Document:

d1007470_ex4-82.htm

    Exhibit
4.82

     

     

    Date   6th October
2008

    
 

    

    

    BANKSY
SHIPPING COMPANY LIMITED

    HONGBO
SHIPPING COMPANY LIMITED

    as joint
and several Borrowers

    

    

    - and
-

    

    

    THE
BANKS AND FINANCIAL INSTITUTIONS

    listed
in Schedule 1

    as
Lenders

    

    

    - and
–

    

    

    THE
BANKS AND FINANCIAL INSTITUTIONS

    listed
in Schedule 2

    as Swap
Banks

    

    

    - and
-

    

    

    DVB
BANK AMERICA N.V.

    as
Agent

    and as
Security Trustee

     

    

                                                       

    

    LOAN
AGREEMENT

                                                       

    

 

    relating
to

    a
facility of up to US$80,000,000

    to part
finance the construction of

    hull
numbers S-1027 and S-1033

    at SPP
Plant & Shipbuilding Co., Ltd.

     

     

    
      WATSON,
FARLEY & WILLIAMS

      London

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INDEX

    
      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Clause

                                  	 
      	
                                    Page

                                  
	 
      	 
      	 
      
	
                                    1

                                  	
                                    INTERPRETATION

                                  	
                                    1

                                  
	 
      	 
      	 
      
	
                                    2

                                  	
                                    FACILITY

                                  	
                                    15

                                  
	 
      	 
      	 
      
	
                                    3

                                  	
                                    POSITION
      OF THE LENDERS AND SWAP BANKS

                                  	
                                    15

                                  
	 
      	 
      	 
      
	
                                    4

                                  	
                                    DRAWDOWN

                                  	
                                    16

                                  
	 
      	 
      	 
      
	
                                    5

                                  	
                                    INTEREST

                                  	
                                    18

                                  
	 
      	 
      	 
      
	
                                    6

                                  	
                                    INTEREST
      PERIODS

                                  	
                                    20

                                  
	 
      	 
      	 
      
	
                                    7

                                  	
                                    DEFAULT
      INTEREST

                                  	
                                    20

                                  
	 
      	 
      	 
      
	
                                    8

                                  	
                                    REPAYMENT
      AND PREPAYMENT

                                  	
                                    21

                                  
	 
      	 
      	 
      
	
                                    9

                                  	
                                    CONDITIONS
      PRECEDENT

                                  	
                                    23

                                  
	 
      	 
      	 
      
	
                                    10

                                  	
                                    REPRESENTATIONS
      AND WARRANTIES

                                  	
                                    25

                                  
	 
      	 
      	 
      
	
                                    11

                                  	
                                    GENERAL
      UNDERTAKINGS

                                  	
                                    28

                                  
	 
      	 
      	 
      
	
                                    12

                                  	
                                    CORPORATE
      UNDERTAKINGS

                                  	
                                    34

                                  
	 
      	 
      	 
      
	
                                    13

                                  	
                                    INSURANCE

                                  	
                                    35

                                  
	 
      	 
      	 
      
	
                                    14

                                  	
                                    SHIP
      COVENANTS

                                  	
                                    39

                                  
	 
      	 
      	 
      
	
                                    15

                                  	
                                    SECURITY
      COVER

                                  	
                                    42

                                  
	 
      	 
      	 
      
	
                                    16

                                  	
                                    PAYMENTS
      AND CALCULATIONS

                                  	
                                    44

                                  
	 
      	 
      	 
      
	
                                    17

                                  	
                                    APPLICATION
      OF RECEIPTS

                                  	
                                    46

                                  
	 
      	 
      	 
      
	
                                    18

                                  	
                                    APPLICATION
      OF EARNINGS

                                  	
                                    47

                                  
	 
      	 
      	 
      
	
                                    19

                                  	
                                    EVENTS
      OF DEFAULT

                                  	
                                    47

                                  
	 
      	 
      	 
      
	
                                    20

                                  	
                                    FEES
      AND EXPENSES

                                  	
                                    52

                                  
	 
      	 
      	 
      
	
                                    21

                                  	
                                    INDEMNITIES

                                  	
                                    54

                                  
	 
      	 
      	 
      
	
                                    22

                                  	
                                    NO
      SET-OFF OR TAX DEDUCTION

                                  	
                                    55

                                  
	 
      	 
      	 
      
	
                                    23

                                  	
                                    ILLEGALITY,
      ETC

                                  	
                                    56

                                  
	 
      	 
      	 
      
	
                                    24

                                  	
                                    INCREASED
      COSTS

                                  	
                                    57

                                  
	 
      	 
      	 
      
	
                                    25

                                  	
                                    SET
      OFF

                                  	
                                    58

                                  
	 
      	 
      	 
      
	
                                    26

                                  	
                                    TRANSFERS
      AND CHANGES IN LENDING OFFICES

                                  	
                                    59

                                  
	 
      	 
      	 
      
	
                                    27

                                  	
                                    VARIATIONS
      AND WAIVERS

                                  	
                                    62

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                28

              	
                NOTICES

              	
                63

              
	 
      	 
      	 
      
	
                29

              	
                JOINT
      AND SEVERAL LIABILITY

              	
                65

              
	 
      	 
      	 
      
	
                30

              	
                SUPPLEMENTAL

              	
                66

              
	 
      	 
      	 
      
	
                31

              	
                LAW
      AND JURISDICTION

              	
                66

              

         

      

      
        
          
            	
                    SCHEDULE
      1     LENDERS AND COMMITMENTS

                  	
                    68

                  
	 
      	 
      
	
                    SCHEDULE
      2     SWAP BANKS

                  	
                    69

                  
	 
      	 
      
	
                    SCHEDULE
      3     DRAWDOWN NOTICE

                  	
                    70

                  
	 
      	 
      
	
                    SCHEDULE
      4     CONDITION PRECEDENT DOCUMENTS

                  	
                    71

                  
	 
      	 
      
	
                    SCHEDULE
      5     TRANSFER CERTIFICATE

                  	
                    75

                  
	 
      	 
      
	
                    SCHEDULE
      6     DESIGNATION NOTICE

                  	
                    79

                  
	 
      	 
      
	
                    SCHEDULE
      7     DVB LOAN ADMINISTRATION FORM

                  	
                    80

                  
	 
      	 
      
	
                    EXECUTION
      PAGES

                  	
                    82

                  

          

        

      

       

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THIS AGREEMENT is made
on       October 2008

    

    BETWEEN

    

    
      	
              (1)

            	
              BANKSY SHIPPING COMPANY
      LIMITED
      and HONGBO
      SHIPPING COMPANY LIMITED, as joint and
      several Borrowers;

            

    

     

    
      	
              (2)

            	
              THE BANKS AND FINANCIAL
      INSTITUTIONS listed in Schedule 1, as Lenders;

            

    

     

    
      	
              (3)

            	
              THE BANKS AND FINANCIAL
      INSTITUTIONS listed in Schedule 2, as Swap
    Banks;

            

    

     

    
      	
              (4)

            	
              DVB BANK AMERICA N.V.,
      as Agent;
      and

            

    

     

    
      	
              (5)

            	
              DVB BANK AMERICA N.V.,
      as Security Trustee.

            

    

     

    BACKGROUND

    

    
      	
              (A)

            	
              The
      Lenders have agreed to make available to the Borrowers a facility of up to
      $80,000,000 for the purpose of part financing the purchase price of the
      Ships which are to be constructed by the Builder for, and purchased by,
      the Borrowers.

            

    

     

    
      	
              (B)

            	
              The
      Swap Banks may enter into interest rate swap transactions with the
      Borrowers from time to time to hedge the Borrowers' exposure under this
      Agreement to interest rate
fluctuations.

            

    

     

    
      	
              (C)

            	
              The
      Lenders and the Swap Banks have agreed to share pari passu in the
      security to be granted to the Security Trustee pursuant to this
      Agreement.

            

    

     

    IT IS AGREED as
follows:

    

    
      	
              1

            	
              INTERPRETATION

            

    

     

    
      	
              1.1

            	
              Definitions.  Subject
      to Clause 1.5, in this Agreement:

            

    

     

    
      	
               
      

            	
              "Account Security Deed"
      means, in relation to an Earnings Account, a deed creating security in
      respect of that Earnings Accounts in the Agreed
  Form;

            

    

    

    
      	
               
      

            	
              "Advance" means the
      principal amount of each borrowing by the Borrowers under this
      Agreement;

            

    

    

    
      	
               
      

            	
              "Affected Lender" has the
      meaning given in Clause 5.7;

            

    

    

    
      	
               
      

            	
              "Agency and Trust
      Agreement" means the agency and trust agreement dated the same date
      as this Agreement and made between the same
  parties;

            

    

    

    
      	
               
      

            	
              "Agent" means DVB Bank
      America N.V., acting in such capacity through its office at Zeelandia
      Office Park, Kaya W.F.G. Mensing 14, Curaçao, Netherlands Antilles, or any
      successor of it appointed under clause 5 of the Agency and Trust
      Agreement;

            

    

    

    
      	
               
      

            	
              "Agreed Form" means in
      relation to any document, that document in the form approved in writing by
      the Agent or as otherwise approved in accordance with any other approval
      procedure specified in any relevant provisions of any Finance
      Document;

            

    

    

    
      	
               
      

            	
              "Approved Manager" means,
      in relation to a Ship, any company which the Agent may, with the
      authorisation of the Majority Lenders, approve from time to time as the
      technical  or commercial manager of the
  Ship;

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    "Availability Period" means the
period commencing on the date of this Agreement and ending on:

    

    
      	
               
      

            	
              (a)

            	
              30
      September 2009 (or such later date as the Agent may, with the
      authorisation of the Lenders, agree with the Borrowers);
  or

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      earlier, the date on which the Total Commitments are fully borrowed,
      cancelled or terminated;

            

    

     

    
      	
               
      

            	
              "Borrowers" means each of
      Banksy Shipping Company Limited ("Banksy") and Hongbo
      Shipping Company Limited ("Hongbo"), each being a
      company incorporated in the Republic of Liberia whose registered office is
      at 80 Broad Street, Monrovia, Liberia (and includes their respective
      successors);

            

    

    

    
      	
               
      

            	
              "Builder"  means
      SPP Plant & Shipbuilding Co., Ltd. of the Republic of
      Korea;

            

    

    

    
      	
               
      

            	
              "Business Day" means a
      day on which banks are open in Curaçao, Frankfurt, London and Piraeus and,
      in respect of a day on which a payment is required to be made under a
      Finance Document, also in New York
City;

            

    

    

    
      	
               
      

            	
              "Charter Assignment"
      means, in relation to a Ship, an assignment of the Charter and the Charter
      Guarantee in the Agreed Form;

            

    

    

    
      	
               
      

            	
              "Charters"  means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              in
      relation to Ship A, the "hell and high water" bareboat charter dated 27
      May 2008 and made between the Guarantor (or its nominee) and Magellano
      Marine C.V. for a period of 7 years on a rate of US$14,300 (net) per day
      (with the Borrower having options to extend the period for an additional
      year on a rate of US$14,800 (net) per day, thereafter for an additional
      year on a rate of US$15,300 (net) per day and thereafter for an additional
      year on a rate of US$15,800 (net) per day);
and

            

    

    

    
      	
               
      

            	
              (b)

            	
              in
      relation to Ship B, the "hell and high water" bareboat charter dated 8
      April 2008 and made between the Guarantor (or its guaranteed nominee) and
      Daelim H&L Co., Ltd. for a period of 10 years on a rate of US$14,550
      (net) per day,

            

    

    

    
      	
               
      

            	
              each
      in a form approved by the Lenders and as supplemented and/or amended from
      time to time and, in the singular, means either of
  them;

            

    

    

    
      	
               
      

            	
              "Charter
      Guarantees"  means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              in
      relation to the Charter of Ship A, the guarantee dated 27 May 2008 and
      issued by Marco Polo Seatrade B.V. in favour of the Guarantor;
      and

            

    

    

    
      	
               
      

            	
              (b)

            	
              in
      relation to the Charter of Ship B, the guarantee dated 21 April 2008 and
      issued by Daelim Corporation in favour of the Guarantor (or its guaranteed
      nominee),

            

    

    

    
      	
               
      

            	
              each
      in a form approved by the Lenders and as supplemented and/or amended from
      time to time and, in the singular, means either of
  them;

            

    

    

    
      	
               
      

            	
              "Charter
      Guarantor"  means, in relation to a Charter Guarantee,
      the party which has issued by that Charter Guarantor in favour of the
      relevant Borrower;

            

    

    

    
      	
               
      

            	
              "Charterer"  means,
      in relation to a Charter, the party which has entered into that Charter
      with the relevant Borrower;

            

    

    

    
      	
               
      

            	
              "Commitment" means, in
      relation to a Lender, the amount set opposite its name in Schedule 1, or,
      as the case may require, the amount specified in the relevant
      Transfer

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Certificate,
as that amount may be reduced, cancelled or terminated in accordance with this
Agreement (and "Total
Commitments" means the aggregate of the Commitments of all the
Lenders);

    

    
      	
               
      

            	
              "Confirmation" and "Early Termination Date",
      in relation to any continuing Designated Transaction, have the meanings
      given in the relevant Master
Agreement;

            

    

    

    
      	
               
      

            	
              "Contractual Currency"
      has the meaning given in Clause
21.4;

            

    

    

    
      	
               
      

            	
              "Contribution" means, in
      relation to a Lender, the part of the Loan which is owing to that
      Lender;

            

    

    

    
      	
               
      

            	
              "Creditor Party" means
      the Agent, the Security Trustee, any Lender or any Swap Bank, whether as
      at the date of this Agreement or at any later
  time;

            

    

    

    "Delivery
Date"  means, in relation to a Ship, the date on which that
Ship is actually delivered to (and accepted by) the relevant Borrower under the
Shipbuilding Contract for that Ship;

     

    "Designated Transaction" means
a Transaction which fulfils the following requirements:

     

    
      	
               
      

            	
              (a)

            	
              it
      is entered into by the Borrowers pursuant to a Master Agreement with a
      Swap Bank which, at the time the Transaction is entered into, is also a
      Lender;

            

    

     

    
      	
               
      

            	
              (b)

            	
              its
      purpose is the hedging of the Borrowers' exposure under this Agreement to
      fluctuations in LIBOR arising from the funding of the Loan (or any part
      thereof) for a period expiring no later than the final Repayment Date;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              it
      is designated by the Borrowers, by delivery by the Borrowers to the Agent
      of a notice of designation in the form set out in Schedule 6, as a
      Designated Transaction for the purposes of the Finance
      Documents;

            

    

     

    
      	
               
      

            	
              "Dollars" and "$" means the lawful
      currency for the time being of the United States of
    America;

            

    

    

    
      	
               
      

            	
              "Drawdown Date" means, in
      relation to an Advance, the date requested by the Borrowers for the
      Advance to be made, or (as the context requires) the date on which the
      Advance is actually made;

            

    

    

    
      	
               
      

            	
              "Drawdown Notice" means a
      notice in the form set out in Schedule 3 (or in any other form which the
      Agent approves or reasonably
requires);

            

    

    

    "DVB LAM Form" means a form in
the form set out in Schedule 7;

     

    "Earnings"  means, in
relation to a Ship, all moneys whatsoever which are now, or later become,
payable (actually or contingently) to the Borrower owning that Ship or the
Security Trustee and which arise out of the use or operation of that Ship,
including (but not limited to):

     

    
      	
               
      

            	
              (a)

            	
              except
      to the extent that they fall within paragraph
  (b);

            

    

     

    
      	
               
      

            	
              (i)

            	
              all
      freight, hire and passage moneys;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              compensation
      payable to any Borrower or the Security Trustee in the event of
      requisition of a Ship for hire;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              remuneration
      for salvage and towage services;

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iv)

            	
              demurrage
      and detention moneys;

            

    

     

    
      	
               
      

            	
              (v)

            	
              damages
      for breach (or payments for variation or termination) of any charterparty
      or other contract for the employment of a Ship;
  and

            

    

     

    
      	
               
      

            	
              (vi)

            	
              all
      moneys which are at any time payable under any Insurances in respect of
      loss of hire; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      and whenever a Ship is employed on terms whereby any moneys falling within
      paragraphs (a)(i) to (vi) are pooled or shared with any other person, that
      proportion of the net receipts of the relevant pooling or sharing
      arrangement which is attributable to the
Ship;

            

    

     

    
      	
               
      

            	
              "Earnings Account" means,
      in relation to a Ship, an account in the name of the Borrower owning the
      Ship with a bank or financial institution approved by the Agent which is
      designated by the Agent as the Earnings Account in relation to that Ship
      for the purposes of this Agreement;

            

    

    

    
      	
               
      

            	
              "Environmental Claim"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              any
      claim by any governmental, judicial or regulatory authority which arises
      out of an Environmental Incident or an alleged Environmental Incident or
      which relates to any Environmental Law;
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      claim by any other person which relates to an Environmental Incident or to
      an alleged Environmental Incident,

            

    

     

    
      	
               
      

            	
              and
      "claim" means a
      claim for damages, compensation, fines, penalties or any other payment of
      any kind whether or not similar to the foregoing; an order or direction to
      take, or not to take, certain action or to desist from or suspend certain
      action; and any form of enforcement or regulatory action, including the
      arrest or attachment of any asset;

            

    

    

    
      	
               
      

            	
              "Environmental Incident"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              any
      release of Environmentally Sensitive Material from a Ship;
    or

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      incident in which Environmentally Sensitive Material is released from a
      vessel other than a Ship and which involves a collision between a Ship and
      such other vessel or some other incident of navigation or operation, in
      either case, in connection with which a Ship is actually or potentially
      liable to be arrested, attached, detained or injuncted and/or a Ship
      and/or any Borrower and/or any operator or manager of a Ship is at fault
      or allegedly at fault or otherwise liable to any legal or administrative
      action; or

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      other incident in which Environmentally Sensitive Material is released
      otherwise than from a Ship and in connection with which a Ship is actually
      or potentially liable to be arrested and/or where any Borrower and/or any
      operator or manager of a Ship is at fault or allegedly at fault or
      otherwise liable to any legal or administrative
  action;

            

    

     

    
      	
               
      

            	
              "Environmental Law" means
      any law relating to pollution or protection of the environment, to the
      carriage of Environmentally Sensitive Material or to actual or threatened
      releases of Environmentally Sensitive
Material;

            

    

    

    
      	
               
      

            	
              "Environmentally Sensitive
      Material" means oil, oil products and any other substance
      (including any chemical, gas or other hazardous or noxious substance)
      which is (or is capable of being or becoming) polluting, toxic or
      hazardous;

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    "Event of Default" means any of
the events or circumstances described in Clause 19.1;

    

    
      	
               
      

            	
              "Fee
      Letter"  means a fee letter signed or to be signed on or
      around the date of this Agreement between DVB Bank America N.V., the
      Borrowers and the Guarantor in the Agreed
Form;

            

    

    

    
      	
               
      

            	
              "Finance Documents"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              this
      Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Fee Letter;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Agency and Trust Agreement;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Guarantee;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      Master Agreement Assignments;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Account Security Deeds;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      Shares Pledges;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Predelivery Security Assignments;

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Mortgages;

            

    

     

    
      	
               
      

            	
              (j)

            	
              the
      General Assignments;

            

    

     

    
      	
               
      

            	
              (k)

            	
              the
      Charter Assignments;

            

    

     

    
      	
               
      

            	
              (l)

            	
              the
      Quadripartite Agreements; and

            

    

     

    
      	
               
      

            	
              (m)

            	
              any
      other document (whether creating a Security Interest or not) which is
      executed at any time by any Borrower or any other person as security for,
      or to establish any form of subordination or priorities arrangement in
      relation to, any amount payable to the Lenders and/or the Swap Banks under
      this Agreement or any of the other documents referred to in this
      definition;

            

    

     

    
      	
               
      

            	
              "Financial Indebtedness"
      means, in relation to a person (the "debtor"), a liability of
      the debtor:

            

    

    

    
      	
               
      

            	
              (a)

            	
              for
      principal, interest or any other sum payable in respect of any moneys
      borrowed or raised by the debtor;

            

    

     

    
      	
               
      

            	
              (b)

            	
              under
      any loan stock, bond, note or other security issued by the
      debtor;

            

    

     

    
      	
               
      

            	
              (c)

            	
              under
      any acceptance credit, guarantee or letter of credit facility or
      dematerialised equivalent made available to the
  debtor;

            

    

     

    
      	
               
      

            	
              (d)

            	
              under
      a financial lease (including, without limitation, off-balance sheet
      liabilities such as remaining obligations under any leasing/chartering
      arrangement (whether or not a financial lease)), a deferred purchase
      consideration arrangement or any other agreement having the commercial
      effect of a borrowing or raising of money by the
  debtor;

            

    

     

    
      	
               
      

            	
              (e)

            	
              under
      any foreign exchange transaction, any interest or currency swap or any
      other kind of derivative transaction entered into by the debtor;
      or

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (f)

            	
              under
      a guarantee, indemnity or similar obligation entered into by the debtor in
      respect of a liability of another person which would fall within
      paragraphs (a) to (e) if the references to the debtor referred to the
      other person;

            

    

     

    
      	
               
      

            	
              "GAAP" means generally
      accepted accounting principles in the United States of
      America;

            

    

    

    
      	
               
      

            	
              "General Assignment"
      means, in relation to a Ship, a general assignment of the Earnings, the
      Insurances and any Requisition Compensation in the Agreed
      Form;

            

    

    

    
      	
               
      

            	
              "Guarantee" means a
      guarantee issued by the Guarantor in favour of the Security Trustee in the
      Agreed Form;

            

    

    

    
      	
               
      

            	
              "Guarantor" means Top
      Ships Inc. (formerly known as Top Tankers Inc.), a corporation
      incorporated in the Republic of the Marshall Islands whose registered
      office is at Trust Company Complex, Ajeltake Island, P.O. Box 1405,
      Majuro, Marshall Islands MH96960;

            

    

    

    
      	
               
      

            	
              "IAPPC"  means
      an International Air Pollution Prevention Certificate for the purposes of
      MARPOL Annex VI, "Regulations for the Prevention of Air Pollution from
      Ships";

            

    

    

    
      	
               
      

            	
              "Insurances" means, in
      relation to a Ship:

            

    

    

    
      	
               
      

            	
              (a)

            	
              all
      policies and contracts of insurance, including entries of the Ship in any
      protection and indemnity or war risks association, which are effected in
      respect of the Ship, its Earnings or otherwise in relation to it;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      rights and other assets relating to, or derived from, any of the
      foregoing, including any rights to a return of a
  premium;

            

    

     

    
      	
               
      

            	
              "Interest Period" means a
      period determined in accordance with Clause
6;

            

    

    

    
      	
               
      

            	
              "ISM Code" means the
      International Safety Management Code (including the guidelines on its
      implementation), adopted by the International Maritime Organisation as the
      same may be amended or supplemented from time to time (and the terms
      "safety management
      system", "Safety
      Management Certificate" and "Document of Compliance"
      have the same meanings as are given to them in the ISM
    Code);

            

    

    

    "ISPS Code"  means
the International Ship and Port Facility Security Code as adopted by the
International Maritime Organisation, as the same may be amended or supplemented
from time to time;

    

    "ISSC"  means a
valid and current International Ship Security Certificate issued under the ISPS
Code;

    

    
      	
               
      

            	
              "Lender" means a bank or
      financial institution listed in Schedule 1 and acting through its branch
      indicated in Schedule 1 (or through another branch notified to the Agent
      under Clause 26.14) or its transferee, successor or
  assign;

            

    

    

    "LIBOR" means, in relation to
any period for which an interest rate is to be determined under any provision of
a Finance Document:

     

    
      	
               
      

            	
              (a)

            	
              the
      rate per annum equal to the offered quotation for deposits in Dollars for
      a period equal to, or as near as possible equal to, that period which
      appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m. (London time)
      on the Quotation Date for that period (and, for the purposes of this
      Agreement, "REUTERS BBA
      Page LIBOR 01" means the display designated as "Page 01" on the
      REUTERS Service or such other page as may replace Page 01 on
      that

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    service
for the purpose of displaying rates comparable to that rate or on such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for Dollars) Provided that should there be
a discrepancy between such offered quotation for deposits in Dollars appearing
on Reuters BBA Page LIBOR 01 and the actual rate at which deposits in Dollars
are offered to each Reference Bank by leading banks in the London Interbank
Market at that Reference Bank's request at or about 11.00 a.m. (London time) on
the Quotation Date for that period for a period equal to that period and for
delivery on the first Business Day of it, the highest of the actual rates
available to the Reference Banks shall be "LIBOR" for the purposes of this
paragraph (a); or

     

    
      	
               
      

            	
              (b)

            	
              if
      no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
      determined by the Agent to be the arithmetic mean (rounded upwards, if
      necessary, to the nearest one-sixteenth of one per cent.) of the rates per
      annum notified to the Agent by each Reference Bank as the rate at which
      deposits in Dollars are offered to that Reference Bank by leading banks in
      the London Interbank Market at that Reference Bank's request at or about
      11.00 a.m. (London time) on the Quotation Date for that period for a
      period equal to that period and for delivery on the first Business Day of
      it;

            

    

     

    
      	
               
      

            	
              "Loan" means the
      principal amount for the time being outstanding under this
      Agreement;

            

    

    

    
      	
               
      

            	
              "Major Casualty" means,
      in relation to a Ship, any casualty to the Ship in respect of which the
      claim or the aggregate of the claims against all insurers, before
      adjustment for any relevant franchise or deductible, exceeds $500,000 or
      the equivalent in any other
currency;

            

    

    

    
      	
               
      

            	
              "Majority Lenders"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              before
      an Advance has been made, Lenders whose Commitments total more than 67 per
      cent. of the Total Commitments; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              after
      an Advance has been made, Lenders whose Contributions total more than 67
      per cent. of the Loan;

            

    

     

    
      	
               
      

            	
              "Margin" means 1.55 per
      cent. per annum;

            

    

    

    "Master
Agreement"  means each master agreement (on the 2002 ISDA
(Multicurrency - Crossborder) form) in the Agreed Form made between the
Borrowers and a Swap Bank and includes all Designated Transactions from time to
time entered into and Confirmations from time to time exchanged under the master
agreement;

     

    "Master Agreement
Assignment"  means, in relation to each Master Agreement and
each Borrower, the assignment of the Master Agreement by that Borrower in the
Agreed Form;

     

    
      	
               
      

            	
              "Mortgages"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              in
      relation to Ship A, the first priority Maltese ship mortgage on that Ship
      and deed of covenant collateral thereto;
and

            

    

    

    
      	
               
      

            	
              (b)

            	
              in
      relation to Ship B, the first preferred Liberian ship mortgage on that
      Ship,

            

    

    

    
      	
               
      

            	
              each
      in the Agreed Form and, in the singular, means either of
    them;

            

    

    

    
      	
               
      

            	
              "Negotiation Period" has
      the meaning given in Clause
5.10;

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    "Notifying Lender" has the
meaning given in Clause 23.1 or Clause 24.1 as the context
requires;

    

    
      	
               
      

            	
              "Payment Currency" has
      the meaning given in Clause 21.4;

            

    

    

    
      	
               
      

            	
              "Permitted Security
      Interests" means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Security
      Interests created by the Finance
Documents;

            

    

     

    
      	
               
      

            	
              (b)

            	
              liens
      for unpaid master's and crew's wages in accordance with usual maritime
      practice;

            

    

     

    
      	
               
      

            	
              (c)

            	
              liens
      for salvage;

            

    

     

    
      	
               
      

            	
              (d)

            	
              liens
      arising by operation of law for not more than 2 months' prepaid hire
      under any charter in relation to a Ship not prohibited by this
      Agreement;

            

    

     

    
      	
               
      

            	
              (e)

            	
              liens
      for master's disbursements incurred in the ordinary course of trading and
      any other lien arising by operation of law or otherwise in the ordinary
      course of the operation, repair or maintenance of a Ship, provided such
      liens do not secure amounts more than 30 days overdue (unless the
      overdue amount is being contested by the relevant Borrower in good faith
      by appropriate steps) and subject, in the case of liens for repair or
      maintenance, to
Clause 14.12(g);

            

    

     

    
      	
               
      

            	
              (f)

            	
              any
      Security Interest created in favour of a plaintiff or defendant in any
      proceedings or arbitration as security for costs and expenses while a
      Borrower is actively prosecuting or defending such proceedings or
      arbitration in good faith; and

            

    

     

    
      	
               
      

            	
              (g)

            	
              Security
      Interests arising by operation of law in respect of taxes which are not
      overdue for payment or in respect of taxes being contested in good faith
      by appropriate steps and in respect of which appropriate reserves have
      been made;

            

    

     

    "Pertinent Document"
means:

    

    
      	
               
      

            	
              (a)

            	
              any
      Finance Document;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      policy or contract of insurance contemplated by or referred to in Clause
      13 or any other provision of this Agreement or another Finance
      Document;

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      other document contemplated by or referred to in any Finance Document;
      and

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      document which has been or is at any time sent by or to a Servicing Bank
      in contemplation of or in connection with any Finance Document or any
      policy, contract or document falling within paragraphs (b) or
      (c);

            

    

     

    
      	
               
      

            	
              "Pertinent Jurisdiction",
      in relation to a company, means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              England
      and Wales;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      country under the laws of which the company is incorporated or
      formed;

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      country in which the company has the centre of its main interests or which
      the company's central management and control is or has recently been
      exercised;

            

    

     

    
      	
               
      

            	
              (d)

            	
              a
      country in which the overall net income of the company is subject to
      corporation tax, income tax or any similar
tax;

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (e)

            	
              a
      country in which assets of the company (other than securities issued by,
      or loans to, related companies) having a substantial value are situated,
      in which the company maintains a branch or permanent place of business, or
      in which a Security Interest created by the company must or should be
      registered in order to ensure its validity or priority;
  and

            

    

     

    
      	
               
      

            	
              (f)

            	
              a
      country the courts of which have jurisdiction to make a winding up,
      administration or similar order in relation to the company, whether as a
      main or territorial or ancillary proceedings, or which would have such
      jurisdiction if their assistance were requested by the courts of a country
      referred to in paragraphs (b) or
(c);

            

    

     

    
      	
               
      

            	
              "Pertinent Matter"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              any
      transaction or matter contemplated by, arising out of, or in connection
      with a Pertinent Document; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      statement relating to a Pertinent Document or to a transaction or matter
      falling within paragraph (a),

            

    

     

    and
covers any such transaction, matter or statement, whether entered into, arising
or made at any time before the signing of this Agreement or on or at any time
after that signing;

    

    
      	
               
      

            	
              "Potential Event of
      Default" means an event or circumstance which, with the giving of
      any notice, the lapse of time, a determination of the Majority Lenders
      and/or the satisfaction of any other condition, would constitute an Event
      of Default;

            

    

    

    
      	
               
      

            	
              "Predelivery Security
      Assignment"  means, in relation to a Ship, an assignment
      of the Shipbuilding Contract for that Ship and of the Refund Guarantee in
      relation to that Shipbuilding Contract in the Agreed
  Form;

            

    

    

    
      	
               
      

            	
              "Principal
      Subsidiaries"  means each company which has total assets
      which are valued at 5 per cent. or more of the value of the consolidated
      total assets of the Guarantor and its subsidiaries, as calculated by
      reference to the then latest audited annual accounts of such subsidiary
      and the Guarantor and, in the singular, means any of
  them;

            

    

    

    
      	
               
      

            	
              "Quadripartite Agreement"
      means, in relation to a Ship, an agreement between the Borrower owning or
      to own that Ship, the Charterer of that Ship, the relevant Charter
      Guarantor and the Security Trustee in the Agreed
  Form;

            

    

    

    
      	
               
      

            	
              "Quotation Date" means,
      in relation to any period for which an interest rate is to be determined
      under any provision of a Finance Document, the day which is 2 Business
      Days before the first day of that period, unless market practice differs
      in the London Interbank Market for a currency, in which case the Quotation
      Date will be determined by the Agent in accordance with market practice in
      the London Interbank Market (and if quotations would normally be given by
      leading banks in the London Interbank Market on more than one day, the
      Quotation Date will be the last of those
days);

            

    

    

    
      	
               
      

            	
              "Reference Banks" means,
      subject to Clause 26.16, DVB Bank America
N.V.;

            

    

    

    
      	
               
      

            	
              "Refund
      Guarantees"  means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              in
      relation to the Shipbuilding Contract for Ship A, the guarantee dated 18
      December 2006 and issued by the Refund Guarantor in favour of the
      Guarantor together with an agreement made or to be made between the Refund
      Guarantor, the Guarantor and Banksy pursuant to which Banksy will become
      the beneficiary under such guarantee;
and

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (b)

            	
              in
      relation to the Shipbuilding Contract for Ship B, the guarantee dated 18
      December 2006 and issued by the Refund Guarantor in favour of the
      Guarantor together with an agreement made or to be made between the Refund
      Guarantor, the Guarantor and Hongbo pursuant to which Hongbo will become
      the beneficiary under such
guarantee,

            

    

    

    
      	
               
      

            	
              each
      in a form approved by the Lenders and as supplemented and/or amended from
      time to time and, in the singular, means either of
  them;

            

    

    

    
      	
               
      

            	
              "Refund
      Guarantor"  means Woori Bank of the Republic of
      Korea;

            

    

    

    
      	
               
      

            	
              "Relevant Person" has the
      meaning given in Clause 19.9;

            

    

    

    
      	
               
      

            	
              "Repayment Date" means a
      date on which a repayment is required to be made under Clause
      8;

            

    

    

    
      	
               
      

            	
              "Requisition
      Compensation"  includes all compensation or other moneys
      payable by reason of any act or event such as is referred to in paragraph
      (b) of the definition of "Total
    Loss";

            

    

    

    
      	
               
      

            	
              "Secured Liabilities"
      means all liabilities which the Borrowers, the Security Parties or any of
      them have, at the date of this Agreement or at any later time or times,
      under or in connection with any Finance Document or any Designated
      Transaction under any Master Agreement or any judgment relating to any
      Finance Document or any Designated Transaction under any Master Agreement;
      and for this purpose, there shall be disregarded any total or partial
      discharge of these liabilities, or variation of their terms, which is
      effected by, or in connection with, any bankruptcy, liquidation,
      arrangement or other procedure under the insolvency laws of any
      country;

            

    

    

    
      	
               
      

            	
              "Security Interest"
      means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              a
      mortgage, charge (whether fixed or floating) or pledge, any maritime or
      other lien or any other security interest of any
  kind;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      security rights of a plaintiff under an action in rem;
    and

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      arrangement entered into by a person (A) the effect of which is to place
      another person (B) in a position which is similar, in economic terms, to
      the position in which B would have been had he held a security interest
      over an asset of A; but this paragraph (c) does not apply to a right of
      set off or combination of accounts conferred by the standard terms of
      business of a bank or financial
institution;

            

    

     

    
      	
               
      

            	
              "Security Party" means
      the Guarantor, each party to each Quadripartite Agreement (except a
      Creditor Party) and any other person (except a Creditor Party) who, as a
      surety or mortgagor, as a party to any subordination or priorities
      arrangement, or in any similar capacity, executes a document falling
      within the last paragraph of the definition of "Finance
      Documents";

            

    

    

    
      	
               
      

            	
              "Security Period" means
      the period commencing on the date of this Agreement and ending on the date
      on which the Agent notifies the Borrowers, the Security Parties and the
      Lenders that:

            

    

    

    
      	
               
      

            	
              (a)

            	
              all
      amounts which have become due for payment by any Borrower or any Security
      Party under the Finance Documents and the Master Agreements have been
      paid;

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              no
      amount is owing or has accrued (without yet having become due for payment)
      under any Finance Document or any Master
  Agreement;

            

    

     

    
      	
               
      

            	
              (c)

            	
              neither
      any Borrower nor any Security Party has any future or contingent liability
      under Clause 20, 21 or 22 or any other provision of this Agreement or
      another Finance Document or a Master Agreement;
  and

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Agent, the Security Trustee and the Majority Lenders do not consider that
      there is a significant risk that any payment or transaction under a
      Finance Document or a Master Agreement would be set aside, or would have
      to be reversed or adjusted, in any present or possible future bankruptcy
      of a Borrower or a Security Party or in any present or possible future
      proceeding relating to a Finance Document or a Master Agreement or any
      asset covered (or previously covered) by a Security Interest created by a
      Finance Document;

            

    

     

    
      	
               
      

            	
              "Security
      Trustee"  means DVB Bank America N.V., acting in such
      capacity through its office at Zeelandia Office Park, Kaya W.F.G. Mensing
      14, Curaçao, Netherlands Antilles, or any successor of it appointed under
      clause 5 of the Agency and Trust
Agreement;

            

    

    

    
      	
               
      

            	
              "Servicing Bank" means
      the Agent or the Security Trustee;

            

    

    

    
      	
               
      

            	
              "Shares Pledge" means, in
      relation to a Borrower, a deed creating security over the share capital of
      that Borrower in the Agreed Form;

            

    

    

    
      	
               
      

            	
              "Ship" means each
      of:

            

    

    

    
      	
               
      

            	
              (a)

            	
              "Ship A", being the
      newbuilding IMO III, double hull product tanker of 50,000 dwt which is to
      be constructed by the Builder for, and purchased by, Banksy under the
      Shipbuilding Contract in respect of hull number S-1027 and upon delivery
      registered in the name of Banksy under Maltese flag;
  and

            

    

     

    
      	
               
      

            	
              (b)

            	
              "Ship B", being the
      newbuilding IMO III, double hull product tanker of 50,000 dwt which is to
      be constructed by the Builder for, and purchased by, Hongbo under the
      Shipbuilding Contract in respect of hull number S-1033 and upon delivery
      registered in the name of Hongbo under Liberian
  flag;

            

    

     

    
      	
               
      

            	
              and,
      in the singular, means either of
them;

            

    

    

    
      	
               
      

            	
              "Shipbuilding
      Contracts"  means:

            

    

    

    
      	
               
      

            	
              (a)

            	
              the
      shipbuilding contract dated 31 October 2006 and made between the Builder
      and the Guarantor for the construction by the Builder of a newbuilding IMO
      III, double hull product tanker of 50,000 dwt with hull number S-1027 and
      its purchase by Guarantor together with a novation agreement made or to be
      made between the Builder, the Guarantor and Banksy pursuant to which the
      Guarantor's rights and obligations under such shipbuilding contract are
      novated in favour of Banksy; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      shipbuilding contract dated 31 October 2006 and made between the Builder
      and the Guarantor for the construction by the Builder of a newbuilding IMO
      III, double hull product tanker of 50,000 dwt with hull number S-1033 and
      its purchase by Guarantor together with a novation agreement made or to be
      made between the Builder, the Guarantor and Hongbo pursuant to which the
      Guarantor's rights and obligations under such shipbuilding contract are
      novated in favour of Hongbo;

            

    

     

    each in a
form approved by the Lenders and as supplemented and/or amended from time to
time and, in the singular, means either of them;

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              "Total Loss" means, in
      relation to a Ship:

            

    

    

    
      	
               
      

            	
              (a)

            	
              actual,
      constructive, compromised, agreed or arranged total loss of the
      Ship;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      expropriation, confiscation, requisition or acquisition of the Ship,
      whether for full consideration, a consideration less than its proper
      value, a nominal consideration or without any consideration, which is
      effected by any government or official authority or by any person or
      persons claiming to be or to represent a government or official authority
      (excluding a requisition for hire for a fixed period not exceeding 1 year
      without any right to an extension) unless it is within 1 month redelivered
      to the full control of the Borrower owning the Ship;
  and

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      arrest, capture, seizure or detention of the Ship (including any hijacking
      or theft) unless it is within 1 month redelivered to the full control of
      the Borrower owning the Ship;

            

    

     

    "Swap Bank"  means a
bank or financial institution listed in Schedule 2 and acting through its branch
indicated in Schedule 1;

     

    "Swap
Counterparty"  means, at any relevant time and in relation to a
continuing Designated Transaction, the Swap Bank which is a party to that
Designated Transaction;

     

    "Swap
Exposure"  means, as at any relevant date and in relation to a
Swap Counterparty, the amount certified by the Swap Counterparty to the Agent to
be the aggregate net amount in Dollars which would be payable by the Borrowers
to the Swap Counterparty under (and calculated in accordance with) section 6(e)
(Payments on Early
Termination) of the Master Agreement entered into by the Swap
Counterparty with the Borrowers if an Early Termination Date had occurred on the
relevant date in relation to all continuing Designated Transactions entered into
between the Borrowers and the Swap Counterparty;

     

    
      	
               
      

            	
              "Total Loss Date" means,
      in relation to a Ship:

            

    

    

    
      	
               
      

            	
              (a)

            	
              in
      the case of an actual loss of the Ship, the date on which it occurred or,
      if that is unknown, the date when the Ship was last heard
    of;

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      the case of a constructive, compromised, agreed or arranged total loss of
      the Ship, the earliest of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      date on which a notice of abandonment is given to the insurers;
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      date of any compromise, arrangement or agreement made by or on behalf of
      the Borrower owning the Ship with the Ship's insurers in which the
      insurers agree to treat the Ship as a total loss;
  and

            

    

     

    
      	
               
      

            	
              (a)

            	
              in
      the case of any other type of total loss, on the date (or the most likely
      date) on which it appears to the Agent that the event constituting the
      total loss occurred;

            

    

     

    
      	
               
      

            	
              "Tranche"  means,
      in relation to a Ship, the aggregate of the Advances relating to that
      Ship;

            

    

    

    
      	
               
      

            	
              "Transaction"  has
      the meaning given in each Master
Agreement;

            

    

    

    
      	
               
      

            	
              "Transaction
      Documents"  means the Shipbuilding Contracts, the
      Charters and the Charter Guarantees and, in the singular, means any of
      them;

            

    

    

    
      	
               
      

            	
              "Transfer
      Certificate"  has the meaning given in Clause 26.2;
      and

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              "Trust Property" has the
      meaning given in clause 3.1 of the Agency and Trust
    Agreement.

