exv10w24





Exhibit 10.24




DATED 1 JUNE 2006 AS AMENDED AND RESTATED

BY A FIRST SUPPLEMENTAL AGREEMENT

DATED JUNE 5, 2008




GULFMARK OFFSHORE, INC.

(as borrower)




— and —




DnB NOR Bank ASA

and others

(as banks)




— and —




DnB NOR Bank ASA

(as mandated lead arranger)




— and —




DnB NOR Bank ASA

(as Issuer)




— and —




DnB NOR Bank ASA

(as agent and security trustee)




 






US$25,000,000 SECURED

REDUCING REVOLVING LOAN

AND LETTER OF CREDIT

FACILITY AGREEMENT

 






STEPHENSON HARWOOD

One, St. Paul’s Churchyard

London EC4M 8SH

Tel: 020 7329 4422

Fax: 020 7329 7100

Ref: 1313/01-46-02912




 









 





CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	1

	 	Definitions and Interpretation
	 	 	1	 
	 
	 	 	 	 	 	 
	2

	 	The Facility and LCs and their Purpose
	 	 	24	 
	 
	 	 	 	 	 	 
	3

	 	Conditions Precedent and Subsequent
	 	 	32	 
	 
	 	 	 	 	 	 
	4

	 	Representations and Warranties
	 	 	36	 
	 
	 	 	 	 	 	 
	5

	 	Repayment, Prepayment and Currency Option
	 	 	41	 
	 
	 	 	 	 	 	 
	6

	 	Interest
	 	 	45	 
	 
	 	 	 	 	 	 
	7

	 	Fees
	 	 	46	 
	 
	 	 	 	 	 	 
	8

	 	Security Documents
	 	 	47	 
	 
	 	 	 	 	 	 
	9

	 	Agency and Trust
	 	 	47	 
	 
	 	 	 	 	 	 
	10

	 	Covenants
	 	 	57	 
	 
	 	 	 	 	 	 
	11

	 	Earnings
	 	 	64	 
	 
	 	 	 	 	 	 
	12

	 	Events Of Default
	 	 	64	 
	 
	 	 	 	 	 	 
	13

	 	Set-Off and Lien
	 	 	69	 
	 
	 	 	 	 	 	 
	14

	 	Assignment and Sub-Participation
	 	 	70	 
	 
	 	 	 	 	 	 
	15

	 	Payments, Mandatory Prepayment, Reserve Requirements and Illegality
	 	 	72	 
	 
	 	 	 	 	 	 
	16

	 	Communications
	 	 	77	 
	 
	 	 	 	 	 	 
	17

	 	General Indemnities
	 	 	78	 
	 
	 	 	 	 	 	 
	18

	 	Miscellaneous
	 	 	80	 
	 
	 	 	 	 	 	 
	19

	 	Law and Jurisdiction
	 	 	84	 
	 
	 	 	 	 	 	 
	SCHEDULE 1	 	 	86	 
	The Banks, the Commitments and the Proportionate Shares	 	 	86	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SCHEDULE 2	 	 	87	 
	 
	 	 	 	 	 	 
	The Vessels	 	 	87	 
	 
	 	 	 	 	 	 
	SCHEDULE 3	 	 	88	 
	Form of Transfer Certificate	 	 	88	 
	 
	 	 	 	 	 	 
	SCHEDULE 4	 	 	91	 
	Form of Drawdown Notice	 	 	91	 
	 
	 	 	 	 	 	 
	SCHEDULE 5	 	 	93	 
	Calculation of the Mandatory Cost	 	 	93	 
	 
	 	 	 	 	 	 
	SCHEDULE 6	 	 	96	 
	Form of Compliance Certificate	 	 	96	 
	 
	 	 	 	 	 	 
	SCHEDULE 7	 	 	98	 
	Form of Issue Request	 	 	98	 







 











 





LOAN FACILITY AGREEMENT DATED 1 JUNE 2006 AS AMENDED AND RESTATED BY A FIRST SUPPLEMENTAL AGREEMENT




Dated:                      2008




BETWEEN:-





	(1)	 	GULFMARK OFFSHORE, INC., a company incorporated according to the law of the State of Delaware
whose principal place of business is at 10111 Richmond Avenue, Suite 340, Houston, Texas,
77042, the United States of America (the “Borrower”); and
	 
	(2)	 	the banks and financial institutions listed in Schedule 1, each acting through its office at
the address indicated against its name in Schedule 1 (together “the Banks” and each a “Bank”);
and
	 
	(3)	 	DnB NOR Bank ASA acting as mandated lead arranger (in that capacity the “MLA”); and
	 
	(4)	 	DnB NOR Bank ASA acting as issuer of the Letters of Credit (in that capacity the “Issuer”);
and
	 
	(5)	 	DnB NOR Bank ASA acting as agent and security trustee through its office at Lars Hillesgate
30, PO Box 7100, NO-5020 Bergen, Norway (in that capacity the “Agent”).





WHEREAS:-



Each of the Banks has agreed to advance to the Borrower its respective Commitment of an aggregate
principal amount not exceeding twenty five million Dollars ($25,000,000) to assist the Borrower in
refinancing the Existing Facility, and thereafter for the general corporate purposes of the Group,
and the Issuer has agreed to issue the Letters of Credit at the request of the Borrower for and on
behalf of the Borrower, for certain obligations of the Borrower on the terms and conditions herein
set forth.




IT IS AGREED as follows:-





	1	 	Definitions and Interpretation






	 	1.1	 	Definitions
	 
	 	 	 	In this Agreement:-




 









 












	 	1.1.1	 	“Accounts” means the consolidated financial accounts of the
Borrower to be provided to the Agent pursuant hereto.
	 
	 	1.1.2	 	“Address for Service” means c/o Gulf Offshore N.S. Limited of
95 Aldwych, London WC2B 4JF, England or, in relation to any of the Security
Parties, such other address in England and Wales as that Security Party may
from time to time designate by no fewer than ten (10) Business Days’ written
notice to the Agent.
	 
	 	1.1.3	 	“Administration” has the meaning given to it in paragraph
1.1.3 of the ISM Code.
	 
	 	1.1.4	 	“Advance Date”, in relation to any Drawing, means the date on
which that Drawing is advanced by the Banks to the Borrower pursuant to Clause
2.
	 
	 	1.1.5	 	“Agent’s Spot Rate of Exchange” means the Agent’s spot rate of
exchange for the purchase of the relevant currency with the Base Currency in
the London foreign exchange market at or about 11.00 a.m. on a particular day.
	 
	 	1.1.6	 	“Approved Brokers” means H. Clarkson & Co. Ltd, Simpson Spence
& Young Shipbrokers Ltd, Fearnley AS, R. S. Platou AS and Seabrokers Group.
	 
	 	1.1.7	 	“Assignments” means the first priority assignments of the
Insurances and Requisition Compensation of the Vessels to be made between the
Borrower and the Agent referred to in Clause 8.1.2 (each an “Assignment”).
	 
	 	1.1.8	 	“Base Currency” means Dollars.
	 
	 	1.1.9	 	“Base Currency Amount” means the amount specified in the
Drawdown Request or, if the amount requested is not denominated in the Base
Currency, that amount converted into the Base Currency at the Agent’s Spot Rate
of Exchange on the date which is three (3) Business Days before the Advance
Date adjusted to reflect any repayment (other than a repayment arising from a
change of currency) or prepayment.










2









 












	 	1.1.10	 	“Borrower’s Obligations” means all of the liabilities and obligations of the
Borrower to the Finance Parties under or pursuant to the Borrower’s Security
Documents, whether actual or contingent, present or future, and whether
incurred alone or jointly or jointly and severally with any other and in
whatever currency, including (without limitation) interest, commission and all
other charges and expenses.
	 
	 	1.1.11	 	“Borrower’s Security Documents” means those of the Security Documents to
which the Borrower is or is to be a party.
	 
	 	1.1.12	 	“Break Costs” means all documented costs, losses, premiums or penalties
incurred by any of the Finance Parties in the circumstances contemplated by
Clause 17.4 or as a result of any of them receiving any prepayment of all or
any part of the Facility (whether pursuant to Clauses 5.2 and 5.3 or otherwise)
or any other payment under or in relation to the Security Documents on a day
other than the due date for payment of the sum in question, and includes
(without limitation) any losses or costs incurred in liquidating or
re-employing deposits from third parties acquired to effect or maintain the
Facility, and any liabilities, expenses or losses incurred by any of the
Finance Parties in terminating or reversing, or otherwise in connection with,
any interest rate and/or currency swap, transaction or arrangement entered into
by any of the Finance Parties with any member of the Group to hedge any
exposure arising under this Agreement, or in terminating or reversing, or
otherwise in connection with, any open position arising under this Agreement.
	 
	 	1.1.13	 	“Business Day” means a day (other than a Saturday or Sunday) on which banks
are open for general business in London, New York City and Bergen and which is
a TARGET Day.
	 
	 	1.1.14	 	“Commitment” means, in relation to each Bank, the amount of the Facility
which that Bank agrees to advance to the Borrower as its several liability as
indicated against the name of that Bank in Schedule 1, as reduced from time to
time in accordance with Clause 2.4, or, where the context permits, the amount
of the Facility advanced by that Bank and remaining outstanding.










3









 












	 	1.1.15	 	“Commitment Commission” means the commitment commission to be paid by the
Borrower to the Agent on behalf of the Banks pursuant to Clause 7.
	 
	 	1.1.16	 	“Commitment Termination Date” means the date falling one month prior to the
Termination Date.
	 
	 	1.1.17	 	“Communication” means any notice, approval, demand, request or other
communication from one party to this Agreement to any other party to this
Agreement.
	 
	 	1.1.18	 	“Communications Address” means 10111 Richmond Avenue, Suite 340, Houston,
Texas, 77042, the United States of America (fax no: +1 713 963 0541 marked for
the attention of Mr E. Guthrie, email: ed.guthrie@gulfmark.com).
	 
	 	1.1.19	 	“Company” means at any given time the company responsible for a Vessel’s
compliance with (i) the ISM Code under paragraph 1.1.2 of the ISM Code and/or
(ii) the ISPS Code (as the case may be).
	 
	 	1.1.20	 	“Compliance Certificate” means a certificate to be delivered by the Borrower
to the Agent substantially in the form of Schedule 6.
	 
	 	1.1.21	 	“Currency of Account” means, in relation to any payment to be made to a
Finance Party pursuant to any of the Security Documents, the currency in which
that payment is required to be made by the terms of the relevant Security
Document.
	 
	 	1.1.22	 	“Default Rate” means the rate which is the aggregate of LIBOR, any Mandatory
Cost, the Margin and two per centum (2%) per annum.
	 
	 	1.1.23	 	“Determination Date” means






	 	(a)	 	the last day of each calendar quarter
during the Facility Period;
	 
	 	(b)	 	after the occurrence of an Event of Default
which is continuing, any date designated by the Agent upon at least





4









 





	 	 	 	three (3) Business Days’ prior written notice to the Borrower;
and






	 	(c)	 	each Advance Date.






	 	1.1.24	 	“DOC” means in relation to the ISM Company, a valid Document of Compliance
issued for the ISM Company by the Administration under paragraph 13.2 of the
ISM Code.
	 
	 	1.1.25	 	“Dollars” “US$” and “$” each means available and freely transferable and
convertible funds in lawful currency of the United States of America.
	 
	 	1.1.26	 	“Drawdown Notice” means a notice complying with Clause 2.3 in the form set
out in Schedule 4.
	 
	 	1.1.27	 	“Drawing” means a part (or, if requested and available, all) of the Facility
advanced by the Banks to the Borrower in accordance with Clause 2.
	 
	 	1.1.28	 	“Earnings”, in relation to a Vessel, means all hires including (without
limitation) all time charter hire and bareboat charter hire, freights, pool
income and other sums payable to or for the account of the Borrower in respect
of that Vessel including (without limitation) all remuneration for salvage and
towage services, demurrage and detention moneys, contributions in general
average, compensation in respect of any requisition for hire and damages and
other payments (whether awarded by any court or arbitral tribunal or by
agreement or otherwise) for breach, termination or variation of any contract
for the operation, employment or use of that Vessel.
	 
	 	1.1.29	 	“Earnings Account” means a bank account to be opened in the name of the
Borrower with the Agent and designated “Vessel Net Earnings Account”.
	 
	 	1.1.30	 	“EBITDA” means, for any twelve month period ending on a Determination Date,
the consolidated profit on ordinary activities of the Group before Taxes:










5









 












	 	(a)	 	adjusted to exclude interest received or
receivable and other similar income to the extent not already
excluded;
	 
	 	(b)	 	before the depreciation of fixed assets
but after excluding any loss or gain arising on the disposal of
fixed assets or shares;
	 
	 	(c)	 	before the deduction of Interest Expense
for such period;
	 
	 	(d)	 	before any charge for the amortisation of
goodwill, merger differences, acquisition costs or any other
intangible asset; and
	 
	 	(e)	 	before adding or deducting extraordinary
or exceptional items (to include, for the avoidance of doubt, any
redundancy costs and foreign exchange profits and losses in relation
to the funding of the business) in each case for such period.






	 	1.1.31	 	“Employee Plan” means an employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any of its ERISA Affiliates is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.
	 
	 	1.1.32	 	“Encumbrance” means any mortgage, charge, pledge, lien, assignment,
hypothecation, preferential right, option, title retention or trust arrangement
or any other agreement or arrangement which, in any of the aforementioned
instances, has the effect of creating security.
	 
	 	1.1.33	 	“Environmental Affiliate” means an agent or employee of the Borrower or a
person in a contractual relationship with the Borrower in respect of the Vessel
owned by it (including without limitation, the operation of or the carriage of
cargo of such Vessel).
	 
	 	1.1.34	 	“Environmental Approvals” means any present or future permit, licence,
approval, ruling, variance, exemption or other authorisation required under the
applicable Environmental Laws.
	 
	 	1.1.35	 	“Environmental Claim” means any and all enforcement, clean-up, removal,
administrative, governmental, regulatory or judicial actions,




6









 






	 	 	 	orders, demands or investigations instituted or completed pursuant to any
Environmental Laws or Environmental Approvals together with any claims
made by any third person relating to damage, contribution, loss or injury
resulting from any Environmental Incident.






	 	1.1.36	 	“Environmental Incident” means:






	 	(a)	 	any release of Environmentally Sensitive
Material from a Vessel; or
	 
	 	(b)	 	any incident in which Environmentally
Sensitive Material is released from a vessel other than a Vessel and
which involves a collision between a Vessel and such other vessel or
some other incident of navigation or operation, in either case, in
connection with which the relevant Vessel is actually or potentially
liable to be arrested, attached, detained or injuncted and/or where
any guarantor, any manager (or any sub-manager of such Vessel) or
any of its officers, employees or other persons retained or
instructed by it (or such sub-manager) are at fault or allegedly at
fault or otherwise liable to any legal or administrative action; or
	 
	 	(c)	 	any other incident in which
Environmentally Sensitive Material is released otherwise than from
such Vessel and in connection with which that Vessel is actually or
potentially liable to be arrested and/or where any guarantor, any
manager (or any sub-manager of the relevant Vessel) or any of its
officers, employees or other persons retained or instructed by it
(or such sub-manager) are at fault or allegedly at fault or
otherwise liable to any legal or administrative action.






	 	1.1.37	 	“Environmental Laws” means all present and future laws, regulations, treaties
and conventions of any applicable jurisdiction which:






	 	(a)	 	have as a purpose or effect the protection
of, and/or prevention of harm or damage to, the environment;




7









 












	 	(b)	 	relate to the carriage of Environmentally
Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
	 
	 	(c)	 	provide remedies or compensation for harm
or damage to the environment; or
	 
	 	(d)	 	relate to Environmentally Sensitive
Materials or health or safety matters.






	 	1.1.38	 	“Environmentally Sensitive Material” means (i) oil and oil products and (ii)
any other waste, pollutant, contaminant or other substance (including any
liquid, solid, gas, ion, living organism or noise) that may be harmful to human
health or other life or the environment or a nuisance to any person or that may
make the enjoyment, ownership or other territorial control of any affected
land, property or waters more costly for such person to a material degree.
	 
	 	1.1.39	 	“ERISA” means, at any date, the United States Employee Retirement Income
Security Act of 1974 (or any successor legislation thereto) as amended from
time to time, and the regulations promulgated and rulings issued thereunder,
all as the same may be in effect at such date.
	 
	 	1.1.40	 	“ERISA Affiliate” of the Borrower means any person that for purposes of Title
I and Title IV of ERISA and Section 412 of the Code would be deemed at any
relevant time to be a single employer with the Borrower, pursuant to Section
414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
	 
	 	1.1.41	 	“ERISA Event” means:






	 	(a)	 	any reportable event, as defined in Section
4043 of ERISA, with respect to an Employee Plan, as to which PBGC has
not by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified of such event;
	 
	 	(b)	 	the filing of a notice of intent to terminate
any Employee Plan, if such termination would require material
additional




8









 






	 	 	 	contributions in order to be considered a standard termination
within the meaning of Section 404(b) of ERISA, the filing under
Section 4041(c) of ERISA of a notice of intent to terminate any
Employee Plan or the termination of any Employee Plan under
Section 4041(c) of ERISA;






	 	(c)	 	the institution of proceedings under Section
4042 of ERISA by the PBGC for the termination of, or the appointment of
a trustee to administer, any Employee Plan;
	 
	 	(d)	 	the failure to make a required contribution to
any Employee Plan that would result in the imposition of an encumbrance
under Section 412 of the Code or Section 302 of ERISA or the filing of
any request for a minimum funding waiver under Section 412 of the Code
with respect to any Employee Plan or Multiemployer Plan;
	 
	 	(e)	 	an engagement in a non-exempt prohibited
transaction within the meaning of Section 4975 of the Code or Section
406 of ERISA;
	 
	 	(f)	 	the complete or partial withdrawal of the
Borrower or any of its EIRSA Affiliates from a Multiemployer Plan; and
	 
	 	(g)	 	the Borrower or any of its ERISA Affiliates
incurring any liability under Title IV of ERISA with respect to any
Employee Plan (other than premiums due and not delinquent under section
4007 of ERISA).






	 	1.1.42	 	“EURIBOR” means:






	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for the
relevant Interest Period) the arithmetic mean of the rates (rounded
upwards to four decimal places) as supplied to the Agent at its
request quoted by the Reference Banks to leading banks in the
European interbank market,




9









 






	 	 	 	at 11.00 a.m. (Brussels time) on the Quotation Day for the offering of
deposits in euro in an amount comparable to the Loan (or any relevant part
of the Loan) and for a period comparable to the relevant Interest Period.






	 	1.1.43	 	“euro” and “€” means the single currency of the Participating Member States.
	 
	 	1.1.44	 	“Event of Default” means any of the events set out in Clause 12.2.
	 
	 	1.1.45	 	“Execution Date” means the date on which this Agreement is executed by each
of the parties hereto.
	 
	 	1.1.46	 	“Existing Facility” means a senior secured revolving reducing multi-currency
credit facility agreement for $100,000,000 dated 26 June 2002 made between Gulf
Offshore N.S. Limited, GulfMark Norge AS and GulfMark Offshore, Inc. as
borrowers provided by the banks and institutions listed therein as lenders,
GulfMark Offshore, Inc. as guarantor, Nordea Bank Norge ASA and the Royal Bank
of Scotland PLC as arrangers, Nordea Norge ASA as facility agent and security
trustee and Danship Ship Finance as co-arranger.
	 
	 	1.1.47	 	“Existing Swap Arrangements” means a foreign exchange currency transaction
dated 30 September 2005 for value 17 March 2007 between the Borrower and Nordea
Bank Finland plc (New York branch).
	 
	 	1.1.48	 	“Facility” means the reducing revolving credit facility made available by the
Banks to the Borrower pursuant to this Agreement.
	 
