d992534_ex4-23.htm


    Exhibit
4.23

     

     

    DATED: 
9th JANUARY
2009

     

     

    SAF-CONCORD
SHIPPING LTD

    (The
"Borrower")

     

     

    -AND-

     

     

     

    EFG
EUROBANK ERGASIAS S.A.

    (The
"Bank")

     

    
       

      
        	 	
                 

                 LOAN
      AGREEMENT FOR THE AMOUNT

                OF UP TO
      USD 10,000,000

                M/V "SOLAR
      EUROPE" TBN "MONICA P"

                 

              	 


      

       

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  	 
      	
                          C O N T E N T S

                        	 
      
	
                          CLAUSE

                        	 
      	
                          PAGE NO

                        
	
                          1.

                        	
                          PURPOSE,
      DEFINITIONS AND INTERPRETATION

                        	
                          1

                        
	
                          2.

                        	
                          DISBURSEMENT

                        	
                          9

                        
	
                          3.

                        	
                          CONDITIONS
      PRECEDENT

                        	
                          10

                        
	
                          4.

                        	
                          REPRESENTATIONS
      AND WARRANTIES

                        	
                          11

                        
	
                          5.

                        	
                          ARRANGEMENT
      FEE

                        	
                          17

                        
	
                          6.

                        	
                          EVIDENCE

                        	
                          17

                        
	
                          7.

                        	
                          REPAYMENT
      AND PREPAYMENT

                        	
                          18

                        
	
                          8.

                        	
                          INTEREST
      AND INTEREST PERIODS

                        	
                          19

                        
	
                          9.

                        	
                          THE
      MASTER  SWAP AGREEMENT

                        	
                          22

                        
	
                          10.

                        	
                          PAYMENTS
      ACCOUNTS & CALCULATIONS

                        	
                          24

                        
	
                          11.

                        	
                          UNLAWFULNESS
      & INCREASED COSTS

                        	
                          25

                        
	
                          12.

                        	
                          SECURITY

                        	
                          26

                        
	
                          13.

                        	
                          COVENANTS

                        	
                          27

                        
	
                          14.

                        	
                          EVENTS
      OF DEFAULT

                        	
                          33

                        
	
                          15.

                        	
                          APPLICATION
      OF RECEIPTS

                        	
                          36

                        
	
                          16.

                        	
                          ACCOUNTS

                        	
                          37

                        
	
                          17.

                        	
                          INDEMNITY

                        	
                          40

                        
	
                          18.

                        	
                          REMEDIES
      AND WAIVERS

                        	
                          42

                        
	
                          19.

                        	
                          LEGAL
      IMMINENCE

                        	
                          43

                        
	
                          20.

                        	
                          COUNTERPARTS

                        	
                          43

                        
	
                          21.

                        	
                          INVALIDITY

                        	
                          43

                        
	
                          22.

                        	
                          ASSIGNMENT

                        	
                          43

                        
	
                          23.

                        	
                          EXPENSES

                        	
                          44

                        
	
                          24.

                        	
                          NOTICE

                        	
                          45

                        
	
                          25.

                        	
                          GOVERNING
      LAW AND JURISDICTION

                        	
                          45

                        
	 
      	
                          SCHEDULE
      I

                        	
                          47

                        
	 
      	
                          SCHEDULE
      II

                        	
                          52

                        
	 
      	
                          SCHEDULE
      III

                        	
                          59

                        
	 
      	
                          SCHEDULE
      IV

                        	
                          60

                        
	 	
                          SCHEDULE
      V

                        	
                          61

                        


                

              

            

          

        

      

    

    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    THIS
AGREEMENT is dated the eighth (9th) day of
January two thousand nine and made

    


    BETWEEN

    1.           SAF-CONCORD SHIPPING LTD being
a company incorporated in accordance with the laws of the Republic of Liberia,
whose registered office is at 80, Broad Street, Monrovia, Liberia (referred to
below as "the  Borrower");
and

    2.           EFG EUROBANK ERGASIAS S.A., a
banking societe anonyme duly incorporated under the laws of Greece, having its
registered office at 8, Othonos Street, Athens, Greece, acting for the purposes
of this Agreement through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece
(referred to below as "the
Bank").

    


    


    WHEREAS

    


    At the
request of the Borrower, the Bank has agreed to advance to the Borrower a
secured loan facility in the amount of up to United States Dollars ten million
(USD 10,000,000) upon the terms and conditions hereinafter set
forth.

    


    IT IS HEREBY
AGREED  as follows:-

    


    1.           PURPOSE, DEFINITIONS AND
INTERPRETATION

    


    The
purpose of the Loan shall be to make available to the Borrower a facility in the
amount of up to United States Dollars ten million (USD 10,000,000) by one (1)
advance for the purpose of partly financing the acquisition cost of the Vessel
(as hereinafter defined)

    


    In
this Agreement unless the context otherwise requires the following terms shall
have the following meanings:

    


    "Affiliate" with respect to
any person at any time, means any entity directly or indirectly controlling,
controlled by or under common control with that person at that
time.  For purposes of this definition, "person" means any individual
or legal entity or union of individuals, "control" means the power to direct the
management and policies of an entity, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and "controlling"
and "controlled" have correlative meanings.

    


    "Agreed Rate" means a rate
agreed between the Bank and the Borrower on the basis of which (instead of
LIBOR) the interest rate is determined pursuant to Clause 8.1.
hereof.

    


    "Agreement" means this Loan
Agreement and the documents referred to in Clause 12 hereof as well as every
other document from time to time executed to secure the
Indebtedness.

    


    "Annex VI" means Annex VI
(Regulations for the Prevention of Air Pollution from Ships) to the
International Convention for the Prevention of Pollution from Ships 1973 (as
modified in 1978 and 1997).

    


    "Applicable Interest Rate"
means the rate of Interest based on LIBOR as determined in Clause 8.1.
hereof.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    "Arrangement Fee" means the
fee to be paid by the Borrower to the Bank pursuant to Clause 5
hereof.

    


    "Bank" means EFG EUROBANK
ERGASIAS S.A., a banking societe anonyme duly incorporated under the laws of
Greece, having its registered office at 8, Othonos Street, Athens, Greece,
acting for the purposes of this Agreement through its office at 83, Akti
Miaouli, 185 38 Piraeus, Greece or through any other branch notified to the
Borrower from time to time pursuant to Clause 24 and its successors and
assignees and transferees.

    


    "Banking Day" means a day on
which banks in New York, London, Athens and Piraeus are open for business.
However in respect of a day on which a payment in Dollars is required to be made
hereunder to the Bank, Banking Day shall mean a day on which dealings in
deposits in Dollars are carried on in the London Interbank Market and on which
banks are open for business in London, and New York City.

    


    "Borrower" means Saf-Concord
Shipping Ltd, a company duly incorporated under the laws of the Republic of
Liberia and having its registered office at 80, Broad Street, Monrovia, Republic
of Liberia.

    


    "Break Costs" means all costs,
liability or loss including a loss of prospective profit,  premiums or
penalties incurred by the Bank in the circumstances contemplated by Clause
17.1., or as a result of it receiving any prepayment of all or any part of the
Loan (whether pursuant to Clause 7 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 Loan, and any liabilities, expenses or losses
incurred by the Bank in terminating or reversing, or otherwise in connection
with, any Transaction or any other interest rate transaction or arrangement
entered into by any Bank 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.

    


     

    "Charter" means any charter in
respect of the Vessel of more that twelve (12) months' duration acceptable to
the Bank.

     

    "Charterer" in respect of any
Charter, means a first class charterer in the opinion of the Bank and acceptable
to the Bank in its discretion.

     

    "Charter Rights" in respect of
the Vessel, means all rights and benefits accruing to the Borrower under or
arising out of the relevant Charter and not forming part of the
Earnings.

     

    "Commitment" means the
aggregate principal amount which the Bank has agreed to lend to the Borrower
hereunder as reduced by any relevant term of this Agreement

    


    "Company" means Eurobulk Ltd.
of Liberia, as the company responsible for the Vessel's compliance with the ISM
Code pursuant to paragraph 1.1.2 of the ISM Code.

     

    "Confirmation" means a
Confirmation exchanged, or deemed exchanged, between the Bank and the Borrower
as contemplated by the Master Swap Agreement.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "Corporate Guarantee" means
the corporate guarantee referred to in Clause 12.1.(c) hereof.

    


    "Corporate Guarantor" means
Euroseas Ltd., a company duly incorporated under the laws of the Republic of the
Marshall Islands whose registered office is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall
Islands or any other legal entity(ies) nominated by the Borrower and accepted by
the Bank which have, or as the context may require, shall or may at any time
guarantee the obligations of the Borrower under this Agreement and/or those of
the other Security Parties to the Bank.

    


    "Credit Support Document"
means any document described as such in the Master Swap Agreement and, where the
context permits, any other document referred to in any Credit Support Document
which has the effect of creating an Encumbrance in favour of the
Bank.

     

    "Currency of Account" means,
in relation to any payment to be made to the Bank under or pursuant to any of
the Security Documents, the currency in which that payment is required to be
made by the terms of the relevant Security Documents.

    


    "Credit Support Provider"
means any person (other than the Borrower) described as such in the
Master Swap Agreement.

     

    "Default Rate" means the rate
of Interest per annum determined in accordance with the provisions of Clause 8.4
hereof.

    


    "Designated Transaction(s)"
means a Transaction which fulfils the following requirements:

    
      	
              A.  

            	
              It
      is entered by the Borrower at its request and subject to the Bank's
      consent pursuant to the Master Swap Agreement with the
    Bank;

            


    

    
      	
              B.  

            	
              It
      is designated by the Borrower, by delivery by the Borrower to the Bank of
      a notice of designation in the form set out in Schedule V as a Designated
      Transaction for the purposes of the Security Documents;
  and

            


    

    
      	
              C.  

            	
              Its
      purpose is to provide interest and/ or currency swaps or any other
      transaction to hedge any exposure of the Borrower under the Agreement for
      a period expiring not later that the final Repayment
  Date.

            


    

    


    "Dollars" and "$" means the
lawful currency of the United States of America and in respect of all payments
to be made hereunder or under any of the Security Documents means funds which
are for same day settlement in the New York Clearing House InterBank Payments
System (or such other same day Dollar funds as the Bank may determine to be
customary for the settlement of international Banking transactions denominated
in Dollars).

    


    "Drawdown Date" means the date
being a Banking Day falling not later than the Latest Permissible Drawdown Date
on which the Commitment is advanced or, as the context may require, is to be
advanced to the Borrower.

    


    "Drawdown Notice" means a
notice substantially in the form set out in the Schedule III attached
hereto.

    


    "Earnings" means all earnings
of the Vessel whatsoever, due or to become due to or for the account of the
Borrower at any time during the period commencing on the Drawdown Date and
terminating on the date upon which all moneys payable or to become payable under
any of the Security Documents shall have been paid and discharged in full,
including all freight, 

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    hire
and passage moneys, compensation payable to the Borrower in the event of
requisition of the Vessel for hire, remuneration for salvage and towage
services, demurrage and detention moneys, contributions of any nature whatsoever
in respect of general average, damages for breach (or payments for variation or
termination) of any charterparty or other contract for employment of the Vessel
as well as all and any sums recoverable under all the insurances of the Vessel
including the insurances in respect of loss of Earnings and/or any other losses
and/or liabilities of the Borrower in respect of the Vessel.

    


    "Environmental Affiliate"
means any person having a contractual relationship with any of the
Borrower or any other Relevant Party in connection with any Relevant Ship or its
operation, or the carriage of cargo and/or passengers thereon and/or the
provision of goods and/or services on or from the Relevant Ship.

    


    "Environmental Approval" means
any approval, licence, permit, exemption, or authorisation applicable on any
Relevant Ship under any applicable Environmental Law.

    


    "Environmental Claim" means
any and all enforcement, clean up, removal or other governmental or regulatory
actions or orders pursuant to any Environmental Law or Environmental Approval
together with claims made by any third party relating to damage, contribution,
loss or injury, resulting from any actual or threatened emission, spill, release
or discharge of a Material of Environmental concern from any Relevant
Ship

    


    "Environmental Law" means all
laws regulations conventions and agreements whatsoever applicable to any
Relevant Ship relating to pollution or protection of the human health or the
environment including without limitation the carriage of Materials of
Environmental concern and actual or threatened emissions, spills, releases or
discharges of Materials of Environmental concern

    


    "Event of Default" or
"Default" means any of those events specified in Clause 14 hereof or in
any of the Security Documents.

    


    "Expenses" means the aggregate
at any relevant time (to the extent that the same have not been received or
recovered by the Bank) of:

    
      	
              (a)

            	
              all
      losses, liabilities, costs, charges, expenses, damages and outgoings of
      whatever nature, (including, without limitation, taxes, repair costs, fees
      of Bank Advisors and/or Consultants, registration fees and insurance
      premiums, crew wages, repatriation expenses and seamen's pension fund
      dues) suffered, incurred, charged to or paid or committed to be paid by
      the Bank in connection with the exercise of the powers referred to in or
      granted by any of the Security Documents or otherwise payable by the
      Borrower or any of them in accordance with the terms of any of the
      Security Documents;

            


    

    
      	
              (b)

            	
              the
      expenses referred to in Clause 23.

            


    

    
      	
              (c)

            	
              interest
      on all such losses, liabilities, costs, charges, expenses, damages and
      outgoings from the date on which the same were suffered, incurred or paid
      by the Bank until the date of receipt or recovery thereof at a rate per
      annum calculated in accordance with Clause
8.4.

            


    

    


    "Facility Period" means the
period beginning on the date of this Agreement 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 Bank under or in
connection with the Security Documents.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    "Flag State" means the
Republic of Liberia or such other state or territory acceptable to the Bank
under which the Vessel will be and remain registered throughout the Facility
Period as the "Flag
State" of the Vessel for the purposes of the Security
Documents.

    


    "General Assignment" means the
general assignment of all Insurances, Earnings and Requisition Compensation of the Vessel referred
to in Clause
12.1.(e) hereof.

    


    "Guarantor" means the
Corporate Guarantor.

    


    "Group" means the Borrower,
the other Security Parties and all other entities and/or businesses
substantially owned and/or controlled by and/or managed by the same
person(s).

    


    "IAPPC" means a valid
international air pollution prevention certificate for the Vessel issued under
Annex VI.

    


    "Indebtedness" means the Loan;
any Swap Exposure; all other sums of any nature (together with all interest on
any of those sums) which from time to time may be payable by the Borrower to the
Bank 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.

    


    "Interest Payment Date" means
in respect of the Loan or of any part thereof, in respect of which a separate
Interest Period is fixed, the last day of the relevant Interest Period and in
case of any Interest Period which overruns three (3) months, the last day of
each such three (3) month period(s).

    


    "Interest Period" means any
period for the calculation of interest in respect of the Loan determined
pursuant to Clauses 8.2. hereof.

    


    "ISM Code" means the
International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organization Assembly as
Resolutions A. 741(18) and A. 788 (19), as the same may be amended or
supplemented from time to time. The terms "Safety Management System", "Safety
Management Certificate", "Document of Compliance" and "Major Non-Conformity"
shall have the same meanings as are given to them in the ISM Code.

    


    "ISPS Code" means the
International Code for the Security of Ships and of Port Facilities (including
Appendixes) adopted by one of the resolutions that were adopted on 12 December
2002 by the Conference of Contracting Governments to the International
Convention for the Safety of Life at Sea 1974 (London, 9 to 13 December 2002) as
the same may be amended or supplemented from time to time.

    


    "ISPS Company" means, at any
given time, the company responsible for the Vessel's compliance with the ISPS
Code.

    


    "ISSC" means a valid
international ship security certificate for the Vessel issued under the ISPS
Code.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    "Latest Permissible Drawdown
Date" means the 31st January
2009 being the latest date for drawdown of the Loan pursuant to Clause 2 hereof
or such later date as the Bank may agree in writing.

    


    
      	
              "LIBOR" means, for an
      Interest Period the rate, rounded to the nearest four decimal places
      downwards (if the digit displayed in the fifth decimal place is 1,2,3 or
      4) or upwards (if the digit displayed in the fifth decimal place is
      5,6,7,8 or 9) displayed as the British Bankers' Association Interest
      Settlement Rate (or such other rate as may replace it at any time during
      the Facility Period) on any information service selected by the Bank on
      which that rate is displayed, for deposits in the Currency of Account for
      a period equal in length to the relevant Interest Period, or (if the Bank
      is for any reason unable to ascertain that rate) the rate, rounded (unless
      the Borrower shall have entered into an interest rate swap or other
      instrument with the Bank for the purpose of hedging all or any part of the
      Borrower's interest rate risk under this Agreement, in which event no
      rounding shall apply) upwards to the nearest whole multiple of
      one-sixteenth of one per centum, at which deposits in the Currency of
      Account of amounts comparable to the amount of the Facility (or any
      relevant part of the Facility) are offered to the Bank for a period equal
      in length to the relevant Interest
Period.

            


    

     

    "Loan" means the aggregate
principal amount owing to the Bank hereunder at any time.

    


    "Manager" means Eurobulk Ltd.
of the Republic of Liberia, established in Greece under law 89/67, 378/68, 27/75
and 814/78 as amended by law 2234/94 with a branch office in Greece at 40, Agiou
Konstantinou Str., Aethrion, Maroussi, Greece or any other legal entity
nominated by the Borrower as the Manager of the Vessel and accepted by the Bank
and includes its successors in title.

    


    "Manager's Undertaking" means
the manager's undertaking referred to in Clause 12.1.(i) hereof.

    


    "Margin" means two point fifty
per cent (2.50%) per annum.

    


    "Master Agreement Security
Deed" means the security deed executed or (as the context may require) to
be executed by the Borrower in favour of the Bank as a condition precedent to
the execution of the Master Swap Agreement, such deed to be in a form acceptable
to the Bank in its absolute discretion;

    


    "Master Swap Agreement" means the master
swap agreement (on the 1992 ISDA (Multicurrency-Crossborder) form) and the
schedule collateral thereto dated the same date as this Agreement and entered
into between the Borrower and the Bank and include all Designated Transactions
from time to time entered into and Confirmations of Designation Transactions
from time to time exchanged under the said master swap agreement.

    


    "Material Adverse Effect"
means a material adverse effect on the Borrower's ability to meet its
obligations to the Bank under any of the Security Documents.

    


    "Material of Environmental
Concern"  means any object or material which may cause
environmental damage, including pollutants, contaminants, toxic substances, oil
as defined in the United States Oil Pollution Act of 1990 and all hazardous
substances as defined in the United States Comprehensive Environmental Response,
Compensation and Liability Act 1988

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    "Minimum Value" means, at any
time, an amount equal at least to a percentage of one hundred and thirty per
cent (130%) of the Loan and the Swap Exposure.

    


    "MOA" means the Memorandum of
Agreement dated 3rd
December 2008 as same has been amended by Addendum No 1 dated 3rd
December 2008entered into between the Seller and the Borrower as this may be
amended from time to time in respect of the sale by the Seller to and the
purchase by the Borrower of the Vessel.

    


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

    


    "Mortgage" means the first
preferred Liberian mortgage referred to in Clause 12.1.(d) hereof.

    


    "Net Worth" means the value of
the total assets minus total liabilities, as expressed in the financial
statements.

    


    "Notional Amount", in respect
of any Designated Transaction, means the Notional Amount as defined in the
Confirmation relating to that Designated Transaction.

    


    "Operating Account" means each
one of them individually and/or collectively of the account(s) opened or to be
opened by the Borrower with the Bank as per Clause 16.3 hereof.

    


    "Pledges" means:

    
      	
              (a)

            	
              a
      pledge  agreement(s) creating security in respect of the
      Operating Account to be held with the Bank in the name of the Borrower
      and/or in the name of the Corporate Guarantor in respect of the Vessel
      (the "Operating Account
      Pledge(s)"); and

            


    

    
      	
              (b)

            	
              a
      pledge agreement creating security in respect of the Retention Account to
      be held with the Bank in the name of the Borrower (the "Retention Account
      Pledge");

            


    

    


    "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.

     

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

    


    "Relevant Party" means the
Borrower and/or any other party being a member of the Group.

