d889270_ex4-12.htm


    
EXHIBIT 4.12


      


      


      


      Date                                  2007

      


      


      


      


      


      


      TYLER
NAVIGATION INC.

      and

      PASEDENA
NAVIGATION INC.

      as
joint and several Borrowers

      


      


      


      -
and -

      


      


      


      THE
GOVERNOR AND COMPANY OF

      THE
BANK OF SCOTLAND

      as
Lender

      


      


      


      


      


      


      


      


      __________________________________

      


      LOAN
AGREEMENT

      __________________________________

      


      relating
to a loan facility

      of
up to US$70,000,000

      to
part-finance the acquisition of two 37,000 dwt

      product
tankers from Hyundai Mipo Dockyard Co. Ltd., Korea

      


      


      


      


      CONSTANT
& CONSTANT

      2,
Defteras Merarchias

      185
35 Piraeus

      Greece


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      INDEX

      


      
        	
                CLAUSE NO.

              	 
      	
                PAGE
      NO.

              
	 
      	 
      	 
      
	
                1

              	
                INTERPRETATION

              	
                1

              
	 
      	 
      	 
      
	
                2

              	
                FACILITY

              	
                14

              
	 
      	 
      	 
      
	
                3

              	
                DRAWDOWN

              	
                14

              
	 
      	 
      	 
      
	
                4

              	
                INTEREST

              	
                15

              
	 
      	 
      	 
      
	
                5

              	
                INTEREST
      PERIODS

              	
                16

              
	 
      	 
      	 
      
	
                6

              	
                DEFAULT
      INTEREST

              	
                17

              
	 
      	 
      	 
      
	
                7

              	
                REPAYMENT
      AND PREPAYMENT

              	
                18

              
	 
      	 
      	 
      
	
                8

              	
                CONDITIONS
      PRECEDENT

              	
                20

              
	 
      	 
      	 
      
	
                9

              	
                REPRESENTATIONS
      AND WARRANTIES

              	
                21

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                10

              	
                GENERAL
      UNDERTAKINGS

              	
                23

              
	 
      	 
      	 
      
	
                11

              	
                CORPORATE
      UNDERTAKINGS

              	
                26

              
	 
      	 
      	 
      
	
                12

              	
                INSURANCE

              	
                27

              
	 
      	 
      	 
      
	
                13

              	
                SHIP
      COVENANTS

              	
                32

              
	 
      	 
      	 
      
	
                14

              	
                SECURITY
      COVER

              	
                36

              
	 
      	 
      	 
      
	
                15

              	
                PAYMENTS
      AND CALCULATIONS

              	
                37

              
	 
      	 
      	 
      
	
                16

              	
                APPLICATION
      OF RECEIPTS

              	
                38

              
	 
      	 
      	 
      
	
                17

              	
                APPLICATION
      OF EARNINGS

              	
                37

              
	 
      	 
      	 
      
	
                18

              	
                EVENTS
      OF DEFAULT

              	
                40

              
	 
      	 
      	 
      
	
                19

              	
                FEES
      AND EXPENSES

              	
                44

              
	 
      	 
      	 
      
	
                20

              	
                INDEMNITIES

              	
                45

              
	 
      	 
      	 
      
	
                21

              	
                NO
      SET-OFF OR TAX DEDUCTION

              	
                47

              
	 
      	 
      	 
      
	
                22

              	
                ILLEGALITY,
      ETC

              	
                48

              
	 
      	 
      	 
      
	
                23

              	
                INCREASED
      COSTS

              	
                48

              
	 
      	 
      	 
      
	
                24

              	
                SET
      OFF

              	
                49

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      INDEX

      


      
        	
                CLAUSE
      NO.

              	 
      	
                PAGE
      NO.

              


      

      


      
        	
                25

              	
                TRANSFERS
      AND CHANGES IN LENDING OFFICES

              	
                50

              
	 
      	 
      	 
      
	
                26

              	
                VARIATIONS
      AND WAIVERS

              	
                50

              
	 
      	 
      	 
      
	
                27

              	
                NOTICES

              	
                51

              
	 
      	 
      	 
      
	
                28

              	
                JOINT
      AND SEVERAL LIABILITY

              	
                52

              
	 
      	 
      	 
      
	
                29

              	
                SUPPLEMENTAL

              	
                53

              
	 
      	 
      	 
      
	
                30

              	
                LAW
      AND JURISDICTION

              	
                53

              
	 
      	 
      	 
      
	
                SCHEDULE
      1

              	
                DRAWDOWN
      NOTICE

              	
                55

              
	 
      	 
      	 
      
	
                SCHEDULE
      2

              	
                CONDITION
      PRECEDENT DOCUMENTS

              	
                57

              
	 
      	 
      	 
      
	
                SCHEDULE
      3

              	
                AMOUNT
      OF EACH INSTALMENT UNDER EACH SHIPBUILDING CONTRACT

              	
                62

              
	 
      	 
      	 
      
	
                SCHEDULE
      4

              	
                MANDATORY
      COSTS

              	
                63

              
	 
      	 
      	 
      
	
                EXECUTION
      PAGE

              	
                65

              


      

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        THIS LOAN AGREEMENT is made
on                            2007

      

      


      BETWEEN:

      


      
        	
                (1)

              	
                TYLER NAVIGATION INC.
      and PASEDENA NAVIGATION
      INC., each being a corporation incorporated in the Republic of the
      Marshall Islands and whose registered office is at Trust Company Complex,
      Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as joint
      and several Borrowers;
      and

              


      

       

      
        	
                (2)

              	
                THE GOVERNOR AND COMPANY OF THE
      BANK OF SCOTLAND acting through its office at Pentland House, 8
      Lochside Avenue, Edinburgh EH12 9DJ, Scotland as Lender.

              


      

       

      WHEREAS

      


      
        	
                (A)

              	
                The
      Lender has agreed to make available to the Borrowers a facility of up to
      US$70,000,000 in two Tranches (each in 6 Advances) each in an amount not
      exceeding the lesser of (a) US$35,000,000 and (b) 75% of the Fair Market
      Value of each Ship as at its Delivery Date, for the purpose of
      part-financing the Contract Price of the Ships which are to be constructed
      by the Builder for, and purchased by, the
  Borrowers.

              


      

      


      
        	
                (B)

              	
                The
      Lender may enter into interest rate swap transactions with the Borrowers
      from time to time to hedge the Borrowers’ exposure under this Agreement to
      interest rate fluctuations.

              


      

      


      IT IS AGREED as
follows:

      


      
        	
                1

              	
                INTERPRETATION

              


      

       

      
        	
                1.1

              	
                Definitions. Subject to
      Clause 1.5, in this Agreement:

              


      

       

      “Accounts
Pledge”  means a deed or deeds of pledge in respect of the
Earnings Accounts and the Retention Account, in such form as the Lender may
approve or require;

      


      
        	
                 
      

              	
                “Advance”  means
      the principal amount of each borrowing by the Borrowers under this
      Agreement;

              


      

      


      
        	
                 
      

              	
                “Approved
      Flag”  means, in relation to a Ship, the Marshall Islands
      flag or such other flag as the Lender may, in its sole and absolute
      discretion, approve as the flag on which a Ship shall be
      registered;

              


      

      


      
        	
                 
      

              	
                “Approved Flag
      State”  means, in relation to a Ship, the Republic of the
      Marshall Islands or any other country in which the Lender may, in relation
      to a Ship, in its sole and absolute discretion, approve that a Ship be
      registered;

              


      

      


      “Approved
Manager”  means, in relation to a Ship, such company which the
Borrowers shall propose as the commercial and technical managers of each Ship
prior to the Delivery Date of each Ship and which shall be acceptable to the
Lender in its sole discretion;

      


      
        	
                 
      

              	
                “Approved Manager’s
      Undertaking”  means, in relation to each Ship, a letter
      of undertaking executed by the Approved Manager in favour of the Lender in
      the terms required by the Lender agreeing certain matters in relation to
      the Approved Manager and subordinating the rights of the Approved Manager
      against such Ship and the Borrower which is the owner thereof to the
      rights of the Lender under the Finance Documents, in such form as the
      Lender may approve or require;

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      
        	
                 
      

              	
                “Availability
      Period”  means the period commencing on the date of this
      Agreement and ending on:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                31
      August 2010 (or such later date as the Lender may agree with the
      Borrowers, which agreement shall not be unreasonably withheld in relation
      to any permissible delay under a Shipbuilding Contract);
  or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                if
      earlier, the date on which the Commitment is fully borrowed, cancelled or
      terminated;

              


      

       

      
        	
                 
      

              	
                “Borrower”  means
      each of Pasedena and Tyler and, in the plural, means all of
      them;

              


      

      


      
        	
                 
      

              	
                “Builder”  means
      Hyundai Mipo Dockyard Co. Ltd., a corporation organised and existing under
      the laws of the Republic of Korea, with its principal office at 1381
      Bangeo-Dong, Dong-Ku, Ulsan, Korea;

              


      

      


      
        	
                 
      

              	
                “Business
      Day”  means a day on which banks are open in London,
      Athens, Piraeus and (in relation to any payment to be made to the Builder)
      Korea, and in respect of a day on which a payment is required to be made
      under a Finance Document, also in New York City
  ;

              


      

      


      
        	
                 
      

              	
                “Commitment”  means
      the sum of up to $70,000,000 as such amount may be reduced, cancelled or
      terminated in accordance with this
Agreement;

              


      

      


      “Confirmation” and “Early Termination Date”, in
relation to any continuing Designated Transaction, have the meanings given in
the Master Agreement;

      


      “Contract
Price”  means, in respect of each Ship, $44,235,000 being the
amount payable by the relevant Borrower pursuant to the Shipbuilding Contract
relating thereto (as the same may be adjusted pursuant to the terms of such
Shipbuilding Contract);

      


      
        	
                 
      

              	
                “Contractual Currency”
      has the meaning given in Clause
20.4;

              


      

      


      
        	
                 
      

              	
                “Corporate
      Guarantee”  means the guarantee to be given by the
      Corporate Guarantor, in such form as the Lender may approve or
      require;

              


      

      


      
        	
                 
      

              	
                “Corporate
      Guarantor”  means Omega Navigation Enterprises, Inc., a
      corporation incorporated in The Republic of the Marshall Islands whose
      registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
      Island, Majuro, Marshall Islands MH
96960;

              


      

      


      
        	
                 
      

              	
                “Deferred
      Interest”  means the interest on the first two Advances
      under each Tranche accruing from the Drawdown Date of each such Advance up
      until the Drawdown Date of the third Advance under each
      Tranche;

              


      

      


      
        	
                 
      

              	
                “Delivery
      Advance”  means, in relation to a Ship, the final Advance
      in respect of each Tranche, the amount of which shall be calculated in
      accordance with Clause 3.2(e);

              


      

      


      
        	
                 
      

              	
                “Delivery
      Date”  means, in relation to a Ship, the date on which
      title to and possession of that Ship is transferred from the Builder to
      the relevant Borrower;

              


      

      


      “Designated Transaction” means
a Transaction which fulfils the following requirements:

       

      
        	
                 
      

              	
                (a)

              	
                it
      is entered into by the Borrowers pursuant to the Master Agreement;
      and

              


      

       


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                (b)

              	
                its
      purpose is the hedging of the Borrower’s exposure under this Agreement to
      fluctuations in LIBOR arising from the funding of the Loan or any part
      thereof for a period expiring no later than the final Repayment
      Date;

              


      

       

      
        	
                 
      

              	
                “Dollars” and “$”  means the
      lawful currency for the time being of the United States of
      America;

              


      

      


      
        	
                 
      

              	
                “Drawdown
      Date”  means, in relation to an Advance, the date
      requested by the Borrowers for an Advance to be made, or (as the context
      requires) the date on which such Advance is actually
  made;

              


      

      


      
        	
                 
      

              	
                “Drawdown
      Notice”  means a notice in the form set out in Schedule 1
      (or in any other form which the Lender approves or reasonably
      requires);

              


      

      


      
        	
                 
      

              	
                “Earnings”  means,
      in relation to a Ship, all moneys whatsoever which are now, or later
      become, payable (actually or contingently) to the Borrower owning that
      Ship or the Lender and which arise out of the use or operation of that
      Ship, including (but not limited
to):

              


      

      


      
        	
                 
      

              	
                (a)

              	
                all
      freight, hire and passage moneys, compensation payable to the Borrower
      owning that Ship or the Lender in the event of requisition of that Ship
      for hire, remuneration for salvage and towage services, demurrage and
      detention moneys and damages for breach (or payments for variation or
      termination) of any charterparty or other contract for the employment of
      that Ship;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                all
      moneys which are at any time payable under Insurances in respect of loss
      of earnings; and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                if
      and whenever that Ship is employed on terms whereby any moneys falling
      within paragraphs (a) or (b) above are pooled or shared with any other
      person, that proportion of the net receipts of the relevant pooling or
      sharing arrangement which is attributable to that
  Ship;

              


      

       

      “Earnings Account” means, in
relation to each Ship, the account in the name of the Borrower owning such Ship
with the Lender in Glasgow designated “[name of
Borrower] - Earnings Account”, or any other account (with that or another
office of the Lender or with a bank or financial institution other than the
Lender) which is designated by the Lender as the Earnings Account for the
purposes of this Agreement;

       

      
        	
                 
      

              	
                “Environmental
      Claim”  means:

              


      

      


      
        	
                 
      

              	
                (a)

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

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any
      claim by any other person which relates to an Environmental Incident or to
      an alleged Environmental Incident,

              


      

       

      
        	
                 
      

              	
                and
      “claim” means a
      claim for damages, compensation, fines, penalties or any other payment of
      any kind whether or not similar to the foregoing; an order or direction to
      take, or not 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;

              


      


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      


      
        	
                 
      

              	
                “Environmental
      Incident”  means:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                any
      release of Environmentally Sensitive Material from a Ship;
    or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any
      incident in which Environmentally Sensitive Material is released from a
      vessel other than a Ship and which involves a collision between a Ship and
      such other vessel or some other incident of navigation or operation, in
      either case, in connection with which a Ship is actually or potentially
      liable to be arrested, attached, detained or injuncted and/or a Ship or
      either Borrower and/or any operator or manager is at fault or allegedly at
      fault or otherwise liable to any legal or administrative action;
      or

              


      

       

      
        	
                 
      

              	
                (c)

              	
                any
      other incident in which Environmentally Sensitive Material is released
      otherwise than from a Ship and in connection with which a Ship is actually
      or potentially liable to be arrested and/or where either Borrower and/or
      any operator or manager of a Ship is at fault or allegedly at fault or
      otherwise liable to any legal or administrative
  action;

              


      

       

      
        	
                 
      

              	
                “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;

              


      

      


      
        	
                 
      

              	
                “Environmentally Sensitive
      Material”  means oil, oil products and any other
      substance (including any chemical, gas or other hazardous or noxious
      substance) which is (or is capable of being or becoming) polluting, toxic
      or hazardous;

              


      

      


      
        	
                 
      

              	
                “Event of
      Default”  means any of the events or circumstances
      described in Clause 18.1;

              


      

      


      
        	
                 
      

              	
                “Fair Market Value”
      means, in respect of each Ship, the market value thereof determined from
      time to time in accordance with Clause
14.4;

              


      

      


      
        	
                 
      

              	
                “Finance
      Documents”  means:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the
      Corporate Guarantee;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                the
      Pre Delivery Security Assignments;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                the
      Master Agreement;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                the
      Master Agreement Security Deed;

              


      

       

      
        	
                 
      

              	
                (f)

              	
                the
      Mortgages;

              


      

       

      
        	
                 
      

              	
                (g)

              	
                the
      General Assignments;

              


      

       

      
        	
                 
      

              	
                (h)

              	
                the
      Accounts Pledge;

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Approved Manager’s Undertakings;
and

              


      

       

      
        	
                 
      

              	
                (j)

              	
                any
      other document (whether creating a Security Interest or not) which is
      executed at any time by any Borrower or the Corporate Guarantor or any
      other person as security for, or to establish any form of subordination or
      priorities arrangement in relation to, any
  amount

              


      

       


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      payable
to the Lender under this Agreement or any of the documents referred to in this
definition;

       

      
        	
                 
      

              	
                “Financial
      Indebtedness”  means, in relation to a person (the “debtor”),  a
      liability of the debtor:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                for
      principal, interest or any other sum payable in respect of any moneys
      borrowed or raised by the debtor;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                under
      any loan stock, bond, note or other security issued by the
      debtor;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                under
      any acceptance credit, guarantee or letter of credit facility made
      available to the debtor;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                under
      a financial lease, a deferred purchase consideration arrangement or any
      other agreement having the commercial effect of a borrowing or raising of
      money by the debtor;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                under
      any interest or currency swap or any other kind of derivative transaction
      entered into by the debtor or, if the agreement under which any such
      transaction is entered into requires netting of mutual liabilities, the
      liability of the debtor for the net amount;
or

              


      

       

      
        	
                 
      

              	
                (f)

              	
                under
      a guarantee, indemnity or similar obligation entered into by the debtor in
      respect of a liability of another person which would fall within (a) to
      (e) if the references to the debtor referred to the other
      person;

              


      

       

      
        	
                 
      

              	
                “General
      Assignment”  means, in relation to a Ship, a general
      assignment of the Earnings, the Insurances and any Requisition
      Compensation of such Ship, in such form as the Lender may approve or
      require;

              


      

      


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

      


      “Hull 2189”  means
the 37,000 dwt product tanker with Hull No. 2189 which is to be constructed by
the Builder for, and purchased by, Tyler under the Hull 2189 Shipbuilding
Contract;

      


      
        	
                 
      

              	
                “Hull
      2190”  means the 37,000 dwt product tanker with Hull No.
      2190 which is to be constructed by the Builder for, and purchased by,
      Pasedena under the Hull 2190 Shipbuilding
  Contract;

              


      

      


      “Hull 2189 Refund
Guarantee”  means the irrevocable and unconditional guarantee
number M0902-706-LG-00299 dated 21 June 2007 issued by the Refund Guarantor in
favour of Tyler pursuant to the Hull 2189 Shipbuilding Contract;

      


      
        	
                 
      

              	
                “Hull 2190 Refund
      Guarantee”  means the irrevocable and unconditional
      guarantee number M0902-706-LG-00300 dated 21 June 2007 issued by the
      Refund Guarantor in favour of Pasedena pursuant to the Hull 2190
      Shipbuilding Contract;

              


      

      


      
        	
                 
      

              	
                “Hull 2189 Shipbuilding
      Contract”  means the Shipbuilding Contract dated 15 June
      2007 between the Builder and Tyler for the construction by the Builder of
      Hull 2189 and its purchase by Tyler (as supplemented from time to
      time);

              


      


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      


      
        	
                 
      

              	
                “Hull 2190 Shipbuilding
      Contract”  means the Shipbuilding Contract dated 15 June
      2007 made between the Builder and Pasedena for the construction by the
      Builder of Hull 2190 and its purchase by Pasedena (as supplemented from
      time to time);

              


      

      


      
        	
                 
      

              	
                “Insurances”  means,
      in relation to a Ship:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                all
      policies and contracts of insurance, including entries of such Ship in any
      protection and indemnity or war risks association, which are effected in
      respect of such Ship, her Earnings or otherwise in relation to her;
      and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                all
      rights and other assets relating to, or derived from, any of the
      foregoing, including any rights to a return of a
  premium;

              


      

       

      
        	
                 
      

              	
                “Interest Period” means,
      in relation to an Advance, a period determined in accordance with Clause
      5;

              


      

      


      “ISM Code” means the
International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly as
Resolutions A.741 (18) (as amended by MSC 104 (73)) and A.913(22) (superseding
Resolution A.788(19)), as the same may be amended, supplemented or superseded
from time to time (and the terms “safety management system”,
“Safety Management
Certificate” and “Document of Compliance” have
the same meanings as are given to them in the ISM Code);

      


      “ISPS Code” means the
International Ship and Port Facility Security Code adopted by the International
Maritime Organisation (as the same may be amended, supplemented or superseded
from time to time);

      


      “ISSC” means a valid and
current International Ship Security Certificate issued under the ISPS
Code;

      


      “Lender” means:

       

      
        	
                 
      

              	
                (a)

              	
                The
      Governor and Company of the Bank of Scotland, acting through its office at
      Pentland House, 8 Lochside Avenue, Edinburgh EH12 9DJ, Scotland (or though
      another branch notified to the Lender under Clause 25.6) or its direct or
      indirect successor; or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                a
      direct or indirect assignee of such bank or financial institution or of a
      successor of it; or

              


      

       

      
        	
                 
      

              	
                (c)

              	
                a
      direct or indirect successor of an assignee such as its mentioned in (b),
      unless any of the foregoing has assigned all its rights, and novated all
      its obligations and liabilities, under the Finance
    Department;

              


      

       

       “LIBOR”  means, for
an Interest Period:

       

      
        	
                 
      

              	
                (a)

              	
                the
      rate per annum equal to the offered quotation for deposits in Dollars for
      a period equal to, or as near as possible equal to, the relevant Interest
      Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m.
      (London time) on the second Business Day prior to the commencement of that
      Interest Period (and, for the purposes of this Agreement, “REUTERS BBA
      Page LIBOR 01” means the display designated as “REUTERS BBA Page LIBOR 01”
      on the Telerate Service or such other page as may replace REUTERS BBA Page
      LIBOR 01 on that service for the purpose of displaying rates comparable to
      that rate or on such other service as may be nominated by the
      British

              


      

       


      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                Bankers’
      Association for the purpose of displaying British Bankers’ Association
      Interest Settlement Rates for
  Dollars);  or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                if
      no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
      determined by the Lender to be the arithmetic mean (rounded upwards, if
      necessary, to the nearest one-sixteenth of one per cent.) of the rates per
      annum at which deposits in Dollars are offered to leading banks by other
      leading banks in the London Interbank Market at or about 11.00 a.m.
      (London time) on the second Business Day prior to the commencement of that
      Interest Period for a period equal to that Interest Period and for
      delivery on the first Business Day of
it;

              


      

       

      
        	
                 
      

              	
                “Loan”  means
      the principal amount for the time being outstanding under this
      Agreement;

              


      

      


      
        	
                 
      

              	
                “Major
      Casualty”  means, in relation to a Ship, any casualty to
      the Ship in respect of which the claim or the aggregate of the claims
      against all insurers, before adjustment for any relevant franchise or
      deductible, exceeds $250,000 or the equivalent in any other
      currency;

              


      

      


      “Mandatory Costs” means the
percentage rate per annum calculated by the Lender in accordance with Schedule
4;

      


      
        	
                 
      

              	
                “Margin”  means,
      in relation to a Tranche:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                from
      the date of this Agreement up to the date of payment of the third
      instalment under each Shipbuilding Contract, one point one two five per
      cent (1.125%) per annum;

              


      

      


      
        	
                 
      

              	
                (b)

              	
                from
      the date of payment of the third instalment under each Shipbuilding
      Contract up to the date of payment of the fifth instalment under each
      Shipbuilding Contract, one point one per cent (1.1%) per
      annum;

              


      

      


      
        	
                 
      

              	
                (c)

              	
                from
      the date of payment of the fifth instalment under each Shipbuilding
      Contract up to the date of payment of the sixth instalment under each
      Shipbuilding Contract, one point zero five per cent (1.05%) per annum;
      and

              


      

      


      
        	
                 
      

              	
                (d)

              	
                from
      the date of delivery of each Ship under each Shipbuilding Contract, zero
      point eight five per cent (0.85%) per
annum;

