Document:

EXHIBIT
      10.27

     

       

     

    DATED
      January 11, 2008

     

    EFRAGEL
      SHIPPING CORPORATION

    (as
      Borrower)

     

    -
      and -

     

    DnB
      NOR BANK ASA

    (as
      Lender)

     

    
      

    

    US$42,000,000
      SECURED

    MULTI-CURRENCY
      REDUCING REVOLVING

    CREDIT
      FACILITY AGREEMENT

    
      

    

     

    STEPHENSON
      HARWOOD

    One
      St. Paul’s Churchyard

    London
      EC4M SSH

    Tel:
      020 7329 4422

    Fax:
      020 7329 7100

    Ref:
      04.126

     

    
      
         

      

         

        
          

        

      

      
         

      

    
     

    CONTENTS

     

    
      	 	 	
              Page

            
	
              1

            	
              Definitions
                and Interpretation

            	
              1

            
	 	 	 
	
              2

            	
              The
                Loan and its Purpose

            	
              11

            
	 	 	 
	
              3

            	
              Conditions
                of Utilisation

            	
              11

            
	 	 	 
	
              4

            	
              Advance

            	
              13

            
	 	 	 
	
              5

            	
              Currency

            	
              14

            
	 	 	 
	
              6

            	
              Repayment

            	
              14

            
	 	 	 
	
              7

            	
              Prepayment

            	
              15

            
	 	 	 
	
              8

            	
              Interest

            	
              16

            
	 	 	 
	
              9

            	
              Indemnities

            	
              19

            
	 	 	 
	
              10

            	
              Fees

            	
              23

            
	 	 	 
	
              11

            	
              Security
                and Application of Moneys

            	
              23

            
	 	 	 
	
              12

            	
              Representations

            	
              28

            
	 	 	 
	
              13

            	
              Undertakings
                and Covenants

            	
              31

            
	 	 	 
	
              14

            	
              Events
                of Default

            	
              38

            
	 	 	 
	
              15

            	
              Assignment
                and Sub-Participation

            	
              43

            
	 	 	 
	
              16

            	
              Set-Off

            	
              43

            
	 	 	 
	
              17

            	
              Payments

            	
              44

            
	 	 	 
	
              18

            	
              Notices

            	
              45

            
	 	 	 
	
              19

            	
              Partial
                Invalidity

            	
              47

            
	 	 	 
	
              20

            	
              Remedies
                and Waivers

            	
              47

            
	 	 	 
	
              21

            	
              Miscellaneous

            	
              47

            
	 	 	 
	
              22

            	
              Law
                and Jurisdiction

            	
              48

            
	 	 	 
	SCHEDULE
              1: Conditions Precedent and Subsequent	
              50

            
	 	
              Part
                1: Conditions precedent

            	
              50

            
	 	
              Part
                II: Conditions subsequent

            	
              54

            
	 	 	 
	SCHEDULE
              2: Calculation of Mandatory Cost	
              55

            
	 	 	 
	SCHEDULE
              3: Form of Drawdown Notice	
              58

            

    

     

    
      
         

      

         

        
          

        

      

      
         

      

    
     

    LOAN
      AGREEMENT

     

    Dated:
      January 11, 2008

    

    BETWEEN:

    

    
      	
              (1)

            	
              EFRAGEL
                SHIPPING CORPORATION,
                a
                company incorporated under the laws of the Republic of Liberia whose
                registered office is at 80 Broad Street, Monrovia, Liberia (the
                “Borrower”);
                and

            

    

     

    
      	
              (2)

            	
              DnB
                NOR BANK ASA,
                acting through its office at 20 St. Dunstan’s Hill, London EC3R 8HY,
                England (the “Lender”).

            

    

     

    WHEREAS:

     

    
      	
              (A)

            	
              The
                Borrower is the registered owner of the Vessel which is registered
                under
                the flag of Cyprus.

            

    

     

    
      	
              (B)

            	
              The
                Lender has agreed to advance to the Borrower a secured multi-currency
                reducing revolving credit facility of up to forty two million Dollars
                ($42,000,000) to assist the Borrower in re-financing its Existing
                Indebtedness and for its general working capital
                purposes.

            

    

     

    IT
      IS AGREED
      as
      follows:

     

    
      	
              1

            	
              Definitions
                and Interpretation

            

    

     

    
      	 	
              1.1

            	
              In
                this Agreement:

            

    

     

    “Accounts”
means
      the Operating Account and the Cash Collateral Account. 

     

    “Account
      Charge”
means
      the deed of charge referred to in Clause 11.1.3.

     

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

     

    “Annex
      VI”
means
      Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the
      International Convention for the Prevention of Pollution from Ships 1973 (as
      modified in 1978 and 1997).

     

    “Assignment”
means
      the deed of assignment referred to in Clause 11.1.2.

     

    
      
         

      

        1

        
          

        

      

      
         

      

    
     

    “Availability
      Termination Date”
means
      three (3) months prior to the Final Maturity Date or such later date as the
      Lender may in its discretion agree.

     

    “Break
      Costs”
means
      all sums payable by the Borrower from time to time under Clause
      9.3.

     

    “Broker”
means
      any one of Arrow Chartering (UK), Braemer Seascope Group, Clarksons PLC and
      Fearnleys and “Brokers”
means
      more than one of them.

     

    “Business
      Day”
means
      a
      day (other than a Saturday or Sunday) on which banks are open for general
      business in New York and London and Tokyo (only if an amount in Japanese Yen
      is
      involved) and Zurich (only if an amount in Swiss Francs is involved) and any
      other financial centre which the Lender may consider appropriate for the
      operation of the provisions of this Agreement, and in the case of Euro, a day
      on
      which the Trans-European Automated Real Time Gross Settlement Express Transfer
      Payment System (TARGET) is operating.

     

    “Cash
      Collateral Account”
means
      the bank account to be opened (if and when required) in the name of the Borrower
      with the Lender and designated “Efragel Shipping Corporation-Cash Collateral
      Account”.

     

    “Converted”
means
      actually or notionally (as the case may require) converted by the Lender at
      the
      rate at which the Lender, in accordance with its usual practice, is able in
      the
      London Interbank market to purchase the Permitted Currency in which any part
      of
      the Loan is to be denominated with the Permitted Currency in which the Loan
      is
      then denominated, on the second Business Day before the value date for that
      conversion pursuant to Clause 5, and the words “Convert”
and
      “Conversion”
shall
      be interpreted accordingly.

     

    “Credit
      Support Document”
means
      any document described as such in the Master Agreement and, where the context
      permits, any other document referred to in any Credit Support Document which
      has
      the effect of creating an Encumbrance in favour of the Lender.

     

    “Credit
      Support Provider”
means
      any person (other than the Borrower) described as such in the Master
      Agreement.

    
       

      
        
           

        

          2

          
            

          

        

        
           

        

      

    
     

    “Currency
      of Account”
means,
      in relation to any payment to be made to the Lender under a Finance Document,
      the currency in which that payment is required to be made by the terms of that
      Finance Document.

     

    “Deed
      of Covenants”
means
      the deed of covenants referred to in Clause 11.1.1.

     

    “Default”
means
      an Event of Default or any event or circumstance specified in Clause 14.1 which
      would (with the expiry of a grace period, the giving of notice, the making
      of
      any determination under the Finance Documents or any combination of any of
      the
      foregoing) be an Event of Default.

     

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

     

    “Dollars”
and
      “$”
each
      means available and freely transferable and convertible funds in lawful currency
      of the United States of America.

     

    “Drawdown
      Date”
means
      the date on which a Drawing is advanced under Clause 4.

     

    “Drawdown
      Notice”
means
      a
      notice substantially in the form set out in Schedule 3.

     

    “Drawing”
means
      any one amount advanced or to be advanced pursuant to a Drawdown Notice or,
      where the context permits, the amount advanced and for the time being
      outstanding and “Drawings”
means
      more than one of them.

     

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

    
       

      
        
           

        

          3

          
            

          

        

        
           

        

      

    
     

    “Encumbrance”
means
      a
      mortgage, charge, assignment, pledge, lien, or other security interest securing
      any obligation of any person or any other agreement or arrangement having a
      similar effect.

     

    “Euro”
and
      “€“
means
      the single currency of the Participating Member States.

     

    “Event
      of Default”
means
      any of the events or circumstances set out in Clause 14.1.

     

    “Existing
      Agreement”
means
      the loan agreement dated 11 November 2004 as amended and supplemented by a
      first
      supplemental agreement 2 February 2006 each made between the Borrower and the
      Lender pursuant to which the Bank has agreed, inter alia, to make available
      to
      the Borrower the Loan (as such term is defined in the Existing Agreement) upon
      the terms and conditions therein contained.

     

    “Existing
      Indebtedness”
means
      the Indebtedness (as such term is defined in the Existing Agreement) secured
      over the Vessel.

     

    “Facility
      Period”
means
      the period beginning on the date of this Agreement and ending on the date when
      the whole of the Indebtedness has been paid in full and the Security Parties
      have ceased to be under any further actual or contingent liability to the Lender
      under or in connection with the Finance Documents.

     

    “Final
      Maturity Date”
means
      the date falling ten (10) years from the date of this Agreement.

     

    “Finance
      Documents”
means
      this Agreement, the Master Agreement, the Security Documents and any other
      document designated as such by the Lender and the Borrower and “Finance
      Document”
means
      any one of them.

     

    “Financial
      Indebtedness”
means
      any obligation for the payment or repayment of money, whether present or future,
      actual or contingent, in respect of:

     

    
      	 	
              (a)

            	
              moneys
                borrowed;

            

    

     

    
      	 	
              (b)

            	
              any
                acceptance credit;

            

    

    
       

      
        
           

        

          4

          
            

          

        

        
           

        

      

    
     

    
      	 	
              (c)

            	
              any
                bond, note, debenture, loan stock or similar
                instrument;

            

    

     

    
      	 	
              (d)

            	
              any
                finance or capital lease;

            

    

     

    
      	 	
              (e)

            	
              receivables
                sold or discounted (other than on a non-recourse basis);
                

            

    

     

    
      	 	
              (f)

            	
              deferred
                payments for assets or services;

            

    

     

    
      	 	
              (g)

            	
              any
                derivative transaction protecting against or benefiting from fluctuations
                in any rate or price (and, when calculating the value of any derivative
                transaction, only the marked to market value shall be taken into
                account);

            

    

     

    
      	 	
              (h)

            	
              any
                amount raised under any other transaction (including any forward
                sale or
                purchase agreement) having the commercial effect of a
                borrowing;

            

    

     

    
      	 	
              (i)

            	
              any
                counter-indemnity obligation in respect of a guarantee, indemnity,
                bond,
                standby or documentary letter of credit or any other instrument issued
                by
                a bank or financial institution;
                and

            

    

     

    
      	 	
              (j)

            	
              the
                amount of any liability in respect of any guarantee or indemnity
                for any
                of the items referred to in paragraphs (a) to (i)
                above.

            

    

     

    “IAPPC”
means
      a
      valid international air pollution prevention certificate for the Vessel issued
      under Annex VI.

     

    “Indebtedness”
means
      the aggregate from time to time of: the amount of the Loan outstanding; all
      accrued and unpaid interest on the Loan; and all other sums of any nature
      (together with all accrued and unpaid interest on any of those sums) payable
      to
      the Lender under all or any of the Finance Documents.

     

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

    
       

      
        
           

        

          5

          
            

          

        

        
           

        

      

    
     

    “Interest
      Payment Date”
means
      each date for the payment of interest in accordance with Clause
      8.7.

     

    “Interest
      Period”
means
      each period for the determination and payment of interest selected by the
      Borrower or agreed or selected by the Lender pursuant to Clause 8.

     

    “ISM
      Code”
means
      the International Management Code for the Safe Operation of Ships and for
      Pollution Prevention.

     

    “ISM
      Company”
means,
      at any given time, the company responsible for the Vessel’s compliance with the
      ISM Code under paragraph 1.1.2 of the ISM Code.

     

    “ISPS”
      Code”
means
      the International Ship and Port Facility Security Code.

     

    “ISPS
      Company”
means,
      at any given time, the company responsible for the Vessel’s compliance with the
      ISPS Code.

     

    “ISSC”
means
      a
      valid international ship security certificate for the Vessel issued under the
      ISPS Code.

     

    “LIBOR”
      means:

     

    
      	 	
              (a)

            	
              the
                applicable Screen Rate; or

            

    

     

    
      	 	
              (b)

            	
              (if
                no Screen Rate is available for any Interest Period) the arithmetic
                mean
                of the rates (rounded upwards to four decimal places) quoted to the
                Lender
                in the London interbank market,

            

    

     

    at
      11.00
      a.m. two (2) Business Days before the first day of the relevant Interest Period
      for the offering of deposits in Dollars or its equivalent in a Permitted
      Currency in an amount comparable to the Loan (or any relevant part of the Loan)
      and for a period comparable to the relevant Interest Period.

     

    “Loan”
means
      the aggregate amount advanced or to be advanced by the Lender to the Borrower
      under Clause 4 or, where the context permits, the amount advanced and for the
      time being outstanding.

    
       

      
        
           

        

          6

          
            

          

        

        
           

        

      

    
     

    “Management Agreement”
      means the agreement(s) for the commercial and/or technical management of the
      Vessel between the Borrower and the Managers.

     

    “Managers”
means
      Safety Management Overseas S.A., or such other commercial and/or technical
      managers of the Vessel nominated by the Borrower as the Lender may
      approve.

     

    “Mandatory
      Cost”
means
      the percentage rate per annum calculated by the Lender in accordance with
      Schedule 2.

     

    “Margin”
means
      zero point six five per cent (0.65%) per annum.

     

    “Master
      Agreement”
means
      any ISDA Master Agreement (or any other form of master agreement relating to
      interest or currency exchange transactions) entered into between the Lender
      and
      the Borrower during the Facility Period, including each Schedule to any Master
      Agreement and each Confirmation exchanged pursuant to any Master
      Agreement.

     

    “Maximum
      Amount”
means
      forty two million Dollars ($42,000,000) reduced from time to time in accordance
      with Clause 3.4 and/or Clause 7.4 and/or Clause 8.9.5.

     

    “Mortgage”
means
      the first priority statutory mortgage referred to in Clause 11.1.1 together
      with the Deed of Covenants.

     

    “Mortgagee’s
      Insurances”
means
      all policies and contracts of mortgagee’s interest insurance, mortgagee’s
      additional perils (oil pollution) insurance and any other insurance from time
      to
      time taken out by the Lender in relation to the Vessel.

     

    “Operating
      Account”
means
      the bank account opened in the name of the Managers with the Lender and
      designated “Safety Management Overseas S.A. Operating Account” with account
      number 60204001.

     

    “Participating
      Member States”
means
      any member state of the European Community that adopts or has adopted the Euro
      as its lawful currency in 

    
       

      
        
           

        

          7

          
            

          

        

        
           

        

      

    
     

    accordance
      with legislation of the European Community relating to Economic and Monetary
      Union.

     

    “Permitted
      Currency”
means
      Japanese Yen, Swiss Francs and Euro.

     

    “Reduction
      Date”
means
      each date falling at consecutive six monthly intervals after the first Drawdown
      Date.

     

    “Relevant
      Documents”
means
      the Finance Documents, the Management Agreement and the Managers’ confirmation
      specified in Part I of Schedule 1.

     

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

     

    “Screen
      Rate”
means
      in relation to LIBOR, the British Bankers’ Association Interest Settlement Rate
      for the relevant currency and period displayed on the appropriate page of the
      Reuters screen. If the agreed page is replaced or the service ceases to be
      available, the Lender may specify another page or service displaying the
      appropriate rate after consultation with the Borrower.

     

    “Security
      Documents”
means
      the Mortgage, the Deed of Covenants, the Assignment, the Account Charge, any
      other Credit Support Documents or (where the context permits) any one or more
      of
      them and any other agreement or document which may at any time be executed
      by
      any person as security for the payment of all or any part of the Indebtedness
      and “Security Document” means any one of them.

     

    “Security
      Parties”
means
      the Borrower, any other Credit Support Provider and any other person who may
      at
      any time during the Facility Period be liable for, or provide security for,
      all
      or any part of the Indebtedness, and “Security Party” means any one of
      them.

     

    “SMC”
means
      a
      valid safety management certificate issued for the Vessel by or on behalf of
      the
      Administration under paragraph 13.7 of the ISM Code.

    
       

      
        
           

        

          8

          
            

          

        

        
           

        

      

    
     

    “SMS”
means
      a
      safety management system for the Vessel developed and implemented in accordance
      with the ISM Code.

     

    “Swiss
      Francs”
and
      “SFr”
means
      available and freely transferable and convertible funds in non-resident currency
      of Switzerland.

     

    “Tax”
means
      any tax, levy, impost, duty or other charge or withholding of a similar nature
      (including any penalty or interest payable in connection with any failure to
      pay
      or any delay in paying any of the same).

     

    “Total
      Loss”
      means:

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

            	
              the
                capture, seizure, arrest, detention or confiscation of the Vessel
                by any
                government or by persons acting or purporting to act on behalf of
                any
                government, unless the Vessel is released and returned to the possession
                of the Borrower within one month after the capture, seizure, arrest,
                detention or confiscation in
                question.

            

    

     

    “Transaction”
means
      a
      transaction entered into between the Lender and the Borrower governed by the
      Master Agreement.

     

    “Vessel”
means
      the approximately 76, 015 dwt panamax dry bulk carrier vessel “EFROSSINI” with
      IMO number 9252412 which was built in 2003 by Tsuneishi Shipbuilding Company
      Ltd. in Japan and which is registered in the ownership of the Borrower under
      the
      laws and flag of the Republic of Cyprus together with everything now or in
      the
      future belonging to her on board and ashore.

     

    “Japanese
      Yen”
and
      “Y”
means
      available and freely transferable and convertible funds in non-resident currency
      of Japan.

    
       

      
        
           

        

          9

          
            

          

        

        
           

        

      

    
     

    
      	 	
              1.2

            	
              In
                this Agreement:

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      	
            	1.2.8	
              references
                to the Lender include its successors, transferees and
                assignees;

            

    

     

    
      	
            	1.2.9	
              a
                time of day (unless otherwise specified) is a reference to London
                time;
                and

            

    

     

    
      	
            	1.2.10	
              words
                and expressions defined in the Master Agreement, unless the context
                otherwise requires, have the same
                meaning.

            

    

    
       

      
        
           

        

          10

          
            

          

        

        
           

        

      

    
     

    
      	 	
              1.3

            	
              Offer
                letter

            

    

     

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

     

    
      	
              2

            	
              The
                Loan and its Purpose

            

    

     

    
      	 	
              2.1

            	
              Amount
                Subject to the terms of this Agreement, the Lender agrees to make
                available to the Borrower a revolving credit in an aggregate amount
                not
                exceeding the Maximum Amount at any one
                time.

            

    

     

    
      	 	
              2.2

            	
              Purpose
                The Borrower shall apply the Loan for the purpose referred to in
                Recital
                (B).

            

    

     

    
      	 	
              2.3

            	
              Monitoring
                The Lender shall not be bound to monitor or verify the application
                of any
                amount borrowed under this
                Agreement.

            

    

     

    
      	
              3

            	
              Conditions
                of Utilisation

            

    

     

    
      	 	
              3.1

            	
              Conditions
                precedent
                The Borrower is not entitled to have any Drawing advanced unless
                the
                Lender has received all of the documents and other evidence listed
                in Part
                I of Schedule 1.

            

    

     

    
      	 	
              3.2

            	
              Further
                conditions precedent
                The Lender will only be obliged to advance a Drawing if on the date
                of the
                Drawdown Notice and on the proposed Drawdown
                Date:

            

    

     

    
      	
            	3.2.1	
              no
                Default is continuing or would result from the advance of that Drawing;
                and

            

    

     

    
      	
            	3.2.2	
              the
                representations made by the Borrower under Clause 12 are true in
                all
                material respects.

            

    

     

    
      	 	
              3.3

            	
              Drawing
                limit
                The Lender will only be obliged to advance a Drawing
                if:

            

    

     

    
      	
            	3.3.1	
              no
                other Drawing has been made on the same Business
                Day;

            

    

    
       

      
        
           

        

          11

          
            

          

        

        
           

        

      

    
     

    
      	
            	3.3.2	
              that
                Drawing is not less than one million Dollars ($1,000,000) or, if
                in excess
                of one million Dollars ($1,000,000), integral multiples of five hundred
                thousand Dollars ($500,000); and

            

    

     

    
      	
            	3.3.3	
              that
                Drawing will not increase the outstanding amount of the Loan to a
                sum in
                excess of the Maximum Amount.

            

    

     

    
      	 	
              3.4

            	
              Reduction
                of Maximum Amount
                The Maximum Amount:

            

    

     

    
      	
            	3.4.1	
              shall
                be reduced by twenty (20) reduction amounts, the first six (6) reduction
                amounts on each of the Reduction Dates, each reduction amount in
                the
                amount of seven hundred and fifty thousand Dollars ($750,000), the
                following six (6) reduction amounts each in the amount of one million
                Dollars ($1,000,000), the following seven (7) reduction amounts each
                in
                the amount of one million six hundred and eighty seven thousand five
                hundred Dollars ($1,687,500) and the final reduction amount in the
                amount
                of nineteen million six hundred and eighty seven thousand five hundred
                Dollars ($19,687,500)(comprising of a reduction amount of one million
                six
                hundred and eighty seven thousand five hundred Dollars ($1,687,500)
                and a
                balloon reduction of eighteen million Dollars ($18,000,000)), the
                first
                Reduction Date being the date which is six (6) calendar months from
                the
                date of this Agreement and subsequent Reduction Dates being at consecutive
                intervals of six (6) calendar months thereafter, with the last Reduction
                Date being on the Final Maturity Date;
                and

            

    

     

    
      	
            	3.4.2	
              may
                (in addition to any reduction required under Clause 3.4.1) be reduced
                by
                the Borrower by five hundred thousand Dollars ($500,000) or an integral
                multiple of that amount with effect from any Business Day by written
                notice to the Lender given not fewer than fourteen (14) days prior
                to that
                Business Day, which notice shall be irrevocable. Any voluntary reduction
                in the Maximum Amount shall be in addition to, and without prejudice
                to,
                the mandatory reductions in the Maximum Amount made pursuant to Clause
                3.4.1 and may not be reversed. Any reduction under this Clause 3.4.2
                shall
                satisfy the 

            

    

    
       

      
        
           

        

          12

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              obligations
                under Clause 3.4.1 in order of maturity. Amounts repaid by the Borrower
                pursuant to this Clause shall not be available for
                reborrowing.

            

    

     

    
      	 	
              3.5

            	
              Conditions
                subsequent
                The Borrower undertakes to deliver or to cause to be delivered to
                the
                Lender on, or as soon as practicable after, the first Drawdown Date
                the
                additional documents and other evidence listed in Part II of
                Schedule 1.

            

    

     

    
      	 	
              3.6

            	
              No
                Waiver If
                the Lender in its sole discretion agrees to advance a Drawing to
                the
                Borrower before all of the documents and evidence required by Clause
                3.1
                have been delivered to or to the order of the Lender, the Borrower
                undertakes to deliver all outstanding documents and evidence to or
                to the
                order of the Lender no later than the date specified by the
                Lender.

            

    

     

    The
      advance of a Drawing under this Clause 3.6 shall not be taken as a waiver of
      the
      Lender’s right to require production of all the documents and evidence required
      by Clause 3.1.

     

    
      	 	
              3.7

            	
              Form
                and content
                All documents and evidence delivered to the Lender under this Clause
                3
                shall:

            

    

     

    
      	
            	3.7.1	
              be
                in form and substance acceptable to the
                Lender;

            

    

     

    
      	
            	3.7.2	
              if
                required by the Lender, be certified, notarised, legalised or attested
                in
                a manner acceptable to the Lender;
                and

            

    

     

    
      	
            	3.7.3	
              if
                copies, be certified as true and complete copies by a director or
                the
                secretary or the legal advisor or a duly authorised attorney-in-fact
                of
                the Borrower.

            

    

     

    
      	
              4

            	
              Advance

            

    

     

    The
      Borrower may request a Drawing to be advanced in one amount on any Business
      Day
      prior to the Availability Termination Date by delivering to the Lender a duly
      completed Drawdown Notice not more than ten (10) and not fewer than three (3)
      Business Days before the proposed Drawdown Date.

    
       

      
        
           

        

          13

          
            

          

        

        
           

        

      

    
     

    
      	
              5

            	
              Currency

            

    

     

    
      	 	
              5.1

            	
              Conversion
                The Borrower may Convert all or any part of the Loan into a Permitted
                Currency not later than five (5) Business Days before the Drawdown
                Date or
                at any time during the Facility Period, subject to there being no
                Event of
                Default which is continuing and subject to the Permitted Currency
                being
                available to the Lender. Upon conversion, that part of the Loan shall
                remain denominated in, and shall be repayable in, the Permitted Currency
                until the end of the relevant Interest Payment Date. Clause 3.4 shall
                be
                amended so that the Maximum Amount of the Loan shall be reduced in
                the
                Permitted Currency or Permitted Currencies selected under this Clause,
                provided that the Reduction Dates specified in Clause 3.4 shall not
                be
                changed.

