Private
      & ConfidentialDated 2007SAKONNET SHIPPING
      LTD.                                                                                   (1)
                as
      Borrower
                
                
                THE BANK OF NOVA SCOTIA ASIA
      LIMITED                                                                                                                 (2)
                as
      BankLOAN AGREEMENT
                for
      a loan facility of up to
                US$27,300,000
      to part finance the acquisition of m.v. “SAKONNET”




Contents




Clause Page






1         Purpose and definitions [INSERT PAGE NUMBER]




2         The Commitment and the
Loan [INSERT PAGE
NUMBER]




3         Interest and Interest
Periods [INSERT PAGE
NUMBER]




4         Repayment and prepayment [INSERT PAGE NUMBER]




5         Fees and expenses [INSERT PAGE NUMBER]




6         Payments and taxes; accounts and
calculations [INSERT PAGE
NUMBER]




7         Representations and
warranties [INSERT PAGE
NUMBER]




8         Undertakings [INSERT PAGE NUMBER]




9         Conditions [INSERT PAGE NUMBER]




10         Events of Default [INSERT PAGE NUMBER]




11         Indemnities [INSERT PAGE NUMBER]




12         Unlawfulness and increased
costs [INSERT PAGE
NUMBER]




13         Security and set-off [INSERT PAGE NUMBER]




14         Accounts [INSERT PAGE NUMBER]




15         Assignment, transfer and lending
office [INSERT PAGE
NUMBER]




16         Notices and other
matters [INSERT PAGE
NUMBER]




17         Governing law and
jurisdiction [INSERT PAGE
NUMBER]




Schedule 1
Form of Drawdown Notice [INSERT PAGE
NUMBER]




Schedule 2
Documents and evidence required as conditions precedent[INSERT PAGE NUMBER]




Schedule 3
Form of Mortgage [INSERT PAGE
NUMBER]




Schedule 4
Form of Deed of Covenant [INSERT PAGE
NUMBER]




Schedule 5
Form of Accounts Charge [INSERT PAGE
NUMBER]




Schedule 6
Form of Corporate Guarantee [INSERT
PAGE NUMBER]




Schedule 7
Form of Charter Assignment [INSERT PAGE
NUMBER]








SIN-#284801-v6


THIS AGREEMENT is
dated                                                                                                2007
and made BETWEEN:




(1)
            SAKONNET SHIPPING LTD.
      as Borrower; and




(2)
            THE BANK OF NOVA SCOTIA ASIA
      LIMITEDas Bank.




IT IS AGREED as
follows:




1
            Purpose
      and definitions




1.1
            Purpose




This
Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrower a loan of up to US$27,300,000 to be
used to part-finance the acquisition cost of the purchase of m.v. “SAKONNET”.




1.2
            Definitions




In this
Agreement, unless the context otherwise requires:




“Account Bank” means The Bank
of Nova Scotia, London Branch of Scotia House, 33 Finsbury Square, London EC2A
1BB of and includes its successors in title;




“Accounts Charge” means the
charge executed or (as the context may require) to be executed by the Borrower
in favour of the Bank in respect of the Earnings Account in the form set out in
schedule Schedule 5;




“Approved Insurer” means such
insurance company or underwriter or insurer as may be appointed by or on behalf
of the Borrower which shall be acceptable to the Bank with whom the Insurances
(other than Insurances to be taken out with the P&I Club) shall be from time
to time taken out in respect of the Ship;




“Approved Manager” means either
B+H Management Ltd., Bermuda or B+H Equimar Singapore Pte Ltd., Singapore or
such other person appointed as commercial and/or technical manager of the Ship
with the prior written consent of the Bank (such consent not to be unreasonably
withheld or delayed);




“Assignee” has the meaning
ascribed thereto in clause 15.3;




“Audited Financial Statements”
means the annual audited consolidated and non-consolidated financial statements
of the Corporate Guarantor in the English language and comprising a statement of
income, balance sheet and cash flow statement audited by the auditors of the
Corporate Guarantor;




“Bank” means The Bank of Nova
Scotia Asia Limited of 1 Raffles Quay, #20-01 North Tower, One Raffles Quay,
Singapore 048583 (or of such other address as may last have been notified to the
Borrower pursuant to clause 15.6)
and includes its successors in title and assignees and transferees;




“Banking Day” means a day
(other than a Saturday or Sunday) on which dealings in deposits in Dollars are
carried on in the London Interbank Eurocurrency Market and on which banks are
open for general business in London, New York City and Singapore);




“Borrowed Money” means
Indebtedness in respect of (i) money borrowed or raised and debit balances at
banks, (ii) any bond, note, loan stock, debenture or similar debt instrument,
(iii) acceptance credit facilities, (iv) receivables sold or discounted
(otherwise than on a non-recourse basis), (v) deferred payments for assets or
services acquired, (vi) finance leases and hire purchase contracts, (vii) swaps,
forward exchange contracts, futures and other derivatives, (viii) any other
transaction (including without limitation forward sale or purchase agreements)
having the commercial effect of a borrowing or raising of money or of any of
(ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person
falling within any of (i) to (viii) above;




“Borrower” means Sakonnet
Shipping Ltd of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands MH96960 and includes its successors in title;




“Borrower’s Group” means the
Borrower and its Related Companies;




“Charter” means the “Shelltime
4 Form” time charter dated 12 October 2005 entered into between the Borrower and
the Charterer as novated by the Novation Agreement;




“Charter Guarantee” means the
guarantee dated as of 3 March 2006 executed by the Charter Guarantor in favour
of the Owner;




“Charter Guarantor” means
Sempra Energy of 101 Ash Street, San Diego, CA 92101, United States of America
and includes its successors in title;




“Charterer” means TTMI SARL of
15/17 Rue du Chartier, CH-1211, Geneva 1, Switzerland and includes its
successors in title and assignees;




“Charter Assignment” means the
specific assignment of the Charter and the Charter Guarantee contained therein
executed or (as the context may require) to be executed by the Borrower in
favour of the Bank in the form set out in schedule 7;




“Classification” means the
classification DNV + 1A1 Bulk Carrier or Tanker for Oil ESP HC-EA EO NAUTICUS
(Operation) cow inert pst ib (+) ERS with the Classification Society or such
other classification as the Bank shall, at the request of the Borrower, have
agreed in writing shall be treated as the Classification for the purposes of the
Security Documents;




“Classification Society” means
Det Norske Veritas or such other classification society which the Bank shall, at
the request of the Borrower, have agreed in writing shall be treated as the
Classification Society for the purposes of the Security Documents;




“Commitment” means the amount
which the Bank has agreed to lend to the Borrower under clause 2.1 as reduced by any relevant term of this
Agreement;




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




“Contract” means the memorandum
of agreement dated 15 March 2006 between the Seller and the Borrower relating to
the purchase by the Borrower of the Ship;




“Contract Price” means the
purchase price payable by the Borrower to the Seller in accordance with the
Contract, being thirty six million four hundred thousand Dollars
(US$36,400,000);




“Corporate Guarantee” means the
guarantee issued or (as the context may require) to be issued by the Corporate
Guarantor in favour of the Bank in the form set out in
schedule 6;




“Corporate Guarantor” means B+H
Ocean Carriers Ltd of 80 Broad Street, Monrovia, Liberia and includes its
successors in title;




“Deed of Covenant” means the
deed of covenant collateral to the Mortgage executed or (as the context may
require) to be executed by the Borrower in favour of the Bank in the form set
out in schedule 4;




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




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




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




“Drawdown Date” means the date,
being a Banking Day falling not later than the Termination Date, on which the
Loan is, or is to be, drawn down;




“Drawdown Notice” means a
notice substantially in the terms of schedule 1;




“Earnings” means all moneys
whatsoever from time to time due or payable to the Borrower during the Security
Period arising out of the use or operation of the Ship including (but not
limited to) amounts payable under any charter and all freight, hire and passage
moneys, income arising under pooling arrangements, compensation payable to the
Borrower in the event of requisition of the 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 the Ship and any sums recoverable under any loss
of earnings insurance;




“Earnings Account” means an
interest bearing Dollar account of the Borrower opened or (as the context may
require) to be opened by the Borrower with the Account Bank designated “Sakonnet Shipping Ltd.” and
with account number AN 17260000 and includes any other account designated in
writing by the Bank to be an Earnings Account for the purposes of this
Agreement;




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




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




“Environmental Approval” means
any consent, authorisation, licence or approval of any Government Entity
applicable to the Ship or its operation or the carriage of cargo and/or
passengers thereon and/or the provision of goods and/or services on or from the
Ship required under any Environmental Law;




“Environmental Claim”
means:




(a)
            any
      and all enforcement, clean-up, removal or other governmental or regulatory
      action or order or claim instituted or made pursuant to any Environmental
      Law or resulting from a Spill; or




(b)
            any
      claim made by any other person relating to a
  Spill;




“Environmental Incident” means
any Spill:




(a)
            from
      any Fleet Vessel; or




(b)
            from
      any other vessel in circumstances
where:




(i)
            any
      Fleet Vessel or its owner, operator or manager may be liable for
      Environmental Claims arising from the Spill (other than Environmental
      Claims arising and fully satisfied before the date of this Agreement);
      and/or




(ii)
            any
      Fleet Vessel may be arrested or attached in connection with any such
      Environmental Claims;




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




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




“Facility Amount” means an
amount equal to the lower of:




(a)
            US$27,300,000;
      and




(b)
            seventy
      five per cent (75%) of the lower of (i) the market value of the Ship (as
      determined in accordance with clause 8.2.2), such valuation to be
      determined not more than sixty (60) days before the Drawdown Date and (ii)
      the Contract Price;




“Flag State” means the
Commonwealth of the Bahamas or such other state or territory designated in
writing by the Bank, at the request of the Borrower, as being the “Flag State”
of the Ship for the purposes of the Security Documents;




“Fleet Vessel” means the Ship
and any other vessel owned, operated, managed or crewed by any member of the
Borrower’s Group;




“GAAP” means generally accepted
international accounting standards and principles, consistently
applied;




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




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




“Insurances” means (a) all
policies and contracts of insurance and all entries in a P&I Club or (if
applicable) war risks association which are from time to time during the
Security Period in place or taken out or entered into by or for the benefit of
the Borrower (whether in the sole name of the Borrower or in the joint names of
the Borrower and any other person) and (b) all benefits thereof (including
claims of whatsoever nature and return of premiums);




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




“Interest Period” means each
period for the calculation of interest in respect of the Loan ascertained in
accordance with clauses 3.2 and 3.3;




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




“ISPS Code” means the
International Ship and Port Facility Security Code adapted by the International
Maritime Organisation as the same may have been or may be amended, supplemented
or replaced from time to time;




“LIBOR” means, in relation to a
particular period, the rate for deposits of Dollars for a period equivalent to
such period at or about 11 a.m. on the second Banking Day before the first day
of such period displayed on Telerate page 3750 (British Bankers’ Association
Interest Settlement Rates) (or such other page as may replace such page 3750 on
such system or on any other system of the information vendor for the time being
designated by the British Bankers’ Association to calculate the BBA Interest
Settlement Rate (as defined in the British Bankers’ Association’s Recommended
Terms and Conditions (“BBAIRS” terms” dated August, 1985)), provided that if on
such date no such rate is so displayed, LIBOR for such period shall be the rate
determined by the Bank to be that at which deposits in Dollars and in an amount
approximately equal to the amount in which LIBOR is to be determined for a
period equivalent to such period were being offered by the Bank to prime banks
in the London Interbank Market at or about 11 a.m. (London time) on the second
Banking Day before the first day of such period;




“Loan” means the principal
amount borrowed by the Borrower on the Drawdown Date or (as the context may
require) the principal amount owing to the Bank under this Agreement at any
relevant time;




“Margin” means zero point eight
seven five per cent (0.875%) per annum;




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




“Mortgage” means the first
priority statutory mortgage of the Ship executed or (as the context may require)
to be executed by the Borrower in favour of the Bank in the form set out in
schedule 3;




“Novation Agreement” means the
deed of novation dated 13 March 2006 between the Seller, the Borrower and the
Charterer;




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




“P&I Club” means any
protection and indemnity association or club which is a member of the
International Group of Protection and Indemnity Associations or such insurance
company in each case being acceptable to the Bank in which the Ship shall be
entered and shall continue to be entered in the name of the Borrower and with
which the Ship shall be insured and shall continue to be insured;




“Permitted Encumbrance” means
any Encumbrance in favour of the Bank created pursuant to the Security Documents
and Permitted Liens;




“Permitted Liens” means any
lien on the Ship for master’s, officer’s or crew’s wages outstanding in the
ordinary course of trading, any lien for salvage and any ship repairer’s or
outfitter’s possessory lien for a sum not (except with the prior written consent
of the Bank) exceeding the Casualty Amount (as defined in the Deed of
Covenant);




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




“Registry” means the London
office of the Bahamas Maritime Authority or such other maritime registry in such
other place as the Bank may in its sole discretion agree;




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




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




“Repayment Dates” means,
subject to clause 6.3, each of the
dates falling at three (3) monthly intervals after the Drawdown Date up to and
including the date falling ninety six (96) months after the Drawdown
Date;




“Security Documents” means this
Agreement, the Mortgage, the Deed of Covenant, the Account Charge, the Charter
Assignment and the Corporate Guarantee, and any other documents as may have been
or shall from time to time after the date of this Agreement be executed to
guarantee and/or secure all or any part of the Loan, interest thereon and other
moneys from time to time owing by the Borrower pursuant to this Agreement
(whether or not any such document also secures moneys from time to time owing
pursuant to any other document or agreement);




“Security Party” means the
Borrower and the Corporate Guarantor or any other person who may at any time be
a party to any of the Security Documents (other than the Bank and the Account
Bank);




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




“Security Requirement” means
the amount in Dollars (as certified by the Bank whose certificate shall, in the
absence of manifest error, be conclusive and binding on the Borrower and the
Bank) which is at any relevant time; whilst the Ship is chartered to the
Charterer, one hundred and ten per cent (110%) of the Loan and (ii) at all other
times, one hundred and twenty per cent (120%) of the Loan;