              


      

      


      “Master
Agreement”  means the master agreement (on the 1992 and/or 2002
ISDA (Multicurrency-Crossborder) form), together with the schedule thereto in
the form agreed, to be signed between the Borrowers and the Lender and includes
all Designated Transactions from time to time entered into (whether by way of
novation or otherwise) and Confirmations from time to time exchanged under such
master agreement;

      


      “Master Agreement Security
Deed”  means the deed to be executed by the Borrowers in favour
of the Lender in respect of all the Borrower’s rights under the Master
Agreement, in such form as the Lender may approve or require;

      


      “Mortgage”  means, in
relation to a Ship, the first preferred or priority ship mortgage in favour of
the Lender on that Ship under the Approved Flag (and deed of covenant collateral
thereto, if applicable), in such form as the Lender may approve or
require;

      


      
        	
                 
      

              	
                “Negotiation Period” has
      the meaning given in Clause
4.7;

              


      


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      


      
        	
                 
      

              	
                “Pasedena” means Pasedena
      Navigation Inc., a corporation incorporated in the Republic of the
      Marshall Islands, whose registered office is at Trust Company Complex,
      Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH
      96960;

              


      

      


      
        	
                 
      

              	
                “Payment Currency” has
      the meaning given in Clause 20.4;

              


      

      


      
        	
                 
      

              	
                “Permitted Security
      Interests” means:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                Security
      Interests created by the Finance
Documents;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                liens
      for unpaid crew’s wages in accordance with usual maritime
      practice;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                liens
      for salvage;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                liens
      arising by operation of law for not more than 2 months’ prepaid hire
      under any charter in relation to a Ship not prohibited by this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                liens
      for master’s disbursements incurred in the ordinary course of trading and
      any other lien arising by operation of law or otherwise in the ordinary
      course of the operation, repair or maintenance of a Ship, provided such
      liens do not secure amounts more than 30 days overdue (unless the
      overdue amount is being contested by the relevant Borrower in good faith
      by appropriate steps) and subject, in the case of liens for repair or
      maintenance, to
Clause 13.13(g);

              


      

       

      
        	
                 
      

              	
                (f)

              	
                any
      Security Interest created in favour of a plaintiff or defendant in any
      action of the court or tribunal before whom such action is brought as
      security for costs and expenses where a Borrower is prosecuting or
      defending such action in good faith by appropriate steps;
    and

              


      

       

      
        	
                 
      

              	
                (g)

              	
                Security
      Interests arising by operation of law in respect of taxes which are not
      overdue for payment other than taxes being contested in good faith by
      appropriate steps and in respect of which appropriate reserves have been
      made;

              


      

       

      
        	
                 
      

              	
                “Pertinent Jurisdiction”,
      in relation to a company, means:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                England
      and Wales;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the
      country under the laws of which the company is incorporated or
      formed;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                a
      country in which the company's central management and control is or has
      recently been exercised;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                a
      country in which the overall net income of the company is subject to
      corporation tax, income tax or any similar
tax;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                a
      country in which assets of the company (other than securities issued by,
      or loans to, related companies) having a substantial value are situated,
      in which the company maintains a permanent place of business, or in which
      a Security Interest created by the company must or should be registered in
      order to ensure its validity or priority;
and

              


      

       

      
        	
                 
      

              	
                (f)

              	
                a
      country the courts of which have jurisdiction to make a winding up,
      administration or similar order in relation to the company or which would
      have such jurisdiction if their

              


      

       


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      assistance
were requested by the courts of a country referred to in paragraphs (b) or (c)
above;

       

      
        	
                 
      

              	
                “Potential Event of
      Default”  means an event or circumstance which, with the
      giving of any notice, the lapse of time, a determination of the Lender
      and/or the satisfaction of any other condition, would constitute an Event
      of Default;

              


      

      


      
        	
                 
      

              	
                “Pre Delivery Security
      Assignment”  means, in relation to a Shipbuilding
      Contract and a Refund Guarantee, an assignment of such Shipbuilding
      Contract and of such Refund Guarantee, in such form as the Lender may
      approve or require;

              


      

      


      “Refund
Guarantee”  means each of the Hull 2189 Refund Guarantee and
the Hull 2190 Refund Guarantee and, in the plural, means all of
them;

      


      
        	
                 
      

              	
                “Refund
      Guarantor”  means Korea Export Import Bank (“KEXIM”) acting through
      its office at 16-1, Yoido-Dong, Yeongdeungpo-Gu, Seoul 150-996,
      Korea;

              


      

      


      
        	
                 
      

              	
                “Relevant Person” has the
      meaning given in Clause 18.7;

              


      

      


      
        	
                 
      

              	
                “Repayment
      Date”  means a date on which a repayment is required to
      be made under Clause 7;

              


      

      


      
        	
                 
      

              	
                “Requisition
      Compensation”  includes all compensation or other moneys
      payable by reason of any act or event such as is referred to in paragraph
      (b) of the definition of “Total
Loss”;

              


      

      


      
        	
                 
      

              	
                “Retention
      Account”  means an account in the name of the Borrowers
      with the Lender in Glasgow designated “Tyler Navigation Inc./Pasedena
      Navigation Inc. - Retention Account”, or any other account (with that or
      another office of the Lender or with a bank or financial institution other
      than the Lender) which is designated by the Lender as the Retention
      Account for the purposes of this
Agreement;

              


      

      


      
        	
                 
      

              	
                “Secured
      Liabilities”  means all liabilities which the Borrowers,
      the Security Parties or any of them have, at the date of this Agreement or
      at any later time or times, under or by virtue of the Finance Documents or
      any judgment relating to the Finance Documents; and for this purpose,
      there shall be disregarded any total or partial discharge of these
      liabilities, or variation of their terms, which is effected by, or in
      connection with, any bankruptcy, liquidation, arrangement or other
      procedure under the insolvency laws of any
  country;

              


      

      


      
        	
                 
      

              	
                “Security
      Interest”  means:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                a
      mortgage, charge (whether fixed or floating) or pledge, any maritime or
      other lien or any other security interest of any
  kind;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the
      rights of the plaintiff under an action in rem in which the
      vessel concerned has been arrested or a writ has been issued or similar
      step taken; and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                any
      arrangement entered into by a person (A) the effect of which is to place
      another person (B) in a position which is similar, in economic terms, to
      the position in which B would have been had he held a security interest
      over an asset of A; but (c) does not apply to a right of set off or
      combination of accounts conferred by the standard terms of business of a
      bank or financial institution;

              


      

       

      
        	
                 
      

              	
                “Security
      Party”  means the Corporate Guarantor, the Approved
      Manager and any other person (except the Lender) who, as a surety or
      mortgagor, as a party to any subordination or
  priorities

              


      


      
        
           


        

        
          9

          
            

          

        

        
           


        

      


      arrangement,
or in any similar capacity, executes a document falling within paragraph (i) of
the definition of “Finance Documents”;

      


      
        	
                 
      

              	
                “Security
      Period”  means the period commencing on the date of this
      Agreement and ending on the date on which the Lender notifies the
      Borrowers and the Security Parties
that:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                all
      amounts which have become due for payment by any Borrower or any Security
      Party under the Finance Documents have been
  paid;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                no
      amount is owing or has accrued (without yet having become due for payment)
      under any Finance Document;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                no
      Borrower nor any Security Party has any future or contingent liability
      under Clause 19, 20 or 21 below or any other provision of this Agreement
      or another Finance Document; and

              


      

       

      
        	
                 
      

              	
                (d)

              	
                the
      Lender does not consider that there is a significant risk that any payment
      or transaction under a Finance Document would be set aside, or would have
      to be reversed or adjusted, in any present or possible future bankruptcy
      of a Borrower or a Security Party or in any present or possible future
      proceeding relating to a Finance Document or any asset covered (or
      previously covered) by a Security Interest created by a Finance
      Document;

              


      

       

      “Ship” means each of Hull 2189
and Hull 2190 and, in the plural, means all of them;

      


      
        	
                 
      

              	
                “Shipbuilding
      Contract”  means each of the Hull 2189 Shipbuilding
      Contract and the Hull 2190 Shipbuilding Contract and, in the plural, means
      all of them;

              


      

      


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

       

      
        	
                 
      

              	
                (a)

              	
                actual,
      constructive, compromised, agreed or arranged total loss of a
      Ship;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any
      expropriation, confiscation, requisition or acquisition of a Ship, whether
      for full consideration, a consideration less than her proper value, a
      nominal consideration or without any consideration, which is effected by
      any government or official authority or by any person or persons claiming
      to be or to represent a government or official authority, excluding a
      requisition for hire for a fixed period not exceeding one year without any
      right to an extension;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                any
      condemnation of a Ship by any tribunal or by any person or person claiming
      to be a tribunal;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                any
      arrest, capture, seizure or detention of a Ship (including any hijacking
      or theft) unless she is within 30 days redelivered to the full control of
      the Borrower owning such Ship;

              


      

       

      
        	
                 
      

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

              


      

      


      
        	
                 
      

              	
                (a)

              	
                in
      the case of an actual loss of a Ship, the date on which it occurred or, if
      that is unknown, the date when such Ship was last heard
  of;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                in
      the case of a constructive, compromised, agreed or arranged total loss of
      a Ship, the earliest of:

              


      

       


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                (i)

              	
                the
      date on which a notice of abandonment is given to the insurers;
      and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      date of any compromise, arrangement or agreement made by or on behalf of
      the Borrower owning such Ship, with such Ship's insurers in which the
      insurers agree to treat such Ship as a total loss;
  and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                in
      the case of any other type of total loss, on the date (or the most likely
      date) on which it appears to the Lender that the event constituting the
      total loss occurred;

              


      

       

      
        	
                 
      

              	
                “Tranche
      A”  means the aggregate of the six Advances to be made
      available by the Lender to the Borrowers to assist Tyler in its
      acquisition of Hull 2189;

              


      

      


      
        	
                 
      

              	
                “Tranche
      B”  means the aggregate of the six Advances to be made
      available by the Lender to the Borrowers to assist Pasedena in its
      acquisition of Hull 2190;

              


      

      


      
        	
                 
      

              	
                “Tranche”  means
      either of Tranche A or Tranche B, and in the plural means all of them;
      and

              


      

      


      
        	
                 
      

              	
                “Tyler” means Tyler
      Navigation Inc., a corporation incorporated in the Republic of the
      Marshall Islands, whose registered office is at Trust Company Complex,
      Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH
      96960.

              


      

      


      
        	
                1.2

              	
                Construction of certain
      terms.  In this
Agreement:

              


      

       

      
        	
                 
      

              	
                “approved”  means,
      for the purposes of Clause 12, approved in writing by the
      Lender;

              


      

      


      
        	
                 
      

              	
                “asset” includes every
      kind of property, asset, interest or right, including any present, future
      or contingent right to any revenues or other
  payment;

              


      

      


      
        	
                 
      

              	
                “company” includes any
      partnership, joint venture and unincorporated
  association;

              


      

      


      “consent” includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;

      


      
        	
                 
      

              	
                “contingent liability”
      means a liability which is not certain to arise and/or the amount of which
      remains unascertained;

              


      

      


      
        	
                 
      

              	
                “document” includes a
      deed; also a letter, fax or telex;

              


      

      


      
        	
                 
      

              	
                “excess
      risks”  means, in relation to a Ship, the proportion of
      claims for general average, salvage and salvage charges not recoverable
      under the hull and machinery policies in respect of the Ship in
      consequence of her insured value being less than the value at which the
      Ship is assessed for the purpose of such
claims;

              


      

      


      
        	
                 
      

              	
                “expense” means any kind
      of cost, charge or expense (including all legal costs, charges and
      expenses) and any applicable value added or other
  tax;

              


      

      


      
        	
                 
      

              	
                “law” includes any form
      of delegated legislation, any order or decree, any treaty or international
      convention and any regulation or resolution of the Council of the European
      Union, the European Commission, the United Nations or its Security
      Council;

              


      

      


      
        	
                 
      

              	
                “legal or administrative
      action” means any legal proceeding or arbitration and any
      administrative or regulatory action or
  investigation;

              


      


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      


      


      
        	
                 
      

              	
                “liability” includes
      every kind of debt or liability (present or future, certain or
      contingent), whether incurred as principal or surety or
      otherwise;

              


      

      


      
        	
                 
      

              	
                “months”  shall
      be construed in accordance with Clause
1.3;

              


      

      


      
        	
                 
      

              	
                “obligatory
      insurances”  means, in relation to a Ship, all insurances
      effected, or which the Borrower owning the Ship is obliged to effect,
      under Clause 12 below or any other provision of this Agreement or another
      Finance Document;

              


      

      


      
        	
                 
      

              	
                “parent
      company”  has the meaning given in Clause
      1.4;

              


      

      


      
        	
                 
      

              	
                “person”  includes
      any company; any state, political sub-division of a state and local or
      municipal authority; and any international
  organisation;

              


      

      


      
        	
                 
      

              	
                “policy”, in relation to
      any insurance, includes a slip, cover note, certificate of entry or other
      document evidencing the contract of insurance or its
  terms;

              


      

      


      
        	
                 
      

              	
                “protection and indemnity
      risks”  means the usual risks covered by a protection and
      indemnity association managed in London, including pollution risks and the
      proportion (if any) of any sums payable to any other person or persons in
      case of collision which are not recoverable under the hull and machinery
      policies by reason of the incorporation therein of clause 1 of the
      Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time
      Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause
      (1/10/71) or any equivalent
provision;

              


      

      


      “regulation” includes any
regulation, rule, official directive, request or guideline (either having the
force of law or compliance with which is reasonable in the ordinary course of
business of the party concerned) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;

      


      
        	
                 
      

              	
                “subsidiary”  has
      the meaning given in Clause 1.4;

              


      

      


      “successor” includes any person
who is entitled (by assignment, novation, merger or otherwise) to any other
person’s rights under this Agreement or any other Finance Document (or any
interest in those rights) or who, as administrator, liquidator or otherwise, is
entitled to exercise those rights; and in particular references to a successor
include a person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction or other
reorganisation of it or any other person;

      


      
        	
                 
      

              	
                “tax”  includes
      any present or future tax, duty, impost, levy or charge of any kind which
      is imposed by any state, any political sub-division of a state or any
      local or municipal authority (including any such imposed in connection
      with exchange controls), and any connected penalty, interest or fine;
      and

              


      

      


      
        	
                 
      

              	
                “war
      risks”  includes the risk of mines and all risks excluded
      by clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or clause 24
      of the Institute Time Clauses (Hulls)
  (1/11/1995).

              


      

      


      
        	
                1.3

              	
                Meaning of
      “month”.  A period of one or more “months” ends on the
      day in the relevant calendar month numerically corresponding to the day of
      the calendar month on which the period started (“the numerically corresponding
      day”), but:

              


      

       


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      


       

      
        	
                (a)

              	
                on
      the Business Day following the numerically corresponding day if the
      numerically corresponding day is not a Business Day or, if there is no
      later Business Day in the same calendar month, on the Business Day
      preceding the numerically corresponding day;
or

              


      

       

      
        	
                (b)

              	
                on
      the last Business Day in the relevant calendar month, if the period
      started on the last Business Day in a calendar month or if the last
      calendar month of the period has no numerically corresponding
      day;

              


      

       

      and “month” and “monthly” shall be construed
accordingly.

      


      
        	
                1.4

              	
                Meaning of
      “subsidiary”.  A company (S) is a subsidiary of another
      company (P) if:

              


      

       

      
        	
                (a)

              	
                a
      majority of the issued shares in S (or a majority of the issued shares in
      S which carry unlimited rights to capital and income distributions) are
      directly owned by P or are indirectly attributable to P;
  or

              


      

       

      
        	
                (b)

              	
                P
      has direct or indirect control over a majority of the voting rights
      attached to the issued shares of S;
or

              


      

       

      
        	
                (c)

              	
                P
      has the direct or indirect power to appoint or remove a majority of the
      directors of S; or

              


      

       

      
        	
                (d)

              	
                P
      otherwise has the direct or indirect power to ensure that the affairs of S
      are conducted in accordance with the wishes of
  P;

              


      

       

      and any company of which S is a
subsidiary is a parent company of S.

      


      
        	
                1.5

              	
                General
      Interpretation.

              


      

       

      
        	
                (a)

              	
                In
      this Agreement:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                references
      to, or to a provision of, a Finance Document or any other document are
      references to it as amended or supplemented, whether before the date of
      this Agreement or otherwise;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                references
      to, or to a provision of, any law include any amendment, extension,
      re-enactment or replacement, whether made before the date of this
      Agreement or otherwise; and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                words
      denoting the singular number shall include the plural and vice
      versa.

              


      

      


      
        	
                (b)

              	
                Clauses
      1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary
      intention appears.

              


      

       

      
        	
                (c)

              	
                References
      in Clause 1.1 to a document being in the form of a particular Appendix
      include references to that form with any modifications to that form which
      the Lender approves or reasonably
requires.

              


      

       

      
        	
                (d)

              	
                The
      clause headings shall not affect the interpretation of this
      Agreement.

              


      

       


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      


       

      
        	
                2

              	
                FACILITY

              


      

       

      
        	
                2.1

              	
                Amount of
      facility.  Subject to the other provisions of this
      Agreement, the Lender shall make available to the Borrowers a loan
      facility of up to $70,000,000 in two Tranches (each in six Advances), each
      in an amount not exceeding the lesser of (a) $35,000,000 and (b) 75% of
      the Fair Market Value of the relevant Ship as at its Delivery
      Date.

              


      

       

      
        	
                2.2

              	
                Purpose of
      Loan.  Each Borrower undertakes with the Lender to use
      each Advance only for the purpose stated in the preamble to this
      Agreement.

              


      

       

      
        	
                3

              	
                DRAWDOWN

              


      

       

      
        	
                3.1

              	
                Request for
      Advance.  Subject to the following conditions, the
      Borrowers may request an Advance to be made by ensuring that the Lender
      receives a completed Drawdown Notice not later than 11.00 a.m. (London
      time) 3 Business Days prior to the intended Drawdown
  Date.

              


      

       

      
        	
                3.2

              	
                Availability.  The
      conditions referred to in Clause 3.1 are
that:

              


      

       

      
        	
                (a)

              	
                a
      Drawdown Date has to be a Business Day during the Availability
      Period;

              


      

       

      
        	
                (b)

              	
                the
      amount of the first two Advances in respect of each Tranche shall not
      exceed 90% of the amount of the first and second instalments under each
      Shipbuilding Contract as stated in Schedule 3 hereto, together with
      accrued interest on drawings hereunder up to payment of the third
      instalment under each Shipbuilding
Contract;

              


      

       

      
        	
                (c)

              	
                the
      amount of the third and fourth Advances of each Tranche shall not exceed
      80% of the amount of the third and fourth instalments under each
      Shipbuilding Contract, as stated in Schedule 3
  hereto;

              


      

       

      
        	
                (d)

              	
                the
      amount of the fifth Advance of each Tranche shall not exceed 62.5% of the
      amount of the fifth instalment under each Shipbuilding Contract, as stated
      in Schedule 3 hereto;

              


      

       

      
        	
                (e)

              	
                the
      amount of each Tranche shall not exceed the lesser of (i) $35,000,000 and
      (ii) 75% of the Fair Market Value of the Ship financed by such Tranche
      (calculated as at the Delivery Date of the relevant
  Ship);

              


      

       

      
        	
                (f)

              	
                the
      aggregate amount of the Tranches shall not exceed $70,000,000;
      and

              


      

       

      
        	
                (g)

              	
                the
      Borrowers have complied with the provisions of Clause 8.1 with respect to
      the relevant Advance.

              


      

       

      
        	
                3.3

              	
                Drawdown Notice
      irrevocable.  A Drawdown Notice must be signed by a
      director or other authorised person of each Borrower; and once served, a
      Drawdown Notice cannot be revoked without the prior consent of the
      Lender.

              


      

       

      
        	
                3.4

              	
                Disbursement of
      Advance.  Subject to the provisions of this Agreement,
      the Lender shall on each Drawdown Date pay to the Borrowers the amount of
      the relevant Advance; and that payment to the Borrowers shall be made to
      the account which the Borrowers specify in the Drawdown
      Notice.

              


      

       


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      


       

      
        	
                3.5

              	
                Disbursement of Advance to
      third party.   The payment by the Lender under
      Clause 3.4 shall constitute the making of the Advance and the Borrowers
      shall thereupon become indebted, as principal and direct obligor, to the
      Lender in an amount equal to that
Advance.

              


      

       

      
        	
                4

              	
                INTEREST

              


      

       

      
        	
                4.1

              	
                Payment of normal
      interest.  Subject to Clause 4.2 and to the other
      provisions of this Agreement, interest on each Advance in respect of each
      Interest Period shall be paid by the Borrowers on the last day of that
      Interest Period.

              


      

       

      
        	
                4.2

              	
                Payment of Deferred
      Interest.  The accrued Deferred Interest for each Tranche
      will be due and payable by the Borrowers to the Lender as
      follows:

              


      

       

      
        	
                (a)

              	
                the
      Deferred Interest for Tranche A on the Delivery Date for Hull 2189;
      and

              


      

       

      
        	
                (b)

              	
                the
      Deferred Interest for Tranche B on the Delivery Date for Hull
      2190.

              


      

       

      The
Deferred Interest shall constitute a loan advanced from the Lender to the
Borrowers forming part of the Loan, secured by the Finance Documents, and due
and payable on the dates provided above. Such loan shall be (a) of a principal
amount equal to the amount of the Deferred Interest, (b) treated as advanced to
the Borrowers at the times of accrual thereof and (c) bearing interest at the
rate of interest provided for hereunder up and until full
repayment.

       

      
        	
                4.3

              	
                Normal rate of
      interest.  Subject to the provisions of this Agreement,
      the rate of interest on each Advance in respect of an Interest Period
      shall be the aggregate of (i) the applicable Margin, (ii) the Mandatory
      Costs (if any) and (iii) LIBOR for that Interest
  Period.

              


      

       

      
        	
                4.4

              	
                Payment of accrued
      interest.  In the case of an Interest Period longer than
      3 months, accrued interest shall be paid every 3 months during that
      Interest Period and on the last day of that Interest
    Period.

              


      

       

      
        	
                4.5

              	
                Notification of market
      disruption.  The Lender shall promptly notify the
      Borrowers if for any reason the Lender is unable to obtain Dollars in the
      London Interbank Market in order to fund an Advance or the Loan during any
      Interest Period, stating the circumstances which have caused such notice
      to be given.

              


      

       

      
        	
                4.6

              	
                Suspension of
      drawdown.  If the Lender's notice under Clause 4.5 is
      served before an Advance is made, the Lender’s obligation to make that
      Advance shall be suspended while the circumstances referred to in the
      Lender's notice continue.

              


      

       

      
        	
                4.7

              	
                Negotiation of alternative rate
      of interest.  If the Lender’s notice under Clause 4.5 is
      served after an Advance or the Loan is made available, the Borrowers and
      the Lender shall use reasonable endeavours to agree, within the 30 days
      after the date on which the Lender serves its notice under Clause 4.5 (the
      “Negotiation
      Period”), an alternative interest rate or (as the case may be) an
      alternative basis for the Lender to fund or continue to fund the Advance
      or the Loan during the Interest Period
  concerned.

              


      

       

      
        	
                4.8

              	
                Application of agreed
      alternative rate of interest.  Any alternative interest
      rate or an alternative basis which is agreed during the Negotiation Period
      shall take effect in accordance with the terms
  agreed.

