exhibit1011.htm


                                                                                                                            Execution
      Version


    
      


       

      
 

    

    LOAN
      AGREEMENT PROVIDING FOR A

    SENIOR
      SECURED TERM LOAN

    OF
      UP TO ¥5,000,000,000

    


    


    WATERMAN
      STEAMSHIP CORPORATION

    as
      Borrower,

    


    AND

    


    The
      Banks and Financial Institutions listed on Schedule I
      hereto,

    as
      Lenders,

    


    AND

    


    DNB
      NOR BANK ASA,

    as
      Facility Agent and as Security Trustee,

    


    


    AND

    


    INTERNATIONAL
      SHIPHOLDING CORPORATION,

    as
      Guarantor

    


     

    
      


      


    

    September 10,
      2007

    


    



    
      
              

                  
      
      

                  
      
      

                                 
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  TABLE
            OF
            CONTENTS      
      

                  
      
      

                  Page      

           
    

      

    


    
      	
              1.

            	
              DEFINITIONS 

            	
              1

            


    

     

    
      	
               

            	
              1.1

            	
              Specific
                Definitions 

            	
              1

            


    

     

    
      	
               

            	
              1.2

            	
              Computation
                of Time Periods; Other Definitional
                Provisions12

            


    

     

    
      	
               

            	
              1.3

            	
              Accounting
                Terms 

            	
              12

            


    

     

    
      	
               

            	
              1.4

            	
              Certain
                Matters Regarding Materiality 

            	
              12

            


    

     

     

    
      	
              2.

            	
              REPRESENTATIONS
                AND WARRANTIES 

            	
              12

            


    

     

    
      	
               

            	
              2.1

            	
              Representations
                and Warranties 

            	
              12

            


    

     

    
      	
               

            	
              (a)

            	
              Due
                Organization and Power 

            	
              12

            


    

     

    
      	
               

            	
              (b)

            	
              Authorization
                and Consents 

            	
              12

            


    

     

    
      	
               

            	
              (c)

            	
              Binding
                Obligations 

            	
              13

            


    

     

    
      	
               

            	
              (d)

            	
              No
                Violation 

            	
              13

            


    

     

    
      	
               

            	
              (e)

            	
              Filings;
                Stamp Taxes 

            	
              13

            


    

     

    
      	
               

            	
              (f)

            	
              Litigation 

            	
              13

            


    

     

    
      	
               

            	
              (g)

            	
              No
                Default 

            	
              13

            


    

     

    
      	
               

            	
              (h)

            	
              Vessel 

            	
              13

            


    

     

    
      	
               

            	
              (i)

            	
              Insurance 

            	
              14

            


    

     

    
      	
               

            	
              (j)

            	
              Financial
                Information 

            	
              14

            


    

     

    
      	
               

            	
              (k)

            	
              Tax
                Returns 

            	
              14

            


    

     

    
      	
               

            	
              (l)

            	
              ERISA 

            	
              14

            


    

     

    
      	
               

            	
              (m)

            	
              Chief
                Executive Office 

            	
              14

            


    

     

    
      	
               

            	
              (n)

            	
              Foreign
                Trade Control Regulations 

            	
              14

            


    

     

    
      	
               

            	
              (o)

            	
              Equity
                Ownership 

            	
              15

            


    

     

    
      	
               

            	
              (p)

            	
              Environmental
                Matters and Claims 

            	
              15

            


    

     

    
      	
               

            	
              (q)

            	
              Compliance
                with ISM Code, ISPS Code and MTSA 

            	
              15

            


    

     

    
      	
               

            	
              (r)

            	
              Threatened
                Withdrawal of DOC or SMC 

            	
              16

            


    

     

    
      	
               

            	
              (s)

            	
              Liens 

            	
              16

            


    

     

    
      	
               

            	
              (t)

            	
              Indebtedness 

            	
              16

            


    

     

    
      	
               

            	
              (u)

            	
              Payment
                Free of Taxes 

            	
              16

            


    

     

    
      	
               

            	
              (v)

            	
              No
                Proceedings to Dissolve 

            	
              16

            


    

     

    
      	
               

            	
              (w)

            	
              Solvency 

            	
              16

            


    

     

    
      	
               

            	
              (x)

            	
              Compliance
                with Laws 

            	
              16

            


    

     

    
      	
               

            	
              (y)

            	
              Survival 

            	
              16

            


    

     

     

    
      	
              3.

            	
              THE
                LOAN 

            	
              16

            


    

     

    
      	
               

            	
              3.1

            	
              (a)
                Purposes 

            	
              16

            


    

     

    
      	
               

            	
              (b)

            	
              Making
                of the Loan 

            	
              16

            


    

     

    
      	
               

            	
              3.2

            	
              Drawdown
                Notice 

            	
              17

            


    

     

    
      	
               

            	
              3.3

            	
              Effect
                of Drawdown Notice 

            	
              17

            


    

     

     

    
      	
              4.

            	
              CONDITIONS 

            	
              17

            


    

     

    
      	
               

            	
              4.1

            	
              Conditions
                Precedent to the Effectiveness of this
                Agreement17

            


    

     

    
      	
               

            	
              (a)

            	
              Corporate
                Authority 

            	
              17

            


    

     

    
      	
               

            	
              (b)

            	
              The
                Agreement 

            	
              18

            


    

     

    
      	
               

            	
              (c)

            	
              The
                Note 

            	
              18

            


    

     

    
      	
               

            	
              (d)

            	
              The
                Creditors 

            	
              18

            


    

     

    
      	
               

            	
              (e)

            	
              Fees 

            	
              18

            


    

     

    
      	
               

            	
              (f)

            	
              Environmental
                Claims 

            	
              18

            


    

     

    
      	
               

            	
              (g)

            	
              Legal
                Opinions 

            	
              18

            


    

     

    
      	
               

            	
              (h)

            	
              Officer's
                Certificate 

            	
              18

            


    

     

    
      	
               

            	
              (i)

            	
              Vessel
                Documents 

            	
              18

            


    

     

    
      	
               

            	
              (j)

            	
              Security
                Documents 

            	
              19

            


    

     

    
      	
               

            	
              (k)

            	
              Vessel
                Appraisals 

            	
              19

            


    

     

    
      	
               

            	
              (l)

            	
              ISM
                DOC 

            	
              19

            


    

     

    
      	
               

            	
              (m)

            	
              Evidence
                of Current COFR 

            	
              19

            


    

     

    
      	
               

            	
              (n)

            	
              Vessel
                Liens 

            	
              19

            


    

     

    
      	
               

            	
              (o)

            	
              Charter 

            	
              19

            


    

     

    
      	
               

            	
              (p)

            	
              Memorandum
                of Agreement 

            	
              19

            


    

     

    
      	
               

            	
              (q)

            	
              Vessel
                Delivery 

            	
              19

            


    

     

    
      	
               

            	
              (r)

            	
              Maritime
                Administration Approval 

            	
              19

            


    

     

    
      	
               

            	
              4.2

            	
              Further
                Conditions Precedent 

            	
              20

            


    

     

    
      	
               

            	
              (a)

            	
              Drawdown
                Notice 

            	
              20

            


    

     

    
      	
               

            	
              (b)

            	
              Representations
                and Warranties True 

            	
              20

            


    

     

    
      	
               

            	
              (c)

            	
              No
                Default 

            	
              20

            


    

     

    
      	
               

            	
              (d)

            	
              No
                Material Adverse Effect 

            	
              20

            


    

     

    
      	
               

            	
              4.3

            	
              Breakfunding
                Costs 

            	
              20

            


    

     

    
      	
               

            	
              4.4

            	
              Satisfaction
                after Drawdown 

            	
              20

            


    

     

     

    
      	
              5.

            	
              REPAYMENT
                AND PREPAYMENT 

            	
              20

            


    

     

    
      	
               

            	
              5.1

            	
              Repayment 

            	
              20

            


    

     

    
      	
               

            	
              5.2

            	
              Voluntary
                Prepayment; No Re-borrowing 

            	
              20

            


    

     

    
      	
               

            	
              5.3

            	
              Mandatory
                Prepayment; Sale or Loss of Vessel 

            	
              21

            


    

     

    
      	
               

            	
              5.4

            	
              Interest
                and Cost With Application of Prepayments 

            	
              21

            


    

     

    
      	
               

            	
              5.5

            	
              Borrower's
                Obligation Absolute 

            	
              21

            


    

     

     

    
      	
              6.

            	
              INTEREST
                AND RATE 

            	
              21

            


    

     

    
      	
               

            	
              6.1

            	
              Payment
                of Interest; Interest Rate 

            	
              21

            


    

     

    
      	
               

            	
              6.2

            	
              Maximum
                Interest 

            	
              22

            


    

     

     

    
      	
              7.

            	
              PAYMENTS 

            	
              22

            


    

     

    
      	
               

            	
              7.1

            	
              Place
                of Payments, No Set Off 

            	
              22

            


    

     

    
      	
               

            	
              7.2

            	
              Tax
                Credits 

            	
              22

            


    

     

    
      	
               

            	
              7.3

            	
              Computations;
                Banking Days 

            	
              22

            


    

     

     

    
      	
              8.

            	
              EVENTS
                OF DEFAULT 

            	
              23

            


    

     

    
      	
               

            	
              8.1

            	
              Events
                of Default 

            	
              23

            


    

     

    
      	
               

            	
              (a)

            	
              Principal
                Payments 

            	
              23

            


    

     

    
      	
               

            	
              (b)

            	
              Interest
                and other Payments 

            	
              23

            


    

     

    
      	
               

            	
              (c)

            	
              Representations,
                etc 

            	
              23

            


    

     

    
      	
               

            	
              (d)

            	
              Impossibility,
                Illegality 

            	
              23

            


    

     

    
      	
               

            	
              (e)

            	
              Mortgage 

            	
              23

            


    

     

    
      	
               

            	
              (f)

            	
              Certain
                Covenants 

            	
              23

            


    

     

    
      	
               

            	
              (g)

            	
              Covenants 

            	
              23

            


    

     

    
      	
               

            	
              (h)

            	
              Indebtedness
                and Other Obligations 

            	
              23

            


    

     

    
      	
               

            	
              (i)

            	
              Bankruptcy 

            	
              24

            


    

     

    
      	
               

            	
              (j)

            	
              Judgments 

            	
              24

            


    

     

    
      	
               

            	
              (k)

            	
              Inability
                to Pay Debts 

            	
              24

            


    

     

    
      	
               

            	
              (l)

            	
              Termination
                of Operations; Sale of Assets 

            	
              24

            


    

     

    
      	
               

            	
              (m)

            	
              Change
                in Financial Position 

            	
              24

            


    

     

    
      	
               

            	
              (n)

            	
              Cross-Default 

            	
              24

            


    

     

    
      	
               

            	
              (o)

            	
              ERISA
                Debt 

            	
              24

            


    

     

    
      	
               

            	
              (p)

            	
              Time
                Charter 

            	
              24

            


    

     

    
      	
               

            	
              8.2

            	
              Indemnification 

            	
              25

            


    

     

    
      	
               

            	
              8.3

            	
              Application
                of Moneys 

            	
              25

            


    

     

     

    
      	
              9.

            	
              COVENANTS 

            	
              26

            


    

     

    
      	
               

            	
              9.1

            	
              Affirmative
                Covenants 

            	
              26

            


    

     

    
      	
               

            	
              (a)

            	
              Performance
                of Agreements 

            	
              26

            


    

     

    
      	
               

            	
              (b)

            	
              Notice
                of Default, etc 

            	
              26

            


    

     

    
      	
               

            	
              (c)

            	
              Obtain
                Consents 

            	
              26

            


    

     

    
      	
               

            	
              (d)

            	
              Financial
                Information 

            	
              26

            


    

     

    
      	
               

            	
              (e)

            	
              Contingent
                Liabilities 

            	
              27

            


    

     

    
      	
               

            	
              (f)

            	
              Vessel
                Valuations 

            	
              27

            


    

     

    
      	
               

            	
              (g)

            	
              Corporate
                Existence 

            	
              27

            


    

     

    
      	
               

            	
              (h)

            	
              Books
                and Records 

            	
              27

            


    

     

    
      	
               

            	
              (i)

            	
              Taxes
                and Assessments 

            	
              27

            


    

     

    
      	
               

            	
              (j)

            	
              Inspection 

            	
              28

            


    

     

    
      	
               

            	
              (k)

            	
              Inspection
                and Survey Reports 

            	
              28

            


    

     

    
      	
               

            	
              (l)

            	
              Compliance
                with Statutes, Agreements, etc 

            	
              28

            


    

     

    
      	
               

            	
              (m)

            	
              Environmental
                Matters 

            	
              28

            


    

     

    
      	
               

            	
              (n)

            	
              Insurance 

            	
              28

            


    

     

    
      	
               

            	
              (o)

            	
              Vessel
                Management 

            	
              28

            


    

     

    
      	
               

            	
              (p)

            	
              Brokerage
                Commissions, etc 

            	
              28

            


    

     

    
      	
               

            	
              (q)

            	
              ISM
                Code, ISPS Code and MTSA Matters 

            	
              29

            


    

     

    
      	
               

            	
              (r)

            	
              ERISA 

            	
              29

            


    

     

    
      	
               

            	
              (s)

            	
              Evidence
                of Current COFR 

            	
              29

            


    

     

    
      	
               

            	
              (t)

            	
              Mortgage 

            	
              29

            


    

     

    
      	
               

            	
              9.2

            	
              Negative
                Covenants 

            	
              29

            


    

     

    
      	
               

            	
              (a)

            	
              Liens 

            	
              29

            


    

     

    
      	
               

            	
              (b)

            	
              Third
                Party Guaranties 

            	
              30

            


    

     

    
      	
               

            	
              (c)

            	
              Liens
                on Shares of Borrower 

            	
              30

            


    

     

    
      	
               

            	
              (d)

            	
              Subordination
                of Inter-Company Indebtedness 

            	
              30

            


    

     

    
      	
               

            	
              (e)

            	
              Transaction
                with Affiliates 

            	
              30

            


    

     

    
      	
               

            	
              (f)

            	
              Change
                of Flag, Class, Management or Ownership 

            	
              30

            


    

     

    
      	
               

            	
              (g)

            	
              Chartering 

            	
              30

            


    

     

    
      	
               

            	
              (h)

            	
              Change
                in Business 

            	
              30

            


    

     

    
      	
               

            	
              (i)

            	
              Sale
                of Assets 

            	
              30

            


    

     

    
      	
               

            	
              (j)

            	
              Changes
                in Offices or Names 

            	
              31

            


    

     

    
      	
               

            	
              (k)

            	
              Consolidation
                and Merger 

            	
              31

            


    

     

    
      	
               

            	
              (l)

            	
              Change
                Fiscal Year 

            	
              31

            


    

     

    
      	
               

            	
              (m)

            	
              Indebtedness 

            	
              31

            


    

     

    
      	
               

            	
              (n)

            	
              Limitations
                on Ability to Make Distributions 

            	
              31

            


    

     

    
      	
               

            	
              (o)

            	
              Change
                of Control 

            	
              31

            


    

     

    
      	
               

            	
              (p)

            	
              No
                Money Laundering 

            	
              31

            


    

     

    
      	
               

            	
              9.3

            	
              Financial
                Covenants 

            	
              31

            


    

     

    
      	
               

            	
              (a)

            	
              Consolidated
                Indebtedness to Consolidated EBITDA Ratio 

            	
              31

            


    

     

    
      	
               

            	
              (b)

            	
              Working
                Capital 

            	
              31

            


    

     

    
      	
               

            	
              (c)

            	
              Consolidated
                Tangible Net Worth 

            	
              32

            


    

     

    
      	
               

            	
              (d)

            	
              Consolidated
                EBITDA to Interest Expense 

            	
              32

            


    

     

    
      	
               

            	
              9.4

            	
              Asset
                Maintenance 

            	
              32

            


    

     

     

    
      	
              10.

            	
              GUARANTEE 

            	
              32

            


    

     

    
      	
               

            	
              10.1

            	
              The
                Guarantee 

            	
              32

            


    

     

    
      	
               

            	
              10.2

            	
              Obligations
                Unconditional 

            	
              32

            


    

     

    
      	
               

            	
              10.3

            	
              Reinstatement 

            	
              33

            


    

     

    
      	
               

            	
              10.4

            	
              Subrogation 

            	
              33

            


    

     

    
      	
               

            	
              10.5

            	
              Remedies 

            	
              33

            


    

     

    
      	
               

            	
              10.6

            	
              Joint,
                Several and Solidary Liability 

            	
              34

            


    

     

    
      	
               

            	
              10.7

            	
              Continuing
                Guarantee 

            	
              34

            


    

     

     

    
      	
              11.

            	
              ASSIGNMENT 

            	
              34

            


    

     

     

    
      	
              12.

            	
              ILLEGALITY,
                INCREASED COST, NON-AVAILABILITY, ETC 

            	
              34

            


    

     

    
      	
               

            	
              12.1

            	
              Illegality 

            	
              34

            


    

     

    
      	
               

            	
              12.2

            	
              Increased
                Costs 

            	
              35

            


    

     

    
      	
               

            	
              12.3

            	
              Nonavailability
                of Funds 

            	
              35

            


    

     

    
      	
               

            	
              12.4

            	
              Lender's
                Certificate Conclusive 

            	
              36

            


    

     

    
      	
               

            	
              12.5

            	
              Compensation
                for Losses 

            	
              36

            


    

     

     

    
      	
              13.

            	
              CURRENCY
                INDEMNITY 

            	
              36

            


    

     

    
      	
               

            	
              13.1

            	
              Currency
                Conversion 

            	
              36

            


    

     

    
      	
               

            	
              13.2

            	
              Change
                in Exchange Rate 

            	
              36

            


    

     

    
      	
               

            	
              13.3

            	
              Additional
                Debt Due 

            	
              36

            


    

     

    
      	
               

            	
              13.4

            	
              Rate
                of Exchange 

            	
              36

            


    

     

     

    
      	
              14.

            	
              FEES
                AND EXPENSES 

            	
              37

            


    

     

    
      	
               

            	
              14.1

            	
              Fees

            	
              37

            


    

     

    
      	
               

            	
              14.2

            	
              Expenses 

            	
              37

            


    

     

     

    
      	
              15.

            	
              APPLICABLE
                LAW, JURISDICTION AND WAIVER 

            	
              37

            


    

     

    
      	
               

            	
              15.1

            	
              Applicable
                Law 

            	
              37

            


    

     

    
      	
               

            	
              15.2

            	
              Jurisdiction 

            	
              37

            


    

     

    
      	
               

            	
              15.3

            	
              WAIVER
                OF JURY TRIAL 

            	
              38

            


    

     

     

    
      	
              16.