            

    

     

    
      	 	
              5.2

            	
              Indemnity
                The Borrower shall indemnify the Lender from time to time on demand
                against all Break Costs, other losses, costs, claims, damages and
                expenses
                which the Lender may from time to time suffer, incur or sustain by
                reason
                of the Lender agreeing to and/or implementing the terms of this Clause
                (including, without limitation, all costs and expenses incurred by
                the
                Lender in effecting any
                conversion).

            

    

     

    
      	
              6

            	
              Repayment

            

    

     

    
      	 	
              6.1

            	
              Repayment
                of each Drawing
                The Borrower agrees to repay each Drawing to the Lender on the last
                day of
                the Interest Period in respect of that Drawing. On the Final Maturity
                Date
                the Borrower shall repay to the Lender all amounts then outstanding
                under
                or pursuant to this Agreement. Without limitation to the repayments
                required by Clause 3.4, in addition the Borrower may repay any Drawing
                in
                whole or in part in integral multiples of five hundred thousand Dollars
                ($500,000) (or the equivalent in the Permitted Currency in which
                the
                Drawing in question is then denominated) and no repayment shall be
                made in
                an amount which is less than one million Dollars ($1,000,000) (or
                the
                equivalent in the Permitted Currency in which the Drawing in question
                is
                then denominated) (or as otherwise may be agreed by the Lender) provided
                that it has first given to the Lender not fewer than two (2) Business
                Days’ prior written notice expiring on a Business Day of its intention
                to
                do so. Any notice pursuant to this Clause once given shall be irrevocable
                and shall oblige the Borrower to make the

            

    

    
       

      
        
           

        

          14

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              repayment
                referred to in the notice on the Business Day specified in the notice,
                together with all interest accrued on the amount repaid up to and
                including that Business Day.

            

    

     

    
      	 	
              6.2

            	
              Reborrowing
                Amounts of the Loan which are repaid or prepaid shall be available
                for
                reborrowing in accordance with Clause 3 prior to the Availability
                Termination Date.

            

    

     

    
      	
              7

            	
              Prepayment

            

    

     

    
      	 	
              7.1

            	
              Illegality
                If
                it becomes unlawful in any jurisdiction for the Lender to perform
                any of
                its obligations as contemplated by this Agreement or to fund or maintain
                the Loan:

            

    

     

    
      	
            	7.1.1	
              the
                Lender shall promptly notify the Borrower of that event;
                and

            

    

     

    
      	
            	7.1.2	
              the
                Borrower shall repay any Drawing on the last day of its current Interest
                Period or, if earlier, the date specified by the Lender in the notice
                delivered to the Borrower (being no earlier than the last day of
                any
                applicable grace period permitted by
                law).

            

    

     

    
      	 	
              7.2

            	
              Voluntary
                prepayment of Loan
                The Borrower may prepay the whole or any part of a Drawing (but,
                if in
                part, being an amount that reduces that Drawing by a minimum amount
                of
                five hundred thousand Dollars ($500,000) or an integral multiple
                of that
                amount (or as otherwise may be agreed by the Lender) provided that
                it
                gives the Lender not less than fourteen (14) Business Days’ (or such
                shorter period of the notice as the Lender may agree) prior notice.
                Amounts prepaid by the Borrower pursuant to this Clause shall be
                available
                for reborrowing. Any prepayment under this Clause 7.2 shall satisfy
                the
                obligations under Clause 6.1 in order of
                maturity.

            

    

     

    
      	 	
              7.3

            	
              Mandatory
                prepayment on sale or Total Loss
                Upon the sale or Total Loss of the Vessel, the Maximum Amount shall
                reduce
                to zero and the Borrower shall repay the Indebtedness in full, in
                the case
                of a sale of the Vessel, by not later than the date of the sale of
                the
                Vessel or, in the case of a Total Loss, by not later than the date
                falling
                one hundred and eighty (180) days from the date of the casualty giving
                rise to the Total Loss (or such longer period as the Lender may in
                its
                

            

    

    
       

      
        
           

        

          15

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              discretion
                agree). Amounts prepaid by the Borrower pursuant to this Clause shall
                not
                be available for reborrowing.

            

    

     

    
      	 	
              7.4

            	
              Mandatory
                prepayment on reduction of Maximum Amount
                If
                the Maximum Amount is reduced in accordance with Clause 3.4 to an
                amount
                which is less than the aggregate amount of the Drawings then outstanding,
                the Borrower shall, simultaneously with that reduction, prepay one
                or more
                outstanding Drawings to the extent required to ensure that the aggregate
                amount of the Drawings outstanding does not exceed the reduced Maximum
                Amount.

            

    

     

    
      	 	
              7.5

            	
              Restrictions
                Any notice of prepayment given under this Clause 7 shall be irrevocable
                and, unless a contrary indication appears in this agreement, shall
                specify
                the date or dates upon which the relevant prepayment is to be made
                and the
                amount of that prepayment.

            

    

     

    Any
      prepayment under this Agreement shall be made together with accrued interest
      on
      the amount prepaid and, subject to any Break Costs, without premium or
      penalty.

     

    
      	
              8

            	
              Interest

            

    

     

    
      	 	
              8.1

            	
              Interest
                Periods
                The period during which each Drawing shall be outstanding under this
                Agreement shall be an Interest Period of one (1), three (3), six
                (6), nine
                (9) or twelve (12) months’ duration, as selected by the Borrower in the
                Drawdown Notice in respect of the Drawing in question, or such other
                duration as may be agreed by the
                Lender.

            

    

     

    
      	 	
              8.2

            	
              Beginning
                and end of Interest Periods
                Each Interest Period shall start on the Drawdown Date of the Drawing
                in
                question and end on the date which numerically corresponds to that
                Drawdown Date in the relevant calendar month except that, if there
                is no
                numerically corresponding date in that calendar month, the Interest
                Period
                shall end on the last Business Day in that
                month.

            

    

     

    
      	 	
              8.3

            	
              Interest
                Periods to meet Maturity Date
                If
                an Interest Period for a Drawing would otherwise expire after the
                Maturity
                Date, the Interest Period for that Drawing shall expire on the Maturity
                Date.

            

    

    
       

      
        
           

        

          16

          
            

          

        

        
           

        

      

    
     

    
      	 	
              8.4

            	
              Non-Business
                Days
                If
                an Interest Period would otherwise end on a day which is not a Business
                Day, that Interest Period will instead end on the next Business Day
                in
                that calendar month (if there is one) or the preceding Business Day
                (if
                there is not). 

            

    

     

    
      	 	
              8.5

            	
              Interest
                rate During
                each Interest Period interest shall accrue on the relevant Drawing
                at the
                rate determined by the Lender to be the aggregate of (a) the Margin,
                (b)
                LIBOR and (c) the Mandatory Cost, if
                any.

            

    

     

    
      	 	
              8.6

            	
              Failure
                to select Interest Period If
                the Borrower at any time fails to select or agree to an Interest
                Period in
                accordance with Clause 8.1, the interest rate applicable shall be
                the rate
                determined by the Lender in accordance with Clause 8.5 for an Interest
                Period of such duration (not exceeding six months) as the Lender
                may
                select.

            

    

     

    
      	 	
              8.7

            	
              Accrual
                and payment of interest
                Interest shall accrue from day to day, shall be calculated on the
                basis of
                a 360 day year and the actual number of days elapsed (or, in any
                circumstance where market practice differs, in accordance with the
                prevailing market practice) and shall be paid by the Borrower to
                the
                Lender on the last day of each Interest Period and, if the Interest
                Period
                is longer than six (6) months, on the dates falling at six (6) monthly
                intervals after the first day of that Interest
                Period.

            

    

     

    
      	 	
              8.8

            	
              Default
                interest
                If
                the Borrower fails to pay any amount payable by it under a Finance
                Document on its due date, interest shall accrue on the overdue amount
                from
                the due date up to the date of actual payment (both before and after
                judgment) at a rate which is one per cent (1%) higher than the rate
                which
                would have been payable if the overdue amount had, during the period
                of
                non-payment, constituted a Drawing in the currency of the overdue
                amount
                for successive Interest Periods, each selected by the Lender (acting
                reasonably). Any interest accruing under this Clause 8.8 shall be
                immediately payable by the Borrower on demand by the Lender. If unpaid,
                any such interest will be compounded with the overdue amount at the
                end of
                each Interest Period applicable to that overdue amount but will remain
                immediately due and payable.

            

    

    
       

      
        
           

        

          17

          
            

          

        

        
           

        

      

    
     

    
      	 	
              8.9

            	
              Changes
                in market circumstances If
                at any time the Lender determines (which determination shall be final
                and
                conclusive and binding on the Borrower) that, by reason of changes
                affecting the London interbank market, adequate and fair means do
                not
                exist for determining the rate of interest on a Drawing for any Interest
                Period:

            

    

     

    
      	
            	8.9.1	
              the
                Lender shall give notice to the Borrower of the occurrence of such
                event;
                and

            

    

     

    
      	
            	8.9.2	
              the
                rate of interest on the relevant Drawing for that Interest Period
                shall be
                the rate per annum which is the sum
                of:

            

    

     

    
      	
            	(a)	
              the
                Margin; and

            

    

     

    
      	
            	(b)	
              the
                rate which expresses as a percentage rate per annum the cost to the
                Lender
                of funding the relevant Drawing from whatever source it may reasonably
                select; and

            

    

     

    
      	
            	(c)	
              the
                Mandatory Cost, if any,

            

    

     

    PROVIDED
      THAT if the resulting rate of interest is not acceptable to the
      Borrower:

     

    
      	
            	8.9.3	
              the
                Lender will negotiate with the Borrower in good faith with a view
                to
                modifying this Agreement to provide a substitute basis for determining
                the
                rate of interest which is financially a substantial equivalent to
                the
                basis provided for in this
                Agreement;

            

    

     

    
      	
            	8.9.4	
              any
                substitute basis agreed pursuant to Clause 8.9.3 shall be binding
                on the
                parties to this Agreement; and

            

    

     

    
      	
            	8.9.5	
              if,
                within thirty (30) days of the giving of the notice referred to in
                Clause
                8.9.1, the Borrower and the Lender fail to agree in writing on a
                substitute basis for determining the rate of interest in respect
                of the
                relevant Drawing, the Lender shall cease to be obliged to advance
                that
                Drawing, but, if it has already been advanced, the Borrower will
                

            

    

    
       

      
        
           

        

          18

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              immediately
                prepay it, together with any Break Costs, and the Maximum Amount
                shall be
                reduced by the amount of that
                Drawing.

            

    

     

    
      	 	
              8.10

            	
              Determinations
                conclusive
                The Lender shall promptly notify the Borrower of the determination
                of a
                rate of interest under this Clause 8 and each such determination
                shall
                (save in the case of manifest error) be final and
                conclusive.

            

    

     

    
      	
              9

            	
              Indemnities

            

    

     

    
      	 	
              9.1

            	
              Transaction
                expenses
                The Borrower will, within fourteen (14) days of the Lender’s written
                demand, pay the Lender the amount of all costs and expenses (including
                legal fees and Value Added Tax or any similar or replacement tax
                if
                applicable) incurred by the Lender in connection with:
                

            

    

     

    
      	
            	9.1.1	
              the
                negotiation, preparation, printing, execution and registration of
                the
                Finance Documents (whether or not any Finance Document is actually
                executed or registered and whether or not a Drawing is
                advanced);

            

    

     

    
      	
            	9.1.2	
              any
                amendment, addendum or supplement to any Finance Document (whether
                or not
                completed); and

            

    

     

    
      	
            	9.1.3	
              any
                other document which may at any time be required by the Lender to
                give
                effect to any Finance Document or which the Lender is entitled to
                call for
                or obtain under any Finance Document (including, without limitation,
                all
                premiums and other sums from time to time payable by the Lender in
                relation to the Mortgagee’s
                Insurances).

            

    

     

    
      	 	
              9.2

            	
              Funding
                costs
                The Borrower shall indemnify the Lender on the Lender’s written demand
                against all losses and costs incurred or sustained by the Lender
                if, for
                any reason, a Drawing is not advanced to the Borrower after the relevant
                Drawdown Notice has been given to the Lender, or is advanced on a
                date
                other than that requested in the Drawdown Notice (unless, in either
                case,
                as a result of any default by the
                Lender).

            

    

     

    
      	 	
              9.3

            	
              Break
                Costs
                The Borrower shall indemnify the Lender on the Lender’s written demand
                against all costs, losses, premiums or penalties incurred by the
                Lender as
                a result of its receiving any prepayment of all or any part of a
                Drawing
                (whether 

            

    

    
       

      
        
           

        

          19

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              pursuant
                to Clause 7 or otherwise) on a day other than the last day of an
                Interest
                Period for that Drawing, or any other payment under or in relation
                to the
                Finance Documents on a day other than the due date for payment of
                the sum
                in question, including (without limitation) any losses or costs incurred
                in liquidating or re- employing deposits from third parties acquired
                to
                effect or maintain all or any part of a Drawing, and any liabilities,
                expenses or losses incurred by the Lender in terminating or reversing,
                or
                otherwise in connection with, any Transaction or any other interest
                rate
                and/or currency swap, transaction or arrangement entered into by
                the
                Lender to hedge any exposure arising under this Agreement, or in
                terminating or reversing, or otherwise in connection with, any open
                position arising under this Agreement or the Master
                Agreement.

            

    

     

    
      	 	
              9.4

            	
              Currency
                indemnity In
                the event of the Lender receiving or recovering any amount payable
                under a
                Finance Document in a currency other than the Currency of Account,
                and if
                the amount received or recovered is insufficient when Converted into
                the
                Currency of Account at the date of receipt to satisfy in full the
                amount
                due, the Borrower shall, on the Lender’s written demand, pay to the Lender
                such further amount in the Currency of Account as is sufficient to
                satisfy
                in full the amount due and that further amount shall be due to the
                Lender
                as a separate debt under this
                Agreement.

            

    

     

    
      	 	
              9.5

            	
              Increased
                costs (subject to Clause 9.6)
                If, by reason of the introduction of any law, or any change in any
                law, or
                any change in the interpretation or administration of any law, or
                compliance with any request or requirement from any central bank
                or any
                fiscal, monetary or other authority occurring after the date of this
                Agreement:

            

    

     

    
      	
            	9.5.1	
              the
                Lender (or the holding company of the Lender) shall be subject to
                any Tax
                with respect to payment of all or any part of the Indebtedness (other
                than
                Tax on overall net income); or

            

    

     

    
      	
            	9.5.2	
              the
                basis of Taxation of payments to the Lender in respect of all or
                any part
                of the Indebtedness shall be changed;
                or

            

    

     

    
      
        
           

        

          20

          
            

          

        

        
           

        

      

    
     

    
      	
            	9.5.3	
              any
                reserve requirements shall be imposed, modified or deemed applicable
                against assets held by or deposits in or for the account of or loans
                by
                any branch of the Lender; or

            

    

     

    
      	
            	9.5.4	
              the
                manner in which the Lender allocates capital resources to its obligations
                under this Agreement and/or the Master Agreement or any ratio (whether
                cash, capital adequacy, liquidity or otherwise) which the Lender
                is
                required or requested to maintain shall be affected;
                or

            

    

     

    
      	
            	9.5.5	
              there
                is imposed on the Lender (or on the holding company of the Lender)
                any
                other condition in relation to the Indebtedness or the Finance
                Documents;

            

    

     

    and
      the
      result of any of the above shall be to increase the cost to the Lender (or
      to
      the holding company of the Lender) of the Lender making or maintaining the
      Loan,
      or its obligations under the Master Agreement to cause the Lender to suffer
      (in
      its opinion) a material reduction in the rate of return on its overall capital
      below the level which it reasonably anticipated at the date of this Agreement
      and which it would have been able to achieve but for its entering into this
      Agreement or the Master Agreement and/or performing its obligations under this
      Agreement or the Master Agreement, then, subject to Clause 9.6, the Lender
      shall
      notify the Borrower and the Borrower shall from time to time pay to the Lender
      on demand the amount which shall compensate the Lender (or the holding company
      of the Lender) for such additional cost or reduced return. A certificate signed
      by an authorised signatory of the Lender setting out the amount of that payment
      and the basis of its calculation shall be submitted to the Borrower and shall
      be
      conclusive evidence of such amount save for manifest error or on any question
      of
      law.

     

    
      	 	
              9.6

            	
              Exceptions
                to increased costs
                Clause 9.5 does not apply to the extent any additional cost or reduced
                return referred to in that Clause
                is:

            

    

     

    
      	
            	9.6.1	
              compensated
                for by a payment made under Clause 9.10;
                or

            

    

     

    
      	
            	9.6.2	
              compensated
                for by a payment made under Clause 17.3;
                or

            

    

     

    
      	
            	9.6.3	
              compensated
                for by the payment of the Mandatory Cost;
                or

            

    

    
       

      
        
           

        

          21

          
            

          

        

        
           

        

      

    
     

    
      	
            	9.6.4	
              attributable
                to the wilful breach by the Lender (or the holding company of the
                Lender)
                of any law or regulation.

            

    

     

    
      	 	
              9.7

            	
              Events
                of Default
                The Borrower shall indemnify the Lender from time to time on the
                Lender’s
                written demand against all losses, costs and liabilities incurred
                or
                sustained by the Lender as a consequence of any Event of
                Default.

            

    

     

    
      	 	
              9.8

            	
              Enforcement
                costs
                The Borrower shall pay to the Lender on the Lender’s written demand the
                amount of all costs and expenses (including legal fees) incurred
                by the
                Lender in connection with the enforcement of, or the preservation
                of any
                rights under, any Finance Document including (without limitation)
                any
                losses, costs and expenses which the Lender may from time to time
                sustain,
                incur or become liable for by reason of the Lender being mortgagee
                of the
                Vessel and/or a lender to the Borrower, or by reason of the Lender
                being
                deemed by any court or authority to be an operator or controller,
                or in
                any way concerned in the operation or control, of the
                Vessel.

            

    

     

    
      	 	
              9.9

            	
              Other
                costs
                The Borrower shall pay to the Lender on the Lender’s written demand the
                amount of all sums which the Lender may pay or become actually or
                contingently liable for on account of the Borrower in connection
                with the
                Vessel (whether alone or jointly or jointly and severally with any
                other
                person) including (without limitation) all sums which the Lender
                may pay
                or guarantees which it may give in respect of the Insurances, any
                expenses
                incurred by the Lender in connection with the maintenance or repair
                of the
                Vessel or in discharging any lien, bond or other claim relating in
                any way
                to the Vessel, and any sums which the Lender may pay or guarantees
                which
                it may give to procure the release of the Vessel from arrest or
                detention.

            

    

     

    
      	 	
              9.10

            	
              Taxes
                The Borrower shall pay all Taxes to which all or any part of the
                Indebtedness or any Finance Document may be at any time subject (other
                than Tax on the Lender’s overall net income) and shall indemnify the
                Lender on the Lender’s written demand against all liabilities, costs,
                claims and expenses resulting from any omission to pay or delay in
                paying
                any such Taxes.

            

    

    
       

      
        
           

        

          22

          
            

          

        

        
           

        

      

    
     

    
      	
              10

            	
              Fees

            

    

     

    
      	 	
              10.1

            	
              Commitment
                fee
                The Borrower shall pay to the Lender a fee computed at the rate of
                zero
                point two per cent (0.2%) per annum on the undrawn Maximum Amount
                from
                time to time from the date of this Agreement until the Availability
                Termination Date. The accrued commitment fee is payable on the last
                day of
                each successive period of three (3) months from the date of this
                Agreement
                and on the Availability Termination
                Date.

            

    

     

    
      	 	
              10.2

            	
              Arrangement
                fee
                The Borrower shall pay to the Lender on the date of this Agreement
                an
                arrangement fee in the amount of sixty two thousand five hundred
                Dollars
                ($62,500).

            

    

     

    
      	
              11

            	
              Security
                and Application of Moneys

            

    

     

    
      	 	
              11.1

            	
              Security
                Documents
                As
                security for the payment of the Indebtedness, the Borrower shall
                execute
                and deliver to the Lender or cause to be executed and delivered to
                the
                Lender the following documents in such forms and containing such
                terms and
                conditions as the Lender shall
                require:

            

    

     

    
      	
            	11.1.1	
              a
                first priority Cypriot statutory mortgage over the Vessel together
                with a
                collateral deed of covenants;

            

    

     

    
      	
            	11.1.2	
              a
                first priority deed of assignment of the Insurances, Earnings and
                Requisition Compensation of the Vessel;
                and

            

    

     

    
      	
            	11.1.3	
              a
                first priority deed of charge over the Cash Collateral Account and
                all
                amounts from time to time standing to the credit of the Cash Collateral
                Account.

            

    

     

    
      	 	
              11.2

            	
              Accounts
                The Borrower shall maintain the Accounts with the Lender for the
                duration
                of the Facility Period free of Encumbrances and rights of set off
                other
                than those created by or under the Finance
                Documents.

            

    

     

    
      	 	
              11.3

            	
              Earnings
                The Borrower shall procure that all Earnings and any Requisition
                Compensation are credited to the Operating
                Account.

            

    

    
       

    

    
      
         

      

        23

        
          

        

      

      
         

      

    
     

    
      	 	
              11.4

            	
              Application
                of Operating Account
                The Borrower shall procure that there is transferred from the Operating
                Account to the Lender:

            

    

     

    
      	
            	11.4.1	
              on
                the due date for repayment of each Drawing, the amount of that Drawing;
                and

            

    

     

    
      	
            	11.4.2	
              on
                each Interest Payment Date in respect of a Drawing, the amount of
                interest
                due in respect of that Drawing, 

            

    

     

    and
      the
      Borrower irrevocably authorises the Lender to make those transfers.

     

    
      	 	
              11.5

            	
              Borrower’s
                obligations not affected
                If
                for any reason the amount standing to the credit of the Operating
                Account
                is insufficient to repay any Drawing or to make any payment of interest
                when due, the Borrower’s obligation to repay that Drawing or to make that
                payment of interest shall not be
                affected.

            

    

     

    
      	 	
              11.6

            	
              Release
                of surplus
                Any amount remaining to the credit of the Operating Account following
                the
                making of any transfer required by Clause 11.4 shall (unless a Default
                shall have occurred and be continuing) be released to or to the order
                of
                the Borrower, subject to an amount of one hundred and fifty thousand
                Dollars ($150,000) remaining credited to the Operating Account at
                all
                times during the Facility Period.

            

    

     

    
      	 	
              11.7

            	
              Relocation
                of Accounts
                At
                any time following the occurrence and during the continuation of
                a
                Default, the Lender may without the consent of the Borrower relocate
                either or both of the Accounts to any other branch of the Lender,
                without
                prejudice to the continued application of this Clause 11 and the
                rights of
                the Lender under the Finance
                Documents.

            

    

     

    
      	 	
              11.8

            	
              Application
                after acceleration
                From and after the giving of notice to the Borrower by the Lender
                under
                Clause 14.2, the Borrower shall procure that all sums from time to
                time
                standing to the credit of either of the Accounts are immediately
                transferred to the Lender for application in accordance with
                Clause 11.14 and the Borrower irrevocably authorises the Lender to
                make those transfers.

            

    

    
       

      
        
           

        

          24

          
            

          

        

        
           

        

      

    
     

    
      	 	
              11.9

            	
              General
                application of moneys
                The Borrower, subject to Clause 11.10, irrevocably authorises the
                Lender
                to apply all sums which the Lender may
                receive:

            

    

     

    
      	
            	11.9.1	
              pursuant
                to a sale or other disposition of the Vessel or any right, title
                or
                interest in the Vessel; or

            

    

     

    
      	
            	11.9.2	
              by
                way of payment of any sum in respect of the Insurances, Earnings
                or
                Requisition Compensation; or

            

    

     

    
      	
            	11.9.3	
              by
                way of transfer of any sum from either of the Accounts;
                or

            

    

     

    
      	
            	11.9.4	
              otherwise
                arising under or in connection with any Security
                Document,

            

    

     

    in
      or
      towards satisfaction, or by way of retention on account, of the Indebtedness,
      in
      such manner as the Lender may determine.

     

    
      	
            	11.10	
              Application
                of moneys on sale or Total Loss
                The Borrower irrevocably 
                authorises the Lender to apply all sums which the Lender may receive
                pursuant to a sale by the Borrower of the Vessel or a Total Loss
                in or
                towards satisfaction of the prepayment due and payable by virtue
                of that
                sale or Total Loss under Clause 7.3, but the Borrower’s obligation to make
                that prepayment shall not be affected if those sums are insufficient
                to
                satisfy that obligation.

            

    

     

    
      	 	
              11.11

            	
              Determination
                of market value
                For the purpose of the Security Documents, the market value of the
                Vessel
                shall be the average value certified by the Brokers, who shall report
                directly to the Lender and shall be appointed by the Borrower not
                later
                than five (5) days after the Lender’s request for the Borrower to appoint
                such Brokers. In the event that the Borrower fails to appoint such
                Brokers
                within five (5) days after the Lender’s request so to do or if a Broker
                appointed by the Borrower is not approved by the Lender and the Borrower
                fails to appoint an alternative Broker who is approved by the Lender
                within such five (5) day period, the Borrower irrevocably authorises
                the
                Lender to appoint a Broker in its discretion to conduct such valuations.
                All valuations pursuant to this Clause shall be made on the basis
                of a
                sale of the Vessel for prompt delivery for cash at arm’s length on normal
                commercial terms by a willing seller to a willing buyer and free
                of any
                existing charter or-other contract of employment. The
                Borrower-

            

    

    
       

      
        
           

        

          25

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              agrees
                to accept each valuation obtained pursuant to this Clause as conclusive
                evidence of the Vessel’s market value at the date of such
                valuation.