              


      

       


      
        
           


        

        
          15

          
            

          

        

        
           


        

      


      


       

      
        	
                4.9

              	
                Alternative rate of interest in
      absence of agreement.  If an alternative interest rate or
      alternative basis is not agreed within the Negotiation Period, and the
      relevant  circumstances are continuing at the end of the
      Negotiation Period, then the Lender shall set an interest period and
      interest rate representing the cost of funding of the Lender in Dollars or
      in any available currency of the relevant Advance or the Loan plus the
      applicable Margin and the Mandatory Costs (if any); and the procedure
      provided for by this Clause 4.8 shall be repeated if the relevant
      circumstances are continuing at the end of the interest period so set by
      the Lender.

              


      

       

      
        	
                4.10

              	
                Notice of
      prepayment.  If the Borrowers do not agree with an
      interest rate set by the Lender under Clause 4.9, the Borrowers may give
      the Lender not less than 15 Business Days' notice of their intention to
      prepay the relevant Advance or the Loan at the end of the interest period
      set by the Lender.

              


      

       

      
        	
                4.11

              	
                Prepayment; termination of
      Commitments. A notice under Clause 4.10 shall be irrevocable and on
      the last Business Day of the interest period set by the Lender, the
      Borrowers shall prepay (without premium or penalty) the Loan together with
      accrued interest thereon at the applicable rate plus the applicable Margin
      and the Mandatory Costs (if any).

              


      

       

      
        	
                4.12

              	
                Application of
      prepayment.  The provisions of Clause 7 shall apply in
      relation to the prepayment.

              


      

       

      
        	
                4.13

              	
                Interest Rate Hedging.
      The Borrowers shall enter into interest rate hedging arrangements pursuant
      to the Master Agreement to fix the interest rate relative to at least 50%
      of the amount of the Loan, following drawdown of the Delivery Advance with
      respect to the last Ship to be delivered. Unless the Lender agrees
      otherwise, any such hedging arrangements shall be from floating rate to
      fixed rate only and shall not (i) exceed the amount of the Loan or (ii)
      extend beyond the final Repayment
Date.

              


      

       

      
        	
                5

              	
                INTEREST
      PERIODS

              


      

       

      
        	
                5.1

              	
                Commencement of Interest
      Periods.  The first Interest Period applicable to an
      Advance shall commence on the Drawdown Date for that Advance and each
      subsequent Interest Period shall commence on the expiry of the preceding
      Interest Period.

              


      

       

      
        	
                5.2

              	
                Duration of normal Interest
      Periods.  Subject to Clauses 5.3 and 5.4, each Interest
      Period in respect of each Advance shall
be:

              


      

       

      
        	
                (a)

              	
                1,
      3 or 6 months as notified by the Borrowers to the Lender not later than
      11.00 a.m. (London time) 3 Business Days before the commencement of the
      Interest Period; or

              


      

       

      
        	
                (b)

              	
                in
      the case of the first Interest Period applicable to the second and any
      subsequent Advance of each Tranche, a period ending on the last day of the
      then current Interest Period applicable to such Tranche, whereupon all of
      the Advances in respect of such Tranche shall be consolidated and treated
      as a single Advance;

              


      

       

      
        	
                (c)

              	
                3
      months, if the Borrowers fail to notify the Lender by the time specified
      in paragraph (a) above; or

              


      

       

      
        	
                (d)

              	
                such
      other period as the Lender may agree with the
  Borrowers.

              


      

       


      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      


       

      
        	
                5.3

              	
                Duration of Interest Periods
      for repayment instalments.  In respect of an amount due
      to be repaid under Clause 7 on a particular Repayment Date, an Interest
      Period in relation to the relevant Tranche shall end on that Repayment
      Date.

              


      

       

      
        	
                5.4

              	
                Non-availability of matching
      deposits for Interest Period selected.  If, after the
      Borrowers have selected an Interest Period longer than 3 months, the
      Lender notifies the Borrowers by 11.00 a.m. (London time) on the second
      Business Day before the commencement of the Interest Period that it is not
      satisfied that deposits in Dollars for a period equal to the Interest
      Period will be available to it in the London Interbank Market when the
      Interest Period commences, the Interest Period shall be of 3 months
      duration.

              


      

       

      
        	
                6

              	
                DEFAULT
      INTEREST

              


      

       

      
        	
                6.1

              	
                Payment of default interest on
      overdue amounts.  The Borrowers shall pay interest in
      accordance with the following provisions of this Clause 6 on any amount
      payable by the Borrowers under any Finance Document which the Lender or
      the other designated payee does not receive on or before the relevant
      date, that is:

              


      

       

      
        	
                (a)

              	
                the
      date on which the Finance Documents provide that such amount is due for
      payment; or

              


      

       

      
        	
                (b)

              	
                if
      a Finance Document provides that such amount is payable on demand, the
      date on which the demand is served;
or

              


      

       

      
        	
                (c)

              	
                if
      such amount has become immediately due and payable under Clause 18.4, the
      date on which it became immediately due and
  payable.

              


      

       

      
        	
                6.2

              	
                Default rate of
      interest.  Interest shall accrue on an overdue amount
      from (and including) the relevant date until the date of actual payment
      (as well after as before judgment) at the rate per annum determined by the
      Lender to be two per cent. (2%)
above:

              


      

       

      
        	
                (a)

              	
                in
      the case of an overdue amount of principal, the higher of the rates set
      out at paragraphs (a) and (b) of Clause 6.3;
or

              


      

       

      
        	
                (b)

              	
                in
      the case of any other overdue amount, the rate set out at paragraph (b) of
      Clause 6.3.

              


      

       

      
        	
                6.3

              	
                Calculation of default rate of
      interest.  The rates referred to in Clause 6.2
      are:

              


      

       

      
        	
                (a)

              	
                the
      rate applicable to the overdue principal amount immediately prior to the
      relevant date (but only for any unexpired part of any then current
      Interest Period);

              


      

       

      
        	
                (b)

              	
                the
      aggregate of the Mandatory Costs (if any) and the applicable Margin plus,
      in respect of successive periods of any duration (including at call) up to
      3 months which the Lender may select from time to
  time:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                LIBOR;
      or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if
      the Lender determines that Dollar deposits for any such period are not
      being made available to it by leading banks in the London Interbank Market
      in the ordinary course of business, a rate from time to time determined by
      the Lender by reference to the cost of funds to it from such other sources
      as the Lender may from time to time
determine.

              


      

       


      
        
           


        

        
          17

          
            

          

        

        
           


        

      


      


       

      
        	
                6.4

              	
                Notification of interest
      periods and default rates.  The Lender shall promptly
      notify the Borrowers of each interest rate determined by the Lender under
      Clause 6.3 and of each period selected by the Lender for the purposes of
      paragraph (b) of that Clause; but this shall not be taken to imply that
      the Borrowers are liable to pay such interest only with effect from the
      date of the Lender's notification.

              


      

       

      
        	
                6.5

              	
                Payment of accrued default
      interest.  Subject to the other provisions of this
      Agreement, any interest due under this Clause shall be paid on (i) the
      last day of the period by reference to which it was determined and (ii)
      the date on which any principal amount in respect of which it is accruing
      is paid.

              


      

       

      
        	
                6.6

              	
                Compounding of default
      interest.  Any such interest which is not paid at the end
      of the period by reference to which it was determined shall thereupon be
      compounded.

              


      

       

      
        	
                7

              	
                REPAYMENT
      AND PREPAYMENT

              


      

       

      
        	
                7.1

              	
                Amount of repayment
      instalments.  The Borrowers shall repay each Tranche by
      forty (40) equal consecutive quarterly instalments of Five hundred and six
      thousand seven hundred and fifty Dollars ($506,750) each and by a balloon
      payment of fourteen million seven hundred and thirty thousand Dollars
      ($14,730,000).

              


      

       

      
        	
                7.2

              	
                Repayment
      Dates.

              


      

       

      
        	
                (a)

              	
                The
      first instalment in respect of Tranche A shall be repaid on the date
      falling three (3) months after the Drawdown Date of the Delivery Advance
      for Hull 2189, each subsequent instalment shall be repaid at three monthly
      intervals thereafter and the balloon payment for Tranche A shall be repaid
      on the date falling on the tenth anniversary of the Drawdown Date for the
      Delivery Advance for Hull 2189.

              


      

       

      
        	
                (b)

              	
                The
      first instalment in respect of Tranche B shall be repaid on the next
      succeeding repayment date for Tranche A following the Drawdown Date of the
      Delivery Advance for Hull 2190, each subsequent instalment shall be repaid
      at three monthly intervals thereafter and the balloon payment for Tranche
      B shall be repaid on the date falling on the tenth anniversary of the
      Drawdown Date for the Delivery Advance for Hull
  2190.

              


      

       

      
        	
                (c)

              	
                If
      the amount of either Tranche drawdown hereunder is less than $35,000,000
      then the amount of the relevant repayment instalments and the amount of
      the balloon payment shall be reduced pro rata by the amount of such
      difference.

              


      

       

      
        	
                7.3

              	
                Final Repayment
      Date.  On the final Repayment Date, the Borrowers shall
      additionally pay to the Lender all other sums then accrued or owing under
      any Finance Document.

              


      

       

      
        	
                7.4

              	
                Voluntary
      prepayment.  Subject to the following conditions, the
      Borrowers may prepay the whole or part of a Tranche on the last day of an
      Interest Period in respect thereof.

              


      

       

      
        	
                7.5

              	
                Conditions for voluntary
      prepayment.  The conditions referred to in Clause 7.4 are
      that:

              


      

       

      
        	
                (a)

              	
                a
      partial prepayment shall be in the minimum amount of one million Dollars
      ($1,000,000) or a multiple thereof;

              


      

       


      
        
           


        

        
          18

          
            

          

        

        
           


        

      


      


       

      
        	
                (b)

              	
                the
      Lender has received from the Borrowers at least one month’s prior written
      notice specifying the amount to be prepaid and the date on which the
      prepayment is to be made (such date shall be the last day of an Interest
      Period of the relevant Tranche);

              


      

       

      
        	
                (c)

              	
                the
      Borrowers have provided evidence satisfactory to the Lender that any
      consent required by any Borrower or any Security Party in connection with
      the prepayment has been obtained and remains in force, and that any
      requirement relevant to this Agreement which affects any Borrower or any
      Security Party has been complied
with.

              


      

       

      
        	
                7.6

              	
                Effect of notice of
      prepayment.  A prepayment notice may not be withdrawn or
      amended without the consent of the Lender and the amount specified in the
      prepayment notice shall become due and payable by the Borrowers on the
      date for prepayment specified in the prepayment
  notice.

              


      

       

      
        	
                7.7

              	
                Mandatory
      prepayment.  The Borrowers shall be obliged to cancel the
      relevant portion of the Commitment and/or to prepay the relevant portion
      of the Loan specified in Clause
7.8:

              


      

       

      
        	
                (a)

              	
                if
      a Ship is sold (which sale shall be subject to the prior written consent
      of the Lender) or becomes a Total
Loss:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                in
      the case of a sale, on or before the date on which the sale is completed
      by delivery of such Ship to the buyer;
or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in
      the case of a Total Loss, on the earlier of the date falling 120 days
      after the Total Loss Date and the date of receipt by the Lender of the
      proceeds of insurance relating to such Total
  Loss;

              


      

       

      
        	
                (b)

              	
                if
      any of the following occurs, on demand by the
  Lender:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                any
      of the events specified in Article XI of a Shipbuilding Contract or any
      other default by a Borrower or the Builder under any Shipbuilding
      Contract, giving a right of rescission or termination of the Shipbuilding
      Contract either to the relevant Borrower and/or the
    Builder;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      Shipbuilding Contract or any Refund Guarantee is cancelled, terminated,
      rescinded or suspended or otherwise ceases to remain in force for any
      reason (other than by way of expiry in accordance with its terms);
      or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                any
      Shipbuilding Contract is materially amended or varied without the prior
      written consent of the Lender, except for any such amendment or variation
      as is permitted by this Agreement or any other relevant Finance Document;
      or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                any
      Ship has not for any reason been delivered to and accepted by the relevant
      Borrower under the relevant Shipbuilding Contract by the date falling 210
      days after the applicable scheduled Delivery Date referred to in Article
      VII of each Shipbuilding Contract,

              


      

       

      together
with (if, following a prepayment under this Clause 7.7, the Borrowers would be
required to make a prepayment (or provide additional security) under Clause
14.1) the amount of any such prepayment due under Clause 14.1.


      
        
           


        

        
          19

          
            

          

        

        
           


        

      


      


      
        	
                7.8

              	
                Amount of Mandatory
      Prepayment. The relevant portion of the Commitment to be cancelled
      and the relevant portion of the Loan to be prepaid in the circumstances
      contemplated in Clause 7.7 is:

              


      

       

      
        	
                (a)

              	
                if
      paragraph (a) of Clause 7.7
applies:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                if
      prior to the delivery of a Ship, the Advances made in relation to such
      Ship shall be prepaid in full and the undrawn Advances for such Ship shall
      be cancelled; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if
      after delivery of a Ship, the Tranche relating to such Ship shall be
      prepaid in full;

              


      

       

      
        	
                (b)

              	
                if
      paragraph (b) of Clause 7.7 applies, the Advances made in relation to such
      Ship shall be prepaid in full and the undrawn Advances for such Ship shall
      be cancelled.

              


      

       

      
        	
                7.9

              	
                Amounts payable on
      prepayment.  A prepayment shall be made together with
      accrued interest (and any other amount payable under Clause 20 or
      otherwise) in respect of the amount prepaid and, if the prepayment is not
      made on the last day of an Interest Period relating to the relevant
      Tranche, together with any sums payable under Clause 20.1(b) but without
      premium or penalty.

              


      

       

      
        	
                7.10

              	
                Application of partial
      prepayment.  Each partial prepayment made pursuant to
      Clause 7.4 or any other provisions of this Agreement, shall be applied pro
      rata against the repayment instalments (including the balloon payment)
      specified in Clause 7.1.

              


      

       

      
        	
                7.11

              	
                No
      reborrowing.  Other than in respect of repayments of
      Deferred Interest pursuant to Clause 4.2, no amount prepaid or repaid may
      be reborrowed.

              


      

       

      
        	
                7.12

              	
                Unwinding of Designated
      Transactions.  On or prior to any repayment, cancellation
      or prepayment under this Clause 7 or any other provision of this
      Agreement, the Borrowers shall either (a) provide such additional security
      to the Lender in respect of continuing Designated Transactions as shall be
      acceptable to the Lender in its sole and absolute discretion or (b)
      reverse, offset, unwind or otherwise terminate wholly or partially the
      continuing Designated Transactions so that the notional principal amount
      of the continuing Designated Transactions thereafter remaining does not
      and will not in the future (taking into account the scheduled
      amortisation) exceed the aggregate amount of the Loan as reducing from
      time to time thereafter pursuant to Clause
7.1.

              


      

       

      
        	
                8

              	
                CONDITIONS
      PRECEDENT

              


      

       

      
        	
                8.1

              	
                Documents, fees and no
      default.  The Lender's obligation to contribute to an
      Advance is, in addition to the conditions set out in Clause 3.2, subject
      to the following conditions
precedent:

              


      

       

      
        	
                (a)

              	
                that,
      on or before the date of signing of this Agreement, the Lender receives
      the documents described in Part A of Schedule 2 in form and substance
      satisfactory to the Lender and its
lawyers;

              


      

       

      
        	
                (b)

              	
                that,
      on or before the Drawdown Date of the first Advance of each Tranche, the
      Lender receives the documents described in Part B of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              


      

       

      
        	
                (c)

              	
                that,
      on or before the Drawdown Date of the second Advance of each Tranche, the
      Lender receives the documents described in Part C of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              


      

       


      
        
           


        

        
          20

          
            

          

        

        
           


        

      


      


       

      
        	
                (d)

              	
                that,
      on or before the Drawdown Date of the third Advance of each Tranche, the
      Lender receives the documents described in Part D of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              


      

       

      
        	
                (e)

              	
                that,
      on or before the Drawdown Date of the fourth Advance of each Tranche, the
      Lender receives the documents described in Part E of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              


      

       

      
        	
                (f)

              	
                that,
      on or before the Drawdown Date of the fifth Advance of each Tranche, the
      Lender receives the documents described in Part F of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              


      

       

      
        	
                (g)

              	
                that,
      on or before the Drawdown Date of the Delivery Advance of each Tranche,
      the Lender receives the documents described in Part G of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              


      

       

      
        	
                (h)

              	
                that,
      on or before the service of the first Drawdown Notice in respect of each
      Tranche, the Lender receives any fees payable pursuant to Clause 19.1 and
      has received payment of the expenses referred to in Clause
      19.2;

              


      

       

      
        	
                (i)

              	
                that
      both at the date of each Drawdown Notice and at each Drawdown
      Date:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                no
      Event of Default or Potential Event of Default has occurred and is
      continuing or would result from the borrowing of the
  Loan;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      representations and warranties in Clause 9 and those of the Borrowers or
      any Security Party which are set out in the other Finance Documents would
      be true and not misleading if repeated on each of those dates with
      reference to the circumstances then
existing;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                none
      of the circumstances contemplated by Clause 4.5 has occurred and is
      continuing;

              


      

       

      
        	
                (j)

              	
                that,
      if the ratio set out in Clause 14.1 were applied immediately following the
      making of the relevant Advance, the Borrowers would not be obliged to
      provide additional security or prepay part of the Loan under that Clause;
      and

              


      

       

      
        	
                (k)

              	
                that
      the Lender has received, and found to be acceptable to it, any further
      opinions, consents, agreements and documents in connection with the
      Finance Documents which the Lender may reasonably request by notice to the
      Borrowers prior to the relevant Drawdown
Date.

              


      

       

      
        	
                8.2

              	
                Waiver of conditions
      precedent.  If the Lender, at its discretion, permits an
      Advance to be borrowed before certain of the conditions referred to in
      Clause 8.1 are satisfied, the Borrowers shall ensure that those conditions
      are satisfied within 5 Business days after the relevant Drawdown Date (or
      such longer period as the Lender may
specify).

              


      

       

      
        	
                9

              	
                REPRESENTATIONS
      AND WARRANTIES

              


      

       

      
        	
                9.1

              	
                General.  Each
      Borrower represents and warrants to the Lender as
  follows.

              


      

       

      
        	
                9.2

              	
                Status.  Each
      Borrower is duly incorporated and validly existing and in good standing
      under the laws of the Republic of the Marshall
  Islands.

              


      

       


      
        
           


        

        
          21

          
            

          

        

        
           


        

      


      


       

      
        	
                9.3

              	
                Share capital and
      ownership.  Each Borrower has an authorised share capital
      divided into 500 registered shares with a par value of $0.01 each, all of
      which shares have been issued fully
paid.

              


      

       

      
        	
                9.4

              	
                Corporate
      power.  Each Borrower has the corporate capacity, and has
      taken all corporate action and obtained all consents necessary for
      it:

              


      

       

      
        	
                (a)

              	
                to
      execute the Shipbuilding Contract to which it is a party, to purchase and
      pay for the relevant Ship under the relevant Shipbuilding Contract and
      register such Ship in its name under the Approved
  Flag;

              


      

       

      
        	
                (b)

              	
                to
      execute the Finance Documents to which that Borrower is a party;
      and

              


      

       

      
        	
                (c)

              	
                to
      borrow under this Agreement and to make all the payments contemplated by,
      and to comply with, those Finance
Documents.

              


      

       

      
        	
                9.5

              	
                Consents in
      force.  All the consents referred to in Clause 10.4
      remain in force and nothing has occurred which makes any of them liable to
      revocation.

              


      

       

      
        	
                9.6

              	
                Legal validity; effective
      Security Interests.  The Finance Documents to which each
      Borrower is a party, do now or, as the case may be, will, upon execution
      and delivery (and, where applicable, registration as provided for in the
      Finance Documents):

              


      

       

      
        	
                (a)

              	
                constitute
      that Borrower's legal, valid and binding obligations enforceable against
      that Borrower in accordance with their respective terms;
    and

              


      

       

      
        	
                (b)

              	
                create
      legal, valid and binding Security Interests enforceable in accordance with
      their respective terms over all the assets to which they, by their terms,
      relate,

              


      

       

      subject to any relevant insolvency laws
affecting creditors' rights generally.

      


      
        	
                9.7

              	
                No third party Security
      Interests.  Without limiting the generality of Clause
      9.6, at the time of the execution and delivery of each Finance
      Document:

              


      

       

      
        	
                (a)

              	
                each
      Borrower will have the right to create all the Security Interests which
      that Finance Document purports to create;
and

              


      

       

      
        	
                (b)

              	
                no
      third party will have any Security Interest (except for Permitted Security
      Interests) or any other interest, right or claim over, in or in relation
      to any asset to which any such Security Interest, by its terms,
      relates.

              


      

       

      
        	
                9.8

              	
                No
      conflicts.  The execution by each Borrower of each
      Finance Document to which it is a party, and the borrowing by that
      Borrower of the Loan, and its compliance with each Finance Document to
      which it is a party will not involve or lead to a contravention
      of:

              


      

       

      
        	
                (a)

              	
                any
      law or regulation; or

              


      

       

      
        	
                (b)

              	
                the
      constitutional documents of that Borrower;
or

              


      

       

      
        	
                (c)

              	
                any
      contractual or other obligation or restriction which is binding on that
      Borrower or any of its assets.

              


      

       


      
        
           


        

        
          22

          
            

          

        

        
           


        

      


      


       

      
        	
                9.9

              	
                No withholding
      taxes.  All payments which each Borrower is liable to
      make under the Finance Documents to which it is a party may be made
      without deduction or withholding for or on account of any tax payable
      under any law of any Pertinent
Jurisdiction.

              


      

       

      
        	
                9.10

              	
                No
      default.  No Event of Default or Potential Event of
      Default has occurred and is
continuing.

              


      

       

      
        	
                9.11

              	
                Information.  All
      information which has been provided in writing by or on behalf of the
      Borrowers or any Security Party to the Lender in connection with any
      Finance Document satisfied the requirements of Clause 10.5; all audited
      and unaudited accounts which have been so provided satisfied the
      requirements of Clause 10.7; and there has been no material adverse change
      in the financial position or state of affairs of any of the Borrowers from
      that disclosed in the latest of those
accounts.

              


      

       

      
        	
                9.12

              	
                No
      litigation.  No legal or administrative action involving
      any Borrower (including action relating to any alleged or actual breach of
      the ISM Code or the ISPS Code) has been commenced or taken or, to any
      Borrower’s knowledge, is likely to be commenced or
  taken.

              


      

       

      
        	
                9.13

              	
                Validity and completeness of
      Shipbuilding Contracts/Refund
Guarantees.

              


      

       

      
        	
                (a)

              	
                The
      copies of the Shipbuilding Contracts delivered to the Lender before the
      date of this Agreement are true and complete
  copies;

              


      

       

      
        	
                (b)

              	
                each
      Shipbuilding Contract constitutes valid, binding and enforceable
      obligations of the Builder and the relevant Borrower respectively in
      accordance with its terms and each Refund Guarantee constitutes valid,
      binding and enforceable obligations of the Refund Guarantor in accordance
      with its terms; and

              


      

       

      
        	
                (c)

              	
                no
      amendments or additions to any of the Shipbuilding Contracts or any of the
      Refund Guarantees have been agreed (other than as disclosed to the Lender
      prior to the date of this Agreement) nor have the Borrowers or the Builder
      or the Refund Guarantor waived any of their respective rights under the
      Shipbuilding Contracts and Refund
Guarantees.