            	
              THE
                AGENTS 

            	
              38

            


    

     

    
      	
               

            	
              16.1

            	
              Appointment
                of Agents 

            	
              38

            


    

     

    
      	
               

            	
              16.2

            	
              Appointment
                of Security  Trustee 

            	
              38

            


    

     

    
      	
               

            	
              16.3

            	
              Distribution
                of Payments 

            	
              38

            


    

     

    
      	
               

            	
              16.4

            	
              Holder
                of Interest in Note 

            	
              39

            


    

     

    
      	
               

            	
              16.5

            	
              No
                Duty to Examine, Etc 

            	
              39

            


    

     

    
      	
               

            	
              16.6

            	
              Agents
                as Lenders 

            	
              39

            


    

     

    
      	
               

            	
              16.7

            	
              Acts
                of the Agents 

            	
              39

            


    

     

    
      	
               

            	
              (a)

            	
              Obligations
                of the Agents 

            	
              39

            


    

     

    
      	
               

            	
              (b)

            	
              No
                Duty to Investigate 

            	
              39

            


    

     

    
      	
               

            	
              (c)

            	
              Discretion
                of the Agents 

            	
              39

            


    

     

    
      	
               

            	
              (d)

            	
              Instructions
                of Majority Lenders 

            	
              39

            


    

     

    
      	
               

            	
              16.8

            	
              Certain
                Amendments 

            	
              40

            


    

     

    
      	
               

            	
              16.9

            	
              Assumption
                re Event of Default 

            	
              40

            


    

     

    
      	
              16.10

            	
              Limitations
                of Liability 

            	
              40

            


    

     

    
      	
              16.11

            	
              Indemnification
                of the Agent and Security Trustee 

            	
              41

            


    

     

    
      	
              16.12

            	
              Consultation
                with Counsel 

            	
              41

            


    

     

    
      	
              16.13

            	
              Resignation 

            	
              41

            


    

     

    
      	
              16.14

            	
              Representations
                of Lenders 

            	
              41

            


    

     

    
      	
              16.15

            	
              Notification
                of Event of Default 

            	
              41

            


    

     

     

    
      	
              17.

            	
              NOTICES
                AND DEMANDS 

            	
              41

            


    

     

    
      	
               

            	
              17.1

            	
              Notices 

            	
              41

            


    

     

     

    
      	
              18.

            	
              MISCELLANEOUS 

            	
              42

            


    

     

    
      	
               

            	
              18.1

            	
              Time
                of Essence 

            	
              42

            


    

     

    
      	
               

            	
              18.2

            	
              Unenforceable,
                etc., Provisions - Effect 

            	
              42

            


    

     

    
      	
               

            	
              18.3

            	
              References 

            	
              42

            


    

     

    
      	
               

            	
              18.4

            	
              Further
                Assurances 

            	
              42

            


    

     

    
      	
               

            	
              18.5

            	
              Prior
                Agreements, Merger 

            	
              43

            


    

     

    
      	
               

            	
              18.6

            	
              Entire
                Agreement; Amendments 

            	
              43

            


    

     

    
      	
               

            	
              18.7

            	
              Indemnification 

            	
              43

            


    

     

    
      	
               

            	
              18.8

            	
              Headings 

            	
              43

            


    

     

    


     

     

    SCHEDULES

    


    
      	
               

            	
              I

            	
              The
                Lenders and the Commitments

            


    

    II           Approved
      Ship Brokers

    III           Liens

    IV           Indebtedness

    


    


    EXHIBITS

    


    A            Form
      of Promissory Note

    B            Form
      of Drawdown Notice

    C            Form
      of Compliance Certificate

    D            Form
      of Assignment and Assumption Agreement

    E            Form
      of Earnings and Charterparties Assignment

    F            Form
      of Insurances Assignment

    G            Form
      of U.S. First Preferred Mortgage

    


     

    


     

     


    
      
              
        

          
            	                

                                       
                                      
                

                                       
                                      
                

                                                                       

                  	                

                                      --                
              	 


          
      
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SENIOR
      SECURED LOAN AGREEMENT

     

    THIS
      SENIOR SECURED LOAN AGREEMENT (the “Loan Agreement” or “Agreement”) is made as
      of the 10th day of September  2007, by and among (1) WATERMAN
      STEAMSHIP CORPORATION, a corporation organized and existing under the laws
      of
      the State of New York (the “Borrower”), (2) INTERNATIONAL SHIPHOLDING
      CORPORATION, a corporation organized and existing under the laws of the State
      of
      Delaware (the "Guarantor"), as guarantor, (3) the banks and financial
      institutions listed on Schedule I, as lenders (together with any bank or
      financial institution which becomes a Lender pursuant to Article 11, the
“Lenders” and each a “Lender”), (4) DNB NOR BANK ASA (“DnB NOR”), as
      facility agent (in such capacity including any successor thereto, the “Facility
      Agent”) and  as security trustee for the Lenders (in such capacity,
      the “Security Trustee” and, together with the Facility Agent, the
“Agents”).

     

    WITNESSETH
      THAT:

     

    WHEREAS,
      at the request of the Borrower, each of the Agents has agreed to serve in such
      capacity under the terms of this Agreement and the Lenders have agreed to
      provide to the Borrower a senior secured term loan facility in the amount of
      up
      to Five Billion Yen (¥5,000,000,000);

     

    NOW,
      THEREFORE, in consideration of the premises set forth above, the covenants
      and
      agreements hereinafter set forth, and other good and valuable consideration,
      the
      receipt and adequacy of which are hereby acknowledged, the parties hereto agree
      as set forth below:

     

    1.  DEFINITIONS

     

    1.1  Specific
      Definitions.  In this Agreement the words and expressions
      specified below shall, except where the context otherwise requires, have the
      meanings attributed to them below:

     

    
      	
              “Acceptable
                Accounting Firm”

            	
              shall
                mean Ernst & Young LLP, or such other Securities and Exchange
                Commission recognized accounting firm as shall be approved by the
                Facility
                Agent, such approval not to be unreasonably withheld;

            
	
              “Affiliate”

            	
              shall
                mean with respect to any Person, any other Person directly or indirectly
                controlled by or under common control with such Person.  For the
                purposes of this definition, “control” (including, with correlative
                meanings, the terms “controlled by” and “under common control with”) as
                applied to any Person means the possession directly or indirectly
                of the
                power to direct or cause the direction of the management and policies
                of
                that Person whether through ownership of voting securities or by
                contract
                or otherwise;

            
	
              “Agents”

            	
              shall
                have the meaning ascribed thereto in the preamble;

            
	
              “Agreement”

            	
              shall
                mean this Agreement, as the same shall be amended, modified or
                supplemented from time to time;

            
	
              “Applicable
                Margin”

            	
              shall
                mean eighty-five one-hundredths of one percent (0.85%);

            
	
              “Applicable
                Rate”

            	
              shall
                mean any rate of interest applicable to the Loan from time to time
                pursuant to Section 6.1;

            
	
              “Assignment
                and Assumption Agreement(s)”

            	
              shall
                mean any Assignment and Assumption Agreement(s) executed pursuant
                to
                Section 11 substantially in the form set out in
                Exhibit D;

            
	
              “Assignment
                Notices”

            	
              shall
                mean (a) the notice with respect to the Earnings and Charterparties
                Assignment substantially in the form set out in Exhibit 1 thereto and
                (b) the notice with respect to the Insurances Assignment substantially
                in
                the form set out in Exhibit 3 thereto;

            
	
              “Assignments”

            	
              shall
                mean the Earnings and Charterparties Assignment and the Insurances
                Assignment;

            
	
              “Banking
                Day(s)”

            	
              shall
                mean any day that is not a Saturday, Sunday or other day on which
                (a)
                banks in New York, New York and London, England are authorized or
                required
                by law to remain closed, or (b) banks are not generally open for
                dealing
                in dollar deposits in the London interbank market;

            
	
              “Borrower”

            	
              shall
                have the meaning ascribed thereto in the preamble;

            
	
              “Change
                of Control”

            	
              shall
                mean (a) any “person” (as such term is used in Sections 13(d) and 14(d) of
                the Exchange Act), other than the existing owners, that becomes the
                beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
                Act), directly or indirectly, of more than 30% of the total voting
                power
                of the Guarantor or (b)  the Guarantor ceases to own, directly or
                indirectly, 100% of the Borrower or (c) the Board of Directors of
                the
                Borrower or the Guarantor ceases to consist of a majority of the
                directors
                existing on the date hereof or directors nominated by at least two-thirds
                (2/3) of the then existing directors or (d) the Johnsen Family shall
                cease
                to own at least twenty percent (20%) of the Guarantor;

            
	
              “Charterer’s
                Acknowledgment”

            	
              shall
                mean the acknowledgment of the Time Charterer to the Assignment of
                Earnings and Charterparties in the form of Exhibit 2
                thereto;

            
	
              “Classification
                Society”

            	
              shall
                mean a member of the International Association of Classification
                Societies
                acceptable to the Lenders with whom the Vessel is entered and who
                conducted periodic physical surveys and/or inspections of the
                Vessel;

            
	
              “Closing
                Date”

            	
              shall
                mean the day and year first written above;

            
	
              “Code”

            	
              shall
                mean the Internal Revenue Code of 1986, as amended, and any successor
                statute and regulation promulgated thereunder;

            
	
              “Collateral”

            	
              shall
                mean, all property or other assets, real or personal, tangible or
                intangible, whether now owned or hereafter acquired in which the
                Security
                Trustee or any Lender has been granted a security interest pursuant
                to a
                Security Document;

            
	
              “Commitment(s)”

            	
              shall
                mean in relation to a Lender, the portion of the Loan set out opposite
                its
                name in Schedule I hereto or, as the case may be, in any relevant
                Assignment and Assumption Agreement, as changed from time to time
                pursuant
                to the terms of this Agreement;

            
	
              “Compliance
                Certificate”

            	
              shall
                mean a certificate certifying the compliance by each of the Security
                Parties with all of its covenants contained herein and showing the
                calculations thereof in reasonable detail, delivered by the chief
                financial officer of the Guarantor to the Facility Agent from time
                to time
                pursuant to Section 9.1(d) in the form set out in Exhibit C or
                in such other form as the Facility Agent may agree;

            
	
              “Consolidated
                EBITDA”

            	
              shall
                mean, for any period, with respect to the Guarantor and the Subsidiaries,
                the sum of (without duplication) (a) Consolidated Net Income; (b)
                all
                Interest Expenses of the Guarantor and the Subsidiaries; (c) income
                taxes
                of the Guarantor and the Subsidiaries; and (d) depreciation and
                amortization, as well as other non-cash charges to the extent they
                have
                been deducted from income, of the Guarantor and the Subsidiaries
                determined on a consolidated basis in accordance with GAAP for such
                period; provided that if any Subsidiary is not wholly-owned by the
                Guarantor, Consolidated EBITDA shall be reduced (to the extent not
                otherwise reduced in accordance with GAAP) by an amount equal to
                (i) the
                amount of Consolidated Net Income attributable to such Subsidiary
                multiplied by (ii) the percentage ownership interest in the income
                of such
                Subsidiary not owned by the Guarantor on the last day of such period,
                but
                adding back other non-cash charges to the extent they have been deducted
                from income in accordance with GAAP;

            
	
              “Consolidated
                Indebtedness”

            	
              all
                Indebtedness of the Guarantor and the Subsidiaries determined on
                a
                consolidated basis in accordance with GAAP;

            
	
              “Consolidated
                Net Income”

            	
              for
                any period shall mean the consolidated net income of the Guarantor
                and the
                Subsidiaries for such period, as shown on the consolidated financial
                statements of the Guarantor and the Subsidiaries delivered in accordance
                with Section 9.1 (d);

            
	
              “Consolidated
                Tangible Net Worth”

            	
              shall
                mean, with respect to the Guarantor and its Subsidiaries, at any
                date for
                which a determination is to be made (determined on a consolidated
                basis
                without duplication in accordance with GAAP) (a) the amount of capital
                stock (including its outstanding preferred stock); plus (b) the amount
                of
                surplus and retained earnings (or, in the case of a surplus or retained
                earnings deficit, minus the amount of such deficit); plus (c) deferred
                charges to the extent amortized and acquired contract costs net of
                accumulated amortization as stated on the then most recent audited
                balance
                sheet of the Guarantor; minus (d) the sum of (i) the cost of treasury
                shares and (ii) the book value of all assets that should be classified
                as
                intangibles (without duplication of deductions in respect of items
                already
                deducted in arriving at surplus and retained earnings) but in any
                event
                including goodwill, minority interests, research and development
                costs,
                trademarks, trade names, copyrights, patents and franchises, unamortized
                debt discount and expense, all reserves and any write up in the book
                value
                of assets resulting from a revaluation thereof subsequent to December
                31,
                1996;

            
	
              “Creditors”

            	
              shall
                mean, together, the Agents and the Lenders, each a
                “Creditor”;

            
	
              “Default”

            	
              shall
                mean any event that would, with the giving of notice or passage of
                time,
                or both, be an Event of Default;

            
	
              “Default
                Rate”

            	
              shall
                mean a rate per annum equal to two percent (2%) over the Applicable
                Rate
                then in effect;

            
	
              “DnB
                NOR”

            	
              shall
                have the meaning ascribed thereto in the preamble;

            
	
              “DOC”

            	
              shall
                mean a document of compliance issued to an Operator in accordance
                with
                rule 13 of the ISM Code;

            
	
              “Dollars”
                and the sign “$”

            	
              shall
                mean the legal currency, at any relevant time hereunder, of the United
                States of America and, in relation to all payments hereunder, in
                same day
                funds settled through the New York Clearing House Interbank Payments
                System (or such other Dollar funds as may be determined by the Facility
                Agent to be customary for the settlement in New York City of banking
                transactions of the type herein involved);

            
	
              “Drawdown
                Date”

            	
              shall
                mean the date, being a Banking Day, upon which the Borrower has requested
                that the Loan be made available to the Borrower, and the Loan is
                made, as
                provided in Section 3;

            
	
              “Drawdown
                Notice”

            	
              shall
                have the meaning ascribed thereto in Section 3.2;

            
	
              “Earnings
                and Charterparties Assignment”

            	
              shall
                mean the first priority assignment of earnings, charterparties and
                requisition compensation in respect of (i) the earnings of the Vessel
                from
                any and all sources (including requisition compensation) and (ii)
                any
                charter (including the Time Charter) or other contract relating to
                the
                Vessel, to be executed by the Borrower in favor of the Security Trustee
                pursuant to Section 4.1(k), substantially in the form set out in
                Exhibit E;

            
	
              “Environmental
                Affiliate(s)”

            	
              shall
                mean, with respect to a Security Party, any Person or entity, the
                liability of which for Environmental Claims any Security Party may
                have
                assumed by contract or operation of law;

            
	
              “Environmental
                Approval(s)”

            	
              shall
                have the meaning ascribed thereto in
                Section 2.1(p);

            
	
              “Environmental
                Claim(s)”

            	
              shall
                have the meaning ascribed thereto in
                Section 2.1(p);

            
	
              “Environmental
                Law(s)”

            	
              shall
                have the meaning ascribed thereto in
                Section 2.1(p);

            
	
              “ERISA”

            	
              shall
                mean the Employment Retirement Income Security Act of 1974, as
                amended;

            
	
              “ERISA
                Affiliate”

            	
              shall
                mean a trade or business (whether or not incorporated) which is under
                common control with the Borrower within the meaning of Sections 414(b),
                (c), (m) or (o) of the Code;

            
	
              “ERISA
                Group”

            	
              shall
                mean the Guarantor and its subsidiaries within the meaning of Section
                424(f) of the Code;

            
	
              “Event(s)
                of Default”

            	
              shall
                mean any of the events set out in Section 8.1;

            
	
              “Exchange
                Act”

            	
              shall
                mean the Securities and Exchange Act of 1934, as
                amended;

            
	
              “Facility
                Agent”

            	
              shall
                have the meaning ascribed thereto in the preamble;

            
	
              “Fair
                Market Value”

            	
              shall
                mean, in respect of the Vessel, the average of two appraisals on
                a
                “willing seller, willing buyer” basis of the Vessel from ship brokers
                listed in Schedule II or such other independent ship brokers approved
                by
                the Majority Lenders, no such appraisal to be dated more than thirty
                (30)
                days prior to the date on which a determination of Fair Market Value
                is
                required pursuant to this Agreement;

            
	
              “Final
                Payment”

            	
              shall
                mean the principal amount of Four Billion Two Hundred Fifty Million
                and
                Two Yen (¥4,250,000,002) plus such other amounts as may be necessary to
                repay the Loan in full together with accrued but unpaid interest
                and any
                other amounts owing by any Security Party  to any Creditor
                pursuant to this Agreement, the Note or any Security
                Document;

            
	
              “Final
                Payment Date”

            	
              shall
                mean the date which is three (3) years from the date hereof, unless
                such
                date is not a Banking Day, in which case the Final Payment Date shall
                be
                the Banking Day immediately preceding such three (3) year anniversary
                of
                the date hereof;

            
	
              “GAAP”

            	
              shall
                have the meaning ascribed thereto in Section 1.3;

            
	
              “Guaranteed
                Obligations”

            	
              shall
                have the meaning ascribed thereto in Section 10.1;

            
	
              “Guarantor”

            	
              shall
                have the meaning ascribed thereto in the preamble;

            
	
              “Indebtedness”

            	
              shall mean,
                with respect to any Person at any date of determination (without
                duplication), (i) all indebtedness of such Person for borrowed money,
                (ii) all obligations of such Person evidenced by bonds, debentures,
                notes or other similar instruments, (iii) all obligations of such
                Person in respect of letters of credit or other similar instruments
                (including reimbursement obligations with respect thereto), (iv) all
                obligations of such Person to pay the deferred and unpaid purchase
                price
                of property or services, which purchase price is due more than six
                months
                after the date of placing such property in service or taking delivery
                thereof or the completion of such services, except trade payables,
                (v) all obligations on account of principal of such Person as lessee
                under capitalized leases, (vi) all indebtedness of other Persons
                secured by a lien on any asset of such Person, whether or not such
                indebtedness is assumed by such Person; provided that the amount
                of such
                indebtedness shall be the lesser of (a) the fair market value of such
                asset at such date of determination and (b) the amount of such
                indebtedness, and (vii) all indebtedness of other Persons guaranteed
                by such Person to the extent guaranteed; the amount of Indebtedness
                of any
                Person at any date shall be the outstanding balance at such date
                of all
                unconditional obligations as described above and, with respect to
                contingent obligations, the maximum liability upon the occurrence
                of the
                contingency giving rise to the obligation, provided that the amount
                outstanding at any time of any indebtedness issued with original
                issue
                discount is the face amount of such indebtedness less the remaining
                unamortized portion of  the original issue discount of such
                indebtedness at such time as determined in conformity with GAAP;
                and
                provided further that Indebtedness shall not include any liability
                for
                current or deferred federal, state, local or other taxes, or any
                trade
                payables;

            
	
              “Indemnitee”

            	
              shall
                have the meaning ascribed thereto in Section 18.7;

            
	
              “Insurances
                Assignment”

            	
              shall
                mean the first priority assignment in respect of the insurances over
                the
                Vessel, to be executed by the Borrower in favor of the Security Trustee
                pursuant to Section 4.1(j), substantially in the form set out in
                Exhibit
                F;

            
	
              “Interest
                Expense”

            	
              shall
                mean, with respect to the Guarantor and the Subsidiaries, on a
                consolidated basis, for any period (without duplication), interest
                expense, whether paid or accrued (including the interest component
                of
                capitalized leases), on all Indebtedness of the Guarantor and the
                Subsidiaries for such period, net of interest income, all determined
                in
                accordance with GAAP;

            
	
