Document:

d992534_ex4-24.htm

    Exhibit
4.24

    

    

    

    Date
30 April 2009

    

    

    

    

    

    

    

    

    

    

    

    

    

    ELENI
SHIPPING LIMITED

    as
Borrower

    

    

    

    -and-

    

    

    

    CALYON

    as
Lender

    

    

    

    

    

    

    

    

    

    

    ________________________________________________

    

    LOAN
AGREEMENT

    ________________________________________________

    

    relating
to a US$10,000,000 facility

    to
finance part of the acquisition cost of

    m.v.
"ELENI P"

    

    
      
        
          WATSON,
FARLEY & WILLIAMS

          Piraeus

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    INDEX

    

    CLAUSE                                                                                                                                                    
                        PAGE

     

    
      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                            
                                                                                                                                                              
                                                                                                                                                                
                                                                                                                                                                  
                                                                                                                                                                    
                                                                                                                                                                      
                                                                                                                                                                        
                                                                                                                                                                          
                                                                                                                                                                            
                                                                                                                                                                              
                                                                                                                                                                                
                                                                                                                                                                                  
                                                                                                                                                                                    
                                                                                                                                                                                      
                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                            
                                                                                                                                                                                              
                                                                                                                                                                                                
                                                                                                                                                                                                  
                                                                                                                                                                                                    
                                                                                                                                                                                                      
                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                            
                                                                                                                                                                                                              
                                                                                                                                                                                                                
                                                                                                                                                                                                                  
                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                        
                                                                                                                                                                                                                          
                                                                                                                                                                                                                            
                                                                                                                                                                                                                              
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                              	
                                                                                                                                                                                                                                                      1

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      INTERPRETATION

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      1

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      2

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      FACILITY

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      12

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      3

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      DRAWDOWN

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      12

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      4

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      INTEREST

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      12

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      5

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      INTEREST
      PERIODS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      14

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      6

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      DEFAULT
      INTEREST

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      14

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      7

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      REPAYMENT
      AND PREPAYMENT

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      15

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      8

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      CONDITIONS
      PRECEDENT

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      16

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      9

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      REPRESENTATIONS
      AND WARRANTIES

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      17

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      10

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      GENERAL
      UNDERTAKINGS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      19

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      11

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      CORPORATE
      UNDERTAKINGS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      22

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      12

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      INSURANCE

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      23

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      13

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      SHIP
      COVENANTS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      27

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      14

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      SECURITY
      COVER

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      30

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      15

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      PAYMENTS
      AND CALCULATIONS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      32

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      16

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      APPLICATION
      OF RECEIPTS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      32

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      17

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      APPLICATION
      OF EARNINGS AND SWAP PAYMENTS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      34

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      18

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      EVENTS
      OF DEFAULT

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      35

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      19

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      FEES
      AND EXPENSES

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      39

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      20

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      INDEMNITIES

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      40

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      21

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      NO
      SET-OFF OR TAX DEDUCTION

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      41

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      22

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      ILLEGALITY,
      ETC

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      42

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      23

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      INCREASED
      COSTS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      42

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      24

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      SET
      OFF

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      44

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      25

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      TRANSFERS
      AND CHANGES IN LENDING OFFICE

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      44

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      26

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      VARIATIONS
      AND WAIVERS

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      45

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      27

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      NOTICES

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      45

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      28

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      SUPPLEMENTAL

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      47

                                                                                                                                                                                                                                                    
	 	 	 
	
                                                                                                                                                                                                                                                      29

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      LAW
      AND JURISDICTION

                                                                                                                                                                                                                                                    	
                                                                                                                                                                                                                                                      47

                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                

                                                                                                                                                                                                                              

                                                                                                                                                                                                                            

                                                                                                                                                                                                                          

                                                                                                                                                                                                                        

                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                  

                                                                                                                                                                                                                

                                                                                                                                                                                                              

                                                                                                                                                                                                            

                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                      

                                                                                                                                                                                                    

                                                                                                                                                                                                  

                                                                                                                                                                                                

                                                                                                                                                                                              

                                                                                                                                                                                            

                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                      

                                                                                                                                                                                    

                                                                                                                                                                                  

                                                                                                                                                                                

                                                                                                                                                                              

                                                                                                                                                                            

                                                                                                                                                                          

                                                                                                                                                                        

                                                                                                                                                                      

                                                                                                                                                                    

                                                                                                                                                                  

                                                                                                                                                                

                                                                                                                                                              

                                                                                                                                                            

                                                                                                                                                          

                                                                                                                                                        

                                                                                                                                                      

                                                                                                                                                    

                                                                                                                                                  

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            
              
                	
                        SCHEDULE
      1  DRAWDOWN NOTICE

                      	
                        49

                      
	 	 
	
                        SCHEDULE
      2  CONDITION PRECEDENT DOCUMENTS

                      	
                        50

                      
	 	 
	
                        SCHEDULE
      3  DESIGNATION NOTICE

                      	
                        52

                      
	 	 
	
                        EXECUTION
      PAGE

                      	
                        53

                      

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    LOAN AGREEMENT made on 30
April 2009

    

    BETWEEN

    

    
      	
              (1)

            	
              ELENI SHIPPING LIMITED,
      a corporation incorporated in the Republic of Liberia and having its
      registered office at 80 Broad Street, Monrovia, Liberia (the "Borrower");
      and

            

    

     

    
      	
              (2)

            	
              CALYON, acting through
      its office at 9 Quai du President Paul Doumer, 92400 Courbevoie, La
      Defense, Paris, France (the "Lender").

            

    

     

    WHEREAS

    

    
      	
              (A)

            	
              The
      Lender has agreed to make available to the Borrower a loan facility of the
      lesser of (a) US$10,000,000, (b) 55 per cent. of the acquisition cost of
      m.v. "ELENI P" (the "Ship") and (c) 55 per
      cent. of the market value of the Ship on the Drawdown Date (determined by
      the valuation of the Ship referred to at paragraph 7 of Schedule 2, Part
      A) for the purpose of re-financing part of the acquisition cost of the
      Ship; and

            

    

    

    
      	
              (B)

            	
              The
      Borrower may, if it so wishes, from time to time hedge its exposure under
      this Agreement to interest rate fluctuations by entering into interest
      rate swap transactions with the Lender pursuant to the terms of the Master
      Agreement.

            

    

     

    

    IT IS AGREED as
follows:

    

    
      	
              1

            	
              INTERPRETATION

            

    

     

    
      	
              1.1

            	
              Definitions.  Subject
      to Clause 1.5, in this Agreement:

            

    

     

    "Accounting
Information"  means the annual audited accounts of the Borrower
referred to in Clause 10.6(a), the annual audited consolidated accounts of the
Group referred to in Clause 10.6(b) or as the context may require;

    

    "Accounts
Pledge"  means a deed creating security in respect of the
Operating Account and the Retention Account in such form as the Lender may
approve or require;

     

    "Approved
Manager"  means, Eurobulk S.A. a corporation incorporated in
the Republic of Liberia and having a place of business at Aethrion Center, 40
Ag. Konstantinou Street, Maroussi 151 24, Athens, Greece or any other company
which the Lender may approve from time to time as the manager of the
Ship;

     

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

     

    
      	
               
      

            	
              (a)

            	
              30
      April 2009 (or such later date as the Lender may agree with the Borrower);
      or

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      earlier, the date on which the Loan is fully borrowed or the Lender's
      obligation to advance the Loan is cancelled or
  terminated;

            

    

     

    "Borrower"  means
Eleni Shipping Limited, a corporation incorporated in the Republic of Liberia
and having its registered office at 80 Broad Street, Monrovia,
Liberia;

     

    "Business Day"  means
a day on which banks are open in London and Paris 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"  means any
charter in respect of the ship which exceeds, or is capable of exceeding 12
months in duration;

     

    "Charter
Assignment"  means in relation to any Charter, an assignment of
the rights of the Borrower under that Charter in such form as the Lender may
approve or require;

     

    "Confirmation"  has
the meaning given in the Master Agreement;

     

    "Contractual Currency" has the
meaning given in Clause 20.5;

     

    "Corporate
Guarantee"  means the guarantee by the Corporate Guarantor of
the obligations of the Borrower under this Agreement and the Finance Documents
in such form as the Lender may approve or require;

     

    "Corporate
Guarantor"  means Euroseas Ltd. a corporation incorporated in
the Republic of the Marshall Islands and having its registered office at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands in its
capacity as Corporate Guarantor;

     

    "Credit Support Document" has
the meaning given to that expression in section 14 of the Master
Agreement;

     

    "Credit Support Provider" has
the meaning given to that expression in section 14 of the Master
Agreement;

     

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

     

    
      	
               
      

            	
              (a)

            	
              it
      is entered into by the Borrower pursuant to the Master Agreement with the
      Lender;

            

    

     

    
      	
               
      

            	
              (b)

            	
              its
      purpose is the hedging of the Borrower's 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 Borrower to the Lender
      of a notice of designation in the form provided in Schedule 3, 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 the date requested by the Borrower for the Loan to
be advanced, or (as the context requires) the date on which the Loan is actually
advanced;

     

    "Drawdown
Notice"  means a notice in the form set out in Schedule 1 (or
in any other form which the Lender approves or reasonably
requires);

     

    "Early Termination
Date"  has the meaning given to that expression in section 14
of the Master Agreement;

    

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

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              all
      freight, hire and passage moneys, compensation payable to the Borrower in
      the event of requisition of the Ship for hire, remuneration for salvage
      and towage services, demurrage and detention moneys and damages for breach
      (or payments for variation or termination) of any charterparty or other
      contract for the employment of the
Ship;

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              if
      and whenever the Ship is employed on terms whereby any moneys falling
      within paragraphs (a) or (c) above 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;

            

    

     

    "Environmental
Claim"  means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (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 the Ship;
      or

            

    

     

    
      	
               
      

            	
              (b)

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

     

    "Event of
Default"  means any of the events or circumstances described in
Clause 18.1;

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    "Finance
Documents"  means:

     

    
      	
               
      

            	
              (a)

            	
              this
      Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Master Agreement;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Master Agreement Assignment;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Corporate Guarantee;

            

    

     

    
      	
               
      

            	
              (e)

            	
              any
      Charter Assignment;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Mortgage;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      General Assignment;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Accounts Pledge;

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Negative Pledge;

            

    

     

    
      	
               
      

            	
              (j)

            	
              the
      Manager's Undertaking; and

            

    

     

    
      	
               
      

            	
              (k)

            	
              any
      other document (whether creating a Security Interest or not) which is
      executed at any time by the 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 Lender under this Agreement or any
      of the 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 made
      available to the debtor;

            

    

     

    
      	
               
      

            	
              (d)

            	
              under
      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 interest or currency swap or any other kind of derivative transaction
      entered into by the debtor or, if the agreement under which any such
      transaction is entered into requires netting of mutual liabilities, the
      liability of the debtor for the net amount;
or

            

    

     

    
      	
               
      

            	
              (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 (a) to
      (e) if the references to the debtor referred to the other
      person;

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    "Financial
Year"  means, in relation to each of the Borrower and
the  Group, each period of 1 year commencing on 1 January in respect
of which its audited Accounting Information is or ought to be
prepared;

     

    "General
Assignment"  means a general assignment of the Earnings, the
Insurances and any Requisition Compensation in such form as the Lender may
approve or require;

     

    "Group"  means the
Borrower, the Corporate Guarantor and all subsidiaries of the Corporate
Guarantor from time to time during the Security Period and "member of the Group" shall be construed
accordingly;

    

    "Insurances"  means:

     

    
      	
               
      

            	
              (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 the Ship;
      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
5;

     

    "ISM Code" means in relation to
its application to the Borrower, the Approved Manager, the Ship and its
operation:

     

    
      	
               
      

            	
              (a)

            	
              'The
      International Management Code for the Safe Operation of Ships and for
      Pollution Prevention', currently known or referred to as the 'ISM Code',
      adopted by the Assembly of the International Maritime Organisation by
      Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994
      into chapter IX of the International Convention for the Safety of Life at
      Sea 1974 (SOLAS 1974); and

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      further resolutions, circulars, codes, guidelines, regulations and
      recommendations which are now or in the future issued by or on behalf of
      the International Maritime Organisation or any other entity with
      responsibility for implementing the ISM Code, including without
      limitation, the 'Guidelines on implementation or administering of the
      International Safety Management (ISM) Code by Administrations' produced by
      the International Maritime Organisation pursuant to Resolution A.788(19)
      adopted on 25 November 1995,

            

    

     

    as
the same may be amended, supplemented or replaced from time to
time;

     

    "ISM Code Documentation"
includes, in relation to the Ship:

     

    
      	
               
      

            	
              (a)

            	
              the
      document of compliance (DOC) and safety management certificate (SMC)
      issued pursuant to the ISM Code in relation to the Ship within the periods
      specified by the ISM Code; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      other documents and data which are relevant to the ISM SMS and its
      implementation and verification which the Lender may require;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      other documents which are prepared or which are otherwise relevant to
      establish and maintain the Ship's compliance or the compliance of the
      Borrower with the ISM Code which the Lender may
  require;

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    "ISM SMS" means, in relation to
the Ship, the safety management system which is required to be developed,
implemented and maintained by the Borrower under the ISM Code;

     

    "ISPS Code"  means
the International Ship and Port Facility Security Code constituted pursuant to
resolution A.924 (22) of the International Maritime Organisation ("IMO") adopted by a Diplomatic
conference of the IMO on Maritime Security on 13 December 2002 and now set out
in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as
amended) to take effect on 1 July 2004;

    

    
      	
               
      

            	
              "ISPS Code
      Documentation"  includes:

            

    

    

    
      	
               
      

            	
              (a)

            	
              the
      International Ship Security Certificate issued pursuant to the ISPS Code
      in relation to the Ship within the period specified in the ISPS Code;
      and

            

    

     

    
      	
               
      

            	
              (e)

            	
              all
      other documents and data which are relevant to the ISPS Code and its
      implementation and verification which the Lender may
    require;

            

    

     

    "Lender"  means:

     

    
      	
               
      

            	
              (a)

