Exhibit 4.12  Date 13 February 2008    BRITANNIA BULK PLC as Borrower  - and -  THE BANKS AND
FINANCIAL INSTITUTIONS listed in
Schedule 1 as Lenders  - and -  LLOYDS TSB BANK
PLC as Agent and as
Security Trustee  
  LOAN AGREEMENT  
  relating to a bridge term loan facility of up to US$30,000,000 to finance m.v.s FRANKLIN (tbr ICE TRADER II) and BAFFIN (tbr ICE POWER II)  Watson, Farley & Williams
London


INDEX  Clause
  
  Page1
  
  INTERPRETATION
  
  12
  
  FACILITY
  
  143
  
  POSITION OF
  THE LENDERS
  
  144
  
  DRAWDOWN
  
  145
  
  INTEREST
  
  156
  
  INTEREST
  PERIODS
  
  177
  
  DEFAULT
  INTEREST
  
  178
  
  REPAYMENT AND
  PREPAYMENT
  
  189
  
  CONDITIONS
  PRECEDENT
  
  1910
  
  REPRESENTATIONS
  AND WARRANTIES
  
  2011
  
  GENERAL
  UNDERTAKINGS
  
  2212
  
  CORPORATE
  UNDERTAKINGS
  
  2513
  
  INSURANCE
  
  2514
  
  SHIP
  COVENANTS
  
  2915
  
  SECURITY
  COVER
  
  3216
  
  PAYMENTS AND
  CALCULATIONS
  
  3417
  
  APPLICATION
  OF RECEIPTS
  
  3518
  
  APPLICATION
  OF EARNINGS
  
  3619
  
  EVENTS OF
  DEFAULT
  
  3720
  
  FEES AND
  EXPENSES
  
  4121
  
  INDEMNITIES
  
  4222
  
  NO SET-OFF OR
  TAX DEDUCTION
  
  4423
  
  ILLEGALITY,
  ETC
  
  4424
  
  INCREASED
  COSTS
  
  4525
  
  SET-OFF
  
  4726
  
  TRANSFERS AND
  CHANGES IN LENDING OFFICES
  
  47


27
  
  VARIATIONS
  AND WAIVERS
  
  5028
  
  NOTICES
  
  5129
  
  SUPPLEMENTAL
  
  5330
  
  LAW AND
  JURISDICTION
  
  54SCHEDULE 1
  LENDERS AND COMMITMENTS
  
  56SCHEDULE 2
  DRAWDOWN NOTICE
  
  57SCHEDULE 3
  CONDITION PRECEDENT DOCUMENTS
  
  58SCHEDULE 4
  TRANSFER CERTIFICATE
  
  61SCHEDULE 5
  MANDATORY COST FORMULA
  
  65SCHEDULE 6
  LIST OF APPROVED BROKERS
  
  67EXECUTION
  PAGE
  
  68


THIS
AGREEMENTis made on 13
February 2008  BETWEEN:  (1)BRITANNIA
BULK PLC,a
company incorporated in England (Company Reg. No. 03842976) whose
registered office is at Dexter House, 2 Royal Mint Court, London EC3N 4QN,
United Kingdom (the Borrower);  (2)THE BANKS
AND FINANCIAL INSTITUTIONSlisted in
Schedule 1, as Lenders;  (3)LLOYDS
TSB BANK PLC, as Agent; and  (4)LLOYDS
TSB BANK PLC, as Security  Trustee.  BACKGROUND  The Lenders have agreed to make available to the
Borrower a facility of up to $30,000,000 for the purpose of:  (A)providing funds to the
Borrower to on-lend to Enterprise Bulk Services S.A. to finance part of the
purchase price of a second-hand 40,000 dwt ice class dry bulk vessel BAFFIN
(tbr ICE POWER II); and  (B)providing funds to the
Borrower to on-lend to Oceanic Bulk Services S.A. to finance part of the
purchase price of a second-hand 40,000 dwt ice class dry bulk vessel FRANKLIN
(tbr ICE TRADER II).  IT
IS AGREEDas follows:  1INTERPRETATION  1.1Definitions.Subject to Clause 1.5, in this Agreement:  Accounts Security Deed
means a deed creating security in respect of the Earnings Account and the
Collateral Account in the Agreed Form;  Affected Lender
has the meaning given in Clause 5.6;  Agency and Trust Agreement
means the agency and trust agreement dated the same date as this Agreement and
made between the same parties;  Agent means
Lloyds TSB Bank plc, acting in such capacity through its office at 10 Gresham
Street, London EC2V 7AE, or any successor of it appointed under clause 5 of the
Agency and Trust Agreement;  Agreed Form
means in relation to any document, that document in the form approved in
writing by the Agent or as otherwise approved in accordance with any other
approval procedure specified in any relevant provision of any Finance Document;  Allocated
Amount  means for Clause 8.6,
on any date the outstanding amount of the Loan multiplied by a fraction, the
numerator of which will be the appraised market value (determined in accordance
with Clause 15.3) of the Ship being sold or which is the subject of a Total Loss
and the denominator of which is the latest aggregate appraised market value
(determined in accordance with Clause 15.3) of both Ships;  Approved
Broker  means each
independent sale and purchase shipbroker approved by the Agent and listed at
Schedule 6 hereto;


Approved Manager
means, in relation to each Ship, Svendborg Ship Management A/S whose registered
office is at Det Gule Pakhus, Havnepladsen 3A, 3.sal DK-5700 Svendborg, Denmark
or any other company which the Agent may, with the authorisation of the
Majority Lenders, approve from time to time as the manager of the Ship;  Availability Period
means the period commencing on the date of this Agreement and ending on:  (a)20 February 2008 (or such later date
as the Agent may, with the authorisation of the Majority Lenders, agree with
the Borrower); or  (b)if earlier, the date on which the Total
Commitments are fully borrowed, cancelled or terminated in accordance with this
Agreement;  BAFFIN  means the 40,000 dwt ice class dry bulk
vessel of 27,078 gross registered tons and 13,844 net registered tons currently
named BAFFIN and registered in the name of the Baffin Seller on the German
flag and bareboat registered in Antigua and Barbuda and to be purchased by the
relevant Owner pursuant to the Baffin MOA and to be registered in the name of
the relevant Owner under Panamanian flag with the name ICE POWER II;  Baffin
MOA  means the memorandum of
agreement dated 22 January 2008 made between the Baffin Seller and the
Borrower as amended by addendum no. 1 dated 22 January 2008 made between
the Baffin Seller and the relevant Owner pursuant to which the Baffin Seller
has agreed to sell, and the relevant Owner has agreed to purchase, BAFFIN for a
purchase price of $35,500,000;  Baffin
Seller  means MS Baffin
GmbH and Co. KG, a corporation organised and existing under the laws of Germany
and having its registered office at Stavendamm 4a, 28195, Bremen, Germany;  Bond
Documents  means the
Indenture, the 11% senior secured notes issued thereunder due 2011, any
supplemental indenture entered into in connection therewith (including
supplemental indentures pursuant to which the Owners guarantee the notes), the
Security Documents (as defined in the Indenture) and the other documents
entered into in connection therewith;  Business Day
means a day on which banks are open in London and, in respect of a day on which
a payment is required to be made under a Finance Document, also in New York
City;  Change of Controlmeans the occurrence of one or more of the following
events:  (a)any person or group (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
other than one or more Permitted Holders, is or becomes the beneficial owner
(as defined in Rule 13d 3 and 13d 5 under the Exchange Act, except that
for purposes of this clause (a) such person shall be deemed to have beneficial
ownership of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 50% of the total voting power of the voting shares
of the Borrower or otherwise has the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the board of
directors of the Borrower;  (b)individuals who on the date of
this Agreement constituted the board of directors of the Borrower (together
with any new directors whose election by such board of directors or whose
nomination for election by the shareholders of the Borrower was approved by a
vote of a majority of the directors of the Borrower then still in office who
were either directors on the date of this Agreement or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the board of directors of the Borrower then in office;   2


(c)the adoption or approval by the board of
directors or shareholders of the Borrower, of a plan relating to the
liquidation or dissolution of the Borrower; or  (d)the merger (which for purposes of this
clause includes a statutory share exchange) or consolidation of the Borrower
with or into another entity or the merger or consolidation of another entity
with or into the Borrower, or the sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially
all the assets of the Borrower (determined on a consolidated basis) to another
entity (other than, in all such cases, an entity that is controlled by one or
more Permitted Holders) or group of related persons for purposes of Section 13(d) of
the Exchange Act, other than a transaction following which (A) in the case
of a merger or consolidation transaction, securities that represented 100% of
the voting shares of the Borrower immediately prior to such transaction (or
other securities into which such securities are converted as part of such
merger or consolidation transaction) constitute at least a majority of the
voting power of the voting shares of the surviving entity (or any parent
thereof) in such merger or consolidation transaction and (B) in the case
of such a sale, lease, exchange or other transfer of assets transaction, the
transferee entity becomes a Subsidiary of the transferor of such assets;  Classification
Society means Germanischer Lloyd, or such other classification
society as the Agent shall approve from time to time;  Collateral
Account means an account in the joint name of the Owners with the
Agent in London designated LTSB re: Enterprise Bulk Services S.A. and Oceanic
Bulk Services S.A. - Collateral Account, with account number 11595601, or any
other account (with that or another office of the Agent or with a bank or
financial institution other than the Agent) which is designated by the Agent as
the Collateral Account for the purposes of this Agreement;  Commitment means, in relation to a Lender, the amount set
opposite its name in Schedule 1, or, as the case may require, the amount
specified in the relevant Transfer Certificate, as that amount may be reduced,
cancelled or terminated in accordance with this Agreement (and Total Commitments means the aggregate of
the Commitments of all the Lenders);  Contractual Currency
has the meaning given in Clause 21.4;  Contribution
means, in relation to a Lender, the part of the Loan which is owing to that
Lender;  Creditor Party
means the Agent, the Security Trustee or any Lender, whether as at the date of
this Agreement or at any later time;  Dollars and $ means the lawful currency for the time being of the
United States of America;  Drawdown Date
means the date requested by the Borrower for the Loan to be made, or (as the
context requires) the date on which the Loan is actually made;  Drawdown Notice
means a notice in the form set out in Schedule 2 (or in any other form which
the Agent approves or reasonably requires);  3


Earnings
means, in relation to a Ship, all moneys whatsoever which are now, or later become,
payable (actually or contingently) to the Owner of that Ship or the Security
Trustee and which arise out of the use or operation of that Ship, including
(but not limited to):  (a)           except to the extent that they fall
within paragraph (b);  (i)            all freight, hire and passage
moneys;  (ii)compensation payable to the Owner or the
Security Trustee in the event of requisition of the Ship for hire;  (iii)          remuneration for salvage and towage
services;  (iv)          demurrage and detention moneys;  (v)damages for breach (or payments for
variation or termination) of any charterparty or other contract for the
employment of the Ship; and  (vi)all moneys which are at any time payable
under any Insurances in respect of loss of hire; and  (b)if and whenever the Ship is employed on
terms whereby any moneys falling within paragraphs (a)(i) to (vi) are
pooled or shared with any other person, that proportion of the net receipts of
the relevant pooling or sharing arrangement which is attributable to the Ship;  Earnings Account
means an account in the joint names of the Owners with the Agent in London
designated LTSB re: Enterprise Bulk Services S.A. and Oceanic Bulk Services
S.A. - Earnings Account, with account number 11595636, or any other account
(with that or another office of the Agent or with a bank or financial
institution other than the Agent) which is designated by the Agent as the
Earnings Account for the purposes of this Agreement;  Environmental Claim
means:  (a)any claim by any governmental, judicial or
regulatory authority which arises out of an Environmental Incident or an
alleged Environmental Incident or which relates to any Environmental Law; or  (b)any claim by any other person which relates
to an Environmental Incident or to an alleged Environmental Incident,  and claim means a
claim for damages, compensation, fines, penalties or any other payment of any
kind whether or not similar to the foregoing; an order or direction to take, or
not to take, certain action or to desist from or suspend certain action; and
any form of enforcement or regulatory action, including the arrest or
attachment of any asset;  Environmental Incident
means:  (a)any release of Environmentally Sensitive
Material from a Ship; or  (b)any incident in which Environmentally Sensitive
Material is released from a vessel other than a Ship and which involves a
collision between a Ship and such other vessel or some other incident of
navigation or operation, in either case, in connection with which a Ship is
actually or potentially likely to be arrested, attached, detained or injuncted
and/or a Ship and/or the Borrower or an Owner (as the case may be) and/or any
operator or manager of a Ship is at fault or allegedly at fault or otherwise
liable to be subject to any legal or administrative action; or  4


(c)any other incident in which Environmentally
Sensitive Material is released otherwise than from a Ship and in connection
with which a Ship is actually or potentially likely to be arrested and/or where
the Borrower or an Owner (as the case may be) and/or any operator or manager of
a Ship is at fault or allegedly at fault or otherwise liable to any legal or
administrative action;  Environmental Law
means any law relating to pollution or protection of the environment, to the
carriage of Environmentally Sensitive Material or to actual or threatened
releases of Environmentally Sensitive Material;  Environmentally Sensitive
Material means oil, oil products and any other substance (including
any chemical, gas or other hazardous or noxious substance) which is (or is
capable of being or becoming) polluting, toxic or hazardous;  Event of Default
means any of the events or circumstances described in Clause 19.1;  Exchange
Act  means the Securities
Exchange Act of 1934 of the United States;  Finance Documents
means:  (a)           this Agreement;  (b)           the Agency and Trust Agreement;  (c)           the Guarantees;  (d)           the General Assignments;  (e)           the Mortgages;  (f)            the Accounts Security Deed; and  (g)any other document (whether creating a
Security Interest or not) which is executed at any time by the Borrower or any
other person as security for, or to establish any form of subordination or
priorities arrangement in relation to, any amount payable to the Lenders under
this Agreement or any of the other documents referred to in this definition;  Financial Indebtedness
means, in relation to a person (the debtor), a
liability of the debtor:  (a)for principal, interest or any other sum
payable in respect of any moneys borrowed or raised by the debtor;  (b)under any loan stock, bond, note or other
debt security issued by the debtor;  (c)under any acceptance credit, guarantee or
letter of credit facility or dematerialised equivalent made available to the
debtor;  (d)under a financial lease, a deferred
purchase consideration arrangement (other than trade and accounts payable
incurred in the ordinary course of business) or any other agreement having the
commercial effect of a borrowing or raising of money by the debtor;  5


(e)under any foreign exchange transaction, any
interest or currency swap or any other kind of derivative transaction entered
into by the debtor or, if the agreement under which any such transaction is
entered into requires netting of mutual liabilities, the liability of the
debtor for the net amount; or  (f)under a guarantee, indemnity or similar
obligation entered into by the debtor in respect of a liability of another
person which would fall within paragraphs (a) to (e) if the
references to the debtor referred to the other person;  FRANKLIN  means the 40,000 dwt ice class dry bulk
vessel of 27,078 gross registered tons and 13,844, net registered tons
currently named FRANKLIN and registered in the name of the Franklin Seller on
the German flag and bareboat registered in Antigua and Barbuda and to be
purchased by the relevant Owner pursuant to the Franklin MOA and to be
registered in the name of the relevant Owner under Panamanian flag with the name
ICE TRADER II;  Franklin
MOA  means the memorandum of
agreement dated 22 January 2008 made between the Franklin Seller and the
Borrower as amended by addendum no. 1 dated 22 January 2008 made between
the Franklin Seller and the relevant Owner pursuant to which the Franklin
Seller has agreed to sell, and the relevant Owner has agreed to purchase,
FRANKLIN for a purchase price of $35,500,000;  Franklin
Seller  means MS Franklin
GmbH and Co. KG, a corporation organised and existing under the laws of Germany
and having its registered office at Stavendamm 4a, 28195 Bremen, Germany;  GAAP
means generally accepted accounting principles in the United States of America;  General
Assignment means, in relation to a Ship, the assignment of the
Earnings, the Insurances and any Requisition Compensation in the Agreed Form;  Guarantee
means, in relation to an Owner, a guarantee and indemnity in respect of the
liabilities of the Borrower under this Agreement to be executed by such Owner
under this Agreement in the Agreed Form;  IFRS means international accounting
standards within the meaning of the IAS Regulations 1606/2002 to the extent
applicable to the relevant financial statements;  Indenture
means an indenture dated 16 November 2006 entered into between the
Borrower, the guarantors named as guarantors therein and Wilmington Trust
Company as trustee;  Insurances
means, in relation to a Ship:  (a)all policies and contracts of insurance,
including entries of that Ship in any protection and indemnity or war risks
association, which are effected in respect of that Ship, its Earnings or
otherwise in relation to it; and  (b)all rights and other assets relating to, or
derived from, any of the foregoing, including any rights to a return of a
premium,  but excluding any insurances taken out for
the sole benefit of the Creditor Parties, or any of them;  Interest Period
means a period determined in accordance with Clause 6;  6


ISM Code means the International Safety Management Code
(including the guidelines on its implementation), adopted by the International
Maritime Organisation, as the same may be amended or supplemented from time to
time (and the terms safety management system,
Safety Management Certificate and Document of Compliance have the same meanings as are given
to them in the ISM Code);  ISPS
Codemeans the International Ship and Port
Facility Security Code as adopted by the International Maritime Organisation,
as the same may be amended or supplemented from time to time;  ISSCmeans a
valid and current International Ship Security Certificate issued under the ISPS
Code;  Lender means a bank or financial institution listed in Schedule 1
and acting through its branch indicated in Schedule 1 (or through another
branch notified to the Borrower under Clause 26.14) or its transferee,
successor or assign;  LIBOR means,
in relation to any period for which an interest rate is to be determined under
any provision of a Finance Document:  (a)           the applicable Screen Rate; or  (b)if no Screen Rate is available for that
period, the rate per annum determined by the Agent to be the arithmetic mean
(rounded upwards to 4 decimal places) of the rates, as supplied to the Agent at
its request, quoted by each Reference Bank to leading banks in the London
Interbank Market,  as of 11 a.m. (London time) on the
Quotation Date for that period for the offering of deposits in the relevant
currency and for a period comparable to that period;  Loan means the
principal amount for the time being outstanding under this Agreement;  Major Casualty
means, in relation to a Ship, any casualty to that Ship in respect of which the
claim or the aggregate of the claims against all insurers, before adjustment
for any relevant franchise or deductible, exceeds $500,000 or the equivalent in
any other currency;  Majority Lenders
means:  (a)before the Loan has been made, Lenders
whose Commitments total 66.66 per cent. of the Total Commitments; and  (b)after the Loan has been made, Lenders whose
Contributions total 66.66 per cent. of the Loan;  Mandatory
Cost Rate means the percentage calculated at an annual rate
determined in accordance with Schedule 5;  Margin means
for the period from the Drawdown Date to the date falling 6 months after the
Drawdown Date 2.00 per cent. per annum and thereafter 3.50 per cent. per annum;  MOAs  means the Baffin MOA and the Franklin MOA;  Mortgage
means, in relation to a Ship, the first preferred Panamanian ship mortgage on
the Ship in the Agreed Form;  Negotiation Period
has the meaning given in Clause 5.9;  7