              “Initial
                Payment Date”

            	
              shall
                mean the date which is three (3) months after the Drawdown
                Date;

            
	
              “Interest
                Period”

            	
              shall
                mean period(s) of one, three, six or twelve months as selected by
                the
                Borrower, or as otherwise agreed by the Lenders and the
                Borrower;

            
	
              “Interest
                Notice”

            	
              shall
                mean a notice from the Borrower to the Facility Agent specifying
                the
                duration of any relevant Interest Period;

            
	
              “Interest
                Rate Agreements”

            	
              shall
                mean any interest rate protection agreement, interest rate future
                agreement, interest rate option agreement, interest rate swap agreement,
                interest rate cap agreement, interest rate collar agreement, interest
                rate
                hedge agreement or other similar agreement or arrangement entered
                into
                between the Borrower, the Guarantor or any Subsidiary of the Borrower
                with
                the Facility Agent, which is designed to protect the Borrower, the
                Guarantor or any of the Borrower's Subsidiaries against fluctuations
                in
                interest rates applicable under this Agreement, to or under which
                the
                Borrower, the Guarantor or any of the Borrower's Subsidiaries is
                a party
                or a beneficiary on the date of this Agreement or becomes a party
                or a
                beneficiary hereafter;

            
	
              “ISM
                Code”

            	
              shall
                mean the International Safety Management Code for the Safe Operating
                of
                Ships and for Pollution Prevention constituted pursuant to Resolution
                A.741(18) of the International Maritime Organization and incorporated
                into
                the Safety of Life at Sea Convention and includes any amendments
                or
                extensions thereto and any regulation issued pursuant
                thereto;

            
	
              “ISPS
                Code”

            	
              shall
                mean the International Ship and Port Facility Security Code adopted
                by the
                International Maritime Organization at a conference in December,
                2002 and
                amending the Safety of Life at Sea Convention and includes any amendments
                or extensions thereto and any regulation issued pursuant
                thereto;

            
	
              “ISSC”

            	
              shall
                mean the International Ship Security Certificate issued pursuant
                to the
                ISPS Code;

            
	
              “Johnsen
                Family”

            	
              shall
                mean (i) Niels W. Johnsen, Erik F. Johnsen, Niels M. Johnsen and
                Erik L.
                Johnsen; (ii) the wives and issue of Niels W. Johnsen, Erik F. Johnsen,
                Niels M. Johnsen and Erik L. Johnsen; and (iii) any trust for the
                benefit
                of, or controlled by, any of foregoing;

            
	
              “LIBOR
                Rate”

            	
              shall
                mean, for each Interest Period, the London Interbank Offered Rate
                (“LIBOR”) as set and published by the British Banker's Association
                (“BBA”), as selected by the Borrower three (3) Banking Days before the
                first day of such Interest Period as obtained by the Facility Agent
                from a
                wire that is sent through Bloomberg, L.P. which rate is based by
                BBA on an
                average of the Interbank Offered Rates for Yen deposits in the London
                market based on quotes from designated banks in the London market.
                In the
                event that the one, three, six or twelve month LIBOR is no longer
                available from the BBA or Bloomberg, L.P., the Facility Agent shall
                select
                a comparable service to determine such rate and shall provide notice
                thereof to the Borrower;

            
	
              “Loan”

            	
              shall
                mean the loan facility to be made available by the Lenders to the
                Borrower
                hereunder in a single advance pursuant to Section 3 in the maximum
                aggregate principal amount of Five Billion Yen (¥5,000,000,000), or the
                balance thereof from time to time outstanding;

            
	
              “Majority
                Lenders”

            	
              at
                any time shall mean Lenders holding an aggregate of more than 66.66%
                of
                the Loan then outstanding;

            
	
              “Material
                Adverse Effect”

            	
              shall
                mean a material adverse effect on the ability of the Borrower and/or
                the
                Guarantor to meet any of their respective obligations with regard
                to (i)
                the Loan and the financing arrangements established in connection
                therewith or (ii) any of their respective other obligations that
                are
                material to the Borrower and the Guarantor considered as a
                whole;

            
	
              “Materials
                of Environmental Concern”

            	
              shall
                have the meaning ascribed thereto in
                Section 2.1(p);

            
	
              “Memorandum
                of Agreement”

            	
              means
                that certain contract between the Seller and the Borrower dated August
                24,
                2007, as supplemented by Addendum No. 1 thereto dated August 24,
                2007,
                providing for the purchase of the Vessel by the Borrower.
                

            
	
              “Mortgage”

            	
              shall
                mean the first preferred United States ship mortgage on the Vessel,
                to be
                executed by the Borrower in favor of the Security Trustee pursuant
                to
                Section 4.1(q), substantially in the form set out in Exhibit
                G;

            
	
              “MTSA”

            	
              shall
                mean the Maritime & Transportation Security Act, 2002, as amended,
                inter alia, by Public Law 107-295;

            
	
              “Multiemployer
                Plan”

            	
              shall
                mean, at any time, a “multiemployer plan” as defined in Section 4001(a)(3)
                of ERISA to which the Borrower or any ERISA Affiliate is making or
                accruing an obligation to make contributions or has within any of
                the
                three preceding plan years made or accrued an obligation to make
                contributions;

            
	
              “Multiple
                Employer Plan”

            	
              shall
                mean, at any time, an employee benefit plan, other than a Multiemployer
                Plan, subject to Title IV or ERISA, to which a Borrower or ERISA
                Affiliate, and one or more employers other than a Borrower or ERISA
                Affiliate, is making or accruing an obligation to make contributions
                or,
                in the event that any such plan has been terminated, to which a Borrower
                or ERISA Affiliate made or accrued an obligation to make contributions
                during any of the five plan years preceding the date of termination
                of
                such plan;

            
	
              “Note”

            	
              shall
                mean the promissory note to be executed by the Borrower to the order
                of
                the Facility Agent pursuant to Section 4.1(c), to evidence the Loan
                substantially in the form set out in Exhibit A;

            
	
              “Operator”

            	
              shall
                mean the Person who is concerned with the operation of the Vessel
                and
                falls within the definition of “Company” set out in rule 1.1.2 of the ISM
                Code”;

            
	
              “Payment
                Dates”

            	
              means
                the Initial Payment Date and the dates falling at three (3) month
                intervals thereafter, the last of which is the Final Payment
                Date;

            
	
              “Person”

            	
              shall
                mean any individual, sole proprietorship, corporation, partnership
                (general or limited), limited liability company, business trust,
                bank,
                trust company, joint venture, association, joint stock company, trust
                or
                other unincorporated organization, whether or not a legal entity,
                or any
                government or agency or political subdivision thereof;

            
	
              “Plan”

            	
              shall
                mean any employee benefit plan (other than a Multiemployer Plan or
                a
                Multiple Employer Plan) covered by Title IV of ERISA;

            
	
              “Proceeding”

            	
              shall
                have the meaning ascribed thereto in
                Section 8.1(i);

            
	
              “Required
                Percentage”

            	
              means
                one hundred and twenty percent (120%);

            
	
              “Security
                Document(s)”

            	
              shall
                mean the Mortgage, the Assignments and any other documents that may
                be
                executed as security for the Loan and the Borrower's obligations
                in
                connection therewith;

            
	
              “Security
                Party(ies)”

            	
              shall
                mean each of the Borrower and the Guarantor;

            
	
              “Security
                Trustee”

            	
              shall
                have the meaning ascribed thereto in the preamble;

            
	
              “Seller”

            	
              means
                Dynamic Actor Shipping S.A., a Panamanian corporation;

            
	
              “SMC”

            	
              shall
                mean the safety management certificate issued in respect of a Vessel
                in
                accordance with rule 13 of the ISM code;

            
	
              “subsidiary”

            	
              shall
                mean, with respect to any Person, any business entity of which more
                than
                50% of the outstanding voting stock or other equity interest is owned
                directly or indirectly by such Person and/or one or more other
                subsidiaries of such Person;

            
	
              “Subsidiary(ies)”

            	
              shall
                mean all of the subsidiaries of the Guarantor;

            
	
              “Taxes”

            	
              shall
                mean any present or future income or other taxes, levies, duties,
                charges,
                fees, deductions or withholdings of any nature now or hereafter imposed,
                levied, collected, withheld or assessed by any taxing authority
                whatsoever, except for taxes on or measured by the overall net income
                of
                each Lender imposed by its jurisdiction of incorporation or applicable
                lending office, the United States of America, the State or City of
                New
                York or any governmental subdivision or taxing authority of any thereof
                or
                by any other taxing authority having jurisdiction over such Lender
                (unless
                such jurisdiction is asserted by reason of the activities of the
                Borrower
                or any of the Subsidiaries);

            
	
              “Termination
                Event”

            	
              shall
                mean (i) a “reportable event,” as defined in Section 403 of ERISA,
                (ii) the withdrawal of a Borrower or any ERISA Affiliate from a
                Multiemployer Plan during a plan year in which it was a “substantial
                employer,” as defined in Section 4001(a)(2) of ERISA, or the incurrence of
                liability by a Borrower or any ERISA Affiliate under Section 4064
                of ERISA
                upon the termination of a Multiple Employer Plan, (iii) the filing of
                a notice of intent to terminate a Plan under Section 4041 of ERISA
                or the
                treatment of a Multiemployer Plan amendment as a termination under
                Section
                4041A of ERISA, (iv) the institution of proceedings to terminate a
                Plan or a Multiemployer Plan, or (v) any other event or condition
                which might constitute grounds under Section 4042 of ERISA for the
                termination of, or the appointment of a trustee to administer, any
                Plan or
                Multiemployer Plan;

            
	
              “Time
                Charter”

            	
              means
                that certain time charter of the Vessel dated August 24, 2007, as
                supplement by Addendum No. 1 thereto dated August 24, 2007, with
                the Time
                Charterer.  The charterhire under the Time Charter shall be
                payable in a combination of Yen and Dollars, with the Yen portion
                of the
                charterhire to be in an amount which shall, at a minimum, be enough
                to
                service the principal, interest and fees payable under this agreement
                for
                such period and shall be on a “hell or high water basis” and the Dollar
                portion of the charterhire to be in an amount which shall, at a minimum,
                be enough to pay all of the international flag operating costs of
                the
                vessel based on the Charterer’s operating budget;

            
	
              “Time
                Charterer”

            	
              means
                Dynamic Actor Shipping S.A. a Panamanian corporation;

            
	
              “Total
                Loss”

            	
              shall
                have the meaning ascribed thereto in the Mortgage;

            
	
              “Transaction
                Documents”

            	
              shall
                mean each of this Agreement, the Note and the Security
                Documents;

            
	
              “Vessel”

            	
              shall
                mean that certain Panamanian flag Pure Car and Truck Carrier known
                as the
                “Grand Winner”, to be renamed “Green Bay” and reflagged under United
                States law;

            
	
              “Withdrawal
                Liability(ies)”

            	
              shall
                have the meaning given to such term under Part 1 of Subtitle E of
                Title IV
                of ERISA.

            
	
              “Yen”
                and the sign “¥”

            	
              shall
                mean the legal currency, at any relevant time hereunder, of
                Japan;

            
	 	 


    

    1.2  Computation
      of Time Periods; Other Definitional Provisions.  In this
      Agreement, the Note and the other Security Documents, in the computation of
      periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
      excluding”; words importing either gender include the other gender; references
      to “writing” include printing, typing, lithography and other means of
      reproducing words in a tangible visible form; the words “including,” “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
      references to articles, sections (or subdivisions of sections), exhibits,
      annexes or schedules are to this Agreement, the Note or such Security Document,
      as applicable; references to agreements and other contractual instruments
      (including this Agreement, the Note and the Security Documents) shall be deemed
      to include all subsequent amendments, amendments and restatements, supplements,
      extensions, replacements and other modifications to such instruments (without,
      however, limiting any prohibition on any such amendments, extensions and other
      modifications by the terms of this Agreement, the Note or any Security
      Document); references to any matter that is “approved” or requires “approval” of
      a party shall mean approval given in the sole and absolute discretion of such
      party unless otherwise specified.

     

    1.3  Accounting
      Terms.  Unless otherwise specified herein, all accounting terms
      used in this Agreement, the Note and in the Security Documents shall be
      interpreted, and all financial statements and certificates and reports as to
      financial matters required to be delivered to the Facility Agent or to the
      Lenders under this Agreement shall be prepared, in accordance with generally
      accepted accounting principles for the United States (“GAAP”).

     

    1.4  Certain
      Matters Regarding Materiality.  To the extent that any
      representation, warranty, covenant or other undertaking of the Borrower in
      this
      Agreement is qualified by reference to those which are not reasonably expected
      to result in a “Material Adverse Effect” or language of similar import, no
      inference shall be drawn therefrom that any Agent or Lender has knowledge or
      approves of any noncompliance by the Borrower with any governmental
      rule.

     

    2.  REPRESENTATIONS
      AND WARRANTIES

     

    2.1  Representations
      and Warranties.  In order to induce the Creditors to enter into
      this Agreement and to make the Loan available, each Security Party hereby
      represents and warrants to the Creditors (which representations and warranties
      shall survive the execution and delivery of this Agreement and the Note and
      the
      drawdown of the Loan) that:

     

    (a)  Due
      Organization and Power.  Each Security Party is duly formed and is
      validly existing in good standing under the laws of its jurisdiction of
      incorporation or formation, has full power to carry on its business as now
      being
      conducted and to enter into and perform its obligations under this Agreement,
      the Note and the Security Documents to which it is a party, and has complied
      with all statutory, regulatory and other requirements relative to such business
      and such agreements;

     

    (b)  Authorization
      and Consents.  All necessary corporate action has been taken to
      authorize, and all necessary consents and authorities have been obtained and
      remain in full force and effect to permit, each Security Party to enter into
      and
      perform its obligations under this Agreement, the Note and the Security
      Documents and, in the case of the Borrower to borrow, service and repay the
      Loan
      and, as of the date of this Agreement, no further consents or authorities are
      necessary for the service and repayment of the Loan or any part
      thereof;

     

    (c)  Binding
      Obligations.  This Agreement, the Note and the Security Documents
      constitute or will, when executed and delivered, constitute the legal, valid
      and
      binding obligations of each Security Party that is a party thereto enforceable
      against such Security Party in accordance with their respective terms, except
      to
      the extent that such enforcement may be limited by equitable principles,
      principles of public policy or applicable bankruptcy, insolvency,
      reorganization, moratorium or other laws affecting generally the enforcement
      of
      creditors' rights;

     

    (d)  No
      Violation.  The execution and delivery of, and the performance of
      the provisions of, this Agreement, the Note and those of the Security Documents
      to which it is to be a party by each Security Party do not contravene any
      applicable law or regulation existing at the date hereof or any contractual
      restriction binding on such Security Party or the certificate of incorporation
      or by-laws (or equivalent instruments) thereof and that the proceeds of the
      Loan
      shall be used by the Borrower exclusively for its own account or for the account
      of a Subsidiary or Affiliate of the Borrower;

     

    (e)  Filings;
      Stamp Taxes.  Other than the recording of the Mortgage with the
      appropriate authorities for the United States, and the filing of Uniform
      Commercial Code Financing Statements in the State of New York in respect of
      the
      Assignments, and the payment and filing or recording fees consequent thereto,
      it
      is not necessary for the legality, validity, enforceability or admissibility
      into evidence of this Agreement, the Note or the Security Documents that any
      of
      them or any document relating thereto be registered, filed, recorded or enrolled
      with any court or authority in any relevant jurisdiction or that any stamp,
      registration or similar Taxes be paid on or in relation to this Agreement,
      the
      Note or any of the Security Documents;

     

    (f)  Litigation.   No
      action, suit or proceeding is pending or threatened against any Security Party
      before any court, board of arbitration or administrative agency which could
      or
      might have a Material Adverse Effect;

     

    (g)  No
      Default.   No Security Party is in default under any material
      agreement by which it is bound, or is in default in respect of any material
      financial commitment or obligation;

     

    (h)  Vessel.  Upon
      delivery of the Vessel to the Borrower; the Vessel:

     

    
      	
              (i)  

            	
              will
                be in the sole and absolute ownership of the Borrower and duly registered
                in the Borrower's name under United States flag, unencumbered, save
                and
                except for the Mortgage and as permitted
                thereby;

            


    

     

    
      	
              (ii)  

            	
              will
                be classed in the highest classification and rating for vessels of
                the
                same age and type with its Classification Society without any material
                outstanding recommendations;

            


    

     

    
      	
              (iii)  

            	
              will
                be operationally seaworthy and in every way fit for its intended
                service;
                and

            


    

     

    
      	
              (iv)  

            	
              will
                be insured in accordance with the provisions of the Mortgage and
                the
                requirements thereof in respect of such insurances will have been
                complied
                with;

            


    

     

    (i)  Insurance.  Each
      of the Security Parties has insured its properties and assets against such
      risks
      and in such amounts as are customary for companies engaged in similar
      businesses;

     

    (j)  Financial
      Information.  Except as otherwise disclosed in writing to the
      Facility Agent on or prior to the date hereof, all financial statements,
      information and other data furnished by any Security Party to the Facility
      Agent
      are complete and correct, such financial statements have been prepared in
      accordance with GAAP and accurately and fairly present the financial condition
      of the parties covered thereby as of the respective dates thereof and the
      results of the operations thereof for the period or respective periods covered
      by such financial statements, and since the date of the Guarantor's financial
      statements most recently delivered to the Facility Agent there has been no
      Material Adverse Effect as to any of such parties and none thereof has any
      contingent obligations, liabilities for taxes or other outstanding financial
      obligations which are material in the aggregate except as disclosed in such
      statements, information and data;

     

    (k)  Tax
      Returns.  Each Security Party has filed all material tax returns
      required to be filed thereby and has paid all taxes payable thereby which have
      become due, other than those not yet delinquent or the nonpayment of which
      would
      not have a Material Adverse Effect and except for those taxes being contested
      in
      good faith and by appropriate proceedings or other acts and for which adequate
      reserves shall have been set aside on its books; 

     

    (l)  ERISA.   The
      execution and delivery of this Agreement and the consummation of the
      transactions hereunder will not involve any prohibited transaction within the
      meaning of ERISA or Section 4975 of the Code and no condition exists or
      event or transaction has occurred in connection with any Plan maintained or
      contributed to by any member of the ERISA Group or any ERISA Affiliate resulting
      from the failure of any thereof to comply with ERISA which is reasonably likely
      to result in any member of the ERISA Group or any ERISA Affiliate incurring
      any
      liability, fine or penalty which individually or in the aggregate could have
      a
      Material Adverse Effect. No member of the ERISA Group nor any ERISA Affiliate,
      individually or collectively, has incurred, or reasonably expects to incur,
      Withdrawal Liabilities or liabilities upon the happening of a Termination Event
      the aggregate of which for all such Withdrawal Liabilities and other liabilities
      exceeds or would exceed $30,000,000.  With respect to any
      Multiemployer Plan, Multiple Employer Plan or Plan, no member of the ERISA
      Group
      nor any ERISA Affiliate is aware of or has been notified that any “variance”
from the “minimum funding standard” has been requested (each such term as
      defined in Part 3, Subtitle B, of Title 1 of
      ERISA).  No member of the ERISA Group nor any ERISA Affiliate has
      received any notice that any Multiemployer Plan is in reorganization, within
      the
      meaning of Title IV of ERISA, which reorganization could have a Material
      Adverse Effect; 