	 	1.1.49	 	“Facility Outstandings” at any time means the total of all Drawings made at
that time, to the extent not reduced by repayments, prepayments or voluntary
reductions.
	 
	 	1.1.50	 	“Facility Period” means the period beginning on the Execution Date and ending
on the date when the whole of the Indebtedness has been repaid in full and the
Borrower has ceased to be under any further actual or contingent liability to
the Finance Parties under or in connection with the Security Documents.










10









 












	 	1.1.51	 	“Fee Letter” means a letter or letters from the Agent to the Borrower setting
out certain fees payable to the Agent in connection with the Facility.
	 
	 	1.1.52	 	“Final Balloon Payment” means an amount of sixteen million four hundred
thousand Dollars ($16,400,000), less any voluntary cancellation pursuant to
Clause 2.4.2 or any mandatory prepayment pursuant to Clause 2.4.3 or Clause
2.4.4, which shall be payable on the Termination Date.
	 
	 	1.1.53	 	“Finance Parties” means the Banks, the MLA and the Agent.
	 
	 	1.1.54	 	“Financial Indebtedness” means any indebtedness of any person for or in
respect of:






	 	(a)	 	moneys borrowed or raised;
	 
	 	(b)	 	amounts raised under any acceptance
credit facility;
	 
	 	(c)	 	amounts raised pursuant to any note
purchase facility or the issue of bonds, notes, debentures, loan
stock or similar instruments;
	 
	 	(d)	 	amounts raised pursuant to any issue of
shares of the relevant person which are expressed to be redeemable;
	 
	 	(e)	 	the amount of any liability in respect of
leases or hire purchase contracts which would, in accordance with
GAAP, be treated as finance or capital leases;
	 
	 	(f)	 	all reimbursement obligations whether
contingent or not in respect of amounts paid under a letter of
credit or similar instrument;
	 
	 	(g)	 	all interest rate, currency swap and
similar agreements obliging the making of payments, whether
periodically or upon the happening of a contingency (and the value
of such indebtedness shall be the mark-to-market valuation of such
transaction at the relevant time) with the exception of the Existing
Swap Arrangements;










11









 












	 	(h)	 	amounts raised under any other
transaction (including, without limitation, any forward sale or
purchase agreement) having the commercial effect of a borrowing; and
	 
	 	(i)	 	any guarantee of indebtedness falling
within paragraphs (a) to (h) above.






	 	1.1.55	 	“First Reduction Date” means the date falling sixty six (66) calendar months
after the Execution Date.
	 
	 	1.1.56	 	“GAAP” means either IFRS or the generally accepted accounting principles in
the United States of America.
	 
	 	1.1.57	 	“Group” means the Borrower and each of its Subsidiaries.
	 
	 	1.1.58	 	“IFRS” means International Financial Reporting Standards issued and/or
adopted by the International Accounting Standards Board.
	 
	 	1.1.59	 	“Indebtedness” means the Facility Outstandings; all other sums of any nature
including costs (together with all interest on any of those sums) which from
time to time may be payable by the Borrower to the Finance Parties pursuant to
the Security Documents; any damages payable as a result of any breach by the
Borrower of any of the Security Documents; and any damages or other sums
payable as a result of any of the obligations of the Borrower under or pursuant
to any of the Security Documents being disclaimed by a liquidator or any other
person, or, where the context permits, the amount thereof for the time being
outstanding.
	 
	 	1.1.60	 	“Insurances”, in relation to a Vessel, means all policies and contracts of
insurance (including but not limited to hull and machinery, all entries in
protection and indemnity or war risks associations) which are from time to time
taken out or entered into in respect of or in connection with that Vessel or
her increased value and (where the context permits) all benefits thereof,
including all claims of any nature and returns of premium.










12









 












	 	1.1.61	 	“Interest Expense” means the interest paid by any member of the Group on the
Total Debt in the twelve month period ending on a Determination Date.
	 
	 	1.1.62	 	“Interest Payment Date” means each date for the payment of interest in
accordance with Clause 6.
	 
	 	1.1.63	 	“Interest Period” means each interest period selected by the Borrower or
agreed by the Banks pursuant to Clause 6.
	 
	 	1.1.64	 	“ISM Code” means the International Ship Management Code for the Safe
Operation of Ships and for Pollution Prevention.
	 
	 	1.1.65	 	“ISM Company” means, at any given time, the company responsible for a
Vessel’s compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.
	 
	 	1.1.66	 	“ISPS Code” means the International Ship and Port Security Code as adopted by
the Conference of Contracting Governments to the Safety of Life at Sea
Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2 of the
Safety of Life at Sea Convention 1974.
	 
	 	1.1.67	 	“Issue Date” means the date on which an LC is issued under Clause 2.11.
	 
	 	1.1.68	 	“Issue Request” means a notice substantially in the form set out in Schedule
7.
	 
	 	1.1.69	 	“law” or “Law” means any law, statute, treaty, convention, regulation,
instrument or other subordinate legislation or other legislative or
quasi-legislative rule or measure, or any order or decree of any government,
judicial or public or other body or authority, or any directive, code of
practice, circular, guidance note or other direction issued by any competent
authority or agency (whether or not having the force of law).
	 
	 	1.1.70	 	“LC” means any letter of credit, standby letter of credit, payment guarantees
or other equivalent instruments which the Issuer in its absolute discretion
agrees to issue hereunder.










13









 












	 	1.1.71	 	“LC Amount” means the aggregate from time to time of the actual and
contingent liabilities of the Issuer under or pursuant to the LCs.
	 
	 	1.1.72	 	“LC Availability Termination Date” means the seventh anniversary of the
Execution Date.
	 
	 	1.1.73	 	“LIBOR” means:






	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for any
Interest Period or for any currency in which the Facility is to be
denominated during that Interest Period) the arithmetic mean of the
rates (rounded upwards to four decimal places) as supplied to the
Agent at its request quoted by the Reference Banks to leading banks
in the London interbank market,






	 	 	 	at 11.00 a.m. (London time) on the Quotation Day for the offering of
deposits in the currency in which the Facility is to be denominated during
the relevant Interest Period in an amount comparable to the Facility (or
any relevant part of the Facility) and for a period comparable to the
relevant Interest Period.






	 	1.1.74	 	“Majority Banks” means any one or more Banks whose combined Proportionate
Shares exceed sixty six and two thirds per centum (662/3%).
	 
	 	1.1.75	 	“Manager” means the Borrower or any entity within the Group.
	 
	 	1.1.76	 	“Mandatory Cost” means for each Bank to which it applies, the cost imputed to
that Bank of compliance with the mandatory liquid asset requirements of the
Bank of England and/or the banking supervision or other costs imposed by the
Financial Services Authority, determined in accordance with Schedule 5
(Calculation of the Mandatory Cost).
	 
	 	1.1.77	 	“Margin” shall be calculated on, and effective from each Determination Date
in accordance with the following grid based on the ratio of (a) the Borrower’s
average Total Debt over the twelve (12) month period




14









 






	 	 	 	terminating on the relevant Determination Date to (b) the Borrower’s
consolidated EBITDA determined on the relevant Determination Date:





	 	 	 
	Total Debt/EBITDA	 	Applicable Margin
	Less than 2.5

	 	0.70% p.a.
	Equal to or greater than 2.5 but less than 5.0
	 	0.80% p.a.
	Equal to or greater than 5.0

	 	0.90% p.a.







	 	1.1.78	 	“Margin Stock” means margin stock or “margin security” within the meaning of
Regulations T, U and X.
	 
	 	1.1.79	 	“Material Adverse Effect” means a material adverse change in, or a material
adverse effect on:






	 	(a)	 	the financial condition, assets,
prospects or business of any Security Party or on the consolidated
financial condition, assets, prospects or business of the Group;
	 
	 	(b)	 	the ability of any Security Party to
perform and comply with its obligations under any Security Document
or to avoid any Event of Default;
	 
	 	(c)	 	the validity, legality or enforceability
of any Security Document; or
	 
	 	(d)	 	the validity, legality or enforceability
of any security expressed to be created pursuant to any Security
Document or the priority and ranking of any such security.






	 	1.1.80	 	“Material Subsidiary” means any Subsidiary of the Borrower whose net asset
value represents ten per cent (10%) or more of the net asset value of the
Group, as indicated by the financial statements to be delivered to the Agent
pursuant to Clause 10.2.1.




15









 












	 	1.1.81	 	“Maximum Facility Amount” means an amount not exceeding the lesser of (i)
eighty per cent (80%) of the aggregate value of the Vessels as determined by
the Valuations and (ii) twenty five million Dollars ($25,000,000) less the LC
Amount from time to time,
	 
	 	 	 	and subject to any reductions effected in accordance with Clauses 2.4,
15.7 and 15.8.






	 	1.1.82	 	“Maximum LC Amount” means twenty five million Dollars ($25,000,000).
	 
	 	1.1.83	 	“Mortgages” means the first preferred naval mortgages over each of the
Vessels made or to be made between the Borrower and the Agent referred to in
Clause 8.1.1 (each a “Mortgage”).
	 
	 	1.1.84	 	“Multiemployer Plan” means a “multiemployer plan” (as defined in Section
(3)(37) of ERISA) contributed to for any employees of the Borrower or any of
its ERISA Affiliates.
	 
	 	1.1.85	 	“Net Earnings” means the Earnings less any Operating Commissions.
	 
	 	1.1.86	 	“NIBOR” means the Norwegian interbank offered rate being the rate per annum
equal to the offered quotation for deposits in amounts equal to that Drawing
(and for periods equal to the Interest Period of that Drawing) appearing on
Reuters Screen page NIBR, published by Reuters through its monitor service or
any equivalent successor to such service at or about 12:00 p.m. (Oslo time) on
the applicable Quotation Day or if no such rate is available, the arithmetic
mean (rounded upwards to the nearest 1/16 of one per cent) of the rate per
annum at which the Agent is able to acquire NOK in the amount and for the
Interest Period equal to such Drawing in the Norwegian interbank market at or
about 12:00 p.m. (Oslo time) on the applicable Quotation Day.
	 
	 	1.1.87	 	“Norwegian Kroner” means the lawful currency of the Kingdom of Norway.




16









 












	 	1.1.88	 	“Optional Currency” means any of Dollars, Sterling, Euro and Norwegian
Kroner.
	 
	 	1.1.89	 	“Operating Commissions” means any commissions or fees payable by the Borrower
in respect of any of the Vessels to any agents in respect of the chartering of
the Vessels.
	 
	 	1.1.90	 	“Participating Member State” means any member state of the European Community
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Community relating to Economic and Monetary Union.
	 
	 	1.1.91	 	“Party” means a party to this Agreement.
	 
	 	1.1.92	 	“PBGC” means the U.S. Pension Benefit Guaranty Corporation, or any entity
succeeding to all or any of its functions under ERISA.
	 
	 	1.1.93	 	“Permitted Liens” means (i) any Encumbrance which has the prior written
approval of the Agent or (ii) any Encumbrances that arise either by operation
of law or in the ordinary course of the business of the relevant Security Party
which are discharged in the ordinary course of business.
	 
	 	1.1.94	 	“Potential Event of Default” means any event which, with the giving of notice
and/or the passage of time and/or the satisfaction of any materiality test,
would constitute an Event of Default.
	 
	 	1.1.95	 	“Pre-Approved Classification Society” means any of Det norske Veritas, Lloyds
Register of Shipping, American Bureau of Shipping (ABS), Germanischer Lloyd or
Bureau Veritas.
	 
	 	1.1.96	 	“Proceedings” means any suit, action or proceedings begun by any of the
Finance Parties arising out of or in connection with the Security Documents.
	 
	 	1.1.97	 	“Proportionate Share” means, for each Bank, the percentage that its
Commitment bears to the aggregate Commitments of all Banks from time to time,
being initially the percentage indicated against the name of that Bank in
Schedule 1.




17









 












	 	1.1.98	 	“Quotation Day” means, in relation to any period for which an interest rate
is to be determined :






	 	(a)	 	(if the currency is sterling) the first day of that period;
	 
	 	(b)	 	(if the currency is euro) two TARGET Days
before the first day of that period; or
	 
	 	(c)	 	(for any other currency) two Business Days
before the first day of that period,






	 	 	 	unless market practice differs in the relevant interbank market for a
currency, in which case the Quotation Day will be determined by the Agent
in accordance with market practice in that interbank market.






	 	1.1.99	 	“Reference Banks” means the office of DnB NOR Bank ASA at Lars Hillesgate 30,
PO Box 7100, NO-5020 Bergen, Norway, The Royal Bank of Scotland plc at 1 Albyn
Place, Aberdeen AB10 1BR, Scotland and HSH Nordbank AG at
Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany or such other banks as may
be appointed by the Agent in consultation with the Borrower.
	 
	 	1.1.100	 	“Regulations T, U and X” means, respectively Regulations T, U and X of the
Board of Governors of the Federal Reserve System of the United States (or any
successor) as now and from time to time hereafter in effect.
	 
	 	1.1.101	 	“Requisition Compensation”, in relation to a Vessel, means all compensation
or other money which may from time to time be payable to the Borrower as a
result of that Vessel being requisitioned for title or in any other way
compulsorily acquired (other than by way of requisition for hire).
	 
	 	1.1.102	 	“Screen Rate” means:






	 	(a)	 	in relation to LIBOR, the British
Bankers’ Association Interest Settlement Rate for the relevant
currency and period; and




18









 












	 	(b)	 	in relation to EURIBOR, the percentage
rate per annum determined by the Banking Federation of the European
Union for the relevant period; and
	 
	 	(c)	 	in relation to NIBOR, Reuters screen page
NIBR,






	 	 	 	displayed on the appropriate page of the Reuters screen. If the agreed
page is replaced or the service ceases to be available, the Agent may
specify another page or service displaying the appropriate rate after
consultation with the Borrower and the Banks.






	 	1.1.103	 	“Security Documents” means this Agreement, the Assignments, the Mortgages or
(where the context permits) any one or more of them, and any other agreement or
document which may at any time be executed as security for the payment of all
or any part of the Indebtedness.
	 
	 	1.1.104	 	“Security Parties” means, at any relevant time, the Borrower and any other
party who may at any time during the Facility Period be liable for, or provide
security for, all or any part of the Indebtedness, and “Security Party” means
any one of them.
	 
	 	1.1.105	 	“SMC” means a valid safety management certificate issued for a Vessel by or
on behalf of the Administration under paragraph 13.7 of the ISM Code.
	 
	 	1.1.106	 	“SMS” means, in relation to each Vessel, a safety management system for that
Vessel developed and implemented in accordance with the ISM Code and including
the functional requirements, duties and obligations required by the ISM Code.
	 
	 	1.1.107	 	“Sterling” means the lawful currency of England.
	 
	 	1.1.108	 	“Subsequent Reduction Dates” means each date falling at consecutive six
monthly intervals after the previous Subsequent Reduction Date which in the
case of the first Subsequent Reduction Date shall be six months after the First
Reduction Date.




19









 












	 	1.1.109	 	“Subsidiary” means a subsidiary undertaking, as defined in section 736
Companies Act 1985, or any analogous definition under any other relevant system
of law.
	 
	 	1.1.110	 	“TARGET” means the Trans-European Automated Real-time Gross Settlement
Express Transfer payment system.
	 
	 	1.1.111	 	“TARGET Day” means any day on which TARGET is open for the settlement of
payments in euro.
	 
	 	1.1.112	 	“Taxes” means all taxes, levies, imposts, duties, charges, fees, deductions
and withholdings (including any related interest and penalties) and any
restrictions or conditions resulting in any charge, other than taxes on the
overall net income of a Finance Party or branch thereof, and “Tax” and
“Taxation” shall be interpreted accordingly.
	 
	 	1.1.113	 	“Termination Date” means the seventh anniversary of the Execution Date.
	 
	 	1.1.114	 	“Total Assets” means the amount which is equal to the total consolidated
assets of the Borrower as shown in the Borrower’s latest audited consolidated
balance sheet less the goodwill (if any) of the Borrower as shown in the
Borrower’s latest audited balance sheet.
	 
	 	1.1.115	 	“Total Debt” means the aggregate of:-






	 	(a)	 	the amount calculated in accordance with
GAAP shown as each of “long term debt”, “short term debt” and
“current portion of long term debt” on the latest consolidated
balance sheet of the Borrower; and
	 
	 	(b)	 	the amount of any liability in respect of
any lease or hire purchase contract entered into by the Borrower or
any of its Subsidiaries which would, in accordance with GAAP, be
treated as a finance or capital lease.






	 	1.1.116	 	“Total Loss”, in relation to a Vessel, means:-




20









 












	 	(a)	 	an actual, constructive, arranged, agreed
or compromised total loss of that Vessel; or
	 
	 	(b)	 	the requisition for title, compulsory
acquisition, nationalisation or expropriation of that Vessel by or on
behalf of any government or other authority (other than by way of
requisition for hire); or
	 
	 	(c)	 	the capture, seizure, arrest, detention or
confiscation of that Vessel, unless the Vessel is released and
returned to the possession of the Borrower within thirty (30) days
after the capture, seizure, arrest, detention or confiscation in
question.






	 	1.1.117	 	“Total Shareholders Equity” means the aggregate of the amount paid up on the
issued share capital of any relevant entity and the amount standing to the
credit of its capital and revenue reserves (including any share premium account
or capital redemption reserve but excluding any revaluation reserve,) plus or
minus the amount standing to the credit or debit (as the case may be) of its
profit and loss account.
	 
	 	1.1.118	 	“Transfer Certificate” means a certificate materially in the form set forth
in Schedule 3 signed by a Bank and a Transferee whereby:-






	 	(a)	 	such Bank seeks to procure the transfer to
such Transferee of all or a part of such Bank’s rights and
obligations under this Agreement upon and subject to the terms and
conditions set out in Clause 14; and
	 
	 	(b)	 	such Transferee undertakes to perform the
obligations it will assume as a result of delivery of such
certificate to the Agent as is contemplated in Clause 14.






	 	1.1.119	 	“Transfer Date” means, in relation to any Transfer Certificate, the date for
the making of the transfer specified in the schedule to such Transfer
Certificate.




21









 












	 	1.1.120	 	“Transferee” means a bank or other financial institution to which a Bank
seeks to transfer all or part of such Bank’s rights and obligations under this
Agreement.
	 
	 	1.1.121	 	“Trust Property” means:-






	 	(a)	 	the benefit of Clause 8 and the covenants
contained in Clause 9.3; and
	 
	 	(b)	 	all benefits arising under (including,
without limitation, all proceeds of the enforcement of) each of the
Security
Documents (other than this Agreement), with the exception of any
benefits arising solely for the benefit of the Agent.






	 	1.1.122	 	“UCC” means the Uniform Commercial Code as from time to time in effect in
the State of Delaware, or, if the Uniform Commercial Code in any other State of
the United States of America is mandatorily applicable with respect to any
particular matter, the Uniform Commercial Code as from time to time in effect
in such other State of the United States of America.
	 
	 	1.1.123	 	“Valuation” means in relation to a Vessel the average of the written
valuations of that Vessel expressed in Dollars prepared by two of the Approved
Brokers (or such other firms of reputable independent shipbrokers as may be
acceptable to the Majority Banks), to be nominated by the Borrower. Such
valuations shall be prepared at the Borrower’s expense (unless otherwise stated
in this Agreement), without a physical inspection, on the basis of a sale for
prompt delivery for cash at arm’s length on a charter free basis between a
willing buyer and a willing seller.
	 
	 	1.1.124	 	“Vessels” means, subject to Clause 2.17, those vessels listed in Schedule 2
(each a “Vessel”).