Notifying Lender
has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;  Owner  means:  (a)in relation to BAFFIN, Enterprise Bulk
Services S.A., a corporation incorporated in Panama whose registered office is
at c/o Vives y Asociados, Calle Beatriz M. de Cabal, Edificio P.H. Proconsa II,
8avo. Piso, Panama, Apartado Postal 0816-01461; and  (b)in relation to FRANKLIN, Oceanic Bulk
Services S.A., a corporation incorporated in Panama whose registered office is
at c/o Vives y Asociados, Calle Beatriz M. de Cabal, Edificio P.H. Proconsa II,
8avo. Piso, Panama, Apartado Postal 0816-01461;  Payment Currency
has the meaning given in Clause 21.4;  Permitted
Holdersmeans any of Arvid Tage,
Serguei Zoudov or David Znak or any member of the immediate family thereof or
any trust or similar vehicle formed for the benefit of any of them or any
entity that is at least majority owned and controlled, directly or indirectly
by any of them;  Permitted Security
Interests means:  (a)Security Interests created by the Borrower
under the Bond Documents;  (b)Security Interests created by the Finance
Documents;  (c)liens for unpaid masters and crews wages
in accordance with usual maritime practice;  (d)liens for salvage;  (e)liens arising by operation of law for not
more than 2 months prepaid hire under any charter in relation to a Ship
not prohibited by this Agreement;  (f)liens for masters disbursements incurred
in the ordinary course of trading and any other lien arising by operation of law
or otherwise in the ordinary course of the operation, repair or maintenance of
a Ship, provided such liens do not secure amounts more than 30 days
overdue (unless the overdue amount is being contested by the relevant Owner (as
the case may be) in good faith by appropriate steps) and subject, in the case
of liens for repair or maintenance, to Clause 14.11(g);  (g)any Security Interest created in favour of
a plaintiff or defendant in any proceedings or arbitration as security for
costs and expenses where the Borrower or an Owner (as the case may be) is
actively prosecuting or defending such proceedings or arbitration in good
faith; and  (h)Security Interests arising by operation of
law in respect of taxes which are not overdue for payment or in respect of
taxes being contested in good faith by appropriate steps and in respect of
which appropriate reserves have been made;  Pertinent Document
means:  (a)any Finance Document;  8


(b)any policy or contract of insurance
contemplated by or referred to in Clause 13 or any other provision of this
Agreement or another Finance Document;  (c)any other document contemplated by or
referred to in any Finance Document; and  (d)any document which has been or is at any
time sent by or to a Servicing Bank in contemplation of or in connection with
any Finance Document or any policy, contract or document falling within
paragraphs (b) or (c);  Pertinent Jurisdiction,
in relation to a company, means:  (a)England and Wales;  (b)the country under the laws of which the
company is incorporated or formed;  (c)a country in which the company has the
centre of its main interests or in which the companys central management and
control is or has recently been exercised;  (d)a country in which the overall net income
of the company is subject to corporation tax, income tax or any similar tax;  (e)a country in which assets of the company
(other than securities issued by, or loans to, related companies) having a
substantial value are situated, in which the company maintains a branch or a
permanent place of business, or in which a Security Interest created by the
company must or should be registered in order to ensure its validity or
priority; and  (f)a country the courts of which have
jurisdiction to make a winding up, administration or similar order in relation
to the company, whether as main or territorial or ancillary proceedings, or
which would have such jurisdiction if their assistance were requested by the
courts of a country referred to in paragraphs (b) or (c);  Pertinent Matter
means:  (a)any transaction or matter contemplated by,
arising out of, or in connection with a Pertinent Document; or  (b)any statement relating to a Pertinent
Document or to a transaction or matter falling within paragraph (a),  and covers any such transaction, matter or
statement, whether entered into, arising or made at any time before the signing
of this Agreement or on or at any time after that signing;  Potential Event of Default
means an event or circumstance which, with the giving of any notice, the lapse
of time, a determination of the Majority Lenders and/or the satisfaction of any
other condition, would constitute an Event of Default;  Quotation Date
means two Business Days prior to the start of the relevant Interest Period;  Reference
Banks  means, subject to
Clause 26.16, the London branches of Lloyds TSB Bank plc, The Royal Bank of
Scotland plc, HSBC Bank plc and Barclays Bank plc;  Relevant Person
has the meaning given in Clause 19.9;  Repayment Date
means 27 November 2008;  9


Requisition Compensation  includes all compensation or other moneys
payable by reason of any act or event such as is referred to in paragraph (b) of
the definition of Total Loss;  Screen
Rate means, in relation to any period for which an interest rate is
to be determined under any provision of a Finance Document, the British Bankers
Association Interest Settlement Rate for the relevant currency and period
displayed on the appropriate page of the Reuters screen.  If the agreed page is replaced or
service ceases to be available, the Agent may specify another page or
service displaying the appropriate rate after consultation with the Borrower
and the Lenders;  Secured Liabilities
means all liabilities which the Borrower, the Security Parties or any of them
have, at the date of this Agreement or at any later time or times, under or in
connection with any Finance Document or any judgment relating to any Finance
Document; and for this purpose, there shall be disregarded any total or partial
discharge of these liabilities, or variation of their terms, which is effected
by, or in connection with, any bankruptcy, liquidation, arrangement or other
procedure under the insolvency laws of any country;  Security Interest
means:  (a)a mortgage, charge (whether fixed or
floating) or pledge, any maritime or other lien or any other security interest
of any kind;  (b)the security rights of a plaintiff under an
action in rem; and  (c)any arrangement entered into by a person (A) the
effect of which is to place another person (B) in a position which is
similar, in economic terms, to the position in which B would have been had he
held a security interest over an asset of A; but this paragraph (c) does
not apply to a right of set off or combination of accounts conferred by the
standard terms of business of a bank or financial institution;  Security Party
means each Owner and any other person (except a Creditor Party) who, as a
surety or mortgagor, as a party to any subordination or priorities arrangement,
or in any similar capacity, executes a document falling within the last
paragraph of the definition of Finance
Documents;  Security Period
means the period commencing on the date of this Agreement and ending on the
date on which the Agent notifies the Borrower, the Security Parties and the
Lenders that:  (a)all amounts which have become due for
payment by the Borrower or any Security Party under the Finance Documents have
been paid;  (b)no amount is owing or has accrued (without
yet having become due for payment) under any Finance Document;  (c)neither the Borrower nor any Security Party
has any future or contingent liability under Clause 20, 21 or 22 below or any
other provision of this Agreement or another Finance Document; and  (d)the Agent, the Security Trustee and the
Majority Lenders do not consider that there is a significant risk that any
payment or transaction under a Finance Document would be set aside, or would
have to be reversed or adjusted, in any present or possible future bankruptcy
of the Borrower or a Security Party or in any present or possible future
proceeding relating to a Finance Document or any asset covered (or previously
covered) by a Security Interest created by a Finance Document;  10


Security Trustee
means Lloyds TSB Bank plc, acting in such capacity through its office at 10
Gresham Street, London EC2V 7AE, or any successor of it appointed under
clause 5 of the Agency and Trust Agreement;  Sellers  means the Baffin Seller and the Franklin
Seller;  Servicing Bank
means the Agent or the Security Trustee;  Ships
means the BAFFIN and the FRANKLIN;  SMCmeans a safety management certificate issued
in respect of each Ship in accordance with Rule 13 of the ISM Code;  Total Loss
means, in relation to a Ship:  (a)actual,
constructive, compromised, agreed or arranged total loss of that Ship;  (b)any
expropriation, confiscation, requisition or acquisition of that Ship, whether
for full consideration, a consideration less than its proper value, a nominal
consideration or without any consideration, which is effected by any government
or official authority or by any person or persons claiming to be or to
represent a government or official authority (excluding a requisition for hire
for a fixed period not exceeding 1 year without any right to an extension)
unless it is within 1 month redelivered to the full control of the Owner of
that Ship; and  (c)any arrest, capture, seizure or detention
of that Ship (including any hijacking, piracy or theft) unless it is within 1
month redelivered to the full control of the Owner of that Ship;  Total Loss Date
means, in relation to a Ship:  (a)in the case of an actual loss of that Ship,
the date on which it occurred or, if that is unknown, the date when that Ship
was last heard of;  (b)in the case of a constructive, compromised,
agreed or arranged total loss of that Ship, the earliest of:  (i)the date on which a notice of abandonment
is given to the insurers; and  (ii)the date of any compromise, arrangement or
agreement made by or on behalf of the relevant Owner with that Ships insurers
in which the insurers agree to treat that Ship as a total loss; and  (c)in the case of any other type of total
loss, on the date (or the most likely date) on which it appears to the Agent
that the event constituting the total loss occurred;  Transfer Certificate  has the meaning given in Clause 26.2; and  Trust Property
has the meaning given in clause 3.1 of the Agency and Trust Agreement.  1.2          Construction
of certain terms.In this
Agreement:  administration
noticemeans a notice appointing an administrator, a
notice of intended appointment and any other notice which is required by law
(generally or in the case concerned) to be filed with the court or given to a
person prior to, or in connection with, the appointment of an administrator;  11


approved
means, for the purposes of Clause 13, approved in writing by the Agent;  asset includes
every kind of property, asset, interest or right, including any present, future
or contingent right to any revenues or other payment;  company
includes any partnership, joint venture and unincorporated association;  consent
includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration, notarisation and legalisation;  contingent liability
means a liability which is not certain to arise and/or the amount of which
remains unascertained;  document
includes a deed; also a letter or fax;  excess risks
means, in relation to a Ship, the proportion of claims for general average,
salvage and salvage charges not recoverable under the hull and machinery
policies in respect of the Ship in consequence of its insured value being less
than the value at which the Ship is assessed for the purpose of such claims;  expense means
any kind of cost, charge or expense (including all legal costs, charges and expenses)
and any applicable value added or other tax;  law includes
any order or decree, any form of delegated legislation, any treaty or
international convention and any regulation or resolution of the Council of the
European Union,  the European Commission,
the United Nations or its Security Council;  legal or administrative
action means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;  liability
includes every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or otherwise;  months shall
be construed in accordance with Clause 1.3;  obligatory insurances
means, in relation to a Ship, all insurances effected, or which the Borrower is
obliged to procure are effected, under Clause 13 or any other provision of this
Agreement or another Finance Document;  parent company
has the meaning given in Clause 1.4;  person
includes any company; any state, political sub-division of a state and local or
municipal authority; and any international organisation;  policy, in
relation to any insurance, includes a slip, cover note, certificate of entry or
other document evidencing the contract of insurance or its terms;  protection and indemnity
risks means the usual risks covered by a protection and indemnity
association managed in London, including pollution risks and the proportion (if
any) of any sums payable to any other person or persons in case of collision
which are not recoverable under the hull and machinery policies by reason of
the incorporation in them of clause 6 of the International Hull Clauses
(1/11/02 or 1/11/03) or clause 8 of the Institute Time Clauses (Hulls)
(1/11/95) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute
Amended Running Down Clause (1/10/71) or any equivalent provision;  12


regulation
includes any regulation, rule, official directive, request or guideline whether
or not having the force of law of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;  subsidiary has
the meaning given in Clause 1.4;  tax includes
any present or future tax, duty, impost, levy or charge of any kind which is
imposed by any state, any political sub-division of a state or any local or
municipal authority (including any such imposed in connection with exchange
controls), and any connected penalty, interest or fine; and  war risks includes
the risk of mines and all risks excluded by clause 29 of the International Hull
Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses
(Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).  1.3Meaning
of month.A period of one or more months ends on the day in the relevant calendar month
numerically corresponding to the day of the calendar month on which the period
started (the numerically corresponding day),
but:  (a)on the Business Day following
the numerically corresponding day if the numerically corresponding day is not a
Business Day or, if there is no later Business Day in the same calendar month,
on the Business Day preceding the numerically corresponding day; or  (b)on the last Business Day in
the relevant calendar month, if the period started on the last Business Day in
a calendar month or if the last calendar month of the period has no numerically
corresponding day,  and month and monthly shall
be construed accordingly.  1.4Meaning
of subsidiary.A company (S) is
a subsidiary of another company (P) if:  (a)a majority of the issued
shares in S (or a majority of the issued shares in S which carry unlimited
rights to capital and income distributions) are directly or indirectly owned by
P; or  (b)P has direct or indirect
control over a majority of the voting rights attaching to the issued shares of
S; or  (c)P has the direct or indirect
power to appoint or remove a majority of the directors of S; or  (d)P otherwise has the direct or
indirect power to ensure that the affairs of S are conducted in accordance with
the wishes of P,  and any
company of which S is a subsidiary is a parent company of S.  1.5General
Interpretation.In this
Agreement:  (a)references to, or to a
provision of, a Finance Document or any other document are references to it as
amended or supplemented, whether before the date of this Agreement or
otherwise;  (b)references to, or to a
provision of, any law include any amendment, extension, re-enactment or
replacement, whether made before the date of this Agreement or otherwise;  (c)words denoting the singular
number shall include the plural and vice versa; and  (d)Clauses 1.1 to 1.5 apply
unless the contrary intention appears.  13


1.6Headings.In interpreting a Finance Document or any
provision of a Finance Document, all clause, sub-clause and other headings in
that and any other Finance Document shall be entirely disregarded.  2FACILITY  2.1Amount of
facility.Subject to the other provisions of this
Agreement, the Lenders shall make a loan facility of up to the lesser of (i) $30,000,000
and (ii) thirty per cent. (30%) of the aggregate market value (determined
in accordance with Clause 15.3) of the Ships available to the Borrower.  2.2Lenders
participations in Loan.Subject to the
other provisions of this Agreement, each Lender shall participate in the Loan
in the proportion which, as at the Drawdown Date, its Commitment bears to the
Total Commitments.  2.3Purpose
of Loan.The Borrower undertakes with each Creditor
Party to use the Loan only for the purpose stated in the preamble to this
Agreement.  3POSITION
OF THE LENDERS  3.1Interests
of Lenders several.The rights of
the Lenders under this Agreement are several.  3.2Individual
Lenders right of action.Each Lender shall be entitled to sue for any amount
which has become due and payable by the Borrower to it under this Agreement
without joining the Agent, the Security Trustee or any other Lender as additional
parties in the proceedings.  3.3Proceedings
by individual Lender requiring Majority Lender consent.Except as provided in Clause
3.2, no Lender may commence proceedings against the Borrower or any Security
Party in connection with a Finance Document without the prior consent of the
Majority Lenders.  3.4Obligations
of Lenders several.The
obligations of the Lenders under this Agreement are several; and a failure of a
Lender to perform its obligations under this Agreement shall not result in:  (a)the obligations of the other
Lenders being increased; nor  (b)the Borrower, any Security
Party or any other Lender being discharged (in whole or in part) from its
obligations under any Finance Document,  and in no circumstances
shall a Lender have any responsibility for a failure of another Lender to
perform its obligations under this Agreement.  4DRAWDOWN  4.1Request
for advance of Loan.Subject to the
following conditions, the Borrower may request the Loan to be made by ensuring
that the Agent receives a completed Drawdown Notice on or before the intended
Drawdown Date.  4.2Availability.The conditions referred to in Clause 4.1 are
that:  (a)the Drawdown Date has to be a
Business Day during the Availability Period; and  (b)the Loan shall be made in a
single advance and if less than the maximum amount of the Loan is advanced to
the Borrower on the Drawdown Date, the undrawn balance of the Loan shall be
cancelled and the Lenders obligation to advance such undrawn balance shall
terminate at that time.  14


4.3Notification
to Lenders of receipt of a Drawdown Notice.The
Agent shall promptly notify the Lenders that it has received a Drawdown Notice
and shall inform each Lender of:  (a)the amount of the Loan and the
Drawdown Date;  (b)the amount of that Lenders
participation in the Loan; and  (c)the duration of the first
Interest Period.  4.4Drawdown
Notice irrevocable.A Drawdown
Notice must be signed by an officer of the Borrower; and once served, a Drawdown
Notice cannot be revoked without the prior consent of the Agent, acting on the
authority of the Majority Lenders.  4.5Lenders
to make available Contributions.Subject to the provisions of this Agreement, each Lender shall, on and
with value on the Drawdown Date, make available to the Agent for the account of
the Borrower the amount due from that Lender under Clause 2.2.  4.6Disbursement
of Loan.Subject to the provisions of this Agreement,
the Agent shall on the Drawdown Date pay to the Borrower the amounts which the
Agent receives from the Lenders under Clause 4.5; and that payment to the
Borrower shall be made:  (a)to the account of the Baffin
Seller, the details of which the Borrower shall specify in the Drawdown Notice;
and  (b)in the like funds as the Agent
received the payments from the Lenders.  4.7Disbursement
of Loan to third party.The payment by the Agent under
Clause 4.6 to the Baffin Sellers account shall constitute the making of the
Loan and the Borrower shall at that time become indebted, as principal and
direct obligor, to each Lender in an amount equal to that Lenders
Contribution.  5INTEREST  5.1Payment
of normal interest.Subject to the
provisions of this Agreement, interest on the Loan in respect of each Interest
Period shall be paid by the Borrower on the last day of that Interest Period.  5.2Normal
rate of interest.Subject to the
provisions of this Agreement, the rate of interest on the Loan in respect of an
Interest Period shall be the aggregate of the Margin, the Mandatory Cost Rate
and LIBOR for that Interest Period.  5.3Notification
of rates of normal interest.The Agent
shall notify the Borrower and each Lender of each rate of interest as soon as
reasonably practicable after each is determined.  5.4Obligation
of Reference Banks to quote.A Reference
Bank which is a Lender shall use all reasonable efforts to supply the quotation
required of it for the purposes of fixing a rate of interest under this
Agreement.  5.5Absence
of quotations by Reference Banks.If
any Reference Bank fails to supply a quotation, the Agent shall determine the
relevant LIBOR on the basis of the quotations supplied by the other Reference
Bank or Banks; but if 2 or more of the Reference Banks fail to provide a
quotation, the relevant rate of interest shall be set in accordance with the
following provisions of this Clause 5.  15