    


    "Relevant Ship" means the
Vessel and any other vessels from time to time owned by, managed by, crewed by
or chartered to any Relevant Party (whether before or after the date of this
Agreement).

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    "Repayment Dates" means each
of the dates for the payment of the Repayment Instalment sums falling at three
monthly intervals, the first Repayment Date to occur three (3) months after the
Drawdown Date and each of the subsequent Repayment Dates to occur  at
consecutive intervals of three (3) months thereafter pursuant to Clause 7
hereof.

    


    "Repayment Instalment" means
each instalment payable pursuant to Clause 7 hereof.

    


    "Retention Account" means the
account opened or to be opened by the Borrower with the Bank as per Clause 16.4
of this Agreement

    


    "Security Documents" means
this Agreement, the documents referred to in Clause 12 hereof and any other
document from time to time executed to secure the Indebtedness.

    


    "Security Party" means the
Borrower and any person (other than the Bank) which is or will become a party to
any of the Security Documents.

    


    "Seller" means Solar Europe
Corp., a company duly organised and validly existing under the laws of the
Republic of Liberia, having its registered office in Monrovia, (80, Broad
Street),  Republic of Liberia.

    


    "Specific Assignment" means
the specific assignment of the benefit the Charter and respective notices and
acknowledgments thereof Clause 12.1.(f) hereof.

    


    "Subsidiary" at any time,
means any entity of which more than fifty percent (50%) of the outstanding
voting stock or other equity interest entitled ordinarily to vote in the
election of the directors or other governing body (however designated) of that
entity is at the time beneficially owned or controlled directly or indirectly by
the Borrower, by one or more such entities or by the Borrower and one or more
such entities.

    


    "Swap Exposure" means, as at
any relevant date, the amount certified by the Bank to be the aggregate net
amount in Dollars which would be payable by the Borrower to the Bank under (and
calculated in accordance with Section 6(e) (Payments on Early Termination) of
the Master Swap Agreement if an Early Termination Date had occurred on the
relevant date in relation to all continuing Designated
Transactions.

    


    "Taxes" includes all present
and future taxes and all stamp and other taxes and levies, imposts, deductions,
duties, charges and withholdings whatsoever and public charges in general
together with interest thereon fines and penalties with respect thereto, if any,
(except taxes on the net income of the Bank imposed in the jurisdiction in which
its principal or its lending office is located) and charges, fees or other
amounts made on or in respect thereof.

    


    "Total Loss" means (a),
actual, constructive, compromised or arranged total loss of the Vessel; or (b)
compulsory acquisition, or capture, seizure, or confiscation of the Vessel by
any government or person acting or purporting to act on behalf of any government
or, (c) arrest, blockade, detention or simple loss of the Vessel's possession or
use because of any other reason. For the purpose of this Agreement a Total Loss
shall be deemed to have occurred:

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (a)

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

            


    

    


    
      	
              (b)

            	
              in
      the case of constructive on compromised or arranged total loss at the date
      and time notice of abandonment of the Vessel is given to its
      insurers;

            


    

    


    
      	
              (c)  

            	
                in
      the case of capture, seizure, confiscation or compulsory acquisition on
      the date of such occurrence, unless it is reasonably expected that the
      Vessel will be soon restored absolutely free to its Owner always provided
      however that in fact it will be so restored within forty (40) days
      thereafter at the latest.

            


    

    


    
      	
              (d)  

            	
              in
      the case of detention, arrest, blockade or loss of the Vessel's possession
      and/or use because of any reason whatsoever forty (40) days from the date
      of such occurrence, unless it is reasonably expected that the Vessel will
      be soon restored absolutely free to its Owner, always provided however
      that in fact it will be so restored within forty (40) days thereafter at
      the latest.

            


    

    


    "Transaction" means a
transaction entered into between the Bank and the Borrower governed by the
Master Swap Agreement.

     

    "Vessel" means the m.v. Solar
Europe built in 1998, being of 27,011 tons gross, 16,011 tons net, currently
registered under the flag of the Republic of Liberia under IMO No 9179218 in the
name of Solar Europe Corp., of Liberia tbn "MONICA P." and to be registered
under the flag of the Republic of Liberia in the ownership of the
Borrower

    


    


    
      	
               
      

            	
              In
      this Agreement

            


    

    


    
      	
              (a)

            	
              unless
      the context otherwise requires, words denoting the  singular
      number shall include the plural and vice
versa;

            


    

    
      	
              (b)

            	
              references
      to persons include bodies corporate, bodies unincorporate and
      individuals.

            


    

    
      	
              (c)

            	
              references
      to assets include property, rights and assets of every
      description;

            


    

    
      	
              (d)

            	
              references
      to any document are to be construed as references to such document as
      amended or supplemented from time to time;
and

            


    

    
      	
              (e)

            	
              references
      to any enactment include re-enactments, amendments and extensions
      thereof.

            


    

    


    2.           DISBURSEMENT

    


    
      	
              2.1.

            	
              Amount

            


    

    


    Subject
to the terms and conditions of the Security Documents and to the satisfaction of
all conditions precedent and in reliance on the representations and warranties
made in or in accordance with them the Bank agrees to make available to the
Borrower a facility in the amount of up to United States Dollars ten million
(USD 10,000,000) for the purposes described in Clause 1.

    


    2.2.        Drawdown

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    Subject
to the terms and conditions of this Agreement the Commitment shall be made
available to the Borrower following receipt by the Bank from the Borrower
of:

    


    
      	
              (a)

            	
              a
      Drawdown Notice in the form set out in Schedule III not later than 10 a.m.
      two (2) Banking Days before the proposed Drawdown Date of the
      Commitment.

            


    

    


    
      	
              (b)

            	
              confirmation
      of the terms of proposed Insurances (as defined in the Schedule II) and
      notification of the identities and of the names of the insurers and of the
      proposed Classification Society not later than 10 a.m. before the proposed
      Drawdown Date.

            


    

    


    
      	
              (c)

            	
              the
      documents and evidences referred to in Schedule I (Conditions
      Precedent).

            


    

    


    The
giving of the Drawdown Notice shall constitute the Borrower's irrevocable
commitment to borrow the amount referred to therein.

    


    


    
      	
              2.3.

            	
              Termination
      of Commitment

            


    

    


    Any
part of the Commitment remaining undrawn at the end of the Latest Permissible
Drawdown Date shall thereupon be automatically cancelled.

    


    


    2.4. Number
of Advances

    


    The
Commitment shall be advanced to the Borrower in full one amount on the Drawdown
Date.

    


    


    3.           CONDITIONS
PRECEDENT

    


    
      	
              3.1.

            	
              Corporate
      Documents and Evidences.

            


    

    


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

    


    
      	
              (a)

            	
              the
      Bank shall have received, not later than four Banking Days before the day
      on which the Drawdown Notice for the Commitment is given, the documents
      and evidence specified in Part 1 of Schedule I in form and substance
      satisfactory to the Bank;

            


    

    


    
      	
              (b)

            	
              the
      Bank shall have received, not later than four Banking Days before the day
      on which the Drawdown Notice for the Commitment is given, or when this is
      not possible, simultaneously with such Drawdown, the documents and
      evidence specified in Part 2 of Schedule I in form and substance
      satisfactory to the Bank;

            


    

    


    


    


    
      	
              3.2.

            	
              Continuing
      conditions precedent.

            


    

    


    The
obligation of the Bank to advance the Commitment, is subject to the further
condition that at the time of giving a Drawdown Notice and on advancing the
Commitment no Event of Default has occurred or is about to occur and be
continuing.  Also that the Arrangement Fee have been received by the
Bank in accordance with the provisions of Clause 5 hereof.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    
      	
              3.3.

            	
              General
      Conditions

            


    

    


    The
obligation of the Bank to advance the Commitment shall be subject to the further
condition that there has been no material adverse change in the financial
condition and operation of the Security Parties or in their ability to perform
their obligations under the Security Documents to which they are a party or a
material adverse change of circumstances and that the Bank at the time of
receiving a Drawdown Notice in respect of the Commitment shall have
received:

    


    
      	
              (a)  

            	
              Confirmations
      from Insurance Brokers and Club Managers that the Vessel is fully insured
      in accordance with the requirements in clause 4.3. (f) and that the Bank's
      interest as Mortgagee is duly
noted.

            


    

    
      	
              (b)  

            	
              The
      Security Documents duly executed and when appropriate duly registered with
      the appropriate registry.

            


    

    
      	
              (c)  

            	
              Evidence
      that the Operating Account for the Vessel has been duly opened and all
      mandate forms, signature cards and authorities have been duly executed and
      delivered to the Bank.

            


    

    


    
      	
              3.4

            	
              Further
      Documents

            


    

    


    The
Bank may from time to time request and the Borrower shall, within the period
specified by the Bank, deliver to the Bank such further documents certificates
and/or opinions as requested at the sole discretion of the Bank.

    


    


    
      	
              3.5

            	
              Waiver
      of conditions precedent

            


    

    


    The
conditions specified in this Clause 3 are inserted solely for the benefit of the
Bank. In case any conditions precedent have not been fulfilled prior to the
Drawdown, the Bank may at its option, without prejudice to its right not to make
available the Commitment and/or to terminate same, grant to the Borrower a few
days period to fulfill such missing conditions precedent.

    


    


    4.          
 REPRESENTATIONS AND
WARRANTIES

    


    
      	
              4.1.

            	
              Continuing
      representations and warranties

            


    

    The
Borrower represents and warrants to the Bank that:

    


    
      	
              (a)

            	
              Due
      incorporation.

            


    

    
      	
               
      

            	
              each
      of the corporate Security Parties is duly incorporated and validly
      existing in good standing under the laws of its Relevant Jurisdiction and
      has power to carry on its business as it is now being conducted and to own
      its  property and other
assets;

            


    

    


    
      	
              (b)

            	
              Corporate
      power

            


    

    the
Borrower has power to borrow the Commitment under this Agreement, to enter into
Designated Transactions under the Master Swap Agreement and to make all the
payments contemplated by, and to comply with, those Finance Documents to which
the Borrower is a party and the Master Swap Agreement and the Borrower and any
of the other Security Parties has power to execute and deliver and perform its
obligations under the Security Documents to which it is or is to be a party; all
necessary corporate, shareholder and other action has been taken to authorise
the execution, delivery and performance of the same

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (c)

            	
              Binding
      obligations

            


    

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

    


    
      	
              (d)

            	
              No conflict with other
      obligations

            


    

    
      	
               
      

            	
              the
      execution and delivery of, the performance of their obligations under, and
      compliance with the provisions of the Security Documents by the relevant
      Security Parties will not  (i) contravene any existing
      applicable law, statute, rule or regulation or any judgment, decree or
      permit to which any of the Security Parties is subject,  (ii)
      conflict with, or result in any breach of any of the terms of, or
      constitute a default under, any agreement or other instrument to which any
      of the Security Parties is a party or is subject or by which it or any of
      its property is bound.

            


    

    


    
      	
              (e)

            	
              No
      litigation

            


    

    
      	
               
      

            	
              there
      are no claims or actions pending or to the knowledge of any officer of the
      Security Parties, threatened and no litigation, arbitration or
      administrative proceeding is taking place, pending or, to the knowledge of
      any officer of the Security Parties, is threatened against any of such
      Security Parties or any of their Affiliates and/or Subsidiaries, which, if
      adversely determined could have a material adverse effect on the business,
      assets or financial condition of them, or could affect the validity or
      enforceability of any of the Security
Documents.

            


    

    


    
      	
              (f)

            	
              No filings
      required

            


    

    
      	
               
      

            	
              save
      for the registration of the Mortgage under the laws of the Flag State, it
      is not necessary to ensure the legality, validity, enforceability or
      admissibility in evidence of any of the Security Documents, that they or
      any other instrument be notarised, filed, registered or enrolled in any
      court, public office or elsewhere or that any tax be paid in any Relevant
      Jurisdiction on or in relation to the Security Documents and/or to their
      enforcement.

            


    

    


    
      	
              (g)

            	
              Choice of
      law

            


    

    
      	 	
              the
      choice of English law to govern the Security Documents, except the
      Mortgage which is governed by the law of the flag of the Vessel, the
      Pledges and the Corporate Guarantee which is governed by the laws of
      Greece and the submission by the Security Parties to the non­exclusive
      jurisdiction of the English Courts and/or Piraeus Courts are valid and
      binding;

            


    

    


    
      	
              (h)

            	
              No
    immunity

            


    

    
      	
               
      

            	
              none
      of the Security Parties is entitled to immunity on the grounds of
      sovereignty or otherwise from any legal action or proceeding (which shall
      include, without limitation, suit, attachment prior to judgment, execution
      or other enforcement) and in case any such immunity will be granted to
      them the Security Parties concerned will unreservedly waive as against the
      Bank all their respective rights and/or entitlement to such
      immunity.

            


    

    


    
      	
              (i)

            	
              Consents
      obtained

            


    

    
      	
               
      

            	
              every
      consent, licence or approval of, or registration with or declaration to,
      public bodies or authorities or courts required by any Security Party in
      connection with the execution, delivery, validity, enforceability or
      admissibility in evidence of each of the Security Documents or the
      performance by each Security Party of its obligations under the Security
      Documents has been obtained or made and is in full force and
      effect;

            


    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (j)

            	
              Financial
      statements

            


    

    
      	
               
      

            	
              The
      financial statements of the Security Parties which have been or will be
      delivered to the Bank are complete and accurate, have been prepared in
      accordance with generally accepted principles of good accounting practice
      and fairly present the financial condition of the Security Parties as at
      the date thereof and the results of their
  operations.

            


    

    


    
      	
              (k)

            	
              No adverse
      changes

            


    

    
      	
               
      

            	
              There
      has been no material adverse change in the financial condition of the
      Security Parties or in their ability to perform their obligations under
      the Security Documents since the date of the above financial
      statements.

            


    

    


    


    
      	
              4.2.

            	
              Further
      Representations and Warranties

            


    

    


    The
Borrower further represents and warrants to the Bank that:

    


    
      	
              (a)

            	
              No default under any
      Indebtedness

            


    

    
      	
               
      

            	
                none
      of the Security Parties nor any of their Subsidiaries and/or Affiliates
      are (nor would with the giving of notice or lapse of time or the
      satisfaction of any other condition be) in breach of or in default under
      the present or any other agreement relating to indebtedness to which they
      are a party or by which they may be
bound;

            


    

    


    
      	
              (b)

            	
              Information

            


    

    
      	
               
      

            	
              the
      information, exhibits and reports furnished by any Security Party to the
      Bank are true and accurate in all material respects, do not omit material
      facts and all reasonable enquiries have been made to verify the facts and
      statements contained therein;

            


    

    


    


    
      	
              (c)

            	
              No
  Taxes

            


    

    
      	
               
      

            	
              no
      Taxes e.t.c. are imposed by withholding or otherwise on any payment to be
      made by any Security Party under the Security Documents or are imposed on
      or by virtue of the execution or delivery by the Security Parties of the
      Security Documents or any other document or instrument to be executed or
      delivered under any of the Security
Documents;

            


    

    


    


    
      	
              4.3.

            	
              Representations
      concerning the Vessel

            


    

    


    
      	
              (a)  

            	
              The
      Borrower (is and) will be during the life of this Agreement the sole legal
      owner of Vessel.

            


    

    


    
      	
              (b)  

            	
              The
      Vessel will conform to existing international regulations, and will be
      registered as Ships under the laws and flag of the Flag
    State.

            


    

    


    
      	
              (c)

            	
              The
      Vessel is and will be during the life of this Agreement operationally
      seaworthy and in every way fit for service.  The Vessel is and
      will always continue to be classed in the highest class with a
      Classification Society member of IACS and approved by the Bank free of all
      recommendations notations or average damage affecting class and will be
      insured in accordance with the provisions of this
    Agreement.

            


    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (d)  

            	
              The
      Vessel will on the drawdown of the Commitment be subject to no charter or
      contract of affreightment nor to any agreement to enter into any charter
      or contract other than disclosed to the
Bank.

            


    

    


    
      	
              (e)

            	
              Neither
      the Vessel, nor the Earnings, or Insurances nor any part thereof will, on
      the drawdown of the Commitment, or thereafter during the course of this
      Agreement, be subject to any encumbrances other than encumbrances in
      favour of the Bank, neither to any participation entitlement of any other
      except the Borrower.

            


    

    


    
      	
              (f)

            	
              The
      Borrower shall keep the Vessel insured at all times during the Loan
      period, while navigating or in port, to the Bank's full satisfaction. All
      insurances shall be in form and substance satisfactory to the Bank and
      with Underwriters acceptable to it in accordance with the provisions of
      Schedule II and shall include as a
minimum:

            


    

    


    
      	
               
      

            	
              (i)

            	
              Hull
      and Machinery (disbursements and/or an increased value sum insured) for an
      amount not less than 120% of the aggregate amount of the Loan and the Swap
      Exposure.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              War
      Risks for the above amount.

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Protection
      and Indemnity (with Excess Liability Insurance for Oil Pollution and FD
      and D cover).

            


    

    


    
      	
                          
      (iv)  

            	
              Mortgagee's
      Interest Insurance (MII) to be effected and maintained by the Bank at
      Borrower's expense for an amount not less than 120% of the aggregate
      amount of the Loan and the Swap
Exposure.

            


    

    


    
      	
                         
      (v)  

            	
              Mortgagee's
      Additional Perils (Pollution) (MAPI) (if required by the Bank at its sole
      discretion) to be effected and maintained by the Bank on account of the
      Bank at Borrower's expense for an amount not less than 120% of the
      aggregate amount of the Loan and the Swap
  Exposure.

            


    

    


    
      	
              (g)  

            	
              The
      Vessel will on the Drawdown Date of the Commitment be in the absolute
      ownership of the Borrower.

            


    

    


    
      	
              (h)

            	
              There
      are and there will be no commissions, rebates, premiums or other
      repayments by or to or on account of the Borrower, any other Security
      Party other than as disclosed to the Bank by the Borrower in
      writing.

            


    

    


    
      
        	
                4.4.
      (a)   Compliance
      with Environmental Laws and
Approvals

              


      

    

    
      	 	
              except
      as may already have been disclosed by the Borrower and acknowledged in
      writing by the Bank:

            


    

    


    
      	
               
      

            	
              (i)

            	
              the
      Borrower, the Corporate Guarantor and the other Relevant Parties and to
      the best of the Borrower's knowledge and belief their respective
      Environmental Affiliates have complied, and will comply during the tenure
      of this Agreement with the provisions of all Environmental Laws applicable
      at any area the Vessel is sailing in or anchored
  at.

            


    

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              (ii)

            	
              the
      Borrower, the Corporate Guarantor and the other Relevant Parties and to
      the best of the Borrower's knowledge and belief their respective
      Environmental Affiliates have obtained all Environmental Approvals and are
      and will be during the tenure of this Agreement in compliance with all
      such Environmental Approvals; and

            


    

    


    
      	
               
      

            	
              (iii)

            	
              neither
      the Borrower, nor the Corporate Guarantor, nor any other Relevant Party
      nor to the best of the Borrower's knowledge and belief any of their
      respective Environmental Affiliates has received notice of any
      Environmental Claim that the Borrower or any other Relevant Party or any
      such Environmental Affiliate is not in compliance with any Environmental
      Law or any Environmental Approval;

            


    

    


    
      
        	
                (b)

              	
                No Environmental
      Claims

              


      

    

    except
as may already have been disclosed by the Borrower and acknowledged in writing
by the Bank, there is no Environmental Claim pending or, to the best of the
Borrower's knowledge and belief, threatened against the Borrower or the Vessel
or any other Relevant Party or any other Relevant Ship or to the best of the
Borrower's knowledge and belief any of their respective Environmental
Affiliates;

    


    
      	
              (c)

            	
              The
      Borrower shall not trade within any area if it does not comply with all
      Environmental Laws applicable in that area, and that it shall require that
      none of their Environmental Affiliates trade within any area if the
      Environmental Affiliate cannot or does not comply with all Environmental
      Laws applicable in that area which relate to the Vessel or its operation
      or its carriage of cargo;

            


    

    


    
      	
              (d)

            	
              The
      Borrower upon the request of the Bank, conduct and complete all reasonably
      necessary investigations, studies, sampling, audits and testing required
      in connection with any known (or threatened) Release of Materials of
      Environmental Concern which would have a Material Adverse Effect;
      and

            


    

    


    
      	
              (e)

            	
              The
      Borrower shall, promptly upon the occurrence of any of the following
      events, provide to the Bank a certificate specifying in detail the nature
      of such event and the proposed response of the Borrower or the
      Environmental Affiliate concerned:

            


    

    


    
      	
                        
      (i)  

            	
              the
      receipt by the Borrower or any Environmental Affiliate of any
      Environmental Claim which would have a Material Adverse Effect;
      or

            


    

    


    
      	
                        
      (ii)  

            	
              any  (or  any  threatened)  Release  of  Materials
      of Environmental Concern which would have a Material Adverse
      Effect,

            


    

    


    and
upon the written request by the Bank, the Borrower shall submit to the Bank, at
reasonable intervals, a report updating the status of any occurrence of an
Environmental Claim or a Release of Materials of Environmental Concern, which
would have a Material Adverse Effect.