22









 












	 	1.2	 	Interpretation
	 
	 	 	 	In this Agreement:-






	 	1.2.1	 	words denoting the plural number include the singular and vice versa;
	 
	 	1.2.2	 	words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice versa;
	 
	 	1.2.3	 	references to Recitals, Clauses, Schedules and Appendices are
references to recitals and clauses of, and schedules and appendices to, this
Agreement;
	 
	 	1.2.4	 	references to this Agreement include the Recitals, the
Schedules and the Appendices;
	 
	 	1.2.5	 	the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be ignored in
the interpretation of this Agreement;
	 
	 	1.2.6	 	references to any document (including, without limitation, to
all or any of the Security Documents) are, unless the context otherwise
requires, references to that document as amended, supplemented, novated or
replaced from time to time;
	 
	 	1.2.7	 	references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted;
	 
	 	1.2.8	 	references to any of the Finance Parties include its
successors, transferees and assignees;
	 
	 	1.2.9	 	references to times of day are unless otherwise stated to
London time; and
	 
	 	1.2.10	 	unless the contrary intention appears, a reference to a month or months is a
reference to a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month or the calendar month
in which it is to end, except that:






23











 






	 	(i)	 	if the numerically corresponding day is not a
Business Day, the period will end on the next Business Day in that
month (if there is one) or the preceding Business Day (if there is
not);
	 
	 	(ii)	 	if there is no numerically corresponding day in
that month, that period will end on the last Business Day in that
month; and
	 
	 	(iii)	 	notwithstanding sub-paragraph (i) above, a
period which commences on the last Business Day of a month will end on
the last Business Day in the next month or the calendar month in which
it is to end, as appropriate.






	2	 	The Facility and LCs and their Purpose






	 	2.1	 	Agreement to lend Subject to the terms and conditions of this Agreement, and
in reliance on each of the representations and warranties made or to be made in or in
accordance with each of the Security Documents, each of the Banks agrees to advance to
the Borrower its Commitment of an aggregate principal amount not exceeding the Maximum
Facility Amount to be used by the Borrower for the purposes referred to in the Recital.
	 
	 	2.2	 	Drawings Subject to satisfaction by the Borrower of the conditions set out in
Clause 3.1 (in respect of the first Drawing), or Clause 3.2 (in respect of all
subsequent Drawings) and subject to Clause 2.3, and provided that the maximum aggregate
amount of the Facility Outstandings at any given time during the Facility Period shall
not exceed the Maximum Facility Amount, each Drawing shall be advanced to the Borrower,
in each case by the Agent transferring the amount of the Drawing to such account as the
Borrower shall notify to the Agent in the relevant Drawdown Notice by such same day
method of funds transfer as the Agent shall select.
	 
	 	2.3	 	Advance of Drawings Each Drawing shall be advanced in the Base Currency. Each
Drawing shall be advanced on a Business Day, provided that the Borrower shall have
given to the Agent not more than ten and not fewer than three Business Days’ notice in
writing materially in the form set out in Schedule 4 of the required Advance Date of
the Drawing in question and provided that the requested




24









 






	 	 	 	Drawing would not cause a breach of Clause 2.5. Each Drawdown Notice once given
shall be irrevocable and shall constitute a warranty by the Borrower that:-






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






The Agent shall promptly notify each Bank of the receipt of each
Drawdown Notice, following which each Bank will make its Proportionate Share of
the amount of the requested Drawing available to the Borrower through the Agent
on the Advance Date requested.




	 	2.4	 	Facility Reduction






	 	2.4.1	 	The aggregate amount of the Facility available to the Borrower
for drawing under this Agreement shall be twenty five million Dollars
($25,000,000) (less the LC Amount from time to time) during the period from the
Execution Date until the First Reduction Date. On the First Reduction Date and
on each of the Subsequent Reduction Dates the amount of the Facility available
for drawing shall be reduced by two million one hundred and fifty thousand
Dollars ($2,150,000), which shall leave the Final Balloon Payment as being
payable on the Termination Date. On the Termination Date the Facility
available shall be reduced to zero. Subject to the proviso hereto, the
mandatory reductions in the amount of the Facility available for drawing
required pursuant to this Clause will be made in the amounts and at the times
specified whether or not the Maximum Facility Amount is reduced pursuant to
Clause 2.4.2, Clause 2.4.3, Clause 2.4.4, Clause 15.7 or Clause 15.8. PROVIDED
ALWAYS THAT any mandatory reductions pursuant to Clause 2.4.2 (voluntary
reductions), Clause 2.4.3 (sale) or Clause 2.4.4 (Total Loss)




25









 






	 	 	 	shall be applied to the remaining mandatory reductions hereunder on a pro
rata basis.






	 	2.4.2	 	The Borrower may voluntarily cancel the Maximum Facility
Amount in whole or in part in an amount of not less than five million Dollars
($5,000,000) and shall be in integral multiples of one million Dollars
($1,000,000), provided that it has first given to the Agent not fewer than five
(5) Business Days’ prior written notice expiring on a Business Day (the
“Cancellation Date”) of its desire to reduce the Maximum Facility Amount. Such
notice, once received by the Agent, shall be irrevocable and shall oblige the
Borrower to make payment of all interest and Commitment Commission accrued on
the amount so cancelled up to and including the Cancellation Date together with
any Break Costs in respect of such cancelled amount if the Cancellation Date is
not an Interest Payment Date. Any such reduction in the Maximum Facility
Amount:






	 	(a)	 	shall not be reversed; and
	 
	 	(b)	 	shall be applied against the Final Balloon
Payment, and the Final Balloon Payment shall be reduced by the same
amount as any such reduction of the Maximum Facility Amount.






	 	2.4.3	 	In the event of a sale or disposal of a Vessel, if the
aggregate Valuation of the remainder of the Vessels is less than one hundred
and seventy five per cent (175%) of the Maximum Facility Amount, then the whole
of the net sales proceeds shall be applied as a mandatory prepayment and the
Maximum Facility Amount shall be reduced by an amount equal to such prepayment.
Such reduction shall be made on the date of such sale or disposal. If the
aggregate Valuation of the remainder of the Vessels is between one hundred and
seventy five per cent (175%) and two hundred per cent (200%) of the Maximum
Facility Amount, then no prepayment shall be required and there shall be no
reduction to the Maximum Facility Amount until such time as seven million
Dollars ($7,000,000) has been released under this Clause 2.4.3 when aggregated
with those amounts similarly released under Clause 2.4.4, whereupon the whole
of any further net sales proceeds shall be applied as a mandatory prepayment
and the Maximum Facility Amount shall be reduced by an amount equal




26









 






	 	 	 	to such prepayment. If the aggregate Valuation of the remainder of the
Vessels is above two hundred per cent (200%) of the Maximum Facility Amount
then no prepayment shall be required and there shall be no reduction to the
Maximum Facility Amount. In each case, the Valuations used shall be that
attached to the then most recently delivered Compliance Certificate. Any
such prepayment shall oblige the Borrower to make payment of all interest
and Commitment Commission accrued on the amount so reduced up to and
including the date of reduction together with any Break Costs in respect of
such reduced amount if the date of such reduction is not an Interest
Payment Date. Any such reduction in the Maximum Facility Amount:






	 	(a)	 	shall not be reversed; and
	 
	 	(b)	 	shall be applied against the Final Balloon
Payment, and the Final Balloon Payment shall be reduced by the same
amount as any such reduction of the Maximum Facility Amount.






	 	2.4.4	 	In the event that a Vessel becomes a Total Loss, on the
earlier to occur of (a) the date of receipt of the proceeds of the Total Loss
and (b) the date falling one hundred and eighty (180) days after the occurrence
of the Total Loss (the “Reduction Date”), if the aggregate Valuation of the
remainder of the Vessels is less than one hundred and seventy five per cent
(175%) of the Maximum Facility Amount then the whole of any total loss proceeds
shall be applied as a mandatory prepayment and the Maximum Facility Amount
shall be reduced by an amount equal to such prepayment. If the aggregate
Valuation of the remainder of the Vessels is between one hundred and seventy
five per cent (175%) and two hundred per cent (200%) of the Maximum Facility
Amount, then no prepayment shall be required and there shall be no reduction to
the Maximum Facility Amount until such time as seven million Dollars
($7,000,000) has been released under this Clause 2.4.4 when aggregated with
those amounts similarly released under Clause 2.4.3, whereupon the whole of any
further total loss proceeds shall be applied as a mandatory prepayment and the
Maximum Facility Amount shall be reduced by an amount equal to such prepayment.
If the aggregate Valuation of the remainder of the Vessels is




27









 






	 	 	 	above two hundred per cent (200%) of the Maximum Facility Amount, then no
prepayment shall be required and there shall be no reduction to the Maximum
Facility Amount. In each case, the Valuation used shall be that attached to
the then most recently delivered Compliance Certificate. Any such
prepayment shall oblige the Borrower to make payment of all interest and
Commitment Commission accrued on the amount so reduced up to and including
the date of reduction together with any Break Costs in respect of such
reduced amount if the date of such reduction is not an Interest Payment
Date. Any such reduction in the Maximum Facility Amount:






	 	(a)	 	shall not be reversed; and
	 
	 	(b)	 	shall be applied against the Final Balloon
Payment, and the Final Balloon Payment shall be reduced by the same
amount as any such reduction of the Maximum Facility Amount.






	 	2.4.5	 	To the extent that repayments or prepayments made by the
Borrower to the Agent in accordance with this Agreement reduce the Facility
Outstandings to less than the Maximum Facility Amount, the Borrower shall again
be entitled to make Drawings up to the Commitment Termination Date in
accordance with and subject to the terms of this Agreement. Any part of the
Facility which is undrawn on the Commitment Termination Date shall be
automatically cancelled.
	 
	 	2.4.6	 	Simultaneously with each reduction of the Maximum Facility
Amount in accordance with Clause 2.4.1, Clause 2.4.2, Clause 2.4.3 or Clause
2.4.4, (as the case may be), the Commitment of each Bank will reduce so that
the Commitments of the Banks in respect of the reduced Maximum Facility Amount
remain in accordance with their respective Proportionate Shares.






	 	2.5	 	Restrictions on Drawings The Borrower shall not be entitled to make more than
one Drawing on any Business Day and no more than five (5) Drawings may be outstanding
at any one time during the Facility Period. Each Drawing shall be of an amount of not
less than four million Dollars ($4,000,000) and shall be in integral multiples of one
million Dollars ($1,000,000), or the equivalent in an




28









 






	 	 	 	Optional Currency. If at any time during the Facility Period the Facility
Outstandings exceed the Maximum Facility Amount then available or if a proposed
Drawing added to the Facility Outstandings would result in the Maximum Facility
Amount being exceeded then the Borrower shall immediately pay to the Agent on behalf
of the Banks such amounts as will ensure that the Facility Outstandings are equal to
or less than the Maximum Facility Amount then available.






	 	2.6	 	Termination Date No Bank shall be under any obligation to advance all or any
part of its Commitment after the Commitment Termination Date.
	 
	 	2.7	 	Several obligations The obligations of the Banks under this Agreement are
several. The failure of a Bank to perform its obligations under this Agreement shall
not affect the obligations of the Borrower to any Finance Party nor shall any Finance
Party be liable for the failure of another Bank to perform any of its obligations under
or in connection with this Agreement.
	 
	 	2.8	 	Application of Facility Without prejudice to the obligations of the Borrower
under this Agreement, no Finance Party shall be obliged to concern itself with the
application of the Facility by the Borrower.
	 
	 	2.9	 	Loan facility and control accounts The Agent will open and maintain such loan
facility account or such other control accounts as the Agent shall in its discretion
consider necessary or desirable in connection with the Facility.
	 
	 	2.10	 	LCs Subject to the terms of this Agreement, the Issuer agrees to issue LCs in
an amount in aggregate not exceeding the Maximum LC Amount to be applied for general
corporate purpose. The Issuer will only be obliged to issue an LC (i) if after the
issue of that LC, the LC Amount does not exceed the Maximum LC Amount (ii) it approves
the form of the proposed LC (which shall be at the Issuer’s absolute discretion) (iii)
the proposed LC has an expiry date of on or before the LC Availability Termination Date
and (iv) no Event of Default or Potential Event of Default has occurred or will then
have occurred or will result from the issuance of the LC in question.
	 
	 	2.11	 	LC Requests The Borrower may request an LC to be issued on any Business Day
prior to the LC Availability Termination Date by delivery to the Issuer of a




29









 






	 	 	 	duly completed Issue Request not more than ten (10) and not fewer than three (3)
Business Days before the proposed Issue Date. Each Issue Request once given shall
be irrevocable and shall constitute a warranty by the Borrower that:-






	 	2.11.1	 	all conditions precedent to the issue of the LC requested in that Issue
Request will have been satisfied on or before the Issue Date requested;
	 
	 	2.11.2	 	no Event of Default or Potential Event of Default has occurred or will then
have occurred; and
	 
	 	2.11.3	 	no Event of Default or Potential Event of Default will result from the
advance of the Drawing in question.






	 	2.12	 	LC Indemnity In consideration of the Issuer agreeing to issue the LCs (and for
other good and valuable consideration (the receipt and adequacy of which the Borrower
hereby acknowledges), the Borrower unconditionally and irrevocably agrees:






	 	2.12.1	 	to pay to the Issuer in the relevant currency upon the Issuer’s written
demand each and every amount which the Issuer is called upon to pay pursuant to
an LC;
	 
	 	2.12.2	 	at all times as a continuing security to keep the Issuer indemnified against
all demands, claims, payments, costs, liabilities, damages, losses, proceedings
and expenses incurred or suffered by the Issuer directly or indirectly by
reason of or in connection with an LC;
	 
	 	2.12.3	 	to supply the Issuer promptly with such evidence as the Issuer may reasonably
require at the termination or reduction of the Issuer’s liability under that
LC; and
	 
	 	2.12.4	 	to pay interest to the Issuer in the relevant currency upon the Issuer’s
written demand from time to time on each amount payable by the Borrower under
this Clause 2.12 at a date of the Issuer’s payment until the date of the
Borrower’s payment to the Issuer before or after any relevant judgment.






	 	2.13	 	Direction to pay under LCs The Borrower irrevocably directs the Issuer to make
such payments and comply with such demands or claims made on the Issuer




30









 






	 	 	 	in respect of or purporting to be in respect of an LC as the Issuer in its absolute
discretion thinks fit without any reference to or further authority or direction
from the Borrower, or any necessity to obtain the Borrower’s confirmation or
verification, and notwithstanding that the Borrower may have disputed the Issuer’s
liability to pay or comply or that all or any part of the Issuer’s obligations under
the LC may not legally exist or be legally binding on the Issuer. The Borrower
agrees that the Issuer may treat the Issuer’s obligations under an LC as payable on
first demand and that any such payment or compliance or purported compliance by the
Issuer shall as between the Issuer and the Borrower be conclusive evidence that the
Issuer was liable to make the payment or comply with the demand or claim.






	 	2.14	 	Transaction underlying LC The Borrower agrees that the Issuer shall be concerned
only with the demand or claim made on it in respect of an LC and, where a demand or
claim must be accompanied by any other document, with any such document, in each case as
presented to the Issuer, and not with any transaction to which the demand, claim or
document relates, or as to whether the payment demanded or the claim made was in fact
due.
	 
	 	2.15	 	Demand under LC The Issuer shall be entitled to rely without further enquiry on
any demand, claim, document or communication in respect of an LC believed by it acting
in good faith to be genuine and correct and to have been signed or otherwise executed or
made by the proper person. In particular, but without limitation, the Issuer acting in
good faith shall not be obliged to investigate the propriety of any such demand, claim,
document or communication or the authority or identity of the person producing,
claiming, signing or making such demand, claim, document or communication.
	 
	 	2.16	 	Currency for payment of LC The Issuer may, if called on to make a payment or to
comply with a demand or claim in respect of an LC, purchase in accordance with its usual
practice the amount of the relevant currency necessary to make that payment or to comply
with that demand or claim (unless the Issuer has already been put in funds by the
Borrower).
	 
	 	2.17	 	Substitute Vessels It is agreed and acknowledged that the Borrower may request
amendments to the list of Vessels set out at Schedule 2. Any such request shall be
considered by the Banks acting reasonably, and subject to:




31









 












	 	2.17.1	 	the Banks being satisfied that the replacement vessels are:






	 	(i)	 	offshore PSVs or AHTSs of the Borrower’s usual
standard and quality;
	 
	 	(ii)	 	registered in an acceptable registry and
classed with a Pre-Approved Classification Society;
	 
	 	(iii)	 	built no earlier than 1997 and being no more
than two (2) years older than the Vessel it is to replace;
	 
	 	(iv)	 	have a Valuation no less than eighty per cent
(80%) of the Valuation of the Vessel to be replaced;






	 	2.17.2	 	the Borrower, as owner of the replacement vessel, granting security over such
replacement vessel equivalent to the other Security Documents; and
	 
	 	2.17.3	 	the Agent receiving such conditions precedent (including but not limited to
corporate papers and legal opinions) as it may reasonably require,






the Banks shall consent to such substitutions and the definitions of “Vessels”.




	3	 	Conditions Precedent and Subsequent






	 	3.1	 	Conditions Precedent — First Drawing Before any Bank shall have any obligation
to advance the first Drawing under the Facility and/or the Issuer has any obligation to
issue an LC, the Borrower shall pay to the Agent the relevant fees referred to in
Clause 7 and deliver or cause to be delivered to or to the order of the Agent the
following documents and evidence:-






	 	3.1.1	 	Evidence of incorporation Such evidence as the Agent may
reasonably require that each Security Party was duly incorporated in its
country of incorporation and remains in existence and, where appropriate, in
good standing, with power to enter into, and perform its obligations under,
those of the Security Documents to which it is, or is intended to be, a party,
including (without limitation) a copy, certified by a director or an officer of
the Security Party in question as true, complete, accurate and




32









 






	 	 	 	unamended, of all documents establishing or limiting the constitution of
each Security Party.






	 	3.1.2	 	Corporate authorities A copy, certified by a director or any
duly authorised officer of the Security Party in question as true, complete,
accurate and neither amended nor revoked, of a resolution of the directors of
each Security Party (together, where appropriate, with signed waivers of notice
of any directors’ meetings) approving, and authorising or ratifying the
execution of, those of the Security Documents to which that Security Party is
or is intended to be a party and all matters incidental thereto.
	 
	 	3.1.3	 	Officer’s certificate A certificate (i) signed by a duly
authorised officer or representative of each of the Security Parties setting
out the names of the directors and officers of that Security Party and (ii)
issued by each Security Party’s company registry confirming due incorporation
and valid existence and (when such information is maintained by the registry)
the names of its directors and shareholders.
	 
	 	3.1.4	 	Power of attorney The power of attorney (notarially attested
and legalised, if necessary, for registration purposes) of each of the Security
Parties under which any documents are to be executed or transactions undertaken
by that Security Party.
	 
	 	3.1.5	 	The Security Documents The Security Documents, together with
all notices and other documents required by any of them, duly executed.
	 
	 	3.1.6	 	Drawdown Notice A duly completed Drawdown Notice.
	 
	 	3.1.7	 	Process agent A letter from Gulf Offshore N.S. Limited
accepting their appointment by each of the Security Parties as agent for
service of Proceedings pursuant to the Security Documents.
	 
	 	3.1.8	 	Legal opinions Confirmation satisfactory to the Agent that
all legal opinions required by the Agent and the Finance Parties will be given
substantially in the form required by the Agent and the Finance Parties.




33









 












	 	3.1.9	 	Consents A certificate from the Borrower that all (if any)
consents, licences, approvals and authorisations of, or registrations with or
declarations to, any governmental authority, bureau or agency which may be
required in connection with the Security Documents have been made or obtained
and remain in full force and effect.
	 
	 	3.1.10	 	Fee Letter The Fee Letter duly signed and payment of all fees that have
fallen due thereunder.
	 
	 	3.1.11	 	Accounts The audited consolidated accounts for the Borrower for the year
ended 2005.
	 
	 	3.1.12	 	Evidence of Borrower’s title Evidence that on the date of the Drawing (i)
the Vessels are registered under the flag stated in Schedule 2 in the ownership
of the Borrower and the relevant Mortgages will be capable of being immediately
registered against the Vessels with first priority.
	 