5.6Market
disruption.The following provisions of
this Clause 5 apply if:  (a)no Screen Rate is available
for an Interest Period and 3 or more of the Reference Banks do not, before
1.00pm (London time) on the Quotation Date, provide quotations to the Agent in
order to fix LIBOR; or  (b)at least 1 Business Day before
the start of an Interest Period, Lenders having Contributions together
amounting to more than 50 per cent. of the Loan (or, if the Loan has not been
made, Commitments amounting to more than 50 per cent. of the Total Commitments)
notify the Agent that LIBOR fixed by the Agent would not accurately reflect the
cost to those Lenders of funding their respective Contributions (or any part of
them) during the Interest Period in the London Interbank Market at or about
11.00 a.m. (London time) on the date which is 2 Business Days before the
first day of that Interest Period; or  (c)at least 1 Business Day before
the start of an Interest Period, the Agent is notified by a Lender (the Affected Lender) that for any reason it is unable to obtain
Dollars in the London Interbank Market in order to fund its Contribution (or
any part of it) during the Interest Period.  5.7Notification
of market disruption.The Agent
shall promptly notify the Borrower and each of the Lenders stating the
circumstances falling within Clause 5.6 which have caused its notice to be
given.  5.8Suspension
of drawdown.If the Agents notice under
Clause 5.7 is served before the Loan is made:  (a)in a case falling within
Clause 5.6(a) or (b), the Lenders obligations to make the Loan;  (b)in a case falling within
Clause 5.6(c), the Affected Lenders obligation to participate in the Loan;  shall be
suspended while the circumstances referred to in the Agents notice continue.  5.9Negotiation
of alternative rate of interest.If
the Agents notice under Clause 5.7 is served after the Loan is made, the
Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender
shall use reasonable endeavours to agree, within the 30 days after the date on
which the Agent serves its notice under Clause 5.7 (the Negotiation
Period), an alternative interest rate or (as the case may be) an
alternative basis for the Lenders or (as the case may be) the Affected Lender
to fund or continue to fund their or its Contribution during the Interest
Period concerned.  5.10Application
of agreed alternative rate of interest.Any
alternative interest rate or an alternative basis which is agreed during the
Negotiation Period shall take effect in accordance with the terms agreed.  5.11Alternative
rate of interest in absence of agreement.If
an alternative interest rate or alternative basis is not agreed within the
Negotiation Period, and the relevant 
circumstances are continuing at the end of the Negotiation Period, then
the Agent shall, with the agreement of each Lender or (as the case may be) the
Affected Lender, set an interest period and interest rate representing the cost
of funding of the Lenders or (as the case may be) the Affected Lender in
Dollars or in any available currency of their or its Contribution plus the
Margin; and the procedure provided for by this Clause 5.11 shall be repeated if
the relevant circumstances are continuing at the end of the interest period so
set by the Agent.  16


5.12Notice of
prepayment.If the Borrower does not agree
with an interest rate set by the Agent under Clause 5.11, the Borrower may give
the Agent not less than 15 days notice of its intention to prepay at the end
of the interest period set by the Agent.  5.13Prepayment;
termination of Commitments.A notice under
Clause 5.12 shall be irrevocable; the Agent shall promptly notify the Lenders
or (as the case may require) the Affected Lender of the Borrowers notice of
intended prepayment; and:  (a)on the date on which the Agent
serves that notice, the Total Commitments or (as the case may require) the
Commitment of the Affected Lender shall be cancelled; and  (b)on the last Business Day of
the interest period set by the Agent, the Borrower shall prepay (without
premium or penalty) the Loan or, as the case may be, the Affected Lenders
Contribution, together with accrued interest thereon at the applicable rate
plus the Margin.  5.14Application
of prepayment.The provisions of Clause 8
shall apply in relation to the prepayment.  6INTEREST
PERIODS  6.1Commencement
of Interest Periods.The first
Interest Period shall commence on the Drawdown Date and each subsequent
Interest Period shall commence on the expiry of the preceding Interest Period.  6.2Duration
of normal Interest Periods.Subject to
Clause 6.3, each Interest Period shall be:  (a)1 month; or  (b)such other period as the Agent
may, with the authorisation of the Majority Lenders, agree with the Borrower.  6.3Duration
of Interest Periods for repayment instalments.In
respect of an amount due to be repaid under Clause 8 on the Repayment Date, an
Interest Period shall end on that Repayment Date.  7DEFAULT
INTEREST  7.1Payment
of default interest on overdue amounts.The
Borrower shall pay interest in accordance with the following provisions of this
Clause 7 on any amount payable by the Borrower under any Finance Document which
the Agent, the Security Trustee or the other designated payee does not receive
on or before the relevant date, that is:  (a)the date on which the Finance
Documents provide that such amount is due for payment; or  (b)if a Finance Document provides
that such amount is payable on demand, the date on which the demand is served;
or  (c)if such amount has become
immediately due and payable under Clause 19.4, the date on which it became immediately
due and payable.  7.2Default
rate of interest.Interest shall
accrue on an overdue amount from (and including) the relevant date until the
date of actual payment (as well after as before judgment) at the rate per annum
determined by the Agent to be 2 per cent. above:  17


(a)in the case of an overdue
amount of principal, the higher of the rates set out at Clauses 7.3 (a) and
(b); or  (b)in the case of any other
overdue amount, the rate set out at Clause 7.3(b).  7.3Calculation
of default rate of interest.The rates referred
to in Clause 7.2 are:  (a)the rate applicable to the
overdue principal amount immediately prior to the relevant date (but only for
any unexpired part of any then current Interest Period); and  (b)the aggregate of the Margin
and the Mandatory Cost Rate (if any) plus, in respect of successive periods of
any duration (including at call) up to 3 months which the Agent may select from
time to time, the rate from time to time determined by the Agent in its
discretion as the cost of obtaining funds for such amounts equal to such
overdue amounts and for such periods.  7.4Notification
of interest periods and default rates.The
Agent shall promptly notify the Lenders and the Borrower of each interest rate
determined by the Agent under Clause 7.3 and of each period selected by the
Agent for the purposes of paragraph (b) of that Clause; but this shall not
be taken to imply that the Borrower is liable to pay such interest only with
effect from the date of the Agents notification.  7.5Payment
of accrued default interest.Subject to the
other provisions of this Agreement, any interest due under this Clause shall be
paid on the last day of the period by reference to which it was determined; and
the payment shall be made to the Agent for the account of the Creditor Party to
which the overdue amount is due.  7.6Compounding
of default interest.Any such
interest which is not paid at the end of the period by reference to which it
was determined shall thereupon be compounded.  8REPAYMENT
AND PREPAYMENT  8.1Amount of
repayment instalments.The Borrower
shall repay the Loan in full no later than the Repayment Date.  On the Repayment Date, the Borrower shall
additionally pay to the Agent for the account of the Creditor Parties all other
sums then accrued or owing under any Finance Document.  8.2Voluntary
prepayment.Subject to the following
conditions, the Borrower may prepay the whole or any part of the Loan at any
time.  8.3Conditions
for voluntary prepayment.The conditions
referred to in Clause 8.2 are that:  (a)a partial prepayment shall be
$600,000 or a multiple of $600,000;  (b)the Agent has received from
the Borrower at least 15 days (or 5 days in the case of prepayments made from
amounts on deposit in the Collateral Account) prior written notice specifying
the amount to be prepaid and the date on which the prepayment is to be made;
and  (c)the Borrower has provided
evidence satisfactory to the Agent that any consent required by the Borrower or
any Security Party in connection with the prepayment has been obtained and
remains in force, and that any regulation relevant to this Agreement which
affects the Borrower or any Security Party has been complied with.  8.4Effect of
notice of prepayment.A prepayment
notice may not be withdrawn or amended without the consent of the Agent, given
with the authorisation of the Majority Lenders, and the amount specified in the
prepayment notice shall become due and payable by the Borrower on the date for
prepayment specified in the prepayment notice.  18


8.5Notification
of notice of prepayment.The Agent
shall notify the Lenders promptly upon receiving a prepayment notice, and shall
provide any Lender which so requests with a copy of any document delivered by
the Borrower under Clause 8.3(c).  8.6Mandatory
prepayment.The Borrower shall be obliged
to prepay the relevant amount if a Ship is sold or becomes a Total Loss:  (a)in the case of a sale on or
before the date on which the sale is completed by delivery of the Ship to the
buyer; or  (b)in the case of a Total Loss,
on the earlier of the date falling 120 days after the Total Loss Date and the
date of receipt by the Security Trustee of the proceeds of insurance relating
to such Total Loss;  for the purposes of this Clause, relevant amount means:  (i)provided that no Potential
Event of Default or Event of Default has occurred  and is continuing, the Allocated Amount; and  (ii)if a Potential Event of
Default or Event of Default has occurred and is continuing the total sale
proceeds in respect of such Ship on the basis of an arms length sale (net of
commissions, fees and other usual and customary transactions costs) or the
total proceeds of insurance relating to such Total Loss in respect of such Ship
(as the case may be).  8.7Amounts
payable on prepayment.A prepayment
shall be made together with accrued interest (and any other amount payable
under Clause 21 or otherwise) in respect of the amount prepaid and, if the
prepayment is not made on the last day of an Interest Period together with any
sums payable under Clause 21.1(b) but without further premium or penalty.  8.8No
reborrowing.No amount prepaid may be
reborrowed.  8.9Voluntary
Cancellation of Commitments.Subject to the
following conditions, the Borrower may cancel the whole or any part of the
Total Commitments.  8.10Conditions
for cancellation of Commitments.The
conditions referred to in Clause 8.9 are that:  (a)a partial cancellation shall
be in such amount specified by the Borrower in the notice referred to in
paragraph (b) below; and  (b)the Agent has received from
the Borrower at least 15 days prior written notice specifying the amount of
the Total Commitments to be cancelled and the date on which the cancellation is
to take effect.  8.11Effect of
notice of cancellation.The service of
a cancellation notice shall cause the amount of the Total Commitments specified
in the notice to be permanently cancelled and any partial cancellation shall be
applied against the Commitment of each Lender pro rata.  9CONDITIONS
PRECEDENT  9.1Documents,
fees and no default.Each Lenders
obligation to contribute to the Loan is subject to the following conditions
precedent:  19


(a)that, on or before the service
of the Drawdown Notice, the Agent receives the documents described in Part A
of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;  (b)that, on the Drawdown Date but
prior to the advance of the Loan, the Agent receives or is satisfied that it
will receive on the advance of the Loan the documents described in Part B
of Schedule 3 in form and substance satisfactory to it and its lawyers;  (c)that both at the date of the
Drawdown Notice and at the Drawdown Date:  (i)no Event of Default or
Potential Event of Default has occurred or would result from the borrowing of
the Loan;  (ii)the representations and
warranties in Clause 10 and those of the Borrower or any Security Party which
are set out in the other Finance Documents would be true and not misleading if
repeated on each of those dates with reference to the circumstances then
existing; and  (iii)none of the circumstances
contemplated by Clause 5.6 has occurred and is continuing;  (d)that, if the ratio set out in
Clause 15.1 were applied immediately following the making of the Loan, the
Borrower would not be obliged to provide additional security or prepay part of
the Loan under that Clause.  9.2Waiver of
conditions precedent.If the
Majority Lenders, at their discretion, permit the Loan to be borrowed before
certain of the conditions referred to in Clause 9.1 are satisfied and prior to
the disbursement of the Loan the Agent notifies the Borrower in writing which
conditions are not satisfied, the Borrower shall ensure that those conditions
are satisfied within 5 Business Days after the Drawdown Date (or such longer
period as the Agent may, with the authorisation of the Majority Lenders,
specify).  10REPRESENTATIONS
AND WARRANTIES  10.1General.The Borrower represents and warrants to
each Creditor Party as follows.  10.2Status.The Borrower is duly incorporated and validly
existing and in good standing under the laws of England and Wales.  10.3Share
capital and ownership.The Borrower
has an authorised share capital of £10,000,000 divided into 10,000,000 ordinary
shares of £1 each, 8,204,314 of which shares have been issued fully paid in
registered form, and the beneficial ownership of all those issued shares is
held ultimately by Britannia Bulk Holdings plc all of which shares have been
pledged to Goldman Sachs Credit Partners, L.P. as security trustee pursuant to
a debenture dated 16 November 2007 and a shares charge dated the date of
this Agreement.  10.4Corporate
power.The Borrower has the corporate capacity, and
has taken all corporate action and obtained all consents necessary for it:  (a)to execute the Finance
Documents to which the Borrower is a party; and  (b)to borrow under this Agreement
and to make all the payments contemplated by, and to comply with, those Finance
Documents.  10.5Consents
in force.All the consents referred to in Clause 10.4
remain in force and nothing has occurred which makes any of them liable to
revocation.  20


10.6Legal
validity.The Finance Documents to which the Borrower
is a party, do now or, as the case may be, will, upon execution and delivery
(and, where applicable, registration as provided for in the Finance Documents)
constitute the Borrowers legal, valid and binding obligations enforceable
against the Borrower in accordance with their respective terms subject to any
relevant insolvency laws affecting creditors rights generally.  10.7No
conflicts.The execution by the Borrower
of each Finance Document, and the borrowing by the Borrower of the Loan, and
its compliance with each Finance Document will not involve or lead to a
contravention of:  (a)any law or regulation; or  (b)the constitutional documents
of the Borrower; or  (c)any contractual or other
obligation or restriction which is binding on the Borrower or any of its
assets.  10.8No
withholding taxes.All payments
which the Borrower is liable to make under the Finance Documents may be made
without deduction or withholding for or on account of any tax payable under any
law of any Pertinent Jurisdiction.  10.9No
default.No Event of Default has occurred which is
continuing.  10.10Information.All material information which has been
provided in writing by or on behalf of the Borrower or any Security Party to
any Creditor Party in connection with any Finance Document satisfied the
requirements of Clause 11.5; all audited and unaudited accounts which have been
so provided satisfied the requirements of Clause 11.7; and there has been no
material adverse change in the financial position of the Borrower from that
disclosed in the latest of those accounts.  10.11No
litigation.No legal or administrative
action involving the Borrower (including action relating to any alleged or
actual breach of the ISM Code or the ISPS Code) is pending against or, to the
Borrowers knowledge, is likely to be commenced or taken, in each case which
could reasonably be expected to have a material adverse effect on the Borrowers
business or financial condition.  10.12Filings.Save for such registrations and filings as
are referred to in this Agreement and the Finance Documents it is not necessary
for the legality, validity, enforceability or admissibility in evidence of this
Agreement and the Finance Documents that any of them or any document relating
thereto be registered, filed, recorded or enrolled with any court or authority
in any relevant jurisdiction or that stamp, registration or similar taxes be
paid on or in relation to this Agreement or any of the Finance Documents.  10.13Compliance
with certain undertakings.At the date of
this Agreement, the Borrower is in compliance with Clauses 11.4, 11.9 and
11.12.  10.14Taxes
paid.The Borrower has paid all taxes due and
payable that are applicable to, or imposed on or in relation to the Borrower
and its business, other than any taxes being contested in good faith by
appropriate proceedings promptly instituted and diligently pursued and where
appropriate reserves have been established in accordance with GAAP.  10.15ISM Code
and ISPS Code compliance.All requirements of the ISM Code and the ISPS Code as
they relate to the Borrower, the Owners, the Approved Manager and the Ships
have been, or will be, complied with at the time of the Drawdown Date.  10.16No money
laundering.Without prejudice to the
generality of Clause 2.3, in relation to the borrowing by the Borrower of the
Loan, the performance and discharge of its obligations and liabilities under
the Finance Documents, and the transactions and other arrangements affected or
contemplated by the Finance Documents to which the Borrower is a party, the
Borrower confirms (i) that it is acting for its own account and for that
of the Owners; (ii) that it will use the proceeds of the Loan for its own
benefit and for that of the Owners, under its full responsibility and
exclusively for the purposes specified in this Agreement;  and (iii) that the foregoing will not
involve or lead to a contravention of any law, official requirement or other
regulatory measure or procedure implemented to combat money laundering (as
defined in Article 1 of Directive (91/308) EEC) of the Council of the
European Communities).  21


10.17Conditions
precedent documentation.All documents provided or to
be provided by the Borrower or any Security Party to any Creditor Party
pursuant to Schedule 3 are, or when provided shall be, true and complete copies
of such documents.  10.18Solvency.The Borrower is not insolvent or in
liquidation or administration or subject to any other insolvency procedure, and
no receiver, administrative receiver, administrator, liquidator, trustee or
analogous officer has been appointed in respect of the Borrower or any part of
its assets.  10.19Validity
and admissibility in evidence.All authorisations,
approvals, submissions, consents, licences, exemptions, filings, notices,
certifications or registrations which are required or desirable:  (a)to enable it
lawfully to enter into, exercise its rights and comply with its obligations in
each Finance Document to which it is a party;  (b)to make each
Finance Document to which it is a party admissible in evidence in its
jurisdiction of incorporation,  have
been obtained or effected and are in full force and effect.  10.20Tax
residence.The Borrower is a resident,
for corporate tax purposes, of England.  10.21Ship value.If the ratio set out in Clause 15.1 were
applied immediately following the making of the Loan, the Borrower would not be
obliged to provide additional security or prepay part of the Loan under that
Clause.  10.22Repetition of
representations and warranties.The
representations and warranties set out in Clauses 10.1 to 10.21 inclusive shall
survive the execution of this Agreement and shall be deemed to be repeated on
the Drawdown Date and at the commencement of each Interest Period, with respect
to the facts and circumstances existing at each such time, as if made at each
such time.  11GENERAL
UNDERTAKINGS  11.1General.The Borrower undertakes with each Creditor
Party to comply with the following provisions of this Clause 11 at all times
during the Security Period except as the Agent may, with the authorisation of
the Majority Lenders, otherwise permit.  11.2Title;
negative pledge.From and after
the Drawdown Date and unless a Ship is sold in compliance with this Agreement,
the Borrower will procure that each Owner shall hold the legal title to, and
own the entire beneficial interest in the Ship owned by that Owner, its
Insurances and Earnings, free from all Security Interests and other interests
and rights of every kind, except for those created by the Finance Documents and
the effect of assignments contained in the Finance Documents and except for
Permitted Security Interests.  11.3Disposal
of assets.  The Borrower will not transfer, lease or
otherwise dispose of all or a substantial part of its assets, whether by one
transaction or a number of transactions,  22


whether related or not except in the usual course of
its business and for fair market value payable in cash on completion of the
relevant transaction(s).  11.4Maintenance
of ownership of Owners.  The Borrower
shall remain the legal and direct beneficial owner of the entire issued and
allotted share capital of each Owner free of any Security Interest.  11.5Information
provided to be accurate.All factual
information (other than information under Clause 11.7) which is provided in
writing by or on behalf of the Borrower under or in connection with any Finance
Document will be true in all material respects and not misleading in any
material respect and will not omit any material fact necessary to make
statements therein not misleading.  11.6Provision
of financial statements.The Borrower
will send to the Agent:  (a)as soon as possible, but in no
event later than 30 April 2008, the audited consolidated accounts of the
Borrower and its subsidiaries;  (b)as soon as possible, but in no
event later than the Drawdown Date the latest unaudited consolidated accounts
of the Borrower and its subsidiaries certified by the chief financial officer
of the Borrower as fairly representing in all material respects the financial
condition of the Borrower and its subsidiaries at the date of those accounts
and of their profit for the period to which those accounts relate; and  (c)as soon as possible, but in no
event later than one month after the end of each quarter in each financial year
of the Borrower and its subsidiaries, the consolidated quarterly accounts of
the Borrower and its subsidiaries certified by the chief financial officer of
the Borrower as fairly representing in all material respects the financial
condition of the Borrower and its subsidiaries at the date of those accounts
and of their profit for the period to which those accounts relate.  11.7Form of
financial statements.All accounts
(audited and unaudited) delivered under Clause 11.6 will:  (a)be prepared in accordance with
all applicable laws and GAAP consistently applied;  (b)fairly represent in all
material respects the financial condition of the Borrower and its subsidiaries
at the date of those accounts and of their profit for the period to which those
accounts relate; and  (c)fully disclose or provide for
all significant liabilities of the Borrower and its subsidiaries required to be
disclosed in such accounts in accordance with GAAP.  11.8Consents.The Borrower will maintain in force and
promptly obtain or renew, and will promptly send certified copies to the Agent
of, all consents required:  (a)for the Borrower to perform
its obligations under any Finance 
Document to which it is a party; and  (b)for the validity or
enforceability of any Finance Document to which it is a party;  and the
Borrower will comply with the terms of all such consents.  11.9Maintenance
of Security Interests.The Borrower
will:  (a)at its own cost, do all that
it reasonably can to ensure that any Finance Document to which it is a party
validly creates the obligations which it purports to create; and  23


