reflect such change in
accounting principles.
Notwithstanding anything to the contrary herein, the
application of GAAP shall not include FAS 150.
ARTICLE 2
CREDIT FACILITIES;
DRAWDOWN PROCEDURES AND REPAYMENT PROVISIONS
SECTION 2.1.
THE LOAN.
(A)
ADVANCE OF LOAN.
SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, AND IN RELIANCE UPON THE REPRESENTATIONS AND WARRANTIES SET FORTH
HEREIN, THE LENDER AGREES TO LEND TO THE BORROWER TWENTY-THREE MILLION FOUR
HUNDRED THOUSAND UNITED STATES DOLLARS ($23,400,000) (THE "LOAN").
THE PROCEEDS
OF THE LOAN SHALL BE USED BY THE BORROWER SOLELY TO FINANCE AND/OR REFINANCE A
PORTION OF ITS COSTS TO ACQUIRE THE VESSELS, TO FUND CERTAIN COSTS AND EXPENSES
ASSOCIATED WITH THE LOAN AND THE PURCHASE OF THE VESSELS AND TO PROVIDE
ADDITIONAL WORKING CAPITAL.
THE BORROWER MAY REQUEST THE LENDER TO ADVANCE THE
PROCEEDS OF THE LOAN BY DELIVERING TO THE LENDER A DULY COMPLETED NOTICE OF
DRAWING SUBSTANTIALLY IN THE FORM ANNEXED HERETO AS APPENDIX A, WHICH NOTICE
SHALL BE IRREVOCABLE AND BE RECEIVED BY THE L ENDER NOT LATER THAN 11:00 A.M.
E.S.T. ONE (1) BUSINESS DAY PRIOR TO THE CLOSING DATE ("NOTICE OF DRAWING").
THE LENDER'S OBLIGATION TO MAKE THE LOAN AVAILABLE HEREUNDER SHALL EXPIRE ON
DECEMBER 31, 2003, PROVIDED, HOWEVER, THAT SUCH OBLIGATION SHALL TERMINATE
AUTOMATICALLY UPON THE OCCURRENCE OF A DEFAULT OR AN EVENT OF DEFAULT.
THE
BORROWER UNCONDITIONALLY AND IRREVOCABLY AUTHORIZES THE LENDER TO MAKE THE
PAYMENTS SPECIFIED IN THE NOTICE OF DRAWING.
(B)
PRINCIPAL PAYMENT OF THE LOAN.
THE BORROWER SHALL REPAY THE
PRINCIPAL AMOUNT OF THE LOAN OVER A PERIOD OF TEN (10) YEARS IN FORTY (40)
CONSECUTIVE QUARTERLY INSTALLMENTS, COMMENCING ON MARCH 17, 2004 AND CONTINUING
THEREAFTER ON THE SAME DAY OF EACH THIRD MONTH THEREAFTER UNTIL PAID IN FULL.
THE FIRST THIRTY-NINE (39) SUCH PRINCIPAL INSTALLMENTS SHALL BE IN THE AMOUNT OF
$487,500 EACH, AND THE FINAL PRINCIPAL INSTALLMENT, DUE ON DECEMBER 17, 2013,
SHALL BE IN AN AMOUNT EQUAL TO THE THEN UNPAID PRINCIPAL BALANCE OF THE LOAN.
UNLESS SOONER PAID, ALL SUMS DUE UNDER THE LOAN SHALL BE DUE AND PAYABLE IN FULL
ON DECEMBER 17, 2013 (THE "MATURITY DATE").
(C)
INTEREST.
EXCEPT FOR ANY PERIOD DURING WHICH AN EVENT OF DEFAULT
UNDER SECTION 6.1(A) HAS OCCURRED AND IS CONTINUING HEREUNDER (AND IRRESPECTIVE
OF WHETHER OR NOT THE MATURITY OF THE LOAN HAS BEEN ACCELERATED PURSUANT
HERETO), THE BORROWER SHALL PAY INTEREST ON THE UNPAID PRINCIPAL BALANCE OF THE
LOAN FROM THE DATE THE LOAN IS MADE UNTIL THE DATE THE LOAN HAS BEEN
INDEFEASIBLY REPAID IN FULL, CALCULATED WITH RESPECT TO EACH INTEREST PERIOD AT
A RATE PER ANNUM EQUAL TO THE LIBOR RATE APPLICABLE TO SUCH INTEREST PERIOD PLUS
440 BASIS POINTS.
INTEREST
13
ACCRUED ON THE LOAN SHALL BE PAID BY THE BORROWER TO THE LENDER ON A QUARTERLY
BASIS COMMENCING ON MARCH 17, 2004, AND CONTINUING ON THE SAME DAY OF EACH THIRD
MONTH THEREAFTER UNTIL MATURITY OF THE LOAN (WHETHER BY ACCELERATION, EXTENSION
OR OTHERWISE) AT WHICH TIME THE BORROWER SHALL PAY