**Exhibit 4.15****FACILITY AGREEMENT****Dated:                 November 2007****BETWEEN:**(1) the various companies listed at Schedule 2 Part I (together the “**A Borrowers**”) and thevarious companies listed at Schedule 2 Part II (together the “**B Borrowers**” and together withthe A Borrowers and any Additional Borrowers, the “**Borrowers**”); (2) the banks listed in Schedule 1, each acting through its office at the address indicatedagainst its name in Schedule 1 (together the “**Lenders**” and each a “**Lender**”); (3) **NORDEA BANK FINLAND PLC, New York Branch**, acting as agent (in that capacity the “**Agent**”); (4) **NORDEA BANK NORGE ASA, Grand Cayman Branch, CITIGROUP GLOBAL MARKETS LIMITED, ING BANK N.V.,London Branch, HSH NORDBANK AG, DANSKE BANK A/S**and **BNP PARIBAS,**acting as mandated leadarrangers (in that capacity each an “**MLA**” and together the **“MLAs**”); (5) **NORDEA BANK NORGE ASA**, **Grand Cayman Branch, CITIGROUP GLOBAL MARKETS LIMITED**and **ING BANKN.V., London Branch**acting as bookrunners (in that capacity each a “**Bookrunner**” and togetherthe “**Bookrunners**”); (6) **NORDEA BANK FINLAND PLC, New York Branch**, acting as security trustee (in that capacity the“**Security Trustee**”); and (7) **HSH NORDBANK AG**acting as swap provider (in that capacity the “**Swap Provider**”)**WHEREAS:**Each of the Lenders has agreed to advance to the A Borrowers (on a joint and several basis inrespect of Tranche A) and the B Borrowers (on a joint and several basis in respect of Tranche B)its Commitment (aggregating, with all the other Commitments, a revolving credit facility of up toeight hundred and forty five million Dollars ($845,000,000) as increased from time to time pursuantto the provisions of Clause 2.1.2), Tranche A to be made available to the A Borrowers and Tranche Bto be made available to the B Borrowers for (i) refinancing certain existing indebtedness of theGuarantor B Group, (ii) financing the purchase of vessels and (iii) the general
 

 
corporate purposes of the Borrowers (including but not limited to the making of intercompany loansto other members of either Group).**IT IS AGREED**as follows:**1** **Definitions and Interpretation** 1.1 In this Agreement:  ** **** ****“A Borrowers”**means those companies listed in Schedule 2 Part I and, with effectfrom a Collateral Transfer Date, any relevant Collateral Transfer Borrower(s).    **“Administration”**has the meaning given to it in paragraph 1.1.3 of the ISM Code.    “**Additional A Borrower**” means an Additional Borrower that owns a Tranche A Vessel.    “**Additional B Borrower**” means an Additional Borrower that owns a Tranche B Vessel.    “**Additional Borrower**” means any member of a Group that purchases an AdditionalVessel.    “**Additional Vessels**” means any delivered vessels of a type, value and age acceptableto the Majority Lenders to be purchased by a member of the relevant Group (whichwill become an Additional A Borrower or an Additional B Borrower, as the case maybe) in respect of which an Upsize Amount is requested by the Borrowers, each ofwhich shall be designated a Tranche A Vessel or a Tranche B Vessel with effect fromthe relevant Upsize Trigger Date.    “**Affiliate**” means, in relation to any entity, a Subsidiary of that entity, a HoldingCompany of that entity or any other Subsidiary of that Holding Company.    “**Approved Brokers**” means H. Clarkson & Co. Ltd, Simpson Spence & Young ShipbrokersLtd, Fearnley AS, R.S. Platou AS and P.F. Bassoe AS.
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   “**Assignments**” means the deeds of assignment of Insurances, Earnings and RequisitionCompensation in respect of each of the Vessels referred to in Clause 10.1.2 (each an“**Assignment**”).    “**Authorisation**” means an authorisation, consent, approval, resolution, licence,exemption, filing, notarisation or registration.  ** **** **“**B Borrowers”**means the companies listed in Schedule 2 Part II other than, witheffect from a Collateral Transfer Date, any relevant Collateral TransferBorrower(s).    “**Break Costs**” means all sums payable by the Borrowers from time to time under Clause8.3.    “**Business Day**” means a day on which banks are open for business of a naturecontemplated by this Agreement (and not authorised by law to close) in New York,London and any other financial centre which the Agent may reasonably considerappropriate for the operation of the provisions of this Agreement.    “**Collateral Transfer**” means a transfer of that part of the Tranche B Indebtednessrelating to a specified B Borrower into Tranche A Indebtedness pursuant to Clause2.1.1.    “**Collateral Transfer Amount**” means, in respect of any Tranche B Vessels proposed tobe redenominated as Tranche A Vessels, the Tranche B Indebtedness at the relevantCollateral Transfer Date multiplied by the percentage shown in Schedule 2 againstsuch Tranche B Vessel under the heading “Relevant Share”.    “**Collateral Transfer Borrower**” means a B Borrower that has become an A Borrowerpursuant to Clause 2.1.1.    “**Collateral Transfer Date**” means in respect of each Collateral Transfer Borrower thedate on which the Agent confirms that all of the conditions set out in Part III ofSchedule 3 have been satisfied.    “**Collateral Transfer Notice**” means a notice substantially in the form of Schedule 9.
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   “**Collateral Vessels**” means the Tranche A Vessels and the Tranche B Vessels (each a“**Collateral Vessel**”).    “**Commitment**” means, in relation to a Lender, the aggregate amount of the Facilitywhich that Lender agrees to advance to the A Borrowers or the B Borrowers (as thecase may be) as its several liability as indicated against the name of that Lenderin Schedule 1 (as amended from time to time pursuant to Clause 2.1.2) and/or, wherethe context permits, the amount of the Facility advanced by that Lender andremaining outstanding and “**Commitments**” means more than one of them.    “**Commitment Commission**” means the commitment commission to be paid by the Borrowersto the Agent on behalf of the Lenders pursuant to Clause 9.1.    “**Commitment Termination Date**” means the date being one (1) month before the MaturityDate or such later date as the Lenders may in their discretion agree.    “**Companies**” means each ISM Company and each ISPS Company (each a “**Company**”).    “**Credit Support Document**” means any document described as such in the MasterAgreement and, where the context permits, any other document referred to in anyCredit Support Document which has the effect of creating an Encumbrance in favour ofany of the Finance Parties.    “**Credit Support Provider**” means any person (other than the A Borrowers) described assuch in the Master Agreement.    “**Currency of Account**” means, in relation to any payment to be made to a FinanceParty under a Finance Document, the currency in which that payment is required to bemade by the terms of that Finance Document.    “**Deeds of Covenants**” means the deeds of covenants referred to in Clause 10.1.1.(each a “**Deed of Covenant**”).    “**Default**” means an Event of Default or any event or circumstance specified in Clause13.1 which would (with the expiry of a grace period, the giving of notice, themaking of any determination under the Finance Documents or any combination of any ofthe foregoing) be an Event of Default.
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   “**DOC**” means, in relation to the ISM Company, a valid Document of Compliance issuedfor the ISM Company by the Administration under paragraph 13.2 of the ISM Code.    “**Dollars**”, “**US$**” and “**$**” each means available and freely transferable andconvertible funds in lawful currency of the United States of America.    “**Drawdown Date**” means the date on which a Drawing is advanced under Clause 4.    “**Drawdown Notice**” means a notice substantially in the form set out in Schedule 5.    “**Drawing**” means any one amount advanced or to be advanced pursuant to a DrawdownNotice or, where the context permits, the amount advanced and for the time beingoutstanding and “**Drawings**” means more than one of them.    “**Earnings**” in relation to a Vessel means all hires, freights, pool income and othersums payable to or for the account of its Owner in respect of that Vessel including(without limitation) all remuneration for salvage and towage services, demurrage anddetention moneys, contributions in general average, compensation in respect of anyrequisition for hire, and damages and other payments (whether awarded by any courtor arbitral tribunal or by agreement or otherwise) for breach, termination orvariation of any contract for the operation, employment or use of that Vessel.    “**Encumbrance**” means a mortgage, charge, assignment, pledge, lien, or other securityinterest securing any obligation of any person or any other agreement or arrangementhaving a similar effect.    “**Environmental Affiliate**” means an agent or employee of an Owner or a person in acontractual relationship with that Owner in respect of the Vessel owned by it(including without limitation, the operation of or the carriage of cargo of suchVessel).    “**Environmental Approvals**” means any present or future permit, licence, approval,ruling, variance, exemption or other authorisation required under the applicableEnvironmental Laws.
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   “**Environmental Claim**” means any and all enforcement, clean-up, removal,administrative, governmental, regulatory or judicial actions, orders, demands orinvestigations instituted or completed pursuant to any Environmental Laws orEnvironmental Approvals together with any claims made by any third person relatingto damage, contribution, loss or injury resulting from any Environmental Incident.    “**Environmental Incident**” means: (a) any release of Environmentally Sensitive Material from aVessel; or  (b) any incident in which Environmentally Sensitive Material isreleased from a vessel other than a Vessel and which involves a collisionbetween a Vessel and such other vessel or some other incident of navigation oroperation, in either case, in connection with which the relevant Vessel isactually or potentially liable to be arrested, attached, detained or injunctedand/or where any guarantor, any manager (or any sub-manager of such Vessel) orany of its officers, employees or other persons retained or instructed by it(or such sub-manager) are at fault or allegedly at fault or otherwise liable toany legal or administrative action; or  (c) any other incident in which Environmentally Sensitive Materialis released otherwise than from such Vessel and in connection with which thatVessel is actually or potentially liable to be arrested and/or where anyguarantor, any manager (or any sub-manager of the relevant Vessel) or any ofits officers, employees or other persons retained or instructed by it (or suchsub-manager) are at fault or allegedly at fault or otherwise liable to anylegal or administrative action.   “**Environmental Laws**” means all present and future laws, regulations, treaties andconventions of any applicable jurisdiction which: (a) have as a purpose or effect the protection of, and/orprevention of harm or damage to, the environment;  (b) relate to the carriage of Environmentally Sensitive Material orto actual or threatened releases of Environmentally Sensitive Material;
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 (c) provide remedies or compensation for harm or damage to theenvironment; or  (d) relate to Environmentally Sensitive Materials or health orsafety matters.   “**Environmentally Sensitive Material**” means (i) oil and oil products and (ii) anyother waste, pollutant, contaminant or other substance (including any liquid, solid,gas, ion, living organism or noise) that may be harmful to human health or otherlife or the environment or a nuisance to any person or that may make the enjoyment,ownership or other territorial control of any affected land, property or waters morecostly for such person to a material degree.    “**Event of Default**” means any of the events or circumstances set out in Clause 13.1.    “**Execution Date**” means the date on which this Agreement is executed by each of theparties hereto.    “**Facility**” means the reducing revolving credit facility made available by theLenders to the Borrowers pursuant to this Agreement.    “**Facility Outstandings**” means the total of all Drawings made at that time, to theextent not reduced by repayments, prepayments and voluntary reductions.    “**Facility Period**” means the period beginning on the date of this Agreement andending on the date when the whole of the Indebtedness has been repaid in full andthe Security Parties have ceased to be under any further actual or contingentliability to the Finance Parties under or in connection with the Finance Documents.    “**Fee Letter**” means (i) the letter dated 26 September 2007 between Guarantor B, theAgent, the Bookrunners and the MLAs and (ii) the letter between Guarantor B and theAgent dated 26 September 2007, setting out the fees referred to in Clause 9.    “**Finance Documents**” means this Agreement, the Master Agreement, the SecurityDocuments, any Fee Letter and any other document designated as such by the Agent andthe Borrowers and “**Finance Document**” means any one of them.
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   “**Finance Parties**” means the Agent, the Security Trustee, the MLAs, the SwapProvider, the Bookrunners and the Lenders and “**Finance Party**” means any one of them.    “**First Drawdown Date**” means the date on which the first Drawing is advanced underClause 4.    “**GAAP**” means generally accepted accounting principles in the United States ofAmerica.    “**Groups**” means together the Guarantor A Group and the Guarantor B Group (each a“**Group**”).    “**Guarantees**” means the guarantees and indemnities referred to in Clause 10.1.3.    “**Guarantor A**” means Teekay Tankers Ltd.    “**Guarantor A Float Date**” means the date on which Guarantor A is listed on arecognised stock exchange.    “**Guarantor A Group**” means Guarantor A and each of its Subsidiaries.    “**Guarantor B**” means Teekay Corporation.    “**Guarantor B Group**” means Guarantor B and each of its Subsidiaries, other than OPCO,TOO, TGP and (following the Guarantor A Float Date) Guarantor A, and theirrespective Subsidiaries.    “**Guarantors**” means (a) Guarantor A in respect of the obligations of the A Borrowersand, with effect from any relevant Collateral Transfer Date, any Collateral TransferBorrowers and (b) Guarantor B in respect of the obligations of (i) the A Borrowersfrom the first Drawdown Date in respect of Tranche A until the Guarantor A FloatDate and (ii) the B Borrowers from the First Drawdown Date until the end of theFacility Period.    “**Guarantors’ Accounts**” means the consolidated financial accounts of each of theGuarantors to be provided to the Agent pursuant to clause 9 of the respectiveGuarantees.
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   “**Holding Company**” means, in relation to any entity, any other entity in respect ofwhich it is a Subsidiary.    “**Hugli**” means Hugli Spirit L.L.C.    “**Indebtedness**” means together the Tranche A Indebtedness and the Tranche BIndebtedness.    “**Initial Maximum Amount**” means the aggregate of the Tranche A Maximum Amount and theTranche B Maximum Amount, in a maximum aggregate amount of eight hundred and twelvemillion Dollars ($812,000,000) prior to the Tranche B Step Up Date and eight hundredand forty five million Dollars ($845,000,000) following the Tranche B Step Up Date.    “**Insurances**” in relation to a Vessel means all policies and contracts of insurance(including all entries in protection and indemnity or war risks associations) whichare from time to time taken out or entered into in respect of or in connection withthat Vessel or her increased value and (where the context permits) all benefitsunder such contracts and policies, including all claims of any nature and returns ofpremium.    “**Interest Payment Date**” means each date for the payment of interest in accordancewith Clause 7.7.    “**Interest Period**” means each period for the payment of interest selected by theBorrowers or agreed by the Agent pursuant to Clause 7.    “**ISM Code**” means the International Management Code for the Safe Operation of Shipsand for Pollution Prevention.    “**ISM Company**” means, at any given time, the company responsible for a Vessel’scompliance with the ISM Code under paragraph 1.1.2 of the ISM Code.    “**ISPS Code**” means the International Ship and Port Facility Security Code.    “**ISPS Company**” means, at any given time, the company responsible for a Vessel’scompliance with the ISPS Code.
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   “**ISSC**” means a valid international ship security certificate for a Vessel issuedunder the ISPS Code.    “**law**” or “**Law**” means any law, statute, treaty, convention, regulation, instrument orother subordinate legislation or other legislative or quasi-legislative rule ormeasure, or any order or decree of any government, judicial or public or other bodyor authority, or any directive, code of practice, circular, guidance note or otherdirection issued by any competent authority or agency (whether or not having theforce of law).    “**LIBOR**” means: (a) the applicable Screen Rate; or  (b) (if no Screen Rate is available for any Interest Period) thearithmetic mean of the rates (rounded upwards to four decimal places) assupplied to the Agent at its request quoted by the Reference Banks (or by twoof them if one is unable to quote) to leading banks in the London interbankmarket,   at 11.00 a.m. London time two (2) Business Days before the first day of the relevantInterest Period for the offering of deposits in Dollars in an amount comparable tothe Facility (or any relevant part of the Facility) and for a period comparable tothe relevant Interest Period.    “**Majority Lenders**” means a Lender or Lenders whose Commitments aggregate more thansixty six and two thirds per cent (66 2/3%) of the aggregate of all the Commitments.    “**Management Agreement**” means any agreement(s) for the commercial and/or technicalmanagement of the Vessels entered into between each Owner and a company which is notcontrolled by Guarantor B other than A/S Dampskibsselskabet Torm or, in the case ofm.v. “NASSAU SPIRIT”, a company controlled by OAO Sovcomflot.    “**Managers**” in relation to m.v. “NASSAU SPIRIT” means a company controlled by OAOSovcomflot and in relation to each other Vessel means A/S Dampskibsselskabet Torm ora management company which is controlled by Guarantor B or such other commercialand/or technical managers of the Vessels
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   nominated by the relevant Owner as the Agent acting on the instructions of theMajority Lenders may approve such approval not to be unreasonably withheld ordelayed.    “**Mandatory Cost**” means the percentage rate per annum calculated by the Agent inaccordance with Schedule 4.    “**Margin**” means (a) in respect of Tranche A (i) nought point five five percent(0.55%) per annum for any period when Guarantor B guarantees the Tranche AIndebtedness and (ii) nought point six zero per cent (0.60%) per annum for anyperiod when Guarantor B does not guarantee the Tranche A Indebtedness, and (b) inrespect of Tranche B nought point five five per cent (0.55%) per annum.    “**Master Agreement**” means any ISDA master agreement (or any other form of masteragreement relating to interest exchange transactions) entered into between the SwapProvider and the A Borrowers to hedge the Tranche A Indebtedness under thisAgreement during the Facility Period, including but not limited to the ISDA masteragreement dated on or about the date hereof entered into between the Swap Providerand the A Borrowers and a Transaction dated 2 July 2007, as such Transaction hasbeen novated by Guarantor B to the A Borrowers pursuant to a novation agreementdated on or about the date hereof entered into between the Swap Provider, GuarantorB and the A Borrowers, and including each Schedule to any Master Agreement and eachconfirmation exchanged pursuant to any Master Agreement.    “**Master Agreement Liabilities**” means at any relevant time all liabilities of the ABorrowers to the Swap Provider under or pursuant to the Master Agreement or anyTransaction, whether actual or contingent, present or future.    “**Material Adverse Effect**” means a material adverse change in, or a material adverseeffect on: (a) the financial condition, assets, prospects or business of anySecurity Party or on the consolidated financial condition, assets, prospects orbusiness of either Group;
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 (b) the ability of any Security Party to perform and comply withits obligations under any Security Document or to avoid any Event of Default;  (c) the validity, legality or enforceability of any SecurityDocument; or  (d) the validity, legality or enforceability of any securityexpressed to be created pursuant to any Security Document or the priority andranking of any such security,   provided that, in determining whether any of the forgoing circumstances shallconstitute such a material adverse change or material adverse effect for thepurposes of this definition, the Finance Parties shall consider such circumstance inthe context of (x) either Group taken as a whole and (y) the ability of theBorrowers and the Guarantors to perform each of their obligations under the SecurityDocuments.    “**Maturity Date**” means the date falling ten (10) years after the Execution Date.    “**Maximum Amount**” means: (a) the Initial Maximum Amount for the period from the ExecutionDate until the first Upsize Trigger Date; and  (b) the relevant Upsize Increased Maximum Amount from the firstUpsize Trigger Date until the Maturity Date,   as reduced from time to time pursuant to the terms of thisAgreement.    “**Mortgages**” means the statutory mortgages referred to in Clause 10.1.1 together withthe Deeds of Covenants.    “**Necessary Authorisations**” means all Authorisations of any person including anygovernment or other regulatory authority required by applicable Law to enable it to: (a) lawfully enter into and perform its obligations under theSecurity Documents to which it is party;
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 (b) ensure the legality, validity, enforceability or admissibilityin evidence in England and, if different, its jurisdiction of incorporation, ofsuch Security Documents to which it is party; and  (c) carry on its business from time to time.   “**OPCO**” means Teekay Offshore Operating L.P. and its Subsidiaries.    “**Owner**” in respect of a Collateral Vessel means the Borrower listed as the Owner ofthat Vessel in Schedule 2 and in respect of an Additional Vessel means the Borrowerregistered as the owner of that Vessel following its purchase.    “**Permitted Encumbrance**” means (i) any Encumbrance which has the prior writtenapproval of the Agent acting on the instructions of all the Lenders or (ii) anyliens for current crews’ wages and salvage and liens incurred in the ordinary courseof trading a Vessel up to an aggregate amount at any time not exceeding ten millionDollars ($10,000,000).    “**Permitted Upsize Lending Ratio**” means (i) fifty five per cent of the Valuations ofthe relevant Additional Vessels as at the relevant Upsize Trigger Date (in respectof Tranche A) and (ii) sixty per cent of the Valuations of the relevant AdditionalVessels as at the relevant Upsize Trigger Date (in respect of Tranche B).    “**Pledgor**” means each company listed in Schedule 2 Part I, in respect of the ABorrower against whose name it is listed.    “**Pre-Approved Classification Society**” means any of Det norske Veritas, LloydsRegister, American Bureau of Shipping (ABS), Germanischer Lloyd or Bureau Veritas orsuch other classification society acceptable to the Majority Lenders.    “**Pre-Approved Flag**” means Marshall Islands, Norwegian International Ship Registry,Liberia, Panama, Isle of Man, Cayman Islands, Bermuda, Bahamas or Singapore.    “**Proportionate Share**” means, at any time, the proportion which a Lender’s Commitment(whether or not advanced) then bears to the aggregate Commitments of all the Lenders(whether or not advanced).
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   “**Reduction Date**” means the date falling five (5) years after the Execution Date andeach date falling at consecutive six monthly intervals thereafter.    “**Reference Banks**” means, in relation to LIBOR, the principal London offices (orlending Affiliates) of each of the Bookrunners or such other banks as may beappointed by the Agent in consultation with the Borrowers.    “**Relevant Documents**” means the Finance Documents and the Management Agreements.    “**Relevant Reduction Amount**” means, in respect of each Vessel, the percentage set outin the column headed “Relevant Share” opposite that Vessel in Schedule 2, as amendedpursuant to Clause 2.1.1. from time to time at or around an Upsize Trigger Date.    “**Replacement Vessel**” means a vessel of substantially similar value (as evidenced bythe average of two Valuations), type and age to the Vessel it is offered as areplacement of, acceptable to the Agent acting on the instructions of the MajorityLenders.    “**Requisition Compensation**” in relation to a Vessel means all compensation or othermoney which may from time to time be payable to an Owner as a result of that Vesselbeing requisitioned for title or in any other way compulsorily acquired (other thanby way of requisition for hire).    “**Same Day Drawing**”, means, in respect of the first drawing only, a Drawingrequested by the Borrowers prior to 10.00 am hours (New York time) on the day beforethe First Drawdown Date and made by the Lenders on the First Drawdown Date.    “**Screen Rate**” means in relation to LIBOR, the British Bankers’ Association InterestSettlement Rate for the relevant currency and period displayed on theappropriate page of the Reuters page LIBOR 01 (or such other page or pages whichreplace(s) such page) for the purposes of displaying offered rates of leading banks,for deposits in Dollars of amounts equal to the amount of the relevant Drawing for aperiod equal in length to the relevant Interest Period.