“Security Value” means the
amount in Dollars (as certified by the Bank whose certificate shall, in the
absence of manifest error, be conclusive and binding on the Borrower and the
Bank) which, at any relevant time, is the aggregate of (i) the market value of
the Ship as most recently determined in accordance with clause 8.2.2 and (ii) the market value of any
additional security for the time being actually provided to the Bank pursuant to
clause 8.2;




“Seller” means Sibodouze AS,
c/o Tschudi Shipping Company AS, Strandvn. 50, 1325 Lysaker,
Norway;




“Ship” means the 83,000 dwt
ore/bulk/oil vessel “SAKONNET” registered in the
ownership of the Borrower through the Registry under the laws and flag of the
Flag State under IMO Number 9036507;




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




“Spill” means any actual or
threatened emission, spill, release or discharge of a Pollutant into the
environment;




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




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




“Termination Date” means 31
January 2007 or such later date as the Bank may in its absolute discretion agree
in writing;




“Total Loss”
means:




(a)
            actual,
      constructive, compromised or arranged total loss of the Ship;
      or




(b)
            the
      Compulsory Acquisition of the Ship;
or




(c)
            the
      hijacking, theft, condemnation, capture, seizure, arrest, detention or
      confiscation of the Ship (other than where the same amounts to the
      Compulsory Acquisition of the Ship) by any Government Entity, or by
      persons acting or purporting to act on behalf of any Government Entity,
      unless the Ship be released and restored to the Borrower from such
      hijacking, theft, condemnation, capture, seizure, arrest, detention or
      confiscation within thirty (30) days after the occurrence
      thereof;




“Transferee” has the meaning
ascribed thereto in clause 15.4;




“Unaudited Financial
Statements” means quarterly unaudited, unconsolidated and consolidated
financial statements of the Borrower and the Corporate Guarantor, in the English
language and comprising of a statement of income and a consolidated balance
sheet; and




“Underlying Documents” means,
collectively, the Contract, the Charter, the Charter Guarantee and the Novation
Agreement;




1.3
            Headings




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




1.4
            Construction
      of certain terms




In this
Agreement, unless the context otherwise requires:




1.4.1
            references
      to clauses and schedules are to be construed as references to
      clauses of, and schedules to, this Agreement and references to
      this Agreement include its
schedules;




1.4.2
            references
      to (or to any specified provision of) this Agreement or any other document
      shall be construed as references to this Agreement, that provision or that
      document as in force for the time being and as amended in accordance with
      terms thereof, or, as the case may be, with the agreement of the relevant
      parties;




1.4.3
            references
      to a “regulation”
      include any present or future regulation, rule, directive, requirement,
      request or guideline (whether or not having the force of law) of any
      agency,  authority, central bank or government department or any
      self-regulatory or other national or supra-national
    authority;




1.4.4
            words
      importing the plural shall include the singular and vice
      versa;




1.4.5
            references
      to a time of day are to Singapore
time;




1.4.6
            references
      to a person shall be construed as references to an individual, firm,
      company, corporation, unincorporated body of persons or any Government
      Entity and shall include its successors in title, permitted assignees and
      transferees;




1.4.7
            references
      to a “guarantee”
      include references to an indemnity or other assurance against financial
      loss including, without limitation, an obligation to purchase assets or
      services as a consequence of a default by any other person to pay any
      Indebtedness and “guaranteed” shall be construed accordingly;
      and




1.4.8
            references
      to any enactment shall be deemed to include references to such enactment
      as re-enacted, amended or extended.




1.5
            Insurance
      Terms




In
clause 8.5.1:




1.5.1
            “excess risks” means the
      proportion (if any) of claims for general average, salvage and salvage
      charges and under the ordinary collision clause not recoverable in
      consequence of the value at which the Ship is assessed for the purpose of
      such claims exceeding her insured
value;




1.5.2
            “protection and indemnity
      risks” means the usual risks (including oil pollution and freight,
      demurrage and defence cover) covered by a United Kingdom protection and
      indemnity association or a protection and indemnity association which is
      managed in London (including, without limitation, 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 reasons
      of the incorporation in such policies of clause 8 of the Institute
      Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down
      Clause (1/10/71) or any equivalent provision);
  and




1.5.3
            “war risks” includes
      those risks covered by the standard form of English marine policy with
      Institute War and Strikes Clauses Hulls - Time (1/11/95) attached or
      similar cover.




1.6
            Agreed
      Forms




In this
Agreement or any of the other Security Documents, any document expressed to be
“in the agreed form” means a document in a form agreed by (and for the purpose
of identification initialled by or on behalf of) the Borrower and the
Bank.




1.7
            Contracts
      (Rights of Third Parties Act) 1999




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




2
            The
      Commitment and the Loan




2.1
            Agreement
      to lend




The Bank,
relying upon each of the representations and warranties in clause 7, agrees to lend to the Borrower upon and
subject to the terms of this Agreement the principal sum equal to the Facility
Amount.




2.2
            Drawdown




Subject
to the terms and conditions of this Agreement, the Loan shall be advanced in
full in one amount on the Drawdown Date following receipt by the Bank from the
Borrower of a Drawdown Notice not later than 10:00 a.m. on the third Banking Day
before the proposed Drawdown Date.  A Drawdown Notice shall be
effective on actual receipt by the Bank and, once given, shall, subject as
provided in clause 3.6.1, be
irrevocable.




2.3
            Amount




The
principal amount specified in the Drawdown Notice for borrowing on the Drawdown
Date shall, subject to the terms and conditions of this Agreement, not exceed
the Facility Amount.




2.4
            Availability




Upon
receipt of a Drawdown Notice complying with the terms of this Agreement the Bank
shall, subject to the provisions of clause 9, on the Drawdown Date make the Loan
available to the Borrower in accordance with clause 6.2.  The Borrower acknowledges
that payment of the Loan in accordance with clause 6.2 shall satisfy the obligation of the Bank
to lend the Commitment to the Borrower under this Agreement.




2.5
            Termination
      of Commitment




If the
Loan is not drawn down by the Termination Date, the Commitment shall thereupon
be automatically cancelled.




2.6
            Application
      of Proceeds




Without
prejudice to the Borrower’s obligations under clause 8.1.3, the Bank shall have no responsibility
for the application of proceeds of the Loan by the Borrower.




3
            Interest
      and Interest Periods




3.1
            Normal
      interest rate




The
Borrower shall pay interest on the Loan in respect of each Interest Period
relating thereto on each Interest Payment Date at the rate per annum determined
by the Bank to be the aggregate of (a) the Margin and (b) LIBOR for such
Interest Period.




3.2
            Selection
      of Interest Periods




The
Borrower may by notice received by the Bank not later than 10:00 a.m. on the
fifth Banking Day before the beginning of each Interest Period specify whether
such Interest Period shall have a duration of one (1), two (2) or three (3)
months or such other period as the Borrower may select and the Bank may, in its
absolute discretion, agree.




3.3
            Determination
      of Interest Periods




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




3.3.1
            the
      first Interest Period shall commence on the Drawdown Date and each
      subsequent Interest Period shall commence on the last day of the previous
      Interest Period;




3.3.2
            if
      any Interest Period would otherwise overrun a Repayment Date, then, in the
      case of the last Repayment Date, such Interest Period shall end on such
      Repayment Date, and in the case of any other Repayment Date or Repayment
      Dates the Loan shall be divided into parts so that there is one part in
      the amount of the repayment instalment due on each Repayment Date falling
      during that Interest Period and having an Interest Period ending on the
      relevant Repayment Date and another part in the amount of the balance of
      the Loan having an Interest Period ascertained in accordance with
      clause 3.2 and the other
      provisions of this clause 3.3;
      and




3.3.3
            if
      the Borrower fails to specify the duration of an Interest Period in
      accordance with the provisions of clause 3.2 and this clause 3.3 such Interest Period shall have a
      duration of three (3) months or such other period as shall comply with
      this clause 3.3.




3.4
            Default
      interest




If the
Borrower fails to pay any sum (including, without limitation, any sum payable
pursuant to this clause 3.4) on its
due date for payment under any of the Security Documents, the Borrower shall pay
interest on such sum on demand from the due date up to the date of actual
payment (as well after as before judgment) at a rate determined by the Bank
pursuant to this clause 3.4.




The
period beginning on such due date and ending on such date of payment shall be
divided into successive periods of not more than three months as selected by the
Bank each of which (other than the first, which shall commence on such due date)
shall commence on the last day of the preceding such period.




The rate
of interest applicable to each such period shall be the aggregate (as determined
by the Bank) of (a) two per cent per annum, (b) the Margin and (c) LIBOR for
such period.  Such interest shall be due and payable on the last day
of each such period as determined by the Bank and each such day shall, for the
purposes of this Agreement, be treated as an Interest Payment Date, provided
that if such unpaid sum is an amount of principal which became due and payable,
by reason of a declaration by the Bank under clause 10.2.2 or a prepayment pursuant to
clauses 4.2, 4.3, 8.2 or 12.1, on a date other than an Interest
Payment Date relating thereto, the first such period selected by the Bank shall
be of a duration equal to the period between the due date of such principal sum
and such Interest Payment Date and interest shall be payable on such principal
sum during such period at a rate two per cent above the rate applicable thereto
immediately before it shall have become so due and payable.




If, for
the reasons specified in clause 3.6.1, the Bank is unable to determine a
rate in accordance with the foregoing provisions of this clause 3.4, interest on any sum not paid on its due
date for payment shall be calculated at a rate determined by the Bank to be two
per cent per annum above the aggregate of the Margin and the cost of funds to
the Bank.




3.5
            Notification
      of Interest Periods and interest
rate




The Bank
shall notify the Borrower promptly of the duration of each Interest Period and
of each rate of interest determined by it under this clause 3.




3.6
            Market
      disruption; non-availability




3.6.1
            If
      and whenever, at any time prior to the commencement of any Interest Period
      the Bank shall have determined (which determination shall, in the absence
      of manifest error, be conclusive) that adequate and fair means do not
      exist for ascertaining LIBOR during such Interest Period the Bank shall as
      soon as reasonably practicable give notice (a “Determination Notice”)
      thereof to the Borrower.  A Determination Notice issued pursuant
      to this clause 3.6.1(a) shall contain particulars of the relevant
      circumstances giving rise to its issue and shall certify the effective
      cost to the Bank of maintaining the Loan and the rate of interest payable
      by the Borrower for that Interest Period.  If the cost of
      maintaining the Loan is not acceptable to the Borrower, during the period
      of thirty (30) days following the giving of any Determination Notice, the
      Bank shall negotiate in good faith with the Borrower in order to arrive at
      a mutually acceptable substitute basis for the Bank to continue its
      Commitment on a basis which is substantially the equivalent to that
      provided for in this Agreement and, if within such thirty (30) day period
      the Borrower and the Bank shall agree in writing upon such an alternative
      basis (the “Substitute
      Basis”), the Substitute Basis should be retroactive to and
      effective from the first day of the relevant Interest
    Period.




If the
Borrower and the Bank fail to agree in writing on a Substitute Basis within such
thirty (30) day period, the Borrower shall prepay the Loan on the fifth Banking
Day after expiry of such thirty (30) day period, together with accrued interest
thereon payable to the Bank at the rate certified by the Bank as being a
reasonable interest reflecting the cost to the Bank of funding its Commitment
during the period ending on the date of such prepayment, plus the
Margin.




So long
as any Substitute Basis is in force, the Bank shall from time to time (but at
least monthly) review whether or not the circumstances are such that such
Substitute Basis is no longer necessary and, if the Bank so determines, it shall
notify the Borrower that the Substitute Basis shall cease to be effective from
such date as the Bank shall reasonably specify.




3.6.2
            if
      and whenever, at any time prior to the commencement of any Interest Period
      the Bank shall have determined that deposits in Dollars are not available
      to the Bank in the London Interbank Market in the ordinary course of
      business in sufficient amounts to fund the Loan for such Interest Period,
      the Bank shall as soon as reasonably practicable give notice thereof to
      the Borrower and the Bank’s obligation to fund the Loan shall immediately
      cease.  If in such circumstances the Loan (or any part thereof)
      shall have been drawn down by the Borrower, the Bank shall negotiate in
      good faith with the Borrower with a view to establishing a mutually
      acceptable basis for funding the Loan from an alternative
      source.




If the
Borrower and the Bank fail to agree in writing on an alternative basis for
funding the Loan from an alternative source by 11:00 a.m. (London time) on the
second Banking Day prior to the end of the then current Interest Period, the
Borrower shall (without prejudice to its other obligations under this Agreement
including, without limitation, its obligation to pay accrued interest on the
Loan for the period ending on the expiry of the then current Interest Period)
prepay the Loan (together with such interest) and all other sums then owing to
the Bank, whether actually or contingently, under any of the Security Documents
or the expiry of the then current Interest Period.




4
            Repayment
      and prepayment




4.1
            Repayment




The
Borrower shall repay the Loan by thirty two (32) quarterly instalments, one such
instalment to be repaid on each of the Repayment Dates.  Subject to
the provisions of this Agreement, the amount of (i) each of the first four (4)
instalments shall be eight hundred and twenty five thousand Dollars ($825,000),
(ii) each of the next twelve (12) instalments shall be one million Dollars
($1,000,000) and (iii) the amount of the next sixteen instalments shall be seven
hundred and fifty thousand Dollars ($750,000).  If the Commitment is
not drawn in full, the amount of each repayment instalment shall be reduced
proportionately.




4.2
            Voluntary
      prepayment




The
Borrower may prepay the Loan in whole or in part (being $1,000,000 or any larger
sum which is an integral multiple of $1,000,000):




4.2.1
            on
      any Interest Payment Date relating to the part of the Loan being prepaid
      together with any amounts payable under clause 11 and accrued
      interest to the date of prepayment and any other sums then payable under
      this Agreement and/or the other Security Documents or any of them in
      respect of the Loan; or




4.2.2
            at
      any other time upon payment to the Bank of accrued interest to the date of
      prepayment and such sum as the Bank in its absolute discretion shall
      determine to be the Breakage Costs and any other sums then payable under
      this Agreement and/or the Security Documents or any of
    them.




