Document:

Exhibit 10.2

 

LOAN AGREEMENT

 

Dated:     November 5,  2003

 

BETWEEN:-

 

(1)       SEA CONTAINERS LTD., a company incorporated according to the laws of Bermuda with
registered office at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda
(“the
Borrower”); and

 

(2)       the banks
listed in Schedule 1, each acting through its office at the address
indicated against its name in Schedule 1 (together “the Banks” and each a “Bank”);
and

 

(3)       NORDEA BANK DANMARK A/S, acting as
paying agent through its office at Christiansbro, Strandgade 3, P.O. Box 850,
DK-0900 Copenhagen C, Denmark (in that capacity “the Paying Agent”); and

 

(4)       NORDEA BANK FINLAND plc, acting as security agent through its office at Satamaradankatu 5,
Helsinki, FIN-00020, Finland, (in that capacity “the Security Agent”); and

 

(5)       HSH NORDBANK AG, acting as documentation agent through its office at Martensdamm 6,
D-24103 Kiel, Federal Republic of Germany (in that capacity “the
Documentation Agent”); and

 

(6)       NORDEA BANK DANMARK A/S, acting as lead arranger through its office at Christiansbro,
Strandgade 3, P.O. Box 850, DK-0900 Copenhagen C, Denmark (in that capacity “the Lead
Arranger”); and

 

(7)       the banks
listed in Schedule 2, each acting through its office at the address
indicated against its name in Schedule 2 (together “the Co-Arrangers” and each a
“Co-Arranger”);
and

 

(8)       the
companies listed in Schedule 3, each of which is a company incorporated
according to the laws of the country indicated against its name in
Schedule 3, with registered office at the address indicted against its
name in Schedule 3 (together “the Owners” and each an “Owner”).

 

129

 

WHEREAS:-

 

Each of the
Banks has agreed to advance to the Borrower its respective Commitment of an
aggregate amount of a term loan not exceeding fifty four million euro
(€54,000,000) in order to provide the Borrower with additional working capital.

 

IT IS AGREED  as follows:-

 

1        Definitions
and Interpretation

 

1.1       Definitions

 

In this Agreement:-

 

1.1.1     “the Address
for Service” means c/o Sea Containers Services Limited of Sea
Containers House, 20 Upper Ground, London SE1 9PF or, in relation to any of the
Security Parties, such other address in England and Wales as that Security
Party may from time to time designate by no fewer than ten days’ written notice
to the Agents.

 

1.1.2     “the
Administration”  has the meaning given to it in paragraph
1.1.3 of the ISM Code.

 

1.1.3     “the Advance
Date” means the date on which the Drawing is advanced by the Banks
to the Borrower pursuant to Clause 2.

 

1.1.4     “Affiliate”
means a Subsidiary or a Parent Company of a person or any other Subsidiary of
that Parent Company.

 

1.1.5     “the Agents”
means the Paying Agent and the Security Agent together.

 

1.1.6     “Approved
Brokers” means the sale and purchase brokers set out in
Schedule 4 hereto or any other brokers agreed between the Paying Agent and
the Borrower.

 

1.1.7     “the
Assignments” means the Earnings Assignments, the Insurance
Assignments and the Charter Guarantee Assignment.

 

130

 

1.1.8     “the
Availability Termination Date” means the date forty five (45) days
after the date of this Agreement or such later date as the Banks may in their
discretion agree.

 

1.1.9     “Bareboat
Charterers” means

 

(i)       in respect
of SILJA FESTIVAL, SILJA OPERA and SILJA SYMPHONY, Silja Line AB;

 

(ii)       in respect
of FINNJET, Silja Oyj Abp; and

 

(iii)      in respect
of WALRUS, Havens.

 

1.1.10    “Bareboat
Charters” means the charters of the Vessels (other than SILJA
SERENADE and STAR WIND) between the relevant Owners and the relevant Bareboat
Charterers.

 

1.1.11    “Borrowed
Money” means indebtedness incurred in respect of (i) money borrowed
or raised, (ii) any bond, note, loan stock, debenture or similar instrument,
(iii) acceptance or documentary credit facilities, (iv) rental payments under
and any amounts payable on termination of leases (whether in respect of ships,
land, machinery, equipment or otherwise) entered into primarily as a method of
raising finance or of financing the acquisition of the asset leased, (v)
guarantees, bonds, stand-by letters of credit or other instruments issued in
connection with the performance of contracts and (vi) guarantees or other
assurances against financial loss in respect of indebtedness of any person,
firm or company falling within any of (i) to (v) above.

 

1.1.12    “Borrower’s
Obligations” means all of the liabilities and obligations of the
Borrower to the Agents or any of the Banks under or pursuant to the Security
Documents to which it is a party, whether actual or contingent, present or
future, and whether incurred alone or jointly or jointly and severally with any
other and in whatever currency, including (without limitation) interest,
commission and all other charges and expenses.

 

1.1.13    “Break Costs”
means all costs, losses, premiums or penalties incurred by the Agents or any
Bank in the circumstances contemplated by Clause 19.4,

 

131

 

or as a result of it receiving any prepayment of all
or any part of the Facility (whether pursuant to Clause 5 or otherwise), or any
other payment under or in relation to the Security Documents on a day other
than at the end of an Interest Period or the due date for payment of the sum in
question, and includes (without limitation) any losses or costs incurred in liquidating
or re-employing deposits from third parties acquired to effect or maintain the
Facility, and any liabilities, expenses or losses incurred by the Agents or any
Bank in terminating or reversing, or otherwise in connection with, any interest
rate and/or currency swap, transaction or arrangement entered into by the
Agents or any Bank to hedge any exposure arising under this Agreement, or in
terminating or reversing, or otherwise in connection with, any open position
arising under this Agreement.

 

1.1.14    “Business Day”
means a day on which banks are open for the transaction of business of the
nature contemplated by this Agreement (and not authorised by law to close) in
London, England; Copenhagen, Denmark; Helsinki, Finland; Hamburg, Federal
Republic of Germany and any other financial centre which any Bank may consider
appropriate for the operation of the provisions of this Agreement and a day on
which the Trans-European Automated Real Time Gross Settlement Express Transfer
System (TARGET) is operating.

 

1.1.15    “Charter
Guarantee” means the guarantee issued by Citibank N.A. guaranteeing
(in part) the obligations of Havens under the Bareboat Charter for WALRUS.

 

1.1.16    “Charter
Guarantee Assignment” means the deed of assignment of the Charter
Guarantee referred to in Clause 10.6.

 

1.1.17    “Charter
Rights”, in relation to a Vessel, means all rights and benefits
accruing to the Owner of that Vessel under or pursuant to the relevant Bareboat
Charter and not forming part of the Earnings.

 

1.1.18    “the
Citigroup Pledge” means the third priority pledge of the issued
share capital of Silja Holdings Limited issued in favour of Citicorp Trustee
Company Limited

 

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1.1.19    “Commitment”
means, in relation to each Bank, the amount of the Facility which that Bank
agrees to advance to the Borrower as its several liability as indicated against
the name of that Bank in Schedule 1 and/or, where the context permits, the
amount of the Facility advanced by that Bank and remaining outstanding.

 

1.1.20    “Commitment
Commission” means the commitment commission to be paid by the
Borrower to the Paying Agent pursuant to Clause 8.2.

 

1.1.21    a “Communication”
means any notice, approval, demand, request or other communication from one
party to this Agreement to any other party to this Agreement.

 

1.1.22    “the
Communications Address” means Sea Containers Ltd. C/o Sea Containers
Services Limited of 20 Upper Ground, London SE1 9PF (fax no: +44 20 7805 5000)
marked for the attention of Legal Services Department.

 

1.1.23    “the Company”
means, at any given time and in relation to any Vessel, the company responsible
for the Vessel’s compliance with the ISM Code pursuant to paragraph 1.1.2 of
the ISM Code.

 

1.1.24    “Consolidated
Cash Reserves” means the consolidated cash, bank deposits and unused
credit facilities (excluding any credit facilities from Silja Oyj Abp and Silja
Holdings Limited) of the Borrower and its Subsidiaries which are in each case
free of Encumbrances.

 

1.1.25    “Consolidated
Tangible Net Worth” means at any relevant time the aggregate of:-

 

(a)       the amounts paid up or credited
as paid up on the share capital account of the Borrower and each of its
Subsidiaries;

 

(b)       any credit balance on the
Borrower’s consolidated profit and loss account;

 

(c)       any amount standing to the
credit of any other consolidated capital and revenue reserves of the Borrower
(including any share premium account); and

 

133

 

(d)       bonds,
notes, loan stock, debentures or other similar instruments (other than those
falling due for repayment within twelve months);

 

less the aggregate of:-

 

(a)       any debit
balance on the Borrower’s consolidated profit and loss account;

 

(b)       any
reserves attributable to the interest of minority shareholders in any
Subsidiary of the Borrower;

 

(c)       any amount
shown in the Borrower’s consolidated balance sheet in respect of goodwill or
other intangible assets; and

 

(d)       deferred
taxation of the Borrower and any of its Subsidiaries.

 

1.1.26    “Consolidated
Tangible Net Worth Ratio” means the ratio of Borrowed Money to
Consolidated Tangible Net Worth.

 

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

 

1.1.28    “the Deed of
Co-ordination and Subordination” means the deed to be entered into
between the Agents, the Banks, the Borrower, the Owners, Silja Oyj Abp, Silja
Holdings Limited the Senior Agents and the Senior Banks.

 

1.1.29    “the Deeds of
Covenants” means the deeds of covenants referred to in Clause 10.1
(each a “Deed
of Covenants”).

 

1.1.30    “Default Rate”
means the rate being the aggregate of the Margin and two per centum (2%) per
annum above the cost to the Banks of obtaining funds in amount similar to the
amount of the Indebtedness or any relevant part of the Indebtedness for such
periods as the Paying Agent shall determine.

 

134

 

1.1.31    “DOC”
means, in relation to each Company, a valid Document of Compliance issued for
the Company by the Administration pursuant to paragraph 13.2 of the ISM Code.

 

1.1.32    “Drawdown
Notice” means a notice complying with Clause 2.3.

 

1.1.33    “Drawing”
means a part of the Facility advanced by the Banks to the Borrower in
accordance with Clause 2.3.

 

1.1.34    “Earnings”,
in relation to a Vessel, means all hires, freights, pool income and other sums
payable to or for the account of the Owner in respect of that Vessel including
(without limitation) all remuneration for salvage and towage services,
demurrage and detention moneys, contributions in general average, compensation
in respect of any requisition for hire and damages and other payments (whether
awarded by any court or arbitral tribunal or by agreement or otherwise) for
breach, termination or variation of any contract for the operation, employment
or use of the Vessel.

 

1.1.35    “the Earnings
Accounts” means a bank account in the name of Silja Oyj Abp with
Nordea Bank Finland Plc under account number 233318-3206 and an account in the
name of Silja Oyj Abp held with Svenska Handelsbanken AB (publ) under account
number 6140-36802328.

 

1.1.36    “the Earnings
Assignments” means the deeds of assignment of Earnings and Charter
Rights and/or Earnings assignment agreements referred to in Clause 10.5 (each
an “Earnings
Assignment”).

 

1.1.37    “Encumbrance”
means any mortgage, charge (fixed or floating), pledge, lien, assignment,
hypothecation, preferential right, option, title retention or trust arrangement
or any other agreement or arrangement which has the effect of creating security
or payment priority.

 

1.1.38    “EURIBOR”
means the applicable Screen Rate, rounded to the nearest four decimal places
downwards (if the digit displayed in the fifth decimal place is 1, 2, 3 or 4)
or upwards (if the digit in the fifth decimal place is 5, 6, 7, 8 or 9).

 

135

 

1.1.39    “euro” and “€”
means the currency of participating member states of the European Monetary
Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended
from time to time.

 

1.1.40    “Event of
Default” means any of the events set out in Clause 14.2.

 

1.1.41    “the Facility”
means the aggregate amount up to the Maximum Loan Amount from time to time
advanced to the Borrower by the Banks pursuant to Clause 2 or, where the
context permits, the amount of the Drawing advanced and for the time being
outstanding.

 

1.1.42    “the Facility
Period” means the period beginning on the date of this Agreement and
ending on the date when the whole of the Indebtedness has been repaid in full
and the Borrower has ceased to be under any further actual or contingent
liability to the Banks or to the Agents under or in connection with the
Security Documents.

 

1.1.43    “the Fee
Letter” means a letter from the Paying Agent to the Borrower setting
out certain fees, commissions and other sums payable by the Borrower to the
Agents in connection with the Facility.

 

1.1.44    “Final
Maturity Date” means the earlier of five (5) years from the Advance
Date or 1 October 2008.

 

1.1.45    “Group”
means Silja Oyj Abp and its Subsidiaries.

 

1.1.46    “Group
Tripartite Agreements” means the tripartite agreements in respect of
the vessels SILJA FESTIVAL, SILJA OPERA, SILJA SYMPHONY and FINNJET referred to
in Clause 10.4.

 

1.1.47    “Havens”
means Havens Pte Ltd, a company incorporated under the laws of Singapore.

 

1.1.48    “the
Indebtedness” means the Facility; all other sums of any nature
(together with all interest on any of those sums) which from time to time may
be payable by the Borrower to the Agents or to the Banks pursuant to the
Security Documents; any damages payable as a result of any breach by the
Borrower of any of the Security Documents; and any damages or other sums
payable as a result of any of the obligations of the Borrower under or

 

136

 

pursuant to any of the Security Documents being
disclaimed by a liquidator or any other person, or, where the context permits,
the amount thereof for the time being outstanding.

 

1.1.49                  an “Instructing Group” means at least three Banks whose combined
Proportionate Shares exceed sixty six point six six per centum (66.66%).

 

1.1.50    “the
Insurance Assignments” means the deeds of assignment of the
Insurances and Requisition Compensation referred to in Clause 10.2 (each an “Insurance
Assignment”).

 

1.1.51    “Insurances”,
in relation to a Vessel, means all policies and contracts of insurance
(including all entries in protection and indemnity or war risks associations)
which are from time to time taken out or entered into in respect of or in
connection with that Vessel or her increased value or her Earnings and (where
the context permits) all benefits thereof, including all claims of any nature
and returns of premium.

 

1.1.52    “Interest
Payment Date” means each date for the payment of interest in
accordance with Clause 6.

 

1.1.53    “Interest
Period” means each interest period selected by the Borrower or
agreed by the Paying Agent pursuant to Clause 6.

 

1.1.54    “the ISM Code”
means the International Management Code for the Safe Management of Ships and
for Pollution Prevention, as adopted by the Assembly of the International
Maritime Organisation on 4 November 1993 by resolution A.741 (18) and
incorporated on 19 May 1994 as chapter IX of the Safety of Life at Sea
Convention 1974.

 

1.1.55    “law”
means any law, statute, treaty, convention, regulation, instrument or other
subordinate legislation or other legislative or quasi-legislative rule or
measure, or any order or decree of any government, judicial or public or other
body or authority, or any directive, code of practice, circular, guidance note
or other direction issued by any competent authority or agency (whether or not
having the force of law).

 

137

 

1.1.56    “the Managers”
means Seawind Line Oy Ab in respect of “STAR WIND”, Seahawk, North America in
respect of “WALRUS” and Silja Oyj Abp in respect of all other Vessels, or such
other commercial and/or technical managers of the Vessels nominated by the
Owners as the Agents may approve.

 

1.1.57    “Mandatory
Cost” means, for each Bank to which it applies, the cost imputed to
that Bank of compliance with the mandatory requirements of any relevant
regulatory authority.

 

1.1.58    “the Margin”
means two point one two five per centum (2.125%) per annum.

 

1.1.59    “the Market
Value” in respect of any Vessel means the arithmetic average of
valuations carried out by two Approved Brokers, one appointed by the Agent the
other by the Borrower, such  valuations
to be on a “willing buyer, willing seller” charter free basis.

 

1.1.60    “the Maximum
Loan Amount” means fifty four million euro (€54,000,000).

 

1.1.61    “the
Mortgagees’ Insurances” means all policies and contracts of
mortgagees’ interest insurance, mortgagees’ additional perils (oil pollution)
insurance and any other insurance from time to time taken out by the Agents on
behalf of the Banks in relation to the Vessels.

 

1.1.62    “the
Mortgages” means the second preferred or priority mortgages and
where relevant the pledges thereof referred to in Clause 10.1 (each a “Mortgage”).

 

1.1.63    “Operating
Expenses” means expenses properly and reasonably incurred by the
Owners in connection with the operation, employment, maintenance, repair and
insurance of the Vessels.

 

1.1.64    “Owner”
means, in relation to a Vessel, the Owner against whose name the name of that
Vessel appears in Schedule 3.

 

1.1.65    “Owners’
Liabilities” means all of the liabilities and obligations of the
Owners to the Agents under or pursuant to the Owners’ Guarantee, whether

 

138

 

actual or contingent, including (without limitation)
interest at the Default Rate.

 

1.1.66    “Owners’
Guarantee” means the guarantee and indemnity contained in Clause 9.

 

1.1.67    “Parent
Company” means in relation to a person, an entity of which that
person is a Subsidiary.

 

1.1.68    “Permitted
Encumbrance” means any Encumbrance which has the prior written
approval of the Paying Agent (including, but not limited to, the Citigroup
Pledge), or any Encumbrance arising either by operation of law or in the
ordinary course of the business of any of the Security Parties which is
discharged when due in the ordinary course of business.

 

1.1.69    “Potential
Event of Default” means any event which, with the giving of notice
and/or the passage of time, would constitute an Event of Default.

 

1.1.70    “Proceedings”
means any suit, action or proceedings begun by the Agents or any of the Banks
arising out of or in connection with the Security Documents.

 

1.1.71    “Proportionate
Share” means, at any time, the proportion which that Bank’s
Commitment (whether or not advanced) then bears to the aggregate Commitments of
all the Banks (whether or not advanced).

 

1.1.72    “Reference
Banks” means Nordea Bank Danmark A/S, Nordea Bank Finland Plc, HSH
Nordbank AG, Fortis Bank S.A./N.V. and The Governor and Company of the Bank of
Scotland.

 

1.1.73    “Repayment
Date” means the date for payment of any Repayment Instalment in
accordance with Clause 5.

 

1.1.74    “Repayment
Instalment” means any instalment of the Facility to be repaid by the
Borrower pursuant to Clause 5.

 

1.1.75    “Required
Sale Prepayment Amount” means, in relation to a Vessel, seventy per
centum (70%) of the net sales proceeds of any sale on arms length commercial
terms and on a mortgage free basis to an unconnected

 

139

 

third party (or, in the case of a sale to an
Affiliate, seventy per centum (70%) of the Market Value).

 

1.1.76    “Requisition
Compensation”, in relation to a Vessel, means all compensation or
other money which may from time to time be payable to the Owner as a result of
the Vessel being requisitioned for title or in any other way compulsorily
acquired (other than by way of requisition for hire).

 

1.1.77    “Screen Rate”
means the percentage rate per annum determined by the Banking Federation of the
European Union for the relevant period, displayed on the appropriate page of
the Reuters screen (or such other page or pages which replace(s) such page) for
the purpose of displaying offered rates of leading banks, for deposits in euros
of amounts equal to the amount of the relevant Drawing for a period equal in
length to the relevant Interest Period or, if there is no such display rate
then available, the rate (rounded upwards to the nearest whole multiple of one
sixteenth of one per centum) at which deposits in euros of amounts comparable
to the amount of the Drawing are offered to the Reference Banks (or four of
them if one is unable to quote a rate) in the European Interbank market for a
period equal in length to the relevant Interest Period.

 

1.1.78    “the Security
Documents” means this Agreement, the Mortgages, the Deeds of
Covenants, the Assignments, the Tripartite Agreements, the Share Pledges or
(where the context permits) any one or more of them, and any other agreement or
document which may at any time be executed by any person as security for the
payment of all or any part of the Indebtedness.

 

1.1.79    “Security
Parties” means the Borrower, the Owners, the Bareboat Charterers
(other than Havens), Silja Holdings Limited and any other person or company who
may at any time during the Facility Period be liable for, or provide security
for, all or any part of the Indebtedness, and “Security Party” means any one
of them.

 

1.1.80    “the Senior
Agents” means the Agents in their capacities as agents for the
Senior Banks under the Senior Facility Agreement.

 

140

 

1.1.81    “the Senior
Banks” means those lenders set out in schedule 1 of the Senior
Facility Agreement.

 

1.1.82    “the Senior
Facility” means the €215,000,000 secured term loan and €126,000,000
revolving credit facility advanced or to be advanced to Silja Oyj Abp by the
Senior Banks pursuant to the Senior Facility Agreement.

 

1.1.83    “the Senior
Facility Agreement” means the term loan and revolving credit
facility agreement in respect of the Senior Facility made or to be made
between, amongst others, Silja Oyj Abp and the Senior Banks.

 

1.1.84    “the Share
Pledges”  means the pledges of the issued share
capital of Silja Holdings Limited and Silja Oyj Abp referred to in Clause 10.7.

 

1.1.85     “SMC”
means, in relation to each Vessel, a valid safety management certificate issued
for that Vessel by or on behalf of the relevant Administration pursuant to
paragraph 13.4 of the ISM Code.