     

    (m)  Chief
      Executive Office.  The chief executive office and chief place of
      business of each Security Party and the office in which the records relating
      to
      the earnings and other receivables of each Security Party are kept is, and
      will
      continue to be, located at 11 North Water Street, Suite 18290, Mobile, Alabama
      36602, USA;

     

    (n)  Foreign
      Trade Control Regulations.  To the best knowledge of each of the
      Security Parties, none of the transactions contemplated herein will violate
      the
      provisions of any statute or regulation enacted to prohibit or limit economic
      transactions with certain foreign Persons including, without limitation, any
      of
      the provisions of the Foreign Assets Control Regulations of the United States
      of
      America (Title 31, Code of Federal Regulations, Chapter V,
      Part 500, as amended);

     

    (o)  Equity
      Ownership.  The Borrower is owned, directly or indirectly, one
      hundred percent (100%) by the Guarantor;

     

    (p)  Environmental
      Matters and Claims.  (a) Except as heretofore disclosed in
      writing to the Facility Agent (i) the Borrower and its Affiliates (which
      for purposes of this Section 2(p) shall be deemed to include the Guarantor
      and
      its respective Affiliates) will, when required to operate their business as
      then
      being conducted, be in compliance with all applicable United States federal
      and
      state, local, foreign and international laws, regulations, conventions and
      agreements relating to pollution prevention or protection of human health or
      the
      environment (including, without limitation, ambient air, surface water, ground
      water, navigable waters, waters of  the contiguous zone, ocean waters
      and international waters), including, without limitation, laws, regulations,
      conventions and agreements relating to (1) emissions, discharges, releases
      or threatened releases of chemicals, pollutants, contaminants, wastes, toxic
      substances, hazardous materials, oil, hazardous substances, petroleum and
      petroleum products and by-products (“Materials of Environmental Concern”), or
      (2) the manufacture, processing, distribution, use, treatment, storage,
      disposal, transport or handling of Materials of Environmental Concern
      (“Environmental Laws”); (ii) the Borrower and its Affiliates will, when
      required, have all permits, licenses, approvals, rulings, variances, exemptions,
      clearances, consents or other authorizations required under applicable
      Environmental Laws (“Environmental Approvals”) and will, when required, be in
      compliance with all Environmental Approvals required to operate their business
      as then being conducted; (iii)  the Borrower has not nor has any Affiliate
      thereof has received any notice of any claim, action, cause of action,
      investigation or demand by any person, entity, enterprise or government, or
      any
      political subdivision, intergovernmental body or agency, department or
      instrumentality thereof, alleging potential liability for, or a requirement
      to
      incur, material investigator costs, cleanup costs, response and/or remedial
      costs (whether incurred by a governmental entity or otherwise), natural
      resources damages, property damages, personal injuries, attorneys' fees and
      expenses, or fines or penalties, in each case arising out of, based on or
      resulting from (1) the presence, or release or threat of release into the
      environment, of any Materials of Environmental Concern at any location, whether
      or not owned by such person, or (2) circumstances forming the basis of any
      violation, or alleged violation, of any Environmental Law or Environmental
      Approval (“Environmental Claim”) (other than Environmental Claims that have been
      fully and finally adjudicated or otherwise determined and all fines, penalties
      and other costs, if any, payable by the Security Parties in respect thereof
      have
      been paid in full or which are fully covered by insurance (including permitted
      deductibles)); and (iv) there are no circumstances that may prevent or
      interfere with such full compliance in the future; and (b) except as
      heretofore disclosed in writing to the Facility Agent there is no Environmental
      Claim pending or threatened against the Borrower or any Affiliate thereof and
      there are no past or present actions, activities, circumstances, conditions,
      events or incidents, including, without limitation, the release, emission,
      discharge or disposal of any Materials of Environmental Concern, that could
      form
      the basis of any Environmental Claim against such persons the adverse
      disposition of which may result in a Material Adverse Effect;

     

    (q)  Compliance
      with ISM Code, ISPS Code and MTSA.  The Vessel and the Operator
      complies with the requirements of the ISM Code, the ISPS Code and the MTSA
      including (but not limited to) the maintenance and renewal of valid certificates
      pursuant thereto;

     

    (r)  Threatened
      Withdrawal of DOC or SMC.  There is no threatened or actual
      withdrawal of the Operator's DOC or SMC in respect of the Vessel;

     

    (s)  Liens.  Other
      than as disclosed in Schedule III , there are no liens of any kind on any
      property owned by any Security Party other than those liens created pursuant
      to
      this Agreement or the Security Documents or permitted thereby;

     

    (t)  Indebtedness.  Other
      than as disclosed in Schedule IV, neither of the Security Parties has any
      Indebtedness; 

     

    (u)  Payment
      Free of Taxes.  All payments made or to be made by the Security
      Parties under or pursuant to this Agreement, the Note and the Security Documents
      shall be made free and clear of, and without deduction or withholding for an
      account of, any Taxes; 

     

    (v)  No
      Proceedings to Dissolve.  There are no proceedings or actions
      pending or contemplated by any Security Party or, to the best knowledge of
      any
      Security Party, contemplated by any third party, to dissolve or terminate any
      Security Party.

     

    (w)  Solvency.  On
      the Closing Date, in the case of each of the Security Parties, (a) the sum
      of
      its assets, at a fair valuation, does and will exceed its liabilities,
      including, to the extent they are reportable as such in accordance with GAAP,
      contingent liabilities, (b) the present fair market salable value of its assets
      is not and shall not be less than the amount that will be required to pay its
      probable liability on its then existing debts, including, to the extent they
      are
      reportable as such in accordance with GAAP, contingent liabilities, as they
      mature, (c) it does not and will not have unreasonably small working capital
      with which to continue its business and (d) it has not incurred, does not intend
      to incur and does not believe it will incur debts beyond its ability to pay
      such
      debts as they mature;

     

    (x)  Compliance
      with Laws.  Each of the Security Parties is in compliance with all
      applicable laws, except where any failure to comply with any such applicable
      laws would not, alone or in the aggregate, have a Material Adverse Effect;
      and

     

    (y)  Survival.  All
      representations, covenants and warranties made herein and in any certificate
      or
      other document delivered pursuant hereto or in connection herewith shall survive
      the making of the Loan and the issuance of the Note.

     

    3.  THE
      LOAN

     

    3.1  (a)           Purposes.  The
      Lenders shall make the Loan available to the Borrower for the purpose of
      partially financing the purchase price to be paid for the
      Vessel.  

     

    (b)  Making
      of the Loan.  Each of the Lenders, relying upon each of the
      representations and warranties set out in Section 2, hereby severally and
      not jointly agrees with the Borrower that, subject to and upon the terms of
      this
      Agreement, it will, not later than 11:00 a.m. on the Drawdown Date, make
      its portion of the Loan, in Federal or other funds, immediately available in
      New
      York City to the Facility Agent at its address set forth on Schedule I or to
      such account of the Facility Agent most recently designated by it for such
      purpose by notice to the Lenders.  Unless the Facility Agent
      determines that any applicable condition specified in Sections 4.1 or 4.2 has
      not been satisfied, the Facility Agent will make the funds so received from
      the
      Lenders available to the Borrower at the aforesaid address, subject to the
      receipt of the funds by the Facility Agent as provided in the immediately
      preceding sentence, not later than 2:30 P.M. (New York City time) on the
      Drawdown Date, and in any event as soon as practicable after
      receipt.

     

    3.2  Drawdown
      Notice.  The Borrower shall, at least three (3) Banking Days
      (or fewer Banking Days if agreed by the Lenders) before the Drawdown Date,
      serve
      a notice (a “Drawdown Notice”), substantially in the form of Exhibit B, on
      the Facility Agent, which notice shall (a) be in writing addressed to the
      Facility Agent, (b) be effective on receipt by the Facility Agent,
      (c) specify the amount of the Loan to be drawn, (d) specify the
      Banking Day on which the Loan is to be drawn, (e) specify the disbursement
      instructions (which shall be consistent in all material respects with Section
      16
      of the Memorandum of Agreement), (f) specify the initial Interest Period and
      (g) be irrevocable.

     

    3.3  Effect
      of Drawdown Notice.  Delivery of a Drawdown Notice shall be deemed
      to constitute a warranty by the Borrower (a) that the representations and
      warranties stated in Section 2 (updated mutatis mutandis) are true and
      correct on and as of the date of the Drawdown Notice and will be true and
      correct on and as of the Drawdown Date as if made on such date, and
      (b) that no Event of Default nor any event which with the giving of notice
      or lapse of time or both would constitute an Event of Default has occurred
      and
      is continuing.

     

    4.  CONDITIONS

     

    4.1  Conditions
      Precedent to the Effectiveness of this Agreement.  The
      effectiveness of this Agreement and the obligation of the Lenders to make the
      Loan available to the Borrower under this Agreement shall be expressly subject
      to the following conditions precedent:

     

    (a)  Corporate
      Authority.  The Facility Agent shall
      have received the following documents in form and substance satisfactory to
      the
      Facility Agent and its legal advisers:

     

    
      	
              (i)  

            	
              copies,
                certified as true and complete by an officer of each of the Security
                Parties, of the resolutions of its board of directors and, with respect
                to
                the Borrower, shareholders evidencing approval of the Transaction
                Documents to which each is a party and authorizing an appropriate
                officer
                or officers or attorney-in-fact or attorneys-in-fact to execute the
                same
                on its behalf, including the execution of the Drawdown
                Notice;

            


    

     

    
      	
              (ii)  

            	
              copies,
                certified as true and complete by an officer of each of the Security
                Parties, of the certificate or articles of incorporation and by-laws
                or
                similar constituent document
                thereof;

            


    

     

    
      	
              (iii)  

            	
              certificate
                of the jurisdiction of incorporation of each Security Party as to
                the good
                standing thereof; and

            


    

     

    
      	
              (iv)  

            	
              a
                certificate signed by the Chairman, President, Executive Vice President,
                Treasurer, Comptroller, Controller or chief financial officer of
                each of
                the Security Parties to the effect that (A) no Default or Event of
                Default
                shall have occurred and be continuing and (B) the representations
                and
                warranties of such Security Party contained in this Agreement are
                true and
                correct as of the date of such
                certificate.

            


    

     

    (b)  The
      Agreement.  Each of the Security Parties shall have duly executed
      and delivered this Agreement to the Facility Agent.

     

    (c)  The
      Note.  The Borrower shall have duly executed and delivered the
      Note to the Facility Agent.

     

    (d)  The
      Creditors.  The Facility Agent shall have received executed
      counterparts of this Agreement from each of the Lenders (or, in the case of
      any
      Lender as to which an executed counterpart shall not have been received, the
      Facility Agent shall have received in form satisfactory to it a telex, facsimile
      or other written confirmation from such Lender of the execution of a counterpart
      of this Agreement by such Lender).

     

    (e)  Fees.  The
      Creditors shall have received payment in full of all fees and expenses due
      to
      each thereof pursuant to the terms hereof on the date when due including,
      without limitation, all fees and expenses due under Section 14.

     

    (f)  Environmental
      Claims.  The Lenders shall be satisfied that neither of the
      Security Parties is subject to any Environmental Claim which could reasonably
      be
      expected to have a Material Adverse Effect.

     

    (g)  Legal
      Opinions.  The Facility Agent, on behalf of the Agents and the
      Lenders, shall have received opinions addressed to the Facility Agent from
      (i) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P.,
      special counsel to the Security Parties, and (ii) Seward & Kissel LLP,
      special counsel to the Agents and the Lenders, in each case in such form as
      the
      Facility Agent may require, as well as such other legal opinions as the Lenders
      shall have required as to all or any matters under the laws of the State of
      Delaware, the State of New York and the United States of America covering
      certain of the representations and warranties and conditions which are the
      subjects of Sections 2 and 4, respectively.

     

    (h)  Officer's
      Certificate.  The Facility Agent shall have received a certificate
      signed by the President or other duly authorized executive officer of the
      Borrower certifying that under applicable law existing on the date hereof,
      the
      Borrower shall not be compelled by law to withhold or deduct any Taxes from
      any
      amounts to become payable to the Facility Agent for the account of the Creditors
      hereunder.

     

    (i)  Vessel
      Documents.  The Facility Agent shall have received evidence
      satisfactory to it and its counsel that the Vessel upon delivery to the Borrower
      will be:

     

    
      	
              (i)  

            	
              in
                the sole and absolute ownership of the Borrower and is duly registered
                in
                the Borrower's name under United States flag free of all liens and
                encumbrances of record other than its
                Mortgage;

            


    

     

    
      	
              (ii)  

            	
              insured
                in accordance with the provisions of the Mortgage and all requirements
                of
                the Mortgage in respect of such insurance have been fulfilled (including,
                but not limited to, letters of undertaking from the insurance brokers,
                including confirmation notices of assignment, notices of cancellation
                and
                loss payable clauses acceptable to the
                Lenders);

            


    

     

    
      	
              (iii)  

            	
              classed
                in the highest classification and rating for vessels of the same
                age and
                type with its Classification Society without any material outstanding
                recommendations; and

            


    

     

    
      	
              (iv)  

            	
              operationally
                seaworthy and in every way fit for its intended
                service;

            


    

     

    (j)  Security
      Documents.  The Borrower shall have executed and delivered to the
      Facility Agent:

     

    
      	
              (i)  

            	
              the
                Insurances Assignment;

            


    

     

    
      	
              (ii)  

            	
              the
                Earnings and Charterparties
                Assignment;

            


    

     

    
      	
              (iii)  

            	
              the
                Assignment Notices; and

            


    

     

    
      	
              (iv)  

            	
              such
                Uniform Commercial Code Financing Statements (Forms UCC-1) as the
                Facility
                Agent shall require.

            


    

     

    (k)  Vessel
      Appraisals.  The Facility Agent shall have received appraisals, in
      form and substance satisfactory to the Facility Agent, as to the Fair Market
      Value of the Vessel.  

     

    (l)  ISM
      DOC.  To the extent required to be obtained by the ISM Code the
      Security Trustee shall have received a copy of the DOC for the
      Vessel.

     

    (m)  Evidence
      of Current COFR.  The Facility Agent shall have received copies of
      the current Certificate of Financial Responsibility pursuant to the Oil
      Pollution Act 1990 for the Vessel.

     

    (n)  Vessel
      Liens.  The Facility Agent shall have received evidence
      satisfactory to it and to its legal advisor that, save for the liens created
      by
      the Mortgage and the Assignments, there are no liens, charges or encumbrances
      of
      any kind whatsoever on the Vessel or on its earnings except as permitted hereby
      or by any of the Security Documents.

     

    (o)  Charter.  The
      Borrower shall have delivered to the Facility Agent a true and complete copy
      of
      the Time Charter and the Charterer’s Acknowledgment.

     

    (p)  Memorandum
      of Agreement.  The Borrower shall have delivered to the Facility
      Agent a true and complete copy of Memorandum of Agreement. 

     

    (q)  Vessel
      Delivery.  The Facility Agent shall be satisfied that the Vessel
      shall be delivered to the Borrower within two (2) Banking Days of the Drawdown
      Date and that satisfactory arrangements have been made for (x) the registration
      of the Vessel in the name of the Borrower under United States flag, (y) the
      execution of the Mortgage and (z) the recordation of the Mortgage with the
      National Vessel Documentation Center of the United States Coast Guard, in each
      case on the opening of business on the Banking Day immediately following the
      delivery of the Vessel to the Borrower. 

     

    (r)  Maritime
      Administration Approval.  The Borrower shall have obtained
      pre-approval from the United States Maritime Administration, in form and
      substance satisfactory to the Lenders, for the possible transfer of the Vessel
      upon the exercise of the Security Trustee’s rights under the Mortgage to a party
      not qualified to own and document a vessel under United States flag and/or
      the
      re-documentation of the Vessel under foreign flag.

     

    4.2  Further
      Conditions Precedent.  The obligation of the Lenders to make the
      Loan available to the Borrower shall also be expressly conditional
      upon:

     

    (a)  Drawdown
      Notice.  The Facility Agent having received a Drawdown Notice in
      accordance with the terms of Section 3.2.

     

    (b)  Representations
      and Warranties True.  The representations stated in Section 2
      being true and correct as if made on that date.

     

    (c)  No
      Default.  No Default or Event of Default having occurred and being
      continuing or would result from the making of the Loan.

     

    (d)  No
      Material Adverse Effect.  There having been no Material Adverse
      Effect since June 30, 2005.

     

    4.3  Breakfunding
      Costs.  In the event that, on the date specified for the making of
      the Loan in the Drawdown Notice, the Lenders shall not be obliged under this
      Agreement to make the Loan available under this Agreement, the Borrower shall
      indemnify and hold the Lenders fully harmless against any losses which the
      Lenders (or any thereof) may sustain as a result of borrowing or agreeing to
      borrow funds to meet the drawdown requirement of such Drawdown Notice and the
      certificate of the relevant Lender or Lenders shall, absent manifest error,
      be
      conclusive and binding on the Borrower as to the extent of any such
      losses.

     

    4.4  Satisfaction
      after Drawdown.  Without prejudice to any of the other terms and
      conditions of this Agreement, in the event all of the Lenders elect, in their
      sole discretion, to make the Loan prior to the satisfaction of all or any of
      the
      conditions referred to in Sections 4.1 or 4.2, the Borrower hereby covenants
      and
      undertakes to satisfy or procure the satisfaction of such condition or
      conditions within seven (7) days after the Drawdown Date (or such longer
      period as the Majority Lenders, in their sole discretion, may
      agree).

     

    5.  REPAYMENT
      AND PREPAYMENT

     

    5.1  Repayment.  Subject
      to the provisions of this Section 5 regarding application of prepayments,
      the Borrower shall repay the principal of the Loan in twelve (12) consecutive
      quarterly installments on the Payment Dates, the first eleven (11) such
      installments being in the amount of Sixty Eight Million One Hundred Eighty
      One
      Thousand Eight Hundred Eighteen Yen (¥68,181,818) and the last such installment
      being in the amount of the Final Payment, such last installment to be paid
      on
      the Final Payment Date.

     

    5.2  Voluntary
      Prepayment; No Re-borrowing.  The Borrower may prepay, upon three
      (3) Banking Days written notice, the Loan or any portion thereof, without
      penalty, provided that if such prepayment is made on a day other than a Payment
      Date, such prepayment shall be made together with the costs and expenses
      provided for in Section 5.4.  Each prepayment shall be in a minimum
      amount of One Hundred Million Yen (¥100,000,000), plus any One Hundred Million
      Yen (¥100,000,000) multiple thereof, or the full amount of the Loan then
      outstanding.  No part of the Loan once repaid or prepaid will be
      available for re-borrowing.

     

    5.3  Mandatory
      Prepayment; Sale or Loss of Vessel.  Upon (i) the sale of the
      Vessel or (ii) the earlier of (x) ninety (90) days after the Total Loss (as
      such
      term is defined in the Mortgage) of the Vessel or (y) the date on which the
      insurance proceeds in respect of such loss are received by the Borrower or
      the
      Security Trustee as assignee thereof, the Borrower shall either (I) deliver
      to
      the Security Trustee, such additional collateral, of equal or greater value
      with
      the Vessel, as may be satisfactory to the Lenders in their sole discretion
      or
      (II) repay the Loan in full, or such proceeds shall be applied by the Facility
      Agent first, towards prepayment of the Loan and the Borrower's other obligations
      hereunder in full and second, to the Borrower. 