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   “**Security Documents**” means the Mortgages, the Deeds of Covenants, the Assignments,the Guarantees, the Share Pledges or (where the context permits) any one or more ofthem and any other agreement or document which may at any time be executed by anyperson as security for the payment of all or any part of the Indebtedness and“**Security Document**” means any one of them.    “**Security Parties**” means the Tranche A Security Parties and the Tranche B SecurityParties, each a “**Security Party**”).    “**Share Pledges**” means the pledges of the shares of the Borrowers given by either ofthe Guarantors or by a Pledgor as referred to in Clause 10.1.4.    “**SMC**” means a valid safety management certificate issued for a Vessel by or onbehalf of the Administration under paragraph 13.7 of the ISM Code.    “**SMS**” means a safety management system for a Vessel developed and implemented inaccordance with the ISM Code.    “**Subsidiary**” means a subsidiary undertaking, as defined in section 736 Companies Act1985 or any analogous definition under any other relevant system of law.    “**Tax**” means any tax, levy, impost, duty or other charge or withholding of a similarnature (including any penalty or interest payable in connection with any failure topay or any delay in paying any of the same) and “**Taxation**” shall be interpretedaccordingly.    “**TGP**” means Teekay LNG Partners L.P. and its Subsidiaries.  ** **** ****“TNK”**means Teekay Tankers Ltd and its Subsidiaries.    “**TOO**” means Teekay Offshore Partners L.P. and its Subsidiaries.    “**Total Loss**” in relation to a Vessel means: (a) an actual, constructive, arranged, agreed or compromised totalloss of that Vessel; or
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 (b) the requisition for title or compulsory acquisition,nationalisation or expropriation of that Vessel by or on behalf of anygovernment or other authority (other than by way of requisition for hire); or  (c) the capture, seizure, arrest, detention or confiscation of thatVessel unless the Vessel is released and returned to the possession of itsOwner within ninety (90) days after the capture, seizure, arrest, detention orconfiscation in question.   “**Tranche A**” means an amount not exceeding the Tranche A Maximum Amount to be madeavailable by the Lenders to the A Borrowers.    “**Tranche A Indebtedness**” means the aggregate from time to time of: the amount ofTranche A outstanding; all accrued and unpaid interest on Tranche A; the MasterAgreement Liabilities; and all other sums of any nature (together with all accruedand unpaid interest on any of those sums) which from time to time may be payable bythe A Borrowers to any of the Finance Parties under all or any of the FinanceDocuments.    “**Tranche A Maximum Amount**” means two hundred and twenty nine million Dollars($229,000,000), as reduced from time to time in accordance with Clause 2.1.1 and/orClause 3.4 and/or Clause 7.9.5. or increased pursuant to Clause 2.1.1 and/or Clause2.1.2 and/or 3.4.5.    “**Tranche A Security Party**” means the A Borrowers from time to time, Guarantor A forany period when Guarantor A is guaranteeing the Tranche A Indebtedness, each Pledgorfor any period when it is giving a Share Pledge, and Guarantor B for any period whenGuarantor B is guaranteeing the Tranche A Indebtedness, and any other person who mayat any time during the Facility Period be liable for, or provide security for, allor any part of the Tranche A Indebtedness, and “**Tranche A Security Party**” means anyone of them.    “**Tranche A Vessels**” means: (i) the Vessels listed in Schedule 2 Part I; and  (ii) following any Collateral Transfer, any Tranche B Vesselsredenominated as Tranche A Vessels; and
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 (iii) following any Upsize Trigger Date, any Additional Vesseldesignated as a Tranche A Vessel; and  (iv) any Replacement Vessel accepted as a Tranche A Vessel,   and everything now and in the future belonging to them on board and ashore(each a “**Tranche A Vessel**”).    “**Tranche B**” means an amount not exceeding the Tranche B Maximum Amount to be madeavailable by the Lenders to the B Borrowers.    “**Tranche B Indebtedness**” means the aggregate from time to time of: the amount ofTranche B outstanding; all accrued and unpaid interest on Tranche B; and all othersums of any nature (together with all accrued and unpaid interest on any of thosesums) which from time to time may be payable by the B Borrowers to any of theFinance Parties under all or any of the Finance Documents.    “**Tranche B Maximum Amount**” means: (a) five hundred and eighty three million Dollars ($583,000,000)from the Execution Date until the earlier of the Tranche B Step Up Date and theend of the Facility Period; and  (b) six hundred and sixteen million Dollars ($616,000,000) from theTranche B Step Up Date to the end of the Facility Period,   in each case as reduced from time to time in accordance with Clause 2.1.1 and/orClause 3.4 and/or Clause 7.9.5. or increased pursuant to Clause 2.1.2.    “**Tranche B Security Party**” means the B Borrowers from time to time and Guarantor B,and any other person who may at any time during the Facility Period be liable for,or provide security for, all or any part of the Tranche B Indebtedness, and “**TrancheB Security Party**” means any one of them.    “**Tranche B Step Up Date**” means the date on which the Borrowers have provided theAgent with those conditions precedent set out in Schedule 3 Part VII and the TrancheB Maximum Amount has been increased accordingly.    “**Tranche B Vessels**” means:
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 (i) the Vessels listed in Schedule 2 Part II (other than anyVessels redenominated as Tranche A Vessels following a Collateral Transfer);  (ii) following any Upsize Trigger Date, any Additional Vesseldesignated as a Tranche B Vessel; and  (iii) any Replacement Vessel accepted as a Tranche B Vessel,   and everything now and in the future belonging to them on board and ashore (each a“**Tranche B Vessel**”).    “**Tranches**” means together Tranche A and Tranche B (each a “**Tranche**”).    “**Tranche Maximum Amounts**” means together the Tranche A Maximum Amount and theTranche B Maximum Amount (each a “**Tranche Maximum Amount**”).    “**Transaction**” means a transaction entered into between the Swap Provider and acounterparty under a Master Agreement.    “**Transfer Certificate**” means a certificate substantially in the form set out inSchedule 6 or any other form agreed between the Agent and the Borrowers.    “**Transfer Date**” means, in relation to any Transfer Certificate, the date for themaking of the transfer specified in the schedule to such Transfer Certificate.    “**Trust Property**” means: (a) all benefits derived by the Security Trustee from Clause 10;and  (b) all benefits arising under (including, without limitation, allproceeds of the enforcement of) each of the Security Documents,   with the exception of any benefits arising solely for the benefit of the SecurityTrustee.    “**Upsize Amount**” means the amount set out in an Upsize Notice not to exceed thelesser of (i) such amount as can be lent without breaching the Permitted UpsizeLending Ratio and (ii) (when aggregated with all previous Upsize Amounts) fourhundred million Dollars ($400,000,000).
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   “**Upsize Increased Maximum Amount**” means the Initial Maximum Amount as increased bythe relevant Upsize Amount with effect from each Upsize Trigger Date being atotal maximum amount of up to one billion two hundred and forty five millionDollars ($1,245,000,000) to be allocated between Tranche A and/or Tranche B asspecified by the Borrowers in the relevant Upsize Notice.    “**Upsize Notice**” means a notice substantially in the form of Schedule 7.    “**Upsize Trigger Date**” means the date specified in an Upsize Notice (being not lessthan thirty (30) days following the date of such Upsize Notice) on which theBorrowers request an increase in the Maximum Amount pursuant to Clause 2.1.2.    “**Valuation**” means in relation to a Vessel or a Replacement Vessel, the writtenvaluation of that Vessel or Replacement Vessel expressed in Dollars prepared by oneof the Approved Brokers (or such other firm of reputable independent shipbrokers asmay be acceptable to the Agent) to be nominated by the Borrowers, such nomination tobe subject to the approval of the Agent. Such valuations shall be prepared at theBorrowers’ expense, without a physical inspection, on the basis of a sale for promptdelivery for cash at arm’s length between a willing buyer and a willing sellerwithout the benefit of any charterparty or other engagement.    “**Vessels”**means the Collateral Vessels and any Additional Vessels (each a “**Vessel**”).  ** **** ****“WSJ Prime Rate”**means the **“Prime Rate”**as published in the printed copy of the WallStreet Journal on any particular day as the same may be adjusted from time to time. 1.2 In this Agreement: 1.2.1 words denoting the plural number include the singular and vice versa;  1.2.2  words denoting persons include corporations, partnerships,associations of persons (whether incorporated or not) or governmental orquasi-governmental bodies or authorities and vice versa;  1.2.3 references to Recitals, Clauses and Schedules are referencesto recitals, clauses and schedules to or of this Agreement;
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 1.2.4 references to this Agreement include the Recitals and theSchedules;  1.2.5 the headings and contents page(s) are for the purpose ofreference only, have no legal or other significance, and shall be ignored inthe interpretation of this Agreement;  1.2.6 references to any document (including, without limitation, toall or any of the Relevant Documents) are, unless the context otherwiserequires, references to that document as amended, supplemented, novated orreplaced from time to time;  1.2.7 references to statutes or provisions of statutes arereferences to those statutes, or those provisions, as from time to timeamended, replaced or re-enacted;  1.2.8 references to any Finance Party include its successors,transferees and assignees; and  1.2.9 a time of day (unless otherwise specified) is a reference toNew York time. 1.3 **Offer letter**   This Agreement supersedes the terms and conditions contained in any correspondencerelating to the subject matter of this Agreement exchanged between any Finance Partyand the Borrowers or their representatives prior to the date of this Agreement.**2** **The Facility and its Purposes** 2.1 **Amount** 2.1.1 Subject to the terms of this Agreement, each of the Lendersagrees to make available to the Borrowers its Commitment of a revolving creditin an aggregate amount not exceeding the Initial Maximum Amount at any onetime, Tranche A to be made available to the A Borrowers and Tranche B to bemade available to the B Borrowers PROVIDED THAT the Borrowers may elect at anytime whilst no Event of Default has occurred and is continuing unremedied orunwaived (by serving a
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   Collateral Transfer Notice) for a B Borrower to become an A Borrower and forthe Vessel owned by it to become an A Vessel on a Collateral Transfer Dateby providing not less than five (5) days notice to the Agent and fulfillingthe conditions precedent set out in Schedule 3 Part III, at which CollateralTransfer Date (subject to the Agent agreeing the calculation of theCollateral Transfer Amount specified in the Collateral Transfer Notice suchconsent not to be unreasonably withheld) the relevant Collateral TransferAmount shall be added to the Tranche A Indebtedness (and the Tranche AMaximum Amount shall be increased by an amount equal to the Tranche BMaximum Amount multiplied by the percentage shown as the “Relevant Share” ofthe Vessel in question) and deducted from the amount of the Tranche BIndebtedness (and the Tranche B Maximum Amount shall be reduced by an amountequal to the Tranche B Maximum Amount multiplied by the percentage shown asthe “Relevant Share” of the Vessel in question). At or around eachCollateral Transfer Date, the Agent shall circulate to each of the partiesamended Schedules 1, 2 and 8 to reflect the Collateral Transfer. Save inthe case of manifest error, such amended schedules shall be binding on allthe parties with effect from the relevant Collateral Transfer Date.  2.1.2 The Borrowers shall have the right (provided that no Event ofDefault has occurred and is continuing unremedied or unwaived) to issue one ormore Upsize Notices requesting an Upsize Amount and specifying the UpsizeTrigger Date, the proportions in which it is to be allocated to Tranche Aand/or Tranche B, the relevant Additional Borrowers and the Additional Vesselsto be charged as security, following receipt of which Upsize Notice the Lendersshall have the right (but not the obligation) to subscribe in the Upsize Amountpro rata to their Commitments in the Initial Maximum Amount. The availabilityof the Upsize Amount shall be subject (inter alia) to the participating Lendersagreeing to the proposed fee payable, each as specified in the relevant UpsizeNotice. If any Lender does not take up this option within twenty (20) days ofreceipt of an Upsize Notice, its portion of the Upsize Amount shall be madeavailable to be taken up by the participating Lenders for a further ten (10)days. If at the end of such ten (10) day period not all of the Upsize
21

 
   Amount has been subscribed, then the Upsize Amount shall be reduced to theamount subscribed, and the reduced Upsize Amount shall take effect from theUpsize Trigger Date. Following each Upsize Trigger Date, the participatingLenders agree to make their Commitments in the Maximum Amount as increasedby the relevant Upsize Amount available to the Borrowers. The aggregateamount of the Facility following each Upsize Trigger Date shall not exceedthe Maximum Amount. The Upsize Amount may be used for the same purposes asthe initial Facility. At or around each Upsize Trigger Date, the Agentshall circulate to each of the parties an amended Schedule 8 to reflect theincreased Maximum Amount, which shall be calculated on the same basis as theinitial Schedule 8, with a balloon payment of forty five per cent (45%), andamended Schedules 1 and 2 to reflect the amended Commitments and theAdditional Vessels and Additional Borrowers. Save in the case of manifesterror, such amended Schedules shall be binding on all the parties witheffect from the relevant Upsize Trigger Date. 2.2 **Finance Parties’ obligations**The obligations of each Finance Party under theFinance Documents are several. Failure by a Finance Party to perform its obligationsunder the Finance Documents does not affect the obligations of any other party to theFinance Documents. No Finance Party is responsible for the obligations of any otherFinance Party under the Finance Documents.  2.3 **Purposes**The Borrowers shall apply the Facility for the purposes referred toin the Recital.  2.4 **Monitoring**No Finance Party is bound to monitor or verify the application ofany amount borrowed under this Agreement.**3** **Conditions of Utilisation** 3.1 **Conditions precedent** 3.1.1 Before any Lender shall have any obligation to advance anyDrawing under Tranche A the A Borrowers shall deliver or cause to be deliveredto or to the order of the Agent all of the documents and other evidence listedin Part I A of Schedule 3 and before any Lender shall have any obligation
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   to advance any Drawing under Tranche B the B Borrowers shall deliver orcause to be delivered to or to the order of the Agent all of the documentsand other evidence listed in Part I B of Schedule 3.  3.1.2 Before a Collateral Transfer can be effected, the Borrowersshall deliver or cause to be delivered to or to the order of the Agent all ofthe documents and other evidence listed in Part III of Schedule 3.  3.1.3 Before any Lender shall have any obligation to advance anydrawing in respect of the Upsize Amount the Borrowers shall deliver or cause tobe delivered to or to the order of the Agent all of the documents and otherevidence listed in Part V of Schedule 3.  3.1.4 Before the Tranche B Step Up Date, the Borrowers shall deliveror cause to be delivered to or to the order of the Agent all of the documentsand other evidence listed in Part VII of Schedule 3. 3.2 **Further conditions precedent**The Lenders will only be obliged to advance aDrawing if on the date of the Drawdown Notice and on the proposed Drawdown Date: 3.2.1 no Default is continuing or would result from the advance ofthat Drawing; and  3.2.2 the representations made by the Borrowers under Clause 11 andby the Guarantors under the Guarantees are true in all material respects. 3.3 **Drawing limit**The Lenders will only be obliged to advance a Drawing if: 3.3.1 no other Drawing under the same Tranche has been made on thesame Business Day;  3.3.2 that Drawing will not result in there being more than sevenDrawings outstanding in respect of that Tranche at any one time;  3.3.3 that Drawing is not less than five million Dollars($5,000,000) and in an integral multiples of one million Dollars ($1,000,000);and
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 3.3.4 that Drawing will not increase the outstanding amount of therelevant Tranche to a sum in excess of the relevant Tranche Maximum Amount orthe Facility to a sum in excess of the Maximum Amount.   The First Drawdown Date must occur on or before 31 December 2007 or such later dateas the MLAs shall agree. 3.4 **Facility Reduction** 3.4.1 The amount of the Facility available (i) to the A Borrowers,for drawing under this Agreement shall, subject to the provisions of Clauses2.1.1, 2.1.2, 3.4.5, 3.4.6 and 7.9.5, be the Tranche A Maximum Amount, (ii) tothe B Borrowers for drawing under this Agreement shall, subject to theprovisions of Clauses 2.1.1, 2.1.2, 3.4.5, 3.4.6 and 7.9.5, be the Tranche BMaximum Amount (the total being available to the Borrowers for drawing underthis Agreement (subject to the provisions of Clauses 2.1.1, 2.1.2, 3.4.6 and7.9.5) being eight hundred and twelve million Dollars ($812,000,000) (if theTranche B Step Up Date has not occurred) or eight hundred and forty fivemillion Dollars ($845,000,000) (if the Tranche B Step Up Date has occurred)until the first Reduction Date). On the Reduction Dates the amount of theFacility available for drawing shall be reduced by the amounts set out inSchedule 8 (the “**Initial Reduction Amounts**”). On the Maturity Date theFacility available shall be reduced to zero. Subject to the proviso hereto,the mandatory reductions in the amount of the Facility available for drawingrequired pursuant to this Clause will be made in the amounts and at the timesspecified whether or not the Maximum Amount is reduced pursuant to Clause3.4.2, Clause 3.4.3, Clause 3.4.4, Clause 6.1 or Clause 7.9. PROVIDED ALWAYSTHAT any reductions pursuant to Clause 3.4.2 (voluntary reductions), Clause3.4.3 (sale) or Clause 3.4.4 (Total Loss) shall be applied to the remainingmandatory reductions hereunder on a pro rata basis.  3.4.2 The Borrowers may voluntarily cancel the Maximum Amount inwhole or in part (such cancellation to be against the Tranches in theproportions specified by the Borrowers) in an amount of not less than fivemillion Dollars ($5,000,000) such amount to be in integral multiples of onemillion Dollars ($1,000,000) (or as otherwise may be agreed by the
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   Agent), provided that they have first given to the Agent not fewer than five(5) Business Days’ prior written notice expiring on a Business Day (the“**Cancellation Date**”) of their desire to reduce the Maximum Amount andnotification of which Tranche the cancellation is to be applied against;such notice once received by the Agent shall be irrevocable and shall obligethe Borrowers to make payment of all interest and Commitment Commissionaccrued on the amount so cancelled up to and including the Cancellation Datetogether with any Break Costs in respect of such cancelled amount if theCancellation Date is not the final day of an Interest Period. Any suchreduction in the Maximum Amount shall not be reversed. If, as a result ofany such cancellation, the Tranche A Indebtedness or the Tranche BIndebtedness would exceed the relevant Tranche Maximum Amount, the Borrowersshall, on the Cancellation Date, prepay such amount of Tranche A or TrancheB as will ensure that the Tranche A Indebtedness and/or the Tranche BIndebtedness are not greater than the respective Tranche Maximum Amounts.  3.4.3 In the event of a sale or disposal of a Vessel or the Agenthaving received not less than 5 Business Days’ notice from the Borrowersrequesting that the security relating to a Vessel be released and discharged (a“**Released Vessel**”), the Maximum Amount shall be reduced by the RelevantReduction Amount applicable to that Vessel, such reduction to be applied on apro rata basis against the Initial Reduction Amounts as reduced from time totime in accordance with this clause 3.4. Such reduction shall be made thirty(30) days after a sale or disposal of such Vessel and in the case of a ReleasedVessel thirty (30) days after the date proposed by the Borrowers for releaseand discharge of the security relating to that Vessel. If the Vessel orReleased Vessel in question is replaced within thirty (30) days of the sale,disposal or release with a Replacement Vessel, and in such case of replacementany security held by the Agent (whether directly or indirectly) from therelevant Owner and over such Vessel or Released Vessel is reconstitutedimmediately after the sale to the new owner or after the release and dischargeof security (as the case may be) or over the Replacement Vessel insubstantially identical form, and the Agent obtains favourable legal opinions(on substantially the same basis as those
25

 
   obtained pursuant to paragraph 3 of Part 1 A and Part 1 B of Schedule 3) inrespect of such reconstituted security, the Maximum Amount shall bemaintained at the amount it was prior to the application of the RelevantReduction Amount (as reduced in the meantime by any reductions under Clause3.4.1), and in any event the Relevant Reduction Amount shall not beavailable for drawing during such thirty (30) day period unless and untilthe Agent confirms that the Maximum Amount is to be so maintained. If, as aresult of any reduction in the Maximum Amount pursuant to this Clause, theFacility outstanding would exceed the Maximum Amount or the relevant Trancheoutstanding would exceed the relevant Tranche Maximum Amount, the Borrowersshall, on the date of the sale, disposal or replacement, prepay such amountof the Facility as will ensure that the Facility and Tranche outstanding arenot greater than the Maximum Amount and relevant Tranche Maximum Amountrespectively. Any such prepayment shall oblige the Borrowers to makepayment of all interest and Commitment Commission accrued on the amount soreduced up to and including the date of reduction together with any BreakCosts in respect of such reduced amount if the date of such reduction is notthe final day of an Interest Period. Any such reduction in the MaximumAmount and Tranche Maximum Amounts shall not be reversed save in accordancewith the provisions of this Clause 3.4.3.  3.4.4 In the event that any Vessel becomes a Total Loss, on theearlier to occur of (a) the date of receipt of the proceeds of the Total Lossand (b) the date falling one hundred and eighty (180) days after the occurrenceof the Total Loss (the “**Total Loss Reduction Date**”), the Maximum Amount shall(subject to the proviso hereto) be reduced by the Relevant Reduction Amount inrespect of such Vessel. Any such reductions in the Maximum Amount shall not bereversed. If, as a result of any reduction in the Maximum Amount pursuant tothis Clause, the Facility outstanding would exceed the Maximum Amount or therelevant Tranche outstanding would exceed the relevant Tranche Maximum Amount,the Borrowers shall, on the earlier to occur of (i) the date on which therelevant Owner receives the proceeds of such Total Loss and (ii) the onehundred and eightieth day after the date of such Total Loss occurring, prepaysuch amount of the
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   Facility and Tranche as will ensure that the Facility and relevant Trancheoutstanding is equal to or less than the Maximum Amount and relevant TrancheMaximum Amount respectively. Any such prepayment shall not be reborrowedand Clause 8.3 shall apply to any such prepayment. PROVIDED ALWAYS that ifthere is an investment in a Replacement Vessel on or prior to the Total LossReduction Date, and a guarantee from the owner of the Replacement Vessel (insuch form as the Majority Lenders may require at that time) and securityover such Replacement Vessel acceptable to the Majority Lenders in theirabsolute discretion is also executed and delivered either prior to or on theTotal Loss Reduction Date, then the reduction in the Maximum Amount andTranche Maximum Amounts shall not apply.  3.4.5 In the event of a Collateral Transfer of a Tranche B Vesselinto a Tranche A Vessel on a Collateral Transfer Date, the Tranche A MaximumAmount shall be increased and the Tranche B Maximum Amount shall be decreasedin accordance with the terms of Clause 2.1.1.  3.4.6 To the extent that repayments or prepayments made by theBorrowers to the Agent in accordance with this Agreement reduce the Facilityand Tranches outstanding to less than the Maximum Amount and the TrancheMaximum Amounts respectively, the Borrowers shall again be entitled to makeDrawings up to the Commitment Termination Date in accordance with and subjectto the terms of this Agreement. Any part of the Facility which is undrawn onthe Commitment Termination Date shall be automatically cancelled.  3.4.7 Simultaneously with each reduction of the Maximum Amount inaccordance with Clause 3.4.1, Clause 3.4.2, Clause 3.4.3 or Clause 3.4.4 (asthe case may be), the Commitment of each Lender will reduce or increase (as thecase may be) so that the Commitments of the Lenders in respect of the amendedMaximum Amount and Tranche Maximum Amounts remain in accordance with theirrespective Proportionate Shares. In the case of any increase in the MaximumAmount in accordance with Clause 2.1.2, the Commitment of each Lender will bein accordance with
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   the revised Schedule 1 circulated by the Agent pursuant to Clause 2.1.2 ator about the relevant Upsize Trigger Date. 3.5 **Termination Date**No Lender shall be under any obligation to advance all or anypart of its Commitment after the Commitment Termination Date.  3.6 **Conditions subsequent**The Borrowers undertake to deliver or to cause to bedelivered to the Agent: 3.6.1 on, or as soon as practicable after, the First Drawdown Datethe additional documents and other evidence listed in Part II A or Part II B(as the case may be) of Schedule 3; and  3.6.2 on, or as soon as practicable after, the Collateral TransferDate the additional documents and other evidence listed in Part IV of Schedule3;  3.6.3 on, or as soon as practicable after, an Upsize Trigger Date,the additional documents and other evidence listed in Part VI of Schedule 3;and  3.6.4 on, or as soon as practicable after, the Tranche B Step UpDate, the additional documents and other evidence listed in Part VIII ofSchedule 3. 3.7 **No Waiver**If the Lenders in their sole discretion agree to advance a Drawingto the Borrowers before all of the documents and evidence required by Clause 3.1 havebeen delivered to or to the order of the Agent, the Borrowers undertake to deliver alloutstanding documents and evidence to or to the order of the Agent no later than thedate specified by the Agent.    The advance of all or any part of the Facility under this Clause 3.7 shall not betaken as a waiver of the Lenders’ right to require production of all the documentsand evidence required by Clause 3.1.  3.8 **Form and content**All documents and evidence delivered to the Agent under thisClause 3 shall: 3.8.1 be in form and substance reasonably acceptable to the Agent; and  3.8.2 if reasonably required by the Agent, be certified, notarised,legalised or attested in a manner acceptable to the Agent.