(b)without limiting the
generality of paragraph (a), at its own cost, promptly register, file, record
or enrol any Finance Document to which it is a party with any court or
authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance Document
to which it is a party, give any notice or take any other step which, in the
opinion of the Majority Lenders, is or has become necessary or desirable for
any Finance Document to which it is a party to be valid, enforceable or
admissible in evidence or to ensure.  11.10Notification
of litigation.The Borrower will provide the
Agent with details of any legal or administrative action involving the
Borrower, any Security Party, the Approved Manager or any Ship, the Earnings or
the Insurances as soon as such action is instituted or it becomes apparent to
the Borrower that it is likely to be instituted, unless the legal or
administrative action could not reasonably be considered material in the
context of any Finance Document.  11.11Principal
place of business.The Borrower
will maintain its principal place of business, and keep its corporate documents
and records, at the address stated at the commencement of this Agreement; and the
Borrower will not establish, or do anything as a result of which it would be
deemed to have, a place of business in any country other than England and
Denmark.  11.12Confirmation
of no default.The Borrower will, within 2
Business Days after service by the Agent of a written request, serve on the
Agent a notice which is signed by 2 directors (in their capacity as directors
and not in a personal capacity) of the Borrower and which:  (a)states that such directors
have no knowledge that any Event of Default or Potential Event of Default has
occurred; or  (b)states that no such directors
have no knowledge that any Event of Default or Potential Event of Default has
occurred, except for a specified event or matter, of which all material details
are given.  The Agent may serve requests under this Clause
11.13 from time to time but only if asked to do so by a Lender or Lenders
having Contributions exceeding 10 per cent. of the Loan or (if the Loan has not
been made) Commitments exceeding 10 per cent of the Total Commitments; and this
Clause 11.12 does not affect the Borrowers obligations under Clause 11.13.  11.13Notification
of default.The Borrower will notify the
Agent as soon as the Borrower becomes aware of:  (a)the occurrence of an Event of
Default or a Potential Event of Default; or  (b)any matter which indicates
that an Event of Default or a Potential Event of Default may have occurred; or  (c)the occurrence of an event of
default (however described) under any facility agreements to which Britannia
Bulk Finance Limited is a party on the date hereof,  and will keep
the Agent fully up-to-date with all developments.  11.14Provision
of further information.The Borrower
will, as soon as practicable after receiving the request, provide the Agent
with any additional financial or other information relating:  (a)to the Borrower, any Owner,
the Ships, the Earnings or the Insurances; or  (b)to any other matter relevant
to, or to any provision of, a Finance Document,  24


which may be
requested by the Agent, the Security Trustee or any Lender at any time.  11.15Provision
of copies and translation of documents.The
Borrower will supply the Agent with a sufficient number of copies of the
documents referred to above to provide 1 copy for each Creditor Party together
with, whenever necessary, a certified English translation prepared by a
translator approved by the Agent.  11.16Know your
customer checks.  The Borrower
will produce to the Agent such documents and evidence in relation to itself or
either Owner as the Agent or any of the Creditor Parties shall from time to
time reasonably require, based on applicable law and regulations from time to
time and the Agents or the relevant Creditor Partys own internal guidelines
from time to time relating to the Agents or the relevant Creditor Partys
knowledge of its customers.  Without
prejudice to the generality of the foregoing, the Borrower shall provide to the
Agent within 30 days of the Drawdown Date such documentation and evidence as is
reasonably requested by the Agent on or before the date of this Agreement in
order for the Lenders to comply with all necessary know your customer or
similar identification procedures in relation to the transactions contemplated
in the Finance Documents.  12CORPORATE
UNDERTAKINGS  12.1General.The Borrower also undertakes with each
Creditor Party to comply with the following provisions of this Clause 12 at all
times during the Security Period except as the Agent may, with the
authorisation of the Majority Lenders, otherwise permit.  12.2Maintenance
of status.The Borrower will maintain its
separate corporate existence and remain in good standing under the laws of the
England.  12.3Negative
undertakings.The Borrower will not:  (a)change its name or make any
substantial change to the nature of its business from that existing at the date
of this Agreement;  (b)enter into, terminate or make
any material amendments to any loan agreement with any of its affiliates or
enter into any new loan agreements with any of its affiliates, except on an
arms length basis on normal market terms; or  (c)enter into any form of
amalgamation, merger or de-merger or any form of reconstruction or
reorganisation.  13INSURANCE  13.1General.The Borrower also undertakes with each
Creditor Party to comply with the following provisions of this Clause 13 at all
times during the Security Period and, as applicable, to procure that the Owners
shall comply with the provisions of this Clause 13 in each case except as the
Agent may, with the authorisation of the Majority Lenders, otherwise permit.  13.2Maintenance
of obligatory insurances.The Borrower
shall procure that each Owner shall keep the Ship owned by it insured at its
expense against:  (a)fire and usual marine risks
(including hull and machinery and excess risks);  (b)war risks (including the
London blocking and trapping addendum or equivalent coverage and including war
and terrorism risks excluded from the protection and indemnity risks coverage);  (c)protection and indemnity
risks; and  25


(d)any other risks against which
the Security Trustee considers, having regard to practices and other
circumstances prevailing at the relevant time, it would in the opinion of the
Security Trustee be reasonable for the Borrower to insure and which are
specified by the Security Trustee by notice to the Borrower.  13.3Terms of
obligatory insurances.The Borrower
shall procure that each Owner shall effect such insurances in respect of the
Ship owned by it:  (a)in Dollars;  (b)in the case of fire and usual
marine risks and war risks, in an amount on an agreed value basis at least the
greater of (i) an amount which when aggregated with the insured value of
the other Ship is 120 per cent of the Loan and (ii) the market value of
the Ship;  (c)in the case of oil pollution
liability risks, for an aggregate amount equal to the highest level of cover
from time to time available under basic protection and indemnity club entry and
in the international marine insurance market;  (d)in relation to protection and
indemnity risks in respect of the Ships full tonnage;  (e)on approved terms; and  (f)through approved brokers and
with approved insurance companies and/or underwriters or, in the case of war
risks and protection and indemnity risks, in approved war risks and protection
and indemnity risks associations.  13.4Further
protections for the Creditor Parties.In
addition to the terms set out in Clause 13.3, the Borrower shall procure
that the obligatory insurances shall:  (a)whenever the Security Trustee
requires, name (or be amended to name) the Security Trustee as additional named
assured for its rights and interests, warranted no operational interest and
with full waiver of rights of subrogation against the Lenders, but without the
Security Trustee thereby being liable to pay (but having the right to pay)
premiums, calls or other assessments in respect of such insurance;  (b)name the Security Trustee as
loss payee with such directions for payment as the Security Trustee may
specify;  (c)provide that all payments by
or on behalf of the insurers under the obligatory insurances to the Security
Trustee shall be made without set-off, counterclaim or deductions or condition
whatsoever;  (d)provide that such obligatory
insurances shall be primary without right of contribution from other insurances
which may be carried by the Security Trustee or any other Creditor Party; and  (e)provide that the Security
Trustee may make proof of loss if the relevant Owner fails to do so.  13.5Renewal
of obligatory insurances.The Borrower
shall ensure that each Owner shall:  (a)at least 21 days before the
expiry of any obligatory insurance effected by each Owner:  (i)notify the Security Trustee of
the brokers (or other insurers) and any protection and indemnity or war risks
association through or with whom that Owner proposes to renew that obligatory
insurance and of the proposed terms of renewal; and  26


(ii)obtain the Security Trustees
approval to the matters referred to in paragraph (i);  (b)at least 14 days before the
expiry of any obligatory insurance, renew that obligatory insurance in
accordance with the Security Trustees approval pursuant to paragraph (a); and  (c)procure that the approved
brokers and/or the war risks and protection and indemnity associations with
which such a renewal is effected shall promptly after the renewal notify the
Security Trustee in writing of the terms and conditions of the renewal.  13.6Copies of
policies; letters of undertaking.The
Borrower shall ensure that all approved brokers provide the Security Trustee
with pro forma copies of all policies relating to the obligatory insurances
which they are to effect or renew and of a letter or letters or undertaking in
a form required by the Security Trustee and including undertakings by the
approved brokers that:  (a)they will have endorsed on
each policy, immediately upon issue, a loss payable or cut-through clause and a
notice of assignment complying with the provisions of Clause 13.4;  (b)they will hold such policies,
and the benefit of such insurances, to the order of the Security Trustee in
accordance with the said loss payable clause;  (c)they will advise the Security
Trustee immediately of any material change to the terms of the obligatory
insurances;  (d)they will notify the Security
Trustee, not less than 14 days before the expiry of the obligatory insurances,
in the event of their not having received notice of renewal instructions from
the relevant Owner or its agents and, in the event of their receiving
instructions to renew, they will promptly notify the Security Trustee of the
terms of the instructions; and  (e)they will not set off against
any sum recoverable in respect of a claim relating to a Ship under such
obligatory insurances any premiums or other amounts due to them or any other
person whether in respect of that Ship or otherwise, they waive any lien on the
policies, or any sums received under them, which they might have in respect of
such premiums or other amounts, and they will not cancel such obligatory
insurances by reason of non-payment of such premiums or other amounts, and will
arrange for a separate policy to be issued in respect of that Ship forthwith
upon being so requested by the Security Trustee.  13.7Copies of
certificates of entry.The Borrower
shall ensure that any protection and indemnity and/or war risks associations in
which each Ship is entered provides the Security Trustee with:  (a)a certified copy of the
certificate of entry for the Ship;  (b)a letter or letters of
undertaking in such form as may be required by the Security Trustee; and  (c)a certified copy of each
certificate of financial responsibility for pollution by oil or other
Environmentally Sensitive Material issued by the relevant certifying authority
in relation to the Ship.  13.8Deposit
of original policies.The Borrower
shall ensure that all policies relating to obligatory insurances are deposited
with the approved brokers through which the insurances are effected or renewed.  27


13.9Payment
of premiums.The Borrower shall ensure that
all premiums or other sums of money from time to time due in respect of the
obligatory insurances are paid in full and produce all relevant receipts when
so required by the Security Trustee.  13.10Guarantees.The Borrower shall arrange for the execution
and delivery of all guarantees required by a protection and indemnity or war
risks association are promptly issued and remain in full force and effect.  13.11Compliance
with terms of insurances.The Borrower
shall neither do nor omit to do (nor permit to be done or not to be done) any
act or thing which would or might render any obligatory insurance in relation
to any Ship invalid, void, voidable or unenforceable or render any sum payable
under an obligatory insurance repayable in whole or in part; and, in
particular:  (a)the Borrower shall procure
that each Owner shall (in the case of the Ship owned by it) take all necessary
action and comply with all requirements which may from time to time be applicable
to the obligatory insurances, and (without limiting the obligation contained in
Clause 13.6(c)) ensure that the obligatory insurances are not made subject to
any exclusions or qualifications to which the Security Trustee has not given
its prior approval;  (b)the Borrower shall procure
that no Owner shall (in the case of the Ship owned by it) make any changes
relating to the classification or Classification Society or manager or operator
of the Ship approved by the underwriters of the obligatory insurances;  (c)the Borrower shall procure
that each Owner shall (in the case of the Ship owned by it) make (and promptly
supply copies to the Agent of) all quarterly or other voyage declarations which
may be required by the protection and indemnity risks association in which the
Ship is entered to maintain cover for trading to the United States of America
and Exclusive Economic Zone (as defined in the United States Oil Pollution Act
1990 or any other applicable legislation); and  (d)the Borrower shall procure
that no Owner shall (in the case of the Ship owned by it) employ the Ship, nor
allow it to be employed, otherwise than in conformity with the terms and
conditions of the obligatory insurances, without first obtaining the consent of
the insurers and complying with any requirements (as to extra premium or
otherwise) which the insurers specify.  13.12Alteration
to terms of insurances.The Borrower
will procure that no Owner shall either make or agree to any alteration to the
terms of any obligatory insurance nor waive any right relating to any
obligatory insurance.  13.13Settlement
of claims.The Borrower shall procure that
no Owner shall (in the case of the Ship owned by it) settle, compromise or
abandon any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents, evidence
and information to enable the Security Trustee to collect or recover any moneys
which at any time become payable in respect of the obligatory insurances.  13.14Provision
of copies of communications.The Borrower
shall procure that each Owner (in respect of the Ship owned by it) shall
provide the Security Trustee, at the time of each such communication, copies of
all written communications between that Owner and:  (a)the approved brokers;  (b)the approved protection and
indemnity and/or war risks associations; and  (c)the approved insurance
companies and/or underwriters, which relate directly or indirectly to:  28


(i)the relevant Owners
obligations relating to the obligatory insurances including, without
limitation, all requisite declarations and payments of additional premiums or
calls; and  (ii)any credit arrangements made
between the relevant Owner and any of the persons referred to in paragraphs (a) or
(b) relating wholly or partly to the effecting or maintenance of the
obligatory insurances.  13.15Provision
of information.In addition,
the Borrower shall promptly provide the Security Trustee (or any persons which
it may designate) with any information which the Security Trustee (or any such
designated person) requests for the purpose of:  (a)obtaining or preparing any
report from an independent marine insurance broker as to the adequacy of the
obligatory insurances effected or proposed to be effected; and/or  (b)effecting, maintaining or
renewing any such insurances as are referred to in Clause 13.16 below or
dealing with or considering any matters relating to any such insurances,  and the Borrower shall, within 5 Business Days
following demand, indemnify the Security Trustee in respect of all reasonable,
out-of-pocket fees and other expenses incurred by or for the account of the
Security Trustee in connection with any such report as is referred to in
paragraph (a).  13.16Mortgagees
interest, additional perils and political risk insurances.The Security Trustee shall be entitled from
time to time to effect, maintain and renew a mortgagees interest additional
perils insurance and a mortgagees interest marine insurance in such amounts
(but at least 110 per cent. of the Loan), on such terms, through such insurers
and generally in such manner as the Security Trustee may from time to time
consider appropriate and the Borrower shall upon demand fully indemnify the
Security Trustee in respect of all premiums and other reasonable, out-of-pocket
expenses which are incurred in connection with or with a view to effecting,
maintaining or renewing any such insurance or dealing with, or considering, any
matter arising out of any such insurance.  14SHIP
COVENANTS  14.1General.The Borrower also undertakes with each
Creditor Party to comply with the following provisions of this Clause 14 at all
times during the Security Period and, as applicable, to procure that the Owners
shall comply with the provisions of this Clause 14 in each case except as the
Agent, with the authorisation of the Majority Lenders, may otherwise permit.  14.2Ships
name and registration.The Borrower
shall procure that each Owner shall keep the Ship owned by it registered in its
name as a Panamanian Ship; shall not do, omit to do or allow to be done
anything as a result of which such registration might be cancelled or
imperilled; and shall not change the name (other than as contemplated in the
Recitals) or port of registry of the Ship owned by it.  14.3Repair
and classification.The Borrower
shall procure that each Owner shall keep the Ship owned by it in a good and
safe condition and state of repair:  (a)consistent with first-class
ship ownership and management practice;  (b)so as to maintain the highest
classification for vessels of the same age and type as that Ship with the
Classification Society, free of overdue recommendations and conditions; and  29


(c)so as to comply with all laws
and regulations applicable to vessels registered at ports in Panama or to
vessels trading to any jurisdiction to which that Ship may trade from time to
time, including but not limited to the ISM Code and the ISPS Code.  14.4Modification.The Borrower shall procure that no Owner
shall (in the case of the Ship owned by it) make any modification or repairs
to, or replacement of, the Ship or equipment installed on the Ship which would
or might materially alter the structure, type or performance characteristics of
the Ship or materially reduce its value.  14.5Removal
of parts.The Borrower shall procure that no Owner
shall (in the case of the Ship owned by it) remove any material part of the
Ship, or any material item of equipment installed on, the Ship unless the part
or item so removed is forthwith replaced by a suitable part or item which is in
the same condition as or better condition than the part or item removed, is
free from any Security Interest or any right in favour of any person other than
the Security Trustee and becomes on installation on the Ship the property of
the relevant Owner and subject to the security constituted by the relevant
Mortgage Provided that an Owner may install
equipment owned by a third party if the equipment can be removed without any
risk of damage to the Ship concerned.  14.6Surveys.The Borrower shall procure that each Owner
shall (in the case of the Ship owned by it) submit the Ship regularly to all
periodical or other surveys which may be required for classification purposes
and, if so required by the Security Trustee provide the Security Trustee, with
copies of all survey reports.  14.7Prevention
of and release from arrest.The Borrower
shall procure that each Owner shall (in the case of the Ship owned by it),
promptly discharge before the same becomes overdue (unless being contested in
good faith by appropriate proceedings promptly instituted and diligently
pursued where appropriate reserves have been established):  (a)all liabilities which give or
may give rise to maritime or possessory liens on or claims enforceable against
the Ship, the Earnings or the Insurances in relation to that Ship;  (b)all taxes, dues and other
amounts charged in respect of the Ship, the Earnings or the Insurances in
relation to that Ship; and  (c)all other outgoings whatsoever
in respect of the Ship, the Earnings or the Insurances in relation to that
Ship,  and, forthwith upon receiving notice of the arrest of
the Ship, or of its detention in exercise or purported exercise of any lien or
claim, the Borrower shall procure its release by providing bail or otherwise as
the circumstances may require.  14.8Compliance
with laws etc.The Borrower shall procure that
each Owner shall:  (a)comply, or procure compliance
with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or
regulations relating to the Ship owned by it, its ownership, operation and
management or to the business of the Owner;  (b)not employ the Ship owned by
it nor allow its employment in any manner contrary to any law or regulation in
any relevant jurisdiction including but not limited to the ISM Code and the
ISPS Code; and  (c)in the event of hostilities in
any part of the world (whether war is declared or not), not cause or permit the
Ship owned by it to enter or trade to any zone which is declared a war zone by
any government or by the war risks insurers of the Ship owned by it unless the
prior written consent of the Security Trustee has been given and the Borrower
has (at its expense) effected or procure that the relevant Owner has effected
any special, additional or modified insurance cover which the Security Trustee
may require.  30