    


    


    
      	
              4.5.

            	
              ISM
      Code

            


    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
 

    As
regards the Vessel, and as from the date of her delivery to the Borrower, the
Borrower shall procure that any Security Party shall:

    


    
      	
              (a)

            	
              at
      all times comply, and be responsible for compliance by itself and by the
      Vessel, with the ISM Code;

            


    

    


    
      	
              (b)

            	
              at
      all times ensure that:

            


    

    
      	
               
      

            	
              (i)

            	
              the
      Vessel has a valid Safety Management
  Certificate;

            


    

    
      	
               
      

            	
              (ii)

            	
              the
      Vessel is subject to a safety management system which complies with the
      ISM Code;  and

            


    

    
      	
               
      

            	
              (iii)

            	
              it has a valid
      Document of Compliance on board the Vessel to which the Documents of
      Compliance relates,

            


    

    and
shall deliver to the Bank a copy of a valid Safety Management Certificate and a
valid Document of Compliance in respect of the Vessel in each case duly
certified by an officer of the Borrower;

    


    
      	
              (c)

            	
              promptly
      notify the Bank of any actual or threatened withdrawal of an applicable
      Safety Management Certificate or Document of
  Compliance;

            


    

    


    
      	
              (d)

            	
              promptly
      notify the Bank of the identity of the person ashore designated for the
      purposes of paragraph 4 of the ISM Code and of any change in the identity
      of that person;  and

            


    

    


    
      	
              (e)

            	
              promptly
      notify the Bank of the occurrence of any accident or major non-conformity
      requiring action under the ISM
Code.

            


    

    


    


    
      	
              4.6.

            	
              ISPS
      Code

            


    

    


    As
regards the Vessel, and as from the date of her delivery to the Borrower, the
Borrower shall procure that any Security Party shall:

    


    
      	
              (a)

            	
              at
      all times comply, and be responsible for compliance by the Vessel with the
      ISPS Code;

            


    

    


    
      	
              (b)

            	
              at
      all times ensure that:

            


    

    


    
      	
               
      

            	
              (i)

            	
              the
      Vessel has a valid Ship Security
Certificate;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              the
      Vessel is subject to a security system and any associated security
      equipment of the Vessel which comply with the ISPS
      Code;  and

            


    

    


    
      	
               
      

            	
              (iii)

            	
              it has an approved
      Ship Security Plan on board the
Vessel

            


    

    


    and
shall deliver to the Bank a copy of a valid Ship Security Certificate in respect
of the Vessel duly certified by an officer of the Borrower;

    


    


    4.7          Annex
VI

    


    As
regards the Vessel, and as from the date of her delivery to the Borrower, the
Borrower shall procure that any Security Party shall:

    (a)           for
the duration of the Facility Period comply with Annex VI in relation to the
Vessel and procure that the Vessel's master and crew are familiar with, and that
the  Vessel complies with, Annex VI;

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

    (b)           obtain,
following its drydocking in 2008, and maintain thereafter a valid and current
IAPPC for the Vessel throughout the Facility Period and provide a copy to the
Bank; and

    (c)           immediately
notify the Bank in writing of any actual or threatened withdrawal, suspension,
cancellation or modification of the IAPPC of the Vessel.

    


    


    
      	
              4.8.

            	
              Repetition
      of representations and warranties

            


    

    


    On the
Drawdown Date and on each Interest Payment Date the Borrower unless
it  states otherwise in writing to the Bank, shall be deemed to
further represent and warrant to the Bank (a) that the then latest
audited and/or not audited (as the case may be) financial statements delivered
to the Bank have been prepared in accordance with generally accepted accounting
principles and practices which have been consistently applied and present fairly
and accurately the financial position of the Borrower and the Corporate
Guarantor as at the end of the financial period to which the same relate and the
results of their operations and, as at the end of such financial period, the
Borrower and the Corporate Guarantor did not have any significant liabilities
(contingent or otherwise) or any unrealised or anticipated losses which are not
disclosed by, or reserved against or provided for in, such financial statements
and (b) that the
representations and warranties contained in Clauses 4.1. to 4.6. are true and
correct on and as of the Drawdown Date and on each Interest Payment Date, as if
each representation and warranty was made at such time.

    


    


    


    5.           
ARRANGEMENT
FEE

    


     

    5.1          Arrangement
Fee

     

    The
Borrower shall pay to the Bank a non-refundable Arrangement Fee in the amount of
United States Dollars sixty thousand (USD 60,000), payable on the Drawdown Date
of the Loan.

     

    


     

    5.2.           The
Arrangement Fee shall be payable to the Bank whether or not any part of the
Commitment is ever advanced.

    


    


    6.       
    EVIDENCE

    


    It is
hereby agreed that abstracts or photocopies or other reproductions of the Loan
Account and/or from the books and/or records of the Bank certified by an officer
of the Bank as well as statements of accounts or a certificate signed by two
authorised officers of the Bank shall be, in the absence of a manifest error,
conclusive evidence and binding on the Borrower and on the other Security
Parties as to the existence and/or the amount of the Indebtedness, of any amount
due under this Agreement, of the applicable Interest Rate or Default Rate or any
other rate referred to in this Agreement, the Interest Period, the value of
additional securities under Clause 13.5., the payment or non payment of any
amount and/or the occurrence of any other Event of Default.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
 

    


    7.      
     REPAYMENT AND
PREPAYMENT

    


    7.1           The
Borrower hereby absolutely and unconditionally covenants and agrees to repay the
Loan to the Bank in freely transferable Dollars by twenty (20) consecutive equal
quarterly principal instalments of United States Dollars two hundred fifty thousand (USD 250,000) each plus a balloon
payment of United States Dollars five million (USD 5,000,000) to be payable
together the twentieth (20th) instalment at final maturity.

    The
time, the amount and the balance of the Loan following the payment of each such
instalment are specified for convenience purposes in Schedule IV. In case the
Bank shall advance a sum of less than United States Dollars ten million (USD
10,000,000) the Repayment Instalments will be reduced accordingly pro-rata. Each
such instalment together with interest as hereinafter set forth shall be
correspondingly payable on each of the Repayment Dates. The first Repayment Date
shall be the day falling three (3) months after the Drawdown Date of the
Commitment and each of the subsequent Repayment Dates shall fall at consecutive
intervals of three (3) months thereafter.

    The
Final Repayment Date of the Loan shall be the day falling 60 months after the
Drawdown Date of the Commitment and it must coincide with the last day of the
final Interest Period to be adjusted accordingly.

    


    
      	
              7.2

            	
              Voluntary
      Prepayment

            


    

    


    
      	
               
      

            	
              7.2.1

            	
              The
      Borrower may prepay part or all of the Loan at any Interest Payment Date
      relating to the whole of the Loan provided that it will have given a ten
      (10) days prior written notice to the Bank, specifying the amount to be
      prepaid on such date.

            


    

    


    
      	
               
      

            	
              7.2.2

            	
              The
      Borrower may also at any other time prepay the Loan or a part thereof upon
      ten (10) days prior written notice provided that it will also prepay all
      sums that the Bank shall determine to be its loss and cost sustained
      because of the prepayment within an Interest Period or Periods including
      but not limited to payment of interest Break Costs (if any) and of such
      additional amounts (if any) to compensate the Bank for the cost of
      redeploying funds as a result of such prepayment as well as any loss of
      Interest  up to the end of the then current Interest Period or
      Periods in respect of the whole amount of the Loan
    outstanding

            


    

    


    


    
      	
              7.3

            	
              Conditions

            


    

    


    All
prepayments shall be conditional to the prior fulfillment of the following
prerequisites:

    


    
      	
               
      

            	
              7.3.1

            	
              The
      interest accrued on the Loan to the date of prepayment and any other
      additional sums due hereunder and/or under any of the other Security
      Documents will be paid to the Bank.

            


    

    


    
      	
               
      

            	
              7.3.2

            	
              Every
      notice of prepayment shall be effective on actual receipt by the Bank,
      shall be irrevocable, shall oblige the Borrower to make such prepayment on
      the date specified and shall specify the amount to be prepaid, which shall
      be not less than United States Dollar five hundred thousand (USD 500,000)
      or a higher integral multiple therof. Any amount so prepaid may not be
      re-borrowed under this Agreement.

            


    

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              7.3.3

            	
              Any
      prepayment of less than the whole of the Loan will be applied by the Bank
      towards repayment of the Repayment Instalments in inverse order of
      maturity or any other way determined by the Bank at its
      discretion.

            


    

    


    
      	
              7.4

            	
              Compulsory
      Prepayment

            


    

    


    Unless
the Bank agrees to accept substitute security in form and substance satisfactory
to the Bank, in line with Clauses 13.5.2 and 13.5.3 hereof, the Borrower shall,
within one hundred eighty (180) days of the Vessel becoming a Total Loss or such
other later day as may be agreed in writing by the Bank, or upon the Vessel
being sold, prepay the Loan together with accrued interest to the date of
prepayment and all other sums payable by the Borrower to the Bank pursuant to
this Agreement and the other Security Documents (and if the Commitment or any
portion thereof has not been drawn yet, it shall be reduced to
zero).

    


    7.5         Unwinding of Designated
Transactions.  On or prior to any repayment or prepayment under
this Clause 7 or any other provision of this Agreement, the Borrower shall
either:

    (a)           wholly
or partially reverse, offset, unwind or otherwise terminate one or more of the
continuing Designated Transactions so that the notional principal amount of the
continuing Designated Transactions thereafter remaining does not and will not in
the future (taking into account the scheduled amortisation) exceed the amount of
the Loan as reducing from time to time thereafter pursuant to Clause 7.1;
or

    (b)           provide
the Bank with additional security in all respects acceptable to the Bank to
secure the amount determined by the Bank to be equal to the difference between
the notional principal amount of the continuing Designated Transactions and the
amount of the Loan as reducing from time to time thereafter pursuant to Clause
7.1

    Provided that in the case of a
prepayment made pursuant to the sale of the Vessel, the Borrower may only carry
out any of the matters referred to in this Clause 7.5 after (and not on or prior
to) the prepayment is made due to the sale of the Vessel.

    


    


    8.          
 INTEREST
AND INTEREST PERIODS

    


    
      	
              8.1.

            	
              Interest
      Rate

            


    

    


    The
Borrower shall pay, on each Interest Payment Date, interest on the Loan (or as
the case may be on each part thereof to which a different Interest Period
relates) at the rate applicable in respect of each Interest Period. Interest
shall accrue on the Loan (or as the case may be on each portion thereof to which
a different Interest Period relates) during each Interest Period from and
including the first day of that Interest Period, to but excluding the last day
thereof. The rate of the interest shall be the rate per annum determined by the
Bank to be the aggregate of (a) the Margin and (b) the LIBOR unless there is an
Agreed Rate in which case the rate for the calculation of interest shall be the
rate per annum determined by the Bank to be the aggregate of:  (a) the
Margin and (b) the Agreed Rate.

    


    
      	
              8.2.

            	
              Interest
      Period

            


    

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
 

    The
Borrower may by written notice to be received by the Bank not later than 10 a.m.
on the second Banking Day before the beginning of each Interest Period specify
whether such next Interest Period shall have a duration of one (1), three (3) or
six (6) months or other period subject to the availability which shall be
determined solely by the Bank.

    


    


    
      	
              8.3.

            	
              Determination
      of Interest Periods

            


    

    


    Every
Interest Period shall be of the duration specified by the Borrower pursuant to
Clause 8.2. but so that:

    


    
      	
              (a)  

            	
              the
      first Interest Period shall commence on the Drawdown Date of the
      Commitment and each subsequent Interest Period in respect thereof shall
      commence on the last day of the immediately preceding Interest Period in
      question

            


    

    


    
      	
              (b)

            	
              if
      the last Interest Period would overrun the last Repayment Date, such
      Interest Period shall end on such Repayment Date. Should an Interest
      Period determined in accordance with the provisions of this Clause overrun
      one or more Repayment Dates, so many additional Interest Periods will be
      specified as the number of the Repayment Dates being overrun by the above
      Interest Period.  Each of such additional Interest Periods will
      be of a duration ending at the corresponding Repayment Date and for an
      amount equal to the instalment due on such Date, while the above
      overrunning Interest Period shall be for the remaining balance of the Loan
      after the deduction of the amount(s) of the additional Interest Period(s)
      ending on the Repayment Date(s) falling within the said over-running
      Interest Period.

            


    

    


    
      	
              (d)

            	
              if
      the Borrower fails to specify the duration of an Interest Period in
      accordance with the provisions of Clause 8.2. and this Clause 8.3 such
      Interest Period shall have a duration of three months or such other period
      as shall comply with this Clause
8.3.;

            


    

    


    
      	
              (e)

            	
              if
      the Bank determines that the duration of an Interest Period specified by
      the Borrower in accordance with Clause 8.2. is not readily available, then
      that Interest Period shall have such duration as the Bank after having
      consulted with the Borrower may
determine.

            


    

    


    
      	
              8.4.

            	
              Default
      Rate.

            


    

    


    If the
Borrower fails to pay any sum (including, without limitation, any sum payable
pursuant to this clause 8.4.) on its due date for payment under any of the
Security Documents, the Borrower shall pay interest on such sum (Default Rate)
from the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Bank to be the aggregate of (a) two per
cent (2%) per annum, (b) the Margin and (c) the LIBOR for periods of not more
than three (3) Month duration as selected by the Bank. The first of the above
periods shall commence on the due date for payment, while each one of the
subsequent periods shall commence on the last day of the preceding such period.
Such interest shall be compounded and shall be due and payable on  the last
day  of each  such period as determined by the Bank and each such


     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    day
shall, for the purposes of this Agreement, be treated as an Interest Payment
Date. If, for the reasons specified in Clause 8.6.(a), the Bank is unable to
determine a rate in accordance with the foregoing provisions of this clause,
interest on any sum not paid on its due date for payment shall be calculated at
a rate determined by the Bank to be two per cent (2%) per annum above the
aggregate of the Margin and the cost of funds to the Bank.

    


    
      	
              8.5.

            	
              Notification

            


    

    


    The
Bank shall notify the Borrower of the duration of each Interest Period and of
each rate of interest determined by it under this Clause 8.

    


    
      	
              8.6.

            	
              Non
      availability.

            


    

    


    
      	
              (a)

            	
              If
      and whenever, at any time prior to the commencement of any Interest
      Period, the Bank shall have determined any of the following facts (which
      determination shall be conclusive):

            


    

    


    
      	
               
      

            	
              (i)

            	
              that
      adequate and fair means do not exist for ascertaining LIBOR during such
      Interest Period; or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              that
      deposits in Dollars are not available to the Bank in the London InterBank
      Market in the ordinary course of business in sufficient amounts or it is
      impracticable for the Bank to fund or to continue to fund the Loan in
      Dollars.

            


    

    


    
      	
               
      

            	
              (iii)

            	
              that
      LIBOR for that Interest Period will not adequately reflect the cost of
      funding the Loan for that Interest
Period.

            


    

    


    the
Bank shall forthwith give notice (a "Determination Notice") thereof to the
Borrower.  A Determination Notice shall contain particulars of the
relevant circumstances giving rise to this issue. After the giving of any
Determination Notice the undrawn amount of the Loan shall not be borrowed until
notice to the contrary is given to the Borrower by the Bank.

    


    
      	
              (b)

            	
              During
      the period of 30 Banking Days after any Determination Notice has been
      given by the Bank under Clause 8.6.(a), the Bank shall certify an
      alternative basis (the "Substitute Basis") for maintaining the Loan. The
      Substitute Basis may (without limitation) include alternative interest
      periods, alternative currencies or alternative rates of interest but shall
      include a margin above the cost of funds to the Bank equivalent to the
      Margin.  Each Substitute Basis so certified shall be binding
      upon the Borrower and shall take effect in accordance with its terms from
      the date specified in the Determination Notice until such time as the Bank
      notifies the Borrower that none of the circumstances specified in
      Sub-clause 8.6.(a) continues to exist whereupon the normal interest rate
      fixing provisions of the Agreement shall
apply.

            


    

    


    
      	
              (c)

            	
              In
      any event, during the thirty (30) days following the giving of a
      Determination Notice, the Borrower and the Bank  shall negotiate
      in good faith in order to arrive at the Substitute Basis for the Bank to
      fund or continue to fund the Loan (or the relevant part thereof) during
      such Interest Period.  If within such thirty (30) day period the
      Substitute Basis to fund or to continue to fund the Loan (or the relevant
      part thereof) is agreed upon, then such Substitute Basis shall take effect
      in accordance with its terms. If the Borrower and the Bank fails to agree
      on such Substitute Basis within such thirty (30) day period and such
      circumstances are continuing at the end of such thirty
  

            


    

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

     

    day period, then the Bank shall set a Substitute Basis as per Clause
8.6. (b). If the circumstance shall continue at the end of such interest period,
the procedure in this Clause 8.6 (c) shall be repeated. If the Borrower shall
not agree with such rate then the Borrower may give not less than fifteen (15)
Business Days irrevocable notice of prepayment to the Bank in which case the
commitment hereunder of the Bank shall thereupon be cancelled and, if the Loan
is outstanding, the Borrower shall prepay the Loan on the first Business Day
after such period in accordance with the terms of this Agreement and the
obligations of the Bank shall thereupon terminate.

     

    


    
      	
              9.            

            	
              THE MASTER SWAP
      AGREEMENT

            


    

    


    
      	
              9.1

            	
              Purpose  The
      Bank and the Borrower have entered, and/or may during the Facility Period
      enter, into one or more Transactions pursuant to a Master Swap Agreement,
      the terms and conditions of each of which are or will be specified in a
      Confirmation sent by the Bank to the
Borrower.

            


    

    


    
      	
              9.2

            	
              Additional Termination
      Event  If the Loan is for any reason not advanced to the
      Borrower on or before the Latest Permissible Drawdown Date, and the Bank
      and the Borrower has entered into any Transactions on or before the Latest
      Permissible Drawdown Date, for the purposes of the Master Swap Agreement
      an Additional Termination Event (with the Bank as the Affected Party)
      shall be deemed to have occurred on the Latest Permissible Drawdown
      Date.

            


    

    


    
      	
              9.3

            	
              Adjustment of Notional
      Amounts  If the aggregate amount of the Loan actually
      advanced by the Bank to the Borrower is less than the Notional Amount (or
      the aggregate Notional Amounts) of the Transactions entered into on or
      before the Drawdown Date, the obligations of the Borrower in respect of
      those Transactions shall, unless otherwise agreed by the Bank, be
      calculated, so far as the Bank considers it practicable to do so, by
      reference to a Notional Amount (or aggregate Notional Amounts) equal to
      the amount of the Loan actually advanced, reduced on each Repayment Date
      by the amount of the Repayment Instalment due on that Repayment Date,
      adjusted if necessary in accordance with Clause
  7.1.

