exv10w26






Exhibit 10.26




DATED 5 JUNE 2008




GULF MARINE FAR EAST PTE. LTD.

(as borrower)




— and —




DnB NOR Bank ASA, Singapore branch

and others

(as banks)




— and —




DnB NOR Bank ASA

(as mandated lead arranger)




— and —




DnB NOR Bank ASA, Singapore branch

(as agent)




— and —




DnB NOR Bank ASA, Bergen branch

(as security trustee)




 






US$60,000,000 SECURED

REDUCING REVOLVING LOAN

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 its Purpose
	 	 	21	 
	 
	 	 	 	 	 	 
	3

	 	Conditions Precedent and Subsequent
	 	 	28	 
	 
	 	 	 	 	 	 
	4

	 	Representations and Warranties
	 	 	34	 
	 
	 	 	 	 	 	 
	5

	 	Repayment, Prepayment and Currency Option
	 	 	38	 
	 
	 	 	 	 	 	 
	6

	 	Interest
	 	 	41	 
	 
	 	 	 	 	 	 
	7

	 	Fees
	 	 	43	 
	 
	 	 	 	 	 	 
	8

	 	Security Documents
	 	 	43	 
	 
	 	 	 	 	 	 
	9

	 	Agency and Trust
	 	 	44	 
	 
	 	 	 	 	 	 
	10

	 	Covenants
	 	 	54	 
	 
	 	 	 	 	 	 
	11

	 	Earnings
	 	 	61	 
	 
	 	 	 	 	 	 
	12

	 	Events Of Default
	 	 	61	 
	 
	 	 	 	 	 	 
	13

	 	Set-Off and Lien
	 	 	65	 
	 
	 	 	 	 	 	 
	14

	 	Assignment and Sub-Participation
	 	 	67	 
	 
	 	 	 	 	 	 
	15

	 	Payments, Mandatory Prepayment, Reserve Requirements and Illegality
	 	 	71	 
	 
	 	 	 	 	 	 
	16

	 	Communications
	 	 	75	 
	 
	 	 	 	 	 	 
	17

	 	General Indemnities
	 	 	76	 
	 
	 	 	 	 	 	 
	18

	 	Miscellaneous
	 	 	79	 
	 
	 	 	 	 	 	 
	19

	 	Law and Jurisdiction
	 	 	83	 
	 
	 	 	 	 	 	 
	SCHEDULE 1	 	 	85	 
	The Banks, the Commitments and the Proportionate Shares	 	 	85	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SCHEDULE 2	 	 	86	 
	Part I	 	 	86	 
	The Mortgaged Vessels	 	 	86	 
	 
	 	 	 	 	 	 
	Part II	 	 	87	 
	The Newbuildings	 	 	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	 






 









 






LOAN FACILITY AGREEMENT




Dated: June 5 2008




BETWEEN:-





	(1)	 	GULF MARINE FAR EAST PTE. LTD., a company incorporated according to the law of Singapore
whose principal place of business is at Loyang Crescent Building No. 200, SOPS Crescent,
Singapore 508988 (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 agent through its office at 8 Shenton Way #48-02, Singapore 068811
(in that capacity the “Agent”); and
	 
	(5)	 	DnB NOR Bank ASA acting as security trustee through its office at Lars Hillesgate 30, PO Box
7100, NO-5020 Bergen, Norway (in that capacity the “Security Trustee”).





WHEREAS:-



Each of the Banks has agreed to advance to the Borrower its respective Commitment of an aggregate
principal amount not exceeding sixty million Dollars ($60,000,000) to assist the Borrower in
financing various instalments under the Building Contracts and thereafter for the general corporate
purposes of the Borrower.



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
Guarantor 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
relevant Owner and the Security Trustee 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.
	 
	 	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




2









 






	 		 	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	 	“Builder” means the builder of the relevant Newbuilding detailed in Schedule
2 Part II.
	 
	 	1.1.14	 	“Building Contracts” means the building contracts pursuant to which the
Newbuildings are being constructed as are more particularly described in
Schedule 2 Part II (each a “Building Contract”).
	 
	 	1.1.15	 	“Business Day” means a day (other than a Saturday or Sunday) on which banks
are open for general business in London, New York City, Singapore and Bergen
and which is a TARGET Day.
	 
	 	1.1.16	 	“Commencement Date” means 1 June 2006.




3









 












	 	1.1.17	 	“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.
	 
	 	1.1.18	 	“Commitment Commission” means the commitment commission to be paid by the
Borrower to the Agent on behalf of the Banks pursuant to Clause 7.
	 
	 	1.1.19	 	“Commitment Termination Date” means the date falling one month prior to the
Termination Date.
	 
	 	1.1.20	 	“Communication” means any notice, approval, demand, request or other
communication from one party to this Agreement to any other party to this
Agreement.
	 
	 	1.1.21	 	“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).
	 
	 	1.1.22	 	“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).
	 
	 	1.1.23	 	“Compliance Certificate” means a certificate to be delivered by the Guarantor
to the Agent substantially in the form of Schedule 6.
	 
	 	1.1.24	 	“Construction Period” means the period beginning on the first Drawing and
continuing until the earlier of (i) the date that the last of the Newbuildings
has been delivered to the Borrower, (ii) 31 December 2008, or (iii) such later
date as may be agreed in writing by the Banks.
	 
	 	1.1.25	 	“Currency of Account” means, in relation to any payment to be made to a
Finance Party pursuant to any of the Security Documents, the




4









 






	 	 	 	currency in which that payment is required to be made by the terms of the
relevant Security Document.






	 	1.1.26	 	“Default Rate” means the rate which is the aggregate of LIBOR, any Mandatory
Cost, the Margin and two per centum (2%) per annum.
	 