            

    

     

    
      	 	
              11.12

            	
              Cost
                of valuation
                The Borrower shall be liable for all costs and expenses incurred
                by the
                Lender in obtaining up to two valuations in each year of the Facility
                Period one upon each anniversary of the date of this Agreement and
                the
                other six (6) months after every calendar year unless there is an
                Event of
                Default in which case the Borrower shall be liable for all costs
                and
                expenses incurred by the Lender in obtaining any number of valuations
                required by it pursuant to Clause 11.11 and shall reimburse the Lender
                in
                respect of all such costs and expenses on
                demand.

            

    

     

    
      	 	
              11.13

            	
              Provision
                of information
                The Borrower undertakes promptly to supply the Lender with such
                information concerning the Vessel’s condition, location and employment as
                the Lender may reasonably require.

            

    

     

    
      	 	
              11.14

            	
              Additional
                security
                If
                and so often as the aggregate of the market value of the Vessel
                (determined in accordance with Clause 11.11) plus the value of any
                additional security for the time being provided to the Lender pursuant
                to
                this Clause shall be less than (a) one hundred per cent (100%) of
                the
                amount of the Loan, for the period commencing on the first Drawdown
                Date
                and ending on the third anniversary of the first Drawdown Date, (b)
                one
                hundred and ten per cent (110%) of the amount of the Loan from the
                third
                anniversary of the first Drawdown Date until the sixth anniversary
                of the
                first Drawdown Date and (c) one hundred and twenty per cent (120%)
                of the
                amount of the Loan thereafter, the Borrower will, within fourteen
                (14)
                days of the request of the Lender to do so, at the Borrower’s
                option:-

            

    

     

    
      	 	
              (a)

            	
              pay
                to the credit of the Cash Collateral Account such amount as shall
                be
                necessary to establish that the aggregate of the market value of
                the
                Vessel (determined in accordance with Clause 11.11) plus the value
                of any
                additional security for the time being provided to the Lender pursuant
                to
                this Clause shall be no less than (a) one hundred per cent (100%)
                of the
                amount of the Loan, for the period commencing on the first
                

            

    

    
       

      
        
           

        

          26

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              Drawdown
                Date and ending on the third anniversary of the first Drawdown Date,
                (b)
                one hundred and ten per cent (110%) of the amount of the Loan from
                the
                third anniversary of the first Drawdown Date until the sixth anniversary
                of the first Drawdown Date and (c) one hundred and twenty per cent
                (120%)
                of the amount of the Loan thereafter;
                or

            

    

     

    
      	 	
              (b)

            	
              give
                to the Lender other security in amount and form acceptable to the
                Lender
                in its discretion; or

            

    

     

    
      	 	
              (c)

            	
              repay
                such amount of the Loan as shall be necessary to establish that the
                aggregate of the market value of the Vessel (determined in accordance
                with
                Clause 11.11) plus the value of any additional security for the time
                being
                provided to the Lender pursuant to this Clause shall be no less than
                (a)
                one hundred per cent (100%) of the amount of the Loan, for the period
                commencing on the first Drawdown Date and ending on the third anniversary
                of the first Drawdown Date, (b) one hundred and ten per cent (110%)
                of the
                amount of the Loan from the third anniversary of the first Drawdown
                Date
                until the sixth anniversary of the first Drawdown Date and (c) one
                hundred
                and twenty per cent (120%) of the amount of the Loan
                thereafter.

            

    

     

    Clauses
      7.2, 7.3 and 7.4 shall apply, mutatis mutandis, to any repayment made pursuant
      to this Clause and the value of any additional security provided pursuant to
      this Clause shall be determined by the Lender in its discretion.

     

    
      	 	
              11.15

            	
              Return
                of additional security
                If
                and so often as the aggregate of the market value of the Vessel
                (determined in accordance with Clause 11.11) plus the value of any
                additional security for the time being provided to the Lender pursuant
                to
                Clause 11.14 shall exceed (a) one hundred per cent (100%) of the
                amount of
                the Loan, for the period commencing on the first Drawdown Date and
                ending
                on the third anniversary of the first Drawdown Date, (b) one hundred
                and
                ten per cent (110%) of the amount of the Loan from the third anniversary
                of the first Drawdown Date until the sixth anniversary of the first
                Drawdown Date and (c) one hundred and twenty per cent (120%) of the
                amount
                of the Loan thereafter, then the Lender shall, within fourteen (14)
                days
                of the request of the Borrower to do so, release to the Borrower
                such
                portion of the amount standing to the credit

            

    

    
       

      
        
           

        

          27

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              of
                the Cash Collateral Account in accordance with Clause 11.14 and/or
                such
                amount of the security referred to in Clause 11.14(b) as shall be
                required
                to ensure that the aggregate of the market value of the Vessel (determined
                as aforesaid) plus the value of any additional security for the time
                being
                provided to the Lender pursuant to Clause 11.14 is equal to, but
                not less
                than (a) one hundred per cent (100%) of the amount of the Loan, for
                the
                period commencing on the first Drawdown Date and ending on the third
                anniversary of the first Drawdown Date, (b) one hundred and ten per
                cent
                (110%) of the amount of the Loan from the third anniversary of the
                first
                Drawdown Date until the sixth anniversary of the first Drawdown Date
                and
                (c) one hundred and twenty per cent (120%) of the amount of the Loan
                thereafter.

            

    

     

    
      	
              12

            	
              Representations

            

    

     

    
      	 	
              12.1

            	
              Representations
                The Borrower makes the representations and warranties set out in
                this
                Clause 12.1 to the Lender on the date of this
                Agreement.

            

    

     

    
      	
            	12.1.1	
              Status
                Each Security Party (which is not an individual) which is a corporation,
                duly incorporated and validly existing under the law of its jurisdiction
                of incorporation and has the power to own its assets and carry on
                its
                business as it is being conducted.

            

    

     

    
      	
            	12.1.2	
              Binding
                obligations
                The obligations expressed to be assumed by each Security Party in
                each
                Finance Document to which it is a party are legal, valid, binding
                and
                enforceable obligations.

            

    

     

    
      	
            	12.1.3	
              Non-conflict
                with other obligations
                The entry into and performance by each Security Party of, and the
                transactions contemplated by, the Finance Documents do not conflict
                with:

            

    

     

    (a) any
      law
      or regulation applicable to that Security Party;

     

    (b) the
      constitutional documents of that Security Party; or

     

    (c) any
      document binding on that Security Party or any of its assets, 

     

    and
      in
      borrowing the Loan, the Borrower is acting for its own account.

    
       

      
        
           

        

          28

          
            

          

        

        
           

        

      

    
     

    
      	
            	12.1.4	
              Power
                and authority
                Each Security Party has the power to enter into, perform and deliver
                and
                has taken all necessary action to authorise its entry into, performance
                and delivery of, the Finance Documents to which it is a party and
                the
                transactions contemplated by those Finance
                Documents.

            

    

     

    
      	
            	12.1.5	
              Validity
                and admissibility in evidence
                All consents, licences, approvals, authorisations, filings and
                registrations required or
                desirable:

            

    

     

    
      	
            	(a)	
              to
                enable each Security Party lawfully to enter into, exercise its rights
                and
                comply with its obligations in the Finance Documents to which it
                is a
                party or to enable the Lender to enforce and exercise all its rights
                under
                the Finance Documents; and

            

    

     

    
      	
            	(b)	
              to
                make the Finance Documents to which any Security Party is a party
                admissible in evidence in its jurisdiction of
                incorporation,

            

    

     

    have
      been
      obtained or effected and are in full force and effect, with the exception only
      of the registrations referred to in Part II of Schedule 1.

     

    
      	
            	12.1.6	
              Governing
                law and enforcement
                The choice of English law as the governing law of any Finance Document
                expressed to be governed by English law will be recognised and enforced
                in
                the jurisdiction of incorporation of each relevant Security Party,
                and any
                judgment obtained in England in relation to any such Finance Document
                will
                be recognised and enforced in the jurisdiction of incorporation of
                each
                relevant Security Party.

            

    

     

    
      	
            	12.1.7	
              Deduction
                of Tax
                No
                Security Party is required under the law of its jurisdiction of
                incorporation to make any deduction for or on account of Tax from
                any
                payment it may make under any Finance
                Document.

            

    

    
       

      
        
           

        

          29

          
            

          

        

        
           

        

      

    
     

    
      	
            	12.1.8	
              No
                filing or stamp taxes
                Under the law of jurisdiction of incorporation of each relevant Security
                Party it is not necessary that the Finance Documents be filed, recorded
                or
                enrolled with any court or other authority in that jurisdiction or
                that
                any stamp, registration or similar tax be paid on or in relation
                to the
                Finance Documents or the transactions contemplated by the Finance
                Documents.

            

    

     

    
      	
            	12.1.9	
              No
                default
                No
                Event of Default is continuing or might reasonably be expected to
                result
                from the advance of a Drawing.

            

    

     

    
      	
            	12.1.10	
              No
                misleading information
                Any factual information provided by any Security Party to the Lender
                was
                true and accurate in all material respects as at the date is was
                provided.

            

    

     

    
      	
            	12.1.11	
              Pari
                passu ranking
                The payment obligations of each Security Party under the Finance
                Documents
                to which it is a party rank at least pari passu with the claims of
                all its
                other unsecured and unsubordinated creditors, except for obligations
                mandatorily preferred by law applying to companies
                generally.

            

    

     

    
      	
            	12.1.12	
              No
                proceedings pending or threatened
                No
                litigation, arbitration or administrative proceedings of or before
                any
                court, arbitral body or agency have been started or (to the best
                of the
                Borrower’s knowledge threatened) which, if adversely determined, might
                reasonably be expected to have a materially adverse effect on the
                business, assets, financial condition or credit worthiness of any
                Security
                Party.

            

    

     

    
      	
            	12.1.13	
              Disclosure
                of material facts
                The Borrower is not aware of any material facts or circumstances
                which
                have not been disclosed to the Lender and which might, if disclosed,
                have
                adversely affected the decision of a person considering whether or
                not to
                make loan facilities of the nature contemplated by this Agreement
                available to the Borrower.

            

    

    
       

      
        
           

        

          30

          
            

          

        

        
           

        

      

    
     

    
      	
            	12.1.14	
              No
                established place of business in the UK or US
                No
                Security Party has an established place of business in the United
                Kingdom
                or the United States of America.

            

    

     

    
      	
            	12.1.15	
              Completeness
                of Relevant Documents
                The copies of any Relevant Documents provided or to be provided by
                the
                Borrower to the Lender in accordance with Clause 3 are, or will be,
                true
                and accurate copies of the originals and represent, or will represent,
                the
                full agreement between the parties to those Relevant Documents in
                relation
                to the subject matter of those Relevant Documents and there are no
                commissions, rebates, premiums or other payments due or to become
                due in
                connection with the subject matter of those Relevant Documents other
                than
                in the ordinary course of business or as disclosed to, and approved
                in
                writing by, the Lender.

            

    

     

    
      	 	
              12.2

            	
              Repetition
                Each representation and warranty in Clause 12.1 is deemed to be repeated
                by the Borrower by reference to the facts and circumstances then
                existing
                on the date of each Drawdown Notice and the first day of each Interest
                Period.

            

    

     

    
      	
              13

            	
              Undertakings
                and Covenants

            

    

     

    The
      undertakings and covenants in this Clause 13 remain in force for the duration
      of
      the 
      Facility
      Period.

     

    
      	 	
              13.1

            	
              Information
                Undertakings

            

    

     

    
      	
            	13.1.1	
              Financial
                statements
                The Borrower or the Managers will supply to the Lender, on request
                within
                sixty (60) days of the end of each calendar year during the Facility
                Period the unaudited management accounts for the Vessel prepared
                by the
                Managers showing the income and expenditure for the Vessel for such
                calendar year, with the first such accounts to be supplied by not
                later
                than sixty (60) days of the end of
                2007.

            

    

    
       

      
        
           

        

          31

          
            

          

        

        
           

        

      

    
     

    
      	
            	13.1.2	
              Information:
                miscellaneous
                The Borrower shall supply to the
                Lender:

            

    

     

    
      	
            	(a)	
              promptly
                upon becoming aware of them, details of any litigation, arbitration
                or
                administrative proceedings which are current, threatened or pending
                against any Security Party, and which might, if adversely determined,
                have
                a materially adverse effect on the business, assets, financial condition
                or credit worthiness of that Security Party;
                and

            

    

     

    
      	
            	(b)	
              promptly,
                such further information regarding the financial condition, business
                and
                operations of any Security Party as the Lender may reasonably request
                including, without limitation, cash flow analyses and details of
                the
                operating costs of the Vessel.

            

    

     

    
      	
            	13.1.3	
              Notification
                of default

            

    

     

    
      	
            	(a)	
              The
                Borrower shall notify the Lender of any Default (and the steps, it
                any,
                being taken to remedy it) promptly upon becoming aware of its
                occurrence.

            

    

     

    
      	
            	(b)	
              Promptly
                upon a request by the Lender, the Borrower shall supply to the Lender
                a
                certificate signed by two of its directors or senior officers on
                its
                behalf certifying that no Default is continuing (or if a Default
                is
                continuing, specifying the Default and the steps, if any, being taken
                to
                remedy it).

            

    

     

    
      	
            	13.1.4	
              “Know
                your customer” checks If:

            

    

     

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

            

    

     

    
      	
            	(b)	
              any
                change in the status of the Borrower after the date of this Agreement;
                or

            

    

    
       

      
        
           

        

          32

          
            

          

        

        
           

        

      

    
     

    
      	
            	(c)	
              a
                proposed assignment or transfer by the Lender of any of its rights
                and
                obligations under this Agreement, 

            

    

     

    obliges
      the Lender (or, in the case of (c) above, 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 (c) above, on behalf of any prospective new
      Lender) in order for the Lender (or, in the case of (c) above, 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.

     

    
      	 	
              13.2

            	
              General
                undertakings

            

    

     

    
      	
            	13.2.1	
              Authorisations
                The Borrower shall promptly:

            

    

     

    
      	
            	(a)	
              obtain,
                comply with and do all that is necessary to maintain in full force
                and
                effect; and 

            

    

     

    
      	
            	(b)	
              supply
                certified copies to the Lender of,

            

    

     

    any
      consent, licence, approval or authorisation required under any law or regulation
      to enable each Security Party to perform its obligations under the Finance
      Documents to which it is a party and to ensure the legality, validity,
      enforceability or admissibility in evidence in the jurisdiction of incorporation
      of each relevant Security Party of any Finance Document.

     

    
      	
            	13.2.2	
              Compliance
                with laws The
                Borrower shall comply in all respects with all laws to which it may
                be
                subject, if failure so to comply would materially impair its ability
                to
                perform its obligations under the Finance
                Documents.

            

    

    
       

      
        
           

        

          33

          
            

          

        

        
           

        

      

    
     

    
      	
            	13.2.3	
              Conduct
                of business
                The Borrower shall carry on and conduct its business in a proper
                and
                efficient manner, file all requisite tax returns and pay all tax
                which
                becomes due and payable (except where contested in good
                faith).

            

    

     

    
      	
            	13.2.4	
              Evidence
                of good standing
                The Borrower will from time to time if requested by the Lender provide
                the
                Lender with evidence in form and substance satisfactory to the Lender
                that
                the Security Parties and all corporate shareholders of any Security
                Party
                remain in good standing.

            

    

     

    
      	
            	13.2.5	
              Liquidity
                The Borrower will throughout the Facility Period maintain or procure
                that
                the Managers maintain in the Operating Account at all times a minimum
                positive account balance free of any Encumbrances (other than in
                favour of
                the Lender) of not less than one hundred and fifty thousand Dollars
                ($150,000). Any undrawn amounts under this Agreement may be included
                for
                the purpose of this calculation and this calculation shall exclude
                cash
                deposited with the Lender as security for any other facility or in
                connection with Clause 5.

            

    

     

    
      	
            	13.2.6	
              Negative
                pledge and no disposals
                The Borrower shall not create nor permit to subsist any Encumbrance
                or
                other third party rights over any of its present or future assets
                or
                undertaking nor dispose of any those assets or of all or part of
                that
                undertaking.

            

    

     

    
      	
            	13.2.7	
              Merger
                The Borrower shall not without the prior written consent of the Lender
                enter into any amalgamation, demerger, merger or corporate
                reconstruction.

            

    

     

    
      	
            	13.2.8	
              Change
                of business
                The Borrower shall not without the prior written consent of the Lender
                make any substantial change to the general nature of its business
                from
                that carried on at the date of this
                Agreement.

            

    

     

    
      	
            	13.2.9	
              No
                other business
                The Borrower shall not without the prior written consent of the Lender
                engage in any business other than the ownership, operation, chartering
                and
                management of the Vessel.

            

    

    
       

      
        
           

        

          34

          
            

          

        

        
           

        

      

    
     

    
      	
            	13.2.10	
              No
                place of business in UK or US
                The Borrower shall not have an established place of business in the
                United
                Kingdom or the United States of America at any time during the Facility
                Period.

            

    

     

    
      	
            	13.2.11	
              No
                borrowings
                The Borrower shall not without the prior written consent of the Lender
                borrow any money (except for the Loan and unsecured Financial Indebtedness
                subordinated to the Loan) nor incur any obligations under
                leases.

            

    

     

    
      	
            	13.2.12	
              No
                substantial liabilities Except
                in the ordinary course of business, the Borrower shall not without
                the
                prior written consent of the Lender incur any liability to any third
                party
                which is in the Lender’s opinion of a substantial
                nature.

            

    

     

    
      	
            	13.2.13	
              No
                loans or other financial commitments
                The Borrower shall not without the prior written consent of the Lender
                make any loan nor enter into any guarantee or indemnity or otherwise
                voluntarily assume any actual or contingent liability in respect
                of any
                obligation of any other person.

            

    

     

    
      	
            	13.2.14	
              No
                dividends
                The Borrower shall not without the prior written consent of the Lender
                pay
                any dividends or make any other distributions to shareholders or
                issue any
                new shares.

            

    

     

    
      	
            	13.2.15	
              Inspection
                of records
                The Borrower will permit the inspection of its financial records
                and
                accounts from time to time by the Lender or its
                nominee.

            

    

     

    
      	
            	13.2.16	
              No
                change in Relevant Documents
                The Borrower shall procure that, without the prior written consent
                of the
                Lender, there shall be no termination of, alteration to, or waiver
                of any
                term of, any of the Relevant
                Documents.

            

    

     

    
      	
            	13.2.17	
              No
                change in ownership or control of the Borrower or the Managers
                The
                Borrowers shall not permit any change in its beneficial ownership
                and
                

            

    

    
       

      
        
           

        

          35

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              control
                and the beneficial ownership and control of the Managers from that
                advised
                to the Lender at the date of this
                Agreement.

            

    

     

    
      	
            	13.2.18	
              No
                purchase of a vessel The
                Borrower shall not purchase any vessel or any shares in any
                vessel.

            

    

     

    
      	
            	13.2.19	
              No
                dealings with Master Agreement The
                Borrower shall not assign, novate or encumber or in any other way
                transfer
                any of its rights or obligations under the Master Agreement, nor
                enter
                into any interest rate exchange or hedging agreement with anyone
                other
                than the Lender.

            

    

     

    
      	 	
              13.3

            	
              Vessel
                undertakings

            

    

     

    
      	
            	13.3.1	
              No
                sale of Vessel
                The Borrower shall not sell or otherwise dispose of the Vessel or
                any
                shares in the Vessel nor agree to do so without the prior written
                consent
                of the Lender.

            

    

     

    
      	
            	13.3.2	
              No
                chartering after Event of Default
                Following the occurrence and during the continuation of an Event
                of
                Default the Borrower shall not without the prior written consent
                of the
                Lender let the Vessel on charter or renew or extend any charter or
                other
                contract of employment of the Vessel (nor agree to do
                so).

            

    

     

    
      	
            	13.3.3	
              No
                change in management
                The Borrower shall procure that, without the prior written consent
                of the
                Lender, there shall be no termination of, alteration to, or waiver
                of any
                term of, the Management Agreement and the Borrower shall not without
                the
                prior written consent of the Lender permit the Managers to sub-contract
                or
                delegate the commercial or technical management of the Vessel to
                any third
                party.

            

    

     

    
      	
            	13.3.4	
              Registration
                of Vessel
                The Borrower undertakes to maintain the registration of the Vessel
                under
                the flag stated in Recital (A) for the duration of the Facility Period
                unless the Lender agrees otherwise in
                writing.

            

    

    
       

      
        
           

        

          36

          
            

          

        

        
           

        

      

    
     

    
      	
            	13.3.5	
              Evidence
                of current COFR
                The Borrower will, if and for so long as the Vessel trades in the
                United
                States of America and Exclusive Economic Zone (as defined in the
                United
                States Oil Pollution Act 1990), obtain, retain and provide the Lender
                with
                a copy of, a valid Certificate of Financial Responsibility for the
                Vessel
                under that Act and will comply strictly with the requirements of
                that
                Act.

            

    

     

    
      	
            	13.3.6	
              ISM
                Code compliance
                The Borrower will:

            

    

     

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

            

    

     

    
      	
            	(b)	
              maintain
                a valid and current SMC for the Vessel throughout the Facility Period
                and
                provide a copy to the Lender;

            

    

     

    
      	
            	(c)	
              procure
                that the ISM Company maintains a valid and current DOC throughout
                the
                Facility Period and provide a copy to the Lender;
                and

            

    

     

    
      	
            	(d)	
              immediately
                notify the Lender in writing of any actual or `threatened withdrawal,
                suspension, cancellation or modification of the SMC of the Vessel
                or of
                the DOC of the ISM Company.

            

    

     

    
      	
            	13.3.7	
              ISPS
                Code compliance
                The Borrower will:

            

    

     

    
      	
            	(a)	
              for
                the duration of the Facility Period comply with the ISPS Code in
                relation
                to the Vessel and procure that the Vessel and the ISPS Company comply
                with
                the ISPS Code;

            

    

     

    
      	
            	(b)	
              maintain
                a valid and current ISSC for the Vessel throughout the Facility Period
                and
                provide a copy to the Lender; and

            

    

     

    
      	
            	(c)	
              immediately
                notify the Lender in writing of any actual or threatened withdrawal,
                suspension, cancellation or modification of the
                ISSC.

            

    

    
       

      
        
           

        

          37

          
            

          

        

        
           

        

      

    
     

    
      	
            	13.3.8	
              Annex
                VI compliance
                The Borrower will:

            

    

     

    
      	
            	(a)	
              for
                the duration of the Facility Period comply with Annex VI in relation
                to
                the Vessel and procure that the Vessel’s master and crew are familiar
                with, and that the Vessel complies with, Annex
                VI;

            

    

     

    
      	
            	(b)	
              maintain
                a valid and current IAPPC for the Vessel throughout the Facility
                Period
                and provide a copy to the Lender;
                and

            

    

     

    
      	
            	(c)	
              immediately
                notify the Lender in writing of any actual or threatened withdrawal,
                suspension, cancellation or modification of the
                IAPPC.

            

    

     

    
      	
              14

            	
              Events
                of Default

            

    

     

    
      	 	
              14.1

            	
              Events
                of Default
                Each of the events or circumstances set out in this Clause 14.1 is
                an
                Event of Default.

            

    

     

    
      	
            	14.1.1	
              Non-payment
                The Borrower does not pay on the due date any amount payable by it
                under a
                Finance Document at the place at and in the currency in which it
                is
                expressed to be payable.

            

    

     

    
      	
            	14.1.2	
              Other
                obligations
                A
                Security Party or any other person (except the Lender) does not comply
                with any provision of any of the Relevant Documents to which that
                Security
                Party or person is a party (other than as referred to in Clause
                14.1.1).

            

    

     

    
      	
            	14.1.3	
              Misrepresentation
                Any representation, warranty or statement made or deemed to be repeated
                by
                a Security Party in any Finance Document or any other document delivered
                by or on behalf of a Security Party under or in connection with any
                Finance Document is or proves to have been incorrect or misleading
                in any
                material respect when made or deemed to be
                repeated.

            

    

     

    
      	
            	14.1.4	
              Cross
                default
                Any Financial Indebtedness of a Security
                Party:

            

    

    
       

      
        
           

        

          38

          
            

          

        

        
           

        

      

    
     

    
      	
            	(a)	
              is
                not paid when due or within any originally applicable grace period;
                or

            

    

     

    
      	
            	(b)	
              is
                declared to be, or otherwise becomes, due and payable before its
                specified
                maturity as a result of an event of default (however  described);
                or

            

    

     

    
      	
            	(c)	
              is
                declared by a creditor to be due and payable before its specified
                maturity
                as a result of such an event.

            

    

     

    
      	
            	14.1.5	
              Insolvency

            

    

     

    
      	
            	(a)	
              A
                Security Party is unable or admits inability to pay its debts as
                they fall
                due, suspends making payments on any of its debts or, by reason of
                actual
                or anticipated financial difficulties, commences negotiations with
                one or
                more of its creditors with a view to rescheduling any of its Financial
                Indebtedness.