 

1.1.86     “SMS”
means, in relation to each Vessel, a safety management system for that Vessel
developed and implemented in accordance with the ISM Code and including the
functional requirements, duties and obligations required by the ISM Code.

 

1.1.87     “Subsidiary”
means an organisation from time to time over which the Borrower exercises a
dominant influence either (i) by having a majority of the voting rights
attached to shares, memberships or participations and this majority is based on
ownership, membership, articles of association, company agreement or rules
corresponding thereto or other contract or (ii) by holding the right to appoint
the majority of the members of the board of directors or other corresponding
body of the other organisation or of a body with such power of appointment.

 

1.1.88     “Surety”
means any person (other than the Borrower and the Security Agent, or the
Owners, or Silja Holdings Limited) who has given or who may in the future give
to the Agents or any of the Banks any security or guarantee and indemnity for
or in relation to the Borrower’s Obligations.

 

141

 

1.1.89    “Taxes”
means all taxes, levies, imposts, duties, charges, fees, deductions and
withholdings (including any related interest, fines, surcharges and penalties)
and any restrictions or conditions resulting in any charge, other than taxes on
the overall net income of an Agent or of a Bank, and “Tax” and “Taxation”
shall be interpreted accordingly.

 

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

 

(a)       an actual,
constructive, arranged, agreed or compromised total loss of that Vessel; or

 

(b)       the
requisition for title or compulsory acquisition of that Vessel by or on behalf
of any government or other authority (other than by way of requisition for
hire); or

 

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

 

1.1.91    “Transfer Certificate” means a
certificate materially in the form of Appendix B.

 

1.1.92    “Transfer Date”, in relation
to a transfer of any of a Bank’s rights and/or obligations under or pursuant to
this Agreement, means the fifth Business Day after the date of delivery of the
relevant Transfer Certificate to the Paying Agent, or such later Business Day
as may be specified in the relevant Transfer Certificate.

 

1.1.93    “Transferee” means any bank or
financial institution to which a Bank transfers any of its rights and/or
obligations under or pursuant to this Agreement.

 

1.1.94    “Tripartite Agreements” means
the Walrus Tripartite Agreement and the Group Tripartite Agreements together,
and “Tripartite
Agreement” means any of them.

 

1.1.95”the Trust Property” means:-

 

142

 

(a)       the
benefit of the covenant contained in Clause 10; and

 

(b)       all
benefits arising under (including, without limitation, all proceeds of the
enforcement of) the Owners’ Guarantee; and

 

(c)       all benefits
arising under (including, without limitation, all proceeds of the enforcement
of) each of the Security Documents (other than this Agreement), with the
exception of any benefits arising solely for the benefit of the Agents.

 

1.1.96    “the Underlying Documents”
means the Bareboat Charters and the Charter Guarantee.

 

1.1.97    “the Vessels”  means
the vessels listed in Schedule 3 and everything now or in the future
belonging to them on board and ashore (each a “Vessel”).

 

1.1.98    “Walrus  Tripartite Agreement” means
the tripartite agreement in respect of the vessel “WALRUS” referred to in
Clause 10.3.

 

1.2       Interpretation

 

In this Agreement:-

 

1.2.1     words denoting the plural number
include the singular and vice versa;

 

1.2.2     words denoting persons include
corporations, partnerships, associations of persons (whether incorporated or
not) or governmental or quasi-governmental bodies or authorities and vice
versa;

 

1.2.3     references to Recitals, Clauses,
Schedules and Appendices are references to recitals and clauses of, and
schedules and appendices to, this Agreement;

 

1.2.4     references to this Agreement
include the Recitals, the Schedules and the Appendices;

 

1.2.5     the headings and contents page(s)
are for the purpose of reference only, have no legal or other significance, and
shall be ignored in the interpretation of this Agreement;

 

143

 

1.2.6     references to any document
(including, without limitation, to all or any of the Security Documents) are,
unless the context otherwise requires, references to that document as amended,
supplemented, novated or replaced from time to time;

 

1.2.7     references to statutes or
provisions of statutes are references to those statutes, or those provisions,
as from time to time amended, replaced or re-enacted;

 

1.2.8     references to a Bank or to an
Agent include its successors, transferees and assignees;

 

1.2.9     references to times of day are to
London time.

 

1.3       Offer
letter

 

This
Agreement supersedes the terms and conditions contained in any correspondence
relating to the subject matter of this Agreement exchanged between the Agents
or any of the Banks and the Borrower or their representatives prior to the date
of this Agreement.

 

1.4       Joint
and several liability

 

1.4.1     All obligations, covenants, representations,
warranties and undertakings in or pursuant to the Security Documents assumed,
given, made or entered into by the Owners shall, unless otherwise expressly
provided, be assumed, given, made or entered into by the Owners jointly and
severally.

 

1.4.2     Each of the Owners agrees that
any rights which it may have at any time during the Facility Period by reason
of the performance of its obligations under the Security Documents to be
indemnified by any other Owner or the Borrower and/or to take the benefit of
any security taken by the Banks or by the Agents pursuant to the Security
Documents shall be exercised in such manner and on such terms as the Agents may
require.  Each of the Owners agrees to
hold any sums received by it as a result of its having exercised any such right
on trust for the Agents (as agents for the Banks) absolutely.

 

1.4.3     Each of the Owners agrees that it
will not at any time during the Facility Period claim any set-off or
counterclaim against any other Owner or the

 

144

 

Borrower in respect of any liability owed to it by that other Owner or
the Borrower under or in connection with the Security Documents, nor prove in
competition with the Banks or the Agents in any liquidation of (or analogous
proceeding in respect of) any other Owner or the Borrower in respect of any
payment made under the Security Documents or in respect of any sum which
includes the proceeds of realisation of any security held by the Banks or the
Agents for the repayment of the Indebtedness.

 

2        The Facility and its Purpose

 

2.1       Agreement to lend  Subject to the terms and conditions of this Agreement, and in
reliance on each of the representations and warranties made or to be made in or
in accordance with each of the Security Documents, each of the Banks agrees to
advance to the Borrower its Commitment of an aggregate amount not exceeding the
Maximum Loan Amount to be used by the Borrower for the purposes referred to in
the Recital.

 

2.2       Drawings  Subject to satisfaction by the Borrower of the conditions set out in
Clause 3.1, and subject to Clause 2.3, the Facility shall be advanced to
the Borrower in one Drawing no later than the Availability Termination Date, by
the Paying Agent transferring the amount of the Drawing to the Borrower by such
method of funds transfer as the Paying Agent and the Borrower shall agree.

 

2.3       Advance of Drawing  The Drawing shall be advanced in euros, on a Business Day, provided
that the Borrower shall have given to the Paying Agent not more than ten and
not fewer than three Business Days’ notice in writing materially in the form
set out in Appendix A of the required Advance Date of the Drawing.  The Drawdown Notice once given shall be
irrevocable and shall constitute a warranty by the Borrower that:-

 

2.3.1     all conditions precedent to the advance of the
Drawing will have been satisfied on or before the Advance Date requested;

 

2.3.2     no Event of Default or Potential Event of Default
will then have occurred;

 

2.3.3     no Event of Default or Potential Event of Default
will result from the advance of the Drawing; and

 

145

 

2.3.4     there has been no material adverse change in the
business, affairs or financial condition of any of the Security Parties from
that pertaining at the date of this Agreement.

 

The Paying Agent shall promptly notify each Bank of the receipt of the
Drawdown Notice, following which each Bank will make its Proportionate Share of
the amount of the requested Drawing available to the Borrower through the
Paying Agent on the Advance Date requested.

 

2.4       Availability Termination Date 
The Banks shall not be under any obligation
to advance all or any part of the Facility after the Availability Termination
Date.

 

2.5       Several obligations  The obligations of the Banks under this Agreement are several.  The failure of a Bank to perform its
obligations under this Agreement shall not affect the obligations of the
Borrower to the Agents or to the other Banks, nor shall the Agents or any other
Bank be liable for the failure of a Bank to perform any of its obligations
under or in connection with this Agreement.

 

2.6       Application of Facility  Without prejudice to the obligations of the Borrower under this
Agreement, neither the Banks nor the Agents shall be obliged to concern
themselves with the application of the Facility by the Borrower.

 

2.7       Loan and control accounts  The Paying Agent will open and maintain such loan and control
accounts as it shall consider necessary or desirable.

 

3        Conditions Precedent and Subsequent

 

3.1       Conditions Precedent  Before any Bank shall have any obligation to
advance any part of the Drawing, the Borrower shall deliver or cause to be
delivered to or to the order of the Agents the following documents and
evidence:-

 

3.1.1     Evidence of incorporation  Such evidence as the Agents may reasonably require that each
Security Party was duly incorporated in its country of incorporation and
remains in existence and, where appropriate, in good standing, with power to
enter into, and perform its obligations under, those of the Security Documents
to which it is, or is intended to be, a party, including (without limitation) a
copy, certified by a director or the secretary or an authorised officer of the
Security Party in question as true, complete,

 

146

 

accurate and unamended, of all documents establishing or limiting the
constitution of each Security Party.

 

3.1.2     Corporate authorities  A copy, certified by a director or the secretary or an authorised
officer of the Security Party in question as true, complete, accurate and
neither amended nor revoked, of a resolution of the directors of each Security
Party and, in respect of Crown Cruise Line Incorporated S.A. only, a resolution
of the shareholders (together, where appropriate, with signed waivers of notice
of any directors’ or shareholders’ meetings) approving, and authorising or
ratifying the execution of, those of the Security Documents to which that
Security Party is or is intended to be a party and all matters incidental
thereto.

 

3.1.3     Officer’s certificate  A certificate signed by a duly authorised officer of each of the
Security Parties setting out the names of the directors, officers and (other
than in the case of the Borrower) shareholders of that Security Party.

 

3.1.4     Power of attorney  The power of attorney of each of the Security Parties under which
any documents are to be executed or transactions undertaken by that Security
Party, notarially attested and legalised if required by the Agents.

 

3.1.5     Vessel documents  Photocopies, certified as true, accurate and complete by a director
or the secretary of the Owner, of (in respect of each Vessel):-

 

(a)       the Bareboat Charter or other contract of
employment of that Vessel which will be in force on the Advance Date;

 

(b)       the
management agreement between the Owner and the Managers relating to that Vessel
(except in relation to WALRUS); and

 

(c)       that
Vessel’s current SMC; and

 

(d)       the
relevant Company’s current DOC;

 

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

 

147

 

3.1.6     Evidence of ownership  Certificate(s) of ownership and encumbrance (or equivalent) issued
by the Registrar of Ships (or equivalent official) at the Vessel’s port of
registry confirming that each Vessel is on the Advance Date owned by her Owner,
free of registered Encumbrances other than Permitted Encumbrances.

 

3.1.7     Evidence of insurance  Evidence that each Vessel is insured in the manner required by the
Security Documents and that letters of undertaking will be issued in the manner
required by the Security Documents, together with (if required by the Agents)
the written approval of the Insurances by an insurance adviser appointed by the
Agents.

 

3.1.8     Confirmation of class  A Certificate of Confirmation of Class for hull and machinery
confirming that each Vessel is classed with the highest class applicable to
vessels of her type with Lloyd’s Register of Shipping, Det Norske Veritas or
such other classification society as may be acceptable to the Agents.

 

3.1.9     Instruction to classification society  A letter of instruction from the Owner of
each Vessel to that Vessel’s classification society in the form required by the
Agents such letter to be served on the classification society after the
occurrence of an Event of Default.

 

3.1.10    Havens 
Such evidence of authority of the signatory for Havens under the Walrus
Tripartite Agreement as the Agents may deem necessary.

 

3.1.11    The Security Documents  The Security Documents, together with all notices and other
documents required by any of them, duly executed and, in the case of the
Mortgages, registered with second priority through the Registrar of Ships (or
equivalent official) at the port of registry of the Vessel concerned.

 

3.1.12    Drawdown Notice  A Drawdown Notice.

 

3.1.13    Process agent  A letter from Sea Containers Services Limited accepting their
appointment by each of the Security Parties as agent for service of Proceedings
pursuant to the Security Documents.

 

148

 

3.1.14    Mandates  Such duly signed forms of mandate, and/or other evidence of the
opening of the Earnings Accounts, as the Agents or any of the Banks may
require.

 

3.1.15    Managers’ confirmation  The written confirmation of the Managers (except Seahawk North
America) that, throughout the Facility Period unless otherwise agreed by the
Agents, they will remain the commercial and technical managers of the Vessels
and that they will not, without the prior written consent of the Agents,
sub-contract or delegate the commercial or technical management of any Vessel
to any third party.

 

3.1.16    The Fee Letter  The Fee Letter countersigned on behalf of the Borrower by way of
acceptance of its terms and all fees payable thereunder having been paid when
due.

 

3.1.17    Legal opinions  Confirmation satisfactory to the Agents that all legal opinions
required by the Agents will be given substantially in the form required by the
Agents.

 

3.1.18    Senior Facility Agreement  Certified true copies of
the Senior Facility Agreement and all security documents required thereby.

 

3.1.19    Deed of Co-ordination and
Subordination 
The Deed of Co-ordination and Subordination duly executed by all parties
thereto.

 

3.1.20    Underlying Documents  Certified true copies of
the Underlying Documents.

 

3.1.21    Citigroup Pledge  A certified true
copy of the Citigroup Pledge duly executed by all parties thereto.

 

3.1.22    Know your customer
requirements  Certified copies of the passport and proof of address of each of the
directors of Silja Oyj Abp.

 

3.2       Conditions Subsequent  The Borrower undertakes to deliver or to
cause to be delivered to the Agents on, or as soon as practicable after, the
Advance Date, the following additional documents and evidence:-

 

149

 

3.2.1     Evidence of registration  Evidence of registration of the Mortgages, in each case with second
priority, with the Registrar of Ships (or equivalent official) at the port of
registry of the Vessel concerned.

 

3.2.2     Letters of undertaking  Letters of undertaking as required by the Security Documents in form
and substance acceptable to the Agents.

 

3.2.3     Legal opinions  The legal opinions referred to in Clause 3.1.17, duly issued.

 

3.2.4     Companies Act registrations  Evidence that the prescribed particulars of
the Security Documents have been delivered to any relevant registrar of
companies within the appropriate statutory time limit.

 

3.2.5     Master’s receipts  The master’s receipt for each of the Mortgages,
if required by the laws of the flag of any Vessel.

 

3.3       No waiver  If the Banks in their sole discretion agree to advance any part of
the Facility to the Borrower before all of the documents and evidence required
by Clause 3.1 have been delivered to or to the order of the Agents, the
Borrower undertakes to deliver all outstanding documents and evidence to or to
the order of the Agents no later than the date specified by the Agents, and the
advance of any part of the Facility shall not be taken as a waiver of the
Agent’s right to require production of all the documents and evidence required
by Clause 3.1.

 

3.4       Form and content  All documents and evidence delivered to the Agents pursuant to this
Clause shall:-

 

3.4.1     be in form and substance acceptable
to the Agents;

 

3.4.2     be accompanied, if required by
the Agents, by translations into the English language, certified in a manner
acceptable to the Agents;

 

3.4.3     if required by the Agents, be
certified, notarised, legalised or attested in a manner acceptable to the
Agents.

 

3.5       Event of Default  No Bank shall be under any obligation to
advance any part of its Commitment nor to act on the Drawdown Notice if, at the
date of the Drawdown Notice or at the date on which the advance of the Drawing
is requested in the

 

150

 

Drawdown Notice, an Event of Default or Potential Event of Default
shall have occurred, or if an Event of Default or Potential Event of Default
would result from the advance of the Drawing.

 

4        Representations
and Warranties

 

The Borrower and each of the Owners represents and warrants to each of
the Banks and to the Agents at the date of this Agreement and (by reference to
the facts and circumstances then pertaining) at the date of each Drawdown
Notice, at each Advance Date and at each Interest Payment Date as follows:-

 

4.1       Incorporation and capacity  Each of the Security Parties is a body corporate duly constituted
and existing and (where applicable) in good standing under the law of its country
of incorporation, in each case with perpetual corporate existence and the
power to sue and be sued, to own its assets and to carry on its business, and
all of the corporate shareholders (if any) of each Security Party are duly
constituted and existing under the laws of their countries of incorporation
with perpetual corporate existence and the power to sue and be sued, to own
their assets and to carry on their business.

 

4.2       Solvency None of the Security Parties is
insolvent or in liquidation or administration or subject to any other
insolvency procedure, and no receiver, administrative receiver, administrator,
liquidator, trustee or analogous officer has been appointed in respect of any
of the Security Parties or all or any substantial part of their assets.

 

4.3       Binding obligations  The Security Documents when duly executed and delivered will
constitute the legal, valid and binding obligations of the Security Parties
enforceable in accordance with their respective terms and each of the Owners
further confirm that their entering into the Owners’ Guarantee in Clause 9 is
for their corporate and commercial benefit.

 

4.4       Satisfaction of conditions  All acts, conditions and things required to be done and satisfied
and to have happened prior to the execution and delivery of the Security
Documents in order to constitute the Security Documents the legal, valid and
binding obligations of the Security Parties in accordance with their respective
terms

 

151

 

have been done, satisfied and have happened in
compliance with all applicable laws.

 

4.5       Registrations and consents  With the exception only of the registrations referred to in Clause
3.2, all (if any) consents, licences, approvals and authorisations of, or
registrations with or declarations to, any governmental authority, bureau or
agency which may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents have been
obtained or made and remain in full force and effect and none of the Owners nor
the Borrower is aware of any event or circumstance which could reasonably be
expected adversely to affect the right of any of the Security Parties to hold
and/or obtain renewal of any such consents, licences, approvals or
authorisations.

 

4.6       Disclosure of material facts 
None of the Owners nor the Borrower is aware
of any material facts or circumstances which have not been disclosed to the
Agents and which might, if disclosed, have adversely affected the decision of a
person considering whether or not to make facilities of the nature contemplated
by this Agreement available to the Borrower.

 

4.7       No material litigation  There is no action, suit, arbitration or administrative proceeding
pending or to its knowledge about to be pursued before any court, tribunal or
governmental or other authority which would, or would be likely to, have a
materially adverse effect on the business, assets, financial condition or
creditworthiness of any of the Security Parties other than as disclosed in
their financial statements.

 

4.8       No breach of law or contract 
The execution, delivery and performance of
the Security Documents will not contravene any contractual restriction or any
law binding on any of the Security Parties or on any shareholder (whether legal
or beneficial) of any of the Security Parties, or the constitutional documents
of any of the Security Parties, nor result in the creation of, nor oblige any
of the Security Parties to create, any Encumbrance over all or any of its assets,
with the exception of the Encumbrances created by or pursuant to the Security
Documents, and, in entering into those of the Security Documents to which it
is, or is to be, a party, and in borrowing the Facility, the Borrower is acting
for its own account.

 

152

 

4.9       Financial information  All financial information
and other documentation submitted to the Agents by or on behalf of the Borrower
in connection herewith is accurate and correct in all material respects and is
not misleading and that to the best of their knowledge the information relating
to the Borrower contained in the confidential information memorandum prepared
in connection herewith is correct in all material respects, does not contain
any untrue statements of a material nature or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading (it being agreed and acknowledged that no representation or warranty
is made concerning the estimates and projections contained therein other than
that they were made in good faith).

 

4.10     Pari Passu  The claims of the Agents
and the Banks hereunder will rank at least pari passu with the claims of all
unsecured creditors of the Borrower and/or the Owners other than claims of such
creditors to the extent that they are statutorily preferred.

 

4.11     No deductions  None of the Security Parties is required to make any deduction or
withholding from any payment which it may be obliged to make to the Agents or
any of the Banks under or pursuant to the Security Documents.

 

4.12     No established place of business in the United Kingdom or United
States  None
of the Security Parties has, nor will any of them have during the Facility
Period, an established place of business (other than the Borrower) in the
United States of America or (other than the Borrower and Silja Holdings
Limited) in the United Kingdom.

 

4.13     No investment business in
Bermuda  The
Borrower is not carrying on investment business in or from Bermuda.

 

4.14     Bareboat Charters  The certified copies of the
Bareboat Charters provided to the Agents pursuant to this Agreement constitute
the full agreement between the Owner and the Bareboat Charterer in relation to
the Vessel in question and each Bareboat Charter has been duly executed and
authorised by the parties to it and is in full force and effect in accordance
with its terms; each Vessel is on hire pursuant to its respective Bareboat
Charter; and none of the Owners is aware of any material breach by any Bareboat
Charterer of any of its obligations under or pursuant to the relevant Bareboat
Charter.

 

153

 

4.15     Use of Facility  The Facility will be used for the purposes specified in the Recital.

 

4.16     Shareholdings  The Borrower is and will
remain the ultimate legal and beneficial owner of all the shares in each Owner.

 

4.17     Underlying Documents  The copies of the
Underlying Documents delivered or to be delivered to the Agents hereunder
constitute the full agreement of the parties thereto and none of the parties
thereto is in default thereunder.

 

5        Repayment
and Prepayment

 

5.1       Repayment  The Borrower agrees to repay the Facility to the Paying Agent as
agent for the Banks by eight (8) consecutive half-yearly Repayment Instalments
each in the sum of six million seven hundred and fifty thousand euro
(€6,750,000), the first Repayment Date being the date which is the earlier of
(i) eighteen calendar months after the Advance Date and (ii) 31
March 2005 and subsequent Repayment Dates being at consecutive intervals
of six calendar months thereafter.

