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EXHIBIT 10.13

	 	
	 	Global Banking & Markets 

      Shipping Business Centre 

      5-10 Great Tower Street 

      London EC3P 3HX 
	 
    
	 	
      Telephone: +44 (0)20 7085 5000

      Facsimile: +44 (0)20 7085 7134 
	 

	 	
      www.rbs.com/gbm 

 

14 May 2008

Marinouki Shipping Corporation 

c/o Safety Management Overseas SA

32 Avenue Karamanli 

166 73 Voula 

PO Box 70677-106-6 

Athens 

GREECE 

Attn. Mr Konstantinos Adamopoulos

Dear Sirs

Loan Agreement dated 1 March 2006 (the “Loan Agreement”) between The Royal Bank of Scotland plc (the “Bank”) and Marinouki Shipping Corporation (the “Borrower”) 

We refer to the above Loan Agreement and to the restrictions placed on the Borrower regarding Change of Ownership as per clause 9.3.13. At the request of the Borrower, we have pleasure in confirming that the Bank is
prepared to agree to the proposed transfer of ownership of the Borrower to Safe Bulkers Inc., a newly formed company to be listed on the NYSE and which will initially offer 20% of its shares to the public by virtue of an IPO. The remaining 80% of
the shares will remain initially within the existing beneficial ownership and control of the Hadjioannou family as advised to the Bank. 

Agreement is subject to the following amendments to the terms of the loan, which are to be documented by a supplemental agreement (also incorporating the amendments set out in

	 	The Royal Bank of Scotland plc 

      Registered in Scotland No 90312 

      Registered Office: 38 St Andrew Square 

      Edinburgh EH2 2YB 

      

      A member of the London Stock Exchange

      and authorised and regulated by the 

      Financial Services Authority 

 

2 

the supplemental side letter, dated 24 April
2008) and such other supporting documentation as the Bank’s lawyers may require within 30 days of the successful placement of the IPO, the costs of which are to be borne by the Borrower: 

	
Interest Margin:		 	0. 75% pa. over LIBOR. 
	 	 	 
	
Security:		 	To include, in addition to
    the existing security, the following:- 
	 		 	 
	 		 		
         A Supplemental Loan Agreement

      
	
         A new first priority mortgage or amendment
            to the existing mortgage (if required)
            over m/v Marina.

      
	
         A corporate Guarantee issued by Safe Bulkers
            Inc. (the “Corporate
            Guarantor”) on all obligations of the Borrower under
            the Loan Agreement and the Supplemental Loan Agreement.

      

	 		 	 
	
Documentation:		 		
        Charter free value of the Ship, as determined
            by an independent shipbroker acceptable
            to the Bank, to be minimum of 120% at all times of (i) the outstanding Loan (in US Dollars at the prevailing rate
            of exchange) and (ii) the notional or actual cost (if any), as determined by the Bank, of terminating any interest rate swap (the “Minimum
            Security Covenant”).

      
	
         The Hadjioannou family to hold a minimum
            51% shareholding in the Corporate
            Guarantor.

      
	
         Polys Hadjioannou (“PH”) to remain
            CEO of the Corporate Guarantor.

      
	
         The Borrower to remain a fully owned subsidiary
            of the Corporate Guarantor.

      
	
         The above Corporate Guarantee to incorporate
            Financial Covenants on the Corporate
            Guarantor, including:

      

    
   
	 	 	     	 	 
	 	 	 	
i.     	
Min Adjusted Net Worth of US$200m,	
	 
	 	 	 	
ii.     	
      Min Free Liquidity of US$500k to be kept with RBS, excluding other similar requirements under loan facilities provided by the Bank to the Corporate Guarantor or other subsidiaries thereof. 

	 
	 	 	 	
iii.     	
Debt not to exceed 70% of Adjusted Total Assets, and	
	 
	 	 	 	
iv.     	
Debt not to exceed 550% of 12-month trailing EBITDA.	
	 
	 	 		
The Corporate Guarantor will be permitted to pay dividends up to 100% of free cash flow, subject to no event of default or covenant breach having occurred or resulting from the payment of such dividend.

	
Customary undertakings including an undertaking to deliver all information required by the SEC or required to be certified or disclosed by directors pursuant to the Sarbanes Oxley Act.

3 

	
Signing:		 		
The Supplemental Loan Agreement and other supplemental
documentation to be executed on or before 15 June 2008, failing
which this offer will lapse notwithstanding its acceptance.	

This letter contains an outline of certain terms and conditions (it does not constitute a legally binding commitment on the Bank) which will, inter alia, be embodied in the Supplemental Loan Agreement and
security documentation, such legal agreement and security documentation shall be governed by English law (except to the extent any security otherwise requires). The Documentation shall supersede this letter and all prior discussions and negotiations
in relation to the loan facility. 

The Bank shall be entitled to obtain such legal opinions from such jurisdictions as it may require and from lawyers appointed by it and the Borrower shall provide such corporate and other documentation as
may be required by the Bank or its lawyers. 

All other terms and conditions of the Loan Agreement shall remain unchanged and in full force and effect. 

This offer remains subject to there being no facts, events or circumstances, now existing or hereafter arising, which come to our attention and which, in our good faith determination, materially adversely
affect the Borrower’s or any of the Security Parties’ business, assets, financial condition, operations or prospects, in which event the Bank reserves the right to terminate this offer. 

	
Yours faithfully		 		 	
	
For THE ROYAL BANK OF SCOTLAND plc	
	 

	
	 

	
	
/s/ Stephen Moorby		 		
/s/ Nicholas Pavlidis	
	
STEPHEN MOORBY		 		
NICHOLAS PAVLIDIS	
	
SENIOR DIRECTOR, SHIP FINANCE		 		
SENIOR DIRECTOR, SHIP FINANCE	
	 

	
	
Accepted on behalf of		 		 	
	
Marinouki Shipping Corporation		 		 	
	 

	
	
/s/ Konstantinos Adamopoulos		 		 	
	
Konstantinos Adamopoulos		 		 	
	
14/5/08EXHIBIT
      10.14

    

    Private
      and confidential

     

    
      	
              Dated: 29th May, 2006

            

    

     

    Staloudi
      Shipping Corporation

     

    -
      and
      -

     

    Deutsche
      Schiffsbank Aktiengesellschaft

     

    
      

      

    

    
      LOAN
        AGREEMENT

      for
        a
        secured multi-currency

      loan
        facility of up to US$30,000,000

    

     

    
      

      

    

     

    
      
        
        

      

      
      

      

        

      

      
        
        

      

    
     

    TABLE
      OF CONTENTS

     

    
      
        	
                CLAUSE

              	 	
                HEADINGS

              	 	
                PAGE

              
	 	 	 	 	 
	
                 
                  1.

              	 	
                PURPOSE
                  AND LOAN AMOUNT 

              	 	
                 
                  1

              
	 	 	 	 	 
	
                 
                  2.

              	 	
                CURRENCY
                  DENOMINATION OF THE LOAN 

              	 	
                 
                  1

              
	 	 	 	 	
                 

              
	
                 
                  3.

              	 	
                DRAWDOWN 

              	 	
                 
                  4

              
	 	 	 	 	 
	
                 
                  4.

              	 	
                TERM
                  OF THE LOAN 

              	 	
                 
                  5

              
	 	 	 	 	 
	
                 
                  5.

              	 	
                INTEREST
                  AND INTEREST PERIODS 

              	 	
                 
                  5

              
	 	 	 	 	 
	
                 
                  6.

              	 	
                REPAYMENT
                  - PREPAYMENT 

              	 	
                 
                  8

              
	 	 	 	 	 
	
                 
                  7.

              	 	
                FEES-
                  COMMITMENT COMMISSION 

              	 	
                11

              
	 	 	 	 	 
	
                 
                  8.

              	 	
                PAYMENTS 

              	 	
                11

              
	 	 	 	 	 
	
                 
                  9.

              	 	
                COSTS,
                  EXPENSES AND DAMAGES 

              	 	
                12

              
	 	 	 	 	 
	
                10.

              	 	
                SECURITIES 

              	 	
                14

              
	 	 	 	 	 
	
                11.

              	 	
                INSURANCES 

              	 	
                15

              
	 	 	 	 	 
	
                12.

              	 	
                AVAILABILITY 

              	 	
                16

              
	 	 	 	 	 
	
                13.

              	 	
                EVENTS
                  OF DEFAULT 

              	 	
                17

              
	 	 	 	 	 
	
                14.

              	 	
                REPRESENTATIONS
                  AND WARRANTIES - COVENANTS 

              	 	
                18

              
	 	 	 	 	 
	
                15.

              	 	
                JUDGEMENT
                  CURRENCY 

              	 	
                21

              
	 	 	 	 	 
	
                16.

              	 	
                WAIVERS 

              	 	
                22

              
	 	 	 	 	 
	
                17.

              	 	
                INVALIDITY-INCREASED
                  COST 

              	 	
                22

              
	 	 	 	 	 
	
                18.

              	 	
                SURVIVAL 

              	 	
                23

              
	 	 	 	 	 
	
                19.

              	 	
                FURTHER
                  ASSURANCE 

              	 	
                23

              
	 	 	 	 	 
	
                20.

              	 	
                NOTICES 

              	 	
                24

              
	 	 	 	 	 
	
                21.

              	 	
                ASSIGNMENT 

              	 	
                24

              
	 	 	 	 	
                 

              
	
                22.

              	 	
                MISCELLANEOUS 

              	 	
                24

              
	 	 	 	 	 
	
                23.

              	 	
                APPLICABLE
                  LAW 

              	 	
                25

              
	 	 	 	 	 
	
                24.

              	 	
                CHANGE
                  OF LAW 

              	 	
                25

              
	 	 	 	 	 
	
                25.

              	 	
                EXECUTION 

              	 	
                26

              

      

       

      
        	SCHEDULE

      

    

    
      

      	1.	
              NOTICE
                OF DRAWING

            

    

     

    
      
        
        

      

      
      

      

        

      

      
        
        

      

    
     

    THIS
      AGREEMENT
      is made
      this 29th day
      of May, 2006

     

    BETWEEN

     

    
      	
              (1)

            	
              STALOUDI
                SHIPPING CORPORATION,
                a
                company organised and existing under the laws of the Republic of
                Liberia
                having its registered office at 80 Broad Street, Monrovia, Liberia
                (hereinafter the “Borrower”
                which expression shall include its permitted successors and assigns);
                and

            

    

     

    
      	
              (2)

            	
              DEUTSCHE
                SCHIFFSBANK AKTIENGESELLSCHAFT,
                Bremen and Hamburg, acting through its office in Bremen, Domshof 17,
                28195 Bremen, Federal Republic of Germany, (hereinafter called the
                “Bank”
                which expression shall include its successors and permitted
                assigns).

            

    

     

    BY
      WHICH IT IS AGREED

     

    
      	
              1.