            

    

    

    
      	
              1.2

            	
              Construction of certain
      terms.  In this
Agreement:

            

    

     

    "administration
notice"  means a notice appointing an administrator, a notice
of intended appointment and any other notice which is required by law (generally
or in the case concerned) to be filed with the court or given to a person prior
to, or in connection with, the appointment of an administrator;

    

    
      	
               
      

            	
              "approved" means, for the
      purposes of Clause 13, approved in writing by the
  Agent;

            

    

    

    
      	
               
      

            	
              "asset" includes every
      kind of property, asset, interest or right, including any present, future
      or contingent right to any revenues or other
  payment;

            

    

    

    
      	
               
      

            	
              "company" includes any
      partnership, joint venture and unincorporated
  association;

            

    

    

    "consent" includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;

    

    
      	
               
      

            	
              "contingent liability"
      means a liability which is not certain to arise and/or the amount of which
      remains unascertained;

            

    

    

    
      	
               
      

            	
              "control"  by
      one person (A) of another (B) means that A (whether directly or indirectly
      and whether by the ownership of share capital, the possession of voting
      power, contract or otherwise and whether acting alone or in concert with
      one or more other parties) has the power to appoint and/or remove all or
      the majority of the members of the board of directors or other governing
      body of B or otherwise controls or has the power to control the affairs
      and policies of B;

            

    

    

    
      	
               
      

            	
              "document" includes a
      deed; also a letter or fax;

            

    

    

    
      	
               
      

            	
              "excess risks" means, in
      relation to a Ship, the proportion of claims for general average, salvage
      and salvage charges not recoverable under the hull and machinery policies
      in respect of the Ship in consequence of its insured value being less than
      the value at which the Ship is assessed for the purpose of such
      claims;

            

    

    

    
      	
               
      

            	
              "expense" means any kind
      of cost, charge or expense (including all legal costs, charges and
      expenses) and any applicable value added or other
  tax;

            

    

    

    
      	
               
      

            	
              "law" includes any order
      or decree, any form of delegated legislation, any treaty or international
      convention and any regulation or resolution of the Council of the European
      Union, the European Commission, the United Nations or its Security
      Council;

            

    

    

    
      	
               
      

            	
              "legal or administrative
      action" means any legal proceeding or arbitration and any
      administrative or regulatory action or
  investigation;

            

    

    

    
      	
               
      

            	
              "liability"  includes
      every kind of debt or liability (present or future, certain or
      contingent), whether incurred as principal or surety or
      otherwise;

            

    

    

    
      	
               
      

            	
              "months"  shall
      be construed in accordance with Clause
1.3;

            

    

    

    
      	
               
      

            	
              "obligatory insurances"
      means, in relation to a Ship, all insurances effected, or which the
      Borrower owning the Ship is obliged to effect, under Clause 13 or any
      other provision of this Agreement or another Finance
    Document;

            

    

    

    
      	
               
      

            	
              "parent
      company"  has the meaning given in Clause
      1.4;

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              "person"  includes
      any company; any state, political sub-division of a state and local or
      municipal authority; and any international
  organisation;

            

    

    

    
      	
               
      

            	
              "policy", in relation to
      any insurance, includes a slip, cover note, certificate of entry or other
      document evidencing the contract of insurance or its
  terms;

            

    

    

    
      	
               
      

            	
              "protection and indemnity
      risks" means the usual risks covered by a protection and indemnity
      association managed in London, including pollution risks and the
      proportion (if any) of any sums payable to any other person or persons in
      case of collision which are not recoverable under the hull and machinery
      policies by reason of the incorporation in them of clause 6 of the
      International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute
      Time Clauses (Hulls) (1/11/95) or clause 8 of the Institute Time Clauses
      (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71)
      or any equivalent provision;

            

    

    

    "regulation" includes any
regulation, rule, official directive, request or guideline whether or not having
the force of law of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or
organisation;

    

    
      	
               
      

            	
              "subsidiary"  has
      the meaning given in Clause 1.4;

            

    

    

    
      	
               
      

            	
              "tax"  includes
      any present or future tax, duty, impost, levy or charge of any kind which
      is imposed by any state, any political sub-division of a state or any
      local or municipal authority (including any such imposed in connection
      with exchange controls), and any connected penalty, interest or fine;
      and

            

    

    

    
      	
               
      

            	
              "war
      risks"  includes the risk of mines, blocking, trapping
      and all risks excluded by clause 29 of the International Hull Clauses
      (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses
      (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls)
      (1/10/83).

            

    

    

    
      	
              1.3

            	
              Meaning of
      "month".  A period of one or more "months" ends on the day
      in the relevant calendar month numerically corresponding to the day of the
      calendar month on which the period started ("the numerically corresponding
      day"), but:

            

    

     

    
      	
              (a)

            	
              on
      the Business Day following the numerically corresponding day if the
      numerically corresponding day is not a Business Day or, if there is no
      later Business Day in the same calendar month, on the Business Day
      preceding the numerically corresponding day;
or

            

    

     

    
      	
              (b)

            	
              on
      the last Business Day in the relevant calendar month, if the period
      started on the last Business Day in a calendar month or if the last
      calendar month of the period has no numerically corresponding
      day,

            

    

     

    and
"month" and "monthly" shall be construed
accordingly.

    

    
      	
              1.4

            	
              Meaning of
      "subsidiary".  A company (S) is a subsidiary of another
      company (P) if:

            

    

     

    
      	
              (a)

            	
              a
      majority of the issued shares in S (or a majority of the issued shares in
      S which carry unlimited rights to capital and income distributions) are
      directly owned by P or are indirectly attributable to P;
  or

            

    

     

    
      	
              (b)

            	
              P
      has direct or indirect control over a majority of the voting rights
      attaching to the issued shares of S;
or

            

    

     

    
      	
              (c)

            	
              P
      has the direct or indirect power to appoint or remove a majority of the
      directors of S; or

            

    

     

    
      	
              (d)

            	
              P
      otherwise has the direct or indirect power to ensure that the affairs of S
      are conducted in accordance with the wishes of
  P,

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              and
      any company of which S is a subsidiary is a parent company of
      S.

            

    

     

    

    
      	
              1.5

            	
              General
      Interpretation.  In this
  Agreement:

            

    

     

    
      	
              (a)

            	
              references
      to, or to a provision of, a Finance Document or any other document are
      references to it as amended or supplemented, whether before the date of
      this Agreement or otherwise;

            

    

     

    
      	
              (b)

            	
              references
      to, or to a provision of, any law include any amendment, extension,
      re-enactment or replacement, whether made before the date of this
      Agreement or otherwise;

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              (d)

            	
              Clauses
      1.1 to 1.5 apply unless the contrary intention
  appears.

            

    

     

    
      	
              1.6

            	
              Headings.  In
      interpreting a Finance Document or any provision of a Finance Document,
      all clause, sub-clause and other headings in that and any other Finance
      Document shall be entirely
disregarded.

            

    

     

    
      	
              2

            	
              FACILITY

            

    

     

    
      	
              2.1

            	
              Amount of
      facility.  Subject to the other provisions of this
      Agreement, the Lenders shall make a loan facility not exceeding
      $80,000,000 available to the
Borrowers.

            

    

     

    
      	
              2.2

            	
              Lenders' participations in
      Advances.  Subject to the other provisions of this
      Agreement, each Lender shall participate in each Advance in the proportion
      which, as at the relevant Drawdown Date, its Commitment bears to the Total
      Commitments.

            

    

     

    
      	
              2.3

            	
              Purpose of
      Advances.  The Borrowers undertake with each Creditor
      Party to use each Advance only for the purpose stated in the preamble to
      this Agreement.

            

    

     

    
      	
              3

            	
              POSITION
      OF THE LENDERS AND SWAP BANKS

            

    

     

    
      	
              3.1

            	
              Interests
      several.  The rights of the Lenders and of the Swap Banks
      under this Agreement and under the Master Agreements are
      several.

            

    

     

    
      	
              3.2

            	
              Individual right of
      action.  Each Lender and each Swap Bank shall be entitled
      to sue for any amount which has become due and payable by the Borrowers to
      it under this Agreement or under a Master Agreement without joining the
      Agent, the Security Trustee, any other Lender or any other Swap Bank as
      additional parties in the
proceedings.

            

    

     

    
      	
              3.3

            	
              Proceedings requiring Majority
      Lenders' consent.  Except as provided in Clause 3.2, no
      Lender and no Swap Bank may commence proceedings against any Borrower or
      any Security Party in connection with a Finance Document or a Master
      Agreement without the prior consent of the Majority
    Lenders.

            

    

     

    
      	
              3.4

            	
              Obligations
      several.  The obligations of the Lenders under this
      Agreement and of the Swap Banks under the Master Agreement to which each
      is a party are several; and a failure of a Lender to perform its
      obligations under this Agreement or a failure of a Swap Bank to perform
      its obligations under the Master Agreement to which it is a party shall
      not result in:

            

    

     

    
      	
              (a)

            	
              the
      obligations of the other Lenders or Swap Banks being increased;
      nor

            

    

     

    
      	
              (b)

            	
              any
      Borrower, any Security Party, any other Lender or any other Swap Bank
      being discharged (in whole or in part) from its obligations under any
      Finance Document or under any Master
Agreement,

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              and
      in no circumstances shall a Lender or a Swap Bank have any responsibility
      for a failure of another Lender or another Swap Bank to perform its
      obligations under this Agreement or a Master
  Agreement.

            

    

     

    

    
      	
              4

            	
              DRAWDOWN

            

    

     

    
      	
              4.1

            	
              Request for
      Advance.  Subject to the following conditions, the
      Borrowers may request an Advance to be made by ensuring that the Agent
      receives a completed Drawdown Notice not later than 11.00 a.m. (London
      time) 3 Business Days prior to the intended Drawdown
  Date.

            

    

     

    
      	
              4.2

            	
              Availability.  The
      conditions referred to in Clause 4.1 are
that:

            

    

     

    
      	
              (a)

            	
              a
      Drawdown Date has to be a Business Day during the Availability
      Period;

            

    

     

    
      	
              (b)

            	
              each
      Advance shall relate to either Ship A or Ship
B;

            

    

     

    
      	
              (c)

            	
              there
      shall be no more than 5 Advances relating to each Ship and the aggregate
      of such Advances relating to a Ship shall not exceed
      $40,000,000;

            

    

     

    
      	
              (d)

            	
              the
      amount of the first Advance relating to a Ship shall not exceed the lesser
      of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              70
      per cent. of the net amount of the instalment of the purchase price
      already paid to the Builder under article 10(b)(i) (refund guarantee
      arrangement) of the Shipbuilding Contract for that
  Ship;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              $5,011,650;
      or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              such
      lesser amount required to ensure that, if the ratio set out in Clause
      15.1(a) were applied immediately following the making of the Advance, the
      Borrowers would not be obliged to provide additional security or prepay
      part of the Loan under that Clause;

            

    

     

    
      	
              (e)

            	
              the
      amount of the second Advance relating to a Ship shall not exceed the
      lesser of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              70
      per cent. of the net amount of the instalment of the purchase price due to
      the Builder under article 10(b)(ii) (steel cutting) of the Shipbuilding
      Contract for that Ship on the relevant Drawdown
  Date;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              $5,011,650;
      or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              such
      lesser amount required to ensure that, if the ratio set out in Clause
      15.1(a) were applied immediately following the making of the Advance, the
      Borrowers would not be obliged to provide additional security or prepay
      part of the Loan under that Clause;

            

    

     

    
      	
              (f)

            	
              the
      amount of the third Advance relating to a Ship shall not exceed the lesser
      of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              70
      per cent. of the net amount of the instalment of the purchase price due to
      the Builder under article 10(b)(iii) (keel laying) of the Shipbuilding
      Contract for that Ship on the relevant Drawdown
  Date;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              $6,682,200;
      or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              such
      lesser amount required to ensure that, if the ratio set out in Clause
      15.1(a) were applied immediately following the making of the Advance, the
      Borrowers 

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    would not
be obliged to provide additional security or prepay part of the Loan under that
Clause;

     

    
      	
              (g)

            	
              the
      amount of the fourth Advance relating to a Ship shall not exceed the
      lesser of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              70
      per cent. of the net amount of the instalment of the purchase price due to
      the Builder under article 10(b)(iv) (launching) of the Shipbuilding
      Contract for that Ship on the relevant Drawdown
  Date;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              $6,682,200;
      or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              such
      lesser amount required to ensure that, if the ratio set out in Clause
      15.1(a) were applied immediately following the making of the Advance, the
      Borrowers would not be obliged to provide additional security or prepay
      part of the Loan under that Clause;

            

    

     

    
      	
              (h)

            	
              the
      amount of the final Advance relating to a Ship shall not exceed the lesser
      of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              116
      per cent. of the net amount of the instalment of the purchase price due to
      the Builder under article 10(b)(v) (delivery) of the Shipbuilding Contract
      for that Ship on the relevant Drawdown
Date;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              $16,612,300;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              together
      with the aggregate amount of the previous Advances relating to that Ship,
      75 per cent. of the market value (determined as provided in Clause 15.3 on
      the basis of a valuation carried out not more than 2 weeks prior to the
      Drawdown Date) of that Ship; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              such
      lesser amount as the Lenders may determine in their absolute discretion if
      the Borrowers have not provided all of the documents and evidence set out
      in Clauses 11.28 and 11.29 in form and substance satisfactory to the Agent
      and its lawyers; and

            

    

     

    
      	
              (i)

            	
              the
      aggregate amount of the Advances shall not exceed the Total
      Commitments.

            

    

     

    
      	
              4.3

            	
              Notification to Lenders of
      receipt of a Drawdown Notice.  The Agent shall promptly
      notify the Lenders that it has received a Drawdown Notice and shall inform
      each Lender of:

            

    

     

    
      	
              (a)

            	
              the
      amount of the Advance and the Drawdown
Date;

            

    

     

    
      	
              (b)

            	
              the
      amount of that Lender's participation in the Advance;
  and

            

    

     

    
      	
              (c)

            	
              the
      duration of the first Interest
Period.

            

    

     

    
      	
              4.4

            	
              Drawdown Notice
      irrevocable.  A Drawdown Notice must be signed by a
      director, officer or attorney-in-fact of each Borrower; and once served, a
      Drawdown Notice cannot be revoked without the prior consent of the Agent,
      acting on the authority of the Majority
Lenders.

            

    

     

    
      	
              4.5

            	
              Lenders to make available
      Contributions.  Subject to the provisions of this
      Agreement, each Lender shall, on and with value on each Drawdown Date,
      make available to the Agent the amount due from that Lender on that
      Drawdown Date under Clause 2.2.

            

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    
      	
              4.6

            	
              Disbursement of
      Advance.  Subject to the provisions of this Agreement,
      the Agent shall on each Drawdown Date pay to the Borrowers the amounts
      which the Agent receives from the Lenders under Clause 4.5; and that
      payment to the Borrowers shall be
made:

            

    

     

    
      	
              (a)

            	
              to
      the account which the Borrowers specify in the Drawdown Notice;
      and

            

    

     

    
      	
              (b)

            	
              in
      the like funds as the Agent received the payments from the
      Lenders.

            

    

     

    
      	
              4.7

            	
              Disbursement of Advance to
      third party.  The payment by the Agent under Clause 4.6
      shall constitute the making of the Advance and the Borrowers shall at that
      time become indebted, as principal and direct obligors, to each Lender in
      an amount equal to that Lender's
Contribution.

            

    

     

    
      	
              5

            	
              INTEREST

            

    

     

    
      	
              5.1

            	
              Payment of normal
      interest.  Subject to the provisions of this Agreement,
      interest on the Loan in respect of each Interest Period shall be paid by
      the Borrowers on the last day of that Interest
  Period.

            

    

     

    
      	
              5.2

            	
              Normal rate of
      interest.  Subject to the provisions of this Agreement,
      the rate of interest on the Loan in respect of an Interest Period shall be
      the aggregate of the Margin and LIBOR for that Interest
      Period.

            

    

     

    
      	
              5.3

            	
              Payment of accrued
      interest.  In the case of an Interest Period longer than
      3 months, accrued interest shall be paid every 3 months during that
      Interest Period and on the last day of that Interest
    Period.

            

    

     

    
      	
              5.4

            	
              Notification of Interest
      Periods and rates of normal interest.  The Agent shall
      notify the Borrowers and each Lender
of:

            

    

     

    
      	
              (a)

            	
              each
      rate of interest; and

            

    

     

    
      	
              (b)

            	
              the
      duration of each Interest Period,

            

    

     

    as soon as reasonably practicable after
each is determined.

    

    
      	
              5.5

            	
              Obligation of Reference Banks
      to quote.  A Reference Bank which is a Lender shall use
      all reasonable efforts to supply the quotation required of it for the
      purposes of fixing a rate of interest under this
  Agreement.

            

    

     

    
      	
              5.6

            	
              Absence of quotations by
      Reference Banks.  If any Reference Bank fails to supply a
      quotation, the Agent shall determine the relevant LIBOR on the basis of
      the quotations supplied by the other Reference Bank or Banks; but if the
      Reference Banks fail to provide a quotation, the relevant rate of interest
      shall be set in accordance with the following provisions of this Clause
      5.

            

    

     

    
      	
              5.7

            	
              Market
      disruption.  The following provisions of this Clause 5
      apply if:

            

    

     

    
      	
              (a)

            	
              no
      rate is quoted on REUTERS BBA Page LIBOR 01 and the Reference Banks do
      not, before 1.00 p.m. (London time) on the Quotation Date, provide
      quotations to the Agent in order to fix LIBOR;
  or

            

    

     

    
      	
              (b)

            	
              at
      least 1 Business Day before the start of an Interest Period, Lenders
      having Contributions together amounting to more than 50 per cent. of the
      Loan (or, if an Advance has not been made, Commitments amounting to more
      than 50 per cent. of the Total Commitments) notify the Agent that LIBOR
      fixed by the Agent would not accurately reflect the cost to those Lenders
      of funding their respective Contributions (or

            

    

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

     

    any part of them) during the Interest Period in the London
Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for
the Interest Period; or

    
       

      
        
          	
                  (c)

                	
                  at
      least 1 Business Day before the start of an Interest Period, the Agent is
      notified by a Lender (the "Affected Lender") that
      for any reason it is unable to obtain Dollars in the London Interbank
      Market in order to fund its Contribution (or any part of it) during the
      Interest Period.

                

        

         

      

    

    
      	
              5.8

            	
              Notification of market
      disruption.  The Agent shall promptly notify the
      Borrowers and each of the Lenders and each of the Swap Counterparties
      stating the circumstances falling within Clause 5.7 which have caused its
      notice to be given.

            

    

     

    
      	
              5.9

            	
              Suspension of
      drawdown.  If the Agent's notice under Clause 5.8 is
      served before an Advance is made:

            

    

     

    
      	
              (a)

            	
              in
      a case falling within Clauses 5.7(a) or (b), the Lenders' obligations to
      make the Advance; and

            

    

     

    
      	
              (b)

            	
              in
      a case falling within Clause 5.7(c), the Affected Lender's obligation to
      participate in the Advance,

            

    

     

    shall be
suspended while the circumstances referred to in the Agent's notice
continue.

    

    
      	
              5.10

            	
              Negotiation of alternative rate
      of interest.  If the Agent's notice under Clause 5.8 is
      served after an Advance is made, the Borrowers, the Agent and the Lenders
      or (as the case may be) the Affected Lender and the Swap Counterparties
      shall use reasonable endeavours to agree, within the 30 days after the
      date on which the Agent serves its notice under Clause 5.8 (the "Negotiation Period"), an
      alternative interest rate or (as the case may be) an alternative basis for
      the Lenders or (as the case may be) the Affected Lender to fund or
      continue to fund their or its Contribution during the Interest Period
      concerned.

            

    

     

    
      	
              5.11

            	
              Application of agreed
      alternative rate of interest.  Any alternative interest
      rate or an alternative basis which is agreed during the Negotiation Period
      shall take effect in accordance with the terms
  agreed.

            

    

     

    
      	
              5.12

            	
              Alternative rate of interest in
      absence of agreement.  If an alternative interest rate or
      alternative basis is not agreed within the Negotiation Period, and the
      relevant  circumstances are continuing at the end of the
      Negotiation Period, then the Agent shall, with the agreement of each
      Lender or (as the case may be) the Affected Lender, set an interest period
      and interest rate representing the cost of funding of the Lenders or (as
      the case may be) the Affected Lender in Dollars or in any available
      currency of their or its Contribution plus the Margin; and the procedure
      provided for by this Clause 5.12 shall be repeated if the relevant
      circumstances are continuing at the end of the interest period so set by
      the Agent.

            

    

     

    
      	
              5.13

            	
              Notice of
      prepayment.  If the Borrowers do not agree with an
      interest rate set by the Agent under Clause 5.12, the Borrowers may give
      the Agent not less than 15 Business Days' notice of their intention to
      prepay at the end of the interest period set by the
  Agent.

            

    

     

    
      	
              5.14

            	
              Prepayment; termination of
      Commitments.  A notice under Clause 5.13 shall be
      irrevocable; the Agent shall promptly notify the Lenders or (as the case
      may require) the Affected Lender of the Borrowers' notice of intended
      prepayment; and:

            

    

     

    
      	
              (a)

            	
              on
      the date on which the Agent serves that notice, the Total Commitments or
      (as the case may require) the Commitment of the Affected Lender shall be
      cancelled; and

            

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
      	
              (b)

            	
              on
      the last Business Day of the interest period set by the Agent, the
      Borrowers shall prepay (without premium or penalty) the Loan or, as the
      case may be, the Affected Lender's Contribution, together with accrued
      interest thereon at the applicable rate plus the
  Margin.

            

    

     

    
      	
              5.15

            	
              Application of
      prepayment.  The provisions of Clause 8 shall apply in
      relation to the prepayment.

            

    

     

    
      	
              6

            	
              INTEREST
      PERIODS

            

    

     

    
      	
              6.1

            	
              Commencement of Interest
      Periods.  The first Interest Period applicable to an
      Advance shall commence on the Drawdown Date and each subsequent Interest
      Period shall commence on the expiry of the preceding Interest
      Period.

            

    

     

    
      	
              6.2

            	
              Duration of normal Interest
      Periods.  Subject to Clauses 6.3 and 6.4, each Interest
      Period shall be:

            

    

     

    
      	
              (a)

            	
              3,
      6, 9 or 12 months as notified by the Borrowers to the Agent not later than
      11.00 a.m. (London time) 5 Business Days before the commencement of the
      Interest Period Provided
      that the Borrowers shall only be permitted to select the same
      period for both Tranches; or

            

    

     

    
      	
              (b)

            	
              in
      the case of the first Interest Period applicable to the second Advance
      under a Tranche, a period ending on the last day of the Interest Period
      applicable to the first Advance under that Tranche then current, whereupon
      both Advances under that Tranche shall be consolidated and treated as a
      single Advance under that Tranche;

            

    

     

    
      	
              (c)

            	
              3
      months, if the Borrowers fail to notify the Agent by the time specified in
      paragraph (a); or

            

    

     

    
      	
              (d)

            	
              such
      other period as the Agent may, with the authorisation of the Lenders,
      agree with the Borrowers.

            

    

     

    
      	
              6.3

            	
              Duration of Interest Periods
      for repayment instalments.  In respect of an amount due
      to be repaid under Clause 8 on a particular Repayment Date, an Interest
      Period shall end on that Repayment
Date.

            

    

     

    
      	
              6.4

            	
              Non-availability of matching
      deposits for Interest Period selected.  If, after the
      Borrowers have selected and the Lenders have agreed an Interest Period
      longer than 6 months, any Lender notifies the Agent by 11.00 a.m. (London
      time) on the third Business Day before the commencement of the Interest
      Period that it is not satisfied that deposits in Dollars for a period
      equal to the Interest Period will be available to it in the London
      Interbank Market when the Interest Period commences, the Interest Period
      shall be of 6 months.

            

    

     

    
      	
              7

            	
              DEFAULT
      INTEREST

            

    

     

    
      	
              7.1

            	
              Payment of default interest on
      overdue amounts.  The Borrowers shall pay interest in
      accordance with the following provisions of this Clause 7 on any amount
      payable by the Borrowers under any Finance Document which the Agent, the
      Security Trustee or the other designated payee does not receive on or
      before the relevant date, that is:

            

    

     

    
      	
              (a)

            	
              the
      date on which the Finance Documents provide that such amount is due for
      payment; or

            

    

     

    
      	
              (b)

            	
              if
      a Finance Document provides that such amount is payable on demand, the
      date on which the demand is served;
or

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              if
      such amount has become immediately due and payable under Clause 19.4, the
      date on which it became immediately due and
  payable.

            

    

     

    
      	
              7.2

            	
              Default rate of
      interest.  Interest shall accrue on an overdue amount
      from (and including) the relevant date until the date of actual payment
      (as well after as before judgment) at the rate per annum determined by the
      Agent to be 2 per cent. above:

            

    

     

    
      	
              (a)

            	
              in
      the case of an overdue amount of principal, the higher of the rates set
      out at Clauses 7.3(a) and (b); or

            

    

     

    
      	
              (b)

            	
              in
      the case of any other overdue amount, the rate set out at Clause
      7.3(b).

            

    

     

    
      	
              7.3

            	
              Calculation of default rate of
      interest.  The rates referred to in Clause 7.2
      are:

            

    

     

    
      	
              (a)

            	
              the
      rate applicable to the overdue principal amount immediately prior to the
      relevant date (but only for any unexpired part of any then current
      Interest Period applicable to it);

            

    

     

    
      	
              (b)

            	
              the
      Margin plus, in respect of successive periods of any duration (including
      at call) up to 3 months which the Agent may select from time to
      time:

            

    

     

    
      	
               
      

            	
              (i)

            	
              LIBOR;
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      the Agent (after consultation with the Reference Banks) determines that
      Dollar deposits for any such period are not being made available to any
      Reference Bank by leading banks in the London Interbank Market in the
      ordinary course of business, a rate from time to time determined by the
      Agent by reference to the cost of funds to the Reference Banks from such
      other sources as the Agent (after consultation with the Reference Banks)
      may from time to time determine.

            

    

     

    
      	
              7.4

            	
              Notification of interest
      periods and default rates.  The Agent shall promptly
      notify the Lenders and the Borrowers of each interest rate determined by
      the Agent under Clause 7.3 and of each period selected by the Agent for
      the purposes of paragraph (b) of that Clause; but this shall not be taken
      to imply that the Borrowers are liable to pay such interest only with
      effect from the date of the Agent's
  notification.

            

    

     

    
      	
              7.5

            	
              Payment of accrued default
      interest.  Subject to the other provisions of this
      Agreement, any interest due under this Clause shall be paid on the Agent's
      demand but also in any event, on the last day of the period by reference
      to which it was determined; and the payment shall be made to the Agent for
      the account of the Creditor Party to which the overdue amount is
      due.

            

    

     

    
      	
              7.6

            	
              Compounding of default
      interest.  Any such interest which is not paid at the end
      of the period by reference to which it was determined shall thereupon be
      compounded.

            

    

     

    
      	
              7.7

            	
              Application to Master
      Agreements.  For the avoidance of doubt, this Clause 7
      does not apply to any amount payable under a Master Agreement in respect
      of any continuing Designated Transaction as to which section 2(e) (Default Interest; Other
      Amounts) of that Master Agreement shall
  apply.

            

    

     

    
      	
              8

            	
              REPAYMENT
      AND PREPAYMENT

            

    

     

    
      	
              8.1

            	
              Amount of repayment
      instalments.  The Borrowers shall repay each Tranche by
      40 equal consecutive quarterly instalments of $625,000 each together with
      a balloon instalment equal to the outstanding balance of that
      Tranche.

            

    

     

    
      	
              8.2

            	
              Repayment
      Dates.  The first instalment of each Tranche shall be
      repaid on the earlier of (i) the date falling 6 months after the first
      Delivery Date or (ii) 31 December 2009;
and

            

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    both the
last instalment of each Tranche and the balloon instalment of each Tranche on
the date falling 120 months after the first Delivery Date.

     

    
      	
              8.3

            	
              Final Repayment
      Date.  On the earlier of (i) the final Repayment Date or
      (ii) 30 September 2019, the Borrowers shall additionally pay to the Agent
      for the account of the Creditor Parties all other sums then accrued or
      owing under any Finance Document.

            

    

     

    
      	
              8.4

            	
              Voluntary
      prepayment.  Subject to the following conditions, the
      Borrowers may prepay the whole or any part of a
  Tranche.

            

    

     

    
      	
              8.5

            	
              Conditions for voluntary
      prepayment.  The conditions referred to in Clause 8.4 are
      that:

            

    

     

    
      	
              (a)

            	
              a
      partial prepayment shall be $500,000 or an integral multiple of
      $500,000;

            

    

     

    
      	
              (b)

            	
              the
      Agent has received from the Borrowers at least 3 Business Days' prior
      written notice specifying the amount to be prepaid and the date on which
      the prepayment is to be made;

            

    

     

    
      	
              (c)

            	
              the
      Borrowers have provided evidence satisfactory to the Agent that any
      consent required by any Borrower or any Security Party in connection with
      the prepayment has been obtained and remains in force, and that any
      official  regulation relevant to this Agreement which affects
      any Borrower or any Security Party has been complied with;
    and

            

    

     

    
      	
              (d)

            	
              the
      Borrowers have complied with Clause 8.12 on or prior to the date of
      prepayment.

            

    

     

    
      	
              8.6

            	
              Effect of notice of
      prepayment.  A prepayment notice may not be withdrawn or
      amended without the consent of the Agent, given with the authorisation of
      the Majority Lenders, and the amount specified in the prepayment notice
      shall become due and payable by the Borrowers on the date for prepayment
      specified in the prepayment notice.

            

    

     

    
      	
              8.7

            	
              Notification of notice of
      prepayment.  The Agent shall notify the Lenders promptly
      upon receiving a prepayment notice, and shall provide any Lender which so
      requests with a copy of any document delivered by the Borrowers under
      Clause 8.5(c).

            

    

     

    
      	
              8.8

            	
              Mandatory
      prepayment.  The Borrowers shall be obliged to prepay in
      full the Tranche relating to that Ship, and to comply with Clause
      8.12:

            

    

     

    
      	
              (a)

            	
              if
      a Ship is sold, on or before the date on which the sale is completed by
      delivery of the Ship to the buyer;
or

            

    

     

    
      	
              (b)

            	
              if
      a Ship becomes a Total Loss, on the earlier of the date falling 180 days
      after the Total Loss Date and the date of receipt by the Security Trustee
      of the proceeds of insurance relating to such Total Loss;
    or

            

    

     

    
      	
              (c)

            	
              if
      any of a Borrower's rights under a Shipbuilding Contract are assigned
      (other than pursuant to a Predelivery Security Assignment), novated or
      sold, on or before the date on which such assignment, novation or sale is
      executed (in the case of an assignment or novation) or completed (in the
      case of a sale); or

            

    

     

    
      	
              (d)

            	
              if,
      prior to the Delivery Date of a Ship, the Borrowers arrange financing in
      part or full of any pre-delivery instalment or the delivery instalment of
      the Shipbuilding Contract for that Ship with a bank or financial
      institution (other than DVB Bank America N.V.), on or before the first
      drawdown under such financing; or

            

    

     

    
      	
              (e)

            	
              if
      any of the following occurs in relation to a Ship, on demand by the
      Agent:

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    
      
        	 	      
                (i)

              	      
                any
      of the events specified in article 11(a) or 11(c) of the Shipbuilding
      Contract for that Ship occurs; or

              
	 	 	 
	
                 
      

              	
                (ii)

              	
                either
      the Shipbuilding Contract for that Ship or the Refund Guarantee in
      relation to that Ship is cancelled, terminated, rescinded or suspended or
      otherwise ceases to remain in force for any reason;
  or

              

      

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Shipbuilding Contract for that Ship is amended or varied without the prior
      written consent of the Majority Lenders except for any such amendment or
      variation as is permitted by this Agreement or any other relevant Finance
      Document; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              that
      Ship has not for any reason been delivered to, and accepted by, the
      relevant Borrower under the Shipbuilding Contract for that Ship by the
      date specified in article 3(a)(iii) of that Shipbuilding
      Contract,

            

    

     

    and, if
the Delivery Date of that Ship has occurred, the Borrowers shall also be obliged
on the same prepayment date to prepay the additional amount (if any) required to
ensure that if the ratio set out in Clause 15.1 were applied immediately
following the prepayment(s) pursuant to this Clause 8.8, the Borrowers would not
be obliged to provide additional security or prepay part of the Loan under
Clause 15.