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**4** **Advance** 4.1 **Drawdown Request**The A Borrowers may request a Drawing in respect of TrancheA and the B Borrowers may request a Drawing in respect of Tranche B, in each case to beadvanced on any Business Day prior to the Commitment Termination Date, by delivering tothe Agent a duly completed Drawdown Notice not more than ten (10) and not fewer thanthree (3) Business Days before the proposed Drawdown Date save in respect of a Same DayDrawing.  4.2 **Lenders’ participation**Subject to Clauses 2 and 3, the Agent shall promptlynotify each Lender of the receipt of a Drawdown Notice, following which each Lendershall advance its Proportionate Share of the relevant Drawing to the Borrowers throughthe Agent on the relevant Drawdown Date.**5** **Repayment** 5.1 **Repayment of each Drawing**The Borrowers agree to repay each Drawing to theAgent for the account of the Lenders on the last day of the Interest Period in respectof that Drawing unless the Borrowers select a further Interest Period for that Drawingin accordance with Clause 7, provided that the Borrowers shall not be permitted toselect such a further Interest Period if a Default has occurred and shall then beobliged to repay such Drawing on the last day of its then current Interest Period. TheBorrowers shall on the Maturity Date repay to the Agent as agent for the Lenders allFacility Outstandings.  5.2 **Reborrowing**Amounts of the Facility which are repaid or prepaid shall beavailable for reborrowing in accordance with Clause 3 prior to the CommitmentTermination Date.**6** **Prepayment** 6.1 **Illegality**If it becomes unlawful in any jurisdiction for a Lender to fund ormaintain its Commitment as contemplated by this Agreement or to fund or maintain theFacility: 6.1.1 that Lender shall promptly notify the Agent of that event;  6.1.2 upon the Agent notifying the Borrowers, the Commitment of thatLender (to the extent not already advanced) will be immediately cancelled; and
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 6.1.3 the Borrowers shall repay that Lender’s Proportionate Share ofany Drawing on the last day of its current Interest Period or, if earlier, thedate specified by that Lender in the notice delivered to the Agent and notifiedby the Agent to the Borrowers (being no earlier than the last day of anyapplicable grace period permitted by law) and the Maximum Amount shall bereduced by the amount of that Lender’s Commitment in the Facility. Prior tothe date on which repayment is required to be made under this Clause 6.1.3 theaffected Lender shall negotiate in good faith with the Borrowers to find analternative method or lending base in order to maintain the Facility. 6.2 **Voluntary prepayment of Facility**The Borrowers may prepay the whole or anypart of a Drawing (but, if in part, being an amount that reduces that Drawing by aminimum amount of five million Dollars ($5,000,000)) provided that they give the Agentnot less than three (3) Business Days’ prior notice.  6.3 **Restrictions**Any notice of prepayment given under this Clause 6 shall beirrevocable and, unless a contrary indication appears in this Agreement, shall specifythe date or dates upon which the relevant prepayment is to be made and the amount ofthat prepayment.    Any prepayment under this Agreement shall be made together with accrued interest onthe amount prepaid and, subject to any Break Costs, without premium or penalty.    If the Agent receives a notice under this Clause 6 it shall promptly forward a copyof that notice to the Borrowers or the Lenders, as appropriate.  6.4 **Mandatory Prepayment**If at any time the Facility Outstandings shall exceed theMaximum Amount or the amount outstanding under a Tranche shall exceed the relevantTranche Maximum Amount, the Borrowers shall immediately prepay to the Agent on behalfof the Lenders such amounts as will ensure that the Facility Outstandings do not exceedthe Maximum Amount or the amount outstanding under a Tranche shall not exceed therelevant Tranche Maximum Amount, and shall pay to the Lenders all interest accrued onthe amount prepaid up to and including the date on which such prepayment occurred.
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 6.5 **Master Agreement**Simultaneously with any mandatory prepayment or cancellationrelating to Tranche A under this Clause 6 resulting from the sale or Total Loss of aTranche A Vessel (but not otherwise), any transaction carried out under the MasterAgreement relating to that part of Tranche A being prepaid or cancelled will beterminated unless the A Borrowers and the Swap Provider otherwise agree, and the ABorrowers will pay to the Swap Provider any sums payable under the Master Agreementpursuant to that early termination.**7** **Interest** 7.1 **Interest Periods**The period during which each Drawing shall be outstandingunder this Agreement shall be an Interest Period of one, three or six months’ duration,as selected by the Borrowers in the Drawdown Notice in respect of the Drawing inquestion, or such other duration as may be agreed by the Agent (acting on theinstructions of all the Lenders). Not more than seven (7) one (1) month InterestPeriods in respect of a Tranche may be selected by the Borrowers in each twelve (12)month period.  7.2 **Beginning and end of Interest Periods**The first Interest Period in respect ofeach Drawing shall begin on the Drawdown Date of that Drawing and shall end on the lastday of the Interest Period selected in accordance with Clause 7.1. Any subsequentInterest Period selected in respect of each Drawing shall commence on the day followingthe last day of its previous Interest Period and shall end on the last day of itscurrent Interest Period selected in accordance with Clause 7.1.  7.3 **Interest Periods to meet Maturity Date**If an Interest Period for a Drawingwould otherwise expire after the Maturity Date, the Interest Period for that Drawingshall expire on the Maturity Date.  7.4 **Non-Business Days**If an Interest Period would otherwise end on a day which isnot a Business Day, that Interest Period will instead end on the next Business Day inthat calendar month (if there is one) or the preceding Business Day (if there is not).  7.5 **Interest rate**During each Interest Period interest shall accrue on therelevant Drawing at the rate determined by the Agent to be
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 (i) the WSJ Prime Rate in the case of the first Interest Period fora Same Day Drawing; or  (ii) in all other cases the aggregate of (a) the applicable Marginfor that Tranche, (b) LIBOR and (c) the Mandatory Cost, if applicable. 7.6 **Failure to select Interest Period**If the Borrowers at any time fail to selector agree an Interest Period in accordance with Clause 7.1, the Interest Periodapplicable shall be of three (3) months duration.  7.7 **Accrual and payment of interest**Interest shall accrue from day to day, shallbe calculated on the basis of a 360 day year and the actual number of days elapsed (or,in any circumstance where market practice differs, in accordance with the prevailingmarket practice) and shall be paid by the Borrowers to the Agent for the account of theLenders on the last day of each Interest Period and, if the Interest Period is longerthan three months, on the dates falling at three monthly intervals after the first dayof that Interest Period.  7.8 **Default interest**If the Borrowers fail to pay any amount payable by themunder a Finance Document on its due date, interest shall accrue on the overdue amountfrom the due date, subject to any applicable grace period, up to the date of actualpayment (both before and after judgment) at a rate which is one point five per cent(1.5%) higher than the rate which would have been payable if the overdue amount had,during the period of non-payment, constituted a Drawing for successive InterestPeriods, each selected by the Agent (acting reasonably). Any interest accruing underthis Clause 7.8 shall be immediately payable by the Borrowers on demand by the Agent.If unpaid, any such interest will be compounded with the overdue amount at the end ofeach Interest Period applicable to that overdue amount but will remain immediately dueand payable.  7.9 **Changes in market circumstances**If at any time the Agent determines (whichdetermination shall be final and conclusive and binding on the Borrowers) that, byreason of changes affecting the London interbank market, adequate and fair means do notexist for determining the rate of interest on a Drawing for any Interest Period:
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 7.9.1 the Agent shall give notice to the Lenders and the Borrowersof the occurrence of such event; and  7.9.2 the rate of interest on each Lender’s Commitment in therelevant Drawing for that Interest Period shall be the rate per annum which isthe sum of: (a) the relevant Margin; and  (b) the rate notified to the Agent by that Lenderas soon as practicable, and in any event before interest is due to bepaid in respect of that Interest Period, to be that which expresses asa percentage rate per annum the cost to that Lender of funding itsCommitment in the relevant Drawing from whatever source it mayreasonably select; and  (c) the Mandatory Cost, if any, applicable to thatLender’s Commitment,    PROVIDED THAT if the resulting rate of interest on any Commitment is not acceptableto the Borrowers: 7.9.3 the Agent on behalf of the Lenders will negotiate with theBorrowers in good faith with a view to modifying this Agreement to provide asubstitute basis for determining the rate of interest which is financially asubstantial equivalent to the basis provided for in this Agreement;  7.9.4 any substitute basis agreed pursuant to Clause 7.9.3 shall bebinding on all the parties to this Agreement and shall apply to all Commitmentsin the relevant Drawing; and  7.9.5 if, within thirty (30) days of the giving of the noticereferred to in Clause 7.9.1, the Borrowers and the Agent fail to agree inwriting on a substitute basis for determining the rate of interest in respectof the relevant Drawing, the relevant Lender shall cease to be obliged toadvance its Proportionate Share of that Drawing, but, if it has already beenadvanced, the Borrowers will immediately prepay that Proportionate Share ofthat Drawing, together with any Break Costs, and the Maximum Amount shall
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   be reduced by the amount of that Lender’s Proportionate Share of thatDrawing.  7.10 **Determinations conclusive**The Agent shall promptly notify the Borrowers ofthe determination of a rate of interest under this Clause 7 and each such determinationshall (save in the case of manifest error) be final and conclusive.**8** **Indemnities** 8.1 **Transaction expenses**The Borrowers will, within fourteen (14) days of theAgent’s written demand, pay the Agent (for the account of the Finance Parties) theamount of all reasonable out of pocket costs and expenses (including legal fees andValue Added Tax or any similar or replacement tax if applicable) reasonably incurred bythe Finance Parties or any of them in connection with: 8.1.1 the negotiation, preparation, printing, execution andregistration of the Finance Documents (whether or not any Finance Document isactually executed or registered and whether or not a Drawing is advanced);  8.1.2 any amendment, addendum or supplement to any Finance Document(whether or not completed); and  8.1.3 any other document which may at any time be required by aFinance Party to give effect to any Finance Document or which a Finance Partyis entitled to call for or obtain under any Finance Document. 8.2 **Funding costs**The Borrowers shall indemnify each Finance Party, by payment tothe Agent (for the account of that Finance Party) on the Agent’s written demand,against all losses and costs incurred or sustained by that Finance Party if, for anyreason due to a default or other action by the Borrowers, a Drawing is not advanced tothe Borrowers after the relevant Drawdown Notice has been given to the Agent, or isadvanced on a date other than that requested in the Drawdown Notice.  8.3 **Break Costs**The Borrowers shall indemnify each Finance Party, by payment tothe Agent (for the account of that Finance Party) on the Agent’s written demand,against all documented costs, losses, premiums or penalties incurred by that FinanceParty as a result of its receiving any prepayment of all or any part of a
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   Drawing (whether pursuant to Clause 6 or otherwise) on a day other than the last dayof an Interest Period for that Drawing, or any other payment under or in relation tothe Finance Documents on a day other than the due date for payment of the sum inquestion, including (without limitation) any losses or costs incurred in liquidatingor re-employing deposits from third parties acquired to effect or maintain all orany part of a Drawing, and any liabilities, expenses or losses incurred by thatFinance Party in terminating or reversing, or otherwise in connection with, anyinterest rate and/or currency swap, transaction or arrangement entered into by thatFinance Party with any member of either Group to hedge any exposure arising underthis Agreement, or in terminating or reversing, or otherwise in connection with, anyopen position arising under this Agreement.  8.4 **Currency indemnity**In the event of a Finance Party receiving or recoveringany amount payable under a Finance Document in a currency other than the Currency ofAccount, and if the amount received or recovered is insufficient when converted intothe Currency of Account at the date of receipt to satisfy in full the amount due, theBorrowers shall, on the Agent’s written demand, pay to the Agent for the account of therelevant Finance Party such further amount in the Currency of Account as is sufficientto satisfy in full the amount due and that further amount shall be due to the Agent onbehalf of the relevant Finance Party as a separate debt under this Agreement.  8.5 **Increased costs (subject to Clause 8.6)**If, by reason of the introduction ofany law, or any change in any law, or any change in the interpretation oradministration of any law, or compliance with any request or requirement from anycentral bank or any fiscal, monetary or other authority occurring after the date ofthis Agreement: 8.5.1 a Finance Party (or the Holding Company of a Finance Party)shall be subject to any Tax with respect to payment of all or any part of theIndebtedness (other than Tax on overall net income); or  8.5.2 the basis of Taxation of payments to a Finance Party inrespect of all or any part of the Indebtedness shall be changed; or
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 8.5.3 any reserve requirements shall be imposed, modified or deemedapplicable against assets held by or deposits in or for the account of or loansby any branch of a Finance Party; or  8.5.4 the manner in which a Finance Party allocates capitalresources to its obligations under this Agreement or any ratio (whether cash,capital adequacy, liquidity or otherwise) which a Finance Party is required orrequested to maintain shall be affected; or  8.5.5 there is imposed on a Finance Party (or on the Holding Companyof a Finance Party) any other condition in relation to the Indebtedness or theFinance Documents;   and the result of any of the above shall be to increase the cost to a Finance Party(or to the Holding Company of a Finance Party) of that Finance Party making ormaintaining its Commitment, or to cause a Finance Party to suffer (in its opinion) amaterial reduction in the rate of return on its overall capital below the levelwhich it reasonably anticipated at the date of this Agreement and which it wouldhave been able to achieve but for its entering into this Agreement and/or performingits obligations under this Agreement, then, subject to Clause 8.6, the Finance Partyaffected shall notify the Agent and the Borrowers shall from time to time pay to theAgent on demand for the account of that Finance Party the amount which shallcompensate that Finance Party (or the relevant Holding Company) for such additionalcost or reduced return. A certificate signed by an authorised signatory of thatFinance Party setting out the amount of that payment and the basis of itscalculation shall be submitted to the Borrowers and shall be conclusive evidence ofsuch amount save for manifest error or on any question of law.  8.6 **Exceptions to increased costs**Clause 8.5 does not apply to the extent anyadditional cost or reduced return referred to in that Clause is: 8.6.1 compensated for by a payment made under Clause 8.10; or  8.6.2 compensated for by a payment made under Clause 17.3; or  8.6.3 compensated for by the payment of the Mandatory Cost; or
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 8.6.4 attributable to the wilful breach by the relevant FinanceParty (or the Holding Company of that Finance Party) of any law or regulation. 8.7 **Events of Default**The Borrowers shall indemnify each Finance Party from timeto time, by payment to the Agent (for the account of that Finance Party) on the Agent’swritten demand, against all losses and costs incurred or sustained by that FinanceParty as a consequence of any Event of Default.  8.8 **Enforcement costs**The Borrowers shall pay to the Agent (for the account ofeach Finance Party) on the Agent’s written demand the amount of all costs and expenses(including legal fees) incurred by a Finance Party in connection with the enforcementof, or the preservation of any rights under, any Finance Document including (withoutlimitation) any losses, costs and expenses which that Finance Party may from time totime sustain, incur or become liable for by reason of that Finance Party beingmortgagee of a Vessel and/or a lender to the Borrowers, or by reason of that FinanceParty being deemed by any court or authority to be an operator or controller, or in anyway concerned in the operation or control, of a Vessel. No such indemnity will begiven where any such loss or cost has occurred due to gross negligence or wilfulmisconduct on the part of that Finance Party; however, this shall not affect the rightof any other Finance Party to receive such indemnity.  8.9 **Other costs**The Borrowers shall pay to the Agent (for the account of eachFinance Party) on the Agent’s written demand the amount of all sums which a FinanceParty may pay or become actually or contingently liable for on account of the Borrowersin connection with a Vessel (whether alone or jointly or jointly and severally with anyother person) including (without limitation) all sums which that Finance Party may payor guarantees which it may give in respect of the Insurances, any expenses incurred bythat Finance Party in connection with the maintenance or repair of a Vessel or indischarging any lien, bond or other claim relating in any way to a Vessel, and any sumswhich that Finance Party may pay or guarantees which it may give to procure the releaseof a Vessel from arrest or detention.  8.10 **Taxes**The Borrowers shall pay all Taxes to which all or any part of theIndebtedness or any Finance Document may be at any time subject (other than Tax on aFinance Party’s overall net income) and shall indemnify the Finance
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   Parties, by payment to the Agent (for the account of the Finance Parties) on theAgent’s written demand, against all liabilities, costs, claims and expensesresulting from any omission to pay or delay in paying any such Taxes.**9** **Fees** 9.1 **Commitment fee**The Borrowers shall pay to the Agent (for the account of theLenders in proportion to their Commitments) a fee computed at the rate of thirty percent (30%) of the applicable Margin on the undrawn and uncancelled amount of theTranche Maximum Amounts from time to time from 26 September 2007 until the CommitmentTermination Date. The accrued commitment fee is payable on the last day of each fiscalquarter following the 26 September 2007 and on the Commitment Termination Date.  9.2 **Other fees**The Borrowers shall pay to the Agent on behalf of the Lenders thefees in the amount and at the times agreed in the Fee Letter.  9.3 **Upsize Fees**The Borrowers shall pay to the Agent on behalf of the Lenders thefees in the amount and at the times agreed in each Upsize Notice.  9.4 **Agency fee**The Borrowers shall pay to the Agent for its own account an agencyfee in the amount and at the times agreed in the Fee Letter.**10** **Security and Application of Moneys** 10.1 **Security Documents**As security for the payment of the Indebtedness, theBorrowers shall execute and deliver to the Security Trustee or cause to be executed anddelivered to the Security Trustee the following documents (other than those relating tom.v. “Hugli Spirit” or to Hugli which are to be provided on or prior to the Tranche BStep Up Date) in such forms and containing such terms and conditions as the SecurityTrustee shall require: 10.1.1 a first priority statutory mortgage over each of the Vessels together with acollateral deed of covenants;  10.1.2 a first priority deed or deeds of assignment of the Insurances, Earnings, andRequisition Compensation of each of the Vessels;
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 10.1.3 (a) an on demand guarantee and indemnity from Guarantor A in respect of theobligations of the A Borrowers and any Collateral Transfer Borrowers, to bedelivered to the Security Trustee no later than thirty (30) days after theGuarantor A Float Date; and             (b) an on demand guarantee and indemnity fromGuarantor B (i) in respect of the obligations of the A Borrowers of theTranche A Indebtedness from the Execution Date until the earlier of thedelivery of the guarantee and indemnity referred to in paragraph (a)above and the end of the Facility Period and (ii) in respect of theobligations of the B Borrowers of the Tranche B Indebtedness from theExecution Date until the end of the Facility Period; and  10.1.4 a pledge of shares over each of the A Borrowers given by Guarantor A (or by aPledgor prior to the Guarantor A Float Date) and over each of the B Borrowersgiven by Guarantor B (or Guarantor A following a Collateral Transfer in respectof that B Borrower).   In each case the Security Documents executed in respect of Tranche A Vessels orA Borrowers will secure the Tranche A Indebtedness from time to time and theSecurity Documents executed in respect of Tranche B Vessels or B Borrowers willsecure the Tranche B Indebtedness from time to time. 10.2 **Remittance of Earnings**Immediately upon the occurrence of an Event of Defaultthe Borrowers shall procure that all Earnings are paid to such account(s) as the Agentshall from time to time specify by notice in writing to the Borrowers. 10.3 **General application of moneys**Whilst an Event of Default is continuingunremedied and unwaived each of the Borrowers irrevocably authorises the Agent and theSecurity Trustee to apply all sums which either of them may receive: 10.3.1 pursuant to a sale or other disposition of a Vessel or any right, title orinterest in the Vessel; or  10.3.2 by way of payment of any sum in respect of the Insurances, Earnings orRequisition Compensation; or  10.3.3 otherwise arising under or in connection with any Security Document,
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   in accordance with Clause 3.4.3 or Clause 3.4.4 (if relevant) or otherwise in ortowards satisfaction, or by way of retention on account, of the Indebtedness asfollows:- (A) in the case of any Security Document securing both Tranche Aand Tranche B:  (i) first in payment of all outstanding fees and expenses of theAgent and the Security Trustee;  (ii) secondly in or towards payment of all outstanding interest hereunder;  (iii) thirdly in or towards payment of all outstanding principal hereunder;  (iv) fourthly in or towards payment of all other Indebtedness hereunder;  (v) fifthly the balance, if any, shall be remitted to the Borrowersor whoever may be entitled thereto,  (B) in the case of any Security Document securing only Tranche A:  (i) first in payment of all outstanding fees and expenses of theAgent and the Security Trustee;  (ii) secondly in or towards payment of all outstanding interest inrespect of Tranche A hereunder;  (iii) thirdly in or towards payment of all outstanding principal ofTranche A hereunder;  (iv) fourthly in or towards payment to the Swap Provider of theMaster Agreement Liabilities;  (iv) fifthly the balance, if any, shall be remitted to the ABorrowers or whoever may be entitled thereto,  (C) in the case of any Security Documents securing only Tranche B:  (i) first in payment of all outstanding fees and expenses of theAgent and the Security Trustee;
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 (ii) secondly in or towards payment of all outstanding interest inrespect of Tranche B hereunder;  (iii) thirdly in or towards payment of all outstanding principal ofTranche B hereunder;  (iv) fourthly the balance, if any, shall be remitted to the BBorrowers or whoever may be entitled thereto.**11** **Representations and Warranties**   Each of the Borrowers represents and warrants to each of the Finance Parties at theExecution Date and (by reference to the facts and circumstances then pertaining) at the dateof each Drawdown Notice, at each Drawdown Date and at each Interest Payment Date as follows(except that the representation and warranty contained at Clause 11.6 shall only be made onthe First Drawdown Date and that the representations and warranties contained at Clause 11.2and 11.21 shall only be made on the Execution Date). 11.1 **Status and Due Authorisation**Each of the Security Parties is a corporationduly incorporated under the laws of its jurisdiction of incorporation with power toenter into the Finance Documents and to exercise its rights and perform its obligationsunder the Finance Documents and all corporate and other action required to authoriseits execution of the Finance Documents and its performance of its obligationsthereunder has been duly taken.  11.2 **No Deductions or Withholding**Under the laws of the Security Parties’respective jurisdictions of incorporation or formation in force at the date hereof,none of the Security Parties will be required to make any deduction or withholding fromany payment it may make under any of the Finance Documents.  11.3 **Claims Pari Passu**Under the laws of the Security Parties’ respectivejurisdictions of incorporation in force at the date hereof, the Indebtedness will, tothe extent that it exceeds the realised value of any security granted in respect of theIndebtedness, rank at least *pari passu*with all the Security Parties’ other unsecuredindebtedness save that which is preferred solely by any bankruptcy, insolvency or othersimilar laws of general application.