     

    5.4  Interest
      and Cost With Application of Prepayments.  Any and all prepayments
      hereunder, whether mandatory or voluntary, shall be applied in the following
      order:

     

    (a)  firstly,
      towards accrued and unpaid interest and for fees due under this Agreement;
      and

     

    (b)  secondly,
      towards the installments of the Loan in the inverse order of their due dates
      for
      payment.

     

    5.5  Borrower's
      Obligation Absolute.  The Borrower's obligation to pay each
      Creditor hereunder and under the Note shall be absolute, unconditional and
      irrevocable, and shall be paid strictly in accordance with the terms hereof
      and
      thereof, under any and all circumstances and irrespective of any set-off,
      counterclaim or defense to payment which the Borrower may have or may have
      had
      against the Creditors.

     

    6.  INTEREST
      AND RATE

     

    6.1  Payment
      of Interest; Interest Rate.  (a) The Borrower hereby promises
      to pay to the Lenders interest on the unpaid principal amount of the Loan for
      the period commencing on the Drawdown Date until but not including the stated
      maturity thereof (whether by acceleration or otherwise) or the date of
      prepayment thereof at the Applicable Rate, which shall be the rate per annum
      which is equal to the aggregate of (a) the LIBOR Rate plus (b) the Applicable
      Margin; provided, however, that if the Borrower has requested and the Lenders
      have agreed to an Interest Period of less than one (1) month, for the purposes
      of determining the Applicable Rate, the LIBOR Rate shall be replaced with the
      Lenders’ cost of funds for such period.  The Facility Agent shall
      promptly notify the Borrower and the Lenders in writing of the Applicable Rate
      as and when determined.  Each such determination, absent manifest
      error, shall be conclusive and binding upon the Borrower.

     

    (b)  Notwithstanding
      the foregoing, the Borrower agrees that after the occurrence and during the
      continuance of an Event of Default, the Loan shall bear interest at the Default
      Rate.  In addition, the Borrower hereby promises to pay interest (to
      the extent that the payment of such interest shall be legally enforceable)
      on
      any overdue interest, and on any other amount payable by the Borrower hereunder
      which shall not be paid in full when due (whether at stated maturity, by
      acceleration or otherwise), for the period commencing on the due date thereof
      until but not including the date the same is paid in full at the Default
      Rate.

     

    (c)  The
      Borrower shall give the Facility Agent an Interest Notice specifying the
      Interest Period selected at least three (3) Banking Days prior to the end
      of any then existing Interest Period, which notice the Facility Agent agrees
      to
      forward on to all Lenders as soon as practicable.  If at the end of
      any then existing Interest Period the Borrower fails to give an Interest Notice,
      the relevant Interest Period shall be three (3) months.  The
      Borrower's right to select an Interest Period shall be subject to the
      restriction that no selection of an Interest Period shall be effective unless
      each Lender is satisfied that the necessary funds will be available to such
      Lender for such period and that no Event of Default or event which, with the
      giving of notice or lapse of time, or both, would constitute an Event of Default
      shall have occurred and be continuing.

     

    (d)  Except
      as
      provided in the next sentence, accrued interest on the Loan shall be payable
      on
      each Payment Date.  Interest payable at the Default Rate shall be
      payable from time to time on demand of the Facility Agent.

     

    6.2  Maximum
      Interest.  Anything in this Agreement or the Note to the contrary
      notwithstanding, the interest rate on the Loan shall in no event be in excess
      of
      the maximum rate permitted by Applicable Law.

     

    7.  PAYMENTS

     

    7.1  Place
      of Payments, No Set Off.  All payments to be made hereunder by the
      Borrower shall be made to the Facility Agent, not later than 3 p.m. New York
      time (any payment received after 3 p.m. New York time shall be deemed to have
      been paid on the next Banking Day) on the due date of such payment, at its
      office located at 200 Park Avenue, New York, New York 10166 or to such other
      office of the Facility Agent as the Facility Agent may direct, without set-off
      or counterclaim and free from, clear of, and without deduction for, any Taxes,
      provided, however, that if the Borrower shall at any time be compelled by law
      to
      withhold or deduct any Taxes from any amounts payable to the Lenders hereunder,
      then the Borrower shall pay such additional amounts in Dollars as may be
      necessary in order that the net amounts received after withholding or deduction
      shall equal the amounts which would have been received if such withholding
      or
      deduction were not required and, in the event any withholding or deduction
      is
      made, whether for Taxes or otherwise, the Borrower shall promptly send to the
      Facility Agent such documentary evidence with respect to such withholding or
      deduction as may be required from time to time by the Lenders.

     

    7.2  Tax
      Credits.  If any Lender obtains the benefit of a credit against
      the liability thereof for federal income taxes imposed by any taxing authority
      for all or part of the Taxes as to which the Borrower has paid additional
      amounts as aforesaid (and each Lender agrees to use its best efforts to obtain
      the benefit of any such credit which may be available to it, provided it has
      knowledge that such credit is in fact available to it), then such Lender shall
      reimburse the Borrower for the amount of the credit so obtained.  Each
      Lender agrees that in the event that Taxes are imposed on account of the situs
      of its loans hereunder, such Lender, upon acquiring knowledge of such event,
      shall, if commercially reasonable, shift such loans on its books to another
      office of such Lender so as to avoid the imposition of such Taxes.

     

    7.3  Computations;
      Banking Days.  

     

    (a)  All
      computations of interest and fees shall be made by the Facility Agent or the
      Lenders, as the case may be, on the basis of a 360-day year, in each case for
      the actual number of days (including the first day but excluding the last day)
      occurring in the period for which interest or fees are payable.  Each
      determination by the Facility Agent or the Lenders of an interest rate or fee
      hereunder shall be conclusive and binding for all purposes, absent manifest
      error.

     

    (b)  Whenever
      any payment hereunder or under the Note shall be stated to be due on a day
      other
      than a Banking Day, such payment shall be due and payable on the next succeeding
      Banking Day unless the next succeeding Banking Day falls in the following
      calendar month, in which case it shall be payable on the immediately preceding
      Banking Day.

     

    8.  EVENTS
      OF
      DEFAULT

     

    8.1  Events
      of Default.  In the event that any of the following events shall
      occur and be continuing:

     

    (a)  Principal
      Payments.  Any principal of the Loan is not paid on the due date
      therefor; or

     

    (b)  Interest
      and other Payments.  Any interest on the Loan  or any
      other amount becoming payable under this Agreement and under any Transaction
      Document or under any of them, is not paid within three (3) Banking Days from
      the date when due; or

     

    (c)  Representations,
      etc.  Any representation, warranty or other statement made by any
      of the Security Parties in this Agreement or in any other instrument, document
      or other agreement delivered in connection herewith proves to have been untrue
      or misleading in any material respect as at the date as of which it was made;
      or

     

    (d)  Impossibility,
      Illegality.  It becomes impossible or unlawful for any of the
      Security Parties to fulfill any of the covenants and obligations contained
      herein or in any Transaction Document, or for any of the Lenders to exercise
      any
      of the rights vested in any of them hereunder or under the other Transaction
      Documents and such impossibility or illegality, in the reasonable opinion of
      such Lender, will have a Material Adverse Effect on any of its rights hereunder
      or under the other Transaction Documents or on any of its rights to enforce
      any
      thereof; or

     

    (e)  Mortgage.  The
      Mortgage is not recorded within three (3) Banking Days of the Drawdown Date
      or
      there is any default under the Mortgage; or

     

    (f)  Certain
      Covenants.  Any Security Party defaults in the performance or
      observance of any covenant contained in Section 9.1(b), 9.1(m), 9.2(i) and
      9.3(a) through (d) inclusive; or

     

    (g)  Covenants.  One
      or more of the Security Parties default in the performance of any term, covenant
      or agreement contained in this Agreement or in the other Transaction Documents,
      or in any other instrument, document or other agreement delivered in connection
      herewith or therewith, in each case other than an Event of Default referred
      to
      elsewhere in this Section 8.1, and such default continues unremedied for a
      period of fifteen (15) days after written notice thereof has been given to
      the
      relevant Security Party or Parties by the Facility Agent at the request of
      any
      Lender; or

     

    (h)  Indebtedness
      and Other Obligations.  Any Security Party defaults in the payment
      when due (subject to any applicable grace period) of any Indebtedness or of
      any
      other indebtedness, in either case, in an outstanding principal amount equal
      to
      or exceeding Two Million Dollars ($2,000,000) or such Indebtedness or other
      indebtedness is, or by reason of such default is subject to being, accelerated
      or any party becomes entitled to enforce the security for any such Indebtedness
      or other indebtedness and such party shall take steps to enforce the same,
      unless such default or enforcement is being contested in good faith and by
      appropriate proceedings or other acts and such  Security Party has set
      aside on its books adequate reserves with respect thereto; or

     

    (i)  Bankruptcy.  Any
      Security Party commences any proceedings relating to any substantial portion
      of
      its property under any reorganization, arrangement or readjustment of debt,
      dissolution, winding up, adjustment, composition, bankruptcy or liquidation
      law
      or statute of any jurisdiction, whether now or hereafter in effect (a
“Proceeding”), or there is commenced against any thereof any Proceeding and such
      Proceeding remains undismissed or unstayed for a period of sixty (60) days;
      or any receiver, trustee, liquidator or sequestrator of, or for, any thereof
      or
      any substantial portion of the property of any thereof is appointed and is
      not
      discharged within a period of sixty (60) days; or any thereof by any act
      indicates consent to or approval of or acquiescence in any Proceeding or to
      the
      appointment of any receiver, trustee, liquidator or sequestrator of, or for,
      itself or any substantial portion of its property; or

     

    (j)  Judgments.  Any
      judgment or order is made the effect whereof would be to render invalid this
      Agreement or any other Transaction Document or any material provision thereof
      or
      any Security Party asserts that any such agreement or provision thereof is
      invalid; or judgments or orders for the payment of money (not paid or fully
      covered by insurance, subject to applicable deductibles) in excess of $2,500,000
      in the aggregate for the Guarantor or its Subsidiaries (or its equivalent in
      any
      other currency) shall be rendered against the Guarantor and/or any of its
      Subsidiaries and such judgments or orders shall continue unsatisfied and
      unstayed for a period of 30 days; or

     

    (k)  Inability
      to Pay Debts.  Any Security Party is unable to pay or admits its
      inability to pay its debts as they fall due or a moratorium shall be declared
      in
      respect of any Indebtedness of any thereof; or

     

    (l)  Termination
      of Operations; Sale of Assets.  Except as expressly permitted
      under this Agreement, any Security Party ceases its operations or sells or
      otherwise disposes of all or substantially all of its assets or all or
      substantially all of the assets of any Security Party are seized or otherwise
      appropriated; or

     

    (m)  Change
      in Financial Position.  Any change in the financial position of
      any Security Party which, in the reasonable opinion of the Majority Lenders,
      shall have a Material Adverse Effect; or 

     

    (n)  Cross-Default.  Any
      Security Party defaults under any material contract or agreement to which it
      is
      a party or by which it is bound; or

     

    (o)  ERISA
      Debt.  Any member of the ERISA Group or any ERISA Affiliate shall
      (i) fail to pay when due an amount or amounts aggregating in excess of
      $1,000,000 which it or they shall have become liable to pay under Title IV
      of ERISA or (ii) any member of the ERISA Group or any ERISA Affiliate,
      individually or collectively, shall incur, or shall reasonably expect to incur,
      any Withdrawal Liability or liability upon the happening of a Termination Event
      and the aggregate of all such Withdrawal Liabilities and such other liabilities
      shall be in excess of $10,000,000; or 

     

    (p)  Time
      Charter.  The Time Charter is terminated or the Time Charterer is
      in material default thereunder, unless the Borrower has provided a substitute
      charter and/or charterer acceptable to the Lenders in their sole discretion
      within 30 days after such termination; 

     

    then,
      the
      Lenders' obligation to make the Loan available shall cease and the Facility
      Agent on behalf of the Lenders may, with the Majority Lenders' consent and
      shall, upon the Majority Lenders' instruction, by notice to the Borrower,
      declare the entire Loan, accrued interest and any other sums payable by the
      Borrower hereunder, under the Note and under the other Transaction Documents
      due
      and payable whereupon the same shall forthwith be due and payable without
      presentment, demand, protest or notice of any kind, all of which are hereby
      expressly waived; provided that upon the happening of an event specified in
      subclauses (i) or (k) of this Section 8.1, the Loan, accrued interest
      and any other sums payable by the Borrower hereunder, under the Note and under
      the other Transaction Documents shall be immediately due and payable without
      declaration, presentment, demand, protest or other notice to the Borrower all
      of
      which are expressly waived.  In such event, the Creditors, or any
      thereof, may proceed to protect and enforce their respective rights by action
      at
      law, suit in equity or in admiralty or other appropriate proceeding, whether
      for
      specific performance of any covenant contained in this Agreement or in the
      Note
      or in any other Transaction Document or in aid of the exercise of any power
      granted herein or therein, or the Lenders or the Facility Agent may proceed
      to
      enforce the payment of the Note when due or to enforce any other legal or
      equitable right of the Lenders, or proceed to take any action authorized or
      permitted by Applicable Law for the collection of all sums due, or so declared
      due, including, without limitation, the right to appropriate and hold or apply
      (directly, by way of set-off or otherwise) to the payment of the obligations
      of
      the Borrower to any of the Creditors hereunder, under the Note and/or under
      the
      other Transaction Documents (whether or not then due) all moneys and other
      amounts of the Borrower then or thereafter in possession of any Creditor, the
      balance of any deposit account (demand or time, matured or unmatured) of the
      Borrower then or thereafter with any Creditor and every other claim of the
      Borrower then or thereafter against any of the Creditors.

     

    8.2  Indemnification.  The
      Borrower agrees to, and shall, indemnify and hold each of the Creditors harmless
      against any loss, as well as against any reasonable costs or expenses (including
      reasonable legal fees and expenses), which any of the Creditors sustains or
      incurs as a consequence of any default in payment of the principal amount of
      the
      Loan, interest accrued thereon or any other amount payable hereunder, under
      the
      Note or under the other Transaction Documents including, but not limited to,
      all
      actual losses incurred in liquidating or re-employing fixed deposits made by
      third parties or funds acquired to effect or maintain the Loan or any portion
      thereof.  Any Creditor's certification of such costs and expenses
      shall, absent any manifest error, be conclusive and binding on the
      Borrower.

     

    8.3  Application
      of Moneys.  Except as otherwise provided in any Security Document,
      all moneys received by the Creditors under or pursuant to this Agreement, the
      Note or any of the Security Documents after the happening of any Event of
      Default (unless cured to the satisfaction of the Majority Lenders) shall be
      applied by the Facility Agent in the following manner:

     

    (a)  firstly,
      in or towards the payment or reimburse­ment of any expenses or liabilities
      incurred by any of the Creditors in connection with the ascertainment,
      protection or enforcement of its rights and remedies hereunder, under the Note
      and under the other Transaction Documents;

     

    (b)  secondly,
      in or towards payment of any interest owing in respect of the Loan;

     

    (c)  thirdly,
      in or towards repayment of the principal of the Loan;

     

    (d)  fourthly,
      in or towards payment of all other sums which may be owing to any of the
      Creditors under this Agreement, under the Note and under the other Transaction
      Documents;

     

    (e)  fifthly,
      in or towards payments of any amounts then owed under any Interest Rate
      Agreement; and

     

    (f)  sixthly,
      the surplus (if any) shall be paid to the Borrower or to whomsoever else may
      be
      entitled thereto.

     

    9.  COVENANTS

     

    9.1  Affirmative
      Covenants.  Each of the Security Parties hereby covenants and
      undertakes with the Lenders that, from the date hereof and so long as any
      principal, interest or other moneys are owing in respect of this Agreement,
      the
      Note or  any of the Security Documents, it will:

     

    (a)  Performance
      of Agreements.  Duly perform and observe, and procure the
      observance and performance by all other parties thereto (other than the Lenders)
      of, the terms of this Agreement, the Note and the Security
      Documents;

     

    (b)  Notice
      of Default, etc.  Promptly upon obtaining knowledge thereof,
      inform the Facility Agent of the occurrence of (a) any Event of Default or
      of any event which, with the giving of notice or lapse of time, or both, would
      constitute an Event of Default, (b) any litigation or governmental
      proceeding pending or threatened against any Security Party which could
      reasonably be expected to have a Material Adverse Effect, (c) the withdrawal
      of
      the Vessel's rating by its Classification Society or the issuance by the
      Classification Society of any material recommendation or notation affecting
      class and (d) any other event or condition which is reasonably likely to
      have a Material Adverse Effect, in each case promptly, and in any event within
      three (3) Banking Days after becoming aware of the occurrence
      thereof;

     

    (c)  Obtain
      Consents.  Without prejudice to Section 2.1 and this
      Section 9.1, obtain every consent and do all other acts and things which
      may from time to time be necessary or advisable for the continued due
      performance of all its and the other Security Parties' respective obligations
      under this Agreement, under the Note and under the Security
      Documents;

     

    (d)  Financial
      Information.  Deliver to the Facility Agent with sufficient copies
      for the Lenders to be distributed to the Lenders by the Facility Agent promptly
      upon the receipt thereof:

     

    
      	
              (i)  

            	
              as
                soon as available, but not later than ninety (90) days after the end
                of each fiscal year of the Guarantor, complete copies of the consolidated
                financial reports of the Guarantor and its Subsidiaries together
                with a
                separate financial report of the Borrower (together with a Compliance
                Certificate), all in reasonable detail which shall include at least
                the
                consolidated balance sheet of the Guarantor and its Subsidiaries
                and a
                balance sheet for the Borrower as of the end of such year and the
                related
                statements of income and sources and uses of funds for such year,
                each as
                prepared in accordance with GAAP, all in reasonable detail, which
                shall be
                audited reports prepared by an Acceptable Accounting
                Firm;

            


    

     

    
      	
              (ii)  

            	
              as
                soon as available, but not less than forty-five (45) days after the
                end of
                each of the first three quarters of each fiscal year of the Guarantor,
                a
                quarterly interim balance sheets and profit and loss statements of
                the
                Guarantor and its Subsidiaries and the related profit and loss statements
                and sources and uses of funds (together with a Compliance Certificate),
                all in reasonable detail, unaudited, but certified to be true and
                complete
                by the chief financial officer of the
                Guarantor;

            


    

     

    
      	
              (iii)  

            	
              promptly
                upon the mailing thereof to the shareholders of the Guarantor, copies
                of
                all financial statements, reports, proxy statements and other
                communications provided to the Guarantor's
                shareholders;

            


    

     

    
      	
              (iv)  

            	
              within
                ten (10) days of the Guarantor's receipt thereof, copies of all audit
                letters or other correspondence from any external auditors including
                material financial information in respect of the Guarantor and its
                Subsidiaries; and

            


    

     

    
      	
              (v)  