	 	3.1.13	 	Evidence of insurance Evidence that the Vessels are insured in the manner
required by the Security Documents and that letters of undertaking will be
issued in the manner required by the Security Documents, together with a
written opinion on the Insurances from an insurance adviser appointed by the
Agent.
	 
	 	3.1.14	 	Confirmation of class A Certificate of Confirmation of Class for hull and
machinery confirming that the Vessels are classed with the highest class
applicable to vessels of her type with a Pre-Approved Classification Society.
	 
	 	3.1.15	 	Vessel Documents Photocopies, certified as true, accurate and complete by an
authorised signatory of the Borrower, of:






	 	(i)	 	current SMC of each of the Vessels; and
	 
	 	(ii)	 	each ISM Company’s current DOC,






in each case together with all addenda, amendments or supplements.




	 	3.1.16	 	Valuations Valuation in respect of m.v. “SEA GUARDIAN”.




34









 












	 	3.2	 	Conditions Precedent — Subsequent Drawings Before any Bank shall have any
obligation to advance any subsequent Drawings under the Facility and/or the Issuer has
any obligation to issue any further LC, the Borrower shall deliver or cause to be
delivered to the order of the Agent:






	 	3.2.1	 	Officer’s certificate A certificate signed by a duly
authorised officer of each Security Party dated no later than five (5) Business
Days before the date of the Drawing confirming that none of the documents and
evidence delivered to the Agent pursuant to Clauses 3.1.1, 3.1.2, 3.1.3 and
3.1.4 has been amended, modified or revoked in any way since its delivery to
the Agent.
	 
	 	3.2.2	 	Drawdown Notice Drawdown Notice or an Issue Request (as
applicable).






	 	3.3	 	Conditions Subsequent The Borrower undertakes to deliver or to cause to be
delivered to the Agent on, or, in respect of Clause 3.3.1 and Clause 3.3.3 not later
than ten (10) days, or in respect of Clause 3.3.2 not later than fifteen (15) Business
Days, or such other period as the Agent may have consented to after, the earlier of the
first Advance Date and the First Issue Date, the following additional documents and
evidence:-






	 	3.3.1	 	Letters of undertaking Letters of undertaking in respect of
the Insurances as required by the Security Documents together with copies of
the relevant policies or cover notes or entry certificates duly endorsed with
the interest of the Agent.
	 
	 	3.3.2	 	Evidence of Borrower’s title Certificates of ownership and
encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent
official) of the relevant Vessel’s flag state confirming that (a) the Vessels
are permanently registered under that flag in the ownership of the Borrower (b)
the Mortgages have been registered with first priority against the Vessels and
(c) there are no further Encumbrances registered against the Vessels.
	 
	 	3.3.3	 	Evidence of UCC filing Evidence that financing statement
pursuant to the UCC in respect of the Assignments entered into between the
Borrower and the Agent have been filed.




35









 












	 	3.4	 	No waiver If the Banks in their sole discretion agree to advance any part of
the Facility to the Borrower or if the Issuer agrees in its sole discretion to issue an
LC before all of the documents and evidence required by Clause 3.1 or Clause 3.2 (as
the case may be) have been delivered to or to the order of the Agent, the Borrower
undertakes to deliver all outstanding documents and evidence to or to the order of the
Agent no later than the date agreed by the Agent and the Borrower and the advance of
any part of the Facility or the issue of an LC shall not be taken as a waiver of the
Agent’s right to require production of all the documents and evidence required by
Clause 3.1 or Clause 3.2 (as the case may be).
	 
	 	3.5	 	Form and content All documents and evidence delivered to the Agent pursuant to
this Clause shall:-






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






	4	 	Representations and Warranties
	 
	 	 	The Borrower represents and warrants to each of the Finance Parties at the Execution Date
and (by reference to the facts and circumstances then pertaining) at the date of each
Drawdown Notice, at each Advance Date, at each Issue Date and at each Interest Payment Date
as follows (except that the representation and warranty contained at Clause 4.17 shall only
be made on the first Advance Date and that the representation and warranty contained at
Clause 4.9 shall only be made on the Execution Date) :-






	 	4.1	 	Incorporation and capacity Each of the Security Parties is a body corporate
duly constituted, organised and validly existing and (where applicable) in good
standing under the law of its country of incorporation, in each case with perpetual
corporate existence and the power to sue and be sued, to own its assets and to carry on
its business, and all of the corporate shareholders (if any) of each Security Party are
duly constituted and existing under the laws of their countries of incorporation with
perpetual corporate existence and the power to sue and be




36









 






	 	 	 	sued, to own their assets and to carry on their business and are acting on their own
account.






	 	4.2	 	Solvency None of the Security Parties is insolvent or in liquidation or
administration or subject to any other insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous officer has
been appointed in respect of any of the Security Parties. For this purpose a Security
Party will be deemed insolvent if it is unable to pay its debts within the meaning of
S.123 of the Insolvency Act 1986.
	 
	 	4.3	 	Binding obligations The Security Documents when duly executed and delivered
will constitute the legal, valid and binding obligations of the Security Parties
enforceable in accordance with their respective terms subject to applicable laws
regarding creditors’ rights in general.
	 
	 	4.4	 	Satisfaction of conditions All acts, conditions and things required to be done
and satisfied and to have happened prior to the execution and delivery of the Security
Documents in order to constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their respective terms have been
done, satisfied and have happened in compliance with all applicable laws.
	 
	 	4.5	 	Registrations and consents All (if any) consents, licences, approvals and
authorisations of, or registrations with or declarations to, any governmental
authority, bureau or agency which may be required in connection with the execution,
delivery, performance, validity or enforceability of the Security Documents have been
obtained or made and remain in full force and effect and the Borrower is not aware of
any event or circumstance which could reasonably be expected adversely to affect the
right of any of the Security Parties to hold and/or obtain renewal of any such
consents, licences, approvals or authorisations.
	 
	 	4.6	 	Disclosure of material facts The Borrower is not aware of any material facts or
circumstances which have not been disclosed to the Agent and which might, if disclosed,
have reasonably been expected to adversely affect the decision of a person considering
whether or not to make facilities of the nature contemplated by this Agreement
available to the Borrower.




37









 












	 	4.7	 	No material litigation There is no action, suit, arbitration or administrative
proceeding nor any contemplated action, suit, arbitration or administrative proceeding
pending or to its knowledge about to be pursued before any court, tribunal or
governmental or other authority which is not covered by adequate insurance which would,
or would be likely to, have a Material Adverse Effect.
	 
	 	4.8	 	No breach of law or contract The execution, delivery and performance of the
Security Documents will not contravene any contractual restriction or any law binding
on any of the Security Parties or on any shareholder (whether legal or beneficial) of
any of the Security Parties, or the constitutional documents of any of the Security
Parties, nor result in the creation of, nor oblige any of the Security Parties to
create, any Encumbrance over all or any of its assets, with the exception of the
Encumbrances created by or pursuant to the Security Documents and Permitted Liens.
	 
	 	4.9	 	No deductions To the best of its knowledge belief and without undue enquiry,
none of the Security Parties is required to make any deduction or withholding from any
payment which it may be obliged to make to any of the Finance Parties under or pursuant
to the Security Documents.
	 
	 	4.10	 	Use of Facility The Facility will be used for the purpose specified in the
recital.
	 
	 	4.11	 	Material Adverse Change There has been no change in the business, assets,
operations or condition (financial or otherwise) of any of the Security Parties or in
the facts and information regarding such entities as represented to date which
constitutes a Material Adverse Effect.
	 
	 	4.12	 	No default None of the Security Parties is in default of its obligations under
any other financing documents to which it is a party to an extent or in a manner which
might have a Material Adverse Effect on the business or condition (financial or
otherwise) of that Security Party and no Event of Default is continuing or might
reasonably be expected to result from the advance of any Drawing or the issue of an LC.
	 
	 	4.13	 	Pari passu ranking The payment obligations of each of the Security Parties
under the Security Documents to which it is a party rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors, except for




38









 






	 	 	 	obligations mandatorily preferred by law applying to companies incorporated in the
relevant Security Party’s country of incorporation or otherwise applicable to that
Security Party.






	 	4.14	 	No Immunity In any proceedings taken in any of the Security Parties’
respective jurisdictions of incorporation in relation to any of the Security Documents,
none of the Security Parties will be entitled to claim for itself or any of its assets
immunity from suit, execution, attachment or other legal process.
	 
	 	4.15	 	Governing Law and Judgments In any proceedings taken in any of the Security
Parties’ jurisdiction of incorporation or organisation in relation to any of the
Security Documents in which there is an express choice of the law, the submission to
that jurisdiction of a particular country as the governing law thereof, that choice of
law and any judgment or (if applicable) arbitral award obtained in that country will be
recognised and enforced.
	 
	 	4.16	 	Validity and Admissibility in Evidence As at the date hereof, all acts,
conditions and things required to be done, fulfilled and performed in order (a) to
enable each of the Security Parties lawfully to enter into, exercise its rights under
and perform and comply with the obligations expressed to be assumed by it in the
Security Documents, (b) to ensure that the obligations expressed to be assumed by each
of the Security Parties in the Security Documents are legal, valid and binding and (c)
to make the Security Documents admissible in evidence in the jurisdictions of
incorporation or organization of each of the Security Parties, have been done,
fulfilled and performed.
	 
	 	4.17	 	No Filing or Stamp Taxes Under the laws of the Security Parties’ respective
jurisdictions of incorporation or organisation in force at the date hereof, it is not
necessary that any of the Security Documents be filed, recorded or enrolled with any
court or other authority in its jurisdiction of incorporation or organisation (other
than the Registrar of Companies for England and Wales, the maritime registry in Panama,
or UCC filings in respect of the Assignments entered into between the Borrower and the
Agent to the extent applicable) or that any stamp, registration or similar tax be paid
on or in relation to any of the Security Documents.




39









 












	 	4.18	 	Accounts The first set of Accounts and all other annual financial statements
relating to the Group required to be delivered, were prepared in accordance with GAAP,
give (in conjunction with the notes thereto) a true and fair view of (in the case of
annual financial statements) or fairly represent (in the case of quarterly accounts)
the financial condition of the Group at the date as of which they were prepared and the
results of the Group’s operations during the financial period then ended.
	 
	 	4.19	 	Ownership and Security
	 
	 	 	 	Each of the Security Parties is the legal and beneficial owner of all assets and
other property which it purports to charge, mortgage, pledge, assign or otherwise
secure pursuant to each Security Document and those Security Documents to which it
is a party create and give rise to valid and effective Security having the ranking
expressed in those Security Documents.
	 
	 	4.20	 	Money Laundering Any amount borrowed hereunder, and the performance of the
obligations of the Security Parties under the Security Documents, will be for the
account of members of the Group and will not involve any breach by any of them of any
law or regulatory measure relating to “money laundering” as defined in Article 1 of the
Directive (91/308/EEC) of the Council of the European Communities.
	 
	 	4.21	 	ERISA Event, Margin Stock and “Investment Company”






	 	4.21.1	 	No ERISA Event has occurred or is reasonably expected to occur in relation to
the Borrower that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, would result in a Material
Adverse Effect; the present value of all accumulated benefit obligations under
each Employee Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of its most
recent financial statements, reflecting such amounts, exceed the fair market
value of the assets of such Employee Plan by an amount that would have a
Material Adverse Effect; and the present value of all accumulated benefit
obligations of all underfunded Employee Plans (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not,




40









 






	 	 	 	as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of all such underfunded
Employee Plans by an amount that would have a Material Adverse Effect;






	 	4.21.2	 	The Borrower is not engaged nor will it engage principally, or as one of its
important activities, in the business of owning or extending credit for the
purpose of “buying” or “carrying” any Margin Stock;
	 
	 	4.21.3	 	None of the proceeds of the Facility nor a LC will be used, directly or
indirectly, for the purpose of buying or carrying any Margin Stock, for the
purpose of reducing or retiring any Financial Indebtedness that was originally
incurred to “buy” or “carry” any Margin Stock or for any other purpose which
might cause the Facility or a LC to be considered a “purpose credit” within the
meaning of Regulation U or Regulation X; and
	 
	 	4.21.4	 	The Borrower is not an “investment company” as such term is defined in the
Investment Company Act of 1940 of the United States (the 1940 Act) or otherwise
subject to regulation under the 1940 Act or subject to regulation under the
Public Utility Holding Company Act of 1935 of the United States, the Federal
Power Act of 1935 of the United States or the 1940 Act or any United States
federal or state statute or regulation restricting or limiting its ability to
incur indebtedness.






	5	 	Repayment, Prepayment and Currency Option






	 	5.1	 	Repayment Each Drawing shall be repaid by the Borrower to the Agent on behalf
of the Banks on the last day of its Interest Period unless the Borrower selects a
further Interest Period for that Drawing in accordance with Clause 6, provided that the
Borrower shall not be permitted to select such further Interest Period if an Event of
Default or Potential Event of Default has occurred and shall then be obliged to repay
such Drawing on the last day of its then current Interest Period. The Borrower shall
on the Termination Date repay to the Agent as agent for the Banks all Facility
Outstandings.
	 
	 	5.2	 	Prepayment The Borrower may prepay the Facility Outstandings in whole or in
part in integral multiples of one million Dollars ($1,000,000) (or as otherwise




41









 






	 	 	 	may be agreed by the Agent), each such prepayment to be of a minimum amount of two
million five hundred thousand Dollars ($2,500,000), provided that it has first given
to the Agent not fewer than five (5) days prior written notice expiring on a
Business Day of its intention to do so. Any notice pursuant to this Clause 5.2 once
given shall be irrevocable and shall oblige the Borrower to make the prepayment
referred to in the notice on the Business Day specified in the notice, together with
all interest accrued on the amount prepaid up to and including that Business Day.






	 	5.3	 	Mandatory Prepayment If at any time the Facility Outstandings shall exceed the
Maximum Facility Amount the Borrower shall immediately prepay to the Agent on behalf of
the Banks such amounts as will ensure that the Facility Outstandings do not exceed the
Maximum Facility Amount and shall pay to the Banks all interest accrued on the amount
prepaid up to and including the date on which such prepayment occurred.
	 
	 	5.4	 	Prepayment indemnity If the Borrower shall make a prepayment on a Business Day
other than the last day of an Interest Period, it shall pay to the Agent on behalf of
the Banks such amount which is necessary to compensate the Banks for any Break Costs
incurred by the Agent or any of the Banks as a result of the prepayment in question.
	 
	 	5.5	 	Application of prepayments Any prepayment by the Borrower in an amount less
than the Indebtedness shall be applied in satisfaction or reduction first of any costs
and other expenses outstanding; secondly of all interest accrued with respect to the
outstanding Drawings; and thirdly of the outstanding Drawings.
	 
	 	5.6	 	Reborrowing of prepayments Any amount prepaid pursuant to this Agreement,
which for the avoidance of doubt shall exclude any amount prepaid pursuant to Clause
2.4.2, Clause 2.4.3 or Clause 2.4.4, may be reborrowed in accordance with Clause 2.2.
	 
	 	5.7	 	Selection of currency The Borrower may from time to time select in a written
notice to the Agent given not later than 11.00am on the Quotation Day for the relevant
Interest Period that the Facility shall be denominated for the next Interest Period
(which may include the first Interest Period) in an Optional Currency.




42









 












	 	5.8	 	Unavailability of a currency If:






	 	5.8.1	 	a Bank notifies the Agent that the Optional Currency requested
is not readily available to it in the amount required; or
	 
	 	5.8.2	 	a Bank notifies the Agent that to make an advance in that
Optional Currency would contravene a law or regulation applicable to it,






the Agent will promptly give notice to the Borrower to that effect. In this event
any Bank that gives notice pursuant to this Clause 5.8 will be required to
participate in the Facility during the relevant Interest Period in the Base Currency
(in an amount equal to that Bank’s proportion of the Base Currency Amount) and its
participation will be treated as a separate Facility denominated in the Base
Currency during that Interest Period.




	 	5.9	 	Change of currency If the Facility is to be denominated in different
currencies during two successive Interest Periods:






	 	5.9.1	 	the following provisions shall apply:






	 	(a)	 	if the currency for the second Interest Period
is an Optional Currency, the amount of the Facility in that Optional
Currency will be calculated by the Agent as the amount of that Optional
Currency equal to the Base Currency Amount of the Facility at the
Agent’s Spot Rate of Exchange two (2) Business Days before the first
day of the second Interest Period;
	 
	 	(b)	 	if the currency for the second Interest Period
is the Base Currency, the amount of the Facility will be equal to the
Base Currency Amount;
	 
	 	(c)	 	the Borrower shall repay the Facility on the
last day of the first Interest Period in the currency in which it was
denominated for that Interest Period; and
	 
	 	(d)	 	the Banks shall re-advance the Facility in the
new currency in accordance with Clause 5.10;






	 	5.9.2	 	the Agent shall:




43









 












	 	(a)	 	apply the amount to be readvanced by the Banks
under Clause 5.9.1(d) (or so much of that amount as is necessary) in or
towards the purchase of an amount in the currency in which the Facility
is outstanding for the first Interest Period; and
	 
	 	(b)	 	use the amount it purchases in or towards
satisfaction of the Borrower’s obligations under Clause 5.9.1(c);






	 	5.9.3	 	if the amount purchased by the Agent under Clause 5.9.2(a) is
less than the amount required to be repaid by the Borrower, the Agent shall
promptly notify the Borrower and the Borrower shall, on the last day of the
first Interest Period, pay an amount to the Agent (for the account of the
Banks) (in the currency of the Facility for the first Interest Period) equal to
the difference;
	 
	 	5.9.4	 	if any part of the amount to be readvanced by the Banks under
Clause 5.9.1(d) is not needed to purchase the amount required to be repaid by
the Borrower, the Agent shall promptly notify the Borrower and pay the Borrower
on the last day of the first Interest Period that part of that amount (in the
new currency).






	 	5.10	 	Same Optional Currency during successive Interest Periods If the Facility is
to be denominated in the same Optional Currency during two successive Interest Periods,
the Agent shall calculate the amount of the Facility in the Optional Currency for the
second of those Interest Periods (by calculating the amount of Optional Currency equal
to the Base Currency Amount of the Facility at the Agent’s Spot Rate of Exchange two
(2) Business Days before the first day of the second Interest Period) and (subject to
Clause 5.10.2):






	 	(i)	 	if the amount calculated is less than the
existing amount of the Facility in the Optional Currency during the
first Interest Period, promptly notify the Borrower and the Borrower
shall pay to the Agent (for the account of the Banks), on the last day
of the first Interest Period, an amount equal to the difference; or
	 
	 	(ii)	 	if the amount calculated is more than the
existing amount of the Facility in the Optional Currency during the
first Interest Period, if




44









 






	 	 	 	no Event of Default is continuing, each Bank shall, on the last day
of the first Interest Period, pay to the Borrower through the Agent
its participation in an amount equal to the difference;






	 	5.11	 	Agent’s calculations All calculations made by the Agent under this Clause 5
will take into account any repayment or prepayment of the Facility to be made on the
last day of the first Interest Period.






	6	 	Interest






	 	6.1	 	Interest Periods The period during which any Drawing shall be outstanding
pursuant to this Agreement shall be divided into consecutive Interest Periods of one,
three or six months’ duration, as selected by the Borrower by written notice to the
Agent not later than 3:00 p.m. on the fourth Business Day before the beginning of the
Interest Period in question, or such other duration as may be agreed by the Banks in
their discretion. No more than three one (1) month Interest Periods may be selected by
the Borrower in each twelve (12) month period during the Facility Period.
	 
	 	6.2	 	Beginning and end of Interest Periods The first Interest Period in respect of
each Drawing shall begin on the Advance Date of that Drawing and shall end on the last
day of the Interest Period selected in accordance with Clause 6.1. Any subsequent
Interest Period selected in respect of each Drawing shall commence on the day following
the last day of its previous Interest Period and shall end on the last day of its
current Interest Period selected in accordance with Clause 6.1. However, in respect of
any Drawings outstanding on the Termination Date, the Interest Period applicable to
such Drawings shall end on the Termination Date.
	 