            	
              PURPOSE
                AND LOAN AMOUNT

            

    

     

    This
      Agreement sets out the terms and conditions upon which the Bank will make
      available to the Borrower a floating interest rate loan facility (with currency
      option in relation to Tranche A only) in the sum of up to the lesser of
      (i) US$30,000,000 (United States Dollars thirty million) (hereinafter
      called the “Loan”
      which
      expression shall also mean the balance thereof at any time outstanding hereunder
      and in the currencies it is then denominated) and (ii) 80% of the market
      value of the Vessel as determined at around the time of the Drawdown Date
      pursuant to Clause 10.3, for the purpose of partly financing the
      construction cost of the Vessel (as hereinafter defined), such loan facility to
      be made by way of two (2) Tranches as follows:

     

    
      	 	
              (a)

            	
              Tranche
                A in the amount of up to Twenty five million five hundred thousand
                Dollars
                ($25,500,000) or the equivalent thereof in an Alternative Currency
                (hereinafter called “Tranche A”,
                which expression shall also mean the balance thereof at any time
                outstanding hereunder and in the currency it is then denominated);
                and

            

    

     

    
      	 	
              (b)

            	
              Tranche
                B in the amount of up to Four million five hundred thousand Dollars
                ($4,500,000) (hereinafter called “Tranche B”,
                which expression shall also mean the balance thereof at any time
                outstanding hereunder, and together with Tranche A, the “Tranches”).

            

    

     

    
      	
              2.

            	
              CURRENCY
                DENOMINATION OF THE
                LOAN

            

    

     

    
      	
              2.1

            	
              Subject
                to the conditions and provisions of this Agreement, the whole amount
                of
                the Loan shall be advanced in Dollars or at the Borrower’s written request
                Tranche A shall be advanced in another Alternative Currency as
                provided in Clause 2.3 and Tranche B shall be advanced in
                Dollars.

            

    

     

    
      	
              2.2

            	
              In
                this Agreement the following terms shall have the meanings given
                to them
                below:

            

    

     

    “Alternative
      Currency”
      means
      any of the Canadian Dollars, Dollars, Euro, Swiss Francs, Sterling Pounds and
      Japanese Yen which are freely transferable

     

    
      
        
        

      

      1

      

        

      

      
        
        

      

    
     

    and
      freely convertible and available to the Bank in the London Interbank
      Eurocurrency Market or, as the case may be within the zone of the European
      Economic and Monetary Union;

     

    “Banking
      Day”
      means a
      day (other than a Saturday or Sunday) on which banks and financial markets
      in
      London, Frankfurt/Main, Hamburg and Bremen are open for business and, in respect
      of a day on which a payment is required to be made hereunder, a day on which
      banks and financial markets are open for business in the main financial centre
      of the country in which such payment is to be made;

     

    “Canadian
      Dollar”
      or
“CAD”
      means
      the lawful currency of Canada;

     

    “Conversion
      Notice”
      means a
      notice given from time to time by the Borrower to the Bank for the conversion
      of
      the Tranche A at the spot or forward Rate of Exchange (as the case may be)
      from one currency to another Alternative Currency for value on the first day
      of
      the next following Interest Period. In case of forward Conversion Notice the
      Borrower may cancel and/or change the same until the third Banking Day before
      the commencement of the next following Interest Period, bearing all costs and
      expenses and losses in respect thereof;

     

    “converted
      into”
      means
      actually following a Conversion Notice from the Borrower or notionally converted
      by the Bank (as the case may be) at the Rate of Exchange for purchase in the
      German Foreign Exchange Market at 11:00 a.m. local time by Tranche A
      of the currency in which Tranche A is then denominated with the currency in
      which Tranche A is to be denominated at least three (3) Banking Days
      before and for value on the commencement of the relevant Interest Period (as
      the
      case may be);

     

    “Dollars”
      and
“$”
      means
      the lawful currency for the time being of the United States of America in
      immediately available and transferable funds or such other funds as are
      customary for same day settlement of international Dollar
      transactions;

     

    “Drawdown
      Date”
      means
      the date upon which the Borrower has requested that the Loan be advanced to
      it
      pursuant to Clause 3, or thereafter the date on which the Loan is actually
      advanced to the Borrower hereunder;

     

    “Euro”
      and
“€“
      means
      the
      lawful currency of the European Monetary Union as more particularly described
      in
      the Treaty in the European Union (Maastricht) 1992 and the Council
      Regulation 235/97 as amended from 1 January, 1999 by 1103/1997 and
      974/1998 and the relevant European Community and national
      legislation;

     

    “Interest
      Period”
      shall
      have the meaning given to it in Clause 5.1;

     

    “Japanese
      Yen”
      and
“JPY”
      means
      the lawful currency for the time being of Japan;

     

    “Loan
      Currency”
      means in
      relation to Tranche A, the currency in which Tranche A is from time to
      time being denominated and in relation to Tranche B, Dollars;

    
       

      
        
          
          

        

        2

        
  

          

        

        
          
          

        

      

    
     

    “Manager”
      means
      for the time being Safety Management Overseas S.A., of Panama, having its
      registered office in Panama and an office established in Greece (32 Avenue
      Karamanli, POBox 70837, GR 16605 Voula, Athens) pursuant to the Greek
      laws 89/67, 378/68, 27/75 and 814/79 (as amended) or any other person
      appointed by the Borrower, with the consent of the Bank, as the manager of
      the
      Vessel and includes its successors in title;

     

    “Original
      Dollar Amount”
      means
      such amount of principal which would then be outstanding (and whether or not
      then payable) had the Loan at all times been denominated in Dollars as it would
      have been reduced from time to time by repayments and prepayments under this
      Agreement if the same had been made in Dollars;

     

    “Pledged
      Account”
      means an
      account of the Borrower or the Manager or any other company acceptable to the
      Bank (hereinafter called the “Pledgor”)
      opened
      or to be opened with the Bank whereto the Pledged Deposit shall be deposited
      and
      maintained;

     

    “Pledged
      Deposit”
      means,
      an amount equal to fifteen per cent (15%) of the amount of the Loan outstanding
      at any relevant time under this Agreement deposited into the Pledged
      Account;

     

    “Rate
      of Exchange”
      means
      the spot or forward (as the case may be) rate of exchange for purchase in the
      German Foreign Exchange Market at 11:00 hours (local time) of the relevant
      date of one currency by another in the amount required for the relevant
      transaction as such rate is determined by the Bank in its usual practice (in
      respect of which rate the Bank shall be guided by and shall be as near as
      possible to the rate of exchange published on the Reuters Screen at the relevant
      time) and offered to the Borrower;

     

    “Security
      Documents”
      shall
      have the meaning given to them in Clause 10;

     

    “Sterling
      Pounds”
      or
“₤”
      means
      the lawful currency of the United Kingdom;

     

    “Swiss
      Francs”
      means
      the lawful currency for the time being of Switzerland;

     

    “Vessel”
      means
      the dry bulkcarrier of 87,000 dwt constructed at IHIMU Yokohama, Japan
      delivered to the Borrower and registered in the ownership of the Borrower under
      Cyprus flag with the name “STALO”.

     

    
      	
              2.3

            	
              Tranche A
                (or such part thereof as the Borrower and the Bank shall agree) shall
                be
                advanced or converted into an Alternative Currency available to the
                Bank
                in the London Interbank Eurocurrency Market or, as the case may be
                within
                the zone of the European Economic and Monetary
                Union.

            

    

     

    
      	
              2.4

            	
              The
                advancing or maintaining of Tranche A (or a part thereof) in an
                Alternative Currency is subject to the fact that the then applicable
                currency regulations do not, in the reasonable opinion of the Bank,
                adversely affect the position of the Bank in relation
                thereto.

            

    

     

    
      	
              2.5

            	
              If
                an Alternative Currency is not available (in the opinion of the Bank)
                to
                the Bank Tranche A (or the relevant part thereof) shall be
                denominated in Euro.

            

    

     

    
      
        
        

      

      3

      

        

      

      
        
        

      

    
     

    
      	
              2.6

            	
              Provided
                that the Borrower is not in default hereunder or under the Security
                Documents and that the Bank has received from the Borrower a duly
                signed
                Conversion Notice not less than three (3) Banking Days prior to the
                Drawdown Date or the end of the first and each following Interest
                Period
                for value on the first day of the next following Interest Period,
                the Bank
                shall convert Tranche A (or such part thereof as the Borrower and the
                Bank shall agree) into an Alternative
                Currency.

            

    

     

    
      	
              2.7

            	
              Tranche A
                shall not be divided into more than two Alternative Currencies (including
                Dollar) at any time and any notice specifying otherwise shall be
                invalid.

            

    

     

    
      	
              2.8

            	
              In
                the event that Tranche A (or a part thereof) is denominated in a
                currency other than Dollars and the Bank should determine on the
                last day
                of each Interest Period and if such Interest Period is longer than
                three
                (3) months, at the end of each three-month interval(s) during such
                Interest Period (the “Adjustment
                Date(s)”)
                that Tranche A when converted (notionally) into Dollars at the spot
                Rate of Exchange is greater than 110% of the Original Dollar Amount
                on
                such day, the Borrower shall provide to the Bank such additional
                securities as shall be acceptable to the Bank (and which shall equal
                in
                value the Excess Amount, and for the purposes of this
                Clause “Excess
                Amount”
                shall mean that part of Tranche A, when Tranche A is converted
                (notionally) into Dollars at the Spot Rate of Exchange on the relevant
                day, by which exceeds the 105% of the Original Dollar Amount) and
                shall
                sign and execute such documents in respect thereof as it will be
                required
                under the applicable law(s) PROVIDED ALWAYS that if at any subsequent
                Adjustment Date Tranche A when converted (notionally) into Dollars
                falls below 105% of the Original Dollar Amount, the Bank shall at
                the
                request of the Borrower release such additional securities granted
                to the
                Bank hereunder.

            

    

     

    
      	
              2.9

            	
              The
                Borrower shall be obliged to make all payments in respect of principal
                of
                each Tranche and interest thereon and other payments (or prepayments)
                under this Agreement in respect of or by reference to the relevant
                Tranche
                (or such part thereof) in the relevant Loan
                Currency.

            

    

     

    
      	
              3.

            	
              DRAWDOWN

            

    

     

    
      	
              3.1

            	
              The
                Borrower may drawdown the full amount of the Loan on the Drawdown
                Date and
                in the currency(ies) specified in the Notice of Drawing referred
                to in
                Clause 3.2, such date being not later than 15th May,
                2006 (the “Termination
                Date”)
                or such later date as the Bank in its sole discretion may agree in
                writing. Any portion of the Loan not drawn by the Termination Date
                shall
                be cancelled and shall thereafter not be available to the Borrower,
                unless
                the parties hereto agree otherwise.

            

    

     

    
      	
              3.2

            	
              The
                Borrower may make a request for the advance of the Loan by sending
                to the
                Bank a duly completed Notice of Drawing substantially in the form
                of
                Schedule 1 hereto (which shall be revocable up until the fourth
                Banking day, prior to the specified Drawdown Date - whereafter it
                will be
                irrevocable) to be received by the Bank not later than 12:00 a.m.
                (Hamburg/Bremen time) three (3) Banking Days prior to the Drawdown
                Date.

            

    

     

    
      
        
        

      

      4

      

        

      

      
        
        

      

    
     

    
      	
              4.

            	
              TERM
                OF THE LOAN

            

    

     

    
      	
              4.1

            	
              The
                Loan is to be made available to the Borrower for a period commencing
                on
                the Drawdown Date and ending, subject to the terms and conditions
                of this
                Agreement, ten (10) years
                thereafter.