            	
              Calyon,
      acting through its branch at 9 Quai du President Paul Doumer, 92400
      Courbevoie, La Defense, Paris, France (or through another branch notified
      to the Lender under Clause 25.6) or its direct or indirect
      successor;

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      direct or indirect assignee of such bank or financial institution or of a
      successor of it; or

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      direct or indirect successor of an assignee such as is mentioned in (b),
      unless any of the foregoing has assigned all its rights, and novated all
      its obligations and liabilities, under the Finance
    Documents;

            

    

     

    "LIBOR"  means, for
an Interest Period, the rate per annum determined by the Lender to be the rate
at which deposits in Dollars are offered to the Lender by leading banks in the
London Interbank Market at the Lender's request at or about 11.00 a.m. (London
time) on the second Business Day prior to the commencement of that Interest
Period for a period equal to that Interest Period and for delivery on the first
Business Day of it;

     

    "Loan"  means the
principal amount of the borrowing by the Borrower under this Agreement being in
an amount of up to $10,000,000 or, as the context may require, the principal
amount for the time being outstanding under this Agreement;

     

    "Major
Casualty"  means, 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 $350,000 or the equivalent in
any other currency;

     

    "Management
Agreement"  means the agreement (a certified true copy of which
has been delivered to the Lender) made between the Approved Manager and the
Borrower in respect of the management of the Ship;

     

    "Manager's
Undertaking"  means the undertaking referred to in paragraph
3(a) of Part B of Schedule 2 in such form as the Lender may approve or
require;

     

    "Margin"  means:

     

    
      	
               
      

            	
              (a)

            	
              2.5
      per cent. per annum in respect of that part of the Loan constituted by the
      aggregate amount of the Repayment Instalments;
  and

            

    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              2.7
      per cent. per annum in respect of that part of the Loan constituted by the
      Balloon Instalment;

            

    

     

    "Market Value"  means
the market value of the Ship at any date determined in accordance with Clause
14.5;

     

    "Master
Agreement"  means the master agreement (on the 1992 ISDA
(Multicurrency - Crossborder) form) made or to be made between the Borrower and
the Lender and includes all Transactions from time to time entered into and
Confirmations from time to time exchanged thereunder;

     

    "Master Agreement
Assignment"  means the assignment of the Master Agreement by
the Borrower in such form as the Lender may approve or require;

     

    "Master Agreement
Liabilities"  means, at any relevant time, all liabilities
actual or contingent, present or future, of the Borrower to the Lender under the
Master Agreement;

    

    "Mortgage"  means the
first preferred Liberian ship mortgage in respect of the Ship in such form as
the Lender may approve or require;

     

    "Negative
Pledge"  means the negative pledge in respect of the whole of
the issued share capital of the Borrower in such form as the Lender may approve
or require;

     

    "Net Income"  means,
in relation to each Financial Year of the Borrower, the aggregate income of the
Borrower appearing in the Accounting Information of the Borrower for that
Financial Year  as determined in accordance with US GAAP consistently
applied;

    

    "Operating
Account"  means an account in the name of the Borrower with the
Lender designated "Eleni Shipping Limited - Operating Account" or any other
account (with that or another office of the Lender) which is designated by the
Lender as the Operating Account for the purposes of this Agreement;

     

    "Payment Currency" has the
meaning given in Clause 20.5;

     

    "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'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;

            

    

     

    
      	
               
      

            	
              (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 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 or which would
      have such jurisdiction if their assistance were requested by the courts of
      a country referred to in paragraphs (b) or (c)
  above;

            

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

    "Relevant Person" has the
meaning given in Clause 18.8;

     

    "Repayment
Date"  means a date on which a repayment is required to be made
under Clause 7;

     

    "Repayment
Instalment"  has the meaning given in Clause 7.1;

     

    "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";

     

    "Retention
Account"  means an account in the name of the Borrower with the
Lender in Paris designated "Eleni Shipping Limited - Retention Account" or any
other account (with that or another office of the Lender) which is designated by
the Lender as the Retention Account for the purposes of this
Agreement;

     

    "Secured
Liabilities"  means all liabilities which the Borrower, the
Security Parties or any of them have, at the date of this Agreement or at any
later time or times, under or by virtue of the Finance Documents or any judgment
relating to the Finance Documents; 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
      rights of the plaintiff under an action in rem in which the
      vessel concerned has been arrested or a writ has been issued or similar
      step taken; 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 (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 Approved Manager, the Corporate Guarantor and
any other person (except the Lender) 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 final 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 Lender notifies the Borrower and
the Security Parties that:

     

    
      	
               
      

            	
              (a)

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

            

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              neither
      the Borrower nor any Security Party has any future or contingent liability
      under Clause 19, 20 or 21 below or any other provision of this Agreement
      or another Finance Document; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Lender,  in its reasonable judgement, does not consider that
      there is a significant risk that any payment or transaction under a
      Finance Document would be set aside, or would have to be reversed or
      adjusted, in any present or possible future bankruptcy of the Borrower or
      a Security Party or in any present or possible future proceeding relating
      to a Finance Document or any asset covered (or previously covered) by a
      Security Interest created by a Finance
Document;

            

    

     

    "Ship"  means the
1997-built Panamax dry-bulk carrier of 72,119 metric tons deadweight registered
in the ownership of the Borrower under Liberian flag with the name "ELENI
P;

    

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

    

    "Total Loss"
means:

     

    
      	
               
      

            	
              (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 the Ship's
      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 one year
      without any right to an extension;

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      condemnation of the Ship by any tribunal or by any person or person
      claiming to be a tribunal; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      arrest, capture, seizure or detention of the Ship (including any hijacking
      or theft) unless she is within  45 days redelivered to the full
      control of the Borrower;

            

    

     

    "Total Loss Date"
means:

     

    
      	
               
      

            	
              (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 with the Ship's insurers in which the insurers agree to treat
      the Ship as a total loss; and

            

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

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

    

    "US GAAP"  means
generally accepted accounting principles as from time to time in effect in the
United States of America.

    

    
      	
              1.2

            	
              Construction of certain
      terms.  In this
Agreement:

            

    

     

    "approved" means, for the
purposes of Clause 12, approved in writing by the Lender;

     

    "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;

     

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

     

    "excess risks" means, in
relation to the 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 form of
delegated legislation, any order or decree, 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 the Ship, all insurances effected, or which the Borrower is
obliged to effect, under Clause 12 below or any other provision of this
Agreement or another Finance Document;

     

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

     

    "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;

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    "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;

     

    "successor" includes any person
who is entitled (by assignment, novation, merger or otherwise) to any other
person's rights under this Agreement or any other Finance Document (or any
interest in those rights) or who, as administrator, liquidator or otherwise, is
entitled to exercise those rights; and in particular references to a successor
include a person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction or other
reorganisation of it or any other person;

     

    "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 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

            

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              (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,

            

    

     

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

     

    
      	
              1.5

            	
              General
      Interpretation.

            

    

     

    
      	
              (a)

            	
              In
      this Agreement:

            

    

     

    
      	
               
      

            	
              (i)

            	
              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;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              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; and

            

    

     

    
      	
               
      

            	
              (iii)

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

            

    

     

    
      	
              (b)

            	
              Clauses
      1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary
      intention appears; and

            

    

     

    
      	
              (c)

            	
              The
      clause headings shall not affect the interpretation of this
      Agreement.

            

    

     

    
      	
              2

            	
              FACILITY

            

    

     

    
      	
              2.1

            	
              Amount of
      facility.  Subject to the other provisions of this
      Agreement, the Lender shall make available to the Borrower a loan facility
      of up to the lesser of (a) $10,000,000, (b) 55 per cent. of the
      acquisition cost of the Ship and (c) 55 per cent. of the Market Value of
      the Ship (determined by the valuation of the Ship referred to at paragraph
      7 of Schedule 2, Part A) to be drawn in a single
  advance.

            

    

     

    
      	
              2.2

            	
              Purpose of the
      Loan.  The Borrower undertakes with the Lender to use the
      Loan only for the purpose stated in the preamble to this
      Agreement.

            

    

     

    
      	
              3

            	
              DRAWDOWN

            

    

     

    
      	
              3.1

            	
              Request for the
      Loan.  The Borrower may request the Loan to be advanced
      by ensuring that the Lender receives the completed Drawdown Notice not
      later than 11.00 a.m. (London time) 2 Business Days prior to the intended
      Drawdown Date subject to the Drawdown Date being a Business Day during the
      Availability Period.

            

    

     

    
      	
              3.2

            	
              Drawdown Notice
      irrevocable.  A Drawdown Notice must be signed by a
      director or a duly authorised attorney-in-fact of the Borrower; and once
      served, a Drawdown Notice cannot be revoked without the prior consent of
      the Lender.

            

    

     

    
      	
              3.3

            	
              Disbursement of the
      Loan.  Subject to the provisions of this Agreement, the
      Lender shall on the Drawdown Date advance the Loan to the Borrower; and
      payment to the Borrower shall be made to the account which the Borrower
      specifies in the Drawdown Notice.

            

    

     

    
      	
              4

            	
              INTEREST

            

    

     

    
      	
              4.1

            	
              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 Borrower on the last day of that Interest
  Period.

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              4.2

            	
              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 applicable Margin and LIBOR for that Interest
      Period.

            

    

     

    
      	
              4.3

            	
              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.

            

    

     

    
      	
              4.4

            	
              Notification of market
      disruption.  The Lender shall promptly notify the
      Borrower if for any reason the Lender is unable to obtain Dollars in the
      London Interbank Market in order to fund the Loan (or any part of it)
      during any Interest Period, stating the circumstances which have caused
      such notice to be given.

            

    

     

    
      	
              4.5

            	
              Suspension of
      drawdown.  If the Lender's notice under Clause 4.4
      is served before the Loan is advanced, the Lender's obligation to make the
      Loan available shall be suspended while the circumstances referred to in
      the Lender's notice continue.

            

    

     

    
      	
              4.6

            	
              Alternative rate of
      interest.  If, after the Loan has been advanced, the
      Lender notifies that it is unable to obtain Dollars in the London
      Interbank Market to fund the Loan (or any part of it) during any Interest
      Period or adequate and fair means do not exist for ascertaining the rate
      of interest, the Lender shall set an interest rate representing the cost
      of funding of the Lender in Dollars or in any available currency of the
      Loan plus the Margin.

            

    

     

    
      	
              4.7

            	
              Transactions
      under the Master Agreement.

            

    

     

    
      	
              (a)

            	
              At
      any time the Borrower may request the Lender to conclude Transactions for
      the purpose of swapping its interest payment obligations under this
      Agreement subject to such Transactions being entered into after the
      Drawdown Date and the tenor of the same not extending beyond the final
      Repayment Date.  Signature of the Master Agreement does not
      commit the Lender to conclude Transactions, or even to offer terms for
      doing so, but does provide a contractual framework within which
      Transactions may be concluded and secured, assuming that the Lender is
      willing to conclude any Transaction at the relevant time and that, if that
      is the case, mutually acceptable terms can then be agreed at the relevant
      time.

            

    

     

    
      	
              (b)

            	
              In
      relation to the Master Agreement, the Borrower hereby agrees and
      undertakes with the Lender throughout the Security
  Period:

            

    

     

    
      	
               
      

            	
              (i)

            	
              only
      to use Transactions concluded under the Master Agreement for the purpose
      of swapping its interest payment obligations under this Clause 4 from
      LIBOR-based funding to longer-term fixed rate funding or any other form of
      hedging acceptable to the Lender;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              subject
      to the provisions of Clauses 17.2, 17.4 and 17.6 and Provided that on the
      date of application all Repayment Instalments and interest payments due
      under this Agreement have been paid in full and no Event of Default or
      Potential Event of Default has occurred, to apply relevant sums out of the
      Earnings of the Ship and any other amount standing to the credit of the
      Operating Account to meet its obligations under the maturing Transactions
      and procure that all sums derived from such Transactions will be used to
      meet its interest payment obligations under this Clause 4;
    and

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (iii)

            	
              not
      to conclude Transactions which would result, at any time during the
      Security Period, in the notional principal amount of all Transactions then
      remaining exceeding the amount of the Loan, as reduced from time to time
      under Clause 7.1.

            

    

     

    
      	
              (c)

            	
              The
      Lender agrees that, to enable the obligations of the Borrower to it under
      the Master Agreement to be secured, the security of the Finance Documents
      shall be held by the Lender not only to secure the Borrower's obligations
      under this Agreement but also the Borrower's obligations under the Master
      Agreement on the terms set out in Clause
16.

            

    

     

    
      	
              5

            	
              INTEREST
      PERIODS

            

    

     

    
      	
              5.1

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

            

    

     

    
      	
              5.2

            	
              Duration of normal Interest
      Periods.  Subject to Clauses 5.3 and 5.4, each Interest
      Period shall be:

            

    

     

    
      	
              (a)

            	
              3,
      6 or 12 months as notified by the Borrower to the Lender not later than
      11.00 a.m. (London time) 3 Business Days before the commencement of the
      Interest Period; or

            

    

     

    
      	
              (b)

            	
              3
      months, if the Borrower fails to notify the Lender by the time specified
      in paragraph (a) above; or

            

    

     

    
      	
              (c)

            	
              such
      other period as the Lender may agree with the
  Borrower.

            

    

     

    
      	
              5.3

            	
              Duration of Interest Periods
      for Repayment Instalments.  In respect of an amount due
      to be repaid under Clause 7 on a particular Repayment Date, an Interest
      Period shall end on that Repayment
Date.

            

    

     

    
      	
              5.4

            	
              Non-availability of matching
      deposits for Interest Period selected.  If, after the
      Borrower has selected an Interest Period longer than 6 months, the Lender
      notifies the Borrower 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.

            

    

     

    
      	
              6

            	
              DEFAULT
      INTEREST

            

    

     

    
      	
              6.1

            	
              Payment of default interest on
      overdue amounts.  The Borrower shall pay interest in
      accordance with the following provisions of this Clause 6 on any amount
      payable by the Borrower under any Finance Document which the Lender 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

            

    

     

    
      	
              (c)

            	
              if
      such amount has become immediately due and payable under Clause 18.5, the
      date on which it became immediately due and
  payable.