    

    
      	
              8.9

            	
              Amounts payable on
      prepayment.  A prepayment shall be made together
      with:

            

    

     

    
      	
              (a)

            	
              accrued
      interest (and any other amount payable under Clause 21 or otherwise) in
      respect of the amount prepaid;

            

    

     

    
      	
              (b)

            	
              if
      the prepayment is not made on the last day of an Interest Period, together
      with any sums payable under Clause 21.1(b);
and

            

    

     

    
      	
              (c)

            	
              if
      any part of the Loan is prepaid in connection with a financing or
      refinancing arranged by a bank or financial institution (other than DVB
      Bank America N.V.), as an agreed compensation for the loss of the Lenders'
      anticipated return on capital, a prepayment fee equal to 1 per cent. of
      the amount prepaid, for distribution among the Lenders pro rata to their
      Commitments,

            

    

     

    but
otherwise without premium or penalty.

    

    
      	
              8.10

            	
              Application of partial
      prepayment.  Each partial prepayment of a Tranche shall
      be applied pro rata against the repayment instalments and the balloon both
      specified in Clause 8.1 for that
Tranche.

            

    

     

    
      	
              8.11

            	
              No
      reborrowing.  No amount prepaid may be
      reborrowed.

            

    

     

    
      	
              8.12

            	
              Unwinding of Designated
      Transactions.  On or prior to any repayment or prepayment
      of the Loan under this Clause 8 or any other provision of this Agreement,
      the Borrowers shall wholly or partially reverse, offset, unwind or
      otherwise terminate one or more of the continuing Designated Transactions
      so that the notional principal amount of the continuing Designated
      Transactions thereafter remaining does not and will not in the future
      (taking into account the scheduled amortisation) exceed the amount of the
      Loan as reducing from time to time thereafter pursuant to Clause
      8.1.

            

    

     

    
      	
              9

            	
              CONDITIONS
      PRECEDENT

            

    

     

    
      	
              9.1

            	
              Documents, fees and no
      default.  Each Lender's obligation to contribute to an
      Advance is subject to the following conditions
  precedent:

            

    

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
      	
              (a)

            	
              that,
      on or before the service of the first Drawdown Notice, the Agent receives
      the documents described in Part A of Schedule 4 in form and substance
      satisfactory to the Agent and its
lawyers;

            

    

     

    
      	
              (b)

            	
              that,
      on or before each Drawdown Date after the first Advance, but prior to the
      making of that subsequent Advance, the Agent
  receives:

            

    

     

    
      	
               
      

            	
              (i)

            	
              evidence
      (which shall include a copy of the relevant invoice or invoices and any
      class stage certification) that the instalment under the Shipbuilding
      Contract to be financed by the Advance is due for payment;
    and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              evidence
      that the Builder has been paid or will be paid that part of the relevant
      instalment to be financed by the relevant Advance which is not itself
      financed by that Advance;

            

    

     

    
      	
              (c)

            	
              that,
      on or before the Drawdown Date of an Advance relating to the delivery
      instalment under the Shipbuilding Contract for Ship
  A:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Agent receives or is satisfied that it will receive on the making of that
      Advance the documents described in Part B of Schedule 4 in form and
      substance satisfactory to it and its lawyers;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Borrowers enter into one or more Designated Transactions fixing the
      interest rate for that Tranche under this Agreement via an interest rate
      swap mechanism for a minimum period of 3 years but otherwise, on terms in
      all respects approved by the Agent, with the authorisation of the Majority
      Lenders;

            

    

     

    
      	
              (d)

            	
              that,
      on or before the Drawdown Date of an Advance relating to the delivery
      instalment under the Shipbuilding Contract for Ship
  B:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Agent receives or is satisfied that it will receive on the making of that
      Advance the documents described in Part C of Schedule 4 in form and
      substance satisfactory to it and its lawyers;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Borrowers enter into one or more Designated Transactions fixing the
      interest rate for that Tranche under this Agreement via an interest rate
      swap mechanism for a minimum period of 3 years but otherwise, on terms in
      all respects approved by the Agent, with the authorisation of the Majority
      Lenders;

            

    

     

    
      	
              (e)

            	
              that,
      on or before the service of the first Drawdown Notice, the Agent has
      received the upfront fee referred to in Clause 20.1 and the first
      instalment of the annual agency fee referred to in Clause 20.1 and has
      received payment of the expenses referred to in Clause
    20.2;

            

    

     

    
      	
              (f)

            	
              that
      both at the date of each Drawdown Notice and at each Drawdown
      Date:

            

    

     

    
      	
               
      

            	
              (i)

            	
              no
      Event of Default or Potential Event of Default has occurred or would
      result from the borrowing of the
Advance;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      representations and warranties in Clause 10.1 and those of any Borrower or
      any Security Party which are set out in the other Finance Documents would
      be true and not misleading if repeated on each of those dates with
      reference to the circumstances then existing;
  and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              none
      of the circumstances contemplated by Clause 5.7 has occurred and is
      continuing;

            

    

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (g)

            	
              that,
      if the ratio set out in Clause 15.1 (with the market value of the Ship to
      which the Advance relates determined as provided in Clause 15.3 on the
      basis of a valuation carried out not more than 2 weeks prior to the
      Drawdown Date) were applied immediately following the making of the
      Advance, the Borrowers would not be obliged to provide additional security
      or prepay part of the Loan under that Clause;
  and

            

    

     

    
      	
              (h)

            	
              that
      the Agent has received, and found to be acceptable to it, any further
      opinions, consents, agreements and documents in connection with the
      Finance Documents which the Agent may, with the authorisation of the
      Majority Lenders, request by notice to the Borrowers prior to the Drawdown
      Date.

            

    

     

    
      	
              9.2

            	
              Waiver of conditions
      precedent.  If the Majority Lenders, at their discretion,
      permit an Advance to be borrowed before certain of the conditions referred
      to in Clause 9.1 are satisfied, the Borrowers shall ensure that those
      conditions are satisfied within 5 Business Days after the Drawdown Date
      (or such longer period as the Agent may, with the authorisation of the
      Majority Lenders, specify).

            

    

     

    
      	
              10

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    
      	
              10.1

            	
              General.  Each
      Borrower represents and warrants to each Creditor Party as
      follows.

            

    

     

    
      	
              10.2

            	
              Status.  Each
      Borrower is duly incorporated and validly existing and in good standing
      under the laws of the Republic of Liberia and is not immune to any legal
      proceedings in such country of
incorporation.

            

    

     

    
      	
              10.3

            	
              Share capital and
      ownership.  Each Borrower has an authorised share capital
      of 500 registered and/or bearer shares of no par value, all of which
      shares have been issued in registered form and the legal title and
      beneficial ownership of all those shares is held, free of any Security
      Interest or other claim, by the
Guarantor.

            

    

     

    
      	
              10.4

            	
              Corporate
      power.

            

    

     

    
      	
              (a)

            	
              Each
      Borrower has the corporate capacity, and has taken all corporate action
      and obtained all consents, licenses and authorisations necessary for
      it:

            

    

     

    
      	
               
      

            	
              (i)

            	
              to
      carry out its business carried on or to be carried on by it and own its
      assets owned or to be owned by it;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              to
      purchase and pay for the Ship to be owned by it under the Shipbuilding
      Contract for that Ship and register that Ship in its name under Maltese
      flag (in the case of Ship A) or Liberian flag (in the case of Ship
      B);

            

    

     

    
      	
               
      

            	
              (iii)

            	
              to
      execute the Finance Documents and the Transaction Documents to which that
      Borrower is a party and the Master Agreements;
  and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              to
      borrow under this Agreement, to enter into Designated Transactions under
      the Master Agreements and to make all the payments contemplated by, and to
      comply with, the Finance Documents and the Transaction Documents to which
      that Borrower is a party and the Master
  Agreements.

            

    

     

    
      	
              (b)

            	
              The
      copies of the constitutional documents of the Borrower delivered to the
      Agent before the date of this Agreement is a true and complete
      copy.

            

    

     

    
      	
              10.5

            	
              Consents in
      force.  All the consents referred to in Clause 10.4
      remain in force and nothing has occurred which makes any of them liable to
      revocation.

            

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    
      	
              10.6

            	
              Legal validity; admissibility
      in evidence; pari passu ranking; effective Security
      Interests.  The Finance Documents and the Transaction
      Documents to which each Borrower is a party and the Master Agreements, do
      now or, as the case may be, will, upon execution and delivery (and, where
      applicable, registration as provided for in the Finance
      Documents):

            

    

     

    
      	
              (a)

            	
              constitute
      that Borrower's legal, valid and binding obligations enforceable against
      that Borrower in accordance with their respective
  terms;

            

    

     

    
      	
              (b)

            	
              are
      admissible in evidence and are in full force and
  effect;

            

    

     

    
      	
              (c)

            	
              rank
      at least pari passu with all its other present and future unsecured
      liabilities, except for liabilities which are mandatorily preferred by
      law; and

            

    

     

    
      	
              (d)

            	
              create
      legal, valid and binding first priority Security Interests enforceable in
      accordance with their respective terms over all the assets to which they,
      by their terms, relate,

            

    

     

    subject
to any relevant insolvency laws affecting creditors' rights
generally.

    

    
      	
              10.7

            	
              No third party Security
      Interests.  Without limiting the generality of Clause
      10.6, at the time of the execution and delivery of each Finance
      Document:

            

    

     

    
      	
              (a)

            	
              each
      Borrower which is a party to that Finance Document will have the right to
      create all the Security Interests which that Finance Document purports to
      create; and

            

    

     

    
      	
              (b)

            	
              no
      third party will have any Security Interest (except for Permitted Security
      Interests) or any other interest, right or claim over, in or in relation
      to any asset to which any such Security Interest, by its terms,
      relates.

            

    

     

    
      	
              10.8

            	
              No
      conflicts.  The execution by each Borrower of each
      Finance Document and each Transaction Document to which it is a party and
      each Master Agreement, and the borrowing by that Borrower of the Loan, and
      its compliance with each Finance Document and each Transaction Document to
      which it is a party and each Master Agreement will not involve or lead to
      a contravention of:

            

    

     

    
      	
              (a)

            	
              any
      law or regulation; or

            

    

     

    
      	
              (b)

            	
              the
      constitutional documents of that Borrower;
or

            

    

     

    
      	
              (c)

            	
              any
      contractual or other obligation or restriction which is binding on that
      Borrower or any of its assets.

            

    

     

    
      	
              10.9

            	
              No withholding taxes; stamp
      duty.  All payments which each Borrower is liable to make
      under the Finance Documents to which it is a party may be made without
      deduction or withholding for or on account of any tax payable under any
      law of any Pertinent Jurisdiction.  No Finance Document is
      subject to any filing or stamp duty in any Pertinent
      Jurisdiction.

            

    

     

    
      	
              10.10

            	
              No
      default.  No Event of Default or Potential Event of
      Default has occurred.

            

    

     

    
      	
              10.11

            	
              Information.  All
      information which has been provided in writing by or on behalf of the
      Borrowers or any Security Party to any Creditor Party in connection with
      any Finance Document satisfied the requirements of Clause 11.5; all
      audited and unaudited accounts which have been so provided satisfied the
      requirements of Clause 11.7; and there has been no material adverse change
      in the financial position or state of affairs of any Borrower from that
      disclosed in the latest of those
accounts.

            

    

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    
      	
              10.12

            	
              No
      litigation.  No legal or administrative action involving
      any Borrower (including action relating to any alleged or actual breach of
      the ISM Code or the ISPS Code) has been commenced or taken or, to any
      Borrower's knowledge, is likely to be commenced or
  taken.

            

    

     

    
      	
              10.13

            	
              Validity and completeness of
      Transaction Documents.  Each Transaction Document
      constitutes valid, binding and enforceable obligations of the respective
      parties thereto in accordance with its terms;
  and:

            

    

     

    
      	
              (a)

            	
              the
      copy of each Transaction Document delivered to the Agent before the date
      of this Agreement is a true and complete copy;
  and

            

    

     

    
      	
              (b)

            	
              no
      amendments or additions to any Transaction Document have been agreed nor
      has the party to any Transaction Document waived any of their respective
      rights under that Transaction
Document.

            

    

     

    
      	
              10.14

            	
              No rebates
      etc.  There is no agreement or understanding to allow or
      pay any rebate, premium, commission, discount or other benefit or payment
      (howsoever described) to any party to a Transaction Document or a third
      party in connection with any Transaction Document, other than as disclosed
      to the Lenders in writing on or prior to the date of this
      Agreement.

            

    

     

    
      	
              10.15

            	
              Compliance with certain
      undertakings.  At the date of this Agreement, the
      Borrowers are in compliance with Clauses 11.2, 11.4, 11.9 and
      11.14.

            

    

     

    
      	
              10.16

            	
              Taxes
      paid.  Each Borrower has paid all taxes applicable to, or
      imposed on or in relation to that Borrower, its business or the Ship owned
      by it.

            

    

     

    
      	
              10.17

            	
              ISM Code and ISPS Code
      compliance.  All requirements of the ISM Code and the
      ISPS Code as they relate to the Borrowers, the Approved Managers and the
      Ships have been complied with.

            

    

     

    
      	
              10.18

            	
              No money
      laundering.  Without prejudice to the generality of
      Clause 2.3, in relation to the borrowing by the Borrowers of the Loan, the
      performance and discharge of their obligations and liabilities under the
      Finance Documents, and the transactions and other arrangements affected or
      contemplated by the Finance Documents to which a Borrower is a party, the
      Borrowers confirm (i) that they are acting for their own account; (ii)
      that they will use the proceeds of the Loan for their own benefit, under
      their full responsibility and exclusively for the purposes specified in
      this Agreement; and (iii) that the foregoing will not involve or lead to a
      contravention of any law, official requirement or other regulatory measure
      or procedure implemented to combat "money laundering" (as defined in
      Article 1 of Directive (91/308) (EEC) of the Council of the European
      Communities).

            

    

     

    
      	
              10.19

            	
              Title and
      ownership.  The Borrower has good title to and is the
      ultimate beneficial owner of each of the assets owned or purported to be
      owned by it.

            

    

     

    
      	
              10.20

            	
              No prior
      business.  The Borrower has not traded or carried on
      business prior to the date of this Agreement other than the entering into
      of the Transaction Documents.

            

    

     

    
      	
              10.21

            	
              Employees and pension scheme
      obligations.  The Borrower does not have any employees or
      obligations in respect of any pensions scheme save for, and in relation
      to, the master, officers and crew of the Ship owned or to be owned by
      it.

            

    

     

    
      	
              10.22

            	
              Submission to jurisdiction and
      choice of laws.  Each submission to jurisdiction, and
      choice of law, by the Borrower contained in any Finance Document is
      effective.

            

    

     

    
      	
              10.23

            	
              No adverse consequences in
      jurisdiction of incorporation.  No Creditor Party will be
      deemed to be resident, domiciled, carrying on business or subject to
      taxation in the

            

    

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    Republic
of Liberia by reason only of the negotiation, preparation, execution,
performance, enforcement of, and/or receipt of any payment due from the Borrower
under any Finance Document.

     

    
      	
              10.24

            	
              Accounting reference
      date.  The accounting reference date for the Borrower is
      31 December.

            

    

     

    
      	
              10.25

            	
              Repetition of representations
      and warranties.  The representations and warranties set
      out in this Clause 10 (except Clause 10.12) will be deemed to be repeated
      by each Borrower to each Creditor Party at the end of each Interest Period
      with reference to the circumstances then
  existing.

            

    

     

    
      	
              11

            	
              GENERAL
      UNDERTAKINGS

            

    

     

    
      	
              11.1

            	
              General.  Each
      Borrower undertakes with each Creditor Party to comply with the following
      provisions of this Clause 11 at all times during the Security Period
      except as the Agent may, with the authorisation of the Majority Lenders,
      otherwise permit.

            

    

     

    
      	
              11.2

            	
              Title; negative
      pledge.  Each Borrower
will:

            

    

     

    
      	
              (a)

            	
              hold
      the legal title to, and own the entire beneficial interest in the Ship
      owned by it, her Insurances and Earnings, free from all Security Interests
      and other interests and rights of every kind, except for those created by
      the Finance Documents and the effect of assignments contained in the
      Finance Documents and except for Permitted Security Interests;
      and

            

    

     

    
      	
              (b)

            	
              not
      create or permit to arise any Security Interest (except for Permitted
      Security Interests) over any other asset, present or future (including,
      but not limited to, that Borrower's rights against a Swap Counterparty
      under a Master Agreement or all or any part of that Borrower's interest in
      any amount payable to that Borrower by a Swap Counterparty under a Master
      Agreement).

            

    

     

    
      	
              11.3

            	
              No disposal of
      assets.  No Borrower will transfer, lease or otherwise
      dispose of:

            

    

     

    
      	
              (a)

            	
              all
      or a substantial part of its assets, whether by one transaction or a
      number of transactions, whether related or not;
  or

            

    

     

    
      	
              (b)

            	
              any
      debt payable to it or any other right (present, future or contingent
      right) to receive a payment, including any right to damages or
      compensation,

            

    

     

    but
paragraph (a) does not apply to any charter of a Ship as to which Clause 14.12
applies.

     

    
      	
              11.4

            	
              No other liabilities or
      obligations to be incurred.  No Borrower will incur any
      liability or obligation except:

            

    

     

    
      	
              (a)

            	
              liabilities
      and obligations under the Transaction Documents and the Finance Documents
      to which it is a party;

            

    

     

    
      	
              (b)

            	
              liabilities
      or obligations reasonably incurred in the ordinary course of operating and
      chartering the Ship owned by it (and then only if any such Financial
      Indebtedness is unsecured trade credit with an aggregate amount not
      exceeding $500,000 (or the equivalent in any other currency) at any time);
      and

            

    

     

    
      	
              (c)

            	
              Designated
      Transactions.

            

    

     

    
      	
              11.5

            	
              Information provided to be
      accurate.  All financial and other information which is
      provided in writing by or on behalf of a Borrower under or in connection
      with any

            

    

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    Finance
Document will be true and not misleading and will not omit any material fact or
consideration.

     

    
      	
              11.6

            	
              Provision
      of financial statements.

            

    

     

    
      	
              (a)

            	
              Each
      Borrower will send to the Agent:

            

    

     

    
      	
               
      

            	
              (i)

            	
              as
      soon as possible, but in no event later than 180 days after the end of
      each financial year of that Borrower, the audited accounts of that
      Borrower (together with updated details of all off-balance sheet and time
      charter hire commitments of the Borrower);
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              as
      soon as possible, but in no event later than 90 days after the end of each
      quarter in each financial year of that
Borrower:

            

    

     

    
      	
               
      

            	
              (A)

            	
              unaudited
      accounts of that Borrower which are certified as to their correctness by
      the chief financial officer of that Borrower;
  and

            

    

     

    
      	
               
      

            	
              (B)

            	
              management
      accounts in a format approved by the Agent which show the results of the
      operation of the Ship owned by it during the preceding financial quarter
      and which are certified as to their correctness by the chief financial
      officer of that Borrower.

            

    

     

    
      	
              (b)

            	
              Each
      Borrower will procure that there is sent to the Agent in relation to each
      Charterer and each Charter
Guarantor:

            

    

     

    
      	
               
      

            	
              (i)

            	
              as
      soon as possible, and the Borrower shall use its best efforts to procure
      that in no event later than 180 days after the end of each financial year
      of that company there is sent to the Agent, the audited consolidated
      accounts of that company and its subsidiaries and audited individual
      accounts of that company (together with in either case updated details of
      all off-balance sheet and time charter hire commitments of that company);
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              as
      soon as possible, and the Borrower shall use its best efforts to procure
      that in no event later than 90 days after the end of each half-year period
      in each financial year of that company there is sent to the
      Agent:

            

    

     

    
      	
               
      

            	
              (A)

            	
              unaudited
      consolidated accounts of that company and its subsidiaries and unaudited
      individual accounts of that company, each of which are certified as to
      their correctness by the chief financial officer of that company;
      and

            

    

     

    
      	
               
      

            	
              (B)

            	
              management
      accounts in a format approved by the Agent which show the results of the
      operation of the Ship chartered by it (or, as the case may be, which is
      the subject of a guarantee issued by it) during the preceding financial
      half-year and which are certified as to their correctness by the chief
      financial officer of that company.

            

    

     

    
      	
              11.7

            	
              Form of financial
      statements.  All accounts (audited and unaudited)
      delivered under Clause 11.6 will:

            

    

     

    
      	
              (a)

            	
              be
      prepared in accordance with all applicable laws and GAAP (or, in the case
      of a Charterer or a Charter Guarantor, such other accounting principles
      approved by the Agent) consistently
applied;

            

    

     

    
      	
              (b)

            	
              give
      a true and fair view of the state of affairs of the relevant company and
      (if applicable) its subsidiaries at the date of those accounts and of its
      or their profit for the period to which those accounts relate;
      and

            

    

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              fully
      disclose or provide for all significant liabilities of the relevant
      company and (if applicable) its
subsidiaries.

            

    

     

    
      	
              11.8

            	
              Shareholder and creditor
      notices.  Each Borrower will send the Agent, at the same
      time as they are despatched, copies of all communications which are
      despatched to that Borrower's shareholders or creditors or any class of
      them.

            

    

     

    
      	
              11.9

            	
              Consents
      and compliance with laws.

            

    

     

    
      	
              (a)

            	
              Each
      Borrower will maintain in force and promptly obtain or renew, and will
      promptly send certified copies to the Agent of, all consents
      required:

            

    

     

    
      	
               
      

            	
              (i)

            	
              for
      that Borrower to perform its obligations under any Finance Document or any
      Transaction Document to which it is a party or any Master
      Agreement;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              for
      the validity or enforceability of any Finance Document or any Transaction
      Document to which it is a party or any Master
  Agreement;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              for
      that Borrower to continue to own and operate the Ship and any other asset
      owned by it;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              for
      that Borrower to continue to carry on its business as currently
      conducted,

            

    

     

    and that
Borrower will comply with the terms of all such consents.

    

    
      	
              (b)

            	
              Without
      prejudice to the other obligations under the Finance Documents, each
      Borrower is in compliance, and shall comply in all respects, with all laws
      and regulations to which it may be subject including, without limitation,
      all Environmental Laws and all intellectual property
  laws.

            

    

     

    
      	
              11.10

            	
              Maintenance of Security
      Interests.  Each Borrower
will:

            

    

     

    
      	
              (a)

            	
              at
      its own cost, do all that is legally possible to ensure that any Finance
      Document validly creates the obligations and the Security Interests which
      it purports to create; and

            

    

     

    
      	
              (b)

            	
              without
      limiting the generality of paragraph (a), at its own cost, promptly
      register, file, record or enrol any Finance Document with any court or
      authority in all Pertinent Jurisdictions, pay any stamp, registration or
      similar tax in all Pertinent Jurisdictions in respect of any Finance
      Document, give any notice or take any other step which, in the opinion of
      the Majority Lenders, is or has become necessary or desirable for any
      Finance Document to be valid, enforceable or admissible in evidence or to
      ensure or protect the priority of any Security Interest which it
      creates.

            

    

     

    
      	
              11.11

            	
              Notification of
      litigation.  Each Borrower will provide the Agent with
      details of any legal or administrative action involving that Borrower, any
      Security Party, any Approved Manager or the Ship owned by it, the Earnings
      or the Insurances as soon as such action is instituted or it becomes
      apparent to that Borrower that it is likely to be instituted, unless it is
      clear that the legal or administrative action cannot be considered
      material in the context of any Finance
Document.

            

    

     

    
      	
              11.12

            	
              No amendment to Transaction
      Documents.  Neither Borrower will agree to any amendment
      or supplement to, nor waive nor fail to enforce, any Transaction Document
      or any of its provisions.

            

    

     

    
      	
              11.13

            	
              No amendment to Master
      Agreements.  Neither Borrower will agree to any amendment
      or supplement to, or waive or fail to enforce, any Master Agreement or any
      of its provisions.

            

    

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    
      	
              11.14

            	
              Principal place of
      business.  Each Borrower will maintain its place of
      business, and keep its corporate documents and records, at the address
      stated at the commencement of this Agreement; and no Borrower will
      establish, or do anything as a result of which it would be deemed to have,
      a place of business in any country other than
  Greece.

            

    

     

    
      	
              11.15

            	
              Confirmation of no
      default.  Each Borrower will, within 2 Business Days
      after service by the Agent of a written request, serve on the Agent a
      notice which is signed by 2 directors of that Borrower and
      which:

            

    

     

    
      	
              (a)

            	
              states
      that no Event of Default or Potential Event of Default has occurred;
      or

            

    

     

    
      	
              (b)

            	
              states
      that no Event of Default or Potential Event of Default has occurred,
      except for a specified event or matter, of which all material details are
      given.

            

    

     

    The Agent
may serve requests under this Clause 11.15 from time to time but only if asked
to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of
the Loan or (if no Advances have been made) Commitments exceeding 10 per cent.
of the Total Commitments; and this Clause 11.15 does not affect the Borrowers'
obligations under Clause 11.16.

    

    
      	
              11.16

            	
              Notification of
      default.  Each Borrower will notify the Agent as soon as
      that Borrower becomes aware of:

            

    

     

    
      	
              (a)

            	
              the
      occurrence of an Event of Default or a Potential Event of Default;
      or

            

    

     

    
      	
              (b)

            	
              any
      matter which indicates that an Event of Default or a Potential Event of
      Default may have occurred,

            

    

     

    
      	
               
      

            	
              and
      will keep the Agent fully up-to-date with all
  developments.

            

    

    

    
      	
              11.17

            	
              Provision of further
      information.  Each Borrower will, as soon as practicable
      after receiving the request, provide the Agent with any additional
      financial or other information
relating:

            

    

     

    
      	
              (a)

            	
              to
      that Borrower, the Ship owned by it, the Earnings or the Insurances;
      or

            

    

     

    
      	
              (b)

            	
              to
      any other matter relevant to, or to any provision of, a Finance
      Document,

            

    

     

    which may
be reasonably requested by the Agent, the Security Trustee, any Lender or any
Swap Bank at any time including, without limitation, management accounts and
forward-looking budgets and projections.

    

    
      	
              11.18

            	
              Provision of copies and
      translation of documents.  Each Borrower will supply the
      Agent with a sufficient number of copies of the documents referred to
      above to provide 1 copy for each Creditor Party; and if the Agent so
      requires in respect of any of those documents, the Borrowers will provide
      a certified English translation prepared by a translator approved by the
      Agent.

            

    

     

    
      	
              11.19

            	
              "Know your customer"
      checks.  If:

            

    

     

    
      	
              (a)

            	
              the
      introduction of or any change in (or in the interpretation, administration
      or application of) any law or regulation made after the date of this
      Agreement;

            

    

     

    
      	
              (b)

            	
              any
      change in the status of the Borrowers or any Security Party after the date
      of this Agreement; or

            

    

     

    
      	
              (c)

            	
              a
      proposed assignment or transfer by a Lender of any of its rights and
      obligations under this Agreement to a party that is not a Lender prior to
      such assignment or transfer,

            

    

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    obliges
the Agent or any Lender (or, in the case of paragraph (c), any prospective new
Lender) to comply with "know your customer" or similar identification procedures
in circumstances where the necessary information is not already available to it,
the Borrowers shall promptly upon the request of the Agent or the Lender
concerned supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Agent (for itself or on behalf of any
Lender) or the Lender concerned (for itself or, in the case of the event
described in paragraph (c), on behalf of any prospective new Lender) in order
for the Agent, the Lender concerned or, in the case of the event described in
paragraph (c), any prospective new Lender to carry out and be satisfied it has
complied with all necessary "know your customer" or other similar checks under
all applicable laws and regulations pursuant to the transactions contemplated in
the Finance Documents.

     

    
      	
              11.20

            	
              Splitting
      of the Loan.

            

    

     

    
      	
              (a)

            	
              The
      Borrowers agree that the Agent (acting with the authorisation of the
      Lenders) has the right at any time to request that the Loan is split into
      two tranches, which may or may not be ranked pari passu and which may or
      may not have identical pricing, so long as the blended margin on the Loan
      as split is equal to the Margin and the repayment profile of each tranche
      is the same as that of the Loan prior to the
  split.

            

    

     

    
      	
              (b)

            	
              If
      the Agent notifies the Borrowers that the Agent is exercising the right in
      this Clause:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Borrowers will, and will procure that each Security Party will. at the
      Borrowers' cost promptly enter into any documentation in a form reasonably
      required by the Agent to implement such split required by the Agent
      (including, without limitation, any documentation required to amend the
      Finance Documents and to secure the Borrower's and the Security Parties'
      liabilities and obligations under the Finance Documents as amended and/or
      supplemented);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Borrower shall also at the same time procure that the Agent is promptly
      provided with favourable legal opinions from lawyers appointed by the
      Agent on such matters concerning the laws of such relevant jurisdictions
      as the Agent may require; corporate authorities of the Borrowers and the
      Security Parties each in a form approved by the Agent authorising the
      execution of any documentation; a process agent letter confirming the
      acceptance of appointment of any process agent appointed by the Borrowers
      and the Security Parties; and evidence that any filings required in
      relation to any Borrower and/or any Security Party and/or any new Finance
      Document have been made; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Borrowers shall fully indemnify the Agent and each Lender on the Agent's
      demand and the Security Trustee on its demand in respect of all reasonable
      expenses incurred by that Creditor Party as a result of or in connection
      with such splitting of the Loan.

            

    

     

    
      	
              11.21

            	
              Subordination.  Without
      prejudice to the generality of Clause 11.4, each Borrower shall procure
      that any claim of the Guarantor and/or any Approved Manager against either
      Borrower shall at all times be fully subordinated to the Secured
      Liabilities to the satisfaction of the
Agent.

            

    

     

    
      	
              11.22

            	
              Bank account
      statements.  Each Borrower will procure that the Agent is
      sent at its request all of the bank statement for each Earnings Account
      (with such statements to be, if available, in electronic
      format).

            

    

     

    
      	
              11.23

            	
              Capital
      expenditure.  The Borrowers will not, and shall procure
      that none of their respective subsidiaries (whether direct or indirect)
      will, acquire or permit to be acquired any investments or other assets, or
      make or permit to be made any capital expenditure save for any investment
      or any other asset acquired by, or any capital expenditure by,
      a

            

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    Borrower
in each case relating to the repair or upgrade of the Ship owned by that
Borrower for an aggregate consideration (taking into account all such
acquisitions and expenditure by that Borrower) of no more than $500,000 during
each calendar year, whether by one transaction or a number of transactions,
whether related or not.

     

    
      	
              11.24

            	
              No petition for
      insolvency.  Each Borrower will procure that each of its
      material creditors will not petition for that Borrower's insolvency nor
      take any related proceedings.

            

    

     

    
      	
              11.25

            	
              Separateness.  Each
      Borrower will:

            

    

     

    
      	
              (a)

            	
              keep
      its own separate books and records;

            

    

     

    
      	
              (b)

            	
              maintain
      its own separate accounts;

            

    

     

    
      	
              (c)

            	
              not
      co-mingle its assets with any other
person;

            

    

     

    
      	
              (d)

            	
              conduct
      business in its own name;

            

    

     

    
      	
              (e)

            	
              observe
      all corporate and other formalities required by its constitutional
      documents;

            

    

     

    
      	
              (f)

            	
              prepare
      its own separate financial
statements;

            

    

     

    
      	
              (g)

            	
              pay
      its liabilities out of its own
funds;

            

    

     

    
      	
              (h)

            	
              maintain
      adequate capital for the business carried out or to be carried out by that
      Borrower;

            

    

     

    
      	
              (i)

            	
              not
      pledge any Creditor Party's credit;

            

    

     

    
      	
              (j)

            	
              (if
      applicable) use its own separate stationery, invoices and cheque
      books;

            

    

     

    
      	
              (k)

            	
              hold
      itself out as a separate legal entity;
and

            

    

     

    
      	
              (l)

            	
              correct
      any known misunderstanding regarding its separate
  identity.

            

    

     

    
      	
              11.26

            	
              No VAT
      group.  Neither Borrower shall be a member of a VAT
      (value added tax) group.

            

    

     

    
      	
              11.27

            	
              Change of ownership or control
      of a Charter Guarantor.  As soon as it becomes aware,
      each Borrower shall notify (and each Borrower shall procure that the
      Guarantor notifies) the Agent of any material change in the beneficial or
      legal ownership of any of the shares in either Charter Guarantor or in the
      ultimate control of the voting rights attaching to any of those
      shares.

            

    

     

    
      	
              11.28

            	
              Charter Assignments and
      Quadripartite Agreements.  The Borrowers shall procure
      that no later than 90 days after the first Drawdown Date (or such later
      date as the Agent may, with the authorisation of the Lenders, agree with
      the Borrowers) the Agent receives in relation to each Ship the following
      documents and evidence in form and substance satisfactory to the Agent and
      its lawyers:

            

    

     

    
      	
              (a)

            	
              duly
      executed originals of the Quadripartite Agreement and the Charter
      Assignment (and of each document to be delivered by each of
      them);

            

    

     

    
      	
              (b)

            	
              such
      documentary evidence as the Agent and its legal advisers may require in
      relation to the due authorisation and execution by any party to that
      Quadripartite Agreement or that Charter Assignment of that document and of
      all documents to be executed by that party under that document;
      and

            

    

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              in
      relation to each of that Quadripartite Agreement and that Charter
      Agreement, such legal opinions required by the Agent and each in a form
      approved by the Agent.

            

    

     

    
      	
              11.29

            	
              Charters and Charter
      Guarantees.  The Borrowers shall procure that no later
      than 90 days after the first Drawdown Date (or such later date as the
      Agent may, with the authorisation of the Lenders, agree with the
      Borrowers) the Agent receives the following documents and evidence in form
      and substance satisfactory to the Agent and its
  lawyers:

            

    

     

    
      	
              (a)

            	
              copies
      of each Charter and each Charter Guarantee and of all documents signed or
      issued by any party to that document under or in connection with
      it;

            

    

     

    
      	
              (b)

            	
              evidence
      that the relevant Borrower has been nominated as the charterer under each
      Charter;

            

    

     

    
      	
              (c)

            	
              evidence
      that the relevant Borrower is the beneficiary under each Charter
      Guarantee;

            

    

     

    
      	
              (d)

            	
              such
      documentary evidence as the Agent and its legal advisers may require in
      relation to the due authorisation and execution by any party to a Charter
      or a Charter Guarantee of that document and of all documents to be
      executed by that party under that document;
and

            

    

     

    
      	
              (e)

            	
              in
      relation to each Charter and each Charter Guarantee, such legal opinions
      required by the Agent and each in a form approved by the
      Agent.

            

    

     

    
      	
              12

            	
              CORPORATE
      UNDERTAKINGS

            

    

     

    
      	
              12.1

            	
              General.  Each
      Borrower also undertakes with each Creditor Party to comply with the
      following provisions of this Clause 12 at all times during the Security
      Period except as the Agent may, with the authorisation of the Majority
      Lenders, otherwise permit.

            

    

     

    
      	
              12.2

            	
              Maintenance of
      status.  Each Borrower will maintain its separate
      corporate existence and remain in good standing under the laws of the
      Republic of Liberia.

            

    

     

    
      	
              12.3

            	
              Negative
      undertakings.  No Borrower
  will:

            

    

     

    
      	
              (a)

            	
              carry
      on any business other than the ownership, chartering and operation of the
      Ship owned by it; or

            

    

     

    
      	
              (b)

            	
              change
      its constitutional documents; or

            

    

     

    
      	
              (c)

            	
              pay
      any dividend or make any other form of distribution (whether of a revenue
      or capital nature or otherwise) or effect any form of redemption, purchase
      or return of share capital or (re)pay any principal, interest or any other
      amount on any loan from a shareholder or any other connected person;
      or

            

    

     

    
      	
              (d)

            	
              provide
      any form of credit or financial assistance to any person or enter into any
      transaction with or involving any person which is not in the normal course
      of business of that Borrower or on terms which are, in any respect, less
      favourable to that Borrower than those which it could obtain in a bargain
      made at arms' length;

            

    

     

    
      	
              (e)

            	
              open
      or maintain any account with any bank or financial institution except any
      account with a bank or financial institution approved by the Agent and
      then only Provided
      that a Security Interest created by an Account Security Deed exists
      over such account;

            

    

     

    
      	
              (f)

            	
              issue,
      allot or grant any person a right to any shares in its capital or
      repurchase or reduce its issued share
capital;

            

    

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    
      	
              (g)

            	
              acquire
      any shares or other securities other than US or UK Treasury bills and
      certificates of deposit issued by major North American or European banks,
      or enter into any transaction in a derivative other than Designated
      Transactions; or

            

    

     

    
      	
              (h)

            	
              enter
      into any form of amalgamation, merger or de-merger or any form of
      reconstruction or reorganisation.

            

    

     

    
      	
              13

            	
              INSURANCE

            

    

     

    
      	
              13.1

            	
              General.  Each
      Borrower also undertakes with each Creditor Party to comply with the
      following provisions of this Clause 13 at all times during the Security
      Period (after the Ship to be owned by it has been delivered to it under
      the Shipbuilding Contract for that Ship) except as the Agent may, with the
      authorisation of the Majority Lenders, otherwise permit Provided that to the
      extent that a Charterer, by its performance of the Charter of a Ship,
      performs and discharges the obligations of the Borrower owning that Ship
      contained in this Clause, then such performance and discharge shall, to
      that extent, be deemed due performance and discharge of that Borrower's
      corresponding obligations under this
Clause.