            

    

     

    
      	
              4.2

            	
              The
                period commencing on the date hereof and terminating upon all the
                moneys
                payable or to become payable at any time pursuant to this Agreement
                and/or
                the Security Documents shall have been paid and discharged in full
                is
                herein called the “Security
                Period”.

            

    

     

    
      	
              5.

            	
              INTEREST
                AND INTEREST PERIODS

            

    

     

    
      	
              5.1

            	
              The
                Borrower shall pay interest on the Loan (or such relevant part) in
                respect
                of each Interest Period relating thereto (hereinafter the “Interest”)
                on the last day of such Interest Period at the rate per annum determined
                by the Bank to be the aggregate (hereinafter the “Basic
                Rate”)
                of:

            

    

     

    
      	 	
              (a)

            	
              in
                the case the Loan or any part thereof is denominated in Dollars or
                an
                Alternative Currency: (i) the Margin and (ii) Libor;
                and

            

    

     

    
      	 	
              (b)

            	
              in
                the case Tranche A or any part thereof is denominated in
                Euro: (i) the Margin and
                Euribor.

            

    

     

    
      	
              5.2

            	
              In
                this Agreement:

            

    

     

    
      	 	
              (a)

            	
              “Interest
                Period”
                shall mean each period for the calculation of Interest in respect
                of the
                Loan (or such part thereof) ascertained in accordance with Clause 5.3
                and 5.4;

            

    

     

    
      	 	
              (b)

            	
              “Margin”
                shall mean zero point fifty five per centum (0.55%) per
                annum;

            

    

     

    
      	 	
              (c)

            	
              “Libor”
                shall mean the rate of interest applicable to the Loan (or the relevant
                part thereof) for each Interest Period relative thereto and being
                the rate
                per annum determined by the Bank to be equal (rounded upwards, if
                necessary, to the nearest one sixty-fourth of one per centum (1/64%))
                to
                the offered rate for deposits in Dollars or, as the case may be,
                the
                relevant for a term co-extensive with such Interest Period as set
                forth on
                the Reuters Page FRBD at approximately 11:00 a.m. London time on the
                second Banking Day prior to the commencement of such Interest Period;
                provided
                always
                that if such offer rate is not available, for whatsoever reason,
                on the
                Reuters Page FRBD at approximately 11:00 a.m. London time then Libor
                for such Interest Period shall mean the rate per annum determined
                by the
                Bank to be the arithmetic mean (rounded upwards, if necessary, to
                the
                nearest one sixty-fourth of one per centum (1/64%)) of the rates
                communicated by the Reference Banks to the Bank as the rates at which
                each
                such Reference Bank would offer a deposit in Dollars or, as the case
                may
                be, the relevant Alternative Currency for a period equal to such
                Interest
                Period in an amount equivalent to or comparable with the amount of
                the
                Loan or the relevant part (thereof) to prime banks in the London
                Interbank
                Market at approximately 11:00 a.m. London time on the second Banking
                Day prior 

            

    

     

    
      
        
        

      

      5

      

        

      

      
        
        

      

    
     

    
      	 	 	
              to
                the commencement of such Interest Period; provided
                always,
                that if any of the Reference Banks fails so to communicate a rate,
                Libor
                shall be determined by reference to the rate or rates offered by
                the
                remaining Reference Bank or Reference
                Banks;

            

    

     

    
      	 	
              (d)

            	
              “Euribor”
                means, in relation to a particular period and to amounts denominated
                in
                Euro:

            

    

     

    
      	 	
              (i)

            	
              the
                rate for deposits in Euro equivalent to or comparable to the amount
                of
                Tranche A (or the relevant part thereof) for a period equivalent to
                such period at or about 11:00 a.m. (Brussels time) on the second
                Banking Day before the first day of such period as displayed on Reuters
                page 284 Euribor
                (or such other page as may replace such page 284 Euribor)
                on such system or on any other system of the information vendor for
                the
                time being; and

            

    

     

    
      	 	
              (ii)

            	
              if
                on such date no such rate is so displayed, Euribor for a period equivalent
                to such period shall be the arithmetic mean (rounded upwards, if
                necessary, to one sixty-fourth of one per centum (1/64%)) of the
                rates
                quoted to the Bank by each of the Reference Banks at the request
                of the
                Bank as such Reference Bank’s offered rate per annum to prime banks within
                the zone of the European Economic and Monetary Union for deposits
                in Euro
                for an amount approximately equivalent to or comparable with the
                amount to
                which Euribor is to be determined at 11:00 a.m. (Brussels time) on
                the second Banking Day prior to the beginning of such period for
                delivery
                on the first day of that period and for the number of days comprised
                therein; and

            

    

     

    
      	 	
              (e)

            	
              “Reference
                Banks”
                shall mean Deutsche Schiffsbank Aktiengesellschaft, The Royal Bank
                of
                Scotland, Plc. and Barclays Bank
                Plc.

            

    

     

    
      	
              5.3

            	
              The
                Borrower may by written notice to the Bank not later than 11:00 a.m.
                (Hamburg time) three (3) Banking Days prior to the Drawdown Date and
                thereafter on the second Banking Day prior to the commencement of
                each
                Interest Period select at its option in relation to the Loan (but
                not in
                relation to a part thereof) whether the length of the ensuing Interest
                Period shall be of one (1), three (3), six (6) or twelve (12) months
                or request an Interest Period of a different duration to which the
                Bank,
                in this case at its option, may
                agree.

            

    

     

    If
      the
      Borrower fails to make a selection or request in respect of an Interest Period
      in accordance with the provisions of this Clause, the Borrower shall be deemed
      to have selected for such an Interest Period either a duration of six
      (6) months or, in case that funds in the amount of the Loan are not
      available for six (6) months, any other of the aforesaid periods which the
      Bank may reasonably and in good faith determine.

     

    
      	
              5.4

            	
              The
                first Interest Period in respect of the Loan shall commence on the
                Drawdown Date and subsequent Interest Periods shall commence forthwith
                upon the expiry of the previous Interest Period. Interest shall be
                calculated on the Loan as from the commencing date of each Interest
                Period
                to the last day of such Interest Period and shall be paid on the
                last day
                of such Interest 

            

    

    
       

      
        
          
          

        

        6

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              Period
                or, in the case of Interest Periods of more than six (6) months, by
                instalments, the first such instalment being payable six (6) months
                from the commencement of the Interest Period and the subsequent
                instalments at intervals of six (6) months thereafter or, if shorter,
                the period from the date of the preceding instalment until the last
                day of
                the relevant Interest Period.

            

    

     

    
      	
              5.5

            	
              In
                the event that a Repayment Instalment or Instalments (as such terms
                are
                defined hereinafter) fall due on a day of an Interest Period other
                than
                the last day of such an Interest Period, the Interest to be paid
                by the
                Borrower in relation to such an Interest Period shall be the aggregate
                of
                (i) the interest accruing on the Repayment Instalment or Instalments
                from the beginning of such Interest Period to the date when each
                such
                Repayment Instalment was made and (ii) the Interest accruing on the
                balance of the Loan (namely the amount of the Loan outstanding after
                the
                Repayment Instalment or Instalments have been made) from the date
                when the
                last such Repayment Instalment was made during the Interest Period
                in
                question to the last day of such an Interest
                Period.

            

    

     

    
      	
              5.6

            	
              In
                the event that the Borrower fails to pay on its due date any amount
                payable under this Agreement (other than of disbursements and expenses
                referred to in Clause 9.5) the Borrower shall pay interest
                (hereinafter “Default
                Interest”)
                on such sum, on demand, from the due date thereof up to the date
                of actual
                payment, at a rate (hereinafter “Default
                Rate”)
                determined by the Bank to be the aggregate of (i) one per centum
                (1%) p.a. and (ii) the funding cost of the Bank. If for the
                reason specified in Clause 5.7(b) the Bank is unable to determine a
                rate in accordance with the provisions of this Clause 5.6, the
                Default Interest on any sum not paid on its due date for payment
                shall be
                calculated at a rate determined to be one and one half per centum
                per
                annum (1-1/2%) above the aggregate of (i) the Margin and
                (ii) the cost of funds to the
                Bank.

            

    

     

    
      	
              5.7

            	
              If
                two Banking Days, prior to the commencement of an Interest Period,
                including the initial Interest Period, the Bank shall reasonably
                determine
                (such reasonable determination to be conclusive and binding upon
                the
                Borrower) that:

            

    

     

    
      	 	
              (a)

            	
              the
                relevant Loan Currency will not be available to the Bank in such
                amounts
                as are required for the funding of the Loan or the relevant part
                thereof
                for such Interest Period, or

            

    

     

    
      	 	
              (b)

            	
              by
                reason of changes affecting the London Interbank Eurocurrency Market
                or,
                as the case may be within the zone of the European Economic and Monetary
                Union adequate and fair means do not exist for ascertaining Libor,
                or
                Euribor, or

            

    

     

    
      	 	
              (c)

            	
              the
                applicable currency regulations do forbid, aggravate or restrict
                the
                granting or maintaining of the Loan or the relevant part thereof
                in the
                relevant Loan Currency, or

            

    

     

    
      	 	
              (d)

            	
              the
                rate at which deposits in the relevant Loan Currency are offered
                by the
                Reference Banks to prime banks in London doesn’t accurately reflect the
                cost of the Bank of making or maintaining the Loan or the relevant
                part
                thereof during such Interest
                Period,

            

    

    
       

      
        
          
          

        

        7

        
  

          

        

        
          
          

        

      

       

    
    then
      the
      Bank shall forthwith give notice thereof to the Borrower, and the Borrower
      and
      the Bank shall enter into negotiations in order to find a mutually satisfactory
      alternative basis for the advance or, as the case may be, the continuation
      of
      the Loan. This alternative basis may include alternative currencies, alternative
      interest rates or alternative interest periods, but shall include a margin
      above
      the cost of the funds to the Bank equal to the Margin. If within thirty
      (30) days from the notice of the Bank being received by the Borrower the
      parties hereto have not agreed on any such alternative basis, the Loan shall
      be
      (i) if not advanced, cancelled or (ii) if advanced, repaid. The
      Borrower shall have the right to repay the Loan, without premium or penalty,
      on
      the last day of such thirty-days or, if agreed by the parties hereto, earlier,
      together with accrued interest thereon calculated on a daily basis from the
      expiry of the Interest Period in question up to the date of such repayment
      at a
      rate being the aggregate of (i) the Margin, (ii) the rate, or
      arithmetic means of rates, at which the Bank was able to fund the Loan from
      time
      to time during the period of negotiations and (iii) all other amounts due
      under this Agreement.

     

    
      	
              5.8

            	
              Interest
                and Default Interest shall be calculated on the basis of exact number
                of
                days elapsed and a year of 360 days unless Tranche A is
                denominated in Pounds Sterling being the lawful currency of the United
                Kingdom for the time being in which case Interest and Default Interest
                shall be calculated on the basis of exact number of days elapsed
                and a
                year of 365 days.

            

    

     

    
      	
              6.