	 	1.1.27	 	“Delivery Date” means the date of actual delivery of the relevant Newbuilding
to the Borrower by the Builder under a Building Contract.
	 
	 	1.1.28	 	“Delivery Drawing” means a Drawing made pursuant to a Building Contract upon
the delivery of a Newbuilding to the Borrower.
	 
	 	1.1.29	 	“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
three (3) Business Days’ prior written notice to the Borrower; and
	 
	 	(c)	 	each Advance Date.






	 	1.1.30	 	“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.
	 
	 	1.1.31	 	“Dollars” “US$” and “$” each means available and freely transferable and
convertible funds in lawful currency of the United States of America.
	 
	 	1.1.32	 	“Drawdown Notice” means a notice complying with Clause 2.3 in the form set
out in Schedule 4.
	 
	 	1.1.33	 	“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.




5









 












	 	1.1.34	 	“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 an Owner 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.
	 
	 	1.1.35	 	“Earnings Account” means a bank account to be opened in the name of the
Borrower with the Agent and designated “Vessel Net Earnings Account”.
	 
	 	1.1.36	 	“EBITDA” means, for any twelve month period ending on a Determination Date,
the consolidated profit on ordinary activities of the Group before Taxes:






	 	(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.






	 	1.1.37	 	“Encumbrance” means any mortgage, charge, pledge, lien, assignment,
hypothecation, preferential right, option, title retention or trust




6









 






	 	 	 	arrangement or any other agreement or arrangement which, in any of the
aforementioned instances, has the effect of creating security.






	 	1.1.38	 	“Environmental Affiliate” means an agent or employee of an Owner or a person
in a contractual relationship with an Owner in respect of the Vessel owned by
it (including without limitation, the operation of or the carriage of cargo of
such Vessel).
	 
	 	1.1.39	 	“Environmental Approvals” means any present or future permit, licence,
approval, ruling, variance, exemption or other authorisation required under the
applicable Environmental Laws.
	 
	 	1.1.40	 	“Environmental Claim” means any and all enforcement, clean-up, removal,
administrative, governmental, regulatory or judicial actions, 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.
	 
	 	1.1.41	 	“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




7









 






	 	 	 	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.






	 	1.1.42	 	“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;
	 
	 	(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.






	 	1.1.43	 	“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.
	 
	 	1.1.44	 	“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,





8









 











	 	 	 	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.
	 
	 	1.1.45	 	“euro” and “€” means the single currency of the Participating Member States.
	 
	 	1.1.46	 	“Event of Default” means any of the events set out in Clause 12.2.
	 
	 	1.1.47	 	“Execution Date” means the date on which this Agreement is executed by each
of the parties hereto.
	 
	 	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.
	 
	 	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 thirty nine million four hundred
thousand Dollars ($39,400,000), 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 Security Trustee, the MLA and the
Agent.




9









 












	 	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);
	 
	 	(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 Commencement 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 Guarantor and each of its Subsidiaries.




10









 












	 	1.1.58	 	“Guarantee” means the guarantee and indemnity to be made by the Guarantor in
favour of the Security Trustee referred to in Clause 8.1.3.
	 
	 	1.1.59	 	“Guarantor” means 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.
	 
	 	1.1.60	 	“IFRS” means International Financial Reporting Standards issued and/or
adopted by the International Accounting Standards Board.
	 
	 	1.1.61	 	“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.
	 
	 	1.1.62	 	“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.
	 
	 	1.1.63	 	“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.
	 
	 	1.1.64	 	“Interest Payment Date” means each date for the payment of interest in
accordance with Clause 6.




11









 












	 	1.1.65	 	“Interest Period” means each interest period selected by the Borrower or
agreed by the Banks pursuant to Clause 6.
	 
	 	1.1.66	 	“ISM Code” means the International Ship Management Code for the Safe
Operation of Ships and for Pollution Prevention.
	 
	 	1.1.67	 	“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.
	 
	 	1.1.68	 	“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.
	 
	 	1.1.69	 	“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	 	“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.




12









 












	 	1.1.71	 	“Majority Banks” means any one or more Banks whose combined Proportionate
Shares exceed sixty six and two thirds per centum (662/3%).
	 
	 	1.1.72	 	“Manager” means GulfMark Offshore, Inc. or any entity within the Group.
	 
	 	1.1.73	 	“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).
	 
	 	1.1.74	 	“Margin” shall be calculated on, and effective from each Determination Date
in accordance with the following grid based on the ratio of (a) the Guarantor’s
average Total Debt over the twelve (12) month period terminating on the
relevant Determination Date to (b) the Guarantor’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.







	 	1.1.75	 	“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;




13









 












	 	(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.






	 	1.1.76	 	“Material Subsidiary” means any Subsidiary of the Guarantor 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.
	 
	 	1.1.77	 	“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) sixty million Dollars ($60,000,000) and subject to any
reductions effected in accordance with Clauses 2.4, 15.7 and 15.8.
	 
	 	1.1.78	 	“Mortgaged Vessels” means, subject to Clause 2.10, those vessels listed in
Schedule 2 Part I (each a “Mortgaged Vessel”).
	 
	 	1.1.79	 	“Mortgages” means together the first priority statutory ship mortgages or
first preferred naval mortgages (as the case may be) together with collateral
deed of covenants thereto over each of the Vessels made or to be made between
the Owner and the Security Trustee referred to in Clause 8.1.1 (each a
“Mortgage”).
	 
	 	1.1.80	 	“Newbuildings” means, subject to Clause 2.10, those vessels listed in
Schedule 2 Part II (each a “Newbuilding”).
	 
	 	1.1.81	 	“Net Earnings” means the Earnings less any Operating Commissions.
	 
	 	1.1.82	 	“Optional Currency” means any of Dollars, Sterling and Euro.




14









 












	 	1.1.83	 	“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.
	 