            

    

     

    
      	
              6.2

            	
              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
      Lender to be 1 per cent. above the applicable Margin plus LIBOR at which
      deposits in an amount equal to such overdue amount are offered on call or
      for successive periods of any duration of up to 3 months, as the Lender
      may determine from time to time.

            

    

     

    
      	
              6.3

            	
              Notification of interest
      periods and default rates.  The Lender shall promptly
      notify the Borrower of each interest rate determined by it under Clause
      6.2 and of each period selected by it for the purposes of that Clause; but
      this shall not be taken to imply that the Borrower is liable to pay such
      interest only with effect from the date of the Lender's
      notification.

            

    

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              6.4

            	
              Payment of accrued default
      interest.  Subject to the other provisions of this
      Agreement, any interest due under this Clause shall be paid on the last
      day of the period by reference to which it was
  determined.

            

    

     

    
      	
              6.5

            	
              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 be compounded
      every 3 months.

            

    

     

    
      	
              6.6

            	
              Application to Master
      Agreement.  For the avoidance of doubt, this Clause 6
      does not apply to any amount payable under the Master Agreement in respect
      of any continuing Transaction as to which section 2(e) (Default Interest;
      Other Amounts) of the Master Agreement shall
  apply.

            

    

     

    
      	
              7

            	
              REPAYMENT
      AND PREPAYMENT

            

    

     

    
      	
              7.1

            	
              Amount of repayment
      instalments.  The Borrower shall repay the Loan by 10
      consecutive six-monthly instalments (together, the "Repayment Instalments"
      and each a "Repayment
      Instalment") of (a) in the case of the first and second instalments
      (inclusive), in the amount of $100,000 each, (b) in the case of the third
      and fourth instalments, in the amount of $400,000 each, (c) in the case of
      the fifth and sixth instalments (inclusive), in the amount of $600,000
      each and (e) in the case of seventh to tenth instalments (inclusive), in
      the amount of $800,000 each, together with a balloon payment of $4,600,000
      (the "Balloon
      Instalment").

            

    

     

    
      	
              7.2

            	
              Repayment
      Dates.  The first Repayment Instalment shall be repaid on
      the date falling 6 months after the Drawdown Date, each subsequent
      Repayment Instalment shall be paid at six-monthly intervals thereafter and
      the last Repayment Instalment, together with the Balloon Instalment, shall
      be repaid on the date falling on the earlier of (a) the date falling on
      the fifth anniversary of the Drawdown Date and (b) 30 April
      2014.

            

    

     

    
      	
              7.3

            	
              Final Repayment
      Date.  On the final Repayment Date, the Borrower shall
      additionally pay to the Lender all other sums then accrued or owing under
      any Finance Document.

            

    

     

    
      	
              7.4

            	
              Voluntary
      prepayment.  Subject to the following conditions, the
      Borrower may prepay the whole or any part of the Loan on the last day of
      an Interest Period.

            

    

     

    
      	
              7.5

            	
              Conditions for voluntary
      prepayment.  The conditions referred to in Clause 7.4 are
      that:

            

    

     

    
      	
              (a)

            	
              a
      partial prepayment shall be $200,000 or an integral multiple
      thereof;

            

    

     

    
      	
              (b)

            	
              the
      Lender has received from the Borrower at least 10 days' prior written
      notice specifying the amount to be prepaid and the date on which the
      prepayment is to be made;

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)

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

            

    

     

    
      	
              7.6

            	
              Effect of notice of
      prepayment.  A prepayment notice may not be withdrawn or
      amended without the consent of the Lender and the amount specified in the
      prepayment notice shall become due and payable by the Borrower on the date
      for prepayment specified in the prepayment
  notice.

            

    

     

    
      	
              7.7

            	
              Mandatory
      prepayment.  Without prejudice to the provisions of
      Clause 14, the Borrower shall be obliged to prepay the whole of the Loan
      if the Ship is sold or becomes a Total
Loss:

            

    

     

    
      	
              (a)

            	
              in
      the case of a sale, on or before the date on which the sale is completed;
      or

            

    

     

    
      	
              (b)

            	
              in
      the case of Total Loss, on the earlier of the date falling 150 days after
      the Total Loss Date and the date of receipt by the Lender of the proceeds
      of insurance relating to such Total
Loss.

            

    

     

    
      	
              7.8

            	
              Shareholding and senior
      executive management of Borrower.  If at any time Mr.
      John Pittas and members of the Pittas family (either directly and/or
      through companies beneficially owned by the Pittas family and/or trusts or
      foundations of which the Pittas family are beneficiaries) (i) do not own
      the necessary shareholding to exercise executive power of the Corporate
      Guarantor or (ii) are not represented in the senior executive management
      of the Corporate Guarantor, the Borrower shall promptly advise the Lender
      of the occurrence of the circumstances referred to in this Clause
      7.8.  If the Lender does not approve (in its sole and absolute
      discretion) the change in circumstances which has occurred, the Loan shall
      be prepaid in full subject to the Lender giving the Borrower and the
      Corporate Guarantor 60 days prior written
  notice.

            

    

     

    
      	
              7.9

            	
              Amounts payable on
      prepayment.  A prepayment shall be made together with
      accrued interest (and any other amount payable under Clause
      20  below or otherwise) in respect of the amount prepaid and, if
      the prepayment is not made on the last day of an Interest Period together
      with any sums payable under Clause 20.1(b) but without premium or
      penalty.

            

    

     

    
      	
              7.10

            	
              Application of partial
      prepayment.  Each partial prepayment shall be applied in
      inverse order of maturity first in reducing the Balloon Instalment and
      thereafter against each of the Repayment Instalments specified in Clause
      7.1 which are outstanding at the relevant
time.

            

    

     

    
      	
              7.11

            	
              No
      reborrowing.  No amount prepaid may be
      reborrowed.

            

    

     

    
      	
              8

            	
              CONDITIONS
      PRECEDENT

            

    

     

    
      	
              8.1

            	
              Documents, fees and no
      default.  The Lender's obligation to advance the Loan is
      subject to the following conditions
precedent:

            

    

     

    
      	
              (a)

            	
              that,
      on or before the service of the Drawdown Notice, the Lender receives the
      documents described in Part A of Schedule 2 in form and substance
      satisfactory to it and its lawyers;

            

    

     

    
      	
              (b)

            	
              that,
      on the Drawdown Date but prior to the advancing of the Loan, the Lender
      receives the documents described in Part B of Schedule 2 in form and
      substance satisfactory to it and its
lawyers;

            

    

     

    
      	
              (c)

            	
              that
      the Lender has received the management fee referred to in Clause 19.1 and
      has received payment of the expenses referred to in Clause
      19.2;

            

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)

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

            

    

     

    
      	
               
      

            	
              (i)

            	
              no
      Event of Default or Potential Event of Default has occurred and is
      continuing or would result from the borrowing of the
  Loan;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      representations and warranties in Clause 9.1 and those of the 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 4.4 has occurred and is
      continuing;

            

    

     

    
      	
              (e)

            	
              that,
      if the ratio set out in Clause 14.1 were applied immediately following the
      advancing of the Loan, the Lender would not be entitled to oblige the
      Borrower to provide additional security or prepay part of the Loan under
      that Clause; and

            

    

     

    
      	
              (f)

            	
              that
      the Lender has received, and found to be acceptable to it, any further
      opinions, consents, agreements and documents in connection with the
      Finance Documents which the Lender may reasonably request by notice to the
      Borrower prior to the Drawdown
Date.

            

    

     

    
      	
              8.2

            	
              Waivers of conditions
      precedent.  If the Lender, at its discretion, permits the
      Loan to be borrowed before certain of the conditions referred to in Clause
      8.1 are satisfied, the Borrower shall ensure that those conditions are
      satisfied within 5 Business Days after the Drawdown Date (or such longer
      period as the Lender may specify).

            

    

     

    
      	
              9

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    
      	
              9.1

            	
              General.  The
      Borrower represents and warrants to the Lender as
  follows.

            

    

     

    
      	
              9.2

            	
              Status.  The
      Borrower is duly incorporated and validly existing and in good standing
      under the laws of the Republic of
Liberia.

            

    

     

    
      	
              9.3

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

            

    

     

    
      	
              9.4

            	
              Corporate
      power.  The Borrower has the corporate capacity, and has
      taken all corporate action and obtained all consents necessary for
      it:

            

    

     

    
      	
              (a)

            	
              to
      execute the Finance Documents to which it is a party;
  and

            

    

     

    
      	
              (b)

            	
              to
      borrow under this Agreement and to make all the payments contemplated by,
      and to comply with, this Agreement and the other Finance Documents to
      which it is a party.

            

    

     

    
      	
              9.5

            	
              Consents in
      force.  All the consents referred to in Clause 9.4 remain
      in force and nothing has occurred which makes any of them liable to
      revocation.

            

    

     

    
      	
              9.6

            	
              Legal validity; effective
      Security Interests.  The Finance Documents to which the
      Borrower is a party 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
      the Borrower's legal, valid and binding obligations enforceable against
      the Borrower in accordance with their respective terms;
  and

            

    

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              create
      legal, valid and binding 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.

     

    
      	
              9.7

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

            

    

     

    
      	
              (a)

            	
              the
      Borrower 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 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.

            

    

     

    
      	
              9.8

            	
              No
      conflicts.  The execution by the Borrower of the Finance
      Documents and the borrowing of the Loan, and its compliance with each
      Finance Document will not involve or lead to a contravention
      of:

            

    

     

    
      	
              (a)

            	
              any
      law or regulation; or

            

    

     

    
      	
              (b)

            	
              the
      constitutional documents of the Borrower;
or

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              9.9

            	
              No withholding
      taxes.  All payments which the Borrower is liable to make
      under the Finance Documents  may be made without deduction or
      withholding for or on account of any tax payable under any law of any
      Pertinent Jurisdiction.

            

    

     

    
      	
              9.10

            	
              No
      default.  No Event of Default or Potential Event of
      Default has occurred and is
continuing.

            

    

     

    
      	
              9.11

            	
              Information.  All
      information which has been provided in writing by or on behalf of the
      Borrower or any Security Party to the Lender in connection with any
      Finance Document satisfied the requirements of Clause 10.5; all audited
      and unaudited accounts which have been so provided satisfied the
      requirements of Clause 10.7; and there has been no material adverse change
      in the financial position or state of affairs of the Borrower from that
      disclosed in the latest of those
accounts.

            

    

     

    
      	
              9.12

            	
              No
      litigation.  No legal or administrative action involving
      the Borrower (including action relating to any alleged or actual breach of
      the ISM Code and the ISPS Code) has been commenced or taken or, to the
      Borrower's knowledge, is likely to be commenced or taken which, in either
      case, would be likely to have a material adverse effect on the Borrower's
      financial position or
profitability.

            

    

     

    
      	
              9.13

            	
              Compliance with certain
      undertakings.  At the date of this Agreement, the
      Borrower is in compliance with Clauses 10.2, 10.4, 10.9 and
      10.12.

            

    

     

    
      	
              9.14

            	
              Taxes
      paid.  The Borrower has paid all taxes applicable to, or
      imposed on or in relation to itself, its business or the
    Ship.

            

    

     

    
      	
              9.15

            	
              ISM Code and ISPS Code
      compliance.  All requirements of the ISM Code and the
      ISPS Code as they relate to the Borrower, the Approved Manager and the
      Ship will on or prior to the Drawdown Date has been complied
      with.

            

    

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              9.16

            	
              No money
      laundering.  Without prejudice to the generality of
      Clause 2.2, in relation to the borrowing by the Borrower of the Loan, the
      performance and discharge of its obligations and liabilities under the
      Finance Documents, and the transactions and other arrangements effected or
      contemplated by the Finance Documents to which the Borrower is a party,
      the Borrower confirms (i) that it is acting for its own account, (ii) that
      it will use the proceeds of the Loan for its own benefit, under its full
      responsibility and exclusively for the purposes specified in this
      Agreement and (iii) that the foregoing will not involve or lead to
      contravention of any law, official requirement or other regulatory measure
      or procedure implemented to combat "money laundering" (as defined in
      Article 1 of the Directive (91/308/EEC) of the Council of the European
      Communities).

            

    

     

    
      	
              10

            	
              GENERAL
      UNDERTAKINGS

            

    

     

    
      	
              10.1

            	
              General.  The
      Borrower undertakes with the Lender to comply with the following
      provisions of this Clause 10 at all times during the Security Period,
      except as the Lender may otherwise
permit.

            

    

     

    
      	
              10.2

            	
              Title; negative
      pledge.  The Borrower
will:

            

    

     

    
      	
              (a)

            	
              hold
      the legal title to, and own the entire beneficial interest in the Ship,
      its 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

            

    

     

    
      	
              (b)

            	
              not
      create or permit to arise any Security Interest over any other asset,
      present or future (including, but not limited to the Borrower's rights
      against the Lender under the Master Agreement or all or any part of the
      Borrower's interest in any amount payable to the Borrower by the Lender
      under the Master Agreement).

            

    

     

    
      	
              10.3

            	
              No disposal of
      assets.  The Borrower will not 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.

            

    

     

    
      	
              10.4

            	
              No other liabilities or
      obligations to be incurred.  The Borrower will not incur
      any liability or obligation except liabilities and obligations under the
      Finance Documents or under the Master Agreement (but in such case, only in
      connection with Transactions)  and liabilities or obligations
      reasonably incurred in the ordinary course of operating and chartering the
      Ship.

            

    

     

    
      	
              10.5

            	
              Information provided to be
      accurate.  All financial and other information which is
      provided in writing by or on behalf of the Borrower under or in connection
      with any Finance Document will be true and not, misleading and will not
      omit any material fact or
consideration.