4.3
            Prepayment
      on Total Loss




On the
Ship becoming a Total Loss or suffering damage or being involved in an incident
which in the opinion of the Bank may result in the Ship being subsequently
determined to be a Total Loss, the obligation of the Bank to advance the Loan
shall immediately cease and the Commitment shall be reduced to
zero.  On the date sixty (60) days after that on which the Ship became
a Total Loss or, if earlier, on the date upon which the insurance proceeds in
respect of such Total Loss are or Requisition Compensation (as defined in the
Deed of Covenant) is received by the Borrower (or the Bank pursuant to the
Security Documents), the Borrower shall prepay the Loan.  For the
purpose of this Agreement, a Total Loss shall be deemed to have
occurred:




4.3.1
            in
      the case of an actual total loss of the Ship on the actual date and at the
      time the Ship was lost or, if such date is not known, on the date on which
      the Ship was last reported;




4.3.2
            in
      the case of a constructive total loss of the Ship, upon the date and at
      the time notice of abandonment of the Ship is given to the insurers of the
      Ship for the time being (provided a claim for total loss is admitted by
      such insurers) or, if such insurers do not forthwith admit such a claim,
      at the date and at the time at which either a total loss is subsequently
      admitted by the insurers or a total loss is subsequently adjudged by a
      competent court of law or arbitration tribunal to have
      occurred;




4.3.3
            in
      the case of a compromised or arranged total loss, on the date upon which a
      binding agreement as to such compromised or arranged total loss has been
      entered into by the insurers of the
Ship;




4.3.4
            in
      the case of Compulsory Acquisition, on the date upon which the relevant
      requisition of title or other compulsory acquisition occurs;
      and




4.3.5
            in
      the case of hijacking, theft, condemnation, capture, seizure, arrest,
      detention or confiscation of the Ship (other than where the same amounts
      to Compulsory Acquisition of the Ship) by any Government Entity, or by
      persons purporting to act on behalf of any Government Entity, which
      deprives the Borrower of the use of the Ship for more than thirty (30)
      days, upon the expiry of the period of thirty days after the date upon
      which the relevant hijacking, theft, condemnation, capture, seizure,
      arrest, detention or confiscation
occurred.




4.4
            Amounts
      payable on prepayment




Any
prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date of
such prepayment, (b) any additional amount payable under clause 6.6 or 12.2 and (c) all others sums payable by the
Borrower to the Bank under this Agreement or any of the other Security Documents
including, without limitation, any amounts payable under clause 11.




4.5
            Notice
      of prepayment; reduction of repayment
  instalments




No
prepayment may be effected under clause 4.2 unless the Borrower shall have given
the Bank at least thirty (30) days’ notice of its intention to make such
prepayment.  Every notice of prepayment shall be effective only on
actual receipt by the Bank, shall be irrevocable, shall specify the amount to be
prepaid and shall oblige the Borrower to make such prepayment on the date
specified.  No amount prepaid may be reborrowed and any amount prepaid
pursuant to clause 4.2 or
clause 8.2.1 shall be applied in
reducing the repayment instalments under clause 4.1 in inverse order of their due dates for
payment.  The Borrower may not prepay the Loan or any part thereof
save as expressly provided in this Agreement.




5
            Fees
      and expenses




5.1
            Fees




5.1.1
            The
      Borrower shall pay to the Bank on the date of this Agreement a fee in the
      amount of zero point three five per cent (0.35%) of the Facility
      Amount;




5.1.2
            The
      fee referred to in clause 5.1.1 shall be payable by the Borrower
      to the Bank whether or not any part of the Commitment is ever
      advanced.




5.2
            Expenses




The
Borrower shall pay to the Bank on a full indemnity basis on demand all
reasonable expenses (including legal, printing and out-of-pocket expenses)
incurred by the Bank:




5.2.1
            in
      connection with the negotiation, preparation, execution and, where
      relevant, registration of the Security Documents and of any amendment or
      extension of or the granting of any waiver or consent under, any of the
      Security Documents; and




5.2.2
            in
      contemplation of, or otherwise in connection with, the enforcement of, or
      preservation of any rights under, any of the Security Documents, or
      otherwise in respect of the moneys owing under any of the Security
      Documents together with interest at the rate referred to in clause 3.4 from the date on which such
      expenses were incurred to the date of payment (as well after as before
      judgment).




5.3
            Value
      Added Tax




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




5.4
            Stamp
      and other duties




The
Borrower shall pay all stamp, documentary, registration or other like duties or
taxes (including any duties or taxes payable by the Bank) imposed on or in
connection with any of the Underlying Documents, the Security Documents or the
Loan and shall indemnify the Bank against any liability arising by reason of any
delay or omission by the Borrower to pay such duties or taxes.




6
            Payments
      and taxes; accounts and
calculations




6.1
            No
      set-off or counterclaim




The
Borrower acknowledges that in performing its obligations under this Agreement,
the Bank will be incurring liabilities to third parties in relation to the
funding of amounts to the Borrower, such liabilities matching the liabilities of
the Borrower to the Bank and that it is reasonable for the Bank to be entitled
to receive payments from the Borrower gross on the due date in order that the
Bank is put in a position to perform its matching obligations to the relevant
third parties.  Accordingly all payments to be made by the Borrower
under any of the Security Documents shall be made in full, without any set-off
or counterclaim whatsoever and, subject as provided in clause 6.6, free and clear of any deductions or
withholdings, in Dollars on the due date to the account of the Bank at The Bank
of Nova Scotia, Singapore Branch (Account No.: 06020-35 via CHIPS UID 089795)
with the Bank of Nova Scotia, New York Agency in favour of The Bank of Nova
Scotia Asia Limited or to such other account at such other bank in such place as
the Bank may from time to time specify for this purpose.




6.2
            Payment
      by the Bank




All sums
to be advanced by the Bank to the Borrower under this Agreement in respect of
the Loan shall be remitted in Dollars on the Drawdown Date to the account of
specified in the Drawdown Notice.




6.3
            Non-Banking
      Days




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




6.4
            Calculations




All
interest and other payments of an annual nature under any of the Security
Documents shall accrue from day to day and be calculated on the basis of actual
days elapsed and a 360 day year.




6.5
            Certificates
      conclusive




Any
certificate or determination of the Bank as to any rate of interest or any other
amount pursuant to and for the purposes of any of the Security Documents shall,
in the absence of manifest error, be conclusive and binding on the
Borrower.




6.6
            Grossing-up
      for Taxes




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




6.7
            Loan
      account




The Bank
shall maintain, in accordance with its usual practice, an account evidencing the
amounts from time to time lent by, owing to and paid to it under the Security
Documents.  Such account shall, in the absence of manifest error, be
conclusive as to the amount from time to time owing by the Borrower under the
Security Documents.




7
            Representations
      and warranties




7.1
            Continuing
      representations and warranties




The
Borrower represents and warrants to the Bank that:




7.1.1
            Due
      incorporation




the
Borrower and each of the other Security Parties are duly incorporated and
validly existing in good standing under the laws of their respective countries
of incorporation as limited liability companies and have power to carry on their
respective businesses as they are now being conducted and to own their
respective property and other assets;




7.1.2
            Corporate
      power




the
Borrower has power to execute, deliver and perform its obligations under the
Contract, the Charter, the Novation Agreement and the Security Documents to
which it is a party and to borrow the Commitment and each of the other Security
Parties has power to execute and deliver and perform its obligations under the
Security Documents to which it is or is to be a party; all necessary corporate,
shareholder and other action has been taken to authorise the execution, delivery
and performance of the same and no limitation on the powers of the Borrower to
borrow will be exceeded as a result of borrowing the Loan;




7.1.3
            Binding
      obligations




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




7.1.4
            No
      conflict with other obligations




the
execution and delivery of, the performance of its obligations under, and
compliance with the provisions of the Contract, the Charter, the Novation
Agreement and the Security Documents by the relevant Security Parties will
not:




(a)
            contravene
      any existing applicable law, statute, rule or regulation or any judgment,
      decree or permit to which the Borrower or any other Security Party is
      subject;




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




(c)
            contravene
      or conflict with any provision of the memorandum and articles of
      association or other constitutional documents of the Borrower or any other
      Security Party; or




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




7.1.5
            No
      litigation




no
litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Borrower, threatened against the
Borrower or any of its Related Companies or any other Security Party which could
have a material adverse effect on the business, assets or financial condition of
the Borrower or any of its Related Companies or any other Security
Party;




7.1.6
            No
      filings required




save for
the registration of the Mortgage at the Registry, it is not necessary to ensure
the legality, validity, enforceability or admissibility in evidence of the
Contract, the Charter, the Novation Agreement or any of the Security Documents
that they or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Relevant Jurisdiction
or that any stamp, registration or similar tax or charge be paid in any Relevant
Jurisdiction on or in relation to the Contract, the Charter, the Novation
Agreement or the Security Documents and each of the Contract, the Charter, the
Novation Agreement and the Security Documents is in proper form for its
enforcement in the courts of each Relevant Jurisdiction;




7.1.7
            Choice
      of law




the
choice of English law to govern the Security Documents (other than the Mortgage)
and the choice of Bahamas law to govern the Mortgage and the submissions by the
Security Parties to the non-exclusive jurisdiction of the English courts are
valid and binding;




7.1.8
            No
      immunity




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




7.1.9
            Financial
      statements correct and complete




the
Audited Financial Statements in respect of the financial year ended on 31
December 2005 as delivered to the Bank have been prepared in accordance with
GAAP and present fairly and accurately the financial position of the Borrower
and Corporate Guarantor as at such date and the results of the operations of the
Borrower and Corporate Guarantor for the financial year ended on such date and,
as at such date, neither the Borrower nor the Corporate Guarantor had any
significant liabilities (contingent or otherwise) or any unrealised or
anticipated losses which are not disclosed by, or reserved against or provided
for in, such Audited Financial Statements; and




7.1.10
            Consents
      obtained




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




7.2
            Initial
      representations and warranties




The
Borrower further represents and warrants to the Bank that:




7.2.1
            Pari
      passu




the
obligations of the Borrower under this Agreement are direct, general and
unconditional obligations of the Borrower and rank at least pari passu with all
other present and future unsecured and unsubordinated Indebtedness of the
Borrower;




7.2.2
            No
      default under other Indebtedness




neither
the Borrower nor any other Security Party is (nor would with the giving of
notice or lapse of time or the satisfaction of any other condition or
combination thereof be) in breach of or in default under any agreement relating
to Indebtedness to which it is a party or by which it may be bound;




7.2.3
            Information




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




7.2.4
            No
      withholding Taxes




no Taxes
are imposed by withholding or otherwise on any payment to be made by any
Security Party under the Contract, the Charter, the Charter Guarantee or the
Security Documents or are imposed on or by virtue of the execution or delivery
by the Security Parties of the Contract, the Charter or the Security Documents
or any other document or instrument to be executed or delivered under any of the
Security Documents;




7.2.5
            No
      Default




no
Default has occurred and is continuing;




7.2.6
            The
      Ship




the Ship
will on the Drawdown Date be:




(a)
            in
      the absolute ownership of the Borrower who will on and after the Drawdown
      Date be the sole, legal and beneficial owner of the
  Ship;




(b)
            registered
      in the name of the Borrower through the Registry as a Ship under the laws
      and flag of the Flag State;




(c)
            operationally
      seaworthy and in every way fit for service;
and




(d)
            classed
      with the Classification free of all requirements and recommendations of
      the Classification Society;




7.2.7
            Ship’s
      employment




save in
respect of the Charter, the Ship will not on or before the Drawdown Date be
subject to any charter or contract or to any agreement to enter into any charter
or contract which, if entered into after the date of the Deed of Covenant would
have required the consent of the Bank and on or before the Drawdown Date there
will not be any agreement or arrangement whereby the Earnings (as defined in the
Deed of Covenant) may be shared with any other person;




7.2.8
            Freedom
      from Encumbrances




neither
the Ship, nor her Earnings, Insurances or Requisition Compensation (each as
defined in the Deed of Covenant) nor the Charter nor the Charter Guarantee nor
the Earnings Account nor any other properties or rights which are, or are to be,
the subject of any of the Security Documents nor any part thereof will be, on
the Drawdown Date, subject to any Encumbrance;




7.2.9
            Environmental
      matters




to the
best of the knowledge and belief of the Borrower and its officers:




(a)
            all
      Environmental Laws applicable to any Fleet Vessel have been complied with
      and all consents, licences and approvals required under such Environmental
      Laws have been obtained and complied with;
and




(b)
            no
      Environmental Claim has been made or threatened or is pending against any
      member of the Borrower’s Group or any Fleet Vessel and not fully
      satisfied; and




(c)
            there
      has been no Environmental Incident;




7.2.10
            No
      material adverse change




there has
been no material adverse change in the financial position of the Borrower or the
Corporate Guarantor from that set forth in the financial statements referred to
in clause 7.1.9;




7.2.11
            Parent
      company




the
Borrower is the wholly owned (directly or indirectly) subsidiary of the
Corporate Guarantor; and




7.2.12
            Copies
      true and complete




the
copies of the Underlying Documents delivered or to be delivered to the Bank
pursuant to clause 9.1, or will when
delivered be, true and complete copies of such documents; each of such documents
constitute valid and binding obligations of the parties thereto enforceable in
accordance with its terms and there will have been no amendments or variations
thereof or defaults thereunder.




7.3
            Repetition
      of representations and warranties




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




7.3.1
            be
      deemed to repeat the representations and warranties in clauses 7.1 (and so that the representation
      and warranty in clause 7.1.9
      shall for this purpose refer to the then latest Audited Financial
      Statements delivered to the Bank under clause 8.1) and 7.2 as if made with reference to the
      facts and circumstances existing on such day;
  and




7.3.2
            be
      deemed to further represent and warrant to the Bank that the then latest
      Audited Financial Statements delivered to the Bank (if any) have been
      prepared in accordance with GAAP which have been consistently applied and
      present fairly and accurately the financial position of the Borrower and
      Corporate Guarantor as at the end of the financial period to which the
      same relate and the results of the operations of the Borrower and
      Corporate Guarantor for the financial period to which the same relate and,
      as at the end of such financial period, neither the Borrower nor the
      Corporate Guarantor had any significant liabilities (contingent or
      otherwise) or any unrealised or anticipated losses which are not disclosed
      by, or reserved against or provided for in, such financial
      statements.