14.9Provision
of information.The Borrower
shall procure that each Owner shall (in the case of the Ship owned by it),
promptly provide the Security Trustee with any information which it requests
regarding:  (a)the Ship, its employment,
position and engagements;  (b)the Earnings and payments and
amounts due to the Ships master and crew;  (c)any expenses incurred, or
likely to be incurred, in connection with the operation, maintenance or repair
of the Ship and any payments made in respect of the Ship;  (d)any towages and salvages; and  (e)the Owners, the Approved
Managers or the Ships compliance with the ISM Code and the ISPS Code,  and, upon the Security Trustees request,
provide copies of any current charter relating to the Ship, of any current
charter guarantee and copies of the Ships Safety Management Certificate and/or
the relevant Owners or the Approved Managers 
Document of Compliance.  14.10Notification
of certain events.The Borrower
(or the relevant Owner as the case may be) shall immediately notify the
Security Trustee by fax, confirmed forthwith, by letter of:  (a)any casualty which is or is
likely to be or to become a Major Casualty;  (b)any occurrence as a result of
which a Ship has become or is, by the passing of time or otherwise, likely to
become a Total Loss;  (c)any requirement or
recommendation made by any insurer or the Classification Society or by any
competent authority which is not complied with in accordance with its terms;  (d)any arrest or detention of a
Ship, any exercise or purported exercise of any lien on any Ship or its
Earnings or any requisition of a Ship for hire;  (e)any intended dry docking of a
Ship;  (f)any Environmental Claim made
against the Borrower or an Owner in connection with a Ship or any Environmental
Incident;  (g)any claim for breach of the
ISM Code or the ISPS Code being made against an Owner, the Approved Manager or
otherwise in connection with a Ship; or  (h)any other matter, event or
incident, actual or threatened, the effect of which will or could lead to the
ISM Code or the ISPS Code not being complied with,  and the Borrower (or the relevant Owner as
the case may be) shall keep the Security Trustee advised in writing on a
regular basis and in such detail as the Security Trustee shall require of the
Owners, the Approved Managers or any other persons response to any of those
events or matters.  14.11Restrictions
on chartering, appointment of managers etc.The
Borrower shall procure that no Owner shall (in the case of the Ship owned by
it):  (a)let the Ship on demise charter
for any period;  31


(b)enter into any time or
consecutive voyage charter in respect of the Ship for a term which exceeds, or
which by virtue of any optional extensions may exceed, 13 months;  (c)enter into any charter in
relation to the Ship under which more than 2 months hire (or the equivalent)
is payable in advance;  (d)charter the Ship otherwise
than on bona fide arms length terms at the time when the Ship is fixed;  (e)appoint a manager of the Ship
other than the Approved Manager or agree to any alteration to the terms of the
Approved Managers appointment;  (f)de-activate or lay up the
Ship; or  (g)put the Ship into the
possession of any person for the purpose of work being done upon her in an
amount exceeding or likely to exceed $500,000 (except in the case of the
anticipated dry docking in respect of BAFFIN where such amount shall be
increased to $1,000,000 for the purposes of such dry docking only) (or the
equivalent in any other currency) unless that person has first given to the
Security Trustee and in terms satisfactory to it a written undertaking not to
exercise any lien on the Ship or the Earnings for the cost of such work or for
any other reason.  14.12Notice of
Mortgage.The Borrower shall procure that each Owner
shall (in the case of the Ship owned by it), keep the relevant Mortgage
registered against the relevant Ship as a valid first preferred mortgage, carry
on board the Ship a certified copy of the relevant Mortgage and place and
maintain in a conspicuous place in the navigation room and the Masters cabin
of the Ship a framed printed notice stating that the Ship is mortgaged by the
relevant Owner to the Security Trustee.  14.13Sharing
of Earnings.The Borrower will procure that
no Owner shall (in the case of the Ship owned by it) enter into any agreement
or arrangement for the sharing of any Earnings.  14.14ISPS Code.The Borrower shall procure that each Owner
shall (in the case of the Ship owned by it) comply with the ISPS Code and in
particular, without limitation, shall:  (a)procure that the Ship and the
company responsible for the Ships compliance with the ISPS Code comply with
the ISPS Code;  (b)maintain for the Ship an ISSC;
and  (c)notify the Agent immediately
in writing of any actual or threatened withdrawal, suspension, cancellation or
modification of the ISSC.  15SECURITY
COVER  15.1Minimum
required security cover.Clause 15.2
applies if the Agent notifies the Borrower that:  (a)the aggregate market values
(determined as provided in Clause 15.3) of the Ships; plus  (b)the amount standing to the
credit of the Collateral Account; plus  (c)the net realisable value of
any additional security previously provided under this Clause 15,  is below 200 per cent. of the Loan.  32


15.2Provision
of additional security; prepayment.If
the Agent serves a notice on the Borrower under Clause 15.1, the Borrower
shall, within 1 month after the date on which the Agents notice is served,
either:  (a)provide, or ensure that a
third party provides, additional security which, in the opinion of the Majority
Lenders, has a net realisable value at least equal to the shortfall and is
documented in such terms as the Agent may, with the authorisation of the
Majority Lenders, approve or require; or  (b)prepay such part (at least) of
the Loan as will eliminate the shortfall.  15.3Valuation
of Ships.The market value of a Ship at any date is
that shown by the average of 2 valuations prepared:  (a)as at a date not more than 28
days previously;  (b)by an Approved Broker;  (c)without physical inspection of
that Ship;  (d)on the basis of a sale for
prompt delivery for cash on normal arms length commercial terms as between a
willing seller and a willing buyer, free of any existing charter or other
contract of employment; and  (e)after deducting the estimated
amount of the usual and reasonable expenses which would be incurred in
connection with the sale.  The initial aggregate value of the Ships on the date
of this Agreement (as determined in accordance with Clause 15.3) is
$100,000,000.  15.4Value of
additional vessel security.The net
realisable value of any additional security which is provided under Clause 15.2
and which consists of a Security Interest over a vessel shall be that shown by
a valuation complying with the requirements of Clause 15.3.  15.5Valuations
binding.Any valuations under Clause 15.1 shall be
binding and conclusive as regards the Borrower or the Owners.  15.6Provision
of information.The Borrower
shall promptly provide the Agent and any shipbroker or expert acting under
Clause 15.1 with any information which the Agent or the shipbroker or expert
may request for the purposes of the valuation; and, if the Borrower fails to
provide the information by the date specified in the request, the valuation may
be made on any basis and assumptions which the shipbroker or the Majority
Lenders (or the expert appointed by them) consider prudent.  15.7Payment
of valuation expenses.Without
prejudice to the generality of the Borrowers obligations under Clauses 20.2,
20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the
fees and expenses of any shipbroker or expert instructed by the Agent under
this Clause and all reasonable, out-of-pocket legal and other expenses incurred
by the Agent or the Security Trustee in connection with any matter arising out
of this Clause.  15.8Application
of prepayment.Clause 8 shall apply in
relation to any prepayment pursuant to Clause 15.2(b).  33


16PAYMENTS
AND CALCULATIONS  16.1Currency
and method of payments.All payments
to be made by the Lenders or by the Borrower under a Finance Document shall be
made to the Agent or to the Security Trustee, in the case of an amount payable
to it:  (a)by not later than 11.00 a.m.
(New York City time) on the due date;  (b)in same day Dollar funds
settled through the New York Clearing House Interbank Payments System (or in
such other Dollar funds and/or settled in such other manner as the Agent shall
specify as being customary at the time for the settlement of international
transactions of the type contemplated by this Agreement);  (c)in the case of an amount payable
by a Lender to the Agent or by the Borrower to the Agent or any Lender, to the
account of the Agent at Bank of New York, 1 Wall Street, New York (Account No
890 0047003 SWIFT Code IRVTUS3N quoting the reference Britannia Bulk plc), or
to such other account with such other bank as the Agent may from time to time
notify to the Borrower and the other Creditor Parties; and  (d)in the case of an amount
payable to the Security Trustee, to such account as it may from time to time
notify to the Borrower and the other Creditor Parties.  16.2Payment
on non-Business Day.If any payment
by the Borrower under a Finance Document would otherwise fall due on a day
which is not a Business Day:  (a)the due date shall be extended
to the next succeeding Business Day; or  (b)if the next succeeding
Business Day falls in the next calendar month, the due date shall be brought
forward to the immediately preceding Business Day,  and interest shall be payable during any
extension under paragraph (a) at the rate payable on the original due
date.  16.3Basis for
calculation of periodic payments.All
interest and any other payments under any Finance Document which are of an
annual or periodic nature shall accrue from day to day and shall be calculated
on the basis of the actual number of days elapsed and a 360 day year.  16.4Distribution
of payments to Creditor Parties.Subject to Clauses 16.5, 16.6 and 16.7:  (a)any amount received by the
Agent under a Finance Document for distribution or remittance to a Lender or
the Security Trustee shall be made available by the Agent to that Lender or, as
the case may be, the Security Trustee by payment, with funds having the same
value as the funds received, to such account as the Lender or the Security
Trustee may have notified to the Agent not less than 5 Business Days
previously; and  (b)amounts to be applied in
satisfying amounts of a particular category which are due to the Lenders
generally shall be distributed by the Agent to each Lender pro rata to the
amount in that category which is due to it.  16.5Permitted
deductions by Agent.Notwithstanding any other provision of this Agreement or any other
Finance Document, the Agent may, before making an amount available to a Lender,
deduct and withhold from that amount any sum which is then due and payable to
the Agent from that Lender under any Finance Document or any sum which the
Agent is then entitled under any Finance Document to require that Lender to pay
on demand.  34


16.6Agent only
obliged to pay when monies received.Notwithstanding any other provision of this Agreement or any other
Finance Document, the Agent shall not be obliged to make available to the
Borrower or any Lender any sum which the Agent is expecting to receive for
remittance or distribution to the Borrower or that Lender until the Agent has
satisfied itself that it has received that sum.  16.7Refund to
Agent of monies not received.If and to the
extent that the Agent makes available a sum to the Borrower or a Lender,
without first having received that sum, the Borrower or (as the case may be)
the Lender concerned shall, on demand:  (a)refund the sum in full to the
Agent; and  (b)pay to the Agent the amount
(as certified by the Agent) which will indemnify the Agent against any funding
or other loss, liability or expense incurred by the Agent as a result of making
the sum available before receiving it.  16.8Agent may
assume receipt.Clause 16.7
shall not affect any claim which the Agent has under the law of restitution,
and applies irrespective of whether the Agent had any form of notice that it
had not received the sum which it made available.  16.9Creditor
Party accounts.Each Creditor
Party shall maintain accounts showing the amounts owing to it by the Borrower
and each Security Party under the Finance Documents and all payments in respect
of those amounts made by the Borrower and any Security Party.  16.10Agents
memorandum account.The Agent
shall maintain a memorandum account showing the amounts advanced by the Lenders
and all other sums owing to the Agent, the Security Trustee and each Lender
from the Borrower and each Security Party under the Finance Documents and all
payments in respect of those amounts made by the Borrower and any Security
Party.  16.11Accounts
prima facie evidence.If any
accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by
the Borrower or a Security Party to a Creditor Party, those accounts shall be
prima facie evidence that that amount is owing to that Creditor Party.  17APPLICATION
OF RECEIPTS  17.1Normal
order of application.Except as any
Finance Document may otherwise provide, any sums which are received or
recovered by any Creditor Party under or by virtue of any Finance Document
shall be applied:  (a)FIRST: in or towards payment
pro rata of any unpaid fees, costs and expenses of the Agent and the Security
Trustee under the Finance Documents;  (b)SECONDLY: in or towards
payment pro rata of any accrued interest or commission due but unpaid under this
Agreement;  (c)THIRDLY: in or towards payment
pro rata of any principal due but unpaid under this Agreement;  (d)FOURTHLY: in or towards
payment pro rata of any other amounts due but unpaid under any Finance
Document;  (e)FIFTHLY: in retention of an amount
equal to any amount not then due and payable under any Finance Document but
which the Agent acting in good faith, by notice to the Borrower, the Security
Parties and the other Creditor Parties, states in its opinion will become due
and payable in the future and, upon those amounts becoming due and  35


payable, in or towards satisfaction of them in
accordance with the provisions of Clause 17.1(a), 17.1(b), 17.1(c) and
17.1(d); and  (f)SIXTHLY: any surplus shall be
paid to the Borrower or to any other person appearing to be entitled to it.  18APPLICATION
OF EARNINGS  18.1Payment
of Earnings.The Borrower undertakes with
each Creditor Party to ensure that, throughout the Security Period (and subject
only to the provisions of the General Assignments), all the Earnings of each
Ship are paid to the Earnings Account.  18.2Payments from
Earnings Account.At all times other than during
the continuation of an Event of Default, moneys in the Earnings Account shall
be applied:  (a)first, to make the payment
required by Clause 18.3;  (b)secondly, to pay all amounts
due to the Creditor Parties under this Agreement (including but not limited to
accrued interest due pursuant to Clause 5.1); and  (c)thirdly, any remaining balance
to be made available to the Owners and/or the Borrower for use in their sole
discretion.  Following the occurrence of an Event of
Default and while it is continuing neither the Borrower nor the Owners shall be
permitted to use any moneys standing to the credit of the Earnings Account.  18.3Collateral
Account.The Borrower undertakes with each Creditor
Party to ensure that on the date falling one month after the Drawdown Date and
on the same date of each month thereafter during the Security Period there is
transferred to the Collateral Account out of the Earnings received in the
Earnings Account during the preceding month a minimum amount of $600,000.  Any balance standing to the credit of the
Collateral Account shall be applied against the Loan on the Repayment Date but
may, upon the Borrowers request, be applied (in whole or in part) to make a
voluntary prepayment of the Loan at any time prior to the Repayment Date.  Neither the Borrower nor any Owner shall be
permitted to use or access the moneys standing to the credit of the Collateral
Account other than to make a prepayment of the Loan.  18.4Location
of accounts.The Borrower shall procure that
the Owners shall promptly:  (a)comply with any requirement of
the Agent as to the location or re-location of the Earnings Account and the
Collateral Account (or either of them); and  (b)execute any documents which
the Agent specifies to create or maintain in favour of the Security Trustee a
Security Interest over (and/or rights of set-off, consolidation or other rights
in relation to) the Earnings Account and the Collateral Account.  18.5Debits
for expenses etc.The Agent
shall be entitled (but not obliged) from time to time to debit the Earnings
Account without prior notice in order to discharge any amount due and payable
under Clause 20 or 21 to a Creditor Party or payment of which any Creditor
Party has become entitled to demand under Clause 20 or 21.  18.6Borrowers
obligations unaffected.The provisions
of this Clause 18 do not affect:  (a)the liability of the Borrower
to make payments of principal and interest on the due dates; or  36


(b)any other liability or
obligation of the Borrower or any Security Party under any Finance Document.  19EVENTS OF
DEFAULT  19.1Events of
Default.An Event of Default occurs if:  (a)the Borrower or any Security
Party fails to pay when due any sum payable under a Finance Document or under
any document relating to a Finance Document except where such failure to pay is
caused by an administrative or technical error in which case the Borrower or
any Security Party fails to pay any such sum within 3 Business Days of its due
date; or  (b)any breach occurs of Clause
9.2, 11.2, 11.3, 12.2, 12.3, 13 or 15.2; or  (c)any breach by the Borrower or
any Security Party occurs of any provision of a Finance Document that does not
contain a specific grace period (other than a breach covered by paragraphs (a) or
(b)) which, in the opinion of the Majority Lenders, is capable of remedy, and
such default continues unremedied 10 days after written notice from the Agent
requesting action to remedy the same; or  (d)(subject to any applicable
grace period specified in the Finance Document) any breach by the Borrower or
any Security Party occurs of any provision of a Finance Document (other than a
breach falling within paragraphs (a), (b) or (c)); or  (e)any representation or warranty
made or repeated by, or by an officer of, the Borrower or a Security Party in a
Finance Document or in a Drawdown Notice or any other notice or document
relating to a Finance Document is untrue or misleading in any material respect
when it is made or repeated; or  (f)any of the following occurs in
relation to any Financial Indebtedness of a Relevant Person (but limited to
Financial Indebtedness in respect of $1,000,000 or more in the case of the
Borrower or any Relevant Person which is not a Security Party):  (i)any Financial Indebtedness of
a Relevant Person is not paid when due; or  (ii)any Financial Indebtedness of
a Relevant Person becomes due and payable or capable of being declared due and
payable prior to its stated maturity date as a consequence of any event of
default; or  (iii)a lease, hire purchase
agreement or charter creating any Financial Indebtedness of a Relevant Person
is terminated by the lessor or owner or becomes capable of being terminated as
a consequence of any termination event; or  (iv)any overdraft, loan, note
issuance, acceptance credit, letter of credit, guarantee, foreign exchange or
other facility, or any swap or other derivative contract or transaction,
relating to any Financial Indebtedness of a Relevant Person ceases to be
available or becomes capable of being terminated as a result of any event of
default, or cash cover is required, or becomes capable of being required, in
respect of such a facility as a result of any event of default; or  (v)any Security Interest securing
any Financial Indebtedness of a Relevant Person becomes enforceable; or  (g)any of the following occurs in
relation to a Relevant Person:  (i)a Relevant Person becomes, in
the opinion of the Majority Lenders, unable to pay its debts as they fall due;
or  37


(ii)any assets of a Relevant
Person are subject to any form of execution, attachment, arrest, sequestration
or distress in respect of a sum of, or sums aggregating, $250,000 or more or
the equivalent in another currency unless stayed; or  (iii)any administrative or other
receiver is appointed over any asset of a Relevant Person; or  (iv)an administrator
is appointed (whether by the court or otherwise) in respect of a Relevant
Person; or  (v)any formal
declaration of bankruptcy or any formal statement to the effect that a Relevant
Person is insolvent or likely to become insolvent is made by a Relevant Person
or by the directors of a Relevant Person or, in any proceedings, by a lawyer
acting for a Relevant Person; or  (vi)a provisional
liquidator is appointed in respect of a Relevant Person, a winding up order is
made in relation to a Relevant Person or a winding up resolution is passed by a
Relevant Person; or  (vii)a resolution is
passed, an administration notice is given or filed, an application or petition
to a court is made or presented or any other step is taken by(aa) a Relevant Person, (bb) the
members or directors of a Relevant Person, (cc) a holder of Security Interests
which together relate to all or substantially all of the assets of a Relevant
Person, or (dd) a government minister or public or regulatory authority of a
Pertinent Jurisdiction for or with a view to the winding up of that or another
Relevant Person or the appointment of a provisional liquidator or administrator
in respect of that or another Relevant Person, or that or another Relevant
Person ceasing or suspending business operations or payments to creditors, save
that this paragraph does not apply to a fully solvent winding up of a Relevant
Person other than the Borrower or an Owner (prior to the disposition of the
Ship owned by such Owner and the making of the mandatory prepayment required by
Clause 8.6) which is, or is to be, effected for the purposes of an amalgamation
or reconstruction previously approved by the Majority Lenders and effected not
later than 3 months after the commencement of the winding up; or  (viii)an administration
notice is given or filed, an application or petition to a court is made or
presented or any other step is taken by a creditor of a Relevant Person (other
than a holder of Security Interests which together relate to all or
substantially all of the assets of a Relevant Person) for the winding up of a
Relevant Person or the appointment of a provisional liquidator or administrator
in respect of a Relevant Person in any Pertinent Jurisdiction, unless the
proposed winding up, appointment of a provisional liquidator or administration
is being contested in good faith, on substantial grounds and not with a view to
some other insolvency law procedure being implemented instead and either (aa)
the application or petition is dismissed or withdrawn within 30 days of being
made or presented, or (bb) within 30 days of the administration notice being
given or filed, or the other relevant steps being taken, other action is taken
which will ensure that there will be no administration and (in both cases (aa)
or (bb)) the Relevant Person will continue to carry on business in the ordinary
way and without being the subject of any actual, interim or pending insolvency
law procedure; or  (ix)a Relevant Person
or its directors take any steps (whether by making or presenting an application
or petition to a court, or submitting or presenting a document setting out a
proposal or proposed terms, or otherwise) with a view to obtaining, in relation
to that or another Relevant Person, any form of moratorium, suspension or
deferral of payments, reorganisation or arrangement with respect to such
Relevant Persons debt generally or all or a substantial proportion (by number
or value) of creditors or of any class of them or any such moratorium, suspension
or deferral of payments, reorganisation or arrangement is effected by court
order, by the filing of documents with a court, by means of a contract or in
any other way at all; or  38