            	
              REPAYMENT
                - PREPAYMENT

            

    

     

    
      	
              6.1

            	
              The
                Loan shall be repaid as follows: (i) Tranche A by (i) twenty
                (20) consecutive semi-annual Repayment Instalments, commencing with
                the first Repayment Instalment on the date falling six (6) months
                from the Drawdown Date; each of such Repayment Instalments shall
                be in the
                amount of $637,500 (six hundred thirty seven thousand five hundred)
                or its
                equivalent in the Alternative Currency in which Tranche A is at the
                relevant time denominated, (ii) by an additional payment of
                $12,750,000 (twelve million seven hundred fifty thousand) or its
                equivalent in the Alternative Currency in which Tranche A is at the
                relevant time denominated (the “Tranche A
                Balloon Instalment”)
                which shall be payable together with the last Repayment Instalment
                one
                hundred and twenty (120) months from the Drawdown Date (the
                “Final
                Maturity Date”)
                and (b) Tranche B by (i) twenty (20) consecutive
                semi-annual Repayment Instalments, commencing with the first Repayment
                Instalment on the date falling six (6) months from the Drawdown Date;
                each of such Repayment Instalments shall be in the amount of $112,500
                (one
                hundred twelve thousand five hundred), (ii) an additional payment of
                $2,250,000 (two million two hundred fifty thousand) (the “Tranche B
                Balloon Instalment”
                and together with the Tranche A Balloon Instalment, the “Balloon
                Instalments”)
                which shall be payable together with the last Repayment Instalment
                one
                hundred and twenty (120) months from the Drawdown
                Date.

            

    

     

    Provided
      always,
      that:

     

    
      	 	
              (i)

            	
              For
                the purpose of calculating the amount of each Repayment Instalment
                of
                Tranche A (or the relevant part thereof) in case of conversion of
                

            

    

    
       

      
        
          
          

        

        8

        
  

          

        

        
          
          

        

      

       

    
    
      	 	 	
              Tranche
                A (or the relevant part thereof) from one currency into another currency,
                the following provisions shall
                apply:

            

    

     

    
      	 	
              aa)

            	
              in
                case the whole (but not part only) of Tranche A is at any time converted
                into one currency, the amount to be repaid on each Repayment Date
                subsequent to such conversion shall be equivalent to the percentage
                (which, in this Clause 6.1, is referred to as the “Relevant
                Repayment Percentage”)
                of the amount of Tranche A (outstanding prior to the payment of the
                relevant Repayment Instalment) set out in column 3 of the table below
                opposite to such Repayment Instalment (or such other percentages
                or
                amounts respectively as the Borrower may reasonably request and the
                Bank
                in its absolute discretion may from time to time agree) converted
                at the
                Rate of Exchange applied on the conversion of Tranche A in such
                currency; and

            

    

     

    
      	 	
              bb)

            	
              in
                case Tranche A is at any time denominated in two currencies, the
                amount to be repaid on each Repayment Date subsequent to the relevant
                conversion in respect of each part of Tranche A, as a proportion of
                the Relevant Repayment Percentage of Tranche A, shall be the same as
                the proportion of Tranche A which such part represents converted at
                the Rate of Exchange applied on the conversion of such part of
                Tranche A in the relevant
                currency:

            

    

     

    
      	
              (1)

              Repayment

              Instalment

              Number

            	 	
              (2)

              Number
                of

              months
                from the

              Drawdown
                Date

            	 	
              (3)

              Relevant
                Repayment

              Percentage
                (%) of the

              amount
                of Tranche A

              (prior
                to repayment

              due
                on such date)

            	 	
              (4)

              Estimated
                Original

              Dollar
                Amount

              (after
                repayment

              due
                on such date)

            
	
              1

            	 	
              6

            	 	
              2,5000

            	 	
              24,862,500

            
	
              2

            	 	
              12

            	 	
              2,5641

            	 	
              24,225,000

            
	
              3

            	 	
              18

            	 	
              2,6316

            	 	
              23,587,500

            
	
              4

            	 	
              24

            	 	
              2,7027

            	 	
              22,950,000

            
	
              5

            	 	
              30

            	 	
              2,7778

            	 	
              22,312,500

            
	
              6

            	 	
              36

            	 	
              2,8571

            	 	
              21,675,000

            
	
              7

            	 	
              42

            	 	
              2,9412

            	 	
              21,037,500

            
	
              8

            	 	
              48

            	 	
              3,0303

            	 	
              20,400,000

            
	
              9

            	 	
              54

            	 	
              3,1250

            	 	
              19,762,500

            
	
              10

            	 	
              60

            	 	
              3,2258

            	 	
              19,125,000

            
	
              11

            	 	
              66

            	 	
              3,3333

            	 	
              18,487,500

            
	
              12

            	 	
              72

            	 	
              3,4483

            	 	
              17,850,000

            
	
              13

            	 	
              78

            	 	
              3,5714

            	 	
              17,212,500

            
	
              14

            	 	
              84

            	 	
              3,7037

            	 	
              16,575,000

            
	
              15

            	 	
              90

            	 	
              3,8462

            	 	
              15,937,500

            
	
              16

            	 	
              96

            	 	
              4,0000

            	 	
              15,300,000

            
	
              17

            	 	
              102

            	 	
              4,1667

            	 	
              14,662,500

            
	
              18

            	 	
              108

            	 	
              4,3478

            	 	
              14,025,000

            
	
              19

            	 	
              114

            	 	
              4,5455

            	 	
              13,387,500

            
	
              20

            	 	
              120

            	 	
              100,0000

            	 	
              Ø

            

    

    
       

      
        
          
          

        

        9

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              (i)

            	
              that
                in case the amount of the Loan drawn by the Borrower is less than
                $30,000,000 then the amount of each of the Repayment Instalments
                and the
                Balloon Instalments shall be reduced pro-rata;
                and

            

    

     

    
      	 	
              (ii)

            	
              on
                the Final Maturity Date the Borrower shall pay to the Bank any and
                all
                amounts then outstanding or payable under this Agreement and the
                Security
                Documents including, but without limitation, any exposure from currency
                fluctuations pursuant to
                Clause 2.

            

    

     

    In
      this
      Agreement “Repayment
      Instalments”
      shall
      mean the twenty (20) consecutive semi-annual instalments described in this
      Clause 6.1 and in the singular shall mean any of them.

     

    
      	
              6.2

            	
              The
                Borrower may prepay without premium or penalty the whole or any part
                of
                the Loan on the last day of any Interest Period relating thereto,
                provided
                that:

            

    

     

    
      	 	
              (a)

            	
              the
                Bank shall have received from the Borrower not less than 10 Banking
                Days
                prior written notice of its intention to make such
                prepayment;

            

    

     

    
      	 	
              (b)

            	
              the
                amount of any such partial prepayment shall be equal to the amount
                of a
                Repayment Instalment or the equivalent thereof in the relevant Loan
                Currency or a higher integral multiple
                thereof;

            

    

     

    
      	 	
              (c)

            	
              no
                amount prepaid can be re-borrowed;

            

    

     

    
      	 	
              (d)

            	
              each
                prepayment shall be made together with accrued interest on the amount
                prepaid and all other sums payable thereon under the terms of this
                Agreement and if such prepayment is not made on the last day of an
                Interest Period relating to the amount prepaid together with any
                loss the
                Bank has suffered as a result of such a prepayment being made on
                a date
                other than the last day of an Interest Period and, for the purpose
                of this
                Clause, shall mean the difference between the applicable Libor or
                (as the
                case may be) Euribor rate for the relevant Interest Period and the
                interest rate the Bank may obtain by depositing the amount so prepaid;
                and

            

    

     

    
      	 	
              (e)

            	
              the
                amount of any such partial prepayment shall be applied against the
                Repayment Instalments outstanding at the time of such prepayment
                in direct
                order of maturity.

            

    

     

    
      	
              6.3

            	
              In
                case the Vessel becomes a Total Loss or suffers damage or is involved
                in
                an incident which may, in the reasonable opinion of the Bank, result
                in
                the Vessel being subsequently determined to be a Total Loss (i) prior
                to the Drawdown Date, this Agreement shall be cancelled or (ii) in
                case the Loan has been already advanced, the Borrower shall prepay
                the
                Loan, without penalty, premium or prepayment fee, within one hundred
                and
                twenty (120) days of such Total Loss or, as the case may be, after
                the
                date on which the incident which may, in the reasonable opinion of
                the
                Bank, result in the Vessel being subsequently determined to be a
                Total
                Loss occurred or, if earlier, on the date upon which the insurance
                proceeds in respect of such Total Loss are or Requisition Compensation
                is
                received by the Borrower (or the Bank pursuant to the Security
                

            

    

     

    
      
        
        

      

      10

      

        

      

      
        
        

      

    
     

    
      	 	
              Documents),
                together with accrued interest to the date of prepayment and all
                other
                sums including, without limitation, any amounts payable by the Borrower
                to
                the Bank under this Agreement and the Security Documents. For the
                purpose
                of this Agreement a Total Loss shall be deemed to have
                occurred:

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

            	
              in
                the case of constructive total loss of the Vessel, on the actual
                date and
                at the time notice of abandonment of the Vessel is given to the insurers
                of the Vessel for the time being, (provided a claim for total loss
                is
                admitted by such insurers) or, if such insurers do not admit such
                a claim,
                at the date and at the time at which a total loss is subsequently
                and
                finally adjudged by a competent court of law to have
                occurred;

            

    

     

    
      	 	
              (c)

            	
              in
                the case of a compromised or arranged total loss, on the date upon
                which a
                binding agreement as to such compromised or arranged total loss has
                been
                entered into by the insurers of the
                Vessel;

            

    

     

    
      	 	
              (d)

            	
              in
                the case of requisition of title or other compulsory acquisition,
                on the
                date upon which the relevant requisition of title or other compulsory
                acquisition occurs (hereinafter “Compulsory
                Acquisition”);
                and

            

    

     

    
      	 	
              (e)

            	
              in
                the case of hijacking, theft, condemnation, confiscation capture,
                detention or seizure of the Vessel (other than where the same amounts
                to
                compulsory acquisition of the Vessel) by any government entity, which
                deprives the Borrower of the use of the Vessel, on the expiry of
                the
                period of sixty (60) days following the date upon which the relevant
                hijacking, theft, condemnation confiscation, capture, detention or
                seizure
                occurred.

            

    

     

    
      	
              7.

            	
              FEES-
                COMMITMENT COMMISSION

            

    

     

    
      	
              7.1

            	
              The
                Bank will charge to the Borrower an arrangement fee of $55,000 (Dollars
                fifty five thousand) which is due and payable on the Drawdown
                Date.

            

    

     

    
      	
              8.

            	
              PAYMENTS

            

    

     

    
      	
              8.1

            	
              Unless
                otherwise agreed by the Bank all moneys owed by the Borrower hereunder
                are
                payable in the currency in which they have become due and are payable
                free
                and clear of any deductions of whatsoever nature to such account
                and with
                such bank as the Bank shall notify to the Borrower from time to
                time.

            

    

     

    
      	
              8.2

            	
              The
                Borrower shall continue to be under its payment obligation pursuant
                hereto
                until the relevant amount due has been credited to the account notified
                by
                the Bank to the Borrower in accordance with
                Clause 8.1.