8
            Undertakings




8.1
            General




The
Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under any of the Security Documents and while all
or any part of the Commitment remains outstanding, it will:




8.1.1
            Notice
      of Default




promptly
inform the Bank of any occurrence of which it becomes aware which might
adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents and, without limiting the generality of the
foregoing, will inform the Bank of any Default forthwith upon becoming aware
thereof and will from time to time, if so requested by the Bank, confirm to the
Bank in writing that, save as otherwise stated in such confirmation, no Default
has occurred and is continuing;




8.1.2
            Consents
      and licences




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




8.1.3
            Use
      of proceeds




use the
Loan exclusively for the purpose specified in clause 1.1;




8.1.4
            Pari
      passu




ensure
that its obligations under this Agreement shall, without prejudice to the
provisions of clause 8.3, at all
times rank at least pari passu with all its other present and future unsecured
and unsubordinated Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract;




8.1.5
            Financial
      statements




prepare
Audited Financial Statements of the Borrower and Corporate Guarantor in the
English language in accordance with GAAP consistently applied in respect of each
financial year and cause the same to be reported on by their auditors and
prepare Unaudited Financial Statements of the Corporate Guarantor in respect of
each quarter on the same basis as the annual statements and deliver as many
copies of the same as the Bank may reasonably require as soon as practicable but
not later than one hundred and eighty (180) days (in the case of Audited
Financial Statements) or forty five (45) days (in the case of Unaudited
Financial Statements) after the end of the financial period to which they
relate;




8.1.6
            Delivery
      of reports




deliver
to the Bank as many copies as the Bank may reasonably require of every report,
circular, notice or like document issued by the Borrower to its shareholders or
creditors generally or the financial markets;




8.1.7
            Provision
      of further information




provide
the Bank with such financial and other information concerning the Borrower, the
other Security Parties and their respective affairs as the Bank may from time to
time reasonably require;




8.1.8
            Obligations
      under Security Documents




duly and
punctually perform each of the obligations expressed to be assumed by it under
the Security Documents;




8.1.9
            Classification
      of Ship




ensure
that the Ship will be classed with the Classification of the Classification
Society free of outstanding issues affecting Class or overdue requirements and
recommendations of such Classification Society;




8.1.10
            Compliance
      with ISM Code




procure
that any Operator will comply and ensure that the Ship will comply with the
requirements of the ISM Code, including (but not limited to) the maintenance and
renewal of valid certificates pursuant thereto throughout the Security Period
and will provide the Bank with evidence of compliance when requested by the
Bank;




8.1.11
            Withdrawal
      of DOC and SMC




procure
that any Operator will promptly inform the Bank if there is any threatened or
actual withdrawal of its DOC or the SMC in respect of the Ship;




8.1.12
            Compliance
      with ISPS Code




procure
that the Borrower and/or any Approved Manager shall, at all times after the
Drawdown Date for the Ship:




(a)
            comply
      and be responsible for compliance by itself and by the Ship in all
      material respects with the mandatory provisions of the ISPS
      Code;




(b)
            ensure
      that:




(i)
            the
      Ship has a valid ISSC;




(ii)
            the
      Ship’s security system and its associated security equipment comply in all
      respects with the mandatory provisions of the ISPS
  Code;




(c)
            an
      approved ship security plan is in place;
and




(d)
            immediately
      notify the Bank of any actual or threatened withdrawal, suspension,
      cancellation or modification of the ISSC for the Ship upon becoming aware
      of the same;




8.1.13
            Parent
      Company




ensure
that the Borrower shall at all times remain a wholly owned (direct or indirect)
subsidiary of the Corporate Guarantor; and




8.1.14
            Corporate
      Guarantor




ensure
that the Corporate Guarantor shall at all times remain controlled by Mr Michael
Hudner.




8.2
            Security
      value maintenance




8.2.1
            Security
      shortfall




If at any
time the Security Value shall be less than the Security Requirement, the Bank
may give notice to the Borrower requiring that such deficiency be remedied and
then the Borrower shall (unless the Ship has become a Total Loss)
either:




(a)
            prepay
      within a period of thirty (30) days of the date of receipt by the Borrower
      of the Bank’s said notice such sum in Dollars as will result in the
      Security Requirement after such prepayment (taking into account any other
      repayment of the Loan made between the date of the notice and the date of
      such prepayment) being equal to the Security Value;
  or




(b)
            within
      thirty (30) days of the date of receipt by the Borrower of the Bank’s said
      notice constitute to the satisfaction of the Bank such further security
      for the Loan as shall be acceptable to the Bank having a value for
      security purposes (as determined by the Bank in its absolute discretion)
      at the date upon which such further security shall be constituted which,
      when added to the Security Value, shall not be less than the Security
      Requirement as at such date.




Clause 4.4 shall apply to prepayments under
clause 8.2.1(a).




8.2.2
            Valuation
      of Ship




The Ship
shall, for the purposes of this clause 8.2, be valued in Dollars at yearly
intervals by an independent firm of international shipbrokers nominated by the
Borrower and approved by the Bank or, failing such nomination or approval,
appointed by the Bank in its sole discretion (such valuation to be made without,
unless required by the Bank, physical inspection and on the basis of a sale for
prompt delivery for cash at arms length on normal commercial terms as between a
willing buyer and a willing seller without taking into account the benefit of
any charterparty or other engagement concerning the Ship).  Such
valuation shall constitute the value of the Ship for the purposes of this
clause 8.2.2 unless the Bank objects
to any valuation provided by a shipbroker nominated by the Borrower within
fourteen (14) days of receipt of such valuation in which event, the value of the
Ship shall be the mean of the value specified in such valuation and the value
specified in a valuation issued by an independent firm of international
shipbrokers appointed by the Bank (on the same basis as specified
above).




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




8.2.3
            Information




The
Borrower undertakes to the Bank to supply to the Bank and to any such
shipbrokers such information concerning the Ship and its condition as such
shipbrokers may reasonably require for the purpose of making any such
valuation.




8.2.4
            Costs




All costs
in connection with the Bank obtaining any valuation of the Ship referred to in
clause 8.2.2, and any valuation
either of any additional security for the purposes of ascertaining the Security
Value at any time or necessitated by the Borrower electing to constitute
additional security pursuant to clause 8.2.1(b) shall be borne by the
Borrower.




8.2.5
            Valuation
      of additional security




For the
purpose of this clause 8.2, the
market value of any additional security provided or to be provided to the Bank
shall be determined by the Bank in its absolute discretion without any necessity
for the Bank assigning any reason thereto.




8.2.6
            Documents
      and evidence




In
connection with any additional security provided in accordance with this
clause 8.2, the Bank shall be
entitled to receive such evidence and documents of the kind referred to in schedule 2 as may in the Bank’s
opinion be appropriate and such favourable legal opinions as the Bank shall in
its absolute discretion require.




8.3
            Negative
      undertakings




The
Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under the Security Documents and while all or any
part of the Commitment remains outstanding, it will not, without the prior
written consent of the Bank:




8.3.1
            Negative
      pledge




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




8.3.2
            No
      merger




merge or
de-merge or consolidate with any other person or enter into any form of
reconstruction or reorganisation;




8.3.3
            Disposals




sell,
transfer, abandon, lend or otherwise dispose of or cease to exercise direct
control over any part (being either alone or when aggregated with all other
disposals falling to be taken into account pursuant to this clause 8.3.3 material in the opinion of the Bank in
relation to the combined undertakings, assets, rights and revenues of the
Borrower of its present or future undertaking, assets, rights or revenues
(otherwise than by transfers, sales or disposals for full consideration in the
ordinary course of trading) whether by one or a series of transactions related
or not or agree to sell, transfer, abandon or dispose of a substantial part of
its assets;




8.3.4
            Other
      business




undertake
any business other than the ownership and operation of the Ship and the
chartering of the Ship to the Charterer or make any material change in the
nature of its business or in the manner in which such business is
conducted;




8.3.5
            Acquisitions




acquire
any further assets other than the Ship and rights arising under contracts
entered into by or on behalf of the Borrower in the ordinary course of its
business of owning, operating and chartering the Ship;




8.3.6
            Other
      obligations




incur any
obligations except for obligations arising under the Contract, the Charter, or
the Security Documents or contracts entered into in the ordinary course of its
business of owning, operating and chartering the Ship; or




8.3.7
            No
      borrowing




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




8.3.8
            Repayment
      of borrowings




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




8.3.9
            Guarantees




issue any
guarantees or indemnities or otherwise become directly or contingently liable
for the obligations of any person, firm, or corporation except pursuant to the
Security Documents and except for guarantees or indemnities from time to time
required in the ordinary course by any protection and indemnity or war risks
association with which the Ship is entered, guarantees required to procure the
release of such Ship from any arrest, detention, attachment or levy or
guarantees or undertakings required for the salvage of the Ship; or




8.3.10
            Loans




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




8.3.11
            Sureties




permit
any Indebtedness of the Borrower to any person (other than the Bank) to be
guaranteed by any person (save for guarantees or indemnities from time to time
required in the ordinary course by any protection and indemnity or war risks
association with which the Ship is entered, guarantees required to procure the
release of the Ship from any arrest, detention, attachment or levy or guarantees
or undertakings required for the salvage of the Ship); or




8.3.12
            Share
      capital and distribution




(a)
            purchase
      or otherwise acquire for value any shares of its capital;
    or




(b)
            if
      an Event of Default has occurred, declare or pay any dividends or
      distribute any of its present or future assets, undertakings, rights or
      revenues to any of its shareholders;
or




8.3.13
            Subsidiaries




form or
acquire any Subsidiaries.




8.4
            Financial
      undertakings




8.4.1
            Definitions




For
      the purposes of the financial covenants set out herein, the following
      definitions shall apply:




(a)
            “Cash and Cash
      Equivalents” means, in respect of the Borrower’s Group, and at any
      time:




(i)
            cash
      in hand or on deposits with any acceptable bank available for cash
      management purposes;




(ii)
            investment
      grade certificates or deposit or investment grade marketable debt
      securities, maturing within one (1) year after the relevant date of
      calculation; or




(iii)
            any
      other instrument, security or investment approved by the
    Bank,




in each
case, to which any member of the Borrower’s Group beneficially entitled at that
time and which is capable of being applied against the Total Debt.




(b)
            “EBITDA” means, always in
      accordance with GAAP, the aggregate of operating profits of the Borrower
      or the Corporate Guarantor (on a consolidated basis) for a Measurement
      Period before Taxes, financial items, depreciations and amortisations,
      excluding:




(i)
            the
      profit or loss attributable to any extraordinary or exceptional items or
      any write-offs on investments during that Measurement Period;
      and




(ii)
            the
      profit and loss arising on any disposal of fixed assets during that
      Measurement Period save for any disposals made in the ordinary course of
      business.




(c)
            “Fixed Charges”
      means:




(i)
            Net
      Interest for any Measurement Period,
plus




(ii)
            the
      amount of scheduled repayments of the Loan and/or any other credit
      facilities and the interest and repayment element under capitalised
      charterparties in accordance with GAAP which fall due for repayment or
      payment during the Measurement Period, other than any amount prepaid under
      this Agreement, less free and available cash (at the relevant Quarter
      Date) and marketable securities (acceptable to the Bank) in excess of the
      minimum requirement plus any dividends paid in such Measurement
      Period.




(d)
            “Measurement Period”
      means a rolling period of twelve (12) calendar months ending on a Quarter
      Date.




(e)
            “Quarter Date” means each
      31 March, 30 June, 30 September and 31
December.




(f)
            “Net Interest” means all
      interest, arrangement fees and capitalised commissions and periodic fees
      (whether, in each case, paid or payable) as reported in accordance with
      GAAP being incurred (after having deducted any interest, arrangement fee
      and capitalised income earned) by the Borrower and the Corporate Guarantor
      (on a consolidated basis) during a Measurement
  Period.




(g)
            “Syndicated Facility”
      means, the syndicated reducing revolving credit facility agreement dated
      29 August 2006.




(h)
            “Total Debt” means, on a
      consolidated basis, the aggregate book value of all provisions, other long
      term liabilities and current liabilities of the Borrower and the Corporate
      Guarantor (on a consolidated
basis).




(i)
            “Value Adjusted Equity”
      means Value Adjusted Total Assets less Total
  Debt.




(j)
            “Value Adjusted Equity
      Ratio” means Value Adjusted Equity divided by Value Adjusted Total
      Assets.




(k)
            “Value Adjusted Total
      Assets” means, on a consolidated basis, the total market value of
      all of the assets of the Corporate Guarantor (on a consolidated
      basis).




8.4.2
            Financial
      covenants




(a)
            Minimum
      Value Adjusted Equity Ratio




The
Borrower shall procure that the Corporate Guarantor (on a consolidated basis)
shall at all times during the Security Period maintain a minimum Value Adjusted
Equity Ratio of minimum thirty per cent (30.00%).




(a)
            Minimum
      Value Adjusted Equity




The
Borrower shall procure that the Corporate Guarantor (on a consolidated basis)
shall at all times during the Security Period maintain a minimum Value Adjusted
Equity of fifty million Dollars ($50,000,000).




(b)
            Ratio
      of EBITDA to Fixed Charges




The
Borrower shall procure that the Corporate Guarantor (on a consolidated basis)
shall ensure that the ratio of EBITDA to Fixed Charges shall be 1.25:1.00 or
greater on a twelve (12) months rolling basis on assumptions approved by the
Bank.




(c)
            Positive
      working capital




The
Borrower shall procure that the Corporate Guarantor (on a consolidated basis)
shall at all times ensure that its current assets exceed its current liabilities
(excluding the portion of long term debt), all as determined in accordance with
GAAP.




(d)
            Cash
      and Cash Equivalents




The
Borrower shall procure that the Corporate Guarantor (on a consolidated basis)
shall at all times ensure that it has Cash and Cash Equivalents equal to or
greater than (i) fifteen million Dollars ($15,000,000) and (ii) six per cent
(6.00%) of the long term debt of the Corporate Guarantor.




(e)
            Adjustments




In the
event that the Corporate Guarantor is substantially released from its financial
obligations upon a repayment or refinancing of the Syndicated Facility, the Bank
and the Borrower shall negotiate a separate set of new financial covenants
taking into consideration the prevailing financial condition and circumstances
of the Corporate Guarantor, to be mutually acceptable to the Bank and the
Borrower, and to replace the current financial covenants contained in this
clause 8.4. In the event that the Corporate Guarantor’s financial covenants
are amended under the Syndicated Facility, the Bank will be agreeable to review
the existing financial covenants in this clause 8.4 and make the same or
similar reflective amendments.