 

5.2       Reduction of Repayment Instalments 
If the aggregate amount of the Facility
advanced to the Borrower is less than the Maximum Loan Amount, the amount of
the Repayment Instalments shall be reduced pro rata.

 

5.3       Prepayment  The Borrower may prepay the Facility in whole or in part in an
amount equal to the amount of a Repayment Instalment or an integral multiple of
that amount (or as otherwise may be agreed by the Paying Agent) provided that
they have first given to the Paying Agent not fewer than thirty days’
prior written notice expiring on a Business Day of their intention to do
so.  Any notice pursuant to this Clause
once given shall be irrevocable and shall oblige the Borrower to make the
prepayment referred to in the notice on the Business Day specified in the
notice, together with all interest accrued on the amount prepaid up to and
including that Business Day.

 

5.4       Prepayment indemnity  If the Borrower shall, subject always to Clause 5.3, make a
prepayment on a Business Day other than the last day of an Interest Period in
respect part of or the whole of the Facility, it shall, in addition to the
amount prepaid and accrued interest, pay to the Paying Agent on behalf of the
Banks any amount which the Paying Agent may certify is necessary to compensate
the Banks

 

154

 

for any Break Costs incurred by the Paying Agent or
any of the Banks as a result of the making of the prepayment in question.

 

5.5       Application of prepayments  Any prepayment in an amount less than the Indebtedness shall be
applied in satisfaction or reduction first of any costs, fees and other
expenses outstanding under this Agreement; secondly of all interest outstanding
in respect of the Facility; and thirdly of the Repayment Instalments in inverse
order of maturity.

 

5.6       No reborrowing  No part of the Facility repaid or prepaid pursuant to this Agreement
may in any circumstances be reborrowed.

 

5.7       Sale of a Vessel  On the sale of any Vessel
(excluding SILJA SYMPHONY and SILJA SERENADE and other than FINNJET, where the
terms of sale are to be determined in accordance with Clause 5.8) during the
Facility Period the Required Sale Prepayment Amount shall be applied by the
Borrower as a prepayment to be applied by the Paying Agent in satisfaction or
reduction of the Facility and the Senior Facility pro rata  PROVIDED ALWAYS that if the Market Value of
the remaining Vessels would be less than one hundred and forty per centum
(140%) of the aggregate of the Facility and the Senior Facility, then the
Borrower will ensure that such further portion of the net sales proceeds as may
be required in order to ensure that the Market Value of the remaining Vessels
shall equal or exceed one hundred and forty per centum (140%) of the Facility
and the Senior Facility shall also be used in or towards prepayment of the
Facility and the Senior Facility pro rata. 
Unless an Event of Default shall then have occurred and be continuing,
the Paying Agent shall promptly release to or to the order of the relevant
Owner the amount (if any) by which the net sale proceeds exceeds the prepayment
required under this Clause 5.7.  The
provisions of Clauses 5.4 and 5.5 shall apply to any such prepayment with the
exception of the remaining Repayment Instalments which shall be reduced pro
rata.

 

5.8       FINNJET prepayment  The Borrower may at its
option exclude the Vessel FINNJET from the security package for this Facility
by making a prepayment in the amount of twelve million six hundred thousand
euro (e12,600,000) (reduced pro rata to reflect any repayments or
prepayments made at any relevant date), such prepayment to be applied by the
Paying Agent pro rata in satisfaction of the Facility and the Senior Facility.  The provisions of Clauses 5.4 and 5.5 shall
apply to any

 

155

 

such prepayment with the exception of the remaining
Repayment Instalments which shall be reduced pro rata.

 

6        Interest

 

6.1       Interest Periods  The period during which the Facility shall
be outstanding pursuant to this Agreement shall be divided into consecutive
Interest Periods of one, two, three or six months’ duration, as selected by the
Borrower by written notice to the Paying Agent not later than 11.00 a.m. on the
third Business Day before the beginning of the Interest Period in question, or
such other duration as may be agreed by the Banks in their discretion.

 

6.2       Beginning and end of Interest Periods  The first Interest Period shall begin
on the Advance Date and the final Interest Period shall end on the Repayment
Date applicable to the final Repayment Instalment.

 

6.3       Interest Periods to meet Repayment Dates  If the Borrower shall select, or the
Borrower and the Banks shall agree, an Interest Period which does not expire on
the next Repayment Date, there shall, in respect of each part of the Facility
equal to a Repayment Instalment falling due for payment before the expiry of
that Interest Period, be a separate Interest Period which shall expire on the
relevant Repayment Date, and the Interest Period selected or agreed shall apply
to the balance of the Facility only.

 

6.4       Interest rate  During each Interest Period interest shall accrue on the Facility
at the rate determined by the Paying Agent to be the aggregate of (a) the
Margin, (b) EURIBOR determined at or about 11.00 a.m. on the second
Business Day prior to the beginning of that Interest Period and (c) the
Mandatory Cost.

 

6.5       Failure to select Interest Period 
If the Borrower at any time fails to select
or agree an Interest Period in accordance with Clause 6.1, the interest rate
applicable after the expiry of the then current Interest Period shall be the
rate determined by the Paying Agent in accordance with Clause 6.4 for
consecutive Interest Periods each of such duration (not exceeding
three months) as the Paying Agent may select.

 

6.6       Accrual and payment of interest 
Interest shall accrue from day to day, shall
be 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

 

156

 

prevailing market practice) and shall be paid by the
Borrower to the Paying Agent on behalf of the Banks on the last day of each
Interest Period and additionally, during any Interest Period exceeding
six months, on the last day of each successive six month period after
the beginning of that Interest Period.

 

6.7       Ending of Interest Periods  Each Interest Period shall, subject to Clauses 6.2 and 6.3, end on
the date which numerically corresponds to the date on which the immediately
preceding Interest Period ended (or, in the case of the first Interest Period,
to the Advance Date) in the calendar month which is the number of months
selected or agreed after the calendar month in which the immediately preceding
Interest Period ended (or, in the case of the first Interest Period, in which
the Advance Date occurred), except that:-

 

6.7.1     if there is no numerically corresponding
date in the calendar month in which the Interest Period ends, the Interest
Period shall end on the last Business Day in that calendar month; and

 

6.7.2     if any
Interest Period would end on a day which is not a Business Day, that Interest
Period shall end on the next succeeding Business Day (unless the next
succeeding Business Day falls in the next calendar month, in which event the
Interest Period in question shall end on the next preceding Business Day).

 

Any
adjustment made pursuant to Clause 6.7.1 or 6.7.2 shall be ignored for the
purpose of determining the date on which any subsequent Interest Period shall
end.

 

6.8                                     Default Rate  If an Event of Default shall occur, the whole of the Indebtedness
shall, from the date of the occurrence of the Event of Default, bear interest
up to the date of actual payment (both before and after judgment) at the
Default Rate, compounded at such intervals as the Paying Agent shall determine,
which interest shall be payable from time to time by the Borrower to the Paying
Agent on behalf of the Banks on demand.

 

6.9       Determinations conclusive  Each determination of an interest rate made by the Paying Agent in
accordance with Clause 6 shall (save in the case of manifest error or on
any question of law) be final and conclusive.

 

157

 

7        Blank
Clause

 

This clause has been left blank deliberately.

 

8        Fees

 

8.1       Fee Letter 
The Borrower shall pay to or to the order of
the Paying Agent the fees, commissions and other sums referred to in the Fee
Letter in the amounts and on the dates set out in the Fee Letter.

 

8.2       Commitment Commission  The Borrower
shall pay to the Paying Agent for the benefit of the Banks a commitment fee of
fifty per centum (50%) of the Margin per annum on the undrawn part of the
Facility from the date hereof until the earlier of the Drawdown Date and the
Availability Termination Date, accruing and payable on each day elapsing on the
basis of a 360 day year which shall be paid in one amount on the earlier of the
Drawdown Date and the Availability Termination Date.

 

9        Owners’
Guarantee and Indemnity

 

9.1       Guarantee and indemnity  In consideration
of the agreement of the Banks to make the Facility available to the Borrower,
each of the Owners:-

 

9.1.1     irrevocably and unconditionally
guarantees to the Agents as agents for the Banks to discharge on first demand
of the Agents all of the Borrower’s Obligations which the Borrower has failed
to discharge, including interest at the Default Rate from the date of demand
until the date of payment, both before and after judgment; and

 

9.1.2     agrees, as a separate and
independent obligation, that, if any of the Borrower’s Obligations are not
recoverable from any of the Owners under Clause 9.1.1 for any reason, that
Owner will be liable to the Agents as agents for the Banks, as a principal
debtor by way of indemnity for the same amount as that for which it would have
been liable had those Borrower’s Obligations been recoverable and agrees to
discharge its liability under this Clause 9.1.2 on first demand of the
Agents together with interest at the Default Rate from the date of demand until
the date of payment, both before and after judgement.

 

158

 

9.2       Continuing security  The Owners’
Guarantee is a continuing security for the full amount of the Borrower’s
Obligations from time to time and shall remain in force notwithstanding the
liquidation of the Borrower or any change in the constitution of the Borrower
or of any of the Banks or the Agents or the absorption of or amalgamation by
any of the Banks or the Agents in or with any other entity or the acquisition
of all or any part of the assets or undertaking of any of the Banks or the
Agents by any other entity.

 

9.3       Preservation of the Owners’ Liabilities  The Banks may
without the consent of any of the Owners and without notice to of any of the
Owners and without in any way releasing or reducing the Owners’ Liabilities:-

 

9.3.1     amend,
novate, supplement or replace all or any of the Security Documents save for any
Security Documents to which any Owner is a party;

 

9.3.2     increase or
reduce the amount of the Facility or vary the terms and conditions for its
repayment or reduction (including, without limitation, the rate and/or method
of calculation of interest);

 

9.3.3     allow to the
Borrower or to any other person any time or other indulgence;

 

9.3.4     renew, vary,
release or refrain from enforcing any of the Security Documents or any other
security, guarantee or indemnity which any of the Agents or Banks may now or in
the future hold from the Borrower or from any other person;

 

9.3.5     compound
with the Borrower or any other person;

 

9.3.6     enter into,
renew, vary or terminate any other agreement or arrangement with the Borrower
or any other person; or

 

9.3.7     release one
or more Owners from their obligations hereunder; or

 

9.3.8     make any
concession to the Borrower or do or omit or neglect to do anything which might,
but for this provision, operate to release or reduce the liability of any
of  the Owners under the Owners’
Guarantee.

 

9.4       Owners’ Liabilities unaffected  The liability of
the Owners under the Owners’ Guarantee shall not be affected by:-

 

159

 

9.4.1     the absence
of or any defective, excessive or irregular exercise of any of the powers of
the Borrower or of any Surety;

 

9.4.2     any security
given or payment made to any of the Banks or the Agents by the Borrower or any
other person being avoided or reduced under any law (whether English or
foreign) relating to bankruptcy or insolvency or analogous circumstance in
force from time to time;

 

9.4.3     the
liquidation, administration, receivership or insolvency of any of the Owners;

 

9.4.4     any other
security, guarantee or indemnity now or in the future held by any of the Banks
or the Agents being defective, void or unenforceable, or the failure of any of
the Banks or the Agents to take any security, guarantee or indemnity;

 

9.4.5     any
compromise or arrangement under Part I or Part VII of the Insolvency Act 1986
or section 425 of the Companies Act 1985 (or any statutory modification or
re-enactment of either of them for the time being in force) or under any (in
the opinion of the Agents) analogous provision of any foreign law;

 

9.4.6     the novation
of any of the Borrower’s Obligations;

 

9.4.7     anything
which would not have released or reduced the liability of any of the Owners had
the liability of that Owner under Clause 9.1.1 been as a principal debtor
and not as a guarantor.

 

9.5       Preservation of Agents’
rights  The
Owners’ Guarantee is in addition to any other security, guarantee or indemnity
now or in the future held by any of the Banks or Agents in respect of the
Borrower’s Obligations, whether from the Borrower, the Owners or any Surety,
and shall not merge with, prejudice or be prejudiced by any such security,
guarantee or indemnity or any contractual or legal right of any of the Banks or
the Agents.

 

9.6       Release  Any release,
settlement, discharge or arrangement relating to the liabilities of any of the
Owners under the Owners’ Guarantee shall be conditional on no payment,
assurance or security received by any of the Banks or the Agents in

 

160

 

respect of the Borrower’s Obligations being avoided or
reduced under any law (whether English or foreign) in force from time to time
relating to bankruptcy, insolvency or any (in the opinion of the Agents)
analogous circumstance and after any such avoidance or reduction the Agents
shall be entitled to exercise all of their rights, powers, discretions and
remedies under or pursuant to the Owners’ Guarantee and/or any other rights,
powers, discretions or remedies which they would otherwise have been entitled
to exercise, as if no release, settlement, discharge or arrangement had taken
place.

 

9.7       Discharge  Following the
complete discharge of the Borrower’s Obligations, the Agents and/or the
Security Agent shall release any security which they may hold for the
liabilities of the Owners under the Owners’ Guarantee provided that they shall
have received a written statement from the Borrower’s directors stating that
the Borrower is not insolvent at the time of the complete discharge of the
Borrower’s Obligations nor will it become insolvent as a result of such
complete discharge of the Borrower’s Obligations.  Upon the sale of a vessel pursuant to Clauses 5.7 or 5.8 (as the
case may be) the Security Agent will discharge the Mortgage over that Vessel,
in accordance with the law of the applicable flag state.  If the Owner of such Vessel is not the owner
of any other Vessel, the Security Agent shall release the Owner from all of its
obligations under the Security Documents (other than, if relevant, the Earnings
Assignment for the relevant Vessel), on receipt of all (or, as the case may be,
the appropriate proportion as specified in Clauses 5.7 or 5.8) of the net sales
proceeds.

 

9.8       Subrogation  Until all claims
of the Banks and the Agents in respect of the Borrower’s Obligations have been
discharged in full:-

 

9.8.1     none of the Owners shall be
entitled to participate in any security held or sums received by any of the
Banks or either Agent in respect of all or any part of the Borrower’s
Obligations;

 

9.8.2     none of the Owners shall stand in
the place of, or be subrogated for, any of the Banks or the Agents in respect
of any security nor take any step to enforce any claim against the Borrower or
any Surety (or the estate or effects of any such person) nor claim or exercise
any right of set off or counterclaim against the Borrower or any Surety nor
make any claim in the bankruptcy or liquidation of the Borrower or any Surety
in respect of any

 

161

 

sums paid by that Owner to any of the Banks or the Agents or in respect
of any sum which includes the proceeds of realisation of any security at any
time held by any of the Banks or the Agents in respect of all or any part of
the Owners’ Liabilities; and

 

9.8.3     none of the Owners shall take any
steps to enforce any claim which it may have against the Borrower or any Surety
without the prior written consent of the Agents and then only on such terms and
subject to such conditions as the Agents may impose.

 

9.9       Continuing security  The Owners’
Liabilities shall be continuing for all purposes (including interest at the
Default Rate) and every sum of money which may now or in the future be or
become due or owing to the Banks or the Agents by the Borrower (or which would
have become due or owing had it not been for the bankruptcy, liquidation or
insolvency of the Borrower) shall be deemed to continue due and owing to the
Banks or the Agents by the Borrower until that sum is actually paid to the
Banks or the Agents, notwithstanding the bankruptcy, liquidation or insolvency
of the Borrower.

 

9.10     Own benefit  The Agents on
behalf of the Banks may, but shall not be obliged to, resort for their own
benefit to any other means of payment at any time and in any order they think
fit without releasing or reducing the Owners’ Liabilities.

 

9.11     Enforcement  The Agents may
enforce the Owners’ Guarantee either before or after resorting to any other
means of payment and, in the latter case, without entitling any of the Owners
to any benefit from or share in any such other means of payment for so long as
the Borrower’s Obligations have not been discharged in full when due.

 

9.12     Other security  The Owners
confirm that they have not taken and will not take without the prior written
consent of the Agents (and then only on such terms and subject to such
conditions as the Agents may impose) any security from the Borrower or from any
Surety in connection with the Owners’ Guarantee, and any security taken by any
of the Owners notwithstanding this Clause shall be held by that Owner in trust
for the Agents absolutely as a continuing security for the Owners’ Liabilities.

 

162

 

9.13     Currency of Account  The Owners’
liability under the Owners’ Guarantee is to discharge the Borrower’s
Obligations in the Currency of Account.

 

9.14     Payment  If at any time
any of the Agents or the Banks receives any payment by or on behalf of any of
the Owners in a currency other than the Currency of Account, that payment shall
take effect as a payment to the Agents or Banks of the amount in the Currency
of Account which the relevant Agent or Bank is able to purchase (after
deduction of any relevant costs) with the amount of the payment so received in
accordance with its usual practice.

 

9.15     Shortfall  To the extent
that any payment to any of the Banks or the Agents (whether by any of the
Owners or any other person and whether under any judgment or court order or
otherwise) in a currency other than the Currency of Account shall on actual
conversion into the Currency of Account fall short of the relevant liability of
the Owners expressed in the Currency of Account then the Owners as a separate
and independent obligation will indemnify the Banks and the Agents against such
shortfall.

 

9.16     Principal debtors  The Owners agree
that they are, and will throughout the Facility Period remain, principal
debtors in respect of the Owners’ Liabilities and not a surety for any Surety.

 

9.17     Default Rate  Interest at the
Default Rate will be payable both before and after judgement on a daily basis
and on the basis of a 360 day year and compounded at such intervals as the
Paying Agent shall in its discretion determine.

 

9.18     New accounts  The Agents may
continue the account(s) of the Borrower or open one or more new accounts for
the Borrower notwithstanding demand under the Owners’ Guarantee and the Owners’
liability at the date of demand shall not be released or affected by any
subsequent payment into or out of any account of the Borrower with any of the
Banks.

 

9.19     Limitation on recourse  The Agents acknowledge and
agree with Seawind Line AB that all moneys, obligations and liabilities which
are to be paid, performed, satisfied or discharged by Seawind Line AB under
this Agreement and any of the Security Documents to which Seawind Line AB is
party shall be recoverable by the Agents only from and to the extent of the
Relevant Security PROVIDED THAT:

 

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9.19.1    the foregoing
limitation of recourse shall be ignored in the determination of the Relevant
Obligations of Seawind Line AB and the Relevant Obligations shall include all
moneys, obligations and liabilities which are to be paid, repaid, performed,
satisfied or discharged by Seawind Line AB, notwithstanding the foregoing
limitation of recourse; and

 

9.19.2    the Agents
shall be entitled (but not obliged and without prejudice to the other powers,
rights and remedies under or pursuant to this Agreement or any of the other
Security Documents or as a matter of law):

 

(a)       to take
any legal action or proceeding to obtain (but not to enforce) a declaratory or
other similar judgment or order as to the obligations and liabilities Seawind
Line AB; and/or

 

(b)       to the
extent that such claim or proof is a necessary procedural step to enable the
realisation or enforcement of the full benefit of the Relevant Security, or to
the exercise by the Agents of any right, title, interest and benefit in, to,
under or pursuant to that Relevant Security, to make or file a claim or proof
in any insolvency proceedings in relation to Seawind Line AB, but not
themselves to take any legal action or proceeding to instigate any such
insolvency proceedings.

 

9.20     Notwithstanding the foregoing
provisions of Clause 9.19, but otherwise subject to any relevant provision of
this Agreement or any of the Security Documents to which Seawind Line AB is a
party, Seawind Line AB shall remain fully liable to the Agents as a result of
the gross negligence or wilful misconduct on the part of Seawind Line AB with
respect to any aspect of the transactions contemplated by this Agreement or any
of the other Security Documents to which Seawind Line AB is a party or the
performance, satisfaction and discharge of all or any of its obligations and
liabilities under and pursuant to this Agreement or the Security Documents.

 

9.21     For the purpose of Clauses 9.19
and 9.20:

 

“Relevant
Security” means:

 

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(a)       the
Mortgage in respect of STAR WIND, together with the relevant collateral pledge
and deed of covenants;

 

(b)       this Agreement;

 

(c)       the Insurance Assignment in
respect of STAR WIND; and

 

(d)       the Earnings Assignment in
respect of STAR WIND.

 

“Relevant
Obligations” means all moneys, obligations and liabilities from time
to time owing or payable, undertaken, incurred or assumed by Seawind Line AB to
or in favour of the Agents under or pursuant to this Agreement and the Security
Documents to which Seawind Line AB is a party.

 

10       Security
Documents

 

As security for the repayment of the Indebtedness, the Borrower shall
execute and deliver to the Agents or cause to be executed and delivered to the
Agents, on or before the Advance Date, the following Security Documents in such
forms and containing such terms and conditions as the Agents shall require:-

 

10.1     the Mortgages  a second preferred or priority mortgage (as the case may be) over
each Vessel together with a collateral deed of covenants and/or pledge
agreement, as appropriate;

 

10.2     the Insurance Assignments  a second priority deed of assignment of the Insurances and
Requisition Compensation of each Vessel;

 

10.3     the Walrus Tripartite Agreement  a second
priority tripartite agreement in respect of WALRUS;

 

10.4     the Group Tripartite Agreements second priority tripartite agreements in respect of SILJA FESTIVAL,
SILJA OPERA, SILJA SYMPHONY and FINNJET;

 

10.5     the Earnings Assignments a second priority deed of assignment of the Earnings and Charter
Rights or Earnings assignment agreements and/or pledge agreements (as
appropriate) of each Vessel;

 

10.6     the Charter Guarantee Assignment a second priority deed of assignment of the Charter Guarantee in
respect of WALRUS;

 

165

 

10.7     the Share Pledges  a second priority pledge of all the
issued shares in Silja Holdings Limited and a second priority pledge of all the
issued shares in Silja Oyj Abp.