            


    

    


    
      	
              9.4

            	
              Effect of
      prepayment  If the Borrower, subject always to Clause 7,
      prepay part of the Loan (whether pursuant to Clause 7, Clause 13.5.2 or
      any other provision of this Agreement), and the amount of the Loan
      remaining outstanding after application of that prepayment is less than
      the Notional Amount (or the aggregate Notional Amounts) of the
      Transactions then in effect (reduced, if appropriate, in accordance with
      the Confirmations relating to those Transactions), the obligations of the
      Borrower in respect of those Transactions shall, unless otherwise agreed
      by the Bank, be calculated, so far as the Bank considers it practicable to
      do so, by reference to a Notional Amount (or aggregate Notional Amounts)
      equal to the amount of the Loan remaining outstanding after application of
      the prepayment in question, reduced on each Repayment Date by the
      Repayment Instalment due on that Repayment Date after taking into account
      the application of the prepayment.

            


    

    


    
      	
              9.5

            	
              Authority  In
      order to give effect to Clauses 9.3 and 9.4, or in the event of voluntary
      or compulsory  prepayment by the Borrower of the whole of the
      Loan, the Borrower and the Bank will agree to amend, restructure, unwind,
      cancel, net out, terminate, liquidate, transfer or assign any of the
      rights and/or obligations created pursuant to the Master Swap Agreement in
      respect of those Transactions, and/or to enter into any other interest
      rate exchange and/or hedging transaction or commitment with the Borrower
      or with any other counterparty approved by the
  Bank.

            


    

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    
 

    
      	
              9.6

            	
              Termination of
      Transactions  If the exercise of the Bank's rights under
      Clause 9.5 results in the termination of any Transaction (save in the case
      termination takes place due to voluntary prepayment), that Transaction
      shall, for the purposes of the Master Swap Agreement (including, without
      limitation, section 6(e)(i) of the Master Swap Agreement) be treated as a
      Terminated Transaction resulting from an Event of Default by the
      Borrower.

            


    

    


    
      	
              9.7

            	
              Indemnity  The
      Borrower will indemnify the Bank from time to time on demand in respect of
      all liabilities, losses, costs or expenses suffered, incurred or sustained
      by the Bank arising in any way in relation to the exercise by the Bank of
      its rights under this Clause, or arising in any way from any other
      termination, cancellation, unwinding or restructuring of any Transaction,
      together (in each case) with interest at the Default Rate from the date of
      the Bank's demand until the date on which the Bank receives payment or
      reimbursement, before or after any relevant
  judgment.

            


    

    


    
      	
              9.8

            	
              Transaction under the Master
      Swap Agreement. The Borrower
      on the date hereof is signing the Master Swap Agreement with the Bank. At
      any time during the Facility Period the Borrower may request the Bank to
      conclude Transactions for the purpose of swapping its interest payment
      obligations under this Agreement.  Signature of the Master Swap
      Agreement does not commit the Bank to conclude Transactions, or even to
      offer terms for doing so, but does provide a contractual framework within
      which Transactions may be concluded and secured, assuming that the Bank is
      willing to conclude any Transactions at the relevant time and that, if
      that is the case, mutually acceptable terms can then be agreed at the
      relevant time.

            


    

    


    
      	
               
      

            	
              9.8.1

            	
              In
      relation to the Master Swap Agreement, the Borrower hereby agrees and
      undertakes with the Bank throughout the Facility
  Period:-

            


    

    


    
      	
               
      

            	
              9.8.1.1

            	
              at
      the Borrower's option to use Transactions concluded under the Master Swap
      Agreement for the purpose of (inter alia) swapping its interest payment
      obligations under Clause 8 from LIBOR-based funding to longer-term fixed
      rate funding;

            


    

    
      	
               
      

            	
              9.8.1.2

            	
              at
      the Borrower's option to not to conclude Transactions which would result,
      at any time during the Facility Period, in the notional principal amount
      of all Transactions then remaining exceeding the amount of the Loan, as
      reduced from time to time under Clause
7.1.

            


    

    


    
      	
               
      

            	
              9.8.2

            	
              The
      Borrower gives the Bank a right of first refusal in relation to any
      proposed swap or other Transactions relative to the Loan so that (subject
      only to the rates quoted by the Bank being competitive with other banks
      quoting on the same basis), any swap or other Transactions concluded by
      the Borrower shall be concluded with the Bank under the Master Swap
      Agreement.

            


    

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              9.8.3

            	
              The
      Bank agrees that, to enable the Borrower to secure its obligations to the
      Bank under the Master Swap Agreement, the security of the Security
      Documents shall be held by the Bank not only to secure the Borrower's
      obligations under this Agreement but also the Borrower's obligations under
      the Master Swap Agreement.

            


    

    


    


    10.          PAYMENTS ACCOUNTS &
CALCULATIONS

    


    
      	
              10.1.

            	
              Not
      set off or counterclaim and no
deductions.

            


    

    


    
      	
              (a)

            	
              The
      Borrower acknowledges that in performing its obligations under this
      Agreement, the Bank will be incurring liabilities to third parties in
      relation to the funding of amounts to the Borrower, such liabilities
      matching the liabilities of the Borrower to the Bank and that it is
      reasonable for the Bank to be entitled to receive payments from the
      Borrower gross on the due date in order that the Bank is put in a position
      to perform its matching obligations to the relevant third parties.
      Accordingly, all payments to be made by the Borrower under any of the
      Security Documents shall be made in full, without any set-off or
      counterclaim whatsoever and free and clear of any deductions or
      withholdings, in Dollars on the due date (for value on the day on which
      payment is due) to the account of the Bank (with a direct tested telex
      advise to the Bank) or to such other account at such other bank in such
      place as the Bank may from time to time specify for this
      purpose.

            


    

    


    
      	
              (b)

            	
              If
      at any time the Borrower is required to make any deduction or withholding
      in respect of Taxes or otherwise from any payment due under any of the
      Security Documents the sum due from the Borrower in respect of such
      payment shall be increased to the extent necessary to ensure that after
      the making of such deduction or withholding the Bank receives on the due
      date for such payment a net sum equal to the sum which it would have
      received had no such deduction or withholding been required to be made.
      The Borrower shall indemnify the Bank against any losses or costs incurred
      by the Bank by reason of any failure of the Borrower to make any such
      increased payment to the Bank on account of any deduction or withholding
      or by reason of any increased payment not being made on the due date for
      such payment. The Borrower shall promptly forward to the Bank official
      receipts and any other proof evidencing the amounts paid or payable in
      respect of any deduction or withholding as aforesaid. The obligations of
      the Borrower under this provision shall remain in force notwithstanding
      the repayment of the Loan.

            


    

    


    
      	
              (c)

            	
              Payments
      by the Borrower shall be considered to be made as of the date on which the
      Bank receives correctly authenticated advice of the credit of such account
      provided that such advice is received at a time of day when the Bank is
      able in accordance with its usual practice to process and utilize such
      funds on such day, failing which such payment shall be considered to be
      made as of the next Banking Day following receipt of such
      advice.

            


    

    


    
      	
              10.2.

            	
              Payments
      by the Bank.

            


    

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

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
 

    
      	
              10.3.

            	
              Calculation

            


    

    


    All
interest and other payments periodic or payable by reference to a rate per annum
under this Agreement shall accrue from day to day and be calculated on the basis
of actual number of days elapsed and a 360 day year.

    


    


    11.          UNLAWFULNESS AND INCREASED
COSTS

    


    
      	
              11.1.

            	
              Unlawfulness.

            


    

    


    
      	
              (a)  

            	
              If
      it is or becomes contrary to any law or regulation for the Bank to
      disburse the Loan or to maintain the Commitment or the Loan, or to fund
      the Loan or to claim or receive any amount payable to it hereunder, the
      Bank shall give notice to the Borrower whereupon (a) the Commitment shall
      be reduced to zero and (b) the Borrower shall be obliged to prepay the
      Loan on a future specified date not being later than the latest
      date

            


    

    
      	
              (b)  

            	
              permitted
      by the relevant law or regulation, or, if such date is not provided,
      within 40 days from the notice of the Bank, together with interest accrued
      to the date of prepayment and all other sums payable by the Borrower under
      the Security Documents.

            


    

    


    
      	
              (c)  

            	
              If
      circumstances arise which would result in a Notification under Clause
      11.1. then, without in any way limiting the rights of the Bank under
      Clause 11.1., the Bank shall use reasonable endeavours to transfer each
      obligations, liabilities and rights under the Security Documents to
      another office or financial institution not affected by the
      circumstances.

            


    

    


    


    
      	
              11.2.

            	
              Increased
      Cost.

            


    

    


    If, as
a result of (a) any change in or in the interpretation of any law, regulation
e.t.c. by any governmental authority in any country the laws of which are
applicable on the Bank, or  (b) compliance by the Bank with any
requirement of any authority (whether or not having the force of law) but which
the Bank usually complies with or  any other set of circumstances
including any type of liquidity, stock, or capital adequacy controls or other
Banking or monetary controls or requirements connected with the manner in which
the Bank allocates capital resources to its obligations hereunder:

    


    
      	
              (a)

            	
              The
      cost to the Bank of making available the Commitment or any part thereof or
      maintaining or funding the Loan is increased;
or

            


    

    


    
      	
              (b)

            	
              The
      amount payable to the Bank or the effective return to the Bank under any
      of the Security Documents, is reduced;
or

            


    

    


    
      	
              (c)

            	
              The
      basis of taxation of payments to the Bank of principal or of interest on
      any amounts advanced by it is
changed;

            


    

    


    then
the Borrower shall pay to the Bank on account of the Bank, from time to time,
upon demand, such additional moneys as shall indemnify the Bank for any
increased cost, reduction in principal or interest receivable or other foregone
return whatsoever.

    The
Bank will notify the Borrower in writing of any intention to claim
indemnification and such notification, made in line with the provision of Clause
6,  which  will be a conclusive  evidence binding on the Borrower
as to the  amount of any increased 

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    cost or
reduction and the method of calculating the same. Such claim may be made at any
time and must be discharged by the Borrower within fifteen (15) days of
demand.  It shall not be a defence to a claim by the Bank hereunder
that any increased cost or reduction could have been avoided by the
Bank.  Any amount due from the Borrower hereunder shall be due as a
separate debt and shall not be affected by judgement being obtained for any
other sums due under or in respect of this Agreement or of any other Security
Document.

    


    


    12.          SECURITY

    


    
      	
              12.1.

            	
              Security
      Documents

            


    

    


    As
security for the due repayment of all sums from time to time payable to the
Bank, the Borrower shall ensure and procure that the following Security
Documents are duly executed and, where required properly registered in favour of
the Bank at the time specified herein or otherwise as required by the Bank and
ensure that such security, apart from this Agreement, consists of

    


    
      	
              (a)  

            	
                A
      Master Swap Agreement and the relevant Schedule attached thereto (the
      "Master Swap
      Agreement") executed by the Borrower in form and substance
      satisfactory to the Bank;

            


    

    


    
      	
              (b)  

            	
                A
      Master Agreement Security Deed (the "Master Agreement Security
      Deed") executed or (as the context may require) to be executed by
      the Borrower in favour of the Bank;

            


    

    


    
      	
              (c)  

            	
                A
      Corporate Guarantee from the Corporate Guarantor in form and substance
      satisfactory to the Bank (the "Corporate
      Guarantee");

            


    

    


    
      	
              (d)  

            	
              A
      duly registered First Preferred Mortgage over the Vessel providing on the
      basis of the provisions of the applicable law the highest degree of
      security for the Bank (the "Mortgage");

            


    

    


    
      	
              (e)  

            	
              A
      first Priority General Assignment of all the Insurances, Earnings, and
      Requisition Compensation for the Vessel in form and substance satisfactory
      to the Bank and respective notices of assignment and acknowledgements
      thereof (the "General Assignment");

            


    

    


    
      	
              (f)  

            	
              Specific
      assignment of the benefit of the Charter in respect of the Vessel
      chartered and respective notices and acknowledgements thereof (the "Specific
      Assignment").

            


    

    


    
      	
              (g)  

            	
                Pledge
      agreement(s) in form and substance satisfactory to the Bank executed or
      (as the context may require) to be executed by the Borrower or by the
      Corporate Guarantor in favour of the Bank creating security in respect of
      the Operating Account for the Vessel (the "Operating Account
      Pledge(s)")

            


    

    


    
      	
              (h)  

            	
              A
      pledge agreement in form and substance satisfactory to the Bank executed
      or (as the context may require) to be executed by the Borrower in favour
      of the Bank in respect of the Retention Account (the "Retention Account
      Pledge");

            


    

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (i)  

            	
              Manager's
      undertaking in form and substance satisfactory to the Bank pursuant to
      which the Manager will subrogate its rights to the Loan throughout the
      Facility Period (the "Manager's
      Undertaking").

            


    

    


    


    13.          COVENANTS

     

    The
Borrower covenants with the Bank that, from the date of this Agreement and as
long as any sums are due and/or owing and/or outstanding under this Agreement or
any of the other Security Documents, the Borrower will:

     

    13.1.       Information
Covenants.

    


    
      	
              13.1.1.  

            	
              Furnish
      the Bank, in form and substance satisfactory to the Bank, with annual,
      consolidating and consolidated financial statements of the Borrower, the
      Corporate Guarantor and of any other of the companies of the Group within
      180 days after the end of the financial year concerned, and prepared in
      accordance with generally accepted accounting principles consistently
      applied;

            


    

    
      	
              13.1.2.  

            	
              Provide
      the Bank from time to time as the Bank may reasonably request and in form
      and substance satisfactory to the Bank with any information on the
      financial conditions commitments and operations of the Borrower and of any
      other of the companies of the
Group.

            


    

    


    
      	
              13.1.3.  

            	
              Promptly
      inform the Bank of any occurrence which came to the knowledge of the
      Borrower which might adversely affect the ability of the Borrower or any
      other Security Party to perform its respective obligations under this
      Agreement and/or any of the other Security Documents and of any Event of
      Default forthwith upon becoming aware
thereof;

            


    

    


    
      	
              13.1.4.  

            	
              Promptly
      inform the Bank of all major financial developments in the Group such as
      new loans, refinancing/restructuring of existing loans, new acquisitions
      and sales, contracts for term employment of Vessel
  e.t.c.

            


    

    


    


    
      	
              13.2.  

            	
              Banking
      Arrangements.

            


    

    


    
      	
              13.2.1.  

            	
              Use
      the Loan exclusively for the purpose specified in this
      Agreement;

            


    

    


    
      	
              13.2.2.  

            	
              Ensure
      that all obligations under this Agreement and the other Security Documents
      will be duly and punctually
performed.

            


    

    


    
      	
              13.2.3.  

            	
              Pay
      to the Bank on demand any sum of money which is payable to the Bank under
      this Agreement and the other Security Documents but in respect of which it
      is not specified in any other Clause when it is due and
      payable;

            


    

    


    
      	
              13.2.4.  

            	
              Accept
      that a Certificate of any of the Bank or a statement of account executed
      by two authorised officers of any of the Bank or an Extract of the Books
      of any of the Bank certified by an officer of the Bank shall (save for
      manifest error) be conclusive evidence of the amount due under this
      Agreement and shall be final and binding on all parties
      hereto;

            


    

    


    
      	
              13.2.5.  

            	
              Upon
      request by the Bank from time to time provide such information and
      evidence to the Bank as the Bank would require to demonstrate compliance
      with the covenants and warranties set forth in this Agreement and any
      other Security Document.

            


    

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
 

    


    
      	
              13.3.  

            	
              Financial
      Exposure.

            


    

    


    
      	
              13.3.1.  

            	
              Incur
      no debt and grant no guarantee to and/or in favour of anybody except in
      the ordinary course of business, without the prior written consent of the
      Bank, which shall not be unreasonably
withheld.

            


    

    


    
      	
              13.3.2.  

            	
              Not
      give any loans or credits or advances to any person, or entity without the
      previous consenting opinion of the Bank which shall not be unreasonably
      withheld;

            


    

    


    
      	
              13.3.3.  

            	
              Not
      declare or pay any dividends or other distribution in case of an Event of
      Default without the prior written consent of the
  Bank;

            


    

    


    
      	
              13.3.4.  

            	
              Not
      transfer, sell or otherwise dispose any of its real or personal property,
      assets or rights, whether present or future, without the prior written
      consent of the Bank or allow any part of its undertaking, property, assets
      or rights, whether present or future, to be mortgaged, charged, pledged,
      used as a lien (except for lien created by law) or otherwise encumbered
      without the prior written consent of the
Bank;

            


    

    


    
      	
              13.3.5.  

            	
              Ensure
      that the Indebtedness of the Borrower to the Bank hereunder will not be
      subordinated in priority of payment to any other present or future
      claim.

            


    

    


    
      	
              13.3.6

            	
              Ensure
      that the Borrower or the Corporate Guarantor will maintain throughout the
      Facility Period in an account with the Bank free and unencumbered (save in
      favour of the Bank) minimum liquidity balances equal to United States
      Dollars three thousand
(USD300,000).

            


    

    


    
      	
              13.3.7

            	
              Ensure
      that the aggregate debt to equity ratio  of
      the  vessels  owned by the Corporate Guarantor will
      not exceed 75% of their aggregate current market values obtained on a
      charter free basis by a broker appointed by and reporting to the Bank, the
      latter having the right to obtain such valuations on a quarterly
      basis

            


    

    


    
      	
              13.3.8

            	
              Ensure that the minimum Net
      Worth of the
      Corporate Guarantor listed in Nasdaq will be United States Dollars fifteen
      million (USD15,000,000)

            


    

    


    
      	
              13.3.9

            	
              Not
      without the Bank's prior written consent assign, novate or in any other
      way transfer any of its rights or obligations under or pursuant to the
      Master Swap Agreement, nor enter into any interest rate exchange or
      hedging agreement with anyone other than the Bank, nor any other agreement
      or commitment the effect of which is, in the opinion of the Bank,
      materially to prejudice the hedging of the Borrower's interest rate risk
      effected by the Transaction from time to time entered into between the
      Borrower and the Bank.

            


    

    


    


    
      	
              13.4.

            	
              Business
      and Corporate Structure.

            


    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    
 

    
      	
              13.4.1.  

            	
              Not
      change the nature, organisation and conduct of the business of the
      Borrower and/or the Corporate Guarantor as shipowner and/or Manager of the
      Vessel as the case may be;

            


    

    


    
      	
              13.4.2.  

            	
              Not
      merge or consolidate with any other company or other legal
      entity;

            


    

    


    
      	
              13.4.3.  

            	
              On
      demand and in any event on the thirty-first day of May in each year
      deliver or cause to be delivered to the Bank official certificates from
      the relevant authority confirming that the Borrower and any other
      corporate Security Party is in good standing in its country of
      incorporation;

            


    

    


    
      	
              13.4.4.  

            	
              Ensure
      that there is no change in the Directors and Officers of the Borrower and
      of any other corporate Security Party and moreover ensure that no change
      shall be made directly or indirectly in the ownership, beneficial
      ownership, control or management of the Borrower without the prior written
      consent of the Bank, which shall not be unreasonably
    withheld.

            


    

    


    


    
      	
              13.5.  

            	
              Obligation
      to maintain the Security Value.

            


    

    


    
      	
              13.5.1.  

            	
              At
      all times the Borrower will procure that the value of the Vessel and other
      security to be granted to the Bank pursuant to this Clause (the "Security Value") is not
      less than the Minimum Value at any
time.

            


    

    


    
      	
              13.5.2.  

            	
              If
      the Security Value is less than the Minimum Value at any time, the
      Borrower will within thirty (30) days of a request by the Bank and in
      order to secure the Indebtedness on such terms as may be acceptable to the
      Bank:

            


    

    


    
      	
                      
      i.  

            	
              prepay
      a proportionate part of the Loan and of the Swap Exposure;
      and/or

            


    

    


    
      	
                       
      ii.  

            	
              procure
      for or grant to the Bank such other security as the Bank shall expressly
      approve for the purpose of this Clause
13.5.

            


    

    


    so that
after such prepayment or grant of other security, the Security Value is not less
than the Minimum Value.

    


    
      	
              13.5.3.

            	
              As
      far as clause 13.5.2.(ii) is concerned
:

            


    

    


    
      	
                       
      i.  