            

    

     

    
      	
              10.6

            	
              Provision of financial
      statements.  The Borrower will send to the
      Lender:

            

    

     

    
      	
              (a)

            	
              as
      soon as possible, but in no event later than 90 days after the end of each
      Financial Year of the Borrower, the audited Accounting Information of the
      Borrower;

            

    

     

    
      	
              (b)

            	
              as
      soon as possible, but in no event later than 90 days after the end of each
      Financial Year of the Corporate Guarantor, the audited Accounting
      Information of the  Group;
and

            

    

     

    
      	
              (c)

            	
              promptly,
      when requested, such other financial information and accounts relating to
      the business, undertaking, assets, liabilities, revenues, financial
      condition or affairs of any Security Party and such other further general
      information relating to any Security Party as the Lender from time to time
      may reasonably require including (without limitation) in relation to the
      Ship, its Earnings, the Group, the Approved Manager and the Corporate
      Guarantor.

            

    

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
              10.7

            	
              Form of financial
      statements.  All Accounting Information delivered under
      Clause 10.6 will:

            

    

     

    
      	
              (a)

            	
              be
      prepared in accordance with all applicable laws and US GAAP consistently
      applied and, in the case of audited financial statements, certified as to
      its correctness by auditors acceptable to the
  Lender;

            

    

     

    
      	
              (b)

            	
              give
      a true and fair view of the state of affairs of the Borrower or the Group
      (as the case may be) at the date of that Accounting Information and of the
      profit of the Borrower or, as the case may be, the Group for the period to
      which that Accounting Information relates;
and

            

    

     

    
      	
              (c)

            	
              fully
      disclose or provide for all significant liabilities of the Borrower or, as
      the case may be, of
the  Group.

            

    

     

    
      	
              10.8

            	
              Creditor
      notices.  The Borrower will send the Lender, at the same
      time as they are despatched, copies of all communications which are
      despatched to all the Borrower's creditors or any class of
      them.

            

    

     

    
      	
              10.9

            	
              Consents.  The
      Borrower will maintain in force and promptly obtain or renew, and will
      promptly send certified copies to the Lender of, all consents
      required:

            

    

     

    
      	
              (a)

            	
              to
      perform its obligations under any Finance
  Document;

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

            	
              for
      the Borrower to continue to own and operate the
  Ship,

            

    

     

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

     

    
      	
              10.10

            	
              Maintenance of Security
      Interests.  The Borrower
will:

            

    

     

    
      	
              (a)

            	
              at
      its own cost, do all that it reasonably can 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) above, 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 may be 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.

            

    

     

    
      	
              10.11

            	
              Notification of
      litigation.  The Borrower will provide the Lender with
      details of any legal or administrative action involving the Borrower, any
      Security Party, either Approved Manager, the Ship, the Earnings or the
      Insurances as soon as such action is instituted or it becomes apparent to
      the 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.

            

    

     

    
      	
              10.12

            	
              No amendment to Master
      Agreement; Transactions.   The Borrower will
      not:

            

    

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)

            	
              agree
      to any amendment or supplement to, or waive or fail to enforce, the Master
      Agreement or any of its provisions;
or

            

    

     

    
      	
              (b)

            	
              enter
      into any Transaction pursuant to the Master Agreement except Designated
      Transactions.

            

    

     

    
      	
              10.13

            	
              Principal place of
      business.  The Borrower will maintain its place of
      business, and keep its corporate documents and records, at the address
      referred to in Clause 27.2(a); and will not establish, or do anything as a
      result of which it would be deemed to have, a place of business in the
      United Kingdom or the United States of
America.

            

    

     

    
      	
              10.14

            	
              Confirmation of no
      default.  The Borrower will, within 2 Business Days after
      service by the Lender of a written request, serve on the Lender a notice
      which is signed by 2 directors of the 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.

            

    

     

    
      	
              10.15

            	
              Notification of
      default.  The Borrower will notify the Lender as soon as
      the 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 thereafter keep the Lender fully up-to-date with all
developments.

     

    
      	
              10.16

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

            

    

     

    
      	
              (a)

            	
              to
      the Borrower, the Ship, the Approved Manager, the Corporate Guarantor, the
      Insurances, the Earnings; or

            

    

     

    
      	
              (b)

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

            

    

     

     which may be reasonably requested
by the Lender at any time.

     

    
      	
              10.17

            	
              "Know your
      customer".  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 Borrower or any Security Party after the date
      of this Agreement; or

            

    

     

    
      	
              (c)

            	
              a
      proposed assignment or transfer by the 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,

            

    

     

    obliges
the 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 Borrower shall promptly upon the request of the Lender supply, or procure
the supply of, such documentation and other evidence as is reasonably requested
by the Lender (for itself or, in the case of the event described in paragraph
(c), on behalf of any prospective new Lender) in order for the Lender 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.

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
 

    
      	
              10.18

            	
              Minimum
      liquidity.  At all times during the Security Period, the
      Borrower will ensure that an amount of not less than $300,000 is standing
      to the credit of the Operating
Account.

            

    

     

    
      	
              11

            	
              CORPORATE
      UNDERTAKINGS

            

    

     

    
      	
              11.1

            	
              General.  The
      Borrower also undertakes with the Lender to comply with the following
      provisions of this Clause 11 at all times during the Security Period
      except as the Lender may otherwise
permit.

            

    

     

    
      	
              11.2

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

            

    

     

    
      	
              11.3

            	
              Negative
      undertakings.  The Borrower will not:
  

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

            	
              pay
      any dividend or make any other form of distribution or effect any form of
      redemption, purchase or return of share capital Provided that (i) the
      Borrower may pay in any Financial Year (no more frequently than on a
      quarterly basis during that Financial Year) dividends in an aggregate
      amount not exceeding 60 per cent. of the Net Income in that Financial Year
      if at the relevant time no Event of Default has occurred or is continuing
      or would result from the payment of such dividend and (ii) with the prior
      written consent of the Lender (to be given or withheld in its sole and
      absolute discretion), the Borrower may pay dividends in any Financial Year
      in excess of the amount referred to in sub-paragraph
  (i);

            

    

     

    
      	
              (c)

            	
              repay
      any shareholder loans or any other loans advanced to it by any person (or,
      in either case, any interest thereon), nor make nay loans or advances to
      any person; or

            

    

     

    
      	
              (d)

            	
              provide
      any form of credit or financial assistance
to:

            

    

     

    
      	
               
      

            	
              (i)

            	
              a
      person who is directly or indirectly interested in the Borrower's share or
      loan capital; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      company in or with which such a person is directly or indirectly
      interested or connected,

            

    

     

    or
enter into any transaction with or involving such a person or company on terms
which are, in any respect, less favourable to the Borrower than those which it
could obtain in a bargain made at arms' length; or

     

    
      	
              (e)

            	
              open
      or maintain any account with any bank or financial institution except the
      Operating Account and the Retention Account and any other account opened
      or to be opened with the Lender for the purposes of the Finance Documents;
      or

            

    

     

    
      	
              (f)

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

            

    

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	
              (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;
  or

            

    

     

    
      	
              (h)

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

            

    

     

    
      	
              12

            	
              INSURANCE

            

    

     

    
      	
              12.1

            	
              General.  The
      Borrower also undertakes with the Lender to comply with the following
      provisions of this Clause 12 at all times during the Security Period
      except as the Lender may otherwise
permit.

            

    

     

    
      	
              12.2

            	
              Maintenance of obligatory
      insurances.  The Borrower shall keep the Ship insured at
      the expense of the Borrower
against:

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

            	
              war
      risks;

            

    

     

    
      	
              (c)

            	
              protection
      and indemnity risks (all classes);
and

            

    

     

    
      	
              (d)

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

            

    

     

    
      	
              12.3

            	
              Terms of obligatory
      insurances.  The 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 at least the greater of (i) the Market Value of the
      Ship and (ii) 125 per cent. of the aggregate of the Loan and the Swap
      Exposure and upon such terms as shall from time to time be approved in
      writing by the Lender;

            

    

     

    
      	
              (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 the international marine insurance
      market for vessels of the same type and age as the
  Ship;

            

    

     

    
      	
              (d)

            	
              in
      relation to protection and indemnity risks, in respect of the full tonnage
      of the Ship;

            

    

     

    
      	
              (e)

            	
              on
      approved terms; and

            

    

     

    
      	
              (f)

            	
              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.

            

    

     

    
      	
              12.4

            	
              Further protections for the
      Lender.  In addition to the terms set out in Clause 12.3,
      the Borrower shall procure that the obligatory insurances
      shall:

            

    

     

    
      	
              (a)

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

            

    

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              name
      the Lender as sole loss payee with such directions for payment as the
      Lender may specify;

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              (d)

            	
              provide
      that the insurers shall waive, to the fullest extent permitted by English
      law, their entitlement (if any) (whether by statute, common law, equity,
      or otherwise) to be subrogated to the rights and remedies of the Lender in
      respect of any rights or interests (secured or not) held by or available
      to the Lender in respect of the Secured Liabilities, until the Secured
      Liabilities shall have been fully repaid and discharged, except that the
      insurers shall not be restricted by the terms of this paragraph (d) from
      making personal claims against persons (other than the Lender, the
      Borrower or any other Security Party) in circumstances where the insurers
      have fully discharged their liabilities and obligations under the relevant
      obligatory insurances;

            

    

     

    
      	
              (e)

            	
              provide
      that such obligatory insurances shall be primary without right of
      contribution from other insurances which may be carried by the
      Lender;

            

    

     

    
      	
              (f)

            	
              provide
      that the Lender may make proof of loss if the Borrower fails to do so;
      and

            

    

     

    
      	
              (g)

            	
              provide
      that if any obligatory insurance is cancelled, or if any substantial
      change is made in the coverage which adversely affects the interest of the
      Lender, or if any obligatory insurance is allowed to lapse for non-payment
      of premium, such cancellation, charge or lapse shall not be effective with
      respect to the Lender for 30 days (or 7 days in the case of war risks)
      after receipt by the Lender of prior written notice from the insurers of
      such cancellation, change or lapse.

            

    

     

    
      	
              12.5

            	
              Renewal of obligatory
      insurances.  The Borrower
  shall:

            

    

     

    
      	
              (a)

            	
              at
      least 14 days before the expiry of any obligatory insurance effected by
      it:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              obtain
      the Lender's approval to the matters referred to in paragraph (i)
      above;

            

    

     

    
      	
              (b)

            	
              at
      least 7 days before the expiry of any obligatory insurance effected by it,
      renew the insurance in accordance with the Lender's approval pursuant to
      paragraph (a) above; 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 Lender in writing of the terms and
      conditions of the renewal.

            

    

     

    
      	
              12.6

            	
              Copies of policies; letters of
      undertaking.  The Borrower shall ensure that all approved
      brokers provide the Lender 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 of undertaking in a form required by the Lender 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
      12.4;

            

    

     

    
      	
              (b)

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

            

    

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)

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

            

    

     

    
      	
              (d)

            	
              they
      will notify the Lender, 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 the Borrower or its agents and, in the event of
      their receiving instructions to renew, they will promptly notify the
      Lender 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 under such obligatory insurances any premiums or
      other amounts due to them or any other person whether in respect of the
      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 the Ship forthwith upon
      being so requested by the Lender.

            

    

     

    
      	
              12.7

            	
              Copies of certificates of
      entry.  The Borrower shall ensure that any protection and
      indemnity and/or war risks associations in which the Ship is entered
      provides the Lender with:

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

            	
              where
      required to be issued under the terms of insurance/indemnity provided by
      the Borrower's protection and indemnity association, a certified copy of
      each United States of America voyage quarterly declaration (or other
      similar document or documents) made by the Borrower in relation to the
      Ship in accordance with the requirements of such protection and indemnity
      association; and

            

    

     

    
      	
              (d)

            	
              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 the
  Ship.

            

    

     

    
      	
              12.8

            	
              Deposit of original
      policies.  The 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.

            

    

     

    
      	
              12.9

            	
              Payment of
      premiums.  The 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
      Lender.

            

    

     

    
      	
              12.10

            	
              Guarantees.  The
      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.

            

    

     

    
      	
              12.11

            	
              Restrictions on
      employment.  The Borrower shall not employ the Ship, nor
      permit the Ship to be employed, outside the cover provided by any
      obligatory insurances.

            

    

     

    
      	
              12.12

            	
              Compliance with terms of
      insurances.  The Borrower shall not 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 thereunder repayable in whole or
      in part; and, in particular:

            

    

     

    
      	
              (a)

            	
              the
      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 12.7(c) above)
      ensure that the obligatory insurances are not made subject to any
      exclusions or qualifications to which the Lender has not given its prior
      approval;

            

    

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              the
      Borrower shall not make any changes relating to the classification or
      classification society or manager or operator of the Ship unless approved
      by the underwriters of the obligatory
  insurances;

            

    

     

    
      	
              (c)

            	
              the
      Borrower shall make (and promptly supply copies to the Lender of) all
      quarterly or other voyage declarations which may be required by the
      protection and indemnity risks association in which the Ship 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)

            	
              the
      Borrower shall not employ the Ship, 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.

            

    

     

    
      	
              12.13

            	
              Alteration to terms of
      insurances.  The Borrower shall neither make or agree to
      any alteration to  theterms of any obligatory insurance nor
      waive any right relating to any obligatory
  insurance.

            

    

     

    
      	
              12.14

            	
              Settlement of
      claims.  The Borrower shall not 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 Lender to collect or
      recover any moneys which at any time become payable in respect of the
      obligatory insurances.

            

    

     

    
      	
              12.15

            	
              Provision of copies of
      communications.  The Borrower shall provide the Lender,
      at the time of each such communication, copies of all major written
      communications between itself and:

            

    

     

    
      	
              (a)

            	
              the
      approved brokers; and

            

    

     

    
      	
              (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)

            	
              the
      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 the Borrower and any of the persons
      referred to in paragraphs (a) or (b) above relating wholly or partly to
      the effecting or maintenance of the obligatory
  insurances.