              


      

       

      
        	
                9.14

              	
                No rebates
      etc.  There is no agreement or understanding to allow or
      pay any rebate, premium, commission, discount or other benefit or payment
      (howsoever described) to the Borrowers, the Builder or a third party in
      connection with the purchase by each Borrower of the Ship owned by it,
      other than as disclosed to the Lender in writing on or prior to the date
      of this Agreement.

              


      

       

      
        	
                9.15

              	
                Compliance with certain
      undertakings.  At the date of this Agreement, the
      Borrowers are in compliance with Clauses 10.2, 10.4, 10.9 and
      10.13.

              


      

       

      
        	
                9.16

              	
                Taxes
      paid.  Each Borrower has paid all taxes applicable to, or
      imposed on or in relation to that Borrower, its business or the Ship owned
      by it.

              


      

       

      
        	
                9.17

              	
                ISM Code and ISPS Code
      compliance.  All requirements of the ISM Code and the
      ISPS Code as they relate to the Borrowers, the Approved Manager and the
      Ships have been complied with.

              


      

       

      
        	
                9.18

              	
                No Money
      Laundering.  Without prejudice to the generality of
      Clause 2.3, in relation to the borrowing by each of the Borrowers of the
      Loan, the performance and discharge of their respective obligations and
      liabilities under the Finance Documents, and the transactions and other
      arrangements effected or contemplated by the Finance Documents to which
      each of the Borrowers is a party, each of the Borrowers confirms that (i)
      it is acting for its own account, (ii) that it will use the proceeds of
      the Loan for its own benefit, under its full responsibility
      and

              


      

       


      
        
           


        

        
          23

          
            

          

        

        
           


        

      


      exclusively
for the purposes specified in this Agreement and (iii) that the foregoing will
not involve or lead to contravention of any law, official requirements or other
regulatory measure or procedure implemented to combat “money laundering” (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities).

       

      
        	
                10

              	
                GENERAL
      UNDERTAKINGS

              


      

       

      
        	
                10.1

              	
                General.  Each
      Borrower undertakes with the Lender to comply with the following
      provisions of this Clause 10 at all times during the Security Period
      except as the Lender may otherwise
permit.

              


      

       

      
        	
                10.2

              	
                Title; negative
      pledge.  Each Borrower
will:

              


      

       

      
        	
                (a)

              	
                hold
      the legal title to, and own the entire beneficial interest in the Ship
      owned by it, the Insurances and Earnings, free from all Security Interests
      and other interests and rights of every kind, except for those created by
      the Finance Documents and except for Permitted Security Interests;
      and

              


      

       

      
        	
                (b)

              	
                not
      create or permit to arise any Security Interest (except for Permitted
      Security Interests) over any other asset, present or
    future.

              


      

       

      
        	
                10.3

              	
                No disposal of
      assets.  No Borrower will transfer, lease or otherwise
      dispose of:

              


      

       

      
        	
                (a)

              	
                all
      or a substantial part of its assets, whether by one transaction or a
      number of transactions, whether related or not (other than, in the case of
      sale of a Ship, pursuant to the provisions of Clauses 7.7 and 7.8);
      or

              


      

       

      
        	
                (b)

              	
                any
      debt payable to it or any other right (present, future or contingent
      right) to receive a payment, including any right to damages or
      compensation, unless in the ordinary course of business or to the extent
      that the same would not have a material adverse effect on the financial
      position of such Borrower.

              


      

       

      
        	
                10.4

              	
                No other liabilities or
      obligations to be incurred.  No Borrower will incur any
      liability or obligation except (i) liabilities and obligations under the
      Shipbuilding Contract and the Finance Documents to which it is a party,
      (ii)  any funds borrowed from any shareholders of a Borrower,
      which funds shall only be borrowed with the prior written consent of the
      Lender and shall be fully subordinated on terms acceptable to the Lender
      and (iii) liabilities or obligations incurred in the ordinary course of
      its business of operating and chartering the Ship owned by
    it.

              


      

       

      
        	
                10.5

              	
                Information provided to be
      accurate.  All financial and other information which is
      provided in writing by or on behalf of a Borrower under or in connection
      with any Finance Document will be true and not misleading and will not
      omit any material fact or
consideration.

              


      

       

      
        	
                10.6

              	
                Provision of financial
      statements.  Each Borrower will send to the
      Lender:

              


      

       

      
        	
                (a)

              	
                as
      soon as possible, but in no event later than 120 days after the end of
      each financial year of each Borrower, the annual audited accounts for such
      financial year of each Borrower, duly certified by an international firm
      of accountants acceptable to the
Lender;

              


      

       

      
        	
                (b)

              	
                as
      soon as possible, but in no event later than 45 days after the end of each
      of the three-month periods during each financial year of each Borrower,
      the quarterly management accounts of each Borrower, certified as to their
      correctness by the finance director of the relevant
    Borrower;

              


      

       


      
        
           


        

        
          24

          
            

          

        

        
           


        

      


      


       

      
        	
                (c)

              	
                as
      soon as possible, but in no event later than 120 days after the end of
      each financial year of the Corporate Guarantor, the annual audited
      accounts of the Corporate Guarantor for such financial year, duly
      certified by an international firm of accountants acceptable to the
      Lender; and

              


      

       

      
        	
                (d)

              	
                as
      soon as possible, but in no event later than 45 days after the end of each
      of the three-month periods during each financial year of the Corporate
      Guarantor, the quarterly management accounts of the Corporate Guarantor,
      certified as to their correctness by the chief financial officer of the
      Corporate Guarantor.

              


      

       

      
        	
                10.7

              	
                Form of financial
      statements.  All financial statements (audited and
      unaudited) delivered under Clause 10.6
will:

              


      

       

      
        	
                (a)

              	
                be
      prepared in accordance with all applicable laws and either international
      accounting standards or generally accepted accounting principles in the
      United States of America consistently
applied;

              


      

       

      
        	
                (b)

              	
                give
      a true and fair view of the state of affairs of each of the Borrowers or
      (as the case may be) the Corporate Guarantor at the date of those accounts
      and of the profit for the period to which those accounts relate;
      and

              


      

       

      
        	
                (c)

              	
                fully
      disclose or provide for all significant liabilities of each of the
      Borrowers or (as the case may be) the Corporate
  Guarantor.

              


      

       

      
        	
                10.8

              	
                Consents.  Each
      Borrower will maintain in force and promptly obtain or renew, and will
      promptly send certified copies to the Lender of, all consents
      required:

              


      

       

      
        	
                (a)

              	
                for
      that Borrower to perform its obligations under any Finance Document or
      Shipbuilding Contract to which it is
party;

              


      

       

      
        	
                (b)

              	
                for
      the validity or enforceability of any Finance Document or Shipbuilding
      Contract to which it is party;

              


      

       

      
        	
                (c)

              	
                for
      that Borrower to continue to own and operate its
  Ship,

              


      

       

      and
the Borrowers will comply with the terms of all such consents.

      


      
        	
                10.9

              	
                Maintenance of Security
      Interests.  Each Borrower
will:

              


      

       

      
        	
                (a)

              	
                at
      its own cost, do all that it reasonably can to ensure that any Finance
      Document validly creates the obligations and the Security Interests which
      it purports to create; and

              


      

       

      
        	
                (b)

              	
                without
      limiting the generality of paragraph (a) above, at its own cost, promptly
      register, file, record or enrol any Finance Document with any court or
      authority in all Pertinent Jurisdictions, pay any stamp, registration or
      similar tax in all Pertinent Jurisdictions in respect of any Finance
      Document, give any notice or take any other step which, in the opinion of
      the Lender, is or has become necessary or desirable for any Finance
      Document to be valid, enforceable or admissible in evidence or to ensure
      or protect the priority of any Security Interest which it
      creates.

              


      

       

      
        	
                10.10

              	
                Notification of
      litigation.  Each Borrower will provide the Lender with
      details of any legal or administrative action involving that Borrower, any
      Security Party, the Approved Manager or the Ship owned by that Borrower,
      its Earnings or its Insurances as soon as such action is instituted or it
      becomes apparent to that Borrower that it is likely to be instituted,
      unless it is clear that the legal or administrative action cannot be
      considered material in the context of any Finance
  Document.

              


      

       


      
        
           


        

        
          25

          
            

          

        

        
           


        

      


       

       

      
        	
                10.11

              	
                No amendment to Shipbuilding
      Contracts.  No Borrower will agree to any material
      amendment, change of price or material supplement to the Shipbuilding
      Contract to which it is a party or any of its provisions, without the
      prior written consent of the
Lender.

              


      

       

      
        	
                10.12

              	
                Principal place of
      business.  Each Borrower will maintain its place of
      business, and keep its corporate documents and records, at the address
      stated at the commencement of this Agreement; and no Borrower will
      establish, or do anything as a result of which it would be deemed to have,
      a place of business in the United Kingdom or the United States of
      America.

              


      

       

      
        	
                10.13

              	
                Confirmation of no
      default.  Each Borrower will, within 2 Business Days
      after service by the Lender of a written request, serve on the Lender a
      notice which is signed by 2 directors of that Borrower and
      which:

              


      

       

      
        	
                (a)

              	
                states
      that no Event of Default or Potential Event of Default has occurred;
      or

              


      

       

      
        	
                (b)

              	
                states
      that no Event of Default or Potential Event of Default has occurred,
      except for a specified event or matter, of which all material details are
      given.

              


      

       

      
        	
                10.14

              	
                Notification of
      default.  Each Borrower will notify the Lender as soon as
      that Borrower becomes aware of:

              


      

       

      
        	
                (a)

              	
                the
      occurrence of an Event of Default or a Potential Event of Default;
      or

              


      

       

      
        	
                (b)

              	
                any
      matter which indicates that an Event of Default or a Potential Event of
      Default may have occurred,

              


      

       

      and will thereafter keep the Lender fully
up-to-date with all developments.

      


      
        	
                10.15

              	
                Provision of further
      information.  Each Borrower will, as soon as practicable
      after receiving the request, provide the Lender with any additional
      financial or other information
relating:

              


      

       

      
        	
                (a)

              	
                to
      that Borrower, the Ship owned by it, the Insurances or the Earnings;
      or

              


      

       

      
        	
                (b)

              	
                to
      any other matter relevant to, or to any provision of, a Finance
      Document,

              


      

       

      which
may be requested by the Lender at any time.

      


      
        	
                10.16

              	
                Translation of
      documents.  If the Lender so requires in respect of any
      of the documents referred to in this Clause 10, the Borrowers will provide
      a certified English translation prepared by a translator approved by the
      Lender.

              


      

       

      
        	
                10.17

              	
                Treasury
      Services.  No Borrower shall, and shall procure that no
      Security Party (other than the Corporate Guarantor) shall, enter into any
      treasury related contract with a bank or financial institution without
      first asking for quotes for such services or requirements from the
      Lender.

              


      

       

      
        	
                10.18

              	
                Ownership.  Each
      Borrower shall ensure that, without the prior written consent of the
      Lender, there shall be no change in the legal and beneficial ownership of
      any Borrower throughout the Security Period, and shall procure that at all
      times during the Security Period the Corporate Guarantor shall remain the
      owner of 100% of the shares in each
Borrower.

              


      

       


      
        
           


        

        
          26

          
            

          

        

        
           


        

      


      


       

      
        	
                11

              	
                CORPORATE
      UNDERTAKINGS

              


      

       

      
        	
                11.1

              	
                General.  Each
      Borrower also undertakes with the Lender to comply with the following
      provisions of this Clause 11 at all times during the Security Period
      except as the Lender may otherwise
permit.

              


      

       

      
        	
                11.2

              	
                Maintenance of
      status.  Each Borrower will maintain its separate
      corporate existence and remain in good standing under the laws of the
      Republic of the Marshall Islands.

              


      

       

      
        	
                11.3

              	
                Negative
      undertakings.  No Borrower
  will:

              


      

       

      
        	
                (a)

              	
                carry
      on any business other than the ownership, chartering and operation of the
      Ship owned by it; or

              


      

       

      
        	
                (b)

              	
                effect
      any form of redemption, purchase or return of share capital;
      or

              


      

       

      
        	
                (c)

              	
                without
      the prior written consent of the Lender, provide any form of credit or
      financial assistance or issue any guarantee to any person, or enter into
      any transaction with or involving such a person, except credit or
      financial assistance or guarantees provided to companies within the same
      beneficial or ultimate beneficial ownership as the Borrowers on an arm’s
      length basis in the normal course of
business;

              


      

       

      
        	
                (d)

              	
                without
      the prior written consent of the Lender, open or maintain any account with
      any bank or financial institution except accounts with the Lender for the
      purposes of the Finance Documents;

              


      

       

      
        	
                (e)

              	
                issue,
      allot or grant any person a right to any shares in its capital or
      repurchase or reduce its issued share
capital;

              


      

       

      
        	
                (f)

              	
                acquire
      any shares or other securities other than US or UK Treasury bills and
      certificates of deposit issued by major North American or European banks,
      or enter into any transaction in a derivative (other than to hedge the
      Borrowers’ exposure to interest rate fluctuations in the context of this
      Agreement, in accordance with a pre-agreed hedging strategy) or make any
      other capital investment;

              


      

       

      
        	
                (g)

              	
                enter
      into any form of amalgamation, merger or de-merger or any form of
      reconstruction or reorganisation or change its name;
  or

              


      

       

      
        	
                (h)

              	
                without
      the prior written consent of the Lender, incur any other Financial
      Indebtedness except indebtedness to companies within the same beneficial
      or ultimate beneficial ownership as the Borrowers on a fully subordinated
      basis.

              


      

       

      
        	
                11.4

              	
                Dividends.  For
      the avoidance of doubt, the Borrowers may pay dividends on an annual basis
      during the Security Period provided (i) all debt service has been met
      pursuant to the terms of this Agreement and (ii) no Event of Default or
      Potential Event of Default has occurred or would occur as a result of any
      such payment.

              


      

       

      
        	
                12

              	
                INSURANCE

              


      

       

      
        	
                12.1

              	
                General.  Each
      Borrower undertakes with the Lender to comply with the following
      provisions of this Clause 12 at all times during the Security Period
      (after the relevant Ship has been delivered to it under the relevant
      Shipbuilding Contract) except as the Lender may otherwise
      permit.

              


      

       


      
        
           


        

        
          27

          
            

          

        

        
           


        

      


      


       

      
        	
                12.2

              	
                Maintenance of obligatory
      insurances.  Each Borrower shall keep the Ship owned by
      it insured at the expense of that Borrower
  against:

              


      

       

      
        	
                (a)

              	
                fire
      and usual marine risks (including hull and machinery and excess
      risks);

              


      

       

      
        	
                (b)

              	
                war
      risks (including war protection and indemnity liabilities);
      and

              


      

       

      
        	
                (c)

              	
                protection
      and indemnity risks (including cover for oil pollution liability risks);
      and

              


      

       

      
        	
                (d)

              	
                any
      other risks against which the Lender considers, having regard to practices
      and other circumstances prevailing at the relevant time, it would in the
      opinion of the Lender be reasonable for that Borrower to insure and which
      are specified by the Lender by notice to that
  Borrower.

              


      

       

      
        	
                12.3

              	
                Terms of obligatory
      insurances.  Each Borrower shall effect such
      insurances:

              


      

       

      
        	
                (a)

              	
                in
      Dollars;

              


      

       

      
        	
                (b)

              	
                in
      the case of fire and usual marine risks and war risks, in an amount on an
      agreed value basis at least the greater of (i) the market value of the
      Ship owned by it and (ii) an amount which, when aggregated with the
      insured value of the other Ship at the relevant time subject to a
      Mortgage, is equal to or greater than 120% of the amount of the Loan and
      the Hedging Exposure;

              


      

       

      
        	
                (c)

              	
                in
      the case of oil pollution liability risks, for an aggregate amount equal
      to the highest level of cover from time to time available under basic
      protection and indemnity club entry (with the international group of
      protection and indemnity clubs) and the international marine insurance
      market (currently $1,000,000,000);

              


      

       

      
        	
                (d)

              	
                in
      relation to protection and indemnity risks in respect of the full value
      and tonnage of the Ship owned by
it;

              


      

       

      
        	
                (e)

              	
                on
      approved terms; and

              


      

       

      
        	
                (f)

              	
                through
      approved brokers and with approved insurance companies and/or underwriters
      or, in the case of war risks and protection and indemnity risks, in
      approved war risks and protection and indemnity risks
      associations.

              


      

       

      
        	
                12.4

              	
                Further protections for the
      Lender.  In addition to the terms set out in Clause 12.3,
      each Borrower shall procure that the obligatory insurances
      shall:

              


      

       

      
        	
                (a)

              	
                if
      the Lender so requires, name (or be amended to name) the Lender as
      additional named assured for its rights and interests, warranted no
      operational interest and with full waiver of rights of subrogation against
      the Lender, but without the Lender thereby being liable to pay (but having
      the right to pay) premiums, calls or other assessments in respect of such
      insurance;

              


      

       

      
        	
                (b)

              	
                name
      the Lender as sole loss payee with such directions for payment as the
      Lender may specify;

              


      

       

      
        	
                (c)

              	
                provide
      that all payments by or on behalf of the insurers under the obligatory
      insurances to the Lender shall be made without set-off, counterclaim or
      deductions or condition whatsoever;

              


      

       

      
        	
                (d)

              	
                provide
      that the insurers shall waive, to the fullest extent permitted by English
      law, their entitlement (if any) (whether by statute, common law, equity,
      or otherwise) to be subrogated to the rights and remedies of the Lender in
      respect of any rights or interests (secured or not) held
  by

              


      

       


      
        
           


        

        
          28

          
            

          

        

        
           


        

      


      or
available to the Lender in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the
insurers shall not be restricted by the terms of this paragraph (d) from making
personal claims against persons (other than the Borrowers or the Lender) in
circumstances where the insurers have fully discharged their liabilities and
obligations under the relevant obligatory insurances;

       

      
        	
                (e)

              	
                provide
      that such obligatory insurances shall be primary without right of
      contribution from other insurances which may be carried by the
      Lender;

              


      

       

      
        	
                (f)

              	
                provide
      that the Lender may make proof of loss if the Borrowers fail to do so;
      and

              


      

       

      
        	
                (g)

              	
                provide
      that if any obligatory insurance is cancelled, or if any substantial
      change is made in the coverage which adversely affects the interest of the
      Lender, or if any obligatory insurance is allowed to lapse for non-payment
      of premium, such cancellation, charge or lapse shall not be effective with
      respect to the Lender for 30 days (or 7 days in the case of war risks)
      after receipt by the Lender of prior written notice from the insurers of
      such cancellation, change or lapse.

              


      

       

      
        	
                12.5

              	
                Renewal of obligatory
      insurances.  Each Borrower
  shall:

              


      

       

      
        	
                (a)

              	
                at
      least 21 days before the expiry of any obligatory
    insurance:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                notify
      the Lender of the brokers (or other insurers) and any protection and
      indemnity or war risks association through or with whom that Borrower
      proposes to renew that insurance and of the proposed terms of renewal;
      and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in
      case of any substantial change in insurance cover, obtain the Lender’s
      approval to the matters referred to in paragraph (i)
  above;

              


      

       

      
        	
                (b)

              	
                at
      least 14 days before the expiry of any obligatory insurance, renew the
      insurance; and

              


      

       

      
        	
                (c)

              	
                procure
      that the approved brokers and/or the war risks and protection and
      indemnity associations with which such a renewal is effected shall
      promptly after the renewal notify the Lender in writing of the terms and
      conditions of the renewal.

              


      

       

      
        	
                12.6

              	
                Copies of policies; letters of
      undertaking.  Each Borrower shall ensure that all
      approved brokers provide the Lender with copies of all policies relating
      to the obligatory insurances which they effect or renew and of a letter or
      letters or undertaking in a form required by the Lender and including
      undertakings by the approved brokers
that:

              


      

       

      
        	
                (a)

              	
                they
      will have endorsed on each policy, immediately upon issue, a loss payable
      clause and a notice of assignment complying with the provisions of Clause
      12.4;

              


      

       

      
        	
                (b)

              	
                they
      will hold such policies, and the benefit of such insurances, to the order
      of the Lender in accordance with the said loss payable
    clause;

              


      

       

      
        	
                (c)

              	
                they
      will advise the Lender immediately of any material change to the terms of
      the obligatory insurances;

              


      

       

      
        	
                (d)

              	
                they
      will notify the Lender, not less than 14 days before the expiry of the
      obligatory insurances, in the event of their not having received notice of
      renewal instructions from that Borrower or its agents and, in the event of
      their receiving instructions to renew, they will promptly notify the
      Lender of the terms of the instructions;
and

              


      

       


      
        
           


        

        
          29

          
            

          

        

        
           


        

      


      


       

      
        	
                (e)

              	
                they
      will not set off against any sum recoverable in respect of a claim
      relating to the Ship owned by that Borrower under such obligatory
      insurances any premiums or other amounts due to them or any other person
      whether in respect of that Ship or otherwise, they waive any lien on the
      policies or, any sums received under them, which they might have in
      respect of such premiums or other amounts, and they will not cancel such
      obligatory insurances by reason of non-payment of such premiums or other
      amounts, and will arrange for a separate policy to be issued in respect of
      that Ship forthwith upon being so requested by the
  Lender.

              


      

       

      
        	
                12.7

              	
                Copies of certificates of
      entry.  Each Borrower shall ensure that any protection
      and indemnity and/or war risks associations in which the Ship owned by it
      is entered provides the Lender
with:

              


      

       

      
        	
                (a)

              	
                a
      certified copy of the certificate of entry for that
  Ship;

              


      

       

      
        	
                (b)

              	
                a
      letter or letters of undertaking in such form as may be required by the
      Lender;

              


      

       

      
        	
                (c)

              	
                where
      required to be issued under the terms of insurance/indemnity provided by
      the Ship’s protection and indemnity association, a certified copy of each
      United States of America voyage quarterly declaration (or other similar
      document or documents) made by that Borrower in relation to it’s Ship in
      accordance with the requirements of such protection and indemnity
      association; and

              


      

       

      
        	
                (d)

              	
                a
      certified copy of each certificate of financial responsibility for
      pollution by oil or other Environmentally Sensitive Material issued by the
      relevant certifying authority in relation to that
  Ship.

              


      

       

      
        	
                12.8

              	
                Deposit of original
      policies.  Each Borrower shall ensure that all policies
      relating to obligatory insurances are deposited with the approved brokers
      through which the insurances are effected or
  renewed.

              


      

       

      
        	
                12.9

              	
                Payment of
      premiums.  Each Borrower shall punctually pay all
      premiums or other sums payable in respect of the obligatory insurances and
      produce all relevant receipts when so required by the
    Lender.

              


      

       

      
        	
                12.10

              	
                Guarantees.  Each
      Borrower shall ensure that any guarantees required by a protection and
      indemnity or war risks association are promptly issued and remain in full
      force and effect.

              


      

       

      
        	
                12.11

              	
                Restrictions on
      employment.  No Borrower shall employ the Ship owned by
      it, nor permit her to be employed, outside the cover provided by any
      obligatory insurances.