            

    

     

    
      	
            	(b)	
              The
                value of the assets of a Security Party is less than its liabilities
                (taking into account contingent and prospective
                liabilities).

            

    

     

    
      	
            	(c)	
              A
                moratorium is declared in respect of any Financial Indebtedness of
                a
                Security Party.

            

    

     

    
      	
            	14.1.6	
              Insolvency
                proceedings
                Any corporate action, legal proceedings or other procedure or step
                is
                taken for:

            

    

     

    
      	
            	(a)	
              the
                suspension of payments, a moratorium of any Financial Indebtedness,
                winding-up, dissolution, administration, bankruptcy or reorganisation
                (by
                way of voluntary arrangement, scheme of arrangement or otherwise)
                of a
                Security Party;

            

    

     

    
      	
            	(b)	
              a
                composition, compromise, assignment or arrangement with any creditor
                of a
                Security Party;

            

    

     

    
      	
            	(c)	
              the
                appointment of a liquidator, receiver, administrative receiver,
                administrator, compulsory manager, or trustee or other
                

            

    

    
       

      
        
           

        

          39

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              similar
                officer in respect of any Security Party or any of its assets;
                or

            

    

     

    
      	
            	(d)	
              enforcement
                of any Encumbrance over any assets of a Security Party,
                

            

    

     

    or
      any
      analogous procedure or step is taken in any jurisdiction.

     

    
      	
            	14.1.7	
              Creditors’
                process
                Any expropriation, attachment, sequestration, distress or execution
                affects any asset or assets of a Security
                Party.

            

    

     

    
      	
            	14.1.8	
              Change
                in ownership or control of the Borrower or the
                Managers
                There is any change in the beneficial ownership or control of the
                Borrower
                or the Managers from that advised to the Lender by the Borrower at
                the
                date of this Agreement.

            

    

     

    
      	
            	14.1.9	
              Repudiation
                A
                Security Party or any other person (except the Lender) repudiates
                any of
                the Relevant Documents to which that Security Party or person is
                a party
                or evidences an intention to do so.

            

    

     

    
      	
            	14.1.10	
              Impossibility
                or illegality
                Any event occurs which would, or would with the passage of time,
                render
                performance of any of the Relevant Documents by a Security Party
                or any
                other party to any such document impossible, unlawful or unenforceable
                by
                the Lender or a Security Party.

            

    

     

    
      	
            	14.1.11	
              Conditions
                subsequent
                Any of the conditions referred to in Clause 3.5 is not satisfied
                within
                the time reasonably required by the
                Lender.

            

    

     

    
      	
            	14.1.12	
              Revocation
                or modification of authorization
                Any consent, license, approval, authorization, filing, registration
                or
                other requirement of any governmental, judicial or other public body
                or
                authority which is now, or which at any time during the Facility
                Period
                becomes, necessary to enable a Security Party or any other person
                (except
                the Lender) to comply with any of its obligations under any of the
                Relevant Documents is not obtained, is revoked, suspended, withdrawn
                or
                withheld, or is modified in a manner which the Lender considers is,
                or
                

            

    

    
       

      
        
           

        

          40

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              may
                be, prejudicial to the interests of the Lender, or ceases to remain
                in
                full force and effect.

            

    

     

    
      	
            	14.1.13	
              Curtailment
                of business
                A
                Security Party ceases, or threatens to cease, to carry on all or
                a
                substantial part of its business or, as a result of intervention
                by or
                under the authority of any government, the business of a Security
                Party is
                wholly or partially curtailed or suspended, or all or a substantial
                part
                of the assets or undertaking of a Security Party is seized, nationalised,
                expropriated or compulsorily
                acquired.

            

    

     

    
      	
            	14.1.14	
              Reduction
                of capital
                A
                Security Party reduces its authorised or issued or subscribed
                capital.

            

    

     

    
      	
            	14.1.15	
              Loss
                of Vessel
                The Vessel suffers a Total Loss or is otherwise destroyed, abandoned,
                confiscated, forfeited or condemned as prize, or a similar event
                occurs in
                relation to any other vessel which may from time to time be mortgaged
                to
                the Lender as security for the payment of all or any part of the
                Indebtedness, except that a Total Loss, or event similar to a Total
                Loss
                in relation to any other vessel, shall not be an Event of Default
                if:

            

    

     

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

            

    

     

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

            

    

     

    
      	
            	(c)	
              payment
                of all insurance proceeds in respect of the Total Loss is made in
                full to
                the Lender within one hundred and eighty (180) days of the occurrence
                of
                the casualty giving rise to the Total Loss in question or such longer
                period as the Lender may in its discretion
                agree.

            

    

    
       

      
        
           

        

          41

          
            

          

        

        
           

        

      

    
    

    
      	
            	14.1.16	
              Challenge
                to registration
                The registration of the Vessel or the Mortgage is contested or becomes
                void or voidable or liable to cancellation or termination, or the
                validity
                or priority of the Mortgage is
                contested.

            

    

     

    
      	
            	14.1.17	
              War
                The country of registration of the Vessel becomes involved in war
                (whether
                or not declared) or civil war or is occupied by any other power and
                the
                Lender in its discretion considers that, as a result, the security
                conferred by the Security Documents is materially
                prejudiced.

            

    

     

    
      	
            	14.1.18	
              Master
                Agreement termination
                A
                notice is given by the Lender under section 6(a) of the Master Agreement,
                or by any person under section 6(b)(iv) of the Master Agreement,
                in either
                case designating an Early Termination Date for the purpose of the
                Master
                Agreement, or the Master Agreement is for any other reason terminated,
                cancelled, suspended, rescinded, revoked or otherwise ceases to remain
                in
                full force and effect.

            

    

     

    
      	
            	14.1.19	
              Material
                adverse change
                Any event or series of events occurs which, in the opinion of the
                Lender,
                is likely to have a materially adverse effect on the business, assets,
                financial condition or credit worthiness of a Security
                Party.

            

    

     

    
      	 	
              14.2

            	
              Acceleration
                If
                an Event of Default is continuing the Lender may by notice to the
                Borrower
                cancel any part of the Maximum Amount not then advanced
                and:

            

    

     

    
      	
            	14.2.1	
              declare
                that the Loan, together with accrued interest, and all other amounts
                accrued or outstanding under the Finance Documents are immediately
                due and
                payable, whereupon they shall become immediately due and payable;
                and/or

            

    

     

    
      	
            	14.2.2	
              declare
                that the Loan is payable on demand, whereupon it shall immediately
                become
                payable on demand by the Lender.

            

    

    
       

      
        
           

        

          42

          
            

          

        

        
           

        

      

    
     

    
      	
              15

            	
              Assignment
                and Sub-Participation

            

    

     

    
      	 	
              15.1

            	
              Right
                to assign
                The Lender may, subject to the prior approval of the Borrower (such
                approval not to be unreasonably withheld) and subject to the Lender
                giving
                prior notice of such intention to the Borrower, and without additional
                costs to the Borrower, assign or transfer all or any of its rights
                under
                or pursuant to the Security Documents to any other bank or financial
                institution, and may grant sub- participations in all or any part
                of the
                Loan. The Lender may, without the prior approval of the Borrower,
                assign
                or transfer all or any of its rights under or pursuant to the Security
                Documents to any other branch of the Lender, and may grant
                sub-participations in all or any part of the
                Loan:

            

    

     

    
      	 	
              15.2

            	
              Borrower’s
                co-operation
                The Borrower will co-operate fully with the Lender in connection
                with any
                assignment, transfer or sub-participation; will execute and procure
                the
                execution of such documents as the Lender may require in that connection;
                and irrevocably authorises the Lender to disclose to any proposed
                assignee, transferee or sub-participant (whether before or after
                any
                assignment, transfer or sub-participation and whether or not any
                assignment, transfer or sub- participation shall take place) all
                information relating to the Security Parties, the Loan, the Relevant
                Documents and the Vessel which the Lender may in its discretion consider
                necessary or desirable.

            

    

     

    
      	 	
              15.3

            	
              Rights
                of assignee or transferee
                Any assignee or transferee of the Lender shall (unless limited by
                the
                express terms of the assignment or novation) take the full benefit
                of
                every provision of the Finance Documents benefitting the
                Lender.

            

    

     

    
      	 	
              15.4

            	
              No
                assignment or transfer by the Borrower
                The Borrower may not assign any of its rights or transfer any of
                its
                rights or obligations under the Finance
                Documents.

            

    

     

    
      	
              16

            	
              Set-Off

            

    

     

    
      	 	
              16.1

            	
              The
                Lender may set off any matured obligation due from the Borrower under
                any
                Finance Document against any matured obligation owed by the Lender
                to the
                Borrower, regardless of the place of payment, booking branch or currency
                of either obligation. If the obligations are in different currencies,
                the
                Lender may 

            

    

    
       

      
        
           

        

          43

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              Convert
                either obligation at a market rate of exchange in its usual course
                of
                business for the purpose of the
                set-off.

            

    

     

    
      	 	
              16.2

            	
              Master
                Agreement rights
                The rights conferred on the Lender by this Clause 16 shall be in
                addition
                to, and without prejudice to or limitation of, the rights of netting
                and
                set off conferred on the Lender by the Master
                Agreement.

            

    

     

    
      	
              17

            	
              Payments

            

    

     

    
      	 	
              17.1

            	
              Payments
                Each amount payable by the Borrower under a Finance Document shall be paid
                to such account at such bank as the Lender may from time to time
                direct to
                the Borrower in the Currency of Account and in such funds as are
                customary
                at the time for settlement of transactions in the relevant currency
                in the
                place of payment. Payment shall be deemed to have been received by
                the
                Lender on the date on which the Lender receives authenticated advice
                of
                receipt, unless that advice is received by the Lender on a day other
                than
                a Business Day or at a time of day (whether on a Business Day or
                not) when
                the Lender in its discretion considers that it is impossible or
                impracticable for the Lender to utilise the amount received for value
                that
                same day, in which event the payment in question shall be deemed
                to have
                been received by the Lender on the Business Day next following the
                date of
                receipt of advice by the Lender.

            

      	 	 	 

    

     

    
      	 	
              17.2

            	
              No
                deductions or withholdings
                Each payment (whether of principal or interest or otherwise) to be
                made by
                the Borrower under a Finance Document shall, subject only to Clause
                17.3,
                be made free and clear of and without deduction for or on account
                of any
                Taxes or other deductions, withholdings, restrictions, conditions
                or
                counterclaims of any nature.

            

    

     

    
      	 	
              17.3

            	
              
                Grossing-up
                  If
                  at any time any law requires the Borrower to make any deduction
                  or
                  withholding from any payment, or to change the rate or manner in
                  which any
                  required deduction or withholding is made, the Borrower will promptly
                  notify the Lender and, simultaneously with making that payment,
                  will pay
                  to the Lender whatever additional amount (after taking into account
                  any
                  additional Taxes on, or deductions or withholdings from, or restrictions
                  or conditions on, that additional amount) is necessary to ensure
                  that,
                  after making the deduction or withholding, the Lender receives
                  a net sum
                  equal to the sum

              

            

    

    
       

      
        
           

        

          44

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              which
                the Lender would have received had no deduction or withholding been
                made.

            

    

     

    
      	 	
              17.4

            	
              Evidence
                of deductions
                If
                at any time the Borrower is required by law to make any deduction
                or
                withholding from any payment to be made by it under a Finance Document,
                the Borrower will pay the amount required to be deducted or withheld
                to
                the relevant authority within the times allowed under the applicable
                law
                and will, no later than thirty (30) days after making that payment,
                deliver to the Lender an original receipt issued by the relevant
                authority, or other evidence acceptable to the Lender, evidencing
                the
                payment to that authority of all amounts required to be deducted
                or
                withheld.

            

    

     

    
      
        	
              	17.5	
                Adjustment
                  of due dates
                  If
                  any payment or transfer of funds to be made under a Finance Document,
                  other than a payment of interest on a Drawing, or a payment under
                  the
                  Master Agreement, shall be due on a day which is not a Business
                  Day, that
                  payment shall be made on the next succeeding Business Day (unless
                  the next
                  succeeding Business Day falls in the next calendar month in which
                  event
                  the payment shall be made on the next preceding Business Day).
                  Any such
                  variation of time shall be taken into account in computing any
                  interest in
                  respect of that payment.

              

      

    

     

    
      	 	
              17.6

            	
              Control
                Account
                The Lender shall open and maintain on its books a control account
                in the
                name of the Borrower showing the advance of the Loan and the computation
                and payment of interest and all other sums due under this Agreement
                and
                the Master Agreement. The Borrower’s obligations to repay the Loan and to
                pay interest and all other sums due under this Agreement and the
                Master
                Agreement shall be evidenced by the entries from time to time made
                in the
                control account opened and maintained under this Clause 17.6 and
                those
                entries will, in the absence of manifest error, be conclusive and
                binding.

            

    

     

    
      	
              18

            	
              Notices

            

    

     

    
      	 	
              18.1

            	
              Communications
                in writing
                Any communication to be made under or in connection with this Agreement
                shall be made in writing and, unless otherwise stated, may be made
                by fax
                or letter.

            

    

    
       

      
        
           

        

          45

          
            

          

        

        
           

        

      

    
     

    
      	 	
              18.2

            	
              Addresses
                The address and fax number (and the department or officer, if any,
                for
                whose attention the communication is to be made) of each party to
                this
                Agreement for any communication or document to be made or delivered
                under
                or in connection with this Agreement
                are:

            

    

     

    
      	
            	18.2.1	
              in
                the case of the Borrower, c/o Safety Management Overseas S.A., 32
                Avenue
                Karamanli, GR-166 05 Voula, Athens, Greece (telex no: 215050 answerback:
                SAFE GR, fax no: +30 210 895 6900) marked for the attention of Mr
                George
                Papadopoulos; and

            

    

     

    
      	
            	18.2.2	
              in
                the case of the Lender, to the Lender at its address at the head
                of this
                Agreement (fax no: +44 207 626 5956 tel no: +44 207 621 6045) marked
                for
                the attention of: Shipping
                Department;

            

    

     

    or
      any
      substitute address, fax number, department or officer as either party may notify
      to the other by not less than five (5) Business Days’ notice.

     

    
      	 	
              18.3

            	
              Delivery
                Any communication or document made or delivered by one party to this
                Agreement to the other under or in connection this Agreement will
                only be
                effective:

            

    

     

    
      	
            	18.3.1	
              if
                by way of fax, when received in legible form;
                or

            

    

     

    
      	
            	18.3.2	
              if
                by way of letter, when it has been left at the relevant address or
                five
                (5) Business Days after being deposited in the post postage prepaid
                in an
                envelope addressed to it at that
                address;

            

    

     

    and,
      if a
      particular department or officer is specified as part of its address details
      provided under Clause 18.2, if addressed to that department or
      officer.

     

    Any
      communication or document to be made or delivered to the Lender will be
      effective only when actually received by the Lender.

     

    
      	 	
              18.4

            	
              English
                language
                Any notice given under or in connection with this Agreement must
                be in
                English. All other documents provided under or in connection with
                this
                Agreement must be:

            

    

    
       

      
        
           

        

          46

          
            

          

        

        
           

        

      

    
     

    
      	
            	18.4.1	
              in
                English; or

            

    

     

    
      	
            	18.4.2	
              if
                not in English, and if so required by the Lender, accompanied by
                a
                certified English translation and, in this case, the English translation
                will prevail unless the document is a constitutional, statutory or
                other
                official document.

            

    

     

    
      	
              19

            	
              Partial
                Invalidity

            

    

     

    If,
      at
      any time, any provision of a Finance Document is or becomes illegal, invalid
      or
      unenforceable in any respect under any law of any jurisdiction, neither the
      legality, validity or enforceability of the remaining provisions nor the
      legality, validity or enforceability of such provision under the law of any
      other jurisdiction will in any way be affected or impaired.

     

    
      	
              20

            	
              Remedies
                and Waivers

            

    

     

    No
      failure to exercise, nor any delay in exercising, on the part of the Lender,
      any
      right or remedy under a Finance Document shall operate as a waiver, nor shall
      any single or partial exercise of any right or remedy prevent any further or
      other exercise or the exercise of any other right or remedy. The rights and
      remedies provided in this Agreement are cumulative and not exclusive of any
      rights or remedies provided by law.

     

    
      	
              21

            	
              Miscellaneous

            

    

     

    
      	 	
              21.1

            	
              No
                oral variations
                No
                variation or amendment of a Finance Document shall be valid unless
                in
                writing and signed on behalf of the
                Lender.

            

    

     

    
      	 	
              21.2

            	
              Further
                Assurance
                If
                any provision of a Finance Document shall be invalid or unenforceable
                in
                whole or in part by reason of any present or future law or any decision
                of
                any court, or if the documents at any time held by or on behalf of
                the
                Lender are considered by the Lender for any reason insufficient to
                carry
                out the terms of this Agreement, then from time to time the Borrower
                will
                promptly, on demand by the Lender, execute or procure the execution
                of
                such further 

            

    

    
       

      
        
           

        

          47

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              documents
                as in the opinion of the Lender are necessary to provide adequate
                security
                for the repayment of the
                Indebtedness.

            

    

     

    
      	 	
              21.3

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

            

    

     

    
      	 	
              21.4

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

            

    

     

    
      	 	
              21.5

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

            

    

     

    
      	 	
              21.6

            	
              Contracts
                (Rights of Third Parties) Act 1999
                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.

            

    

     

    
      	
              22

            	
              Law
                and Jurisdiction

            

    

     

    
      	 	
              22.1

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

            

    

     

    
      	 	
              22.2

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

            

    

     

    
      	 	
              22.3

            	
              Alternative
                jurisdictions
                Nothing contained in this Clause 22 shall limit the right of the
                Lender to
                commence any proceedings against the Borrower in any other court
                of
                competent jurisdiction nor shall the commencement of any
                

            

    

    
       

      
        
           

        

          48

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              proceedings
                against the Borrower in one or more jurisdictions preclude the
                commencement of any proceedings in any other jurisdiction, whether
                concurrently or not.

            

    

     

    
      	 	
              22.4

            	
              Waiver
                of objections
                The Borrower irrevocably waives any objection which it may now or
                in the
                future have to the laying of the venue of any proceedings in any
                court
                referred to in this Clause 22, and any claim that those proceedings
                have
                been brought in an inconvenient or inappropriate forum, and irrevocably
                agrees that a judgment in any proceedings commenced in any such court
                shall be conclusive and binding on it and may be enforced in the
                courts of
                any other jurisdiction.

            

    

     

    
      	 	
              22.5

            	
              Service
                of process
                Without prejudice to any other mode of service allowed under any
                relevant
                law, the Borrower:

            

    

     

    
      	
            	22.5.1	
              irrevocably
                appoints Cheeswrights Notaries Public, Bankside House, 107 Leadenhall
                Street, London EC3A 4HA, United Kingdom as its agent for service
                of
                process in relation to any proceedings before the English courts
                in
                connection with this Agreement; and

            

    

     

    
      	
            	22.5.2	
              agrees
                that failure by a process agent to notify the Borrower of the process
                will
                not invalidate the proceedings
                concerned.

            

    

    
       

      
        
           

        

          49

          
            

          

        

        
           

        

      

    
     

    SCHEDULE
      1: Conditions Precedent and Subsequent

     

    Part
      1: Conditions precedent

     

    
      	1	
              Security
                Parties

            

    

     

    
      	
            	(a)	
              Constitutional
                Documents
                Copies of the constitutional documents of each Security Party together
                with such other evidence as the Lender may reasonably require that
                each
                Security Party is duly incorporated in its country of incorporation
                and
                remains in existence with power to enter into, and perform its obligations
                under, the Relevant Documents to which it is or is to become a
                party.

            

    

     

    
      	
            	(b)	
              Certificates
                of good standing
                A
                certificate of good standing in respect of each Security Party (if
                such a
                certificate can be obtained).

            

    

     

    
      	
            	(c)	
              Board
                resolutions
                A
                copy of a resolution of the board of directors of each Security
                Party:

            

    

     

    
      	 	
              (i)

            	
              approving
                the terms of, and the transactions contemplated by, the Relevant
                Documents
                to which it is a party and resolving that it execute those Relevant
                Documents; and

            

    

     

    
      	 	
              (ii)

            	
              authorising
                a specified person or persons to execute those Relevant Documents
                (and all
                documents and notices to be signed and/or despatched under those
                documents) on its behalf.

            

    

     

    
      	
            	(d)	
              Officer’s
                certificates
                A
                certificate of a duly authorised officer of each Security Party certifying
                that each copy document relating to it specified in this Part I of
                Schedule 1 is correct, complete and in full force and effect as at
                a date
                no earlier than the date of this Agreement and setting out the names
                of
                the directors and officers of that Security
                Party.

            

    

     

    
      	
            	(e)	
              Powers
                of attorney
                The notarially attested and legalised power of attorney of each Security
                Party under which any documents are to be executed or transactions
                undertaken by that Security Party.

            

    

    
       

      
        
           

        

          50

          
            

          

        

        
           

        

      

    
     

    
      	2	
              Security
                and related documents

            

    

     

    
      	
            	(a)	
              Vessel
                documents
                Photocopies, certified as true by a director or the secretary or
                the duly
                authorised attorney of the Borrower, of:

            

    

     

    
      	
            	(i)	
              the
                Management Agreement;

            

    

     

    
      	
            	(ii)	
              the
                Vessel’s current Safety Construction, Safety Equipment, Safety Radio, Oil
                Pollution Prevention and Load Line
                Certificates;

            

    

     

    
      	
            	(iii)	
              the
                Vessel’s current Certificate of Financial Responsibility issued pursuant
                to the United States Oil Pollution Act 1990 (if required for the
                Vessel);

            

    

     

    
      	
            	(iv)	
              the
                Vessel’s current SMC;

            

    

     

    
      	
            	(v)	
              the
                ISM Company’s current DOC;

            

    

     

    
      	
            	(vi)	
              the
                Vessel’s current ISSC;

            

    

     

    
      	
            	(vii)	
              the
                Vessel’s current IAPPC;

            

    

     

    
      	
            	(viii)	
              the
                Vessel’s current Tonnage
                Certificate;

            

    

     

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

     

    
      	
            	(b)	
              Evidence
                of Borrower’s title
                Evidence that on the Drawdown Date (i) the Vessel will be at least
                provisionally registered under the flag stated in Recital (A) in
                the
                ownership of the Borrower and (ii) the Mortgage will be capable of
                being
                registered against the Vessel with first
                priority.

            

    

     

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

            

    

     

    
      	
            	(d)	
              Confirmation
                of class
                A
                Certificate of Confirmation of Class for hull and machinery confirming
                that the Vessel is classed with the highest class applicable
                

            

    

    
       

      
        
           

        

          51

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              to
                vessels of her type with Lloyd’s Register of Shipping or such other
                classification society as may be acceptable to the Lender free of
                recommendations affecting class.

            

    

     

    
      	
            	(e)	
              Security
                Documents
                The Security Documents, together with all other documents-required-by
                any
                of them, including, without limitation, all notices of assignment
                and/or
                charge and evidence that those notices will be duly acknowledged
                by the
                recipients.

            

    

     

    
      	
            	(f)	
              Mandates
                Such duly signed forms of mandate, and/or other evidence of the opening
                of
                the Accounts, as the Lender may
                require.

            

    

     

    
      	
            	(g)	
              Managers’
                confirmation
                The written confirmation of the Managers that, throughout the Facility
                Period unless otherwise agreed by the Lender, they will remain the
                commercial and technical managers of the Vessel and that they will
                not,
                without the prior written consent of the Lender, sub-contract or
                delegate
                the commercial or technical management of the Vessel to any third
                party
                and confirming in terms acceptable to the Lender that, following
                the
                occurrence of an Event of Default, all claims of the Managers against
                the
                Borrower shall be subordinated to the claims of the Lender under
                the
                Finance Documents.

            

    

     

    
      	
            	(h)	
              No
                disputes
                The written confirmation of the Borrower that there is no dispute
                under
                any of the Relevant Documents as between the parties to any such
                document.

            

    

     

    
      
        	
                3

              	
                Legal
                  opinions

              

      

    

     

    
      	
            	(a)	
              If
                a Security Party is incorporated in a jurisdiction other than England
                and
                Wales or if any Finance Document is governed by the laws of a jurisdiction
                other than England and Wales, a legal opinion of the legal advisers
                to the
                Lender in each relevant jurisdiction, substantially in the form or
                forms
                provided to the Lender prior to signing this Agreement or confirmation
                satisfactory to the Lender that such an opinion will be
                given.

            

    

     

    
      	4	
              Other
                documents and evidence

            

    

     

    
      	
            	(a)	
              Drawdown
                Notice
                A
                duly completed Drawdown Notice.

            

    

    
       

      
        
           

        

          52

          
            

          

        

        
           

        

      

    
     

    
      	
            	(b)	
              Process
                agent
                Evidence that any process agent referred to in Clause 22.5 and any
                process
                agent appointed under any other Finance Document has accepted its
                appointment.