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 11.4 **No Immunity**In any proceedings taken in any of the Security Parties’respective jurisdictions of incorporation or formation in relation to any of theFinance Documents, none of the Security Parties will be entitled to claim for itself orany of its assets immunity from suit, execution, attachment or other legal process.  11.5 **Governing Law and Judgments**In any proceedings taken in any of the SecurityParties’ jurisdiction of incorporation or formation in relation to any of the FinanceDocuments in which there is an express choice of the law of a particular country as thegoverning law thereof, that choice of law and any judgment or (if applicable) arbitralaward obtained in that country will be recognised and enforced.  11.6 **Validity and Admissibility in Evidence**As at the date hereof, all acts,conditions and things required to be done, fulfilled and performed in order (a) toenable each of the Security Parties lawfully to enter into, exercise its rights underand perform and comply with the obligations expressed to be assumed by it in theFinance Documents, (b) to ensure that the obligations expressed to be assumed by eachof the Security Parties in the Finance Documents are legal, valid and binding and (c)to make the Finance Documents admissible in evidence in the jurisdictions ofincorporation of each of the Security Parties, have been done, fulfilled and performed.  11.7 **No Filing or Stamp Taxes**Under the laws of the Security Parties’ respectivejurisdictions of incorporation or formation in force at the date hereof, it is notnecessary that any of the Finance Documents be filed, recorded or enrolled with anycourt or other authority in its jurisdiction of incorporation (other than the Registrarof Companies for England and Wales or the relevant maritime registry, to the extentapplicable) or that any stamp, registration or similar tax be paid on or in relation toany of the Finance Documents.  11.8 **Binding Obligations**The obligations expressed to be assumed by each of theSecurity Parties in the Finance Documents are legal and valid obligations, binding oneach of them in accordance with the terms of the Finance Documents and no limit on anyof their powers will be exceeded as a result of the borrowings, granting of security orgiving of guarantees contemplated by the Finance Documents or the performance by any ofthem of any of their obligations thereunder.
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 11.9 **No Winding-up**Neither the Borrowers nor the Guarantors have taken anycorporate action nor have any other steps been taken or legal proceedings been startedor (to the best of the Borrowers’ knowledge and belief) threatened against theBorrowers or the Guarantors for their winding-up, dissolution, administration orreorganisation or for the appointment of a receiver, administrator, administrativereceiver, trustee or similar officer of it or of any or all of its assets or revenueswhich might have a material adverse effect on the business or financial condition ofthe relevant Group taken as a whole.  11.10 **Solvency** 11.10.1 Neither the Borrowers, the Guarantors nor either Group taken as a whole isunable, or admits or has admitted its inability, to pay its debts or hassuspended making payments in respect of any of its debts.  11.10.2 Neither the Borrowers nor the Guarantors by reason of actual or anticipatedfinancial difficulties, has commenced, or intends to commence, negotiationswith one or more of its creditors with a view to rescheduling any of itsindebtedness.  11.10.3 The value of the assets of each of the Borrowers, the Guarantors and eachGroup taken as a whole is not less than the liabilities of such entity or suchGroup taken as a whole (as the case may be) (taking into account contingent andprospective liabilities).  11.10.4 No moratorium has been, or may, in the reasonably foreseeable future be,declared in respect of any indebtedness of the Borrowers or the Guarantors. 11.11 **No Material Defaults** 11.11.1 Without prejudice to Clause 11.11.2, neither the Borrowers nor theGuarantors is in breach of or in default under any agreement to which it is aparty or which is binding on it or any of its assets to an extent or in amanner which might have a material adverse effect on the business or financialcondition of either of the Guarantors.
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 11.11.2 No Event of Default is continuing or might reasonably be expected to resultfrom the advance of any Drawing. 11.12 **No Material Proceedings**No action or administrative proceeding of or beforeany court, arbitral body or agency which is not covered by adequate insurance or whichmight have a material adverse effect on the business or financial condition of eitherGroup taken as a whole has been started or is reasonably likely to be started.  11.13 **Guarantors’ Accounts**All financial statements relating to the Guarantorsrequired to be delivered under Clause 9 of the respective Guarantees, were eachprepared in accordance with GAAP, give (in conjunction with the notes thereto) a trueand fair view of (in the case of annual financial statements) or fairly represent (inthe case of quarterly accounts) the financial condition of each of the Guarantors atthe date as of which they were prepared and the results of each of the Guarantorsoperations during the financial period then ended.  11.14 **No Material Adverse Change**Since the publication of the last financialstatements relating to each of the Guarantors delivered pursuant to Clause 9 of therespective Guarantees, there has been no change that has a Material Adverse Effect.  11.15 **No Undisclosed Liabilities**As at the date to which the Guarantor’s Accountswere prepared neither the Borrowers nor the Guarantors had any material liabilities(contingent or otherwise) which were not disclosed thereby (or by the notes thereto) orreserved against therein nor any unrealised or anticipated losses arising fromcommitments entered into by it which were not so disclosed or reserved against therein.  11.16 **No Obligation to Create Security**The execution of the Security Documents bythe Security Parties and their exercise of their rights and performance of theirobligations thereunder will not result in the existence of nor oblige the Borrowers orthe Guarantors to create any Encumbrance over all or any of their present or futurerevenues or assets, other than pursuant to the Finance Documents.  11.17 **No Breach**The execution of the Finance Documents by each of the SecurityParties and their exercise of their rights and performance of their obligations
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   under any of the Finance Documents do not constitute and will not result in anybreach of any agreement or treaty to which any of them is a party.  11.18 **Security**Each of the Security Parties is the legal and beneficial owner ofall assets and other property which it purports to charge, mortgage, pledge, assign orotherwise secure pursuant to each Finance Document and those Finance Documents to whichit is a party create and give rise to valid and effective security having the rankingexpressed in those Finance Documents.  11.19 **Necessary Authorisations**The Necessary Authorisations required by eachSecurity Party are in full force and effect, and each Security Party is in compliancewith the material provisions of each such Necessary Authorisation relating to it and,to the best of its knowledge, none of the Necessary Authorisations relating to it arethe subject of any pending or threatened proceedings or revocation.  11.20 **Money Laundering**Any amount borrowed hereunder, and the performance of theobligations of the Security Parties under the Finance Documents, will be for theaccount of members of the Groups and will not involve any breach by any of them of anylaw or regulatory measure relating to “money laundering” as defined in Article 1 of theDirective (91/308/EEC) of the Council of the European Communities.  11.21 **Disclosure of material facts**The Borrowers are not aware of any materialfacts or circumstances which have not been disclosed to the Agent and which might, ifdisclosed, have reasonably been expected to adversely affect the decision of a personconsidering whether or not to make loan facilities of the nature contemplated by thisAgreement available to the Borrowers.  11.22 **Use of Facility**The Facility will be used for the purposes specified in theRecital.  11.23 **Representations Limited**The representation and warranties of the Borrowers inthis Clause 11 are subject to: 11.23.1 the principle that equitable remedies are remedies which may be granted orrefused at the discretion of the court;
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 11.23.2 the limitation of enforcement by laws relating to bankruptcy, insolvency,liquidation, reorganisation, court schemes, moratoria, administration and otherlaws generally affecting or limiting the rights of creditors;  11.23.3 the time barring of claims under any applicable limitation acts;  11.23.4 the possibility that a court may strike out provisions for a contract asbeing invalid for reasons of oppression, undue influence or similar; and  11.23.5 any other reservations or qualifications of law expressed in any legalopinions obtained by the Agent in connection with the Facility.**12** **Undertakings and Covenants**   The undertakings and covenants in this Clause 12 remain in force for the duration of theFacility Period. 12.1 **General Undertakings** 12.1.1 **Maintenance of Legal Validity**The Borrowers shall obtain, comply with theterms of and do all that is necessary to maintain in full force and effect allauthorisations, approvals, licences and consents required in or by the laws andregulations of its jurisdiction of formation and all other applicablejurisdictions, to enable them lawfully to enter into and perform theirobligations under the Finance Documents and to ensure the legality, validity,enforceability or admissibility in evidence of the Finance Documents in theirjurisdiction of incorporation or organisation and all other applicablejurisdictions.  12.1.2 **Notification of Default**The Borrowers shall promptly, upon becoming aware ofthe same, inform the Agent in writing of the occurrence of any Event of Defaultand, upon receipt of a written request to that effect from the Agent, confirmto the Agent that, save as previously notified to the Agent or as notified insuch confirmation, no Event of Default has occurred.  12.1.3 **Claims Pari Passu**The Borrowers shall ensure that at all times the claims ofthe Finance Parties against it under the Finance Documents rank at least paripassu with the claims of all its other unsecured creditors save
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   those whose claims are preferred by any bankruptcy, insolvency, liquidation,winding-up or other similar laws of general application.  12.1.4 **Management of Vessels**The Borrowers shall ensure that m.v. “NASSAU SPIRIT”is at all times technically and commercially managed either by a companycontrolled by OAO Sovcomflot or by a management company controlled by GuarantorB or by A/S Dampskibsselskabet Torm, or such other management company as may beacceptable to the Agent acting on the instructions of the Majority Lenders.The Borrowers shall ensure that each of the other Vessels is at all timestechnically and commercially managed by a management company controlled byGuarantor B or by A/S Dampskibsselskabet Torm or such other management companyas may be acceptable to the Agent acting on the instructions of the MajorityLenders.  12.1.5 **Classification**The Borrowers shall ensure that each of the Vessels maintainsthe highest classification required for the purpose of the relevant trade ofsuch Vessel which shall be with a Pre-Approved Classification Society, in eachcase, free from any overdue recommendations and conditions affecting thatVessel’s class.  12.1.6 **Certificate of Financial Responsibility**The Borrowers shall obtain andmaintain a certificate of financial responsibility in relation to any Vesselwhich is to call at the United States of America.  12.1.7 **Negative Pledge**The Borrowers shall not create, or permit to subsist, anyEncumbrance (other than pursuant to the Security Documents) over all or anypart of the Vessels or the Insurances other than a Permitted Encumbrance.  12.1.8 **Registration**The Borrowers shall not change or permit a change to the flagof the Vessels during the Facility Period other than to a Pre-Approved Flag orunder such other flag as may be approved by the Agent acting on theinstructions of the Majority Lenders, such approval not to be unreasonablywithheld or delayed.
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 12.1.9 **ISM and ISPS Compliance**The Borrowers shall ensure that the relevant Companycomplies in all material respects with the ISM Code and the ISPS Code or anyreplacements thereof and in particular (without prejudice to the generality ofthe foregoing) shall ensure that the Company holds (i) a valid and currentDocument of Compliance issued pursuant to the ISM Code, (ii) a valid andcurrent SMC issued in respect of each Vessel pursuant to the ISM Code, and(iii) an ISSC in respect of each Vessel, and the Borrowers shall promptly, uponrequest, supply the Agent with copies of the same.  12.1.10 **Necessary Authorisations**Without prejudice to Clause 12.1.9 or any otherspecific provision of the Security Documents relating to an Authorisation, theBorrowers shall (i) obtain, comply with and do all that is necessary tomaintain in full force and effect all Necessary Authorisations if a failure todo the same may cause a Material Adverse Effect; and (ii) promptly uponrequest, supply certified copies to the Agent of all Necessary Authorisations.  12.1.11 **Compliance with Applicable Laws**The Borrowers shall comply with allapplicable laws to which they may be subject if a failure to do the same mayhave a Material Adverse Effect.  12.1.12 **Loans and Guarantees**The Borrowers shall be permitted to make loans andgrant credit upon such terms as they may determine to any other member oftheir Group and may otherwise give any guarantee or indemnity to procurefinancing for other members of their Group, but shall not otherwise make anyloans or grant any credit (save in the ordinary course of business) or giveany guarantee or indemnity (except pursuant to the Security Documents);Provided that the Borrowers shall not make any such loans or guaranteesfollowing the occurrence of an Event of Default which is continuing unremediedor unwaived.  12.1.13 **Further Assurance**The Borrowers shall at their own expense, promptly takeall such action as the Agent may reasonably require for the purpose ofperfecting or protecting any Finance Party’s rights with respect to thesecurity created or evidenced (or intended to be created or evidenced) by theSecurity Documents.
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 12.1.14 **Other information**The Borrowers will promptly supply to the Agent suchinformation and explanations as the Majority Lenders may from time to timereasonably require in connection with the operation of the Vessels and anyreasonable financial information in connection with the Borrowers, and willprocure that the Agent be given the like information and explanations relatingto all other Security Parties.  12.1.15 **Inspection of records**Following the occurrence of an Event of Default whichis continuing unremedied and unwaived the Borrowers will permit the inspectionof their financial records and accounts on reasonable notice from time to timeduring business hours by the Agent or its nominee.  12.1.16 **Valuations**The Borrowers will deliver to the Agent a Valuation of each ofthe Vessels (i) on the due date for delivery of the annual Guarantors’ Accountspursuant to clause 9 of each Guarantee and (ii) following the occurrence of anEvent of Default which is continuing unremedied and unwaived on such otheroccasions as the Agent may request.  12.1.17 **Insurance**The Borrowers shall ensure at their own expense throughout theFacility Period that the Vessels are insured and operated in accordance withthe provisions set out in the relevant Security Documents.  12.1.18 **Change of Control**The Borrowers shall procure that throughout the FacilityPeriod: (a) **Ownership of Guarantor A**Guarantor B shallremain the one hundred per cent (100%) legal and beneficial owner ofGuarantor A (either directly or indirectly) until Guarantor A is listedon a recognised stock exchange, and at all times Guarantor B shallmaintain a minimum of fifty one per cent (51%) voting and managementcontrol in respect of Guarantor A;  (b) **Ownership of Guarantor B**no person or no twoor more persons acting in concert (excluding Resolute Investments Inc.or any successor thereto) acquire (a) legally or beneficially andeither directly or indirectly more than fifty per cent (50%) of theentire issued share capital of Guarantor B; or (b) the right or abilityto
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   control, either directly or indirectly, the affairs or thecomposition of the majority of the board of directors (or equivalentof it) of Guarantor B; and  (c) **Ownership of the Borrowers**in respect of theBorrowers (i) the relevant Pledgor or Guarantor A shall remain thelegal and beneficial owner of the A Borrowers and any CollateralTransfer Borrowers following the relevant Collateral Transfer Date (ii)Guarantor B shall remain the legal and beneficial owner of the BBorrowers (other than, prior to the Tranche B Step Up Date, Hugli andother than any Collateral Transfer Borrowers following the relevantCollateral Transfer Date) and (iii) following the Tranche B Step UpDate Guarantor B shall remain the legal and beneficial owner of Hugliunless and until Hugli becomes a Collateral Transfer Borrower. 12.1.19 **“Know your customer” checks**If: (a) the introduction of or any change in (or in theinterpretation, administration or application of) any law or regulationmade after the date of this Agreement;  (b) any change in the status of the Borrowers afterthe Execution Date; or  (c) a proposed assignment or transfer by a Lenderof any of its rights and obligations under this Agreement to a partythat is not a Lender prior to such assignment or transfer,   obliges the Agent or any Lender (or, in the case of (c) above, anyprospective new Lender) to comply with “know your customer” or similaridentification procedures in circumstances where the necessary informationis not already available to it, the Borrowers shall promptly upon therequest of the Agent or any Lender supply, or procure the supply of, suchdocumentation and other evidence as is reasonably requested by the Agent(for itself or on behalf of any Lender) or any Lender for itself (or, in thecase of (c) above, on behalf of any prospective new Lender) in
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 ** ** Order for the Agent or that Lender (or, in the case of (c) above, anyprospective new Lender) to carry out and be satisfied it has complied withall necessary “know your customer” or other similar checks under allapplicable laws and regulations pursuant to the transactions contemplated inthe Finance Documents.  12.1.20 **Borrowings**The Borrowers will (a) not (save hereunder) borrow from entitiesother than members of either Group and (b) will only borrow from other membersof either Group on a subordinated and unsecured basis.  12.1.21 **No Dividends**The Borrowers shall not pay dividends whilst an Event ofDefault has occurred and is continuing unremedied and unwaived.  12.1.22 **No disposal of Assets**The Borrowers shall not dispose of any materialassets other than as permitted in the Finance Documents.  12.1.23 **Chartering**The Borrowers shall not bareboat charter any of the Vesselsduring the Facility Period.**13** **Events of Default** 13.1 **Events of Default**Each of the events or circumstances set out in this Clause13.1 is an Event of Default. 13.1.1 **Borrowers’ Failure to Pay under this Agreement**The Borrowers fail to pay anyamount of principal due from them under this Agreement at the time, in thecurrency and otherwise in the manner specified herein provided that, if theBorrowers can demonstrate to the reasonable satisfaction of the Agent that allnecessary instructions were given to effect such payment and the non-receiptthereof is attributable solely to an error in the banking system, such paymentshall instead be deemed to be due, solely for the purposes of this paragraph,within three (3) Business Days of the date on which it actually fell due underthis Agreement (if a payment of principal), five (5) Business Days (if apayment of interest or fees) or ten (10) Business Days (if a sum payable ondemand); or
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 13.1.2 **Misrepresentation**Any representation or statement made by any Security Partyin any Security Document to which it is a party or in any notice or otherdocument, certificate or statement delivered by it pursuant thereto or inconnection therewith is or proves to have been incorrect or misleading in anymaterial respect, where the circumstances causing the same give rise to aMaterial Adverse Effect; or  13.1.3 **Specific Covenants**A Security Party fails duly to perform or comply with anyof the obligations expressed to be assumed by or procured by the Borrowersunder Clauses 12.1.7, 12.1.17 or 12.1.18 or undertaken by the Guarantors underClauses 8.1.1 or 8.1.2 of each of the Guarantees; or  13.1.4 **Financial Covenants**A Guarantor is in breach of that Guarantor’s financialcovenants set out in Clauses 8.1.1 or 8.1.2 of the applicable Guarantee at anytime; or  13.1.5 **Other Obligations**A Security Party fails duly to perform or comply with anyof the obligations expressed to be assumed by it in any Security Document(other than those referred to in Clause 13.1.3 or Clause 13.1.4) and suchfailure is not remedied within 30 days after the Agent has given notice thereofto the Borrowers; or  13.1.6 **Cross Default**Any indebtedness of any Security Party is not paid when due(or within any applicable grace period) or any indebtedness of any SecurityParty is declared to be or otherwise becomes due and payable prior to itsspecified maturity where (in either case) in the case of the Guarantors theaggregate of all such unpaid or accelerated indebtedness (i) of Guarantor B isequal to or greater than one hundred million Dollars ($100,000,000) or itsequivalent in any other currency; or (ii) of Guarantor A, is equal to orgreater than twenty five million Dollars ($25,000,000) or its equivalent in anyother currency; or  13.1.7 **Insolvency and Rescheduling**A Security Party is unable to pay its debts asthey fall due, commences negotiations with any one or more of its creditorswith a view to the general readjustment or rescheduling of
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   its indebtedness or makes a general assignment for the benefit of itscreditors or a composition with its creditors; or 13.1.8 **Winding-up**A Security Party takes any corporate action or other steps aretaken or legal proceedings are started for its winding-up, dissolution,administration or re-organisation or for the appointment of a liquidator,receiver, administrator, administrative receiver, conservator, custodian,trustee or similar officer of it or of any or all of its revenues or assets orany moratorium is declared or sought in respect of any of its indebtedness; or  13.1.9 **Execution or Distress** (a) Any Security Party fails to comply with orpay any sum due from it (within 30 days of such amount falling due)under any final judgment or any final order made or given by anycourt or other official body of a competent jurisdiction in anaggregate (i) in respect of Guarantor B equal to or greater than onehundred million Dollars ($100,000,000) or its equivalent in any othercurrency; or (ii) in respect of Guarantor A equal to or greater thantwenty five million Dollars ($25,000,000) or its equivalent in anyother currency; or (iii) in respect of each Borrower equal to orgreater than five million Dollars ($5,000,000) or its equivalent inany other currency being a judgment or order against which there isno right of appeal or if a right of appeal exists, where the timelimit for making such appeal has expired.  (b) Any execution or distress is leviedagainst, or an encumbrancer takes possession of, the whole or anypart of, the property, undertaking or assets of a Security Party inan aggregate amount (i) in respect of Guarantor B equal to or greaterthan one hundred million Dollars ($100,000,000) or its equivalent inany other currency; or (ii) in respect of Guarantor A equal to orgreater than twenty five million Dollars ($25,000,000) or itsequivalent in any other currency; or (iii) in respect of eachBorrower equal to or greater than five million Dollars ($5,000,000)or its equivalent in any other currency other than any execution ordistress which is
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   being contested in good faith and which is either discharged within30 days or in respect of which adequate security has been providedwithin 30 days to the relevant court or other authority to enablethe relevant execution or distress to be lifted or released.  (c) Notwithstanding the foregoing paragraphsof this Clause 13.1.9, any levy of any distress on or any arrest,condemnation, confiscation, requisition for title or use, compulsoryacquisition, seizure, detention or forfeiture of a Vessel (or anypart thereof) or any exercise or purported exercise of any lien orclaim on or against a Vessel where the release of or discharge thelien or claim on or against such Vessel has not been procured within30 days; or 13.1.10 **Similar Event**Any event occurs which, under the laws of any jurisdiction,has a similar or analogous effect to any of those events mentioned in Clauses13.1.7, 13.1.8 and 13.1.9; or  13.1.11 **Insurances**Insurance is not maintained in respect of any Vessel inaccordance with the terms of the relevant Security Document in respect of thatVessel; or  13.1.12 **Class**A Vessel has its classification withdrawn by the relevantclassification society PROVIDED THAT if such withdrawal is (in the opinion ofthe Agent in its absolute discretion) capable of remedy such Event of Defaultshall only occur if the Vessel’s classification is not reinstated to thesatisfaction of the Agent within twenty one (21) days; or