8.4.3
            Compliance
      Certificate




The
Borrower undertakes that simultaneously with the service of the Audited
Financial Statements of the Corporate Guarantor pursuant to clause 8.1.5, it
will deliver to the Bank in a written certificate from the chief financial
officer of the Corporate Guarantor in respect of the period to which the Audited
Financial Statements relate, certifying that the Audited Financial Statements
were in compliance with the covenants and undertakings contained in this clause
8.4.




8.5
            Ship Covenants




The
Borrower hereby covenants with the Bank and undertakes, in relation to the Ship,
on and from the Delivery Date throughout the Security Period:




8.5.1
            Insurance




(a)
            Insured risks, amounts and
  terms




to insure
and keep the Ship insured through an Approved Insurer free of cost and expense
to the Bank and in the name of the Borrower (but, in the case of the insurances
referred to in sub-paragraphs (i) and (ii) below, no other person, save
with the prior written consent of the Bank and (ii) subject to such person
having to the satisfaction of the Bank, executed a deed of assignment in favour
of the Bank of such person’s interest in the Insurances of the Ship on similar
terms to the assignment by the names of the Borrower and the Bank (but without
liability on the part of the Bank for premiums or calls):




(i)
            against
      fire and usual marine risks (including excess risks, blocking and
      trapping) and war risks, on an agreed value basis, in such amounts in
      Dollars (but not in any event less than whichever shall be the greater of
      (1) the market value of the Ship for the time being and (2) such amount as
      will be at least equal to 120% of the Loan and upon such terms as shall
      from time to time be approved in writing by the
  Bank;




(ii)
            against
      protection and indemnity risks (including pollution risks for the highest
      amount in respect of which cover is or may become available for ships of
      the same type, size, age and flag as the Ship (currently $1,000,000,000)
      and a freight, demurrage and defence cover by entry of such Ship with a
      P&I Club which is a member of either the “International Group” of
      protection and indemnity associations or any successor organization as
      agreed with the Bank for this purpose for the full value and tonnage of
      such Ship and upon such terms as shall from time to time be approved in
      writing by the Bank;




(iii)
            in respect of such other matters of whatsoever nature and
      howsoever arising in respect of which insurance would be maintained by a
      prudent owner of the Ship;




to pay to
the Bank the cost (as conclusively certified by the Bank) of:





(aa)
            mortgagee’s
      interest insurance) coverage which the Bank shall effect throughout the
      Security Period in respect of the Ship upon such terms and in such amounts
      (being not less than 110 per cent of the Loan) as it shall deem desirable;
      and





(bb)
            any
      other insurance cover which the Bank may from time to time effect in
      respect of the Ship and/or in respect of its interest or potential third
      party liability as mortgagee of the Ship as the Bank shall deem desirable
      having regard to any limitations in respect of amount or extent of cover
      which may from time to time be applicable to any of the other insurances
      referred to in this
clause 8.4.1(a);





(b)
            Approved
      brokers, insurers and associations




to effect
the insurances aforesaid (including insurances against war risks) in Dollars and
through the Approved Insurers and provide the Bank with details of the terms and
conditions of any underwriting for the insurances to be effected for the Ship
not less than five (5) Banking Days prior to the Drawdown Date or such other
date as agreed by the Bank; provided however that the insurances against
protection and indemnity risks may be effected by the entry of the Ship with
such P&I Clubs as shall from time to time be approved in writing by the
Bank;





(c)
            Fleet
      liens, set-off and cancellation




if any of
the insurances referred to in clause 8.5.1(a)(i) form part of a fleet cover, to
procure that the Approved Insurers shall undertake to the Bank that they shall
neither set off against any claims in respect of the Ship any premiums due in
respect of other vessels under such fleet cover or any premiums due for other
insurances, nor cancel the insurance for reason of non-payment of premiums for
other vessels under such fleet cover or of premiums for such other insurances,
and shall undertake to issue a separate policy in respect of the Ship if and
when so requested by the Bank;





(d)
            Payment
      of premiums and calls




punctually
to pay all premiums, calls, contributions or other sums payable in respect of
all such insurances and to produce all relevant receipts or other evidence of
payment when so required by the Bank;





(e)
            Renewal




at least
fourteen (14) days before the relevant policies, contracts or entries expire, to
notify the Bank of the names of the brokers or insurers and/or the war risks
associations and P&I Clubs proposed to be employed by the Borrower or any
other party for the purposes of the renewal of such insurances and of the
amounts in which such insurances are proposed to be renewed and the risks to be
covered and, subject to compliance with any requirements of the Bank pursuant to
this clause 8.5.1, to procure that appropriate
instructions for the renewal of such insurances on the terms so specified are
given to the Approved Insurers and/or to the approved war risks associations and
P&I Clubs before the relevant policies, contracts or entries expire, and
that the Approved Insurers and/or the approved war risks associations and
P&I Clubs will as soon as possible after the renewal is agreed provide
evidence of the confirmation of renewal received from the P&I Club to the
Bank in accordance with the instructions so given;





(f)
            Guarantees




to
arrange for the execution and delivery of such guarantees or indemnities as may
from time to time be required by any and P&I Club or war risks
association;





(g)
            Hull
      policy documents, notices, loss payable clauses and brokers’
      undertakings




to
deposit with the Bank (or procure the deposit of) copies of all cover notes,
policies, certificates of entry or other instruments of insurance from time to
time issued in connection with such of the insurances referred to in
clause 8.4.1(a)(i) as are effected through the Approved Insurers and
procure that the interest of the Bank shall be endorsed thereon by incorporation
of the relevant Loss Payable Clause (as defined in the Deed of Covenant)
and, where the Insurances have been assigned to the Bank, by means of a Notice
of Assignment (as defined in the Deed of Covenant) of Insurances (signed by the
Borrower and by any other assured who shall have assigned its interest in the
Insurances to the Bank) and that the Bank shall be furnished with pro forma
copies thereof and a letter or letters of undertaking from the Approved Insurers
in such form as shall from time to time be required by the Bank;





(h)
            Associations’
      loss payable clauses, undertakings and
  certificates




to
procure that any P&I Club and/or war risks associations in which the Ship is
for the time being entered shall endorse the relevant Loss Payable
Clause (as defined in the Deed of Covenant) on the relevant certificate of
entry or policy and shall furnish the Bank with a copy of such certificate of
entry or policy and a letter or letters of undertaking in its standard form
provided the same shall be acceptable to the Bank;





(i)
            Extent of cover and
  exclusions




to take
all necessary action and comply with all requirements which may from time to
time be applicable to the Insurances (including, without limitation, the making
of all requisite declarations within any prescribed time limits and the payment
of any additional premiums or calls) so as to ensure that the Insurances are not
made subject to any exclusions or qualifications to which the Bank has not given
its prior written consent and are otherwise maintained on terms and conditions
from time to time approved in writing by the Bank;





(j)
            Independent
      report




if so
reasonably requested by the Bank, but at the cost of the Borrower (provided that
such request is made only once in each year), to furnish the Bank from time to
time with a detailed report signed by an independent firm of marine insurance
brokers acceptable to  the Bank dealing with the insurances maintained
on the Ship and stating the opinion of such firm as to the adequacy and
acceptability thereof;





(k)
            Collection
      of claims




to do all
things necessary and provide all documents, evidence and information to enable
the Bank to collect or recover any moneys which shall at any time become due in
respect of the Insurances in accordance with the provisions of the Deed of
Covenant;




(l)
            Employment
      of Ship




not to
employ the Ship or suffer such Ship to be employed otherwise than in conformity
with the terms of the Insurances (including any warranties express or implied
therein) without first obtaining the consent of the insurers to such employment
and complying with such requirements as to extra premium or otherwise as the
insurers may prescribe;




(m)
            Application
      of recoveries




to apply
all sums receivable under the Insurances which are paid to the Borrower in
accordance with the Loss Payable Clauses (as defined in the Deed of
Covenant) in repairing all damage and/or in discharging the liability in respect
of which such sums shall have been received;





(n)
            No
      further action




not to
make, do, consent or agree to any act or omission which would or might render
any instrument of insurance invalid, void, voidable or unenforceable or render
any sum paid thereunder repayable in whole or in part;




(o)
            Further
      insurance assignments




not,
without the prior written consent of the Bank, permit the Insurances referred to
in clause 8.4.1(a) to be effected in the name of any person (other than the
Borrower) unless such person has to the satisfaction of the Bank executed deeds
of assignment in favour of the Bank of such person’s interest in the Insurances
on similar terms (mutatis mutantis) to the assignments by the Borrower in the
Deed of Covenant.




8.5.2
            Ships’ name and
registration




(a)
            not
      to change the name of the Ship without first providing the Bank with prior
      notification of such name change;




(b)
            to
      procure that the Ship is permanently registered as a Bahamian ship within
      ninety (90) days hereof;




(c)
            to
      keep the Ship registered as a Bahamian
ship;




(d)
            not
      do or suffer to be done anything, or omit to do anything the doing or
      omission of which could or might result in such registration being
      forfeited or imperilled or which could or might result in the Ship being
      required to be registered otherwise than as a Bahamian ship at the
      Registry;




(e)
            not
      to register the Ship or permit its registration under any other flag or at
      any other port without the prior written consent of the
    Bank;




8.5.3
            Repair




to keep
the Ship in a good and efficient state of repair and procure that all repairs to
or replacement of any damaged, worn or lost parts or equipment are effected in
such manner (both as regards workmanship and quality of materials) as not to
materially diminish the value of the Ship;





8.5.4
            Modification;
      removal of parts; equipment owned by third
  parties




not
without the prior written consent of the Bank to, or suffer any other person
to:





(a)
            make
      any modification to the Ship in consequence of which her structure, type
      or performance characteristics could or might be materially altered or her
      value materially reduced; or




(b)
            remove
      any material part of the Ship or any equipment the value of which is such
      that its removal from the Ship would materially reduce the value of the
      Ship without replacing the same with equivalent parts or equipment which
      are owned by the Borrower free from Encumbrances;
  or




(c)
            install
      on the Ship any equipment owned by a third party which cannot be removed
      without causing damage to the structure or fabric of the
    Ship;




8.5.5
            Maintenance of class; compliance with
      regulations




to
maintain the relevant Classification as the class of the Ship and to comply with
and ensure that the Ship at all times complies with the provisions of all laws,
regulations and requirements (statutory or otherwise) from time to time
applicable to vessels registered at the Registry or otherwise applicable to the
Ship;





8.5.6
            Surveys




to submit
the Ship to continuous surveys and such periodical or other surveys as may be
required for classification purposes and to supply to the Bank copies of all
survey reports issued in respect thereof if requested by the Bank;





8.5.7
            Inspection




to ensure
that the Bank, by surveyors or other persons appointed by it for such purpose,
may board the Ship at all reasonable times for the purpose of inspecting her and
to afford all proper facilities for such inspections and for this purpose to
give the Bank reasonable advance notice of any intended drydocking of the Ship
(whether for the purpose of classification, survey or otherwise);





8.5.8
            Prevention of and release from
  arrest




promptly
to pay and discharge all debts, damages, liabilities and outgoings whatsoever
which have given or may give rise to maritime, statutory or possessory liens on,
or claims enforceable against, the Ship, her Earnings or Insurances or any part
thereof and, in the event of a writ or libel being filed against the Ship, her
Earnings or Insurances or any part thereof, or of any of the same being
arrested, attached or levied upon pursuant to legal process or purported legal
process or in the event of detention of the Ship in exercise or purported
exercise of any such lien or claim as aforesaid, to procure the release of the
Ship, her Earnings and Insurances from such arrest, detention attachment or levy
or, as the case may be, the discharge of the writ or libel forthwith upon
receiving notice thereof by providing bail or procuring the provision of
security or otherwise as the circumstances may require;





8.5.9
            Employment




not to
employ the Ship or permit her employment in any manner, trade or business which
is forbidden by international law, or which is unlawful or illicit under the law
of any relevant jurisdiction, or in carrying illicit or prohibited goods, or in
any manner whatsoever which may render her liable to condemnation in a prize
court, or to destruction, seizure, confiscation, penalty or sanctions and, in
the event of hostilities in any part of the world (whether war be declared or
not), not to employ the Ship or permit her employment in carrying any contraband
goods, or enter or trade to or to continue to trade in any zone which has been
declared a war zone by any Government Entity or by the Ship’s war risks insurers
unless either:




(a)
            the
      prior written consent of the Bank is obtained and such special insurance
      cover as the Bank may require shall have been effected by the Borrower and
      at its expense; or




(b)
            the
      Ship’s war risk insurers have agreed that the Ship remains held covered
      while in that zone;




8.5.10
            Information




promptly
to furnish the Bank with all such information as it may from time to time
require regarding the Ship, her employment, position and engagements,
particulars of all towages and salvages, and copies of all charters and other
contracts for her employment, or otherwise howsoever concerning
her;





8.5.11
            Notification of certain
    events




to notify
the Bank forthwith by facsimile thereafter confirmed by letter of:




(a)
            any
      damage to the Ship requiring repairs the cost of which will or might
      exceed the Casualty Amount (as defined in the Deed of
      Covenant);




(b)
            any
      occurrence in consequence of which the Ship has or may become a Total
      Loss;




(c)
            any
      requisition of the Ship by any applicable Government
    Entity;




(d)
            any
      requirement or recommendation made by any insurer or the relevant
      Classification Society or by any competent authority which is not, or
      cannot be, complied with in accordance with its
  terms;




(e)
            any
      arrest or detention of the Ship or any exercise or purported exercise of a
      lien or other claim on the Ship or the Earnings or Insurances or
      Requisition Compensation or any part
thereof;




(f)
            any
      petition or notice of meeting to consider any resolution to wind up the
      Borrower (or any event analogous thereto under the laws of the place of
      its incorporation);




(g)
            the
      occurrence of any Default;




(h)
            any
      actual or threatened withdrawal of the Ship’s SMC or any Operator’s DOC or
      the occurrence of any accident or major non-conformity involving or
      relating to the Ship;