            	
              cash
      provided by way of security shall be valued in Dollars at its principal
      amount;

            


    

    


    
      	
                        
      ii.  

            	
              any
      other security shall be valued on such basis as the Bank shall reasonably
      determine in its discretion from time to
    time;  and

            


    

    


    
      	
                        
      iii.  

            	
              there
      shall be deducted from any value or valuation the amount which is owing
      and might become owing and which is secured on the asset concerned by any
      prior or equal ranking Security Interest (other than in favour of the Bank
      to secure the Indebtedness).

            


    

    


    
      	
                         
      iv.  

            	
              cash
      deposits and/or any other security acceptable to the Bank it will be
      provided in a way and manner also acceptable to the
  Bank.

            


    

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
              13.5.4.  

            	
                At
      least once every year and/or at any time that the Bank might consider it
      useful and reasonably request the Borrower to undertake to have at its own
      cost the Vessel valued with or without physical inspection (as the Bank
      may require) in Dollars, on the basis of sale for prompt delivery free of
      Encumbrances in favour of the Bank for cash at arm's length on normal
      commercial terms as between a willing seller and a willing buyer by an
      independent shipbroker selected by or acceptable to the Bank and reporting
      to the Bank. Such valuation shall be made on the basis of the value of the
      Vessel charter free. The Borrower agrees to accept the valuation made as
      aforesaid as conclusive evidence of the market value of the Vessel at the
      date of valuation. The Borrower will supply to the Bank and to the above
      shipbrokers such information as such shipbrokers shall
      require.

            


    

    


    


    13.6.       Covenants
concerning the Vessel.

    
      	
              13.6.1.  

            	
                Ensure
      that the Vessel will maintain its present ownership, management, control
      and ultimate beneficial ownership;

            


    

    


    
      	
              13.6.2.  

            	
              Ensure
      that the Vessel is and will remain properly certified in respect with the
      ISM Code and in compliance with the ISO 9001 and the ISPS code when
      applicable and moreover that it will remain in class free of
      recommendations, notations or average damage affecting class and provide
      the Bank on demand with copies of all ISM and/or all class and/or trading
      certificates of the Vessel.

            


    

    


    
      	
              13.6.3.  

            	
              Ensure
      that at all times the Vessel is managed by the Manager or by such company
      as may be approved in writing by the Bank and that such company is and
      will remain ISM certified and in compliance with the ISO 9001 and the ISPS
      Code when applicable and that it shall maintain at all times an
      organisation and personnel which in the opinion of the Bank is adequate to
      provide sufficient management, agency, financial, secretarial and other
      services for the Vessel.

            


    

    


    
      	
              13.6.4.  

            	
              Maintain
      all Insurances of the Vessel and comply with all insurance requirements
      specified in this Agreement (including in particular Schedule II) and in
      case it fails to maintain the Vessel and/or such other property so
      insured, the Borrower hereby, for the purpose of serving the interest of
      the Bank, irrevocably authorises the Bank and grant to it the right to
      effect the insurances of the Vessel and/or of the property as provided for
      in Schedule II in the amount and in terms acceptable to the Bank from time
      to time at the cost and on behalf of the Borrower.  The Bank
      will have the right but not the obligation to effect all or any of such
      insurances at the cost of the Borrower and such cost shall consist
      Expenses in the meaning of the Clause
1;

            


    

    


    
      	
              13.6.5.  

            	
              Supply
      copies of all cover notes, certificates of entry, insurance policies and
      documents and furnish details of all insurances contemplated by Schedule
      II and/or contracted to the Bank. The Bank may submit all such insurance
      documents for examination to an insurance consultant nominated by the
      Bank. The Bank will be at liberty to decide on the adequacy and the
      compliance of the cover with the provisions of the Security Documents
      including Schedule II and its decision shall be final and binding on the
      Borrower. The cost including Value Added Tax of such insurance consultant
      shall be considered as Expenses;

            


    

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    
 

    
      	
              13.6.6.  

            	
              The
      Bank will be at liberty to conduct at the Borrower's cost physical
      condition survey of the Vessel and a comprehensive record inspection by a
      surveyor appointed by the Bank.

            


    

    


    
      	
              13.6.7.  

            	
              At
      the Bank's reasonable request, promptly provide a consultant nominated and
      appointed by the Bank to monitor the collection of claims of whatsoever
      nature with whatever information and documentation the Bank shall
      require.  All the cost including Value Added Tax in respect of
      the appointment of such consultant shall be considered as
      Expenses;

            


    

    


    
      	
              13.6.8.  

            	
              Not
      grant or permit any charge, lien (except for lien created by law)or other
      encumbrance to be imposed upon the Vessel or otherwise dispose of any of
      its rights under any charterparty or contract of affreightment relating to
      the Vessel or any other earnings of the
Vessel;

            


    

    


    
      	
              13.6.9.  

            	
              Ensure
      that the Vessel is maintained and trade in conformity with the laws of its
      flag, of its owning company or of the nationality of the officers, or
      crew, and in conformity with the requirements of the Insurances and
      nothing is done or permitted to be done which could endanger the flag of
      the Vessel, or its free ownership and operation or its
      Insurances;

            


    

    


    
      	
              13.6.10  

            	
              Always
      comply with all the covenants provided for in the mortgage on the
      Vessel

            


    

    


    
      	
              13.6.11.

            	
              Not
      without the prior written consent of the Bank enter into a charterparty,
      contract of affreightment, agreement or related document in respect of the
      employment of the Vessel (i) for a period of more than twelve (12) months
      or (ii) below the market rate prevailing at the time when the Vessel is
      fixed in or on terms which are not in accordance with the commercial
      practice prevailing at the relevant time or (iii) on demise
      charterparty;

            


    

    


    
      	
              13.6.12

            	
              Execute
      and deliver to the Bank within fifteen (15) days of signing of any
      charter, the duration of which is to be for a period, directly or by
      extension of more than twelve (12) months: (a) a specific assignment of
      such charter in form and substance satisfactory to the Bank and (b) a
      notice of any such assignment addressed to the relevant charterer and
      endorsed with an acknowledgement of receipt by the relevant charterer all
      in form and substance satisfactory to the
Bank;

            


    

    


    
      	
              13.6.14.

            	
              The
      Borrower undertakes to notify the Bank
  forthwith:

            


    

    


    
      	
              (a)  

            	
              of
      any Environmental claim for an amount exceeding USD 300,000 made
      against the Vessel and/or its
owner.

            


    

    


    
      	
              (b)  

            	
              upon
      becoming aware of any incident which may give rise to an Environmental
      Claim and to keep the Bank advised in writing of the owners' response to
      such Environmental claim on such regular basis and in such detail as the
      Bank shall require.

            


    

    


    


    
      	
              13.7.

            	
              Validity
      of securities

            


    

    


    
      	
              13.7.1.  

            	
              Ensure
      and procure that all approvals or consents and/or any other steps required
      for the validity, enforceability and legality of this Agreement and the
      other Security Documents and for the performance thereof by the Borrower
      and any other Security Party are appropriately taken and are maintained in
      full force and effect.

            


    

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    
 

    
      	
              13.7.2.  

            	
              Ensure
      and procure that, unless and until directed by the Bank otherwise (i) all
      the Earnings of the Vessel shall be paid to the Operating Account and (ii)
      the persons from whom the Earnings are from time to time due are
      irrevocably instructed to pay them to the Operating Account in accordance
      with the provisions hereof and of the relevant Security
      Documents;

            


    

    


    
      	
              13.7.3.  

            	
              Pay
      all Taxes, and other governmental charges when the same fall due, except
      to the extent that the same are being contested in good faith by
      appropriate proceedings and adequate reserves have been set aside for
      their payment if such proceedings
fail;

            


    

    


    
      	
              13.7.4.  

            	
              From
      time to time at the request of the Bank execute and deliver to the Bank or
      procure the execution and delivery to the Bank of all such documents as
      shall be deemed desirable at the sole discretion of the Bank for giving
      full effect to this Agreement, and for perfecting, protecting the value of
      or enforcing any rights or securities granted to the Bank under the
      Security Documents and any other documents executed pursuant hereto or
      thereto.

            


    

    


    
      	
              13.7.5.  

            	
              The
      covenants specified in this Clause are inserted solely for the benefit of
      the Bank and may be waived in whole or in part and with or without
      conditions by the Bank without prejudicing the right of the Bank to
      require fulfillment of such covenants at such time and manner as specified
      by the Bank.

            


    

    


    


    
      	
              13.8.

            	
              Admission,
      and warranties of the Security Parties as regards their
      liability.

            


    

    


    
      	
              (a)  

            	
              The
      giving of the Corporate Guarantee by the Guarantor is to the commercial
      benefit of such Guarantor in that the Guarantor has close financial
      cooperation and mutual assistance with the Borrower and that by lending
      its support to the Borrower through such Guarantee it further its own
      business interests within the scope of its constitutional
      documents;

            


    

    


    
      	
              (b)  

            	
              The
      liability of the Borrower and of the other Security Parties shall in all
      cases, whether so expressed to be or not, be joint and several and each
      representation and warranty and each covenant and agreement made or given
      or to be made or given by any one of them will be considered as made or
      given by them all jointly and
severally;

            


    

    


    
      	
              (c)  

            	
              The
      Borrower further represents that none of the Security Parties shall be
      exonerated and its liability hereunder shall not be lessened or impaired
      by any time, indulgence or relief being given by the Bank to any other
      Security Party or by the variation, compromise, renewal or release of or
      refusal or neglect to perfect or enforce any right, remedies or securities
      against the Borrower or any other Security Party, by anything done or
      omitted which but for this provision might operate to exonerate any other
      Security Parties;

            


    

    


    
      	
              (d)  

            	
              The
      obligations of the Borrower shall not be affected by any legal limitation,
      disability, incapacity or other circumstances relating to any other
      Security Party, whether or not known to the Bank, by any invalidity in or
      irregularity or unenforceability of the obligations of such other Security
      Party under any of the Security Documents or otherwise or by any change in
      the constitution of, or any amalgamation or reconstruction of any Security
      Party or of the Bank.

            


    

    


    


    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    


    14.          EVENTS OF
DEFAULT

    


    The
following events shall constitute an Event of Default (whether or not caused by
any reason whatsoever outside the control of the Borrower or whether such Event
shall occur or come about by operation of Law or regulation or pursuant to, or
in compliance with any judgment, decree or order of any Court or other
authority):

    


    


    


    14.1.             Non
Performance of Obligations.

    


    
      	
              14.1.1.  

            	
              If
      the Borrower and/or any other Security Party fail to pay any sum due
      hereunder and/or under the other Security Documents when due, or in the
      case of any sum payable on demand, within seven (7) Banking Days of such
      demand;

            


    

    


    
      	
              14.1.2.  

            	
              If
      the Borrower and/or any other Security Party fail to obtain and/or
      maintain the Insurances (as defined in Schedule II) or if any insurer in
      respect of such Insurances becomes entitled to cancel the insurances or to
      disclaim liability;

            


    

    


    
      	
              14.1.3.  

            	
              If
      the Borrower and/or any other Security Party default in the due
      performance and/or observance of any covenant, term, obligation or
      undertaking under this Agreement and/or any of the other Security
      Documents (other than those referred to in sub-Clauses 14.1.1. and 14.1.2.
      hereinabove). In case such default is in the opinion of the Bank, capable
      of remedy, if it will continue unremedied for seven (7) Banking Days after
      its occurrence.

            


    

    


    


    
      	
              14.2.

            	
              Representations
      incorrect

            


    

    


    If any
representation or warranty explicitly made or implied by or in respect of the
Borrower pursuant to the Security Documents proves to have been incorrect
or

    misleading
in a material way when made or at any time during the currency of this
Agreement.

    


    


    
      	
              14.3.

            	
              Events
      affecting the Borrower and/or any other Security
  Party

            


    

    


    
      	
              14.3.1.  

            	
              If
      a creditor of the Borrower attaches or takes possession of, or a distress
      execution, sequestration or other process is levied or enforced upon or
      sued against the whole or any part of the property of the Borrower and/or
      any other Security Party and it is not discharged within fifteen (15)
      Banking days;

            


    

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    
 

    
      	
              14.3.2.  

            	
              If
      the Borrower and/or any other Security Party is found bankrupt or
      insolvent or any order is made by any competent court or resolution passed
      by the Borrower and/or any other Security Party or petition presented for
      the winding-up or dissolution of the Borrower and/or any other Security
      Party or for the appointment of a liquidator, trustee, receiver,
      administrator or conservator of any part of the undertakings, assets,
      rights or revenues of the Borrower and/or any other Security
      Party;

            


    

    


    
      	
              14.3.3.  

            	
              If
      the Borrower and/or any other Security Party suspend payment of their
      debts or are (or are reasonably deemed to be) unable to or admit inability
      to pay their debts as they fall due or propose or enter into any
      composition or other arrangement for the benefit of creditors generally or
      proceedings are commenced in relation to the Borrower and/or any other
      Security Party relating to reconstruction or readjustment of
      debts;

            


    

    


    
      	
              14.3.4.  

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

            


    

    


    
      	
              14.3.5.  

            	
              If
      a material part of the undertakings, assets, rights or revenues of the
      Borrower and/or any other Security Party are seized, nationalised,
      expropriated or compulsorily acquired by or under the authority of any
      government;

            


    

    


    
      	
              14.3.6.  

            	
              If
      any event occurs or proceeding is taken with respect to the Borrower
      and/or any other Security Party in any jurisdiction to which anyone of
      them is subject which has an effect equivalent or similar to any of the
      events mentioned in Clauses 14.3.1. to
14.3.5.;

            


    

    


    
      	
              14.3.7.  

            	
              If
      the Borrower and/or any other Security Party suspend or threaten to
      suspend or cease to carry on its
business;

            


    

    


    
      	
              14.3.8.  

            	
              If
      there occurs, in the opinion of the Bank, a materially adverse change in
      the financial condition of the Borrower and/or any Security
      Party;

            


    

    


    
      	
              14.3.9.  

            	
              If
      any other event occurs not mentioned in this Clause 14.3. or circumstances
      arise which, in the reasonable opinion of the Bank, is likely adversely to
      affect either  (i) the ability of the Borrower and/or any other
      Security Party to perform all or any of their obligations under or
      otherwise to comply with the terms of this Agreement and/or any of the
      other Security Documents, or (ii) the security created by this Agreement
      and/or any of the other Security
Documents;

            


    

    


    
      	
              14.3.10.  

            	
              If
      there is any change in the beneficial ownership of the shares in the
      Borrower and/or any other Security Party as declared to the Bank prior to
      the execution hereof or as represented to the Bank in the Certificate of
      beneficial shareholding given to the Bank pursuant to Schedule I, Part
      1.

            


    

    


    
      	
              14.3.11.  

            	
              If
      any debt of any Security Party is not paid when due or any debt of any
      Security Party becomes due and payable prior to the date when it would
      otherwise have become due (unless as a result of the exercise by the
      relevant Security Party of a voluntary right of prepayment), or any
      creditor of any Security Party becomes entitled to declare its claim due
      and payable, or any facility or commitment available to any Security Party
      is withdrawn, suspended or cancelled by reason of any default (however
      described) of such Security Party;

            


    

    


     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
 

    14.4.       Events
affecting the Security Documents

    


    
      	
              14.4.1.  

            	
              If
      this Agreement or any of the other Security Documents shall at any time
      and for any reason become invalid or unenforceable or otherwise cease to
      remain in full force and effect, or if the validity or enforceability of
      any of the Security Documents shall at any time and for any reason be
      contested by any party thereto (other than the Bank), or if any such party
      shall deny that it has any, or any further, liability thereunder or shall
      otherwise repudiate any of the Security Documents or do or cause or permit
      to be done any act or thing evidencing an intention to repudiate this
      Agreement or any of the other Security Documents or it becomes impossible
      or unlawful for the Borrower and/or any other Security Party to fulfill
      any of its covenants and obligations contained in this Agreement or any of
      the other Security Documents or for the Bank to exercise the rights or any
      of them vested in them thereunder or
otherwise;

            


    

    


    
      	
              14.4.2.  

            	
              If
      any Encumbrance in respect of any of the properties (or part thereof)
      which belongs to the Security Parties (or any of them) becomes
      enforceable.

            


    

    


    
      	
              14.4.3.  

            	
              If
      a notice is sent by the Bank under section 6(a) of the Master Swap
      Agreement, or by any person under section 6(b)(iv) of the Master Swap
      Agreement, in either case designating an Early Termination Date for the
      purpose of the Master Swap Agreement, or if the Master Swap Agreement is
      for any other reason terminated, cancelled, suspended, rescinded, revoked
      or otherwise ceases to remain in full force and effect;
  or

            


    

    


    


    14.5.       Events
concerning the Vessel

    


    
      	
              14.5.1.  

            	
              if,
      due to Borrower's default, any charter or contract of affreightment
      relating to the Vessel for the time being mortgaged to the Bank hereunder
      ceases for more than thirty (30) days (other than complete performance in
      accordance with its terms) to be in full force and
  effect.

            


    

    


    
      	
              14.5.2.  

            	
              If
      the Vessel either:

            


    

    


    
      	
              (a)  

            	
              becomes
      a Total Loss or

            


    

    


    
      	
              (b)  

            	
              suffers
      damage or is involved in an accident which in the opinion of the Bank may
      result in being subsequently considered to be a Total Loss or which may
      otherwise reduce the security of the
Bank.

            


    

    


    
      	
              14.5.3.  

            	
              If
      the registration of the Vessel under the laws and flag of the Flag State
      is cancelled or terminated without the prior written consent of the
      Bank.

            


    

    


    
      	
              14.5.4.  

            	
              If
      the Flag State of the Vessel becomes involved in hostilities or civil war
      if, in any such case, such event could in the opinion of the Bank
      reasonably be expected to have a material adverse effect on the security
      constituted by any of the Security Documents and Borrower fails to comply
      with the Bank's request to change flag acceptable to the Bank within
      fifteen (15) Banking Days.

            


    

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    
 

    
      	
              14.6.  

            	
              Environmental
      Events.

            


    

    If the
Borrower and/or any other Security Party and/or any other Relevant Party and/or
any of their respective Environmental Affiliates fails to comply with any
Environmental Law or any Environmental Approval or any of the Vessel or any
other Relevant Ship is involved in any incident which gives rise or which may
give rise to any Environmental Claim if, in any such case, such non-compliance
or incident, or the consequences thereof could, in the opinion of the Bank, be
expected to have a Material Adverse Effect on the business assets, operations,
property or financial condition of the Borrower or any other Security Party or
on the security created by any of the Security Documents.

    


    14.7.       Consequences
of Default

    


    
      	
              14.7.1.  

            	
              At
      any time after the occurrence of any Event of Default, the Bank may,
      without prejudice to any other of its
rights,

            


    

    


    
      	
              (a)  

            	
              by
      notice to the Borrower declare that the obligation of the Bank to make the
      Commitment available shall be terminated, whereupon the Commitment shall
      be reduced to zero forthwith and/or

            


    

    


    
      	
              (b)  

            	
              by
      notice to the Borrower declare that the Loan and interest and all sums
      payable under this Agreement and the other Security Documents have become
      due and payable, or payable on demand, whereupon the same shall
      immediately, or in accordance with the terms of such notice, become due
      and payable jointly and severally by the Borrower and the other Obligors,
      without any further demand protest or notice or any other procedure from
      the Bank,

            


    

    


    
      	
              (c)  

            	
              put
      into force and exercise all or any of the rights, powers and remedies
      possessed by it under this Agreement and/or under any other Security
      Document.

            


    

    


    


    
      	
              14.7.2.

            	
              If
      an event occurs in respect of the Borrower or any of the other Security
      Parties of the type described in Clauses 14.3.2. to 14.3.6. the obligation
      of the Bank to make the Commitment available shall terminate immediately
      and all amounts under sub-clause 14.7.1.(b) above shall become immediately
      due and payable without the need for any demand from the Bank or any
      notice to the Borrower or other action of any kind
    whatsoever.