            

    

     

    
      	
              13.2

            	
              Maintenance of obligatory
      insurances.  Each Borrower shall keep the Ship owned by
      it insured at the expense of that Borrower
  against:

            

    

     

    
      	
              (a)

            	
              fire
      and usual marine risks (including hull and machinery and excess
      risks);

            

    

     

    
      	
              (b)

            	
              war
      risks;

            

    

     

    
      	
              (c)

            	
              protection
      and indemnity risks (including, without limitation, freight, demurrage and
      defence cover);

            

    

     

    
      	
              (d)

            	
              risk
      of loss of Earnings; and

            

    

     

    
      	
              (e)

            	
              any
      other risks against which the Security Trustee considers, having regard to
      practices and other circumstances prevailing at the relevant time, it
      would in the opinion of the Security Trustee be reasonable for that
      Borrower to insure and which are specified by the Security Trustee by
      notice to that Borrower.

            

    

     

    
      	
              13.3

            	
              Terms of obligatory
      insurances.  Each Borrower shall effect such
      insurances:

            

    

     

    
      	
              (a)

            	
              in
      Dollars;

            

    

     

    
      	
              (b)

            	
              in
      the case of fire and usual marine risks and war risks, in an amount on an
      agreed value basis (determined at the time of taking out such insurances
      or upon the latest renewal) at least the greater of (i) together with the
      Ship owned by the other Borrower, 120 per cent. of the aggregate of the
      Loan and the Swap Exposure of each Swap Counterparty and (ii) the market
      value of the Ship owned by it;

            

    

     

    
      	
              (c)

            	
              in
      the case of oil pollution liability risks, for an aggregate amount equal
      to the highest level of cover from time to time available under basic
      protection and indemnity club entry and in the international marine
      insurance market;

            

    

     

    
      	
              (d)

            	
              in
      relation to protection and indemnity risks in respect of the full tonnage
      of the Ship owned by it;

            

    

     

    
      	
              (e)

            	
              in
      the case of risk of loss of Earnings insurance, in an amount of at least
      equal to the daily rate under the Charter of the Ship owned by it for the
      best market cover available and a minimum waiting
  period;

            

    

     

    
      	
              (f)

            	
              on
      approved terms; and

            

    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    
      	
              (g)

            	
              through
      approved brokers and with approved insurance companies and/or underwriters
      or, in the case of war risks and protection and indemnity risks, in
      approved war risks and protection and indemnity risks
      associations.

            

    

     

    
      	
              13.4

            	
              Further protections for the
      Creditor Parties.  In addition to the terms set out in
      Clause 13.3, each Borrower shall procure that the obligatory insurances
      shall:

            

    

     

    
      	
              (a)

            	
              whenever
      the Security Trustee requires, name (or be amended to name) the Security
      Trustee as additional named assured for its rights and interests,
      warranted no operational interest and with full waiver of rights of
      subrogation against the Security Trustee, but without the Security Trustee
      thereby being liable to pay (but having the right to pay) premiums, calls
      or other assessments in respect of such
  insurance;

            

    

     

    
      	
              (b)

            	
              name
      the Security Trustee as loss payee with such directions for payment as the
      Security Trustee may specify;

            

    

     

    
      	
              (c)

            	
              provide
      that all payments by or on behalf of the insurers under the obligatory
      insurances to the Security Trustee shall be made without set-off,
      counterclaim or deductions or condition
  whatsoever;

            

    

     

    
      	
              (d)

            	
              provide
      that such obligatory insurances shall be primary without right of
      contribution from other insurances which may be carried by the Security
      Trustee or any other Creditor Party;
and

            

    

     

    
      	
              (e)

            	
              provide
      that the Security Trustee may make proof of loss if the Borrowers fail to
      do so.

            

    

     

    
      	
              13.5

            	
              Renewal of obligatory
      insurances.  Each Borrower
  shall:

            

    

     

    
      	
              (a)

            	
              at
      least 21 days before the expiry of any obligatory insurance effected by
      it:

            

    

     

    
      	
               
      

            	
              (i)

            	
              notify
      the Security Trustee of the brokers (or other insurers) and any protection
      and indemnity or war risks association through or with whom that Borrower
      proposes to renew that obligatory insurance and of the proposed terms of
      renewal; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              obtain
      the Security Trustee's approval to the matters referred to in paragraph
      (i);

            

    

     

    
      	
              (b)

            	
              at
      least 14 days before the expiry of any obligatory insurance effected by
      it, renew that obligatory insurance in accordance with the Security
      Trustee's approval pursuant to paragraph (a);
  and

            

    

     

    
      	
              (c)

            	
              procure
      that the approved brokers and/or the war risks and protection and
      indemnity associations with which such a renewal is effected shall
      promptly after the renewal notify the Security Trustee in writing of the
      terms and conditions of the
renewal.

            

    

     

    
      	
              13.6

            	
              Copies of policies; letters of
      undertaking.  Each Borrower shall ensure that all
      approved brokers provide the Security Trustee with pro forma copies of all
      policies relating to the obligatory insurances which they are to effect or
      renew and of a letter or letters or undertaking in a form required by the
      Security Trustee and including undertakings by the approved brokers
      that:

            

    

     

    
      	
              (a)

            	
              they
      will have endorsed on each policy, immediately upon issue, a loss payable
      clause and a notice of assignment complying with the provisions of Clause
      13.4;

            

    

     

    
      	
              (b)

            	
              they
      will hold such policies, and the benefit of such insurances, to the order
      of the Security Trustee in accordance with the said loss payable
      clause;

            

    

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              they
      will advise the Security Trustee immediately of any material change to the
      terms of the obligatory insurances;

            

    

     

    
      	
              (d)

            	
              they
      will notify the Security Trustee, not less than 14 days before the expiry
      of the obligatory insurances, in the event of their not having received
      notice of renewal instructions from that Borrower or its agents and, in
      the event of their receiving instructions to renew, they will promptly
      notify the Security Trustee of the terms of the instructions;
      and

            

    

     

    
      	
              (e)

            	
              they
      will not set off against any sum recoverable in respect of a claim
      relating to the Ship owned by that Borrower under such obligatory
      insurances any premiums or other amounts due to them or any other person
      whether in respect of that Ship or otherwise, they waive any lien on the
      policies, or any sums received under them, which they might have in
      respect of such premiums or other amounts, and they will not cancel such
      obligatory insurances by reason of non-payment of such premiums or other
      amounts, and will arrange for a separate policy to be issued in respect of
      that Ship forthwith upon being so requested by the Security
      Trustee.

            

    

     

    
      	
              13.7

            	
              Copies of certificates of
      entry.  Each Borrower shall ensure that any protection
      and indemnity and/or war risks associations in which the Ship owned by it
      is entered provides the Security Trustee
with:

            

    

     

    
      	
              (a)

            	
              a
      certified copy of the certificate of entry for that
  Ship;

            

    

     

    
      	
              (b)

            	
              a
      letter or letters of undertaking in such form as may be required by the
      Security Trustee; and

            

    

     

    
      	
              (c)

            	
              a
      certified copy of each certificate of financial responsibility for
      pollution by oil or other Environmentally Sensitive Material issued by the
      relevant certifying authority in relation to that
  Ship.

            

    

     

    
      	
              13.8

            	
              Deposit of original
      policies.  Each Borrower shall ensure that all policies
      relating to obligatory insurances effected by it are deposited with the
      approved brokers through which the insurances are effected or
      renewed.

            

    

     

    
      	
              13.9

            	
              Payment of
      premiums.  Each Borrower shall punctually pay all
      premiums or other sums payable in respect of the obligatory insurances
      effected by it and produce all relevant receipts when so required by the
      Security Trustee.

            

    

     

    
      	
              13.10

            	
              Guarantees.  Each
      Borrower shall ensure that any guarantees required by a protection and
      indemnity or war risks association are promptly issued and remain in full
      force and effect.

            

    

     

    
      	
              13.11

            	
              Compliance with terms of
      insurances.  No Borrower shall do nor omit to do (nor
      permit to be done or not to be done) any act or thing which would or might
      render any obligatory insurance invalid, void, voidable or unenforceable
      or render any sum payable under an obligatory insurance repayable in whole
      or in part; and, in particular:

            

    

     

    
      	
              (a)

            	
              each
      Borrower shall take all necessary action and comply with all requirements
      which may from time to time be applicable to the obligatory insurances,
      and (without limiting the obligation contained in Clause 13.6(c)) ensure
      that the obligatory insurances are not made subject to any exclusions or
      qualifications to which the Security Trustee has not given its prior
      approval;

            

    

     

    
      	
              (b)

            	
              no
      Borrower shall make any changes relating to the classification or
      classification society or manager or operator of the Ship owned by it
      approved by the underwriters of the obligatory
  insurances;

            

    

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              each
      Borrower shall make (and promptly supply copies to the Agent of) all
      quarterly or other voyage declarations which may be required by the
      protection and indemnity risks association in which the Ship owned by it
      is entered to maintain cover for trading to the United States of America
      and Exclusive Economic Zone (as defined in the United States Oil Pollution
      Act 1990 or any other applicable legislation);
  and

            

    

     

    
      	
              (d)

            	
              no
      Borrower shall employ the Ship owned by it, nor allow it to be employed,
      otherwise than in conformity with the terms and conditions of the
      obligatory insurances, without first obtaining the consent of the insurers
      and complying with any requirements (as to extra premium or otherwise)
      which the insurers specify.

            

    

     

    
      	
              13.12

            	
              Alteration to terms of
      insurances.  No Borrower shall either make or agree to
      any alteration to the terms of any obligatory insurance nor waive any
      right relating to any obligatory
insurance.

            

    

     

    
      	
              13.13

            	
              Settlement of
      claims.  No Borrower shall settle, compromise or abandon
      any claim under any obligatory insurance for Total Loss or for a Major
      Casualty, and shall do all things necessary and provide all documents,
      evidence and information to enable the Security Trustee to collect or
      recover any moneys which at any time become payable in respect of the
      obligatory insurances.

            

    

     

    
      	
              13.14

            	
              Provision of copies of
      communications.  Each Borrower shall provide the Security
      Trustee, at the time of each such communication, copies of all written
      communications between that Borrower
and:

            

    

     

    
      	
              (a)

            	
              the
      approved brokers;

            

    

     

    
      	
              (b)

            	
              the
      approved protection and indemnity and/or war risks associations;
      and

            

    

     

    
      	
              (c)

            	
              the
      approved insurance companies and/or underwriters, which relate directly or
      indirectly to:

            

    

     

    
      	
               
      

            	
              (i)

            	
              that
      Borrower's obligations relating to the obligatory insurances including,
      without limitation, all requisite declarations and payments of additional
      premiums or calls; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      credit arrangements made between that Borrower and any of the persons
      referred to in paragraphs (a) or (b) relating wholly or partly to the
      effecting or maintenance of the obligatory
  insurances.

            

    

     

    
      	
              13.15

            	
              Provision of
      information.  In addition, each Borrower shall promptly
      provide the Security Trustee (or any persons which it may designate) with
      any information which the Security Trustee (or any such designated person)
      requests for the purpose of:

            

    

     

    
      	
              (a)

            	
              obtaining
      or preparing any report from an independent marine insurance broker as to
      the adequacy of the obligatory insurances effected or proposed to be
      effected; and/or

            

    

     

    
      	
              (b)

            	
              effecting,
      maintaining or renewing any such insurances as are referred to in Clause
      13.16 or dealing with or considering any matters relating to any such
      insurances,

            

    

     

    
      	
               
      

            	
              and
      the Borrowers shall, forthwith upon demand, indemnify the Security Trustee
      in respect of all fees and other expenses incurred by or for the account
      of the Security Trustee in connection with any such report as is referred
      to in paragraph (a).

            

    

    

    
      	
              13.16

            	
              Mortgagee's interest and
      additional perils insurances.  The Security Trustee shall
      be entitled from time to time to effect, maintain and renew a mortgagee's
      interest additional perils insurance and a mortgagee's interest marine
      insurance in an amount not more than 120 per cent. of the aggregate of the
      Loan and the Swap Exposure of each
Swap

            

    

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    Counterparty
but otherwise, on such terms, through such insurers and generally in such manner
as the Security Trustee may from time to time consider appropriate and the
Borrowers shall upon demand fully indemnify the Security Trustee in respect of
all premiums and other expenses which are incurred in connection with or with a
view to effecting, maintaining or renewing any such insurance or dealing with,
or considering, any matter arising out of any such insurance.

     

    
      	
              14

            	
              SHIP
      COVENANTS

            

    

     

    
      	
              14.1

            	
              General.  Each
      Borrower also undertakes with each Creditor Party to comply with the
      following provisions of this Clause 14 at all times during the Security
      Period (after the Ship to be owned by it has been delivered to it under
      the Shipbuilding Contract for that Ship) except as the Agent, with the
      authorisation of the Majority Lenders (such consent not to be unreasonably
      withheld in the case of a change of flag, class, management or bareboat
      charter and subject to such conditions as the Majority Lenders may
      reasonably require), may otherwise permit Provided that to the
      extent that a Charterer, by its performance of the Charter of a Ship,
      performs and discharges the obligations of the Borrower owning that Ship
      contained in this Clause, then such performance and discharge shall, to
      that extent, be deemed due performance and discharge of that Borrower's
      corresponding obligations under this
Clause.

            

    

     

    
      	
              14.2

            	
              Ship's name and
      registration.  Each Borrower shall keep the Ship owned by
      it registered in its name as a Maltese ship (in the case of Ship A) or a
      Liberian ship (in the case of Ship B); shall not do, omit to do or allow
      to be done anything as a result of which such registration might be
      cancelled or imperilled; and shall not change the name or port of registry
      of the Ship owned by it Provided that if the
      Agent notifies the Borrower that the country of the flag of either Ship is
      affected by instability (as determined by the Majority Lenders acting
      reasonably), the Borrower shall within 30 days of such notification
      procure that that Ship is reflagged to another flag approved by the
      Majority Lenders and shall also:

            

    

     

    
      	
              (a)

            	
              execute
      and register a first priority ship mortgage (and, if applicable,
      collateral deed of covenant) on that Ship in favour of the Security
      Trustee or the Lenders in a form approved by the Security
      Trustee;

            

    

     

    
      	
              (b)

            	
              execute
      a supplement to this Agreement and the other Finance Documents in a form
      approved by the Security Trustee making necessary amendments to this
      Agreement and the other Finance
Documents;

            

    

     

    
      	
              (c)

            	
              provide
      such corporate authorities, legal opinions and other conditions precedent
      documents required by the Security Trustee and each in a form approved by
      the Security Trustee;

            

    

     

    
      	
              (d)

            	
              pay
      all of the Creditor Parties' reasonable expenses in relation to such
      re-flagging; and

            

    

     

    
      	
              (e)

            	
              comply
      with such other conditions as the Security Trustee may reasonably
      require.

            

    

     

    
      	
              14.3

            	
              Repair and
      classification.  Each Borrower shall keep the Ship owned
      by it in a good and safe condition and state of
  repair:

            

    

     

    
      	
              (a)

            	
              consistent
      with first-class ship ownership and management
  practice;

            

    

     

    
      	
              (b)

            	
              so
      as to maintain that Ship in the highest classification available for ships
      of the same type, age and specification as the Ship with Det norske
      Veritas free of recommendations and conditions;
  and

            

    

     

    
      	
              (c)

            	
              so
      as to comply with all laws and regulations applicable to vessels
      registered under Maltese flag (in the case of Ship A) or Liberian flag (in
      the case of Ship B) or to vessels

            

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    trading
to any jurisdiction to which that Ship may trade from time to time, including
but not limited to the ISM Code and the ISPS Code.

     

    
      	
              14.4

            	
              Modification.  No
      Borrower shall make any modification or repairs to, or replacement of, any
      Ship or equipment installed on it which would or might materially alter
      the structure, type or performance characteristics of that Ship or
      materially reduce its value.

            

    

     

    
      	
              14.5

            	
              Removal of
      parts.  No Borrower shall remove any material part of any
      Ship, or any item of equipment installed on, any Ship unless the part or
      item so removed is forthwith replaced by a suitable part or item which is
      in the same condition as or better condition than the part or item
      removed, is free from any Security Interest or any right in favour of any
      person other than the Security Trustee and becomes on installation on the
      relevant Ship the property of the relevant Borrower and subject to the
      security constituted by the relevant Mortgage Provided that a Borrower
      may install equipment owned by a third party if the equipment can be
      removed without any risk of damage to the Ship owned by
  it.

            

    

     

    
      	
              14.6

            	
              Surveys.  Each
      Borrower shall submit the Ship owned by it regularly to all periodical or
      other surveys which may be required for classification purposes and, if so
      required by the Security Trustee provide the Security Trustee, with copies
      of all survey reports.

            

    

     

    
      	
              14.7

            	
              Inspection.  Each
      Borrower shall permit the Security Trustee (by surveyors or other persons
      appointed by it for that purpose) to board the Ship owned by it at all
      reasonable times and without unduly interfering with that Ship's operation
      to inspect its condition or to satisfy themselves about proposed or
      executed repairs and shall afford all proper facilities for such
      inspections.

            

    

     

    
      	
              14.8

            	
              Prevention of and release from
      arrest.  Each Borrower shall promptly
      discharge:

            

    

     

    
      	
              (a)

            	
              all
      liabilities which give or may give rise to maritime or possessory liens on
      or claims enforceable against the Ship owned by it, the Earnings or the
      Insurances;

            

    

     

    
      	
              (b)

            	
              all
      taxes, dues and other amounts charged in respect of the Ship owned by it,
      the Earnings or the Insurances; and

            

    

     

    
      	
              (c)

            	
              all
      other outgoings whatsoever in respect of the Ship owned by it, the
      Earnings or the Insurances,

            

    

     

    
      	
               
      

            	
              and,
      forthwith upon receiving notice of the arrest of the Ship owned by it, or
      of its detention in exercise or purported exercise of any lien or claim,
      that Borrower shall procure its release by providing bail or otherwise as
      the circumstances may require.

            

    

    

    
      	
              14.9

            	
              Compliance with laws
      etc.  Each Borrower
shall:

            

    

     

    
      	
              (a)

            	
              comply,
      or procure compliance with the ISM Code, the ISPS Code, all Environmental
      Laws and all other laws or regulations relating to the Ship owned by it,
      its ownership, operation and management or to the business of that
      Borrower;

            

    

     

    
      	
              (b)

            	
              not
      employ the Ship owned by it nor allow its employment in any manner
      contrary to any law or regulation in any relevant jurisdiction including
      but not limited to the ISM Code and the ISPS Code;
  and

            

    

     

    
      	
              (c)

            	
              in
      the event of hostilities in any part of the world (whether war is declared
      or not), not cause or permit the Ship owned by it to enter or trade to any
      zone which is declared a war zone by any government or by the Ship's war
      risks insurers unless the prior written consent of the Security Trustee
      has been given and that Borrower has (at its expense) effected any
      special, additional or modified insurance cover which the Security Trustee
      may require.

            

    

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    
      	
              14.10

            	
              Provision of
      information.  Each Borrower shall promptly provide the
      Security Trustee with any information which it requests
      regarding:

            

    

     

    
      	
              (a)

            	
              the
      Ship owned by it, its employment, position and engagements (including,
      without limitation, the provision of the latest complete technical report
      from any Approved Manager);

            

    

     

    
      	
              (b)

            	
              the
      Earnings and payments and amounts due to the master and crew of the Ship
      owned by it;

            

    

     

    
      	
              (c)

            	
              any
      expenses incurred, or likely to be incurred, in connection with the
      operation, maintenance or repair of the Ship owned by it and any payments
      made in respect of that Ship;

            

    

     

    
      	
              (d)

            	
              any
      towages and salvages; and

            

    

     

    
      	
              (e)

            	
              its
      compliance, any Approved Manager's compliance and the compliance of the
      Ship owned by it with the ISM Code and the ISPS
  Code,

            

    

     

    
      	
               
      

            	
              and,
      upon the Security Trustee's request, provide copies of any current charter
      relating to the Ship owned by it, of any current charter guarantee and
      copies of the Borrower's or any Approved Manager's Document of
      Compliance.

            

    

    

    
      	
              14.11

            	
              Notification of certain
      events.  Each Borrower shall immediately notify the
      Security Trustee by fax, confirmed forthwith by letter,
  of:

            

    

     

    
      	
              (a)

            	
              any
      casualty which is or is likely to be or to become a Major
      Casualty;

            

    

     

    
      	
              (b)

            	
              any
      occurrence as a result of which the Ship owned by it has become or is, by
      the passing of time or otherwise, likely to become a Total
      Loss;

            

    

     

    
      	
              (c)

            	
              any
      requirement or recommendation made by any insurer or classification
      society or by any competent authority which is not immediately complied
      with;

            

    

     

    
      	
              (d)

            	
              any
      arrest or detention of the Ship owned by it, any exercise or purported
      exercise of any lien on that Ship or its Earnings or any requisition of
      that Ship for hire;

            

    

     

    
      	
              (e)

            	
              any
      intended dry docking of the Ship owned by
it;

            

    

     

    
      	
              (f)

            	
              any
      Environmental Claim made against that Borrower or in connection with the
      Ship owned by it, or any Environmental
Incident;

            

    

     

    
      	
              (g)

            	
              any
      claim for breach of the ISM Code or the ISPS Code being made against that
      Borrower, any Approved Manager or otherwise in connection with the Ship
      owned by it; or

            

    

     

    
      	
              (h)

            	
              any
      other matter, event or incident, actual or threatened, the effect of which
      will or could lead to the ISM Code or the ISPS Code not being complied
      with,

            

    

     

    
      	
               
      

            	
              and
      that Borrower shall keep the Security Trustee advised in writing on a
      regular basis and in such detail as the Security Trustee shall require of
      that Borrower's, that Approved Manager's or any other person's response to
      any of those events or matters.

            

    

    

    
      	
              14.12

            	
              Restrictions on chartering,
      appointment of managers etc.  No Borrower shall, in
      relation to the Ship owned by it:

            

    

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    
      	
              (a)

            	
              save
      for a Charter, let that Ship on demise charter (or permit that Ship to be
      let on demise charter) for any
period;

            

    

     

    
      	
              (b)

            	
              enter
      into any time or consecutive voyage charter in respect of that Ship for a
      term which exceeds, or which by virtue of any optional extensions may
      exceed, 13 months;

            

    

     

    
      	
              (c)

            	
              enter
      into any charter in relation to that Ship under which more than 2 months'
      hire (or the equivalent) is payable in
advance;

            

    

     

    
      	
              (d)

            	
              charter
      that Ship otherwise than on bona fide arm's length terms at the time when
      that Ship is fixed;

            

    

     

    
      	
              (e)

            	
              agree
      to any assignment of any charter of that Ship or any charter hire review
      of any such charter;

            

    

     

    
      	
              (f)

            	
              appoint
      a manager of that Ship other than an Approved Manager (which, each
      Borrower represents and warrants to each Creditor Party, has the ability
      to carry out such appointment) or agree to any alteration to the terms of
      an Approved Manager's appointment;

            

    

     

    
      	
              (g)

            	
              de-activate
      or lay up that Ship or permit that Ship to be de-activated or laid up;
      or

            

    

     

    
      	
              (h)

            	
              put
      that Ship (or permit that Ship to be put) into the possession of any
      person for the purpose of work being done upon it in an amount exceeding
      or likely to exceed $500,000 (or the equivalent in any other currency)
      unless that person has first given to the Security Trustee and in terms
      satisfactory to it a written undertaking not to exercise any lien on that
      Ship or its Earnings for the cost of such work or for any other
      reason.

            

    

     

    
      	
              14.13

            	
              Notice of
      Mortgage.  Each Borrower shall keep the relevant Mortgage
      registered against the Ship owned by it as a valid first priority
      mortgage, carry on board that Ship a certified copy of the relevant
      Mortgage and place and maintain in a conspicuous place in the navigation
      room and the Master's cabin of that Ship a framed printed notice stating
      that that Ship is mortgaged by that Borrower to the Security
      Trustee.

            

    

     

    
      	
              14.14

            	
              Sharing of
      Earnings.   No Borrower shall enter into any
      agreement or arrangement for the sharing of any
  Earnings.

            

    

     

    
      	
              14.15

            	
              ISPS
      Code.  Each Borrower shall comply with the ISPS Code and
      in particular, without limitation,
shall:

            

    

     

    
      	
              (a)

            	
              procure
      that the Ship owned by that Borrower and the company responsible for that
      Ship's compliance with the ISPS Code comply with the ISPS Code;
      and

            

    

     

    
      	
              (b)

            	
              maintain
      for that Ship an
ISSC;  and

            

    

     

    
      	
              (c)

            	
              notify
      the Agent immediately in writing of any actual or threatened withdrawal,
      suspension, cancellation or modification of the
  ISSC.

            

    

     

    
      	
              15

            	
              SECURITY
      COVER

            

    

     

    
      	
              15.1

            	
              Minimum required security
      cover.  Clause 15.2 applies if the Agent notifies the
      Borrowers of any of the following:

            

    

     

    
      	
              (a)

            	
              at
      the earlier of (i) the end of November 2008 or (ii) the Drawdown Date in
      relation to the launching instalment under the Shipbuilding Contract for
      the first Ship to reach that stage, the aggregate
  of:

            

    

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    
      	
              (i)

            	
              the
      aggregate of the market value (each determined as provided in Clause 15.3
      on a resale basis on the basis of a valuation carried out not more than 2
      weeks prior to the Drawdown Date (or as the case may be) the end of
      November 2008) of each Ship less the aggregate amount of the instalment(s)
      to be paid to the Builder under the Shipbuilding Contract for that Ship
      (save that if that Shipbuilding Contract is the subject of the
      circumstances described in either Clauses 8.8(c) or 8.8(e), the market
      value of that Ship for the purposes of this paragraph (i) shall be zero);
      plus

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      net realisable value of any additional security previously provided under
      this Clause 15,

            

    

     

    is below
110 per cent. of the aggregate of the Loan and of the Swap Exposure of each Swap
Counterparty; or

    

    
      	
              (b)

            	
              at
      any time following the Delivery Date of the first Ship but prior to the
      Delivery Date of the second Ship, the aggregate
  of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      market value (determined as provided in Clause 15.3) of the Ship which has
      delivered (save that if that Ship is not subject to a Mortgage, the market
      value for the purposes of this paragraph (i) shall be zero);
      plus

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      market value (determined as provided in Clause 15.3 on a resale basis) of
      the Ship which has not yet delivered less the aggregate amount of the
      instalment(s) to be paid to the Builder under the Shipbuilding Contract
      for that Ship (save that if that Shipbuilding Contract is the subject of
      the circumstances described in either Clauses 8.8(c) or 8.8(e), the market
      value of that Ship for the purposes of this paragraph (ii) shall be zero);
      plus

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      net realisable value of any additional security previously provided under
      this Clause 15,

            

    

     

    is below
110 per cent. (during the period commencing from the first Delivery Date and
ending on 30 September 2009) or 115 per cent. (during the period commencing from
30 September 2009 and ending on the final Delivery Date) of the aggregate of the
Loan and of the Swap Exposure of each Swap Counterparty; or

    

    
      	
              (c)

            	
              at
      any time following the Delivery Date of both Ships, the aggregate
      of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      aggregate of the market value (each determined as provided in Clause 15.3)
      of each Ship subject to a Mortgage;
plus

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      net realisable value of any additional security previously provided under
      this Clause 15,

            

    

     

    
      	
               
      

            	
              is
      below 115 per cent. (during the period commencing from the final Delivery
      Date and ending on the date falling 5 years after the first Delivery Date)
      or 125 per cent. (during the period commencing from the date falling 5
      years after the first Delivery Date and ending on the end of the Security
      Period) of the aggregate of the Loan and of the Swap Exposure of each Swap
      Counterparty.

            

    

    

    
      	
              15.2

            	
              Provision of additional
      security; prepayment.  If the Agent serves a notice on
      the Borrowers under Clause 15.1, the Borrowers shall, within 30 days after
      the date on which the Agent's notice is served,
  either:

            

    

     

    
      	
              (a)

            	
              provide,
      or ensure that a third party provides, additional security which, in the
      opinion of the Majority Lenders, has a net realisable value at least equal
      to the shortfall and is documented in such terms as the Agent may, with
      the authorisation of the Majority Lenders, approve or require;
      or

            

    

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    
      	
              (b)

            	
              prepay
      such part (at least) of the Loan as will eliminate the
      shortfall.

            

    

     

    
      	
              15.3

            	
              Valuation of
      Ships.  The market value of a Ship at any date is that
      shown by a valuation prepared:

            

    

     

    
      	
              (a)

            	
              as
      at a date not more than 14 days
previously;

            

    

     

    
      	
              (b)

            	
              by
      an independent sale and purchase shipbroker which the Agent has approved
      or appointed for the purpose;

            

    

     

    
      	
              (c)

            	
              with
      or without physical inspection of the Ship (as the Agent may
      require);

            

    

     

    
      	
              (d)

            	
              on
      the basis of a sale for prompt delivery for cash on normal arm's length
      commercial terms as between a willing seller and a willing buyer, free of
      any existing charter or other contract of employment;
  and

            

    

     

    
      	
              (e)

            	
              after
      deducting the estimated amount of the usual and reasonable expenses which
      would be incurred in connection with the
sale.

            

    

     

    
      	
              15.4

            	
              Value of additional vessel
      security.  The net realisable value of any additional
      security which is provided under Clause 15.2 and which consists of a
      Security Interest over a vessel shall be that shown by a valuation
      complying with the requirements of Clause
15.3.

            

    

     

    
      	
              15.5

            	
              Valuations
      binding.  Any valuation under Clause 15.2, 15.3 or 15.4
      shall be binding and conclusive as regards the Borrowers, as shall be any
      valuation which the Majority Lenders make of any additional security which
      does not consist of or include a Security
  Interest.

            

    

     

    
      	
              15.6

            	
              Provision of
      information.  The Borrowers shall promptly provide the
      Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with
      any information which the Agent or the shipbroker or expert may request
      for the purposes of the valuation; and, if the Borrowers fail to provide
      the information by the date specified in the request, the valuation may be
      made on any basis and assumptions which the shipbroker or the Majority
      Lenders (or the expert appointed by them) consider
  prudent.

            

    

     

    
      	
              15.7

            	
              Payment of valuation
      expenses.  Without prejudice to the generality of the
      Borrowers' obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers
      shall, on demand, pay the Agent the amount of the fees and expenses of any
      shipbroker or expert instructed by the Agent under this Clause and all
      legal and other expenses incurred by any Creditor Party in connection with
      any matter arising out of this
Clause.

            

    

     

    
      	
              15.8

            	
              Application of
      prepayment.  Clause 8 shall apply in relation to any
      prepayment pursuant to Clause
15.2(b).

            

    

     

    
      	
              16

            	
              PAYMENTS
      AND CALCULATIONS

            

    

     

    
      	
              16.1

            	
              Currency and method of
      payments.  All payments to be made by the Lenders or by
      any Borrower under a Finance Document shall be made to the Agent or to the
      Security Trustee, in the case of an amount payable to
  it:

            

    

     

    
      	
              (a)

            	
              by
      not later than 11.00 a.m. (New York City time) on the due
      date;

            

    

     

    
      	
              (b)

            	
              in
      same day Dollar funds settled through the New York Clearing House
      Interbank Payments System (or in such other Dollar funds and/or settled in
      such other manner as the Agent shall specify as being customary at the
      time for the settlement of international transactions of the type
      contemplated by this Agreement);

            

    

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    
      	
              (c)

            	
              in
      the case of an amount payable by a Lender to the Agent or by any Borrower
      to the Agent or any Lender, to such account with such bank as the Agent
      may from time to time notify to the Borrowers and the other Creditor
      Parties; and

            

    

     

    
      	
              (d)

            	
              in
      the case of an amount payable to the Security Trustee, to such account as
      it may from time to time notify to the Borrowers and the other Creditor
      Parties.

            

    

     

    
      	
              16.2

            	
              Payment on non-Business
      Day.  If any payment by any Borrower under a Finance
      Document would otherwise fall due on a day which is not a Business
      Day:

            

    

     

    
      	
              (a)

            	
              the
      due date shall be extended to the next succeeding Business Day;
      or

            

    

     

    
      	
              (b)

            	
              if
      the next succeeding Business Day falls in the next calendar month, the due
      date shall be brought forward to the immediately preceding Business
      Day,

            

    

     

    and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original due date.

    

    
      	
              16.3

            	
              Basis for calculation of
      periodic payments.  All interest and commitment fee and
      any other payments under any Finance Document which are of an annual or
      periodic nature shall accrue from day to day and shall be calculated on
      the basis of the actual number of days elapsed and a 360 day
      year.

            

    

     

    
      	
              16.4

            	
              Distribution of payments to
      Creditor Parties.  Subject to Clauses 16.5, 16.6 and
      16.7:

            

    

     

    
      	
              (a)

            	
              any
      amount received by the Agent under a Finance Document for distribution or
      remittance to a Lender, a Swap Counterparty or the Security Trustee shall
      be made available by the Agent to that Lender, that Swap Counterparty or,
      as the case may be, the Security Trustee by payment, with funds having the
      same value as the funds received, to such account as the Lender, the Swap
      Counterparty or the Security Trustee may have notified to the Agent not
      less than 5 Business Days previously;
and

            

    

     

    
      	
              (b)

            	
              amounts
      to be applied in satisfying amounts of a particular category which are due
      to the Lenders and/or the Swap Counterparties generally shall be
      distributed by the Agent to each Lender and each Swap Counterparty pro
      rata to the amount in that category which is due to
  it.

            

    

     

    
      	
              16.5

            	
              Permitted deductions by
      Agent.  Notwithstanding any other provision of this
      Agreement or any other Finance Document, the Agent may, before making an
      amount available to a Lender or a Swap Counterparty, deduct and withhold
      from that amount any sum which is then due and payable to the Agent from
      that Lender or that Swap Counterparty under any Finance Document or any
      sum which the Agent is then entitled under any Finance Document to require
      that Lender or that Swap Counterparty to pay on
  demand.

            

    

     

    
      	
              16.6

            	
              Agent only obliged to pay when
      monies received.  Notwithstanding any other provision of
      this Agreement or any other Finance Document, the Agent shall not be
      obliged to make available to any Borrower or any Lender or any Swap
      Counterparty any sum which the Agent is expecting to receive for
      remittance or distribution to that Borrower or that Lender or that Swap
      Counterparty until the Agent has satisfied itself that it has received
      that sum.

            

    

     

    
      	
              16.7

            	
              Refund to Agent of monies not
      received.  If and to the extent that the Agent makes
      available a sum to a Borrower, a Lender or a Swap Counterparty, without
      first having received that sum, that Borrower or (as the case may be) the
      Lender or the Swap Counterparty concerned shall, on
  demand:

            

    

     

    
      	
              (a)

            	
              refund
      the sum in full to the Agent; and

            

    

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    
      	
              (b)

            	
              pay
      to the Agent the amount (as certified by the Agent) which will indemnify
      the Agent against any funding or other loss, liability or expense incurred
      by the Agent as a result of making the sum available before receiving
      it.

            

    

     

    
      	
              16.8

            	
              Agent may assume
      receipt.  Clause 16.7 shall not affect any claim which
      the Agent has under the law of restitution, and applies irrespective of
      whether the Agent had any form of notice that it had not received the sum
      which it made available.

            

    

     

    
      	
              16.9

            	
              Creditor Party
      accounts.  Each Creditor Party shall maintain accounts
      showing the amounts owing to it by the Borrowers and each Security Party
      under the Finance Documents and all payments in respect of those amounts
      made by the Borrowers and any Security
Party.

            

    

     

    
      	
              16.10

            	
              Agent's memorandum
      account.  The Agent shall maintain a memorandum account
      showing the amounts advanced by the Lenders and all other sums owing to
      the Agent, the Security Trustee and each Lender from the Borrowers and
      each Security Party under the Finance Documents and all payments in
      respect of those amounts made by the Borrowers and any Security
      Party.

            

    

     

    
      	
              16.11

            	
              Accounts prima facie
      evidence.  If any accounts maintained under Clauses 16.9
      and 16.10 show an amount to be owing by a Borrower or a Security Party to
      a Creditor Party, those accounts shall be prima facie evidence that that
      amount is owing to that Creditor
Party.