            

    

     

    
      	
              12.16

            	
              Provision of
      information.  In addition, the Borrower shall promptly
      provide the Lender (or any persons which it may designate) with any
      information which the Lender (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
      12.17 below or dealing with or considering any matters relating to any
      such insurances,

            

    

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
              12.17

            	
              Mortgagee's interest and
      additional perils insurances.  The Lender shall be
      entitled from time to time to effect, maintain and renew a mortgagee's
      interest insurance policy and, at the discretion of the Lender,a
      mortgagee's interest additional perils policy in respect of the Ship, each
      in such amount and otherwise on such terms, through such insurers and
      generally in such manner as the Lender may from time to time consider
      appropriate and the Borrower shall upon demand fully indemnify the Lender
      in respect of all premiums and other expenses which are incurred in
      connection with or with a view to effecting, maintaining or renewing such
      insurance or dealing with, or considering, any matter arising out of such
      insurance.

            

    

     

    
      	
              12.18

            	
              Review of insurance
      requirements.  The Lender shall be entitled to review the
      requirements of this Clause 12  from time to time in order to
      take account of any changes in circumstances after the date of this
      Agreement which are, in the opinion of the Lender, significant and capable
      of affecting the Borrower or the Ship and its insurance (including,
      without limitation, changes in the availability or the cost of insurance
      coverage or the risks to which the Borrower may be subject.) and may
      appoint insurance consultants in relation to this review at the cost of
      the Borrower.

            

    

     

    
      	
              12.19

            	
              Modification of insurance
      requirements.  The Lender shall notify the Borrower of
      any proposed modification under Clause 12.18 to the requirements of this
      Clause 12 which the Lender considers appropriate in the circumstances, and
      such modification shall take effect on and from the date it is notified in
      writing to the Borrower as an amendment to this Clause 12 and shall bind
      the Borrower accordingly.

            

    

     

    
      	
              12.20

            	
              Compliance with mortgagee's
      instructions.  The Lender shall be entitled (without
      prejudice to or limitation of any other rights which it may have or
      acquire under any Finance Document) to require the Ship to remain at any
      safe port or to proceed to and remain at any safe port designated by the
      Lender until the Borrower implements any amendments to the terms of the
      obligatory insurances and any operational changes required as a result of
      a notice served under Clause 12.19.

            

    

     

    
      	
              13

            	
              SHIP
      COVENANTS

            

    

     

    
      	
              13.1

            	
              General.  The
      Borrower also undertakes with the Lender to comply with the following
      provisions of this Clause 13 at all times during the Security Period
      except as the Lender may otherwise
permit.

            

    

     

    
      	
              13.2

            	
              Ship's name and
      registration.  The Borrower shall keep the Ship
      registered in its name as a Liberian flag ship; shall not 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.

            

    

     

    
      	
              13.3

            	
              Repair and
      classification.  The Borrower shall keep the Ship 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 the Ship's present class (namely, the highest class
      available for vessels of the same type, age and specification as the Ship
      with a classification society which is a member of the International
      Association of Classification Societies acceptable to the Lender) free of
      all overdue recommendations and conditions affecting the Ship's class;
      and

            

    

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)

            	
              so
      as to comply with all laws and regulations applicable to vessels
      registered at ports in Liberia or to vessels trading to any jurisdiction
      to which the Ship may trade from time to time, including but not limited
      to the ISM Code and the ISPS Code.

            

    

     

    
      	
              13.4

            	
              Modification.  The
      Borrower shall not make any modification or repairs to, or replacement of,
      the Ship or equipment installed on the Ship which would or might
      materially alter its structure, type or performance characteristics or
      materially reduce the Ship's value.

            

    

     

    
      	
              13.5

            	
              Removal of
      parts.  The Borrower shall not remove any material part
      of the Ship, or any item of equipment installed on it, 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 Lender and becomes on installation on the Ship the
      property of the Borrower and subject to the security constituted by the
      Mortgage  Provided that the
      Borrower may install equipment owned by a third party if the equipment can
      be removed without any risk of damage to the
  Ship.

            

    

     

    
      	
              13.6

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

            

    

     

    
      	
              13.7

            	
              Inspection.  The
      Borrower shall permit the Lender (by surveyors or other persons appointed
      by it for that purpose at the Borrower's expense) to board the Ship at all
      reasonable times to inspect its condition or to satisfy themselves about
      proposed or executed repairs and shall afford all proper facilities for
      such inspections.

            

    

     

    
      	
              13.8

            	
              Prevention of and release from
      arrest.  The 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, the Earnings or the
      Insurances;

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

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

            

    

     

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

     

    
      	
              13.9

            	
              Compliance with laws
      etc.  The 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, its
      ownership, operation and management or to the business of the
      Borrower;

            

    

     

    
      	
              (b)

            	
              not
      employ the Ship 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 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 Lender has been given and
      the Borrower has (at its expense) effected any special, additional or
      modified insurance cover which the Lender may
  require.

            

    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
              13.10

            	
              Provision of
      information.  The Borrower shall promptly provide the
      Lender with any information which it requests
  regarding:

            

    

     

    
      	
              (a)

            	
              the
      Ship, its employment, position and
engagements;

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              (d)

            	
              any
      towages and salvages;

            

    

     

    
      	
              (e)

            	
              its
      compliance, the Approved Manager's compliance or the compliance of the
      Ship with the ISM Code and the ISPS
Code,

            

    

     

    and,
upon the Lender's request, provide copies of any current charter relating to the
Ship, of any current charter guarantee and of the ISM Code Documentation and the
ISPS Code Documentation in relation to the Ship.

     

    
      	
              13.11

            	
              Notification of certain
      events.  The Borrower shall immediately notify the Lender
      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 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, any exercise or purported exercise of any
      lien on the Ship or its Earnings or any requisition of the Ship for
      hire;

              

      

       

      
        	
                (e)

              	
                any
      intended dry docking of the Ship;

              

      

       

      
        	
                (f)

              	
                any
      Environmental Claim made against the Borrower or in connection with the
      Ship, or any Environmental
Incident;

              

      

       

      
        	
                (g)

              	
                any
      claim for breach of the ISM Code or the ISPS Code being made against the
      Borrower, either of the Approved Managers or otherwise in connection with
      the Ship; 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
      the Borrower shall keep the Lender advised in writing on a regular basis
      and in such detail as the Lender shall require of the Borrower's and the
      Approved Managers' or any other person's response to any of those events
      or matters.

              

      

       

      
        	
                13.12

              	
                Restrictions on chartering,
      appointment of managers etc. The Borrower shall
  not:

              

      

       

      
        	
                (a)

              	
                let
      the Ship on demise charter for any
period;

              

      

       

      
        	
                (b)

              	
                enter
      into any time or consecutive voyage charter in respect of the Ship for a
      term which exceeds, or which by virtue of any optional extensions may
      exceed, 12 months;

              

      

       

      
        	
                (c)

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

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                (e)

              	
                appoint
      a manager of the Ship other than the Approved Manager's or agree to any
      alteration to the terms of each of the Approved Managers' respective
      appointments;

              

      

       

      
      

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	
              (f)

            	
              de-activate
      or lay up that Ship; or

            

    

     

    
      	
              (g)

            	
              put
      the Ship into the possession of any person for the purpose of work being
      done upon the Ship in an amount exceeding or likely to exceed $350,000 (or
      the equivalent in any other currency) unless that person has first given
      to the Lender and in terms satisfactory to it a written undertaking not to
      exercise any lien on the Ship or its Earnings for the cost of such work or
      any other reason.

            

    

     

    
      	
              13.13

            	
              Notice of
      Mortgage.  The Borrower shall keep the Mortgage
      registered against the Ship as a valid first priority mortgage, carry on
      board the Ship a certified copy of the 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 the Ship is mortgaged by the
      Borrower to the Lender.

            

    

     

    
      	
              13.14

            	
              Time Charter
      Assignment.  If the Borrower enters into any Charter
      (subject to (if applicable) obtaining the consent of the Lender in
      accordance with Clause 13.12(b)), the Borrower shall, at the request of
      the Lender, execute in favour of the Lender a Charter Assignment in
      relation to such Charter, and shall deliver to the Lender such other
      documents equivalent to those referred to at paragraphs 3, 4 and 5 of Part
      A of Schedule 2 as the Lender may
require.

            

    

     

    
      	
              14

            	
              SECURITY
      COVER

            

    

     

    
      	
              14.1

            	
              Minimum required security
      cover.  Clause 14.2 applies if the Lender notifies the
      Borrower that:

            

    

     

    
      	
              (a)

            	
              the
      Market Value of the Ship; plus

            

    

     

    
      	
              (b)

            	
              the
      net realisable value of any additional security previously provided under
      this Clause 14,

            

    

     

    is
below the Relevant Percentage (i) of the aggregate of the Loan and (ii) the Swap
Exposure less any monies at any relevant time standing to the credit of the
Retention Account which have been transferred to that account pursuant to Clause
17.2(a).

    

    
      	
              14.2

            	
              Provision of additional
      security cover; prepayment of Loan.  The Borrower
      undertakes with the Lender that, if the Lender notifies the Borrower that
      the aggregate of:

            

    

     

    
      	
              (a)

            	
              the
      Market Value; plus

            

    

     

    
      	
              (b)

            	
              the
      net realisable value of any additional security previously provided under
      this Clause 14,

            

    

     

    is
below the Relevant Percentage of the aggregate of the Loan and the Swap Exposure
less any monies at any relevant time standing to the credit of the Retention
Account which have been transferred to that account pursuant to Clause 17.2(a),
the Borrower will, within 1 month after the date on which the Lender's notice is
served, either:

     

    
      	
               
      

            	
              (i)

            	
              provide,
      or ensure that a third party provides, additional security which, in the
      opinion of the Lender, has a net realisable value at least equal to the
      shortfall and which, if it consists of or includes a Security Interest,
      covers such asset or assets and is documented in such terms as the Lender
      may approve or require; or

            

    

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (ii)

            	
              prepay
      in accordance with Clause 7 such part (at least) of the Loan as will
      eliminate the shortfall.

            

    

     

    In
each of Clause 14.1 and Clause 14.2 Relevant Percentage
means:

     

    
      	
              (a)

            	
              120
      per cent. during the period ending on the date falling on the second
      anniversary of the Drawdown Date;
and

            

    

     

    
      	
              (b)

            	
              130
      per cent. at any other time.

            

    

     

    
      	
              14.3

            	
              Meaning of additional
      security.  In Clause 14.2 "security" means a
      Security Interest over an asset or assets (whether securing the Borrower's
      liabilities under the Finance Documents or a guarantee in respect of those
      liabilities), or a guarantee, letter of credit or other security in
      respect of the Borrower's liabilities under the Finance
      Documents.

            

    

     

    
      	
              14.4

            	
              Requirement for additional
      documents.  The Borrower shall not be deemed to have
      complied with sub-paragraph (i) of Clause 14.2 above until the Lender has
      received in connection with the additional security certified copies of
      documents of the kinds referred to in paragraphs 3, 4 and 5 of Schedule 2,
      Part A below and such legal opinions in terms acceptable to the Lender
      from such lawyers as it may select.

            

    

     

    
      	
              14.5

            	
              Valuation of
      Ship.  The Market Value of the Ship at any date is that
      shown by the valuation prepared:

            

    

     

    
      	
              (a)

            	
              as
      at a date not more than 14 days
previously;

            

    

     

    
      	
              (b)

            	
              by
      one independent sale and purchase shipbroker which the Lender has approved
      or appointed for the purpose;

            

    

     

    
      	
              (c)

            	
              with
      or without physical inspection of the Ship (as the Lender 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 any other contract of employment in respect of the
      Ship; and

            

    

     

    
      	
              (e)

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

            

    

     

    
      	
              14.6

            	
              Valuation of additional
      security.  The net realisable value of any additional
      security which is provided under Clause 14.2 and which consists of a
      Security Interest over a vessel shall be that shown by a valuation
      complying with the requirements of Clause
14.5.

            

    

     

    
      	
              14.7

            	
              Valuations
      binding.  Any valuation under Clause 14.2, 14.5 or 14.6
      shall be binding and conclusive as regards the Borrower, as shall be any
      valuation which the Lender makes of a security which does not consist of
      or include a Security Interest.

            

    

     

    
      	
              14.8

            	
              Provision of
      information.  The Borrower shall promptly provide the
      Lender and any shipbroker or expert acting under Clause 14.5 or 14.6 with
      any information which the Lender or the shipbroker or expert may request
      for the purposes of the valuation; and, if the Borrower fails 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 Lender (or
      the expert appointed by it) consider
prudent.

            

    

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
              14.9

            	
              Payment of valuation
      expenses.  Without prejudice to the generality of the
      Borrower's obligations under Clauses 19.3 and 20.3, the Borrower shall, on
      demand, pay the Lender the amount of the fees and expenses of any
      shipbroker or expert instructed by the Lender under this Clause and all
      legal and other expenses incurred by the Lender in connection with any
      matter arising out of this Clause.

            

    

     

    
      	
              14.10

            	
              Application of
      prepayment.  Clause 7 shall apply in relation to any
      prepayment pursuant to Clause
14.2(b).

            

    

     

    
      	
              15

            	
              PAYMENTS
      AND CALCULATIONS

            

    

     

    
      	
              15.1

            	
              Currency and method of
      payments.  All payments to be made by the Borrower to the
      Lender under a Finance Document shall be made to the
    Lender:

            

    

     

    
      	
              (a)

            	
              by
      not later than 11.00 a.m. (London 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 Lender shall specify as being customary at the
      time for the settlement of international transactions of the type
      contemplated by this Agreement);
and

            

    

     

    
      	
              (c)

            	
              to
      the account of the Lender at JPMorgan Chase Bank New York (Account No
      786419036, Swift Code CHASUS33) or to such other account with such other
      bank as the Lender may from time to time notify to the
      Borrower.

            

    

     

    
      	
              15.2

            	
              Payment on non-Business
      Day.  If any payment by the 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.

     

    
      	
              15.3

            	
              Basis for calculation of
      periodic payments.  All interest 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.

            

    

     

    
      	
              15.4

            	
              Lender
      accounts.  The Lender shall maintain an account showing
      the amounts advanced by the Lender and all other sums owing to the Lender
      from the Borrower and each Security Party under the Finance Documents and
      all payments in respect of those amounts made by the Borrower and any
      Security Party.