 

11       Agency and
Trust

 

11.1     Appointment  Each of the Banks appoints the Paying Agent its agent for the
purpose of administering payments relating to the Facility and the Security
Documents and the Security Agent as its security trustee to administer all
other aspects of the Facility and to hold the benefit of the Security
Documents.

 

11.2     Authority  Each of the Banks irrevocably authorises the Paying Agent (subject
to Clauses 11.4 and 11.19):-

 

11.2.1    to collect, receive, release or
pay any money on its behalf;

 

and each of the Banks authorises the Security Agent (subject to Clauses
11.4 and 11.19):-

 

11.2.2    to execute the Security Documents
(other than this Agreement) on its behalf;

 

11.2.3    acting on the instructions from
time to time of an Instructing Group to give or withhold any waivers, consents
or approvals under or pursuant to any of the Security Documents;

 

11.2.4    acting on the instructions from
time to time of and Instructing Group to exercise, or refrain from exercising,
any discretions under or pursuant to any of the Security Documents; and

 

11.2.5    to enforce the Security Documents
on its behalf.

 

The Agents shall have no duties or responsibilities as agents or as
security trustee other than those expressly conferred on it by the Security
Documents and shall not be obliged to act on any instructions from the Banks or
an Instructing Group if to do so would, in the opinion of the relevant Agent,
be contrary to any provision of the Security Documents or to any law, or would
expose the relevant Agent to any actual or potential liability to any third
party.

 

166

 

11.3     Trust  The Security Agent agrees and declares, and each of the Banks
acknowledges, that, subject to the terms and conditions of this Clause, the
Security Agent holds the Trust Property on trust for the Banks, in accordance
with their respective Proportionate Shares, absolutely.  Each of the Banks agrees that the
obligations, rights and benefits vested in the Security Agent in its capacity
as security trustee shall be performed and exercised in accordance with this
Clause.  The Agents in their capacity as
paying agent and security agent respectively shall have the benefit of all of the
provisions of this Agreement benefiting them in their capacity as paying agent
and security agent for the Banks, and all the powers and discretions conferred
on trustees by the Trustee Act 1925 (to the extent not inconsistent with this
Agreement).  In addition:-

 

11.3.1    the Security
Agent (and any attorney, agent or delegate of the Security Agent) may indemnify
itself or himself out of the Trust Property against all liabilities, costs,
fees, damages, charges, losses and expenses sustained or incurred by it or him
in relation to the taking or holding of any of the Trust Property or in
connection with the exercise or purported exercise of the rights, trusts,
powers and discretions vested in the Security Agent or any other such person by
or pursuant to the Security Documents or in respect of anything else done or
omitted to be done in any way relating to the Security Documents; and

 

11.3.2    the Banks
acknowledge that the Security Agent shall be under no obligation to insure any
property nor to require any other person to insure any property and shall not
be responsible for any loss which may be suffered by any person as a result of
the lack or insufficiency of any insurance; and

 

11.3.3    the Security
Agent and the Banks agree that the perpetuity period applicable to the trusts
declared by this Agreement shall be the period of eighty years from the date of
this Agreement.

 

11.4      Limitations on authority  Except with the prior written consent of each of the Banks, neither
Agent shall be entitled to :-

 

11.4.1    release or
vary any security given for the Borrower’s obligations under this Agreement;
nor

 

167

 

11.4.2    waive the
payment of any sum of money payable by any of the Security Parties under the
Security Documents; nor

 

11.4.3    change the
meaning of the expressions “the  Instructing Group” or “Margin” (except that the
Agents shall be allowed in their absolute discretion to negotiate and agree
with the Borrower on any increase the amount of the Margin); nor

 

11.4.4    exercise, or
refrain from exercising, any discretion, or give or withhold any consent, the
exercise or giving of which is, by the terms of this Agreement, expressly
reserved to the Banks; nor

 

11.4.5    extend the
due date for the payment of any sum of money payable by any of the Security
Parties under the Security Documents; nor

 

11.4.6    take or
refrain from taking any step if the effect of such action or inaction may lead
to the increase of the obligations of a Bank under any of the Security
Documents; nor

 

11.4.7    agree to
change the currency in which any sum is payable under the Security Documents
(other than in accordance with the terms of the Security Documents); nor

 

11.4.8    agree to
amend this Clause 11.4; nor

 

11.4.9    waive any
material condition precedent.

 

11.5     Liability  Neither the Agents nor any of their directors, officers, employees
or agents shall be liable to the Banks for anything done or omitted to be done
by the Agents under or in connection with the Security Documents unless as a
result of the Agents’ gross negligence or wilful misconduct.

 

11.6     Acknowledgement  Each of the Banks acknowledges that:-

 

11.6.1    it has not relied on any
representation made by the Agents or any of the Agents’ directors, officers,
employees or agents or by any other person acting or purporting to act on
behalf of the Agents to induce it to enter into any of the Security Documents;

 

168

 

11.6.2    it has made and will continue to
make without reliance on the Agents, and based on such documents and other
evidence as it considers appropriate, its own independent investigation of the
financial condition and affairs of the Security Parties in connection with the
making and continuation of the Facility;

 

11.6.3    it has made its own appraisal of
the creditworthiness of the Security Parties;

 

11.6.4    the Agents shall not have any duty
or responsibility at any time to provide it with any credit or other
information relating to any of the Security Parties unless that information is
received by the Agents pursuant to the express terms of the Security Documents.

 

Each of the Banks agrees that it will not assert nor seek to assert
against any director, officer, employee or agent of the Agents or against any
other person acting or purporting to act on behalf of the Agents any claim
which it might have against them in respect of any of the matters referred to
in this Clause.

 

11.7     Limitations on responsibility 
The Agents shall have no responsibility to
any of the Security Parties or to the Banks on account of:-

 

11.7.1      the failure
of a Bank or of any of the Security Parties to perform any of their respective
obligations under the Security Documents;

 

11.7.2      the
financial condition of any of the Security Parties;

 

11.7.3      the
completeness or accuracy of any statements, representations or warranties made
in or pursuant to any of the Security Documents, or in or pursuant to any
document delivered pursuant to or in connection with any of the Security
Documents;

 

11.7.4      the
negotiation, execution, effectiveness, genuineness, validity, enforceability,
admissibility in evidence or sufficiency of any of the Security Documents or of
any document executed or delivered pursuant to or in connection with any of the
Security Documents.

 

11.8     The Agents’
rights  The
Agents may:-

 

169

 

11.8.1      assume that
all representations or warranties made or deemed repeated by any of the
Security Parties in or pursuant to any of the Security Documents are true and
complete, unless, in their capacity as Agents, they have acquired actual
knowledge to the contrary; and

 

11.8.2      assume that
no Event of Default or Potential Event of Default has occurred unless, in their
capacity as Agents, they have acquired actual knowledge to the contrary; and

 

11.8.3      rely on any
document or Communication believed by them to be genuine; and

 

11.8.4      rely as to
legal or other professional matters on opinions and statements of any legal or
other professional advisers selected or approved by them; and

 

11.8.5      rely as to
any factual matters which might reasonably be expected to be within the
knowledge of any of the Security Parties on a certificate signed by or on
behalf of that Security Party; and

 

11.8.6      refrain
from exercising any right, power, discretion or remedy unless and until
instructed to exercise that right, power, discretion or remedy and as to the
manner of its exercise by the Banks (or, where applicable, by an Instructing
Group) and unless and until the Agents have received from the Banks any payment
which the Agents may require on account of, or any security which the Agents
may require for, any costs, claims, expenses (including legal and other
professional fees) and liabilities which they considers they may incur or
sustain in complying with those instructions.

 

11.9     The Agents’
duties  The
Agents shall:-

 

11.9.1       if requested in writing to do
so by a Bank, make enquiry and advise the Banks as to the performance or
observance of any of the provisions of the Security Documents by any of the
Security Parties or as to the existence of an Event of Default; and

 

170

 

11.9.2       inform the Banks promptly of
any Event of Default of which the Agents have actual knowledge.

 

11.10    No deemed knowledge  The Agents shall not be deemed to have actual knowledge of the
falsehood or incompleteness of any representation or warranty made or deemed
repeated by any of the Security Parties or actual knowledge of the occurrence
of any Event of Default or Potential Event of Default unless a Bank or any of
the Security Parties shall have given written notice thereof to the Agents in
their capacity as Agents.  Any
information acquired by the Agents other than specifically in their capacity as
Agents shall not be deemed to be information acquired by the Agents in their
capacity as Agents.

 

11.11    Other business  The Agents may, without any liability to account to the Banks,
generally engage in any kind of banking or trust business with any of the
Security Parties or any of their respective subsidiaries or associated
companies or with a Bank as if they were not the Agents.

 

11.12    Indemnity  The Banks shall, promptly on the Agents’ request, reimburse the
Agents in their respective Proportionate Shares, for, and keep the Agents fully
indemnified in respect of:-

 

11.12.1     all amounts payable by the
Borrower to the Agents pursuant to Clause 19 to the extent that those amounts
are not paid by the Borrower;

 

11.12.2     all liabilities, damages, costs
and claims sustained or incurred by the Agents in connection with the Security
Documents, or the performance of its duties and obligations, or the exercise of
its rights, powers, discretions or remedies under or pursuant to any of the
Security Documents; or in connection with any action taken or omitted by the
Agents under or pursuant to any of the Security Documents, unless in any case
those liabilities, damages, costs or claims arise solely from the Agents’
wilful misconduct.

 

11.13    Employment of agents  In performing their duties and exercising its rights, powers,
discretions and remedies under or pursuant to the Security Documents, the
Agents shall be entitled to employ and pay agents to do anything which the
Agents are empowered to do under or pursuant to the Security Documents
(including the

 

171

 

receipt of money and documents and the payment of money) and to act or
refrain from taking action in reliance on the opinion of, or advice or
information obtained from, any lawyer, banker, broker, accountant, valuer or
any other person believed by the Agents in good faith to be competent to give
such opinion, advice or information.

 

11.14    Distribution of payments  The Agents shall pay promptly to the order of each of the Banks that
Bank’s Proportionate Share of every sum of money received by the Agents
pursuant to the Security Documents or the Mortgagees’ Insurances (with the
exception of any amounts payable pursuant to Clause 8 and/or the Fee Letter and
any amounts which, by the terms of the Security Documents, are paid to an Agent
for the account of that Agent alone or specifically for the account of one or
more Banks) and until so paid such amount shall be held by the Agents on trust
absolutely for that Bank  PROVIDED
ALWAYS that the Agents may set off from any amounts owing under this Clause
11.14 sums owed to the Agents (and remaining unpaid) under Clause 11.12.

 

11.15    Reimbursement  The Agents shall have no liability to pay any sum to a Bank until
they have themselves received payment of that sum.  If, however, the Agents do pay any sum to a Bank on account of
any amount prospectively due to that Bank pursuant to Clause 11.14 before
they have themselves received payment of that amount, and the Agents do not in
fact receive payment within five Business Days after the date on which that
payment was required to be made by the terms of the Security Documents or the
Mortgagees’ Insurances, each Bank receiving any such payment will, on demand by
the Agents, refund to the Agents an amount equal to the amount received by it,
together with an amount sufficient to reimburse the Agents for any amount which
the Agents may certify that they have been required to pay by way of interest
on money borrowed to fund the amount in question during the period beginning on
the date on which that amount was required to be paid by the terms of the
Security Documents or the Mortgagees’ Insurances and ending on the date on
which the Agents receive reimbursement.

 

11.16    Redistribution of payments  Unless otherwise agreed between the Banks and the Agents, if at any
time a Bank receives or recovers by way of set-off, the exercise of any lien or
otherwise (other than from any assignee or transferee of or sub-participant in
that Bank’s Commitment), an amount greater than that Bank’s

 

172

 

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

 

11.16.1     that Bank shall promptly notify
the Agents (which shall promptly notify each other Bank);

 

11.16.2     that Bank shall pay to the Agents
an amount equal to the Excess Amount within ten days of its receipt or recovery
of the Excess Amount; and

 

11.16.3     the Agents shall treat that
payment as if it were a payment by the Security Party in question on account of
the sum owed to the Banks as aforesaid and shall account to the Banks in
respect of the Excess Amount in accordance with the provisions of this Clause.

 

However,
if a Bank has commenced any Proceedings to recover sums owing to it under the
Security Documents and, as a result of, or in connection with, those
Proceedings has received an Excess Amount, the Agents shall not distribute any
of that Excess Amount to any other Bank which had been notified of the Proceedings
and had the legal right to, but did not, join those Proceedings or commence and
diligently prosecute separate Proceedings to enforce its rights in the same or
another court.

 

11.17    Rescission of Excess Amount  If all or any part of any Excess Amount is rescinded or must
otherwise be restored to any of the Security Parties or to any other third
party, the Banks which have received any part of that Excess Amount by way of
distribution from the Agents pursuant to this Clause shall repay to the Agents
for the account of the Bank which originally received or recovered the Excess
Amount, the amount which shall be necessary to ensure that the Banks share
rateably in accordance with their Proportionate Shares in the amount of the
receipt or payment retained, together with interest on that amount at a rate
equivalent to that (if any) paid by the Bank receiving or recovering the Excess
Amount to the person to whom that Bank is liable to make payment in respect of
such amount, and Clause 11.16.3 shall apply only to the retained amount.

 

173

 

11.18    Proceedings  Each of the Banks and the Agents shall notify one another of the
proposed commencement of any Proceedings under any of the Security Documents
prior to their commencement.

 

11.19    Instructions  Where the Agents are authorised or directed to act or refrain from
acting in accordance with the instructions of the Banks or of an Instructing
Group each of the Banks shall provide the Agents with instructions within three
Business Days of the Agents’ request (which request may be made orally or in
writing).  If a Bank does not provide
the Agents with instructions within that period, that Bank shall be bound by
the decision of the Agents.  Nothing in
this Clause shall limit the right of the Agents to take, or refrain from
taking, any action without obtaining the instructions of the Banks or an
Instructing Group if the Agents in their discretion consider it necessary or
appropriate to take, or refrain from taking, such action in order to preserve
the rights of the Banks under or in connection with the Security
Documents.  In that event, the Agents
will notify the Banks of the action taken by them as soon as reasonably
practicable, and the Banks agree to ratify any action taken by the Agents
pursuant to this Clause.

 

11.20    Communications  Any Communication under this Clause shall be given, delivered, made
or served, in the case of the Agents (in their capacity as Paying Agent,
Security Agent or as one of the Banks) and in the case of the other Banks, at
the address or fax number indicated in Schedule 1.

 

11.21    Payments  All amounts payable to a Bank under this Clause shall be paid to
such account at such bank as that Bank may from time to time direct in writing
to the Agents.

 

11.22    Retirement  Subject to a successor being appointed in accordance with this
Clause, the Paying Agent may retire as paying agent and the Security Agent may
resign as security trustee at any time without assigning any reason by giving
to the Borrower and the Banks notice of its intention to do so, in which event
the following shall apply:-

 

11.22.1     the Banks may within thirty days
after the date of the relevant Agent’s notice appoint a successor to act as
paying agent and/or security trustee or, if they fail to do so, that Agent may
appoint any other bank or financial institution as its successor;

 

174

 

11.22.2     the resignation of an Agent shall
take effect simultaneously with the appointment of its successor on written
notice of that appointment being given to the Borrower and the Banks;

 

11.22.3     that Agent shall thereupon be
discharged from all further obligations as agent or security trustee as the
case may be but shall remain entitled to the benefit of the provisions of this
Clause;

 

11.22.4     that Agent’s successor and each
of the other parties to this Agreement shall have the same rights and
obligations amongst themselves as they would have had if that successor had
been a party to this Agreement.

 

11.23    No fiduciary relationship  Except as provided in Clauses 11.3 and 11.14, the Agents shall not
have any fiduciary relationship with or be deemed to be trustees of or for a
Bank and nothing contained in any of the Security Documents shall constitute a
partnership between any two or more Banks or between the Agents and any Bank.

 

11.24    The Agents as Banks  The expression “the Banks” when used in the Security
Documents includes each Agent in its capacity as one of the Banks.  The Agents shall be entitled to exercise their
rights, powers, discretions and remedies under or pursuant to the Security
Documents in their individual capacity as one of the Banks in the same manner
as any other Bank and as if it were not also an Agent.

 

12       Covenants

 

The Borrower and the Owners covenant with the Banks and with the Paying
Agent’s in the following terms.

 

12.1     Negative covenants of the Borrower

 

The Borrower will not without the Paying Agent’s prior written consent
permit any change in the legal or beneficial ownership and control of the
Owners from that advised to the Paying Agent at the date of this Agreement.

 

12.2     Negative Covenants of the Owners

 

None of the Owners will without the Paying Agent’s
prior written consent:-

 

175

 

12.2.1      no sale of Vessels  sell or otherwise dispose of the Vessel owned by it or any shares in
that Vessel nor agree to do so, other than:-

 

(a)         a sale of FINNJET in
accordance with the provisions of Clause 5.8; or

 

(b)         a sale of any other Vessel in
accordance with the provisions of Clause 5.7; nor

 

12.2.2      no chartering after Event of Default  following the occurrence
and during the continuation of an Event of Default let its Vessel on charter or
renew or extend any charter or other contract of employment of its Vessel (nor
agree to do so); nor

 

12.2.3      no change in management  appoint anyone other than
the Managers as commercial or technical managers of the Vessels, nor terminate
or materially vary the arrangements for the commercial or technical management
of the Vessels, nor permit the Managers to sub-contract or delegate the
commercial or technical management of any Vessel to any third party; nor

 

12.2.4      no amendment to Bareboat Charters  agree to any amendment or
supplement to a Bareboat Charter which would or which might reasonably be
expected materially to diminish the rights of the Security Agent as assignee of
the Earnings and Charter Rights under the Bareboat Charter in question; nor

 

12.2.5      no disposals or third party rights  dispose of or create or permit
to arise or continue any Encumbrance or other third party right on or over all
or any part of its present or future assets or undertaking over which security
has been granted to Banks (or to the Security Agent on behalf of the Banks)
other than any Permitted Encumbrances existing from time to time; nor

 

12.2.6      no borrowings  (other than Silja Oyj Abp and Seawind Line
AB and other than in connection with any arrangements made between members of
the Group only) borrow any money or incur any obligations under leases other
than with respect to financings relating to FINNJET; nor

 

176

 

12.2.7      no repayments  (other than Silja Oyj Abp and Seawind Line
AB and other than in connection with any arrangements made between members of
the Group only) repay any loans made to it other than with respect to
financings relating to FINNJET; nor

 

12.2.8      no substantial liabilities  (other than Silja Oyj Abp
and Seawind Line AB and other than in connection with any arrangements made
between members of the Group only) except in the ordinary course of business,
incur any liability to any third party which is in the opinion of the Paying
Agent of a substantial nature; nor

 

12.2.9      no loans or other financial commitments  (other than Silja Oyj Abp
and Seawind Line AB and other than in connection with any arrangements made
between members of the Group only) make any loan nor enter into any guarantee
or indemnity or otherwise voluntarily assume any actual or contingent liability
in respect of any obligation of any other person; nor

 

12.2.10     no dividends if
an Event of Default has occurred and is continuing or if an Event of Default
would occur as a result of such action (other than Silja Oyj Abp) pay any
dividends or make any other distributions to shareholders or make any
intercompany loans or issue any new shares.

 

12.3     Positive covenants

 

12.3.1      Registration of Vessels The Owners undertake to maintain the registration of the Vessels
under the flags indicated in Schedule 3 for the duration of the Facility
Period or under Swedish flag or such other flag as the Agents may approve,
acting reasonably, provided always that upon any change of flag, the relevant
Owner delivers or procures the delivery to the Agents of a second priority
mortgage over the relevant Vessel in a form reasonably acceptable to the
Agents, together with a deed of covenants (if customary) and an opinion
satisfactory to the Agents in relation to the registration of the Vessel and
the new mortgage and such other matters as the Agents may reasonably require.

 

12.3.2      Valuations  The Owners undertake to provide valuations
of each of the Vessels once in each year and upon the sale of any Vessel, from
two

 

177

 

Approved Brokers, one to be appointed by the Paying Agent and one to be
appointed by the Borrower and with such valuations being made on a charter free
basis.

 

12.3.3      Financial statements  The Borrower
will supply to the Paying Agent, without request, the consolidated annual financial
statements of the Borrower for each financial year of the Borrower ending
during the Facility Period, containing (amongst other things) the Borrower’s
profit and loss account for, and balance sheet at the end of, each such
financial year, prepared in accordance with generally accepted accounting
principles and practices applicable to companies incorporated in Bermuda
consistently applied, and audited by a well known and reputable firm of
chartered accountants (or equivalent), in each case within one hundred and
twenty days of the end of the financial year to which they relate.  The Borrower will also supply to the Paying
Agent, without request, the unaudited consolidated quarterly financial
statements of the Borrower for each quarter ending during the Facility Period,
as above, in each case within sixty days of the end of the quarter to which
they relate.