            


    

    


    


    15           APPLICATION OF
RECEIPTS

    


    15.1        Normal order of application.
Except as any Security Document may otherwise provide, any sums which are
received or recovered by the Bank under or by virtue of any Security Document
after the service of notice on the Borrower shall be applied:

    FIRST:
in or towards satisfaction of any amounts then due and payable under the
Security Documents or the Master Swap Agreement in the following
proportions:

    (i)           firstly,
in or towards satisfaction pro rata of all amounts then due and payable to the
Bank under the Security Documents and the Master Swap Agreement (in respect of
Designated Transaction) other than those amounts referred to at (ii) and (iii)
below;

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (ii)           secondly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Bank under the Security Documents  and
the Master Swap Agreement (in respect of Designated Transaction) (and, for this
purpose, the expression "interest" shall include any net amount which the
Borrower shall have become liable to pay or deliver under section 2(e)
(Obligations) of the Master Swap Agreement (in respect of Designated
Transaction) but shall have failed to pay or deliver to the Bank at the time of
application or distribution under this Clause 15); and

    (iii)           thirdly,
in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the
case of the latter, calculated as at the actual Early Termination Date applying
to each particular Designated Transaction, or if no such Early Termination Date
shall have occurred, calculated as if an Early Termination Date occurred on the
date of application or distribution hereunder);

    SECONDLY: in
retention of an amount equal to any amount not then due and payable under any
Security Document or the Master Swap Agreement (in respect of Designated
Transaction) but which the Bank, by notice to the Borrower and the Security
Parties, states in its reasonable opinion will or may become due and payable in
the future and, upon those amounts becoming due and payable, in or towards
satisfaction of them in accordance with the foregoing provisions of this Clause
15.1(a); and

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

    


    15.2        Variation of order of
application.  The Bank may (following the occurrence of an
Event of Default or a Potential Event of Default which is continuing), by notice
to the Borrower and the Security provide for a different manner of application
from that set out in Clause 15.1 either as regards a specified sum or sums or as
regards sums in a specified category or categories.

    


    15.3.       Notice of variation of order of
application.  The Bank may give notices under Clause 15.2 from
time to time in respect of sums which may be received or recovered in the
future.

    


    15.4        Appropriation rights
overridden.  This Clause 15 and any notice which the Bank gives
under Clause 15.2 shall override any right of appropriation possessed, and any
appropriation made, by the Borrower or any Security Party.

    


    15.5        Application of Earnings -Payment of
Earnings.  The Borrower undertakes with the Bank to ensure
that, throughout the Facility Period (and subject only to the provisions of the
General Assignment for the Vessel) all the Earnings of the Vessel are paid to
the Operating Account for the Vessel and subject to no Event of Default having
occurred which is continuing at the relevant time, all credit balances on the
Operating Account shall be freely available to the Borrower.

    


    


    16.          ACCOUNTS

    


    
      	
              16.1.  

            	
              Loan
      Account

            


    

    


    The
Bank shall maintain in accordance with its usual practice, an account evidencing
the amounts from time to time lent by, owing to and paid to it under the
Security Documents.  Such account confirmed by the Bank as per Clause
6 hereof shall, be conclusive as to the amount from time to time owing by the
Borrower under the Security Documents.

     

    
 

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    


    
      	
              16.2.  

            	
              Set-off

            


    

    


    
      	
              16.2.1

            	
              Upon
      the occurrence of any Event of Default, the Borrower authorises the Bank,
      without notice to the Borrower, to apply any credit balance to which the
      Borrower is then entitled and/or to whatever currency standing upon any
      such account of the Borrower with any branch of the  in or
      towards satisfaction of the Indebtedness. For this purpose, the Bank is
      authorised to purchase with the moneys standing to the credit of such
      account such other currencies as may be necessary to effect such
      application.  The Bank shall not be obliged to exercise any
      right given to it by this clause. The Bank shall notify the Borrower
      without delay upon the exercise or purported exercise of any right of
      set-off giving details in relation
thereto.

            


    

    


    
      	
              16.2.2  

            	
              The
      rights conferred on the Bank by this Clause shall be in addition to, and
      without prejudice to or limitation of, the rights of netting and set off
      conferred on the Bank by the Master Swap Agreement. The Borrower
      acknowledges that the Bank shall be under no obligation to make any
      payment to the Borrower under or pursuant to the Master Swap Agreement if,
      at the time that payment becomes due, there shall have occurred an Event
      of Default or Potential Event of Default, or an Event of Default or
      Termination Event (as those terms are respectively defined in the Master
      Swap Agreement).

            


    

     

    


     

    
      	
              16.3.  

            	
              Operating
      Account

            


    

    


    16.3.1.    The
Borrower undertakes with the Bank that it will:

    


    
      	
              (a)  

            	
              on
      or before the Drawdown Date open with the Bank the Operating
      Account;  and

            


    

    


    
      	
              (b)  

            	
              procure
      that all moneys payable to the Borrower in respect of the Earnings or
      other receivables regarding the Vessel shall, unless and until the Bank
      directs to the contrary be paid to the Operating Account free from
      Encumbrances (save for Encumbrances in favour of the
      Bank);  Provided however that if any moneys paid to the
      Operating Account are payable in a currency other than Dollars, the Bank
      shall convert such moneys into Dollars at the Bank  spot rate of
      exchange at the relevant time for the purchase of Dollars with such
      currency and the term "spot rate of exchange" shall include any premium
      and costs of exchange payable in connection with the purchase of Dollars
      with such currency.

            


    

    


    
      	
              (c)  

            	
              The
      Operating Account shall bear interest at the rate quoted by the Bank to
      its customers for comparable deposits in Dollars and for such periods as
      the Bank may determine, such interest to be credited to the Operating
      Account at intervals the Bank usually pays interest on
      deposits.

            


    

    


    
      	
              (d)  

            	
              The
      Borrower hereby assigns to the Bank as a continuing security for the
      payment of the Indebtedness the Operating Account and all moneys from time
      to time standing to the credit thereof including any interest from time to
      time accrued and accruing thereon, such assignment to take effect
      immediately upon the occurrence of an Event of
  Default.

            


    

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    
 

    


    16.3.2.    Withdrawals.

    


    So long
as no Default shall have occurred the Borrower shall be entitled to withdraw
from the Operating Account any amount.  Provided however that if in
the opinion of the Bank there will be insufficient sums standing to the credit
of the Operating Account to meet principal falling due on the next Repayment
Date or interest due on the next Interest Payment Date or any other moneys which
are due and payable to the Bank, the Bank shall be entitled to refuse any
withdrawal from the Operating Account.

    


    


    
      	
              16.3.3.

            	
              Application
      of Operating Account

            


    

    


    
      	
              (a)  

            	
              The
      Bank shall be entitled (but not obliged) at any time to deduct from the
      balance for the time being standing to the credit of the Operating Account
      all other moneys which may fall due to be paid to the Bank under the terms
      of the Security Documents or otherwise howsoever in connection with the
      Loan.

            


    

    


    
      	
              (b)  

            	
              At
      any time after the occurrence of an Event of Default, the Bank may,
      without notice to the Borrower, apply all moneys then standing to the
      credit of the Operating Account (together with interest from time to time
      accruing or accrued thereon) in or towards satisfaction of any sums due to
      the Bank under the Security Documents in the manner specified in Clause
      15.

            


    

    


    
      	
              16.3.4.  

            	
              Relocation
      of Operating Account

            


    

    


    The
Borrower, at its own costs and expenses, undertake to comply with any written
requirement of the Bank from time to time as to the location or relocation of
the Operating Account and will from time to time enter into such documentation
as the Bank may require in order to create or maintain a security interest in
the Operating Account.

    


    


    
      	
              16.4.

            	
              Retention
      Account

            


    

    


    
      	
              16.4.1.

            	
               The Borrower on or
      before the Drawdown Date will open with the Bank the Retention
      Account.

            


    

    


    
      	
              (a)

            	
              For
      so long as any moneys are owing under the Security Documents, the Borrower
      shall pay to the Retention Account, at monthly intervals commencing with a
      first payment on the date falling one Month after the Drawdown Date and at
      monthly intervals thereafter (each such day being hereinafter called
      "Monthly Retention Date") such sum (each sum being hereinafter called
      "Monthly Retention Amount") as shall be the aggregate
  of:

            


    

    


    
      	
              i.  

            	
              the
      quotient of the Repayment Instalment amount from time to time falling due
      on the each time next Repayment Date divided by the number of the months
      intervening between the immediately previous and the such next Repayment
      Date, pursuant to Clause 7
  hereof;  and

            


    

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    
 

    
      	
              ii.  

            	
              the
      quotient of the amount of interest from time to time falling due in
      respect of the Loan or each part thereof on the each time next Interest
      Payment Date divided by the number of months of the relevant Interest
      Period.

            


    

    


    
      	
              (b)

            	
              The
      Bank is hereby irrevocably authorised by the Borrower to debit at every
      Monthly Retention Date the Operating Account with the Monthly Retention
      Amounts and to credit them to the Retention
  Account.

            


    

    


    
      	
              (c)  

            	
              In
      case that any Earnings paid to the Operating Account relate to a period of
      employment of the Vessel longer than one (1) Month, then upon receipt of
      such Earnings the Retention Account shall be funded by an amount equal to
      so many Monthly Retention Amounts or part thereof as shall correspond to
      the longer period to which the said Earnings relate or any amount as may
      be determined by the Bank.

            


    

    


    
      	
              16.4.2.  

            	
              Unless
      and until there shall occur an Event of Default all Monthly Retention
      Amounts credited to the Retention Account together with interest from time
      to time accruing or at any time accrued thereon shall be set off and
      applied by the Bank (and express and irrevocable authority is hereby given
      by the Borrower to the Bank so to set off and apply the same) upon each
      Repayment Date and upon each Interest Payment Date in or towards payment
      of the Repayment Instalment then falling due and/or (as the case may be)
      the amount of interest then due.  Each such set off and
      application by the Bank shall constitute a payment in or towards
      satisfaction of the corresponding payment obligations of the Borrower
      under this Agreement but shall be strictly without prejudice to the
      obligations of the Borrower to make any such payment to the extent that
      the aforesaid set off application by the Bank is insufficient to meet the
      same.

            


    

    


    
      	
              16.4.3.  

            	
              Any
      amount for the time being standing to the credit of the Retention Account
      shall bear interest at the rate quoted by the Bank to its customers for
      deposits in Dollars for such period as the Bank may determine and for an
      amount comparable with the amount for the time being standing to the
      credit of the Retention Account.

            


    

    


    
      	
              16.4.4.  

            	
              Upon
      the occurrence of an Event of Default or at any time thereafter the Bank
      will set off and apply all sums standing to the credit of the Retention
      Account including accrued interest (if any) in the manner specified in
      Clause 15 without notice to the
Borrower.

            


    

    


    


    17.          INDEMNITY

    


    17.1.       Miscellaneous
Indemnities

    


    The
Borrower will indemnify the Bank against any and all expenses, claims, losses or
liabilities sustained or incurred by the Bank as a result of

    


    
      	
              (a)  

            	
              The
      Loan not being drawdown hereunder whether before or after the giving of
      the Drawdown Notice in accordance with the provisions of Clause 2.2.
      hereof for any reason whatsoever including but not limited to the refusal
      of the Bank to allow the disbursement of the Commitment because of the non
      fulfillment of the Conditions Precedent contained in Schedule I or any of
      them;

            


    

     

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (b)  

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

            


    

    


    
      	
              (c)  

            	
              the
      occurrence of any other Event of
Default;

            


    

    


    
      	
              (d)  

            	
              the
      prepayment or repayment of the Loan or part thereof being made otherwise
      than on an Interest Payment Date relating to the part of the Loan prepaid
      or repaid.

            


    

    


    including
in any such case, but not limited to, any loss or expense suffered as a result
of reemploying deposits acquired by the Bank (or any person to whom the Bank
have sold a participation in the Loan) for the purpose of funding the Loan at a
rate of return lower than the cost of acquiring the deposits or any expense
incurred by the Bank (or such person) in liquidating the deposits as defined as
"Break Costs" in Clause 1 hereof.

    


    


    17.2.       Currency

    


    If, any
payment by any of the Security Parties under any of the Security Documents is
made or falls to be satisfied in a currency (the "payment currency") other than
the currency in which such payment is due under or in connection with such
Security Documents (the "contractual currency"), then, to the extent that the
amount of such payment actually received by the Bank, when converted into the
contractual currency at the rate of exchange, falls short of the amount due
under the Security Documents, the Borrower, as a separate and independent
obligation, shall indemnify and hold harmless the Bank against the amount of
such shortfall.  For the purposes of the present Clause "rate of
exchange" means the rate at which the Bank is able on or about the date of such
payment to purchase the contractual currency with the payment currency and shall
take into account any premium and other costs of exchange with respect
thereto.

    


    


    17.3.       Environmental
Indemnity

    


    The
Borrower shall indemnify the Bank on demand and hold the Bank harmless from and
against all costs, losses, liabilities, actions, proceedings, penalties, fines,
sanctions or other outgoings of whatever nature which may be suffered, or
asserted against the Bank at any time, whether before or after the repayment in
full of principal and interest under this Agreement, relating to, or arising
directly or indirectly for any cause or reason whatsoever out of an
Environmental Claim made or asserted against the Bank if such Environmental
Claim would not have been made or asserted against the Bank if it had not
entered into any of the Security Documents and/or exercised any of its rights,
powers and discretions thereby conferred and/or performed any of its obligations
thereunder and/or been involved in any of the transactions contemplated by the
Security Documents.

    


    17.4.       Communications
Indemnity

    


    Express
authority is hereby given by the Borrower to the Bank to accept (at the sole
discretion of the Bank) all tested or untested communications given by
facsimile, telex cable or e-mail, regarding any or all of the notices, requests,
instructions or other communications under this Agreement.

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

     

    The
Borrower hereby assumes promises and recognises that the Bank shall not be held
responsible for any loss, liability or expense that may result from the Bank's
compliance with such communications and the Borrower undertakes to indemnify the
Bank from all actions, proceedings, damages, claims, expenses and any and all
direct and/or indirect losses which the Bank may suffer, by reason of the Bank
following such communications.

    With
regard to the above communications issued by electronic and/or mechanical
processes (e.g.  by facsimile,  telex or
e-mail),  the  risk of equipment malfunction, including,
without limitation, paper shortage, transmission errors, omissions and
distortions of Borrower's mechanical equipment is assumed fully and accepted by
the Borrower.

    The
risks of misunderstandings and errors of communications being given as mentioned
above, are for the Borrower and the Bank will be indemnified in full pursuant to
this Clause.

    Notwithstanding
the above, the Bank may at any time, (and such discretion of the Bank is
expressly admitted by the Borrower hereby) refuse to execute the notices,
requests, instructions or communications of the Borrower, or any part thereof
given by telex or fax if not confirmed in a manner acceptable to the Bank,
without incurring any responsibility for loss, liability or expense arising out
of such refusal.

    


    


    


    18.          REMEDIES AND
WAIVERS

    


    18.1.       Remedies  Modifications

    


    The
Borrower shall not be released from the obligations contained herein by the
granting of time or any other indulgence to the Borrower or by any other act or
thing whatsoever or whereby the Borrower is and has been so released and no
failure to exercise nor any delay in exercising on the part of the Bank any
right or remedy hereunder and/or the other Security Documents or by law shall
operate as a waiver thereof nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise thereof or the exercise of
any other rights or remedy.  No modification or waiver by the Bank of
any provision of this Agreement or of any of the other Security Documents nor
any consent by the Bank to any departure therefrom by the Borrower shall be
effective unless the same shall be in writing and then shall only be effective
in the specific case and for the specific purpose for which given.  No
notice to or demand on any such party in any such case shall entitle such party
to any other or further notice or demand in similar or other
circumstances.

    


    18.2.       Cumulative
Remedies

    


    The
rights and remedies provided herein and/or in any other Security Document are
cumulative and not exclusive of each other nor of any other rights or remedies
provided by law.

    


    


    18.3.       Event
of Default

    


    The
Borrower accepts that upon an Event of Default occurring the Bank has an
absolute right to take immediate steps to realize its security and recover all
and any sums due to it (including but not limited to the Loan remaining
outstanding and any other moneys which may then be due and owing under this
Agreement and/or any of the other Security Documents) exercising all powers
available to it by law and/or set forth in the Security Documents or otherwise
and nothing contained in the Security Documents shall be construed to the
contrary.

     

    
 

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    


    19.          LEGAL
IMMINENCE

    


    This
Agreement and the other Security Documents contain the entire agreement of the
parties and their provisions supersede the provisions of the Commitment Letter
addressed by the Bank to the Borrower and others (save for the provisions
thereof which relate to fees) and any and all other prior correspondence and
oral negotiation by the parties in respect of the matters regulated by this
Agreement.

    


    


    


    
      	
              19.1.  

            	
              Over
      Other Security Documents

            


    

    In the
event of any inconsistency between the provisions of this Agreement and the
provisions of any other Security Document the provisions of this Agreement shall
prevail.

    


    


    19.2        Contracts (Rights of Third Parties)
Act 1999 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.

    


    


    20.          COUNTERPARTS

    This
Agreement may be executed in any number of counterparts each of which when
executed and delivered shall constitute an original but all the counterparts
shall together constitute both one and the same instrument.

    


    


    21.          INVALIDITY

    


    If at
any time any one or more provisions of any Security Document and/or any Security
Document or any other documents executed pursuant hereto or thereto is or
becomes invalid illegal or unenforceable in any respect under any applicable law
in any jurisdiction whatsoever, the validity legality and enforceability of the
remaining provisions hereof or thereof shall not in any way be affected or
impaired thereby. If, however, this event becomes known to the Bank prior to the
drawdown of the Commitment the Bank shall be entitled to refuse drawdown until
this discrepancy is remedied. Where, however, the provisions of any such
applicable law may be waived, they are hereby waived by the parties hereto to
the full extent permitted by that law to the intent that this Agreement, the
other Security Documents and any other documents executed pursuant hereto or
thereto shall be deemed to be valid binding and enforceable in accordance with
their respective terms.

    


    


    22.          ASSIGNMENT

    


    This
Agreement shall constitute continuing and primary obligations of the Borrower
and shall be binding on and inure to the benefit of the Borrower the Bank and
their respective successors and assigns provided that:

    


    


    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    


    


    22.1 
   Assignment
by the Borrower

    


    The
Borrower and any other parties to the Security Documents may not assign any
rights and/or obligations hereunder and/or any other Security Document or any
documents executed pursuant thereto without the prior written consent of the
Bank and

    


    22.2   
    Assignment by the Bank

    


    The
Bank may at any time assign, transfer or offer participations to any affiliated
company of the EFG Group or, with the prior written consent of the Borrower,
such consent not to be unreasonably withheld, to other banks or financial
institutions in whole or in part, or in any manner dispose of all or any of its
rights and/or obligations arising or accruing under this Agreement or under any
of the other Security Documents or any documents executed pursuant to this
Agreement and/or the other Security Documents.   The Bank may
disclose to a potential assignee, transferee or participant or to any other
person who may propose entering into a contractual relations with the Bank in
relation this Agreement such information about the Borrower and the Security
Parties as the Bank shall reasonably consider appropriate.

    


    


    23.          EXPENSES

    


    (a)
    The
Borrower shall reimburse the Bank immediately upon demand for all expenses
including but not limited to the fees and expenses of the Legal Counsels of the
Insurance Experts and/or any other Experts the Bank may use e.t.c. as well as
all legal fees and disbursements printing costs and other out of pocket expenses
of whatsoever nature incurred by the Bank

    


    (i)                  
   in the
negotiation preparation execution and where relevant registration of any of the
Security Documents and of any amendment or extension of or granting of any
waiver or consent hereunder and/or any other Security Document

    


    (ii)                   
 in
contemplation of, or the enforcement of or preservation of any rights under any
of the Security Documents or otherwise in respect of moneys owing under any of
the Security Documents

    


    (iii)                  
 all
fees and expenses payable pursuant to the present Clause shall be paid together
with value added tax or any other tax (if any) properly chargeable
thereon.  Any value added tax or other tax chargeable in respect of
any services supplied by the Bank under this Agreement shall be paid in addition
to any sum agreed to be paid hereunder.