            

    

     

    
      	
              15.5

            	
              Accounts prima facie
      evidence.  If the account maintained under Clauses 15.4
      shows an amount to be owing by the Borrower or a Security Party to the
      Lender, that account shall be prima facie evidence that that amount is
      owing to the Lender.

            

    

     

    
      	
              16

            	
              APPLICATION
      OF RECEIPTS

            

    

     

    
      	
              16.1

            	
              Normal order of
      application.  Except as any Finance Document may
      otherwise provide, any sums which are received or recovered by the Lender
      under or by virtue of any Finance Document shall be
    applied:

            

    

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)

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

            

    

     

    
      	
               
      

            	
              (i)

            	
              first,
      in or towards satisfaction pro rata of all amounts then due and payable to
      the   Lender under the Finance Documents and the Master
      Agreement (in respect of any Designated Transactions) other than those
      amounts referred to at (ii) and (iii) below (including, but without
      limitation, all amounts payable by the Borrower under Clauses 19, 20 and
      21 of this Agreement or by the Borrower or any Security Party under any
      corresponding or similar provision in any other Finance Document or in the
      Master Agreement);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              secondly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Lender under the Finance Document and the
      Master Agreement (in respect of any Designated Transactions) (and, for
      this purpose, the expression "interest" shall include any net amount which
      the Borrower shall have become liable to pay or deliver under section 2(e)
      (Obligations) of the Master Agreement (in respect of any Designated
      Transactions) but shall have failed to pay or deliver to the Lender at the
      time of application or distribution under this Clause 16);
    and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              thirdly,
      in or towards satisfaction pro rata of the Loan and the Swap Exposure (in
      the case of the latter, calculated as at the actual Early Termination Date
      applying to each particular Designated Transaction, or if no 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:
      (if at the relevant time an Event of Default or Potential Event of Default
      has occurred) in retention of an amount equal to any amount not then due
      and payable under any Finance Document or the Master Agreement (in respect
      of any Transactions) but which the Lender, by notice to the Borrower and
      the Security 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 foregoing
      provisions of this Clause 16.1; and

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              16.2

            	
              Variation of order of
      application.  The Lender may, by notice to the Borrower
      and the Security Parties, provide for a different manner of application
      from that set out in Clause 16.1 either as regards a specified sum or
      sums or as regards sums in a specified category or
    categories.

            

    

     

    
      	
              16.3

            	
              Notice of variation of order of
      application.  The Lender may give notices under
      Clause 16.2 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.

            

    

     

    
      	
              16.4

            	
              Appropriation rights
      overridden.  This Clause 16 and any notice which the
      Lender gives under Clause 16.2 shall override any right of appropriation
      possessed, and any appropriation made, by the Borrower or any Security
      Party.

            

    

     

    
       

    

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
              17

            	
              APPLICATION
      OF EARNINGS AND SWAP PAYMENTS

            

    

     

    
      	
              17.1

            	
              Payment of
      Earnings.  The Borrower undertakes with the Lender to
      ensure that, throughout the Security
Period:

            

    

     

    
      	
              (a)

            	
              subject
      only to the provisions of this Agreement and the General Assignment, all
      the Earnings of the Ship are paid to the Operating Account and that
      payments made in relation to the Ship are paid from the Operating Account;
      and

            

    

     

    
      	
              (b)

            	
              all
      payments by the Lender to the Borrower under each Designated Transaction
      are paid to the Retention Account.

            

    

     

    
      	
              17.2

            	
              Monthly
      retentions.  The Borrower undertakes with the Lender to
      ensure that, in each calendar month of the Security Period after the
      Drawdown Notice is served, on such dates as the Lender may from time to
      time specify, there is transferred to the Retention Account out of the
      Earnings received in the Operating Account during the preceding calendar
      month:

            

    

     

    
      	
              (a)

            	
              one-sixth
      of the amount of the repayment instalment falling due under Clause 7
      on the next Repayment Date; and

            

    

     

    
      	
              (b)

            	
              the
      relevant fraction of the aggregate amount of interest on the Loan which is
      payable on the next due date for payment of interest under this
      Agreement.

            

    

     

    The
"relevant fraction" is a
fraction of which the numerator is one and the denominator the number of months
comprised in the then current Interest Period (or, if the current Interest
Period ends after the next date for payment of interest under this Agreement,
the number of months from the later of the commencement of the current Interest
Period and the last due date for payment of interest to the next date for
payment of interest under this Agreement).

     

    
      	
              17.3

            	
              Shortfall in
      Earnings.  If the aggregate Earnings received in the
      Operating Account are insufficient in any month for the required amount to
      be transferred to the Retention Account under Clause 17.2, the Borrower
      shall make up the amount of the insufficiency on demand from the Lender;
      but, without thereby prejudicing the Lender's right to make such demand at
      any time, the Lender may permit the Borrower to make up all or part of the
      insufficiency by increasing the amount of any transfer under Clause 17.2
      from the Earnings received in the next or subsequent
    months.

            

    

     

    
      	
              17.4

            	
              Application of
      retentions.  Until an Event of Default or a Potential
      Event of Default occurs, the Lender shall on each Repayment Date and on
      each due date for the payment of interest under this Agreement apply in
      accordance with Clause 15.1 so much of the balance on the Retention
      Account as equals:

            

    

     

    
      	
              (a)

            	
              the
      Repayment Instalment due on that Repayment Date;
  or

            

    

     

    
      	
              (b)

            	
              the
      amount of interest payable on that interest payment
  date,

            

    

     

    in
discharge of the Borrower's liability for that Repayment Instalment or that
interest.

     

    
      	
              17.5

            	
              Interest accrued on the
      Operating Account and the Retention Account.  Any credit
      balance on both the Operating Account and the Retention Account shall bear
      interest at the rate from time to time offered by the Lender to its
      customers for Dollar deposits of similar amounts and for periods similar
      to those for which such balances appear to the Lender likely to remain on
      the Operating Account and the Retention
Account.

            

    

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
              17.6

            	
              Release of accrued
      interest.  Interest accruing under Clause 17.5 shall be
      released to the Borrower on each Repayment Date unless an Event of Default
      or a Potential Event of Default has occurred or the then credit balance on
      the Retention Account is less than what would have been the balance had
      the full amount required by Clause 17.1 (and Clause 17.3, if applicable)
      been transferred in that and each previous
  month.

            

    

     

    
      	
              17.7

            	
              Location of
      accounts.  The Borrower shall
  promptly:

            

    

     

    
      	
              (a)

            	
              comply
      with any requirement of the Lender as to the location or re-location of
      the Operating Account and the Retention Account (or either of them);
      and

            

    

     

    
      	
              (b)

            	
              execute
      any documents which the Lender specifies to create or maintain in favour
      of the Lender a Security Interest over (and/or rights of set-off,
      consolidation or other rights in relation to) the Operating Account and
      the Retention Account.

            

    

     

    
      	
              17.8

            	
              Debits for expenses
      etc.  The Lender shall be entitled (but not obliged) from
      time to time to debit the Operating Account without prior notice in order
      to discharge any amount due and payable to it under Clause 19 or 20 or
      payment of which it has become entitled to demand under Clause 19 or
      20.

            

    

     

    
      	
              17.9

            	
              Borrower's obligations
      unaffected.  The provisions of this Clause 17 (as
      distinct from a distribution effected under Clause 17.4) do not
      affect:

            

    

     

    
      	
              (a)

            	
              the
      liability of the Borrower to make payments of principal and interest on
      the due dates; or

            

    

     

    
      	
              (b)

            	
              any
      other liability or obligation of the Borrower or any Security Party under
      any Finance Document.

            

    

     

    
      	
              18

            	
              EVENTS
      OF DEFAULT

            

    

     

    
      	
              18.1

            	
              Events of
      Default.  An Event of Default occurs
  if:

            

    

     

    
      	
              (a)

            	
              the
      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 8.2, 10.2, 10.3, 10.16, 11.2 or  11.3;
      or

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              (d)

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

            

    

     

    
      	
              (e)

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

            

    

     

    
      	
              (f)

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

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      Financial Indebtedness of a Relevant Person is not paid when due or, if so
      payable, on demand; or

            

    

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (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, or any swap or other
      derivative contract or transaction, 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 Lender, 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, $500,000 or more or the equivalent in another currency;
      or

            

    

     

    
      	
               
      

            	
              (iii)

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

            

    

     

    
      	
               
      

            	
              (iv)

            	
              a
      Relevant Person makes any formal declaration of bankruptcy or any formal
      statement to the effect that it is insolvent or likely to become
      insolvent, or a winding up or administration order is made in relation to
      a Relevant Person, or the members or directors of a Relevant Person pass a
      resolution to the effect that it should be wound up, placed in
      administration or cease to carry on business, save that this paragraph
      does not apply to a fully solvent winding up of a Relevant Person other
      than the Borrower which is, or is to be, effected for the purposes of an
      amalgamation or reconstruction previously approved by the Lender and
      effected not later than 3 months after the commencement of the winding up;
      or

            

    

     

    
      	
               
      

            	
              (v)

            	
              a
      petition is presented in any Pertinent Jurisdiction for the winding up or
      administration, or the appointment of a provisional liquidator, of a
      Relevant Person unless the petition is being contested in good faith and
      on substantial grounds and is dismissed or withdrawn within 30 days of the
      presentation of the petition; or

            

    

     

    
      	
               
      

            	
              (vi)

            	
              a
      Relevant Person petitions a court, or presents any proposal for, any form
      of judicial or non-judicial suspension or deferral of payments,
      reorganisation of its debt (or certain of its debt) or arrangement with
      all or a substantial proportion (by number or value) of its creditors or
      of any class of them or any such suspension or deferral of payments,
      reorganisation or arrangement is effected by court order, contract or
      otherwise; or

            

    

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (vii)

            	
              any
      meeting of the members or directors of a Relevant Person is summoned for
      the purpose of considering a resolution or proposal to authorise or take
      any action of a type described in paragraphs (iii), (iv), (v) or (vi)
      above; or

            

    

     

    
      	
                     
      (viii)

            	
              in
      a Pertinent Jurisdiction other than England, any event occurs or any
      procedure is commenced which, in the opinion of the Lender, is similar to
      any of the foregoing; or

            

    

     

    
      	
              (h)

            	
              the
      Borrower ceases or suspends carrying on its business or a part of its
      business which, in the opinion of the Lender, is material in the context
      of this Agreement; or

            

    

     

    
      	
              (i)

            	
              it
      becomes unlawful in any Pertinent Jurisdiction or
    impossible:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              for
      the Lender to exercise or enforce any right under, or to enforce any
      Security Interest created by, a Finance Document;
  or

            

    

     

    
      	
              (j)

            	
              any
      consent necessary to enable the Borrower to own, operate or charter the
      Ship or to enable the Borrower or any Security Party to comply with any
      provision which the Lender considers material of a Finance 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 Lender that, without its prior consent, a change has
      occurred or probably has occurred after the date of this Agreement in the
      ultimate beneficial ownership of any of the shares in the Borrower or the
      Approved Manager or in the ultimate control of the voting rights attaching
      to any of those shares; or

            

    

     

    
      	
              (l)

            	
              any
      provision which the Lender considers material of a Finance Document proves
      to have been or becomes invalid or unenforceable, or a Security Interest
      created by a Finance Document proves to have been or becomes invalid or
      unenforceable or such a Security Interest 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)

            	
              the
      Ship ceases to be managed by the Approved Manager on the terms of the
      Management Agreement, unless prior to such cessation, the Borrower has
      appointed a substitute manager or managers acceptable to the Lender in all
      respects; or

            

    

     

    
      	
              (o)

            	
              any
      of the following occurs in relation to the Master
    Agreement:

            

    

     

    
      	
               
      

            	
              (i)

            	
              notice
      of an Early Termination Date is given by the Lender under Section 6(a) of
      the Master Agreement; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              an
      Event of Default (as defined in Section 14 of the Master Agreement)
      occurs; or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      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 Lender;
or

            

    

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	
              (p)

            	
              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 the
      Borrower, the Approved Manager or the Corporate Guarantor;
    or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      accident or other event involving the Ship or another vessel owned,
      chartered or operated by a Relevant
Person,

            

    

     

    in
the light of which the Lender  reasonably considers that there is a
significant risk that any of the Borrower, the Approved Manager or the Corporate
Guarantor is, or will later become, unable to discharge its liabilities under
the Finance Documents as they fall due.

     

    
      	
              18.2

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

            

    

     

    
      	
              (a)

            	
              serve
      on the Borrower a notice stating that all obligations of the Lender to the
      Borrower under this Agreement are terminated;
  and/or

            

    

     

    
      	
              (b)

            	
              serve
      on the Borrower 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

            

    

     

    
      	
              (c)

            	
              take
      any other action which, as a result of the Event of Default or any notice
      served under paragraph (i) or (ii) above, the Lender is entitled to take
      under any Finance Document or any applicable
  law.

            

    

     

    
      	
              18.3

            	
              Existing rights
      unaffected.  The Lender shall not be obliged to exercise
      any of its rights under Clause 18.2; and those rights shall be without
      prejudice and in addition to any other right or remedy to which the Lender
      is entitled (whether under the general law or any
    document).

            

    

     

    
      	
              18.4

            	
              Termination of
      Loan.  On the service of a notice under paragraph (a) of
      Clause 18.2 all other obligations of the Lender to the Borrower under
      this Agreement, shall terminate.

            

    

     

    
      	
              18.5

            	
              Acceleration of
      Loan.  On the service of a notice under paragraph (b) of
      Clause 18.2, the Loan, all accrued interest and all other amounts
      accrued or owing from the Borrower 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.

            

    

     

    
      	
              18.6

            	
              Multiple notices; action
      without notice.  The Lender may serve notices under
      paragraphs (a) and (b) of Clause 18.2 simultaneously or on different dates
      and it may take any action referred to in that Clause if no such notice is
      served or simultaneously with or at any time after the service of both or
      either of such notices.

            

    

     

    
      	
              18.7

            	
              Exclusion of Lender
      liability.  Neither the Lender nor any receiver or
      manager appointed by the Lender, shall have any liability to the 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,

            

    

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
              18.8

            	
              Relevant
      Persons.  In this Clause 18 "a Relevant Person" means
      the Borrower and the Corporate
Guarantor.