 

12.3.4      Other information  The Borrower will promptly supply to
the Paying Agent copies of all financial and other information and explanations
as the Paying Agent may from time to time require in connection with the
operation of the Vessels and the Borrower’s profit and liquidity, traffic
statistics and cash flows, and will procure that the Paying Agent be given the
like information and explanations relating to all other Security Parties.

 

12.3.5      Evidence of goodstanding  The Borrower will from time
to time on the request of the Paying Agent provide the Paying Agent with
evidence in form and substance satisfactory to the Paying Agent that the Security
Parties and all corporate shareholders of any of the Security Parties (other
than the Borrower) remain in good standing.

 

12.3.6      Evidence of current COFR  Without limiting the
Borrower’s obligations under Clause 12.3.4, if any Vessel trades in US waters,
the Borrower will from time to time on the request of the Paying Agent provide
the Paying Agent with such evidence as the Paying Agent may reasonably require

 

178

 

that such Vessel has a valid and current Certificate of Financial
Responsibility pursuant to the United States Oil Pollution Act 1990.

 

12.3.7      Performance of the Bareboat Charters  Each of the Owners
undertakes to perform the Bareboat Charter (or other contract of employment for
its Vessel) to which it may at any time during the Facility Period be party, in
accordance with its terms.

 

12.3.8      ISM Code compliance  The Owners will:-

 

(a)       procure that each of the
Vessels remains for the duration of the Facility Period subject to a SMS;

 

(b)       maintain a valid and current
SMC for each of the Vessels throughout the Facility Period;

 

(c)       procure that each Company
maintains a valid and current DOC throughout the Facility Period;

 

(d)       immediately notify the Paying
Agent in writing of any actual or threatened withdrawal, suspension,
cancellation or modification of the SMC of any Vessel or of the DOC of any
Company;

 

(e)       immediately notify the Paying
Agent in writing of any “accident” or “major  non-conformity” with a cost
implication of an amount of more than five per centum (5%) of the insured value
of the relevant Vessel, as each of those terms is defined in the Guidelines on
the Implementation of the International Safety Management Code by
Administrations adopted by the Assembly of the International Maritime Organisation
pursuant to Resolution A.788(19), and of the steps being taken to remedy the
situation; and

 

(f)       not without the prior written
consent of the Paying Agent (which will not be unreasonably withheld) change
the identity of any Company.

 

12.3.9      Payment of tax  The Borrower and each of the Owners
will file all requisite tax returns and will pay all tax as shown to be due and
payable

 

179

 

on such returns or any of the assessments made against it (other than
those being contested in good faith).

 

12.3.10     Notification of Event of Default  The Borrower
will immediately notify the Paying Agent in writing of the occurrence of any
Event of Default or Potential Event of Default.

 

12.3.11     Financial covenants   The Borrower will:-

 

(a)       maintain a minimum Consolidated
Tangible Net Worth of three hundred million Dollars ($300,000,000);

 

(b)       maintain a maximum Consolidated
Tangible Net Worth Ratio of 3.5:1;

 

(c)       maintain minimum Consolidated
Cash Reserves of fifty million Dollars ($50,000,000) provided that in the event
of any transaction or series of transactions involving a change of control of
any material assets of the Borrower, at the request of the Borrower, the Agent
may in its sole discretion acting reasonably enter into good faith negotiations
in order to reduce the minimum amount of the Consolidated Cash Reserves to take
into account the change in circumstances brought about by the change of control
of the assets; and

 

(d)       provide the Paying Agent,
without request, with a compliance certificate in relation to the above (in the
form set out in Appendix C or such other form as the Paying Agent may accept in
its discretion) on a quarterly basis concurrently with the delivery of its
financial statements pursuant to Clause 12.3.3 and in relation to Clause
12.3.11 (c) only upon the Paying Agent’s request which may be made at any time
after an occurrence of an Event of Default or if the Paying Agent has reason to
believe that the Borrower is in breach of its covenants contained in this
Clause 12.3.11.  The first compliance
certificate shall be provided by reference to the quarter ending 31
December 2003 and

 

180

 

subsequent certificates will be provided at three month intervals
thereafter or as requested pursuant to this clause.

 

13       Earnings
Accounts

 

13.1     Maintenance of accounts  The Owners shall maintain the Earnings Accounts with Nordea Bank
Finland plc and Svenska Handelsbanken AB (publ) for the duration of the Facility
Period.  The Earnings Account held with
Nordea Bank Finland plc shall be free of Encumbrances and rights of set off
other than as created by or pursuant to the Security Documents.  The Borrower undertakes to use its best
efforts to procure that the Earnings Account held with Svenska Handelsbanken AB
(publ) shall also become free of Encumbrances and rights of set off other than
as created by or pursuant to the Security Documents as soon as reasonably
practicable.

 

13.2     Earnings  The Owners shall procure that there is credited to the Earnings
Accounts all Earnings (after deduction only of Operating Expenses) and any
Requisition Compensation in accordance with the Earnings Assignments.

 

13.3     Relocation of Earnings Accounts  At any time following the
occurrence and during the continuation of an Event of Default, the Paying Agent
may without the consent of the Borrower relocate the Earnings Accounts to any
other branch of the Paying Agent, without prejudice to the continued
application of this Clause and the rights of the Banks under or pursuant to the
Security Documents.

 

14       Events Of Default

 

14.1     The Paying Agent’s rights  If any of the events set out in Clause 14.2 occurs, the Paying Agent
may (and, if instructed to do so by an Instructing Group, shall) by notice to
the Borrower declare the Banks to be under no further obligation to the
Borrower under or pursuant to this Agreement and may (and, if instructed to do
so by an Instructing Group, shall) declare all or any part of the Indebtedness
(including such unpaid interest as shall have accrued) to be immediately
payable, in which event the Indebtedness (or the part of the Indebtedness
referred to in the Paying Agent’s notice) shall immediately become due and
payable without any further demand or notice of any kind.

 

14.2     Events of Default  The events referred to in Clause 14.1 are:-

 

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14.2.1      payment default  if the Borrower defaults in the
payment of any part of the Indebtedness within three (3) Business Days of it
becoming due; or

 

14.2.2      other default  if any of the Security Parties fails to observe or perform any of
the covenants, conditions, undertakings, agreements or obligations on its part
contained in any of the Security Documents or shall in any other way be in
breach of or do or cause to be done any act repudiating or evidencing an
intention to repudiate any of the Security Documents and such default (if, in
the reasonable opinion of the Agents, capable of remedy) is not remedied within
fifteen (15) days after notice from the Agents thereof; or

 

14.2.3      misrepresentation or breach of warranty  if any representation or warranty
made or repeated, or any other information given, by any of the Security
Parties to the Banks or to the Agents in or leading up to or during the
currency of any of the Security Documents, or in or pursuant to any notice or
other document delivered to the Agents under or pursuant to any of the Security
Documents, is false or incorrect or misleading in any respect which the Agents in
their discretion consider to be material and (unless in the reasonable opinion
of the Agents it is incapable of remedy) action has not been taken by the
Borrower to ensure that such representation or warranty is rendered correct
within fifteen (15) days after notice from the Agents thereof; or

 

14.2.4      execution 
if a distress or execution or other process
of a court or authority is levied on any of the property of any of the Security
Parties before or after final judgment or by order of any competent court or
authority for an amount in excess of five million euro (e5,000,000)
or its equivalent in any other currency and is not satisfied, removed or
discharged within twenty (20) days of levy; or

 

14.2.5      insolvency events  if any of the Security Parties:-

 

(a)       resolves to appoint, or applies
for, or consents to, the appointment of a receiver, administrative receiver,
trustee, administrator or liquidator of itself or of all or any substantial
part of its assets; or

 

182

 

(b)       is unable or admits its
inability to pay its debts as they fall due; or

 

(c)       makes a general assignment for
the benefit of creditors or enters into a moratorium on payment of any of its
indebtedness; or

 

(d)       ceases trading or threatens to
cease trading; or

 

(e)       has appointed an Inspector
under the Companies Act 1985 or any statutory provision which the Agents in
their discretion consider analogous thereto; or

 

14.2.6      insolvency proceedings  if any proceedings are commenced or threatened, or any order or
judgment is given by any court, for the bankruptcy, liquidation, winding up,
administration or re-organisation of any of the Security Parties or for the
appointment of a receiver, administrative receiver, administrator, liquidator
or trustee of any of the Security Parties or of all or any substantial part of
the assets of any of the Security Parties, or if any person appoints or
purports to appoint such receiver, administrative receiver, administrator,
liquidator or trustee; or

 

14.2.7      impossibility or illegality  if any event occurs which would, or would with the passage of time,
render performance of any of the Security Documents by any of the Security
Parties impossible, unlawful or unenforceable by the Banks or the Agents; or

 

14.2.8      conditions subsequent  if any of the conditions set out in Clause 3.2 is not satisfied
within the time reasonably required by the Paying Agent; or

 

14.2.9      revocation or modification of consents
etc.  if any
consent, licence, approval, authorisation, filing, registration or other
requirement of any governmental, judicial or other public body or authority
which is now, or which at any time during the Facility Period becomes,
necessary to enable any of the Security Parties to comply with any of their
obligations in or pursuant to any of the Security Documents is not obtained or
is revoked, suspended, withdrawn or withheld, or is modified in a manner which
the Agents consider is, or may be, prejudicial to the interests of the Banks or
ceases to remain in full force and effect; or

 

183

 

14.2.10     curtailment of business  if the business
of any of the Security Parties is wholly or partially curtailed or suspended by
any intervention by or under authority of any government, or if all or a
substantial part of the undertaking, property or assets of any of the Security
Parties is seized, nationalised, expropriated or compulsorily acquired by or
under authority of any government; or

 

14.2.11     loss of Vessel  if any Vessel or any other vessel
which may from time to time be mortgaged to the Banks (or to the Security Agent
on their behalf) as security for the repayment of all or any part of the
Indebtedness is destroyed, abandoned, confiscated, forfeited, condemned as
prize or becomes a Total Loss, except that a Total Loss shall not be an Event
of Default if:-

 

(a)       the Vessel or other vessel is
insured in accordance with the Security Documents; and

 

(b)       no insurer has refused to meet
or has disputed the claim for Total Loss and it is not apparent to the Agents
in their discretion that any such refusal or dispute is likely to occur; and

 

(c)       payment of all insurance
proceeds in respect of the Total Loss is made in full to the Agents on behalf
of the Banks within one hundred and fifty days of the occurrence of the
casualty giving rise to the Total Loss in question

 

PROVIDED THAT no Event of Default shall arise under this Clause 14.2.12
if either (a) the Borrower pays to the Paying Agent within thirty (30) days of
the relevant date a sum equal to the insured value of the relevant Vessel or
(b) the Borrower provides the Security Agent within thirty (30) days of the
relevant date with alternative security in form and substance satisfactory to
the Agents.

 

14.2.12     acceleration of other indebtedness  if any other
indebtedness or obligation for Borrowed Money (in excess of two million euros
(€2,000,000) in respect of the Borrower, Silja Holdings Limited or Silja Oyj
Abp) of any of the Security Parties becomes due or capable of being

 

184

 

declared due prior to its stated maturity by reason of default on the
part of that Security Party, or is not repaid or satisfied at maturity; or

 

14.2.13     reduction of capital  if any of the Security Parties reduces its authorised or issued or
subscribed capital; or

 

14.2.14     challenge to registration  if the
registration of any Vessel or any Mortgage is contested or becomes void or
voidable or liable to cancellation or termination, or if the validity or
priority of any Mortgage is contested PROVIDED ALWAYS that if such
circumstances occur in relation to a Vessel other than “SILJA SYMPHONY” or
“SILJA SERENADE” then it shall only constitute an Event of Default if, within
fifteen (15) days of a notice from the Agents, the Borrower shall fail to make
a prepayment in an amount equal to the Required Sale Prepayment Amount of the
relevant Vessel or charge in favour of the Security Agent (with second
priority) an equal amount as security for the Indebtedness (with second
priority), or (at the sole discretion of the Agents) grant alternative security
to the Security Agent in a form and on terms acceptable to the Agents; or

 

14.2.15     notice of termination  if any of the
Owners gives notice to the Agents to determine its obligations under the
Owners’ Guarantee; or

 

14.2.16     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 and the Agents in their discretion consider that, as a
result, the security conferred by the Security Documents is materially
prejudiced  PROVIDED ALWAYS that if such
circumstances occur in relation to a Vessel other than “SILJA SYMPHONY” or
“SILJA SERENADE” then it shall only constitute an Event of Default if, within
fifteen (15) days of a notice from the Agents, the Borrower shall fail to make
a prepayment in an amount equal to the Required Sale Prepayment Amount of the
relevant Vessel or charge in favour of the Security Agent (with second
priority) an equal amount as security for the Indebtedness, or (at the sole discretion
of the Agents) grant alternative security to the Security Agent in a form and
on terms acceptable to the Agents; or

 

185

 

14.2.17     notice of termination  if any of the
Owners gives notice to the Agents to determine its obligations under the
Owners’ Guarantee; or

 

14.2.18     material adverse change etc.  if there occurs any
material adverse change in the business, assets or financial condition of any
of the Security Parties from that pertaining at the date of this Agreement
which may reasonably be considered to affect the ability of such Security Party
to comply with its obligations under any one or more of the Security Documents;
or

 

14.2.19     change in ownership or control if there is a change in the legal or beneficial ownership of the
Security Parties (other than the Borrower) or any change in the control of the
Borrower; or

 

14.2.20     NYSE Listing  if the Borrower ceases to be listed
on the New York Stock Exchange; or

 

14.2.21     analogous events  if any event which (in the opinion of
the Agents) is analogous to any of the events set out in Clauses 14.2.5 or
14.2.6 above shall occur.

 

15       Set-Off
And Lien

 

15.1     Set-off  The Borrower and each Owner irrevocably authorises the Agents and
the Banks at any time after all or any part of the Indebtedness shall have
become due and payable to set off without notice any liability of the Borrower
to any of the Banks or to the Agents (whether present or future, actual or
contingent, and irrespective of the branch or office, currency or place of
payment) against any credit balance from time to time standing on any account
of the Borrower or an Owner (whether current or otherwise and whether or not
subject to notice) with any branch of the Agents or of any Bank in or towards satisfaction
of the Indebtedness and, in the name of the Agents or that Bank or the Borrower
or an Owner, to do all acts (including, without limitation, converting or
exchanging any currency) and execute all documents which may be required to
effect such application.

 

15.2     Application  The Borrower and the Owners irrevocably authorise the Agents to
apply all sums which the Agents may receive:-

 

186

 

15.2.1      pursuant to a sale or other
disposition of a Vessel or any right, title or interest in a Vessel; or

 

15.2.2      by way of payment to the Agents
of any sum in respect of the Insurances, Earnings, Requisition Compensation or
Charter Rights of a Vessel; or

 

15.2.3      otherwise arising under or in
connection with any of the Security Documents

 

in or towards satisfaction, or by way of retention on account, of the
Indebtedness, in such manner as is set out in the Deed of Coordination.

 

16       Assignment and Sub-Participation

 

16.1     Right to assign  Each of the Banks may assign or transfer any of its rights and/or
obligations under or pursuant to this Agreement to any other branch of that
Bank or to any other Bank without the prior written consent of the Borrower or
the Owners or to any other bank or financial institution with the prior written
consent of the Borrower and the Owners (such consent not to be unreasonably
withheld), and may grant sub-participations in all or any part of its
Commitment provided it has first obtained the written consent of the Borrower
and the Owners (which shall not be unreasonably withheld) which consent shall
not be required if an Event of Default has occurred and is continuing.  The Borrower may not assign any of its
rights hereunder.

 

16.2     Borrower’s co-operation  Subject always to Clause 16.1, the Borrower and the Owners will
co-operate fully with the Banks in connection with any assignment, transfer or
sub-participation; will execute and procure the execution of such documents as
the Banks may require in connection therewith; irrevocably authorise the Agents
to sign any Transfer Certificate on their behalf; and irrevocably authorise the
Agents and the Banks to disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the Security
Parties, the Facility or the Security Documents which the Agents or the Bank
may in their discretion consider necessary or desirable.

 

187

 

16.3     Rights of assignee  Any assignee, transferee or sub-participant of a Bank shall (unless
limited by the express terms of the assignment, transfer or sub-participation)
take the full benefit of every provision of the Security Documents benefiting
that Bank.

 

16.4     Transfer Certificates If any Bank wishes to transfer any of its rights and/or obligations
under or pursuant to this Agreement, it may do so by delivering to the Paying
Agent a duly completed Transfer Certificate, in which event on the Transfer
Date:-

 

16.4.1      to the extent that that Bank
seeks to transfer its rights and/or obligations, the Borrower (on the one hand)
and the Bank in question (on the other) shall be released from all further
obligations towards the other(s);

 

16.4.2      the Borrower (on the one hand)
and the Transferee (on the other) shall assume obligations towards the other(s)
identical to those released pursuant to Clause 16.4.1;

 

16.4.3      the Agents, each of the Banks
and the Transferee shall have the same rights and obligations between
themselves as they would have had if the Transferee had been an original party
to this Agreement as a Bank; and

 

16.4.4      the Transferee shall pay to the
Paying Agent for its own account a transfer fee of two thousand five hundred
euro (e2,500).

 

Each Bank irrevocably authorises the Security Agent to sign on its
behalf any Transfer Certificate relating to the transfer of any of the rights
and/or obligations of any other Bank.

 

16.5     Security Documents Unless otherwise expressly provided in any Security Document or
otherwise expressly agreed between a Bank and any proposed Transferee and
notified by that Bank to the Agents on or before the relevant Transfer Date,
there shall automatically be assigned to the Transferee with any transfer of a
Bank’s rights and/or obligations under or pursuant to this Agreement the rights
of that Bank under or pursuant to the Security Documents (other than this
Agreement) which relate to the portion of the Bank’s rights and/or obligations
transferred by the relevant Transfer Certificate.

 

188

 

17       Payments,
Mandatory Prepayment, Reserve Requirements and Illegality

 

17.1     Payments 
All amounts payable by the Borrower under or
pursuant to any of the Security Documents shall be paid to such accounts at
such banks as the Paying Agent may from time to time direct to the Borrower,
and (unless payable in any other Currency of Account) shall be paid in euro in
same day funds (or such funds as are required for settlement of international
payments for immediate value).  Payments
shall be deemed to have been received by the Paying Agent on the date on which
the Paying Agent receives authenticated advice of receipt, unless that advice
is received by the Paying Agent on a day other than a Business Day or at a time
of day (whether on a Business Day or not) when the Paying Agent in its
discretion considers that it is impossible or impracticable for the Paying
Agent to utilise the amount received for value that same day, in which event
the payment in question shall be deemed to have been received by the Paying
Agent on the Business Day next following the date of receipt of advice by the
Paying Agent.

 

17.2     No deductions or withholdings  All payments (whether
of principal or interest or otherwise) to be made by the Borrower pursuant to
the Security Documents shall, subject only to Clause 17.3, be made free and
clear of and without deduction for or on account of any Taxes or other
deductions, withholdings, restrictions, conditions or counterclaims of any
nature.

 

17.3     Grossing-up  If at any time any law requires (or is interpreted to require) the
Borrower to make any deduction or withholding from any payment, or to change
the rate or manner in which any required deduction or withholding is made, the
Borrower will promptly notify the Paying Agent and, simultaneously with making
that payment, will pay to the Paying Agent whatever additional amount (after
taking into account any additional Taxes on, or deductions or withholdings
from, or restrictions or conditions on, that additional amount) is necessary to
ensure that, after making the deduction or withholding, the Paying Agent and
the Banks receive a net sum equal to the sum which they would have received had
no deduction or withholding been made.

 

17.4     Evidence of deductions  If at any time the Borrower is required by law to make any deduction
or withholding from any payment to be made by it pursuant to any of the
Security Documents, the Borrower will pay the amount required to be deducted or
withheld to the relevant authority within the time allowed under the applicable

 

189

 

law and will, no later than thirty days after making that payment,
deliver to the Paying Agent an original receipt issued by the relevant
authority, or other evidence acceptable to the Paying Agent, evidencing the
payment to that authority of all amounts required to be deducted or withheld.

 

17.5     Rebate 
If the Borrower makes any deduction or
withholding from any payment under or pursuant to any of the Security
Documents, and any Bank or the Paying Agent subsequently receives a refund or
allowance from any tax authority which that Bank or the Paying Agent identifies
as being referable to that deduction or withholding, the Paying Agent or the
Bank in question shall, as soon as reasonably practicable, pay to the Borrower
an amount equal to the amount of the refund or allowance received, if and to
the extent that it may do so without prejudicing its right to retain that
refund or allowance and without putting itself in any worse financial position
than that in which it would have been had the deduction or withholding not been
required to have been made.  Nothing in
this Clause shall be interpreted as imposing any obligation on the Paying Agent
or any Bank to apply for any refund or allowance nor as restricting in any way
the manner in which the Paying Agent and the Banks, organise their tax affairs,
nor as imposing on the Paying Agent or on any Bank any obligation to disclose
to the Borrower any information regarding its tax affairs or tax computations.