	 	6.3	 	Interest rate During each Interest Period, interest shall accrue on each
Drawing at the rate determined by the Agent to be the aggregate of (a) the Margin (b)
LIBOR (or, if the Facility is denominated in Euro, EURIBOR, or, if the Facility is
denominated in NOK, NIBOR) and (c), if applicable, the Mandatory Cost determined at or
about 11.00 a.m. (London time) on the second Business Day prior to the beginning of the
Interest Period relating to that Drawing.
	 
	 	6.4	 	Accrual and payment of interest During the Facility Period, interest shall
accrue from day to day, shall be calculated on the basis of a 360 day year (or, for




45









 






	 	 	 	any period when the Facility is denominated in Sterling on the basis of a 365 day
year) and the actual number of days elapsed (or, in any circumstance where market
practice differs, in accordance with the prevailing market practice) and shall be
paid by the Borrower to the Agent on behalf of the Banks on the last day of each
Interest Period and additionally, during any Interest Period exceeding six months,
on the last day of each successive six month period after the beginning of that
Interest Period.






	 	6.5	 	Ending of Interest Periods If any Interest Period would end on a day which is
not a Business Day, that Interest Period shall end on the next succeeding Business Day
(unless the next succeeding Business Day falls in the next calendar month, in which
event the Interest Period in question shall end on the immediately preceding Business
Day).
	 
	 	6.6	 	Default Rate If an Event of Default shall occur, the whole of the Indebtedness
shall, from the date of the occurrence of the Event of Default, bear interest up to the
date of actual payment (both before and after judgment) at the Default Rate, compounded
at such intervals as the Agent shall in its reasonable discretion determine, which
interest shall be payable from time to time by the Borrower to the Agent on behalf of
the Banks on demand.
	 
	 	6.7	 	Absence of quotations If LIBOR or, if applicable, EURIBOR or NIBOR is to be
determined by reference to the Reference Banks but a Reference Bank does not supply a
quotation by 11.00 am (London time) in respect of LIBOR, 11.00 am (Brussels time) in
respect of EURIBOR or 12.00 pm (Oslo time) in respect NIBOR, the applicable LIBOR,
EURIBOR or NIBOR shall be determined on the basis of the quotations obtained from such
other banks as may be appointed by the Agent in consultation with the Borrower.
	 
	 	6.8	 	Determinations conclusive Each determination of an interest rate made by the
Agent in accordance with Clause 6 shall (save in the case of manifest error or on any
question of law) be final and conclusive.






	7	 	Fees






	 	7.1	 	The Borrower shall pay to the Agent for distribution to the Banks Commitment
Commission at the rate of forty per centum (40%) of the applicable Margin on




46









 






	 	 	 	any undrawn and uncancelled part of the Facility. The Commitment Commission will
accrue from day to day on the basis of a 360 day year and the actual number of days
elapsed and shall be paid quarterly in arrears from 15 March 2006 until the
Commitment Termination Date with a pro rata payment being due and payable on the
Commitment Termination Date.






	 	7.2	 	The Borrower shall pay to the Agent the fees detailed in the Fee Letter.
	 
	 	7.3	 	The Borrower shall pay to the Issuer an LC fee calculated at the rate of the
Margin on the LC Amount from time to time. The accrued LC fee is payable quarterly in
arrears and on the basis of a 360 day year and the actual number of days elapsed.
	 
	 	7.4	 	All fees and commissions hereunder or under the Fee Letter shall be calculated
by reference to, and payable in, the Base Currency.






	8	 	Security Documents






	 	8.1	 	As security for the repayment of the Indebtedness, the Borrower will execute
and deliver to the Agent or cause to be executed and delivered to the Agent, on or
before the first Advance Date, the following Security Documents in such forms and
containing such terms and conditions as the Agent requires:-






	 	8.1.1	 	the Mortgages the first preferred naval mortgages over each
of the Vessels executed by the Borrower.
	 
	 	8.1.2	 	the Assignments the assignments of the Insurances and
Requisition Compensation in respect of each of the Vessels executed by the
Borrower.






	9	 	Agency and Trust






	 	9.1	 	Appointment Each of the Finance Parties appoints the Agent its agent for the
purpose of administering the Facility and the Security Documents and authorises the
Agent and its directors, officers, employees and agents acting on the instructions from
time to time of the Majority Banks, and subject to Clauses 9.4 and 9.19, to execute the
Security Documents on its behalf and to exercise all rights, powers, discretions and
remedies vested in the Banks under or pursuant to the Security Documents, together with
all powers reasonably incidental to them.






47











 






	 	9.2	 	Authority Each of the Finance Parties irrevocably authorises the Agent, acting
on the instructions from time to time of the Majority Banks (save where the terms of
any Security Document expressly require the instructions of all of the Banks):-






	 	9.2.1	 	to give or withhold any consents or approvals; and
	 
	 	9.2.2	 	to exercise, or refrain from exercising, any discretions; and
	 
	 	9.2.3	 	to collect, receive, release or pay any money;






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






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






	 	9.3.1	 	the Agent (and any attorney, agent or delegate of the Agent)
may indemnify itself or himself out of the Trust Property against all
liabilities, costs, fees, damages, charges, losses and expenses sustained or
incurred by it or him in relation to the taking or holding of any of the Trust
Property or in connection with the exercise or purported exercise of the
rights, trusts, powers and discretions vested in the Agent or any other such
person by or pursuant to the Security Documents or in respect of anything else
done or omitted to be done in any way relating




48









 












	 	 	 	to the Security Documents other than as a result of its gross negligence
or wilful misconduct; and
	 
	 	9.3.2	 	the Finance Parties acknowledge that the Agent shall be under
no obligation to insure any property nor to require any other person to insure
any property and shall not be responsible for any loss which may be suffered by
any person as a result of the lack or insufficiency of any insurance; and
	 
	 	9.3.3	 	the Agent and the Finance Parties agree that the perpetuity
period applicable to the trusts declared by this Agreement shall be the period
of eighty years from the Execution Date.






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






	 	9.4.1	 	release or vary any security given for the Borrower’s
obligations under this Agreement; nor
	 
	 	9.4.2	 	agree to waive the payment of any sum of money payable by any
of the Security Parties under the Security Documents; nor
	 
	 	9.4.3	 	change the meaning of the expression “Majority Banks”; nor
	 
	 	9.4.4	 	exercise, or refrain from exercising, any discretion, or give
or withhold any consent, the exercise or giving of which is, by the terms of
this Agreement, expressly reserved to the Banks; nor
	 
	 	9.4.5	 	extend the due date for the payment of any sum of money
payable by any of the Security Parties under the Security Documents; nor
	 
	 	9.4.6	 	take or refrain from taking any step if the effect of such
action or inaction may lead to the increase of the obligations of a Bank under
any of the Security Documents; nor
	 
	 	9.4.7	 	agree to change the currency in which any sum is payable under
the Security Documents; nor
	 
	 	9.4.8	 	agree to amend this Clause 9.4; nor




49









 












	 	9.4.9	 	agree to reduce the rate under the definitions of “Margin”
“Commitment Commission” or “Default Rate”.






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






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






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






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




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






	 	9.8	 	The Agent’s rights The Agent may:-






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




51









 












	 	9.8.6	 	refrain from exercising any right, power, discretion or remedy
unless and until instructed to exercise that right, power, discretion or remedy
and as to the manner of its exercise by the Banks (or, where applicable, by the
Majority Banks) and unless and until the Agent has received from the Banks any
payment which the Agent may require on account of, or any security which the
Agent may require for, any costs, claims, expenses (including legal and other
professional fees) and liabilities which it considers it may incur or sustain
in complying with those instructions.






	 	9.9	 	The Agent’s duties The Agent shall:-






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






	 	9.10	 	No deemed knowledge The Agent shall not be deemed to have actual knowledge of
the falsehood or incompleteness of any representation or warranty made or deemed
repeated by any of the Security Parties or actual knowledge of the occurrence of any
Event of Default or Potential Event of Default unless a Bank or any of the Security
Parties shall have given written notice thereof to the Agent.
	 
	 	9.11	 	Other business The Agent may, without any liability to account to the Banks,
generally engage in any kind of banking or trust business with any of the Security
Parties or any of their respective Subsidiaries or associated companies or with a Bank
as if it were not the Agent.
	 
	 	9.12	 	Agent’s Indemnity The Banks shall, promptly on the Agent’s request, reimburse
the Agent in their respective Proportionate Shares, for, and keep the Agent fully
indemnified in respect of:-






	 	9.12.1	 	all amounts payable by the Borrower to the Agent pursuant to Clause 17 (other
than under Clauses 17.3 and 17.4) to the extent that those amounts are not paid
by the Borrower;




52









 












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






	 	9.13	 	Employment of agents In performing its duties and exercising its rights,
powers, discretions and remedies under or pursuant to the Security Documents, the Agent
shall be entitled to employ and pay agents to do anything which the Agent is empowered
to do under or pursuant to the Security Documents (including the receipt of money and
documents and the payment of money) and to act or refrain from taking action in
reliance on the opinion of, or advice or information obtained from, any lawyer, banker,
broker, accountant, valuer or any other person believed by the Agent in good faith to
be competent to give such opinion, advice or information.
	 
	 	9.14	 	Distribution of payments The Agent shall pay promptly to the order of (i) each
of the Banks that Bank’s Proportionate Share and (ii) the Issuer any amount to which
the Issuer is entitled of every sum of money received by the Agent pursuant to the
Security Documents (with the exception of any amounts payable pursuant to Clause 7 and
any amounts which, by the terms of the Security Documents, are paid to the Agent for
the account of the Agent alone or specifically for the account of one or more of the
Finance Parties) and until so paid such amount shall be held by the Agent on trust
absolutely for that Finance Party.
	 
	 	9.15	 	Reimbursement The Agent shall have no liability to pay any sum to another
Party until it has itself received payment of that sum. If, however, the Agent does
pay any sum to a Party on account of any amount prospectively due to it pursuant to
Clause 9.14 or otherwise before it has itself received payment of that amount, and the
Agent does not in fact receive payment within five Business Days after the date on
which that payment was required to be made by the terms of the Security Documents, the
recipient will, on demand by the Agent, refund to the




53









 












	 	 	 	Agent an amount equal to the amount received by it, together with an amount
sufficient to reimburse the Agent for the cost of money for funding the amount in
question during the period beginning on the date on which that amount was required
to be paid by the terms of the Security Documents and ending on the date on which
the Agent receives reimbursement.
	 
	 	9.16	 	Redistribution of payments Unless otherwise agreed between the Finance
Parties, if at any time a Finance Party receives or recovers by way of set-off, the
exercise of any lien or otherwise other than from any assignee or transferee of or
sub-participant in that Bank’s Commitment, an amount greater than either (i) that
Bank’s Proportionate Share of any sum due from any of the Security Parties under the
Security Documents or (ii) an amount greater than the amount outstanding and due to the
Issuer under an LC (the amount of the excess being referred to in this Clause as the
“Excess Amount”) then:-






	 	9.16.1	 	that Finance Party shall promptly notify the Agent (which shall promptly
notify each other Finance Party);
	 
	 	9.16.2	 	that Finance Party shall pay to the Agent an amount equal to the Excess
Amount within ten days of its receipt or recovery of the Excess Amount; and
	 
	 	9.16.3	 	the Agent shall treat that payment as if it were a payment by the Security
Party in question on account of the sum owed to the Finance Parties as
aforesaid and shall account to the Finance Parties in respect of the Excess
Amount in accordance with the provisions of this Clause.






	 	 	 	However, if a Finance Party has commenced any Proceedings to recover sums owing to
it under the Security Documents and, as a result of, or in connection with, those
Proceedings has received an Excess Amount, the Agent shall not distribute any of
that Excess Amount to any other Finance Party which had been notified of the
Proceedings and had the legal right to, but did not, join those Proceedings or
commence and diligently prosecute separate Proceedings to enforce its rights in the
same or another court.
	 
	 	9.17	 	Rescission of Excess Amount If all or any part of any Excess Amount is
rescinded or must otherwise be restored to any of the Security Parties or to any




54









 






	 	 	 	other third party, the Finance Parties which have received any part of that Excess
Amount by way of distribution from the Agent pursuant to Clause 9.16 shall repay to
the Agent for the account of the Finance Party which originally received or
recovered the Excess Amount, the amount which shall be necessary to ensure that (i)
all of the Banks share rateably in accordance with their Proportionate Shares and
(ii) the Issuer in the amount of the receipt or payment retained, together with
interest on that amount at a rate equivalent to that (if any) paid by the Finance
Party receiving or recovering the Excess Amount to the person to whom that Finance
Party is liable to make payment in respect of such amount, and Clause 9.16.3 shall
apply only to the retained amount.






	 	9.18	 	Proceedings Each of the Finance Parties shall notify one another of the
proposed commencement of any Proceedings under any of the Security Documents prior to
their commencement. No such Proceedings may be commenced without the prior written
consent of the Majority Banks.
	 
	 	9.19	 	Instructions Where the Agent is authorised or directed to act or refrain from
acting in accordance with the instructions of the Banks, or of the Majority Banks where
applicable, each of the Banks shall provide the Agent with instructions within five (5)
Business Days of the Agent’s written request or such shorter period as the Agent may
reasonably specify. If a Bank does not provide the Agent with instructions within that
period, (i) that Bank shall be bound by the decision of the Agent, (ii) that Bank shall
have no vote for the purposes of this Clause and (iii) the combined Proportionate
Shares of the other Banks who provided such instructions shall be deemed to contribute
100%. Nothing in this Clause shall limit the right of the Agent to take, or refrain
from taking, any action without obtaining the instructions of the Banks if the Agent in
its discretion considers it necessary or appropriate to take, or refrain from taking,
such action in order to preserve the rights of the Banks under or in connection with
the Security Documents. In that event, the Agent will notify the Banks of the action
taken by it as soon as reasonably practicable, and the Banks agree to ratify any action
taken by the Agent pursuant to this Clause.
	 
	 	9.20	 	Communications Any Communication under this Clause shall be given, delivered,
made or served, in the case of the Agent (in its capacity as Agent, Issuer, or as one
of the Banks), and in the case of the other Finance Parties, at the




55









 












	 	 	 	address indicated in Schedule 1 or such other addresses as shall be duly notified in
writing to the Agent on behalf of the Banks.
	 
	 	9.21	 	Payments All amounts payable to a Finance Party under this Clause shall be
paid to such account at such bank as that Finance Party may from time to time direct in
writing to the Agent.
	 
	 	9.22	 	Retirement Subject to a successor being appointed in accordance with this
Clause, the Agent may retire as agent and/or security trustee at any time without
assigning any reason by giving to the Borrower and the other Finance Parties notice of
its intention to do so, in which event the following shall apply:-






	 	9.22.1	 	with the consent of the Borrower, not to be unreasonably withheld, the other
Finance Parties may within thirty days after the date of the Agent’s notice
appoint a successor to act as agent and/or security trustee or, if they fail to
do so with the consent of the Borrower, not to be unreasonably withheld, the
Agent may appoint any other bank or financial institution as its successor;
	 
	 	9.22.2	 	the resignation of the Agent shall take effect simultaneously with the
appointment of its successor on written notice of that appointment being given
to the Borrower and the other Finance Parties;
	 
	 	9.22.3	 	the Agent shall thereupon be discharged from all further obligations as agent
and/or security trustee but shall remain entitled to the benefit of the
provisions of this Clause;
	 
	 	9.22.4	 	the Agent’s successor and each of the other parties to this Agreement shall
have the same rights and obligations amongst themselves as they would have had
if that successor had been a party to this Agreement.






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




56









 












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






	 	9.24.1	 	all amounts payable by the Borrower to the Issuer pursuant to Clause 2.12 to
the extent that those amounts are not paid by the Borrower;
	 
	 	9.24.2	 	all liabilities, damages, costs and claims sustained or incurred by the
Issuer in connection with any LC, or the performance of its duties and
obligations, or the exercise of its rights, powers, discretions or remedies
under or pursuant to any LC; or in connection with any action taken or omitted
by the Issuer under or pursuant to any LC, unless in any case those
liabilities, damages, costs or claims arise solely from the Issuer’s wilful
misconduct or gross negligence.






	 	9.25	 	The Agent as a Bank The expression “the Banks” when used in the Security
Documents includes the Agent in its capacity as one of the Banks. The Agent shall be
entitled to exercise its rights, powers, discretions and remedies under or pursuant to
the Security Documents in its capacity as one of the Banks in the same manner as any
other Bank and as if it were not also the Agent.
	 
	 	9.26	 	The Agent as security trustee Unless the context otherwise requires, the
expression “the Agent” when used in the Security Documents includes the Agent acting in
its capacities both as agent and security trustee.






	10	 	Covenants
	 
	 	 	The Borrower covenants with the Finance Parties in the following terms.






	 	10.1	 	Negative covenants
	 
	 	 	 	The Borrower will not:-






	 	10.1.1	 	no third party rights without the Majority Banks’ prior written consent,
create or permit to arise or continue any Encumbrance on or over all or any
part of the Vessels or their respective Insurances except for Permitted Liens;
nor




57









 












	 	10.1.2	 	no other business materially change the nature of their business from that
of acting as a holding company as carried on as at the Execution Date and shall
procure that there is no material change in the nature of the business of the
Group as a whole from that advised to the Agent of the date of this Agreement;
nor
	 
	 	10.1.3	 	merger or amalgamation without the prior written consent of the Majority
Banks, permit any merger or amalgamation; nor
	 
	 	10.1.4	 	no change in management permit anyone other than the Manager to be appointed
as commercial or technical managers of the Vessels, nor permit any material
variation of the arrangements for the commercial or technical management of the
Vessels, nor permit the Manager to sub-contract or delegate a material part of
the commercial or technical management of any Vessel to any third party.






	 	10.2	 	Positive covenants






	 	10.2.1	 	Financial statements The Borrower shall supply to the Agent






	 	(a)	 	as soon as the same become available, but in
any event within one hundred and fifty (150) days after the end of each
of its financial years, its audited consolidated financial statements
for that financial year;
	 
	 	(b)	 	as soon as the same become available, but in
any event within sixty (60) days of the end of its second quarter in
each of its financial years, unaudited consolidated financial
statements for that half year;
	 
	 	(c)	 	as soon as they become available, but in any
event within one hundred and fifty (150) days after the end of each of
its financial years, consolidated financial forecasts for the following
two financial years.






	 	10.2.2	 	Requirements as to financial statements Each set of financial statements
delivered by the Borrower under Clause 10.2.1:




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	 	(a)	 	shall be certified by an officer of the
Borrower to the best of its knowledge and belief as fairly representing
its financial condition as at the date as at which those financial
statements were drawn up; and
	 
	 	(b)	 	shall be prepared using GAAP, accounting
practices and financial reference periods consistently applied unless,
in relation to any set of financial statements, the Borrower notifies
the Agent that there has been a change in GAAP, the accounting
practices or reference periods and the Borrower’s auditors deliver to
the Agent:






	 	(i)	 	a description of any change
necessary for those financial statements to reflect the GAAP,
accounting practices and reference periods upon which the
previous financial statements were prepared; and
	 
	 	(ii)	 	sufficient information, in form
and substance as may be reasonably required by the Agent, to
enable the Agent to make an accurate comparison between the
financial position indicated in those financial statements and
that indicated in the previous financial statements.