(i)
            the
      occurrence of any Environmental Claim against the Borrower, the Ship, any
      other Security Party or any other Relevant Ship or any incident, event or
      circumstances which may give rise to any such Environmental Claim or an
      Event of Default specified in
  clause 10.1.23;




8.5.12
            Payment of outgoings and evidence of
      payments




promptly
to pay all tolls, dues and other outgoings whatsoever in respect of the Ship and
her Earnings and Insurances and to keep proper books of account in respect of
the Ship and her Earnings and, as and when the Bank may so require in writing,
to make such books available for inspection on behalf of the Bank, together
with, if requested by the Bank, satisfactory evidence that the wages and
allotments and the insurance and pension contributions of the Master and crew
are being promptly and regularly paid and that all deductions from crew’s wages
in respect of any applicable tax liability are being properly accounted for and
that the Master has no claim for disbursements other than those incurred by him
in the ordinary course of trading on the voyage then in progress;





8.5.13
            Encumbrances




not
without the prior written consent of the Bank (and then only subject to such
conditions as the Bank may impose) to create or purport or agree to create or
permit to arise or subsist any Encumbrance (other than Permitted Liens) over or
in respect of the Ship, any share or interest therein or in any other part of
such Ship’s Earnings, Insurances or Requisition Compensation otherwise than to
or in favour of the Bank;





8.5.14
            Sale or other
disposal




not
without prior written notice to the Bank (and then only subject to the
provisions of this Agreement and the other Security Documents) sell, agree to
sell, transfer, abandon or otherwise dispose of the Ship or any share or
interest therein;





8.5.15
            Chartering




except
pursuant to the Charter, not without the prior written consent of the Bank and,
if such consent is given, only subject to such conditions as the Bank may
impose, to let the Ship on demise or bareboat charter for any
period;





8.5.16
            Sharing of Earnings




not
without the prior written consent of the Bank (and then only subject to such
conditions as the Bank may impose) to enter into any agreement or arrangement
whereby the Earnings of the Ship may be shared with any other
person;





8.5.17
            Payment of Earnings




procure
that the Earnings are paid at all times to the Earnings Account in accordance
with the Security Documents and that any Earnings which are in the hands of the
Borrower’s brokers or agents are duly accounted for and paid over to the Bank
forthwith on demand;




8.5.18
            Repairers’ liens




not
without the prior written consent of the Bank to put the Ship into the
possession of any person for the purpose of work being done upon her
unless:




(a)
            such
      person shall first have given to the Bank in terms satisfactory to it, a
      written undertaking not to exercise any lien on the Ship or her Earnings
      for the cost of such work or otherwise;
or




(b)
            the
      amount payable for such work will not exceed the Casualty Amount (as
      defined in the Deed of Covenant) and no Event of Default has occurred and
      is continuing at the time the Ship is put into such person’s possession;
      or




(c)
            the
      Borrower shall have first demonstrated to the reasonable satisfaction of
      the Bank that the cost of such work is covered by insurance taken out in
      respect of the Ship and/or that the Borrower has adequate financial
      resources available to it to enable it to meet the cost of such work
      without any Default occurring:




8.5.19
            Approved
    Manager




not,
without the prior written consent of the Bank (such consent not to be
unreasonably withheld), appoint as manager of the Ship, any person other than an
Approved Manager;




8.5.20
            Notice
      of Mortgage




to place
and at all times and places to retain a properly certified true copy of the
Mortgage on board the Ship with her papers and keep prominently displayed in the
navigation room and in the Master’s cabin of the Ship, a framed printed notice
in plain type reading as follows:





“NOTICE OF
MORTGAGE




This Ship
is subject to a first priority mortgage and deed of covenant in favour of THE
BANK OF NOVA SCOTIA ASIA LIMITED of 1 Raffles Quay, #21-01, North Tower, One
Raffles Quay, Singapore 048583. Under the said Mortgage and Deed of Covenant
neither the Owner nor any charterer nor the Master of this Ship has any right,
power or authority to create, incur or permit to be imposed upon this Ship any
lien whatsoever other than for crew’s wages and salvage”




and in
terms of the said notice it is hereby agreed that save and subject as otherwise
herein provided, neither the Borrower nor any charterer not the Master of the
Ship nor any other person has any right, power or authority to create, incur or
permit to be imposed upon the Ship any lien whatsoever other than for crew’s
wages and salvage;




8.5.21
            Conveyance on
default




where the
Ship is (or is to be) sold in exercise of any power contained in the Mortgage or
otherwise conferred on the Bank, to execute, forthwith upon request by the Bank,
such form of conveyance of the Ship as the Bank may require;




8.5.22
            Anti-drug abuse and Carrier Initiative
      Agreement




to take
all necessary and proper precautions to prevent any infringements of the
Anti-Drug Abuse Act of 1986 of the United States of America or any similar
legislation applicable to the Ship in any jurisdiction in or to which the Ship
shall be employed or located or trade or which may otherwise be applicable to
the Ship and/or the Borrower;




8.5.23
            Compliance with Environmental
      Laws




to comply
with, and procure that all Environmental Affiliates of the Borrower comply with,
all Environmental Laws including, without limitation, requirements relating to
manning and establishment of financial responsibility and to obtain and comply
with, and procure that all Environmental Affiliates of the Borrower obtain and
comply with, all Environmental Approvals;




8.5.24
            United States of
  America




not to
sail the Ship or permit the Ship to sail within the United States exclusive
economic zone or within any waters over which the United States exerts
sovereignty without first obtaining and complying with all necessary consents,
regulations and requirements applicable to vessels sailing within the United
States exclusive economic zone or within any waters over which the United States
exerts sovereignty (including, without limitation, a certificate of financial
responsibility and a vessel response plan complying with the requirements of the
United States Oil Pollution Act 1990 together with evidence of approval thereof
by the relevant regulatory authorities);




8.5.25
            Other
      territorial waters/exclusive economic
zones




not to
sail the Ship or permit the Ship to sail within the waters (including, without
limitation, territorial waters, contiguous zones or exclusive economic zones) of
any jurisdiction which imposes any law, approvals, regulation or requirement
relating to pollution or protection of human health or the environment
including, without limitation, the carriage of Pollutants and actual or
threatened emissions, spills, releases or discharges of Pollutants which in the
sole opinion of the Bank is either analogous to the United States Oil Pollution
Act of 1990 or could in the sole opinion of the Bank, result in the Ship or the
Borrower being exposed to penalties or liabilities by any court or Government
Entity for breach of such law, approval, regulation or requirement greater than
would be applicable under the International Convention on Civil Liability for
Oil Pollution Damage 1969 (as amended by the 1992 protocol to such Convention)
without the Borrower obtaining and complying with all necessary consents,
regulations and requirements applicable to vessels sailing within such
waters;




8.5.26
            ISM
      Code




(a)
            Compliance with the ISM
      Code: to comply with and ensure that the Ship and its Operator at
      all times comply with the requirements of the ISM
  Code;




(b)
            Withdrawal of DOC or
      SMC: immediately to inform the Bank of any threatened or actual
      withdrawal of any Operator’s DOC or the
SMC;




(c)
            Issue of DOC or SMC:
      promptly to inform the Bank of the issue of the DOC and the SMC or of the
      receipt by any Operator of notification that any application for the same
      has been refused;




(d)
            Copy documentation: to
      provide the Bank promptly on request with a copy (certified as a true copy
      by the Borrower) of the DOC and the SMC;
and




9
            Conditions




9.1
            Documents
      and evidence




The
obligation of the Bank to make the Commitment available shall be subject to the
condition that:




9.1.1
            the
      Bank, or its duly authorised representative, shall have received, not
      later than two (2) Banking Days before the day on which the Drawdown
      Notice for the Loan is given, the documents and evidence specified in Part
      1 of schedule 2 in form
      and substance satisfactory to the Bank;
and




9.1.2
            the
      Bank, or its duly authorised representative, shall have received, on or
      prior to the Drawdown Date, the documents and evidence specified in Part 2
      of schedule 2 in form
      and substance satisfactory to the
Bank.




9.2
            General
      conditions precedent




The
obligation of the Bank to make the Loan shall be subject to the further
conditions that, at the time of the giving of the Drawdown Notice, and at the
time of the making of the Loan:




9.2.1
            the
      representations and warranties contained in clauses 7.1 (and so that the representation
      and warranty in clause 7.1.9
      shall for this purpose refer to the then latest Audited Financial
      Statements delivered to the Bank under clause 8.1.5), 7.2 and 7.3(b) are true and correct on and as
      of each such time as if each was made with respect to the facts and
      circumstances existing at such time;
and




9.2.2
            no
      Default shall have occurred and be continuing or would result from the
      making of the Loan.




9.3
            Waiver
      of conditions precedent




The
conditions specified in this clause 9 are inserted solely for the benefit of the
Bank and may be waived by the Bank in whole or in part and with or without
conditions.




9.4
            Further
      conditions precedent




Not later
than five (5) Banking Days prior to the Drawdown Date, the Bank may request and
the Borrower shall, not later than two (2) Banking Days prior to such date,
deliver to the Bank on such request further favourable certificates and/or
opinions as to any or all of the matters which are the subject of
clauses 7, 8, 9
and 10.




10
            Events
      of Default




10.1
            Events




There
shall be an Event of Default if:




10.1.1
            Non-payment: any
      Security Party fails to pay any sum payable by it under any of the
      Security Documents at the time, in the currency and in the manner
      stipulated in the Security Documents (and so that, for this purpose, sums
      payable on demand shall be treated as having been paid at the stipulated
      time if paid within three (3) Banking Days of demand);
  or




10.1.2
            Breach of Insurance and certain
      other obligations: the Borrower or the Charterer fails to obtain
      and/or maintain the Insurances (as defined in, and in accordance with the
      requirements of, the Security Documents) or if any insurer in respect of
      such Insurances cancels the Insurances or disclaims liability by reason,
      in either case, of mis-statement in any proposal for the Insurances or for
      any other failure or default on the part of the Borrower or the Charterer
      or any other person or the Borrower commits any breach of or omits to
      observe any of the obligations or undertakings expressed to be assumed by
      it under clauses 8.2, 8.3, 8.4 or 8.5;
  or




10.1.3
            Breach of other
      obligations: any Security Party commits any breach of or omits to
      observe any of its obligations or undertakings expressed to be assumed by
      it under any of the Security Documents (other than those referred to in
      clauses 10.1.1 and 10.1.2 above) and, in respect of any
      such breach or omission which in the opinion of the Bank is capable of
      remedy, such action as the Bank may require shall not have been taken
      within fourteen (14) days of the Bank notifying the relevant Security
      Party of such default and of such required action;
  or




10.1.4
            Misrepresentation: any
      representation or warranty made or deemed to be made or repeated by or in
      respect of any Security Party in or pursuant to any of the Security
      Documents or in any notice, certificate or statement referred to in or
      delivered under any of the Security Documents is or proves to have been
      incorrect or misleading in any material respect;
  or




10.1.5
            Cross-default: (i) any
      Indebtedness of any Security Party is not paid when due or any
      Indebtedness of any Security Party becomes (whether by declaration or
      automatically in accordance with the relevant agreement or instrument
      constituting the same) due and payable prior to the date when it would
      otherwise have become due (unless as a result of the exercise by the
      relevant Security Party of a voluntary right of prepayment), or (ii) any
      creditor of any Security Party becomes entitled to declare any such
      Indebtedness due and payable or any facility or commitment available to
      any Security Party relating to Indebtedness is withdrawn, suspended or
      cancelled by reason of any default (however described) of the person
      concerned unless the relevant Security Party shall have satisfied the Bank
      that such withdrawal, suspension or cancellation will not affect or
      prejudice in any way the relevant Security Party’s ability to pay its
      debts as they fall due and fund its commitments, or (iii) any guarantee
      given by any Security Party in respect of Indebtedness is not honoured
      when due and called upon; or




10.1.6
            Legal process: any
      judgment or order made against any Security Party is not stayed or
      complied with within seven (7) days or a creditor attaches or takes
      possession of, or a distress, execution, sequestration or other process is
      levied or enforced upon or sued out against, any of the undertakings,
      assets, rights or revenues of any Security Party and is not discharged
      within seven (7) days; or




10.1.7
            Insolvency: any Security
      Party is unable or admits inability to pay its debts as they fall
      due;  suspends making payments on any of its debts or announces
      an intention to do so;  becomes insolvent;  has assets
      the value of which is less than the value of its liabilities (taking into
      account contingent and prospective liabilities); or suffers the
      declaration of a moratorium in respect of any of its
      indebtedness;  or




10.1.8
            Reduction or loss of
      capital: a meeting is convened by any Security Party for the
      purpose of passing any resolution to purchase, reduce or redeem any of its
      share capital; or




10.1.9
            Winding up: any
      corporate action, legal proceedings or other procedure or step is taken
      for the purpose of winding up any Security Party or an order is made or
      resolution passed for the winding up of any Security Party or a notice is
      issued convening a meeting for the purpose of passing any such resolution;
      or




10.1.10
            Administration: any
      petition is presented, notice given or other step is taken for the purpose
      of the appointment of an administrator of any Security Party or the Bank
      believes that any such petition or other step is imminent or an
      administration order is made in relation to any Security Party;
      or




10.1.11
            Appointment of receivers and
      managers: any administrative or other receiver is appointed of any
      Security Party or any part of its assets and/or undertaking or any other
      steps are taken to enforce any Encumbrance over all or any part of the
      assets of any Security Party; or




10.1.12
            Compositions: any
      corporate action, legal proceedings or other procedures or steps are
      taken, or negotiations commenced, by any Security Party or by any of its
      creditors with a view to the general readjustment or rescheduling of all
      or part of its indebtedness or to proposing any kind of composition,
      compromise or arrangement involving such company and any of its creditors;
      or




10.1.13
            Analogous proceedings:
      there occurs, in relation to any Security Party, in any country or
      territory in which any of them carries on business or to the jurisdiction
      of whose courts any part of their assets is subject, any event which, in
      the reasonable opinion of the Bank, appears in that country or territory
      to correspond with, or have an effect equivalent or similar to, any of
      those mentioned in clauses 10.1.6 to 10.1.12 (inclusive) or any Security
      Party or otherwise becomes subject, in any such country or territory, to
      the operation of any law relating to insolvency, bankruptcy or
      liquidation; or