            

    

     

    
      	
            	(c)	
              Other
                authorisations
                A
                copy of any other consent, licence, approval, authorisation or other
                document, opinion or assurance which the Lender considers to be necessary
                or desirable (if it has notified the Borrower accordingly) in connection
                with the entry into and performance of the transactions contemplated
                by
                any of the Relevant Documents or for the validity and enforceability
                of
                any of the Relevant Documents.

            

    

     

    
      	
            	(d)	
              Fees
                Evidence that the fees, costs and expenses then due from the Borrower
                under Clause 9 and Clause 10 have been paid or will be paid by the
                Drawdown Date.

            

    

     

    
      	
            	(e)	
              “Know
                your customer” documents Such
                documentation and other evidence as is reasonably requested by the
                Lender
                in order for the Lender to comply with all necessary “know your customer”
                or similar identification procedures in relation to the transactions
                contemplated in the Finance
                Documents.

            

    

    
       

      
        
           

        

          53

          
            

          

        

        
           

        

      

    
     

    Part
      II: Conditions subsequent

     

    
      	
            	1	
              Evidence
                of Borrower’s title
                Certificate of ownership and encumbrance (or equivalent) issued by
                the
                Registrar of Ships (or equivalent official) of the flag stated in
                Recital
                (A) confirming that (a) the Vessel is permanently registered
                under that flag in the ownership of the Borrower, (b) the Mortgage
                has been registered with first priority against the Vessel and
                (c) there are no further Encumbrances registered against the
                Vessel.

            

    

     

    
      	
            	2	
              Letters
                of undertaking
                Letters of undertaking in respect of the Insurances as required by
                the
                Security Documents together with copies of the relevant policies
                or cover
                notes or entry certificates duly endorsed with the interest of the
                Lender.

            

    

     

    
      	
            	3	
              Acknowledgements
                of notices
                Acknowledgements of all notices of assignment and/or charge given
                pursuant
                to the Security Documents.

            

    

     

    
      
        	
              	4	
                Legal
                  opinions
                  Such of the legal opinions specified in Part I of this Schedule
                  1 as have
                  not already been provided to the
                  Lender.

              

      

    

     

    
      	
            	5	
              Companies
                Act registrations
                Evidence that the prescribed particulars of the Security Documents
                have
                been delivered to the Registrar of Companies of Cyprus within the
                statutory time limit.

            

    

     

    
      	
            	6	
              Mortgagee’s
                Insurance Fees
                Payment to the Lender of all fees in relation to inspections, valuations,
                legal fees and premiums for Mortgagee’s
                Insurances.

            

    

    
       

      
        
           

        

          54

          
            

          

        

        
           

        

      

    
     

    SCHEDULE
      2: Calculation of Mandatory Cost

     

    
      	
            	1	
              The
                Mandatory Cost is an addition to the interest rate to compensate
                the
                Lender for the cost of compliance with (a) the requirements of the
                Bank of
                England and/or the Financial Services Authority (or, in either case,
                any
                other authority which replaces all or any of its functions) or (b)
                the
                requirements of the European Central
                Bank.

            

    

     

    
      	
            	(a)	
              On
                the first day of each Interest Period (or as soon as possible thereafter)
                the Lender shall calculate, as a percentage rate, a rate (the
                “Additional
                Cost Rate”)
                in accordance with the paragraphs set out
                below.

            

    

     

    
      	
            	(b)	
              The
                Additional Cost Rate for the Lender if lending from an office in
                the
                euro-zone will be the percentage notified by the Lender to the Borrower
                to
                be its reasonable determination of the cost (expressed as a percentage
                of
                the Loan) of complying with the minimum reserve requirements of the
                European Central Bank as a result of making the Loan from that
                office.

            

    

     

    
      	
            	(c)	
              The
                Additional Cost Rate for the Lender if lending from an office in
                the
                United Kingdom will be calculated by the Lender as
                follows:

            

    

     

    
      	
            	(d)	
              where
                the Loan is denominated in
                sterling:

            

    

     

    BY
      +
      S(Y-Z) + F x 0.01
      per cent
      per annum

    100
      - (B
      + S)

     

    
      	
            	(e)	
              where
                the Loan is denominated in any currency other than
                sterling:

            

    

     

    F
      x
      0.01
      per cent
      per annum

    300

     

    where:

     

    
      	
            	B	
              is
                the percentage of eligible liabilities (assuming these to be in excess
                of
                any stated minimum) which the Lender is from time to time required
                to
                maintain as an interest free cash ratio deposit with the Bank of
                England
                to comply with cash ratio
                requirements;

            

    

    
       

      
        
           

        

          55

          
            

          

        

        
           

        

      

    
     

    
      	
            	Y	
              is
                the percentage rate of interest (excluding the Margin and the Mandatory
                Cost and, if the Loan is an overdue amount, the additional rate of
                interest specified in Clause 7.8) payable for the relevant Interest
                Period
                on the Loan; 

            

    

     

    
      	
            	S	
              is
                the percentage (if any) of eligible liabilities which the Lender
                is
                required from time to time to maintain as interest bearing special
                deposits with the Bank of England;

            

    

     

    
      	
            	Z	
              is
                the interest rate per annum payable by the Bank of England to the
                Lender
                on special deposits; and

            

    

     

    
      	
            	F	
              is
                the charge payable by the Lender to the Financial Services Authority
                under
                paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or
                the
                equivalent provisions in any replacement regulations (with, for this
                purpose, the figure for the minimum amount in paragraph 2.02b or
                such
                equivalent provision deemed to be zero), expressed in pounds per
£l
                million of the fee base of the
                Lender.

            

    

     

    
      	
            	2	
              For
                the purpose of this Schedule:

            

    

     

    
      	
            	(a)	
              “eligible
                liabilities”
                and “special
                deposits”
                have the meanings given to them at the time of application of the
                formula
                by the Bank of England;

            

    

     

    
      	
            	(b)	
              “fee
                base”
                has the meaning given to it in the Fees
                Regulations;

            

    

     

    
      	
            	(c)	
              “Fees
                Regulations”
                means the regulations governing periodic fees contained in the FSA
                Supervision Manual or such other law or regulation as may be in force
                from
                time to time in respect of the payment of fees for the acceptance
                of
                deposits.

            

    

     

    
      	
            	3	
              In
                the application of the formula B, Y, S and Z are included in the
                formula
                as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
                BY is
                calculated as 0.5. x 15. Each rate calculated in accordance with
                the
                formula is, if necessary, rounded upward to four decimal
                places.

            

    

     

    
      	
            	4	
              If
                a change in circumstances has rendered, or will render, the formula
                inappropriate, the Lender shall notify the Borrower of the manner
                in which
                the Mandatory Cost will subsequently be calculated. The manner of
                calculation so

            

    

    
       

      
        
           

        

          56

          
            

          

        

        
           

        

      

    
     

    
      	 	 	
              notified
                by the Lender shall, in the absence of manifest error, be binding
                on the
                Borrower.

            

    

    
       

      
        
           

        

          57

          
            

          

        

        
           

        

      

    
     

    SCHEDULE
      3: Form of Drawdown Notice 

     

    To: DnB
      NOR BANK ASA

     

     

    From: Efragel
      Shipping Corporation

     

    2008

    

    Dear
      Sirs,

     

    Drawdown
      Notice

     

    We
      refer
      to the Loan Agreement dated
                         2008
      made between ourselves and yourselves (the “Agreement”).

     

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

     

    Pursuant
      to Clause 4 of the Agreement, we irrevocably request that you advance a Drawing
      in the sum of [       ]
      to us
      on 200  , which is a Business Day, by paying the amount of the advance
      to
      [                      ].

     

    We
      warrant that the representations and warranties contained in Clause 12.1 of
      the
      Agreement are true and correct at the date of this Drawdown Notice and will
      be
      true and correct on         200 , that
      no Default has occurred and is continuing, and that no Default will result
      from
      the advance of the sum requested in this Drawdown Notice.

     

    We
      select
      the period of
      [            ]
      months as the Interest Period in respect of the said Drawing.

     

    Yours
      faithfully

    
 

    
      
        

      

    

    For
      and
      on behalf of

    

    Efragel
      Shipping Corporation

    
       

      
        
           

        

          58

          
            

          

        

        
           

        

      

    
     

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

    
      
      

       

      
        	
                SIGNED
                  by

                
                  duly
                    authorised for and on behalf

                  
                    of
                      EFRAGEL SHIPPING

                    
                      CORPORATION

                    

                  

                

              	
                
                  )

                  
                    )

                    
                      )

                      
                        )

                      

                    

                  

                

              	
                

              
	 	 	 
	 	 	 
	 	 	 
	
                SIGNED
                  by

                
                  duly
                    authorised for and on behalf

                  
                    of
                      DnB NOR BANK ASA

                  

                

              	
                
                  )

                  
                    )

                    
                      )

                    

                  

                

              	
                
                  

                

              

      

    

    
       

    

    
      
         

      

      
        59c52273_ex10-28.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 10.28

DATED 17 APRIL 2008 

AVSTES SHIPPING CORPORATION 

(as Borrower) 

-and-

DnB NOR BANK ASA

(as Lender) 

____________________________________ 

US$36,000,000 SECURED

MULTI-CURRENCY REDUCING REVOLVING

CREDIT FACILITY AGREEMENT

____________________________________ 

m.v. “VASSOS”

STEPHENSON HARWOOD

One St. Paul’s Churchyard 

London EC4M 8SH 

Tel: 020 7329 4422

Fax: 020 7329 7100 

Ref: 04.134 

	   	   	   	   	
   
	 	 	 	 	 
	
CONTENTS  
	   	   	   	   	
Page  
	 	 	 	 	 
	
1  	   	
Definitions and Interpretation  	   	
1  
	 	 	 	 	 
	
2  	   	
The Loan and its Purpose  	   	
13  
	 	 	 	 	 
	
3  	   	
Conditions of Utilisation  	   	
13  
	 	 	 	 	 
	
4  	   	
Advance  	   	
15  
	 	 	 	 	 
	
5  	   	
Currency  	   	
16  
	 	 	 	 	 
	
6  	   	
Repayment  	   	
16  
	 	 	 	 	 
	
7  	   	
Prepayment  	   	
17  
	 	 	 	 	 
	
8  	   	
Interest  	   	
18  
	 	 	 	 	 
	
9  	   	
Indemnities  	   	
21  
	 	 	 	 	 
	
10  	   	
Fees  	   	
26  
	 	 	 	 	 
	
11  	   	
Security and Application of Moneys  	   	
26  
	 	 	 	 	 
	
12  	   	
Representations  	   	
32  
	 	 	 	 	 
	
13  	   	
Undertakings and Covenants  	   	
35  
	 	 	 	 	 
	
14  	   	
Events of Default  	   	
43  
	 	 	 	 	 
	
15  	   	
Assignment and Sub-Participation  	   	
49  
	 	 	 	 	 
	
16  	   	
Set-Off  	   	
50  
	 	 	 	 	 
	
17  	   	
Payments  	   	
50  
	 	 	 	 	 
	
18  	   	
Notices  	   	
52  
	 	 	 	 	 

	
19  	   	
  Partial Invalidity  	   	
    53      

	 	 	 	 	 
	
20  	   	
  Remedies and Waivers  	   	
    54      

	 	 	 	 	 
	
21  	   	
  Miscellaneous  	   	
    54      

	 	 	 	 	 
	
22  	   	
  Law and Jurisdiction  	   	
    55      

	   
	
SCHEDULE 1: Conditions Precedent and Subsequent  	   	
    57      

	 	 	 
	   	   	
Part I:  	
Conditions precedent  	   	
    57      

	 	 	 	 	 	 
	   	   	
Part II:    	
Conditions subsequent  	   	
    62      

	 	 	 	 	 	 
	
SCHEDULE 2: Calculation of Mandatory Cost  	   	
    63      

	 	 	 
	
SCHEDULE 3: Form of Drawdown Notice  	   	
    66      

  

LOAN AGREEMENT 

Dated: 17 APRIL 2008 

BETWEEN:

 

	(1)    	AVSTES SHIPPING
            CORPORATION, a company incorporated
            under the laws of the Republic of Liberia whose registered office
            is at 80 Broad Street, Monrovia, Liberia (the
  “Borrower”); and 

	 	 
	(2)    	DnB NOR BANK
            ASA, acting through its office at 20
    St. Dunstan’s Hill, London EC3R 8HY, England (the “Lender”). 

	 	 
	WHEREAS:
	 
	(A)	  The
          Borrower is the registered owner of the Vessel which is registered
    under the flag of Cyprus. 

	 	 
	(B)	 The Lender has agreed to advance to the
        Borrower a secured multi-currency reducing revolving credit facility
        of up to thirty six million Dollars ($36,000,000) to provide the
    Borrower with working capital for general corporate purposes. 
	 	 
	IT IS AGREED as
    follows: 
	 
	1	Definitions
    and Interpretation

	 	 
	 	1.1	 
    	In this Agreement: 

       “Accounts”  means
      the Operating Account and the Cash Collateral Account. 

       “Account
            Charge” means the deed of charge referred
      to in Clause 11.1.3. 

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

1

 

	              	“Annex
            VI”  means Annex VI (Regulations for
            the Prevention of Air Pollution from Ships) to the International
            Convention for the Prevention of Pollution from Ships 1973 (as modified
            in 1978 and 1997). 

       “Assignment”   means
          the deed of assignment referred to in Clause 11.1.2. 

       “Availability
            Termination Date”  means three (3)
            months prior to the Final Maturity Date or such later date as the
      Lender may in its discretion agree. 

       “Break
            Costs”  means all sums payable by the
      Borrower from time to time under Clause 9.3. 

       “Broker”   means
          any one of Arrow Chartering (UK), Braemer Seascope Group, Clarksons
          PLC and Fearnleys and
  “Brokers”   means
  more than one of them. 

       “Business
            Day”  means a day (other than a Saturday
            or Sunday) on which banks are open for general business in New York
            and London and Tokyo (only if an amount in Japanese Yen is involved)
            and Zurich (only if an amount in Swiss Francs is involved) and any
            other financial centre which the Lender may consider appropriate
            for the operation of the provisions of this Agreement, and in the
            case of Euro, a day on which the Trans- European Automated Real Time
            Gross Settlement Express Transfer Payment System (TARGET) is operating. 

       “Cash
            Collateral Account”  means the bank
            account to be opened (if and when required) in the name of the Borrower
            with the Lender and designated “Avstes
            Shipping Corporation Cash Collateral Account”. 

       “Charters”   means
          the Existing Charters and any other time charter or other contact of
          employment in respect of the Vessel which shall not exceed thirteen
          (13) months duration without the prior written consent of the Lender
          and “Charter ” means
      either of them. 

    

2

 

	              	“Charterer”   means
          Daiichi Chuo Kisen Kaisha of Tokyo, Japan or any other charterer who
          has entered into or shall enter into a Charter and “Charterers ” means
          more than one of them. 

       “Converted”  means
            actually or notionally (as the case may require) converted by the
            Lender at the rate at which the Lender, in accordance with its usual
            practice, is able in the London Interbank market to purchase the
            Permitted Currency in which any part of the Loan is to be denominated
            with the Permitted Currency in which the Loan is then denominated,
            on the second Business Day before the value date for that conversion
            pursuant to Clause 5, and the words “Convert ”  and “Conversion”   shall
            be interpreted accordingly. 

         “Credit
              Support Document”  means any document
              described as such in the Master Agreement and, where the context
              permits, any other document referred to in any Credit Support Document
              which has the effect of creating an Encumbrance in favour of the
      Lender. 

         “Credit
              Support Provider”  means any person
      (other than the Borrower) described as such in the Master Agreement. 

         “Currency
              of Account”  means, in relation to
              any payment to be made to the Lender under a Finance Document,
              the currency in which that payment is required to be made by the
      terms of that Finance Document. 

         “Deed
              of Covenants”  means the deed of
      covenants referred to in Clause 11.1.1. 

         “Default”  means
            an Event of Default or any event or circumstance specified in Clause
            14.1 which would (with the expiry of a grace period, the giving of
            notice, the making of any determination under the Finance Documents
      or any combination of any of the foregoing) be an Event of Default. 

    

3

 

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

       “Dollars”   and “$”   each
          means available and freely transferable and convertible funds in lawful
          currency of the United States of America. 

       “Drawdown
            Date”  means the date on which a Drawing
      is advanced under Clause 4. 

       “Drawdown
            Notice”  means a notice substantially
      in the form set out in Schedule 3. 

       “Drawing”   means
          any one amount advanced or to be advanced pursuant to a Drawdown Notice
          or, where the context permits, the amount advanced and for the time
      being outstanding and “Drawings” means more than one of them. 

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

       “Encumbrance”   means
          a mortgage, charge, assignment, pledge, lien, or other security interest
          securing any obligation of any person or any other agreement or arrangement
          having a similar effect. 

       “Euro”  and “€”   means
          the single currency of the Participating Member States. 

 

4

 

	              	“Event
            of Default”  means any of the events
            or circumstances set out in Clause 14.1. 

       “Existing
            Charters”  means the Initial Charter
            and the Subsequent Charter, and “Existing
            Charter”  means either of them. 

       “Facility
            Period” means the period beginning
            on the date of this Agreement and ending on the date when the whole
            of the Indebtedness has been paid in full and the Security Parties
            have ceased to be under any further actual or contingent liability
      to the Lender under or in connection with the Finance Documents. 

       “Final
            Maturity Date”  means the date falling
            on the earlier of (a) ten (10) years from the date of this Agreement
      and (b) 31 May 2018. 

       “Finance
            Documents”  means this Agreement, the
            Master Agreement, the Security Documents and any other document designated
            as such by the Lender and the Borrower and
  “Finance Document”  means
  any one of them. 

       “Financial
            Indebtedness”  means any obligation
            for the payment or repayment of money, whether present or future,
      actual or contingent, in respect of: 

       (a) moneys borrowed;

       (b) any acceptance credit; 

       (c) any bond, note, debenture, loan
          stock or similar instrument; (d) any finance or capital lease; (e)
          receivables sold or discounted (other than on a non-recourse basis);
          (f) deferred payments for assets or services;

 

5 

 

	              	(g)
          any derivative transaction protecting against or benefiting from fluctuations
          in any rate or price (and, when calculating the value or any derivative
          transaction, only the marked to market value shall be taken into account);

       (h) any amount raised under any other
          transaction (including any forward sale or purchase agreement) having
          the commercial effect of a borrowing; 

       (i) any counter-indemnity obligation
          in respect of a guarantee, indemnity, bond, standby or documentary
          letter of credit or any other instrument issued by a bank or financial
          institution; and

       (j) the amount of any liability in
          respect of any guarantee or indemnity for many of the items referred
          to in paragraphs (a) to (i) above. 

       “IAPPC”  means
          a valid international air pollution prevention certificate for the
      Vessel issued under Annex VI. 

       “Indebtedness”   means
          the aggregate from time to time of: the amount of the Loan outstanding;
          all accrued and unpaid interest on the Loan; and all other sums of
          any nature (together with all accrued and unpaid interest on any of
          those sums) payable to the Lender under all or any of the Finance Documents. 

       “Initial
            Charter”  means in respect of the Vessel
            the time charter dated 2 May 2007 as amended and supplemented by
            Addendum No. 1 dated 2 May 2007, each made between the Borrower and
      the Charterer. 

       “Insurances” means
          all policies and contracts of insurance (including all entries in protection
          and indemnity or war risks associations) which are from time to time
          taken out or entered into in respect of or in connection with the Vessel
      or her increased value or the Earnings and (where the 

    

6

 

  context permits) all benefits under such contracts and policies, including
    all claims of any nature and returns of premium.
  

   “Interest
        Payment Date”  means each date for the
        payment of interest in accordance with Clause 8.7. 

   “Interest
        Period”  means each period for the determination
        and payment of interest selected by the Borrower or agreed or selected
        by the Lender pursuant to Clause 8. 

   “ISM Code”  means
      the International Management Code for the Safe Operation of Ships and for
      Pollution Prevention. 

   “ISM Company”  means,
      at any given time, the company responsible for the Vessel’s compliance
  with the ISM Code under paragraph 1.1.2 of the ISM Code. 

   “ISPS” Code”  means
      the International Ship and Port Facility Security Code. 

   “ISPS Company”  means,
      at any given time, the company responsible for the Vessel’s compliance
      with the ISPS Code. 

   “ISSC”   means
      a valid international ship security certificate for the Vessel issued under
      the ISPS Code. 

   “LIBOR” means: 

   (a) the applicable Screen Rate; or 

   (b) (if no Screen Rate is available for
      any Interest Period) the arithmetic mean of the rates (rounded upwards
      to four decimal places) quoted to the Lender in the London interbank market,

   at 11.00 a. m. two (2) Business Days before
      the first day of the relevant Interest Period for the offering of deposits
      in Dollars or its equivalent in a 

7

 

  Permitted Currency in an amount comparable to the Loan (or any relevant part
    of the Loan) and for a period comparable to the relevant Interest Period.
   “Loan”   means
      the aggregate amount advanced or to be advanced by the Lender to the Borrower
      under Clause 4 or, where the context permits, the amount advanced and for
      the time being outstanding. 

   “Management
        Agreement”  means the agreement(s) for
        the commercial and/or technical management of the Vessel between the
  Borrower and the Managers. 

   “Managers”   means
      Safety Management Overseas S. A. , or such other commercial and/or technical
      managers of the Vessel nominated by the Borrower as the Lender may approve. 

   “Mandatory
        Cost”  means the percentage rate per annum
  calculated by the Lender in accordance with Schedule 2. 

   “Margin”  means
  zero point eighty per cent (0.80%) per annum. 

   “Master Agreement”  means
      any ISDA Master Agreement (or any other form of master agreement relating
      to interest or currency exchange transactions) entered into between the
      Lender and the Borrower during the Facility Period, including each Schedule
      to any Master Agreement and each Confirmation exchanged pursuant to any
  Master Agreement. 

   “Maximum Amount”  means
      thirty six million Dollars ($36,000,000) reduced from time to time
  in accordance with Clause 3.4 and/or Clause 7.4 and/or Clause 8.9.5. 

   “Mortgage” means
      the first priority statutory mortgage referred to in Clause 11.1.1 together
      with the Deed of Covenants. 

8

 

“Mortgagee’s Insurances”  means
  all policies and contracts of mortgagee’s interest insurance from time to time
  taken out by the Lender in relation to the Vessel. 
  

   “Operating
        Account”  means the bank account
        opened in the name of the Managers with the Lender and designated “Safety
        Management Overseas S. A. -Operating Account” with account number
        60204001. 

   “Participating
        Member States”  means any member
        state of the European Community that adopts or has adopted the Euro as
        its lawful currency in accordance with legislation of the European Community
        relating to Economic and Monetary Union. 

   “Permitted
        Currency”  means Japanese Yen, Swiss
        Francs, Euro and Dollars. 

   “Reduction
        Date”  means each date falling at
        consecutive six monthly intervals after the first Drawdown Date. 

   “Relevant
        Documents”  means the Finance Documents,
        the Management Agreement and the Managers’ confirmation specified
        in Part I of Schedule 1. 

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

   “Screen
        Rate”  means
      in relation to LIBOR, the British Bankers’ Association Interest Settlement
      Rate for the relevant currency and period displayed on the appropriate
      page of the Reuters screen. If the agreed page is replaced or the service
      ceases to be available, the Lender may specify another page or service
      displaying the appropriate rate after consultation with the Borrower. 

9

“Security  Documents”  means the Mortgage, the Deed of Covenants, the Assignment, the Account Charge, any other Credit Support Documents or (where the context permits) any
one or more of them and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and “Security  Document”  means any one of them.  “Security Parties”  means
  the Borrower and any other Credit Support Provider and any other person who
  may at any time during the Facility Period be liable for, or provide security
  for, all or any part of the Indebtedness, and “Security
  Party” means any one of them.  “SMC”   means
      a valid safety management certificate issued for the Vessel by or on behalf
      of the Administration under paragraph 13.7 of the ISM Code. 

   “SMS”   means
      a safety management system for the Vessel developed and implemented in
      accordance with the ISM Code. 

   “Subsequent
        Charter”  means in respect of the Vessel,
        the time charter dated 20 September 2007 made between the Borrower and
  the Charterer. 

   “Swiss Francs”  and “SFr”  means
      available and freely transferable and convertible funds in non-resident
  currency of Switzerland. 

   “Tax”   means
      any tax, levy, impost, duty or other charge or withholding of a similar
      nature (including any penalty or interest payable in connection with any
      failure to pay or any delay in paying any of the same).

   “Total Loss”  means: 

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

10

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

  
	 	 	 
	 	 	
(c) the capture, seizure, arrest, detention or confiscation of the Vessel by any government or by persons acting or purporting to act on behalf of any government, unless the Vessel is released and returned to the
possession of the Borrower within one month after the capture, seizure, arrest, detention or confiscation in question.

  
	 	 	 
	 	 	
“Transaction” means a transaction entered into between the Lender and the Borrower governed by the Master Agreement.

  
	 	 	 
	 	 	
“Vessel” means the approximately 76, 015 dwt panamax dry bulk carrier vessel “VASSOS” with IMO
number 9256872 which was built in 2004 and which is registered in the ownership of the Borrower under the laws and flag of the Republic of Cyprus together with everything now or in the future belonging to her on board and ashore.