            	
              such
                other statements (including, without limitation, monthly consolidated
                statements of operating revenues and expenses), lists of assets and
                accounts, budgets, forecasts, reports and other financial information
                with
                respect to its business as the Facility Agent may from time to time
                reasonably request, certified to be true and complete by the chief
                financial officer of the Guarantor;

            


    

     

    (e)  Contingent
      Liabilities.  For inclusion with each Compliance Certificate
      delivered in connection with Sections 9.1(d)(i) and 9.1(d)(ii), and in any
      event upon the reasonable request of the Facility Agent, an accounting of all
      of
      the contingent liabilities of each Security Party;

     

    (f)  Vessel
      Valuations.  For inclusion with each Compliance Certificate
      delivered pursuant to Section 9.1(d)(i), and in any event upon the
      reasonable request of the Facility Agent, the Borrower shall obtain appraisals
      of the Fair Market Value of the Vessel.  One  such
      additional valuation in any year is to be at the Borrower's cost, provided,
      that
      following and during the continuance of any Event of Default whether or not
      such
      Event of Default has been waived by the Lenders, all such valuations are to
      be
      at the Borrower's cost.  In the event the Borrower fails or refuses to
      obtain the valuations requested pursuant to this Section 9.1 within
      ten (10) days of the Facility Agent's request therefor, the Facility Agent
      will be authorized to obtain such valuations, at the Borrower's cost, from
      one
      of the approved ship brokers listed on Schedule II, which valuations shall
      be
      deemed the equivalent of valuations duly obtained by the Borrower pursuant
      to
      this Section 9.1(f), but the Facility Agent's actions in doing so shall not
      excuse any default of the Borrower under this Section 9.1(f);

     

    (g)  Corporate
      Existence.  Do or cause to be done all things necessary to
      preserve and keep in full force and effect its corporate existence and all
      licenses, franchises, permits and assets necessary to the conduct of its
      business;

     

    (h)  Books
      and Records.  At all times keep proper books of record and account
      into which full and correct entries shall be made in accordance with
      GAAP;

     

    (i)  Taxes
      and Assessments.  Pay and discharge all material taxes,
      assessments and governmental charges or levies imposed upon it or upon its
      income or property prior to the date upon which penalties attach thereto;
      provided, however, that it shall not be required to pay and discharge, or cause
      to be paid and discharged, any such tax, assessment, charge or levy so long
      as
      the legality thereof shall be contested in good faith and by appropriate
      proceedings or other acts and it shall set aside on its books adequate reserves
      with respect thereto;

     

    (j)  Inspection.  Allow
      any representative or representatives designated by the Facility Agent, subject
      to applicable laws and regulations, to visit and inspect any of its properties,
      and, on request, to examine its books of account, records, reports and other
      papers and to discuss its affairs, finances and accounts with its officers,
      all
      at such reasonable times and as often as the Facility Agent reasonably
      requests;

     

    (k)  Inspection
      and Survey Reports.  If the Lenders shall so request, the Borrower
      shall provide the Lenders with copies of all internally generated inspection
      or
      survey reports on the Vessel;

     

    (l)  Compliance
      with Statutes, Agreements, etc.  Do or cause to be done all things
      necessary to comply with all material contracts or agreements to which any
      of
      the Security Parties is a party, and all material laws, and the rules and
      regulations thereunder, applicable to such Security Party, including, without
      limitation, those laws, rules and regulations relating to employee benefit
      plans
      and environmental matters except where failure to do so would not be reasonably
      likely to have a Material Adverse Effect;

     

    (m)  Environmental
      Matters.  Promptly upon the occurrence of any of the following
      conditions, provide to the Facility Agent a certificate of a chief executive
      officer of the Guarantor, specifying in detail the nature of such condition
      and
      its proposed response or the proposed response of any Environmental
      Affiliate:  (a) its receipt or the receipt by any Environmental
      Affiliate of any written communication whatsoever that alleges that such Person
      is not in compliance with any applicable Environmental Law or Environmental
      Approval, if such noncompliance could reasonably be expected to have a Material
      Adverse Effect, (b) knowledge by it or any Environmental Affiliate that
      there exists any Environmental Claim pending or threatened against any such
      Person, which could reasonably be expected to have a Material Adverse Effect,
      or
      (c) any release, emission, discharge or disposal of any material that could
      form the basis of any Environmental Claim against it or against any
      Environmental Affiliate, if such Environmental Claim could reasonably be
      expected to have a Material Adverse Effect.  Upon the written request
      by the Facility Agent, the Borrower will submit to the Facility Agent at
      reasonable intervals, a report providing an update of the status of any issue
      or
      claim identified in any notice or certificate required pursuant to this
      subsection;

     

    (n)  Insurance.  Maintain
      with financially sound and reputable insurance companies insurance on all its
      properties and against all such risks and in at least such amounts and with
      such
      deductibles as are usually insured against by companies of established
      reputation engaged in the same or similar business from time to
      time;

     

    (o)  Vessel
      Management.  Cause the Vessel to be managed both commercially and
      technically by the Guarantor, a wholly-owned subsidiary thereof or its existing
      manager;

     

    (p)  Brokerage
      Commissions, etc.  Indemnify and hold each of the Agents and the
      Lenders harmless from any claim for any brokerage commission, fee or
      compensation from any broker or third party resulting from the transactions
      contemplated hereby;

     

    (q)  ISM
      Code, ISPS Code and MTSA Matters.  (i) Procure that the Operator
      will comply with and ensure that the Vessel will comply with the requirements
      of
      the ISM Code, ISPS Code and MTSA in accordance with the implementation schedules
      thereof, including (but not limited to) the maintenance and renewal of valid
      certificates, and when required, security plans, pursuant thereto throughout
      the
      term of the Loan; and (ii) will procure that the Operator will immediately
      inform the Facility Agent if there is any threatened or actual withdrawal of
      its
      DOC, SMC or the ISSC in respect of the Vessel; and (iii) will procure that
      the
      Operator will promptly inform the Facility Agent upon the issuance to the
      Borrower or Operator of a DOC and to the Vessel of an SMC or ISSC;

     

    (r)  ERISA.
       Forthwith upon learning of the occurrence of any material liability of any
      member of the ERISA Group or any ERISA Affiliate pursuant to ERISA in connection
      with the termination of any Plan or withdrawal or partial withdrawal of any
      multi-employer plan (as defined in ERISA) or of a failure to satisfy the minimum
      funding standards of Section 412 of the Code or Part 3 of Title I of ERISA
      by
      any Plan for which any member of the ERISA Group or any ERISA Affiliate is
      plan
      administrator (as defined in ERISA), furnish or cause to be furnished to the
      Lenders written notice thereof;

     

    (s)  Evidence
      of Current COFR.  If the Lenders shall so request, provide the
      Lenders with copies of the current Certificate of Financial Responsibility
      pursuant to the Oil Pollution Act 1990 for the Vessel; and 

     

    (t)  Mortgage.  Within
      three (3) Banking Days of the Drawdown Date, cause the Mortgage to be recorded
      with the National Vessel Documentation Center of the United States Coast
      Guard.

     

    9.2  Negative
      Covenants.  Each of the Security Parties hereby covenants and
      undertakes with the Lenders that, from the date hereof and so long as any
      principal, interest or other moneys are owing in respect of this Agreement,
      the
      Note or any other Transaction Documents, it will not, without the prior written
      consent of the Majority Lenders (or all of the Lenders if required pursuant
      to
      Section 16.8): 

     

    (a)  Liens.  Create,
      assume or permit to exist, any mortgage, pledge, lien, charge, encumbrance
      or
      any security interest whatsoever upon any Collateral or, in respect of the
      Borrower and the Guarantor, other property except:

     

    
      	
              (i)  

            	
              liens
                disclosed in Schedule III;

            


    

     

    
      	
              (ii)  

            	
              liens
                to secure Indebtedness under Section 9.2(m), such liens to be limited
                to
                the vessels constructed or
                acquired;

            


    

     

    
      	
              (iii)  

            	
              liens
                for taxes not yet payable for which adequate reserves have been
                maintained;

            


    

     

    
      	
              (iv)  

            	
              the
                Mortgage, the Assignments and other liens in favor of the Security
                Trustee
                or the Lenders;

            


    

     

    
      	
              (v)  

            	
              liens,
                charges and encumbrances against the Vessel permitted to exist under
                the
                terms of the Mortgage;

            


    

     

    
      	
              (vi)  

            	
              pledges
                of certificates of deposit or other cash collateral securing reimbursement
                obligations in connection with letters of credit now or hereinafter
                issued
                for its account in connection with the establishment of
                its  financial responsibility under 33C.F.R. Part 130 or 46
                C.F.R. Part 540, as the case may be, as the same may be amended and
                replaced;

            


    

     

    
      	
              (vii)  

            	
              pledges
                or deposits to secure obligations under workmen's compensation laws
                or
                similar legislation, deposits to secure public or statutory obligations,
                warehousemen's or other like liens, or deposits to obtain the release
                of
                such liens and deposits to secure surety, appeal or customs bonds
                on which
                it is the principal, as to all of the foregoing, only to the extent
                arising and continuing in the ordinary course of business;
                and

            


    

     

    
      	
              (viii)  

            	
              other
                liens, charges and encumbrances incidental to the conduct of its
                business,
                the ownership of its property and assets and which do not in the
                aggregate
                materially detract from the value of its property or assets or materially
                impair the use thereof in the operation of its
                business;

            


    

     

    (b)  Third
      Party Guaranties.  Guaranty the obligations of any third party,
      except a direct or indirect subsidiary of the Guarantor, whether or not
      affiliated with such Security Party;

     

    (c)  Liens
      on Shares of Borrower.  With respect to the Guarantor, create,
      assume or permit to exist, any mortgage, pledge, lien, charge, encumbrance
      or
      any security interest whatsoever upon the shares of the Borrower;

     

    (d)  Subordination
      of Inter-Company Indebtedness.  With respect to the Guarantor,
      procure that, upon the occurrence and during the continuance of an Event of
      Default, no payments are made by any Security Party on any inter-company
      Indebtedness until such time as the Loan is paid in full;

     

    (e)  Transaction
      with Affiliates.  Enter into any transaction with an Affiliate,
      other than on an arms length basis;

     

    (f)  Change
      of Flag, Class, Management or Ownership.  Change the flag of the
      Vessel other than to a jurisdiction reasonably acceptable to the Lenders, its
      Classification Society other than to another member of the International
      Association of Classification Societies, the technical management of the Vessel
      other than to one or more technical management companies reasonably acceptable
      to the Lenders or the immediate or ultimate ownership of the
      Vessel;

     

    (g)  Chartering.  Enter
      into any material amendment of the Time Charter or any other charter party
      agreement without the prior consent of the Facility Agent, which consent shall
      not be unreasonably withheld;

     

    (h)  Change
      in Business.  Materially change the nature of its business or
      commence any business materially different from its current
      business;

     

    (i)  Sale
      of Assets.  Other than as reasonably acceptable to the Majority
      Lenders, sell, or otherwise dispose of, the Vessel or any other asset (including
      by way of spin-off, installment sale or otherwise) which is substantial in
      relation to its assets taken as a whole; provided, however, that the Borrower
      may sell the Vessel to a third party in an arm's length transaction provided
      that the proceeds of such sale are distributed in accordance with Section 5.3
      of
      this Agreement;

     

    (j)  Changes
      in Offices or Names.  Change the location of its chief executive
      office, its chief place of business or the office in which its records relating
      to the earnings or insurances of the Vessel are kept or change its name unless
      the Lenders shall have received sixty (60) days prior written notice of
      such change;

     

    (k)  Consolidation
      and Merger.  Consolidate with, or merge into, any corporation or
      other entity, or merge any corporation or other entity into it; provided,
      however, that the Guarantor may merge with any Subsidiary or any other Person
      if
      (A) at the time of such transaction and after giving effect thereto, no Default
      or Event of Default shall have occurred or be continuing, (B) the surviving
      entity of such consolidation or merger shall be the Guarantor and (C) after
      giving effect to the transaction, the Guarantor's Consolidated Tangible Net
      Worth shall be greater or equal to its Consolidated Tangible Net Worth prior
      to
      the merger; 

     

    (l)  Change
      Fiscal Year.  In the case of the Guarantor, change its fiscal
      year;

     

    (m)  Indebtedness. 
      In the case of the Security Parties, incur any new Indebtedness (which, for
      the
      sake of clarity, shall exclude any Indebtedness pursuant to this Agreement)
      other than Indebtedness incurred to finance the acquisition and/or construction
      of any vessels, provided that the principal amount of such Indebtedness shall
      not exceed eighty percent (80%) of such acquisition and/or construction price,
      unless such Indebtedness is subordinated to all existing Indebtedness and this
      Loan; and 

     

    (n)  Limitations
      on Ability to Make Distributions.  Create or otherwise cause or
      permit to exist or become effective any consensual encumbrance or restriction
      on
      the ability of any Subsidiary to pay dividends or make any other distributions
      on its capital stock or limited liability company interests, as the case may
      be,
      to the Borrower or the Guarantor.

     

    (o)  Change
      of Control. Cause or permit a Change of Control.

     

    (p)  No
      Money Laundering. Contravene any law, official requirement or other
      regulatory measure or procedure implemented to combat “money laundering” (as
      defined in Article 1 of the Directive (91/308/EEC) of the Council of the
      European Communities) and comparable United States Federal and state
      laws.

     

    9.3  Financial
      Covenants.  The Guarantor hereby covenants and undertakes with the
      Lenders that, from the date hereof and so long as any principal, interest or
      other moneys are owing in respect of this Agreement, the Note or any of the
      Security Documents, it will:

     

    (a)  Consolidated
      Indebtedness to Consolidated EBITDA Ratio.  Maintain, on a
      consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDA
      of not more than 4.25 to 1.00, as measured at the end of each fiscal quarter
      based on the four most recent fiscal quarters for which financial information
      is
      available;

     

    (b)  Working
      Capital.  Maintain on a consolidated basis a ratio of current
      assets to current liabilities of not less than 1.00 to 1.00, as measured at
      the
      end of each fiscal quarter;

     

    (c)  Consolidated
      Tangible Net Worth.  Maintain a Consolidated Tangible Net Worth,
      as measured at the end of each fiscal quarter, in an amount of not less than
      the
      sum of One Hundred Eighty Million Dollars ($180,000,000) and the sum of fifty
      percent (50%) of (i) all net income of the Guarantor (on a consolidated basis)
      earned after June 30, 2007 and (ii) the proceeds from the issuance of any
      common and/or preferred stock of the Guarantor on or after the date
      hereof;

     

    (d)  Consolidated
      EBITDA to Interest Expense.  Maintain a ratio of Consolidated
      EBITDA to Interest Expense of not less than 2.50 to 1.00, measured at the end
      of
      each fiscal quarter based on the four most recent fiscal quarters for which
      financial information is available;

     

    9.4  Asset
      Maintenance.  If at any time during the term of this Agreement, the
      Fair Market Value of the Vessel is less than the Required Percentage of the
      outstanding amount of the Loan, the Borrower shall, within a period of
      thirty (30) days following receipt by the Borrower of written notice from
      the Facility Agent notifying the Borrower of such shortfall and specifying
      the
      amount thereof (which amount shall, in the absence of manifest error, be deemed
      to be conclusive and binding on the Borrower), either (i) deliver to the
      Security Trustee such additional collateral as may be satisfactory to the
      Lenders in their sole discretion of sufficient value to make the Fair Market
      Value of the Vessel plus the additional collateral, equal to the Required
      Percentage of the outstanding amount of the Loan or (ii) the Borrower shall
      prepay such amount of the Loan (together with interest thereon and any other
      monies payable in respect of such prepayment pursuant to Section 5.4) as shall
      result in the Fair Market Value of the Vessel being not less than the Required
      Percentage of the outstanding amount of the Loan.

     

    10.  GUARANTEE

     

    10.1  The
      Guarantee.  The Guarantor hereby irrevocably and unconditionally
      guarantees to each of the Creditors and their respective successors and assigns
      the prompt payment in full when due (whether at stated maturity, by acceleration
      or otherwise) of the principal of and interest on the Loan made by the Lenders
      to the Borrower and evidenced by the Note and all other amounts from time to
      time owing to the Creditors by the Borrower under this Agreement, under the
      Note
      and under any of the Security Documents, in each case strictly in accordance
      with the terms thereof (such obligations being herein collectively called the
      “Guaranteed Obligations”). The Guarantor hereby further agrees that if the
      Borrower shall fail to pay in full when due (whether at stated maturity, by
      acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor
      will
      promptly pay the same, without any demand or notice whatsoever, and that in
      the
      case of any extension of time of payment or renewal of any of the Guaranteed
      Obligations, the same will be promptly paid in full when due (whether at
      extended maturity, by acceleration or otherwise) in accordance with the terms
      of
      such extension or renewal.

     

    10.2  Obligations
      Unconditional.  The obligations of the Guarantor under Section
      10.1 are absolute, unconditional and irrevocable, irrespective of the value,
      genuineness, validity, regularity or enforceability of the obligations of the
      Borrower under this Agreement, the Note or any other agreement or instrument
      referred to herein or therein, or any substitution, release or exchange of
      any
      other guarantee of, or security for, any of the Guaranteed Obligations, and,
      to
      the fullest extent permitted by applicable law, irrespective of any other
      circumstance whatsoever that might otherwise constitute a legal or equitable
      discharge or defense of a surety or guarantor, it being the intent of this
      Section 10.2 that the obligations of the Guarantor hereunder shall
      be  absolute, unconditional and irrevocable, under any and all
      circumstances.  Without limiting the generality of the foregoing, it
      is agreed that the occurrence of any one or more of the following shall not
      alter or impair the liability of the Guarantor hereunder, which shall remain
      absolute, unconditional and irrevocable as described above:

     

    
      	
              a)  

            	
              at
                any time or from time to time, without notice to the Guarantor, the
                time
                for any performance of or compliance with any of the Guaranteed
                Obligations shall be extended, or such performance or compliance
                shall be
                waived;

            


    

     

    
      	
              b)  

            	
              any
                of the acts mentioned in any of the provisions of this Agreement
                or the
                Note or any other agreement or instrument referred to herein or therein
                shall be done or omitted;

            


    

     

    
      	
              c)  

            	
              the
                maturity of any of the Guaranteed Obligations shall be accelerated,
                or any
                of the Guaranteed Obligations shall be modified, supplemented or
                amended
                in any respect, or any right under this Agreement or the Note or
                any other
                agreement or instrument referred to herein or therein shall be waived
                or
                any other guarantee of any of the Guaranteed Obligations or any security
                therefor shall be released or exchanged, in whole or in part, or
                otherwise
                dealt with; or

            


    

     

    
      	
              d)  

            	
              any
                lien or security interest granted to, or in favor of, the Security
                Trustee
                or any Lender or Lenders as security for any of the Guaranteed Obligations
                shall fail to be perfected.

            


    

     

    The
      Guarantor hereby expressly waives diligence, presentment, demand of payment,
      protest and all notices whatsoever, and any requirement that any Agent or any
      Lender exhaust any right, power or remedy or proceed against the Borrower under
      this Agreement or the Note or any other agreement or instrument referred to
      herein or therein, or against any other Person under any other guarantee of,
      or
      security for, any of the Guaranteed Obligations.