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 13.1.13 **Environmental Matters** (a) Any Environmental Claim is pending ormade against an Owner or any of an Owner’s Environmental Affiliatesor in connection with a Vessel, where such Environmental Claim has aMaterial Adverse Effect.  (b) Any actual Environmental Incident occursin connection with a Vessel, where such Environmental Incident has aMaterial Adverse Effect; or 13.1.14 **Repudiation**Any Security Party repudiates any Security Document to which itis a party or does or causes to be done any act or thing evidencing anintention to repudiate any such Security Document; or  13.1.15 **Validity and Admissibility**At any time any act, condition or thing requiredto be done, fulfilled or performed in order: (a) to enable any Security Party lawfully toenter into, exercise its rights under and perform the respectiveobligations expressed to be assumed by it in the Security Documents;  (b) to ensure that the obligations expressedto be assumed by each of the Security Parties in the SecurityDocuments are legal, valid and binding; or  (c) to make the Security Documents admissiblein evidence in any applicable jurisdiction is not done, fulfilled or performed within 30 days after notificationfrom the Agent to the relevant Security Party requiring the same to bedone, fulfilled or performed; or 13.1.16 **Illegality**At any time it is or becomes unlawful for any Security Party toperform or comply with any or all of its obligations under the SecurityDocuments to which it is a party or any of the obligations of the Borrowershereunder are not or cease to be legal, valid and binding and such illegalityis not remedied or mitigated to the satisfaction of the
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   Agent within thirty (30) days after it has given notice thereof to therelevant Security Party; or  13.1.17 **Material Adverse Change**At any time there shall occur a change in thebusiness or operations of a Security Party or a change in the financialcondition of any Security Party which, in the reasonable opinion of theMajority Lenders, materially impairs such Security Party’s ability to dischargeits obligations under the Security Documents in the manner provided therein andsuch change, if capable of remedy, is not so remedied within thirty (30) daysof the delivery of a notice confirming such change by the Agent to the relevantSecurity Party; or  13.1.18 **Qualifications of Financial Statements**The auditors of either Group qualifytheir report on any audited consolidated financial statements of such Group inany regard which, in the reasonable opinion of the Agent, has a MaterialAdverse Effect; or  13.1.19 **Conditions Subsequent**if any of the conditions set out in Clause 3.6 is notsatisfied within thirty (30) days or such other time period specified by theAgent in its discretion; or  13.1.20 **Revocation or Modification of consents etc.**if any Necessary Authorisationwhich is now or which at any time during the Facility Period becomes necessaryto enable any of the Security Parties to comply with any of their obligationsin or pursuant to any of the Security Documents is revoked, withdrawn orwithheld, or modified in a manner which the Agent reasonably considers is, ormay be, prejudicial to the interests of a Finance Party in a material manner,or if such Necessary Authorisation ceases to remain in full force and effect;or  13.1.21 **Curtailment of Business**if the business of any of the Security Parties iswholly or materially curtailed by any intervention by or under authority of anygovernment, or if all or a substantial part of the undertaking, property orassets of any of the Security Parties is seized, nationalised, expropriated orcompulsorily acquired by or under authority of any government or any SecurityParty disposes or threatens to dispose of a substantial part of its business orassets; or
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 13.1.22 C**hallenge to Registration**if the registration of any Vessel or any Mortgagebecomes void or voidable or liable to cancellation or termination; or  13.1.23 **War**if the country of registration of any Vessel becomes involved in war(whether or not declared) or civil war or is occupied by any other power andthe Agent reasonably considers that, as a result, the security conferred by theSecurity Documents is materially prejudiced; or  13.1.24 **Notice of Termination**if a Guarantor gives notice to the Agent to determineits obligations under a Guarantee. 13.2 **Acceleration**If an Event of Default is continuing unremedied or unwaived theAgent may (with the consent of the Majority Lenders) and shall (at the request of theMajority Lenders) by notice to the Borrowers cancel any part of the Maximum Amount notthen advanced and: 13.2.1 declare that the Facility, together with accrued interest, and all otheramounts accrued or outstanding under the Finance Documents are immediately dueand payable, whereupon they shall become immediately due and payable; and/or  13.2.2 declare that the Facility is payable on demand, whereupon it shallimmediately become payable on demand by the Agent; and/or  13.2.3 declare the Commitments terminated and the Maximum Amount reduced to zero.**14** **Assignment and Sub-Participation** 14.1 **Lenders’ rights**Subject to the Borrowers’ consent (not to be unreasonablywithheld or delayed) a Lender may assign any of its rights under this Agreement or sellparticipations in its rights and obligations under this Agreement, or transfer bynovation any of its rights and obligations under this Agreement to any other branch orAffiliate of that Lender or (subject to a minimum assignment amount of five millionDollars ($5,000,000)) to any other bank or financial institution or special purposevehicles wholly owned by a bank or financial institution, and may grantsub-participations in all or any part of its Commitment. Any such
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   assignment or transfer must include a pro rata share of that Lender’s Commitment inrespect of Tranche A and Tranche B. 14.2 **Borrowers’ co-operation**The Borrowers will co-operate fully with a Lender inconnection with any assignment, transfer or sub-participation by that Lender; willexecute and procure the execution of such documents as that Lender may require in thatconnection; and irrevocably authorises any Finance Party to disclose to any proposedassignee, transferee or sub-participant (whether before or after any assignment,transfer or sub-participation and whether or not any assignment, transfer orsub-participation shall take place) all information relating to the Security Parties,the Facility, the Relevant Documents and the Vessels which any Finance Party may in itsdiscretion consider necessary or desirable (subject to any duties of confidentialityapplicable to the Lenders generally). Additionally, (but subject to the same duties ofconfidentiality), any Lender may disclose the size and term of the Facility and thenames of each Security Party to any investor or potential investor in a securitisationwhether of a true sale, synthetic or other nature (or similar transaction of broadlyequivalent economic effect) of that Lender’s rights and obligations under the FinanceDocuments or to any ratings agency, professional adviser, financial institution orother person for the same purpose.  14.3 **Rights of assignee**Any assignee of a Lender shall (unless limited by theexpress terms of the assignment) take the full benefit of every provision of theFinance Documents benefiting that Lender PROVIDED THAT an assignment will only beeffective on notification by the Agent to that Lender and the assignee that the Agentis satisfied it has complied with all necessary “Know your customer” or other similarchecks under all applicable laws and regulations in relation to the assignment to theassignee.  14.4 **Transfer Certificates**If a Lender wishes to transfer any of its rights andobligations under or pursuant to this Agreement, it may do so by delivering to theAgent a duly completed Transfer Certificate, in which event on the Transfer Date: 14.4.1 to the extent that that Lender seeks to transfer its rights and obligations,the Borrowers (on the one hand) and that Lender (on the other) shall bereleased from all further obligations towards the other;
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 14.4.2 the Borrowers (on the one hand) and the transferee (on the other) shallassume obligations towards the other identical to those released pursuant toClause 14.4.1; and  14.4.3 the Agent, each of the Lenders and the transferee shall have the same rightsand obligations between themselves as they would have had if the transferee hadbeen an original party to this Agreement as a LenderPROVIDED THAT the Agent shall only be obliged to execute a Transfer Certificateonce: (a) it is satisfied it has complied with all necessary “know yourcustomer” or other similar checks under all applicable laws and regulations inrelation to the transfer to the transferee; and  (b) the transferee has paid to the Agent for its own account atransfer fee of three thousand five hundred Dollars ($3,500).The Agent shall, as soon as reasonably practicable after it has executed a TransferCertificate, send to the Borrowers a copy of that Transfer Certificate. 14.5 **Finance Documents**Unless otherwise expressly provided in any Finance Documentor otherwise expressly agreed between a Lender and any proposed transferee and notifiedby that Lender to the Agent on or before the relevant Transfer Date, there shallautomatically be assigned to the transferee with any transfer of a Lender’s rights andobligations under or pursuant to this Agreement the rights of that Lender under orpursuant to the Finance Documents (other than this Agreement) which relate to theportion of that Lender’s rights and obligations transferred by the relevant TransferCertificate.  14.6 **No assignment or transfer by the Borrowers or the Guarantors**The Borrowersand the Guarantors may not assign any of their rights or transfer any of its rights orobligations under the Finance Documents without the prior written consent of theLenders.  14.7 **Transfer of the Facility Agreement by KfW*****.***Notwithstanding the provisions ofClause 14.1 KfW may transfer all its rights and obligations under this Agreement to aKfW Subsidiary with effect from 1 January 2008 or any later date. By
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   signing this Agreement the Borrowers consents to such a transfer. KfW or the KfWSubsidiary will inform the Borrowers of the date on which the transfer of KfW’srights and obligations to the KfW Subsidiary takes effect. In this connection thefollowing will apply: 14.7.1 ***Deductions and Increased costs.***If, by reason of circumstances alreadyexisting at the transfer date, the Borrowers would be obliged to make a paymentto the KfW Subsidiary under Clauses 8.5, 17.2 or 17.3, it need pay the KfWSubsidiary only such an amount as it would have been obliged to pay KfW if thetransfer had not occurred.  14.7.2 ***Costs***. KfW will pay all costs incurred as a result of or in connection withsuch transfer.For the purposes of this Clause **KfW Subsidiary**means a company which within themeaning of section 15 ff. German Stock Corporation Act (*Aktiengesetz*) is directly orindirectly (i) majority owned (*im Mehrheitsbesitz*) by KfW or (ii) controlled(*abhängig*) by KfW. 14.8 **Disclosure of information*****.***In connection with any transfer under Clause 14.7KfW may disclose confidential information to the KfW Subsidiary or its agents or itslegal advisors.  14.9 **Mitigation**If a transfer is to take place under Clause 14.7 then, without inany way limiting the rights of KfW under Clauses 8.5, 17.2 or 17.3, KfW shall takereasonable steps to mitigate any circumstances which arise and which would result inany amount becoming payable under or pursuant to Clauses 8.5, 17.2 or 17.3 and it shallco-operate in completing any procedural formalities necessary for the Borrowers toobtain authorisation to make any payment under Clauses 8.5, 17.2 or 17.3 without adeduction or withholding.**15** **The Agent, the Security Trustee and the Lenders** 15.1 **Appointment** 15.1.1 Each Lender and the Swap Provider appoints the Agent to act as its agentunder and in connection with the Finance Documents and each Lender,
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   the Agent and the Swap Provider appoints the Security Trustee to act as itssecurity agent for the purpose of the Security Documents.  15.1.2 Each Lender and the Swap Provider authorises the Agent, and each Lender, theAgent and the Swap Provider authorises the Security Trustee, to exercise therights, powers, authorities and discretions specifically given to the Agent orthe Security Trustee (as the case may be) under or in connection with theFinance Documents together with any other incidental rights, powers,authorities and discretions.  15.1.3 Except where the context otherwise requires, references in this Clause 15 tothe “**Agent**” shall mean the Agent and the Security Trustee individually andcollectively. 15.2 **Authority**Each Lender and the Swap Provider irrevocably authorises theSecurity Trustee (in the case of Clause 15.2.1) and the Agent (in the case of Clauses15.2.2, 15.2.3 and 15.2.4) (in each case subject to Clauses 15.4 and 15.18): 15.2.1 to execute any Finance Document (other than this Agreement and other than theMaster Agreement) on its behalf;  15.2.2 to collect, receive, release or pay any money on its behalf;  15.2.3 acting on the instructions from time to time of the Majority Lenders (savewhere the terms of any Security Document expressly provide otherwise) to giveor withhold any waivers, consents or approvals under or pursuant to any FinanceDocument; and  15.2.4 acting on the instructions from time to time of the Majority Lenders (savewhere the terms of any Security Document expressly provide otherwise) toexercise, or refrain from exercising, any rights, powers, authorities ordiscretions under or pursuant to any Finance Document.The Agent shall have no duties or responsibilities as agent or as security agentother than those expressly conferred on it by the Finance Documents and shall not beobliged to act on any instructions from the Lenders or the Majority Lenders if to doso would, in the opinion of the Agent, be contrary to any provision of the
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Finance Documents or to any law, or would expose the Agent to any actual orpotential liability to any third party. 15.3 **Trust**The Security Trustee agrees and declares, and each of the other FinanceParties acknowledges, that, subject to the terms and conditions of this Clause 15.3,the Security Trustee holds the Trust Property on trust for the Finance Partiesabsolutely. Each of the other Finance Parties agrees that the obligations, rights andbenefits vested in the Security Trustee shall be performed and exercised in accordancewith this Clause 15.3. The Security Trustee shall have the benefit of all of theprovisions of this Agreement benefiting it in its capacity as security agent for theFinance Parties, and all the powers and discretions conferred on trustees by theTrustee Act 1925 (to the extent not inconsistent with this Agreement). In addition: 15.3.1 the Security Trustee and any attorney, agent or delegate of the SecurityTrustee may indemnify itself or himself out of the Trust Property against allliabilities, costs, fees, damages, charges, losses and expenses sustained orincurred by it or him in relation to the taking or holding of any of the TrustProperty or in connection with the exercise or purported exercise of therights, trusts, powers and discretions vested in the Security Trustee or anyother such person by or pursuant to the Security Documents or in respect ofanything else done or omitted to be done in any way relating to the SecurityDocuments other than as a result of its gross negligence or wilful misconduct;  15.3.2 the other Finance Parties acknowledge that the Security Trustee shall beunder no obligation to insure any property nor to require any other person toinsure any property and shall not be responsible for any loss which may besuffered by any person as a result of the lack or insufficiency of anyinsurance; and  15.3.3 the Finance Parties agree that the perpetuity period applicable to the trustsdeclared by this Agreement shall be the period of eighty years from the date ofthis Agreement. 15.4 **Limitations on authority**Except with the prior written consent of all theLenders and the Swap Provider, the Agent shall not be entitled to:
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 15.4.1 release or vary any security given for the Borrower’s obligations under thisAgreement; nor  15.4.2 waive, or agree to the reduction of, a payment of any sum of money payable byany Security Party under the Finance Documents; nor  15.4.3 change the meaning of the expressions “**Majority Lenders**”, “**Margin**”,“**Commitment Commission**” or “**Default Rate**”; nor  15.4.4 exercise, or refrain from exercising, any right, power, authority ordiscretion, or give or withhold any consent, the exercise or giving of whichis, by the terms of this Agreement, expressly reserved to the Lenders; nor  15.4.5 extend the due date for the payment of any sum of money payable by anySecurity Party under any Finance Document; nor  15.4.6 take or refrain from taking any step if the effect of such action or inactionmay lead to the increase of the obligations of a Lender under any FinanceDocument; nor  15.4.7 agree to change the currency in which any sum is payable under any FinanceDocument (other than in accordance with the terms of the relevant FinanceDocument); nor  15.4.8 agree to amend this Clause 15.4. 15.5 **Liability**Neither the Agent nor any of its directors, officers, employees oragents shall be liable to the Lenders or the Swap Provider for anything done or omittedto be done by the Agent under or in connection with any of the Relevant Documentsunless as a result of the Agent’s gross negligence or wilful misconduct.  15.6 **Acknowledgement**Each Lender and the Swap Provider acknowledges that: 15.6.1 it has not relied on any representation made by the Agent or any of theAgent’s directors, officers, employees or agents or by any other person actingor purporting to act on behalf of the Agent to induce it to enter into anyFinance Document;
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 15.6.2 it has made and will continue to make without reliance on the Agent, andbased on such documents and other evidence as it considers appropriate, its ownindependent investigation of the financial condition and affairs of theSecurity Parties in connection with the making and continuation of theFacility;  15.6.3 it has made its own appraisal of the creditworthiness of the SecurityParties; and  15.6.4 the Agent shall not have any duty or responsibility at any time to provide itwith any credit or other information relating to any Security Party unless thatinformation is received by the Agent pursuant to the express terms of a FinanceDocument.Each Lender and the Swap Provider agrees that it will not assert nor seek to assertagainst any director, officer, employee or agent of the Agent or against any otherperson acting or purporting to act on behalf of the Agent any claim which it mighthave against them in respect of any of the matters referred to in this Clause 15.6. 15.7 **Limitations on responsibility**The Agent shall have no responsibility to anySecurity Party or to any Lender on account of: 15.7.1 the failure of a Lender or of any Security Party or to the Swap Provider toperform any of its obligations under a Finance Document; nor  15.7.2 the financial condition of any Security Party; nor  15.7.3 the completeness or accuracy of any statements, representations or warrantiesmade in or pursuant to any Finance Document, or in or pursuant to any documentdelivered pursuant to or in connection with any Finance Document; nor  15.7.4 the negotiation, execution, effectiveness, genuineness, validity,enforceability, admissibility in evidence or sufficiency of any FinanceDocument or of any document executed or delivered pursuant to or in connectionwith any Finance Document. 15.8 **The Agent’s rights**The Agent may:
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 15.8.1 assume that all representations or warranties made or deemed repeated by anySecurity Party in or pursuant to any Finance Document are true and complete,unless, in its capacity as the Agent, it has acquired actual knowledge to thecontrary;  15.8.2 assume that no Default has occurred unless, in its capacity as the Agent, ithas acquired actual knowledge to the contrary;  15.8.3 rely on any document or notice believed by it to be genuine;  15.8.4 rely as to legal or other professional matters on opinions and statements ofany legal or other professional advisers selected or approved by it;  15.8.5 rely as to any factual matters which might reasonably be expected to bewithin the knowledge of any Security Party on a certificate signed by or onbehalf of that Security Party; and  15.8.6 refrain from exercising any right, power, discretion or remedy unless anduntil instructed to exercise that right, power, discretion or remedy and as tothe manner of its exercise by the Lenders (or, where applicable, by theMajority Lenders) and unless and until the Agent has received from the Lendersany payment which the Agent may require on account of, or any security whichthe Agent may require for, any costs, claims, expenses (including legal andother professional fees) and liabilities which it considers it may incur orsustain in complying with those instructions. 15.9 **The Agent’s duties**The Agent shall: 15.9.1 if requested in writing to do so by a Lender, make enquiry and advise theLenders as to the performance or observance of any of the provisions of anyFinance Document by any Security Party or as to the existence of an Event ofDefault; and  15.9.2 inform the Lenders promptly of any Event of Default of which the Agent hasactual knowledge. 15.10 **No deemed knowledge**The Agent shall not be deemed to have actual knowledgeof the falsehood or incompleteness of any representation or warranty made or deemedrepeated by any Security Party or actual knowledge of the
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occurrence of any Default unless a Lender or a Security Party shall have givenwritten notice thereof to the Agent in its capacity as the Agent. Any informationacquired by the Agent other than specifically in its capacity as the Agent shall notbe deemed to be information acquired by the Agent in its capacity as the Agent. 15.11 **Other business**The Agent may, without any liability to account to theLenders or the Swap Provider, generally engage in any kind of banking or trust businesswith a Security Party or with a Security Party’s subsidiaries or associated companiesor with a Lender as if it were not the Agent.  15.12 **Indemnity**The Lenders shall, promptly on the Agent’s request, reimburse theAgent in their respective Proportionate Shares, for, and keep the Agent fullyindemnified in respect of all liabilities, damages, costs and claims sustained orincurred by the Agent in connection with the Finance Documents, or the performance ofits duties and obligations, or the exercise of its rights, powers, discretions orremedies under or pursuant to any Finance Document, to the extent not paid by theSecurity Parties and not arising solely from the Agent’s gross negligence or wilfulmisconduct.  15.13 **Employment of agents**In performing its duties and exercising its rights,powers, discretions and remedies under or pursuant to the Finance Documents, the Agentshall be entitled to employ and pay agents to do anything which the Agent is empoweredto do under or pursuant to the Finance Documents (including the receipt of money anddocuments and the payment of money) and to act or refrain from taking action inreliance on the opinion of, or advice or information obtained from, any lawyer, banker,broker, accountant, valuer or any other person believed by the Agent in good faith tobe competent to give such opinion, advice or information.  15.14 **Distribution of payments**The Agent shall pay promptly to the order of theSwap Provider any sums to which it is entitled under the Finance Documents and to theorder of each Lender that Lender’s Proportionate Share of every sum of money receivedby the Agent pursuant to the Finance Documents (with the exception of any amountspayable pursuant to Clause 9 and/or any Fee Letter and any amounts which, by the termsof the Finance Documents, are paid to the Agent for the account of the Agent alone orspecifically for the account of the Swap Provider or of one or more Lenders) and untilso paid such amount shall be held
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   by the Agent on trust absolutely for that Lender or the Swap Provider (as the casemay be).  15.15 **Reimbursement**The Agent shall have no liability to pay any sum to a Lenderor the Swap Provider (as the case may be) until it has itself received payment of thatsum. If, however, the Agent does pay any sum to a Lender or the Swap Provider (as thecase may be) on account of any amount prospectively due to that Lender or the SwapProvider (as the case may be) pursuant to Clause 15.14 before it has itself receivedpayment of that amount, and the Agent does not in fact receive payment within five (5)Business Days after the date on which that payment was required to be made by the termsof the Finance Documents, that Lender or the Swap Provider (as the case may be) will,on demand by the Agent, refund to the Agent an amount equal to the amount received byit, together with an amount sufficient to reimburse the Agent for any amount which theAgent may certify that it has been required to pay by way of interest on money borrowedto fund the amount in question during the period beginning on the date on which thatamount was required to be paid by the terms of the Finance Documents and ending on thedate on which the Agent receives reimbursement.  15.16 **Redistribution of payments**Unless otherwise agreed between the FinanceParties, if at any time a Finance Party receives or recovers by way of set-off, theexercise of any lien or otherwise from any Security Party, an amount greater than thatFinance Party’s entitlement to any sum due from that Security Party under the FinanceDocuments (the amount of the excess being referred to in this Clause 15.16 and inClause 15.17 as the “**Excess Amount**”) then: 15.16.1 that Finance Party shall promptly notify the Agent (which shall promptlynotify each other Finance Party); 15.16.2 that Finance Party shall pay to the Agent an amount equal to the ExcessAmount within ten (10) days of its receipt or recovery of the Excess Amount;and  15.16.3 the Agent shall treat that payment as if it were a payment by the SecurityParty in question on account of the sum due from that Security Party to theFinance Party and shall account to the Finance Parties in respect of the ExcessAmount in accordance with the provisions of this Clause 15.16.