  
	 	 	 
	 	 	
“Japanese Yen” and “Y” means available and freely transferable and convertible funds in
non-resident currency of Japan.

  
	 	 	 
	 	
1.2        	
In this Agreement:
  
	 	 	 
	         	 	
1.2.1        	
words denoting the plural number include the singular and vice versa;
  
	 	 	 	 
	 	 	
1.2.2        	
words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa;
  
	 	 	 	 
	 	 	
1.2.3        	
references to Recitals, Clauses and Schedules are references to recitals, clauses and schedules to or of this Agreement;
  

11

	 	 	
1.2.4 

  	references to this Agreement include the Recitals and the Schedules;
	 	 	 
	 	 	
1.2.5 

  	the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Agreement;
	 	 	 
	 	 	
1.2.6 

  	references to any document (including, without limitation, to all or any of the Relevant Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or
replaced from time to time;
	 	 	 
	 	 	
1.2.7 

  	references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re enacted;
	 	 	 
	 	 	
1.2.8 

  	references to the Lender include its successors, transferees and assignees;
	 	 	 
	 	 	
1.2.9

  	a time of day (unless otherwise specified) is a reference to London time; and
	 	 	 
	         	 	
1.2.10 

  	words and expressions defined in the Master Agreement, unless the context otherwise requires, have the same meaning.
	 	 	 
	 	
1.3        	
Offer letter
  
	 	 	 
	 	 	
This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between the Lender and the Borrower or their representatives prior to
the date of this Agreement.

  
	 	 	 

12

	
2        	
The Loan and its Purpose
  
	 	 
	 	
2.1        	
Amount Subject to the terms of this Agreement, the Lender agrees to make available to the Borrower a revolving credit facility in an aggregate amount not exceeding the Maximum
Amount at any one time.
  
	 	 	 
	 	
2.2        	
Purpose The Borrower shall apply the Loan for the purpose referred to in Recital (B).
  
	 	 	 
	 	
2.3        	
Monitoring The Lender shall not be bound to monitor or verify the application of any amount borrowed under this Agreement.
  
	 	 	 
	
3        	
Conditions of Utilisation
  
	 	 
	 	
3.1        	
Conditions precedent The Borrower is not entitled to have any Drawing advanced unless the Lender has received all of the documents and other evidence listed in Part I of Schedule
1.
  
	 	 	 
	 	
3.2        	
Further conditions precedent The Lender will only be obliged to advance a Drawing if on the date of the Drawdown Notice and on the proposed Drawdown Date:
  
	 	 	 
	 	 	
3.2.1        	
no Default is continuing or would result from the advance of that Drawing; and
  
	 	 	 	 
	 	 	
3.2.2        	
the representations made by the Borrower under Clause 12 are true in all material respects.
  
	 	 	 	 
	 	
3.3        	
Drawing limit The Lender will only be obliged to advance a Drawing if:
  
	 	 	 
	 	 	
3.3.1        	
no other Drawing has been made on the same Business Day;
  
	 	 	 	 
	 	 	
3.3.2        	
that Drawing is not less than one million Dollars ($1,000,000) or, if in excess of one million Dollars ($1,000,000), integral multiples of five hundred thousand Dollars ($500,000); and
  

13

	         	 	
3.3.3        	
that Drawing will not increase the outstanding amount of the Loan to a sum in excess of the Maximum Amount.
  
	 	 	 	 
	 	
3.4        	
Reduction of Maximum Amount The Maximum Amount:
  
	 	 	 
	 	 	
3.4.1        	
shall be reduced by twenty (20) reduction amounts, the first nineteen (19) reduction amounts on each of the Reduction Dates, each reduction amount in the amount of nine hundred thousand Dollars ($900,000) and
the final reduction amount in the amount of eighteen million nine hundred thousand Dollars ($18,900,000) (comprising of a reduction amount of nine hundred thousand Dollars ($900,000) and a balloon reduction of eighteen million Dollars
($18,000,000)), the first Reduction Date being the date which is six (6) calendar months from the date of this Agreement and subsequent Reduction Dates being at consecutive intervals of six (6) calendar months thereafter, with the last Reduction
Date being on the Final Maturity Date; and
  
	 	 	 	 
	 	 	
3.4.2        	
may (in addition to any reduction required under Clause 3.4.1) be reduced by the Borrower by five hundred thousand Dollars ($500,000) or an integral multiple of that amount with effect from any Business Day by
written notice to the Lender given not fewer than fourteen (14) days prior to that Business Day, which notice shall be irrevocable. Any voluntary reduction in the Maximum Amount shall be in addition to, and without prejudice to, the mandatory
reductions in the Maximum Amount made pursuant to Clause 3.4.1 and may not be reversed. Any reduction under this Clause 3.4.2 shall satisfy the obligations under Clause 3.4.1 in order of maturity. Amounts repaid by the Borrower pursuant to this
Clause shall not be available for reborrowing.
  
	 	 	 	 
	 	
3.5        	
Conditions subsequent The Borrower undertakes to deliver or to cause to be delivered to the Lender on, or as soon as practicable after, the first
  

14

	 	
Drawdown Date the additional documents and other evidence listed in Part II of Schedule 1.

  
	 	 
	 	
3.6        	
No Waiver If the Lender in its sole discretion agrees to advance a Drawing to the Borrower before all of the documents and evidence required by Clause 3.1 have been delivered to or
to the order of the Lender, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Lender no later than the date specified by the Lender.
  
	 	 	 
	 	 	
The advance of a Drawing under this Clause 3.6 shall not be taken as a waiver of the Lender’s right to require production of all the documents and evidence required by Clause 3.1.

  
	 	 	 
	 	
3.7        	
Form and content All documents and evidence delivered to the Lender under this Clause 3 shall:
  
	 	 	 
	 	 	
3.7.1        	
be in form and substance acceptable to the Lender;
  
	 	 	 	 
	 	 	
3.7.2        	
if required by the Lender, be certified, notarised, legalised or attested in a manner acceptable to the Lender; and
  
	 	 	 	 
	 	 	
3.7.3        	
if copies, be certified as true and complete copies by a director or the secretary or the legal advisor or a duly authorised attorney-in-fact of the Borrower.
  
	 	 	 	 
	
4        	
Advance
  
	 	 
	 	
The Borrower may request a Drawing to be advanced in one amount on any Business Day prior to the Availability Termination Date by delivering to the Lender a duly completed Drawdown Notice not more than ten (10) and
not fewer than three (3) Business Days before the proposed Drawdown Date.

  
	 	 

15

	
5        	
Currency
  
	 	 
	 	
5.1        	
Conversion The Borrower may Convert all or any part of the Loan into a Permitted Currency not later than five (5) Business Days before the Drawdown Date or at any time during the
Facility Period, subject to there being no Event of Default which is continuing and subject to the Permitted Currency being available to the Lender. Upon conversion, that part of the Loan shall remain denominated in, and shall be repayable in, the
Permitted Currency until the end of the relevant Interest Payment Date. Clause 3.4 shall be amended so that the Maximum Amount of the Loan shall be reduced in the Permitted Currency or Permitted Currencies selected under this Clause, provided that
the Reduction Dates specified in Clause 3.4 shall not be changed.
  
	 	 	 
	 	
5.2        	
Indemnity The Borrower shall indemnify the Lender from time to time on demand against all Break Costs, other losses, costs, claims, damages and expenses which the Lender may from
time to time suffer, incur or sustain by reason of the Lender agreeing to and/or implementing the terms of this Clause (including, without limitation, all costs and expenses incurred by the Lender in effecting any conversion).
  
	 	 	 
	
6        	
Repayment
  
	 	 
	 	
6.1        	
Repayment of each Drawing The Borrower agrees to repay each Drawing to the Lender on the last day of the Interest Period in respect of that Drawing. On the Final Maturity Date the
Borrower shall repay to the Lender all amounts then outstanding under or pursuant to this Agreement.
  
	 	 	 
	 	 	
Without limitation to the repayments required by Clause 3.4, in addition the Borrower may repay any Drawing in whole or in part in integral multiples of five hundred thousand Dollars ($500,000) (or the
equivalent in the Permitted Currency in which the Drawing in question is then denominated) and no repayment shall be made in an amount which is less than one million Dollars ($1,000,000) (or the equivalent in the Permitted

  
	 	 	 

16

	 	 	
Currency in which the Drawing in question is then denominated) (or as otherwise may be agreed by the Lender) provided that it has first given to the Lender not fewer than two (2) Business Days’ prior written notice
expiring on a Business Day of its intention to do so. Any notice pursuant to this Clause once given shall be irrevocable and shall oblige the Borrower to make the repayment referred to in the notice on the Business Day specified in the notice,
together with all interest accrued on the amount repaid up to and including that Business Day and any repaid amount shall not be available for reborrowing.

  
	 	 
	
7        	
Prepayment
  
	 	 
	 	
7.1        	
Illegality If it becomes unlawful in any jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain the Loan:
  
	 	 	 
	 	 	
7.1.1        	
the Lender shall promptly notify the Borrower of that event; and
  
	 	 	 	 
	 	 	
7.1.2        	
the Borrower shall repay any Drawing on the last day of its current Interest Period or, if earlier, the date specified by the Lender in the notice delivered to the Borrower (being no earlier than the last day of
any applicable grace period permitted by law).
  
	 	 	 	 
	 	
7.2        	
Voluntary prepayment of Loan The Borrower may prepay the whole or any part of a Drawing (but, if in part, being an amount that reduces that Drawing by a minimum amount of five
hundred thousand Dollars ($500,000) or an integral multiple of that amount (or as otherwise may be agreed by the Lender) provided that it gives the Lender not less than fourteen (14) Business Days’ (or such shorter period of the notice as the
Lender may agree) prior notice. Amounts prepaid by the Borrower pursuant to this Clause shall be available for reborrowing in accordance with Clause 3 prior to the Availability Termination Date. Any prepayment
  

17

	 	 	
under this Clause 7.2 shall satisfy the obligations under Clause 6.1 in order of maturity.

  
	 	 
	 	
7.3        	
Mandatory prepayment on sale or Total Loss Upon the sale or Total Loss of the Vessel, the Maximum Amount shall reduce to zero and the Borrower shall repay the Indebtedness in full,
in the case of a sale of the Vessel, by not later than the date of the sale of the Vessel or, in the case of a Total Loss, by not later than the date falling one hundred and eighty (180) days from the date of the casualty giving rise to the Total
Loss (or such longer period as the Lender may in its discretion agree). Amounts prepaid by the Borrower pursuant to this Clause shall not be available for reborrowing.
  
	 	 	 
	 	
7.4        	
Mandatory prepayment on reduction of Maximum Amount If the Maximum Amount is reduced in accordance with Clause 3.4 to an amount which is less than the aggregate amount of the
Drawings then outstanding, the Borrower shall, simultaneously with that reduction, prepay one or more outstanding Drawings to the extent required to ensure that the aggregate amount of the Drawings outstanding does not exceed the reduced Maximum
Amount.
  
	 	 	 
	 	
7.5        	
Restrictions Any notice of prepayment given under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates
upon which the relevant prepayment is to be made and the amount of that prepayment.
  
	 	 	 
	 	 	
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

  
	 	 	 
	
8        	
Interest
  
	 	 
	 	
8.1        	
Interest Periods The period during which each Drawing shall be outstanding under this Agreement shall be an Interest Period of one (1),
  

18

	        	 	
three (3), six (6), nine (9) or twelve (1-2) months’ duration, as selected by the Borrower in the Drawdown Notice in respect of the Drawing in question, or such other duration as may be agreed by the
Lender.

  
	 	 	 
	 	
8.2        	
Beginning and end of Interest Periods Each Interest Period shall start on the Drawdown Date of the Drawing in question and end on the date which numerically corresponds to that
Drawdown Date in the relevant calendar month except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Business Day in that month.
  
	 	 	 
	 	
8.3        	
Interest Periods to meet Maturity Date If an Interest Period for a Drawing would otherwise expire after the Maturity Date, the Interest Period for that Drawing shall expire on the
Maturity Date.
  
	 	 	 
	 	
8.4        	
Non Business Days If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).
  
	 	 	 
	 	
8.5        	
Interest rate During each Interest Period interest shall accrue on the relevant Drawing at the rate determined by the Lender to be the aggregate of (a) the Margin, (b) LIBOR and (c)
the Mandatory Cost, if any.
  
	 	 	 
	 	
8.6        	
Failure to select Interest Period If the Borrower at any time fails to select or agree an Interest Period in accordance with Clause 8.1, the interest rate applicable shall be the
rate determined by the Lender in accordance with Clause 8.5 for an Interest Period of such duration (not exceeding six months) as the Lender may select.
  
	 	 	 
	 	
8.7        	
Accrual and payment of interest Interest shall accrue from day to day, shall be calculated on the basis of a 360 day year and the actual number of days elapsed (or, in any
circumstance where market practice differs, in accordance with the prevailing market practice) and shall be paid by the
  
	 	 	 

19

	        	 	
Borrower to the Lender on the last day of each Interest Period and, if the Interest Period is longer than six (6) months, on the dates falling at six (6) monthly intervals after the first day of that Interest
Period.

  
	 	 	 
	 	
8.8        	
Default interest If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to
the date of actual payment (both before and after judgment) at a rate which is one per cent (1%) higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Drawing in the currency of
the overdue amount for successive Interest Periods, each selected by the Lender (acting reasonably). Any interest accruing under this Clause 8.8 shall be immediately payable by the Borrower on demand by the Lender.
  
	 	 	 
	 	 	
If unpaid, any such interest will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

  
	 	 	 
	 	
8.9        	
Changes in market circumstances If at any time the Lender determines (which determination shall be final and conclusive and binding on the Borrower) that, by reason of changes
affecting the London interbank market, adequate and fair means do not exist for determining the rate of interest on a Drawing for any Interest Period:
  
	 	 	 
	 	 	
8.9.1        	
the Lender shall give notice to the Borrower of the occurrence of such event; and
  
	 	 	 	 
	 	 	
8.9.2        	
the rate of interest on the relevant Drawing for that Interest Period shall be the rate per annum which is the sum of:
  
	 	 	 	 
	 	 	 	
(a)        	
the Margin; and
  
	 	 	 	 	 
	 	 	 	
(b)        	
the rate which expresses as a percentage rate per annum the cost to the Lender of funding the relevant Drawing from whatever source it may reasonably select; and
  
	 	 	 	 	 

20

	 	 	
(c) the Mandatory Cost, if any,

  
	 	 	 
	 	 	
PROVIDED THAT if the resulting rate of interest is not acceptable to the Borrower:

  
	 	 	 
	 	 	
8.9.3 

  	the Lender will negotiate with the Borrower in good faith with a view to modifying this Agreement to provide a substitute basis for determining the rate of interest which is financially a substantial
equivalent to the basis provided for in this Agreement;
	 	 	 
	 	 	
8.9.4 

  	any substitute basis agreed pursuant to Clause 8.9.3 shall be binding on the parties to this Agreement; and
	 	 	 
	 	 	
8.9.5 

  	if, within thirty (30) days of the giving of the notice referred to in Clause 8.9.1, the Borrower and the Lender fail to agree in writing on a substitute basis for determining the rate of interest in respect
of the relevant Drawing, the Lender shall cease to be obliged to advance that Drawing, but, if it has already been advanced, the Borrower will immediately prepay it, together with any Break Costs, and the Maximum Amount shall be reduced by the
amount of that Drawing.
	 	 	 
	 	
8.10        	
Determinations conclusive The Lender shall promptly notify the Borrower of the determination of a rate of interest under this Clause 8 and each such determination shall (save in the
case of manifest error) be final and conclusive.
  
	 	 	 
	
9        	
Indemnities
  
	 	 
	 	
9.1        	
Transaction expenses The Borrower will, within fourteen (14) days of the Lender’s written demand, pay the Lender the amount of all costs and expenses (including legal fees and Value
Added Tax or any similar or replacement tax if applicable) incurred by the Lender in connection with:
  
	 	 	 

21

	         	 	
9.1.1  

  	 the negotiation, preparation, printing, execution
    and registration of the Finance Documents (whether or not any Finance Document is actually executed or registered and whether or not a Drawing is advanced);
	 	 	 
	 	 	9.1.2	
 any amendment,
    addendum or supplement to any Finance Document
    (whether or not completed); and
  
	 	 	 	 
	 	 	9.1.3	
any other document which may at any time be
    required by the Lender to give effect to any Finance Document or which the Lender is entitled to call for or obtain under any Finance Document (including, without limitation, all premiums and other sums from time to time payable
by the Lender in relation to the Mortgagee’s Insurances).

  
	 	 	 	 
	 	
9.2        	
Funding costs The Borrower shall indemnify the Lender on the Lender’s written demand against all losses and costs incurred or sustained by the Lender if, for any reason, a Drawing
is not advanced to the Borrower after the relevant Drawdown Notice has been given to the Lender, or is advanced on a date other than that requested in the Drawdown Notice (unless, in either case, as a result of any default by the Lender).
  
	 	 	 
	 	
9.3        	
Break Costs The Borrower shall indemnify the Lender on the Lender’s written demand against all costs, tosses, premiums or penalties incurred by the Lender as a result of its
receiving any prepayment of all or any part of a Drawing (whether pursuant to Clause 7 or otherwise) on a day other than a Drawing (whether pursuant to Clause 7 or otherwise) on a day other than the last day of an Interest Period for that Drawing, or any other payment under or in relation to the Finance Documents on a day other than the due date for payment of the sum in question, including (without
limitation) any losses or costs incurred in liquidating or reemploying deposits from third parties acquired to effect or maintain all or any part of a Drawing, and any liabilities, expenses or losses incurred by the Lender in terminating or
reversing, or otherwise in connection with, any Transaction or any other
  

22

	         	 	
interest rate and/or currency swap, transaction or arrangement entered into by the Lender to hedge any exposure arising under this Agreement, or in terminating or reversing, or otherwise in connection with, any
open position arising under this Agreement or the Master Agreement.

  
	 	 	 
	 	
9.4        	
Currency indemnity In the event of the Lender receiving or recovering any amount payable under a Finance Document in a currency other than the Currency of Account, and if the amount
received or recovered is insufficient when Converted into the Currency of Account at the date of receipt to satisfy in full the amount due, the Borrower shall, on the Lender’s written demand, pay to the Lender such further amount in the Currency of
Account as is sufficient to satisfy in full the amount due and that further amount shall be due to the Lender as a separate debt under this Agreement.
  
	 	 	 
	 	
9.5        	
Increased costs (subject to Clause 9.6) If, by reason of the introduction of any law, or any change in any law, or any change in the interpretation or administration of any law, or
compliance with any request or requirement from any central bank or any fiscal, monetary or other authority occurring after the date of this Agreement:
  
	 	 	 
	 	 	
9.5.1        	
the Lender (or the holding company of the Lender) shall be subject to any Tax with respect to payment of all or any part of the Indebtedness (other than Tax on overall net income); or
  
	 	 	 	 
	 	 	
9.5.2        	
the basis of Taxation of payments to the Lender in respect of all or any part of the Indebtedness shall be changed; or
  
	 	 	 	 
	 	 	
9.5.3        	
any reserve requirements shall be imposed, modified or deemed applicable against assets held by or deposits in or for the account of or loans by any branch of the Lender; or
  
	 	 	 	 
	 	 	
9.5.4        	
the manner in which the Lender allocates capital resources to its obligations under this Agreement and/or the Master Agreement or any ratio (whether cash, capital adequacy, liquidity or otherwise) which the Lender is required or requested to maintain shall be affected; or
  
	 	 	 	 

23

	 	 	
9.5.5        	
there is imposed on the Lender (or on the holding company of the Lender) any other condition in relation to the Indebtedness or the Finance Documents;
  
	         	 	 	

  
	 	 	
and the result of any of the above shall be to increase the cost to the Lender (or to the holding company of the Lender) of the Lender making or maintaining the Loan, or its obligations under the Master Agreement
to cause the Lender to suffer (in its opinion) a material reduction in the rate of return on its overall capital below the level which it reasonably anticipated at the date of this Agreement and which it would have been able to achieve but for its
entering into this Agreement or the Master Agreement and/or performing its obligations under this Agreement or the Master Agreement, then, subject to Clause 9.6, the Lender shall notify the Borrower and the Borrower shall from time to time pay to the Lender on demand the amount which shall compensate the Lender (or the holding
company of the Lender) for such additional cost or reduced return. A certificate signed by an authorised signatory of the Lender setting out the amount of that payment and the basis of its calculation shall be submitted to the Borrower and shall be
conclusive evidence of such amount save for manifest error or on any question of law.

  
	 	 	 
	 	
9.6        	
Exceptions to increased costs Clause 9.5 does not apply to the extent any additional cost or reduced return referred to in that Clause is:
  
	 	 	 
	 	 	
9.6.1        	
compensated for by a payment made under Clause 9.10; or
  
	 	 	 	 
	 	 	
9.6.2        	
compensated for by a payment made under Clause 17.3; or
  
	 	 	 	 
	 	 	
9.6.3        	
compensated for by the payment of the Mandatory Cost; or
  

24

	 	 	
9.6.4        	
attributable to the wilful breach by the Lender (or the holding company of the Lender) of any law or regulation.
  
	 	 	 	 
	         	
9.7        	
Events of Default The Borrower shall indemnify the Lender from time to time on the Lender’s written demand against all losses, costs and liabilities incurred or sustained by the
Lender as a consequence of any Event of Default.
  
	 	 	 
	 	
9.8        	
Enforcement costs The Borrower shall pay to the Lender on the Lender’s written demand the amount of all costs and expenses (including legal fees) incurred by the Lender in
connection with the enforcement of, or the preservation of any rights under, any Finance Document including (without limitation) any losses, costs and expenses which the Lender may from time to time sustain, incur or become liable for by reason of
the Lender being mortgagee of the Vessel and/or a lender to the Borrower, or by reason of the Lender being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of the
Vessel.
  
	 	 	 
	 	
9.9        	
Other costs The Borrower shall pay to the Lender on the Lender’s written demand the amount of all sums which the Lender may pay or become actually or contingently liable for on
account of the Borrower in connection with the Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which the Lender may pay or guarantees which it may give in respect of the
Insurances, any expenses incurred by the Lender in connection with the maintenance or repair of the Vessel or in discharging any lien, bond or other claim relating in any way to the Vessel, and any sums which the Lender may pay or guarantees which
it may give to procure the release of the Vessel from arrest or detention.
  
	 	 	 
	 	
9.10        	
Taxes The Borrower shall pay all Taxes to which all or any part of the Indebtedness or any Finance Document may be at any time subject (other
  

25

	 	 	
than Tax on the Lender’s overall net income) and shall indemnify the Lender on the Lender’s written demand against all liabilities, costs, claims and expenses resulting from any omission to pay or delay in paying
any such Taxes.

  
	 	 
	
10        	
Fees
  
	 	 
	 	
10.1        	
Commitment fee The Borrower shall pay to the Lender a fee computed at the rate of zero point twenty per cent (0.20%) per annum on the undrawn Maximum Amount from time to time from
the date of this Agreement until the Availability Termination Date. The accrued commitment fee is payable on the last day of each successive period of three (3) months from the date of this Agreement and on the Availability Termination
Date.
  
	 	 	 
	 	
10.2        	
Arrangement fee The Borrower shall pay to the Lender on the date of this Agreement an arrangement fee in the amount of seventy two thousand Dollars ($72,000).
  
	 	 	 
	
11        	
Security and Application of Moneys
  
	 	 
	 	
11.1        	
Security Documents As security for the payment of the Indebtedness, the Borrower shall execute and deliver to the Lender or cause to be executed and delivered to the Lender the
following documents in such forms and containing such terms and conditions as the Lender shall require:
  
	 	 	 
	 	 	
11.1.1        	
a first priority Cypriot statutory mortgage over the Vessel together with a collateral deed of covenants;
  
	 	 	 	 
	 	 	
11.1.2        	
a first priority deed of assignment of the Insurances, Earnings and Requisition Compensation of the Vessel; and
  
	 	 	 	 
	 	 	
11.1.3        	
a first priority deed of charge over the Cash Collateral Account and all amounts from time to time standing to the credit of it.
  

26

	         	
11.2        	
Accounts The Borrower shall maintain the Accounts with the Lender for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or
under the Finance Documents.
  
	 	 	 
	 	
11.3        	
Earnings The Borrower shall procure that all Earnings and any Requisition Compensation are credited to the Operating Account.
  
	 	 	 
	 	
11.4        	
Application of Operating Account The Borrower shall procure that there is transferred from the Operating Account to the Lender:
  
	 	 	 
	 	 	
11.4.1        	
on the due date for repayment of each Drawing, the amount of that Drawing; and
  
	 	 	 	 
	 	 	 	 
	 	 	
11.4.2        	
on each Interest Payment Date in respect of a Drawing, the amount of interest due in respect of that Drawing,
  
	 	 	 	 
	 	 	
and the Borrower irrevocably authorises the Lender to make those transfers.

  
	 	 	 
	 	
11.5        	
Borrower’s obligations not affected If for any reason the amount standing to the credit of the Operating Account is insufficient to repay any Drawing or to make any payment of
interest when due, the Borrower’s obligation to repay that Drawing or to make that payment of interest shall not be affected.
  