            

    

     

    
      	
              18.9

            	
              Interpretation.  In
      Clause 18.1(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 18.1(g) "petition" includes an
      application.

            

    

     

    
      	
              19

            	
              FEES
      AND EXPENSES

            

    

     

    
      	
              19.1

            	
              Management
      fee.  The Borrower shall pay to the Lender a
      non-refundable management fee of $75,000 on the earlier of (i) the
      Drawdown Date and (ii) the last day of the Availability
      Period.

            

    

     

    
      	
              19.2

            	
              Costs of negotiation,
      preparation etc.  The Borrower shall pay to the Lender on
      its demand the amount of all expenses incurred by the Lender 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.

            

    

     

    
      	
              19.3

            	
              Costs of variations,
      amendments, enforcement etc.  The Borrower shall pay to
      the Lender, on the Lender's demand, the amount of all expenses incurred by
      the Lender 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 Lender 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 14 or any other
      matter relating to such security;
or

            

    

     

    
      	
              (d)

            	
              any
      step taken by the Lender 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.

     

    
      	
              19.4

            	
              Documentary
      taxes.  The Borrower shall promptly pay any tax payable
      on or by reference to any Finance Document, and shall, on the Lender's
      demand, fully indemnify the Lender against any liabilities and expenses
      resulting from any failure or delay by the Borrower to pay such a
      tax.

            

    

     

    
      	
              19.5

            	
              Certification of
      amounts.  A notice which is signed by two officers of the
      Lender, which states that a specified amount, or aggregate amount, is due
      to the Lender under this Clause 19 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.

            

    

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	
              20

            	
              INDEMNITIES

            

    

     

    
      	
              20.1

            	
              Indemnities regarding borrowing
      and repayment of Loan.  The Borrower shall fully
      indemnify the Lender on its demand in respect of all expenses, liabilities
      and losses which are incurred by the Lender, or which the Lender
      reasonably and with due diligence estimates that it will incur, as a
      result of or in connection with:

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (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 Borrower 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 Borrower
      on the amount concerned under Clause
6);

            

    

     

    
      	
              (d)

            	
              the
      occurrence and/or continuance of an Event of Default or a Potential Event
      of Default and/or the acceleration of repayment of the Loan under Clause
      18;

            

    

     

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

     

    
      	
              20.2

            	
              Breakage
      costs.  Without limiting its generality, Clause 20.1
      covers any liability, expense or loss, incurred by the
    Lender:

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (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) to hedge any
      exposure arising under this Agreement or a number of transactions of which
      this Agreement is one.

            

    

     

    
      	
              20.3

            	
              Miscellaneous
      indemnities.  The Borrower shall fully indemnify the
      Lender on its demand in respect of all claims, demands, proceedings,
      liabilities, taxes, losses and expenses of every kind ("liability items") which
      may be made or brought against, or incurred by, the Lender, in any
      country, in relation to:

            

    

     

    
      	
              (a)

            	
              any
      action taken, or omitted or neglected to be taken, under or in connection
      with any Finance Document by the Lender or by any receiver appointed under
      a Finance Document; and

            

    

     

    
      	
              (b)

            	
              any
      other event, matter or question which occurs or arises at any time during
      the Security Period and which has any connection with, or any bearing on,
      any Finance Document, any payment or other transaction relating to a
      Finance Document or any asset covered (or previously covered) by a
      Security Interest created (or intended to be created) by a Finance
      Document,

            

    

     

    other
than liability items which are shown to have been caused by the gross and
culpable negligence or the wilful misconduct of the Lender's own officers or
employees.

     

    
      	
              20.4

            	
              Environmental
      indemnity.  Without prejudice to its generality, Clause
      20.3 covers any liability items which arise, or are asserted, under or in
      connection with any law relating to safety at sea, the ISM Code or any
      Environmental Law.

            

    

     

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    
      	
              20.5

            	
              Currency
      indemnity.  If any sum due from the Borrower or any
      Security Party to the Lender 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 the 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
Borrower shall indemnify the Lender against the loss arising when the amount of
the payment actually received by the Lender is converted at the available rate
of exchange into the Contractual Currency.

     

    In
this Clause 20.5, the "available rate of exchange"
means the rate at which the Lender 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 20.5 creates a separate liability of the Borrower 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.

     

    
      	
              20.6

            	
              Certification of
      amounts.  A notice which is signed by 2 officers of the
      Lender, which states that a specified amount, or aggregate amount, is due
      to the Lender 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.

            

    

     

    
      	
              20.7

            	
              Application to Master
      Agreement.  For the avoidance of doubt, Clause 20.5 does
      not apply in respect of sums due from the Borrower to the Lender under or
      in connection with the Master Agreement as to which sums the provisions of
      section 8 (Contractual Currency) of that Master Agreement shall
      apply.

            

    

     

    
      	
              21

            	
              NO
      SET-OFF OR TAX DEDUCTION

            

    

     

    
      	
              21.1

            	
              No
      deductions.  All amounts due from the Borrower 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 the Borrower
      is required by law to make.

            

    

     

    
      	
              21.2

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

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

            	
              the
      amount due in respect of the payment shall be increased by the amount
      necessary to ensure that the Lender 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.

            

    

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    
      	
              21.3

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

            

    

     

    
      	
              21.4

            	
              Exclusion of tax on overall net
      income.  In this Clause 21 "tax deduction" means any
      deduction or withholding for or on account of any present or future tax
      except tax on the Lender's overall net
income.

            

    

     

    
      	
              21.5

            	
              Application to Master
      Agreement.  For the avoidance of doubt, Clause 21 does
      not apply in respect of sums due from the Borrowers to the Lender under or
      in connection with the Master Agreement which sums the provisions of
      section 2(d) (Deduction or Withholding for Tax) of that Master Agreement
      shall apply.

            

    

     

    

     

    
      	
              22

            	
              ILLEGALITY,
      ETC

            

    

     

    
      	
              22.1

            	
              Illegality.  This
      Clause 22 applies if the Lender notifies the Borrower 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 Lender to maintain or give effect to any of its obligations under this
Agreement in the manner contemplated by this Agreement.

     

    
      	
              22.2

            	
              Notification and effect of
      illegality.  On the Lender notifying the Borrower under
      Clause 22.1, the Lender's obligation to make the Loan available shall
      terminate; and thereupon or, if later, on the date specified in the
      Lender's notice under Clause 22.1 as the date on which the notified event
      would become effective the Borrower shall prepay the Loan in full in
      accordance with Clause 7.

            

    

     

    
      	
              22.3

            	
              Mitigation.  If
      circumstances arise which would result in a notification under
      Clause 22.1 then, without in any way limiting the rights of the
      Lender under Clause 22.3, the 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 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.

            

    

     

    
      	
              23

            	
              INCREASED
      COSTS

            

    

     

    
      	
              23.1

            	
              Increased
      costs.  This Clause 23 applies if the Lender notifies the
      Borrower that it considers that as a result
of:

            

    

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
              23.2

            	
              Meaning of "increased
      costs".  In this Clause 23, "increased costs"
      means:

            

    

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

            	
              a
      reduction in the amount of any payment to the Lender under this Agreement
      or in the effective return which such a payment represents to the 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
      Loan or (as the case may require) the proportion of that cost attributable
      to the Loan; 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 Lender under this
      Agreement,

            

    

     

    but
not an item attributable to a change in the rate of tax on the overall net
income of the Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 20.1 or by Clause 21 or an item arising directly out
of the implementation or application of or compliance with the "International
Convergence of Capital Measurement and Capital Standards, a Revised Framework"
published by the Basel Committee on Banking Supervision in June 2004, in the
form existing on the date of this Agreement ("Basel II") or any other law or
regulation which implements Basel II (whether such implementation, application
or compliance is by a government, regulator, the Lender or any of its
affiliates).

     

    For
the purposes of this Clause 23.2 the Lender may in good faith allocate or spread
costs and/or losses among its assets and liabilities (or any class thereof) on
such basis as it considers appropriate.

     

    
      	
              23.3

            	
              Payment of increased
      costs.  The Borrower shall pay to the Lender, on its
      demand, the amounts which the Lender from time to time notifies the
      Borrower that it has specified to be necessary to compensate it for the
      increased cost.

            

    

     

    
      	
              23.4

            	
              Notice of
      prepayment.  If the Borrower is not willing to continue
      to compensate the Lender for the increased cost under Clause 23.2,
      the Borrower may give the Lender not less than 14 days' notice of its
      intention to prepay the Loan at the end of an Interest
    Period.

            

    

     

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    
      	
              23.5

            	
              Prepayment  A
      notice under Clause 23.4 shall be irrevocable; and on the date
      specified in the Borrower's notice of intended prepayment, the Loan shall
      terminate and the Borrower shall prepay (without premium or penalty) the
      Loan, together with accrued interest thereon at the applicable rate plus
      the applicable Margin.

            

    

     

    
      	
              23.6

            	
              Application of
      prepayment.  Clause 7 shall apply in relation to the
      prepayment.

            

    

     

    
      	
              24

            	
              SET-OFF

            

    

     

    
      	
              24.1

            	
              Application of credit
      balances.  The Lender 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 the Borrower at any office in any
      country of the Lender in or towards satisfaction of any sum then due from
      the Borrower to the Lender 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 the
      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 Lender considers
appropriate.

            

    

     

    
      	
              24.2

            	
              Existing rights
      unaffected.  The Lender shall not be obliged to exercise
      any of its rights under Clause 24.1; and those rights shall be without
      prejudice and in addition to any right of set-off, combination of
      accounts, charge, lien or other right or remedy to which the Lender is
      entitled (whether under the general law or any
  document).

            

    

     

    
      	
              24.3

            	
              No Security
      Interest.  This Clause 24 give the Lender a contractual
      right of set-off only, and does not create any equitable charge or other
      Security Interest over any credit balance of the
  Borrower.

            

    

     

    
      	
              25

            	
              TRANSFERS
      AND CHANGES IN LENDING OFFICE

            

    

     

    
      	
              25.1

            	
              Transfer by
      Borrower.  The Borrower may not, without the consent of
      the Lender:

            

    

     

    
      	
              (a)

            	
              transfer
      any of its rights or obligations under any Finance Document;
      or

            

    

     

    
      	
              (b)

            	
              enter
      into any merger, de-merger or other reorganisation, or carry out any other
      act, as a result of which any of its rights or liabilities would vest in,
      or pass to, another person.

            

    

     

    
      	
              25.2

            	
              Assignment by
      Lender.  The Lender may assign all or any of the rights
      and interests which it has under or by virtue of the Finance Documents
      without the consent of the
Borrower.

            

    

     

    
      	
              25.3

            	
              Rights of
      assignee.  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, a
      direct or indirect assignee of any of the Lender's rights or interests
      under or by virtue of the Finance Documents shall be entitled to recover
      damages by reference to the loss incurred by that assignee as a result of
      the breach or misrepresentation irrespective of whether the Lender would
      have incurred a loss of that kind or
amount.

            

    

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	
              25.4

            	
              Sub-participation; subrogation
      assignment.  The Lender may sub-participate all or any
      part of its rights and/or obligations under or in connection with the
      Finance Documents without the consent of, or any notice to, the Borrower;
      and the Lender may assign, in any manner and terms agreed by it, all or
      any part of those rights to an insurer or surety who has become subrogated
      to them.

            

    

     

    
      	
              25.5

            	
              Disclosure of
      information.  The Lender may disclose to a potential
      assignee or sub-participant any information which the Lender has received
      in relation to the Borrower, any Security Party or their affairs under or
      in connection with any Finance Document, unless the information is clearly
      of a confidential nature.

            

    

     

    
      	
              25.6

            	
              Change of lending
      office.  The Lender may change its lending office by
      giving notice to the Borrower and the change shall become effective on the
      later of:

            

    

     

    
      	
              (a)

            	
              the
      date on which the Borrower 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

            	
              VARIATIONS
      AND WAIVERS

            

    

     

    
      	
              26.1

            	
              Variations, waivers etc. by
      Lender.  A document shall be effective to vary, waive,
      suspend or limit any provision of a Finance Document, or the Lender'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 Borrower and
      the Lender and, if the document relates to a Finance Document to which a
      Security Party is party, by that Security
Party.

            

    

     

    
      	
              26.2

            	
              Exclusion of other or implied
      variations.  Except for a document which satisfies the
      requirements of Clause 26.1, no document, and no act, course of conduct,
      failure or neglect to act, delay or acquiescence on the part of the Lender
      (or any person acting on its behalf) shall result in the Lender (or any
      person acting on its behalf) 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 the 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.

    

    
      	
              27

            	
              NOTICES

            

    

     

    
      	
              27.1

            	
              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.

            

    

     

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    
      	
              27.2

            	
              Addresses for
      communications.  A notice shall be
  sent:

            

    

     

    
      	
              (a)         to
      the Borrower:

            	
              Eurobulk
      S.A.

            
	 
      	 
      	
              Aethrion
      Center

            
	 
      	 
      	
              40,
      Ag. Konstantinou Street

            
	 
      	 
      	
              Maroussi

            
	 
      	 
      	
              Athens
      151 24

            
	 
      	 
      	
              Greece

            
	 
      	 
      	 
      
	 
      	 
      	
              Fax
      No: +30 210 610 5111

            

    

    

    
      	
              (b)

            	
              to
      the Lender:

            	
              9
      Quai du President Paul Doumer

            
	 
      	 
      	
              92400
      Courbevoie

            
	 
      	 
      	
              La
      Defense, Paris

            
	 
      	 
      	
              France

            
	 
      	 
      	 
      
	 
      	 
      	
              Fax
      No: +331 4189 2987

            
	 
      	 
      	
              Attn:
      Shipping Department

            

    

    

    or
to such other address as the relevant party may notify the other.

     

    
      	
              27.3

            	
              Effective date of
      notices.  Subject to Clauses 27.4 and
    27.5:

            

    

     

    
      	
              (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.