              


      

       

      
        	
                12.12

              	
                Compliance with terms of
      insurances.  No Borrower shall do or omit to do (or
      permit to be done or not to be done) any act or thing which would or might
      render any obligatory insurance invalid, void, voidable or unenforceable
      or render any sum payable thereunder repayable in whole or in part; and,
      in particular:

              


      

       

      
        	
                (a)

              	
                each
      Borrower shall take all necessary action and comply with all requirements
      which may from time to time be applicable to the obligatory insurances,
      and (without limiting the obligation contained in Clause 12.7(c) above)
      ensure that the obligatory insurances are not made subject to any
      exclusions or qualifications to which the Lender has not given its prior
      approval;

              


      

       

      
        	
                (b)

              	
                no
      Borrower shall make any changes relating to the classification or
      classification society or manager or operator of the Ship owned by it
      approved by the underwriters of the obligatory
  insurances;

              


      

       


      
        
           


        

        
          30

          
            

          

        

        
           


        

      


      


       

      
        	
                (c)

              	
                each
      Borrower shall make all quarterly or other voyage declarations which may
      be required by the protection and indemnity risks association in which the
      Ship owned by it is entered to maintain cover for trading to the United
      States of America and Exclusive Economic Zone (as defined in the United
      States Oil Pollution Act 1990 or any other applicable legislation);
      and

              


      

       

      
        	
                (d)

              	
                no
      Borrower shall employ the Ship owned by it, nor allow it to be employed,
      otherwise than in conformity with the terms and conditions of the
      obligatory insurances, without first obtaining the consent of the insurers
      and complying with any requirements (as to extra premium or otherwise)
      which the insurers specify.

              


      

       

      
        	
                12.13

              	
                Alteration to terms of
      insurances.  No Borrower shall either make or agree to
      any alteration to the terms of any obligatory insurance or waive any right
      relating to any obligatory insurance without the prior written consent of
      the Lender.

              


      

       

      
        	
                12.14

              	
                Settlement of
      claims.  No Borrower shall settle, compromise or abandon
      any claim under any obligatory insurance for Total Loss or for a Major
      Casualty, and shall do all things necessary and provide all documents,
      evidence and information to enable the Lender to collect or recover any
      moneys which at any time become payable in respect of the obligatory
      insurances.

              


      

       

      
        	
                12.15

              	
                Provision of copies of
      communications.  Each Borrower shall provide the Lender,
      at the time of each such communication, copies of all written
      communications between that Borrower
and:

              


      

       

      
        	
                (a)

              	
                the
      approved brokers; and

              


      

       

      
        	
                (b)

              	
                the
      approved protection and indemnity and/or war risks associations;
      and

              


      

       

      
        	
                (c)

              	
                the
      approved insurance companies and/or underwriters, which relate directly or
      indirectly to:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                that
      Borrower's obligations relating to the obligatory insurances including,
      without limitation, all requisite declarations and payments of additional
      premiums or calls; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      credit arrangements made between that Borrower and any of the persons
      referred to in paragraphs (a) or (b) above relating wholly or partly to
      the effecting or maintenance of the obligatory
  insurances.

              


      

       

      
        	
                12.16

              	
                Provision of
      information.  In addition, each Borrower shall promptly
      provide the Lender (or any persons which it may designate) with any
      information which the Lender (or any such designated person) requests for
      the purpose of:

              


      

       

      
        	
                (a)

              	
                obtaining
      or preparing any report from an independent marine insurance broker as to
      the adequacy of the obligatory insurances effected or proposed to be
      effected; and/or

              


      

       

      
        	
                (b)

              	
                effecting,
      maintaining or renewing any such insurances as are referred to in Clause
      12.17 below or dealing with or considering any matters relating to any
      such insurances,

              


      

       

      
        	
                 
      

              	
                and
      the Borrowers shall, forthwith upon demand, indemnify the Lender in
      respect of all fees and other expenses incurred by or for the account of
      the Lender in
      connection with any such report as is referred to in paragraph (a)
      above.

              


      

      


      
        	
                12.17

              	
                Mortgagees’ interest,
      additional perils.  The Lender shall be entitled from
      time to time to effect, maintain and renew a mortgagee’s interest
      additional perils insurance and a mortgagees’ interest marine insurance in
      an amount equal to not less than 120% of the amount of the Loan
      and

              


      

       


      
        
           


        

        
          31

          
            

          

        

        
           


        

      


      the
Hedging Exposure and otherwise on such terms, through such insurers and
generally in such manner as the Lender may from time to time consider
appropriate and the Borrowers shall upon demand fully indemnify the Lender in
respect of all premiums and other expenses which are incurred in connection with
or with a view to effecting, maintaining or renewing any such insurance or
dealing with, or considering, any matter arising out of any such
insurance.

       

      
        	
                12.18

              	
                Review of insurance
      requirements.  The Lender shall be entitled to review the
      requirements of this Clause 12 from time to time in order to take account
      of any changes in circumstances after the date of this Agreement which
      are, in the opinion of the Lender, significant and capable of affecting
      any Borrower or any Ship and its or their insurance (including, without
      limitation, changes in the availability or the cost of insurance coverage
      or the risks to which the Borrowers may be subject), and may appoint
      insurance consultants in relation to this review at the cost of the
      Borrowers.

              


      

       

      
        	
                12.19

              	
                Modification of insurance
      requirements.  The Lender shall notify the Borrowers of
      any proposed modification under Clause 12.18 to the requirements of this
      Clause 12 which the Lender considers appropriate in the circumstances, and
      such modification shall take effect on and from the date it is notified in
      writing to the Borrowers as an amendment to this Clause 12 and shall bind
      the Borrowers accordingly.

              


      

       

      
        	
                12.20

              	
                Compliance with
      instructions.  The Lender shall be entitled (without
      prejudice to or limitation of any other rights which it may have or
      acquire under any Finance Document) to require a Ship to remain at any
      safe port or to proceed to and remain at any safe port designated by the
      Lender until the Borrowers implement any amendments to the terms of the
      obligatory insurances and any operational changes required as a result of
      a notice served under Clause 12.19.

              


      

       

      
        	
                13

              	
                SHIP
      COVENANTS

              


      

       

      
        	
                13.1

              	
                General.  Each
      Borrower also undertakes with the Lender to comply with the following
      provisions of this Clause 13 at all times during the Security Period
      (after the Ship has been delivered to it under the relevant Shipbuilding
      Contract) except as the Lender may otherwise
  permit.

              


      

       

      
        	
                13.2

              	
                Ship's name and
      registration.  Each Borrower shall keep the Ship owned by
      it registered in its name under the Approved Flag; shall not do or allow
      to be done anything as a result of which such registration might be
      cancelled or imperilled; and shall not change the name or port of registry
      of that Ship without the prior written consent of the
    Lender.

              


      

       

      
        	
                13.3

              	
                Repair and
      classification.  Each Borrower shall keep the Ship owned
      by it in a good and safe condition and state of
  repair:

              


      

       

      
        	
                (a)

              	
                consistent
      with first-class ship ownership and management
  practice;

              


      

       

      
        	
                (b)

              	
                so
      as to maintain such Ship with the highest classification available for
      vessels of the same age, type and specification as such Ship with Lloyd’s
      Register of Shipping (or such other first class classification society as
      may be approved by the Lender), free of outstanding recommendations and
      conditions affecting such Ship’s class;
and

              


      

       

      
        	
                (c)

              	
                so
      as to comply with all laws and regulations applicable to vessels
      registered at ports in the Approved Flag State or to vessels trading to
      any jurisdiction to which that Ship may trade from time to time, including
      but not limited to the ISM Code and the ISPS
  Code.

              


      

       


      
        
           


        

        
          32

          
            

          

        

        
           


        

      


      


       

      
        	
                13.4

              	
                Modification.  No
      Borrower shall make any modification or repairs to, or replacement of, any
      Ship or equipment installed on her which would or might materially alter
      the structure, type or performance characteristics of that Ship or
      materially reduce her value.

              


      

       

      
        	
                13.5

              	
                Removal of
      parts.  No Borrower shall remove any material part of any
      Ship, or any item of equipment installed on, any Ship unless the part or
      item so removed is forthwith replaced by a suitable part or item which is
      in the same condition as or better condition than the part or item
      removed, is free from any Security Interest or any right in favour of any
      person other than the Lender and becomes on installation on the relevant
      Ship the property of the relevant Borrower and subject to the security
      constituted by the relevant Mortgage Provided that a Borrower
      may install equipment owned by a third party if the equipment can be
      removed without any risk of damage to the Ship owned by
  it.

              


      

       

      
        	
                13.6

              	
                Surveys.  Each
      Borrower shall submit the Ship owned by it regularly to all periodical or
      other surveys which may be required for classification purposes and, if so
      required by the Lender, provide the Lender with copies of all survey
      reports.

              


      

       

      
        	
                13.7

              	
                Inspection.  Each
      Borrower shall permit the Lender (by surveyors or other persons appointed
      by it for that purpose) to board the Ship owned by it at all reasonable
      times to inspect her condition or to satisfy themselves about proposed or
      executed repairs and shall afford all proper facilities for such
      inspections.  Provided that the relevant Ship is found to be in
      satisfactory condition, the cost of such inspections shall be borne by the
      Borrowers not more than once per Ship per
year.

              


      

       

      
        	
                13.8

              	
                Prevention of and release from
      arrest.  Each Borrower shall promptly
      discharge:

              


      

       

      
        	
                (a)

              	
                all
      liabilities which give or may give rise to maritime or possessory liens on
      or claims enforceable against the Ship owned by it, the Earnings or the
      Insurances;

              


      

       

      
        	
                (b)

              	
                all
      taxes, dues and other amounts charged in respect of the Ship owned by it,
      the Earnings or the Insurances; and

              


      

       

      
        	
                (c)

              	
                all
      other outgoings whatsoever in respect of the Ship owned by it, the
      Earnings or the Insurances,

              


      

       

      
        	
                 
      

              	
                and,
      forthwith upon receiving notice of the arrest of the Ship owned by it, or
      of her detention in exercise or purported exercise of any lien or claim,
      that Borrower shall procure her release by providing bail or otherwise as
      the circumstances may require.

              


      

      


      
        	
                13.9

              	
                Compliance with laws
      etc.  Each Borrower
shall:

              


      

       

      
        	
                (a)

              	
                comply,
      or procure compliance with the ISM Code, the ISPS Code, all Environmental
      Laws and all other laws or regulations relating to the Ship owned by it,
      its ownership, operation and management or to the business of that
      Borrower (including, without limitation, the obtaining of all relevant
      certificates of financial responsibility and any other matters required
      for entering United States territorial waters or calling at any United
      States Port);

              


      

       

      
        	
                (b)

              	
                not
      employ the Ship owned by it nor allow her employment in any manner
      contrary to any law or regulation in any relevant jurisdiction including
      but not limited to the ISM Code and the ISPS Code;
  and

              


      

       

      
        	
                (c)

              	
                in
      the event of hostilities in any part of the world (whether war is declared
      or not), not cause or permit the Ship owned by it to enter or trade to any
      zone which is declared a war zone by any government or by the Ship's war
      risks insurers unless the prior written consent of the Lender
      has

              


      

       


      
        
           


        

        
          33

          
            

          

        

        
           


        

      


      been
given and that Borrower has (at its expense) effected any special, additional or
modified insurance cover which the Lender may require.

       

      
        	
                13.10

              	
                Provision of
      information.  Each Borrower shall promptly provide the
      Lender with any information which the Lender requests
      regarding:

              


      

       

      
        	
                (a)

              	
                the
      Ship owned by it, her employment, position and
  engagements;

              


      

       

      
        	
                (b)

              	
                the
      Earnings and payments and amounts due to the master and crew of the Ship
      owned by it;

              


      

       

      
        	
                (c)

              	
                any
      expenses incurred, or likely to be incurred, in connection with the
      operation, maintenance or repair of the Ship owned by it and any payments
      made in respect of that Ship;

              


      

       

      
        	
                (d)

              	
                any
      towages and salvages;

              


      

       

      
        	
                (e)

              	
                its
      compliance, the Approved Manager’s compliance or the compliance of the
      Ship owned by that Borrower with the ISM
Code

              


      

       

      
        	
                 
      

              	
                and,
      upon the Lender's request, provide copies of any current charter relating
      to the Ship owned by it and of any current charter guarantee, and copies
      of the ISM Code and ISPS Code
documentation.

              


      

      


      
        	
                13.11

              	
                Notification of certain
      events.  Each Borrower shall immediately notify the
      Lender by letter of:

              


      

       

      
        	
                (a)

              	
                any
      casualty which is or is likely to be or to become a Major
      Casualty;

              


      

       

      
        	
                (b)

              	
                any
      occurrence as a result of which the Ship owned by it has become or is, by
      the passing of time or otherwise, likely to become a Total
      Loss;

              


      

       

      
        	
                (c)

              	
                any
      requirement or recommendation made by any insurer or classification
      society or by any competent authority which is not immediately complied
      with;

              


      

       

      
        	
                (d)

              	
                any
      arrest or detention of the Ship owned by it, any exercise or purported
      exercise of any lien on that Ship or her Earnings or any requisition of
      that Ship for hire;

              


      

       

      
        	
                (e)

              	
                any
      intended dry docking of the Ship owned by
it;

              


      

       

      
        	
                (f)

              	
                any
      Environmental Claim made against that Borrower or in connection with the
      Ship owned by it, or any Environmental
Incident;

              


      

       

      
        	
                (g)

              	
                any
      claim for breach of the ISM Code or the ISPS Code being made against that
      Borrower, the Approved Manager or otherwise in connection with the Ship
      owned by it; or

              


      

       

      
        	
                (h)

              	
                any
      other matter, event or incident, actual or threatened, the effect of which
      will or could lead to the ISM Code or the ISPS Code not being complied
      with,

              


      

       

      
        	
                 
      

              	
                and
      that Borrower shall keep the Lender advised in writing on a regular basis
      and in such detail as the Lender shall require of that Borrower's, the
      Approved Manager’s or any other person's response to any of those events
      or matters.

              


      

      


      
        	
                13.12

              	
                Restrictions on chartering,
      appointment of managers, etc.  No Borrower shall without
      the prior written consent of the Lender (such consent not to be
      unreasonably withheld):

              


      

       

      
        	
                (a)

              	
                let
      the Ship owned by it on demise charter for any
  period;

              


      

       


      
        
           


        

        
          34

          
            

          

        

        
           


        

      


      


       

      
        	
                (b)

              	
                enter
      into any time or consecutive voyage charter in respect of the Ship owned
      by it for a term which exceeds, or which by virtue of any optional
      extensions may exceed, 13 months;

              


      

       

      
        	
                (c)

              	
                enter
      into any charter in relation to the Ship owned by it under which more than
      2 months' hire (or the equivalent) is payable in
  advance;

              


      

       

      
        	
                (d)

              	
                charter
      the Ship owned by it otherwise than on bona fide arm's length terms at the
      time when the Ship is fixed;

              


      

       

      
        	
                (e)

              	
                appoint
      a manager of the Ship owned by it other than the Approved Manager or agree
      to any alteration to the terms of the Approved Manager's
      appointment;

              


      

       

      
        	
                (f)

              	
                de-activate
      or lay up the Ship owned by it;

              


      

       

      
        	
                (g)

              	
                put
      the Ship owned by it into the possession of any person for the purpose of
      work being done upon her in an amount exceeding or likely to exceed the
      Majority Casualty amount unless that person has first given to the Lender
      and in terms satisfactory to it a written undertaking not to exercise any
      lien on that Ship or her Earnings for the cost of such work or otherwise;
      or

              


      

       

      
        	
                (h)

              	
                change
      the flag on which its Ship is registered or the classification society
      with which its Ship is classed.

              


      

       

      
        	
                13.13

              	
                Notice of
      Mortgage.  Each Borrower shall keep the Mortgage
      registered against the Ship owned by it as a valid first priority
      mortgage, carry on board that Ship a certified copy of the relevant
      Mortgage and place and maintain in a conspicuous place in the navigation
      room and the Master's cabin of that Ship a framed printed notice stating
      that that Ship is mortgaged by that Borrower to the
  Lender.

              


      

       

      
        	
                13.14

              	
                Sharing of
      Earnings.   No Borrower shall enter into any
      agreement or arrangement for the sharing of any Earnings, other than
      pursuant to time charters notified to and agreed by the Lender in writing
      prior to entering into the same.

              


      

       

      
        	
                13.15

              	
                Ownership.  Each
      of the Borrowers shall procure that there shall be no change in the legal
      or beneficial ownership of the shares in any of the Borrowers throughout
      the Security Period.

              


      

       

      
        	
                13.16

              	
                Approved
      Manager.  If, in the opinion of the Lender, the Approved
      Manager’s performance level falls below that expected of a prudent ship
      manager (for example, without limiting the generality of the foregoing,
      due to excessive off-hire periods in respect of a Ship), then the
      Borrowers undertake to replace such Approved Manager (forthwith upon being
      requested to do so by the Lender) with such other company as shall be
      acceptable to the Lender in its sole
discretion.

              


      

       

      
        	
                13.17

              	
                ISPS
      Code.  Each of the Borrowers shall comply with the ISPS
      Code and in particular, without limitation,
  shall:

              


      

       

      
        	
                (a)

              	
                procure
      that the Ship owned by it and the company responsible for such Ship’s
      compliance with the ISPS Code, comply with the ISPS Code;
    and

              


      

       

      
        	
                (b)

              	
                maintain
      for each Ship an ISSC; and

              


      

       

      
        	
                (c)

              	
                notify
      the Lender immediately in writing of any actual or threatened withdrawal,
      suspension, cancellation or modification of the
  ISSC.

              


      

       


      
        
           


        

        
          35

          
            

          

        

        
           


        

      


      


       

      
        	
                13.18

              	
                Time Charter
      Assignment.  If any Borrower enters into any time charter
      in respect of its Ship which is of twelve (12) months or more in duration,
      or is capable of exceeding twelve (12) months in duration, the relevant
      Borrower shall, at the request of the Lender, execute in favour of the
      Lender an assignment and notice of assignment (and shall use its best
      endeavours to obtain acknowledgement of the same by the relevant
      charterer) of such time charter in such form and on such terms as the
      Lender may require, and shall deliver to the Lender such other documents
      equivalent to those referred to at paragraphs 3, 4 and 5 of Part A of
      Schedule 2 hereof as the Lender may
require.

              


      

       

      
        	
                13.19

              	
                No freight derivatives.
      No Borrower shall enter into or agree to enter into without the
      consent of the Lender any freight derivatives or any other instruments
      which have the effect of hedging forward exposure to freight
      derivatives.

              


      

       

      
        	
                13.20

              	
                General and administrative
      costs.  Each Borrower shall procure that (and, if
      required, shall provide evidence to demonstrate that) all general and
      administrative costs incurred in the ownership and operation of each Ship
      are subordinated in full to the debt service obligations of the Borrowers
      under this Agreement, to the extent permitted under applicable
      laws.

              


      

       

      
        	
                14

              	
                SECURITY
      COVER

              


      

       

      
        	
                14.1

              	
                Provision of additional
      security cover; prepayment of Loan.  Each Borrower
      undertakes with the Lender that, if (after the Delivery Date of the second
      Ship under the relevant Shipbuilding Contract) the Lender notifies the
      Borrowers that:

              


      

       

      
        	
                (a)

              	
                the
      aggregate Fair Market Value (determined as provided below) of the Ships
      subject to a Mortgage; plus

              


      

       

      
        	
                (b)

              	
                the
      net realisable value of any additional security previously provided under
      this Clause 14;

              


      

       

      
        	
                 
      

              	
                is
      below one hundred and twenty five per cent. (125%) of the amount of the
      Loan and the Hedging Exposure, the Borrowers will, within 1 month after
      the date on which the Lender's notice is served,
  either:

              


      

      


      
        	
                 
      

              	
                (i)

              	
                provide,
      or ensure that a third party provides, additional security which, in the
      opinion of the Lender, has a net realisable value at least equal to the
      shortfall and which consists of either (a) cash pledged to the Lender or
      (b) a Security Interest (including, but not limited to, a first priority
      mortgage over another vessel), covering such asset or assets and
      documented in such terms as the Lender may approve or require;
      or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                prepay
      in accordance with Clause 7 such part (at least) of the Loan as will
      eliminate the shortfall.

              


      

       

      
        	
                14.2

              	
                Meaning of additional
      security.  In Clause 14.1 “security” means a
      Security Interest over an asset or assets (whether securing the Borrowers’
      liabilities under the Finance Documents or a guarantee in respect of those
      liabilities), or a guarantee, letter of credit or other security in
      respect of the Borrowers’ liabilities under the Finance
      Documents.

              


      

       

      
        	
                14.3

              	
                Requirement for additional
      documents.  The Borrowers shall not be deemed to have
      complied with Clause 14.1(b)(i) above until the Lender has received in
      connection with the additional security certified copies of documents of
      the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 2 Part A and
      such legal opinions in terms acceptable to the Lender from such lawyers as
      it may select.

              


      

       


      
        
           


        

        
          36

          
            

          

        

        
           


        

      


      


       

      
        	
                14.4

              	
                Valuation of
      Ships.  The Fair Market Value of a Ship shall be
      obtained:

              


      

       

      
        	
                (a)

              	
                in
      Dollars;

              


      

       

      
        	
                (b)

              	
                with
      or without physical inspection of the relevant Ship (as the Lender may
      require);

              


      

       

      
        	
                (c)

              	
                by
      taking the average of two written valuations prepared by two reputable
      sale and purchase ship brokers appointed by the
  Lender;

              


      

       

      
        	
                (d)

              	
                showing
      the value of the relevant Ship as at the date of, or at a date no earlier
      than 10 days prior to, such
valuations;

              


      

       

      
        	
                (e)

              	
                on
      the basis of a sale for prompt delivery for cash on normal arm’s length
      commercial terms as between a willing seller and a willing buyer, free of
      any existing charter or other contract of employment;
  and

              


      

       

      
        	
                (f)

              	
                after
      deducting the estimated amount of the usual and reasonable expenses which
      would be incurred in connection with the
sale.

              


      

       

      
        	
                14.5

              	
                Value of additional vessel
      security.  The net realisable value of any additional
      security which is provided under Clause 14.2 and which consists of a
      Security Interest over a vessel shall be that shown either by way of a
      valuation complying with the requirements of Clause 14.3 or by a valuation
      from an independent sale and purchase shipbroker approved or appointed by
      the Lender (and on the basis of a sale for prompt delivery for cash on
      normal arm’s length commercial terms as between a willing seller and
      willing buyer, free of charter or other contract of
      employment).

              


      

       

      
        	
                14.6

              	
                Valuations
      binding.  Any valuation under Clause 14.1(b)(i), 14.4 or
      14.5 shall be binding and conclusive as regards the Borrowers, as shall be
      any valuation which the Lender makes of a security which does not consist
      of or include a Security Interest.

              


      

       

      
        	
                14.7

              	
                Provision of
      information.  The Borrowers shall promptly provide the
      Lender and any shipbroker or expert acting under Clause 14.4 or 14.5 with
      any information which the Lender or the shipbroker or expert may request
      for the purposes of the valuation; and, if the Borrowers fail to provide
      the information by the date specified in the request, the valuation may be
      made on any basis and assumptions which the shipbroker or the Lender (or
      the expert appointed by it) considers
prudent.

              


      

       

      
        	
                14.8

              	
                Payment of valuation
      expenses.  Without prejudice to the generality of the
      Borrowers’ obligations under Clauses 19.2, 19.3 and 20.3, the Borrowers
      shall, on demand, pay the Lender the amount of the fees and expenses of
      any shipbroker or expert instructed by the Lender under this Clause and
      all legal and other expenses incurred by the Lender in connection with any
      matter arising out of this Clause.