    


    (b)     
 
The
Borrower shall pay all Taxes, the Security Documents are or at any time may be
subject and shall indemnify the Bank against any liabilities costs claims and
expenses resulting from any omission to pay or delay in paying any such duties
levies, dues and/or taxes.

    


    


    23.1.       If
the Bank pays any of the amounts mentioned above as payable by the Bank, the
Borrower shall reimburse same to the Bank together with interest at the rate
referred to in Clause 8.4. from the date of Bank's  actual
disbursement or loss to the date of payment to the Bank. The expenses are
payable on demand.

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    
 

    


    24.          NOTICE

    


    24.1.       Address

    Each
notice, request, demand or other communication to be given or made hereunder
and/or any other Security Document shall be given in writing addressed to the
Borrower c/o Eurobulk Ltd. at 40, Agiou Konstantinou Str., 151 24 Maroussi,
Greece, fax no 0030 2111 804097 who is hereby irrevocably appointed by the
Borrower as its agent and who is empowered by it to receive and take delivery on
Borrower's behalf and account all documents and/or instruments addressed to the
Borrower of whatever nature, and the Borrower hereby confirms and warrants that
all such notifications, notices, or other communications e.t.c. delivered to its
above agent will be considered by it as having been delivered to and received by
itself. All such notifications notices, requests, demands or other
communications if addressed to the Bank shall be delivered or mailed to the Bank
at No 83, Akti Miaouli Street, Piraeus Greece or to such other address as is
notified by one party to the other party hereunder in writing.

    


    


    24.2.       Time
of Delivery

    


    Any
notice, request, demand or other communication to be given or made to the
Borrower shall be deemed to have been delivered three (3) Banking Days after
having been sent to its agent appointed by them in the preceding Clause, by
first - class registered post prepaid in an envelope addressed as aforesaid but
in the case of a telex facsimile transmission or other means of
telecommunication in permanent written form or delivery by hand, such notice
shall be deemed to have been delivered at the time of dispatch. If the day of
dispatch is not a Banking Day it shall be deemed to have been received at the
opening of business on the next such Banking Day.

    


    25.          GOVERNING LAW AND
JURISDICTION

    


    
      	
              (a)  

            	
              This
      Agreement and the Security Documents unless otherwise provided for herein,
      shall be governed by and construed in accordance with English Law. The
      Mortgage shall be governed by the law of the Flag State of the Vessel. The
      Pledges, the Corporate Guarantee shall be governed by the laws of
      Greece

            


    

    


    
      	
              (b)  

            	
              For
      the exclusive benefit of the Bank, the Borrower hereby irrevocably submits
      itself to the non-exclusive jurisdiction of the Courts of England.
      Further, the Borrower agrees that any summons, writ or other legal process
      issued against any of the Security Parties either in England or Greece or
      in any other country as the case may be, shall be served upon the Borrower
      in Greece c/o Hill Taylor Dickinson at 2, II Merarchias Street 185 35
      Piraeus Greece, fax no 0030 210 4284777), or in England c/o Messrs Hill
      Taylor Dickinson  at Irongate House, Duke's Place, London EC3A
      7LP, England or to their successors, who are hereby authorised by the
      Borrower, acting on its own behalf to accept such service, which shall be
      deemed to be good service on the Borrower. The foregoing shall not limit
      the right of the Bank to start proceedings in any other country or to
      serve process in any other manner permitted by law. The Borrower hereby
      waives any objections as to the inconvenience of any forum elected by the
      Bank.

            


    

     

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (c)  

            	
              If
      it is decided by the Bank that any such proceedings should be commenced in
      any other country, then any objections as to the jurisdiction or any claim
      as to the inconvenience of the forum is hereby waived by the Borrower all
      of whom the Borrower confirms that they are representing and binding, and
      it is agreed and undertaken by the Borrower to accept service of legal
      process and not to contest the validity of such proceedings as far as the
      jurisdiction of the court or courts involved is
  concerned.

            


    


    
      
         


      

      
        46

        
          

        

      

      
         


      

    


    


    Schedule
I

    Documents and evidence
required as conditions precedent to the Loan being made

    


    Part
1

    
      	
              (a)  

            	
              Constitutional
      documents

            


    

    copies,
legalized by a lawyer and certified by an officer of the Borrower as true,
complete and up to date copies of all documents which contain or establish or
relate to the constitution and organization of the Borrower and of any corporate
shareholder of the Borrower.  In case of a Liberian or Marshall Island
Company, copies of

    
      	
                    
      (i)  

            	
              the
      transfer of subscription

            


    

    (ii)       the
Organizational Meeting

    (iii)      the
first Meeting of Directors

    
      	
                      
      (iv)  

            	
              all
      resolutions regarding election and resignation of Directors (if any) from
      the first meeting till today.

            


    

    


    
      	
              (b)

            	
              Corporate
      authorisations

            


    

    copies
of the relevant minutes containing the resolutions of the directors and
shareholders of each Security Party approving the Security Documents to which
such Security Party is, or is to be, party and authorizing the signature,
delivery and performance of such Security Party's obligations thereunder, as
well as copies of the resolutions of the Corporate Shareholders to participate
at the relative meeting of the shareholders of the respective Security Party.
All copies of the meetings and resolutions of the Directors and Shareholders of
each such Security Party to be certified (in a certificate dated not earlier
than five Banking Days prior to the date of this Agreement) by the Secretary of
such Security Party as:

    
      	
                    
      (i)  

            	
              being
      complete true and correct;

            


    

    
      	
                     
      (ii)  

            	
              being
      duly passed at meetings duly convened and held of the directors of such
      Security Party where the directors were present in person at and
      throughout the said meetings and the resolutions were passed
      unanimously;

            


    

    
      	
                      
      (iii)  

            	
              not
      having been amended, modified or revoked;
and

            


    

    
      	
                       
      (iv)  

            	
              being
      in full force and effect

            


    

    and
duly notarised and legalised by the appropriate consul as well as the originals
or certified copies of any Powers of Attorney issued by any Security Party
pursuant to such resolutions duly notarised and legalized by the appropriate
consul.

    


    
      	
              (c)

            	
              Official
      Certificates of Good Standing of the
Borrower.

            


    

    


    
      	
              (d)

            	
              Certificate of Incumbency:
      a list of directors and officers of each Security Party and of
      every corporate shareholder specifying the names and positions of such
      persons, certified (in a certificate dated not earlier than five Banking
      Days prior to the date of this Agreement) by an appropriate government
      authority, or if this is not possible, by the Secretary of such Security
      Party, or of the corporate shareholder to be true, complete and up to date
      and duly notarised and legalised by the appropriate
  consul.

            


    

    


    
      	
              (e)  

            	
              A
      certificate, on behalf of the Borrower, by a Director having been
      authorised to execute same, on which the documents mentioned sub-sections
      (a), (b), (c), (d) and (e) of this Part 1 of Schedule I will have been
      attached, reading substantially as
follows:

            


    

     

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    

      CERTIFICATE

      


      I, the
undersigned, ...................... the Secretary of (name of the Borrower or of the other
Security Party) ............................. ("the Company"), a company duly organized and
existing under the laws of ............ hereby certify that:

      


      
        	
                1.

              	
                Attached
      hereto and marked "A" is a true and complete copy of the Articles of
      Incorporation and of all documents relating to the constitution of the
      Company (and of all amendments thereof) which are in full force and effect
      as of the date hereof.

              


      

      


      
        	
                2.

              	
                Attached
      hereto and marked "B" is a true and complete copy of the Minutes of a
      Meeting of the Directors of the Company held in .................. on the ........ day of
      ........ 2009 at which Meeting all the Directors of the Company were present
      in person and acted throughout and the Resolutions passed at the Meeting
      were passed unanimously and have not been varied or revoked and remain in
      full force and effect as of the date
hereof.

              


      

      
        	
                3.

              	
                Attached
      hereto and marked "C" is a true and complete copy of the Minutes of the
      meeting of the Shareholders of the Company held in ........................ on the ...... day
      of ...... 2009 at which meeting bearer share certificates representing all of
      the authorised and issued shares of the Company were tabled and voted
      throughout by the holders thereof (or, as the case may be, the registered
      shareholders of all of the authorised and issued shares of the Corporation
      were present in person or by proxy and acted throughout) such meeting
      having been convened and notice thereof having been duly waived by all
      persons entitled thereto and the Resolutions passed at such meeting remain
      in full force and effect and  unamended as of the date
      hereof.

              


      

      


      
        	
                4.

              	
                Attached
      hereto marked "D" is a true and complete copy of the Power of Attorney
      approved by the Directors and Shareholders of the Company at the Meetings
      described in paragraphs, 2 and 3 above, a copy of which Power of Attorney
      has been attached to the Minutes of the said
  Meetings.

              


      

      


      
        	
                5.

              	
                The
      Directors and Officers of the Company are, as at the date hereof, and
      were, as at the date of the Meeting of the Directors, the following, being
      all the Directors and Officers of the
Company:

              


      

      


      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	
                                Director/President

                              
	 
      	 
      	
                                Director/Secretary

                              
	 
      	 
      	
                                Director/Treasurer

                              


                      

                    

                  

                

              

            

          

        

      

      
        	
                6.

              	
                The
      legal shareholder(s) of the Company is/are, as the date hereof, and
      was/were, as at the date of the Meetings of the Directors and
      shareholders, that referred to in the copy of the Minutes of the Meeting
      of Shareholders attached hereto and marked
C.

              


      

      


      
        	
                7.

              	
                The
      name, title and specimen signature of each person who has executed or will
      execute any of the Security Documents (as such term is defined in the Loan
      Agreement referenced in the Resolutions certified in item 2 above) and/or
      any other document incidental hereto and thereto on behalf of our Company
      are as set forth below, and each such person is on the date hereof and
      thereunto duly authorised.

              


      

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Name
      and Title

                                	 
      	
                                  Specimen
      Signature

                                
	                                                                                
      	 
      	                                                                           
      
	                                                                                
      	 
      	                                                                             
      
	                                                                                
      	 
      	                                                                             
      


                        

                      

                    

                  

                

              

            

          

        

      

       

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

      
 

      
        	
                8.

              	
                I
      confirm that I am duly authorised by the Company to execute this
      certificate.

              


      

      If any
certification contained herein ceases to be true and correct at
any  time prior to the execution and delivery of the documentation
referenced in the Resolutions in paragraph 2 above, I will immediately give to
the Bank notice to that effect.

      All
terms defined in the Loan Agreement and used but not defined herein have the
meanings given to them in such Agreement.

      


      IN
WITNESS WHEREOF, this certificate has been executed on and as of
................................... 2009

      (name
of the Security Party)

      


      


      


       by:
............................

      Title:
.........................

      


      


      


      


      


      


      
        	
                (f)

              	
                Opinions

              


      

      an
opinion on the validity of the Security Documents addressed to the Bank by
special legal advisers approved by it and having particular knowledge of the
national law by which the validity of the relative Security Document may be
affected.

      


      
        	
                (g)

              	
                Further
      opinions

              


      

      
        	
                 
      

              	
                an
      opinion of the legal adviser to the Borrower as to all matters of law as
      the Bank shall deem relevant to the Loan Agreement as it may
      require.

              


      

      


      
        	
                (h)

              	
                Borrower's
      process agent

              


      

      a copy,
certified as a true copy by the Borrower's solicitors of a letter from the
Borrower's agent for receipt of service of proceedings accepting its appointment
under the Security Documents in which it is or is to be appointed as such agent;
and

       

      
        	
                (j)

              	
                Insurance
      Opinion

              


      

      an
opinion from insurance consultants approved by the Bank, on the insurances
effected in respect of the Vessel.

       

      
        	
                (k)

              	
                Arrangement
      Fee

              


      

      Evidence
that the Arrangement Fee has been paid in full up to the date.


      
        
           


        

        
          49

          
            

          

        

        
           


        

      


      


      Documents and evidence
required as conditions precedent and (where the context permits)
subsequent.

      Part
2

      


      Evidence
concerning the Vessel

      


      
        	
                (a)

              	
                Charter
      free valuation and preparation of insurance report of the Vessel as at the
      date determined by the Bank prior to the drawdown prepared on the basis
      specified in the Agreement.

              


      

      


      
        	
                (b)

              	
                Evidence
      that the Vessel has been duly registered in the ownership of its owner
      under the laws and flag of its shipping registry free from any
      Encumbrances (including those on its earnings, insurances, charter rights
      and requisition compensation) save for those in favour of the Bank and
      that the Mortgage on the Vessel has been recorded in the respective
      Registry with first priority.

              


      

      


      
        	
                (c)

              	
                Evidence
      that the Vessel has been surveyed at the cost of the Borrower by surveyors
      appointed and/or approved by the Bank and a copy of the surveyors' report
      has been delivered to it.

              


      

      


      
        	
                (d)

              	
                Certificate
      of Confirmation of Class for hull and machinery confirming that the Vessel
      is classed in the highest Class of a Classification Society acceptable to
      the Bank and remains free of recommendations notations affecting class.
      The Bank should be notified of the Classification Society with which the
      Vessel will be or is (as the case may be) classed at least fifteen days
      prior to the Drawdown Date.

              


      

      


      
        	
                (e)

              	
                Due
      authorisation enabling the Bank to obtain copies of class records or other
      information at its discretion from the Classification Society regarding
      the  Vessel and a confirmation from the classification Society
      that it will forward to the Bank all the quarterly listings issued in
      respect with that Vessel's
condition.

              


      

      


      
        	
                (f)

              	
                Photocopies
      of the Vessel's current and unexpired trading
  certificates.

              


      

      


      
        	
                (g)

              	
                Evidence
      that the Vessel has been or will -on drawdown- be insured in accordance
      with the insurance requirements provided for in the Schedule of this
      Agreement with Underwriters, Insurance Companies, P & I and War Risks
      Associations which meet with the approval of the Bank. Such evidence shall
      include Hull and Machinery Marine risks full cover notes, stating all
      terms and conditions listing the security involved and incorporating the
      Loss Payable Clause and in the case of War Risks and Protection and
      Indemnity cover the Certificate of Entry and/or cover notes if
      appropriate.

              


      

      


      
        	
                (h)

              	
                Letters
      of Undertaking for the Vessel acceptable to the Bank and issued by Hull
      and Machinery brokers and/or War Risks Associations or brokers and
      Protection & Indemnity Associations approved by the Bank for the
      Vessel acceptable to the Bank.

              


      

      


      
        	
                (i)

              	
                Certified
      true photocopies of the Charter or any charterparty or other contract of
      employment of the Vessel which will be in force on the Drawdown
      Date.

              


      

       

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

      
 

      
        	
                (j)

              	
                Certified
      true photocopies of the management agreement relating to the Vessel and
      the Manager's Undertaking duly executed by the Manager confirming that it
      will throughout the Facility Period manage the Vessel on behalf of its
      Owner and subordinate all its rights against the Owner or the Vessel to
      those of the Bank.

              


      

      


      
        	
                (k)

              	
                Evidence
      that the Manager and the Vessel has obtained certification of compliance
      with ISM Code and/or ISPS Code.

              


      

      


      
        	
                (l)

              	
                Documentary
      evidence as to the light displacement tonnage of the
    Vessel.

              


      

      


      


      
        	
                (m)

              	
                Photocopy
      of the MOA in respect of the Vessel and any Addenda thereto certified as
      true and complete by the legal counsel of the
  Borrower.

              


      

      


      
        	
                (n)

              	
                Photocopy
      of the Bill of Sale transferring title in the Vessel to the Borrower free
      of all encumbrances, maritime liens and other debts whatsoever notarially
      certified and legalized as well as a copy of the Protocol of Delivery and
      acceptance of the Vessel and of the Commercial
  Invoice.

              


      

      


      
        	
                (o)

              	
                Confirmations
      by the Insurers of the Vessel addressed to the Bank that they will issue
      letters of undertaking and endorse notices of assignment and loss payable
      Clauses on the Insurances, as soon as they receive the respective notices
      of assignment.

              


      

      


      
        	
                (p)

              	
                Evidence,
      in the form of a certificate from the Vessel's Registry proving the
      Sellers' title to the Vessel free of any Encumbrances, debts or claims of
      any nature whatsoever;

              


      

      


      
        	
                (q)

              	
                Duly
      certified copies of the corporate documentation of the Seller proving the
      legal existence of the Seller and the due authorization of the sale of the
      Vessel.

              


      

      


      
        	
                (r)

              	
                Evidence
      that the ten per cent (10%) deposit in respect of the Vessel and all other
      sums of money (other than the Loan) required to be paid by the Borrower to
      the Seller pursuant to the M.O.A. have been duly
  paid.

              


      

      


      


      
        	
                (s)

              	
                As
      a condition subsequent authenticated copy of a Transcript of Registry
      issued by the Registrar of Ships proving the registration of the Vessel in
      the ownership of the Borrower and the recording of the Mortgage on first
      priority. Such evidence must be produced to the Bank not later than three
      (3) Banking Days after the Drawdown
Date.

              


      

      



      
        
           


        

        
          51

          
            

          

        

        
           


        

      


      Schedule
II

      


      INSURANCE
REQUIREMENTS

      


      


      A.            PREAMBLE

      


      This
Schedule is an integral part of the above Agreement to which it is attached. All
the terms and conditions hereinbelow and/or any other provision concerning
Insurance in any Clause of the Security Documents form the Insurance
requirements thereof.

      


      All the
words and expressions used in this Schedule shall have the meaning stated in the
Agreement and the following expressions shall be interpreted as
follows:

      


      "Approved Brokers": Insurance
Broker(s) and/or firm of Insurance Brokers, appointed by the Owner, as may from
time to time be approved by the Bank in writing and/or appointed by the Bank for
the purposes of this Agreement;

      


      "Excess Risks": The proportion
(if any) of claims for general average, salvage and salvage charges and under
the  standard collision  clause which will not be
recoverable, in consequence of the value at which the Vessel is assessed for the
purpose of such claims exceeding its insured value;

      


      "Insurances": All the policies
and contracts of insurance as set forth under paragraph B hereinbelow which are
taken out or entered into by or for the benefit of the Owners (whether in the
sole name of the Owners or, if required by the Bank, in the joint names of the
Owners and the Bank) in respect of the Vessel and its earnings or otherwise
howsoever in connection with the Vessel and all benefits of such policies and/or
contracts (including all claims of whatsoever nature and return of
premiums);

      


      "Insurers" means the
underwriters or insurance companies with whom any insurance is effected and the
associations of any protection and indemnity, FD & D or war risks or the
managers of such associations in which the Vessel may at any time be entered.
All Insurances must be contracted with Insurers approved by the
Bank;

      


      "Loss Payable Clause": The
provisions regulating the manner of payment of sums receivable under the
Insurance which are to be incorporated in the relevant insurance document, such
Loss Payable Clauses to be in the forms set out in Paragraph D (1) hereinbelow,
or such other form as may from time to time be approved in writing by the
Bank;

      


      "Owners": The owners of the
Vessel referred to in the Loan Agreement as Borrower;

      


      "Protection and Indemnity
Risks": The usual risks covered by a Protection and Indemnity Association
(whether actually covered by Protection & Indemnity Association(s) and/or
underwriters) and/or insurance companies), including the proportion (if any)
which is not recoverable in the case of collision under the standard collision
clause;

       

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

      
 

      "Required Amount" means the
aggregate of the insured amounts on the Vessel referred to in the Loan
Agreement, which Required Amount can not be less than 120 per cent of the amount
of the Loan;

      


      "War Risks": Risks
including the risk of mines and all risks excluded from the standard form of
marine policy by the free of capture and seizure clause;

      


      B.           INSURANCES TO BE EFFECTED
AND MAINTAINED

      The
Insurance must be effected and maintained according to the provisions of the
Loan Agreement, including this Schedule and the risks set forth in this as
follows:

      


      a.  Hull
and Machinery

      Insurance
against fire and usual marine risks (including Excess Risks if so required by
the Bank) on an agreed value basis, on a full cover and all risks basis
according to English or American or similar Hull Clauses, for the Required
Amount, with such reasonable deductible and upon such terms as shall from time
to time be approved in writing by the Bank;

      


      b.  Increased
Value

      (if
required by the Bank) Insurance of increased value (Total Loss only, Excess
Liabilities included) as per the applicable English or American Institute
Clauses or similar clauses (Disbursement/Increased Value/Excess Liabilities) up
to an amount no less than the Required Amount, as shall from time to time be
approved in writing by the Bank;

      


      c.  War
Risks

      Insurance
against War Risks according to London Institute War Clauses or similar, on an
agreed value basis, for the Required Amount upon such terms as shall from time
to time be approved in writing by the Bank, attaching also the so-called War
Protection and Indemnity Clauses. If not fully covered by these insurances, crew
war liabilities insurance shall have to be effected separately;

      


      d.  Protection
and Indemnity

      Insurance
against Protection and Indemnity Risks for the full value and tonnage of the
Vessel insured (as approved in writing by the Bank) in accordance with the
relevant Rules/Protection and Indemnity Institute Clauses and deductibles
provided thereof and/or agreed for all risks including Pollution with Excess
Liability insured by P&I Club(s) and/or underwriter(s) and/or insurance
company(ies) approved in writing by the Bank. No risks will be excluded and no
deductibles provided for in the rules and/or agreed will be altered, without the
written consent of the Bank having been previously obtained. If crew liabilities
(inductively, loss of life, injury or illness) have been excluded from the
insurance cover or insured on a deductible excess basis, such liabilities shall
be further insured separately with other underwriters, always acceptable to the
Bank and upon such terms as shall from time to time be approved in writing by
the Bank;

      


      
        	
                e.