            

    

     

    
      	
              17

            	
              APPLICATION
      OF RECEIPTS

            

    

     

    
      	
              17.1

            	
              Normal order of
      application.  Except as any Finance Document may
      otherwise provide, any sums which are received or recovered by any
      Creditor Party under or by virtue of any Finance Document after service of
      notice on the Borrowers under Clause 19.2(a)(i) or (ii) shall be
      applied:

            

    

     

    
      	
              (a)

            	
              FIRST:
      in or towards satisfaction of any amounts then due and payable under the
      Finance Documents and the Master Agreements in the following order and
      proportions:

            

    

     

    
      	
               
      

            	
              (i)

            	
              first,
      in or towards satisfaction pro rata of all amounts then due and payable to
      the Creditor Parties under the Finance Documents other than those amounts
      referred to at paragraphs (ii) to (v) inclusive below (including, but
      without limitation, all amounts payable by any Borrower under Clauses 20,
      21 and 22 of this Agreement or by any Borrower or any Security Party under
      any corresponding or similar provision in any other Finance Document or in
      any Master Agreement);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              secondly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Creditor Parties under the Finance
      Documents;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              thirdly,
      in or towards satisfaction pro rata of each
  Tranche;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              fourthly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Creditor Parties under the Master
      Agreements (and, for this purpose, the expression "interest" shall include
      any net amount which any Borrower shall have become liable to pay or
      deliver under section 2(e) (Obligations) of any
      Master Agreement but shall have failed to pay or deliver to the relevant
      Swap Counterparty at the time of application or distribution under this
      Clause 17); and

            

    

     

    
      	
               
      

            	
              (v)

            	
              fifthly,
      in or towards satisfaction pro rata of he Swap Exposure of each Swap
      Counterparty (in the case of the latter, calculated as at the actual Early
      Termination Date applying to each particular Designated Transaction, or if
      no

            

    

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    such
Early Termination Date shall have occurred, calculated as if an Early
Termination Date occurred on the date of application or distribution
hereunder);

     

    
      	
              (b)

            	
              SECONDLY:
      in retention of an amount equal to any amount not then due and payable
      under any Finance Document or any Master Agreement but which the Agent, by
      notice to the Borrowers, the Security Parties and the other Creditor
      Parties, states in its opinion will or may become due and payable in the
      future and, upon those amounts becoming due and payable, in or towards
      satisfaction of them in accordance with the provisions of Clause 17.1(a);
      and

            

    

     

    
      	
              (c)

            	
              THIRDLY:
      any surplus shall be paid to the Borrowers or to any other person
      appearing to be entitled to it.

            

    

     

    
      	
              17.2

            	
              Variation of order of
      application.  The Agent may, with the authorisation of
      the Majority Lenders and the Swap Counterparties, by notice to the
      Borrowers, the Security Parties and the other Creditor Parties provide for
      a different manner of application from that set out in Clause 17.1 either
      as regards a specified sum or sums or as regards sums in a specified
      category or categories.

            

    

     

    
      	
              17.3

            	
              Notice of variation of order of
      application.  The Agent may give notices under Clause
      17.2 from time to time; and such a notice may be stated to apply not only
      to sums which may be received or recovered in the future, but also to any
      sum which has been received or recovered on or after the third Business
      Day before the date on which the notice is
  served.

            

    

     

    
      	
              17.4

            	
              Appropriation rights
      overridden.  This Clause 17 and any notice which the
      Agent gives under Clause 17.2 shall override any right of appropriation
      possessed, and any appropriation made, by any Borrower or any Security
      Party.

            

    

     

    
      	
              18

            	
              APPLICATION
      OF EARNINGS

            

    

     

    
      	
              18.1

            	
              Payment of
      Earnings.  Each Borrower undertakes with each Creditor
      Party to ensure that, throughout the Security Period and subject only to
      the provisions of the General Assignment and the Charter Assignment, all
      the Earnings of the Ship owned by it are paid to the Earnings Account for
      that Ship.

            

    

     

    
      	
              18.2

            	
              Location of
      accounts.  Each Borrower shall
  promptly:

            

    

     

    
      	
              (a)

            	
              comply
      with any requirement of the Agent as to the location or re-location of the
      Earnings Accounts (or either of them);
and

            

    

     

    
      	
              (b)

            	
              execute
      any documents which the Agent specifies to create or maintain in favour of
      the Security Trustee a Security Interest over (and/or rights of set-off,
      consolidation or other rights in relation to) the Earnings Accounts (or
      either of them).

            

    

     

    
      	
              18.3

            	
              Debits for expenses
      etc.  The Agent shall be entitled (but not obliged) from
      time to time to debit any Earnings Account without prior notice in order
      to discharge any amount due and payable under Clause 20 or 21 to a
      Creditor Party or payment of which any Creditor Party has become entitled
      to demand under Clause 20 or 21.

            

    

     

    
      	
              19

            	
              EVENTS
      OF DEFAULT

            

    

     

    
      	
              19.1

            	
              Events of
      Default.  An Event of Default occurs
  if:

            

    

     

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

     

    
      	
              (a)

            	
              any
      Borrower or any Security Party fails to pay when due or (if so payable) on
      demand any sum payable under a Finance Document or under any document
      relating to a Finance Document; or

            

    

     

    
      	
              (b)

            	
              any
      breach occurs of Clause 9.2, 11.2, 11.3, 12.2, 12.3 or 15.2;
      or

            

    

     

    
      	
              (c)

            	
              any
      breach by any Borrower or any Security Party occurs of any provision of a
      Finance Document (other than a breach covered by paragraphs (a) or (b))
      which, in the opinion of the Majority Lenders, is capable of remedy, and
      such default continues unremedied 10 days after written notice from the
      Agent requesting action to remedy the same;
or

            

    

     

    
      	
              (d)

            	
              (subject
      to any applicable grace period specified in the Finance Document) any
      breach by any Borrower or any Security Party occurs of any provision of a
      Finance Document (other than a breach falling within paragraphs (a), (b)
      or (c)); or

            

    

     

    
      	
              (e)

            	
              any
      representation, warranty or statement made or repeated by, or by an
      officer of, a Borrower or a Security Party in a Finance Document or in a
      Drawdown Notice or any other notice or document relating to a Finance
      Document is untrue or misleading when it is made or repeated;
      or

            

    

     

    
      	
              (f)

            	
              any
      of the following occurs in relation to any secured Financial Indebtedness
      (including, without limitation, leases) of $2,500,000 or more in aggregate
      of a Relevant Person:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      Financial Indebtedness of a Relevant Person is not paid when due;
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      Financial Indebtedness of a Relevant Person becomes due and payable or
      capable of being declared due and payable prior to its stated maturity
      date as a consequence of any event of default;
  or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              a
      lease, hire purchase agreement or charter creating any Financial
      Indebtedness of a Relevant Person is terminated by the lessor or owner or
      becomes capable of being terminated as a consequence of any termination
      event; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              any
      overdraft, loan, note issuance, acceptance credit, letter of credit,
      guarantee, foreign exchange or other facility relating to any Financial
      Indebtedness of a Relevant Person ceases to be available or becomes
      capable of being terminated as a result of any event of default, or cash
      cover is required, or becomes capable of being required, in respect of
      such a facility as a result of any event of default;
  or

            

    

     

    
      	
               
      

            	
              (v)

            	
              any
      Security Interest securing any Financial Indebtedness of a Relevant Person
      becomes enforceable; or

            

    

     

    
      	
              (g)

            	
              any
      of the following occurs in relation to a Relevant
  Person:

            

    

     

    
      	
               
      

            	
              (i)

            	
              a
      Relevant Person becomes, in the opinion of the Majority Lenders, unable to
      pay its debts as they fall due; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      assets of a Relevant Person are subject to any form of execution,
      attachment, arrest, sequestration or distress in respect of a sum of, or
      sums aggregating, $100,000 or more or the equivalent in another currency
      Provided that in
      the case of the arrest of a Ship, it shall only be an Event of Default if
      the Borrowers have not procured the release of that Ship by the date
      falling 40 days after the commencement of the arrest;
  or

            

    

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iii)

            	
              any
      administrative or other receiver is appointed over any asset of a Relevant
      Person; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              an
      administrator is appointed (whether by the court or otherwise) in respect
      of a Relevant Person; or

            

    

     

    
      	
               
      

            	
              (v)

            	
              any
      formal declaration of bankruptcy or any formal statement to the effect
      that a Relevant Person is insolvent or likely to become insolvent is made
      by a Relevant Person or by the directors of a Relevant Person or, in any
      proceedings, by a lawyer acting for a Relevant Person;
  or

            

    

     

    
      	
               
      

            	
              (vi)

            	
              a
      provisional liquidator is appointed in respect of a Relevant Person, a
      winding up order is made in relation to a Relevant Person or a winding up
      resolution is passed by a Relevant Person;
or

            

    

     

    
      	
               
      

            	
              (vii)

            	
              a
      resolution is passed, an administration notice is given or filed, an
      application or petition to a court is made or presented or any other step
      is taken by (aa) a Relevant Person, (bb) the members or directors of a
      Relevant Person, (cc) a holder of Security Interests which together relate
      to all or substantially all of the assets of a Relevant Person, or (dd) a
      government minister or public or regulatory authority for or with a view
      to the winding up of that or another Relevant Person or the appointment of
      a provisional liquidator or administrator in respect of that or another
      Relevant Person, or that or another Relevant Person ceasing or suspending
      business operations or payments to creditors, save that this paragraph
      does not apply to a fully solvent winding up of a Relevant Person other
      than a Borrower or the Guarantor which is, or is to be, effected for the
      purposes of an amalgamation or reconstruction previously approved by the
      Majority Lenders and effected not later than 3 months after the
      commencement of the winding up; or

            

    

     

    
      	
                             
      (viii)

            	
              an
      administration notice is given or filed, an application or petition to a
      court is made or presented or any other step is taken by a creditor of a
      Relevant Person (other than a holder of Security Interests which together
      relate to all or substantially all of the assets of a Relevant Person) for
      the winding up of a Relevant Person or the appointment of a provisional
      liquidator or administrator in respect of a Relevant Person, unless the
      proposed winding up, appointment of a provisional liquidator or
      administration is being contested in good faith, on substantial grounds
      and not with a view to some other insolvency law procedure being
      implemented instead and either (aa) the application or petition is
      dismissed or withdrawn within 30 days of being made or presented, or (bb)
      within 30 days of the administration notice being given or filed, or the
      other relevant steps being taken, other action is taken which will ensure
      that there will be no administration and (in both cases (aa) or (bb)) the
      Relevant Person will continue to carry on business in the ordinary way and
      without being the subject of any actual, interim or pending insolvency law
      procedure; or

            

    

     

    
      	
               
      

            	
              (ix)

            	
              a
      Relevant Person or its directors take any steps (whether by making or
      presenting an application or petition to a court, or submitting or
      presenting a document setting out a proposal or proposed terms, or
      otherwise) with a view to obtaining, in relation to that or another
      Relevant Person, any form of moratorium, suspension or deferral of
      payments, reorganisation of debt (or certain debt) or arrangement with all
      or a substantial proportion (by number or value) of creditors or of any
      class of them or any such moratorium, suspension or deferral of payments,
      reorganisation or arrangement is effected by court order, by the filing of
      documents with a court, by means of a contract or in any other way at all;
      or

            

    

     

    
      	
               
      

            	
              (x)

            	
              any
      meeting of the members or directors, or of any committee of the board or
      senior management, of a Relevant Person is held or summoned for the
      purpose of considering a resolution or proposal to authorise or take any
      action of a type

            

    

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    described
in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or
without such a meeting) the members, directors or such a committee resolve or
agree that such an action or step should be taken or should be taken if certain
conditions materialise or fail to materialise; or

     

    
      	
               
      

            	
              (xi)

            	
              in
      a country other than England, any event occurs, any proceedings are opened
      or commenced or any step is taken which, in the opinion of the Majority
      Lenders is similar to any of the foregoing;
or

            

    

     

    
      	
              (h)

            	
              any
      Borrower or any Security Party ceases or suspends carrying on its business
      or a part of its business which, in the opinion of the Majority Lenders,
      is material in the context of this Agreement;
or

            

    

     

    
      	
              (i)

            	
              it
      becomes unlawful or impossible:

            

    

     

    
      	
               
      

            	
              (i)

            	
              for
      any Borrower or any Security Party to discharge any liability under a
      Finance Document or to comply with any other obligation which the Majority
      Lenders consider material under a Finance Document;
  or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              for
      the Agent, the Security Trustee, the Lenders or the Swap Banks to exercise
      or enforce any right under, or to enforce any Security Interest created
      by, a Finance Document; or

            

    

     

    
      	
              (j)

            	
              any
      official consent necessary to enable any Borrower to own, operate or
      charter the Ship owned by it or to enable any Borrower or any Security
      Party to comply with any provision which the Majority Lenders consider
      material of a Finance Document or a Transaction Document is not granted,
      expires without being renewed, is revoked or becomes liable to revocation
      or any condition of such a consent is not fulfilled;
  or

            

    

     

    
      	
              (k)

            	
              it
      appears to the Majority Lenders that, without their prior consent, at any
      time:

            

    

     

    
      	
               
      

            	
              (i)

            	
              either
      Borrower is not a wholly owned direct subsidiary of the Guarantor;
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              a
      change has occurred or probably has occurred after the date of this
      Agreement in the beneficial or legal ownership of any of the shares in
      either Borrower or any Security Party (other than the Charterers, the
      Charter Guarantors and the Guarantor) or in the ultimate control of the
      voting rights attaching to any of those shares;
  or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              either
      Charter Guarantor ceases to hold directly or indirectly at least 51 per
      cent. of the ultimate beneficial ownership of, or at least 51 per cent. of
      the ultimate control of the voting rights in, the shares of the Charterer
      under the Charter guaranteed by that Charter Guarantor or ceases to have
      sufficient control over that Charterer to remove and appoint a majority to
      the board of directors of that Charterer and otherwise exercise control of
      that Charterer; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              Mr
      Evangelos Pistiolis is not the chief executive officer of the Guarantor;
      or

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      person(s) having control of the Guarantor on the date of this Agreement
      cease to have sufficient control over the Guarantor to remove and appoint
      a majority to the board of directors of the Guarantor and otherwise
      exercise control of the Guarantor;
or

            

    

     

    
      	
              (l)

            	
              any
      provision which the Majority Lenders consider material of a Finance
      Document proves to have been or becomes invalid or unenforceable or a
      Borrower or a Security Party repudiates any such provision, or a Security
      Interest created by a Finance Document proves to have been or becomes
      invalid or unenforceable or such a Security
  Interest

            

    

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    proves to
have ranked after, or loses its priority to, another Security Interest or any
other third party claim or interest; or

     

    
      	
              (m)

            	
              the
      security constituted by a Finance Document is in any way imperilled or in
      jeopardy; or

            

    

     

    
      	
              (n)

            	
              any
      Charter or any Charter Guarantee is terminated (other than by the
      effluxion of time or the sale (with the consent of the Lenders) or Total
      Loss of the relevant Ship), becomes invalid or unenforceable or otherwise
      ceases to be in full force and effect for any reason or any amount payable
      under any Charter or any Charter Guarantee is not paid when due and
      payable or any other default (howsoever described) occurs under any
      Charter or any Charter Guarantee;
or

            

    

     

    
      	
              (o)

            	
              an
      Event of Default (as defined in section 14 of a Master Agreement) occurs;
      or

            

    

     

    
      	
              (p)

            	
              a
      Master Agreement is terminated, cancelled, suspended, rescinded or revoked
      or otherwise ceases to remain in full force and effect for any reason
      except with the consent of the Agent, acting with the authorisation of the
      Majority Lenders; or

            

    

     

    
      	
              (q)

            	
              any
      other event occurs or any other circumstances arise or develop including,
      without limitation:

            

    

     

    
      	
               
      

            	
              (i)

            	
              a
      change in the financial position, state of affairs or prospects of either
      Borrower or the Guarantor; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      accident or other event involving either Ship or another vessel owned,
      chartered or operated by the
Guarantor,

            

    

     

    in the
light of which the Majority Lenders consider that there is a significant risk
that either Borrower or the Guarantor is, or will later become, unable to
discharge its liabilities under the Finance Documents, the Master Agreements and
the Transaction Documents as they fall due.

    

    
      	
              19.2

            	
              Actions following an Event of
      Default.  On, or at any time after, the occurrence of an
      Event of Default:

            

    

     

    
      	
              (a)

            	
              the
      Agent may, and if so instructed by the Majority Lenders, the Agent
      shall:

            

    

     

    
      	
               
      

            	
              (i)

            	
              serve
      on the Borrowers a notice stating that the Commitments and all other
      obligations of each Lender to the Borrowers under this Agreement are
      cancelled; and/or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              serve
      on the Borrowers a notice stating that the Loan, all accrued interest and
      all other amounts accrued or owing under this Agreement are immediately
      due and payable or are due and payable on demand;
  and/or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              take
      any other action which, as a result of the Event of Default or any notice
      served under paragraph (i) or (ii), the Agent and/or the Lenders are
      entitled to take under any Finance Document or any applicable law;
      and/or

            

    

     

    
      	
              (b)

            	
              the
      Security Trustee may, and if so instructed by the Agent, acting with the
      authorisation of the Majority Lenders, the Security Trustee shall take any
      action which, as a result of the Event of Default or any notice served
      under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or
      the Lenders and/or the Swap Counterparties are entitled to take under any
      Finance Document or any applicable
law.

            

    

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    
      	
              19.3

            	
              Termination of
      Commitments.  On the service of a notice under Clause
      19.2(a)(i), the Commitments and all other obligations of each Lender to
      the Borrowers under this Agreement shall be
  cancelled.

            

    

     

    
      	
              19.4

            	
              Acceleration of
      Loan.  On the service of a notice under Clause
      19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued
      or owing from the Borrowers or any Security Party under this Agreement and
      every other Finance Document shall become immediately due and payable or,
      as the case may be, payable on
demand.

            

    

     

    
      	
              19.5

            	
              Multiple notices; action
      without notice.  The Agent may serve notices under
      Clauses 19.2(a)(i) or (ii) simultaneously or on different dates and it
      and/or the Security Trustee may take any action referred to in Clause 19.2
      if no such notice is served or simultaneously with or at any time after
      the service of both or either of such
notices.

            

    

     

    
      	
              19.6

            	
              Notification of Creditor
      Parties and Security Parties.  The Agent shall send to
      each Lender, each Swap Counterparty, the Security Trustee and each
      Security Party a copy or the text of any notice which the Agent serves on
      the Borrowers under Clause 19.2; but the notice shall become effective
      when it is served on any Borrower, and no failure or delay by the Agent to
      send a copy or the text of the notice to any other person shall invalidate
      the notice or provide any Borrower or any Security Party with any form of
      claim or defence.

            

    

     

    
      	
              19.7

            	
              Creditor Parties' rights
      unimpaired.  Nothing in this Clause shall be taken to
      impair or restrict the exercise of any right given to individual Lenders
      or Swap Counterparties under a Finance Document, a Master Agreement or the
      general law; and, in particular, this Clause is without prejudice to
      Clause 3.1.

            

    

     

    
      	
              19.8

            	
              Exclusion of Creditor Party
      liability.  No Creditor Party, and no receiver or manager
      appointed by the Security Trustee, shall have any liability to a Borrower
      or a Security Party:

            

    

     

    
      	
              (a)

            	
              for
      any loss caused by an exercise of rights under, or enforcement of a
      Security Interest created by, a Finance Document or by any failure or
      delay to exercise such a right or to enforce such a Security Interest;
      or

            

    

     

    
      	
              (b)

            	
              as
      mortgagee in possession or otherwise, for any income or principal amount
      which might have been produced by or realised from any asset comprised in
      such a Security Interest or for any reduction (however caused) in the
      value of such an asset,

            

    

     

    except
that this does not exempt a Creditor Party or a receiver or manager from
liability for losses shown to have been directly and mainly caused by the
dishonesty or the wilful misconduct of such Creditor Party's own officers and
employees or (as the case may be) such receiver's or manager's own partners or
employees.

    

    
      	
              19.9

            	
              Relevant
      Persons.  In this Clause 19, a "Relevant Person" means a
      Borrower, a Security Party or any Principal
  Subsidiary.

            

    

     

    
      	
              19.10

            	
              Interpretation.  In
      Clause 19.1(f) references to an event of default or a termination event
      include any event, howsoever described, which is similar to an event of
      default in a facility agreement or a termination event in a finance lease;
      and in Clause 19.1(g) "petition" includes an
      application.

            

    

     

    
      	
              19.11

            	
              Position of Swap
      Counterparties.  Neither the Agent nor the Security
      Trustee shall be obliged, in connection with any action taken or proposed
      to be taken under or pursuant to the foregoing provisions of this Clause
      19, to have any regard to the requirements of a Swap Counterparty except
      to the extent that such Swap Counterparty is also a
  Lender.

            

    

     

    
      	
              20

            	
              FEES
      AND EXPENSES

            

    

     

    
      	
              20.1

            	
              Fees.  The
      Borrowers shall pay to the Agent:

            

    

     

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

     

     

    
      	
              (a)

            	
              on
      the date of this Agreement, an upfront fee of an amount previously agreed
      in writing between the Agent and the Borrowers, for distribution among the
      Lenders in the proportions agreed by the Agent and the
      Lenders;

            

    

     

    
      	
              (b)

            	
              quarterly
      in arrears (with the first payment due on the first end of calendar
      quarter after the date of this Agreement) during the period from (and
      including) the date of this Agreement to the earlier of (i) the second
      Delivery Date and (ii) the end of the Availability Period and on the last
      day of that period for the account of the Lenders, a commitment fee at the
      rate of 0.50 per cent. per annum on the amount of the Total Commitments
      less the amount of the Loan, for distribution among the Lenders pro rata
      to their Commitments;

            

    

     

    
      	
              (c)

            	
              on
      the date of this Agreement and on each anniversary thereof during the
      Security Period, an annual agency fee of an amount previously agreed in
      writing between the Agent and the Borrowers, such agency fee to be payable
      to the Agent in advance for its own account;
and

            

    

     

    
      	
              (d)

            	
              the
      other fees in the amounts, and on the dates, set out in the Fee
      Letter.

            

    

     

    
      	
              20.2

            	
              Costs of negotiation,
      preparation etc.  The Borrowers shall pay to the Agent on
      its demand the amount of all expenses incurred by the Agent or the
      Security Trustee in connection with the negotiation, preparation,
      execution or registration of any Finance Document or any related document
      or with any transaction contemplated by a Finance Document or a related
      document.

            

    

     

    
      	
              20.3

            	
              Costs of variations,
      amendments, enforcement etc.  The Borrowers shall pay to
      the Agent, on the Agent's demand, for the account of the Creditor Party
      concerned the amount of all expenses incurred by a Creditor Party in
      connection with:

            

    

     

    
      	
              (a)

            	
              any
      amendment or supplement to a Finance Document, or any proposal for such an
      amendment to be made;

            

    

     

    
      	
              (b)

            	
              any
      consent or waiver by the Lenders, the Swap Banks, the Majority Lenders or
      the Creditor Party concerned under or in connection with a Finance
      Document, or any request for such a consent or
  waiver;

            

    

     

    
      	
              (c)

            	
              the
      valuation of any security provided or offered under Clause 15 or any other
      matter relating to such security;
or

            

    

     

    
      	
              (d)

            	
              any
      step taken by the Lender or the Swap Bank concerned with a view to the
      protection, exercise or enforcement of any right or Security Interest
      created by a Finance Document or for any similar
  purpose.

            

    

     

    There
shall be recoverable under paragraph (d) the full amount of all legal expenses,
whether or not such as would be allowed under rules of court or any taxation or
other procedure carried out under such rules.

    

    
      	
              20.4

            	
              Extraordinary management
      time.  The Borrowers shall pay to the Agent on its demand
      compensation in respect of the reasonable and documented amount of time
      which the management of either Servicing Bank has spent in connection with
      a matter covered by Clause 20.3 and which exceeds the amount of time which
      would ordinarily be spent in the performance of the relevant Servicing
      Bank's routine functions.  Any such compensation shall be based
      on such reasonable daily or hourly rates as the Agent
  may

            

    

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

    notify to
the Borrowers and is in addition to any fee paid or payable to the relevant
Servicing Bank.

     

    
      	
              20.5

            	
              Documentary
      taxes.  The Borrowers shall promptly pay any tax payable
      on or by reference to any Finance Document, and shall, on the Agent's
      demand, fully indemnify each Creditor Party against any claims, expenses,
      liabilities and losses resulting from any failure or delay by the
      Borrowers to pay such a tax.

            

    

     

    
      	
              20.6

            	
              Certification of
      amounts.  A notice which is signed by 2 officers of a
      Creditor Party, which states that a specified amount, or aggregate amount,
      is due to that Creditor Party under this Clause 20 and which indicates
      (without necessarily specifying a detailed breakdown) the matters in
      respect of which the amount, or aggregate amount, is due shall be prima
      facie evidence that the amount, or aggregate amount, is
    due.

            

    

     

    
      	
              21

            	
              INDEMNITIES

            

    

     

    
      	
              21.1

            	
              Indemnities regarding borrowing
      and repayment of Loan.  The Borrowers shall fully
      indemnify the Agent and each Lender on the Agent's demand and the Security
      Trustee on its demand in respect of all claims, expenses, liabilities and
      losses which are made or brought against or incurred by that Creditor
      Party, or which that Creditor Party reasonably and with due diligence
      estimates that it will incur, as a result of or in connection
      with:

            

    

     

    
      	
              (a)

            	
              an
      Advance not being borrowed on the date specified in the Drawdown Notice
      for any reason other than a default by the Lender claiming the
      indemnity;

            

    

     

    
      	
              (b)

            	
              the
      receipt or recovery of all or any part of the Loan or an overdue sum
      otherwise than on the last day of an Interest Period or other relevant
      period;

            

    

     

    
      	
              (c)

            	
              any
      failure (for whatever reason) by the Borrowers to make payment of any
      amount due under a Finance Document on the due date or, if so payable, on
      demand (after giving credit for any default interest paid by the Borrowers
      on the amount concerned under Clause 7);
and

            

    

     

    
      	
              (d)

            	
              the
      occurrence of an Event of Default or a Potential Event of Default and/or
      the acceleration of repayment of the Loan under Clause
  19,

            

    

     

    and in
respect of any tax (other than tax on its overall net income) for which a
Creditor Party is liable in connection with any amount paid or payable to that
Creditor Party (whether for its own account or otherwise) under any Finance
Document.

    

    
      	
              21.2

            	
              Breakage
      costs.  Without limiting its generality, Clause 21.1
      covers any claim, expense, liability or loss, including a loss of a
      prospective profit, incurred by a
Lender:

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

            	
              in
      terminating, or otherwise in connection with, any interest and/or currency
      swap or any other transaction entered into (whether with another legal
      entity or with another office or department of the Lender concerned) to
      hedge any exposure arising under this Agreement or that part which the
      Lender concerned determines is fairly attributable to this Agreement of
      the amount of the liabilities, expenses or losses (including losses of
      prospective profits) incurred by it in terminating, or otherwise in
      connection with, a number of transactions of which this Agreement is
      one.

            

    

     

    
      	
              21.3

            	
              Miscellaneous
      indemnities.  The Borrowers shall fully indemnify each
      Creditor Party severally on their respective demands in respect of all
      claims, expenses, liabilities and

            

    

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    losses
which may be made or brought against or incurred by a Creditor Party, in any
country, as a result of or in connection with:

     

    
      	
              (a)

            	
              any
      action taken, or omitted or neglected to be taken, under or in connection
      with any Finance Document by the Agent, the Security Trustee or any other
      Creditor Party or by any receiver appointed under a Finance Document;
      or

            

    

     

    
      	
              (b)

            	
              any
      other Pertinent Matter,

            

    

     

    other
than claims, expenses, liabilities and losses which are shown to have been
directly and mainly caused by the dishonesty or wilful misconduct of the
officers or employees of the Creditor Party concerned.

    

    Without
prejudice to its generality, this Clause 21.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, the ISPS Code or any
Environmental Law.

    

    
      	
              21.4

            	
              Currency
      indemnity.  If any sum due from any Borrower or any
      Security Party to a Creditor Party under a Finance Document or under any
      order or judgment relating to a Finance Document has to be converted from
      the currency in which the Finance Document provided for the sum to be paid
      (the "Contractual
      Currency") into another currency (the "Payment Currency") for
      the purpose of:

            

    

     

    
      	
              (a)

            	
              making
      or lodging any claim or proof against any Borrower or any Security Party,
      whether in its liquidation, any arrangement involving it or otherwise;
      or

            

    

     

    
      	
              (b)

            	
              obtaining
      an order or judgment from any court or other tribunal;
  or

            

    

     

    
      	
              (c)

            	
              enforcing
      any such order or judgment,

            

    

     

    the
Borrowers shall indemnify the Creditor Party concerned against the loss arising
when the amount of the payment actually received by that Creditor Party is
converted at the available rate of exchange into the Contractual
Currency.

    

    In this
Clause 21.4 the "available rate
of exchange" means the rate at which the Creditor Party concerned is able
at the opening of business (London time) on the Business Day after it receives
the sum concerned to purchase the Contractual Currency with the Payment
Currency.

    

    This
Clause 21.4 creates a separate liability of the Borrowers which is distinct from
their other liabilities under the Finance Documents and which shall not be
merged in any judgment or order relating to those other
liabilities.

    

    
      	
              21.5

            	
              Application to Master
      Agreements.  For the avoidance of doubt, Clause 21.4 does
      not apply in respect of sums due from a Borrower to a Swap Counterparty
      under or in connection with a Master Agreement as to which sums the
      provisions of section 8 (Contractual Currency)
      of that Master Agreement shall
apply.

            

    

     

    
      	
              21.6

            	
              Certification of
      amounts.  A notice which is signed by 2 officers of a
      Creditor Party, which states that a specified amount, or aggregate amount,
      is due to that Creditor Party under this Clause 21 and which indicates
      (without necessarily specifying a detailed breakdown) the matters in
      respect of which the amount, or aggregate amount, is due shall be prima
      facie evidence that the amount, or aggregate amount, is
    due.

            

    

     

    
      	
              21.7

            	
              Sums deemed due to a
      Lender.  For the purposes of this Clause 21, a sum
      payable by the Borrowers to the Agent or the Security Trustee for
      distribution to a Lender shall be treated as a sum due to that
      Lender.

            

    

     

    
      
        	
                22

              	
                NO
      SET-OFF OR TAX DEDUCTION

              

      

      
 

    

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

     

    
      	
              22.1

            	
              No
      deductions.  All amounts due from the Borrowers under a
      Finance Document shall be paid:

            

    

     

    
      	
              (a)

            	
              without
      any form of set-off, cross-claim or condition;
  and

            

    

     

    
      	
              (b)

            	
              free
      and clear of any tax deduction except a tax deduction which a Borrower is
      required by law to make.

            

    

     

    
      	
              22.2

            	
              Grossing-up for
      taxes.  If a Borrower is required by law to make a tax
      deduction from any payment:

            

    

     

    
      	
              (a)

            	
              that
      Borrower shall notify the Agent as soon as it becomes aware of the
      requirement;

            

    

     

    
      	
              (b)

            	
              that
      Borrower shall pay the tax deducted to the appropriate taxation authority
      promptly, and in any event before any fine or penalty
    arises;

            

    

     

    
      	
              (c)

            	
              the
      amount due in respect of the payment shall be increased by the amount
      necessary to ensure that each Creditor Party receives and retains (free
      from any liability relating to the tax deduction) a net amount which,
      after the tax deduction, is equal to the full amount which it would
      otherwise have received.

            

    

     

    
      	
              22.3

            	
              Evidence of payment of
      taxes.  Within 1 month after making any tax deduction,
      the Borrower concerned shall deliver to the Agent documentary evidence
      satisfactory to the Agent that the tax had been paid to the appropriate
      taxation authority.

            

    

     

    
      	
              22.4

            	
              Exclusion of tax on overall net
      income.  In this Clause 22 "tax deduction" means any
      deduction or withholding for or on account of any present or future tax
      except tax on a Creditor Party's overall net
  income.

            

    

     

    
      	
              22.5

            	
              Application to Master
      Agreements.  For the avoidance of doubt, Clause 22 does
      not apply in respect of sums due from a Borrower to a Swap Counterparty
      under or in connection with a Master Agreement as to which sums the
      provisions of section 2(d) (Deduction or Withholding for
      Tax) of that Master Agreement shall
  apply.

            

    

     

    
      	
              23

            	
              ILLEGALITY,
      ETC

            

    

     

    
      	
              23.1

            	
              Illegality.  This
      Clause 23 applies if a Lender (the "Notifying Lender")
      notifies the Agent that it has become, or will with effect from a
      specified date, become:

            

    

     

    
      	
              (a)

            	
              unlawful
      or prohibited as a result of the introduction of a new law, an amendment
      to an existing law or a change in the manner in which an existing law is
      or will be interpreted or applied;
or

            

    

     

    
      	
              (b)

            	
              contrary
      to, or inconsistent with, any
regulation,

            

    

     

    for the
Notifying Lender to maintain or give effect to any of its obligations under this
Agreement in the manner contemplated by this Agreement.

    

    
      	
              23.2

            	
              Notification of
      illegality.  The Agent shall promptly notify the
      Borrowers, the Security Parties, the Security Trustee and the other
      Lenders of the notice under Clause 23.1 which the Agent receives from the
      Notifying Lender.

            

    

     

    
      	
              23.3

            	
              Prepayment; termination of
      Commitment.  On the Agent notifying the Borrowers under
      Clause 23.2, the Notifying Lender's Commitment shall terminate; and
      thereupon or, if later, on the date specified in the Notifying Lender's
      notice under Clause 23.1 as the

            

    

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    date on
which the notified event would become effective the Borrowers shall prepay the
Notifying Lender's Contribution in accordance with Clause 8.

     

    
      	
              23.4

            	
              Mitigation. If
      circumstances arise which would result in a notification under
      Clause 23.1 then, without in any way limiting the rights of the
      Notifying Lender under Clause 23.3, the Notifying Lender shall use
      reasonable endeavours to transfer its obligations, liabilities and rights
      under this Agreement and the Finance Documents to another office or
      financial institution not affected by the circumstances but the Notifying
      Lender shall not be under any obligation to take any such action if, in
      its opinion, to do would or might:

            

    

     

    
      	
              (a)

            	
              have
      an adverse effect on its business, operations or financial condition;
      or

            

    

     

    
      	
              (b)

            	
              involve
      it in any activity which is unlawful or prohibited or any activity that is
      contrary to, or inconsistent with, any regulation;
  or

            

    

     

    
      	
              (c)

            	
              involve
      it in any expense (unless indemnified to its satisfaction) or tax
      disadvantage.

            

    

     

    
      	
              24

            	
              INCREASED
      COSTS

            

    

     

    
      	
              24.1

            	
              Increased
      costs.  This Clause 24 applies if a Lender (the "Notifying Lender")
      notifies the Agent that the Notifying Lender considers that as a result
      of:

            

    

     

    
      	
              (a)

            	
              the
      introduction or alteration after the date of this Agreement of a law or an
      alteration after the date of this Agreement in the manner in which a law
      is interpreted or applied (disregarding any effect which relates to the
      application to payments under this Agreement of a tax on the Lender's
      overall net income); or

            

    

     

    
      	
              (b)

            	
              complying
      with any regulation (including any which relates to capital adequacy or
      liquidity controls or which affects the manner in which the Notifying
      Lender allocates capital resources to its obligations under this
      Agreement) which is introduced, or altered, or the interpretation or
      application of which is altered, after the date of this
      Agreement,

            

    

     

    the
Notifying Lender (or a parent company of it) has incurred or will incur an
"increased
cost".

    

    
      	
              24.2

            	
              Meaning of "increase
      cost".  In this Clause 24, "increased cost" means,
      in relation to a Notifying Lender:

            

    

     

    
      	
              (a)

            	
              an
      additional or increased cost incurred as a result of, or in connection
      with, the Notifying Lender having entered into, or being a party to, this
      Agreement or a Transfer Certificate, of funding or maintaining its
      Commitment or Contribution or performing its obligations under this
      Agreement, or of having outstanding all or any part of its Contribution or
      other unpaid sums;

            

    

     

    
      	
              (b)

            	
              a
      reduction in the amount of any payment to the Notifying Lender under this
      Agreement or in the effective return which such a payment represents to
      the Notifying Lender or on its
capital;

            

    

     

    
      	
              (c)

            	
              an
      additional or increased cost of funding all or maintaining all or any of
      the advances comprised in a class of advances formed by or including the
      Notifying Lender's Contribution or (as the case may require) the
      proportion of that cost attributable to the Contribution;
    or

            

    

     

    
      	
              (d)

            	
              a
      liability to make a payment, or a return foregone, which is calculated by
      reference to any amounts received or receivable by the Notifying Lender
      under this Agreement,

            

    

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    but not
an item attributable to a change in the rate of tax on the overall net income of
the Notifying Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 21.1 or by Clause 22.

     

    For the
purposes of this Clause 24.2 the Notifying Lender may in good faith allocate or
spread costs and/or losses among its assets and liabilities (or any class of its
assets and liabilities) on such basis as it considers appropriate.

    

    
      	
              24.3

            	
              Notification to Borrowers of
      claim for increased costs.  The Agent shall promptly
      notify the Borrowers and the Security Parties of the notice which the
      Agent received from the Notifying Lender under Clause
  24.1.

            

    

     

    
      	
              24.4

            	
              Payment of increased
      costs.  The Borrowers shall pay to the Agent, on the
      Agent's demand, for the account of the Notifying Lender the amounts which
      the Agent from time to time notifies the Borrowers that the Notifying
      Lender has specified to be necessary to compensate the Notifying Lender
      for the increased cost.

            

    

     

    
      	
              24.5

            	
              Notice of
      prepayment.  If the Borrowers are not willing to continue
      to compensate the Notifying Lender for the increased cost under Clause
      24.4, the Borrowers may give the Agent not less than 14 days' notice of
      their intention to prepay the Notifying Lender's Contribution at the end
      of an Interest Period.