              


      

       

      
        	
                14.9

              	
                Frequency of
      valuations.  The Lender shall be entitled to obtain a
      valuation of each Ship at any time during the Security Period, provided
      that the costs and expenses of such shall only be borne by the Borrowers
      twice per year per Ship (in the absence of the occurrence of an Event of
      Default).

              


      

       


      
        
           


        

        
          37

          
            

          

        

        
           


        

      


      


       

      
        	
                15

              	
                PAYMENTS
      AND CALCULATIONS

              


      

       

      
        	
                15.1

              	
                Currency and method of
      payments.  All payments to be made by the Borrowers to
      the Lender under a Finance Document shall be
  made:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                by
      not later than 11.00 a.m. (London time) on the due
  date;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in
      same day Dollar funds settled through the New York Clearing House
      Interbank Payments System (or in such other Dollar funds and/or settled in
      such other manner as the Lender shall specify as being customary at the
      time for the settlement of international transactions of the type
      contemplated by this Agreement);
and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                to
      such account as the Lender may from time to time notify to the
      Borrowers.

              


      

       

      
        	
                15.2

              	
                Payment on non-Business
      Day.  If any payment by any Borrower under a Finance
      Document would otherwise fall due on a day which is not a Business
      Day:

              


      

       

      
        	
                (a)

              	
                the
      due date shall be extended to the next succeeding Business Day;
      or

              


      

       

      
        	
                (b)

              	
                if
      the next succeeding Business Day falls in the next calendar month, the due
      date shall be brought forward to the immediately preceding Business
      Day

              


      

       

      and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original due date.

      


      
        	
                15.3

              	
                Basis for calculation of
      periodic payments.  All interest and commitment fee and
      any other payments under any Finance Document which are of an annual or
      periodic nature shall accrue from day to day and shall be calculated on
      the basis of the actual number of days elapsed and a 360 day
      year.

              


      

       

      
        	
                15.4

              	
                Lender
      accounts.  The Lender shall maintain accounts showing the
      amounts owing to it by the Borrowers and each Security Party under the
      Finance Documents and all payments in respect of those amounts made by the
      Borrowers and any Security Party.

              


      

       

      
        	
                15.5

              	
                Accounts prima facie
      evidence.  If any accounts maintained under Clause 15.4
      show an amount to be owing by the Borrowers or a Security Party to the
      Lender, those accounts shall be prima facie evidence that that amount is
      owing to the Lender.

              


      

       

      
        	
                16

              	
                APPLICATION
      OF RECEIPTS

              


      

       

      
        	
                16.1

              	
                Normal order of
      application.  Except as any Finance Document may
      otherwise provide, any sums which are received or recovered by the Lender
      under or by virtue of any Finance Document shall be
    applied:-

              


      

       

      
        	
                (a)

              	
                FIRST:
      in or towards satisfaction of any amounts then due and payable under the
      Finance Documents in the following order and
  proportions:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                first,
      in or towards satisfaction pro rata of all amounts then due and payable to
      the Lender under the Finance Documents other than those amounts referred
      to at paragraphs (ii), (iii) and (iv) (including, but without limitation,
      all amounts payable by the Borrowers
under

              


      

       


      
        
           


        

        
          38

          
            

          

        

        
           


        

      


      Clauses
19, 20 and 21 of this Agreement or by the Borrowers or any Security Party under
any corresponding or similar provision in any other Finance
Document);

       

      
        	
                 
      

              	
                (ii)

              	
                secondly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Lender under the Finance
      Documents;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                thirdly,
      in or towards satisfaction pro rata of the Loan;
  and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                fourthly,
      in payment to the Lender of amounts then due and payable in respect of any
      Designated Transactions;

              


      

       

      
        	
                (b)

              	
                SECONDLY:
      in retention of an amount equal to any amount not then due and payable
      under any Finance Document but which the Lender, by notice to the
      Borrowers and the Security Parties, states in its opinion will or may
      become due and payable in the future and, upon those amounts becoming due
      and payable, in or towards satisfaction of them in accordance with the
      provisions of Clause 16.1(a); and

              


      

       

      
        	
                (c)

              	
                THIRDLY:
      any surplus shall be paid to the Borrowers or to any other person
      appearing to be entitled to it.

              


      

       

      
        	
                16.2

              	
                Variation of order of
      application. The Lender may by notice to the Borrowers and the
      Security Parties provide for a different manner of application from that
      set out in Clause 16.1 either as regards a specified sum or sums or as
      regards sums in a specified category or
  categories.

              


      

       

      
        	
                16.3

              	
                Notice of variation of order of
      application.  The Lender may give notices under Clause
      16.2 from time to time; and such a notice may be stated to apply not only
      to sums which may be received or recovered in the future, but also to any
      sum which has been received or recovered on or after the third Business
      Day before the date on which the notice is
  served.

              


      

       

      
        	
                16.4

              	
                Appropriation rights
      overriden.  This Clause 16 and any notice which the
      Lender gives under Clause 16.2 shall override any right of appropriation
      possessed, and any appropriation made, by any Borrower or any Security
      Party.

              


      

       

      
        	
                17

              	
                APPLICATION
      OF EARNINGS

              


      

       

      
        	
                17.1

              	
                Payment and application of
      Earnings.  Each Borrower undertakes with the Lender to
      ensure that, throughout the Security Period subject only to the provisions
      of the relevant General Assignment, all the Earnings of the Ship owned by
      it are paid to the Earnings Account relating to that
  Ship.

              


      

       

      
        	
                17.2

              	
                Monthly
      retentions.  Each Borrower undertakes with the Lender to
      ensure that, throughout the Security Period commencing on the date falling
      one month after the Drawdown Date of the Delivery Advance for the first
      Ship to be delivered and on the same day in each subsequent month, there
      is transferred to the Retention Account out of the Earnings received in
      the Earnings Accounts during the preceding calendar
  month:

              


      

       

      
        	
                (a)

              	
                one-third
      of the aggregate amount of the repayment instalments falling due under
      Clause 7.1 on the next Repayment Date;
and

              


      

       

      
        	
                (b)

              	
                the
      relevant fraction of the amount of interest accruing on the Loan which is
      payable on the next due date for payment of interest under this Agreement
      (increased or reduced to the extent necessary to take account of all
      Designated Transactions then
operative).

              


      

       


      
        
           


        

        
          39

          
            

          

        

        
           


        

      


      


       

      The
“relevant fraction” is a
fraction of which the numerator is one and the denominator the number of months
comprised in the then current Interest Period (or, if the period is shorter, the
number of months from the later of the commencement of the current Interest
Period or the last due date for payment of interest to the next date for payment
of interest under this Agreement).

       

      
        	
                17.3

              	
                Shortfall in
      Earnings.  If the aggregate Earnings received in the
      Earnings Accounts are insufficient at any time for the required amount to
      be transferred to the Retention Account under Clause 17.2, the Borrowers
      shall make up the amount of the insufficiency on demand from the Lender;
      but, without thereby prejudicing the Lender's right to make such demand at
      any time, the Lender may, if so authorised by the Lender, permit the
      Borrowers to make up all or part of the insufficiency by increasing the
      amount of any transfer under Clause 17.2 from the Earnings received in the
      next or subsequent months.

              


      

       

      
        	
                17.4

              	
                Application of
      retentions.  Until an Event of Default or a Potential
      Event of Default occurs, the Lender shall on each Repayment Date and on
      each due date for the payment of interest under this Agreement apply in
      accordance with Clause 15.1 so much of the then balance on the Retention
      Account as equals:

              


      

       

      
        	
                (a)

              	
                the
      repayment instalment due on that Repayment Date;
  or

              


      

       

      
        	
                (b)

              	
                the
      amount of interest payable on that interest payment
  date,

              


      

       

      in
discharge of the Borrowers’ liability for that repayment instalment or that
interest.

       

      
        	
                17.5

              	
                Interest accrued on Retention
      Account.  Any credit balance on the Retention Account
      shall bear interest at the rate from time to time offered by the Lender to
      its customers for Dollar deposits of similar amounts and for periods
      similar to those for which such balances appear to the Lender likely to
      remain on the Retention Account.

              


      

       

      
        	
                17.6

              	
                Release of accrued
      interest.  Interest accruing under Clause 17.5 on the
      Retention Account shall be released to the Borrowers on each Repayment
      Date unless an Event of Default has occurred or the then credit balance on
      the Retention Account is less than what would have been the balance had
      the full amount required by Clause 17.2 (and Clause 17.3, if applicable)
      been transferred in that and each previous
  month.

              


      

       

      
        	
                17.7

              	
                Location of
      accounts.  Each Borrower shall
  promptly:

              


      

       

      
        	
                (a)

              	
                comply
      with any requirement of the Lender as to the location or re-location of
      the Earnings Accounts and the Retention Account (or any of
      them);

              


      

       

      
        	
                (b)

              	
                execute
      any documents which the Lender specifies to create or maintain in favour
      of the Lender a Security Interest over (and/or rights of set-off,
      consolidation or other rights in relation to) the Earnings Accounts and
      the Retention Account.

              


      

       

      
        	
                17.8

              	
                Debits for expenses
      etc.  The Lender shall be entitled (but not obliged) from
      time to time to debit any Earnings Accounts without prior notice in order
      to discharge any amount due and payable under Clause 19 or 20 to the
      Lender or payment of which the Lender has become entitled to demand under
      Clause 19 or 20.

              


      

       

      
        	
                17.9

              	
                Borrowers’ obligations
      unaffected.  The provisions of this Clause 17 (as
      distinct from a distribution effected under Clause 17.4) do not
      affect:

              


      

       


      
        
           


        

        
          40

          
            

          

        

        
           


        

      


      


       

      
        	
                (a)

              	
                the
      liability of the Borrowers to make payments of principal and interest on
      the due dates; or

              


      

       

      
        	
                (b)

              	
                any
      other liability or obligation of the Borrowers or any Security Party under
      any Finance Document.

              


      

       

      
        	
                18

              	
                EVENTS
      OF DEFAULT

              


      

       

      
        	
                18.1

              	
                Events of
      Default.  An Event of Default occurs
  if:

              


      

       

      
        	
                (a)

              	
                any
      Borrower or any Security Party fails to pay when due or (if so payable) on
      demand any sum payable under a Finance Document or under any document
      relating to a Finance Document; or

              


      

       

      
        	
                (b)

              	
                any
      breach occurs of Clause 8.2, 10.2, 10.3, 11.2, 11.3 or 14.1;
      or

              


      

       

      
        	
                (c)

              	
                any
      breach by any Borrower or any Security Party occurs of any provision of a
      Finance Document (other than a breach covered by paragraphs (a) or (b)
      above) if, in the opinion of the Lender, such default is capable of
      remedy, and such default continues unremedied 5 Business Days after
      written notice from the Lender requesting action to remedy the same;
      or

              


      

       

      
        	
                (d)

              	
                (subject
      to any applicable grace period specified in the Finance Documents) any
      breach by any Borrower or any Security Party occurs of any provision of a
      Finance Document (other than a breach covered by paragraphs (a), (b) or
      (c) above); or

              


      

       

      
        	
                (e)

              	
                any
      representation, warranty or statement made by, or by an officer of, a
      Borrower or a Security Party in a Finance Document or in a Drawdown Notice
      or any other notice or document relating to a Finance Document is untrue
      or misleading when it is made; or

              


      

       

      
        	
                (f)

              	
                any
      of the following occurs in relation to any Financial Indebtedness of a
      Relevant Person:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                any
      Financial Indebtedness of a Relevant Person is not paid when due or, if so
      payable, on demand; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      Financial Indebtedness of a Relevant Person becomes due and payable or
      capable of being declared due and payable prior to its stated maturity
      date as a consequence of any event of default;
  or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                a
      lease, hire purchase agreement or charter creating any Financial
      Indebtedness of a Relevant Person is terminated by the lessor or owner or
      becomes capable of being terminated as a consequence of any termination
      event; or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                any
      overdraft, loan, note issuance, acceptance credit, letter of credit,
      guarantee, foreign exchange or other facility, or any swap or other
      derivative contract or transaction, relating to any Financial Indebtedness
      of a Relevant Person ceases to be available or becomes capable of being
      terminated as a result of any event of default, or cash cover is required,
      or becomes capable of being required, in respect of such a facility as a
      result of any event of default; or

              


      

       

      
        	
                 
      

              	
                (v)

              	
                any
      Security Interest securing any Financial Indebtedness of a Relevant Person
      becomes enforceable; or

              


      

       

      
        	
                (g)

              	
                any
      of the following occurs in relation to a Relevant
  Person:

              


      

       


      
        
           


        

        
          41

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                (i)

              	
                a
      Relevant Person becomes, in the opinion of the Lender, unable to pay its
      debts as they fall due; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      assets of a Relevant Person are subject to any form of execution,
      attachment, arrest, sequestration or distress in respect of a sum of, or
      sums aggregating, $250,000 or more or the equivalent in another currency
      unless such execution, attachment, arrest, sequestration or distress is
      being contested in good faith and on substantial grounds and is discussed
      or withdrawn within thirty (30) days of the occurrence thereof;
      or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                any
      administrative or other receiver is appointed over any asset of a Relevant
      Person; or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                an
      administrator is appointed (whether by the court or otherwise) in respect
      of a Relevant Person;

              


      

       

      
        	
                 
      

              	
                (v)

              	
                a
      Relevant Person makes any formal declaration of bankruptcy or any formal
      statement to the effect that it is insolvent or likely to become
      insolvent, or a winding up or administration order is made in relation to
      a Relevant Person, or the members or directors of a Relevant Person pass a
      resolution to the effect that it should be wound up, placed in
      administration or cease to carry on business, save that this paragraph
      does not apply to a fully solvent winding up of a Relevant Person other
      than a Borrower or the Corporate Guarantor which is, or is to be, effected
      for the purposes of an amalgamation or reconstruction previously approved
      by the Lender and effected not later than 3 months after the commencement
      of the winding up; or

              


      

       

      
        	
                 
      

              	
                (vi)

              	
                a
      petition is presented in any Pertinent Jurisdiction for the winding up or
      administration, or the appointment of a provisional liquidator, of a
      Relevant Person unless the petition is being contested in good faith and
      on substantial grounds and is dismissed or withdrawn within 30 days of the
      presentation of the petition; or

              


      

       

      
        	
                 
      

              	
                (vii)

              	
                a
      Relevant Person petitions a court, or presents any proposal for, any form
      of judicial or non-judicial suspension or deferral of payments,
      reorganisation of its debt (or certain of its debt) or arrangement with
      all or a substantial proportion (by number or value) of its creditors or
      of any class of them or any such suspension or deferral of payments,
      reorganisation or arrangement is effected by court order, contract or
      otherwise; or

              


      

       

      
        	
                 
      

              	
                (viii)

              	
                any
      meeting of the members or directors of a Relevant Person is summoned for
      the purpose of considering a resolution or proposal to authorise or take
      any action of a type described in paragraphs (iii), (iv), (v), (vi) or
      (vii) above; or

              


      

       

      
        	
                 
      

              	
                (ix)

              	
                in
      a Pertinent Jurisdiction other than England, any event occurs or any
      procedure is commenced which, in the opinion of the Lender, is similar to
      any of the foregoing; or

              


      

       

      
        	
                (h)

              	
                any
      Borrower or any Security Party ceases or suspends carrying on its business
      or a part of its business which, in the opinion of the Lender, is material
      in the context of this Agreement;
or

              


      

       

      
        	
                (i)

              	
                it
      becomes unlawful in any Pertinent Jurisdiction or
    impossible:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                for
      any Borrower or any Security Party to discharge any liability under a
      Finance Document or to comply with any other obligation which the Lender
      considers material under a Finance Document;
or

              


      

       


      
        
           


        

        
          42

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                (ii)

              	
                for
      the Lender to exercise or enforce any right under, or to enforce any
      Security Interest created by, a Finance Document;
  or

              


      

       

      
        	
                (j)

              	
                any
      consent necessary to enable any Borrower to own, operate or charter the
      Ship owned by it or to enable any Borrower or any Security Party to comply
      with any provision which the Lender considers material of a Finance
      Document or a Shipbuilding Contract is not granted, expires without being
      renewed, is revoked or becomes liable to revocation or any condition of
      such a consent is not fulfilled; or

              


      

       

      
        	
                (k)

              	
                it
      appears to the Lender that, without its prior consent, a change has
      occurred or probably has occurred after the date of this Agreement in the
      legal or beneficial ownership of any of the shares in any of the Borrowers
      or in the ultimate control of the voting rights attaching to any of those
      shares; or

              


      

       

      
        	
                (l)

              	
                any
      provision which the Lender considers material of a Finance Document proves
      to have been or becomes invalid or unenforceable, or a Security Interest
      created by a Finance Document proves to have been or becomes invalid or
      unenforceable or such a Security Interest proves to have ranked after, or
      loses its priority to, another Security Interest or any other third party
      claim or interest; or

              


      

       

      
        	
                (m)

              	
                the
      security constituted by a Finance Document is in any way imperilled or in
      jeopardy; or

              


      

       

      
        	
                (n)

              	
                any
      of the Ships is not delivered by the Builder to the relevant Borrower
      under the relevant Shipbuilding Contract by the date falling 210 days
      after the scheduled delivery date of such Ship referred to in Article VII
      of each Shipbuilding Contract;

              


      

       

      
        	
                (o)

              	
                a
      default occurs under any time charter of any Ship or under the management
      agreement with respect to any Ship;

              


      

       

      
        	
                (p)

              	
                any
      other event occurs or any other circumstances arise or develop including,
      without limitation:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                a
      change in the financial position, state of affairs or prospects of any
      Borrower or the Corporate Guarantor;
or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      accident or other event involving any of the Ships or another vessel
      owned, chartered or operated by a Relevant
  Person,

              


      

       

      
        	
                 
      

              	
                in
      the light of which the Lender considers that there is a significant risk
      that any Borrower or any Security Party is, or will later become, unable
      to discharge its liabilities under the Finance Documents to which it is a
      party as they fall due.

              


      

      


      
        	
                18.2

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

              


      

       

      
        	
                (a)

              	
                the
      Lender may:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                serve
      on the Borrowers a notice stating that the Commitment and all other
      obligations of the Lender to the Borrowers under this Agreement are
      terminated; and/or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                serve
      on the Borrowers a notice stating that the Loan, all accrued interest and
      all other amounts accrued or owing under this Agreement are immediately
      due and payable or are due and payable on demand;
  and/or

              


      

       


      
        
           


        

        
          43

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                (iii)

              	
                serve
      on the Borrowers a notice declaring that an Event of Default has occurred
      and reserving all rights of the Lender under this Agreement and all the
      Finance Documents; and/or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                take
      any other action which, as a result of the Event of Default or any notice
      served under paragraph (i) or (ii) above, the Lender is entitled to take
      under any Finance Document or any applicable law;
  and/or

              


      

       

      
        	
                (b)

              	
                the
      Lender may take any action which, as a result of the Event of Default or
      any notice served under paragraph (a) (i) or (ii) above, the Lender is
      entitled to take under any Finance Document or any applicable
      law.

              


      

       

      
        	
                18.3

              	
                Termination of
      Commitment.  On the service of a notice under paragraph
      (a)(i) of Clause 18.2, the Commitment and all other obligations of the
      Lender to the Borrowers under this Agreement shall
    terminate.

              


      

       

      
        	
                18.4

              	
                Acceleration of
      Loan.  On the service of a notice under paragraph (a)(ii)
      of Clause 18.2, the Loan, all accrued interest and all other amounts
      accrued or owing from the Borrowers or any Security Party under this
      Agreement and every other Finance Document shall become immediately due
      and payable or, as the case may be, payable on
  demand.

              


      

       

      
        	
                18.5

              	
                Multiple notices; action
      without notice.  The Lender may serve notices under
      paragraphs (a) (i) and (ii) of Clause 18.2 simultaneously or on different
      dates and it may take any action referred to in that Clause if no such
      notice is served or simultaneously with or at any time after the service
      of both or either of such notices.

              


      

       

      
        	
                18.6

              	
                Exclusion of Lender’s
      Liability.  Neither the Lender nor any receiver or
      manager appointed by it shall have any liability to any Borrower or any
      Security Party:

              


      

       

      
        	
                (a)

              	
                for
      any loss caused by an exercise of rights under, or enforcement of a
      Security Interest created by, a Finance Document or by any failure or
      delay to exercise such a right or to enforce such a Security Interest;
      or

              


      

       

      
        	
                (b)

              	
                as
      mortgagee in possession or otherwise, for any income or principal amount
      which might have been produced by or realised from any asset comprised in
      such a Security Interest or for any reduction (however caused) in the
      value of such an asset,

              


      

       

      except
that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused by the gross negligence or the wilful
misconduct of the Lender’s own officers and employees or (as the case may be)
such receiver's or manager's own partners or employees.

       

      
        	
                18.7

              	
                Relevant
      Persons.  In this Clause 18 “a Relevant Person” means
      any Borrower, the Corporate Guarantor and any other Security Party and,
      for the purposes of Clause 18.1 (g), any charterer of a
    Ship.

              


      

       

      
        	
                18.8

              	
                Interpretation.  In
      Clause 18.1(f) references to an event of default or a termination event
      include any event, howsoever described, which is similar to an event of
      default in a facility agreement or a termination event in a finance lease;
      and in Clause 18.1(g) “petition” includes an
      application.

              


      

       


      
        
           


        

        
          44

          
            

          

        

        
           


        

      


      


       

      
        	
                19

              	
                FEES
      AND EXPENSES

              


      

       

      
        	
                19.1

              	
                Arrangement and commitment
      fees.  The Borrowers shall pay to the
    Lender:

              


      

       

      
        	
                (a)

              	
                on
      the Drawdown Date of the first Advance, a non-refundable arrangement fee
      of $280,000; and

              


      

       

      
        	
                (b)

              	
                quarterly
      in arrears (and on the last day of the Availability Period) during the
      period from (and including) the date of this Agreement to the earlier of
      (i) the final Drawdown Date and (ii) the last day of the Availability
      Period, a commitment fee at the rate of 0.30% per annum on the undrawn
      amount of the Commitment from time to
time.

              


      

       

      
        	
                19.2

              	
                Costs of negotiation,
      preparation etc.  The Borrowers shall pay to the Lender
      on its demand the amount of all expenses incurred by the Lender in
      connection with the negotiation, preparation, execution or registration of
      any Finance Document or any related document or with any transaction
      contemplated by a Finance Document or a related
  document.

              


      

       

      
        	
                19.3

              	
                Costs of variations,
      amendments, enforcement etc.  The Borrowers shall pay to
      the Lender, on the Lender's demand, the amount of all expenses incurred by
      the Lender in connection with:

              


      

       

      
        	
                (a)

              	
                any
      amendment or supplement to a Finance Document, or any proposal for such an
      amendment to be made;

              


      

       

      
        	
                (b)

              	
                any
      consent or waiver by the Lender under or in connection with a Finance
      Document, or any request for such a consent or
  waiver;

              


      

       

      
        	
                (c)

              	
                the
      valuation of any security provided or offered under Clause 14 or any other
      matter relating to such security;

              


      

       

      
        	
                (d)

              	
                any
      step taken by the Lender concerned with a view to the protection, exercise
      or enforcement of any right or Security Interest created by a Finance
      Document or for any similar
purpose.