	 	10.2.3	 	Information: miscellaneous The Borrower shall supply to the Agent:






	 	(a)	 	all documents dispatched by the Borrower to its
creditors generally at the same time as they are dispatched;
	 
	 	(b)	 	promptly upon becoming aware of them, details
of any litigation, arbitration or administrative proceedings which are
current, threatened or pending against any Security Party, and which
might, if adversely determined, have a Material Adverse Effect on the
ability of a Security Party to perform its obligations under the
Security Documents or on the validity or enforceability of any of the
Security Documents; and
	 
	 	(c)	 	promptly, such further information regarding
the financial condition, business and operations of any Security Party
as the




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	 	 	 	Agent may reasonably request including, without limitation, cash
flow analyses and details of the operating costs of each Vessel.






	 	10.2.4	 	Notification of default






	 	(a)	 	The Borrower shall notify the Agent of any
Default (and the steps, if any, being taken to remedy it) promptly upon
becoming aware of its occurrence.
	 
	 	(b)	 	Promptly upon a request by the Agent, the
Borrower shall supply to the Agent a certificate signed by two of its
directors or senior officers on its behalf certifying to the best of
their knowledge and belief that no Default is continuing (or if a
Default is continuing, specifying the Default and the steps, if any,
being taken to remedy it).






	 	10.2.5	 	“Know your customer” checks If:






	 	(a)	 	the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation
made after the date of this Agreement;
	 
	 	(b)	 	any change in the status of the Borrower after
the date of this Agreement; or
	 
	 	(c)	 	a proposed assignment or transfer by a Bank of
any of its rights and obligations under this Agreement to a party that
is not a Bank prior to such assignment or transfer,






	 		 	obliges the Agent or any Bank (or, in the case of (c) above, any prospective
new Bank) to comply with “know your customer” or similar identification
procedures in circumstances where the necessary information is not already
available to it, the Borrower shall promptly upon the request of the Agent
or any Bank supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Agent (for itself or on behalf of
any Bank) or any Bank for itself (or, in the case of (c) above, on behalf of
any prospective new Bank) in order for the Agent or that Bank (or, in the
case of (c) above, any prospective




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	 	 	 	new Bank) to carry out and be satisfied it has complied with all necessary
“know your customer” or other similar checks under all applicable laws and
regulations pursuant to the transactions contemplated in the Security
Documents.






	 	10.2.6	 	Pari Passu The Borrower shall ensure that its obligations under this
Agreement shall at all times rank at least pari passu with all of its other
present and future unsecured and unsubordinated indebtedness with the exception
of any obligations which are mandatorily preferred by any applicable laws to
companies generally and not by contract.
	 
	 	10.2.7	 	Corporate Existence The Borrower shall ensure that throughout the Facility
Period each of the Security Parties shall (i) remain duly formed and validly
existing under the laws of its respective jurisdiction of incorporation (ii)
remain authorised to do business in the jurisdiction in which it transacts its
business (iii) continue to have the power to carry on its business as it is now
being conducted and to enter into and perform its obligations under the
Security Documents to which it is a party and (iv) continue to comply with all
laws, statutory, regulatory and other requirements relative to its business
which could reasonably be expected to have a Material Adverse Effect on its
business, assets or operations, financial or otherwise.
	 
	 	10.2.8	 	Admissibility In Evidence The Borrower shall obtain all necessary
authorisations, consents, approvals, licences, exemptions, filings,
registrations, recordings and notarisations required or advisable in connection
with the admissibility in evidence of the Security Documents or any of them in
Proceedings in England or any other jurisdiction in which Proceedings have been
commenced.
	 
	 	10.2.9	 	Registration of Vessels The Borrower undertakes to maintain the registration
of the Vessels under the flag indicated in Schedule 2, or such other flag
requested by the Borrower and is consented to by the Banks (such consent not to
be unreasonably withheld), for the duration of the Facility Period.




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	 	10.2.10	 	Classification The Borrower shall ensure that each Vessel maintains the
highest classification required for the purpose of the relevant trade of such
Vessel which shall be with a Pre-Approved Classification Society or such other
society as may be acceptable to the Agent, in each case, free from any overdue
recommendations and conditions affecting the class of that Vessel.
	 
	 	10.2.11	 	Compliance with Applicable Laws The Borrower shall comply with all
applicable laws to which it may be subject.
	 
	 	10.2.12	 	Inspection of records The Borrower will permit the inspection of its
financial records and accounts on reasonable notice from time to time during
business hours by the Agent or its nominee.
	 
	 	10.2.13	 	Valuations The Borrower will deliver to the Agent:






	 	(a)	 	a Valuation of each of the Vessels on the due
date for delivery of the six monthly Compliance Certificate (which
shall be at the expense of the Borrower); and
	 
	 	(b)	 	on such other occasions as the Agent may
reasonably request (which shall be at the expense of the Agent).






	 	10.2.14	 	Financial covenants Throughout the Facility Period the Borrower shall:-






	 	(i)	 	maintain a ratio of Total Shareholder Equity to
Total Assets of at least thirty five per cent. (35%); and
	 
	 	(ii)	 	maintain a ratio of EBITDA to Interest Expense
of no less than 2.25:1.00.






	 	10.2.15	 	Compliance Certificates The Borrower will produce a Compliance Certificate
with each set of audited consolidated annual accounts and each set of unaudited
consolidated six monthly accounts.
	 
	 	10.2.16	 	“Additional security If and so often as the aggregate of:






	 	(i)	 	the Valuations of the Vessels; and




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	 	(ii)	 	the value of any additional security acceptable
to the Agent in its absolute discretion for the time being provided to
the Banks (or to the Agent on their behalf) pursuant to this Clause
(the “Collateral”)






	 	 	 	shall be less than one hundred and forty per cent (140%) of the amount of
the aggregate of the Facility Outstandings and the LC Amount (each being a
“Relevant Percentage”) the Borrower will, within thirty days of the request
of the Agent to do so, at the Borrower’s option:-






	 	(a)	 	pay to the Agent or to its nominee a cash
deposit in the amount of the shortfall to be secured in favour of the
Banks (or of the Agent on their behalf) as additional security for the
payment of the Indebtedness; or
	 
	 	(b)	 	give to the Banks (or to the Agent on their
behalf) other additional security as proposed by the Borrower in amount
and form acceptable to the Banks in their reasonable discretion, acting
in good faith; or
	 
	 	(c)	 	prepay the amount of the Indebtedness which
will ensure that the Collateral is not less than the Relevant
Percentage.






	 	 	 	Clauses 5.3, 5.4, 5.5 and 5.6 shall apply, mutatis mutandis, to any
prepayment made pursuant to this Clause and the value of any additional
security provided pursuant to this Clause shall be determined by the Agent
in its discretion after consultation with the Majority Banks. Where the
Borrower has provided additional security pursuant to this Clause, the
Borrower may obtain new Valuations (at the Borrower’s expense) on a date
falling not earlier than three (3) months after the date such additional
security was provided. If the aggregate amount of the Collateral reflecting
the new Valuations of the Vessels (the “New Security Amount”) is greater
than the Relevant Percentage then, provided no Event of Default has occurred
and is continuing, the Agent shall release to the Borrower, upon the
Borrower’s written request and at the Borrower’s expense, any part of the
additional security as the Borrower shall select with the consent of the
Agent (such consent not to be unreasonably





63









 











	 	 	 	withheld), such that after its release the New Security Amount will be at
least equal to the Relevant Percentage.
	 
	 	10.2.17	 	Subsidiaries Throughout the Facility Period the Borrower shall ensure that
each of Gulf Offshore N.S. Limited and GulfMark Rederi AS remain wholly owned
subsidiaries of the Borrower, unless a change of ownership of Gulf Offshore
N.S. Limited or GulfMark Rederi AS (as the case may be) is approved in writing
by the Banks.
	 
	 	10.2.18	 	US Filings The Borrower shall permit the Agent to undertake the filing of
all such UCC financing statements as may be requested to be filed in one or
more registries within the States of Delaware, Texas and District of Columbia
which in the judgment of the Agent are necessary in order to perfect the
security interests in favour of the Agent created by the Assignments entered
into by the Borrower.






	11	 	Earnings






	 	11.1	 	Remittance of Earnings The Borrower shall procure that all Net Earnings and
any Requisition Compensation are paid to the Earnings Account or to such other
account(s) as the Agent shall from time to time specify by notice in writing to the
Borrower to begin as of no later than 30 June 2006 or such later date as the Banks
shall agree.
	 
	 	11.2	 	Earnings Account The Borrower shall maintain the Earnings Account with the
Agent for the duration of the Facility Period free of Encumbrances and rights of set
off except for Permitted Liens and those Encumbrances and rights of set off created by
or under the Security Documents.






	12	 	Events Of Default






	 	12.1	 	The Agent’s rights If any of the events set out in Clause 12.2 occurs, the
Agent may at its discretion (and, on the instructions of the Majority Banks, will):






	 	12.1.1	 	by notice to the Borrower declare the Banks to be under no further obligation
to the Borrower under or pursuant to this Agreement and may (and, on the
instructions of the Majority Banks, will) declare all or any part of the
Indebtedness (including such unpaid interest as shall have




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	 	 	 	accrued and any Break Costs incurred by the Finance Parties) to be
immediately payable, whereupon the Indebtedness (or the part of the
Indebtedness referred to in the Agent’s notice) shall immediately become
due and payable without any further demand or notice of any kind; and/or
	 
	 	12.1.2	 	declare that any undrawn portion of the Facility shall be cancelled,
whereupon the same shall be cancelled and the corresponding Commitment of each
Bank shall be reduced to zero; and/or
	 
	 	12.1.3	 	require cash cover for the LC Amount; and/or
	 
	 	12.1.4	 	exercise any rights and remedies in existence or arising under the Security
Documents.






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






	 	12.2.1	 	payment default if the Borrower defaults in the payment of any part of the
Indebtedness when due PROVIDED ALWAYS that if the Borrower can demonstrate to
the reasonable satisfaction of the Agent that it has given all necessary
instructions to effect payment and the non-receipt thereof is attributable to
an error in the banking system, such Event of Default shall only occur two (2)
Business Days after such payment fell due; or
	 
	 	12.2.2	 	other default if any of the Security Parties fails to observe or perform any
of the covenants, conditions, undertakings, agreements or obligations on its
part contained in any of the Security Documents or shall in any other way be in
breach of any of the Security Documents and such default (if in the reasonable
opinion of the Majority Banks capable of remedy) is not remedied within fifteen
(15) Business Days after notice of the default has been given to the Borrower;
or
	 
	 	12.2.3	 	misrepresentation or breach of warranty if any representation, warranty or
statement made, deemed to be made, or repeated under any of the Security
Documents or in any accounts, certificate, notice instrument, written statement
or opinion delivered by a Security Party under or in connection with any
Security Document is incorrect or




65









 






	 	 	 	misleading in any material respect when made, deemed to be made or
repeated; or






	 	12.2.4	 	execution if a distress or execution or other process of a court or
authority not covered by insurance is levied on any of the property of any of
the Security Parties before or after final judgment or by order of any
competent court or authority for an amount in excess of one million Dollars
($1,000,000) or its equivalent in any other currency and is not satisfied or
stayed (with a view to being contested in good faith) within fourteen days of
levy or any other applicable cure period (if longer); or
	 
	 	12.2.5	 	insolvency events if any of the Security Parties:-






	 	(a)	 	resolves to appoint, or applies for, or
consents to the appointment of, a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of all or part of
its assets; or
	 
	 	(b)	 	is unable or admits its inability to pay
its debts as they fall due; or
	 
	 	(c)	 	makes a general assignment for the benefit
of creditors; or
	 
	 	(d)	 	ceases trading or threatens to cease
trading; or
	 
	 	(e)	 	has appointed an Inspector under the
Companies Act 1985 or any statutory provision which the Agent in its
discretion considers analogous thereto; or






	 	12.2.6	 	insolvency proceedings if any proceedings are commenced or threatened, or
any order or judgment is given by any court, for the bankruptcy, liquidation,
winding up, administration or re-organisation of any of the Security Parties or
for the appointment of a receiver, administrative receiver, administrator,
liquidator or trustee of any of the Security Parties or of all or any material
part of the assets of any of the Security Parties or if any person appoints or
purports to appoint such receiver, administrative receiver, administrator,
liquidator or trustee which proceeding is not discharged within fifteen (15)
days of its commencement; or




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	 	12.2.7	 	impossibility or illegality unless covered by Clause 15.7, if any event
occurs which would, or would with the passage of time, render performance of
any of the Security Documents impossible, unlawful or unenforceable by the
Banks or the Agent; or
	 
	 	12.2.8	 	conditions subsequent if any of the conditions set out in Clause 3.4 is not
satisfied within the time reasonably required by the Agent; or
	 
	 	12.2.9	 	revocation or modification of consents etc. if any material consent,
licence, approval or authorisation which is now or which at any time during the
Facility Period becomes necessary to enable any of the Security Parties to
comply with any of their obligations in or pursuant to any of the Security
Documents is revoked, withdrawn or withheld, or modified in a manner which the
Agent reasonably considers is, or may be, prejudicial to the interests of the
Banks in a material manner, or any material consent, licence, approval or
authorisation ceases to remain in full force and effect; or
	 
	 	12.2.10	 	curtailment of business if the business of any of the Security Parties is
wholly or materially curtailed by any intervention by or under authority of any
government, or if all or a substantial part of the undertaking, property or
assets of any of the Security Parties is seized, nationalised, expropriated or
compulsorily acquired by or under authority of any government or any Security
Party disposes or threatens to dispose of a substantial part of its business or
assets; or
	 
	 	12.2.11	 	acceleration of other indebtedness if any Financial Indebtedness of any of
the Security Parties or any Material Subsidiary becomes due or capable of being
declared due prior to its stated maturity by reason of default on the part of
that Security Party or Material Subsidiary (as the case may be), or is not
repaid or satisfied on the due date for its repayment or any such other loan,
guarantee or indebtedness becomes enforceable save for amounts of less than one
million Dollars ($1,000,000) in aggregate, or its equivalent in any other
currency; or




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	 	12.2.12	 	reduction of capital if any of the Security Parties reduces its authorised
or issued or subscribed capital except as part of a share buy-back, whilst
solvent, by the Borrower; or
	 
	 	12.2.13	 	challenge to registration if the registration of any Vessel or any Mortgage
becomes void or voidable or liable to cancellation or termination; or
	 
	 	12.2.14	 	war if the country of registration of any Vessel becomes involved in war
involving another sovereign state (whether or not declared) or civil war or is
occupied by any other power and the Agent reasonably considers that, as a
result, the security conferred by the Security Documents is materially
prejudiced; or
	 
	 	12.2.15	 	material adverse change etc. if any thing is done or permitted or omitted
to be done by any of the Security Parties or any Material Subsidiary which in
the reasonable opinion of the Majority Banks has a Material Adverse Effect or
if there occurs (in the reasonable opinion of the Majority Banks) any material
adverse change in the business, affairs or financial condition of any of the
Security Parties or any Material Subsidiary from that pertaining at the date of
this Agreement; or
	 
	 	12.2.16	 	final judgements if any of the Security Parties fails to comply with any
non appealable court order or fails to pay a final unappealable judgment
against it which remains unsettled for fifteen (15) Business Days; or
	 
	 	12.2.17	 	loss of stock market listing if the Borrower ceases to be listed on the New
York Stock Exchange or another recognised stock exchange for more than fifteen
(15) Business Days; or
	 
	 	12.2.18	 	similar event any event occurs which, under the laws of any jurisdiction,
has a similar or analogous effect to any of those events mentioned in Clauses
12.2.4, 12.2.5 and 12.2.6; or
	 
	 	12.2.19	 	environmental matters






	 	(a)	 	any Environmental Claim is pending or
made against the Borrower or any of the Borrower’s Environmental
Affiliates or in




68









 






	 	 	 	connection with a Vessel, where such Environmental Claim has a
Material Adverse Effect, where such Environmental Claim is not
covered by the Insurances.






	 	(b)	 	any actual Environmental Incident occurs
in connection with a Vessel, where such Environmental Incident has a
Material Adverse Effect, where such Environmental Claim is not
covered by the Insurances; or






	 	12.2.20	 	repudiation Any Security Party repudiates any Security Document to which it
is a party or does or causes to be done any act or thing evidencing an
intention to repudiate any such Security Documents.






	13	 	Set-Off and Lien






	 	13.1	 	Set-off The Borrower irrevocably authorises each of the Finance Parties at any
time after all or any part of the Indebtedness shall have become due and payable to set
off without notice any liability of the Borrower to any of the Finance Parties (whether
present or actual, and irrespective of the branch or office, currency or place of
payment) against any credit balance from time to time standing on any account of the
Borrower (whether current or otherwise and whether or not subject to notice) with any
branch of any of the Finance Parties in or towards satisfaction of the Indebtedness
and, in the name of that Finance Party or the Borrower, to do all acts (including,
without limitation, converting or exchanging any currency) and execute all documents
which may be required to effect such application.
	 
	 	13.2	 	Lien If an Event of Default has occurred and is continuing, unremedied or
unwaived, each Finance Party shall have a lien on and be entitled to retain and realise
as additional security for the repayment of the Indebtedness any cheques, drafts,
bills, notes or negotiable or non-negotiable instruments and any stocks, shares or
marketable or other securities and property of any kind of the Borrower (or of that
Finance Party as agent or nominee of the Borrower) from time to time held by that
Finance Party, whether for safe custody or otherwise.
	 
	 	13.3	 	Restrictions on withdrawal Despite any term to the contrary in relation to any
deposit or credit balance at any time on any account of the Borrower with any of the
Finance Parties, no such deposit or balance shall be repayable or capable of




69









 






	 	 	 	being assigned, mortgaged, charged or otherwise disposed of or dealt with by the
Borrower after an Event of Default has occurred and while such Event of Default is
continuing unremedied or unwaived, but any Finance Party may from time to time
permit the withdrawal of all or any part of any such deposit or balance without
affecting the continued application of this Clause.






	 	13.4	 	Application Whilst an Event of Default is continuing unremedied or unwaived,
the Borrower irrevocably authorises the Agent to apply all sums which the Agent may
receive:-






	 	13.4.1	 	pursuant to a sale or other disposition of a Vessel or any right, title or
interest in a Vessel; or
	 
	 	13.4.2	 	by way of payment to the Agent of any sum in respect of the Insurances or
Requisition Compensation of a Vessel; or
	 
	 	13.4.3	 	otherwise arising under or in connection with any of the Security Documents






	 	 	 	in or towards satisfaction, or by way of retention on account, of the Indebtedness,
in such manner as the Agent may in its discretion determine PROVIDED THAT any part
of the Indebtedness arising out of the LCs shall rank pari passu with every other
part of the Indebtedness.






	14	 	Assignment and Sub-Participation






	 	14.1	 	Right to assign Each of the Banks may assign or transfer all or any of its
rights under or pursuant to the Security Documents or assign or grant
sub-participations in all or any part of its Commitment (i) to any other branch or
affiliate of that Bank or to another Bank or (ii) with the prior written consent of the
Agent, the Issuer and the Borrower (which shall not be unreasonably withheld and which
shall be deemed given if no response shall be received within ten (10) Business Days of
a request or at any time whilst an Event of Default is in existence) to any other bank
or financial institution.
	 
	 	14.2	 	Borrower’s co-operation The Borrower will co-operate fully and will procure
that the other Security Parties co-operate fully with the Banks in connection with any
assignment, transfer or sub-participation pursuant to Clause 14.1; will execute




70









 












	 	 	 	and procure the execution of such documents as the Banks may require in connection
therewith; and irrevocably authorises each of the Finance Parties to disclose to any
proposed assignee, transferee or sub-participant (whether before or after any
assignment, transfer or sub-participation and whether or not any assignment,
transfer or sub-participation shall take place) all information relating to the
Security Parties, the Facility, the LCs or the Security Documents which each such
Finance Party may in its discretion consider necessary or desirable (subject to any
duties of confidentiality applicable to the Banks generally).
	 
	 	14.3	 	Rights of assignee Any assignee or transferee of a Bank shall (unless limited
by the express terms of the assignment or transfer) take the full benefit of every
provision of the Security Documents benefiting that Bank.
	 