            

    

     

    
      	
              27.4

            	
              Service outside business
      hours.  However, if under Clause 27.3 a notice would be
      deemed to be served:

            

    

     

    
      	
              (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 27.5) be deemed to be served, and shall take
effect, at 9 a.m. on the next day which is such a business day.

     

    
      	
              27.5

            	
              Illegible
      notices.  Clauses 27.3 and 27.4 do not apply if the
      recipient of a notice notifies the sender within one 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.

            

    

     

    
      	
              27.6

            	
              English
      language.  Any notice under or in connection with a
      Finance Document shall be in
English.

            

    

     

    
      	
              27.7

            	
              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.

            

    

     

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    
      	
              27.8

            	
              Meaning of
      "notice".  In this Clause "notice" includes any
      demand, consent, authorisation, approval, instruction, waiver or other
      communication.

            

    

     

    
      	
              28

            	
              SUPPLEMENTAL

            

    

     

    
      	
              28.1

            	
              Rights cumulative,
      non-exclusive.  The rights and remedies which the Finance
      Documents give to the Lender 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.

            

    

     

    
      	
              28.2

            	
              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.

            

    

     

    
      	
              28.3

            	
              Counterparts.  A
      Finance Document may be executed in any number of
      counterparts.

            

    

     

    
      	
              28.4

            	
              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.

            

    

     

    
      	
              29

            	
              LAW
      AND JURISDICTION

            

    

     

    
      	
              29.1

            	
              English
      law.  This Agreement and any non-contractual obligations
      arising out of or in connection with it shall be governed by, and
      construed in accordance with, English
law.

            

    

     

    
      	
              29.2

            	
              Exclusive English
      jurisdiction.  Subject to Clause 29.3, the courts of
      England shall have exclusive jurisdiction to settle any
      Dispute.

            

    

     

    
      	
              29.3

            	
              Choice of forum for the
      exclusive benefit of the Lender.  Clause 29.2 is for the
      exclusive benefit of the Lender, which reserves the
  rights:

            

    

     

    
      	
              (a)

            	
              to
      commence proceedings in relation to any Dispute in the courts of any
      country other than England and which have or claim jurisdiction to
      Dispute; 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.

            

    

     

    The
Borrower shall not commence any proceedings in any country other than England in
relation to a Dispute.

     

    
      	
              29.4

            	
              Process
      agent.  The Borrower irrevocably appoints Hill Dickinson
      Services Limited at their office for the time being, presently at Irongate
      House, Duke's Place, London EC3A 7LP, England, 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.

            

    

     

    
      	
              29.5

            	
              Lender's rights
      unaffected.  Nothing in this Clause 29 shall exclude or
      limit any right which the Lender 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.

            

    

     

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    
      	
              29.6

            	
              Meaning of
      "proceedings".  In this Clause 29, "proceedings" means
      proceedings of any kind, including an application for a provisional or
      protective measure and a "Dispute" means any
      dispute arising out of or in connection with this Agreement (including a
      dispute relating to the existence, validity or termination of this
      Agreement) or any non-contractual obligations arising out of or in
      connection with this Agreement.

            

    

     

    AS WITNESS the hands of the
duly authorised officers or attorneys of the parties the day and year first
before written.

    

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    SCHEDULE
1

    

    DRAWDOWN
NOTICE

    

    

    

    To:       Calyon

    9 Quai du President Paul
Doumer

    92400 Courbevoie

    La Defense

    Paris

    France

    

    Attention:
Shipping
Department                                                                                                                              
        April 2009

    

    DRAWDOWN
NOTICE

    

    
      	
              1

            	
              We
      refer to the loan agreement (the "Loan Agreement")
      dated           April
      2009 and made between us, as Borrower, and you, as Lender, in connection
      with a facility of up to US$10,000,000.  Terms defined in the
      Loan Agreement have their defined meanings when used in this Drawdown
      Notice.

            

    

     

    
      	
              2

            	
              We
      request to borrow as follows:

            

    

     

    
      	
              (a)

            	
              Amount:
      US$10,000,000;

            

    

     

    
      	
              (b)

            	
              Drawdown
      Date:  30 April 2009;

            

    

     

    
      	
              (c)

            	
              Duration
      of the first Interest Period shall be
      [        ]
  months;

            

    

     

    
      	
              (d)

            	
              Payment
      instructions : account in our name and numbered
      [                ]
      with
      [            ]
      of
      [                       ].

            

    

     

    
      	
              3

            	
              We
      represent and warrant that:

            

    

     

    
      	
              (a)

            	
              the
      representations and warranties in Clause 9 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;

            

    

     

    
      	
              (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
      Lender.

            

    

     

    

    

    .....................................

    

    Director

    for
and on behalf of

    ELENI
SHIPPING LIMITED

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    SCHEDULE
2

    

    CONDITION
PRECEDENT DOCUMENTS

    

    Part
A

    

    The
following are the documents referred to in Clause 8.1(a).

    

    
      	
              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.

            

    

     

    
      	
              2

            	
              Copies
      of the certificate of incorporation and constitutional documents of each
      of the Borrower and the Corporate
Guarantor.

            

    

     

    
      	
              3

            	
              Copies
      of resolutions of the shareholders and directors of the Borrower and the
      Corporate Guarantor authorising the execution of each of the Finance
      Documents to which the Borrower or the Corporate Guarantor is a party and,
      in the case of the Borrower, authorising named officers or
      attorneys-in-fact to give the Drawdown Notice and other notices under this
      Agreement.

            

    

     

    
      	
              4

            	
              The
      original of any power of attorney under which any Finance Document is
      executed on behalf of the Borrower or the Corporate
    Guarantor.

            

    

     

    
      	
              5

            	
              Copies
      of all consents which the Borrower or any Security Party requires to enter
      into, or make any payment under, any Finance
  Document.

            

    

     

    
      	
              6

            	
              The
      originals of any mandates or other documents required in connection with
      the opening or operation of the Operating Account and the Retention
      Account.

            

    

     

    
      	
              7

            	
              A
      valuation of the Ship, addressed to the Lender, stated to be for the
      purposes of this Agreement and dated not earlier than 30 days before the
      Drawdown Date, from an independent sale and purchase shipbroker selected
      by the Lender.

            

    

     

    
      	
              8

            	
              Documentary
      evidence that the agent for service of process named in Clause 29 has
      accepted its appointment.

            

    

     

    
      	
              9

            	
              Favourable
      legal opinions from lawyers appointed by the Lender on such matters
      concerning the laws of Liberia and such other relevant jurisdictions as
      the Lender may require.

            

    

     

    
      	
              10

            	
              If
      the Lender so requires, in respect of any of the documents referred to
      above, a certified English translation prepared by a translator approved
      by the Lender.

            

    

     

    

    PART
B

    

    The
following are the documents referred to in Clause 8.1(b).

    

    
      	
              1

            	
              A
      duly executed original of the Mortgage, the General Assignment and the
      Charter Assignment in respect of the Charter (and of each document
      required to be delivered under each such Finance
  Document).

            

    

     

    
      	
              2

            	
              Documentary
      evidence that:

            

    

     

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

     

    
      	
              (a)

            	
              the
      Ship is definitively and permanently registered in the name
      of  the Borrower under Liberian
flag;

            

    

     

    
      	
              (b)

            	
              the
      Ship is in the absolute and unencumbered ownership of the Borrower save as
      contemplated by the Finance
Documents;

            

    

     

    
      	
              (c)

            	
              the
      Ship maintains the highest classification available for vessels of the
      same age, type and specification as the Ship free of all recommendations
      and conditions of such classification society affecting
    class;

            

    

     

    
      	
              (d)

            	
              the
      Mortgage has been duly registered against the Ship as a valid first
      preferred Liberian ship mortgage in accordance with the laws of the
      Republic of Liberia; and

            

    

     

    
      	
              (e)

            	
              the
      Ship is insured in accordance with the provisions of this Agreement and
      all requirements therein in respect of insurances have been complied
      with.

            

    

     

    
      	
              3

            	
              Documents
      establishing that the Ship will, as from the Drawdown Date, be managed by
      the Approved Manager on terms acceptable to the Lender, together
      with:

            

    

     

    
      	
              (a)

            	
              the
      Manager's Undertaking;

            

    

     

    
      	
              (b)

            	
              a
      copy of the Management Agreement;

            

    

     

    
      	
              (c)

            	
              copies
      of the Approved Manager's Document of Compliance and the Safety Management
      Certificate for the Ship; and

            

    

     

    
      	
              (d)

            	
              copies
      of the ISPS Code Documentation in respect of the
  Ship.

            

    

     

    
      	
              4

            	
              A
      favourable opinion from an independent insurance consultant acceptable to
      the Lender on such matters relating to the insurances for the Ship as the
      Lender may require.

            

    

     

    Each
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 the
Borrower and the Approved Managers where relevant.

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    SCHEDULE
3

    

    DESIGNATION
NOTICE

    

    Calyon

    9,
quai du Président Paul Doumer

    92400
Courbevoie

    La
Defense

    Paris

    France

    

    

    

     [date]

    

    Dear
Sirs

    

    Loan
Agreement dated 30 April 2009 (the "Loan Agreement") made between (i) ourselves
as Borrower and (ii) yourselves as Lender.

    

    We
refer to:

    

    
      	
              1.

            	
              the
      Loan Agreement;

            

    

    

    
      	
              2.

            	
              the
      Master Agreement made between ourselves and yourselves;
  and

            

    

    

    
      	
              3.

            	
              a
      Confirmation delivered pursuant to the said Master Agreement dated 30
      April 2009 and addressed by yourselves 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
Facility Agreement and the Finance Documents.

    

    Yours
faithfully,

    

    

    

    

    

    .................................................

    

    for
and on behalf of

    ELENI
SHIPPING LIMITED

    

    

    

    

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    

    EXECUTION
PAGE

    

    

    THE
BORROWER

    

    

    
      
        
          	
                  SIGNED
      by Stephania Karmiri

                	
                  )
      /s/ Stefania
      Karmiri

                
	 
      	
                  )

                
	
                  for
      and on behalf of

                	
                  )

                
	
                  ELENI
      SHIPPING LIMITED

                	
                  )

                
	
                  in
      the presence of:

                	
                  )
      /s/ Vassiliki
      Georgopoulos

                

        

      

    

    

    

    

    

    

    

    

    THE
LENDER

    

    

    
      
        
          	
                  SIGNED
      by Maria Chryssoula Kappida

                	
                  )
      /s/ Maria
      Chryssoula Kappida

                
	 
      	
                  )

                
	
                  attorney-in-fact

                	
                  )

                
	
                  for
      and on behalf of

                	
                  )

                
	
                  CALYON

                	
                  )

                
	
                  in
      the presence of:

                	
                  )
      /s/ Vassiliki
      Georgopoulos

                

        

      

    

    

    

    

    
      
         

      

      
        53exv10w1

Exhibit 10.1

IDM PHARMA, INC.

2009 TRANSACTION BONUS PLAN, AS AMENDED

The Board of Directors (the “Board”) of IDM Pharma, Inc., a Delaware corporation (the
“Company”), adopted resolutions at a meeting held on December 18, 2008, approving payment of a
cash bonus to certain non-executive employees and executive officers as summarized below (as
amended, the “Plan”). The Plan was amended by the Board at a meeting held on May 17, 2009 and
the following is a summary of the Plan, as amended.

1. Purpose of the Plan. The Company considers it essential to the operation of the
Company that certain of its employees be encouraged to remain employed by the Company while the
Company attempts to effect a sale of the Company or substantially all of its assets. The Plan
is meant to supplement and work in conjunction with (and, except as provided herein, not to
replace) the Company’s other incentive programs, such as its option plans, severance
arrangements and other benefits plans, in order to achieve the foregoing purposes.

2. Terms of the Plan. 

	 	A.	 	Upon the closing of a Change of Control of the Company (as defined below) on or
prior to August 31, 2009, a lump sum cash bonus payment less standard deductions and
withholding, will be payable to such specified employee, including certain executive
officers, as noted in the column in the table below labeled “Transaction Bonus,” who
are employees of the Company immediately prior to the closing of such Change of
Control. This cash payment would be in addition to any payment to which the specified
employee may be entitled under his employment agreement or any other retention plan of
the Company in connection with a similar event.
	 
	 	B.	 	The term “Change of Control” under this Plan shall mean the first occurrence of any
of the following: (i) a merger or consolidation of the Company (A) after which the
Company’s stockholders immediately prior to the merger or consolidation do not have
beneficial ownership of at least 50% of the outstanding voting securities of the new or
continuing entity or its parent entity or (B) following a tender offer in which a
majority of the outstanding voting securities of the Company were sold, exchanged or
otherwise disposed of by the Company’s stockholders in a single or series of related
transactions; (ii) a transaction to which the Company is a party and in which a
majority of the outstanding shares of the Company’s capital stock are sold, exchanged
or otherwise disposed of, after which the Company’s stockholders immediately prior to
such transaction do not have beneficial ownership of at least 50% of the outstanding
voting securities of the Company or of the entity for which shares of the Company’s
capital stock were exchanged; or (iii) a transaction or series of related transactions
in which the Company sells, licenses or otherwise transfers for value all or
substantially all of its assets, in order to effect a sale of the Company’s business as
a going concern, to a single purchaser or group of associated purchasers. As defined
herein, the term Change of Control shall not include any transaction effected
exclusively for the purpose of changing the domicile of the Company.

1.

 

	 	C.	 	Employee Bonuses

	 	 	 	 	 
	Executive Officers	 	Transaction Bonus
	Name	 	Dollars
	Timothy P. Walbert
	 	$	300,000	 
	President and Chief Executive Officer
	 	 	 	 
	Robert J. De Vaere
	 	$	225,000	 
	Senior Vice President, Finance & Administration and
Chief Financial Officer
	 	 	 	 
	Jeffrey W. Sherman
	 	$	100,000	 
	Senior Vice President, Research & Development and Chief
Medical Officer
	 	 	 	 
	Timothy C. Melkus
	 	$	75,000	 
	Senior Vice President, Business Development and
Operations
	 	 	 	 
	Non-Executive Officer Employee
	 	$	35,000	 
	Total:
	 	$	735,000	 

2.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]