	 	 	 
	 	
11.6        	
Release of surplus Any amount remaining to the credit of the Operating Account following the making of any transfer required by Clause 11.4 shall (unless a Default shall have
occurred and be continuing) be released to or to the order of the Borrower, subject to an amount of one hundred and fifty thousand Dollars ($150,000) remaining credited to the Operating Account at all times during the Facility Period.
  
	 	 	 
	 	
11.7        	
Relocation of Accounts At any time following the occurrence and during the continuation of a Default, the Lender may without the consent of the Borrower relocate either or both of
the Accounts to any other branch of
  
	 	 	 

27

	         	 	
the Lender, without prejudice to the continued application of this Clause 11 and the rights of the Lender under the Finance Documents.

  
	 	 	
        	

  
	 	
11.8        	
Application after acceleration From and after the giving of notice to the Borrower by the Lender under Clause 14.2, the Borrower shall procure that all sums from time to time
standing to the credit of either of the Accounts are immediately transferred to the Lender for application in accordance with Clause 11.14 and the Borrower irrevocably authorises the Lender to make those transfers.
  
	 	 	 
	 	
11.9        	
General application of moneys The Borrower, subject to Clause 11.10, irrevocably authorises the Lender to apply all sums which the Lender may receive:
  
	 	 	 
	 	 	
11.9.1        	
pursuant to a sale or other disposition of the Vessel or any right, title or interest in the Vessel; or
  
	 	 	 	 
	 	 	
11.9.2        	
by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or
  
	 	 	 	 
	 	 	
11.9.3        	
by way of transfer of any sum from either of the Accounts; or
  
	 	 	 	 
	 	 	
11.9.4        	
otherwise arising under or in connection with any Security Document,
  
	 	 	 	 
	 	 	
in or towards satisfaction, or by way of retention on account, of the Indebtedness, in such manner as the Lender may determine.

  
	 	 	 
	 	
11.10        	
Application of moneys on sale or Total Loss The Borrower irrevocably authorises the Lender to apply all sums which the Lender may receive pursuant to a sale by the Borrower of the
Vessel or a Total Loss in or towards satisfaction of the prepayment due and payable by virtue of that sale or Total Loss under Clause 7.3, but the Borrower’s obligation to make that prepayment shall not be affected if those sums are insufficient to
satisfy that obligation.
  
	 	 	 

28

	         	
11.11        	
Determination of market value For the purpose of the Security Documents, the market value of the Vessel shall be the average value certified by two of the Brokers, who shall report
directly to the Lender and shall be appointed by the Borrower not later than five (5) days after the Lender’s request for the Borrower to appoint such Brokers. In the event that the Borrower fails to appoint such Brokers within five (5) days after
the Lender’s request so to do or if a Broker appointed by the Borrower is not approved by the Lender and the Borrower fails to appoint an alternative Broker who is approved by the Lender within such five (5) day period, the Borrower irrevocably
authorises the Lender to appoint a Broker in its discretion to conduct such valuations. All valuations pursuant to this Clause shall be made on the basis of a sale of the Vessel for prompt delivery for cash at arm’s length on normal commercial terms
by a willing seller to a willing buyer and free of any existing charter or other contract of employment. The Borrower agrees to accept each valuation obtained pursuant to this Clause as conclusive evidence of the Vessel’s market value at the date of
such valuation.
  
	 	 	 
	 	
11.12        	
Cost of valuation The Borrower shall be liable for all costs and expenses incurred by the Lender in obtaining up to two valuations in each year of the Facility Period one upon each
anniversary of the date of this Agreement and the other six (6) months after the date of this Agreement and upon each anniversary of such date unless there is an Event of Default in which case the Borrower shall be liable for all costs and expenses
incurred by the Lender in obtaining any number of valuations required by it pursuant to Clause 11.11 and shall reimburse the Lender in respect of all such costs and expenses on demand.
  
	 	 	 
	 	
11.13        	
Provision of information The Borrower undertakes promptly to supply the Lender with such information concerning the Vessel’s condition, location and employment as the Lender may
reasonably require.
  
	 	 	 

29

	         	
11.14        	
Additional security If and so often as the aggregate of the market value of the Vessel (determined in accordance with Clause 11.11) plus the value of any additional security for the
time being provided to the Lender pursuant to this Clause shall be less than (a) one hundred per cent (100%) of the amount of the Loan, for the period commencing on the first Drawdown Date and ending on the third anniversary of the first Drawdown
Date or (b) one hundred and ten per cent (110%) of the amount of the Loan from the third anniversary of the first Drawdown Date until the sixth anniversary of the first Drawdown Date or (c) one hundred and twenty per cent (120%) of the amount of the
Loan thereafter, the Borrower will, within fourteen (14) days of the request of the Lender to do so, at the Borrower’s option:-
  
	 	 	 
	 	 	
11.14.1        	
pay to the credit of the Cash Collateral Account such amount as shall be necessary to establish that the aggregate of the market value of the Vessel (determined in accordance with Clause 11.11) plus the value of
any additional security for the time being provided to the Lender pursuant to this Clause shall be no less than (a) one hundred per cent (100%) of the amount of the Loan, for the period commencing on the first Drawdown Date and ending on the third
anniversary of the first Drawdown Date, or (b) one hundred and ten per cent (110%) of the amount of the Loan from the third anniversary of the First Drawdown Date until the sixth anniversary of the first Drawdown Date or (c) one hundred and twenty
per cent (120%) of the amount of the Loan thereafter; or
  
	 	 	 	 
	 	 	
11.14.2        	
give to the Lender other security in amount and form acceptable to the Lender in its discretion; or
  
	 	 	 	 
	 	 	
11.14.3        	
repay such amount of the Loan as shall be necessary to establish that the aggregate of the market value of the Vessel (determined
  

30

	         	 	
 

  	in accordance with Clause 11.11) plus the value
    of any additional security for the time being provided to the Lender pursuant
    to this Clause shall be no less than (a) one hundred per cent (100%) of the
    amount of the Loan, for the period commencing on the first Drawdown Date
    and ending on the third anniversary of the first Drawdown Date, or (b) one
    hundred and ten per cent (110%) of the amount of the Loan from the third
    anniversary of the first Drawdown Date until the sixth anniversary of the
    first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
    amount of the Loan thereafter.
	 	 	 
	 	 	
Clauses 7.2, 7.3 and 7.4 shall apply, mutatis mutandis, to any repayment made pursuant to this Clause and the value of any additional security provided pursuant to this Clause shall be determined by the Lender in
its discretion.

  
	 	 	 
	 	
11.15        	
Return of additional security If and so often as the aggregate of the market value of the Vessel (determined in accordance with Clause 11.11) plus the value of any additional
security for the time being provided to the Lender pursuant to Clause 11.14 shall exceed (a) one hundred per cent (100%) of the amount of the Loan, for the period commencing on the first Drawdown Date and ending on the third anniversary of the first
Drawdown Date, or (b) one hundred and ten per cent (110%) of the amount of the Loan from the third anniversary of the first Drawdown Date until the sixth anniversary of the first Drawdown Date or (c) one hundred and twenty per cent (120%) of the
amount of the Loan thereafter, then the Lender shall, within fourteen (14) days of the request of the Borrower to do so, release to the Borrower such portion of the amount standing to the credit of the Cash Collateral Account in accordance with
Clause 11.14 and/or such amount of the security referred to in Clause 11.14.2 as shall be required to ensure that the aggregate of the market value of the Vessel (determined as aforesaid) plus the value of any additional security for the
  

31

	 	 	
time being provided to the Lender pursuant to Clause 11.14 is equal to, but not less than (a) one hundred per cent (100%) of the amount of the Loan, for the period commencing on the first Drawdown Date and ending
on the third anniversary of the first Drawdown Date, or (b) one hundred and ten per cent (110%) of the amount of the Loan from the third anniversary of the first Drawdown Date until the sixth anniversary of the first Drawdown Date or (c) one hundred
and twenty per cent (120%) of the amount of the Loan thereafter.
  
	 	 
	
12        	
Representations
  
	 	 
	 	
12.1        	
Representations The Borrower makes the representations and warranties set out in this Clause 12.1 to the Lender on the date of this Agreement.
  
	 	 	 
	 	 	
12.1.1        	
Status Each Security Party (which is not an individual) which is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation and has the power to own its assets and carry on its business as it is being conducted.
  
	 	 	 	 	 
	 	 	
12.1.2        	
Binding obligations The obligations expressed to be assumed by each Security Party in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations.
  
	 	 	 	 
	 	 	
12.1.3        	
Non-conflict with other obligations The entry into and performance by each Security Party of, and the transactions contemplated by, the Finance Documents do not conflict
with:
  
	 	 	 	 
	 	 	 	
(a)  

  	any law or regulation applicable to that Security Party;
	 	 	 	 
	 	 	 	
(b)  

  	the constitutional documents of that Security Party; or
	 	 	 	 
	 	 	 	
(c)  

  	any document binding on that Security Party or any of its assets, and in borrowing the Loan, the Borrower is acting for its own account.

32

	                  	       	
12.1.4        	
Power and authority Each Security Party has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery
of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.
  
	 	 	 	 
	 	 	
12.1.5        	
Validity and admissibility in evidence All consents, licences, approvals, authorisations, filings and registrations required or desirable:
  
	 	 	 	 
	 	 	 	
(a)        	
to enable each Security Party lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party or to enable the Lender to enforce and exercise all its
rights under the Finance Documents; and
  
	 	 	 	 	 
	 	 	 	
(b)        	
to make the Finance Documents to which any Security Party is a party admissible in evidence in its jurisdiction of incorporation,
  
	 	 	 	 	 
	 	 	 	
have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part II of Schedule I.

  
	 	 	 	 
	 	 	
12.1.6        	
Governing law and enforcement The choice of English law as the governing law of any Finance Document expressed to be governed by English law will be recognised and enforced in the
jurisdiction of incorporation of each relevant Security Party, and any judgment obtained in England in relation to any such Finance Document will be recognised and enforced in the jurisdiction of incorporation of each relevant Security
Party.
  
	 	 	 	 
	 	 	
12.1.7        	
Deduction of Tax No Security Party is required under the law of its jurisdiction of incorporation to make any deduction for or
  

33

	                	         	 	
on account of Tax from any payment it may make under any Finance Document.

  
	 	 	 	 
	 	 	
12.1.8        	
No filing or stamp taxes Under the law of jurisdiction of incorporation of each relevant Security Party it is not necessary that the Finance Documents be filed, recorded or enrolled
with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
  
	 	 	 	 
	 	 	
12.1.9        	
No default No Event of Default is continuing or might reasonably be expected to result from the advance of a Drawing.
  
	 	 	 	 
	 	 	
12.1.10        	
No misleading information Any factual information provided by any Security Party to the Lender was true and accurate in all material respects as at the date is was
provided.
  
	 	 	 	 
	 	 	
12.1.11        	
Pari passu ranking The payment obligations of each Security Party under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
  
	 	 	 	 
	 	 	
12.1.12        	
No proceedings pending or threatened No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency have been started or (to the best of
the Borrower’s knowledge threatened) which, if adversely determined, might reasonably be expected to have a materially adverse effect on the business, assets, financial condition or credit worthiness of any Security Party.
  
	 	 	 	 
	 	 	
12.1.13        	
Disclosure of material facts The Borrower is not aware of any material facts or circumstances which have not been disclosed to
  
	 	 	 	 

34

	         	 	 	
the Lender and which might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the
Borrower.

  
	 	 	 
	 	 	
12.1.14        	
No established place of business in the UK or US No Security Party has an established place of business in the United Kingdom or the United States of America.
  
	 	 	 	 
	 	 	
12.1.15        	
Completeness of Relevant Documents The copies of any Relevant Documents provided or to be provided by the Borrower to the Lender in accordance with Clause 3 are, or will be, true
and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums
or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Lender.
  
	 	 	 	 
	 	
12.2        	
Repetition Each representation and warranty in Clause 12.1 is deemed to be repeated by the Borrower by reference to the facts and circumstances then existing on the date of each
Drawdown Notice and the first day of each Interest Period.
  
	 	 	 
	13	 Undertakings
    and Covenants
	 	 
	 	 	The undertakings and covenants
        in this Clause 13 remain in force for the duration of the Facility Period.

	 	 	 
	 	13.1      	Information Undertakings

35

	             	         	
13.1.1        	
Financial statements The Borrower or the Managers will supply to the Lender, on request within sixty (60) days of the end of each calendar year during the Facility Period the
unaudited management accounts for the Vessel prepared by the Managers showing the income and expenditure for the Vessel for such calendar year, with the first such accounts to be supplied by not later than 60 (sixty) days of the end of
2007.
  
	 	 	 	 
	 	 	
13.1.2        	
Information: miscellaneous The Borrower shall supply to the Lender:
  
	 	 	 	 
	 	 	 	
(a)        	
promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which might, if adversely
determined, have a materially adverse effect on the business, assets, financial condition or credit worthiness of that Security Party; and
  
	 	 	 	 	 
	 	 	 	
(b)        	
promptly, such further information regarding the financial condition, business and operations of any Security Party as the Lender may reasonably request including, without limitation, cash flow analyses and details
of the operating costs of the Vessel.
  
	 	 	 	 	 
	 	 	
13.1.3        	
Notification of default
  
	 	 	 	 
	 	 	 	
(a)        	
The Borrower shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
  
	 	 	 	 	 
	 	 	 	
(b)        	
Promptly upon a request by the Lender, the Borrower shall supply to the Lender a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default
is continuing,
  

36

	         	 	 	 	
specifying the Default and the steps, if any, being taken to remedy it).

  
	 	 	 	 
	 	 	
13.1.4        	
“Know your customer” checks If:
  
	 	 	 	 
	 	 	 	
(a)        	
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
  
	 	 	 	 	 
	 	 	 	
(b)        	
any change in the status of the Borrower 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,
  
	 	 	 	 	 
	 	 	 	
  obliges the Lender (or, in the case of (c) above, 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 (c) above, on behalf of any prospective new Lender) in order for the Lender (or, in the case of (c) above, 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.

	 	 	 	
        	

  
	 	
13.2        	
General undertakings
  
	 	 	 
	 	 	
13.2.1        	
Authorisations The Borrower shall promptly:
  
	 	 	 	 
	 	 	 	
(a)        	
obtain, comply with and do all that is necessary to maintain in full force and effect; and
  

37

	            	         	 	
(b)        	
supply certified copies to the Lender of, any consent, licence, approval or authorisation required under any law or regulation to enable each Security Party to perform its obligations under the Finance Documents to
which it is a party and to ensure the legality, validity, enforceability or admissibility in evidence in the jurisdiction of incorporation of each relevant Security Party of any Finance Document.
  
	 	 	 	 	 
	 	 	
13.2.2        	
Compliance with laws The Borrower shall comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its
obligations under the Finance Documents.
  
	 	 	 	 
	 	 	
13.2.3        	
Conduct of business The Borrower shall carry on and conduct its business in a proper and efficient manner, file all requisite tax returns and pay all tax which becomes due and
payable (except where contested in good faith).
  
	 	 	 	 
	 	 	
13.2.4        	
Evidence of good standing The Borrower will from time to time if requested by the Lender provide the Lender with evidence in form and substance satisfactory to the Lender that the
Security Parties and all corporate shareholders of any Security Party remain in good standing.
  
	 	 	 	 
	 	 	
13.2.5        	
Liquidity The Borrower will throughout the Facility Period maintain or procure that the Managers maintain in the Operating Account at all times a minimum positive account balance
free of any Encumbrances (other than in favour of the Lender) of not less than one hundred and fifty thousand Dollars ($150,000). Any undrawn amounts under this Agreement may be included for the purpose of this calculation and this calculation shall
  

38

	            	         	 	
exclude cash deposited with the Lender as security for any other facility or in connection with Clause 5.

  
	 	 	 	 
	 	 	
13.2.6        	
Negative pledge and no disposals The Borrower shall not create nor permit to subsist any Encumbrance or other third party rights over any of its present or future assets or
undertaking nor dispose of any those assets or of all or part of that undertaking.
  
	 	 	 	 
	 	 	
13.2.7        	
Merger The Borrower shall not without the prior written consent of the Lender enter into any amalgamation, demerger, merger or corporate reconstruction.
  
	 	 	 	 
	 	 	
13.2.8        	
Change of business The Borrower shall not without the prior written consent of the Lender make any substantial change to the general nature of its business from that carried on at
the date of this Agreement.
  
	 	 	 	 
	 	 	
13.2.9        	
No other business The Borrower shall not without the prior written consent of the Lender engage in any business other than the ownership, operation, chartering and management of the
Vessel.
  
	 	 	 	 
	 	 	
13.2.10        	
No place of business in UK or US The Borrower shall not have an established place of business in the United Kingdom or the United States of America at any time during the Facility
Period.
  
	 	 	 	 
	 	 	
13.2.11        	
No borrowings The Borrower shall not without the prior written consent of the Lender borrow any money (except for the Loan and unsecured Financial Indebtedness subordinated to the
Loan) nor incur any obligations under leases.
  
	 	 	 	 
	 	 	
13.2.12        	
No substantial liabilities Except in the ordinary course of business, the Borrower shall not without the prior written
  
	 	 	 	 

39

	            	         	 	
consent of the Lender incur any liability to any third party which is in the Lender’s opinion of a substantial nature.

  
	 	 	 	 
	 	 	
13.2.13        	
No loans or other financial commitments The Borrower shall not without the prior written consent of the Lender make any loan nor enter into any guarantee or indemnity or otherwise
voluntarily assume any actual or contingent liability in respect of any obligation of any other person.
  
	 	 	 	 
	 	 	
13.2.14        	
No dividends The Borrower shall not without the prior written consent of the Lender pay any dividends or make any other distributions to the shareholders or issue any new
shares.
  
	 	 	 	 
	 	 	
13.2.15        	
Inspection of records The Borrower will permit the inspection of its financial records and accounts from time to time by the Lender or its nominee.
  
	 	 	 	 
	 	 	
13.2.16        	
No change in Relevant Documents The Borrower shall procure that, without the prior written consent of the Lender, there shall be no termination of, alteration to, or waiver of any
term of, any of the Relevant Documents.
  
	 	 	 	 
	 	 	
13.2.17        	
No change in ownership or control of the Borrower or the Managers The Borrower shall not permit any change in its beneficial ownership and control and the beneficial ownership and
control of the Managers from that advised to the Lender at the date of this Agreement.
  
	 	 	 	 
	 	 	
13.2.18        	
No purchase of a vessel The Borrower shall not purchase any vessel or any shares in any vessel.
  
	 	 	 	 
	 	 	
13.2.19        	
No dealings with Master Agreement The Borrower shall not assign, novate or encumber or in any other way transfer any of its rights or obligations under the Master Agreement, nor
enter
  

40

	         	 	 	
into any interest rate exchange or hedging agreement with anyone other than the Lender.

  
	 	 	 
	 	 	
13.2.20        	
Charters The Borrower shall not without the prior written consent of the Lender enter into any Charter (other than the Existing Charters) and shall not extend or otherwise amend or
supplement a Charter without the prior written consent of the Lender.
  
	 	 	 	 
	 	
13.3        	
Vessel undertakings
  
	 	 	 
	 	 	
13.3.1        	
No sale of Vessel The Borrower shall not sell or otherwise dispose of the Vessel or any shares in the Vessel nor agree to do so without the prior written consent of the
Lender.
  
	 	 	 	 
	 	 	
13.3.2        	
No chartering after Event of Default Following the occurrence and during the continuation of an Event of Default the Borrower shall not without the prior written consent of the
Lender let the Vessel on charter or renew or extend any charter or other contract of employment of the Vessel (nor agree to do so).
  
	 	 	 	 
	 	 	
13.3.3        	
No change in management The Borrower shall procure that, without the prior written consent of the Lender, there shall be no termination of, alteration to, or waiver of any term of,
the Management Agreement and the Borrower shall not without the prior written consent of the Lender permit the Managers to sub- contract or delegate the commercial or technical management of the Vessel to any third party.
  
	 	 	 	 
	 	 	
13.3.4        	
Registration of Vessel The Borrower undertakes to maintain the registration of the Vessel under the flag stated in Recital (A) (or such other flag acceptable to the Lender in its
discretion) for
  

41

	            	         	 	
the duration of the Facility Period unless the Lender agrees otherwise in writing.

  
	 	 	 	 
	 	 	
13.3.5        	
Evidence of current COFR The Borrower will, if and for so long as the Vessel trades in the United States of America and Exclusive Economic Zone (as defined in the United States Oil
Pollution Act 1990), obtain, retain and provide the Lender with a copy of, a valid Certificate of Financial Responsibility for the Vessel under that Act and will comply strictly with the requirements of that Act.
  
	 	 	 	 
	 	 	
13.3.6        	
ISM Code compliance The Borrower will:
  
	 	 	 	 
	 	 	 	
(a)        	
procure that the Vessel remains for the duration of the Facility Period subject to a SMS;
  
	 	 	 	 	 
	 	 	 	
(b)        	
maintain a valid and current SMC for the Vessel throughout the Facility Period and provide a copy to the Lender;
  
	 	 	 	 	 
	 	 	 	
(c)        	
procure that the ISM Company maintains a valid and current DOC throughout the Facility Period and provide a copy to the Lender; and
  
	 	 	 	 	 
	 	 	 	
(d)        	
immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of the Vessel or of the DOC of the ISM Company.
  
	 	 	 	 	 
	 	 	
13.3.7        	
ISPS Code compliance The Borrower will:
  
	 	 	 	 
	 	 	 	
(a)        	
for the duration of the Facility Period comply with the ISPS Code in relation to the Vessel and procure that the Vessel and the ISPS Company comply with the ISPS
  
	 	 	 	 	
Code;

  

42

	 	 	 	
(b) 
  	maintain a valid and current ISSC for the Vessel throughout the Facility Period and provide a copy to the Lender; and
	 	 	 
	 	 	 	
(c)        	
immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
  
	 	 	 	 	 
	 	 	
13.3.8        	
Annex VI compliance The Borrower will:
  
	 	 	 	 
	 	 	 	
(a)        	
for the duration of the Facility Period comply with Annex VI in relation to the Vessel and procure that the Vessel’s master and crew are familiar with, and that the Vessel complies with, Annex VI;
  
	 	 	 	 	 
	 	 	 	
(b)        	
maintain a valid and current IAPPC for the Vessel throughout the Facility Period and provide a copy to the Lender; and
  
	 	 	 	 	 
	 	 	 	
(c)        	
immediately notify the Lender in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC.
  
	 	 	 	 	 
	
14        	
Events of Default
  
	 	 
	 	
14.1        	
Events of Default Each of the events or circumstances set out in this Clause 14.1 is an Event of Default.
  
	 	 	 
	 	 	
14.1.1        	
Non payment The Borrower does not pay on the due date any amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be
payable.
  
	 	 	 	 
	 	 	
14.1.2        	
Other obligations A Security Party or any other person (except the Lender) does not comply with any provision of any of the
  

43

	         	            	 	
Relevant Documents to which that Security Party or person is a party (other than as referred to in Clause 14.1.1).

  
	 	 	 	 
	 	 	
14.1.3        	
Misrepresentation Any representation, warranty or statement made or deemed to be repeated by a Security Party in any Finance Document or any other document delivered by or on behalf
of a Security Party under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be repeated.
  
	 	 	 	 
	 	 	
14.1.4        	
Cross default Any Financial Indebtedness of a Security Party:
  
	 	 	 	 
	 	 	 	
(a)        	
is not paid when due or within any originally applicable grace period; or
  
	 	 	 	 	 
	 	 	 	
(b)        	
is declared to be, or otherwise becomes, due and payable before its specified maturity as a result of an event of default (however described); or
  
	 	 	 	 	 
	 	 	 	
(c)        	
is declared by a creditor to be due and payable before its specified maturity as a result of such an event.
  
	 	 	 	 	 
	 	 	
14.1.5        	
Insolvency
  
	 	 	 	 
	 	 	 	
(a)        	
A Security Party is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations
with one or more of its creditors with a view to rescheduling any of its Financial Indebtedness.
  
	 	 	 	 	 
	 	 	 	
(b)        	
The value of the assets of a Security Party is less than its liabilities (taking into account contingent and prospective liabilities).
  

44

	            	         	 	
(c)        	
A moratorium is declared in respect of any Financial Indebtedness of a Security Party.
  
	 	 	 	 	 
	 	 	
14.1.6        	
Insolvency proceedings Any corporate action, legal proceedings or other procedure or step is taken for:
  
	 	 	 	 
	 	 	 	
(a)        	
the suspension of payments, a moratorium of any Financial Indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of
a Security Party;
  
	 	 	 	 	 
	 	 	 	
(b)        	
a composition, compromise, assignment or arrangement with any creditor of a Security Party;
  
	 	 	 	 	 
	 	 	 	
(c)        	
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of any Security Party or any of its assets; or
  
	 	 	 	 	 
	 	 	 	
(d)        	
enforcement of any Encumbrance over any assets of a Security Party,
  
	 	 	 	 	 
	 	 	 	
or any analogous procedure or step is taken in any jurisdiction.

  
	 	 	 	 
	 	 	
14.1.7        	
Creditors’ process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party.
  
	 	 	 	 
	 	 	
14.1.8        	
Change in ownership or control of the Borrower or the Managers There is any change in the beneficial ownership or control of the Borrower or the Managers from that advised to the
Lender by the Borrower at the date of this Agreement.
  