(x)any meeting of
the members or directors, or of any committee of the board or senior
management, of a Relevant Person is held or summoned for the purpose of
considering a resolution or proposal to authorise or take any action of a type
described in paragraphs (iv) to (ix) or a step preparatory to such
action, or (with or without such a meeting) the members, directors or such a
committee resolve or agree that such an action or step should be taken or
should be taken if certain conditions materialise or fail to materialise; or  (xi)in a Pertinent
Jurisdiction other than England, any event occurs, any proceedings are opened
or commenced or any step is taken which, in the opinion of the Majority Lenders
is similar to any of the foregoing; or  (h)the Borrower ceases or
suspends carrying on its business or a part of its business which, in the
opinion of the Majority Lenders, is material in the context of this Agreement;
or  (i)it becomes unlawful in any
Pertinent Jurisdiction or impossible:  (i)for the Borrower or any
Security Party to discharge any liability under a Finance Document or to comply
with any other obligation which the Majority Lenders consider material under a
Finance Document;  (ii)for the Agent, the Security
Trustee or the Lenders to exercise or enforce any right under, or to enforce
any Security Interest created by, a Finance Document; or  (j)any consent necessary to
enable an Owner to own, operate or charter the Ship which it owns or to enable
the Borrower or any Security Party to comply with any provision which the
Majority Lenders consider material of a Finance Document or an MOA is not
granted, expires without being renewed, is revoked or becomes liable to
revocation or any condition of such a consent is not fulfilled; or  (k)it appears to the Majority
Lenders that, without their prior consent, a Change of Control has occurred
after the date of this Agreement; or  (l)any provision which the
Majority Lenders consider material of a Finance Document proves to have been or
becomes invalid or unenforceable, or a Security Interest created by a Finance
Document proves to have been or becomes invalid or unenforceable or such a
Security Interest proves to have ranked after, or loses its priority to, another
Security Interest or any other third party claim or interest (other than
Permitted Security Interests); or  (m)the security constituted by a
Finance Document is in any way imperilled or in jeopardy; or  (n)any other event occurs or any
other circumstances arise or develop including, without limitation:  (i)a change in the financial
position of any Relevant Person; or  (ii)any accident or other event
not covered by insurance involving any Ship or another vessel owned, chartered
or operated by a Relevant Person;  in the light of which the Majority Lenders
consider that there is a significant risk that the Borrower or any Owner is, or
will later become, unable to discharge its liabilities under the Finance
Documents as they fall due.  39


19.2Actions
following an Event of Default.On, or at any
time after, the occurrence of an Event of Default which is continuing:  (a)the Agent may, and if so
instructed by the Majority Lenders, the Agent shall:  (i)serve on the Borrower a notice
stating that the Commitments and all other obligations of each Lender to the
Borrower under this Agreement are cancelled; and/or  (ii)serve on the Borrower a notice
stating that the Loan, all accrued interest and all other amounts accrued or
owing under this Agreement are immediately due and payable or are due and
payable on demand; and/or  (iii)take any other action which,
as a result of the Event of Default or any notice served under paragraph (i) or
(ii), the Agent and/or the Lenders are entitled to take under any Finance
Document or any applicable law; and/or  (b)the Security Trustee may, and
if so instructed by the Agent, acting with the authorisation of the Majority
Lenders, the Security Trustee shall take any action which, as a result of the
Event of Default or any notice served under paragraph (a) (i) or
(ii), the Security Trustee, the Agent and/or the Lenders are entitled to take
under any Finance Document or any applicable law.  19.3Termination
of Commitments.On the service
of a notice under Clause 19.2(a)(i), the Commitments and all other obligations
of each Lender to the Borrower under this Agreement shall be cancelled.  19.4Acceleration
of Loan.On the service of a notice under Clause
19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or
owing from the Borrower or any Security Party under this Agreement and every
other Finance Document shall become immediately due and payable or, as the case
may be, payable on demand.  19.5Multiple
notices; action without notice.The Agent may
serve notices under Clauses 19.2(a)(i) and (ii) simultaneously or on
different dates and it and/or the Security Trustee may take any action referred
to in Clause 19.2 if no such notice is served or simultaneously with or at any
time after the service of both or either of such notices.  19.6Notification
of Creditor Parties and Security Parties.The
Agent shall send to each Lender, the Security Trustee and each Security Party a
copy or the text of any notice which the Agent serves on the Borrower under
Clause 19.2; but the notice shall become effective when it is served on the
Borrower, and no failure or delay by the Agent to send a copy or the text of
the notice to any other person shall invalidate the notice or provide the
Borrower or any Security Party with any form of claim or defence.  19.7Lenders
rights unimpaired.Nothing in
this Clause shall be taken to impair or restrict the exercise of any right
given to individual Lenders under a Finance Document or the general law; and,
in particular, this Clause is without prejudice to Clause 3.1.  19.8Exclusion
of Creditor Party liability.No Creditor
Party, and no receiver or manager appointed by the Security Trustee, shall have
any liability to the Borrower or a Security Party:  (a)for any loss caused by an
exercise of rights under, or enforcement of a Security Interest created by, a
Finance Document or by any failure or delay to exercise such a right or to
enforce such a Security Interest; or  40


(b)as mortgagee in possession or
otherwise, for any income or principal amount which might have been produced by
or realised from any asset comprised in such a Security Interest or for any
reduction (however caused) in the value of such an asset,  except that this does not
exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been directly and mainly caused by the violation of law,
dishonesty or the wilful misconduct of such Creditor Partys own officers and
employees or ( as the case may be) such receivers or managers own partners or
employees.  19.9Relevant
Persons.In this Clause 19, a Relevant
Person means the Borrower, a Security Party, and any company which
is a subsidiary of the Borrower or a Security Party; but excluding any company
the value of whose gross assets is $1,000,000 or less.  19.10Interpretation.In Clause 19.1(f), references to an event of
default or a termination event include any event, howsoever described, which is
similar to an event of default in a facility agreement or a termination event
in a finance lease; and in Clause 19.1(g), petition
includes an application.  20FEES AND
EXPENSES  20.1Arrangement
fee.The Borrower shall pay to the Agent on the
Drawdown Date, an arrangement fee of 1.50 per cent. of the amount of the Loan
for distribution among the Lenders in the proportions agreed by the Agent and
the Lenders.  The arrangement fee shall
be deducted from the proceeds of the Loan.  20.2Costs of
negotiation, preparation etc.The Borrower
shall pay to the Agent on its demand the amount of all reasonable,
out-of-pocket expenses incurred by the Agent or the Security Trustee in
connection with the negotiation, preparation, execution or registration of any
Finance Document or any related document or with any transaction contemplated
by a Finance Document or a related document.  20.3Costs of
variations, amendments etc.The Borrower
shall pay to the Agent, on the Agents demand, for the account of the Creditor
Party concerned, the amount of all reasonable, out-of-pocket expenses incurred
by a Creditor Party in connection with:  (a)any amendment or supplement to
a Finance Document, or any proposal for such an amendment to be made;  (b)any consent or waiver by the
Lenders, the Majority Lenders or the Creditor Party concerned under or in
connection with a Finance Document, or any request for such a consent or
waiver; or  (c)the valuation of any security
provided or offered under Clause 15 or any other matter relating to such
security.  20.4Costs of
enforcement.The Borrower shall pay to the
Agent, on the Agents demand, for the account of the Creditor Party concerned,
the amount of all expenses incurred by a Creditor Party in connection with any
step taken by the Lender concerned with a view to the protection, exercise or
enforcement of any right or Security Interest created by a Finance Document or
for any similar purpose.  There shall be
recoverable the full amount of all legal expenses, whether or not such as would
be allowed under rules of court or any taxation or other procedure carried
out under such rules.  20.5Documentary
taxes.The Borrower shall promptly pay any tax
payable on or by reference to any Finance Document, and shall, on the Agents
demand, fully indemnify each Creditor Party against any claims, expenses,
liabilities and losses resulting from any failure or delay by the Borrower to
pay such a tax.  41


20.6Financial
Services Authority fees.The Borrower
shall pay to the Agent, on the Agents demand, for the account of the Lender
concerned the amounts which the Agent from time to time notifies the Borrower
that a Lender has notified the Agent to be necessary to compensate it for the
cost attributable to its Contribution resulting from the imposition from time
to time under or pursuant to the Bank of England Act 1998 and/or by the Bank of
England and/or by the Financial Services Authority (or other United Kingdom
governmental authorities or agencies) of a requirement to pay fees to the
Financial Services Authority calculated by reference to liabilities used to
fund its Contribution.  20.7Certification
of amounts.A notice which is signed by 2
officers of a Creditor Party, which states that a specified amount, or
aggregate amount, is due to that Creditor Party under this Clause 20 and which
indicates (without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall be prima facie evidence
that the amount, or aggregate amount, is due.  21INDEMNITIES  21.1Indemnities
regarding borrowing and repayment of Loan.The
Borrower shall fully indemnify the Agent and each Lender on the Agents demand
and the Security Trustee on its demand in respect of all claims, expenses,
liabilities and losses (but excluding loss of Margin) which are made or brought
against or incurred by that Creditor Party, or which that Creditor Party
reasonably and with due diligence estimates that it will incur, as a result of
or in connection with:  (a)the Loan not being borrowed on
the date specified in the Drawdown Notice for any reason other than a default
by the Lender claiming the indemnity;  (b)the receipt or recovery of all
or any part of the Loan or an overdue sum otherwise than on the last day of an
Interest Period or other relevant period;  (c)any failure (for whatever
reason) by the Borrower to make payment of any amount due under a Finance
Document on the due date or, if so payable, on demand (after giving credit for
any default interest paid by the Borrower on the amount concerned under Clause
7); and  (d)the occurrence of an Event of
Default or a Potential Event of Default and/or the acceleration of repayment of
the Loan under Clause 19,  and in respect of any tax
(other than tax on its overall net income) for which a Creditor Party is liable
in connection with any amount paid or payable to that Creditor Party (whether
for its own account or otherwise) under any Finance Document.  21.2Breakage
costs.Without limiting its generality, Clause 21.1
covers any claim, expense, liability or loss, excluding loss of Margin,
incurred by a Lender:  (a)in liquidating or employing
deposits from third parties acquired or arranged to fund or maintain all or any
part of its Contribution and/or any overdue amount (or an aggregate amount
which includes its Contribution or any overdue amount); and  (b)in terminating, or otherwise
in connection with, any interest and/or currency swap or any other transaction
entered into (whether with another legal entity or with another office or
department of the Lender concerned) to hedge any exposure arising under this
Agreement or that part which the Lender concerned determines is fairly
attributable to this Agreement of the amount of the liabilities, expenses or
losses (including losses of prospective profits) incurred by it in terminating,
or otherwise in connection with, a number of transactions of which this
Agreement is one.  42


21.3Miscellaneous
indemnities.The Borrower shall fully
indemnify each Creditor Party severally on their respective demands in respect
of all claims, expenses, liabilities and losses which may be made or brought
against or incurred by a Creditor Party, in any country, as a result of or in
connection with:  (a)any action taken, or omitted
or neglected to be taken, under or in connection with any Finance Document by
the Agent, the Security Trustee or any other Creditor Party or by any receiver
appointed under a Finance Document; and  (b)any other Pertinent Matter,  other than claims, expenses,
liabilities and losses which are shown to have been directly and mainly caused
by the violation of law, dishonesty or wilful misconduct of the officers or
employees of the Creditor Party concerned.  Without prejudice to its generality, this
Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or
are asserted, under or in connection with any law relating to safety at sea,
the ISM Code, the ISPS Code or any Environmental Law.  21.4Currency
indemnity.If any sum due from the
Borrower or any Security Party to a Creditor Party under a Finance Document or
under any order or judgment relating to a Finance Document has to be converted
from the currency in which the Finance Document provided for the sum to be paid
(the Contractual Currency) into another
currency (the Payment Currency) for the purpose
of:  (a)making or lodging any claim or
proof against the Borrower or any Security Party, whether in its liquidation,
any arrangement involving it or otherwise; or  (b)obtaining an order or judgment
from any court or other tribunal; or  (c)enforcing any such order or
judgment,  the Borrower shall indemnify
the Creditor Party concerned against the loss arising when the amount of the
payment actually received by that Creditor Party is converted at the available
rate of exchange into the Contractual Currency.  In this Clause 21.4, the available rate of exchange means the rate at which the
Creditor Party concerned is able at the opening of business (London time) on
the Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.  This Clause 21.4 creates a
separate liability of the Borrower which is distinct from its other liabilities
under the Finance Documents and which shall not be merged in any judgment or
order relating to those other liabilities.  21.5Certification
of amounts.A notice which is signed by 2
officers of a Creditor Party, which states that a specified amount, or
aggregate amount, is due to that Creditor Party under this Clause 21 and which
indicates (without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is due.  21.6Sums
deemed due to a Lender.For the
purposes of this Clause 21, a sum payable by the Borrower to the Agent or the
Security Trustee for distribution to a Lender shall be treated as a sum due to
that Lender.  43


22NO SET-OFF
OR TAX DEDUCTION  22.1No
deductions.All amounts due from the
Borrower under a Finance Document shall be paid:  (a)without any form of set-off,
cross-claim or condition; and  (b)free and clear of any tax
deduction except a tax deduction which the Borrower is required by law to make.  22.2Grossing-up
for taxes.If the Borrower is required by
law to make a tax deduction from any payment:  (a)the Borrower shall notify the
Agent as soon as it becomes aware of the requirement;  (b)the Borrower shall pay the tax
deducted to the appropriate taxation authority promptly, and in any event
before any fine or penalty arises; and  (c)the amount due in respect of
the payment shall be increased by the amount necessary to ensure that each
Creditor Party receives and retains (free from any liability relating to the
tax deduction) a net amount which, after the tax deduction, is equal to the
full amount which it would otherwise have received.  22.3Evidence
of payment of taxes.Within 1 month
after making any tax deduction, the Borrower shall deliver to the Agent
documentary evidence satisfactory to the Agent that the tax had been paid to
the appropriate taxation authority.  22.4Exclusion
of tax on overall net income.In this Clause
22 tax deduction means any deduction or
withholding for or on account of any present or future tax except tax on a
Creditor Partys overall net income.  22.5Tax
credits.A Creditor Party which receives for its own
account a repayment or credit in respect of tax on account of which the
Borrower has made an increased payment under Clause 22.2 shall pay to the
Borrower a sum equal to the proportion of the repayment or credit which that
Creditor Party allocates to the amount due from the Borrower in respect of
which the Borrower made the increased payment:  (a)the Creditor Party shall not
be obliged to allocate to this transaction any part of a tax repayment or
credit which is referable to a class or number of transactions;  (b)nothing in this Clause 22.4
shall oblige a Creditor Party to arrange its tax affairs in any particular
manner, to claim any type of relief, credit, allowance or deduction instead of,
or in priority to, another or to make any such claim within any particular
time;  (c)nothing in this Clause 22.4
shall oblige a Creditor Party to make a payment which would leave it in a worse
position than it would have been in if the Borrower had not been required to
make a tax deduction from a payment; and  (d)any allocation or
determination made by a Creditor Party under or in connection with this Clause
22.4 shall be conclusive and binding on the Borrower and the other Creditor
Parties.  23ILLEGALITY,
ETC  23.1Illegality.This Clause 23 applies if a Lender (the Notifying Lender) notifies the Agent that it has become, or
will with effect from a specified date, become:  44


(a)unlawful or prohibited as a
result of the introduction of a new law, an amendment to an existing law or a
change in the manner in which an existing law is or will be interpreted or
applied; or  (b)contrary to, or inconsistent
with, any regulation,  for the Notifying Lender to
maintain or give effect to any of its obligations under this Agreement in the
manner contemplated by this Agreement.  23.2Notification
of illegality.The Agent shall promptly notify
the Borrower, the Security Parties, the Security Trustee and the other Lenders
of the notice under Clause 23.1 which the Agent receives from the Notifying
Lender.  23.3Prepayment;
termination of Commitment.On the Agent
notifying the Borrower under Clause 23.2, the Notifying Lenders Commitment
shall terminate; and thereupon or, if later, on the date specified in the
Notifying Lenders notice under Clause 23.1 as the date on which the notified
event would become effective the Borrower shall prepay the Notifying Lenders
Contribution in accordance with Clause 8.  23.4Mitigation.  If circumstances arise which would result in
a notification under Clause 23.1 then, without in any way limiting the
rights of the Notifying Lender under Clause 23.3, the Notifying Lender
shall use reasonable endeavours to transfer its obligations, liabilities and
rights under this Agreement and the Finance Documents to another office or
financial institution not affected by the circumstances but the Notifying
Lender shall not be under any obligation to take any such action if, in its
opinion, to do would or might:  (a)have an adverse effect on its
business, operations or financial condition; or  (b)involve it in any activity
which is unlawful or prohibited or any activity that is contrary to, or
inconsistent with, any regulation; or  (c)involve it in any expense
(unless indemnified to its satisfaction) or tax disadvantage.  24INCREASED
COSTS  24.1Increased
costs.This Clause 24 applies if a Lender (the Notifying Lender) notifies the Agent that the Notifying
Lender considers that as a result of:  (a)the introduction or alteration
after the date of this Agreement of a law or an alteration after the date of
this Agreement in the manner in which a law is interpreted or applied
(disregarding any effect which relates to the application to payments under
this Agreement of a tax on the Lenders overall net income); or  (b)complying with any regulation
(including any which relates to capital adequacy or liquidity controls or which
affects the manner in which the Notifying Lender allocates capital resources to
its obligations under this Agreement) which is introduced, or altered, or the
interpretation or application of which is altered, after the date of this
Agreement,  the Notifying Lender (or a parent company
of it) has incurred or will incur an increased cost.  24.2Meaning
of increased costs.In this Clause
24, increased costs means, in relation to
a Notifying Lender:  (a)an additional or increased
cost incurred as a result of, or in connection with, the Notifying Lender
having entered into, or being a party to, this Agreement or having taken an
assignment of rights under this Agreement, of funding or maintaining its
Commitment or Contribution or performing its obligations under this Agreement,
or of having outstanding all or any part of its Contribution or other unpaid
sums;  45