	 	14.4	 	Transfer Certificates If any Bank wishes to transfer all or any of its
Commitment as contemplated in Clause 14.1 then such transfer may be effected by the
delivery to the Agent and the Banks of a duly completed and duly executed Transfer
Certificate in which event, on the later of the Transfer Date specified in such
Transfer Certificate and the fifth Business Day after the date of delivery of such
Transfer Certificate to the Agent:






	 	14.4.1	 	to the extent that in such Transfer Certificate the Bank which is a party
thereto seeks to transfer its Commitment in whole, the Borrower and such Bank
shall be released from further obligations towards each other under this
Agreement and their respective rights against each other shall be cancelled
other than existing claims against such Bank for breach of this Agreement (such
rights, benefits and obligations being referred to in this Clause 14.4 as
“discharged rights and obligations”);
	 
	 	14.4.2	 	the Borrower and the Transferee which is a party thereto shall assume
obligations towards each other and/or acquire rights against each other which
differ from such discharged rights and obligations only insofar as the Borrower
and such Transferee have assumed and/or acquired the same in place of the
Borrower and such Bank;
	 
	 	14.4.3	 	the Finance Parties and the Transferee shall acquire the same rights and
benefits and assume the same obligations between themselves as they would have
acquired and assumed had such Transferee been an original




71









 






	 	 	 	party to this Agreement as a Bank with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer; and






	 	14.4.4	 	the Transferee shall pay to the Agent a transfer fee of three thousand
Dollars ($3,000).






	 	14.5	 	Power of Attorney In order to give effect to each Transfer Certificate, the
Finance Parties (with the exception of the Banks) and the Borrower each hereby
irrevocably and unconditionally appoint the Agent as its true and lawful attorney with
full power to execute on their respective behalves each Transfer Certificate delivered
to the Agent pursuant to Clause 14.4 without the Agent being under any obligation to
take any further instructions from or give any prior notice to, any of the Finance
Parties or, subject to the Borrower’s rights under Clause 14.1, the Borrower before
doing so and the Agent shall so execute each such Transfer Certificate on behalf of the
other Finance Parties (with the exception of the Banks) and the Borrower immediately on
its receipt of the same pursuant to Clause 14.4.
	 
	 	14.6	 	Notification The Agent shall promptly notify the other Finance Parties (with
the exception of the Banks), the Transferee and the Borrower on the execution by it and
the Banks of any Transfer Certificate together with details of the amount transferred,
the Transfer Date and the parties to such transfer.






	15	 	Payments, Mandatory Prepayment, Reserve Requirements and Illegality






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






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	 	15.2	 	No deductions or withholdings All payments (whether of principal or interest
or otherwise) to be made by the Borrower pursuant to the Security Documents shall,
subject only to Clause 15.3, be made free and clear of and without deduction for or on
account of any Taxes or other deductions, withholdings, restrictions, conditions or
counterclaims of any nature, and the Borrower will not claim any equity in respect of
any payment due from them to the Banks or to the Agent under or in relation to any of
the Security Documents.
	 
	 	15.3	 	Grossing-up If at any time any law requires (or is interpreted to require) the
Borrower to make any deduction or withholding from any payment, or to change the rate
or manner in which any required deduction or withholding is made, the Borrower will
promptly notify the Agent and, simultaneously with making that payment, will pay to the
Agent whatever additional amount (after taking into account any additional Taxes on, or
deductions or withholdings from, or restrictions or conditions on, that additional
amount) is necessary to ensure that, after making the deduction or withholding, the
Agent and the Banks receive a net sum equal to the sum which they would have received
had no deduction or withholding been made.
	 
	 	15.4	 	Evidence of deductions If at any time the Borrower is required by law to make
any deduction or withholding from any payment to be made by it pursuant to any of the
Security Documents, the Borrower will pay the amount required to be deducted or
withheld to the relevant authority within the time allowed under the applicable law and
will, no later than thirty days after making that payment, deliver to the Agent an
original receipt issued by the relevant authority, or other evidence reasonably
acceptable to the Agent, evidencing the payment to that authority of all amounts
required to be deducted or withheld. If the Borrower makes any deduction or withholding
from any payment under or pursuant to any of the Security Documents, and a Bank
subsequently receives a refund or allowance from any tax authority which that Bank at
its sole discretion identifies as being referable to that deduction or withholding,
that Bank shall, as soon as reasonably practicable, pay to the Borrower an amount equal
to the amount of the refund or allowance received, if and to the extent that it may do
so without prejudicing its right to retain that refund or allowance and without putting
itself in any worse financial position than that in which it would have been had the
deduction or withholding not been required to have been made. Nothing in this Clause
shall be





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	 	 	 	interpreted as imposing any obligation on any Bank to apply for any refund or
allowance nor as restricting in any way the manner in which any Bank organises its
tax affairs, nor as imposing on any Bank any obligation to disclose to the Borrower
any information regarding its tax affairs or tax computations. All costs and
expenses incurred by any Bank in obtaining or seeking to obtain a refund or
allowance from any tax authority pursuant to this Clause shall be for the Borrower’s
account.
	 
	 	15.5	 	Adjustment of due dates If any payment to be made under any of the Security
Documents, other than a payment of interest on the Facility (to which Clause 6.5
applies), shall be due on a day which is not a Business Day, that payment shall be made
on the next succeeding Business Day (unless the next succeeding Business Day falls in
the next calendar month in which event the payment shall be made on the next preceding
Business Day). Any such variation of time shall be taken into account in computing any
interest in respect of that payment.
	 
	 	15.6	 	Change in law If, by reason of the introduction of any law, or any change in
any law, or the interpretation or administration of any law, or in compliance with any
request or requirement from any central bank or any fiscal, monetary or other
authority:-






	 	15.6.1	 	any Finance Party (or the holding company of any Finance Party) shall be
subject to any Tax with respect to payments of all or any part of the
Indebtedness; or
	 
	 	15.6.2	 	the basis of Taxation of payments to any Finance Party in respect of all or
any part of the Indebtedness shall be changed; or
	 
	 	15.6.3	 	any reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans by any
branch of any Finance Party or its direct or indirect holding company; or
	 
	 	15.6.4	 	any ratio (whether cash, capital adequacy, liquidity or otherwise) which any
Finance Party or its direct or indirect holding company is required or
requested to maintain shall be affected; or




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	 	15.6.5	 	there is imposed on any Finance Party (or on the direct or indirect holding
company of any Finance Party) any other condition in relation to the
Indebtedness or the Security Documents;






	 	 	 	and the result of any of the above shall be to increase the cost to any Bank (or to
the direct or indirect holding company of any Bank) of that Bank making or
maintaining its Commitment or its Drawing, or the cost to the Issuer (or to the
direct or indirect holding company of the Issuer) of the Issuer making or
maintaining its obligations under an LC, or to cause any Finance Party to suffer (in
its reasonable opinion) a material reduction in the rate of return on its overall
capital below the level which it reasonably anticipated at the Execution Date and
which it would have been able to achieve but for its entering into this Agreement
and/or performing its obligations under this Agreement, the Finance Party affected
shall notify the Agent and, on demand to the Borrower by the Agent, the Borrower
shall from time to time pay to the Agent for the account of the Finance Party
affected the amount which shall compensate that Finance Party or the Agent (or the
relevant holding company) for such additional cost or reduced return. A certificate
signed by an authorised signatory of the Agent or of the Finance Party affected
setting out the amount of that payment and the basis of its calculation shall be
submitted to the Borrower and shall be conclusive evidence of such amount save for
manifest error or on any question of law.
	 
	 	15.7	 	Illegality and impracticality Notwithstanding anything contained in the
Security Documents, (i) the obligations of a Bank to advance or maintain its Commitment
or (ii) the obligations of the Issuer to issue or maintain an LC shall terminate
respectively in the event that a change in any law or in the interpretation of any law
by any authority charged with its administration shall make it unlawful (in the case of
(i) above) for that Bank to advance or maintain its Commitment or (in the case of (ii)
above) for the Issuer to issue or maintain an LC. In such event the Issuer and/or the
Bank affected shall notify the Agent and the Agent shall, by written notice to the
Borrower, declare that Bank’s obligations or the Issuer’s obligations (as the case may
be) to be immediately terminated. In the event of (i) above if all or any part of the
Facility shall have been advanced by the Banks to the Borrower the portion of the
Indebtedness (including all accrued interest) advanced by the Bank so affected shall be
prepaid within thirty days from the date of such notice, or sooner if illegality is
determined. In the event of (ii) above if an





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	 	 	 	LC shall have been issued by the Issuer then the Borrower shall procure the release
of such LC within thirty days from the receipt of such notice, or sooner if
illegality is determined. Clause 5.4 shall apply to either of those prepayments if
it is made on a day other than the last day of an Interest Period. During that
period, the affected Bank and/or Issuer shall negotiate in good faith with the
Borrower to find an alternative method or lending base in order to maintain the
Facility or LC (as the case may be).
	 
	 	15.8	 	Changes in market circumstances If at any time a Bank determines (which
determination shall be final and conclusive and binding on the Borrower) that, by
reason of changes affecting the London Interbank market, adequate and fair means do not
exist for ascertaining the rate of interest on the Facility or any part thereof
pursuant to this Agreement:-






	 	15.8.1	 	that Bank shall give notice to the Agent and the Agent shall give notice to
the Borrower of the occurrence of such event; and
	 
	 	15.8.2	 	the Agent shall as soon as reasonably practicable certify to the Borrower in
writing the effective cost to that Bank of maintaining its Commitment for such
further period as shall be selected by that Bank and the rate of interest
payable by the Borrower for that period; or, if that is not acceptable to the
Borrower,
	 
	 	15.8.3	 	the Agent in accordance with instructions from that Bank and subject to that
Bank’s approval of any agreement between the Agent and the Borrower, will
negotiate with the Borrower in good faith with a view to modifying this
Agreement to provide a substitute basis for that Bank’s Commitment which is
financially a substantial equivalent to the basis provided for in this
Agreement.






	 	 	 	If, within thirty days of the giving of the notice referred to in Clause 15.8.1, the
Borrower and the Agent fail to agree in writing on a substitute basis for such
Bank’s Commitment the Borrower will immediately prepay the amount of such Bank’s
Commitment and the Maximum Facility Amount will automatically decrease by the amount
of such Commitment and such decrease shall not be reversed. Clause 5.4 shall apply
to that prepayment if it is made on a day other than the last day of an Interest
Period.




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






	16	 	Communications






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






	 	16.1.1	 	in the case of any of the Finance Parties to the Agent at its address at the
head of this Agreement (fax no: +47 5521 1924) marked for the attention of:
Credit Administration; and
	 
	 	16.1.2	 	in the case of the Borrower to the Communications Address;






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




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






	 	16.2.1	 	in the case of a fax when the sender receives one or more transmission
reports showing the whole of the Communication to have been transmitted to the
correct fax number;
	 
	 	16.2.2	 	if delivered to an officer of the relevant party or (in the case of the
Borrower) left at the Communications Address at the time of delivery or
leaving; or
	 
	 	16.2.3	 	if posted, at 9.00 a.m. on the fifth Business Day after posting by prepaid
first class post.






	 	 	 	Any Communication by fax shall be promptly confirmed in writing by post or hand
delivery.






	17	 	General Indemnities






	 	17.1	 	Currency In the event of any Finance Party receiving or recovering any amount
payable under any of the Security Documents in a currency other than the Currency of
Account, and if the amount received or recovered is insufficient when converted into
the Currency of Account at the date of receipt to satisfy in full the amount due, the
Borrower shall, on the Agent’s written demand, pay to the Agent such further amount in
the Currency of Account as is sufficient to satisfy in full the amount due and that
further amount shall be due to the Agent on behalf of the Finance Parties as a separate
debt under this Agreement.
	 
	 	17.2	 	Costs and expenses The Borrower will, within fourteen days of the Agent’s
written demand, reimburse the Agent (on behalf of each of the Finance Parties) for all
reasonable out of pocket expenses including external legal costs (including stamp duty,
Value Added Tax or any similar or replacement tax if applicable) of and incidental to:-






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




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	 	17.2.2	 	any amendments, addenda or supplements to any of the Security Documents
(whether or not completed);
	 
	 	17.2.3	 	any other documents which may at any time reasonably be required by any
Finance Party to give effect to any of the Security Documents or which any
Finance Party is entitled to call for or obtain pursuant to any of the Security
Documents; and
	 
	 	17.2.4	 	the exercise of the rights, powers, discretions and remedies of the Finance
Parties under or pursuant to the Security Documents.






	 	17.3	 	Events of Default The Borrower shall indemnify the Finance Parties from time
to time on demand against all losses and costs incurred or sustained by any Finance
Party as a consequence of any Event of Default, including (without limitation) any
Break Costs.
	 
	 	17.4	 	Funding costs The Borrower shall indemnify the Finance Parties from time to
time on demand against all losses and costs incurred or sustained by any Finance Party
if, for any reason due to a default or other action by the Borrower, any Drawing is not
advanced to the Borrower or an LC issued after the relevant Drawdown Notice or Issue
Request has been given to the Agent, or is advanced or issued (as the case may be) on a
date other than that requested in the Drawdown Notice or Issue Request, including
(without limitation) any Break Costs.
	 
	 	17.5	 	Protection and enforcement The Borrower shall indemnify the Finance Parties
from time to time on demand against all losses, costs and liabilities which any Finance
Party may from time to time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on the Finance Parties
by the Security Documents or in or about the exercise or purported exercise by the
Finance Parties of any of the rights, powers, discretions or remedies vested in them
under or arising out of the Security Documents, including (without limitation) any
losses, costs and liabilities which any Finance Party may from time to time sustain,
incur or become liable for by reason of any Finance Party being mortgagees of any
Vessel, assignees of any Mortgage and/or a lender to the Borrower, or by reason of any
Finance Party being deemed by any court or authority to be an operator or controller,
or in any way concerned in the operation or control, of any Vessel. No such indemnity
will be given to a Finance





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	 	 	 	Party where any such loss, cost or liability has occurred due to gross negligence or
wilful misconduct on the part of that Finance Party; however this shall not affect
the right of any other Finance Party to receive any such indemnity.
	 
	 	17.6	 	Liabilities of Finance Parties The Borrower will from time to time reimburse
the Finance Parties on demand for all sums which any Finance Party may pay on account
of any of the Security Parties or in connection with any Vessel (whether alone or
jointly or jointly and severally with any other person) including (without limitation)
all sums which any Finance Party may pay or guarantees which any Finance Party may give
in respect of the Insurances, any expenses incurred by any Finance Party in connection
with the maintenance or repair of any Vessel or in discharging any lien, bond or other
claim relating in any way to any Vessel, and any sums which any Finance Party may pay
or guarantees which they may give to procure the release of any Vessel from arrest or
detention.
	 
	 	17.7	 	Taxes The Borrower shall pay all Taxes to which all or any part of the
Indebtedness or any of the Security Documents may be at any time subject and shall
indemnify the Finance Parties on demand against all liabilities, costs, claims and
expenses incurred in connection therewith, including but not limited to any such
liabilities, costs, claims and expenses resulting from any omission to pay or delay in
paying any such Taxes. The indemnity contained in this Clause shall survive the
repayment of the Indebtedness.






	18	 	Miscellaneous






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




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	 	18.2	 	No oral variations No variation or amendment of any of the Security Documents
shall be valid unless in writing and signed on behalf of the Agent and the relevant
Security Party.
	 
	 	18.3	 	Severability If at any time any provision of any of the Security Documents is
invalid, illegal or unenforceable in any respect that provision shall be severed from
the remainder and the validity, legality and enforceability of the remaining provisions
shall not be affected or impaired in any way.
	 
	 	18.4	 	Successors etc. The Security Documents shall be binding on the Security
Parties and on their successors and permitted transferees and assignees, and shall
inure to the benefit of the Finance Parties and their respective successors,
transferees and assignees. The Borrower may not assign or transfer any of its rights
or duties under or pursuant to any of the Security Documents without the prior written
consent of the Banks.
	 
	 	18.5	 	Further assurance If any provision of the Security Documents shall be invalid
or unenforceable in whole or in part by reason of any present or future law or any
decision of any court, or if the documents at any time held by the Finance Parties on
their behalf are considered by the Banks for any reason insufficient to carry out the
terms of this Agreement, then from time to time the Borrower will promptly, on demand
by the Agent, execute or procure the execution of such further documents as in the
reasonable opinion of the Banks are necessary to provide adequate security for the
repayment of the Indebtedness.
	 
	 	18.6	 	Other arrangements The Finance Parties may, without prejudice to their rights
under or pursuant to the Security Documents, at any time and from time to time, on such
terms and conditions as they may in their discretion determine, and without notice to
the Borrower, grant time or other indulgence to, or compound with, any other person
liable (actually or contingently) to the Finance Parties or any of them in respect of
all or any part of the Indebtedness, and may release or renew negotiable instruments
and take and release securities and hold funds on realisation or suspense account
without affecting the liabilities of the Borrower or the rights of the Finance Parties
under or pursuant to the Security Documents.
	 
	 	18.7	 	Advisers The Borrower irrevocably authorises the Agent, at any time and from
time to time during the Facility Period, to consult insurance advisers on any





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	 	 	 	matters relating to the Insurances, and from time to time to consult or retain
advisers or consultants to monitor or advise on any other claims relating to the
Vessels. The Borrower will provide such advisers and consultants with all
information and documents which they may from time to time reasonably require and
will reimburse the Agent on demand for all reasonable costs and expenses incurred by
the Agent in connection with the consultation or retention of such advisers or
consultants.
	 
	 	18.8	 	Delegation The Finance Parties may at any time and from time to time delegate
to any person any of their rights, powers, discretions and remedies pursuant to the
Security Documents, other than rights relating to actions to be taken by the Majority
Banks or the Banks as a group on such terms as they may consider appropriate (including
the power to sub-delegate).
	 
	 	18.9	 	Rights etc. cumulative Every right, power, discretion and remedy conferred on
the Finance Parties under or pursuant to the Security Documents shall be cumulative and
in addition to every other right, power, discretion or remedy to which they may at any
time be entitled by law or in equity. The Finance Parties may exercise each of their
rights, powers, discretions and remedies as often and in such order as they deem
appropriate subject to obtaining the prior written consent of the Majority Banks. The
exercise or the beginning of the exercise of any right, power, discretion or remedy
shall not be interpreted as a waiver of the right to exercise any other right, power,
discretion or remedy either simultaneously or subsequently.
	 
	 	18.10	 	No enquiry The Finance Parties shall not be concerned to enquire into the
powers of the Security Parties or of any person purporting to act on behalf of any of
the Security Parties, even if any of the Security Parties or any such person shall have
acted in excess of their powers or if their actions shall have been irregular,
defective or informal, whether or not any Finance Parties had notice thereof.
	 
	 	18.11	 	Continuing security The security constituted by the Security Documents shall
be continuing and shall not be satisfied by any intermediate payment or satisfaction
until the Indebtedness shall have been repaid in full and none of the Finance Parties
shall be under any further actual or contingent liability to any third party in
relation to the Vessels, the Insurances or Requisition Compensation or any other matter
referred to in the Security Documents.




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	 	18.12	 	Security cumulative The security constituted by the Security Documents shall
be in addition to any other security now or in the future held by the Finance Parties
or any of them for or in respect of all or any part of the Indebtedness, and shall not
merge with or prejudice or be prejudiced by any such security or any other contractual
or legal rights of any of the Finance Parties, nor affected by any irregularity, defect
or informality, or by any release, exchange or variation of any such security. Section
93 of the Law of Property Act 1925 and all provisions which the Agent considers
analogous thereto under the law of any other relevant jurisdiction shall not apply to
the security constituted by the Security Documents.
	 
	 	18.13	 	Re-instatement If any Finance Party takes any steps to exercise any of its
rights, powers, remedies or discretions pursuant to the Security Documents and the
result shall be adverse to the Finance Parties, the Borrower and the Finance Parties
shall be restored to their former positions as if no such steps had been taken.
	 