	 	1.1.84	 	“Owners” means, subject to Clause 2.10, each of the companies set out in
Schedule 2 Part I who either are or, on the first Drawing, will be the owner of
a Vessel, and each of the companies set out in Schedule 2 Part II who will
following the relevant Delivery Date be the Owner of a Newbuilding.
	 
	 	1.1.85	 	“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.
	 
	 	1.1.86	 	“Party” means a party to this Agreement.
	 
	 	1.1.87	 	“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.
	 
	 	1.1.88	 	“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.
	 
	 	1.1.89	 	“Pre-Approved Classification Society” means any of Det norske Veritas, Lloyds
Register of Shipping, American Bureau of Shipping (ABS), Germanischer Lloyd or
Bureau Veritas.
	 
	 	1.1.90	 	“Proceedings” means any suit, action or proceedings begun by any of the
Finance Parties arising out of or in connection with the Security Documents.
	 
	 	1.1.91	 	“Proportionate Share” means, for each Bank, the percentage that its
Commitment bears to the aggregate Commitments of all Banks from




15









 






	 	 	 	time to time, being initially the percentage indicated against the name of
that Bank in Schedule 1.






	 	1.1.92	 	“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.
	 
	 	1.1.93	 	“Reference Banks” means the office of DnB NOR Bank ASA at 8 Shenton Way
#48-02, Singapore 068811, The Royal Bank of Scotland plc at 1 Albyn Place,
Aberdeen AB10 1BR, Scotland and HSH Nordbank AG, Singapore branch at 3 Temasek
Avenue, #33-00 Centennial Tower, Singapore 039190 or such other banks as may be
appointed by the Agent in consultation with the Borrower.
	 
	 	1.1.94	 	“Requisition Compensation”, in relation to a Vessel, means all compensation
or other money which may from time to time be payable to an Owner 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).
	 
	 	1.1.95	 	“Screen Rate” means:






	 	(a)	 	in relation to LIBOR, the British
Bankers’ Association Interest Settlement Rate for the relevant
currency and period; and
	 
	 	(b)	 	in relation to EURIBOR, the percentage
rate per annum determined by the Banking Federation of the European
Union for the relevant period,




16









 












	 	 	 	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.
	 
	 	1.1.96	 	“Security Documents” means this Agreement, the Assignments, the Mortgages,
the Guarantee 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.
	 
	 	1.1.97	 	“Security Parties” means, at any relevant time, the Borrower, the Owners, the
Guarantor 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.
	 
	 	1.1.98	 	“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.
	 
	 	1.1.99	 	“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.
	 
	 	1.1.100	 	“Sterling” means the lawful currency of England.
	 
	 	1.1.101	 	“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.
	 
	 	1.1.102	 	“Subsidiary” means a subsidiary undertaking, as defined in section 736
Companies Act 1985, or any analogous definition under any other relevant system
of law.
	 
	 	1.1.103	 	“TARGET” means the Trans-European Automated Real-time Gross Settlement
Express Transfer payment system.




17









 












	 	1.1.104	 	“TARGET Day” means any day on which TARGET is open for the settlement of
payments in euro.
	 
	 	1.1.105	 	“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.
	 
	 	1.1.106	 	“Termination Date” means 1 June 2013.
	 
	 	1.1.107	 	“Total Assets” means the amount which is equal to the total consolidated
assets of the Guarantor as shown in the Guarantor’s latest audited consolidated
balance sheet less the goodwill (if any) of the Guarantor as shown in the
Guarantor’s latest audited balance sheet.
	 
	 	1.1.108	 	“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 Guarantor; and
	 
	 	(b)	 	the amount of any liability in respect of
any lease or hire purchase contract entered into by the Guarantor or
any of its Subsidiaries which would, in accordance with GAAP, be
treated as a finance or capital lease.






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






	 	(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




18









 












	 	(c)	 	the capture, seizure, arrest, detention or
confiscation of that Vessel, unless the Vessel is released and
returned to the possession of its Owner within thirty (30) days after
the capture, seizure, arrest, detention or confiscation in question.






	 	1.1.110	 	“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.
	 
	 	1.1.111	 	“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 and the Banks (other than the transferor
Bank) as is contemplated in Clause 14.






	 	1.1.112	 	“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.
	 
	 	1.1.113	 	“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.
	 
	 	1.1.114	 	“Trust Property” means:-






	 	(a)	 	all benefits derived by the Security
Trustee from Clause 8 and the covenants contained in Clause 9.3; and




19









 












	 	(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
Security Trustee.
	 
	 	1.1.115	 	“Valuation” means either (i) 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, or (ii) the commercial invoice
evidencing the purchase price in respect of either a Newbuilding or of a Vessel
that was delivered to the Owner no more than six (6) months prior to the date
of this Agreement.
	 
	 	1.1.116	 	“Vessels” means, subject to Clause 2.10, those vessels listed in Schedule 2
Part I and Schedule 2 Part II (if and to the extent each Newbuilding has at any
relevant time been delivered to the Borrower) (each a “Vessel”).






	 	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;




20









 












	 	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:






	 	(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 its Purpose






21











 






	 	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 other than Delivery Drawings), or Clause 3.3 (in respect of all
Delivery 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 five 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 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.





22









 





	 	 	 	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 sixty million Dollars ($60,000,000)
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 five million
one hundred and fifty thousand Dollars ($5,150,000), 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)
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




23









 






	 	 	 	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 seventeen million
five hundred thousand Dollars ($17,500,000) 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 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




24









 












	 	(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 seventeen million five hundred
thousand Dollars ($17,500,000) 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 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




25









 












	 	(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 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




26









 






	 	 	 	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	 	Substitute Vessels It is agreed and acknowledged that the Borrower may
request amendments to the list of Vessels set out at Schedule 2 Part I and Schedule 2
Part II. Any such request shall be considered by the Banks acting reasonably, and
subject to:






	 	2.10.1	 	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;






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




27









 






	 	 	 	the Banks shall consent to such substitutions and the definitions of “Vessels” and
“Owners” shall be amended accordingly.