              


      

       

      There
shall be recoverable under paragraph (d) the full amount of all reasonable legal
expenses, whether or not such as would be allowed under rules of court or any
taxation or other procedure carried out under such rules.

      


      
        	
                19.4

              	
                Documentary
      taxes.  The Borrowers shall promptly pay any tax payable
      on or by reference to any Finance Document, and shall, on the Lender's
      demand, fully indemnify the Lender against any liabilities and expenses
      resulting from any failure or delay by the Borrowers (or any of them) to
      pay such a tax.

              


      

       

      
        	
                19.5

              	
                Certification of
      amounts.  A notice which is signed by two officers of the
      Lender, which states that a specified amount, or aggregate amount, is due
      to the Lender under this Clause 19 and which indicates (without
      necessarily specifying a detailed breakdown) the matters in respect of
      which the amount, or aggregate amount, is due shall, save for manifest
      error, be prima facie evidence that the amount, or aggregate amount, is
      due.

              


      

       

      
        	
                20

              	
                INDEMNITIES

              


      

       

      
        	
                20.1

              	
                Indemnities regarding borrowing
      and repayment of Loan.  The Borrowers shall fully
      indemnify the Lender on its demand in respect of all expenses, liabilities
      and losses which are incurred by the Lender or which the Lender reasonably
      and with due diligence estimates that it will incur, as a result of or in
      connection with:

              


      

       


      
        
           


        

        
          45

          
            

          

        

        
           


        

      


      


       

      
        	
                (a)

              	
                an
      Advance not being borrowed on the date specified in the relevant Drawdown
      Notice for any reason other than a default by the
  Lender;

              


      

       

      
        	
                (b)

              	
                the
      receipt or recovery of all or any part of the Loan or an overdue sum
      otherwise than on the last day of an Interest Period or other relevant
      period;

              


      

       

      
        	
                (c)

              	
                any
      failure (for whatever reason) by the Borrowers to make payment of any
      amount due under a Finance Document on the due date or, if so payable, on
      demand (after giving credit for any default interest paid by the Borrowers
      on the amount concerned under Clause
6);

              


      

       

      
        	
                (d)

              	
                the
      occurrence and/or continuance of an Event of Default or a Potential Event
      of Default and/or the acceleration of repayment of the Loan under Clause
      18;

              


      

       

      
        	
                 
      

              	
                and
      in respect of any tax (other than tax on its overall net income) for which
      the Lender is liable in connection with any amount paid or payable to the
      Lender (whether for its own account or otherwise) under any Finance
      Document.

              


      

      


      
        	
                20.2

              	
                Breakage
      costs.  Without limiting its generality, Clause 20.1
      covers any liability, expense or loss incurred by the
    Lender:

              


      

       

      
        	
                (a)

              	
                in
      liquidating or employing deposits from third parties acquired or arranged
      to fund or maintain all or any part of the Loan and/or any overdue amount
      (or an aggregate amount which includes the Loan or any overdue amount);
      and

              


      

       

      
        	
                (b)

              	
                in
      terminating, or otherwise in connection with, any interest and/or currency
      swap or any other transaction entered into (whether with another legal
      entity or with another office or department of the Lender) to hedge any
      exposure arising under this Agreement or that part which the Lender
      determines is fairly attributable to this Agreement of the amount of the
      liabilities, expenses or losses (including losses of prospective profits)
      incurred by it in terminating, or otherwise in connection with, a number
      of transactions of which this Agreement is
one.

              


      

       

      
        	
                20.3

              	
                Miscellaneous
      indemnities.  The Borrowers shall fully indemnify the
      Lender in respect of all claims, demands, proceedings, liabilities, taxes,
      losses and expenses of every kind (“liability items”) which
      may be made or brought against, or incurred by, the Lender, in any
      country, in relation to:

              


      

       

      
        	
                (a)

              	
                any
      action taken, or omitted or neglected to be taken, under or in connection
      with any Finance Document by the Lender or by any receiver appointed under
      a Finance Document;

              


      

       

      
        	
                (b)

              	
                any
      other event, matter or question which occurs or arises at any time during
      the Security Period and which has any connection with, or any bearing on,
      any Finance Document, any payment or other transaction relating to a
      Finance Document or any asset covered (or previously covered) by a
      Security Interest created (or intended to be created) by a Finance
      Document;

              


      

       

      other
than liability items which are shown to have been caused by the gross negligence
or the wilful misconduct of the Lender's own
officers or employees.

      


      Without
prejudice to its generality, this Clause 20.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, the ISPS Code or any
Environmental Law.


      
        
           


        

        
          46

          
            

          

        

        
           


        

      


      


      
        	
                20.4

              	
                Currency
      indemnity.  If any sum due from any Borrower or any
      Security Party to the Lender under a Finance Document or under any order
      or judgment relating to a Finance Document has to be converted from the
      currency in which the Finance Document provided for the sum to be paid
      (the “Contractual
      Currency”) into another currency (the “Payment Currency”) for
      the purpose of:

              


      

       

      
        	
                (a)

              	
                making
      or lodging any claim or proof against any Borrower or any Security Party,
      whether in its liquidation, any arrangement involving it or otherwise;
      or

              


      

       

      
        	
                (b)

              	
                obtaining
      an order or judgment from any court or other tribunal;
  or

              


      

       

      
        	
                (c)

              	
                enforcing
      any such order or judgment;

              


      

       

      the
Borrowers shall indemnify the Lender against
the loss arising when the amount of the payment actually received by the Lender
is converted at the available rate of exchange into the Contractual
Currency.

      


      In
this Clause 20.5, the “available rate of exchange”
means the rate at which the Lender  is able
at the opening of business (London time) on the Business Day after it receives
the sum concerned to purchase the Contractual Currency with the Payment
Currency.

      


      This
Clause 20.5 creates a separate liability of the Borrowers which is distinct from
its other liabilities under the Finance Documents and which shall not be merged
in any judgment or order relating to those other liabilities.

      


      
        	
                20.5

              	
                Application to Master
      Agreement.  For the avoidance of doubt, Clause 20.4 does
      not apply in respect of sums due from the Borrowers to the Lender under or
      in connection with the Master Agreement as to which sums the provisions of
      section 8(c) (Contractual Currency) of the Master Agreement shall
      apply.

              


      

       

      
        	
                20.6

              	
                Certification of
      amounts.  A notice which is signed by an officer of the
      Lender, which states that a specified amount, or aggregate amount, is due
      to the Lender under this Clause 20 and which indicates (without
      necessarily specifying a detailed breakdown) the matters in respect of
      which the amount, or aggregate amount, is due shall be prima facie
      evidence that the amount, or aggregate amount, is
  due.

              


      

       

      
        	
                21

              	
                NO
      SET-OFF OR TAX DEDUCTION

              


      

       

      
        	
                21.1

              	
                No
      deductions.  All amounts due from the Borrowers under a
      Finance Document shall be paid:

              


      

       

      
        	
                (a)

              	
                without
      any form of set-off, cross-claim or condition;
  and

              


      

       

      
        	
                (b)

              	
                free
      and clear of any tax deduction except a tax deduction which a Borrower is
      required by law to make.

              


      

       

      
        	
                21.2

              	
                Grossing-up for
      taxes.  If a Borrower is required by law to make a tax
      deduction from any payment:

              


      

       

      
        	
                (a)

              	
                that
      Borrower shall notify the Lender as soon as it becomes aware of the
      requirement;

              


      

       

      
        	
                (b)

              	
                that
      Borrower shall pay the tax deducted to the appropriate taxation authority
      promptly, and in any event before any fine or penalty
    arises;

              


      

       


      
        
           


        

        
          47

          
            

          

        

        
           


        

      


      


       

      
        	
                (c)

              	
                the
      amount due in respect of the payment shall be increased by the amount
      necessary to ensure that the Lender receives and retains (free from any
      liability relating to the tax deduction) a net amount which, after the tax
      deduction, is equal to the full amount which it would otherwise have
      received.

              


      

       

      
        	
                21.3

              	
                Evidence of payment of
      taxes.  Within 1 month after making any tax deduction,
      the Borrower concerned shall deliver to the Lender documentary evidence
      satisfactory to the Lender that the tax had been paid to the appropriate
      taxation authority.

              


      

       

      
        	
                21.4

              	
                Exclusion of tax on overall net
      income.  In this Clause 21 “tax deduction” means any
      deduction or withholding for or on account of any present or future tax
      except tax on the Lender's overall net
income.

              


      

       

      
        	
                21.5

              	
                Application to Master
      Agreement.  For the avoidance of doubt, Clause 21 does
      not apply in respect of sums due from the Borrowers to the Lender under or
      in connection with the Master Agreement as to which sums the provisions of
      section 2(d) (Deduction or Withholding for Tax) of the Master Agreement
      shall apply.

              


      

       

      
        	
                22

              	
                ILLEGALITY,
      ETC

              


      

       

      
        	
                22.1

              	
                Illegality.  This
      Clause 22 applies if the Lender notifies the Borrowers that it has become,
      or will with effect from a specified date,
  become:

              


      

       

      
        	
                (a)

              	
                unlawful
      or prohibited as a result of the introduction of a new law, an amendment
      to an existing law or a change in the manner in which an existing law is
      or will be interpreted or applied;
or

              


      

       

      
        	
                (b)

              	
                contrary
      to, or inconsistent with, any
regulation,

              


      

       

      
        	
                 
      

              	
                for
      the Lender to maintain or give effect to any of its obligations under this
      Agreement in the manner contemplated by this
  Agreement.

              


      

      


      
        	
                22.2

              	
                Prepayment; termination of
      Commitment.  On the Lender notifying the Borrowers under
      Clause 22.1, the Commitment shall terminate; and thereupon or, if later,
      on the date specified in the Lender's notice under Clause 22.1 as the date
      on which the notified event would become effective the Borrowers shall
      prepay the Loan in accordance with Clause
7.

              


      

       

      
        	
                23

              	
                INCREASED
      COSTS

              


      

       

      
        	
                23.1

              	
                Increased
      costs.  This Clause 23 applies if the Lender notifies the
      Borrowers that it considers that as a result
of:

              


      

       

      
        	
                (a)

              	
                the
      introduction or alteration after the date of this Agreement of a law or an
      alteration after the date of this Agreement in the manner in which a law
      is interpreted or applied (disregarding any effect which relates to the
      application to payments under this Agreement of a tax on the Lender's
      overall net income); or

              


      

       

      
        	
                (b)

              	
                the
      effect of complying with any regulation (including any which relates to
      capital adequacy or liquidity controls or which affects the manner in
      which the Lender allocates capital resources to its obligations under this
      Agreement) which is introduced, or altered, or the interpretation or
      application of which is altered, after the date of this
      Agreement,

              


      

       


      
        
           


        

        
          48

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                is
      that the Lender (or a parent company of it) has incurred or will incur an
      “increased cost”, that is to say,:

              


      

      


      
        	
                 
      

              	
                (i)

              	
                an
      additional or increased cost incurred as a result of, or in connection
      with, the Lender having entered into, or being a party to, this Agreement
      or having taken an assignment of rights under this Agreement, of funding
      or maintaining the Loan or performing its obligations under this
      Agreement, or of having outstanding all or any part of the Loan or other
      unpaid sums; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      reduction in the amount of any payment to the Lender under this Agreement
      or in the effective return which such a payment represents to the Lender
      or on its capital;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                an
      additional or increased cost of funding all or maintaining all or any of
      the advances comprised in a class of advances formed by or including the
      Loan or (as the case may require) the proportion of that cost attributable
      to the Loan; or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                a
      liability to make a payment, or a return foregone, which is calculated by
      reference to any amounts received or receivable by the Lender under this
      Agreement;

              


      

       

      but
not an item attributable to a change in the rate of tax on the overall net
income of the Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 20.1 or by Clause 21.

      


      For
the purposes of this Clause 23.1 the Lender may in good faith allocate or spread
costs and/or losses among its assets and liabilities (or any class thereof) on
such basis as it considers appropriate.

      


      
        	
                23.2

              	
                Payment of increased
      costs.  The Borrowers shall pay to the Lender, on its
      demand, for the account of the Lender the amounts which the Lender from
      time to time notifies the Borrowers that it has specified to be necessary
      to compensate the Lender for the increased
cost.

              


      

       

      
        	
                23.3

              	
                Notice of
      prepayment.  If the Borrowers are not willing to continue
      to compensate the Lender for the increased cost under Clause 23.2, the
      Borrowers may give the Lender not less than 14 days' notice of their
      intention to prepay the Loan at the end of an Interest
    Period.

              


      

       

      
        	
                23.4

              	
                Prepayment; termination of
      Commitment.  A notice under Clause 23.3 shall be
      irrevocable and on the date specified in its notice of intended
      prepayment, the Borrowers shall prepay (without premium or penalty) the
      Loan, together with accrued interest thereon at the applicable rate plus
      the applicable Margin plus the Mandatory Costs (if
  any).

              


      

       

      
        	
                23.5

              	
                Application of
      prepayment.  Clause 7 shall apply in relation to the
      prepayment.

              


      

       

      
        	
                24

              	
                SET-OFF

              


      

       

      
        	
                24.1

              	
                Application of credit
      balances.  The Lender may without prior
      notice:

              


      

       

      
        	
                (a)

              	
                apply
      any balance (whether or not then due) which at any time stands to the
      credit of any account in the name of the Borrowers or any of them at any
      office in any country of the Lender in or towards satisfaction of any sum
      then due from the Borrowers or any of them to the Lender under any of the
      Finance Documents; and

              


      

       

      
        	
                (b)

              	
                for
      that purpose:

              


      

       


      
        
           


        

        
          49

          
            

          

        

        
           


        

      


      


       

      
        	
                 
      

              	
                (i)

              	
                break,
      or alter the maturity of, all or any part of a deposit of the Borrowers or
      any of them;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                convert
      or translate all or any part of a deposit or other credit balance into
      Dollars;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                enter
      into any other transaction or make any entry with regard to the credit
      balance which the Lender considers
appropriate.

              


      

       

      
        	
                24.2

              	
                Existing rights
      unaffected.  The Lender shall not be obliged to exercise
      any of its rights under Clause 24.1; and those rights shall be without
      prejudice and in addition to any right of set-off, combination of
      accounts, charge, lien or other right or remedy to which it is entitled
      (whether under the general law or any
document).

              


      

       

      
        	
                24.3

              	
                No Security
      Interest.  This Clause 24 gives the Lender a contractual
      right of set off only, and does not create any equitable charge or other
      Security Interest over any credit balance of the Borrowers or any of
      them.

              


      

       

      
        	
                25

              	
                TRANSFERS
      AND CHANGES IN LENDING OFFICES

              


      

       

      
        	
                25.1

              	
                Transfer by the
      Borrowers.  No Borrower may, without the consent of the
      Lender:

              


      

       

      
        	
                (a)

              	
                transfer
      any of its rights or obligations under any Finance Document;
      or

              


      

       

      
        	
                (b)

              	
                enter
      into any merger, de-merger or other reorganisation, or carry out any other
      act, as a result of which any of its rights or liabilities would vest in,
      or pass to, another person.

              


      

       

      
        	
                25.2

              	
                Assignment by Lender.
      The Lender may assign all or any of the rights and interests which
      it has under or by virtue of the Finance Documents without the consent of
      the Borrowers.

              


      

       

      
        	
                25.3

              	
                Rights of
      assignee.  In respect of  any breach
      of  a warranty, undertaking, condition or other provision of a
      Finance Document, or any misrepresentation made in or in connection with a
      Finance Document, a direct of indirect assignee of any of the Lender’s
      rights or interests under or by virtue of the Finance Documents shall be
      entitled to recover damages by reference to the loss incurred by that
      assignee as a result of the breach or misrepresentation irrespective of
      whether the Lender would have incurred a loss of that kind or
      amount.

              


      

       

      
        	
                25.4

              	
                Sub-participation; subrogation
      assignment.  The Lender may sub-participate all or any
      part of its rights and/or obligations under or in connection with the
      Finance Documents, without the consent of, or any notice to, the Borrowers
      or any Security Party; and the Lender may assign, in any manner and terms
      agreed by it, all or any part of those rights to an insurer or surety who
      has become subrogated to it.

              


      

       

      
        	
                25.5

              	
                Disclosure of
      information.  The Lender may disclose to a potential
      assignee or sub-participant any information which the Lender has received
      in relation to the Borrowers, any Security Party or their affairs under or
      in connection with any Finance Document, provided that the potential
      assignee or sub-participant shall first have executed a confidentiality
      agreement in relation thereto.

              


      

       

      
        	
                25.6

              	
                Change of lending
      office.  The Lender may change its lending office by
      giving notice to the Borrowers and the change shall become effective on
      the later of:

              


      

       


      
        
           


        

        
          50

          
            

          

        

        
           


        

      


      


       

      
        	
                (a)

              	
                the
      date on which the Borrowers receive the notice;
  and

              


      

       

      
        	
                (b)

              	
                the
      date, if any, specified in the notice as the date on which the change will
      come into effect.

              


      

       

      
        	
                26

              	
                VARIATIONS
      AND WAIVERS

              


      

       

      
        	
                26.1

              	
                Variations, waivers etc. by
      Lender.  Subject to Clause 26.2, a document shall be
      effective to vary, waive, suspend or limit any provision of a Finance
      Document, or the Lender’s rights or remedies under such a provision or the
      general law, only if the document is signed, or specifically agreed to by
      fax or telex, by the Borrowers, by the Lender, and, if the document
      relates to a Finance Document to which a Security Party is party, by that
      Security Party.

              


      

       

      
        	
                26.2

              	
                Exclusion of other or implied
      variations.  Except for a document which satisfies the
      requirements of Clauses 26.1 and 26.2, no document, and no act, course of
      conduct, failure or neglect to act, delay or acquiescence on the part of
      the Lender (or any person acting on behalf of it) shall result in the
      Lender (or any person acting on behalf of it) being taken to have varied,
      waived, suspended or limited, or being precluded (permanently or
      temporarily) from enforcing, relying on or
  exercising:

              


      

       

      
        	
                (a)

              	
                a
      provision of this Agreement or another Finance Document;
  or

              


      

       

      
        	
                (b)

              	
                an
      Event of Default; or

              


      

       

      
        	
                (c)

              	
                a
      breach by a Borrower or a Security Party of an obligation under a Finance
      Document or the general law; or

              


      

       

      
        	
                (d)

              	
                any
      right or remedy conferred by any Finance Document or by the general
      law

              


      

       

      and
there shall not be implied into any Finance Document any term or condition
requiring any such provision to be enforced, or such right or remedy to be
exercised, within a certain or reasonable time

       

      
        	
                27

              	
                NOTICES

              


      

       

      
        	
                27.1

              	
                General.  Unless
      otherwise specifically provided, any notice under or in connection with
      any Finance Document shall be given by letter or fax; and references in
      the Finance Documents to written notices, notices in writing and notices
      signed by particular persons shall be construed
    accordingly.

              


      

       

      
        	
                27.2

              	
                Addresses for
      communications.  A notice shall be
  sent:

              


      

       

      
        	
                (a)

              	
                to
      a Borrower:

              	
                c/o

              	
                Omega
      Navigation Enterprises Inc.

              
	 
      	 
      	
                24
      Kanigos Street

              
	 
      	 
      	
                Kastella

              
	 
      	 
      	
                Piraeus

              
	 
      	 
      	
                Greece

              
	 
      	 
      	
                Fax
      No:  +30 210
      [                      ]

              
	 
      	 
      	
                Attn:
      Charilaos Loukopoulos, Executive Vice
President

              


      


      
        
           


        

        
          51

          
            

          

        

        
           


        

      


      


      
        	
                (b)

              	
                to
      the Lender:

              	
                The
      Governor and Company of the Bank of Scotland

              
	 
      	 
      	
                Pentland
      House

              
	 
      	 
      	
                8
      Lochside Avenue

              
	 
      	 
      	
                Edinburgh
      EH12 9DJ

              
	 
      	 
      	
                Scotland

              
	 
      	 
      	
                Fax
      No:  +44 131 658 3220

              


      

      


      or
to such other address as the relevant party may notify the Borrowers, the Lender
and the Security Parties.

       

      
        	
                27.3

              	
                Effective date of
      notices.  Subject to Clauses 27.4 and
    27.5:

              


      

       

      
        	
                (a)

              	
                a
      notice which is delivered personally or posted shall be deemed to be
      served, and shall take effect, at the time when it is
      delivered;

              


      

       

      
        	
                (b)

              	
                a
      notice which is sent by fax shall be deemed to be served, and shall take
      effect, 2 hours after its transmission is
  completed.

              


      

       

      
        	
                27.4

              	
                Service outside business
      hours.  However, if under Clause 27.3 a notice would be
      deemed to be served:

              


      

       

      
        	
                (a)

              	
                on
      a day which is not a business day in the place of receipt;
    or

              


      

       

      
        	
                (b)

              	
                on
      such a business day, but after 5 p.m. local
  time;

              


      

       

      
        	
                 
      

              	
                the
      notice shall (subject to Clause 27.5) be deemed to be served, and shall
      take effect, at 9 a.m. on the next day which is such a business
      day.

              


      

      


      
        	
                27.5

              	
                Illegible
      notices.  Clauses 27.3 and 27.4 do not apply if the
      recipient of a notice notifies the sender within one hour after the time
      at which the notice would otherwise be deemed to be served that the notice
      has been received in a form which is illegible in a material
      respect.

              


      

       

      
        	
                27.6

              	
                Valid
      notices.  A notice under or in connection with a Finance
      Document shall not be invalid by reason that its contents or the manner of
      serving it do not comply with the requirements of this Agreement or, where
      appropriate, any other Finance Document under which it is served
      if:

              


      

       

      
        	
                (a)

              	
                the
      failure to serve it in accordance with the requirements of this Agreement
      or other Finance Document, as the case may be, has not caused any party to
      suffer any significant loss or
  prejudice;  or

              


      

       

      
        	
                (b)

              	
                in
      the case of incorrect and/or incomplete contents, it should have been
      reasonably clear to the party on which the notice was served what the
      correct or missing particulars should have
been.

              


      

       

      
        	
                27.7

              	
                English
      language.  Any notice under or in connection with a
      Finance Document shall be in
English.

              


      

       

      
        	
                27.8

              	
                Meaning of
      “notice”.  In this Clause “notice” includes any demand,
      consent, authorisation, approval, instruction, waiver or other
      communication.

              


      

       


      
        
           


        

        
          52

          
            

          

        

        
           


        

      


      


       

      
        	
                28

              	
                JOINT
      AND SEVERAL LIABILITY

              


      

       

      
        	
                28.1

              	
                General.  All
      liabilities and obligations of the Borrowers under this Agreement shall,
      whether expressed to be so or not, be several and, if and to the extent
      consistent with Clause 28.2, joint.

              


      

       

      
        	
                28.2

              	
                No impairment of Borrowers’
      obligations.  The liabilities and obligations of a
      Borrower shall not be impaired by:

              


      

       

      
        	
                (a)

              	
                this
      Agreement being or later becoming void, unenforceable or illegal as
      regards any other Borrower;

              


      

       

      
        	
                (b)

              	
                the
      Lender entering into any rescheduling, refinancing or other arrangement of
      any kind with any other Borrower;

              


      

       

      
        	
                (c)

              	
                the
      Lender releasing any other Borrower or any Security Interest created by a
      Finance Document; or

              


      

       

      
        	
                (d)

              	
                any
      combination of the foregoing.