45

	            	         	
14.1.9        	
Repudiation A Security Party or any other person (except the Lender) repudiates any of the Relevant Documents to which that Security Party or person is a party or evidences an
intention to do so.
  
	 	 	 	 
	 	 	
14.1.10        	
Impossibility or illegality Any event occurs which would, or would with the passage of time, render performance of any of the Relevant Documents by a Security Party or any other
party to any such document impossible, unlawful or unenforceable by the Lender or a Security Party.
  
	 	 	 	 
	 	 	
14.1.11        	
Conditions subsequent Any of the conditions referred to in Clause 3.5 is not satisfied within the time reasonably required by the Lender.
  
	 	 	 	 
	 	 	
14.1.12        	
Revocation or modification of authorisation Any consent, licence, approval, authorisation, filing, registration or other requirement of any governmental, judicial or other public
body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable a Security Party or any other person (except the Lender) to comply with any of its obligations under any of the Relevant Documents is not
obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Lender considers is, or may be, prejudicial to the interests of the Lender, or ceases to remain in full force and effect.
  
	 	 	 	 
	 	 	
14.1.13        	
Curtailment of business A Security Party ceases, or threatens to cease, to carry on all or a substantial part of its business or, as a result of intervention by or under the
authority of any government, the business of a Security Party is wholly or partially curtailed or suspended, or all or a substantial part of the
  

46

	         	         	 	
assets or undertaking of a Security Party is seized, nationalised, expropriated or compulsorily acquired.

  
	 	 	 	 
	 	 	
14.1.14        	
Reduction of capital A Security Party reduces its authorised or issued or subscribed capital.
  
	 	 	 	 
	 	 	
14.1.15        	
Loss of Vessel The Vessel suffers a Total Loss or is otherwise destroyed, abandoned, confiscated, forfeited or condemned as prize, or a similar event occurs in relation to any other
vessel which may from time to time be mortgaged to the Lender as security for the payment of all or any part of the Indebtedness, except that a Total Loss, or event similar to a Total Loss in relation to any other vessel, shall not be an Event of
Default if:
  
	 	 	 	 
	 	 	 	
(a)        	
the Vessel or other vessel is insured in accordance with the Security Documents; and
  
	 	 	 	 	 
	 	 	 	
(b)        	
no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Lender in its discretion that any such refusal or dispute is likely to occur; and
  
	 	 	 	 	 
	 	 	 	
(c)        	
payment of all insurance proceeds in respect of the Total Loss is made in full to the Lender within one hundred and eighty (180) days of the occurrence of the casualty giving rise to the Total Loss in question or
such longer period as the Lender may in its discretion agree.
  
	 	 	 	 	 
	 	 	
14.1.16        	
Challenge to registration The registration of the Vessel or the Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or
priority of the Mortgage is contested.
  
	 	 	 	 

47

	                	
14.1.17        	
War The country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Lender in its discretion
considers that, as a result, the security conferred by the Security Documents is materially prejudiced.
  
	 	 	 
	 	
14.1.18        	
Master Agreement termination A notice is given by the Lender under section 6(a) of the Master Agreement, or by any person under section 6(b)(iv) of the Master Agreement, in either
case designating an Early Termination Date for the purpose of the Master Agreement, or the Master Agreement is for any other reason terminated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and
effect.
  
	 	 	 
	 	
14.1.19        	
Material adverse change Any event or series of events occurs which, in the opinion of the Lender, is likely to have a materially adverse effect on the business, assets, financial
condition or credit worthiness of a Security Party.
  
	 	 	 
	
14.2        	
Acceleration If an Event of Default is continuing the Lender may by notice to the Borrower cancel any part of the Maximum Amount not then advanced and:
  
	 	 
	 	
14.2.1        	
declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, whereupon they shall become immediately due and
payable; and/or
  
	 	 	 
	 	
14.2.2        	
declare that the Loan is payable on demand, whereupon it shall immediately become payable on demand by the Lender.
  

48

	
15        	
Assignment and Sub Participation
  
	 	 
	 	
15.1        	
Right to assign The Lender may, subject to the prior approval of the Borrower (such approval not to be unreasonably withheld) and subject to the Lender giving prior notice of such
intention to the Borrower, and without additional costs to the Borrower, assign or transfer all or any of its rights under or pursuant to the Security Documents to any other bank or financial institution, and may grant sub-participations in all or
any part of the Loan. The Lender may, without the prior approval of the Borrower, assign or transfer all or any of its rights under or pursuant to the Security Documents to any other branch of the Lender, and may grant sub- participations in all or
any part of the Loan.
  
	 	 	 
	 	
15.2        	
Borrower’s co-operation The Borrower will co-operate fully with the Lender in connection with any assignment, transfer or sub-participation; will execute and procure the execution
of such documents as the Lender may require in that connection; and irrevocably authorises the Lender to disclose to any proposed assignee, transferee or sub-participant (whether before or after any assignment, transfer or sub-participation and
whether or not any assignment, transfer or subparticipation shall take place) all information relating to the Security Parties, the Loan, the Relevant Documents and the Vessel which the Lender may in its discretion consider necessary or
desirable.
  
	 	 	 
	 	
15.3        	
Rights of assignee or transferee Any assignee or transferee of the Lender (unless limited by the express terms of the assignment or novation) take the benefit of every provision of
the Finance Documents benefitting the Lender.
  
	 	 	 
	 	
15.4        	
No assignment or transfer by the Borrower The Borrower may not assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
  

49

	
16        	
Set-Off
  
	 	 
	 	
16.1        	
The Lender may set off any matured obligation due from the Borrower under any Finance Document against any matured obligation owed by the Lender to the Borrower, regardless of the place of payment, booking branch
or currency of either obligation. If the obligations are in different currencies, the Lender may Convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set off.
  
	 	 	 
	 	
16.2        	
Master Agreement rights The rights conferred on the Lender by this Clause 16 shall be in addition to, and without prejudice to or limitation of, the rights of netting and set off
conferred on the Lender by the Master Agreement.
  
	 	 	 
	
17        	
Payments
  
	 	 
	 	
17.1        	
Payments Each amount payable by the Borrower under a Finance Document shall be paid to such account at such bank as the Lender may from time to time direct to the Borrower in the
Currency of Account and in such funds as are customary at the time for settlement of transactions in the relevant currency in the place of payment. Payment shall be deemed to have been received by the Lender on the date on which the Lender receives
authenticated advice of receipt, unless that advice is received by the Lender on a day other than a Business Day or at a time of day (whether on a Business Day or not) when the Lender in its discretion considers that it is impossible or
impracticable for the Lender to utilise the amount received for value that same day, in which event the payment in question shall be deemed to have been received by the Lender on the Business Day next following the date of receipt of advice by the
Lender.
  
	 	 	 
	 	
17.2        	
No deductions or withholdings Each payment (whether of principal or interest or otherwise) to be made by the Borrower under a Finance Document shall, subject only to Clause 17.3, be
made free and clear of and
  

50

	         	 	
without deduction for or on account of any Taxes or other deductions, withholdings, restrictions, conditions or counterclaims of any nature.

  
	 	 	 
	 	
17.3        	
Grossing up If at any time any law requires the Borrower to make any deduction or withholding from any payment, or to change the rate or manner in which any required deduction or
withholding is made, the Borrower will promptly notify the Lender and, simultaneously with making that payment, will pay to the Lender whatever additional amount (after taking into account any additional Taxes on, or deductions or withholdings from,
or restrictions or conditions on, that additional amount) is necessary to ensure that, after making the deduction or withholding, the Lender receives a net sum equal to the sum which the Lender would have received had no deduction or withholding
been made.
  
	 	 	 
	 	
17.4        	
Evidence of deductions If at any time the Borrower is required by law to make any deduction or withholding from any payment to be made by it under a Finance Document, the Borrower
will pay the amount required to be deducted or withheld to the relevant authority within the time allowed under the applicable law and will, no later than thirty (30) days after making that payment, deliver to the Lender an original receipt issued
by the relevant authority, or other evidence acceptable to the Lender, evidencing the payment to that authority of all amounts required to be deducted or withheld.
  
	 	 	 
	 	
17.5        	
Adjustment of due dates If any payment or transfer of funds to be made under a Finance Document, other than a payment of interest on a Drawing, or a payment under the Master
Agreement, shall be due on a day which is not a Business Day, that payment shall be made on the next succeeding Business Day (unless the next succeeding Business Day falls in the next calendar month in which event the payment shall be made on the
next preceding Business Day). Any such variation of time shall be taken into account in computing any interest in respect of that payment.
  

51

	 	
17.6        	
Control Account The Lender shall open and maintain on its books a control account in the name of the Borrower showing the advance of the Loan and the computation and payment of
interest and all other sums due under this Agreement and the Master Agreement. The Borrower’s obligations to repay the Loan and to pay interest and all other sums due under this Agreement and the Master Agreement shall be evidenced by the entries
from time to time made in the control account opened and maintained under this Clause 17.6 and those entries will, in the absence of manifest error, be conclusive and binding.
  
	 	 	 
	
18        	
Notices
  
	 	 
	 	
18.1        	
Communications in writing Any communication to be made under or in connection with this Agreement shall be made in writing and, unless otherwise stated, may be made by fax or
letter.
  
	 	 	 
	 	
18.2        	
Addresses The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party to this Agreement for any
communication or document to be made or delivered under or in connection with this Agreement are:
  
	 	 	 
	 	 	
18.2.1        	
in the case of the Borrower, c/o Safety Management Overseas S.A., 32 Avenue Karamanli, GR-166 0S Voula, Athens, Greece (telex no: 215050 answerback: SAFE GR, fax no: +30 210 895 6900) marked for the attention of Mr
George Papadopoulos; and
  
	 	 	 	 
	 	 	
18.2.2        	
in the case of the Lender, to the Lender at its address at the head of this Agreement (fax no: +44 207 626 5956 tel no: +44 207 621 6045) marked for the attention of: Shipping Department;
  
	 	 	 	 
	 	 	
or any substitute address, fax number, department or officer as either party may notify to the other by not less than five (5) Business Days’ notice.

  

52

	 	
18.3        	
Delivery Any communication or document made or delivered by one party to this Agreement to the other under or in connection this Agreement will only be effective:
  
	 	 	 
	 	 	
18.3.1        	
if by way of fax, when received in legible form; or
  
	 	 	 	 
	 	 	
18.3.2        	
if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;
  
	 	 	 	 
	 	 	
and, if a particular department or officer is specified as part of its address details provided under Clause 18.2, if addressed to that department or officer.

  
	 	 	 
	 	 	
Any communication or document to be made or delivered to the Lender will be effective only when actually received by the Lender.

  
	 	 	 
	 	
18.4        	
English language Any notice given under or in connection with this Agreement must be in English. All other documents provided under or in connection with this Agreement must
be:
  
	 	 	 
	 	 	
18.4.1        	
in English; or
  
	 	 	 	 
	 	 	
18.4.2        	
if not in English, and if so required by the Lender, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or
other official document.
  
	 	 	 	 
	
19        	
Partial Invalidity
  
	 	 
	 	
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

  

53

	
20        	
Remedies and Waivers
  
	 	 
	 	
No failure to exercise, nor any delay in exercising, on the part of the Lender, any right or remedy under a Finance Document shall operate as a waiver, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

  
	 	 
	
21        	
Miscellaneous
  
	 	 
	 	
21.1        	
No oral variations No variation or amendment of a Finance Document shall be valid unless in writing and signed on behalf of the Lender.
  
	 	 	 
	 	
21.2        	
Further Assurance If any provision of a Finance Document shall be invalid or unenforceable in whole or in part by reason of any present or future law or any decision of any court,
or if the documents at any time held by or on behalf of the Lender are considered by the Lender for any reason insufficient to carry out the terms of this Agreement, then from time to time the Borrower will promptly, on demand by the Lender, execute
or procure the execution of such further documents as in the opinion of the Lender are necessary to provide adequate security for the repayment of the Indebtedness.
  
	 	 	 
	 	
21.3        	
Rescission of payments etc. Any discharge, release or reassignment by the Lender of any of the security constituted by, or any of the obligations of a Security Party contained in, a
Finance Document shall be (and be deemed always to have been) void if any act (including, without limitation, any payment) as a result of which such discharge, release or reassignment was given or made is subsequently wholly or partially rescinded
or avoided by operation of any law.
  
	 	 	 
	 	
21.4        	
Certificates Any certificate or statement signed by an authorised signatory of the Lender purporting to show the amount of the Indebtedness
  
	 	 	 

54

	 	
(or any part of the Indebtedness) or any other amount referred to in any Finance Document shall, save for manifest error or on any question of law, be conclusive evidence as against the Borrower of that
amount.

  
	 	 
	 	
21.5        	
Counterparts This Agreement may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.
  
	 	 	 
	 	
21.6        	
Contracts (Rights of Third Parties) Act 1999 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.
  
	 	 	 
	
22        	
Law and Jurisdiction
  
	 	 
	 	
22.1        	
Governing law This Agreement shall in alt respects be governed by and interpreted in accordance with English law.
  
	 	 	 
	 	
22.2        	
Jurisdiction For the exclusive benefit of the Lender, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts.
  
	 	 	 
	 	
22.3        	
Alternative jurisdictions Nothing contained in this Clause 22 shall limit the right of the Lender to commence any proceedings against the Borrower in any other court of competent
jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.
  
	 	 	 
	 	
22.4        	
Waiver of objections The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in
this Clause 22, and any claim that
  
	 	 	 

55

	         	 	
those proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be
enforced in the courts of any other jurisdiction.

  
	 	 	 
	 	
22.5        	
Service of process Without prejudice to any other mode of service allowed under any relevant law, the Borrower:
  
	 	 	 
	 	 	
22.5.1        	
irrevocably appoints Cheeswrights Notaries Public, Bankside House, 107 Leadenhall Street, London EC3A 4HA, United Kingdom as its agent for service of process in relation to any proceedings before the English courts
in connection with this Agreement; and
  
	 	 	 	 
	 	 	
22.5.2        	
agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.
  

56

SCHEDULE 1: Conditions Precedent and Subsequent

Part I: Conditions precedent

	
1        	
Security Parties
  
	 	 
	 	
(a)        	
Constitutional Documents Copies of the constitutional documents of each Security Party together with such other evidence as the Lender may reasonably require that each Security
Party is duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.
  
	 	 	 
	 	
(b)        	
Certificates of good standing A certificate of good standing in respect of each Security Party (if such a certificate can be obtained).
  
	 	 	 
	 	
(c)        	
Board resolutions A copy of a resolution of the board of directors of each Security Party:
  
	 	 	 
	 	 	
(i)        	
approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents; and
  
	 	 	 	 
	 	 	
(ii)        	
authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or despatched under those documents) on its behalf.
  
	 	 	 	 
	 	
(d)        	
Officer’s certificates A certificate of a duly authorised officer of each Security Party certifying that each copy document relating to it specified in this Part I of Schedule 1 is
correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and setting out the names of the directors and officers of that Security Party.
  

57

	 	
(e)        	
Powers of attorney The notarially attested and legalised power of attorney of each Security Party under which any documents are to be executed or transactions undertaken by that
Security Party.
  
	 	 	 
	
2        	
Security and related documents
  
	 	 
	 	
(a)        	
Vessel documents Photocopies, certified as true by a director or the secretary or the duly authorised attorney of the Borrower, of:
  
	 	 	 
	 	 	
(i)        	
the Management Agreement;
  
	 	 	 	 
	 	 	
(ii)        	
the Vessel’s current Safety Construction, Safety Equipment, Safety Radio, Oil Pollution Prevention and Load Line Certificates;
  
	 	 	 	 
	 	 	
(iii)        	
the Vessel’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990 (if required for the Vessel);
  
	 	 	 	 
	 	 	
(iv)        	
the Vessel’s current SMC;
  
	 	 	 	 
	 	 	
(v)        	
the ISM Company’s current DOC;
  
	 	 	 	 
	 	 	
(vi)        	
the Vessel’s current ISSC;
  
	 	 	 	 
	 	 	
(vii)        	
the Vessel’s current IAPPC;
  
	 	 	 	 
	 	 	
(viii)        	
the Vessel’s current Tonnage Certificate;
  
	 	 	 	 
	 	 	
(ix)        	
the Existing Charters;
  
	 	 	 	 
	 	 	
in each case together with all addenda, amendments or supplements.

  
	 	 	 
	 	
(b)        	
Evidence of Borrower’s title Evidence that on the Drawdown Date (i) the Vessel will be at least provisionally registered under the flag stated in Recital (A) in the ownership of the
Borrower and (ii) the Mortgage will be capable of being registered against the Vessel with first priority.
  
	 	 	 

58

	         	
(c)        	
Evidence of insurance Evidence that the Vessel is insured in the manner required by the Security Documents by not later than fifteen (15) days prior to the first Drawdown Date and
that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Lender) the written approval of the Insurances by an insurance adviser appointed by the Lender.
  
	 	 	 
	 	
(d)        	
Confirmation of class A Certificate of Confirmation of Class for hull and machinery confirming that the Vessel is classed +100A1+LMC with Lloyd’s Register of Shipping or such other
classification society as may be acceptable to the Lender in its absolute discretion free of recommendations affecting class.
  
	 	 	 
	 	
(e)        	
Security Documents The Security Documents, together with all other documents required by any of them, including, without limitation, all notices of assignment and/or charge and
evidence that those notices will be duly acknowledged by the recipients.
  
	 	 	 
	 	
(f)        	
Mandates Such duly signed forms of mandate, and/or other evidence of the opening of the Accounts, as the Lender may require.
  
	 	 	 
	 	
(g)        	
Managers’ confirmation The written confirmation of the Managers that, throughout the Facility Period unless otherwise agreed by the Lender, they will remain the commercial and
technical managers of the Vessel and that they will not, without the prior written consent of the Lender, sub contract or delegate the commercial or technical management of the Vessel to any third party and confirming in terms acceptable to the
Lender that, following the occurrence of an Event of Default, all claims of the Managers against the Borrower shall be subordinated to the claims of the Lender under the Finance Documents.
  
	 	 	 

59

	 	
(h)        	
No disputes The written confirmation of the Borrower that there is no dispute under any of the Relevant Documents as between the parties to any such document.
  
	 	 	 
	
3        	
Legal opinions
  
	 	 
	 	
(a)        	
If a Security Party is incorporated in a jurisdiction other than England and Wales or if any Finance Document is governed by the laws of a jurisdiction other than England and Wales, a legal opinion of the legal
advisers to the Lender in each relevant jurisdiction, substantially in the form or forms provided to the Lender prior to signing this Agreement or confirmation satisfactory to the Lender that such an opinion will be given.
  
	 	 	 
	
4        	
Other documents and evidence
  
	 	 
	 	
(a)        	
Drawdown Notice A duly completed Drawdown Notice.
  
	 	 	 
	 	
(b)        	
Process agent Evidence that any process agent referred to in Clause 22.5 and any process agent appointed under any other Finance Document has accepted its appointment.
  
	 	 	 
	 	
(c)        	
Other authorisations A copy of any other consent, licence, approval, authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable
(if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any of the Relevant Documents or for the validity and enforceability of any of the Relevant Documents.
  
	 	 	 
	 	
(d)        	
Fees Evidence that the fees, costs and expenses then due from the Borrower under Clause 9 and Clause 10 have been paid or will be paid by the Drawdown Date.
  
	 	 	 
	 	
(e)        	
“Know your customer” documents Such documentation and other evidence as is reasonably requested by the Lender in order for the Lender to comply with all necessary “know your
customer” or similar
  
	 	 	 

60

identification procedures in relation to the transactions contemplated in the Finance Documents. 

61

Part II: Conditions subsequent

	
1        	
Evidence of Borrower’s title Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the flag stated in Recital (A)
confirming that (a) the Vessel is permanently registered under that flag in the ownership of the Borrower, (b) the Mortgage has been registered with first priority against the Vessel and (c) there are no further Encumbrances registered against the
Vessel.
  
	 	 
	
2        	
Letters of undertaking Letters of undertaking in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or
entry certificates duly endorsed with the interest of the Lender.
  
	 	 
	
3        	
Acknowledgements of notices Acknowledgements of all notices of assignment and/or charge given pursuant to the Security Documents.
  
	 	 
	
4        	
Legal opinions Such of the legal opinions specified in Part I of this Schedule 1 as have not already been provided to the Lender.
  
	 	 
	
5        	
Companies Act registrations Evidence that the prescribed particulars of the Security Documents have been delivered to the Registrar of Companies of Cyprus within the statutory time
limit.
  
	 	 
	
6        	
Mortgagee’s Insurance Fees Payment to the Lender of all fees in relation to inspections, valuations, legal fees and premiums for Mortgagee’s Insurances.
  

62

SCHEDULE 2: Calculation of Mandatory Cost

	
1        	
The Mandatory Cost is an addition to the interest rate to compensate the Lender for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either
case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
  
	 	 
	 	
(a)        	
On the first day of each Interest Period (or as soon as possible thereafter) the Lender shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) in accordance with the paragraphs set out below.
  
	 	 	 
	 	
(b)        	
The Additional Cost Rate for the Lender if lending from an office in the euro-zone will be the percentage notified by the Lender to the Borrower to be its reasonable determination of the cost (expressed as a
percentage of the Loan) of complying with the minimum reserve requirements of the European Central Bank as a result of making the Loan from that office.
  
	 	 	 
	 	
(c)        	
The Additional Cost Rate for the Lender if lending from an office in the United Kingdom will be calculated by the Lender as follows:
  
	 	 	 
	 	 	
(d)        	
where the Loan is denominated in sterling:
  
	 	 	 	
BY + S(Y - Z) + F x 0.01 per cent per annum

  
	 	 	 	
100 - (B + S)
	 	 	 	 
	 	 	
(e)        	
where the Loan is denominated in any currency other than sterling:
  
	 	 	 	
F x 0.01 per cent per annum

  
	 	 	 	300
	 	 	 	 
	 		where:	

  

63

	 	
B 

  	is the percentage of eligible liabilities (assuming these to be in excess of any stated minimum) which the Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of
England to comply with cash ratio requirements;
	 	 
	 	
Y 

  	is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the Loan is an overdue amount, the additional rate of interest specified in Clause 7.8) payable for the relevant Interest
Period on the Loan;
	 	 
	 	
S 

  	is the percentage (if any) of eligible liabilities which the Lender is required from time to time to maintain as interest bearing special deposits with the Bank of England;
	 	 
	 	
Z 

  	is the interest rate per annum payable by the Bank of England to the Lender on special deposits; and
	 	 
	 	
F 

  	is the charge payable by the Lender to the Financial Services Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or the equivalent provisions in any replacement regulations (with, for
this purpose, the figure for the minimum amount in paragraph 2.02b or such equivalent provision deemed to be zero), expressed in pounds per £1 million of the fee base of the Lender.
	 	 
	
2        	
For the purpose of this Schedule:
  
	 	 
	 	
(a)        	
“eligible liabilities” and “special deposits” have the meanings given to them at the time of
application of the formula by the Bank of England;
  
	 	 	 
	 	
(b)        	
“fee base” has the meaning given to it in the Fees Regulations;
  
	 	 	 
	 	
(c)        	
“Fees Regulations” means the regulations governing periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force
from time to time in respect of the payment of fees for the acceptance of deposits.
  
	 	 	 

64

	
3        	
In the application of the formula B, Y, S and Z are included in the formula as figures and not as percentages, e.g. if B=0.5% and Y = 15%, BY is calculated as 0.5. x 15. Each rate calculated in accordance with the
formula is, if necessary, rounded upward to four decimal places.
  
	 	 
	
4        	
If a change in circumstances has rendered, or will render, the formula inappropriate, the Lender shall notify the Borrower of the manner in which the Mandatory Cost will subsequently be calculated. The manner of
calculation so notified by the Lender shall, in the absence of manifest error, be binding on the Borrower.
  

65

SCHEDULE 3: Form of Drawdown Notice 

To: DNB NOR BANK ASA

From: AVSTES SHIPPING CORPORATION 

2008 

Dear Sirs, 

Drawdown Notice

     We refer to the Loan Agreement dated         2008 made between ourselves and yourselves (the “Agreement”).

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

     Pursuant to Clause 4 of the Agreement, we irrevocably request that you advance a Drawing in the sum of [ ] to us on 200 , which is a Business Day, by paying the amount of the advance to [ ].

     We warrant that the representations and warranties contained in Clause 12.1 of the Agreement are true and correct at the date of this Drawdown Notice and will be true and correct on 200 , that no
Default has occurred and is continuing, and that no Default will result from the advance of the sum requested in this Drawdown Notice.

     We select the period of [ ] months as the Interest Period in respect of the said Drawing. 

Yours faithfully
  

    

    

    

   For and on behalf of 

        

        AVSTES SHIPPING CORPORATION

66

IN WITNESS of which the parties to this Agreement have executed this Agreement the

day and year first before written.

	
SIGNED by  	
    ) 

	
duly authorised for and on behalf  	
    ) 

	
of AVSTES SHIPPING  	
    ) 

	
CORPORATION  	
    ) 

	
SIGNED by  	
    ) 

	
duly authorised for and on behalf  	
    ) 

	
of DnB NOR BANK ASA  	
    ) 

67

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