     

    10.3  Reinstatement.  The
      obligations of the Guarantor under this Section 10 shall be automatically
      reinstated if and to the extent that for any reason any payment by or on behalf
      of the Borrower in respect of the Guaranteed Obligations is rescinded or must
      be
      otherwise restored by any holder of any of the Guaranteed Obligations, whether
      as a result of any Proceedings and the Guarantor agrees that it will indemnify
      each Creditor on demand for all reasonable costs and expenses (including,
      without limitation, fees of counsel) incurred by such Creditor in connection
      with such recission or restoration, including any such costs and expenses
      incurred in defending against any claim alleging that such payment constituted
      a
      preference, fraudulent transfer or similar payment under any bankruptcy,
      insolvency or similar law.

     

    10.4  Subrogation.  The
      Guarantor hereby irrevocably waives, but only until all amounts payable
      hereunder by the Guarantor to the Creditors (or any of them) have been paid
      in
      full, any and all rights to which any of them may be entitled by operation
      of
      law or otherwise, upon making any payment hereunder to be subrogated to the
      rights of the payee against the Borrower with respect to such payment or to
      be
      reimbursed, indemnified or exonerated by or to seek contribution from the
      Borrower in respect thereof.

     

    10.5  Remedies.  The
      Guarantor agrees that, as between the Guarantor and the Lenders, the obligations
      of the Borrower under this Agreement and the Note may be declared to be
      forthwith due and payable as provided in Section 8 (and shall be deemed to
      have
      become automatically due and payable in the circumstances provided in said
      Section 8) for purposes of Section 10.1 notwithstanding any stay, injunction
      or
      other prohibition preventing such declaration (or such obligations from becoming
      automatically due and payable) as against the Borrower and that, in the event
      of
      such declaration (or such obligations being deemed to have become automatically
      due and payable), such obligations (whether or not due and payable by the
      Borrower) shall forthwith become due and payable by the Guarantor for purposes
      of Section 10.1.

     

    10.6  Joint,
      Several and Solidary Liability.  The Guarantor's obligations and
      liability under this Agreement shall be on a “solidary” or “joint and several”
basis along with Borrower to the same degree and extent as if the Guarantor
      had
      been and/or will be a co-borrower, co-principal obligor and/or co-maker of
      the
      Guaranteed Obligations.  In the event that there is more than one
      Guarantor under this Agreement, or in the event that there are other guarantors,
      endorsers or sureties of all or any portion of the Guaranteed Obligations,
      the
      Guarantor's obligations and liability hereunder shall further be on a “solidary”
or “joint and several” basis along with such other guarantors, endorsers and/or
      sureties.

     

    10.7  Continuing
      Guarantee.  The guarantee in this Section 10 is a continuing
      guarantee, and shall apply to all Guaranteed Obligations whenever
      arising.

     

    11.  ASSIGNMENT.

     

    This
      Agreement shall be binding upon, and inure to the benefit of, each of the
      Security Parties and each of the Creditors and their respective successors
      and
      assigns, except that none of the Security Parties may assign any of its rights
      or obligations hereunder without the written consent of the
      Lenders.  Each Lender shall be entitled to assign its rights and
      obligations under this Agreement or grant participation(s) in the Loan to any
      subsidiary, holding company or other affiliate of such Lender, to any subsidiary
      or other affiliate company of any thereof or, with the consent of the Borrower
      (except upon the occurrence and during the continuation of an Event of Default,
      in which case the Borrower's consent shall not be required) and the Agents,
      in
      the case of the Borrower such consent not to be unreasonably withheld, to any
      other bank or financial institution (in a minimum amount of not less than
      $1,000,000), and such Lender shall forthwith give notice of any such assignment
      or participation to the Borrower and pay the other Lender an assignment fee
      of
      $3,000 for each such assignment or participation; provided, however, that any
      such assignment must be made pursuant to an Assignment and Assumption
      Agreement.  The Borrower will take all reasonable actions requested by
      the Agents or any Lender to effect such assignment, including, without
      limitation, the execution of a written consent to any Assignment and Assumption
      Agreement.

     

    12.  ILLEGALITY,
      INCREASED COST, NON-AVAILABILITY, ETC.

     

    12.1  Illegality.  In
      the event that by reason of any change in any applicable law, regulation or
      regulatory requirement or in the interpretation thereof, a Lender has a
      reasonable basis to conclude that it has become unlawful for any Lender to
      maintain or give effect to its obligations as contemplated by this Agreement,
      such Lender shall inform the Facility Agent and the Borrower to that effect,
      whereafter the liability of such Lender to make its Commitment available shall
      forthwith cease and the Borrower shall be required either to repay to such
      Lender that portion of the Loan advanced by such Lender immediately or, if
      such
      Lender so agrees, to repay such portion of the Loan to the Lender on the last
      day of the calendar month in accordance with and subject to the provisions
      of
      Section 12.5.  In any such event, but without prejudice to the
      aforesaid obligations of the Borrower to repay such portion of the Loan, the
      Borrower and the relevant Lender shall negotiate in good faith with a view
      to
      agreeing on terms for making such portion of the Loan available from another
      jurisdiction or otherwise restructuring such portion of the Loan on a basis
      which is not unlawful.

     

    12.2  Increased
      Costs.  If any change in applicable law, regulation or regulatory
      requirement, or in the interpretation or application thereof by any governmental
      or other authority, shall:

     

    
      	
              (i)  

            	
              subject
                any Lender to any Taxes with respect to its income from the Loan,
                or any
                part thereof, or

            


    

     

    
      	
              (ii)  

            	
              change
                the basis of taxation to any Lender of payments of principal or interest
                or any other payment due or to become due pursuant to this Agreement
                (other than a change in the basis effected by the jurisdiction of
                organization of such Lender, the jurisdiction of the principal place
                of
                business of such Lender, the United States of America, the State
                or City
                of New York or any governmental subdivision or other taxing authority
                having jurisdiction over such Lender (unless such jurisdiction is
                asserted
                by reason of the activities of any Security Party) or such other
                jurisdiction where the Loan may be payable),
                or

            


    

     

    
      	
              (iii)  

            	
              impose,
                modify or deem applicable any reserve requirements or require the
                making
                of any special deposits against or in respect of any assets or liabilities
                of, deposits with or for the account of, or loans by, a Lender,
                or

            


    

     

    
      	
              (iv)  

            	
              impose
                on any Lender any other condition affecting the Loan or any part
                thereof,

            


    

     

    and
      the
      result of the foregoing is either to increase the cost to such Lender of making
      available or maintaining its Commitment or any part thereof or to reduce the
      amount of any payment received by such Lender, then and in any such case if
      such
      increase or reduction in the opinion of such Lender materially affects the
      interests of such Lender under or in connection with this
      Agreement:

     

    (a)  such
      Lender shall notify the Facility Agent and the Borrower of the happening of
      such
      event, and

     

    (b)  the
      Borrower agrees forthwith upon demand to pay to such Lender such amount as
      such
      Lender certifies to be necessary to compensate such Lender for such additional
      cost or such reduction; provided however, that the foregoing provisions shall
      not be applicable in the event that increased costs to the Lender result from
      the exercise by the Lender of its right to assign its rights or obligations
      under Section 11.

     

    12.3  Nonavailability
      of Funds.  If the Facility Agent shall determine that, by reason
      of circumstances affecting the London Interbank Market generally, adequate
      and
      reasonable means do not or will not exist for ascertaining the Applicable Rate,
      the Facility Agent shall give notice of such determination to the Borrower
      and
      the Lenders.  The Borrower, the Facility Agent and the Majority
      Lenders shall then negotiate in good faith in order to agree upon a mutually
      satisfactory interest rate to be substituted for that which would otherwise
      have
      applied under this Agreement.  If the Borrower, the Facility Agent and
      the Majority Lenders are unable to agree upon such a substituted interest rate
      within thirty (30) days of the giving of such determination notice, the
      Facility Agent shall set an interest rate to take effect at the Facility Agent's
      direction, which rate shall be equal to the Applicable Margin plus the cost
      to
      the Lenders (as certified by each Lender) of funding the Loan.

     

    12.4  Lender's
      Certificate Conclusive.  A certificate or determination notice of
      the Facility Agent or any Lender, as the case may be, as to any of the matters
      referred to in this Section 12 shall, absent manifest error, be conclusive
      and binding on the Borrower.

     

    12.5  Compensation
      for Losses.  Where any portion of the Loan is to be repaid by the
      Borrower pursuant to this Section 12, the Borrower agrees simultaneously
      with such repayment to pay to the relevant Lender all accrued interest to the
      date of actual payment on the amount repaid and all other sums then payable
      by
      the Borrower to the relevant Lender pursuant to this Agreement, together with
      such amounts as may be certified by the relevant Lender to be necessary to
      compensate such Lender for any actual loss, premium or penalties incurred or
      to
      be incurred thereby on account of funds borrowed to make, fund or maintain
      its
      Commitment or such portion thereof for the remainder (if any) of the then
      current calendar month, but otherwise without penalty or premium.

     

    13.  CURRENCY
      INDEMNITY

     

    13.1  Currency
      Conversion.  If for the purpose of obtaining or enforcing a
      judgment in any court in any country it becomes necessary to convert into any
      other currency (the “judgment currency”) an amount due in Dollars or Yen under
      this Agreement or the other Transaction Documents then the conversion shall
      be
      made, in the discretion of the Facility Agent, at the rate of exchange
      prevailing either on the date of default or on the day before the day on which
      the judgment is given or the order for enforcement is made, as the case may
      be
      (the “conversion date”), provided that the Facility Agent shall not be entitled
      to recover under this section any amount in the judgment currency which exceeds
      at the conversion date the amount in Dollars or Yen, as applicable, due under
      this Agreement, the Note and/or the other Transaction Documents.

     

    13.2  Change
      in Exchange Rate.  If there is a change in the rate of exchange
      prevailing between the conversion date and the date of actual payment of the
      amount due, the Borrower shall pay such additional amounts (if any, but in
      any
      event not a lesser amount) as may be necessary to ensure that the amount paid
      in
      the judgment currency when converted at the rate of exchange prevailing on
      the
      date of payment will produce the amount then due under this Agreement, the
      Note
      and/or the other Transaction Documents in Yen; any excess over the amount due
      received or collected by the Lenders shall be remitted to the
      Borrower.

     

    13.3  Additional
      Debt Due.  Any amount due from the Borrower under this
      Section 13 shall be due as a separate debt and shall not be affected by
      judgment being obtained for any other sums due under or in respect of this
      Agreement, the Note and/or any of the Security Documents.

     

    13.4  Rate
      of Exchange.  The term “rate of exchange” in this Section 13
      means the rate at which the Facility Agent in accordance with its normal
      practices is able on the relevant date to purchase Yen with the judgment
      currency and includes any premium and costs of exchange payable in connection
      with such purchase.

     

    14.  FEES
      AND
      EXPENSES

     

    14.1  Fees.  The
      Borrower shall pay to the Facility Agent (for the account of the Lenders) a
      fee
      equal to forty-five one-hundredths of one percent (0.45%) of the Loan, such
      fee
      to be payable on the Closing Date.  The Borrower shall also pay to the
      Facility Agent an agency fee of Seven Thousand Five Hundred Dollars ($7,500),
      such fee to be payable on the Closing Date and annually thereafter.

     

    14.2  Expenses.  The
      Borrower agrees, whether or not the transactions hereby contemplated are
      consummated, on demand to pay, or reimburse the Agents for their payment of,
      the
      reasonable expenses of the Agents and (after the occurrence and during the
      continuance of an Event of Default) the Lenders incident to said transactions
      (and in connection with any supplements, amendments, waivers or consents
      relating thereto or incurred in connection with the enforcement or defense
      of
      any of the Agents' and the Lenders' rights or remedies with respect thereto
      or
      in the preservation of the Agents' and the Lenders' priorities under the
      documentation executed and delivered in connection therewith) including, without
      limitation, all reasonable costs and expenses of preparation, negotiation,
      execution and administration of this Agreement and the documents referred to
      herein, the reasonable fees and disbursements of the Agents' counsel in
      connection therewith, as well as the reasonable fees and expenses of any
      independent appraisers, surveyors, engineers and other consultants retained
      by
      the Agents in connection with this transaction, all reasonable costs and
      expenses, if any, in connection with the enforcement of this Agreement and
      the
      other Transaction Documents and stamp and other similar taxes, if any, incident
      to the execution and delivery of the documents (including, without limitation,
      the other Transaction Documents) herein contemplated and to hold the Agents
      and
      the Lenders free and harmless in connection with any liability arising from
      the
      nonpayment of any such stamp or other similar taxes.  Such taxes and,
      if any, interest and penalties related thereto as may become payable after
      the
      date hereof shall be paid immediately by the Borrower to the Agents or the
      Lenders, as the case may be, when liability therefor is no longer contested
      by
      such party or parties or reimbursed immediately by the Borrower to such party
      or
      parties after payment thereof (if the Agents or the Lenders, at their sole
      discretion, chooses to make such payment).

     

    15.  APPLICABLE
      LAW, JURISDICTION AND WAIVER

     

    15.1  Applicable
      Law.  This Agreement shall be governed by, and construed in
      accordance with, the laws of the State of New York.

     

    15.2  Jurisdiction.
       The Borrower hereby irrevocably submits to the jurisdiction of the courts
      of the State of New York and of the United States District Court for the
      Southern District of New York in any action or proceeding brought against it
      by
      any of the Lenders or the Agents under this Loan Agreement or under any document
      delivered hereunder and hereby irrevocably agrees that valid service of summons
      or other legal process on it may be effected by serving a copy of the summons
      and other legal process in any such action or proceeding on the Borrower by
      mailing or delivering the same by hand to the Borrower at the address indicated
      for notices in Section 17.1.  The service, as herein provided, of
      such summons or other legal process in any such action or proceeding shall
      be
      deemed personal service and accepted by the Borrower as such, and shall be
      legal
      and binding upon the Borrower for all the purposes of any such action or
      proceeding.  Final judgment (a certified or exemplified copy of which
      shall be conclusive evidence of the fact and of the amount of any indebtedness
      of the Borrower to the Lenders or the Agent) against the Borrower in any such
      legal action or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment.  The Borrower will advise the
      Facility Agent promptly of any change of address for the purpose of service
      of
      process.  Notwithstanding anything herein to the contrary, the Lenders
      may bring any legal action or proceeding in any other appropriate
      jurisdiction.

     

    15.3  WAIVER
      OF JURY TRIAL.  IT IS MUTUALLY AGREED BY AND AMONG EACH OF THE
      SECURITY PARTIES AND EACH OF THE CREDITORS THAT EACH OF THEM HEREBY WAIVES
      TRIAL
      BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
      AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN
      ANY
      WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER TRANSACTION
      DOCUMENTS.

     

    16.  THE
      AGENTS

     

    16.1  Appointment
      of Agents.  Each of the Lenders irrevocably appoints and
      authorizes the Facility Agent to take such action as facility agent on its
      behalf and to exercise such powers under this Agreement, the Note and the other
      Transaction Documents as are delegated to the Facility Agent by the terms hereof
      and thereof.  The Facility Agent nor any of its directors, officers,
      employees or agents shall be liable for any action taken or omitted to be taken
      by it or them under this Agreement, the Note or the other Transaction Documents
      or in connection therewith, except for its or their own gross negligence or
      willful misconduct. 

     

    16.2  Appointment
      of Security  Trustee.  Each of the Lenders irrevocably
      appoints, designates and authorizes the Security Trustee to act as security
      trustee on its behalf with regard to (i) the security, powers, rights,
      titles, benefits and interests (both present and future) constituted by and
      conferred on the Lenders or any of them or for the benefit thereof under or
      pursuant to this Agreement or any of the other Transaction Documents (including,
      without limitation, the benefit of all covenants, undertakings, representations,
      warranties and obligations given, made or undertaken to any Lender in the
      Agreement or the other Transaction Documents), (ii) all moneys, property and
      other assets paid or transferred to or vested in any Lender or any agent of
      any
      Lender or received or recovered by any Lender or any agent of any Lender
      pursuant to, or in connection with, this Agreement or the other Transaction
      Documents whether from any Security Party or any other person and (iii) all
      money, investments, property and other assets at any time representing or
      deriving from any of the foregoing, including all interest, income and other
      sums at any time received or receivable by any Lender or any agent of any Lender
      in respect of the same (or any part thereof). The Security Trustee hereby
      accepts such appointment but shall have no obligations under this Agreement,
      under the Note or under any of the Security Documents except those expressly
      set
      forth herein and therein. 

     

    16.3  Distribution
      of Payments.  Whenever any payment is received by the Facility
      Agent or the Security Trustee from the Borrower or the Guarantor for the account
      of the Lenders, or any of them, whether of principal or interest on the Note,
      commissions, fees under Section 14 or otherwise, it will thereafter cause
      to be distributed on the same day if received before 10 a.m. New York time,
      or on the next day if received thereafter, like funds relating to such payment
      ratably to the Lenders according to their respective Commitments, in each case
      to be applied according to the terms of this Agreement. Unless the Facility
      Agent or the Security Trustee, as the case may be, shall have received notice
      from the Borrower prior to the date when any payment is due hereunder that
      the
      Borrower will not make any payment on such date, the Facility Agent or the
      Security Trustee may assume that the Borrower have made such payment to the
      Facility Agent or the Security Trustee, as the case may be, on the relevant
      date
      and the Facility Agent or the Security Trustee may, in reliance upon such
      assumption, make available to the Lenders on such date a corresponding amount
      relating to such payment ratably to the Lenders according to their respective
      Commitments.  If and to the extent that the Borrower shall not have so
      made such payment available to the Facility Agent or the Security Trustee,
      as
      the case may be, the Lenders and the Borrower (but without duplication)
      severally agree to repay to the Facility Agent or the Security Trustee, as
      the
      case may be, forthwith on demand such corresponding amount together with
      interest thereon, for each day from the date such amount is made available
      to
      the Lenders until the date such amount is repaid to the Facility Agent or the
      Security Trustee, as the case may be, as calculated by the Facility Agent or
      Security Trustee to reflect its cost of funds.

     

    16.4  Holder
      of Interest in Note.  The Agents may treat each Lender as the
      holder of all of the interest of such Lender in the Note.

     

    16.5  No
      Duty to Examine, Etc.  The Agents shall not be under a duty to
      examine or pass upon the validity, effectiveness or genuineness of any of this
      Agreement, the other Transaction Documents or any instrument, document or
      communication furnished pursuant to this Agreement or in connection therewith
      or
      in connection with any other Transaction Document, and the Agents shall be
      entitled to assume that the same are valid, effective and genuine, have been
      signed or sent by the proper parties and are what they purport to be.


     

    16.6  Agents
      as Lenders.  With respect to that portion of the Loan made
      available by it, each Agent shall have the same rights and powers hereunder
      as
      any other Lender and may exercise the same as though it were not an Agent,
      and
      the term “Lender” or “Lenders” shall include the Agent in its capacity as a
      Lender.  Each Agent and its affiliates may accept deposits from, lend
      money to and generally engage in any kind of business with, the Borrower and
      the
      Guarantor as if it were not an Agent.