            

    

     

    
      	
              24.6

            	
              Prepayment; termination of
      Commitment.  A notice under Clause 24.5 shall be
      irrevocable; the Agent shall promptly notify the Notifying Lender of the
      Borrowers' notice of intended prepayment;
and:

            

    

     

    
      	
              (a)

            	
              on
      the date on which the Agent serves that notice, the Commitment of the
      Notifying Lender shall be cancelled;
and

            

    

     

    
      	
              (b)

            	
              on
      the date specified in its notice of intended prepayment, the Borrowers
      shall prepay (without premium or penalty) the Notifying Lender's
      Contribution, together with accrued interest thereon at the applicable
      rate plus the Margin.

            

    

     

    
      	
              24.7

            	
              Application of
      prepayment.  Clause 8 shall apply in relation to the
      prepayment.

            

    

     

    
      	
              25

            	
              SET-OFF

            

    

     

    
      	
              25.1

            	
              Application of credit
      balances.  Each Creditor Party may without prior
      notice:

            

    

     

    
      	
              (a)

            	
              apply
      any balance (whether or not then due) which at any time stands to the
      credit of any account in the name of a Borrower at any office in any
      country of that Creditor Party in or towards satisfaction of any sum then
      due from that Borrower to that Creditor Party under any of the Finance
      Documents; and

            

    

     

    
      	
              (b)

            	
              for
      that purpose:

            

    

     

    
      	
               
      

            	
              (i)

            	
              break,
      or alter the maturity of, all or any part of a deposit of that
      Borrower;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              convert
      or translate all or any part of a deposit or other credit balance into
      Dollars; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              enter
      into any other transaction or make any entry with regard to the credit
      balance which the Creditor Party concerned considers
      appropriate.

            

    

     

    
      	
              25.2

            	
              Existing rights
      unaffected.  No Creditor Party shall be obliged to
      exercise any of its rights under Clause 25.1; and those rights shall be
      without prejudice and in addition
to

            

    

     

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

    any right
of set-off, combination of accounts, charge, lien or other right or remedy to
which a Creditor Party is entitled (whether under the general law or any
document).

     

    
      	
              25.3

            	
              Sums deemed due to a
      Lender.  For the purposes of this Clause 25, a sum
      payable by the Borrowers to the Agent or the Security Trustee for
      distribution to, or for the account of, a Lender shall be treated as a sum
      due to that Lender; and each Lender's proportion of a sum so payable for
      distribution to, or for the account of, the Lenders shall be treated as a
      sum due to such Lender.

            

    

     

    
      	
              25.4

            	
              No Security
      Interest.  This Clause 25 gives the Creditor Parties a
      contractual right of set-off only, and does not create any equitable
      charge or other Security Interest over any credit balance of any
      Borrower.

            

    

     

    
      	
              26

            	
              TRANSFERS
      AND CHANGES IN LENDING OFFICES

            

    

     

    
      	
              26.1

            	
              Transfer by
      Borrowers.  No Borrower may, without the consent of the
      Agent, given on the instructions of all the Lenders transfer any of its
      rights, liabilities or obligations under any Finance
    Document.

            

    

     

    
      	
              26.2

            	
              Transfer by a
      Lender.  Subject to Clause 26.4, a Lender (the "Transferor Lender") may
      at any time, with the consent of the Borrowers (such consent not to be
      unreasonably withheld or delayed; and such consent not to be required in
      connection with or in contemplation of a securitisation (or similar
      transaction)) but otherwise without needing the consent of any Security
      Party, cause:

            

    

     

    
      	
              (a)

            	
              its
      rights in respect of all or part of its Contribution;
  or

            

    

     

    
      	
              (b)

            	
              its
      obligations in respect of all or part of its Commitment;
  or

            

    

     

    
      	
              (c)

            	
              a
      combination of (a) and (b),

            

    

     

    to be (in
the case of its rights) transferred to, or (in the case of its obligations)
assumed by, another bank or financial institution or a trust, fund or other
entity which is regularly engaged in or established for the purpose of making,
purchasing or investing in loans, securities or other financial assets (a "Transferee Lender") by
delivering to the Agent a completed certificate in the form set out in Schedule
5 with any modifications approved or required by the Agent (a "Transfer Certificate")
executed by the Transferor Lender and the Transferee Lender.

     

    However
any rights and obligations of the Transferor Lender in its capacity as Agent or
Security Trustee will have to be dealt with separately in accordance with the
Agency and Trust Agreement.

     

    
      	
              26.3

            	
              Transfer Certificate, delivery
      and notification.  As soon as reasonably practicable
      after a Transfer Certificate is delivered to the Agent, it shall (unless
      it has reason to believe that the Transfer Certificate may be
      defective):

            

    

     

    
      	
              (a)

            	
              sign
      the Transfer Certificate on behalf of itself, the Borrowers, the Security
      Parties, the Security Trustee, each of the other Lenders and each of the
      Swap Banks;

            

    

     

    
      	
              (b)

            	
              on
      behalf of the Transferee Lender, send to each Borrower and each Security
      Party letters or faxes notifying them of the Transfer Certificate and
      attaching a copy of it; and

            

    

     

    
      	
              (c)

            	
              send
      to the Transferee Lender copies of the letters or faxes sent under
      paragraph (b) above,

            

    

     

    but the
Agent shall only be obliged to execute a Transfer Certificate delivered to it by
the Transferor Lender and the Transferee Lender once it is satisfied it has
complied with all

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

    necessary
"know your customer" or other similar checks under all applicable laws and
regulations in relation to the transfer to that Transferee Lender.

    

    
      	
              26.4

            	
              Effective Date of Transfer
      Certificate.  A Transfer Certificate becomes effective on
      the date, if any, specified in the Transfer Certificate as its effective
      date, Provided
      that it is signed by the Agent under Clause 26.3 on or before that
      date.

            

    

     

    
      	
              26.5

            	
              No transfer without Transfer
      Certificate.  No assignment or transfer of any right or
      obligation of a Lender under any Finance Document is binding on, or
      effective in relation to, any Borrower, any Security Party, the Agent or
      the Security Trustee unless it is effected, evidenced or perfected by a
      Transfer Certificate.

            

    

     

    
      	
              26.6

            	
              Lender re-organisation; waiver
      of Transfer Certificate.  However, if a Lender enters
      into any merger, de-merger or other reorganisation as a result of which
      all its rights or obligations vest in another person (the "successor"), the Agent
      may, if it sees fit, by notice to the successor and the Borrowers and the
      Security Trustee waive the need for the execution and delivery of a
      Transfer Certificate; and, upon service of the Agent's notice, the
      successor shall become a Lender with the same Commitment and Contribution
      as were held by the predecessor
Lender.

            

    

     

    
      	
              26.7

            	
              Effect of Transfer
      Certificate.  A Transfer Certificate takes effect in
      accordance with English law as
follows:

            

    

     

    
      	
              (a)

            	
              to
      the extent specified in the Transfer Certificate, all rights and interests
      (present, future or contingent) which the Transferor Lender has under or
      by virtue of the Finance Documents are assigned to the Transferee Lender
      absolutely, free of any defects in the Transferor Lender's title and of
      any rights or equities which any Borrower or any Security Party had
      against the Transferor Lender;

            

    

     

    
      	
              (b)

            	
              the
      Transferor Lender's Commitment is discharged to the extent specified in
      the Transfer Certificate;

            

    

     

    
      	
              (c)

            	
              the
      Transferee Lender becomes a Lender with the Contribution previously held
      by the Transferor Lender and a Commitment of an amount specified in the
      Transfer Certificate;

            

    

     

    
      	
              (d)

            	
              the
      Transferee Lender becomes bound by all the provisions of the Finance
      Documents which are applicable to the Lenders generally, including those
      about pro-rata sharing and the exclusion of liability on the part of, and
      the indemnification of, the Agent and the Security Trustee and, to the
      extent that the Transferee Lender becomes bound by those provisions (other
      than those relating to exclusion of liability), the Transferor Lender
      ceases to be bound by them;

            

    

     

    
      	
              (e)

            	
              any
      part of the Loan which the Transferee Lender advances after the Transfer
      Certificate's effective date ranks in point of priority and security in
      the same way as it would have ranked had it been advanced by the
      transferor, assuming that any defects in the transferor's title and any
      rights or equities of any Borrower or any Security Party against the
      Transferor Lender had not existed;

            

    

     

    
      	
              (f)

            	
              the
      Transferee Lender becomes entitled to all the rights under the Finance
      Documents which are applicable to the Lenders generally, including but not
      limited to those relating to the Majority Lenders and those under Clause
      5.7 and Clause 20, and to the extent that the Transferee Lender becomes
      entitled to such rights, the Transferor Lender ceases to be entitled to
      them; and

            

    

     

    
      	
              (g)

            	
              in
      respect of any breach of a warranty, undertaking, condition or other
      provision of a Finance Document or any misrepresentation made in or in
      connection with a Finance Document, the Transferee Lender shall be
      entitled to recover damages by reference to
the

            

    

     

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

    loss
incurred by it as a result of the breach or misrepresentation, irrespective of
whether the original Lender would have incurred a loss of that kind or
amount.

     

    The
rights and equities of any Borrower or any Security Party referred to above
include, but are not limited to, any right of set off and any other kind of
cross-claim.

    

    
      	
              26.8

            	
              Maintenance of register of
      Lenders.  During the Security Period the Agent shall
      maintain a register in which it shall record the name, Commitment,
      Contribution and administrative details (including the lending office)
      from time to time of each Lender holding a Transfer Certificate and the
      effective date (in accordance with Clause 26.4) of the Transfer
      Certificate; and the Agent shall make the register available for
      inspection by any Lender, the Security Trustee and the Borrowers during
      normal banking hours, subject to receiving at least 3 Business Days' prior
      notice.

            

    

     

    
      	
              26.9

            	
              Reliance on register of
      Lenders.  The entries on that register shall, in the
      absence of manifest error, be conclusive in determining the identities of
      the Lenders and the amounts of their Commitments and Contributions and the
      effective dates of Transfer Certificates and may be relied upon by the
      Agent and the other parties to the Finance Documents for all purposes
      relating to the Finance Documents.

            

    

     

    
      	
              26.10

            	
              Authorisation of Agent to sign
      Transfer Certificates.  Each Borrower, the Security
      Trustee, each Lender and each Swap Bank irrevocably authorise the Agent to
      sign Transfer Certificates on its
behalf.

            

    

     

    
      	
              26.11

            	
              Registration
      fee.  In respect of any Transfer Certificate, the Agent
      shall be entitled to recover a registration fee of $1,000 from the
      Transferor Lender or (at the Agent's option) the Transferee
      Lender.

            

    

     

    
      	
              26.12

            	
              Sub-participation;
      securitisation; subrogation
assignment.

            

    

     

    
      	
              (a)

            	
              A
      Lender may sub-participate or include in a securitisation or similar
      transaction all or any part of its rights and/or obligations under or in
      connection with the Finance Documents without the consent of, or any
      consultation with or notice to, any Borrower, any Security Party, the
      Agent or the Security Trustee; and the Lenders may assign, in any manner
      and terms agreed by the Majority Lenders, the Agent and the Security
      Trustee, all or any part of those rights to an insurer or surety who has
      become subrogated to them.

            

    

     

    
      	
              (b)

            	
              Each
      Borrower shall, and shall procure that each Security Party shall, do
      everything desirable or necessary to assist the Creditor Parties (or any
      of them) to achieve a successful (in the opinion of the Creditor Parties
      concerned) securitisation (or similar transaction) Provided only that the
      Borrowers' third party costs are met by the Creditor Parties
      concerned.

            

    

     

    
      	
              26.13

            	
              Disclosure of
      information.  In relation to any information which a
      Creditor Party has received in relation to either Borrower, any Security
      Party or their affairs under or in connection with any Finance Document or
      any Master Agreement, that Creditor Party may disclose any such
      information as it considers in its absolute discretion appropriate
      to:

            

    

     

    
      	
              (a)

            	
              a
      potential Transferee Lender, sub-participant, affiliate, any other
      assignee or transferee or any other person who may propose entering into a
      contractual relation with that Creditor Party in relation to this
      Agreement; and/or

            

    

     

    
      	
              (b)

            	
              any
      direct or indirect subsidiary, any direct or indirect parent company
      (including, for the avoidance of doubt in the case of the DVB Group, DZ
      Bank A.G.), any affiliate or any other company in its group;
      and/or

            

    

     

    
      	
              (c)

            	
              any
      authorities or any party to any Finance Document or any professional
      adviser to that Creditor Party;
and/or

            

    

     

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

    
      	
              (d)

            	
              any
      other person regarding the funding, operational arrangement or other
      transaction in relation thereto,

            

    

     

    and
including, without limitation, (x) for purposes in connection with (1) any
enforcement or (2) assignment or transfer of any Creditor Party's rights or
obligations under any Master Agreement or any Finance Document or (y) to the
extent desirable or necessary in connection with or in contemplation of a
securitisation (or similar transaction).

    

    
      	
              26.14

            	
              Change of lending
      office.  A Lender may change its lending office by giving
      notice to the Agent and the change shall become effective on the later
      of:

            

    

     

    
      	
              (a)

            	
              the
      date on which the Agent receives the notice;
and

            

    

     

    
      	
              (b)

            	
              the
      date, if any, specified in the notice as the date on which the change will
      come into effect.

            

    

     

    
      	
              26.15

            	
              Notification.  On
      receiving such a notice, the Agent shall notify the Borrowers and the
      Security Trustee; and, until the Agent receives such a notice, it shall be
      entitled to assume that a Lender is acting through the lending office of
      which the Agent last had notice.

            

    

     

    
      	
              26.16

            	
              Replacement of Reference
      Bank.  If any Reference Bank ceases to be a Lender or is
      unable on a continuing basis to supply quotations for the purposes of
      Clause 5 then, unless the Borrowers, the Agent and the Majority Lenders
      otherwise agree, the Agent, acting on the instructions of the Majority
      Lenders, and after consulting the Borrowers, shall appoint another bank
      (whether or not a Lender) to be a replacement Reference Bank; and, when
      that appointment comes into effect, the first-mentioned Reference Bank's
      appointment shall cease to be
effective.

            

    

     

    
      	
              26.17

            	
              Syndication.

            

    

     

    
      	
              (a)

            	
              If
      the Borrowers agree to the syndication of this Agreement but after a
      period of at least 3 months after the date of this Agreement has elapsed,
      it appears likely (in the Agent's reasonable opinion) that the normal
      syndication process of this Agreement on the basis of the agreed,
      structure, terms and pricing will not be successful, the Borrowers
      acknowledge that the Agent has the right at any time to change any or all
      of the terms, structure and/or pricing of the Loan if the Agent determines
      that such changes are advisable in order to ensure a successful
      syndication of this Agreement.

            

    

     

    
      	
              (b)

            	
              If
      the Agent determines such changes are necessary, the Agent will consult
      with the Borrowers for a period of up to 5 Business Days about such
      changes and, following such period of consultation but subject to Clause
      26.17(c), the Borrowers will and will procure that each Security Party
      will enter into any documentation in a form required by the Agent to
      implement such changes required by the Agent (including, without
      limitation, any documentation required to amend the Finance Documents and
      to secure the Borrowers' and the Security Parties' liabilities and
      obligations under the Finance Documents as amended and/or
      supplemented).

            

    

     

    
      	
              (c)

            	
              If
      either Borrower or any Security Party does not agree with such changes
      required by the Agent, the Borrowers may give the Agent within a period of
      5 days following the expiry of the consultation period not less than 14
      days' notice of its intention to terminate the Commitments and prepay the
      Loan in full at the end of the current Interest
  Period.

            

    

     

    
      	
              (d)

            	
              A
      notice under Clause 26.17(c) shall be irrevocable; the Agent shall
      promptly notify the Lenders of the Borrowers' notice of intended
      prepayment; and:

            

    

     

    
      	
               
      

            	
              (i)

            	
              on
      the date on which the Agent serves that notice, the Total Commitments
      shall be cancelled; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              on
      the date specified in its notice of intended prepayment, the Borrowers
      shall prepay (without premium or penalty) the Loan, together with accrued
      interest thereon at the applicable rate plus the
  Margin.

            

    

     

    
      	
              (e)

            	
              Clause
      8 shall apply in relation to any such
  prepayment.

            

    

     

    
      	
              27

            	
              VARIATIONS
      AND WAIVERS

            

    

     

     

    
      
         

      

      
        62

        
          

        

      

      
         

      

    

     

     

    
      	
              27.1

            	
              Variations, waivers etc. by
      Majority Lenders.  Subject to Clause 27.2, a document
      shall be effective to vary, waive, suspend or limit any provision of a
      Finance Document, or any Creditor Party's rights or remedies under such a
      provision or the general law, only if the document is signed, or
      specifically agreed to by fax, by the Borrowers, by the Agent on behalf of
      the Majority Lenders, by the Agent and the Security Trustee in their own
      rights, and, if the document relates to a Finance Document to which a
      Security Party is party, by that Security
Party.

            

    

     

    
      	
              27.2

            	
              Variations, waivers etc.
      requiring agreement of all Lenders.  However, as regards
      the following, Clause 27.1 applies as if the words "by the Agent on behalf
      of the Majority Lenders" were replaced by the words "by or on behalf of
      every Lender and every Swap Bank":

            

    

     

    
      	
              (a)

            	
              a
      change in the Margin or in the definition of
  LIBOR;

            

    

     

    
      	
              (b)

            	
              a
      change to the date for, the amount of, any payment of principal, interest,
      fees, or other sum payable under this
Agreement;

            

    

     

    
      	
              (c)

            	
              a
      change to any Lender's Commitment;

            

    

     

    
      	
              (d)

            	
              an
      extension of Availability Period;

            

    

     

    
      	
              (e)

            	
              a
      change to the definition of "Majority Lenders" or
      "Finance
      Documents";

            

    

     

    
      	
              (f)

            	
              a
      change to the preamble or to Clause 2, 3, 4, 5.1, 17, 18 or
      30;

            

    

     

    
      	
              (g)

            	
              a
      change to this Clause 27;

            

    

     

    
      	
              (h)

            	
              any
      release of, or material variation to, a Security Interest, guarantee,
      indemnity or subordination arrangement set out in a Finance Document;
      and

            

    

     

    
      	
              (i)

            	
              any
      other change or matter as regards which this Agreement or another Finance
      Document expressly provides that each Lender's consent is
      required.

            

    

     

    
      	
              27.3

            	
              Exclusion of other or implied
      variations.  Except for a document which satisfies the
      requirements of Clauses 27.1 and 27.2, no document, and no act, course of
      conduct, failure or neglect to act, delay or acquiescence on the part of
      the Creditor Parties or any of them (or any person acting on behalf of any
      of them) shall result in the Creditor Parties or any of them (or any
      person acting on behalf of any of them) being taken to have varied,
      waived, suspended or limited, or being precluded (permanently or
      temporarily) from enforcing, relying on or
  exercising:

            

    

     

    
      	
              (a)

            	
              a
      provision of this Agreement or another Finance Document;
  or

            

    

     

    
      	
              (b)

            	
              an
      Event of Default; or

            

    

     

    
      	
              (c)

            	
              a
      breach by a Borrower or a Security Party of an obligation under a Finance
      Document or the general law; or

            

    

     

    
      	
              (d)

            	
              any
      right or remedy conferred by any Finance Document or by the general
      law,

            

    

     

    
      	
               
      

            	
              and
      there shall not be implied into any Finance Document any term or condition
      requiring any such provision to be enforced, or such right or remedy to be
      exercised, within a certain or reasonable
time.

            

    

     

    

    
      	
              28

            	
              NOTICES

            

    

     

     

    
      
         

      

      
        63

        
          

        

      

      
         

      

    

     

     

    
      	
              28.1

            	
              General.  Unless
      otherwise specifically provided, any notice under or in connection with
      any Finance Document shall be given by letter or fax; and references in
      the Finance Documents to written notices, notices in writing and notices
      signed by particular persons shall be construed
    accordingly.

            

    

     

    
      	
              28.2

            	
              Addresses for
      communications.  A notice by letter or fax shall be
      sent:

            

    

     

    
      
        
          
            	
                    (a)

                  	
                    to
      the Borrowers:

                  	
                    c/o
      Top Tanker Management Inc.

                  
	 
      	 
      	
                    1
      Vassilissis Sofias Str. & Meg. Alexandrou Str.

                  
	 
      	 
      	
                    151
      24, Maroussi

                  
	 
      	 
      	
                    Greece

                  
	 
      	 
      	 
      
	 
      	 
      	
                    Fax
      No:  +30 210 614 1204;

                  
	 
      	 
      	 
      
	
                    (b)

                  	
                    to
      a Lender or a Swap Bank

                  	
                    at
      the address below its name in Schedule 1 (in the case of a Lender),
      Schedule 2 (in the case of a Swap Bank) or (as the case may require) in
      the relevant Transfer Certificate;

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    (c)

                  	
                    to
      the Agent:

                  	
                    Zeelandia
      Office Park

                  
	 
      	
                    and/or
      the Security Trustee:

                  	
                    Kaya
      W.F.G. Mensing 14

                  
	 
      	 
      	
                    P.O.
      Box 3107, Curaçao

                  
	 
      	 
      	
                    Netherlands
      Antilles

                  
	 
      	 
      	
                    Attention:
      Natacha Bloem

                  
	 
      	 
      	 
      
	 
      	 
      	
                    Fax
      No: +599 9 465 2366

                  
	 
      	 
      	 
      
	 
      	 
      	
                    with
      a copy to:

                  
	 
      	 
      	
                    DVB
      Bank SE, Rep. Office Greece

                  
	 
      	 
      	
                    95
      Akti Miaouli

                  
	 
      	 
      	
                    185
      38 Piraeus

                  
	 
      	 
      	
                    Greece

                  
	 
      	 
      	
                    Attention:
      Nikolas Chontzopoulos

                  
	 
      	 
      	
                    Fax
      No: +30 210 455 7420

                  
	 
      	 
      	 
      
	 
      	or
      to such other address as the relevant party may notify the Agent or, if
      the relevant party is the Agent or the Security Trustee, the Borrowers,
      the Lenders, the Swap Banks and the Security
Parties.

          

        

      

    
      	
              28.3

            	
              Effective date of
      notices.  Subject to Clauses 28.4 and
    28.5:

            

    

     

    
      	
              (a)

            	
              a
      notice which is delivered personally or posted shall be deemed to be
      served, and shall take effect, at the time when it is delivered;
      and

            

    

     

    
      	
              (b)

            	
              a
      notice which is sent by fax shall be deemed to be served, and shall take
      effect, 2 hours after its transmission is
  completed.

            

    

     

    
      	
              28.4

            	
              Service outside business
      hours.  However, if under Clause 28.3 a notice would be
      deemed to be served:

            

    

     

    

      
        
           

        

        
          64

          
            

          

        

        
           

        

      

    
      	
              (a)

            	
              on
      a day which is not a business day in the place of receipt;
    or

            

    

     

    
      	
              (b)

            	
              on
      such a business day, but after 5 p.m. local
  time,

            

    

     

    the
notice shall (subject to Clause 28.5) be deemed to be served, and shall take
effect, at 9 a.m. on the next day which is such a business day.

    

    
      	
              28.5

            	
              Illegible
      notices.  Clauses 28.3 and 28.4 do not apply if the
      recipient of a notice notifies the sender within 1 hour after the time at
      which the notice would otherwise be deemed to be served that the notice
      has been received in a form which is illegible in a material
      respect.

            

    

     

    
      	
              28.6

            	
              Valid
      notices.  A notice under or in connection with a Finance
      Document shall not be invalid by reason that its contents or the manner of
      serving it do not comply with the requirements of this Agreement or, where
      appropriate, any other Finance Document under which it is served
      if:

            

    

     

    
      	
              (a)

            	
              the
      failure to serve it in accordance with the requirements of this Agreement
      or other Finance Document, as the case may be, has not caused any party to
      suffer any significant loss or
  prejudice;  or

            

    

     

    
      	
              (b)

            	
              in
      the case of incorrect and/or incomplete contents, it should have been
      reasonably clear to the party on which the notice was served what the
      correct or missing particulars should have
been.

            

    

     

    
      	
              28.7

            	
              Electronic
      communication.  Any communication to be made between the
      Agent and a Lender under or in connection with the Finance Documents may
      be made by electronic mail or other electronic means, if the Agent and the
      relevant Lender:

            

    

     

    
      	
              (a)

            	
              agree
      that, unless and until notified to the contrary, this is to be an accepted
      form of communication;

            

    

     

    
      	
              (b)

            	
              notify
      each other in writing of their electronic mail address and/or any other
      information required to enable the sending and receipt of information by
      that means; and

            

    

     

    
      	
              (c)

            	
              notify
      each other of any change to their respective addresses or any other such
      information supplied to them.

            

    

     

    Any
electronic communication made between the Agent and a Lender will be effective
only when actually received in readable form and, in the case of any electronic
communication made by a Lender to the Agent, only if it is addressed in such a
manner as the Agent shall specify for this purpose.

    

    
      	
              28.8

            	
              English
      language.  Any notice under or in connection with a
      Finance Document shall be in
English.

            

    

     

    
      	
              28.9

            	
              Meaning of
      "notice".  In this Clause 28, "notice" includes any
      demand, consent, authorisation, approval, instruction, waiver or other
      communication.

            

    

     

    
      	
              29

            	
              JOINT
      AND SEVERAL LIABILITY

            

    

     

    
      	
              29.1

            	
              General.  All
      liabilities and obligations of the Borrowers under this Agreement shall,
      whether expressed to be so or not, be several and, if and to the extent
      consistent with Clause 29.2, joint.

            

    

     

    
      	
              29.2

            	
              No impairment of Borrower's
      obligations.  The liabilities and obligations of a
      Borrower shall not be impaired by:

            

    

     

    
      	
              (a)

            	
              this
      Agreement being or later becoming void, unenforceable or illegal as
      regards any other Borrower;

            

    

     

    

      
        
           

        

        
          65

          
            

          

        

        
           

        

      

    
      	
              (b)

            	
              any
      Lender or the Security Trustee entering into any rescheduling, refinancing
      or other arrangement of any kind with any other
  Borrower;

            

    

     

    
      	
              (c)

            	
              any
      Lender or the Security Trustee releasing any other Borrower or any
      Security Interest created by a Finance Document;
  or

            

    

     

    
      	
              (d)

            	
              any
      combination of the foregoing.

            

    

     

    
      	
              29.3

            	
              Principal
      debtors.  Each Borrower declares that it is and will,
      throughout the Security Period, remain a principal debtor for all amounts
      owing under this Agreement and the Finance Documents and no Borrower shall
      in any circumstances be construed to be a surety for the obligations of
      any other Borrower under this
Agreement.

            

    

     

    
      	
              29.4

            	
              Subordination.  Subject
      to Clause 29.5, during the Security Period, no Borrower
    shall:

            

    

     

    
      	
              (a)

            	
              claim
      any amount which may be due to it from any other Borrower whether in
      respect of a payment made, or matter arising out of, this Agreement or any
      Finance Document, or any matter unconnected with this Agreement or any
      Finance Document; or

            

    

     

    
      	
              (b)

            	
              take
      or enforce any form of security from any other Borrower for such an
      amount, or in any other way seek to have recourse in respect of such an
      amount against any asset of any other Borrower;
  or

            

    

     

    
      	
              (c)

            	
              set
      off such an amount against any sum due from it to any other Borrower;
      or

            

    

     

    
      	
              (d)

            	
              prove
      or claim for such an amount in any liquidation, administration,
      arrangement or similar procedure involving any other Borrower or other
      Security Party; or

            

    

     

    
      	
              (e)

            	
              exercise
      or assert any combination of the
foregoing.

            

    

     

    
      	
              29.5

            	
              Borrower's required
      action.  If during the Security Period, the Agent, by
      notice to a Borrower, requires it to take any action referred to in
      paragraphs (a) to (d) of Clause 29.4, in relation to any other Borrower,
      that Borrower shall take that action as soon as practicable after
      receiving the Agent's notice.

            

    

     

    
      	
              30

            	
              SUPPLEMENTAL

            

    

     

    
      	
              30.1

            	
              Rights cumulative,
      non-exclusive.  The rights and remedies which the Finance
      Documents give to each Creditor Party
are:

            

    

     

    
      	
              (a)

            	
              cumulative;

            

    

     

    
      	
              (b)

            	
              may
      be exercised as often as appears expedient;
and

            

    

     

    
      	
              (c)

            	
              shall
      not, unless a Finance Document explicitly and specifically states so, be
      taken to exclude or limit any right or remedy conferred by any
      law.

            

    

     

    
      	
              30.2

            	
              Severability of
      provisions.  If any provision of a Finance Document is or
      subsequently becomes void, unenforceable or illegal, that shall not affect
      the validity, enforceability or legality of the other provisions of that
      Finance Document or of the provisions of any other Finance
      Document.

            

    

     

    
      	
              30.3

            	
              Counterparts.  A
      Finance Document may be executed in any number of
      counterparts.

            

    

     

    
      	
              30.4

            	
              Third party
      rights.  A person who is not a party to this Agreement
      has no right under the Contracts (Rights of Third Parties) Act 1999 to
      enforce or to enjoy the benefit of any term of this
    Agreement.

            

    

     

    
      
        	
                31

              	
                LAW
      AND JURISDICTION

              

      

       

    

    

      
        
           

        

        
          66

          
            

          

        

        
           

        

      

    

     

     

    
      	
              31.1

            	
              English
      law.  This Agreement shall be governed by, and construed
      in accordance with, English law.

            

    

     

    
      	
              31.2

            	
              Exclusive English
      jurisdiction.  Subject to Clause 31.3, the courts of
      England shall have exclusive jurisdiction to settle any disputes which may
      arise out of or in connection with this
  Agreement.

            

    

     

    
      	
              31.3

            	
              Choice of forum for the
      exclusive benefit of the Creditor Parties.  Clause 31.2
      is for the exclusive benefit of the Creditor Parties, each of which
      reserves the right:

            

    

     

    
      	
              (a)

            	
              to
      commence proceedings in relation to any matter which arises out of or in
      connection with this Agreement in the courts of any country other than
      England and which have or claim jurisdiction to that matter;
      and

            

    

     

    
      	
              (b)

            	
              to
      commence such proceedings in the courts of any such country or countries
      concurrently with or in addition to proceedings in England or without
      commencing proceedings in England.

            

    

     

    Neither
Borrower shall commence any proceedings in any country other than England in
relation to a matter which arises out of or in connection with this
Agreement.

    

    
      	
              31.4

            	
              Process
      agent.  Each Borrower irrevocably appoints Top Tankers
      (U.K.) Limited at its registered office for the time being, presently at
      3rd Floor, 8 Duke Street, London W1U 3EW, to act as its agent to
      receive and accept on its behalf any process or other document relating to
      any proceedings in the English courts which are connected with this
      Agreement.

            

    

     

    
      	
              31.5

            	
              Creditor Party rights
      unaffected.  Nothing in this Clause 31 shall exclude or
      limit any right which any Creditor Party may have (whether under the law
      of any country, an international convention or otherwise) with regard to
      the bringing of proceedings, the service of process, the recognition or
      enforcement of a judgment or any similar or related matter in any
      jurisdiction.

            

    

     

    
      	
              31.6

            	
              Meaning of
      "proceedings".  In this Clause 31, "proceedings" means
      proceedings of any kind, including an application for a provisional or
      protective measure.

            

    

     

    THIS AGREEMENT has been
entered into on the date stated at the beginning of this
Agreement.

    
      
         

      

      
        67

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

    LENDERS
AND COMMITMENTS

     

    

    

    
      
        
          
            
              
                	
                        Lender

                      	
                        Lending
      Office

                      	
                        Commitment

                        (US
      Dollars)

                      
	 	 	 
	
                        DVB
      Bank America N.V.

                      	
                        Zeelandia
      Office Park

                        Kaya
      W.F.G. Mensing 14

                        P.O.
      Box 3107

                        Curaçao

                        Netherlands
      Antilles

                      	
                        80,000,000

                      

              

            

          

        

      

    

     

     

    
 

    
      
         

      

      
        68

        
          

        

      

      
         

      

    

    SCHEDULE
2

     

    SWAP
BANKS

     

    

    
      
        
          
            
              	
                      Swap
      Bank

                    	
                      Booking
      Office

                    
	 	 
	 DVB
      Bank SE	
                      Platz
      der Republik 6

                      D-60325 Frankfurt am Main

                      Germany

                    

            

          

        

      

    

    

                                                                              

    
      
         

      

      
        69

        
          

        

      

      
         

      

    

    SCHEDULE
3

     

    DRAWDOWN
NOTICE

     

    

    To:          DVB
Bank America N.V.

    Zeelandia
Office Park

    Kaya
W.F.G. Mensing 14

    P.O. Box
3107

    Curaçao

    Netherlands
Antilles

     

     

    
      	 Attention:
      Loans Administration	
                [date]

            

    

     

    

    DRAWDOWN
NOTICE

    

    
      	
              1

            	
              We
      refer to the loan agreement (the "Loan Agreement") dated
      [l] October
      2008 and made between ourselves, as Borrowers, the Lenders referred to
      therein, the Swap Banks referred to therein, and yourselves as Agent and
      as Security Trustee in connection with a facility of up to
      US$80,000,000.  Terms defined in the Loan Agreement have their
      defined meanings when used in this Drawdown
  Notice.

            

    

     

    
      	
              2

            	
              We
      request to borrow an Advance relating to the Ship with hull number
      S-[l] as
      follows:

            

    

     

    
      	
              (a)

            	
              Amount:
      US$[l];

            

    

     

    
      	
              (b)

            	
              Drawdown
      Date: [l];

            

    

     

    
      	
              (c)

            	
              [Duration
      of the first Interest Period shall be [l] months;]
      and

            

    

     

    
      	
              (d)

            	
              Payment
      instructions: [l].

            

    

     

    
      	
              3

            	
              We
      represent and warrant that:

            

    

     

    
      	
              (a)

            	
              the
      representations and warranties in Clause 10 of the Loan Agreement would
      remain true and not misleading if repeated on the date of this notice with
      reference to the circumstances now existing;
and

            

    

     

    
      	
              (b)

            	
              no
      Event of Default or Potential Event of Default has occurred or will result
      from the borrowing of the Loan.

            

    

     

    
      	
              4

            	
              This
      notice cannot be revoked without the prior consent of the Majority
      Lenders.

            

    

     

    
      	
              5

            	
              [We
      authorise you to deduct the fees referred to in Clause 20 from the amount
      of the Advance.]

            

    

     

    

    

    

                                    

    for and
on behalf of

    BANKSY SHIPPING COMPANY
LIMITED
and

    HONGBO
SHIPPING COMPANY LIMITED

    
      
         

      

      
        70

        
          

        

      

      
         

      

    

    SCHEDULE
4

     

    CONDITION
PRECEDENT DOCUMENTS

     

    

    PART
A

    

    The
following are the documents referred to in Clause 9.1(a) required before service
of the first Drawdown Notice.

     

    
      	
              1

            	
              A
      duly executed original of each Finance Document (and of each document
      required to be delivered by each Finance Document) other than those
      referred to in Part B or Part C.

            

    

     

    
      	
              2

            	
              Copies
      of the constitutional documents of each Borrower and each Security
      Party.

            

    

     

    
      	
              3

            	
              Copies
      of resolutions of the shareholders and directors of each Borrower and each
      Security Party authorising the execution of each of the Finance Documents
      and the Transaction Documents to which that Borrower or that Security
      Party is a party and, in the case of a Borrower, authorising named
      officers to give the Drawdown Notices and other notices under this
      Agreement and ratifying the execution of the Transaction Documents to
      which it is a party.

            

    

     

    
      	
              4

            	
              The
      original of any power of attorney under which any Finance Document is
      executed on behalf of a Borrower or a Security
  Party.

            

    

     

    
      	
              5

            	
              Copies
      of all consents which any Borrower or any Security Party requires to enter
      into, or make any payment under, any Finance Document or any Transaction
      Document.

            

    

     

    
      	
              6

            	
              Copies
      of each Shipbuilding Contract and of all documents signed or issued by any
      party to that Shipbuilding Contract under or in connection with
      it.

            

    

     

    
      	
              7

            	
              Such
      documentary evidence as the Agent and its legal advisers may require in
      relation to the due authorisation and execution by any party to a
      Shipbuilding Contract of that Shipbuilding Contract and of all documents
      to be executed by that party under that Shipbuilding
    Contract.

            

    

     

    
      	
              8

            	
              The
      original of each Refund Guarantee together with such documentary evidence
      as the Agent and its legal advisers may require in relation to the due
      authorisation and execution by the Refund Guarantor of each Refund
      Guarantee.

            

    

     

    
      	
              9

            	
              Documentary
      evidence that the agent for service of process named in Clause 31 has
      accepted its appointment.

            

    

     

    
      	
              10

            	
              Favourable
      legal opinions from lawyers appointed by the Agent on such matters
      concerning the laws of Liberia, the Marshall Islands and Korea and such
      other relevant jurisdictions as the Agent may
  require.

            

    

     

    
      	
              11

            	
              A
      duly completed DVB LAM Form signed by the
  Borrowers.

            

    

     

    
      	
              12

            	
              All
      documentation required by each Lender in respect of either Borrower or any
      Security Party pursuant to that Lender's "Know your customer"
      requirements.