	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 the Borrower shall 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 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.




28









 






	 	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.
	 
	 	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 Guarantor for the year
ended 2007.
	 
	 	3.1.12	 	Evidence of Owner’s title Evidence that on the date of the Drawing (i) the
Mortgaged Vessels are registered under the flag stated in Schedule 2 Part I in
the ownership of the relevant Owners and (ii) the relevant Mortgages will be
capable of being immediately registered against the Mortgaged 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




29









 






	 	 	 	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 Mortgaged 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	 	Ownership Structure Evidence satisfactory to the Agent that the Borrower is
a wholly owned subsidiary of the Guarantor.
	 
	 	3.1.17	 	Supplemental Agreement Evidence satisfactory to the Agent that clause 4 of
the supplemental agreement to the loan agreement dated 1 June 2006 (the “Other
Loan Agreement”) between the Guarantor as borrower, the banks and financial
institutions listed in schedule 1 of the Other Loan Agreement as lenders, and
DnB NOR Bank ASA as the mandated lead arranger, the issuer, the agent and the
security agent, has become effective and all of the conditions to the Effective
Date (as defined therein) have been satisfied together with evidence
satisfactory to the Agent that the “Facility Outstandings” (as defined in the
Other Loan Agreement) will be reduced to a maximum of twenty five million
Dollars ($25,000,000) on or before the first Drawing under this Agreement.






	 	3.2	 	Conditions Precedent — Subsequent Drawings (other than Delivery Drawings)
Before any Bank shall have any obligation to advance any subsequent Drawings (other
than Delivery Drawings) under the Facility, 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




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	 	 	 	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.






	 	3.3	 	Conditions Precedent — Delivery Drawings






	 	3.3.1	 	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 Delivery Date 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.
	 
	 	3.3.2	 	Vessel documents Photocopies, certified as true, accurate and
complete by a director or the secretary of the Borrower, of:






	 	(i)	 	the builder’s certificate and/or bill of sale
transferring title in the relevant Newbuilding to the Borrower free of
all encumbrances, maritime liens or other debts;
	 
	 	(ii)	 	the protocol of delivery and acceptance
evidencing the unconditional physical delivery of the relevant
Newbuilding by the Builder to the Borrower pursuant to the relevant
Building Contract;
	 
	 	(iii)	 	the commercial invoice issued by the Builder
in respect of the final contract price of the relevant Newbuilding;
	 
	 	(iv)	 	the relevant Newbuilding’s current Certificate
of Financial Responsibility issued pursuant to the United States Oil
Pollution Act 1990;
	 
	 	(v)	 	the relevant Newbuilding’s current SMC;
	 
	 	(vi)	 	the ISM Company’s current DOC;




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	 	(vii)	 	the relevant Newbuilding’s current ISSC;
	 
	 	(viii)	 	the relevant Newbuilding’s current IAPPC;






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




	 	3.3.3	 	Evidence of Borrower’s title Evidence that on the Delivery
Date (i) the relevant Newbuilding will be at least provisionally registered
under the flag stated in Schedule 2 Part II, or an alternative flag acceptable
to the Agent in its absolute discretion, in the ownership of the Borrower and
(ii) the Mortgage will be capable of being registered against the relevant
Newbuilding with first priority.
	 
	 	3.3.4	 	Evidence of insurance Evidence that the relevant Newbuilding
is 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 (if required by the Agent) the written approval of the Insurances
by an insurance adviser appointed by the Agent.
	 
	 	3.3.5	 	Confirmation of class An interim Certificate of Confirmation
of Class for hull and machinery confirming that the relevant Newbuilding is
classed with the highest class applicable to vessels of her type with Lloyd’s
Register of Shipping or such other classification society as may be acceptable
to the Agent.
	 
	 	3.3.6	 	Valuation A Valuation of the relevant Newbuilding.
	 
	 	3.3.7	 	Security Documents The Mortgage and the Assignment for the
relevant Newbuilding together with all other documents required by any of them,
including, without limitation, all notices of assignment and/or charge and
evidence that those notices will be duly acknowledged by the recipients.
	 
	 	3.3.8	 	Legal Opinions Confirmation satisfactory to the Agent that all
legal opinions required by the Agent on behalf of the Finance Parties will be
given substantially in the form required by the Agent on behalf of the Finance
Parties.
	 
	 	3.3.9	 	Drawdown Notice A duly completed Drawdown Notice.




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	 	3.3.10	 	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.






	 	3.4	 	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 3.4.3 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 or the relevant Delivery Date (as the case may be) the following
additional documents and evidence:-






	 	3.4.1	 	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.
	 
	 	3.4.2	 	Evidence of Owner’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 relevant
Owner (b) the Mortgages have been registered with first priority against the
Mortgaged Vessels or the relevant Newbuilding (as the case may be, following
delivery to the Borrower) and (c) there are no further Encumbrances registered
against the Vessels.






	 	3.5	 	No waiver If the Banks in their sole discretion agree to advance any part of
the Facility to the Borrower before all of the documents and evidence required by
Clause 3.1 or Clause 3.2 or Clause 3.3 (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 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 or Clause 3.3 (as the case may be).
	 
	 	3.6	 	Form and content All documents and evidence delivered to the Agent pursuant to
this Clause shall:-




33









 












	 	3.6.1	 	be in form and substance reasonably acceptable to the Agent;
	 
	 	3.6.2	 	be accompanied, if required by the Agent, by translations into
the English language, certified in a manner acceptable to the Agent acting
reasonably;
	 
	 	3.6.3	 	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, 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 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.