(b)a reduction in the amount of
any payment to the Notifying Lender under this Agreement or in the effective
return which such a payment represents to the Notifying Lender or on its
capital;  (c)an additional or increased
cost of funding all or maintaining all or any of the advances comprised in a
class of advances formed by or including the Notifying Lenders Contribution or
(as the case may require) the proportion of that cost attributable to the
Contribution; or  (d)a liability to make a payment,
or a return foregone, which is calculated by reference to any amounts received
or receivable by the Notifying Lender under this Agreement,  but not an item attributable to a change in
the rate of tax on the overall net income of the Notifying Lender (or a parent
company of it) or an item covered by the indemnity for tax in Clause 21.1 or by
Clause 22 or an item arising directly out of the implementation or application
of or compliance with the International Convergence of Capital Measurement and
Capital Standards, a Revised Framework published by the Basel Committee on
Banking Supervision in June 2004, in the form existing on the date of this
Agreement (Basel II) or any
other law or regulation which implements Basel II (whether such implementation,
application or compliance is by a government, regulator, Creditor Party or any
of its affiliates).  For the purposes of this
Clause 24.2 the Notifying Lender may in good faith allocate or spread costs
and/or losses among its assets and liabilities (or any class of its assets and
liabilities) on such basis as it considers appropriate.  24.3Notification
to Borrower of claim for increased costs.The
Agent shall promptly notify the Borrower and the Security Parties of the notice
which the Agent received from the Notifying Lender under Clause 24.1.  24.4Payment
of increased costs.The Borrower
shall pay to the Agent, on the Agents demand, for the account of the Notifying
Lender the amounts which the Agent from time to time notifies the Borrower that
the Notifying Lender has specified to be necessary to compensate the Notifying
Lender for the increased cost.  24.5Notice of
prepayment.If the Borrower is not willing
to continue to compensate the Notifying Lender for the increased cost under
Clause 24.4, the Borrower may give the Agent not less than 14 days notice of
its intention to prepay the Notifying Lenders Contribution at the end of an
Interest Period.  24.6Prepayment;
termination of Commitment.A notice under
Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying
Lender of the Borrowers notice of intended prepayment; and:  (a)on the date on which the Agent
serves that notice, the Commitment of the Notifying Lender shall be cancelled;
and  (b)on the date specified in its
notice of intended prepayment, the Borrower shall prepay (without premium or
penalty) the Notifying Lenders Contribution, together with accrued interest
thereon at the applicable rate plus the Margin.  24.7Application
of prepayment.Clause 8 shall apply in
relation to the prepayment.  46


25SET-OFF  25.1Application
of credit balances.Each Creditor
Party may at any time whilst an Event of Default is continuing without prior
notice:  (a)apply any balance (whether or
not then due) which at any time stands to the credit of any account in the name
of the Borrower at any office in any country of that Creditor Party in or
towards satisfaction of any sum then due from the Borrower to that Creditor
Party under any of the Finance Documents; and  (b)for that purpose:  (i)break, or alter the maturity
of, all or any part of a deposit of the Borrower;  (ii)convert or translate all or
any part of a deposit or other credit balance into Dollars; and  (iii)enter into any other
transaction or make any entry with regard to the credit balance which the
Creditor Party concerned considers appropriate.  25.2Existing
rights unaffected.No Creditor
Party shall be obliged to exercise any of its rights under Clause 25.1; and
those rights shall be without prejudice and in addition to any right of
set-off, combination of accounts, charge, lien or other right or remedy to
which a Creditor Party is entitled (whether under the general law or any document).  25.3Sums
deemed due to a Lender.For the
purposes of this Clause 25, a sum payable by the Borrower to the Agent or the
Security Trustee for distribution to, or for the account of, a Lender shall be
treated as a sum due to that Lender; and each Lenders proportion of a sum so
payable for distribution to, or for the account of, the Lenders shall be
treated as a sum due to such Lender.  25.4No
Security Interest.This Clause 25
gives the Creditor Parties a contractual right of set-off only, and does not
create any equitable charge or other Security Interest over any credit balance
of the Borrower.  26TRANSFERS
AND CHANGES IN LENDING OFFICES  26.1Transfer
by Borrower.The Borrower may not, without
the consent of the Agent, given on the instructions of all the Lenders transfer
any of its rights, liabilities or obligations under any Finance Document.  26.2Transfer
by a Lender.Subject to Clause 26.4, a
Lender (the Transferor Lender) may at any
time subject to obtaining the consent of the Borrower (which consent will not
be unreasonably withheld, conditioned or delayed and will not be required
during the existence of an Event of Default), cause:  (a)its rights in respect of all
or part of its Contribution; or  (b)its obligations in respect of
all or part of its Commitment; or  (c)a combination of (a) and
(b),  to be (in the case of its
rights) transferred to, or (in the case of its obligations) assumed by, another
bank or financial institution or a trust, fund or other entity which is
regularly engaged in or established for the purpose of making, purchasing or
investing in loans, securities or other financial assets (a Transferee Lender) by delivering to the Agent a completed
certificate in the form set out in Schedule 4 with any modifications approved
orrequired by the Agent (a
Transfer Certificate) executed by the
Transferor Lender and the Transferee Lender.  47


However any rights and obligations of the
Transferor Lender in its capacity as Agent or Security Trustee will have to be
dealt with separately in accordance with the Agency and Trust Agreement.  26.3Transfer
Certificate, delivery and notification.As
soon as reasonably practicable after a Transfer Certificate is delivered to the
Agent, it shall (unless it has reason to believe that the Transfer Certificate
may be defective):  (a)sign the Transfer Certificate
on behalf of itself, the Borrower, the Security Parties, the Security Trustee
and each of the other Lenders;  (b)on behalf of the Transferee
Lender, send to the Borrower and each Security Party letters or faxes notifying
them of the Transfer Certificate and attaching a copy of it; and  (c)send to the Transferee Lender
copies of the letters or faxes sent under paragraph (b) above,  but the Agent shall only be obliged to
execute a Transfer Certificate delivered to it by the Transferor Lender and the
Transferee Lender once it is satisfied it has complied with all necessary know
your customer or other similar checks under all applicable laws and
regulations in relation to the transfer to that Transferee Lender.  26.4Effective
Date of Transfer Certificate.A Transfer
Certificate becomes effective on the date, if any, specified in the Transfer
Certificate as its effective date,  Provided that it is signed by the Agent under Clause 26.3 on
or before that date.  26.5No
transfer without Transfer Certificate.No
assignment or transfer of any right or obligation of a Lender under any Finance
Document is binding on, or effective in relation to, the Borrower, any Security
Party, the Agent or the Security Trustee unless it is effected, evidenced or
perfected by a Transfer Certificate.  26.6Lender
re-organisation; waiver of Transfer Certificate.However, if a Lender enters into any merger, de-merger or other
reorganisation as a result of which all its rights or obligations vest in a
successor, the Agent may, if it sees fit, by notice to the successor and the Borrower
and the Security Trustee waive the need for the execution and delivery of a
Transfer Certificate; and, upon service of the Agents notice, the successor
shall become a Lender with the same Commitment and Contribution as were held by
the predecessor Lender.  26.7Effect of
Transfer Certificate.A Transfer
Certificate takes effect in accordance with English law as follows:  (a)to the extent specified in the
Transfer Certificate, all rights and interests (present, future or contingent)
which the Transferor Lender has under or by virtue of the Finance Documents are
assigned to the Transferee Lender absolutely, free of any defects in the
Transferor Lenders title and of any rights or equities which the Borrower or
any Security Party had against the Transferor Lender;  (b)the Transferor Lenders
Commitment is discharged to the extent specified in the Transfer Certificate;  (c)the Transferee Lender becomes
a Lender with the Contribution previously held by the Transferor Lender and a
Commitment of an amount specified in the Transfer Certificate;  48


(d)the Transferee Lender becomes
bound by all the provisions of the Finance Documents which are applicable to
the Lenders generally, including those about pro-rata sharing and the exclusion
of liability on the part of, and the indemnification of, the Agent and the
Security Trustee and, to the extent that the Transferee Lender becomes bound by
those provisions (other than those relating to exclusion of liability), the
Transferor Lender ceases to be bound by them;  (e)any part of the Loan which the
Transferee Lender advances after the Transfer Certificates effective date
ranks in point of priority and security in the same way as it would have ranked
had it been advanced by the transferor, assuming that any defects in the
transferors title and any rights or equities of the Borrower or any Security
Party against the Transferor Lender had not existed;  (f)the Transferee Lender becomes
entitled to all the rights under the Finance Documents which are applicable to
the Lenders generally, including but not limited to those relating to the
Majority Lenders and those under Clause 5.4 and Clause 20, and to the extent
that the Transferee Lender becomes entitled to such rights, the Transferor
Lender ceases to be entitled to them; and  (g)in respect of any breach of a
warranty, undertaking, condition or other provision of a Finance Document or
any misrepresentation made in or in connection with a Finance Document, the Transferee
Lender shall be entitled to recover damages by reference to the loss incurred
by it as a result of the breach or misrepresentation, irrespective of whether
the original Lender would have incurred a loss of that kind or amount.  The rights and equities of the Borrower or
any Security Party referred to above include, but are not limited to, any right
of set off and any other kind of cross-claim.  26.8Maintenance
of register of Lenders.During the
Security Period the Agent shall maintain a register in which it shall record
the name, Commitment, Contribution and administrative details (including the
lending office) from time to time of each Lender holding a Transfer Certificate
and the effective date (in accordance with Clause 26.4) of the Transfer Certificate;
and the Agent shall make the register available for inspection by any Lender,
the Security Trustee and the Borrower during normal banking hours, subject to
receiving at least 3 Business Days prior notice.  26.9Reliance
on register of Lenders.The entries on
that register shall, in the absence of manifest error, be conclusive in
determining the identities of the Lenders and the amounts of their Commitments
and Contributions and the effective dates of Transfer Certificates and may be
relied upon by the Agent and the other parties to the Finance Documents for all
purposes relating to the Finance Documents.  26.10Authorisation
of Agent to sign Transfer Certificates.The
Borrower, the Security Trustee and each Lender irrevocably authorise the Agent
to sign Transfer Certificates on its behalf.  26.11Registration
fee.In respect of any Transfer Certificate, the
Agent shall be entitled to recover a registration fee of $1,000 from the
Transferor Lender or (at the Agents option) the Transferee Lender.  26.12Sub-participation;
subrogation assignment.A Lender may
sub-participate all or any part of its rights and/or obligations under or in
connection with the Finance Documents without the consent of, or any notice to,
the Borrower, any Security Party, the Agent or the Security Trustee; and the
Lenders may assign, in any manner and terms agreed by the Majority Lenders, the
Agent and the Security Trustee, all or any part of those rights to an insurer
or surety who has become subrogated to them.  49


26.13Disclosure
of information.A Lender may
disclose to a potential Transferee Lender or sub-participant any information
which the Lender has received in relation to the Borrower, any Security Party
or their affairs under or in connection with any Finance Document, unless the
information is clearly of a confidential nature.  26.14Change of
lending office.A Lender may
change its lending office by giving notice to the Agent and the change shall
become effective on the later of:  (a)the date on which the Agent
receives the notice; and  (b)the date, if any, specified in
the notice as the date on which the change will come into effect.  26.15Notification.On receiving such a notice, the Agent shall
notify the Borrower and the Security Trustee; and, until the Agent receives
such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.  27VARIATIONS
AND WAIVERS  27.1Variations,
waivers etc. by Majority Lenders.Subject to Clause 27.2, a document shall be effective to vary, waive,
suspend or limit any provision of a Finance Document, or any Creditor Partys
rights or remedies under such a provision or the general law, only if the
document is signed, or specifically agreed to by fax, by the Borrower, by the
Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee
in their own rights, and, if the document relates to a Finance Document to
which a Security Party is party, by that Security Party.  27.2Variations,
waivers etc. requiring agreement of all Lenders.However, as regards the following, Clause 27.1 applies as if the words by
the Agent on behalf of the Majority Lenders were replaced by the words by or
on behalf of every Lender:  (a)a change in the Margin or in
the definition of LIBOR;  (b)a change to the date for, the
amount of, any payment of principal, interest, fees, or other sum payable under
this Agreement;  (c)a change to any Lenders
Commitment;  (d)an extension of Availability
Period;  (e)a change to the definition of Majority Lenders or Finance Documents;  (f)a change to the preamble or to
Clause 2, 3, 4, 5.1, 17, 18 or 30;  (g)a change to this Clause 27;  (h)any release of, or material
variation to, a Security Interest, guarantee, indemnity or subordination
arrangement set out in a Finance Document; and  (i)any other change or matter as
regards which this Agreement or another Finance Document expressly provides
that each Lenders consent is required.  27.3Exclusion
of other or implied variations.Except for a
document which satisfies the requirements of Clauses 27.1 and 27.2, no
document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person
acting on behalf of any of them) shall result in the Creditor Parties or any of
them (or any person acting on behalf of any of them) being taken to have
varied, waived, suspended or limited, or being precluded (permanently or
temporarily) from enforcing, relying on or exercising:  50


(a)a provision of this Agreement
or another Finance Document; or  (b)an Event of Default; or  (c)a breach by the Borrower or a
Security Party of an obligation under a Finance Document or the general law; or  (d)any right or remedy conferred
by any Finance Document or by the general law,  and there shall not be implied into any
Finance Document any term or condition requiring any such provision to be
enforced, or such right or remedy to be exercised, within a certain or
reasonable time.  28NOTICES  28.1General.Unless otherwise specifically provided, any
notice under or in connection with any Finance Document shall be given by
letter or fax and references in the Finance Documents to written notices,
notices in writing and notices signed by particular persons shall be construed
accordingly.  28.2Addresses
for communications.A notice by
letter or fax shall be sent:  (a)
  
  to the
  Borrower:
  
  Britannia
  Bulk plcDexter House2nd FloorRoyal Mint
  CourtLondonEC3N 4QNFax No:+ 44 207 264
  4949Attn: Fariyal Khanbabi(b)
  
  to a Lender:
  
  At the
  address below its name in Schedule 1 or (as thecase may
  require) in the relevant Transfer Certificate.(c)
  
  to the
  Agent:
  
  Lloyds TSB
  Bank plcWholesale
  Loans Agency10 Gresham
  StreetLondonEC2V 7AEFax No:   +44
  207 158 3251Attn:       Head of Wholesale Loans Agency(d)
  
  to the
  Security Trustee:
  
  Lloyds TSB
  Bank plcHead of
  Loans Management10 Gresham
  StreetLondonEC2V 7AEFax No:   +44
  207 158 3271Attn:       Head of Loan Managementor to such other
  address as the relevant party may notify the Agent or, if the relevant party
  is the Agent or the Security Trustee, the Borrower, the Lenders and the
  Security Parties.  51


28.3Effective
date of notices.Subject to
Clauses 28.4 and 28.5:  (a)a notice which is delivered
personally or posted shall be deemed to be served, and shall take effect, at
the time when it is delivered;  (b)a notice which is sent by fax
shall be deemed to be served, and shall take effect, 2 hours after its
transmission is completed.  28.4Service
outside business hours.  However, if
under Clause 28.3 a notice would be deemed to be served:  (a)on a day which is not a
business day in the place of receipt; or  (b)on such a business day, but after
5 p.m. local time,  the notice shall (subject to Clause 28.5) be
deemed to be served, and shall take effect, at 9 a.m. on the next day
which is such a business day.  28.5Illegible
notices.Clauses 28.3 and 28.4 do not apply if the
recipient of a notice notifies the sender within 1 hour after the time at which
the notice would otherwise be deemed to be served that the notice has been
received in a form which is illegible in a material respect.  28.6Valid
notices.A notice under or in connection with a
Finance Document shall not be invalid by reason that its contents or the manner
of serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:  (a)the failure to serve it in
accordance with the requirements of this Agreement or other Finance Document,
as the case may be, has not caused any party to suffer any significant loss or
prejudice; or  (b)in the case of incorrect
and/or incomplete contents, it should have been reasonably clear to the party
on which the notice was served what the correct or missing particulars should
have been.  28.7Electronic
communication.Any communication to be made
between the Agent and a Lender under or in connection with the Finance Documents
may be made by electronic mail or other electronic means, if the Agent and the
relevant Lender:  (a)agree that, unless and until
notified to the contrary, this is to be an accepted form of communication;  (b)notify each other in writing
of their electronic mail address and/or any other information required to
enable the sending and receipt of information by that means; and  (c)notify each other of any
change to their respective addresses or any other such information supplied to
them.  Any electronic communication made between
the Agent and a Lender will be effective only when actually received in
readable form and, in the case of any electronic communication made by a Lender
to the Agent, only if it is addressed in such a manner as the Agent shall specify
for this purpose.  28.8English
language.Any notice under or in connection with a
Finance Document shall be in English.  52


28.9Meaning
of notice.In this Clause 28, notice includes any demand, consent, authorisation,
approval, instruction, waiver or other communication.  29SUPPLEMENTAL  29.1Rights
cumulative, non-exclusive.The rights and
remedies which the Finance Documents give to each Creditor Party are:  (a)cumulative;  (b)may be exercised as often as
appears expedient; and  (c)shall not, unless a Finance
Document explicitly and specifically states so, be taken to exclude or limit
any right or remedy conferred by any law.  29.2Severability
of provisions.If any provision of a Finance
Document is or subsequently becomes void, unenforceable or illegal, that shall
not affect the validity, enforceability or legality of the other provisions of
that Finance Document or of the provisions of any other Finance Document.  29.3Counterparts.A Finance Document may be executed in any
number of counterparts.  29.4Third
Party rights.A person who is not a party to
this Agreement has no right under the Contracts (Rights of Third Parties) Act
1999 to enforce or to enjoy the benefit of any term of this Agreement.  29.5Confidentiality.At all times during the Security Period,
each of the parties hereto shall keep confidential and shall not, without the
prior written consent of the other parties, issue any press release in relation
to the transactions evidenced by this Agreement and the other Finance
Documents, or disclose to any other person, the business, financial or other
information contained in or supplied in connection with this Agreement or any
other Finance Document and the transactions contemplated hereby or thereby or
any other agreement entered into after the date hereof by the Borrower and any
Security Party or in connection with this Agreement or any other Finance
Document, or release copies or drafts of any such document which disclose or
reveal the identity of the parties (or any of them) provided that (a) the
Borrower will not reasonably withhold or delay its consent to any proposed
press releases; (b) the foregoing provisions of this Clause 29.5 shall not
apply to any disclosure of information between one Creditor Party to another;
and (c) the parties hereto shall be entitled, without any such consent, to
disclose the same:  (a)in connection with any
proceedings arising out of or in connection with this Agreement or any of the
other Finance Documents; or  (b)if required to do so by an
order or a court of competent jurisdiction whether in pursuance of any
procedure for discovery of documents or otherwise; or  (c)pursuant to any law or
regulation having the force of law; or  (d)to any fiscal, monetary, tax,
governmental or other competent authority; or  (e)to the auditors, legal,
insurance or other professional advisors, brokers, insurers or underwriters of
any Creditor Party or any Security Party; or  (f)if required to do so in order
to obtain any permits, consents, licences which any Creditor Party or any
Security Party is required to obtain pursuant to the Finance Documents; or  (g)if any of the same is or shall
become publicly known otherwise than as a result of a breach by such party of
this Clause 29.5; or  53