 

17.6     Adjustment of due dates  If any payment or transfer of funds to be made under any of the
Security Documents, other than a payment of interest on the Facility shall be
due on a day which is not a Business Day, that payment shall be made on the
next succeeding Business Day (unless the next succeeding Business Day falls in
the next calendar month in which event the payment shall be made on the next
preceding Business Day).  Any such
variation of time shall be taken into account in computing any interest in
respect of that payment.

 

17.7     Change in law  If, by reason of the introduction of any law, or any change in any
law, or the interpretation or administration of any law, or in compliance with
any request or requirement from any central bank or any fiscal, monetary or
other authority:-

 

17.7.1      any Bank or the Paying Agent (or
the holding company of any Bank or the Paying Agent) shall be subject to any
Tax with respect to payments of all or any part of the Indebtedness; or

 

190

 

17.7.2      the basis of Taxation of
payments to any Bank or to the Paying Agent in respect of all or any part of
the Indebtedness shall be changed; or

 

17.7.3      any reserve requirements shall
be imposed, modified or deemed applicable against assets held by or deposits in
or for the account of or loans by any branch of any Bank except to the extent
included in the Mandatory Cost; or

 

17.7.4      the manner in which any Bank or
the Paying Agent allocates capital resources to its obligations under this
Agreement or any ratio (whether cash, capital adequacy, liquidity or otherwise)
which any Bank or the Paying Agent is required or requested to maintain shall
be affected; or

 

17.7.5      there is imposed on any Bank or
on the Paying Agent (or on the holding company of any Bank or the Paying Agent)
any other condition in relation to the Indebtedness or the Security Documents;

 

and the result of any of the above shall be to increase the cost to any
Bank (or to the holding company of any Bank) of that Bank making or maintaining
its Commitment, or to cause any Bank to suffer (in its opinion) a material
reduction in the rate of return on its overall capital below the level which it
reasonably anticipated at the date of this Agreement and which it would have
been able to achieve but for its entering into this Agreement and/or performing
its obligations under this Agreement, the Bank affected shall notify the Paying
Agent and the Borrower shall from time to time pay to the Paying Agent on
demand for the account of the Bank affected the amount which shall compensate
that Bank or the Paying Agent (or the relevant holding company) for such
additional cost or reduced return.  A
certificate signed by an authorised signatory of the Paying Agent or of the
Bank affected setting out the amount of that payment and the basis of its
calculation shall be submitted to the Borrower and shall be conclusive evidence
of such amount save for manifest error or on any question of law.

 

17.8     Illegality Notwithstanding anything
contained in the Security Documents, the obligations of the Banks to advance or
maintain the Facility shall terminate in the event that a change in any law or
in the interpretation of any law by any authority charged with its
administration shall make it unlawful for any Bank to advance or maintain its
Commitment.  In that event the Bank
affected shall notify the Paying

 

191

 

Agent and the Paying Agent shall, by written notice to the Borrower,
declare that Bank’s obligations to be immediately terminated.  If all or any part of the Facility shall
have been advanced by such Bank to the Borrower, that portion of the Indebtedness
(including all accrued interest) shall be prepaid within thirty days from the
date of such notice.  Clause 5.3 shall
apply to that prepayment if it is made on a day other than the last day of an
Interest Period.

 

17.9     Changes in market circumstances 
If at any time a Bank determines (which
determination shall be final and conclusive and binding on the Borrower) that,
by reason of changes affecting the London Interbank market, adequate and fair
means do not exist for ascertaining the rate of interest on the Facility
pursuant to this Agreement:-

 

17.9.1      that Bank shall give notice to
the Paying Agent and the Paying Agent shall give notice to the Borrower of the
occurrence of such event; and

 

17.9.2      the Paying Agent shall as soon
as reasonably practicable certify to the Borrower in writing the effective cost
to such Bank of maintaining the Facility for such further period as shall be
selected by such Bank and the rate of interest payable by the Borrower for that
period; or, if that is not acceptable to the Borrower,

 

17.9.3      the Paying Agent on behalf of
the affected Bank will negotiate with the Borrower in good faith with a view to
modifying this Agreement to provide a substitute basis for the Facility which
is financially a substantial equivalent to the basis provided for in this
Agreement.

 

If, within thirty days of the giving of the notice referred to in
Clause 17.9.1, the Borrower and the Paying Agent fail to agree in writing
on a substitute basis for the Facility, the Borrower will immediately prepay
the relevant portion of the Indebtedness. 
Clause 5.3 shall apply to that prepayment if it is made on a day other
than the last day of an Interest Period.

 

17.10    Non-availability of currency  If a Bank is for
any reason unable to obtain euro in the London Interbank market and is, as a
result, or as a result of any other contingency affecting the London Interbank
market, unable to advance or maintain its Commitment in euro, that Bank shall
give notice to the Paying Agent and the

 

192

 

Paying Agent shall give notice to the Borrower and such Bank’s
obligations to make the Facility available shall immediately cease.  In that event, if all or any part of the
Facility shall have been advanced by the Banks to the Borrower, the Paying
Agent on behalf of the Banks will negotiate with the Borrower in good faith
with a view to establishing a mutually acceptable basis for funding the
relevant portion of the Facility from an alternative source.  If the Paying Agent and the Borrower have
failed to agree in writing on a basis for funding the Facility from an
alternative source by 11.00 a.m. on the second Business Day prior to the end of
the then current Interest Period, the Borrower will (without prejudice to its
other obligations under or pursuant to this Agreement, including, without
limitation, its obligation to pay interest on the Facility, arising on the
expiry of the then current Interest Period) prepay the relevant portion of the
Indebtedness to the Paying Agent on behalf of the Banks on the expiry of the
then current Interest Period.

 

18       Communications

 

18.1     Method 
Except for Communications pursuant to Clause 11, which shall be made or
given in accordance with Clause 11.20, any Communication may be given,
delivered, made or served (as the case may be) under or in relation to this
Agreement by letter or fax and shall be in the English language and sent
addressed:-

 

18.1.1      in the case of the Banks or the
Agents to the communications details of the Agents set out in Schedule 1;

 

18.1.2      in the case of the Borrower or
the Owners to the Communications Address;

 

or to such other address or fax number as the Banks, the Agents, the
Owners or the Borrower may designate for themselves by written notice to the
others.

 

18.2     Timing  A Communication shall be deemed to have been duly given, delivered,
made or served to or on, and received by, the Borrower:-

 

18.2.1      in the case of a fax when the
sender receives one or more transmission reports showing the whole of the
Communication to have been transmitted to the correct fax number;

 

193

 

18.2.2      if delivered to an officer of
the Borrower or left at the Communications Address at the time of delivery or
leaving; or

 

18.2.3      if posted, at 9.00 a.m. on the
Business Day after posting by prepaid first class post.

 

A Communication shall only be deemed to have been duly given,
delivered, made or served to or on, and received by, the Banks or the Agents on
actual receipt of the whole of that Communication by the Agents.

 

18.3     Indemnity  The Borrower shall indemnify the Agents and each of the Banks
against any cost, claim, liability, loss or expense (including legal fees and
any Value Added Tax or any similar or replacement tax (if applicable)) which the
Agents or any of the Banks may sustain or incur as a consequence of any
Communication sent by or on behalf of the Borrower by fax not being received by
its intended recipient, or being received incomplete, or by reason of any
Communication purportedly having been sent by or on behalf of the Borrower
having been sent fraudulently.

 

19       General
Indemnities

 

19.1     Currency  In the event of an Agent or a Bank receiving or recovering any
amount payable under any of the Security Documents in a currency other than the
Currency of Account, and if the amount received or recovered is insufficient
when converted into the Currency of Account at the date of receipt to satisfy
in full the amount due, the Borrower shall, on the Paying Agent’s written
demand, pay to the Paying Agent such further amount in the Currency of Account
as is sufficient to satisfy in full the amount due and that further amount
shall be due to the Paying Agent on behalf of the Banks as a separate debt
under this Agreement.

 

19.2     Costs and expenses  The Borrower will, within fourteen days of the Security Agent’s
written demand, reimburse the Security Agent (on behalf of itself and the
Banks) for all costs and expenses (including Value Added Tax or any similar or
replacement tax if applicable) of and incidental to:-

 

19.2.1      the negotiation, preparation,
execution and registration of the Security Documents (whether or not any of the
Security Documents are actually

 

194

 

executed or registered and whether or not all or any part of the
Facility is advanced);

 

19.2.2      any amendments, addenda or
supplements to any of the Security Documents (whether or not completed);

 

19.2.3      any other documents which may at
any time be required by any Bank or by the Security Agent to give effect to any
of the Security Documents or which any Bank or the Security Agent is entitled
to call for or obtain pursuant to any of the Security Documents (including,
without limitation, all premiums and other sums from time to time payable by the
Security Agent in relation to the Mortgagees’ Insurances); and

 

19.2.4      the exercise of the rights,
powers, discretions and remedies of the Banks and/or the Security Agent under
or pursuant to the Security Documents.

 

19.3     Events of Default  The Borrower shall indemnify the Banks and the Agents from time to
time on demand against all losses and costs incurred or sustained by any Bank
or by the Agents as a consequence of any Event of Default, including (without
limitation) any Break Costs.

 

19.4     Funding costs  The Borrower shall indemnify the Banks and the Paying Agent from
time to time on demand against all losses and costs incurred or sustained by
any Bank or by the Paying Agent if, for any reason, the Drawing is not advanced
to the Borrower after the Drawdown Notice has been given to the Paying Agent,
or is advanced on a date other than that requested in the Drawdown Notice
(unless, in either case, as a result of any default by the Paying Agent or by
any of the Banks) including (without limitation) any Break Costs.

 

19.5     Protection and enforcement  The Borrower shall indemnify the Banks and the Agents from time to
time on demand against all losses, costs and liabilities which any Bank or
either Agent may from time to time sustain, incur or become liable for in or
about the protection, maintenance or enforcement of the rights conferred on the
Banks and/or the Agents by the Security Documents or in or about the exercise
or purported exercise by the Banks and/or the Agents of any of the rights,
powers, discretions or remedies vested in them under or arising out of the
Security Documents, including (without limitation) any losses, costs and
liabilities which

 

195

 

any Bank or either Agent may from time to time sustain, incur or become
liable for by reason of the Banks or the Agents being mortgagees of any Vessel
and/or a lender to the Borrower, or by reason of any Bank or either Agent being
deemed by any court or authority to be an operator or controller, or in any way
concerned in the operation or control, of any Vessel.

 

19.6     Liabilities of Banks and Agents 
The Borrower will from time to time
reimburse the Banks and the Agents on demand for all sums which any Bank or the
Agents may pay or become actually or contingently liable for on account of the
Borrower or in connection with any Vessel (whether alone or jointly or jointly
and severally with any other person) including (without limitation) all sums
which any Bank or either Agent may pay or guarantees which any Bank or either
Agent may give in respect of the Insurances, any expenses incurred by any Bank
or by either Agent in connection with the maintenance or repair of any Vessel
or in discharging any lien, bond or other claim relating in any way to any
Vessel, and any sums which any Bank or either Agent may pay or guarantees which
they may give to procure the release of any Vessel from arrest or detention.

 

19.7     Taxes 
The Borrower shall pay all Taxes to which
all or any part of the Indebtedness or any of the Security Documents may be at
any time subject and shall indemnify the Agents and the Banks on demand against
all liabilities, costs, claims and expenses resulting from any omission to pay
or delay in paying any such Taxes.

 

20       Miscellaneous

 

20.1     Waivers  No failure or delay on the part of either Agent or of a Bank in
exercising any right, power, discretion or remedy under or pursuant to any of
the Security Documents, nor any actual or alleged course of dealing between the
Agents or any Bank and the Borrower, shall operate as a waiver of, or
acquiescence in, any default on the part of any Security Party, unless
expressly agreed to do so in writing by the Agents, nor shall any single or
partial exercise by either Agent or a Bank of any right, power, discretion or
remedy preclude any other or further exercise of that right, power, discretion
or remedy, or the exercise by either Agent or a Bank of any other right, power,
discretion or remedy.

 

196

 

20.2     No oral variations  No variation or amendment of any of the Security Documents shall be
valid unless in writing and signed on behalf of the Banks and the Agents.

 

20.3     Severability  If at any time any provision of any
of the Security Documents is invalid, illegal or unenforceable in any respect
that provision shall be severed from the remainder and the validity, legality
and enforceability of the remaining provisions shall not be affected or
impaired in any way.

 

20.4     Successors etc.  The Security Documents shall be binding on the Security Parties and
on their successors and permitted transferees and assignees, and shall inure to
the benefit of the Banks and the Agents and their respective successors,
transferees and assignees.  The Borrower
may not assign nor transfer any of its rights under or pursuant to any of the
Security Documents without the prior written consent of the Agents.

 

20.5     Further assurance  If any provision of the Security Documents shall be invalid or
unenforceable in whole or in part by reason of any present or future law or any
decision of any court, or if the documents at any time held by the Banks or by
the Agents on their behalf are considered by the Banks for any reason
insufficient to carry out the terms of this Agreement, then from time to time
the Borrower will promptly, on demand by the Agents, execute or procure the
execution of such further documents as in the opinion of the Banks are
necessary to provide adequate security for the repayment of the Indebtedness.

 

20.6     Other arrangements  The Banks and the Agents may, without prejudice to their rights
under or pursuant to the Security Documents, at any time and from time to time,
on such terms and conditions as they may in their discretion determine, and
without notice to the Borrower, grant time or other indulgence to, or compound
with, any other person liable (actually or contingently) to the Banks and/or
the Agents in respect of all or any part of the Indebtedness, and may release
or renew negotiable instruments and take and release securities and hold funds
on realisation or suspense account without affecting the liabilities of the
Borrower or the rights of the Banks and the Agents under or pursuant to the
Security Documents.

 

20.7     Advisers  The Borrower irrevocably authorises the Agents, at any time and from
time to time during the Facility Period, to consult insurance advisers on any
matters relating to the Insurances, including, without limitation, the
collection of insurance

 

197

 

claims, and from time to time to consult or retain advisers or
consultants to monitor or advise on any other claims relating to the
Vessels.  The Borrower and the Owners
will provide such advisers and consultants with all information and documents
which they may from time to time require and will reimburse the Agents on
demand for all costs and expenses incurred by the Agents in connection with the
consultation or retention of such advisers or consultants.

 

20.8     Delegation  The Banks and the Agents may at any time and from time to time
delegate to any person any of their rights, powers, discretions and remedies
pursuant to the Security Documents on such terms as they may consider
appropriate (including the power to sub-delegate).

 

20.9     Rights etc. cumulative  Every right, power, discretion and remedy conferred on the Banks
and/or the Agents under or pursuant to the Security Documents shall be
cumulative and in addition to every other right, power, discretion or remedy to
which they may at any time be entitled by law or in equity.  The Banks and the Agents may exercise each
of their rights, powers, discretions and remedies as often and in such order as
they deem appropriate.  The exercise or the
beginning of the exercise of any right, power, discretion or remedy shall not
be interpreted as a waiver of the right to exercise that or any other right,
power, discretion or remedy either simultaneously or subsequently.

 

20.10    No enquiry  The Banks and the Agents shall not be concerned to enquire into the
powers of the Security Parties or of any person purporting to act on behalf of
any of the Security Parties, even if any of the Security Parties or any such
person shall have acted in excess of their powers or if their actions shall
have been irregular, defective or informal, whether or not any Bank or either
Agent had notice thereof.

 

20.11    Continuing security  The security constituted by the Security Documents shall be
continuing and shall not be satisfied by any intermediate payment or
satisfaction until the Indebtedness shall have been repaid in full and neither
the Banks nor the Agents shall be under any further actual or contingent
liability to any third party in relation to the Vessels, the Insurances,
Earnings, Requisition Compensation or Charter Rights or any other matter referred
to in the Security Documents.

 

20.12    Security cumulative  The security constituted by the Security Documents shall be in
addition to any other security now or in the future held by the Banks or by the

 

198

 

Agents for or in respect of all or any part of the Indebtedness, and
shall not merge with or prejudice or be prejudiced by any such security or any
other contractual or legal rights of the Banks or the Agents, nor affected by
any irregularity, defect or informality, or by any release, exchange or
variation of any such security. 
Section 93 of the Law of Property Act 1925 and all provisions which
the Agents consider analogous thereto under the law of any other relevant
jurisdiction shall not apply to the security constituted by the Security
Documents.

 

20.13    No liability  Neither the Banks nor the Agents, nor any agent or employee of any
Bank or of either Agent, nor any receiver and/or manager appointed by the
Agents, shall be liable for any losses which may be incurred in or about the
exercise of any of the rights, powers, discretions or remedies of the Banks
and/or the Agents under or pursuant to the Security Documents nor liable as
mortgagee in possession for any loss on realisation or for any neglect or
default of any nature for which a mortgagee in possession might otherwise be
liable unless such loss is as a result of the Banks’ and/or Agents’ gross
negligence or wilful misconduct.

 

20.14    Rescission of payments etc.  Any discharge, release or reassignment by the Banks and/or the
Agents of any of the security constituted by, or any of the obligations of any
Security Party contained in, any of the Security Documents shall be (and be
deemed always to have been) void if any act (including, without limitation, any
payment) as a result of which such discharge, release or reassignment was given
or made is subsequently wholly or partially rescinded or avoided by operation
of any law.

 

20.15    Subsequent Encumbrances  If the Security Agent receives notice of any subsequent Encumbrance
affecting any Vessel or all or any part of the Insurances, Earnings,
Requisition Compensation, Charter Rights or the Accounts, the Security Agent
may open a new account in its books for the Borrower.  If the Security Agent does not open a new account, then (unless
the Security Agent gives written notice to the contrary to the Borrower) as
from the time of receipt by the Security Agent of notice of such subsequent
Encumbrance, all payments made to the Security Agent shall be treated as having
been credited to a new account of the Borrower and not as having been applied
in reduction of the Indebtedness.

 

199

 

20.16    Releases  If any Bank or either Agent shall at any time release any party from
all or any part of any of the Security Documents, the liability of any other
party to the Security Documents shall not be varied or diminished.

 

20.17    Discretions  Unless otherwise expressly indicated, where any Bank or either Agent
is stated in the Security Documents to have a discretion and/or where the
opinion of any Bank or either Agent is referred to and/or where the consent,
agreement or approval of any Bank or either Agent is required for any course of
action, or where anything is required to be acceptable to any Bank or to either
Agent, the Banks and the Agents shall have a sole, absolute and unfettered
discretion and/or may give or withhold their consent, agreement or approval at
their sole, absolute and unfettered discretion provided always that they act
reasonably.

 

20.18    Certificates  Any certificate or statement signed by an authorised signatory of
the Paying Agent purporting to show the amount of the Indebtedness (or any part
of the Indebtedness) or any other amount referred to in any of the Security
Documents shall, save for manifest error or on any question of law, be
conclusive evidence as against the Borrower of that amount.

 

20.19    Survival of representations and warranties  The representations and warranties on
the part of the Borrower contained in this Agreement shall survive the
execution of this Agreement and the advance of the Facility.

 

20.20    Counterparts  This Agreement may be executed in any number of counterparts each of
which shall be original but which shall together constitute the same
instrument.

 

20.21    Contracts (Rights of Third Parties) Act
1999  No
term of this Agreement is enforceable by a person who is not a party to it.

 

20.22    Conflicts  In the event of there being any conflict
between this Agreement and any of the Security Documents, this Agreement shall
prevail except in respect of the pledge agreements relating to the Swedish and
Finnish Vessels.

 

21       Law and Jurisdiction

 

21.1     Governing law  This Agreement shall in all respects be governed by and interpreted
in accordance with English law.

 

200

 

21.2     Jurisdiction  For the exclusive benefit of the
Banks and the Agents, the parties to this Agreement irrevocably agree that the
courts of England are to have jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement and that any Proceedings may
be brought in those courts.

 

21.3     Alternative jurisdictions  Nothing contained in this Clause shall limit the right of the Banks
or the Agents to commence any Proceedings against the Borrower in any other
court of competent jurisdiction nor shall the commencement of any Proceedings
against the Borrower in one or more jurisdictions preclude the commencement of
any Proceedings in any other jurisdiction, whether concurrently or not.

 

21.4     Waiver of objections  The Borrower irrevocably waives any objection which it may now or in
the future have to the laying of the venue of any Proceedings in any court
referred to in this Clause, and any claim that those Proceedings have been
brought in an inconvenient or inappropriate forum, and irrevocably agrees that
a judgment in any Proceedings commenced in any such court shall be conclusive
and binding on it and may be enforced in the courts of any other jurisdiction.

 

21.5     Service of process  Without prejudice to the right of the Agents and the Banks to use
any other method of service permitted by law, the Borrower irrevocably agrees
that any writ, notice, judgment or other legal process shall be sufficiently
served on it if addressed to it and left at or sent by post to the Address for
Service, and in that event shall be conclusively deemed to have been served at
the time of leaving or, if posted, at 9.00 a.m. on the Business Day after
posting by prepaid first class post.