	 	18.14	 	No liability None of the Finance Parties, nor any agent or employee of any
Finance Party, nor any receiver and/or manager appointed by the Agent, shall be liable
for any losses which may be incurred in or about the exercise of any of the rights,
powers, discretions or remedies of the Finance Parties under or pursuant to the
Security Documents nor liable as mortgagee in possession for any loss on realisation or
for any neglect or default of any nature for which a mortgagee in possession might
otherwise be liable unless such Finance Party’s action constitutes gross negligence or
wilful misconduct.
	 
	 	18.15	 	Rescission of payments etc. Any discharge, release or reassignment by any of
the Finance Parties of any of the security constituted by, or any of the obligations of
any Security Party contained in, any of the Security Documents shall be (and be deemed
always to have been) void if any act (including, without limitation, any payment) as a
result of which such discharge, release or reassignment was given or made is
subsequently wholly or partially rescinded or avoided by operation of any law, unless
such Finance Party’s action constitutes gross negligence or wilful misconduct.
	 
	 	18.16	 	Subsequent Encumbrances If the Agent receives notice of any subsequent
Encumbrance (other than any Encumbrance permitted by the terms of this Agreement)
affecting any Vessel or all or any part of the Insurances or Requisition Compensation,
the Agent may open a new account in its books for the




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	 	 	 	Borrower. If the Agent does not open a new account, then (unless the Encumbrance is
permitted by the terms of this Agreement or the Agent gives written notice to the
contrary to the Borrower) as from the time of receipt by the Agent of notice of such
subsequent Encumbrance, all payments made to the Agent shall be treated as having
been credited to a new account of the Borrower and not as having been applied in
reduction of the Indebtedness.
	 
	 	18.17	 	Releases If any Finance Party shall at any time in its discretion release any
party from all or any part of any of the Security Documents or from any term, covenant,
clause, condition or obligation contained in any of the Security Documents, the
liability of any other party to the Security Documents shall not be varied or
diminished.
	 
	 	18.18	 	Certificates Any certificate or statement signed by an authorised signatory
of the Agent purporting to show the amount of the Indebtedness (or any part of the
Indebtedness) or any other amount referred to in any of the Security Documents shall,
save for manifest error or on any question of law, be conclusive evidence as against
the Borrower of that amount.
	 
	 	18.19	 	Survival of representations and warranties The representations and warranties
on the part of the Borrower contained in this Agreement shall survive the execution of
this Agreement and the advance of the Facility or any part thereof.
	 
	 	18.20	 	Counterparts This Agreement may be executed in any number of counterparts
each of which shall be original but which shall together constitute the same
instrument.
	 
	 	18.21	 	Third Party Rights Notwithstanding the provisions of the Contracts (Rights of
Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is
not a party to it.






	19	 	Law and Jurisdiction






	 	19.1	 	Governing law This Agreement shall in all respects be governed by and
interpreted in accordance with English law.
	 
	 	19.2	 	Jurisdiction For the exclusive benefit of the Finance Parties, the parties to
this Agreement irrevocably agree that the courts of England are to have jurisdiction to




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	 	 	 	settle any disputes which may arise out of or in connection with this Agreement and
that any Proceedings may be brought in those courts. The Borrower irrevocably
waives any objection which it may now or in the future have to the laying of the
venue of any Proceedings in any court referred to in this Clause, and any claim that
those Proceedings have been brought in an inconvenient or inappropriate forum.
	 
	 	19.3	 	Alternative jurisdictions Nothing contained in this Clause shall limit the
right of the Finance Parties to commence any Proceedings against the Borrower in any
other court of competent jurisdiction nor shall the commencement of any Proceedings
against the Borrower in one or more jurisdictions preclude the commencement of any
Proceedings in any other jurisdiction, whether concurrently or not.
	 
	 	19.4	 	Service of process Without prejudice to the right of the Finance Parties to
use any other method of service permitted by law, the Borrower irrevocably agrees that
any writ, notice, judgment or other legal process shall be sufficiently served on it if
addressed to it and left at or sent by post to the Address for Service, and in that
event shall be conclusively deemed to have been served at the time of leaving or, if
posted, at 9.00 a.m. on the third Business Day after posting by prepaid first class
registered post.
	 
	 	19.5	 	Waiver of trial by jury Each of the parties to this Agreement irrevocably
waive trial by jury in any Proceedings with respect to this Agreement or any other
Security Document.




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





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SCHEDULE 1




The Banks, the Commitments and the Proportionate Shares




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Proportionate
	The Banks	 	The Commitments ($)	 	Shares (%)
	DnB NOR BANK ASA
	 	$	11,000,000	 	 	 	44	%
	THE ROYAL BANK OF
SCOTLAND PLC
	 	$	7,000,000	 	 	 	28	%
	HSH NORDBANK AG
	 	$	7,000,000	 	 	 	28	%






 









 






SCHEDULE 2




The Vessels




	 	 	 	 	 	 	 
	 	 	Country of	 	 	 	 
	Owner	 	Incorporation	 	Vessel	 	Flag
	GulfMark Offshore, Inc.

	 	Delaware, U.S.A.
	 	“Highland Scout”
	 	Panama
	GulfMark Offshore, Inc.

	 	Delaware, U.S.A.
	 	“Highland Guide”
	 	Panama







 











 





SCHEDULE 3




Form of Transfer Certificate





	To: 	 	 DnB NOR Bank ASA as agent (the “Agent”)
	 
	 	 	The Royal Bank of Scotland plc

HSH Nordbank AG

(together the “Banks”)





TRANSFER CERTIFICATE



This transfer certificate relates to a facility agreement (as the same may be from time to time
amended, varied, novated or supplemented, the “Facility Agreement”) dated 1 June 2006 as amended
and restated by a first supplemental agreement dated            2008 whereby an initial reducing
revolving credit facility of up to $25,000,000 was made available to GulfMark Offshore, Inc. by a
group of banks on whose behalf the Agent acts as agent and security trustee.





	1	 	Terms defined in the Facility Agreement shall, subject to any contrary indication, have the
same meanings herein. The terms “Existing Bank” and “Transferee” are defined in the schedule
to this transfer certificate.
	 
	2	 	The Existing Bank (i) confirms that the details in the Schedule hereto under the heading
“Existing Bank’s Commitment” accurately summarises its Commitment in the Facility Agreement
and (ii) requests the Transferee to accept and procure the transfer to the Transferee of the
portion of such Commitment specified in the Schedule hereto by counter-signing and delivering
the Transfer Certificate to the Agent at its address for the service of Communications
specified in the Facility Agreement.
	 
	3	 	The Transferee requests the Agent and the Banks to accept this Transfer Certificate as being
delivered to the Agent and the Banks pursuant to and for the purposes of clause 14.4 of the
Facility Agreement so as to take effect in accordance with the terms thereof on the Transfer
Date or on such later date as may be determined in accordance with the terms thereof.
	 
	4	 	The Transferee confirms that it has received a copy of the Facility Agreement together with
such other information as it has required in connection with this transaction and that




88









 






	 	 	it has not relied and will not in the future rely on the Existing Bank or any other party to
the Facility Agreement to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and further agrees
that it has not relied and will not rely on the Existing Bank or any other party to the
Facility Agreement to access or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Borrower or any other party to
the Facility Agreement.
	 
	5	 	Execution of this Transfer Certificate by the Transferee constitutes its representation to
the Transferor and all other parties to the Facility Agreement that it has power to become a
party to the Facility Agreement as a Bank (as defined in the Facility Agreement) on the terms
herein and therein set out and has taken all steps to authorise execution and delivery of this
Transfer Certificate.
	 
	6	 	The Transferee undertakes with the Existing Bank and each of the other parties to the
Facility Agreement that it will perform in accordance with their terms all those obligations
which by the terms of the Facility Agreement will be assumed by it after delivery of this
Transfer Certificate to the Agent and the Banks and satisfaction of the conditions (if any)
subject to which the Transfer Certificate is expressed to take effect.
	 
	7	 	The Existing Bank makes no representation or warranty and assumes no responsibility with
respect to the legality, validity, effectiveness, adequacy or enforceability of the Facility
Agreement or any document relating thereto and assumes no responsibility for the financial
condition of the Borrower or for the performance and observance by the Borrower of any of
their obligations under the Facility Agreement or any document relating thereto and any and
all such conditions and warranties, whether express or implied by law or otherwise, are hereby
excluded.
	 
	8	 	The Existing Bank gives notice that nothing in this transfer certificate or in the Facility
Agreement (or any document relating thereto) shall oblige the Existing Bank to (i) accept a
re-transfer from the Transferee of the whole or any part of its rights, benefits and/or
obligations under the Facility Agreement transferred pursuant hereto or (ii) support any
losses directly or indirectly sustained or incurred by the Transferee for any reason
whatsoever including, without limitation, the non-performance by the Borrower or any other
party to the Facility Agreement (or any document relating thereto) of its obligations




89









 






	 	 	under any such document. The Transferee acknowledges the absence of any such obligation as
is referred to in (i) or (ii) above.






	9	 	This Transfer Certificate and the rights and obligations of the parties hereunder shall be
governed by and interpreted in accordance with English law.
	 
	10	 	          





THE SCHEDULE





	1	 	Existing Bank:
	 
	2	 	Transferee:
	 
	3	 	Transfer Date:
	 
	4	 	Existing Bank’s Commitment1:       Portion Transferred





	 	 	 	 	 	 	 	 	 	 	 
	[Transferor Bank]

	 	 
	 	[Transferee Bank]
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 






DnB NOR Bank ASA



As agent for and on behalf of itself,

the Borrower and the other Finance Parties (with the exception of the Banks):-




	 	 	 	 	 
	 	 	 
	By:  	
 	 	 
	 


Date: [                                        ]




	 	 	 	 	 
	The Royal Bank of Scotland plc

 	 	 
	By:  	
 	 	 
	 



Date: [                                        ]




	 	 	 	 	 
	HSH Nordbank AG

 	 	 
	By:  	
 	 	 
	 



Date: [                                        ]






 




			
	1	 	Details of the Bank’s Commitment should not be
completed after the Termination Date.




90









 










SCHEDULE 4




Form of Drawdown Notice





	To: DnB NOR Bank ASA
	 
	From: GULFMARK OFFSHORE, INC.





[Date]




Dear Sirs,




Drawdown Notice




     We refer to the Revolving Credit Facility Agreement dated 1 June 2006 as amended and restated
by a first supplemental agreement dated                      2008 made between, amongst others,
ourselves and yourselves (“the Agreement”).



     Words and phrases defined in the Agreement have the same meaning when used in this Drawdown
Notice.



     Pursuant to Clause 2.3 of the Agreement, we irrevocably request that the Banks advance a
Drawing of [          ] to us on                      200[     ], which is a Business Day, by paying the
amount of the Drawing to [                                        ].



     We warrant that the representations and warranties contained in Clause 4 of the Agreement
other than those in clause 4.9 [and clause 4.17]2 are true and correct at the date of
this Drawdown Notice and will be true and correct on                      200[     ]; that no Event of Default
nor Potential Event of Default has occurred and is continuing, and that no Event of Default or
Potential Event of Default will result from the advance of the Drawing requested in this Drawdown
Notice.



     [We further confirm and certify that no material adverse change has occurred since the
Execution Date in the business, assets, operations, condition (financial or otherwise) or prospects





 




			
	2	 	To be in subsequent Drawdown Notices only.




91









 









of the Borrower or its subsidiaries or in the facts and information regarding such entities as
represented to date3].




     We select the period of [                    ] months as the [first] Interest Period in respect of the
Drawing.



	 	 	 	 	 
	 	Yours faithfully

 	 
	 	
 	 
	 	For and on behalf of 	 
	 	GULFMARK  OFFSHORE, INC. 	 
	 









 




			
	3	 	To be in first Drawdown Notice only.




92









 










SCHEDULE 5




Calculation of the Mandatory Cost





	1	 	The Mandatory Cost is an addition to the interest rate to compensate the Banks for the cost
of compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.
	 
	2	 	On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall
calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Bank, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Banks’ Additional Cost Rates (weighted in proportion to the
percentage participation of each Bank in the Loan) and will be expressed as a percentage rate
per annum.
	 
	3	 	The Additional Cost Rate for any Bank lending from a Facility Office in a Participating
Member State will be the percentage notified by that Bank to the Agent. This percentage will
be certified by that Bank in its notice to the Agent to be its reasonable determination of the
cost (expressed as a percentage of that Bank’s participation in all loans made from that
Facility Office) of complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that Facility Office.
	 
	4	 	The Additional Cost Rate for any Bank lending from a Facility Office in the United Kingdom
will be calculated by the Agent as follows:





	 	 	 	 	 
	  
	 	E x 0.01
 

300

	 	 per
cent. per annum.







	 	 	Where E is the rate of charge payable by a Bank to the
Financial Services Authority under the Fees Rules in respect of
the relevant financial year of the Financial Services Authority
(calculated for this purpose by the Agent as being the average
of the Fee Tariffs applicable to that Bank for that financial
year).
	 
	5	 	For the purposes of this Schedule:






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




93









 






	 	(b)	 	“Facility Office” means the office notified by a Bank to the Agent in writing
on or before the date it becomes a Bank as the office through which it will perform its
obligations under the Agreement;
	 
	 	(c)	 	“Fee Rules” means the rules on periodic fees contained in the FSA Supervision
Manual or such other law or regulation as may be in force from time to time in respect
of the payment of fees for the acceptance of deposits;
	 
	 	(d)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fee Rules but taking into account any applicable discount
rate); and
	 
	 	(e)	 	“Participating Member State” means any member state of the European Communities
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Union relating to European Monetary Union;
	 
	 	(f)	 	“Parties” means any party to the Agreement, including its successors in title
permitted assigns and permitted transferees; and
	 
	 	(g)	 	“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.






	6	 	If requested by the Agent, each Bank shall, as soon as practicable after publication by the
Financial Services Authority, supply to the Agent, the rate of charge payable by that Bank to
the Financial Services Authority pursuant to the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for this purpose by that Bank
as being the average of the Fee Tariffs applicable to that Bank for that financial year).
	 
	7	 	Each Bank shall supply any information required by the Agent for the purpose of calculating
its Additional Cost Rate. In particular, but without limitation, each Bank Shall supply the
following information on or prior to the date on which it becomes a Bank:






	 	(a)	 	the jurisdiction of its Facility Office; and
	 
	 	(b)	 	any other information that the Agent may reasonably require for such purpose.






	 	 	Each Bank shall promptly notify the Agent of any change to the information provided by it
pursuant to this paragraph.




94









 






	8	 	The percentages of each Bank for the purpose of E above shall be determined by the Agent
based upon the information supplied to it pursuant to paragraphs 6 and 7 above and on the
assumption that, unless the Bank notifies the Agent to the contrary, each Bank’s obligations
in relation to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as
in its Facility Office.
	 
	9	 	The Agent shall have no liability to any person if such determination results in an
Additional Cost Rate which over or under compensates any Bank and shall be entitled to assume
that the information provided by any Bank pursuant to paragraphs 3, 6 and 7 above is true and
correct in all respects.
	 
	10	 	The Agent shall distribute the additional amounts received as a result of the Mandatory Cost
to the Banks on the basis of the Additional Cost Rate for each Bank based on the information
provided by each Bank pursuant to paragraphs 3, 6 and 7 above.
	 
	11	 	Any determination by the Agent pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to a Bank shall, in the absence
of manifest error, be conclusive and binding on all Parties.
	 
	12	 	The Agent may from time to time, after consultation with the Borrower and the Banks determine
and notify to all Parties any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements from time to time
imposed by the Bank of England, the Financial Services Authority or the European Central Bank
(or, in any case, any other authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and binding on all
Parties.




95









 











SCHEDULE 6




Form of Compliance Certificate





	To: 	 	 DnB NOR Bank ASA (the “Agent”)
	 
	From: 	 	 GulfMark Offshore, Inc.





Date: [Ÿ]




Dear Sirs,



We refer to an agreement (the “Agreement”) dated 1 June 2006 as amended and restated by a first
supplemental agreement dated         2008 and made between (inter alia) (1) ourselves as
borrower (2) the banks and financial institutions listed in Schedule 1 of the Agreement as banks
and (3) the Agent as the agent and security trustee (as from time to time amended, varied, novated
or supplemented).



Terms defined or construed in the Agreement have the same meanings and constructions in this
Certificate.



We attach the relevant calculation details applicable on the last day of our financial
[year][quarter] ending [Ÿ] (the “Relevant Period”) which confirm that:-





	1.	 	Our Total Shareholder Equity is [          ], and our Total Assets are [          ]. As such
the ratio of Total Shareholder Equity to Total Assets is [          ].
	 
	2.	 	Our EBITDA is [          ] and our Interest Expense is [          ]. As such our ratio of
EBITDA to Interest Expense is [          ].
	 
	3.	 	We attach Valuations for each of the Vessels showing an aggregate Valuation of [          ].
As such the aggregate of:






	 	(a)	 	the Valuations of the Vessels; and
	 
	 	(b)	 	the value of any additional security acceptable to the Agent in its absolute
discretion for the time being provided to the Banks (or to the Agent on their behalf)
pursuant to Clause 10.2.16,





96









 










	 	 	 	 	 
	 	 	 
	Signed:  	
 	 	 
	 	Duly authorised representative of


GULFMARK OFFSHORE, INC. 	 	 



97









 






	 	 	 	 	 



SCHEDULE 7




Form of Issue Request





	To: 	 	 DnB NOR Bank ASA
	 
	From: 	 	 GULFMARK OFFSHORE, INC.





[Date]




Dear Sirs,




Issue Request



We refer to the Loan and LC Facility Agreement dated 1 June 2006 as amended and restated by a first
supplemental agreement dated                      2008 made between ourselves and yourselves (the
“Agreement”).



Words and phrases defined in the Agreement have the same meaning when used in this Drawdown Notice.



Pursuant to Clause 2.11 of the Agreement, we irrevocably request that you issue an LC on                     
200     , which is a Business Day, in the sum of [                                        ] in respect
of [                                        ].



We warrant that the representations and warranties contained in clause 4 of the Agreement other
than those in Clause 4.9 [and Clause 4.17]4 are true and correct at the date of this
Issue Request and will be true and correct on                      200     , that no Event of
Default has occurred and is continuing, and that no Event of Default will result from the issue of
the LC requested in this Issue Request.






	 	 	 	 	 
	 	Yours faithfully

 	 
	 	
 	 
	 	For and on behalf of 	 
	 	GULFMARK  OFFSHORE, INC. 	 
	 








 




			
	4	 	To be in subsequent Issue Requests only




98









 










	 	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	 
	duly authorised for and on behalf

	 	 	)	 	 	 
	of DnB NOR Bank ASA

	 	 	)	 	 	 
	(as Agent, MLA, Issuer and Bank)

	 	 	)	 	 	 /s/ Ian Mace                    
	in the presence of:-  /s/ Angelique Kounis                    

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	 
	duly authorised for and on behalf

	 	 	)	 	 	 
	of THE ROYAL BANK OF SCOTLAND PLC

	 	 	)	 	 	 
	(as Bank)

	 	 	)	 	 	 /s/ Ian Mace                    
	in the presence of:-  /s/ Angelique Kounis                    

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	 
	duly authorised for and on behalf

	 	 	)	 	 	 
	of HSH NORDBANK AG

	 	 	)	 	 	 
	(as Bank)

	 	 	)	 	 	 /s/ Ian Mace                    
	in the presence of:-  /s/ Angelique Kounis                    

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	 
	duly authorised for and on behalf

	 	 	)	 	 	 
	of GULFMARK OFFSHORE, INC.

	 	 	)	 	 	 /s/ David Wilson          
	in the presence of:-  /s/ Angelique Kounis                    

	 	 	)