(h)in any manner contemplated by
any of the Finance Documents; or  (i)in the case of a Creditor
Party , to any member of the group of companies of which such Creditor Party is
a member and in the case of a Security Party to any member of the group of
companies of which such Security Party is a member, provided that in each case
the relevant Creditor Party or the relevant Security Party shall procure that
the party to whom such disclosure is made shall comply with the requirements of
this Clause 29.5.  Notwithstanding the foregoing provisions of
this Clause 29.5 or any other provisions of this Agreement or any other Finance
Document to the contrary:  (i)at an appropriate time after
the date of this Agreement, the Agent, the Security Trustee, the Lenders and
the Borrower (each at their own cost) may place a customary announcement in
such newspapers and periodicals as it may choose, stating that it has
participated (in its various capacities) in the transactions contemplated in
this Agreement and the other Finance Documents, in each case subject to the
prior approval of the other parties to this Agreement as to the form and timing
of the announcement; and  (ii)the Agent, the Security
Trustee, the Lenders and the Borrower (each at their own cost) may disclose
generic details of the transaction contemplated by this Agreement and the other
Finance Documents in its annual financial presentations or other roadshow
presentations, internal publications, annual reports or financial or other
brochures.  30LAW AND
JURISDICTION  30.1English
law.This Agreement shall be governed by, and
construed in accordance with, English law.  30.2Exclusive
English jurisdiction.Subject to
Clause 30.3, the courts of England shall have exclusive jurisdiction to settle
any disputes which may arise out of or in connection with this Agreement.  30.3Choice of
forum for the exclusive benefit of Creditor Parties.Clause 30.2 is for the exclusive benefit of
the Creditor Parties, each of which reserves the rights:  (a)to commence proceedings in
relation to any matter which arises out of or in connection with this Agreement
in the courts of any country other than England and which have or claim
jurisdiction to that matter; and  (b)to commence such proceedings
in the courts of any such country or countries concurrently with or in addition
to proceedings in England or without commencing proceedings in England.  The Borrower shall not commence any proceedings
in any country other than England in relation to a matter which arises out of
or in connection with this Agreement.  30.4Acceptance
as process agent.The Borrower
hereby accepts its appointment as agent to receive and accept for and on behalf
of each Owner any process or other document relating to any proceedings in the
English Courts which are connected with any Finance Document.  30.5Creditor
Party rights unaffected.Nothing in
this Clause 30 shall exclude or limit any right which any Creditor Party may
have (whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of process,
the recognition or enforcement of a judgment or any similar or related matter
in any jurisdiction.  54


30.6Meaning
of proceedings.In this Clause
30, proceedings means proceedings of any
kind, including an application for a provisional or protective measure.  THIS
AGREEMENThas been
entered into on the date stated at the beginning of this Agreement.  55


SCHEDULE 1
LENDERS AND COMMITMENTS   Lender
  
  Lending Office
  
  Commitment
  (US
  Dollars)Lloyds
  TSB Bank plc
  
  10
  Gresham Street 
  London 
  EC2V 7AE 
  Fax No:+44 207 158 3271
  Attn: Loan Management
  
  30,000,000   56


SCHEDULE 2
DRAWDOWN NOTICE  To:
  
  Lloyds TSB Bank plc10 Gresham StreetLondonEC2V 7AE  Attention: SHIP FINANCE  [·] February 2008  DRAWDOWN NOTICE  1We refer to the loan agreement
(the Loan Agreement) dated [·] February 2008 and made between us,
as Borrower, the Lenders referred to therein, and you as Agent and as Security
Trustee in connection with a facility of up to US$30,000,000. Terms defined in
the Loan Agreement have their defined meanings when used in this Drawdown
Notice.  2We request to borrow as
follows:  (a)Amount: US$ 30,000,000;  (b)Drawdown Date:  [·] February 2008;  (c)Duration of the Interest
Period shall be 1 month; and  (d)Payment instructions : account
[in our name] and numbered [·] with [·] of [·].  3We represent and warrant that:  (a)the representations and
warranties in Clause 10 of the Loan Agreement would remain true and not
misleading if repeated on the date of this notice with reference to the
circumstances now existing; and  (b)no Event of Default or
Potential Event of Default has occurred or will result from the borrowing of
the Loan.  4This notice cannot be revoked
without the prior consent of the Majority Lenders.  5We authorise you to deduct the
arrangement of US$450,000 fee referred to in Clause 20 from the amount of the
Loan.  [Name of Signatory]  
 Director for and on behalf of BRITANNIA BULK PLC  57


SCHEDULE 3  CONDITION PRECEDENT DOCUMENTS  PART A  The following
are the documents referred to in Clause 9.1(a).  1A duly executed original of
each Finance Document (and of each document required to be delivered by each
Finance Document) other than those referred to in Part B.  2Copies of the certificate of
incorporation and constitutional documents of the Borrower and each Security
Party.  3Copies of resolutions of the
directors of the Borrower and copies of resolutions of the shareholders and
directors each Security Party authorising the execution of each of the Finance
Documents to which the Borrower or that Security Party is a party and, in the
case of the Borrower, authorising named officers to give the Drawdown Notice
and other notices under this Agreement and in the case of the Owners ratifying
the execution of the MOAs.  4The original of any power of
attorney under which any Finance Document is executed on behalf of the Borrower
or a Security Party.  5Copies of all consents which
the Borrower or any Security Party requires to enter into, or make any payment
under, any Finance Document or either MOA.  6The originals of any mandates
or other documents required in connection with the opening or operation of the
Earnings Account and the Collateral Account.  7Copies of the MOAs and of all
documents signed or issued by an Owner or a Seller (or any of them) under or in
connection with the MOAs.  8A copy of the latest unaudited
consolidated accounts of the Borrower and its subsidiaries certified as to their
correctness by the chief financial officer of the Borrower.  9A copy of the most recent
survey report or inspection report obtained in respect of each Ship from an
independent marine surveyor in respect of the physical condition of each Ship.  10If the Agent so requires, in
respect of any of the documents referred to above, a certified English
translation prepared by a translator approved by the Agent.  58


PART B  The following
are the documents referred to in Clause 9.1(b).  1A duly executed original of
the Mortgages and the General Assignments (and of each document to be delivered
by each of them).  2Such documentary evidence as
the Agent and its legal advisers may require in relation to the due
authorisation and execution by each Seller of the MOA to which it is a party
and of all documents to be executed by each Seller under the MOA to which it is
a party.  3Documentary evidence that:  (a)each Ship has been
unconditionally delivered by the relevant Seller to, and accepted by, the
relevant Owner under the relevant MOA, and the full purchase price payable
under the relevant MOA (in addition to the part to be financed by the Loan) has
been duly paid;  (b)each Ship is definitively and
permanently registered in the name of the relevant Owner under Panamanian flag;  (c)each Ship is in the absolute
and unencumbered ownership of the relevant Owner save as contemplated by the
Finance Documents;  (d)each Ship maintains the
highest class of vessels of a similar age and type as that Ship with the
Classification Society, free of all overdue recommendations and conditions of
such Classification Society;  (e)each Mortgage has been duly
registered against the relevant Ship as a valid first preferred Panamanian ship
mortgage in accordance with the laws of the Republic of Panama; and  (f)each Ship is insured in
accordance with the provisions of this Agreement and all requirements therein
in respect of insurances have been complied with.  4Documents establishing that
each Ship will, as from the Drawdown Date, be managed by the Approved Manager
on terms acceptable to the Lenders, together with:  (a)a letter of undertaking
executed by the Approved Manager in favour of the Agent in the terms required
by the Agent agreeing certain matters in relation to the management of each
Ship and subordinating the rights of the Approved Manager against each Ship the
relevant Owner to the rights of the Creditor Parties under the Finance
Documents; and  (b)copies of the Approved Managers
Document of Compliance and of the Ships Safety Management Certificate
(together with any other details of the applicable safety management system
which the Agent requires) and ISSC.  5Documentary evidence that each
Ship has been deleted from the German flag and the Antigua and Barbadian
bareboat registry free from all registered encumbrances or, in the alternative,
evidence that each Ship will be so deleted within such period as the Agent
shall require and that, in any event, there are no encumbrances registered
against either Ship on the German flag or the Antigua and Barbadian bareboat
registry.  6Favourable legal opinions from
lawyers appointed by the Agent on such matters concerning the laws of Panama
and such other relevant jurisdictions as the Agent may require.  59


7A favourable opinion from an
independent insurance consultant acceptable to the Agent on such matters
relating to the insurances for each Ship as the Agent may require.  8If the Agent so requires, in
respect of any of the documents referred to above, a certified English
translation prepared by a translator approved by the Agent.  Every copy document delivered under this
Schedule shall be certified as a true and up to date copy by a director or the
secretary (or equivalent officer) of the Borrower.  60


SCHEDULE 4  TRANSFER CERTIFICATE  The Transferor and the Transferee accept
exclusive responsibility for ensuring that this Certificate and the transaction
to which it relates comply with all legal and regulatory requirements
applicable to them respectively.  To:Lloyds TSB Bank plc for itself and for and on
behalf of the Borrower, each Security Party, the Security Trustee and each
Lender, as defined in the Loan Agreement referred to below.  [·]  1This Certificate relates to a
Loan Agreement (the Agreement)
dated [·] February 2008 and made
between (1) Britannia Bulk plc (the Borrower), (2) the
banks and financial institutions named therein, (3) Lloyds TSB Bank plc as
Agent and (4) Lloyds TSB Bank plc as Security Trustee for a loan facility
of up to US$30,000,000.  2In this Certificate, terms
defined in the Agreement shall, unless the contrary intention appears, have the
same meanings when used in this Certificate and:  Relevant
Parties means the Agent, the Borrower, each Security Party, the
Security Trustee and each Lender;  Transferor means [full name] of [lending office]; and  Transferee means [full name] of [lending office].  3The effective date of this
Certificate is [·],  Provided that
this Certificate shall not come into effect unless it is signed by the Agent on
or before that date.  4[The Transferor assigns to the
Transferee absolutely all rights and interests (present, future or contingent)
which the Transferor has as Lender under or by virtue of the Agreement and
every other Finance Document in relation to [·] per cent. of its Contribution, which
percentage represents $[·].]  5[By virtue of this Transfer
Certificate and Clause 26 of the Agreement, the Transferor is discharged
[entirely from its Commitment which amounts to $[·] [from [·] per cent. of its Commitment, which
percentage represents $[·]] and the Transferee acquires
a Commitment of $[·].]  6The Transferee undertakes with
the Transferor and each of the Relevant Parties that the Transferee will
observe and perform all the obligations under the Finance Documents which
Clause 26 of the Agreement provides will become binding on it upon this
Certificate taking effect.  7The Agent, at the request of
the Transferee (which request is hereby made) accepts, for the Agent itself and
for and on behalf of every other Relevant Party, this Certificate as a Transfer
Certificate taking effect in accordance with Clause 26 of the Agreement.  8The Transferor:  (a)warrants to the Transferee and
each Relevant Party that:  61


(i)
  
  the
  Transferor has full capacity to enter into this transaction and has taken all
  corporate action and obtained all consents which are required in connection
  with this transaction; and(ii)
  
  this
  Certificate is valid and binding as regards the Transferor;  (b)warrants to the Transferee
that the Transferor is absolutely entitled, free of encumbrances, to all the
rights and interests covered by the assignment in paragraph 4; and  (c)undertakes with the Transferee
that the Transferor will, at its own expense, execute any documents which the
Transferee reasonably requests for perfecting in any relevant jurisdiction the
Transferees title under this Certificate or for a similar purpose.  9The Transferee:  (a)confirms that it has received
a copy of the Agreement and each of the other Finance Documents;  (b)agrees that it will have no
rights of recourse on any ground against either the Transferor, the Agent, the
Security Trustee or any Lender in the event that:  (i)
  
  any of the
  Finance Documents prove to be invalid or ineffective;(ii)
  
  the Borrower
  or any Security Party fails to observe or perform its obligations, or to
  discharge its liabilities, under any of the Finance Documents; and(iii)
  
  it proves
  impossible to realise any asset covered by a Security Interest created by a
  Finance Document, or the proceeds of such assets are insufficient to
  discharge the liabilities of the Borrower or any Security Party under any of
  the Finance Documents;  (c)agrees that it will have no
rights of recourse on any ground against the Agent, the Security Trustee or any
Lender in the event that this Certificate proves to be invalid or ineffective;  (d)warrants to the Transferor and
each Relevant Party that:  (i)
  
  it has full
  capacity to enter into this transaction and has taken all corporate action
  and obtained all consents which it needs to take or obtain in connection with
  this transaction; and(ii)
  
  this
  Certificate is valid and binding as regards the Transferee; and  (e)confirms the accuracy of the
administrative details set out below regarding the Transferee.  10The Transferor and the
Transferee each undertake with the Agent and the Security Trustee severally, on
demand, fully to indemnify the Agent and/or the Security Trustee in respect of
any claim, proceeding, liability or expense (including all legal expenses)
which they or either of them may incur in connection with this Certificate or
any matter arising out of it, except such as are shown to have been mainly and
directly caused by the gross and culpable negligence or dishonesty of the Agents
or the Security Trustees own officers or employees.  11The Transferee shall repay to
the Transferor on demand so much of any sum paid by the Transferor under
paragraph 9 as exceeds one-half of the amount demanded by the Agent or the
Security Trustee  in respect of a claim,
proceeding, liability or expense which was  62


not reasonably foreseeable at
the date of this Certificate; but nothing in this paragraph shall affect the
liability of each of the Transferor and the Transferee to the Agent or the
Security Trustee for the full amount demanded by it.  [Name of Transferor][Name
of Transferee]  By:By:  Date:Date:    Agent  Signed for
itself and for and on behalf of itself as Agent and
for every other Relevant Party  [Name of
Agent]  By:  Date:  63


Administrative Details of Transferee  Name of Transferee:  Lending Office:  Contact Person
(Loan Administration Department):  Telephone:  Fax:  Contact Person
(Credit Administration Department):  Telephone:  Fax:  Account for payments:  Note:
  
  This Transfer
  Certificate alone may not be sufficient to transfer a proportionate share of
  the Transferors interest in the security constituted by the Finance
  Documents in the Transferors or Transferees jurisdiction. It is the
  responsibility of each Lender to ascertain whether any other documents are
  required for this purpose.  64


SCHEDULE 5  MANDATORY COST FORMULA   1The Mandatory Cost is an
addition to the interest rate to compensate Lenders for the cost of compliance
with (a) the requirements of the Financial Services Authority (or any
other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.  2On the first day of each
Interest Period (or as soon as possible thereafter) the Agent shall calculate,
as a percentage rate, a rate (theAdditional Cost Rate)
for each Lender, in accordance with the paragraphs set out below.  The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders Additional Cost Rates (weighted in
proportion to the percentage participation of each Lender in the relevant
Advance) and will be expressed as a percentage rate per annum.  3The Additional Cost Rate for
any Lender lending from a lending office in Participating Member State will be
the percentage notified by that Lender to the Agent.  This percentage will be certified by that
Lender in its notice to the Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lenders participation in all Advances
made from that lending office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from that
lending office.  4The Additional Cost Rate for
any Lender lending from a lending office in the United Kingdom will be
calculated by the Agent as follows:  per cent. per annum  Where:  Eis designed to
compensate Lenders for amounts payable under the Fees Rules and is
calculated by the Agent as being the average of the most recent rates of charge
supplied by the Lenders to the Agent pursuant to paragraph 6 below and
expressed in pounds per £1,000,000.  5For the purposes of this
Schedule:  (a)Eligible Liabilities and Special
Deposits have the meanings given to them from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank
of England;  (b)Fees Rules  means the rules on
periodic fees contained in the FSA Supervision Manual or such other law or
regulation as may be in force from time to time in respect of the payment of
fees for the acceptance of deposits;  (c)Fee Tariffs  means the
fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant
to the Fees Rules but taking into account any applicable discount rate);  (d)Participating Member State 
means any member state of the European Union that adopts or has adopted
the euro as its lawful currency in accordance with legislation of the European
Union relating to European Monetary Union; and  65


(e)Tariff Base  has the
meaning given to it in, and will be calculated in accordance with, the Fees
Rules.  6If requested by the Agent,
each Lender shall, as soon as practicable after publication by the Financial
Services Authority, supply to the Agent, the rate of charge payable by that
Lender to the Financial Services Authority pursuant to the Fees Rules in
respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by that Lender as being the average of the Fee
Tariffs applicable to that Lender for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of that Lender.  7Each Lender shall supply any
information required by the Agent for the purpose of calculating its Additional
Cost Rate.  In particular, but without
limitation, each Lender shall supply the following information in writing on or
prior to the date on which it becomes a Lender:  (a)the jurisdiction of its
lending office; and  (b)any other information that the
Agent may reasonably require for such purpose.  Each Lender shall promptly notify the Agent
in writing of any change to the information provided by it pursuant to this
paragraph.  8The rates of charge of each
Lender for the purpose of E above shall be determined by the Agent based upon
the information supplied to it pursuant to paragraph 6 above and on the
assumption that, unless a Lender notifies the Agent to the contrary, each
Lenders obligations in relation to cash ratio deposits and special Deposits
are the same as those of a typical bank from its jurisdiction of incorporation
with a lending office in the same jurisdiction as its lending office.  9The Agent shall have no
liability to any person if such determination results in an Additional Cost
Rate which over or under compensates any Lender and shall be entitled to assume
that the information provided by any Lender pursuant to paragraphs 3, 6 and 7
above is true and correct in all respects.  10The Agent shall distribute the additional
amounts received as a result of the Mandatory Cost to the Lenders on the basis
of the Additional Cost Rate for each Lender based on the information provided
by each Lender pursuant to paragraphs 3, 6 and 7 above.  12Any determination by the Agent
pursuant to this Schedule in relation to a formula, the Mandatory Cost, an
Additional Cost Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding on all parties.  The Agent may from time to time, after
consultation with the Borrower and the Lenders, determine and notify to all
parties any amendments which are required to be made to this Schedule in order
to comply with  any change in law,
regulation or any requirements from time to time imposed by the Financial
Services Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and
binding on all parties.  66


SCHEDULE 6
LIST OF APPROVED BROKERS  ·Fearnleys  ·Clarksons  ·Gailbraiths Limited  67


EXECUTION PAGE  THE BORROWERSIGNEDby
  /s/ Arvid Tage
  
  ))for and on behalf of
  
  )BRITANNIA
  BULK PLC
  
  )in the presence of:
  
  )THE LENDERSSIGNEDby
  /s/ David Sumner
  
  ))for and on behalf of
  
  )LLOYDS TSB
  BANK PLC
  
  )in the presence of:
  
  )THE AGENTSIGNEDby
  /s/ David Sumner
  
  ))for and on behalf of
  
  )LLOYDS TSB
  BANK PLC
  
  )in the presence of:
  
  )THE SECURITY
  TRUSTEESIGNEDby
  /s/ David Sumner
  
  ))for and on behalf of
  
  )LLOYDS TSB
  BANK PLC
  
  )in the presence of:
  
  )    68