10.1.14
            Cessation of business:
      any Security Party suspends or ceases or threatens to suspend or cease to
      carry on its business; or




10.1.15
            Seizure: all or a
      material part of the undertaking, assets, rights or revenues of, or shares
      or other ownership interests in, any Security Party are seized,
      nationalised, expropriated or compulsorily acquired by or under the
      authority of any government; or




10.1.16
            Invalidity: any of the
      Security Documents shall at any time and for any reason become invalid or
      unenforceable or otherwise cease to remain in full force and effect, or if
      the validity or enforceability of any of the Security Documents shall at
      any time and for any reason be contested by any Security Party which is a
      party thereto , or if any such Security Party shall deny that it has any,
      or any further, liability thereunder;
or




10.1.17
            Unlawfulness: it becomes
      impossible or unlawful at any time for any Security Party, to fulfil any
      of the covenants and obligations expressed to be assumed by it in any of
      the Security Documents or for the Bank to exercise the rights or any of
      them vested in it under any of the Security Documents or otherwise;
      or




10.1.18
            Repudiation: any
      Security Party repudiates any of the Security Documents or does or causes
      or permits to be done any act or thing evidencing an intention to
      repudiate any of the Security Documents;
or




10.1.19
            Encumbrances
      enforceable: any Encumbrance (other than Permitted Liens) in
      respect of any of the property (or part thereof) which is the subject of
      any of the Security Documents becomes enforceable;
  or




10.1.20
            Material adverse change:
      any event or a series of events occurs which, in the opinion of the Bank,
      may cause a material adverse change in the financial condition of any
      Security Party; or




10.1.21
            Arrest: the Ship is
      arrested, confiscated, seized, taken in execution, impounded, forfeited,
      detained in exercise or purported exercise of any possessory lien or other
      claim or otherwise taken from the possession of the Borrower and the
      Borrower shall fail to procure the release of the Ship within a period of
      fourteen (14) days thereafter; or




10.1.22
            Registration: the
      registration of the Ship under the laws and flag of the Flag State is
      cancelled or terminated without the prior written consent of the Bank;
      or




10.1.23
            Unrest: the Flag State
      becomes involved in hostilities or civil war or there is a seizure of
      power in the Flag State by unconstitutional means if, in any such case,
      such event could in the opinion of the Bank reasonably be expected to have
      a material adverse effect on the security constituted by any of the
      Security Documents; or




10.1.24
            Environmental Incidents:
      there is an Environmental Incident which gives rise, or may give rise, to
      an Environmental Claim which could, in the opinion of the Bank be expected
      to have a material adverse effect (i) on the business, assets, operations,
      property or financial condition of any Security Party or the Borrower’s
      Group taken as a whole or (ii) on the security constituted by any of the
      Security Documents or the enforceability of that security in accordance
      with its terms; or




10.1.25
            P&I: the Borrower or
      any other person fails or omits to comply with any requirements of the
      protection and indemnity association or other insurer with which the Ship
      is entered for insurance or insured against protection and indemnity risks
      (including oil pollution risks) to the effect that any cover (including,
      without limitation, any cover in respect of liability for Environmental
      Claims arising in jurisdictions where the Ship operates or trades) is or
      may be liable to cancellation, qualification or exclusion at any time;
      or




10.1.26
            Parent company: the
      Borrower ceases to be a wholly owned Subsidiary of the Corporate
      Guarantor; or




10.1.27
            Termination of Charter and/or
      the Charter Guarantee: the Charter and/or the Charter Guarantee is
      cancelled or terminated or becomes frustrated for any reason whatsoever
      other than expiry by effluxion of time or the Ship becoming a Total Loss;
      or




10.1.28
            Material events: any
      other event occurs or circumstance arises which, in the opinion of the
      Bank, is likely materially and adversely to affect either (i) the ability
      of any Security Party to perform all or any of its obligations under or
      otherwise to comply with the terms of any of the Security Documents or
      (ii) the security created by any of the Security
  Documents.




10.2
            Acceleration




The Bank
may, without prejudice to any other rights of the Bank, at any time after the
happening of an Event of Default by notice to the Borrower declare
that:




10.2.1
            the
      obligation of the Bank to make the Commitment available shall be
      terminated, whereupon the Commitment shall be reduced to zero forthwith;
      and/or




10.2.2
            the
      Loan and all interest and commitment commission accrued and all other sums
      payable under the Security Documents have become due and payable,
      whereupon the same shall, immediately or in accordance with the terms of
      such notice, become due and
payable.




10.3
            Demand
      basis




If,
pursuant to clause 10.2.2, the Bank
declares the Loan to be due and payable on demand, the Bank may by written
notice to the Borrower (a) call for repayment of the Loan on such date as may be
specified whereupon the Loan shall become due and payable on the date so
specified together with all interest accrued and all other sums payable under
this Agreement or (b) withdraw such declaration with effect from the date
specified in such notice.




11
            Indemnities




11.1
            Miscellaneous
      indemnities




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




11.1.1
            any
      default in payment by the Borrower of any sum under any of the Security
      Documents when due;




11.1.2
            the
      occurrence of any other Event of
Default;




11.1.3
            any
      prepayment of the Loan or part thereof being made under clause 4.5, 8.2.1 or 12.1, or any other repayment of the
      Loan or part thereof being made otherwise than on an Interest Payment Date
      relating to the part of the Loan prepaid or repaid;
  or




11.1.4
            the
      Loan not being made for any reason (excluding any default by the Bank)
      after the Drawdown Notice has been
given,




including,
in any such case, but not limited to, any loss or expense sustained or incurred
in maintaining or funding the Loan or any part thereof or in liquidating or
re-employing deposits from third parties acquired to effect or maintain the Loan
or any part thereof.




11.2
            Currency
      indemnity




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




11.3
            Environmental
      indemnity




The
Borrower shall indemnify the Bank on demand in respect of all costs, claims,
losses, demands, liabilities, penalties and fines, of whatever nature
(including, without limitation, those arising under Environmental Laws) which
may be incurred or made against the Bank at any time relating to, or arising
directly or indirectly in any manner or for any cause or reason whatsoever out
of an Environmental Claim made or asserted against the Bank which would or could
not have been brought if the Bank had not entered into any of the Security
Documents or been involved in any of the transactions contemplated by the
Security Documents.




12
            Unlawfulness
      and increased costs




12.1
            Unlawfulness




If it is
or becomes contrary to any law or regulation for the Bank to advance the Loan or
to, maintain the Commitment or fund the Loan the Bank shall promptly give notice
to the Borrower whereupon (a) the Commitment shall be reduced to zero and (b)
the Borrower shall be obliged to prepay the Loan either (i) forthwith or (ii) on
a future specified date not being earlier than the latest date permitted by the
relevant law or regulation together with interest accrued to the date of
prepayment and all other sums payable by the Borrower under this
Agreement.




12.2
            Increased
      costs




If the
result of any change in, or in the interpretation or application of, or the
introduction of, any law or any regulation, request or requirement (whether or
not having the force of law, but, if not having the force of law, with which the
Bank or, as the case may be, its holding company habitually complies), including
(without limitation) those relating to Taxation, capital adequacy, liquidity,
reserve assets, cash ratio deposits and special deposits, is to:




12.2.1
            subject
      the Bank to Taxes or change the basis of Taxation of the Bank with respect
      to any payment under any of the Security Documents (other than Taxes or
      Taxation on the overall net income, profits or gains of the Bank imposed
      in the jurisdiction in which its principal or lending office under this
      Agreement is located); and/or




12.2.2
            increase
      the cost to, or impose an additional cost on, the Bank or its holding
      company in making or keeping the Commitment available or maintaining or
      funding all or part of the Loan;
and/or




12.2.3
            reduce
      the amount payable or the effective return to the Bank under any of the
      Security Documents; and/or




12.2.4
            reduce
      the Bank’s or its holding company’s rate of return on its overall capital
      by reason of a change in the manner in which it is required to allocate
      capital resources to the Bank’s obligations under any of the Security
      Documents; and/or




12.2.5
            require
      the Bank or its holding company to make a payment or forgo a return on or
      calculated by reference to any amount received or receivable by the Bank
      under any of the Security Documents;
and/or




12.2.6
            require
      the Bank or its holding company to incur or sustain a loss (including a
      loss of future potential profits) by reason of being obliged to deduct all
      or part of the Commitment or the Loan from its capital for regulatory
      purposes,




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




(a)
            the
      Bank shall notify the Borrower in writing of such event promptly upon its
      becoming aware of the same; and




(b)
            the
      Borrower shall on demand pay to the Bank the amount which the Bank
      specifies (in a certificate setting forth the basis of the computation of
      such amount but not including any matters which the Bank or its holding
      company regards as confidential) is required to compensate the Bank and/or
      (as the case may be) its holding company for such liability to Taxes,
      cost, reduction, payment, forgone return or
  loss.




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




12.3
            Exception




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




13
            Security
      and set-off




13.1
            Application
      of moneys




All
moneys received by the Bank under or pursuant to any of the Security Documents
and expressed to be applicable in accordance with the provisions of this 13.1 shall be applied by the Bank in the
following manner:




13.1.1
            first
      in or toward payment of all unpaid fees and expenses which may be owing to
      the Bank under any of the Security
Documents;




13.1.2
            secondly
      in or towards payment of any arrears of interest owing in respect of the
      Loan or any part thereof;




13.1.3
            thirdly
      in or towards repayment of the Loan (whether the same is due and payable
      or not);




13.1.4
            fourthly
      in or towards payment to the Bank for any loss suffered by reason of any
      such payment in respect of principal not being effected on an Interest
      Payment Date relating to the part of the Loan
  repaid;




13.1.5
            fifthly
      in or towards payment to the Bank of any other sums owing to it under any
      of the Security Documents; and




13.1.6
            sixthly
      the surplus (if any) shall be paid to the Borrower or to whomsoever else
      may be entitled to receive such
surplus.




13.2
            Set-off




The
Borrower authorises the Bank (without prejudice to any of the Bank’s rights at
law, in equity or otherwise), at any time and without notice to the Borrower, to
apply any credit balance to which the Borrower is then entitled standing upon
any account of the Borrower with any branch of the Bank in or towards
satisfaction of any sum due and payable from the Borrower to the Bank under any
of the Security Documents.  For this purpose, the Bank is authorised
to purchase with the moneys standing to the credit of such account such other
currencies as may be necessary to effect such application.  The Bank
shall not be obliged to exercise any right given to it by this clause 13.2.  The Bank shall notify the
Borrower forthwith upon the exercise or purported exercise of any right of
set-off giving full details in relation thereto.




13.3
            Further
      assurance




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




13.4
            Conflicts




In the
event of any conflict between this Agreement and any of the other Security
Documents, the provisions of this Agreement shall prevail.




14
            Accounts




14.1
            General




The
Borrower undertakes with the Bank that it will:




14.1.1
            on
      or before the Drawdown Date open the Earnings Account;
  and




14.1.2
            procure
      that all moneys payable to the Borrower in respect of the Earnings (as
      defined in the Deed of Covenant of the Ship shall, unless and until the
      Bank directs to the contrary pursuant to proviso (a) to clause 2.1 of
      the Deed of Covenant, be paid to the Earnings Account Provided however
      that if any of the moneys paid to the Earnings Account are payable in a
      currency other than Dollars, the Borrower shall instruct the Account Bank
      to convert such moneys into Dollars at the Account Bank’s spot rate of
      exchange at the relevant time for the purchase of Dollars with such
      currency and the term “spot rate of exchange” shall include any premium
      and costs of exchange payable in connection with the purchase of Dollars
      with such currency.




14.2
            Account
      terms




14.2.1
            The
      Borrower shall, unless and until a Default shall occur and the Bank shall
      direct to the contrary, be entitled from time to time, subject to the
      agreement of the Account Bank to require that moneys for the time being
      standing to the credit of the Earnings Account be transferred in such
      amounts and for such periods as the Borrower selects to fixed-term deposit
      accounts (“deposit
      accounts”) opened in the name of the Borrower with the Account
      Bank.  Any deposit accounts shall, for all the purposes of the
      Security Documents, be deemed to be sub-accounts of the Earnings Account
      from which the moneys deposited in the deposit accounts were transferred
      and all references in the Security Documents to the Earnings Account shall
      be deemed to include the deposit accounts deemed as aforesaid to be
      sub-accounts thereof.




14.3
            Earnings
      Account: withdrawals




Unless
and until an Event of Default shall occur and the Bank shall direct to the
contrary, the Borrower may withdraw moneys from the Earnings Account at any time
from the date of this Agreement.




14.4
            Application
      of accounts




At any
time after the occurrence of an Event of Default, the Bank may, without notice
to the Borrower, instruct the Account Bank to apply all moneys then standing to
the credit of the Earnings Account (together with interest from time to time
accruing or accrued thereon) in payment to the Bank and the Bank shall apply the
same in or towards satisfaction of any sums due to the Bank under the Security
Documents in the manner specified in clause 13.1.




14.5
            Charging
      of accounts




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




15
            Assignment,
      transfer and lending office




15.1
            Benefit
      and burden




This
Agreement shall be binding upon, and enure for the benefit of, the Bank and the
Borrower and their respective successors.




15.2
            No
      assignment by Borrower




The
Borrower may not assign or transfer any of its rights or obligations under this
Agreement.




15.3
            Assignment
      by Bank




The Bank
may assign all or any part of its rights under this Agreement or under any of
the other Security Documents to any other first class bank or financial
institution (an “Assignee”) without the consent
of the Borrower.




15.4
            Transfer




The Bank
may transfer all or any part of its rights, benefits and/or obligations under
this Agreement and/or any of the other Security Documents to any one or more
first class banks or other financial institutions (a “Transferee”):




15.4.1
            with
      the prior written consent of the Borrower (such consent not to be
      unreasonably withheld and the request for which shall be promptly
      responded to), unless the Transferee shall be a Related Company of the
      Bank (in which case no such consent shall be required, the Borrower
      consenting to any such transfer by its execution of this Agreement);
      and




15.4.2
            if
      the Transferee, by delivery of such undertaking as the Bank may approve,
      becomes bound by the terms of this Agreement and agrees to perform all or,
      as the case may be, part of the Bank’s obligations under this
      Agreement.




