentionally)
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed by
their duly authorized attorneys the day and year first above written.

THE LENDER:
             
SIGNED by
)
   
Regina Schulz and
)
   
Inga Boysen
)
   
for and on behalf of
)
   
NORDDEUTSCHE LANDESBANK
)
   
GIROZENTRALE
)
/s/ Regina Schulz /s/ Inga Boysen
         
THE BORROWERS
             
SIGNED by
)
   
Niels Roggemann
)
   
for and on behalf of
)
/s/ Niels Roggemann
 

ATL OFFSHORE GMBH & CO. MS "JUIST" KG

ATL OFFSHORE GMBH & CO. MS "NORDERNEY" KG

ATL OFFSHORE GMBH & CO. "ISLE OF BALTRUM" KG

ATL OFFSHORE GMBH & CO. "ISLE OF LANGEOOG" KG

ATL OFFSHORE GMBH & CO. "ISLE OF AMRUM" KG

ATL OFFSHORE GMBH & CO. "ISLE OF SYLT" KG

ATL OFFSHORE GMBH & CO. "ISLE OF WANGEROOGE" KG

ATL OFFSHORE GMBH & CO. "ISLE OF NEUWERK" KG

ATL OFFSHORE GMBH & CO. "ISLE OF USEDOM" KG

ATL OFFSHORE GMBH & CO. "ISLE OF FEHMARN" KG

ATL OFFSHORE GMBH & CO. "ISLE OF MEMMERT" KG

ATL OFFSHORE GMBH & CO. "ISLE OF MELLUM" KG

 
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ACKNOWLEDGED BY:

THE MANAGER
             
Signed by
)
   
NIELS ROGGEMANN
)
   
HARTMANN OFFSHORE GMBH
)
/s/ Niels Roggemann
 

 
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SCHEDULES AND EXHIBITS
           
Schedule 1
 
List of Borrowers, Building Contracts and Vessels
     
Schedule 2
 
List of Conditions Precedent
           
Exhibit 1
 
Form of Drawdown Notice
     
Exhibit 2
 
Form of Bareboat Documentation
     
Exhibit 3
 
Form of Transfer Certificate
     
Exhibit 4
 
General Conditions of NORD/LB

 
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