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However, if a Finance Party has commenced any legal proceedings to recover sumsowing to it under the Finance Documents and, as a result of, or in connection with,those proceedings has received an Excess Amount, the Agent shall not distribute anyof that Excess Amount to any other Finance Party which had been notified of theproceedings and had the legal right to, but did not, join those proceedings orcommence and diligently prosecute separate proceedings to enforce its rights in thesame or another court. 15.17 **Rescission of Excess Amount**If all or any part of any Excess Amount isrescinded or must otherwise be restored to any Security Party or to any other thirdparty, the Finance Parties which have received any part of that Excess Amount by way ofdistribution from the Agent pursuant to Clause 15.16 shall repay to the Agent for theaccount of the Finance Party which originally received or recovered the Excess Amount,the amount which shall be necessary to ensure that the Finance Parties share in theamount of the receipt or payment retained in accordance with the provisions of theFinance Documents, together with interest on that amount at a rate equivalent to that(if any) paid by the Lender receiving or recovering the Excess Amount to the person towhom that Lender is liable to make payment in respect of such amount, and Clause15.16.3 shall apply only to the retained amount.  15.18 **Instructions**Where the Agent is authorised or directed to act or refrainfrom acting in accordance with the instructions of the Lenders or of the MajorityLenders each of the Lenders shall provide the Agent with instructions within three (3)Business Days of the Agent’s request (which request may be made orally or in writing).If a Lender does not provide the Agent with instructions within that period, thatLender shall be bound by the decision of the Agent. Nothing in this Clause 15.18 shalllimit the right of the Agent to take, or refrain from taking, any action withoutobtaining the instructions of the Lenders or the Majority Lenders if the Agent in itsdiscretion considers it necessary or appropriate to take, or refrain from taking, suchaction in order to preserve the rights of the Lenders under or in connection with theFinance Documents. In that event, the Agent will notify the Lenders of the actiontaken by it as soon as reasonably practicable, and the Lenders agree to ratify anyaction taken by the Agent pursuant to this Clause 15.18.
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 15.19 **Payments**All amounts payable to a Lender or the Swap Provider (as the casemay be) under this Clause 15 shall be paid to such account at such bank as that Lenderor the Swap Provider (as the case may be) may from time to time direct in writing tothe Agent.  15.20 **“Know your customer” checks**Each Lender shall promptly upon the request ofthe Agent supply, or procure the supply of, such documentation and other evidence as isreasonably requested by the Agent (for itself) in order for the Agent to carry out andbe satisfied it has complied with all necessary “know your customer” or other similarchecks under all applicable laws and regulations pursuant to the transactionscontemplated in the Finance Documents.  15.21 **Resignation**Subject to a successor being appointed in accordance with thisClause 15.21, the Agent may resign as agent and/or the Security Trustee may resign assecurity agent at any time without assigning any reason by giving to the Borrowers andthe Finance Parties notice of its intention to do so, in which event the followingshall apply: 15.21.1 with the consent of the Borrowers not to be unreasonably withheld (but suchconsent not to be required at any time after an Event of Default which iscontinuing unremedied and unwaived) the Finance Parties may within thirty (30)days after the date of the notice from the Agent or the Security Trustee (asthe case may be) appoint a successor to act as agent and/or security agent or,if they fail to do so with the consent of the Borrowers, not to be unreasonablywithheld (but such consent not to be required at any time after an Event ofDefault which is continuing unremedied and unwaived), the Agent or the SecurityTrustee (as the case may be) may appoint any other bank or financialinstitution as its successor;  15.21.2 the resignation of the Agent or the Security Trustee (as the case may be)shall take effect simultaneously with the appointment of its successor onwritten notice of that appointment being given to the Borrowers and the FinanceParties;
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 15.21.3 the Agent or the Security Trustee (as the case may be) shall thereupon bedischarged from all further obligations as agent and/or security agent butshall remain entitled to the benefit of the provisions of this Clause 15; and  15.21.4 the successor of the Agent or the Security Trustee (as the case may be) andeach of the other parties to this Agreement shall have the same rights andobligations amongst themselves as they would have had if that successor hadbeen a party to this Agreement. 15.22 **No fiduciary relationship**Except as provided in Clauses 15.3 and 15.14, theAgent shall not have any fiduciary relationship with or be deemed to be a trustee of orfor any other person and nothing contained in any Finance Document shall constitute apartnership between any two or more Finance Parties or between the Agent and any otherperson.**16 Set-Off** 16.1 **Set-off**A Finance Party may set off any matured obligation due from theBorrowers under any Finance Document (to the extent beneficially owned by that FinanceParty) against any matured obligation owed by that Finance Party to the Borrowers,regardless of the place of payment, booking branch or currency of either obligation.If the obligations are in different currencies, that Finance Party may convert eitherobligation at a market rate of exchange in its usual course of business for the purposeof the set-off. 16.2 **Master Agreement Rights**The rights conferred on the Swap Provider by thisClause 16 shall be in addition to and without prejudice or limitation to the rights ofnetting and set off conferred on the Swap Provider by the Master Agreement.**17 Payments** 17.1 **Payments**Each amount payable by the Borrowers under a Finance Document shallbe paid to such account at such bank as the Agent may from time to time direct to theBorrowers in the Currency of Account and in such funds as are customary at the time forsettlement of transactions in the relevant currency in the place of payment. Paymentshall be deemed to have been received by the Agent on the date on which the Agentreceives authenticated advice of receipt, unless that advice is received by the Agenton a day other than a Business Day or at a
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   time of day (whether on a Business Day or not) when the Agent in its reasonablediscretion considers that it is impossible or impracticable for the Agent to utilisethe amount received for value that same day, in which event the payment in questionshall be deemed to have been received by the Agent on the Business Day nextfollowing the date of receipt of advice by the Agent. 17.2 **No deductions or withholdings**Each payment (whether of principal or interestor otherwise) to be made by the Borrowers under a Finance Document shall, subject onlyto Clause 17.3, be made free and clear of and without deduction for or on account ofany Taxes or other deductions, withholdings, restrictions, conditions or counterclaimsof any nature.  17.3 **Grossing-up**If at any time any law requires (or is interpreted to require)the Borrowers to make any deduction or withholding from any payment, or to change therate or manner in which any required deduction or withholding is made, the Borrowerswill promptly notify the Agent and, simultaneously with making that payment, will payto the Agent whatever additional amount (after taking into account any additional Taxeson, or deductions or withholdings from, or restrictions or conditions on, thatadditional amount) is necessary to ensure that, after making the deduction orwithholding, the relevant Finance Parties receive a net sum equal to the sum which theywould have received had no deduction or withholding been made.  17.4 **Evidence of deductions**If at any time the Borrowers are required by law tomake any deduction or withholding from any payment to be made by it under a FinanceDocument, the Borrowers will pay the amount required to be deducted or withheld to therelevant authority within the time allowed under the applicable law and will, no laterthan thirty (30) days after making that payment, deliver to the Agent an originalreceipt issued by the relevant authority, or other evidence reasonably acceptable tothe Agent, evidencing the payment to that authority of all amounts required to bededucted or withheld.  17.5 **Rebate**If a Borrower pays any additional amount under Clause 17.3, and aFinance Party subsequently receives a refund or allowance from any tax authority whichthat Finance Party identifies as being referable to that increased amount so paid bythat Borrower, that Finance Party shall, as soon as reasonably practicable, pay to thatBorrower an amount equal to the amount of the refund or allowance
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   received, if and to the extent that it may do so without prejudicing its right toretain that refund or allowance and without putting itself in any worse financialposition than that in which it would have been had the relevant deduction orwithholding not been required to have been made. Nothing in this Clause 17.5 shallbe interpreted as imposing any obligation on any Finance Party to apply for anyrefund or allowance nor as restricting in any way the manner in which any FinanceParty organises its tax affairs, nor as imposing on any Finance Party any obligationto disclose to the Borrowers any information regarding its tax affairs or taxcomputations.  17.6 **Adjustment of due dates**If any payment or transfer of funds to be made undera Finance Document, other than a payment of interest on a Drawing, shall be due on aday which is not a Business Day, that payment shall be made on the next succeedingBusiness Day (unless the next succeeding Business Day falls in the next calendar monthin which event the payment shall be made on the next preceding Business Day). Any suchvariation of time shall be taken into account in computing any interest in respect ofthat payment. 17.7 **Control Account**The Agent shall open and maintain on its books a controlaccount in the name of the Borrowers showing the advance of the Facility and thecomputation and payment of interest and all other sums due under this Agreement. TheBorrowers’ obligations to repay the Facility and to pay interest and all other sums dueunder this Agreement shall be evidenced by the entries from time to time made in thecontrol account opened and maintained under this Clause 17.7 and those entries will, inthe absence of manifest error, be conclusive and binding.**18 Notices** 18.1 **Communications in writing**Any communication to be made under or in connectionwith this Agreement shall be made in writing and, unless otherwise stated, may be madeby fax or letter or (subject to Clause 18.6) electronic mail. 18.2 **Addresses**The address and fax number (and the department or officer, if any,for whose attention the communication is to be made) of each party to this Agreementfor any communication or document to be made or delivered under or in connection withthis Agreement are:
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 18.2.1 in the case of the Borrowers, c/o Teekay Shipping (Canada) Ltd Suite 2000,Bentall 5, 550 Burrard Street, Vancouver, B.C., Canada V6C 2K2 (fax no: +1 604681 3011) marked for the attention of Vice President, Finance;  18.2.2 in the case of each Lender, those appearing opposite its name in Schedule 1;  18.2.3 in the case of the Agent, 437 Madison Avenue, New York, New York 10022,United States of America (fax no: +1 212 421 4420) marked for the attention ofShipping-Offshore and Oil Services Group; and  18.2.4 in the case of the Security Trustee, 437 Madison Avenue, New York, New York10022, United States of America (fax no: + 1 212 421 4420) marked for theattention of Shipping-Offshore and Oil Services Group;  18.2.5 in the case of the Swap Provider, Gerhart-Hauptmann-Platz 50, 20095 Hamburg,(fax no: +49 40 3333 34307) marked for the attention of Hugh Baker/FraukeHay/Fiorina Riccobono and to Zinsderivateabwicklung OE 3652 (fax no: +49 403333 34086);or any substitute address, fax number, department or officer as any party may notifyto the Agent (or the Agent may notify to the other parties, if a change is made bythe Agent) by not less than five (5) Business Days’ notice. 18.3 **Delivery**Any communication or document made or delivered by one party to thisAgreement to another under or in connection this Agreement will only be effective: 18.3.1 if by way of fax, when received in legible form; or  18.3.2 if by way of letter, when it has been left at the relevant address or five(5) Business Days after being deposited in the post postage prepaid in anenvelope addressed to it at that address; or  18.3.3 if by way of electronic mail, in accordance with Clause 18.6;and, if a particular department or officer is specified as part of its addressdetails provided under Clause 18.2, if addressed to that department or officer.
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Any communication or document to be made or delivered to the Agent will be effectiveonly when actually received by the Agent.All notices from or to the Borrowers shall be sent through the Agent. 18.4 **Notification of address and fax number**Promptly upon receipt of notificationof an address, fax number or change of address, pursuant to Clause 18.2 or changing itsown address or fax number, the Agent shall notify the other parties to this Agreement.  18.5 **English language**Any notice given under or in connection with this Agreementmust be in English. All other documents provided under or in connection with thisAgreement must be:     18.5.1 in English; or 18.5.2 if not in English, and if so required by the Agent, accompanied by acertified English translation and, in this case, the English translation willprevail unless the document is a constitutional, statutory or other officialdocument. 18.6 **Electronic communication** (a) Any communication to be made in connection with this Agreementmay be made by electronic mail or other electronic means, if the Borrowers andthe relevant Finance Party: (i) agree that, unless and until notified to thecontrary, this is to be an accepted form of communication;  (ii) notify each other in writing of theirelectronic mail address and/or any other information required to enablethe sending and receipt of information by that means; and  (iii) notify each other of any change to theiraddress or any other such information supplied by them. (b) Any electronic communication made between the Borrowers and therelevant Finance Party will be effective only when actually received in
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   readable form and acknowledged by the recipient (it being understood thatany system generated responses do not constitute an acknowledgement) and inthe case of any electronic communication made by the Borrowers to a FinanceParty only if it is addressed in such a manner as the Finance Party shallspecify for this purpose.**19 Partial Invalidity**If, at any time, any provision of a Finance Document is or becomes illegal, invalid orunenforceable in any respect under any law of any jurisdiction, neither the legality,validity or enforceability of the remaining provisions nor the legality, validity orenforceability of such provision under the law of any other jurisdiction will in any way beaffected or impaired.**20 Remedies and Waivers**No failure to exercise, nor any delay in exercising, on the part of any Finance Party, anyright or remedy under a Finance Document shall operate as a waiver, nor shall any single orpartial exercise of any right or remedy prevent any further or other exercise or theexercise of any other right or remedy. The rights and remedies provided in this Agreementare cumulative and not exclusive of any rights or remedies provided by law.**21 Joint and several liability; liability of Hugli** 21.1 **Nature of liability of the A Borrowers**The representations, warranties,covenants, obligations and undertakings of the A Borrowers contained in this Agreementshall be joint and several so that each A Borrower shall be jointly and severallyliable with all the A Borrowers (including any Collateral Transfer Borrowers thatbecome A Borrowers) for all of the same and such liability shall not in any way bedischarged, impaired or otherwise affected by: 21.1.1 any forbearance (whether as to payment or otherwise) or any time or otherindulgence granted to any other A Borrower or any other Security Party under orin connection with any Finance Document;  21.1.2 any amendment, variation, novation or replacement of any other FinanceDocument;
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 21.1.3 any failure of any Finance Document to be legal valid binding and enforceablein relation to any other A Borrower or any other Security Party for any reason;  21.1.4 the winding-up or dissolution of any other A Borrower or any other SecurityParty;  21.1.5 the release (whether in whole or in part) of, or the entering into of anycompromise or composition with, any other A Borrower or any other SecurityParty; or  21.1.6 any other act, omission, thing or circumstance which would or might, but forthis provision, operate to discharge, impair or otherwise affect suchliability. 21.2 **No rights as surety**Until the Tranche A Indebtedness has been unconditionallyand irrevocably paid and discharged in full, each A Borrower agrees that it shall not,by virtue of any payment made under this Agreement on account of the Indebtedness or byvirtue of any enforcement by a Finance Party of its rights under this Agreement or byvirtue of any relationship between, or transaction involving, the relevant A Borrowerand any other A Borrower or any other Security Party: 21.2.1 exercise any rights of subrogation in relation to any rights, security ormoneys held or received or receivable by a Finance Party or any other person;or  21.2.2 exercise any right of contribution from any other A Borrower or any otherSecurity Party under any Finance Document; or  21.2.3 exercise any right of set-off or counterclaim against any other A Borrower orany other Security Party; or  21.2.4 receive, claim or have the benefit of any payment, distribution, security orindemnity from any other A Borrower or any other Security Party; or  21.2.5 unless so directed by the Agent (when the relevant A Borrower will prove inaccordance with such directions), claim as a creditor of any other A
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   Borrower or any other Security Party in competition with any Finance Partyand each A Borrower shall hold in trust for the Finance Parties and forthwith pay ortransfer (as appropriate) to the Agent any such payment (including an amount equalto any such set-off), distribution or benefit of such security, indemnity or claimin fact received by it. 21.3 **Nature of liability of the B Borrowers**The representations, warranties,covenants, obligations and undertakings of the B Borrowers contained in this Agreementshall be joint and several so that each B Borrower shall be jointly and severallyliable with all the B Borrowers for all of the same and such liability shall not in anyway be discharged, impaired or otherwise affected by: 21.3.1 any forbearance (whether as to payment or otherwise) or any time or otherindulgence granted to any other B Borrower or any other Security Party under orin connection with any Finance Document;  21.3.2 any amendment, variation, novation or replacement of any other FinanceDocument;  21.3.3 any failure of any Finance Document to be legal valid binding and enforceablein relation to any other B Borrower or any other Security Party for any reason;  21.3.4 the winding-up or dissolution of any other B Borrower or any other SecurityParty;  21.3.5 the release (whether in whole or in part) of, or the entering into of anycompromise or composition with, any other B Borrower or any other SecurityParty; or  21.3.6 any other act, omission, thing or circumstance which would or might, but forthis provision, operate to discharge, impair or otherwise affect suchliability. 21.4 **No rights as surety**Until the Tranche B Indebtedness has been unconditionallyand irrevocably paid and discharged in full, each B Borrower agrees that it shall not,by virtue of any payment made under this Agreement on account of the
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   Indebtedness or by virtue of any enforcement by a Finance Party of its rights underthis Agreement or by virtue of any relationship between, or transaction involving,the relevant B Borrower and any other B Borrower or any other Security Party: 21.4.1 exercise any rights of subrogation in relation to any rights, security ormoneys held or received or receivable by a Finance Party or any other person;or  21.4.2 exercise any right of contribution from any other B Borrower or any otherSecurity Party under any Finance Document; or  21.4.3 exercise any right of set-off or counterclaim against any other B Borrower orany other Security Party; or  21.4.4 receive, claim or have the benefit of any payment, distribution, security orindemnity from any other B Borrower or any other Security Party; or  21.4.5 unless so directed by the Agent (when the relevant B Borrower will prove inaccordance with such directions), claim as a creditor of any other B Borroweror any other Security Party in competition with any Finance Partyand each B Borrower shall hold in trust for the Finance Parties and forthwith pay ortransfer (as appropriate) to the Agent any such payment (including an amount equalto any such set-off), distribution or benefit of such security, indemnity or claimin fact received by it. 21.5 **Liability of Hugli**It is acknowledged and agreed that Hugli shall only becomeliable as a Borrower hereunder as and with effect from the Tranche B Step Up Date.Prior to the Tranche B Step Up Date, notwithstanding anything to the contrary in theFinance Documents, it shall have no liability thereunder, but shall assume all suchliabilities as and with effect from the Tranche B Step Up Date.**22 Miscellaneous** 22.1 **No oral variations**No variation or amendment of a Finance Document shall bevalid unless in writing and signed on behalf of all the Finance Parties.
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 22.2 **Further Assurance**If any provision of a Finance Document shall be invalid orunenforceable in whole or in part by reason of any present or future law or anydecision of any court, or if the documents at any time held by or on behalf of theFinance Parties or any of them are considered by the Lenders for any reasoninsufficient to carry out the terms of this Agreement, then from time to time theBorrowers will promptly, on demand by the Agent, execute or procure the execution ofsuch further documents as in the opinion of the Lenders are necessary to provideadequate security for the repayment of the Indebtedness.  22.3 **Rescission of payments etc.**Any discharge, release or reassignment by aFinance Party of any of the security constituted by, or any of the obligations of aSecurity Party contained in, a Finance Document shall be (and be deemed always to havebeen) void if any act (including, without limitation, any payment) as a result of whichsuch discharge, release or reassignment was given or made is subsequently wholly orpartially rescinded or avoided by operation of any law.  22.4 **Certificates**Any certificate or statement signed by an authorised signatoryof the Agent purporting to show the amount of the Indebtedness (or any part of theIndebtedness) or any other amount referred to in any Finance Document shall, save formanifest error or on any question of law, be conclusive evidence as against theBorrowers of that amount.  22.5 **Counterparts**This Agreement may be executed in any number of counterpartseach of which shall be original but which shall together constitute the sameinstrument.  22.6 **Contracts (Rights of Third Parties) Act 1999**A person who is not a party tothis Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 toenforce or to enjoy the benefit of any term of this Agreement.  22.7 **Disclosure of Information**In addition to the disclosure of informationpermitted under Clause 14.2, each of the Borrowers authorises each Lender to discloseany information and/or document(s) concerning its relationship with such Lender (i) toauthorities in any other countries where such Lender or any Affiliate is representedand/or where any Lender or any Affiliate may be requested information by any regulatoryauthority, when this shall be deemed necessary in order for such Lender or anyAffiliate to meet its requirements for the
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   contribution to reduction or prevention of money laundering, terrorism andcorruption, and (ii) to any Affiliate of that Lender making it possible toconsolidate the client’s total commitments and offer the client any other productsoffered by that Lender or any Affiliate, subject always to the duties ofconfidentiality on the Lenders set out herein.**23 Law and Jurisdiction** 23.1 **Governing law**This Agreement shall in all respects be governed by andinterpreted in accordance with English law.  23.2 **Jurisdiction**For the exclusive benefit of the Finance Parties, the parties tothis Agreement irrevocably agree that the courts of England are to have jurisdiction tosettle any disputes which may arise out of or in connection with this Agreement andthat any proceedings may be brought in those courts.  23.3 **Alternative jurisdictions**Nothing contained in this Clause 23 shall limit theright of the Finance Parties to commence any proceedings against the Borrowers in anyother court of competent jurisdiction nor shall the commencement of any proceedingsagainst the Borrowers in one or more jurisdictions preclude the commencement of anyproceedings in any other jurisdiction, whether concurrently or not.  23.4 **Waiver of objections**Each of the Borrowers irrevocably waives any objectionwhich it may now or in the future have to the laying of the venue of any proceedings inany court referred to in this Clause 23, and any claim that those proceedings have beenbrought in an inconvenient or inappropriate forum, and irrevocably agrees that ajudgment in any proceedings commenced in any such court shall be conclusive and bindingon it and may be enforced in the courts of any other jurisdiction.  23.5 **Service of process**Without prejudice to any other mode of service allowedunder any relevant law, each of the Borrowers: 23.5.1 irrevocably appoints Teekay Shipping (UK) Ltd of 2nd Floor, 86Jermyn Street, London SW1Y 6JD England as its agent for service of process inrelation to any proceedings before the English courts in connection with thisAgreement; and
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 23.5.2 agrees that failure by a process agent to notify the Borrowers of the processwill not invalidate the proceedings concerned.