34









 












	 	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.
	 
	 	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.




35









 






	 	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.
	 
	 	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 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.




36









 






	 	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 Accounting and Corporate
Regulatory Authority in Singapore and the maritime registry in Panama to the extent
applicable) or that any stamp, registration or similar tax be paid on or in relation to
any of the Security Documents.
	 
	 	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






	 	4.19.1	 	The Borrower is a wholly owned subsidiary of the Guarantor; and
	 
	 	4.19.2	 	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.




37









 












	 	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.






	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 may be
agreed by the Agent), each such prepayment to be of a minimum amount of five million
Dollars ($5,000,000), 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




38









 






	 	 	 	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 (Singapore time) 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.
	 
	 	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:




39









 












	 	(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 three (3) 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:






	 	(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




40









 







	 	 	 	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 three
(3) Business Days before the first day of the second Interest Period) and (subject to
Clause 5.9.2):






	 	(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 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.






41












 






	 	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) 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 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




42









 






	 	 	 	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 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 or 11.00 am (Brussels time) in respect of
EURIBOR, the applicable LIBOR or EURIBOR 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 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 the Execution Date 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	 	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 Security Trustee or cause to be executed and delivered to the
Security Trustee, on or before the first Advance Date (or the relevant Delivery Date in
the case of the Newbuildings), the following Security Documents in such forms and
containing such terms and conditions as the Agent requires:-






	 	8.1.1	 	the Mortgages the first priority statutory ship mortgages or
first preferred naval mortgages (as the case may be) together with collateral




43









 






	 	 	 	deeds of covenant thereto over each of the Vessels executed by the relevant
Owner.






	 	8.1.2	 	the Assignments the assignments of the Insurances and
Requisition Compensation in respect of each of the Vessels executed by the
relevant Owner.
	 
	 	8.1.3	 	the Guarantee the guarantee and indemnity of the Guarantor
in favour of the Agent.






	9	 	Agency and Trust






	 	9.1	 	Appointment Each of the Banks and the MLA appoints the Agent its agent for the
purpose of administering the Facility and each of the Banks, the MLA and the Agent
appoints the Security Trustee to act as its security agent for the purposes of the
Security Documents.
	 
	 	9.2	 	Each Bank and the MLA authorises the Agent and each Bank, the MLA and the Agent
authorises the Security Trustee and each of 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.
	 
	 	9.3	 	Authority Each of the Finance Parties irrevocably authorises the Agent and the
Security Trustee, 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):-






	 	9.3.1	 	to give or withhold any consents or approvals; and
	 
	 	9.3.2	 	to exercise, or refrain from exercising, any discretions; and
	 
	 	9.3.3	 	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




44









 






	 	 	 	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.






	 	9.4	 	Trust The Security Trustee agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this Clause, the Security
Trustee holds the Trust Property on trust for the Banks, in accordance with their
respective Proportionate Shares. Each of the Finance Parties agrees that the
obligations, rights and benefits vested in the Security Trustee in its capacity as
security trustee shall be performed and exercised in accordance with this Clause. The
Security Trustee 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:-






	 	9.4.1	 	the Security Trustee (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 Security Trustee 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 to the Security
Documents other than as a result of its gross negligence or wilful misconduct;
and
	 
	 	9.4.2	 	the Finance Parties acknowledge that the Security Trustee
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
	 
	 	9.4.3	 	the Security Trustee 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.




45









 












	 	9.5	 	Limitations on authority Except with the prior written consent of each of the
Banks, the Agent and/or the Security Trustee shall not be entitled to :-






	 	9.5.1	 	release or vary any security given for the Borrower’s
obligations under this Agreement; nor
	 
	 	9.5.2	 	agree to waive the payment of any sum of money payable by any
of the Security Parties under the Security Documents; nor
	 
	 	9.5.3	 	change the meaning of the expression “Majority Banks”; nor
	 
	 	9.5.4	 	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
	 
	 	9.5.5	 	extend the due date for the payment of any sum of money
payable by any of the Security Parties under the Security Documents; nor
	 
	 	9.5.6	 	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
	 
	 	9.5.7	 	agree to change the currency in which any sum is payable under
the Security Documents; nor
	 
	 	9.5.8	 	agree to amend this Clause 9.5; nor
	 
	 	9.5.9	 	agree to reduce the rate under the definitions of “Margin”
“Commitment Commission” or “Default Rate”.






	 	9.6	 	Liability Neither the Agent nor the Security Trustee nor any of their
respective 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 or the Security
Trustee under or in connection with the Security Documents unless as a result of the
Agent’s or the Security Trustee’s wilful misconduct or gross negligence.
	 
	 	9.7	 	Acknowledgement Each of the Finance Parties (other than the Agent and the
Security Trustee) acknowledges that:-




46









 












	 	9.7.1	 	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;
	 
	 	9.7.2	 	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;
	 
	 	9.7.3	 	it has made its own appraisal of the creditworthiness of the
Security Parties;
	 
	 	9.7.4	 	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.
	 
	 	9.8	 	Limitations on responsibility Neither the Agent nor the Security Trustee shall
have any responsibility to any of the Security Parties or to any of the other Finance
Parties on account of:-






	 	9.8.1	 	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;
	 
	 	9.8.2	 	the financial condition of any of the Security Parties;
	 
	 	9.8.3	 	the completeness or accuracy of any statements,
representations or warranties made in or pursuant to any of the Security
Documents, or in




47









 






	 	 	 	or pursuant to any document delivered pursuant to or in connection with
any of the Security Documents;






	 	9.8.4	 	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.