            

    

     

    
      	
              13

            	
              If
      the Agent so requires, in respect of any of the documents referred to
      above, a certified English translation prepared by a translator approved
      by the Agent.

            

    

     

    

    

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

     

    PART
B

    

    The
following are the documents referred to in Clause 9.1(c) required before the
Advance relating to the delivery instalment under the Shipbuilding Contract for
Ship A:

     

    
      	
              1

            	
              A
      duly executed original of the Mortgage, the Quadripartite Agreement (if
      not already executed), the Charter Assignment (if not already executed),
      the Account Security Deed and of the General Assignment relating to Ship A
      (and of each document to be delivered by each of
  them).

            

    

     

    
      	
              2

            	
              The
      originals of any mandates or other documents required in connection with
      the opening or operation of the Earnings Account relation to Ship
      A.

            

    

     

    
      	
              3

            	
              Documentary
      evidence that:

            

    

     

    
      	
              (a)

            	
              Ship
      A has been unconditionally delivered by the Builder to, and accepted by,
      Banksy under the Shipbuilding Contract, and the full purchase price
      payable under the Shipbuilding Contract (in addition to the part to be
      financed by the Loan) has been duly
paid;

            

    

     

    
      	
              (b)

            	
              Ship
      A has been unconditionally delivered by Banksy to, and accepted by, the
      relevant Charterer under the
Charter;

            

    

     

    
      	
              (c)

            	
              Ship
      A is definitively and permanently registered in the name of Banksy under
      Maltese flag;

            

    

     

    
      	
              (d)

            	
              Ship
      A is in the absolute and unencumbered ownership of Banksy save as
      contemplated by the Finance
Documents;

            

    

     

    
      	
              (e)

            	
              Ship
      A maintains the class set out in article 1(b)(i) of the Shipbuilding
      Contract with Det norske Veritas free of all recommendations and
      conditions of such Classification Society (with the Agent being advised of
      such class and classification society at least 15 days prior to the
      Drawdown Date);

            

    

     

    
      	
              (f)

            	
              the
      Mortgage relating to Ship A has been duly registered against Ship A as a
      valid first priority Maltese ship mortgage in accordance with the laws of
      Malta; and

            

    

     

    
      	
              (g)

            	
              Ship
      A is insured in accordance with the provisions of this Agreement and all
      requirements therein in respect of insurances have been complied
      with.

            

    

     

    
      	
              4

            	
              Copies
      of the Document of Compliance relating to Ship A and of Ship A's Safety
      Management Certificate (together with any other details of the applicable
      safety management system which the Agent requires), ISSC and
      IAPPC.

            

    

     

    
      	
              5

            	
              Favourable
      legal opinions from lawyers appointed by the Agent on such matters
      concerning the law of Malta, Liberia and such other relevant jurisdictions
      as the Agent may require.

            

    

     

    
      	
              6

            	
              A
      favourable opinion from an independent insurance consultant acceptable to
      the Agent on such matters relating to the insurances for Ship A as the
      Agent may require (with the Agent being advised with whom such insurances
      will be placed and upon what main terms they will be effected at least 15
      days prior to the Drawdown Date).

            

    

     

    
      	
              7

            	
              Such
      documentary evidence as the Agent and its legal advisers may require in
      relation to the due authorisation and execution by any party to the
      Quadripartite Agreement of that Quadripartite Agreement and of all
      documents to be executed by that party under that Quadripartite
      Agreement.

            

    

     

    
      	
              8

            	
              Copies
      of all charters of Ship A and related
documents.

            

    

     

     

    
      
         

      

      
        72

        
          

        

      

      
         

      

    

     

     

    
      	
              9

            	
              A
      survey report addressed to the Agent and the Lenders, stated to be for the
      purposes of this Agreement and dated not earlier than 7 days before the
      Drawdown Date from an independent marine surveyor selected by the Agent in
      respect of the physical condition of the
Ship.

            

    

     

    
      	
              10

            	
              If
      the Agent so requires, in respect of any of the documents referred to
      above, a certified English translation prepared by a translator approved
      by the Agent.

            

    

     

    PART
C

    

    The
following are the documents referred to in Clause 9.1(d) required before the
Advance relating to the delivery instalment under the Shipbuilding Contract for
Ship B:

    

    
      	
              1

            	
              A
      duly executed original of the Mortgage, the Quadripartite Agreement (if
      not already executed), the Charter Assignment (if not already executed),
      the Account Security Deed and of the General Assignment relating to Ship B
      (and of each document to be delivered by each of
  them).

            

    

     

    
      	
              2

            	
              The
      originals of any mandates or other documents required in connection with
      the opening or operation of the Earnings Account relation to Ship
      B.

            

    

     

    
      	
              3

            	
              Documentary
      evidence that:

            

    

     

    
      	
              (a)

            	
              Ship
      B has been unconditionally delivered by the Builder to, and accepted by,
      Hongbo under the Shipbuilding Contract, and the full purchase price
      payable under the Shipbuilding Contract (in addition to the part to be
      financed by the Loan) has been duly
paid;

            

    

     

    
      	
              (b)

            	
              Ship
      B has been unconditionally delivered by Hongbo to, and accepted by, the
      relevant Charterer under the
Charter;

            

    

     

    
      	
              (c)

            	
              Ship
      B is definitively and permanently registered in the name of Hongbo under
      Liberian flag;

            

    

     

    
      	
              (d)

            	
              Ship
      B is in the absolute and unencumbered ownership of Hongbo save as
      contemplated by the Finance
Documents;

            

    

     

    
      	
              (e)

            	
              Ship
      B maintains the class set out in article 1(b)(i) of the Shipbuilding
      Contract with Det norske Veritas free of all recommendations and
      conditions of such Classification Society (with the Agent being advised of
      such class and classification society at least 15 days prior to the
      Drawdown Date);

            

    

     

    
      	
              (f)

            	
              the
      Mortgage relating to Ship B has been duly recorded against Ship B as a
      valid first preferred Liberian ship mortgage in accordance with the laws
      of Liberia; and

            

    

     

    
      	
              (g)

            	
              Ship
      B is insured in accordance with the provisions of this Agreement and all
      requirements therein in respect of insurances have been complied
      with.

            

    

     

    
      	
              4

            	
              Copies
      of the Document of Compliance relating to Ship B and of Ship B's Safety
      Management Certificate (together with any other details of the applicable
      safety management system which the Agent requires), ISSC and
      IAPPC.

            

    

     

    
      	
              5

            	
              Favourable
      legal opinions from lawyers appointed by the Agent on such matters
      concerning the law of Liberia and such other relevant jurisdictions as the
      Agent may require.

            

    

     

     

    
      
         

      

      
        73

        
          

        

      

      
         

      

    

     

     

    
      	
              6

            	
              A
      favourable opinion from an independent insurance consultant acceptable to
      the Agent on such matters relating to the insurances for Ship B as the
      Agent may require (with the Agent being advised with whom such insurances
      will be placed and upon what main terms they will be effected at least 15
      days prior to the Drawdown Date).

            

    

     

    
      	
              7

            	
              Such
      documentary evidence as the Agent and its legal advisers may require in
      relation to the due authorisation and execution by any party to the
      Quadripartite Agreement of that Quadripartite Agreement and of all
      documents to be executed by that party under that Quadripartite
      Agreement.

            

    

     

    
      	
              8

            	
              Copies
      of all charters of Ship B and related
documents.

            

    

     

    
      	
              9

            	
              A
      survey report addressed to the Agent and the Lenders, stated to be for the
      purposes of this Agreement and dated not earlier than 7 days before the
      Drawdown Date from an independent marine surveyor selected by the Agent in
      respect of the physical condition of the
Ship.

            

    

     

    
      	
              10

            	
              If
      the Agent so requires, in respect of any of the documents referred to
      above, a certified English translation prepared by a translator approved
      by the Agent.

            

    

     

    Each of
the documents specified in paragraphs 2, 3, 5 and 9 of Part A and every other
copy document delivered under this Schedule shall be certified as a true and up
to date copy by a director or the secretary (or equivalent officer) of a
Borrower.

    
      
         

      

      
        74

        
          

        

      

      
         

      

    

    

    SCHEDULE
5

     

    TRANSFER
CERTIFICATE

    
 

    The
Transferor and the Transferee accept exclusive responsibility for ensuring that
this Certificate and the transaction to which it relates comply with all legal
and regulatory requirements applicable to them respectively.

    

    

    
      	
              To:

            	
              DVB
      Bank America N.V. for itself and for and on behalf of each Borrower, each
      Security Party, the Security Trustee, each Lender and each Swap Bank, as
      defined in the Loan Agreement referred to
below.

            

    

    

    [l]

     

    
      	
              1

            	
              This
      Certificate relates to a Loan Agreement (the "Loan Agreement") dated
      [l] October 2008
      and made between (1) Banksy Shipping Company Limited and Hongbo Shipping
      Company Limited as joint and several borrowers (together, the "Borrowers"), (2) the
      banks and financial institutions named therein as Lenders, (3) the banks
      and financial institutions named therein as Swap Banks, (4) DVB Bank
      America N.V. as Agent and (5) DVB Bank America N.V. as Security Trustee
      for a loan facility of up to
US$80,000,000.

            

    

     

    
      	
              2

            	
              In
      this Certificate, terms defined in the Loan Agreement shall, unless the
      contrary intention appears, have the same meanings
  and:

            

    

     

    
      	
               
      

            	
              "Relevant Parties" means
      the Agent, each Borrower, each Security Party, the Security Trustee, each
      Lender and each Swap Bank;

            

    

    

    
      	
               
      

            	
              "Transferor" means [full
      name] of [lending
      office]; and

            

    

    

    
      	
               
      

            	
              "Transferee" means [full
      name] of [lending
      office].

            

    

    

    
      	
              3

            	
              The
      effective date of this Certificate is [l] Provided that this
      Certificate shall not come into effect unless it is signed by the Agent on
      or before that date.

            

    

     

    
      	
              4

            	
              The
      Transferor assigns to the Transferee absolutely all rights and interests
      (present, future or contingent) which the Transferor has as Lender under
      or by virtue of the Loan Agreement and every other Finance Document in
      relation to [l] per cent. of its
      Contribution, which percentage represents $[l].

            

    

     

    
      	
              5

            	
              By
      virtue of this Certificate and Clause 26 of the Loan Agreement, the
      Transferor is discharged [entirely from its Commitment which amounts to
      $[l]] [from
      [l] per cent.
      of its Commitment, which percentage represents $[l]] and the
      Transferee acquires a Commitment of $[l].]

            

    

     

    
      	
              6

            	
              The
      Transferee undertakes with the Transferor and each of the Relevant Parties
      that the Transferee will observe and perform all the obligations under the
      Finance Documents which Clause 26 of the Loan Agreement provides will
      become binding on it upon this Certificate taking
  effect.

            

    

     

     

    
      
         

      

      
        75

        
          

        

      

      
         

      

    

     

     

    
      	
              7

            	
              The
      Agent, at the request of the Transferee (which request is hereby made)
      accepts, for the Agent itself and for and on behalf of every other
      Relevant Party, this Certificate as a Transfer Certificate taking effect
      in accordance with Clause 26 of the Loan
  Agreement.

            

    

     

    
      	
              8

            	
              The
      Transferor:

            

    

     

    
      	
              (a)

            	
              warrants
      to the Transferee and each Relevant Party
that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Transferor has full capacity to enter into this transaction and has taken
      all corporate action and obtained all consents which are in connection
      with this transaction; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              this
      Certificate is valid and binding as regards the
  Transferor;

            

    

     

    
      	
              (b)

            	
              warrants
      to the Transferee that the Transferor is absolutely entitled, free of
      encumbrances, to all the rights and interests covered by the assignment in
      paragraph 4 above; and

            

    

     

    
      	
              (c)

            	
              undertakes
      with the Transferee that the Transferor will, at its own expense, execute
      any documents which the Transferee reasonably requests for perfecting in
      any relevant jurisdiction the Transferee's title under this Certificate or
      for a similar purpose.

            

    

     

    
      	
              9

            	
              The
      Transferee:

            

    

     

    
      	
              (a)

            	
              confirms
      that it has received a copy of the Loan Agreement and each of the other
      Finance Documents;

            

    

     

    
      	
              (b)

            	
              agrees
      that it will have no rights of recourse on any ground against either the
      Transferor, the Agent, the Security Trustee, any Lender or any Swap Bank
      in the event that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      of the Finance Documents prove to be invalid or
    ineffective;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      Borrower or any Security Party fails to observe or perform its
      obligations, or to discharge its liabilities, under any of the Finance
      Documents;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              it
      proves impossible to realise any asset covered by a Security Interest
      created by a Finance Document, or the proceeds of such assets are
      insufficient to discharge the liabilities of the Borrowers or Security
      Party under the Finance Documents;

            

    

     

    
      	
              (c)

            	
              agrees
      that it will have no rights of recourse on any ground against the Agent,
      the Security Trustee, any Lender or any Swap Bank in the event that this
      Certificate proves to be invalid or
ineffective;

            

    

     

    
      	
              (d)

            	
              warrants
      to the Transferor and each Relevant Party
that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              it
      has full capacity to enter into this transaction and has taken all
      corporate action and obtained all consents which it needs to take or
      obtain in connection with this transaction;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              this
      Certificate is valid and binding as regards the Transferee;
      and

            

    

     

    
      	
              (e)

            	
              confirms
      the accuracy of the administrative details set out below regarding the
      Transferee.

            

    

     

    
      	
              10

            	
              The
      Transferor and the Transferee each undertake with the Agent and the
      Security Trustee severally, on demand, fully to indemnify the Agent and/or
      the Security Trustee in respect of any claim, proceeding, liability or
      expense (including all legal expenses) which they or either of them may
      incur in connection with this Certificate or any matter arising out of it,
      except such as are shown to have been mainly and directly caused by the
      gross and culpable negligence or dishonesty of the Agent's or the Security
      Trustee's own officers or
employees.

            

    

     

     

    
      
         

      

      
        76

        
          

        

      

      
         

      

    

     

     

    
      	
              11

            	
              The
      Transferee shall repay to the Transferor on demand so much of any sum paid
      by the Transferor under paragraph 10 as exceeds one-half of the amount
      demanded by the Agent or the Security Trustee in respect of a claim,
      proceeding, liability or expense which was not reasonably foreseeable at
      the date of this Certificate; but nothing in this paragraph shall affect
      the liability of each of the Transferor and the Transferee to the Agent or
      the Security Trustee for the full amount demanded by
  it.

            

    

     

    

    

    
      
        	
                [Name
      of Transferor]

              	
                [Name
      of Transferee]

              
	 	 
	 By:	 Date:
	 	 
	 By:	Date: 

      

    

     

    

    Agent

    

    Signed
for itself and for and on behalf of itself

    as Agent
and for every other Relevant Party

    

    DVB
BANK AMERICA N.V.

    

    By:

    

    Date:

    
      
         

      

      
        77

        
          

        

      

      
         

      

    

    Administrative
Details of Transferee

    

    

    Name of
Transferee:

    

    Lending
Office:

    

    Contact
Person

    (Loan
Administration Department):

    

    Telephone:

    

    Fax:

    

    Contact
Person

    (Credit
Administration Department):

    

    Telephone:

    

    Fax:

    

    Account
for payments:

    

    

    

    

    
      	
              Note:

            	
              This
      Transfer Certificate alone may not be sufficient to transfer a
      proportionate share of the Transferor's interest in the security
      constituted by the Finance Documents in the Transferor's or Transferee's
      jurisdiction.  It is the responsibility of each Lender to
      ascertain whether any other documents are required for this
      purpose.

            

    

     

    
 

    
      
         

      

      
        78

        
          

        

      

      
         

      

    

    SCHEDULE
6

     

    DESIGNATION
NOTICE

     

    

    To:           DVB
Bank America N.V.

    Zeelandia Office Park

    Kaya W.F.G. Mensing 14

    Curaçao

    Netherlands Antilles

     

    
      	 Attn: Loans
      Administration	
              [date]

            

    

    
 

    Dear
Sirs

    

    Loan
Agreement dated [l]
October 2008 made between (i) ourselves as Borrower, (ii) the Lenders, (iii) the
Swap Banks, (iv) and (v) yourselves as Agent and Security Trustee (the "Loan
Agreement")

     

    We refer
to:

     

    
      	
              1

            	
              the
      Loan Agreement;

            

    

     

    
      	
              2

            	
              the
      Master Agreement dated as of [l] October 2008
      made between ourselves and DVB Bank SE;
and

            

    

     

    
      	
              3

            	
              a
      Confirmation delivered pursuant to the said Master Agreement dated [l] and addressed by
      DVB Bank SE to us.

            

    

     

    In
accordance with the terms of the Loan Agreement, we hereby give you notice of
the said Confirmation and hereby confirm that the Transaction evidenced by it
will be designated as a "Designated Transaction" for the purposes of the Loan
Agreement and the Finance Documents.

     

    Yours
faithfully

    

    

    

    

    

    .................................................

     

    for and
on behalf of

    BANKSY SHIPPING COMPANY LIMITED
and

    HONGBO
SHIPPING COMPANY LIMITED

    
      
         

      

      
        79

        
          

        

      

      
         

      

    

    SCHEDULE
7

     

    DVB
LOAN ADMINISTRATION FORM

     

    

    To:           DVB
Bank America N.V.

    Zeelandia Office Park

    Kaya W.F.G. Mensing 14

    Curaçao

    Netherlands Antilles

     

    
      
        	 Attn: Loans
      Administration	
                [date]

              

      

       

    

    

    Dear
Sirs

    

    Term
loan facility of up to $80,000,000 (the "Financing") made available to Banksy
Shipping Company Limited and Hongbo Shipping Company Limited (together, the
"Companies")

    

    We refer
to the loan agreement (the "Loan Agreement") dated [l] October 2008 and made
between ourselves, as joint and several Borrowers, the Lenders referred to
therein, the Swap Banks referred to therein, and yourselves as Agent and as
Security Trustee in connection with a term loan facility of up to
$80,000,000.  Terms and expressions not otherwise defined herein shall
have the same meaning as defined in the Loan Agreement.

    

    We hereby
appoint the following persons to act as our point of contact with regards to any
issue arising in connection with the administration of the Loan Agreement or any
other documents related to the Financing:

    

    1           [name, title,
address, phone, fax, mobile, email];

    2           [name, title,
address, phone, fax, mobile, email]; and

    3           [name, title,
address, phone, fax, mobile, email].

    

    No
persons other than the Directors of the Companies and the persons listed above
(together, the "Authorised
Persons") are hereby authorised to request any information from you
regarding the Loan Agreement or any other matter related to the Facility or
either Company or communicate with you in any way regarding the forgoing in and
under any circumstances.

    

    For the
avoidance of doubt, the following are the Directors of each
Company:

    

    1           [name, title,
address, phone, fax, mobile, email];

    2           [name, title,
address, phone, fax, mobile, email]; and

    3           [name, title,
address, phone, fax, mobile, email].

    

    This list
of authorised persons may only be amended, modified or varied in writing by an
Authorised Person with copy to the other Authorised Persons.

    

    We agree
to indemnify you and hold you harmless in relation to any information you
provide to any Authorised Person.

    

    This
letter shall be governed by, and construed in accordance with, English
law.

    

    Yours
sincerely

    

    

    

    for and
on behalf of

     

    
      
         

      

      
        80

        
          

        

      

      
         

      

    

     

    
      BANKSY SHIPPING COMPANY LIMITED
and

      HONGBO
SHIPPING COMPANY LIMITED

    

     

     

     

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

     

     

     

    EXECUTION
PAGES

     

    
 

    
      BORROWERS

      

      
        	
                SIGNED
by

              	
                )

              
	/s/
      Eirini Alexandropoulou	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                BANKSY
      SHIPPING

              	
                )

              
	
                COMPANY
      LIMITED

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

      
 

      
        	
                SIGNED
by

              	
                )

              
	/s/
      Eirini Alexandropoulou	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                HONGBO
      SHIPPING

              	
                )

              
	
                COMPANY
      LIMITED

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

      
 

      LENDERS

      

      
        	
                SIGNED
by

              	
                )

              
	/s/
      Alexandra Michalopoulou	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                DVB
      BANK AMERICA N.V.

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

       

      

      SWAP
BANKS

      

      
        	
                SIGNED
by

              	
                )

              
	/s/
      Alexandra Michalopoulou	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                DVB
      BANK SE

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

      
 

      AGENT

      

      
        	
                SIGNED
by

              	
                )

              
	/s/
      Alexandra Michalopoulou	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                DVB
      BANK AMERICA N.V.

              	
                )

              
	
                in
      the presence of:

              	
                )

              
	 
      	 
      

      

      
 

      SECURITY
TRUSTEE

      

      
        	
                SIGNED
by

              	
                )

              
	/s/
      Alexandra Michalopoulou	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                DVB
      BANK AMERICA N.V.

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

      

      
 

    

     

    
      
         

      

      
        82

        
        

      

      
         

      

    

     

    SK 23116 0005
1007470PURCHASE AND ASSUMPTION AGREEMENT

             This Purchase and Assumption Agreement (this "Agreement") is made and entered into
this 24th day of April, 2009, by and between Sound Community Bank, a federally chartered
savings bank (the "Purchaser"), and 1st Security Bank of Washington, a Washington chartered
mutual savings bank (the "Seller").

             WHEREAS, Seller owns and operates a branch facility located at 1405 E. Front Street,
Port Angeles, Washington (the "Branch"); and

             WHEREAS, Seller desires to sell and Purchaser agrees to acquire the Branch and, in that
regard, Seller desires to sell and Purchaser desires to acquire certain assets relating thereto, all as
set forth in this Agreement; and

             WHEREAS, Seller desires to assign to Purchaser and Purchaser desires to assume from
Seller certain liabilities relating to the Branch, all as set forth in this Agreement.

             NOW THEREFORE, in consideration of the premises and the mutual promises, Seller
and Purchaser agree as follows:

ARTICLE I

PURCHASE AND SALE OF ASSETS AND

ASSIGNMENT AND ASSUMPTION OF LIABILITIES

             1.1   Purchase and Sale of Assets.  Upon the terms and subject to the conditions set
forth in this Agreement, Seller shall sell, convey, assign, transfer and deliver to Purchaser, and
Purchaser shall purchase and accept from Seller, the following assets relating to the Branch (the
"Assets").

		          A.          Personal Property.  The personal property contained in and used
primarily for the operation of the Branch as described in Exhibit 1.1A. hereto (the
"Personal Property").
	 
		          B.          Loans.  
		          1.          Such loans (i) secured in whole or in part, by deposit accounts ("Deposit
Account Loans") or (ii) automatically created as the result of an overdraft of a deposit
account pursuant to a pre-approved overdraft protection program offered by the Seller
("Overdraft Protection Loans" and together with the Deposit Account Loans, the "Branch
Loans"), related to the Deposit Liabilities being transferred and which are carried on the
books and records of the Branch as of the close of business on March 31, 2009, but
excluding those accounts which Purchaser declines to purchase for any reason, as
provided in Exhibit 1.1B(1) (the "Excluded Loans") (collectively, the "Existing Loans").
Attached hereto as Exhibit 1.1B(2) is a list setting forth the outstanding principal balance
and accrued but unpaid interest on the Existing Loans as of the close of business on
March 31, 2009.

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		          2.          Such Branch Loans that are originated and entered on the books and
records of the Branch during the period from March 31, 2009 to the close of business on
the day immediately before the Closing Date (as defined in Section 1.7) (the "Interim
Loans"), provided that Purchaser shall have the right to refuse to purchase any Interim
Loan for any reason so long as a written election for the exclusion is made by Purchaser
within seven (7) days after it receives all pertinent information with respect to such
Interim Loan, and any such Interim Loan that Purchaser refuses to purchase shall also be
known as an "Excluded Loan."

          3.          For purposes of this Agreement, the Existing Loans and Interim Loans are
collectively referred to the as the "Purchased Loans."  The Purchased Loans, together
with interest accrued thereon but unpaid as of the close of business on the day
immediately before the Closing Date (the "Accrued Loan Interest"), shall be purchased by
Purchaser.  Seller will generate Exhibit 1.1B(3), which exhibit will provide the same
information as Exhibit 1.1(B)(2) for the Purchased Loans and be current and made a part
hereof as of the Closing Date.

          C.          Real Property.  The real property, and all improvements thereon, owned
by Seller on which the Branch is located (the "Real Property"), which shall be sold and
purchased pursuant to the real property sales contract attached hereto as Exhibit 1.1C.
("Real Property Contract").

          C.          Cash on Hand.  Any cash on hand at the Branch as of the start of business
on the Closing Date (the "Cash on Hand").

          E.          Records, Etc.  All records, files, books of accounts and other original
documents and instruments pertaining to the Assets and the Assumed Liabilities (as
defined in Section 1.2) being transferred and assumed, respectively.

          F.          Rights Relating to Assets.  Any statutory or common law right, title and
interest in and related to the Assets which Seller may have and which Seller may assign,
including, without limitation, claims, causes of action, rights of recovery or set offs, and
credit of any kind or nature relating to the Assets of the Branch (the "Rights").

             1.2   Assignment and Assumptions of Liabilities.  Upon the terms and subject to the
conditions set forth in this Agreement, Seller shall assign to Purchaser, and Purchaser shall
accept and assume from Seller, the following liabilities relating to the Branch, which liabilities
Purchaser agrees to perform and discharge (the "Assumed Liabilities"), as follows:

		          A.          Deposit Liabilities.  All liabilities for payment of deposits given an
account number maintained at the Branch including, without limitation, all savings
accounts, certificates of deposit, money market deposit accounts, checking and NOW
accounts and IRA accounts, and all other deposit accounts given an account number
maintained at the Branch or assigned to the Branch in the ordinary course pursuant to the
Seller's accounting system (except to the extent of deposit liabilities transferred at the
request of a depositor as provided in Section 4.8), in each case as of the close of business 

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2

		on March 31, 2009 (the "Cut-Off Date Deposits"), all of which shall be listed in full on
Exhibit 1.2A(1) hereto (the "Deposit Balance"), together with any changes in the Cut-Off
Date Deposits and all new deposits from March 31, 2009 through the close of business on
the day immediately before the Closing Date (the "Interim Deposits") (the Cut-Off Date
Deposits and Interim Deposits, in each case as of the close of business on the day
immediately before the Closing Date are hereinafter collectively referred to as the
"Deposits" or the "Deposit Liabilities"), in accordance with the terms of the agreements
pertaining to such Deposits, together with interest accrued thereon but unpaid as of the
close of business on the day immediately before the Closing Date (the "Accrued Deposit
Interest"). Said Deposit Liabilities and Accrued Deposit Interest shall be specified in
Exhibit 1.2A(2) to be attached hereto and made a part hereof as of the Closing Date.

          B.          Contracts. All obligations of the Seller relating to the period on and after
the Closing Date under any and all contracts relating to the operation of the Branch which
are assignable by Seller to Purchaser and which are all listed on Exhibit 1.2B to this
Agreement (the "Contracts").

          C.          Safe Deposit Boxes.  All obligations associated with all safe deposit boxes
located at the Branch (the "Safe Deposit Boxes") relating to the period on and after the
Closing Date.  Exhibit 1.2C sets forth the names and addresses of the Safe Deposit Box
holders as of March 31, 2009, which Exhibit shall be updated as of the Closing Date.

             1.3   Transfer of Funds.  In connection with the acquisition by Purchaser of the Assets
(other than the Real Property) and the assumption by Purchaser of the Assumed Liabilities of
Seller, Seller shall transfer to the Purchaser by wire transfer of immediately available funds (the
"Transfer Payment") an amount equal to:

		          A.          the estimated amount of the Deposit Liabilities; plus

          B.          the estimated amount of the Accrued Deposit Interest; minus

          C.          $0.00 representing the purchase price of the Personal Property; minus

          D.          the estimated unpaid principal amount of the Purchased Loans; minus

          E.          the estimated amount of the Accrued Loan Interest; minus

          F.          the amount of Cash on Hand; minus

          G.          	2.5% of the Deposit Liabilities (the "Deposit Premium"); plus or minus

          H.          the estimated amount of prorations, as provided in Section 1.6 hereof, plus

          I.          the amount of Earnest Money (as defined in Section 9.3).

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The parties agree that if the sum of subsections A through I is less than zero, the Purchaser will
transfer to the Seller, by wire transfer on the Closing Date (or the business day immediately
before the Closing Date, if the Closing Date occurs on a day when funds cannot be wired for
same day reinvestment), immediately available funds in the amount by which such sum is less
than zero.  The parties further acknowledge that the Real Property shall be sold and purchased,
and payment of the $750,000 purchase price with such prorations and adjustments thereto shall
be made, pursuant to the Real Property Contract attached hereto as Exhibit 1.1C.

             1.4   Adjustment Payment Date.

		          A.          On the fifteenth (15th) day after the Closing Date or such earlier date as
may be agreed to in writing by the parties (the "Adjustment Payment Date"), Seller shall
deliver the following documents to Purchaser:

			          (i)          A statement setting forth (a) the aggregate amount of Deposit
Liabilities and the Accrued Deposit Interest thereon transferred to and assumed by
Purchaser, calculated as of the close of business on the day immediately before the
Closing Date; and (b) any corrections to the information contained in the Deposit
Listing (as defined in Section 6.8) delivered to the Purchaser on the Closing Date;

          (ii)         A statement of the Purchased Loans as of the close of business on
the day immediately before the Closing Date, setting forth the aggregate unpaid
principal amount of such Purchased Loans and the Accrued Loan Interest and
listing, for each such Purchased Loans, the name and address of the borrower, the
unpaid principal amount thereof interest rate thereon and the amount of the
Accrued Loan Interest;

          (iii)        A statement of the actual proration amounts to be paid in
accordance with Section 1.6 hereof as of the start of business on the Closing Date;
and

          (iv)         A closing statement for execution by the parties.

		          B.          If the statement delivered in accordance with the foregoing subsection A
requires an adjustment to be made to the Transfer Payment, Seller or Purchaser, as the
case may be, shall make an adjustment payment to the other party (the "Adjustment
Payment") to correct any discrepancy between the amount of the estimated Transfer
Payment paid under Section 1.3 and the amount of the Transfer Payment as finally
determined pursuant to Section 1.4A. Seller shall provide Purchaser with the worksheets
it used to calculate the Adjustment Payment. Any Adjustment Payment due to either party
on the Adjustment Payment Date pursuant to this provision shall be paid to such party on
the Adjustment Payment Date by the other party by wire transfer, and shall bear interest
from and including the Closing Date to the date of payment at the effective federal funds
rate as published daily by the Federal Reserve Bank of San Francisco during the period(s)
involved.

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             1.5   Purchase Price.  The purchase price is to be paid by the Purchaser to Seller for
the assets to be acquired under this Agreement.  The "Purchase Price" shall be equal to the sum
of the amounts referred to in subsections C, D, E, F, G and H of Section 1.3 herein and the
purchase price of the Real Property, as the same are adjusted pursuant to Section 1.4.

             1.6   Prorations.  It is the intention of the parties hereto that Seller shall operate for its
own account the business being transferred pursuant to this Agreement until the close of business
on the day immediately before the Closing Date, and that Purchaser shall operate for its own
account the business being transferred pursuant to this Agreement from and after the Closing
Date.  Thus, except as otherwise specifically provided in this Agreement (including the Real
Estate Contract), items of income and expense allocable to the Assets and Liabilities shall be
prorated as of the close of business on the day immediately before the Closing Date using the
accrual method of accounting, whether or not such adjustment would normally be made as of
such time.  For purposes of this Agreement and except as set forth in the Real Estate Contract,
items of proration and other adjustments shall include, but not be limited to; (i) personal property
taxes; (ii) FDIC deposit insurance assessments (prorated in accordance with the number of days
elapsed during the quarter in which the Closing Date occurs and applicable FDIC assessment
rates); (iii) other accrued expenses (including but not limited to those under the Contracts) and
prepaid expenses (but only including prepaids that will inure directly to the benefit of Purchaser
and excluding all others, such as by way of example, prepaid advertising) for the Branch and (iv)
Safe Deposit Box revenue from the Branch.

             1.7   Closing Date: Closing; Real Estate Transfer.  The consummation of the
purchase and assumption transactions (the "Closing") provided for in this Agreement, including
the Real Property Contract, shall occur (i) no later than fifteen (15) calendar days after receipt by
the parties of all required regulatory approvals and all other approvals required by law or contract
for consummation of the transactions provided for herein and lapse of all required waiting
periods associated therewith (such date referred to hereinafter as the "Closing Date"), with a
target date of June 15, 2009 or (ii) such other date as is mutually agreed upon in writing by the
parties hereto. In any event, the Closing Date may be extended to December 30, 2009,if
regulatory approvals and waiting periods necessitate, in accordance with paragraph 9.4D herein.
Delivery of the documents and instruments to be delivered by Seller and Purchaser, payment of
the Transfer Payment by Seller or Purchaser, closing of the sale and purchase pursuant to the
Real Property Contract, and other transactions herein contemplated to take place concurrently
with such deliveries, assumptions and payments, shall take place on the Closing Date at 8:00
a.m. (local time) at the offices of Seller in the State of Washington (or at such other time and
place as are agreed to by both parties), and all such transactions shall be deemed effective as of
the close of business on the day immediately before the Closing Date; provided, however, that
any payment to be made by either party to the other by wire transfer of immediately available
funds on the Closing Date shall be made by wire transfer initiated prior to 10:00 a.m. (local time)
on the Closing Date (or on the business day immediately before the Closing Date, if the Closing
Date occurs on a day when funds cannot be wired for same day reinvestment).  Any deliveries,
conveyances, assignments or transfers required under this Agreement, other than the foregoing,
shall be made at the time and date specified in this Agreement (and where no time is specified,
on or before the start of business on the date specified) and in the manner and place specified in
this Agreement

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5

 (of, where not specified, in the manner and place as reasonably requested in
writing by the party that is to receive such delivery, conveyances, assignment or transfer).  

             1.9   Limitations On Assumption of Liabilities.  The parties agree that Purchaser
shall assume only the Assumed Liabilities.  Purchaser assumes no other liabilities of the Seller or
Seller's banking operations.

             1.10  IRA Accounts. 

                    (a)       Included in the Deposit Liabilities are deposits of customers of the Branch
relating to IRA accounts (which the parties acknowledge include SEP IRA accounts, SIMPLE
IRA accounts and any other type of retirement account reflected in the deposit balances of the
Branch) pursuant to which Seller is currently acting as custodian.

                    (b)       Within such period prior to the Closing Date as is required by applicable
law or regulation, Seller will, at its sole cost and expense, notify the depositors who maintain
such IRA accounts of Seller's intent to resign as custodian as of Closing and to appoint Purchaser
as successor custodian and the discharge and release of Seller from all liabilities as custodian
from and after the effective time of its resignation. Purchaser will accept such appointment as
successor custodian, unless the customer objects in writing to such appointment or to Purchaser's
master IRA agreement. It is agreed that Seller is required to notify each such depositor only once,
which notification will be by means of a letter approved by Purchaser and accompanied by all
appropriate forms and documents necessary to effect such replacement and release and to adopt
Purchaser's master agreement. The IRA account of any customer not accepting the appointment
of Purchaser and the Purchaser's master plan will not be included in the Deposit Liabilities.

                    (c)       Purchaser agrees that, with respect to the IRA accounts transferred to
Purchaser pursuant to Section 1.10(b) above, Purchaser will make no payment to any such
customer to satisfy the minimum distribution requirements beginning the first day of April of the
year following the year in which the customer reaches age 70 1/2 until such customer provides
Purchaser with a written payment instruction in a form satisfactory to Purchaser.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

             Seller hereby makes the following representations and warranties to Purchaser:

             2.1   Corporate Organization.  Seller is a state chartered mutual savings bank duly
organized and existing in good standing under the laws of the State of Washington and possesses
full corporate power and all necessary approvals to own and operate the Branch and to carry on
its business as presently owned, operated, and conducted by it.  Seller's deposit liabilities are
insured by the Federal Deposit Insurance Corporation ("FDIC") to the fullest extent permitted
under federal law. No proceedings for the termination or revocation of such insurance are
pending or to Seller's knowledge threatened, and Seller is not currently under any cease and
desist order by any regulatory agency, nor to Seller's knowledge is any such action threatened
which would preclude Seller from entering into or consummating this Agreement.

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             2.2   Corporate Authority and Action.  Seller has full right, power and authority to
sell, convey, assign, transfer and deliver the Assets and the Assumed Liabilities to Purchaser and
to otherwise fully perform Seller's obligations under this Agreement, subject however to (i)
Seller's receipt of all required regulatory approvals and (ii) compliance by Purchaser with all of
its obligations under this Agreement.  Seller has full right, power and authority to execute and
deliver this Agreement and each of the documents and instruments contemplated hereby.  This
Agreement, and each such other document and instrument, constitutes a valid and binding
obligation of Seller enforceable in accordance with its terms except as the same may be limited
by bankruptcy, insolvency, reorganization, or other laws relating to or affecting the enforcement
of creditors' rights including, without limitation, the avoidance powers of the FDIC pursuant to
the Federal Deposit Insurance Act and except as courts of equity may limit certain remedies such
as specific performance.  This Agreement and the transactions contemplated hereby have been
approved by the Board of Directors of Seller and no other corporate or member action is required
on the part of Seller relating to this Agreement and the transactions contemplated hereby.