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**SCHEDULE 1: The Lenders and the Commitments****Tranche A**     **The Lenders** **The**  **Commitments**  **(US$)**     **Citibank N.A., London Branch**  18,970,414 Citigroup Centre    33 Canada Square    Canary Wharf    London E14 5LB         *For credit matters:*    Attention: Simon Booth    Fax no: +44 20 7098 4327    Email: simon.booth@citi.com         *For administration matters:*    Attention: Lee Boden/Rob Brodie    Fax no: +44 20 7942 7512    Email: lee.boden@citi.com / rob.brodie@citi.com         **ING Bank N.V., London branch**  18,970,414 60 London Wall,    London EC2M 5TQ         *For credit matters:*    Attention: Adam Byrne / Robartus Krol    Fax no: +44 20 7767 7252    Email: adam.byrne@uk.ing.com                robartus.krol@uk.ing.com         *For administration matters:*    Attention: Samantha Joyce / Ian Tofts    Fax no: +44 20 7767 7324    Email: samantha.joyce@uk.ing.com                ian.tofts@uk.ing.com         **Nordea Bank Norge ASA, Grand Cayman branch**  18,970,414 437 Madison Avenue    New York    NY 10022    USA         *For credit matters:*    Attention: Hans Kjelsrud/Colleen Durkin    Fax no: +1 212 318 4420    Email: hans.kjelsrud@nordea.com                colleen.durkin@nordea.com    
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     *For administration matters:*    Attention: Jacqueline Ng/Sonia Earle    Fax no: +1 212 318 9578/9596    Email: jackie.ng@nordea.com         **BNP Paribas**  18,970,414 Nordic Shipping Desk    Karl Johans Gate 7    P.O. Box 106 Sentrum    No-0102 Oslo    Norway         *For credit matters:*    Attention: Pierre de Fontenay/Patrik Hofseth    Fax no: +47 22 82 95 67    Email: pierre.defontenay@bnpparibas.com                patrik.hofseth@bnpparibas.com         *For administration matters:*    Attention: Tove Brandt    Fax no: +47 22 82 95 11    Email: tove.brandt@bnpparibas.com         **Fokus Bank**(being the Norwegian branch of Danske Bank A/S)  18,970,414 PO Box 1170 Sentrum    N-0107 Oslo    Norway         Attention: Shipping Dept    Fax no: +47 85 40 7990    Email: shippingoffshore@fokus.no         **HSH Nordbank AG**  18,970,414 Shipping Department    West European & North American Clients    Gerhart-Hauptmann-Platz 50    20095 Hamburg         *For credit matters:*    Attention: Hugh Baker / Frauke Hay /    Fiorina Riccobono    Fax no: +49 40 3333 34307    Email: hugh.baker@hsh-nordbank.com                frauke.hay@hsh-nordbank.com                fiorina.riccobono@hsh-nordbank.com         *For administration matters:*    Attention: Martina Timm    Fax no: +49 40 3333-34307    Email: martina.timm@hsh-nordbank.com    
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     **KfW**  17,615,385 Palmengartenstrasse 5-9    60325 Frankfurt am Main    Germany         *For credit matters*.    Attention: Klaus Benkau    Fax no: +49 69 7431 9413    Email: klaus.benkau@kfw.de         *For administration matters*:    Attention: Jasmine Ross    Fax no: +49 69 7431 3768    Email: jasmine.ross@.kfw.de         **Morgan Stanley Bank**  17,615,385 2500 Lake Park Blvd., Suite 300 C    West Valley City    Utah 84120    USA         *For credit matters*:    Attention: Edward Henley/Alice Lee    Fax no: 001 718 754 7250    Email: edward.henley@morganstanley.com                alice.lee@morganstanley.com         *For administration matters:*    Attention: Martin Telford/Ly Dinh    Fax no: 001 718 233 2140    Email: ldnnyservicing@morganstanley.com         **Scotiabank Europe plc**  13,279,290  *For credit matters:*    33 Finsbury Square    London EC2A 1BB    United Kingdom         Attention: David Sparkes/Thomas Erichsen    Fax no: +44 207 454 9019    Email: david_sparkes@scotiacapital.com                thomas_erichsen@scotiacapital.com         For administration matters    720 King Street    West Toronto    Canada         Attention: Savi Rampat/Tony Sposato    Fax no: +44 207 826 5666    Email: savi_rampat@scotiacapital.com    
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     tony_sposato@scotiacapital.com         **Deutsche Bank AG, Filiale Deutschland**  13,279,290 **Geschäft**    Ludwig Erhard Str.1    20459 Hamburg    Germany         *For credit matters:*    Attention: Jörg Zickermann/Kerstin Seefeld    Fax no: + 49 40 3701 46049    Email: joerg.zickermann@db.com                kerstin.seefeld@db.com         *For administration matters*.    Attention: Anja Eggert    Fax no: +49 40 3701 4649    Email: anja.eggert@db.com         **Lloyds TSB Bank plc**  13,279,290  *For credit matters:*    10 Gresham Street    London EC2V 7EA    United Kingdom    Attention: Shelley Morrison/Tony Stevens    Fax no: +44 207 158 3273/3271    Email: shelly.morrison@lloydstsb.co.uk                tony.stevens@lloydstsb.co.uk         *For administration matters:*    Bank House    Wine Street    Bristol, BSI 2AN    Fax no: +44 207 158 3204    Email: LoansAdmin_s-z@lloydstsb.co.uk         **Sumitomo Mitsui Banking**  13,279,290 **Corporation, Brussels Branch**     *For credit matters:*    99 Queen Victoria Street    London EC4V 4EH    United Kingdom    Attention: Simon Murrell/Robert Taylor    Fax No: +44 207 786 101    Email: simon_murrell@gb.smbcgroup.com                robert_taylor@gb.smbcgroup.com         with copy to:         20, rue de la Ville l’Eveque    
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     75008 Paris    France    Attention: Guillaume Dufour/Gwenael Delattre    Fax No: +33 1 44 71 40 50    Email: guillaume_dufour@fr.smbcgroup.com                gwenael_delattre@fr.smbcgroup.com         and         Avenue des Arts 58, Box 18    1000 Brussels    Belgium    Attention: Francoise Bouchat/Nadine Boudart    Fax No: +32 2 502.07.80    Email: francoise_bouchat@be.smbcgroup.com                nadine_boudart@be.smbcgroup.com         *For administration matters:*         European Loan Operations    Attention: David Griffiths/Jo Dunnage    99 Queen Victoria Street    London EC4V 4EH    Fax: + 44 207 786 1569    (fax correspondence only)         **Swedbank AB (publ)**  13,279,290 Brukebergstorg 8    SE 105 34 Stockholm    Sweden     *Contact credit and legal matters:*    Swedbank AB (publ)    Marine Finance, E421    Regeringsgatan 13    SE 105 34, Stockholm, Sweden    Attention: Dagobert Billsten/Karin Nilsson    Fax No: +46 8 723 7150    Emails: dagobert.billsten@swedbank.se                karin.nilsson@swedbank.se         *Contact, administrative matters:*    Swedbank AB (publ)    Marine Finance Credit Administration, E768    Regeringsgatan 13    SE 105 34, Stockholm, Sweden    Attention: Nina Kyttä / Richard Lönnqvist    Fax No.: +46 8 700 8132    Email: creditadmin@swedbank.se    
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     **Alliance & Leicester Commercial**  8,130,178 **Finance plc**    Carlton Park, Narborough    Leicester    LE19 0AL    United Kingdom         *For credit matters:*    3rd Floor, 120 New Cavendish Street    London W1W 6XX    Attention: James MacDonald/                Harminder Randhawa    Fax no: +44 207 907 3664    Email: james.macdonald@alliance-leicester.co.uk                harminder.randhawa@alliance-leicester.co.uk         *For administration matters:*    298 Deansgate    Manchester M3 4HH    Attention: Keith Sullivan/Shane Shehade    Fax no: +44 161 953 3517    Email: keith.sullivan@alliance-leicester.co.uk                shane.shehade@alliance-leicester.co.uk         **Calyon**  5,420,118 *For administration matters:*    9. Quai, du President Paul Doumer    92920 Paris La Defense    France    Fax no: +33 141 89 19 34    Attention: Middle Office/Shipping/    M. Godet-Couery/Ms Regine Maugin/Ms Marie-Claire Vanderperre    Email: sylvie.godetcouery@calyon.com                regine.maugin@calyon.com       marieclaire.vanderperre@calyon.com         *For credit matters:*    Broadwalk House    5 Appold Street    London EC2A 2DA    Fax no: +44 207 214 6689    Attention: Thiband Escoffier/Jerome Duval    Email: thibaud.escoffier@uk.calyon.com                jerome.duval@uk.calyon.com    Total  229,000,000 
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**Tranche B**       **The****The Lenders** **Commitments**  **(US$)**     **Citibank N.A., London Branch**  51,029,586 Citigroup Centre    33 Canada Square    Canary Wharf    London E14 5LB         *For credit matters:*    Attention: Simon Booth    Fax no: +44 20 7098 7327    Email: simon.booth@citi.com         *For administration matters:*    Attention: Lee Boden/Rob Brodie    Fax no: +44 20 7942 7512    Email: lee.boden@citi.com / rob.brodie@citi.com         **ING Bank N.V., London branch**  51,029,586 60 London Wall,    London EC2M 5TQ     *For credit matters:*    Attention: Adam Byrne / Robartus Krol    Fax no: +44 20 7767 7252    Email: adam.byrne@uk.ing.com                Robartus.krol@uk.ing.com     *For administration matters:*    Attention: Samantha Joyce / Ian Tofts    Fax no: +44 20 7767 7324    Email: samantha.joyce@uk.ing.com                ian.tofts@uk.ing.com         **Nordea Bank Norge ASA, Grand Cayman branch**  51,029,586 437 Madison Avenue    New York    NY 10022    USA         *For credit matters:*    Attention: Hans Kjelsrud/Colleen Durkin    Fax no: +1 212 318 4420    Email: hans.kjelsrud@nordea.com                colleen.durkin@nordea.com    *For administration matters:*         Attention: Jacqueline Ng/Sonia Earle    
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     Fax no: +1 212 318 9578/9596    Email: jackie.ng@nordea.com         **BNP Paribas**  51,029,586 Nordic Shipping Desk    Karl Johans Gate 7    P.O. Box 106 Sentrum    No-0102 Oslo    Norway         *For credit matters:*    Attention: Pierre de Fontenay/Patrik Hofseth    Fax no: +47 22 82 95 67    Email: pierre.defontenay@bnpparibas.com                patrik.hofseth@bnpparibas.com         *For administration matters:*    Attention: Tove Brandt    Fax no: +47 22 82 95 11    Email: tove.brandt@bnpparibas.com         **Fokus Bank**(being the Norwegian branch of Danske Bank A/S)  51,029,586 PO Box 1170 Sentrum    N-0107 Oslo    Norway         Attention: Shipping Dept    Fax no: +47 85 40 7990    Email: shippingoffshore@fokus.no         **HSH Nordbank AG**  51,029,586 Shipping Department    West European & North American Clients    Gerhart-Hauptmann-Platz 50    20095 Hamburg         *For credit matters:*    Attention: Hugh Baker / Frauke Hay /    Fiorina Riccobono    Fax no: +49 40 3333 34307    Email: hugh.baker@hsh-nordbank.com                frauke.hay@hsh-nordbank.com                fiorina.riccobono@hsh-nordbank.com         *For administration matters:*    Attention: Martina Timm    Fax no: +49 40 3333-34307    Email: martina.timm@hsh-nordbank.com    
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     **KfW**  47,384,615 Palmengartenstrasse 5-9    60325 Frankfurt am Main    Germany         *For credit matters*.    Attention: Klaus Benkau    Fax no: +49 69 7431 9413    Email: klaus.benkau@kfw.de         *For administration matters*:    Attention: Jasmine Ross    Fax no: +49 69 7431 3768    Email: jasmine.ross@.kfw.de         **Morgan Stanley Bank**  47,384,615 2500 Lake Park Blvd., Suite 300 C    West Valley City    Utah 84120    USA         *For credit matters*:    Attention: Edward Henley/Alice Lee    Fax no: 001 718 754 7250    Email: edward.henley@morganstanley.com                alice.lee@morganstanley.com         *For administration matters:*    Attention: Martin Telford/Ly Dinh    Fax no: 001 718 233 2140    Email: ldnnyservicing@morganstanley.com         **Scotiabank Europe plc**  35,720,710  *For credit matters:*    33 Finsbury Square    London EC2A 1BB    United Kingdom         Attention: David Sparkes/Thomas Erichsen    Fax no: +44 207 454 9019    Email: david_sparkes@scotiacapital.com                thomas_erichsen@scotiacapital.com         *For administration matters:*    720 King Street    West Toronto    Canada         Attention: Savi Rampat/Tony Sposato    Fax no: +44 207 826 5666    Email: savi*.*rampat@scotiacapital.com    
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     tony.sposato@scotiacapital.com     **Deutsche Bank AG, Filiale Deutschland**  35,720,710 Geschäft    Ludwig Erhard Str.1    20459 Hamburg    Germany         *For credit matters:*    Attention: Jörg Zickermann/Kerstin Seefeld    Fax no: + 49 40 3701 4649    Email: joerg.zickermann@db.com                kerstin.seefeld@db.com         *For administration matters*.    Attention: Anja Eggert    Fax no: +49 40 3701 4649    Email: anja.eggert@db.com         **Lloyds TSB Bank plc**  35,720,710      *For credit matters:*    10 Gresham Street    London EC2V 7EA    United Kingdom    Attention: Shelley Morrison/Tony Stevens    Fax no: +44 207 158 3273/3271    Email: shelly.morrison@lloydstsb.co.uk                tony.stevens@lloydstsb.co.uk         *For administration matters:*    Bank House    Wine Street    Bristol, BSI 2AN    Fax no: +44 207 158 3204    Email: LoansAdmin_s-z@lloydstsb.co.uk         **Sumitomo Mitsui Banking**  35,720,710 **Corporation, Brussels Branch**         *For credit matters:*    99 Queen Victoria Street    London EC4V 4EH    United Kingdom    Attention: Simon Murrell/Robert Taylor    Fax No: +44 207 786 101    Email: simon_murrell@gb.smbcgroup.com                robert_taylor@gb.smbcgroup.com         with copy to:         20, rue de la Ville l’Eveque    
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     75008 Paris    France    Attention: Guillaume Dufour/Gwenael Delattre    Fax No: +33 1 44 71 40 50    Email: guillaume_dufour@fr.smbcgroup.com                gwenael_delattre@fr.smbcgroup.com         and         Avenue des Arts 58, Box 18    1000 Brussels    Belgium    Attention: Francoise Bouchat/Nadine Boudart    Fax No: +32 2 502.07.80    Email: francoise_bouchat@be.smbcgroup.com                nadine_boudart@be.smbcgroup.com         *For administration matters:*         European Loan Operations    Attention: David Griffiths/Jo Dunnage    99 Queen Victoria Street    London EC4V 4EH    Fax: + 44 207 786 1569    (fax correspondence only)         **Swedbank AB (publ)**  35,720,710 Brukebergstorg 8    SE 105 34 Stockholm    Sweden         *Contact credit and legal matters:*    Swedbank AB (publ)    Marine Finance, E421    Regeringsgatan 13    SE 105 34, Stockholm, Sweden    Dagobert Billsten/Karin Nilsson    Fax No: +46 8 723 7150    Emails: dagobert.billsten@swedbank.se                karin.nilsson@swedbank.se         *Contact, administrative matters:*    Swedbank AB (publ)    Marine Finance Credit Administration, E768    Regeringsgatan 13    SE 105 34, Stockholm, Sweden    Nina Kyttä / Richard Lönnqvist    Fax No.: +46 8 700 8132    Email: creditadmin@swedbank.se    
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     **Alliance & Leicester Commercial**  21,869,822 **Finance plc**    Carlton Park, Narborough    Leicester, LE19 OAL    United Kingdom         *For credit matters:*    3rd Floor,    120 New Cavendish Street    London W1W 6XX         Attention: James MacDonald/Harminder Randhawa    Fax no: +44 207 907 3664    Email: james.macdonald@alliance-leicester.co.uk                harminder.randhawa@alliance-leicester.co.uk         *For administration matters:*    298 Deansgate    Manchester M3 4HH     Attention: Keith Sullivan/Shane Shehade    Fax no: +44 161 953 3517    Email: keith.sullivan@alliance-leicester.co.uk                shane.shehade@alliance-leicester.co.uk         **Calyon**  14,579,882 *For administration matters:*    9. Quai, du President Paul Doumer    92920 Paris La Defense    France    Fax no: +33 141 89 19 34    Attention: Middle Office/Shipping/    M. Godet-Couery/Ms Regine Maugin/Ms Marie-Claire Vanderperre    Email: sylvie.godetcouery@calyon.com    regine.maugin@calyon.com    marieclaire.vanderperre@calyon.com         *For credit matters:*    Broadwalk House    5 Appold Street    London EC2A 2DA    Fax no: +44 207 214 6689    Attention: Thiband/Escoffier/Jerome Duval    Email: thiband.escoffier@uk.calyon.com    jerome.duval@uk.calyon.com    Total  616,000,000 
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**SCHEDULE 2: The Borrowers and the Vessels****PART I**                               **Market**                **Value (in $**                **millions)**                **(as of** **Relevant**    **Tranche A**         **November** **Share (as a**    **Borrower** **Vessel Name** **Year Built** **Ship Type** **2007)** **percentage)** **Flag** **Pledgor**Everest SpiritHolding L.L.C. Everest Spirit  2004  Aframax  71.00   17.03057  Bahamas Everest Spirit L.L.C.                     Kanata SpiritHolding L.L.C. Kanata Spirit  1999  Aframax  63.00   15.28384  Bahamas Kanata Spirit L.L.C.                     Kareela SpiritHolding L.L.C. Kareela Spirit  1999  Aframax  63.00   15.28384  Bahamas Kareela Spirit L.L.C.                     Kyeema SpiritHolding L.L.C. Kyeema Spirit  1999  Aframax  63.00   15.28384  Bahamas Kyeema Spirit L.L.C.                     Nassau SpiritHolding L.L.C. Nassau Spirit  1998  Aframax  60.75   14.41049  Bahamas Nassau Spirit L.L.C.                     Falster SpiritHolding L.L.C. Falster Spirit  1995  Aframax  48.00   11.35371  Bahamas Falster Spirit L.L.C.                     Sotra SpiritHolding L.L.C. Sotra Spirit  1995  Aframax  48.00   11.35371  Bahamas Sotra Spirit L.L.C.
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**PART II**                             **Market**              **Value (in $**              **millions) (as**              **of** **Relevant**  **Tranche B**         **November** **Share (as a**  **Borrower** **Vessel Name** **Year Built** **Ship Type** **2007)** **percentage)** **Flag**Godavari SpiritL.L.C. Godavari Spirit ex Angelica  2004  Suezmax  98.00   9.57792  Bahamas                   Iskmati SpiritL.L.C. Iskmati Spirit ex Arlene  2003  Suezmax  96.00   9.41558  Bahamas                   Ashkini SpiritL.L.C. Ashkini Spirit ex Ingeborg  2003  Suezmax  96.00   9.41558  Bahamas                   Narmada SpiritL.L.C. Narmada Spirit ex Adair  2003  Suezmax  96.00   9.41558  Bahamas                   Kaveri Spirit L.L.C. Kaveri Spirit ex Janet  2004  Suezmax  98.00   9.57792  Bahamas                   Ganges Spirit L.L.C. Ganges Spirit ex Delaware  2002  Suezmax  94.00   9.09091  Bahamas                   Yamuna Spirit L.L.C. Yamuna Spirit ex Dakota  2002  Suezmax  94.00   9.09091  Bahamas                   Luit Spirit L.L.C. Luit Spirit ex Lauren  2005  MR Product Tanker  55.25   5.35715  Bahamas                   Hugli Spirit L.L.C. Hugli Spirit ex Brazos  2005  MR Product Tanker  55.25   5.35715  Bahamas                   Teesta Spirit L.L.C. Teesta Spirit ex Jeanette  2004  MR Product Tanker  53.75   5.19481  Bahamas                   Mahanadi SpiritL.L.C. Mahanadi Spirit ex Guadalupe  2000  MR Product Tanker  48.00   4.70779  Bahamas                   Esther Spirit L.L.C. Esther Spirit  2004  Aframax  71.00   6.89935  Bahamas                   Axel Spirit L.L.C. Axel Spirit  2004  Aframax  71.00   6.89935  Bahamas
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**SCHEDULE 3: Conditions Precedent and Subsequent****Part I A: Conditions precedent to the First Drawdown Date for Tranche A****1** **Security Parties** (a) **Constitutional Documents**Copies of the constitutional documents of eachTranche A Security Party together with such other evidence as the Agent may reasonablyrequire that each Tranche A Security Party is duly formed or incorporated in itscountry of incorporation and remains in existence with power to enter into, and performits obligations under, the Relevant Documents to which it is or is to become a party.  (b) **Certificates of good standing**A certificate of good standing in respect ofeach Tranche A Security Party (if such a certificate can be obtained).  (c) **Board resolutions**A copy of a resolution of the board of directors of eachTranche A Security Party (or its sole member): (i) approving the terms of, and the transactions contemplated by,the Relevant Documents to which it is a party and ratifying or resolving thatit execute those Relevant Documents; and  (ii) if required authorising a specified person or persons toexecute those Relevant Documents (and all documents and notices to be signedand/or despatched under those documents) on its behalf. (d) **Officer’s certificates**A certificate of a duly authorised officer orrepresentative of each Tranche A Security Party certifying that each copy documentrelating to it specified in this Part I A of Schedule 3 is correct, complete and infull force and effect as at a date no earlier than the date of this Agreement andsetting out the names of the directors and officers of that Tranche A Security Party(or its sole member) and the proportion of shares held by each shareholder.  (e) **Powers of attorney**The notarially attested and legalised (where necessary forregistration purposes) power of attorney of each Tranche A Security Party under whichany documents are to be executed or transactions undertaken by that Tranche A SecurityParty.