     

    16.7  Acts
      of the Agents.  Each Agent shall have duties and discretion, and
      shall act as follows:

     

    (a)  Obligations
      of the Agents.  The obligations of each Agent under this
      Agreement, the Note and the other Transaction Documents are only those expressly
      set forth herein and therein;

     

    (b)  No
      Duty to Investigate.  No Agent shall  at any time,
      unless requested to do so by a Lender or Lenders, be under any duty to enquire
      whether an Event of Default, or an event which with the giving of notice or
      lapse of time, or both, would constitute an Event of Default, has occurred
      or to
      investigate the performance of this Agreement, the Note or any Security Document
      by any Security Party; and

     

    (c)  Discretion
      of the Agents.  Each Agent shall be entitled to use its discretion
      with respect to exercising or refraining from exercising any rights which may
      be
      vested in it by, and with respect to taking or refraining from taking any action
      or actions which it may be able to take under or in respect of, this Agreement
      and the other Transaction Documents, unless the Facility Agent shall have been
      instructed by the Majority Lenders to exercise such rights or to take or refrain
      from taking such action; provided, however, that no Agent shall be required
      to
      take any action which exposes it to personal liability or which is contrary
      to
      this Agreement or applicable law;

     

    (d)  Instructions
      of Majority Lenders.  Each Agent shall in all cases be fully
      protected in acting or refraining from acting under this Agreement or under
      any
      other Transaction Document in accordance with the instructions of the Majority
      Lenders, and any action taken or failure to act pursuant to such instructions
      shall be binding on all of the Lenders.

     

    16.8  Certain
      Amendments.  Neither this Agreement, the Note nor any of the
      Security Documents nor any terms hereof or thereof may be amended unless such
      amendment is approved by the Borrower and the Majority Lenders, provided that
      no
      such amendment shall, without the consent of each Lender affected thereby,
      (i) reduce the interest rate or extend the time of payment of scheduled
      principal payments or interest or fees on the Loan, or reduce the principal
      amount of the Loan or any fees hereunder, (ii) increase or decrease the
      Commitment of any Lender or subject any Lender to any additional obligation
      (it
      being understood that a waiver of any Event of Default or any mandatory
      repayment of the Loan shall not constitute a change in the terms of any
      Commitment of any Lender), (iii) amend, modify or waive any provision of
      this Section 16.8, (iv) amend the definition of Majority Lenders or any
      other definition referred to in this Section 16.8, (v) consent to the
      assignment or transfer by the Borrower of any of its rights and obligations
      under this Agreement, (vi) release any Security Party from any of its
      obligations under any Security Document except as expressly provided herein
      or
      in such Security Document or (vii) amend any provision relating to the
      maintenance of collateral under Section 9.4.  All amendments
      approved by the Majority Lenders under this Section 16.8 must be in writing
      and signed by the Borrower and each of the Lenders.  In the event that
      any Lender is unable to or refuses to sign an amendment approved by the Majority
      Lenders hereunder, such Lender hereby appoints the Agent as its Attorney-In-Fact
      for the purposes of signing such amendment.  No provision of this
      Section 16 or any other provisions relating to the Agent may be modified
      without the consent of the Agent.

     

    16.9  Assumption
      re Event of Default.  Except as otherwise provided in
      Section 16.15, the Facility Agent and the Security Trustee shall be
      entitled to assume that no Event of Default, or event which with the giving
      of
      notice or lapse of time, or both, would constitute an Event of Default, has
      occurred and is continuing, unless it has been notified by any Security Party
      of
      such fact, or has been notified by a Lender that such Lender considers that
      an
      Event of Default or such an event (specifying in detail the nature thereof)
      has
      occurred and is continuing.  In the event that either thereof shall
      have been notified by any Security Party or any Lender in the manner set forth
      in the preceding sentence of any Event of Default or of an event which with
      the
      giving of notice or lapse of time, or both, would constitute an Event of
      Default, the Facility Agent shall notify the Lenders and shall take action
      and
      assert such rights under this Agreement, under the Note and under Security
      Documents as the Majority Lenders shall request in writing.

     

    16.10  Limitations
      of Liability.  No Agent or Lender shall be under any liability or
      responsibility whatsoever:

     

    (a)  to
      any
      Security Party or any other person or entity as a consequence of any failure
      or
      delay in performance by, or any breach by, any other Lenders or any other person
      of any of its or their obligations under this Agreement or under any Security
      Document;

     

    (b)  to
      any
      Lender or Lenders as a consequence of any failure or delay in performance by,
      or
      any breach by, any Security Party of any of its respective obligations under
      this Agreement or under the other Transaction Documents; or

     

    (c)  to
      any
      Lender or Lenders for any statements, representations or warranties contained
      in
      this Agreement, in any Security Document or in any document or instrument
      delivered in connection with the transaction hereby contemplated; or for the
      validity, effectiveness, enforceability or sufficiency of this Agreement, any
      other Transaction Document or any document or instrument delivered in connection
      with the transactions hereby contemplated.

     

    16.11  Indemnification
      of the Agent and Security Trustee.  The Lenders agree to indemnify
      each Agent (to the extent not reimbursed by the Security Parties or any
      thereof), pro rata according to the respective amounts of their Commitments,
      from and against any and all liabilities, obligations, losses, damages,
      penalties, actions, judgments, suits, costs, expenses or disbursements of any
      kind or nature whatsoever (including legal fees and expenses incurred in
      investigating claims and defending itself against such liabilities) which may
      be
      imposed on, incurred by or asserted against, such Agent in any way relating
      to
      or arising out of this Agreement or any other Transaction Document, any action
      taken or omitted by such Agent thereunder or the preparation, administration,
      amendment or enforcement of, or waiver of any provision of, this Agreement
      or
      any other Transaction Document, except that no Lender shall be liable for any
      portion of such liabilities, obligations, losses, damages, penalties, actions,
      judgments, suits, costs, expenses or disbursements resulting from
      the  gross negligence or willful misconduct of either such
      Agent.

     

    16.12  Consultation
      with Counsel.  Each of the Facility Agent and the Security Trustee may
      consult with legal counsel selected by such Agent and shall not be liable for
      any action taken, permitted or omitted by it in good faith in accordance with
      the advice or opinion of such counsel.

     

    16.13  Resignation.  Any
      Agent may resign at any time by giving sixty (60) days' written notice
      thereof to the other Agents, the Lenders and the Borrower.  Upon any
      such resignation, the Lenders shall have the right to appoint a successor
      Agent.  If no successor Agent shall have been so appointed by the
      Lenders and shall have accepted such appointment within sixty (60) days
      after the retiring Agent's giving notice of resignation, then the retiring
      Agent
      may, on behalf of the Lenders, appoint a successor Agent which shall be a bank
      or trust company of recognized standing.  The appointment of any
      successor Agent shall be subject to the prior written consent of the Borrower,
      such consent not to be unreasonably withheld.  After any retiring
      Agent's resignation as Agent hereunder, the provisions of this Section 16
      shall continue in effect for its benefit with respect to any actions taken
      or
      omitted by it while acting as Agent.

     

    16.14  Representations
      of Lenders.  Each Lender represents and warrants to each other
      Lender and the Agent that:

     

    (a)  in
      making
      its decision to enter into this Agreement and to make its Commitment available
      hereunder, it has independently taken whatever steps it considers necessary
      to
      evaluate the financial condition and affairs of the Security Parties, that
      it
      has made an independent credit judgment and that it has not relied upon any
      statement, representation or warranty by any other Lender or any Agent;
      and

     

    (b)  so
      long
      as any portion of its Commitment remains outstanding, it will continue to make
      its own independent evaluation of the financial condition and affairs of the
      Security Parties.

     

    16.15  Notification
      of Event of Default.  The Facility Agent hereby undertakes to
      promptly notify the Lenders, and the Lenders hereby promptly undertake to notify
      the Facility Agent and the other Lenders, of the existence of any Event of
      Default which shall have occurred and be continuing of which such party has
      actual knowledge.

     

    17.  NOTICES
      AND DEMANDS

     

    17.1  Notices.  All
      notices, requests, demands and other communications to any party hereunder
      shall
      be in writing (including prepaid overnight courier, facsimile transmission
      or
      similar writing) and shall be given to the Borrower or the Guarantor at the
      address or facsimile number set forth below and to the Lenders and the Agents
      at
      their address and facsimile numbers set forth in Schedule I or at such
      other address or facsimile numbers as such party may hereafter specify for
      the
      purpose by notice to each other party hereto.  Each such notice,
      request or other communication shall be effective (i) if given by
      facsimile, when such facsimile is transmitted to the facsimile number specified
      in this Section and telephonic confirmation of receipt thereof is obtained
      or
      (ii) if given by mail, prepaid overnight courier or any other means, when
      received at the address specified in this Section or when delivery at such
      address is refused.

     

    If
      to the
      Borrower or the Guarantors:

     

    11
      North
      Water Street, Suite 18290

     

    Mobile,
      Alabama 36602

     

    Facsimile
      No.:  (251)-243-9121

     

    Attention:
      Chief Financial Officer

     

    With
      a
      copy to

     

    One
      Whitehall Street

     

    New
      York,
      NY 10004

     

    Facsimile
      No.:  (212) 514-5692

     

    Attention:  Mr.
      Niels M. Johnsen

     

    18.  MISCELLANEOUS

     

    18.1  Time
      of Essence.  Time is of the essence of this Agreement but no
      failure or delay on the part of any Creditor to exercise any power or right
      under this Agreement shall operate as a waiver thereof, nor shall any single
      or
      partial exercise by any Creditor of any power or right hereunder preclude any
      other or further exercise thereof or the exercise of any other power or
      right.  The remedies provided herein are cumulative and are not
      exclusive of any remedies provided by law.

     

    18.2  Unenforceable,
      etc., Provisions - Effect.  In case any one or more of the
      provisions contained in this Agree­ment or in the other Transaction
      Documents would, if given effect, be invalid, illegal or unenforceable in any
      respect under any law applicable in any relevant jurisdiction, said provision
      shall not be enforceable against the relevant Security Party, but the validity,
      legality and enforceability of the remaining provisions herein or therein
      contained shall not in any way be affected or impaired thereby.

     

    18.3  References.  References
      herein to Articles, Sections, Exhibits and Schedules are to be construed as
      references to articles, sections of, exhibits to, and schedules to, this
      Agreement or the other Transaction Documents as applicable, unless the context
      otherwise requires.

     

    18.4  Further
      Assurances.  Each of the Security Parties hereby agrees that if
      this Agreement or any of the other Transaction Documents shall, in the
      reasonable opinion of the Lenders, at any time be deemed by the Lenders for
      any
      reason insufficient in whole or in part to carry out the true intent and spirit
      hereof or thereof, it will execute or cause to be executed such other and
      further assurances and documents as in the opinion of the Lenders may be
      required in order to more effectively accomplish the purposes of this Agreement
      and/or the other Transaction Documents.

     

    18.5  Prior
      Agreements, Merger.  Any and all prior understandings and
      agreements heretofore entered into between the Security Parties on the one
      part,
      and the Creditors, on the other part, whether written or oral, are superseded
      by
      and merged into this Agreement and the other agreements (the forms of which
      are
      exhibited hereto) to be executed and delivered in connection herewith to which
      the Security Parties, the Agent, the Security Trustee and/or the Lenders are
      parties, which alone fully and completely express the agreements between the
      Security Parties, the Agents, and the Lenders.

     

    18.6  Entire
      Agreement; Amendments.  This Agreement constitutes the entire
      agreement of the parties hereto including all parties added hereto pursuant
      to
      an Assignment and Assumption Agreement.  Subject to Section 16.8, any
      provision of this Agreement or any other Transaction Document may be amended
      or
      waived if, but only if, such amendment or waiver is in writing and is signed
      by
      the Borrower, the Agents, and the Majority Lenders.  This Agreement
      may be executed in any number of counterparts, each of which shall be deemed
      an
      original, but all such counterparts together shall constitute one and the same
      instrument. 

     

    18.7  Indemnification.
       Neither any Creditor nor any of its directors, officers, agents or
      employees shall be liable to any of the Security Parties for any action taken
      or
      not taken thereby in connection herewith in the absence of its own gross
      negligence or willful misconduct.  The Borrower and the Guarantor
      hereby jointly and severally agree to indemnify the Creditors, their respective
      affiliates and the respective directors, officers, agents and employees of
      the
      foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from and
      against any and all liabilities, losses, damages, costs and expenses of any
      kind, including, without limitation, the reasonable fees and disbursements
      of
      counsel, which may be incurred by such Indemnitee in connection with any
      investigative, administrative or judicial proceeding (whether or not such
      Indemnitee shall be designated a party thereto) brought or threatened relating
      to or arising out of this Agreement, any actual or proposed use of proceeds
      of
      the Loan hereunder, or any related transaction or claim; provided that (i)
      no
      Indemnitee shall have the right to be indemnified hereunder for such
      Indemnitee's own gross negligence or willful misconduct as determined by a
      court
      of competent jurisdiction and (ii) to the extent permitted by law, the
      Indemnitee shall provide the Security Parties with prompt notice of any such
      investigative, administrative or judicial proceeding after the Indemnitee
      becomes aware of such proceeding; provided, however, that the Indemnitee's
      failure to provide such notice in a timely manner shall not relieve the Security
      Parties of their obligations hereunder.

     

    18.8  Headings.  In
      this Agreement, Section headings are inserted for convenience of reference
      only
      and shall not be taken into account in the interpretation of this
      Agreement.

     

    [Remainder
      of Page Intentionally Left Blank]

     


    
      
              

                  
      
      

                  
      
      

                                            
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS whereof the parties hereto have caused this Agreement to be duly
      executed by their duly authorized representatives as of the day and year first
      above written.

     

    
      	
              WATERMAN
                STEAMSHIP CORPORATION,

            
	
              as
                Borrower

            
	 
	
              By:___________________________________

            
	
              Name:
                Niels M. Johnsen

            
	
              Title:   Chairman

            
	 
	 
	
              INTERNATIONAL
                SHIPHOLDING CORPORATION,

            
	
              as
                Guarantor

            
	 
	
              By:___________________________________

            
	
              Name:
                Niels M. Johnsen

            
	
              Title:  Chairman
                and Chief Executive Officer

            
	 
	 
	
              DNB
                NOR BANK ASA,

            
	
              as
                Facility Agent, Security Trustee and Lender

            
	 
	
              By:____________________________________

            
	
              Name:

            
	
              Title:

            
	 
	 
	
              By:____________________________________

            
	
              Name:

            
	
              Title:

            
	 
	 


    

    



    
      
              

                  
      
      

                  
      
      

                                           
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      I

    


    


    LENDERS                                                                                                COMMITMENT

    


    
      	 	 	 	 
	 	 
	
              DnB
                NOR Bank ASA

              New
                York Branch

              200
                Park Avenue, 31st Floor

              New
                York, New York  10166-0396

              Facsimile
                No.:                                212
                681 3900

              Telephone
                No.:                                212
                681 3856

              Email:                          asa.jemseby@dnbnor.no

              Attention:                          Ms.
                Asa Jemseby

            	 	
              ¥5,000,000,000

            	 


    

    


    



    
      
              

                  
      
      

                  
      
      

                                 
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    SCHEDULE
      II

    


    


    Approved
      Ship Brokers

    


    R.S.
      Platou Shipbrokers
      a.s.                                                                                                           Faber
      Shipping

    Haakon
      VII's gate
      10                                                                                                               Olgasvej
      39

    Oslo,
      Norway                                                                                                           DK-2950
      Vedbek

    Telephone
      No.: +47 23 11 20
      00                                                                                                     Copenhagen,
      Denmark

    Facsimile
      No.: +47 23 11 23
      11                                                                                                   Telephone No.: +45 4566
      0450

             Facsimile
      No.: +45 4566
      0547

    


    Fearnleys
      A/S

    Grev
      Wedels plass 9

    Oslo,
      Norway

    Telephone
      No.: +47 22 93 60 00

    Facsimile
      No.: +47 22 93 61 50

    


    H.
      Clarkson & Company

    12
      Camomile Street

    London
      EC3A 7BP

    England

    Telephone
      No.: +44 207 334 0000

    Facsimile
      No.: +44 207 283 5260

    


    Braemar
      Shipbrokers Ltd.

    35
      Cosway
      Street

    London
      NW1 5BT

    England

    Telephone
      No.: +44 207 535 2600

    Facsimile
      No.: +44 207 535 2601

    


    Jacq.
      Pierot Jr. & Sons, Inc. (USA)

    29
      Broadway

    New
      York,
      NY 10006

    Telephone
      No.: (212) 344 3840

    Facsimile
      No.: (212) 943 6598

    


    Hesnes
      Shipping AS

    Rosanes

    Ørsnesallen
      20

    P.O.
      Box
      40, Teie

    3106
      Tønsberg

    Norway

    Telephone
      No.: +47 33 30 44 44

    Facsimile
      No.: +47 33 32 30 30


    
      
              

                  
      
      

                  
      
      

                                           
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      III

    


    


    


    Security
      Party Liens as of September 10, 2007

    


    


    International
      Shipholding Corporation

     

    


    NONE

    


    The
      foregoing does not reflect Liens to be discharged as a result of Indebtedness
      paid off with the proceeds of the Loan.

     

    


     

    Waterman
      Steamship Corporation

     

    


    
      	
              1.  

            	
              Charter
                Assignment, Earnings Assignment and Insurance Assignment on United
                States
                flag vessel “GREEN DALE” in favor of U.S. Bank National
                Association.

            


    

     

    


    The
      foregoing does not reflect Liens to be discharged as a result of Indebtedness
      paid off with the proceeds of the Loan.

     

    


    



    
      
              

                  
      
      

                  
      
      

                                        
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      IV

    


    


    Security
      Party Indebtedness as of September 10, 2007

    


    International
      Shipholding Corporation

     

    
      	
              1.  

            	
              $38,970,000
                outstanding on ISC's 7.75% Senior Notes, with The Bank of New York,
                as
                trustee, due October 15, 2007.

            


    

     

    
      	
              2.  

            	
              Guarantee
                of indebtedness in the amount of $0 to Whitney National Bank and
                others,
                which indebtedness has a maturity date of December 6,
                2009.

            


    

     

    
      	
              3.  

            	
              Guarantee
                of indebtedness in the amount of $27,333,333 to DnB NOR Bank ASA
                and
                others, which indebtedness has a maturity date of September 26,
                2015.

            


    

     

    
      	
              4.  

            	
              Guarantee
                of indebtedness in the amount of $62,995,000 to Deutsche Schiffsbank
                AS
                and others, which indebtedness has a maturity date of September 30,
                2013.

            


    

     

    
      	
              5.  

            	
              Guarantee
                of indebtedness of $13,790,000 to Liberty Community Ventures III,
                L.L.C.,
                which indebtedness has a maturity date of December 14,
                2012.

            


    

     

    
      	
              6.  

            	
              Guarantee
                of payment and performance obligations of Waterman Steamship Corporation
                pursuant to the Memorandum of
                Agreement.

            


    

     

    Waterman
      Steamship Corporation

     

    
      	
              1.  

            	
              Guarantee
                of indebtedness in the amount of $0 to Whitney National Bank and
                others,
                which indebtedness has a maturity date of December 6,
                2009.