              


      

       

      
        	
                28.3

              	
                Principal
      debtors.  Each Borrower declares that it is and will,
      throughout the Security Period, remain a principal debtor for all amounts
      owing under this Agreement and the Finance Documents and no Borrower shall
      in any circumstances be construed to be a surety for the obligations of
      any other Borrower under this
Agreement.

              


      

       

      
        	
                28.4

              	
                Subordination.  Subject
      to Clause 28.5, during the Security Period, no Borrower
    shall:

              


      

       

      
        	
                (a)

              	
                claim
      any amount which may be due to it from any other Borrower whether in
      respect of a payment made, or matter arising out of, this Agreement or any
      Finance Document, or any matter unconnected with this Agreement or any
      Finance Document; or

              


      

       

      
        	
                (b)

              	
                take
      or enforce any form of security from any other Borrower for such an
      amount, or in any other way seek to have recourse in respect of such an
      amount against any asset of any other Borrower;
  or

              


      

       

      
        	
                (c)

              	
                set
      off such an amount against any sum due from it to any other Borrower;
      or

              


      

       

      
        	
                (d)

              	
                prove
      or claim for such an amount in any liquidation, administration,
      arrangement or similar procedure involving any other Borrower or other
      Security Party; or

              


      

       

      
        	
                (e)

              	
                exercise
      or assert any combination of the
foregoing.

              


      

       

      
        	
                28.5

              	
                Borrower's required
      action.  If during the Security Period, the Lender, by
      notice to a Borrower, requires it to take any action referred to in
      paragraphs (a) to (d) of Clause 28.4, in relation to any other Borrower,
      that Borrower shall take that action as soon as practicable after
      receiving the Lender's notice.

              


      

       

      
        	
                29

              	
                SUPPLEMENTAL

              


      

       

      
        	
                29.1

              	
                Rights cumulative,
      non-exclusive.  The rights and remedies which the Finance
      Documents give to the Lender are:

              


      

       


      
        
           


        

        
          53

          
            

          

        

        
           


        

      


      


       

      
        	
                (a)

              	
                cumulative;

              


      

       

      
        	
                (b)

              	
                may
      be exercised as often as appears expedient;
and

              


      

       

      
        	
                (c)

              	
                shall
      not, unless a Finance Document explicitly and specifically states so, be
      taken to exclude or limit any right or remedy conferred by any
      law.

              


      

       

      
        	
                29.2

              	
                Severability of
      provisions.  If any provision of a Finance Document is or
      subsequently becomes void, unenforceable or illegal, that shall not affect
      the validity, enforceability or legality of the other provisions of that
      Finance Document or of the provisions of any other Finance
      Document.

              


      

       

      
        	
                29.3

              	
                Third party
      rights.  A person who is not a party to this Agreement
      has no right under the Contracts (Rights of Third Parties) Act 1999 to
      enforce or to enjoy the benefit of any term of this
    Agreement.

              


      

       

      
        	
                29.4

              	
                Counterparts.  A
      Finance Document may be executed in any number of
      counterparts.

              


      

       

      
        	
                30

              	
                LAW
      AND JURISDICTION

              


      

       

      
        	
                30.1

              	
                English
      law.  This Agreement shall be governed by, and construed
      in accordance with, English law.

              


      

       

      
        	
                30.2

              	
                Exclusive English
      jurisdiction.  Subject to Clause 30.3, the courts of
      England shall have exclusive jurisdiction to settle any disputes which may
      arise out of or in connection with this
  Agreement.

              


      

       

      
        	
                30.3

              	
                Choice of forum for the
      exclusive benefit of the Lender.  Clause 30.2 is for the
      exclusive benefit of the Lender which reserves the
  right:

              


      

       

      
        	
                (a)

              	
                to
      commence proceedings in relation to any matter which arises out of or in
      connection with this Agreement in the courts of any country other than
      England and which have or claim jurisdiction to that matter;
      and

              


      

       

      
        	
                (b)

              	
                to
      commence such proceedings in the courts of any such country or countries
      concurrently with or in addition to proceedings in England or without
      commencing proceedings in England.

              


      

       

      
        	
                 
      

              	
                No
      Borrower shall commence any proceedings in any country other than England
      in relation to a matter which arises out of or in connection with this
      Agreement.

              


      

      


      
        	
                30.4

              	
                Process
      agent.  Each Borrower irrevocably appoints Hill Dickinson
      LLP at their office for the time being, presently at Irongate House,
      Duke’s Place, London EC3A 7HX, England (attn: Electra Panayotopoulos), to
      act as its agent to receive and accept on its behalf any process or other
      document relating to any proceedings in the English courts which are
      connected with this Agreement.

              


      

       

      
        	
                30.5

              	
                Lender’s rights
      unaffected.  Nothing in this Clause 30 shall exclude or
      limit any right which the Lender may have (whether under the law of any
      country, an international convention or otherwise) with regard to the
      bringing of proceedings, the service of process, the recognition or
      enforcement of a judgment or any similar or related matter in any
      jurisdiction.

              


      

       

      
        	
                30.6

              	
                Meaning of
      “proceedings”.  In this Clause 30, “proceedings” means
      proceedings of any kind, including an application for a provisional or
      protective measure.

              


      

       

      


      AS WITNESS the hands of the
duly authorised officers or attorneys of the parties the day and year first
before written.

      



      
        
           


        

        
          54

          
            

          

        

        
           


        

      


      SCHEDULE
1

       

      DRAWDOWN
NOTICE

       

      


      To:       The
Governor and Company of the Bank of Scotland

      Pentland
House

      8
Lochside Avenue

      Edinburgh
EH12 9DJ

      Scotland

      


      


      


      Attention:
Loans
Administration                                                                                                                                 2007

      


      DRAWDOWN
NOTICE

      


      
        	
                1

              	
                We
      refer to the loan agreement (the “Loan Agreement”)
      dated                    2007
      and made between (i) ourselves as Borrowers and (2) yourselves as Lender
      in connection with a facility of up to US$70,000,000. Terms defined in the
      Loan Agreement have their defined meanings when used in this Drawdown
      Notice.

              


      

       

      
        	
                2

              	
                We
      request to borrow an Advance as
follows:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                Amount
      of Advance:
      US$[         ];

              


      

       

      
        	
                 
      

              	
                (b)

              	
                Drawdown
      Date:  [             ];

              


      

       

      
        	
                 
      

              	
                (c)

              	
                Duration
      of the first Interest Period shall be
      [        ]
  months;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                Payment
      instructions : account of
      [                             ]
      and numbered
      [                                          ]
      with
      [                 ]
      of
      [                       ].

              


      

       

      
        	
                3

              	
                We
      represent and warrant that:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                the
      representations and warranties in Clause 9 of the Loan Agreement would
      remain true and not misleading if repeated on the date of this notice with
      reference to the circumstances now
existing;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                no
      Event of Default or Potential Event of Default has occurred or will result
      from the borrowing of the Loan.

              


      

       

      
        	
                4

              	
                This
      notice cannot be revoked without the prior consent of the
      Lender.

              


      

       

      
        	
                5

              	
                [We
      authorise you to deduct from the Advance the amount of all accrued
      arrangement and commitment fees payable pursuant to Clause
      19.1].

              


      

       

      


      


      


      ___________________________________________

      Attorney-in-Fact

      for
and on behalf of


      
        
           


        

        
          55

          
            

          

        

        
           


        

      


      TYLER
NAVIGATION INC.

      and

      PASEDENA
NAVIGATION INC.

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       


      
        
           


        

        
          56

          
            

          

        

        
           


        

      


      SCHEDULE
2


       

      CONDITION
PRECEDENT DOCUMENTS

       

      In
this Schedule 2 “Relevant
Ship” means, in relation to a Tranche, the Ship in respect of which an
Advance is being drawn.

      PART
A

      


      The
following are the documents referred to in Clause 8.1(a).

      


      
        	
                1.

              	
                A
      duly executed original of each Predelivery Security Assignment (and all
      notices and acknowledgements required thereunder) and of the Corporate
      Guarantee.

              


      

       

      
        	
                2.

              	
                Copies
      of the certificate of incorporation and constitutional documents of each
      Borrower and of the Corporate
Guarantor.

              


      

       

      
        	
                3.

              	
                Copies
      of resolutions of the directors and shareholders of each Borrower and of
      the directors of the Corporate Guarantor, authorising the execution of
      each of the Finance Documents referred to at 1 above to which that
      Borrower or the Corporate Guarantor is a party and, in the case of a
      Borrower, authorising named officers to give the Drawdown Notices and
      other notices under this Agreement and ratifying the execution of the
      Shipbuilding Contract to which it is a
party.

              


      

       

      
        	
                4.

              	
                The
      original of any power of attorney under which any Finance Document
      referred to at 1 above is executed on behalf of a Borrower or the
      Corporate Guarantor.

              


      

       

      
        	
                5.

              	
                Copies
      of all consents which any Borrower or any Security Party requires to enter
      into, or make any payment under, any Finance Document or the Shipbuilding
      Contract to which it is a party.

              


      

       

      
        	
                6.

              	
                Copies
      of each of the Shipbuilding Contracts and of all documents signed or
      issued by the Borrowers or the Builder (or any of them) under or in
      connection with them, together with evidence of authorisation with respect
      to the execution thereof by the
Builder.

              


      

       

      
        	
                7.

              	
                Originals
      of each of the Refund Guarantees, together with evidence of authorisation
      with respect to the execution thereof by the Refund
    Guarantor.

              


      

       

      
        	
                8.

              	
                All
      documentation required by the Lender in respect of any Borrower or
      Security Party pursuant to the Lender’s “Know your customer” requirements,
      together with such other documents or evidence as the Lender may
      reasonably require with respect to money laundering
      regulations.

              


      

       

      
        	
                9.

              	
                Evidence
      satisfactory to the Lender in its sole discretion regarding the ownership
      structure with respect to the
Ships.

              


      

       

      
        	
                10.

              	
                Documentary
      evidence that the agent for service of process named in Clause 30 has
      accepted its appointment.

              


      

       

      
        	
                11.

              	
                Favourable
      legal opinions from lawyers appointed by the Lender on such matters
      concerning the laws of the Marshall Islands and such other relevant
      jurisdictions as the Lender may
require.

              


      

       

      
        	
                12.

              	
                If
      the Lender so requires, in respect of any of the documents referred to
      above, a certified English translation prepared by a translator approved
      by the Lender.

              


      

       


      
        
           


        

        
          57

          
            

          

        

        
           


        

      


      PART
B

      


      The
following are the documents referred to in Clause 8.1(b).

      


      
        	
                1.

              	
                A
      duly receipted invoice from the Builder with respect to the payment by the
      relevant Borrower of the first instalment due under Article X2(a) of the
      Shipbuilding Contract relating to the Relevant
  Ship.

              


      

       

      PART
C

      


      The
following are the documents referred to in Clause 8.1(c).

      


      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(b) of the Shipbuilding Contract relating to the
      Relevant Ship.

              


      

       

      PART
D

      


      The
following are the documents referred to in Clause 8.1(d):

      


      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(c) of the relevant Shipbuilding Contract upon
      commencement of steel cutting for the Relevant
  Ship.

              


      

       

      
        	
                2.

              	
                A
      stage certificate issued by the Builder and countersigned by the
      classification society approved by the Lender and in a form acceptable to
      the Lender, confirming that steel cutting of the Relevant Ship has been
      carried out to the satisfaction of such classification
      society.

              


      

       

      PART
E

      


      The
following are the documents referred to in Clause 8.1(e):

      


      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(d) of the relevant Shipbuilding Contract upon
      keel-laying of the Relevant Ship.

              


      

       

      
        	
                2.

              	
                Written
      confirmation from the relevant Borrower and the Approved Manager (if
      appointed) that they have irrevocably accepted and approved the building
      works which have been completed on the Relevant Ship up to the date of her
      keel-laying.

              


      

       

      
        	
                3.

              	
                A
      stage certificate issued by the Builder and countersigned by the
      classification society approved by the Lender and in a form acceptable to
      the Lender, confirming that keel-laying of the Relevant Ship has been
      carried out to the satisfaction of such classification
      society.

              


      

       

      
        	
                 
      

              	
                PART
      F

              


      

       

       

      
        	
                 
      

              	
                The
      following are the documents referred to in Clause
  8.1(f):

              


      

       

      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(e) of the relevant Shipbuilding Contract upon
      launching of the Relevant Ship.

              


      

       

      
        	
                2.

              	
                Written
      confirmation from the relevant Borrower and the Approved Manager (if
      appointed) that they have irrevocably accepted and approved the building
      works which have been completed on the Relevant Ship up to the date of her
      launching.

              


      

       


      
        
           


        

        
          58

          
            

          

        

        
           


        

      


      


       

      
        	
                3.

              	
                A
      stage certificate issued by the Builder and countersigned by the
      classification society approved by the Lender and in a form acceptable to
      the Lender, confirming that launching of the Relevant Ship has been
      carried out to the satisfaction of such classification
      society.

              


      

       

      PART
G

      


      The
following are the documents referred to in Clause 8.1(g):

      


      
        	
                1.

              	
                A
      duly executed original of the Mortgage and the General Assignment (and of
      each document to be delivered under each of them) in respect of the
      Relevant Ship, the Accounts Pledge, the Master Agreement and the Master
      Agreement Security Deed.

              


      

       

      
        	
                2.

              	
                Documentary
      evidence that:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                the
      Relevant Ship is in all respects ready to be delivered by the Builder to,
      and accepted by, the relevant Borrower under the relevant Shipbuilding
      Contract subject only to payment of the delivery instalment and that upon
      such payment the builder’s certificate, bill of sale and other documents
      to be delivered by the Builder to the relevant Borrower upon delivery of
      the Relevant Ship to that Borrower will be so
  delivered;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the
      Relevant Ship will on its Delivery Date be definitively and permanently
      registered in the name of the relevant Borrower under the Approved
      Flag;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                the
      Relevant Ship will on its Delivery Date be in the absolute and
      unencumbered ownership of the relevant Borrower save as contemplated by
      the Finance Documents;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                the
      Relevant Ship will on its Delivery Date be classed with the highest
      available class with Lloyds Register of Ships (or equivalent) free of all
      overdue recommendations and conditions of such Classification
      Society;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                the
      Mortgage in respect of the Relevant Ship has been executed by the relevant
      Borrower and has been, or will immediately following drawdown of the
      Delivery Advance for such Ship be, registered against the Relevant Ship as
      a valid first priority ship mortgage in accordance with the laws of the
      Approved Flag State; and

              


      

       

      
        	
                 
      

              	
                (f)

              	
                the
      Relevant Ship will on its Delivery Date be insured in accordance with the
      provisions of this Agreement and all requirements therein in respect of
      insurances have been complied with.

              


      

       

      
        	
                3.

              	
                Documents
      establishing that the Relevant Ship will, as from its Delivery Date, be
      managed by the Approved Manager on terms acceptable to the Lender,
      together with:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                the
      Approved Manager’s Undertaking in respect of the Relevant Ship, together
      with a copy of the ship management agreement for the Relevant
      Ship;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                copies
      of the Document of Compliance and Safety Management Certificate and
      ISSC;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                copies
      of such other ISM Code or ISPS Code documentation as the Lender may by
      written notice to the relevant Borrower have requested not later than 2
      days before the relevant Drawdown Date, certified as true and complete in
      all material respects by the relevant Borrower and the Approved
      Manager.

              


      

       


      
        
           


        

        
          59

          
            

          

        

        
           


        

      


      


       

      
        	
                4.

              	
                Valuations
      of the Relevant Ship addressed to the Lender, prepared in accordance with
      Clause 14 and in a form satisfactory to the
  Lender.

              


      

       

      
        	
                5.

              	
                The
      originals of any mandates or other documents required in connection with
      the opening or operation of the Earnings Accounts and the Retention
      Account.

              


      

       

      
        	
                6.

              	
                A
      favourable opinion from an independent insurance consultant appointed by
      the Lender on such matters relating to the insurances for the Relevant
      Ship as the Lender may require, and at the cost and expense of the
      Borrowers.

              


      

       

      
        	
                7.

              	
                A
      certified true copy of any time charter for the Relevant Ship in excess of
      twelve months, in a form and substance and with a charterer acceptable to
      the Lender in its sole discretion.

              


      

       

      
        	
                8.

              	
                Satisfactory,
      in the opinion of the Lender, Approved Flag State and classification
      society records as the Lender may request in respect of the Relevant
      Ship.

              


      

       

      
        	
                9.

              	
                Evidence
      satisfactory to the Lender that there has been no material adverse change
      in the financial condition of any Borrower or the Corporate Guarantor
      which could materially affect the Lender’s agreement to make available the
      Delivery Advance relating to the Relevant
Ship.

              


      

       

      Every
copy document delivered under this Schedule shall be certified as a true and up
to date copy by a director or the secretary (or equivalent officer) of a
Borrower.

       


      
        
           


        

        
          60

          
            

          

        

        
           


        

      


      


      SCHEDULE
3

       

      AMOUNT
OF EACH INSTALMENT UNDER EACH SHIPBUILDING CONTRACT

       

      


      


      


      
        	 
      	 	
                Hull
      2189

                
                

              	 	 	
                Hull
      2190

                
                

              	 
	
                First
      Instalment

                (already
      paid)

                 

              	 	$	4,423,500	 	 	$	4,423,500	 
	
                Second
      Instalment

                (six
      months after Contract signing)

                 

              	 	$	4,423,500	 	 	$	4,423,500	 
	
                Third
      Instalment

                (on
      steel cutting)

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Fourth
      Instalment

                (on
      keel-laying)

                 

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Fifth
      Instalment

                (on
      launching)

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Delivery
      Instalment

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Total

              	 	$	44,235,000	 	 	$	44,235,000	 


      

      


      


      


      


      


      


      


      


      


      



      
        
           


        

        
          61

          
            

          

        

        
           


        

      


      SCHEDULE
4

      


      MANDATORY
COSTS

      


      
        	
                1.

              	
                Mandatory
      Costs are an addition to the interest rate to compensate the Lender for
      the cost of compliance with (a) the requirements of the Bank of England
      and/or the Financial Services Authority (or, in either case, any other
      authority which replaces all or any of its functions) or (b) the
      requirements of the European Central
Bank.

              


      

      


      
        	
                2.

              	
                On
      the first day of each Interest Period (or as soon as possible thereafter)
      the Lender shall calculate, as a percentage rate, a rate (the “Additional
      Cost Rate”) in accordance with the paragraphs set out
    below.

              


      

      


      
        	
                3.

              	
                If
      the Lender is lending from an office in a Participating Member State, the
      Additional Cost Rate will be the percentage certified by the Lender to be
      its reasonable determination of the cost of complying with the minimum
      reserve requirements of the European Central Bank in respect of loans made
      from that office.

              


      

      


      
        	
                4.

              	
                If
      the Lender is lending from an office in the United Kingdom the Additional
      Cost Rate will be calculated by the Lender as
  follows:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                if
      the Loan is denominated in pounds
sterling:

              


      

      


      
        	 
      	
                AB
      + C ( B - D) + E x 0.01

              	
                    
      per cent. per annum

              
	 
      	
                100
      - (A + C)

              


      

      


      
        	
                 
      

              	
                (b)

              	
                if
      the Loan is denominated in any currency other than pounds
      sterling:

              


      

      


      
        	 
      	
                E
      x 0.01

              	
                    
      per cent. per annum

              
	 
      	
                300

              


      

      


      Where:

      


      
        	
                 
      

              	
                A

              	
                is
      the percentage of Eligible Liabilities (assuming these to be in excess of
      any stated minimum) which the Lender is from time to time required to
      maintain as an interest free cash ratio deposit with the Bank of England
      to comply with cash ratio
requirements.

              


      

      


      
        	
                 
      

              	
                B

              	
                is
      the percentage rate of interest (excluding the applicable Margin and the
      Mandatory Costs and any additional rate of interest specified in Clause 6)
      payable for the relevant Interest Period on the
  Loan.

              


      

      


      
        	
                 
      

              	
                C

              	
                is
      the percentage (if any) of Eligible Liabilities which the Lender is
      required from time to time to maintain as interest bearing Special
      Deposits with the Bank of England.

              


      

      


      
        	
                 
      

              	
                D

              	
                is
      the percentage rate per annum payable by the Bank of England to the Lender
      on interest bearing Special
Deposits.

              


      

      


      
        	
                 
      

              	
                E

              	
                is
      designed to compensate the Lender for amounts payable under the Fees Rules
      and is calculated by the Lender as being the average of the Fee Tariffs
      applicable to the Lender for that financial year and expressed in pounds
      per £1,000,000 of the Tariff Base of the
Lender.

              


      


      
        
           


        

        
          62

          
            

          

        

        
           


        

      


      


      
        	
                5.

              	
                For
      the purposes of this Schedule:

              


      

      


      
        	
                 
      

              	
                (a)

              	
                “Eligible Liabilities”
      and “Special
      Deposits” have the meanings given to them from time to time under
      or pursuant to the Bank of England Act 1998 or (as may be appropriate) by
      the Bank of England;

              


      

      


      
        	
                 
      

              	
                (b)

              	
                “Fees Rules” means the
      rules on periodic fees contained in the FSA Supervision Manual or such
      other law or regulation as may be in force from time to time in respect of
      the payment of fees fro the acceptance of
  deposits;

              


      

      


      
        	
                 
      

              	
                (c)

              	
                “Fee Tariffs” means the
      fee tariffs specified in the Fees Rules under the activity group A.1
      Deposit acceptors (ignoring any minimum fee or zero rated fee required
      pursuant to the Fees Rules but taking into account any applicable discount
      rate); and

              


      

      


      
        	
                 
      

              	
                (d)

              	
                “Tariff Base” has the
      meaning given to it in, and will be calculated in accordance with, the
      Fees Rules.

              


      

      


      
        	
                6.

              	
                In
      application of the above formulae, A, B, C and D will be included in the
      formulae as percentages (i.e. 5 per cent. will be included in the formula
      as 5 and not as 0.05). A negative result obtained by subtracting D from B
      shall be taken as zero. The resulting figures shall be rounded to four
      decimal places.

              


      

      


      
        	
                7.

              	
                Any
      determination by the Lender pursuant to this Schedule in relation to a
      formula, the Mandatory Costs, an Additional Cost Rate or any amount
      payable to the Lender shall, in the absence of manifest error, be
      conclusive and binding on the Lender and the
  Borrowers.

              


      

      


      
        	
                8.

              	
                The
      Lender may from time to time, after consultation with the Borrowers,
      determine any amendments which are required to be made to this Schedule in
      order to comply with any change in law, regulation or any requirements
      from time to time imposed by the Bank of England, the Financial Services
      Authority or the European Central Bank (or, in any case, any other
      authority which replaces all or any of its functions) and any such
      determination shall, in the absence of manifest error, be conclusive and
      binding on the Lender and the
Borrowers.

              


      

      


      


      



      
        
           


        

        
          63

          
            

          

        

        
           


        

      


      EXECUTION
PAGE

       

      


      
        	
                BORROWERS

              	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                TYLER
      NAVIGATION INC.

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                PASEDENA
      NAVIGATION INC.

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                LENDER

              	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                THE
      GOVERNOR AND

              	
                )

              	 
      
	
                COMPANY
      OF THE BANK

              	
                )

              	 
      
	
                OF
      SCOTLAND

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

              	 
      


      

      


      


      


      SK
23286 0002 889270


      
        
           


        

        
          64