            

    

     

    
      	
              8.3

            	
              In
                case a payment date is not a Banking Day at the place where such
                payment
                is to be made then the payment shall be made on the first following
                Banking Day unless the first following Banking Day falls in the next
                succeeding calendar month in which case the payment shall be made
                on the
                preceding Banking Day.

            

    

     

    
      
        
        

      

      11

      

        

      

      
        
        

      

    
     

    
      	
              8.4

            	
              All
                moneys received by the Bank under or pursuant to this Agreement and/or
                any
                of the Security Documents shall be applied by the Bank in the following
                manner:

            

    

     

    
      	 	
              (a)

            	
              firstly:
                in or towards payment of all unpaid fees and expenses which may be
                owing
                to the Bank under this Agreement or any of the Security
                Documents;

            

    

     

    
      	 	
              (b)

            	
              secondly:
                in or towards payment of any arrears of interest owing in respect
                of the
                Loan or any part thereof;

            

    

     

    
      	 	
              (c)

            	
              thirdly:
                in or towards repayment of the
                Loan;

            

    

     

    
      	 	
              (d)

            	
              fourthly:
                in or towards payment to the Bank of any loss suffered by reason
                of any
                such payment in respect of principal not being effected on the last
                day of
                the Interest Period relating to the part of the Loan
                repaid;

            

    

     

    
      	 	
              (e)

            	
              fifthly:
                in or towards payment to the Bank of any other sums owing to it under
                any
                of the Security Documents; and

            

    

     

    
      	 	
              (f)

            	
              sixthly:
                the surplus (if any) shall be paid to the Borrower or to whomsoever
                else
                may be entitled to receive such
                surplus.

            

    

     

    
      	
              9.

            	
              COSTS,
                EXPENSES AND DAMAGES

            

    

     

    
      	
              9.1

            	
              Subject
                to the provisions of this Agreement, the Borrower undertakes to pay
                to the
                Bank on demand:

            

    

     

    
      	 	
              (a)

            	
              all
                reasonable expenses (including legal, printing and out-of-pocket
                expenses)
                incurred by the Bank in connection with the negotiation, preparation,
                execution and, where relevant registration of this Agreement and
                any of
                the Security Documents (as hereinafter defined);
                and

            

    

     

    
      	 	
              (b)

            	
              all
                reasonable expenses (including legal and out-of-pocket expenses)
                incurred
                by the Bank in contemplation of, or preservation of any rights under,
                this
                Agreement and/or any of the Security Documents (as hereinafter defined),
                or otherwise in respect of the moneys owing under this Agreement
                and/or
                any of the Security Documents (as hereinafter
                defined);

            

    

     

    Provided
      always,
      that
      any expenses incurred by virtue of Clause 17 hereof coming into operation
      shall be equally borne by the Borrower and the Bank.

     

    
      	
              9.2

            	
              The
                Borrower shall bear all state and local taxes and dues which are
                levied
                outside the Federal Republic of Germany on the capital, the repayments,
                the interest and other payments, today or in future related to this
                Loan.
                This provision concerns all taxes and dues of any kind, whether of
                direct
                or indirect personal or real character (as e.g. withholding tax,
                income
                tax, capital tax, trade tax and turnover tax), whether they are levied
                on
                any payment made by the Borrower to the Bank under and in accordance
                with
                the terms of this Agreement and/or any of the Security Documents
                (as
                hereinafter defined) or on the property mortgaged to the Bank by
                the
                Borrower for reason of any legal or real events (herein collectively
                referred to as “taxes”).
                This provision must be understood in its

            

    

    
       

      
        
          
          

        

        12

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              broadest
                sense so as to entitle the Bank which fixes the rate of interest
                without
                regard to any non-German taxes, to pass on to the Borrower any taxes
                accruing outside the Federal Republic of Germany. Such taxes and
                dues will
                be charged to the Borrower also if for reason of any legal or
                authoritative regulations they are to be collected from the Bank.
                Such
                taxes and dues collected from the Bank must be reimbursed by the
                Borrower
                within thirty (30) days after it is informed to this effect. Any
                failure of the Borrower to remit to the Bank full payments required
                hereunder for any reason whatsoever shall constitute a default for
                non-payment as defined under
                Clause 13.

            

    

     

    
      	
              9.3

            	
              Within
                thirty days of each payment by the Borrower hereunder of tax or in
                respect
                of taxes, the Borrower shall deliver to the Bank evidence satisfactory
                to
                the Bank (including all relevant tax receipts) that such tax has
                been duly
                remitted to the appropriate
                authority.

            

    

     

    
      	
              9.4

            	
              If
                the Bank should become liable to any tax (other than on overall income
                or
                aggregate property) or be subject to any reserve requirement against
                any
                assets of, deposits with or loans by the Bank or special deposit
                requirement the result of which will be to increase the cost to the
                Bank
                of making or maintaining the Loan or to reduce the amounts of moneys
                otherwise receivable by the Bank hereunder in either case by an amount
                the
                Bank shall deem material, then the Borrower will pay to the Bank
                on demand
                such additional interest on the Loan as will compensate the Bank
                for such
                additional cost or such reduction (as the case may
                be).

            

    

     

    
      	
              9.5

            	
              All
                amounts so disbursed or expended by the Bank shall bear interest
                at 1%
                p.a. over the Bank’s funding cost from the 31st
                day after receipt of the relevant invoice by the Borrower until the
                time
                of refunding or repayment thereof.

            

    

     

    
      	
              9.6

            	
              In
                case interest for the Loan has been fixed and the Borrower does not
                take
                the Loan or any part thereof or does not meet with the agreed conditions
                precedent set out in Clause 12 or the Bank for one of the reasons
                mentioned under Clause 13 refuses disbursement of the Loan or the
                Bank prematurely demands repayment of the Loan or any part thereof
                in
                accordance with the terms of this Agreement, the Bank is entitled
                either
                to insist on performance or to withdraw from this Agreement and to
                claim
                damages for non-performance.

            

    

     

    
      	
              9.7

            	
              The
                Borrower shall on demand (and it is hereby expressly undertaken by
                the
                Borrower to) indemnify the Bank, without prejudice to any of the
                other
                rights of the Bank under any of the Security Documents, against any
                expense or loss, which the Bank shall prove as sustained or incurred
                as a
                consequence of:

            

    

     

    
      	 	
              (i)

            	
              in
                liquidating or employing deposits from third parties acquired or
                arranged
                to fund or maintain all or any part of the Loan and/or any overdue
                amount
                (or an aggregate amount which includes the Loan or any overdue amount);
                and

            

    

     

    
      	 	
              (ii)

            	
              in
                terminating, or otherwise in connection with, any interest and/or
                currency
                swap or any other transaction entered into (whether with another
                legal
                entity or with another office or department of the Bank) to hedge
                any
                exposure arising under this Agreement or that part which the Bank
                determines is fairly attributable to this

            

    

    
       

      
        
          
          

        

        13

        
  

          

        

        
          
          

        

      

       

    
    
      	 	 	
              Agreement
                of the amount of the liabilities, expenses or losses (including losses
                of
                prospective profits) incurred by it in terminating, or otherwise
                in
                connection with, a number of transactions of which this Agreement
                is
                one.

            

    

     

    
      	
              10.

            	
              SECURITIES

            

    

     

    
      	
              10.1

            	
              To
                secure all its obligations under this Agreement, the Borrower shall
                execute and deliver and/or shall procure the execution and delivery
                to the
                Bank (as the case may be) of the following Security Documents (as
                hereinafter defined) and notices all to be substantially in the form
                of
                the relevant Schedules attached
                hereto:

            

    

     

    
      	 	
              (a)

            	
              Mortgage

            

    

     

    a
      first
      priority statutory Cyprus ship mortgage over the Vessel and the Deed of Covenant
      supplemental thereto (herein together referred to as the “Mortgage”).

     

    
      	 	
              (b)

            	
              Assignment
                of Vessel’s Insurances, Earnings and Requisition
                Compensation

            

    

     

    In
      relation to the Vessel, a first priority assignment in respect of: (i) All
      claims and benefits under all insurance policies and Protection and Indemnity
      Insurances and the proceeds thereof which have been or will be arranged pursuant
      to the terms hereof and of the Mortgage. The Borrower shall execute and deliver
      notices of assignment and cause the Vessel’s insurers to attach such notice to
      the insurance policies. (ii) All charter hire, freights and other earnings
      or income or claims for income of the Vessel or any other amount due or to
      become due under any charter or other employment contract (including
      compensation or other indemnity) (herein “Earnings”).
      The
      Bank is entitled to notify such assignment to any relevant party at any time
      during the Security Period (as hereinafter defined). (iii) All sums of
      money or other compensation from time to time payable by reason of requisition
      for title or other compulsory acquisition of the Vessel, otherwise than by
      requisition for hire. (All the aforesaid assignments hereinafter referred to
      as
      the “Assignment”);

     

    
      	 	
              (c)

            	
              Manager’s
                Undertaking

            

    

     

    an
      undertaking (the “Manager’s
      Undertaking”)
      to be
      executed by the Manager in favour of the Bank, whereby the Manager would agree
      to subordinate all and any claims it may have against the Borrower and/or the
      Vessel under the relevant Management Agreement or otherwise, to the claims
      and
      rights of the Bank pursuant to this Agreement, such undertaking to be in form
      satisfactory to the Bank; and

     

    
      	 	
              (d)

            	
              Account
                Pledge Agreement

            

    

     

    an
      agreement to be made between the Pledgor and the Bank for the creation of a
      pledge in favour of the Bank over the Pledged Account, in form to be agreed
      between the Bank and the Borrower and the Pledgor.

    
      
         

        
          
            
            

          

          14

          
    

            

          

          
            
            

          

        

         

      

    
    
      	
              10.2

            	
              The
                Mortgage, the Assignment, the Account Pledge Agreement and the Manager’s
                Undertaking and as the context may require this Agreement and any
                other
                documents which may now or hereafter be executed as security for
                the
                repayment of the Loan, interest thereon and Default Interest and
                any other
                moneys payable hereunder and under the Security Documents are herein
                collectively referred to as “the
                Security Documents”.

            

    

     

    
      	
              10.3

            	
              The
                Borrower hereby undertakes that if the aggregate of (i) the market
                value of the Vessel as established by an expert valuer mutually accepted
                to the Bank and the Borrower at the end of June and December of each
                year
                during the Security Period (provided that any such valuation is considered
                necessary by the Bank) and (ii) the market value of any additional
                security for the time being actually provided to the Bank pursuant
                to
                Clauses 2.8 and 10.3 (excluding the Pledged Deposit) falls below One
                hundred and twenty percent (120%) of the Loan it will within fifteen
                days
                of being notified by the Bank to the Borrower of such shortfall
                either:

            

    

     

    
      	 	
              (a)

            	
              provide
                the Bank with additional pledged cash deposits in favour of the Bank
                in an
                amount equal to such shortfall in an account and manner to be determined
                by the Bank; or

            

    

     

    
      	 	
              (b)

            	
              prepay
                (subject to, and in accordance with Clause 6) such part of the Loan
                as will ensure that the aggregate of (i) the market value (determined
                as aforesaid) of the Vessel and (ii) the market value of any such
                additional security is after such prepayment at least One hundred
                and
                twenty percent (120%) of the Loan.

            

    

     

    
      	
              11.