	 	9.9	 	The Agent’s rights The Agent may:-






	 	9.9.1	 	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
	 
	 	9.9.2	 	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
	 
	 	9.9.3	 	rely on any document or Communication believed by it to be
genuine; and
	 
	 	9.9.4	 	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
	 
	 	9.9.5	 	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
	 
	 	9.9.6	 	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




48









 






	 	 	 	which it considers it may incur or sustain in complying with those instructions.






	 	9.10	 	The Agent’s duties The Agent shall:-






	 	9.10.1	 	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
	 
	 	9.10.2	 	inform the Banks promptly of any Event of Default of which the Agent has
actual knowledge.






	 	9.11	 	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.
	 
	 	9.12	 	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.
	 
	 	9.13	 	Agent’s and Security Trustee’s Indemnity The Banks shall, promptly on the
Agent’s request, reimburse the Agent or the Security Trustee in their respective
Proportionate Shares, for, and keep the Agent and the Security Trustee fully
indemnified in respect of:-






	 	9.13.1	 	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;
	 
	 	9.13.2	 	all liabilities, damages, costs and claims sustained or incurred by the Agent
or the Security Trustee 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




49









 






	 	 	 	taken or omitted by the Agent or the Security Trustee 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 or the Security
Trustee’s wilful misconduct or gross negligence.






	 	9.14	 	Employment of agents In performing their duties and exercising their rights,
powers, discretions and remedies under or pursuant to the Security Documents, the Agent
and the Security Trustee shall be entitled to employ and pay agents to do anything
which the Agent or the Security Trustee 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 or the Security Trustee in good faith to be
competent to give such opinion, advice or information.
	 
	 	9.15	 	Distribution of payments The Agent shall pay promptly to the order of the
Banks that Bank’s Proportionate Share 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.
	 
	 	9.16	 	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 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




50









 






	 	 	 	required to be paid by the terms of the Security Documents and ending on the date on
which the Agent receives reimbursement.






	 	9.17	 	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 that Bank’s
Proportionate Share of any sum due from any of the Security Parties under the Security
Documents (the amount of the excess being referred to in this Clause as the “Excess
Amount”) then:-






	 	9.17.1	 	that Finance Party shall promptly notify the Agent (which shall promptly
notify each other Finance Party);
	 
	 	9.17.2	 	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
	 
	 	9.17.3	 	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.
	 
	 	9.18	 	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 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




51









 






	 	 	 	that all of the Banks share rateably in accordance with their Proportionate Shares
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.






	 	9.19	 	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.
	 
	 	9.20	 	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.
	 
	 	9.21	 	Communications Any Communication under this Clause shall be given, delivered,
made or served, in the case of the Agent (in its capacity as Agent, or as one of the
Banks), and in the case of the other Finance Parties, at the address indicated in
Schedule 1 or such other addresses as shall be duly notified in writing to the Agent on
behalf of the Banks.
	 
	 	9.22	 	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.




52









 












	 	9.23	 	Retirement Subject to a successor being appointed in accordance with this
Clause, the Agent may retire as agent and/or the Security Trustee may retire as
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:-






	 	9.23.1	 	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 or the Security Trustee may appoint any other bank or financial
institution as its successor;
	 
	 	9.23.2	 	the resignation of the Agent or the Security Trustee 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;
	 
	 	9.23.3	 	the Agent or the Security Trustee (as the case may be) 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; and
	 
	 	9.23.4	 	the Agent’s or the Security Trustee’s (as the case may be) 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.






	 	9.24	 	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.
	 
	 	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




53









 






	 	 	 	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.






	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 and procure that the Owners do not
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, subject always to the provisions of Clause 10.1.5; nor
	 
	 	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 procure that the Guarantor shall
supply to the Agent




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	 	(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 Guarantor under Clause 10.2.1:






	 	(a)	 	shall be certified by an officer of the
Guarantor 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 Guarantor notifies
the Agent that there has been a change in GAAP, the accounting
practices or reference periods and the Guarantor’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




55









 






	 	 	 	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 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;




56









 












	 	(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 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




57









 






	 	 	 	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 procure that the Owners
shall maintain the registration of (i) the Mortgaged Vessels under the flag
indicated in Schedule 2 Part I from the date of the first Drawing and (ii) the
Newbuildings under the flag indicated in Schedule 2 Part II, 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.
	 
	 	10.2.10	 	Classification The Borrower shall procure that the Owners 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);




58









 












	 	(b)	 	a Valuation of each Newbuilding on the delivery
of such Newbuilding to the Borrower (which shall be at the expense of
the Borrower); and
	 
	 	(c)	 	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
procure that the Guarantor 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 shall procure that the Guarantor shall
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
	 
	 	(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 (a) during the Construction Period be less than one hundred and twenty
five per cent (125%) of the amount of the aggregate of the Facility
Outstandings or shall (b) following the Construction Period be less than one
hundred and forty per cent (140%) of the amount of the Facility Outstandings
(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:-




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	 	(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 withheld), such that after its
release the New Security Amount will be at least equal to the Relevant
Percentage.
	 
	 	10.2.17	 	Delivery of the Newbuildings The Borrower shall take delivery of each of
the Newbuildings in accordance with the terms of the relevant Building Contract
and the Borrower shall not nominate another entity to take delivery of any
Newbuilding nor shall the Borrower transfer, assign nor novate its right to
take delivery of any Newbuilding to any other entity. Upon the delivery of a
Newbuilding to the Borrower, the Borrower shall be obliged to satisfy those
conditions set out in Clause




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	 	 	 	3.3 for such Newbuilding on the relevant Delivery Date, whether or not a
drawing is then being made.






	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 2008 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 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	 	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:-






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	 	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 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




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	 	(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
	 
	 	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




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	 	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
	 
	 	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




64









 






	 	 	 	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 Guarantor 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 an Owner or any of the Owner’s Environmental Affiliates
or in 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; or
	 
	 	12.2.21	 	Change in ownership or control of the Borrower There is any change in the
beneficial ownership or control of the Borrower from that advised to the Agent
by the Borrower at the date of this Agreement.