 

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

 

201

 

SCHEDULE 1

 

The Banks and the Commitments

 

 

	
  The
  Banks

  	
   

  	
  The Commitments (in €)

  
	
   

  	
   

  	
   

  
	
  Nordea
  Bank Danmark A/S

  	
   

  	
   

  
	
  Christiansbro

  	
   

  	
   

  
	
  Strandgade 3

  	
   

  	
   

  
	
  DK-1401

  	
   

  	
   

  
	
  Copenhagen K

  	
   

  	
   

  
	
  Denmark

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax: + 45 3333 5820/+ 45 3333 6690

  	
   

  	
   

  
	
  FAO:  International Loan Services

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Nordea
  Bank Finland Plc

  	
   

  	
  18,768,750

  
	
  Satamaradankatu 5

  	
   

  	
   

  
	
  Helsinki

  	
   

  	
   

  
	
  FIN-00020

  	
   

  	
   

  
	
  Finland

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
  +358 753 6816

  	
   

  	
   

  
	
  FAO:

  	
  Tellervo Koski/Taina Salo

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HSH Nordbank AG

  	
   

  	
  14,981,250

  
	
  Martensdamm
  6

  	
   

  	
   

  
	
  D-24103
  Kiel

  	
   

  	
   

  
	
  Federal
  Republic of Germany

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
  +49
  40 3333 34269

  	
   

  	
   

  
	
  FAO:

  	
  Matthias
  Happich/Jannita Werner – Shipping Department

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fortis
  Bank S.A./N.V.

  	
   

  	
  7,500,000

  
	
  23
  Camomile Street

  	
   

  	
   

  
	
  London
  EC3A 7PP

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
  + 44
  20 7444 8889

  	
   

  	
   

  
	
  FAO:

  	
  Paul
  Barnes/Raymond Ko

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Governor and Company of the Bank of Scotland

  	
   

  	
  7,500,000

  
	
  11
  Earl Grey Street

  	
   

  	
   

  
	
  Edinburgh
  EH3 9N

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
  + 44
  20 7012 9457

  	
   

  	
   

  
	
  FAO:

  	
  Iain
  Ross/Clayton Scott

  	
   

  	
   

  

 

202

 

	
  DVB
  Bank AG, London Branch

  	
   

  	
  5,250,000

  
	
  80
  Cheapside

  	
   

  	
   

  
	
  London

  	
   

  	
   

  
	
  EC2V
  6EE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
  +44
  20 7618 9652

  	
   

  	
   

  
	
  FAO:

  	
  Alison
  Scott – Loans Administration

  	
   

  	
   

  

 

203

 

SCHEDULE 2

 

The Co-Arrangers

 

	
  HSH
  Nordbank AG

  
	
  Martensdamm
  6

  
	
  D-24103
  Kiel

  
	
  Federal
  Republic of Germany

  
	
   

  
	
  Fax:

  	
  +49
  40 3333 34269

  
	
  FAO:

  	
  Matthias
  Happich/Jannita Werner – Shipping Department

  
	
   

  
	
  Fortis
  Bank S.A./N.V.

  
	
  23
  Camomile Street

  
	
  London
  EC3A 7PP

  
	
   

  
	
  Fax:

  	
  +44
  20 7444 8889

  
	
  FAO:

  	
  Paul
  Barnes/Raymond Ko

  
	
   

  
	
  The
  Governor and Company of the Bank of Scotland

  
	
  11
  Earl Grey Street

  
	
  Edinburgh
  EH3 9N

  
	
   

  
	
  Fax:

  	
  +44
  20 7012 9457

  
	
  FAO:

  	
  Iain Ross/Clayton
  Scott

  

 

204

 

SCHEDULE 3

 

The Owners and the Vessels

 

	
  Name
  of

  Owner

  	
   

  	
  Country of

  Incorporation

  	
   

  	
  Registered

  Office

  	
   

  	
  Name of

  Vessel

  	
   

  	
  Flag of

  Vessel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Silja
  Oyj Abp

  	
   

  	
  Finland

  	
   

  	
  Bulevardi
  1A

  P.O. Box 659

  FIN-00101

  Finland

  	
   

  	
  SILJA
  FESTIVAL

  	
   

  	
  Sweden

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Silja
  Oyj Abp

  	
   

  	
  Finland

  	
   

  	
  Bulevardi
  1A

  P.O. Box 659

  FIN-00101

  Finland

  	
   

  	
  SILJA
  SYMPHONY

  	
   

  	
  Sweden

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Silja
  Oyj Abp

  	
   

  	
  Finland

  	
   

  	
  Bulevardi
  1A

  P.O. Box 659

  FIN-00101

  Finland

  	
   

  	
  SILJA
  SERENADE

  	
   

  	
  Finland

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Silja
  Cruise AB

  	
   

  	
  Sweden

  	
   

  	
  Positionen
  8

  115 74

  Stockholm

  Sweden

  	
   

  	
  SILJA
  OPERA

  	
   

  	
  Sweden

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sally
  AB

  	
   

  	
  Finland

  	
   

  	
  Torggatan
  14

  22100

  Mariehamn

  Finland

  	
   

  	
  FINNJET

  	
   

  	
  Finland

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crown
  Cruise

  Line

  Incorporated

  S.A.

  	
   

  	
  Panama

  	
   

  	
  20th
  Floor

  Banco

  Continental

  Building

  PO Box 0816

  -01771

  Panama 5

  Republic of

  Panama

  	
   

  	
  WALRUS

  	
   

  	
  Panama

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seawind
  Line

  AB

  	
   

  	
  Sweden

  	
   

  	
  Positionen
  8

  115 74

  Stockholm

  Sweden

  	
   

  	
  STAR
  WIND

  	
   

  	
  Sweden

  

 

205

 

SCHEDULE 4

 

The Approved Brokers

 

	
  Fearnleys
  A/S

  
	
  PO
  Box 1158 Sentrum

  
	
  N –
  0107 Oslo

  
	
  Norway

  
	
   

  
	
  Tel:

  	
  + 47
  22 936 000

  
	
  Fax:

  	
  + 47
  22 936 150

  
	
   

  
	
  Simonship
  AB

  
	
  Skeppsbron
  16

  
	
  S-111
  30 Stockholm

  
	
  Sweden

  
	
   

  
	
  Tel:

  	
  +46 8
  240 310

  
	
  Fax:

  	
  +46 8
  204 610

  
	
   

  
	
  Brax
  Shipping AB

  
	
  Engelbrektsgatan
  26

  
	
  S-411
  37 Gothenburg

  
	
  Sweden

  
	
   

  
	
  Tel:

  	
  + 46
  31 18 32 00

  
	
  Fax:

  	
  + 46
  31 18 32 60

  

 

206

 

	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  SEA CONTAINERS LTD.

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  SILJA OYJ ABP

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  SILJA CRUISE AB

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  SALLY AB

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  CROWN CRUISE LINE

  	
  )

  
	
  INCORPORATED  S.A.

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  SEAWIND LINE AB

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  NORDEA BANK DANMARK A/S

  	
  )

  
	
  (as
  Lead Arranger)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  HSH NORDBANK AG

  	
  )

  
	
  (as a
  Co-Arranger)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by)

  	
  )

  
	
  duly
  authorised for and on behalf)

  	
  )

  
	
  of  FORTIS BANK S.A./N.V.)

  	
  )

  
	
  (as
  Co-Arranger)

  	
  )

  

 

207

 

	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  THE GOVERNOR AND COMPANY

  	
  )

  
	
  OF THE BANK OF SCOTLAND

  	
  )

  
	
  (as
  Co-Arranger)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  NORDEA BANK

  	
  )

  
	
  DANMARK A/S (as a Bank)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  HSH NORDBANK AG (as a Bank)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  FORTIS BANK S.A./N.V. (as a Bank)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  THE GOVERNOR AND COMPANY

  	
  )

  
	
  OF THE BANK OF SCOTLAND

  	
  )

  
	
  (as a
  Bank)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of DVB BANK
  AG, LONDON BRANCH

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  NORDEA BANK DANMARK A/S

  	
  )

  
	
  (as
  the Paying Agent)

  	
  )

  

 

208

 

	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  NORDEA BANK FINLAND PLC

  	
  )

  
	
  (as
  the Security Agent)

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED  by

  	
  )

  
	
  duly
  authorised for and on behalf

  	
  )

  
	
  of  HSH NORDBANK AG

  	
  )

  
	
  (as
  Documentation Agent)

  	
  )

  

 

209

 

APPENDIX A

 

Form of Drawdown Notice

 

To:                              Nordea Bank Danmark A/S

 

From:                  Sea Containers Ltd.

 

[Date]

 

Dear Sirs,

 

Drawdown Notice

 

We refer to the Loan Agreement
dated                            2003
made between, amongst others, ourselves and yourselves (“the Agreement”).

 

Words and phrases defined in the Agreement have the same meaning when
used in this Drawdown Notice.

 

Pursuant to Clause 2.3 of the Agreement, we irrevocably request
that you advance a Drawing of [           ]
to us on
                 
2003, which is a Business Day, by paying the amount of the Drawing to
[                                           ].

 

We warrant that the representations and warranties contained in Clause
4 of the Agreement are true and correct at the date of this Drawdown Notice and
will be true and correct on
             
2003; that no Event of Default nor Potential Event of Default has occurred and
is continuing, and that no Event of Default or Potential Event of Default will
result from the advance of the Drawing requested in this Drawdown Notice.

 

We select the period of [       ]
months as the first Interest Period.

 

Yours faithfully

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  For and on behalf of

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sea Containers Ltd.

  	
   

  

 

210

 

APPENDIX B

 

Form of Transfer Certificate

 

To:                              Nordea Bank Danmark A/S

 

TRANSFER CERTIFICATE

 

This transfer
certificate relates to a secured loan facility agreement (as from time to time
amended, varied, supplemented or novated “the Agreement”) dated
                  2003,
on the terms and subject to the conditions of which a secured loan facility of
up to €54,000,000 was made available to Sea Containers Ltd. by a syndicate of
banks on whose behalf you act as paying agent.

 

1                                          Terms defined in the Agreement shall, unless otherwise expressly
indicated, have the same meaning when used in this certificate.  The terms “Transferor” and “Transferee”
are defined in the schedule to this certificate.

 

2                                          The Transferor:-

 

2.1                                 confirms
that the details in the Schedule under the heading “Transferor’s Commitment”
accurately summarise its Commitment; and

 

2.2                                 requests
the Transferee to accept by way of novation the transfer to the Transferee of
the amount of the Transferor’s Commitment specified in the Schedule by
counter-signing and delivering this certificate to the Security Agent at its
address for Communications specified in the Agreement.

 

3                                          The Transferee requests the Paying Agent to accept this certificate
as being delivered to the Paying Agent pursuant to and for the purposes of
clause 16.4 of the Agreement so as to take effect in accordance with the terms
of that clause on the Transfer Date specified in the Schedule.

 

4                                          The Paying Agent (on its own behalf and on behalf of the Borrower
and each of the Banks other than the Transferor) confirms its acceptance of
this certificate for the purposes of clause 16.4 of the Agreement.

 

5                                          The Transferee confirms that:-

 

5.1                                 it
has received a copy of the Agreement together with all other information which
it has required in connection with this transaction;

 

5.2                                 it
has not relied and will not in the future rely on the Transferor or any other
party to the Agreement to check or enquire on its behalf into the legality,
validity, effectiveness, adequacy, accuracy or completeness of any such
information; and

 

5.3                                 it
has not relied and will not in the future rely on the Transferor or any other
party to the Agreement to keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of any of the
Security Parties.

 

6                                          Execution of this certificate by the Transferee constitutes its
representation to the Transferor and to all other parties to the Agreement that
it has the power to become a party

 

211

 

to the Agreement as a Bank on the terms of the Agreement and has taken
all steps to authorise execution and delivery of this certificate.

 

7                                          The Transferee undertakes with the Transferor and each of the other
parties to the Loan Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Agreement will be assumed
by it after delivery of this certificate to the Paying Agent and the
satisfaction of any conditions subject to which this certificate is expressed
to take effect.

 

8                                          The Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness, adequacy
or enforceability of any of the Security Documents or any document relating to
any of the Security Documents, and assumes no responsibility for the financial
condition of any of the Security Parties or for the performance and observance
by the Security Parties of any of their obligations under any of the Security
Documents or any document relating to any of the Security Documents and any
conditions and warranties implied by law are expressly excluded.

 

9                                          The Transferee acknowledges that nothing in this certificate or in
the Agreement shall oblige the Transferor to:-

 

9.1                                 accept
a re-transfer from the Transferee of the whole or any part of the rights,
benefits and/or obligations transferred pursuant to this certificate; or

 

9.2                                 support
any losses directly or indirectly sustained or incurred by the Transferee for
any reason including, without limitation, the non-performance by any party to
any of the Security Documents of any obligations under any of the Security
Documents.

 

10                                    The
address and fax number of the Transferee for the purposes of clause 11.20 of
the Agreement are set out in the Schedule.

 

11                                    This
certificate may be executed in any number of counterparts each of which shall
be original but which shall together constitute the same instrument.

 

12                                    This certificate shall be governed by and interpreted in accordance
with English law.

 

THE  SCHEDULE

 

1                                          Transferor:

 

2                                          Transferee:

 

3                                          Transfer Date (not earlier that the fifth Business Day after the date of delivery
of the Transfer Certificate to the Security Agent):

 

4                                          Transferor’s Commitment:

 

5                                          Amount transferred:

 

6                                          Transferee’s address and
fax number for the purposes of clause 11.20 of the Agreement:

 

212

 

	
  [name of Transferor]

  	
   

  	
  [name of Transferee]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Date:

  

 

 

Nordea Bank Danmark A/S as
Paying Agent

for and on
behalf of itself, the Borrower, each of the Owners and each of the Banks (other
than the Transferor)

 

	
  By:

  
	
   

  
	
  Date:

  

 

213

 

APPENDIX C

 

Form of Compliance Certificate

 

To:                              Nordea Bank Danmark A/S

 

[Date]

 

Dear Sirs

 

Compliance Certificate

 

We refer to
the Loan Agreement
dated                         2003
made between, amongst others, ourselves and yourselves (“the Agreement”).

 

Words and
phrases defined in the Agreement have the same meaning when used in this
Compliance Certificate.

 

Pursuant to
Clause 12.3.11(d) of the Agreement we hereby confirm that as at the date
hereof:-

 

(1)                                  the Consolidated Tangible Net Worth is:

 

(2)                                  the Consolidated Tangible Net Worth Ratio is:

 

(3)                                  the Consolidated Cash Reserves are:

 

We further
confirm that no Event of Default or Potential Event of Default has occurred and
is continuing.

 

Yours faithfully

 

 

	
   

  	
   

  	
   

  
	
   

  	
  For and on behalf of

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sea Containers Ltd.

  	
   

  

 

214

 

APPENDIX D

 

Form of Deed of Subordination

 

215Exhibit 10.1  

THE ALLSTATE CORPORATION

EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

As Amended and Restated on September 8, 2003 effective as of June 1, 20041  

I.     Purpose.  

        The purpose of The Allstate Corporation Equity Incentive Plan for Non-Employee Directors (the "Plan")
is to promote the interests of The Allstate Corporation (the "Company") by providing an inducement to obtain and retain the services of qualified
persons as members of the Company's Board of Directors (the "Board") and to align more closely the interests of such persons with the interests of the
Company's stockholders by providing a significant portion of the compensation provided to such persons in the form of equity securities of the Company. 

II.    Administration.  

        The Plan shall be administered by the Committee. The Committee shall have full power to construe and interpret the Plan and Shares and Options granted hereunder,
to establish and amend rules for its administration and to correct any defect or omission and to reconcile any inconsistency in the Plan or in any Share or Option granted hereunder to the extent the
Committee deems desirable to carry the Plan or any Share or Option granted hereunder into effect. Any decisions of the Committee in the administration of the Plan shall be final and conclusive. The
Committee may authorize any one or more of its members, the secretary of the Committee or any officer of the Company to execute and deliver documents on behalf of the Committee. Each member of the
Committee, and, to the extent provided by the Committee, any other person to whom duties or powers shall be delegated in connection with the Plan, shall incur no liability with respect to any action
taken or omitted to be taken
in connection with the Plan and shall be fully protected in relying in good faith upon the advice of counsel, to the fullest extent permitted under applicable law. 

III.  Eligibility.  

        Each Non-Employee Director shall be eligible to participate in the Plan. 

IV.    Limitation on Aggregate Shares.  

        A.    Maximum Number of Shares.    The aggregate maximum number of Shares that may be granted pursuant to the Plan or
delivered upon exercise of Options granted pursuant to the Plan shall be 580,000 shares. Such maximum number of Shares is subject to adjustment under the provisions of Section IV.B. The Shares
to be granted pursuant to the Plan or delivered 

	1
	Until
June 1, 2004, the Plan as amended and restated on September 18, 2000, effective as of June 1, 2001, shall remain in effect. 

1

 

upon
exercise of Options may be either (i) authorized but unissued Shares or (ii) Shares previously issued which have been reacquired by the Company ("Treasury Shares"); provided,
however, that on or after June 1, 2001, only Treasury Shares shall be granted pursuant to the Plan or delivered upon exercise of Options (other than upon exercise of Options granted prior to
such date). In the event any Option or Reload Option shall, for any reason, terminate or expire or be surrendered without having been exercised in full, the Shares subject to such Option or Reload
Option but not purchased thereunder shall be available for future Options or Reload Options to be granted under the Plan. 

        B.    Adjustment.    The maximum number of Shares referred to in Section IV.A of the Plan, the number of
Shares granted pursuant to Section VI of the Plan, the number of Options granted pursuant to Section VII of the Plan, and the option price and the number of Shares which may be purchased
under any outstanding Option granted under Section VII of the Plan shall be proportionately adjusted for any increase or decrease in the number of issued and outstanding Shares as the result of
(i) the declaration and payment of a dividend payable in Common Stock, or the division of the Common Stock
outstanding at the date hereof (or the date of the grant of any such outstanding Option, as applicable) into a greater number of Shares without the receipt of consideration therefor by the Company, or
any other increase in the number of such Shares of the Company outstanding at the date hereof (or the date of the grant of any such outstanding Option, as applicable) which is effective without the
receipt of consideration therefor by the Company (exclusive of any Shares granted by the Company to employees of the Company or any of its Subsidiaries without receipt of separate consideration by the
Company), or (ii) the consolidation of the Shares outstanding at the date hereof (or the date of the grant of any such outstanding Option, as applicable) into a smaller number of Shares without
the payment of consideration thereof by the Company, or any other decrease in the number of such Shares outstanding at the date hereof (or the date of the grant of any such outstanding Option, as
applicable) effected without the payment of consideration by the Company; provided, however, that the total option price for all Shares which may be
purchased upon the exercise of any Option granted pursuant to the Plan (computed by multiplying the number of Shares originally purchasable thereunder, reduced by the number of such Shares which have
theretofore been purchased thereunder, by the original option price per share before any of the adjustments herein provided for) shall not be changed. 

        In
the event of a change in the Common Stock as presently constituted which is limited to a change of the Company's authorized shares with a par value into the same number of shares with
a different par value or without par value, the shares resulting from any such change will be deemed to be the Common Stock within the meaning of this Plan and no adjustment will be required pursuant
to this Section IV.B. 

        The
foregoing adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided in this
Section IV.B, a Non-Employee Director shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class. 

2

 

V.     Definitions.  

        The following terms shall have the meanings set forth below when used herein: 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Committee" means the Nominating and Governance Committee of the Board, any successor committee of the Board performing similar functions
or, in the absence of such a committee, the Board. 

        "Common Stock" means the Common Stock, par value $.01 per share, of the Company. 

        "Disability" means a mental or physical condition which, in the opinion of the Committee, renders a Non-Employee Director
unable or incompetent to carry out his or her duties as a member of the Board and which is expected to be permanent or for an indefinite duration. 

        "Election Shares" means any Shares issued to a Non-Employee Director pursuant to the election of such person to receive such
Shares in lieu of cash compensation made in accordance with Section VIII.B. 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Fair Market Value" of any Share means, as of any applicable date, the mean between the high and low prices of the Shares as reported on
the New York Stock Exchange-Composite Tape, or if no such reported sale of the Shares shall have occurred on such date, on the next preceding date on which there was such a reported sale. 

        "Initial Election Date" means, for each Non-Employee Director, the later to occur of (i) the date the Plan is approved
and adopted by the Company's stockholders pursuant to Section XIII of the Plan, and (ii) the date of such member's initial election or appointment to the Board. 

        "Non-Employee Director" means each member of the Board who is not an officer or employee of the Company or any of its
Subsidiaries. 

        "Option" means an option to purchase shares of Common Stock. 

        "Shares" means shares of Common Stock. 

        "Subsidiary" means any partnership, corporation, association, limited liability company, joint stock company, trust, joint venture,
unincorporated organization or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or 

3

 

trustees
thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof, or (ii) if a
partnership, association, limited liability company, joint stock company, trust, joint venture, unincorporated organization or other business entity, a majority of the partnership or other similar
equity ownership interest thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more Subsidiaries of the Company or a combination thereof. For purposes hereof,
the Company or a Subsidiary shall be deemed to have a majority ownership interest in a partnership, association, limited liability company, joint stock company, trust, joint venture, unincorporated
organization or other business entity if the Company or such Subsidiary shall be allocated a majority of partnership, association, limited liability company, joint stock company, trust, joint venture,
unincorporated organization or other business entity gains or losses or shall be or control the managing director, the trustee, the manager or the general partner of such partnership, association,
limited liability company, joint stock company, trust, joint venture, unincorporated organization or other business entity. 