            	
              INSURANCES

            

    

     

    
      	
              11.1

            	
              The
                Borrower must at its cost and expense, and in accordance with the
                provisions of this Agreement and of the Mortgage, effect prior to
                Drawdown
                Date and maintain during the whole Security Period the insurances
                (herein
                “Insurances”)
                in respect of the Vessel on terms and conditions and with brokers
                and
                insurers acceptable to the Bank covering her market value but in
                any event
                in an amount not less than 115% of the Loan
                against:

            

    

     

    
      	 	
              ·

            	
              hull
                and machinery marine and other associated risks in the London/New
                York and
                European Markets;

            

    

     

    
      	 	
              ·

            	
              war
                risks with the Hellenic Mutual War Risks
                Association;

            

    

     

    
      	 	
              ·

            	
              protection
                and indemnity (including the usual oil pollution as provided in
                Clause 5.1(b) of the Deed of Covenant referred to in
                Clause 10.1(a)) risks with a protection and indemnity association
                which is a member of the International Group of P&I
                Clubs;

            

    

     

    
      	 	
              ·

            	
              (when
                applicable) lay-up insurance

            

    

     

    
      	 	
              ·

            	
              and
                otherwise as set forth in more detail in the
                Mortgage.

            

    

     

    
      	
              11.2

            	
              At
                the expense of the Borrower, the Bank will take out during the Security
                Period a mortgagee’s interest insurance on the London Market and on
                conditions 

            

    

    
       

      
        
          
          

        

        15

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              acceptable
                to the Bank in an amount equal to 110% of the amount of the Loan,
                provided
                however,
                that the cost of such insurance shall not exceed the cost which the
                Borrower would have incurred, had the Borrower taken such insurance
                on the
                same conditions of cover through its own London broker, and provided
                further,
                that if the Bank decides to effect such insurance on other conditions
                (German wording) the Bank shall pay the difference (if any) of the
                cost of
                such insurance cover and the London market
                cover.

            

    

     

    
      	
              11.3

            	
              If
                the Vessel navigates in an “additional Premium Area” as declared from time
                to time by the Hellenic Mutual War Risks Association or by insurance
                underwriters, the Borrower will (a) take out appropriate insurance
                cover and (b) notify the Bank. Failure of the Borrower to notify the
                Bank will not constitute an Event of
                Default.

            

    

     

    
      	
              12.

            	
              AVAILABILITY

            

    

     

    
      	
              12.1

            	
              The
                Loan will be made available as soon as the Borrower has complied
                with the
                following conditions:

            

    

     

    
      	 	
              (a)

            	
              the
                Borrower shall have accepted the terms hereof, such acceptance to
                be
                evidenced by the execution of this Agreement by a duly authorised
                officer
                or attorney on the Borrower’s
                behalf;

            

    

     

    
      	 	
              (b)

            	
              the
                Bank shall have obtained sufficient proof that the Borrower is duly
                constituted and is legally existing and in good standing pursuant
                to the
                laws of the place of its
                incorporation;

            

    

     

    
      	 	
              (c)

            	
              the
                Bank shall have received (i) a copy, certified by the Secretary or
                the Assistant Secretary or a Director of the Borrower to be a true
                and
                complete copy, of resolutions of the Board of Directors of the Borrower
                authorising execution of this Agreement and the Security Documents
                to
                which it is or is to be a party as well as all other relevant documents
                and (ii) the original of any Power of Attorney issued by the Borrower
                pursuant to the aforesaid
                resolutions;

            

    

     

    
      	 	
              (d)

            	
              the
                Bank shall have received evidence satisfactory to it that the Vessel
                is
                duly registered and documented in the name of the Borrower under
                Cyprus
                flag free and clear of any encumbrances, liens and debts of any kind
                or
                nature whatsoever with the exception of the Mortgage and the
                Assignment;

            

    

     

    
      	 	
              (e)

            	
              the
                agreed Security Documents and notices referred to hereinabove have
                been
                duly executed by authorised signatories, registered in accordance
                with the
                relevant laws of the place of registration and delivered to the Bank’s
                lawyers;

            

    

     

    
      	 	
              (f)

            	
              the
                Bank shall have received evidence satisfactory to it, that the Insurances
                in respect of the Vessel have been effected in accordance with the
                provisions of this Agreement and the Mortgage and are in effect and
                that
                the interest of the Bank in respect of such Insurances has been duly
                noted;

            

    

    
       

      
        
          
          

        

        16

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              (g)

            	
              the
                Bank shall have obtained copies of all class certificates in respect
                of
                the Vessel;

            

    

     

    
      	 	
              (h)

            	
              the
                Bank or its lawyer shall have received evidence that all relevant
                governmental or quasi governmental approvals, consents or licenses
                as
                referred to herein or otherwise required in respect of the Loan and
                its
                repayment to the Bank have been obtained and are in full force and
                effect;

            

    

     

    
      	 	
              (i)

            	
              the
                Bank shall have received all such further documents including legal
                opinions as the Bank may deem reasonably
                necessary;

            

    

     

    
      	 	
              (j)

            	
              the
                Bank shall have received a copy (duly certified to be a true and
                complete)
                of the management agreement (herein the “Management
                Agreement”)
                in respect of the Vessel entered into between the Borrower and the
                Manager; and

            

    

     

    
      	 	
              (k)

            	
              the
                written confirmation (in terms satisfactory to the Bank) that the
                person
                named in Clause 23.1 has accepted its appointment by the Borrower and
                the Manager as their agent for the acceptance of service of legal
                process
                in respect of any proceedings hereunder and under the Security
                Documents.

            

    

     

    
      	
              13.

            	
              EVENTS
                OF DEFAULT

            

    

     

    
      	
              13.1

            	
              The
                Bank may by notice given to the Borrower declare that all amounts
                outstanding under this Agreement shall become immediately due and
                payable
                and any obligation of the Bank to make further advances shall cease
                automatically without any further act on the part of the Bank, if
                one or
                more of the following events (herein “Event(s)
                of Default”)
                shall occur:

            

    

     

    
      	 	
              (a)

            	
              if
                the Borrower fails to pay when is due any instalment of principal
                or
                interest or other sums payable hereunder;
                or

            

    

     

    
      	 	
              (b)

            	
              if
                the Borrower materially defaults in the performance or observance
                of any
                other obligation, covenant, agreement, term, undertaking, condition
                or
                provision contained in this Agreement and the Security Documents
                and such
                default is not remedied within fourteen (14) days after it was
                brought to the Borrower’s attention;
                or

            

    

     

    
      	 	
              (c)

            	
              if
                any representation or warranty made in this Agreement or in any of
                the
                Security Documents or in any certificate, statement or other document
                delivered in connection with the execution and delivery hereof or
                thereof
                shall prove to have been incorrect in any material respect when made;
                or

            

    

     

    
      	 	
              (d)

            	
              if
                the Borrower becomes insolvent or bankrupt or becomes unable to pay
                its
                debts as they mature or makes any composition with or assignment
                for the
                benefit of its creditors or applies for or consents to or sustains
                the
                appointment of an insolvency trustee or receiver in respect of its
                assets
                or a substantial part thereof or ceases or threatens to cease to
                carry on
                business; or

            

    

    
       

      
        
          
          

        

        17

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              (e)

            	
              if
                the Loan or any part thereof has not been utilised for its intended
                purpose; or

            

    

     

    
      	 	
              (f)

            	
              if
                the Vessel without prior written approval of the Bank is sold or
                otherwise
                disposed with or abandoned (with the exception of a Total Loss),
                during
                the Security Period; or

            

    

     

    
      	 	
              (g)

            	
              if
                any other loan granted to the Borrower is in default;
                or

            

    

     

    
      	 	
              (h)

            	
              if
                the Borrower fails to execute and deliver any amendment to the Mortgage
                or
                any other Security Document to which is or is to be a party or other
                instrument reasonably judged necessary or expedient by the Bank to
                effectuate the intent of this Agreement to the satisfaction of the
                Bank;
                or

            

    

     

    
      	 	
              (i)

            	
              if
                it becomes unlawful for the Borrower to pay its debts under the relevant
                Security Documents; or

            

    

     

    
      	 	
              (j)

            	
              if
                the Mortgage does not receive the agreed priority or if its legal
                validity
                or priority is contested and defeated;
                or

            

    

     

    
      	 	
              (k)

            	
              if
                the Borrower’s assets pass to any person or company by way of universal
                succession without the prior written approval of the Bank;
                or

            

    

     

    
      	 	
              (l)

            	
              if
                the class of the Vessel is suspended;
                or

            

    

     

    
      	 	
              (m)

            	
              if
                the Borrower has not proved to the Bank within two weeks after being
                requested that maritime liens or rights of detention in respect of
                the
                Vessel or that all claims ranking in priority of a mortgage under
                any
                applicable law have been duly discharged and satisfied, unless such
                liens,
                rights of detention or claims are defended against in Court or sufficient
                security has been provided by the Borrower to the relevant third
                parties
                in respect of such liens, detention, rights and/or claims;
                or

            

    

     

    
      	 	
              (n)

            	
              if
                without the prior written consent of the Bank, there is a change
                in the
                beneficial ownership, control of the Borrower and the Vessel or a
                change
                of the Manager,

            

    

     

    provided
      however
      that no
      demand by the Bank shall be required under this Clause 13.1 if an Event of
      Default under sub-Clause (d) of this Clause 13.1 shall have
      occurred.

     

    
      	
              14.

            	
              REPRESENTATIONS
                AND WARRANTIES -
                COVENANTS

            

    

     

    
      	
              14.1

            	
              The
                Borrower hereby represents and warrants
                that:

            

    

     

    
      	 	
              (a)

            	
              the
                execution and delivery by the Borrower and by any other party (other
                than
                the Bank) of this Agreement and the Security Documents to which each
                is or
                is to be a party is within the respective party’s corporate authority, has
                been duly authorised by proper corporate action and does not and
                will not
                contravene any provision of any applicable law or of the respective
                party’s statutes or of any agreement binding upon
                it;

            

    

    
       

      
        
          
          

        

        18

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              (b)

            	
              the
                Borrower has obtained all approvals and consents from all relevant
                governmental and quasi-governmental authorities necessary under any
                applicable law for the execution and delivery by it of this Agreement,
                the
                Security Documents to which is or is to be a party and of any document
                or
                instrument delivered or to be delivered pursuant hereto and thereto
                and
                for the performance by it of any and all of its obligations hereunder
                and
                thereunder;

            

    

     

    
      	 	
              (c)

            	
              to
                the knowledge of the Borrower’s directors, there are no actions, suits or
                proceedings pending or threatened to be taken against, or affecting
                the
                Borrower or its property before any court or tribunal or before any
                governmental or quasi-governmental authority nor is the Borrower
                in
                default with respect to any order, writ, injunction, claim or demand
                of
                any court or any governmental or quasi-governmental authority, which
                may,
                in both the abovementioned cases, substantially affect its solvency
                or its
                ability to pay its debt or perform its obligations or affect a substantial
                part of its property;

            

    

     

    
      	 	
              (d)