             2.3   No Default Effected.  The execution and delivery of this Agreement by Seller
and the consummation by Seller of the transactions contemplated hereby, subject to the
fulfillment of the terms and compliance with the provisions hereof and all regulatory approvals,
will not conflict with, or result in the breach of, or a default (or an occurrence which, with the
lapse of time or action by a third party, could result in a breach or default) with respect to (i) any
of the terms, conditions, or provisions of any laws applicable to Seller, or of the articles of
incorporation or bylaws of Seller; (ii) any agreement or other instrument to which Seller is a
party or is subject, or by which Seller or any of its properties or assets are bound; or (iii) any
order, judgment, injunction, decree, directive, or award of any court, arbitrator, government
agency, or public official by which Seller is bound.

             2.4   Brokers.  All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Seller without the intervention of any other person
acting on behalf of Seller in such manner as to give rise to any valid claim by any person against
Seller or Purchaser for reimbursement of expenses or a finder's fee, brokerage commission, or
other similar payment, and Seller shall pay all commissions, fees, costs and expenses, directly or
indirectly, due any such person and indemnify Purchaser against all commissions, fees, costs,
expenses, or other similar payments in connection therewith.

             2.5   Litigation.  There are no actions, causes of action, claims, suits or proceedings,
pending or, to Seller's knowledge, threatened, against Seller affecting the Branch, the Assets or
the Assumed Liabilities whether at law, in equity or before or by a governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, and to Seller's
knowledge, there are no unresolved disputes under any written or oral agreement, whether
express or implied, to which Seller is a party or by which it is bound that would adversely affect
the Branch, the Assets, the Assumed Liabilities or the transactions contemplated hereby, and
Seller has no knowledge of any state of facts or the occurrence of any event which would form
the basis for any claim which would adversely affect the Branch, the Assets, the Assumed
Liabilities or the transactions contemplated hereby.

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7

             2.6   Deposits.  The Deposits are insured by FDIC to the fullest extent permitted under
federal law.  The Deposits (i) are in all respects genuine and enforceable obligations of Seller and
have been acquired and maintained in full compliance with all applicable laws, including (but not
limited to) the Truth in Savings Act and regulations promulgated thereunder; (ii) were acquired
in the ordinary course of Seller's business; and (iii) are not subject to any claims that are superior
to the rights of persons shown on the records delivered to Purchaser indicating the owners of the
Deposits, other than claims against such Deposit owners, such as state and federal tax liens,
garnishments, and other judgment claims, which have matured or may mature into claims against
the respective Deposits.

             2.7   Title to Assets.  Seller has good and marketable title to the Assets, and complete
and unrestrictive power to sell, transfer and assign the Assets to Purchaser subject to the receipt
of all required regulatory approvals and, except as set forth in the Real Property Contract, free
and clear of any and all claims, liens, encumbrances or rights of third parties.  Seller has no
knowledge of any defects in, or damage to, any of the Real Property or Personal Property,
reasonable wear and tear excepted, other than such as would be plainly visible upon a due
diligence inspection.  However, Seller makes no other representation relating to the physical
condition of the Real Property or the Personal Property.  The Personal Property and the Real
Property, except as otherwise expressly stated herein or in the Real Property Contract, shall be
conveyed in "AS IS" condition without any representation as to suitability for any particular
purpose.

             2.8   Proceedings Relating to Branch and Real Property.  No proceedings to take all
or any part of the Branch premises or the Real Property by condemnation or right of eminent
domain are pending or, to Seller's knowledge, threatened.  Seller's use of the Branch and Real
Property are not, and no complaints have been received by Seller that Seller is, in violation of
applicable building, zoning, platting, subdivision, use, safety, building, energy and environmental
or similar laws, ordinances, regulations and restrictions.  The Branch and Real Property are
adequately serviced by all utilities necessary for effective operation as presently used for a
financial institution branch office.

             2.9   Contracts and Agreements.  A true and complete copy of each Contract to be
assumed by Purchaser is attached to Exhibit 1.2B of this Agreement.  Each such Contract is valid
and enforceable according to its terms, Seller is not in default under any Contract and there has
been no event which, with notice or the lapse of time, or both, would constitute a default under
any such Contract by Seller including, but not limited to, the consummation of the transactions
contemplated by this Agreement.

             2.10  Compliance with Laws.  Insofar as it may affect the transactions contemplated
by this Agreement, to Seller's knowledge, Seller is in compliance with all laws applicable to the
operation of its business as presently conducted at the Branch, specifically including, without
limitation, compliance with all regulations concerning truth-in-savings, consumer protection,
occupational safety, civil rights, and labor and/or employment laws.

             2.11  IRS Reporting.  Seller has timely filed all applicable reports, returns and filing
information data required to be filed with any and all federal and state banking authorities and
any

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 and all other governmental authorities and regulatory agencies, it being acknowledged and
agreed that the Purchaser shall file Form 1099s with respect to the Branch Deposits up to and
including the day before the Closing Date; provided that, within five (5) business days after the
Closing Date, Seller shall provide Purchaser with all the information necessary to allow
Purchaser to complete said Form 1099s, such information to be in the form reasonably acceptable
to the Purchaser.

             2.12  Environmental Matters.  There is no legal, administrative, arbitral or other
proceeding, claim, action, cause of action or governmental investigation pending or, to Seller's
knowledge, threatened which seeks to impose on Seller or any, predecessor of Seller in
connection with the Real Property any liability arising under any environmental laws, nor to
Seller's knowledge is there any basis for any of the foregoing.  Seller is not subject to any
agreement, order, judgment, decree or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any such liability with respect to the Real
Property.  To Seller's knowledge, there are no environmental conditions such as above ground or
under ground storage tanks, discharges or emissions or releases of hazardous materials which
constitute a violation of any environmental laws present at, on, under, or above the Real
Property.

             2.13  Taxes.  Seller shall be entitled to the tax deduction (to the extent permitted by
applicable law) for the accrued interest on the Deposit Liabilities prior to the Closing Date.  As
of the Closing Date, the Deposit Liabilities shall not be subject to any tax liens or levies of any
kind relating to obligations of Seller.

             2.14  Real Property.  There are no leases, subleases, licenses or similar agreements
permitting any party to lease, use or occupy space in or on the Real Property.  There are no
outstanding options to purchase or similar agreements with respect to the Real Property. 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER

             Purchaser hereby makes the following representations and warranties to Seller:

             3.1   Corporate Organization.  Purchaser is a federal savings bank duly organized and
existing in good standing under the laws of the United States and possesses full corporate power
and all necessary approvals to own and operate its properties and to carry on its business as
presently owned, operated and conducted by it.  Purchaser's deposit accounts are insured by the
FDIC to the fullest extent permitted under federal law.  No proceedings for the termination or
revocation of such insurance are pending or to Purchaser's knowledge threatened, and Purchaser
is not currently under any cease and desist order by any regulatory agency nor to Purchaser's
knowledge is any such action threatened which would preclude Purchaser from entering into or
consummating this Agreement.

             3.2   Corporate Authority and Action.  Purchaser has full right, power and authority
to acquire the Assets and assume the Assumed Liabilities from Seller and to otherwise fully
perform Purchaser's obligations under this Agreement, subject however, (i) Purchaser's receipt of
all required regulatory approvals and (ii) compliance by Seller with all of its obligations under
this

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Agreement.  Purchaser has full right, power and authority to execute and deliver this
Agreement and each of the documents and instruments contemplated hereby.  This Agreement,
and each such other document and instrument, constitutes a valid and binding obligation of
Purchaser enforceable in accordance with its terms except as the same may be limited by
bankruptcy, insolvency, reorganization, or other laws relating to or affecting the enforcement of
creditors' rights including, without limitation, the avoidance powers of the FDIC pursuant to the
Federal Deposit Insurance Act and except as courts of equity may limit certain remedies such as
specific performance.  This Agreement and the transactions contemplated hereby have been
approved by the Board of Directors of Purchaser and no other corporate or shareholder action is
required on the part of Purchaser relating to this Agreement and the transactions contemplated
hereby.

             3.3   No Default Effected.  The execution and delivery of this Agreement by Purchaser
and the consummation by Purchaser of the transactions contemplated hereby, subject to the
fulfillment of the terms and compliance with the provisions hereof and all regulatory approvals,
will not conflict with, or result in the breach of, or a default (or an occurrence which, with the
lapse of time or action by a third party, could result in a breach or default) with respect to (i) any
of the terms, conditions or provisions of any laws applicable to Purchaser, or of the charter or
bylaws of Purchaser; (ii) any agreement or other instrument to which Purchaser is a party or is
subject or by which Purchaser or any of its properties or assets are bound; or (iii) any order,
judgment, injunction, decree, directive, or award of any court, arbitrator, government agency or
public official by which Purchaser is bound.

             3.4   Brokers.  Negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by Purchaser without the assistance of any other
person acting as Purchaser's broker.  Purchaser shall pay all commissions, fees, costs and
expenses, directly or indirectly, due any such person acting as Purchaser's broker and indemnify
Seller against all commissions, fees, costs, expenses, or other similar payments in connection
therewith.

             3.5   Litigation.  There are no actions, causes of action, claims, suits, or proceedings,
pending or, to Purchaser's knowledge, threatened, against Purchaser which would adversely
affect the transactions contemplated by this Agreement, whether at law, in equity or before or by
a governmental department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, and to Purchaser's knowledge, there are no unresolved disputes under any written or oral
agreement, whether express or implied, to which Purchaser is a party or by which it is bound that
would adversely affect the transactions contemplated hereby, and Purchaser has no knowledge of
any state of facts or the occurrence of any event which could form the basis for any claim which
would adversely affect the transactions contemplated hereby.

             3.6   Compliance with Law.  Insofar as it may affect the transactions contemplated by
this Agreement, Purchaser is in compliance with all laws applicable to the operation of its business.

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ARTICLE IV
AGREEMENTS PENDING CLOSING

             4.1   Regulatory Approval and Standards.  Purchaser shall file an application with
the Office of Thrift Supervision within 30 days of the date hereof, seeking requisite approval of
the transactions contemplated hereby and promptly thereafter shall furnish Seller with copies
thereof (except for the confidential portions thereof) and any amendments, as well as each
material notice, order, opinion or other item of correspondence received by Purchaser from such
regulatory agency with respect to such application which do not contain confidential information.
Seller shall file such regulatory applications or notices, if any, as are required of it.

             4.2   Notification of Customers.  Purchaser and Seller shall take such actions required
by law or regulation to notify customers, creditors or depositors of the Branch of the transfers and
assumptions to be effected pursuant to this Agreement.  Purchaser and Seller shall work together
to develop the contents of any such notifications and shall issue any such notifications, at Seller's
expense, after all regulatory approvals have been obtained (or as otherwise mutually agreed to by
the parties or required by applicable laws and regulations) but prior to the Closing.

             4.3   Operations.

		          A.          No later than thirty (30) days prior to the Closing Date, Seller shall supply
such information as is necessary for Purchaser to conduct a conversion from Seller's data
processing system to Purchaser's data processing system.  In addition, Seller shall supply
Seller's personnel for a reasonable period of time to assist Purchaser in such conversion.

          B.          Purchaser agrees to use its best efforts at its expense to convert operations
to its own data processing system on the Closing Date.  Purchaser shall be solely
responsible for the cost of such conversion.

          C.          All of the Seller's Branch ATM/Debit/POS Cards shall be terminated on
the Closing Date.

             4.4   Covenants Not to Compete.  From the Closing Date and for a period of 3 years
thereafter (the "Restrictive Period"), the Seller (and its affiliates, successors and assigns) shall
not open any branch office, deposit taking facility (including ATM), loan office or solicit any
business in Clallam County, Washington (the "Restricted Area").  Seller agrees that said time
and geographic restrictions are reasonable and necessary to protect Purchaser's legitimate
business concerns, that said covenants do not violate public policy, and do not place any
unreasonable restraints upon Sellers other ongoing business operations.  During the Restrictive
Period, Seller (and its affiliates, successors, and assigns) shall not directly or indirectly (i) solicit
any business from any of the holders of Deposits, (ii) undertake any targeted marketing or
advertising in the Restricted Area, or (iii) encourage any employee of Purchaser to cease
employment with Purchaser or change such person's employment.  Notwithstanding anything in
this Section 4.4 to the contrary, the foregoing covenants and restrictions do not apply to persons
or entities solicited solely to participate in Seller's indirect financing programs ("Participants"), or
to persons or entities referred by Participants to participate in Seller's indirect financing
programs, so long as the

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products and services acquired from Seller and utilized by Participants
and persons and entities referred by Participants are only related to the indirect financing
programs.  

             4.5   Real Property.  The parties agree to comply with such covenants and conditions
as set forth in the Real Property Contract.  

             4.6   Sales and Transfer Taxes.  Except for such taxes and assessments relating to the
transfer of the Real Property, Purchaser and Seller agree that no sales or transfer tax is due on
this transaction because it is not in the ordinary course of business of either Purchaser or Seller;
however, in the event that a sales or transfer tax is imposed by a governmental authority having
jurisdiction to impose such a tax, Seller shall be responsible for the full and timely payment of
same and shall indemnify and hold harmless Purchaser for the amount of any such taxes due, and
from any expenses, fines, penalties, fees, costs, or other damages resulting from the imposition of
such tax or for any failure to make timely payment thereof.  Seller shall indemnify Purchaser and
holder Purchaser harmless for the amount of any taxes attributable to its operations prior to the
Closing Date, and from any expenses, fines, penalties, fees, costs or other damages resulting
from the imposition of such tax or for any failure to make timely payment thereof provided that
Purchaser promptly notifies Seller of same.

             4.7   Bulk Sales Act Indemnity.  Seller shall promptly pay when due all its creditors
in order to avoid any claim by any such creditor against Purchaser or any of the Assets by virtue
of the transactions contemplated by this Agreement or any bulk transfer provisions under
applicable law.  Seller hereby agrees to indemnify and hold Purchaser harmless from any
liability, loss or damage arising from failure of any applicable bulk transfer law to be satisfied or
from Seller's failure to perform this covenant.

             4.8   Negative Operating Covenants.  Except as may be required by regulatory
authorities, Seller shall not, without the prior written consent of Purchaser: (a) transfer to Seller's
other banking facility any of the deposit liabilities maintained at the Branch except upon the
unsolicited request of a depositor in the ordinary course of business; (b) transfer to the Branch
any of the deposits domiciled at its other banking facility except upon the unsolicited request of a
depositor in the ordinary course of business; (c) transfer, assign, encumber or otherwise dispose
of or enter into any contract, agreement or understanding to transfer, assign, encumber or
otherwise dispose of any of the Assets; (d) enter into any contract, commitment, or other
transaction relating to the Branch, except for deposit taking and lending activities in the ordinary
course of business consistent with past practices; (e) offer interest rates on any deposit liabilities
at the Branch in excess of those interest rates paid on similar deposits at Seller's other banking
facility; or (f) alter its current advertising or marketing programs at the Branch in any material
respect, other than as part of a general advertising or marketing campaign implemented by Seller
company wide.

             4.9   Affirmative Operating Covenants.  Seller shall use its best efforts to (a) cause
the Deposits to be equal to or greater than the Deposit Balance, (b) preserve the goodwill of
customers and others doing business with the Branch and (c) cause the Employees (as defined in
Section 9.2) to continue their employment with Purchaser on and after the Closing Date.

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             4.10  Damage or Destruction of Real Property.  In the event that prior to Closing
there occurs material physical damage to or destruction of the Branch premises or the Real
Property, or either Purchaser or Seller receives or obtains written notice of any condemnation or
eminent domain proceeding which affects the Branch premises or the Real Property, then
Purchaser will have the option, for a period of 30 days following such damage, either (i) to
proceed with the transaction contemplated hereby or (ii) to proceed with the transaction without
the acquisition of the Branch premises and the Real Property.  If Purchaser elects to proceed with
the transaction contemplated hereby, Purchaser shall be entitled to receive and will be assigned
(i) all insurance proceeds payable with respect to the damage or destruction of the Branch
premises and the Real Property and Seller will pay over to Purchaser any deductible under the
applicable insurance policies and (2) any award or payment received in connection with any
condemnation or eminent domain proceeding.  In no event, however, shall Seller be liable to
restore or otherwise take action with respect to the Branch premises or the Real Property.  In the
event of any conflict between the provisions of this Section 4.10 and the Real Property Contract,
the provision of this Section 4.10 shall control. 

             4.11  Assistance in Obtaining Regulatory Approvals.  Seller agrees to use all
reasonable efforts to assist Purchaser in obtaining all regulatory approvals necessary to complete
the transactions contemplated hereby, and Seller will provide to Purchaser and to the appropriate
regulatory authorities all information reasonably required of Seller to be submitted by Purchaser
in connection with such approvals.

             4.12  Other Relationships.  Except for the deposit relationships being transferred by
Seller to Purchaser, as of the Closing Date neither Seller nor any of its affiliates will have any
other business relationship with any of holders of Deposits, except to the extent of any existing
loan relationships that may be outstanding.

             4.13  Safe Deposit Boxes.  Seller hereby agrees to indemnify and hold Purchaser
harmless against any and all claims relating to the Safe Deposit Boxes arising out of facts,
circumstances or events occurring prior to the Closing Date.  Purchaser hereby agrees to
indemnify and hold Seller harmless against any and all claims relating to the Safe Deposit Boxes
arising out of facts, circumstances or events occurring on or after the Closing Date.

ARTICLE V

DOCUMENTS TO BE DELIVERED TO SELLER

             At or prior to the Closing, Purchaser shall deliver the following documents to Seller:

             5.1   Certified copies of resolutions of the Board of Directors of Purchaser approving
and authorizing the execution, delivery and performance of this Agreement and any other
documents required to be executed and delivered by Purchaser hereunder;

             5.2   Evidence of requisite regulatory approval for Purchaser to consummate the
transactions contemplated hereby; and

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             5.3   An Instrument of Transfer, Assignment and Assumption, in the form attached
hereto as Exhibit 6.10, whereby Purchaser assumes and agrees to pay or perform the Assumed
Liabilities.

             5.4   An executed Real Property Contract and all documents and other instruments as
may be required to be delivered by Purchaser pursuant to the terms of the Real Property Contract.

ARTICLE VI

DOCUMENTS TO BE DELIVERED TO PURCHASER

             At or prior to the Closing, Seller shall deliver the following documents to Purchaser:

             6.1   A statement setting forth the aggregate amount of Deposit Liabilities and Accrued
Deposit Interest thereon to be transferred to and assumed by Purchaser, as of the opening of
business five (5) business days prior to the Closing Date;

             6.2   A statement of the Purchased Loans, as of the opening of business five (5)
business days prior to the Closing Date, setting forth the aggregate unpaid principal amount of
such Purchased Loans and accrued interest thereon and listing, for each Purchased Loan, the
name and address of the borrower, the unpaid principal amount thereof interest rate thereon and
the amount of accrued but unpaid interest owing in regard thereto, the amount of escrows held by
Seller with respect thereto, if any, and such other information as may be necessary for Purchaser
to establish accounts therefore;

             6.3   A statement of the Cash on Hand as of the opening of business on the Closing
Date, and of the estimated proration amounts determined in accordance with Section 1.6 hereof,

             6.4   All records, files and documents of the Branch relating to the Deposit Liabilities
and Purchased Loans to be assumed or purchased by Purchaser, including, but not limited to,
signature cards, applications, certificates, notes, security agreements, pledge agreements, and
properly executed assignments and endorsements with respect thereto, and actual physical
possession of the Branch;

             6.5   On or prior to Closing, Seller will have obtained and delivered all material
consents reasonably necessary to authorize the transfer and assignment to Purchaser of, or the
substitution of Purchaser for Seller under, all material Contracts (without any material alterations
required by any third party and preserving for Purchaser all material rights and privileges
thereunder).

             6.6   Certified copies of resolutions of the Board of Directors of Seller approving and
authorizing the execution, delivery and performance of this Agreement and any other documents
required to be executed and delivered to the Seller hereunder;

             6.7   A provisional closing statement for execution by the parties;

             6.8   A listing of the Deposits as of the close of business five (5) business days prior to
the Closing Date (the "Deposit Listing") on hard copy or utilizing such other method of

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information transfer as the parties shall have agreed, which Deposit Listing shall include, for
each Deposit, the name and address of the owner thereof, the account number, the principle
balance, the accrued interest, the maturity date, if any, the interest rate, the tax identification
number, and such other information as may be necessary for Purchaser to establish accounts
therefore;

             6.9   An Instrument of Transfer, Assignment and Assumption in the form attached
hereto as Exhibit 6.9, and such other instruments of transfer reasonably requested by Purchaser as
necessary to transfer good and marketable title to the Assets (other than the Real Property) free
and clear of all claims, encumbrances and rights of third parties.

             6.10  	All documents and other instruments as may be required to be delivered by Seller
pursuant to the terms of the Real Property Contract.

ARTICLE VII

POST-CLOSING MATTERS

             7.1   Information In Usable Form.  Promptly following the Closing, Purchaser and
Seller will use reasonable efforts to cause all information concerning the Purchased Loans and
the Deposits to be transferred into a form usable by Purchaser.

             7.2   Transactions After Closing Date.

		          A.          Following the Closing, Purchaser agrees to pay in accordance with law all
checks, drafts and withdrawal orders which are properly drawn by depositors with respect
to the Deposits assumed by Purchaser, duly endorsed (or for which necessary
endorsements are deemed supplied by applicable law) and otherwise properly payable, in
light of credit balances and any overdraft privileges applicable to such depositors, and
presented to Purchaser by mail, over its counters, or through the check clearing system of
the banking industry, and in all other respects to discharge, in the usual course of the
banking business, the duties and obligations of Seller with respect to the balances due and
owing to the depositors whose Deposits are assumed by the Purchaser.

          B.          For a period of ninety (90) days after the Closing Date, Seller agrees to act
as Purchaser's limited correspondent for the processing of checks, drafts and withdrawal
orders drawn before or after the Closing on the draft or check forms provided by the
Seller on accounts assumed by Purchaser hereunder, and Purchaser will honor and pay all
such checks, drafts, and withdrawals orders, if duly endorsed and to the extent that the
credit balances or overdraft privileges of the drawers or makers permit, provided that the
Seller's sole responsibility shall be to actually deliver at Seller's cost to a location
reasonably designated by Purchaser in the State of Washington all such checks, drafts and
withdrawal orders to Purchaser or Purchaser's agent at such times and places as the
parties so shall agree but in no event later than the same day Seller receives such checks,
drafts and withdrawal orders from its agent or processor.  Purchaser agrees to indemnify
Seller for third party costs incurred by Seller with respect to this paragraph, including
charges to the Seller through the check clearing system of the banking industry which
result from

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		check, draft or withdrawal forms of the Seller being used after the Closing
Date by the depositors whose accounts are assumed hereunder.

          C.          If any uncollected item credited to a Deposit at the time of the transfer of
such Deposit to Purchaser is subsequently returned resulting in an overdraft to the
Deposit account, Seller agrees, not later than two (2) business days after demand, to pay
to Purchaser the amount of such uncollected item; provided, however, that Purchaser
shall, upon Seller's making payment for such uncollected item, deliver such uncollected
item to Seller and shall assign to Seller any and all rights which Purchaser may have or
obtain in connection with such returned item.

          D.          If the balance due on any Purchased Loan transferred and assigned to
Purchaser pursuant to the terms of the Agreement has been reduced as a result of the
receipt of an item or items prior to the Closing Date, which are returned after the Closing
Date as uncollected, the asset value represented by the Purchased Loan transferred shall
be correspondingly increased, and an amount in cash equal to such increase shall be paid
by Purchaser to Seller within two (2) business days after receipt of such returned item.

          E.          If Seller receives payment with respect to any Purchased Loan after the
Closing Date, Seller shall remit such payments to Purchaser in the same form that Seller
receives such payments.

          F.          For a period of thirty (30) days after the Closing Date, Seller agrees that
upon demand of Purchaser Seller shall immediately pay to Purchaser the overdraft
amount (negative balance) of any transferred Deposit.

             7.3   Further Assurances.  On and after the Closing Date, Seller shall (i) give such
further assurances to Purchaser and shall execute, acknowledge and deliver all such bills of sale,
deeds acknowledgments and other instruments, and take such further action as may be necessary
and appropriate to effectively vest in Purchaser the full legal and equitable title to the Assets and
to the security interests, if any, relating to the Assets, and (ii) use reasonable efforts to assist
Purchaser in the orderly transition of the Branch operations being acquired by the Purchaser.  In
order to comply with its obligations set forth in subsection (i) above, Seller will grant to specified
employees of Purchaser, if necessary, a power of attorney (the "Power of Attorney") for the
limited purpose of signing and filing all such bills of sale, acknowledgments, assignments and
other instruments.

             7.4   Signage.  All interior and exterior signs identifying the Seller will be covered or
removed by Purchaser, at Purchaser's expense, by the opening of business on the first business
day after the Closing Date and all signs will be removed within ten (10) calendar days following
the Closing Date.  From and after the Closing Date, Purchaser will at its expense as soon as
reasonably practicable change the name on all documents and facilities relating to the Branch to
Purchaser's name or to a name which is not deceptively similar to Seller.

             7.5   Indemnification by Purchaser.  Purchaser agrees to indemnify and hold Seller
harmless from and against any and all damages, liabilities and losses which may be sustained by

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Seller by reason of Purchaser's breach of any representation, warranty or covenant to Seller under
this Agreement.  Purchaser further agrees to indemnify and hold Seller harmless from and against
any and all damages, liabilities and losses which may be sustained by Seller by reason of
Purchaser's actions on and after the Closing Date with respect to the Assets or Assumed
Liabilities transferred hereunder. 

             Purchaser's covenants shall not be deemed to be violated by discharge of Assumed
Liabilities in accordance with normal trade practices or by forbearing to discharge any such
obligation which Purchaser is disputing in good faith and for which Purchaser has provided
adequate reserves, provided Purchaser indemnifies and holds Seller harmless in connection with
the same as set forth above.

             7.6   Indemnification by Seller.  Seller agrees to indemnify and hold Purchaser
harmless from and against any and all damages, liabilities and losses which may be sustained by
Purchaser by reason of Seller's breach of any representation, warranty or covenant to Purchaser
under this Agreement.  Seller further agrees to indemnify and hold Purchaser harmless from and
against any and all damages, liabilities and losses which may be sustained by Purchaser with
respect to the Branch, the Assets or the Assumed Liabilities arising from acts, omissions or
events occurring prior to the Closing Date, but not including any state of facts existing, or act or
omission of Seller, with respect to: (a) the title to the Real Property and any claims, liens or
encumbrances thereon (it being understood and agreed that Purchaser will rely upon title
insurance for these purposes); or (b) the condition of the Real Property, which the parties
acknowledge is being sold "AS IS."

             7.7   Defense of Actions - Purchaser Indemnifications.  Seller shall notify Purchaser
promptly of any lawsuit or claim against Seller which it has reasonable cause to believe would
entitle it to indemnification hereunder.  Purchaser shall be entitled to assume at its expense the
defense of, and to determine the terms of settlement of, any such suit or claim, except that no
term awarding relief other than money damages against Seller may be agreed to without the
consent of Seller, and no award of money damages against Seller shall be agreed to without
satisfactory prior arrangements between Purchaser and Seller to assure Seller that Purchaser will
have sufficient funds available to respond to the award.  If Purchaser promptly so elects to
assume, and promptly so notifies Seller, and does assume, the defense of any such suit or claim,
it shall not be liable for any legal expense or other expenses incurred by Seller with respect to
such suit or claim and Seller shall be solely responsible for those expenses (whether incurred by
Seller before or after Purchaser assumes the defense of any such suit or claim).  If Purchaser does
not assume the defense of any such suit or claim, it shall thereafter be barred from disputing the
nature and amount of the monetary damages ultimately incurred or determined to have been
incurred by Seller in settling or litigating the suit or claim.

             7.8   Defense of Actions - Seller Indemnifications.  Purchaser shall notify Seller
promptly of any lawsuit or claim against Purchaser which it has reasonable cause to believe
would entitle it to indemnification hereunder.  Seller shall be entitled to assume at its expense the
defense of and to determine the terms of settlement of, any such suit or claim, except that no term
awarding relief other than money damages against Purchaser may be agreed to without the
consent of the Purchaser, and no award of money damages against Purchaser shall be agreed to

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without satisfactory prior arrangements between Seller and Purchaser to assure Purchaser that
Seller will have sufficient funds available to respond to the award.  If Seller promptly so elects to
assume, and promptly so notifies Purchaser, and does assume, the defense of any such suit or
claim, it shall not be liable for any legal expense or other expenses incurred by Purchaser with
respect to such suit or claim and Purchaser shall be solely responsible for those expenses
(whether incurred by Purchaser before or after Seller assumes the defense of any such suit or
claim).  If the Seller does not assume the defense of any such suit or claim, it shall thereafter be
barred from disputing the nature and amount of the monetary damages ultimately incurred or
determined to have been incurred by the Purchaser in settling or litigating the suit or claim.

ARTICLE VIII

 CLOSING CONDITIONS

             8.1   Conditions Precedent to Seller's Obligation to Close.  The obligation of Seller
to close the transactions contemplated by this Agreement is subject to the satisfaction (unless
waived in advance in writing by Seller) of each of the following conditions and at or prior to
Closing;

		          (A)         The representations and warranties of Purchaser shall be true and correct
as of the date hereof and as of the time of Closing as if made anew at such time;

          (B)         Purchaser shall have performed all of its covenants and agreements
contained herein which require performance at or prior to Closing, including such
covenants and agreements contained in the Real Property Contract;

          (C)         No action or proceeding shall have been instituted pertaining to the
transactions contemplated by this agreement; and

          (D)         All required regulatory approvals, regardless of whether Seller or
Purchaser was required to apply for the same, shall have been received without the
imposition of any burdensome condition upon Seller and all applicable waiting periods
shall have expired.

             8.2   Conditions Precedent to Purchaser's Obligation to Close.  The obligation of
Purchaser to close the transactions contemplated by this Agreement is subject to the satisfaction
(unless waived in advance in writing by Purchaser) of each of the following conditions at or prior
to closing:

		          (A)         The representations and warranties of Seller shall be true and correct as of
the date hereof and as of the time of Closing as if made anew at such time;

          (B)         Seller shall have performed all of its covenants and agreements contained
herein which require performance at or prior to Closing, including such covenants and
agreements contained in the Real Property Contract;

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		          (C)         No action or proceeding shall have been instituted pertaining to the
transactions contemplated by this Agreement;

          (D)         All required regulatory approvals, regardless of whether Seller or
Purchaser was required to apply for the same, shall have been received without the
imposition of any burdensome condition upon Purchaser and all applicable waiting
periods shall have expired; and

ARTICLE IX

MISCELLANEOUS

             9.1   Expenses.  Seller and Purchaser each shall pay all of their own out-of-pocket
expenses in connection with this Agreement, including appraisals, accounting and legal fees and
taxes, if any, whether or not the transactions contemplated by this Agreement are consummated.
Purchaser shall be responsible for payment of all costs associated with the filing and recording of
bills of sale and other instruments necessary or desirable to be filed by Purchaser after the
Closing.

             9.2   Employment of Existing Employees.  The Seller shall terminate employees of
the Branch (the "Employees") on or prior to the Closing Date.  The Seller shall provide to the
Purchaser, within ten (10) days after the Signing Date of this Agreement, a list of Seller's present
Branch employees, their salaries, and their benefits.  Purchaser agrees to extend offers of at-will
employment to the Employees.  Purchaser's employment offers shall provide the Employees with
the same or similar benefits as the Purchaser offers to the Purchaser's other employees that are
similarly situated in terms of their position and longevity.  Seller shall be responsible for payment
of all salaries and benefits of the Employees prior to the Closing.  Seller shall indemnify
Purchaser for any damages, losses and expenses (including reasonable attorney fees) incurred by
the Purchaser resulting from employment claims by Seller's Branch employees against Purchaser
relating to Seller's actions with respect to such employees prior to termination of employment, as
required by the first sentence of this Section 9.2.  The Purchaser shall indemnify Seller for any
damages, losses and expenses (including reasonable attorney fees) incurred by Seller resulting
from employment claims by Seller's Branch employees against the Seller relating to Purchaser's
actions with respect to such employees from and after the Closing Date.

             9.3   Earnest Money.  Purchaser has paid to Seller simultaneously with the execution
of this Agreement earnest money in the amount of $100,000 (the "Earnest Money"), the receipt
of which the Seller hereby acknowledges.  The Earnest Money is not refundable if this
Agreement is properly terminated by Seller pursuant to Section 9.4A or by Purchaser or Seller
pursuant to Section 9.4D.

             9.4   Termination; Extension of Closing Date.  This Agreement may be terminated:

		          A.          By the non-defaulting party, if the other party hereto shall fail to perform
or comply in a timely manner with its obligations under this Agreement, including its
obligations under the Real Property Contract, and such failure remains uncured on the
tenth (10th) day following receipt of written notice from the non-defaulting party thereof.

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		          B.          By mutual consent of the parties hereto.

          C.          By Seller, if Purchaser terminates the Real Estate Contract as permitted
thereunder; provided, however, Seller shall not be permitted to terminate this Agreement
if the Real Estate Contract is terminated in accordance with Section 4.10 of this
Agreement.

          D.          By Seller or Purchaser, if the Closing has not occurred as of September 30,
2009, unless Purchaser provides Seller with written notice at least 30 days prior to
September 30, 2009 of its election to further extend the time for consummation of the
transactions contemplated by this Agreement to December 30, 2009; provided a
defaulting party may not exercise a right of termination or extension under this paragraph.

             9.5   Modification and Waiver.  No modifications of any provision of the Agreement
shall be binding unless in writing and executed by the party sought to be bound thereby.
Performance of or compliance with any covenant given herein or satisfaction of any condition to
the obligations of either party hereunder may be waived by the party to whom such covenant is
given or by whom such condition is intended to benefit, except to the extent any such condition
is required by law, so long as any such waiver is in writing.

             9.6   Binding Effect, Assignment.  This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and assigns, provided,
however, that neither this Agreement nor any rights, privileges, duties or obligations of the
parties hereto, and provided further that in the case of any such assignment the assigning party
shall also remain responsible as a party hereto.

             9.7   Entire Agreement; Governing Law.  This Agreement, together with the Exhibits
attached hereto and made a part hereof, contains the entire Agreement between the parties hereto
with respect to the transactions covered and contemplated hereunder, and supersedes all prior
agreements or understandings between the parties hereto relating to the subject matter thereof.
This Agreement shall be governed by and construed in accordance with the federal banking laws
of the United States, as appropriate, and otherwise in accordance with the laws of the State of Washington.

             9.8   Headings.  The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of this Agreement.

             9.9   Severability.  In the event that any provision of this Agreement shall be held
invalid, illegal or unenforceable in any respect, the validity, illegality and enforceability of the
remaining provisions contained in this Agreement shall not in any way be affected or impaired
thereby, and this Agreement shall otherwise remain in full force and effect.

             9.10  Counterparts.  This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement and shall become effective when one
or more counterparts have been signed by each of the parties hereto.

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             9.11  Notices.  All notices, consents, requests, instruction, approvals, waivers,
stipulations and other communications provided herein to be given by one party hereto to the
other party shall be deemed validly given, made or served, if in writing and delivered personally
or sent by certified mail, return receipt requested, if to 

             Seller addressed to:

		6920 220th Street, SW

Mountlake Terrace, WA  98043

Attention: Joseph Adams, CEO

             Purchaser addressed to:

		2001 5th Avenue, Suite 200

Seattle, WA  98121

Attention: Laurie Stewart, President and CEO

             Notice by certified mail shall be deemed to be received three (3) business days after
mailing of the same. Either party may change the persons or addresses to whom or to which
notices may be sent by written notice to the other.

             9.12  Survival.  All of the representations, warranties, covenants and agreements of the
parties contained in this Agreement, except as otherwise stated, shall survive the Closing.

             9.13  Remedies.  In the event the transactions contemplated by this Agreement are not
consummated due to the willful breach by a party hereto, then the nonbreaching party shall be
entitled to all remedies and relief, at law or in equity, against the breaching party with all
remedies being deemed cumulative and no remedy being deemed exclusive.

             The parties hereto have caused this Agreement to be executed, by their duly authorized
representatives, as of the day and year first above written.

	PURCHASER:		SELLER:
	By:	/s/ Laura Lee Stewart 
		By:	/s/ Joe Adams 

	Name:	Laura Lee Stewart  
		Name:	Joe Adams 

	Title:	President/CEO
		Title	CEO 

21

INDEX OF EXHIBITS

	Exhibit 1.1A		Personal Property

	Exhibit 1.1B		1.1B(1) Excluded Loans as of March 31, 2009; 1.1B(2) Existing
Loans as of March 31, 2009: 1.1B(3) Purchased Loans as of the
Closing Date
			
	Exhibit 1.1C		Real Property Contract
			
	Exhibit 1.2A		Deposit Liabilities [1.2A(1) as of March 31, 2009; 1.2A(2) as of the
Closing Date]
			
	Exhibit 1.2B		Contracts
			
	Exhibit 1.2C		Names and addresses of Safe Deposit Box holders, which Exhibit
shall be updated as of the Closing
			
			
	Exhibit 6.9		Instrument of Transfer, Assignment and Assumption

22

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