	13	 	Set-Off and Lien




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	 	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 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




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	 	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.






	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 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 and
procure the execution of such documents as the Banks may require in connection
therewith.
	 
	 	14.3	 	Disclosure of Information Without prejudice to any Finance Party’s rights to
disclose information relating to the Borrower whether under the common law or the
Banking Act, Chapter 19 of Singapore (as amended or re-enacted from time to time, the
“Banking Act”) or otherwise, the Borrower consents (and shall ensure that each of the
Security Parties and each member of the Group will consent) to any Finance Party, its
officers (as defined in the Banking Act) and agents and all persons to whom Section 47
of the Banking Act applies, disclosing any information relating to any Security Party,
any member of the Group and the Security Documents as that Finance Party shall consider
appropriate for any such purposes as it thinks fit, and any other information
(including personal data) relating to any Security Party, any member of the Group, and
any Security Party’s and any Group member’s account relationship (including deposit
accounts) and/or dealing relationship with any Finance Party, including but not limited
to details of




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	 	 	 	the Facility, any Security Document, any security taken, transactions undertaken and
balances and positions with any Finance Party to:






	 	14.3.1	 	any of that Finance Party’s or a Related Party’s (as defined in paragraph (b)
below) agents, contractors or third party service providers or professional
advisers (including auditors), whether in Singapore or the United Kingdom or
outside Singapore or the United Kingdom;
	 
	 	14.3.2	 	that Finance Party’s head office, branches, representative offices,
Subsidiaries, related corporations or affiliates, in Singapore, the United
Kingdom or any other jurisdiction (collectively the “Related Parties” and each
a “Related Party”) for any database or data processing purposes,
notwithstanding that a Related Party’s principal place of business may be
outside of Singapore or the United Kingdom or that the Borrower’s information
following disclosure may be collected, held, processed or used by any Related
Party in whole or in part outside of Singapore or the United Kingdom;
	 
	 	14.3.3	 	any governmental, regulatory, supervisory or other authority, court of law,
tribunal, stock exchange or person, in Singapore, the United Kingdom or any
other jurisdiction, where such disclosure is requested or (as the case may be)
required by law, regulation, judgement or order of court or order of any
tribunal;
	 
	 	14.3.4	 	(where that Finance Party is a Bank) any actual or potential new Bank or
other assignee or transferee of any rights and obligations of that Finance
Party or other participants in any of its rights and/or obligations under or
relating to the Facility, this Agreement or any other Security Document and any
security therefor for any purposes connected with the proposed assignment or
transfer;
	 
	 	14.3.5	 	(where that Finance Party is a Bank) any actual or potential purchaser,
investor or participant in connection with or in contemplation of a
securitisation;




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	 	14.3.6	 	any insurer or insurance broker (whether of that Finance Party, any Related
Party or the Borrower or otherwise) or any direct or indirect provider of
credit protection to that Finance Party or Related Party;
	 
	 	14.3.7	 	any provider of any Encumbrance or guarantee for the Facility;
	 
	 	14.3.8	 	(where that Finance Party is the Agent) any person who is succeeding (or may
potentially succeed) that Finance Party in such capacity;
	 
	 	14.3.9	 	any rating agency;
	 
	 	14.3.10	 	any other Security Party or member of the Group; or
	 
	 	14.3.11	 	any of that Finance Party’s affiliates, any other Finance Party, any
Security Party, any member of the Group and any other person:






	 	(i)	 	with (or through) whom that Finance Party
enters into (or may potentially enter into) any sub-participation in
relation to, or any other transaction under which payments are to be
made by reference to, this Agreement or a Security Party; or
	 
	 	(ii)	 	who is a person, or who belongs to a class of
persons, specified in the second column of the Third Schedule to the
Banking Act.






	 	 	 	This Clause 14.3 is not, and shall not be deemed to constitute, an express
or implied agreement by any Finance Party with the Borrower for a higher
degree of confidentiality than that prescribed in Section 47 of the Banking
Act and in the Third Schedule to the Banking Act.






	 	14.4	 	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.
	 
	 	14.5	 	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:










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	 	14.5.1	 	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”);
	 
	 	14.5.2	 	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;
	 
	 	14.5.3	 	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 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
	 
	 	14.5.4	 	the Transferee shall pay to the Agent a transfer fee of three thousand
Dollars ($3,000).






	 	14.6	 	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.
	 
	 	14.7	 	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




70









 






	 	 	 	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.
	 
	 	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.




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	 	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 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




72









 






	 	 	 	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
	 
	 	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 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




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	 	 	 	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, the obligations of a Bank to advance or maintain its Commitment
shall terminate 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 for that
Bank to advance or maintain its Commitment. In such event the Bank affected shall
notify the Agent and the Agent shall, by written notice to the Borrower, declare that
Bank’s obligations to be immediately terminated. 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.
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 shall
negotiate in good faith with the Borrower to find an alternative method or lending base
in order to maintain the Facility.
	 
	 	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




74









 






	 	 	 	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.
	 
	 	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,




75









 






	 	 	 	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: +65 6224 9743) marked for the attention of Loi
Chay Pow; 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.
	 
	 	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




76









 






	 	 	 	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;
	 
	 	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 after the relevant Drawdown Notice has been given to the
Agent, or is advanced on a date other than that requested in the Drawdown Notice,
including (without limitation) any Break Costs.




77









 






	 	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 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.






78











 






	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.
	 
	 	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.




79









 












	 	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 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.




80









 












	 	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.
	 
	 	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.




81









 












	 	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 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.




82









 












	 	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
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.