            	
              this
                Agreement, the consummation of the transactions herein contemplated
                and
                the fulfilment of the terms hereof and the compliance by the Borrower
                with
                all of the terms and conditions of this Agreement and the Security
                Documents to which is or is to be a party and all documents and
                instruments referred to herein and/or delivered pursuant hereto or
                thereto
                will not result in any breach by it of the terms, conditions or provisions
                of, or constitute a default under its corporate papers, any indenture,
                a
                bank loan or credit agreement or instrument by which the Borrower
                is bound
                and will not result in the creation of any lien, charge or encumbrance
                (other than the Mortgage and the Assignment) upon any of its property
                or
                assets;

            

    

     

    
      	 	
              (e)

            	
              the
                Borrower is duly incorporated and legally existing and in good standing
                under the law of the place of its
                incorporation;

            

    

     

    
      	 	
              (f)

            	
              the
                Borrower will not engage itself in any further business resulting
                in any
                obligation whatsoever other than those incurred in the ordinary course
                of
                its business or in connection with the operation of the
                Vessel;

            

    

     

    
      	 	
              (g)

            	
              any
                proceedings taken in relation to this Agreement and the Security
                Documents, the choice of the laws as outlined in Clause 24 and any
                judgment obtained in relation to this Agreement will be recognised
                and
                enforced;

            

    

     

    
      	 	
              (h)

            	
              to
                the extent that it may in any relevant jurisdiction claim for itself
                or
                its assets immunity from suit, execution, attachment (whether in
                aid of
                execution, before judgment or otherwise) or other legal process and
                to the
                extent that in any such jurisdiction there may be attributed to itself
                or
                its assets such immunity (whether or not claimed) the Borrower hereby
                irrevocably agrees not to claim and hereby irrevocably waives such
                immunity to the full extent permitted by the laws of such
                jurisdiction;

            

    

     

    
      	 	
              (i)

            	
              except
                with the prior consent of the Bank, the Borrower will, neither by
                single
                transaction nor by a series of transactions whether related or not
                

            

    

    
       

      
        
          
          

        

        19

        
  

          

        

        
          
          

        

      

       

    
    
      	 	 	
              and
                whether voluntarily or involuntarily, entered into, sell, transfer,
                lease
                or otherwise dispose of all or of a substantial part of its
                assets;

            

    

     

    
      	 	
              (j)

            	
              except
                with the prior consent of the Bank, the Borrower will not enter into
                any
                amalgamation, merger or consolidation with any other party or do
                or
                consent to be done anything analogous to the
                foregoing;

            

    

     

    
      	 	
              (k)

            	
              the
                Borrower by entering this Agreement and the other Security Documents
                is
                acting on its own behalf and for its own account;
                and

            

    

     

    
      	 	
              (l)

            	
              it
                has complied with all legal, quasi-legal or other requirements (including
                compliance with the provisions of the ISM Code) relative to or imposed
                upon its business and/or the
                Vessel.

            

    

     

    
      	
              14.2

            	
              The
                above representations and warranties shall be deemed repeated as
                of each
                date throughout the Security
                Period.

            

    

     

    
      	
              14.3

            	
              The
                Borrower hereby covenants and undertakes with the Bank to immediately
                notify the Bank if:

            

    

     

    
      	 	
              (a)

            	
              the
                Borrower’s entire business is substantially reduced, the operation of the
                Vessel is suspended or laid-up for more than two months or a change
                in the
                Vessel’s management occurs;

            

    

     

    
      	 	
              (b)

            	
              the
                Vessel is deleted from her present ships’ register or loses the right to
                fly the flag of her home country;

            

    

     

    
      	 	
              (c)

            	
              the
                Vessel is arrested or put to public auction or the Borrower otherwise
                wholly or partly loses its power of disposal of the
                Vessel;

            

    

     

    
      	 	
              (d)

            	
              the
                Vessel becomes involved in maritime or other court proceedings or
                is being
                encumbered with a mortgage by court
                order;

            

    

     

    
      	 	
              (e)

            	
              the
                Vessel sustains an average damage or has been salvaged from distress
                at
                sea or has made use of third party
                assistance;

            

    

     

    
      	 	
              (f)

            	
              maritime
                liens, a right of retention or claims due under ship mortgages are
                put
                forward against the Vessel;

            

    

     

    
      	 	
              (g)

            	
              the
                Vessel has become a Total Loss (as defined in the Mortgage), has
                been
                abandoned or becomes unworthy for repair;
                and

            

    

     

    
      	 	
              (h)

            	
              the
                Vessel has lost her assigned
                classification.

            

    

     

    
      	
              14.4

            	
              The
                Borrower hereby undertakes with the Bank that as and from the date
                of this
                Agreement and throughout the Security Period, without the prior written
                consent of the Bank (not to be unreasonably withheld) the
                Borrower:

            

    

     

    
      	 	
              (a)

            	
              shall
                not incur or agree to incur any indebtedness or material liability
                (whether by way of loan, credit facilities or otherwise) nor shall
                it make
                any commitments other than those occurring in the ordinary course
                of the
                trading or the management of the
                Vessel;

            

    

    
       

      
        
          
          

        

        20

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              (b)

            	
              subject
                to Clause 13.1(m), shall not issue or agree to issue or procure the
                issue of any guarantee in favour of any person or legal entities
                other
                than in connection with the ordinary trading and operation of the
                Vessel;

            

    

     

    
      	 	
              (c)

            	
              shall
                not mortgage, charge or otherwise encumber the Vessel, her Insurances
                or
                her Earnings or any of its other assets or rights other than in favour
                of
                the Bank;

            

    

     

    
      	 	
              (d)

            	
              shall
                not issue any further shares in its
                capital;

            

    

     

    
      	 	
              (e)

            	
              shall
                not make any payment of principal or interest to any of its shareholders
                in respect of any loans or loan capital made available to it by such
                shareholders;

            

    

     

    
      	 	
              (f)

            	
              so
                long as an Event of Default has occurred and is continuing, shall
                not
                declare or pay any dividends upon any of its outstanding shares or
                stock
                or otherwise dispose of any assets to any of its shareholders in
                cash or
                in any other manner;

            

    

     

    
      	 	
              (g)

            	
              shall
                not pay out of its funds to any company or person except in connection
                with the administration of the Borrower, the management and the operation
                and/or repair of the Vessel or the servicing of the Loan or as otherwise
                permitted by or pursuant to this Agreement and the relevant Security
                Document to which it is a party;

            

    

     

    
      	 	
              (h)

            	
              shall
                not permit any change in the ownership of its share capital (or any
                part
                hereof) and/or any change in the ownership or the management of the
                Vessel; and

            

    

     

    
      	 	
              (i)

            	
              shall
                not appoint as manager of the Vessel any person other than the Manager
                and
                then upon such terms and conditions as the Bank shall in its discretion
                approve.

            

    

     

    
      	
              14.5

            	
              The
                Borrower may procure the Pledged Account to be opened by the Pledgor
                and
                the Pledged Deposit be maintained therein throughout the Security
                Period.
                The amount of the Pledged Deposit for the time being standing to
                the
                credit of the Pledged Account shall bear interest at the LIBOR for
                deposits in Dollars for periods equal to the Interest Periods fixed
                for
                the Loan and in an amount comparable with the amount of the Pledged
                Deposit; such interest to be credited to the Pledged Account at the
                expiry
                of each such period.

            

    

     

    
      	
              15.

            	
              JUDGEMENT
                CURRENCY

            

    

     

    
      	
              15.1

            	
              If
                for obtaining judgment in any court it is necessary or advisable
                for the
                Bank to convert any amount owed pursuant hereto into another currency
                then
                such conversion shall be deemed to be made at the rate of exchange
                prevailing the day before the Bank’s action is brought into court with
                prime banks in the country of such
                court.

            

    

     

    
      	
              15.2

            	
              If
                in such case due to alterations of the exchange rate the amount finally
                received by the Bank shall be insufficient to cover the amount owed,
                then
                the Borrower 

            

    

    
       

      
        
          
          

        

        21

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              shall
                pay to the Bank the amount required to compensate for such remaining
                debt.

            

    

     

    
      	
              16.

            	
              WAIVERS

            

    

     

    
      	
              16.1

            	
              No
                failure or delay on the part of the Bank to exercise any power or
                right
                hereunder shall operate as a waiver thereof, nor shall any single
                or
                partial exercise by the Bank of any such power or right preclude
                any other
                or further exercises thereof or the exercise of any other right.
                The
                remedies provided herein are cumulative and not exclusive of any
                remedies
                provided by law.

            

    

     

    
      	
              17.

            	
              INVALIDITY-INCREASED
                COST

            

    

     

    
      	
              17.1

            	
              In
                the event that this Agreement, the Security Documents or any of the
                documents or instruments which may from time to time be delivered
                hereunder or thereunder or any provision thereof shall be deemed
                invalidated by present or future law of any nation or by decision
                of any
                court this shall not effect the validity and/or enforceability of
                all or
                any other part(s) hereof or thereof and in such case the parties
                shall
                execute and deliver such other and further agreements and/or any
                other
                documents and/or instruments and do such things as the Bank in its
                sole
                reasonable discretion may deem to be necessary to carry out the intent
                of
                this Agreement.

            

    

     

    
      	
              17.2

            	
              If
                the result of (a) any change in, or in the interpretation or
                application of, or the introduction of, any law or any regulation,
                directive, request or requirement (whether or not having the force
                of law,
                but, if not having the force of law, with which the Bank or, as the
                case
                may be, its holding company habitually complies) by any governmental
                authority in any country the laws or regulations of which are applicable
                on the Bank or (b) compliance by the Bank with any request from any
                applicable fiscal or monetary authority (whether or not having the
                force
                of law, but, if not having the force of law, with which the Bank
                or, as
                the case may be, its holding company habitually complies), including
                (without limitation) those relating to Taxation, stock or capital
                adequacy, any type of liquidity, reserve assets, cash ratio deposits
                and
                special deposits or other banking or monetary controls or requirements
                which affects the manner in which the Bank allocates capital resources
                to
                its obligations hereunder, is to:

            

    

     

    
      	 	
              (a)

            	
              the
                cost to the Bank of making the Loan or any part thereof or maintaining
                or
                funding the Loan is increased or an additional cost on the Bank is
                imposed; and/or

            

    

     

    
      	 	
              (b)

            	
              subject
                the Bank to taxes or change the basis of taxation (other than taxes
                or
                taxation on the overall net income of the Bank) in respect of any
                payments
                to the Bank under this Agreement or any of the other Security Documents
                is
                changed; and/or

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

            	
              the
                Bank’s rate of return on its overall capital by reason of a change in
                the
                manner in which it is required to allocate capital resources to the
                Bank’s
                obligations under any of the Security Document is reduced;
                and/or

            

    

    
       

      
        
          
          

        

        22

        
  

          

        

        
          
          

        

      

       

    
    
      	 	
              (e)

            	
              require
                the Bank to make a payment or forgo a return on or calculated by
                references to any amount received or receivable by it under any of
                the
                Security Documents is required;
                and/or

            

    

     

    
      	 	
              (f)

            	
              require
                the Bank to incur or sustain a loss (including a loss of future potential
                profits) by reason of being obliged to deduct all or part of the
                Loan from
                its capital for regulatory
                purposes,

            

    

     

    then
      and
      in each case the Borrower shall pay to the Bank, from time to time, upon demand,
      such additional moneys as shall indemnify the Bank for any increased or
      additional cost, reduction, payment, foregone return or loss
      whatsoever.