15.5
            Documenting
      assignments and transfers




If the
Bank assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clause 15.3 or 15.4 the Borrower undertakes, immediately on
being requested to do so by the Bank and at the cost of the Bank, to enter into,
and procure that the other Security Parties shall enter into, such documents as
may be necessary or desirable to transfer to the Assignee or Transferee all or
the relevant part of the Bank’s interest in the Security Documents and all
relevant references in this Agreement to the Bank shall thereafter be construed
as a reference to the Bank and/or its Assignee or Transferee (as the case may
be) to the extent of their respective interests.




15.6
            Lending
      office




The Bank
shall lend through its office at the address specified above or through any
other office of the Bank selected from time to time by it through which the Bank
wishes to lend for the purposes of this Agreement.  If the office
through which the Bank is lending is changed pursuant to this clause 15.6, the Bank shall notify the Borrower
promptly of such change.




15.7
            Disclosure
      of information




The
Borrower irrevocably authorises the Bank to disclose from time to time
information relating to this Agreement and the Security Documents, the Loan and
the Borrower’s accounts to any relevant authorities, the Bank’s head office,
branches and affiliates, any other parties to any of the Security Documents and
any person regarding any funding, operational arrangement or other transaction
in relation thereto including, without limitation, in connection with any
enforcement or assignment or transfer or sub-participation of the Bank’s rights
and obligations under the Security Documents or any of them unless the
information is clearly of a confidential nature.




16
            Notices
      and other matters




16.1
            Notices




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




16.1.1
            be
      in writing delivered personally or by first-class prepaid letter (airmail
      if available) or facsimile transmission or other means of
      telecommunication in permanent written
form;




16.1.2
            be
      deemed to have been received, subject as otherwise provided in the
      relevant Security Document, in the case of a letter, when delivered
      personally or three (3) days after it has been put in to the post and, in
      the case of a facsimile transmission or other means of telecommunication
      in permanent written form, at the time of despatch (provided that if the
      date of despatch is not a business day in the country of the addressee or
      if the time of despatch is after the close of business in the country of
      the addressee it shall be deemed to have been received at the opening of
      business on the next such business day);
and




16.1.3
            be
      sent:




(a)
            to
      the Borrower at:




3rd
Floor, Par La Ville Place


14 Par La
Ville Road


Hamilton
HM 08


Bermuda





Fax
no:                        +1
441 295 6796





Attention:                        Ms
Deborah Paterson




(b)
            to
      the Bank at:




1 Raffles
Quay


#20-01,
North Tower


One
Raffles Quay


Singapore
048583





Fax
No:                        +65
6534 7817





Attention:                        Mr
G.S. Rajan/Mr Claude Morin





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




16.2
            No
      implied waivers, remedies
cumulative




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




16.3
            English
      language




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




17
            Governing
      law and jurisdiction




17.1
            Law




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




17.2
            Submission
      to jurisdiction




The
Borrower agrees, for the benefit of the Bank, that any legal action or
proceedings arising out of or in connection with this Agreement against the
Borrower or any of its assets may be brought in the English
courts.  The Borrower irrevocably and unconditionally submits to the
jurisdiction of such courts and irrevocably designates, appoints and empowers
Ince Process Agents Ltd (Attention: Paul Herring and Chris Jefferres) at present
of 1 St. Katherine’s Way, London E1W 1UN to receive for it and on its behalf,
service of process issued out of the English courts in any such legal action or
proceedings.  The submission to such jurisdiction shall not (and shall
not be construed so as to) limit the right of the Bank to take proceedings
against the Borrower in the courts of any other competent jurisdiction nor shall
the taking of proceedings in any one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction, whether concurrently or
not.




The
parties further agree that only the Courts of England and not those of any other
State shall have jurisdiction to determine any claim which the Borrower may have
against the Bank arising out of or in connection with this
Agreement.




IN WITNESS whereof the parties
to this Agreement have caused this Agreement to be duly executed on the date
first above written.




SIN-#284801-v6


Schedule 1




Form
of Drawdown Notice




(referred
to in clause 2.2)









To:           The
Bank of Nova Scotia Asia Limited


1 Raffles
Quay


#20-01
North Tower


One
Raffles Quay


Singapore
048583




[date]







Loan
facility of up to US$27,300,000 pursuant to a Loan Agreement dated [·] 2007




We refer
to the above Loan Agreement and hereby give you notice that we wish to draw down
the Loan, namely [$] [l] on [·] 2007 and select a first
Interest Period in respect thereof of [l] months.  The
funds should be credited to [name and number
of account] with [details of bank
in New York City].




We
confirm that:




(a)
            no
      event or circumstance has occurred and is continuing which constitutes a
      Default;




(b)
            the
      representations and warranties contained in clauses 7.1 and 7.2 of the Loan Agreement (and so that
      the representation and warranty in clause 7.1.9 refers for this purpose to the
      Audited Financial Statements in respect of the financial year ended on 31
      December 2005) are true and correct at the date hereof as if made with
      respect to the facts and circumstances existing at such date;
      and




(c)
            the
      borrowing to be effected by the drawdown of the Loan will be within our
      corporate powers, has been validly authorised by appropriate corporate
      action and will not cause any limit on our borrowings (whether imposed by
      statute, regulation, agreement or otherwise) to be exceeded;
      and




(d)
            there
      has been no material adverse change in our financial position from that
      set forth in the financial statements referred to in (b)
      above.




Words and
expressions defined in the Loan Agreement shall have the same meanings where
used herein.




For and
on behalf of




SAKONNET
SHIPPING LTD




SIN-#284801-v6







Schedule 2




Documents
and evidence required as conditions precedent




(referred
to in clause 9.1)




Part
1




(a)
            Constitutional
      documents




copies,
certified by an officer of each Security Party as true, complete and up to date
copies of all documents which contain or establish or relate to the constitution
of that Security Party;




(b)
            Corporate
      authorisations




copies of
resolutions of the directors of each Security Party approving such of the
Contract, the Charter, and the Security Documents to which such Security Party
is, or is to be, party and authorising the signature, delivery and performance
of such Security Party’s obligations thereunder, certified (in a certificate
dated no earlier than five (5) Banking Days prior to the date of this Agreement)
by an officer of such Security Party as:




(i)
            being
      true and correct;




(ii)
            being
      duly passed at meetings of the directors of such Security Party each duly
      convened and held;




(iii)
            not
      having been amended, modified or revoked;
and




(iv)
            being
      in full force and effect




and
incorporating specimen signatures of the persons who have been authorised on
behalf of each Security Party to sign such of the Contract, the Charter, the
Charter Guarantee, the Novation Agreement and the Security Documents to which
such Security Party is, or is to be, party and to give notices and
communications, including notices of drawing, under or in connection with the
Security Documents certified by an officer of such Security Party as being the
true signatures of such persons together with originals or certified copies of
any powers of attorney issued by any Security Party pursuant to such
resolutions;




(c)
            Certificate
      of incumbency




a list of
directors and officers of each Security Party specifying the names and positions
of such persons, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the date of this Agreement) by an officer of such Security
Party to be true, complete and up to date;




(d)
            Borrower’s
      consents and approvals




a
certificate (dated no earlier than five (5) Banking Days prior to the date of
this Agreement) from an officer of the Borrower that no consents,
authorisations, licences or approvals are necessary for the Borrower to
authorise or are required by the Borrower in connection with the borrowing by
the Borrower of the Loan pursuant to this Agreement or the execution, delivery
and performance of the Security Documents;




(e)
            Other
      consents and approvals




a
certificate (dated no earlier than five (5) Banking Days prior to the date of
this Agreement) from an officer of each Security Party (other than the Borrower)
that no consents, authorisations, licences or approvals are necessary for such
Security Party to guarantee and/or grant security for the borrowing by the
Borrower of the Commitment pursuant to this Agreement and execute, deliver and
perform the Security Documents insofar as such Security Party is a party
thereto;




(f)
            Certified
      Contract, Charter, Charter Guarantee and Novation
  Agreement




a copy,
certified (in a certificate dated no earlier than five (5) Banking Days prior to
the date of this Agreement) as a true and complete copy by an officer of the
Borrower of each of the Contract, the Charter, the Charter Guarantee and the
Novation Agreement;




(g)
            Valuation




valuation
from a professional valuer acceptable to the Bank (dated not more than ten (10)
days prior to the date of this Agreement) evidencing that the Security Value
will be not less than one hundred and thirty per cent (133%) of the Facility
Amount;




(h)
            Insurance
      opinion




an
opinion from insurance consultants acceptable to the Bank, on the insurances
effected or to be effected in respect of the Ship upon and following the
Drawdown Date;




(i)
            Fee




evidence
that the fee due under clause 5.1.1
has been paid in full;




(j)
            Earnings
      Account




evidence
that the Earnings Account has been opened with the Account Bank;




(k)
            Contract
      Price




evidence
that the initial twenty five per cent (25%) of the Contract Price of the Ship
has been paid; and




(l)
            Further
      conditions




such
further conditions, opinion or evidence as may reasonably be required by the
Bank.









SIN-#284801-v6


Part
2




(a)
            Drawdown
      Notice




the
Drawdown Notice duly executed and delivered to the Bank in accordance with
clause 2 of this Agreement;




(b)
            Ship
      conditions




evidence
that the Ship:




(i)
            Registration
      and Encumbrances




is
registered in the name of the Borrower through the Registry under the laws and
flag of the Flag State and that the Ship and its Earnings, Insurances and
Requisition Compensation (as defined in the Deed of Covenant) are free of
Encumbrances;




(ii)
            Classification




maintains
the Classification free of all requirements and recommendations of the
Classification Society;




(iii)
            Insurance




is
insured in accordance with the provisions of the Security Documents and all
requirements of the Security Documents in respect of such insurance have been
complied with (including without limitation, confirmation from the protection
and indemnity association or other insurer with which the Ship is, or is to be,
entered for insurance or insured against protection and indemnity risks
(including oil pollution risks) that any necessary declarations required by the
association or insurer for the removal of any oil pollution exclusion have been
made and that any such exclusion does not apply to the Ship); and




(iv)
            Delivery
      under Charter




has been
delivered to, and accepted by, the Charterer for service under the
Charter;




(c)
            Security
      Documents




the
Mortgage, the Deed of Covenant, the Corporate Guarantee, the Charter Assignment
and the Accounts Charge, each duly executed;




(d)
            Mortgage
      registration




evidence
that the Mortgage has been registered against the Ship through the Registry
under the laws and flag of the Flag State;




(e)
            Notices
      of assignment and acknowledgements




copies of
duly executed notices of assignment required by the terms of the Security
Documents and in the forms prescribed by the Security Documents with original
duly executed acknowledgements thereof to be delivered to the Bank within
fifteen (15) days of Delivery;




(f)
            Bahamas
      opinion




an
opinion of Higgs and Johnson, special legal advisers in the Commonwealth of the
Bahamas to the Bank;




(g)
            Marshall
      Islands opinion




an
opinion of Blank Rome LLP, special legal advisers in the Republic of the
Marshall Islands to the Bank;




(h)
            Liberia
      opinion




an
opinion of Blank Rome LLP special legal advisers in the Republic of Liberia to
the Bank;




(i)
            English
      opinion




an
opinion of Norton Rose, special legal advisers in the United Kingdom to the
Bank;




(j)
            Further
      opinions




any such
further opinion as may be required by the Bank;




(k)
            Borrower’s
      process agent




a copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Borrower’s agent for receipt of service of
proceedings referred to in clause 17.2 accepting its appointment under the
said clause and under each of the other Security Documents in which it is
or is to be appointed as the Borrower’s agent;




(l)
            Corporate
      Guarantor’s process agent




copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Corporate Guarantor’s agent for receipt of
service of proceedings referred to in clause 9.2 of the Corporate Guarantee
accepting its appointment under the said clause;




(m)
            Certificates
      of financial responsibility




a copy of
a certificate of financial responsibility complying with the requirements of the
United States Oil Pollution Act 1990 or the United States Comprehensive
Environmental Response Compensation Liability Act 1980 together with evidence of
approval thereof by the relevant regulatory authorities;




(n)
            Payment
      of Contract Price




evidence
that the Contract Price has been (or upon drawdown of the Loan will have been)
paid in full and that the Borrower is in compliance with
clause 8.1.13;




(o)
            ISM
      Code compliance




either
(i) a copy, certified as a true copy by an officer of the Borrower, of the
provisional SMC for the Ship and the DOC or (ii) evidence satisfactory to the
Bank that the Borrower or any Operator has applied to the Regulatory Agency for
an SMC for the Ship to be issued pursuant to the ISM Code within any time limit,
required or recommended by such Regulatory Agency;




(p)
            ISSC




A copy,
certified as a true copy by an officer of the Borrower or the Operator, of the
provisional  ISSC for the Ship;




(q)
            Conditions
      precedent




evidence
that the conditions precedent set out in schedule 2 part 1 remain satisfied
and confirmation from the Borrower that no further consents or approvals are
required; and




(r)
            Further
      conditions




such
further conditions, opinions or evidence as may be reasonably required by the
Bank.














SIN-#284801-v6


Schedule 3




Form
of Mortgage




SIN-#284801-v6


Schedule 4




Form
of Deed of Covenant




SIN-#284801-v6


Schedule 5




Form
of Accounts Charge




SIN-#284801-v6


Schedule 6




Form
of Corporate Guarantee




SIN-#284801-v6


Schedule 7




Form
of Charter Assignment




SIN-#284801-v6





SIGNED and DELIVERD as a DEED


by        /s/
R. Anthony
Dalzell                                                       )


for and
on behalf
of                                                               )


SAKONNET SHIPPING
LTD.                                                               )


pursuant
to a Power of Attorney
dated                                                                                )      ...............................................


in the
presence of:   /s/  William
MacLachlan                                         )                 Attorney-in-fact



















SIGNED and DELIVERD as a DEED


by        /s/
Cheong Seng Huoa
Benny                                                       )


for and
on behalf
of                                                               )


THE BANK OF NOVA SCOTIA ASIA
LIMITED                                                                                                )


pursuant
to a Power of Attorney
dated                                                                                )      ...........................................


in the
presence of:     /s/ Grant
Shultz                                                 )                 Attorney-in-fact




SIN-#284801-v6