83









 










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





84









 








SCHEDULE 1




The Banks, the Commitments and the Proportionate Shares




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Proportionate
	The Banks	 	The Commitments ($)	 	Shares (%)
	DnB NOR BANK ASA,
SINGAPORE BRANCH
	 	$	26,400,000	 	 	 	44	%
	THE ROYAL BANK OF
SCOTLAND PLC, SINGAPORE
BRANCH
	 	$	16,800,000	 	 	 	28	%
	HSH NORDBANK AG,
SINGAPORE BRANCH
	 	$	16,800,000	 	 	 	28	%






 









 






SCHEDULE 2




Part I




The Mortgaged Vessels




	 	 	 	 	 	 	 
	 	 	Country of	 	 	 	 
	Owner	 	Incorporation	 	Vessel	 	Flag
	Gulf Marine Far East Pte. Ltd.

	 	Singapore
	 	“Sea Intrepid”
	 	Panama
	Gulf Marine Far East Pte. Ltd.

	 	Singapore
	 	“Sea Guardian”
	 	Panama
	Gulf Marine Far East Pte. Ltd.

	 	Singapore
	 	“Sea Sovereign”
	 	Panama
	Gulf Marine Far East Pte. Ltd.

	 	Singapore
	 	“Sea Cheyenne”
	 	Panama
	Gulf Marine Far East Pte. Ltd.

	 	Singapore
	 	“Sea Apache”
	 	Panama
	Gulf Marine Far East Pte. Ltd.

	 	Singapore
	 	“Sea Kiowa”
	 	Panama






 









 






Part II




The Newbuildings




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Country of	 	 	 	Date of	 	 	 	Flag on
	Owner	 	Incorporation	 	Builder	 	Building Contract	 	Vessel	 	delivery
	Gulf Marine Far
East Pte. Ltd.

	 	Singapore
	 	Keppel Singmarine
Pte. Ltd.
	 	10 November 2005
	 	Hull no. 313
	 	TBC
	Gulf Marine Far
East Pte. Ltd.

	 	Singapore
	 	Keppel Singmarine
Pte. Ltd.
	 	10 November 2005
	 	Hull no. 314
	 	TBC
	Gulf Marine Far
East Pte. Ltd.

	 	Singapore
	 	Keppel Singmarine
Pte. Ltd.
	 	10 November 2005
	 	Hull no. 315
	 	TBC







87











 





SCHEDULE 3




Form of Transfer Certificate





	To: 	 	DnB NOR Bank ASA, Singapore branch 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
       2008 whereby an initial reducing revolving credit facility of up to $60,000,000 was made
available to Gulf Marine Far East Pte. Ltd. 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.





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, Singapore branch




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, Singapore branch




By:                                                             




Date: [                      ]




HSH Nordbank AG, Singapore branch




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, Singapore branch




From: GULF MARINE FAR EAST PTE. LTD.




[Date]




Dear Sirs,




Drawdown Notice




     We refer to the Revolving Credit Facility 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 	 
	 	GULF MARINE FAR EAST PTE. LTD. 	 
	 





 




			
	3	 	To be in first Drawdown Notice only.




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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
	 	per cent. per annum.
	300

	 







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.



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	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, Singapore branch (the “Agent”)
	 
	From: 	 	GulfMark Offshore, Inc.





Date:     [•]




Dear Sirs,



We refer to an agreement (the “Agreement”) dated [                      ] 2008 and made between
(inter alia) (1) Gulf Marine Far East Pte. Ltd. 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 [•] (the “Relevant Period”) which confirm that:-





	1.	 	Our Total Shareholder Equity is [            ], and our Total Assets are [            ]. As such
our 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,






is [         ]% of the Maximum Facility Amount.



96









 





	 	 	 	 	 
	Signed:
	 	 	 	 
	 

	 	Duly authorised representative of	 	 
	 

	 	GULFMARK OFFSHORE, INC.	 	 






97









 






	 	 	 	 	 
	SIGNED by
	 	)	 	 
	duly authorised for and on behalf
	 	)	 	 
	of DnB NOR BANK ASA, SINGAPORE
	 	)	 	/s/ Mark Russell
	BRANCH
	 	)	 	 
	(as Agent and Bank)
	 	)	 	 
	in the presence of:-
	 	)	 	 
	 
	 	 	 	 
	SIGNED by
	 	)	 	 
	duly authorised for and on behalf
	 	)	 	 
	of DnB NOR BANK ASA
	 	)	 	/s/ Mark Russell
	(as MLA)
	 	)	 	 
	in the presence of:-
	 	)	 	 
	 
	 	 	 	 
	SIGNED by
	 	)	 	 
	duly authorised for and on behalf
	 	)	 	 
	of THE ROYAL BANK OF SCOTLAND PLC,
	 	)	 	/s/ Mark Russell
	SINGAPORE BRANCH (as Bank)
	 	)	 	 
	in the presence of:-
	 	)	 	 
	 
	 	 	 	 
	SIGNED by
	 	)	 	 
	duly authorised for and on behalf
	 	)	 	 
	of HSH NORDBANK AG, SINGAPORE
	 	)	 	/s/ Mark Russell
	BRANCH (as Bank)
	 	)	 	 
	in the presence of:-
	 	)	 	 
	 
	 	 	 	 
	SIGNED by
	 	)	 	 
	duly authorised for and on behalf
	 	)	 	 
	of DnB NOR BANK ASA, BERGEN
	 	)	 	/s/ Mark Russell
	BRANCH (as Security Trustee)
	 	)	 	 
	in the presence of:-
	 	)	 	 
	 
	 	 	 	 
	SIGNED by
	 	)	 	 
	duly authorised for and on behalf
	 	)	 	/s/ David Wilson
	of GULF MARINE FAR EAST PTE. LTD.
	 	)	 	 
	in the presence of:-
	 	)