     

    
      	
              17.3

            	
              The
                Bank will promptly notify the Borrower of any intention to claim
                indemnification pursuant to Clause 17.2 and such notification will be
                a conclusive and full evidence binding on the Borrower as to the
                amount of
                any increased cost or reduction and the method of calculating the
                same. A
                claim under Clause 17.2 may be made at any time and must be
                discharged by the Borrower within seven (7) days of demand. It shall
                not be a defence to a claim by the Bank under this Clause 17.2 that
                any increased cost or reduction could have been avoided by the Bank.
                Any
                amount due from the Borrower under this Clause 17.3 shall be due as a
                separate debt and shall not be affected by judgement being obtained
                for
                any other sums due under or in respect of this
                Agreement.

            

    

     

    
      	
              17.4

            	
              If
                any additional amounts are required to be paid by the Borrower to
                the Bank
                by virtue of Clause 17.2, the Borrower shall be entitled, on giving
                the Bank not less than five (5) days prior notice in writing, to
                prepay the Loan and accrued
                interest

            

    

     

    thereon,
      together with all other Outstanding Indebtedness on the fifth (5th)
      day
      from the date of receipt of such notice by the Bank. Any such notice, once
      given, shall be irrevocable.

     

    
      	
              18.

            	
              SURVIVAL

            

    

     

    
      	
              18.1

            	
              All
                of the covenants, representations and warranties made herein, in
                the
                Security Documents or in any of the documents or instruments executed
                and/or delivered pursuant hereto shall survive the making of the
                Loan and
                shall be binding upon the Borrower until all obligations of the Borrower
                arising pursuant to the terms hereof and thereof have been paid and
                performed in full.

            

    

     

    
      	
              19.

            	
              FURTHER
                ASSURANCE

            

    

     

    
      	
              19.1

            	
              The
                Bank reserves the right to obtain legal opinions from its counsel
                in any
                relevant country (always at the expense of the Borrower) as to the
                validity and enforceability of this Agreement, the Security Documents
                and
                all documents and instruments delivered pursuant thereto and the
                Borrower
                agrees and undertakes to take all such steps and actions including,
                but
                not limited to, any alterations to this Agreement, and any of the
                Security
                Documents or any other documents or instruments relating thereto
                as may be
                deemed necessary by such opinion or
                opinions.

            

    

    
       

      
        
          
          

        

        23

        
  

          

        

        
          
          

        

      

       

    
    
      	
              20.

            	
              NOTICES

            

    

     

    
      	
              20.1

            	
              All
                statements, requests, consents and other notices (hereinafter called
                “Notices”)
                hereunder shall be in writing (letter or fax) in English
                language;

            

    

     

    
      	
              20.2

            	
              Notices
                addressed to either of the parties hereto shall be deemed to be received
                by the relevant party when received, however, in the case of a letter
                seven days after despatch and in the case of a facsimile with a
                confirmation report, on the same day, provided always that in the
                case of
                a facsimile, same was sent on a Banking Day during office
                hours.

            

    

     

    
      	
              20.3

            	
              If
                the date of despatch was not a Banking Day or the time of despatch
                was not
                during office hours such facsimile shall be deemed to have been received
                at the opening of business on the next Banking
                Day.

            

    

     

    
      	
              20.4

            	
              Notices
                to the Borrower shall be addressed
                to:

            

    

     

    SAFETY
      MANAGEMENT OVERSEAS S.A.

    32
      Avenue
      Karamanli,

    PO
      Box
      70837, GR 16605 Voula,

    Athens,
      Greece

    Telefax
      No.: 30210 895 6900

    (Attention:
      Mr. G. Papadopoulos)

     

    
      	
              20.5

            	
              Notices
                to the Bank shall be addressed to:

            

    

     

    DEUTSCHE
      SCHIFFSBANK AG

    Domshof
      17

    28195
      Bremen

    Federal
      Republic of Germany

    Telefax
      No.: 0049 421 323539

     

    
      	
              21.

            	
              ASSIGNMENT

            

    

     

    
      	
              21.1

            	
              The
                Borrower may not assign all or any part of its rights or obligations
                hereunder without the prior written consent of the Bank. The Bank
                is
                entitled to assign all or any part of its rights hereunder, provided
                that
                the Bank shall have received the prior written consent of the Borrower
                for
                any such assignment, provided
                always,
                that (i) the Borrower shall not be responsible for any costs or
                expenses arising in connection with the Bank effecting any such assignment
                and (ii) any assignee of the Bank shall only be entitled to the
                benefit of the provisions of Clauses 9.2 or 9.4 to the same extent
                that the Bank would have been had no such assignment been
                made.

            

    

     

    
      	
              22.

            	
              MISCELLANEOUS

            

    

     

    
      	
              22.1

            	
              The
                Borrower during the lifetime of the Loan shall submit to the Bank
                at its
                own expense without being requested an income and expenditure statement
                in
                respect of the operation of the Vessel immediately after its completion
                and, if such statement has not been completed within six (6) months
                after the end of the relevant financial year to submit a provisional
                income and expenditure statement.

            

    

    
       

      
        
          
          

        

        24

        
  

          

        

        
          
          

        

      

       

    
    
      	
              22.2

            	
              The
                Borrower have to procure translation made by a sworn or certified
                translator of all documents which are not available in English or
                German
                language.

            

    

     

    
      	
              22.3

            	
              The
                terms and conditions of the Security Documents shall apply and are
                deemed
                to be an integral part of this Agreement, however, in case of conflict
                this Agreement shall prevail.

            

    

     

    
      	
              22.4

            	
              The
                Bank shall maintain in accordance with its usual practice a loan
                account
                evidencing the amounts from time to time borrowed by the Borrower,
                owing
                to the Bank (in the relevant Loan Currency), and paid to the Bank
                (whether
                in respect of principal, interest or otherwise) hereunder and under
                the
                Security Documents.

            

    

     

    
      	
              23.

            	
              APPLICABLE
                LAW

            

    

     

    
      	
              23.1

            	
              The
                terms and conditions set out in this Agreement shall, unless otherwise
                specifically provided, be governed by and construed in accordance
                with the
                laws of the Federal Republic of Germany and the Borrower hereby submits
                to
                the jurisdiction of the Courts of the City of Hamburg. However, the
                Bank
                reserves the right to choose as place of jurisdiction any place where
                the
                Borrower has any asset or any place of business of the Borrower.
                The
                Borrower agrees that any writ, notice of judgment or other legal
                process
                or document in connection with such proceedings may be served on
                the
                Borrower by delivering the same to any person at the Borrower’s registered
                office or principal place of business or (without prejudice to any
                other
                method of service under applicable law) to Messrs. Safety Management
                Overseas S.A., (Attention: Mr. G. Papadopoulos) presently located at
                Alassia Building, Defteras Merarchias 13, 18535 Piraeus, Greece,
                who are
                hereby appointed as the agent of the Borrower for service of legal
                process
                in respect of any such proceedings and such service shall be deemed
                good
                service on the Borrower.

            

    

     

    
      	
              24.

            	
              CHANGE
                OF LAW

            

    

     

    
      	
              24.1

            	
              If
                the introduction of or any change in any applicable law, treaty or
                regulation or in the interpretation thereof by any authority charged
                with
                the administration thereof shall make it unlawful for the Bank to
                maintain, fund or perform its obligations under this Agreement then
                the
                Bank shall forthwith give notice thereof to the Borrower whereupon
                the
                Bank will be discharged from its obligations under this Agreement
                and the
                Borrower shall, on demand by the Bank, prepay the Loan, if permitted
                by
                applicable law, (i) at the end of the then current Interest Period or
                (ii) on the next day on which a payment under this Agreement is due,
                whatever is the earlier, together with accrued interest thereon and
                any
                other unpaid amounts due to the Bank
                hereunder.

            

    

    
       

      
        
          
          

        

        25

        
  

          

        

        
          
          

        

      

       

    
    
      	
              25.

            	
              EXECUTION

            

    

     

    IN
      WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
      executed by their duly authorised officers or attorneys as of the day and year
      first above written.

     

    
      	
              STALOUDI
                SHIPPING

              CORPORATION

            	 	
              DEUTSCHE
                SCHIFFSBANK

              AKTIENGESELLSCHAFT

            
	 	 	 
	 	 	 
	By:
              	
              /s/
                George Papadopoulos 

            	 	By:
              	
              /s/
                Aristeidis D. Vourdas 

            
	
              George
                Papadopoulos

              Attorney-in-Fact

            	 	
              Aristeidis D.
                Vourdas

              Attorney-in-Fact

            

    

    
       

      
        
          
          

        

        26

        
  

          

        

        
          
          

        

      

      
SCHEDULE
        1

    
     

    NOTICE
      OF DRAWING

     

    
      	
              To:

            	
              DEUTSCHE
                SCHIFFSBANK AKTIENGESELLSCHAFT

            

    

    Domshof
      17,

    28195
      Bremen,

    Federal
      Republic of Germany

    (the
      “Bank”)

     

    29th
      May,
      2006

    

    RE:
      Loan Agreement dated 29th
      May, 2006 made between (1) STALOUDI SHIPPING CORPORATION, of Liberia (the
“Borrower”) and (b) the Bank in respect of a loan facility of up to
      US$30,000,000 (the “Loan Agreement”).

    
      
        

      

    

    

    We
      refer
      to the Loan Agreement and hereby give you notice that we wish to draw the Loan
      in the amount of (US$30,000,000) (Unites States Dollars thirty million) on
      _______ May, 2006 and we select a first Interest Period in respect of the Loan
      of ________ months. The funds should be remitted to _______ [name
      and number of account] with
      _______, New York, USA.

     

    We
      confirm that:

     

    
      	
              (a)

            	
              no
                event or circumstance has occurred and is continuing which constitutes
                an
                Event of Default;

            

    

     

    
      	
              (b)

            	
              the
                representations and warranties contained in Clause 14 of the Loan
                Agreement and the representations and warranties contained in each
                of the
                other Security Documents are true and correct at the date hereof
                as if
                made with respect to the facts and circumstances existing at such
                date;

            

    

     

    
      	
              (c)

            	
              the
                borrowing to be effected by the drawing of the Loan will be within
                our
                corporate powers, has been validly authorised by appropriate corporate
                action and will not cause any limit on our borrowings (whether imposed
                by
                statute, regulation, agreement or otherwise) to be exceeded;
                and

            

    

     

    
      	
              (d)

            	
              to
                the best of our knowledge and belief there has been no material adverse
                change in our financial position or in the consolidated financial
                position
                of ourselves and the other Security Parties from that described by
                us to
                the Bank in the negotiation of the Loan
                Agreement.

            

    

    
      
         

        
          
            
            

          

          27

          
    

            

          

          
            
            

          

        

      

    

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

     

    
      	
              SIGNED
                by

              Mr.
                George Papadopoulos

              for
                and on behalf of

              the
                Borrower

              Staloudi
                Shipping Corporation

              of
                Liberia, in the presence of:

            	
              )

              )

              )

              )

              )

              )

            	
               

               

               

              _____________________________

              Attorney-in-Fact

            

    

    
      
         

        
          
            
            

          

            28

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