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**2** **Security and related documents** (a) **Vessel documents**In respect of each Tranche A Vessel photocopies, certifiedas true, accurate and complete by a duly authorised representative of the relevantOwner, of any relevant Management Agreement and any charter or other contract ofemployment if for a period in excess of thirty six (36) months together in each casewith all addenda, amendments or supplements.  (b) **Evidence of Owner’s title**Evidence that on the Drawdown Date (i) each of theTranche A Vessels is registered under the flag stated in Schedule 2 in the ownership ofthe relevant Owner and (ii) each of the relevant Mortgages will be capable of beingregistered against the relevant Tranche A Vessel with first priority.  (c) **Evidence of insurance**Evidence that each of the Tranche A Vessels is insuredin the manner required by the Security Documents and that letters of undertaking willbe issued in the manner required by the Security Documents, together with the writtenapproval of the Insurances by an insurance adviser appointed by the Agent.  (d) **Confirmation of class**Certificates of Confirmation of Class for hull andmachinery confirming that each of the Tranche A Vessels is classed with the highestclass applicable to vessels of her type with a Pre-Approved Classification Society.  (e) **Security Documents**The Security Documents, together with all other documentsrequired by any of them, including, without limitation, all notices of assignmentand/or charge and evidence that those notices will be duly acknowledged by therecipients.  (f) **Master Agreement**The Master Agreement together with any Credit SupportDocuments.  (g) **Other Relevant Documents**Copies of each of the Relevant Documents nototherwise comprised in the documents listed in this Part I A of Schedule 3.
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**3** **Legal opinions**   If a Tranche A Security Party is incorporated in a jurisdiction other than England and Walesor if any Finance Document is governed by the laws of a jurisdiction other than England andWales, a legal opinion of the legal advisers to the Lenders in each relevant jurisdiction,substantially in the form provided to the Agent prior to the Drawdown Date or confirmationsatisfactory to the Agent that such an opinion will be given. **4** **Other documents and evidence** (a) **Drawdown Notice**A duly completed Drawdown Notice.  (b) **Process agent**Evidence that any process agent referred to in Clause 23.5 andany process agent appointed under any other Finance Document has accepted itsappointment.  (c) **Other authorisations**A copy of any other consent, licence, approval,authorisation or other document, opinion or assurance which the Agent considers to benecessary or desirable (if it has notified the A Borrowers accordingly) in connectionwith the entry into and performance of the transactions contemplated by any of theRelevant Documents or for the validity and enforceability of any of the RelevantDocuments.  (d) **Fees**Evidence that the fees, costs and expenses then due from the Borrowersunder Clause 8 and Clause 9 (other than Clause 9.3) have been paid or will be paid bythe Drawdown Date.  (e) **“Know your customer” documents**Such documentation and other evidence as isreasonably requested by the Agent in order for the Lenders to comply with all necessary“know your customer” or similar identification procedures in relation to thetransactions contemplated in the Finance Documents.
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**Part I B: Conditions precedent to the First Drawdown Date for Tranche B****1** **Security Parties** (a) **Constitutional Documents**Copies of the constitutional documents of eachTranche B Security Party together with such other evidence as the Agent may reasonablyrequire that each Tranche B Security Party is duly formed or incorporated in itscountry of incorporation and remains in existence with power to enter into, and performits obligations under, the Relevant Documents to which it is or is to become a party.  (b) **Certificates of good standing**A certificate of good standing in respect ofeach Tranche B Security Party (if such a certificate can be obtained).  (c) **Board resolutions**A copy of a resolution of the board of directors of eachTranche B Security Party (or its sole member): (i) approving the terms of, and the transactions contemplated by,the Relevant Documents to which it is a party and ratifying or resolving thatit execute those Relevant Documents; and  (ii) if required authorising a specified person or persons toexecute those Relevant Documents (and all documents and notices to be signedand/or despatched under those documents) on its behalf. (d) **Officer’s certificates**A certificate of a duly authorised officer orrepresentative of each Tranche B Security Party certifying that each copy documentrelating to it specified in this Part I B of Schedule 3 is correct, complete and infull force and effect as at a date no earlier than the date of this Agreement andsetting out the names of the directors and officers of that Tranche B Security Party(or its sole member) and the proportion of shares held by each shareholder.  (e) **Powers of attorney**The notarially attested and legalised (where necessary forregistration purposes) power of attorney of each Tranche B Security Party under whichany documents are to be executed or transactions undertaken by that Tranche B SecurityParty.
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**2** **Security and related documents** (a) **Vessel documents**In respect of each Tranche B Vessel photocopies, certifiedas true, accurate and complete by a duly authorised representative of the relevantOwner, of any relevant Management Agreement and any charter or other contract ofemployment if for a period in excess of three (3) years together in each case with alladdenda, amendments or supplements.  (b) **Evidence of Owner’s title**Evidence that on the Drawdown Date (i) each of theTranche B Vessels is registered under the flag stated in Schedule 2 in the ownership ofthe relevant Owner and (ii) each of the relevant Mortgages will be capable of beingregistered against the relevant Tranche B Vessel with first priority.  (c) **Evidence of insurance**Evidence that each of the Tranche B Vessels is insuredin the manner required by the Security Documents and that letters of undertaking willbe issued in the manner required by the Security Documents, together with the writtenapproval of the Insurances by an insurance adviser appointed by the Agent.  (d) **Confirmation of class**Certificates of Confirmation of Class for hull andmachinery confirming that each of the Tranche B Vessels is classed with the highestclass applicable to vessels of her type with a Pre-Approved Classification Society.  (e) **Security Documents**The Security Documents, together with all other documentsrequired by any of them, including, without limitation, all notices of assignmentand/or charge and evidence that those notices will be duly acknowledged by therecipients.  (f) **Other Relevant Documents**Copies of each of the Relevant Documents nototherwise comprised in the documents listed in this Part I B of Schedule 3.**3** **Legal opinions**   If a Tranche B Security Party is incorporated in a jurisdiction other than England and Walesor if any Finance Document is governed by the laws of a jurisdiction other than England andWales, a legal opinion of the legal advisers to the Lenders in each relevant
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  jurisdiction, substantially in the form provided to the Agent prior to the Drawdown Date orconfirmation satisfactory to the Agent that such an opinion will be given.**4** **Other documents and evidence** (a) **Drawdown Notice**A duly completed Drawdown Notice.  (b) **Process agent**Evidence that any process agent referred to in Clause 23.5 andany process agent appointed under any other Finance Document has accepted itsappointment.  (c) **Other authorisations**A copy of any other consent, licence, approval,authorisation or other document, opinion or assurance which the Agent considers to benecessary or desirable (if it has notified the B Borrowers accordingly) in connectionwith the entry into and performance of the transactions contemplated by any of theRelevant Documents or for the validity and enforceability of any of the RelevantDocuments.  (d) **Fees**Evidence that the fees, costs and expenses then due from the Borrowersunder Clause 8 and Clause 9 (other than Clause 9.3) have been paid or will be paid bythe Drawdown Date.  (e) **“Know your customer” documents**Such documentation and other evidence as isreasonably requested by the Agent in order for the Lenders to comply with all necessary“know your customer” or similar identification procedures in relation to thetransactions contemplated in the Finance Documents.  (f) **Structure**Such documents and information as the Lenders may require tosatisfy themselves as to the corporate structure of the Borrowers and the Guarantors.
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**Part II: Conditions subsequent to the First Drawdown Date in respect of either Tranche A or Tranche B**1 **Evidence of Owner’s title**Certificate of ownership and encumbrance (or equivalent) issuedby the Registrar of Ships (or equivalent official) of each relevant Collateral Vessel’s flagstate confirming that (a) each of the relevant Collateral Vessels is permanently registeredunder that flag in the ownership of the relevant Owner, (b) each of the relevant Mortgages hasbeen registered with first priority against the relevant Collateral Vessel and (c) there areno further Encumbrances registered against the Collateral Vessels. 2 **Letters of undertaking**Letters of undertaking in respect of the Insurances in respect ofthe relevant Collateral Vessels as required by the Security Documents together with copies ofthe relevant policies or cover notes or entry certificates duly endorsed with the interest ofthe Finance Parties. 3 **Acknowledgements of notices**Acknowledgements of all notices of assignment and/or chargegiven pursuant to the Security Documents. 4 **Legal opinions**Such of the legal opinions specified in Part I of this Schedule 3 as havenot already been provided to the Agent. 5 **Companies Act registrations**Evidence that the prescribed particulars of the SecurityDocuments have been delivered to the Registrar of Companies of England and Wales and (whererelevant) the appropriate registry in Singapore within the statutory time limit.
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**Part III: Conditions precedent to a Collateral Transfer Date****1** **Security Parties**   A certificate from a duly authorised officer or representative of theBorrowers confirming that none of the documents delivered to the Agentpursuant to Schedule 3 Part I A or B (a), (b), (c), (d) and (e) havebeen amended or modified in any way since the date of their deliveryto the Agent. **2** **Security and related documents** (a) A confirmation from Guarantor A confirming that it guarantees the obligationsof the Collateral Transfer Borrower and the increased amount of Tranche A Indebtedness.  (b) Execution, delivery and (if applicable) registration of replacement SecurityDocuments by the Collateral Transfer Borrower and, (with respect to the Share Pledge ofany Collateral Transfer Borrower) Guarantor A (or, if requested by Guarantor A andaccepted by the Agent, a sub holding company that owns the entire issued share capitalof the relevant Collateral Transfer Borrower and which is itself a one hundred per centSubsidiary (directly or indirectly) of Guarantor A) so that the Security Documents towhich it is a party or which relate to it secure the Tranche A Indebtedness.  (c) Confirmation from the other Security Parties that (other than the release ofthe Collateral Transfer Borrower’s obligations as secured obligations under GuaranteeB, the amendment to Guarantee A referred to above and the replacement of SecurityDocuments referred to above) all of the other Security Documents remain in full forceand effect.**3** **Legal opinions**   If a Security Party is incorporated in a jurisdiction other than England and Wales or if anyFinance Document is governed by the laws of a jurisdiction other than England and Wales, alegal opinion of the legal advisers to the Lenders in each relevant jurisdiction,substantially in the form provided to the Agent prior to the Collateral Transfer Date orconfirmation satisfactory to the Agent that such an opinion will be given. **4** **Other evidence**
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  Such evidence as the Agent may reasonably require of the transfer of the shares in theCollateral Transfer Borrower from Guarantor B to Guarantor A (or to a sub holding companywhich is itself a one hundred per cent Subsidiary (directly or indirectly) of Guarantor A).
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**Part IV: Conditions subsequent to a Collateral Transfer Date**1 **Legal opinions**Such of the legal opinions specified in Part III of this Schedule 3 as havenot already been provided to the Agent. 2 **Companies Act registrations**Evidence that the prescribed particulars of the SecurityDocuments have been delivered to the Registrar of Companies of England and Wales and (whererelevant) the appropriate registry in Singapore within the statutory time limit. 3 **Evidence of mortgage registration**Certificate of ownership and encumbrance (or equivalent)issued by the Registrar of Ships (or equivalent official) of the relevant Collateral Vessel’sflag state confirming that the relevant Mortgage has been registered with first priorityagainst the relevant Collateral Vessel and that there are no further Encumbrances registeredagainst such Collateral Vessel.
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**Part V: Conditions precedent to an Upsize Amount Drawdown Date****1** **Security Parties** (a) A certificate from a duly authorised officer or representative of the Borrowerconfirming that none of the documents delivered to the Agent pursuant to Schedule 3Part I (a), (b), (c), (d) and (e) have been amended or modified in any way since thedate of their delivery to the Agent.  (b) **Constitutional Documents**Copies of the constitutional documents of theAdditional Borrower together with such other evidence as the Agent may reasonablyrequire that the Additional Borrower is duly formed or incorporated in its country ofincorporation and remains in existence with power to enter into, and perform itsobligations under, the Relevant Documents to which it is or is to become a party.  (c) **Certificates of good standing**A certificate of good standing in respect ofthe Additional Borrower (if such a certificate can be obtained).  (d) **Board resolutions**A copy of a resolution of the board of directors of theAdditional Borrower (or its sole member): (i) approving the terms of, and the transactions contemplated by,the Relevant Documents to which it is a party and ratifying or resolving thatit execute those Relevant Documents; and  (ii) if required authorising a specified person or persons toexecute those Relevant Documents (and all documents and notices to be signedand/or despatched under those documents) on its behalf. (e) **Officer’s certificates**A certificate of a duly authorised officer orrepresentative of the Additional Borrower certifying that each copy document relatingto it specified in this Part V of Schedule 3 is correct, complete and in full force andeffect as at a date no earlier than the date of this Agreement and setting out thenames of the directors and officers of that the Additional Borrower (or its solemember) and the proportion of shares held by each shareholder.  (f) **Powers of attorney**The notarially attested and legalised (where necessary forregistration purposes) power of attorney of the Additional Borrower under which
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   any documents are to be executed or transactions undertaken by that Security Party.**2** **Security and related documents** (a) **Vessel documents**In respect of the Additional Vessel photocopies, certifiedas true, accurate and complete by a duly authorised representative of the relevantAdditional Borrower, of any relevant Management Agreement together with all addenda,amendments or supplements.  (b) **Evidence of Owner’s title**Evidence that on the Upsize Trigger Date (i) theAdditional Vessel will be registered under a Pre-Approved Flag in the ownership of theAdditional Borrower and (ii) a Mortgage will be capable of being registered against theAdditional Vessel with first priority.  (c) **Evidence of insurance**Evidence that the Additional Vessel is insured in themanner required by the Security Documents and that letters of undertaking will beissued in the manner required by the Security Documents, together with the writtenapproval of the Insurances by an insurance adviser appointed by the Agent.  (d) **Confirmation of class**Certificates of Confirmation of Class for hull andmachinery confirming that the Additional Vessel is classed with the highest classapplicable to vessels of her type with a Pre-Approved Classification Society.  (e) **Security Documents**The Mortgage and Assignment to be executed in respect ofthe Additional Vessel, a Share Pledge in respect of the Additional Borrower togetherwith all other documents required by any of them, including, without limitation, allnotices of assignment and/or charge and evidence that those notices will be dulyacknowledged by the recipients, and such confirmations relating to the existingSecurity Documents to ensure they secure the Upsize Increased Maximum Amount as theAgent and its counsel may require.  (f) **Other Relevant Documents**Copies of each of the Relevant Documents in respectof the Additional Vessel not otherwise comprised in the documents listed in this Part Vof Schedule 3.  (g) **Valuations**Two Valuations of the Additional Vessel.
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**3** **Legal opinions**   If a Security Party is incorporated in a jurisdiction other than England and Wales or if anyFinance Document is governed by the laws of a jurisdiction other than England and Wales, alegal opinion of the legal advisers to the Lenders in each relevant jurisdiction,substantially in the form provided to the Agent prior to the Upsize Amount Drawdown Date orconfirmation satisfactory to the Agent that such an opinion will be given. **4** **Other documents and evidence** (a) **Upsize Notice**A duly completed Upsize Notice, accepted in writing by theAgent.  (b) **Drawdown Notice**A duly completed Drawdown Notice.  (c) **Process agent**Evidence that any process agent appointed under any new FinanceDocument has accepted its appointment.  (d) **Other authorisations**A copy of any other consent, licence, approval,authorisation or other document, opinion or assurance which the Agent considers to benecessary or desirable (if it has notified the relevant Owner accordingly) inconnection with the entry into and performance of the transactions contemplated by anyof the Relevant Documents or for the validity and enforceability of any of the RelevantDocuments.  (e) **Fees**Evidence that the fees, costs and expenses then due from the Borrowersunder Clause 9.3 have been paid or will be paid by the Drawdown Date.  (f) **“Know your customer” documents**Such documentation and other evidence as isreasonably requested by the Agent in order for the Lenders to comply with all necessary“know your customer” or similar identification procedures in relation to thetransactions contemplated in the Finance Documents.
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**Part VI: Conditions subsequent to an Upsize Amount Drawdown Date**1 **Evidence of Owner’s title**Certificate of ownership and encumbrance (or equivalent) issuedby the Registrar of Ships (or equivalent official) of the Additional Vessel’s flag stateconfirming that (a) the Additional Vessel is permanently registered under that flag in theownership of the relevant Owner, (b) the relevant Mortgage has been registered with firstpriority against the Additional Vessel and (c) there are no further Encumbrances registeredagainst the Additional Vessel. 2 **Letters of undertaking**Letters of undertaking in respect of the Insurances as required bythe Security Documents together with copies of the relevant policies or cover notes or entrycertificates duly endorsed with the interest of the Finance Parties. 3 **Acknowledgements of notices**Acknowledgements of all notices of assignment and/or chargegiven pursuant to the Security Documents. 4 **Legal opinions**Such of the legal opinions specified in Part V of this Schedule 3 as havenot already been provided to the Agent. 5 **Companies Act registrations**Evidence that the prescribed particulars of the SecurityDocuments relating to the Additional Vessel have been delivered to the Registrar of Companiesof England and Wales and (where relevant) the appropriate registry in Singapore within thestatutory time limit.
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**Part VII: Conditions precedent to the Tranche B Step Up Date****1** **Hugli** (a) **Constitutional Documents**Copies of the constitutional documents of Huglitogether with such other evidence as the Agent may reasonably require that Hugli isduly incorporated in its country of incorporation and remains in existence with powerto enter into, and perform its obligations under, the Relevant Documents to which it isor is to become a party.  (b) **Certificates of good standing**A certificate of good standing in respect ofHugli (if such a certificate can be obtained).  (c) **Board resolutions**A copy of a resolution of the board of directors of Hugli(or its sole member): (i) approving the terms of, and the transactions contemplated by,the Relevant Documents to which it is a party and ratifying or resolving thatit execute those Relevant Documents; and  (ii) if required authorising a specified person or persons toexecute those Relevant Documents (and all documents and notices to be signedand/or despatched under those documents) on its behalf. (d) **Officer’s certificates**A certificate of a duly authorised officer orrepresentative of Hugli certifying that each copy document relating to it specified inthis Part VII of Schedule 3 is correct, complete and in full force and effect as at theTranche B Step Up Date and setting out the names of the directors and officers of Hugli(or its sole member) and the proportion of shares held by each shareholder.  (e) **Powers of attorney**The notarially attested and legalised (where necessary forregistration purposes) power of attorney of Hugli under which any documents are to beexecuted or transactions undertaken by that Security Party.**2** **Security and related documents** (a) **Vessel documents**In respect of the m.v. “Hugli Spirit” photocopies, certifiedas true, accurate and complete by a duly authorised representative of Hugli, of any
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   relevant Management Agreement together with all addenda, amendments or supplements.  (b) **Evidence of Owner’s title**Evidence that on the Tranche B Step Up Date (i)m.v. “Hugli Spirit” will be registered under a Pre-Approved Flag in the ownership ofHugli and (ii) a Mortgage will be capable of being registered against m.v. “HugliSpirit” with first priority.  (c) **Evidence of insurance**Evidence that m.v. “Hugli Spirit” is insured in themanner required by the Security Documents and that letters of undertaking will beissued in the manner required by the Security Documents, together with the writtenapproval of the Insurances by an insurance adviser appointed by the Agent.  (d) **Confirmation of class**A certificate of Confirmation of Class for hull andmachinery confirming that m.v. “Hugli Spirit” is classed with the highest classapplicable to vessels of her type with a Pre-Approved Classification Society.  (e) **Security Documents**The Mortgage and Assignment to be executed in respect ofm.v. “Hugli Spirit” and a Share Pledge in respect of Hugli, together with all otherdocuments required by any of them, including, without limitation, all notices ofassignment and/or charge and evidence that those notices will be duly acknowledged bythe recipients.  (f) **Other Relevant Documents**Copies of each of the Relevant Documents in respectof m.v. “Hugli Spirit” not otherwise comprised in the documents listed in this Part VIIof Schedule 3.  (g) **Valuation**A Valuation of m.v. “Hugli Spirit”.**3** **Legal opinions**   Legal opinions of the legal advisers to the Lenders in each relevant jurisdiction,substantially in the form provided to the Agent prior to the Tranche B Step Up Date orconfirmation satisfactory to the Agent that such opinions will be given.
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**4** **Other documents and evidence** (a) **Process agent**Evidence that any process agent appointed under any new FinanceDocument has accepted its appointment.  (b) **Other authorisations**A copy of any other consent, licence, approval,authorisation or other document, opinion or assurance which the Agent considers to benecessary or desirable (if it has notified the relevant Owner accordingly) inconnection with the entry into and performance of the transactions contemplated by anyof the Relevant Documents or for the validity and enforceability of any of the RelevantDocuments.  (c) **“Know your customer” documents**Such documentation and other evidence as isreasonably requested by the Agent in order for the Lenders to comply with all necessary“know your customer” or similar identification procedures in relation to thetransactions contemplated in the Finance Documents.
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**Part VIII: Conditions subsequent to the Tranche B Step Up Date**1 **Evidence of Owner’s title**Certificate of ownership and encumbrance (or equivalent) issuedby the Registrar of Ships (or equivalent official) of m.v. “Hugli Spirit” flag stateconfirming that (a) m.v. “Hugli Spirit” is permanently registered under that flag in theownership of the relevant Owner, (b) the relevant Mortgage has been registered with firstpriority against m.v. “Hugli Spirit” and (c) there are no further Encumbrances registeredagainst m.v. “Hugli Spirit”. 2 **Letters of undertaking**Letters of undertaking in respect of the Insurances as required bythe Security Documents together with copies of the relevant policies or cover notes or entrycertificates duly endorsed with the interest of the Finance Parties. 3 **Acknowledgements of notices**Acknowledgements of all notices of assignment and/or chargegiven pursuant to the Security Documents. 4 **Legal opinions**Such of the legal opinions specified in Part VII of this Schedule 3 as havenot already been provided to the Agent. 5 **Companies Act registrations**Evidence that the prescribed particulars of the SecurityDocuments relating to m.v. “Hugli” have been delivered to the Registrar of Companies ofEngland and Wales within the statutory time limit.
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**SCHEDULE 4: Calculation of Mandatory Cost**1 The Mandatory Cost is an addition to the interest rate to compensate the Lenders for the costof compliance with (a) the requirements of the Bank of England and/or the Financial ServicesAuthority (or, in either case, any other authority which replaces all or any of its functions)or (b) the requirements of the European Central Bank. (a) On the first day of each Interest Period (or as soon as possible thereafter) the Agent shallcalculate, as a percentage rate, a rate (the **“Additional Cost Rate”**) for each Lender inaccordance with the paragraphs set out below. The Mandatory Cost will be calculated by theAgent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion tothe percentage participation of each Lender in the Facility) and will be expressed as apercentage rate per annum. (b) The Additional Cost Rate for any Lender lending from an office in the euro-zone will be thepercentage notified by that Lender to the Agent to be its reasonable determination of the cost(expressed as a percentage of that Lender’s participation in the Facility) of complying withthe minimum reserve requirements of the European Central Bank as a result of participating inthe Facility from that office. (c) The Additional Cost Rate for any Lender lending from an office in the United Kingdom will becalculated by the Agent as follows:                       F x 0.01 per cent per annum