VI.   Formula Restricted Stock Grants for Non-Employee Directors.  

        A.    Annual Grant of Shares.    Beginning December 1, 2004, on December 1 of each year 2,000 Shares
shall automatically be granted to each Non-Employee Director serving on the Board on such date who has served in such capacity since June 1 of such year. If any person serving as a
Non-Employee Director on June 1 of 2004 or any subsequent year ceases to serve as a director of the Company prior to December 1 of such year, such director shall be
automatically granted on his or her last day of service a number of Shares equal to (i) 2,000 multiplied by (ii) a fraction, the numerator
of which is the number of full calendar months such Non-Employee Director has served on the Board during the period beginning on such June 1 and ending on such director's last date
of service and the denominator of which is 6. 

        B.    Grant for Newly Appointed Directors.    If after June 1, 2004 a Non-Employee Director is
initially elected or appointed to the Board effective on any date other than June 1, such Non-Employee Director shall automatically be granted, on the June 1 following the
date he or she joins the Board (or such earlier date as he or she ceases to serve as a director), a number of Shares equal to (i) 2,000 multiplied
by (ii) a fraction, the numerator of which is the number of full calendar months such Non-Employee Director has served on the Board during the period
beginning on the date such director joined the Board and ending on the following May 31 (or such earlier date as he or she ceases to serve as a director) and the denominator of which is 6;
provided that such fraction shall in no event be greater than one. 

        C.    Rounding of Share Amounts.    To the extent that application of the foregoing formulas would result in
fractional Shares being issuable, such Non-Employee Director shall be granted a number of Shares equal to the nearest whole number of Shares. 

        D.    Payment for Estimated Taxes.    In addition, the Company shall pay to each Non-Employee Director, in
cash, as soon as practicable after each issuance of Shares
pursuant to this Section VI prior to June 1, 2004, an amount equal to the estimated increase in such Non- 

4

 

Employee
Director's federal, state and local tax liabilities as a result of such grant of Shares, assuming the maximum statutory tax rates applicable to such Non-Employee Director. 

        E.    Restrictions.    The Non-Employee Directors shall have no rights as a shareholder with respect to
any Shares to be granted pursuant to this Section VI prior to the time such Shares are granted. Upon such grant, the Shares shall be represented by a stock certificate registered in the name of
the holder. The Shares granted pursuant to this Section VI shall be fully vested, but shall be subject to certain restrictions during the Non-Employee Director's service as a
director of the Company and the one-year period following termination of such service (the "Restriction Period"). The holder shall have the
right to enjoy all shareholder rights during the Restriction Period (including the right to vote the Shares and the right to receive any cash or other dividends paid in respect thereof) with the
exception that (i) the holder may not sell, transfer, pledge or assign the Shares during the Restriction Period, and (ii) the Company shall retain custody of the certificates
representing the Shares during the Restriction Period. 

        All
restrictions shall lapse and the holder of the Shares shall be entitled to the delivery of a stock certificate or certificates representing the Shares (and to the removal of any
restrictive legend set forth on such certificates) upon the earlier of (i) the date of the holder's death or Disability, and (ii) one year after the date on which the holder is no longer
serving as a director of the Company. 

VII. Formula Stock Option Grants for Non-Employee Directors.  

        A.    Annual Grant of Options.    On June 1 of each year, beginning June 1, 2001, Options to purchase
4,000 Shares shall automatically be granted to each Non-Employee Director serving on the Board on such date. If any such Non-Employee Director will be required to retire
(pursuant to the policies of the Board) during the 12 month period beginning on the date of any grant (or if any such Non-Employee Director has notified the Board that he or she
intends to resign from the Board for any reason during the 12 month period beginning on the date of any grant), such director shall instead be granted on June 1 of the relevant year
Options to purchase a number of Shares equal to (i) 4,000, multiplied by (ii) a fraction, the numerator of which is the number of full
calendar months such Non-Employee Director will serve on the Board during the period beginning on such June 1 and ending on such director's last date of service and the denominator
of which is 12. 

        B.    Grant for Newly Appointed Directors.    If after June 1, 2001 a Non-Employee Director is
initially elected or appointed to the Board effective on any date other than June 1, such Non-Employee Director shall automatically be granted, on the date he or she joins the
Board, Options to purchase a number of Shares equal to (i) 4,000, multiplied by (ii) a fraction, the
numerator of which is the number of full calendar months such Non-Employee Director will serve on the Board during the period beginning on the date such director joins the Board and ending
on the following May 31 and the denominator of which is 12. 

        C.    Option Exercise Price.    The exercise price per Share for each Option shall be 100% of the Fair Market Value of
a Share on the date of grant, subject to Section IV.B. 

5

 

        D.    Term of Options.    Each Option shall be exercisable for ten years after the date of grant, subject to
Section VII.F. 

        E.    Conditions and Limitations on Exercise.    

        (i)    Vesting.    Each Option shall vest in three installments as follows: (i) on each of the first and second
anniversaries of the date of grant, as to one-third of the Shares subject to such Option (with any resulting fractional Share rounded to the nearest whole Share) and (ii) on the
third anniversary of the date of grant, as to the remaining unvested portion of such Option. Upon a Non-Employee Director's mandatory retirement pursuant to the policies of the Board, the
unvested portions of any outstanding Options held by such Non-Employee Director shall fully vest. Upon the termination of a Non-Employee Director's tenure for any other reason,
the unvested portions of any outstanding Options shall expire and no Options granted to such Non-Employee Director shall vest after the termination of such director's tenure on the Board. 

        (ii)    Exercise.    Each Option shall be exercisable in one or more installments and shall not be exercisable for
less than 100 Shares, unless the exercise represents the entire remaining exercisable balance of a grant or grants. Each Option shall be exercised by delivery to the Company of written notice of
intent to purchase a specific number of Shares subject to the Option. The option price of any Shares as to which an Option shall be exercised shall be paid in full at the time of the exercise. Payment
may, at the election of the Non-Employee Director, be made in any one or any combination of the following forms: 

        (a)   check
or wire transfer of funds in such form as may be satisfactory to the Committee; 

        (b)   delivery
of Shares valued at their Fair Market Value on the date of exercise or, if the date of exercise is not a business day, the next preceding business day; 

        (c)   through
simultaneous sale through a broker of unrestricted Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board; or 

        (d)   by
authorizing the Company in his or her written notice of exercise to withhold from issuance a number of Shares issuable upon exercise of such Option which, when
multiplied by the Fair Market Value of Common Stock on the date of exercise (or, if the date of exercise is not a business day, the next preceding business day), is equal to the aggregate exercise
price payable with respect to the Option so exercised. 

        In
the event a Non-Employee Director elects to pay the exercise price payable with 

6

 

respect
to an Option pursuant to clause (b) above, (i) only a whole number of Share(s) (and not fractional Shares) may be tendered in payment, (ii) such Non-Employee
Director must present evidence acceptable to the Company that he or she has owned any such Shares tendered in payment of the exercise price (and that such Shares tendered have not been subject to any
substantial risk of forfeiture) for at least six months prior to the date of exercise, and (iii) the certificate(s) for all such Shares tendered in payment of the exercise price must be
accompanied by duly executed instruments of transfer in a form acceptable to the Company. When payment of the Option exercise price is made by the tender of Shares, the difference, if any, between the
aggregate exercise price payable with respect to the Option being exercised and the Fair Market Value of the Share(s) tendered in payment (plus any applicable taxes) shall be paid by check or wire
transfer of funds. No Non-Employee Director may tender Shares having a Fair Market Value exceeding the aggregate exercise price payable with respect to the Option being exercised. 

        In
the event a Non-Employee Director elects to pay the exercise price payable with respect to an Option pursuant to clause (d) above, (i) only a whole number of
Share(s) (and not fractional Shares) may be withheld in payment and (ii) such Non-Employee Director must present evidence acceptable to the Company that he or she has owned a number
of Shares at least equal to the number of Shares to be withheld in payment of the exercise price (and that such owned Shares have not been subject to any substantial risk of forfeiture) for at least
six months prior to the date of exercise. When payment of the Option exercise price is made by the withholding of Shares, the difference, if any, between the aggregate exercise price payable with
respect to the Option being exercised and the Fair Market Value of the Share(s) withheld in payment (plus any applicable taxes) shall be paid by check or wire transfer of funds. No
Non-Employee Director may authorize the withholding of Shares having a Fair Market Value exceeding the aggregate exercise price payable with respect to the Option being exercised. Any
withheld Shares shall no longer be issuable under such Option. 

        F.    Additional Provisions.    

        (i)    Accelerated Expiration of Options Upon Termination of Directorship.    Upon the termination of a
Non-Employee Director's tenure for any reason, each outstanding vested and previously unexercised Option shall expire three months after the date of such termination;  provided that (a) upon the
termination of a Non-Employee Director's tenure as a result of death or Disability, each outstanding
vested and previously unexercised Option shall expire two years after the date of his or her termination as a director, and (b) upon the mandatory retirement of a Non-Employee
Director pursuant to the policies of the Board, each outstanding vested and previously unexercised Option shall expire five years after the date of his or her termination as a
director. In no event shall the provisions of this Section VII.F operate to extend the original expiration date of any Option. 

        (ii)    Sale of the Company.    In the event of a merger of the Company with or into another corporation constituting
a change of control of the Company, a sale of all or substantially all of the Company's assets or a sale of a majority of the Company's outstanding voting securities (a "Sale of the Company"), the
Options may be assumed by 

7

 

the
successor corporation or a parent of such successor corporation or substantially equivalent options may be substituted by the successor corporation or a parent of such successor corporation, and
if the successor corporation does not assume the Options or substitute options, then all outstanding and unvested Options shall become immediately exercisable and all outstanding Options shall
terminate if not exercised as of the date of the Sale of the Company (or other prescribed period of time). The Company shall provide at least 30 days prior written notice of the Sale of the
Company to the holders of all outstanding Options, which notice shall state whether (a) the Options will be assumed by the successor corporation or substantially equivalent options will be
substituted by the successor corporation, or (b) the Options are thereafter vested and exercisable and will terminate if not exercised as of the date of the Sale of the Company (or other
prescribed period of time). 

        (iii)    Liquidation or Dissolution.    In the event of the liquidation or dissolution of the Company, Options shall
terminate immediately prior to the liquidation or dissolution. 

        G.    Grant of Reload Options.    A Non-Employee Director who exercises all or any portion of an Option
granted under the Plan before June 1, 2004 by the tender or withholding of Shares which have a Fair Market Value equal to not less than 100% of the exercise price for such Options (the
"Exercised Options") shall be granted, subject to Section IV, an additional option (a "Reload
Option") for a number of Shares equal to the sum of the number of Shares tendered or withheld in payment of the exercise price for the Exercised Options. Options granted on and
after June 1, 2004 shall not provide for the grant of a Reload Option upon exercise. 

        Reload
Options shall be subject to the following terms and conditions: 

        (i)    the
grant date for each Reload Option shall be the date of exercise of the Exercised Option to which it relates; 

        (ii)   subject
to clause (iii) below, the Reload Option may be exercised at any time during the unexpired term of the Exercised Option (subject to earlier termination
thereof as provided in the Plan); and 

        (iii)  the
other terms of the Reload Option shall be the same as the terms of the Exercised Option to which it relates and shall be subject to the provisions of the Plan,
except that (a) the option price shall be the Fair Market Value of the Shares on the grant date of the Reload Option, (b) no Reload Option
may be exercised within six months from the grant date thereof, and (c) no other Reload Option shall be granted upon exercise of such Reload Option. 

        H.    Non-Qualified Stock Options.    All Options granted under the Plan shall be
non-qualified options not entitled to special tax treatment under Code Section 422, as may be amended from time to time. 

VIII. Election to Receive Stock in Lieu of Cash Compensation  

8

 

        A.    General.    A Non-Employee Director may elect to reduce the cash compensation otherwise payable for
services to be rendered by him or her as a director for any period beginning on June 1 and continuing to the following May 31 (or such other period for which cash compensation is payable
to Non-Employee Directors pursuant to the policies of the Board), beginning June 1, 1996 and to receive in lieu thereof Election Shares as provided in this Section VIII. 

        B.    Election.    By the later of (i) the date of the Company's annual meeting of stockholders next preceding
the June 1 to which such election relates (but in no event less than five business days prior to such June 1) and (ii) such Non-Employee Director's Initial Election
Date, each Non-Employee Director may make an irrevocable election to receive, in lieu of all or a specified percentage (which percentage shall be in 10% increments) of the cash
compensation to which such director would otherwise be entitled as a member of the Board and any committee thereof (including the annual retainer fee and any meeting or other fees payable for services
on the Board or any committee thereof, but excluding any reimbursement for out-of-pocket expenses) for the year beginning the following June 1 (or such other period for
which cash compensation is payable to such Non-Employee Director pursuant to the policies of the Board), an equivalent value in Election Shares granted in accordance with this
Section VIII. An election shall be effective (i) if made in accordance with clause (i) of the preceding sentence, beginning on the June 1 following such election; and
(ii) if made on such Non-Employee Director's Initial Election Date, immediately. 

        Each
such election shall (i) be in writing in a form prescribed by the Company, (ii) specify the amount of cash compensation to be received in the form of Election Shares
(expressed as a percentage of the compensation otherwise payable in cash), and (iii) be delivered to the Secretary of the Company. Such election may not be revoked or changed thereafter except
as to compensation for services to be rendered in any 12 month period beginning on any June 1 at least six months following such revocation or new election. 

        C.    Issuance of Common Stock.    If a Non-Employee Director elects pursuant to Section VIII.B
above to receive Election Shares, there shall be issued to such director promptly following each subsequent June 1 for which such election is effective (or promptly following the first day of
such other period for which such election is effective) a number of Election Shares equal to the amount of compensation otherwise payable for the 12 month period beginning on such June 1
(or the other period for which such election is effective) divided by the Fair Market Value of the Election Shares on such June 1 (or on the first day of such other period). To the extent that
the application of the foregoing formula would result in fractional shares of Common Stock being issuable, cash will be paid to the Non-Employee Director in lieu of such fractional
Election Shares based upon the Fair Market Value of such fractional Election Share. 

        D.    Compliance with Exchange Act.    The election to receive Election Shares is intended to comply in all respects
with Rule 16b-3(d)(1) promulgated under Section 16(b) of the Exchange Act such that the issuance of Election Shares under the Plan on a grant date occurring at least six
months after the election shall be exempt from Section 16(b) of the Exchange Act. 

9

 

        E.    Grant Date.    The grant date for each Election Share for the Non-Employee Director electing such
option shall be the first day of the period to which such election relates and is effective. 

IX.   Miscellaneous Provisions.  

        A.    Rights of Non-Employee Directors.    No Non-Employee Director shall be entitled under
the Plan to voting rights, dividends or other rights of a stockholder prior to the issuance of Common Stock. Neither the Plan nor any action taken hereunder shall be construed as giving any
Non-Employee Director any right to be retained in the service of the Company. 

        B.    Limitations on Transfer and Exercise.    All Options granted under the Plan shall not be transferable by the
Non-Employee Director, other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order, as defined by Section 1 et seq, of the Code,
Title I of ERISA or the rules and regulations thereunder, and shall be exercisable during the Non-Employee Director's lifetime only by such Non-Employee Director or by such
Non-Employee Director's guardian or other legal representative; provided, however, that the vested portions of Options may be transferred by
the Non-Employee Director during his lifetime to (a) any member of his immediate family, (b) to a trust established for the exclusive benefit of himself or one or more
members of his immediate family, or (c) to a partnership, the partners of which are limited to the Non-Employee Director and members of his immediate family. A transfer of an Option
pursuant to this paragraph may only be effected by the Company at the written request of a Non-Employee Director and shall become effective only when recorded in the Company's record of
outstanding Options. In the event an Option is transferred as contemplated in this paragraph, any Reload Options associated with such transferred
Option shall terminate, and such transferred Option may not be subsequently transferred by the transferee except by will or the laws of descent and distribution. Otherwise, a transferred Option shall
continue to be governed by and subject to the terms and limitations of the Plan and the relevant grant, and the transferee shall be entitled to the same rights as the Non-Employee
Director, as if no transfer had taken place. As used in this paragraph, "immediate family" shall mean, with respect to any person, his/her spouse, any child, stepchild or grandchild, and shall include
relationships arising from legal adoption. 

        C.    Compliance with Laws.    No shares of Common Stock shall be issued hereunder unless counsel for the Company
shall be satisfied that such issuance will be in compliance with applicable federal, state, local and foreign securities, securities exchange and other applicable laws and requirements. Each Share
granted pursuant to Section VI or Section VIII and each Option granted pursuant to Section VII shall be subject to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification of the Shares granted or subject to the Option upon any securities exchange or under any state or federal securities or
other law or regulation, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to or in connection with the granting of such Share, such Option or
the issuance or purchase of Shares thereunder, no such Share may be issued and no Option may be exercised or paid in Common Stock, in whole or in part, unless such listing, 

10

 

registration,
qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The holder of such Share or Option will supply the
Company with such certificates, representations and information as the Company shall request and shall otherwise cooperate with the Company in obtaining such listing, registration, qualification,
consent or approval. The Committee may at any time impose any limitations upon the sale of a Share or the exercise of an Option or the sale of the Common Stock issued upon exercise of an Option that,
in the Committee's discretion, are necessary or desirable in order to comply with Section 16(b) of the Exchange Act and the rules and regulations thereunder. The Committee may at any time
impose additional limitations, or may amend or delete the existing limitations, upon the exercise of Options by the tender or withholding of Shares in accordance with Section VII.E (including
an amendment or deletion of the related ownership period for Shares specified in such Section), if such additional, amended or deleted limitations are necessary, desirable or no longer required (as
the case may be) to remain in compliance with applicable accounting pronouncements relating to the treatment of the plan as a fixed plan for accounting purposes. 

        D.    Payment of Withholding Tax.    Whenever Shares are to be issued pursuant to Section VI or
Section VIII of the Plan or upon exercise of Options issued pursuant to Section VII of the Plan, the Company shall be entitled to require as a condition of delivery (i) that the
participant remit an amount sufficient to satisfy all federal, state and local withholding tax requirements related thereto, (ii) the withholding of Shares due to the participant under the Plan
with a Fair Market Value equal to such amount, or (iii) any combination of the foregoing. 

        E.    Expenses.    The expenses of the Plan shall be borne by the Company and its Subsidiaries. 

        F.    Deemed Acceptance, Ratification and Consent.    By accepting any Common Stock hereunder or other benefit under
the Plan, each Non-Employee Director and each person claiming under or through him or her shall be conclusively deemed to have indicated his or her acceptance and
ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee. 

        G.    Securities Act Registration.    The Company shall use its best efforts to cause to be filed under the Securities
Act of 1933, as amended, a registration statement covering the Shares issued, and issuable upon exercise of options granted, under the Plan. 

        H.    Governing Law.    The provisions of the Plan shall be governed by and construed in accordance with the laws of
the State of Delaware. 

        I.    Election Shares.    Pending the grant of Election Shares hereunder, all compensation earned by a
Non-Employee Director with respect to which an election to receive the grant of Election Shares pursuant to Section VIII.B has been made shall be the property of such director and
shall be paid to him or her in cash in the event that Election Shares are not granted by the Company hereunder. 

11

 

        J.    Headings; Construction.    Headings are given to the sections of the Plan solely as a convenience to facilitate
reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of the Plan or any provisions hereof. The use of the singular
shall also include within its meaning the plural, where appropriate, and vice versa. 

X.    This section intentionally left blank.  

XI.   Amendment.  

        The Plan may be amended at any time and from time to time by resolution of the Board as the Board shall deem advisable; provided,
however, that no amendment shall become effective without stockholder approval if such stockholder approval is required by law, rule or regulation. No amendment of the Plan
shall materially and adversely affect any right of any participant with respect to any Options or Shares theretofore granted under the Plan without such participant's written consent, except for any
modifications required to maintain compliance with any federal or state statute or regulation. 

XII. Termination.  

        The Plan shall terminate upon the earlier of the following dates or events to occur: 

        (i)    upon
the adoption of a resolution of the Board terminating the Plan; and 

        (ii)   ten
years from the date the Plan is initially approved and adopted by the stockholders of the Company in accordance with Article XIII. 

        Except
as specifically provided herein, no termination of the Plan shall materially and adversely affect any of the rights or obligations of any person without his or her consent with
respect to any Options or Shares theretofore granted under the Plan. 

XIII. Stockholder Approval and Adoption.  

        The Plan was originally adopted by the Board on March 12, 1996 and was approved and adopted at a meeting of the stockholders of the Company held on
May 21, 1996. The Plan was amended and restated by the Board at meetings held on November 12, 1996, August 14, 1997 and, in connection with a 2-for-1 stock
split in the form of a dividend, effective as of July 2, 1998. The Plan was further amended and restated by the Board at meetings held on November 10, 1998, on September 18, 2000,
effective as of June 1, 2001 and on September 8, 2003 effective as of June 1, 2004. Until June 1, 2004, the Plan as amended and restated on September 18, 2000,
effective as of June 1, 2001 shall remain in effect. 

12

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