              	
                Pollution
      Liability

              


      

      Supplementary
insurance of oil pollution liability including full cover of pollution risks for
the amount up to the maximum commercially available limit and upon such terms as
shall be commercially available and approved in writing by the
Bank;

      


      
        	
                f.

              	
                USA
      Pollution Risk

              


      

      Supplementary
insurance of oil pollution liability (in the event the Vessel insured is
scheduled to operate within or nearby USA jurisdiction) for an amount and upon
such terms as shall from time to time be approved in writing by the
Bank

       

      
 

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

      


      


      
        	
                g.

              	
                FD
      & D Cover

              


      

      Insurance
of Freight, Demurrage and Defence upon such terms and conditions as shall from
time to time be approved in writing by the Bank;

       

      h.   Mortgagee's
Interest

      Insurance
of the mortgagee's interest, to be effected and maintained by the Bank, in the
name of the Bank, but at the expenses of the Owner, or Borrower including (if
required by the Bank at its sole discretion) Mortgagee's Asset Protection
(Pollution) coverage and/or additional perils pollution in the event the Vessel
insured trades in the United States waters or in the Exclusive Economic Zone of
the United States (as such term is used in the United States Oil Pollution Act
of 1990) or other similar insurance in respect of any pollution claim(s) against
such Vessel insured, for the Required Amount, calculated at the last Interest
Payment Date, under the "german wording" or similar, for 360 days (or less) or
upon such terms as shall from time to time be determined by the
Bank;

       

      i.    
Other

      Insurance
of such other matters of whatsoever nature and howsoever arising in respect of
which the Bank would at any time reasonably require the Vessel to be
insured;

       

      j.     Port
Risks

      (in the
event the Vessel insured is laid up for an extended period) Insurance effected
and maintained with prior written consent of the Bank instead of the insurances
required under the provisions of sub-clauses a, e, f, and k above, against Hull
and Machinery Risks, Protection and Indemnity Risks, subject to the conditions
of "Institute Time Clauses Hulls, Port Risks", or similar, including War Risks
subject to the conditions of "Institute War and Strikes Clauses, Hulls, Time",
or similar, extended to include War Protection and Indemnity Risks or other such
similar insurance clauses or contact the terms of which shall be approved in
writing by the Bank.

       

      C.          
TERMS AND
OBLIGATIONS FOR EFFECTING AND MAINTAINING INSURANCES

       

      It is
hereby undertaken by the Owner and/or any other person which is obliged under
the Security Documents, that until all moneys payable to the Bank (whether
actually or contingently) pursuant to the Loan Agreement and the other Security
Documents have been paid in full, the Owner shall comply with the following
undertaking:

       

      1.          
To effect and maintain at all timers the Insurances in form and substance
and under terms satisfactory to the Bank.

       

      2.           
To effect the Insurances in Dollars or such other currency as the Bank
may approve and through the Approved Brokers (other than the said mortgagee's
interest insurance which shall be effected through brokers nominated by the
Bank) and with such Insurers as shall from time to time be appointed and/or be
approved in writing by the Bank.

       

      3.           
To effect and maintain the Insurances free of cost and expense to the
Bank in the sole name of the Owner or, if so required by the Bank, in the joint
names of the Owner and the Bank (but without liability on the part of the Bank
for premiums or calls).

       

       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

       

      4.            Unless
otherwise agreed in writing by the Bank, the amount in respect of which the
Insurances should be effected shall be equal to at least the market value of the
Vessel and shall at least be 120% of the amount of the Loan and the Swap
Exposure.

       

      5.           
Any person which is obliged under the Loan Agreement to which these
Insurance Requirements are attached to effect and maintain the Insurances, it
will be obliged and hereby undertakes, jointly and severally with any other
person having the same obligation to (and will ensure that the Owner, if they
are different persons shall):

       

      
        	
                (a)

              	
                procure
      and ensure that the Approved Brokers and/or Insurers as the case may be,
      shall send to the Bank a Letter of Undertaking in respect of the
      Insurances in form and substance satisfactory to the Bank and a Notice of
      Cancellation as per Paragraph D hereinbelow.  Said Letter of
      Undertaking shall be in accordance with the form recommended by Lloyd's
      Insurance Brokers Committee, or any subsequent LIBC form, or any other
      similar form, which is approved by the Bank and shall include a further
      undertaking to give immediate notice of any insurance being subject to the
      Condition Survey Warranty (J.H. 115) and/or structural Conditions Warranty
      (J.H. 722) and/or the Classification Clause (Hulls) dated 29/6/89, fifteen
      days prior to the attachment date of any insurance bearing any of these
      warranties, or in such shorter time as the Bank may agree.

                 

              


      

      
        	
                (b)

              	
                If
      any of the Insurances form part of a fleet cover, procure that the Vessel
      shall be considered by insurers as separately insured and further procure
      that the Approved Brokers and/or Insurers as the case may be, shall
      undertake to the Bank that they shall neither set off against any claims
      in respect of the  Vessel any premiums due in respect of other
      vessels under such fleet cover or any premiums due for other insurances,
      nor cancel the insurance of the Vessel for reason of non-payment of
      premiums for other vessels under such fleet cover or of premiums for such
      other insurances, and shall undertake to issue a separate policy in
      respect of the Vessel if and when so requested by the Bank;

                 

              


      

      
        	
                (c)

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

                 

              


      

      
        	
                (d)

              	
                notify
      the Bank of the names of the brokers and/or all of the Insurers proposed
      to be employed by the Owners for the purposes of the renewal of such
      Insurances and of the amounts and terms in which such Insurances are
      proposed to be renewed and the risks to be covered at least twenty one
      (21) days before the relevant policies, contracts or entries, expire, (or
      in such shorter period as the Bank may agree), and, subject to compliance
      with any requirements of the Bank under these Insurance Requirements,
      procure that appropriate instructions for the renewal of such Insurances
      on the terms so specified are given to the Approved Brokers and/or to the
      approved Insurers at least fourteen (14) days before the relevant
      policies, contracts or entries expire, and that the Approved Brokers
      and/or the approved Insurers will at least seven (7) days before such
      expiry (or within such shorter period as the Bank may from time to time
      agree) confirm in writing to the Bank as and when such renewals have been
      effected in accordance with the instructions so given and to procure that
      a Cancellation Clause shall be endorsed on the relevant policies,
      contracts or entries for a Notice of Cancellation to the Bank on the terms
      set out in Paragraph D of this
Schedule.

              


      

       

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

      
 

      
        	
                (e)

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

                 

              


      

      
        	
                (f)

              	
                deposit
      with the Approved Brokers (procure the deposit of) all slips, cover notes,
      policies, certificates of entry or other instruments of insurance from
      time to time issued and procure that the interest of the Bank shall be
      endorsed thereon by incorporation of the relevant Loss Payable Clause and
      by means of a Notice of Assignment (signed by the Owners) in the form set
      out in Paragraph D hereinbelow or in such other form as may from time to
      time be agreed in writing by the Bank, and that the Bank shall be
      furnished with pro forma copies thereof.

                 

              


      

      
        	
                (g)

              	
                procure
      that the Insurers shall note the Bank's interest and endorse the relevant
      Loss Payable Clause on the relevant certificates of entry or policies and
      shall furnish the Bank with a copy of such certificates of entry or
      policies;

                 

              


      

      
        	
                (h)

              	
                do
      all other necessary things and provide all such documents, evidence and
      information, so as to enable the Bank to collect and recover any moneys
      which shall at any time become due in respect of the
      Insurances;

                 

              


      

      
        	
                (i)

              	
                not
      employ or permit the Vessel to be employed in any other way than in
      conformity with the terms of the Insurances (including any warranties
      express or implied therein) and with any applicable law without first
      obtaining the consent of the Insurers to such employment and complying
      with such requirements as to extra premium or otherwise as the Insurers
      may prescribe;

                 

              


      

      
        	
                (j)

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

                 

              


      

      
        	
                (k)

              	
                in
      case that the Vessel is scheduled to operate or operates within or nearby
      USA, make all the Protection & Indemnity Club US Voyage Quarterly
      Declarations for each quarter in time and/or obtain prior to the Vessel's
      arrival in US territorial waters all relevant certificates as from time to
      time may be required, such as COFR, or any other similar, and forward
      copies of same to the Bank;

                 

              


      

      
        	
                (l)

              	
                not
      without the prior consent of the Bank alter any insurance nor make,
      consent or agree to any act or omission which would or might render any
      insurance invalid, void, voidable or unenforceable or render any sum paid
      out under any insurance repayable in whole or in part.

                 

              


      

      
        	
                (m)

              	
                reimburse
      the Bank for any premiums paid by the Bank or pay to the Bank the amount
      of any premiums to be paid by the Bank in order to effect and maintain a
      policy of Mortgagee's Interest Insurance or any other additional insurance
      that the Bank decides to take at its discretion as well as reimburse the
      Bank for all expenses and premiums paid by the Bank in order to effect
      insurances that the Owner failed to effect.

                 

              


      

       

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

       

      6.            Fleet
cover is permitted only subject to the prior written approval of the Bank under
the conditions set out in Paragraph 5(b) above and the Bank prior express
written approval of fleet aggregate deductibles.

       

      D.           FORMS AND
WORDING

       

      (a)           Loss
payable clause

       

      The
Loss Payable Clauses to be attached to the Insurances should be substantially in
the following form:

       

      (1) 
         Hull and Machinery (Marine
& War Risks): It is hereby noted that by an assignment dated .......
the Owner ...... (insert name) .................... has assigned to EFG EUROBANK
ERGASIAS S.A (the Mortgagees) all rights title and interest in and to all
policies and contracts of insurance from time to time taken out or entered into
by or for the benefit of the Owner in respect of ............ (insert name of
Vessel) ................. and all benefits arising thereof including all claims
of whatsoever nature (including return of premiums) thereunder and
accordingly:Save as hereinafter provided, all claims arising under the
Insurances, whether in respect of an actual, constructive, compromised or
arranged Total Loss of the Vessel or otherwise howsoever, shall be payable to
the Mortgagees or as it may direct, (provided that the written consent of the
Mortgagees shall be obtained prior to a compromised or arranged Total Loss being
agreed with the Insurers) and provided always that unless and until written
notice to the contrary has been received from the Mortgagees, claims (other than
Total Loss claims) not exceeding USD three hundred United States Dollars (USD
300,000) or its equivalent in any other currency (inclusive of any deductible)
in respect of any one claim may be paid to the Owner or its order.

       

       

      (2)        
Protection and
Indemnity Risks: Payment of any recovery in respect of protection and
indemnity risks which ............... (the "Owner") is entitled to make out of
the funds of the Insurers in respect of any liability, costs or expenses
incurred by the Owner, shall be made to the Owner or to its order unless and
until the Insurer receives notice to the contrary from EFG EUROBANK ERGASIAS S.A
(the Mortgagees)  in which event all recoveries shall thereafter be
paid to the Mortgagees or to its order; provided that no liability whatsoever
shall attach to the Insurers or its agents for failure to comply with the latter
obligation until the expiry of two clear business days from the receipt of such
notice.

       

      (b)          Notice of
Assignment.

       

      The
notice of assignment shall be in the following form:

      (For
attachment by way of endorsement to the Policy) ..................... the Owner
of  M/V (the "Vessel") , HEREBY GIVE NOTICE that by an assignment of
even date herewith and entered into by us with EFG EUROBANK ERGASIAS S.A there
have been assigned by us to the said Bank, as Mortgagees of the Vessel, all
insurances in respect thereof and all benefits arising under the insurances
taken or entered into from time to time by the Owners or for the benefit of the
Owners in respect
................................................................ thereof
including but not limited to the insurances constituted by the policy whereon
this notice is endorsed or shall be endorsed.

      SignedFor
and behalf ofOwnerDated

       

      
 

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

      


      (c)           Notice of
Cancellation

      Owners
to procure that Notices of Cancellation of Insurances be given by the Insurers
and/or by the brokers to EFG EUROBANK ERGASIAS S.A. at its branch office at 83,
Akti Miaouli street, Piraeus, 185 38, Greece (and such Notices of Cancellation
be endorsed on the Insurances) providing that the same will be given to the Bank
in the following cases:

      


      (1)           immediately
in the event of any material changes affecting the insurances.

       

      (2)          not
later than ten days prior to the expiry of any of the insurances, if
instructions have not been received for the renewal thereof and, in the event of
instructions being received to renew, of the details thereof;

       

      (3)           immediately
if the underwriters give notice of their intention to cancel the Insurances
provided that the underwriters will not exercise any rights of cancellation by
reason of unpaid premiums without giving the Bank fourteen (14) days from the
receipt of such notice in which to remit the sums due.

      



      
        
           


        

        
          58

          
            

          

        

        
           


        

      


      Schedule
III

      


      Notice of
Drawdown

      


      To:

      EFG
EUROBANK ERGASIAS S.A

      83,
Akti Miaouli street

      Piraeus

      


      


      Dear
Sirs,

      


      NOTICE
OF DRAWDOWN

      


      We
refer to the Loan Agreement dated ... January 2009 made between the Bank and the
Borrower ("the Loan
Agreement").

      


      Words
and phrases defined in the Agreement shall have the same meanings when used
herein.

      


      Pursuant
to Clause 2.2 of the Loan Agreement we hereby irrevocably request that you
advance the amount of Dollars                      
representing the Loan to us on                             2009,
which is a Business Day, by paying the said sum as
to ____________________.

       

      We
hereby warrant that the representations and warranties contained in Clause 4 of
the Agreement are true and correct at the date hereof and will be true and
correct on ________________ 2009
and that no Event of Default nor any event which would with the giving of notice
and/or the passage of time and/or the satisfaction of any materiality test
constitute an Event of Default has occurred or is continuing, and that no Event
of Default will result from the drawdown of the Loan.

       

      We
select the period of [   ] months as the first interest period
for the whole of the said amount.

      


      Yours
faithfully,

      


      


      ____________________________________

      For and
on behalf of

      Saf-Concord
Shipping Ltd


      
        
           


        

        
          59

          
            

          

        

        
           


        

      


      


      Schedule
IV

      PAYMENT
SCHEDULE

      


      


      
        
          	
                   

                  Instalment
      No

                	
                   

                  Payment
      Date

                	
                   

                  Repayment
      Instalment

                	
                   

                  Total
      Principal Amount

                
	 
      	
                   
      

                   

                   

                	 
      	 
      
	
                  1

                	
                   3
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      9,750,000

                
	
                  2

                	
                   6
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      9,500,000

                
	
                  3

                	
                   9
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      9,250,000

                
	
                  4

                	
                  12
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      9,000,000

                
	
                  5

                	
                  15
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      8,750,000

                
	
                  6

                	
                  18
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      8,500,000

                
	
                  7

                	
                  21
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      8,250,000

                
	
                  8

                	
                  24
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      8,000,000

                
	
                  9

                	
                  27
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      7,750,000

                
	
                  10

                	
                  30
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      7,500,000

                
	
                  11

                	
                  33
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      7,250,000

                
	
                  12

                	
                  36
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      7,000,000

                
	
                  13

                	
                  39
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      6,750,000

                
	
                  14

                	
                  42
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      6,500,000

                
	
                  15

                	
                  45
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      6,250,000

                
	
                  16

                	
                  48
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      6,000,000

                
	
                  17

                	
                  51
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      5,750,000

                
	
                  18

                	
                  54
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      5,500,000

                
	
                  19

                	
                  57
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      5,250,000

                
	
                  20

                	
                  60
      months after the Drawdown Date

                	
                  USD
      250,000

                	
                  USD
      5,000,000

                
	 
      	
                  Plus
      Balloon Payment payable together with the 20th   Instalment

                	
                   

                  USD5,000,000

                   

                	
                   

                  0

                


        

      

      


      


       


      
        
           


        

        
          60

          
            

          

        

        
           


        

      


      


       

      Schedule
V

      DESIGNATION
NOTICE

      


      To:        EFG
EUROBANK ERGASIAS S.A.

      83,
Akti Miaouli Street

      185 38
Piraeus

      Greece

      For the
attention of Mr Sissy Hydreou

      


       [date]

      


      Dear
Sirs

      


      Loan
Agreement dated ..... January 2009 made between (i) ourselves as Borrower and (ii)
yourselves as Lender and Swap Bank (the "Loan Agreement").

      


      We
refer to:

      


      1.           The
Loan Agreement;

      2.           the
Master Swap Agreement; and

      3.           a
Confirmation delivered pursuant to the said Master Swap Agreement dated
[].

      


      In
accordance with the terms of the Loan Agreement, we hereby give you notice of
the said Confirmation and hereby confirm that the Transaction evidenced by it
will be designated as a "Designated Transaction" for the purposes of the Loan
Agreement and the Finance Documents.

      


      Yours
faithfully,

      


      


      


      


      


      Stefania
Karmiri

      


      for and
on behalf of

      SAF-CONCORD
SHIPPING LTD


      
        
           


        

        
          61

          
            

          

        

        
           


        

      


      


      IN WITNESS whereof the parties
hereto have caused this Agreement to be executed the day and year first above
written.

      


      


      

        


        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	
                                                      SIGNED and DELIVERED

                                                    	
                                                      )

                                                    	 
      
	
                                                      by
      Stefania Karmiri

                                                    	
                                                      )

                                                    	
                                                      /s/ Stefania Karmiri

                                                    
	
                                                      the
      duly appointed Attorney for and on

                                                    	
                                                      )

                                                    	 
      
	
                                                      behalf
      of SAF-CONCORD SHIPPING
      LTD

                                                    	
                                                      )

                                                    	 
      
	
                                                      in
      the presence of Katerina Avramidou

                                                    	
                                                      )

                                                    	 
      
	 
      	 
      	 
      


                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

        


        
          
            	
                    /s/ Katerina
  Avramidou

                  


          

        

        


        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    	 
      	 
      	 
      
	
                                                            SIGNED and DELIVERED

                                                          	
                                                            )

                                                          	 
      
	
                                                            by
      Mrs. Stavroula-Sotiria Hydreou and Mr John Tsirikos

                                                          	
                                                            )

                                                          	
                                                            /s/ Stavroula Hydreou

                                                          
	
                                                            the
      duly authorised attorneys

                                                          	
                                                            )

                                                          	 
      
	
                                                            for
      and on behalf of

                                                          	
                                                            )

                                                          	
                                                            /s/ John Tsirikos

                                                          
	
                                                            EFG
      EUROBANK ERGASIAS S.A.

                                                          	
                                                            )

                                                          	 
      
	
                                                            in
      the presence of Katerina Avramidou

                                                          	 
      	 
      


                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

        


        


        
          
            	
                    /s/ Katerina
  Avramidou

                  


          

        

        


        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  



                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      



    
      
        
        

      

      
        62